Good morning, and welcome to Lockheed Martin's 2014 Annual Meeting of Stockholders. We also welcome those who are participating by web Tap. I'm Mary Anne Lavin, General Counsel and Corporate Secretary for Lockheed Martin. Let me introduce you to Marilyn Cusman, our Chairman, President and CEO Embry Tanner, our Executive Vice President and Chief Financial Officer. We also have members of our Board of Directors and Executive Officers, School, Marilyn will introduce to you shortly.
First, let me remind you that in our discussion today. We may make forward looking statements which project future events. Please be aware that the corporation's actual results may vary from what we we believe or anticipate. You may wish to review our forward looking statements either on our website or the SEC's website. The notice of this meeting, the proxy Gateway and the annual report were duly and properly mailed and the affidavits to that effect will be filed with the records of this meeting.
Inspectors of election from Computershare Trust Company have been appointed to act at this meeting. Their preliminary report shows that more than 289,000,000 shares approximately 90% of the shares outstanding and entitled to vote are represented here today. This meets Forum requirement of our bylaws and we may proceed with today's meeting. Stockholders who wish to vote in person by ballot may do so at this time. If you've already voted by proxy, there is no need to vote on ballot unless you wish to change your vote.
Please raise your hand if you don't have a valid answer. Seeing none, I will turn the meeting over to our Chairman, Marilyn Houston. Thank you, Mary Anne. Good morning, ladies and gentlemen. We're excited to be here in Florida, home to several of our businesses and just a stone's throw in Eglin Air Force Base, which is home to many of our F-thirty 5 fighter jets.
On behalf of the Board of Directors, let me first welcome all of you here to our 2014 Annual Meeting. This meeting gives us a chance to reflect back on what we've accomplished over the past year and to look ahead to the opportunities and challenges ahead of us. I hope you enjoyed our opening video, which just gave you a small sampling of the extraordinary innovations underway at Lockheed and Martin. Let me begin by introducing my fellow Board members that are here for today's meeting. I would ask each director to please stand as I call your name.
Our newest board member, Dan Akerson, Vice Chairman and Special Advisor to the Board of the Carlyle Group, Dan joined our Board in February. Noelle Archibald, Retired Executive Chairman of the Board of the Board of Stanley Black and Decker Incorporated Ross Brewer, President and Chief Executive Officer of Sands Club. Dave Burrett, Executive Vice President and Chief Financial Officer of U. S. Steel Corporation end.
Jim Ellis, retired President and Chief Executive Officer of the Institute of Nuclear Power Operations Tom Faulk, Chairman of the Board and Chief Executive Officer of the Kimberly Clark Corporation Gwen King, President Podium Pros, the Washington DC based Speakers Bureau Jim Lloyd, Senior Counselor at The Cohen Group. Service Doug McCorkendale, our Independent Lead Director and Retired Chairman and Chief Executive Officer of The Net Company Joe Ralston, Vice Chairman of the Cohen Group. To all of our Board of Directors, thank you for being today. Let me also take a moment to introduce the Lockheed Martin senior executives who are with us today. Please stand as I call your name.
Rick Ambrose, Executive Vice President, Space Systems Saundra Barber, Executive Vice President, Information Systems and Global Solutions Ciel Bennett, Executive Vice President, Mission Systems and training Orlando Carvalho, Executive Vice President, Aeronautics Rick Edwards, Executive Vice President, Missiles and Fire Control and We also have a number of other corporate officers and senior leaders who are in attendance today. Would you please stand and be recognized? Webcast. Our independent accountants Ernst and Young are represented here today by the account partners Tim Messick, Michael Blunt and Jill Wheeler. Tim, Michael and Jill, would you please stand?
Page. Well, as I mentioned earlier, just a few miles away from here across Choctawhatche Bay is Eglin Air Force Base, home to the 33rd Fighter Wing. News. The 33rd's primary mission is to train world class pilots and maintainers on all West. Any pilots strapped into the F-thirty 5 is right here at Eglin.
And they'll tell you as many of them have told me, there's nothing like it. And they mean that literally. The technology we've built into the F-thirty 5 is light years ahead of other aircraft. We're very proud of the 35 and the role that it will play in strengthening global security for decades to come. We're also very Proud of the men and women of Lockheed Martin who support the global security mission, many of whom are right here in Florida.
Each of Lockheed Martin's businesses has of Presence in Florida. And in total, we employ 11,800 people in the state. That number will grow to more than 12,000 later this year as we expand our Mission Systems and Training unit in Orlando. Here in the Panhandle, we employ almost 1,000 people, making us one of the largest employers in this area. Our people live, work and contribute to the economic growth and Tallity of the Emerald Coast.
Lockheed Martin employees support Florida in other ways as well. One way is through volunteerism. Last year, more than 4,000 of our employees volunteered 100,000 hours with nonprofit organizations in Florida. And we contributed more than $1,100,000 to Florida community programs, including support from the Naval Aviation Museum, University of Central Florida Academy of Mathematics and Science Program and the Manatee Education Foundation. Lockheed Martin is absolutely committed to Florida and its communities, and we're proud to help this state to continue to flourish.
Now I'd like to give you a brief overview of our 2013 Performance and then talk about our strategy for future growth. Last year Lockheed Martin faced a very challenging business environment. Dynamic political and economic conditions brought about sequestration, breaking customer budgets and a 16 day government shutdown. It was a difficult time, yet we were prepared for it. We had anticipated a decline in several years ago, and we began taking actions.
We cut costs. We consolidated facilities. We reshaped Portfolio and we invested in adjacent growth markets. Most importantly, we were determined to meet our commitment to our customers. We knew what they were up against.
Fewer resources and increasing demand, and we were determined to support them through this challenging Inc. The prudent actions we took in anticipation of the decline in U. S. Defense spending, combined with a focus on performance for our customers, resulting in strong bottom line performance in 2013, even as sales declined slightly. Specifically, we delivered 1 year total shareholder returns of 68%.
That's a reflection of the market's confidence in this company, its employees and our strategy for growth. And we showed strong financial performance WESTS in several key areas, including all time records in segment operating profit, segment margin, of cash flows and we're being strategic about how we deploy that cash. 1st and foremost, we're returning value to you, stockholders. In 2013, we paid cash dividends of $1,500,000,000 we repurchased 16,200,000 shares and we increased our quarterly dividend by 16%. In other words, we continue to make good on our commitment to return at least 50% of free cash flow to our investors.
And this is a goal we remain committed to. Delivers. Among the thousands of examples, I'd like to highlight just a few for you today. I've told you about how proud we are of the F-thirty five. Now let me tell you about that program's accomplishments last year.
All three F-thirty five variants met Sea milestones. The F-thirty 5A, which is the conventional takeoff and landing variant completed its first in flight missile launch. Web. The F-35B, the short takeoff vertical landing variant performed its 1st vertical night landing on the USS Wasp. And the F-thirty five Sea carrier variant completed its first in flight refueling.
This unique aircraft continues to meet the demanding expectations of our U. S. And international customers and will soon hone the skies wherever it hire. In an important strategic win, our Information Systems and Global Solutions business was selected by NATO to design the active network infrastructure of its new headquarters in Brussels, Belgium. This project will deliver secure, collaborative network enabled facility that serves the needs of NATO's 28 member nations with 21st century communications and computing capability.
Our Missiles and Fire Control business achieved a number of 1st last year. Among them, the medium extended air defense systems or MEADS demonstrated unprecedented capability when it Intercepted both tactical ballistic missiles and an air breathing target approaching from opposite directions. This successful dual intercept proves that the system is ready to begin protecting our war fighters and allies. Our Mission Systems and Training business launched its 3rd littoral combat ship, the future USS Milwaukee. These leading edge surface combatants are fast, maneuverable and provide a wide range of capabilities, including mine Clearing, Anti Submarine and Anti Surface Warfare.
And our Space Systems team successfully launched its Maven Spacecraft, now on its 10 month journey to Mars. When it arrives late this year, it will study the plant's upper atmosphere to understand the Martian climate. These are just a handful of the 2013 accomplishments we achieved while supporting the customer's critical mission. Our employees are focused, engaged and dedicated to delivering for our customers. They understand what's at stake, and they're determined to do their part to ensure that our customers get what they need when they need it.
Looking ahead, while we continue to face economic challenges and uncertainty, I believe that we are well positioned to lead the global security and aerospace industry into the second half of this decade and beyond. We are focused on meeting commitments, anticipating the needs of our customers and investing in the innovations for the future. We've sharpened our core capabilities in such areas cybersecurity, unmanned systems and missile attempts. And we're also leveraging our technological Peace in areas that will have fundamental positive impact on our world, such as advanced manufacturing and materials, data analytics, renewable energy and energy efficiency. And we're aggressively seeking new opportunities to grow our business internationally.
Service. We have significant opportunities in the Middle East, Australia and other parts of the Asia Pacific region. Last year, we created a new organization called Lockheed Martin International to focus these efforts and to drive international growth from 17% of sales over 20% within a few years. We are well on our way. And as we grow, we want to do so responsibly.
We're continuing to build sustainable business practices into our operations. To us, that means protecting our environment, strengthening our communities, driving responsible growth and always adhering to our values and the highest ethical standards. We've made Beck's Benchmark for Sustainability. The Carbon Disclosure Project named us for the 3rd consecutive year, one of the top companies worldwide on its Global Carbon Performance Leadership Index. And Corporate Responsibility Magazine WESP named Lockheed Martin 1 of its 100 Best Corporate Citizens in 2013.
I'm also very proud the progress that we've made in diversity and inclusion. Recently, I had the honor of accepting the 2014 Catalyst Award on behalf of Lockheed Martin. Lockheed Martin was specifically recognized for our U. S.-based initiative, Women Accelerating Tomorrow. This initiative is based on a is part of a broad strategic effort at Lockheed Martin to attract, develop and King's diverse talent in a highly technical and engineering focused industry.
So With solid financial performance, excellent program execution and a continued focus on culture and business practices, the Lockheed Key Martin team is in top form. I am as optimistic as I've ever been by the future of our company. We have the right products and services that our customers tell us are crucial to enabling them to do their job. And we have the right people in place to drive innovation throughout our businesses. With our technology, our capabilities, our depth of experience and our dedicated people, we will and C.
Every day, I am humbled by their talent, their passion and their dedication. And I'm grateful for the opportunity to be part of Great Organizations, a great organization that will make this company even stronger and more worthy of your investment. Team. Thank you for your continued confidence in us. Series.
And now I'd like to turn the floor to Mary Anne, who will review the and Portion of today's meeting. Dorian? Thank you, Marilyn. Before proceeding to the official business of the meeting, please review the Canada and the meeting rules and procedures for today's meeting, which you received at the registration desk. As a courtesy to all stockholders.
We ask to honor the following procedures. To speak at this meeting, you must be a stockholder of Grid as of February 21, 2014, a person named in a written authorization in the form of a proxy given by a stockholder record date or the duly authorized representative of an organization, which was a stockholder of record as of that date. Webcast. During the discussion period for each proposal, if you wish to speak, please proceed to the microphone and wait to be Recognize. Please state your name, address and whether or not you're an individual stockholder, proxy holder a representative of an organization.
We ask that you keep your remarks brief in order to provide all stockholders an adequate opportunity to speak. We request that stockholders not return to the microphone for a second time. A general discussion will be held at the end of the meeting, at which time the stockholders are welcome to ask questions and make comments at general. Today's meeting will focus on 6 specific proposals described in the proxy statement. I wish to note that on April 14, we received a letter from the New York City Controller withdrawing their stockholder proposals relating to our stock of callback policy.
Consequently, proposal 7 will not be presented first. The remaining proposals are the election of 12 directors ratification of the appointment Ernst and Young as the independent auditors, approval on an advisory basis of the compensation of our named direct executive officers in the proxy. Management's proposal to amend the 2011 incentive performance award plan to authorize with an additional 4,000,000 shares and the 2 remaining stockholder proposals. While discussing each of these proposals, Hills. No other business may be brought before the noon.
Nolan Archibald, David Bird and Doug McClopindale have been appointed proxy by holders of at least 289,000,000 shares and have devoted these shares in accordance with the instructions of the stockholders. I'll turn the podium Back to Maryland, who will share the remainder of this presentation. Thank you. Stream. We'll turn now to the official business of this meeting.
Proposal 1, the nomination of 12 directors to serve on the Board of Directors is now before the meeting. Is there any discussion on proposal 1? Hearing none, that concludes our discussion on the election of the Board of Directors. Proposal 2, the ratification The appointment of Ernst and Young as independent auditors is now before the meeting. Is there any discussion on Proposal 2?
Hearing none. That concludes our discussion of the ratification of the appointment of the independent director. Proposal 3. The approval on an advisory basis of the compensation of our named executive officers is now before the meeting. Webcast.
Is there any discussion on proposal 3? Hearing none, that concludes our discussion of the approval of the compensation of our Executive Director and the officers. Proposal 4 is a proposal by management to amend the 2011 incentive award plan to authorize an additional 4,000,000 shares. The proposal is presented on pages 28 through 36 of the proxy statement. Is there any discussion on proposal 4?
Hearing none. That concludes our discussion of the plan amendment. Proposal 5 is a stockholder proposal offered by John Chevedden. The proposal requests that the corporation permit stockholder action by written consent. The proposal and the Board's response are presented on Pages 7879 of the proxy statement.
Mr. Introduce the proposal. Thank you. Proposal 5, right 2 Act by written consent and sponsored by John Chevedden of Redondo Beach Capital. Resolved shareholders request that our Board Director undertake such steps as may be necessary to permit written consent by shareholders Entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon or present and voting.
This written consent is to be consistent with giving shareholders the fullest power to act by written consent in accordance with applicable law. This includes shareholder ability to initiate any topic for written consent consistent with applicable. Whitestill shareholders successfully used written consent underperforming directors in 2012. This proposal topic also won majority shareholder support at Steenmaker Companies in a single year. This included 67% support at both Allstate and Sprint.
This proposal would empower shareholders by giving them the ability to effect change at Power Company without being forced to wait until an annual shareholder meeting. Shareholders could replace the directors using actions by written consent. Shareholder action by written consent could save our company the cost of holding a physical meeting between annual meetings. Please vote Respect, shareholder value, slide 2 act by written consent proposal. Thank you.
Thank you, Ms. Fusco. We support the concept of stockholders being able to effect change outside of the annual meeting process and we have several ways for that to be done. And we believe that our governance provision allowing stockholders to call a special meeting satisfying this contract. Is there any other discussions on proposal 5?
Hearing none, that concludes our discussion of proposal 5. Proposal 6 is a stockholder proposal offered by the American Federation of Labor and Congress of Industrial and adopt a policy, which would require our senior executives to retain a significant percentage of shares acquired through equity compensation until retirement. The proposal and the Board's response are presented on Pages 7980 of the proxy statement. Ms. Fusco has been designated to present of the AFL CIO's proposals.
Would you please introduce the proposal? Proposal 6, stockholder proposal by the American Federation and urge the compensation committee of the Board of Directors to adopt a policy requiring that senior executives retain a significant percentage of Air's acquired group equity compensation programs until reaching normal retirement age. For the purpose of this policy. Normal retirement age shall be defined by the company's qualified retirement Plan that has the largest number of plan participants. The shareholders recommend that the committee adopt a share attention percentage requirement of at least 75% of net after tax payers.
The policy to prohibit hedging transactions are shares subject to this policy, which are not sales that reduce the risk of loss to executives. This policy shall supplement any other share ownership requirements that have been established as senior executives and should be implemented so as not to violate the company's existing contractual Geisha or the terms of any compensation or benefit plan currently in effect. The full text this proposal within the annual meeting. Thank you, Ms. Klitschko.
We support the concept of meaningful long term stock ownership by senior executives. We believe our robust stock ownership guidelines satisfies this Conscience. We also believe the 75% requirement is too high and most of our investors told us they agree with our belief. Is there any other discussion on Proposal 6? Not hearing any.
Then we'll move on. Thank you very much. Web. Hearing the polls are now closed. So anyone present who has voted by ballot, please raise your hand and the attendant will pick up your complete Ballad.
In queue. At this time, I'd like to recognize Mr. Kevin Laurita, one of the inspectors of election to announce the preliminary voting results on the 6th proposal presented today.
Mr. Chairman, in accordance with the corporation's charter and bylaws, the affirmative vote of a majority of votes cast is request for the passage of each of these 6 proposals. With the return of 90.7% of the shares outstanding and Title to vote. Proposal number 1, all 12 directors received at least 90% of the shares voting in Favor and have been elected to the Board. Proposal number 2, the ratification of the appointment of Ernst and Young LLP as independent auditors received more than 98% of shares voting in favor and has been approved.
Proposal free. The compensation of the named executive officers received more than 93% of shares voting in favor Management's proposal to authorize an additional 4,000,000 shares under the incentive performance award plan has received more than 92 consent received more than 60% of the shares voting against and was rejected. Stockholder proposal 6, a request that the corporation adopt a policy that would require executives to retain a significant percentage of equity compensation, received more 78% of the shares voting against and was rejected. Thank you and I'll turn it back.
Thank you. At this time, I would like to thank those who participated in our webcast for your continued interest in Lockheed Martin. This concludes the official business and the webcast portion of our meeting today.