james d. taiclet - lockheed martin...proposal 1: election of directors 11 proposal 2: ratification...

March12,2021

DearFellowStockholders:

ItismypleasuretoinviteyoutoLockheedMartin's2021AnnualMeetingofStockholdersonThursday,April22,2021,at8:00a.m.EDT.Themeetingwillonceagainbeheldvirtuallyvialivewebcasttofacilitatefullstockholderparticipationwhileprotectinghealthandsafety.InformationonhowtoparticipateintheAnnualMeetingcanbefoundonpage85.

ResiliencyThroughaGlobalPandemic

Theglobalpandemichaspresentedunprecedentedbusinesschallengesandcontinuestoinflictpersonallossforsomany,includingwithintheLockheedMartinfamily.Throughoutthecrisis,ourprioritieshavebeentoensurethehealthandwelfareofouremployeesandtheirfamilies,continuetoperformanddeliverforourcustomersandournationalsecurity,anduseourresourcesandleadershipasacompanytoassistourcommunities,ourcountryandourallies.Wetookswiftactionearlyinthepandemictoaddressthethreatandhavecontinuedtodososince,includingmaintainingrobusthealthandsafetyprotocolsintheworkplace,deliveringpersonalprotectiveequipmenttofrontlineworkersandsupportingourcommunitiesandsuppliers.DespitethechallengespresentedbyCOVID-19,wecontinuedtohirethroughthepandemic,welcomingmorethan11,000newemployeesin2020.

Strong2020FinancialPerformance

Despitethechallengesof2020,we’reproudtoreportthattheresiliencyofouremployeestoadaptandcontinuetodeliverforourcustomersresultedinanotheryearofstrongfinancialresults,includingrecordsalesandearningspersharefromcontinuingoperationsandincreasedbacklog.Wecontinuedourstrongcashperformance,generating$8.2billionincashfromoperationsafterdiscretionarypensioncontributionsof$1.0billion.Andwereturned$3.9billionincashtostockholdersthroughdividendsandsharerepurchases.Formoredetailedinformationonourfinancialresults,pleasereviewourproxystatementandtheenclosed2020AnnualReport.

LeadershipTransitions

Followingaremarkable38-yearcareeratLockheedMartin,MarillynA.HewsonendedherserviceasExecutiveChairmanandasamemberoftheBoardonMarch1,2021.WeareextremelygratefulforhermanyvaluablecontributionstoourcompanyandtheBoardandsheleavesbehindalegacyasoneofLockheedMartin'smostsuccessfulandrespectedleaders.InadditiontomytransitiontotheroleofPresidentandCEOinJune2020,severalotherexecutiveswerealsoelevatedtonewexecutiveleadershippositionsaspartofadisciplinedleadershiptransition,reflectingtheCorporation’sdeliberateandthoroughsuccessionplanning.TheboardandtheexecutiveleadershipteamalsowanttoacknowledgetheunfortunatepassingofMicheleEvans,formerEVP,Aeronauticsinearly2021.Michelewasanexceptionalleaderandachampionfordiversityandinclusionandhasleftagreatlegacyoffutureleaderssheinspired.

Onbehalfoftheentireboardofdirectors,IwanttothankyouforyourcontinuedinvestmentinLockheedMartin.Yourvoteisimportant.Iurgeyoutopromptlycastyourvoteinaccordancewiththeboard'srecommendations.

Sincerely,

James D. TaicletChairman,PresidentandChiefExecutiveOfficer

www.lockheedmartin.com 2021 Proxy Statement 1

Notice of 2021 Annual Meeting of StockholdersAgenda Board Recommendation

Item 1 Electionof11directors FOReachofthedirector-nominees

Virtual Annual MeetingWhen:

Thursday,April22,2021,8:00a.m.EDT

Live Webcast Access:

Onlineaudiowebcastat:www.meetingcenter.io/266927146Password:LMT2021(ifpromptedforone)

Who Can Vote:

StockholdersofrecordatthecloseofbusinessonFebruary26,2021areentitledtovote.WhetherornotyouplantoattendtheAnnualMeeting,weencourageyoutovoteandsubmityourproxyinadvanceofthemeetingbyoneofthemethodsdescribedbelow.Seepages85-89foradditionalinformationregardingaccessingtheAnnualMeetingandhowtovoteyourshares.

Item 2 RatificationoftheappointmentofErnst&YoungLLPasourindependentauditorsfor2021

FOR

Item 3 Advisoryvotetoapprovethecompensationofournamedexecutiveofficers(Say-on-Pay)

FOR

Item 4 Considerationofastockholderproposaltoadoptwrittenconsent,ifproperlypresented

AGAINST

Item 5 Considerationofastockholderproposaltoissueareportonhumanrightsduediligence,ifproperlypresented

AGAINST

Considerationofanyothermattersthatmayproperlycomebeforethemeeting

The2021AnnualMeetingwillbeconductedonlineonlythroughaliveaudiowebcastviatheInternet.WehaveadoptedthisformattoassistinprotectingthehealthandsafetyoftheCorporation'sstockholdersandemployeesinlightofcontinuedpublichealthconcernsregardingCOVID-19andtofacilitatestockholderattendanceandtoenablestockholderstoparticipatefullyandequally,regardlessofsize,resources,orphysicallocation.

Wehaveenclosedour2020AnnualReporttoStockholders.Thereportisnotpartoftheproxysolicitingmaterialsforthe2021AnnualMeeting.TheProxyMaterialsoraNoticeofInternetAvailabilitywerefirstsenttostockholdersonoraboutMarch12,2021.

Yourvoteisextremelyimportant.Pleasevoteatyourearliestconveniencetoensurethepresenceofaquorumatthemeeting.Promptlyvotingyoursharesinaccordancewiththeinstructionsyoureceivewillsavetheexpenseofadditionalsolicitation.

Sincerely,

Maryanne R. Lavan SeniorVicePresident,GeneralCounselandCorporateSecretaryMarch12,2021

How to Vote in Advance:

Via the Internet:

Atthewebsitelistedontheproxycardorvotinginstructionformyoureceived.

By Telephone:

Call1-800-652-8683intheUnitedStates,CanadaandPuertoRico,1-781-575-2300forotherlocations,orthenumbersprovidedonyourvotinginstructionform.

By Mail:

Mark,dateandsignyourproxycardorvotinginstructionformandreturnitintheaccompanyingpostageprepaidenvelope.

Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting: The2021ProxyStatementand2020AnnualReportareavailableatwww.edocumentview.com/LMT.

2

Table of ContentsABOUT LOCKHEED MARTIN 4 SustainabilityHighlights 34

Climate&EnvironmentalStewardship 35

IMPACTS OF COVID-19 5 SupplierEngagement 35

PROXY STATEMENT SUMMARY 6 AUDIT MATTERS 36

PROPOSAL 1: ELECTION OF DIRECTORS 11 PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS 36BoardComposition,QualificationsandDiversity 11

BoardAttendance 11 AuditCommitteeReport 38

SummaryofDirectors-Nominees'CoreCompetencies 12

Director-Nominees 13 EXECUTIVE COMPENSATION 39

BoardEffectiveness,EvaluationsandRefreshment 17

PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NEOs (SAY-ON-PAY) 39CORPORATE GOVERNANCE 19

IndependentLeadDirector 19 CompensationCommitteeReport 39

MessagefromIndependentLeadDirector 20 CompensationDiscussionandAnalysis(CD&A) 40

BoardLeadershipStructure 20 SummaryCompensationTable 58

ExecutiveSessions 21 2020GrantsofPlan-BasedAwards 62

CommitteesoftheBoardofDirectors 21 OutstandingEquityAwardsat2020FiscalYear-End 65

BoardRoleandResponsibilities 23 OptionExercisesandStockVestedDuring2020 66

BoardRoleinStrategicPlanning 23 2020PensionBenefits 66

EnterpriseRiskManagement 24 2020NonqualifiedDeferredCompensation 68

Cybersecurity 24 PotentialPaymentsUponTerminationorChangeinControl 71

TalentManagementandSuccessionPlanning 24 CEOPayRatio 75

BoardOversightofPeopleStrategy 25

HumanRights 27 DIRECTOR COMPENSATION 76

StockholderEngagementandResponsiveness 28

BoardPoliciesandProcesses 29 SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS 79CorporateGovernanceGuidelines 29

DirectorOverboardingPolicy 29

DirectorIndependence 30 PROPOSAL 4: STOCKHOLDER PROPOSAL TO ADOPT STOCKHOLDER ACTION BY WRITTEN CONSENT 81RelatedPersonTransactionPolicy 30

CertainRelationshipsandRelatedPersonTransactionsofDirectors,ExecutiveOfficersand5PercentStockholders 31 PROPOSAL 5: STOCKHOLDER PROPOSAL TO ISSUE A

REPORT ON HUMAN RIGHTS DUE DILIGENCE 83AccountabilitytoStockholders 31

MajorityVotingPolicyforDirectorElections 31

StockholderRighttoAmendBylaws 32 ANNUAL MEETING QUESTIONS AND ANSWERS 85

ProxyAccess 32

StockholderRighttoCallSpecialMeeting 32 ADDITIONAL INFORMATION AND OTHER MATTERS 92

NoPoisonPill 32 AppendixA:DefinitionofNon-GAAP(GenerallyAcceptedAccountingPrinciples)Measures 92

ENTERPRISE RISK AND SUSTAINABILITY 33 DisclosureRegardingForward-LookingStatements 94

EnterpriseRiskManagementHighlights 33

Beyond2020SustainabilityPriorities 34


About Lockheed MartinLockheedMartinisaglobalsecurityandaerospacecompanythatemploys114,000peopleworldwideandisprincipallyengagedintheresearch,design,development,manufacture,integrationandsustainmentofadvancedtechnologysystems,productsandservices.Ourmissionistosolvecomplexchallenges,advancescientificdiscoveryanddeliverinnovativesolutionstohelpourcustomerskeeppeoplesafe.

OUR BUSINESSWehavefourbusinesssegments,eachofwhichisdedicatedtospecificproductsandservices.

Aeronautics, 40%Engagedintheresearch,design,development,manufacture,integration,sustainment,supportandupgradeofadvancedmilitaryaircraft,includingcombatandairmobilityaircraft,unmannedairvehiclesandrelatedtechnologies$26.3B

Missiles and Fire Control, 17%Providesairandmissiledefensesystems;tacticalmissilesandair-to-groundprecisionstrikeweaponsystems;logistics;firecontrolsystems;missionoperationssupport,readiness,engineeringsupportandintegrationservices;mannedandunmannedgroundvehicles;andenergymanagementsolutions$11.3B

Rotary and Mission Systems, 25%Designs,manufactures,servicesandsupportsvariousmilitaryandcommercialhelicopters,surfaceships,seaandland-basedmissiledefensesystems,radarsystems,seaandair-basedmissionandcombatsystems,commandandcontrolmissionsolutions,cybersolutions,andsimulationandtrainingsolutions$16.0B

Space, 18%Engagedintheresearch,design,development,engineeringandproductionofsatellites,spacetransportationsystems,andstrategic,advancedstrikeanddefensivesystems;providesnetwork-enabledsituationalawarenessandintegratescomplexspaceandgroundglobalsystemstohelpourcustomersgather,analyzeandsecurelydistributecriticalintelligencedata

$11.9B

2021 STRATEGIC FRAMEWORKEnhancedefense,securityandscientificdiscoverybydeliveringreliable,innovativeandaffordablesolutionstoourcustomers’mostdauntingchallenges

4

KEY ENABLERS

DISCRIMINATING TECHNOLOGY

DIGITAL TRANSFORMATION

STRATEGIC PARTNERSHIPS

FISCAL DISCIPLINE

TALENT & CULTURE

LEAD INNOVATE DRIVE GROW

thedefenseindustryandourcustomersinbuildingasuperior21stCenturyWarfarecapability

toprovidecuttingedgesolutionstoourcustomersateverylevelfromproducttoJointAll-DomainOperations

operationalexcellencethroughouttheCorporationandefficiencythroughouttheindustry

organicallyandthroughcapitalandacquisitioninvestmentstobenefitourstakeholders

Support for Our Employees, Suppliers and Communities Impacted by COVID-19LockheedMartincontinuestosupportthecriticalsecurityneedsofournationanditsalliesduringtheCOVID-19globalpandemicwhilealsoprovidingsupporttoindustrialbasesuppliers,front-linemedicalworkersandlocalcommunitiestohelpwithreliefandresponseefforts.WerecognizethattherapidspreadofCOVID-19anditswide-rangingimpactshavecausedseveredisruptionacrosssocietyandtragiclossoflifearoundtheworld.ManagingtheimpactsofCOVID-19onouremployees,suppliersandcommunitieshasbeenakeypriorityfortheCorporationandourBoardin2020.Inresponsetothiscrisis,theCorporationisguidedbyandoperateswiththreeclearpriorities:(i)wewillcontinuetoprotectthehealthandsafetyofourmenandwomenonthejobandtheirfamilies;(ii)wewillcontinuetoperformanddeliverforourcustomersbecausewhattheydoforournationalsecurity,globalcommunities,andinfrastructureiscriticaltoournationandourallies;and(iii)wewilldoourparttouseourinnovation,resources,andleadershipasacompanytoassistourcommunitiesandourcountry.

Employee Health and SafetyRecognizingthatourworkforceisourmostvaluableassetinsupportingournationalsecuritymission,wehavetakenactiontoprotectitshealthandsafety:• Wehavefulfilledourpledgetocover100%ofmedicalexpensesrelatedtoCOVID-19forthoseemployeesandtheirfamiliesparticipatingincompanyhealthplans.

• WeemployedanumberofmethodstoreducetheconcentrationofemployeesinofficeandproductionenvironmentswhoaredoingworkdeemedessentialbytheU.S.government.Weimplementedteleworking,minimumstaffingandsocialdistancingpoliciesforouremployeesconsistentwithcurrentfederalguidanceastheycontinuedtosupportnationalsecurity.

• Weprovidedemployeeswithpersonalprotectiveequipment,institutednewcleaningproceduresincludinghowtoolsarehandledand,insomeplaces,howareasarecleanedbetweenshifts,restrictedtravelandimplementedstrictrulesgoverningwhocanvisitourfacilities.

• Weenactedenhancedcontingencyplansinourfactoriestoreducethelikelihoodofaninterruptioninproductionofcriticalsecurityprograms.

Supply Chain Commitment• Throughoutthepandemic,wehelpedensureahealthysupplybase,acceleratingpaymentstomorethan10,100suppliers,includingnearly6,200smallbusinessesacrossall50states,theDistrictofColumbia,PuertoRico,and47nations.

• During2020,theDepartmentofDefenseannounceditwouldincreaseprogresspaymentratestolargebusinessesfrom80percentto90percent,acceleratingpaymentsforthecompletionofworkinrecognitionofthechallengesposedbyCOVID-19.During2020,LockheedMartinflowedalloftheacceleratedpaymentsitreceivedfromtheDepartmentofDefensetoitssupplychainwithafocusonsmallbusinessesandthoseat-risk.

• Wehavecontinuedin2021tomonitorCOVID-19impactsandtoacceleratecashtoat-risksuppliersandsmallbusinesses,workingwithourU.S.governmentpartnersandsuppliers,tomeetcommitmentsvitaltonationalsecurity.

Aid to Our Communities and International PartnersWemadenearly$22millionincharitablecontributions,aswellasdonationsofmealsforlocalcommunitiessurroundingLockheedMartinlocations,andpersonalprotectiveequipmentfordoctors,nurses,andfirstresponders.

WesupportedCOVID-19relatedinitiativesaroundtheworldincludingin16differentcountriesotherthantheU.S.

Wedonatedtheuseofourfacilitiesforcrisis-relatedactivitiesincludingcriticalmedicalsupplystorage,distribution,andCOVID-19testing,whereneededandpractical.

Wehavecontinuedtorecruitandhirenewemployeestofillkeyrolesaroundthecountry,oftenvirtually,toadvancetechnologiesthatwillshapethefutureandkeepusanemployerofchoice.

WeprovidedcorporateairsupporttotheU.S.DepartmentofHealthandHumanServicesandtheNationalMarrowDonorProgram.

Wedonatedmorethan1,400iPhonestolocalhospitalsandcommunityorganizationsacrossthecountry.


Proxy Statement SummaryTheBoardofDirectors(theBoard)ofLockheedMartinCorporation(theCorporation)isprovidingtheNoticeof2021AnnualMeetingofStockholders,thisProxyStatementandproxycard(theProxyMaterials)inconnectionwiththeCorporation'ssolicitationofproxiesforthe2021AnnualMeeting(theAnnualMeeting)tobeheldvirtuallyonApril22,2021,at8:00a.m.EDT.

ThisproxysummaryhighlightsinformationcontainedelsewhereinourProxyStatement.Thesummarydoesnotcontainalltheinformationthatyoushouldconsider,andweencourageyoutoreadtheentireProxyStatementcarefully.

Voting Matters and Board Recommendations

Proposal

1Election of 11 Director-Nominees

The Board recommends a vote FOR each of the director-nominees.See pages 11-16 for further information.

Proposal

2Ratification of the Appointment of Ernst & Young LLP as our Independent Auditors for 2021

The Board recommends a vote FOR ratification of Ernst & Young LLP for 2021.See pages 36-37 for further information.

Proposal

3Advisory Vote to Approve the Compensation of our Named Executive Officers (Say-on-Pay)The Board recommends a vote FOR our Say-on-Pay proposal. See page 39 for

further information.

Proposal

4Stockholder Proposal to Adopt Stockholder Action by Written Consent

The Board recommends a vote AGAINST proposal 4.See pages 81-82 for further information.

Proposal

5Stockholder Proposal to Issue a Report on Human Rights Due Diligence

The Board recommends a vote AGAINST proposal 5.See pages 83-84 for further information.

Stockholder Outreach40+

Engagements

30+Stockholders

26%OutstandingStock(asofDecember31,2020)

LockheedMartinengageswithabroadrangeofstockholders,includingindexfunds,unionsandpublicpensionfunds,actively-managedfundsandsocially-responsibleinvestmentfunds,andproxyadvisoryfirms.During2020,weextendedinvitationstosomeofourlargestinvestors,representingapproximately40percentofouroutstandingshares,andothersignificantstakeholdersandinvitedthemtoengageonvarioustopicsincludingour2020leadershipchanges,boardandworkforcediversity,humancapitalmanagement,executivecompensation,andsustainabilitymatters,includingclimatechange.Weengagedbytelephoneconferenceorwrittencorrespondenceover40timeswiththeseinvestorsandotherstakeholders,includingstockholdersrepresentingapproximately26percentofouroutstandingshares.Investorswelcomedouryear-roundglobaloutreachandexpressedappreciationforourongoingengagement.

6

Corporate Governance HighlightsBoard Composition, Committees, Skills and QualificationsTheBoardcarefullyreviewsitscompositiontoensureithastherightmixofpeoplewithdiverseperspectives,businessandprofessionalexperiencesaswellasprofessionalintegrity,soundjudgmentandcollegiality.TheBoardseekstoidentifycandidateswithknowledgeorexperiencethatwillexpandorcomplementitsexistingexpertisetoensuretheBoardisalignedtotheCorporation'sfuturestrategicchallengesandopportunities.

Lockheed Martin Committees

Name, Age, Independence, Position and Other Public Boards A CBS MDC NCG

DanielF.Akerson,72,IndependentLeadDirectorRetiredChairman&CEO,GeneralMotorsCompany

DavidB.Burritt,65,IndependentPresident&CEO,UnitedStatesSteelCorporation(U.S.Steel)-DirectoratU.S.Steel

BruceA.Carlson,71,IndependentRetiredUnitedStatesAirForceGeneral-DirectoratBenchmarkElectronicsInc.(Audit)

JosephF.Dunford,Jr.,65,IndependentRetiredUnitedStatesMarineCorpsGeneral;FormerChairmanoftheJointChiefsofStaff

JamesO.Ellis,Jr.,73,IndependentRetiredPresident&CEO,InstituteofNuclearPowerOperations-DirectoratDominionEnergy,Inc.(Finance&RiskOversight;Audit)

ThomasJ.Falk,62,IndependentRetiredChairman&CEO,Kimberly-ClarkCorporation

IleneS.Gordon,67,IndependentRetiredChairman&CEO,IngredionIncorporated-DirectoratInternationalPaperCompany(PresidingDirector;GovernanceChair;ManagementDevelopment&Compensation);InternationalFlavors&Fragrances,Inc.(Compensation)

VickiA.Hollub,61,IndependentPresident&CEO,OccidentalPetroleumCorporation-DirectoratOccidentalPetroleumCorporation

JehC.Johnson,63,IndependentPartneratPaul,Weiss,Rifkind,Wharton&GarrisonLLP;FormerSecretaryofHomelandSecurity-DirectoratU.S.Steel(Audit;CorporateGovernance&Sustainability)

DebraL.Reed-Klages,64,IndependentRetiredChairman,President&CEO,SempraEnergy-DirectoratChevronCorporation(Audit);CaterpillarInc.(Compensation&HumanResources)

JamesD.Taiclet,60Chairman,President&CEO,LockheedMartinCorporation

ACBSMDCNCG

AuditClassifiedBusinessandSecurityManagementDevelopmentandCompensationNominatingandCorporateGovernance

Member Chair

Proxy Statement Summary


BOARD DIVERSITY

36% Gender and Ethnic Diversity

3 Female Directors1 African-American Director

BOARD REFRESHMENT

6 New Directors in Past 5 Years

6 Directors 0-5 years2 Directors 6-10 years3 Directors 11+ yearsAverage Tenure

6 Years

66 Average Age

7 60 – 651 66 – 703 71 – 75Mandatory Re�rement Age

75

CEO LEADERSHIP EXPERIENCE

7 Directors are current or former public company CEOs who add to the effec�veness of the Board through leadership experience in large, complex organiza�ons and exper�se in corporate governance, strategic planning and risk management.

GLOBAL EXPERIENCE

11 Directors have board leadership experience with mul�na�onal companies or interna�onally.

FINANCIAL EXPERTS

6 Directors meet the Securi�es and Exchange Commission’s criteria as independent “audit commi�ee financial experts.”

GOVERNMENT EXPERIENCE

4 Directors have served in senior government or military posi�ons and provide industry experience and insight into our core customers and governments around the world.

VETERANS OF THE U.S. ARMED FORCES

5 Directors are military veterans.

Our Alignment with Governance StandardsIn2018,LockheedMartinbecameasignatorytotheCommonsensePrinciples2.0,aseriesofcorporategovernanceprinciplesforpubliccompanies,theirboardsandtheirinstitutionalstockholders,whichareintendedtoprovideabasicframeworkforsound,long-termorientedgovernance.ThesePrinciplesrecognizethatnoteveryprinciplewillbeappliedinthesamefashion(oratall)byeverycompanyorboard.Inaddition,ourcorporategovernancepracticescomplywiththeInvestorStewardshipGroup(ISG)CorporateGovernancePrinciplesforU.S.ListedCompaniesthatwentintoeffectin2018.BelowweidentifyeachoftheISG'scorporategovernanceprinciplesandhowourspecificpracticesarealigned.

BOARDS ARE ACCOUNTABLE TO STOCKHOLDERS

üAnnualelectionofdirectorsüMajorityvotingstandardfor

uncontesteddirectorelectionsüDirectorsnotreceivingmajority

supporttenderresignationtoBoardforconsideration

üMarket-standardproxyaccessrightforstockholders

üNopoisonpillüFullydisclosecorporategovernance

practices

BOARDS SHOULD ADOPT STRUCTURES AND PRACTICES THAT ENHANCE THEIR EFFECTIVENESS

ü10of11directorsareindependentü3ofourdirectorsarewomenüSignificantBoardrefreshmentüDirectorsreflectadiversemixofskills

andexperienceüAllBoardcommitteesarefully

independentüAnnualBoardandcommitteeself-

assessmentsüBoardaccesstoofficersandemployeesü2020Boardattendancegreaterthan

97%üOverboardingpolicyensuresBoard

memberscandevotesufficienttimetotheCorporation

BOARDS SHOULD BE RESPONSIVE TO STOCKHOLDERS AND BE PROACTIVE IN ORDER TO UNDERSTAND THEIR PERSPECTIVES

üProactive,year-roundengagementwithstockholders,includingparticipationofindependentLeadDirector

üEngagementtopicsincluded2020leadershipchanges,boardandworkforcediversity,humancapitalmanagement,executivecompensation,andenvironmental,socialandgovernance(ESG)matters,includingclimatechange

BOARDS SHOULD HAVE STRONG, INDEPENDENT LEADERSHIP

üEmpoweredindependentLeadDirector

üAnnualreviewofBoardleadershipstructure

üIndependentchairsofallBoardcommittees

STOCKHOLDERS SHOULD BE ENTITLED TO VOTING RIGHTS IN PROPORTION TO THEIR ECONOMIC INTEREST

üOneclassofvotingstockü“Oneshare,onevote”standard

BOARDS SHOULD DEVELOP MANAGEMENT INCENTIVE STRUCTURES THAT ARE ALIGNED WITH THE LONG-TERM STRATEGY OF THE COMPANY

üCompensationprogramsactivelyreviewedbytheBoardandincludeshort-andlong-termgoalstiedtothelong-rangeplanandthatunderpinourlong-termstrategy

Board EffectivenessOurBoardtakesamulti-facetedapproachtocontinuallyassessBoardcompositionandevaluateeffectiveness.

PRACTICES CONTRIBUTING TO BOARD EFFECTIVENESS SKILLS ENHANCED IN THE PAST 5 YEARS:

üIdentificationofDiverseBoardCandidates

üRotationofBoardCommitteeAssignments

üAnnualPerformanceAssessments

üRobustOnboardingandContinuingEducation

üTenureandOverboardingGuidelines

Enterpriseriskmanagement

Environment,safetyandhealth,andsustainabilityexpertise

Globalorganizationexperience

Innovation,informationtechnologyandcybersecurityMEANINGFUL REFRESHMENT

TheBoardhasadded6newdirectorsinthepast5years. Industryandcustomerexperience


8

Executive Compensation Highlights2020 CEO Transition and Pay DecisionsOnMarch12,2020,theBoardelectedJamesD.TaiclettosucceedMarillynA.HewsonasPresidentandChiefExecutiveOfficer(CEO)oftheCorporation,effectiveJune15,2020.FollowingtherecommendationoftheManagementDevelopmentandCompensationCommittee(CompensationCommittee),theBoardofDirectorsapprovedthe2020compensationarrangementsforMr.TaicletasPresidentandCEO,whichwascomprisedofanannualbasesalaryof$1,700,000,anannualincentivetargetof175%ofsalaryfor2020undertheLockheedMartinCorporationAmendedandRestated2006ManagementIncentiveCompensationPlan(MICP),tobeproratedbasedontimeintherole;andanannuallong-termincentive(LTI)awardopportunityfor2020of$14.0million,allocated50%inPerformanceStockUnits(PSUs),30%inRestrictedStockUnits(RSUs)and20%inthecash-basedLong-TermIncentivePerformanceaward(LTIP).Additionally,theBoardapprovedareplacementawardofRSUstooffsetforfeitedunvestedincentiveequityawardsfromhisformeremployer.Thesearrangementsarefurtherdetailedonpages42and43.

Mr.TaiclethasservedasamemberoftheBoardsince2018,withhistenurebeginningpriortohisappointmentasPresidentandCEO.UponthecommencementofhisemploymentwiththeCorporation,Mr.TaicletdidnotreceiveanyadditionalcompensationforservingasamemberoftheBoardandhisunvestedequityawardsundertheLockheedMartinCorporationAmendedandRestatedDirectorsEquityPlanwereforfeited.

2020 Pay and PerformanceAsubstantialportionofcompensationpaidtoournamedexecutiveofficers(NEOs)isperformance-based.Weusethe50thpercentileofourcomparatorgrouptosettargetcompensationbutallowforpaymentstoexceedorfallbelowthetargetlevelbaseduponactualperformance.Thisoutcomeisconsistentwithourpay-for-performancephilosophytosetpayandtargetsatmarketlevels,butpayincentivecompensationtoreflectactualperformance.

Basedonourstrongshort-andlong-termfinancialandoperationalperformance,asmanifestedinrecordsales,segmentoperatingprofit,andearningspersharefromcontinuingoperationsfortheyear,our2020annualand2018-2020LTIplanspaidoutabovetheirrespectivetargetlevels.TheBoarddidnotmakeanymodificationstoourcompensationprogramsorpositiveadjustmentsinresponsetoCOVID-19.

1-, 3- and 5-Year Total Stockholder Returns 2020 Annual Incentive ComponentWeightingsandAchievements

2018-2020 Long-Term IncentiveComponentWeightingsandAchievements

* SeeNon-GAAPtermsinAppendixAforanexplanationof“SegmentOperatingProfit,”“ReturnonInvestedCapital(ROIC),”and“PerformanceCash”andourforward-lookingstatementsconcerningfutureperformanceorgoalsforfutureperformance.



-20% 5% 30% 55% 80% 105% 130% 155% 180%

Lockheed Martin

S&P Aerospace

S&P Industrials

S&P 500

Dow Jones

3-Year TSR 1-Year TSR

18%

11%

-16%

-7%

49%

24%

1%

19%

86%

69%

79%

103%

98%

5-Year TSR

33%

10%

0%

100%(Target)

200%(Max)

Rela�ve TSR(50%)

PerformanceCash* (25%)

200%

200%

200%

ROIC*(25%)

Overall Payout200%of Target

0%

100%(Target)

200%(Max)

Sales (20%) SegmentOpera�ng

Profit* (40%)

70%Financial Goals

30%

Cash fromOpera�ons

(40%)

200%

160% 18

0%

Strategic &Opera�onal

Overall Payout177%of Target

156%

Enterprise Risk and SustainabilitySustainability Governance StructureWetakeanintegratedapproachtomanagingcorporateculture,ethicsandbusinessintegrity,governance,andsustainabilityissuesthroughariskmanagementlens.OversightofESGmattersfollowsourformalsustainabilitygovernancestructure.ThisstructureincludesourNominatingandCorporateGovernanceCommittee(GovernanceCommittee),theexecutiveleadershipteamandaworkinggroupofkeyfunctionalleaderswhopartnertoimplementsustainabilitypoliciesandprocessesacrossouroperations.TheGovernanceCommitteeischarteredbytheBoardofDirectorstoleaditsoversightresponsibilitiesrelatingtotheCorporation’sethicalconduct,humanrights,environmentalstewardship,corporateculture,philanthropy,workforcediversity,healthandsafety.

Relevant Issues and Strategic PrioritiesThrough2020,wehavefocusedonfivecoresustainabilityissuesandobjectives,whicharesetforthbelow.ThesefivecoreissuesincludeESGtopicsthatrepresentstakeholderprioritiesanddriversoflong-termvaluecreation.TheindependentdirectorswhoserveontheGovernanceCommitteereviewperformanceagainsttheSustainabilityManagementPlan,asetoftargetsthatcorrespondtoobjectivesassociatedwithourfivecoresustainabilityissues.TheGovernanceCommitteealsoapprovestheCorporation’sCodeofConduct(www.lockheedmartin.com/en-us/who-we-are/ethics/code-of-ethics.html)andannualSustainabilityReport(sustainability.lockheedmartin.com).

Sustainability MissionOursustainabilitymissionistofosterinnovation,integrity

andsecuritytoprotecttheenvironment,strengthencommunitiesandpropelresponsiblegrowth.

In2019-2020,weunderwentacoreissuesassessmentandsurveyedourstakeholderstoinformournextgenerationofsustainabilitypriorities.Thisupdatedcoreissuemodel,previewedonpage34,focusesoureffortsintheareasthatprovidethegreatestvaluetoourstakeholdersandourbusiness.Our2020SustainabilityReportwillincludetherevisedgoalsandkeyperformanceindicators(KPIs)thatreflectthestakeholderfeedbackwehavereceived,internalandexternaltrends,andthecontinuedevolutionofourbusinesstocreatevaluewellintothefuture.


10

Our Sustainability Governance Structure

Sustainability Working Group

Executive Leadership Team

Board of Directors

Nominating and CorporateGovernance Committee

SVP Ethics andEnterprise Assurance

Chair

Chairman, Presidentand CEO

VP, GovernmentAffairs

Director, Global SupplyChain Operations

Director, SocialImpact

Director, HumanResources

Director, AdvancedTechnology

Director, Corporate Legal

Director, Ethicsand Business Conduct

Director, Enterprise Riskand Sustainability

VP, Environment,Safety and Health

Board of DirectorsMonitors the Corporation’s adherence to our Code of Ethics and Business Conduct and oversees performance in corporate sustainability, employee safety and health, ethical business practices and diversity and inclusion.

Executive Leadership TeamGuides and governs corporate-wide sustainability objectives and initiatives.

Sustainability Working GroupDrives performance of our sustainability agenda, facilitates sustainability initiatives and coordinates stakeholder engagement.

BUSINESSINTEGRITY

Advancing Ethical Conduct

INFORMATIONSECURITYSecuring Data

for our Operations and Customers

RESOURCEEFFICIENCY

Optimizing our Energy, Water and

Material Usage

EMPLOYEEWELLBEING

Fostering A High-Performance,Inclusive Workplace

PRODUCTIMPACT

Innovating Energy, Security and Telecommunications

Infrastructure

www.lockheedmartin.com/en-us/who-we-are/ethics/code-of-ethics.html

www.lockheedmartin.com/en-us/who-we-are/ethics/code-of-ethics.html

sustainability.lockheedmartin.com

Proposal

1Election of Directors

• Diverseslateofdirectorswithbroadleadershipandcustomerexperience.

• Tenofourelevendirector-nomineesareindependent.

• Averagedirectortenureissixyearswithsixnewdirectorsinfiveyears.

The Board unanimously recommends a vote FOR each of the director-nominees.

Board Composition, Qualifications and DiversityWehavenoagreementsobligatingtheCorporationtonominateaparticularcandidateasadirector,andnoneofourdirectorsrepresentsaspecialinterestoraparticularstockholderorgroupofstockholders.

AtLockheedMartin,werecognizediversityandinclusionasabusinessimperativeandstrategicassettoourinvestors.Webelievethatourbusinessaccomplishmentsarearesultoftheeffortsofouremployeesaroundtheworld,andthatadiverseemployeepopulationwillresultinabetterunderstandingofourcustomers’needs.Oursuccesswithadiverseworkforcealsoinformsourviewsaboutthevalueofaboardofdirectorsthathaspersonsofdiverseskills,experiencesandbackgrounds.Tothisend,theBoardseekstoidentifycandidateswithareasofknowledgeorexperiencethatwillexpandorcomplementtheBoard’sexistingexpertiseinoverseeingatechnologicallyadvancedglobalsecurityandaerospacecompany.WhiletheCorporationdoesnothaveaformalpolicyonBoarddiversity,ourGovernanceGuidelinesplaceagreatemphasisondiversity,andourGovernanceCommitteeactivelyconsidersdiversityinrecruitmentandnominationsofdirectorcandidates.ThecurrentcompositionofourBoardreflectsthoseeffortsandtheimportanceofdiversitytoourBoard.Diversityinskillsandbackgroundsensuresthatthewidestrangeofoptionsandviewpointsareexpressedintheboardroom.

Board AttendanceIn2020,theBoardmetatotalof11times.AlldirectorsontheBoardduring2020attendedmorethan75percentofthetotalBoardandcommitteemeetingstowhichtheywereassignedandoverallattendancewasgreaterthan97percent.Boardmembersareencouragedtoattendtheannualmeetingofstockholdersandallincumbentdirectorsattendedthe2020virtualannualmeeting.


OTHER BOARD DEMOGRAPHICS

Caucasian/WhiteAfricanAmerican/BlackVeteransoftheU.S.ArmedForcesGender(Male/Female) M M M M M M F F M F M

Age 72 65 71 65 73 62 67 61 63 64 60

Tenure(roundedyears) 7 13 6 1 16 11 5 3 3 1 3

ü ü ü ü ü ü ü ü ü üü

ü ü ü ü ü

Summary of Director-Nominees’ Core CompetenciesWeconsidercurrentBoardskills,background,experience,tenureandanticipatedretirementstoidentifygapsthatmayneedtobefilledthroughtheBoardrefreshmentprocess.ThefollowingchartsummarizesthecorecompetenciesthattheBoardconsidersvaluabletoeffectivegovernanceandsuccessfuloversightofourcorporatestrategy,andillustrateshowthecurrentBoardmembersindividuallyandcollectivelyrepresentthesekeycompetencies.Thelackofanindicatorforaparticularitemdoesnotmeanthatthedirectordoesnotpossessthatqualification,skillorexperience,rather,theindicatorrepresentsthattheitemisacorecompetencythatthedirectorbringstotheBoard.

SKILLS AND EXPERIENCE

CEO LEADERSHIP EXPERIENCECEOpubliccompanyleadershipthatcontributestotheunderstandingandoversightoflargecomplexorganizations

ü ü ü ü ü ü ü

ENVIRONMENTAL, SAFETY & SUSTAINABILITYStrengthenstheBoard'soversightandassuresthatstrategicbusinessimperativesandlong-termvaluecreationareachievedinaccordancewithourenvironmental,safetyandsustainabilityinitiatives

ü ü ü ü ü

HUMAN CAPITAL MANAGEMENTContributestoourabilitytoattract,motivateandretainahighlyqualifiedworkforce,includingexecutives

ü ü ü ü ü ü ü ü ü ü ü

FINANCIAL EXPERTMeetstheSecuritiesandExchangeCommission's(SEC)criteriaasanindependent“auditcommitteefinancialexpert”

ü ü ü ü ü ü

MANUFACTURINGContributestotheunderstandingofthechallengesofcomplexmanufacturing

ü ü ü ü ü ü ü ü

SENIOR GOVERNMENT / MILITARY EXPERIENCEContributestoanunderstandingofourcustomersandtheabilitytounderstandpolicyissues

ü ü ü ü ü ü

GLOBAL EXPERIENCEContributestotheunderstandingofoperationsandbusinessstrategyabroad


ENGINEERING, TECHNOLOGY & INNOVATIONContributestotheunderstandingofkeytechnologyimperatives

ü ü ü ü ü

RISK MANAGEMENTContributestotheidentification,assessmentandmitigationofrisksfacingtheCorporation


CYBERSECURITY / INFORMATION TECHNOLOGYContributestotheunderstandingandoversightofcybersecuritythreatsanddigitaltransformation

ü ü ü ü

OTHER BOARD DEMOGRAPHICS

Caucasian/White ü ü ü ü ü ü ü ü ü üAfricanAmerican/Black üVeteransoftheU.S.ArmedForces ü ü ü ü üGender(Male/Female) M M M M M M F F M F M

Age 72 65 71 65 73 62 67 61 63 64 60

Tenure(roundedyears) 7 13 6 1 16 11 5 3 3 1 3

Proposal 1: Election of Directors

AKERSONBURRITTCARLSONDUNFORD

ELLIS

FALK

GORDON

HOLLUB

JOHNSON

REED-KLAGES

TAIC

LET

12

Director-Nominees

BiographyViceChairmanofTheCarlyleGroupfromMarch2014toDecember2015.Mr.AkersonwasChairmanoftheBoardofDirectorsandChiefExecutiveOfficerofGeneralMotorsCompanyfromJanuary2011untilhisretirementinJanuary2014.PriortojoiningGeneralMotors,hewasaManagingDirectorofTheCarlyleGroup,servingastheHeadofGlobalBuyoutfromJuly2009toAugust2010andasCo-HeadofU.S.BuyoutfromJune2003toJune2009.Mr.AkersonservesasChairmanoftheU.S.NavalAcademyFoundation.HepreviouslyservedontheboardofdirectorsofKLDiscoveryInc.fromDecember2019untilJanuary2020andCommScopeHoldingCompany,Inc.fromApril2019untilDecember2020.

Daniel F. AkersonAge72

Director since 2014Independent Lead Director

Other Current BoardsNone

Skills, Qualifications and Core Competencies

• Coreleadershipskillsandexperiencewiththedemandsandchallengesoftheglobalmarketplace• Extensiveoperating,marketingandseniormanagementexperienceinasuccessionofmajorcompaniesin

challenging,highlycompetitiveindustries• Enterpriseriskmanagement,financial,investmentandmergersandacquisitionsexpertise

BiographyPresidentandChiefExecutiveOfficerofUnitedStatesSteelCorporation(U.S.Steel)sinceMay2017.Mr.BurrittalsowasnamedtoU.S.Steel'sboardofdirectorsatthattime.Mr.BurrittpreviouslyservedasPresidentandChiefOperatingOfficerofU.S.SteelfromFebruary2017toMay2017;ChiefFinancialOfficerfromSeptember2013toMay2017;andExecutiveVicePresidentfromSeptember2013toFebruary2017.PriortojoiningU.S.Steel,Mr.BurrittservedasChiefFinancialOfficerofCaterpillarInc.untilhisretirementin2010,aftermorethan32yearswiththecompany.

David B. BurrittAge65

Director since 2008Independent Director

Other Current BoardsU.S.Steel


• Expertiseinpubliccompanyaccounting,riskmanagement,disclosure,financialsystemmanagement,manufacturingandcommercialoperationsandbusinesstransformationfromrolesasCEOandCFOatU.S.SteelandCFOandControlleratCaterpillarInc.

• Over40years’experiencewiththedemandsandchallengesoftheglobalmarketplacefromhispositionsatU.S.SteelandCaterpillarInc.

BiographyRetiredU.S.AirForceGeneral,Mr.CarlsonhasbeenchairmanofUtahStateUniversity'sSpaceDynamicsLaboratoryGuidanceCouncilsinceJune2013andchairmanofitsboardofdirectorssince2018.Previously,Mr.Carlsonservedasthe17thDirectoroftheNationalReconnaissanceOfficefrom2009until2012.HeretiredfromtheU.S.AirForcein2009aftermorethan37yearsofservice,includingserviceasCommander,AirForceMaterielCommandatWright-PattersonAFB,Ohio,Commander,EighthAirForceatBarksdaleAFB,Louisiana;andDirectorforForceStructure,ResourcesandAssessment(J-8)fortheJointStaff.

Bruce A. CarlsonAge71


Other Current BoardsBenchmarkElectronicsInc.


• Industry-specificexpertiseandknowledgeofourcorecustomer,includingaircraftandsatellitedevelopmentandacquisitionexperiencefromhisserviceinseniorleadershippositionswiththemilitary

• ExperiencewiththedemandsandchallengesassociatedwithmanaginglargeorganizationsfromhisserviceasaCommanderandJointStaffDirectoroftheJointChiefsandtheNationalReconnaissanceOffice

• Skilledinexecutivemanagement,logisticsandmilitaryprocurement



BiographyRetiredU.S.MarineCorpsGeneral,Mr.Dunfordservedasthe19thChairmanoftheJointChiefsofStafffrom2015untilhisretirementinSeptember2019.Hispreviousassignmentsincludeservingasthe36thCommandantoftheMarineCorpsandtheCommanderofallU.S.andNATOForcesinAfghanistan.HeisaSeniorFellowattheBelferCenter,HarvardUniversity,andChairmanoftheBoardoftheSemperFiandAmerica’sFund.

Joseph F. Dunford, Jr.Age65




• Industry-specificexpertiseandknowledgeofourcorecustomerfromhisserviceinseniorleadershippositionswiththemilitary

• ExperiencewiththedemandsandchallengesassociatedwithmanaginglargeorganizationsfromhisserviceasaCommanderandChairmanoftheJointChiefsofStaff

• Skilledinexecutivemanagement,logistics,militaryprocurementandcybersecuritythreats

BiographyAdmiralEllishasservedasanAnnenbergDistinguishedFellowattheHooverInstitutionatStanfordUniversitysince2014.Previously,heservedasPresidentandChiefExecutiveOfficeroftheInstituteofNuclearPowerOperationsfromMay2005untilhisretirementinMay2012.Mr.EllisretiredfromactivedutyinJuly2004afterservingasAdmiralandCommander,UnitedStatesStrategicCommand,OffuttAirForceBase,Nebraska.HeformerlyservedasadirectorofLevel3Communications,Inc.fromMarch2005toNovember2017.

James O. Ellis, Jr.Age73


Other Current BoardsDominionEnergy,Inc.


• Industry-specificexpertiseandknowledgeofourcorecustomersfromhisserviceinseniorleadershippositionswiththemilitaryandtheprivatesector

• Expertiseinaeronauticalandaerospaceengineering,informationtechnologyandemergingenergyissues• Skilledinenterpriseriskmanagement• Over40years’experienceinmanagingandleadinglargeandcomplextechnology-focusedorganizations,in

largepartasaresultofservingfor35yearsasanactivedutymemberoftheUnitedStatesNavy

BiographyExecutiveChairmanofKimberly-ClarkCorporationfromJanuary2019throughDecember2019.Havingserved36yearsatKimberly-ClarkCorporation,Mr.FalkwasChairmanoftheBoardandChiefExecutiveOfficerfrom2003untilDecember2018;ChiefExecutiveOfficerfrom2002andPresidentandChiefOperatingOfficerfrom1999to2002.

Thomas J. FalkAge62




• ExperiencewiththedemandsandchallengesassociatedwithmanagingglobalorganizationsfromhisexperienceasChairmanandChiefExecutiveOfficerofKimberly-ClarkCorporation

• Knowledgeoffinancialsystemmanagement,publiccompanyaccounting,disclosurerequirementsandfinancialmarkets

• Manufacturing,humancapitalmanagement,compensation,governanceandpubliccompanyboardexperience


14

BiographyExecutiveChairmanoftheBoardofIngredionIncorporatedfromJanuary2018throughJuly2018.Previously,Ms.GordonwasChairmanoftheBoard,PresidentandChiefExecutiveOfficerofIngredionIncorporatedfromMay2009throughDecember2017.IngredionIncorporatedisapublicly-tradedcorporationmanufacturingfoodingredientsglobally.

Ilene S. GordonAge67


Other Current BoardsInternationalPaperCompany;InternationalFlavors&Fragrances,Inc.


• ExperiencewiththedemandsandchallengesassociatedwithmanagingglobalorganizationsfromherexperienceasChairman,PresidentandChiefExecutiveOfficerofIngredionIncorporated

• Knowledgeoffinancialsystemmanagement,publiccompanyaccounting,disclosurerequirementsandfinancialmarkets

• Marketing,humancapitalmanagement,compensation,governanceandpubliccompanyboardexperience

BiographyPresidentandChiefExecutiveOfficerofOccidentalPetroleumCorporation(Occidental),aninternationaloilandgasexplorationandproductioncompanysinceApril2016.Havingservedmorethan30yearsatOccidental,Ms.HollubservedasPresidentandChiefOperatingOfficerfrom2015to2016;SeniorExecutiveVicePresident,OccidentalandPresident,OxyOilandGas-Americasfrom2014to2015,andExecutiveVicePresident,OccidentalandExecutiveVicePresident,U.S.OperationsandOxyOilandGasfrom2013to2014.

Vicki A. HollubAge61


Other Current BoardsOccidental


• BroadinsightandexperiencewiththedemandsandchallengesassociatedwithmanagingglobalorganizationsfromherexperienceasPresidentandChiefExecutiveOfficerofOccidentalandmorethanthreedecadesinexecutiveandoperationalroles

• ExpertiseintheMiddleEastregionandLatinAmerica• Skilledinenterpriseriskmanagement,environmental,safetyandhealth,andsustainability

BiographyPartnerattheinternationallawfirmofPaul,Weiss,Rifkind,Wharton&GarrisonLLPsinceJanuary2017.Previously,Mr.JohnsonservedasU.S.SecretaryofHomelandSecurityfromDecember2013toJanuary2017;andasGeneralCounseloftheU.S.DepartmentofDefenseandasGeneralCounseloftheU.S.DepartmentoftheAirForce.Mr.JohnsonispresentlyadirectoroftheCouncilonForeignRelations,andformerlyservedasadirectorofPG&ECorporationfromMay2017toMarch2018.

Jeh C. JohnsonAge63


Other Current BoardsU.S.Steel


• Expertiseinnationalsecurity,leadershipdevelopmentandorganizationalpreparednessfromhisserviceasU.S.SecretaryofHomelandSecurity

• Industry-specificexpertiseandinsightintoourcorecustomers,includingrequirementsforacquisitionofproductsandservices,frompriorseniorleadershippositionswiththemilitary

• Experiencewithlargeorganizationmanagementandassessinghumanresources,equipment,cybersecurity,andfinancialrequirements,aswellasreputationalrisks



BiographyRetiredinDecember2018asExecutiveChairmanofSempraEnergy.SheservedasChairman,PresidentandChiefExecutiveOfficerofSempraEnergyfromMarch2017toMay2018,ChairmanandChiefExecutiveOfficerofSempraEnergyfromDecember2012toMarch2017andChiefExecutiveOfficerofSempraEnergyfromJune2011toDecember2012.Previously,Ms.Reed-KlagesservedasanExecutiveVicePresidentofSempraEnergyandasPresidentandChiefExecutiveOfficerofSDG&EandSoCalGas,SempraEnergy’sregulatedCaliforniautilities.ShewasalsopreviouslyPresident,ChiefOperatingOfficerandCFOofSDG&EandSoCalGas.ShepreviouslyservedontheboardsofdirectorsofHalliburtonCompanyfromJanuary2001toSeptember2018andOncorElectricDeliveryCompanyLLCduring2018.Debra L. Reed-Klages

Age 64


Other Current BoardsChevronCorporationCaterpillarInc.


• ExperiencewiththedemandsandchallengesassociatedwithmanagingglobalorganizationsfromherexperienceasChairman,PresidentandChiefExecutiveOfficerofSempraEnergy

• Skilledinenterpriseriskmanagement,environmental,safetyandhealth,andsustainability• Knowledgeoffinancialsystemmanagement,compensation,governanceandpubliccompanyboard

experience

BiographyChairmansinceMarch2021andPresidentandChiefExecutiveOfficerofLockheedMartinsinceJune2020.Previously,Mr.TaicletservedasChairman,PresidentandChiefExecutiveOfficerofAmericanTowerCorporationfromFebruary2004untilMarch2020andExecutiveChairmanfromMarch2020toMay2020.Previously,Mr.TaicletservedasPresidentofHoneywellAerospaceServices,aunitofHoneywellInternationalandVicePresident,EngineServicesatPratt&Whitney,aunitofUnitedTechnologiesCorporation.

James D. TaicletAge60

Director since 2018Chairman, President and CEO



• EffectiveleadershipandexecutiveexperienceasChairman,PresidentandCEOofAmericanTowerCorporation

• Expertiseinmanagementatlarge-scale,multinationalcorporations,includingregulatorycompliance,corporategovernance,capitalmarketsandfinancing,strategicplanningandinvestorrelations

• Industry-specificexpertisefromserviceasaU.S.AirForceofficerandpilotandasanexecutiveatHoneywellAerospaceServicesandPratt&Whitney


16

Board Effectiveness, Evaluations and RefreshmentBoardcompositionisacriticalareaoffocusfortheBoard.Havingtherightmixofpeoplewhobringdiverseperspectives,businessandprofessionalexperiencesandcompetenciesaswellasprofessionalintegrity,soundjudgmentandcollegiality,providesafoundationforrobustdialogue,informedadviceandcollaborationintheboardroom.TheBoardstrivestoensureanenvironmentthatencouragesdiversecriticalthinkingandvaluesinnovative,strategicdiscussionstoachieveahigherlevelofsuccessfortheCorporationanditsstockholders.TheGovernanceCommitteescreensandrecommendscandidatesfornominationbythefullBoard.TheGovernanceCommitteeusesavarietyofmethodstohelpidentifypotentialboardcandidateswiththedesiredskillsandbackgroundneededfortheCorporation’sbusiness,includinginformalnetworks,internalresourcesandotherchannels.

TheGovernanceCommitteereviewsboththeshort-andlong-termstrategiesoftheCorporationtodeterminewhatcurrentandfutureskillsandexperiencearerequiredoftheBoardinexercisingitsoversightfunctionandinthecontextofourstrategicpriorities.OurinternalexecutivesearchteamcompilesalistofprospectivedirectorcandidatesreflectingtheBoard'scriteria,qualificationsandexperience,keepinginminditscommitmenttodiversity.CandidatesareidentifiedfromthissourcepoolbytheChairmanandtheGovernanceCommitteeandmaybeinterviewedbytheChairmanandindependentLeadDirector,whoalsochairstheGovernanceCommittee.WhilethereisnoformalBoardpolicywithregardtotheconsiderationofdiversityinidentifyingdirectornominees,thesourcepoolintentionallyincludescandidateswithdiversebackgroundstofurtherenhancetheBoard'sdiversity.OurBoardbelievesthatabalanceofdirectordiversityandtenureisastrategicassettoourinvestors.TherangeofourBoard'stenureencompassesdirectorswhohavehistoricinstitutionalknowledgeofLockheedMartinandthecompetitiveenvironment,complementedbynewerdirectorswithvariedbackgroundsandskillsandfreshperspectives.

Board Refreshment Elements

Governance Committee Review of Board Candidates

TheBoardseeksadiversegroupofcandidateswho,ataminimum,possessthebackground,skills,expertise,competenciesandtimetomakeasignificantcontributiontotheBoard.TheGovernanceGuidelines(availableatwww.lockheedmartin.com/corporate-governance)listcriteriaagainstwhichcandidatesmaybejudged.Inaddition,theGovernanceCommitteeconsiders,amongotherthings:

• inputfromtheBoard’sself-assessmentprocesstoprioritizeareasofexpertisethatwereidentified;

• investorfeedbackandperceptions;

• thecandidates’skillsandcompetenciestoensuretheyarealignedtotheCorporation’sfuturestrategicchallengesandopportunities;

• theneedsoftheBoardinlightofBoardretirements;and

• abalancebetweenpubliccompanyandgovernmentcustomer-relatedexperience.

Duringtheprocessofidentifyingandselectingdirectornominees,theGovernanceCommitteescreensandrecommendscandidatesfornominationbythefullBoard.Forincumbentdirectors,theGovernanceCommitteealsoconsidersattendance,pastperformanceontheBoardandcontributionstotheBoardandtheirrespectivecommittees.TheBylawscurrentlyprovidethatthesizeoftheBoardmayrangefrom10to14members.

DirectorcandidatesalsomaybeidentifiedbystockholdersandwillbeevaluatedunderthesamecriteriaappliedtootherdirectornomineesandconsideredbytheGovernanceCommittee.InformationontheprocessandrequirementsforstockholdernomineesmaybefoundinSections1.10and1.11ofourBylawsontheCorporation’swebsiteatwww.lockheedmartin.com/corporate-governance.

Board Committee Assignments

InFebruaryofeachyear,theGovernanceCommitteereviewsthemembership,tenure,leadershipandcommitmentsofeachofthecommitteesandconsiderspossiblechangesgiventhequalificationsandskillsetsofmembersontheBoardoradesireforcommitteerotationorrefreshment.TheGovernanceCommitteealsotakesintoconsiderationthemembershiprequirementsandresponsibilitiessetforthineachoftherespectivecommitteechartersandtheGovernanceGuidelinesaswellasanyupcomingvacanciesontheBoardduetoourmandatoryretirementage.TheGovernanceCommitteerecommendstotheBoardanyproposedchangestocommitteeassignmentsandleadershiptobemadeeffectiveatthenextannualmeetingofstockholders.TheGovernanceCommitteealsoreviewstheoperationoftheBoardgenerally,andbasedonitsrecommendationandbasedonBoardfeedback,effectiveSeptember25,2020,theExecutiveCommittee,whichwasnotbeingused,waseliminated.



Annual Performance Assessment

TheBoardconductsaself-assessmentofitsperformanceandeffectivenessaswellasthatofitscommitteesonanannualbasis.Theself-assessmenthelpstheGovernanceCommitteetotrackprogressincertainareastargetedforimprovementfromyear-to-yearandtoidentifywaystoenhancetheBoard’sanditscommittees’effectiveness.Theevaluationprocessincludesthefollowingsteps:

1 Annual Written Questionnaire

Open-endedquestionstosolicitcandidfeedback.Topicscoveredinclude:

• Boardmeetingcontentandvirtualformat

• Boardculture

• BoardleadershipstructureandCEOtransition

• Boardcomposition,selectionanddiversity

• Potentialskillsgapsforidentifyingboardcandidates

• Committeeeffectiveness

• Evaluationofrisks,includingCOVID-19response

• Peerassessmenttoelicitfeedbackontheperformanceofindividualdirectors

2 One-on-One Discussions with Independent Lead Director

Everyfewyears,includingin2019and2020,theindependentLeadDirectorconductsseparate,one-on-onediscussionswitheachdirectortodiscussanyadditionalfeedbackorperspectives.

3 Committee/Board Private Sessions

TheGovernanceCommitteeandeachothercommitteeandthefullboardreviewtheresultsoftheevaluationsinprivatesession.TheboarddiscussionisledbytheindependentLeadDirector.

4 Feedback Incorporated • ContinuedstreamliningBoardcommitteestructurebyeliminatingtheExecutiveCommittee

• Addedadditionalsitevisitofclassifiedprograms

• Addedadditionaldirectorswithcybersecurity,CEOandseniormilitaryexperience

Robust Onboarding and Continuing Education

NewdirectorsareprovidedacomprehensiveorientationabouttheCorporation,includingourbusinessoperations,strategyandgovernance.Newdirectorshaveone-on-onesessionswiththeCEO,otherdirectorsandothermembersofseniormanagement.MembersofourseniormanagementregularlyreviewwiththeBoardtheoperatingplanofeachofourbusinesssegmentsandtheCorporationasawhole.AlthoughdisruptedbeginninginMarch2020byCOVID-19,theBoardalsoconductsperiodicsitevisitstoourfacilitiesaspartofitsregularlyscheduledBoardmeetingsanddirectorsareencouragedtovisitsitesonanadhocbasisandmeetone-on-onewithmembersofseniormanagementandotheremployees.Directorsareencouragedtoattendoutsidedirectorcontinuingeducationprogramssponsoredbyeducationalandotherinstitutionstoassisttheminstayingabreastofdevelopmentsincorporategovernanceandcriticalissuesrelatingtotheoperationofpubliccompanyboards.

Our Director Tenure Guidelines

Mandatory Retirement Age Adirectormustretireattheannualmeetingfollowinghisorher75thbirthday.

Term Limits WedonothavetermlimitsfordirectorsaswebelieveimplementingtermlimitationsmaypreventtheBoardfromtakingadvantageofinsightthatlongertenurebrings.

Employment Change Directorsshouldexpecttoresignuponanysignificantchangeinprincipalemploymentorresponsibilities.

Failed Election Directorsmustoffertoresignasaresultofafailedstockholdervoteundermajorityvotingpolicy.


18

Corporate GovernanceLockheedMartinbelievesgoodgovernanceisintegraltoachievinglong-termstockholdervalue.TheBoard’sprimaryroleistooverseemanagementandrepresenttheinterestsofstockholders.DirectorsareexpectedtoattendBoardmeetings,themeetingsofthecommitteesonwhichtheyserveandtheannualmeetingofstockholders.TheBoardanditscommitteesregularlyscheduleandholdexecutivesessionswithoutanymembersofmanagementpresent.Betweenmeetings,directorsinteractwiththeChairman,PresidentandCEO,theindependentLeadDirectorandothermembersofmanagementandareavailabletoprovideadviceandcounseltomanagement.

Independent Lead DirectorTheBoardbelievesthathavingastrong,independentLeadDirectorroleisimportanttosoundcorporategovernance.InaccordancewithourBylawsandGovernanceGuidelines,theindependentmembersoftheBoardannuallyelectoneoftheindependentdirectorstoserveastheLeadDirectorbytheaffirmativevoteofamajorityofthedirectorswhohavebeendeterminedtobe"independent"forpurposesoftheNewYorkStockExchange(NYSE)listingstandards.DanielF.AkersonhasservedastheindependentLeadDirectorsinceApril2019.TheBoardhasstructuredtheroleoftheindependentLeadDirectortofurtherenhancethefunctioningoftheBoardandwithsufficientauthoritytoserveasacounterbalancetomanagement.Theresponsibilitiesoftherole,asspecifiedintheBylawsincludeto:

• presideaschairatBoardmeetingswhileinexecutivesessionsofthenon-managementmembersoftheBoardorexecutivesessionsoftheindependentdirectorsoriftheChairmanisnotpresent;

• determinethefrequencyandtimingofexecutivesessionsofnon-managementdirectorsandreporttotheChairmanandCEOonallrelevantmattersarisingfromthosesessions,andinvitetheChairmanandCEOtojointheexecutivesessionforfurtherdiscussionasappropriate;

• consultwiththeChairmanandcommitteechairsregardingthetopicsforandschedulesofthemeetingsoftheBoardandcommitteesandapprovethetopicsforandschedulesofBoardmeetings;

• reviewandapproveallBoardandcommitteeagendas(inadditiontoeachcommitteechair)andprovideinputtomanagementonthescopeandqualityofinformationsenttotheBoard;

• assistwithrecruitmentofdirectorcandidatesand,alongwiththeChairman,extendinvitationstopotentialdirectorstojointheBoard;

• actasliaisonbetweentheBoardandmanagementandamongthedirectorsandthecommitteesoftheBoard;

• serveasanex-officiomemberofeachcommitteeifnototherwiseamemberofthecommittee;

• serveasthepointofcontactforstockholdersandotherstocommunicatewiththeBoard;

• recommendtotheBoardandcommitteestheretentionofadvisorsandconsultantswhoreportdirectlytotheBoard;

• callaspecialmeetingoftheBoardoroftheindependentdirectorsatanytime,atanyplaceandforanypurpose;and

• performallotherdutiesasmaybeassignedbytheBoardfromtimetotime.


Message from the Independent Lead DirectorIhaveservedasLeadDirectorsinceApril2019andinthatrolealsochairtheindependentNominatingandCorporateGovernanceCommittee.Since2019wehaveaddedtwonewindependentdirectorstotheBoard.In2019,DebraL.Reed-Klagesbecameadirector,bringingvaluablechiefexecutiveofficerexperienceaswellasexpertiseinriskmanagementandenvironmentalsustainability.Inearly2020,RetiredChairmanoftheJointChiefsofStaffGeneralJosephF.Dunford,Jr.joinedourBoardbringingadditionalvaluableinsightofourcorecustomer,includingcustomerexperiencewithourprogramsandtechnologies.TheyhavebothalreadybeentremendousassetstotheBoard.Ensuringthatwecontinuetobenefitfromdiverseperspectivesintheboardroomcontinuestobeanimportantelementofourcorporategovernanceframework.

DanielF.Akerson,IndependentLeadDirector

LeadershipTransition

OneoftheBoard'smostimportantresponsibilitiesissuccessionplanningandchoosingtherightCEOtoleadtheCorporation.AgreatdealofBoardfocusandattentionwentintotheselectionofJamesD.TaicletastheChairman,PresidentandCEOtoleadtheCorporationfollowingMarillynHewson'sdecisiontoretire.IhaveworkedcloselywithJimandMarillynduringthetransitionandwehavereceivedpositivefeedbackfromemployees,investorsandotherkeystakeholdersonthetransition.

BoardResponsetoCOVID-19

During2020,theBoardhasbeenactivelyengagedinoverseeingmanagement'sresponsetoCOVID-19.TheBoardreceivesupdatesatleastmonthlyandithasbeenarecurringdiscussiontopicatBoardmeetings.TheBoardapprovedanincreasetotheCorporation's2020charitablecontributionsbudgetinsupportofCOVID-19efforts.TheAuditCommitteehasbeencloselymonitoringpotentialrisksrelatedtoCOVID-19,includingensuringmanagementhadtheresourcesneededforasuccessfulyear-endaudit,andtheNominatingandCorporateGovernanceCommitteehascontinuedtoreviewtheeffectofCOVID-19onemployeesafetyandhealth.

ContinuedIndependentOversightandEngagement

Eachyear,ourBylawsandCorporateGovernanceGuidelinesmandatethattheindependentmembersoftheBoardelectanindependentdirectortoserveastheLeadDirectorbytheaffirmativevoteofamajorityoftheindependentdirectors,meaningthosewhohavebeendeterminedtobe“independent”forpurposesoftheNewYorkStockExchangelistingstandards.Iamhonoredtohavebeenselectedagaintoserveinthisrolefor2021.IlookforwardtocontinuingtoworkcloselywithourChairman,PresidentandCEOandcontributingtoourBoard’sstrongoversightasLeadDirectorandtoengagementwithstockholders.Iwelcomeyourcomments.StockholdersandotherinterestedpartiesmaycommunicatewithmebyemailatLead.Director@lmco.com.

Board Leadership StructureTheBoardbelievesthatitmustbeindependentandmustprovidestrongandeffectiveoversight.TheBoardalsobelievesthattheindependentBoardmembersshouldhavetheflexibilitytorespondtochangingcircumstancesandchoosetheboardleadershipstructurethatbestfitsthethen-currentsituation.Asaresult,therolesoftheChairmanandtheCEOhavebeensplitfromtimetotimetofacilitateleadershiptransitions,whileatothertimestheroleshavebeencombined.

InconsultationwiththeBoard,onMarch12,2020,Ms.HewsonannouncedherplanstostepdownasPresidentandCEOoftheCorporation,subjecttoapprovaloftheBoard.Ms.HewsonexpressedherwillingnesstoserveasExecutiveChairmanoftheBoardtoassistinthetransition.TheBoardrevieweditsleadershipstructureinconnectionwithMs.Hewson'sannouncementtostepdownasPresidentandCEO.TheBoarddeterminedthatthetransitiontothenewPresidentandCEOwouldbebestaccomplishedbyhavingMs.HewsonserveasExecutiveChairmantoassistinthetransitioneffectiveJune15,2020.ThisresultedinaseparationoftherolesofChairmanandCEOduring2020.Ms.HewsonservedintheExecutiveChairmanroleuntilMarch1,2021,whensheretiredfromtheBoard.

EffectiveMarch1,2021,theindependentdirectorselectedPresidentandCEOJamesD.TaicletasChairman,PresidentandCEO.Asitdoesannually,theBoardofDirectorsreviewedtheCorporation'sleadershipstructure,includingbenchmarkingdataoftheleadershipstructureofotherlargecompaniesandindustrypeersandstockholderproposaltrendsforseparatingtheroles.Atpresent,theBoardbelievesthatthecombinationoftheroles,alongwiththerobustauthoritygiventotheexperiencedindependentLeadDirector,DanAkerson,effectivelymaintainsindependentoversightofmanagement.TheBoardconsistsentirelyofindependentdirectors,otherthanMr.Taiclet,andexercisesastrong,independentoversightfunctionthroughfrequentexecutivesessions,independentBoardcommitteesandhavingastrongindependentLeadDirectorwithclearlydelineatedandcomprehensiveduties.TheBoardbelievesthereisvalueinpresentingasinglefacetoourcustomersthroughthecombinedChairmanandCEOroleandthatthisstructureandhavingtheBoardandmanagementoperateundertheunifiedleadershipofthehighlyexperiencedMr.TaicletbestpositionstheCorporationtosuccessfullyimplementitsstrategy.

Corporate Governance

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Theindependentdirectorswillcontinuetoreviewtheleadershipstructureonanongoingbasis,atleastannually,toprovideeffectiveriskmanagementandtoensurethatitcontinuestomeettheneedsoftheCorporationandsupportsthegenerationofstockholdervalueoverthelong-term.InformationregardingtheCEOtransitionisprovidedunderthecaption"TalentManagementandSuccessionPlanning"onpage24.

Executive SessionsGenerally,eachmeetingagendaoftheBoardandeachcommitteeincludesanexecutivesessionofthenon-managementdirectors.TheGovernanceGuidelinesrequirethatatleastthreeBoardmeetingsperyearwillincludeanexecutivesessionofthenon-managementdirectors.Ineachcase,thesesessionsincludeadiscussionoftheperformanceoftheCEO.TheindependentLeadDirectorpresidesduringtheexecutivesessionsoftheBoard,andwillreporttheresultstotheChairmanandCEOonallrelevantmatters,orinvitetheChairmanandCEOtojointheexecutivesessionforfurtherdiscussion,asappropriate.Ifthegroupofnon-managementdirectorsincludesdirectorswhoarenotindependentdirectors,atleastoneexecutivesessionincludingonlyindependentdirectorswillbescheduledeachyear.Therespectivechairmanofeachcommitteepresidesduringthecommitteeexecutivesessions.

Committees of the Board of DirectorsTheBoardhasfourstandingcommittees:Audit,ClassifiedBusinessandSecurity(CBSCommittee),ManagementDevelopmentandCompensation(CompensationCommittee)andNominatingandCorporateGovernance(GovernanceCommittee).BasedonBoardfeedbackandtherecommendationoftheGovernanceCommittee,effectiveSeptember25,2020,theExecutiveCommittee,whichwasnotbeingused,waseliminated.TheBoardconsideredsurveydatawhichshowedthatfourstandingcommitteesismostprevalentamongourpeercompanies.ChartersforeachcommitteeareavailableontheCorporation’swebsiteatwww.lockheedmartin.com/corporate-governance.Inadditiontothesecommittees,theBoardmayestablishotherstandingorspecialcommitteesasmaybenecessarytocarryoutitsresponsibilities.DescriptionsofeachofthestandingCommitteesaresetforthbelow.

Audit Committee

Members: Thomas J. Falk, Chair David B. Burritt James O. Ellis, Jr.Ilene S. GordonDebra L. Reed-Klages

AllAuditCommitteemembersareindependentwithinthemeaningoftheNYSElistingstandards,applicableSECregulationsandourGovernanceGuidelinesandeachhasaccountingandrelatedfinancialmanagementexpertisesufficienttobeconsideredfinanciallyliteratewithinthemeaningoftheNYSElistingstandards.TheBoardhasdeterminedthatMessrs.BurrittandFalkandMss.GordonandReed-KlagesarequalifiedauditcommitteefinancialexpertswithinthemeaningofapplicableSECregulations.

2020 Focus Areas Meetings in 2020: 8• MonitoringandAssessingPotentialAccountingandFinancialReportingImpactsfromCOVID-19

• EnterpriseRiskManagementand2020AuditPlan

• OversightofCapitalAllocation

Roles and Responsibilities of the Committee

TheAuditCommitteeassiststheBoardinfulfillingitsoversightresponsibilitiesrelatingtothefinancialconditionoftheCorporation,theintegrityofthefinancialstatementsandcompliancewithlegalandregulatoryrequirements.TheAuditCommitteehasoversightoftheCorporation’sinternalauditplanandreviewsrisksandopportunitiestomanagement'slong-termstrategyasidentifiedbytheCorporation'senterpriseriskmanagementprocesses.Itisdirectlyresponsiblefortheappointment,compensation,retention,oversightandterminationoftheCorporation'sindependentauditors,Ernst&YoungLLP(Ernst&Young).TheAuditCommitteealsoreviewstheallocationofresources,theCorporation’sfinancialconditionandcapitalstructureandpoliciesregardingderivatives.TheAuditCommitteemeetsprivatelywithmanagement,theSeniorVicePresident,EthicsandEnterpriseAssurance,andErnst&Young.ThefunctionsoftheAuditCommitteearefurtherdescribedinthe“AuditCommitteeReport”onpage38.



www.lockheedmartin.com/corporate-governance

www.lockheedmartin.com/corporate-governance

Classified Business and Security Committee

Members1:James O. Ellis, Jr., ChairBruce A. CarlsonJoseph F. Dunford, Jr.Jeh C. Johnson

AllmembersoftheCBSCommitteeareindependentwithinthemeaningoftheNYSElistingstandardsandourGovernanceGuidelinesandholdhigh-levelsecurityclearances.

2020 Focus Areas Meetings in 2020: 3• SupplyChainCybersecurityRiskMitigationandTechnicalSolutions

• OversightofRisksRelatedtoClassifiedPrograms

• SecurityofPersonnel,FacilitiesandData(includingclassifiedcybersecuritymatters)


TheCBSCommitteeassiststheBoardinfulfillingitsoversightresponsibilitiesrelatingtotheCorporation’sclassifiedbusinessactivitiesandthesecurityofpersonnel,facilitiesanddata(includingclassifiedcybersecuritymatters).TheCBSCommitteeconsistsofdirectorswhopossesstheappropriatesecurityclearancecredentials,atleastoneofwhommustbeamemberoftheAuditCommittee,noneofwhomareofficersoremployeesoftheCorporationandallofwhomarefreefromanyrelationshipthat,intheopinionoftheBoard,wouldinterferewiththeexerciseofindependentjudgmentasamemberoftheCBSCommittee.

1 Mr.TaicletservedontheCommitteeuntilMarch2020;andMr.DunfordjoinedinFebruary2020.

Management Development and Compensation Committee

Members1:Ilene S. Gordon, ChairThomas J. FalkVicki A. HollubDebra L. Reed-Klages

AllmembersoftheCompensationCommitteeareindependentwithinthemeaningoftheNYSElistingstandards,applicableSECregulationsandourGovernanceGuidelines.

2020 Focus Areas Meetings in 2020: 3• CEOTransitionandOtherLeadershipChanges

• TalentManagementandSuccessionPlanning

• HumanCapitalGovernanceandWorkforceDiversity


TheCompensationCommitteereviewsandapprovesthecorporategoalsandobjectivesrelevanttothecompensationoftheCEOandotherelectedofficers,evaluatestheperformanceoftheCEOand,eitherasacommitteeortogetherwiththeotherindependentmembersoftheBoard,determinesandapprovesthecompensationphilosophyandlevelsfortheCEOandotherexecutiveofficers.TheCompensationCommitteedoesnotdelegateitsresponsibilitieswithrespecttocompensationthatisspecifictotheexecutiveofficers.Forotheremployeesandforbroad-basedcompensationplans,theCompensationCommitteemaydelegateauthoritytotheCEOortheSeniorVicePresident,HumanResources,subjecttocertainannuallimits.

AdditionalinformationregardingtheroleoftheCompensationCommitteeandourcompensationpracticesandproceduresisprovidedunderthecaptions“CompensationCommitteeReport”onpage39,“CompensationDiscussionandAnalysis(CD&A)”beginningonpage40and“OtherCompensationMatters”onpage55.

1 Mr.TaicletservedontheCommitteeuntilMarch2020.


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Nominating and Corporate Governance Committee

Members1:Daniel F. Akerson, Chair David B. Burritt Bruce A. Carlson Joseph F. Dunford, Jr.Vicki A. Hollub Jeh C. Johnson

AllmembersoftheGovernanceCommitteeareindependentwithinthemeaningoftheNYSElistingstandards,applicableSECregulationsandourGovernanceGuidelines.

2020 Focus Areas Meetings in 2020: 4

• OversightofEnvironmental,SocialandGovernanceMatters

• COVID-19EffortsRelatedtoCrisisManagement,BusinessContinuityandEmployeeSafetyandHealth

• RevisionstoCodeofConduct


TheGovernanceCommitteedevelopsandimplementspoliciesandpracticesrelatingtocorporategovernance,includingourGovernanceGuidelines.TheGovernanceCommitteeassiststheBoardbyselectingcandidatestobenominatedtotheBoard,makingrecommendationsconcerningthecompositionofBoardcommitteesandoverseeingtheannualevaluationoftheBoardanditscommittees.

TheGovernanceCommitteereviewsandrecommendstotheBoardthecompensationofdirectors.Ourexecutiveofficersdonotplayaroleindeterminingdirectorpayotherthantogatherpubliclyavailableinformation.

TheGovernanceCommitteeassiststheBoardinfulfillingitsoversighteffortsincorporateresponsibility,corporateculture,humanrights,environmentalstewardship,politicalcontributions,ethicalbusinesspractices,communityoutreach,philanthropy,diversity,inclusionandequalopportunity,sustainability,andemployeesafetyandhealth.TheGovernanceCommitteemonitorscomplianceandrecommendschangestoourCodeofConduct.

1 Mr.DunfordjoinedinFebruary2020.

Board Role and ResponsibilitiesBoard Role in Strategic PlanningTheBoardisinvolvedinstrategicplanningandreviewthroughouttheyear.EverySeptembertheBoardmeetsinahalf-daysessiondedicatedtoadiscussionoftheCorporation’sstrategy,one-yearplanandthree-yearlong-rangeplan.ThePresidentandCEOregularlyreviewsdevelopmentsagainsttheCorporation’sstrategicframeworkatBoardmeetingsandprovidesupdatesbetweenregularlyscheduledsessionsasnecessary.Thisschedulecorrespondstomanagement’sannualschedulefordevelopingthelong-rangeplanandprovidestheBoardwiththeopportunitytoprovideinputwhilethelong-rangeplanisbeingdevelopedandtomonitorprogressontheplan.Inaddition:

• theBoard(ortheappropriatecommittee)reviewstheprogressandchallengestotheCorporation’sstrategyandapprovesspecificinitiatives,includingacquisitionsanddivestituresoveracertainmonetarythreshold;

• theBoard(ortheappropriatecommittee)reviewstrendsidentifiedassignificantrisksandtopicalitemsofstrategicinterestsuchashumancapitalstrategyandcybersecurityonaregularbasis;

• generally,atleastannually,theBoardmeetsataCorporationfacilitywheredirectorscantourtheoperationsandengagedirectlywithemployeesandexperiencefirst-handtheCorporation'sculture;and

• eachbusinesssegmentexecutivevicepresidentpresentsanoperationsreviewtotheBoardandeachbusinesssegmentfinancialofficerpresentsafinancialreviewtotheAuditCommitteeonarotatingbasis.



Enterprise Risk ManagementOurriskmanagementphilosophyistobalanceriskandrewardwithintherisktoleranceofmanagementandtheBoard,takingintoaccounttheCorporation'soperationsandlong-termstrategy.Thisisaccomplishedthroughriskmanagementpractices,ourcorevaluesandourCodeofConduct,eachofwhichreinforcesarisktransparentculture.TheBoardanditscommitteesreceiveriskupdatesthroughouttheyear.ExecutivemanagementprovidesupdatesonrisksmanagedattheEnterpriselevel.Businesssegmentmanagementprovidesupdatesonriskstoindividualbusinesssegmentobjectives.AdditionalinformationregardingtheBoard'sroleinenterpriseriskmanagementisprovidedonpage33.

CybersecurityCybersecurityisincludedintheCorporation’senterpriseriskmanagementprocessandisoverseenbytheBoard.TheBoardreceivesabriefingfromseniorleadershiponcybersecurityandinformationsecuritytwiceayearormorefrequentlyasneeded(eitherorallyorinwriting).TheClassifiedBusinessandSecurityCommitteealsoisbriefedbyseniormanagementonthesecurityofclassifiedcyberdataandinformationandthesecurityofsuppliersandtheglobalsupplychainwithintheCorporation’sclassifiedbusiness.LockheedMartintakesavarietyofprecautionstoprotectoursystemsanddata,includingthatofourcustomersandthirdparties,whichincludesthreatdetectionandcybersecuritymitigationplans.LockheedMartinprovidesannualtrainingforouremployeesontheprotectionofsensitiveinformationandonhowtoidentifyandpreventasuccessful“phishing”attack.Wealsohaveacorporate-widecounterintelligenceandinsiderthreatdetectionprogramtoproactivelyidentifyexternalandinternalthreatsandmitigatethesethreatsinatimelymanner.LockheedMartinmaintainsanenterpriseISO27001certificationwhichundergoesannualsurveillanceauditingandrecertificationeverythreeyears.Wearepreparedtoobtainanindependent,thirdpartyCybersecurityMaturityModelCertification(CMMC),whichisarequirementforcompaniesdoingbusinesswiththeU.S.DepartmentofDefense,assoonastheauditingbodiesareavailable.

Talent Management and Succession PlanningManagementhasestablishedsemi-annualtalentreviews.Duringthesereviews,theexecutiveleadershipteamdiscussessuccessionplansforkeypositionsandidentifiestoptalentfordevelopmentinfutureleadershiproles.OurBoardisactivelyengagedinmanagementsuccessionplanning.CEOsuccessionplanningdiscussionsareledbytheindependentLeadDirectorandtheBoardmembershavedirectaccesstoandinteractionwithmembersofseniormanagementandhighpotentialfutureleadersaspartofthissuccessionplanning.Thisincludesinformalandone-on-onesettingstoenabledirectorstopersonallyassesspotentialcandidatesandcultivatefutureleaders.

CEOTransition.InconsultationwiththeBoard,inMarch2020,Ms.HewsonannouncedherplanstostepdownfromthepositionofPresidentandCEO,subjecttotheapprovalofasuccessorbytheBoard.AfterareviewofthepossiblecandidatespreviouslydiscussedbytheBoardoverthepastseveralyearsandtakingintoaccounttherecommendationofMs.Hewson,theBoard,undertheleadershipoftheindependentLeadDirector,electedJamesD.TaiclettosucceedMs.HewsonasPresidentandChiefExecutiveOfficeroftheCorporation,effectiveJune15,2020.TheBoardalsoappointedMs.HewsontoserveasExecutiveChairmanoftheBoard,effectiveJune15,2020,toensureasmoothanddisciplinedtransition.Mr.TaiclethadbeenaBoardmembersince2018andwasanexperiencedchiefexecutive,GulfWarveteranandmilitarypilot,andtheBoardviewedhimasthebestcandidatetoleadtheCorporation.EffectiveMarch1,2021,Ms.HewsonsteppeddownasExecutiveChairmanandtheBoardelectedMr.TaicletChairman,PresidentandCEO.

COOAppointment.UpontherecommendationofMs.HewsonandtakingintoaccountpriorBoardreviewsofmanagementtalentanddevelopmentopportunities,inMarch2020,theBoardundertheleadershipoftheindependentLeadDirectoralsoelectedFrankA.St.John,whowasservingasExecutiveVicePresident,RotaryandMissionSystems,asChiefOperatingOfficer(COO)oftheCorporationandStephanieC.Hill,whowasservingasSeniorVicePresident,EnterpriseBusinessTransformation,asExecutiveVicePresident,RotaryandMissionSystems.TheBoardagreedthattheseexecutiveshadthepotentialtobestrongandsuccessfulleadersfortheCorporation.TheappointmentswereeffectiveonJune15,2020.

TheBoardofDirectorsmaintainsasuccessionplanfortheCEOandotherkeymembersofmanagementandhasacontingencyplaniftheCEOweretodepartunexpectedly.

TheCorporationhasacorporatepolicyimposingamandatoryretirementageof65forallexecutiveofficersotherthantheCEO.TheCEO’stenureisatthediscretionoftheBoard,whichisfreetoconsiderallrelevantfactors.


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Board Oversight of People StrategyOur People Strategy

HumancapitalisacriticalbusinessassetatLockheedMartin.Duetothespecializednatureofourbusiness,ourperformancedependsonidentifying,attracting,developing,motivating,andretainingahighlyskilledworkforceinmultipleareas,including:engineering,science,manufacturing,informationtechnology,cybersecurity,businessdevelopmentandstrategyandmanagement.

TheBoardofDirectorsisactivelyengagedintheoversightofhumancapitalmanagementandstrategy.Ourhumancapitalmanagementstrategy,whichwerefertoasourpeoplestrategy,istightlyalignedwithourbusinessneedsandtechnologystrategy.Inordertoensurethatweachieveourhumancapitalobjectives,weregularlyconductanemployeeengagementsurveytogaugeemployeesatisfactionandtounderstandtheeffectivenessofouremployeeandcompensationprograms.TheBoardreviewsthesesurveyresults.TheSeniorVicePresident,HumanResources,updatestheBoardontheCorporation’speoplestrategyonanannualbasis.Boardmembersalsoareactivepartnersinthedevelopmentofourworkforce,engagingandspendingtimewithourhigh-potentialleadersatBoardmeetingsandotherevents.

During2020,ourhumancapitaleffortswerefocusedonacceleratingthetransformationofourtechnologyforworkforcemanagementthroughinvestmentsinupgradedsystemsandprocesses,andcontinuingtoincreaseouragilitytomeetthequicklychangingneedsofthebusiness,consideringthechallengesoftheglobalpandemicandsocialandpoliticalunrest.Weuseavarietyofhumancapitalmeasuresinmanagingourbusiness,including:workforcedemographics;diversitymetricswithrespecttorepresentation,attrition,hiring,promotionsandleadership;andtalentmanagementmetricsincludingretentionratesoftoptalentandhiringmetrics.

Westreamlinedthepeoplestrategyin2020tofocusonthreekeypriorities:MaximizeTalent;AdvanceTechnology;andOptimizeCulture.WehavedevelopedascalablestrategythatendurestheunprecedentedpastyearofCOVID-19andsocialunrest.In2021andbeyond,wewillcontinuetoexecuteontheLockheedMartinpeoplestrategyanditsthreestrategicimperativestoacceleratetransformation.

Maximize Talent

Advance Technology

Optimize Culture

• Acquire and Retain Top Diverse Talent at All Levels

• Upskill Technical Talent to Match Strategic Shift To 21st Century Warfare

• Increase Executive Successor Pipeline and Leader Readiness

• Advance University Partnerships and Outreach

• Upgrade Systems to Improve HR Process Efficiency

• Enhance People Analytics and Data Driven Solutions

• Utilize Artificial Intelligence to Transform Hiring Experience

• Leverage Technology to Eliminate Repetitive Tasks

• Strengthen Inclusive Engagement, Diversity and Belonging

• LMForward the Workplace (a multi-faceted initiative for long-term work solutions for 2021 and beyond)

• Drive a Flexible Employee Experience as a Brand Discriminator

• Advance Culture of Collaboration to Drive Business Transformation



Workforce Diversity and Inclusion

AtLockheedMartin,werecognizethatcorporatediversity,includinggender,raceandethnicity,isofimportancetoouremployees,ourinvestors,andourbroaderstakeholders.Diversityandinclusionisnotonlyalegalandsocialimperative,butabusinessimperativethatwebelieveisakeytoourfuturesuccess.Webelievethatbuildingaworkplacewhereeveryvoiceisheardandeveryideaiswelcomethroughfosteringdiversityandinclusion,webuildmoreeffectiveteams,encourageinnovationandcanbetterattractandretaintoptalent,allofwhichmakeusmorecompetitive.

Annually,theBoardmeetstoreviewoursuccessionstrategyandleadershippipelineforkeyroles,includingtheCEO,takingintoaccounttheCorporation’slong-termcorporatestrategy.Morebroadly,theBoardisregularlyinformedonkeytalentindicatorsfortheoverallworkforce,includingperformanceagainstdiversitymetricswithrespecttorepresentation,hiring,promotions,andleadership.Talentmanagementandemployeeengagementmetricsandgoalsareincludedinthestrategicandoperationalperformancemeasuresinmanagement'sannualincentiveprogram.

Wehavefocusedourdiversityandinclusioninitiativesonemployeerecruitment,includinginvestmentsinminorityservinginstitutionsandoutreach,employeetraininganddevelopment,suchaseffortsfocusedonexpandingthediversetalentpipeline,andemployeeengagement,includingthroughparticipationinourBusinessResourceGroups.OurBusinessResourceGroupsarevoluntary,employee-ledgroupsthatfosteradiverseandinclusiveworkplacealignedwithourorganizationalmission,values,goalsandbusinesspractices.Throughtheseandotherfocusedefforts,wehaveimprovedthediversityofouroverallU.S.workforceandwithinleadershippositions,specificallyintherepresentationofwomen,peopleofcolorandpeoplewithdisabilities.

EmployeeProfile(asofDecember31,2020):

Women* People of Color* Veterans* People with Disabilities*

Overall 23% 28% 22% 9%

Executives** 22% 14% 21% 9%

*Basedonemployeeswhoself-identify.IncludesonlyU.S.employeesandexpatriatesexceptforWomen,whichalsoincludeslocalcountrynationals.Excludescasualworkers,interns/co-opsandemployeesofcertainsubsidiariesandjointventures.

**Executiveisdefinedasdirector-level(onelevelbelowvicepresident)orhigher.

Inadditiontothesediversitymetrics,wealsointendtomakeourConsolidatedEEO-1Reportinformationavailableonourwebsitebeginningwith2020data,whichweexpecttobeavailablelaterin2021.Our2020achievementsinclude:

Recruiting Top Talent: Fostering an Inclusive Workplace:

Supporting STEM Education:

•Improvedthediversityoftheworkforce,specificallyintherepresentationofwomenandPeopleofColor,throughfocusedhiringandpartnershipswithMinorityServingInstitutions(MSIs)andexternalorganizations

•Ranked#1TopSupportersofHistoricallyBlackCollege&University(HBCU)EngineeringInstitutionsfor6thconsecutiveyear

•Ranked#2Top50EmployersinWomenEngineerMagazine

•IncreasedemployeeparticipationinCorporation-sponsoreddiversityandinclusioninitiatives,includingBusinessResourceGroups,andLeadershipForums

•RecognizedasaBestPlacetoWorkforLGBTEqualityafterscoring100%ontheHumanRightsCampaign’sCorporateEqualityIndexfor11thconsecutiveyear

•RecognizedbyDisability:INwithascoreof100ontheDisabilityEqualityIndex

•$1.182millioncontributedtoMSIstosupportstudentdevelopment,research,summerbridgeprograms,STEM,pre-collegeprogramsandcurriculumdevelopment

•Invested$1.391millionineducationequalityprograms,includingtheNationalSocietyofBlackEngineers,AdvancingMinoritiesInterestsinEngineering,GirlsInc,BlackEngineeroftheYearAwards,RonBrownFundandINROADS


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Human RightsOur Human Rights Policy and Principles:

AsoutlinedinourGoodCorporateCitizenshipandRespectforHumanRightsPolicy,atLockheedMartin,webelievethatrespectforhumanrightsisanessentialelementofbeingagoodcorporatecitizen.OurcommitmenttorespectinghumanrightsunderliesSettingtheStandard,theLockheedMartinCodeofEthicsandBusinessConduct,andourstatedvalues—DoWhat’sRight,RespectOthers,andPerformwithExcellence.Thiscommitmentappliestoallemployees,theBoard,andotherswhorepresentoractforus.OurHumanRightsPolicyincludesthefollowingprinciples:• Supporthumanrightsbytreatingemployeeswithrespect,

promotingfairemploymentpractices,providingfairandcompetitivewagesandprohibitingharassment,bullying,discrimination,useofchildorforcedlaborandtraffickinginpersonsforanypurpose.

• Upholdthelawsapplyingtoourbusiness,whereverweoperate.

• Seektominimizethenegativeconsequencesofourbusinessactivitiesanddecisionsonourstakeholders,includingbyminimizingharmtotheenvironmentandconservingnaturalresources,promotingworkplacesafety,ensuringaccuracyandtransparencyinourcommunicationsanddeliveringhigh-qualityproductsandservices.

• Contributetoeconomicandsocialwell-beingbyinvestingourresourcesininnovativeproductsandservices,supportingcharitable,philanthropic,andsocialcauses,participatingappropriatelyinpoliticalaffairsandpublicdebatetoadvanceandadvocateourvalues(includingengagingourcustomerstobalanceappropriatelythesaleanduseofourtechnologyagainstnationalandinternationalinterests)andpromotingeffortstostopcorruptpracticesthatinterferewithmarkets,inhibiteconomicdevelopmentandlimitsustainablefutures.

Board Oversight of Human Rights:

TheBoard,throughtheGovernanceCommittee,reviewsandmonitorstheCorporation’spoliciesandproceduresregardingcorporateresponsibilityandhumanrightsandourcompliancewithrelatedlawsandregulations.BusinessIntegrityisoneofthecoreissuesinourSustainabilityManagementPlanandtheGovernanceCommitteereceivesregularreportsfromourSeniorVicePresident,EthicsandEnterpriseAssuranceonhowweareimplementingourSustainabilityManagementPlan,whichincludesgoalswithrespecttohumanrights.

Our Human Rights Due Diligence Approach:

Ourhumanrightsduediligenceprocessesareembeddedwithinouroperatinganddecision-makingpracticesandproceduresanddonotexistasastand-aloneprocedure.• Wehaverobustprocedurestoensurethatnewcontracts

meetourstandardsandvalues.Prospectivecommitmentsarereviewedtoensurethattheyfitourstrategicdirection,willupholdourreputation,andarestructuredforsuccessfultechnicalandfinancialperformance.Eachbusinessareahasimplementedproposalreviewandapprovalproceduresthatevaluaterisks,andwhichcanresultinadecisionnottobidatall.Proposalsthatinvolvethepursuitofanopportunityrelatedtocertaintypesofproductsorprogramsthatcarryincreasedreputationalrisksrequirereviewofamulti-disciplinarycorporatereviewcommitteethatischairedbyourCFOandCOOandincludesourSeniorVicePresident,EthicsandEnterpriseAssurance,whoreportstotheGovernanceCommittee.In2020,wealsoformedaWeaponsReviewCouncilatourMissilesandFireControlbusinessarea.ThisCouncilthoroughlyreviewsproductsandactivitiesthatmaypotentiallyraisehumanrightsissues.

• Weconductrisk-basedanti-corruptionduediligence,whichmaybesubjecttoaudits,beforeenteringintorelationshipswiththirdparties,includingconsultants.WerequireinternationalconsultantstoundergotrainingonourCodeofConductandassociatedbusinessconductandanti-corruptionpolicies.Wewillwalkawayfrombusinessratherthanriskviolatinganti-corruptionlawsandourcorporatevalues.

• OurrobusttradecomplianceprogramisdesignedtoensurethatsalesofourproductsareconductedinaccordancewithallinternationaltradelawsandregulationsoftheU.S.andeachforeigncountryinwhichweoperate.

• Weprovideoversightofourstandardsandcontrolsbyprovidingmandatorytrainingtoouremployeesandtrustedgrievancemechanisms,providingresourcesandsupporttooursuppliers,andaligningtheinterestsofemployeesandsupplierswithinestablishedframeworks.Formalandinformalstakeholderengagementisanintegralpartofourbusiness.Wecontinuetoencourageouremployees,suppliersandthegeneralpublictoreportpotentialhumanrightsviolationsthroughouranonymousethicshelpline.Wealsocommunicateourexpectationstosuppliersthattheyimplementsupplychainduediligenceprocessesrelatedtoconflictmineralsintheirproducts.

Responsible SalesAllofoursales–domestic,international,commercialandgovernmental–aresubjecttoourCodeofEthicsandBusinessConductandallapplicableU.S.andforeignlawsandregulations,includingthoserelatedtoanti-corruption,import-exportcontrol,taxation,repatriationofearnings,exchangecontrolsandtheanti-boycottprovisionsoftheU.S.ExportControlsReformActof2018.Wehaveprocedurestomitigatecorruptionrisksinallinternationalanddomesticdealings.



Stockholder Engagement and ResponsivenessTheBoardofDirectorsplacesgreatimportanceonregularlycommunicatingwithourstockholderstobetterunderstandtheirviewpointsandinformdiscussionsintheboardroom.TheGovernanceCommitteeoverseesourstockholderengagementeffortsonbehalfoftheBoard.Werecognizethevalueofbuildinginformedandmeaningfulrelationshipswithourinvestorsthatpromoteincreasedtransparencyandaccountability.OurGovernanceGuidelinesoutlineourstockholderengagementprogram.

AccountabilitytoourstockholderscontinuestobeanimportantcomponentoftheCorporation’ssuccess.Atthe2020annualmeeting,anadvisory,non-bindingstockholderproposaltoadopttherightforstockholderstoactbywrittenconsentreceivedsupportofmorethan47percentofthevotescast.Whilethemajorityofourstockholdersrejectedtheproposal(forthesixthtimeinthepast10years,allbythesamestockholderproponent),theBoardcarefullyconsideredthevotingresultsandcontinuedtoseekinvestorfeedbackaswehavedoneinprioryearsandcontinuestobelievestockholdershaveaneffectivesuiteofrightstoexpresstheirviews,effectchangebetweenannualmeetingsandensureBoardaccountability(seetheBoardofDirectorsStatementinOppositiontoProposal4onpage82).

Ourintegratedinvestoroutreachteam,ledbyourCorporateSecretary'sofficeandrepresentativesfromSustainabilityandHumanResources,engagesproactivelywithourstockholdersandotherkeystakeholders,maintainingayear-roundgovernancescheduleasshownbelow.Stockholders'viewsarecommunicatedtotheBoardthroughouttheyearandareinstrumentalinthedevelopmentofourgovernance,compensationandsustainabilitypoliciesandinformourbusinessstrategy.Inparticular,theBoardrecognizestheimportanceofESGtopicstoourstockholderbase,andwillcontinuetoseekstockholderinputonarangeofESGissuesandpracticesinfurtheranceofenhancinglong-termstockholdervalue.

Belowisasummaryofthefeedbackwereceivedduring2020off-seasonengagements:

• PositivefeedbackontheCorporation'sresponsetoCOVID-19toprotectthewell-beingofouremployeesandsupportforourcommunities,suppliersandpartners;

• ContinuedfocusonBoardrefreshmentandappreciationofdiversityofethnicbackground,gender,andexperiencesaswellastheimportanceofmaintainingalignmentofdirectors'skillsetswithourlong-termstrategy;

• Continuedinterestinhowwedetermineoursustainabilitypriorities,includingclimatechangerisksandmeasureprogress;

• Understandingourpeoplestrategy,approachtohumancapitalmanagementandourworkforcediversityefforts;

• Continuedinterestinhowsustainabilityanddiversitygoalsarelinkedtoourannualincentiveprogramwithpre-setmetricsandgoals;and

• DiscussionofCEOtransitionandsuccessionplanning.

TheseinvestorandstakeholderdiscussionsyieldedvaluablefeedbackthatwasincorporatedintotheBoard'sdeliberations.

Stockholder Engagement Cycle

Year-Round Engagement with Stockholders

• Solicitfeedbackongovernancebestpracticesandtrends,Boardcompositionandrefreshment,executivecompensation,humancapitalmanagement,ESGmattersandothertopicsofinteresttostockholders

• Discussstockholderproposalswithproponents,ifany

• Respondtoinvestorinquiriesandrequestsforinformationorengagement

Annual Meeting of Stockholders

• PublishAnnualReport,ProxyStatementandSustainabilityReport

• SpecificengagementswithstockholdersaboutthevotingmatterstobeaddressedattheannualmeetinginApril

• Receiveandpublishvotingresultsformanagementandstockholderproposals

Board Response

• Boardresponds,asappropriate,withcontinueddiscussionswithstockholdersandenhancementstopolicies,practicesanddisclosures

• Boardusesstockholderfeedbacktoenhanceourdisclosures,governancepracticesandcompensationprograms

Evaluate Annual Meeting Results

• Discussandevaluatevotingresultsfromannualmeetingofstockholders

• StockholderinputinformsourBoard’songoingprocessofcontinuallyenhancinggovernanceandotherpractices


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Board Policies and ProcessesCorporate Governance GuidelinesTheBoardhasadoptedGovernanceGuidelinesthatdescribetheframeworkwithinwhichtheBoardanditscommitteesoverseethegovernanceoftheCorporation.ThecurrentGovernanceGuidelinesareavailableontheCorporation’swebsiteatwww.lockheedmartin.com/corporate-governance.

TheGovernanceCommitteeregularlyassessesourgovernancepracticesconsideringemergingtrendsandpracticesandimplementsbestgovernancepracticesthatitbelievesenhancetheoperationandeffectivenessoftheBoard.

OurGovernanceGuidelinescoverawiderangeofsubjects,including:

• TheroleoftheBoardanddirectorresponsibilities;

• TheroleandresponsibilitiesoftheindependentLeadDirector;

• ApplicationofourCodeofEthicsandBusinessConduct(theCodeofConduct)totheBoard;

• Directornominationproceduresandqualifications;

• Directorindependencestandards;

• Directoroverboardinglimits;

• Policiesforthereview,approvalandratificationofrelatedpersontransactions;

• Directororientationandcontinuingeducation;

• ReviewbytheGovernanceCommitteeofanychangeinjobresponsibilitiesofdirectors;

• ProceduresforannualperformanceevaluationsoftheBoardanditscommittees;

• Directorstockownershipguidelines;

• Clawbackpolicyforexecutiveincentivecompensation;

• PolicyprohibitinghedgingandpledgingofCorporationstock;

• Majorityvotingfortheelectionofdirectorsandresignationproceduresfordirectorswhofailtoreceiveamajorityvote;

• Processfordirectorcompensationreview,specificallyuseofcompetitivedataandinputfromindependentcompensationconsultant;and

• Stockholderengagementprogram;ourindependentLeadDirectorwillconsiderrequeststospeaktoinvestorsandwilldesignate(inconsultationwiththeSeniorVicePresident,GeneralCounselandCorporateSecretary)adirectortoengagewiththerequestinginvestors,ifappropriate.

Director Overboarding PolicyTheBoardrecognizesthatitsmembersbenefitfromserviceontheboardsofothercompaniesanditencouragessuchservice.TheBoardalsobelieves,however,thatitiscriticalthatdirectorsareabletodedicatesufficienttimetotheirserviceontheCorporation’sBoard.Therefore,theGovernanceGuidelinesprovidethat,withoutobtainingtheapprovaloftheGovernanceCommittee:

Directors Adirectormaynotserveontheboardsofmorethanfourotherpubliccompanies.

Public Company CEO or Equivalent

ActiveCEOsorequivalentmaynotserveontheboardsofmorethantwootherpubliccompanies.

Audit Committee AuditCommitteemembersmaynotserveonmorethantwootherpubliccompanyauditcommittees.

Compensation Committee CompensationCommitteemembersmaynotserveonmorethanthreeotherpubliccompanycompensationcommittees.

DirectorsmustnotifytheCEO,independentLeadDirectorandSeniorVicePresident,GeneralCounselandCorporateSecretarybeforeacceptinganinvitationtoserveontheboardofanyotherpubliccompany.TheGovernanceCommitteereviewsanddetermineswhetherthepositionwouldaffectthedirector’sabilitytoserveontheCorporation’sBoard.



Director IndependenceAllofourdirectorsareindependentunderapplicableNYSElistingstandards,exceptMr.Taiclet.UndertheNYSElistingstandardsandourGovernanceGuidelines,adirectorisnotindependentifthedirectorhasadirectorindirectmaterialrelationshipwiththeCorporation.TheGovernanceCommitteeannuallyreviewstheindependenceofalldirectorsandreportsitsfindingstothefullBoard.Toassistinthisreview,theBoardhasadopteddirectorindependenceguidelinesthatareincludedinourGovernanceGuidelines,whichareavailableontheCorporation’swebsiteatwww.lockheedmartin.com/corporate-governance.

OurdirectorindependenceguidelinessetforthcertainrelationshipsbetweentheCorporationanddirectorsandtheirimmediatefamilymembersoraffiliatedentities,whichtheBoard,initsjudgment,hasdeemedtobematerialorimmaterialforpurposesofassessingadirector’sindependence.IntheeventadirectorhasarelationshipwiththeCorporationthatisnotaddressedintheindependenceguidelines,theindependentmembersoftheBoarddeterminewhethertherelationshipismaterial.

TheBoardhasdeterminedthatthefollowingdirectorsareindependent:DanielF.Akerson,DavidB.Burritt,BruceA.Carlson,JosephF.Dunford,Jr.,JamesO.Ellis,Jr.,ThomasJ.Falk,IleneS.Gordon,VickiA.Hollub,JehC.Johnson,andDebraL.Reed-Klages.TheBoarddeterminedthatJamesD.Taiclet,whowaselectedPresidentandCEOeffectiveJune15,2020andChairmaneffectiveMarch1,2021,wasindependentpriortohiselectionasPresidentandCEObutasanemployeeheisnolongerindependentundertheNYSElistingstandardsorourGovernanceGuidelines.Mr.TaicletstoppedservingontheCBSandCompensationCommitteesatthetimeoftheBoard'sdecisiontoelecthimPresidentandCEOinMarch2020.FormerChairman,PresidentandCEOMarillynA.HewsonwasalsodeterminedbytheBoardnottobeindependentwhilesheservedontheBoard.Indeterminingthateachofthenon-managementdirectorsisindependent,theBoardconsideredtherelationshipsdescribedunder“CertainRelationshipsandRelatedPersonTransactionsofDirectors,ExecutiveOfficersand5PercentStockholders,”onpage31,eachofwhichweredeterminedtobeimmaterialtoeachindividual’sindependence.

TheGovernanceCommitteeandBoardconsideredthattheCorporation,intheordinarycourseofbusiness,purchasesproductsandservicesfrom,orsellsproductsandservicesto,companiesorsubsidiariesorparentsofcompaniesatwhichsomeofourdirectors(ortheirimmediatefamilymembers)areorhavebeendirectorsorofficersandtootherinstitutionswithwhichsomeoftheseindividualshaveorhavehadrelationships.Theserelationshipsincluded:Mr.Akerson(CommScopeHoldingCompany,Inc.andNorthropGrummanCorporation(familymember’semployer));Mr.Carlson(BenchmarkElectronicsInc.,theCharlesStarkDraperLaboratoryandUtahStateSpaceDynamicsLaboratory);Mr.Dunford(K&LGatesLLP(familymember’semployer));Mr.Ellis(BlueOrigin,LLC(familymember’semployer),DominionEnergyInc.,theEconomistGroup(familymember’semployer)andStanfordUniversity(fellowatHooverInstitutionandfamilymember’semployer));Ms.Gordon(TheConferenceBoardandInternationalPaperCompany);Mr.Johnson(KANTARLLC(familymember’semployer));andMs.Reed-Klages(TheBoeingCompany(familymember’semployer),CaterpillarInc.andtheUniversityofSouthernCalifornia).Indeterminingthattheserelationshipsdidnotaffecttheindependenceofthosedirectors,theBoardconsideredthatnoneofthedirectorshadanydirectorindirectmaterialinterestin,orreceivedanyspecialcompensationinconnectionwith,theCorporation’sbusinessrelationshipswiththoseentities.Inadditiontotheirconsiderationoftheseordinarycourseofbusinesstransactions,theGovernanceCommitteeandtheBoardrelieduponthedirectorindependenceguidelinesincludedinourGovernanceGuidelinestoconcludethatcontributionstoatax-exemptorganizationbytheCorporationdidnotcreateanydirectorindirectmaterialinterestforthepurposeofassessingdirectorindependence.

TheGovernanceCommitteealsoconcludedthatallmembersofeachoftheAuditCommittee,theCompensationCommitteeandtheGovernanceCommitteeareindependentwithinthemeaningofourGovernanceGuidelinesandNYSElistingstandards,includingtheadditionalindependencerequirementsapplicabletomembersoftheAuditCommitteeandCompensationCommittee.

Related Person Transaction PolicyTheBoardhasapprovedawrittenpolicyandproceduresforthereview,approvalandratificationoftransactionsamongtheCorporationanditsdirectors,executiveofficersandtheirrelatedinterests.AcopyofthepolicyisavailableontheCorporation’swebsiteatwww.lockheedmartin.com/corporate-governance.Underthepolicy,allrelatedpersontransactions(asdefinedinthepolicy)aretobereviewedbytheGovernanceCommittee.TheGovernanceCommitteemayapproveorratifyrelatedpersontransactionsatitsdiscretionifdeemedfairandreasonabletotheCorporation.ThismayincludesituationswheretheCorporationprovidesproductsorservicestorelatedpersonsonanarm’slengthbasisontermscomparabletothoseprovidedtounrelatedthirdparties.Anydirectorwhoparticipatesinoristhesubjectofanexistingorpotentialrelatedpersontransactionmaynotparticipateinthedecision-makingprocessoftheGovernanceCommitteewithrespecttothattransaction.


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Underthepolicy,andconsistentwithapplicableSECregulationsandNYSElistingstandards,arelatedpersontransactionisanytransactioninwhichtheCorporationwas,isorwillbeaparticipant,wheretheamountinvolvedexceeds$120,000,andinwhicharelatedpersonhad,has,orwillhaveadirectorindirectmaterialinterest.Arelatedpersonincludesanydirectorordirector-nominee,anyexecutiveofficeroftheCorporation,anypersonwhoisknowntobethebeneficialownerofmorethanfivepercentofanyclassoftheCorporation’svotingsecurities,oranimmediatefamilymemberofanypersondescribedabove.

Ourpolicyrequireseachdirectorandexecutiveofficertocompleteanannualquestionnairetoidentifyhisorherrelatedinterestsandpersons,andtonotifytheCorporationofchangesinthatinformation.Basedonthatinformation,theCorporationmaintainsamasterlistofrelatedpersonsforpurposesoftrackingandreportingrelatedpersontransactions.

Becauseitmaynotbepossibleorpracticaltopre-approveallrelatedpersontransactions,thepolicycontemplatesthattheGovernanceCommitteemayratifytransactionsaftertheycommenceorpre-approvecategoriesoftransactionsorrelationships.IftheGovernanceCommitteedeclinestoapproveorratifyatransaction,therelatedpersontransactionisreferredtomanagementtomakearecommendationtotheGovernanceCommitteeconcerningwhetherthetransactionshouldbeterminatedoramendedinamannerthatisacceptabletotheGovernanceCommittee.

Certain Relationships and Related Person Transactions of Directors, Executive Officers and 5 Percent StockholdersThefollowingtransactionsorrelationshipsareconsideredtobe“relatedperson”transactionsunderourcorporatepolicyandapplicableSECregulationsandNYSElistingstandards.Wecurrentlyemployapproximately114,000employeesandhaveanactiverecruitmentprogramforsolicitingjobapplicationsfromqualifiedcandidates.Weseektohirethemostqualifiedcandidatesandconsequentlydonotprecludetheemploymentoffamilymembersofcurrentdirectorsorexecutiveofficers.WilliamJ.Drennen,III,thebrother-in-lawofourchiefaccountingofficer,isemployedbytheCorporationasaseniorstaffsystemsengineer.Mr.Drennen’s2020basesalarywas$169,478andhereceivedanannualcashincentiveawardof$13,558.Hisbasesalarywasincreasedto$174,562for2021andheiseligibletoearnanincentiveawardapplicabletoemployeesathislevel.BruceCarlson'sson,Dr.ScottCarlson,isemployedbytheCorporationasaseniorstaffaeronauticalengineer.Dr.Carlson's2020basesalarywas$148,026andhereceivedanannualcashincentiveawardof$11,842.Hisbasesalarywasincreasedto$152,467for2021andhemaybeeligibletoearnanincentiveawardapplicabletoemployeesathislevel.Mr.DrennenandDr.Carlsonmayparticipateinotheremployeebenefitplansandarrangementsthatgenerallyaremadeavailabletootheremployeesatthesamelevel(includinghealth,welfare,vacation,andretirementplans).TheirrespectivecompensationwasestablishedinaccordancewiththeCorporation’semploymentandcompensationpracticesapplicabletoemployeeswithequivalentqualifications,experience,andresponsibilitiesandtheBoardandexecutiveofficersoftheCorporationdidnothaveanydirectinvolvementinsettingtheirindividualcompensation.NeitherMr.DrennennorDr.CarlsonservedasanexecutiveofficeroftheCorporationduring2020.

Fromtimetotime,theCorporationhaspurchasedservicesintheordinarycourseofbusinessfromfinancialinstitutionsthatbeneficiallyownfivepercentormoreofourcommonstock.In2020,theCorporationpaidapproximately$10,006,174toStateStreetCorporationanditsaffiliates(includingStateStreetBankandTrustCompany)(collectively,StateStreet)forinvestmentmanagement,custodial,benefitplanadministrationandcreditfacilityfees;approximately$1,061,953toBlackRock,Inc.anditsaffiliatesforinvestmentmanagementfees;approximately$983,803toCapitalGuardian,anaffiliateofCapitalWorldInvestors,forinvestmentmanagementfees;andapproximately$277,137toTheVanguardGroup,Inc.,forinvestmentmanagementfees.AportionofthefeesincludedintheamountspaidtoStateStreet,BlackRock,Inc.,CapitalGuardianandTheVanguardGroupareestimatedbasedonapercentageofnetassetvalueundermanagement.

Accountability to StockholdersMajority Voting Policy for Director ElectionsTheCorporation’sCharterandBylawsprovideforsimplemajorityvoting.PursuanttotheGovernanceGuidelines,inanyuncontestedelectionofdirectors,anyincumbentdirectorwhoreceivesmorevotes“AGAINST”thanvotes“FOR”isrequiredtoofferhisorherresignationforBoardconsideration.



Uponreceiptofaresignationofadirectortenderedasaresultofafailedstockholdervote,theGovernanceCommitteewillmakearecommendationtotheBoardastowhethertoacceptorrejecttheresignation,orwhetherotheractionisrecommended.Inconsideringthetenderedresignation,theBoardwillconsidertheGovernanceCommittee’srecommendationaswellasanyotherfactorsitdeemsrelevant,whichmayinclude:

• thequalificationsofthedirectorwhoseresignationhasbeentendered;

• thedirector’spastandexpectedfuturecontributionstotheCorporation;

• theoverallcompositionoftheBoardanditscommittees;

• whetheracceptingthetenderedresignationwouldcausetheCorporationtofailtomeetanyapplicableruleorregulation(includingNYSElistingstandardsandthefederalsecuritieslaws);and

• thepercentageofoutstandingsharesrepresentedbythevotescastattheannualmeeting.

TheBoardwillactonatenderedresignationwithin90daysfollowingcertificationofthestockholdervotefortheannualmeetingandwillpromptlydiscloseitsdecisionandrationaleastowhethertoaccepttheresignation(orthereasonsforrejectingtheresignation,ifapplicable)inapressrelease,inafilingwiththeSEC,orbyotherpublicannouncement,includingapostingontheCorporation’swebsite.

Ifadirector’sresignationisacceptedbytheBoard,orifanomineefordirectorwhoisnotanincumbentdirectorisnotelected,theBoardmayfilltheresultingvacancyormaydecreasethesizeoftheBoardpursuanttotheCorporation’sBylaws.TheBoardmaynotfillanyvacancysocreatedwithadirectorwhowasnominatedbutnotelectedattheannualmeetingbythevoterequiredundertheCorporation’sBylaws.

Stockholder Right to Amend BylawsFollowingadialoguewithmanyofourlargestinvestorsandadeliberativereviewoftheissue,theBoardproactivelychangedtheBylawsinDecember2017togivetheCorporation’sstockholderstherighttoamendtheBylaws.TheauthorityofthestockholdersandtheBoardtoamendtheBylawsissubjecttotheprovisionsoftheCorporation’sCharterandapplicablestatutes.OurBylawscanbefoundontheCorporation’swebsiteatwww.lockheedmartin.com/corporate-governance.

Proxy AccessOurBylawspermitastockholderoragroupofupto20stockholderswhotogetherhaveownedatleastthreepercentoftheCorporation’soutstandingcommonstockcontinuouslyforthreeyearstonominateforelectionbytheCorporation’sstockholdersandincludeintheCorporation’sproxysolicitationmaterialsforitsannualmeetinguptothegreateroftwodirectorsor20percentofthenumberofdirectorsinofficeatthetimeoftheproxyaccessdeadlinedescribedonpage91.

Stockholder Right to Call Special MeetingAnystockholderwhoindividuallyowns10percent,orstockholderswhointheaggregateown25percent,oftheoutstandingcommonstockmaydemandthecallingofaspecialmeetingtoconsideranybusinessproperlybroughtbeforethestockholders.OurBylawsdonotrestrictthetimingofarequestforaspecialmeeting.TheonlysubjectmatterrestrictionisthattheCorporationisnotrequiredtocallaspecialmeetingtoconsideramatterthatissubstantiallythesameasamattervotedonataspecialmeetingwithinthepreceding12monthsunlessrequestedbystockholdersentitledtocastamajorityofthevotesatthespecialmeeting.

No Poison PillTheCorporationdoesnothaveaStockholderRightsPlan,otherwiseknownasa“PoisonPill.”ThroughourGovernanceGuidelines,theBoardhascommunicatedthatithasnointentionofadoptingoneatthistimeandifitweretoadoptaStockholderRightsPlan,theBoardwouldseekstockholderratificationwithin12monthsofthedateofadoption.


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Enterprise Risk and SustainabilityAsaleaderindevelopinganddeliveringinnovativeengineeringsolutions,LockheedMartinhelpstoenablethegrowth,safety,andresiliencyofcommunitiesandeconomiesaroundtheworld.ThecoresustainabilityissueswefocusonandthecorrespondingactionswetakearedesignedtoaddresssomeofthemostpressingESGissuesfacingsocietytodayandinthefuture.

Tobuildintegratedassurance,enterpriseriskandsustainabilityaremanagedunderonedepartmentandmutuallyreinforcedthroughthefollowingprocesses:

• Risk Identification:WemonitoradynamicriskuniversethatincludesESGtopicsprevalentinvoluntaryframeworks,mandatoryregulations,andinternallyidentifiedsources.

• Risk Assessment:Weprioritizeandevaluateassumptionsfromadiversesetofrisktopicsthatarerelevanttostrategicandoperationalobjectives.Thisincludesexaminingenvironmentalandsocialfactorsapplicabletorisktopicsinourbusiness.

• Risk Controls and Mitigation:ThroughtheRiskAuditStrategyBoard(aperiodic,rigorousexaminationoftheintersectionbetweenourEnterpriseRiskmatrixandourinternalauditplan)westrivetomitigateriskrelatedtoseveralESGfactors,andwetrack,measureandreportourperformanceforgreatertransparency.Thisprocessalsoinformshowweevaluatetheeffectivenessofcontrolsforriskelementsidentifiedthroughourenterpriseriskassessments,corporatepolicies,andinternalaudits.

Enterprise Risk Management HighlightsAprominentoversightresponsibilityoftheBoardconcernsthemanagementofcorporaterisk-takingtoachievestrategicobjectivesandmonitoringofriskmitigationeffectiveness.TheAuditCommitteereviewsthestateofenterpriseriskgovernance,aswellastheassessmentsofrisksthatmayimpacttheCorporation’sabilitytoachievestrategicbusinessobjectives.TheAuditCommitteealsoreviewsriskdisclosuresandreportingandmanagementevaluationsofriskmitigationperformance.OtherBoardcommitteesalsosupervisemanagement'sexecutionofadditionalsubject-specificrisksrelevanttotheirfunction’scompliancewithlawsandregulations.Examplesofthisarecybersecurityandethicsandbusinessconduct.

Risk Governance

Board Committee Risk Mitigation Purview

Audit Financialandcompliancerisksandriskidentificationprocess;risksrelatedtobusinessstrategyandidentifiedenterpriserisk

Classified Business and Security

Classifiedprogramsandsecurityofpersonnel,facilitiesanddata-relatedrisksincludingclassifiedcybersecurity

Nominating and Corporate Governance

Boardcomposition,corporategovernance,employeesafetyandhealth,ethicalconduct,humanrights,corporateculture,humancapitalandenvironmentalrisks

Management Development and Compensation

Talent,workforceandincentivecompensationrisks

OurenterpriseriskmanagementprocessinvolvesprovidingtheBoardwithregular,periodicreportson:

• AcleargovernancestructureguidingourriskmanagementprocessacrosstheCorporation;• ThecategoriesofriskstheCorporationfaces,includingsignificantdriversposingpotentialimpactstomeetingstrategicobjectives

orcompliancestandards;• Aclearframeworkforaccountabilitythatillustratesmitigatingmeasuresandactionplans,andhowtheCEOandtheexecutive

leadershipteamareinvolvedinreviewingandexecutingsuchactivities;• Thewaysinwhichrisksaremeasuredonanenterprisebasis,thesettingofaggregateandsubject-specificriskindicators,and

relatedpoliciesandproceduresinplacetocontrolrisks;and• Theanalysisunderpinningtheprioritizationofkeyrisksandthetoolsforriskobservationtoensurethatneworshiftingrisksare

readilyidentifiedandaddressedbymanagement.ThisincludesunderstandingrisksinherentintheCorporation’sstrategicplans,risksarisingfromthecompetitivelandscapeandthepotentialfortechnologyandotherESGdevelopmentstoimpactprofitabilityandprospectsforsustainable,long-termvaluecreation.


Beyond 2020 Sustainability Priorities Asdescribedonpage10,ourcoresustainabilityissuesrepresentstakeholderprioritiesanddriversoflong-termvaluecreation.Sincethegoalsassociatedwiththesecoreissuescametoacloseattheendof2020,wehavereviewedandupdatedoursustainabilitystrategy,usingwhatwehavelearnedwhiledeliveringonourSustainabilityManagementPlanobjectivesthrough2020.Ourupdatedsustainabilitypriorities,previewedhere,reflectthestakeholderfeedbackwe’vereceived,internalandexternaltrends,andthecontinuedevolutionofourbusinesstocreatevaluewellintothefuture.Weultimatelyidentifiedfoursustainabilityprioritiesconsistingof14coreissues(asoutlinedbelow)forournextSustainabilityManagementPlanthatwillguideusfrom2021to2025.

Enterprise Risk and Sustainability

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Advancing Resource Stewardship

• CounterfeitPartsPrevention• EnergyManagement• TotalCostofOwnership• HazardousChemicalsandMaterials• ResourceandSubstanceSupplyVulnerability

Elevating Digital Responsibility• DataPrivacyandProtection• ArtificialIntelligence• IPRights

Fostering Workforce Resiliency• WorkplaceSafety• InclusionandEquity• HarassmentFreeWorkplace

Modeling Business Integrity• Anti-BriberyandCorruption• EthicalBusinessPractices• SafeProducts

Sustainability HighlightsLockheedMartin'scommitmenttoaddressingbusiness-relatedclimatechangeriskswhiledeliveringstockholdervalueisillustratedbyouractions,progress,andtheassociatedrecognitionwehavereceived.In2020,LockheedMartin:

• ReleaseditsninthannualSustainabilityReportinApril

• PublisheditsfirstSustainabilityAccountingStandardsBoard(SASB)report

• PublisheditsfirstTaskForceOnClimate-relatedFinancialDisclosures(TCFD)report

• Receivedan“A”CDPClimateChangescoreandmadeCDP's2020ClimateAList

• WasnamedasanindustryleaderbyForbesandJUSTCapitalwithintheJUST100,representingAmerica’smostJUSTCompanies

• Earned,astheonlyNorthAmericanprimedefensecontractortodoso,arankingontheDowJonesSustainabilityWorldIndexbasedonbest-in-classsustainabilitypractices.ThisisLockheedMartin'sseventhconsecutiveyearontheDowJonesSustainabilityWorldIndex,anditseighthconsecutiveyearontheNorthAmericanIndex

• ReceivedtheUnitedStatesEnvironmentalProtectionAgency’sEnergyStarPartneroftheYearAward

• Achieved$4billioninannualproductsaleswithdirect,measurablebenefitstoenergyandadvancedinfrastructureresiliencyandmorethan$700millionincumulativecorporatecostandsupplychainefficienciessince2015.

Climate & Environmental StewardshipAtLockheedMartin,climaterisksandopportunitiesimpactourlong-termresiliencyasaleaderinglobalsecurityandaerospace.Itisourresponsibilitytounderstand,andactivelyaddressclimateriskswhileleveragingopportunitiestofosterastrongbusinessmodelforthefuture.In2020,weissuedourfirstclimate-relatedriskassessmentinalignmentwiththeTCFDrecommendations,whichdemonstratesourresponsibilitytoourglobalcommunityofstakeholders.

Go Green GoalsOurGoGreeninitiativepromotesenvironmentalstewardshipthroughreductionsincarbonemissions,energyandwastewhichyieldsoperationalefficiencyandcostavoidance.SincetheinceptionoftheGoGreenprogramin2007,LockheedMartinhasbeenabletoreduceenergyconsumptionby19%,carbonemissionsby47%,andwastetolandfillby51%.Wearepursuingambitiousclimate-relatedtargetstoreduceourcarbonemissionsandincreaseourrenewableenergyprocuremententerprise-wide.Wealsoemphasizeenergyefficiencyefforts,waterreductionprojects,andwasteminimizationactivitiesatourfacilities.In2020,LockheedMartinexperiencedsomeadverseimpactstotheinitiativeasaresultofCOVID-19.WecontinuetoanalyzetheseimpactsonourGoGreengoalsinordertore-evaluateanddeterminethemostappropriatepathforwardfortheprogram.

Supplier EngagementLockheedMartinworkscloselywithsupplierstostrengthenourcommunitiesandfosterresponsiblegrowth.LockheedMartin'seffortsandaccomplishmentsintheseareasduringtheyear-longmeasuringperiodfromOctober1,2019toSeptember30,2020includedthefollowing:

>21.9percentofsuppliersselectedweresmallbusinessesEarneda“verygood”ratingfromtheDefenseContractManagementAgencyforsmallbusinessperformanceonDepartmentofDefenseContractswithastrategicfocusonadvancingSTEMeducationandsupportingmilitaryandveterancauses

>$6.2billionspentwithover7,500smallbusinesses

>$1.2billionspentwithwoman-ownedbusinesses

>$681.4millionspentwithnearly800veteran-ownedbusinesses

>$68millionspentwithAlaskanNativeandTriballyOwnedCorporations

>$333.9millionspentwithover200service-disabled,veteran-ownedsmallbusinesses

OurGlobalSupplyChainOperation’steamconducteditsfirst-everHumanTraffickingSupplyChainAssessmentbasedontheU.S.DepartmentofStateTraffickinginPersonsReportin2019.Sincethen,weexpandedtheinputsourcesandhavedevelopedavisualdashboardthatmapsLockheedMartin’shumantraffickingriskacrossitssupplychain.WewillcontinuemonitoringemerginggloballegislationasweadvanceourpreventativeapproachesandareworkingtointegrateTransparencyInternational’sCorruptionPerceptionIndex,andConflictMineraldatafromourannualduediligenceprocess,toprovideadditionalperspectives.

Enterprise Risk and Sustainability


REDUCE CARBON EMISSIONSPER $ GROSS PROFIT BY

REDUCE ENERGYPER OCCUPANT BY

REDUCE WASTEPER OCCUPANT BY

70%•2015baseline

14%•2016baseline

11%•2016baseline

2020PERFORMANCE 39% 14% 9%

2025

GOA

LS

2030

GOA

L

Audit Matters

Proposal

2Ratification of Appointment of Independent Auditors• Independentaccountingfirmwiththebreadthofknowledge,supportandexpertiseofitsnationaloffice.

• Significantindustryandgovernmentcontractingexpertise.

• Periodicmandatedrotationoftheauditfirm’sleadengagementpartner.

The Board unanimously recommends that you vote FOR the ratification of the appointment of Ernst & Young as independent auditors for 2021.

TheAuditCommitteehasappointedErnst&YoungLLP(Ernst&Young),anindependentregisteredpublicaccountingfirm,astheindependentauditorstoperformanintegratedauditoftheCorporation’sconsolidatedfinancialstatementsandinternalcontroloverfinancialreportingfortheyearendingDecember31,2021.TheservicesprovidedtotheCorporationbyErnst&Youngforthelasttwofiscalyearsaredescribedunderthecaption“FeesPaidtoIndependentAuditors”onthefollowingpage.

TheAuditCommitteeisdirectlyresponsiblefortheappointment,compensation,retention,oversightandterminationoftheCorporation’sindependentauditorsinaccordancewiththeNYSElistingstandards.TheAuditCommitteealsoisresponsiblefortheauditfeenegotiationsassociatedwiththeretentionofErnst&Young.TheAuditCommitteeanditsChairmanareinvolvedintheselectionofErnst&Young’sleadengagementpartner.TheAuditCommitteeregularlymeetswithErnst&Youngwithoutmanagementpresent.

Ernst&YounghasservedastheCorporation’sindependentauditorssince1994.TheAuditCommitteereviewstheengagementofErnst&YoungannuallyfollowingcompletionofErnst&Young’sauditoftheprioryear’sfinancialstatements.TheAuditCommitteealsoconductsamid-yearassessmentofthequalityofErnst&Young’swork.Aspartofitsannualandmid-yearassessmentofErnst&Young,theAuditCommitteehasconsidered:

• thematerialsonindependenceprovidedbyErnst&Young;

• workquality;

• management’slevelofsatisfactionwithitsservices;

• theadequacyofErnst&Young’sstaffing;

• thebreadthofknowledge,supportandexpertiseofitsnationaloffice;

• thelengthoftimeErnst&Younghasbeenengaged;

• externaldataregardingErnst&Young’sauditqualityandperformance,includingrecentPublicCompanyAccountingOversightBoard(PCAOB)reportsonErnst&Younganditspeerfirms;

• Ernst&Young’sinstitutionalknowledgeandexpertisewithrespecttotheCorporation’sbusinessandgovernmentcontractingpractices,qualityandcost-effectiveservices;

• familiaritywiththeCorporation’saccount;

• levelofexpertiseinaccountingissuesrelatingtogovernmentcontracts;and

• Ernst&Young’sperformanceinprovidingindependentanalysisofmanagementpositions.

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Stockholderapprovaloftheappointmentisnotrequired.However,theBoardbelievesthatobtainingstockholderratificationoftheappointmentisasoundcorporategovernancepractice.IfthestockholdersdonotvoteonanadvisorybasisinfavorofErnst&Young,theAuditCommitteewillreconsiderwhethertohirethefirmandmayretainErnst&Youngorhireanotherfirmwithoutresubmittingthematterforstockholders’approval.TheAuditCommitteeretainsthediscretionatanytimetoappointadifferentindependentauditor.

RepresentativesofErnst&YoungareexpectedtobepresentattheAnnualMeeting,andsuchrepresentativeswillbeavailabletorespondtoappropriatequestionsandwillhavetheopportunitytomakeastatementiftheydesire.

Pre-Approval of Independent Auditors ServicesTheAuditCommitteepre-approvesallaudit,audit-related,taxandotherservicesperformedbytheindependentauditors.TheAuditCommitteepre-approvesspecificcategoriesofservicesuptopre-establishedfeethresholds.Unlessthetypeofservicehaspreviouslybeenpre-approved,theAuditCommitteemustapprovethatspecificservicebeforetheindependentauditorsmayperformsuchservice.Inaddition,separateapprovalisrequirediftheamountoffeesforanypre-approvedcategoryofserviceexceedsthefeethresholdsestablishedbytheAuditCommittee.TheAuditCommitteealsohasdelegatedtotheCommitteeChairmanoranymemberpre-approvalauthoritywithrespecttopermittedservicesupto$500,000,providedthattheCommitteeChairmanoranycommitteemembermustreportanypre-approvaldecisionstotheAuditCommitteeatitsnextscheduledmeeting.

Fees Paid to Independent AuditorsThefollowingtablesetsforththefeesbilledbyErnst&Young,theCorporation’sindependentauditors,forauditservices,audit-relatedservices,taxservicesandallotherservicesrenderedfor2020and2019.Allfeeswerepre-approvedinaccordancewiththeAuditCommittee’spre-approvalpolicy.TheAuditCommitteeconsideredandconcludedthattheprovisionoftheseservicesbyErnst&Youngwascompatiblewiththemaintenanceoftheauditor’sindependence.

2019 2020

($) ($)

AuditFees(a) 22,775,000 23,500,000

Audit-RelatedFees(b) 195,000 310,000

TaxFees(c) 2,300,000 2,600,000

AllOtherFees 0 0

(a) AuditfeesareforservicesrelatedtotheannualauditoftheCorporation’sconsolidatedfinancialstatements,includingtheauditofinternalcontroloverfinancialreporting,theinterimreviewsoftheCorporation’squarterlyfinancialstatements,statutoryauditsoftheCorporation’sforeignsubsidiariesandconsultationsonaccountingmatters.

(b) Audit-relatedfeesareprimarilyrelatedtoauditsoftheCorporation’semployeebenefitplansandduediligenceservicesinconnectionwithacquisitions.(c) Taxfeesarefordomesticandinternationaltaxcomplianceandadvisoryservices.Taxcompliancefeeswere$1.7millionand$1.3millionin2020and2019,

respectively,andfeesforadvisoryserviceswere$0.9millionand$1.0millionin2020and2019,respectively.

Audit Matters


Audit Committee ReportTheAuditCommitteeoftheBoardofDirectorsisresponsibleforoverseeingtheCorporation’saccounting,auditingandfinancialreportingprocess,financialriskassessmentandmanagementprocessandformonitoringcompliancewithcertainregulatoryandcompliancematters,onbehalfoftheBoardofDirectors.

TheCorporation’smanagementisresponsibleforpreparingthequarterlyandannualconsolidatedfinancialstatements,thefinancialreportingprocess,andmaintainingandevaluatingdisclosurecontrolsandproceduresandasystemofinternalcontroloverfinancialreporting.

InadditiontoitsoversightoftheCorporation’sinternalauditorganization,theAuditCommitteeisdirectlyresponsiblefortheappointment,compensation,retention,oversightandterminationoftheCorporation’sindependentauditors,Ernst&Young,anindependentregisteredpublicaccountingfirm.TheindependentauditorsareresponsibleforperforminganindependentauditoftheCorporation’sannualconsolidatedfinancialstatementsandinternalcontroloverfinancialreportingandexpressinganopiniononthematerialconformityofthoseconsolidatedfinancialstatementswithU.S.generallyacceptedaccountingprinciplesandontheeffectivenessoftheCorporation’sinternalcontroloverfinancialreporting.

InconnectionwiththepreparationoftheCorporation’sconsolidatedfinancialstatementsasofandfortheyearendedDecember31,2020,theAuditCommitteereviewedanddiscussedwithmanagementandErnst&YoungtheCorporation’sauditedconsolidatedfinancialstatements,includingdiscussionsregardingcriticalaccountingpolicies,financialaccountingandreportingprinciplesandpractices,thequalityofsuchprinciplesandpractices,thereasonablenessofsignificantjudgmentsandestimates,andtheeffectivenessofinternalcontroloverfinancialreporting.TheAuditCommitteealsodiscussedwithErnst&Young,withandwithoutmanagement,thequalityofthefinancialstatements,clarityoftherelateddisclosures,effectivenessofinternalcontroloverfinancialreportingandotheritemsrequiredbytheapplicablerequirementsofthePublicCompanyAccountingOversightBoard(PCAOB)andtheSEC.Additionally,theAuditCommitteereceivedandreviewedthewrittendisclosuresandletterfromErnst&YoungrequiredbyapplicablerequirementsofthePCAOBregardingErnst&Young'scommunicationswiththeAuditCommitteeconcerningindependence,andhasdiscussedwithErnst&Youngitsindependence.

BasedontheAuditCommittee’sreviewsanddiscussionsdescribedinthisreport,theAuditCommitteerecommendedtotheBoardofDirectorsthattheauditedconsolidatedfinancialstatementsasofandfortheyearendedDecember31,2020beincludedinLockheedMartinCorporation’sAnnualReportonForm10-Kfor2020forfilingwiththeSEC.TheAuditCommitteealsoreappointedErnst&YoungtoserveastheCorporation’sindependentauditorsfor2021,andrequestedthatthisappointmentbesubmittedtotheCorporation’sstockholdersforratificationattheAnnualMeeting.TheBoardofDirectorsapprovedtheAuditCommittee’srecommendations.

ThomasJ.FalkChairman

DavidB.Burritt JamesO.Ellis,Jr. IleneS.Gordon DebraL.Reed-Klages

Audit Matters

38

Executive Compensation

Proposal

3Advisory Vote to Approve the Compensation of Our NEOs (Say-on-Pay)• Pay-for-performancealignmentisbuiltintothedesignofourannualandlong-termincentiveprograms.

• Executivecompensationtargetsaresetbyreferenceto50thpercentileofpeerswithactualpayoutsdependentonperformanceoutcomes.

• Morethan94%ofvotescastatthe2020annualmeetingapprovedSay-on-Payandwecontinuetoengagewithourstockholdersonanon-goingbasis.

The Board unanimously recommends that you vote FOR the advisory vote to approve the compensation of our named executive officers.

AsrequiredbySection14AoftheSecuritiesExchangeActof1934,asamended,weaskourstockholderstovoteannuallytoapprove,onanadvisory(non-binding)basis,thecompensationofournamedexecutiveofficers(NEOs)asdescribedindetailintheCompensationDiscussionandAnalysis(CD&A)andtheaccompanyingtablesintheExecutiveCompensationsectionofthisProxyStatement.ThisvoteiscommonlyknownasSay-on-Pay.

StockholdersshouldreviewtheentireProxyStatementand,inparticular,theCD&Abeginningonpage40andtheExecutiveCompensationTablesbeginningonpage58,forinformationonourexecutivecompensationprogramsandotherimportantitems.

WebelievethattheinformationprovidedinthisProxyStatementdemonstratesthatourexecutivecompensationprogramsaredesignedtolinkpaytoperformance.Accordingly,theBoardrecommendsthatstockholdersapprovethecompensationofourNEOsbyapprovingthefollowingSay-on-Payresolution:

RESOLVED,thatthestockholdersofLockheedMartinCorporationapprove,onanadvisorybasis,thecompensationofthenamedexecutiveofficersidentifiedinthe“SummaryCompensationTable,”asdisclosedintheLockheedMartinCorporation2021ProxyStatementpursuanttoItem402ofRegulationS-K,includingtheCompensationDiscussionandAnalysis,thecompensationtablesandtheaccompanyingfootnotesandnarratives.Thisvoteisnotintendedtoaddressanyspecificitemofcompensation,butratherouroverallcompensationpoliciesandproceduresrelatedtotheNEOs.AlthoughtheresultsoftheSay-on-PayvotedonotbindtheCorporation,theBoardwill,asitdoeseachyear,continuetoreviewtheresultscarefullyandplanstocontinuetoseektheviewsofourstockholdersthroughouttheyear.

Compensation Committee ReportTheManagementDevelopmentandCompensationCommitteemakesrecommendationstotheBoardofDirectorsconcerningthecompensationoftheCorporation’sNEOs.WehavereviewedanddiscussedwithmanagementtheCompensationDiscussionandAnalysisthatwillbeincludedintheCorporation’sSchedule14AProxyStatement,filedpursuanttoSection14(a)oftheSecuritiesExchangeActof1934,asamended.Basedonthatreviewanddiscussion,werecommendedtotheBoardofDirectorsthattheCompensationDiscussionandAnalysisbeincludedintheProxyStatement.TheBoardapprovedourrecommendation.

IleneS.GordonChairman

ThomasJ.Falk VickiA.Hollub DebraL.Reed-Klages


Compensation Discussion and Analysis (CD&A) ThisCD&AdiscussesthecompensationdecisionsfortheNEOslistedintheSummaryCompensationTableonpage58.

2020-2021 Leadership ChangesIn2020andearly2021,therewerethefollowingleadershipchangesaffectingtheNEOs:

• JamesD.TaicletwaselectedPresidentandChiefExecutiveOfficereffectiveJune15,2020,succeedingMs.Hewson,andwaselectedChairmaneffectiveMarch1,2021;

• MarillynA.HewsontransitionedtoExecutiveChairmaneffectiveJune15,2020,afterservingasPresidentandChiefExecutiveOfficersinceJanuary2013andChairmanoftheBoardsinceJanuary2014.EffectiveMarch1,2021,Ms.HewsonbecameStrategicAdvisortotheCEOandisexpectedtoserveinthatrolethroughFebruary28,2022;

• FrankA.St.JohnwaspromotedtoChiefOperatingOfficereffectiveJune15,2020,afterservingasExecutiveVicePresident,RotaryandMissionSystemssinceAugust26,2019;and

• MicheleA.Evans,ExecutiveVicePresident,Aeronautics,passedawayonJanuary1,2021andwassucceededbyGregoryM.UlmereffectiveFebruary1,2021.

NEO Title

Years of Service At End of 2020

(rounded)

JamesD.Taiclet Chairman,PresidentandChiefExecutiveOfficer 6months

MarillynA.Hewson StrategicAdvisortotheCEO;FormerChairman,PresidentandChiefExecutiveOfficer

38years

KennethR.Possenriede ChiefFinancialOfficer 34years

FrankA.St.John ChiefOperatingOfficer 34years

RichardF.Ambrose ExecutiveVicePresident,Space 20years

MicheleA.Evans FormerExecutiveVicePresident,Aeronautics 34years

ToassiststockholdersinfindingimportantinformationintheCD&A,sectionsarehighlightedasfollows:

Page(s)

41 Our2020Performance43 2020CEOCompensation45 2020ComparatorGroupCompanies47 2020CompensationElements

48-50 2020AnnualIncentive50-53 2020Long-TermIncentiveCompensation

53 2018-2020LTIPandPSUAwards54-55 2021Incentives55-57 OtherCompensationMatters

2020 Say-on-Pay VoteAtour2020annualmeeting,morethan94%ofthevotescastbyourstockholdersapprovedourSay-on-Payproposalandmorethan95%ofthevotescastapprovedournewequityplan.Wemeetwithourkeyinvestorsthroughouttheyeartounderstandthetopicsthatmattermosttothemastheyrelatetoexecutivecompensation.Wesoughttheviewsofourstockholderswithrespecttoourexistingpoliciesandpractices.(Pleasesee“StockholderEngagementandResponsiveness”onpage28formorespecificdetails).Investorsweengagedwithduring2020reactedpositivelytoourpaygovernanceandexecutivecompensationprograms.Weconsidertheinputofourstockholders,alongwithemergingbestpractices,toensurealignmentwithourexecutivepayprograms.Wewelcomefeedbackregardingourexecutivecompensationprogramsandwillcontinuetoengagewithourstockholdersin2021.


40

Executive Summary

Our 2020 Performance

Record Sales of

$65.4B

Record Segment Operating Profit* of

$7.2B

Year-End Backlog of

$147.1B

Record Earnings per Share from continuing operations of

$24.50In2020,LockheedMartindemonstratedagility,resilience,andresolveinthefaceoftheyear’sunprecedentedgeopolitical,business,andpublichealthchallenges.Wecontinuedtoexhibitstronggrowthacrossourdiverseportfolio,asmanifestedinourfinancialandoperationalresults.In2020,theCorporationachievedrecordsforsales,segmentoperatingprofit*andearningspershare.LockheedMartin’snetsalesandsegmentoperatingprofitin2020bothincreased9%comparedto2019andwegeneratedcashfromoperationsof$8.2billionafter$1.0billionofdiscretionarypensioncontributions.Inaddition,weended2020withordersof$68.1billion,addingtoourstrongyear-endbacklogof$147.1billion.

DespiteCOVID-19supplierchallengesthatimpactedaircraftdeliveries,theF-35fifthgenerationfighterprogramworkedwithourcustomersandpartnerstomitigaterisksbroughtonbythepandemicandcontinuedtoachieveunmatchedcombatcapability.In2020,wedelivered120F-35sandremainedontracktomeetthejointgovernmentandindustryrecoverycommitmentsoverthecomingyears.Intotal,theprogramhassurpassed600aircraftdeliveriesandmorethan350,000flighthours.TheF-35programalsocelebratedseveralinternationalmilestoneswithPolandandSingaporejoiningtheprogramandseveralothernationsexpressinginterestinjoiningaswell.

TheCorporationalsohadstrategicandoperationalaccomplishmentsacrossourotherbusinesssegmentsin2020.InApril,wewereawardedacontractvaluedatmorethan$6billiontosupplyPAC-3MissileSegmentEnhancementinterceptors,launchermodificationkits,andassociatedequipmenttosupporttheUnitedStatesandinternationalcustomers.Earlyintheyear,wecelebratedthelaunchofthesixthandfinalAdvancedExtremelyHighFrequencysatellite.Notably,thesatellitewasthefirstinorbitforthenewlyformedU.S.SpaceForce.Wealsoreceiveda$2billionPerformance-BasedLogisticscontractforsustainmentservicesontheMH-60SEAHAWK®platformfortheU.S.Navy.Strategically,LockheedMartincontinuedtoinvestinemergingtechnologiesintheareasofautonomy,hypersonics,andartificialintelligencetobetterserveourcustomersinanincreasinglyvolatileandunpredictablethreatenvironment.

Wealsocontinuedoureffortstoreturncashtostockholdersthroughdividendsandsharerepurchases.During2020,wereturned$3.9billionofcashfromoperationstoourstockholders,with$1.1billioninsharerepurchasesand$2.8billionpaidincashdividends.LockheedMartin'stotalstockholderreturnshaveoutperformedtheS&P500Aerospace&DefenseIndexoverthepastone-,three-,andfive-yearperiods,reflectingthesefinancial,strategicandoperationalaccomplishments.

*SeeAppendixAforanexplanationofNon-GAAPterms.

1-Year TSR

3-Year TSR

5-Year TSR



S&PIndustrials

DowJones

S&P500

LMTS&PAero

11%

10%

-16%

18%

-6%

-25%

0%

25%

50%

0%

50%

100%

S&PIndustrials

24%

DowJones

33%

S&PAero

1%S&P500

49%

19%

LMT

0%

100%

200%

S&PIndustrials

DowJones

S&P500

S&PAero

79%98

%

69%10

3%

86%

LMT

$

Compensation Overview

OurexecutivecompensationprogramscoveringourNEOsaredesignedtoattractandretaincriticalexecutivetalent,tomotivatebehaviorsthatalignwithstockholders’interestsandtopayforperformance.ThemajorityofourNEOs’payisvariableandcontingentonperformancewithovertwo-thirdsintheformoflong-termincentives(LTI).Toensurepayiscompetitivewithmarketpractices,weconductabenchmarkinganalysiseachyearwhenestablishingbasesalary,annualincentivetargetopportunitiesandLTItargetopportunities.Eachelementofcompensationisevaluatedagainstthe50thpercentile,whichwerefertoas“marketrate,”ofourcomparatorgroupofcompanies,asshownonpage45.Althoughtargetincentiveopportunitiesaresetbyreferencetothemarketrate,incentiveplantermsprovideforactualpayoutstobebaseduponactualperformancethatcanresultinpayoutsaboveorbelowtargetedlevels.Basedonactualresultsrelativetoourpre-establishedgoalsunderourincentiveprograms,the2020annualincentiveprogrampaidoutat177%oftargetandthe2018-2020Long-TermIncentivePerformanceawards(LTIP)andPerformanceStockUnits(PSUs)paidoutat200%oftargetforallNEOs.

WehavenotmadeanymodificationstoourcompensationprogramsortoourtargetsorgoalsinresponsetoCOVID-19ortheCoronavirusAid,ReliefandEconomicSecurity(CARES)Act.However,inSeptember2020,theCompensationCommitteeapprovedamendmentstooutstandinglong-termincentiveawardagreementstoensurethattheultimatepayoutsarenotimpactedtoaparticipant’sbenefitordetrimentbygovernmentstimulusandassistanceprogramsenactedinresponsetoCOVID-19orbypensionrisktransfertransactions(pleasesee“SettingPerformanceGoalsforPSUsandLTIP”onpage52formorespecificdetails).

CEO Transition

EffectiveJune15,2020,Ms.HewsontransitionedfromChairman,PresidentandCEOtoExecutiveChairmanandMr.TaicletwaselectedPresidentandCEO.EffectiveMarch1,2021,Mr.TaicletwaselectedChairmanandMs.HewsonbecameStrategicAdvisortotheCEO.Ms.HewsonisexpectedtoserveinthisroleuntilFebruary28,2022.

TheCorporationmaintainsandhasregularlyadheredtoacompensationphilosophyofprovidingtargettotalcompensationopportunitiesconsistentwiththemarketrate.ThispolicyisconsistentlyappliedtoallNEOs.ThetablebelowillustratestheannualizedvalueofMr.Taiclet’sapproved2020targettotalcompensationopportunity:

Approved 2020 Compensation

Element Salary ($)Target Annual

Incentive %Target Total

Cash ($)Long-Term

Incentives* ($)Target Total

Compensation ($)

AnnualizedTargetPay 1,700,000 175 4,675,000 14,000,000 18,675,000

* 2020LTIgrantexcludesequityreplacementgrantwithanapproximatevalueof$5.55million.

Theannualandlong-termincentiveopportunitiesrepresenttargetandgrantdatevaluesrespectively.Theseopportunitiescanbeearnedsubjecttosubsequentperformanceandservice.Theannualcashcompensationelements—salaryandannualincentive—werepro-ratedbasedonthenumberofdaysemployedfor2020.Thelong-termincentiveawardwasnotpro-ratedreflectingboththelongertermnatureoftheawardandthatMr.Taicletwouldhaveotherwisereceivedafulllong-termincentiveawardfor2020fromhisprioremployerifhehadcontinuedtobeitsCEO.Mr.Taiclet'slong-termincentiveaward,aswithallotherNEOs,wascomprisedof70%performance-basedawards(50%PSUsand20%cashbasedLTIP)and30%time-basedRestrictedStockUnits(RSUs).

Uponhisterminationofemploymentwithhisprioremployer,Mr.Taicletforfeitedportionsofperformance-basedequityawardscoveringtwoseparateperformancecycles(2018-2020and2019-2021)andhisopportunitytoearnanannualcashincentiveawardfor2020.TheBoard,withtheassistanceofitsoutsidecompensationconsultant,estimatedthatMr.Taicletwasforfeitingapproximately$5.55millioninvaluethathewouldhaveotherwiseearnedatthisprioremployer.ToinduceMr.TaiclettoacceptemploymentwiththeCorporationbycoveringtheestimatedvalueoftheseforfeitedawards,Mr.Taicletwasgrantedareplacementaward,whichwasallocatedbetweentwotranchesofRSUsasfollows:

• 7,689RSUs($2.87million)thatvestoneyearfromthedateofgranttoreplacetheforegoneannualcashincentiveopportunityandtheforfeited2018-2020performance-basedaward;and

• 7,180RSUs($2.68million)thatvesttwoyearsfromthedateofgranttoreplacetheforfeited2019-2021performance-basedaward.


42

Thevestingperiodsofthesetwotrancheswerestructuredtoapproximatelyparallelthetimeperiodsoverwhichtheoriginalforfeitedawardswouldhavebeenearned/vestedandthenumberofRSUswasdeterminedbasedondividingtheestimatedforfeitedvaluebytheclosingstockpriceoftheCorporation'scommonstockontheNYSEonJune15,2020,whichwastheeffectivedateofMr.Taiclet'sappointmentasPresidentandCEO.RSUswerechosentocreateimmediatealignmentwithLockheedMartinstockholdersandfurtherMr.Taiclet’sequityownershipintheCorporation.

NoadjustmentsweremadetoMs.Hewson'spreviouslyapproved2020compensationinconnectionwithhertransitiontoExecutiveChairman.ConsistentwiththepolicyofnotprovidingBoardcompensationtoemployeedirectors,Ms.HewsondidnotreceiveseparatedirectorcompensationforherserviceontheBoardduring2020.ForherserviceasStrategicAdvisortotheCEO,effectiveMarch1,2021throughFebruary28,2022,Ms.Hewson'sannualbasesalarywillbereducedfrom$1,855,000to$900,000.Ms.Hewsonwillnotbeeligibleforanannualincentivefor2021performanceandwillnotreceiveanyequityorlong-termincentiveperformanceawardsin2021.WhilesheremainsanemployeeoftheCorporation,Ms.Hewsonwillcontinuetoparticipateinthesavings,health,disabilityandlifeinsurancebenefitplansandprogramsinwhichshehasbeenaparticipantandwillcontinuetobeeligibleforanannualexecutivephysical,homeofficesupport,professionalmemberships,continueduseofcorporateaircraftandcontinuedsecuritybasedonassessedrisktoher.Consistentwithpastpractice,totheextentpersonalsecurityisnecessaryandtaxable,Ms.Hewsonwillreceiveataxgross-upsufficienttomakeherwhole.

2020 CEO Compensation

2020CEOTargetPayMix.WebelievethatthecompensationopportunitiesofourCEOshouldbepredominantlyvariable,andthevariableelementsofthecompensationpackageshouldtietotheCorporation’slong-termsuccessandtheachievementofsustainablelong-termtotalreturnstoourstockholders.Asshowninthecharttotheright,asignificantportionofourCEO’stargetcompensationisvariableandintheformofLTIwithmorethanhalfoftotaltargetpayintheformofequity-basedincentives.

BaseSalary.In2020,Mr.Taiclet’sannualbasesalarywassetat$1,700,000.

2020AnnualIncentive.Mr.Taiclet’stargetannualincentiveamountfor2020was175%ofsalary,or$1,636,250afterprorationbasedonhisstartdate.

2020-2022Long-TermIncentives.In2020,Mr.TaicletwasgrantedanannualLTIawardofapproximately$14.0million,whichwasallocated50%inPSUs,30%inRSUs,and20%inthecash-basedLTIP.RSUswillcliff-vestafterthreeyears,whilethepayoutofPSUsandLTIPwillbebaseduponourresultsattheendofthethree-yearperformanceperiodrelativetothethree-yearperformancegoalsthatwereestablishedinthebeginningof2020.Thisdoesnotincludetheone-timereplacementawardofapproximately$5.55Mtooffsetforfeitedincentivesathispreviousemployer.

BenefitandRetirementPlans.Mr.Taicletiseligibleforbenefitandretirementprograms,similartoothersalariedemployees.NoneofourNEOsreceivedadditionalyearsofservicecreditsorotherformsofformulaenhancementsunderourbenefitorretirementplans.Mr.Taicletdoesnotparticipateinapensionplan,asthesalariedpensionplanwasclosedtoemployeeshiredafterDecember31,2005andfullyfrozeneffectiveJanuary1,2020.

CEO Target Opportunity Mix *

*Fixedvs.variableandcashvs.equitycomponentsaredesignatedintheCompensationElementstableonpage47.Weconsiderbasesalaryandannualincentivesasshort-termpayandPSUs,LTIP,andRSUsaslong-termpay.Cashrepresentsbasesalary,annualincentivetargetandLTIPtarget.Wedonotincluderetirementorothercompensationcomponentsinthechart.Chartreflectsbasesalaryandannualincentivesonanon-proratedbasisanddoesnotincludetheone-timereplacementawardofRSUs.



Short-Term

25% 75%Long-Termvs.

Fixed

9% 91%Variablevs.

Cash

40% 60%Equityvs.

Elements ofCompensation

9.1%Base Salary

15.9%Annual

Incentives

75.0%Long-TermIncentives

Summary of Compensation Approach

Guiding Pay Principles

• Attract,motivateandretainexecutivetalent

• Market-based50thpercentileapproachtotargetallcompensationelements

• LinkexecutivepaytoEnterpriseperformance

• Provideanappropriatemixofshort-termvs.long-termpayandfixedvs.variablepay

• Aligntostockholderinterestsandlong-termCorporationvalue

Our Decision-Making Process

TheCompensationCommitteeseeksinputfromourCEOandothermembersofourmanagementteamaswellasinputandadvicefromanindependentcompensationconsultanttoensuretheCorporation’scompensationphilosophyandinformationrelevanttoindividualcompensationdecisionsaretakenintoaccount.Mr.TaicletdidnotparticipateintheBoard'sandCompensationCommittee'sdeliberationsonhisselectionandappointmentastheCorporation'snewPresidentandCEOandrelatedcompensationdecisions.

Independent Pay Governance

Independent Board Members

ReviewandapprovecompensationoftheCEOandreviewandratifycompensationofotherNEOs.Reviewwithmanagement,atleastannually,thesuccessionplanfortheCEOandotherseniorpositions.

Independent Compensation Consultant

Providesadviceonexecutivepayprograms,paylevelsandbestpractices.ProvidesdesignadviceforannualLTIvehiclesandothercompensationprograms.

Independent Compensation Committee

ReviewsandapprovesincentivegoalsrelevanttoNEOcompensation.ReviewsandapprovesthecompensationforeachNEO.RecommendsCEOcompensationtotheindependentmembersoftheBoard.

Stockholders & Other Key Stakeholders

Providefeedbackonvariousexecutivepaypracticesandgovernanceduringperiodicmeetingswithmanagement,whichthenisreviewedbyanddiscussedwithourindependentBoardmembers.

Role Management CEO

Management Compensation Consultant(1)

Independent Compensation Consultant(2)

Independent Compensation Committee

Independent Board Members

PeerGroup/ExternalMarketDataandBestPracticesforCompensationDesignandDecisions

Reviews Reviews Develops Develops/Reviews

Reviews —

AnnualNEOTargetCompensation — Recommends — Reviews Approves Ratify

AnnualCEOTargetCompensation — — — Advises Recommends Approve

AnnualandLong-TermIncentiveMeasures,PerformanceTargetsandPerformanceResults

Develops Reviews — Reviews Approves Ratify

Long-TermIncentiveGrants,Dilution,BurnRate

Develops Reviews — Reviews Approves Ratify

RiskAssessmentofIncentivePlans Reviews Reviews — Develops Reviews —

SuccessionPlans Develops Reviews — — — Review(1) AonandWillisTowersWatson.(2) MeridianCompensationPartners(Meridian).


44

How We Determine Market Rate Compensation

Foreachoftheprincipalelementsofexecutivecompensation,wedeterminethe“marketrate”asthesize-adjusted50thpercentileofourcomparatorgroupofcompanies.Size-adjustedmarketratesarecalculatedforusbyAon,usingrevenueregressionanalysis.Thisstatisticaltechniqueaccountsforrevenuesizedifferenceswithinthepeergroupandresultsinamarketrateforallcompensationelementsconsistentwithourrevenuerelationshiptoourpeers.Wealsomayadjustthemarketratetoreflectdifferencesinanexecutive’sjobscoperelativetotheindustryorthecomparatorgroupofcompanies,asappropriate.

TheCompensationCommitteeconsidersthecurrentmarketdataincombinationwithotherinternalfactorswhensettingindividualannualtargetpaylevels,suchaschangestomarketdatayear-over-year,internalpayequity,individualperformance,jobscopeandcriticalitytotheCorporation.Ourincentiveplansaredesignedsothatactualperformanceinexcessofestablishedperformancetargetsresultsinpayoutsabovetargetandactualperformancebelowestablishedperformancetargetsresultsinpayoutsbelowtargetornopayout.

How We Select the Comparator Group for Market Rate PurposesToestablishthemarketrateforeachoftheprincipalelementsofcompensation,weselectagroupofpublicly-tradedcompanies(ourcomparatorgroup).Weregularlyreviewourcomparatorgrouptomaintainrelevancyandtoensuretheavailabilityofdata,whileseekingtoavoidsignificantannualchangesinthegrouptoensurealevelofconsistency.Becausethenumberofcomparablecompanieswithourrevenuelevelisnotextensive,weincludecompaniesinourcomparatorgroupbasedonanumberoffactors,including:

• Similarityinsize(ahighcorrelativefactorindeterminingpay),generallybasedonannualrevenues;

• ParticipationintheAonexecutivecompensationsurvey(ourprimarysourcefordatainmakingmarketcomparisons),whichenablesustoobtainreliabledataformarketcomparisonsthatotherwisemaynotbepubliclyavailable;

• Industrialcompaniesand,totheextentpossible,companiesthatcompeteintheaerospaceanddefenseindustry,whichenablescomparisonwithcompaniesthatfacesimilaroveralllaborcosts,economicfactorsandmarketfluctuations;

• Companieswithwhichwecompeteforexecutivetalent,ascompetitiveconditionsandthelimitednumberofcomparably-sizedaerospaceanddefensecompaniesrequireustorecruitoutsideofthecoreaerospaceanddefensecompaniesforabroadrangeofdisciplines(e.g.,finance,humanresources,legal,supplychainmanagement)toobtainindividualswithabroadrangeofskillsthataretransferableacrossindustries;and

• Companieswithcomparableexecutiveofficerpositionsormanagementstructures,whichenablesmoreappropriatecompensationcomparisons.

Wedonotconsidermarketcapitalizationinselectingourcomparatorgroupbecausemarketcapitalizationcanchangequicklyasindustriesandcompaniesgoinandoutoffavorasinvestmentsandcompaniesrestructure.

ThedatapresentedtoandconsideredbytheCompensationCommitteeregardingthelevelofcompensationattheCorporation’scomparatorgroupofpeercompanieswasdevelopedfromtheproprietaryresultsoftheAonexecutivecompensationsurvey,subjecttoreviewbyMeridian.Therewasnochangeinthecompositionofour2020comparatorgroupfrom2019.Allofthe2020comparatorgroupcompaniesparticipatedintheAonsurvey.Our2020revenuesrepresentedthe64thpercentileofthecomparatorgroup.

2020 Comparator Group Companies

3MCompany GeneralDynamicsCorporation* RaytheonCompany*

CaterpillarInc. GeneralElectricCompany TheBoeingCompany*

CiscoSystems,Inc. HoneywellInternationalInc.* UnitedParcelService,Inc.

Deere&Company InternationalBusinessMachinesCorporation UnitedTechnologiesCorporation*

DowDuPontInc.** IntelCorporation

FedExCorporation NorthropGrummanCorporation*

* Aerospace&DefenseIndustry** InJune2019,DowDuPontInc.completedaseriesoftransactionstosplitintomultipleseparateentitiesbutdataisincludedgivenparticipationintheAon

surveypriortothesplit.

InJune2020,theCompensationCommitteereviewedthecomparatorgroup,asitdoeseachyear.InlightofthesplitofDowDuPontInc.,theCompensationCommitteereplacedDowDuPontInc.withDowInc.andalsoaddedHPInc.givenitssatisfactionofourcriteriadescribedabove.ThisupdatedComparatorGroupwasusedforcompensationdecisionsfor2021.



Compensation and Risk

TheCorporation’sexecutiveandbroad-basedcompensationprogramsareintendedtopromotedecision-makingthatsupportsapayforperformancephilosophywhilemitigatingriskbyutilizingthefollowingdesignfeatures:

• Mixoffixedandvariablepayopportunities

• Multipleperformancemeasures,multipletimeperiodsandcappedpayoutsunderincentiveplans

• Stockownershiprequirements

• OversightbyindependentBoardcommittee

• IncentivegoalssetattheEnterpriseorbusinesssegmentlevel

• Moderateseveranceprogramthatincludespost-employmentrestrictivecovenants

• Institutionalfocusonethicalbehavior

• Annualriskassessment

• CompensationCommitteeoversightofequityburnrateanddilution

• Enhancedclawbackpolicy

WiththeassistanceofariskassessmentconductedbyMeridianonanannualbasis,theCompensationCommitteeconcludedthatrisksarisingfromourexecutiveandbroad-basedincentivecompensationprogramsarenotreasonablylikelytohaveamaterialadverseeffectontheCorporation.

Compensation Best Practices

Best Practices in Our Programs Practices We Do Not Engage In or Allow

• Payalignswithperformance

• Market-based(50thpercentile)approachfordeterminingNEOtargetpaylevels

• Capsonannualandlong-termincentives,includingwhenTotalStockholderReturn(TSR)isnegative

• Enhancedclawbackpolicyonvariablepay

• Double-triggerprovisionsforchangeincontrol

• Robuststockownershiprequirements

• Lowburnrateanddilution

•Nopaymentofdividendsordividendequivalentsonunvestedequityawards

• Noemploymentagreements

• Nooptionbackdating,cash-outofunderwateroptionsorrepricing

• Noexcisetaxassistance(gross-ups)uponachangeincontrol

• Notaxgross-upsonpersonaluseofcorporateaircraft

• Noindividualchangeincontrolagreements

• Noautomaticaccelerationofunvestedincentiveawardsintheeventoftermination

• Noenhancedretirementformulaorinclusionoflong-termincentivesinpensions

• Noenhanceddeathbenefitsforexecutives

• NohedgingorpledgingofCompanystock


46

2020 Named Executive Officers’ Compensation

2020 Target Compensation

OurNEOs’targetcompensationfor2020isshownbelow,whichiscloselyalignedtothemarketrate.WhendeterminingpayforourNEOs,theCompensationCommitteeconsidersthecurrentmarketdataincombinationwithotherinternalfactorswhensettingannualtargetpaylevels,suchaschangestomarketdatayear-over-year,internalpayequity,individualperformance,jobscopeandcriticalitytotheCorporation.EffectiveJune15,2020,MarillynA.HewsontransitionedtoExecutiveChairmanandJamesD.TaicletwaselectedPresidentandChiefExecutiveOfficer.Additionally,FrankA.St.JohnwasappointedChiefOperatingOfficereffectiveJune15,2020andinconnectionwithhispromotiontheCompensationCommitteeapprovedanadditional$150,000LTIgrant(increasinghistotalannualLTIopportunityfrom$4.5millionto$4.65million).

Annual Incentive

NEO

Base Salary

($)Target

%

Target Amount

($)

2020 Annual LTI Grant

($)

Total Target Direct Compensation

($)

Mr.Taiclet* 1,700,000 175 1,636,250 14,000,204 17,336,454

Ms.Hewson 1,855,000 175 3,246,250 15,000,289 20,101,539

Mr.Possenriede 935,000 105 981,750 4,650,236 6,566,986

Mr.St.John 935,000 105 981,750 4,650,599 6,567,349

Mr.Ambrose 935,000 105 981,750 4,000,257 5,917,007

Ms.Evans 935,000 105 981,750 4,500,241 6,416,991

* Mr.Taiclet'sprorated2020basesalarywas$915,385.Hisannualincentivetargetamountshownaboveisproratedbasedontimeservedduring2020.His2020AnnualLTIgrantandTotalTargetDirectCompensationexcludeshisequityreplacementgrantwithanapproximatevalueof$5.55million.

2020 Compensation Elements

Ourcompensationprogramsaredesignedtoprovideamixofshort-andlong-termcompensation,fixedandvariablepayandcashandequity-basedcompensation,aswellastoreflectourphilosophyofprovidingpayforperformance.Benefit,RetirementandPerquisiteprogramsarenotincludedinourcompensationelementsbelow(additionalinformationabouttheseprogramscanbefoundonpage57).

Fixed Variable

Base Salary + Annual Incentive +Long-Term Incentives

50% PSUs 20% LTIP 30% RSUs

WHAT? Cash Cash Equity Cash Equity

WHEN? Annual Annual 3-year Performance Cycle

3-year Performance Cycle

3-year Cliff Vesting

HOW?

Measures,Weightings&Payouts

Marketrate,aswellasinternalpayequity,experienceandcriticalskills

70%Financial

20%Sales,40%SegmentOperatingProfit**,40%CashfromOperations***30%Strategic&OperationalKeyMetrics:FocusPrograms,International,MissionSuccess®,ProgramPerformance,PortfolioShaping/EnterpriseInitiatives,Innovation,TalentManagement

Payout:0-200%oftarget

RelativeTSR*ROIC**

PerformanceCash**

(50%)(25%)(25%)

Valuedeliveredthroughlong-termstockprice

performance•Award0-200%oftarget#ofshares

•RelativeTSRmeasurecappedat100%ifTSRisnegative

•Valuecappedat400%ofstockpriceondateofgrantxsharesearned

•Payout0-200%oftarget

•RelativeTSRmeasurecappedat100%ifTSRisnegative

WHY? Providescompetitivelevelsoffixedpaytoattractandretainexecutives.

AttractsandmotivatesexecutivesbylinkingannualCorporationperformancetoanannualcashincentive.

Createsstrongalignmentwithstockholderinterestsbylinkinglong-termpaytokeyperformancemetricsandstockprice.Providesabalanceofinternalandmarket-basedmeasurestoassesslong-termperformance.

Promotesretentionofkeytalentandalignsexecutiveandstockholderinterests.

* Seepage52for2020-2022RelativeTSRComparators.** RefertoAppendixAforanexplanationofNon-GAAPtermsaswellasourdisclosureregardingforward-lookingstatementsconcerningfutureperformance

orgoalsforfutureperformance.***AdjustedforunplannedpensioncontributionspursuanttoresolutionsoftheCompensationCommittee.



Base Salary

Basesalariesarereviewedandincreasedannuallytakingintoaccountthemarketrate(50thpercentile),theexecutive’sindividualperformanceandinternalpayequity.InestablishingthebasesalaryforeachNEO,wedeterminedthemarketrateusingcomparatorgroupcompanydataandevaluatedwhetherthemarketrateshouldbeadjustedupordownbasedondifferencesinthescopeoftheNEO’spositionascomparedtotheindustryandthecomparatorgroupcompanies.

2020 Annual Incentive

Ashasbeenthecasesince2018,the2020annualincentiveplanforourCEO,otherNEOsandallotherofficerselectedbytheBoardwasbased70%onfinancialgoalsand30%onstrategicandoperationalgoalsmeasuredattheEnterpriselevel,asillustratedinthegraphicbelow.Althoughtheannualincentiveplanusesaformulaicapproach,theCompensationCommitteeretainsdiscretioninadministeringtheplan,whichdiscretionincludeschoosingandapprovinggoals,assessingstrategicandoperationalresultsandmodifyingpayoutsbasedonbusinesssegmentandindividualperformanceforanyofficerelectedbytheBoard,includingtheNEOs.

Underthetermsofourannualincentiveplan,theCEO’sbonusandthebonusforeachoftheotherNEOscannotexceed0.3%and0.2%,respectively,ofCashfromOperations.Annualincentivepayoutsrangefrom0%to200%oftarget.

2020 Annual Incentive Goals and Results

AtitsFebruary2020meeting,theCompensationCommitteeapprovedEnterprise-wideobjectivesfor2020reflectingfinancial,strategicandoperationalgoals.ThesegoalsareusedastheEnterpriseComponentforallexecutivesintheCorporationandserveastheonlygoalsfortheCEO,NEOsandallotherofficerselectedbytheBoard.WehavenotmadeanymodificationstoourannualincentivegoalsinresponsetoCOVID-19ortheCARESAct.

FinancialAssessment(70%Weight).Thefinancialtargetsundertheannualincentiveplanalignwiththeguidancewedisclosedpubliclyatthebeginningof2020.Webelievethisapproachtosettingthefinancialmetricsforannualincentivepurposesappropriatelylinkscompensationtooureffectivenessinmeetingourpubliccommitmentstoourstockholders.Ourfinancialcommitmentsareestablishedatthecompletionofourannuallong-rangeplanningprocessandareconsistentwithourlong-rangeplancommitments.Thelong-rangeplanningprocessincludesreviewsoftheassumptionsusedbythebusinesssegmentsingeneratingtheirfinancialprojections,suchasindustrytrendsandcompetitiveassessments,currentandfutureprojectedprogramperformancelevelsandtherisksandopportunitiessurroundingthesebaselineassumptions.Thelong-rangeplanonwhichourfinancialgoalsarebasedistiedtothebusinessenvironmentinwhichweoperateandcanvaryyear-over-year.Ourlong-rangeplanvaluesforSales,SegmentOperatingProfit(seeAppendixAfordefinitionofNon-GAAPterms)andCashfromOperationsaresetforthinthe2020guidanceweprovidedpubliclytoinvestorsinJanuary2020andrepresentthetargetlevel(100%performance)foreachofthesemetrics.Forthepurposesofassessingperformanceunderourannualincentiveprogram,CashfromOperationsresultsareadjustedforunplannedpensioncontributions,sothattheimpactonincentivecompensationisnotafactorinthedecisiontomaketheadditionalpensioncontribution.Weestablishedmaximum(200%performance)andthresholdpayoutlevels(50%performance)aroundthesetargetsbasedonareviewofhistoricalperformanceagainstlong-rangeplancommitmentsforeachofthethreeannualincentivemetrics,whichensurestheappropriatelevelofrigoroneachofthethreshold,targetandmaximumgoals.Weusedstraight-lineinterpolationbetweentargetandbothmaximumandminimumhistoricalperformancelevels.TheCompensationCommitteereviewedthemethodologyandthetargetsestablishedaspartofitsannualprocessduring2020.

2020 Financial Measures Weight 2020 Goals ($) Results ($) Calculated Payout Weighted Payout

Sales 20% 62,750-64,250M 65,398M 160% 32%

SegmentOperatingProfit* 40% 6,800-6,950M 7,152M 156% 63%

CashfromOperations** 40% ≥7,600M 9,208M 200% 80%

FinancialPayoutFactor 175%

* SeeAppendixAfordefinitionofNon-GAAPterms.

** ReportedCashfromOperationsforfiscal2020was$8.2B,whichhasbeenadjustedby$1.0billionforunplannedpensioncontributions.


48

Target Award Enterprise Component×

70% Financial 30% Strategic& Operational

0%

Payout Amount

200%Payout Range

Strategic&OperationalAssessment(30%Weight).Ourstrategicandoperationalperformanceassessmentsareevaluateddifferentlythanfinancialperformanceassessments.Forthe2020performanceyear,abroadsetofgoalswereestablishedforourstrategicandoperationalcommitmentsatthebeginningoftheyear,includinggoalstiedtothedevelopmentofnewbusiness,programperformance,technologicalinnovation,andexecutingonsustainabilityinitiatives,suchasachievementofpre-establishedmeasuresandtargetsrelatedtodiversityandtalentmanagement.Thestrategicandoperationalperformancegoalsarenotmeasuredagainstquantitativeperformancecriteriaforeachgoal,becausesomeareaspirational,cannotbeforecastedreliablyorarequalitativeinnature.Whendeterminingtheoverallpayoutfactor,theCompensationCommitteeconsidersbothquantitativeandqualitativeresultsandappliesdiscretionwhenevaluatingperformanceintotality.Thestrategicandoperationalperformancegoalsandresultsaresetforthbelow.

2020Strategic&OperationalGoalsSummary AssessmentSummaryHighlights

FocusPrograms

ShapeandsecurekeyFocusProgramwinsandachieveKeepSoldProgrammilestones

• Ordersof$68.1billionandyear-endbacklogof$147.1billion

• Achieved92%keepsoldprogrammilestones

• 79%winrateonprogramsthroughouttheyear

International

Continueinternationalexpansionthroughincreasedordersandsales

• $16.4Bofnetsalestointernationalcustomers(includingforeignmilitarysales)

• Continuedstronginternationalinterestinourprogramsandfocusonstrengtheninginternationalrelationships

MissionSuccess

AchieveMissionSuccessmilestones

• Achievedobjectivesforkeymetricswhilemitigatingexternalfactorswithcompletionof95%targetedMissionSuccessevents

• KeyprogrammilestonesachievedthroughouttheCorporationinallcustomeroperationaldomains

ProgramPerformance

Executeprogramstoachievecustomercommitmentsandincreasestockholdervalue

• ImplementednewCorporateFocusSupplier(CFS)initiative

• Returned$3.9billionofCashfromOperationstoourstockholdersthroughdividendsandsharerepurchases

PortfolioShaping/EnterpriseInitiatives

Assessportfolioonanongoingbasistomaximizestockholdervalue,whichincludesM&Aactivity,streamliningoperationsandotherenterpriseinitiatives

• Pursuedstrategicacquisitionsandpartnershipstodrivebusinessgrowth

• Exceededaffordabilitygoalsandrealizedcorporateoverheadsavings

• Achievementorsubstantialprogresson2020SustainabilityManagementPlangoalsrelatingto:BusinessIntegrity,ProductImpact,EmployeeWellbeing,ResourceEfficiencyandInformationSecurity

Innovation

Executetechnologyanddigitaltransformationstrategy,ensuringrobustinnovation,collaborationandstrategicpartnering

• Launched21stCenturyWarfareinitiative,integratingadvancedconceptslikedirectenergyandhypersonicswithmaturing/commercialtechnologylikeadvancedcommunications/5GandArtificialIntelligence

• Continuedimplementationoftransformationaldigitalcapabilitiesandinfrastructureacrosstheenterprise

TalentManagement

Attract,developandretaintheworkforceneededtodelivercommitmentstocustomersandstockholders

• Evolvedthewayweworkanddevelopedinfrastructureforfuturesuccess

• Successfullyexecuteddiversityandinclusioninitiativeswithrespecttorepresentation,attrition,externalhiring,andleadership

• Achievedbusinessobjectivesin19unionnegotiations

Strategic&OperationalPayoutFactor 180%

TheCompensationCommitteereviewedtheseaccomplishmentsandrecommendedthisfactortorecognizetheCorporation’sstrongoperationalperformanceinahighlycompetitiveenvironmentwhileundertakingandexecutingmajorstrategicinitiatives.



Summary of Annual Incentive Payout Calculations

For2020,theCompensationCommitteeapprovedanannualincentivetargetof175%ofbasesalaryforMr.Taiclet,aligningwiththe2020 market rates (50th percentile). Ms. Hewson's andMr. Possenriede's annual incentive target percentage did not change andremainedat175%and105%ofbasesalary,respectively.Mr.St.John'stargetof105%ofbasesalaryalsodidnotchangeinconnectionwithhisappointmentasCOOduring2020.OurbusinesssegmentEVPs'targetsweresetto105%oftheirbasesalaries.ThefinalpayoutfactorandpayoutamountsforeachofourNEOs,asdeterminedbytheBoard,areshownbelow:

Summary of 2020 Enterprise Performance & Overall Payout Factor

Weight 2020 Factors Weighted Payout

Financial 70% 175% 123%

Strategic&Operational 30% 180% 54%

OverallPayoutFactor 177%

Base Salary Target % of Salary Target AwardX

Overall Payout=

Payout

NEO ($) (%) ($) Factor ($)

Mr. Taiclet* 1,700,000 175 1,636,250

177%

2,896,200

Ms. Hewson 1,855,000 175 3,246,250 5,745,900

Mr. Possenriede 935,000 105 981,750 1,737,700

Mr. St. John 935,000 105 981,750 1,737,700

Mr. Ambrose 935,000 105 981,750 1,737,700

Ms. Evans 935,000 105 981,750 1,737,700

*Mr.Taiclet'sannualincentivetargetandpayoutareproratedbasedontimeservedduringfiscalyear2020.

2020 Long-Term Incentive Compensation

Thefollowingsummaryshowsthe2020LTIcompensationmixfortheCEOandotherNEOsandprincipaltermsoftheawards.

PSUs (distributed in common stock):

PerformanceMeasures:Three-yearRelativeTSR(50%),ROIC(25%)&PerformanceCash(25%)

Caps:• 200%oftargetshares• RelativeTSRmeasurecappedat100%iftheCorporation’sTSRis

negative• Valuecappedat400%ofstockpriceondateofgranttimesshares

earned

RSUs (distributed in common stock):

VestingSchedule:RSUscliffvest100%threeyearsafterthegrantdate

3-Year LTIP (paid in cash):

PerformanceMeasures:Three-yearRelativeTSR(50%),ROIC(25%)&PerformanceCash(25%)

Caps:• 200%oftargetamount• RelativeTSRmeasurecappedat100%iftheCorporation’sTSRis

negative• Individualpayoutcappedat$10million


50

Performance-Based Time-Based

70% 30%

vs.

vs.

Long-TermIncentive

CompensationMix

20%LTIP

30%RSUs

50%PSUs

Equity Cash

80% 20%

Indeterminingtheappropriatelevelofequitygrantsfor2020,theCompensationCommitteetookintoconsiderationthelong-termincentivemarketrate(50thpercentile)alongwithavarietyofotherfactors,includingthenumberofawardsoutstandingandsharesremainingavailableforissuanceundertheCorporation’sequityincentiveplans,thenumberofsharesthatwouldbeissuedundercontemplatedawardsovertherangeofpotentialperformanceachievement,thetotalnumberoftheCorporation’soutstandingshares,theresultingimplicationsforstockholderdilutionandthenumberofsharesgrantedtoourexecutivesyear-over-year.

PSU Awards (50% of the LTI award)

PSUawardsarecalculatedbymultiplyingtheoveralltargetLTIawardvaluebythe50%weightingassignedtothePSUportion.ThenumberofPSUsgrantedisdeterminedbasedontheclosingstockpriceoftheCorporation'scommonstockontheNYSEonthedateofgrant.EachNEO’sPSUtargetnumberofsharesisdeterminedasofthegrantdateoftheaward,andtheactualnumberofsharesearnedattheendoftheperiodiscalculatedbasedonourperformancemeasuredagainstthethreefinancialmetricsasfollows:50%RelativeTSR,25%ROICand25%PerformanceCash.

Thenumberofsharesgrantedattheendofthecyclecanrangefrom0%to200%oftheapplicabletargetnumberofshares.IfaverageTSRisnegativeattheendoftheperformancecycle,thepayoutfactorfortheRelativeTSRmeasureiscappedat100%.Inaddition,themaximumvaluethatcanbeearnedunderaPSUawardis400%ofthestockpriceonthedateofgranttimesthesharesearned.Theawardcalculationisformulaicpursuanttotheprovisionsdefinedintheawardagreement,andnoadjustmentcanbemadetothefinalnumberofsharesgranted,whichisdeterminedbasedontheperformanceoutcomesrelativetoourpre-setgoals.Participantsalsoaccruedeferreddividendequivalentsonthesharesearned,whicharepaidincashfollowingvestingoftheunderlyingshares.

RSU Awards (30% of LTI award)

RSUawardsarecalculatedbymultiplyingtheoveralltargetLTIawardvaluebythe30%weightingassignedtotheRSUportion.

ThenumberofRSUsgrantedisdeterminedbasedontheclosingstockpriceoftheCorporation'scommonstockontheNYSEonthedateofgrant.Deferreddividendequivalentsareaccruedduringthevestingperiodandpaidincashfollowingthevestingoftheunderlyingshares.

LTIP Awards (20% of the LTI award)

LTIPawardsarecash-basedandarecalculatedbymultiplyingtheoveralltargetLTIawardvaluebythe20%weightingassignedtotheLTIPportion.EachNEO’sLTIPtargetisdeterminedatthetimeofgrant,andtheactualawardearnedattheendofthethree-yearperformanceperiodiscalculatedbasedonthesameperformancemeasuresasthoseusedforthePSUs(50%RelativeTSR,25%ROICand25%PerformanceCash).

Payoutscanrangefrom0%to200%oftheapplicabletarget.IfaverageTSRisnegativeattheendoftheperformancecycle,thepayoutfactorfortheRelativeTSRmeasureiscappedat100%.Theawardcalculationisformulaicpursuanttotheprovisionsdefinedintheawardagreement,andnoadjustmentcanbemadetothefinalpayoutfactor,whichisdeterminedbasedontheperformanceoutcomesrelativetoourpre-setgoals.Forthe2020-2022LTIPgrants,anyamountpayabletoasingleparticipantinexcessof$10millionwillbeforfeited.

Selection of LTI Performance Measures

TheLTIperformancemetricsapprovedbytheCompensationCommitteearemeasuresthatwebelievemosteffectivelysupportourlong-termbusinessandstrategicgoalsanddirectlytiethelong-termgoalsofourexecutiveleadershipteamtotheinterestsofourstockholders.

Themeasurementsusedforthefinancialcomponentofour2020annualincentiveplan(Sales,SegmentOperatingProfitandCashfromOperations)alsoserveasthefoundationforachievingourlong-termgoalssuchthatwemustconsistentlyachieveorexceedtheCorporation’sannualgoalsinordertoachieveourLTIgoals.

TheselectedLTIperformancemetricsconsistofRelativeTSR(50%weight),ROIC(25%weight)andPerformanceCash(25%weight).WechosethesethreemetricsbecausewebelievetheyrepresentthebestmeasuresofvaluecreationfortheCorporationoveralong-termperiod.Wealsoappliedequalweightingtothemarket-basedmeasureofvaluecreation,TSR,towhatwebelievearethebestinternalmeasuresofvaluecreation,PerformanceCashandROIC.



WeselectedRelativeTSRtomeasureourperformanceagainstourindustrypeers,includingtheS&PAerospaceIndexcompaniesandotherlargepubliclytradedU.S.Governmentcontractors.Becauseeveryindustryfacesdifferentchallengesandopportunities,webelievethatcomparingourTSRagainstpeersfacingasimilarbusinessenvironmentispreferredtocomparisonsoutsideourindustry.

Accordingly,theRelativeTSRComparatorsforthe2020-2022performancecycleareshownbelow:

2020-2022 Relative TSR Comparators

ArconicInc. HoneywellInternationalInc. TextronInc.

BoozAllenHamiltonHoldingCorporation HuntingtonIngallsIndustries,Inc. TheBoeingCompany

CACIInternationalInc. LeidosHoldings,Inc. TransDigmGroupIncorporated

GeneralDynamicsCorporation NorthropGrummanCorporation RaytheonTechnologiesCorporation*

L3HarrisTechnologies ScienceApplicationsInternationalCorp.

*InApril2020,RaytheonCompanyandUnitedTechnologiesCorporationmergedtoformRaytheonTechnologiesCorporation.

BecausetheRelativeTSRindexisnotperfectlyalignedwiththebusinessesinwhichLockheedMartinoperatesandbecauseanynumberofmacro-economicfactorsthatcouldaffectmarketperformancearebeyondthecontroloftheCorporation,weuseROICandPerformanceCashasinternalmeasuresthataredirectlyaffectedbymanagement’sdecisions.ROICmeasureshoweffectivelyweemployourcapitalovertime,whilePerformanceCashprovidesthemeansforinvestmentorvaluecreation.Byincludingacashmeasureinbothourannualandlong-termincentiveplans,theplansmitigatetheriskofshort-termcashstrategiesthatdonotcreatelong-termvalue.

Intandem,webelievethatthesemetricsdrivethebehaviorsofourmanagementteaminwaysthatareintendedtocreatethemostvalueforourstockholders.

Setting Performance Goals for PSUs and LTIP

Ourlong-rangeplanningprocessisusedtoestablishthetarget(100%levelofpayment)forthePerformanceCashandROICmetricsinthePSUandLTIPgrants.Insettingminimumandmaximumlevelsofpayment,wereviewedhistoricallevelsofperformanceagainstlong-rangeplancommitments,andconductedsensitivityanalysesonalternativeoutcomesfocusedonidentifyinglikelyminimumandmaximumboundaryperformancelevels.Levelsbetween100%andtheminimumandmaximumlevelswerederivedusinglinearinterpolationbetweentheperformancehurdles.ThespecificPerformanceCashandROICtargetvaluesforthe2020-2022PSUandLTIPplansarenotpubliclydisclosedatthetimeofgrantduetotheproprietarynatureandcompetitivesensitivityoftheinformation.However,themethodusedtocalculatetheawardswillbebasedonactualperformancecomparedtotheCorporation’s2020-2022targets,whichusestraight-lineinterpolationbetweenpoints.

Theindividualawardagreementsrequirepre-specifiedadjustmentstoensurethattheultimatepayoutsarenotimpactedtothebenefitordetrimentofmanagementbyspecifiedeventsthatwouldresultinadifferencebetweenplannedandactualfinancialresults,suchasunplannedpensioncontributions,changesinaccounting(GAAP)standards,theimpactofanacquisitionordivestiturevaluedatmorethan$1billion,orchangesintaxlaworinterpretationsrelatedtoamortizationforresearchandexperimentalexpenditures.

InSeptember2020,theCompensationCommitteeapprovedchangestocurrentandfutureLTIawardagreementstoallowtheCorporationtoadjustfortheimpact,ifany,fromtheCARESActprovisionsonpayrolltaxdeferralsandprogresspaymentclassdeviationchanges.TheCompensationCommitteeapprovedtheseamendmentstooutstandinglongtermincentiveawardagreementstoensurethattheultimatepayoutsarenotimpactedtoaparticipant’sbenefitordetrimentbygovernmentstimulusandassistanceprogramsenactedinresponsetoCOVID-19.Noadjustmentsweremadetoour2018-2020resultsgiventheCorporationusedtheacceleratedprogresspaymentsfromtheU.S.Governmentandpayrolltaxbenefittoacceleratepaymentstooursuppliersduring2020.OurdeferralofpayrolltaxesundertheCARESActfrom2020tofutureperiodsnowwillnothavetheunintendedeffectofincreasingourcashperformanceduring2020(andcorrespondingdecreaseincashinfutureperiods)andtheaccelerationofprogresspaymentstousbytheU.S.GovernmentundertheCARESActwillalsonothavetheunintendedeffectofincreasingourcashperformanceduring2020.TheamendmentsadoptedinSeptember2020alsoallowtheCorporationtoadjustfornon-cashsettlementchargesassociatedwithpensionrisktransfertransactions.Wehaveinrecentyearsenteredintopensionrisktransfertransactionstomanageourpensionliabilitiesthroughthepurchaseofgroupannuitycontractsforportionsofouroutstandingdefinedbenefitpensionobligationsandfuturetransactionscouldresultinanon-cashsettlementchargetoearningsthatshouldnotaffectthepayouttomanagement.

TheCompensationCommitteedoesnothavediscretiontoadjusttheresultsofthePSUandLTIPawardsbeyondtheadjustmentsspecifiedintheawardagreements.


52

2020-2022 Performance Goals

Relative TSR (50%)* Performance Cash (25%) ROIC (25%)

Percentile Rank Payout Factor Goals Payout Factor Goals Payout Factor

75th–100th 200% Plan+≥$2.0B 200% Plan+≥160bps 200%

60th 150% Plan+$1.5B 175% Plan+120bps 175%

50th 100%(Target) Plan+$1.0B 150% Plan+80bps 150%

40th 50% Plan+$0.5B 125% Plan+40bps 125%

35th 25% Plan 100% Plan 100%

<35th 0% Plan-$0.2B 75% Plan-10bps 75%

* 2020-2022RelativeTSRperformanceismeasuredagainstourindustrypeersintheS&P500Aerospace&DefenseIndex(S&PAerospace)andotherpubliclytradedU.S.GovernmentContractors,totaling14industrypeers(SeePage52forRelativeTSRComparators).

Plan-$0.5B 50% Plan-20bps 50%

Plan-$0.7B 25% Plan-30bps 25%

BelowPlan-$0.7B 0% BelowPlan-30bps 0%

2018-2020 LTIP and PSU AwardsThecash-basedLTIPandshare-basedPSUpayoutsforthethree-yearperformanceperiodendedDecember31,2020shownbelowwerecalculatedbycomparingactualcorporateperformanceforeachmetricfortheperiodJanuary1,2018throughDecember31,2020,againstatableofpaymentlevelsfrom0%to200%(withthe100%payoutlevelbeingconsideredtarget)establishedatthebeginningoftheperformanceperiodinFebruary2018.ExceptasdiscussedaboveinrelationtogovernmentstimulusandassistanceprogramsenactedinresponsetoCOVID-19andpensionrisktransfertransactions,wehavenotmadeanymodificationstoourcompensationprogramsortoourtargetsorgoals,inresponsetoCOVID-19ortheCARESAct.

Measure Performance Target Performance Result Weighting Payout Factor

RelativeTSR 50thPercentile 78thPercentile 50% 200%

PerformanceCash* $17.0B $20.9B 25% 200%

ROIC* 20.7% 23.1% 25% 200%

* SeeAppendixAfordefinitionofNon-GAAPterms.

2018-2020 LTIP PayoutsBasedonaweightedpayoutfactorof200%,thefollowingtableshowsthepayoutsunderthe2018-2020LTIPmadein2021.

NEO* Target ($) Payout ($)

Ms.Hewson 2,447,000 4,894,000

Mr.Possenriede** 300,000 600,000

Mr.St.John 720,000 1,440,000

Mr.Ambrose 720,000 1,440,000

Ms.Evans** 380,000 760,000

* ExcludesMr.Taicletwhodidnotreceivea2018-2020LTIPaward.** Reflectstargetsandpayoutsassociatedwiththe2018-2020awardsreceivedinpriorVicePresidentroles.

2018-2020 PSU AwardsThe2018-2020targetPSUawardvaluewasallocatedtoeachperformancemeasurebasedonthepre-definedweightings,namely50%toRelativeTSR,25%toROIC,and25%toPerformanceCash.PSUawardsearnedarecalculatedbymultiplyingthepayoutfactorforeachperformancemetricbythetargetnumberofunitsforeachperformancemetric.TheactualvaluerealizedbytheNEOsatvestingalsodependsonourstockprice,whichmaybehigherorlowerthanthegrantdatefairmarketvalue.

2018-2020 Target PSUs (#) Total SharesDistributed/EarnedNEO** Relative TSR Performance Cash* ROIC*

Ms.Hewson 7,270 4,313 4,313 31,792

Mr.Possenriede*** 90 53 53 392

Mr.St.John 2,140 1,269 1,269 9,356

Mr.Ambrose 2,140 1,269 1,269 9,356

Ms.Evans*** 114 67 67 472

* SeeAppendixAfordefinitionofNon-GAAPterms.** ExcludesMr.Taicletwhodidnotreceivea2018-2020PSUaward.*** Reflectstargetsandpayoutsassociatedwiththe2018-2020awardsreceivedinpriorVicePresidentroles.ForMs.Evans,sharesearnedwereproratedto

reflecttimeservedasanactiveemployeeduringthethree-yearvestingperiod.



2021 Incentives

2021 Annual Incentive Goals

Therewerenochangestoourannualincentiveplandesignforthe2021performanceyear,althoughtheBoardofDirectors,actingupontherecommendationoftheCompensationCommittee,inFebruary2021approvedtheLockheedMartinCorporation2021ManagementIncentiveCompensationPlantoreplacetheexistingMICP.The2021MICPeliminatesprovisionsinthepriorMICPthatwereintendedtoqualifyMICPpaymentsasperformance-basedcompensationsubjecttoanexemptiontothedeductibilitylimitofSection162(m)oftheInternalRevenueCode,whichwasrepealedin2017.The2021MICPalsoalignsthepro-rationprovisionstoourbroad-basedincentiveplan,whichprovidesfordailypro-rationofpayouts.

TheCompensationCommitteeapprovedthekeycorporatecommitmentssetforthbelowforpurposesofassessing2021performance.

2021 Financial Goals (Weight 70%)

Thefinancialcommitmentsareconsistentwithourlong-rangeplancommitments,andarethesamerangesweprovidedaspublicguidanceinJanuary2021inouryear-endearningsrelease.Thesecommitmentsfor2021aresetforthbelow.

2021 Commitments Weighting 2021 Goals ($)

Sales 20% 67,100-68,500M

SegmentOperatingProfit 40% 7,355-7,495M

CashfromOperations 40% ≥8,300M

Forthepurposesofassessingperformanceunderourannualincentiveprogram,CashfromOperationsresultsareadjustedforunplannedpensioncontributionssothattheimpactonincentivecompensationisnotafactorinthedecisiontomakeadditionalpensioncontributions.

2021 Strategic and Operational Goals (Weight 30%)

• FocusPrograms:ShapeandsecureKeyFocusProgramwinsandachieveKeepSoldProgrammilestones

• International:Continueinternationalexpansionthroughincreasedordersandsales

• MissionSuccess:AchieveMissionSuccessmilestones

• EnterprisePerformance:Achievecustomercommitmentsandincreasestockholdervaluethroughprogramperformance,productdeliveries,supplychainperformance,affordabilityandsustainability

• PortfolioShaping/EnterpriseInitiatives:AssesstheCorporationportfolioonanongoingbasistomaximizestockholdervalue,includingM&Aactivity,costcompetitivenessandotherEnterprise-wideinitiatives

• Innovation:Execute21stCenturyWarfarestrategytoincludetechnologydevelopment,demonstrations,andcommercialpartnerships.Driveinfrastructuremodernization,technologydevelopmentandfunctionalcapabilityadoptiontodigitallytransformtheenterprise

• TalentManagement:Attract,developandretaintheworkforceneededtodelivercommitmentstocustomers,employeesandstockholders

2021 Long-Term Incentive Award Opportunities

For2021,theLTIawardmixisthesameaslastyearandfortheCEOandotherNEOsisallocated50%towardPSUs,20%towardLTIPand30%towardRSUs.

Thetermsandperformancemeasuresofthe2021-2023PSUsandLTIPawardsaresimilartothe2020-2022awards(seepages51-53).The2021-2023PSUandLTIPawardagreementsrequirespecifiedadjustmentstoensurethattheultimatepayoutsarenotimpactedtothebenefitordetrimentofmanagementbyspecifiedeventsthatwouldresultinadifferencebetweenplannedandactualfinancialresults,includingtheimpactofCARESActprovisionsonpayrolltaxdeferralsandprogresspaymentchanges,pensionrisktransfertransactions,orchangesintaxlaworinterpretationsrelatedtoamortizationforresearchandexperimentalexpenditures.

InFebruary2021,theCompensationCommitteeapprovedanewRelativeTSRComparatorspeergroupbeginningwiththe2021-2023performancecycle.WhiletheS&PAerospace&Defensepeersandotherlargegovernmentcontractorshasbeen,inourjudgment,thepreferredpeergroupagainstwhichtocompareourRelativeTSR,ithasbeenimpactedbymultiplebusinesstransactionsandexhibitedsignificantvolatilityinthenumberofitsconstituentsoverthepastseveralyears.Tomoderatethepotentialeffectofcorporate


54

transactionsonthepeergroup,theCompensationCommitteeapprovedanexpandedpeergroupof27companiesthatmeetthefollowingparametersasofJanuary1,2021:

• GlobalIndustryClassificationStandard-GICS2010-CapitalGoods• ListedonamajorUSindex• Revenue>$10BandMarketcap>$5B

Other Compensation Matters

Our Use of Independent Compensation Consultants

Theindependentcompensationconsultantprovidesimportantinformationaboutmarketpractices,thetypesandamountsofcompensationofferedtoexecutivesgenerallyandtheroleofcorporategovernanceconsiderationsinmakingcompensationdecisions.TheCompensationCommittee’scharterauthorizesittoretainoutsideadvisorsthatitbelievesareappropriatetoassistinevaluatingexecutivecompensation.

For2020,theCompensationCommitteecontinuedtoretainMeridianasanindependentcompensationconsultant.InconnectionwithitsretentionofMeridian,theCompensationCommitteeconsideredthefollowingfactorsinassessingMeridian’sindependence:

• Meridian’sservicesfortheCorporationarelimitedtoexecutiveanddirectorcompensation.

• ThecompensationpaidtoMeridianislessthan1%ofMeridian’srevenues.

• Meridianhasbusinessethicsandinsidertradingandstockownershippolicies,whicharedesignedtoavoidconflictsofinterest.

• MeridianemployeessupportingtheengagementandtheirimmediatefamilymembersdonotownLockheedMartinsecurities.

• MeridianemployeessupportingtheengagementhavenobusinessorpersonalrelationshipswithmembersoftheCompensationCommitteeorwithanyLockheedMartinexecutiveofficer.

AtitsFebruary2021meeting,theCompensationCommitteerenewedtheengagementofMeridian.Atthattime,Meridianconfirmedthecontinuingaccuracyofeachofthefactorsdescribedabove.

ThenatureandscopeofMeridian’sengagementwasdeterminedbytheCompensationCommitteeandnotlimitedinanywaybymanagement.

Policy Regarding Timing of Equity Grants

Wehaveacorporatepolicystatementconcerningthegrantofequityawards.Underthatpolicy:

• TheCompensationCommitteeisresponsiblefordeterminingthegrantdateofallequityawardstoexecutiveofficers.

• Noequityawardmaybebackdated.Afuturedatemaybeusedif,amongotherreasons,theCompensationCommittee’sactionoccursinproximitytothereleaseofearningsorduringatradingblackoutperiod.

• ProposedequityawardsarepresentedtotheCompensationCommitteeinFebruaryofeachyear.Off-cycleawardsmaybeconsideredinspecialcircumstances,whichmayincludehiring,retentionoracquisitiontransactions.

Inaddition,ourequityplansexplicitlyprohibitrepricingofstockoptionsorpayingcashforunderwaterstockoptions.

Clawback and Other Protective Provisions

TheGovernanceGuidelinesincludeaclawbackpolicy,whichprovidesthatiftheBoardofDirectorsdeterminesthatanofficer’sintentionalmisconduct,grossnegligenceorfailuretoreportsuchactsbyanotherpersonwasacontributingfactorinrequiringustorestateanyofourfinancialstatementsorconstitutedfraud,briberyoranotherillegalact(orcontributedtoanotherperson’sfraud,briberyorotherillegalact)whichadverselyimpactedourfinancialpositionorreputation,thentheBoardshalltakesuchactionasitdeemsinthebestinterestoftheCorporationandnecessarytoremedythemisconductandpreventitsrecurrence.Amongotheractions,theBoardmayseektorecoverorrequirereimbursementofanyamountawardedtotheofficerafterJanuary1,2008,intheformofanannualincentivebonusorLTIaward.

InFebruary2019,theCompensationCommitteeenhancedtheclawbackpolicytoensurethatithasthemostappropriatelevelofdiscretionaryauthorityandpowerstoprotecttheCorporationanditsstockholders'interests.TheseenhancementsweretheresultoftheCompensationCommittee'sconsiderationofanumberofhighlypublicizedeventsinvolvinghigh-levelexecutivesofothercompanies.FollowingtheCompensationCommittee’sproactiveanalysisoftheCorporation'spoliciesinlightoftheseevents,the



CompensationCommitteeamendedtheclawbackpolicytoaddtwoadditionalsituationsinwhichincentivecompensationpaidtoanofficercouldbeclawedback:(1)anofficer’sintentionalmisconductorgrossnegligencethatcausesseverereputationalorfinancialharmtotheCorporationand(2)anofficer’smisappropriationofLockheedMartinProprietaryInformationthatcauses,orisintendedtocause,severereputationalorfinancialharmtotheCorporation.Theseadditionalsituationsapplytoincentivecompensationawardedin2019andthereafter.

Theclawbackpolicyisincorporatedintoourannualincentiveplanandintheawardagreementsforthelong-termincentiveawards,coveringallvariableincentivecompensation.TherewerenoeventsrequiringBoardconsiderationofaclawbackactionduring2020.IntheeventtheBoardrecoupsincentivecompensationunderthepolicy,managementintendstodisclosetheaggregateamountofincentivecompensationrecovered,solongastheunderlyingeventhasalreadybeenpubliclydisclosedinourfilingswiththeSEC.ThisdisclosurewouldappearintheproxystatementfollowinganysuchBoardactionandwouldprovidetheaggregateamountofrecoveryforeacheventifthereismorethanoneapplicableevent.TheawardagreementsfortheNEOsalsocontainpost-employmentrestrictivecovenants.Thepost-employmentrestrictionswereincorporatedintoallexecutive-levelawardagreementsbeginningin2011,andcompensationawardedunderthoseagreementsmaybesubjecttoclawbackintheeventanexecutivebreachesanyofthepost-employmentrestrictivecovenants.

Anti-Hedging and Pledging Policy

OurpoliciesprohibithedgingandpledgingofLockheedMartinstockbyalldirectors,officersandemployees.Underourpolicies,LockheedMartindirectors,officersandemployeesmaynotpurchaseorsellderivativesecuritiesbasedonLockheedMartincommonstockorotherLockheedMartinsecurities.Thispolicyalsoprohibitshedgingormonetizationtransactionssuchasforward-salecontracts,equityswaps,collarsandexchangefunds,thataredesignedtohedgeoroffsetanydecreaseinthemarketvalueofequitysecurities,lockinthen-currentmarketgainswithoutthesaleoftheunderlyingsecurity,ortransactionsinwhichthedirectororemployeemaydivestaspectsoftherisksandrewardsofownership.ThispolicyappliesbothtosharesofLockheedMartincommonstock(1)thataregrantedtodirectors,officersoremployeesbyLockheedMartinaspartoftheircompensationand(2)held,directlyorindirectly,bydirectors,officersoremployees.

Stock Ownership Requirements for Key Employees


56

6xbasesalaryforCEOandChairman

4xbasesalaryforChiefFinancialOfficerandChiefOperatingOfficer

3xbasesalaryforExecutiveVicePresidents

2xbasesalaryforSeniorVicePresidentsandElectedVicePresidents

NEOsarerequiredtoachieveownershiplevelswithinfiveyearsofassumingtheirroleandmustholdnetsharesfromvestedRSUsandPSUsandnetsharesfromoptionsexerciseduntilthevalueofthesharesequalsthespecifiedmultipleofbasesalary.Thesecuritiescountedtowardtheirrespectivetargetthresholdincludecommonstock,unvestedRSUs,andstockunitsunderour401(k)plansandotherdeferralplans.UnvestedPSUsattargetarenotcountedtowardsownershiplevels.AsofDecember31,2020,eachofourNEOshadexceededtheirrespectiveownershiprequirements.

Tobetteraligntheirinterestswiththelong-terminterestsofourstockholders,weexpectourofficers(includingtheNEOs)andothermembersofmanagementtomaintainanownershipinterestintheCorporationbasedonthefollowingguidelines:

StockOwnershipAchievement

6.2x

17.9x

6.2x

4.3x

10.1x

6x

6x

4x

4x

3x

ActualStockOwnership(xtimesbasesalary) StockOwnershipTarget(xtimesbasesalary)

JamesD.Taiclet

MarillynA.Hewson

KennethR.Possenriede

FrankA.St.John

RichardF.Ambrose

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Benefit, Retirement and Perquisite ProgramsWeofferothercompensatoryarrangementstoourNEOs.Thepurposeforthesebenefitsistoensuresecurityofexecutives,provideassistancewithbusiness-relatedexpenses,andbecompetitivewiththeothercompaniesinourindustry.BelowisasummaryofprogramsavailabletoourNEOs.FurtherdetailsaredescribedinfootnotestotheSummaryCompensationTableonpage58.

Health,WelfareandRetirementBenefits.OurNEOsareeligibleforsavings,pension,medical,disability,andlifeinsurancebenefitsundertheplansavailabletosalaried,non-unionemployees.WeoffersupplementalpensionandsavingsplanstomakeupforbenefitsthatotherwisewouldbeunavailableduetoInternalRevenueService(IRS)limitsonqualifiedplans.Theseplansarerestorativeanddonotprovideanenhancedbenefit.Wealsoofferaplanforthedeferralofshort-termandlong-termcashperformanceincentivecompensation.PensionandsupplementalpensionplansthattheNEOsparticipateinwerecompletelyfrozeneffectiveJanuary1,2020.

PerquisitesandSecurity.PerquisitesprovidedtotheNEOsincludeexecutivephysicals,relocationassistance(whenapplicable)andpersonaltravelonthecorporateaircraft,aswellashomeandpersonalsecurityasneededtoaddresssecurityconcernsarisingoutofourbusiness.Webelievesecurityisnecessaryandgenerallyprovidedtoexecutiveswithinourindustrygiventhenatureofourbusiness.Intheeventofathreattoanexecutiveofficer,theCBSCommitteereviewsthesecurityrecommendedbyourChiefSecurityOfficer,andapprovesaccordingly.Furthermore,ourBoardhasdirectedourCEOtousecorporateaircraftforsecurityreasonswhileonpersonaltravel.OtherNEOsmayusethecorporateaircraftforpersonaltraveldependentuponcircumstancesandavailability.For2020,personaluseofthecorporateaircraftforMr.TaicletandMs.Hewsonamountedto$284,175and$284,495,respectively.ForMr.TaicletandMr.St.John,theperquisitesamountsreportedfor2020included$295,281and$116,400,respectively,associatedwiththeirrelocationexpensesincurredduring2020andpursuanttoourrelocationpolicy.

TaxAssistance.Wedonothaveagreementsorseverancearrangementsthatprovidetaxgross-upsforexcisetaxesimposedasaresultofachangeincontrol.In2020,weprovidedtaxassistancefortaxablesecurityexpenses,relocation-relatedexpensesinaccordancewithourrelocationpolicies,andtravelexpensesforafamilymemberaccompanyingaNEOforabusinessreason.Inaddition,wepayanamountestimatedtocoverthestateincometaximposedonemployeeswhobecamesubjecttoincometaxinastateotherthantheirstateofresidenceduetobusinesstravel.

Taxassistancewasprovidedfortheseitemsbecausetheassociatedtaxliabilityimposedontheexecutivewouldnothavebeenincurredunlessbusinessreasonsrequiredtheitemstobeprovidedortheexecutivetotraveltothenon-residentstate.ForMs.Hewson,thetotaltaxassistanceamountreportedfor2020includeda$61,256paymentattributabletonon-residentstateincometaxes,includingpaymentassociatedwithlong-termincentiveawards,whichwereincurredasaresultofherbusinesstraveltoastateotherthanherstateofresidence.Inconnectionwiththeirnewpositions,Mr.Taiclet,Mr.PossenriedeandMr.St.Johnrelocatedduring2020,2019and2019,respectively,andincurredcertainrelatedexpensesthatweretax-assistedunderourrelocationpolicy.ForMr.TaicletandMr.St.John,thetotaltaxassistanceamountsreportedfor2020included$174,136and$68,204,respectively,associatedwiththeirrelocationexpensesincurredpursuanttoourrelocationpolicy.

Post-Employment, Change in Control, Divestiture and Severance BenefitsOurNEOsdonothaveemploymentagreementsbutparticipateintheLockheedMartinCorporationExecutiveSeverancePlan.BenefitsarepayableunderthisplanintheeventofaCorporation-initiatedterminationofemploymentotherthanforcause.AlloftheNEOsarecoveredundertheplan.ThebenefitpayableinalumpsumundertheplanistwoweeksofbasicseveranceplusasupplementalpaymentofonetimestheNEO’sbasesalaryandtheequivalentofoneyear’stargetannualincentivebonus.FortheCEO,themultiplieris2.99insteadofone.NEOsparticipatingintheplanalsoreceivealumpsumpaymenttocoverthecostofmedicalbenefitsforoneyearinadditiontooutplacementandrelocationservices.Toreceivethesupplementalseverancebenefit,theNEOmustexecuteareleaseofclaimsandanagreementcontainingpost-employment,non-competeandnon-solicitationcovenantsidenticaltothoseincludedinourNEOs’LTIawardagreements.

WithrespecttoLTI,uponcertainterminationsofemployment,includingdeath,disability,retirement,layoff,divestitureorachangeincontrol,theNEOsmaybeeligibleforcontinuedvestingonthenormalschedule,immediatepaymentofbenefitspreviouslyearnedoracceleratedvestingofLTIinfulloronaproratabasis.Thetypeofeventandthenatureofthebenefitdeterminewhichoftheseapproacheswillapply.Thepurposeoftheseprovisionsistoprotectpreviouslyearnedorgrantedbenefitsbymakingthemavailablefollowingthespecifiedevent.Weviewthevesting(orcontinuedvesting)tobeanimportantretentionfeatureforsenior-levelemployees.Becausebenefitspaidatterminationconsistofpreviouslygrantedorearnedbenefits,wedonotconsiderterminationbenefitsasaseparateitemincompensationdecisions.OurLTIawardsdonotprovidefortaxassistance.

Intheeventofachangeincontrol,ourplansprovidefortheaccelerationofthepaymentofthenon-qualifiedportionofearnedpensionbenefitsandnon-qualifieddeferredcompensation.AllLTIawardsrequirea“doubletrigger”forvestingtoaccelerate(bothachangeincontrolandaqualifyingterminationofemployment),unlessthesuccessordoesnotassumeorcontinuetheawardsorprovidesubstituteawards.



Summary Compensation TableThefollowingtableshowsannualandlong-termcompensationawarded,earnedorpaidforservicesinallcapacitiestotheNEOsforthefiscalyearendedDecember31,2020and,whereapplicable,thepriorfiscalyears.Numbershavebeenroundedtothenearestdollar.Mr.Taicletreceivedcompensationforserviceasanon-employeedirectoruntilJune14,2020.Mr.Taiclet'sdirectorcompensationisincludedinStockAwardscolumn(e)andAllOtherCompensationcolumn(i).

SalaryStock

Awards

Non-Equity Incentive PlanCompensation

Change in Pension

Value and Nonqualified

Deferred Compensation

EarningsAll Other

Compensation Total

TotalWithout

Change In Pension

Value*

Name and Principal Position Year ($) ($) ($) ($) ($) ($) ($)

(a) (b) (c) (e) (g) (h) (i) (j)

JamesD.TaicletChairman,PresidentandChiefExecutiveOfficer

2020 915,385 18,611,850 2,896,200 0 936,934 23,360,369 23,360,369

MarillynA.HewsonStrategicAdvisortotheCEO;FormerChairman,PresidentandChiefExecutiveOfficer

2020 1,877,519 12,818,340 10,639,900 2,445,000 719,066 28,499,825 26,054,825

2019 1,857,301 11,375,516 10,377,344 6,478,070 825,751 30,913,982 24,435,912

2018 1,769,262 9,788,097 8,758,727 68 1,200,459 21,516,613 21,516,545

KennethR.PossenriedeChiefFinancialOfficer

2020 1,000,769 3,973,848 2,337,700 523,825 170,581 8,006,723 7,482,898

2019 883,932 3,579,885 2,380,880 1,678,553 738,980 9,262,230 7,583,677

FrankA.St.JohnChiefOperatingOfficer

2020 981,202 3,984,777 3,177,700 968,931 406,495 9,519,105 8,550,174

2019 900,673 3,122,369 2,503,697 1,410,068 583,012 8,519,819 7,109,751

2018 848,462 2,880,137 2,081,940 0 255,109 6,065,648 6,065,648

RichardF.AmbroseExecutiveVicePresident,Space

2020 947,212 3,418,465 3,177,700 528,557 181,380 8,253,314 7,724,757

2019 900,673 3,122,369 2,845,950 1,513,734 200,781 8,583,507 7,069,773

2018 857,500 2,880,137 2,303,783 138,976 113,105 6,293,501 6,154,525

MicheleA.EvansFormerExecutiveVicePresident,Aeronautics

2020 947,212 3,845,716 2,497,700 858,837 218,638 8,368,103 7,509,266

2019 900,673 3,122,369 2,450,580 1,174,554 238,639 7,886,815 6,712,261

Name and Principal Position (Column (a))InformationisprovidedforMr.Taicletfor2020onlyandforMr.PossenriedeandMs.Evansfor2020and2019onlybecausetheywerenotNEOsinprioryears.Mr.TaicletwaselectedPresidentandChiefExecutiveOfficereffectiveJune15,2020andChairmaneffectiveMarch1,2021.Ms.HewsontransitionedtoExecutiveChairmaneffectiveJune15,2020,afterservingasChairman,PresidentandChiefExecutiveOfficerandretiredasExecutiveChairmaneffectiveMarch1,2021.Mr.St.JohnwaspromotedtoChiefOperatingOfficereffectiveJune15,2020,afterservingasExecutiveVicePresident,RotaryandMissionSystemssinceAugust2019.Ms.EvanspassedawayonJanuary1,2021.

Salary (Column (c))Salaryispaidweeklyinarrears.Theamountofsalaryreportedmayvaryfromtheapprovedannualrateofpaybecausethesalaryreportedinthetableisbasedontheactualnumberofweeklypayperiodsinayear.Amountsfor2020includepaymentofcashinlieuofvacationforMr.Possenriede$53,558(ofwhich$17,981wasthendonatedundertheCorporation'sleavedonationprogram)andMr.St.John$35,577.


58

Stock Awards (Column (e))RepresentstheaggregategrantdatefairvaluecomputedinaccordancewithFinancialAccountingStandardsBoard(FASB)AccountingStandardsCodification(ASC)Topic718(ASC718),forRSUsgrantedin2020,2019and2018andPSUsgrantedin2020,2019and2018,disregardingpotentialforfeituresbasedonservicerequirements.In2020,RSUsandPSUsweregrantedinFebruary2020(toMs.Hewson,Mr.Possenriede,Mr.Ambrose,Ms.EvansandMr.St.John)andJuly2020(toMr.TaicletandMr.St.John).Inaddition,Mr.Taiclet'sstockawardsincludeanawardof372.7919stockunitsmadeonJanuary30,2020undertheAmendedandRestatedDirectorsEquityPlan(DEP)forhis2020serviceasanon-employeedirectoronourBoard.ThisawardhadanaggregategrantdatefairvaluecomputedinaccordancewithASC718of$162,500basedontheclosingpriceofourstock($435.90)onthedateofgrantandwasforfeiteduponMr.TaicletassumingtheroleofPresidentandChiefExecutiveOfficeronJune15,2020.

2020 AggregateGrant Date

Fair Value RSUs

2020 AggregateGrant Date

Fair Value PSUs

($) ($)

Mr.Taiclet* 9,880,058 8,731,792

Ms.Hewson 4,494,789 8,323,551

Mr.Possenriede 1,393,385 2,580,463

Mr.St.John 1,393,132 2,591,645

Mr.Ambrose 1,198,610 2,219,855

Ms.Evans 1,348,437 2,497,279

*DoesnotincludeMr.Taiclet'sequityawardforhis2020serviceasanon-employeedirectorwithanASC718aggregategrantdatefairvalueof$162,500.

TheASC718grantdatefairvalueofone2020RSU($384.17forgrantsmadeinFebruary2020,$382.07forMr.Taiclet'sreplacementequityawardgrantedinJuly2020and$382.01forothergrantsmadeinJuly2020),2019RSU($303.59)and2018RSU($354.60),istheclosingpriceofoneshareofourstockonthedateofgrant,discountedtotakeintoaccountthedeferreddividendequivalentsthatareaccrueduntilvesting.

ValuesforthePSUs,whicharesubjecttoperformanceconditions,arebasedontheprobableoutcomeonthegrantdateofthreeseparateperformanceconditions(50%ofthetargetsharesareearnedbaseduponRelativeTSR,25%ofthetargetsharesareearnedbaseduponPerformanceCash,and25%ofthetargetsharesareearnedbaseduponROIC).

Thegrantdatefairvalueof$469.44forFebruary2020,$571.15forJuly2020,$301.03for2019and$420.75for2018fortheRelativeTSRportionofthePSUawardwasdeterminedusingaMonteCarlosimulationmodel.Thevaluewasdeterminedusingthehistoricalstockpricevolatilitiesofthecompaniesinourcomparatorgroupoverthemostrecent2.84-yearperiodforFebruary2020,2.43-yearperiodforJuly2020,and2.86-yearperiodfor2019and2018,respectively,assumingdividendsforeachcompanyarereinvestedonacontinuousbasisandarisk-freerateofinterestof1.08%forFebruary2020,0.16%forJuly2020,2.48%for2019and2.38%for2018,andthatdeferreddividendequivalentsaccruedonsharesearnedwillbepaidincashuponvesting.Thegrantdatefairvalueof$384.17forFebruary2020,$382.04forJuly2020,$303.59for2019and$354.60for2018forthePerformanceCashandROICportionsoftheawardsisbasedontheclosingpriceofourstockonthedateofgrant,discountedtotakeintoaccountthedeferreddividendequivalentsthatareaccrueduntilvesting.Inadditiontothelevelofperformanceachieved,thevalueofthePSUsearnedwillbedeterminedbythepriceofourstockonthedateanysharesareissuedattheendoftheperformanceperiod,whichmaybemoreorlessthanthegrantdatefairvalue.

Themaximumgrantdatefairvaluesofthe2020PSUawards,assuminga200%maximumpayoutonallthreemetricsareasfollows:Mr.Taiclet:$17,463,583;Ms.Hewson:$16,647,102;Mr.Possenriede:$5,160,926;Mr.St.John:$5,183,289;Mr.Ambrose:$4,439,711;andMs.Evans$4,994,557.

Themaximumgrantdatefairvaluesofthe2019PSUawards,assuminga200%maximumpayoutonallthreemetricsareasfollows:Ms.Hewson:$14,197,080;Mr.Possenriede:$4,468,142;Mr.St.John:$3,897,381;Mr.Ambrose:$3,897,381;andMs.Evans$3,897,381.

Themaximumgrantdatefairvaluesofthe2018PSUawards,assuminga200%maximumpayoutonallthreemetricsareasfollows:Ms.Hewson:$12,235,264;Mr.Ambrose:$3,600,760;andMr.St.John:$3,600,760.



Non-Equity Incentive Plan Compensation (Column (g))IncludestheamountpaidforannualincentivebonusespaidundertheLockheedMartinCorporationAmendedandRestated2006ManagementIncentiveCompensationPlan(MICP).TheCompensationCommitteewillcontinuetousediscretiontoassessperformanceagainstobjectivesestablishedatthebeginningoftheyear.WealsoreportamountsearnedunderourLTIPcashawardsinthethree-yearperiodendingonDecember31oftheyearreportedinColumn(g)ofthetable.

Thetablebelowshowstherespective2020annualincentivebonusandamountearnedunderthe2018-2020cashLTIPandreportedforeachNEO:

2020 AnnualIncentive Payout

2018-2020LTIP Payout

($) ($)

Mr.Taiclet 2,896,200 0

Ms.Hewson 5,745,900 4,894,000

Mr.Possenriede 1,737,700 600,000

Mr.St.John 1,737,700 1,440,000

Mr.Ambrose 1,737,700 1,440,000

Ms.Evans 1,737,700 760,000

Change in Pension Value and Nonqualified Deferred Compensation Earnings (Column (h))ReportsthechangeinthepresentvalueofthepensionbenefitfortheNEOfortheyearreported(forexample,fromDecember31,2019toDecember31,2020)andisnottheamountthatwillbepaidtotheNEO.Thiscolumnalsoreportsabove-marketearningsoncompensationthatwasdeferredbefore2009bytheNEOsundertheInterestInvestmentOptionofourDeferredManagementIncentiveCompensationPlanasfollows:Ms.Hewson$6,661;Mr.Ambrose$2,144;andMs.Evans$125.In2019,thiscolumnalsoreportedabove-marketearningsoncompensationthatwasdeferredbefore2009bytheNEOsundertheInterestInvestmentOptionasfollows:Ms.Hewson$5,259;Mr.Ambrose$1,693;andMs.Evans$99.In2018,thiscolumnalsoreportedabove-marketearningsoncompensationthatwasdeferredbefore2009bytheNEOsundertheInterestInvestmentOptionasfollows:Ms.Hewson$68andMr.Ambrose$22.Above-marketearningsrepresentthedifferencebetweentheinterestrateusedtocalculateearningsundertheInterestInvestmentOptionand120%oftheapplicablefederallong-termrateprescribedbytheInternalRevenueCode.TheInterestInvestmentOptionwasclosedtonewdeferralsandtransfersfromotherinvestmentoptionseffectiveJuly1,2009.Seethe2020NonqualifiedDeferredCompensationtableonpage69foradditionalinformation.

ThedisclosureofthechangeinpresentvalueofthepensionbenefitisbasedontheCorporation’sfinalaveragecompensationformulainitsdefinedbenefitplanwhichmultiplies(x)apercentage(1.25%ofcompensationbelowthesocialsecuritywagebaseand1.5%abovethatlevel)times(y)yearsofserviceendingwith2019times(z)theaverageoftheemployee’shighestthreeyearsofcompensationinthelasttenyearsendingwith2015.Thisisthesameformulausedforallparticipantsaccruingapensionbenefitpriorto2020andnoneoftheNEOshasbeencreditedwithanyextrayearsofserviceorprovidedabenefitfromaspecialorenhancedformula.Underathree-yearfinalaveragecompensationformula,increasingservice(priortoJanuary1,2020),ageandcompensation(priortoJanuary1,2016)resultedinincreasesintheaccruedbenefitsforyearspriorto2020.EffectiveJanuary1,2020,accruedbenefitsunderthequalifiedandnonqualifieddefinedbenefitpensionplansforsalariedemployeeswerefullyfrozen.

TheSummaryCompensationTableusesthesamediscountrateandlongevityassumptionsthatweusetoreportpensionliabilitiesforallpensionplanparticipantsinourfinancialstatements.Theseassumptionsareupdatedannuallyfortheyear-endmeasurementsofourpensionplans.Theamountsreportedfor2020,2019and2018usedadiscountrateof2.50%,3.25%and4.25%,respectively.TheChangeinPensionValuefortheNEOsreportedinColumn(h)for2020wasprimarilyrelatedtoachangeinthediscountrateassumptionsfrom3.25%asofDecember31,2019to2.50%asofDecember31,2020.


60

All Other Compensation (Column (i))PerquisitesandotherpersonalbenefitsprovidedtotheNEOsin2020included:security;relocationbenefits(whenapplicable);annualexecutivephysicals;homeofficesupport;useofcorporateaircraftforpersonaltravelandotherrelatedexpenses;travelandotherexpensesforafamilymemberaccompanyingtheNEOwhileonbusinesstravel;andpromotionalitems.NotallofthelistedperquisitesorpersonalbenefitswereprovidedtoeachNEO.Inaddition,theCorporationmadeavailableacompany-providedcaranddriverforpersonalcommutingtosomeoftheNEOsin2020andmayprovideeventticketsfromtimetotime,butrequirestheNEOstoreimbursetheCorporationfortheincrementalcosttotheCorporationofsuchitems.Thecostofanycategoryofthelistedperquisitesandpersonalbenefitsdidnotexceedthegreaterof$25,000or10%oftotalperquisitesandpersonalbenefitsforanyNEO,exceptfor:(i)securityforMs.Hewson$141,866;(ii)personaluseofthecorporateaircraftforMr.Taiclet$284,175;Ms.Hewson$284,495;Mr.St.John$91,458;Mr.Ambrose$78,514;andMs.Evans$119,951;and(iii)relocationexpensesforMr.Taiclet$295,281;andMr.St.John$116,400.Theincrementalcostforuseofcorporateaircraftforpersonaltravelandaspartofrelocationbenefitswascalculatedbasedonthetotalpersonaltravelflighthoursmultipliedbytheestimatedhourlyaircraftoperatingcostsfor2020(includingfuel,maintenance,stafftravelexpenses,cateringandothervariablecosts,butexcludingfixedcapitalcostsfortheaircraft,hangarfacilities,andstaffsalaries).

TheincrementalcostforpersonalsecurityiscalculatedbasedonbillingsforservicesandequipmentfromthirdpartiesandforovertimeandrelatedexpenseswheretheservicesareprovidedbytheCorporation’spersonnel.Giventhenatureofourbusiness,additionalsecuritymaybeprovidedfortravelinhigh-riskareasortoaddressparticularsituations.WebelievethatprovidingpersonalsecurityinresponsetoconcernsarisingoutofemploymentbytheCorporationisbusiness-related.

Inadditiontoperquisites,column(i)alsocontainsitemsofcompensationlistedinthefollowingtable.Allitemsarepaidunderbroad-basedprogramsforU.S.salariedemployeesexceptforthenon-employeedirectorfees,taxassistanceandtheLockheedMartinCorporationSupplementalSavingsPlan(NQSSP)andtheLockheedMartinCorporationNonqualifiedCapitalAccumulationPlan(NCAP)(together,theNonqualifiedDefinedContributionPlans)matchorCorporationcontributions.AmountsunderMatchingGiftProgramsincludematchingcontributionsmadetoeligibleuniversities,collegesandothernon-profitorganizationsundertheCorporation’smatchinggiftprogramsgenerallyavailabletoallemployeesandincludecontributionstobemadein2021tomatch2020executivecontributions.AmountsunderCorporationContributionstoHealthSavingsAccountsreflecttheCorporation'sannual$500contributiontothehealthsavingsaccountsofallemployeeswhohaveahigh-deductiblehealthinsuranceplanasofJanuary1ofagivenyear.AmountsunderTermLifeInsuranceOpt-OutCreditreflectcashpaymentsmadetoNEOswhooptoutoftheCorporation'sbroad-basedemployeetermlifeinsuranceprogram,whichoptionisavailabletoallsalariedemployeesoftheCorporation.Aspermittedbythedisclosureregulations,thepremiumcostfortheNEOs'participationintheCorporation'sbroad-basedemployeetermlifeinsurancehasnotbeenincludedfor2020.The$73,924innon-employeedirectorfeesthatMr.Taicletreceivedwereforhisserviceasanon-employeedirectorfortheperiodJanuary1,2020throughJune14,2020,priortobecomingPresidentandChiefExecutiveOfficeronJune15,2020.

Other Items of Compensation Included in “All Other Compensation” Column (i)

Tax Assistancefor Business-Related Items

CorporationContributions to

Qualified DefinedContribution Plans


Nonqualified Defined

Contribution Plans


Health SavingsAccounts

Term LifeInsurance

Opt-Out CreditMatching Gift

ProgramsNon-Employee

Director Fees

Name ($) ($) ($) ($) ($) ($) ($)

Mr.Taiclet 174,136 22,146 35,862 — — 0 73,924

Ms.Hewson 92,227 21,000 163,403 500 — 11,100 —

Mr.Possenriede 31,641 20,350 72,573 500 — 9,600 —

Mr.St.John 79,807 20,350 72,573 500 1,992 11,000 —

Mr.Ambrose 7,522 20,400 72,523 500 1,256 0 —

Ms.Evans 3,228 20,350 72,573 500 — 1,100 —

In2020,theCorporationprovidedtaxassistanceonbusiness-relateditemsassociatedwithtaxablesecurityexpenses,relocationrelatedexpenses(whenapplicable),non-residentstateincometaxesonbusinesstravelandtravelexpensesforafamilymemberaccompanyingtheNEOwhileonbusinesstravel.ForMs.Hewsonthetotaltaxassistanceamountreportedfor2020includeda$29,334paymentattributabletosecurityexpensesanda$61,256paymentattributabletonon-residentstateincometaxes,includingpaymentassociatedwithlong-termincentiveawards,whichwasincurredasaresultofbusinesstraveltoastateotherthanherstateofresidence;andforMr.TaicletandMr.St.John,thetotaltaxassistanceamountsreportedfor2020included$174,136and$68,204,respectively,associatedwiththeirrelocationexpensesincurredpursuanttoourrelocationpolicy.Taxassistancewasprovidedfor



theseitemsbecausetheassociatedtaxliabilityimposedontheexecutivewouldnothavebeenincurredunlessbusinessreasonsrequiredtheitemstobeprovidedortheexecutivetotraveltothenon-residentstateortoberelocated.

*Total Without Change In Pension ValueTheseparatecolumnlabeled“TotalWithoutChangeinPensionValue”showstotalcompensationasrequiredtobedisclosedbytheSECincolumn(j)lesstheamountshowninChangeinPensionValueandNonqualifiedDeferredCompensationEarningsincolumn(h).Weprovidedthiscolumnbecausetheamountreportedincolumn(h)forChangeinPensionValueisnotcurrentcompensationandrepresentsthechangeinpresentvalueofanestimatedstreamofpaymentstobemadefollowingretirement.ThemethodologyusedtoreporttheChangeinPensionValueunderapplicableaccountingrulesissensitivetoassumptionsaboutlifeexpectancyandchangesinthediscountratedeterminedateachyearend,whicharefunctionsofeconomicfactorsandactuarialcalculationsthatareoutsideofthecontroloftheCompensationCommittee.TheamountsshownintheseparatecolumnarenotasubstitutefortheamountsreportedintheTotalcolumn.

2020 Grants of Plan-Based Awards

Estimated Future Payouts UnderNon-Equity Incentive Plan Awards

Estimated Future Payouts UnderEquity Incentive Plan Awards

All OtherStock

Awards:Number of

Shares ofStock or

Units

Grant DateFair Value of

Stock AwardsGrantDate

Approval Date

AwardType

Threshold Target Maximum Threshold Target Maximum

Name ($) ($) ($) (#) (#) (#) (#) ($)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (l)

JamesD.Taiclet 1/30/2020 — DEP — — — — — — 373 162,500

— — MICP 114,538 1,636,250 3,272,500 — — — 0 0

7/27/2020 6/25/2020 RSU — — — — — — 10,992 4,199,054

7/27/2020 6/25/2020 RSU — — — — — — 14,869 5,681,004

— — LTIP 175,000 2,800,000 5,600,000 — — — 0 0

7/27/2020 6/25/2020 PSU — — — 1,146 18,321 36,642 0 8,731,792

MarillynA.Hewson — — MICP 227,238 3,246,250 6,492,500 — — — 0 0

2/27/2020 2/27/2020 RSU — — — — — — 11,700 4,494,789

— — LTIP 187,500 3,000,000 6,000,000 — — — 0 0

2/27/2020 2/27/2020 PSU — — — 1,219 19,502 39,004 0 8,323,551

KennethR.Possenriede — — MICP 68,723 981,750 1,963,500 — — — 0 0

2/27/2020 2/27/2020 RSU — — — — — — 3,627 1,393,385

— — LTIP 58,125 930,000 1,860,000 — — — 0 0

2/27/2020 2/27/2020 PSU — — — 378 6,046 12,092 0 2,580,463

FrankA.St.John — — MICP 68,723 981,750 1,963,500 — — — 0 0

2/27/2020 2/27/2020 RSU — — — — — — 3,510 1,348,437

7/27/2020 6/25/2020 RSU — — — — — — 117 44,695

— — LTIP 56,250 900,000 1,800,000 — — — 0 0

— — LTIP 1,875 30,000 60,000 — — — 0 0

2/27/2020 2/27/2020 PSU — — — 366 5,851 11,702 0 2,497,279

7/27/2020 6/25/2020 PSU — — — 13 198 396 0 94,366

RichardF.Ambrose — — MICP 68,723 981,750 1,963,500 — — — 0 0

2/27/2020 2/27/2020 RSU — — — — — — 3,120 1,198,610

— — LTIP 49,600 800,000 1,600,000 — — — 0 0

2/27/2020 2/27/2020 PSU — — — 326 5,201 10,402 0 2,219,855

MicheleA.Evans — — MICP 68,723 981,750 1,963,500 — — — 0 0

2/27/2020 2/27/2020 RSU — — — — — — 3,510 1,348,437

— — LTIP 56,250 900,000 1,800,000 — — — 0 0

2/27/2020 2/27/2020 PSU — — — 366 5,851 11,702 0 2,497,279


62

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (Columns (c), (d) and (e))Includesannualincentivegrants(MICP)for2020andLTIPgrantsforthe2020-2022performanceperiodendingDecember31,2022.

TheMICPmeasuresperformanceoveraone-yearperiodandisdescribedunder“2020AnnualIncentive”onpage48.Thethreshold,orminimumamountpayable(assuminganawardisearned),is7%oftargetwhilethemaximumis200%oftarget.

TheLTIPawardmeasuresperformanceagainstthreeseparatemetricsdescribedunder“2020Long-TermIncentiveCompensation”onpage50.ThethresholdistheminimumamountpayableforaspecifiedlevelofperformancestatedintheLTIPawardagreement.Forthe2020-2022award,thethresholdamountpayableis6.25%ofthetargetaward.ThemaximumawardpayableundertheLTIPawardis200%oftargetvalue.Awardsaresubjecttoforfeitureuponterminationofemploymentpriortotheendoftheperformanceperiod,exceptintheeventofretirement,death,disability,divestiture,layofforchangeincontrol.Ifdeath,disability,ordivestitureoccurspriortotheendoftheperformanceperiod,LTIPawardsareprorated.Iftheemployeeretiresorislaidoffaftersixmonthsfromthedateofgrant,butpriortotheendoftheperformanceperiod,theLTIPawardsareprorated.Followingachangeincontrol,the2020-2022LTIPawardsvestatthetargetamountuponinvoluntaryterminationwithoutcauseorvoluntaryterminationwithgoodreasonorifthesuccessordoesnotassumetheLTIPawards.

Mr.Taiclet'sthreshold,targetandmaximumforhisMICPgrantareproratedbasedontimeservedduringfiscalyear2020.

Estimated Future Payouts Under Equity Incentive Plan Awards (Columns (f), (g) and (h))ThetableincludesPSUawardsforthe2020-2022performanceperiodendingDecember31,2022.PSUawardstypicallyhaveathree-yearvestingperiodendingonthethirdanniversaryofthedateofgrant(i.e.,February27,2023fortheFebruary27,2020grants);however,theJuly27,2020PSUgrantshavethesameperformanceperiodandvestingenddateastheFebruary27,2020grants.Attheendofthevestingperiod,theamountearnedispayableinsharesofstockandcashrepresentingdeferreddividendequivalentsaccruedontheearnedsharesduringthethree-yearperformanceperiod.PSUawardsaresubjecttoforfeitureuponterminationofemploymentpriortotheendofthevestingperiod,exceptintheeventofretirementorlayoffoccurringaftersixmonthsfromthedateofgrantorintheeventofdeath,disabilityordivestiture.Inanyoftheseevents,PSUawardsarepaidoutattheendofthevestingperiodonaproratedbasis.Followingachangeincontrol,thePSUsvestatthetargetamountuponinvoluntaryterminationwithoutcauseorvoluntaryterminationwithgoodreasonorifthesuccessordoesnotassumethePSUs.

SharesareearnedunderthePSUawardsbaseduponperformanceagainstthreeseparatemetricsdescribedunder“PSUAwards”onpage51.Ifperformancefallsbelowthethresholdlevelofperformance,noshareswouldbeearned.Assuminganypaymentisearned,theminimumamountpayableunderthePSUawardis6.25%ofthetargetshares,thelowestlevelpayableunderanyofthesemetrics.ThemaximumnumberofsharespayableunderthePSUis200%ofthenumberoftargetshares.

All Other Stock Awards: Number of Shares of Stock (Column (i))ShowsthenumberofRSUsgrantedonFebruary27,2020andJuly27,2020.AllRSUawardsvestonthethirdanniversaryofthedateofgrantexceptfortheawardof14,869RSUsgrantedtoMr.Taicletasanequityreplacementawardtooffsetforfeitedunvestedincentiveawardsfromhisformeremployer.Ofthe14,869RSUsgrantedtoMr.Taicletasanequityreplacementaward,7,689RSUsvestonthefirstanniversaryofthegrantdateand7,180RSUsvestonthesecondanniversaryofthegrantdate.RSUawardsotherthanMr.Taiclet'sequityreplacementawardaresubjecttoforfeitureuponterminationofemploymentpriortotheendofthevestingperiod,exceptintheeventofretirementorlayoffoccurringaftersixmonthsfromthedateofgrantordeath,disabilityordivestiture.RSUawardsvestimmediatelyupondeathordisability.RSUawardsareproratedupondivestitureifnotassumedbythesuccessor.Followingachangeincontrol,theRSUsvestuponinvoluntaryterminationwithoutcauseorvoluntaryterminationforgoodreasonorifthesuccessordoesnotassumetheRSUs.Iftheemployeeretiresorislaidoffaftersixmonthsfromthedateofgrant,butpriortothethirdanniversaryofthedateofgrant,theRSUsbecomenonforfeitableandarepaidattheendofthevestingperiod.Mr.Taiclet'sequityreplacementawardissubjecttothesameprovisionsdescribedaboveexceptintheeventofretirementandlayoff.Intheeventofretirement,Mr.TaicletwillforfeitallunvestedRSUs.Intheeventofalayoffbeforethefirstanniversaryofthegrantdate,7,689RSUswillimmediatelyvestandtheremainderwillbeforfeited.Intheeventofalayoffafterthefirstanniversarybutbeforethesecondanniversaryofthedateofgrant,allremainingunvestedRSUswillimmediatelyvest.



Duringthevestingperiod,deferreddividendequivalentsareaccruedandsubjecttothesamevestingscheduleastheunderlyingRSUs.Attheendofthevestingperiod,theRSUsarepaidinsharesofstockandthedeferreddividendequivalentsarepaidincash.Ifanytaxwithholdingisrequiredonthe2020RSUsanddeferreddividendequivalentsduringthevestingperiod(forexample,onaccountofretirementeligibility),theRSUsprovideforacceleratedvestingofthenumberofsharesanddeferreddividendequivalentsrequiredtosatisfythetaxwithholding.Theawardisthenreducedbythenumberofsharesanddeferreddividendequivalentssubjecttoaccelerationofvestingfortaxwithholding.

Inaddition,forMr.Taiclet,column(i)showstheannualawardofstockunitsonJanuary30,2020undertheDirector'sEquityPlan(DEP)madetoMr.Taicletinhiscapacityasanon-employeedirector.ThisawardwasforfeitedbyMr.TaicletuponhiscommencementofemploymentasPresidentandChiefExecutiveOfficeronJune15,2020.

Grant Date Fair Value of Stock Awards (Column (l)) RepresentstheaggregategrantdatefairvaluecomputedinaccordancewithFASBASC718forRSUsandPSUsgrantedin2020andstockunitsgrantedundertheDEPin2020,disregardingpotentialforfeituresbasedonservicerequirements.

ThegrantdatefairvalueoftheFebruary27,2020,July27,2020RSUgrants(otherthanMr.Taiclet'sequityreplacementaward)andMr.Taiclet'sequityreplacementawardare$384.17,$382.01and$382.07,respectively,perRSU,whichisbasedontheclosingpriceofoneshareofourcommonstockontheNYSEonthedateofgrant,discountedtotakeintoaccountthedeferreddividendequivalentsaccrueduntilvesting.

ThegrantdatefairvalueforthePSUs,whicharesubjecttoperformanceconditions,isbasedontheprobableoutcomeofeachofthethreeperformanceconditions.Thegrantdatefairvalueof$469.44forFebruary2020and$571.15forJuly2020fortheRelativeTSRportionoftheawardisdeterminedusingaMonteCarlosimulationmodel.Thegrantdatefairvalueof$384.17forFebruary2020and$382.04forJuly2020forthePerformanceCashandROICportionsoftheawardsisbasedontheclosingpriceofoneshareofourstockonthedateofgrant,discountedtotakeintoaccountthedeferreddividendequivalentsaccrueduntilvesting.

AsdescribedintheCompensationDiscussionandAnalysisonpage40,indetermining2020awardsofRSUsandPSUsotherthanMr.Taiclet'sreplacementaward,theclosingstockpriceofLockheedMartincommonstockontheNYSEonthedateofgrant($384.60onFebruary27,2020and$382.09onJuly27,2020)wasusedasopposedtothegrantdatefairvalue.ForMr.Taiclet'sequityreplacementaward,whichwasintendedtooffsetforfeitedunvestedincentivesfromhisformeremployerestimatedtobe$5.5million,theamountofRSUstobeawardedwasbasedontheclosingstockpriceofLockheedMartincommonstockontheNYSEonJune15,2020($373.28),theeffectivedateofMr.Taiclet'sappointmentasPresidentandCEO.TheuseoftheclosingstockpriceversusthegrantdatefairvalueresultsinadifferencebetweentheamountsdescribedintheCompensationDiscussionandAnalysisandtheGrantDateFairValueoftheStockAwardsreportedincolumn(l).

Inaddition,Mr.Taiclet'sawardofstockunitsundertheDEPforhis2020serviceasanon-employeedirectorhadanaggregategrantdatefairvaluecomputedinaccordancewithASC718of$162,500.ThisawardwasforfeiteduponMr.Taiclet'scommencementofemploymentasPresidentandChiefExecutiveOfficeronJune15,2020.


64

Outstanding Equity Awards at 2020 Fiscal Year-EndOption Awards Stock Awards

Number ofSecurities

UnderlyingUnexercised

OptionsExercisable

OptionExercise

PriceOption

ExpirationDate

Number of Shares or Units

of Stock That Have Not Vested(1)

Market Valueof Shares or

Units of StockThat Have

Not Vested(2)

Equity IncentivePlan Awards:

Number ofUnearned Shares,

Units or OtherRights That Have

Not Vested(3)

Equity IncentivePlan Awards:

Market or PayoutValue of Unearned

Shares, Units orOther Rights ThatHave Not Vested(4)

Name (#) ($) (#) ($) (#) ($)

(a) (b) (e) (f) (g) (h) (i) (j)

JamesD.Taiclet — — — 10,992 5 3,901,940 23,726 6 8,422,255

— — — 14,869 7 5,278,198 — —

MarillynA.Hewson 82,935 82.01 1/28/2022 11,263 8 3,998,140 25,256 9 8,965,375

— — — 13,509 10 4,795,425 45,554 11 16,170,759

— — — 9,926 12 3,523,531 — —

— — — 31,792 13 11,285,524 — —

KennethR.Possenriede — — — 3,470 8 1,231,781 7,830 9 2,779,493

— — — 4,241 10 1,505,470 14,337 11 5,089,348

— — — 1,017 12 361,015 — —

— — — 392 13 139,152 — —

FrankA.St.John — — — 117 5 41,533 257 6 91,230

— — — 3,510 8 1,245,980 7,578 9 2,690,038

— — — 3,866 10 1,372,353 12,506 11 4,439,380

— — — 3,045 12 1,080,914 — —

— — — 9,356 13 3,321,193 — —

RichardF.Ambrose — — — 2,994 8 1,062,810 6,736 9 2,391,145

— — — 3,710 10 1,316,976 12,506 11 4,439,380

— — — 2,922 12 1,037,252 — —

— — — 9,356 13 3,321,193 — —

MicheleA.Evans — — — 3,379 8 1,199,477 7,578 9 2,690,038

— — — 3,721 10 1,320,881 12,506 11 4,439,380

— — — 1,289 12 457,569 — —

— — — 496 13 176,070 — —

(1) IncludesallunvestedRSUsaswellasPSUsgrantedonFebruary22,2018forthe2018-2020performanceperiod.ThevestingperiodforthePSUsendedonFebruary22,2021andtheperformanceperiodendedonDecember31,2020.Thenumberofsharesshownincolumn(g)forthe2018-2020PSUsisthenumberofsharesearnedunderthePSUmetricsandpaiduponvesting.

(2) Themarketvalueshownincolumn(h)iscalculatedbymultiplyingthenumberofsharesshownincolumn(g)bytheDecember31,2020pershareclosingpriceofourstock($354.98).NEOsalsoreceiveacashpaymentfordeferreddividendequivalentsaccruedthroughtheendoftheperformanceperiodforPSUsandtheendofthevestingperiodforRSUs.

(3) RepresentsPSUsgrantedonFebruary27,2020andJuly27,2020forthe2020-2022performanceperiodandonFebruary21,2019forthe2019-2021performanceperiod;thePSUsareearnedandpaidoutinsharesofourcommonstockattheendofthethree-yearvestingperiodbaseduponperformanceonthreeseparatemetrics(RelativeTSR,PerformanceCash,andROIC).Thenumberofsharesofstockshownincolumn(i)isbaseduponthethresholdlevelofperformanceforeachofthethreemetricsor,ifperformancetodateonthemetrichasexceededthethresholdlevel(asisthecaseforperformancethroughDecember31,2020),theestimatedlevelofperformanceasofDecember31,2020.

(4) Themarketvalueshownincolumn(j)iscalculatedbymultiplyingthenumberofPSUsreportedincolumn(i)bytheDecember31,2020pershareclosingpriceofourstock($354.98).NEOsalsoreceivecashpaymentfordeferreddividendequivalentsaccruedthroughtheendoftheperformanceperiod.

(5) RepresentsRSUsgrantedonJuly27,2020,whichvestonJuly27,2023,exceptthatvestingmayoccurearlierasdescribedinthe“2020GrantsofPlan-BasedAwards”table.

(6) RepresentsPSUsgrantedonJuly27,2020thathaveaperformanceperiodthroughDecember31,2022andavestingdateofFebruary27,2023butprovideforproratapaymentsforcertainterminationsasdescribedinthe“2020GrantsofPlan-BasedAwards”table.



(7) RepresentsRSUsgrantedtoMr.Taicletasanequityreplacementawardtooffsetforfeitedunvestedincentivesfromhisformeremployer,ofwhich7,689RSUsvestonJuly27,2021and7,180RSUsvestonJuly27,2022,exceptthatvestingmayoccurearlierasdescribedinthe“2020GrantsofPlan-BasedAwards”table.

(8) RepresentsRSUsgrantedonFebruary27,2020,whichvestFebruary27,2023,exceptthatvestingmayoccurearlierasdescribedinthe“2020GrantsofPlan-BasedAwards”table.

(9) RepresentsPSUsgrantedonFebruary27,2020andwhichareearnedoverathree-yearperiodbutprovideforproratapaymentsforcertainterminationsasdescribedinthe“2020GrantsofPlan-BasedAwards”table.

(10) RepresentsRSUsgrantedonFebruary21,2019,whichvestonFebruary21,2022,exceptthatvestingmayoccurearlierasdescribedinthe“2020GrantsofPlan-BasedAwards”table.

(11) RepresentsPSUsgrantedonFebruary21,2019andwhichareearnedoverathree-yearperiodbutprovideforproratapaymentsforcertainterminationsasdescribedinthe“2020GrantsofPlan-BasedAwards”table.

(12) RepresentsRSUsgrantedonFebruary22,2018,whichvestedonFebruary22,2021.(13) RepresentsPSUsgrantedonFebruary22,2018,whichvestedonFebruary22,2021.

Option Exercises and Stock Vested During 2020Option Awards Stock Awards

Number of SharesAcquired on Exercise

Value Realizedon Exercise

Number of SharesAcquired on Vesting(1)

Value Realizedon Vesting (2)

Name (#) ($) (#) ($)

(a) (b) (c) (d) (e)

JamesD.Taiclet — — — —

MarillynA.Hewson — — 53,113 22,942,579

KennethR.Possenriede — — 2,197 939,858

FrankA.St.John — — 2,305 996,913

RichardF.Ambrose — — 12,331 5,324,855

MicheleA.Evans 8,360 2,926,772 2,428 1,028,630

(1) VestingonJanuary26,2020ofRSUsandPSUsgrantedonJanuary26,2017followingthethree-yearvestingperiod(forallNEOsexceptMr.Taiclet);acceleratedvestingonDecember4,2020ofaportionofRSUsgrantedonFebruary27,2020equaltothevalueofthetaxwithholdingobligationdueuponretirement-eligibilityoftheNEO(Ms.Hewson,Mr.Possenriede,andMr.Ambrose);andacceleratedvestingonDecember4,2020ofaportionofRSUsgrantedonFebruary27,2020,February21,2019,andFebruary22,2018equaltothevalueofthetaxwithholdingobligationdueuponretirement-eligibilityoftheNEO(Ms.Evans).RepresentsaggregatenumberofsharesvestedpriortodispositionofsharestotheCorporationtosatisfytaxwithholdingobligation.

(2) Valuerealizedwascalculatedbasedonthenumberofsharesacquiredonvestingmultipliedbythepershareclosingpriceofourcommonstockonthedateofvesting(January26,2020,$432.50andDecember4,2020,$366.61).

2020 Pension BenefitsDuring2020,theNEOs(exceptMr.Taiclet)participatedintheLockheedMartinCorporationSalariedEmployeeRetirementProgram(LMRP),whichisacombinationofseveralpriorplans(collectively,the“PriorPlan”)forsomesalariedemployeeswithprotectedbenefits.

ThecalculationofretirementbenefitsundertheLMRPisdeterminedbyaformulathattakesintoaccounttheparticipant’syearsofcreditedserviceendingwith2019andaveragecompensationforthehighestthreeyearsofthelasttenyearsofemploymentendingwith2015.AveragecompensationincludestheNEO’sbasesalaryandannualincentivebonuses.Normalretirementageis65;however,benefitsarepayableasearlyasage55atareducedamountorwithoutreductionatage60.Benefitsarepayableasamonthlyannuityforthelifetimeoftheemployee,asajointandsurvivorannuity,asalifeannuitywithafive-orten-yearguarantee,orasalevelincomeannuity.ThecalculationofretirementbenefitsunderthePriorPlanisbasedonanumberofformulas,someofwhichtakeintoaccounttheparticipant’syearsofcreditedserviceandpayoverthecareeroftheNEO.CertainotherformulasinthePriorPlanarebaseduponthefinalaveragecompensationandcreditedserviceoftheemployee.PayundercertainformulasinthePriorPlanincludedsalary,commissions,overtime,shiftdifferential,lumpsumpayinlieuofasalaryincreaseandannualincentivebonusesawardedthatyear.

AlloftheNEOswhoparticipateintheLMRPwerevestedand(withtheexceptionofMr.St.John)areeligibleforearlyretirementasofDecember31,2020undertheLMRP.

During2020,theNEOs(exceptMr.Taiclet)alsoparticipatedintheLockheedMartinCorporationConsolidatedSupplementalRetirementBenefitPlan(SupplementalPension),whichisarestorativeplanthatprovidesbenefitsinexcessofthebenefitpayableunderIRSrulesthroughtheLMRP,ourtax-qualifiedplan(seethefootnotetocolumn(d)tothe“2020PensionBenefits”tablebelow).


66

TheLMRPwasfrozenintwosteps.IncreasesincompensationceasedtobetakenintoaccounteffectiveJanuary1,2016.IncreasesinserviceceasedtobetakenintoaccounteffectiveJanuary1,2020.ThischangeinplanstructurealsocarriedovertotheSupplementalPension.AsofJanuary1,2020,eligiblesalariedemployees(includingtheNEOs)receiveaCorporationcontributionof6%oftheirbasesalarytotheLockheedMartinCorporationSalariedSavingsPlan.TheNEOsreceivethe6%CorporationcontributionintheNCAPafterreachingtheInternalRevenueCodelimitationforthiscontributioninthequalifiedplan.

2020 Pension Benefits Table

Number of Years ofCredited Service(1)

Present Value ofAccumulated

Benefit

PaymentsDuring LastFiscal Year

Name Plan Name (#) ($) ($)

(a) (b) (c) (d) (e)

JamesD.Taiclet LockheedMartinCorporationSalariedEmployeeRetirementProgram — — 0

LockheedMartinCorporationConsolidatedSupplementalRetirementBenefitPlan — — 0

MarillynA.Hewson LockheedMartinCorporationSalariedEmployeeRetirementProgram 37.1 2,240,194 0

LockheedMartinCorporationConsolidatedSupplementalRetirementBenefitPlan — 54,495,289 0

KennethR.Possenriede LockheedMartinCorporationSalariedEmployeeRetirementProgram 33.4 2,223,290 0


FrankA.St.John LockheedMartinCorporationSalariedEmployeeRetirementProgram 32.6 1,932,165 0


RichardF.Ambrose LockheedMartinCorporationSalariedEmployeeRetirementProgram 19.5 1,271,946 0


MicheleA.Evans LockheedMartinCorporationSalariedEmployeeRetirementProgram 33.3 2,099,970 0


(1) TheNumberofYearsofCreditedServiceisoneyearlessthantheactualnumberofyearsofservicefortheNEOslistedinthetableasincreasesinserviceceasedtobetakenintoaccounteffectiveJanuary1,2020.

Plan Name (Column (b))TheSupplementalPensionusesthesameformulaforbenefitsasthetax-qualifiedplanusesforcalculatingtheNEO’sbenefit.Althoughallservicerecognizedunderthetax-qualifiedplanisrecognizedundertheSupplementalPension,abenefitwouldhavebeenearnedundertheSupplementalPensiononlyinyearswhentheNEO’stotalaccruedbenefitwouldhaveexceededthebenefitaccruedunderthetax-qualifiedplan.TheSupplementalPensionbenefitsarepayableinthesameformsasbenefitsarepaidundertheLMRP,exceptlumpsumpaymentsareavailableundertheSupplementalPensiontoNEOswhofirstbecameeligibletoparticipateintheSupplementalPensiononorbeforeDecember16,2005.

Present Value of Accumulated Benefit (Column (d))Theamountsincolumn(d)werecomputedusingthesameassumptionsweusedtoaccountforpensionliabilitiesinourfinancialstatementsandasdescribedinNote12toourfinancialstatementscontainedinour2020AnnualReport,exceptthattheamountswerecalculatedbasedonbenefitscommencingatage60(orcurrentageifgreater).Weusedtheseagesratherthantheplan’snormalretirementageof65becauseanemployeemaycommencereceivingpensionbenefitsatage60withoutanyreductionforearlycommencement.Amountspaidunderourplansuseassumptionscontainedintheplansandmaybedifferentthanthoseusedforfinancialstatementreportingpurposes.BenefitsundertheLMRParepayable,attheelectionoftheparticipant,asamonthlyannuityforthelifetimeoftheemployee,asajointandsurvivorannuity,asalifeannuitywithafiveortenyearguarantee,orasalevelincomeannuity.TheSupplementalPensionbenefitsarepayableinthesameformsasthebenefitsarepaidundertheLMRP,exceptthatparticipantswhofirstbecameeligibletoparticipateintheSupplementalPensiononorbeforeDecember16,2005(allNEOsexceptMr.TaicletandMr.St.John)mayelectalumpsumpaymentoftheirSERPbenefits.IfaNEOelectedalumpsumpayment,theamountofthelumpsumwouldbebasedonplanassumptionsandnottheassumptionsusedforfinancialstatementreportingpurposes.Asaresult,theactuallumpsumpaymentwouldbeanamountdifferentthanwhatisreportedinthistable.TheageoftheNEOatretirementwouldalsoimpactthesizeofthelumpsumpayment.Theamountusingplanassumptionsisshowninthe“PotentialPaymentsUponTerminationorChangeinControl”table.



2020 Nonqualified Deferred CompensationParticipantsinourtax-qualifieddefinedcontributionplanmaydeferupto40%ofbasesalaryonapre-tax,Rothorafter-taxbasis.Inaddition,wemakeamatchingcontributionequalto50%ofuptothefirst8%ofbasesalarycontributedbytheparticipant.EmployeeandCorporationmatchingcontributionsinexcessoftheInternalRevenueCodelimitationsmaybecontributedtotheNQSSPonapre-taxbasisattheelectionoftheNEO.WealsomakeCorporationcontributionsinexcessoftheInternalRevenueCodelimitationstotheNCAPequalto6%oftheNEO’sbasesalary.Employeecontributions,matchingandCorporationcontributionstotheplansarenonforfeitableatalltimes.NQSSPandNCAPcontributionsarecreditedwithearningsorlosses,asappropriate,basedontheinvestmentoptionsinwhichtheaccounthasbeeninvested,aselectedbytheparticipant.EachoftheNQSSPandNCAPinvestmentoptionsisavailableunderourtax-qualifieddefinedcontributionplanforsalariedemployees.TheNQSSPandNCAPprovideforpaymentfollowingterminationofemploymentinalumpsumorupto25annualinstallmentsattheparticipant’selection.AllamountsaccumulatedandunpaidundertheNQSSPandNCAPmustbepaidinalumpsumwithin15calendardaysfollowingachangeincontrol.

TheDeferredManagementIncentiveCompensationPlan(DMICP)providestheopportunitytodefer,untilterminationofemploymentorbeyond,thereceiptofalloraportionofannualincentivebonusesandLTIPawards.NEOsmayelectanyoftheinvestmentfundsavailableintheNQSSP(withtheexceptionoftheCompanyStockFund)andtwoinvestmentalternativesavailableonlyundertheDMICPforcreditingearnings(losses).UndertheDMICPStockInvestmentOption,earnings(losses)ondeferredamountswillaccrueataratethattrackstheperformanceofourcommonstock,includingreinvestmentofdividends.UndertheDMICPInterestInvestmentOption,earningsaccrueatarateequivalenttothethenpublishedrateforcomputingthepresentvalueoffuturebenefitsunderCostAccountingStandards415,DeferredCompensation(CAS415rate).TheInterestInvestmentOptionwasclosedtonewdeferralsandtransfersfromotherinvestmentoptionseffectiveJuly1,2009,however,aswasthecasefor2018and2019,minimalabove-marketamountsarereportedfor2020forthepre-July1,2009deferrals.AmountscreditedtotheStockInvestmentOptionmaynotbereallocatedtootheroptions.Inaddition,StockInvestmentOptiondeferralswillbepaidinsharesofourcommonstockupondistribution.TheDMICPprovidesforpaymentinJanuaryorJulyfollowingterminationofemploymentinalumpsumorupto25annualinstallmentsattheNEO’selection.AllamountsaccumulatedundertheDMICPmustbepaidinalumpsumwithin15daysfollowingachangeincontrol.

ThistablereportscompensationearnedbytheNEOsanddeferredunderNQSSP,NCAPandDMICP.TheNQSSPisanonqualifieddefinedcontributionplanwithamatchonaportionofthesalarydeferral.TheNCAPisanonqualifieddefinedcontributionexcessplanwithCorporationcontributions.TheDMICPisanonqualifieddeferredcompensationplanthroughwhichparticipantsmaydefertheirannualincentivebonuspaidundertheMICPorthecash-basedLTIPreceivedaspartoftheirlong-termincentiveawardopportunity.


68

2020 Nonqualified Deferred Compensation Table

ExecutiveContributions

in Last FY

RegistrantContributions

in Last FY

AggregateEarnings in

Last FY

AggregateWithdrawals/

Distributions in Last FY

AggregateBalance at

Last FYE

Name ($) ($) ($) ($) ($)

(a) (b) (c) (d) (e) (f)

JamesD.Taiclet NQSSP — — — — —

NCAP — 35,862 2,265 — 38,126

DMICP — — — — —

TOTAL — 35,862 2,265 — 38,126

MarillynA.Hewson NQSSP 349,308 69,861 912,131 — 8,489,270

NCAP — 93,542 26,201 — 252,048

DMICP — — 6,251,951 — 54,505,343

TOTAL 349,308 163,403 7,190,283 — 63,246,661

KennethR.Possenriede NQSSP 203,515 33,919 147,827 — 2,488,137

NCAP — 38,654 12,946 — 79,738

DMICP 910,896 — 608,214 — 6,645,624

TOTAL 1,114,411 72,573 768,987 — 9,213,499

FrankA.St.John NQSSP 203,515 33,919 136,440 — 1,229,553

NCAP — 38,654 8,992 — 83,352

DMICP 578,437 — 586,283 — 5,754,649

TOTAL 781,952 72,573 731,715 — 7,067,554

RichardF.Ambrose NQSSP 146,846 29,369 148,783 — 2,860,964

NCAP — 43,154 11,584 — 104,151

DMICP — — (117,701) — 6,595,597

TOTAL 146,846 72,523 42,666 — 9,560,712

MicheleA.Evans NQSSP 203,515 33,919 149,803 — 1,768,247

NCAP — 38,654 8,599 — 75,510

DMICP 2,118,515 — 816,346 — 7,808,786

TOTAL 2,322,030 72,573 974,748 — 9,652,543

Executive Contributions in Last Fiscal Year (Column (b))IncludessalarydeferralstoNQSSPin2020,annualincentivebonuspaidin2020for2019performancedeferredtoDMICP,andLTIPpaidin2020forthe2017-2019performanceperioddeferredtotheDMICP.

Registrant Contributions in Last Fiscal Year (Column (c))IncludesCorporationmatchingcontributionstoNQSSPmadein2020andCorporationcontributionsmadetoNCAPin2020.TheNQSSPmatchandNCAPCorporationcontributionsarealsoincludedincolumn(i)ofthe“SummaryCompensationTable.”



Aggregate Balance at Last Fiscal Year End (Column (f))Thefollowingtableliststheamountsreportedasexecutiveorregistrantcontributionsincolumns(b)and(c)ofthe“2020NonqualifiedDeferredCompensation”tablethatarealsoreportedascompensationinthe“SummaryCompensationTable”for2020.ThesecontributionsconsistofNEOandCorporationmatchingcontributionsmadetotheNQSSPandCorporationcontributionsmadetotheNCAPduring2020.Contributionswithrespectto2020performancedeferredin2021(annualincentivebonusandLTIP)arenotcrediteduntil2021,andarenotincludedincolumn(f).Thefollowingtablealsoliststheamountsreportedincolumn(f)aspartoftheAggregateBalanceatLastFYE(2020)thatisreportedascompensationforprioryearsinthe“SummaryCompensationTable”foryearsbeginningwith2006.Column(f)includesearningsinexcessof120%oftheapplicablefederalrate(above-marketearnings)ondeferralsmadepriortoJuly1,2009reportedfor2020incolumn(h)oftheSummaryCompensationTableasfollows:Ms.Hewson$6,661;Mr.Ambrose$2,144;andMs.Evans$125.

Of Amount Reported in Column (f)

Aggregate Balanceat December 31,

2020 in Column (f)

NEO and Corporation Contributions toNQSSP and Corporation Contributions to

NCAP Reported in “SummaryCompensation Table” for 2020

Amount Reported in “SummaryCompensation Table” for Prior

Years (Beginning with 2006)

Name ($) ($) ($)

Mr.Taiclet 38,126 35,862 0

Ms.Hewson 63,246,661 512,711 23,010,179

Mr.Possenriede 9,213,499 276,088 1,120,238

Mr.St.John 7,067,554 276,088 1,443,759

Mr.Ambrose 9,560,712 219,369 356,025

Ms.Evans 9,652,543 276,088 2,357,783


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Potential Payments Upon Termination or Change in ControlThetablebelowsummarizesthebenefitsthatbecomepayabletoaNEOat,following,orinconnectionwithretirement,changeincontrol,death,disability,layoff,divestiture,terminationorresignationunderthetermsofourbenefitplans.

Retirement Change in Control Death/Disability/Layoff Divestiture(1) Termination/Resignation

Annual Incentive Bonus(2)

Payment(atage55andfiveyearsofserviceorage65)maybeproratedbasedonyear-endperformanceresultsforretirementduringtheyearwithsixmonthsofparticipationintheyear.

Noprovision.

Paymentmaybeproratedattargetfordeath,disabilityorlayoffduringtheyearwiththreemonths(sixmonthsinthecaseoflayoff)ofparticipationintheyear.

Nopaymentiflayoffoccursatanytimeduringtheyear,includingonthelastdayoftheyear,andpaymentismadeundertheExecutiveSeverancePlan.

Noprovision.

Nopaymentwillbemadefortermination/resignationduringtheyear.

RSUs(3)

ContinuedvestingofRSUsanddividendequivalentssubjecttosix-monthminimumservicefromdateofgrant.(3)

ImmediatevestingofRSUs,PSUsatTarget,LTIPatTargetanddividendequivalentsonRSUsandPSUsifnotassumedbysuccessor.Immediatevestingfollowinginvoluntaryterminationwithoutcauseorvoluntaryterminationwithgoodreasonwithin24monthsofchangeincontrolifassumedbysuccessor.

ContinuedvestingofRSUsanddividendequivalentsafterlayoff,subjecttosix-monthminimumservicefromdateofgrantand,forthe2020-22awards,executionofareleaseofclaims.(3)Immediatevestingfollowingdeathordisability.

Unlessassumedbythesuccessor,RSUsanddividendequivalentswillvestonaproratabasisbasedonthedaysintothevestingperiodatclosingunlesstheemployeeisretirement-eligibleinwhichcasetheRSUgrantwillcontinuetovestuntilthevestingdate.

ForfeitunvestedRSUs,PSUsandLTIPanddividendequivalentsonRSUsandPSUsifterminationoccurspriortobecomingretirement-eligibleoranytimeifterminationisduetomisconduct.

Terminationonorafterthesix-monthanniversaryofthegrantdateandeither(i)age55andtenyearsofserviceor(ii)age65istreatedasretirement-eligible.

PSUs & LTIP

2019-2021 &

2020-2022

ProratedpaymentofPSUsandLTIP(anddividendequivalentsonPSUs)basedontheperformanceattheendofthethree-yearperformanceperiod,subjecttosix-monthminimumservicefromdateofgrant.

ProratedpaymentofPSUsandLTIP(anddividendequivalentsonPSUs)basedontheperformanceatendofthethree-yearperformanceperiod,subjecttosix-monthminimumservicesfromdateofgrantand,for2020-22awards,executionofareleaseofclaimsforlayoff.

ProratedpaymentofPSUsandLTIP(anddividendequivalentsonPSUs)basedontheperformanceattheendofthethree-yearperformanceperiod.

Executive Severance

PlanNopayment.

Nopaymentunlessterminated.

Nopaymentinthecaseofdeathordisability.Paymentofalumpsumamountequaltoamultipleofsalary,annualbonusequivalent,andhealthcarecontinuationcoveragecostplusoutplacementservicesandrelocationassistance.ThemultipleofsalaryandannualbonusequivalentfortheCEOis2.99;forallotherNEOsitis1.0.

Nopayment. Nopayment.



Retirement Change in Control Death/Disability/Layoff Divestiture(1) Termination/Resignation

Pension(4)

Qualified:Annuitypayableonareducedbasisatage55;annuitypayableonanon-reducedbasisatage60;steeperreductionforearlycommencementatage55forterminationspriortoage55thanforterminationsafterage55.

Supplemental:Annuityorlumpsumatlaterofage55ortermination,sameearlycommencementreductionsappliedasforPension-Qualified.

Qualified:Noacceleration.

Supplemental:LumpSumwithin15calendardaysofthechangeincontrol.

Qualified:Spousalannuitybenefitasrequiredbylawineventofdeathunlesswaivedbyspouse.Foreither(i)disabilitybetweenage53and55witheightyearsofserviceor(ii)layoffbetweenage53and55witheightyearsofserviceorbeforeage55with25yearsofservice,participantiseligibleforthemorefavorableactuarialreductionsforparticipantsterminatingafterage55.

Supplemental:Annuityorlumpsumatlaterofage55ortermination,sameprovisionsasPension-Qualifiedforspousalwaiver,disability,andlayoff.

Noprovisions;absentanegotiatedtransferofliabilitytobuyer,treatedasretirementortermination.

Qualified:Annuitypayableonareducedbasisatage55;annuitypayableonanon-reducedbasisatage60;steeperreductionforearlycommencementatage55forterminationspriortoage55thanforterminationsafterage55.

Supplemental:Annuityorlumpsum,sameearlycommencementreductionsappliedasforPension-Qualified.

DMICP(5) /

NQSSP(5) /

NCAP(5)

LumpsumorinstallmentpaymentinaccordancewithNEOelections.

Immediatelumpsumpayment.

DMICP:LumpsumorinstallmentpaymentsinaccordancewithNEOelections,exceptlumpsumonlyforlayoffpriortoage55.

NQSSP/NCAP:Lumpsumfordeath;fordisabilityorlayoff,lumpsumorinstallmentpaymentsinaccordancewithNEOelections.

Followsterminationprovisions.

DMICP:LumpsumorinstallmentpaymentsinaccordancewithNEOelections,exceptlumpsumonlyifterminationispriortoage55.

NQSSP/NCAP:LumpsumorinstallmentpaymentsinaccordancewithNEOelections.

(1) Divestitureisdefinedasatransactionwhichresultsinthetransferofcontrolofabusinessoperationtoanyperson,corporation,association,partnership,jointventure,orotherbusinessentityofwhichlessthan50percentofthevotingstockorotherequityinterests(inthecaseofentitiesotherthancorporations)isownedorcontrolleddirectlyorindirectlybyus,oneormoreofoursubsidiaries,orbyacombinationthereoffollowingthetransaction.

(2) See“CompensationDiscussionandAnalysis”fordiscussionofannualincentivebonuspaymentcalculation.(3) Mr.Taiclet'sequityreplacementawardissubjecttothesameprovisionsonterminationastheotherRSUsexceptintheeventofretirementorlayoff.Forhis

equityreplacementaward,Mr.TaicletwouldforfeitallunvestedRSUsuponretirementorresignationand,intheeventofalayoff,beforethefirstanniversaryofthegrantdate,approximatelyhalfoftheRSUswillimmediatelyvestandtheremainderwillbeforfeited.Intheeventofalayoffafterthefirstanniversarybutbeforethesecondanniversaryofthedateofgrant,allremainingunvestedRSUswillimmediatelyvest.

(4) See“2020PensionBenefits”tableforpresentvalueofaccumulatedbenefit.(5) See“AggregateBalanceatLastFYE”columnin“2020NonqualifiedDeferredCompensation”tableforamountspayable.

ThefollowingtablequantifiesthepaymentsunderourexecutivecompensationprogramsinRSU,LTIPandPSUawardsandthelumpsumpayableundertheSupplementalPensionthatwouldbemadeforeachNEOassumingaterminationeventoccurredonDecember31,2020.Paymentsunderotherplansdonotchangeasaresultoftheterminationevent,andquantificationofthosepaymentsisfoundelsewhereinthisProxyStatement;benefitsunderplansavailablegenerallytosalariedemployeesalsoarenotincluded.ThetableshowsamountsthatwouldactuallybepaidonorshortlyafterDecember31,2020onaccountofthetriggerevent.Amountsthatarecontingentuponfutureperformance,continuedvestingoralreadyearnedasofDecember31,2020aredescribedandquantifiedinthefootnotesfollowingthetable.AwardagreementsfortheNEOscontainclawbackprovisionsandpost-employmentrestrictivecovenants.Toreceiveasupplementalseverancebenefitorfavorablevestingof2020-22RSU,LTIPandPSUawardsonlayoff,anexecutivemustexecuteareleaseofclaimsand,forthesupplementalseverancebenefit,anagreementcontainingtwo-yearpost-employmentnon-competeandnon-solicitationcovenants.


72

Potential Payments Upon Termination or Change in Control Table

RetirementChange

In ControlDeath/

Disability Layoff DivestitureTermination/Resignation(1)

Name ($) ($) ($) ($) ($) ($)

JamesD.Taiclet SupplementalPension(2) 0 0 0 0 0 0

LTIP(3) 0 2,800,000 0 0 0 0

RSUs(4) 0 9,309,443 9,309,443 2,767,886 2,407,212 0

PSUs(5) 0 1,717,413 0 0 0 0

ExecutiveSeverance(6) 0 0 0 14,070,623 0 0

TOTAL 0 13,826,856 9,309,443 16,838,509 2,407,212 0

MarillynA.Hewson SupplementalPension(2) 46,464,098 46,464,098 46,464,098 46,464,098 46,464,098 46,464,098

LTIP(3) 0 5,860,000 0 0 0 0

RSUs(4) 0 12,949,448 12,949,448 0 0 0

PSUs(5) 0 10,518,778 0 0 0 0


TOTAL 46,464,098 75,792,324 59,413,546 51,654,918 46,464,098 46,464,098

KennethR.Possenriede SupplementalPension(2) 5,529,259 5,529,259 5,529,259 5,529,259 5,529,259 5,529,259

LTIP(3) 0 1,830,000 0 0 0 0

RSUs(4) 0 3,239,470 3,239,470 0 0 0

PSUs(5) 0 1,465,074 0 0 0 0


TOTAL 5,529,259 12,063,803 8,768,729 7,496,698 5,529,259 5,529,259

FrankA.St.John SupplementalPension(2) 0 4,349,230 0 0 0 0

LTIP(3) 0 1,715,000 0 0 0 0

RSUs(4) 0 3,930,657 3,930,657 0 2,423,413 0

PSUs(5) 0 3,075,021 0 0 0 0


TOTAL 0 13,069,908 3,930,657 1,979,676 2,423,413 0

RichardF.Ambrose SupplementalPension(2) 6,809,602 6,809,602 6,809,602 6,809,602 6,809,602 6,809,602

LTIP(3) 0 1,585,000 0 0 0 0

RSUs(4) 0 3,595,025 3,595,025 0 0 0

PSUs(5) 0 2,992,405 0 0 0 0


TOTAL 6,809,602 14,982,032 10,404,627 8,784,248 6,809,602 6,809,602

MicheleA.Evans SupplementalPension(2) 3,413,362 3,413,362 3,413,362 3,413,362 3,413,362 3,413,362

LTIP(3) 0 1,685,000 0 0 0 0

RSUs(4) 0 3,115,799 3,115,799 0 0 0

PSUs(5) 0 1,364,466 0 0 0 0


TOTAL 3,413,362 9,578,627 6,529,161 5,386,805 3,413,362 3,413,362

Termination/Resignation(1) Resignationbyexecutiveswhoareeligibleforretirement,forpurposesofthistable,istreatedasretirement.AllNEOs,exceptMr.TaicletandMr.

St.John,wereeligibleforretirementasofDecember31,2020.



Supplemental Pension(2) TheNEOswouldnotreceiveanyenhancementtotheirSupplementalPensioninconnectionwithanyterminationeventsorachangeincontrolas

ofDecember31,2020,andpaymentsundertheSupplementalPensionwouldbepayabletosuchNEOsinaccordancewiththeirindividualelections,exceptinthecaseofachangeincontrol.TheSupplementalPensionlumpsumvaluewascalculatedastheunreducedbenefitatage60(ortheNEO'sactualageasofDecember31,2020,ifgreater)usingplanassumptions.PaymentsundertheSupplementalPensiondonotcommencepriortoage55,exceptinthecaseofachangeincontrol;thusMr.St.JohnistheonlyNEOwhowouldexperienceanacceleratedSERPpaymentinthecaseofachangeincontrolasofDecember31,2020.TheSupplementalPensionassumptionsineffectforDecember31,2020,area4.00percentdiscountrate(1.00percentforbenefitsearnedpriorto2005)andthemortalitytablesapplicabletolumpsumdistributionsforqualifiedplansundersection417(e)oftheInternalRevenueCode(exceptthe1983GroupAnnuityMortalitywithsexdistinctionisusedforbenefitsaccruedpriorto2005,andthistableisusedforbenefitsaccruedafter2004iftheresultingbenefitislarger).Allformsofpayment,whetherlumpsumorannuities,arecalculatedusingtheplanassumptionstobeactuariallyequivalent,sotherearenoincrementalbenefitsassociatedwithanyoftheeventsorpaymentform.TheSupplementalPensionassumptionsaresetforthintheplandocumentandaredifferentthantheassumptionsusedtocalculatetheaccruedbenefitreportedinthe“2020PensionBenefits”or“SummaryCompensation”tablesorforfinancialreporting.

Long-Term Incentive Performance Awards(3) Thetableshowsanamountpayableintheeventofachangeincontroltriggereventforthe2019-2021and2020-2022LTIPperformanceperiods.

Foratriggereventbasedupondeath,disability,retirement(orresignationaftersatisfyingtherequirementsforretirement),layoffordivestitureonDecember31,2020,amounts(ifany)forthe2019-2021and2020-2022LTIPperformanceperiodswouldnotbepayableuntilaftertheendoftheperformanceperiod.Theestimatedproratedamountspayableforthe2019-2021performancecyclebasedonperformancethroughDecember31,2020are:Ms.Hewson:$3,695,558;Mr.Possenriede:$1,162,939;Mr.St.John:$1,014,341;Mr.Ambrose:$1,014,341;andMs.Evans:$1,014,341.Theestimatedproratedamountspayableforthe2020-2022performancecyclebasedonperformancethroughDecember31,2020are:Mr.Taiclet:$1,207,564;Ms.Hewson:$1,293,819;Mr.Possenriede:$401,084;Mr.St.John:$401,083;Mr.Ambrose:$345,018;andMs.Evans:$388,145.Thetabledoesnotincludeamountsforthe2018-2020performancecycleastheseamountsarereportedinthe"SummaryCompensationTable"(seenotestocolumn(g)).

Restricted Stock Units(4) All2018,2019and2020RSUsotherthanMr.Taiclet'sequityreplacementawardwouldcontinuetovestforretirementorlayoffoccurringon

December31,2020,andwouldnotbecomepayableuntilFebruary2021,February2022andFebruary2023,respectively,andarenotincludedinthetable.IfMr.TaicletretiredorresignedasofDecember31,2020,hisequityreplacementawardwouldbeforfeitedand,thereforeisnotincludedinthetable.Inaddition,intheeventofhislayoffasofDecember31,2020,7,689RSUsofhisunvestedequityreplacementawardwouldimmediatelyvestandtheremainderwouldbeforfeited.Forachangeincontrol(assumingsatisfactionofthedoubletrigger),death,disability,divestitureor,forMr.Taicletonly,layoff,thereportedvalueoftheRSUswasbasedupontheclosingpriceofourstockonDecember31,2020($354.98)plusdeferreddividendequivalentsthataccrued.TheamountsforretirementorlayoffonDecember31,2020arenotpayableuntiltheendoftherespectivevestingperiods(February2021,February2022andFebruary2023forthe2018,2019and2020RSUs,respectively)butwouldhavethesamevalueonDecember31,2020astheamountsshownforimmediatepaymentonaccountofdeath,disabilityanddivestiture.IfaNEOisretirement-eligible,theninthecaseofadivestitureoccurringonDecember31,2020,theRSUswillcontinuetovestandaretreatedasaretirement.

Performance Stock Units(5) Thetableshowsanamountpayableintheeventofachangeincontroltriggereventforthe2018-2020,2019-2021and2020-2022performance

periods.TheamountshownforthePSUsuponachangeincontrolisthetargetlevelofthesharesvaluedusingtheclosingpriceofourstockonDecember31,2020($354.98)plusdeferreddividendequivalentsthataccrued.Thetableassumesthedoubletriggeroccurred.Foratriggereventbasedupondeath,disability,retirement(orresignationaftersatisfyingtherequirementsforretirement),layoffordivestitureonDecember31,2020,amounts(ifany)forthe2018-2020and2019-2021and2020-2022PSUperformanceperiodswouldbepaidonaproratedbasisfollowingtheendoftheapplicableperformanceperiod.Thepaymentsestimatedtobepaidonanon-proratedbasisfollowingtheendoftheperformancecycleusingtheDecember31,2020stockpricearereportedforthe2018-2020PSUperformancecycleincolumn(h)ofthe"OutstandingEquityAwardsat2020FiscalYear-EndTable"andfor2019-2021and2020-2022incolumn(j)ofthattable.TheproratedamountsforatriggereventoccurringonDecember31,2020plusdeferreddividendequivalentsthataccruedareforeachcycle:(i)2018-2020cycle:Ms.Hewson:$11,547,255;Mr.Possenriede:$143,624;Mr.St.John:$3,398,858;Mr.Ambrose:$3,398,858;andMs.Evans:$181,059;and(ii)2019-2021cycle:Ms.Hewson:$10,539,101;Mr.Possenriede:$3,317,671;Mr.St.John:$2,893,431;Mr.Ambrose:$2,893,431;andMs.Evans:$2,893,431;and(iii)2020-2022cycle:Mr.Taiclet:$1,417,961;Ms.Hewson:$2,587,020;Mr.Possenriede:$802,151;Mr.St.John:$791,730;Mr.Ambrose:$690,164;andMs.Evans:$776,251.TheproratedamountsarebasedonthestockpriceandestimatedperformanceasofDecember31,2020.

Executive Severance(6) Thetotalamountsprojectedforseverancepaymentsduetolayoffarebasedontheplan(asamended)approvedbytheBoardin2008.Itincludes

paymentforoneyearofsalary(2.99yearsforMr.Taiclet)andoneyearoftargetannualincentive(2.99forMr.Taiclet),estimatedcostsforbenefitscontinuationforoneyear,outplacementservicesandrelocationassistance(ifrequiredundertheplanterms).


74

CEO Pay RatioAsrequiredbySection953(b)oftheDodd-FrankWallStreetReformandConsumerProtectionAct,andItem402(u)ofRegulationS-K,theCorporationmustannuallydiscloseinitsproxystatementthemedianoftheannualtotalcompensationofallofitsemployees(excludingtheCEO),theannualtotalcompensationofitsCEO,andtheratiooftheCEOcompensationtotheemployeemediancompensation.TheratioofCEOpaytothepayoftheCorporation’smedianemployeeforfiscalyear2020is185toone.

LockheedMartinemploysapproximately114,000employeesthatare,inlargepart,highly-skilledprofessionalslocatedprimarilyintheUnitedStates,butalsorepresentedinnumerousothercountries.Forpurposesofthefiscalyear2020CEOpayratiosetforthabove,weusedthesamemedianemployeeidentifiedwithrespecttoourfiscalyear2018and2019CEOpayratio,becausetherehasnotbeenachangeinouremployeepopulationoremployeecompensationarrangementsthatwebelievewouldsignificantlychangethepayratiodisclosure.

Themedianemployeewasdeterminedbycalculatingthetotalannualcashcompensation(basesalaryplusannualincentive)ofallemployeesexcepttheCEOasofDecember31,2018,andthensortingthoseemployeesfromhighesttolowest;anddeterminingthemedianemployeefromthatlist.

ThetotalcompensationforourCEOforfiscalyear2020assetforthintheSummaryCompensationTable(SCT)onpage58was$23,360,369.ForpurposesoftheCEOpayratio,however,wehaveannualizedourCEO'ssalaryandcertainperquisitessinceheonlyservedaportionoftheyearasCEO(histotalannualizedcompensationwas$24,518,639).Wedidnotannualizehisannualincentivebecauseapartofhisone-timeequityreplacementawardwasintendedtomakehimwholefortheportionoftheannualincentiveheforfeitedfromhisprioremployer.Wealsodidnotannualizehislong-termincentiveawardopportunityorhisequityreplacementgrantbecausetheyrepresentedawardsthatwereindependentoftheamountoftimeservedasCEOduringtheyear.Finally,wehaveexcludedthedirectorcompensationhereceivedin2020priortobecomingCEOasnotbeingrepresentativeofhisCEOcompensation.

SummaryCompensationTableComponentsCompensation

forCEOPayRatio ExplanationofAmounts

BaseSalary $1,700,000 Annualizedsalary;actualsalaryof$915,385disclosedintheSummaryCompensationTable

StockAwards $18,611,850 Includesapproximately$12.9millionannualLTIgrantand$5.7millionone-timereplacementaward.Excludes$162,500relatedtohis2020annualnon-employeedirectorequitygrantthatwasforfeiteduponMr.TaicletbecomingPresidentandCEO

Non-EquityIncentivePlanCompensation $2,896,200 Reflectspro-ratedMICPannualincentive.NotannualizedbecausepartofthevalueoftheequityreplacementawardwasintendedtooffsettheannualincentiveforfeitedfromMr.Taiclet'sprioremployer

ChangeinPensionandNon-qualifiedDeferredCompensationEarnings

$0 Mr.Taiclethadno2020compensationattributabletoChangeinPensionandNon-qualifiedDeferredCompensationEarnings

AllOtherCompensation $1,310,589 AnnualizedcertaincompensationandperquisitesforwhichamountswouldhavebeenincurredifMr.TaiclethadbeenservingasCEOtheentireyear;excludednon-employeecashdirectorfeesMr.Taicletreceivedin2020priortobecomingCEObecausehisbaseCEOsalaryisannualized

Total $24,518,639

Thetotalannualcompensationforthemedianemployeeforfiscalyear2020was$132,824,encompassingbasesalary,overtime,incentives/recognitionawards,changeinpensionvalueandCorporationcontributionstodefinedcontributionplans.TheannualtotalcompensationofthemedianemployeewasdeterminedinthesamemannerasthetotalcompensationreportedforourCEOinthesummarycompensationtable(withouttheannualizationadjustmentsdisclosedabove).



Director CompensationAnnual BenchmarkingDirectorcompensationisanimportanttoolusedtoattractandretainqualifieddirectorsandtoaddressthetime,effort,expertiseandaccountabilityrequiredofactiveBoardmembership.TheGovernanceCommitteeannuallyreviewspubliclyavailabledataforthecompaniesinthecomparatorgroupweuseforbenchmarkingexecutivecompensation(listedonpage45)andmakesrecommendationstotheBoardregardingcompensationfornon-employeedirectors.Mr.TaicletreceivedcompensationforhisserviceontheBoarduntilhiscommencementofserviceasPresidentandCEOonJune15,2020,andhisannualdirectorequityretainerwasforfeiteduponcommencementofhisemploymentwiththeCorporation.AlthoughtheGovernanceCommitteereviewsdirectorcompensationannually,ithasbeenthepracticeoftheGovernanceCommitteetorecommendchangesnomorefrequentlythaneverytwoyears.

Asdirectorcompensationforothercomparatorcompaniescontinuestoincreaseduringthetwo-yearcycle,theCorporation’spositionrelativetothemedianfordirectorcompensationchanges.Forthisreason,theCommitteesetsdirectorcompensationabovethemedianwiththeexpectationthatcompensationwilldeclinerelativetothemedianoverthetwo-yearcycleandmaybebelowthemedianbytheendofthetwo-yearperiod.In2020,Meridian,actingasindependentcompensationconsultanttotheGovernanceCommittee,assistedinitsreviewofdirectorcompensationandbestpracticesindirectorcompensationdesign.Baseduponthatreview,theBoarddidnotmakeanychangestodirectors'compensationfor2021.

Elements of Compensation AnnualCashRetainer $162,500peryear

AnnualEquityRetainer $162,500peryear,payableundertheDirectorsEquityPlan

AuditCommitteeChairmanCashRetainer $30,000peryear

ManagementDevelopmentandCompensationCommitteeChairmanCashRetainer

$30,000peryear

OtherCommitteeChairmanCashRetainers $20,000peryear

IndependentLeadDirectorCashRetainer $50,000peryear

DirectorEducation Reimbursedforcostsandexpenses

Equity CompensationTheannualequityretainerispaidinstockunitsundertheLockheedMartinCorporationAmendedandRestatedDirectorsEquityPlan(DirectorsEquityPlan).Exceptincertaincircumstances,stockunitsvest50percentonJune30and50percentonDecember31followingthegrantdate.Uponachangeincontroloradirector’sretirement,death,ordisability,thedirector’sstockunitsbecomefullyvested.Uponadirector’sterminationofservicefromourBoard,wedistributethevestedstockunits,atthedirector’selection,inwholesharesofstockorincash,inalumpsumorinannualinstallmentsoveraperiodofupto20years.Priortodistribution,adirectorhasnovoting,dividendorotherrightswithrespecttothestockunitsheldundertheDirectorsEquityPlan,butiscreditedwithadditionalstockunitsrepresentingdividendequivalents(convertedtostockunitsbasedontheclosingpriceofourstockonthedividendpaymentdates).TheDirectorsEquityPlanprovidesthatadirectoreligibleforretirementatthenextannualmeetingreceivesaproratedgrant(one-third)forthefourmonthsofservicepriortotheannualmeeting.

ConsistentwiththetermsoftheDirectorsEquityPlan,adirectorwhohassatisfiedtheBoard’sstockownershipguidelinesmayelecttohavevestedstockunitsawardedonorafterJanuary1,2018(togetherwithanydividendequivalentsthereon)paidinalumpsumonthefirstbusinessdayofAprilfollowingvestingoftheawardratherthanfollowingterminationofBoardservice.AnydirectorwhohasnotelectedearlypaymentsorhasnotsatisfiedthestockownershipguidelineswillcontinuetobepaidalongwithanyaccumulateddividendequivalentsuponterminationorretirementfromtheBoard.

AlthoughtheDirectorsEquityPlanauthorizesthegrantofstockunitsorstockoptions,inJune2014,theBoardapprovedaresolutiontotheeffectthateachnon-employeedirectorwouldelecttoreceivetheequityportionoftheretainerintheformofstockunitsforeachyearbeginningwith2015andwouldnotelectoptionstopurchasesharesunlesstheBoardresolutionisfurtheramendedorrevoked.

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Deferred CompensationTheLockheedMartinCorporationDirectorsDeferredCompensationPlan(DirectorsDeferredCompensationPlan)providesnon-employeedirectorstheopportunitytodeferupto100percentofthecashportionoftheirfees.Atthedirector'selection,deferredamountstracktheperformanceof:(i)theinvestmentoptionsavailableundertheemployeedeferredcompensationplans;or(ii)ourcommonstock(withdividendsreinvested).Deferredamountsaredistributedinalumpsumorinupto15annualinstallmentscommencingatatimedesignatedbythedirectorfollowingtermination.

Director Stock Ownership GuidelinesToaligntheirinterestswiththelong-terminterestsofourstockholders,weexpectourdirectorstomaintainanownershipinterestintheCorporation.Underourstockownershipguidelinesfordirectors,non-employeedirectorshavefiveyearsfromthetimetheyjointheBoardtoachievestockownershiplevels(commonstockorstockunits)equivalenttofivetimestheannualcashretainer.Eachnon-employeedirectorhasexceededthestockownershipguidelines,exceptforMr.Dunford,Mr.Johnson,Ms.HollubandMs.Reed-Klages(whojoinedtheBoardwithinthepastthreeyears).Mr.TaicletissubjecttotheStockOwnershipRequirementsforKeyEmployeesasdescribedonpage56.

2020 Director Compensation TableThefollowingtableprovidesinformationonthecompensationofourdirectorsforthefiscalyearendedDecember31,2020.Ms.HewsondidnotreceiveseparatecompensationforserviceasadirectoroftheCorporationduring2020.Mr.TaicletreceivedcompensationforserviceasadirectoroftheCorporationuntilhebecamePresidentandChiefExecutiveOfficeronJune15,2020.Mr.Taiclet's2020directorcompensationisreportedintheSummaryCompensationTable,StockAwardscolumn(e)andAllOtherCompensationcolumn(i),onpage58.

Fees Earned orPaid in Cash Stock Awards

All OtherCompensation Total

Name* ($) ($) ($) ($)

(a) (b) (c) (g) (h)

DanielF.Akerson 232,500 162,500 46 395,046

DavidB.Burritt 162,500 162,500 335 325,335

BruceA.Carlson 162,500 162,500 1,815 326,815

JosephF.Dunford,Jr.* 143,750 135,417 0 279,167

JamesO.Ellis,Jr. 182,500 162,500 5,683 350,683

ThomasJ.Falk 192,500 162,500 10,295 365,295

IleneS.Gordon 192,500 162,500 12,312 367,312

VickiA.Hollub 162,500 162,500 2,887 327,887

JehC.Johnson 162,500 162,500 281 325,281

DebraReed-Klages 162,500 162,500 0 325,000

* Mr.DunfordjoinedtheBoardeffectiveFebruary10,2020.

Fees Earned or Paid in Cash (Column (b))Representstheaggregatedollaramountof2020feesearnedorpaidincashforservicesasadirector,includingannualretainer,committeechairmanretainerandindependentLeadDirectorretainer.

Director Compensation


Stock Awards (Column (c))RepresentstheaggregategrantdatefairvaluecomputedinaccordancewithASC718forawardsofstockunitsin2020undertheDirectorsEquityPlan.For2020,eachofMessrs.Akerson,Burritt,Carlson,Ellis,Falk,Johnson,andMs.Gordon,Ms.HollubandMs.Reed-Klageswascreditedwith372.7919stockunitswithanaggregategrantdatefairvalueof$162,500.Thegrantdatefairvalueoftheseawardswastheclosingpriceofourstock($435.90)onthedateofthegrant(January30,2020).Mr.Dunfordwascreditedwith355.0981stockunitswithanaggregategrantdatefairvalueof$135,417.Thegrantdatefairvalueforhisawardwas$381.35pershareonthedateofgrant(March2,2020).

All Other Compensation (Column (g))Perquisitesandotherpersonalbenefitsprovidedtodirectorsdidnotexceed$10,000.Allothercompensationincludesmatchingcontributionsmadetoeligibleuniversities,colleges,andothernon-profitorganizationsundertheCorporation’smatchinggiftprogramsthataregenerallyavailabletoallemployees.TheCorporation’smatchingcontributionincludesthefollowingcharitablecontributionsmadein2020ortobemadebytheCorporationin2021tomatchacontributionintheprioryear:Mr.Ellis$1,000;Mr.Falk$10,000;Ms.Gordon$12,000;andMs.Hollub$1,000.Otheramountsincludetaxassistancerelatedtotravelexpensesforaninvitedguestaccompanyingadirectorwhileonbusinesstravel.

Director Compensation

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Security Ownership of Management and Certain Beneficial OwnersDirectors and Executive OfficersThefollowingtableshowsLockheedMartincommonstockbeneficiallyownedbyandstockunitscreditedtoeachNEO,director,nomineeandallNEOs,directors,nomineesandotherexecutiveofficersasagroupasofFebruary26,2021.Exceptasotherwisenoted,thenamedindividualshavesolevotingandinvestmentpowerwithrespecttosuchsecurities.Nodirector,nomineeorNEO,individuallyorasagroup,beneficiallyownedmorethanonepercentofouroutstandingcommonstock.Allamountsareroundedtothenearestwholeshare.Noshareshavebeenpledged.Theaddressofeachdirector,nomineeandexecutiveofficerisc/oLockheedMartinCorporation,6801RockledgeDrive,Bethesda,MD20817.

Name Common Stock (1) (2)Stock

Units* Total

DanielF.Akerson 7,503 3 4,952 5 12,455

RichardF.Ambrose 7,311 25,506 7,8,9 32,817

DavidB.Burritt 6,512 17,993 5,6 24,505

BruceA.Carlson 1,172 2,929 5,6 4,101

JamesF.Dunford,Jr. 362 501 5 864

JamesO.Ellis,Jr. 20,015 1,597 5 21,612

ThomasJ.Falk 5,250 4 11,788 5 17,038

IleneS.Gordon 980 2,655 5 3,635

MarillynA.Hewson 148,909 38,050 7,8,9 186,959

VickiA.Hollub 1,202 1,227 5,6 2,429

JehC.Johnson 1,419 501 5 1,921

KennethR.Possenriede 3,591 16,544 7,8,9 20,135

DebraL.Reed-Klages 607 501 5 1,109

FrankA.St.John 6,817 12,560 7,8,9 19,377

JamesD.Taiclet 2,413 38,174 8,9 40,587

Alldirectors,nomineesandexecutiveofficersasagroup(21individuals) 257,871 233,807 491,678

* DoesnotincludePSUs.

(1) Includescommonstocknotcurrentlyownedbutwhichcouldbeacquiredwithin60daysthroughtheexerciseofstockoptionsforMs.Hewson82,935.IncludessharespayableatterminationwithrespecttovestedstockunitscreditedundertheDirectorsEquityPlanforwhichadirectorhaselectedpaymentinstockforMr.Burritt509;Mr.Carlson1,172;Mr.Dunford362;Mr.Ellis19,815;Ms.Gordon230;Ms.Hollub1,202;Mr.Johnson1,419;Ms.Reed-Klages452;andMr.Taiclet1,036.Unitsforwhichadirectorhaselectedpaymentincasharereportedinthe“StockUnits”column.Therearenovotingrightsassociatedwithstockunits.

(2) Includessharesattributabletotheparticipant’saccountintheLockheedMartinSalariedSavingsPlanforMr.Ambrose365;Ms.Hewson527;Mr.Possenriede804;Mr.St.John10;andMr.Taiclet23.Participantshavevotingpowerandinvestmentpowerovertheshares.

(3) ForMr.Akerson,includes3sharesheldbyhisspouse.

(4) RepresentssharesbeneficiallyownedbyMr.Falkandhisspousethroughafamilylimitedpartnership.

(5) RepresentsstockunitsundertheDirectorsEquityPlanforwhichdirectorshaveelectedtoreceivedistributionsofunitsintheformofcashandunvestedstockunitscreditedonFebruary1,2021(annualequityaward501)forMr.Akerson4,952;Mr.Burritt10,019;Mr.Carlson2,537;Mr.Dunford501;Mr.Ellis1,597;Mr.Falk11,788;Ms.Gordon2,655;Ms.Hollub501;Mr.Johnson501;andMs.Reed-Klages501.Therearenovotingrightsassociatedwithstockunits.

(6) RepresentsstockunitsundertheDirectorsDeferredCompensationPlanrepresentingdeferredcashcompensationforMr.Burritt7,974;Mr.Carlson392andMs.Hollub726.Thestockunits(includingdividendequivalentscreditedasstockunits)aredistributedintheformofcash.Therearenovotingrightsassociatedwithstockunits.

Security Ownership of Management and Certain Beneficial Owners

80

(7) Includesstockunitsattributabletotheparticipant’saccountundertheDMICPforMr.Ambrose12,075;Ms.Hewson9,238;Mr.Possenriede1,908;andMr.St.John140.Althoughmostoftheunitswillbedistributedfollowingterminationorretirementinsharesofstock,noneoftheunitsareconvertibleintosharesofstockwithin60daysofFebruary26,2021.Therearenovotingrightsassociatedwithstockunits.

(8) Includesstockunitsattributabletotheparticipant’saccountundertheNQSSPforMr.Ambrose3,216;Ms.Hewson4,040;Mr.Possenriede2,097;Mr.St.John99andMr.Taiclet22.Amountscreditedtoaparticipant’saccountintheNQSSParedistributedincashfollowingterminationofemployment.Therearenovotingrightsassociatedwithstockunits.

(9) IncludesunvestedRSUsforMr.Ambrose10,215;Ms.Hewson24,772;Mr.Possenriede12,539;Mr.St.John12,321;andMr.Taiclet38,152.EachRSUrepresentsacontingentrighttoreceiveoneshareofcommonstock.TherearenovotingrightsassociatedwithRSUs.

Security Ownership of Certain Beneficial OwnersThefollowingtableshowsinformationregardingeachpersonknowntobea“beneficialowner”ofmorethan5%ofourcommonstock.Forpurposesofthistable,beneficialownershipofsecuritiesgenerallymeansthepowertovoteordisposeofsecurities,ortherighttoacquiresecuritieswithin60daysthatmaybevotedordisposedof,regardlessofanyeconomicinterestinthesecurities.AllinformationshownisbasedoninformationreportedbythefileronaSchedule13GfiledwiththeSEConthedatesindicatedinthefootnotestothistable.

Name and AddressAmount of

Common StockPercent of

Outstanding Shares

StateStreetCorporation(1)StateStreetFinancialCenterOneLincolnStreetBoston,MA02111

41,481,043 14.8

TheVanguardGroup(2)100VanguardBoulevardMalvern,PA19355

21,657,574 7.7

BlackRock,Inc.(3)55East52ndStreetNewYork,NY10055

16,564,701 5.9

CapitalWorldInvestors(4)

333SouthHopeStreetLosAngeles,CA90071

16,187,677 5.8

(1) AsreportedonaSchedule13G/AfiledonFebruary24,2021byStateStreetCorporationonbehalfofitselfandspecifieddirectandindirectsubsidiaries(StateStreet)intheirvariousfiduciaryandothercapacities.StateStreethadsharedvotingpowerwithrespectto40,620,469sharesandshareddispositivepowerwithrespectto41,478,942sharesanddidnothavesoledispositiveorsolevotingpoweroveranyshares.StateStreetBankandTrustCompany(SSBTC)isthetrusteeandStateStreetGlobalAdvisorsTrustCompany(SSGA)istheindependentfiduciaryandinvestmentmanagerforLockheedMartincommonstockheldinamastertrustforLockheedMartinbenefitplans.SSBTCbeneficiallyowns31,697,118ofthesharesheldbyStateStreetallofwhichareheldinitscapacityastrusteeforvariousLockheedMartinbenefitplansandSSBTChadsharedvotingpowerover31,697,118sharesandshareddispositivepowerover1,306,864shares.SSGAbeneficiallyowns36,204,035ofthesharesheldbyStateStreetofwhich30,390,254wereheldbySSGAasindependentfiduciaryandinvestmentmanagerforLockheedMartinemployeebenefitplansandSSGAhadsharedvotingpowerover5,148,403sharesandshareddispositivepowerover36,203,371shares.

(2) AsreportedonaSchedule13G/AfiledonFebruary10,2021byTheVanguardGroup.TheVanguardGrouphadsoledispositivepowerover20,577,480shares,shareddispositivepowerover1,080,094shares,sharedvotingpowerover411,585sharesanddidnothavesolevotingpoweroveranyshares.

(3) AsreportedonaSchedule13G/AfiledonJanuary29,2021byBlackRock,Inc.BlackRock,Inc.hadsoledispositivepowerover16,564,701sharesandsolevotingpowerover15,117,838sharesanddidnothaveshareddispositiveorsharedvotingpoweroveranyshares.

(4) AsreportedonaSchedule13G/AfiledonFebruary16,2021byCapitalWorldInvestors(CapitalWorld),adivisionofCapitalResearchandManagementCompany.CapitalWorldhadsoledispositivepowerover16,187,677sharesandsolevotingpowerover16,174,893sharesanddidnothaveshareddispositiveorsharedvotingpoweroveranyshares.

Proposal

4Stockholder Proposal to Adopt Stockholder Action by Written Consent• Stockholdershaverejectedsubstantiallysimilarproposalsfromthesameproponentsixtimespreviously,includinglastyear.

• Stockholdersalreadyhavetherighttocallaspecialmeetingatanytime.

• StrongexistingcorporategovernancepoliciesprovidestockholdersmultiplemeanstoexpresstheirviewsandensureBoardaccountability.

The Board unanimously recommends that you vote AGAINST Proposal 4.

Mr.JohnCheveddenhasinformedusthatheintendstointroducetheproposalsetforthbelowattheAnnualMeeting.

BeginningofStockholderProposal—TextandGraphicareReprintedfromtheStockholderSubmission:

Proposal4—ShareholderRighttoActbyWrittenConsent

Shareholdersrequestthatourboardofdirectorsundertakesuchstepsasmaybenecessarytopermitwrittenconsentbyshareholdersentitledtocasttheminimumnumberofvotesthatwouldbenecessarytoauthorizetheactionatameetingatwhichallshareholdersentitledtovotethereonwerepresentandvoting.Thisincludesshareholderabilitytoinitiateanyappropriatetopicforwrittenconsent.

Takingactionbywrittenconsentinplaceofameetingisameansshareholderscanusetoraiseimportantmattersoutsidethenormalannualmeetingcycleliketheelectionofanewdirector.

ItisalsomoreimportantthanevertobeabletoreplaceadirectorthroughwrittenconsentbecauseitisnowalmostimpossibletoremoveaLockheedMartindirectorotherwisebecauseadirectorcanberemovedonlyforcause.Removalonlyforcauseisaneuphemisticwaytosaythatadirectorhasnearimmunitytobeingremoved.

Thisproposaltopicwonoutstanding47%supportatthe2020LockheedMartinannualmeeting.Andthiswasbeforetheshareholderrighttocallaspecialin-personshareholdermeetingwasessentiallyeliminatedbythe2020pandemic.Plusa2020LMTbylawchangeappearstomeanthatshareholdersmaynowonlyget10-daysnoticeofashareholdermeeting.

AlsothedeliberationsoftheLockheedMartinBoardonthistopicin2020,withMr.DanielAkersonasGovernanceCommitteeChairman,completelyoverlookedthesafeguardsthatcanbebuiltintograntingshareholdersarighttoactbywrittenconsent.

Plusthe2020shareholderproposalonthistopiccouldnotforeseethatthepandemicwouldseverelyrestrictafuturespecialshareholdermeetingwhichcouldsimplybeabarebonesonlinemeetingwithrestrictedinteraction.AndtheGovernanceCommitteeunderMr.Akersonrestedalotofitsargumentontheoutdatednotionofwhatcouldbeaccomplishedataspecialshareholdermeeting.

TheBankofNewYorkMellonCorporation(BK)saiditadoptedwrittenconsentin2019after45%-support(2%lessthanthe2020LMTvote)forawrittenconsentshareholderproposal.Andthiswasayearbeforethepandemicputanendtoin-personshareholdermeetings—perhapsforever.Itissomucheasierformanagementtoconductanonlineshareholdermeetingthatmanagementisnowspoiledandwillneverwanttoreturntoanin-personshareholdermeeting.

Shareholdersarealsoseverelyrestrictedinmakingtheirviewsknownatonlineshareholdermeetingsbecauseallchallengingquestionsandcommentscanbescreenedoutatanonlinemeeting.

ForinstanceGoodyearmanagementhitthemutebuttonrightinthemiddleofaformalshareholderproposalpresentationatits2020shareholdermeetingtobarconstructivecriticism.

Shareholdersnowneedtohavetheoptionmorethanevertotakeactionoutsideofashareholdermeetingsinceonlineshareholdermeetingsareshareholderengagementwasteland.

Pleasevoteyes:

ShareholderRighttoActbyWrittenConsent—Proposal4

EndofStockholderProposal—BoardOppositionStatementonFollowingPage


Board of Directors Statement in Opposition to Proposal 4TheBoardrecommendsthatstockholdersvoteAGAINSTthisproposalbecausetheBoardviewstherequestedchangeasnotinthebest interests of the stockholders and unnecessary given the Corporation’s strong corporate governance practices and Boardaccountabilitytostockholders,asdescribedbelow.

• SubstantiallyidenticalproposalswererejectedbytheCorporation’sstockholdersin2020,2018,2015,2014,2013and2011.Thiswillbetheseventhtimeinthepasttenyearsthatthesameproponenthasproposedasubstantiallysimilarproposalandeachprevioustimestockholdershaverejectedsuchaproposal.TheBoarddoesnotbelieveanymaterialdevelopmentshaveoccurredsincethelasttimestockholdersrejectedsuchaproposalthatshouldchangestockholders’viewsonthisproposal.

• Ourstockholdersalreadyhavetherighttocallaspecialmeetingatanytime.Anystockholderwhoindividuallyowns10percent,orstockholderswhointheaggregateown25percent,ofouroutstandingcommonstockmaydemandthecallingofaspecialmeetingtoconsideranybusinessproperlybeforethestockholders.Thisthresholdishalf(orless)ofwhatwouldbenecessarytoactbywrittenconsentundertheproposal.Therightsrequestedbytheproposalwouldbeduplicativeofthisexistingstockholderrighttocallaspecialmeeting,butwithoutimportantprotectionsandadvantagesaffordedbythestockholdermeetingprocess.Seebelowand“StockholderRighttoCallSpecialMeeting”onpage32.

• TheBoardbelievesallowingstockholderstoactbywrittenconsentcircumventsthedeliberativestockholdermeetingprocess.Implementationofthisproposalcouldresultinanunfairandunsoundprocessbecauseitallowsstockholderstotakeactionwithoutcomplyingwiththeproceduralsafeguardsinherentinthestockholdermeetingprocess.Forexample,actionbywrittenconsentdoesnotrequirethatallstockholdersreceivenoticeofthewrittenconsentproposal,begivenadequatetimetoreviewthesubjectmatteroftheproposalorbegiventheopportunitytoconsideralternativeviewsontheproposal.TheBoardbelievesthatrequiringstockholderbusinessbeacteduponatameetingisaninherentlymorestructured,democraticandopenprocessandhelpstoensuretheaccuracyandcompletenessofinformationpresentedtoallstockholdersfortheirconsideration.

• Writtenconsentprovidesagreateropportunityforabuse.Theproposaldoesnotimposeanyownershiprequirementsonthestockholderssolicitingwrittenconsentand,asaresult,itcouldbeinitiatedbyasinglestockholderholdingaverysmallnumberofshares.Itmayencourageshort-termstockownershipmanipulationbyasmallgroupofinvestors(includingthosewhoaccumulateashort-termvotingpositionthroughborrowedshares)toadvanceaspecialagendathatmaybecontrarytothelong-termbestinterestsoftheCorporationanditsstockholders.Theproposalmayalsocreateconfusionbecausemultiplegroupsofstockholderswouldbeabletosolicitwrittenconsentssimultaneously,someofwhichmaybeduplicativeorcontradictory.

• Wehavealong-standingcommitmenttosoundcorporategovernancepracticesandanactiveinvestorengagementprogramtoensureBoardaccountability.AtthedirectionoftheBoard,theCorporationengagesdirectlywithitsstockholdersthroughouttheyeartoseektheirviewsonanarrayofissues,includingcorporategovernancematters.Inadditiontothethen-existingrighttocallaspecialmeeting,theBoardproactivelyadoptedproxyaccessin2016,whichgivesstockholderstherighttoincludedirectornominationsintheCorporation'sproxystatementfortheannualmeeting,andin2017theBoardproactivelyamendedtheCorporation'sBylawstoprovidethatthestockholdershavethepowertoamendtheCorporation'sBylaws.Ourdirectorsalsoremainaccountabletoourstockholdersthroughannualelectionsbyourstockholderswithamajorityvotingstandardandaresignationpolicyfordirectorswhodonotreceiveamajorityofvotescastinanuncontestedelection.OurBoardhasdemonstrateditscommitmenttoBoardrefreshmentandtotheelectionofhighlyqualifiedindependentdirectorswhobringdiverseperspectivestoourBoardwithskillsthatarealignedwithourlong-termbusinessstrategy.Overthepastfiveyears,sixnewindependentdirectorshavebeenelectedtotheBoard.In2019,theBoardalsoelectedanewindependentLeadDirector.

TheBoardwillcontinuetoreviewcorporategovernancebestpracticesandadoptthosepracticesthatitbelieves,inlightofthecircumstances,servethebestinterestsoftheCorporationandourstockholders.

Proposal 4: Stockholder Proposal to Adopt Stockholder Action by Written Consent

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Proposal

5Stockholder Proposal to Issue a Report on Human Rights Due Diligence• TheCorporation’sexistingpoliciesandpracticesreflectourstrongcommitmenttoethicalbusinesspracticesandrespectforhumanrights

• SalesofourproductsandservicestotheU.S.anditsalliespromoteglobalsecurityandaredoneincompliancewithapplicablelaws

• Preparingthereportwouldproducelittleornovaluetostockholdersbutwouldimposeanunnecessaryburdenandexpenseonourcompany

The Board unanimously recommends that you vote AGAINST Proposal 5.

WehavebeeninformedthattheSistersofCharityofSaintElizabeth,TheSistersofSt.FrancisofPhiladelphiaandtheSchoolSistersofNotreDameCooperativeInvestmentFundintendtointroducetheproposalsetforthbelowattheAnnualMeeting.

BeginningofStockholderProposal—TextandFootnotesareReprintedfromtheStockholderSubmission:

Whereas:LockheedMartinistheworld’slargestdefensecontractorandisexposedtosignificantactualandpotentialadversehumanrightsimpactsresultingfromtheuseofitsweaponsanddefensetechnologies.Humanrightsrisksincludetherightstolife,libertyandpersonalsecurity,privacy,non-discrimination,andpeacefulassemblyandassociation.TheUNGuidingPrinciplesonBusinessandHumanRights(UNGPs),unanimouslyendorsedbytheUNHumanRightsCouncilinJune2011,constitutetheglobalauthoritativeframeworkoutliningtherolesandresponsibilitiesofstatesandcompanieswithrespecttohumanrights.Whileregulationoftheinternationalarmstradefallsunderthestatedutytoprotecthumanrights,theUNGPsdefineclearexpectationsfordefensecompaniestorespecthumanrightsintheiroperationsandsupplychains,andaddressriskslinkedtouseofproducts.A2019AmnestyInternationalreportfoundthatLockheedMartinlackshumanrightsduediligenceprocedurestoeffectivelyidentify,assess,prevent,mitigate,andremediateitshumanrightsimpacts.1

ProminenthumanrightsorganizationshaverecordedindiscriminatoryuseofLockheedMartinweaponryagainstciviliansconsistentlyovertime.2LockheedMartinhasexportedmilitarygoodstoatleast12stateswhichareengagedinarmedconflict,havearecordofhumanrightsviolations,orareatriskofcorruptionandfragility,includingSaudiArabia,Israel,andtheUnitedArabEmirates(UAE).ReportshavelinkedLockheedMartinweaponrytowarcrimesandviolationsofinternationalhumanitarianlawinYemen,includingthewidelycondemnedattackonaschoolbusin2018thatresultedinthedeathsofdozensofchildren.3ThecompanyissettoplayacentralroleinthesaleofF-35fighterjetstotheUAE,aspartofthecountry’srecentnormalizationagreementwithIsrael.4

Thecompanyisconnectedto$40billionincontractsrelatedtonuclearweapons.5TheTreatyontheProhibitionofNuclearWeapons,whichentersintoforcein2021,mayrequireLockheedMartintodemonstratethatthecompanyisnotconductingprohibitedactivitiesinjurisdictionsthatratifiedtheTreaty.

Furthermore,thecompanyfacesmultiplelawsuitsfortoxicpollutantcontaminationfromaFloridafacilitythathasresultedinbrainlesions,multiplesclerosis,cancer,andbirthdefects,aswellaslitigationlinkedtoauraniumfacility.

InspiteofitsexistingCodes,thereisnoevidenceofeffectiveimplementationacrossbusinessfunctions.6Disclosureongovernanceandembeddingofthecommitmenttorespecthumanrightsthroughoutthebusinessisabsent.Failuretorespecthumanrightsandincreaseduediligenceinhighriskbusinessareasexposesthecompanyanditsinvestorstofinancial,legal,regulatory,reputational,andhumancapitalmanagementrisks.

Resolved:ShareholdersrequesttheBoardofDirectorsprepareareport,atreasonablecostandomittingproprietaryinformation,onLockheedMartin’shumanrightsduediligenceprocesstoidentify,assess,prevent,mitigate,andremedyactualandpotentialhumanrightsimpactsassociatedwithhigh-riskproductsandservices,includingthoseinconflict-affectedareas.____________________1https://www.amnesty.org/download/Documents/ACT3008932019ENGLISH.PDF2https://www.hrw.org/reports/2007/lebanon0907/lebanon0907web.pdf;https://www2.ohchr.org/english/bodies/hrcouncil/docs/12session/A-HRC-12-48.pdf3https://www.paxforpeace.nl/media/files/mwatana-day-of-judgement.pdf4https://www.bbc.com/news/world-middle-east-547370295https://www.un.org/law/icjsum/9623.htm6https://www.lockheedmartin.com/content/dam/lockheed-martin/eo/documents/ethics/ethics-code-of-conduct-2020.pdf

EndofStockholderProposal—BoardOppositionStatementonFollowingPage


Board of Directors Statement in Opposition to Proposal 5TheBoardhasconsideredthisproposalandrecommendsthatstockholdersvoteAGAINSTthisproposalforthefollowingreasons:

• TheBoardbelievestheCorporation’sexistingpoliciesandpracticesappropriatelyandadequatelyaddresstheconcernsraisedinthisproposal.Ourpolicies,procedures,andpracticesreflectourstrongcommitmenttoethicalbusinesspracticesandrespectforhumanrights.AsoutlinedinourGoodCorporateCitizenshipandRespectforHumanRightsPolicy(HumanRightsPolicy),atLockheedMartin,webelievethatrespectforhumanrightsisanessentialelementofbeingagoodcorporatecitizen.OurcommitmenttorespecthumanrightsunderliesSettingtheStandard,theLockheedMartinCodeofEthicsandBusinessConduct(CodeofConduct),andourstatedvalues—DoWhat’sRight,RespectOthers,andPerformwithExcellence.Thiscommitmentappliestoallemployees,theBoard,andotherswhorepresentoractforus.Thispolicyoutlineshumanrightscommitmentsthatincludefairemploymentpracticesandwages,andtheprohibitionofharassment,discrimination,childorforcedlaborandhumantrafficking.OurcommitmenttogoodcorporatecitizenshipandhumanrightsisalsoreinforcedthroughourSupplierCodeofConduct,whichsetstheexpectationthatoursupplierswillhonorthesamevalueswedo.Inaddition,onSeptember1,2020,weadoptedacorporatepolicyontheethicaldevelopmentofuseofartificialintelligence(AI)thatoutlinesourprinciplesandconceptsforthedevelopment,procurement,deploymentorinternaluseofAIsystemsconsistentwithourCodeofConduct,includingconsiderationofhumanrights,withafocusonensuringthatweremainresponsible,wetakedeliberatestepstominimizeunintendedbias,capabilitiesaretraceablewithtransparentandauditablemethodologies,capabilitiesarereliablewithexplicit,well-defineduses,andareabletodetectandavoidunintendedconsequences.WemakeourHumanRightsPolicy,CodeofConductandSupplierCodeofConductpubliclyavailableonourwebsite.PleaseseetheHumanRightssectionoftheproxystatementonpage27foradescriptionofourhumanrightspolicyandprinciples,duediligenceapproachandBoardoversight.

• OurmilitarysalesactivitiespromoteglobalsecurityandareregulatedbytheU.S.GovernmentandreviewedandapprovedbytheExecutiveBranchwithoversightfromCongresstoensuretheysupportU.S.nationalsecurityandforeignpolicyobjectives,includingconsiderationofwhetheranyarmstransfercontributestotheriskofhumanrightsabuses.Internationalsalesofourdefenseproductsandservicesoccuronagovernment-to-governmentbasisviaforeignmilitarysales(FMS)programs,andbydirectcommercialsalesfromLockheedMartintoourcustomers.BothformsoftransactionsareauthorizedbytheArmsExportControlActandsupportU.S.foreignpolicyobjectives.TheDefenseSecurityCooperationAgencymanagesFMSsalesfortheU.S.DepartmentofDefense.TheseactivitiesareregulatedbytheU.S.governmentandarereviewedandapprovedbytheExecutiveBranchandCongresstoensurethattheysupportU.S.nationalsecurityandforeignpolicyobjectivesandthatarmsarenotredirectedandusedforunauthorizedpurposes.Theapplicableregulatoryprocessesrequirethesebranchesofgovernmenttoconsidertheriskthatanarmstransfercontributestoabusesofhumanrights.WestrictlyadheretoU.S.governmentoversightandpolicyinallmattersrelatingtointernationalsalesandspecificallytothetransferofproductsandtechnologiestoforeignentities,andhavearobusttradecomplianceprogramtoensurethatallsalesofourproductsareconductedinaccordancenotonlywithinternationaltradelawsandregulationsoftheU.S.butalsoofeachforeigncountryinwhichweoperate.AllofoursalesaresubjecttoourCodeofConductandallapplicableU.S.andforeignlawsandregulations,includingthoserelatedtoanti-corruption,import-exportcontrol,taxation,repatriationofearnings,exchangecontrolsandtheanti-boycottprovisionsoftheU.S.ExportControlsReformActof2018.

• PreparingthereportcalledforbythestockholderproposalwouldproducelittleornobenefittoourstockholdersbutwouldimposeunnecessaryburdenandexpenseontheCorporation.Webelievethereportcalledforbythestockholderproposalisunnecessaryinlightofourexistinghumanrightspoliciesandthattheconcernsraisedbytheproposalwouldbemoreappropriatelydirectedtopublicofficialswhodetermineforeignpolicyratherthanbeingchanneledthroughthefederalproxyrules.AformalreportascontemplatedbytheproposalwouldbecostlyandtimeconsumingtoproduceandtheproposalrelatestotheCorporation’sordinarybusinessoperations,whichistheproperpurviewofmanagementasoverseenbytheBoard.

TheBoardremainscommittedtohumanrightsandensuringthatLockheedMartincontinuestoadheretothehighstandardforhumanrightstowhichitholdsitself.Wedonotbelievethereportcalledforbythestockholderproposalwouldenhancethoseobjectivesand,forthereasonssetforthabove,wedonotbelievethepreparationofareportisinthebestinterestsofthestockholders.

Proposal 5: Stockholder Proposal to Issue a Report on Human Rights Due Diligence

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Annual Meeting Questions and Answers

Why is the Annual Meeting format virtual?TheCorporationwillconducttheAnnualMeetingexclusivelyonlinethroughaliveaudiowebcastviatheInternet.WehaveadoptedthisformattoassistinprotectingthehealthandsafetyoftheCorporation'sstockholdersandemployeesinlightofcontinuedpublichealthconcernsregardingCOVID-19andtofacilitatestockholderattendanceandtoenablestockholderstoparticipatefullyandequally,regardlessofsize,resources,orphysicallocation.TheseProxyMaterialsincludeinstructionsonhowtoaccessandparticipateinthevirtualAnnualMeetingandhowyoumayvoteyoursharesbeforeorduringtheAnnualMeeting.

How do I participate in the virtual Annual Meeting?StockholdersmayattendtheAnnualMeetingviatheInternetbyvisitingwww.meetingcenter.io/266927146.Thepassword,ifpromptedforone,isLMT2021.Youwillbepromptedtoentertheuniquecontrolnumberreceivedwithyourproxycard(forregisteredstockholders)orvotinginstructionform(forbeneficialowners)tojoinandparticipateinthemeeting.See"Whatisthedifferencebetweenholdingsharesasaregisteredstockholderandasabeneficialowner?"belowforinformationonhowtodeterminewhetheryouarearegisteredstockholderorabeneficialowner.

Whileweexpectthatthevastmajorityofbeneficialownerswillbeabletoparticipateusingthecontrolnumberreceivedwiththeirvotinginstructionform,werecommendthatbeneficialownersconfirmthisabilitywiththebroker,bankorothernomineethroughwhichtheyholdtheirshares.Ifyourbroker,bankorothernomineedoesnotprovideanabilitytoaccessthevirtualAnnualMeeting,thenyouwillberequiredtorequestalegalproxyfromthemtoparticipateinthevirtualAnnualMeeting.See"HowcanIvoteduringtheAnnualMeeting"forinformationonhowtorequestalegalproxy.

StockholderswhoholdsharesthroughaLockheedMartinbenefitplanwhojointheAnnualMeetingbyusingthecontrolnumberreceivedontheirvotinginstructionformwillbeabletoaskquestionsbutnotvoteduringthemeeting.

Ifyoudonothaveacontrolnumber,youmayparticipateintheAnnualMeetingasaguestbutwillnothavetheoptiontovoteoraskquestionsduringthemeeting.

TheAnnualMeetingwillbeginpromptlyat8:00a.m.EDT,onApril22,2021.Youmaybegintologintothemeetingplatformapproximately30minutesbeforethestartandtestyourcomputeraudiosystem.Weencouragestockholderstoaccessthemeetingpriortothestarttime.

How do I submit a question at the virtual Annual Meeting?Stockholdersaccessingthemeetingusingacontrolnumberprovidedontheirproxycardorvotinginstructionformwillbeabletosubmitquestions.Oncepasttheloginscreen,clickonthe"messages"icononthescreentosubmityourquestion.Wewillholdageneraldiscussionsessionattheconclusionofthemeetingduringwhichweintendtoanswerpertinentquestionssubmittedduringthemeeting,astimepermits.

What if I have technical difficulties accessing or during the meeting?Ifyouencounterdifficultiesaccessingthemeetingclickthe"AdditionalInformation"buttonontheMeetingCenterloginpageforassistance.Ifyouencounterdifficultiesafteraccessingthemeeting,clickthe"Help"buttonintheupperrighthandcornerofthemeetingpageforassistance.


Who is entitled to vote at the Annual Meeting?HoldersofourcommonstockatthecloseofbusinessonFebruary26,2021(theRecordDate)areentitledtoparticipateandvotetheirsharesattheAnnualMeeting.AsoftheRecordDate,therewere278,712,199sharesissuedandoutstanding.EachshareoutstandingontheRecordDateisentitledtoonevoteoneachproposalpresentedattheAnnualMeeting.ThisincludessharesheldthroughLockheedMartinDirectInvest,ourdividendreinvestmentandstockpurchaseplan,andthroughouremployeebenefitplans.Yourproxycardshowsthenumberofsharesheldinyouraccount(s)asoftheRecordDate.WhetherornotyouplantoattendthevirtualAnnualMeeting,theCorporationencouragesallstockholderstovoteontheproposalspriortotheAnnualMeetinginaccordancewiththeinstructionsyoureceivewithyourProxyMaterials.

What is the difference between holding shares as a registered stockholder and as a beneficial owner?Ifyoursharesareregistereddirectlyinyournamewithourtransferagent,ComputershareTrustCompany,N.A.(Computershare),youareconsideredthe“registeredstockholder”ofthoseshares.WemailtheProxyMaterialsandourAnnualReporttoyoudirectly.

Ifyoursharesareheldinastockbrokerageaccountorbyabankorothernominee(streetname),youareconsideredthe“beneficialowner”ofthesharesthatareregisteredinstreetname.Inthiscase,theProxyMaterialsandourAnnualReportwereforwardedtoyoubyyourbroker,bankorothernominee.Asthebeneficialowner,youhavetherighttodirectyourbroker,bankorothernomineehowtovoteyoursharesbyfollowingthevotinginstructionsincludedinthemailing.

ParticipantsinaLockheedMartinbenefitplanwithsharesallocatedtotheiraccountshouldreviewtheinformationonproceduresforvotingbyplanparticipantsonpage88.

What am I voting on and what are the Board voting recommendations?Ourstockholderswillbevotingonthefollowingproposalsifproperlypresented:

Proposal DescriptionBoard Voting

Recommendations Page

1 ElectionofDirectors FORALLDIRECTOR-NOMINEES 11

2 RatificationofAppointmentofErnst&YoungLLPasourIndependentAuditorsfor2021 FOR 36

3 AdvisoryVotetoApprovetheCompensationofourNamedExecutiveOfficers(Say-on-Pay) FOR 39

4 StockholderProposaltoAdoptStockholderActionbyWrittenConsent AGAINST 81

5 StockholderProposaltoIssueaReportonHumanRightsDueDiligence AGAINST 83

Can other matters be decided at the Annual Meeting?AtthetimethisProxyStatementwenttopress,wewerenotawareofanyothermatterstobepresentedattheAnnualMeeting.IfothermattersareproperlypresentedforconsiderationattheAnnualMeeting,theproxyholdersappointedbyourBoard(whoarenamedonyourproxycardifyouarearegisteredstockholder)willhavethediscretiontovoteonthosemattersinaccordancewiththeirbestjudgmentonbehalfofstockholderswhoprovideavalidproxybyInternet,bytelephoneorbymailifyoureceiveditbymail.

How can I vote in advance of the Annual Meeting?• Ifyoursharesareregisteredinyourname,youcanvoteusinganyofthemethodsdescribedbelow.

• Ifyoursharesareheldinthenameofabroker,bank,orothernominee,yournomineewillprovideyouwithinstructionsontheprocedureforvotingyourshares.Employeeswithsharesallocatedtoanemployeebenefitplanaccountshouldreviewtheinformationonproceduresforvotingbyemployeesonpage88.

• Ifyouholdsharesinmultipleaccounts,youmayreceivemultipleProxyMaterialpackages(electronicallyand/orbymail).PleasebesuretovoteallofyourLockheedMartinsharesineachofyouraccountsinaccordancewiththevotinginstructionsyoureceive.


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By Internet or TelephoneYoucanvoteyoursharesviatheInternetatwww.investorvote.com.Pleasehaveyourproxycardinhandwhenyougoonline.Youwillhaveanopportunitytoconfirmyourvotingselectionsbeforeyourvoteisrecorded.

Youcanvoteyoursharesbytelephonebycallingtollfree1-800-652-8683withintheU.S.,Canada,andPuertoRico,or1-781-575-2300fromotherlocations.Pleasehaveyourproxycardinhandwhenyoucall.Youwillhaveanopportunitytoconfirmyourvotingselectionsbeforeyourvoteisrecorded.

Internetandtelephonevotingfacilitiesforregisteredstockholderswillbeavailable24hoursadayuntilthevotingpollisclosedduringtheAnnualMeeting.IfyouvoteyoursharesontheInternetorbytelephone,youdonothavetoreturnyourproxycard.

TheavailabilityofInternetandtelephonevotingforbeneficialownerswilldependonthevotingprocessesofyourbroker,bankorothernominee.Youshouldfollowthevotinginstructionsinthematerialsthatyoureceivedfromyournominee.

By MailIfyoureceivedyourProxyMaterialsbymail,mark,dateandsigntheproxycardandreturnitinthepostageprepaidenvelopeprovided.Ifvotinginstructionsareprovided,sharesrepresentedbytheproxycardwillbevotedinaccordancewiththevotinginstructions.

IfyouwanttovoteinaccordancewiththeBoard’srecommendations,sign,dateandreturntheproxycardwithoutmarkingit.ThenamedproxyholderswillvotesignedbutunmarkedproxycardsinaccordancewiththeBoard’srecommendations.

Ifyouarearegisteredstockholder,andthepostageprepaidenvelopeismissing,pleasemailyourcompletedproxycardtoLockheedMartinCorporation,c/oComputershareInvestorServices,P.O.Box505045,Louisville,KY40233-9718.

How can I vote during the Annual Meeting?Ifyouarearegisteredstockholders,thenyoucanvoteelectronicallyduringtheAnnualMeetingbyaccessingthemeetingatwww.meetingcenter.io/266927146usingtheuniquecontrolnumberfoundonyourproxycardandthenfollowingtheinstructions.Thepassword,ifpromptedforone,isLMT2021.

Ifyouareabeneficialownerofshares,werecommendthatyouconfirmyourabilitytoparticipateduringthevirtualAnnualMeetingwiththebroker,bankorothernomineethroughwhichyouholdyourshares.Whileweexpectthatthevastmajorityofbeneficialownerswillbeabletoparticipateusingthecontrolnumberreceivedwiththeirvotinginstructionform,thismaynotbethecaseforeachbroker,bankorothernominee.Ifyourbroker,bankorothernomineeinformsyouthatyouwillnotbeabletoaccessthevirtualmeetingotherthanasaguest,thenyoumustregisterinadvancetoattendandvoteatthevirtualAnnualMeeting.Toregister,youmustobtainalegallyvalidproxyfromyourbroker,bankorothernomineeandpresentittoourtransferagent,Computershare.Afteryouhavereceivedavalidproxyfromyourbroker,bankorotheragent,itshouldbeemailedtoComputershareatlegalproxy@computershare.comandshouldbelabeled"LegalProxy"inthesubjectline.Pleaseincludeprooffromyourbroker,bankorotheragentofyourvalidproxy(e.g.,aforwardedemailfromyourbroker,bankorotheragentwithyourvalidproxyattached,oranimageofyourvalidproxyattachedtoyouremailorincludedinyourmailing).RequestsforregistrationmustbereceivedbyComputersharenolaterthan5:00p.m.EDT,onMonday,April19,2021.Youwillthenreceiveaconfirmationofyourregistration,withacontrolnumber,byemailfromComputershare.

Alegalproxyisanauthorizationfromyou(ifyouarearegisteredstockholder),oryourbroker,bankorothernominee(ifyouareabeneficialowner)tovotethesharesheldinyournameorinthenominee’snamethatsatisfiesMarylandlawandtheSECrequirementsforproxies.

StockholderswhoholdsharesthroughaLockheedMartinbenefitplanwhojointheAnnualMeetingbyusingtheuniquecontrolnumberreceivedontheirvotinginstructionformwillbeabletoaskquestionsbutnotvoteduringthemeeting.



Can I change my proxy vote?Yes.Ifyouarearegisteredstockholder,youcanchangeyourproxyvoteorrevokeyourproxyatanytimebeforetheAnnualMeetingby:

• returningasignedproxycardwithalaterdate;

• authorizinganewvoteelectronicallythroughtheInternetorbytelephone;

• deliveringawrittenrevocationofyourproxytoLockheedMartinCorporation,Attention:SeniorVicePresident,GeneralCounselandCorporateSecretary,6801RockledgeDrive,Bethesda,MD20817,beforeyouroriginalproxyisvotedattheAnnualMeeting;or

• votingelectronicallyduringtheAnnualMeeting.

Ifyouareabeneficialownerofshares,youcansubmitnewvotinginstructionsbycontactingyourbroker,bankorothernomineeandmaybeabletosubmitavoteattheAnnualMeetingdependingonwhatyourbroker,bankorothernomineeinformsyou.

What if I return my proxy card but do not provide voting instructions?Proxiesthataresignedandreturnedbutdonotcontainvotinginstructionswillbevoted:

• FORtheelectionoftheelevendirector-nomineeslistedinthisproxystatement(Proposal1);

• FORtheratificationoftheappointmentofErnst&YoungLLP,anindependentregisteredpublicaccountingfirm,asourindependentauditorsforthe2021fiscalyear(Proposal2);

• FORtheadvisoryvotetoapprovethecompensationofournamedexecutiveofficers(Say-on-Pay)(Proposal3);

• AGAINSTthestockholderproposaltoadoptstockholderactionbywrittenconsent(Proposal4);

• AGAINSTthestockholderproposaltoissueareportonhumanrightsduediligence(Proposal5);and

• InthebestjudgmentofthenamedproxyholdersifanyothermattersareproperlybroughtbeforetheAnnualMeeting.

How do I vote if I participate in one of the Corporation’s 401(k) or defined contribution plans?Asaparticipantinoneofouremployee401(k)ordefinedcontributionplans,youcandirecttheplantrusteeshowtovotesharesallocatedtoyouraccount(s)onavotingdirectioncard,electronicallythroughtheInternetorbytelephone.MostactiveemployeeswhoparticipateinthesebenefitplanswillreceiveanemailnotificationannouncingInternetavailabilityoftheProxyMaterialsandhowtosubmitvotingdirections.

Ifyoudonotprovidetimelydirectionstotheplantrustee,sharesallocatedtoyouraccount(s)willbevotedbytheplantrusteedependingonthetermsofyourplanorotherlegalrequirements.

PlanparticipantsmayattendthevirtualAnnualMeetingandaskquestions,butmaynotvoteplansharesattheAnnualMeeting.Ifyouwishtovote,whetheryouplantoattendthevirtualAnnualMeetingornot,youshoulddirectthetrusteeofyourplan(s)howyouwishtovoteyourplansharesnolaterthan11:59p.m.,EDT,onApril19,2021.

How many shares must be present to hold the Annual Meeting?InorderforustolawfullyconductbusinessatourAnnualMeeting,amajorityofthesharesoutstandingandentitledtovoteasoftheRecordDate,mustbepresentvirtuallyorbyproxy.Thisisreferredtoasaquorum.YoursharesarecountedaspresentattheAnnualMeetingifyouattendtheAnnualMeetingandvoteinpersonorabstainfromvoting,orifyouproperlyreturnaproxybyInternet,bytelephoneorbymailinadvanceoftheAnnualMeetinganddonotrevoketheproxy.

Will my shares be voted if I don’t provide my proxy or instruction card?Registered StockholdersIfyoursharesareregisteredinyourname,yourshareswillnotbevotedunlessyouprovideaproxybyInternetinadvanceoftheAnnualMeeting,bytelephone,bymail,orvoteelectronicallyduringtheAnnualMeeting.


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Plan ParticipantsIfyouareaparticipantinoneofouremployee401(k)ordefinedcontributionplansandyoudonotprovidetimelydirectionstotheplantrustee,sharesallocatedtoyouraccount(s)willbevotedbytheplantrusteedependingonthetermsofyourplanandotherlegalrequirements.

Beneficial OwnersIfyouholdsharesthroughanaccountwithabrokerandyoudonotprovidevotinginstructions,underNYSErules,yourbrokermayvoteyoursharesonroutinemattersonly.TheratificationoftheappointmentofErnst&YoungLLP(Proposal2)isconsideredaroutinematter,andyourbrokercanthereforevoteyoursharesonthatProposalevenifyoudonotprovidevotinginstructions.Proposals1,3,4,and5arenotconsideredroutinematters,andyourbrokercannotvoteyoursharesonthoseProposalsunlessyouprovidevotinginstructions.Voteswithheldbybrokersintheabsenceofvotinginstructionsfromabeneficialownerarereferredtoas“brokernon-votes.”

Multiple Forms of OwnershipTheCorporationcannotprovideasingleproxyorinstructioncardforstockholderswhoownsharesinmultipleformsasregisteredstockholders,planparticipantsorbeneficialowners.Asaresult,ifyoursharesareheldinmultipletypesofaccounts,youmustsubmityourvotesforeachtypeofaccountinaccordancewiththeinstructionsyoureceiveforthataccount.

What is the vote required for each proposal?ForProposal1,thevotesthatstockholderscast“FOR”adirector-nomineemustexceedthevotesthatstockholderscast“AGAINST”adirector-nomineetoapprovetheelectionofeachdirector-nominee.ForeachofProposals2,3,4and5theaffirmativevoteofamajorityofthevotescastisrequiredtoapprovetheproposal.

“Votescast”excludesbrokernon-votesandexcludesabstentions.Proposals2,3,4and5areadvisoryandnon-binding.However,theBoardwillreviewthevotingresultsontheseproposalsandtaketheresultsintoaccountwhenmakingfuturedecisionsregardingthesematters.

What is the effect of an abstention?AstockholderwhoabstainsonsomeorallmattersisconsideredpresentforpurposesofdeterminingifaquorumispresentattheAnnualMeeting,butanabstentionisnotcountedasavotecastunderMarylandlaw.Accordingly,anabstentionhasnoeffectonthevoteonanyproposal.

What is the effect of a broker non-vote?IfabrokercastsavoteonProposal2(RatificationofAuditors),thevotewillbeincludedindeterminingwhetheraquorumexistsforholdingthemeeting.Thebrokerdoesnothaveauthoritytovoteontheotherproposalsabsentdirectionsfromthebeneficialowner.

Asaresult,ifthebeneficialownerdoesnotvoteonProposals1,3,4,or5sothatthereisa“brokernon-vote”onthoseitems,thebrokernon-votesdonotcountasvotescastforthatproposalandhavenoeffectontheproposal.Thus,abrokernon-voteontheseproposalswillnotimpactourabilitytoobtainaquorum,willnotaffecttheoutcomewithrespecttotheelectionofdirectorsandwillnototherwiseaffecttheoutcomeofthevoteonaproposalthatrequirestheaffirmativevoteofamajorityofthevotescastontheproposal.

Who will count the votes?RepresentativesofComputersharewilltabulatethevotesandactasinspectorsofelectionfortheAnnualMeeting.

Where can I find the voting results of the Annual Meeting?ThepreliminaryvotingresultswillbeannouncedattheAnnualMeeting.ThefinalvotingresultswillbetalliedbytheinspectorsofelectionanddisclosedbytheCorporationinaCurrentReportonForm8-KfiledwiththeSECwithinfourbusinessdaysfollowingtheAnnualMeeting.



What is “householding” and how does it affect me?WehaveadoptedaprocedureapprovedbytheSECcalled“householding.”Underthisprocedure,wesendonlyoneAnnualReportandProxyStatementtoeligiblestockholderswhoshareasingleaddress,unlesswehavereceivedinstructionstothecontraryfromanystockholderatthataddress.Thispracticeisdesignedtoreduceourprintingandpostagecosts.Stockholderswhoparticipateinhouseholdingwillcontinuetoreceiveseparateproxycards.Wedonotusehouseholdingforanyotherstockholdermailings,suchasdividendchecks,Forms1099oraccountstatements.

Ifyouareeligibleforhouseholding,butreceivedmultiplecopiesoftheAnnualReportandProxyStatementandprefertoreceiveonlyasinglecopyofeachofthesedocumentsforyourhousehold,pleasecontactComputershare,ShareholderRelations,P.O.Box505000,Louisville,KY40233-5000,orcall1-877-498-8861.IfyouarearegisteredstockholderresidingatanaddresswithotherregisteredstockholdersandwishtoreceiveaseparateAnnualReportorProxyStatementatthistimeorinthefuture,wewillprovideyouwithaseparatecopy.Toobtainthiscopy,pleasecontactComputershareasindicatedabove.Ifyouownsharesthroughabroker,bank,orothernominee,youshouldcontactthenomineeconcerninghouseholdingprocedures.

Can I receive a copy of the Annual Report?Yes.WewillprovideacopyofourAnnualReportwithoutcharge,uponwrittenrequest,toanyregisteredorbeneficialownerofcommonstockentitledtovoteattheAnnualMeeting.RequestsshouldbemadeinwritingaddressedtoInvestorRelations,LockheedMartinCorporation,6801RockledgeDrive,Bethesda,MD20817,bycallingLockheedMartinStockholderDirectat1-800-568-9758,orbyaccessingtheCorporation’swebsiteatwww.lockheedmartin.com/investor.

Can I view the Proxy Statement and Annual Report on the Internet?Yes.TheProxyStatementandAnnualReportareavailableontheInternetatwww.edocumentview.com/LMT.Subjecttothe“householding”proceduresabove,allstockholderswillreceivepapercopiesoftheProxyStatement,proxycardandAnnualReportbymailunlessthestockholderhasconsentedtoelectronicdeliveryorisanemployeewithsharesallocatedinanemployeebenefitplan.TheSECalsomaintainsawebsiteatwww.sec.govthatcontainsreports,proxystatements,andotherinformationregardingLockheedMartin.

Can I choose to receive the Proxy Statement and Annual Report on the Internet instead of receiving them by mail?Yes.Ifyouarearegisteredstockholder,youcanelecttoreceivefutureAnnualMeetingmaterials,includingAnnualReportsandProxyStatements,ontheInternetonlyandnotreceivecopiesinthemailbyvisitingShareholderServicesatwww.lockheedmartin.com/investorandcompletingtheonlineconsentform.YourrequestforelectronictransmissionwillremainineffectforallfutureAnnualReportsandProxyStatements,unlesswithdrawn.Withdrawalproceduresalsoareavailableonthiswebsite.Ifyouareabeneficialowner,contactyourbroker,bankorothernominee.

MostactiveemployeeswhoparticipateintheCorporation’s401(k)anddefinedcontributionplanswillreceiveanemailnotificationannouncingInternetavailabilityoftheProxyMaterials.Apapercopywillnotbeprovidedunlessrequestedbytheemployeefollowingtheinstructionintheemailnotification.

Who pays the cost of this proxy solicitation?TheCorporationpaysthecostofsolicitingproxiesonbehalfoftheBoardfortheAnnualMeeting.WemaysolicitproxiesbyInternet,bytelephone,bymailorinperson.Wemaymakearrangementswithbrokeragehousesandothercustodians,nomineesandfiduciariestosendProxyMaterialstobeneficialownersonourbehalf.Wereimbursethemfortheirreasonableexpenses.WehaveretainedMorrowSodaliLLC,470WestAvenue,Stamford,CT06902toaidinthesolicitationofproxiesandtoverifyrelatedrecordsforafeeof$45,000,plusexpenses.TotheextentnecessarytoensuresufficientrepresentationattheAnnualMeeting,wemayrequestthereturnofproxiesbymail,expressdelivery,courier,telephone,Internetorothermeans.Stockholdersarerequestedtoreturntheirproxieswithoutdelay.


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www.lockheedmartin.com/investor

www.lockheedmartin.com/investor

How do I submit a proposal or nomination for the Annual Meeting of Stockholders in 2022?AddresstoSubmitaStockholderProposal:Anystockholderwhowishestosubmitaproposalornominateadirectorforconsiderationatthe2022AnnualMeetingmustsendtheirproposaltoLockheedMartinCorporation,Attention:SeniorVicePresident,GeneralCounselandCorporateSecretary,6801RockledgeDrive,Bethesda,MD20817.

DeadlineandSubmissionRequirementsforStockholderProposals:ThereareseparaterequirementsforstockholderproposalsunderSECRule14a-8andproposalsunderourproxyaccessbylawprovisionasstatedbelow.AcopyofourBylawscanbefoundatwww.lockheedmartin.com/corporate-governance.

TypeofProposal Deadline SubmissionRequirements

StockholderProposaltobeincludedinourproxystatementandproxycard

November12,2021 MustcomplywithapplicableSECRules(includingSECRule14a-8);seealsoStaffLegalBulletin14,whichmaybefoundatwww.sec.gov

ProxyAccessNominee-stockholdernominationofdirectortobeincludedinourproxystatementandproxycard

MustbereceivedbetweenOctober13,2021andNovember12,2021

MustprovidetheinformationrequiredunderourBylaws,includingSection1.11

StockholderProposalorDirectorNomineenotintendedtobeincludedinourproxystatementandproxycard

MustbereceivedbetweenOctober13,2021andNovember12,2021

MustprovidetheinformationrequiredunderourBylaws,includingSection1.10

How can I contact the Corporation’s non-management directors?StockholdersandallinterestedpartiesmaycommunicatewiththeindependentLeadDirectororwiththenon-managementdirectorsasagroup.IfyouwishtoraiseaquestionorconcerntotheindependentLeadDirectororthenon-managementdirectorsasagroup,youmaydosobywritingtotheindependentLeadDirectorbyemailatLead.Director@lmco.com.YoualsomaywritetotheindependentLeadDirectororNon-ManagementDirectors,c/oSeniorVicePresident,GeneralCounselandCorporateSecretary,LockheedMartinCorporation,6801RockledgeDrive,Bethesda,MD20817.

OurSeniorVicePresident,GeneralCounselandCorporateSecretaryorherdelegatereviewsallcorrespondencesenttotheBoard.TheBoardhasauthorizedourSeniorVicePresident,GeneralCounselandCorporateSecretaryorherdelegatetorespondtocorrespondenceregardingroutinestockholdermattersandservices(e.g.,stocktransfers,dividends,etc.).Correspondencefromstockholdersrelatingtoaccounting,internalcontrolsorauditingmattersarebroughttotheattentionoftheAuditCommittee.AllothercorrespondenceisforwardedtotheindependentLeadDirectorwhodetermineswhetherdistributiontoaBoardcommitteeortothefullBoardforreviewisappropriate.Anydirectormay,atanytime,reviewalogofallcorrespondenceaddressedtotheBoardandrequestcopiesofsuchcorrespondence.

Can I find additional information on the Corporations' website?Yes.AlthoughtheinformationcontainedonourwebsiteisnotpartofthisProxyStatement,youwillfindinformationabouttheCorporationandourcorporategovernancepracticesatwww.lockheedmartin.com/corporate-governance.OurwebsitecontainsinformationaboutourBoard,Boardcommittees,Charter,Bylaws,CodeofConduct,GovernanceGuidelinesandinformationaboutinsidertransactions.Stockholdersmayobtain,withoutcharge,hardcopiesoftheabovedocumentsbywritingtoInvestorRelations,LockheedMartinCorporation,6801RockledgeDrive,Bethesda,MD20817.

Can I find additional information about the stockholder proponents?Yes.AsrequiredbySECregulations,uponreceivinganoralorwrittenrequestfromastockholdertotheCorporateSecretary,LockheedMartinCorporation,6801RockledgeDrive,Bethesda,MD20817or(301)897-6000,wewillprovidetheaddressandreportedholdingsofourcommonstockofthesponsorsofthestockholdersproposalsincludedwithinthisProxyStatement.



Additional Information and Other MattersAppendix A: Definition of Non-GAAP (Generally Accepted Accounting Principles) Measures ThisProxyStatementcontainsNon-GAAPfinancialmeasures(asdefinedbySECRegulationG).WhilewebelievethattheseNon-GAAPfinancialmeasuresmaybeusefulinevaluatingLockheedMartin,thisinformationshouldbeconsideredsupplementalandisnotasubstituteforfinancialinformationpreparedinaccordancewithGAAP.Inaddition,ourdefinitionsforNon-GAAPmeasuresmaydifferfromsimilarlytitledmeasuresusedbyothercompaniesoranalysts.

Segment Operating ProfitSegmentOperatingProfitrepresentsoperatingprofitfromourbusinesssegmentsbeforeunallocatedincomeandexpense.Thismeasureisusedbyourseniormanagementinevaluatingtheperformanceofourbusinesssegments.Thecaption“TotalUnallocatedItems”reconcilesSegmentOperatingProfittoConsolidatedOperatingProfit.WeuseSegmentOperatingProfitasaperformancegoalintheannualincentiveplan.

2020

Profit

($M) ($)

SegmentOperatingProfit(Non-GAAP) 7,152

TotalUnallocatedItems 1,492

ConsolidatedOperatingProfit(GAAP) 8,644

Return on Invested Capital (ROIC)ROICisdefinedasnetearningsplusafter-taxinterestexpensedividedbyaverageinvestedcapital(totalequityplusdebt)afteradjustingtotalequitybyaddingbackadjustmentsrelatedtotheCorporation’spost-retirementbenefitplans.WeuseROICasaperformancemeasureforLTIPandPSUs.

ROIC Calculation ($M)Three-Year 2018–2020

NetEarnings(a) $ 6,036

InterestExpense(multipliedby79%)(a)(b) 504

Return $ 6,540

AverageDebt(c)(d) $ 13,463

AverageEquity(d)(e) 2,528

AverageBenefitPlanAdjustments(d)(f) 12,349

AverageInvestedCapital $ 28,340

ROIC 23.1%

(a) Three-year2018-2020valuesforNetEarnings,InterestExpenseandanyReturnrelatedadjustmentsreflectaveragevaluesovertheperiod.(b) Representsafter-taxinterestexpenseutilizingthefederalstatutoryrateof21percentin2018-2020.Interestexpenseisaddedbacktonetearningsasit

representsthereturntodebtholders.Debtisincludedasacomponentofaverageinvestedcapital.(c) Debtconsistsoflong-termdebt,includingcurrentmaturities,andshort-termborrowings(ifany).(d) Thethree-yearaveragesarecalculatedusingthirteenquarterpointbalancesatthestartoftheplanperformanceperiodandattheendofeachquarterfor

eachofthethree-yearsintheperformanceperiod.(e) Equityincludesnon-cashadjustments,primarilytorecognizethefunded/unfundedstatusoftheCorporation’sbenefitplans.(f) AverageBenefitPlanAdjustmentsreflectthecumulativevalueofentriesidentifiedintheCorporation’sConsolidatedStatementsofEquityaswellas

adjustedtonormalizeforthe$2,396MbenefitassociatedwiththeadoptionofAccountingStandardsUpdateNo.2018-02.

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Performance CashPerformanceCashrepresentstheCorporation’sCashfromOperationsadjustedforitemsasdescribedinthePSUandLTIPawardagreements.Forthe2018-2020performancecycleawardagreements,CashfromOperationswasadjustedfortheitemsinthetablebelowtocalculatePerformanceCash.

2018-2020

Cash Flow ($M) ($)

CashfromOperations(GAAP) 18,632

PensionFundingAdjustment

ActualPensionFunding 7,483

PlannedPensionFunding 5,226

Delta 2,257

AdjustmentforUnplannedTaxPayments/(Benefits)onDivestitures 31

AdjustmentforTaxPayments/(Benefits)onAdditionalPensionContributions (28)

NetAdjustingItems 2,260

PerformanceCash(Non-GAAP) 20,892

Additional Information and Other Matters


Disclosure Regarding Forward-Looking StatementsThisProxyStatementcontainsstatementsthat,totheextenttheyarenotrecitationsofhistoricalfact,constituteforward-lookingstatementswithinthemeaningofthefederalsecuritieslaws,andarebasedonLockheedMartin’scurrentexpectationsandassumptions.Thewords“believe,”“estimate,”“anticipate,”“project,”“intend,”“expect,”“plan,”“outlook,”“scheduled,”“forecast”andsimilarexpressionsareintendedtoidentifyforward-lookingstatements.Thesestatementsarenotguaranteesoffutureperformanceandaresubjecttorisksanduncertainties.Actualresultsmaydiffermateriallyduetofactorssuchas:

• theimpactofCOVID-19orfuturepandemicsorepidemicsonourbusiness,includingthepotentialforfacilityclosuresorworkstoppages,supplychaindisruptions,programdelays,ourabilitytorecoverourcostsundercontracts,andchanginggovernmentfundingandacquisitionprioritiesandpaymentpoliciesandregulations;

• theCorporation’srelianceoncontractswiththeU.S.Government,whichareconditionedupontheavailabilityoffundingandcanbeterminatedbytheU.S.Governmentforconvenience,andtheCorporation’sabilitytonegotiatefavorablecontractterms;

• budgetuncertainty,affordabilityinitiativesortheriskoffuturebudgetcuts;

• risksrelatedtothedevelopment,production,sustainment,performance,schedule,costandrequirementsofcomplexandtechnologicallyadvancedprogramsincludingtheCorporation’slargest,theF-35program;

• plannedproductionratesforsignificantprograms;compliancewithstringentperformanceandreliabilitystandards;materialsavailability;

• theperformanceandfinancialviabilityofkeysuppliers,teammates,jointventures,jointventurepartners,subcontractorsandcustomers;

• economic,industry,businessandpoliticalconditionsincludingtheireffectsongovernmentalpolicyandgovernmentactionsthatdisruptoursupplychainorpreventthesaleordeliveryofourproducts(suchasdelaysinobtainingCongressionalapprovalsforexportsrequiringCongressionalnotificationandexportlicensedelaysduetoCOVID-19);

• tradepoliciesorsanctions(includingpotentialChinesesanctionsonusoroursuppliers,teammatesorpartners;U.S.GovernmentsanctionsonTurkeyanditsremovalfromtheF-35programandpotentialU.S.GovernmentactionstorestrictsalestotheKingdomofSaudiArabiaandtheUnitedArabEmirates);

• theCorporation'ssuccessexpandingintoanddoingbusinessinadjacentmarketsandinternationallyandthedifferingrisksposedbyinternationalsales;

• changesinforeignnationalpriorities,andforeigngovernmentbudgets;

• thecompetitiveenvironmentfortheCorporation’sproductsandservices,includingincreasedpricingpressures,aggressivepricingintheabsenceofcostrealismevaluationcriteria,competitionfromoutsidetheaerospaceanddefenseindustry,andbidprotests;

• thetimingandcustomeracceptanceofproductdeliveries;• theCorporation’sabilitytocontinuetoinnovateanddevelopnewproductsandtoattractandretainkeypersonnelandtransferknowledgetonewpersonnel;theimpactofworkstoppagesorotherlabordisruptions;

• theimpactofcyberorothersecuritythreatsorotherdisruptionstotheCorporation’sbusinesses;

• theCorporation’sabilitytoimplementandcontinueandthetimingandimpactofcapitalizationchangessuchassharerepurchasesanddividendpayments;

• theCorporation’sabilitytorecovercostsunderU.S.Governmentcontractsandchangesincontractmix;

• theaccuracyoftheCorporation’sestimatesandprojectionsandthepotentialimpactofchangesinU.S.orforeigntaxlaws;

• timingandestimatesregardingpensionfundingandmovementsininterestratesandotherchangesthatmayaffectpensionplanassumptions,stockholders'equity,theleveloftheFAS/CASadjustmentandactualreturnsonpensionplanassets;

• thesuccessfuloperationofjointventuresthatwedonotcontrolandourabilitytorecoverourinvestments;

• realizingtheanticipatedbenefitsofacquisitionsordivestitures,jointventures,teamingarrangementsorinternalreorganizations;

• risksrelatedtoourpreviouslyannouncedacquisitionofAerojetRocketdyne,includingthefailuretoobtain,delaysinobtainingoradverseconditionscontainedinanyrequiredregulatoryorotherapprovalsandourabilitytosuccessfullyandtimelyintegratethebusinessandrealizesynergiesandotherexpectedbenefitsofthetransaction

• theCorporation’seffortstoincreasetheefficiencyofitsoperationsandimprovetheaffordabilityofitsproductsandservices;

• theriskofanimpairmentoftheCorporation'sassets,includingthepotentialimpairmentofgoodwillrecordedasaresultoftheacquisitionoftheSikorskybusiness;

• theavailabilityandadequacyoftheCorporation’sinsuranceandindemnities;

• ourabilitytobenefitfullyfromoradequatelyprotectourintellectualpropertyrights;

• procurementandotherregulationsandpoliciesaffectingourindustry,exportofourproducts,costallowabilityorrecovery,preferredcontracttype,andperformanceandprogresspaymentspolicy,includingareversalormodificationtotheDoD’sincreasetotheprogresspaymentrateinresponsetoCOVID-19;

• theeffectofchangesinaccounting,taxation,orexportlaws,regulations,andpoliciesandtheirinterpretationorapplication;and

• theoutcomeoflegalproceedings,bidprotests,environmentalremediationefforts,audits,governmentinvestigationsorgovernmentallegationsthattheCorporationhasfailedtocomplywithlaw,othercontingenciesandU.S.GovernmentidentificationofdeficienciesintheCorporation’sbusinesssystems.

Theseareonlysomeofthefactorsthatmayaffecttheforward-lookingstatementscontainedinthisProxyStatement.Foradiscussionidentifyingadditionalimportantfactorsthatcouldcauseactualresultstodiffermateriallyfromthoseanticipatedintheforward-lookingstatements,seetheCorporation’sfilingswiththeSECincluding,butnotlimitedto,“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”and“RiskFactors”intheCorporation’sAnnualReportonForm10-KfortheyearendedDec.31,2020andsubsequentquarterlyreportsonForm10-Q.TheCorporation’sfilingsmaybeaccessedthroughtheInvestorRelationspageofitswebsite,www.lockheedmartin.com/investor,orthroughthewebsitemaintainedbytheSECatwww.sec.gov.

TheCorporation’sactualfinancialresultslikelywillbedifferentfromthoseprojectedduetotheinherentnatureofprojections.Giventheseuncertainties,forward-lookingstatementsshouldnotbereliedoninmakinginvestmentdecisions.Theforward-lookingstatementscontainedinthisProxyStatementspeakonlyasofthedateofitsfiling.Exceptwhererequiredbyapplicablelaw,theCorporationexpresslydisclaimsadutytoprovideupdatestoforward-lookingstatementsafterthedateofthisProxyStatementtoreflectsubsequentevents,changedcircumstances,changesinexpectations,ortheestimatesandassumptionsassociatedwiththem.Theforward-lookingstatementsinthisProxyStatementareintendedtobesubjecttothesafeharborprotectionprovidedbythefederalsecuritieslaws.

Additional Information and Other Matters

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Lockheed Martin Corporation6801 Rockledge DriveBethesda, MD 20817www.lockheedmartin.com

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