Lockheed Martin chiefs gain windfall Sale of shares earns 3 executives more than $40 million

Stock rise spurred move

Daniel M. Tellep, retired chairman, made $13 million

June 22, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

The top three executives at Lockheed Martin Corp. took advantage of a recent spike in the company's stock price to sell shares they held worth more than $40 million, according to filings with the Securities and Exchange Commission.

Chairman Daniel M. Tellep, who retired at the end of 1995 as an active employee of Lockheed Martin, made a profit of about $13 million in options-related trading totaling $20.4 million.

Tellep, who had been required by company guidelines to own Lockheed Martin stock worth at least five times his base salary, exercised options to buy 280,927 shares May 28-30.

He paid from $22.47 to $28.53 for each share, for a total of about $6.9 million. Shortly afterward, he sold 245,844 shares for $81.01 to $84.80.

Charles P. Manor, a spokesman for Lockheed Martin in Bethesda, characterized Tellep's action, and those by two other top executives, as routine trades based on maturation of their options.

The total annual compensation of the top 1,400 management officials at Lockheed Martin includes their salaries, bonuses and stock options.

Manor explained that the options, which allow employees to purchase stock at a determined price, must be exercised within a specific number of years or the employees lose the right to take advantage of the compensation, which is related to the performance of the company's stock.

Norman R. Augustine, vice chairman, president and chief ex- ecutive, sold 194,624 shares early this month. The prices he paid for the options and the prices at which they were sold will be disclosed next month.

Under terms of the company's stock ownership plan, established last summer to encourage key employees to own a substantial chunk of the company's common shares, Augustine is required to own stock worth five times his 1995 base salary of $983,000.

The stock options do not count toward this total, Manor said.

Vance D. Coffman, executive vice president and chief operating officer, purchased 98,611 shares at prices ranging from $23.30 to $39.76. On the same day, he sold 96,182 shares for $83.47 to $83.77.

Lockheed Martin's shares rose 9 percent from the time the company closed on its acquisition of Loral Corp. in April to June 11, when it reached a high of $86.375.

The stock closed yesterday at $82.375. In an unrelated development, Lockheed Martin announced yesterday that it has completed a planned debt offering of $5 billion to cover expenses of the Loral acquisition by issuing another $1.5 billion in notes, in addition to the $3.5 billion debt securities issued last month.

Pub Date: 6/22/96

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