EXHIBIT 10(g)
[LOCKHEED MARTIN CORPORATION STATIONERY]
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
[[insert date] ]
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Re: Lockheed Martin Corporation 1995 Omnibus Performance Award
Plan: Long-Term Incentive Performance Award ([insert date]
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Performance Period)
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Dear __________________________________:
On behalf of the Stock Option Subcommittee (the "Subcommittee") of the
Board of Directors of Lockheed Martin Corporation, I am pleased to announce that
you have been granted a Long-Term Incentive Performance Award under the
Corporation's 1995 Omnibus Performance Award Plan (the "Plan"). The purpose of
this letter is to serve as the Award Agreement under such Plan and to set forth
your Target Award as well as the terms and conditions to the payment of your
Target Award. Additional terms and conditions are set forth in the Plan and in
the Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. You should retain the Prospectus and the attached copy of
the Plan in your records.
PLEASE NOTE THAT, FOR THIS AWARD TO BE EFFECTIVE, YOU MUST PROMPTLY
SIGN AND RETURN A COPY OF THIS AWARD AGREEMENT.
The following points explain in summary fashion how the Award granted
to you under this Award Agreement shall be calculated and paid. These summary
points are subject to the terms and conditions of this Award Agreement and to
the Plan.
. You have been granted a Target Award in the amount of
$_____________. Your actual Award may be larger or smaller than
your Target Award (from $0 to $________________), depending on
the Corporation's performance as measured by
its relative ranking of Total Stockholder Return to Total
Stockholder Return of the companies that comprise the Standard &
Poor's 500 Index.
. You must (as a general rule) remain employed by the Corporation
through [insert date] to receive a payment of any portion of your
actual Award.
. If you remain so employed through [insert date], you shall be
fully vested in 50% of your Award. The amount payable at this
time depends upon the Corporation's performance relative to the
performance of other corporations which comprise the Standard &
Poor's 500 Index. You may elect to receive this portion of your
Award in cash, or you may make an irrevocable election to defer
the payment of this portion of your Award to a later date (in
accordance with rules set by the Subcommittee).
. You must (as a general rule) remain employed by the Corporation
until [insert date] to receive a payment of the remaining 50% of
your Award. During the period between [insert date] and [insert
date] , your Award shall be treated as if it had been invested in
the Corporation's common stock.
. On [insert date] , you will become eligible to receive the
remaining 50% portion of your Award (as adjusted to track the
performance of the Corporation's common stock) in cash, or you
may make an irrevocable election to defer the payment of this
portion of your Award to a later date (in accordance with rules
set by the Subcommittee).
The remainder of this letter sets forth your actual Award Agreement.
Any terms used in this letter which have a special meaning either
shall be defined in this letter for your convenience, or capitalized terms which
are not defined in this letter are defined in the Plan. The term "Target Award"
as used in this Award Agreement refers only to the Target Award awarded to you
under this Award Agreement and the term "Award" refers only to the Long Term
Incentive Performance Award set forth in this Award Agreement. References to
the "Corporation" include Lockheed Martin Corporation and its subsidiaries.
Section 1. Target Award. Your Target Award for your Performance
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Period under this Award Agreement shall be [$xxx,xxx.xx].
Section 2. Performance Period. Your Performance Period under this
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Award Agreement shall start on [insert date] and shall end on [insert date].
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Section 3. Peer Performance Group.
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3.1. General; the Peer Performance Group. The percentage of your
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Target Award which you shall be eligible to receive shall depend, in part, on
the Corporation's relative ranking of its Total Stockholder Return (as defined
in the Plan) for your Performance Period to the Total Stockholder Return for
such Period for the corporations which comprise the Standard & Poor's 500 Index.
The Corporation shall be included as a member of the Peer Performance Group.
The Corporation's Total Stockholder Return will be based on the performance of
its common stock, par value $1.00. The Total Stockholder Return of each
corporation that is taken into account in computing the Peer Performance Group
Total Stockholder Return will be based on the equity security of the relevant
corporation that is used in computing the Standard & Poor's 500 Index.
3.2. Total Stockholder Return. The Subcommittee after the end of
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your Performance Period shall compute the Total Stockholder Return for the
Corporation for such Period and shall compute and rank the Total Stockholder
Return for each corporation in the Peer Performance Group. Each corporation's
Total Stockholder Return shall be ranked among the Total Stockholder Return for
each other corporation in the Peer Performance Group on a percentile basis.
Each such Total Shareholder Return shall be computed from data available to the
public, and the ranking shall be made using generally accepted analytical
procedures. The Total Stockholder Return for the Corporation and for each
corporation in the Peer Performance Group shall be rounded to the nearest
hundredth of a percent based on the standard convention for rounding.
3.3. Percentage Level of Target Award.
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(a) General. At the end of your Performance Period, the Subcommittee
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shall multiply your Target Award by the Percentage Level of Target
Award as determined under Section 3.3(b). The result of such
multiplication shall be referred to in this Award Agreement as your
"Potential Award".
(b) Percentage Level of Target Award. Your Percentage Level of
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Target Award shall (subject to Section 3.3(c)) be determined under
this Section 3.3(b) based on the percentile ranking of the Corporation
in the Peer Performance Group based on the Corporation's Total
Stockholder Return for your Performance Period under the following
chart--
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Band Percentile Ranking Percentage Level
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Of Target Award
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One 85th or higher 200%
Two 75th 150%
Three 60th 100%
Four 50th 70%
Five 40th 25%
Six Below 40th 0%
(c) Percentage Level of Target Award Interpolation. If the
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Corporation's Total Stockholder Return puts the Corporation over the
listed Percentile Ranking for the applicable Band (other than Band One
or Band Six) in Section 3.3(b), your Percentage Level of Target Award
under Section 3.3(b) shall be calculated in the following steps--
(1) the Subcommittee as the first step shall determine the amount by
which the Corporation's Percentile Ranking exceeds the listed
Percentile Ranking in the applicable Band (rounded to the nearest
whole number based on the standard convention for rounding to the
nearest whole number),
(2) the Subcommittee as step (2) shall divide the number from step
(1) by ten (10) or, if the Band is Band Three, by fifteen (15) and
the resulting quotient shall be expressed as a percentage (rounded
to the nearest whole number based on the standard convention for
rounding to the nearest whole number), which percentage shall be
referred to as the "Applicable Percentage",
(3) the Subcommittee as step (3) shall multiply the Applicable
Percentage by fifty (50), if the applicable Band is Band Two or Band
Three, or by thirty (30), if the applicable Band is Band Four, or by
forty-five (45), if the applicable band is Band Five,
(4) the Subcommittee as step (4) shall round the number from step
(3) to the nearest whole number based on the standard convention for
rounding to the nearest whole number, and
(5) the Subcommittee as step (5) shall determine your actual
Percentage Level of Target Award by adding the number from step (4)
as so rounded to the Percentage Level specified in the applicable
Band under Section 3.3(b).
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Section 4. Potential Award.
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4.1. Employment Requirement.
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(a) General Rule. In order to be eligible to receive payment of any
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portion your Potential Award as determined under Section 3.3(a), you
must remain actively employed by the Corporation through the last day
of the Performance Period. If your employment as an Employee
terminates for any reason whatsoever during your Performance Period,
you shall forfeit your right to receive all or any part of your
Potential Award.
(b) Exceptions. Notwithstanding Section 4.1(a), if the Subcommittee
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determines
(1) that your employment as an Employee terminated as a result of
your death, "Divestiture", "Disability" or "Retirement" or
(2) that the Corporation terminated your employment involuntarily as
a result of a layoff,
you shall forfeit a fraction of your Potential Award. The numerator
of such fraction shall equal the number of days remaining in your
Performance Period after the date that the Subcommittee determines
that your employment as an Employee terminated, and the denominator
shall equal the total number of days in your Performance Period. The
Subcommittee shall have complete and absolute discretion to make the
determinations called for under this Section 4.1(b), and all such
determinations shall be binding on you and on any person who claims
all or any part of your Potential Award on your behalf as well as on
the Corporation.
(c) Special Definitions. For purposes of this Award Agreement
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(1) Your employment as an Employee shall be treated as terminating
because of a Disability if you are eligible for a benefit under the
Corporation's long term disability plan in which you participate;
(2) Your employment as an Employee shall be treated as terminating
as a result of Divestiture if the Corporation divests all or
substantially all of a business operation of the Corporation and
such divestiture results in the termination of your employment with
the Corporation and a transfer of such employment to the other party
in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any
person, corporation, association, partnership, joint venture or
other
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business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and
(3) Your employment as an Employee shall be treated as terminating
because of Retirement if (a) you participate in a retirement plan
maintained by the Corporation, and your employment terminates on or
after the date on which you satisfy the plan's age and service
requirements for receiving an early retirement benefit under the
plan or (b) if you do not participate in a retirement plan
maintained by the Corporation, your employment terminates after you
reach age 55 and have completed five years of service.
4.2. Payment Rules.
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(a) General Rule. If you are eligible to receive your Potential Award
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under Section 4.1(a), your Potential Award shall be divided into two
equal parts, one of which shall be fully vested and, at your election,
shall be either paid in cash to you or deferred in accordance with
Section 4.2(e). The other portion of your Potential Award shall
remain subject to forfeiture and shall be governed under the
provisions of Section 4.2(c).
(b) Current Part. You shall have the right to receive 50% of your
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Potential Award currently in cash as soon as practicable after the
date as of which the Subcommittee certifies in writing (for purposes
of Section 162(m) of the Code) that your Target Award has become a
Potential Award for your Performance Period.
(c) Deferred, Forfeitable Part.
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(1) Deferral and Forfeiture. If you are eligible to receive your
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Potential Award under Section 4.1(a), the payment of the remaining
50% of your Potential Award shall be deferred until after [insert
date]. You shall forfeit your right to the payment of that part of
your Potential Award if your employment as an active Employee
terminates for any reason on or before [insert date].
(2) Phantom Stock Account. The Subcommittee shall establish a
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bookkeeping account (a "Phantom Stock Account") on your behalf under
this Section 4.2(c)(2) and shall credit such account with a number
of units equal to the number of whole shares (and any fractional
share) of the Corporation's common stock which could have been
purchased by the part of your Potential Award described in Section
4.2(c)(1) at the closing price for a share of the Corporation's
common stock as reported on the New York Stock Exchange for the last
trading day of the Performance Period, subject to the Subcommittee's
certification in writing (for purposes of Section 162(m) of the
Code) that your
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Target Award has become a Potential Award for your Performance
Period. Thereafter the Subcommittee shall make such credits or
debits to the units previously credited to such account as the
Subcommittee deems appropriate in light of any transaction described
in Section 7(a) of the Plan (such as a stock split or stock
dividend) or any dividends paid on the Corporation's common stock,
which dividends shall increase the number of units credited to such
account as if such dividends had been reinvested in the
Corporation's common stock at the closing price of a share of the
Corporation's common stock as reported on The New York Stock
Exchange for the last trading day of the quarter in which such
dividend is declared by the Board of Directors.
(3) Payment. Unless you forfeit your right to the remaining 50% of
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your Potential Award described in this Section 4.2(c), you shall
have the right to receive the payment of the value of your Phantom
Stock Account as determined as of [insert date] or to defer payment
in accordance with Section 4.2(e). The amount payable under this
Section 4.2(c) shall be determined by multiplying the number of
units representing shares of phantom stock credited to your account
under Section 4.2(c)(2) by the closing price for a share of the
Corporation's common stock as reported on the New York Stock
Exchange for [insert date] or, if it is not a trading day, on the
last trading day before [insert date], and rounding such product to
the nearest whole number based on the standard convention of
rounding to the nearest whole number.
(4) Special Payment Rule For Certain Terminated Employees.
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Notwithstanding Section 4.2(c)(1), if your employment terminates
after the close of your Performance Period but prior to [insert
date] and the Subcommittee determines that your employment
terminated under circumstances which would have made you eligible to
receive at least a part of your Potential Award under Section
4.1(b), then the remaining 50% portion of your Potential Award
described in this Section 4.2(c) shall be paid to you or, in the
event of your death, to your designated beneficiary, in cash as soon
as practicable following your termination. The amount payable under
this Section 4.2(c)(4) shall be determined by multiplying the number
of units representing shares of phantom stock credited to your
account under Section 4.2(c)(2) on the date your termination becomes
effective by the closing price for a share of the Corporation's
common stock as reported on the New York Stock Exchange for the date
on which your termination becomes effective, or if it is not a
trading day, on the last trading day before that date, and rounding
such product to the nearest whole number based on the standard
convention of rounding to the nearest whole number. In the event of
your death and you do not have a properly completed beneficiary
designation form on file with the Office of the Corporate Secretary,
your payment will be made to your estate.
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(5) No Shareholder Rights. Units credited to your Phantom Stock
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Account are bookkeeping entries only and do not entitle you to any
shares of the Corporation's common stock or to any voting or other
rights associated with shares of such stock.
(d) Special Rule. If you terminate employment during the Performance
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Period but are eligible to receive a portion of your Potential Award
as a result of an exception under Section 4.1(b), payment of such
portion of your Potential Award shall be in full satisfaction of all
rights you have under this Award Agreement; in such circumstances, you
will not be eligible for a payment under Section 4.2(c) and no other
amounts will be payable on your behalf. The portion of your Potential
Award to which you have a right to receive under Section 4.1(b) shall
be paid to you or, in the event of your death, to your designated
beneficiary for the Award, in cash as soon as practicable after the
date as of which the Subcommittee certifies in writing (for purposes
of Section 162(m) of the Code) that your Target Award has become a
Potential Award for your Performance Period. In the event of your
death and you do not have a properly completed beneficiary designation
form on file with the Office of the Corporate Secretary, your payment
will be made to your estate.
(e) Further Deferral. You will be given an opportunity to elect to
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defer any amounts payable under Sections 4.2(b) and 4.2(d) of this
Award Agreement and to further defer any amounts payable under
Sections 4.2(c))3) and 4.2(c)(4). Such election shall be irrevocable,
shall made in accordance with the terms of the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan and shall
be subject to such additional terms and conditions as are set by the
Subcommittee. A deferral election form and the terms and conditions
for any deferral shall be furnished to you in due course.
4.3. Cutback. Any payment called for under Section 4.2(b) will be
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reduced to the extent that such payment together with payments attributable to
any other Cash-Based Awards that are granted during 1999 as Performance Based
Awards exceeds $3,000,000 and, further, any credit of phantom shares called for
under Section 4.2(c)(2) shall be reduced to the extent that the number of
phantom shares credited to you together with the number of shares of Stock and
Share Units in respect of Share-Based Awards that are granted to you during 1999
as Performance Based Awards exceeds 500,000. To the extent that any payment
called for under Section 4.2(b) would exceed the $3,000,000 limit and therefore
must be reduced, the amount in excess of $3,000,000, shall be deferred and
credited as phantom shares under Section 4.2(c) unless such crediting would
result in the crediting of phantom shares that would otherwise be prohibited by
this Section 4.3. To the extent that any crediting called for under Section
4.2(b) would exceed the 500,000 limit and therefore must be reduced, the units
in excess of 500,000, shall not be credited and shall instead be paid in cash
under Section 4.2(b) unless such payment would result in a payment that would
otherwise be prohibited by this Section 4.3.
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4.4. Withholding. Any payment made in respect of your Award will be
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subject to income tax withholding at the minimum rate prescribed by law. You
may owe taxes in addition to the amount withheld and may request tax be withheld
at a greater rate.
Section 5. No Assignment; General Creditor Status. You shall have no
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right to assign any interest you might have in all or any part of the Target
Award or Potential Award which has been granted to you under this Award
Agreement and any attempt to do so shall be null and void and shall have no
force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement to you shall be made in cash from the Corporation's general
assets, and your right to payment from the Corporation's general assets shall be
the same as the right of a general and unsecured creditor of the Corporation.
Section 6. Plan. This Award Agreement shall be subject to all of the
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terms and conditions set forth in the Plan.
Section 7. Change in Control.
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7.1. Change in Control During Performance Period. If during your
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Performance Period, a Change in Control (as defined in Section 7(c) of the Plan)
occurs, your Performance Period will terminate. Notwithstanding any deferral
election or term of this Award Agreement to the contrary, a pro rata portion of
your Award will be paid to you within 15 days of the Change in Control. The
prorated portion will be the sum of (i) the result obtained by first
multiplying your Target Award by the Peer Performance Group Percentage Level
calculated under Section 3.3(b), but determined as of the last day of the year
immediately preceding the Change in Control, and then further multiplying that
product by a fraction, the numerator of which is the number of whole calendar
years of your Performance Period that were completed prior to the Change in
Control and the denominator of which is [insert years in Performance Period};
and (ii) the product of your Target Award and a fraction, the numerator of which
is the number of days preceding the Change in Control that occur in the calendar
year in which the Change in Control occurs and the denominator of which is
[insert number of days in Performance Period].
7.2. Change in Control After Performance Period. If a Change in
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Control occurs after the end of your Performance Period but before [insert
date], notwithstanding any deferral election or term of this Award Agreement to
the contrary, the remaining 50% of your Potential Award described in Section
4.2(c) will be paid to you within 15 days of the Change in Control. The amount
payable shall be determined by multiplying the number of units representing
shares of phantom stock credited to your account under Section 4.2(c)(2) by the
closing price for a share of the Corporation's common stock as reported on the
New York Stock Exchange for the date on which the Change in Control occurs, or
if it is not a trading day, on the last trading day before that date, and
rounding such product to the nearest whole number based on the standard
convention of rounding to the nearest whole number.
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7.3. Special Rule. Notwithstanding Section 7.1 or Section 7.2, if a
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payment in accordance with those provisions would result in a nonexempt short-
swing transaction under Section 16(b) of the Securities Exchange Act of 1934,
then the date of distribution to you shall be delayed until the earliest date
upon which the distribution either would not result in a nonexempt short-swing
transaction or would otherwise not result in liability under Section 16(b) of
the Securities Exchange Act of 1934.
Section 8. Amendment and Termination. As provided in Section 9 of
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the Plan, the Board of Directors may at any time amend, suspend or discontinue
the Plan and the Subcommittee may at any time amend this Award Agreement.
Notwithstanding the foregoing, no such action by the Board of Directors or the
Subcommittee shall affect this Award Agreement or the Award made hereunder in
any manner adverse to you without your written consent.
Section 9. No Right to an Award. Your status as an Employee shall
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not be construed as a commitment that any one or more awards shall be made under
the Plan to you or to Employees generally. Your status as a Participant shall
not entitle you to any additional award.
Section 10. No Assurance of Employment. Nothing contained in the
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Plan or in this Award Agreement shall confer upon you any right to continue in
the employ or other service of the Corporation or constitute any contract (of
employment or otherwise) or limit in any way the right of the Corporation to
change your compensation or other benefits or to terminate your employment with
or without cause.
Section 11. Conflict. In the event of a conflict between this Award
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Agreement and the Plan, the Plan document shall control.
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Section 12. Execution. You must execute one copy of this Award
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Agreement and return it to the Office of the Vice President and Corporate
Secretary (Mail Point 207) as soon as possible as a condition to the Award
becoming effective. Your execution of this Award Agreement constitutes your
consent to an acceptance of any action taken under the Plan consistent with its
terms with respect to your Award. If you execute and return this Award
Agreement promptly, your Award shall be effective as of January 1, 1999. A pre-
addressed envelope has been enclosed for your convenience to return with a copy
of this Award Agreement, as acknowledged by you below.
Sincerely,
Enclosures
ACKNOWLEDGEMENT:
_______________________________________ _____________
Signature Date
_________________________
Print or type name
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