Exhibit 10.5

 

LOCKHEED MARTIN SUPPLEMENTARY PENSION PLAN

FOR TRANSFERRED EMPLOYEES OF GE OPERATIONS

 

(Effective January 1, 2005)

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ARTICLE I

 

PURPOSES OF THE PLAN

 

The purposes of the Lockheed Martin Supplementary Pension Plan for Transferred
Employees of GE Operations (the “Plan”) is to provide Transferred Employees with
a supplemental pension benefit that, in combination with the Martin Marietta
Corporation Retirement Income Plan II (now the Lockheed Martin Corporation
Retirement Income Plan) or KAPL Inc. Pension Plan for Salaried Employees and
anticipated social security benefits, delivers a total retirement income equal
to a maximum of 60 percent of the employee’s average compensation over the final
three years.

 

The Plan is amended and restated effective January 1, 2005, in order to comply
with the requirements of Code section 409A. The amendment and restatement
applies only to the portion of a Participant’s benefit that is earned or becomes
vested on or after January 1, 2005. The portion of a Participant’s benefit that
was earned and vested prior to January 1, 2005 shall be governed by Appendix A.

 

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ARTICLE II

 

DEFINITIONS

 

Unless the context indicates otherwise, the following words and phrases when
used in this Plan shall have the meanings hereinafter indicated:

 

1. BENEFICIARY — The person or persons designated by the Participant as his or
her beneficiary under the Qualified Pension Plan. If no beneficiary is
designated under the Qualified Pension Plan, or if no designated beneficiary
survives the Participant, the Participant’s estate shall be the beneficiary.

 

2. BOARD — The Board of Directors of Lockheed Martin Corporation.

 

3. CODE — The Internal Revenue Code of 1986, as amended.

 

4. COMMITTEE — The committee described in Section 1 of Article VII.

 

5. COMPANY — Lockheed Martin Corporation and its subsidiaries.

 

6. ELIGIBLE EMPLOYEE — An employee of the Company who transferred employment to
Martin Marietta Corporation as a result of the agreement between Martin Marietta
Corporation and General Electric Company dated November 22, 1992 or who
transferred employment under the Lakeland Transfer Agreement and who meets the
eligibility criteria in Section 1 of Article III, and who satisfies such
additional requirements for participation in this Plan as the Committee may from
time to time establish. The Pension Plans Administration Committee shall
interpret the participation requirements established by the Committee for all
Participants except elected officers subject to Section 16(b) of the Securities
and Exchange Act of 1934. Determinations of participation requirements for
elected officers shall be made by the Committee.

 

7. GRANDFATHERED 2004 BENEFIT — The benefit calculated under the terms of the
Plan in effect prior to January 1, 2005 (attached as Appendix A), determined as
if the Participant had terminated from employment on December 31, 2004 (or the
Participant’s actual termination date, if earlier).

 

8. PARTICIPANT — An Eligible Employee who meets the requirements for
participation contained in Article III; the term shall include a former employee
and survivors/beneficiaries whose benefit has not been fully distributed.

 

9. PLAN – The Lockheed Martin Supplementary Pension Plan for Transferred
Employees of GE Operations, or any successor plan.

 

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10. QUALIFIED PENSION PLAN – The Lockheed Martin Corporation Retirement Income
Plan (“Retirement Income Plan “) or KAPL Inc. Pension Plan for Salaried
Employees (“KAPL Inc. Plan”). All terms used in this Plan which are defined in
the Retirement Income Plan or KAPL Inc. Plan have the same meanings, unless
otherwise expressly provided in this Plan.

 

11. YEAR — The calendar year.

 

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ARTICLE III

 

SUPPLEMENTARY PENSION BENEFIT

 

1. Eligibility. Each Employee who was classified as an Executive Career Band
(“EB”) employee on or prior to December 31, 1993, who has five or more years of
Vesting Service and who is a participant in the Qualified Pension Plan shall be
eligible to receive benefits under this Article III. However, except as provided
in Section 2.D., an Employee who retires under the Qualified Pension Plan before
the first day of the month following attainment of age 55 or an Employee who
leaves the Service of the Company before attainment of age 55, shall not be
eligible for a benefit under this Article III.

 

An Employee who meets the other requirements specified in this Section shall be
eligible for benefits under this Article III so long as his assigned position
level or position of equivalent responsibility throughout any consecutive three
years of the 15 year period ending on the last day of the month preceding his
termination of service is at least at the level of a director (or other position
equivalent to General Electric Company’s EB) even though he is not employed at
that level on the date his Service terminates.

 

2. Amount of Benefit.

 

A. Definitions. For purposes of this Section 2, the following terms have the
following meanings:

 

Annual Estimated Social Security Benefit. The annual equivalent of the maximum
possible Primary Insurance Amount payable, after reduction for early retirement,
as an old-age benefit to an employee who retired at age 62 on January 1 of the
calendar year in which occurred the Employee’s actual date of retirement or
death, whichever is earlier. The Company shall determine the Annual Estimated
Social Security Benefit in accordance with the Social Security Act in effect at
the end of the calendar year preceding such January 1.

 

If an Employee has less than 35 years of Credited Service, the Annual Estimated
Social Security Benefit determined under the above paragraph is multiplied by a
factor, the numerator of which is the number of years of the Employees’ Credited
Service to his or her date of retirement or death, whichever is earlier, and the
denominator of which is 35.

 

The Annual Estimated Social Security Benefit shall be adjusted to include any
social security, severance, or similar benefit provided under foreign law or
regulations as the Committee may prescribe by rules and regulations.

 

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Annual Pension Payable under the Qualified Pension Plan. The sum of:

 

(1) (i) the annual normal, early or late retirement benefit under Article V of
the Qualified Pension Plan, including the Personal Pension Account (excluding
the regular supplement under Article V(4) of the Qualified Pension Plan), or
(ii) the normal, optional or disability retirement benefit under the RIP II or
KAPL Annex of the Qualified Pension Plan, less

 

(2) to the extent the Committee so determines, the benefit payable under any
other pension plan contract, or policy of the Plan Sponsor (whether qualified or
non-qualified), or government program attributable to periods of service for
which Credited Service is granted by the Committee for the determination of the
benefit under this Plan or is credited by the Qualified Pension. All such
amounts shall be determined before applying any reduction factors for Early,
Optional or Disability Retirement, for election of any optional form of Pension
at retirement, a qualified domestic relations order(s), if any, or in connection
with any other adjustment or supplement made pursuant to the Qualified Pension
Plan or any other pension plan.

 

For purposes of this paragraph, the Employee’s Pension shall include the
Personal Pension Account Annuity payable to the Employee or the Employee’s
spouse on the date of the Employee’s retirement or death, regardless of whether
such annuity commenced on such date.

 

Annual Retirement Income. For Employees who retire or die in active Service on
or after April 5, 1993, the amount determined by multiplying 1.75% of Average
Annual Compensation by the number of years of Credited Service completed at the
date of retirement or death, whichever is earlier.

 

Average Annual Compensation. One-third of the Employee’s Compensation for the
highest consecutive three years during the last 10 years immediately preceding
his date of retirement or death, whichever is earlier. In computing Average
Annual Compensation, normal straight-time earnings shall be substituted for
actual Compensation for any month in which such normal straight-time earnings
are greater.

 

Compensation. Salary (including any deferred salary approved by the Committee as
compensation for purposes of this Plan) plus:

 

(1) For persons then eligible for Incentive Compensation, the total amount of
any Management Incentive Compensation Plan earnings, unless such Incentive
Compensation is excluded by the Board or a committee thereof;

 

(2) For persons who would then have been eligible for Incentive Compensation if
they had not been participants in a Sales Commission Plan or other variable
compensation plan, the total amount of sales commissions (or other variable
compensation earned unless such compensation is excluded by the Board or a
committee thereof);

 

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(3) For all other persons, the sales commissions and other variable compensation
earned to the extent such earnings were then included under the Qualified
Pension Plan, plus any amounts (other than salary and those mentioned in clauses
(1) through (3) above) which were then included as compensation under the
Qualified Pension Plan except any amounts which the Committee may exclude from
the computation of “Compensation” and subject to the powers of the Committee
with respect to payment of benefits.

 

The Committee shall specify the basis for determining an Employee’s Compensation
for any portion of the three years used to compute the Employee’s Average Annual
Compensation during which the Employee was not employed by an employer
participating in this Plan.

 

Credited Service. Credited Service has the same meaning as in the Qualified
Pension Plan. For periods before January 1, 1976, Credited Service as a
full-time Employee also includes all Service credited under the Qualified
Pension Plan for any period during which the employee was a full-time Employee
for purposes of the Qualified Pension Plan. Credited Service also includes:

 

(1) Any period of Service with the Company or an Affiliate as the Committee may
otherwise provide by rules and regulations issued with respect to this Plan; and

 

(2) Any period of service with another employer as the Board may approve, if any
conditions specified in such approval have been met.

 

B. Normal Retirement Benefit. Subject to the limitations in Section G and
Section 1 of Article VII, the benefit payable to an eligible Employee who
retires on or after his or her normal retirement date under the Plan, shall be
the excess, if any, of the employee’s Annual Retirement Income, over the sum of

 

(1) The Employee’s Annual Pension Payable under the Qualified Pension Plan
(including the Personal Pension Account Annuity and excluding any supplements
payable under the Qualified Pension Plan) (calculated as a five-year certain
annuity),

 

(2)  1/2 of the Employee’s Annual Estimated Social Security Benefit,

 

(3) the benefit payable from the Lockheed Martin Corporation Supplemental
Retirement Plan.

 

C. Early, Optional or Disability Retirement. Subject to the limitations in
Section G and Section 1 of Article VII, the benefit payable to an eligible
Employee who, after reaching age 60, retires on an optional retirement date
under the Qualified Pension Plan shall be computed in the

 

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manner provided by Section B (for an employee retiring on his or her normal
retirement date) but taking into account only Credited Service and Average
Annual Compensation to the actual date of optional retirement. The annual
benefit payable to an eligible Employee who, after reaching age 55 (but before
reaching age 60), retires under the early retirement provisions of the Qualified
Pension Plan shall equal the amount in section B but taking into account only
Credited Service and Average Annual Compensation to the Employee’s actual
termination of employment and reduced for early retirement using the early
retirement reduction factor under Article V(2) of the Qualified Pension Plan.

 

Subject to the requirements of Section 1 of Article VII, the annual benefit
payable to an eligible Employee who has satisfied the eligibility requirements
to receive a Disability Pension under the RIP II or KAPL Annex of the Qualified
Pension Plan (to the extent consistent with the requirements of Code section
409A(a)(2(C)) shall be computed in the manner provided by Section B (for an
Employee retiring on his normal retirement date) taking into account only
Credited Service and Average Annual Compensation to the actual date of
disability retirement and not reduced for the Disability Supplement in the RIP
II or KAPL Annex of the Qualified Pension Plan. In the case of an eligible
Employee whose date of retirement precedes the first day of the month after
reaching age 60 the Plan benefit shall then be reduced by 12%.

 

Subject to provisions of Section 1 of Article VII, if the Disability Pension
payable to the Employee under the Qualified Pension Plan is discontinued as a
result of the Employee’s disability ceasing before the Employee reaches age 60,
the benefit provided under this Section C. shall also be discontinued.

 

D. Special Benefit Protection for Certain Employees. Subject to the provisions
of Section 1 of Article VII, a former Employee whose Service with the Company is
terminated on or after December 31, 1994 and after completing 25 or more years
of Vesting Service, who does not withdraw his required or voluntary
contributions from the Qualified Pension Plan before retirement, shall be
eligible for a benefit under this Plan commencing upon the later of termination
of employment with the Company and the attainment of age 60 if:

 

(1) the Employee’s Service is terminated for transfer to a successor employer
and

 

(2) the Employee does not retire under the Qualified Pension Plan until the
later of (1) termination of service with the successor employer and (2) the
first of the month after reaching age 60.

 

In determining the benefit under this Plan, the Average Annual Compensation
shall be based on the last 120 completed months with the successor employer
before the Employee’s Service termination date and the Annual Estimated Social
Security Benefit shall be determined as though the Employee’s retirement date
was the date of termination.

 

E. Survivor Benefits. Subject Section 1 of Article VII, if a survivor benefit
applies with respect to the past and future service annuity portion of a
Employee’s Annual Pension payable under the Qualified Pension Plan, such
survivor benefit shall automatically apply to any benefit

 

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which he or she may be eligible under this Plan. The Employee’s benefit shall be
adjusted and paid in the same manner as such pension payable under the Qualified
Pension Plan is adjusted and paid on account of such survivor benefit. Payments
to the survivor shall commence as soon as administratively practicable following
the later of: (1) the Employee’s 55th birthday, or (2) the Employee’s date of
death.

 

F. Payments Upon Death.

 

Subject to the provisions of Section 1 of Article VII, if an eligible Employee
dies in active Service, or following retirement with a benefit from this Plan,
and a death benefit (other than a return of Employee contributions with interest
including an Employee’s Personal and Voluntary Pension Account) is payable to
the beneficiary or Surviving Spouse of such Employee under the Qualified Pension
Plan, a death benefit shall also be payable to the beneficiary or Surviving
Spouse under this Plan as follows:

 

(1) Any such death benefit payable to a surviving spouse under this Plan shall
equal 50% of the Employee’s Annual Retirement Income under this Plan reduced by
(1) 100% of the Employee’s preretirement surviving spouse benefit payable or
other lump sum benefit under the Qualified Pension Plan, (2) 25% of the
Employee’s Annual Estimated Social Security Benefit, (3) the Employee’s Personal
Pension Account benefit , and (4) the benefit payable under the Lockheed Martin
Corporation Supplemental Retirement Plan. Payments to the surviving spouse shall
commence as soon as administratively practicable after the later of: (1) the
Employee’s 55th birthday, or (2) the Employee’s date of death.

 

(2) Any such death benefit payable to a surviving spouse under this Plan shall
take into account only Credited Service and Average Annual Compensation to the
earlier of the Employee’s death or termination of employment and will be reduced
for early retirement using the early retirement reduction factors under Article
V(2) of the Qualified Pension Plan.

 

(3) Subject to the provisions of Section 1 of Article VII, any such benefit
payable to a surviving spouse shall be paid as soon as administratively
practicable after the later of: (1) the Employee’s 55th birthday, or (2) the
Employee’s date of death and will be paid in accordance with the payment
provisions of the RIP or KAPL Annex of the Qualified Pension Plan. If benefits
from the Qualified Pension Plan are paid under the payment provisions of the RIP
or KAPL Annex of the Qualified Pension Plan, then benefits from this Plan will
be paid in the same payment form.

 

G. Limitations on Benefits.

 

(a) Notwithstanding any provision of this Plan to the contrary, if the sum of:

 

(1) The annual benefit (calculated before applying any reductions for early
retirement or additions for any supplements payable under the Qualified Pension
Plan, and prior to any calculation for disability retirement reductions)
otherwise payable to an Employee under this Plan;

 

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(2) The Employee’s Annual Pension Payable under the Qualified Pension Plan
(including the Personal Pension Account Annuity) (calculated as a five-year
certain annuity);

 

(3) 100% of the Annual Estimated Social Security Benefit before any adjustment
for less than 35 years of Pension Benefit Service;

 

(4) the Employee’s annual benefit under the Lockheed Martin Corporation
Supplemental Retirement Plan; and

 

to the extent the Committee so determines, the benefit payable under any other
pension plan contract, or policy of the Plan Sponsor (whether qualified or
non-qualified), or government program attributable to periods of service for
which Credited Service is granted by the Committee for the determination of the
benefit under this Plan or is credited by the Qualified Pension exceeds 60% of
his or her Annual Average Compensation, the benefit payable under this Plan
shall be reduced by the amount of the excess.

 

(b) Notwithstanding any provision in this Plan to the contrary, the amount of
the benefit payable and any death benefit payable to or on behalf of any
Employee who is or was an Officer of the Company on the date of his termination
of employment or death, whichever is earlier, shall be determined according to
such general rules and regulations as a Committee appointed by the Board of
Directors may adopt, subject to the limitation that any such benefit or death
benefit may not exceed the amount which would be payable under this Plan in the
absence of such rules and regulations.

 

H. Adjustments Following Retirement. If the Pension payable under the Qualified
Pension Plan to any Employee is increased following the Employee’s retirement as
a result of a general increase in the Pensions payable to retired employees
under that plan, no such increase will be made under this Plan.

 

I. Non-duplication of Benefits. Benefits under this Article III are intended to
supplement the Participant’s actual benefit under the Qualified Pension Plan as
necessary to provide the Participant with the full benefit the Participant would
have received under the Qualified Pension Plan with the special adjustments
described above. To prevent duplication of benefits, the full benefit under the
Qualified Pension Plan and the enhanced benefit described above shall be
calculated without reduction for Code section 415 and Code section 401(a)(17),
then reduced by the benefit payable from the Qualified Pension Plan and further
reduced by the benefit payable from the Lockheed Martin Corporation Supplemental
Retirement Plan, then reduced by the Grandfathered 2004 Benefit. Participants
have no right to duplicate benefits with respect to the same period of service,
and the Committee may make such adjustments to the benefits under this Plan as
the Committee deems necessary to prevent duplication of benefits.

 

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ARTICLE IV

 

PAYMENT OF BENEFITS

 

1. Vesting. Except as provided in Article V, and subject to the Company’s right
to discontinue the Plan as provided in Article VI, a Participant shall have a
non-forfeitable interest in benefits payable under this Plan to the same extent
as benefits are vested under the applicable Qualified Pension Plan. As provided
in Article V, if a Participant acquires a right to receive payments under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the Company.

 

2. Form of Payment. A Participant may elect to receive benefits in any annuity
form that is available under a Qualified Pension Plan on the date of the
Participant’s election that has been designated by the Senior Vice President,
Human Resources as available for election under this Plan, provided (i) the
election is filed with the Company in writing no later than the later of
(a) December 16, 2005 and (b) the date that is 30 days after the Participant
commences participation in the Plan, and (ii) the Participant’s employment has
not terminated prior to filing the election. If the Participant has not validly
elected a form of payment, (i) an unmarried Participant shall be deemed to have
elected payment in the form of a monthly annuity for the life of the Participant
with no further payments to anyone after his or her death, and (ii) a married
Participant shall be deemed to have elected payment in the form of a reduced
monthly annuity for the life of the Participant with, after the Participant’s
death, a 50% survivor annuity for the life of the Participant’s spouse. No lump
sum payment form is available under this Plan. Actuarial adjustments shall be
based on the factors set forth in the Qualified Pension Plan. All elections
under this Section 2 must be made in the form and manner prescribed by the
Company. Benefits paid in a form described in this Section 2 shall commence as
soon as administratively practicable following the later of (i) the month in
which the Participant terminates employment, or (ii) the month in which the
Participant attains age 55. Notwithstanding the foregoing, benefits paid on
account of the termination of employment of a Participant who is reasonably
determined by the Company to be a “specified employee” within the meaning of
Code section 409A(a)(2)(B)(i), shall not commence before six (6) months
following the month in which the Participant terminates employment No interest
shall be paid between the date of termination of employment and the payment
date.

 

Subject to the provisions of Section 1 of Article VII, if an Employee’s pension
benefit under the Qualified Pension Plan is suspended for any month in
accordance with the re-employment provisions thereof, the Employee’s benefit
under this Plan for that month shall likewise be suspended.

 

Cash-out of Small Benefits. Notwithstanding the above, if the Value of the sum
of the benefits payable to a Participant or Beneficiary under this Plan does not
exceed $10,000, all such benefits will be paid in a single lump sum payment in
full discharge of all liabilities with

 

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respect to such benefits. For purposes of this Section, Value shall be
determined as of the Participant’s termination of employment or attainment of
age fifty-five (55), as applicable, and shall mean the present value of a
Participant’s or Beneficiary’s benefits, excluding the Grandfathered 2004
Benefit, based upon the applicable mortality table and applicable interest rate
in Code section 417(e)(3)(ii) for the calendar month preceding the Plan Year in
which the termination of employment or attainment of age fifty-five (55) occurs.
Notwithstanding the foregoing sentence, benefits paid under this Section 2. to a
Participant who is reasonably determined by the Company to be a “specified
employee” within the meaning of Code section 409A(a)(2)(B)(i), shall not
commence before six (6) months following the later of (i) the month in which the
Participant terminates employment, or (ii) the month in which the Participant
attains age fifty-five (55). No interest shall be paid between the date of
termination of employment or attainment of age fifty-five (55), as applicable,
and the payment date.

 

Prospective Elections. Participants may elect to change the form of payment of
benefits or further delay the commencement of benefits as provided in this
Section 2. All prospective elections must be made in the form and manner
prescribed by the Company. This provision does not apply to Surviving Spouses or
Beneficiaries. Subject to the provisions of Section 1 of Article VII, other
changes in the form of benefit, including changes between actuarially equivalent
forms of benefit, if any, may be made only as determined by the Senior Vice
President, Human Resources, of the Company in accordance with Code section 409A.

 

Form of Payment. A Participant may elect to delay the commencement of payments
or to receive payment in any other annuity form designated by the Senior Vice
President, Human Resources, of the Company, provided that such election is made
in writing not less than twelve (12) months before the date the payment would
have first commenced under the Participant’s prior election. In addition, the
first payment under the new election must commence no earlier than sixty
(60) months from the date when the payment would have first commenced under the
Participant’s prior election.

 

3. Deductibility of Payments. Subject to the provisions of Section 1 of Article
VII, in the event that the payment of benefits under Section 2 would prevent the
Company from claiming an income tax deduction with respect to any portion of the
benefits paid, the Committee shall have the right to modify the form and timing
of distributions as necessary to maximize the Company’s tax deductions. In the
exercise of its discretion to adopt a modified distribution schedule, the
Committee shall undertake to have distributions made at such times and in such
amounts as most closely approximate the payment method described in Section 2,
consistent with the objective of maximum deductibility for the Company. The
Committee shall have no authority to reduce a Participant’s accrued benefit
under this Plan or to pay aggregate benefits less than the Participant’s accrued
benefit in the event that all or a portion thereof would not be deductible by
the Company.

 

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4. Change of Law. Notwithstanding anything to the contrary herein, subject to
the provisions of Section 1 of Article VII, if the Committee determines in good
faith, based on consultation with counsel, that the federal income tax treatment
or legal status of this Plan has or may be adversely affected by a change in the
Code, Title I of the Employee Retirement Income Security Act of 1974, or other
applicable law or by an administrative or judicial construction thereof, the
Committee may direct that the benefits of affected Participants or of all
Participants be distributed as soon as practicable after such determination is
made, to the extent deemed necessary or advisable by the Committee to cure or
mitigate the consequences, or possible consequences of, such change in law or
interpretation thereof.

 

5. Acceleration upon Change in Control.

 

Notwithstanding any other provision of the Plan, the accrued benefit of each
Participant shall be one-hundred percent (100%) vested and distributed in a
single lump sum within fifteen (15) calendar days following a “Change in
Control.”

 

For purposes of this Plan, a Change in Control shall include and be deemed to
occur upon the following events:

 

  (a) A tender offer or exchange offer is consummated for the ownership of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding voting securities entitled to vote in the
election of directors of the Company.

 

  (b) The Company is merged, combined, consolidated, recapitalized or otherwise
reorganized with one or more other entities that are not Subsidiaries and, as a
result of the merger, combination, consolidation, recapitalization or other
reorganization, less than 75% of the outstanding voting securities of the
surviving or resulting corporation shall immediately after the event be owned in
the aggregate by the stockholders of the Company (directly or indirectly),
determined on the basis of record ownership as of the date of determination of
holders entitled to vote on the action (or in the absence of a vote, the day
immediately prior to the event).

 

  (c) Any person (as this term is used in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act, but excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding securities entitled to vote in the election of
directors of the Company.

 

  (d)

At any time within any period of two years after a tender offer, merger,
combination, consolidation, recapitalization, or other reorganization or a
contested election, or any combination of these events, the “Incumbent
Directors” shall

 

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cease to constitute at least a majority of the authorized number of members of
the Board. For purposes hereof, “Incumbent Directors” shall mean the persons who
were members of the Board immediately before the first of these events and the
persons who were elected or nominated as their successors or pursuant to
increases in the size of the Board by a vote of at least three-fourths of the
Board members who were then Board members (or successors or additional members
so elected or nominated).

 

  (e) The stockholders of the Company approve a plan of liquidation and
dissolution or the sale or transfer of substantially all of the Company’s
business and/or assets as an entirety to an entity that is not a Subsidiary.

 

Notwithstanding the foregoing, no distribution shall be made solely on account
of a Change in Control and prior to the benefit commencement date specified in
Section 2 of Article V unless the Change in Control is an event qualifying for a
distribution of deferred compensation under Section 409A(a)(2)(A)(v) of the
Code.

 

This Section 5 shall apply only to a Change in Control of Lockheed Martin
Corporation and shall not cause immediate payout of benefits under this Plan in
any transaction involving the Company’s sale, liquidation, merger, or other
disposition of any subsidiary.

 

The Committee may cancel or modify this Section 5 at any time prior to a Change
in Control. In the event of a Change in Control, this Section 5 shall remain in
force and effect, and shall not be subject to cancellation or modification for a
period of five years, and any defined term used in Section 5 shall not, for
purposes of Section 5, be subject to cancellation or modification during the
five year period.

 

6. Tax Withholding. To the extent required by law, the Company shall withhold
from benefit payments hereunder any Federal, state, or local income or payroll
taxes required to be withheld and shall furnish the recipient and the applicable
government agency or agencies with such reports, statements, or information as
may be legally required. No benefit payments shall be made to the Participant
until the withholding obligation for taxes under Code sections 3101(a) and
3101(b) has been satisfied with respect to the Participant.

 

7. Retiree Medical Withholding. A Participant may direct the Company to withhold
from the Participant’s benefit payments hereunder all or a portion of the amount
that the Participant is required to pay for Company-provided retiree medical
coverage.

 

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ARTICLE V

 

EXTENT OF PARTICIPANTS’ RIGHTS

 

1. Unfunded Status of Plan. This Plan constitutes a mere contractual promise by
the Company to make payments in the future, and each Participant’s rights shall
be those of a general, unsecured creditor of the Company. No Participant shall
have any beneficial interest in any specific assets that the Company may hold or
set aside in connection with this Plan. Notwithstanding the foregoing, to assist
the Company in meeting its obligations under this Plan, the Company may set
aside assets in a trust or trusts described in Revenue Procedure 92-64, 1992-2
C.B. 422, and the Company may direct that its obligations under this Plan be
satisfied by payments out of such trust or trusts. The assets of any such trust
will remain subject to the claims of the general creditors of the Company. It is
the Company’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.

 

2. Nonalienability of Benefits. A Participant’s rights under this Plan shall not
be assignable or transferable and any purported transfer, assignment, pledge or
other encumbrance or attachment of any payments or benefits under this Plan, or
any interest therein shall not be permitted or recognized, other than the
designation of, or passage of payment rights to, a Beneficiary or transfer of an
interest in this Plan to a Participant’s former spouse incident to divorce under
a Qualified Domestic Relations Order.

 

3. Forfeiture. If, following the date on which a Participant shall retire under
this Plan, a Participant shall engage in the operation or management of a
business, whether as owner, stockholder, partner, officer, employee, consultant,
or otherwise, which at such time is in competition with the Company or any of
its subsidiaries, or shall disclose to unauthorized persons information relative
to the business of the Company or any of its subsidiaries which the Participant
shall have reason to believe is confidential, or otherwise act, or conduct
oneself, in a manner which the Participant shall have reason to believe is
contrary to the best interest of the Company, or shall be found by the Committee
to have committed an act during the term of the Participant’s employment which
would have justified the Participant being discharged for cause, the
Participant’s retirement benefit under this Plan shall terminate. Application of
this Section will be at the discretion of the Committee.

 

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ARTICLE VI

 

AMENDMENT OR TERMINATION

 

1. Amendment. The Board may amend, modify, suspend or discontinue this Plan at
any time subject to any shareholder approval that may be required under
applicable law, provided, however, that no such amendment shall have the effect
of reducing a Participant’s accrued benefit or postponing the time when a
Participant is entitled to receive a distribution of his accrued benefit unless
each affected Participant consents to such change.

 

2. Termination. Subject to the provisions of Section 1 of Article VII, the Board
reserves the right to terminate this Plan at any time and to pay all
Participants their accrued benefits in a lump sum or to make other provisions
for the payment of benefits (e.g. purchase of annuities) immediately following
such termination or at such time thereafter as the Board may determine.

 

3. Transfer of Liability. The Board reserves the right to transfer to another
entity all of the obligations of Company with respect to a Participant under
this Plan if such entity agrees pursuant to a binding written agreement with the
Company or its subsidiaries to assume all of the obligations of the Company
under this Plan with respect to such Participant.

 

4. Merger. The Board reserves the right to merge all or part of this Plan with
or into another plan, provided (1) such other plan preserves all of the
obligations of the Company under this Plan with respect to such Participant and
(2) each Participant in the Plan would (if the Plan then terminated) receive a
benefit immediately after the merger which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger (if
the Plan had then terminated).

 

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ARTICLE VII

 

ADMINISTRATION

 

1. The Committee. This Plan shall be administered by the Management Development
and Compensation Committee of the Board or such other committee of the Board as
may be designated by the Board. The members of the Committee shall be designated
by the Board. A majority of the members of the Committee (but not fewer than
two) shall constitute a quorum. The vote of a majority of a quorum or the
unanimous written consent of the Committee shall constitute action by the
Committee. The Committee and its delegates shall have full discretion to
construe and interpret the terms and provisions of the Plan, which
interpretation or construction shall be final, conclusive and binding on all
parties, including but not limited to the Company and any Participant or
Beneficiary, except as otherwise provided by law. Notwithstanding anything
contained in the Plan or in any document issued under the Plan, it is intended
that the Plan will at all times conform to the requirements of Code section 409A
and any regulations or other guidance issued thereunder, and that the provisions
of the Plan will be interpreted to meet such requirements. If any provision of
the Plan is determined not to conform to such requirements, the Plan shall be
interpreted to omit such offending provision.

 

2. Delegation and Reliance. The Committee may delegate to the officers or
employees of the Company the authority to execute and deliver those instruments
and documents, to do all acts and things, and to take all other steps deemed
necessary, advisable or convenient for the effective administration of this Plan
in accordance with its terms and purpose. In making any determination or in
taking or not taking any action under this Plan, the Committee may obtain and
rely upon the advice of experts, including professional advisors to the Company.
Except as otherwise provided in Section 5, the Committee delegates the authority
to adjudicate claims to the Pension Plans Administration Committee. No member of
the Committee or officer of the Company who is a Participant hereunder may
participate in any decision specifically relating to his or her individual
rights or benefits under the Plan.

 

3. Exculpation and Indemnity. Neither the Company nor any member of the Board or
of the Committee, nor any other person participating in any determination of any
question under this Plan, or in the interpretation, administration or
application thereof, shall have any liability to any party for any action taken
or not taken in good faith under this Plan or for the failure of the Plan or any
Participant’s rights under the Plan to achieve intended tax consequences, or to
comply with any other law, compliance with which is not required on the part of
the Company.

 

4. Facility of Payment. If a minor, person declared incompetent, or person
incapable of handling the disposition of his or her property is entitled to
receive a benefit, make an application, or make an election hereunder, the
Committee may direct that such benefits be paid to, or such application or
election be made by, the guardian, legal representative, or person having the
care and custody of such minor, incompetent, or incapable person. Any payment

 

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made, application allowed, or election implemented in accordance with this
Section shall completely discharge the Company and the Committee from all
liability with respect thereto.

 

5. Proof of Claims. The Pension Plans Administration Committee may require proof
of the death, disability, incompetency, minority, or incapacity of any
Participant or Beneficiary and of the right of a person to receive any benefit
or make any application or election.

 

6. Claim Procedures. The procedures when a claim under this Plan is wholly or
partially denied by the Pension Plans Administration Committee are as follows:

 

  (a) The Pension Plans Administration Committee shall:

 

  (i) notify the claimant within a reasonable time (not to exceed 180 days) of
the adverse benefit determination, setting forth the specific reasons therefore;
and

 

  (ii) afford the claimant a reasonable opportunity for a full and fair review
of the decision.

 

  (b) The notice of such adverse determination shall set forth, in addition to
the specific reasons for the adverse determination, the following:

 

  (i) identification of pertinent provisions of this Plan;

 

  (ii) such additional information as may be necessary for the claimant to
perfect the claim, and an explanation of why such information is necessary; and

 

  (iii) an explanation of the claims review procedure, including time limits and
a statement of the claimant’s right to bring a civil action under ERISA section
502(a) following an adverse benefit determination on review.

 

  (c) Within sixty days following notification of an adverse benefit
determination, the claimant or the claimant’s authorized representative may
request that the adverse determination be reviewed. The Pension Plans
Administration Committee shall review adverse determinations with respect to
Participants who are not elected officers of the Company. The Committee shall
review adverse determinations with respect to elected officers of the Company.
The reviewing committee shall take appropriate steps to review its decision in
light of any further information or comments submitted by the claimant. The
reviewing committee may hold a hearing at which the claimant may present the
basis of any claim for review.

 

  (d)

The reviewing committee shall render a decision within a reasonable time (not to
exceed 120 days) after the claimant’s request for review and shall advise the
claimant of its decision, specifying the reasons, identifying the appropriate

 

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provisions of the Plan, and describing any voluntary appeal procedures offered
by the Plan.

 

  (e) In the event that the reviewing committee must make a determination of
disability in order to decide a claim, the reviewing committee shall follow the
special claims procedures for disability benefits described in Department of
Labor Regulation section 2560.503-1(d). The reviewing committee shall render a
decision within a reasonable time (not to exceed 90 days) after the claimant’s
request for review, rather than within 120 days as set forth in the above
paragraph.

 

  (c) Within sixty days following notification of an adverse benefit
determination, upon request made by the claimant or the claimant’s authorized
representative, the Committee shall take appropriate steps to review its
decision in light of any further information or comments submitted by the
claimant. The Committee may hold a hearing at which the claimant may present the
basis of any claim for review.

 

  (d) The Committee shall render a decision within a reasonable time (not to
exceed 120 days) after the claimant’s request for review and shall advise the
claimant of its decision, specifying the reasons, identifying the appropriate
provisions of the Plan, and describing any voluntary appeal procedures offered
by the Plan.

 

  (e) In the event that the Committee must make a determination of disability in
order to decide a claim, the Committee shall follow the special claims
procedures for disability benefits described in Department of Labor Regulation
section 2560.503-1(d). The Committee shall render a decision within a reasonable
time (not to exceed 90 days) after the claimant’s request for review, rather
than within 120 days as set forth in the above paragraph.

 

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ARTICLE IX

 

GENERAL AND MISCELLANEOUS PROVISIONS

 

1. This Plan shall not in any way obligate the Company to continue the
employment of a Participant with the Company, nor does this Plan limit the right
of the Company at any time and for any reason to terminate the Participant’s
employment. In no event shall this Plan constitute an employment contract of any
nature whatsoever between the Company and a Participant. In no event shall this
Plan by its terms or implications in any way limit the right of the Company to
change an Eligible Employee’s compensation or other benefits.

 

2. Any benefits accrued under this Plan shall not be treated as compensation for
purposes of calculating the amount of a Participant’s benefits or contributions
under any pension, retirement, or other plan maintained by the Company, except
as provided in such other plan.

 

3. Any written notice to the Company referred to herein shall be made by mailing
or delivering such notice to the Company at 6801 Rockledge Drive, Bethesda,
Maryland 20817, to the attention of Pension Plan Operations, Human Resource
Services. Any written notice to a Participant shall be made by delivery to the
Participant in person, through electronic transmission, or by mailing such
notice to the Participant at his or her place of residence or business address.

 

4. In the event it should become impossible for the Company or the Committee to
perform any act required by this Plan, the Company or the Committee may perform
such other act as it in good faith determines will most nearly carry out the
intent and the purpose of this Plan.

 

5. Each Eligible Employee shall be deemed conclusively to have accepted and
consented to all the terms of this Plan and all actions or decisions made by the
Company, the Board, or Committee with regard to the Plan.

 

6. The provisions of this Plan shall be binding upon and inure to the benefit of
the Company, its successors, and its assigns, and to the Participants and their
heirs, executors, administrators, and legal representatives.

 

7. A copy of this Plan shall be available for inspection by Participants or
other persons entitled to benefits under the Plan at reasonable times at the
offices of the Company.

 

8. The validity of this Plan or any of its provisions shall be construed,
administered, and governed in all respects under and by the laws of the State of
Maryland, except as to matters of Federal law. If any provisions of this
instrument shall be held by a court of competent

 

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jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.

 

9. This Plan and its operation, including the payment of cash hereunder, is
subject to compliance with all applicable Federal and state laws, rules and
regulations and such other approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith.

 

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ARTICLE X

 

EFFECTIVE DATE

 

This restated Plan, including any amendment and restatement of the prior plans,
is generally effective January 1, 2005.

 

 

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LOCKHEED MARTIN SUPPLEMENTARY PENSION PLAN

FOR TRANSFERRED EMPLOYEES OF GE OPERATIONS

 

(Effective July 1, 2004)

ARTICLE I

 

PURPOSES OF THE PLAN

 

The purposes of the Lockheed Martin Supplementary Pension Plan for Transferred
Employees of GE Operations (the “Plan”) is to provide Transferred Employees with
a supplemental pension benefit that, in combination with the Martin Marietta
Corporation Retirement Income Plan II (now the Lockheed Martin Corporation
Retirement Income Plan II) or KAPL Inc. Pension Plan for Salaried Employees and
anticipated social security benefits, delivers a total retirement income equal
to a maximum of 60 percent of the employee’s average compensation over the final
three years.

 

The Lockheed Martin Supplementary Pension Plan for Transferred Employees of GE
Operations (formerly known as the Martin Marietta Supplementary Pension Plan for
Employees of Transferred GE Operations) and predecessor plan is amended,
restated, effective July 1, 2004.

 

The Plan was subsequently amended and restated effective January 1, 2005 in
order to comply with the requirements of Code section 409A. The amendment and
restatement applies only to the portion of a Participant’s benefit that is
earned or becomes vested on or after January 1, 2005. The portion of a
Participant’s benefit that was earned and vested prior to January 1, 2005 shall
be governed by this Appendix A.

 

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ARTICLE II

 

DEFINITIONS

 

Unless the context indicates otherwise, the following words and phrases when
used in this Plan shall have the meanings hereinafter indicated:

 

1. BENEFICIARY — The person or persons designated by the Participant as his or
her beneficiary under the Qualified Pension Plan. If no beneficiary is
designated under the Qualified Pension Plan, or if no designated beneficiary
survives the Participant, the Participant’s estate shall be the beneficiary.

 

2. BOARD — The Board of Directors of Lockheed Martin Corporation.

 

3. CODE — The Internal Revenue Code of 1986, as amended.

 

4. COMMITTEE — The committee described in Section 1 of Article VII.

 

5. COMPANY — Lockheed Martin Corporation and its subsidiaries.

 

6. ELIGIBLE EMPLOYEE — An employee of the Company who transferred employment to
Martin Marietta Corporation as a result of the agreement between Martin Marietta
Corporation and General Electric Company dated November 22, 1992 or who
transferred employment under the Lakeland Transfer Agreement and who meets the
eligibility criteria in Section 1 of Article III, and who satisfies such
additional requirements for participation in this Plan as the Committee may from
time to time establish. The Pension Plans Administration Committee shall
interpret the participation requirements established by the Committee for all
Participants except elected officers subject to Section 16(b) of the Securities
and Exchange Act of 1934. Determinations of participation requirements for
elected officers shall be made by the Committee.

 

7. PARTICIPANT — An Eligible Employee who meets the requirements for
participation contained in Article III; the term shall include a former employee
and survivors/beneficiaries whose benefit has not been fully distributed.

 

8. PLAN — The Lockheed Martin Supplementary Pension Plan for Transferred
Employees of GE Operations, or any successor plan.

 

9. QUALIFIED PENSION PLAN — The Lockheed Martin Corporation Retirement Income
Plan (“Retirement Income Plan II”) or KAPL Inc. Pension Plan for Salaried
Employees (“KAPL Inc. Plan”). All terms used in this Plan which are defined in
the Retirement Income Plan II or KAPL Inc. Plan have the same meanings, unless
otherwise expressly provided in this Plan.

 

10. YEAR — The calendar year.

 

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ARTICLE III

 

SUPPLEMENTARY PENSION BENEFIT

 

1. Eligibility. Each Employee who was classified as an Executive Career Band
(“EB”) employee on or prior to December 31, 1993, who has five or more years of
Vesting Service and who is a participant in the Qualified Pension Plan shall be
eligible to receive benefits under this Article III. However, except as provided
in Section 2.D., an Employee who retires under the Qualified Pension Plan before
the first day of the month following attainment of age 55 or an Employee who
leaves the Service of the Company before attainment of age 55, shall not be
eligible for a benefit under this Article III.

 

An Employee who meets the other requirements specified in this Section shall be
eligible for benefits under this Article III so long as his assigned position
level or position of equivalent responsibility throughout any consecutive three
years of the 15 year period ending on the last day of the month preceding his
termination of service is at least at the level of a director (or other position
equivalent to General Electric Company’s EB) even though he is not employed at
that level on the date his Service terminates.

 

2. Amount of Benefit.

 

A. Definitions. For purposes of this Section 2, the following terms have the
following meanings:

 

Annual Estimated Social Security Benefit. The annual equivalent of the maximum
possible Primary Insurance Amount payable, after reduction for early retirement,
as an old-age benefit to an employee who retired at age 62 on January 1 of the
calendar year in which occurred the Employee’s actual date of retirement or
death, whichever is earlier. The Company shall determine the Annual Estimated
Social Security Benefit in accordance with the Social Security Act in effect at
the end of the calendar year preceding such January 1.

 

If an Employee has less than 35 years of Credited Service, the Annual Estimated
Social Security Benefit determined under the above paragraph is multiplied by a
factor, the numerator of which is the number of years of the Employees’ Credited
Service to his or her date of retirement or death, whichever is earlier, and the
denominator of which is 35.

 

The Annual Estimated Social Security Benefit shall be adjusted to include any
social security, severance, or similar benefit provided under foreign law or
regulations as the Committee may prescribe by rules and regulations.

 

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Annual Pension Payable under the Qualified Pension Plan. The sum of:

 

(1) (i) the annual normal, early or late retirement benefit under Article V of
the Qualified Pension Plan, including the Personal Pension Account (excluding
the regular supplement under Article V(4) of the Qualified Pension Plan), or
(ii) the normal, optional or disability retirement benefit under the RIP II or
KAPL Annex of the Qualified Pension Plan, less

 

(2) to the extent the Committee so determines, the benefit payable under any
other pension plan contract, or policy of the Plan Sponsor (whether qualified or
non-qualified), or government program attributable to periods of service for
which Credited Service is granted by the Committee for the determination of the
benefit under this Plan or is credited by the Qualified Pension. All such
amounts shall be determined before applying any reduction factors for Early,
Optional or Disability Retirement, for election of any optional form of Pension
at retirement, a qualified domestic relations order(s), if any, or in connection
with any other adjustment or supplement made pursuant to the Qualified Pension
Plan or any other pension plan.

 

For purposes of this paragraph, the Employee’s Pension shall include the
Personal Pension Account Annuity payable to the Employee or the Employee’s
spouse on the date of the Employee’s retirement or death, regardless of whether
such annuity commenced on such date.

 

Annual Retirement Income. For Employees who retire or die in active Service on
or after April 5, 1993, the amount determined by multiplying 1.75% of Average
Annual Compensation by the number of years of Credited Service completed at the
date of retirement or death, whichever is earlier.

 

Average Annual Compensation. One-third of the Employee’s Compensation for the
highest consecutive three years during the last 10 years immediately preceding
his date of retirement or death, whichever is earlier. In computing Average
Annual Compensation, normal straight-time earnings shall be substituted for
actual Compensation for any month in which such normal straight-time earnings
are greater.

 

Compensation. Salary (including any deferred salary approved by the Committee as
compensation for purposes of this Plan) plus:

 

(1) For persons then eligible for Incentive Compensation, the total amount of
any Management Incentive Compensation Plan earnings, unless such Incentive
Compensation is excluded by the Board or a committee thereof;

 

(2) For persons who would then have been eligible for Incentive Compensation if
they had not been participants in a Sales Commission Plan or other variable
compensation plan, the total amount of sales commissions (or other variable
compensation earned unless such compensation is excluded by the Board or a
committee thereof);

 

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(3) For all other persons, the sales commissions and other variable compensation
earned to the extent such earnings were then included under the Qualified
Pension Plan, plus any amounts (other than salary and those mentioned in clauses
(1) through (3) above) which were then included as compensation under the
Qualified Pension Plan except any amounts which the Committee may exclude from
the computation of “Compensation” and subject to the powers of the Committee
with respect to payment of benefits.

 

The Committee shall specify the basis for determining an Employee’s Compensation
for any portion of the three years used to compute the Employee’s Average Annual
Compensation during which the Employee was not employed by an employer
participating in this Plan.

 

Credited Service. Credited Service has the same meaning as in the Qualified
Pension Plan. For periods before January 1, 1976, Credited Service as a
full-time Employee also includes all Service credited under the Qualified
Pension Plan for any period during which the employee was a full-time Employee
for purposes of the Qualified Pension Plan. Credited Service also includes:

 

(1) Any period of Service with the Company or an Affiliate as the Committee may
otherwise provide by rules and regulations issued with respect to this Plan; and

 

(2) Any period of service with another employer as the Board may approve, if any
conditions specified in such approval have been met.

 

D. Normal Retirement Benefit. Subject to the limitations in Section G, the
benefit payable to an eligible Employee who retires on or after his or her
normal retirement date under the Plan, shall be the excess, if any, of the
employee’s Annual Retirement Income, over the sum of

 

(1) The Employee’s Annual Pension Payable under the Qualified Pension Plan
(including the Personal Pension Account Annuity and excluding any supplements
payable under the Qualified Pension Plan) (calculated as a five-year certain
annuity),

 

(2)  1/2 of the Employee’s Annual Estimated Social Security Benefit,

 

(3) the benefit payable from the Lockheed Martin Corporation Supplemental
Retirement Plan.

 

E. Early, Optional or Disability Retirement. Subject to the limitations in
Section G, the benefit payable to an eligible Employee who, after reaching age
60, retires on an optional

 

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retirement date under the Qualified Pension Plan shall be computed in the manner
provided by Section B (for an employee retiring on his or her normal retirement
date) but taking into account only Credited Service and Average Annual
Compensation to the actual date of optional retirement. The annual benefit
payable to an eligible Employee who, after reaching age 55 (but before reaching
age 60) retires under the early retirement provisions of the Qualified Pension
Plan shall equal the amount in section B but taking into account only Credited
Service and Average Annual Compensation to the Employee’s actual termination of
employment and reduced for early retirement using the early retirement reduction
factor under Article V(2) of the Qualified Pension Plan.

 

The annual benefit payable to an eligible Employee who has satisfied the
eligibility requirements to receive a Disability Pension under the RIP II or
KAPL Annex of the Qualified Pension Plan shall be computed in the manner
provided by Section B (for an Employee retiring on his normal retirement date)
taking into account only Credited Service and Average Annual Compensation to the
actual date of disability retirement and not reduced for the Disability
Supplement in the RIP II or KAPL Annex of the Qualified Pension Plan. In the
case of an eligible Employee whose date of retirement precedes the first day of
the month after reaching age 60 the Plan benefit shall then be reduced by 12%.

 

If the Disability Pension payable to the Employee under the Qualified Pension
Plan is discontinued as a result of the Employee’s disability ceasing before the
Employee reaches age 60, the benefit provided under this Section C. shall also
be discontinued.

 

F. Special Benefit Protection for Certain Employees. A former Employee whose
Service with the Company is terminated on or after December 31, 1994 and after
completing 25 or more years of Vesting Service, who does not withdraw his
required or voluntary contributions from the Qualified Pension Plan before
retirement, shall be eligible for a benefit under this Plan commencing upon his
or her retirement under the Qualified Pension Plan after reaching age 60 if:

 

(1) the Employee’s Service is terminated for transfer to a successor employer
and

 

(2) the Employee does not retire under the Qualified Pension Plan until the
later of (1) termination of service with the successor employer and (2) the
first of the month after reaching age 60.

 

In determining the benefit under this Plan, the Average Annual Compensation
shall be based on the last 120 completed months with the successor employer
before the Employee’s Service termination date and the Annual Estimated Social
Security Benefit shall be determined as though the Employee’s retirement date
was the date of termination.

 

G. Survivor Benefits. Subject to Section F.(b), if a survivor benefit applies
with respect to the past and future service annuity portion of a Employee’s
Annual Pension payable under the Qualified Pension Plan, such survivor benefit
shall automatically apply to any benefit which he or she may be eligible under
this Plan. The Employee’s benefit shall be

 

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adjusted and paid in the same manner as such pension payable under the Qualified
Pension Plan is adjusted and paid on account of such survivor benefit.

 

H. Payments Upon Death.

 

(a) If an eligible Employee dies in active Service, or following retirement with
a benefit from this Plan, and a death benefit (other than a return of Employee
contributions with interest including an Employee’s Personal and Voluntary
Pension Account ) is payable to the beneficiary or Surviving Spouse of such
Employee under the Qualified Pension Plan, a death benefit shall also be payable
to the beneficiary or Surviving Spouse under this Plan as follows:

 

(1) Any such death benefit payable to a surviving spouse under this Plan shall
equal 50% of the Employee’s Annual Retirement Income under this Plan reduced by
(1) 100% of the Employee’s preretirement surviving spouse benefit payable or
other lump sum benefit under the Qualified Pension Plan, (2) 25% of the
Employee’s Annual Estimated Social Security Benefit, (3) the Employee’s Personal
Pension Account benefit , and (4) the benefit payable under the Lockheed Martin
Corporation Supplemental Retirement Plan. Payments to the surviving spouse shall
commence on the later of: (1) the Employee’s 55th birthday, or (2) the
Employee’s date of death.

 

(2) Any such death benefit payable to a surviving spouse under this Plan shall
take into account only Credited Service and Average Annual Compensation to the
earlier of the Employee’s death or termination of employment and will be reduced
for early retirement using the early retirement reduction factors under Article
V(2) of the Qualified Pension Plan.

 

(3) Any such benefit payable to a surviving spouse shall be paid at the same
time as the Qualified Pension Plan and will be paid in accordance with the
payment provisions of the RIP II or KAPL Annex of the Qualified Pension Plan. If
benefits from the Qualified Pension Plan are paid under the payment provisions
of the RIP II or KAPL Annex of the Qualified Pension Plan, then benefits from
this Plan will be paid in the same payment form.

 

(b) In lieu of the benefit otherwise payable to a beneficiary or surviving
spouse under Section E. or paragraph (a) of this Section, an Employee may elect
to have all or any portion of such benefit (or the equivalent value of all or
any portion) paid to the beneficiary designated in the employee’s election in
any of the following forms:

 

(1) An annuity for the spouse’s remaining lifetime. If the beneficiary dies
before the spouse, the remaining benefit shall be paid as provided in the
employee’s election. In the absence of any such provision, the equivalent value
of the remaining payments shall be paid to the beneficiary’s estate, if any,
otherwise to the beneficiary’s Personal Representative.

 

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(2) An annuity for the beneficiary’s remaining lifetime. If any annuity
otherwise payable under this item (2) is less than $5,000 annually, the
equivalent value shall be paid instead to the beneficiary in a lump sum.

 

(3) A lump sum.

 

Any such election must be made in writing to the Qualified Pension Plan
Administrator prior to the Employee’s death, and becomes effective when the
Qualified Pension Plan Administrator receives it. For purposes of this election,
an Employee may designate as his beneficiary only his estate, his former spouse,
or a member of his immediate family.

 

For the purpose of determining the benefit conversions required to provide the
benefit payments referred to above, the interest rate assumption shall be the
interest rate used by the Pension Benefit Guaranty Corporation at the beginning
of the year in which the Employee’s death occurs, in valuing immediate annuities
for terminating single employer trusteed plans, and the mortality assumption
shall be based on the UP-1984 Mortality Table.

 

I. Limitations on Benefits.

 

(a) Notwithstanding any provision of this Plan to the contrary, if the sum of:

 

(1) The annual benefit (calculated before applying any reductions for early
retirement or additions for any supplements payable under the Qualified Pension
Plan, and prior to any calculation for disability retirement reductions)
otherwise payable to an Employee under this Plan;

 

(2) The Employee’s Annual Pension Payable under the Qualified Pension Plan
(including the Personal Pension Account Annuity) (calculated as a five-year
certain annuity);

 

(3) 100% of the Annual Estimated Social Security Benefit before any adjustment
for less than 35 years of Pension Benefit Service;

 

(4) the Employee’s annual benefit under the Lockheed Martin Corporation
Supplemental Retirement Plan; and

 

to the extent the Committee so determines, the benefit payable under any other
pension plan contract, or policy of the Plan Sponsor (whether qualified or
non-qualified), or government program attributable to periods of service for
which Credited Service is granted by the Committee for the determination of the
benefit under this Plan or is credited by the Qualified Pension exceeds 60% of
his or her Annual Average Compensation, the benefit payable under this Plan
shall be reduced by the amount of the excess.

 

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(b) Notwithstanding any provision in this Plan to the contrary, the amount of
the benefit payable and any death benefit payable to or on behalf of any
Employee who is or was an Officer of the Company on the date of his retirement
or death, whichever is earlier, shall be determined according to such general
rules and regulations as a Committee appointed by the Board of Directors may
adopt, subject to the limitation that any such benefit or death benefit may not
exceed the amount which would be payable under this Plan in the absence of such
rules and regulations.

 

J. Adjustments Following Retirement. If the Pension payable under the Qualified
Pension Plan to any Employee is increased following the Employee’s retirement as
a result of a general increase in the Pensions payable to retired employees
under that plan, no such increase will be made under this Plan unless the
Committee makes such determination.

 

K. Non-duplication of Benefits. Benefits under this Article III are intended to
supplement the Participant’s actual benefit under the Qualified Pension Plan as
necessary to provide the Participant with the full benefit the Participant would
have received under the Qualified Pension Plan with the special adjustments
described above. To prevent duplication of benefits, the full benefit under the
Qualified Pension Plan and the enhanced benefit described above shall be
calculated without reduction for Code section 415 and Code section 401(a)(17),
then reduced by the benefit payable from the Qualified Pension Plan and further
reduced by the benefit payable from the Lockheed Martin Corporation Supplemental
Retirement Plan. Participants have no right to duplicate benefits with respect
to the same period of service, and the Committee may make such adjustments to
the benefits under this Plan as the Committee deems necessary to prevent
duplication of benefits.

 

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ARTICLE IV

 

PAYMENT OF BENEFITS

 

1. Vesting. Except as provided in Article V, and subject to the Company’s right
to discontinue the Plan as provided in Article VI, a Participant shall have a
non-forfeitable interest in benefits payable under this Plan to the same extent
as benefits are vested under the applicable Qualified Pension Plan. As provided
in Article V, if a Participant acquires a right to receive payments under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the Company.

 

2. Form of Payment. Benefits shall be paid at the same time as the Qualified
Pension Plan and will be paid in accordance with the payment provisions of the
RIP II or KAPL Annex of the Qualified Pension Plan. If benefits from the
Qualified Pension Plan are paid under the payment provisions of the RIP II or
KAPL Annex, then benefits from this Plan will be paid in the same payment form.

 

If an Employee’s pension benefit under the Qualified Pension Plan is suspended
for any month in accordance with the re-employment provisions thereof, the
Employee’s benefit under this Plan for that month shall likewise be suspended.

 

Cash-out of Small Benefits. Notwithstanding the above, if the Value of the sum
of the benefits payable to a Participant or Beneficiary under this Plan does not
exceed the amount that may be distributed without consent under
Section 411(a)(11) of the Code, all such benefits will be paid in a single lump
sum payment in full discharge of all liabilities with respect to such benefits.
For purposes of this Section, Value shall be determined as of the Participant’s
termination of employment, and shall mean the present value of a Participant’s
or Beneficiary’s benefits based upon the applicable mortality table and
applicable interest rate in Code section 417(e)(3)(ii) for the calendar month
preceding the Plan Year in which the termination of employment occurs.

 

3. Deductibility of Payments. In the event that the payment of benefits under
Section 2 would prevent the Company from claiming an income tax deduction with
respect to any portion of the benefits paid, the Committee shall have the right
to modify the form and timing of distributions as necessary to maximize the
Company’s tax deductions. In the exercise of its discretion to adopt a modified
distribution schedule, the Committee shall undertake to have distributions made
at such times and in such amounts as most closely approximate the payment method
described in Section 2, consistent with the objective of maximum deductibility
for the Company. The Committee shall have no authority to reduce a Participant’s
accrued benefit under this Plan or to pay aggregate benefits less than the
Participant’s accrued benefit in the event that all or a portion thereof would
not be deductible by the Company.

 

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4. Change of Law. Notwithstanding anything to the contrary herein, if the
Committee determines in good faith, based on consultation with counsel, that the
federal income tax treatment or legal status of this Plan has or may be
adversely affected by a change in the Code, Title I of the Employee Retirement
Income Security Act of 1974, or other applicable law or by an administrative or
judicial construction thereof, the Committee may direct that the benefits of
affected Participants or of all Participants be distributed as soon as
practicable after such determination is made, to the extent deemed necessary or
advisable by the Committee to cure or mitigate the consequences, or possible
consequences of, such change in law or interpretation thereof.

 

5. Acceleration upon Change in Control.

 

Notwithstanding any other provision of the Plan, the accrued benefit of each
Participant shall be distributed in a single lump sum within fifteen
(15) calendar days following a “Change in Control.”

 

For purposes of this Plan, a Change in Control shall include and be deemed to
occur upon the following events:

 

  (a) A tender offer or exchange offer is consummated for the ownership of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding voting securities entitled to vote in the
election of directors of the Company.

 

  (b) The Company is merged, combined, consolidated, recapitalized or otherwise
reorganized with one or more other entities that are not Subsidiaries and, as a
result of the merger, combination, consolidation, recapitalization or other
reorganization, less than 75% of the outstanding voting securities of the
surviving or resulting corporation shall immediately after the event be owned in
the aggregate by the stockholders of the Company (directly or indirectly),
determined on the basis of record ownership as of the date of determination of
holders entitled to vote on the action (or in the absence of a vote, the day
immediately prior to the event).

 

  (c) Any person (as this term is used in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act, but excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding securities entitled to vote in the election of
directors of the Company.

 

  (d)

At any time within any period of two years after a tender offer, merger,
combination, consolidation, recapitalization, or other reorganization or a
contested

 

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election, or any combination of these events, the “Incumbent Directors” shall
cease to constitute at least a majority of the authorized number of members of
the Board. For purposes hereof, “Incumbent Directors” shall mean the persons who
were members of the Board immediately before the first of these events and the
persons who were elected or nominated as their successors or pursuant to
increases in the size of the Board by a vote of at least three-fourths of the
Board members who were then Board members (or successors or additional members
so elected or nominated).

 

  (e) The stockholders of the Company approve a plan of liquidation and
dissolution or the sale or transfer of substantially all of the Company’s
business and/or assets as an entirety to an entity that is not a Subsidiary.

 

This Section 5 shall apply only to a Change in Control of Lockheed Martin
Corporation and shall not cause immediate payout of benefits under this Plan in
any transaction involving the Company’s sale, liquidation, merger, or other
disposition of any subsidiary.

 

The Committee may cancel or modify this Section 5 at any time prior to a Change
in Control. In the event of a Change in Control, this Section 5 shall remain in
force and effect, and shall not be subject to cancellation or modification for a
period of five years, and any defined term used in Section 5 shall not, for
purposes of Section 5, be subject to cancellation or modification during the
five year period.

 

6. Tax Withholding. To the extent required by law, the Company shall withhold
from benefit payments hereunder any Federal, state, or local income or payroll
taxes required to be withheld and shall furnish the recipient and the applicable
government agency or agencies with such reports, statements, or information as
may be legally required. No benefit payments shall be made to the Participant
until the withholding obligation for taxes under Code sections 3101(a) and
3101(b) has been satisfied with respect to the Participant.

 

7. Retiree Medical Withholding. A Participant may direct the Company to withhold
from the Participant’s benefit payments hereunder all or a portion of the amount
that the Participant is required to pay for Company-provided retiree medical
coverage.

 

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ARTICLE V

 

EXTENT OF PARTICIPANTS’ RIGHTS

 

1. Unfunded Status of Plan. This Plan constitutes a mere contractual promise by
the Company to make payments in the future, and each Participant’s rights shall
be those of a general, unsecured creditor of the Company. No Participant shall
have any beneficial interest in any specific assets that the Company may hold or
set aside in connection with this Plan. Notwithstanding the foregoing, to assist
the Company in meeting its obligations under this Plan, the Company may set
aside assets in a trust or trusts described in Revenue Procedure 92-64, 1992-2
C.B. 422, and the Company may direct that its obligations under this Plan be
satisfied by payments out of such trust or trusts. The assets of any such trust
will remain subject to the claims of the general creditors of the Company. It is
the Company’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.

 

2. Nonalienability of Benefits. A Participant’s rights under this Plan shall not
be assignable or transferable and any purported transfer, assignment, pledge or
other encumbrance or attachment of any payments or benefits under this Plan, or
any interest therein shall not be permitted or recognized, other than the
designation of, or passage of payment rights to, a Beneficiary or transfer of an
interest in this Plan to a Participant’s former spouse incident to divorce under
a Qualified Domestic Relations Order.

 

3. Forfeiture. If, following the date on which a Participant shall retire under
this Plan, a Participant shall engage in the operation or management of a
business, whether as owner, stockholder, partner, officer, employee, consultant,
or otherwise, which at such time is in competition with the Company or any of
its subsidiaries, or shall disclose to unauthorized persons information relative
to the business of the Company or any of its subsidiaries which the Participant
shall have reason to believe is confidential, or otherwise act, or conduct
oneself, in a manner which the Participant shall have reason to believe is
contrary to the best interest of the Company, or shall be found by the Committee
to have committed an act during the term of the Participant’s employment which
would have justified the Participant being discharged for cause, the
Participant’s retirement benefit under this Plan shall terminate. Application of
this Section will be at the discretion of the Committee.

 

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ARTICLE VI

 

AMENDMENT OR TERMINATION

 

1. Amendment. The Board may amend, modify, suspend or discontinue this Plan at
any time subject to any shareholder approval that may be required under
applicable law, provided, however, that no such amendment shall have the effect
of reducing a Participant’s accrued benefit or postponing the time when a
Participant is entitled to receive a distribution of his accrued benefit unless
each affected Participant consents to such change.

 

2. Termination. The Board reserves the right to terminate this Plan at any time
and to pay all Participants their accrued benefits in a lump sum or to make
other provisions for the payment of benefits (e.g. purchase of annuities)
immediately following such termination or at such time thereafter as the Board
may determine.

 

3. Transfer of Liability. The Board reserves the right to transfer to another
entity all of the obligations of Company with respect to a Participant under
this Plan if such entity agrees pursuant to a binding written agreement with the
Company or its subsidiaries to assume all of the obligations of the Company
under this Plan with respect to such Participant.

 

4. Merger. The Board reserves the right to merge all or part of this Plan with
or into another plan, provided (1) such other plan preserves all of the
obligations of the Company under this Plan with respect to such Participant and
(2) each Participant in the Plan would (if the Plan then terminated) receive a
benefit immediately after the merger which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger (if
the Plan had then terminated).

 

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ARTICLE VII

 

ADMINISTRATION

 

1. The Committee. This Plan shall be administered by the Management Development
and Compensation Committee of the Board or such other committee of the Board as
may be designated by the Board. The members of the Committee shall be designated
by the Board. A majority of the members of the Committee (but not fewer than
two) shall constitute a quorum. The vote of a majority of a quorum or the
unanimous written consent of the Committee shall constitute action by the
Committee. The Committee and its delegates shall have full discretion to
construe and interpret the terms and provisions of the Plan, which
interpretation or construction shall be final, conclusive and binding on all
parties, including but not limited to the Company and any Participant or
Beneficiary, except as otherwise provided by law. Except as otherwise provided
in Section 5, the Committee delegates the authority to adjudicate claims to the
Pension Plans Administration Committee.

 

2. Delegation and Reliance. The Committee may delegate to the officers or
employees of the Company the authority to execute and deliver those instruments
and documents, to do all acts and things, and to take all other steps deemed
necessary, advisable or convenient for the effective administration of this Plan
in accordance with its terms and purpose. In making any determination or in
taking or not taking any action under this Plan, the Committee may obtain and
rely upon the advice of experts, including professional advisors to the Company.
No member of the Committee or officer of the Company who is a Participant
hereunder may participate in any decision specifically relating to his or her
individual rights or benefits under the Plan.

 

3. Exculpation and Indemnity. Neither the Company nor any member of the Board or
of the Committee, nor any other person participating in any determination of any
question under this Plan, or in the interpretation, administration or
application thereof, shall have any liability to any party for any action taken
or not taken in good faith under this Plan or for the failure of the Plan or any
Participant’s rights under the Plan to achieve intended tax consequences, or to
comply with any other law, compliance with which is not required on the part of
the Company.

 

4. Facility of Payment. If a minor, person declared incompetent, or person
incapable of handling the disposition of his or her property is entitled to
receive a benefit, make an application, or make an election hereunder, the
Committee may direct that such benefits be paid to, or such application or
election be made by, the guardian, legal representative, or person having the
care and custody of such minor, incompetent, or incapable person. Any payment
made, application allowed, or election implemented in accordance with this
Section shall completely discharge the Company and the Committee from all
liability with respect thereto.

 

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5. Proof of Claims. The Pension Plans Administration Committee may require proof
of the death, disability, incompetency, minority, or incapacity of any
Participant or Beneficiary and of the right of a person to receive any benefit
or make any application or election.

 

6. Claim Procedures. The procedures when a claim under this Plan is wholly or
partially denied by the Pension Plans Administration Committee are as follows:

 

  (a) The Pension Plans Administration Committee shall:

 

  (i) notify the claimant within a reasonable time (not to exceed 180 days) of
the adverse benefit determination, setting forth the specific reasons therefor;
and

 

  (ii) afford the claimant a reasonable opportunity for a full and fair review
of the decision.

 

  (b) The notice of such adverse determination shall set forth, in addition to
the specific reasons for the adverse determination, the following:

 

  (i) identification of pertinent provisions of this Plan;

 

  (ii) such additional information as may be necessary for the claimant to
perfect the claim, and an explanation of why such information is necessary; and

 

  (iii) an explanation of the claims review procedure, including time limits and
a statement of the claimant’s right to bring a civil action under ERISA section
502(a) following an adverse benefit determination on review.

 

  (c) Within sixty days following notification of an adverse benefit
determination, the claimant or the claimant’s authorized representative may
request that the adverse determination be reviewed. The Pension Plans
Administration Committee shall review adverse determinations with respect to
Participants who are not elected officers of the Company. The Committee shall
review adverse determinations with respect to elected officers of the Company.
The reviewing committee shall take appropriate steps to review its decision in
light of any further information or comments submitted by the claimant. The
reviewing committee may hold a hearing at which the claimant may present the
basis of any claim for review.

 

  (d) The reviewing committee shall render a decision within a reasonable time
(not to exceed 120 days) after the claimant’s request for review and shall
advise the claimant of its decision, specifying the reasons, identifying the
appropriate provisions of the Plan, and describing any voluntary appeal
procedures offered by the Plan.

 

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  (e) In the event that the reviewing committee must make a determination of
disability in order to decide a claim, the reviewing committee shall follow the
special claims procedures for disability benefits described in Department of
Labor Regulation section 2560.503-1(d). The reviewing committee shall render a
decision within a reasonable time (not to exceed 90 days) after the claimant’s
request for review, rather than within 120 days as set forth in the above
paragraph.

 

  (f) Within sixty days following notification of an adverse benefit
determination, upon request made by the claimant or the claimant’s authorized
representative, the Committee shall take appropriate steps to review its
decision in light of any further information or comments submitted by the
claimant. The Committee may hold a hearing at which the claimant may present the
basis of any claim for review.

 

  (g) The Committee shall render a decision within a reasonable time (not to
exceed 120 days) after the claimant’s request for review and shall advise the
claimant of its decision, specifying the reasons, identifying the appropriate
provisions of the Plan, and describing any voluntary appeal procedures offered
by the Plan.

 

  (h) In the event that the Committee must make a determination of disability in
order to decide a claim, the Committee shall follow the special claims
procedures for disability benefits described in Department of Labor Regulation
section 2560.503-1(d). The Committee shall render a decision within a reasonable
time (not to exceed 90 days) after the claimant’s request for review, rather
than within 120 days as set forth in the above paragraph.

 

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ARTICLE IX

 

GENERAL AND MISCELLANEOUS PROVISIONS

 

1. This Plan shall not in any way obligate the Company to continue the
employment of a Participant with the Company, nor does this Plan limit the right
of the Company at any time and for any reason to terminate the Participant’s
employment. In no event shall this Plan constitute an employment contract of any
nature whatsoever between the Company and a Participant. In no event shall this
Plan by its terms or implications in any way limit the right of the Company to
change an Eligible Employee’s compensation or other benefits.

 

2. Any benefits accrued under this Plan shall not be treated as compensation for
purposes of calculating the amount of a Participant’s benefits or contributions
under any pension, retirement, or other plan maintained by the Company, except
as provided in such other plan.

 

3. Any written notice to the Company referred to herein shall be made by mailing
or delivering such notice to the Company at 6801 Rockledge Drive, Bethesda,
Maryland 20817, to the attention of Pension Plan Operations, Human Resource
Services. Any written notice to a Participant shall be made by delivery to the
Participant in person, through electronic transmission, or by mailing such
notice to the Participant at his or her place of residence or business address.

 

4. In the event it should become impossible for the Company or the Committee to
perform any act required by this Plan, the Company or the Committee may perform
such other act as it in good faith determines will most nearly carry out the
intent and the purpose of this Plan.

 

5. Each Eligible Employee shall be deemed conclusively to have accepted and
consented to all the terms of this Plan and all actions or decisions made by the
Company, the Board, or Committee with regard to the Plan.

 

6. The provisions of this Plan shall be binding upon and inure to the benefit of
the Company, its successors, and its assigns, and to the Participants and their
heirs, executors, administrators, and legal representatives.

 

7. A copy of this Plan shall be available for inspection by Participants or
other persons entitled to benefits under the Plan at reasonable times at the
offices of the Company.

 

8. The validity of this Plan or any of its provisions shall be construed,
administered, and governed in all respects under and by the laws of the State of
Maryland, except as to matters of Federal law. If any provisions of this
instrument shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.

 

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9. This Plan and its operation, including the payment of cash hereunder, is
subject to compliance with all applicable Federal and state laws, rules and
regulations and such other approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith.

 

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ARTICLE X

 

EFFECTIVE DATE

 

This Plan, including any amendment and restatement of the prior plans, is
generally effective July 1, 2004.

 

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