Exhibit 10.43

 

SUMMARY OF ANNUAL COMPENSATION OF DIRECTORS

 

The following table summarizes the compensation of our directors during 2004
(with the exception of Dr. Coffman (until his retirement on September 1, 2004)
and Mr. Stevens who as executive officers were not paid for their service as
directors):

 

Cash retainer

  $75,000

Stock retainer1

  $75,000 in stock units, stock options or 50/50 combination thereof

Chairman of the Board Retainer2

  $500,000 on annualized basis

Committee Chairman retainer

  $5,000

Deferred compensation plan3

  Cash retainer deferrable with earnings at prime rate, S&P 500 or LMT stock
return

Charitable award program4

[Participation in program limited to directors elected prior to 2004 Annual
Meeting.]

  $1,000,000 donation ($100,000 following director’s retirement; $900,000 in 9
annual installments following director’s death)

Travel accident insurance5

  $1,000,000

Director education institutes/activities

  Reimbursed for costs and expenses

Perquisites6

  Home computer system

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NOTES TO TABLE:

 

(1)

Under the Lockheed Martin Corporation Directors’ Equity Plan (“Directors’ Equity
Plan”), each non-employee director may elect to receive (i) a number of stock
units with a value on January 15 equal to $75,000 or (ii) options to purchase a
number of shares of stock, which options have an aggregate fair market value on
January 15 of $75,000 or (iii) a combination of stock units with a value on
January 15 equal to $37,500 and options to purchase a number of shares of stock
which options have an aggregate fair market value on January 15 of $37,500. The
amount a director ultimately receives will depend upon the performance of
Lockheed Martin stock following the award. Except in certain circumstances,
options and stock units vest on the first anniversary of grant. Upon a change in
control (as defined in the Directors’ Equity Plan) a director’s stock units and
outstanding options become fully vested, and directors will have the right to
exercise their options immediately. Upon a director’s termination of service
from our Board of Directors, the vested stock units will be distributed, at the
director’s election, in whole shares of stock or in cash, in a lump sum or in up
to ten annual installments. During the period a director’s interest is
represented by stock units, a director has no voting, dividend or other rights
with respect to the shares, but will receive additional stock units representing
dividend equivalents (converted to stock units based on the closing market price
of our common stock on the applicable dividend payment dates). Stock options are
rights to purchase a specified number of shares of our common stock at an
exercise price equal to 100 percent of the fair market value of the stock on the
grant date. The options granted pursuant to the Directors’ Equity Plan are
non-qualified stock options and have a term of ten years. A director may
exercise the options during the ten-year term after meeting a one-year vesting
requirement. A director has

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Exhibit 10.43

 

SUMMARY OF ANNUAL COMPENSATION OF DIRECTORS

 

no voting, dividend or other stockholder rights for the shares of common stock
covered by an option until he or she becomes the holder of record of those
shares. The Directors’ Equity Plan was approved by the stockholders in 1999.

(2) Dr. Coffman became a non-employee Chairman on September 1, 2004 and will
retire from the Board on April 28, 2005. The Chairman of the Board retainer will
be prorated to take his retirement into account.

(3) The Directors’ Deferred Compensation Plan provides non-employee directors
the opportunity to defer up to 100 percent of the cash portion of their fees.
Deferred amounts earn interest at a rate that tracks the performance of (i) the
prime rate, (ii) the published index for the Standard & Poor’s 500 (with
dividends reinvested) or (iii) our common stock (with dividends reinvested), at
the director’s election. A participating director’s deferred fees generally will
be distributed (in a lump sum or in up to 15 installments) commencing (i) the
January following the year in which the director terminates service; (ii) the
next January 15 or July 15 after the director terminates service; or (iii) the
January 15 in the year after the director terminates service, and a specified
birthday.

(4) The Lockheed Martin Corporation Directors’ Charitable Award Plan (the
“Directors’ Charitable Award Plan”), which was amended to limit participation to
directors elected prior to the 2004 Annual Meeting, provides that Lockheed
Martin will make donations to tax-exempt organizations previously recommended by
the director up to an aggregate of $1 million for each director. The Directors’
Charitable Award Plan, amended effective April 2004, provides that $100,000 will
be contributed at the time of retirement of a director; the remaining $900,000
will be contributed upon the death of the director. Directors are vested under
this Plan if they have served for at least five years on the Lockheed Martin
Board of Directors or their service on the Lockheed Martin Board of Directors is
terminated due to death, disability or retirement. Under the terms of the
Directors’ Charitable Award Plan, if there is a change in control of Lockheed
Martin, all participating directors in the plan shall immediately become vested.

(5) Each non-employee director is provided travel accident insurance up to $1
million in the event the director is involved in an accident while traveling on
business related to Lockheed Martin.

(6) Each director may elect to be provided a home computer and printer at the
election of the director. Technical assistance and internet access are provided
by the Corporation. The average cost per director is $2,710.