8-KOther EventsExhibits & Filings

LOCKHEED MARTIN CORP 8-K Report, Temporary Suspension of Trading Under Employee Benefit Plans (Jul 25, 2016)

Filed July 25, 2016For Securities:LMT

Summary

This Form 8-K filing by Lockheed Martin Corporation (LMT) on July 25, 2016, primarily concerns the "Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans" (often referred to as a blackout period). This notice is related to an ongoing "Exchange Offer" where Lockheed Martin is offering to exchange shares of its common stock for shares of Abacus Innovations Corporation ("Splitco"). The key takeaway for investors is the potential imposition of a trading restriction, or blackout period, for directors and executive officers, which is anticipated to begin around August 9, 2016, and last for approximately one to two weeks. This restriction, mandated by the Sarbanes-Oxley Act, could prohibit insiders from trading LMT common stock or related derivative securities acquired through their employment or service. The imposition of this blackout period is contingent on specific conditions related to the participation rate of employees in the Exchange Offer through their benefit plans. While this may temporarily limit insider trading activity, it is a procedural measure tied to the Splitco exchange and not indicative of fundamental business changes. Investors should note that this filing is informational and provides notice of a potential, not guaranteed, trading restriction.

Key Highlights

  • 1Lockheed Martin is notifying directors and executive officers of a potential blackout period affecting their trading of company stock.
  • 2The potential blackout period is directly linked to an ongoing Exchange Offer involving shares of Abacus Innovations Corporation (Splitco).
  • 3If imposed, the trading restriction is expected to commence around August 9, 2016, and last for approximately one to two weeks.
  • 4The blackout period is a regulatory requirement (Sarbanes-Oxley Act) aimed at preventing insider trading during sensitive corporate actions.
  • 5Imposition of the blackout period is conditional on employee participation in the Exchange Offer via company benefit plans reaching a certain threshold (50% of US participants).
  • 6During the potential blackout period, directors and officers may be restricted from buying or selling LMT common stock or derivatives, with certain exceptions.
  • 7Exceptions to the trading restriction include participating in the Exchange Offer itself, making gifts of LMT stock, and automatic transactions like company matching contributions.

Frequently Asked Questions

The primary reason for this 8-K filing is to officially notify Lockheed Martin's directors and executive officers about a potential temporary suspension of trading in their employee benefit plans, commonly known as a 'blackout period'. This is triggered by an ongoing Exchange Offer related to the company's spin-off of Abacus Innovations Corporation (Splitco).

The blackout period is not guaranteed. It will only be imposed if at least 50% of the participants in Lockheed Martin's U.S. individual account plans direct their trustee to exchange company stock for Splitco shares. If this condition is met, the blackout period is anticipated to begin around August 9, 2016, and last for roughly one to two weeks, ending during the week of August 19, 2016. Lockheed Martin will provide further notifications regarding the imposition and exact dates.

If the blackout period is imposed, directors and executive officers who are subject to Section 16 of the Securities Exchange Act may be prohibited from purchasing, selling, or otherwise acquiring or transferring Lockheed Martin common stock or derivative securities that were acquired in connection with their service or employment.

Yes, there are exceptions. The restrictions generally do not prohibit directors and executive officers from participating in the Exchange Offer itself, making gifts of Lockheed Martin common stock, or from automatic transactions such as company matching contributions made in company stock.