Exhibit 10.6
LOCKHEED MARTIN
SUPPLEMENTARY PENSION PLAN
FOR TRANSFERRED
EMPLOYEES OF GE OPERATIONS
(Effective
June 26, 2008)
ARTICLE
I
PURPOSES OF THE
PLAN
The purposes of
the Lockheed Martin Supplementary Pension Plan for Transferred
Employees of GE Operations (the “Plan”) is to provide
Transferred Employees with a supplemental pension benefit that, in
combination with the Martin Marietta Corporation Retirement Income
Plan II (now the Lockheed Martin Corporation Retirement Income
Plan) or KAPL Inc. Pension Plan for Salaried Employees and
anticipated social security benefits, delivers a total retirement
income equal to a maximum of 60 percent of the employee’s
average compensation over the final three years.
The Plan was
amended and restated effective January 1, 2005, in order to
comply with the requirements of Code section 409A. The amendment
and restatement applied only to the portion of a
Participant’s benefit that is earned or becomes vested on or
after January 1, 2005. The portion of a Participant’s
benefit that was earned and vested prior to January 1, 2005
shall be governed by Appendix A. The Plan is hereby amended and
restated, generally effective June 26, 2008, in order to
clarify certain provisions in accordance with the final Treasury
Regulations issued under Code section 409A and to make other
clarifications with respect to eligibility and benefits.
ARTICLE
II
DEFINITIONS
Unless the
context indicates otherwise, the following words and phrases when
used in this Plan shall have the meanings hereinafter
indicated:
1. BENEFICIARY
— The person or persons designated by the Participant as his
or her beneficiary under the Qualified Pension Plan. If no
beneficiary is designated under the Qualified Pension Plan, or if
no designated beneficiary survives the Participant, the
Participant’s estate shall be the beneficiary.
2. BOARD —
The Board of Directors of Lockheed Martin Corporation.
3. CODE —
The Internal Revenue Code of 1986, as amended.
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4. COMMITTEE
— The committee described in Section 1 of Article
VII.
5. COMPANY
— Lockheed Martin Corporation and its
subsidiaries.
6. ELIGIBLE
EMPLOYEE — An employee of the Company who transferred
employment to Martin Marietta Corporation as a result of the
agreement between Martin Marietta Corporation and General Electric
Company dated November 22, 1992 or who transferred employment
under the Lakeland Transfer Agreement and who meets the eligibility
criteria in Section 1 of Article III, and who satisfies such
additional requirements for participation in this Plan as the
Committee may from time to time establish. The Pension Plans
Administration Committee shall interpret the participation
requirements established by the Committee for all Participants
except elected officers subject to Section 16(b) of the
Securities and Exchange Act of 1934. Determinations of
participation requirements for elected officers shall be made by
the Committee.
7. GRANDFATHERED
2004 BENEFIT — The benefit calculated under the terms of the
Plan in effect prior to January 1, 2005 (attached as Appendix
A), determined as if the Participant had terminated from employment
on December 31, 2004 (or the Participant’s actual
termination date, if earlier).
8. PARTICIPANT
— An Eligible Employee who meets the requirements for
participation contained in Article III; the term shall include a
former employee and survivors/beneficiaries whose benefit has not
been fully distributed.
9. PLAN —
The Lockheed Martin Supplementary Pension Plan for Transferred
Employees of GE Operations, or any successor plan.
10. QUALIFIED
PENSION PLAN — The Lockheed Martin Corporation Retirement
Income Plan (“Retirement Income Plan”) or KAPL Inc.
Pension Plan for Salaried Employees (“KAPL Inc. Plan”).
All terms used in this Plan which are defined in the Retirement
Income Plan or KAPL Inc. Plan have the same meanings, unless
otherwise expressly provided in this Plan.
11. SUBSIDIARY
— As to any person, any corporation, association,
partnership, joint venture or other business entity of which 50% or
more of the voting stock or other equity interests (in the case of
entities other than corporation), is owned or controlled (directly
or indirectly) by that entity, or by one or more of the
Subsidiaries of that entity, or by a combination
thereof.
12. YEAR —
The calendar year.
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ARTICLE
III
SUPPLEMENTARY
PENSION BENEFIT
1.
Eligibility . Each Employee who was classified as an
Executive Career Band (“EB”) employee on or prior to
December 31, 1993, who has five or more years of Vesting
Service and who is a participant in the Qualified Pension Plan
shall be eligible to receive benefits under this Article III.
However, except as provided in Section 2.D., an Employee who
retires under the Qualified Pension Plan before the first day of
the month following attainment of age 55 or an Employee who leaves
the Service of the Company before attainment of age 55, shall not
be eligible for a benefit under this Article III.
An Employee who
meets the other requirements specified in this Section shall be
eligible for benefits under this Article III so long as his
assigned position level or position of equivalent responsibility
throughout any consecutive three years of the 15 year period ending
on the last day of the month preceding his termination of service
is at least at the level of a director (or other position
equivalent to General Electric Company’s EB) even though he
is not employed at that level on the date his Service
terminates.
2. Amount of
Benefit .
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A.
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Definitions
. For purposes of
this Section 2, the following terms have the following
meanings:
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Annual
Estimated Social Security Benefit . The annual equivalent of the
maximum possible Primary Insurance Amount payable, after reduction
for early retirement, as an old-age benefit to an employee who
retired at age 62 on January 1 of the calendar year in which
occurred the Employee’s actual date of retirement or death,
whichever is earlier. The Company shall determine the Annual
Estimated Social Security Benefit in accordance with the Social
Security Act in effect at the end of the calendar year preceding
such January 1.
If an Employee
has less than 35 years of Credited Service, the Annual Estimated
Social Security Benefit determined under the above paragraph is
multiplied by a factor, the numerator of which is the number of
years of the Employees’ Credited Service to his or her date
of retirement or death, whichever is earlier, and the denominator
of which is 35.
The Annual
Estimated Social Security Benefit shall be adjusted to include any
social security, severance, or similar benefit provided under
foreign law or regulations as the Committee may prescribe by rules
and regulations.
Annual Pension
Payable under the Qualified Pension Plan . The sum of:
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(1)
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(i) the annual
normal, early or late retirement benefit under Article V of the
Qualified Pension Plan, including the Personal Pension Account
(excluding the
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regular supplement
under Article V(4) of the Qualified Pension Plan), or (ii) the
normal, optional or disability retirement benefit under the RIP II
or KAPL Annex of the Qualified Pension Plan, less
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(2)
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to the extent the Committee so
determines, the benefit payable under any other pension plan
contract, or policy of the Plan Sponsor (whether qualified or
non-qualified), or government program attributable to periods of
service for which Credited Service is granted by the Committee for
the determination of the benefit under this Plan or is credited by
the Qualified Pension. All such amounts shall be determined before
applying any reduction factors for Early, Optional or Disability
Retirement, for election of any optional form of Pension at
retirement, a qualified domestic relations order(s), if any, or in
connection with any other adjustment or supplement made pursuant to
the Qualified Pension Plan or any other pension plan.
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For purposes of
this paragraph, the Employee’s Pension shall include the
Personal Pension Account Annuity payable to the Employee or the
Employee’s spouse on the date of the Employee’s
retirement or death, regardless of whether such annuity commenced
on such date.
Annual
Retirement Income . For Employees who retire or
die in active Service on or after April 5, 1993, the amount
determined by multiplying 1.75% of Average Annual Compensation by
the number of years of Credited Service completed at the date of
retirement or death, whichever is earlier.
Average Annual
Compensation . One-third of the
Employee’s Compensation for the highest consecutive three
years during the last 10 years immediately preceding his date of
retirement or death, whichever is earlier. In computing Average
Annual Compensation, normal straight-time earnings shall be
substituted for actual Compensation for any month in which such
normal straight-time earnings are greater.
Compensation
. Salary
(including any deferred salary approved by the Committee as
compensation for purposes of this Plan) plus:
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(1)
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For persons then eligible for
Incentive Compensation, the total amount of any Management
Incentive Compensation Plan earnings, unless such Incentive
Compensation is excluded by the Board or a committee
thereof.
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(2)
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For persons who would then
have been eligible for Incentive Compensation if they had not been
participants in a Sales Commission Plan or other variable
compensation plan, the total amount of sales commissions (or other
variable compensation earned unless such compensation is excluded
by the Board or a committee thereof);
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(3)
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For all other persons, the
sales commissions and other variable compensation earned to the
extent such earnings were then included under the Qualified Pension
Plan, plus any amounts (other than salary and those mentioned in
clauses (1) through (3) above) which were then included
as compensation under the Qualified Pension Plan except any amounts
which the Committee may exclude from the computation of
“Compensation” and subject to the powers of the
Committee with respect to payment of benefits.
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The Committee
shall specify the basis for determining an Employee’s
Compensation for any portion of the three years used to compute the
Employee’s Average Annual Compensation during which the
Employee was not employed by an employer participating in this
Plan.
Credited
Service . Credited Service has the
same meaning as in the Qualified Pension Plan. For periods before
January 1, 1976, Credited Service as a full-time Employee also
includes all Service credited under the Qualified Pension Plan for
any period during which the employee was a full-time Employee for
purposes of the Qualified Pension Plan. Credited Service also
includes:
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(1)
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Any period of Service with the
Company or an Affiliate as the Committee may otherwise provide by
rules and regulations issued with respect to this Plan;
and
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(2)
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Any period of service with
another employer as the Board may approve, if any conditions
specified in such approval have been met.
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B.
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Normal Retirement
Benefit . Subject to the limitations
in Section G and Section 1 of Article VII, the benefit payable
to an eligible Employee who retires on or after his or her normal
retirement date under the Plan, shall be the excess, if any, of the
employee’s Annual Retirement Income, over the sum
of
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(1)
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The Employee’s Annual
Pension Payable under the Qualified Pension Plan (including the
Personal Pension Account Annuity and excluding any supplements
payable under the Qualified Pension Plan) (calculated as a
five-year certain annuity),
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(2)
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1
/
2
of
the Employee’s Annual Estimated Social Security
Benefit,
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(3)
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the benefit payable from the
Lockheed Martin Corporation Supplemental Retirement
Plan.
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C. Early,
Optional or Disability Retirement . Subject to the limitations
in Section G and Section 1 of Article VII, the benefit payable
to an eligible Employee who, after reaching age 60, retires on an
optional retirement date under the Qualified Pension Plan shall be
computed in the manner provided by Section B (for an employee
retiring on his or her normal retirement date) but taking into
account only Credited Service and Average Annual Compensation to
the actual date of optional retirement. The annual benefit payable
to an eligible Employee who, after reaching
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age 55 (but before reaching
age 60), retires under the early retirement provisions of the
Qualified Pension Plan shall equal the amount in section B but
taking into account only Credited Service and Average Annual
Compensation to the Employee’s actual termination of
employment and reduced for early retirement using the early
retirement reduction factor under Article V(2) of the Qualified
Pension Plan.
Subject to the
requirements of Section 1 of Article VII, the annual benefit
payable to an eligible Employee who has satisfied the eligibility
requirements to receive a Disability Pension under the RIP II or
KAPL Annex of the Qualified Pension Plan (to the extent consistent
with the requirements of Code section 409A(a)(2(C)) shall be
computed in the manner provided by Section B (for an Employee
retiring on his normal retirement date) taking into account only
Credited Service and Average Annual Compensation to the actual date
of disability retirement and not reduced for the Disability
Supplement in the RIP II or KAPL Annex of the Qualified Pension
Plan. In the case of an eligible Employee whose date of retirement
precedes the first day of the month after reaching age 60 the Plan
benefit shall then be reduced by 12%.
Subject to
provisions of Section 1 of Article VII, if the Disability
Pension payable to the Employee under the Qualified Pension Plan is
discontinued as a result of the Employee’s disability ceasing
before the Employee reaches age 60, the benefit provided under this
Section C. shall also be discontinued.
D. Special
Benefit Protection for Certain Employees . Subject to the
provisions of Section 1 of Article VII, a former Employee
whose Service with the Company is terminated on or after
December 31, 1994 and after completing 25 or more years of
Vesting Service, who does not withdraw his required or voluntary
contributions from the Qualified Pension Plan before retirement,
shall be eligible for a benefit under this Plan commencing upon the
later of termination of employment with the Company and the
attainment of age 60 if:
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(1)
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the Employee’s Service
is terminated for transfer to a successor employer and
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(2)
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the Employee does not retire
under the Qualified Pension Plan until the later of
(1) termination of service with the successor employer and
(2) the first of the month after reaching age 60.
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In determining the
benefit under this Plan, the Average Annual Compensation shall be
based on the last 120 completed months with the successor employer
before the Employee’s Service termination date and the Annual
Estimated Social Security Benefit shall be determined as though the
Employee’s retirement date was the date of
termination.
E. Survivor
Benefits . Subject Section 1 of Article VII, if a survivor
benefit applies with respect to the past and future service annuity
portion of an Employee’s Annual Pension payable under the
Qualified Pension Plan, such survivor benefit shall automatically
apply to any benefit which he or she may be eligible under this
Plan. The Employee’s benefit shall be adjusted and
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paid in the
same manner as such pension payable under the Qualified Pension
Plan is adjusted and paid on account of such survivor benefit.
Payments to the survivor shall commence as soon as administratively
practicable following the later of: (1) the Employee’s
55 th
birthday, or
(2) the Employee’s date of death.
Subject to the
provisions of Section 1 of Article VII, if an eligible
Employee dies in active Service, or following retirement with a
benefit from this Plan, and a death benefit (other than a return of
Employee contributions with interest including an Employee’s
Personal and Voluntary Pension Account) is payable to the
beneficiary or Surviving Spouse of such Employee under the
Qualified Pension Plan, a death benefit shall also be payable to
the beneficiary or Surviving Spouse under this Plan as
follows:
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(1)
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Any such
death benefit payable to a surviving spouse under this Plan shall
equal 50% of the Employee’s Annual Retirement Income under
this Plan reduced by (1) 100% of the Employee’s
preretirement surviving spouse benefit payable or other lump sum
benefit under the Qualified Pension Plan, (2) 25% of the
Employee’s Annual Estimated Social Security Benefit,
(3) the Employee’s Personal Pension Account benefit, and
(4) the benefit payable under the Lockheed Martin Corporation
Supplemental Retirement Plan. Payments to the surviving spouse
shall commence as soon as administratively practicable after the
later of: (1) the Employee’s 55 th
birthday, or
(2) the Employee’s date of death.
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(2)
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Any such death benefit payable
to a surviving spouse under this Plan shall take into account only
Credited Service and Average Annual Compensation to the earlier of
the Employee’s death or termination of employment and will be
reduced for early retirement using the early retirement reduction
factors under Article V(2) of the Qualified Pension
Plan.
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(3)
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Subject to
the provisions of Section 1 of Article VII, any such benefit
payable to a surviving spouse shall be paid as soon as
administratively practicable after the later of: (1) the
Employee’s 55 th
birthday, or
(2) the Employee’s date of death and will be paid in
accordance with the payment provisions of the RIP or KAPL Annex of
the Qualified Pension Plan. If benefits from the Qualified Pension
Plan are paid under the payment provisions of the RIP or KAPL Annex
of the Qualified Pension Plan, then benefits from this Plan will be
paid in the same payment form.
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G.
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Limitations on
Benefits .
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(a)
Notwithstanding any provision of this Plan to the contrary, if the
sum of:
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(1)
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The annual benefit (calculated
before applying any reductions for early retirement or additions
for any supplements payable under the Qualified Pension Plan, and
prior to any calculation for disability retirement reductions)
otherwise payable to an Employee under this Plan;
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(2)
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The Employee’s Annual
Pension Payable under the Qualified Pension Plan (including the
Personal Pension Account Annuity) (calculated as a five-year
certain annuity);
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(3)
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100% of the Annual Estimated
Social Security Benefit before any adjustment for less than 35
years of Pension Benefit Service;
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(4)
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the Employee’s annual
benefit under the Lockheed Martin Corporation Supplemental
Retirement Plan; and
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to the extent the
Committee so determines, the benefit payable under any other
pension plan contract, or policy of the Plan Sponsor (whether
qualified or non-qualified), or government program attributable to
periods of service for which Credited Service is granted by the
Committee for the determination of the benefit under this Plan or
is credited by the Qualified Pension exceeds 60% of his or her
Annual Average Compensation, the benefit payable under this Plan
shall be reduced by the amount of the excess.
(b)
Notwithstanding any provision in this Plan to the contrary, the
amount of the benefit payable and any death benefit payable to or
on behalf of any Employee who is or was an Officer of the Company
on the date of his termination of employment or death, whichever is
earlier, shall be determined according to such general rules and
regulations as a Committee appointed by the Board of Directors may
adopt, subject to the limitation that any such benefit or death
benefit may not exceed the amount which would be payable under this
Plan in the absence of such rules and regulations.
H. Adjustments
Following Retirement . If the Pension payable under the
Qualified Pension Plan to any Employee is increased following the
Employee’s retirement as a result of a general increase in
the Pensions payable to retired employees under that plan, no such
increase will be made under this Plan.
I.
Non-duplication of Benefits . Benefits under this Article
III are intended to supplement the Participant’s actual
benefit under the Qualified Pension Plan as necessary to provide
the Participant with the full benefit the Participant would have
received under the Qualified Pension Plan with the special
adjustments described above. To prevent duplication of benefits,
the full benefit under the Qualified Pension Plan and the enhanced
benefit described above shall be calculated without reduction for
Code section 415 and Code section 401(a)(17), then reduced by the
benefit payable from the Qualified Pension Plan and further reduced
by the benefit payable from the Lockheed Martin Corporation
Supplemental Retirement Plan, then reduced by the Grandfathered
2004 Benefit. Participants have no right to duplicate benefits with
respect to the same period of service, and the Committee may make
such adjustments to the benefits under this Plan as the Committee
deems necessary to prevent duplication of benefits.
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ARTICLE
IV
PAYMENT OF
BENEFITS
1. Vesting
. Except as provided in Article V, and subject to the
Company’s right to discontinue the Plan as provided in
Article VI, a Participant shall have a non-forfeitable interest in
benefits payable under this Plan to the same extent as benefits are
vested under the applicable Qualified Pension Plan. As provided in
Article V, if a Participant acquires a right to receive payments
under this Plan, such right shall be no greater than the right of
any unsecured general creditor of the Company.
2. Form of
Payment . A Participant may elect to receive benefits in any
annuity form that is available under a Qualified Pension Plan on
the date of the Participant’s election that has been
designated by the Senior Vice President, Human Resources as
available for election under this Plan, provided (i) the
election is filed with the Company in writing no later than the
later of (a) December 16, 2005 and (b) the date that
is 30 days after the Participant commences participation in the
Plan, and (ii) the Participant’s employment has not
terminated prior to filing the election. If the Participant has not
validly elected a form of payment, (i) an unmarried
Participant shall be deemed to have elected payment in the form of
a monthly annuity for the life of the Participant with no further
payments to anyone after his or her death, and (ii) a married
Participant shall be deemed to have elected payment in the form of
a reduced monthly annuity for the life of the Participant with,
after the Participant’s death, a 50% survivor annuity for the
life of the Participant’s spouse. No lump sum payment form is
available under this Plan. Actuarial adjustments shall be based on
the factors set forth in the Qualified Pension Plan. All elections
under this Section 2 must be made in the form and manner
prescribed by the Company. Benefits paid in a form described in
this Section 2 shall commence as soon as administratively
practicable following the later of (i) the month in which the
Participant terminates employment, or (ii) the month in which
the Participant attains age 55. Notwithstanding the foregoing,
benefits paid on account of the termination of employment of a
Participant who is reasonably determined by the Company to be a
“specified employee” within the meaning of Code section
409A(a)(2)(B)(i), shall not commence before six (6) months
following the month in which the Participant terminates employment.
No interest shall be paid between the date of termination of
employment and the payment date.
Subject to the
provisions of Section 1 of Article VII, if an Employee’s
pension benefit under the Qualified Pension Plan is suspended for
any month in accordance with the re-employment provisions thereof,
the Employee’s benefit under this Plan for that month shall
likewise be suspended.
Cash-out of
Small Benefits . Notwithstanding the above,
if the Value of the sum of the benefits payable to a Participant or
Beneficiary under this Plan does not exceed $10,000, all such
benefits will be paid in a single lump sum payment in full
discharge of all liabilities with respect to such benefits. For
purposes of this Section, Value shall be determined as of
the
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Participant’s
termination of employment or attainment of age fifty-five (55), as
applicable, and shall mean the present value of a
Participant’s or Beneficiary’s benefits, excluding the
Grandfathered 2004 Benefit, based (i) for terminations prior
to January 1, 2008 upon the applicable mortality table and
applicable interest rate in Code section 417(e)(3)(ii), or
(ii) for terminations on or after January 1, 2008, upon
the applicable mortality table and applicable interest rate under
Code section 417(e)(3), as amended by the Pension Protection Act of
2006, for the calendar month preceding the Plan Year in which the
termination of employment or attainment of age fifty-five
(55) occurs. Notwithstanding the foregoing sentence, benefits
paid under this Section 2. to a Participant who is reasonably
determined by the Company to be a “specified employee”
within the meaning of Code section 409A(a)(2)(B)(i), shall not
commence before six (6) months following the later of
(i) the month in which the Participant terminates employment,
or (ii) the month in which the Participant attains age
fifty-five (55). No interest shall be paid between the date of
termination of employment or attainment of age fifty-five (55), as
applicable, and the payment date.
Prospective
Elections . Participants may elect to
change the form of payment of benefits or further delay the
commencement of benefits as provided in this Section 2. All
prospective elections must be made in the form and manner
prescribed by the Company. This provision does not apply to
Surviving Spouses or Beneficiaries. Subject to the provisions of
Section 1 of Article VII, other changes in the form of
benefit, including changes between actuarially equivalent forms of
benefit, if any, may be made only as determined by the Senior Vice
President, Human Resources, of the Company in accordance with Code
section 409A.
Form of
Payment . A Participant may elect to
delay the commencement of payments or to receive payment in any
other annuity form designated by the Senior Vice President, Human
Resources, of the Company, provided that such election is made in
writing not less than twelve (12) months before the date the
payment would have first commenced under the Participant’s
prior election. In addition, the first payment under the new
election must commence no earlier than sixty (60) months from
the date when the payment would have first commenced under the
Participant’s prior election.
If a Participant
participates in more than one supplemental pension plan sponsored
by the Corporation, the Participant must make a single election
that shall apply to his or her benefits under all such plans with
respect to the form of annuity and with respect to prospective
changes of payment under this Section 2 of Article
IV.
Notwithstanding
the above, for periods prior to January 1, 2009, (or such
later date as may be provided by the Internal Revenue Service in
guidance of general applicability), the Senior Vice President,
Human Resources may provide alternative rules for elections with
respect to the commencement of payment and form of payment,
provided that such rules conform to Code section 409A and Internal
Revenue Service guidance issued thereunder.
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3.
Deductibility of Payments . Subject to the provisions of
Section 1 of Article VII, in the event that the payment of
benefits under Section 2 would prevent the Company from
claiming an income tax deduction with respect to any portion of the
benefits paid, the Committee shall have the right to modify the
form and timing of distributions as necessary to maximize the
Company’s tax deductions. In the exercise of its discretion
to adopt a modified distribution schedule, the Committee shall
undertake to have distributions made at such times and in such
amounts as most closely approximate the payment method described in
Section 2, consistent with the objective of maximum
deductibility for the Company. The Committee shall have no
authority to reduce a Participant’s accrued benefit under
this Plan or to pay aggregate benefits less than the
Participant’s accrued benefit in the event that all or a
portion thereof would not be deductible by the Company.
4. Change of
Law . Notwithstanding anything to the contrary herein, subject
to the provisions of Section 1 of Article VII, if the
Committee determines in good faith, based on consultation with
counsel, that the federal income tax treatment or legal status of
this Plan has or may be adversely affected by a change in the Code,
Title I of the Employee Retirement Income Security Act of 1974, or
other applicable law or by an administrative or judicial
construction thereof, the Committee may direct that the benefits of
affected Participants or of all Participants be distributed as soon
as practicable after such determination is made, to the extent
deemed necessary or advisable by the Committee to cure or mitigate
the consequences, or possible consequences of, such change in law
or interpretation thereof.
5.
Acceleration upon Change in Control .
Notwithstanding
any other provision of the Plan, the accrued benefit of each
Participant shall be one-hundred percent (100%) vested and
distributed in a single lump sum within fifteen (15) calendar
days following a “Change in Control.”
For purposes of
this Plan, a Change in Control shall include and be deemed to occur
upon the following events:
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(a)
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A tender offer or exchange
offer is consummated for the ownership of securities of the Company
representing 25% or more of the combined voting power of the
Company’s then outstanding voting securities entitled to vote
in the election of directors of the Company.
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(b)
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The Company is
merged, combined, consolidated, recapitalized or otherwise
reorganized with one or more other entities that are not
Subsidiaries and, as a result of the merger, combination,
consolidation, recapitalization or other reorganization, less than
75% of the outstanding voting securities of the surviving or
resulting corporation shall immediately after the event be owned in
the aggregate by the stockholders of the Company (directly or
indirectly), determined on the basis of record ownership as of the
date of determination of holders entitled
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to vote on the
action (or in the absence of a vote, the day immediately prior to
the event).
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(c)
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Any person (as this term is
used in Sections 3(a)(9) and 13(d)(3) of the Exchange Act, but
excluding any person described in and satisfying the conditions of
Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more
of the combined voting power of the Company’s then
outstanding securities entitled to vote in the election of
directors of the Company.
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(d)
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At any time within any period
of two years after a tender offer, merger, combination,
consolidation, recapitalization, or other reorganization or a
contested election, or any combination of these events, the
“Incumbent Directors” shall cease to constitute at
least a majority of the authorized number of members of the Board.
For purposes hereof, “Incumbent Directors” shall mean
the persons who were members of the Board immediately before the
first of these events and the persons who were elected or nominated
as their successors or pursuant to increases in the size of the
Board by a vote of at least three-fourths of the Board members who
were then Board members (or successors or additional members so
elected or nominated).
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(e)
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The stockholders of the
Company approve a plan of liquidation and dissolution or the sale
or transfer of substantially all of the Company’s business
and/or assets as an entirety to an entity that is not a
Subsidiary.
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Notwithstanding
the foregoing, no distribution shall be made solely on account of a
Change in Control and prior to the benefit commencement date
specified in Section 2 of Article V unless the Change in
Control is an event qualifying for a distribution of deferred
compensation under Section 409A(a)(2)(A)(v) of the
Code.
This
Section 5 shall apply only to a Change in Control of Lockheed
Martin Corporation and shall not cause immediate payout of benefits
under this Plan in any transaction involving the Company’s
sale, liquidation, merger, or other disposition of any
subsidiary.
The Committee may
cancel or modify this Section 5 at any time prior to a Change
in Control. In the event of a Change in Control, this
Section 5 shall remain in force and effect, and shall not be
subject to cancellation or modification for a period of five years,
and any defined term used in Section 5 shall not, for purposes
of Section 5, be subject to cancellation or modification
during the five year period
6. Tax
Withholding . To the extent required by law, the Company shall
withhold from benefit payments hereunder any Federal, state, or
local income or payroll taxes required to be withheld and shall
furnish the recipient and the applicable government agency or
agencies with such reports, statements, or information as may be
legally required. No benefit payments
12
GE
SERP
shall be made to the
Participant until the withholding obligation for taxes under Code
sections 3101(a) and 3101(b) has been satisfied with respect to the
Participant.
7. Retiree
Medical Withholding . A Participant may direct the Company to
withhold from the Participant’s benefit payments hereunder
all or a portion of the amount that the Participant is required to
pay for Company-provided retiree medical coverage.
ARTICLE
V
EXTENT OF
PARTICIPANTS’ RIGHTS
1. Unfunded
Status of Plan . This Plan constitutes a mere contractual
promise by the Company to make payments in the future, and each
Participant’s rights shall be those of a general, unsecured
creditor of the Company. No Participant shall have any beneficial
interest in any specific assets that the Company may hold or set
aside in connection with this Plan. Notwithstanding the foregoing,
to assist the Company in meeting its obligations under this Plan,
the Company may set aside assets in a trust or trusts described in
Revenue Procedure 92-64, 1992-2 C.B. 422, and the Company may
direct that its obligations under this Plan be satisfied by
payments out of such trust or trusts. The assets of any such trust
will remain subject to the claims of the general creditors of the
Company. It is the Company’s intention that the Plan be
unfunded for Federal income tax purposes and for purposes of Title
I of the Employee Retirement Income Security Act of
1974.
2.
Nonalienability of Benefits . A Participant’s rights
under this Plan shall not be assignable or transferable and any
purported transfer, assignment, pledge or other encumbrance or
attachment of any payments or benefits under this Plan, or any
interest therein shall not be permitted or recognized, other than
the designation of, or passage of payment rights to, a Beneficiary
or transfer of an interest in this Plan to a Participant’s
former spouse incident to divorce under a Qualified Domestic
Relations Order.
3.
Forfeiture . If, following the date on which a Participant
shall retire under this Plan, a Participant shall engage in the
operation or management of a business, whether as owner,
stockholder, partner, officer, employee, consultant, or otherwise,
which at such time is in competition with the Company or any of its
subsidiaries, or shall disclose to unauthorized persons information
relative to the business of the Company or any of its subsidiaries
which the Participant shall have reason to believe is confidential,
or otherwise act, or conduct oneself, in a manner which the
Participant shall have reason to believe is contrary to the best
interest of the Company, or shall be found by the Committee to have
committed an act during the term of the Participant’s
employment which would have justified the Participant being
discharged for cause, the Participant’s retirement benefit
under this Plan shall terminate. Application of this Section will
be at the discretion of the Committee.
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ARTICLE
VI
AMENDMENT OR
TERMINATION
1.
Amendment . The Board or its authorized delegate may amend,
modify, suspend or discontinue this Plan at any time subject to any
shareholder approval that may be required under applicable law,
provided, however, that no such amendment shall have the effect of
reducing a Participant’s accrued benefit or postponing the
time when a Participant is entitled to receive a distribution of
his accrued benefit unless each affected Participant consents to
such change.
2.
Termination . Subject to the provisions of Section 1 of
Article VII, the Board reserves the right to terminate this Plan at
any time and to pay all Participants their accrued benefits in a
lump sum or to make other provisions for the payment of benefits
(e.g. purchase of annuities) immediately following such termination
or at such time thereafter as the Board may determine.
3. Transfer of
Liability . The Board reserves the right to transfer to another
entity all of the obligations of Company with respect to a
Participant under this Plan if such entity agrees pursuant to a
binding written agreement with the Company or its subsidiaries to
assume all of the obligations of the Company under this Plan with
respect to such Participant.
4. Merger
. The Board reserves the right to merge all or part of this Plan
with or into another plan, provided (1) such other plan
preserves all of the obligations of the Company under this Plan
with respect to suc
