Exhibit 10.39

RSU Domestic (nonperformance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Stock Ownership Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

 

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Award Date: January 30, 2012

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After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to your acceptance of this Award
Agreement by May 31, 2012 and your continuous employment with the Corporation
from the Award Date until January 30, 2015 (the “Restricted Period”). All of
your RSUs will be forfeited and all of your rights to the RSUs and to receive
Stock for your RSUs and to receive cash payment for the Accrued Dividend
Equivalents will cease without further obligation on the part of the Corporation
unless you personally accept this Award Agreement as provided below by May 31,
2012 and continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

 

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The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, the Restricted Period will end for a portion of your
RSUs and the Accrued Dividend Equivalents and you will vest in a portion of your
RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

The vested RSUs will be exchanged for shares of Stock, and the related Accrued
Dividend Equivalents associated with the vested portion of your RSUs will be
paid in cash as soon as practicable, but no later than ninety (90) days after
your retirement or layoff, and in no event later than the March 15 next
following the year in which you retire or are laid off. You will forfeit your
remaining RSUs and the related Accrued Dividend Equivalents associated with
forfeited RSUs on the effective date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

 

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RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Your RSUs and the Accrued Dividend
Equivalents will vest immediately and you will receive shares of Stock in
exchange for RSUs and the cash payment for the Accrued Dividend Equivalents as
soon as practicable, but no later than ninety (90) days after your termination
of employment with the Corporation, and in no event later than the March 15 next
following the year in which your employment terminates. For the purposes of this
provision, the term “divestiture” shall mean a transaction which results in the
transfer of control of the business operation divested to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests (in the case of entities other than corporations), is owned or
controlled directly or indirectly by the Corporation, by one or more of the
Corporation’s subsidiaries or by a combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will

 

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withhold federal, state, and local income taxes at the minimum rate prescribed
by law. Therefore, you may owe taxes relating to the RSUs in addition to the
amount withheld by the Corporation. FICA tax withholding also will apply except
to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

 

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Award Date: January 30, 2012

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If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the Accrued Dividend Equivalents may not be deliverable
to you for six months following such date of termination and, accordingly, the
Fair Market Value of the Stock on the date on which the Stock is deliverable to
you and the Accrued Dividend Equivalents (accrued through the date the Stock
becomes deliverable to you) shall be used for purposes of determining your
compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

 

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Award Date: January 30, 2012

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If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit A and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

 

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You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo

(On behalf of the Management

Development and Compensation

Committee)

(For written acceptance, please complete, sign and return by mail.)

 

Acknowledged by:

    

 

Signature

    

 

Date

 

Print Name

    

 

Employee ID

 

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Award Date: January 30, 2012

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Exhibit A

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

  

Annual Base Pay Multiple

Chief Executive Officer    6 times President/Chief Operating Officer    5 times
Chief Financial Officer    4 times Business Area Executive Vice Presidents    3
times Corporate Senior Vice Presidents    2 times Other Elected Officers    2
times All Other Vice Presidents    1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

 

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RSU Int’l (nonperformance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award.

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation may be required to collect from
you the appropriate amount of income taxes and social insurance contributions
with respect to both the shares delivered and the cash payment for the Accrued
Dividend Equivalents. In this regard, please see “TIMING OF TAXATION AND
WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter

 

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Award Date: January 30, 2012

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put to stockholder vote, to receive dividends, and to encumber, sell or
otherwise transfer the shares. You should note, however, that, while the shares
would thus be free of the restrictions imposed during the Restricted Period,
your ability to sell or pledge the shares may be limited under the federal
securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to your acceptance of this Award
Agreement by May 31, 2012 and your continuous employment with the Corporation
from the Award Date until January 30, 2015 (the “Restricted Period”). All of
your RSUs will be forfeited and all of your rights to the RSUs and to receive
Stock for your RSUs and to receive cash payment for the Accrued Dividend
Equivalents will cease without further obligation on the part of the Corporation
unless you personally accept this Award Agreement as provided below by May 31,
2012 and continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

 

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Award Date: January 30, 2012

Page 4

 

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, the Restricted Period will end for a portion of your
RSUs and the Accrued Dividend Equivalents and you will vest in a portion of your
RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

The vested RSUs will be exchanged for shares of Stock, and the related Accrued
Dividend Equivalents associated with the vested portion of your RSUs will be
paid in cash as soon as practicable, but no later than ninety (90) days after
your retirement or layoff, and in no event later than the March 15 next
following the year in which you retire or are laid off. You will forfeit your
remaining RSUs and the related Accrued Dividend Equivalents associated with
forfeited RSUs on the effective date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

 

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Award Date: January 30, 2012

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RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Your RSUs and the Accrued Dividend
Equivalents will vest immediately and you will receive shares of Stock in
exchange for RSUs and the cash payment for the Accrued Dividend Equivalents as
soon as practicable, but no later than ninety (90) days after your termination
of employment with the Corporation, and in no event later than the March 15 next
following the year in which your employment terminates. For the purposes of this
provision, the term “divestiture” shall mean a transaction which results in the
transfer of control of the business operation divested to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests (in the case of entities other than corporations), is owned or
controlled directly or indirectly by the Corporation, by one or more of the
Corporation’s subsidiaries or by a combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

The Corporation will withhold applicable taxes as required by law. You agree to
make appropriate arrangements with the Corporation for the satisfaction of all
income and employment tax withholding requirements as well as social insurance
contributions applicable to the RSUs,

 

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Award Date: January 30, 2012

Page 6

 

and the Accrued Dividend Equivalents, and associated Stock (“RSU Taxes”). In
this regard, you authorize the Corporation to withhold all RSU Taxes legally
payable by you from your wages or other cash compensation paid to you by the
Corporation or, if permissible under applicable legal requirements, from the
Accrued Dividend Equivalents or proceeds from the vesting of the RSUs or the
sale of the underlying Stock in an amount sufficient to cover the RSU Taxes. You
acknowledge and agree that the Corporation may refuse to deliver Stock if such
withholding amounts are not delivered at the time of vesting or payment. To the
extent that the amounts withheld by the Corporation are insufficient to satisfy
the RSU Taxes, you shall pay to the Corporation any additional amount of the RSU
Taxes that may be required to be withheld as a result of your participation in
the Plan. You acknowledge and agree that withholding obligations may change from
time to time as laws or their interpretations change, and regardless of the
Corporation’s actions with respect to the RSU Taxes, the ultimate liability for
any and all RSU Taxes is and shall remain your responsibility, and that the
Corporation (a) makes no representation or undertaking regarding the treatment
of any RSU Taxes in connection with any aspect of the grant of the RSUs,
including the payment of the Accrued Dividend Equivalents, the grant or vesting
of the RSUs, and the subsequent sale of Stock acquired under the Plan; and
(b) does not commit to structure the terms of the grant or any aspect of the
RSUs to reduce or eliminate your liability for RSU Taxes.

You understand that you may suffer adverse tax consequences as a result of your
purchase or disposition of the Stock. You represent that you will consult with
your own tax advisors in connection with the purchase or disposition of the
Stock and that you are not relying on the Corporation for any tax advice.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the Accrued Dividend Equivalents may not be deliverable
to you for six months following such date of termination and, accordingly, the
Fair Market Value of the Stock on the date on which the Stock is deliverable to
you and the Accrued Dividend Equivalents (accrued through the date the Stock
becomes deliverable to you) shall be used for purposes of determining your
compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

 

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Award Date: January 30, 2012

Page 7

 

DATA PRIVACY CONSENT

You hereby explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of your personal data as described in
this Award Agreement by and among the Corporation for the exclusive purpose of
implementing, administering and managing your participation in the Plan.

You understand that the Corporation holds certain personal information about
you, including, but not limited to, your name, home address and telephone
number, date of birth, social insurance number or other identification number,
salary, nationality, job title, any shares or directorships held in the
Corporation, details of all awards or any other entitlement to shares awarded,
canceled, exercised, vested, unvested or outstanding in your favor, for the
purpose of implementing, administering and managing the Plan (“Data”). You
understand that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in your country or elsewhere, and that the recipient’s country
may have different data privacy laws and protections than your country. You
understand that you may request a list with the names and addresses of any
potential recipients of the Data by contacting your local human resources
representative. You authorize the recipients to receive, possess, use, retain
and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data as may be required to a broker or
other third party with whom the Corporation may elect to administer the
settlement of any award. You understand that Data will be held only as long as
is necessary to implement, administer and manage your participation in the Plan.
You understand that you may, at any time, view Data, request additional
information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, in any case
without cost, by contacting in writing your local human resources
representative. You understand, however, that refusing or withdrawing your
consent may affect your ability to participate in the Plan. For more information
on the consequences of your refusal to consent or withdrawal of consent, you
understand that you may contact your local human resources representative.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either

 

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Award Date: January 30, 2012

Page 8

 

electronically or by signing and returning a copy of this letter on or before
May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

EMPLOYEE ACKNOWLEDGMENT

You acknowledge and agree as follows:

(a) the Plan is discretionary in nature and that the Committee may amend,
suspend, or terminate it at any time;

(b) the grant of the RSUs are voluntary and occasional and does not create any
contractual or other right to receive future grants of any RSUs, or benefits in
lieu of any RSUs even if RSUs have been granted repeatedly in the past;

(c) all determinations with respect to such future RSUs, if any, including but
not limited to the times when RSUs shall be granted or when RSUs shall vest,
will be at the sole discretion of the Committee;

(d) your participation in the Plan is voluntary;

(e) the value of the RSUs are an extraordinary item of compensation, which is
outside the scope of your employment contract (if any), except as may otherwise
be explicitly provided in your employment contract;

(f) the RSUs are not part of normal or expected compensation or salary for any
purpose, including, but not limited to, calculating termination, severance,
resignation, redundancy, end of service, or similar payments, or bonuses,
long-service awards, pension or retirement benefits;

 

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Award Date: January 30, 2012

Page 9

 

(g) the RSUs shall expire upon termination of your employment for any reason
except as may otherwise be explicitly provided in the Plan and this Award
Agreement;

(h) the future value of the shares is unknown and cannot be predicted with
certainty; and

(i) no claim or entitlement to compensation or damages arises from the
termination of the RSUs or diminution in value of the RSUs or Stock and you
irrevocably release the Corporation and your employer from any such claim that
may arise.

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
U.S. securities laws and CPS 722. Among other things, CPS 722 prohibits
employees of the Corporation from engaging in transactions that violate U.S.
securities laws or involve hedging or pledging stock. Insiders are subject to
additional restrictions. The Corporation recommends that Insiders consult with
the Senior Vice President, General Counsel and Corporate Secretary or her staff
before entering into any transactions involving Stock or RSUs.

 

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Award Date: January 30, 2012

Page 10

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management Development and Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

    

 

Date

 

Print Name

    

 

Employee ID

 

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RSU PECA CEO (performance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to satisfaction of a performance goal as
well as your acceptance of this Award Agreement by May 31, 2012 and your
continuous employment with the Corporation from the Award Date until January 30,
2015 (the “Restricted Period”). If any of these requirements are not satisfied,
you may forfeit all or part of your RSUs. Upon forfeiture, you will no longer
have the right to receive Stock for forfeited RSUs or to receive cash payments
for the Accrued Dividend Equivalents.

1. Performance Goal

At its first meeting after the Corporation finalizes the financial results for
the year ending December 31, 2012, the Committee will multiply the number of
RSUs awarded to you under this Award Agreement by the Fair Market Value of Stock
on the Award Date ($[        ]) (“RSU Award Value”). The Committee will then
compare your RSU Award Value to the product of 0.10% and the Corporation’s Cash
Flow for the year ending December 31, 2012 (with the product being referred to
as the “RSU Performance Goal”). If your RSU Award Value exceeds your RSU
Performance Goal (with the amount of that excess referred to as the “Performance
Shortfall”) then you will forfeit the number of whole RSUs that are equal to the
Performance Shortfall divided by the Fair Market Value of Stock on the Award
Date ($[        ]).

For purposes of this Award Agreement, Cash Flow for any period means net cash
flow from operations but not taking into account: (i) the aggregate difference
between the amount forecasted in the Corporation’s 2012 Long Range Plan to be
contributed by the Corporation to the Corporation’s defined benefit pension
plans during the period and the actual amounts

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Award Date: January 30, 2012

Page 4

 

contributed by the Corporation during the period; and (ii) any tax payments or
tax benefits during the period associated with the divestiture of business
units, other than tax payments or tax benefits that were included in the
Corporation’s 2012 Long Range Plan. Cash Flow shall be determined by the
Committee based upon the comparable numbers reported on the Corporation’s
audited consolidated financial statements or, if audited financial statements
are not available for the period for which Cash Flow is being determined, the
Committee shall determine Cash Flow in a manner consistent with the historical
practices used by the Corporation in determining net cash provided by operating
activities as reported in its audited consolidated statement of cash flows, in
either case as modified by this paragraph.

2. Employment Requirement

Regardless of the satisfaction of the RSU Performance Goal, all of your RSUs
will be forfeited and all of your rights to the RSUs and to receive Stock for
your RSUs and to receive cash payment for the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation unless you
personally accept this Award Agreement as provided below by May 31, 2012 and
continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement or the potential
forfeiture to the extent of a Performance Shortfall if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

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Award Date: January 30, 2012

Page 5

 

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, your RSUs and the Accrued Dividend Equivalents will
continue to be subject to forfeiture to the extent of any Performance Shortfall
certified by the Committee prior to, on or after such date; however, subject to
any Performance Shortfall that may occur, the Restricted Period will end for a
portion of your RSUs and the Accrued Dividend Equivalents and you will vest in a
portion of your RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

Notwithstanding the foregoing, your RSUs will not be considered vested until
such time as the Committee makes its certification with respect to the RSU
Performance Goal. The vested RSUs will be exchanged for shares of Stock, and the
related Accrued Dividend Equivalents associated with the vested portion of your
RSUs will be paid in cash as soon as practicable, but no later than ninety
(90) days after the later of the Committee’s certification or your retirement or
layoff, and in no event later than the March 15 next following the year in which
you retire or are laid off. You will forfeit your remaining RSUs and the related
Accrued Dividend Equivalents associated with forfeited RSUs on the effective
date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

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Award Date: January 30, 2012

Page 6

 

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Subject to any Performance Shortfall, your
RSUs and the Accrued Dividend Equivalents will vest immediately (or following
the Committee’s determination of any Performance Shortfall, if later) and you
will receive shares of Stock in exchange for RSUs and the cash payment for the
Accrued Dividend Equivalents as soon as practicable, but no later than the later
of ninety (90) days after your termination of employment with the Corporation or
the determination by the Committee of any Performance Shortfall, and in no event
later than the March 15 next following the year in which your employment
terminates. For the purposes of this provision, the term “divestiture” shall
mean a transaction which results in the transfer of control of the business
operation divested to any person, corporation, association, partnership, joint
venture, limited liability company or other business entity of which less than
50% of the voting stock or other equity interests (in the case of entities other
than corporations), is owned or controlled directly or indirectly by the
Corporation, by one or more of the Corporation’s subsidiaries or by a
combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control. You will vest in your entire Award
(including any Accrued Dividend Equivalents) under this Award Agreement and
without regard to any forfeiture that might otherwise occur because of a
Performance Shortfall.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will withhold federal, state, and local
income taxes at the minimum rate prescribed by law.

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Award Date: January 30, 2012

Page 7

 

Therefore, you may owe taxes relating to the RSUs in addition to the amount
withheld by the Corporation. FICA tax withholding also will apply except to the
extent FICA taxes have already been collected in the case of retirement-eligible
employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the

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Award Date: January 30, 2012

Page 8

 

Accrued Dividend Equivalents may not be deliverable to you for six months
following such date of termination and, accordingly, the Fair Market Value of
the Stock on the date on which the Stock is deliverable to you and the Accrued
Dividend Equivalents (accrued through the date the Stock becomes deliverable to
you) shall be used for purposes of determining your compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 9

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 10

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

    

 

Date

 

Print Name

    

 

Employee ID

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Award Date: January 30, 2012

Page 11

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the Chief
Executive Officer of the Corporation, during the two-year period following the
date of my termination of employment (the “Termination Date”) with the
Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Chief Executive
Officer of the Corporation, during the two-year period following the Termination
Date, I will not (i) interfere with any contractual relationship between the
Corporation and any customer, supplier, distributor or manufacturer of or to the
Corporation to the detriment of the Corporation or (ii) induce or attempt to
induce any person who is an employee of the Corporation to perform work or
services for any entity other than the Corporation.

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Award Date: January 30, 2012

Page 12

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

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Award Date: January 30, 2012

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(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii)

The Corporation determines that I engaged in fraud, bribery or any other illegal
act or that my intentional misconduct or gross negligence (including the failure
to report the acts of another

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Award Date: January 30, 2012

Page 14

 

  person of which I had knowledge during the period I was employed by the
Corporation) contributed to another person’s fraud, bribery or other illegal
act, which in any such case adversely affected the Corporation’s financial
position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of Common Stock as finally reported by the New York
Stock Exchange on such date), and (iii) to the extent I have not earned the RSUs
fully, all of my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

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Award Date: January 30, 2012

Page 15

 

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

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Award Date: January 30, 2012

Page 16

 

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

Page 17

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

  

Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

RSU PECA SVPHR (performance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but not later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

 

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Award Date: January 30, 2012

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After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to satisfaction of a performance goal as
well as your acceptance of this Award Agreement by May 31, 2012 and your
continuous employment with the Corporation from the Award Date until January 30,
2015 (the “Restricted Period”). If any of these requirements are not satisfied,
you may forfeit all or part of your RSUs. Upon forfeiture, you will no longer
have the right to receive Stock for forfeited RSUs or to receive cash payments
for the Accrued Dividend Equivalents.

1. Performance Goal

At its first meeting after the Corporation finalizes the financial results for
the year ending December 31, 2012, the Committee will multiply the number of
RSUs awarded to you under this Award Agreement by the Fair Market Value of Stock
on the Award Date ($[        ]) (“RSU Award Value”). The Committee will then
compare your RSU Award Value to the product of 0.10% and the Corporation’s Cash
Flow for the year ending December 31, 2012 (with the product being referred to
as the “RSU Performance Goal”). If your RSU Award Value exceeds your RSU
Performance Goal (with the amount of that excess referred to as the “Performance
Shortfall”) then you will forfeit the number of whole RSUs that are equal to the
Performance Shortfall divided by the Fair Market Value of Stock on the Award
Date ($[        ]).

For purposes of this Award Agreement, Cash Flow for any period means net cash
flow from operations but not taking into account: (i) the aggregate difference
between the amount forecasted in the Corporation’s 2012 Long Range Plan to be
contributed by the Corporation to the Corporation’s defined benefit pension
plans during the period and the actual amounts

 

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contributed by the Corporation during the period; and (ii) any tax payments or
tax benefits during the period associated with the divestiture of business
units, other than tax payments or tax benefits that were included in the
Corporation’s 2012 Long Range Plan. Cash Flow shall be determined by the
Committee based upon the comparable numbers reported on the Corporation’s
audited consolidated financial statements or, if audited financial statements
are not available for the period for which Cash Flow is being determined, the
Committee shall determine Cash Flow in a manner consistent with the historical
practices used by the Corporation in determining net cash provided by operating
activities as reported in its audited consolidated statement of cash flows, in
either case as modified by this paragraph.

2. Employment Requirement

Regardless of the satisfaction of the RSU Performance Goal, all of your RSUs
will be forfeited and all of your rights to the RSUs and to receive Stock for
your RSUs and to receive cash payment for the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation unless you
personally accept this Award Agreement as provided below by May 31, 2012 and
continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement or the potential
forfeiture to the extent of a Performance Shortfall if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

 

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2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, your RSUs and the Accrued Dividend Equivalents will
continue to be subject to forfeiture to the extent of any Performance Shortfall
certified by the Committee prior to, on or after such date; however, subject to
any Performance Shortfall that may occur, the Restricted Period will end for a
portion of your RSUs and the Accrued Dividend Equivalents and you will vest in a
portion of your RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

Notwithstanding the foregoing, your RSUs will not be considered vested until
such time as the Committee makes its certification with respect to the RSU
Performance Goal. The vested RSUs will be exchanged for shares of Stock, and the
related Accrued Dividend Equivalents associated with the vested portion of your
RSUs will be paid in cash as soon as practicable, but no later than ninety
(90) days after the later of the Committee’s certification or your retirement or
layoff, and in no event later than the March 15 next following the year in which
you retire or are laid off. You will forfeit your remaining RSUs and the related
Accrued Dividend Equivalents associated with forfeited RSUs on the effective
date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

 

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DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Subject to any Performance Shortfall, your
RSUs and the Accrued Dividend Equivalents will vest immediately (or following
the Committee’s determination of any Performance Shortfall, if later) and you
will receive shares of Stock in exchange for RSUs and the cash payment for the
Accrued Dividend Equivalents as soon as practicable, but no later than the later
of ninety (90) days after your termination of employment with the Corporation or
the determination by the Committee of any Performance Shortfall, and in no event
later than the March 15 next following the year in which your employment
terminates. For the purposes of this provision, the term “divestiture” shall
mean a transaction which results in the transfer of control of the business
operation divested to any person, corporation, association, partnership, joint
venture, limited liability company or other business entity of which less than
50% of the voting stock or other equity interests (in the case of entities other
than corporations), is owned or controlled directly or indirectly by the
Corporation, by one or more of the Corporation’s subsidiaries or by a
combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control. You will vest in your entire Award
(including any Accrued Dividend Equivalents) under this Award Agreement and
without regard to any forfeiture that might otherwise occur because of a
Performance Shortfall.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will withhold federal, state, and local
income taxes at the minimum rate prescribed by law.

 

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Award Date: January 30, 2012

Page 7

 

Therefore, you may owe taxes relating to the RSUs in addition to the amount
withheld by the Corporation. FICA tax withholding also will apply except to the
extent FICA taxes have already been collected in the case of retirement-eligible
employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the

 

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Accrued Dividend Equivalents may not be deliverable to you for six months
following such date of termination and, accordingly, the Fair Market Value of
the Stock on the date on which the Stock is deliverable to you and the Accrued
Dividend Equivalents (accrued through the date the Stock becomes deliverable to
you) shall be used for purposes of determining your compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

 

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Award Date: January 30, 2012

Page 9

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

 

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You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management Development

and Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

 

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Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the Senior
Vice President, Human Resources of the Corporation, during the one-year period
following the date of my termination of employment (the “Termination Date”) with
the Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not (i) interfere with any contractual
relationship between the Corporation and any customer, supplier, distributor or
manufacturer of or to the Corporation to the detriment of the Corporation or
(ii) induce or attempt to induce any person who is an employee of the
Corporation to perform work or services for any entity other than the
Corporation.

 

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Award Date: January 30, 2012

Page 12

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

 

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(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

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Page 14

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of Common Stock as finally reported by the New York
Stock Exchange on such date), and (iii) to the extent I have not earned the RSUs
fully, all of my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

 

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Award Date: January 30, 2012

Page 15

 

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

 

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Award Date: January 30, 2012

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(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

 

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Award Date: January 30, 2012

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Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple Chief Executive Officer    6 times President/Chief
Operating Officer    5 times Chief Financial Officer    4 times Business Area
Executive Vice Presidents    3 times Corporate Senior Vice Presidents    2 times
Other Elected Officers    2 times All Other Vice Presidents    1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

RSU PECA SVPHR (nonperformance)

 

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to your acceptance of this Award
Agreement by May 31, 2012 and your continuous employment with the Corporation
from the Award Date until January 30, 2015 (the “Restricted Period”). All of
your RSUs will be forfeited and all of your rights to the RSUs and to receive
Stock for your RSUs and to receive cash payment for the Accrued Dividend
Equivalents will cease without further obligation on the part of the Corporation
unless you personally accept this Award Agreement as provided below by May 31,
2012 and continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

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Award Date: January 30, 2012

Page 4

 

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, the Restricted Period will end for a portion of your
RSUs and the Accrued Dividend Equivalents and you will vest in a portion of your
RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

The vested RSUs will be exchanged for shares of Stock, and the related Accrued
Dividend Equivalents associated with the vested portion of your RSUs will be
paid in cash as soon as practicable, but no later than ninety (90) days after
your retirement or layoff, and in no event later than the March 15 next
following the year in which you retire or are laid off. You will forfeit your
remaining RSUs and the related Accrued Dividend Equivalents associated with
forfeited RSUs on the effective date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

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Award Date: January 30, 2012

Page 5

 

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Your RSUs and the Accrued Dividend
Equivalents will vest immediately and you will receive shares of Stock in
exchange for RSUs and the cash payment for the Accrued Dividend Equivalents as
soon as practicable, but no later than ninety (90) days after your termination
of employment with the Corporation, and in no event later than the March 15 next
following the year in which your employment terminates. For the purposes of this
provision, the term “divestiture” shall mean a transaction which results in the
transfer of control of the business operation divested to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests (in the case of entities other than corporations), is owned or
controlled directly or indirectly by the Corporation, by one or more of the
Corporation’s subsidiaries or by a combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income,

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Award Date: January 30, 2012

Page 6

 

based on the Fair Market Value of Stock on the day the Stock is deliverable to
you. We will withhold federal, state, and local income taxes at the minimum rate
prescribed by law. Therefore, you may owe taxes relating to the RSUs in addition
to the amount withheld by the Corporation. FICA tax withholding also will apply
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

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Award Date: January 30, 2012

Page 7

 

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the Accrued Dividend Equivalents may not be deliverable
to you for six months following such date of termination and, accordingly, the
Fair Market Value of the Stock on the date on which the Stock is deliverable to
you and the Accrued Dividend Equivalents (accrued through the date the Stock
becomes deliverable to you) shall be used for purposes of determining your
compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 8

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 9

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

    

 

Date

 

Print Name

    

 

Employee ID

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Award Date: January 30, 2012

Page 10

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the Senior
Vice President, Human Resources of the Corporation, during the one-year period
following the date of my termination of employment (the “Termination Date”) with
the Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not (i) interfere with any contractual
relationship between the Corporation and any customer, supplier, distributor or
manufacturer of or to the Corporation to the detriment of the Corporation or
(ii) induce or attempt to induce any person who is an employee of the
Corporation to perform work or services for any entity other than the
Corporation.

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Award Date: January 30, 2012

Page 11

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

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Award Date: January 30, 2012

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(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

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Award Date: January 30, 2012

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  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of Common Stock as finally reported by the New York
Stock Exchange on such date), and (iii) to the extent I have not earned the RSUs
fully, all of my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

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Award Date: January 30, 2012

Page 14

 

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

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Award Date: January 30, 2012

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(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

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Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

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RSU CA PECA CEO (performance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to satisfaction of a performance goal as
well as your acceptance of this Award Agreement by May 31, 2012 and your
continuous employment with the Corporation from the Award Date until January 30,
2015 (the “Restricted Period”). If any of these requirements are not satisfied,
you may forfeit all or part of your RSUs. Upon forfeiture, you will no longer
have the right to receive Stock for forfeited RSUs or to receive cash payments
for the Accrued Dividend Equivalents.

1. Performance Goal

At its first meeting after the Corporation finalizes the financial results for
the year ending December 31, 2012, the Committee will multiply the number of
RSUs awarded to you under this Award Agreement by the Fair Market Value of Stock
on the Award Date ($[        ]) (“RSU Award Value”). The Committee will then
compare your RSU Award Value to the product of 0.10% and the Corporation’s Cash
Flow for the year ending December 31, 2012 (with the product being referred to
as the “RSU Performance Goal”). If your RSU Award Value exceeds your RSU
Performance Goal (with the amount of that excess referred to as the “Performance
Shortfall”) then you will forfeit the number of whole RSUs that are equal to the
Performance Shortfall divided by the Fair Market Value of Stock on the Award
Date ($[        ]).

For purposes of this Award Agreement, Cash Flow for any period means net cash
flow from operations but not taking into account: (i) the aggregate difference
between the amount forecasted in the Corporation’s 2012 Long Range Plan to be
contributed by the Corporation to the Corporation’s defined benefit pension
plans during the period and the actual amounts

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Award Date: January 30, 2012

Page 4

 

contributed by the Corporation during the period; and (ii) any tax payments or
tax benefits during the period associated with the divestiture of business
units, other than tax payments or tax benefits that were included in the
Corporation’s 2012 Long Range Plan. Cash Flow shall be determined by the
Committee based upon the comparable numbers reported on the Corporation’s
audited consolidated financial statements or, if audited financial statements
are not available for the period for which Cash Flow is being determined, the
Committee shall determine Cash Flow in a manner consistent with the historical
practices used by the Corporation in determining net cash provided by operating
activities as reported in its audited consolidated statement of cash flows, in
either case as modified by this paragraph.

2. Employment Requirement

Regardless of the satisfaction of the RSU Performance Goal, all of your RSUs
will be forfeited and all of your rights to the RSUs and to receive Stock for
your RSUs and to receive cash payment for the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation unless you
personally accept this Award Agreement as provided below by May 31, 2012 and
continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement or the potential
forfeiture to the extent of a Performance Shortfall if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

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Award Date: January 30, 2012

Page 5

 

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, your RSUs and the Accrued Dividend Equivalents will
continue to be subject to forfeiture to the extent of any Performance Shortfall
certified by the Committee prior to, on or after such date; however, subject to
any Performance Shortfall that may occur, the Restricted Period will end for a
portion of your RSUs and the Accrued Dividend Equivalents and you will vest in a
portion of your RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

Notwithstanding the foregoing, your RSUs will not be considered vested until
such time as the Committee makes its certification with respect to the RSU
Performance Goal. The vested RSUs will be exchanged for shares of Stock, and the
related Accrued Dividend Equivalents associated with the vested portion of your
RSUs will be paid in cash as soon as practicable, but no later than ninety
(90) days after the later of the Committee’s certification or your retirement or
layoff, and in no event later than the March 15 next following the year in which
you retire or are laid off. You will forfeit your remaining RSUs and the related
Accrued Dividend Equivalents associated with forfeited RSUs on the effective
date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

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Award Date: January 30, 2012

Page 6

 

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Subject to any Performance Shortfall, your
RSUs and the Accrued Dividend Equivalents will vest immediately (or following
the Committee’s determination of any Performance Shortfall, if later) and you
will receive shares of Stock in exchange for RSUs and the cash payment for the
Accrued Dividend Equivalents as soon as practicable, but no later than the later
of ninety (90) days after your termination of employment with the Corporation or
the determination by the Committee of any Performance Shortfall, and in no event
later than the March 15 next following the year in which your employment
terminates. For the purposes of this provision, the term “divestiture” shall
mean a transaction which results in the transfer of control of the business
operation divested to any person, corporation, association, partnership, joint
venture, limited liability company or other business entity of which less than
50% of the voting stock or other equity interests (in the case of entities other
than corporations), is owned or controlled directly or indirectly by the
Corporation, by one or more of the Corporation’s subsidiaries or by a
combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control. You will vest in your entire Award
(including any Accrued Dividend Equivalents) under this Award Agreement and
without regard to any forfeiture that might otherwise occur because of a
Performance Shortfall.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will withhold federal, state, and local
income taxes at the minimum rate prescribed by law.

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Award Date: January 30, 2012

Page 7

 

Therefore, you may owe taxes relating to the RSUs in addition to the amount
withheld by the Corporation. FICA tax withholding also will apply except to the
extent FICA taxes have already been collected in the case of retirement-eligible
employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the

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Award Date: January 30, 2012

Page 8

 

Accrued Dividend Equivalents may not be deliverable to you for six months
following such date of termination and, accordingly, the Fair Market Value of
the Stock on the date on which the Stock is deliverable to you and the Accrued
Dividend Equivalents (accrued through the date the Stock becomes deliverable to
you) shall be used for purposes of determining your compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 9

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 10

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management Development and

Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Award Date: January 30, 2012

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Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Protective Covenants

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

 

  (i)

existing and contemplated business, marketing and financial business information
such as business plans and methods, marketing

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Award Date: January 30, 2012

Page 12

 

  information, cost estimates, forecasts, financial data, cost or pricing data,
bid and proposal information, customer identification, sources of supply,
contemplated product lines, proposed business alliances, and information about
customers or competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes, or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit - Without the express written consent of the Chief Executive
Officer of the Corporation, during the two-year period following the Termination
Date, I will not induce or attempt to induce any person who is an employee of
the Corporation to perform work or services for any entity other than the
Corporation. This provision does not prevent the hiring of such persons so long
as they are not induced to be one employed in violation of this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the

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Award Date: January 30, 2012

Page 13

 

Corporation and the access to and extensive knowledge of the Corporation’s
Confidential or Proprietary Information, employees, suppliers and customers,
these restrictions are reasonably required for the protection of the
Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of

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Award Date: January 30, 2012

Page 14

 

Common Stock as finally reported by the New York Stock Exchange on such date),
and (iii) to the extent I have not earned the RSUs fully, all of my remaining
rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

Page 15

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

RSU CA PECA SVPHR (performance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to satisfaction of a performance goal as
well as your acceptance of this Award Agreement by May 31, 2012 and your
continuous employment with the Corporation from the Award Date until January 30,
2015 (the “Restricted Period”). If any of these requirements are not satisfied,
you may forfeit all or part of your RSUs. Upon forfeiture, you will no longer
have the right to receive Stock for forfeited RSUs or to receive cash payments
for the Accrued Dividend Equivalents.

1. Performance Goal

At its first meeting after the Corporation finalizes the financial results for
the year ending December 31, 2012, the Committee will multiply the number of
RSUs awarded to you under this Award Agreement by the Fair Market Value of Stock
on the Award Date ($[        ]) (“RSU Award Value”). The Committee will then
compare your RSU Award Value to the product of 0.10% and the Corporation’s Cash
Flow for the year ending December 31, 2012 (with the product being referred to
as the “RSU Performance Goal”). If your RSU Award Value exceeds your RSU
Performance Goal (with the amount of that excess referred to as the “Performance
Shortfall”) then you will forfeit the number of whole RSUs that are equal to the
Performance Shortfall divided by the Fair Market Value of Stock on the Award
Date ($[        ]).

For purposes of this Award Agreement, Cash Flow for any period means net cash
flow from operations but not taking into account: (i) the aggregate difference
between the amount forecasted in the Corporation’s 2012 Long Range Plan to be
contributed by the Corporation to the Corporation’s defined benefit pension
plans during the period and the actual amounts

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Award Date: January 30, 2012

Page 4

 

contributed by the Corporation during the period; and (ii) any tax payments or
tax benefits during the period associated with the divestiture of business
units, other than tax payments or tax benefits that were included in the
Corporation’s 2012 Long Range Plan. Cash Flow shall be determined by the
Committee based upon the comparable numbers reported on the Corporation’s
audited consolidated financial statements or, if audited financial statements
are not available for the period for which Cash Flow is being determined, the
Committee shall determine Cash Flow in a manner consistent with the historical
practices used by the Corporation in determining net cash provided by operating
activities as reported in its audited consolidated statement of cash flows, in
either case as modified by this paragraph.

2. Employment Requirement

Regardless of the satisfaction of the RSU Performance Goal, all of your RSUs
will be forfeited and all of your rights to the RSUs and to receive Stock for
your RSUs and to receive cash payment for the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation unless you
personally accept this Award Agreement as provided below by May 31, 2012 and
continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement or the potential
forfeiture to the extent of a Performance Shortfall if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

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Award Date: January 30, 2012

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2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, your RSUs and the Accrued Dividend Equivalents will
continue to be subject to forfeiture to the extent of any Performance Shortfall
certified by the Committee prior to, on or after such date; however, subject to
any Performance Shortfall that may occur, the Restricted Period will end for a
portion of your RSUs and the Accrued Dividend Equivalents and you will vest in a
portion of your RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

Notwithstanding the foregoing, your RSUs will not be considered vested until
such time as the Committee makes its certification with respect to the RSU
Performance Goal. The vested RSUs will be exchanged for shares of Stock, and the
related Accrued Dividend Equivalents associated with the vested portion of your
RSUs will be paid in cash as soon as practicable, but no later than ninety
(90) days after the later of the Committee’s certification or your retirement or
layoff, and in no event later than the March 15 next following the year in which
you retire or are laid off. You will forfeit your remaining RSUs and the related
Accrued Dividend Equivalents associated with forfeited RSUs on the effective
date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

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Page 6

 

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Subject to any Performance Shortfall, your
RSUs and the Accrued Dividend Equivalents will vest immediately (or following
the Committee’s determination of any Performance Shortfall, if later) and you
will receive shares of Stock in exchange for RSUs and the cash payment for the
Accrued Dividend Equivalents as soon as practicable, but no later than the later
of ninety (90) days after your termination of employment with the Corporation or
the determination by the Committee of any Performance Shortfall, and in no event
later than the March 15 next following the year in which your employment
terminates. For the purposes of this provision, the term “divestiture” shall
mean a transaction which results in the transfer of control of the business
operation divested to any person, corporation, association, partnership, joint
venture, limited liability company or other business entity of which less than
50% of the voting stock or other equity interests (in the case of entities other
than corporations), is owned or controlled directly or indirectly by the
Corporation, by one or more of the Corporation’s subsidiaries or by a
combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control. You will vest in your entire Award
(including any Accrued Dividend Equivalents) under this Award Agreement and
without regard to any forfeiture that might otherwise occur because of a
Performance Shortfall.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will withhold federal, state, and local
income taxes at the minimum rate prescribed by law.

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Award Date: January 30, 2012

Page 7

 

Therefore, you may owe taxes relating to the RSUs in addition to the amount
withheld by the Corporation. FICA tax withholding also will apply except to the
extent FICA taxes have already been collected in the case of retirement-eligible
employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the

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Award Date: January 30, 2012

Page 8

 

Accrued Dividend Equivalents may not be deliverable to you for six months
following such date of termination and, accordingly, the Fair Market Value of
the Stock on the date on which the Stock is deliverable to you and the Accrued
Dividend Equivalents (accrued through the date the Stock becomes deliverable to
you) shall be used for purposes of determining your compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 9

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 10

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management Development and

Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Award Date: January 30, 2012

Page 11

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Protective Covenants

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

 

  (i)

existing and contemplated business, marketing and financial business information
such as business plans and methods, marketing information,

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Award Date: January 30, 2012

Page 12

 

  cost estimates, forecasts, financial data, cost or pricing data, bid and
proposal information, customer identification, sources of supply, contemplated
product lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes, or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit - Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not induce or attempt to induce any
person who is an employee of the Corporation to perform work or services for any
entity other than the Corporation. This provision does not prevent the hiring of
such persons so long as they are not induced to be one employed in violation of
this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation

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Award Date: January 30, 2012

Page 13

 

opportunities being made available to me under the Award Agreement. I further
acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless

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Award Date: January 30, 2012

Page 14

 

otherwise determined by the Management Development and Compensation Committee of
the Board of Directors of the Corporation, shall be equal to the closing price
of the shares of Common Stock as finally reported by the New York Stock Exchange
on such date), and (iii) to the extent I have not earned the RSUs fully, all of
my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

Page 15

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple Chief Executive Officer    6 times President/Chief
Operating Officer    5 times Chief Financial Officer    4 times Business Area
Executive Vice Presidents    3 times Corporate Senior Vice Presidents    2 times
Other Elected Officers    2 times All Other Vice Presidents    1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

RSU CA PECA SVPHR (nonperformance)

 

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to your acceptance of this Award
Agreement by May 31, 2012 and your continuous employment with the Corporation
from the Award Date until January 30, 2015 (the “Restricted Period”). All of
your RSUs will be forfeited and all of your rights to the RSUs and to receive
Stock for your RSUs and to receive cash payment for the Accrued Dividend
Equivalents will cease without further obligation on the part of the Corporation
unless you personally accept this Award Agreement as provided below by May 31,
2012 and continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

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The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, the Restricted Period will end for a portion of your
RSUs and the Accrued Dividend Equivalents and you will vest in a portion of your
RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

The vested RSUs will be exchanged for shares of Stock, and the related Accrued
Dividend Equivalents associated with the vested portion of your RSUs will be
paid in cash as soon as practicable, but no later than ninety (90) days after
your retirement or layoff, and in no event later than the March 15 next
following the year in which you retire or are laid off. You will forfeit your
remaining RSUs and the related Accrued Dividend Equivalents associated with
forfeited RSUs on the effective date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

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RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Your RSUs and the Accrued Dividend
Equivalents will vest immediately and you will receive shares of Stock in
exchange for RSUs and the cash payment for the Accrued Dividend Equivalents as
soon as practicable, but no later than ninety (90) days after your termination
of employment with the Corporation, and in no event later than the March 15 next
following the year in which your employment terminates. For the purposes of this
provision, the term “divestiture” shall mean a transaction which results in the
transfer of control of the business operation divested to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests (in the case of entities other than corporations), is owned or
controlled directly or indirectly by the Corporation, by one or more of the
Corporation’s subsidiaries or by a combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income,

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Award Date: January 30, 2012

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based on the Fair Market Value of Stock on the day the Stock is deliverable to
you. We will withhold federal, state, and local income taxes at the minimum rate
prescribed by law. Therefore, you may owe taxes relating to the RSUs in addition
to the amount withheld by the Corporation. FICA tax withholding also will apply
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

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If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the Accrued Dividend Equivalents may not be deliverable
to you for six months following such date of termination and, accordingly, the
Fair Market Value of the Stock on the date on which the Stock is deliverable to
you and the Accrued Dividend Equivalents (accrued through the date the Stock
becomes deliverable to you) shall be used for purposes of determining your
compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 8

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

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You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

 

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Award Date: January 30, 2012

Page 10

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Protective Covenants

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

 

  (i)

existing and contemplated business, marketing and financial business information
such as business plans and methods, marketing information,

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Award Date: January 30, 2012

Page 11

 

  cost estimates, forecasts, financial data, cost or pricing data, bid and
proposal information, customer identification, sources of supply, contemplated
product lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes, or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit - Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not induce or attempt to induce any
person who is an employee of the Corporation to perform work or services for any
entity other than the Corporation. This provision does not prevent the hiring of
such persons so long as they are not induced to be one employed in violation of
this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation

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Award Date: January 30, 2012

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opportunities being made available to me under the Award Agreement. I further
acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless

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Award Date: January 30, 2012

Page 13

 

otherwise determined by the Management Development and Compensation Committee of
the Board of Directors of the Corporation, shall be equal to the closing price
of the shares of Common Stock as finally reported by the New York Stock Exchange
on such date), and (iii) to the extent I have not earned the RSUs fully, all of
my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

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Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

RSU PECA Attorney (performance)

 

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to satisfaction of a performance goal as
well as your acceptance of this Award Agreement by May 31, 2012 and your
continuous employment with the Corporation from the Award Date until January 30,
2015 (the “Restricted Period”). If any of these requirements are not satisfied,
you may forfeit all or part of your RSUs. Upon forfeiture, you will no longer
have the right to receive Stock for forfeited RSUs or to receive cash payments
for the Accrued Dividend Equivalents.

1. Performance Goal

At its first meeting after the Corporation finalizes the financial results for
the year ending December 31, 2012, the Committee will multiply the number of
RSUs awarded to you under this Award Agreement by the Fair Market Value of Stock
on the Award Date ($[        ]) (“RSU Award Value”). The Committee will then
compare your RSU Award Value to the product of 0.10% and the Corporation’s Cash
Flow for the year ending December 31, 2012 (with the product being referred to
as the “RSU Performance Goal”). If your RSU Award Value exceeds your RSU
Performance Goal (with the amount of that excess referred to as the “Performance
Shortfall”) then you will forfeit the number of whole RSUs that are equal to the
Performance Shortfall divided by the Fair Market Value of Stock on the Award
Date ($[        ]).

For purposes of this Award Agreement, Cash Flow for any period means net cash
flow from operations but not taking into account: (i) the aggregate difference
between the amount forecasted in the Corporation’s 2012 Long Range Plan to be
contributed by the Corporation to the Corporation’s defined benefit pension
plans during the period and the actual amounts

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Award Date: January 30, 2012

Page 4

 

contributed by the Corporation during the period; and (ii) any tax payments or
tax benefits during the period associated with the divestiture of business
units, other than tax payments or tax benefits that were included in the
Corporation’s 2012 Long Range Plan. Cash Flow shall be determined by the
Committee based upon the comparable numbers reported on the Corporation’s
audited consolidated financial statements or, if audited financial statements
are not available for the period for which Cash Flow is being determined, the
Committee shall determine Cash Flow in a manner consistent with the historical
practices used by the Corporation in determining net cash provided by operating
activities as reported in its audited consolidated statement of cash flows, in
either case as modified by this paragraph.

2. Employment Requirement

Regardless of the satisfaction of the RSU Performance Goal, all of your RSUs
will be forfeited and all of your rights to the RSUs and to receive Stock for
your RSUs and to receive cash payment for the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation unless you
personally accept this Award Agreement as provided below by May 31, 2012 and
continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement or the potential
forfeiture to the extent of a Performance Shortfall if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

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Award Date: January 30, 2012

Page 5

 

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, your RSUs and the Accrued Dividend Equivalents will
continue to be subject to forfeiture to the extent of any Performance Shortfall
certified by the Committee prior to, on or after such date; however, subject to
any Performance Shortfall that may occur, the Restricted Period will end for a
portion of your RSUs and the Accrued Dividend Equivalents and you will vest in a
portion of your RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

Notwithstanding the foregoing, your RSUs will not be considered vested until
such time as the Committee makes its certification with respect to the RSU
Performance Goal. The vested RSUs will be exchanged for shares of Stock, and the
related Accrued Dividend Equivalents associated with the vested portion of your
RSUs will be paid in cash as soon as practicable, but no later than ninety
(90) days after the later of the Committee’s certification or your retirement or
layoff, and in no event later than the March 15 next following the year in which
you retire or are laid off. You will forfeit your remaining RSUs and the related
Accrued Dividend Equivalents associated with forfeited RSUs on the effective
date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

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Award Date: January 30, 2012

Page 6

 

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Subject to any Performance Shortfall, your
RSUs and the Accrued Dividend Equivalents will vest immediately (or following
the Committee’s determination of any Performance Shortfall, if later) and you
will receive shares of Stock in exchange for RSUs and the cash payment for the
Accrued Dividend Equivalents as soon as practicable, but no later than the later
of ninety (90) days after your termination of employment with the Corporation or
the determination by the Committee of any Performance Shortfall, and in no event
later than the March 15 next following the year in which your employment
terminates. For the purposes of this provision, the term “divestiture” shall
mean a transaction which results in the transfer of control of the business
operation divested to any person, corporation, association, partnership, joint
venture, limited liability company or other business entity of which less than
50% of the voting stock or other equity interests (in the case of entities other
than corporations), is owned or controlled directly or indirectly by the
Corporation, by one or more of the Corporation’s subsidiaries or by a
combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control. You will vest in your entire Award
(including any Accrued Dividend Equivalents) under this Award Agreement and
without regard to any forfeiture that might otherwise occur because of a
Performance Shortfall.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will withhold federal, state, and local
income taxes at the minimum rate prescribed by law.

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Award Date: January 30, 2012

Page 7

 

Therefore, you may owe taxes relating to the RSUs in addition to the amount
withheld by the Corporation. FICA tax withholding also will apply except to the
extent FICA taxes have already been collected in the case of retirement-eligible
employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the

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Award Date: January 30, 2012

Page 8

 

Accrued Dividend Equivalents may not be deliverable to you for six months
following such date of termination and, accordingly, the Fair Market Value of
the Stock on the date on which the Stock is deliverable to you and the Accrued
Dividend Equivalents (accrued through the date the Stock becomes deliverable to
you) shall be used for purposes of determining your compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 9

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 10

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo

(On behalf of the Management

Development and Compensation

Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Award Date: January 30, 2012

Page 11

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Post Termination Activity

(a) Post-employment Activity As a Lawyer – I acknowledge that as counsel to
Lockheed Martin Corporation (the “Corporation”), I owe ethical and fiduciary
obligations to the Corporation and that at least some of these obligations will
continue even after the date of my termination of employment (“Termination
Date”) with the Corporation. I agree that after my Termination Date I will
comply fully with all applicable ethical and fiduciary obligations that I owe to
the Corporation. To the extent permitted by applicable law, including but not
limited to any applicable rules governing attorney conduct, I agree that I will
not

 

  (i) Represent any client adversely to the Corporation;

 

  (ii) Reveal to any third party any information learned by me during the course
of my employment with the Corporation except for information that is or becomes
generally known;

 

  (iii) Encourage or solicit any present or future agents or employees of the
Corporation to terminate their employment for the purpose of competing with the
Corporation; or

 

  (iv) Whether as a lawyer or non-lawyer, accept a position (whether as agent,
employer, part or sole owner or in any other capacity) with any person or entity
whose interests are adverse to the Corporation’s interests if that adverse
position is related in any way to my present or past work with the Corporation.

(b) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(c) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or

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Award Date: January 30, 2012

Page 12

 

future litigation (including alternative dispute resolution proceedings) or
investigations in which the Corporation or any of its subsidiaries or affiliates
is a party or is required or requested to provide testimony and regarding which,
as a result of my employment with the Corporation, I reasonably could be
expected to have knowledge or information relevant to the litigation or
investigation. Notwithstanding any other provision of this PECA, nothing in this
PECA shall affect my obligation to cooperate with any governmental inquiry or
investigation or to give truthful testimony in court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s confidential or proprietary information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies for Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

1. If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, to the extent permitted by
applicable law, including but not limited to any applicable rules governing
attorney conduct, that upon demand by the Corporation, to forfeit, return or
repay to the Corporation the “Benefits and Proceeds” (as defined below) in the
event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1 (and in the case
of 1(a), the breach occurs prior to the second anniversary of my Termination
Date);

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii)

The Corporation determines that I engaged in fraud, bribery or any other illegal
act or that my intentional misconduct or gross negligence (including the failure
to report the acts of another person of which I

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Award Date: January 30, 2012

Page 13

 

  had knowledge during the period I was employed by the Corporation) contributed
to another person’s fraud, bribery or other illegal act, which in any such case
adversely affected the Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

2. The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

3. For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of Common Stock as finally reported by the New York
Stock Exchange on such date), and (iii) to the extent I have not earned the RSUs
fully, all of my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable.

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Award Date: January 30, 2012

Page 14

 

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

Page 15

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

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RSU PECA Attorney (nonperformance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Awardee:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but not later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to your acceptance of this Award
Agreement by May 31, 2012 and your continuous employment with the Corporation
from the Award Date until January 30, 2015 (the “Restricted Period”). All of
your RSUs will be forfeited and all of your rights to the RSUs and to receive
Stock for your RSUs and to receive cash payment for the Accrued Dividend
Equivalents will cease without further obligation on the part of the Corporation
unless you personally accept this Award Agreement as provided below by May 31,
2012 and continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

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Award Date: January 30, 2012

Page 4

 

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, the Restricted Period will end for a portion of your
RSUs and the Accrued Dividend Equivalents and you will vest in a portion of your
RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

The vested RSUs will be exchanged for shares of Stock, and the related Accrued
Dividend Equivalents associated with the vested portion of your RSUs will be
paid in cash as soon as practicable, but no later than ninety (90) days after
your retirement or layoff, and in no event later than the March 15 next
following the year in which you retire or are laid off. You will forfeit your
remaining RSUs and the related Accrued Dividend Equivalents associated with
forfeited RSUs on the effective date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

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Award Date: January 30, 2012

Page 5

 

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Your RSUs and the Accrued Dividend
Equivalents will vest immediately and you will receive shares of Stock in
exchange for RSUs and the cash payment for the Accrued Dividend Equivalents as
soon as practicable, but no later than ninety (90) days after your termination
of employment with the Corporation, and in no event later than the March 15 next
following the year in which your employment terminates. For the purposes of this
provision, the term “divestiture” shall mean a transaction which results in the
transfer of control of the business operation divested to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests (in the case of entities other than corporations), is owned or
controlled directly or indirectly by the Corporation, by one or more of the
Corporation’s subsidiaries or by a combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income,

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Award Date: January 30, 2012

Page 6

 

based on the Fair Market Value of Stock on the day the Stock is deliverable to
you. We will withhold federal, state, and local income taxes at the minimum rate
prescribed by law. Therefore, you may owe taxes relating to the RSUs in addition
to the amount withheld by the Corporation. FICA tax withholding also will apply
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

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Award Date: January 30, 2012

Page 7

 

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the Accrued Dividend Equivalents may not be deliverable
to you for six months following such date of termination and, accordingly, the
Fair Market Value of the Stock on the date on which the Stock is deliverable to
you and the Accrued Dividend Equivalents (accrued through the date the Stock
becomes deliverable to you) shall be used for purposes of determining your
compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 8

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 9

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Award Date: January 30, 2012

Page 10

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Post Termination Activity

(a) Post-employment Activity As a Lawyer – I acknowledge that as counsel to
Lockheed Martin Corporation (the “Corporation”), I owe ethical and fiduciary
obligations to the Corporation and that at least some of these obligations will
continue even after the date of my termination of employment (“Termination
Date”) with the Corporation. I agree that after my Termination Date I will
comply fully with all applicable ethical and fiduciary obligations that I owe to
the Corporation. To the extent permitted by applicable law, including but not
limited to any applicable rules governing attorney conduct, I agree that I will
not

 

  (i) Represent any client adversely to the Corporation;

 

  (ii) Reveal to any third party any information learned by me during the course
of my employment with the Corporation except for information that is or becomes
generally known;

 

  (iii) Encourage or solicit any present or future agents or employees of the
Corporation to terminate their employment for the purpose of competing with the
Corporation; or

 

  (iv) Whether as a lawyer or non-lawyer, accept a position (whether as agent,
employer, part or sole owner or in any other capacity) with any person or entity
whose interests are adverse to the Corporation’s interests if that adverse
position is related in any way to my present or past work with the Corporation.

(b) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(c) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or

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Award Date: January 30, 2012

Page 11

 

future litigation (including alternative dispute resolution proceedings) or
investigations in which the Corporation or any of its subsidiaries or affiliates
is a party or is required or requested to provide testimony and regarding which,
as a result of my employment with the Corporation, I reasonably could be
expected to have knowledge or information relevant to the litigation or
investigation. Notwithstanding any other provision of this PECA, nothing in this
PECA shall affect my obligation to cooperate with any governmental inquiry or
investigation or to give truthful testimony in court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s confidential or proprietary information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies for Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, to the extent permitted by
applicable law, including but not limited to any applicable rules governing
attorney conduct, that upon demand by the Corporation, to forfeit, return or
repay to the Corporation the “Benefits and Proceeds” (as defined below) in the
event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1 (and in the case
of 1(a), the breach occurs prior to the second anniversary of my Termination
Date);

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii)

The Corporation determines that I engaged in fraud, bribery or any other illegal
act or that my intentional misconduct or gross negligence (including the failure
to report the acts of another person of which I

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Award Date: January 30, 2012

Page 12

 

  had knowledge during the period I was employed by the Corporation) contributed
to another person’s fraud, bribery or other illegal act, which in any such case
adversely affected the Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of Common Stock as finally reported by the New York
Stock Exchange on such date), and (iii) to the extent I have not earned the RSUs
fully, all of my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable.

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Award Date: January 30, 2012

Page 13

 

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

Page 14

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

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RSU PECA RJS MD&CC (performance)

Award Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Mr. Stevens:

The Management Development and Compensation Committee of the Board of Directors
(“Committee”) has awarded you Restricted Stock Units (“RSUs”). Each RSU entitles
you, upon satisfaction of the continuous employment and other requirements set
forth in this letter and the Plan, to receive from Lockheed Martin Corporation
(“Corporation”): (i) one (1) share of the Corporation’s common stock, par value
$1.00 per share, (“Stock”); and (ii) a cash payment equal to the sum of any cash
dividends paid to stockholders of the Corporation during the Restricted Period
(as defined below), each in accordance with the terms of this letter, the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (“Plan”), and
any rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your RSUs and sets forth some of
the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan and this Award Agreement are a
part. In the event of a conflict between this letter and the Plan, the Plan
document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term Restricted Stock Unit or RSU as used in this Award Agreement refers
only to the Restricted Stock Units awarded to you under this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement as described, this Award will be effective as
of the Award Date. Acceptance of this Award Agreement constitutes your consent
to any action taken under the Plan consistent with its terms with respect to
this Award and your agreement to be bound by the restrictions contained in
Exhibit A (“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not properly acknowledge your acceptance of this Award Agreement on or
before May 31, 2012, this Award will be forfeited.

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Award Date: January 30, 2012

Page 2

 

CONSIDERATION FOR AWARD

The consideration for the Restricted Stock Units is your continued service to
the Corporation as an Employee during the Restricted Period set forth below. If
you do not continue to perform services for the Corporation as an Employee
during the entire Restricted Period as set forth below under “RESTRICTED PERIOD,
FORFEITURE,” your Award will be forfeited in whole or in part.

RIGHTS OF OWNERSHIP, RESTRICTIONS ON TRANSFER

During the Restricted Period, your RSUs will be subject to forfeiture. Until the
Restricted Period ends with respect to a particular RSU and a share of Stock is
delivered to you, you generally will not have the rights and privileges of a
stockholder. In particular, you will not have the right to vote your RSUs on any
matter put to the stockholders of the Corporation; you may not sell, transfer,
assign, pledge, use as collateral or otherwise dispose of or encumber RSUs; and
you will not have the right to receive any dividends or dividend equivalents on
the RSUs or the right to receive any dividend paid to stockholders on a share of
Stock.

Upon expiration or termination of the Restricted Period with respect to your
RSUs, and subject to the forfeiture provisions set forth below, each RSU for
which the restrictions have lapsed will be exchanged for a certificate (either
in paper or book entry form) evidencing one (1) share of Stock issued in your
name (or other name(s) designated by you) and a cash payment equal to the
dividends that would have been paid to you had you owned such share from the
Award Date until the expiration or termination of the Restricted Period
(“Accrued Dividend Equivalents”). Your shares and the cash payment for the
Accrued Dividend Equivalents will be delivered to you as soon as practicable,
but no later than ninety (90) days after the expiration or termination of the
Restricted Period.

The certificates delivered to you may contain any legend the Corporation
determines is appropriate under the securities laws. At the time the Restricted
Period for your RSUs terminates, the Corporation is required to collect from you
the appropriate amount of federal, state and local taxes with respect to both
the shares delivered and the cash payment for the Accrued Dividend Equivalents.
The Corporation may be required to collect FICA taxes from you prior to the
termination of the Restricted Period if you become eligible for retirement prior
to the termination of that period. In this regard, please see “TIMING OF
TAXATION AND WITHHOLDING” below.

In the event Code section 409A(a)(2)(B)(i) applies because you are a specified
employee receiving a distribution on account of a termination of employment,
delivery of Stock and the Accrued Dividend Equivalents may be delayed for six
months from such date; similarly, if you are an Insider subject to the reporting
provisions of Section 16(a) of the Securities Exchange Act of 1934, delivery of
Stock following the expiration of the Restricted Period for any reason may be
delayed for six months. You will be notified if you are a specified employee for
purposes of section 409A.

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Award Date: January 30, 2012

Page 3

 

After the Stock is delivered to you, you (or your designee(s)) will enjoy all of
the rights and privileges associated with ownership of the shares, including the
right to vote on any matter put to stockholder vote, to receive dividends, and
to encumber, sell or otherwise transfer the shares. You should note, however,
that, while the shares would thus be free of the restrictions imposed during the
Restricted Period, your ability to sell or pledge the shares may be limited
under the federal securities laws or corporate policy.

You have the right to designate a beneficiary (or beneficiaries) to receive your
shares in exchange for your RSUs and cash in respect of the Accrued Dividend
Equivalents in the event of your death during the Restricted Period by
completing a beneficiary designation form available at
http://www.benefitaccess.com and returning it to the Vice President of Total
Rewards and Performance Management at the address below.

If, at your death, a completed beneficiary designation form is not on file at
the Vice President of Total Rewards and Performance Management (or if your
designated beneficiary predeceases you), the Stock and cash payment for the
Accrued Dividend Equivalents in respect of your RSUs will be transferred to your
estate.

RESTRICTED PERIOD, FORFEITURE

The vesting of the RSUs awarded under this Award Agreement along with the
Accrued Dividend Equivalents is subject to satisfaction of a performance goal as
well as your acceptance of this Award Agreement by May 31, 2012 and your
continuous employment with the Corporation from the Award Date until January 30,
2015 (the “Restricted Period”). If any of these requirements are not satisfied,
you may forfeit all or part of your RSUs. Upon forfeiture, you will no longer
have the right to receive Stock for forfeited RSUs or to receive cash payments
for the Accrued Dividend Equivalents.

1. Performance Goal

At its first meeting after the Corporation finalizes the financial results for
the year ending December 31, 2012, the Committee will multiply the number of
RSUs awarded to you under this Award Agreement by the Fair Market Value of Stock
on the Award Date ($[        ]) (“RSU Award Value”). The Committee will then
compare your RSU Award Value to the product of 0.20% and the Corporation’s Cash
Flow for the year ending December 31, 2012 (with the product being referred to
as the “RSU Performance Goal”). If your RSU Award Value exceeds your RSU
Performance Goal (with the amount of that excess referred to as the “Performance
Shortfall”) then you will forfeit the number of whole RSUs that are equal to the
Performance Shortfall divided by the Fair Market Value of Stock on the Award
Date ($[        ]).

For purposes of this Award Agreement, Cash Flow for any period means net cash
flow from operations but not taking into account: (i) the aggregate difference
between the amount forecasted in the Corporation’s 2012 Long Range Plan to be
contributed by the Corporation to the Corporation’s defined benefit pension
plans during the period and the actual amounts

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Award Date: January 30, 2012

Page 4

 

contributed by the Corporation during the period; and (ii) any tax payments or
tax benefits during the period associated with the divestiture of business
units, other than tax payments or tax benefits that were included in the
Corporation’s 2012 Long Range Plan. Cash Flow shall be determined by the
Committee based upon the comparable numbers reported on the Corporation’s
audited consolidated financial statements or, if audited financial statements
are not available for the period for which Cash Flow is being determined, the
Committee shall determine Cash Flow in a manner consistent with the historical
practices used by the Corporation in determining net cash provided by operating
activities as reported in its audited consolidated statement of cash flows, in
either case as modified by this paragraph.

2. Employment Requirement

Regardless of the satisfaction of the RSU Performance Goal, all of your RSUs
will be forfeited and all of your rights to the RSUs and to receive Stock for
your RSUs and to receive cash payment for the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation unless you
personally accept this Award Agreement as provided below by May 31, 2012 and
continue to provide services to the Corporation as an Employee of the
Corporation until the expiration or termination of the Restricted Period, which
will occur on January 30, 2015, subject only to the specific exceptions provided
below.

DEATH, DISABILITY, LAYOFF, RETIREMENT

1. Death and Disability

Your RSUs and the Accrued Dividend Equivalents will immediately vest and no
longer be subject to the continuing employment requirement or the potential
forfeiture to the extent of a Performance Shortfall if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

The vested RSUs will be exchanged for shares of Stock, and the Accrued Dividend
Equivalents will be paid in cash as soon as practicable, but no later than
ninety (90) days after the date of your termination of employment on account of
death or total disability, and in no event later than the March 15 next
following the year in which such termination occurs.

In the event that you die and have not properly acknowledged acceptance of the
Award prior to your death (or by May 31, 2012, whichever comes first), you will
forfeit all of your RSUs granted hereunder and all of your rights to the RSUs
and to receive Stock for your RSUs and the Accrued Dividend Equivalents will
cease without further obligation on the part of the Corporation.

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Award Date: January 30, 2012

Page 5

 

2. Retirement, Lay Off

If you retire or are laid off with an effective date before January 30, 2013,
you will forfeit all of your RSUs and the Accrued Dividend Equivalents in
accordance with the general rule requiring continuous employment during the
Restricted Period. If you retire or are laid off with an effective date on or
after January 30, 2013, your RSUs and the Accrued Dividend Equivalents will
continue to be subject to forfeiture to the extent of any Performance Shortfall
certified by the Committee prior to, on or after such date; however, subject to
any Performance Shortfall that may occur, the Restricted Period will end for a
portion of your RSUs and the Accrued Dividend Equivalents and you will vest in a
portion of your RSUs and the Accrued Dividend Equivalents as follows:

 

  (i) you will vest in one third (1/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that one-third) if your retirement or
layoff is effective on or after the first anniversary of the Award Date (January
30, 2013), but before the second anniversary of the Award Date (January 30,
2014); and

 

  (ii) you will vest in two thirds (2/3) of your RSUs (and the related Accrued
Dividend Equivalents associated with that two-thirds) if your retirement or
layoff is effective on or after the second anniversary of the Award Date
(January 30, 2014) but before the third anniversary of the Award Date (January
30, 2015).

Notwithstanding the foregoing, your RSUs will not be considered vested until
such time as the Committee makes its certification with respect to the RSU
Performance Goal. The vested RSUs will be exchanged for shares of Stock, and the
related Accrued Dividend Equivalents associated with the vested portion of your
RSUs will be paid in cash as soon as practicable, but no later than ninety
(90) days after the later of the Committee’s certification or your retirement or
layoff, and in no event later than the March 15 next following the year in which
you retire or are laid off. You will forfeit your remaining RSUs and the related
Accrued Dividend Equivalents associated with forfeited RSUs on the effective
date of your retirement or layoff.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

RESIGNATION OR TERMINATION WITH OR WITHOUT CAUSE

If you resign or your employment otherwise terminates before January 30, 2015,
other than on account of death, disability, layoff, or retirement (or
Divestiture or Change in Control as described below) whether voluntarily or by
action of the Corporation and in the latter case whether with or without
“cause,” you will forfeit your RSUs and the related Accrued Dividend Equivalents
on the date of your termination.

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Award Date: January 30, 2012

Page 6

 

DIVESTITURE

If the Corporation divests (as defined below) all or substantially all of a
business operation of the Corporation and such divestiture results in the
termination of your employment with the Corporation or its subsidiaries and the
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Subject to any Performance Shortfall, your
RSUs and the Accrued Dividend Equivalents will vest immediately (or following
the Committee’s determination of any Performance Shortfall, if later) and you
will receive shares of Stock in exchange for RSUs and the cash payment for the
Accrued Dividend Equivalents as soon as practicable, but no later than the later
of ninety (90) days after your termination of employment with the Corporation or
the determination by the Committee of any Performance Shortfall, and in no event
later than the March 15 next following the year in which your employment
terminates. For the purposes of this provision, the term “divestiture” shall
mean a transaction which results in the transfer of control of the business
operation divested to any person, corporation, association, partnership, joint
venture, limited liability company or other business entity of which less than
50% of the voting stock or other equity interests (in the case of entities other
than corporations), is owned or controlled directly or indirectly by the
Corporation, by one or more of the Corporation’s subsidiaries or by a
combination thereof.

CHANGE IN CONTROL

In the event your employment is terminated by the Corporation (or its successor)
following a Change in Control, your RSUs and the Accrued Dividend Equivalents
will vest and the Restricted Period shall terminate on the date of your
termination following the Change in Control. You will vest in your entire Award
(including any Accrued Dividend Equivalents) under this Award Agreement and
without regard to any forfeiture that might otherwise occur because of a
Performance Shortfall.

CHANGES IN CAPITALIZATION

In the event of a stock split, stock dividend or other similar action resulting
in additional shares of Stock being issued to existing stockholders during the
Restricted Period or in the event of a reverse stock split resulting in a
contraction in the number of shares outstanding during the Restricted Period,
the number of your RSUs will be adjusted in the same manner as if you held
actual shares of Stock.

TIMING OF TAXATION AND WITHHOLDING

Upon the expiration or termination of the Restricted Period, the Fair Market
Value of the Stock deliverable to you in respect of the RSUs will be taxable to
you as compensation income, based on the Fair Market Value of Stock on the day
the Stock is deliverable to you. We will withhold federal, state, and local
income taxes at the minimum rate prescribed by law.

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Award Date: January 30, 2012

Page 7

 

Therefore, you may owe taxes relating to the RSUs in addition to the amount
withheld by the Corporation. FICA tax withholding also will apply except to the
extent FICA taxes have already been collected in the case of retirement-eligible
employees as described below.

Your tax basis in shares of Stock delivered to you in respect of the RSUs will
be equal to the Fair Market Value of such shares on the day the Stock is
deliverable to you. Your holding period for purposes of determining long-term
capital gain or loss treatment on any subsequent sale of such Stock will begin
on that day.

Any cash paid to you as Accrued Dividend Equivalents will be taxable to you as
compensation income in the year paid and subject to withholding of federal,
state and local income taxes, and FICA taxes. The Corporation will withhold
taxes on the Accrued Dividend Equivalents by reducing the cash payable to you,
except to the extent FICA taxes have already been collected in the case of
retirement-eligible employees as described below. The Corporation may elect to
apply all or part of the Accrued Dividend Equivalents to tax withholding on the
Stock, in which case you may not receive any cash for the Accrued Dividend
Equivalents.

Unless you deliver cash to the Corporation to satisfy any withholding tax on
Stock deliverable to you in respect of vested RSUs in accordance with procedures
established in advance by the Corporation’s Senior Vice President of Human
Resources, you will be deemed to have automatically elected to pay any
withholding tax (net of any Accrued Dividend Equivalents applied to withholding)
on Stock deliverable to you by means of the Corporation reducing the number of
shares of Stock deliverable to you in respect of vested RSUs, based upon the
minimum rate of withholding prescribed by law.

In the event you are or become eligible for retirement during the Restricted
Period, a portion of your Award will become subject to FICA taxes prior to the
termination of the Restricted Period. FICA taxes will be withheld with respect
to the number of RSUs on which the Restricted Period would terminate if you were
to retire. The FICA tax will also apply to any Accrued Dividend Equivalents
related to the portion of your RSUs subject to FICA. As an administrative
practice in accordance with IRS regulations, the Corporation generally will
delay application of these FICA taxes on retirement-eligible participants until
December of the year of withholding (or when the Stock is deliverable, if
earlier). FICA taxes will be computed based upon the Fair Market Value of the
Stock and the Accrued Dividend Equivalents on the date of withholding. For
example, if you are eligible to retire during the Restricted Period, then you
would become subject to FICA taxes on the later of the first anniversary of the
Award Date or the date that you become retirement eligible, and FICA taxes would
be withheld even though Stock and the Accrued Dividend Equivalents would not be
deliverable to you until the close of the Restricted Period. The Corporation
will withhold such FICA tax from your regular wages or MICP payment. The
Corporation may collect the FICA withholding from you either shortly before or
after the date it is due and in the case of Insiders may require delivery of a
check to satisfy any shortfall in the withholding.

If Code Section 409A(a)(2)(B)(i) applies because you are a specified employee
receiving Stock on account of a termination of employment or if you are an
Insider, your Stock and the

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Award Date: January 30, 2012

Page 8

 

Accrued Dividend Equivalents may not be deliverable to you for six months
following such date of termination and, accordingly, the Fair Market Value of
the Stock on the date on which the Stock is deliverable to you and the Accrued
Dividend Equivalents (accrued through the date the Stock becomes deliverable to
you) shall be used for purposes of determining your compensation income.

AMENDMENT AND TERMINATION OF PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

By executing this Award Agreement, you consent to receive copies of the
Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

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Award Date: January 30, 2012

Page 9

 

If you do not personally acknowledge your acceptance of this Award Agreement on
or before May 31, 2012, this Award will be forfeited as noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements.

MISCELLANEOUS

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. Neither the value of the RSUs awarded to you nor the Accrued Dividend
Equivalents will be taken into account for other benefits offered by the
Corporation, including but not limited to pension benefits. Notwithstanding any
other provision of this Award Agreement to the contrary, no Stock will be issued
to you within six months from the Award Date.

Transactions involving Stock delivered under this Award Agreement are subject to
the securities laws and CPS 722. Among other things, CPS 722 prohibits employees
of the Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving Stock or RSUs.

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Award Date: January 30, 2012

Page 10

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management Development and

Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Award Date: January 30, 2012

Page 11

 

Exhibit A

Post Employment Conduct Agreement

(RSU Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of restricted stock units to me under the Award Agreement (the “RSUs”) pursuant
to the Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the
“Plan”). References to the “Corporation” shall include Lockheed Martin
Corporation and its Subsidiaries. By accepting the RSUs, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the
Management Development and Compensation Committee of the Board of Directors of
the Corporation, during the two-year period following the date of my termination
of employment (the “Termination Date”) with the Corporation, I will not,
directly or indirectly, be employed by, provide services to, or advise a
“Restricted Company” (as defined in Section 6 below), whether as an employee,
advisor, director, officer, partner or consultant, or in any other position,
function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, during the two-year period following the Termination Date, I will
not (i) interfere with any contractual relationship between the Corporation and
any customer, supplier, distributor or manufacturer of or to the Corporation to
the detriment of the Corporation or (ii) induce or attempt to induce any person
who is an employee of the Corporation to perform work or services for any entity
other than the Corporation.

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Award Date: January 30, 2012

Page 12

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

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Award Date: January 30, 2012

Page 13

 

(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the RSUs is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii)

The Corporation determines that I engaged in fraud, bribery or any other illegal
act or that my intentional misconduct or gross negligence (including the failure
to report the acts of another person of which I

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Award Date: January 30, 2012

Page 14

 

  had knowledge during the period I was employed by the Corporation) contributed
to another person’s fraud, bribery or other illegal act, which in any such case
adversely affected the Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the RSUs and continue to own the shares of Common
Stock of the Corporation issued or issuable in respect of the RSUs, the shares
of Common Stock so acquired; (ii) to the extent I have earned any of the RSUs
and no longer own the shares of Common Stock of the Corporation issued or
issuable in respect of the RSUs, cash in an amount equal to the fair market
value of such shares on the date of the event set forth in Section 3(a) (which,
unless otherwise determined by the Management Development and Compensation
Committee of the Board of Directors of the Corporation, shall be equal to the
closing price of the shares of Common Stock as finally reported by the New York
Stock Exchange on such date), and (iii) to the extent I have not earned the RSUs
fully, all of my remaining rights, title or interest in the RSUs.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

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Award Date: January 30, 2012

Page 15

 

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the RSUs to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

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Award Date: January 30, 2012

Page 16

 

This PECA is effective as of the acceptance by me of the award of RSUs under the
Award Agreement and is not contingent on the vesting of my RSUs.

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Award Date: January 30, 2012

Page 17

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple Chief Executive Officer    6 times President/Chief
Operating Officer    5 times Chief Financial Officer    4 times Business Area
Executive Vice Presidents    3 times Corporate Senior Vice Presidents    2 times
Other Elected Officers    2 times All Other Vice Presidents    1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

Stock Option Int’l (nonperformance)

 

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Optionee:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award.

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

EXERCISE PRICE

The exercise price of the Options granted hereunder is $         per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

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Grant Date: January 30, 2012

Page 2

 

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture. Subject to certain special rules discussed below, you must remain
in the employ of the Corporation until the applicable date of vesting. The
vesting schedule for your Options is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff - If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff in accordance with the general rule
set forth above under the title “Vesting, Expiration and Forfeiture,” requiring
continuous employment. Your vested Options will be exercisable until January 28,
2022 at which time any unexercised Options will expire and may no longer be
exercised.

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

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Grant Date: January 30, 2012

Page 3

 

Death or Disability - Your Options will immediately vest and no longer be
subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your unvested Options as though you had remained in the employ of the
Corporation. Your vested Options will be exercisable until a revised expiration
date which is the first to occur of (i) the fifth anniversary of the effective
date of the divestiture; or (ii) the original expiration date (“Revised
Expiration Date”). If you die following divestiture but prior to the Revised
Expiration Date, all unvested Options will immediately vest as of the date of
death and be exercisable by your beneficiary until the Revised Expiration Date.
For the purposes of this provision, the term “divestiture” shall mean a
transaction which results in the transfer of control of the business operation
divested to any person, corporation, association, partnership, joint venture or
other business entity of which less than 50% of the voting stock or other equity
interests (in the case of entities other than corporations) is owned or
controlled directly or indirectly, by the Corporation, one or more of the
Corporation’s subsidiaries or by a combination thereof.

Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

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Grant Date: January 30, 2012

Page 4

 

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable laws, rules
or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay taxes with Stock, you
need not have owned the shares tendered for at least six months. Payment must be
made at the time of exercise. To the extent that cash is not tendered, the
Corporation will retain from the shares of Stock that you would otherwise
receive upon exercise of the Option that number of shares sufficient to satisfy
the withholding obligation. If Stock is tendered or is deemed to have been
tendered, it will be valued at its Fair Market Value.

You agree to make appropriate arrangements with the Corporation for the
satisfaction of all income and employment tax withholding requirements as well
as social insurance contributions applicable to the Option exercise or the
disposition of any Stock acquired upon exercise (“Option Taxes”). In this
regard, you authorize the Corporation to withhold all Option Taxes legally
payable by you from your wages or other cash compensation paid to you by the
Corporation or, if permissible under applicable legal requirements, from
proceeds from the sale of Stock acquired upon exercise of the Option in an
amount sufficient to cover the Option Taxes.

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Grant Date: January 30, 2012

Page 5

 

You acknowledge and agree that the Corporation may refuse to honor the exercise
and refuse to deliver Stock if such withholding amounts are not delivered at the
time of exercise. To the extent that the amounts withheld by the Corporation are
insufficient to satisfy the Option Taxes, you shall pay to the Corporation any
additional amount of the Option Taxes that may be required to be withheld as a
result of your participation in the Plan. You acknowledge and agree that
withholding obligations may change from time to time as laws or their
interpretations change, and regardless of the Corporation’s actions with respect
to the Option Taxes, the ultimate liability for any and all Option Taxes is and
shall remain your responsibility, and that the Corporation (a) makes no
representation or undertaking regarding the treatment of any Option Taxes in
connection with any aspect of the grant of the Option, including the grant or
exercise of the Option and the subsequent sale of Stock acquired under the Plan;
and (b) does not commit to structure the terms of the grant or any aspect of the
Option to reduce or eliminate your liability for Option Taxes. You acknowledge
that you may not exercise this Option unless the tax withholding obligations of
the Corporation are satisfied.

You understand that you may suffer adverse tax consequences as a result of your
purchase or disposition of the Stock. You represent that you will consult with
your own tax advisors in connection with the purchase or disposition of the
Stock and that you are not relying on the Corporation for any tax advice.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

DATA PRIVACY CONSENT

You hereby explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of your personal data as described in
this Award Agreement by and among the Corporation for the exclusive purpose of
implementing, administering and managing your participation in the Plan.

You understand that the Corporation holds certain personal information about
you, including, but not limited to, your name, home address and telephone
number, date of birth, social insurance number or other identification number,
salary, nationality, job title, any shares or directorships held in the
Corporation, details of all awards or any other entitlement to shares awarded,
canceled, exercised, vested, unvested or outstanding in your favor, for the
purpose of implementing, administering and managing the Plan (“Data”). You
understand that Data may be transferred to any third parties assisting in the
implementation, administration and management

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 6

 

of the Plan, that these recipients may be located in your country or elsewhere,
and that the recipient’s country may have different data privacy laws and
protections than your country. You understand that you may request a list with
the names and addresses of any potential recipients of the Data by contacting
your local human resources representative. You authorize the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing your
participation in the Plan, including any requisite transfer of such Data as may
be required to a broker or other third party with whom the Corporation may elect
to administer the settlement of any award. You understand that Data will be held
only as long as is necessary to implement, administer and manage your
participation in the Plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data or refuse or withdraw the consents herein, in
any case without cost, by contacting in writing your local human resources
representative. You understand, however, that refusing or withdrawing your
consent may affect your ability to participate in the Plan. For more information
on the consequences of your refusal to consent or withdrawal of consent, you
understand that you may contact your local human resources representative.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 7

 

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

EMPLOYEE ACKNOWLEDGMENT

You acknowledge and agree as follows:

(a) the Plan is discretionary in nature and that the Committee may amend,
suspend, or terminate it at any time;

(b) the grant of Options is voluntary and occasional and does not create any
contractual or other right to receive future grants of any Options, or benefits
in lieu of any Options even if Options have been granted repeatedly in the past;

(c) all determinations with respect to such future Options, if any, including
but not limited to the times when Options shall be granted or when Options shall
vest, will be at the sole discretion of the Committee;

(d) your participation in the Plan is voluntary;

(e) the value of Options is an extraordinary item of compensation, which is
outside the scope of your employment contract (if any), except as may otherwise
be explicitly provided in your employment contract;

(f) the Options are not part of normal or expected compensation or salary for
any purpose, including, but not limited to, calculating termination, severance,
resignation, redundancy, end of service, or similar payments, or bonuses,
long-service awards, pension or retirement benefits;

(g) the Options shall expire upon termination of your employment for any reason
except as may otherwise be explicitly provided in the Plan and this Award
Agreement;

(h) the future value of the shares is unknown and cannot be predicted with
certainty; and

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 8

 

(i) no claim or entitlement to compensation or damages arises from the
termination of the Options or diminution in value of the Options or Stock and
you irrevocably release the Corporation and your employer from any such claim
that may arise.

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to U.S. securities laws and CPS 722. Among
other things, CPS 722 prohibits employees of the Corporation from engaging in
transactions that violate U.S. securities laws or involve hedging or pledging
stock. Insiders are subject to additional restrictions. The Corporation
recommends that Insiders consult with the Senior Vice President, General Counsel
and Corporate Secretary or her staff before entering into any transactions
involving Stock or Options.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 9

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

--------------------------------------------------------------------------------

Stock Option PECA CEO (nonperformance)

 

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Optionee:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award and
your agreement to be bound by the restrictions contained in Exhibit A
(“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 2

 

EXERCISE PRICE

The exercise price of the Options granted hereunder is $         per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture. Subject to certain special rules discussed below, you must remain
in the employ of the Corporation until the applicable date of vesting. The
vesting schedule for your Options is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff - If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff in accordance with the general rule
set forth above under the title “Vesting, Expiration and Forfeiture,” requiring
continuous employment. Your vested Options will be exercisable until January 28,
2022 at which time any unexercised Options will expire and may no longer be
exercised.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 3

 

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

Death or Disability - Your Options will immediately vest and no longer be
subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your unvested Options as though you had remained in the employ of the
Corporation. Your vested Options will be exercisable until a revised expiration
date which is the first to occur of (i) the fifth anniversary of the effective
date of the divestiture; or (ii) the original expiration date (“Revised
Expiration Date”). If you die following divestiture but prior to the Revised
Expiration Date, all unvested Options will immediately vest as of the date of
death and be exercisable by your beneficiary until the Revised Expiration Date.
For the purposes of this provision, the term “divestiture” shall mean a
transaction which results in the transfer of control of the business operation
divested to any person, corporation, association, partnership, joint venture or
other business entity of which less than 50% of the voting stock or other equity
interests (in the case of entities other than corporations) is owned or
controlled directly or indirectly, by the Corporation, one or more of the
Corporation’s subsidiaries or by a combination thereof.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 4

 

Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable federal or
state law, rules or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay withholding taxes with
Stock, you need not have owned the shares tendered for at least six months.
Payment must be made at the time of exercise. To the extent that cash is not
tendered, the Corporation will retain from the shares of Stock that you would
otherwise receive upon exercise of the Option that number of shares sufficient
to satisfy the withholding obligation. If Stock is tendered or is deemed to have
been tendered, it will be valued at its Fair Market Value.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 5

 

Withholding will be at the minimum rate prescribed by law. Therefore, you may
owe taxes relating to the exercise in addition to the amount withheld by the
Corporation. If you desire, you may request that tax be withheld at greater than
the minimum rate.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 6

 

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 7

 

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to the securities laws and CPS 722. Among other
things, CPS 722 prohibits employees of the Corporation from engaging in
transactions that violate securities laws or involve hedging or pledging stock.
Insiders are subject to additional restrictions. The Corporation recommends that
Insiders consult with the Senior Vice President, General Counsel and Corporate
Secretary or her staff before entering into any transactions involving Stock or
Options.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 8

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 9

 

Exhibit A

Post Employment Conduct Agreement

(Stock Option Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with a Grant Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of stock options to me under the Award Agreement (the “Options”) pursuant to the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”).
References to the “Corporation” shall include Lockheed Martin Corporation and
its Subsidiaries. By accepting the Options, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the Chief
Executive Officer of the Corporation, during the two-year period following the
date of my termination of employment (the “Termination Date”) with the
Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Chief Executive
Officer of the Corporation, during the two-year period following the Termination
Date, I will not (i) interfere with any contractual relationship between the
Corporation and any customer, supplier, distributor or manufacturer of or to the
Corporation to the detriment of the Corporation or (ii) induce or attempt to
induce any person who is an employee of the Corporation to perform work or
services for any entity other than the Corporation.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 10

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 11

 

(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the Options is expressly made contingent
upon my agreements with the Corporation set forth in this PECA. I acknowledge
that the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

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Grant Date: January 30, 2012

Page 12

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have exercised any of the Options and continue to own the shares of
Common Stock of the Corporation issued or issuable upon exercise of the Options,
the shares of Common Stock so acquired upon exercise; (ii) to the extent I have
exercised any of the Options and no longer own the shares of Common Stock of the
Corporation issued or issuable upon exercise of the Options, cash in an amount
equal to the fair market value of such shares on the date of the event set forth
in Section 3(a) (which, unless otherwise determined by the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, shall be equal to the closing price of the shares of Common Stock
as finally reported by the New York Stock Exchange on such date), and (iii) to
the extent I have not exercised the Options fully, all of my remaining rights,
title or interest in the Options.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

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Grant Date: January 30, 2012

Page 13

 

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the Options to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

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Grant Date: January 30, 2012

Page 14

 

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of Options under
the Award Agreement and is not contingent on the vesting of the Options.

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Grant Date: January 30, 2012

Page 15

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

Stock Option PECA SVPHR (nonperformance)

 

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Optionee:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award and
your agreement to be bound by the restrictions contained in Exhibit A
(“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

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Grant Date: January 30, 2012

Page 2

 

EXERCISE PRICE

The exercise price of the Options granted hereunder is $         per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture. Subject to certain special rules discussed below, you must remain
in the employ of the Corporation until the applicable date of vesting. The
vesting schedule for your Options is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff- If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff in accordance with the general rule
set forth above under the title “Vesting, Expiration and Forfeiture,” requiring
continuous employment. Your vested Options will be exercisable until
January 28, 2022 at which time any unexercised Options will expire and may no
longer be exercised.

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Grant Date: January 30, 2012

Page 3

 

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

Death or Disability - Your Options will immediately vest and no longer be
subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your unvested Options as though you had remained in the employ of the
Corporation. Your vested Options will be exercisable until a revised expiration
date which is the first to occur of (i) the fifth anniversary of the effective
date of the divestiture; or (ii) the original expiration date (“Revised
Expiration Date”). If you die following divestiture but prior to the Revised
Expiration Date, all unvested Options will immediately vest as of the date of
death and be exercisable by your beneficiary until the Revised Expiration Date.
For the purposes of this provision, the term “divestiture” shall mean a
transaction which results in the transfer of control of the business operation
divested to any person, corporation, association, partnership, joint venture or
other business entity of which less than 50% of the voting stock or other equity
interests (in the case of entities other than corporations) is owned or
controlled directly or indirectly, by the Corporation, one or more of the
Corporation’s subsidiaries or by a combination thereof.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 4

 

Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable federal or
state law, rules or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay withholding taxes with
Stock, you need not have owned the shares tendered for at least six months.
Payment must be made at the time of exercise. To the extent that cash is not
tendered, the Corporation will retain from the shares of Stock that you would
otherwise receive upon exercise of the Option that number of shares sufficient
to satisfy the withholding obligation. If Stock is tendered or is deemed to have
been tendered, it will be valued at its Fair Market Value.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 5

 

Withholding will be at the minimum rate prescribed by law. Therefore, you may
owe taxes relating to the exercise in addition to the amount withheld by the
Corporation. If you desire, you may request that tax be withheld at greater than
the minimum rate.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

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Grant Date: January 30, 2012

Page 6

 

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

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Grant Date: January 30, 2012

Page 7

 

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to the securities laws and CPS 722. Among other
things, CPS 722 prohibits employees of the Corporation from engaging in
transactions that violate securities laws or involve hedging or pledging stock.
Insiders are subject to additional restrictions. The Corporation recommends that
Insiders consult with the Senior Vice President, General Counsel and Corporate
Secretary or her staff before entering into any transactions involving Stock or
Options.

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Grant Date: January 30, 2012

Page 8

 

Exhibit A

Post Employment Conduct Agreement

(Stock Option Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with a Grant Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of stock options to me under the Award Agreement (the “Options”) pursuant to the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”).
References to the “Corporation” shall include Lockheed Martin Corporation and
its Subsidiaries. By accepting the Options, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the Senior
Vice President, Human Resources of the Corporation, during the one-year period
following the date of my termination of employment (the “Termination Date”) with
the Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not (i) interfere with any contractual
relationship between the Corporation and any customer, supplier, distributor or
manufacturer of or to the Corporation to the detriment of the Corporation or
(ii) induce or attempt to induce any person who is an employee of the
Corporation to perform work or services for any entity other than the
Corporation.

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Grant Date: January 30, 2012

Page 9

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

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Grant Date: January 30, 2012

Page 10

 

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the Options is expressly made contingent
upon my agreements with the Corporation set forth in this PECA. I acknowledge
that the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

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Grant Date: January 30, 2012

Page 11

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have exercised any of the Options and continue to own the shares of
Common Stock of the Corporation issued or issuable upon exercise of the Options,
the shares of Common Stock so acquired upon exercise; (ii) to the extent I have
exercised any of the Options and no longer own the shares of Common Stock of the
Corporation issued or issuable upon exercise of the Options, cash in an amount
equal to the fair market value of such shares on the date of the event set forth
in Section 3(a) (which, unless otherwise determined by the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, shall be equal to the closing price of the shares of Common Stock
as finally reported by the New York Stock Exchange on such date), and (iii) to
the extent I have not exercised the Options fully, all of my remaining rights,
title or interest in the Options.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 12

 

deemed amended to delete the portion adjudicated to be invalid or unenforceable,
such deletion to apply only with respect to the operation of this provision in
the particular jurisdiction in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the Options to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

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Grant Date: January 30, 2012

Page 13

 

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of Options under
the Award Agreement and is not contingent on the vesting of the Options.

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Grant Date: January 30, 2012

Page 14

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

  

Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

Stock Option CA PECA CEO (nonperformance)

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Optionee:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award and
your agreement to be bound by the restrictions contained in Exhibit A
(“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

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Grant Date: January 30, 2012

Page 2

 

EXERCISE PRICE

The exercise price of the Options granted hereunder is $         per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture. Subject to certain special rules discussed below, you must remain
in the employ of the Corporation until the applicable date of vesting. The
vesting schedule for your Options is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff - If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff in accordance with the general rule
set forth above under the title “Vesting, Expiration and Forfeiture,” requiring
continuous employment. Your vested Options will be exercisable until January 28,
2022 at which time any unexercised Options will expire and may no longer be
exercised.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 3

 

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

Death or Disability - Your Options will immediately vest and no longer be
subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your unvested Options as though you had remained in the employ of the
Corporation. Your vested Options will be exercisable until a revised expiration
date which is the first to occur of (i) the fifth anniversary of the effective
date of the divestiture; or (ii) the original expiration date (“Revised
Expiration Date”). If you die following divestiture but prior to the Revised
Expiration Date, all unvested Options will immediately vest as of the date of
death and be exercisable by your beneficiary until the Revised Expiration Date.
For the purposes of this provision, the term “divestiture” shall mean a
transaction which results in the transfer of control of the business operation
divested to any person, corporation, association, partnership, joint venture or
other business entity of which less than 50% of the voting stock or other equity
interests (in the case of entities other than corporations) is owned or
controlled directly or indirectly, by the Corporation, one or more of the
Corporation’s subsidiaries or by a combination thereof.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 4

 

Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable federal or
state law, rules or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay withholding taxes with
Stock, you need not have owned the shares tendered for at least six months.
Payment must be made at the time of exercise. To the extent that cash is not
tendered, the Corporation will retain from the shares of Stock that you would
otherwise receive upon exercise of the Option that number of shares sufficient
to satisfy the withholding obligation. If Stock is tendered or is deemed to have
been tendered, it will be valued at its Fair Market Value.

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Grant Date: January 30, 2012

Page 5

 

Withholding will be at the minimum rate prescribed by law. Therefore, you may
owe taxes relating to the exercise in addition to the amount withheld by the
Corporation. If you desire, you may request that tax be withheld at greater than
the minimum rate.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 6

 

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 7

 

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to the securities laws and CPS 722. Among other
things, CPS 722 prohibits employees of the Corporation from engaging in
transactions that violate securities laws or involve hedging or pledging stock.
Insiders are subject to additional restrictions. The Corporation recommends that
Insiders consult with the Senior Vice President, General Counsel and Corporate
Secretary or her staff before entering into any transactions involving Stock or
Options.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 8

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management Development and Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

     

 

Signature       Date

 

     

 

Print Name       Employee ID

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Grant Date: January 30, 2012

Page 9

 

Exhibit A

Post Employment Conduct Agreement

(Stock Option Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with a Grant Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of stock options to me under the Award Agreement (the “Options”) pursuant to the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”).
References to the “Corporation” shall include Lockheed Martin Corporation and
its Subsidiaries. By accepting the Options, I agree as follows:

1. Protective Covenants

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

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Grant Date: January 30, 2012

Page 10

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes, or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit - Without the express written consent of the Chief Executive
Officer of the Corporation, during the two-year period following the Termination
Date, I will not induce or attempt to induce any person who is an employee of
the Corporation to perform work or services for any entity other than the
Corporation. This provision does not prevent the hiring of such persons so long
as they are not induced to be one employed in violation of this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the Options is expressly made contingent
upon my agreements with the Corporation set forth in this PECA. I acknowledge
that the scope and duration of the restrictions in Section 1 are necessary to be

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 11

 

effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have exercised any of the Options and continue to own the shares of
Common Stock of the Corporation issued or issuable upon exercise of the Options,
the shares of Common Stock so acquired upon exercise; (ii) to the extent I have
exercised any of the Options and no longer own

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 12

 

the shares of Common Stock of the Corporation issued or issuable upon exercise
of the Options, cash in an amount equal to the fair market value of such shares
on the date of the event set forth in Section 3(a) (which, unless otherwise
determined by the Management Development and Compensation Committee of the Board
of Directors of the Corporation, shall be equal to the closing price of the
shares of Common Stock as finally reported by the New York Stock Exchange on
such date), and (iii) to the extent I have not exercised the Options fully, all
of my remaining rights, title or interest in the Options.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the Options to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of Options under
the Award Agreement and is not contingent on the vesting of the Options.

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Grant Date: January 30, 2012

Page 13

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

Stock Option CA PECA SVPHR (nonperformance)

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Optionee:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award and
your agreement to be bound by the restrictions contained in Exhibit A
(“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

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Grant Date: January 30, 2012

Page 2

 

EXERCISE PRICE

The exercise price of the Options granted hereunder is $        per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture. Subject to certain special rules discussed below, you must remain
in the employ of the Corporation until the applicable date of vesting. The
vesting schedule for your Options is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff - If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff in accordance with the general rule
set forth above under the title “Vesting, Expiration and Forfeiture,” requiring
continuous employment. Your vested Options will be exercisable until January 28,
2022 at which time any unexercised Options will expire and may no longer be
exercised.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 3

 

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

Death or Disability - Your Options will immediately vest and no longer be
subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your unvested Options as though you had remained in the employ of the
Corporation. Your vested Options will be exercisable until a revised expiration
date which is the first to occur of (i) the fifth anniversary of the effective
date of the divestiture; or (ii) the original expiration date (“Revised
Expiration Date”). If you die following divestiture but prior to the Revised
Expiration Date, all unvested Options will immediately vest as of the date of
death and be exercisable by your beneficiary until the Revised Expiration Date.
For the purposes of this provision, the term “divestiture” shall mean a
transaction which results in the transfer of control of the business operation
divested to any person, corporation, association, partnership, joint venture or
other business entity of which less than 50% of the voting stock or other equity
interests (in the case of entities other than corporations) is owned or
controlled directly or indirectly, by the Corporation, one or more of the
Corporation’s subsidiaries or by a combination thereof.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 4

 

Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable federal or
state law, rules or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay withholding taxes with
Stock, you need not have owned the shares tendered for at least six months.
Payment must be made at the time of exercise. To the extent that cash is not
tendered, the Corporation will retain from the shares of Stock that you would
otherwise receive upon exercise of the Option that number of shares sufficient
to satisfy the withholding obligation. If Stock is tendered or is deemed to have
been tendered, it will be valued at its Fair Market Value.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 5

 

Withholding will be at the minimum rate prescribed by law. Therefore, you may
owe taxes relating to the exercise in addition to the amount withheld by the
Corporation. If you desire, you may request that tax be withheld at greater than
the minimum rate.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

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Grant Date: January 30, 2012

Page 6

 

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

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Grant Date: January 30, 2012

Page 7

 

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to the securities laws and CPS 722. Among other
things, CPS 722 prohibits employees of the Corporation from engaging in
transactions that violate securities laws or involve hedging or pledging stock.
Insiders are subject to additional restrictions. The Corporation recommends that
Insiders consult with the Senior Vice President, General Counsel and Corporate
Secretary or her staff before entering into any transactions involving Stock or
Options.

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely,

David Filomeo

(On behalf of the Management

Development and

Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Grant Date: January 30, 2012

Page 8

 

Exhibit A

Post Employment Conduct Agreement

(Stock Option Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with a Grant Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of stock options to me under the Award Agreement (the “Options”) pursuant to the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”).
References to the “Corporation” shall include Lockheed Martin Corporation and
its Subsidiaries. By accepting the Options, I agree as follows:

1. Protective Covenants

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 9

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes, or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit - Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not induce or attempt to induce any
person who is an employee of the Corporation to perform work or services for any
entity other than the Corporation. This provision does not prevent the hiring of
such persons so long as they are not induced to be one employed in violation of
this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the Options is

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 10

 

expressly made contingent upon my agreements with the Corporation set forth in
this PECA. I acknowledge that the scope and duration of the restrictions in
Section 1 are necessary to be effective and are fair and reasonable in light of
the value of the benefits and compensation opportunities being made available to
me under the Award Agreement. I further acknowledge and agree that as a result
of the high level executive and management positions I hold with the Corporation
and the access to and extensive knowledge of the Corporation’s Confidential or
Proprietary Information, employees, suppliers and customers, these restrictions
are reasonably required for the protection of the Corporation’s legitimate
business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

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Grant Date: January 30, 2012

Page 11

 

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have exercised any of the Options and continue to own the shares of
Common Stock of the Corporation issued or issuable upon exercise of the Options,
the shares of Common Stock so acquired upon exercise; (ii) to the extent I have
exercised any of the Options and no longer own the shares of Common Stock of the
Corporation issued or issuable upon exercise of the Options, cash in an amount
equal to the fair market value of such shares on the date of the event set forth
in Section 3(a) (which, unless otherwise determined by the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, shall be equal to the closing price of the shares of Common Stock
as finally reported by the New York Stock Exchange on such date), and (iii) to
the extent I have not exercised the Options fully, all of my remaining rights,
title or interest in the Options.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the Options to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 12

 

This PECA is effective as of the acceptance by me of the award of Options under
the Award Agreement and is not contingent on the vesting of the Options.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 13

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

Stock Option PECA Attorney (nonperformance)

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Optionee:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award and
your agreement to be bound by the restrictions contained in Exhibit A
(“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 2

 

EXERCISE PRICE

The exercise price of the Options granted hereunder is $        per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture. Subject to certain special rules discussed below, you must remain
in the employ of the Corporation until the applicable date of vesting. The
vesting schedule for your Options is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff - If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff in accordance with the general rule
set forth above under the title “Vesting, Expiration and Forfeiture,” requiring
continuous employment. Your vested Options will be exercisable until January 28,
2022 at which time any unexercised Options will expire and may no longer be
exercised.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 3

 

For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

Death or Disability - Your Options will immediately vest and no longer be
subject to the continuing employment requirement if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your unvested Options as though you had remained in the employ of the
Corporation. Your vested Options will be exercisable until a revised expiration
date which is the first to occur of (i) the fifth anniversary of the effective
date of the divestiture; or (ii) the original expiration date (“Revised
Expiration Date”). If you die following divestiture but prior to the Revised
Expiration Date, all unvested Options will immediately vest as of the date of
death and be exercisable by your beneficiary until the Revised Expiration Date.
For the purposes of this provision, the term “divestiture” shall mean a
transaction which results in the transfer of control of the business operation
divested to any person, corporation, association, partnership, joint venture or
other business entity of which less than 50% of the voting stock or other equity
interests (in the case of entities other than corporations) is owned or
controlled directly or indirectly, by the Corporation, one or more of the
Corporation’s subsidiaries or by a combination thereof.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 4

 

Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable federal or
state law, rules or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay withholding taxes with
Stock, you need not have owned the shares tendered for at least six months.
Payment must be made at the time of exercise. To the extent that cash is not
tendered, the Corporation will retain from the shares of Stock that you would
otherwise receive upon exercise of the Option that number of shares sufficient
to satisfy the withholding obligation. If Stock is tendered or is deemed to have
been tendered, it will be valued at its Fair Market Value.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 5

 

Withholding will be at the minimum rate prescribed by law. Therefore, you may
owe taxes relating to the exercise in addition to the amount withheld by the
Corporation. If you desire, you may request that tax be withheld at greater than
the minimum rate.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 6

 

Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements. If you are not a Vice President (or above) on January 30, 2012,
but you are promoted to Vice President (or above) prior to January 30, 2015, the
Ownership Requirements shall become applicable to you on the date of your
promotion to Vice President (or above).

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 7

 

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to the securities laws and CPS 722. Among other
things, CPS 722 prohibits employees of the Corporation from engaging in
transactions that violate securities laws or involve hedging or pledging stock.
Insiders are subject to additional restrictions. The Corporation recommends that
Insiders consult with the Senior Vice President, General Counsel and Corporate
Secretary or her staff before entering into any transactions involving Stock or
Options.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 8

 

You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 9

 

Exhibit A

Post Employment Conduct Agreement

(Stock Option Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with a Grant Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of stock options to me under the Award Agreement (the “Options”) pursuant to the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”).
References to the “Corporation” shall include Lockheed Martin Corporation and
its Subsidiaries. By accepting the Options, I agree as follows:

1. Post Termination Activity

(a) Post-employment Activity As a Lawyer – I acknowledge that as counsel to the
Corporation, I owe ethical and fiduciary obligations to the Corporation and that
at least some of these obligations will continue even after the date of my
termination of employment with the Corporation (“Termination Date”). I agree
that after my Termination Date I will comply fully with all applicable ethical
and fiduciary obligations that I owe to the Corporation. To the extent permitted
by applicable law, including but not limited to any applicable rules governing
attorney conduct, I agree that I will not

 

  (i) Represent any client adversely to the Corporation;

 

  (ii) Reveal to any third party any information learned by me during the course
of my employment with the Corporation except for information that is or becomes
generally known;

 

  (iii) Encourage or solicit any present or future agents or employees of the
Corporation to terminate their employment for the purpose of competing with the
Corporation; or

 

  (iv) Whether as a lawyer or non-lawyer, accept a position (whether as agent,
employer, part or sole owner or in any other capacity) with any person or entity
whose interests are adverse to the Corporation’s interests if that adverse
position is related in any way to my present or past work with the Corporation.

(b) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 10

 

(c) Cooperation in Litigation and Investigations—Following the Termination Date,
I will, to the extent reasonably requested, cooperate with the Corporation in
any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the Options is expressly made contingent
upon my agreements with the Corporation set forth in this PECA. I acknowledge
that the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s confidential or proprietary information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies for Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, to the extent permitted by
applicable law, including but not limited to any applicable rules governing
attorney conduct, that upon demand by the Corporation, to forfeit, return or
repay to the Corporation the “Benefits and Proceeds” (as defined below) in the
event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1 (and in the case
of 1(a), the breach occurs prior to the second anniversary of my Termination
Date);

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 11

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have exercised any of the Options and continue to own the shares of
Common Stock of the Corporation issued or issuable upon exercise of the Options,
the shares of Common Stock so acquired upon exercise; (ii) to the extent I have
exercised any of the Options and no longer own the shares of Common Stock of the
Corporation issued or issuable upon exercise of the Options, cash in an amount
equal to the fair market value of such shares on the date of the event set forth
in Section 3(a) (which, unless otherwise determined by the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, shall be equal to the closing price of the shares of Common Stock
as finally reported by the New York Stock Exchange on such date), and (iii) to
the extent I have not exercised the Options fully, all of my remaining rights,
title or interest in the Options.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 12

 

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the Options to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of Options under
the Award Agreement and is not contingent on the vesting of the Options.

--------------------------------------------------------------------------------

Grant Date: January 30, 2012

Page 13

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple Chief Executive Officer    6 times President/Chief
Operating Officer    5 times Chief Financial Officer    4 times Business Area
Executive Vice Presidents    3 times Corporate Senior Vice Presidents    2 times
Other Elected Officers    2 times All Other Vice Presidents    1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

Stock Option PECA RIS MD&CC (performance)

 

Grant Date: January 30, 2012

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933

Dear Mr. Stevens:

The Management Development and Compensation Committee (the “Committee”) of
Lockheed Martin Corporation’s Board of Directors has awarded to you options to
purchase shares of Lockheed Martin Common Stock (“Stock”) under the Lockheed
Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”) and any
rules and procedures adopted by the Committee.

This letter constitutes the Award Agreement for your Options and sets forth some
of the terms and conditions of your Award under the Plan, as determined by the
Committee. Additional terms and conditions are contained in the Plan and in the
Prospectus relating to the Plan of which the Plan document and this Award
Agreement are a part. In the event of a conflict between this letter and the
Plan, the Plan document will control. The Prospectus is available at
http://www.benefitaccess.com.

The term “Options” as used in this Award Agreement refers only to the
nonqualified stock options awarded to you under this Award Agreement. References
to the “Corporation” include Lockheed Martin Corporation and its Subsidiaries.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by completing the electronic receipt or returning an
executed copy of this Award Agreement to the Vice President of Total Rewards and
Performance Management as instructed below as soon as possible but in no event
later than May 31, 2012. Assuming prompt and proper acknowledgement of your
acceptance of this Award Agreement, this Award will be effective as of the Award
Date. Acceptance of this Award Agreement constitutes your consent to any action
taken under the Plan consistent with its terms with respect to this Award and
your agreement to be bound by the restrictions contained in Exhibit A
(“Post-Employment Conduct Agreement”) and Exhibit B (“Stock Ownership
Requirements”).

If you do not acknowledge your acceptance of this Award Agreement on or before
May 31, 2012, this Award will be forfeited.

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Grant Date: January 30, 2012

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EXERCISE PRICE

The exercise price of the Options granted hereunder is $         per Option.
Under certain circumstances set forth in the Plan and this Award Agreement, this
exercise price may be subject to adjustment.

The Committee currently allows the exercise price of an Option to be paid in
cash, by the tender of Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment, nor will fractional
shares be issued. The Committee retains the discretion, at any time, to limit
the method of payment to cash. If you elect to pay with Stock, you must have
owned the shares tendered for at least six months. If Stock is tendered, it will
be valued at its Fair Market Value on the date of tender.

VESTING, EXPIRATION, AND FORFEITURE

General Rule - An Option is subject to forfeiture and may not be exercised until
it has vested. In addition, an Option may not be exercised after its expiration
or forfeiture.

Performance Goals – The Options granted pursuant to this Award Agreement are
subject to satisfaction of two performance goals as follows:

1. 50% of the Options granted under this Award Agreement will be forfeited if
the Corporation does not generate $3.8 billion in cash from operations in 2012
disregarding discretionary contributions to the Corporation’s defined benefit
pension plans that exceed the contributions forecasted in the Corporation’s 2012
Long Range Plan and any tax payments or tax benefits associated with
divestitures in computing cash from operations, other than tax payments or tax
benefits that were included in the Corporation’s 2012 Long Range Plan. Cash
shall be determined by the Committee based upon the comparable numbers reported
on the Corporation’s audited consolidated financial statements or, if audited
financial statements are not available for the date or period for which Cash
Flow is being determined, the Committee shall determine Cash Flow in a manner
consistent with the historical practices used by the Corporation in determining
net cash provided by operating activities as reported in its audited
consolidated statement of cash flows, in either case as modified by this
paragraph; and

2. 50% of the Options granted under this Award Agreement will be forfeited if
the Corporation’s return on invested capital (“ROIC”) for 2012 is not at least
14.5%. ROIC is defined as net earnings (excluding any charge or addition to net
earnings resulting solely from adjustment of deferred tax assets and liabilities
for the effect of enactment of corporate tax reform and related legislation that
adjusts United States federal corporate income tax rates) plus after-tax
interest expense divided by average invested capital (stockholders’ equity plus
debt) after adjusting stockholders’ equity by adding back adjustments related to
the Corporation’s post-retirement benefit plans. In addition, if an

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acquisition with a purchase price in excess of $1.0 billion is completed, and
the acquisition is financed in whole or in part by the issuance of new debt, the
ROIC calculation for 2012 will be adjusted as follows: (i) debt will be adjusted
to exclude the amount of new debt issued; (ii) after-tax interest expense will
be adjusted to exclude interest expense on the new debt issued; and (iii) net
earnings will be adjusted to exclude the net earnings from the acquired company.
Stockholders’ equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and shall be based
on the comparable numbers reported in the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period for which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and post-retirement plan
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph.

Continued Employment Requirement. Subject to certain special rules discussed
below, you must remain in the employ of the Corporation until the applicable
date of vesting. The vesting schedule for any Options not forfeited as of
December 31, 2012 due to failure to satisfy the Performance Goals in the section
entitled “Performance Goals” is as follows:

First Vesting Date: January 30, 2013 – One-Third

Second Vesting Date: January 30, 2014 – One-Third

Third Vesting Date: January 30, 2015 – One-Third

If the number of Options granted cannot be evenly divided by three into whole
shares, the fractional shares will vest on the Third Vesting Date. If you are
not continuously employed by the Corporation from the Grant Date until the date
on which an Option vests, that Option is forfeited.

Vested Options, except as otherwise provided in this letter, or in the Plan, or
as may be restricted by law, may be exercised for a period ending on January 28,
2022. Options not exercised by that date will be forfeited.

You should make every effort to keep the Vice President of Total Rewards and
Performance Management informed of your current address so that we may
communicate with you about your Options and their current status. The
Corporation cannot exercise the Options for you, and so you must pay close
attention to their terms and any impending expiration.

SPECIAL RULES AS TO VESTING, FORFEITURE AND EXPIRATION

Retirement or Layoff - If you retire or are laid off prior to the Third Vesting
Date, you will forfeit any Options that have not vested on or prior to the
effective day of your retirement or layoff as set forth above in the “Continued
Employment Requirement” paragraph under the title “Vesting, Expiration and
Forfeiture.” Your vested Options will be exercisable until January 28, 2022 at
which time any unexercised Options will expire and may no longer be exercised.

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For purposes of this provision, the term “retirement” means retirement from
service under the terms of the Corporation’s defined benefit pension plan in
which you are a participant or, if you do not participate in one of the
Corporation’s defined benefit pension plans, termination following attainment of
(i) age 55 and five years of service, or (ii) age 65.

Death or Disability - Your outstanding unvested Options will immediately vest
and no longer be subject to the continuing employment if:

 

  (i) you die while still employed by the Corporation; or

 

  (ii) you terminate employment as a result of becoming totally disabled as
evidenced by commencement of benefits under the Corporation’s long-term
disability plan in which you are enrolled (or, if you are not a participant of
the Corporation’s long-term disability plan, when you would have been eligible
for benefits using the standards set forth in that plan).

Your vested Options will expire at the end of their remaining term on
January 28, 2022, at which time any unexercised Options will expire and may no
longer be exercised. In the event that you die and have not properly
acknowledged acceptance of the Award prior to your death (or May 31, 2012,
whichever is earlier), you will forfeit all of your Options granted hereunder.

Resignation or Termination for Cause - If you resign or your employment
otherwise terminates, whether voluntarily or by action of the Corporation, and
in the latter case whether with or without “cause,” unvested Options will be
forfeited upon your termination. Vested Options will expire at the end of their
remaining term or 30 calendar days following your resignation or termination,
whichever is shorter.

Divestiture - If the Corporation divests (as defined below) all or substantially
all of a business operation of the Corporation and such divestiture results in
the termination of your employment with the Corporation or its subsidiaries and
transfer of such employment to the other party to the divestiture, the special
rules in this paragraph will apply. Following a divestiture, you will continue
to vest in your outstanding unvested Options as though you had remained in the
employ of the Corporation. Your vested Options will be exercisable until a
revised expiration date which is the first to occur of (i) the fifth anniversary
of the effective date of the divestiture; or (ii) the original expiration date
(“Revised Expiration Date”). If you die following divestiture but prior to the
Revised Expiration Date, all outstanding unvested Options will immediately vest
as of the date of death and be exercisable by your beneficiary until the Revised
Expiration Date. For the purposes of this provision, the term “divestiture”
shall mean a transaction which results in the transfer of control of the
business operation divested to any person, corporation, association,
partnership, joint venture or other business entity of which less than 50% of
the voting stock or other equity interests (in the case of entities other than
corporations) is owned or controlled directly or indirectly, by the Corporation,
one or more of the Corporation’s subsidiaries or by a combination thereof.

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Change in Control – In the event of a change in control of the Corporation, as
defined in Section 7 of the Plan, the vesting date of all outstanding Options
shall be accelerated so as to cause all outstanding Options to become
immediately exercisable. Following a change in control, your vested Options will
be exercisable until January 28, 2022 at which time any unexercised Options will
expire and may no longer be exercised.

LIMITATIONS ON EXERCISE

Notwithstanding any other provision herein, no Option may be exercised less than
six months nor more than ten years after the date of grant. Further, from time
to time, your ability to exercise Options which otherwise would be exercisable
may be restricted, if in the opinion of counsel for the Corporation, this is
necessary or advisable in order to ensure compliance with applicable federal or
state law, rules or regulations.

ASSIGNMENT, TRANSFERABILITY, AND BENEFICIARIES

Options may not be pledged, assigned or transferred except that Options may be
transferred by will or by the laws of descent and distribution or you may
provide that, upon your death, the Options are to be transferred to a
beneficiary or beneficiaries that you designate. To designate a beneficiary or
beneficiaries, please complete the Beneficiary Designation located at
http://www.benefitaccess.com and return an original executed copy to the Vice
President of Total Rewards and Performance Management (Mail Point 123).

During your lifetime, only you may exercise your Options. In the event of your
death or disability, your Options may be exercised by a properly designated
beneficiary or beneficiaries or your guardian or authorized representative, as
applicable. If at your death, a completed beneficiary designation form is not on
file at the office of the Vice President of Total Rewards and Performance
Management (or if your beneficiary predeceases you), your Options may be
exercised by your estate.

TAX WITHHOLDING

When you exercise an Option, the Corporation will withhold applicable taxes as
required by law. The Committee currently allows you to pay the withholding taxes
in cash, by tendering Stock or through a combination of Stock and cash. No
fractional shares of Stock may be tendered in payment. The Committee retains the
discretion to, at any time, limit the method of payment to cash. Unlike payment
of the exercise price of the Options, if you elect to pay withholding taxes with
Stock, you need not have owned the shares tendered for at least six months.
Payment must be made at the time of exercise. To the extent that cash is not
tendered, the Corporation will retain from the shares of Stock that you would
otherwise receive upon exercise of the Option that number of shares sufficient
to satisfy the withholding obligation. If Stock is tendered or is deemed to have
been tendered, it will be valued at its Fair Market Value.

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Withholding will be at the minimum rate prescribed by law. Therefore, you may
owe taxes relating to the exercise in addition to the amount withheld by the
Corporation. If you desire, you may request that tax be withheld at greater than
the minimum rate.

AMENDMENT AND TERMINATION OF THE PLAN OR AWARDS

As provided in Section 9 of the Plan, subject to certain limitations contained
within Section 9, the Board of Directors may at any time amend, suspend or
discontinue the Plan and the Committee may at any time alter or amend this Award
Agreement. Notwithstanding Section 9 of the Plan, no such amendment, suspension
or discontinuance of the Plan or alteration or amendment of Award Agreements
will, except with your express written consent, adversely affect your rights
under this Award Agreement. This Award Agreement shall not be amended or
interpreted in a manner that is reasonably believed to result in the imposition
of tax under Code section 409A.

ACCEPTANCE OF AWARD

No Award is enforceable until you properly acknowledge your acceptance by
completing the electronic receipt or returning an executed copy of this Award
Agreement to the Vice President of Total Rewards and Performance Management as
soon as possible but in no event later than May 31, 2012. Acceptance of this
Award Agreement must be made only by you personally or by a person acting
pursuant to a power of attorney in the event of your inability to acknowledge
your acceptance due to your disability or deployment in the Armed Forces (and
not by your estate, your spouse or any other person) and constitutes your
consent to any action taken under the Plan consistent with its terms with
respect to this Award. The Committee has authorized electronic means for the
delivery and acceptance of this Award Agreement. If you desire to accept this
Award, you must acknowledge your acceptance and receipt of this Award Agreement,
either electronically or by signing and returning a copy of this letter on or
before May 31, 2012 as follows:

 

  •  

Electronic Acceptance: Go to http://www.benefitaccess.com

 

  •  

By Mail: Mr. David Filomeo, Vice President of Total Rewards and Performance
Management, Lockheed Martin Corporation, Mail Point 123, 6801 Rockledge Drive,
Bethesda MD 20817

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Assuming prompt and proper acknowledgment of this Award Agreement as described,
this Award will be effective as of the Award Date.

If you do not personally acknowledge acceptance of your award by executing this
Award Agreement on or before May 31, 2012, it will not be effective, you will
not be able to exercise the Options and you will forfeit the Options granted
hereunder.

By accepting this Award Agreement electronically, you consent to electronic
delivery of the Prospectus applicable to this Award from this internet site
(http://www.benefitaccess.com). This consent can only be withdrawn by written
notice to the Vice President of Total Rewards and Performance Management at the
address noted above.

POST-EMPLOYMENT COVENANTS

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement.

STOCK OWNERSHIP REQUIREMENTS

By accepting this Award Agreement through the process described above, you
acknowledge receipt of the Stock Ownership Requirements (“Ownership
Requirements”) attached as Exhibit B and agree to comply with such Ownership
Requirements.

MISCELLANEOUS

For the purpose of calculating the expiration date of the Options, all Options
will be deemed to expire on January 28, 2022 at the close of trading in Lockheed
Martin Corporation common stock on the New York Stock Exchange (or, if the
security is not so listed or if the principal market on which it is traded is
not the New York Stock Exchange, such other reporting system as shall be
selected by the Committee).

If you are on leave of absence, for the purposes of the Plan, you will be
considered to still be in the employ of the Corporation unless otherwise
provided in an agreement between you and the Corporation.

Nothing contained in this Award Agreement shall confer upon you any right of
continued employment by the Corporation or guarantee that any future awards will
be made to you under the Plan. In addition, nothing in this Award Agreement
limits in any way the right of the Corporation to terminate your employment at
any time. The value of the Options awarded to you will not be taken into account
for other benefits offered by the Corporation, including but not limited to
pension benefits.

Transactions involving Options or Stock exchanged for Options delivered under
this Award Agreement are subject to the securities laws and CPS 722. Among other
things, CPS 722 prohibits

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employees of the Corporation from engaging in transactions that violate
securities laws or involve hedging or pledging stock. Insiders are subject to
additional restrictions. The Corporation recommends that Insiders consult with
the Senior Vice President, General Counsel and Corporate Secretary or her staff
before entering into any transactions involving Stock or Options.

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You have no rights as a stockholder to any securities covered by this Award
Agreement until the date on which you become the holder of record of such
securities. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to them in the Plan. In the event of a conflict between this
Award Agreement and the Plan, the Plan document will control.

 

Sincerely, David Filomeo (On behalf of the Management Development and
Compensation Committee)

(For written acceptance, please complete, sign and return by mail.)

Acknowledged by:

 

 

Signature

     

 

Date

 

Print Name

     

 

Employee ID

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Exhibit A

Post Employment Conduct Agreement

(Stock Option Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with a Grant Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of stock options to me under the Award Agreement (the “Options”) pursuant to the
Lockheed Martin Corporation 2011 Incentive Performance Award Plan (the “Plan”).
References to the “Corporation” shall include Lockheed Martin Corporation and
its Subsidiaries. By accepting the Options, I agree as follows:

1. Restrictions Following Termination of Employment.

(a) Covenant Not To Compete - Without the express written consent of the
Management Development and Compensation Committee of the Board of Directors of
the Corporation, during the two-year period following the date of my termination
of employment (the “Termination Date”) with the Corporation, I will not,
directly or indirectly, be employed by, provide services to, or advise a
“Restricted Company” (as defined in Section 6 below), whether as an employee,
advisor, director, officer, partner or consultant, or in any other position,
function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit - Without the express written consent of the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, during the two-year period following the Termination Date, I will
not (i) interfere with any contractual relationship between the Corporation and
any customer, supplier, distributor or manufacturer of or to the Corporation to
the detriment of the Corporation or (ii) induce or attempt to induce any person
who is an employee of the Corporation to perform work or services for any entity
other than the Corporation.

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(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

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(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(e) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the Options is expressly made contingent
upon my agreements with the Corporation set forth in this PECA. I acknowledge
that the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

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  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have exercised any of the Options and continue to own the shares of
Common Stock of the Corporation issued or issuable upon exercise of the Options,
the shares of Common Stock so acquired upon exercise; (ii) to the extent I have
exercised any of the Options and no longer own the shares of Common Stock of the
Corporation issued or issuable upon exercise of the Options, cash in an amount
equal to the fair market value of such shares on the date of the event set forth
in Section 3(a) (which, unless otherwise determined by the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, shall be equal to the closing price of the shares of Common Stock
as finally reported by the New York Stock Exchange on such date), and (iii) to
the extent I have not exercised the Options fully, all of my remaining rights,
title or interest in the Options.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

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6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the Options to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

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Grant Date: January 30, 2012

Page 15

 

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of Options under
the Award Agreement and is not contingent on the vesting of the Options.

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Grant Date: January 30, 2012

Page 16

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

LTIP PECA CEO (performance)

Award Date: January 30, 2012

 

LOGO [g221578g10c79.jpg]

Lockheed Martin Corporation

6801 Rockledge Drive, Bethesda, MD 20817

Telephone 301-897-6000

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

«Name»

«Street»

«City», «State» «Zip»

 

  Re: Lockheed Martin Corporation 2011 Incentive Performance Award Plan:
Long-Term Incentive Performance Award (2012-2014 Performance Period)

Dear «Call_By_Name»:

On behalf of the Management Development and Compensation Committee (the
“Committee”) of the Board of Directors of Lockheed Martin Corporation, I am
pleased to tell you that you have been granted a Long-Term Incentive Performance
Award under the Corporation’s 2011 Incentive Performance Award Plan (the
“Plan”). The purpose of this letter is to serve as the Award Agreement under
such Plan and to set forth your Target Award as well as the terms and conditions
to the payment of your Target Award. Additional terms and conditions are set
forth in the Plan and in the Prospectus relating to the Plan of which the Plan
document and this Award Agreement are a part. The Prospectus is available at
http://www.benefitaccess.com. You should retain the Prospectus and the attached
copy of the Plan in your records.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by returning an executed copy of this Award Agreement to
the Vice President of Total Rewards and Performance Management as instructed
below as soon as possible but in no event later than May 31, 2012. Assuming
prompt and proper acknowledgement of your acceptance of this Award Agreement,
this Award will be effective as of the Award Date. Acceptance of this Award
Agreement constitutes your consent to any action taken under the Plan consistent
with its terms with respect to this Award and your agreement to be bound by the
restrictions contained in Section 14 and Exhibit A (“Post-Employment Conduct
Agreement”) and Exhibit B (“Stock Ownership Requirements”).

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Award Date: January 30, 2012

Page 2

 

Capitalized terms used in this Award Agreement which have a special meaning
either shall be defined in this Award Agreement or if not defined in this Award
Agreement shall have the meaning ascribed to the term in the Plan. The term
“Target Award” as used in this Award Agreement refers only to the Target Award
awarded to you under this Award Agreement and the term “Award” refers only to
the Long Term Incentive Performance Award set forth in this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries. Appendix A contains an index of all capitalized terms used in this
Award Agreement.

Section 1. Target Award; Performance Period.

1.1 Target Award. Your Target Award for the Performance Period under this Award
Agreement shall be [Target].

1.2 Performance Period. The Performance Period under this Award Agreement is a
three-year performance period that runs from January 1, 2012, until December 31,
2014.

1.3 Payment of Award. The amount payable to you under your Award is dependent
upon the Corporation’s performance as compared to the metrics described in
Section 3 and Section 4 of this Award Agreement and your continued employment
with the Corporation in accordance with Section 5 of this Award Agreement. As a
result of these requirements, any payments you receive may be larger or smaller
than your Target Award (e.g., the performance factors could result in no payment
in respect of your Award).

Section 2. Calculation of Award Payments.

2.1 End of Performance Period Calculation. Following the end of the Performance
Period and prior to any payments being made,

(a) The Committee will calculate the Total Stockholder Return Performance Factor
based on the Corporation’s performance during the Performance Period relative to
the performance of other corporations which compose the “Peer Performance Group”
as defined in Section 3.1 below.

(b) The Committee will calculate the ROIC Performance Factor based on the
Corporation’s ROIC during the Performance Period as compared to the projected
ROIC for the Performance Period in the 2012 Long Range Plan as presented at the
February 2012 Board meeting.

(c) The Committee will calculate the Cash Flow Performance Factor based on the
Corporation’s cumulative Cash Flow during the Performance Period as compared to
the projected cumulative Cash Flow in the 2012 Long Range Plan as presented at
the February 2012 Board meeting.

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Award Date: January 30, 2012

Page 3

 

(d) Your “Potential Award” shall be calculated by multiplying the weighted
average of the Total Stockholder Return Performance Factor, the ROIC Performance
Factor, and the Cash Flow Performance Factor by your Target Award. The Total
Stockholder Return Performance Factor, the ROIC Performance Factor, and the Cash
Flow Performance Factor shall be weighted as follows in determining the weighted
average of the three performance factors:

 

Total Stockholder Return Performance Factor

     50 % 

ROIC Performance Factor

     25 % 

Cash Flow Performance Factor

     25 % 

You must (except as specified in Section 5) remain employed by the Corporation
through December 31, 2014, to receive your Potential Award.

Section 3. Total Stockholder Return Performance Factor.

3.1. Peer Performance Group. The Total Stockholder Return Performance Factor
will be based upon the relative ranking of the Corporation’s Average Total
Stockholder Return (as defined in Section 3.2(a)) for the Performance Period to
the Average Total Stockholder Return for such Period for each corporation in the
“Peer Performance Group.” The “Peer Performance Group” shall consist of the
corporations which compose the Standard and Poor’s 500 Aerospace and Defense
Index reported under symbol S5AERO by Bloomberg L.P. The Corporation’s Total
Stockholder Return will be based on the performance of its common stock, par
value $1.00. The Total Stockholder Return of each corporation that is taken into
account in computing the Peer Performance Group Total Stockholder Return will be
based on the equity security of the relevant corporation that is used in
computing the Standard and Poor’s 500 Aerospace and Defense Index.

3.2. Calculation of Total Stockholder Return Performance Factor.

(a) Calculation of Average Total Stockholder Return. During the Performance
Period, the Committee shall compute the Total Stockholder Return (as defined in
the Plan and assuming the reinvestment of any cash dividends) for the
Corporation and for each other corporation in the Peer Performance Group for
thirty-six (36) periods during the Performance Period where each period begins
on January 1, 2012 (based on the closing price for the stock on December 31,
2011) and ends on the last day of each successive calendar month in the
Performance Period on which the New York Stock Exchange is open for trading.
Each such Total Stockholder Return shall be computed from data available to the
public. At the end of the Performance Period, the thirty-six (36) Total
Stockholder Return figures for each corporation for the Performance Period will
be averaged to determine each corporation’s average Total Stockholder Return
(“Average TSR”) for the Performance Period. Each corporation’s Average TSR shall
be ranked among the Average TSR for each other corporation in the Peer
Performance Group on a percentile basis (using the Excel PERCENTRANK function).

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Award Date: January 30, 2012

Page 4

 

(b) Percentage Level of Target Award. Your Total Stockholder Return Performance
Factor, expressed as a percentage, will be determined under this Section 3.2(b)
(and Section 3.2(c) to the extent interpolation is necessary) based on the
Percentile Ranking (as determined under Section 3.2(a)) of the Corporation’s
Average TSR for the Performance Period under the following chart:

 

Band

  

Percentile Ranking

   Total Stockholder
Return Performance
Factor  

One

   75th or higher      200 % 

Two

   60th      150 % 

Three

   50th      100 % 

Four

   40th      50 % 

Five

   35th      25 % 

Six

   Below 35th      0 % 

(c) Total Stockholder Return Performance Factor Interpolation. If the Percentile
Ranking as determined under Section 3.2(a) puts the Corporation over the listed
Percentile Ranking for the applicable Band (other than Band One) in
Section 3.2(b), your Total Stockholder Return Performance Factor under
Section 3.2(b) shall be interpolated on a linear basis.

Section 4. ROIC Performance Factor and Cash Flow Performance Factor.

4.1 ROIC Performance Factor. The ROIC Performance Factor will be determined by
comparing the Corporation’s ROIC for the Performance Period to ROIC as
forecasted for the Performance Period in the Corporation’s 2012 Long Range Plan
and then identifying the ROIC Performance Factor based upon the factor
associated with the difference on the following table:

 

Change from 2012 LRP

ROIC

   ROIC Performance
Factor  

Plan + 150 or more basis points

     200 % 

Plan + 120 basis points

     175 % 

Plan + 90 basis points

     150 % 

Plan + 60 basis points

     125 % 

Plan + 30 basis points

     100 % 

Plan

     75 % 

Plan – 15 basis points

     50 % 

Plan – 30 basis points

     25 % 

Plan – 45 or more basis points

     0 % 

(a) ROIC Definition. For purposes of this Award Agreement, “ROIC” means return
on invested capital for the Performance Period calculated as (A) average annual
(i) net income (excluding any charge or addition to net income resulting

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Award Date: January 30, 2012

Page 5

 

solely from adjustment of deferred tax assets and liabilities for the effect of
enactment of corporate tax reform and related legislation that adjusts United
States federal corporate income tax rates) plus (ii) interest expense times one
minus the highest marginal federal corporate tax rate over the three year
Performance Period (“Return”), divided by (B) the average of the four year-end
investment balances (beginning with December 31, 2011 year-end balance)
consisting of (i) debt (including current maturities of long-term debt) plus
(ii) stockholders’ equity plus the postretirement plans amounts determined at
year-end as included in the Corporation’s Statement of Stockholders’ Equity.

(b) ROIC Determination. Each component of ROIC and the calculation of any
postretirement plans amounts recorded in the Corporation’s Statement of
Stockholders’ Equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and be based upon
the comparable numbers reported on the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period on which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and postretirement plans
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph. Notwithstanding the foregoing, ROIC will be adjusted
to exclude the impact of any change in accounting standards or adoption of any
new accounting standards that is required under generally accepted accounting
principles in the United States and that is reported in the Corporation’s
filings with the Securities and Exchange Commission as having a material effect
on the Corporation’s consolidated financial statements. ROIC, as included in the
2012 Long Range Plan, and the change in ROIC for purposes of the ROIC
Performance Factor will be determined in accordance with this Section 4.1(b).

4.2 Cash Flow Performance Factor. The Cash Flow Performance Factor will be
determined by comparing the Corporation’s cumulative Cash Flow during the
Performance Period to the projected cumulative Cash Flow of the Corporation as
forecasted in the Corporation’s 2012 Long Range Plan, and then identifying the
Cash Flow Performance Factor based upon the factor associated with the change
from the 2012 Long Range Plan on the following table:

 

Change From 2012 LRP

Cash Flow

   Cash Flow Performance
Factor  

Plan + $2.7B or more

     200 % 

Plan + $2.3B

     175 % 

Plan + $2.0B

     150 % 

Plan + $1.7B

     125 % 

Plan + $1.0B

     100 % 

Plan + $0.3B

     75 % 

Plan

     50 % 

Plan - $0.3B

     25 % 

Plan - $0.7B or more

     0 % 

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Award Date: January 30, 2012

Page 6

 

(a) Cash Flow Definition. For purposes of this Award Agreement, Cash Flow means
net cash flow from operations but not taking into account: (i) the aggregate
difference between the amount forecasted in the Corporation’s 2012 Long Range
Plan to be contributed by the Corporation to the Corporation’s defined benefit
pension plans during the Performance Period and the actual amounts contributed
by the Corporation during the Performance Period; or (ii) any tax payments or
tax benefits during the Performance Period associated with the divestiture of
business units, other than tax payments or tax benefits that were included in
the Corporation’s 2012 Long Range Plan.

(b) Cash Flow Determination. Cash Flow shall be determined by the Committee
based upon the comparable numbers reported on the Corporation’s audited
consolidated financial statements or, if audited financial statements are not
available for the period for which Cash Flow is being determined, the Committee
shall determine Cash Flow in a manner consistent with the historical practices
used by the Corporation in determining net cash provided by operating activities
as reported in its audited consolidated statement of cash flows, in either case
as modified by this paragraph.

4.3 Interpolation of ROIC and Cash Flow Metrics. If the change in ROIC or Cash
Flow falls between two numbers listed in the applicable table in Section 4.1 or
4.2, the appropriate factor will be interpolated on a linear basis.
Notwithstanding the foregoing, the ROIC Performance Factor will always be zero
if the ROIC for the Performance Period is less than ROIC forecasted for the
Performance Period in the 2012 Long Range Plan by 45 basis points or more and
the Cash Flow Performance Factor will always be zero if the aggregate Cash Flow
for the Performance Period is less than what was forecasted for the Performance
Period in the 2012 Long Range Plan by more than $0.7 billion.

 

  Section 5. Payment of Award.

5.1. Employment Requirement.

(a) General Rule. In order to be eligible to receive payment of your Potential
Award as determined under Section 2.1(d), you must accept this Award Agreement
and remain employed by the Corporation through the last day of the Performance
Period. Except as provided below, if your employment as an Employee terminates
during the Performance Period, you shall forfeit your right to receive all or
any part of your Potential Award.

(b) Exceptions. Notwithstanding Section 5.1(a), if the Committee determines

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Award Date: January 30, 2012

Page 7

 

(1) that your employment as an Employee terminated as a result of your death,
“Divestiture”, “Disability” or “Retirement” or

(2) that the Corporation terminated your employment involuntarily as a result of
a layoff,

you shall retain a fraction of your Potential Award. The numerator of such
fraction shall equal the number of days in the Performance Period before your
employment as an Employee terminated, and the denominator shall equal the total
number of days in the Performance Period. The Committee shall have complete and
absolute discretion to make the determinations called for under this
Section 5.1(b), and all such determinations shall be binding on you and on any
person who claims all or any part of your Potential Award on your behalf as well
as on the Corporation. If you terminate employment during the Performance Period
but are eligible to receive a portion of your Potential Award as a result of an
exception under this Section 5.1(b), payment of such portion of your Potential
Award shall be in full satisfaction of all rights you have under this Award
Agreement.

(c) Special Definitions. For purposes of this Award Agreement:

(1) Your employment as an Employee shall be treated as terminating because of a
Disability on the date you become eligible for a benefit under the Corporation’s
long-term disability plan in which you participate, or if you are not enrolled
in a long-term disability plan, the date on which long-term disability benefits
would commence under the plan under which you would have been covered, had you
enrolled;

(2) Your employment as an Employee shall be treated as terminating as a result
of Divestiture if the Corporation divests all or substantially all of a business
operation of the Corporation and such divestiture results in the termination of
your employment with the Corporation and a transfer of such employment to the
other party in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and

(3) Your employment as an Employee shall be treated as terminating because of
Retirement if (a) you participate in a defined benefit pension plan maintained
by the Corporation, and your employment terminates on or after the date on which
you satisfy the plan’s age and service requirements for commencing receipt of an
early retirement benefit under the plan or (b) you do not participate in a
defined benefit pension plan maintained by the Corporation, and your employment
terminates after (i) you reach age 65, or (ii) you reach age 55 and have
completed five years of service.

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Award Date: January 30, 2012

Page 8

 

5.2. Payment Rules.

(a) General Rule: Vesting; Method of Payment. If you are eligible to receive
all, or a portion of, your Potential Award under Section 5.1, your Potential
Award shall be fully vested on the date on which the Committee certifies in
writing (for purposes of Section 162(m) of the Code) that your Target Award has
become a Potential Award for the Performance Period, and shall be either paid in
cash to you or deferred in accordance with Section 5.2(c). Subject to
Section 5.2(c), in the event of your death, your payment will be made to your
estate if you do not have a properly completed beneficiary designation form on
file with the Vice President of Total Rewards and Performance Management.

(b) Timing of Payment. Subject to Section 5.2(c), you shall have the right to
receive your Potential Award in cash as soon as administratively practicable,
but no later than ninety (90) days after the date on which the Committee
certifies in writing (for purposes of Section 162(m) of the Code) that your
Target Award has become a Potential Award for the Performance Period, but no
later than March 15 following such certification date.

(c) Deferral. You will be given an opportunity to elect to defer any amounts
payable under Section 5.2 of this Award Agreement. Such election shall be
irrevocable, shall be made in accordance with the terms of the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan (“DMICP”) and the
requirements of Code section 409A, and shall be subject to such additional terms
and conditions as are set by the Committee. A deferral election form and the
terms and conditions for any deferral will be furnished to you in due course.
The beneficiary designation for the DMICP (rather than the beneficiary
designation for this Long Term Incentive Performance Award) shall govern any
amounts deferred under the terms of the DMICP.

5.3. Cutback. Any payment called for under Section 5.2 will be reduced to the
extent that such payment together with payments attributable to any other
Cash-Based Awards that are granted during 2012 as Performance Based Awards
exceeds $10,000,000. Amounts in excess of $10,000,000 shall be forfeited.

5.4. Withholding. Any payment made in respect of your Award will be subject to
income tax withholding at the minimum rate prescribed by law. You may owe taxes
in addition to the amount withheld and may request that tax be withheld at a
greater rate. As required under the law, FICA tax will be collected from you or
withheld from the amount of your award or from your wages, when any portion of
an award becomes vested for tax purposes prior to payment.

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Page 9

 

5.5. Means of Satisfying Code Section 409A. If any payment that would otherwise
be made under this Award Agreement is required to be delayed by reason of
Section 13, such payment shall be made at the earliest date permitted by Code
section 409A. The amount of any delayed payment shall be the amount that would
have been paid prior to the delay adjusted to include interest from the original
payment date to the actual payment date, at a rate equivalent to the six month
London Interbank Offered Rate (LIBOR) as published in the Money Rates section of
the Wall Street Journal, plus 25 basis points. The increase over LIBOR may be
adjusted to reflect the six month unsecured borrowing rate of the Corporation.

 

  Section 6. No Assignment – General Creditor Status.

You shall have no right to assign any interest you might have in all or any part
of the Target Award or Potential Award which has been granted to you under this
Award Agreement and any attempt to do so shall be null and void and shall have
no force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement shall be made in cash from the Corporation’s general assets, and
your right to payment from the Corporation’s general assets shall be the same as
the right of a general and unsecured creditor of the Corporation.

 

  Section 7. Plan.

This Award Agreement shall be subject to all of the terms and conditions set
forth in the Plan.

 

  Section 8. Change in Control.

8.1. Change in Control During Performance Period. If during the Performance
Period, a Change in Control (as defined in Section 7 of the Plan) occurs, the
Performance Period will terminate. Notwithstanding any deferral election or term
of this Award Agreement to the contrary, a pro rata portion of your Award will
be paid to you within fifteen (15) days of the Change in Control. The prorated
portion will be the sum of (i) the result obtained by first multiplying your
Target Award by the Total Stockholder Return Performance Factor calculated under
Section 3.2(b), but based upon the Total Stockholder Return for the Corporation
and the Peer Performance Group as of the last day of the month immediately
preceding the Change in Control, and then further multiplying that product by a
fraction, the numerator of which is the number of days in the Performance Period
prior to the Change in Control and the denominator of which is the total number
of days in the Performance Period.

8.2. Special Rule. Notwithstanding Section 8.1, if a payment in accordance with
those provisions would result in a nonexempt short-swing transaction under
Section 16(b) of the Securities Exchange Act of 1934, then the date of
distribution to you shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt short-swing transaction or
would otherwise not result in liability under Section 16(b) of the Securities
Exchange Act of 1934.

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Award Date: January 30, 2012

Page 10

 

  Section 9.   Amendment and Termination.

As provided in Section 9 of the Plan, the Board of Directors may at any time
amend, suspend or discontinue the Plan and the Committee may at any time amend
this Award Agreement. Notwithstanding the foregoing, no such action by the Board
of Directors or the Committee shall amend Sections 1, 2, 3, 4, or 5 in a manner
adverse to you or reduce the amount payable hereunder in a material manner
without your written consent. For this purpose, a change in the amount payable
hereunder that occurs solely by reason of a change in the date or form of
payment shall in no case be treated as a reduction prohibited by this Section 9.
Thus, for example, if an amount payable by reason of Section 8 is delayed by an
amendment to this Award Agreement or other action undertaken to comply with
Section 409A of the Internal Revenue Code and the amount payable is reduced
solely by reason of a corresponding delay in the date of valuation of a share of
the Corporation’s common stock, such a change shall not be treated as a
reduction prohibited by this Section 9. This Section 9 shall be construed and
applied so as to permit the Committee to amend this Award Agreement at any time
in any manner reasonably necessary or appropriate in order to comply with the
requirements of Section 16 of the Securities Exchange Act of 1934 and of Code
section 409A, including amendments regarding the timing and form of payments
hereunder.

 

  Section 10.   No Right to an Award; Value of Award.

Your status as an Employee shall not be construed as a commitment that any one
or more awards shall be made under the Plan to you or to Employees generally.
Your status as a Participant shall not entitle you to any additional award. The
value of the Award will not be taken into account for other benefits offered by
the Corporation, including but not limited to pension benefits.

 

  Section 11.   No Assurance of Employment.

Nothing contained in the Plan or in this Award Agreement shall confer upon you
any right to continue in the employ or other service of the Corporation or
constitute any contract (of employment or otherwise) or limit in any way the
right of the Corporation to change your compensation or other benefits or to
terminate your employment with or without cause.

 

  Section 12.   Conflict.

In the event of a conflict between this Award Agreement and the Plan, the Plan
document shall control.

 

  Section 13.   Compliance with Section 409A of the Internal Revenue Code.

Notwithstanding any other provision of this Award Agreement to the contrary, to
the extent that this Award Agreement constitutes a nonqualified deferred
compensation

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Award Date: January 30, 2012

Page 11

 

plan to which Code section 409A applies, payments under this Award Agreement
shall be made at a time and in a manner that satisfies the requirements of Code
section 409A and guidance of general applicability issued thereunder, including
the provisions of 409A(a)(2)(B)(i) to the extent distributions to any specified
employee are required to be delayed six months, and all terms shall be
interpreted in accordance with Code section 409A.

 

  Section 14.   Post-Employment Covenants & Stock Ownership Requirements.

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement and you acknowledge receipt of the Stock Ownership
Requirements (“Ownership Requirements”) attached as Exhibit B to this Award
Agreement and agree to comply with such Ownership Requirements. If you are not a
Vice President (or above) on January 30, 2012, but you are promoted to Vice
President (or above) prior to January 30, 2015, the Ownership Requirements shall
become applicable to you on the date of your promotion to Vice President (or
above).

 

  Section 15.   Execution.

No Award is enforceable until you properly acknowledge your acceptance by
returning an executed copy of this Award Agreement, as soon as possible but in
no event later than May 31, 2012, to the Vice President of Total Rewards and
Performance Management, Lockheed Martin Corporation, Mail Point 123, 6801
Rockledge Drive, Bethesda, MD 20817.

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Award Date: January 30, 2012

Page 12

 

By signing this Award Agreement, you consent to receive copies of the Prospectus
applicable to this Award from this internet site (http://www.benefitaccess.com)
as well as to electronic delivery of the Corporation’s annual report on Form
10-K, annual proxy and quarterly reports on Form 10-Q. This consent can only be
withdrawn by written notice to the Senior Vice President, General Counsel, and
Corporate Secretary, Lockheed Martin Corporation, 6801 Rockledge Drive,
Bethesda, MD 20817.

A pre-addressed envelope has been enclosed for your convenience to return with a
copy of this Award Agreement, as acknowledged by you below.

 

Sincerely, David A. Filomeo Vice President Total Rewards and Performance
Management

Enclosures

ACKNOWLEDGEMENT:

 

 

   

 

Signature     Date

 

    Print or type name    

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Award Date: January 30, 2012

Page 13

 

Appendix A

Capitalized Terms

 

Average TSR

   § 3.2(a)

Award

   3rd ¶

Cash Flow

   § 4.2(a)

Cash Flow Performance Factor

   § 4.2

Change of Control

   Plan

Committee

   1st ¶

Corporation

   3rd ¶

Peer Performance Group

   § 3.1

Performance Period

   § 1.2

Plan

   1st ¶

Potential Award

   § 2.1(d)

ROIC

   § 4.1(a)

ROIC Performance Factor

   § 4.1

Subsidiary

   Plan

Target Award

   3rd ¶, § 1.1

Total Stockholder Return

   Plan; § 3.2(a)

Total Stockholder Return Performance Factor

   § 3.1; § 3.2

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Award Date: January 30, 2012

Page 14

 

Exhibit A

Post Employment Conduct Agreement

(LTIP Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of a Long Term Incentive Performance Award to me under the Award Agreement (the
“LTIP”) pursuant to the Lockheed Martin Corporation 2011 Incentive Performance
Award Plan (the “Plan”). References to the “Corporation” shall include Lockheed
Martin Corporation and its Subsidiaries. By accepting the LTIP, I agree as
follows:

1. Protective Covenants.

(a) Covenant Not To Compete – Without the express written consent of the Chief
Executive Officer of the Corporation, during the two-year period following the
date of my termination of employment (the “Termination Date”) with the
Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit – Without the express written consent of the Chief Executive
Officer of the Corporation, during the two-year period following the Termination
Date, I will not (i) interfere with any contractual relationship between the
Corporation and any customer, supplier, distributor or manufacturer of or to the
Corporation to the detriment of the Corporation or (ii) induce or attempt to
induce any person who is an employee of the Corporation to perform work or
services for any entity other than the Corporation.

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Award Date: January 30, 2012

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(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel, and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

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Award Date: January 30, 2012

Page 16

 

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(e) Cooperation in Litigation and Investigations – Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the LTIP is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

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Award Date: January 30, 2012

Page 17

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the LTIP, any cash paid to me, whether paid
currently or deferred; and (ii) to the extent I have not earned the LTIP fully,
all of my remaining rights, title or interest in the LTIP.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

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Award Date: January 30, 2012

Page 18

 

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the LTIP to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

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Award Date: January 30, 2012

Page 19

 

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of an LTIP under
the Award Agreement and is not contingent on the vesting of the LTIP.

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Award Date: January 30, 2012

Page 20

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

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LTIP PECA SVPHR (performance)

Award Date: January 30, 2012

 

LOGO [g221578g10c79.jpg]

Lockheed Martin Corporation

6801 Rockledge Drive, Bethesda, MD 20817

Telephone 301-897-6000

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

«Name»

«Street»

«City», «State» «Zip»

 

  Re: Lockheed Martin Corporation 2011 Incentive Performance Award Plan:
Long-Term Incentive Performance Award (2012-2014 Performance Period)

Dear «Call_By_Name»:

On behalf of the Management Development and Compensation Committee (the
“Committee”) of the Board of Directors of Lockheed Martin Corporation, I am
pleased to tell you that you have been granted a Long-Term Incentive Performance
Award under the Corporation’s 2011 Incentive Performance Award Plan (the
“Plan”). The purpose of this letter is to serve as the Award Agreement under
such Plan and to set forth your Target Award as well as the terms and conditions
to the payment of your Target Award. Additional terms and conditions are set
forth in the Plan and in the Prospectus relating to the Plan of which the Plan
document and this Award Agreement are a part. The Prospectus is available at
http://www.benefitaccess.com. You should retain the Prospectus and the attached
copy of the Plan in your records.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by returning an executed copy of this Award Agreement to
the Vice President of Total Rewards and Performance Management as instructed
below as soon as possible but in no event later than May 31, 2012. Assuming
prompt and proper acknowledgement of your acceptance of this Award Agreement,
this Award will be effective as of the Award Date. Acceptance of this Award
Agreement constitutes your consent to any action taken under the Plan consistent
with its terms with respect to this Award and your agreement to be bound by the
restrictions contained in Section 14 and Exhibit A (“Post-Employment Conduct
Agreement”) and Exhibit B (“Stock Ownership Requirements”).

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Award Date: January 30, 2012

Page 2

 

Capitalized terms used in this Award Agreement which have a special meaning
either shall be defined in this Award Agreement or if not defined in this Award
Agreement shall have the meaning ascribed to the term in the Plan. The term
“Target Award” as used in this Award Agreement refers only to the Target Award
awarded to you under this Award Agreement and the term “Award” refers only to
the Long Term Incentive Performance Award set forth in this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries. Appendix A contains an index of all capitalized terms used in this
Award Agreement.

 

  Section 1. Target Award; Performance Period.

1.1 Target Award. Your Target Award for the Performance Period under this Award
Agreement shall be [Target].

1.2 Performance Period. The Performance Period under this Award Agreement is a
three-year performance period that runs from January 1, 2012, until December 31,
2014.

1.3 Payment of Award. The amount payable to you under your Award is dependent
upon the Corporation’s performance as compared to the metrics described in
Section 3 and Section 4 of this Award Agreement and your continued employment
with the Corporation in accordance with Section 5 of this Award Agreement. As a
result of these requirements, any payments you receive may be larger or smaller
than your Target Award (e.g., the performance factors could result in no payment
in respect of your Award).

 

  Section 2. Calculation of Award Payments.

2.1 End of Performance Period Calculation. Following the end of the Performance
Period and prior to any payments being made,

(a) The Committee will calculate the Total Stockholder Return Performance Factor
based on the Corporation’s performance during the Performance Period relative to
the performance of other corporations which compose the “Peer Performance Group”
as defined in Section 3.1 below.

(b) The Committee will calculate the ROIC Performance Factor based on the
Corporation’s ROIC during the Performance Period as compared to the projected
ROIC for the Performance Period in the 2012 Long Range Plan as presented at the
February 2012 Board meeting.

(c) The Committee will calculate the Cash Flow Performance Factor based on the
Corporation’s cumulative Cash Flow during the Performance Period as compared to
the projected cumulative Cash Flow in the 2012 Long Range Plan as presented at
the February 2012 Board meeting.

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Award Date: January 30, 2012

Page 3

 

(d) Your “Potential Award” shall be calculated by multiplying the weighted
average of the Total Stockholder Return Performance Factor, the ROIC Performance
Factor, and the Cash Flow Performance Factor by your Target Award. The Total
Stockholder Return Performance Factor, the ROIC Performance Factor, and the Cash
Flow Performance Factor shall be weighted as follows in determining the weighted
average of the three performance factors:

 

Total Stockholder Return Performance Factor

     50 % 

ROIC Performance Factor

     25 % 

Cash Flow Performance Factor

     25 % 

You must (except as specified in Section 5) remain employed by the Corporation
through December 31, 2014, to receive your Potential Award.

 

  Section 3. Total Stockholder Return Performance Factor.

3.1. Peer Performance Group. The Total Stockholder Return Performance Factor
will be based upon the relative ranking of the Corporation’s Average Total
Stockholder Return (as defined in Section 3.2(a)) for the Performance Period to
the Average Total Stockholder Return for such Period for each corporation in the
“Peer Performance Group.” The “Peer Performance Group” shall consist of the
corporations which compose the Standard and Poor’s 500 Aerospace and Defense
Index reported under symbol S5AERO by Bloomberg L.P. The Corporation’s Total
Stockholder Return will be based on the performance of its common stock, par
value $1.00. The Total Stockholder Return of each corporation that is taken into
account in computing the Peer Performance Group Total Stockholder Return will be
based on the equity security of the relevant corporation that is used in
computing the Standard and Poor’s 500 Aerospace and Defense Index.

3.2. Calculation of Total Stockholder Return Performance Factor.

(a) Calculation of Average Total Stockholder Return. During the Performance
Period, the Committee shall compute the Total Stockholder Return (as defined in
the Plan and assuming the reinvestment of any cash dividends) for the
Corporation and for each other corporation in the Peer Performance Group for
thirty-six (36) periods during the Performance Period where each period begins
on January 1, 2012 (based on the closing price for the stock on December 31,
2011) and ends on the last day of each successive calendar month in the
Performance Period on which the New York Stock Exchange is open for trading.
Each such Total Stockholder Return shall be computed from data available to the
public. At the end of the Performance Period, the thirty-six (36) Total
Stockholder Return figures for each corporation for the Performance Period will
be averaged to determine each corporation’s average Total Stockholder Return
(“Average TSR”) for the Performance Period. Each corporation’s Average TSR shall
be ranked among the Average TSR for each other corporation in the Peer
Performance Group on a percentile basis (using the Excel PERCENTRANK function).

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Award Date: January 30, 2012

Page 4

 

(b) Percentage Level of Target Award. Your Total Stockholder Return Performance
Factor, expressed as a percentage, will be determined under this Section 3.2(b)
(and Section 3.2(c) to the extent interpolation is necessary) based on the
Percentile Ranking (as determined under Section 3.2(a)) of the Corporation’s
Average TSR for the Performance Period under the following chart:

 

Band

  

Percentile Ranking

   Total Stockholder
Return Performance
Factor  

One

   75th or higher      200 % 

Two

   60th      150 % 

Three

   50th      100 % 

Four

   40th      50 % 

Five

   35th      25 % 

Six

   Below 35th      0 % 

(c) Total Stockholder Return Performance Factor Interpolation. If the Percentile
Ranking as determined under Section 3.2(a) puts the Corporation over the listed
Percentile Ranking for the applicable Band (other than Band One) in
Section 3.2(b), your Total Stockholder Return Performance Factor under
Section 3.2(b) shall be interpolated on a linear basis.

 

  Section 4. ROIC Performance Factor and Cash Flow Performance Factor.

4.1 ROIC Performance Factor. The ROIC Performance Factor will be determined by
comparing the Corporation’s ROIC for the Performance Period to ROIC as
forecasted for the Performance Period in the Corporation’s 2012 Long Range Plan
and then identifying the ROIC Performance Factor based upon the factor
associated with the difference on the following table:

 

Change from 2012 LRP

ROIC

   ROIC Performance
Factor  

Plan + 150 or more basis points

     200 % 

Plan + 120 basis points

     175 % 

Plan + 90 basis points

     150 % 

Plan + 60 basis points

     125 % 

Plan + 30 basis points

     100 % 

Plan

     75 % 

Plan – 15 basis points

     50 % 

Plan – 30 basis points

     25 % 

Plan – 45 or more basis points

     0 % 

(a) ROIC Definition. For purposes of this Award Agreement, “ROIC” means return
on invested capital for the Performance Period calculated as (A) average annual
(i) net income (excluding any charge or addition to net income resulting

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Award Date: January 30, 2012

Page 5

 

solely from adjustment of deferred tax assets and liabilities for the effect of
enactment of corporate tax reform and related legislation that adjusts United
States federal corporate income tax rates) plus (ii) interest expense times one
minus the highest marginal federal corporate tax rate over the three year
Performance Period (“Return”), divided by (B) the average of the four year-end
investment balances (beginning with December 31, 2011 year-end balance)
consisting of (i) debt (including current maturities of long-term debt) plus
(ii) stockholders’ equity plus the postretirement plans amounts determined at
year-end as included in the Corporation’s Statement of Stockholders’ Equity.

(b) ROIC Determination. Each component of ROIC and the calculation of any
postretirement plans amounts recorded in the Corporation’s Statement of
Stockholders’ Equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and be based upon
the comparable numbers reported on the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period on which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and postretirement plans
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph. Notwithstanding the foregoing, ROIC will be adjusted
to exclude the impact of any change in accounting standards or adoption of any
new accounting standards that is required under generally accepted accounting
principles in the United States and that is reported in the Corporation’s
filings with the Securities and Exchange Commission as having a material effect
on the Corporation’s consolidated financial statements. ROIC, as included in the
2012 Long Range Plan, and the change in ROIC for purposes of the ROIC
Performance Factor will be determined in accordance with this Section 4.1(b).

4.2 Cash Flow Performance Factor. The Cash Flow Performance Factor will be
determined by comparing the Corporation’s cumulative Cash Flow during the
Performance Period to the projected cumulative Cash Flow of the Corporation as
forecasted in the Corporation’s 2012 Long Range Plan, and then identifying the
Cash Flow Performance Factor based upon the factor associated with the change
from the 2012 Long Range Plan on the following table:

 

Change From 2012 LRP

Cash Flow

   Cash Flow Performance
Factor  

Plan + $2.7B or more

     200 % 

Plan + $2.3B

     175 % 

Plan + $2.0B

     150 % 

Plan + $1.7B

     125 % 

Plan + $1.0B

     100 % 

Plan + $0.3B

     75 % 

Plan

     50 % 

Plan - $0.3B

     25 % 

Plan - $0.7B or more

     0 % 

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Award Date: January 30, 2012

Page 6

 

(a) Cash Flow Definition. For purposes of this Award Agreement, Cash Flow means
net cash flow from operations but not taking into account: (i) the aggregate
difference between the amount forecasted in the Corporation’s 2012 Long Range
Plan to be contributed by the Corporation to the Corporation’s defined benefit
pension plans during the Performance Period and the actual amounts contributed
by the Corporation during the Performance Period; or (ii) any tax payments or
tax benefits during the Performance Period associated with the divestiture of
business units, other than tax payments or tax benefits that were included in
the Corporation’s 2012 Long Range Plan.

(b) Cash Flow Determination. Cash Flow shall be determined by the Committee
based upon the comparable numbers reported on the Corporation’s audited
consolidated financial statements or, if audited financial statements are not
available for the period for which Cash Flow is being determined, the Committee
shall determine Cash Flow in a manner consistent with the historical practices
used by the Corporation in determining net cash provided by operating activities
as reported in its audited consolidated statement of cash flows, in either case
as modified by this paragraph.

4.3 Interpolation of ROIC and Cash Flow Metrics. If the change in ROIC or Cash
Flow falls between two numbers listed in the applicable table in Section 4.1 or
4.2, the appropriate factor will be interpolated on a linear basis.
Notwithstanding the foregoing, the ROIC Performance Factor will always be zero
if the ROIC for the Performance Period is less than ROIC forecasted for the
Performance Period in the 2012 Long Range Plan by 45 basis points or more and
the Cash Flow Performance Factor will always be zero if the aggregate Cash Flow
for the Performance Period is less than what was forecasted for the Performance
Period in the 2012 Long Range Plan by more than $0.7 billion.

 

  Section 5. Payment of Award.

5.1. Employment Requirement.

(a) General Rule. In order to be eligible to receive payment of your Potential
Award as determined under Section 2.1(d), you must accept this Award Agreement
and remain employed by the Corporation through the last day of the Performance
Period. Except as provided below, if your employment as an Employee terminates
during the Performance Period, you shall forfeit your right to receive all or
any part of your Potential Award.

(b) Exceptions. Notwithstanding Section 5.1(a), if the Committee determines

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Award Date: January 30, 2012

Page 7

 

(1) that your employment as an Employee terminated as a result of your death,
“Divestiture”, “Disability” or “Retirement” or

(2) that the Corporation terminated your employment involuntarily as a result of
a layoff,

you shall retain a fraction of your Potential Award. The numerator of such
fraction shall equal the number of days in the Performance Period before your
employment as an Employee terminated, and the denominator shall equal the total
number of days in the Performance Period. The Committee shall have complete and
absolute discretion to make the determinations called for under this
Section 5.1(b), and all such determinations shall be binding on you and on any
person who claims all or any part of your Potential Award on your behalf as well
as on the Corporation. If you terminate employment during the Performance Period
but are eligible to receive a portion of your Potential Award as a result of an
exception under this Section 5.1(b), payment of such portion of your Potential
Award shall be in full satisfaction of all rights you have under this Award
Agreement.

(c) Special Definitions. For purposes of this Award Agreement:

(1) Your employment as an Employee shall be treated as terminating because of a
Disability on the date you become eligible for a benefit under the Corporation’s
long-term disability plan in which you participate, or if you are not enrolled
in a long-term disability plan, the date on which long-term disability benefits
would commence under the plan under which you would have been covered, had you
enrolled;

(2) Your employment as an Employee shall be treated as terminating as a result
of Divestiture if the Corporation divests all or substantially all of a business
operation of the Corporation and such divestiture results in the termination of
your employment with the Corporation and a transfer of such employment to the
other party in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and

(3) Your employment as an Employee shall be treated as terminating because of
Retirement if (a) you participate in a defined benefit pension plan maintained
by the Corporation, and your employment terminates on or after the date on which
you satisfy the plan’s age and service requirements for commencing receipt of an
early retirement benefit under the plan or (b) you do not participate in a
defined benefit pension plan maintained by the Corporation, and your employment
terminates after (i) you reach age 65, or (ii) you reach age 55 and have
completed five years of service.

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Award Date: January 30, 2012

Page 8

 

5.2. Payment Rules.

(a) General Rule: Vesting; Method of Payment. If you are eligible to receive
all, or a portion of, your Potential Award under Section 5.1, your Potential
Award shall be fully vested on the date on which the Committee certifies in
writing (for purposes of Section 162(m) of the Code) that your Target Award has
become a Potential Award for the Performance Period, and shall be either paid in
cash to you or deferred in accordance with Section 5.2(c). Subject to
Section 5.2(c), in the event of your death, your payment will be made to your
estate if you do not have a properly completed beneficiary designation form on
file with the Vice President of Total Rewards and Performance Management.

(b) Timing of Payment. Subject to Section 5.2(c), you shall have the right to
receive your Potential Award in cash as soon as administratively practicable,
but no later than ninety (90) days after the date on which the Committee
certifies in writing (for purposes of Section 162(m) of the Code) that your
Target Award has become a Potential Award for the Performance Period, but no
later than March 15 following such certification date.

(c) Deferral. You will be given an opportunity to elect to defer any amounts
payable under Section 5.2 of this Award Agreement. Such election shall be
irrevocable, shall be made in accordance with the terms of the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan (“DMICP”) and the
requirements of Code section 409A, and shall be subject to such additional terms
and conditions as are set by the Committee. A deferral election form and the
terms and conditions for any deferral will be furnished to you in due course.
The beneficiary designation for the DMICP (rather than the beneficiary
designation for this Long Term Incentive Performance Award) shall govern any
amounts deferred under the terms of the DMICP.

5.3. Cutback. Any payment called for under Section 5.2 will be reduced to the
extent that such payment together with payments attributable to any other
Cash-Based Awards that are granted during 2012 as Performance Based Awards
exceeds $10,000,000. Amounts in excess of $10,000,000 shall be forfeited.

5.4. Withholding. Any payment made in respect of your Award will be subject to
income tax withholding at the minimum rate prescribed by law. You may owe taxes
in addition to the amount withheld and may request that tax be withheld at a
greater rate. As required under the law, FICA tax will be collected from you or
withheld from the amount of your award or from your wages, when any portion of
an award becomes vested for tax purposes prior to payment.

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Page 9

 

5.5. Means of Satisfying Code Section 409A. If any payment that would otherwise
be made under this Award Agreement is required to be delayed by reason of
Section 13, such payment shall be made at the earliest date permitted by Code
section 409A. The amount of any delayed payment shall be the amount that would
have been paid prior to the delay adjusted to include interest from the original
payment date to the actual payment date, at a rate equivalent to the six month
London Interbank Offered Rate (LIBOR) as published in the Money Rates section of
the Wall Street Journal, plus 25 basis points. The increase over LIBOR may be
adjusted to reflect the six month unsecured borrowing rate of the Corporation.

 

  Section 6. No Assignment – General Creditor Status.

You shall have no right to assign any interest you might have in all or any part
of the Target Award or Potential Award which has been granted to you under this
Award Agreement and any attempt to do so shall be null and void and shall have
no force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement shall be made in cash from the Corporation’s general assets, and
your right to payment from the Corporation’s general assets shall be the same as
the right of a general and unsecured creditor of the Corporation.

 

  Section 7. Plan.

This Award Agreement shall be subject to all of the terms and conditions set
forth in the Plan.

 

  Section 8. Change in Control.

8.1. Change in Control During Performance Period. If during the Performance
Period, a Change in Control (as defined in Section 7 of the Plan) occurs, the
Performance Period will terminate. Notwithstanding any deferral election or term
of this Award Agreement to the contrary, a pro rata portion of your Award will
be paid to you within fifteen (15) days of the Change in Control. The prorated
portion will be the sum of (i) the result obtained by first multiplying your
Target Award by the Total Stockholder Return Performance Factor calculated under
Section 3.2(b), but based upon the Total Stockholder Return for the Corporation
and the Peer Performance Group as of the last day of the month immediately
preceding the Change in Control, and then further multiplying that product by a
fraction, the numerator of which is the number of days in the Performance Period
prior to the Change in Control and the denominator of which is the total number
of days in the Performance Period.

8.2. Special Rule. Notwithstanding Section 8.1, if a payment in accordance with
those provisions would result in a nonexempt short-swing transaction under
Section 16(b) of the Securities Exchange Act of 1934, then the date of
distribution to you shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt short-swing transaction or
would otherwise not result in liability under Section 16(b) of the Securities
Exchange Act of 1934.

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Page 10

 

Section 9.  Amendment and Termination.

As provided in Section 9 of the Plan, the Board of Directors may at any time
amend, suspend or discontinue the Plan and the Committee may at any time amend
this Award Agreement. Notwithstanding the foregoing, no such action by the Board
of Directors or the Committee shall amend Sections 1, 2, 3, 4, or 5 in a manner
adverse to you or reduce the amount payable hereunder in a material manner
without your written consent. For this purpose, a change in the amount payable
hereunder that occurs solely by reason of a change in the date or form of
payment shall in no case be treated as a reduction prohibited by this Section 9.
Thus, for example, if an amount payable by reason of Section 8 is delayed by an
amendment to this Award Agreement or other action undertaken to comply with
Section 409A of the Internal Revenue Code and the amount payable is reduced
solely by reason of a corresponding delay in the date of valuation of a share of
the Corporation’s common stock, such a change shall not be treated as a
reduction prohibited by this Section 9. This Section 9 shall be construed and
applied so as to permit the Committee to amend this Award Agreement at any time
in any manner reasonably necessary or appropriate in order to comply with the
requirements of Section 16 of the Securities Exchange Act of 1934 and of Code
section 409A, including amendments regarding the timing and form of payments
hereunder.

Section 10.   No Right to an Award; Value of Award.

Your status as an Employee shall not be construed as a commitment that any one
or more awards shall be made under the Plan to you or to Employees generally.
Your status as a Participant shall not entitle you to any additional award. The
value of the Award will not be taken into account for other benefits offered by
the Corporation, including but not limited to pension benefits.

Section 11.  No Assurance of Employment.

Nothing contained in the Plan or in this Award Agreement shall confer upon you
any right to continue in the employ or other service of the Corporation or
constitute any contract (of employment or otherwise) or limit in any way the
right of the Corporation to change your compensation or other benefits or to
terminate your employment with or without cause.

Section 12.  Conflict.

In the event of a conflict between this Award Agreement and the Plan, the Plan
document shall control.

Section 13.  Compliance with Section 409A of the Internal Revenue Code.

Notwithstanding any other provision of this Award Agreement to the contrary, to
the extent that this Award Agreement constitutes a nonqualified deferred
compensation

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Award Date: January 30, 2012

Page 11

 

plan to which Code section 409A applies, payments under this Award Agreement
shall be made at a time and in a manner that satisfies the requirements of Code
section 409A and guidance of general applicability issued thereunder, including
the provisions of 409A(a)(2)(B)(i) to the extent distributions to any specified
employee are required to be delayed six months, and all terms shall be
interpreted in accordance with Code section 409A.

Section 14.  Post-Employment Covenants & Stock Ownership Requirements.

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement and you acknowledge receipt of the Stock Ownership
Requirements (“Ownership Requirements”) attached as Exhibit B to this Award
Agreement and agree to comply with such Ownership Requirements. If you are not a
Vice President (or above) on January 30, 2012, but you are promoted to Vice
President (or above) prior to January 30, 2015, the Ownership Requirements shall
become applicable to you on the date of your promotion to Vice President (or
above).

Section 15.  Execution.

No Award is enforceable until you properly acknowledge your acceptance by
returning an executed copy of this Award Agreement, as soon as possible but in
no event later than May 31, 2012, to the Vice President of Total Rewards and
Performance Management, Lockheed Martin Corporation, Mail Point 123, 6801
Rockledge Drive, Bethesda, MD 20817.

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Award Date: January 30, 2012

Page 12

 

By signing this Award Agreement, you consent to receive copies of the Prospectus
applicable to this Award from this internet site
(http://www.benefitaccess.com)as well as to electronic delivery of the
Corporation’s annual report on Form 10-K, annual proxy and quarterly reports on
Form 10-Q. This consent can only be withdrawn by written notice to the Senior
Vice President, General Counsel, and Corporate Secretary, Lockheed Martin
Corporation, 6801 Rockledge Drive, Bethesda, MD 20817.

A pre-addressed envelope has been enclosed for your convenience to return with a
copy of this Award Agreement, as acknowledged by you below.

 

Sincerely, David A. Filomeo Vice President Total Rewards and Performance
Management

Enclosures

ACKNOWLEDGEMENT:

 

 

   

 

Signature     Date

 

    Print or type name    

 

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Award Date: January 30, 2012

Page 13

 

Appendix A

Capitalized Terms

 

Average TSR

   § 3.2(a)

Award

   3rd ¶

Cash Flow

   § 4.2(a)

Cash Flow Performance Factor

   § 4.2

Change of Control

   Plan

Committee

   1st ¶

Corporation

   3rd ¶

Peer Performance Group

   § 3.1

Performance Period

   § 1.2

Plan

   1st ¶

Potential Award

   § 2.1(d)

ROIC

   § 4.1(a)

ROIC Performance Factor

   § 4.1

Subsidiary

   Plan

Target Award

   3rd ¶, § 1.1

Total Stockholder Return

   Plan; § 3.2(a)

Total Stockholder Return Performance

   § 3.1; § 3.2

Factor

  

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Award Date: January 30, 2012

Page 14

 

Exhibit A

Post Employment Conduct Agreement

(LTIP Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of a Long Term Incentive Performance Award to me under the Award Agreement (the
“LTIP”) pursuant to the Lockheed Martin Corporation 2011 Incentive Performance
Award Plan (the “Plan”). References to the “Corporation” shall include Lockheed
Martin Corporation and its Subsidiaries. By accepting the LTIP, I agree as
follows:

1. Protective Covenants.

(a) Covenant Not To Compete – Without the express written consent of the Senior
Vice President, Human Resources of the Corporation, during the one-year period
following the date of my termination of employment (the “Termination Date”) with
the Corporation, I will not, directly or indirectly, be employed by, provide
services to, or advise a “Restricted Company” (as defined in Section 6 below),
whether as an employee, advisor, director, officer, partner or consultant, or in
any other position, function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit – Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not (i) interfere with any contractual
relationship between the Corporation and any customer, supplier, distributor or
manufacturer of or to the Corporation to the detriment of the Corporation or
(ii) induce or attempt to induce any person who is an employee of the
Corporation to perform work or services for any entity other than the
Corporation.

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Award Date: January 30, 2012

Page 15

 

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel, and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

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Award Date: January 30, 2012

Page 16

 

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(e) Cooperation in Litigation and Investigations – Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the LTIP is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii)

The Corporation determines that either (a) my intentional misconduct or gross
negligence, or (b) my failure to report another person’s intentional misconduct
or gross negligence of which I had knowledge during the period I was employed by

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Award Date: January 30, 2012

Page 17

 

  the Corporation, contributed to the Corporation having to restate all or a
portion of its financial statements filed for any period with the Securities and
Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the LTIP, any cash paid to me, whether paid
currently or deferred; and (ii) to the extent I have not earned the LTIP fully,
all of my remaining rights, title or interest in the LTIP.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

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Award Date: January 30, 2012

Page 18

 

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the LTIP to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

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Award Date: January 30, 2012

Page 19

 

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of an LTIP under
the Award Agreement and is not contingent on the vesting of the LTIP.

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Award Date: January 30, 2012

Page 20

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

LTIP CA PECA CEO (performance)

Award Date: January 30, 2012

 

LOGO [g221578g10c79.jpg]

Lockheed Martin Corporation

6801 Rockledge Drive, Bethesda, MD 20817

Telephone 301-897-6000

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

«Name»

«Street»

«City», «State» «Zip»

 

  Re: Lockheed Martin Corporation 2011 Incentive Performance Award Plan:
Long-Term Incentive Performance Award (2012-2014 Performance Period)

Dear «Call_By_Name»:

On behalf of the Management Development and Compensation Committee (the
“Committee”) of the Board of Directors of Lockheed Martin Corporation, I am
pleased to tell you that you have been granted a Long-Term Incentive Performance
Award under the Corporation’s 2011 Incentive Performance Award Plan (the
“Plan”). The purpose of this letter is to serve as the Award Agreement under
such Plan and to set forth your Target Award as well as the terms and conditions
to the payment of your Target Award. Additional terms and conditions are set
forth in the Plan and in the Prospectus relating to the Plan of which the Plan
document and this Award Agreement are a part. The Prospectus is available at
http://www.benefitaccess.com. You should retain the Prospectus and the attached
copy of the Plan in your records.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by returning an executed copy of this Award Agreement to
the Vice President of Total Rewards and Performance Management as instructed
below as soon as possible but in no event later than May 31, 2012. Assuming
prompt and proper acknowledgement of your acceptance of this Award Agreement,
this Award will be effective as of the Award Date. Acceptance of this Award
Agreement constitutes your consent to any action taken under the Plan consistent
with its terms with respect to this Award and your agreement to be bound by the
restrictions contained in Section 14 and Exhibit A (“Post-Employment Conduct
Agreement”) and Exhibit B (“Stock Ownership Requirements”).

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Award Date: January 30, 2012

Page 2

 

Capitalized terms used in this Award Agreement which have a special meaning
either shall be defined in this Award Agreement or if not defined in this Award
Agreement shall have the meaning ascribed to the term in the Plan. The term
“Target Award” as used in this Award Agreement refers only to the Target Award
awarded to you under this Award Agreement and the term “Award” refers only to
the Long Term Incentive Performance Award set forth in this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries. Appendix A contains an index of all capitalized terms used in this
Award Agreement.

 

  Section 1. Target Award; Performance Period.

1.1 Target Award. Your Target Award for the Performance Period under this Award
Agreement shall be [Target].

1.2 Performance Period. The Performance Period under this Award Agreement is a
three-year performance period that runs from January 1, 2012, until December 31,
2014.

1.3 Payment of Award. The amount payable to you under your Award is dependent
upon the Corporation’s performance as compared to the metrics described in
Section 3 and Section 4 of this Award Agreement and your continued employment
with the Corporation in accordance with Section 5 of this Award Agreement. As a
result of these requirements, any payments you receive may be larger or smaller
than your Target Award (e.g., the performance factors could result in no payment
in respect of your Award).

 

  Section 2. Calculation of Award Payments.

2.1 End of Performance Period Calculation. Following the end of the Performance
Period and prior to any payments being made,

(a) The Committee will calculate the Total Stockholder Return Performance Factor
based on the Corporation’s performance during the Performance Period relative to
the performance of other corporations which compose the “Peer Performance Group”
as defined in Section 3.1 below.

(b) The Committee will calculate the ROIC Performance Factor based on the
Corporation’s ROIC during the Performance Period as compared to the projected
ROIC for the Performance Period in the 2012 Long Range Plan as presented at the
February 2012 Board meeting.

(c) The Committee will calculate the Cash Flow Performance Factor based on the
Corporation’s cumulative Cash Flow during the Performance Period as compared to
the projected cumulative Cash Flow in the 2012 Long Range Plan as presented at
the February 2012 Board meeting.

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(d) Your “Potential Award” shall be calculated by multiplying the weighted
average of the Total Stockholder Return Performance Factor, the ROIC Performance
Factor, and the Cash Flow Performance Factor by your Target Award. The Total
Stockholder Return Performance Factor, the ROIC Performance Factor, and the Cash
Flow Performance Factor shall be weighted as follows in determining the weighted
average of the three performance factors:

 

Total Stockholder Return Performance Factor

     50 % 

ROIC Performance Factor

     25 % 

Cash Flow Performance Factor

     25 % 

You must (except as specified in Section 5) remain employed by the Corporation
through December 31, 2014, to receive your Potential Award.

 

  Section 3. Total Stockholder Return Performance Factor.

3.1. Peer Performance Group. The Total Stockholder Return Performance Factor
will be based upon the relative ranking of the Corporation’s Average Total
Stockholder Return (as defined in Section 3.2(a)) for the Performance Period to
the Average Total Stockholder Return for such Period for each corporation in the
“Peer Performance Group.” The “Peer Performance Group” shall consist of the
corporations which compose the Standard and Poor’s 500 Aerospace and Defense
Index reported under symbol S5AERO by Bloomberg L.P. The Corporation’s Total
Stockholder Return will be based on the performance of its common stock, par
value $1.00. The Total Stockholder Return of each corporation that is taken into
account in computing the Peer Performance Group Total Stockholder Return will be
based on the equity security of the relevant corporation that is used in
computing the Standard and Poor’s 500 Aerospace and Defense Index.

3.2. Calculation of Total Stockholder Return Performance Factor.

(a) Calculation of Average Total Stockholder Return. During the Performance
Period, the Committee shall compute the Total Stockholder Return (as defined in
the Plan and assuming the reinvestment of any cash dividends) for the
Corporation and for each other corporation in the Peer Performance Group for
thirty-six (36) periods during the Performance Period where each period begins
on January 1, 2012 (based on the closing price for the stock on December 31,
2011) and ends on the last day of each successive calendar month in the
Performance Period on which the New York Stock Exchange is open for trading.
Each such Total Stockholder Return shall be computed from data available to the
public. At the end of the Performance Period, the thirty-six (36) Total
Stockholder Return figures for each corporation for the Performance Period will
be averaged to determine each corporation’s average Total Stockholder Return
(“Average TSR”) for the Performance Period. Each corporation’s Average TSR shall
be ranked among the Average TSR for each other corporation in the Peer
Performance Group on a percentile basis (using the Excel PERCENTRANK function).

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(b) Percentage Level of Target Award. Your Total Stockholder Return Performance
Factor, expressed as a percentage, will be determined under this Section 3.2(b)
(and Section 3.2(c) to the extent interpolation is necessary) based on the
Percentile Ranking (as determined under Section 3.2(a)) of the Corporation’s
Average TSR for the Performance Period under the following chart:

 

Band

  

Percentile Ranking

   Total Stockholder
Return Performance
Factor  

One

   75th or higher      200 % 

Two

   60th      150 % 

Three

   50th      100 % 

Four

   40th      50 % 

Five

   35th      25 % 

Six

   Below 35th      0 % 

(c) Total Stockholder Return Performance Factor Interpolation. If the Percentile
Ranking as determined under Section 3.2(a) puts the Corporation over the listed
Percentile Ranking for the applicable Band (other than Band One) in
Section 3.2(b), your Total Stockholder Return Performance Factor under
Section 3.2(b) shall be interpolated on a linear basis.

 

  Section 4. ROIC Performance Factor and Cash Flow Performance Factor.

4.1 ROIC Performance Factor. The ROIC Performance Factor will be determined by
comparing the Corporation’s ROIC for the Performance Period to ROIC as
forecasted for the Performance Period in the Corporation’s 2012 Long Range Plan
and then identifying the ROIC Performance Factor based upon the factor
associated with the difference on the following table:

 

Change from 2012 LRP

ROIC

   ROIC Performance
Factor  

Plan + 150 or more basis points

     200 % 

Plan + 120 basis points

     175 % 

Plan + 90 basis points

     150 % 

Plan + 60 basis points

     125 % 

Plan + 30 basis points

     100 % 

Plan

     75 % 

Plan – 15 basis points

     50 % 

Plan – 30 basis points

     25 % 

Plan – 45 or more basis points

     0 % 

(a) ROIC Definition. For purposes of this Award Agreement, “ROIC” means return
on invested capital for the Performance Period calculated as (A) average annual
(i) net income (excluding any charge or addition to net income resulting

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solely from adjustment of deferred tax assets and liabilities for the effect of
enactment of corporate tax reform and related legislation that adjusts United
States federal corporate income tax rates) plus (ii) interest expense times one
minus the highest marginal federal corporate tax rate over the three year
Performance Period (“Return”), divided by (B) the average of the four year-end
investment balances (beginning with December 31, 2011 year-end balance)
consisting of (i) debt (including current maturities of long-term debt) plus
(ii) stockholders’ equity plus the postretirement plans amounts determined at
year-end as included in the Corporation’s Statement of Stockholders’ Equity.

(b) ROIC Determination. Each component of ROIC and the calculation of any
postretirement plans amounts recorded in the Corporation’s Statement of
Stockholders’ Equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and be based upon
the comparable numbers reported on the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period on which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and postretirement plans
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph. Notwithstanding the foregoing, ROIC will be adjusted
to exclude the impact of any change in accounting standards or adoption of any
new accounting standards that is required under generally accepted accounting
principles in the United States and that is reported in the Corporation’s
filings with the Securities and Exchange Commission as having a material effect
on the Corporation’s consolidated financial statements. ROIC, as included in the
2012 Long Range Plan, and the change in ROIC for purposes of the ROIC
Performance Factor will be determined in accordance with this Section 4.1(b).

4.2 Cash Flow Performance Factor. The Cash Flow Performance Factor will be
determined by comparing the Corporation’s cumulative Cash Flow during the
Performance Period to the projected cumulative Cash Flow of the Corporation as
forecasted in the Corporation’s 2012 Long Range Plan, and then identifying the
Cash Flow Performance Factor based upon the factor associated with the change
from the 2012 Long Range Plan on the following table:

 

Change From 2012 LRP

Cash Flow

   Cash Flow Performance
Factor  

Plan + $2.7B or more

     200 % 

Plan + $2.3B

     175 % 

Plan + $2.0B

     150 % 

Plan + $1.7B

     125 % 

Plan + $1.0B

     100 % 

Plan + $0.3B

     75 % 

Plan

     50 % 

Plan - $0.3B

     25 % 

Plan - $0.7B or more

     0 % 

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(a) Cash Flow Definition. For purposes of this Award Agreement, Cash Flow means
net cash flow from operations but not taking into account: (i) the aggregate
difference between the amount forecasted in the Corporation’s 2012 Long Range
Plan to be contributed by the Corporation to the Corporation’s defined benefit
pension plans during the Performance Period and the actual amounts contributed
by the Corporation during the Performance Period; or (ii) any tax payments or
tax benefits during the Performance Period associated with the divestiture of
business units, other than tax payments or tax benefits that were included in
the Corporation’s 2012 Long Range Plan.

(b) Cash Flow Determination. Cash Flow shall be determined by the Committee
based upon the comparable numbers reported on the Corporation’s audited
consolidated financial statements or, if audited financial statements are not
available for the period for which Cash Flow is being determined, the Committee
shall determine Cash Flow in a manner consistent with the historical practices
used by the Corporation in determining net cash provided by operating activities
as reported in its audited consolidated statement of cash flows, in either case
as modified by this paragraph.

4.3 Interpolation of ROIC and Cash Flow Metrics. If the change in ROIC or Cash
Flow falls between two numbers listed in the applicable table in Section 4.1 or
4.2, the appropriate factor will be interpolated on a linear basis.
Notwithstanding the foregoing, the ROIC Performance Factor will always be zero
if the ROIC for the Performance Period is less than ROIC forecasted for the
Performance Period in the 2012 Long Range Plan by 45 basis points or more and
the Cash Flow Performance Factor will always be zero if the aggregate Cash Flow
for the Performance Period is less than what was forecasted for the Performance
Period in the 2012 Long Range Plan by more than $0.7 billion.

 

  Section 5. Payment of Award.

5.1. Employment Requirement.

(a) General Rule. In order to be eligible to receive payment of your Potential
Award as determined under Section 2.1(d), you must accept this Award Agreement
and remain employed by the Corporation through the last day of the Performance
Period. Except as provided below, if your employment as an Employee terminates
during the Performance Period, you shall forfeit your right to receive all or
any part of your Potential Award.

(b) Exceptions. Notwithstanding Section 5.1(a), if the Committee determines

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(1) that your employment as an Employee terminated as a result of your death,
“Divestiture”, “Disability” or “Retirement” or

(2) that the Corporation terminated your employment involuntarily as a result of
a layoff,

you shall retain a fraction of your Potential Award. The numerator of such
fraction shall equal the number of days in the Performance Period before your
employment as an Employee terminated, and the denominator shall equal the total
number of days in the Performance Period. The Committee shall have complete and
absolute discretion to make the determinations called for under this
Section 5.1(b), and all such determinations shall be binding on you and on any
person who claims all or any part of your Potential Award on your behalf as well
as on the Corporation. If you terminate employment during the Performance Period
but are eligible to receive a portion of your Potential Award as a result of an
exception under this Section 5.1(b), payment of such portion of your Potential
Award shall be in full satisfaction of all rights you have under this Award
Agreement.

(c) Special Definitions. For purposes of this Award Agreement:

(1) Your employment as an Employee shall be treated as terminating because of a
Disability on the date you become eligible for a benefit under the Corporation’s
long-term disability plan in which you participate, or if you are not enrolled
in a long-term disability plan, the date on which long-term disability benefits
would commence under the plan under which you would have been covered, had you
enrolled;

(2) Your employment as an Employee shall be treated as terminating as a result
of Divestiture if the Corporation divests all or substantially all of a business
operation of the Corporation and such divestiture results in the termination of
your employment with the Corporation and a transfer of such employment to the
other party in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and

(3) Your employment as an Employee shall be treated as terminating because of
Retirement if (a) you participate in a defined benefit pension plan maintained
by the Corporation, and your employment terminates on or after the date on which
you satisfy the plan’s age and service requirements for commencing receipt of an
early retirement benefit under the plan or (b) you do not participate in a
defined benefit pension plan maintained by the Corporation, and your employment
terminates after (i) you reach age 65, or (ii) you reach age 55 and have
completed five years of service.

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5.2. Payment Rules.

(a) General Rule: Vesting; Method of Payment. If you are eligible to receive
all, or a portion of, your Potential Award under Section 5.1, your Potential
Award shall be fully vested on the date on which the Committee certifies in
writing (for purposes of Section 162(m) of the Code) that your Target Award has
become a Potential Award for the Performance Period, and shall be either paid in
cash to you or deferred in accordance with Section 5.2(c). Subject to
Section 5.2(c), in the event of your death, your payment will be made to your
estate if you do not have a properly completed beneficiary designation form on
file with the Vice President of Total Rewards and Performance Management.

(b) Timing of Payment. Subject to Section 5.2(c), you shall have the right to
receive your Potential Award in cash as soon as administratively practicable,
but no later than ninety (90) days after the date on which the Committee
certifies in writing (for purposes of Section 162(m) of the Code) that your
Target Award has become a Potential Award for the Performance Period, but no
later than March 15 following such certification date.

(c) Deferral. You will be given an opportunity to elect to defer any amounts
payable under Section 5.2 of this Award Agreement. Such election shall be
irrevocable, shall be made in accordance with the terms of the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan (“DMICP”) and the
requirements of Code section 409A, and shall be subject to such additional terms
and conditions as are set by the Committee. A deferral election form and the
terms and conditions for any deferral will be furnished to you in due course.
The beneficiary designation for the DMICP (rather than the beneficiary
designation for this Long Term Incentive Performance Award) shall govern any
amounts deferred under the terms of the DMICP.

5.3. Cutback. Any payment called for under Section 5.2 will be reduced to the
extent that such payment together with payments attributable to any other
Cash-Based Awards that are granted during 2012 as Performance Based Awards
exceeds $10,000,000. Amounts in excess of $10,000,000 shall be forfeited.

5.4. Withholding. Any payment made in respect of your Award will be subject to
income tax withholding at the minimum rate prescribed by law. You may owe taxes
in addition to the amount withheld and may request that tax be withheld at a
greater rate. As required under the law, FICA tax will be collected from you or
withheld from the amount of your award or from your wages, when any portion of
an award becomes vested for tax purposes prior to payment.

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5.5. Means of Satisfying Code Section 409A. If any payment that would otherwise
be made under this Award Agreement is required to be delayed by reason of
Section 13, such payment shall be made at the earliest date permitted by Code
section 409A. The amount of any delayed payment shall be the amount that would
have been paid prior to the delay adjusted to include interest from the original
payment date to the actual payment date, at a rate equivalent to the six month
London Interbank Offered Rate (LIBOR) as published in the Money Rates section of
the Wall Street Journal, plus 25 basis points. The increase over LIBOR may be
adjusted to reflect the six month unsecured borrowing rate of the Corporation.

 

  Section 6. No Assignment – General Creditor Status.

You shall have no right to assign any interest you might have in all or any part
of the Target Award or Potential Award which has been granted to you under this
Award Agreement and any attempt to do so shall be null and void and shall have
no force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement shall be made in cash from the Corporation’s general assets, and
your right to payment from the Corporation’s general assets shall be the same as
the right of a general and unsecured creditor of the Corporation.

 

  Section 7. Plan.

This Award Agreement shall be subject to all of the terms and conditions set
forth in the Plan.

 

  Section 8. Change in Control.

8.1. Change in Control During Performance Period. If during the Performance
Period, a Change in Control (as defined in Section 7 of the Plan) occurs, the
Performance Period will terminate. Notwithstanding any deferral election or term
of this Award Agreement to the contrary, a pro rata portion of your Award will
be paid to you within fifteen (15) days of the Change in Control. The prorated
portion will be the sum of (i) the result obtained by first multiplying your
Target Award by the Total Stockholder Return Performance Factor calculated under
Section 3.2(b), but based upon the Total Stockholder Return for the Corporation
and the Peer Performance Group as of the last day of the month immediately
preceding the Change in Control, and then further multiplying that product by a
fraction, the numerator of which is the number of days in the Performance Period
prior to the Change in Control and the denominator of which is the total number
of days in the Performance Period.

8.2. Special Rule. Notwithstanding Section 8.1, if a payment in accordance with
those provisions would result in a nonexempt short-swing transaction under
Section 16(b) of the Securities Exchange Act of 1934, then the date of
distribution to you shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt short-swing transaction or
would otherwise not result in liability under Section 16(b) of the Securities
Exchange Act of 1934.

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  Section 9. Amendment and Termination.

As provided in Section 9 of the Plan, the Board of Directors may at any time
amend, suspend or discontinue the Plan and the Committee may at any time amend
this Award Agreement. Notwithstanding the foregoing, no such action by the Board
of Directors or the Committee shall amend Sections 1, 2, 3, 4, or 5 in a manner
adverse to you or reduce the amount payable hereunder in a material manner
without your written consent. For this purpose, a change in the amount payable
hereunder that occurs solely by reason of a change in the date or form of
payment shall in no case be treated as a reduction prohibited by this Section 9.
Thus, for example, if an amount payable by reason of Section 8 is delayed by an
amendment to this Award Agreement or other action undertaken to comply with
Section 409A of the Internal Revenue Code and the amount payable is reduced
solely by reason of a corresponding delay in the date of valuation of a share of
the Corporation’s common stock, such a change shall not be treated as a
reduction prohibited by this Section 9. This Section 9 shall be construed and
applied so as to permit the Committee to amend this Award Agreement at any time
in any manner reasonably necessary or appropriate in order to comply with the
requirements of Section 16 of the Securities Exchange Act of 1934 and of Code
section 409A, including amendments regarding the timing and form of payments
hereunder.

 

  Section 10.   No Right to an Award; Value of Award.

Your status as an Employee shall not be construed as a commitment that any one
or more awards shall be made under the Plan to you or to Employees generally.
Your status as a Participant shall not entitle you to any additional award. The
value of the Award will not be taken into account for other benefits offered by
the Corporation, including but not limited to pension benefits.

 

  Section 11.   No Assurance of Employment.

Nothing contained in the Plan or in this Award Agreement shall confer upon you
any right to continue in the employ or other service of the Corporation or
constitute any contract (of employment or otherwise) or limit in any way the
right of the Corporation to change your compensation or other benefits or to
terminate your employment with or without cause.

 

  Section 12.   Conflict.

In the event of a conflict between this Award Agreement and the Plan, the Plan
document shall control.

 

  Section 13.   Compliance with Section 409A of the Internal Revenue Code.

Notwithstanding any other provision of this Award Agreement to the contrary, to
the extent that this Award Agreement constitutes a nonqualified deferred
compensation

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Page 11

 

plan to which Code section 409A applies, payments under this Award Agreement
shall be made at a time and in a manner that satisfies the requirements of Code
section 409A and guidance of general applicability issued thereunder, including
the provisions of 409A(a)(2)(B)(i) to the extent distributions to any specified
employee are required to be delayed six months, and all terms shall be
interpreted in accordance with Code section 409A.

 

  Section 14.   Post-Employment Covenants & Stock Ownership Requirements.

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement and you acknowledge receipt of the Stock Ownership
Requirements (“Ownership Requirements”) attached as Exhibit B to this Award
Agreement and agree to comply with such Ownership Requirements. If you are not a
Vice President (or above) on January 30, 2012, but you are promoted to Vice
President (or above) prior to January 30, 2015, the Ownership Requirements shall
become applicable to you on the date of your promotion to Vice President (or
above).

 

  Section 15.   Execution.

No Award is enforceable until you properly acknowledge your acceptance by
returning an executed copy of this Award Agreement, as soon as possible but in
no event later than May 31, 2012, to the Vice President of Total Rewards and
Performance Management, Lockheed Martin Corporation, Mail Point 123, 6801
Rockledge Drive, Bethesda, MD 20817.

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By signing this Award Agreement, you consent to receive copies of the Prospectus
applicable to this Award from this internet site (http://www.benefitaccess.com)
as well as to electronic delivery of the Corporation’s annual report on Form
10-K, annual proxy and quarterly reports on Form 10-Q. This consent can only be
withdrawn by written notice to the Senior Vice President, General Counsel, and
Corporate Secretary, Lockheed Martin Corporation, 6801 Rockledge Drive,
Bethesda, MD 20817.

A pre-addressed envelope has been enclosed for your convenience to return with a
copy of this Award Agreement, as acknowledged by you below.

 

Sincerely, David A. Filomeo Vice President Total Rewards and Performance
Management

Enclosures

ACKNOWLEDGEMENT:

 

 

Signature

     

 

Date

 

Print or type name

     

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Page 13

 

Appendix A

Capitalized Terms

 

Average TSR

   § 3.2(a)

Award

   3rd ¶

Cash Flow

   § 4.2(a)

Cash Flow Performance Factor

   § 4.2

Change of Control

   Plan

Committee

   1st ¶

Corporation

   3rd ¶

Peer Performance Group

   § 3.1

Performance Period

   § 1.2

Plan

   1st ¶

Potential Award

   § 2.1(d)

ROIC

   § 4.1(a)

ROIC Performance Factor

   § 4.1

Subsidiary

   Plan

Target Award

   3rd ¶, § 1.1

Total Stockholder Return

   Plan; § 3.2(a)

Total Stockholder Return Performance

   § 3.1; § 3.2

Factor

  

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Exhibit A

Post Employment Conduct Agreement

(LTIP Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of a Long Term Incentive Performance Award to me under the Award Agreement (the
“LTIP”) pursuant to the Lockheed Martin Corporation 2011 Incentive Performance
Award Plan (the “Plan”). References to the “Corporation” shall include Lockheed
Martin Corporation and its Subsidiaries. By accepting the LTIP, I agree as
follows:

1. Protective Covenants.

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel, and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

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Page 15

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes; or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit - Without the express written consent of the Chief Executive
Officer of the Corporation, during the two-year period following the Termination
Date, I will not induce or attempt to induce any person who is an employee of
the Corporation to perform work or services for any entity other than the
Corporation. This provision does not prevent the hiring of such persons so long
as they are not induced to be one employed in violation of this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations - Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the LTIP is expressly made contingent upon
my agreements with the

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Page 16

 

Corporation set forth in this PECA. I acknowledge that the scope and duration of
the restrictions in Section 1 are necessary to be effective and are fair and
reasonable in light of the value of the benefits and compensation opportunities
being made available to me under the Award Agreement. I further acknowledge and
agree that as a result of the high level executive and management positions I
hold with the Corporation and the access to and extensive knowledge of the
Corporation’s Confidential or Proprietary Information, employees, suppliers and
customers, these restrictions are reasonably required for the protection of the
Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the LTIP, any cash paid to me, whether paid
currently or deferred; and (ii) to the extent I have not earned the LTIP fully,
all of my remaining rights, title or interest in the LTIP.

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Award Date: January 30, 2012

Page 17

 

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the LTIP to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of an LTIP under
the Award Agreement and is not contingent on the vesting of the LTIP.

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Award Date: January 30, 2012

Page 18

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

  

Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

LTIP CA PECA SVPHR (performance)

Award Date: January 30, 2012

 

LOGO [g221578g10c79.jpg]

Lockheed Martin Corporation

6801 Rockledge Drive, Bethesda, MD 20817

Telephone 301-897-6000

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

«Name»

«Street»

«City», «State» «Zip»

 

  Re: Lockheed Martin Corporation 2011 Incentive Performance Award Plan:
Long-Term Incentive Performance Award (2012-2014 Performance Period)

Dear «Call_By_Name»:

On behalf of the Management Development and Compensation Committee (the
“Committee”) of the Board of Directors of Lockheed Martin Corporation, I am
pleased to tell you that you have been granted a Long-Term Incentive Performance
Award under the Corporation’s 2011 Incentive Performance Award Plan (the
“Plan”). The purpose of this letter is to serve as the Award Agreement under
such Plan and to set forth your Target Award as well as the terms and conditions
to the payment of your Target Award. Additional terms and conditions are set
forth in the Plan and in the Prospectus relating to the Plan of which the Plan
document and this Award Agreement are a part. The Prospectus is available at
http://www.benefitaccess.com. You should retain the Prospectus and the attached
copy of the Plan in your records.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by returning an executed copy of this Award Agreement to
the Vice President of Total Rewards and Performance Management as instructed
below as soon as possible but in no event later than May 31, 2012. Assuming
prompt and proper acknowledgement of your acceptance of this Award Agreement,
this Award will be effective as of the Award Date. Acceptance of this Award
Agreement constitutes your consent to any action taken under the Plan consistent
with its terms with respect to this Award and your agreement to be bound by the
restrictions contained in Section 14 and Exhibit A (“Post-Employment Conduct
Agreement”) and Exhibit B (“Stock Ownership Requirements”).

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Award Date: January 30, 2012

Page 2

 

Capitalized terms used in this Award Agreement which have a special meaning
either shall be defined in this Award Agreement or if not defined in this Award
Agreement shall have the meaning ascribed to the term in the Plan. The term
“Target Award” as used in this Award Agreement refers only to the Target Award
awarded to you under this Award Agreement and the term “Award” refers only to
the Long Term Incentive Performance Award set forth in this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries. Appendix A contains an index of all capitalized terms used in this
Award Agreement.

 

  Section 1. Target Award; Performance Period.

1.1 Target Award. Your Target Award for the Performance Period under this Award
Agreement shall be [Target].

1.2 Performance Period. The Performance Period under this Award Agreement is a
three-year performance period that runs from January 1, 2012, until December 31,
2014.

1.3 Payment of Award. The amount payable to you under your Award is dependent
upon the Corporation’s performance as compared to the metrics described in
Section 3 and Section 4 of this Award Agreement and your continued employment
with the Corporation in accordance with Section 5 of this Award Agreement. As a
result of these requirements, any payments you receive may be larger or smaller
than your Target Award (e.g., the performance factors could result in no payment
in respect of your Award).

 

  Section 2. Calculation of Award Payments.

2.1 End of Performance Period Calculation. Following the end of the Performance
Period and prior to any payments being made,

(a) The Committee will calculate the Total Stockholder Return Performance Factor
based on the Corporation’s performance during the Performance Period relative to
the performance of other corporations which compose the “Peer Performance Group”
as defined in Section 3.1 below.

(b) The Committee will calculate the ROIC Performance Factor based on the
Corporation’s ROIC during the Performance Period as compared to the projected
ROIC for the Performance Period in the 2012 Long Range Plan as presented at the
February 2012 Board meeting.

(c) The Committee will calculate the Cash Flow Performance Factor based on the
Corporation’s cumulative Cash Flow during the Performance Period as compared to
the projected cumulative Cash Flow in the 2012 Long Range Plan as presented at
the February 2012 Board meeting.

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Award Date: January 30, 2012

Page 3

 

(d) Your “Potential Award” shall be calculated by multiplying the weighted
average of the Total Stockholder Return Performance Factor, the ROIC Performance
Factor, and the Cash Flow Performance Factor by your Target Award. The Total
Stockholder Return Performance Factor, the ROIC Performance Factor, and the Cash
Flow Performance Factor shall be weighted as follows in determining the weighted
average of the three performance factors:

 

Total Stockholder Return Performance Factor

     50 % 

ROIC Performance Factor

     25 % 

Cash Flow Performance Factor

     25 % 

You must (except as specified in Section 5) remain employed by the Corporation
through December 31, 2014, to receive your Potential Award.

 

  Section 3. Total Stockholder Return Performance Factor.

3.1. Peer Performance Group. The Total Stockholder Return Performance Factor
will be based upon the relative ranking of the Corporation’s Average Total
Stockholder Return (as defined in Section 3.2(a)) for the Performance Period to
the Average Total Stockholder Return for such Period for each corporation in the
“Peer Performance Group.” The “Peer Performance Group” shall consist of the
corporations which compose the Standard and Poor’s 500 Aerospace and Defense
Index reported under symbol S5AERO by Bloomberg L.P. The Corporation’s Total
Stockholder Return will be based on the performance of its common stock, par
value $1.00. The Total Stockholder Return of each corporation that is taken into
account in computing the Peer Performance Group Total Stockholder Return will be
based on the equity security of the relevant corporation that is used in
computing the Standard and Poor’s 500 Aerospace and Defense Index.

3.2. Calculation of Total Stockholder Return Performance Factor.

(a) Calculation of Average Total Stockholder Return. During the Performance
Period, the Committee shall compute the Total Stockholder Return (as defined in
the Plan and assuming the reinvestment of any cash dividends) for the
Corporation and for each other corporation in the Peer Performance Group for
thirty-six (36) periods during the Performance Period where each period begins
on January 1, 2012 (based on the closing price for the stock on December 31,
2011) and ends on the last day of each successive calendar month in the
Performance Period on which the New York Stock Exchange is open for trading.
Each such Total Stockholder Return shall be computed from data available to the
public. At the end of the Performance Period, the thirty-six (36) Total
Stockholder Return figures for each corporation for the Performance Period will
be averaged to determine each corporation’s average Total Stockholder Return
(“Average TSR”) for the Performance Period. Each corporation’s Average TSR shall
be ranked among the Average TSR for each other corporation in the Peer
Performance Group on a percentile basis (using the Excel PERCENTRANK function).

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Award Date: January 30, 2012

Page 4

 

(b) Percentage Level of Target Award. Your Total Stockholder Return Performance
Factor, expressed as a percentage, will be determined under this Section 3.2(b)
(and Section 3.2(c) to the extent interpolation is necessary) based on the
Percentile Ranking (as determined under Section 3.2(a)) of the Corporation’s
Average TSR for the Performance Period under the following chart:

 

Band

  

Percentile Ranking

   Total Stockholder
Return Performance
Factor  

One

   75th or higher      200 % 

Two

   60th      150 % 

Three

   50th      100 % 

Four

   40th      50 % 

Five

   35th      25 % 

Six

   Below 35th      0 % 

(c) Total Stockholder Return Performance Factor Interpolation. If the Percentile
Ranking as determined under Section 3.2(a) puts the Corporation over the listed
Percentile Ranking for the applicable Band (other than Band One) in
Section 3.2(b), your Total Stockholder Return Performance Factor under
Section 3.2(b) shall be interpolated on a linear basis.

 

  Section 4. ROIC Performance Factor and Cash Flow Performance Factor.

4.1 ROIC Performance Factor. The ROIC Performance Factor will be determined by
comparing the Corporation’s ROIC for the Performance Period to ROIC as
forecasted for the Performance Period in the Corporation’s 2012 Long Range Plan
and then identifying the ROIC Performance Factor based upon the factor
associated with the difference on the following table:

 

Change from 2012 LRP

ROIC

   ROIC Performance
Factor  

Plan + 150 or more basis points

     200 % 

Plan + 120 basis points

     175 % 

Plan + 90 basis points

     150 % 

Plan + 60 basis points

     125 % 

Plan + 30 basis points

     100 % 

Plan

     75 % 

Plan – 15 basis points

     50 % 

Plan – 30 basis points

     25 % 

Plan – 45 or more basis points

     0 % 

(a) ROIC Definition. For purposes of this Award Agreement, “ROIC” means return
on invested capital for the Performance Period calculated as (A) average annual
(i) net income (excluding any charge or addition to net income resulting

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Award Date: January 30, 2012

Page 5

 

solely from adjustment of deferred tax assets and liabilities for the effect of
enactment of corporate tax reform and related legislation that adjusts United
States federal corporate income tax rates) plus (ii) interest expense times one
minus the highest marginal federal corporate tax rate over the three year
Performance Period (“Return”), divided by (B) the average of the four year-end
investment balances (beginning with December 31, 2011 year-end balance)
consisting of (i) debt (including current maturities of long-term debt) plus
(ii) stockholders’ equity plus the postretirement plans amounts determined at
year-end as included in the Corporation’s Statement of Stockholders’ Equity.

(b) ROIC Determination. Each component of ROIC and the calculation of any
postretirement plans amounts recorded in the Corporation’s Statement of
Stockholders’ Equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and be based upon
the comparable numbers reported on the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period on which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and postretirement plans
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph. Notwithstanding the foregoing, ROIC will be adjusted
to exclude the impact of any change in accounting standards or adoption of any
new accounting standards that is required under generally accepted accounting
principles in the United States and that is reported in the Corporation’s
filings with the Securities and Exchange Commission as having a material effect
on the Corporation’s consolidated financial statements. ROIC, as included in the
2012 Long Range Plan, and the change in ROIC for purposes of the ROIC
Performance Factor will be determined in accordance with this Section 4.1(b).

4.2 Cash Flow Performance Factor. The Cash Flow Performance Factor will be
determined by comparing the Corporation’s cumulative Cash Flow during the
Performance Period to the projected cumulative Cash Flow of the Corporation as
forecasted in the Corporation’s 2012 Long Range Plan, and then identifying the
Cash Flow Performance Factor based upon the factor associated with the change
from the 2012 Long Range Plan on the following table:

 

Change From 2012 LRP

Cash Flow

   Cash Flow Performance
Factor  

Plan + $2.7B or more

     200 % 

Plan + $2.3B

     175 % 

Plan + $2.0B

     150 % 

Plan + $1.7B

     125 % 

Plan + $1.0B

     100 % 

Plan + $0.3B

     75 % 

Plan

     50 % 

Plan - $0.3B

     25 % 

Plan - $0.7B or more

     0 % 

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Award Date: January 30, 2012

Page 6

 

  (a) Cash Flow Definition. For purposes of this Award Agreement, Cash Flow
means net cash flow from operations but not taking into account: (i) the
aggregate difference between the amount forecasted in the Corporation’s 2012
Long Range Plan to be contributed by the Corporation to the Corporation’s
defined benefit pension plans during the Performance Period and the actual
amounts contributed by the Corporation during the Performance Period; or
(ii) any tax payments or tax benefits during the Performance Period associated
with the divestiture of business units, other than tax payments or tax benefits
that were included in the Corporation’s 2012 Long Range Plan.

 

  (b) Cash Flow Determination. Cash Flow shall be determined by the Committee
based upon the comparable numbers reported on the Corporation’s audited
consolidated financial statements or, if audited financial statements are not
available for the period for which Cash Flow is being determined, the Committee
shall determine Cash Flow in a manner consistent with the historical practices
used by the Corporation in determining net cash provided by operating activities
as reported in its audited consolidated statement of cash flows, in either case
as modified by this paragraph.

4.3 Interpolation of ROIC and Cash Flow Metrics. If the change in ROIC or Cash
Flow falls between two numbers listed in the applicable table in Section 4.1 or
4.2, the appropriate factor will be interpolated on a linear basis.
Notwithstanding the foregoing, the ROIC Performance Factor will always be zero
if the ROIC for the Performance Period is less than ROIC forecasted for the
Performance Period in the 2012 Long Range Plan by 45 basis points or more and
the Cash Flow Performance Factor will always be zero if the aggregate Cash Flow
for the Performance Period is less than what was forecasted for the Performance
Period in the 2012 Long Range Plan by more than $0.7 billion.

 

  Section 5. Payment of Award.

5.1. Employment Requirement.

(a) General Rule. In order to be eligible to receive payment of your Potential
Award as determined under Section 2.1(d), you must accept this Award Agreement
and remain employed by the Corporation through the last day of the Performance
Period. Except as provided below, if your employment as an Employee terminates
during the Performance Period, you shall forfeit your right to receive all or
any part of your Potential Award.

(b) Exceptions. Notwithstanding Section 5.1(a), if the Committee determines

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Award Date: January 30, 2012

Page 7

 

(1) that your employment as an Employee terminated as a result of your death,
“Divestiture”, “Disability” or “Retirement” or

(2) that the Corporation terminated your employment involuntarily as a result of
a layoff,

you shall retain a fraction of your Potential Award. The numerator of such
fraction shall equal the number of days in the Performance Period before your
employment as an Employee terminated, and the denominator shall equal the total
number of days in the Performance Period. The Committee shall have complete and
absolute discretion to make the determinations called for under this
Section 5.1(b), and all such determinations shall be binding on you and on any
person who claims all or any part of your Potential Award on your behalf as well
as on the Corporation. If you terminate employment during the Performance Period
but are eligible to receive a portion of your Potential Award as a result of an
exception under this Section 5.1(b), payment of such portion of your Potential
Award shall be in full satisfaction of all rights you have under this Award
Agreement.

(c) Special Definitions. For purposes of this Award Agreement:

(1) Your employment as an Employee shall be treated as terminating because of a
Disability on the date you become eligible for a benefit under the Corporation’s
long-term disability plan in which you participate, or if you are not enrolled
in a long-term disability plan, the date on which long-term disability benefits
would commence under the plan under which you would have been covered, had you
enrolled;

(2) Your employment as an Employee shall be treated as terminating as a result
of Divestiture if the Corporation divests all or substantially all of a business
operation of the Corporation and such divestiture results in the termination of
your employment with the Corporation and a transfer of such employment to the
other party in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and

(3) Your employment as an Employee shall be treated as terminating because of
Retirement if (a) you participate in a defined benefit pension plan maintained
by the Corporation, and your employment terminates on or after the date on which
you satisfy the plan’s age and service requirements for commencing receipt of an
early retirement benefit under the plan or (b) you do not participate in a
defined benefit pension plan maintained by the Corporation, and your employment
terminates after (i) you reach age 65, or (ii) you reach age 55 and have
completed five years of service.

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Award Date: January 30, 2012

Page 8

 

5.2. Payment Rules.

(a) General Rule: Vesting; Method of Payment. If you are eligible to receive
all, or a portion of, your Potential Award under Section 5.1, your Potential
Award shall be fully vested on the date on which the Committee certifies in
writing (for purposes of Section 162(m) of the Code) that your Target Award has
become a Potential Award for the Performance Period, and shall be either paid in
cash to you or deferred in accordance with Section 5.2(c). Subject to
Section 5.2(c), in the event of your death, your payment will be made to your
estate if you do not have a properly completed beneficiary designation form on
file with the Vice President of Total Rewards and Performance Management.

(b) Timing of Payment. Subject to Section 5.2(c), you shall have the right to
receive your Potential Award in cash as soon as administratively practicable,
but no later than ninety (90) days after the date on which the Committee
certifies in writing (for purposes of Section 162(m) of the Code) that your
Target Award has become a Potential Award for the Performance Period, but no
later than March 15 following such certification date.

(c) Deferral. You will be given an opportunity to elect to defer any amounts
payable under Section 5.2 of this Award Agreement. Such election shall be
irrevocable, shall be made in accordance with the terms of the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan (“DMICP”) and the
requirements of Code section 409A, and shall be subject to such additional terms
and conditions as are set by the Committee. A deferral election form and the
terms and conditions for any deferral will be furnished to you in due course.
The beneficiary designation for the DMICP (rather than the beneficiary
designation for this Long Term Incentive Performance Award) shall govern any
amounts deferred under the terms of the DMICP.

5.3. Cutback. Any payment called for under Section 5.2 will be reduced to the
extent that such payment together with payments attributable to any other
Cash-Based Awards that are granted during 2012 as Performance Based Awards
exceeds $10,000,000. Amounts in excess of $10,000,000 shall be forfeited.

5.4. Withholding. Any payment made in respect of your Award will be subject to
income tax withholding at the minimum rate prescribed by law. You may owe taxes
in addition to the amount withheld and may request that tax be withheld at a
greater rate. As required under the law, FICA tax will be collected from you or
withheld from the amount of your award or from your wages, when any portion of
an award becomes vested for tax purposes prior to payment.

5.5. Means of Satisfying Code Section 409A. If any payment that would otherwise
be made under this Award Agreement is required to be delayed by reason of

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Award Date: January 30, 2012

Page 9

 

Section 13, such payment shall be made at the earliest date permitted by Code
section 409A. The amount of any delayed payment shall be the amount that would
have been paid prior to the delay adjusted to include interest from the original
payment date to the actual payment date, at a rate equivalent to the six month
London Interbank Offered Rate (LIBOR) as published in the Money Rates section of
the Wall Street Journal, plus 25 basis points. The increase over LIBOR may be
adjusted to reflect the six month unsecured borrowing rate of the Corporation.

 

  Section 6. No Assignment – General Creditor Status.

You shall have no right to assign any interest you might have in all or any part
of the Target Award or Potential Award which has been granted to you under this
Award Agreement and any attempt to do so shall be null and void and shall have
no force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement shall be made in cash from the Corporation’s general assets, and
your right to payment from the Corporation’s general assets shall be the same as
the right of a general and unsecured creditor of the Corporation.

 

  Section 7. Plan.

This Award Agreement shall be subject to all of the terms and conditions set
forth in the Plan.

 

  Section 8. Change in Control.

8.1. Change in Control During Performance Period. If during the Performance
Period, a Change in Control (as defined in Section 7 of the Plan) occurs, the
Performance Period will terminate. Notwithstanding any deferral election or term
of this Award Agreement to the contrary, a pro rata portion of your Award will
be paid to you within fifteen (15) days of the Change in Control. The prorated
portion will be the sum of (i) the result obtained by first multiplying your
Target Award by the Total Stockholder Return Performance Factor calculated under
Section 3.2(b), but based upon the Total Stockholder Return for the Corporation
and the Peer Performance Group as of the last day of the month immediately
preceding the Change in Control, and then further multiplying that product by a
fraction, the numerator of which is the number of days in the Performance Period
prior to the Change in Control and the denominator of which is the total number
of days in the Performance Period.

8.2. Special Rule. Notwithstanding Section 8.1, if a payment in accordance with
those provisions would result in a nonexempt short-swing transaction under
Section 16(b) of the Securities Exchange Act of 1934, then the date of
distribution to you shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt short-swing transaction or
would otherwise not result in liability under Section 16(b) of the Securities
Exchange Act of 1934.

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Award Date: January 30, 2012

Page 10

 

  Section 9. Amendment and Termination.

As provided in Section 9 of the Plan, the Board of Directors may at any time
amend, suspend or discontinue the Plan and the Committee may at any time amend
this Award Agreement. Notwithstanding the foregoing, no such action by the Board
of Directors or the Committee shall amend Sections 1, 2, 3, 4, or 5 in a manner
adverse to you or reduce the amount payable hereunder in a material manner
without your written consent. For this purpose, a change in the amount payable
hereunder that occurs solely by reason of a change in the date or form of
payment shall in no case be treated as a reduction prohibited by this Section 9.
Thus, for example, if an amount payable by reason of Section 8 is delayed by an
amendment to this Award Agreement or other action undertaken to comply with
Section 409A of the Internal Revenue Code and the amount payable is reduced
solely by reason of a corresponding delay in the date of valuation of a share of
the Corporation’s common stock, such a change shall not be treated as a
reduction prohibited by this Section 9. This Section 9 shall be construed and
applied so as to permit the Committee to amend this Award Agreement at any time
in any manner reasonably necessary or appropriate in order to comply with the
requirements of Section 16 of the Securities Exchange Act of 1934 and of Code
section 409A, including amendments regarding the timing and form of payments
hereunder.

 

  Section 10.   No Right to an Award; Value of Award.

Your status as an Employee shall not be construed as a commitment that any one
or more awards shall be made under the Plan to you or to Employees generally.
Your status as a Participant shall not entitle you to any additional award. The
value of the Award will not be taken into account for other benefits offered by
the Corporation, including but not limited to pension benefits.

 

  Section 11.   No Assurance of Employment.

Nothing contained in the Plan or in this Award Agreement shall confer upon you
any right to continue in the employ or other service of the Corporation or
constitute any contract (of employment or otherwise) or limit in any way the
right of the Corporation to change your compensation or other benefits or to
terminate your employment with or without cause.

 

  Section 12.   Conflict.

In the event of a conflict between this Award Agreement and the Plan, the Plan
document shall control.

 

  Section 13.   Compliance with Section 409A of the Internal Revenue Code.

Notwithstanding any other provision of this Award Agreement to the contrary, to
the extent that this Award Agreement constitutes a nonqualified deferred
compensation plan to which Code section 409A applies, payments under this Award
Agreement shall be made at a time and in a manner that satisfies the
requirements of Code section 409A and

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Award Date: January 30, 2012

Page 11

 

guidance of general applicability issued thereunder, including the provisions of
409A(a)(2)(B)(i) to the extent distributions to any specified employee are
required to be delayed six months, and all terms shall be interpreted in
accordance with Code section 409A.

 

  Section 14.   Post-Employment Covenants & Stock Ownership Requirements.

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement and you acknowledge receipt of the Stock Ownership
Requirements (“Ownership Requirements”) attached as Exhibit B to this Award
Agreement and agree to comply with such Ownership Requirements. If you are not a
Vice President (or above) on January 30, 2012, but you are promoted to Vice
President (or above) prior to January 30, 2015, the Ownership Requirements shall
become applicable to you on the date of your promotion to Vice President (or
above).

 

  Section 15.   Execution.

No Award is enforceable until you properly acknowledge your acceptance by
returning an executed copy of this Award Agreement, as soon as possible but in
no event later than May 31, 2012, to the Vice President of Total Rewards and
Performance Management, Lockheed Martin Corporation, Mail Point 123, 6801
Rockledge Drive, Bethesda, MD 20817.

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Page 12

 

By signing this Award Agreement, you consent to receive copies of the Prospectus
applicable to this Award from this internet site (http://www.benefitaccess.com)
as well as to electronic delivery of the Corporation’s annual report on Form
10-K, annual proxy and quarterly reports on Form 10-Q. This consent can only be
withdrawn by written notice to the Senior Vice President, General Counsel, and
Corporate Secretary, Lockheed Martin Corporation, 6801 Rockledge Drive,
Bethesda, MD 20817.

A pre-addressed envelope has been enclosed for your convenience to return with a
copy of this Award Agreement, as acknowledged by you below.

 

Sincerely, David A. Filomeo Vice President

Total Rewards and Performance

Management

Enclosures

ACKNOWLEDGEMENT:

 

 

   

Signature     Date

 

    Print or type name    

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Award Date: January 30, 2012

Page 13

 

Appendix A

Capitalized Terms

 

Average TSR    § 3.2(a) Award    3rd ¶ Cash Flow    § 4.2(a) Cash Flow
Performance Factor    § 4.2 Change of Control    Plan Committee    1st ¶
Corporation    3rd ¶ Peer Performance Group    § 3.1 Performance Period    § 1.2
Plan    1st ¶ Potential Award    § 2.1(d) ROIC    § 4.1(a) ROIC Performance
Factor    § 4.1 Subsidiary    Plan Target Award    3rd ¶, § 1.1 Total
Stockholder Return    Plan; 3.2(a) Total Stockholder Return Performance   
§ 3.1; § 3.2 Factor   

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Page 14

 

Exhibit A

Post Employment Conduct Agreement

(LTIP Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of a Long Term Incentive Performance Award to me under the Award Agreement (the
“LTIP”) pursuant to the Lockheed Martin Corporation 2011 Incentive Performance
Award Plan (the “Plan”). References to the “Corporation” shall include Lockheed
Martin Corporation and its Subsidiaries. By accepting the LTIP, I agree as
follows:

1. Protective Covenants

(a) Protection of Proprietary Information, including Trade Secrets and
Confidential Information – Except to the extent required by law, following my
Termination Date, and in conformance with the provisions of the California
Uniform Trade Secrets Act (Cal. Civil Code § 3426, et seq.) and the California
Unfair Competition Law (Cal. Business and Professional Code § 17220 et seq.), I
will have a continuing obligation to comply with the terms of any non-disclosure
or similar agreements that I signed while employed by the Corporation committing
to hold confidential the “Confidential or Proprietary Information” (as defined
below) of the Corporation or any of its affiliates, subsidiaries, related
companies, joint ventures, partnerships, customers, suppliers, partners,
contractors or agents, in each case in accordance with the terms of such
agreements. I will not use or disclose or allow the use or disclosure by others
to any person or entity, for the purpose or effect of competing unfairly with
the Corporation, of Confidential or Proprietary Information of the Corporation
or others to which I had access or that I was responsible for creating or
overseeing during my employment with the Corporation. In the event I become
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or otherwise) to disclose any proprietary
or confidential information, I will immediately notify the Corporation’s Senior
Vice President, General Counsel, and Corporate Secretary as to the existence of
the obligation and will cooperate with any reasonable request by the Corporation
for assistance in seeking to protect the information. All materials to which I
have had access, or which were furnished or otherwise made available to me in
connection with my employment with the Corporation shall be and remain the
property of the Corporation. For purposes of this PECA, “Confidential or
Proprietary Information” means Proprietary Information within the meaning of CPS
710 (a copy of which has been made available to me), including but not limited
to information that a person or entity desires to protect from unauthorized
disclosure to third parties that can provide the person or entity with a
business, technological, or economic advantage over its competitors, or which,
if known or used by third parties or if used by the person’s or entity’s
employees or agents in an unauthorized manner, might be detrimental to the
person’s or entity’s interests. Confidential or Proprietary Information may
include, but is not limited to:

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Award Date: January 30, 2012

Page 15

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes; or

 

  (iii) any information protected by the California Uniform Trade Secrets Act
(Cal. Civil Code § 3426, et seq.).

(b) Non-Solicit – Without the express written consent of the Senior Vice
President, Human Resources of the Corporation, during the one-year period
following the Termination Date, I will not induce or attempt to induce any
person who is an employee of the Corporation to perform work or services for any
entity other than the Corporation. This provision does not prevent the hiring of
such persons so long as they are not induced to be one employed in violation of
this provision.

(c) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(d) Cooperation in Litigation and Investigations – Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and

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Award Date: January 30, 2012

Page 16

 

that the grant of the LTIP is expressly made contingent upon my agreements with
the Corporation set forth in this PECA. I acknowledge that the scope and
duration of the restrictions in Section 1 are necessary to be effective and are
fair and reasonable in light of the value of the benefits and compensation
opportunities being made available to me under the Award Agreement. I further
acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

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Award Date: January 30, 2012

Page 17

 

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the LTIP, any cash paid to me, whether paid
currently or deferred; and (ii) to the extent I have not earned the LTIP fully,
all of my remaining rights, title or interest in the LTIP.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the LTIP to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of an LTIP under
the Award Agreement and is not contingent on the vesting of the LTIP.

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Award Date: January 30, 2012

Page 18

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

   Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

LTIP PECA Attorney (performance)

Award Date: January 30, 2012

 

LOGO [g221578g10c79.jpg]

Lockheed Martin Corporation

6801 Rockledge Drive, Bethesda, MD 20817

Telephone 301-897-6000

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

«Name»

«Street»

«City», «State» «Zip»

 

  Re: Lockheed Martin Corporation 2011 Incentive Performance Award Plan:
Long-Term Incentive Performance Award (2012-2014 Performance Period)

Dear «Call_By_Name»:

On behalf of the Management Development and Compensation Committee (the
“Committee”) of the Board of Directors of Lockheed Martin Corporation, I am
pleased to tell you that you have been granted a Long-Term Incentive Performance
Award under the Corporation’s 2011 Incentive Performance Award Plan (the
“Plan”). The purpose of this letter is to serve as the Award Agreement under
such Plan and to set forth your Target Award as well as the terms and conditions
to the payment of your Target Award. Additional terms and conditions are set
forth in the Plan and in the Prospectus relating to the Plan of which the Plan
document and this Award Agreement are a part. The Prospectus is available at
http://www.benefitaccess.com. You should retain the Prospectus and the attached
copy of the Plan in your records.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by returning an executed copy of this Award Agreement to
the Vice President of Total Rewards and Performance Management as instructed
below as soon as possible but in no event later than May 31, 2012. Assuming
prompt and proper acknowledgement of your acceptance of this Award Agreement,
this Award will be effective as of the Award Date. Acceptance of this Award
Agreement constitutes your consent to any action taken under the Plan consistent
with its terms with respect to this Award and your agreement to be bound by the
restrictions contained in Section 14 and Exhibit A (“Post-Employment Conduct
Agreement”) and Exhibit B (“Stock Ownership Requirements”).

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Award Date: January 30, 2012

Page 2

 

Capitalized terms used in this Award Agreement which have a special meaning
either shall be defined in this Award Agreement or if not defined in this Award
Agreement shall have the meaning ascribed to the term in the Plan. The term
“Target Award” as used in this Award Agreement refers only to the Target Award
awarded to you under this Award Agreement and the term “Award” refers only to
the Long Term Incentive Performance Award set forth in this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries. Appendix A contains an index of all capitalized terms used in this
Award Agreement.

 

  Section 1. Target Award; Performance Period.

1.1 Target Award. Your Target Award for the Performance Period under this Award
Agreement shall be [Target].

1.2 Performance Period. The Performance Period under this Award Agreement is a
three-year performance period that runs from January 1, 2012, until December 31,
2014.

1.3 Payment of Award. The amount payable to you under your Award is dependent
upon the Corporation’s performance as compared to the metrics described in
Section 3 and Section 4 of this Award Agreement and your continued employment
with the Corporation in accordance with Section 5 of this Award Agreement. As a
result of these requirements, any payments you receive may be larger or smaller
than your Target Award (e.g., the performance factors could result in no payment
in respect of your Award).

 

  Section 2. Calculation of Award Payments.

2.1 End of Performance Period Calculation. Following the end of the Performance
Period and prior to any payments being made,

(a) The Committee will calculate the Total Stockholder Return Performance Factor
based on the Corporation’s performance during the Performance Period relative to
the performance of other corporations which compose the “Peer Performance Group”
as defined in Section 3.1 below.

(b) The Committee will calculate the ROIC Performance Factor based on the
Corporation’s ROIC during the Performance Period as compared to the projected
ROIC for the Performance Period in the 2012 Long Range Plan as presented at the
February 2012 Board meeting.

(c) The Committee will calculate the Cash Flow Performance Factor based on the
Corporation’s cumulative Cash Flow during the Performance Period as compared to
the projected cumulative Cash Flow in the 2012 Long Range Plan as presented at
the February 2012 Board meeting.

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Award Date: January 30, 2012

Page 3

 

(d) Your “Potential Award” shall be calculated by multiplying the weighted
average of the Total Stockholder Return Performance Factor, the ROIC Performance
Factor, and the Cash Flow Performance Factor by your Target Award. The Total
Stockholder Return Performance Factor, the ROIC Performance Factor, and the Cash
Flow Performance Factor shall be weighted as follows in determining the weighted
average of the three performance factors:

 

Total Stockholder Return Performance Factor

     50 % 

ROIC Performance Factor

     25 % 

Cash Flow Performance Factor

     25 % 

You must (except as specified in Section 5) remain employed by the Corporation
through December 31, 2014, to receive your Potential Award.

 

  Section 3. Total Stockholder Return Performance Factor.

3.1. Peer Performance Group. The Total Stockholder Return Performance Factor
will be based upon the relative ranking of the Corporation’s Average Total
Stockholder Return (as defined in Section 3.2(a)) for the Performance Period to
the Average Total Stockholder Return for such Period for each corporation in the
“Peer Performance Group.” The “Peer Performance Group” shall consist of the
corporations which compose the Standard and Poor’s 500 Aerospace and Defense
Index reported under symbol S5AERO by Bloomberg L.P. The Corporation’s Total
Stockholder Return will be based on the performance of its common stock, par
value $1.00. The Total Stockholder Return of each corporation that is taken into
account in computing the Peer Performance Group Total Stockholder Return will be
based on the equity security of the relevant corporation that is used in
computing the Standard and Poor’s 500 Aerospace and Defense Index.

3.2. Calculation of Total Stockholder Return Performance Factor.

(a) Calculation of Average Total Stockholder Return. During the Performance
Period, the Committee shall compute the Total Stockholder Return (as defined in
the Plan and assuming the reinvestment of any cash dividends) for the
Corporation and for each other corporation in the Peer Performance Group for
thirty-six (36) periods during the Performance Period where each period begins
on January 1, 2012 (based on the closing price for the stock on December 31,
2011) and ends on the last day of each successive calendar month in the
Performance Period on which the New York Stock Exchange is open for trading.
Each such Total Stockholder Return shall be computed from data available to the
public. At the end of the Performance Period, the thirty-six (36) Total
Stockholder Return figures for each corporation for the Performance Period will
be averaged to determine each corporation’s average Total Stockholder Return
(“Average TSR”) for the Performance Period. Each corporation’s Average TSR shall
be ranked among the Average TSR for each other corporation in the Peer
Performance Group on a percentile basis (using the Excel PERCENTRANK function).

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Award Date: January 30, 2012

Page 4

 

(b) Percentage Level of Target Award. Your Total Stockholder Return Performance
Factor, expressed as a percentage, will be determined under this Section 3.2(b)
(and Section 3.2(c) to the extent interpolation is necessary) based on the
Percentile Ranking (as determined under Section 3.2(a)) of the Corporation’s
Average TSR for the Performance Period under the following chart:

 

Band

  

Percentile Ranking

   Total Stockholder
Return Performance
Factor  

One

   75th or higher      200 % 

Two

   60th      150 % 

Three

   50th      100 % 

Four

   40th      50 % 

Five

   35th      25 % 

Six

   Below 35th      0 % 

(c) Total Stockholder Return Performance Factor Interpolation. If the Percentile
Ranking as determined under Section 3.2(a) puts the Corporation over the listed
Percentile Ranking for the applicable Band (other than Band One) in
Section 3.2(b), your Total Stockholder Return Performance Factor under
Section 3.2(b) shall be interpolated on a linear basis.

 

  Section 4. ROIC Performance Factor and Cash Flow Performance Factor.

4.1 ROIC Performance Factor. The ROIC Performance Factor will be determined by
comparing the Corporation’s ROIC for the Performance Period to ROIC as
forecasted for the Performance Period in the Corporation’s 2012 Long Range Plan
and then identifying the ROIC Performance Factor based upon the factor
associated with the difference on the following table:

 

Change from 2012 LRP

ROIC

   ROIC Performance
Factor  

Plan + 150 or more basis points

     200 % 

Plan + 120 basis points

     175 % 

Plan + 90 basis points

     150 % 

Plan + 60 basis points

     125 % 

Plan + 30 basis points

     100 % 

Plan

     75 % 

Plan – 15 basis points

     50 % 

Plan – 30 basis points

     25 % 

Plan – 45 or more basis points

     0 % 

(a) ROIC Definition. For purposes of this Award Agreement, “ROIC” means return
on invested capital for the Performance Period calculated as (A) average annual
(i) net income (excluding any charge or addition to net income resulting

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Award Date: January 30, 2012

Page 5

 

solely from adjustment of deferred tax assets and liabilities for the effect of
enactment of corporate tax reform and related legislation that adjusts United
States federal corporate income tax rates) plus (ii) interest expense times one
minus the highest marginal federal corporate tax rate over the three year
Performance Period (“Return”), divided by (B) the average of the four year-end
investment balances (beginning with December 31, 2011 year-end balance)
consisting of (i) debt (including current maturities of long-term debt) plus
(ii) stockholders’ equity plus the postretirement plans amounts determined at
year-end as included in the Corporation’s Statement of Stockholders’ Equity.

(b) ROIC Determination. Each component of ROIC and the calculation of any
postretirement plans amounts recorded in the Corporation’s Statement of
Stockholders’ Equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and be based upon
the comparable numbers reported on the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period on which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and postretirement plans
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph. Notwithstanding the foregoing, ROIC will be adjusted
to exclude the impact of any change in accounting standards or adoption of any
new accounting standards that is required under generally accepted accounting
principles in the United States and that is reported in the Corporation’s
filings with the Securities and Exchange Commission as having a material effect
on the Corporation’s consolidated financial statements. ROIC, as included in the
2012 Long Range Plan, and the change in ROIC for purposes of the ROIC
Performance Factor will be determined in accordance with this Section 4.1(b).

4.2 Cash Flow Performance Factor. The Cash Flow Performance Factor will be
determined by comparing the Corporation’s cumulative Cash Flow during the
Performance Period to the projected cumulative Cash Flow of the Corporation as
forecasted in the Corporation’s 2012 Long Range Plan, and then identifying the
Cash Flow Performance Factor based upon the factor associated with the change
from the 2012 Long Range Plan on the following table:

 

Change From 2012 LRP

Cash Flow

   Cash Flow Performance
Factor  

Plan + $2.7B or more

     200 % 

Plan + $2.3B

     175 % 

Plan + $2.0B

     150 % 

Plan + $1.7B

     125 % 

Plan + $1.0B

     100 % 

Plan + $0.3B

     75 % 

Plan

     50 % 

Plan - $0.3B

     25 % 

Plan - $0.7B or more

     0 % 

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Award Date: January 30, 2012

Page 6

 

(a) Cash Flow Definition. For purposes of this Award Agreement, Cash Flow means
net cash flow from operations but not taking into account: (i) the aggregate
difference between the amount forecasted in the Corporation’s 2012 Long Range
Plan to be contributed by the Corporation to the Corporation’s defined benefit
pension plans during the Performance Period and the actual amounts contributed
by the Corporation during the Performance Period; or (ii) any tax payments or
tax benefits during the Performance Period associated with the divestiture of
business units, other than tax payments or tax benefits that were included in
the Corporation’s 2012 Long Range Plan.

(b) Cash Flow Determination. Cash Flow shall be determined by the Committee
based upon the comparable numbers reported on the Corporation’s audited
consolidated financial statements or, if audited financial statements are not
available for the period for which Cash Flow is being determined, the Committee
shall determine Cash Flow in a manner consistent with the historical practices
used by the Corporation in determining net cash provided by operating activities
as reported in its audited consolidated statement of cash flows, in either case
as modified by this paragraph.

4.3 Interpolation of ROIC and Cash Flow Metrics. If the change in ROIC or Cash
Flow falls between two numbers listed in the applicable table in Section 4.1 or
4.2, the appropriate factor will be interpolated on a linear basis.
Notwithstanding the foregoing, the ROIC Performance Factor will always be zero
if the ROIC for the Performance Period is less than ROIC forecasted for the
Performance Period in the 2012 Long Range Plan by 45 basis points or more and
the Cash Flow Performance Factor will always be zero if the aggregate Cash Flow
for the Performance Period is less than what was forecasted for the Performance
Period in the 2012 Long Range Plan by more than $0.7 billion.

 

  Section 5. Payment of Award.

5.1. Employment Requirement.

(a) General Rule. In order to be eligible to receive payment of your Potential
Award as determined under Section 2.1(d), you must accept this Award Agreement
and remain employed by the Corporation through the last day of the Performance
Period. Except as provided below, if your employment as an Employee terminates
during the Performance Period, you shall forfeit your right to receive all or
any part of your Potential Award.

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Award Date: January 30, 2012

Page 7

 

(b) Exceptions. Notwithstanding Section 5.1(a), if the Committee determines

(1) that your employment as an Employee terminated as a result of your death,
“Divestiture”, “Disability” or “Retirement” or

(2) that the Corporation terminated your employment involuntarily as a result of
a layoff,

you shall retain a fraction of your Potential Award. The numerator of such
fraction shall equal the number of days in the Performance Period before your
employment as an Employee terminated, and the denominator shall equal the total
number of days in the Performance Period. The Committee shall have complete and
absolute discretion to make the determinations called for under this
Section 5.1(b), and all such determinations shall be binding on you and on any
person who claims all or any part of your Potential Award on your behalf as well
as on the Corporation. If you terminate employment during the Performance Period
but are eligible to receive a portion of your Potential Award as a result of an
exception under this Section 5.1(b), payment of such portion of your Potential
Award shall be in full satisfaction of all rights you have under this Award
Agreement.

(c) Special Definitions. For purposes of this Award Agreement:

(1) Your employment as an Employee shall be treated as terminating because of a
Disability on the date you become eligible for a benefit under the Corporation’s
long-term disability plan in which you participate, or if you are not enrolled
in a long-term disability plan, the date on which long-term disability benefits
would commence under the plan under which you would have been covered, had you
enrolled;

(2) Your employment as an Employee shall be treated as terminating as a result
of Divestiture if the Corporation divests all or substantially all of a business
operation of the Corporation and such divestiture results in the termination of
your employment with the Corporation and a transfer of such employment to the
other party in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and

(3) Your employment as an Employee shall be treated as terminating because of
Retirement if (a) you participate in a defined benefit pension plan maintained
by the Corporation, and your employment terminates on or after the date on which
you satisfy the plan’s age and service requirements for commencing receipt of an
early retirement benefit under the plan or (b) you do not participate in a
defined benefit pension plan maintained by the Corporation, and your employment
terminates after (i) you reach age 65, or (ii) you reach age 55 and have
completed five years of service.

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Award Date: January 30, 2012

Page 8

 

5.2. Payment Rules.

(a) General Rule: Vesting; Method of Payment. If you are eligible to receive
all, or a portion of, your Potential Award under Section 5.1, your Potential
Award shall be fully vested on the date on which the Committee certifies in
writing (for purposes of Section 162(m) of the Code) that your Target Award has
become a Potential Award for the Performance Period, and shall be either paid in
cash to you or deferred in accordance with Section 5.2(c). Subject to
Section 5.2(c), in the event of your death, your payment will be made to your
estate if you do not have a properly completed beneficiary designation form on
file with the Vice President of Total Rewards and Performance Management.

(b) Timing of Payment. Subject to Section 5.2(c), you shall have the right to
receive your Potential Award in cash as soon as administratively practicable,
but no later than ninety (90) days after the date on which the Committee
certifies in writing (for purposes of Section 162(m) of the Code) that your
Target Award has become a Potential Award for the Performance Period, but no
later than March 15 following such certification date.

(c) Deferral. You will be given an opportunity to elect to defer any amounts
payable under Section 5.2 of this Award Agreement. Such election shall be
irrevocable, shall be made in accordance with the terms of the Lockheed Martin
Corporation Deferred Management Incentive Compensation Plan (“DMICP”) and the
requirements of Code section 409A, and shall be subject to such additional terms
and conditions as are set by the Committee. A deferral election form and the
terms and conditions for any deferral will be furnished to you in due course.
The beneficiary designation for the DMICP (rather than the beneficiary
designation for this Long Term Incentive Performance Award) shall govern any
amounts deferred under the terms of the DMICP.

5.3. Cutback. Any payment called for under Section 5.2 will be reduced to the
extent that such payment together with payments attributable to any other
Cash-Based Awards that are granted during 2012 as Performance Based Awards
exceeds $10,000,000. Amounts in excess of $10,000,000 shall be forfeited.

5.4. Withholding. Any payment made in respect of your Award will be subject to
income tax withholding at the minimum rate prescribed by law. You may owe taxes
in addition to the amount withheld and may request that tax be withheld at a
greater rate. As required under the law, FICA tax will be collected from you or
withheld from the amount of your award or from your wages, when any portion of
an award becomes vested for tax purposes prior to payment.

5.5. Means of Satisfying Code Section 409A. If any payment that would otherwise
be made under this Award Agreement is required to be delayed by reason of

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Award Date: January 30, 2012

Page 9

 

Section 13, such payment shall be made at the earliest date permitted by Code
section 409A. The amount of any delayed payment shall be the amount that would
have been paid prior to the delay adjusted to include interest from the original
payment date to the actual payment date, at a rate equivalent to the six month
London Interbank Offered Rate (LIBOR) as published in the Money Rates section of
the Wall Street Journal, plus 25 basis points. The increase over LIBOR may be
adjusted to reflect the six month unsecured borrowing rate of the Corporation.

 

  Section 6. No Assignment – General Creditor Status.

You shall have no right to assign any interest you might have in all or any part
of the Target Award or Potential Award which has been granted to you under this
Award Agreement and any attempt to do so shall be null and void and shall have
no force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement shall be made in cash from the Corporation’s general assets, and
your right to payment from the Corporation’s general assets shall be the same as
the right of a general and unsecured creditor of the Corporation.

 

  Section 7. Plan.

This Award Agreement shall be subject to all of the terms and conditions set
forth in the Plan.

 

  Section 8. Change in Control.

8.1. Change in Control During Performance Period. If during the Performance
Period, a Change in Control (as defined in Section 7 of the Plan) occurs, the
Performance Period will terminate. Notwithstanding any deferral election or term
of this Award Agreement to the contrary, a pro rata portion of your Award will
be paid to you within fifteen (15) days of the Change in Control. The prorated
portion will be the sum of (i) the result obtained by first multiplying your
Target Award by the Total Stockholder Return Performance Factor calculated under
Section 3.2(b), but based upon the Total Stockholder Return for the Corporation
and the Peer Performance Group as of the last day of the month immediately
preceding the Change in Control, and then further multiplying that product by a
fraction, the numerator of which is the number of days in the Performance Period
prior to the Change in Control and the denominator of which is the total number
of days in the Performance Period.

8.2. Special Rule. Notwithstanding Section 8.1, if a payment in accordance with
those provisions would result in a nonexempt short-swing transaction under
Section 16(b) of the Securities Exchange Act of 1934, then the date of
distribution to you shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt short-swing transaction or
would otherwise not result in liability under Section 16(b) of the Securities
Exchange Act of 1934.

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  Section 9. Amendment and Termination.

As provided in Section 9 of the Plan, the Board of Directors may at any time
amend, suspend or discontinue the Plan and the Committee may at any time amend
this Award Agreement. Notwithstanding the foregoing, no such action by the Board
of Directors or the Committee shall amend Sections 1, 2, 3, 4, or 5 in a manner
adverse to you or reduce the amount payable hereunder in a material manner
without your written consent. For this purpose, a change in the amount payable
hereunder that occurs solely by reason of a change in the date or form of
payment shall in no case be treated as a reduction prohibited by this Section 9.
Thus, for example, if an amount payable by reason of Section 8 is delayed by an
amendment to this Award Agreement or other action undertaken to comply with
Section 409A of the Internal Revenue Code and the amount payable is reduced
solely by reason of a corresponding delay in the date of valuation of a share of
the Corporation’s common stock, such a change shall not be treated as a
reduction prohibited by this Section 9. This Section 9 shall be construed and
applied so as to permit the Committee to amend this Award Agreement at any time
in any manner reasonably necessary or appropriate in order to comply with the
requirements of Section 16 of the Securities Exchange Act of 1934 and of Code
section 409A, including amendments regarding the timing and form of payments
hereunder.

 

  Section 10.   No Right to an Award; Value of Award.

Your status as an Employee shall not be construed as a commitment that any one
or more awards shall be made under the Plan to you or to Employees generally.
Your status as a Participant shall not entitle you to any additional award. The
value of the Award will not be taken into account for other benefits offered by
the Corporation, including but not limited to pension benefits.

 

  Section 11.   No Assurance of Employment.

Nothing contained in the Plan or in this Award Agreement shall confer upon you
any right to continue in the employ or other service of the Corporation or
constitute any contract (of employment or otherwise) or limit in any way the
right of the Corporation to change your compensation or other benefits or to
terminate your employment with or without cause.

 

  Section 12.   Conflict.

In the event of a conflict between this Award Agreement and the Plan, the Plan
document shall control.

 

  Section 13.   Compliance with Section 409A of the Internal Revenue Code.

Notwithstanding any other provision of this Award Agreement to the contrary, to
the extent that this Award Agreement constitutes a nonqualified deferred
compensation plan to which Code section 409A applies, payments under this Award
Agreement shall be

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Award Date: January 30, 2012

Page 11

 

made at a time and in a manner that satisfies the requirements of Code section
409A and guidance of general applicability issued thereunder, including the
provisions of 409A(a)(2)(B)(i) to the extent distributions to any specified
employee are required to be delayed six months, and all terms shall be
interpreted in accordance with Code section 409A.

 

  Section 14.   Post-Employment Covenants & Stock Ownership Requirements.

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement and you acknowledge receipt of the Stock Ownership
Requirements (“Ownership Requirements”) attached as Exhibit B to this Award
Agreement and agree to comply with such Ownership Requirements. If you are not a
Vice President (or above) on January 30, 2012, but you are promoted to Vice
President (or above) prior to January 30, 2015, the Ownership Requirements shall
become applicable to you on the date of your promotion to Vice President (or
above).

 

  Section 15.   Execution.

No Award is enforceable until you properly acknowledge your acceptance by
returning an executed copy of this Award Agreement, as soon as possible but in
no event later than May 31, 2012, to the Vice President of Total Rewards and
Performance Management, Lockheed Martin Corporation, Mail Point 123, 6801
Rockledge Drive, Bethesda, MD 20817.

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Page 12

 

By signing this Award Agreement, you consent to receive copies of the Prospectus
applicable to this Award from this internet site (http://www.benefitaccess.com)
as well as to electronic delivery of the Corporation’s annual report on Form
10-K, annual proxy and quarterly reports on Form 10-Q. This consent can only be
withdrawn by written notice to the Senior Vice President, General Counsel, and
Corporate Secretary, Lockheed Martin Corporation, 6801 Rockledge Drive,
Bethesda, MD 20817.

A pre-addressed envelope has been enclosed for your convenience to return with a
copy of this Award Agreement, as acknowledged by you below.

 

Sincerely, David A. Filomeo Vice President Total Rewards and Performance
Management

Enclosures

ACKNOWLEDGEMENT:

 

 

Signature

     

 

Date

 

Print or type name

     

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Award Date: January 30, 2012

Page 13

 

Appendix A

Capitalized Terms

 

Average TSR

   § 3.2(a)

Award

   3rd ¶

Cash Flow

   § 4.2(a)

Cash Flow Performance Factor

   § 4.2

Change of Control

   Plan

Committee

   1st ¶

Corporation

   3rd ¶

Peer Performance Group

   § 3.1

Performance Period

   § 1.2

Plan

   1st ¶

Potential Award

   § 2.1(d)

ROIC

   § 4.1(a)

ROIC Performance Factor

   § 4.1

Subsidiary

   Plan

Target Award

   3rd ¶, § 1.1

Total Stockholder Return

   Plan; § 3.2(a)

Total Stockholder Return Performance

   § 3.1; § 3.2

Factor

  

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Award Date: January 30, 2012

Page 14

 

Exhibit A

Post Employment Conduct Agreement

(LTIP Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of a Long Term Incentive Performance Award to me under the Award Agreement (the
“LTIP”) pursuant to the Lockheed Martin Corporation 2011 Incentive Performance
Award Plan (the “Plan”). References to the “Corporation” shall include Lockheed
Martin Corporation and its Subsidiaries. By accepting the LTIP, I agree as
follows:

1. Post Termination Activity.

(a) Post-employment Activity As a Lawyer – I acknowledge that as counsel to
Lockheed Martin Corporation (the “Corporation”), I owe ethical and fiduciary
obligations to the Corporation and that at least some of these obligations will
continue even after the date of my termination of employment (“Termination
Date”) with the Corporation. I agree that after my Termination Date I will
comply fully with all applicable ethical and fiduciary obligations that I owe to
the Corporation. To the extent permitted by applicable law, including but not
limited to any applicable rules governing attorney conduct, I agree that I will
not

 

  (i) Represent any client adversely to the Corporation;

 

  (ii) Reveal to any third party any information learned by me during the course
of my employment with the Corporation except for information that is or becomes
generally known;

 

  (iii) Encourage or solicit any present or future agents or employees of the
Corporation to terminate their employment for the purpose of competing with the
Corporation; or

 

  (iv) Whether as a lawyer or non-lawyer, accept a position (whether as agent,
employer, part or sole owner or in any other capacity) with any person or entity
whose interests are adverse to the Corporation’s interests if that adverse
position is related in any way to my present or past work with the Corporation.

(b) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

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Award Date: January 30, 2012

Page 15

 

(c) Cooperation in Litigation and Investigations – Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the LTIP is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s confidential or proprietary information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies for Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, to the extent permitted by
applicable law, including but not limited to any applicable rules governing
attorney conduct, that upon demand by the Corporation, to forfeit, return or
repay to the Corporation the “Benefits and Proceeds” (as defined below) in the
event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1 (and in the case
of 1(a), the breach occurs prior to the second anniversary of my Termination
Date);

 

  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

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Award Date: January 30, 2012

Page 16

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the LTIP, any cash paid to me, whether paid
currently or deferred; and (ii) to the extent I have not earned the LTIP fully,
all of my remaining rights, title or interest in the LTIP.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable.

7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the LTIP to me.

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Award Date: January 30, 2012

Page 17

 

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of an LTIP under
the Award Agreement and is not contingent on the vesting of the LTIP.

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Award Date: January 30, 2012

Page 18

 

Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

  

Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.

--------------------------------------------------------------------------------

LTIP PECA RJS (performance)

Award Date: January 30, 2012

 

LOGO [g221578g10c79.jpg]

Lockheed Martin Corporation

6801 Rockledge Drive, Bethesda, MD 20817

Telephone 301-897-6000

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

«Name»

«Street»

«City», «State» «Zip»

 

  Re: Lockheed Martin Corporation 2011 Incentive Performance Award Plan:
Long-Term Incentive Performance Award (2012-2014 Performance Period)

Dear «Call_By_Name»:

On behalf of the Management Development and Compensation Committee (the
“Committee”) of the Board of Directors of Lockheed Martin Corporation, I am
pleased to tell you that you have been granted a Long-Term Incentive Performance
Award under the Corporation’s 2011 Incentive Performance Award Plan (the
“Plan”). The purpose of this letter is to serve as the Award Agreement under
such Plan and to set forth your Target Award as well as the terms and conditions
to the payment of your Target Award. Additional terms and conditions are set
forth in the Plan and in the Prospectus relating to the Plan of which the Plan
document and this Award Agreement are a part. The Prospectus is available at
http://www.benefitaccess.com. You should retain the Prospectus and the attached
copy of the Plan in your records.

Your Award is not effective or enforceable until you properly acknowledge your
acceptance of the Award by returning an executed copy of this Award Agreement to
the Vice President of Total Rewards and Performance Management as instructed
below as soon as possible but in no event later than May 31, 2012. Assuming
prompt and proper acknowledgement of your acceptance of this Award Agreement,
this Award will be effective as of the Award Date. Acceptance of this Award
Agreement constitutes your consent to any action taken under the Plan consistent
with its terms with respect to this Award and your agreement to be bound by the
restrictions contained in Section 14 and Exhibit A (“Post-Employment Conduct
Agreement”) and Exhibit B (“Stock Ownership Requirements”).

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Award Date: January 30, 2012

Page 2

 

Capitalized terms used in this Award Agreement which have a special meaning
either shall be defined in this Award Agreement or if not defined in this Award
Agreement shall have the meaning ascribed to the term in the Plan. The term
“Target Award” as used in this Award Agreement refers only to the Target Award
awarded to you under this Award Agreement and the term “Award” refers only to
the Long Term Incentive Performance Award set forth in this Award Agreement.
References to the “Corporation” include Lockheed Martin Corporation and its
Subsidiaries. Appendix A contains an index of all capitalized terms used in this
Award Agreement.

Section 1.   Target Award; Performance Period.

1.1 Target Award. Your Target Award for the Performance Period under this Award
Agreement shall be [Target].

1.2 Performance Period. The Performance Period under this Award Agreement is a
three-year performance period that runs from January 1, 2012, until December 31,
2014.

1.3 Payment of Award. The amount payable to you under your Award is dependent
upon the Corporation’s performance as compared to the metrics described in
Section 3 and Section 4 of this Award Agreement and your continued employment
with the Corporation in accordance with Section 5 of this Award Agreement. As a
result of these requirements, any payments you receive may be larger or smaller
than your Target Award (e.g., the performance factors could result in no payment
in respect of your Award).

Section 2.   Calculation of Award Payments.

2.1 End of Performance Period Calculation. Following the end of the Performance
Period and prior to any payments being made,

(a) The Committee will calculate the Total Stockholder Return Performance Factor
based on the Corporation’s performance during the Performance Period relative to
the performance of other corporations which compose the “Peer Performance Group”
as defined in Section 3.1 below.

(b) The Committee will calculate the ROIC Performance Factor based on the
Corporation’s ROIC during the Performance Period as compared to the projected
ROIC for the Performance Period in the 2012 Long Range Plan as presented at the
February 2012 Board meeting.

(c) The Committee will calculate the Cash Flow Performance Factor based on the
Corporation’s cumulative Cash Flow during the Performance Period as compared to
the projected cumulative Cash Flow in the 2012 Long Range Plan as presented at
the February 2012 Board meeting.

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Award Date: January 30, 2012

Page 3

 

(d) Your “Potential Award” shall be calculated by multiplying the weighted
average of the Total Stockholder Return Performance Factor, the ROIC Performance
Factor, and the Cash Flow Performance Factor by your Target Award. The Total
Stockholder Return Performance Factor, the ROIC Performance Factor, and the Cash
Flow Performance Factor shall be weighted as follows in determining the weighted
average of the three performance factors:

 

Total Stockholder Return Performance Factor

     50 % 

ROIC Performance Factor

     25 % 

Cash Flow Performance Factor

     25 % 

You must (except as specified in Section 5) remain employed by the Corporation
through December 31, 2014, to receive your Potential Award.

 

  Section 3.   Total Stockholder Return Performance Factor.

3.1. Peer Performance Group. The Total Stockholder Return Performance Factor
will be based upon the relative ranking of the Corporation’s Average Total
Stockholder Return (as defined in Section 3.2(a)) for the Performance Period to
the Average Total Stockholder Return for such Period for each corporation in the
“Peer Performance Group.” The “Peer Performance Group” shall consist of the
corporations which compose the Standard and Poor’s 500 Aerospace and Defense
Index reported under symbol S5AERO by Bloomberg L.P. The Corporation’s Total
Stockholder Return will be based on the performance of its common stock, par
value $1.00. The Total Stockholder Return of each corporation that is taken into
account in computing the Peer Performance Group Total Stockholder Return will be
based on the equity security of the relevant corporation that is used in
computing the Standard and Poor’s 500 Aerospace and Defense Index.

3.2. Calculation of Total Stockholder Return Performance Factor.

(a) Calculation of Average Total Stockholder Return. During the Performance
Period, the Committee shall compute the Total Stockholder Return (as defined in
the Plan and assuming the reinvestment of any cash dividends) for the
Corporation and for each other corporation in the Peer Performance Group for
thirty-six (36) periods during the Performance Period where each period begins
on January 1, 2012 (based on the closing price for the stock on December 31,
2011) and ends on the last day of each successive calendar month in the
Performance Period on which the New York Stock Exchange is open for trading.
Each such Total Stockholder Return shall be computed from data available to the
public. At the end of the Performance Period, the thirty-six (36) Total
Stockholder Return figures for each corporation for the Performance Period will
be averaged to determine each corporation’s average Total Stockholder Return
(“Average TSR”) for the Performance Period. Each corporation’s Average TSR shall
be ranked among the Average TSR for each other corporation in the Peer
Performance Group on a percentile basis (using the Excel PERCENTRANK function).

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Award Date: January 30, 2012

Page 4

 

(b) Percentage Level of Target Award. Your Total Stockholder Return Performance
Factor, expressed as a percentage, will be determined under this Section 3.2(b)
(and Section 3.2(c) to the extent interpolation is necessary) based on the
Percentile Ranking (as determined under Section 3.2(a)) of the Corporation’s
Average TSR for the Performance Period under the following chart:

 

Band

  

Percentile Ranking

   Total Stockholder
Return Performance
Factor  

One

   75th or higher      200 % 

Two

   60th      150 % 

Three

   50th      100 % 

Four

   40th      50 % 

Five

   35th      25 % 

Six

   Below 35th      0 % 

(c) Total Stockholder Return Performance Factor Interpolation. If the Percentile
Ranking as determined under Section 3.2(a) puts the Corporation over the listed
Percentile Ranking for the applicable Band (other than Band One) in
Section 3.2(b), your Total Stockholder Return Performance Factor under
Section 3.2(b) shall be interpolated on a linear basis.

Section 4.   ROIC Performance Factor and Cash Flow Performance Factor.

4.1 ROIC Performance Factor. The ROIC Performance Factor will be determined by
comparing the Corporation’s ROIC for the Performance Period to ROIC as
forecasted for the Performance Period in the Corporation’s 2012 Long Range Plan
and then identifying the ROIC Performance Factor based upon the factor
associated with the difference on the following table:

 

Change from 2012 LRP

ROIC

   ROIC Performance
Factor  

Plan + 150 or more basis points

     200 % 

Plan + 120 basis points

     175 % 

Plan + 90 basis points

     150 % 

Plan + 60 basis points

     125 % 

Plan + 30 basis points

     100 % 

Plan

     75 % 

Plan – 15 basis points

     50 % 

Plan – 30 basis points

     25 % 

Plan – 45 or more basis points

     0 % 

(a) ROIC Definition. For purposes of this Award Agreement, “ROIC” means return
on invested capital for the Performance Period calculated as (A) average annual
(i) net income (excluding any charge or addition to net income resulting

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solely from adjustment of deferred tax assets and liabilities for the effect of
enactment of corporate tax reform and related legislation that adjusts United
States federal corporate income tax rates) plus (ii) interest expense times one
minus the highest marginal federal corporate tax rate over the three year
Performance Period (“Return”), divided by (B) the average of the four year-end
investment balances (beginning with December 31, 2011 year-end balance)
consisting of (i) debt (including current maturities of long-term debt) plus
(ii) stockholders’ equity plus the postretirement plans amounts determined at
year-end as included in the Corporation’s Statement of Stockholders’ Equity.

(b) ROIC Determination. Each component of ROIC and the calculation of any
postretirement plans amounts recorded in the Corporation’s Statement of
Stockholders’ Equity shall be determined by the Committee in accordance with
generally accepted accounting principles in the United States and be based upon
the comparable numbers reported on the Corporation’s audited consolidated
financial statements or, if audited financial statements are not available for
the date or period on which ROIC is being determined, the Committee shall make
its determination in a manner consistent with the historical practices used by
the Corporation in determining the components of ROIC and postretirement plans
amounts recorded in the Corporation’s Statement of Stockholders’ Equity for
purposes of reporting those items on its audited financial statements, as
modified by this paragraph. Notwithstanding the foregoing, ROIC will be adjusted
to exclude the impact of any change in accounting standards or adoption of any
new accounting standards that is required under generally accepted accounting
principles in the United States and that is reported in the Corporation’s
filings with the Securities and Exchange Commission as having a material effect
on the Corporation’s consolidated financial statements. ROIC, as included in the
2012 Long Range Plan, and the change in ROIC for purposes of the ROIC
Performance Factor will be determined in accordance with this Section 4.1(b).

4.2 Cash Flow Performance Factor. The Cash Flow Performance Factor will be
determined by comparing the Corporation’s cumulative Cash Flow during the
Performance Period to the projected cumulative Cash Flow of the Corporation as
forecasted in the Corporation’s 2012 Long Range Plan, and then identifying the
Cash Flow Performance Factor based upon the factor associated with the change
from the 2012 Long Range Plan on the following table:

 

Change From 2012 LRP Cash Flow

   Cash Flow Performance
Factor  

Plan + $2.7B or more

     200 % 

Plan + $2.3B

     175 % 

Plan + $2.0B

     150 % 

Plan + $1.7B

     125 % 

Plan + $1.0B

     100 % 

Plan + $0.3B

     75 % 

Plan

     50 % 

Plan - $0.3B

     25 % 

Plan - $0.7B or more

     0 % 

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(a) Cash Flow Definition. For purposes of this Award Agreement, Cash Flow means
net cash flow from operations but not taking into account: (i) the aggregate
difference between the amount forecasted in the Corporation’s 2012 Long Range
Plan to be contributed by the Corporation to the Corporation’s defined benefit
pension plans during the Performance Period and the actual amounts contributed
by the Corporation during the Performance Period; or (ii) any tax payments or
tax benefits during the Performance Period associated with the divestiture of
business units, other than tax payments or tax benefits that were included in
the Corporation’s 2012 Long Range Plan.

(b) Cash Flow Determination. Cash Flow shall be determined by the Committee
based upon the comparable numbers reported on the Corporation’s audited
consolidated financial statements or, if audited financial statements are not
available for the period for which Cash Flow is being determined, the Committee
shall determine Cash Flow in a manner consistent with the historical practices
used by the Corporation in determining net cash provided by operating activities
as reported in its audited consolidated statement of cash flows, in either case
as modified by this paragraph.

4.3 Interpolation of ROIC and Cash Flow Metrics. If the change in ROIC or Cash
Flow falls between two numbers listed in the applicable table in Section 4.1 or
4.2, the appropriate factor will be interpolated on a linear basis.
Notwithstanding the foregoing, the ROIC Performance Factor will always be zero
if the ROIC for the Performance Period is less than ROIC forecasted for the
Performance Period in the 2012 Long Range Plan by 45 basis points or more and
the Cash Flow Performance Factor will always be zero if the aggregate Cash Flow
for the Performance Period is less than what was forecasted for the Performance
Period in the 2012 Long Range Plan by more than $0.7 billion.

Section 5. Payment of Award.

5.1. Employment Requirement.

(a) General Rule. In order to be eligible to receive payment of any portion of
your Potential Award as determined under Section 2.1(d), you must accept this
Award Agreement and remain employed by the Corporation through the last day of
the Performance Period. Except as provided below, if your employment as an
Employee terminates during the Performance Period, you shall forfeit your right
to receive all or any part of your Potential Award.

(b) Exceptions. Notwithstanding Section 5.1(a), if the Committee determines

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(1) that your employment as an Employee terminated as a result of your death,
“Divestiture”, “Disability” or “Retirement” or

(2) that the Corporation terminated your employment involuntarily as a result of
a layoff,

you shall retain a fraction of your Potential Award. The numerator of such
fraction shall equal the number of days in the Performance Period before your
employment as an Employee terminated, and the denominator shall equal the total
number of days in the Performance Period. The Committee shall have complete and
absolute discretion to make the determinations called for under this
Section 5.1(b), and all such determinations shall be binding on you and on any
person who claims all or any part of your Potential Award on your behalf as well
as on the Corporation. If you terminate employment during the Performance Period
but are eligible to receive a portion of your Potential Award as a result of an
exception under this Section 5.1(b), payment of such portion of your Potential
Award shall be in full satisfaction of all rights you have under this Award
Agreement.

(c) Special Definitions. For purposes of this Award Agreement:

(1) Your employment as an Employee shall be treated as terminating because of a
Disability on the date you become eligible for a benefit under the Corporation’s
long-term disability plan in which you participate, or if you are not enrolled
in a long-term disability plan, the date on which long-term disability benefits
would commence under the plan under which you would have been covered, had you
enrolled;

(2) Your employment as an Employee shall be treated as terminating as a result
of Divestiture if the Corporation divests all or substantially all of a business
operation of the Corporation and such divestiture results in the termination of
your employment with the Corporation and a transfer of such employment to the
other party in the divestiture. A divestiture shall mean a transaction which
results in the transfer of control of the business operation to any person,
corporation, association, partnership, joint venture, limited liability company
or other business entity of which less than 50% of the voting stock or other
equity interests are owned or controlled by the Corporation; and

(3) Your employment as an Employee shall be treated as terminating because of
Retirement if (a) you participate in a defined benefit pension plan maintained
by the Corporation, and your employment terminates on or after the date on which
you satisfy the plan’s age and service requirements for commencing receipt of an
early retirement benefit under the plan or (b) you do not participate in a
defined benefit pension plan maintained by the Corporation, and your employment
terminates after (i) you reach age 65, or (ii) you reach age 55 and have
completed five years of service.

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5.2. Payment Rules.

(a) General Rule: Vesting; Method of Payment; Timing of Payment.

(1) Immediate Portion. If you are eligible to receive all, or a portion of, your
Potential Award under Section 5.1, up to $10,000,000 dollars of your Potential
Award shall be fully vested on the date on which the Committee certifies in
writing (for purposes of Section 162(m) of the Code) that your Target Award has
become a Potential Award for the Performance Period. This portion of your award
shall be known as the “Immediate Portion” of your Potential Award. The Immediate
Portion of your Potential Award shall be (i) paid to you in cash as soon as
administratively practicable, but no later than ninety (90) days after the
certification date described above, but no later than March 15 following such
certification date, or (ii) deferred in accordance with Section 5.2(c). Subject
to your deferral election under Section 5.2(c), in the event of your death, the
Immediate Portion of your Potential Award will be made to your estate if you do
not have a properly completed beneficiary designation form on file with the Vice
President of Total Rewards and Performance Management.

(2) Deferred Portion. If your Potential Award exceeds $10,000,000 dollars, the
amount in excess of $10,000,000 dollars shall be automatically deferred through
December 31, 2015. This portion of your award shall be known as the “Deferred
Portion” of your Potential Award. Except as provided in Section 5.2(b)(2), you
shall forfeit your right to the payment of the Deferred Portion of your
Potential Award if you do not remain employed by the Corporation through
December 31, 2015. The Committee shall establish a bookkeeping account (a
“Phantom Stock Account”) on your behalf under this Section 5.2(a)(2) and shall
credit such account as described in Section 5.2(a)(3) below. Unless you forfeit
your right to the Deferred Portion of your Potential Award, you shall receive
payment of the value of your Phantom Stock Account in cash as determined as of
December 31, 2015, no later than March 15, 2016 (subject to section 5.2(c)). The
amount payable under from your Phantom Stock Account shall be determined by
multiplying the number of units representing shares of phantom stock credited to
your account under Section 5.2(a)(3) by the closing price for a share of the
Corporation’s common stock as reported on the New York Stock Exchange for
December 31, 2015, or, if it is not a trading day, on the last trading day
before December 31, 2015.

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(3) Phantom Stock Account. Your Phantom Stock Account shall be credited with a
number of units equal to the number of whole shares (and any fractional share)
of the Corporation’s common stock which could have been purchased by the
Deferred Portion of your Potential Award based on the closing price for a share
of the Corporation’s common stock as reported on the New York Stock Exchange for
the last trading day of the Performance Period, subject to the Committee’s
certification in writing (for purposes of Section 162(m) of the Code) that your
Target Award has become a Potential Award for the Performance Period.
Thereafter, the Committee shall make such credits or debits to the units
previously credited to such account as the Committee deems appropriate in light
of any transaction described in Section 7(a) of the Plan (such as a stock split
or stock dividend) or any cash dividends paid on the Corporation’s common stock,
which dividends shall increase the number of units credited to such account as
if such dividends had been reinvested in the Corporation’s common stock at the
closing price of a share of the Corporation’s common stock as reported on The
New York Stock Exchange for the last trading day of the quarter in which such
dividend is declared by the Board of Directors. Units credited to your Phantom
Stock Account are bookkeeping entries only and do not entitle you to any shares
of the Corporation’s common stock or to any voting or other rights associated
with shares of such stock.

(4) Transactions involving the Deferred Portion of your Potential Award and your
Phantom Stock Account under this Award Agreement are subject to the securities
laws and CPS 722. Among other things, CPS 722 prohibits employees of the
Corporation from engaging in transactions that violate securities laws or
involve hedging or pledging stock. Insiders are subject to additional
restrictions. The Corporation recommends that Insiders consult with the Senior
Vice President, General Counsel and Corporate Secretary or her staff before
entering into any transactions involving the Deferred Portion of your Potential
Award or your Phantom Stock Account.

(b) Special Rules for Certain Terminated Employees.

(1) Termination During Performance Period. If you terminate employment during
the Performance Period but are eligible to receive a portion of your Potential
Award as a result of an exception under Section 5.1(b), payment of such portion
of your Potential Award shall be in full satisfaction of all rights you have
under this Award Agreement; in such circumstances, you will not be eligible for
a payment of the Deferred Portion under Section 5.2(a)(2), and no other amounts
will be payable to you or on your behalf. The portion of your Potential Award
payable to you following a termination of

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employment during the Performance Period under circumstances described in
Section 5.1(b) shall be paid to you or, in the event of your death, to your
designated beneficiary for the Award, in cash within ninety (90) days after the
Committee certifies in writing (for purposes of Section 162(m) of the Code) that
your Target Award has become a Potential Award for the Performance Period, but
no later than March 15, 2014 (subject to section 5.2(c)). In the event of your
death and you do not have a properly completed beneficiary designation form on
file with the Vice President of Total Rewards and Performance Management’s
office, your payment will be made to your estate.

(2) Termination After December 31, 2014 and Before December 31, 2015.
Notwithstanding Section 5.2(a)(2), if your employment terminates after the close
of the Performance Period but prior to December 31, 2015, and the Committee
determines that your employment terminated under circumstances described in
Sections 5.1(b)(1) or (2), then the Deferred Portion of your Potential Award
described in Section 5.2(a)(2) shall be paid to you or, in the event of your
death, to your designated beneficiary, in cash within ninety (90) days following
your termination of employment, but no later than March 15 of the year following
your termination of employment (subject to Section 5.2(c)). In the event Code
section 409A(a)(2)(B)(i) applies because you are a specified employee receiving
a distribution on account of a termination of employment, payment of the
Deferred Amount must be delayed for six months from such date. You will be
notified if you are a specified employee under Code section 409A. The amount
payable in cash under this Section 5.2(b)(2) shall be determined by multiplying
the number of units representing shares of phantom stock credited to your
account under Section 5.2(a)(3) on the date your termination becomes effective
by the closing price for a share of the Corporation’s common stock as reported
on the New York Stock Exchange for the date on which your termination becomes
effective, or if it is not a trading day, on the last trading day before that
date. In the event of your death and you do not have a properly completed
beneficiary designation form on file with the Vice President of Total Rewards
and Performance Management, your payment will be made to your estate.

(c) Deferral Election. You will be given an opportunity to elect to defer any
amounts payable under Section 5.2 of this Award Agreement. Such election shall
be irrevocable, shall be made in accordance with the terms of the Lockheed
Martin Corporation Deferred Management Incentive Compensation Plan (“DMICP”) and
the requirements of Code section 409A, and shall be subject to such additional
terms and conditions as are set by the Committee. A deferral election form and
the terms and conditions for any deferral will be furnished to you in due
course. The beneficiary designation for the DMICP (rather than the beneficiary
designation for this Long Term Incentive Performance Award) shall govern any
amounts deferred under the terms of the DMICP.

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5.3. Cutback. Any payment called for under Section 5.2 will be reduced to the
extent that such payment together with payments attributable to any other
Cash-Based Awards that are granted during 2012 as Performance Based Awards
exceeds $10,000,000. Amounts that cannot be paid due to any limitation in the
Plan shall be forfeited.

5.4. Withholding. Any payment made in respect of your Award will be subject to
income tax withholding at the minimum rate prescribed by law. You may owe taxes
in addition to the amount withheld and may request that tax be withheld at a
greater rate. As required under the law, FICA tax will be collected from you or
withheld from the amount of your award or from your wages, when any portion of
an award becomes vested for tax purposes prior to payment.

5.5. Means of Satisfying Code Section 409A. If any payment that would otherwise
be made under this Award Agreement is required to be delayed by reason of
Section 13, such payment shall be made at the earliest date permitted by Code
section 409A. The amount of any delayed payment shall be the amount that would
have been paid prior to the delay adjusted to include interest from the original
payment date to the actual payment date, at a rate equivalent to the six month
London Interbank Offered Rate (LIBOR) as published in the Money Rates section of
the Wall Street Journal, plus 25 basis points. The increase over LIBOR may be
adjusted to reflect the six month unsecured borrowing rate of the Corporation.

Section 6.   No Assignment – General Creditor Status.

You shall have no right to assign any interest you might have in all or any part
of the Target Award or Potential Award which has been granted to you under this
Award Agreement and any attempt to do so shall be null and void and shall have
no force or effect whatsoever. Furthermore, all payments called for under this
Award Agreement shall be made in cash from the Corporation’s general assets, and
your right to payment from the Corporation’s general assets shall be the same as
the right of a general and unsecured creditor of the Corporation.

Section 7.  Plan.

This Award Agreement shall be subject to all of the terms and conditions set
forth in the Plan.

Section 8.  Change in Control.

8.1. Change in Control Before December 31, 2015. If during the Performance
Period, a Change in Control (as defined in Section 7 of the Plan) occurs, the
Performance Period will terminate. Notwithstanding any deferral election or term
of this Award

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Agreement to the contrary, a pro rata portion of your Award will be paid to you
within fifteen (15) days of the Change in Control. The prorated portion will be
the sum of (i) the result obtained by first multiplying your Target Award by the
Total Stockholder Return Performance Factor calculated under Section 3.2(b), but
based upon the Total Stockholder Return for the Corporation and the Peer
Performance Group as of the last day of the month immediately preceding the
Change in Control, and then further multiplying that product by a fraction, the
numerator of which is the number of days in the Performance Period prior to the
Change in Control and the denominator of which is the total number of days in
the Performance Period. If a Change in Control occurs after the end of the
Performance Period but before December 31, 2015, notwithstanding any deferral
election or term of this Award Agreement to the contrary, the Deferred Portion
of your Potential Award described in Section 5.2(c) will be paid to you within
fifteen (15) days of the Change in Control. The amount payable shall be
determined by multiplying the number of units representing shares of phantom
stock credited to your account under Section 5.2(c)(2) by the closing price for
a share of the Corporation’s common stock as reported on the New York Stock
Exchange for the date on which the Change in Control occurs, or if it is not a
trading day, on the last trading day before that date.

8.2. Special Rule. Notwithstanding Section 8.1, if a payment in accordance with
those provisions would result in a nonexempt short-swing transaction under
Section 16(b) of the Securities Exchange Act of 1934, then the date of
distribution to you shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt short-swing transaction or
would otherwise not result in liability under Section 16(b) of the Securities
Exchange Act of 1934.

 

  Section 9.  Amendment and Termination.

As provided in Section 9 of the Plan, the Board of Directors may at any time
amend, suspend or discontinue the Plan and the Committee may at any time amend
this Award Agreement. Notwithstanding the foregoing, no such action by the Board
of Directors or the Committee shall amend Sections 1, 2, 3, 4, or 5 in a manner
adverse to you or reduce the amount payable hereunder in a material manner
without your written consent. For this purpose, a change in the amount payable
hereunder that occurs solely by reason of a change in the date or form of
payment shall in no case be treated as a reduction prohibited by this Section 9.
Thus, for example, if an amount payable by reason of Section 8 is delayed by an
amendment to this Award Agreement or other action undertaken to comply with
Section 409A of the Internal Revenue Code and the amount payable is reduced
solely by reason of a corresponding delay in the date of valuation of a share of
the Corporation’s common stock, such a change shall not be treated as a
reduction prohibited by this Section 9. This Section 9 shall be construed and
applied so as to permit the Committee to amend this Award Agreement at any time
in any manner reasonably necessary or appropriate in order to comply with the
requirements of Section 16 of the Securities Exchange Act of 1934 and of Code
section 409A, including amendments regarding the timing and form of payments
hereunder.

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  Section 10.   No Right to an Award; Value of Award.

Your status as an Employee shall not be construed as a commitment that any one
or more awards shall be made under the Plan to you or to Employees generally.
Your status as a Participant shall not entitle you to any additional award. The
value of the Award will not be taken into account for other benefits offered by
the Corporation, including but not limited to pension benefits.

 

  Section 11.   No Assurance of Employment.

Nothing contained in the Plan or in this Award Agreement shall confer upon you
any right to continue in the employ or other service of the Corporation or
constitute any contract (of employment or otherwise) or limit in any way the
right of the Corporation to change your compensation or other benefits or to
terminate your employment with or without cause.

 

  Section 12.   Conflict.

In the event of a conflict between this Award Agreement and the Plan, the Plan
document shall control.

 

  Section 13.   Compliance with Section 409A of the Internal Revenue Code.

Notwithstanding any other provision of this Award Agreement to the contrary, to
the extent that this Award Agreement constitutes a nonqualified deferred
compensation plan to which Code section 409A applies, payments under this Award
Agreement shall be made at a time and in a manner that satisfies the
requirements of Code section 409A and guidance of general applicability issued
thereunder, including the provisions of 409A(a)(2)(B)(i) to the extent
distributions to any specified employee are required to be delayed six months,
and all terms shall be interpreted in accordance with Code section 409A.

 

  Section 14.   Post-Employment Covenants & Stock Ownership Requirements.

By accepting this Award Agreement through the procedure described above, you
agree to the terms of the Post-Employment Covenants contained in Exhibit A to
this Award Agreement and you acknowledge receipt of the Stock Ownership
Requirements (“Ownership Requirements”) attached as Exhibit B to this Award
Agreement and agree to comply with such Ownership Requirements.

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  Section 15.   Execution.

No Award is enforceable until you properly acknowledge your acceptance by
returning an executed copy of this Award Agreement, as soon as possible but in
no event later than May 31, 2012, to the Vice President of Total Rewards and
Performance Management, Lockheed Martin Corporation, Mail Point 123, 6801
Rockledge Drive, Bethesda, MD 20817.

By signing this Award Agreement, you consent to receive copies of the Prospectus
applicable to this Award from this internet site (http://www.benefitaccess.com)
as well as to electronic delivery of the Corporation’s annual report on Form
10-K, annual proxy and quarterly reports on Form 10-Q. This consent can only be
withdrawn by written notice to the Senior Vice President, General Counsel, and
Corporate Secretary, Lockheed Martin Corporation, 6801 Rockledge Drive,
Bethesda, MD 20817.

A pre-addressed envelope has been enclosed for your convenience to return with a
copy of this Award Agreement, as acknowledged by you below.

 

Sincerely, David A. Filomeo Vice President

Total Rewards and Performance

Management

Enclosures

ACKNOWLEDGEMENT:

 

 

   

 

Signature     Date

 

    Print or type name    

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Appendix A

Capitalized Terms

 

Average TSR    § 3.2(a) Award    3rd ¶ Cash Flow    § 4.2(a) Cash Flow
Performance Factor    § 4.2 Change of Control    Plan Committee    1st ¶
Corporation    3rd ¶ Deferred Portion    § 5.2(a)(2)

Immediate Portion

Insider

   § 5.2(a)(1)

Plan

Peer Performance Group    § 3.1 Performance Period    § 1.2 Phantom Stock
Account    § 5.2(a)(3) Plan    1st ¶ Potential Award    § 2.1(d) ROIC   
§ 4.1(a) ROIC Performance Factor    § 4.1 Subsidiary    Plan Target Award    3rd
¶, § 1.1 Total Stockholder Return    Plan; § 3.2(a) Total Stockholder Return
Performance    § 3.1; § 3.2 Factor   

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Exhibit A

Post Employment Conduct Agreement

(LTIP Grant)

This Post Employment Conduct Agreement (this “PECA”) attached as Exhibit A to
the Award Agreement with an Award Date of January 30, 2012 (the “Award
Agreement”) is entered into in consideration of, among other things, the grant
of a Long Term Incentive Performance Award to me under the Award Agreement (the
“LTIP”) pursuant to the Lockheed Martin Corporation 2011 Incentive Performance
Award Plan (the “Plan”). References to the “Corporation” shall include Lockheed
Martin Corporation and its Subsidiaries. By accepting the LTIP, I agree as
follows:

1. Protective Covenants.

(a) Covenant Not To Compete – Without the express written consent of the
Management Development and Compensation Committee of the Board of Directors of
the Corporation, during the two-year period following the date of my termination
of employment (the “Termination Date”) with the Corporation, I will not,
directly or indirectly, be employed by, provide services to, or advise a
“Restricted Company” (as defined in Section 6 below), whether as an employee,
advisor, director, officer, partner or consultant, or in any other position,
function or role that, in any such case,

 

  (i) oversees, controls or affects the design, operation, research,
manufacture, marketing, sale or distribution of “Competitive Products or
Services” (as defined in Section 6 below) of or by the Restricted Company, or

 

  (ii) would involve a substantial risk that the “Confidential or Proprietary
Information” (as defined in Section 1(c) below) of the Corporation (including
but not limited to technical information or intellectual property, strategic
plans, information relating to pricing offered to the Corporation by vendors or
suppliers or to prices charged or pricing contemplated to be charged by the
Corporation, information relating to employee performance, promotions or
identification for promotion, or information relating to the Corporation’s cost
base) could be used to the disadvantage of the Corporation.

(b) Non-Solicit – Without the express written consent of the Management
Development and Compensation Committee of the Board of Directors of the
Corporation, during the two-year period following the Termination Date, I will
not (i) interfere with any contractual relationship between the Corporation and
any customer, supplier, distributor or

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Page 17

 

manufacturer of or to the Corporation to the detriment of the Corporation or
(ii) induce or attempt to induce any person who is an employee of the
Corporation to perform work or services for any entity other than the
Corporation.

(c) Protection of Proprietary Information – Except to the extent required by
law, following my Termination Date, I will have a continuing obligation to
comply with the terms of any non-disclosure or similar agreements that I signed
while employed by the Corporation committing to hold confidential the
“Confidential or Proprietary Information” (as defined below) of the Corporation
or any of its affiliates, subsidiaries, related companies, joint ventures,
partnerships, customers, suppliers, partners, contractors or agents, in each
case in accordance with the terms of such agreements. I will not use or disclose
or allow the use or disclosure by others to any person or entity of Confidential
or Proprietary Information of the Corporation or others to which I had access or
that I was responsible for creating or overseeing during my employment with the
Corporation. In the event I become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
otherwise) to disclose any proprietary or confidential information, I will
immediately notify the Corporation’s Senior Vice President, General Counsel, and
Corporate Secretary as to the existence of the obligation and will cooperate
with any reasonable request by the Corporation for assistance in seeking to
protect the information. All materials to which I have had access, or which were
furnished or otherwise made available to me in connection with my employment
with the Corporation shall be and remain the property of the Corporation. For
purposes of this PECA, “Confidential or Proprietary Information” means
Proprietary Information within the meaning of CPS 710 (a copy of which has been
made available to me), including but not limited to information that a person or
entity desires to protect from unauthorized disclosure to third parties that can
provide the person or entity with a business, technological, or economic
advantage over its competitors, or which, if known or used by third parties or
if used by the person’s or entity’s employees or agents in an unauthorized
manner, might be detrimental to the person’s or entity’s interests. Confidential
or Proprietary Information may include, but is not limited to:

 

  (i) existing and contemplated business, marketing and financial business
information such as business plans and methods, marketing information, cost
estimates, forecasts, financial data, cost or pricing data, bid and proposal
information, customer identification, sources of supply, contemplated product
lines, proposed business alliances, and information about customers or
competitors, or

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Page 18

 

  (ii) existing or contemplated technical information and documentation
pertaining to technology, know how, equipment, machines, devices and systems,
computer hardware and software, compositions, formulas, products, processes,
methods, designs, specifications, mask works, testing or evaluation procedures,
manufacturing processes, or production processes.

(d) No disparagement – Following the Termination Date, I will not make any
statements, whether verbal or written, that disparage or reasonably may be
interpreted to disparage the Corporation or its stockholders, directors,
officers, employees, agents, attorneys, representatives, technology, products or
services with respect to any matter whatsoever.

(e) Cooperation in Litigation and Investigations – Following the Termination
Date, I will, to the extent reasonably requested, cooperate with the Corporation
in any pending or future litigation (including alternative dispute resolution
proceedings) or investigations in which the Corporation or any of its
subsidiaries or affiliates is a party or is required or requested to provide
testimony and regarding which, as a result of my employment with the
Corporation, I reasonably could be expected to have knowledge or information
relevant to the litigation or investigation. Notwithstanding any other provision
of this PECA, nothing in this PECA shall affect my obligation to cooperate with
any governmental inquiry or investigation or to give truthful testimony in
court.

2. Consideration and Acknowledgement. I acknowledge and agree that the benefits
and compensation opportunities being made available to me under the Award
Agreement are in addition to the benefits and compensation opportunities that
otherwise are or would be available to me in connection with my employment by
the Corporation and that the grant of the LTIP is expressly made contingent upon
my agreements with the Corporation set forth in this PECA. I acknowledge that
the scope and duration of the restrictions in Section 1 are necessary to be
effective and are fair and reasonable in light of the value of the benefits and
compensation opportunities being made available to me under the Award Agreement.
I further acknowledge and agree that as a result of the high level executive and
management positions I hold with the Corporation and the access to and extensive
knowledge of the Corporation’s Confidential or Proprietary Information,
employees, suppliers and customers, these restrictions are reasonably required
for the protection of the Corporation’s legitimate business interests.

3. Remedies For Breach of Section 1; Additional Remedies of Clawback and
Recoupment.

(a) If I become (or currently am) an Insider (as defined in the Plan) or receive
a Long-Term Incentive Performance Award, I agree, upon demand by the
Corporation, to forfeit, return or repay to the Corporation the “Benefits and
Proceeds” (as defined below) in the event any of the following occur:

 

  (i) I breach any of the covenants or agreements in Section 1;

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  (ii) The Corporation determines that either (a) my intentional misconduct or
gross negligence, or (b) my failure to report another person’s intentional
misconduct or gross negligence of which I had knowledge during the period I was
employed by the Corporation, contributed to the Corporation having to restate
all or a portion of its financial statements filed for any period with the
Securities and Exchange Commission;

 

  (iii) The Corporation determines that I engaged in fraud, bribery or any other
illegal act or that my intentional misconduct or gross negligence (including the
failure to report the acts of another person of which I had knowledge during the
period I was employed by the Corporation) contributed to another person’s fraud,
bribery or other illegal act, which in any such case adversely affected the
Corporation’s financial position or reputation; or

 

  (iv) Under such other circumstances specified by final regulation issued by
the Securities and Exchange Commission entitling the Corporation to recapture or
clawback “Benefits and Proceeds” (as defined below).

(b) The remedy provided in Section 3(a) shall not be the exclusive remedy
available to the Corporation for any of the conduct described in Section 3(a)
and shall not limit the Corporation from seeking damages or injunctive relief.

(c) For purposes of this Section 3, “Benefits and Proceeds” means (i) to the
extent I have earned any of the LTIP, any cash paid to me, whether paid
currently or deferred; and (ii) to the extent I have not earned the LTIP fully,
all of my remaining rights, title or interest in the LTIP.

4. Injunctive Relief. I acknowledge that the Corporation’s remedies at law may
be inadequate to protect the Corporation against any actual or threatened breach
of the provisions of Section 1 or the conduct described in Section 3(a), and,
therefore, without prejudice to any other rights and remedies otherwise
available to the Corporation at law or in equity (including but not limited to,
an action under Section 3(a), the Corporation shall be entitled to the granting
of injunctive relief in its favor and to specific performance without proof of
actual damages and without the requirement of the posting of any bond or similar
security.

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5. Invalidity; Unenforceability. It is the desire and intent of the parties that
the provisions of this PECA shall be enforced to the fullest extent permissible.
Accordingly, if any particular provision of this PECA is adjudicated to be
invalid or unenforceable, this PECA shall be deemed amended to delete the
portion adjudicated to be invalid or unenforceable, such deletion to apply only
with respect to the operation of this provision in the particular jurisdiction
in which such adjudication is made.

6. Definitions. Capitalized terms not defined in this PECA have the meaning
given to them in the Plan, as applicable. For purposes of this PECA, the
following terms have the meanings given below:

(a) “Restricted Company” means The Boeing Company, General Dynamics Corporation,
Northrop Grumman Corporation, the Raytheon Company, United Technologies
Corporation, Honeywell International Inc., BAE Systems Inc., L-3 Communications
Corporation, the Harris Corporation, Thales, EADS North America and (i) any
entity directly or indirectly controlling, controlled by, or under common
control with any of the foregoing, and (ii) any successor to all or part of the
business of any of the foregoing as a result of a merger, reorganization,
consolidation, spin-off, split-up, acquisition, divestiture, or similar
transaction.

(b) “Competitive Products or Services” means products or services that compete
with, or are an alternative or potential alternative to, products sold or
services provided by a subsidiary, business area, division or operating unit or
business of the Corporation as of the Termination Date and at any time within
the two-year period ending on the Termination Date; provided, that, (i) if I had
direct responsibility for the business of, or function with respect to, a
subsidiary, or for a business area, division or operating unit or business of
the Corporation at any time within the two-year period ending on the Termination
Date, Competitive Products or Services includes the products so sold or the
services so provided during that two-year period by the subsidiary, business
area, division or operating unit of the Corporation for which I had
responsibility, and (ii) if I did not have direct responsibility for the
business of, or function with respect to, a subsidiary, or for a business area,
division or operating unit or business of the Corporation at any time within the
two-year period ending on the Termination Date, Competitive Products or Services
includes the products so sold or the services so provided by a subsidiary,
business area, division or operating unit of the Corporation for which I had
access (or was required or permitted such access in the performance of my duties
or responsibilities with the Corporation) to Confidential or Proprietary
Information of the Corporation at any time during the two-year period ending on
the Termination Date.

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7. Miscellaneous.

(a) The Plan, the Award Agreement and this PECA constitute the entire agreement
governing the terms of the award of the LTIP to me.

(b) This PECA shall be governed by Maryland law, without regard to its
provisions governing conflicts of law. Any enforcement of, or challenge to, this
PECA may only be brought in the Circuit Court of Maryland or the United States
District Court for the District of Maryland. Both parties consent to the proper
jurisdiction and venue of the Circuit Court of Maryland and the United States
District Court for the District of Maryland for the purpose of enforcing or
challenging this PECA.

(c) This PECA shall inure to the benefit of the Corporation’s successors and
assigns and may be assigned by the Corporation without my consent.

(d) This PECA provides for certain obligations on my part following the
Termination Date and shall not, by implication or otherwise, affect in any way
my obligations to the Corporation during the term of my employment by the
Corporation, whether pursuant to written agreements between the Corporation and
me, the provisions of applicable Corporate policies that may be adopted from
time to time or applicable law or regulation.

This PECA is effective as of the acceptance by me of the award of an LTIP under
the Award Agreement and is not contingent on the vesting of the LTIP.

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Exhibit B

Stock Ownership Requirements

Lockheed Martin’s Stock Ownership Requirements for Key Employees apply to all
senior level positions of Vice President and above. This reflects the
expectations of our major shareholders that management demonstrate its
confidence in Lockheed Martin through a reasonable level of personal share
ownership. This practice is consistent with other major U.S. corporations which
link some portion of personal financial interests of key employees with those of
shareholders.

Stock Ownership Requirements

 

Title

  

Annual Base Pay Multiple

Chief Executive Officer

   6 times

President/Chief Operating Officer

   5 times

Chief Financial Officer

   4 times

Business Area Executive Vice Presidents

   3 times

Corporate Senior Vice Presidents

   2 times

Other Elected Officers

   2 times

All Other Vice Presidents

   1 times

Satisfaction of Requirements

Covered employees may satisfy their ownership requirements with common stock in
these categories:

 

  •  

Shares owned directly.

 

  •  

Shares owned by a spouse or a trust.

 

  •  

Shares represented by monies invested in 401(k) Company Common Stock Funds or
comparable plans.

 

  •  

Share equivalents as represented by income deferred to the Company Stock
Investment Option of the Deferred Management Incentive Compensation Plan
(DMICP).

 

  •  

Unvested Restricted Stock Units.

Key employees will be required to achieve the appropriate ownership level within
5 years and are expected to make continuous progress toward their target.
Appointment to a new level will reset the five year requirement. Unexercised
options prior to vesting are not counted toward meeting the guidelines.

Holding Period

Covered employees must retain net vested Restricted Stock Units and the net
shares resulting from any exercise of stock options if the ownership
requirements are not yet satisfied.

Covered employees are asked to report annually on their progress toward
attainment of their share ownership goals.