What is the main purpose of the amendment to the Management Incentive Compensation Plan?

The primary purpose of the amendment is to increase the targeted percentage of base salary that certain management participants can receive as incentive compensation. This is intended to ensure that Lockheed Martin's executive incentive targets remain competitive when compared to similar positions within a defined group of peer companies (the Comparator Group).

When do these changes to the incentive plan take effect?

The amendments to the Management Incentive Compensation Plan are effective for the 2005 plan year.

Who is affected by the increase in targeted incentive compensation percentages?

The increase specifically impacts specified management participant positions, including the Chief Executive Officer and Executive Vice Presidents. The targeted percentage can range from 15% to 125% of base salary, depending on the participant's role.

How is the actual incentive compensation determined, beyond the targeted percentage?

The actual incentive compensation paid is determined by a range from 0% to 195% of the targeted percentage. This final amount is adjusted based on assessments of corporate and business area performance, as well as the individual's contribution to that performance, as evaluated by the Management Development and Compensation Committee and the Stock Option Subcommittee.

LMT 8-K: Material Agreements

Summary

This 8-K filing from Lockheed Martin Corporation (LMT) dated June 28, 2005, reports on an amendment to the company's Management Incentive Compensation Plan (MICP). The key change, effective for the 2005 plan year, is an increase in the targeted percentage of base salary that specified management participants, including top executives, can earn as incentive compensation. This adjustment aims to better align LMT's executive incentive targets with those of peer companies within its defined Comparator Group, suggesting a strategic move to remain competitive in attracting and retaining executive talent.

Key Highlights

1Lockheed Martin amended its Management Incentive Compensation Plan (MICP) on June 23, 2005.
2The amendments are effective for the 2005 plan year.
3Key management positions, including the CEO and Executive Vice Presidents, will see an increased targeted percentage of base salary payable as incentive compensation.
4The MICP allows for incentive compensation to range from 0% to 195% of the targeted percentage, based on individual, business unit, and corporate performance.
5The increase in targeted percentages is intended to align LMT's executive compensation more closely with its Comparator Group.
6The Comparator Group consists of 25 publicly held companies of similar size, complexity, and quality.

LOCKHEED MARTIN CORP 8-K Report, Material Agreement (Jun 28, 2005)

Summary

Key Highlights

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