Corporate Policy Statement CPS-730
Issued: July 5, 1999
Revision No: 1
Copyright 1999 Lockheed Martin Corporation
A hard copy of this policy may not be current.
The current version is on the Lockheed Martin Intranet
Compliance with the Foreign Corrupt Practices Act
1.0 Policy | 2.0 General | 3.0 Implementation | Exhibit A: Description of the
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Foreign Corrupt Practices Act | Exhibit B: Operational Directions | Exhibit C:
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Financial and Accounting Directions | Exhibit D: Internal Certification to the
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Vice President and Controller - Compliance with the Foreign Corrupt Practices
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Act | Exhibit E: Hospitality Guidelines | General Applicability Statement |
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Distribution Notice
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_______________________________________________________________________________
1.0 POLICY
Lockheed Martin Corporation (the "Corporation") will conduct every international
business transaction with integrity, regardless of differing local manners and
traditions, and will comply with: (a) the laws and regulations of the United
States, particularly the provisions of the Foreign Corrupt Practices Act (FCPA);
(b) the laws and regulations of each foreign country in which the Corporation
operates (except to the extent inconsistent with U.S. law); (c) the Consent
Decree dated April 13, 1976, entered into between Lockheed Corporation and the
Securities and Exchange Commission; (d) the Consent Order dated June 23, 1978,
between Lockheed Corporation and the Federal Trade Commission; and (e) the
Corporation's Code of Ethics and Business Conduct, Setting the Standard. (If
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there is a real or apparent inconsistency between the requirements of U.S. and
foreign law, the matter shall be resolved by the Assistant General Counsel-
International.)
2.0 GENERAL
2.1 The provisions of this CPS will apply to all officers and employees of the
Corporation and its wholly-owned subsidiaries, both within and outside the U.S.,
and, by written agreement, flowing down all appropriate provisions to all
distributors, and to all consultants, representatives, brokers or other persons
or firms of U.S. or any other nationality who have or are likely to have contact
with a foreign customer and are hired or otherwise retained by the Corporation
to provide services directly related to obtaining, retaining, or facilitating
business or business opportunities, including offset/countertrade commitments to
foreign governments, in or with any foreign country or foreign firm
("consultants"), as defined in section 2.0 of CPS-704, International
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Consultants.
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2.2 With respect to entities controlled (but not wholly-owned) by the
Corporation (normally an ownership interest in excess of 50%), the Assistant
General Counsel-International shall ensure that policies substantially similar
to this CPS are adopted. With respect to entities in which the Corporation has a
substantial (but not controlling) ownership interest, (i.e., 20%-50%), the
Assistant General Counsel-International shall ensure that such entities have
adopted appropriate controls and are taking the steps necessary to effect
compliance with the FCPA by all of their
officers, employees, distributors and consultants.
3.0 IMPLEMENTATION
3.1 A brief description of the FCPA is set forth in Exhibit A, Description of
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the Foreign Corrupt Practices Act. Instructions designed to ensure that the
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Corporation and its personnel comply fully with both the spirit and the letter
of the FCPA are provided in Exhibit B, Operational Directions. Exhibit C,
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Financial and Accounting Directions, is designed to ensure compliance with the
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accounting provisions of the FCPA. Exhibit D, Internal Certification to the Vice
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President and Controller - Compliance with the Foreign Corrupt Practices Act,
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provides a certification to be signed annually by the individual in charge of
each Lockheed Martin element (the "Responsible Officer"). Exhibit E, Hospitality
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Guidelines, provides direction with respect to the furnishing of hospitality to
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foreign officials.
3.2 It is the individual responsibility of each officer, employee and consultant
of the Corporation, by action and supervision as well as continuous review, to
ensure strict compliance with this CPS. The Corporation may take severe
disciplinary action, up to and including dismissal, against any officer,
employee or consultant who violates this directive.
3.3 Any officer or employee who suspects or becomes aware of any violation of
this CPS must report the violation to the Responsible Officer, who will
immediately advise the element's Legal Counsel, who shall cause an investigation
of the reported matter to be conducted. A consultant who suspects or becomes
aware of any such violation must immediately inform the Agreement Monitor, who
will report the violation to the Responsible Officer. The Responsible Officer,
upon receiving any such report, will immediately advise the element's Legal
Counsel, who will cause an investigation to be conducted. The Responsible
Officer also will report any such violation in writing to the Assistant General
Counsel-International. In the alternative, any officer, employee or consultant
who suspects or becomes aware of any violation of this CPS may report it
directly to the Vice President of Ethics and Business Conduct or the element's
ethics officer (anonymously, if desired), or the Assistant General Counsel-
International.
3.4 The Assistant General Counsel-International shall be responsible for
furnishing advice with respect to the interpretation and application of the FCPA
and of this CPS. He or she shall also assist each Sector President and Sector
Vice President and General Counsel in ensuring that affected personnel are fully
informed of the prohibitions of the FCPA and the requirements of this CPS.
3.5 Each Sector President and Sector Vice President and General Counsel shall be
responsible for ensuring that all affected sector personnel are fully informed
of the prohibitions of the FCPA and the requirements of this CPS. In addition,
he or she shall be responsible for adopting and enforcing appropriate controls
and taking the steps necessary to effect compliance with this CPS by all
officers, employees, distributors and consultants of the Corporation in the
sector.
3.6 Exceptions to this CPS must have prior written approval of the Senior Vice
President and General Counsel or the Assistant General Counsel-International.
Exceptions shall not be granted unless legal opinions have been obtained from
U.S. and foreign counsel that the conduct for which approval is sought does not
violate applicable U.S. or foreign law.
Frank H. Menaker, Jr.
Senior Vice President and General Counsel
Corporate Policy Statement CPS-730
July 1999
Exhibit A, Description of the Foreign Corrupt Practices Act
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1.0 ACCOUNTING AND RECORDKEEPING CONTROLS REQUIREMENTS
The FCPA requires certain U.S. companies, including Lockheed Martin, to
establish accounting and recordkeeping controls that will prevent the use of
"slush funds" and "off-the-books" accounts which have been used in the past by
some companies as a means of facilitating and concealing questionable foreign
payments. In particular, the FCPA requires companies to establish and keep
books, records, accounts and controls which accurately and fairly reflect their
transactions and disposition of their assets.
2.0 ANTI-BRIBERY PROVISIONS (PROHIBITIONS)
The FCPA, as amended in 1998, prohibits U.S. persons (and non-U.S. persons while
in the United States) from corruptly offering or giving money or anything of
value, directly or indirectly through agents or intermediaries, to foreign
officials to assist the U.S. (or non-U.S.) person in "obtaining or retaining
business." Specifically, the FCPA prohibits any act corruptly done in
furtherance of an offer, payment, promise to pay, gift, promise to give, or
authorization of the giving of "anything of value" to:
2.1 Any foreign official (see paragraph 6.1);
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2.2 Any foreign political party or official thereof or any candidate for foreign
political office; or
2.3 Any person (including any consultant), while knowing (or being aware of a
high probability) (see paragraph 6.3 for the FCPA's knowledge standard) that all
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or a portion of such money or thing of value will be offered, given or promised,
directly or indirectly, to any foreign official, any foreign political party or
official thereof, or any candidate for foreign political office for purposes of:
. Influencing any act or decision in his, her or its official capacity (or
in the case of a foreign official, inducing him or her to do or omit to
do any act in violation of that official's lawful duty); or
. Inducing him, her or it to use his, her or its influence with a foreign
government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality; or
. Securing any improper advantage (e.g., obtaining a special tax exemption
or operating permit for a factory which otherwise would not qualify);
in order to assist in obtaining or retaining business for or with, or directing
business to, any person.
3.0 LIMITED EXCEPTIONS AND AFFIRMATIVE DEFENSES
The FCPA contains certain limited exceptions and affirmative defenses to the
prohibitions set forth in section 2.0 above. These limited exceptions and
affirmative defenses may not be utilized or relied upon except in accordance
with the Operational Directions set forth in Exhibit B of this CPS.
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3.1 Facilitating Payments
3.1.1 The FCPA provides that the prohibitions referred to in section 2.0
above do not apply to any facilitating or expediting payment to any foreign
official, political party, or party official, "the purpose of which is to
expedite or secure performance of a routine governmental action."
3.1.2 Examples of such "routine governmental action[s]" include actions
ordinarily and commonly performed by a foreign official in:
. Obtaining permits, licenses, or other official documents to
qualify a person to do business in a foreign country;
. Processing governmental papers such as visas and work orders;
. Providing police protection, mail pick-up and delivery, or
scheduling inspections associated with contract performance or
inspections related to transit of goods across country;
. Providing phone service, power and water supply, loading and
unloading cargo, or protecting perishable products or commodities
from deterioration; or
. Actions of a similar nature.
3.1.3 The term "routine governmental action" does not include any decision
by a foreign official on whether, or on what terms, to award new business to
or continue business with a particular party, or any action taken by a
foreign official involved in the decision-making process to encourage a
decision to award new business or to continue business with a particular
party.
3.2 Affirmative Defenses
The FCPA also contains two affirmative defenses for: (a) "reasonable and
bonafide" expenditures, such as travel and lodging expenses, incurred by or on
behalf of a foreign official, party, party official, or candidate that are
directly related to the promotion, demonstration, or explanation of products or
services or the execution or performance of a contract with a foreign government
or agency thereof; or (b) payments to foreign officials that are lawful under
the written laws and regulations of the foreign official's country.
4.0 PENALTIES - FINES AND IMPRISONMENT
The FCPA's penalties for violation of the anti-bribery provisions include fines
of up to $2,000,000 per violation for companies and fines of up to $100,000
and/or imprisonment for up to five years per violation for individuals. The FCPA
prohibits a company from reimbursing a director, officer, employee or consultant
for the amount of the fine involved. Individuals are subject to criminal
liability under the FCPA regardless of whether the company has been found guilty
or prosecuted for a violation.
5.0 APPLICABILITY
5.1 As amended in 1998, the jurisdictional reach of the FCPA extends to "any
person," including any foreign person or firm, that commits a prohibited act in
the United States. The FCPA thus applies to foreign nationals, foreign
corporations (including foreign subsidiaries of U.S. companies), and other
foreign entities whose directors, officers, employees or agents commit a corrupt
act while in the United States.
5.2 The FCPA, as amended, also applies to U.S. nationals and U.S. companies that
commit prohibited acts outside the United States, regardless of the use of any
instrumentality of interstate commerce. Thus, a U.S. company may be held liable
for the acts of its directors, officers, employees or agents (including its
foreign subsidiaries) outside the United States, regardless of the nationality
of the person taking the action and regardless of the use of an instrumentality
of interstate commerce.
5.3 A U.S. company may be held vicariously liable under the FCPA for the corrupt
conduct of its foreign subsidiaries outside the United States if the U.S.
company authorized or participated in the conduct. Any U.S. national who is a
director, officer, employee or agent of a foreign subsidiary may also be held
liable under the FCPA for acts in furtherance of the bribery of a foreign
official, whether or not such acts are performed within or outside the territory
of the United States.
6.0 KEY TERMS
6.1 As used in this CPS, "foreign official" means any officer or employee of a
foreign government, its armed forces, or any department, agency, or
instrumentality thereof, or any person acting in an official capacity for or on
behalf of such government or department, agency, or instrumentality, or any
official, employee or person acting on behalf of a public international
organization such as the World Bank or the European Community.
6.2 The prohibition against payments to foreign officials extends to the
offering or giving of "anything of value" where the requisite criminal intent
and business purpose are present. The thing of value given can be of any kind,
not just money, and there is no minimum amount or threshold of value which must
be exceeded before the gift becomes illegal.
6.3 The FCPA specifically defines the degree of knowledge necessary for a
violation. Under the FCPA, "knowing" conduct requires an awareness or a firm
belief that the agent, representative, or other third party is making a corrupt
payment, or a substantial certainty that this will occur. The FCPA knowledge
standard is also met where there is awareness of a high probability that the
corrupt payment will be made, unless there is actual belief to the contrary.
Willful ignorance (sticking one's head in the sand) is not excused. There may be
circumstances in which a director, officer, employee or consultant of the
Corporation becomes aware of facts which, while in and of
themselves do not cause the individual either to know or believe that a foreign
official will be the ultimate recipient of a bribe, should cause suspicion. In
these circumstances, if the individual fails to take steps to allay that
suspicion, he or she may risk prosecution under the FCPA, as the director,
officer, employee or consultant may be accused of having had the requisite
knowledge for a violation.
6.4 Although the FCPA does not define "instrumentality" of a foreign government,
the term should be construed to include entities which are wholly- or partially-
owned by a foreign government, such as the Saudi Arabian Airlines Corporation
(Saudia) or a specially chartered private corporation entrusted with quasi-
governmental functions, as well as organizations such as INTELSAT and ARABSAT,
because the majority of the membership of those organizations is composed of
foreign governments and quasi-governmental entities.
Corporate Policy Statement CPS-730
July 1999
Exhibit B, Operational Directions
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1.0 APPLICATION
1.1 These Operational Directions apply to Lockheed Martin Corporation and its
wholly-owned subsidiaries, both within and outside the U.S. These Directions
will control even though local law or custom may permit business standards that
are less exacting. With respect to any entity controlled (but not wholly-owned)
by the Corporation (normally an ownership interest in excess of 50%), the
Assistant General Counsel-International shall ensure that policies substantially
similar to these Operational Directions are adopted. With respect to any entity
with which the Corporation has a substantial (but not controlling) ownership
interest, (i.e., 20%-50%), the Assistant General Counsel-International shall
ensure that such entity has adopted appropriate controls and is taking the steps
necessary to effect compliance with the FCPA by all of its officers, employees,
distributors and consultants. The Vice President of Strategic Development, in
the case of corporate acquisitions, or the Sector President or designee, in the
case of other acquisitions (including interests in joint ventures), shall ensure
that the Assistant General Counsel-International is advised, prior to acquiring
any ownership interest of 20% or more in any entity, of the controls which will
be implemented to ensure compliance with this CPS.
1.2 At times, observance of the directions may place the Corporation in a non-
competitive position. However, strict compliance with the directions and their
underlying policies and goals is of greater value to the Corporation than any
business which may be lost.
2.0 SPECIFIC PROHIBITIONS AND REQUIREMENTS
2.1 Except as provided herein, no offer, payment, promise to pay or
authorization to pay or provide any money, gifts or anything of value will be
made by or on behalf of the Corporation to:
. Any foreign official, including any member of the armed forces, and
including any official, employee or person acting on behalf of a public
international organization;
. Any foreign political party or official thereof or any candidate for
foreign political office; or
. Any person, while knowing or being aware of a high probability that all
or a portion of any payment will be offered, given or promised,
directly or indirectly, to any of the above.
2.2 Except in exigent circumstances which make it impractical to seek prior
approval, and subject to the conditions set forth in paragraph 2.3, no
facilitating or expediting payment shall be made without the prior approval of
business unit or sector Legal Counsel or, alternatively, the Assistant General
Counsel-International.
2.3 In exigent circumstances which make it impractical to seek prior approval, a
facilitating or expediting payment may be made without the prior approval
required under paragraph 2.2 provided that all of the following conditions are
satisfied:
2.3.1 The payment does not exceed $100;
2.3.2 The payment is for a "routine governmental action" as described by the
following list:
. obtaining permits, licenses or other official documents that
qualify a person to do business in a foreign country;
. processing governmental papers such as visas and work orders;
. providing police protection, mail pick-up and delivery, or
scheduling inspections associated with contract performance or
inspections related to transit of goods across country;
. providing phone service, power and water supply, loading and
unloading cargo, or protecting perishable products or commodities
from deterioration; or
. actions of a similar nature.
2.3.3 The payment is not for any decision by a foreign official whether, or
on what terms, to award new business to or continue business with a
particular party, or for any action taken by a foreign official involved in
the decision-making process to encourage a decision to award new business or
to continue business with a particular party.
2.3.4 Within seven days, the payment is reported in writing to the element's
Legal Counsel and the Assistant General Counsel-International and on an
expense report to reflect accurately the amount paid, the recipient, the
purpose of the payment and the exigent nature of the circumstances.
2.4 Except for hospitality provided in accordance with paragraph 2.7, no
officer, employee or consultant of the Corporation may rely on either of the
FCPA's affirmative defenses, as described in Exhibit A, Description of the
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Foreign Corrupt Practices Act, without the prior written approval of the
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Assistant General Counsel-International.
2.5 Use of corporate aircraft to transport foreign officials is prohibited,
except with the written
consent of the Senior Vice President and General Counsel, Assistant General
Counsel-International, or the Assistant General Counsel-Litigation and
Compliance. Consent will not be granted absent review and approval by business
unit and sector Legal Counsel. Any request must be accompanied by a legal
opinion of outside counsel.
2.6 The above prohibitions apply to payments and gifts on behalf of the
Corporation, whether or not they involve the use of corporate resources.
2.7 Provision of hospitality, transportation, meals, models or mementos of
reasonable value will be in accordance with guidelines issued by the Assistant
General Counsel-International. The guidelines are set forth in Exhibit E,
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Hospitality Guidelines. Where the hospitality to be given by the Corporation is
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clearly within the guidelines (including the Hospitality Rules for Foreign
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Officials as defined in Exhibit E), no prior written approval is required.
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Otherwise, the prior written approval of the element's Legal Counsel must be
obtained.
2.8 Questions as to whether government-owned or controlled commercial
enterprises are government instrumentalities for purposes of this CPS will be
referred to the Assistant General Counsel-International for resolution.
Corporate Policy Statement CPS-730
July 1999
Exhibit C, Financial and Accounting Directions
_______________________________________________________________________________
The Vice President and Controller ("Controller") ensures that the accounting and
recordkeeping activities of the Corporation adhere to the highest standards and
conform to this CPS. Yet, with regard to ethics, legality and propriety, each
officer and employee involved with financial and accounting functions has an
obligation which transcends normal reporting requirements. Each such individual
must be alert to possible violations of the following Financial and Accounting
Directions and will report suspected violations to the Controller and the
element's Legal Counsel:
1.0 All cash, bank accounts, investments and other assets of the Corporation
must always be recorded accurately on the official books of the Corporation. In
accordance with corporate policy regarding the Corporation's internal control
structure and the Corporate Controller's Manual, personnel responsible for the
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Corporation's financial books, records and internal accounting controls will
periodically review such books, records and controls to ensure their compliance
with the requirements of the FCPA. Bank accounts should be opened or closed only
upon the prior written approval of the Vice President and Treasurer or an
Assistant Treasurer of Lockheed Martin Corporation. Anonymous ("numbered")
accounts will not be maintained.
2.0 Payments will not be made into anonymous bank accounts or other accounts not
in the name of the payee or of an entity known to be controlled by the payee.
3.0 Except for regular, approved cash payroll payments and normal disbursements
from petty cash supported by signed receipts or other appropriate documentation,
payments will not be made in cash. Checks will not be drawn to the order of
"cash," "bearer" or similar designations.
4.0 Fictitious invoices, over-invoices or other misleading documentation will
not be used.
5.0 Fictitious entities, sales, purchases, services, loans or financial
arrangements will not be used.
6.0 Check requests will be in writing and contain a complete explanation of the
purpose and authority for the payment. The explanation will accompany all
documents submitted in the course of the issuing process. The explanation must
be kept on file at the paying location.
7.0 No expenses relating to foreign business will be reimbursed to persons or
companies assisting the Corporation in obtaining or retaining such business
unless such expenses are supported by reasonable written documentation.
8.0 No payment to any consultant will be made outside of either the country
where a substantial portion of the related services are performed or the country
from which the person performing such services normally conducts business,
except where specifically approved in writing by the Assistant General Counsel-
International or the Consultant Review Board (CRB).
9.0 Payments for any services rendered to the Corporation by a foreign official
or an officer or official of a foreign government-owned or -controlled
commercial enterprise, including honorarium payments and reimbursement of
expenses, will be made solely to the foreign government agency or
instrumentality employing the individual. Such payments will be made by check
directly to the foreign government agency or instrumentality, or by wire to its
named bank account within the foreign government agency's or instrumentality's
country, or by wire through its duly authorized correspondent bank within the
U.S. No such payment shall be made without the prior written approval of the
Sector Vice President and General Counsel or, alternatively, the Assistant
General Counsel-International.
10.0 Receipts, whether in cash or checks, will be deposited promptly in a bank
account of the Corporation. Any officer or employee who suspects the possibility
that a bribe, kickback or over-invoice is associated with a particular receipt
or that an understanding exists that all or a portion of a receipt will be
rebated, refunded or otherwise paid in contravention of the laws of any
jurisdiction, will immediately report that suspicion to the Responsible Officer,
the chief financial officer of the element, and the element's Legal Counsel.
Consultants will report such suspicions to the applicable Agreement Monitor
(whose responsibilities are set forth in CPS-704, International Consultants),
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who will immediately refer the matter to the Responsible Officer, the chief
financial officer of the element, and the element's Legal Counsel. The
Responsible Officer will report any such violation in writing to the Assistant
General Counsel-International.
11.0 Within 60 days after the end of each calendar year, each Responsible
Officer will prepare a report, which will be submitted to the Controller, with
respect to all remuneration (including hospitality) and facilitating payments
made in connection with his or her element's operations in foreign countries
during that year. The Responsible Officer will certify in such report that, to
the best of his or her knowledge, the information contained therein is accurate
and that all transactions during such year complied with this CPS. The chief
financial officer of each element will assist the Responsible Officer in the
preparation of such report, which should include an Internal Certification to
the Vice President and Controller - Compliance with the Foreign Corrupt
Practices Act, a sample of which is set forth in Exhibit D.
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12.0 Within 90 days after the end of each calendar year, the Controller will
prepare a report,
which will be submitted by the Chief Financial Officer to the Audit & Ethics
Committee of the Board of Directors of Lockheed Martin Corporation at its next
scheduled meeting, with respect to all commissions, other remuneration
(including hospitality) and facilitating payments made in connection with
operations in foreign countries during that year. The Chief Financial Officer
will certify in such report that, to the best of his or her knowledge, the
information contained therein is accurate and that all transactions during such
year complied with this CPS. The chief financial officer of each element will
assist the Controller in the preparation of such report.
Corporate Policy Statement CPS-730
July 1999
Exhibit D, Internal Certification to the Vice President and Controller -
Compliance with the Foreign Corrupt Practices Act
_______________________________________________________________________________
Key Responsibilities
It is the individual responsibility of each officer and employee of the
Corporation and its wholly-owned subsidiaries, by action and supervision, as
well as continuous review, to ensure strict compliance with CPS-730, Compliance
with the Foreign Corrupt Practices Act (FCPA). The Corporation may take severe
disciplinary action against any officer or employee who violates this directive.
In summary, the FCPA specifically prohibits: (1) payments or offers of anything
of value made corruptly to influence foreign officials or to secure any improper
advantage in order to obtain or retain business for the Corporation; (2)
maintaining undisclosed/unrecorded funds or assets; and (3) making entries in
the books and records of the Corporation for anything other than the purpose
described.
Any officer or employee who suspects or becomes aware of any violation of CPS-
730 must report the violation immediately to the individual in charge of the
element involved (Responsible Officer), who will advise the element's Legal
Counsel and cause an investigation of the reported matter to be conducted. The
Responsible Officer will report any such violation in writing to the Assistant
General Counsel-International.
Any officer or employee who suspects the possibility that a bribe, kickback, or
over-invoice is associated with a particular receipt or payment or that an
understanding exists that all or a portion of a receipt or payment will be
rebated, refunded, or otherwise paid in contravention of the laws of any
jurisdiction, will immediately report that suspicion to the Responsible Officer,
the chief financial officer of the element, and the element's Legal Counsel. The
Responsible Officer will report any such violation in writing to the Assistant
General Counsel-International.
Certification
I, the undersigned, do hereby affirm, to the best of my knowledge and belief,
that the operations for which I am assigned responsibility: (1) are in
compliance with CPS-730 and the FCPA; (2) have not made any unlawful or
irregular payments; (3) have no undisclosed/unrecorded funds or assets; and (4)
have no entries in the books or records for other than the purpose described.
Signed:___________________________________________________
Date: _________________________
[Name of Responsible Officer]
Corporate Policy Statement CPS-730
July 1999
Exhibit E, Hospitality Guidelines
_______________________________________________________________________________
(To be followed for activities involving foreign government officials or
employees in all countries)
1.0 All hospitality offered on behalf of the Corporation must be directly
related to Lockheed Martin business, i.e., the sale of its products and
services, or otherwise directly in support of Lockheed Martin's business
interests. Hospitality in all cases must be reasonable in amount, must be
offered in good faith only in connection with the promotion, demonstration or
explanation of company products or services or the execution or performance of a
contract with a foreign government or agency thereof, and must be lawful under
applicable local law. In no event may any hospitality be offered or provided in
return for any favor or benefit to Lockheed Martin or to influence improperly
any official decision. Unless otherwise provided in the Hospitality Rules for
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Foreign Officials or approved by the element's Legal Counsel in writing,
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expenses for hospitality meals should not exceed the following U.S. dollar
amount per person: Breakfast - $35.00; Lunch - $75.00; Dinner - $125.00.
Refreshments should not exceed $30.00 per person. Higher amounts may be
appropriate in a specific country and may be approved by the element's Legal
Counsel, provided a written legal opinion is obtained from in-country counsel
that such higher amounts are in accordance with such country's laws and
regulations and are not unreasonable or excessive.
Note: Frequency of hospitality must be carefully monitored, as the cumulative
effect of frequent hospitality may give rise to the appearance of impropriety.
Hospitality for an individual should not exceed twelve events in any calendar
year. Where additional hospitality is anticipated, the element's Legal Counsel
shall be consulted and prior written approval shall be obtained.
2.0 Unless otherwise provided in the Hospitality Rules for Foreign Officials, in
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the case of plant visits or similar activities by foreign government officials
or employees which will involve Lockheed Martin paying airfare or lodging
expenses for such officials, elements shall send invitations or itineraries, or
both, to the foreign officials to inform them, to enable consultation with
superiors, and to afford them the option to decline. Elements also will obtain
prior written approval or confirmation from the invitee's superior or other
authorized official or prepare a file memorandum of relevant conversations in
this regard. If this is not practicable in connection with very senior invitees,
the element's Legal Counsel shall obtain a written legal opinion from in-country
counsel that specifically addresses the particular circumstances of the visit.
In the case
of plant visits that are specifically required by the terms of a contract with a
foreign government customer, prior written approval or confirmation from the
invitee's superior or other authorized official is not required, but all
hospitality expenses related to any such visit shall be subject to these
Guidelines. In no case will payment or reimbursement be made directly to the
individual official incurring the expense. Such payment or reimbursement shall
be made to the foreign government or agency involved.
3.0 Refreshments, meals or mementos of reasonable value and otherwise in
accordance with these Guidelines which are furnished in connection with trade
shows, association meetings, official governmental functions, or ceremonial,
commemorative or celebratory functions such as ship launchings, airplane
rollouts, deliveries or demonstrations are permissible. For such events or
occasions to which foreign government officials or employees from three or more
countries are invited, the element's Legal Counsel and in-country counsel
opinions will not be required with respect to the foreign government officials'
or employees' participation, provided the refreshments, meals or mementos to be
offered are of reasonable value and otherwise strictly in accordance with these
Guidelines and the Hospitality Rules for Foreign Officials, and are not offered
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improperly to influence any official decision. However, notification of such
events shall be made in writing to the Assistant General Counsel-International
at least 15 days in advance of such event. The notification shall generally
describe the event, the per person cost of the refreshments, meals and mementos
offered, and any other relevant aspects of the event.
4.0 Cash gifts to foreign officials are not permitted under any circumstances.
Per diem payments are similarly prohibited, except where expressly provided for
in a written contract with a foreign government customer. In such case, per diem
payments shall be paid strictly in accordance with the contract requirements.
Any such payment shall be made by check, rather than cash. Whenever feasible,
the check for per diem payments should be made payable to the foreign government
customer, rather than to any individual foreign official. Any such per diem
payment shall always be accompanied by appropriate documentation accurately
recording the amount and nature of the payment in accordance with the contract
requirement.
5.0 Unless otherwise provided in the Hospitality Rules for Foreign Officials,
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product models or pictures of little or no intrinsic value bearing the company
logo or other items of small dollar value (less than U.S. $100) that are
distributed for advertising or commemorative purposes are permitted. Gifts
valued at $100 or more must have the prior written approval of the element's
Legal Counsel, provided the element's Legal Counsel obtains from in-country
counsel a written opinion that any such higher amount complies with that
country's law and regulations. The element's Legal Counsel shall consult with
the element's Ethics Officer prior to granting any such approval. In no event
shall an item having a cost in excess of $1,000 (regardless of intrinsic value)
be given without the prior written approval of the Assistant General Counsel-
International. Whenever appropriate, a gift should be made to the customer
organization, and not to an individual.
6.0 Use of Lockheed Martin corporate aircraft to transport foreign officials is
prohibited unless prior written authorization is obtained from the Senior Vice
President and General Counsel, Assistant General Counsel-International, or the
Assistant General Counsel-Litigation & Compliance. Consent will not be granted
absent review and approval by business unit and sector Legal Counsel. Any such
request must be accompanied by a legal opinion of outside counsel. Other
transportation may be approved, after legal review, on a case-by-case basis.
7.0 Prior written approval by the element's Legal Counsel is required for any
hospitality offered to the spouse and/or children of a foreign official.
8.0 The Responsible Officer shall ensure that quarterly written reports of all
hospitality (excluding only items permitted pursuant to paragraph 5.0. above)
offered to foreign officials shall be made to the element's Legal Counsel within
30 days of the end of the calendar quarter. Such reports shall specify the names
and titles of recipients, country(ies) represented, expenses incurred, and type
and business purpose of the hospitality. This reporting requirement is in
addition to and separate from any reports required to be made to any element
finance organization. Business unit Legal Counsel shall review such quarterly
written reports and shall prepare a written report to the appropriate Sector
Vice President and General Counsel and the Assistant General Counsel-
International. This report shall identify any hospitality exceeding the limits
set forth in these Hospitality Guidelines for which business unit Legal Counsel
has granted approval and, where applicable, has obtained a written opinion from
in-country counsel. This report also shall identify any instance of non-
compliance or violation of these Hospitality Guidelines and the corrective
action taken or to be taken.
9.0 The Hospitality Rules for Foreign Officials are approved by the Assistant
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General Counsel-International and will be updated from time-to-time. No
hospitality shall be authorized under these Guidelines unless it is in
accordance with the specific requirements of the Hospitality Rules for Foreign
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Officials.
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10.0 Because foreign legal opinions can in some instances take many days to
obtain, counsel should be consulted as early as possible, but in no event later
than five business days before the event.