Lockheed Martin Employee Memo: Formation of New Joint Venture

Status Report From: Lockheed Martin Corporation
Posted: Monday, May 2, 2005

From: Communications, Corporate
Sent: Monday, May 02, 2005 4:03 PM
Subject: All Employee Memo From Bob Stevens - Re: Formation of New Joint Venture
Importance: High


To:  Lockheed Martin Employees 
Date: May 2, 2005
From: Bob Stevens, Chairman, President & CEO
Subject:  Formation of New Joint Venture

Fellow Employees:

Lockheed Martin and The Boeing Company are announcing this afternoon a plan to combine both companies' launch vehicle capabilities and assets under a new joint venture. The new enterprise, to be called United Launch Alliance (ULA), brings together Lockheed Martin's Atlas and Boeing's Delta programs, combining all of the production, engineering, test and launch operations associated with these systems. This agreement, upon closing, is also structured to bring an end to the pending civil litigation between the two companies.

We're taking this action in order to better serve our three key stakeholders -- our customers, our shareholders and our employees. For our U.S. government customers, we are helping to reduce the cost of providing assured access to space with two distinct launch systems by consolidating the management, support and infrastructure of the two programs. For our shareholders, we are bringing greater stability and predictability to our launch services business. The reduced volatility of this business will also benefit our employees over the longer term.

I recognize that this plan may involve a difficult transition for some of our Space Systems employees, but I am confident it is the right move for the future of our company and our customer. We will do our best to help affected employees make this transition as easily and expeditiously as possible.

The joint venture, to be headquartered in Denver, Colorado, will be led by Michael C. Gass, currently Vice President and General Manager of Lockheed Martin's Space Transportation organization. As President and Chief Executive Officer of United Launch Alliance, he will report directly to the ULA Board of Directors, which will be composed of six members (three from Lockheed Martin and three from Boeing) yet to be named. The Chief Operating Officer will be Dan Collins, who currently serves as Boeing's Vice President, Expendable Launch Systems. Other members of the management team will be named in the near future.

Pending government approvals, we expect the joint venture to close by the end of this year and operations to begin immediately thereafter. More detail on our plan is provided in a news release issued this afternoon, available on our Web site at:

Space Systems employees will be provided additional information from Executive Vice President Tom Marsh, and more specific communications to affected employees are forthcoming from local management teams.

I have the highest regard for our Atlas team and its exemplary record of service to our U.S. government customer. I know that their dedication to mission success will endure, regardless of the organizational structure, because the noble cause they serve goes on: the security and protection of United States' citizens.

For their past achievements and for their continued commitment to that goal, I am deeply appreciative.

/s/ Bob

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