INTERDEPARTMENTAL COMMUNICATION

TO: IAM&AW Hourly Employees November 3, 2008

FROM: Payroll Services D/F10M Z/0277 Ext. 4-3339

SUBJECT: 2008 COST OF LIVING SUPPLEMENTAL PAYMENT

A Supplemental Cost of Living payment of $800 will be paid on or before December 19, 2008 to each hourly employee on the active payroll or approved leave of absence of less than one year on December 6, 2008.

Eligible employees have the option of depositing their Supplemental Cost of Living payment into the Hourly Savings Plan Plus in lieu of receiving a cash bonus payment.

If you elect this option, you must deposit the entire amount of the 2008 Cost of Living Supplemental payment, less FICA taxes, into the Hourly Savings Plan Plus as a pre-tax contribution to the Plan. While the 2008 Cost of Living Supplemental payment is not matched by Company contributions, employees who choose this option will defer taxes on payments since the amounts are excluded from their 2008 W-2 gross earnings.

To exercise this option, complete and return this form to the Payroll Service window in B-95 between 6:30 a.m. to 3:30 p.m. Monday through Thursday, 6:30 a.m. to 2:00 p.m. on "A" schedule Fridays. From the main lobby on the north side of B-95, exit right and turn left at the first hallway. The service window is immediately on the right through the double doors (D/F10M, Z/0277). Completed forms must be received by 3:30 p.m., Monday, November 24, 2008. Faxes will be accepted on extension 4-5265.

Name: _________________________________ Emp. Badge No. ___________________

By signing below and returning this form by the due date, I elect to have my 2008 Cost of Living Supplemental payment deposited to my 401K Plan. I understand that making this election means that I will NOT receive a Cost of Living Supplemental check. Instead, the money I would have received will be placed in my Hourly Employee Savings Plan Plus account subject to the following provisions:

1. Will not be matched by the Lockheed Martin Corporation.

2. Will be subject to the withdrawal provisions of the Plan.

3. Will be for the total amount of the COLA supplement less applicable FICA taxes.

4. Will be a pre-tax contribution to the Plan.

5. Is an irrevocable election.

This elective contribution will be invested according to your future investment elections at the time the payment posts to your account. If this is your first contribution to the plan and/or you do not have future investment elections on file at CitiStreet, you must call the Information Line at 1-800-444-4015 before November 24, 2008 to select your future investment elections. If you do not select future investment elections, your Supplemental Cost of Living payment will default to the Stable Value Fund.

Signed: _______________________________________ Date______________________