EXHIBIT 10(v)
MARTIN MARIETTA CORPORATION
Deferred Compensation Plan for Selected Officers
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Adopted October 27, 1994
AMENDED JUNE 27, 1997
The name of this plan is the Martin Marietta Corporation Deferred Compensation
Plan for Selected Officers (the "Plan"). The Plan provides for the deferred
payment to selected officers ("Officers") of compensatory obligations that
Martin Marietta Corporation (the "Corporation") is expected to accrue by reason
of the Corporation's proposed combination with Lockheed Corporation (the
"Combination"). This Plan shall take effect only if the Combination is
consummated.
A. Background and Purpose. In connection with the Combination, the Board
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of Directors of the Corporation (the "Board") has amended certain of its
executive compensation plans, including the Amended and Restated Long Term
Performance Incentive Compensation Plan and the Deferred Compensation and Estate
Supplement Plan. The purpose of the amendments was to modify (and in some cases
reduce) the payment obligations that otherwise would have accrued under the
terms of those plans by reason of the Combination. Pursuant to the amendments,
most of the participants in the plans will receive single sum payments shortly
following the date of the Combination, if it is consummated. However, the Board
has decided to implement the plan amendments by deferring payment to a
participant if immediate payment would (or reasonably might) prevent the
Corporation from deducting that payment for Federal income tax purposes. The
Board has determined that the deductibility of payments to certain Officers
would be jeopardized if made on an immediate basis, and thus that the plan
amendments should be implemented by making deferred payments to those Officers.
None of the Officers has been given or may hereafter exercise any elective right
with respect to the timing of the payments. This Plan sets forth the
contractual terms under which the deferred compensation shall be accumulated and
paid.
B. Participating Officers and Amounts Deferred. The Officers for whom
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deferred compensation will be credited and paid under this Plan shall be those
Officers designated by the Board, as evidenced in the records of Board meetings
and by written notices to such Officers. The amount of deferred compensation
with respect to each Officer shall equal the Corporation's accrued obligations
to that Officer under all plans for which the Board has determined that payment
on a deferred basis is warranted. The Corporation's accrued obligation to an
Officer under each plan shall equal the single sum amount that would have been
payable to the Officer under the plan at the time of the Combination if it had
not been determined that payment to the Officer under that plan was to be
deferred. Any payroll taxes required to be withheld with respect to an
Officer's deferred compensation shall be withheld out of other wages payable to
that Officer and shall not reduce the amount of that Officer's deferred
compensation.
C. Crediting of Accounts. Each participating Officer's deferred
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compensation shall be credited to a bookkeeping account (the "Account")
maintained in that Officer's name. The Officer's Account shall be credited as
of the day on which the deferred amount would have been payable to the Officer
if the Officer's payment under the plan had not been deferred. In addition,
each Officer's Account shall be credited with interest at a daily rate
equivalent to the Federal long-term rate, as determined under section 1274(d) of
the Internal Revenue Code of 1986, as amended, applicable to the month in which
the deferred compensation is first credited to the Officer's Account. Interest
shall be credited for the period commencing with the first day as of which any
deferred compensation is credited to the Officer's Account and ending on the day
on which actual payment of the deferred compensation is made. Each
participating Officer shall at all times have a fully vested and nonforfeitable
interest in the deferred compensation and interest credited to his or her
Account.
D. Payment of Deferred Compensation. Each participating Officer's Account
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balance shall be paid to him or her in a single sum as soon as practicable
following the last day of the calendar year in which the Officer ceases to be an
officer of the Corporation (and ceases to be an officer of any parent or
affiliate of the Corporation) ("Original Payment Date") or at
such later date as is elected by the Officer in accordance with Paragraph G
below.
E. Death Benefits. In the event that an Officer dies before his or her
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Account balance has been paid, the Account balance shall be paid to the
Officer's beneficiary in a single sum as soon as practicable thereafter, unless
the Committee determines that payment at that time would jeopardize the
deductibility of the payment, in which case payment shall be made no later than
February 1 of the year following the year of the Officer's death. For purposes
of this paragraph, an Officer's surviving spouse shall be deemed to be the
Officer's beneficiary, unless the Officer has notified the Committee in writing
prior to his or her death that a different individual, individuals, or other
person (including the Officer's estate) is to be treated as the Officer's
beneficiary under this Plan. If the Officer is not survived by a spouse or
other designated beneficiary, payment shall be made to the Officer's estate.
F. Additional Payments. The payment of deferred compensation under this
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Plan is intended to protect the Corporation's right to claim Federal income tax
deductions, not to impair the economic position of the Officers for whom the
Committee has determined that deferred payments are warranted. Accordingly, if
the deferred payments to be made under this Plan cause the economic position of
any Officer to be impaired, the Committee shall direct that an additional
payment be made to that Officer (or the Officer's beneficiary) which, after
taking account of any taxes imposed on that additional payment, shall be
sufficient to eliminate that economic impairment. For purposes of this
paragraph, the economic position of an Officer shall be deemed to have been
impaired by deferral under this Plan if and to the extent that (i) the deferred
payment made to that Officer, less any income taxes or other assessments imposed
by reason of the inclusion in the Officer's gross income for any year of the
amounts paid or deferred hereunder, is less than (ii) the amount the Officer
would have accumulated if the amount deferred hereunder had been paid to the
Officer at the time of the Combination, and the amount of that payment (less
income taxes thereon) had immediately been invested (and remained invested for
the Officer's deferral period) in an investment that provided a currently
taxable rate of return equal to the crediting rate described in paragraph C.
For purposes of clause (ii), it shall
be assumed that the Officer would have been subject to income tax at the highest
applicable combined Federal and state rates for all years during the deferral
period. Notwithstanding the foregoing, the Corporation's obligation to make
additional payments under this Paragraph F shall apply only to the extent the
economic position of the Officer is impaired by the decision of the Compensation
Committee to defer amounts and shall not apply to the extent of any impairment
of the economic position of the Officer as a result of the decision of the
Officer to defer payments under Paragraph G below.
G. Deferral of Payments By Officer. An Officer may elect to defer payment
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of his Account by executing and delivering to the Corporation a Deferral
Agreement no later than the later of (i) July 27, 1997; or (ii) one year prior
to the year in which an Officer retires or otherwise terminates employment with
the Corporation (or of any parent or affiliate of the Corporation). The
Deferral Agreement shall provide for payment to begin on or about (i) the July
15th next following the Original Payment Date; or (ii) the January 15th or July
15th next following the Original Payment Date and attainment of the age
designated by the Officer in the Deferral Agreement. The Deferral Agreement
shall also provide for election of a form of payment for the Officer's Account
from among the following options:
(A) A lump sum; or
(B) Annual payments for a period of years designated by the
Officer which shall not exceed fifteen (15). The amount of each
annual payment shall be determined by dividing the Officer's
Account balance at the end of the month prior to such payment by
the number of years remaining in the designated installment
period. The installment period may be shortened, in the sole
discretion of the Committee, if the Committee at any time
determines that the amount of the annual payments that would be
made to the Officer during the designated installment period
would be too small to justify the maintenance of the Officer's
Account and the processing of payments. If an Officer dies while
actively employed or otherwise before the payment of his or her
account has
commenced, payments to the Officer's Beneficiary shall commence
on the date payments to the Officer would have commenced, taking
account of the Officer's termination of employment (by death or
before) and, if applicable, by postponing commencement until
after the date the Officer would have attained the commencement
age specified by the Officer. Whether the Officer dies before or
after the commencement of distributions, payments to the
Beneficiary shall be made for the period or remaining period
elected by the Officer. Notwithstanding anything herein, the
Committee may direct payment of all or a portion of the Officer's
Account at a date earlier than the date elected by the Officer
for the receipt of payment if the Committee determines in good
faith, based on consultation with counsel, that (i) the Officer
is suffering from a serious financial emergency caused by
circumstances beyond the Officer's control which would cause a
hardship to the Officer unless all or a portion of his or her
Account was paid; or (ii) a change in, interpretation of, or
determination under, the Internal Revenue Code or other
applicable law with respect to the Plan will have an adverse
effect on the Plan or any Officer.
H. Change in Control. In the event of a change in control of Lockheed
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Martin Corporation (the "Combined Company"), each Officer's Account balance
shall be paid to the Officer in a lump sum immediately following the change in
control, unless prior to the change in control, the Board of Directors of the
Combined Company directs otherwise by a vote of three-quarters of the incumbent
members of that board. In the event the Board of Directors of the Combined
Company directs that the Officers' Account balances not be paid upon the change
in control, (i) all deferred compensation under the Plan will be payable under
paragraph D of the Plan, and (ii) the Corporation shall immediately establish a
trust under terms equivalent to those described in IRS Revenue Procedure 92-64,
1992-2 C.B. 422, and contribute to the trust an amount equal to the sum of all
the Account balances then existing under this Plan plus $500,000. Subject to
the rights of the Corporation's creditors, as
described in IRS Revenue Procedure 92-64, all assets of the trust shall be used
exclusively to pay benefits under this Plan, except that the additional $500,000
shall be available to pay legal fees and costs incurred by the Officers if legal
or other action is necessary for the Officers to receive payment under this Plan
in accordance with paragraph D; any trust assets remaining after payment of all
benefits under this Plan shall revert to the Corporation. For the purposes of
this Plan, a change in control shall be deemed to occur in the circumstances
that would constitute a change in control under the terms of the Lockheed Martin
Corporation Omnibus Performance Award Plan, to be implemented by the Combined
Company.
I. Nature of Officers' Rights. An Officer's right to payment under this
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Plan is not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, or encumbrance. Amounts payable hereunder shall be paid
exclusively from the general assets of the Corporation, and each Officer's
rights shall be those of a general, unsecured creditor of the Corporation. The
liability of the Corporation hereunder is a mere contractual promise to make
benefit payments in the future. Any assets that may be acquired or held by the
Corporation in connection with this Plan shall be the sole property of the
Corporation, and no Officer shall have any claim against, or beneficial interest
in, any specific assets of the Corporation. It is the Corporation's intention
that the Plan be unfunded for Federal income tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974.
J. Amendment. The Board may amend or modify this Plan at any time,
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provided, however, that no amendment shall have the effect of reducing an
Officer's Account balance or of impairing an Officer's nonforfeitable right to
receive payment of the deferred compensation credited to the Officer's Account.
Further, no amendment may alter the formula or method for crediting interest to
an Officer's Account, unless the amended formula is not less favorable to the
Officer than that previously in effect, or unless the Officer has consented to
the amended formula or to an alternative method for crediting investment
increments to his or her Account. Further, no amendment may be made to limit
the effect of Paragraph G after a change in control, within the meaning of that
paragraph, occurs.
K. Administration. This Plan shall be administered by the Committee (or
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such other committee or board of the Combined Company as may hereafter be
delegated authority to oversee the compensation of the Officers participating
hereunder), which shall have full authority to interpret the Plan;
interpretations by the Committee shall be final and binding on all parties.
L. Binding Effect. This Plan is intended to represent a binding contract
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between the Corporation and each participating Officer, and its terms shall be
binding upon the Corporation, its successors, transferees, and assigns, and
shall inure to the benefit of the Officers and their heirs, executors,
administrators, and legal representatives.
M. Applicable Law. Except as otherwise required by law, this Plan and all
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matters arising hereunder shall be governed by the laws of the State of
Maryland.