Summary
This 8-K filing from Lockheed Martin Corporation (LMT) on February 2, 2016, details adjustments to the annual and long-term incentive compensation packages for its named executive officers (NEOs) and other executives for 2016. The primary driver for these adjustments is the previously announced definitive agreement to separate and combine the Information Systems & Global Solutions (IS&GS) business segment with Leidos Holdings, Inc. The filing outlines modifications to the award agreements for restricted stock units (RSUs), performance stock units (PSUs), and long-term incentive performance (LTIP) awards to account for potential employee impacts stemming from this divestiture. Key changes include provisions for pro-rata vesting or payout in the event of termination due to the divestiture, and adjustments to performance metric calculations to exclude the impact of acquisitions or divestitures exceeding $1 billion. Additionally, the 2016 long-term incentive grant allocation for Sondra Barbour, Executive Vice President of IS&GS, has been adjusted to consist entirely of RSUs, reflecting her leadership role in the divested segment. These changes aim to ensure fairness and appropriate compensation adjustments in light of significant corporate restructuring.
Key Highlights
- 1Lockheed Martin approved 2016 annual and long-term incentive packages for executives.
- 2Incentive plans were modified to address the pending divestiture of the IS&GS business segment to Leidos.
- 3RSU, PSU, and LTIP award agreements revised to include pro-rata vesting/payout for employees impacted by divestiture.
- 4Performance metrics in PSU and LTIP awards will exclude the impact of acquisitions/divestitures over $1 billion.
- 5Sondra Barbour, EVP IS&GS, will receive 100% of her 2016 LTI grant in RSUs.
- 6Other NEOs' LTI allocation remains unchanged: 30% RSUs, 50% PSUs, 20% LTIP.
- 7A provision was added for forfeiture of awards in case of executive termination for misconduct.