8-KMaterial AgreementsExhibits & Filings

LOCKHEED MARTIN CORP 8-K Report, Material Agreement (Feb 2, 2005)

Filed February 2, 2005For Securities:LMT

Summary

Lockheed Martin Corporation (LMT) filed an 8-K on February 2, 2005, detailing executive compensation for the fiscal year 2004. The report clarifies that LMT's executive officers are at-will employees without formal employment agreements. Their compensation is determined by the Management Development and Compensation Committee and the Stock Option Subcommittee, an independent committee of the Board of Directors. The primary focus of the filing is the structure and award of annual cash incentive bonuses under the Management Incentive Compensation Plan (MICP) for 2004. This plan allows executives to earn incentives based on a target percentage of their base salary, which is then adjusted based on both corporate/business unit performance and individual contributions. The performance metrics considered are broad, encompassing financial indicators like orders, sales, and earnings, as well as operational aspects such as contract performance, new business won, backlog, cost savings (LM21 Program), profit margins, and non-financial factors like mission success and workforce diversity.

Key Highlights

  • 1Executive officers are at-will employees with no formal employment agreements.
  • 2Annual cash incentive compensation is awarded under the Management Incentive Compensation Plan (MICP).
  • 3Incentive bonuses are based on a target percentage of base salary, adjusted for corporate/business unit and individual performance.
  • 4Performance evaluation for 2004 included financial metrics (orders, sales, earnings, cash), operational metrics (contract performance, new business, backlog, cost savings, profit margins), and non-financial factors (mission success, diversity).
  • 5The Management Development and Compensation Committee and Stock Option Subcommittee oversee executive compensation and approve awards.
  • 6Detailed information on 2004 incentive bonuses and 2004 year-end base salaries for named executive officers is provided in Exhibit 99.
  • 7Additional compensation details for 2004 are expected to be disclosed in the March 2005 proxy statement.

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