Exhibit 10.7
LOCKHEED MARTIN SUPPLEMENTARY
PENSION PLAN
FOR TRANSFERRED EMPLOYEES OF GE
OPERATIONS
(Effective December 31,
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 was amended and restated, 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. The
Plan is hereby amended and restated effective December 31,
2008 to order to make further clarifications in accordance with the
final Treasury Regulations issued under Code section 409A and to
make other administrative clarifications.
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.
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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 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
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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 the requirements of
Code section 409A, 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,
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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
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 Code
section 409AI, 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%.
, 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 to the extent permitted under Code
section 409A.
D. Special Benefit Protection for
Certain Employees . Subject to the provisions of Code section
409A, 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.
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E. Survivor
Benefits . Subject to the requirements of Code section 409A, 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 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 (but not later than 90 days)
following the later of: (1) the Employee’s 55
th
birthday, or
(2) the Employee’s date of death.
F. Payments Upon Death
.
Subject to the requirements of Code
section 409A, 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 (but no later than 90 days) 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 requirements of
Code section 409A, any such benefit payable to a surviving spouse
shall be paid as soon as administratively practicable (but no later
than 90 days) 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. Limitations on Benefits .
(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, to the extent permitted by Code
section 409A.
(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
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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, to the extent
permitted by Code section 409A. 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.
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 . All
elections under this Section 2 must be made in the form and
manner prescribed by the Senior Vice President, Human Resources. No
election made pursuant to this Section 2 may affect a payment
due in the same calendar year in which the election is made or
accelerate payment into the calendar year in which the election is
made. No lump sum distributions are available under this Plan.
Benefits under this Plan shall be paid in the form of an annuity
commencing as soon as administratively practicable (but no more
than 90 days) 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). Notwithstanding
the foregoing sentence, benefits paid to a Participant who is
reasonably determined by the Company to be a “specified
employee” within the meaning of Code section 409A(2)(B)(i),
shall not commence before the later of (i) six (6) months
following 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.
Selection of Annuity
Form. Prior to his
termination of employment, a Participant may elect to receive
benefits in any actuarially equivalent annuity form that is
available under the applicable 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. If the Participant has not validly elected an
annuity form before his termination of employment (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
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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. Actuarial adjustments shall be
based on the factors set forth in the Qualified Pension
Plan.
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 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 the later of
(i) six (6) months following 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.
No payment shall commence or be made
under this Plan on account of a Participant’s termination of
employment unless the termination of employment constitutes a
“separation from service” under Code section
409A(a)(2)(a)(i).
Prospective Elections
. Participants may elect to further
delay the commencement of benefits as provided in this
Section 2.c. This Section 2.c. does not apply to
Surviving Spouses or Beneficiaries. A new election under this
section shall be made by executing and delivering to the Company an
election in such form as prescribed by the Company. To constitute a
valid election by a Participant making a prospective change to a
previous election, (i) the prospective election must be
executed and delivered to the Company at least twelve
(12) months before the date the first payment would be due
under the Participant’s previous election, and (ii) the
first payment must be delayed by at least sixty (60) months
from the date the first payment would be due under the
Participant’s previous election, and (iii) such change
in election shall not be given effect until twelve (12) months
from the date that the change in election is delivered to the
Company. In the event an election fails to satisfy the provisions
set forth in this paragraph, such election shall be void and, if
such an election is void, payment shall be made in accordance with
the most recent election which was valid. Other changes in the form
of benefit may be made only as determined by the Senior Vice
President, Human Resources, of the Company in accordance with Code
section 409A.
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If a Participant participates in
more than one supplemental pension plan sponsored by the
Corporation, the Participant must make a single election with
respect to the form of annuity that shall apply to his or her
benefits under all such plans 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.
3. Deductibility of Payments
. Subject to the provisions of Code section 409A 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 herein to the contrary, if the Committee
determines in good faith, based on consultation with counsel and in
accordance with the requirements of Code section 409A, 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 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 both an
event qualifying for a distribution of deferred compensation under
Section 409A(a)(2)(A)(v) of the Code and an event qualifying
under this Section 5.
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GE SERP
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 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 spouse, former
spouse, or child incident to divorce under a Qualified Domestic
Relations Order (which shall be interpreted and administered in
accordance with Code sections 414(p)(1)(B) and 409A), provided that
the form of payment designated in such order is an annuity as
provided in Section 2(a) of Article V.
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GE SERP
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.
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 . The Board
reserves the right to terminate this Plan at any time and at such
times that the Board reasonably determines in its discretion is
appropriate and conforms to the requirements of Code section 409A,
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 such
Participant and (2) each Participant in the P
