PARIS, June 16, 2005 -- Korea Aerospace Industries (KAI), Hellenic Aerospace Industry (HAI) and Lockheed Martin [NYSE: LMT] will jointly study and evaluate the advanced jet training needs of the Hellenic Air Force (HAF) and the potential contribution each could make if the T-50 Training System should be selected. The agreement provides for a one-year study, but could be extended if all parties concur.

Executives from the three companies signed a memorandum of understanding today at the Paris Air Show. Signing the document were H.J. Chung, president and chief executive officer (CEO) of KAI; Tassos Philippakos, CEO of HAI; and Ralph Heath, Lockheed Martin executive vice president-Aeronautics.

“We think the T-50 could be one of the great trainers of all time,” said Chung. “KAI has been eager to expand our international involvement to Europe, and this collaborative effort could be an excellent opportunity to begin. This reminds me of how the T-50 started about 10 years ago – as the KTX II conceptual study between KAI’s predecessor Samsung Aerospace and Lockheed Martin Aeronautics’ predecessor General Dynamics – for a new jet trainer for the Republic of Korea Air Force. That dream will be a full reality next year.”

“HAI is looking forward to this cooperation among our three companies in a truly multi-national effort, to study the potential benefits for the Greek Defense Industry, if such aircraft is selected by the Hellenic Ministry of Defense,” said Philippakos.

“The T-50 has been a tremendously successful program thus far, and we are proud of our contribution to the development program,” said Heath. “We look forward to the opportunity to work with our two long-time friends and industrial partners, only now as a strong three-way team. We also are eager to expand our relations with the HAF and Greek Ministry of National Defense.” Each company has competencies that will provide a good fit for the collaborative effort:

• KAI, the prime contractor and builder of the T-50, has an excellent track record of meeting program milestones in a lean production environment.
• HAI, as Greece’s national aerospace industry, has particular insights into HAF requirements and Greece’s procurement process, and would likely be a key participant in industrial cooperation in a T-50 production program for Greece.
• Lockheed Martin, as the world leader in military aircraft and principal subcontractor for development of the T-50, has expertise in requirements analysis and marketing. In addition, Lockheed Martin has extensive experience in international industrial cooperation and working with the HAF and Greek MND on three F-16 programs.

All three companies are well known for their high-quality production of aircraft components and international industrial cooperation. All have been substantially involved in F-16 production on several occasions going back to the 1980s.

BACKGROUND INFORMATION

The T-50 is the only supersonic trainer in development or production. It has the performance, handling qualities, cockpit and advanced systems necessary to train pilots to fly both today’s advanced fighters and the next generation of combat aircraft. The T-50 Total Training System consists of the aircraft, a comprehensive ground-based training system for aircrew and maintenance personnel, and a modern integrated logistics support system.

The T-50 Golden Eagle is being developed by KAI for the ROKAF. Lockheed Martin is providing technical expertise for the FSD program and is responsible for developing the T-50 avionics system, flight control system and wings. KAI and Lockheed Martin have an agreement for joint international marketing of the T-50. The program entered the transition-to-production phase with initial contract from the ROKAF awarded to KAI in December 2003. The first production aircraft is expected to be delivered in late 2005.

Korea Aerospace Industries Ltd. is the Republic of Korea’s national aerospace company, established in 1999 with the consolidation of Samsung Aerospace, Daewoo Heavy Industries and Hyundai Space and Aircraft Co. KAI lines of business include fixed-wing aircraft, helicopter aircraft and satellites. Its major products are the KF-16, KT-1 basic trainer, T-50, SB427 helicopters, UAVs, aerostructures and KOMPSAT satellite program.

Hellenic Aerospace Industry S.A. is the largest state-owned defense and aerospace industry in Greece and was established in 1975. HAI’s main activities are in manufacturing and support of military and civil aircraft, engines and avionics; in defense electronics, optoelectronics and missile weapon systems; and in satellite communication networks.

Lockheed Martin Aeronautics Co., a business area of Lockheed Martin, is a leader in the design, research and development, systems integration, production and support of advanced military aircraft and related technologies. Its customers include the military services of the United States and allied countries throughout the world. Products include the F-16, F/A-22, F-35 JSF, F-117, C-5, C-130, C-130J, P-3, S-3 and U-2. The company produces major components for the F-2 fighter, and is a co-developer of the C-27J tactical transport and T-50 advanced jet trainer.

Headquartered in Bethesda, Md., Lockheed Martin employs about 130,000 people worldwide and is principally engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services. The corporation reported 2004 sales of $35.5 billion.

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