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Exhibit 10.6

 

Notice of Grant of Restricted Performance Stock Rights
and Rights Agreement Northrop Grumman Corporation
1840 Century Park East
Los Angeles, CA 90067  

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Kent Kresa
[Address]

     

Pursuant to the terms and conditions of the company’s 54 2001 Performance Plan
(the “Plan”), you have been granted Restricted Performance Stock Rights (the
“Rights”) in the amount of 45,000 shares of stock as outlined below.

 

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Granted To:   Kent Kresa         [Social Security Number]     Grant Date:  
August 15, 2001     Target RPSR’s Granted:   45,000     Performance Period:  
January 1, 2002 – December 31, 2004     Vesting Schedule:   Special Vesting    
    45,000 on 12/31/2004                                  

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This page and the attached Terms and Conditions together constitute the Rights
Agreement. By your signature and the Company’s signature below, you and the
Company agree that these Rights are granted under and governed by the terms of
the Company’s 2001 Long-Term Incentive Stock Plan and the Rights Agreement.    
 

NORTHROP GRUMMAN CORPORATION       By:   By:

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      Signature:       Date:

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Kent Kresa            

 

 

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NORTHROP GRUMMAN CORPORATION

2001 LONG-TERM INCENTIVE STOCK PLAN

RESTRICTED PERFORMANCE STOCK RIGHTS

TERMS AND CONDITIONS

               This grant of Restricted Performance Stock Rights (“RPSRs”) was
granted on August 15, 2001 (the “Date of Grant”) by Northrop Grumman Corporation
(the “Company”) to Kent Kresa (the “Grantee”).

1.   The performance period with respect to this award shall commence January 1,
2002 and shall end December 31, 2004 (the “Performance Period”). The RPSRs
subject to this grant shall be paid at the conclusion of the Performance Period,
provided that the Grantee has remained in the continuous employment of the
Company or one of its subsidiaries through the last day of the Performance
Period, and subject to the terms and performance conditions stated herein, in
the Northrop Grumman 2001 Long–Term Incentive Stock Plan, as amended from time
to time (the “Plan”), and any rules or guides to administration adopted by the
Company’s Compensation and Management Development Committee or any successor
committee appointed by the Company’s Board of Directors to administer the Plan
(the “Committee”) in effect from time to time, including, without limitation,
the Plan’s 2001 Guide to Administration (the “Guide”). Without limiting the
generality of the foregoing, the RPSRs are subject to the earnout provisions set
forth in the Guide. In accordance with the Guide, Dividend Equivalents (as
defined in the Guide) will be paid on and at the same time as any RPSRs that are
paid. RPSRs that become payable will be paid by delivery of an equivalent number
of shares of Company Common Stock or, in the discretion of the Committee, in
cash. Dividend Equivalents that become payable will be paid in cash or, in the
discretion of the Committee, shares of Company Common Stock.       2.  

Except as expressly provided below if the Grantee Retires while employed by the
Company or a subsidiary, this grant of RPSRs and related Dividend Equivalents is
subject to termination in accordance with the provisions of the Guide if the
Grantee ceases to be an employee of the Company and its subsidiaries. The number
of RPSRs (and related Dividend Equivalents) subject hereto that would otherwise
be paid if the Grantee had remained employed by the Company or a subsidiary
through the entire Performance Period will be pro-rated in accordance with the
Guide if the Grantee dies or becomes Disabled (as defined below) while employed
by the Company or a subsidiary and after completing at least twelve consecutive
calendar months of employment with the Company or a subsidiary during the
three-year Performance Period. Notwithstanding any retirement provisions set
forth in the Guide to the contrary, if the Grantee Retires (as defined below)
while employed by the Company or a subsidiary, there will be no pro ration of
the target number of RPSRs subject to this grant (that is, 100% of the target
number of RPSRs initially subject to this grant shall remain subject to this
grant) and payment of the RPSRs subject to this grant (and related Dividend
Equivalents) will be made at the same time and on the same performance basis as
if the Grantee had not Retired. For purposes of this instrument, “Disabled”
means disabled pursuant to the provisions of the Company’s (or one of its
subsidiary’s) Long Term Disability Plan applicable to the Grantee; or, if the
Grantee is not covered by such a Long Term Disability Plan, the incapacity of
the Grantee, due to injury, illness, disease, or bodily or mental infirmity, to
engage in the performance of substantially all of the usual duties of employment
with the Company or the subsidiary which employs the Grantee, such disability to
be determined by the Committee upon receipt and in reliance on competent medical
advice from one or more individuals, selected by the Committee, who are
qualified to give such professional medical advice. For purposes of this
instrument, “Retire” means that the Grantee terminates employment after
attaining age 55 with at least 10 years of service (other than in connection
with a termination by the Company or a subsidiary for cause).

 

 

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3.   The Company or the subsidiary which employs the Grantee shall be entitled
to require, as a condition to any payment of the RPSRs and Dividend Equivalents,
that the Grantee pay any sums required to be withheld by federal, state or local
tax law with respect to such payment. Alternatively, the Company or such
subsidiary, in its discretion, may make such provisions for the withholding of
taxes as it deems appropriate.       4.   Other than by will or the laws of
descent and distribution, the RPSRs and Dividend Equivalents subject to this
instrument may not be sold, assigned, transferred, pledged or otherwise disposed
of or encumbered, either voluntarily or involuntarily.       5.   Payments and
the issuance of shares with respect hereto are subject to full compliance with
all then applicable requirements of law, the Securities and Exchange Commission,
the Commissioner of Corporations of the State of California, or other regulatory
agencies having jurisdiction over the Company and its shares, and of any
exchange upon which stock of the Company may be listed. The Grantee shall not
have the rights and privileges of a stockholder with respect to any shares which
may be issued in respect of the RPSRs and/or Dividend Equivalents until the date
appearing on the certificate(s) for such shares, if such shares become issuable.
      6.   The RPSRs, Dividend Equivalents, and the shares subject to this grant
are subject to adjustment upon the occurrence of events such as stock splits,
stock dividends and other changes in capitalization in accordance with Section 6
of the Plan. In the event of any adjustment, the Company will give the Grantee
written notice thereof which will set forth the nature of the adjustment. Except
as set forth below in this paragraph 6, the Grantee’s rights with respect to the
RPSRs and Dividend Equivalents in the event of a Change in Control (as defined
in the Plan) shall be determined under the Guide. Subject to the exceptions set
forth in Section X of the Guide, if, within the Protected Period (as defined in
the Guide) corresponding to a Change in Control of the Company, the Grantee’s
employment by the Company and its subsidiaries is involuntarily terminated by
the Company and its subsidiaries for reasons other than Cause (as defined in the
Section X of the Guide) or by the Grantee for Good Reason (as defined in Section
X of the Guide) and the Grantee was not otherwise entitled to a pro-rated
payment with respect to the RPSRs as referenced in paragraph 2 hereof, then upon
the Change in Control the Grantee will be eligible for a prorated portion of the
RPSRs (and Dividend Equivalents with respect thereto) in accordance with Section
VI.K.2 of the Guide.       7.   Vesting in the RPSRs and Dividend Equivalents
subject to this instrument requires continued employment through the last day of
the Performance Period. Unless otherwise expressly provided in paragraph 2 or
paragraph 6 hereof, employment for only a portion of the Performance Period,
even if substantial, will not entitle the Grantee to any proportionate vesting
or avoid or mitigate a termination of rights and benefits upon or following a
termination of employment. Subject to the leave of absence provisions of the
Guide, the term “employment” as used herein means active employment by the
Company or one of its subsidiaries and salary continuation without active
employment will not, in and of itself, constitute “employment” for purposes
hereof (in the case of salary continuation without active employment, the
participant’s cessation of active employee status shall be deemed to be a
termination of “employment” for purposes hereof). Nothing contained in this
instrument, the Plan, or the Guide constitutes an employment commitment by the
Company or any subsidiary, affects the Grantee’s status (if the Grantee is
otherwise an at-will employee) as an employee at will who is subject to
termination without cause, confers upon the Grantee any right to continue in the
employ of the Company or any subsidiary, or interferes in any way with the right
of the Company or of any subsidiary to terminate such employment at any time.  
    8.  

The Committee has the discretionary authority to determine any questions as to
the date when the Grantee’s employment terminated and the cause of such
termination and to interpret any provision of this instrument, the Plan, the
Guide, and any other applicable rules or guides to administration. Any action
taken by, or inaction of, the Committee relating to or pursuant to this
instrument, the Plan, the Guide, or any other applicable rules or guides to
administration shall be within the absolute discretion of the Committee and
shall be conclusive and binding on all persons.

 

 

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9. This grant of RPSRs and related Dividend Equivalents was made under the Plan.
The RPSRs and related Dividend Equivalents are governed by, and the Grantee’s
rights are subject to, all of the terms and conditions of the Plan, the Guide
(except as expressly provided in paragraph 2 hereof), and any other rules or
regulations adopted by the Committee, as the foregoing may be amended from time
to time. The Grantee shall have no rights with respect to any amendment of this
instrument, the Plan or the Guide unless such amendment is in writing and signed
by a duly authorized officer of the Company.

               IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed by its Chief Financial Officer or Chief Human Resources and
Administrative Officer and its Corporate Secretary effective as of the Date of
Grant stated above.

    NORTHROP GRUMMAN CORPORATION           By
_____________________________________           By
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