Exhibit 10(xx)
LOCKHEED CORPORATION
RETIREMENT PLAN FOR DIRECTORS
EFFECTIVE JANUARY 1, 1987
AS AMENDED AS OF AUGUST 23, 1995
I. Purpose
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The purpose of this plan shall be to provide recognition and
retirement compensation to eligible members of the Board of Directors ("Board")
of Lockheed Corporation ("Company") to facilitate the Company's ability to
attract, retain, and reward members of its Board.
II. Eligibility
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Eligibility in this plan shall be limited to members of the Board who
are not employees of the Company who have at least five years of total service
on the Board as a director, and who resign or retire from the Board, or if such
director has also served on the Board of Lockheed Martin Corporation (the
"Lockheed Martin Board"), from the Lockheed Martin Board, in good standing.
Notwithstanding the foregoing, members of the Board on March 14, 1995 with less
than five years of service shall be eligible to receive benefits under this
plan.
III. Amount of Benefit
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Each eligible director shall be entitled to an annual retirement
benefit which shall be equal to the annual retainer fee for directors as in
effect at the time of the eligible director's resignation, retirement or other
cessation of service as a member of the Board. For purposes of this calculation
the annual retainer fee shall include any annual amount automatically deposited
in a trust for the purpose of purchasing the Corporation's stock in accordance
with the Deferred Compensation Plan for Directors of Lockheed Corporation. This
benefit shall be paid as provided in Article IV. No additional amount shall be
paid under this Plan for service on any of the committees of the
Board or for service on the Lockheed Martin Board, nor shall interest be paid on
these amounts.
IV. Commencement and Duration of Benefits
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A. Monthly Payments.
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Unless a lump sum payment is elected pursuant to paragraph B, benefit
payments will begin in the January following the date on which an eligible
director leaves the Board or the date on which an eligible director leaves the
Lockheed Martin Board (for purposes of this Plan, the later of such dates shall
be the date the eligible director "Retires" or the date of the eligible
director's "Retirement"). Benefits will be paid each succeeding year, in
January, and will be paid for a period equal to the number of years that the
eligible director served as an outside director of the Company, provided such
director, or spouse thereof, survives for such period. Fractional years of
service will be rounded up to the next higher whole year. In no event shall the
payment period exceed twenty (20) years. Upon the death of the eligible
director, any remaining retirement benefits under this plan will be paid to his
or her spouse according to the same payment schedule as set forth above. If
there is no spouse living at the time of death of the eligible director, no
further payments will be made.
B. Lump Sum Payment Option.
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In lieu of receipt of annual payments under paragraph A above, an
eligible director may irrevocably elect to receive in a single lump sum payment
an amount which is the actuarial equivalent of the annual benefits described in
paragraph A. The actuarial equivalent shall be computed using the interest rate
which is one percent (1%) above the rate which would be used by the Pension
Benefit Guaranty Corporation to determine the present value of an immediate lump
sum distribution on termination of a pension plan, as in effect on January 1 of
the year in which monthly payments would otherwise begin under this Plan, and
the Lockheed Mortality Tables. The election must be made within the sixty (60)
day period preceding the director's Retirement by filing a written election with
the Company's Secretary. Payment will be made to the eligible director six (6)
months following
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the date annual payments would otherwise begin pursuant to paragraph A.
If a director who elects a lump sum payment should die after
Retirement but before the lump sum payment date, the lump sum benefit will be
paid on the lump sum payment date to the director's spouse. If the spouse is
not living on the lump sum payment date, no payment will be made.
C. Death While a Board Member.
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If the eligible director should die while still a member of the Board
or the Lockheed Martin Board, the spouse will receive 100% of the benefit to
which the director would have been entitled had the director resigned on the
date he or she died. Annual payments will commence to the spouse as of the date
on which the eligible director would have become entitled to receive payments.
In lieu of receiving annual payments, the surviving spouse may irrevocably elect
within sixty (60) days of the director's death to receive an actuarially
equivalent lump sum payment, calculated in accordance with paragraph B, payable
six (6) months after the date annual payments to the spouse would otherwise
begin. If the spouse is not living at the time benefits become payable, no
payment will be made.
D. Involuntary Termination of Director Status.
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If an eligible director's status as a Member of the Board or the
Lockheed Martin Board is involuntarily terminated other than by death within
thirty (30) calendar days following such involuntary change in status there
shall be paid to such director an actuarially equivalent lump sum payment,
calculated in accordance with paragraph B, of the Director's retirement benefit.
E. Directors Retired Prior to August 23, 1995.
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Directors who have retired prior to August 23, 1995 and who are
currently receiving monthly benefits will continue to receive monthly benefits
through December, 1995. Annual payments to such former directors will begin in
January, 1996.
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Directors who have retired prior to August 23, 1995 and who are in the
six month waiting period described in paragraph B above will receive their
previously elected lump sum benefit as scheduled.
Directors who have retired prior to August 23, 1995 but are not yet
receiving benefits because they have not attained age 65 may, within the last 60
days of 1995, make an election under paragraph B to receive a lump sum payment
in July, 1996. In the absence of such an election, annual payments to such
former directors will begin in January 1996.
V. Administration
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The Salary Board of the Company, or the Vice President of Human
Resources, if authorized to act on its behalf, shall have full and final
authority to interpret this plan to make determinations which they believe
advisable for the administration of the plan, to approve ministerial changes or
amendments to the plan, to interpret plan provisions, and to approve changes as
may from time to time be required by law or regulation. All decisions and
determinations by the Salary Board shall be final and binding upon all parties.
If any person entitled to payments under this plan is, in the opinion
of the Salary Board or its designee, incapacitated and unable to use such
payments in his or her own best interest, the Salary Board or its designee may
direct that payments (or any portion) be made to that person's legal guardian or
conservator, or that person's spouse, as an alternative to the payment to the
person unable to use the payments. The Salary Board or its designee shall have
no obligation to supervise the use of such payments, and court-appointed
guardianship or conservatorship may be required.
This Plan shall be governed by the laws of the State of Delaware.
VI. TRUST
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Although the Plan is an unfunded plan, the Company has established a
trust (the "Trust") pursuant to a trust agreement
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dated December 22, 1994 by and between the Company and J. P. Morgan California
to hold assets, subject to the claims of the Company's creditors in the event of
its insolvency, to pay benefits under this Plan. The Company shall no later than
nine months following the close of its fiscal year make contributions to the
Trust in an amount sufficient, when added to the then principal of the Trust and
after consideration of benefits to be paid pursuant to other plans covered by
the Trust, to equal the present value of benefits which have accrued under the
Plan during the preceding fiscal year, as such amount is determined by an
independent actuary.
VII. AMENDMENT OR TERMINATION OF PLAN
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The Board shall have the right to amend or terminate this Plan at any
time. In the event of Plan amendment or termination, the Plan benefit payable
on account of a retired or deceased director shall not be impaired, and the Plan
benefit of other directors shall not be less than the benefit to which each such
director would have been entitled if he or she had retired immediately prior to
such amendment or termination of the Plan.
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