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Lockheed Martin Corporation Supplemental Retirement Plan

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Exhibit 10.1


LOCKHEED MARTIN CORPORATION

SUPPLEMENTAL RETIREMENT PLAN


(Effective January 1, 2005)

ARTICLE I


PURPOSES OF THE PLAN

The purposes of the Lockheed Martin Corporation Supplemental Retirement Plan (the " Plan" ) are: (a) to provide certain employees of Lockheed Martin Corporation and its subsidiaries (the " Company" ) with those benefits that cannot be paid from the Company' s tax-qualified plans because of the limitations on contributions and benefits contained in Internal Revenue Code section 415;

(b) to provide certain key management employees of the Company with those benefits that cannot be paid from the Company' s tax-qualified plans because of other limitations on contributions and benefits contained in the Internal Revenue Code, such as the limitations contained in Code section 401(a)(17); and

(c) to provide certain key management employees of the Company with other supplemental benefits.


The following plans and predecessor plans were amended, restated and merged to form a single Plan, effective July 1, 2004:

1. Supplemental Retirement Benefit Plan of Lockheed Martin Corporation (formerly the Supplemental Retirement Benefit Plan of Lockheed Corporation) 2. Lockheed Martin Corporation Supplemental Excess Retirement Plan (formerly the Martin Marietta Corporation Supplemental Excess Retirement Plan) 3. Lockheed Martin Supplemental Retirement Income Plan (formerly the Martin Marietta Supplemental Retirement Income Plan) 4. Lockheed Martin Tactical Systems Supplemental Executive Retirement Plan (formerly the Loral Supplemental Executive Retirement Plan).

The Plan is amended and restated, effective January 1, 2005, in order to comply with the requirements of Code section 409A. This amendment and restatement of the Plan shall apply only to the portion of a Participant' s benefit that accrued and vested on or after January 1, 2005. The portion of a Participant' s benefit that accrued and vested prior to January 1, 2005 shall be governed by the terms of the Plan in effect on December 31, 2004, attached as Appendix B.


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ARTICLE II


DEFINITIONS

Unless the context indicates otherwise or the term is defined below, all terms shall be defined in accordance with the Lockheed Martin Corporation Retirement Program.


1. ACTUARIAL EQUIVALENT - The Actuarial Equivalent shall mean a benefit which has the equivalent value computed using the interest rate which would be used by the Pension Benefit Guaranty Corporation to determine the present value of an immediate lump sum distribution on termination of a pension plan, as in effect at the end of the seventh month preceding payment of the benefit plus one percent (1%), and the 1983 Group Annuity Mortality Table with sex distinction; provided that for Years beginning on or after January 1, 2011, in no event shall the interest rate plus 1% exceed 7% or be less than 4%.

2. BENEFICIARY - The Beneficiary of a Participant shall be (a) the Participant' s Spouse or (b) if there is no Spouse surviving the Participant, the Participant' s estate.


3. BOARD - The Board of Directors of Lockheed Martin Corporation.


4. CODE - The Internal Revenue Code of 1986, as amended.


5. COMMITTEE - The committee described in Section 1 of Article VIII.


6. COMPANY - Lockheed Martin Corporation and its subsidiaries.

7. ELIGIBLE EMPLOYEE - An employee of the Company who (1) participates in a Qualified Pension Plan and whose benefits thereunder are affected by the limitation on benefits imposed by Section 415 or 401(a)(17) of the Code, or (2) is designated by the Committee as eligible to participate in the Plan; and who satisfies such additional requirements for participation in this Plan as the Committee may from time to time establish. The Lockheed Martin Pension Plans Administration Committee (the " Pension Committee" ) shall interpret the participation requirements established by the Committee for all participants except elected officers subject to Section 16(b) of the Securities and Exchange Act of 1934. Determinations of participation requirements for elected officers shall be made by the Committee.


8. GRANDFATHERED 2004 BENEFIT - The benefit calculated under the terms of the Plan in effect prior to January 1, 2005 (attached as Appendix B), including benefits calculated under the Annexes to such Plan, determined as if the Participant had terminated from employment on December 31, 2005 (or the Participant' s actual termination date, if earlier).


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9. PARTICIPANT - An Eligible Employee who meets the requirements for participation contained in Article III or the Annexes; the term shall include a former employee and survivors/beneficiaries whose benefit has not been fully distributed. A Participant shall cease to be an active Participant upon termination of employment, when he otherwise ceases to be an Eligible Employee, or when he otherwise ceases to meet the requirements for participation as amended from time to time.

10. QUALIFIED PENSION PLAN - A defined benefit plan specified in Appendix A in which the Participant participates.

11. PLAN - The Lockheed Martin Corporation Supplemental Retirement Plan, or any successor plan.


12. YEAR - The calendar year.


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ARTICLE III


EXCESS BENEFIT PROVISIONS

1. Introduction . This Article sets forth the terms of the Plan relating to benefits determined by reference to the limitations imposed by Code section 415 and/or Code section 401(a)(17). This Article amends and restates the provisions relating to those benefits previously contained in the following plans:

(a) the Supplemental Retirement Benefit Plan of Lockheed Martin Corporation (formerly known as the Supplemental Benefit Plan of Lockheed Corporation); (b) the Lockheed Martin Corporation Supplemental Excess Retirement Plan (formerly know as the Martin Marietta Corporation Supplemental Excess Retirement Plan); and

(c) the Lockheed Martin Tactical Systems Supplemental Executive Retirement Plan (formerly known as the Loral Supplemental Executive Retirement Plan).

2. Purpose . Benefits under this Article III supplement the benefits of Eligible Employees to the extent that such benefits cannot be paid from the Company' s tax-qualified defined benefit plans because of the limitations on benefits contained in Code section 415 and/or Code section 401(a)(17). It is intended that the provisions of this Article which relate to the limitations imposed by Code section 415 constitute a separate plan for purposes of Section 3(36) of the Employee Retirement Income Security Act of 1974 (ERISA).

3. Eligibility . An Eligible Employee who is entitled to benefits under a Qualified Pension Plan, and whose retirement income benefits are limited by the provisions of the Qualified Pension Plan (as amended from time to time) relating to the limits under Code section 415 and/or Code section 401(a)(17) shall receive benefits pursuant to this Article III.


4. Amount of Benefit . The benefit that each Participant shall be entitled to receive under the Plan is the amount reasonably determined by the Company to be the difference between the Participant' s actual benefit under the applicable Qualified Pension Plan and the benefits that would have been payable under that Plan if:

(a) the Qualified Pension Plan had determined pensionable earnings on a " mix and match" basis, as defined below; and (b) the Participant' s benefit under the Qualified Pension Plan had not been limited by Code section 415 and/or Code section 401(a)(17).

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If a Participant' s compensation under the Management Incentive Compensation Plan (" MICP" ) is included in pensionable earnings under a Qualified Pension Plan, the Participant' s total pensionable earnings shall be determined on a " mix and match" basis. The Participant' s annual compensation earned under the MICP shall be calculated separately from other annual pensionable earnings. The average of the three (3) highest years of MICP compensation during the last 10 years shall be added to the average of the three (3) highest years of other pensionable earnings during the last 10 years to arrive at total final average pensionable earnings for the applicable period under the Qualified Pension Plan.

Benefits under this Article III are intended to supplement the Participant' s actual benefit under the applicable Qualified Pension Plan as necessary to provide the Participant with the full benefit the Participant would have received under the applicable Qualified Pension Plan on a " mix and match" basis and without regard to the limitations of Code section 415 and Code section 401(a)(17). To prevent duplication of benefits, the full benefit under the applicable Qualified Pension Plan shall be calculated without reduction for Code section 415 and Code section 401(a)(17), then reduced by the benefit payable from the applicable Qualified Pension Plan, and then reduced further by the Grandfathered 2004 Benefit, then further reduced by the benefit payable from other nonqualified pension plans of the Company which corresponds to the benefit payable under the applicable Qualified Pension Plan (including any benefit payable under Annex B of this Plan and excluding any nonqualified plans designed to supplement qualified defined contribution plans). The remaining benefit shall be paid from this Plan pursuant to this Article III. Participants have no right to duplicate benefits with respect to the same period of service, and the Committee may make such adjustments to the benefits under this Plan as the Committee deems necessary to prevent duplication of benefits.


The benefit payable under this Article III shall be payable to the Participant or Beneficiary who is receiving or entitled to receive benefits with respect to the Participant under the Qualified Pension Plan.


If the benefits payable under the Qualified Pension Plan to any Participant are increased following the Participant' s retirement as a result of a general increase in the benefits payable to retired employees under that Plan, no such increase will be made under this Plan.


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ARTICLE IV


SUPPLEMENTAL BENEFITS

In addition to the benefits described in Article III, the Plan also provides benefits to certain key management employees, as set forth in the Annexes. Eligibility for, and the amount of, such benefits is set forth in the applicable Annex. Payment options for such benefits are described in Article V.


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ARTICLE V


PAYMENT OF BENEFITS

1. Vesting . Except as provided in Article VI, and subject to the Company' s right to discontinue the Plan as provided in Article VII, a Participant shall have a non-forfeitable benefit payable under this Plan to the same extent as benefits are vested under the applicable Qualified Pension Plan. As provided in Article VI, if a Participant acquires a right to receive payments under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

2. Form and Timing of Payment .

a. Regular Form . A Participant may elect to receive benefits in any annuity form that is available under the applicable Qualified Pension Plan on the date of the Participant' s election that has been designated by the Senior Vice President, Human Resources as available for election under this Plan, provided (i) the election is filed with the Company in writing no later than the later of (a) December 16, 2005 and (b) the date that is 30 days after the Participant commences participation in the Plan, and (ii) the Participant' s employment has not terminated prior to filing the election. All elections under this Section 2.a. must be made in the form and manner prescribed by the Company. If the Participant has not validly elected any annuity form under this Section 2.a. or a lump sum payment as provided in Section 2.b. of Article V, (i) an unmarried Participant shall be deemed to have elected payment in the form of a monthly annuity for the life of the Participant with no further payments to anyone after his or her death, and (ii) a married Participant shall be deemed to have elected payment in the form of a reduced monthly annuity for the life of the Participant with, after the Participant' s death, a 50% survivor annuity for the life of the Participant' s spouse. Actuarial adjustments shall be based on the factors set forth in the Qualified Pension Plan. Benefits paid in a form described in this Section 2.a. shall commence as soon as administratively practicable following the later of (i) the month in which the Participant terminates employment, or (ii) the month in which the Participant attains age fifty-five (55). Notwithstanding the foregoing sentence, benefits paid in a form described in this Section 2.a. to a Participant who is reasonably determined by the Company to be a " specified employee" within the meaning of Code section 409A(2)(B)(i), shall not commence before six (6) months following the later of (i) the month in which the Participant terminates employment, or (ii) the month in which the Participant attains age fifty-five (55). No interest shall be paid between the date of termination of employment or attainment of age fifty-five (55), as applicable, and the payment date.


b. Lump Sum Option . In lieu of the forms described in Section 2.a. of Article V, a Participant may make a one-time election to receive a full lump sum payment in an amount which is the Actuarial Equivalent of a monthly annuity for the life of the Participant with no further payments to anyone after his or her death, provided the election is filed with the Company in writing no later than December 16, 2005 and the Participant' s employment has not terminated prior to filing the election. For all Participants who elect a lump sum under this


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Section 2.b., the lump sum payment shall be made six (6) months following the later of (i) the month in which the Participant terminates employment, or (ii) the month in which the Participant attains age fifty-five (55). No interest shall be paid between the date of termination of employment or attainment of age fifty-five (55), as applicable, and the payment date. All elections under this Section 2.b. must be made in the form and manner prescribed by the Company. This Section shall not apply to Participants who first become eligible for participation in the Plan after December 16, 2005.

c. Cash-out of Small Benefits . Notwithstanding the above, if the Value of the sum of the benefits payable to a Participant or Beneficiary under this Plan does not exceed $10,000, all such benefits will be paid in a single lump sum payment in full discharge of all liabilities with respect to such benefits. For purposes of this Section, Value shall be determined as of the Participant' s termination of employment or attainment of age fifty-five (55), as applicable, and shall mean the present value of a Participant' s or Beneficiary' s benefits, excluding the Grandfathered 2004 Benefit, based upon the applicable mortality table and applicable interest rate in Code section 417(e)(3)(ii) for the calendar month preceding the Plan Year in which the termination of employment or attainment of age fifty-five (55) occurs. Notwithstanding the foregoing sentence, benefits paid under this Section 2.c. to a Participant who is reasonably determined by the Company to be a " specified employee" within the meaning of Code section 409A(2)(B)(i), shall not commence before six (6) months following the later of (i) the month in which the Participant terminates employment, or (ii) the month in which the Participant attains age fifty-five (55). No interest shall be paid between the date of termination of employment or attainment of age fifty-five (55), as applicable, and the payment date.


d. Payment Upon Death or Disability .


i. Death . No other death benefits are provided under this Plan other than as specified in this Section 2.d.i.


A. Pre-Retirement Survivor Benefit . In the event the Participant dies prior to terminating employment or attaining age 55, a pre-retirement survivor benefit will be payable to the Participant' s surviving spouse (if any) (the " Pre-Retirement Survivor Benefit" and the " Surviving Spouse" ) in the form elected by the Participant under the terms of the Plan. If the Participant' s benefit was payable in a lump sum, the lump sum shall be the Actuarial Equivalent of a monthly annuity payable for the life of the Surviving Spouse with no further payments to anyone after his or her death. The Pre-Retirement Survivor Benefit shall commence as soon as administratively practicable following the later of (i) the month in which the Participant dies, or (ii) the month in which the Participant would have attained age fifty-five (55). No Pre-Retirement Survivor Benefit is payable to anyone other than the Participant' s Surviving Spouse.

B. Death After Termination of Employment or Attainment of Age 55 . If a Participant who is required to wait six (6) months for a lump sum payment (in accordance with Section 2 of Article V) dies after the Participant' s termination of employment or


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attainment of age fifty-five (55), as applicable, but before payment is made, the lump sum payment shall be made to the Participant' s Beneficiary.


ii. Disability . Notwithstanding the provisions of this Article V, the benefit of a Disabled Participant who is eligible for a disability pension from the Lockheed Martin Retirement Income Plan, the KAPL Inc. Pension Plan for Salaried Employees, or the Lockheed Martin Corporation Retirement Income Plan III shall be paid in the form elected by the Participant under the terms of the Plan as soon as administratively practicable following the date the Participant is reasonably determined by the Company to be Disabled. For the purposes of this Section 2.d.ii., the terms " Disabled" or " Disability" shall have the meaning set forth in the Lockheed Martin Retirement Income Plan, the KAPL Inc. Pension Plan for Salaried Employees, or the Lockheed Martin Corporation Retirement Income Plan III, as applicable, to the extent consistent with the requirements of Code section 409A(a)(2)(C).

e. Prospective Change of Payment Elections . Participants may elect to change the form of payment of benefits or further delay the commencement of benefits as provided in this Section 2.e. All elections under this Section 2.e. must be made in the form and manner prescribed by the Company. This Section 2.e. does not apply to Surviving Spouses or Beneficiaries. Subject to the provisions of Section 1 of Article VIII, other changes in the form of benefit, including changes between actuarially equivalent forms of benefit, if any, may be made only as determined by the Senior Vice President, Human Resources, of the Company in accordance with Code section 409A.


i. Form of Payment . A Participant who is deemed to have elected payment in a form described in Section 2.a. of Article V or has validly elected a lump sum payment in accordance with Section 2.b. of Article V may later elect to receive payment in any other annuity form designated by the Senior Vice President, Human Resources, of the Company, provided that such election is made in writing not less than twelve (12) months before the date the payment would have first commenced under the Participant' s prior election. In addition, the first payment under the new election must commence no earlier than sixty (60) months from the date when the payment would have first commenced under the Participant' s prior election. The timing of the payment of any form available under this Section 2.e.i. shall be governed by Section 2.a. of this Article V.


ii. Timing of Payment . Regardless of the form of payment, a Participant may elect to delay payment of his benefit provided such election is made in writing not less than twelve (12) months before the date the payment would have first commenced under the Participant' s prior election. In addition, the first payment under the new election must commence no earlier than sixty (60) months from when the payment would have first commenced under the Participant' s prior election.

3. Deductibility of Payments . Subject to the provisions of Section 1 of Article VIII, in the event that the payment of benefits under Section 2 would prevent the Company from


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claiming an income tax deduction with respect to any portion of the benefits paid, the Committee shall have the right to modify the form and timing of distributions as necessary to maximize the Company' s tax deductions. In the exercise of its discretion to adopt a modified distribution schedule, the Committee shall undertake to have distributions made at such times and in such amounts as most closely approximate the payment method described in Section 2, consistent with the objective of maximum deductibility for the Company. The Committee shall have no authority to reduce a Participant' s accrued benefit under this Plan or to pay aggregate benefits less than the Participant' s accrued benefit in the event that all or a portion thereof would not be deductible by the Company.

4. Change of Law . Notwithstanding anything to the contrary herein, subject to the provisions of Section 1 of Article VIII, if the Committee determines in good faith, based on consultation with counsel, that the federal income tax treatment or legal status of this Plan has or may be adversely affected by a change in the Code, Title I of the Employee Retirement Income Security Act of 1974, or other applicable law or by an administrative or judicial construction thereof, the Committee may direct that the benefits of affected Participants or of all Participants be distributed as soon as practicable after such determination is made, to the extent deemed necessary or advisable by the Committee to cure or mitigate the consequences, or possible consequences of, such change in law or interpretation thereof.


5. Acceleration upon Change in Control . Notwithstanding any other provision of the Plan, the accrued benefit of each Participant shall be one-hundred percent (100%) vested and be distributed in a single lump sum within fifteen (15) calendar days following a " Change in Control."


For purposes of this Plan, a Change in Control shall include and be deemed to occur upon the following events:

(a) A tender offer or exchange offer is consummated for the ownership of securities of the Company representing 25% or more of the combined voting power of the Company' s then outstanding voting securities entitled to vote in the election of directors of the Company.

(b) The Company is merged, combined, consolidated, recapitalized or otherwise reorganized with one or more other entities that are not Subsidiaries and, as a result of the merger, combination, consolidation, recapitalization or other reorganization, less than 75% of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be owned in the aggregate by the stockholders of the Company (directly or indirectly), determined on the basis of record ownership as of the date of determination of holders entitled to vote on the action (or in the absence of a vote, the day immediately prior to the event).

(c)

Any person (as this term is used in Sections 3(a)(9) and 13(d)(3) of the Exchange Act, but excluding any person described in and satisfying the conditions of Rule


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13d-1(b)(1) thereunder), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company' s then outstanding securities entitled to vote in the election of directors of the Company.

(d) At any time within any period of two years after a tender offer, merger, combination, consolidation, recapitalization, or other reorganization or a contested election, or any combination of these events, the " Incumbent Directors" shall cease to constitute at least a majority of the authorized number of members of the Board. For purposes hereof, " Incumbent Directors" shall mean the persons who were members of the Board immediately before the first of these events and the persons who were elected or nominated as their successors or pursuant to increases in the size of the Board by a vote of at least three-fourths of the Board members who were then Board members (or successors or additional members so elected or nominated).

(e) The stockholders of the Company approve a plan of liquidation and dissolution or the sale or transfer of substantially all of the Company' s business and/or assets as an entirety to an entity that is not a Subsidiary.


Notwithstanding the foregoing, no distribution shall be made solely on account of a Change in Control and prior to the benefit commencement date specified in Section 2 of Article V unless the Change in Control is an event qualifying for a distribution of deferred compensation under Section 409A(a)(2)(A)(v) of the Code. This Section 5 shall apply only to a Change in Control of Lockheed Martin Corporation and shall not cause immediate payout of benefits under this Plan in any transaction involving the Company' s sale, liquidation, merger, or other disposition of any subsidiary.

The Committee may cancel or modify this Section 5 at any time prior to a Change in Control. In the event of a Change in Control, this Section 5 shall remain in force and effect, and shall not be subject to cancellation or modification for a period of five years, and any defined term used in Section 5 shall not, for purposes of Section 5, be subject to cancellation or modification during the five year period.


6. Tax Withholding . To the extent required by law, the Company shall withhold from benefit payments hereunder any Federal, state, or local income or payroll taxes required to be withheld and shall furnish the recipient and the applicable government agency or agencies with such reports, statements, or information as may be legally required. No benefit payments shall be made to the Participant until the withholding obligation for taxes under Code sections 3101(a) and 3101(b) has been satisfied with respect to the Participant.


7. Retiree Medical Withholding . A Participant may direct the Company to withhold from the Participant' s benefit payments hereunder all or a portion of the amount that the Participant is required to pay for Company-provided retiree medical coverage.


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8. Reemployment . Subject to the provisions of Section 1 of Article VIII, the retirement benefit otherwise payable hereunder to any Participant who previously retired or otherwise had a Termination of Employment and is subsequently reemployed shall be treated in a manner consistent with the treatment of the benefit under the applicable Qualified Plan.


9. Mistaken Payments . No Participant or Beneficiary shall have any right to any payment made (1) in error, (2) in contravention to the terms of the Plan, the Code, or ERISA, or (3) because the Committee or its delegates were not informed of any death. The Committee shall have full rights under the law and ERISA to recover any such mistaken payment, and the right to recover attorney' s fees and other costs incurred with respect to such recovery. Recovery shall be made from future Plan payments, or by any other available means.


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ARTICLE VI


EXTENT OF PARTICIPANTS' RIGHTS

1. Unfunded Status of Plan . This Plan constitutes a mere contractual promise by the Company to make payments in the future, and each Participant' s rights shall be those of a general, unsecured creditor of the Company. No Participant shall have any beneficial interest in any specific assets that the Company may hold or set aside in connection with this Plan. Notwithstanding the foregoing, to assist the Company in meeting its obligations under this Plan, the Company may set aside assets in a trust or trusts described in Revenue Procedure 92-64, 1992-2 C.B. 422, and the Company may direct that its obligations under this Plan be satisfied by payments out of such trust or trusts. The assets of any such trust will remain subject to the claims of the general creditors of the Company. It is the Company' s intention that the Plan be unfunded for Federal income tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974.


2. Nonalienability of Benefits . A Participant' s rights under this Plan shall not be assignable or transferable and any purported transfer, assignment, pledge or other encumbrance or attachment of any payments o
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