Exhibit 10.4

Severance Plan for
Elected and Appointed Officers of
Northrop Grumman Corporation
As amended and restated effective July 20, 2012

    

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1.Purpose of Plan. The purpose of the Plan is to provide severance benefits for
eligible elected and appointed officers of Northrop Grumman Corporation who
reside and work in the United States. The terms of this amended and restated
Plan are effective as of July 20, 2012.
2.    Definitions. The terms defined in this section shall have the meaning
given below:
(a)
“Committee” means the Compensation Committee of the Board of Directors of the
Company or any successor to the Committee.

(b)
“Code” means the Internal Revenue Code of 1986, as amended.

(c)
“Company” means Northrop Grumman Corporation.

(d)
“CPC” means the Corporate Policy Council.

(e)
“Disability” means any disability of an Officer recognized as a disability for
purposes of the Company’s long-term disability plan, or similar plan later
adopted by the Company in place of such plan.

(f)
“Key Employee” means an employee treated as a “specified employee” as of his
Separation from Service under Code section 409A(a)(2)(B)(i) of the Company or
its affiliate (i.e., a key employee (as defined in Code section 416(i) without
regard to paragraph (5) thereof)) if the Company’s stock is publicly traded on
an established securities market or otherwise. The Company shall determine in
accordance with a uniform Company policy which Officers are Key Employees as of
each December 31 in accordance with IRS regulations or other guidance under Code
section 409A, provided that in determining the compensation of individuals for
this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(3)
shall be used. Such determination shall be effective for the twelve (12) month
period commencing on April 1 of the following year.

(g)
“Officer” means an elected or appointed officer of Northrop Grumman Corporation,
other than the Company’s Chief Executive Officer, who resides and works in the
United States.

(h)
“Plan” means this Severance Plan for Elected and Appointed Officers of Northrop
Grumman Corporation, as it may be amended from time to time.

(i)
“Qualifying Termination” means any one of the following (i) an Officer’s
involuntary termination of employment with the Company, other than Termination
for Cause or mandatory retirement, or (ii) an Officer’s election to terminate
employment with the Company in lieu of accepting a downgrade to a non-Officer
position or status. “Qualifying Termination” does not include any change in the
Officer’s employment status due to any transfer within the Company or to an
affiliate, or to a purchaser of assets or a portion of the business of the
Company or an affiliate in connection with the purchase, Disability, voluntary
termination or normal retirement.

(j)
“Release” means the Company’s Confidential Separation Agreement and General
Release as in effect at the time of the Officer’s termination of employment.

(k)
“Separation from Service” or “Separate from Service” means a “separation from
service” within the meaning of Code section 409A.

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(l)
“Termination for Cause” means an Officer’s termination of employment with the
Company because of:

(i)
The continued failure by the Officer to devote reasonable time and effort to the
performance of his duties (other than a failure resulting from the Officer’s
incapacity due to physical or mental illness) after written demand for improved
performance has been delivered to the Officer by the Company which specifically
identifies how the Officer has not devoted reasonable time and effort to the
performance of his duties;

(ii)
The willful engaging by Officer in misconduct which is substantially injurious
to the Company, monetarily or otherwise; or

(iii)
The Officer’s conviction for committing an act of fraud, embezzlement, theft, or
other act constituting a felony (other than traffic related offenses or as a
result of vicarious liability).

A Termination for Cause shall not include a termination attributable to:
(i)
Bad judgment or negligence on the part of the Officer other than habitual
negligence; or

(ii)
An act or omission believed by the Officer in good faith to have been in or not
opposed to the best interests of the Company and reasonably believed by the
Officer to be lawful.

3.    Eligibility Requirements.
(a)
Benefits under the Plan are subject to the Company’s sole discretion and
approval.

(b)
To be considered to receive benefits under the Plan an Officer must meet the
following conditions:

(i)
The Officer must experience a Qualifying Termination that results in termination
of employment. If, before termination of employment occurs due to the Qualifying
Termination event, the Officer voluntarily quits, retires, or experiences a
Termination for Cause, the Officer will not receive benefits under this Plan.

(ii)
The Officer must sign the Release. The Company’s current Confidential Separation
Agreement and General Release is attached hereto as Exhibit A, however the
Company may amend and make changes to this agreement at any time (with such
amendments including, without limitation, any amendments that the Company may
determine to be necessary or advisable to help ensure that the agreement is
enforceable to the fullest extent permissible under applicable law at the time
of the Officer’s termination of employment).

4.    Severance Benefits. Upon the Qualifying Termination of any eligible
Officer, the terminated Officer shall be entitled to the following benefits
under the Plan: (a) a lump-sum severance cash payment, (b) an extension of the
Officer’s existing medical and dental coverage, (c) a prorated annual cash bonus
payment, and (d) certain other fringe benefits.
(a)
Lump-sum Cash Severance Payment. The designated Appendix describes the lump sum
severance benefit available to the Officer.

(b)
Extension of Medical and Dental Benefits. The Company will continue to pay its
portion of the Officer’s medical and dental benefits for the period of time
following the Officer’s termination

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date that is specified in the designated Appendix. Such continuation coverage
shall run concurrently with COBRA continuation coverage (or similar state law).
The Officer must continue to pay his portion of the cost of this coverage with
after-tax dollars. If rates for active employees increase during this
continuation period, the contribution amount will increase proportionately.
Also, if medical and dental benefits are modified, terminated or changed in any
way for active employees during this continuation period the Officer will also
be subject to such modification, termination or change. Following the
continuation period specified in the designated Appendix the Officer will be
eligible to receive COBRA benefits for any remaining portion of the applicable
COBRA period (typically 18 months) at normal COBRA rates. The unreimbursed COBRA
period (e.g., the period when the Officer must pay full COBRA rates in order to
receive COBRA benefits) starts the first day of the month following the end of
the continuation period specified in the designated Appendix.
Example: A Non-CPC Officer receives a layoff notice on June 15, 2004, and his
last day of work is June 30, 2004. The Officer’s 18-month COBRA period commences
July 1, 2004. The Officer will continue to receive medical and dental coverage
from July 1, 2004 through June 30, 2005, as long as the Officer continues to pay
the appropriate contribution. Full COBRA rates will apply to the Officer from
July 1, 2005 until the end of the remaining COBRA period on December 31, 2005.
If the Officer is not covered by medical and dental benefits at the time of his
termination, this section 4(b) will not apply and no continuation coverage will
be offered. No health or welfare benefits other than medical and dental will be
continued pursuant to the Plan, including but not limited to disability
benefits.
The medical and dental benefits to be provided or payments to be made under this
section 4(b) shall be reduced to the extent that the Officer is eligible for
benefits or payments for the same occurrence under another employer sponsored
plan to which the Officer is entitled because of his employment subsequent to
the Qualifying Termination.
To the extent the benefits under this section 4(b) are, or ever become, taxable
to the Officer and to the extent the benefits continue beyond the period in
which the Officer would be entitled (or would, but for the Plan, be entitled) to
COBRA continuation coverage if the Officer elected such coverage and paid the
applicable premiums, the Company shall administer such continuation of coverage
consistent with the following additional requirements as set forth in Treas.
Reg. § 1.409A-3(i)(1)(iv):
(i)
Officer’s eligibility for benefits in one year will not affect Officer’s
eligibility for benefits in any other year;

(ii)
Any reimbursement of eligible expenses will be made on or before the last day of
the year following the year in which the expense was incurred; and

(iii)
Officer’s right to benefits is not subject to liquidation or exchange for
another benefit.

In the event the preceding sentence applies and the Officer is a Key Employee,
provision of these benefits after the COBRA period shall commence on the first
day of the seventh month following the Officer’s Separation from Service (or, if
earlier, the first day of the month after the Officer’s death).
(c)
Company Performance Related Payment. The Officer will be eligible for a
severance payment equal to a pro-rata portion of the bonus he or she would have
received under the Company annual incentive plan in which he or she was a
participant for the year in which the Qualifying Termination occurred, in
addition to the lump-sum cash severance payment described in

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section 4(a). For this purpose, the pro-rated bonus (if any) will be based on
the applicable annual incentive plan payout formula, with any applicable
individual performance factor set at 1.00, prorated from the beginning of the
performance period (January 1st) to the Officer’s date of termination. The
severance payment contemplated by this Section 4(c) will be paid when the annual
bonuses are paid to active employees between February 15 and March 15 of the
year following termination. Notwithstanding anything to the contrary in this
section 4(c), if the Officer’s bonus opportunity for the fiscal year in which
his or her termination occurs is covered by the Company’s Incentive Compensation
Plan (or similar successor bonus program designed to comply with the
performance-based compensation exception under Section 162(m) of the Code), then
the Officer’s severance payment pursuant to this section 4(c) shall not exceed
the maximum bonus the Officer would have been entitled to receive under the
Company’s Incentive Compensation Plan for that fiscal year, assuming the Officer
had been employed through the date bonuses are paid under such plan for that
year, and otherwise calculated under the terms of such plan based on actual
performance for that fiscal year (but without giving effect to any discretion of
the plan administrator to reduce the bonus amount from the maximum otherwise
determined in accordance with such plan).
(d)
Other Fringe Benefits. All reimbursements will be within the limits established
in the Executive Perquisite Program. These perquisites will cease as of the date
of termination except for the following:

(i)
Financial Planning. If an Officer is eligible for financial planning
reimbursement at the time of termination, the Officer will be reimbursed for any
financial planning fees as specified in the designated Appendix. For these
purposes, “financial planning reimbursement” includes any income tax preparation
fee reimbursement the Officer may be entitled to under the financial planning
reimbursement terms and conditions applicable to the Officer at the time of
termination. The financial planning (including income tax preparation fee)
reimbursements contemplated by the Appendices are subject to any other
applicable limitations that may apply under the financial planning reimbursement
terms and conditions applicable to the Officer at the time of termination (for
example, and without limitation, annual caps on amounts that may be used in
connection with income tax preparation). All such reimbursements pursuant to
this section 4(d)(i) shall be administered consistent with the following
additional requirements as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv):
(1) Officer’s eligibility for benefits in one year will not affect Officer’s
eligibility for benefits in any other year; (2) any reimbursement of eligible
expenses will be made on or before the last day of the year following the year
in which the expense was incurred; and (3) Officer’s right to benefits is not
subject to liquidation or exchange for another benefit. In addition, no
reimbursements shall be made to an Officer who is a Key Employee for six months
following the Officer’s Separation from Service.

(ii)
Outplacement Service. The Officer will be reimbursed for the cost of reasonable
outplacement services provided by the Company’s outplacement service provider
for services provided within one year after the Officer’s date of termination;
provided, however, that the total reimbursement shall be limited to an amount
equal to fifteen percent (15%) of the Officer’s base salary as of the date of
termination. All services will be subject to the current contract with the
provider, and all such expenses shall be reimbursed as soon as practicable, but
in no event later than the end of the year following the year the Officer
Separates from Service.

(e)
Time and Form of Payment. The severance benefits under section 4(a) will be paid
to the eligible Officer in a lump sum as soon as practicable following the
Officer’s Separation from

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Service, but in no event beyond thirty (30) days from such date, provided the
Officer signs the Release within twenty one (21) days following the Officer’s
Separation from Service. Notwithstanding the foregoing, if the Officer is a Key
Employee, the lump sum payment shall be made on or within thirty (30) days after
the first day of the seventh month following the Officer’s Separation from
Service (or, if earlier, the first day of the month after the Officer’s death),
provided the Officer signs the Release within twenty-one (21) days following the
Officer’s Separation from Service. This amount will be paid after all regular
taxes and withholdings have been deducted. No payment made pursuant to the Plan
is eligible compensation under any of the Company’s benefit plans, including
without limitation, pension, savings, or deferred compensation plans.
5.    Limitation of Plan Benefits. Notwithstanding anything contained in this
Plan to the contrary, if upon or following a change in the “ownership or
effective control” of the Company or in the “ownership of a substantial portion
of the assets” of the Company (each within the meaning of Section 280G of the
Code), the tax imposed by Section 4999 of the Code or any similar or successor
tax (the “Excise Tax”) applies, solely because of such transaction, to any
payments, benefits and/or amounts received by the Officer pursuant to the Plan
or otherwise, including, without limitation, any amounts received, or deemed
received within the meaning of any provision of the Code, by the Officer as a
result of (and not by way of limitation) any automatic vesting, lapse of
restrictions and/or accelerated target or performance achievement provisions, or
otherwise, applicable to outstanding grants or awards to the Officer under any
of the Company’s incentive plans, including without limitation, the 2001
Long-Term Incentive Stock Plan and the 1993 Long Term Incentive Stock Plan
(collectively, the “Total Payments”), then the Total Payments shall be reduced
(but not below zero) so that the maximum amount of the Total Payments (after
reduction) shall be one dollar ($1.00) less than the amount which would cause
the Total Payments to be subject to the Excise Tax; provided that such reduction
to the Total Payments shall be made only if the total after-tax benefit to the
Officer is greater after giving effect to such reduction than if no such
reduction had been made. If such a reduction is required, the Company shall
reduce or eliminate the Total Payments by first reducing or eliminating any cash
severance benefits, then by reducing or eliminating any accelerated vesting of
stock options, then by reducing or eliminating any accelerated vesting of other
equity awards, then by reducing or eliminating any other remaining Total
Payments, in each case in reverse order beginning with the payments which are to
be paid the farthest in time from the date of the transaction triggering the
Excise Tax. The preceding provisions of this section 5 shall take precedence
over the provisions of any other plan, arrangement or agreement governing the
Officer’s rights and entitlements to any benefits or compensation.
6.    Offset for Other Benefits Received. The benefits under the Plan are in
lieu of, and not in addition to, any other severance or separation benefits for
which the Officer is eligible under any Company plan, policy or arrangements
(including but not limited to, severance benefits provided under any employment
agreement, retention incentive agreement, or similar benefits under any
individual change in control agreements, plans, policies, arrangements and
change in control agreements of acquired companies or business units)
(collectively, “severance plans”); provided that if the Officer is otherwise
entitled to receive benefits under the Plan and severance benefits under the
Northrop Grumman Corporation Change-In-Control Severance Plan (version January
2010 or later) and/or a Northrop Grumman Corporation Special Agreement (version
January 2010 or later), benefits shall be paid under such Change-In-Control
Severance Plan and/or Special Agreement rather than under the Plan. If an
Officer receives any benefit under any severance plan, such benefit shall cause
a corresponding reduction in benefits under this Plan. If, despite any release
that the Officer signs in connection with the Plan, such Officer is later
awarded and receives benefits under any other severance plan(s), any benefits
that the Officer receives under the Plan will be treated as having been received
under those other severance plans for purposes of calculating total benefits
received under those other severance plans (that is, benefits under those other
severance plans will be reduced by amounts received under the Plan).

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7.    Administration. The Plan shall be administered by the Chief Human
Resources Officer of the Company (the “administrator”). The administrator has
sole and absolute discretion to interpret the terms of the Plan, eligibility for
benefits, and determine questions of fact. The administrator may delegate any of
his duties or authority to any individual or entity. Authority to hear appeals
has been delegated to the corporate Severance Plan Review Committee.
8.    Claims and Appeals Procedures.
Claims Procedure. If an Officer believes that he or she is entitled to benefits
under the Plan and has not received them, the Officer or his authorized
representative (each, a “claimant”) may file a claim for benefits by writing to
the Chief Human Resources Officer, in care of the Company. The letter must state
the reason why the claimant believes the Officer is entitled to benefits, and
the letter must be received no later than 90 days after the Officer’s
termination of employment, or 90 days after a payment was due, whichever comes
first.
If the claim is denied, in whole or in part, the claimant will receive a written
response within 90 days. This response will include (i) the reason(s) for the
denial, (ii) reference(s) to the specific Plan provisions on which denial is
based, (iii) a description of any additional information necessary to perfect
the claim, and (iv) a description of the Plan’s claims and appeals procedures.
In some cases more than 90 days may be needed to make a decision, in which case
the claimant will be notified prior to the expiration of the 90 days that more
time is needed to review the claim and the date by which the Plan expects to
render the decision. In no event will the extension be for more than an
additional 90 days.
Appeal of Denied Claim. The claimant may appeal a denied claim by filing an
appeal with the corporate Severance Plan Review Committee within 60 days after
the claim is denied. The appeal should be sent to the Severance Plan Review
Committee c/o the Company. As part of the appeal process the claimant will be
given the opportunity to submit written comments and information and be
provided, upon request and free or charge, with copies of documents and other
information relevant to the claim. The review on appeal will take into account
all information submitted on appeal, whether or not it was provided for in the
initial benefit determination. A decision will be made on the appeal within
60 days, unless additional time is needed. If more time is needed, the claimant
will be notified prior to the expiration of the 60 days that up to an additional
60 days is needed and the date by which the Plan expects to render the decision.
If the claim is denied, in whole or in part, on appeal the claimant will receive
a written response which will include (i) the reason(s) for the denial,
(ii) references to the specific Plan provisions on which the denial is based,
(iii) a statement that the claimant is entitled to receive, upon request and
free of charge, copies of all documents and other information relevant to the
claim on appeal, and (iv) a description of the Plan’s claims and appeals
procedures.
If the claim is denied on appeal, the Officer has the right to bring an action
under Section 502(a) of the Employee Retirement Income Security Act of 1974, as
amended. Any claimant must pursue all claims and appeals procedures described in
the Plan document before seeking any other legal recourse with respect to Plan
benefits. In addition, any lawsuit must be filed within six months from the date
of the denied appeal, or two years from the Officer’s termination date,
whichever occurs first.
9.    Amendment. The Company (acting through the Committee) reserves the right
at any time to terminate or amend this Plan in any respect and without the
consent of any Officer.
10.    Unfunded Obligations. All benefits due an Officer or the Officer’s
beneficiary under this Plan are unfunded and unsecured and are payable out of
the general funds of the Company. The Company, in its sole and absolute
discretion, may establish a trust associated with the payment of Plan benefits,
provided that the trust does not alter the characterization of the Plan as an
“unfunded plan” for purposes of the

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Employee Retirement Income Security Act, as amended. Any such trust shall make
distributions in accordance with the terms of the Plan.
11.    Transferability of Benefits. The right to receive payment of any benefits
under this Plan shall not be transferred, assigned or pledged except by
beneficiary designation or by will or under the laws of descent and
distribution.
12.    Taxes. The Company may withhold from any payment due under this Plan any
taxes required to be withheld under applicable federal, state or local tax laws
or regulations.
13.    Gender. The use of masculine pronouns in this Plan shall be deemed to
include both males and females.
14.    Construction, Governing Laws. The Plan is intended as (i) a pension plan
within the meaning of Section 3(2) of the Employee Retirement Income Security
Act, as amended (“ERISA”), and (ii) an unfunded pension plan maintained by the
Company for a select group of management or highly compensated employees within
the meaning of Department of Labor Regulation 2520.104-23 promulgated under
ERISA, and Sections 201, 301, and 401 of ERISA. Nothing in this Plan creates a
vested right to benefits in any employee or any right to be retained in the
employ of the Company. Except to the extent that federal legislation or
applicable regulation shall govern, the validity and construction of the Plan
and each of its provisions shall be subject to and governed by the laws of the
Commonwealth of Virginia.
15.    Severability. If any provision of the Plan is found, held or deemed to be
void, unlawful or unenforceable under any applicable statute or other
controlling law, the remainder of the Plan shall continue in full force and
effect.

IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly
authorized officer on this 20th day of July , 2012.

NORTHROP GRUMMAN CORPORATION

By: _/s/ Christopher McGee__________________
Christopher McGee
Vice President, Compensation & Benefits

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Appendix for Corporate Policy Council (CPC) Officers other than the Chief
Executive Officer
The following benefits shall apply for purposes of eligible Officers (other than
the Company’s Chief Executive Officer) who are members of the CPC:
Section 4(a). Lump-sum Cash Severance Payment. The lump sum cash severance
payment shall equal one and one half (1.5) times the sum of (A) one year’s base
salary as in effect on the effective date of the Officer’s termination, plus (B)
the Officer’s target annual bonus established under the Company’s annual
incentive plan in which he or she was a participant for the fiscal year in which
the date of termination occurs. No supplemental bonuses or other bonuses will be
combined with the Officer’s annual bonus for purposes of this computation.
Section 4(b). Extension of Medical and Dental Benefits. The Company will
continue to pay its portion of the Officer’s medical and dental benefits for
eighteen months following the Officer’s termination date.
Section 4(d)(i). Financial Planning. If the Officer is eligible for financial
planning reimbursement at the time of termination, the Officer will be
reimbursed for any financial planning fees incurred before his termination date.
In addition, the Officer will be reimbursed for the following financial planning
fees incurred after his termination date: (i) any fees incurred in the year in
which the date of termination occurs, provided that the total financial planning
reimbursement for such year (including fees incurred before and after the date
of termination) shall not exceed $15,000 and (ii) any fees incurred in the year
following the year in which the date of termination occurs, provided that the
total financial planning reimbursement for such year shall not exceed $15,000.

    

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Appendix for non-CPC Officers
The following benefits shall apply for purposes of eligible Officers who are not
members of the CPC:
Section 4(a). Lump-sum Cash Severance Payment. The lump sum cash severance
payment shall equal the sum of (A) one year’s base salary as in effect on the
effective date of the Officer’s termination, plus (B) the Officer’s target
annual bonus established under the Company’s annual incentive plan in which he
or she was a participant for the fiscal year in which the date of termination
occurs. No supplemental bonuses or other bonuses will be combined with the
Officer’s annual bonus for purposes of this computation.
Section 4(b). Extension of Medical and Dental Benefits. The Company will
continue to pay its portion of the Officer’s medical and dental benefits for one
year following the Officer’s termination date.
Section 4(d)(i). Financial Planning. If the Officer is eligible for financial
planning reimbursement at the time of termination, the Officer will be
reimbursed for any financial planning fees incurred before his termination date.
In addition, the Officer will be reimbursed for the following financial planning
fees incurred after his termination date: (i) any fees incurred in the year in
which the date of termination occurs, provided that the total financial planning
reimbursement for such year (including fees incurred before and after the date
of termination) shall not exceed $5,000 and (ii) any fees incurred in the year
following the year in which the date of termination occurs, provided that the
total financial planning reimbursement for such year shall not exceed $5,000.

    

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Exhibit A
CONFIDENTIAL SEPARATION AGREEMENT
AND GENERAL RELEASE
1.0
PARTIES: The parties to this Confidential Separation Agreement and General
Release (“Agreement”) are John Doe (“Mr. Doe”) and NORTHROP GRUMMAN CORPORATION
(“Northrop Grumman” or “the Company”).

2.0
RECITALS: This Agreement is made regarding the following facts:

2.1
Mr. Doe is currently an appointed officer of Northrop Grumman.

2.2
In connection with his separation from employment with the Company, Mr. Doe has
been offered severance benefits under the Company’s Severance Plan for Elected
and Appointed Officers (the “Severance Plan”).

2.3
The Severance Plan requires that, to receive such benefits, an officer must sign
a Confidential Separation Agreement and General Release. This Agreement
satisfies this requirement.

2.4
Mr. Doe has decided to accept the Company’s offer of severance benefits and to
enter into this Agreement.

3.0
CONSIDERATION: In exchange for Mr. Doe’s promise to abide by all of the terms of
this Agreement, the Company agrees to provide Mr. Doe the severance benefits
specified in section 4 of the Severance Plan in accordance with the terms of the
Severance Plan, which severance benefits include:

3.1
Lump-sum Cash Severance. A payment equal to the sum of $_________, less
applicable withholding. This amount represents the total of [one] times the sum
of (i) Mr. Doe’s annual base salary of $________; and (ii) Mr. Doe’s target
annual bonus of $________ under the Company’s annual incentive plan in which Mr.
Doe was a participant. This amount will be paid to Mr. Doe in a lump sum in
accordance with the terms of the Severance Plan.

3.2
Pro Rata Bonus. A severance payment equal to a pro rata portion of the bonus Mr.
Doe would have received for the ____ performance year pursuant to the terms of
the Company’s annual incentive plan in which Mr. Doe was a participant, in
addition to the lump-sum cash severance payment described in Section 3.1. The
bonus will be pro rated from the beginning of the performance period (January 1)
to Mr. Doe’s Separation Date. For purposes of this severance payment, the pro
rata bonus will

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be based on the applicable annual incentive plan payout formula, with any
Individual Performance Factor (IPF) for Mr. Doe set at 1.00. If Mr. Doe is
covered by the Incentive Compensation Plan (ICP), this severance payment will
not exceed the maximum bonus Mr. Doe would have earned under the ICP had he
remained employed. This severance payment will be paid when annual bonuses are
paid to active employees between February 15 and March 15, _____.
[Alternative Section 3.2 if termination occurs at year end: Mr. Doe will be paid
a bonus for calendar year _____ pursuant to the terms of the Annual Incentive
Plan (and not the Severance Plan), which will be based on the applicable
incentive plan payout formula, with the Individual Performance Factor for Mr.
Doe set at no less than 1.0. This bonus will be paid to Mr. Doe when annual
bonuses are paid to employees between February 15 and March 15, _____.]
3.3
Medical and Dental Coverage Continuation. Mr. Doe may elect to continue his
medical and dental coverage in effect as of the Separation Date (as defined in
Section 4.0 below) for [twelve] months, provided he pays his portion of the cost
of such coverage with after-tax dollars. The Company will continue to pay its
portion of the cost of Mr. Doe’s medical and dental benefits for the [twelve]
month continuation period. If rates for active employees increase during this
continuation period, Mr. Doe’s contribution will increase proportionately. Also,
if medical and dental benefits are modified or terminated for active employees
during this continuation period, Mr. Doe’s benefits shall be subject to this
modification or termination. Mr. Doe’s medical and dental benefits shall be
reduced to the extent Mr. Doe is eligible for benefits or payments for the same
occurrence under another employer-sponsored plan to which Mr. Doe is entitled
because of his employment after the Separation Date. This continuation coverage
shall run concurrently with coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) (or similar state law coverage) and shall be
in lieu of such coverage. Following the continuation period, Mr. Doe shall be
eligible to receive COBRA benefits for any remaining portion of the applicable
COBRA period at normal COBRA rates.

3.4
Other Fringe Benefits. Pursuant to the terms of the Executive Perquisite Program
for appointed officers (the “Program”), Mr. Doe will be reimbursed for any
eligible financial planning fees incurred during [year of Separation Date]
(regardless of whether such fees are incurred before or after the Separation
Date) and the immediately following year, subject to a maximum reimbursement for
each year equal to [$5,000]. Mr. Doe will be reimbursed for the cost of
reasonable outplacement services from the Company’s outplacement service
provider during the one year

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period following his Separation Date; provided, however that the total
outplacement services reimbursement shall be no greater than $_______. All
outplacement services will be subject to the Company’s current contract with the
provider. The reimbursements provided for in this Section 3.4 are subject to the
terms and conditions of, and will be reimbursed to Mr. Doe within the applicable
time periods specified in, the Severance Plan. Except as provided in this
Section 3.4, all perquisites shall cease as of the Separation Date.
3.5
Not Pension Eligible Compensation. [If alternative Section 3.2 is used: Except
for the bonus provided in Section 3.2,] None of the consideration or payments
made pursuant to the Severance Plan and specified in this Agreement shall be
eligible as compensation under any Company retirement, pension or benefit plan.

4.0
SEPARATION FROM EMPLOYMENT: Mr. Doe’s employment will be terminated by the
Company effective __________. This shall be his Separation Date.

5.0
COMPLETE RELEASE: In exchange for the consideration described in Section 3,
Mr. Doe RELEASES the Company from liability for any claims, demands or causes of
action (except as described in Section 5.5). This Release applies not only to
the “Company” itself, but also to all Northrop Grumman subsidiaries, affiliates,
related companies, predecessors, successors, its or their employee benefit
plans, trustees, fiduciaries and administrators, and any and all of its and
their respective past or present officers, directors, agents and employees
(“Released Parties”). For purposes of this Release, the term “Mr. Doe” includes
not only Mr. Doe himself, but also his heirs, spouses or former spouses,
domestic partners or former domestic partners, executors and agents. Except as
described in Section 5.5, this Release extinguishes all of Mr. Doe’s claims,
demands or causes of action, known or unknown, against the Company and the
Released Parties, based on anything occurring on or before the date Mr. Doe
signs this Agreement.

5.1
This Release includes, but is not limited to, claims relating to Mr. Doe’s
employment or termination of employment by the Company and any Released Party,
any rights of continued employment, reinstatement or reemployment by the Company
and any Released Party, claims relating to or arising under Company or Released
Party dispute resolution procedures, claims for any costs or attorneys’ fees
incurred by Mr. Doe, and claims for severance benefits other than those listed
herein. Mr. Doe acknowledges and agrees that payment to him of the benefits set
forth in this Agreement will fully satisfy any rights he may have for benefits
under any severance plan of any of the Released Parties.

5.2
This Release includes, but is not limited to, claims arising under the Age
Discrimination in Employment Act, the Family and Medical Leave Act,

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the Employee Retirement Income Security Act, the False Claims Act, Executive
Order No. 11246, the Civil Rights Act of 1991, and 42 U.S.C. § 1981. It also
includes, but is not limited to, claims under Title VII of the Civil Rights Act
of 1964, which prohibits discrimination in employment based on race, color,
religion, sex or national origin, and retaliation; the Americans with
Disabilities Act, which prohibits discrimination in employment based on
disability, and retaliation; any laws prohibiting discrimination in employment
based on veteran status; any applicable state human rights statutes including
the [insert applicable state law, such as: California Fair Employment and
Housing Act, which prohibits discrimination in employment based on race,
religious creed, color, national origin, ancestry, physical disability, mental
disability, medical condition, marital status, sex, age, or sexual orientation];
and any other federal, state or local laws, ordinances, regulations and common
law, to the fullest extent permitted by law.
5.3
This Release also includes, but is not limited to, any rights, claims, causes of
action, demands, damages or costs arising under or in relation to the personnel
policies or employee handbooks of the Company and any Released Party, or any
oral or written representations or statements made by the Company and any
Released Party, past and present, or any claim for wrongful discharge, breach of
contract (including any employment agreement), breach of the implied covenant of
good faith and fair dealing, intentional or negligent infliction of emotional
distress, intentional or negligent misrepresentation, or defamation.

5.4
[California version:]

Mr. Doe waives and gives up all rights he may have under Section 1542 of the
California Civil code, which provides as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.
Notwithstanding the provisions of Section 1542, Mr. Doe agrees that his Release
includes claims which he did not know of or suspect to exist at the time he
signed this Agreement, and that this Release extinguishes all known and unknown
claims.
[Alternative outside CA:]
[This Release includes both known and unknown claims. Mr. Doe agrees that this
Release includes claims he did not know or suspect to exist at

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the time he signed this Agreement, and that this Release extinguishes all known
and unknown claims.]
5.5
However, this Release does not include any rights Mr. Doe may have: (1) to
enforce this Agreement and his rights to receive the benefits described in
Section 3 of this Agreement; (2) to any indemnification rights Mr. Doe may have
for expenses or losses incurred in the course and scope of his employment;
(3) to test the knowing and voluntary nature of this Agreement under The Older
Workers Benefit Protection Act; (4) to workers’ compensation benefits; (5) to
earned, banked or accrued but unused vacation pay; (6) to rights under minimum
wage and overtime laws; (7) to vested benefits under any pension or savings
plan; (8) to continued benefits in accordance with COBRA; (9) to
government-provided unemployment insurance; (10) to file a claim or charge with
any government administrative agency (although Mr. Doe is releasing any rights
he may have to recover damages or other relief in connection with the filing of
such a claim or charge); (11) to claims that cannot lawfully be released;
(12) to any rights Mr. Doe may have for retiree medical coverage; (13) to any
rights Mr. Doe may have with respect to his existing equity grants under the
Company’s Long Term Incentive Stock Plan; or (14) to claims arising after the
date Mr. Doe signs this Agreement.

6.0
ARBITRATION: If either the Company or Mr. Doe decides to sue the other over the
enforceability of this Agreement, or for violating this Agreement, all such
claims will be determined through final and binding arbitration, rather than
through litigation in court, in accordance with Northrop Grumman Corporate
Procedure H103A. If the Company or Mr. Doe wants immediate relief, before the
arbitration is finished, then either party may go to a court with jurisdiction
over the dispute, and ask the court for provisional injunctive or other
equitable relief until the arbitrator has issued an award or the dispute is
otherwise resolved. Any court with jurisdiction over the dispute may enter
judgment on the arbitrator’s award. Notwithstanding the provisions of H103A, the
Company and Mr. Doe agree that the prevailing party in the arbitration shall be
entitled to receive from the losing party reasonably incurred attorneys’ fees
and costs incurred in enforcing this Agreement, except in any challenge by
Mr. Doe to the validity of this Agreement under the Age Discrimination in
Employment Act and/or Older Workers Benefit Protection Act.

7.0
CONFIDENTIALITY:

7.1
Mr. Doe agrees that he will keep the terms and fact of the Agreement completely
confidential, and that he will not disclose any specific information regarding
the terms and conditions of the Agreement to anyone other than his spouse,
domestic partner, attorney, or accountant, except as necessary to enforce the
Agreement, to comply with the law

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or lawful discovery, in response to a court order, or for tax or accounting
purposes.
7.2
Should Mr. Doe choose to disclose the terms or fact of this Agreement to his
spouse, domestic partner, attorney, or accountant, Mr. Doe agrees that he will
advise them that they will also be under an obligation to keep the terms and
fact of this Agreement completely confidential.

7.3
Despite this confidentiality obligation, Mr. Doe, his legal counsel, his spouse
or domestic partner, and his accountant are permitted to: (1) disclose the terms
or the fact of this Agreement when required to do so by law, by any court or
administrative agency (including state or federal taxing authorities), and by
any tribunal of appropriate jurisdiction; and (2) provide truthful testimony
about Mr. Doe’s employment with the Company or the Company’s business activities
to any government or regulatory agency, or in any court proceeding.

8.0
RETURN OF COMPANY PROPERTY: Mr. Doe agrees to return any and all property and
equipment of the Company and any Released Party that he may have in his
possession no later than the Separation Date, except to the extent this
Agreement explicitly provides to the contrary.

9.0
FULL DISCLOSURE: Mr. Doe acknowledges that he is not aware of, or has fully
disclosed to the Company any matters for which he was responsible or came to his
attention as an employee, which might give rise to any claim or cause of action
against the Company and any Released Party. Mr. Doe has reported to the Company
all work-related injuries, if any, that he has suffered or sustained during his
employment with the Company and any Released Party. Mr. Doe has properly
reported all hours he worked.

10.0
NO UNRESOLVED CLAIMS: This Agreement has been entered into with the
understanding that there are no unresolved claims of any nature which Mr. Doe
has against the Company. Mr. Doe acknowledges and agrees that except as
specified in Section 3, all compensation, benefits, and other obligations due
Mr. Doe by the Company, whether by contract or by law, have been paid or
otherwise satisfied in full.

11.0
WITHHOLDING OF TAXES: The Company shall be entitled to withhold from any amounts
payable or pursuant to this Agreement all taxes as legally shall be required
(including, without limitation, United States federal taxes, and any other
state, city or local taxes).

12.0
ADVICE OF COUNSEL; PERIOD FOR REVIEW AND CONSIDERATION OF AGREEMENT: The Company
encourages Mr. Doe to seek and receive advice about this Agreement from an
attorney of his choosing. Mr. Doe has twenty-one (21) calendar days
[Alternative: forty-five (45) calendar days. Note: If this

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alternative is used, add attachments re program eligibility factors, selection
information, and job titles and ages of employees selected/not selected] from
his initial receipt of this Agreement to review and consider it. Mr. Doe
understands that he may use as much of this review period as he wishes before
signing this Agreement. If Mr. Doe has executed this Agreement before the end of
such review period, he represents and agrees that he does so voluntarily and of
his own free will.
13.0
RIGHT TO REVOKE AGREEMENT: Mr. Doe may revoke this Agreement within seven (7)
calendar days of his signature date. To do so, Mr. Doe must deliver a written
revocation notice to [fill in name, title and address.] Mr. Doe must deliver the
notice to [name] no later than 4:30 p.m. [PT] on the seventh calendar day after
Mr. Doe’s signature date. If Mr. Doe revokes this Agreement, it shall not be
effective or enforceable, and Mr. Doe will not receive the benefits described in
Section 3 of this Agreement.

14.0
DENIAL OF WRONGDOING: Neither party, by signing this Agreement, admits any
wrongdoing or liability to the other. Both the Company and Mr. Doe deny any such
wrongdoing or liability.

15.0
COOPERATION: Mr. Doe agrees that, for at least two (2) years following the
Separation Date, he will reasonably cooperate with Company and any Released
Party regarding requests for assistance by serving as a witness or providing
information about matters connected with Mr. Doe’s prior employment with the
Company or any Released Party. The Company or the Released Party requesting
assistance shall reimburse Mr. Doe for any travel costs he incurs in connection
with his cooperation, in accordance with its travel cost reimbursement policy
for active employees.

16.0
NON-SOLICITATION AND NON-DISPARAGEMENT:

16.1
By Mr. Doe: For a period of one year following the Separation Date, Mr. Doe
shall not, directly or indirectly, through aid, assistance, or counsel, on his
own behalf or on behalf of another person or entity (i) solicit or offer to hire
[Alternative outside CA: , or hire,] any person who was within a period of six
months prior to the Separation Date employed by the Company, or (ii) by any
means issue or communicate any public statement that may be critical or
disparaging of the Company, its products, services, officers, directors, or
employees; provided that the foregoing shall not apply to any truthful
statements made in compliance with legal process or governmental inquiry.

16.2
By the Company: For a period of one year following the Separation Date, the
Company shall not by any means issue or communicate any public statement that
may be critical or disparaging of Mr. Doe, provided that the foregoing shall not
apply to truthful statements made in

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compliance with legal process, governmental inquiry, or as required by legal
filing or disclosure requirements.
17.0
SEVERABILITY: The provisions of this Agreement are severable. If any part of
this Agreement, other than Section 5, is found to be illegal or invalid and
thereby unenforceable, then the unenforceable part shall be removed, and the
rest of the Agreement shall remain valid and enforceable.

18.0
SOLE AND ENTIRE AGREEMENT: This Agreement, together with relevant provision of
the Severance Plan, expresses the entire understanding between the Company and
Mr. Doe on the matters it covers. It supersedes all prior discussions,
agreements, understandings and negotiations between the parties on these
matters, except that any writing between the Company and Mr. Doe relating to
protection of Company trade secrets or intellectual property shall remain in
effect.

19.0
MODIFICATION: Once this Agreement takes effect, it may not be cancelled or
changed, unless done so in a document signed by both Mr. Doe and an authorized
Company representative.

20.0
GOVERNING LAW: This Agreement shall be interpreted and enforced in accordance
with the laws of [Virginia], without regard to rules regarding conflicts of law.

21.0 ADVICE OF COUNSEL; VOLUNTARY AGREEMENT:
MR. DOE ACKNOWLEDGES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS, CONFER
WITH COUNSEL, AND CONSIDER ALL OF THE PROVISIONS OF THIS AGREEMENT BEFORE
SIGNING IT. HE FURTHER AGREES THAT HE HAS READ THIS AGREEMENT CAREFULLY, THAT HE
UNDERSTANDS IT, AND THAT HE IS VOLUNTARILY ENTERING INTO IT. MR. DOE UNDERSTANDS
AND ACKNOWLEDGES THAT THIS AGREEMENT CONTAINS HIS RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

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Date:             By:     
    

Date:             By:     
Northrop Grumman Corporation

Title:        

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