Long-Term Disability Insurance Benefits Under the Lockheed Martin Group Benefits Plan and the Lockheed Martin Operations Support, Inc.

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1 Summary Plan Description Long-Term Disability Insurance Benefits Under the Lockheed Martin Group Benefits Plan and the Lockheed Martin Operations Support, Inc. Benefit Plan Effective January 1, 2014 LMC-ZBR

2 Important The Lockheed Martin Group Benefits Plan and the Lockheed Martin Operations Support, Inc. Benefit Plan (the Plan or the Plans ) include the long-term disability benefits explained in this Summary Plan Description (SPD). The benefit plan described in this SPD is based on the official legal documents. If there is any conflict between this SPD and the official plan document(s), the official plan document(s) will govern. The Company (Lockheed Martin Corporation or Lockheed Martin Operations Support, Inc., as applicable) expects to continue the Plans indefinitely. However, the Company reserves the right to amend, suspend or terminate the Plans, in whole or in part, at any time. The terms of the Plans cannot be modified by written or oral statements to you from human resources (HR) representatives or other personnel. Where conflicts exist, the terms as set forth in the plan documents will govern. The benefits described in this booklet are provided through contracts (or policies) of insurance. In the event there is a discrepancy between this booklet and the contract or policy of insurance, the contract or policy of insurance will govern. i

3 About this Booklet This booklet describes the long-term disability insurance coverage available to certain non-represented employees and certain represented employees under the Lockheed Martin Group Benefits Plan and the Lockheed Martin Operations Support, Inc. Benefit Plan (the Plans ). The Plans also cover other employees and benefits as described in other Summary Plan Descriptions. This booklet includes: Information regarding eligibility for coverage, enrolling for coverage, when coverage begins, and when Proof of Insurability (POI) is required. Details about the available long-term disability insurance coverage and information about filing a claim for benefits, when coverage ends extending coverage after it ends, and conversion rights, if applicable. Important administrative information about the Plan and your rights under the Employee Retirement Income Security Act (ERISA). Definitions for certain terms used in this booklet. The benefits described in this booklet are effective January 1, ii

4 Table of Contents Eligibility... 1 Employee Eligibility... 1 Enrolling for Coverage... 2 Cost of Coverage... 2 When Coverage Begins... 3 Changing Your Elections During the Plan Year... 3 When Proof of Insurability (POI) Is Required... 3 How the Long-Term Disability (LTD) Plan Works... 5 Defining Disability... 5 Benefit Amount... 5 Benefit Waiting Period... 6 Benefit Limitations... 6 Successive Disability Rule... 6 Your LTD Summary of Benefits... 7 Other Benefits... 9 Pre-existing Condition Limitation Work Incentive Benefit Reductions Recovery of Overpayment What Is Not Covered Duration of Long-Term Disability Benefits Situations Affecting Your Coverage When Coverage Ends Converting Your Coverage When it Ends Claims and Appeals Procedures Claims for Eligibility Claims for Benefits No Right to Continued Employment Collective Bargaining Agreements Plan Administration General Information Plan Information Overview Claims Administrators Plan Funding Future of the Plan Your Rights Under ERISA Receive Information about Your Plan and Benefits Prudent Actions by Plan Fiduciaries Enforce Your Rights Assistance with Your Questions Definitions Appendix A Participating business units* Appendix B Participating unions* iii

5 Eligibility Employee Eligibility You may be eligible to participate in the coverage described in this booklet if: You are a regular full-time non-represented salaried employee of a participating Lockheed Martin Corporation business unit (see Appendix A); or You are a regular part-time non-represented salaried employee of a participating Lockheed Martin Corporation business unit (see Appendix A) who is scheduled to work at least 20 hours or more per week; or You are represented by one of the unions listed in Appendix B. The term employee includes only those individuals that the Company classifies on its payroll records as employees. Thus, you are not eligible to participate in the Plan if you are a consultant, independent contractor, leased employee, are paid by a third party employer or otherwise are not classified as an employee by the Company. 1

6 Enrolling for Coverage The enrollment materials you will receive from the Lockheed Martin Employee Service Center (LMESC) include detailed instructions on how to enroll and the resources available to you in the event you have questions. You must enroll in Long-Term Disability insurance if you want coverage. If you do not enroll when you are first eligible and later decide to enroll, you will be required to provide satisfactory Proof of Insurability (POI) before you can be covered. Refer to the When Coverage Begins section for more information on enrollment timeframes. Cost of Coverage You pay the full cost of Long-Term Disability insurance. The cost is automatically deducted on an aftertax basis from your paycheck each pay period. Consequently, your Long-Term Disability insurance benefit is tax-free when you receive it. Your cost is based on your current Annual Base Pay determined as of the later of December 1 of the prior plan year or your date of hire. If you are an eligible part-time employee, the cost of your coverage (and the amount of your benefit) will be determined based on a 30-hour work week. You can determine your cost for Long-Term Disability insurance using information provided in your enrollment materials or by contacting the Lockheed Martin Employee Service Center. 2

7 When Coverage Begins Subject to all plan provisions and proper enrollment, the chart below explains when Long-Term Disability coverage becomes effective. When You Enroll Within 30 days of your initial eligibility date** After 30 days of your first day of work (or the date you become eligible) During an Annual Enrollment period Your Coverage Becomes Effective* When you enroll within 30 days of your first day of work or the date you become an eligible employee, coverage for you becomes effective the day you enroll On the day your Proof of Insurability (POI) is approved by the insurance company On the later of the first day of the following Plan Year or when your POI is approved by the insurance company * If you are not Actively at Work on the day coverage would otherwise begin, coverage becomes effective on the first day that you return to Active Service. ** Your first day of work or the first day you meet the eligibility requirements is considered your initial eligibility date for coverage. Changing Your Elections During the Plan Year If you wish to make a change during the Plan Year, you may do so by visiting the Lockheed Martin Employee Service Center Online (LMESC Online) or by calling the Lockheed Martin Employee Service Center (LMESC). You may enroll in or cancel Long-Term Disability insurance at any time during the Plan Year. If you are enrolling for or increasing coverage amounts, all plan requirements (for example, Proof of Insurability [POI]) will apply. The Long-Term Disability coverage option in effect immediately prior to your request to increase coverage remains unchanged until POI is approved by the LTD Insurance Carrier. When Proof of Insurability (POI) Is Required If you request Long-Term Disability coverage after the 30-day initial enrollment period, you are required to provide POI. POI is also required if you request an increase in your coverage level. POI is not required if you enroll for coverage within 30 days of your initial eligibility. 3

8 How POI Works Proof of Insurability (POI) is the process that the insurance company uses to determine if you are insurable for Long-Term Disability insurance. When POI is required, you must provide a statement of your health history. If you elect an option that requires POI, you will automatically receive a form that must be completed and returned. The necessary form also is available by calling the Lockheed Martin Employee Service Center (LMESC) and speaking directly with a Customer Representative. The insurance company may also ask you for other evidence of good health, such as a medical examination. The POI or other evidence of good health must be acceptable to the insurance company in order for your coverage (or increase in coverage) to take effect. NOTE: You are responsible for any related costs associated with POI, including a medical examination or transfer of medical records. 4

9 How the Long-Term Disability (LTD) Plan Works The LTD plan provides income replacement if you become disabled because of a covered sickness or injury. This coverage includes: Replacement of a percentage of your Annual Base Pay if you become disabled due to a covered sickness or injury. A sickness or injury is covered as long as it does not result from any of the exclusions listed in the What Is Not Covered section. Benefits that begin after you have been disabled for a certain amount of days (subject to all plan provisions). Survivor benefits if you die while receiving benefits. Defining Disability To qualify for Long-Term Disability benefits, you must be considered Disabled. You are Disabled if, because of sickness or injury: You are unable to perform each and every material duty of your regular occupation; and After monthly benefits have been payable for 24 months, you are unable to perform each and every material duty of any occupation for which you may reasonably become qualified based on education, training or experience. Sickness means physical or mental illness and also includes pregnancy. Injury means an accidental loss or bodily harm. The Long-Term Disability Insurance Carrier will determine whether your sickness or injury meets the definition of disability. You may be asked to provide proof of your continuing disability from time to time for example, through a medical examination at your own expense. Benefit Amount The amount of your benefit depends upon the coverage option you choose and your Annual Base Pay, which is determined as of the later of December 1 of the prior plan year or your date of hire. The benefit amount for which you are eligible (and the cost of your coverage) will not change during a plan year, regardless of any salary changes you may experience. However, if the salary change results from a change in employment status between full-time and part-time, your annual base pay (and your benefit amount and cost of coverage) will be predetermined as of the date of the change. See the Your LTD Summary of Benefits table for specific benefit amounts. No change in your Annual Base Pay will be taken into account in determining the amount of your LTD insurance benefit (or the cost of your coverage) if the change occurs: During a benefit waiting period; While you are actively at work between separate periods of disability that are considered one period; or While you are Disabled. 5

10 Benefits are prorated for any period of disability that lasts less than a whole month. Benefit Waiting Period Before Long-Term Disability benefits begin, you must satisfy a Benefit Waiting Period (as noted in the Your LTD Summary of Benefits table). You must be under the care of a physician during this time. The date Long-Term Disability insurance benefits begin depends on specifications noted in the Your LTD Summary of Benefits table. Benefit Limitations The Long-Term Disability insurance company will pay a maximum of 24 monthly benefits in a lifetime for a disability caused or contributed by one of the following mental illnesses or substance abuse: Alcoholism; Anxiety disorders; Delusional (paranoid) disorders; Depressive disorders; Drug addiction or abuse; Eating disorders; Mental illness; or Somotaform disorders (psychosomatic illness). Note: If you are confined in a hospital for more than 14 consecutive days before reaching your lifetime maximum benefit, any disability benefits paid during that confinement will not count against the lifetime maximum benefit. Successive Disability Rule If you return to active service and become Disabled again from the same sickness or injury within the time period specified in the Your LTD Summary of Benefits table, your disability will be considered continuous, and your benefits will begin again without another benefit waiting period. You will be considered to have a separate disability and have to begin a new benefit waiting period if: You become Disabled again from causes unrelated to your first Disability, and you have returned to active service for a certain period of time; or The Disability results from the same sickness or injury but you returned to work for a certain period of time; or The later disability occurs after coverage under this insurance ends. See the Your LTD Summary of Benefits table for specific time periods. 6

11 Your LTD Summary of Benefits Plan Design Structure Benefit Amount Maximum Monthly Earnings Minimum Benefit Maximum Benefit Coverage Option 1: Monthly benefit equal to 50% of your Annual Base Pay, rounded to the nearest dollar (reduced by other income benefits you are eligible to receive) up to a maximum of $25,000 Option 2: Monthly benefit equal to 60% of your Annual Base Pay, rounded to the nearest dollar (reduced by other income benefits you are eligible to receive) up to a maximum of $30,000 $50,000 a month Option 1: $150 per month Option 2: $200 per month Option 1: $25,000 a month offset by any other income benefits Option 2: $30,000 a month offset by any other income benefits Maximum Duration Your Age When the Disability Begins Age 62 or younger Age 63 Age 64 Age 65 Age 66 Age 67 Age 68 Age 69 or older Maximum Duration of Benefits Your 65th birthday or the date the 42nd monthly benefit is payable, if later The date the 36 th monthly benefit is payable. The date the 30th monthly benefit is payable. The date the 24 th monthly benefit is payable. The date the 21st monthly benefit is payable The date the 18th monthly benefit is payable. The date the 15th monthly benefit is payable. The date the 12th monthly benefit is payable. 7

12 Definition of Earnings Coverage Your Annual Base Pay, as of December 1st of the prior plan year, excluding lump sum merit increases, incentive compensation, commissions, night shift bonuses, overtime, other bonuses, and other compensation; or your date of hire. If you are a part-time employee, your Annual Base Pay is based on 30 hours per week. Consequently, the benefit amount for which you are eligible (and the cost of your coverage) will not change during a plan year, regardless of any salary changes you may experience. However, if the salary change results from a change in employment status between full-time and part-time, your Annual Base Pay (and your benefit amount and cost of coverage) will be redetermined as of the date of the change. No change in your Annual Base Pay will be taken into account in determining the amount of your Long-Term Disability insurance benefit (or the cost of your coverage) if the change occurs: During a benefit waiting period; While you are actively at work between separate periods of disability that are considered one period; or While you are Disabled. Elimination/Waiting Period When Payments Begin Benefits are prorated for any period of disability that lasts less than a whole month. Your benefit will be paid to you; survivor benefits will be paid to your eligible survivors. 180 calendar days of disability (beginning with your first day of disability). You must be under the care of a physician during this time. If during this waiting period you return to work in your regular occupation for up to 30 days (up to 90 days if you are covered under a Company shortterm disability policy) and again become Disabled from the same sickness or injury, you do not need to restart your benefit waiting period. Your disability is considered continuous. However, the benefit waiting period will be extended by the number of days you are back at work. After 180 days of disability or the length of the Company salary continuance plan, if applicable. You must also fulfill the Benefit Waiting Period Requirements. 8

13 Successive Disability Rule Survivor Benefit Taxes Proof of Insurability Specified Loss Benefits Coverage Within six months of the date of your return to work, your disability will be considered continuous, and your benefits will begin again without another benefit waiting period. You will be considered to have a separate disability (and have to begin a new benefit waiting period) if: You become Disabled again from causes unrelated to your first disability and you have returned to active service for at least one full day; The disability results from the same sickness or injury but you returned to work for six consecutive months, or more; or The later disability occurs after coverage under this insurance ends. If you die after you have been receiving monthly benefits for at least six months and are receiving benefits at the time of your death, your eligible survivor may receive a survivor benefit. The survivor benefit will equal the last full monthly benefit you received before your death, plus any amount by which that benefit had been reduced because of wage or profit from work performed. This benefit will be paid each month for six months after your death. You pay the full cost of Long-Term Disability insurance. The cost is automatically deducted on an after-tax basis from your paycheck each pay period. Consequently, your Long-Term Disability insurance benefit is tax-free when you receive it. Required if you elect coverage more than 30 days after your initial eligibility date, if you want to increase the amount of coverage you initially elected, or if you drop coverage and re-enroll at a later date. The Long-Term Disability coverage option in effect immediately prior to your request to increase coverage remains unchanged until POI is approved by the insurance carrier. No Other Benefits Rehabilitation Plan Program If you are Disabled, you may participate in a rehabilitation plan as determined by the Long-Term Disability insurance company. The rehabilitation plan may allow for payment of your medical expenses, 9

14 education expenses, accommodation expenses or family care expenses while you participate in the program. A rehabilitation plan is a written agreement between you and the Long-Term Disability insurance company in which the insurance company agrees to provide, arrange or authorize vocational or physical rehabilitation services. You and the Long-Term Disability Insurance Carrier must agree to the terms and conditions of the rehabilitation plan. Cost-of-Living Adjustment After you have received benefit payments for 12 consecutive months, you will receive a three percent annual Cost-of-Living Adjustment (COLA) up to a maximum of 10 annual increases. The COLA increase date is January 1st. This COLA benefit does not apply to the minimum or maximum benefit or to the formula used to determine benefits under the work incentive provision. Pre-existing Condition Limitation The plan will not pay Disability benefits for any period of Disability caused or contributed by or resulting from a pre-existing condition. A pre-existing condition includes any injury or sickness for which you incurred expenses, received medical treatment (including diagnostic measures), took prescribed drugs or medicines or for which a reasonable person would have consulted a Physician. Under the coverage maximums, there are two pre-existing condition limitations depending on your maximum covered benefit amount: Coverage option Pre-existing condition limitation if your Annual Base Pay is $200,000 or less 50% For covered monthly benefit amounts up to $8,333, the Disability will not be covered if it begins during the first 12 months after your coverage (or increase in coverage) becomes effective and is caused or contributed by or results from a pre-existing condition you had during the three months before your coverage (or increase in coverage) became effective. 60% For covered monthly benefit amounts up to $10,000, the Disability will not be covered if it begins during the first 12 months after your coverage (or increase in coverage) becomes effective and is caused or contributed by or results from a pre-existing condition you had during the three months before your coverage (or increase in coverage) became effective. Pre-existing condition limitation if your Annual Base Pay is between $200,001 and $600,000 For covered monthly benefit amounts from $8,334 to $25,000, the Disability will not be covered if it begins during the first 12 months after your coverage (or increase in coverage) becomes effective and is caused or contributed by or results from a preexisting condition you had during the 12 months before your coverage (or increase in coverage) became effective. For covered monthly benefit amounts from $10,001 to $30,000, the Disability will not be covered if it begins during the first 12 months after your coverage (or increase in coverage) becomes effective and is caused or contributed by or results from a pre-existing condition you had during the 12 months before your coverage (or increase in coverage) became effective. 10

15 Work Incentive You may be eligible for a benefit under this provision if, while you are receiving Disability benefits and under the care of a Physician, you return to your regular job on a part-time basis or to any other occupation on a full-time or part-time basis. The amount of your benefit under this provision is determined using your Indexed Annual Base Pay. For the first 12 months after you return to work After 12 months Your benefit under the work incentive provision will equal Either 50% or 60% of your Annual Base Pay (reduced by any other income benefits* you receive). If the sum of your monthly Disability benefit, current Earnings** and any other income benefits* exceeds 100% of your monthly Indexed Annual Base Pay for any month during this period, your benefit will be reduced by the excess amount. Either 50% or 60% of your Annual Base Pay (reduced by both any other income benefits* you receive and by 50% of current Earnings** you receive during any month you return to work). If for any month the sum of your monthly Disability benefit, current Earnings** and any other income benefits* exceeds 80% of your monthly Indexed Annual Base Pay, your benefit will be reduced by the excess amount. * Any benefits listed under Benefit Reductions that you receive on your own behalf or on behalf of your dependents or that your dependents receive because of your entitlement to other income benefits. ** Any wage or salary for work performed while Disability benefits are payable. If you are working regularly for another employer when Disability begins, current Earnings will include any increase in the amount you earned from this work during the period for which Disability benefits are payable. Benefit Reductions The amount of your benefit payments from the Long-Term Disability insurance company will be reduced by any other income benefits that you receive on your own behalf or on behalf of your dependents or that your dependents receive because of your entitlement to other income benefits. Other Income Benefits include: Any amounts you or your dependents, if applicable, receive (or are assumed to receive*) under: The Canada and Quebec Pension Plans; The Railroad Retirement Act; Any local, state, provincial or federal government disability or retirement plan (except military retirement) or law; Any sick leave or salary continuation plan; 11

16 Any disability benefits received from the Veterans' Administration for a disability for which you are eligible to receive a benefit under your disability plan; or Any workers' compensation, occupational disease, unemployment compensation law or similar state or federal law, including all permanent as well as temporary disability benefits. This includes any damages, compromises or settlement paid in place of such benefits, whether or not liability is admitted. Any Social Security disability or retirement benefits you or any third party receive (or are assumed to receive) either on your behalf or for your dependents; or, if applicable, which your dependents receive (or are assumed to receive) because of your entitlement to such benefits. Any retirement plan benefits funded by your Employer. Retirement plan means any defined benefit or defined contribution plan sponsored or funded by your Employer. A retirement plan does not include the following: An individual deferred compensation agreement; A profit sharing or any other retirement or savings plan maintained in addition to a defined benefit or other defined contribution pension plan; or Any Employee savings plan including a thrift, stock option or stock bonus plan, individual retirement account or 40l(k) plan. Any proceeds payable under any franchise or group insurance or similar plan. If there is other insurance that applies to the same claim for disability, and contains the same or similar provision for reduction because of other insurance, we will pay our pro rata share of the total claim. Pro rata share means the proportion of the total benefit that the amount payable under one policy, without other insurance, bears to the total benefits under all such policies. Any wage or salary for work performed, excluding Special Recognition Awards (SRA), Spot Awards and MICP Awards. If Work Incentive Benefits apply to you, we will only reduce your Disability Benefits to the extent provided under your Work Incentive Benefit. The Long-Term Disability Insurance Carrier will assume that you are receiving the other income benefits for which you and your dependents are eligible and will automatically reduce your benefits by those amounts. However, if you provide proof that you have applied for full benefits and that payments were denied, benefits will not be reduced for that other benefit. If payments were denied solely because the Disability was not expected to last at least 12 consecutive months, the Long-Term Disability Insurance Carrier will assume that you have begun receiving such benefits after your Disability was continued for 12 consecutive months (unless you provide proof that you re-applied and were again denied payments). If you receive any other income benefits as a lump sum, your benefit will be adjusted as if the lump sum was paid in monthly amounts pro-rated over the period for which the sum is given. If no time span is specified, then the lump sum will be pro-rated monthly over a five-year period. No matter how much your benefit may be reduced by other income benefits, you will always receive the minimum Disability benefit. Recovery of Overpayment If you are paid more than your monthly benefit (including any retroactive lump sum payment), the insurance company has the right to recover the overpayment either by: Collecting the amount from you in a lump sum; or Withholding the amount from future payments. 12

17 What Is Not Covered No Long-Term Disability benefits will be paid for: Any disability that results, directly or indirectly, from: Attempted suicide, or injuries intentionally self-inflicted while sane or insane; Active participation in terrorism or a riot; or Commission of a felony; Revocation, restriction, or non-renewal of your license, permit, or certification necessary to perform the duties of your occupation unless solely due to sickness or injury otherwise covered by the plan; A disability that is caused, or contributed to, by a pre-existing condition; Any disability for which you are not under the care of a legally qualified physician; Any disability while you are incarcerated for any reason in a penal or correctional institution; or Any disability while you are serving on fulltime active duty in the armed services. Duration of Long-Term Disability Benefits Your Long-Term Disability benefits will end on the earliest of the following: The date the Long-Term Disability Insurance Carrier determines you are no longer Disabled; The date you return to active service; The date the maximum benefit period ends; The date you earn more than 80% of your annual base pay when you return to work; or The date you die. As long as you remain Disabled, you may receive benefits up to the maximum duration shown in the Your LTD Summary of Benefits table. Survivor Benefit If you die after you have been receiving monthly benefits for at least six months and are receiving benefits at the time of your death, your eligible survivor may receive a survivor benefit. The survivor benefit will equal the last full monthly benefit you received before your death, plus any amount by which that benefit had been reduced because of wage or profit from work performed. This benefit will be paid each month for six months after your death. Survivor benefits will be paid to your lawful spouse. If there is no spouse, benefits will be paid in equal shares to your surviving, unmarried Children under age 26 who are dependent upon you for support. If there are no spouse and no Children, benefits will be paid to your estate. 13

18 Situations Affecting Your Coverage The following chart summarizes how your Plan coverage may be affected in certain situations. If you have any questions about the information in the chart, please contact the Lockheed Martin Employee Service Center (LMESC). Situation If you are on medical leave If you are on personal leave If you are on military leave Impact If you are on unpaid family medical leave, you may continue your coverage for up to 12 weeks if you agree to pay any required contributions. If you choose to stop participating, your coverage may be reinstated only if you return to Active Service within 12 weeks from the date your leave began. Reinstated coverage is effective on the date your return to Active Service. If you did not satisfy the pre-existing condition limitation when your leave commenced, you will receive credit for any time that was satisfied before your leave. When you return to work at the end of your leave, you may resume participating at the same cost if you return during the same Plan Year. If you return to work during a different Plan Year, you must pay the cost in effect for that Plan Year for the coverage level you choose. POI is not required when you resume your participation at the same salary level as when you left. If you are on a personal leave of absence, your coverage continues for up to 31 days. Your cost for coverage will be the same as the active employee cost for coverage, subject to any applicable changes. If your personal leave extends beyond 31 days, you may be eligible to convert coverage after it ends see Converting Your Coverage. If you are on a military leave of absence, your coverage, as applicable, may continue if you agree to pay any required contributions. Your cost will be the same as the active employee cost for coverage, subject to any applicable changes. If your military leave extends beyond the period of coverage, you may have the opportunity to continue coverage see Converting Your Coverage. 14

19 Situation If you are on furlough Impact If you are on a furlough, your coverage may continue for up to 90 days. Your cost will be the same as the active employee cost for coverage, subject to any applicable changes, and will be collected from your pay after you return to work. If you do not return to work by the end of your furlough, your benefits will end but you may have the opportunity to continue coverage. You may be eligible to convert coverage after it ends see Converting Your Coverage. 15

20 When Coverage Ends Your Long-Term Disability coverage ends when: You are no longer an eligible employee. You stop making required contributions (if applicable). You decline coverage. You leave employment at the Company. The group policy is terminated. You retire. You die. The Plan is terminated or amended such that you do not meet the requirement for coverage under the Plan. Converting Your Coverage When it Ends You may be eligible for conversion coverage if you have been insured for disability benefits for at least 12 consecutive months under this plan and are actively at work. You will receive general information from the Lockheed Martin Employee Service Center (LMESC). You must apply for conversion insurance within 62 days after your insurance under this plan ends. If you do not do so within the time frame specified, you will forfeit your right to convert. The conversion plan s benefits will be those offered by the insurance company at the time you apply. The premium will be based on the rates in effect for conversion plans at that time. Conversion insurance is not available if: You are no longer eligible for this plan but are still employed by the Company; You are retired; You are age 70 or older; You are not in active service because you are disabled; or The Plan is terminated for any reason. If you have questions, call the Lockheed Martin Employee Service Center (LMESC). 16

21 Claims and Appeals Procedures You or your authorized representative may file a claim for eligibility and/or a claim for benefits. An authorized representative is any person (such as a spouse, parent, medical provider or executor of your estate or attorney) whom you authorize in writing to act on your behalf. The Plan will also recognize representatives authorized through a court order giving a person authority to submit claims on your behalf. Claims for Eligibility The Plan Administrator is generally responsible for determining whether someone is eligible for the Plan and for deciding appeals of denied claims involving questions of eligibility to participate in the Plan or changes in coverage elections (these will be referred to as Eligibility Claims). In carrying out these functions, the Plan Administrator has full discretionary authority to interpret and construe the terms of the Plan, to decide questions regarding eligibility for the Plan and to make any related findings of fact. The Plan Administrator can act through its delegate. The decision of the Plan Administrator shall be final and binding to the full extent permitted by law. Where the claim involves eligibility to participate, you should contact the Lockheed Martin Employee Service Center (LMESC) at: Lockheed Martin Employee Service Center (LMESC) P.O. Box Dallas, TX Toll-free calls in the U.S International callers Hearing impaired Claims for Benefits The LTD Insurance Carrier is responsible for determining whether benefits are payable under the Plan (including, for example, determining whether a claimant is Disabled), determining Proof of Insurability matters, determining the amount of benefits payable, if any, and deciding appeals of denied claims for benefits (these will be referred to as Benefit Claims. In carrying out these functions, including conducting a full and fair review of denied claims, the LTD Insurance Carrier has the full discretionary authority to interpret and construe the terms of the Plan and to decide questions related to the payment of benefits. The decision of the LTD Insurance Carrier shall be final and binding to the full extent permitted by law. You or your authorized representative should file a written claim for benefits with the LTD Insurance Carrier. To ensure timely processing of your claim, you should contact the LTD Insurance Carrier to confirm the claim filing address. 17

22 Time Frame for Claim Reviews The Administrator (that is, the insurance carrier or Plan Administrator, as applicable) has 45 days from the date your claim is received to make a decision on the claim. The Administrator may require more time to review your claim, if necessary, due to circumstances beyond its control. If this should happen, the Administrator must notify you in writing before the end of the original period that its review period has been extended for up to two additional periods of 30 days each. If this extension is made because you must furnish additional information, this extension will begin when the additional information is received. You have up to 45 days to furnish the requested information. Claim Denials If your claim is denied in whole or in part, you will be notified in writing within the time periods outlined above for the applicable type of claim. The notice will state the following: Specific reasons for the denial. Plan provisions that support the denial. A description of any additional information needed to review your claim request. The specific rule, guideline, protocol or other similar criterion or a statement that one was relied on in making the benefit claim denial and that a copy will be provided free of charge upon request. A statement that such a rule, guideline, protocol, or other similar criteria was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or similar criterion will be provided free of charge upon request. If the denial is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant s medical circumstances or a statement that such explanation will be provided free of charge upon request. Instructions for requesting a review of your claim denial and the applicable time limits, including information regarding your right to bring a civil lawsuit under Section 502(a) of ERISA following a benefit claim denial on review. Appeals Process If your claim is denied in whole or in part, you or your authorized representative can request a review of (or appeal) the denied claim within the time limits set forth in this section for the applicable type of claim. The review will take into account all comments, documents, records and other information you submit relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. If you wish, you or your authorized representative may review the appropriate Plan documents and submit written information supporting your claim to the LTD Insurance Carrier or Plan Administrator. You will be provided, upon request and free of charge, reasonable access to and copies of all documents, records or other information relevant to your claim for benefits. You will be able to review your file and present information as part of the review. 18

23 Your appeal will be reviewed and the decision made by someone who did not make the initial denial decision and was not a subordinate of someone who made the initial denial decision, and the review will not give deference to the initial decision. In deciding an appeal of any adverse benefit determination based on a medical judgment, a health care professional with appropriate training and experience in the field of medicine involved will be consulted (such health care professional will not be someone who was consulted in connection with the original claim denial or the subordinate of such an individual). Any medical or vocational experts whose advice was obtained on behalf of the plan in connection with an adverse benefit determination will be identified, without regard to whether the advice was relied on in making the initial benefit determination. Time Limits for Appeals You or your authorized representative has 180 days from the date you receive the claims denial to make a written request for review of the denied claim (or an appeal) to the insurance carrier or Plan Administrator (where the claim involves Participation Matters ). If you do not make this request within that time, you will have waived your right to appeal. The Administrator (the LTD Insurance Carrier or, where the claim involves eligibility or participation, the Plan Administrator) has 45 days from the date your request is received to review your claim and notify you of a decision. Under special circumstances, the Administrator may require more time to review your claim. If this should happen, the Administrator must notify you in writing before the end of the original period that the review period has been extended for an additional 45 days. Once the review is complete, the Administrator must notify you, in writing, of the results of the review and indicate the Plan provisions upon which the decision is based. Decision on Appeal If your claim is approved, you will receive the appropriate benefit from the Plan. If your claim is denied on appeal, in whole or in part, you will receive a written notice from the LTD Insurance Carrier or Plan Administrator within the review period outlined above for the applicable type of claim. The notice will include the following: The specific reasons for the decision. A reference to the specific Plan provisions upon which the decision is based. A statement that you are entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to your claim for benefits. A statement describing any voluntary appeal procedures offered by the Plan and your right to obtain these procedures. The specific rule, guideline, protocol or other similar criterion or a statement that one was relied on in making the benefit claim denial and that a copy will be provided free of charge upon request. A statement that such a rule, guideline, protocol, or other similar criteria was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or similar criterion will be provided free of charge upon request. If the adverse decision is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant s medical circumstances or a statement that such explanation will be provided free of charge. Where required, a statement that there may be other voluntary alternative dispute resolution options. The written denial on appeal will include a statement regarding your right to bring a timely civil lawsuit under Section 502(a) of ERISA following a benefit claim denial on appeal. 19

24 Claims and Appeals Time Limits At a Glance The time limits applicable to claims and appeals are summarized in the chart below. Event How long does the Plan have to make an initial claim decision? How long does a participant have to appeal the decision? How long does the Plan have to determine the appeal? Disability Claims No later than 45 days after receipt of the claim (may be extended an additional 45 days) 180 days after receipt of the adverse decision No later than 45 days after receipt of the appeal (may be extended another 45 days) No Right to Continued Employment Participation in the Plan is not a contract of employment and does not constitute a contract for, nor guarantee of, continued or future employment with the Company. The Plan provisions also do not prohibit changes in the terms of your employment. Collective Bargaining Agreements The Plan may be maintained pursuant to collective bargaining agreements. Copies of the agreements are available to employees covered by the particular agreement and may be requested from your Human Resources office. If you wish to obtain your own copy, submit a written request to your Human Resources office. 20

25 Plan Administration This section provides you with important information about the plan as required by the Employee Retirement Income Security Act of 1974, as amended (ERISA). While ERISA does not require the Company to provide you with benefits, it does mandate that the Company clearly communicate to you how the plans subject to the provisions of ERISA operate and what rights you have under the law regarding plan benefits. General Information The following summarizes important administrative information about the plan. NOTE: The plan can be identified by a specific plan number, which is on file with the U.S. Department of Labor. Plan Information Overview Plan Names and Numbers Lockheed Martin Group Benefits Plan, which is identified by the number 594 Lockheed Martin Operations Support, Inc. Benefit Plan, which is identified by the number 504. Plan 594 and Plan 504 are welfare benefit plans within the meaning of the Employee Retirement Income and Security Act (ERISA), and provide health and welfare benefits to covered employees. The Company assigns the plan numbers. Please use these numbers whenever you correspond with anyone about the Plans. Employer Identification Number Lockheed Martin Corporation: Plan Sponsor and Plan Administrator Lockheed Martin Operations Support, Inc.: Lockheed Martin Corporation 6801 Rockledge Drive Bethesda, MD Lockheed Martin Operations Support, Inc Rockledge Drive Bethesda, MD Plan Year January 1 - December 31 21

26 LTD Insurance Carrier Agent for Service of Legal Process The contact information for LTD Insurance Carrier for the various benefit plans can be found in the Claims Administrators section. You can serve legal process on the Plan Administrator at the address listed under Plan Sponsor and Plan Administrator. Claims Administrators This section provides specific contact information for the Plan described in this SPD. For Issues on: Contact: At: General Information General plan administration and eligibility to participate in the Plan Lockheed Martin Employee Service Center (LMESC) Lockheed Martin Employee Service Center (LMESC) P.O. Box Dallas, TX Toll-free calls in the U.S International callers Hearing Lockheed Martin Employee Service Center Online (LMESC Online) impaired on the Lockheed Martin intranet Click on LM Employee Service Center under Pay and Benefits, then My Benefits>Health and Welfare. From the Health and Welfare page, click the drop down menu in the Resources section and click Find Summary Plan Descriptions. on the Internet lmc.lifeatworkportal.com on the Internet You will need your Login ID (not your NT ID) and Password to access the website from the Internet. Refer to Login Help on the login screen for guidance. Once logged in, choose My Benefits>Health and Welfare. From the Health and Welfare page, click the drop down menu in the Resources section and click Find Summary Plan Descriptions. 22

27 For Issues on: Contact: At: Disability Filing an initial claim, benefit provisions, payment of benefits, denial of benefits, Proof of Insurability LTD Insurance Carrier/Claims Administrator: Cigna Group Insurance Cigna Group Insurance P.O. Box Dallas, TX Plan Funding The benefits described herein are guaranteed under a contract or policy issued by the LTD Insurance Carrier. In the event there is a discrepancy between this booklet and the contract or policy of insurance, the contract or policy of insurance will govern. Future of the Plan The Company expects to continue the plan as described in this booklet. However, the Company reserves the right to amend, suspend or terminate the plan in whole or part at any time. The collective bargaining agreement(s) may restrict the Company s right to amend or terminate the benefit plans during the term(s) of the agreement(s). If the plan is terminated, coverage under the plan for you and your covered dependents will end, and payments under the plan will generally be limited to claims incurred before the termination. 23

28 Your Rights Under ERISA As a participant in this Plan, you are entitled to certain rights and protection under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to the provisions stated below. Receive Information about Your Plan and Benefits You are entitled to examine without charge, at the Plan Administrator s office and at other specified locations, such as work sites and union halls, all documents governing the Plan, including insurance contracts and collective bargaining agreements. You can obtain a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor, which is available at the Public Disclosure Room of the Employee Benefits Security Administration. You can obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and collective bargaining agreements, copies of the latest annual report (Form 5500 Series), and an updated summary plan description. The Plan Administrator may make a reasonable charge for the copies. You are entitled to receive a summary of the Plan s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called fiduciaries of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you make a written request for a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan s money or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. 24

29 Assistance with Your Questions If you have questions about your plan, you should contact the Plan Administrator. If you have questions about this statement or about your rights under ERISA or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor (listed in your local telephone directory) or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. To obtain the addresses and telephone numbers of the District offices, you may access the Department of Labor Employee Benefits Security Administration Web site at 25

30 Definitions This section is a general list of common definitions. Therefore, certain terms listed here may not be used in this SPD. Actively at work you are considered in active service or actively at work for benefits eligibility on a: Company-scheduled work day, if you are performing the regular duties of your work on a full-time basis either in the employer s place of business or at a location you are required to travel to for Company business; Company-scheduled non-workday, if you are in active service the day before the Company-scheduled non-workday; or Company-approved paid leave of absence (except for a medical leave). Annual base pay your annual pay, excluding lump sum merit increases, incentive compensation, commissions, night shift bonuses, overtime, other bonuses and other compensation. If you are a part-time employee, your annual base pay is based on 30 hours per week. Benefit waiting period the period of time you must be continuously Disabled before Disability Benefits may be payable. Children means your unmarried children under age 26 who are primarily dependent upon you for support (including stepchildren living with you at the time of your death). Company Lockheed Martin Corporation and any affiliate. Consumer Price Index (CPI-W) the Consumer Price Index for Urban Wage Earners and Clerical workers published by the U.S. Department of Labor. If the index is discontinued or changed, another nationally published index that is comparable to the CPI-W will be used. Covered earnings your annual wage or salary for work performed for the Company. Covered Earnings are determined initially on the date you apply for coverage. Subsequently, Covered Earnings are determined as of December 1 of the prior plan year, if the Company provides written notice of the change and the required premium is paid. If you change from part-time to full-time employment or vice versa after Covered Earnings have been determined for the year, Covered Earnings will be re-determined as of the date of the change. Covered Earnings does not include amounts received as night shift or other bonus, commissions, incentive compensation, lump sum merit increases, overtime pay or other extra compensation. Disabled or disability as determined by the disability insurance company, you are disabled if, because of sickness or injury: You are unable to perform each and every material duty of your regular job; After monthly benefits have been payable for 24 months, you are unable to perform each and every material duty of any occupation for which you may reasonably become qualified based on education, training or experience; and You are under the care of a Physician. Doctor Refer to the definition of Physician for more information. 26

31 Earnings Earnings as of December 1st of the prior plan year or your date of hire, excluding night shift or other bonus, commissions, incentive compensation, lump sum merit increases, overtime pay or other extra compensation. Indexed annual base pay for the first 12 months that you receive benefits under the work incentive provision, indexed annual base pay will equal your annual base pay. After 12 monthly benefits have been paid, indexed annual base pay will equal your annual base pay plus an increase equal to the lesser of: 10% of your indexed annual base pay during the preceding 12 months of disability; or The rate of increase in the Consumer Price Index (CPI-W) during the preceding calendar year. The increase will be applied each year on the anniversary of the date monthly benefits became payable. LTD Insurance Carrier Cigna Group Insurance. Monthly base pay your annual base pay divided by 12. Physician a licensed doctor practicing within the scope of his or her license and rendering care and treatment to a covered employee that is appropriate for the condition and locality. The term does not include an employee, an employee s spouse, an employee s immediate family (including parents, children, siblings or spouses of any of the foregoing, whether the relationship derives from blood or marriage) or a person living in the employee s household. Plan year the 12-month period beginning on January 1 and ending on December 31. Proof of Insurability (POI) the process the insurance company uses to determine that you are insurable. You may have to provide a statement of your health history, and you may also be asked for other evidence of good health, such as a medical examination. If you are asked for a medical exam, you must pay for it in full. 27

32 Appendix A Participating Business Units* All domestic businesses of Lockheed Martin Corporation are eligible except those listed below: Engineering and Science Company NASA Ames LM Systems Support and Training Services LAS Sandia National Laboratory LM Government Solutions Inc. QTC Holdings Inc. *This list is current as of the time of publication; participating businesses are subject to change. 28

33 Appendix B Participating Unions* The benefits described in this booklet are available to eligible employees of Lockheed Martin Corporation who are represented by the: International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, A.F.L. C.I.O. and Engineer Union Local 444A Mitchel Field, NY International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, A.F.L. C.I.O. and Engineer Union Local 444 Mitchel Field, NY Harrisburg Association of Flight Simulator Instructors Hurlburt Association of Flight Simulator Instructors (Hurlburt AFB, FL) International Association of Machinists and Aerospace Workers, AFL-CIO and its Local Lodge 933, Lodge 519 and its Local Lodge 36 of District 775 International Association of Machinists and Aerospace Workers, AFL-CIO Local Lodge 794 Non- Instructors International Association of Machinists and Aerospace Workers AFL-CIO District Lodge #75, F- 15/F/A-22 USAF Aircrew Training & Courseware Development, Kingsley Field, OR Local Lodge #W-12, Tyndall AFB, FL Local Lodge #449 International Association of Machinists and Aerospace Workers, District Lodge 112, Local Lodge 2917 International Association of Machinists and Aerospace Workers, Hawaii Federal and Amalgamated Local Lodge 1998 (Ewa Beach, HI) International Association of Machinists and Aerospace Workers, AFSS, Western Region USA International Association of Machinists and Aerospace Workers, AFSS, Central Region USA International Association of Machinists and Aerospace Workers, AFSS, Eastern Region USA International Association of Machinists and Aerospace Workers, Local 2916 Custom and Border Protection International Association of Machinists and Aerospace Workers, AFL-CIO - Hawaii Federal and Amalgamated Local Lodge 1998 (Pearl Harbor, HI) International Association of Machinists and Aerospace Workers, AFL-CIO, Local Lodge 2249 Special Operations Contractor Logistics Support Services, Fort Walton Beach, FL International Association of Machinists and Aerospace Workers, AFL-CIO, Local Lodge 794 ATARS II Schedulers Cannon AFB Association of Flight Simulator Instructors Lockheed Martin Missiles & Fire Control - Dallas who are represented by the International Brotherhood of Electrical Workers (IBEW) Local and its Local No. 220 Little Rock Association of Instructors, Technicians and Support Personnel Dyess Association of C130-J Flight Simulator Instructors If you have any questions concerning your eligibility, please contact the Lockheed Martin Employee Service Center (LMESC). *This list is current as of the time of publication; participating unions may change from time to time. 29

34 When You Have Questions If you have questions about this document or want to obtain a copy of the SPD, please access Lockheed Martin Employee Service Center Online (LMESC Online) at: on the Lockheed Martin intranet Click on LM Employee Service Center under Pay and Benefits, then My Benefits>Health and Welfare. From the Health and Welfare page, click the drop down menu in the Resources section and click Find Summary Plan Descriptions. on the Internet lmc.lifeatworkportal.com on the Internet You will need your Login ID (not your NT ID) and Password to access the website from the Internet. Refer to Login Help on the login screen for guidance. Once logged in, choose My Benefits>Health and Welfare. From the Health and Welfare page, click the drop down menu in the Resources section and click Find Summary Plan Descriptions. Or, you can call the Lockheed Martin Employee Service Center (LMESC) at: Toll-free calls in the U.S International callers Hearing impaired For specific questions regarding benefits and claim information, please contact the claims administrator. Please keep this notice with your other important benefits information. 30

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36 107SPDB14 01/2014