Guide to the Lockheed Martin Corporation Supplemental Savings Plan for Eligible Employees of Lockheed Martin Corporation

Transcription

1 Guide to the Lockheed Martin Corporation Supplemental Savings Plan for Eligible Employees of Lockheed Martin Corporation November 1, 2016 This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of GuideS16

2 Table of Contents Introduction 3 Access to Plan Information 4 Plan Highlights 5 Participating in the Plan 5 Investing in the Plan 15 Changing your Investment Elections 18 Receiving Your Account Balance 24 Survivor Benefits 26 Administrative Information 27 Definitions 31 Investment Options 32 Target Date Funds Overview 32 Target Date Funds 37 Core Funds Mix & Monitor 40 Appendix A- Average Annual Rate of Return 59 Appendix B- Annual Rate of Return 61 Appendix C- Fee and Expense Information 64 2

3 Introduction The Lockheed Martin Corporation Supplemental Savings Plan (NQSSP or Plan) is a special type of retirement savings plan limited to a select group of management or highly compensated employees. This type of plan is often referred to as a non-qualified plan, which means that the NQSSP is not subject to the Internal Revenue Code (Code) limits that apply to more traditional retirement plans such as the Lockheed Martin Corporation Salaried Savings Plan (SSP). The NQSSP is considered to be an unfunded and unsecured plan for purposes of the Code and the Employee Retirement Income Security Act (ERISA). The NQSSP is exempt from most of the provisions of ERISA (including ERISA s fiduciary responsibility provisions). The purpose of the NQSSP is to provide eligible employees the opportunity to defer compensation that cannot be contributed under the SSP due to Code limitations and to receive Lockheed Martin Corporation matching contributions (Company Matching Contributions) on those deferrals. The investment options available under the NQSSP generally mirror those available under the SSP with some exceptions. Investments in the NQSSP reflect only bookkeeping entries rather than actual purchases of the underlying investments. Lockheed Martin Corporation (the Company) and the Plan Trustee are not responsible for your investment choices or investment losses that may result from your investment choices. The Company does not guarantee the performance of these investment funds and is not liable for any losses you may experience due to investment performance. This Guide is a summary of the terms and features and the investment options available under the NQSSP as of November 1, It does not claim to be complete. The Plan s terms are set forth in the official plan document and cannot be modified by the contents of this booklet or other written or oral statements to you from Benefits Administration, Human Resources representatives, or other personnel. Where conflicts exist, the terms as set forth in the official NQSSP document govern. You are encouraged to review the official NQSSP document in its entirety. You may obtain a copy of the NQSSP document at no charge on the Savings Plan Web Tool, or you may write to: Lockheed Martin Corporation Attn: Savings Plans Operations 6801 Rockledge Drive, CCT-115 Bethesda, MD Along with additional documents, this Guide also serves as the prospectus for the NQSSP. In addition to this Guide, you will receive a highlights brochure describing the NQSSP. 3

4 This Guide does not create a contract of employment between the Company or any of its subsidiaries and any employee. Nothing in this booklet prevents the Company from lawfully terminating or changing the terms of any employee s employment. Tax legislation signed by the President of the United States on October 22, 2004 imposed new requirements on the NQSSP and required the Company to amend the Plan. The amended Plan applies only to contributions made after December 31, 2004 and earnings on those contributions. While it is expected that the Plan will continue indefinitely, the Company reserves the right to amend, suspend or terminate it as provided in Article VIII of the NQSSP document. Access to Plan Information Managing your NQSSP account is easy and convenient when you use one of the tools provided by the Company. You may access your NQSSP account information and manage your investments on the same website where you access your Lockheed Martin Corporation Salaried Savings Plan (SSP) account. The following tools are available 24/7 (except during occasional system maintenance periods): The Savings Plan Web Tool The Savings Plan Web Tool is available by accessing LM People at on the Lockheed Martin Intranet or via on the Internet and clicking on Savings Plan under the Pay and Benefits section. The Savings Plan Web Tool is also available at The Savings Plan Information Line is available at: - Toll-free within the U.S.: Outside the U.S.: TDD communication services for the hearing impaired: Customer service representatives are available Monday through Friday 8 a.m. to 8 p.m. Eastern time, except on New York Stock Exchange holidays, by calling the Savings Plan Information Line. Savings Plan password Your savings plan password is essential to protect your personal savings information. It is your responsibility to keep your savings plan password secure. You should protect your savings plan password as you would any password or PIN that permits access to your financial and personal data. Consider changing your password periodically. 4

5 Glossary of Terms A useful glossary of capitalized terms used in this Guide is included in the Definitions section at the end of this Guide. If a capitalized term is used but not defined in this Guide, it has the same meaning given in the Plan document for the NQSSP. Plan Highlights Here are some of the highlights of the NQSSP: In combination with the SSP, you may save up to 40% of your base pay (40% on a before-tax, Roth 401(k) or after-tax basis or any combination of the three) under the SSP, and up to 40% of your base pay on a before-tax basis under the NQSSP, less any contributions to the SSP. Immediate vesting Diverse investment options similar to those in the SSP. Tax-deferred savings. Company Matching Contributions. Participating in the Plan Plan Eligibility You are eligible to participate in the NQSSP for 2017 if you are an employee eligible to participate in the SSP (as of November 1, 2016), and 1) your annual rate of base compensation on November 1, 2016 is at least $235,000 (increased by $5,000 for each year); or 2) you are a participant in the Lockheed Martin Corporation Management Incentive Compensation Plan (MICP), the Applied NanoStructured Solutions, LLC Management Incentive Compensation Plan, or the Lockheed Martin Corporation Attorney Incentive Plan as of November 1, If you were participating in the NQSSP from 2009 to 2016, and you do not meet one of the above requirements, you may continue to participate in the NQSSP in subsequent plan years, provided that: 3) your annual rate of base compensation on November 1 of each subsequent plan year equals or exceeds $150,000, and 4) you have continued to participate in the Plan for each plan year after If you are eligible to continue participation under these grandfather provisions, and you cancel your Deferral Agreement for any year, you will no longer be eligible to participate in the NQSSP for any year until you meet one of the eligibility requirements in 1) above. 5

6 For example: Participant A entered into a Deferral Agreement to participate in the NQSSP in 2009, 2010, 2011, 2012, 2013, 2014, 2015 and As of November 1, 2016, Participant A s base compensation is $150,000. Participant A may continue to participate in the NQSSP in 2017, and later years to the extent his base compensation remains at least $150,000 on each subsequent November 1. However, in November 2016, Participant A cancels his Deferral Agreement so that he will cease participation in the NQSSP on January 1, Participant A does not participate in the NQSSP in On November 1, 2017, Participant A asks if he can make a Deferral Agreement for On November 1, 2017, Participant A s base compensation is $180,000, and he is not a participant in the MICP or other designated incentive plan. Participant A may not elect to participate in the NQSSP for 2018 or any subsequent year until his compensation reaches $240,000 (increased by $5,000 for each year) or he begins to participate in the MICP or other designated incentive plan. In addition to the above, the Committee may establish additional requirements for participation in the NQSSP. Under its authority as provided by this plan provision, the Committee limits participation in the NQSSP to employees that the Committee believes to be a select group of management or highly compensated employees within the meaning of Title I of ERISA. For example, the Committee may limit participation in the Plan to employees who are engaged full-time in activities related to the management of the Company or its subsidiaries, affiliates, programs, or employees. The term employee includes only those individuals that the Company classifies on its payroll records as employees. You are not eligible to participate in the Plan if you are a consultant, independent contractor or leased employee, are paid by a third-party employer, or otherwise are not classified as an employee by the Company. You are also not eligible to participate in the Plan if you are covered by a collective bargaining agreement. As an eligible employee, you may elect to have your contributions to the NQSSP start when your contributions to the SSP have exceeded the contribution limitation on before-tax (including Roth 401(k)) contributions ($18,000 in 2017). Contributions to the NQSSP will begin on a before-tax basis after you have made $18,000 in before-tax and Roth 401(k) contributions to the SSP. If you reach the Code limitation on includible plan compensation ($270,000 for 2017) before you have reached the limitation on before-tax contributions, your contributions to the SSP will cease, and you will not participate in the NQSSP for such year. For example: Participant A makes $255,000 a year in base compensation and elects to contribute 10% of his eligible compensation to the SSP on a before-tax basis and 10% of his eligible compensation on a Roth 401(k) basis. In the month of May 2017, Participant A s contributions to the SSP will reach $18,000. At that time, Participant A will begin to contribute 20% of his eligible compensation to the NQSSP on a before-tax basis. 6

7 Participant B makes $500,000 a year in base compensation and elects to contribute to the SSP 5% of her eligible compensation on a before-tax basis and 10% of her eligible compensation on an after-tax basis. In the month of July 2017, Participant B s before-tax contributions reach $13,500, and her after-tax contributions reach $27,000, based on compensation of $270,000 earned to date. Because the Participant has reached the Code limit on includible plan compensation, her contributions to the SSP must cease for Participant B will not contribute to the NQSSP in 2017 because her before-tax contributions to the SSP did not reach $18,000. How to Enroll Prior to the start of each plan year, the Company will provide enrollment information to employees who are anticipated to meet the eligibility requirements of the NQSSP. To enroll, you must access the Savings Plan Web Tool and complete the enrollment process before the enrollment period ends on November 30, The contribution percentage elected will govern the combined total contribution to the SSP and the NQSSP for the year. If you elect to participate in the NQSSP, you may not change or cancel your elected contribution percentage to the SSP (including Roth 401(k)) or the NQSSP during the plan year. You may, however, change your catch-up contribution amount for the SSP if you are age 50 or older during the plan year. Prior to the next plan year, you will be given an opportunity to change your contribution election for the following year. If you are already a participant in the NQSSP and remain eligible, your elections will carry over unless you make a change. The amount deferred to the NQSSP when you reach the IRS limit on elective deferrals to the SSP will be based on your elected contribution percentage(s) for the SSP (including beforetax, Roth 401(k) and after-tax contributions) prior to any reduction imposed on contributions to the SSP by the Code, including limitations due to non-discrimination rules. You may save from 1% to 40% of your base pay on a before-tax basis, in whole percentages. Once you make your elections, contributions will continue for the entire calendar year. Base pay includes regular salary, pay for holidays, pay while on vacation, and pay for short-term disability or sick leave. It also includes lump sum merit payments given in lieu of pay increases and before-tax contributions for 401(k) plans, flexible benefits or fringe benefit plans. 7

8 Base pay does not include overtime, incentive compensation, bonuses, commissions, rate guarantees, severance, relocation pay, lump sum payments in lieu of vacation pay, variable rate compensation, shift differentials, or other special pay. If you elect to participate in the NQSSP, your contribution will begin automatically in the NQSSP after you have reached the $18,000 IRS limit on before-tax and Roth 401(k) contributions to the SSP. NQSSP Investments Contributions under the NQSSP and the crediting of investment earnings (or losses) reflect bookkeeping entries based on the performance of the investment options that are available under the NQSSP. Amounts deferred under the NQSSP are not used to make actual purchases of the underlying investments. Any amounts deferred will be credited to bookkeeping accounts that correspond to your investment elections and will be credited accordingly to reflect investment performance. While the amount credited to you within an account will fluctuate so as to track changes in the value of an investment, you will have no ownership rights in the instruments held by the funds that the account emulates. This is an important distinction, particularly for accounts that invest in Company common stock, because it means, among other things, that with respect to the corresponding bookkeeping entry in the NQSSP, you have no voting rights with respect to amounts credited and no right to receive shares of Company common stock upon a distribution from the NQSSP. To the extent that dividends are paid with respect to Company common stock, a corresponding amount will be credited to that portion of your NQSSP bookkeeping record that is attributable to the Company Common Stock Fund and reinvested as Company Common Stock Fund credits. ERISA and Unfunded Status of NQSSP The NQSSP is an unfunded, non-qualified plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees; as such, it is subject to only limited requirements of ERISA. The provisions of ERISA to which the NQSSP is subject include reporting and disclosure requirements (Part I of Title I of ERISA) and the administration and enforcement provisions (Part 5 of Title I of ERISA). The NQSSP is not subject to the minimum participation and vesting, funding, fiduciary responsibility or termination insurance provisions of ERISA (Parts 2, 3, and 4 of Title I of ERISA and Title IV of ERISA, respectively). 8

9 Because the NQSSP is not subject to the funding requirements of ERISA, the Company is not required to set aside assets for Participants or hold contributions in accounts for Participants. The NQSSP constitutes only a contractual promise by the Company to make payments in the future, and each Participant's rights are those of a general, unsecured creditor of the Company. In the unlikely event that the Company should be unable to satisfy the claims of its creditors, contributions in your account would be subject to the claims of other creditors in addition to your claims. Because contributions are considered part of the Company s general assets, there is an element of risk in participating in the NQSSP. No Participant will have any beneficial interest in any specific assets that the Company may hold or set aside in connection with the NQSSP. The Company may set aside assets in a trust commonly known as a "rabbi trust" and it may satisfy its obligations to Participants by payments out of such trust. However, the assets of any such trust will remain subject to the claims of other creditors of the Company. The Company may elect to acquire shares of Common Stock to fund its payment obligations to Participants. The stock that may be acquired may be shares of stock held in treasury, authorized but unissued stock, or stock that may be acquired in the open market. The stock may be held in the rabbi trust described in the preceding paragraph. Participants will not have any interest in any shares of Common Stock acquired by the Company or the trust to fund its payment obligations. State Street Bank & Trust Company, the trustee, will vote shares of Common Stock held in the rabbi trust at its discretion. No Transferability/Assignability of NQSSP Accounts A Participant's rights under the NQSSP may not be assigned, transferred, or otherwise encumbered. You may not elect a rollover of your NQSSP account to another retirement plan. Any purported transfer, assignment, pledge or other encumbrance or attachment of any payments or benefits under the NQSSP, or any interest therein will not be permitted or recognized, other than through a Domestic Relations Order or through the designation of, or passage of payment rights to, a Beneficiary. You may contact the Lockheed Martin QDRO Department at (877) to obtain information regarding the NQSSP s Domestic Relations Order procedures. See the Survivor Benefits section of this booklet for more information regarding designating a Beneficiary. 9

10 The Company Contributes to Your Account The Company contributes a match equal to 50% of the first 8% of your combined contributions (your Basic Contributions) to the NQSSP and SSP. Any additional contributions you elect are referred to as Supplemental (or unmatched) Contributions. Company Matching Contributions are credited to your bookkeeping account each pay period to emulate automatic investment in the Company Common Stock Fund. Refer to the Investing in the Plan section of this booklet for more information on the Company Common Stock Fund. Your Investment Earnings Grow Tax-Deferred Earnings on your contributions and the Company Matching Contributions to the NQSSP also accumulate on a tax-deferred basis. You do not have to pay taxes on any of your NQSSP investment earnings until you receive the money. You are Immediately Vested You are always fully vested in the value of your contributions made to the NQSSP. In addition, you are immediately vested in the value of all Company Matching Contributions made to your account as well as the earnings made on your investments. Should you leave the Company for any reason, you are entitled to receive your entire account balance, subject to the claims of any creditors of the Company. Timing of Investment of your Contributions Generally, your contributions (including Company Matching Contributions) will be posted to your account on the Friday following the week they are withheld from your pay. If a holiday occurs in the week and, as a result, the Recordkeeper and the New York Stock Exchange are closed, instead of posting on Friday, your contributions and the Company Matching Contributions may be posted to your account the following Monday. Plan Withdrawals and Loans Withdrawals and loans are not permitted in the NQSSP. Loss of Eligibility If you continue to work for the Company, but are transferred to a business area or change to an employee status that is not eligible to participate in the NQSSP, you may not make any further contributions to the Plan. 10

11 If, at any time after you become a participant, either (i) your annual base pay on November 1 falls below $235,000 (increased by $5,000 for each year) or $150,000 for grandfathered participants, or (ii) you do not participate in the MICP (or other designated incentive plan) for a year, you will no longer be eligible for the NQSSP in the next following year and will not again be eligible for the NQSSP unless and until you satisfy the eligibility requirements set forth above. If you are a grandfathered participant, and you cancel your deferral election for the NQSSP for any year, you will no longer be eligible for the NQSSP until the year following the year in which your annual base pay on November 1 reaches $235,000 (increased by $5,000 for each year) or you become a participant in the MICP or other designated incentive plan. If the Company no longer classifies you as a select management or highly compensated employee, you will no longer be eligible for the NQSSP for the next following year. A transfer to another job within the Company or a subsidiary of the Company does not entitle you to a distribution from your account, even if you are no longer eligible for the SSP or NQSSP at your new position. Similarly, the Company s sale of a subsidiary for which you work to an unrelated company does not entitle you to a distribution from your NQSSP account, even if the Company is no longer your employer after the sale. Your account will remain in the Plan, and you will retain the right to make investment changes. Your account balance is otherwise payable at your Termination of Employment, including due to retirement, Layoff, or disability, or to your Beneficiary upon your death. Application of Federal Securities Laws/Registration Statement The Securities and Exchange Commission (SEC) has indicated that the obligations of the Company represented by the bookkeeping entries reflecting your NQSSP account may be considered securities within the meaning of the federal securities laws. As a result, the Company has filed a registration statement registering these securities. It is important that you distinguish between these bookkeeping accounts and actual ownership of the underlying investments that the bookkeeping entries will emulate. While the SEC may consider the Company s obligations under the NQSSP to be securities, you have no rights to any securities and no securities will be distributed to you. Any distributions from the NQSSP will be in cash. United States securities laws require that the Company provide Participants with specific information concerning the NQSSP and its operation. This information is provided in several documents known as a prospectus. The following documents collectively make up the prospectus for the NQSSP: The NQSSP document as amended and restated from time to time; This Guide; The distribution election (as confirmed by your confirmation statement) and the Election to Change Form and Commencement of Payout agreement, if any; and The registration statement of which the prospectus is a part and the documents incorporated by reference into the registration statement, which means that the 11

12 registration statement refers you to additional important documents that have been filed separately with the SEC. In addition, all documents and reports filed by the Company with the SEC subsequent to the date of this prospectus pursuant to Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) (except, with respect to Current Reports on Form 8-K, any information that is furnished) are deemed to be incorporated by reference in the registration statement. You can find these documents on the SEC's website at or at the Company s website at You can also obtain copies of any of these documents, without charge, by making an oral or written request to the Corporate Secretary as follows: Senior Vice President, General Counsel, and Corporate Secretary, Lockheed Martin Corporation 6801 Rockledge Drive Bethesda, MD (301) No person has been authorized to give any information or to make any representations, other than those contained in this prospectus, in connection with the offer contained in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any interests or Common Stock in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this prospectus nor any sale made hereunder will under any circumstances create any implication that there has been no change in the affairs of the Company or in the NQSSP since the date hereof, or that the information contained or incorporated by reference herein is correct as of any time subsequent to its date. Neither the SEC nor any state securities commission has approved or disapproved of these interests or the Company common stock investment measures in the NQSSP, or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. The information contained in this prospectus may not be current after the date of this prospectus. If the prospectus is substantially amended, the Company will provide to you the documents to update the prospectus. These documents will contain a notation similar to the notation in the box on the front of this Guide indicating that the new documents are part of the prospectus. You should rely only on (1) the information contained in this prospectus, (2) any future documents provided to you updating this prospectus, or (3) information that we have referred you to in any part of the prospectus. Any questions about day-to-day administration of the NQSSP should be directed to the Savings Plan Information Line at Any other questions concerning the NQSSP should be directed to: Senior Vice President, Human Resources Lockheed Martin Corporation 6801 Rockledge Drive 12

13 MP Bethesda, MD Any questions that you have concerning trading in the Company s securities may be directed to: Vice President and Associate General Counsel Corporate, Securities and Transactions Lockheed Martin Corporation 6801 Rockledge Drive MP 208 Bethesda, MD NQSSP Administration The Management Development and Compensation Committee of the Board of Directors (Committee) is responsible for administering the NQSSP. Under the direction of the Committee, the Company s Retirement and Savings Plans department handles the day-today operation of the NQSSP. In this guide, the Committee and Retirement and Savings Plans department are collectively referred to as the Plan Administrator. The Committee has full power and authority to interpret and administer the NQSSP and, in this capacity, the Committee acts as manager of the NQSSP. Recordkeeping services for the NQSSP are provided by Voya Financial. The Recordkeeper will keep track of the contributions in your NQSSP account and the resulting earnings (or losses) and will process NQSSP payments. Questions concerning the administration of the NQSSP should be addressed to Voya Financial though the Savings Plan Information Line or to: Voya Financial Attn: Lockheed Martin Savings Plan Information Center P.O. Box Jacksonville, FL, Please see the section of this Guide titled Administrative Information and Article IX(6) of the NQSSP document for a description of the procedures when a claim under the NQSSP is wholly or partially denied by the Savings Plan Committee or its delegate. Tax Consequences The following discussion describes the material tax consequences to you in connection with transactions under the NQSSP. This discussion is for general information only and does not cover all tax consequences related to your participation in the NQSSP. This 13

14 discussion is based on the laws, regulations, rulings, and decisions in effect on the date hereof, all of which are subject to change, possibly with retroactive effect. You are urged to consult your own tax advisor as to the Federal, state, local, and foreign tax consequences of participation in the NQSSP in light of your particular circumstances. For Federal income tax purposes, you will not be required to include in current taxable income deferrals, Company Matching Contributions, or earnings credited to your account. FICA (Social Security and Medicare) tax withholding must be applied to deferrals and Company Matching Contributions to the NQSSP in the year the deferrals and contributions are credited to your NQSSP account. An amount sufficient to permit withholding of the FICA tax owed will be withheld from your paycheck at the time of your deferral or Company Matching Contribution. No FICA tax is owed on investment earnings (if any) on your account. There are no tax consequences to you arising from reallocation of your account or fund transfers of amounts between investment options in the NQSSP. Post-2004 contributions are subject to the requirements of Code Section 409A. Your elections and distributions relating to post-2004 contributions must be made in accordance with the terms of the NQSSP and Code Section 409A. Failure to meet these requirements could result in immediate taxation, interest, and a 20% penalty. Please consult your own tax advisor if you have any questions on these requirements. The NQSSP is not eligible for treatment as a qualified employee pension, profit sharing, or stock bonus plan under Code Section 401(a). Since the NQSSP is not qualified under Code Section 401(a) for Federal income tax and ERISA purposes, distributions from the NQSSP cannot be rolled over to an IRA or other retirement plan. Cash distributions made to you from the NQSSP are taxable income on the payment date. When you receive a distribution from the NQSSP, Federal, state, and local income taxes, where applicable, will be withheld from the distribution and reported on Form W-2. FICA taxes will be withheld on the deferral at the time the deferral is credited to your account and are not owed or withheld on distributions of the deferral or on any investment income. In most states, the state and local income tax consequences will follow the Federal income tax treatment described above. THIS IS NOT, AND YOU SHOULD NOT CONSIDER THIS TO BE, LEGAL OR TAX ADVICE. THE TAX RULES ARE COMPLICATED AND THEIR IMPACT ON A PARTICULAR INDIVIDUAL MAY DIFFER DEPENDING ON THE INDIVIDUAL S SPECIFIC CIRCUMSTANCES. PLEASE CONSULT WITH YOUR OWN LEGAL OR TAX ADVISORS REGARDING YOUR SPECIFIC SITUATION. 14

15 The Importance of Diversifying Your Retirement Savings To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing the overall risk of losing money. Market or other economic conditions that cause one category of assets, or another security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. It is important to remember that investment rates of return cannot be predicted with certainty. The stock market can be volatile, and actual rates of return can vary widely over time. In deciding how to invest your retirement savings, you should take into account all of your assets, including any retirement savings outside of the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. Therefore, you should carefully consider your right to move any portion of your account that is invested in Company Common Stock into other investment alternatives under the Plan and how this right affects the amount of money that you invest in Company Common Stock through the Plan. It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. Investing in the Plan You Decide How to Invest Your Contributions Your account balance grows as you contribute to the NQSSP and as the Company matches 50% of the first 8% of your Basic Contributions. The bookkeeping account reflecting your account balance will be adjusted to reflect the performance of your investment funds. How earnings/losses will be credited to your bookkeeping account is your decision. Because the Company does not actually invest any assets with respect to the NQSSP, investment crediting/debiting is based on the performance of the SSP investment options. In other words, the rate of return reflected in your bookkeeping account will be the rate of return for the SSP investment options that correspond to the investment options you have elected for your NQSSP account. 15

16 The Recordkeeper will generally follow your investment instructions (subject to any applicable rules and procedures established from time to time and plan provisions permitting restrictions on investments or investment changes where necessary). You must establish your investment elections in 5% increments among the Plan s investment options. Depending on your investment goals, you may select a variety of funds. If in any event you do not have an investment election on file for the NQSSP, your election will be deemed to be the election you made in the SSP except that an election for the ESOP Fund or the Self-Directed Brokerage Account will be disregarded and invested in the Target Date Fund corresponding to the year closest to your 65 th birthday (the default investment option). All of the SSP investment options used as reference investment options for the NQSSP may contain cash reserves in order to provide liquidity for daily participant transactions. Such reserves are managed by the fund manager, State Street Global Advisors, a division of State Street Bank and Trust Company, or Northern Trust Investments, Inc. With the exception of the Company Common Stock Fund, the investment options may invest for hedging, liquidity or asset allocation purposes in some unleveraged securities that may be considered derivatives. The investment risk associated with these derivatives may differ from that of the investment options. For mutual fund investment options, you can review the fund prospectus for information on the use of derivatives in each fund. Investment Options Overview Finding the Investment Option that is Right for You The investment options that are right for you depends on your goals, retirement timeframe, feelings about risk and your level of knowledge about investing. To properly invest for retirement, you need the flexibility that comes from having a range of choices. As a result, the NQSSP offers two distinct categories of investment options: Target Date Funds These funds contain a professionally monitored mix of stocks, bonds and diversifier investments and are designed to provide an investment strategy that is appropriate for particular retirement dates. If you desire simplicity, the Target Date Funds offer a simple one-step alternative to fund selection. Core Funds These funds cover a broad range of asset classes, including Lockheed Martin Common Stock in the Company Common Stock Fund. If you are comfortable deciding how to divide your money among stocks, bonds, diversifiers, and short-term investments, you can design your own portfolio mix using the Core Funds. Important Note This guide describes the Plan s investment options as of September 30,

17 Important Investment Funds Information Information on the Plan s Investment Options, including fact sheets, information on past investment returns, and fee and expense information, is provided on the following pages. You may obtain Morningstar Profile investment summaries for each investment option in your plan on the Web Tool. These Profiles contain specific investment information and are updated on a quarterly basis. Your Investment Options at a Glance Investment Option Target Date Funds Core Funds: Government Short Term Investment Fund Stable Value Fund Treasury Inflation-Protected Securities (TIPS) Fund Broad Market Bond Index Fund S&P 500 Indexed Equity Fund U.S. Equity Fund Small/Mid-Cap Indexed Equity Fund Global Equity Fund International Developed Markets Equity Fund MSCI EAFE Indexed Equity Fund Global Real Estate Fund Emerging Markets Indexed Equity Fund High Yield Bond Fund Commodities Fund Company Common Stock Fund Fund Type Target Date Domestic Short Term Fixed Income Stable Value Domestic Inflation-Protection Fixed Income Index Domestic Fixed Income Index Domestic Large Cap Stock Index Domestic All Cap Stock Domestic Small/Mid-Cap Stock Index Global Stock Foreign Stock Foreign Stock Index Global Real Estate Securities Foreign Emerging Markets Stock Index High Yield Bond Fund Commodities Non-Diversified Domestic Stock S&P 500 is a registered trademark of The McGraw-Hill Companies, Inc. MSCI EAFE is a registered trademark of Morgan Stanley Capital International. Lockheed Martin Investment Management Company (LMIMCo), a wholly owned subsidiary of Lockheed Martin Corporation, located at 6901 Rockledge Drive, Bethesda, MD 20817, provides overall management of the investment options in the Plan. LMIMCo often appoints external investment managers to manage the investment options and may add to or replace one or more of the underlying investment managers at any time without notice to participants. For detailed information about each of the investment options, refer to the Investment Options section. Investment Performance Appendices A and B of this Guide provide information on how the investment options in the Plan have performed over time along with a comparative benchmark. Updated investment performance information is available on the Web Tool. Past performance is not predictive of future performance. Fee and Expense Information for Investment Options in the Plan Appendix C ( Fee and Expense Information ) of this Guide provides the approximate expected range of annual investment management fees, annual administrative expenses and total annual expenses as a percentage of fund assets for the Core Funds and Target Date 17

18 Funds. Fee and Expense Information inserts for the Plan will be updated annually and will be available on the Web Tool or by calling the Information Line. Restrictions on Transfers Involving the Company Common Stock Fund All participants are subject to the prohibitions against insider trading which generally prohibit any person from engaging in transactions involving the Company s securities while in possession of material non-public information. For purposes of the NQSSP, the prohibition against insider trading means that you should not make any election to move any portion of your account balance into or out of the Company Common Stock Fund while in possession of material non-public information about the Company. Executive Officers (including persons who have been Executive Officers in the past six months) of the Company are subject to additional restrictions under Section 16 of the Exchange Act (prohibitions against short-swing trading). As a result, such persons may not transfer into or out of the Company Common Stock Fund, or request distributions or withdrawals from account balances in the NQSSP that are attributable to the Company Common Stock Fund, until such transactions have been reviewed by the Office of the General Counsel of the Company. If you are an Executive Officer who is subject to Section 16 restrictions, the Recordkeeper may place a hold on your account. Executive Officers (including persons who have been Executive Officers in the past six months) should consult with the Office of the General Counsel before attempting any such transaction. The Board of Directors periodically notifies those individuals whom the Board of Directors considers to be Executive Officers of the Company. Restrictions on Sale Because participants are not entitled to receive shares of Company stock or other securities upon distribution of their accounts, participants will not be entitled to resell any stock or securities underlying any of the investment options. All distributions under the Plan will be made in cash. Changing Your Investment Elections Investing future contributions and transferring your existing account balance are two unrelated transactions. You must make a separate request for each transaction. To make either change, access the Savings Plan Web Tool or call the Savings Plan Information Line. Future Contributions You may change your investment elections for future contributions at any time. Investments in the various funds must be made in 5% increments. After you select your investment elections, the change will generally be effective when the Recordkeeper receives the next contribution. 18

19 Changing Your Current Investment Mix There are two ways to change the investment of your existing account balance: Reallocation Fund transfer Reallocations You may change the allocation of your savings plan assets among the Plan s investment choices by completing a fund reallocation. A fund reallocation allows you to construct your portfolio by identifying what you want your total account to look like immediately after the reallocation. This is done by electing the percentage (in 5% increments) that you want invested in each of the Core Funds and Target Date Funds offered. As a result, reallocations have an impact on every fund for which you change the percentage allocation at the time of the transaction. Your allocation must equal 100%. Reallocation Example Account Balance Before Reallocation Fund Name Fund Balance (% of Account) U.S. Equity Fund 30% Company Common Stock Fund 40% S&P 500 Indexed Equity Fund 20% Emerging Markets Indexed Equity Fund 10% The Participant has decided that he wants to reallocate all amounts that are not invested in the Company Stock Fund to the Target Date Fund that corresponds to the year closest to his 65 th birthday. Following the instructions on the Savings Plan Web Tool or Savings Plan Information Line, the Participant s account now looks like the following. Account Balance After Reallocation Fund Name Fund Balance (% of Account) U.S. Equity Fund 0% Company Common Stock Fund 40% Target Date Fund 60% S&P 500 Indexed Equity Fund 0% Emerging Markets Indexed Equity Fund 0% Note that the impact of the transaction was the reallocation of the Participant s entire account, except the portion of the account invested in the Company Common Stock Fund, to the Target Date Fund that corresponds to the year closest to his 65 th birthday. The percentage of his account invested in the Company Common Stock Fund might change over time based on the performance of the Company Common Stock Fund and the Target Date Fund. Fund Transfers You can transfer a specific amount of money in either dollars or as a percentage among specific funds. This can be done by a whole dollar amount or by a percentage of the balance invested in a particular investment fund (in 5% increments). Fund 19

20 transfers affect only the fund you take the monies from and the fund to which you move the monies. Fund Transfer Example Account Balance Before Fund Transfer Fund Name Fund Balance ($) High Yield Bond Fund $ 5,000 Global Equity Fund $ 7,000 Commodities Fund $ 2,000 U.S. Equity Fund $ 4,000 Total Account Balance $18,000 The Participant has decided to move $3,000 from the Global Equity Fund into the Company Common Stock Fund. Following the instructions on the Savings Plan Web Tool or Savings Plan Information Line, the Participant s account now looks like the following. Account Balance After Fund Transfer Fund Name Fund Balance ($) High Yield Bond Fund $ 5,000 Company Common Stock Fund $ 3,000 Global Equity Fund $ 4,000 Commodities Fund $ 2,000 U.S. Equity Fund $ 4,000 Total Account Balance $18,000 Note that the impact of the fund transfer was a change to only those balances identified. Reallocation and Fund Transfer Opportunities and Restrictions For a transaction to be processed on a given business day (excluding weekends, holidays, and other days the New York Stock Exchange is closed), your transaction must be completed by calling the Savings Plan Information Line or accessing the Savings Plan Web Tool by 4 p.m. Eastern time. If your transaction is completed after that time, it will be processed on the next business day. See Potential Delays for Transactions below. The Plan Administrator may establish rules and procedures governing election changes and other matters. Lockheed Martin Investment Management Company may establish rules and procedures governing the selection and removal of investment funds. In certain situations (for example, excessive transfers), limitations may be imposed with respect to investment changes by a participant or participants. 12 Changes per Year Restriction You may change the investment mix of your current account balance under the Plan by either a fund transfer (specific dollar amount) or a reallocation (of specified percentages) up to 12 20

21 times during a calendar year. These transactions may involve any of the investment funds including the Stable Value Fund. You will always be provided at least one transfer opportunity each calendar quarter regardless of the number of prior investment transfers. For example, if you have completed all 12 transfer opportunities by early in the third quarter, you would still be able to make one additional transfer in the fourth quarter. Unlimited Transfers Allowed from Company Common Stock Fund Notwithstanding the 12 transfers allowed each year and subject to the restrictions on transfers involving the Company Common Stock Fund discussed earlier in this Guide, you can make unlimited spot transfers from the Company Common Stock Fund into any other investment option. Please note, however, in the event you perform a fund reallocation that impacts the Company Common Stock Fund, that reallocation will count toward your 12 annual transfers. Stable Value Fund Restriction You may reallocate or transfer monies into the Stable Value Fund from any investment option (other than the Company Common Stock Fund) at any time subject to the restrictions described herein, and you may reallocate or transfer out of the Stable Value Fund into the Company Common Stock Fund or into any of the Target Date Funds or Core Funds at any time subject to the restrictions described herein. However, amounts transferred out of the Stable Value Fund must remain invested in Target Date and/or Core Funds for at least 90 days before they can be transferred to the Treasury Inflation-Protected Securities (TIPS) Fund or the Government Short Term Investment Fund. 30-day Transfer Restriction In addition to the restrictions mentioned above, you cannot transfer back into any investment option for 30 calendar days following a fund transfer or reallocation from that investment option. Potential Delays for Transactions The Recordkeeper, in its discretion, may limit transactions amongst investment options by the NQSSP s participants. The Recordkeeper, as directed by the investment managers, acts independently in connection with purchases and sales of securities for the NQSSP; the Company has no control over the timing or manner of such purchases or sales. The Recordkeeper may not complete transactions on a particular day for a number of reasons, such as a suspension of trading in an asset important to one of the investment funds, a major market disruption, a lack of liquidity in one of the investment funds, or if one of the investment funds is not operational. As a result, there may be delayed execution of all participant requests for all types of transactions in the NQSSP for that day, and perhaps subsequent days, even if you have 21

22 already submitted a transaction request to customer service representatives, the Savings Plan Information Line or the Savings Plan Web Tool. If the Recordkeeper cannot complete certain transactions in one of the investment funds for that day, the result may be delayed execution of transactions pertaining to that particular investment fund. Transaction requests that do not involve that particular investment fund are expected to be processed on the date requested. Generally, you may not revoke a transaction once it has been requested, but you will be informed in writing if for any reason a transaction is not completed on the day requested. If a transaction is not processed on the day requested, the transaction will be completed as soon as administratively practical on the following or subsequent business days. The transaction will be priced according to the unit prices in effect on the day the transaction is completed. Transactions requested in the days following a delay may also not be completed on the day requested if processing of prior days transactions has not been completed. The value of your pending transaction may be invested in a short-term reserve account, pending investment in the funds you select. Administrative Expenses Investment management fees, brokerage commissions, transaction costs and other expenses of an investment option are paid out of the assets of the investment fund to which they relate unless stated otherwise, and are stated as a percentage of assets. Since the SSP also provides that all other SSP administrative expenses may be charged, to the extent permitted by law, against assets of the SSP, the rates of return for the NQSSP s investment options will reflect such expenses. Such administrative expenses include, but are not limited to, compensation attributable to the Trustees and administrative service providers, certain administrative or investment services performed by Company employees, recordkeeping audit, accounting, legal services, reporting, and the processing of Qualified Domestic Relations Orders. These expenses are incurred by either the Lockheed Martin Corporation Defined Contribution Plans Master Trust (the Trust ), one or more Funds, or the SSP, which is a beneficiary under the Trust. Those expenses incurred by the Trust or one or more Funds are allocated amongst the plans, including the SSP, based upon either the market value of assets or the number of participants of each plan that is a beneficiary of the Trust or is invested in a Fund. These expenses are stated as a range of percentages of assets. The actual percentage may fluctuate based upon the actual expenses incurred in any year and the amount of SSP s assets and number of SSP s participants at the time such expenses are paid. See the Investing in the Plan section for more information. Total annual expenses for each Fund will be the combination of fees and expenses for that investment option, as disclosed in either the Fund prospectus or the SSP s summary plan description, plus the administrative expenses paid by the SSP. 22

23 Accounts Are Valued Daily The value of your account balance is maintained in an individual account established in your name and valued as of 4 p.m. Eastern time each business day. NQSSP Statements Each year, around the end of January, you will receive an annual statement in the mail reporting the activity in your account. If you have terminated employment with the Company, you will receive a quarterly statement. Make sure the Company has your current address on file. You can change your address by accessing the Savings Plan Web Tool or by calling the Savings Plan Information Line. Annual and quarterly statements include the following information: Your Contributions Company Matching Contributions Investment earnings Investment transfers that you made during the period Dividends earned on company stock fund investments Notifications of important information from the Company If you do not receive your annual statement or have a question about any of the information shown, call the Savings Plan Information Line. By accessing the Savings Plan Web Tool, you have the flexibility to create your own customized statement at any time. This feature allows participants to view, save and print a statement containing any desired sections of their account information for a date range of their choice within the past 24 months. Make sure the Company has your current address on file so we can contact you regarding your account. Information Available from the Recordkeeper upon Request If you wish to find out how your account balance is invested, the value of your investment in each Fund, or if you want to change the investment of your future contributions or your account balance, call the Savings Plan Information Line or access the Savings Plan Web Tool. The following information is available upon written request: A description of the annual operating expenses of each investment option available under the NQSSP (e.g., investment management fees, administrative fees, transaction costs) that reduce the rate of return of that investment option and the aggregate amount of those expenses expressed as a percentage of average net assets of the investment option. Copies of any applicable documents that make up any prospectuses, financial statements and reports, and any other materials relating to the investment options, to the extent that information is available. 23

24 Morningstar Profile investment summaries for each investment option, including top 10 holdings, a complete list of currently held securities and other analysis tools. Information concerning the total value of units in each investment option offered under the NQSSP, as well as the past and current investment performance of each option determined net of expenses. List of assets comprising the portfolio of each designated investment option, the value of each such asset (or the proportion of the investment option alternative that it comprises) and, with respect to each such asset that is a fixed rate investment contract, the name of the issuer of the contract, the term of the contract, and the contract s rate of return. If you would like to receive any of the above information, please write to: Voya Financial Attn: Lockheed Martin Savings Plan Information Center P. O. Box Jacksonville, FL See the Administrative Information section for other available information. Receiving Your Account Balance When You Leave the Company When you Terminate Employment with the Company, you will automatically receive a distribution of your NQSSP account balance in accordance with your elected distribution option. You must elect the method of distribution when you first join the plan from one of the following options. For amounts attributable to pre-january 1, 2005 contributions: in a single lump sum distribution annual installments over 5, 10, 15, or 20 years For amounts attributable to post-december 31, 2004 contributions: in a single lump sum distribution annual installments over a maximum of 25 years (1 year increments) If you elect to make a change to your distribution option for amounts attributable to pre- January 1, 2005 contributions, your request must be made no later than one year prior to your Termination of Employment or retirement. 24

25 If you elect to make a change to your distribution option for amounts attributable to post- December 31, 2004 contributions, your request must be made no later than one year prior to your Termination of Employment or retirement and in addition, the first payment under your new election must be at least five years later than when payments would begin under your original election. If you make a subsequent change to your distribution option for amounts attributable to post-december 31, 2004 contributions, your payment must be delayed at least an additional five years from the payment date under your previous election. If your new election does not meet these requirements, the new election will be void and your previous valid election will apply. You may obtain an Election to Change Form and Commencement of Payout on the Savings Plan Web Tool or by calling or writing to: Voya Financial Attn: Lockheed Martin Savings Plan Information Center P.O. Box Jacksonville, FL Generally, your account will be distributed in accordance with your distribution elections. However, if your account balance is $10,000 or less at the time you Terminate Employment, your distribution will be made in a lump sum even if you elected installment payments. If, at any time after you Terminate Employment and are entitled to begin receiving distributions or have begun to receive distributions, your account balance is less than the annual Code limitation on before-tax (including Roth 401(k)) contributions for the year ($18,000 in 2017), the committee that makes claims determinations (or its delegate) may decide to distribute your account balance in a lump sum even if you elected installment payments. Distributions may also be made due to a conflict of interest or a change in control of the Company. See Article VI of the NQSSP document for more information on these and other distribution events for post-december 31, 2004 contributions and Appendix A(VI) of the NQSSP document for more information on these and other distribution events for pre- January 1, 2005 contributions. Timing of Distributions Payments from the NQSSP are generally processed on the fourth to the last business day of the month following your Termination of Employment (for any reason including retirement, layoff, or disability) in accordance with your elected payment method, but in all events shall be made as soon as administratively practicable (but no later than 90 days) following your Termination of Employment. Installments are processed annually in the same month as your initial payment until all installments have been paid. The valuation date for your distribution is the business day the distribution is processed. If you die prior to distribution of your entire account balance, your beneficiary will receive your remaining account balance in a lump sum. Payments to beneficiaries are generally processed on the fourth to the last business day of the month following your death, but in all events shall be made as soon as administratively practicable, (but no later than 90 days) following your death. 25

26 If you have allocated your NQSSP account to more than one investment option and are receiving installment distributions, the distribution will be prorated, by contribution type (Before-Tax, Company Match), among each of the funds in which you have a balance at the time of your distribution. If you are one of the 50 highest paid Lockheed Martin employees for the year, Federal tax law requires that payment of amounts attributable to post-december 31, 2004 contributions (including earnings thereon) be delayed for six months. A determination of the 50 highest paid employees is made each April following the report of the prior year s W-2 earnings from payroll. Due to variability in W-2 earnings (stock options, MICP, relocation, etc.) from year to year, the list of these individuals will change from year to year. You will be notified each year if this required delay may apply to you. Survivor Benefits Designating Your Beneficiary Beneficiary Designations for the SSP will also apply to the NQSSP. You can complete your Beneficiary Designation by selecting Beneficiary Information under Personal Information on the Savings Plan Web Tool. If you participated in any other Lockheed Martin retirement plan or any other retirement plan acquired by Lockheed Martin, your beneficiary designation for that plan does not apply to the NQSSP. You may designate one or more individuals or an estate or trust as your beneficiary(ies), but if you name more than one person, you must indicate the percentage of your account that each person should receive. You also may select a contingent, or secondary, beneficiary, who will receive your benefit if your primary beneficiary dies before you do. Different rules apply, depending on your marital status. If you are married: Your Spouse is your primary beneficiary unless your Spouse agrees in writing on the Beneficiary Designation paper form that you may designate someone else. His or her signature must be witnessed by a Notary Public. If you do not designate a beneficiary, your account balance will be paid to your Spouse in the event of your death. Designating a secondary or contingent beneficiary does not require your Spouse s consent. If you are not married: If you do not designate a beneficiary, your account balance will be paid to your estate. 26

27 After the Recordkeeper receives your properly completed Beneficiary Designation, you will be mailed a Confirmation Statement. Please review your Confirmation Statement and verify that all of the information is correct. If you submit a Beneficiary Designation in paper form, any new or changed beneficiary designation shall be effective only upon receipt by the Recordkeeper of your completed Beneficiary Designation form. In order for the beneficiary designation to be valid, your completed paper form must be returned to the Recordkeeper prior to your death. Your beneficiary will receive the payment in a lump sum. The Company is required to follow your properly completed and submitted Beneficiary Designation form, so it is important for you to keep the information current. You may need to change your beneficiary designation as your circumstances change for example, if you get married, divorced, have children, or your beneficiary dies. It is your responsibility to keep your beneficiary designation up to date. To confirm the beneficiary information you have on file, access the Savings Plan Web Tool or call the Savings Plan Information Line. Be sure to keep a copy of your beneficiary designation. Other than through designation of a beneficiary or pursuant to laws governing inheritance, you may not assign your rights under the Plan to any other person. No liens or security interests are permitted on your account balance. To Report the Death of a Participant When a participant dies, the death must be reported to the Recordkeeper by calling the Savings Plan Information Line. Once reported, a communication will be mailed to the beneficiary providing information and instructions associated with establishing an account for your beneficiary. If you do not have a beneficiary on file at the time of your death, a communication will be mailed to the individual reporting the death and a beneficiary account will be established in accordance with the Plan rules indicated in this Section. Administrative Information Administration The information in this section may be helpful if you need to ask questions about the Plan. This guide describes the Plan as of November 1, If there is any discrepancy between a description in this guide and the official Plan documents, the official Plan documents will govern. Official Plan Name The official name of the Plan is the Lockheed Martin Corporation Supplemental Savings Plan. 27

28 Employer Identification Number The IRS has given Lockheed Martin Corporation the employer identification number Plan Sponsor and Administrator Lockheed Martin Corporation is the sponsor of the NQSSP. The Plan is administered by the Management and Development Committee of the Board of Directors of the Company (or its delegate). You can reach the NQSSP Plan Administrator and the Plan Sponsor at: Lockheed Martin Corporation Attn: Savings Plan Operations - CCT Rockledge Drive Bethesda, MD For day-to-day questions, call the Savings Plan Information Line at TDD access Plan Year Plan records are kept on a calendar year basis beginning January 1 and ending on December 31 each year. Agent for Service of Legal Process Service of legal process relating to the NQSSP should be delivered to the Plan Administrator at the address shown above. ERISA and Funding The NQSSP is an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. Claims Determinations Claims determinations are made by the Lockheed Martin Corporation s Savings Plans Committee except that the Management and Development Committee of the Board of Directors retains decision-making authority over claims and appeals of elected officers of the Company. In carrying out these functions, the applicable committee has the full discretionary authority to interpret and construe the terms of the Plan, to decide questions related to eligibility to participate or the payment of benefits under the Plan, and to make related 28

29 findings of fact. The decision of the committee shall be final and binding to the full extent permitted by law. Applying for Benefits To apply for benefits, call the Savings Plan Information Line at For TDD communication services for the hearing impaired, call If Your Application for Benefits is Denied If disagreements arise about your NQSSP eligibility or benefits, we hope we can resolve them quickly and informally. However, if that is not possible, you may file a written appeal with the committee. The address for the committee is: Lockheed Martin Corporation Attn: Savings Plan Operations 6801 Rockledge Drive - CCT-115 Bethesda, MD Claims Procedures The committee has 90 days from the date your claim is received to determine what, if any, benefits are payable under the Plan. The committee may require more time to review your claim, if necessary due to circumstances beyond its control. If this should happen, the committee will notify you in writing before the end of the original period that its review period has been extended for up to 90 days. If this extension is made because you must furnish additional information, this extension will begin when the additional information is received. If your claim is denied, you will be notified in writing within the time periods outlined above. The notice will state the following, as applicable: specific reasons for denial; Plan provisions that support the denial; a description of any additional information needed to review your claim request; and instructions for requesting a review of your claim denial and the applicable time limits, including information regarding your right to bring a civil lawsuit under section 502(a) of ERISA following an adverse benefit determination on review. If your claim is approved, you will receive the appropriate benefit from the Plan. If your claim is denied in whole or part, you have the right to request a review of (or appeal ) the decision. To request a review, you or your authorized representative must make a written request to the committee within 60 days from the date you receive the claims denial. If you do not request a review within that time, you will have waived your right to appeal. 29

30 The committee s review will take into account all comments, documents, records, and other information you submit relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. If you wish, you, or your authorized representative, may review the appropriate plan documents and submit written information supporting your claim to the committee. You will be provided, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant to your claim for benefits. The committee has 60 days from the date your request is received to review your claim and notify you of a decision. Under special circumstances, the committee may require more time to review your claim. If this should happen, you will be notified in writing before the end of the original period that the review period has been extended for up to an additional 60 days. Once the review is complete, the committee will notify you, in writing, of the results of the review and indicate the Plan provisions upon which the decision is based. If your claim is denied on review, in whole or part, you will receive a written notice from the committee within the review period outlined above. The notice will include the following, as applicable: the specific reasons for the decision; reference to the specific plan provisions upon which the decision is based; a statement that you are entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to your claim for benefits; a statement describing any voluntary appeal procedures offered by the Plan and your right to obtain these procedures; and where required, a statement that there may be other voluntary alternative dispute resolution options. The written denial on appeal will include a statement regarding your right to bring a timely civil lawsuit under section 502(a) of ERISA following an adverse determination on appeal. 30

31 Definitions Basic Contributions The first 8% of contributions that you make to the NQSSP. Basic Contributions are matched by the Company at a rate of 50% Beneficiary the person or persons designated by a Plan participant to receive payments from the Plan following the participant s death Business Day any day the New York Stock Exchange is open for trading Code the Internal Revenue Code of 1986, as amended Company Lockheed Martin Corporation and its subsidiaries Company Common Stock Lockheed Martin Corporation Common Stock Company Matching Contributions the money that the Company contributes as a result of your Basic Contributions Employee The term employee includes only those individuals that the Company classifies on its payroll records as employees. Thus, you are not eligible to participate in the Plan if you are a consultant, independent contractor or leased employee, are paid by a third party employer, or otherwise are not classified as an employee by the Company. You are also not eligible to participate in the Plan if you are covered by a collective bargaining agreement that does not provide for participation in the Plan. ERISA (Employee Retirement Income Security Act of 1974, as amended) the federal law that protects employees rights relating to most benefit plans Layoff termination of employment due to lack of work LMIMCo Lockheed Martin Investment Management Company, a wholly owned subsidiary of Lockheed Martin Corporation, located at 6901 Rockledge Drive, Bethesda, MD Lump Sum Distribution payment within one taxable year of your entire account balance Morningstar provider of investment option analysis data on the Savings Plan Web Tool and on LM People NQSSP Lockheed Martin Corporation Supplemental Savings Plan Plan Lockheed Martin Corporation Supplemental Savings Plan Recordkeeper Voya Financial Plan Year January 1 to December 31 31

32 Spouse the person to whom the participant is legally married under applicable law, regardless of the sex of the person SSP the Lockheed Martin Corporation Salaried Savings Plan Supplemental (unmatched) Contributions any contributions you make that are not matched by the Company Termination of Employment or Terminate Employment your separation from service with the Company in accordance with Code section 409A and applicable regulations. Vested your right to receive the value of your entire NQSSP account, even if you leave the Company before retirement Investment Options The fund descriptions below describe the asset classes and portfolio construction for each investment option available under the NQSSP. Earnings/losses will be credited to your NQSSP account based on the performance of the investment options you select. These are hypothetical (not actual) investments, meaning NQSSP assets are not actually invested in these funds. Unlike the SSP, no NQSSP Participant will have any beneficial interest in any specific assets that the Company may hold or set aside in connection with the NQSSP. The investment performance of the Target Date or Core Funds may differ from the investment performance of their underlying funds because the SSP-based investment options contain cash reserves to provide liquidity for the daily transactions of their participants. Cash reserves are managed by State Street Global Advisors, a division of State Street Bank and Trust Company. The Target Date and Core Funds may invest for hedging, liquidity or asset allocation purposes in some securities that may be considered derivatives. The investment risk associated with these derivatives may differ from that of these investment options. For mutual fund investment options, review the fund prospectus for information on the use of derivatives in each fund. Target Date Funds Overview The following Lockheed Martin Target Date Funds are custom-designed funds only made available to Lockheed Martin savings plan participants, each of which is a fully diversified portfolio managed by an experienced portfolio management team: Target Date Fund 2005* Target Date Fund 2010* 32

33 Target Date Fund 2015* Target Date Fund 2020 Target Date Fund 2025 Target Date Fund 2030 Target Date Fund 2035 Target Date Fund 2040 Target Date Fund 2045 Target Date Fund 2050 Target Date Fund 2055 Target Date Fund 2060 How to Select the Target Date Fund That is Right for You 1. Estimate the date you think you might retire or the date you expect to begin withdrawals from your account. 2. Pick the Target Date Fund corresponding to the year closest to your estimated retirement date or the date you expect to begin withdrawals from your account. Target Date Funds Birth Date Ranges** Fund Name Birth Date Range Target Date Fund 2005* December 31, 1942 or before Target Date Fund 2010* January 1, 1943 December 31, 1947 Target Date Fund 2015* January 1, 1948 December 31, 1952 Target Date Fund 2020 January 1, 1953 December 31, 1957 Target Date Fund 2025 January 1, 1958 December 31, 1962 Target Date Fund 2030 January 1, 1963 December 31, 1967 Target Date Fund 2035 January 1, 1968 December 31, 1972 Target Date Fund 2040 January 1, 1973 December 31, 1977 Target Date Fund 2045 January 1, 1978 December 31, 1982 Target Date Fund 2050 January 1, 1983 December 31, 1987 Target Date Fund 2055 January 1, 1988 December 31, 1992 Target Date Fund 2060 January 1, 1993 or after *Intended for those near or in retirement **Birth Date Ranges are determined based on retirement at age

34 Professionals Manage Your Savings The Target Date Funds consist of various portfolios and are managed by a team of portfolio managers appointed by LMIMCo. Over time, the asset mix of each Target Date Fund will be adjusted across a diversified group of assets, representing a mix of investments that are considered appropriate for someone retiring in or near its designated year. Every three months the asset mix of each fund is gradually adjusted to a more conservative mix of investments. This process is shown on the chart below and is referred to as the Glide Path. Target Date Glide Path The portfolio managers invest in an expanded list of asset classes that include three general categories: stocks, bonds and diversifiers. Target Date Funds allow you to have exposure to certain asset classes not otherwise available in the savings plans. For example, the Target Date Funds include allocations to emerging market bonds and a balanced risk allocation strategy, two asset classes not available as separate investment options. In addition, all Target Date Funds include a mix of actively and passively managed investments. LMIMCo appoints the managers of the various underlying portfolios, and may add to or replace one or more of the portfolios or portfolio managers at any time without notice to participants. A Simple and Effective Way to Invest The Target Date Funds with dates furthest in the future have the most aggressive asset mix. They start out invested primarily in stocks. Then, as the target date for a fund gets closer, and 34

35 for 15 years after the target retirement date, the asset mix is gradually adjusted to a more conservative asset mix, meaning fewer stocks and more bonds. By the time retirement approaches, your fund will be more focused on protecting your money and producing income. This adjustment happens automatically you don t have to do a thing. A Target Date Fund s asset mix is based on assumptions regarding future asset class returns, expected retirement date, savings rate, life expectancy, and post-retirement income needs. If your circumstances are significantly different from those assumed for the Target Date Fund nearest your expected retirement date, a different Target Date Fund or a Mix & Monitor strategy may be more appropriate for you. Diversification That Changes With Your Needs You ve heard about the importance of diversification and the need to avoid putting all your eggs in one basket. Choosing one of the Target Date Funds allows you to diversify your account among asset classes made up of various investment portfolios managed by different investment management team specialists. This means you ll be less likely to miss out on opportunities in any particular investment category. The fund s objective becomes more conservative as you get closer to retirement. Multiple Investments in a Single Strategy Each of the 12 Target Date Funds begins with a particular asset mix. Here s a hypothetical example of the diversified investment mix for someone who is

36 The chart below shows the asset composition, which will adjust over time based on your age. Benchmarks The benchmarks for the Target Date Funds are customized blends of representative indices for each asset class. The benchmark returns are calculated by weighting the monthly index returns of each asset class by each Target Date Fund s target allocation. The following benchmarks are currently used to represent the Target Date Funds asset classes when calculating the blended benchmark. 36