LMT » Topics » Summary of the 2009 Equity Plan

This excerpt taken from the LMT DEF 14A filed Mar 14, 2008.

Summary of the 2009 Equity Plan

The 2009 Equity Plan continues the equity component of our directors’ compensation program that has been in place since our stockholders approved the predecessor plan in 1999. The purpose of the 2009 Equity Plan is to align the economic interests of the directors with the interests of stockholders by including equity as a component of pay and to attract, motivate and retain experienced and knowledgeable directors. The Board has adopted the 2009 Equity Plan, subject to the approval by our stockholders.

If approved, compensation awarded under the 2009 Equity Plan will constitute approximately 50% of each eligible director’s annual retainer, with the remaining portion payable in cash. The amount of the annual retainer and the designated percentage of the retainer that is subject to equity awards under the 2009 Equity Plan can be changed by the Board from time to time. If the 2009 Equity Plan is approved by stockholders, we will register under the Securities Act of 1933, as amended, 600,000 shares of our common stock for issuance pursuant to awards granted under the 2009 Equity Plan. As of December 31, 2007, 889,651 shares of our common stock remain authorized and available for issuance pursuant to grants under the existing Directors Equity Plan. From the time of adoption of the Directors Equity Plan through December 31, 2007, the Corporation has made or plans to make grants of stock options that account for approximately 110,349 of the 1,000,000 authorized shares originally reserved for the Directors Equity Plan. We have also granted approximately 104,778 units payable in stock or cash upon termination, as elected by the director. In January 2009, the directors received awards under the Directors Equity Plan with respect to another 7,472 stock options and 10,642 stock units. If the 2009 Equity Plan is approved, the only awards that will be made under the existing Directors Equity Plan between April 24, 2008 and December 31, 2008 will be to individuals who first become directors during that period. After December 31, 2008, no further grants will be made under the existing Directors Equity Plan and the shares available for grant under that plan will not be used for new grants. Instead, up to 600,000 shares will be available for grant under the 2009 Equity Plan.


 

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PROPOSALS YOU MAY VOTE ON

 

 

 

If adopted, the 2009 Equity Plan will apply to directors who are not officers or employees of the Corporation or its subsidiaries. Twelve of the directors proposed for election at our 2008 Annual Meeting will be eligible on January 1, 2009 to participate in the 2009 Equity Plan if they are continuing to serve as directors at that time. Mr. Stevens, as Chairman, President and CEO of the Corporation, is not eligible to participate in the 2009 Equity Plan.

Under the 2009 Equity Plan, each eligible director will elect to receive a designated percentage of the value of the annual retainer approved by the Governance Committee of the Board in one of the following ways: (1) 100% in the form of stock units; (2) 50% in stock units and 50% in options to purchase shares of our common stock; or (3) 100% in the form of options to purchase shares of our common stock. The designated percentage initially is authorized to be 50%, but it may be changed by the Board from time to time. The value of a stock unit will be equal to the closing price for our common stock on the date of grant as reported on the composite tape of the NYSE. The value of a stock option will be the fair market value of our stock as determined using the option pricing methodology as applied by the Corporation for purposes of its financial statements at the time of grant and will be based on the closing price for our stock on the date of grant.

The date of grant of the awards will be the second business day after the later of the date that we issue a press release concerning our financial results for the previous year, or the date of our first Board meeting of the year. If either of these two events will occur after February 15, however, then February 15, or the next business after February 15 if February 15 is not a business day, will be the award date. If a director is not a member of the Board on this regular award date, however, then the award date for that director will be the first business day of the month following the month in which the director is elected to the Board. We chose this formulation for the date of grant to be consistent with our policy to wait until two business days after we release earnings and, to the extent possible, use the same date of grant for director equity grants as is used for awards to employees. The equity grants to employees typically are made at our January Board meeting, with a date of grant at least two business days after our earnings release.

 

"Summary of the 2009 Equity Plan" elsewhere:

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