Lockheed, Martin Tell Cost of Their Merger : Aerospace: The firms expect $850 million in expenses. They also move to settle stockholder lawsuits challenging union.

Lockheed Corp. and Martin Marietta Corp. said Thursday that they expect to incur up to $850 million in charges this year to cover employee-severance costs, plant closings and other expenses related to implementing their historic $10-billion merger.

The aerospace giants also disclosed plans to settle a rash of stockholder lawsuits that have challenged the merger’s fairness. The agreement in principle calls for the merged company, Lockheed Martin Corp., to pay $37 million by increasing its stock dividend for three quarters and paying the plaintiffs’ legal fees.

The disclosures were made in proxy statements the companies filed with the Securities and Exchange Commission. The filings were in advance of investors voting on the proposed marriage, which would create the nation’s largest defense contractor with about $23 billion a year in sales.

Both companies’ stockholders will vote at special meetings March 15 in Chicago.

The companies said a “substantial portion” of the $850 million in charges would be taken against Lockheed Martin’s financial results in 1995, the proxy said.

Lockheed and Martin did not detail how many people might lose their jobs in the merger, but the size of the estimated charge indicates the figure could easily climb into the thousands. The two firms currently have a total of 170,000 workers.

The companies did say their areas of overlap include their space, missile and electronics operations. It’s already known that Lockheed would leave its Calabasas headquarters, where about 200 people work, because the new company would be based in Martin’s home of Bethesda, Md.

The SEC filings also show that 439 of Martin’s officers and managers would immediately receive “performance incentive” payments totaling more than $42 million because of “change in control” provisions of the company’s benefit plans. Had the companies remained independent, the officers and managers still would have received that $42 million, but over a longer period, the proxy said.

Lockheed, in turn, estimated that long-term performance awards to be paid to its top executives at the time of the merger would be at least $3.7 million.

Under the proposed settlement of the stockholders’ suits, Lockheed Martin would pay a quarterly dividend of 40 cents--rather than the 35 cents originally envisioned--on each of its 208 million common shares outstanding. The higher payout would occur for the three quarters after the merger is completed, which is expected by March 31.

The merger calls for each Lockheed share to be exchanged for 1.63 shares of the new Lockheed Martin, while Martin Marietta shares would be swapped one for one.

According to financial figures in the proxy statement, the combined Lockheed Martin last year would have earned $865 million on $22.4 billion in revenue. But that figure does not include any special charges such as those envisioned for 1995, the statement notes.