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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission file number 1-11437
[LOCKHEED MARTIN LOGO]
LOCKHEED MARTIN CORPORATION
(Exact name of registrant as specified in its charter)
_______________
Maryland 52-1893632
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
_______________
6801 Rockledge Drive, Bethesda, Maryland 20817-1877 (301/897-6000)
(Address and telephone number of principal executive offices)
_______________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of Each Class on which registered
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Common Stock, $1 par value New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [_]
Indicate by check mark if the disclosure of delinquent files pursuant to Item
405 or Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [_]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Approximately $17,701,659,740 as of January 31, 1997.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. Common Stock, $1 par value,
192,888,667 shares outstanding as of January 31, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Lockheed Martin Corporation's 1996 Annual Report to Shareholders
are incorporated by reference in Parts I, II and IV of this Form 10-K.
Portions of Lockheed Martin Corporation's 1997 Definitive Proxy Statement are
incorporated by reference in Part III of this Form 10-K.
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PART I
ITEM 1. BUSINESS
GENERAL
Lockheed Martin Corporation ("Lockheed Martin" or the "Corporation") was
incorporated in Maryland on August 29, 1994 to effect the combination (the
"Combination") of the businesses of Martin Marietta Corporation and Lockheed
Corporation. The Combination was consummated on March 15, 1995. Lockheed
Martin is a highly diversified global enterprise principally engaged in the
conception, research, design, development, manufacture and integration of
advanced-technology products and services.
LORAL TRANSACTION
On April 23, 1996, in accordance with the terms of an Agreement and Plan of
Merger (the "Loral Merger Agreement") with Loral Corporation ("Loral"), LAC
Acquisition Corporation ("LAC"), a wholly-owned subsidiary of Lockheed Martin,
purchased approximately 94.5% of the outstanding shares of common stock of Loral
for an aggregate consideration of $38 per share. Immediately thereafter in
accordance with the terms of the Loral Merger Agreement, LAC merged with and
into Loral (the "Loral Merger"). In the Loral Merger, each remaining share of
common stock of Loral not owned by LAC was converted into the right to receive
$38, each outstanding share of common stock of LAC was converted into shares of
common stock of Loral, and Loral changed its name to Lockheed Martin Tactical
Systems, Inc. ("Tactical Systems"). As a result of
these transactions, Tactical Systems became a wholly-owned subsidiary of the
Corporation.
The Loral Merger Agreement contemplated a series of transactions that
resulted in (i) the distribution, to stockholders of Loral immediately prior to
the consummation of the Tender Offer, of shares of capital stock in Loral Space
& Communications, Ltd. ("Loral SpaceCom"), a newly-formed Bermuda company, which
now owns and manages substantially all of Loral's former space and satellite
telecommunications interests, including Loral's direct and indirect interests in
Globalstar, L.P. and Space Systems/Loral, Inc., and certain other assets of
Loral, and (ii) the acquisition by the Corporation of Loral's defense
electronics and systems integration businesses.
In connection with the transactions contemplated by the Loral Merger
Agreement and the related agreements between the Corporation and Loral, the
Corporation acquired shares of preferred stock of Loral SpaceCom that were
convertible into approximately 20% of Loral SpaceCom's common stock on a fully
diluted basis at the time acquired. The Corporation's ownership of the
preferred stock of Loral SpaceCom is subject to certain limitations and
restrictions set forth in the terms and conditions of the preferred stock and in
agreements between the Corporation and Loral SpaceCom.
BUSINESSES
On January 25, 1996, Lockheed Martin entered into an Agreement and Plans of
Merger and Complete Liquidation with certain of its direct and indirect wholly-
owned subsidiaries. As a result, on
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January 28, 1996, each of Lockheed Corporation, Lockheed Missiles and Space
Company, Inc., Lockheed Sanders, Inc., Martin Marietta Corporation and Martin
Marietta Technologies, Inc. were merged with and into Lockheed Martin. In
addition, following the Loral Merger, the Corporation consummated an internal
reorganization of certain of its operating sectors to integrate the Tactical
Systems' businesses acquired from Loral with the pre-existing businesses of the
Corporation.
On January 31, 1997, the Corporation entered into a memorandum of
understanding (the "Memorandum of Understanding") with Lehman Brothers Holdings,
Inc. and a management team led by Frank C. Lanza, Executive Vice President of
Lockheed Martin, and Robert V. LaPenta, Corporate Vice President of Lockheed
Martin, pursuant to which Lockheed Martin agreed to establish Newco Corporation
("Newco") consisting of certain component- and product-oriented businesses of
Lockheed Martin. Under the terms of the Memorandum of Understanding, Lehman
Brothers Capital Partners III, L.P. would own 50.1%, the management team would
own 15% and the Corporation would retain 34.9% of Newco. The closing of the
transaction is subject to a number of conditions, including the execution of a
definitive agreement on terms acceptable to the parties. In conjunction with
the establishment of Newco, the Corporation again reorganized certain of its
operating sectors and now conducts its principal business through five major
operating sectors: Space & Strategic Missiles; Electronics; Information &
Services (which includes the Corporation's interest in Newco); Aeronautics; and
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Energy & Environment. See "Business - Additional Activities and Business
Segment Reporting" on page 10 through page 11.
Space & Strategic Missiles Sector
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The Space & Strategic Missiles Sector's activities include the design,
development, engineering and production of civil, commercial and military space
systems, including: spacecraft, space launch vehicles, manned space systems and
their supporting ground systems and services; telecommunications systems and
services; strategic fleet ballistic missiles; and defensive missiles.
Major programs of the Space & Strategic Missiles Sector include the Titan
family of launch vehicles including the Titan IV expendable launch vehicle, the
Trident II submarine launched fleet ballistic missile, the MILSTAR
communications satellite, the Atlas expendable launch vehicle, the production of
various government and commercial communications and environmental monitoring
satellites, and the THAAD ground-based theater air defense system. During 1996,
the Space & Strategic Missiles Sector assumed responsibility for the
Corporation's manned space systems unit which manufactures the Space Shuttle
external tank. The Space & Strategic Missiles Sector is also engaged in a
substantial amount of classified activities.
In 1996, the U.S. Air Force awarded the Corporation a contract to develop
the next generation missile warning and tracking system called the Space-Based
Infrared System (SBIRS). The purpose of the SBIRS program is to provide early
detection of a ballistic missile
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attack world-wide. On December 20, 1996, Lockheed Martin was picked by the U.S.
Air Force as one of two contractors that will proceed with producing designs for
the Evolved Expendable Launch Vehicle (EELV). The Air Force envisions that the
EELV will replace existing Delta, Atlas and Titan space launch vehicles for use
in launching government and commercial payloads.
Net sales by the Sector represented approximately 29.4% of the
Corporation's consolidated net sales in 1996. Net sales to the United States
Government, excluding Foreign Military Sales, represented approximately 81% of
the Sector's net sales in 1996.
Electronics Sector
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The Electronics Sector's activities primarily relate to the design,
development, engineering and production of high performance electronic systems
for undersea, shipboard, land-based, airborne-and space-based applications.
Major business elements include: Naval Systems; Missiles and Air Defense;
Aerospace Systems & Electronics; and Commercial, Civil and Adjacent. The Naval
Systems element serves the global market with major lines of business in surface
ship and submarine combat systems, missile launching, anti-submarine warfare,
and navigation systems. The Missiles and Air Defense element produces anti-
armor missiles; indirect fire support weapons systems; smart munitions; and air
defense systems. The Aerospace Systems and Electronics element includes system
integration capabilities for both fixed wing and rotary wing aircraft; and major
lines of electronics subsystems such as: aircraft controls systems; electronic
warfare; electro-optic and
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night vision; radar; display; and computers for the military and commercial
aerospace market. The Commercial, Civil, and Adjacent element lines of business
include positions in growing niche markets such as telecommunications;
commercial satellite electronics; mail handling automation systems;
transportation; and electronics fabrication.
The Corporation is the prime contractor for the U.S. Navy's AEGIS fleet air
defense system, including the Vertical Launch System, and the U.S. Air Force's
and Navy's LANTIRN targeting and navigation system, and for the development and
production of EH-101 Merlin helicopters for the United Kingdom's Ministry of
Defence. In addition, the Sector manufacturers and installs bar code readers
and sorters for the U.S. Postal Service, produces the Target Acquisition
Designation Sight/Pilot Night Vision Sensor (TADS/PNVS) and test hardware for
the U.S. Army's PATRIOT Advanced Capability (PAC-3) missile. In 1997, the
Sector anticipates that an increased percentage of its revenues will be derived
from sales of the Multiple Launch Rocket System, the U.S. Army's general support
fire power system.
In 1996, the Corporation was chosen as one of two competitors for the first
phase of the military's Joint Air-to-Surface Standoff Missile (JASSM)
development program. JASSM is a conventional standoff weapon that the U.S. Air
Force and U.S. Navy envision replacing the Tri Service Standoff Attack Missile.
In addition, the Electronics Sector was recently awarded contracts for the
development of the combat system for the U.S. Navy's new attack submarine; the
production of the SQQ-89 surface ship Antisubmarine Warfare Combat System;
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and the production of Tray Management Systems for the U.S. Postal Service.
Effective January 1, 1997, the Corporation completed the divestiture of the
assets of its Armament Systems and Defense Systems businesses to General
Dynamics Corporation.
Net sales by the Electronics Sector, including sales by Armament Systems
and Defense Systems, represented approximately 24.9% of the Corporation's
consolidated net sales in 1996. Net sales to the United States Government,
excluding Foreign Military Sales, represented approximately 66.7% of the
Sector's net sales in 1996.
Information & Services Sector
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The Information & Services Sector is involved in the development,
integration and operation of large, complex information systems; engineering,
technical and management services for federal customers; transaction processing
systems and services for state and local government agencies; commercial
information technology outsourcing; manufacture and distribution of computer
peripherals, graphics engines and intranet software; and the provision of
internal information technology support to the Corporation.
In 1996, NASA awarded the Space Flight Operations Contract to United Space
Alliance (USA), a limited liability company owned by Lockheed Martin and The
Boeing Company, making USA the single prime contractor for Space Shuttle
operations. Through USA, the Sector performs processing services for NASA's
space shuttle program. Through its Services Group, the Information & Services
Sector provides a wide array of science and engineering, information
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management, operation and maintenance, logistics, assembly and test and
installation services to governmental agencies and prime contractors. The
Sector produces the Consolidated Automated Support System (CASS), including the
U.S. Navy's AN/USM-636 CASS, a comprehensive test platform that provides general
purpose analog and digital test capabilities. The Corporation's Access Graphics
and certain other businesses, together with CalComp Technology, Inc. (NASDAQ:
CLCP), a majority-owned affiliate of Lockheed Martin, are involved in commercial
markets for computer graphics, hardware distribution and data storage devices.
The Sector is upgrading the U.S. National Air Traffic Control System through
replacement of display systems at 20 FAA Control Centers and development of an
advanced tower management system. Similar work is under way in the United
Kingdom. In addition, the Sector performs a substantial amount of classified
work.
In 1996, Lockheed Martin and Intel signed an agreement to jointly develop a
new chip that will give desktop computer users real-time, three-dimensional
color graphics. The chips are based on Lockheed Martin military training and
simulation technology.
Net sales by the Information & Services Sector represented approximately
21.8% of Lockheed Martin's consolidated net sales in 1996. Net sales to the
United States Government, excluding Foreign Military Sales, represented
approximately 65.8% of the Sector's net sales in 1996.
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Aeronautics Sector
- ------------------
The Aeronautics Sector is involved in the design, development, engineering
and production of fighter, bomber, special mission, airlift, antisubmarine
warfare, reconnaissance, surveillance and high performance aircraft; systems for
military operations; aircraft controls and subsystems; thrust reversers; and
aircraft modification and maintenance and logistics support for military and
civilian customers.
The Corporation is the prime contractor on the F-16 "Fighting Falcon"
fighter aircraft, leads the team responsible for the Air Force's F-22 air
superiority fighter program and provides the C-130 series airlift aircraft. In
the commercial aircraft business the Sector manufactures thrust reversers for
commercial jet engines. The Corporation is also involved in upgrading aircraft,
including the U-2 and SR-71 reconnaissance aircraft, the F-117 fighter bomber
and earlier model C-130s. Through the Skunk Works, the Aeronautics Sector
performs a substantial amount of classified work.
On July 2, 1996, the Corporation entered into a cooperative agreement with
NASA to build and demonstrate the prototype X-33 single-stage-to-orbit reusable
launch vehicle, the next generation of space shuttle. NASA's funding and the
industry team investment provide approximately $1.0 billion for the X-33 project
through 1999. On November 16, 1996, the Corporation was selected as one of two
defense contractors to proceed to the concept demonstration phase of the
government's Joint Strike Fighter (JSF) Program. Contract tasks include the
design, development, construction and flight test of this full-scale
demonstration aircraft.
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Net sales by the Aeronautics Sector represented approximately 20.8% of the
Corporation's consolidated net sales in 1996. Net sales to the United States
Government, excluding Foreign Military Sales, represented approximately 68.4% of
the Sector's net sales in 1996.
Energy & Environment Sector
- ---------------------------
The Energy & Environment Sector is responsible for the Corporation's energy
and environmental remediation businesses, including the management of various
U.S. Department of Energy (DoE) activities. The Corporation is the largest
management and operations contractor within the DoE's system of laboratories and
other facilities and manages, among other facilities, the Sandia National
Laboratories, the Idaho National Engineering and Environmental Laboratory and
the Oak Ridge National Laboratory.
Net sales by the Sector represented less than 1% of the Corporation's
consolidated net sales in 1996. Net sales to the United States Government
represented approximately 85.1% of the Sector's net sales in 1996.
Additional Activities and Business Segment Reporting
- ----------------------------------------------------
In addition to the above activities, Lockheed Martin has real estate
subsidiaries in Florida and Maryland, runs research laboratories and carries on
other miscellaneous activities.
In 1996, the Corporation completed its divestiture of Martin Marietta
Materials, Inc. ("Materials") in an exchange offer (the "Exchange Offer")
pursuant to which Lockheed Martin exchanged
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37,350,000 shares of Materials common stock for 7,913,136 shares of Lockheed
Martin common stock.
For business segment reporting in the Corporation's consolidated financial
statements, the Space & Strategic Missiles, Electronics, Information & Services
and Aeronautics Sectors each comprise reportable business segments. The Energy
& Environment Sector, together with the additional activities described in the
preceding paragraphs, are reported as Energy, Materials and Other and represents
the balance of the Corporation's revenues.
The Corporation's principal executive offices are located at 6801 Rockledge
Drive, Bethesda, Maryland 20817. The telephone number of the Corporation is
(301) 897-6000.
COMPETITION AND RISK
Lockheed Martin's sales to the U.S. Government, excluding Foreign Military
Sales, amounted to approximately 69.6% of net sales for the year ended December
31, 1996. Approximately 12.3% of net sales for fiscal year 1996 were sales to
foreign governments and approximately 18.0% of net sales were to commercial
customers of which 5.4% were international customers.
Lockheed Martin encounters extensive competition in all of its lines of
business with numerous other contractors on the basis of price, technical and
managerial capability. The on-going consolidation of the United States defense
industry has intensified this competition as competitors are now generally
larger and more capable. At the same time, the number of contracts awarded has
decreased. In some instances, for example, the ongoing competition
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for the Joint Strike Fighter and the Evolved Expendable Launch Vehicle, winning
the competition may be a significant determinant of whether the competitors are
able to remain in that line of business. More generally, the aerospace and
defense business involves rapidly advancing technologies and is subject to many
uncertainties including, but not limited to, those resulting from changes in
federal budget priorities, particularly the size and scope of the defense
budget, and dependence on Congressional appropriations. Substantial efforts are
undertaken continually on a long-term basis in order to maintain existing levels
of business.
Approximately 70% of the 1996 sales of the Corporation were made to the
United States Government, either as a prime contractor or as a subcontractor,
for which there is intense competition. Accordingly, a significant portion of
the Corporation's sales are subject to inherent risks, including uncertainty of
economic conditions, changes in government policies and requirements that may
reflect rapidly changing military and political developments and the
availability of funds. Other characteristics of the industry are complexity of
designs, the difficulty of forecasting costs and schedules when bidding on
developmental and highly sophisticated technical work and the rapidity with
which product lines become obsolete due to technological advances and other
factors characteristic of the industry. Due to the intense competition for
available government business, the maintenance and/or expansion of government
business increasingly requires the Corporation to generate working capital and
invest in fixed assets.
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Certain risks inherent in the current defense and aerospace business
environment are discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on page 51 through page 63 of the
Corporation's 1996 Annual Report to Shareholders (the "1996 Annual Report").
Earnings may vary materially depending upon the types of long-term
government contracts undertaken, the costs incurred in their performance, the
achievement of other performance objectives and the stage of performance at
which the right to receive fees, particularly under incentive and award fee
contracts, is finally determined.
The Corporation's international business involves additional risks, such as
exposure to currency fluctuations, offset obligations and changes in foreign
economic and political environments. In addition, international transactions
frequently involve increased financial and legal risks arising from stringent
contractual terms and conditions and widely differing legal systems, customs and
mores in foreign countries. The Corporation expects that international sales as
a percentage of the overall sales of the Corporation will continue to increase
in future years as a result of, among other things, the continuing changes in
the United States defense industry.
A portion of Lockheed Martin's business includes classified programs that
cannot be specifically discussed, the operating results of which are included in
the Corporation's consolidated financial statements. The nature of and business
risks associated
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with classified programs do not differ materially from those of the
Corporation's other government programs and products.
PATENTS
The Corporation owns numerous patents and patent applications, some of
which, together with licenses under patents owned by others, are utilized in its
operations. While such patents and licenses are, in the aggregate, important to
the operation of the Corporation's business, no existing patent, license or
other similar intellectual property right is of such importance that its loss or
termination would, in the opinion of management, materially affect the
Corporation's business.
RAW MATERIALS AND SEASONALITY
The Corporation has not experienced significant difficulties in its ability
to obtain raw materials and other supplies needed in its manufacturing
processes, nor does the Corporation expect such difficulties to arise in the
future. No material portion of the business of the Corporation is considered to
be seasonal.
GOVERNMENT CONTRACTS AND REGULATIONS
All government contracts and, in general, subcontracts thereunder are
subject to termination in whole or in part at the convenience of the United
States Government as well as for default. Long-term government contracts and
related orders are subject to cancellation if appropriations for subsequent
performance periods become unavailable. Lockheed Martin generally would be
entitled to
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receive payment for work completed and allowable termination or cancellation
costs if any of its government contracts were to be terminated for convenience.
Upon termination for convenience of cost-reimbursement-type contracts, the
contractor is normally entitled, to the extent of available funding, to
reimbursement of allowable costs plus a portion of the fee related to work
accomplished. Upon termination for convenience of fixed-price-type contracts,
the contractor is normally entitled, to the extent of available funding, to
receive the purchase price for delivered items, reimbursement for allowable
costs for work in process, and an allowance for profit thereon or adjustment for
loss if completion of performance would have resulted in a loss.
In addition to the right of the United States Government to terminate,
government contracts are conditioned upon the continuing availability of
Congressional appropriations. Congress usually appropriates funds on a fiscal-
year basis even though contract performance may extend over many years.
Consequently, at the outset of a program, the contract is usually partially
funded, and additional funds are normally only appropriated to the contract by
Congress in future years.
BACKLOG
Lockheed Martin's total negotiated backlog at December 31, 1996, was
approximately $50.4 billion compared with approximately $41.1 billion at the
end of 1995. The total negotiated backlog of the Sectors at December 31, 1996
was as follows: Space & Strategic Missiles $19.5 billion, Electronics $10.9
billion, Information &
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Services, $6.4 billion and Aeronautics $13.4 billion. Unlike the other Sectors,
the Energy & Environment Sector is not a reportable business segment. The
reportable business segment of which Energy & Environment is part, Energy,
Materials and Other, had total negotiated backlog at December 31, 1996 of
approximately $167 million. Of this figure, almost all was attributable to the
Energy & Environment Sector. These figures are all approximate and include both
unfilled firm orders for the Corporation's products for which funding has been
both authorized and appropriated by the customer (Congress, in the case of
United States Government agencies) and firm orders for which funding has not
been appropriated.
Backlog information and comparisons thereof as of different dates may not
be accurate indicators of future sales or the ratio of Lockheed Martin's future
sales to the United States Government versus its sales to other customers.
Of the Corporation's total 1996 year-end backlog, approximately $32
billion, or 63%, is not expected to be filled within one year.
ENVIRONMENTAL REGULATION
Lockheed Martin's operations are subject to and affected by a variety of
federal, state, and local environmental protection laws and regulations. The
Corporation is involved in environmental responses at certain of its facilities
and at certain waste disposal sites not currently owned by the Corporation
(third-party sites) where the Corporation has been designated a "Potentially
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Responsible Party" (PRP) by the U.S. Environmental Protection Agency (EPA) or by
a state agency. At such third-party sites, the EPA or a state agency has
identified the site as requiring removal or remedial action under the federal
"Superfund" and other related federal or state laws governing the remediation of
hazardous materials. Generally, PRPs that are ultimately determined to be
"responsible parties" are strictly liable for site clean-ups and usually agree
among themselves to share, on an allocated basis, in the costs and expenses for
investigation and remediation of the hazardous materials. Under existing
environmental laws, however, responsible parties are jointly and severally
liable and, therefore, the Corporation is potentially liable for the full cost
of funding such remediation. In the unlikely event that the Corporation were
required to fund the entire cost of such remediation, the statutory framework
provides that the Corporation may pursue rights of contribution from the other
PRPs.
At third-party sites, the Corporation continues to pursue a course of
action designed to minimize and mitigate its potential liability through
assessing the legal basis for its involvement, including an analysis of such
factors as (i) the amount and nature of materials disposed of by the
Corporation, (ii) the allocation process, if any, used to assign all costs to
all involved parties, and (iii) the scope of the response action that is or may
reasonably be required. The Corporation also continues to pursue active
participation in steering committees, consent orders and other appropriate and
available avenues. Management believes that
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this approach should minimize the Corporation's proportionate share of liability
at third-party sites where other PRPs share liability.
Although the Corporation's involvement and extent of responsibility varies
at each site, management, after an assessment of each site and consultation with
environmental experts and counsel, has concluded that the probability is remote
that the Corporation's actual or potential liability as a PRP in each or all of
these sites, in combination with the Corporation's actual or potential liability
for environmental responses at its own facilities, will have a material adverse
effect on the Corporation's consolidated financial position or results of
operations. While the possibility of insurance coverage is considered in the
Corporation's efforts to minimize and mitigate its potential liability, this
possibility is not taken into account in management's assessment of whether it
is likely that its actual or potential liability will have a material adverse
effect on the Corporation's consolidated financial position.
In addition, Lockheed Martin manages various government-owned facilities on
behalf of the government. At such facilities, environmental compliance and
remediation costs have historically been the responsibility of the government
and the Corporation relied (and continues to rely with respect to past
practices) upon government funding to pay such costs. While the government
remains responsible for capital costs associated with environmental compliance,
responsibility for fines and penalties associated with environmental
noncompliance, in certain instances, is being shifted from the government to the
contractor with such fines and penalties
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no longer constituting allowable costs under the contracts pursuant to which
such facilities are managed.
Management does not believe that adherence to presently applicable
environmental regulations at its own facilities or in its contract management
capacity at government-owned facilities will have a material adverse effect on
Lockheed Martin's consolidated financial position or results of operations. For
additional details, see "Legal Proceedings" on page 25 through page 30. See
also "Note 14 -- Commitments and Contingencies" of the "Notes to Consolidated
Financial Statements" on page 80 through page 81 and "Management's Discussion
and Analysis of Financial Condition and Results of Operations, Environmental
Matters" on page 62 through page 63 of the 1996 Annual Report.
RESEARCH AND DEVELOPMENT
Lockheed Martin conducts significant research and development activities,
both under contract funding and with Independent Research and Development (IR&D)
funds. Lockheed Martin expended approximately $1,042 million in 1996,
$778 million in 1995 and $813 million in 1994 using IR&D and bid and proposal
funds, a substantial portion of which was included in overhead allocable to
United States Government contracts.
During fiscal year 1996, the Corporation did not undertake the development
of a new product or line of business requiring the investment of a material
amount of the Corporation's total assets.
See "Research and Development and Similar Costs" in "Note 1--Summary of
Significant Accounting Policies" of the "Notes to
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Consolidated Financial Statements" on page 71 of the 1996 Annual Report.
EMPLOYEES
As of December 31, 1996, Lockheed Martin had approximately 190,000
employees, the majority of whom were located in the United States. The
Corporation has a continuing need for many skilled and professional personnel in
order to meet contract schedules and obtain new and ongoing orders for its
products. Approximately 33,300 of Lockheed Martin's employees are covered by
125 separate collective bargaining agreements with various international and
local unions. Management considers employee relations generally to be good and
believes that the probability is remote that renegotiating these contracts will
have a material adverse effect on its business.
FORWARD LOOKING STATEMENTS - SAFE HARBOR PROVISIONS
This Annual Report on Form 10-K contains statements which, to the extent
that they are not recitations of historical fact, constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities Exchange Act of
1934 (the "Exchange Act"). All forward looking statements involve risks and
uncertainties. The forward looking statements in this document are intended to
be subject to the safe harbor protection provided by Sections 27A of the
Securities Act and 21E of the Exchange Act. For a discussion identifying some
important factors
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that could cause actual results to vary materially from those anticipated in the
forward looking statements, see the Corporation's Securities and Exchange
Commission filings, including but not limited to, the discussion of "Competition
and Risk" and the discussion of "Government Contracts and Regulations" on pages
11 through 14 and 14 through 15, respectively, of this Annual Report on Form 10-
K and "Management's Discussion and Analysis of Financial Condition and Results
of Operations" on pages 51 through 63 of the 1996 Annual Report and "Note 1 -
Summary of Significant Accounting Policies", "Note 3 - Repositioning of Non-Core
Businesses and New Organizational Structure" and "Note 14 - Commitments and
Contingencies" of the Notes to Consolidated Financial Statements on pages 70
through 71, pages 72 through 73 and 80 through 81, respectively, of the Audited
Consolidated Financial Statements included in the 1996 Annual Report and
incorporated by reference into this Annual Report on form 10-K.
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ITEM 2. PROPERTIES
At December 31, 1996, including properties to be utilized by Newco, the
Corporation operated in approximately 460 offices, facilities, manufacturing
plants, warehouses, service centers, and laboratories throughout the United
States and internationally. Of these, the Corporation owned floor space at
approximately 77 locations aggregating approximately 46.8 million square feet.
The Corporation leased space at approximately 383 of its locations aggregating
approximately 26.9 million square feet. Additionally, the Corporation manages
and/or occupies various government-owned facilities at Marshall Space Flight
Center in Alabama; Livermore, Palmdale, San Diego, Santa Cruz, Sunnyvale and
Vandenberg Air Force Base in California; Cape Canaveral Air Force Station and
Kennedy Space Center in Florida; Marietta, Georgia; Kauai, Hawaii; Idaho Falls
and Scoville, Idaho; the United States Enrichment facilities at Paducah,
Kentucky and Piketon, Ohio; the NASA Michoud Assembly Facility near New Orleans,
Louisiana; Stennis Space Center in Mississippi; Las Vegas, Nevada; Sandia
National Laboratories in New Mexico; Johnson City and Knolls Atomic Power
Laboratory at Niskayuna, New York; the Department of Energy facility at Oak
Ridge, Tennessee; Houston and Ft. Worth, Texas, among others. The United States
Government also furnishes certain equipment and property used by the
Corporation.
The Corporation owns a corporate office building located in Bethesda,
Maryland in fee simple, and leases corporate office facilities at Westlake
Village, California, Bethesda, Maryland, and Arlington (Crystal City), Virginia.
In addition, the Corporation
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owns and leases major office and manufacturing facilities for various sectors at
the following locations, and with approximately the indicated square footage:
SQUARE FOOTAGE (M)
------------------
SECTOR LOCATION OWNED LEASED
- ------ -------- ----- ------
Space & Strategic Sunnyvale and Palo
Missiles Alto, CA 6.5 .7
Waterton and
Littleton, CO 4.0
East Windsor, NJ .7
King of Prussia, PA .9
Electronics Camden, AK 1.5
Orlando, FL 2.2
Eagen, MI .6
Nashua, NH 2.5
Moorestown, NJ .9 .2
Great Neck, NY 1.4
Syracuse, NY 1.5
Owego, NY 1.5
Akron, OH 2.6
Grand Prarie, TX 2.0
Manassas, VA 1.4
Information & Goodyear, AZ 1.0
Services San Jose, CA .5
Orlando, FL 1.0
Gaithersburg, MD .5
Camden, NJ .6
King of Prussia, PA .5 .6
Salt Lake City, UT .5
Reston, VA .8
Aeronautics Ontario, CA .9
Palmdale, CA 2.2
Marietta, GA 1.9
Middle River, MD 1.7
Greenville, SC .7
Ft. Worth, TX .2 .2
The above information excludes facilities associated with the former
Defense Systems and Armament Systems business units located in Pittsfield,
Massachusetts and Burlington, Vermont which were divested effective as of
January 1, 1997.
- 23 -
Finally, the Corporation owns various large tracts of land which are
available for sale or development. The location and approximate size of these
large tracts include:
LOCATION ACREAGE
-------- -------
1. Potrero Creek, CA 9,100
2. Beaumont Gateway, CA 2,800
3. Meridian Test Range, TX 2,784
4. Orlando, FL 2,000
5. Littleton, CO (Deer Creek) 1,000
6. Palmdale Trust, CA 650
7. Austin, TX 600
A significant portion of the Corporation's activity is related to
engineering and research and development, which is not susceptible to productive
capacity analysis. In the area of manufacturing, most of the operations are of
a job-order nature, rather than an assembly line process, and productive
equipment has multiple uses for multiple products.
Management believes that all of the Corporation's major physical facilities
are in good condition and are adequate for their intended use.
- 24 -
ITEM 3. LEGAL PROCEEDINGS
The Corporation is primarily engaged in providing products and services
under contracts with the United States Government and, to a lesser degree, under
direct foreign sales contracts, some of which are funded by the United States
Government. All such contracts are subject to extensive legal and regulatory
requirements and, from time to time, agencies of the United States Government
investigate whether the Corporation's operations are being conducted in
accordance with these requirements. Such investigations could result in
administrative, civil or criminal liabilities, including repayments, fines or
penalties being imposed upon the Corporation, or could lead to suspension or
debarment from future government contracting. The Corporation is also a party
to or has its property subject to various other litigation and proceedings,
including matters arising under provisions relating to the protection of the
environment (collectively, "proceedings").
On June 7, 1990, Boggs, et al. v. Divested Atomic Energy Corporation, et
al., was filed against various defendants including Martin Marietta Energy
Systems ("MMES"). Plaintiffs' request for class certification was granted and
the case is pending in the United States District Court for the Eastern District
of Ohio. Plaintiffs seek $600 million based upon allegations that the
defendants discharged hazardous substances into the environment. In the event
that any damages are awarded in these proceedings, such damages will be
allowable costs under contracts between MMES and the Department of Energy.
- 25 -
The Corporation's property in Burbank, California (a former aircraft
manufacturing facility) is the subject of a 1991 consent decree with the U.S.
Environmental Protection Agency ("EPA") which obligates the Corporation to
design and construct facilities to monitor, extract and treat groundwater. As is
common practice, at the time the Consent Decree was lodged, the EPA filed a suit
with the United States District Court for the Central District of California in
order to provide that Court with jurisdiction over the Consent Decree. The
Corporation intends to file an Answer and Counterclaim in March, 1997 in the
EPA's suit asserting indemnity/contribution claims against the government based
upon the government's ownership and operation of the former aircraft
manufacturing facility. The same facility is subject to a cleanup and abatement
order from the California Regional Water Quality Board which requires site
assessment and action to abate groundwater contamination through a combination
of groundwater and soil cleanup and treatment. (See "Note 14 -Commitments and
Contingencies" of the "Notes to Consolidated Financial Statements" on page 80
through page 81 of the 1996 Annual Report). On August 1, 1996, the Corporation
consummated a settlement with a group of 1,350 residents living in the vicinity
of the facility. The settlement, valued at approximately $67 million, resolved,
without litigation, claims of personal injury and property damage asserted by
the residents and alleged to be related to environmental contamination stemming
from historical operations of the former facility. The Corporation settled the
matter for business reasons after a lengthy mediation, without any admission of
liability, notwithstanding its continuing position that the
- 26 -
facility does not and has not posed a risk to the community. As the result of
publicity surrounding the settlement, the Corporation has been named in two
purported federal class action suits and a series of state actions on behalf of
over 800 individual residents and former residents of Burbank alleging similar
claims of personal injury, property damage and fear of future illnesses. All of
these matters have been removed to federal court in Los Angeles and have been
proposed to be coordinated under the caption In re Burbank Environmental
Litigation. The Corporation believes that it has strong defenses to these claims
which it is preparing to assert. As with its remediation activities relating to
environmental matters, the Corporation has tendered these matters to its
insurance carriers who have provided a defense but are contesting coverage.
Following the filing of the lawsuits against the Corporation in connection
with its former Burbank facilities (In re Burbank Environmental Litigation),
lawyers from Los Angeles have filed a similar action against the Company in
connection with the Corporation's former operations in Redlands, California
(Carrillo v. LMC). More lawsuits are expected in the Redlands area, but the
Corporation believes the allegations of these actions to be without merit.
As the result of the consummation of the Loral Transaction, subject to
certain limited exceptions, the Corporation became responsible for liabilities
arising out of legal and environmental proceedings pertaining to the Loral
Corporation businesses acquired by the Corporation. On July 7, 1995, Loral
Corporation was served
- 27 -
with a subpoena issued by the United States District Court for the Eastern
District of New York seeking documents relating to a number of programs
conducted at Loral Corporation's Defense Systems-East (Great Neck, New York)
operations. These operations now form a part of the Corporation's Electronics
Sector. The Corporation has been provided minimal information concerning the
focus of the investigation, but it appears to arise from anonymous complaints
provided to the United States Government by employees about testing and quality
control matters. The Corporation is unaware of any such issues and is
cooperating in the government's continuing investigation of this matter.
By letter dated September 21, 1995, the Corporation informed the Department
of Defense Inspector General's Office ("DoD IG") that the Corporation had become
aware of certain potential accounting issues which the Corporation was
investigating with respect to the LANTIRN program. On February 12, 1996, the
Corporation was served with a DoD IG subpoena seeking documents related to the
price proposal submitted in connection with a LANTIRN program contract awarded
in 1994. On July 16, 1996, two qui tam complaints against the Corporation were
unsealed in the United States District Court for the Middle District of Florida
at Orlando. The complaints allege various cost accounting issues on LANTIRN
program contracts and seek damages in the amount of $140 million. The
government has not yet made a decision as to whether to intervene in the lawsuit
and its investigation is continuing.
On January 23, 1996, a DoD IG subpoena was served on Lockheed Martin
Electronics & Missiles seeking documents relating to the
- 28 -
software development portion of the Paperless LANTIRN Automated Depot ("PLAD")
contract. It is believed that the government is investigating allegations that
the Corporation's proposal for the PLAD contract was defectively priced.
On January 23, 1996, Lockheed Martin Electronics & Missiles was served with
a grand jury subpoena issued by the United States District Court for the Middle
District of Florida at Jacksonville seeking documents related to the manufacture
and testing of two circuit card assemblies used in the production of the
Hellfire I missile for the U.S. Army. On July 24, 1996, a second grand jury
subpoena was served on the Corporation related to the same subject matter and
the government's investigation of this matter is continuing.
On June 25, 1996, Lockheed Martin Engineering & Science Services was served
with a grand jury subpoena issued by the United States District Court for the
Southern District of Texas seeking documents related to two former employees of
a predecessor company, Lockheed Engineering & Sciences Company (LESC), and
apparently pertaining to an investigation of cost accounting issues in
connection with NASA service and support contracts. On August 13, 1996, the
Corporation was advised that the government's investigation of this matter is
expected to continue.
On November 27, 1996, Lockheed Martin Tactical Defense Systems - Great Neck
was served with a grand jury subpoena issued by the United States District Court
for the Eastern District of New York seeking documents related to tax and
financial reporting issues and
- 29 -
the outsourcing of quality tasks contained in various contract proposals. The
Corporation expects this investigation to continue.
On January 23, 1997, Lockheed Martin Electro-Optical Systems was served
with a grand jury subpoena issued by the United States District Court for the
Central District of Los Angeles seeking documents relating to the accounting
treatment of contract payments received from the government. The Corporation
expects this investigation to continue.
On February 6, 1997, three former employees of the Corporation were served
with subpoenas ad testificandum issued by a federal grand jury in Jackson,
Tennessee. The individuals were employees of the Corporation's Armament Systems
business which was sold to General Dynamics Corporation effective January 1,
1997. Under the terms of the agreement with General Dynamics, the Corporation
retained responsibility for investigations of this type. The Corporation
expects this investigation to continue.
The Corporation is involved in various other legal and environmental
proceedings arising in the ordinary course of its business, but in the opinion
of management and counsel the probability is remote that the outcome of any such
litigation or proceedings, whether specifically described above or referred to
generally in this paragraph, will have a material adverse effect on the results
of the Corporation's operations or its financial position.
- 30 -
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of 1996.
ITEM 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Lockheed Martin Corporation are listed below.
There were no family relationships among any of the executive officers and
directors of the Corporation. All officers serve at the pleasure of the Board
of Directors.
POSITIONS AND
OFFICES HELD WITH PRINCIPAL OCCUPATION AND
NAME CORPORATION BUSINESS EXPERIENCE
(AGE AT 12/31/96) (YEAR ELECTED) (PAST FIVE YEARS)
- --------------------- ------------------- -----------------------------------------
Norman R. Augustine Chairman of the Chairman of the Board of Lockheed Martin
(61) Board and Chief Corporation since January 1997 and Chief
Executive Executive Officer of Lockheed Martin
Officer; Director Corporation since January 1, 1996.
(1995) President of Lockheed Martin from March
1995 to December 1995. Chairman of the
Board of Martin Marietta from 1988 to
1995 and Chief Executive Officer from
1987 to 1995.
Marcus C. Bennett Executive Vice Executive Vice President of Lockheed
(60) President and Martin since July 1996; Senior Vice
Chief Financial President and Chief Financial Officer of
Officer; Director Lockheed Martin Corporation from March
(1995) 1995 to July 1996. Vice President and
Chief Financial Officer of Martin
Marietta from 1988 to 1995.
Vance D. Coffman President and Director since January 1996; President
(52) Chief Operating since June 1996; Chief Operating Officer
Officer; Director since January 1996; Executive Vice
(1996) President from January to June 1996;
President and Chief Operating Officer,
Space & Strategic Missiles Sector from
March 1995 to December 1995; previously
served in Lockheed Corporation as
Executive Vice President, from 1992 to
1995; and President of Lockheed Space
Systems Division from 1988 to 1992.
- 31 -
James A. Blackwell, Sector President President and Chief Operating Officer,
Jr. (56) and Chief Aeronautics Sector since March 1995;
Operating Officer previously served in Lockheed
- Aeronautics Corporation as Vice President and
President from April 1993 to March 1995,
Lockheed Aeronautical Systems Company;
served as an executive employee of
Lockheed Aeronautical Systems Company
from 1986 until March 1995.
Melvin R. Brashears Sector President President and Chief Operating Officer
(51) and Chief Space & Strategic Missiles Sector, since
Operating Officer January 1996; Deputy, Space & Strategic
- Space & Missiles Sector from November 1995 to
Strategic December 1995; Executive Vice President
Missiles of Lockheed Missiles & Space Company,
Inc. from March 1995 - November 1995 and
President of Lockheed Commercial Space
Company; previously served in Lockheed
Corporation as Vice President and
Assistant General Manager, Space Systems
Division, Lockheed Missiles & Space
Company, Inc., from 1992 to 1995;
Director of Advanced Space Programs,
from 1991 to 1992.
Raymond S. Colladay President, President, Astronautics since February
(53) Astronautics 1997; previously Vice President Business
Development & Advanced Programs of
Martin Marietta and the
Corporation, respectively, from May
1993 to February 1997; Vice
President Strategic Defense Systems
of Martin Marietta from December 1990 to May 1993 .
Thomas A. Corcoran Sector President President and Chief Operating Officer,
(52) and Chief Electronics Sector since March 1995;
Operating Officer previously served in Martin Marietta
- Electronics Corporation as President, Electronics
Group, from April 1993 to March
1995; previously served at General
Electric Corporation as Vice
President and General Manager, from
1990 to 1993.
Dain M. Hancock President, President, Tactical Aircraft Systems
(55) Tactical Aircraft since March 1995; previously served in
Systems Lockheed Corporation as Vice President
from 1993 to March 1995; and Vice
President and F-16 Program Director,
Lockheed Fort Worth Company, from 1993
to March 1995. From 1966 until 1993 he
was an employee of General Dynamics
Corporation.
- 32 -
K. Michael Henshaw President, President, Lockheed Martin Missiles &
(50) Missiles & Space Space since October 1996; Executive Vice
President, Lockheed Martin Missiles &
Space from July to October, 1996; Vice
President, Civil Space and Vice
President Business Development, Advanced
Programs & Technology of Lockheed Martin
Missiles & Space from January to July,
1996; Vice President, Lockheed Martin
Earth Observation & Space Science
Systems from August 1995 to January
1996; Vice President, Lockheed Martin
Earth Remote Sensing Programs from July
1994 to August 1995; Group Vice
President of Martin Marietta Corporation
from May 1993 to July 1994; Group Vice
President of Martin Marietta Advanced
Programs & Business Development from
April 1991 to May 1993.
John R. Kreik (52) President, President, Sanders; previously served in
Sanders Lockheed Corporation as President,
Lockheed Sanders, Inc. from 1990 to 1995.
Frank C. Lanza (65) Executive Vice Executive Vice President of Lockheed
President; Martin Corporation since April 1996 and
Director President and Chief Operating Officer of
the Corporation's C/3/I and Systems
Integration Sector from April 1996 to
February 1997; President and Chief
Operating Officer of Loral Corporation
from 1981 until its combination with
Lockheed Martin in April 1996; member
of the Board of the American Defense
Preparedness Association and Vice
Chairman of the General Partners
Committee of Globalstar Limited
Partnership.
John S. McLellan President, President, Aeronautical Systems since
(55) Aeronautical March 1995; previously served in
Systems Lockheed Corporation as Vice President
and Executive Vice President, Lockheed
Aeronautical Systems Company from March
1994 to March 1995; served as President,
Lockheed Aircraft Service Company-
Ontario from February 1992 to March
1994 and served as its Executive Vice
President from April 1989 to February 1992.
- 33 -
Frank H. Menaker, Senior Vice Senior Vice President since July 1996;
Jr. (56) President and Vice President and General Counsel for
General Counsel Lockheed Martin Corporation March 1995
to July 1996, after having served in the
same capacity for Martin Marietta
Corporation since 1981.
Albert Narath (63) Sector President President and Chief Operating Officer,
and Chief Energy & Environment Sector, Lockheed
Operating Officer Martin Corporation from August 15, 1995
- Energy & to present; President, Sandia
Environment Corporation from April 1989 to August
14, 1995.
Robert E. Rulon Vice President Vice President and Controller since
(53) and Controller March 1995; previously served in
Lockheed Corporation as Vice President
and Controller from 1992 to 1995;
served as Vice President, Internal
Audit from 1990 to 1992.
Walter E. Vice President Vice President and Treasurer since March
Skowronski (48) and Treasurer 1995; previously served in Lockheed
Corporation as Vice President and
Treasurer from 1992 to 1995; served as
staff Vice President, Investor Relations
from 1990 to 1992.
Peter B. Teets (54) Sector President President and Chief Operating Officer,
and Chief Information & Services Sector since
Operating Officer March 1995; previously served in Martin
- Information & Marietta Corporation as Corporate Vice
Services President (since 1985) and President,
Space Group, from 1993 to 1995; served as
President, Astronautics Group from 1987
to 1993.
- 34 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
There were approximately 42,609 holders of record of Lockheed Martin
Corporation Common Stock, $1 par value, as of December 31, 1996. The
Corporation's Common Stock is traded on the New York Stock Exchange, Inc.
Information concerning stock prices and dividends paid during the past two years
is as follows:
Common Dividends Paid and Market Prices/*/
------------------------------------------
Market Price
Quarter Dividends Paid High/Low High/Low
------- -------------- -------- --------
1996 1995 1996 1995
---- ---- ---- ----
First .40 N/A 80.875/73.125 54.375/50.25
Second .40 .35 86.75/73.00 64.875/50.00
Third .40 .35 91.75/76.25 68.125/59.375
Fourth .40 .35 96.625/85.25 79.50/63.00
---- ----
Year 1.60 1.05 96.625/73.00 79.50/50.00
/*/ The first day that the Corporation's Common Stock was publicly traded was
March 16, 1995
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item 6 is included under the caption
"Seven Year Summary" on page 85 of the 1996 Annual Report, and that information
is hereby incorporated by reference in this Form 10-K.
- 35 -
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item 7 is included under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on page 51 through page 63 of the 1996 Annual Report, and that
information is hereby incorporated by reference in this Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is included under the captions
"Report of Ernst & Young LLP, Independent Auditors," "Consolidated Statement of
Earnings," "Consolidated Statement of Cash Flows," "Consolidated Balance Sheet,"
"Consolidated Statement of Stockholders' Equity," and "Notes to Consolidated
Financial Statements" on page 65 through page 84 of the Audited Consolidated
Financial Statements included in the 1996 Annual Report and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
page 51 through page 63 of the 1996 Annual Report. This information is hereby
incorporated by reference in this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
- 36 -
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors required by this Item 10 is included
under the caption "Election of Directors" in the Corporation's definitive Proxy
Statement to be filed pursuant to Regulation 14A no later than March 25, 1997
(the "1997 Proxy Statement"), and that information is hereby incorporated by
reference in this Form 10-K. Information concerning executive officers required
by this Item 10 is located under Part I, Item 4(a) on page 31 through page 34 of
this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is included in the text and tables
under the caption "Compensation of Executive Officers" in the 1997 Proxy
Statement and that information, except for the information required by Item
402(k) and 402(l) of Regulation S-K, is hereby incorporated by reference in this
Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is included under the heading
"Securities Owned by Management" and "Voting Securities and Record Date" in the
1997 Proxy Statement and that information is hereby incorporated by reference in
this Form 10-K.
- 37 -
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Corporation is negotiating a Transaction Agreement pursuant to which
the Corporation anticipates repositioning certain non-core business units as a
new independent company. The transaction contemplates the creation of a new
company ("Newco") which will be 50.1% owned by Lehman Brothers Capital Partners
III, L.P. or its affiliates, 34.9% by the Corporation, and 15% by a management
team lead by Frank C. Lanza who, in addition to his services as a director of
the Corporation, serves as one of its executive vice presidents. The Transaction
Agreement is being negotiated on an arms-length basis. It is contemplated that
Newco will pay the Corporation a total purchase price for the businesses
(subject to adjustment in certain circumstances as will be provided in the
Transaction Agreement) of $525 million, consisting of 6,980,000 shares of Newco
Class A Common Stock and $479.835 million in cash. Mr. Lanza will be issued
1,500,000 shares of Class B Common Stock, or 7.5% of the equity securities of
Newco, in return for cash consideration of $7.5 million. A second individual
constituting a member of the proposed management team will also be issued
1,500,000 shares of Newco Class B Common stock in return for cash consideration
of $7.5 million. The proposed transaction is subject to a number of conditions,
including execution of a definitive agreement and regulatory approvals.
The Corporation has entered into an employment agreement with Mr. Lanza.
Under the agreement, during the three-year term of employment beginning on May
1, 1996, Mr. Lanza may, for good cause, give notice that he elects to terminate
employment under the agreement. Upon receipt of such notice, or upon termination
by the Corporation for other than substantial and serious cause, the agreement
requires Lockheed Martin to pay Mr. Lanza a lump sum payment equal to the base
salary and annual bonus that would have been paid during the remaining portion
of the three-year term of the agreement had he continued to be employed through
the full term. As of the date of the mailing of this Proxy Statement, the
Corporation is negotiating with Mr. Lanza as to the effect of the proposed
transaction under Mr. Lanza's employment agreement if that transaction closes.
- 38 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) List of Financial Statements filed as part of the Form 10-K.
Page
----
The following financial statements of Lockheed Martin Corporation and
consolidated subsidiaries, and the related Report of Ernst & Young,
Independent Auditors, included in the 1996 Annual Report, are
incorporated by reference into Item 8 on page 36 of this Annual Report
on Form 10-K. Page numbers refer to the 1996 Annual Report:
Consolidated Statement of Earnings--
December 31, 1996, 1995 and 1994............................ 66
Consolidated Statement of Cash Flows--
December 31, 1996, 1995 and 1994............................ 67
Consolidated Balance Sheet--
December 31, 1996 and 1995.................................. 68
Consolidated Statement of Stockholders' Equity--
December 31, 1996, 1995 and 1994............................ 69
Notes to Consolidated Financial Statements--
December 31, 1996........................................ 70-84
Report of Ernst & Young LLP, Independent Auditors............... 65
(2) List of Financial Statement Schedules filed as part of this Form
10-K.
All schedules have been omitted because they are not applicable, not
required, or the information has been otherwise supplied in the
financial statements or notes to the financial statements.
- 39 -
(b) The following report on Form 8-K was filed during the last quarter of
the period covered by this report:
(1) Lockheed Martin Corporation Current Report on Form 8-K filed with
the Securities and Exchange Commission on October 11, 1996.
During the first quarter of 1997, Lockheed Martin Corporation made the
following filing on Form 8-K:
(1) Lockheed Martin Corporation Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 21, 1997.
(c) Exhibits
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession.
(a) Agreement and Plan of Merger, dated as of January 7,
1996, among the Corporation, LMC Acquisition
Corporation and Loral Corporation (incorporated by
reference to the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation on January 12,
1996.
(b) Letter Amendment dated as of April 15, 1996, to the
Agreement and Plan of Merger dated as of January 7,
1996, by and among the Corporation, LAC Acquisition
Corporation and Loral Corporation (incorporated by
reference to Amendment No. 10 to Schedule 14D-1 in
respect of Loral Corporation filed by the Corporation
with the Commission on April 19, 1996).
(c) Restructuring, Financing and Distribution Agreement
dated as of January 7, 1996, by and among Loral
Corporation, Loral Aerospace Holdings, Inc., Loral
Aerospace Corp., Loral General Partner Inc., Loral
GlobalStar, L.P., Loral GlobalStar Limited, Loral Space
& Communications Ltd. and the Corporation (incorporated
by reference to the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation with the
Commission on January 12, 1996).
- 40 -
(d) Letter Amendment dated as of April 15, 1996, to the
Restructuring, Financing and Distribution Agreement
dated as of January 7, 1996, by and among the
Corporation, Loral Corporation, Loral Space &
Communications Corporation, Loral Aerospace Holdings,
Inc., Loral Aerospace Corp., Loral General Partner
Inc., Loral GlobalStar, L.P., Loral GlobalStar Limited
and Loral Space & Communications Ltd. (incorporated by
reference to Amendment No. 11 to the Schedule 14D-1 in
respect of Loral Corporation filed by the Corporation
with the Commission on April 22, 1996).
(3)(i) Articles of Incorporation.
(a) Articles of Amendment and Restatement of Lockheed
Martin Corporation (formerly Parent Corporation) filed
with the State Department of Assessments and Taxation
of the State of Maryland on February 7, 1995
(incorporated by reference to Exhibit 3.1 to Lockheed
Martin Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on February 9,
1995).
(ii) Bylaws
(a) Copy of the Bylaws of Lockheed Martin Corporation as
amended on January 23, 1997.
(4) (a) Indenture dated May 16, 1996, between the Corporation,
Lockheed Martin Tactical Systems, Inc., and First Trust
of Illinois, National Association as Trustee
(incorporated by reference to Exhibit 4 of the
Corporation's filing on Form 8-K on May 16, 1996).
No other instruments defining the rights of holders of
long-term debt are filed since the total amount of
securities authorized under any such instrument does
not exceed 10% of the total assets of the Corporation
on a consolidated basis. The Corporation agrees to
furnish a copy of such instruments to the Securities
and Exchange Commission upon request.
- 41 -
(b) See Exhibits 3.1 and 3.2.
(10)* (a) Format of the agreements between the Corporation and
certain officers to provide for continuity of
management in the event of a change in control of the
Corporation (incorporated by reference to Exhibit 10.14
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645) filed with Commission on
February 9, 1995).
(b) Lockheed Martin Corporation 1995 Omnibus Performance
Award Plan (incorporated by reference to Exhibit 10.36
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(c) Lockheed Martin Corporation Directors Deferred Stock
Plan, as amended and restated February 27, 1997.
(d) Agreement Containing Consent Order, dated December 22,
1994, among the Corporation, Lockheed Corporation,
Martin Marietta Corporation and the Federal Trade
Commission (incorporated by reference to Exhibit 10.4
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(e) Reconfiguration Agreement, dated August 29, 1994, among
Martin Marietta Corporation, the Corporation and
General Electric Company (incorporated by reference to
Exhibit 10.2 to Lockheed Martin Corporation's
Registration
- 42 -
Statement on Form S-4 (No. 33-57645) filed with the
Commission on February 9, 1995).
(f) Amendment to the Reconfiguration Agreement, dated
November 30, 1994, among Martin Marietta Corporation,
the Corporation and General Electric Company
(incorporated by reference to Exhibit 10.3 to Lockheed
Martin Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on February 9,
1995).
(g) Standstill Agreement, dated April 2, 1993, between
Martin Marietta Corporation and General Electric
Company (incorporated by reference to Exhibit 10.1 to
Lockheed Martin Corporation's Registration Statement on
Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(h) Lockhead Martin Corporation Directors Deferred
Compensation Plan, as amended and restated February 27,
1997.
(i) Martin Marietta Corporation Post-Retirement Income
Maintenance Plan for Directors, as amended
(incorporated by reference to Exhibit 10(iii)(b) to
Martin Marietta Corporation's Annual Report on Form 10-
K for the fiscal year ended December 31, 1994).
(j) Martin Marietta Corporation Financial Counseling
Program for directors, officers, company presidents,
and other key employees, as amended (incorporated by
reference to Exhibit 10.6 to Lockheed Martin
Corporation's Registration Statement on Form S-4 (No.
33-57645) filed with Commission on February 9, 1995).
(k) Martin Marietta Corporation Executive Incentive Plan,
as amended (incorporated by reference to Exhibit 10.7
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645)
- 43 -
filed with Commission on February 9, 1995).
(l) Deferred Compensation and Estate Supplement Plan, as
amended (incorporated by reference to Exhibit
10(iii)(e) to Martin Marietta Corporation's Annual
Report on Form 10-K for the fiscal year ended December
31, 1994).
(m) Martin Marietta Corporation Post-Retirement Death
Benefit Plan for Senior Executives, as amended
(incorporated by reference to Exhibit 10.9 to Lockheed
Martin Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with Commission on February 9,
1995).
(n) Martin Marietta Corporation 1979 Stock Option Plan for
Key Employees, as amended (incorporated by reference to
Exhibit 10.11 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with Commission on February 9, 1995).
(o) Martin Marietta Corporation 1984 Stock Option Plan for
Key Employees, as amended (incorporated by reference to
Exhibit 10.12 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with Commission on February 9, 1995).
(p) Martin Marietta Corporation Amended Omnibus Securities
Award Plan, as amended March 25, 1993 (incorporated by
reference to Exhibit 10.13 to Lockheed Martin
Corporation's Registration Statement on Form S-4 (No.
33-57645) filed with Commission on February 9, 1995).
(q) Martin Marietta Corporation Supplemental Excess
Retirement Plan, as amended (incorporated by reference
to Exhibit 10.15 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with Commission on February 9, 1995).
- 44 -
(r) Martin Marietta Corporation Restricted Stock Award
Plan, as amended (incorporated by reference to Exhibit
10.16 to Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
Commission on February 9, 1995).
(s) Martin Marietta Corporation Long Term Performance
Incentive Compensation Plan (incorporated by reference
to Exhibit 10(iii)(m) to Martin Marietta Corporation's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994).
(t) Amended and Restated Martin Marietta Corporation Long-
Term Performance Incentive Compensation Plan
(incorporated by reference to Exhibit 10(iii)(n) to
Martin Marietta Corporation's Annual Report on Form 10-
K for the fiscal year ended December 31, 1994).
(u) Martin Marietta Corporation Directors' Life Insurance
Program (incorporated by reference to Exhibit 10.17 to
Lockheed Martin Corporation's Registration Statement on
Form S-4 (No. 33-57645) filed with Commission on
February 9, 1995).
(v) Martin Marietta Corporation Executive Special Early
Retirement Option and Plant Closing Retirement Option
Plan (incorporated by reference to Exhibit 10.18 to
Lockheed Martin Corporation's Registration Statement on
Form S-4 (No. 33-57645) filed with Commission on
February 9, 1995).
(w) Martin Marietta Supplementary Pension Plan for
Employees of Transferred GE Operations (incorporated by
reference to Exhibit 10.19 to Lockheed Martin
Corporation's Registration Statement on Form S-4 (No.
33-57645) filed with Commission on February 9, 1995).
(x) Form of Employment Agreement between Martin Marietta
Corporation and certain officers (incorporated by
reference to Exhibit 10.20 to Lockheed Martin
- 45 -
Corporation's Registration Statement on Form S-4 (No.
33-57645) filed with the Commission on February 9,
1995).
(y) Martin Marietta Corporation Deferred Compensation Plan
for Selected Officers (incorporated by reference to
Exhibit 10.10 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with the Commission on February 9, 1995).
(z) Lockheed Corporation 1992 Employee Stock Option Program
(incorporated by reference to the Registration
Statement on Form S-8 (No. 33-49003) of Lockheed
Corporation filed with the Commission on September 11,
1992).
(aa) Amendment to Lockheed Corporation 1992 Employee Stock
Option Plan (incorporated by reference to Exhibit 10.22
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(bb) Lockheed Corporation 1986 Employee Stock Purchase
Program, as amended (incorporated by reference to
Exhibit 10.23 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with the Commission on February 9, 1995).
(cc) Lockheed Corporation 1982 Employee Stock Purchase
Program, as amended (incorporated by reference to
Exhibit 10.24 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with the Commission on February 9, 1995).
(dd) Incentive Retirement Benefit Plan for Certain
Executives of Lockheed Corporation, as amended
(incorporated by reference to Exhibit 10.25 to Lockheed
Martin Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on February 9,
1995).
(ee) Supplemental Retirement Benefit Plan for Certain
Transferred Employees of
- 46 -
Lockheed Corporation, as amended (incorporated by
reference to Exhibit 10.26 to Lockheed Martin
Corporation's Registration Statement on Form S-4 (No.
33-57645) filed with the Commission on February 9,
1995).
(ff) Supplemental Benefit Plan of Lockheed Corporation, as
amended (incorporated by reference to Exhibit 10.27 to
Lockheed Martin Corporation's Registration Statement on
Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(gg) Long-Term Performance Plan of Lockheed Corporation and
its Subsidiaries (incorporated by reference to Exhibit
10.28 to Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with the
Commission on February 9, 1995).
(hh) Lockhead Martin Corporation Supplemental Savings Plan,
as amended and restated as of January 1, 1997.
(ii) Deferred Compensation Plan for Directors of Lockheed
Corporation, as amended (incorporated by reference to
Exhibit 10.30 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645) filed
with the Commission on February 9, 1995).
(jj) Lockheed Corporation Retirement Plan for Directors, as
amended (incorporated by reference to Exhibit 10.31 to
Lockheed Martin Corporation's Registration Statement on
Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(kk) Form of Lockheed Corporation Termination Benefits
Agreement effective January 1, 1991 (included in Form
8, Amendment No. 1 to Exhibit 28 of Form 8-K dated
November 5, 1990 of Lockheed Corporation and
incorporated herein by reference).
- 47 -
(ll) Trust Agreement, as amended February 3, 1995, between
Lockheed Corporation and First Interstate Bank of
California (incorporated by reference to Exhibit 10.33
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(mm) Lockheed Corporation Directors' Deferred Compensation
Plan Trust Agreement, as amended (incorporated by
reference to Exhibit 10.34 to Lockheed Martin
Corporation's Registration Statement on Form S-4 (No.
33-57645) filed with the Commission on February 9,
1995).
(nn) Trust Agreement, dated December 22, 1994, between
Lockheed Corporation and J.P. Morgan California with
respect to certain employee benefit plans of Lockheed
Corporation (incorporated by reference to Exhibit 10.35
to Lockheed Martin Corporation's Registration Statement
on Form S-4 (No. 33-57645) filed with the Commission on
February 9, 1995).
(oo) Lockheed Martin Corporation Directors Charitable Award
Plan, as amended April 25, 1996.
(pp) 1983 Stock Option Plan (incorporated by reference from
Loral Corporation's 1983 Proxy Statement).
(qq) Amendment to the 1983 Stock Option Plan (incorporated
by reference from Loral Corporation's Form 10-K for the
fiscal year ended March 31, 1986, Exhibit 10.11).
(rr) Amended 1986 Stock Option Plan (incorporated by
reference from Loral Corporation's Form 10-Q for the
quarter ended June 30, 1988, Exhibit 10.1).
(ss) Amendment to the 1983 and 1986 Stock Option Plans
(incorporated by reference from Loral Corporation's
Form 10-K for the fiscal year ended March 31, 1990,
Exhibit 10.8).
(tt) 1991 Amendment to the 1986 Stock Option Plan
(incorporated by reference from Loral Corporation's
Form 10-K for the fiscal year ended March 31, 1991,
Exhibit 10.9).
(uu) Loral Corporation Incentive Compensation Plan for
Senior Executives (incorporated by reference from Loral
Corporation's 1994 Proxy Statement).
(vv) 1994 Stock Option and Incentive Stock Purchase Plan
(incorporated by reference from Loral Corporation's
1994 Proxy Statement).
(ww) Loral Corporation Restricted Stock Purchase Plan
(incorporated by reference from Loral Corporation's
Form 8-K dated May 13, 1987, Exhibit 10.28).
(xx) Amendment to the Loral Corporation Restricted Stock
Purchase Plan (incorporated by reference from Loral
Corporation's Form 10-Q for the quarter ended June 30,
1987, Exhibit 10.2).
(yy) Restated Employment Agreement between Loral Corporation
and Bernard L. Schwartz, dated as of April 1, 1990
(incorporated by reference from Loral Corporation's
Form 10-K for the fiscal year ended March 31, 1990,
Exhibit 10.11).
(zz) Extension and Modification Agreement between Loral
Corporation and Bernard L. Schwartz dated as of June
14, 1994 (incorporated by reference from Loral
Corporation's Form 10-K for the fiscal year ended March
31, 1995, Exhibit 10.11).
(aaa) Split-dollar life insurance agreement with Bernard L.
Schwartz, dated as of March 15, 1990 (incorporated by
reference from Loral Corporation's Form 10-K for the
fiscal year ended March 31, 1991, Exhibit 10.13).
(bbb) Split-dollar life insurance agreement with Bernard L.
Schwartz, dated as of December 10, 1990 (incorporated
by reference from Loral Corporation's Form 10-K for the
fiscal year ended March 31, 1991, Exhibit 10.14).
(ccc) Employment Contract between Loral Corporation and Frank
C. Lanza, dated as of April 1, 1987 (incorporated by
reference from Loral Corporation's Form 10-Q for the
quarter ender June 30, 1987, Exhibit 10.1 and Form 10-K
for the fiscal year ended March 31, 1982, Exhibit
10.11).
(ddd) Amendment to Employment Contract between Loral
Corporation and Frank C. Lanza, dated as of March 31,
1988 (incorporated by reference from Loral
Corporation's Form 10-K for the fiscal year ended March
31, 1988, Exhibit 10.19).
(eee) Amendment to Employment Contract between Loral
Corporation and Frank C. Lanza, dated as of March 21,
1990 (incorporated by reference from Loral
Corporation's Form 10-K for the fiscal year ended March
31, 1990, Exhibit 10.16).
(fff) Amendment to Employment Contract between Loral
Corporation and Frank C. Lanza, dated as of April 1,
1992 (incorporated by reference from Loral
Corporation's Form 10-K for the fiscal year ended March
31, 1992, Exhibit 10.17).
(ggg) Modification Agreement between Loral corporation and
Frank C. Lanza dated as of June 14, 1994 (incorporated
by reference from Loral Corporation's Form 10-K for the
fiscal year ended March 31, 1995, Exhibit 10.18).
(hhh) Split-dollar life insurance agreement with Frank C.
Lanza, dated as of August 5, 1985 (incorporated by
reference from Loral Corporation's Form 10-K for the
fiscal year ended March 31, 1991, Exhibit 10.18).
(iii) Loral Supplemental Executive Retirement Plan
(incorporated by reference to Exhibit 99.2 of the
Schedule 14D-9 filed by Loral Corporation with the
Commission on January 16, 1996).
(jjj) Loral Corporation Supplemental Bonus Plan (incorporated
by reference to Exhibit 99.3 of the Schedule 14D-9
filed by Loral Corporation with the Commission on
January 16, 1996).
(kkk) Loral Corporation Supplemental Severance Program
(incorporated by reference to Exhibit 99.4 of the
Schedule 14D-9 filed by Loral Corporation with the
Commission on January 16, 1996).
(lll) Form of Employment Protection Agreement between Loral
Corporation and Executives of Loral (incorporated by
reference to Exhibit 99.5 of the Schedule 14D-9 filed
by Loral Corporation with the Commission on January 16,
1996).
(mmm) Loral Corporation Employment Protection Plan
(incorporated by reference to Exhibit 99.6 of the
Schedule 14D-9 filed by Loral Corporation with the
Commission on January 16, 1996).
(nnn) Amendment to Lockheed Martin Corporation Supplemental
Excess Retirement Plan.
(ooo) Amendment to Terms of Outstanding Stock Option Relating
to Exercise Period for Employees of Divested Business.
(ppp) Lockheed Martin Corporation Post-Retirement Death
Benefit Plan for Elected Officers, as amended.
(qqq) Lockheed Martin Corporation Directors Retirement Plan,
as amended.
* Exhibits (10)(a) through (10)(c) and 10(h) through 10(qqq)
constitute management contracts or compensatory plans or arrangements
required to be filed as an Exhibit to this Form pursuant to Item 14(c)
of this Report.
(11) Computation of earnings per common share for the years
ended December 31, 1996, 1995 and 1994.
(12) Computation of ratio of earnings to fixed charges for
the year ended December 31, 1996.
- 48 -
(13) 1996 Annual Report to Security Holders (including an
appendix describing graphic and image material). Those
portions of the 1996 Annual Report to Security Holders
which are not incorporated by references in this Annual
Report in Form 10-K shall not be deemed "filed" as part
of this Report.
(21) List of Subsidiaries of Lockheed Martin Corporation.
(23) Consent of Ernst & Young LLP, Independent Auditors
(included in this Form 10-K at page 53).
(24) Powers of Attorney.
(27) Financial Data Schedule.
Other material incorporated by reference:
None.
- 49 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
LOCKHEED MARTIN CORPORATION
Date: March 14, 1997 By: /s/ FRANK H. MENAKER, JR.
---------------------
Frank H. Menaker, Jr.
Senior Vice President
and General Counsel
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/s/Norman R. Augustine* Chief Executive Officer
- -----------------------
NORMAN R. AUGUSTINE and Director February 27, 1997
/s/Marcus C. Bennett* Executive Vice President,
- ---------------------
MARCUS C. BENNETT Chief Financial Officer February 27, 1997
and Director
/s/Robert E. Rulon* Chief Accounting Officer February 27, 1997
- -------------------
ROBERT E. RULON
/s/Lynne V. Cheney* Director February 27, 1997
- -------------------
LYNNE V. CHENEY
/s/Vance D. Coffman* Director February 27, 1997
- --------------------
VANCE D. COFFMAN
- 50 -
SIGNATURES TITLE DATE
---------- ----- ----
/s/Houston K. Flournoy* Director February 27, 1997
- -----------------------
HOUSTON K. FLOURNOY
/s/James F. Gibbons* Director February 27, 1997
- --------------------
JAMES F. GIBBONS
/s/Edward E. Hood, Jr.* Director February 27, 1997
- -----------------------
EDWARD E. HOOD, JR.
/s/Caleb B. Hurtt* Director February 27, 1997
- ------------------
CALEB B. HURTT
/s/Gwendolyn S. King* Director February 27, 1997
- ---------------------
GWENDOLYN S. KING
/s/Frank C. Lanza* Director February 27, 1997
- -----------------
FRANK C. LANZA
/s/Vincent N. Marafino* Director February 27, 1997
- -----------------------
VINCENT N. MARAFINO
/s/Eugene F. Murphy* Director February 27, 1997
- --------------------
EUGENE F. MURPHY
/s/Allen E. Murray* Director February 27, 1997
- -------------------
ALLEN E. MURRAY
/s/Frank Savage* Director February 27, 1997
- ----------------
FRANK SAVAGE
/s/Daniel M. Tellep* Director February 27, 1997
- --------------------
DANIEL M. TELLEP
- 51 -
SIGNATURES TITLE DATE
---------- ----- ----
/s/Carlisle A.H. Trost* Director February 27, 1997
- -----------------------
CARLISLE A.H. TROST
/s/James R. Ukropina* Director February 27, 1997
- ---------------------
JAMES R. UKROPINA
/s/Douglas C. Yearley* Director February 27, 1997
- ----------------------
DOUGLAS C. YEARLEY
*By: /s/ STEPHEN M. PIPER March 14, 1997
----------------
(Stephen M. Piper, Attorney-in-fact**)
_____________________
**By authority of Powers of Attorney filed with this Annual
Report on Form 10-K.
- 52 -
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Lockheed Martin Corporation of our report dated January 20, 1997 (except
Note 3, as to which the date is February 3, 1997), included in the 1996 Annual
Report to Shareholders of Lockheed Martin Corporation.
We also consent to the incorporation by reference in the following Registration
Statements:
(1) Registration Statement Number 33-58067 of Lockheed Martin Corporation on
Form S-3, dated March 14, 1995;
(2) Registration Statement Numbers: 33-58073, 33-58075, 33-58077, 33-58079, 33-
58081, 33-58085, 33-58089 and 33-58097 of Lockheed Martin Corporation on
Forms S-8, each dated March 15, 1995;
(3) Post-Effective Amendment No. 1, dated March 15, 1995 to Registration
Statement Number 33-57645 of Lockheed Martin Corporation on Form S-8;
(4) Registration Statement Number 33-63155 of Lockheed Martin Corporation on
Form S-8, dated October 3, 1995;
(5) Registration Statement Number 33-06255 of Lockheed Martin Corporation on
Form S-8, dated June 19, 1996;
(6) Registration Statement Numbers: 33-06479, 33-06481, 33-06483, 33-06485,
33-06487, 33-06515 and 33-06517 of Lockheed Martin Corporation on Form S-8,
each dated June 21, 1996;
(7) Registration Statement Numbers: 33-20117 and 33-20139 of Lockheed Martin
Corporation on Form S-8 each dated January 22, 1997; and
(8) Post-Effective Amendment No. 1, dated January 22, 1997 to Registration
Statement Number 33-58083 on Form S-8.
of our report dated January 20, 1997 (except Note 3, as to which the date is
February 3, 1997), with respect to the consolidated financial statements
incorporated herein by reference.
ERNST & YOUNG LLP
Washington, D.C.
March 7, 1997
53