Exhibit 10(ff)

 

NORTHROP GRUMMAN

 

ELECTRONIC SYSTEMS EXECUTIVE PENSION PLAN

 

(Amended and Restated Effective as of October 1, 2004)

 

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TABLE OF CONTENTS

 

ARTICLE 1—Introduction

   2

Section 1.01. Introduction

   2

Section 1.02. Effective Date

   2

Section 1.03. Sponsor

   2

Section 1.04. Predecessor Plan

   2

Section 1.05. 2001 Reorganization

   2

ARTICLE 2—Definitions

   3

Section 2.01. Affiliated Companies

   3

Section 2.02. Annual Incentive Programs

   3

Section 2.03. Average Annual Compensation

   3

Section 2.04. Board

   3

Section 2.05. Code

   3

Section 2.06. Committee

   3

Section 2.07. Company

   3

Section 2.08. Defined Contribution Plan

   3

Section 2.09. Designated Entity

   3

Section 2.10. ERISA

   3

Section 2.11. ES Pension Plan

   3

Section 2.12. Executive

   4

Section 2.13. Executive Benefit Service

   4

Section 2.14. Executive Pension Base

   4

Section 2.15. Executive Pension Supplement

   4

Section 2.16. Maximum Contribution

   4

Section 2.17. Participating Company

   5

Section 2.18. Plan

   5

Section 2.19. Qualified Plan Benefit

   5

Section 2.20. Retirement Eligible

   6

Section 2.21. Westinghouse

   6

Section 2.22. Westinghouse Acquisition

   6

Section 2.23. Westinghouse Plan

   6

ARTICLE 3—Qualification for Benefits; Mandatory Retirement

   7

Section 3.01. Qualification for Benefits

   7

Section 3.02. Mandatory Retirement

   7

Section 3.03. Certain Transfers

   7

ARTICLE 4—Calculation of Executive Pension Supplement

   9

Section 4.01. In General

   9

Section 4.02. Amount

   9

ARTICLE 5—Death in Active Service

   10

Section 5.01. Eligibility For an Immediate Benefit

   10

Section 5.02. Calculation of Immediate Benefit

   10

 

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Section 5.03. Eligibility For a Deferred Benefit

   10

Section 5.04. Calculation of Deferred Benefit

   10

ARTICLE 6—Executive Pension Base

   11

Section 6.01. In General

   11

Section 6.02. Executive Pension Base

   11

Section 6.03. Average Annual Compensation

   11

Section 6.04. Annual Incentive Programs

   12

Section 6.05. Executive Benefit Service

   12

ARTICLE 7—Payment of Benefits

   13

Section 7.01. Limitation on Benefits

   13

Section 7.02. Normal Form and Commencement of Benefits

   13

Section 7.03. Guaranteed Benefit

   13

Section 7.04. Guaranteed Surviving Spouse Benefit

   13

Section 7.05. Lump Sum Payments

   13

Section 7.06. Rehires

   14

ARTICLE 8—Conditions to Receipt of Executive Pension Supplement

   15

Section 8.01. Non-Competition Condition

   15

Section 8.02. Breach of Condition

   15

Section 8.03. Waiver After 65

   15

ARTICLE 9—Administration

   16

Section 9.01. Committee

   16

Section 9.02. Claims Procedures

   16

Section 9.03. Trust

   16

ARTICLE 10—Modification or Termination

   17

Section 10.01. Amendment, Suspension and Termination

   17

Section 10.02. Effective Date of Changes, Terminations and Suspensions

   17

Section 10.03. Limitations on Changes and Terminations

   17

ARTICLE 11—Miscellaneous

   18

Section 11.01. Benefits Not Assignable

   18

Section 11.02. Facility of Payment

   18

Section 11.03. Committee Rules

   18

Section 11.04. Limitation on Rights

   18

Section 11.05. Benefits Unsecured

   18

Section 11.06. Governing Law

   18

Section 11.07. Severability

   18

Section 11.08. Expanded Benefits

   19

Section 11.09. Plan Costs

   19

Section 11.10. Termination of Participation

   19

ARTICLE 12—Change in Control

   20

Section 12.01. Definition

   20

 

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Section 12.02. Vesting and Funding Rules

   21

Section 12.03. Special Retirement Provisions

   21

Section 12.04. Calculation of Present Value

   21

Section 12.05. Calculation of Offset

   22

Section 12.06. Limitation on Amendment, Suspension and Termination

   22

APPENDIX A—Executive Buyback

   23

Section A.01. Introduction

   23

Section A.02. Buy Back Offer

   23

Section A.03. One-Time Opportunity

   23

Section A.04. Payment

   23

Section A.05. Refund of Buy Back Payment

   23

Section A.06. Effective Date

   24

APPENDIX B—Rehired Executives

   25

Section B.01. Retired Executives Rehired as Executives

   25

Section B.02. Former Executives with Vested Pensions Rehired as Executives

   26

Section B.03. Retired Executives Rehired in Non-Executive Positions

   26

Section B.04. Events That Span Westinghouse Acquisition

   27

Section B.05. Breaks Spanning March 1, 1996

   27

APPENDIX C—Coordination With Westinghouse Plan

   28

Section C.01. In General

   28

Section C.02. Pre-Acquisition Benefits

   28

Section C.03. Coordination of Pre and Post-Acquisition Benefits

   28

Section C.04. No Duplication of Benefits

   28

 

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NORTHRUP GRUMMAN

 

ELECTRONIC SYSTEMS EXECUTIVE PENSION PLAN

 

(Amended and Restated Effective as of October 1, 2004)

 

The Northrop Grumman Electronic Systems Executive Pension Plan (the “Plan”) is
hereby amended and restated effective as of October 1, 2004. This restatement is
intended solely to incorporate into the Plan document previously adopted
amendments to the Plan and is not intended to make substantive changes to the
Plan.

 

The Plan became effective on March 1, 1996. The Plan was amended in December
1996 to expand the definition of Average Annual Compensation to include periods
of service outside of the Electronic Sensors & Systems Division for participants
who transfer out of the Division. In 1998, the Plan was amended to make changes
necessary to reflect to the conversion to pay based on salary bands at the
Electronic Sensors & Systems Division and to permit certain service at
Affiliated Companies to count for purposes of eligibility under this Plan. A
subsequent 1998 amendment modified, effective March 1, 1996, the funding
requirements and amendment procedures applicable to the Plan in the event of a
change in control. Rules regarding the effect of certain transfers of employment
were adopted November 18, 1998, to be effective March 1, 1996.

 

In December 1999, the Plan was amended to reflect the August 24, 1998 change in
the name of the ESS business from Division to Sector, to clarify that, effective
August 1, 1996, lump-sum payments may be made to executives who elect lump sum
payments of all nonqualified benefits under the CIC plans, and to clarify the
mechanisms for certain buy-backs and contributions by executives of designated
entities. In March 2001, the Plan was amended to account for the acquisition of
Litton Industries, Inc. and the associated corporate reorganization.

 

The Plan was further amended to include the Northrop Grumman Incentive
Compensation Plan and the Incentive Management Achievement Plan for purposes of
determining the portion of a participant’s benefit attributable to amounts
received under Annual Incentive Programs sponsored by Northrop Grumman
Corporation, effective January 1, 2001. Effective July 1, 2003, the Plan was
amended to expand the definition of Qualified Plan Benefit to include benefit
amounts earned under a restoration plan for the Qualified Plan. Finally, the
Plan was amended effective July 1, 2003 to freeze participation in the Plan,
limiting participation to employees who are currently participating and permit
those participants whose employment is transferred to eligible positions within
the Northrop Grumman Corporation controlled group to continue participating in
the Plan.

 

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ARTICLE 1

 

Introduction

 

Section 1.01. Introduction. The Northrop Grumman Electronic Systems Executive
Pension Plan is a supplemental pension plan that provides nonqualified deferred
compensation for a select group of management or highly compensated employees.

 

Section 1.02. Effective Date. The Plan is effective October 1, 2004.

 

Section 1.03. Sponsor. The Plan sponsor is Northrop Grumman Corporation.

 

Section 1.04. Predecessor Plan. The Plan was established as a successor to the
Westinghouse Executive Pension Plan, maintained by Westinghouse Electric
Corporation (“Westinghouse”) for the benefit of certain executive employees of
the Westinghouse Electronic Systems Group as of February 29, 1996 who became
employees of the Northrop Grumman Electronic Sensors & Systems Division as of
March 1, 1996 as a result of the Westinghouse Acquisition, and certain other
executive employees who may become employed by the Northrop Grumman Electronic
Sensors & Systems Division on or after March 1, 1996. The Northrop Grumman
Electronic Sensors & Systems Division became the Northrop Grumman Electronic
Sensors & Systems Sector effective August 24, 1998.

 

Section 1.05. 2001 Reorganization. Effective as of the 2001 Reorganization Date
in (d), the corporate structure of Northrop Grumman Corporation and its
affiliates was modified. Effective as of the Litton Acquisition Date in (e),
Litton Industries, Inc. was acquired and became a subsidiary of the Northrop
Grumman Corporation (the “Litton Acquisition”).

 

(a) The former Northrop Grumman Corporation was renamed Northrop Grumman Systems
Corporation. It became a wholly-owned subsidiary of the new parent of the
reorganized controlled group.

 

(b) The new parent corporation resulting from the restructuring is called
Northrop Grumman Corporation. All references in this Plan to the former Northrop
Grumman Corporation and its Board of Directors now refer to the new parent
corporation bearing the same name and its Board of Directors.

 

(c) As of the 2001 Reorganization Date, the new Northrop Grumman Corporation
became the sponsor of this Plan, and its Board of Directors assumed authority
over this Plan.

 

(d) 2001 Reorganization Date. The date as of which the corporate restructuring
described in (a) and (b) occurred.

 

(e) Litton Acquisition Date. The date as of which the conditions for the
completion of the Litton Acquisition were satisfied in accordance with the
Amended and Restated Agreement and Plan of Merger Among Northrop Grumman
Corporation, Litton Industries, Inc., NNG, Inc., and LII Acquisition Corp.

 

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ARTICLE 2

 

Definitions

 

Capitalized terms which are defined in the ES Pension Plan will have the same
meanings in this Plan unless otherwise expressly stated. In addition, the
following terms when used and capitalized will have the following meanings:

 

Section 2.01. Affiliated Companies. The Company and any other entity related to
the Company under the rules of section 414 of the Code. The Affiliated Companies
include Northrop Grumman Corporation and its 80%-owned subsidiaries and may
include other entities as well.

 

Section 2.02. Annual Incentive Programs. See Article 6.

 

Section 2.03. Average Annual Compensation. See Article 6.

 

Section 2.04. Board. Board means the Board of Directors of Northrop Grumman
Corporation, or its delegate.

 

Section 2.05. Code. The Internal Revenue Code of 1986, as amended, and as it may
be amended.

 

Section 2.06. Committee. A committee of not less than three members appointed by
the Board with responsibility for the general administration of the Plan. The
Committee is the “plan administrator” under ERISA.

 

Section 2.07. Company. Northrop Grumman Corporation.

 

Section 2.08. Defined Contribution Plan. A defined contribution plan within the
meaning of ERISA § 3(34), but not including:

 

(a) the Northrop Grumman Electronic Systems Savings Program or any similar
program of a Participating Company or a Designated Entity or

 

(b) any amount received pursuant to a cash or deferred arrangement (as that term
is defined in the Code) maintained by a Participating Company or a Designated
Entity.

 

Section 2.09. Designated Entity. Designated Entity means an Affiliated Company
or other entity that has been and is still designated by the Committee as
participating in the Plan.

 

Section 2.10. ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and as it may be amended.

 

Section 2.11. ES Pension Plan. The Northrop Grumman Electronic Systems Pension
Plan, formerly known as the ESSD Pension Plan.

 

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Section 2.12. Executive. Executive means an individual who satisfies (a) and (b)
and is not excluded by (c) or (d):

 

(a) An Employee who is employed by ES (or by a Participating Company, Designated
Entity, or other Affiliated Company) in a position that is determined by the
Company’s Chief Executive Officer or Vice President and Chief Human Resources
and Administrative Officer to be eligible as an Executive position under this
Plan based on the duties and responsibilities of the position.

 

(b) The Employee has been notified by the Committee in writing that he or she is
eligible for benefits under the Plan.

 

(c) No Employee may receive benefits under this Plan if he or she is currently
accruing supplemental benefits under any other nonqualified deferred
compensation plan, contract, or arrangement maintained by the Affiliated
Companies or to which the Affiliated Companies contribute with the exception of
the Officers Supplemental Executive Retirement Program under the Northrop
Grumman Supplemental Plan 2.

 

(d) Notwithstanding any provision of the Plan to the contrary, effective as of
July 1, 2003, no Employee will first become eligible to participate in the Plan
or otherwise receive credit for service or compensation for purposes of
calculating a benefit under the Plan unless the Employee was classified as an
Executive eligible to participate in the Plan before that date. Executives that
terminate employment and are later rehired into positions that are determined to
be eligible as Executive positions under the Plan will be eligible to resume
participation in the Plan and will be subject to Appendix B.

 

Section 2.13. Executive Benefit Service. See Article 6.

 

Section 2.14. Executive Pension Base. See Article 6.

 

Section 2.15. Executive Pension Supplement. The pension calculated pursuant to
Articles 4 and 5 of this Plan. There will be no Executive Pension Supplement
payable if the Executive’s Qualified Plan Benefit equals or exceeds his or her
Executive Pension Base.

 

Section 2.16. Maximum Contribution. An Employee will be deemed to have made the
Maximum Contribution if he or she has made the contributions under (a) and (b),
as interpreted under (c):

 

(a) During such time as the Employee was eligible to participate in the ES
Pension Plan and the Westinghouse Pension Plan, he or she contributed the
maximum amount the Employee was permitted to contribute under those plans, and

 

(b) During such time as the Employee was employed by a Designated Entity (which
includes for this purpose a “Designated Entity” under the Westinghouse Plan
during periods before the Westinghouse Acquisition),

 

(1) The Employee contributed the maximum amount he or she was permitted to
contribute, if any, to that Designated Entity’s defined benefit pension or
Defined Contribution Plan, if any, and

 

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(2) The Employee paid to the Company (or to Westinghouse, before the
Westinghouse Acquisition) an amount of each of his or her annual incentive
compensation awards based on the maximum ES Pension Plan contribution formula
(or Westinghouse Pension Plan contribution formula, as appropriate) applied to
50% of his or her awards. This payment is pre-tax and is made by a deferral
election entered into prior to the year in which the annual incentive
compensation award is determined and paid.

 

(c) This Plan is intended as essentially a continuation of the Westinghouse Plan
(see Appendix C). Accordingly, this Section is to be interpreted as requiring an
Executive to have made the Maximum Contribution not only under this Plan but
also under the Westinghouse Plan.

 

Section 2.17. Participating Company. Any of the “Participating Companies” under
the ES Pension Plan.

 

Section 2.18. Plan. The Northrop Grumman Electronic Systems Executive Pension
Plan.

 

Section 2.19. Qualified Plan Benefit.

 

(a) The Qualified Plan Benefit is equal to the sum of:

 

  (1) the annual amount of pension the Executive has accrued under the ES
Pension Plan and any applicable defined benefit pension plan of a Designated
Entity based on Benefit Service accumulated up to the earlier of the Executive’s
actual retirement date or death;

 

  (2) the amount the Executive is entitled to receive on a life annuity basis
for retirement under any applicable Defined Contribution Plan of a Designated
Entity;

 

  (3) in any case where service included in the Executive’s Vesting Service also
entitles that Executive to benefits under one or more retirement plans (whether
a defined benefit or Defined Contribution Plan or both) of another company, the
amount the Executive is entitled to receive on a life annuity basis for
retirement from those plans; and

 

  (4) the amount of any “Qualified Plan Benefits” taken into account under the
Westinghouse Plan (or which would have been taken into account, but for the
Westinghouse Acquisition) with respect to plans that were not acquired by the
Affiliated Companies as part of the Westinghouse Acquisition;

 

provided, the method of benefit measurement, in the case of (2), (3) and (4)
above, will be on the basis of procedures determined by the Committee on a
plan-by-plan basis.

 

(b) The Qualified Plan Benefit does not include any early pension retirement
supplement.

 

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(c) The term Qualified Plan Benefit will also include amounts accrued under an
excess benefit plan or other similar arrangement in which the Executive is a
participant.

 

Section 2.20. Retirement Eligible. An Executive is Retirement Eligible if he or
she is accruing Vesting Service and:

 

(a) has attained age 65 and completed five or more years of Vesting Service;

 

(b) has attained age 60 and completed 10 or more years of Vesting Service;

 

(c) has attained age 58 and completed 30 or more years of Vesting Service; or

 

(d) has satisfied the requirements for an immediate pension under the Special
Retirement Benefit provisions of the ES Pension Plan.

 

Section 2.21. Westinghouse. Westinghouse Electric Corporation.

 

Section 2.22. Westinghouse Acquisition. The acquisition by Northrop Grumman
Corporation of the Electronic Systems Group of Westinghouse effective March 1,
1996.

 

Section 2.23. Westinghouse Plan. The Westinghouse Executive Pension Plan, as it
existed from time to time.

 

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ARTICLE 3

 

Qualification for Benefits; Mandatory Retirement

 

Section 3.01. Qualification for Benefits. Subject to Article 8 and other
applicable provisions of the Plan, if any, each Executive will be entitled to
the benefits of this Plan on separation from service from a Participating
Company, a Designated Entity, or any other Affiliated Company, provided that
such Executive meets the following four conditions:

 

(a) He or she has been employed in a position that meets the definition of
Executive for five or more continuous years immediately preceding the earlier of
the Executive’s actual retirement date or the Executive’s Normal Retirement
Date. For purposes of this five-year requirement (but not for purposes of
determining Executive Benefit Service under Section 6.05), the General Manager
of ES and the Vice President of Human Resources for ES may determine that one or
more years of an Employee’s service with an Affiliated Company prior to the
Employee’s transfer to ES shall be counted as having been in an Executive
position.

 

(b) He or she has made the Maximum Contribution during each year of Vesting
Service from the date he or she first became an Executive until the earliest of
his or her date of death, actual retirement date or Normal Retirement Date;

 

(c) He or she is a participant in the ES Pension Plan or in the defined benefit
plan or Defined Contribution Plan of a Designated Entity, if any;

 

(d) He or she is Retirement Eligible on the date of voluntary or involuntary
separation from service from a Participating Company or a Designated Entity or,
in the case of a Surviving Spouse benefit, satisfies the requirements for
benefits under Article 5 of the Plan.

 

Section 3.02. Mandatory Retirement. Pursuant to this Plan, the Company will be
entitled, at its option, to retire any Executive who has attained age 65 and
who, for the two-year period immediately before his or her retirement, has
participated in this Plan, if such Executive is entitled to an immediate
nonforfeitable annual retirement benefit from a pension, profit-sharing, savings
or deferred compensation plan, or any combination of such plans, of a
Participating Company or any Affiliated Company, which equals, in the aggregate,
at least $44,000. The calculation of the $44,000 (or greater) amount will be
performed in a manner consistent with 29 U.S.C. § 631(c)(2).

 

Section 3.03. Certain Transfers. Except as otherwise provided in (e) below, if
an Executive transfers to a position with an Affiliated Company that is not
covered by a Participating Company or Designated Entity:

 

(a) He or she will immediately cease to accrue Executive Benefit Service.

 

(b) He or she will continue to earn Vesting Service (for purposes of the Plan
other than Executive Benefit Service) for periods of employment with the
Affiliated Company.

 

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(c) His or her Average Annual Compensation will include earnings as an employee
from the Affiliated Company for periods after the transfer until his or her
termination of employment with all Affiliated Companies.

 

(d) He or she may receive benefits under the Plan if he or she subsequently
retires from the Company and satisfies the Plan’s eligibility requirements.

 

(e) Effective as of July 1, 2003, if an Executive transfers to a position with
an Affiliated Company that has been determined by the Company’s Chief Executive
Officer or Vice President and Chief Human Resources and Administrative Officer
to be an eligible position under the Plan, (a)-(d) above will not apply and the
Executive will continue to be classified as an active participant for all
purposes under the Plan until the Executive’s separation from service from all
Affiliated Companies.

 

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ARTICLE 4

 

Calculation of Executive Pension Supplement

 

Section 4.01. In General. The Executive Pension Supplement for an Executive who
meets the qualifications of Article 3 of the Plan retiring on an Early, Normal
or Special Retirement Date will be calculated as described in Section 4.02(a) or
(b).

 

Section 4.02. Amount.

 

(a) If the Executive

 

(1) has attained age 60 and completed 10 or more years of Vesting Service,

 

(2) has attained age 65, or

 

(3) has satisfied the eligibility requirements for an immediate pension under
the “Special Retirement Benefit” provisions of the ES Pension Plan, the
Executive Pension Supplement is determined by subtracting the Executive’s
Qualified Plan Benefit that would be payable if he or she elected a Life Annuity
Option (after any reduction for early retirement, if applicable) from his or her
Executive Pension Base.

 

(b) If the Executive has not met the requirements of paragraph (a) above but has
attained age 58 and completed 30 or more years of Vesting Service, the Executive
Pension Supplement is determined by subtracting the Executive’s Qualified Plan
Benefit that would be payable if he or she elected a Life Annuity Option (before
any reduction for retirement prior to age 60) from his or her Executive Pension
Base.

 

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ARTICLE 5

 

Death in Active Service

 

Section 5.01. Eligibility For an Immediate Benefit. If an Executive dies in
active service and, on his or her date of death, satisfies the requirements of
the “Special Surviving Spouse Benefit” under the ES Pension Plan and satisfied
the requirements of Section 3.01(b) and (c) of this Plan at the time of death, a
Surviving Spouse benefit will also be payable under this Plan if his or her
Executive Pension Base exceeds his or her Qualified Plan Benefit. The
requirement of Section 3.01(a) is waived.

 

Section 5.02. Calculation of Immediate Benefit. The amount of the immediate
Surviving Spouse benefit under Section 5.01 will be the Executive Pension
Supplement reduced in the same manner as though the benefit were a “Special
Surviving Spouse Benefit” under the ES Pension Plan. For purposes of this
Section, the Executive Pension Supplement will be calculated as follows:

 

(a) If the Executive had attained age 60 or if the Executive had completed 30
years of Vesting Service, the Executive Pension Supplement would be calculated
as described in Section 4.02(a);

 

(b) Otherwise, the Executive Pension Supplement would be 80% of the difference
between the Executive Pension Base and the unreduced Qualified Plan Benefit.

 

Section 5.03. Eligibility For a Deferred Benefit. If an Executive dies in active
service who does not satisfy the requirements of Section 5.01 but who satisfies
the requirements of the “Surviving Spouse Benefit” under the ES Pension Plan and
satisfied the requirements of Section 3.01(b) and (c) of this Plan at the time
of death, a Surviving Spouse benefit will also be payable under this Plan if his
or her Executive Pension Base exceeds his or her Qualified Plan Benefit. The
requirement of Section 3.01(a) is waived.

 

Section 5.04. Calculation of Deferred Benefit. The amount of the deferred
Surviving Spouse benefit under Section 5.03 will be the Executive Pension
Supplement reduced in the same manner as though the benefit were payable under
the ES Pension Plan. For purposes of this paragraph, the Executive Pension
Supplement will be calculated by subtracting the Executive’s Qualified Plan
Benefit (before any reductions) from his or her Executive Pension Base.

 

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ARTICLE 6

 

Executive Pension Base

 

Section 6.01. In General. This Article sets forth the rules for determining a
Participant’s Executive Pension Base.

 

Section 6.02. Executive Pension Base. The Executive Pension Base = (a) x (b) x
(c) as follows:

 

(a) 1.47%;

 

(b) Average Annual Compensation;

 

(c) the number of years of Executive Benefit Service accrued to the earliest of:

 

(1) the Executive’s actual retirement date,

 

(2) the date of the Executive’s death, or

 

(3) the Executive’s Normal Retirement Date.

 

Section 6.03. Average Annual Compensation. Average Annual Compensation = (a) +
(b) as follows:

 

(a) 12 times the average of the five highest of the Executive’s December l
monthly base salaries during the 10-year period immediately preceding the
earliest of:

 

(1) the Executive’s date of death,

 

(2) the Executive’s actual retirement date, or

 

(3) the Executive’s Normal Retirement Date;

 

(b) the average of the Executive’s five highest annual incentive compensation
awards paid under the Annual Incentive Programs or equivalent annual program or
programs during the 10-year period ending with the earliest of:

 

(1) the year of the Executive’s death,

 

(2) the year of the Executive’s actual retirement date, or

 

(3) the year of the Executive’s Normal Retirement Date.

 

(c) No earnings before March 1, 1996 are taken into account under this Article.

 

(d) Average Annual Compensation normally includes only pay earned while an
Executive. But see Section 3.03.

 

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Section 6.04. Annual Incentive Programs. The Annual Incentive Programs are the
Timely Awards Program, Management Achievement Plan, the Incentive Compensation
Plan, the Incentive Management Achievement Plan and the Performance Achievement
Plan of the Company.

 

Section 6.05. Executive Benefit Service. An Executive’s Executive Benefit
Service is determined under (a) or (b) as appropriate:

 

(a) Executive Benefit Service is an Executive’s total years of Vesting Service
under the ES Pension Plan if:

 

(l) the Executive was making the Maximum Contribution during each of those
years; or

 

(2) the use of the Executive Buy Back process has been authorized by the
Committee and the Executive:

 

(A) was making the Maximum Contribution during each of those years after the
date he or she first became an Executive and

 

(B) has complied with the provisions of the Executive Buy Back process (as set
forth in Appendix A) as to those years prior to his or her first becoming an
Executive.

 

(b) Otherwise, Executive Benefit Service is the Executive’s period of Vesting
Service during which he or she made the Maximum Contribution.

 

(c) No service before March 1, 1996 is taken into account under this Article.

 

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ARTICLE 7

 

Payment of Benefits

 

Section 7.01. Limitation on Benefits. No benefits will be payable under this
Plan to any Executive whose employment terminates for any reason other than
death prior to becoming Retirement Eligible.

 

Section 7.02. Normal Form and Commencement of Benefits. The Executive Pension
Supplement will be paid for life in monthly installments, each equal to l/12th
of the annual amount determined in Article 4 or 5, whichever is applicable.

 

(a) The Committee will determine the form and commencement of benefit payments
in its sole discretion.

 

(b) The Committee will choose among the various forms of payment, other than the
lump sum, then available under the ES Pension Plan, subject to the same
reductions or other provisions that apply to the elected form of payment under
the ES Pension Plan.

 

(c) No payments may commence under this Plan until payments to the Executive or
Surviving Spouse have commenced under the ES Pension Plan or other tax-qualified
defined benefit plan or Defined Contribution Plan maintained by a Participating
Company or Designated Entity.

 

Section 7.03. Guaranteed Benefit. Regardless of the form of payment elected by
the Committee, after the Executive retires and begins receiving an Executive
Pension Supplement, a minimum of 60 times the monthly payment he or she would
have received on a life annuity basis is guaranteed.

 

Section 7.04. Guaranteed Surviving Spouse Benefit. Once a Surviving Spouse
Benefit determined under Sections 5.01 and 5.02 has commenced, a minimum of 60
times the monthly benefit payable to the Surviving Spouse is guaranteed.

 

Section 7.05. Lump Sum Payments. An Executive who elects lump sum payments of
all his or her nonqualified benefits under the Northrop Grumman Corporation
Change-In-Control Severance Plan (effective August 1, 1996, as amended) or the
Northrop Grumman Corporation March 2000 Change-In-Control Severance Plan
(collectively, the “CIC Plans”) is entitled to have his or her Executive Pension
Supplement paid as a lump sum calculated under the terms of the applicable CIC
Plan. Otherwise, Executive Pension Supplement payments are governed by the
general provisions of this Article, which do not provide for lump sum payments.

 

Northrop Grumman Corporation may, in its sole discretion, amend or eliminate any
provision of the Plan with respect to lump sum distributions at any time. This
applies whether or not a Participant has already made a lump sum election.

 

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Section 7.06. Rehires. In the event that an Executive retires or otherwise
ceases to be an Employee of a Participating Company or a Designated Entity and
is later rehired by one of those entities, the provisions of Appendix B will
apply.

 

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ARTICLE 8

 

Conditions to Receipt of Executive Pension Supplement

 

Section 8.01. Non-Competition Condition. Payments of benefits under this Plan to
Executives are subject to the condition that the recipient will not compete with
the Company.

 

(a) Competition for this purpose means engaging directly or indirectly in any
business which is at the time competitive with any business, part of a business,
or activity then conducted by the Company, any of its subsidiaries or any other
corporation, partnership, joint venture or other entity of which the Company
directly or indirectly holds a 10% or greater interest (together, the
“Affiliated Group”) in the area in which such business, part of a business, or
activity is then being conducted by the Affiliated Group.

 

(b) The condition of this Section may be waived with respect to a recipient but
only in writing and only by the Compensation Committee of the Board.

 

Section 8.02. Breach of Condition. Breach of the condition contained in Section
8.01 will be deemed to occur immediately upon an Executive’s engaging in
competitive activity.

 

(a) Payments suspended for breach of the condition will not be resumed whether
or not the Executive terminates the competitive activity.

 

(b) A recipient will be deemed to be engaged in such a business indirectly if he
or she is an employee, officer, director, trustee, agent or partner of, or a
consultant or advisor to or for, a person, firm, corporation, association, trust
or other entity which is engaged in such a business or if he or she owns,
directly or indirectly, in excess of 5% of any such firm, corporation,
association, trust or other entity.

 

Section 8.03. Waiver After 65. The ongoing condition of this Article will not
apply to an Executive age 65 or older.

 

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ARTICLE 9

 

Administration

 

Section 9.01. Committee. This Plan will be administered by the Committee. The
Committee will have the right to make reasonable rules from time to time
regarding the Plan. All such rules will be consistent with the policy provided
by this Plan document. The Committee will have full discretion to interpret the
Plan, and to resolve ambiguities and inconsistencies. The Committee’s
interpretations will in all cases be final and not be subject to appeal.

 

Section 9.02. Claims Procedures. In accordance with the provisions of ERISA §
503, the Committee will provide a procedure for handling claims of participants
or their beneficiaries under this Plan.

 

Section 9.03. Trust. The Board may authorize the establishment of one or more
trusts and the appointment of a trustee or trustees (“Trustee”) to hold any and
all assets of the Plan in trust. The Board may delegate this power to the
Committee.

 

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ARTICLE 10

 

Modification or Termination

 

Section 10.01. Amendment, Suspension and Termination. The Company reserves the
right, at any time and from time to time, without notice, to suspend or
terminate the Plan or to amend, in whole or in part, any and all provisions of
the Plan, acting as follows:

 

(a) The Board may suspend the Plan, terminate the Plan, or adopt Plan amendments
that amend any and all provisions of the Plan in whole or in part;

 

(b) The Compensation Committee of the Board may adopt Plan amendments that amend
any and all provisions of the Plan in whole or in part;

 

(c) The Committee may adopt Plan amendments that amend any and all provisions of
the Plan in whole or in part, provided that no amendments may be adopted by the
Committee that would materially change any Plan benefits or materially increase
the costs of the Plan.

 

Section 10.02. Effective Date of Changes, Terminations and Suspensions. Any such
change, termination or suspension will be effective at such time as is specified
by the Board, the Compensation Committee, or the Committee, as applicable, or,
if no such time is so specified, upon adoption.

 

Section 10.03. Limitations on Changes and Terminations. Notwithstanding the
above, no such change or termination may adversely affect:

 

(a) The benefits of any Executive who retires prior to such change or
termination; or

 

(b) The right of any then current Executive to receive upon retirement (or to
have a Surviving Spouse or beneficiary receive upon the Executive’s death), an
Executive Pension Supplement, calculated as of the effective date of such change
or termination, under the Plan, provided that the Executive meets the following
two conditions:

 

(1) At the time of such change or termination the Executive has vested pension
benefits under the ES Pension Plan and/or any applicable pension plan of a
Designated Entity; and

 

(2) At the date of such change or termination and at the date of actual
retirement or death, the Executive has occupied, for the then required period
next preceding such dates, a position that meets the definition of Executive in
the Plan in effect at the date of such change or termination.

 

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ARTICLE 11

 

Miscellaneous

 

Section 11.01. Benefits Not Assignable. No Executive, former Executive or
Surviving Spouse shall have the right to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or otherwise subject to lien any of the benefits
provided under this Plan. Such rights may not be subject to the debts,
contracts, liabilities, engagements or torts of the Executive, former Executive
or Surviving Spouse of an Executive.

 

Section 11.02. Facility of Payment. If the Committee deems any person entitled
to receive any payment under the Plan incapable of receiving it by reason of
age, illness, infirmity, mental incompetency or incapacity of any kind, the
Committee may, in its discretion, direct that payment be made in any one or more
of the following manners:

 

(a) Applying the amount directly for the comfort, support and maintenance of the
payee;

 

(b) Reimbursing any person for any such support supplied by any other person to
the payee;

 

(c) Paying the amount to a legal representative or guardian or any other person
selected by the Committee on behalf of the payee; or

 

(d) Depositing the amount in a bank account to the credit of the payee.

 

Section 11.03. Committee Rules. Payment of benefits will be made in accordance
with the rules and procedures of the Committee.

 

Section 11.04. Limitation on Rights. The Company, in adopting this Plan, will
not be held to create or vest in any Executive or any other person any interest,
pension or benefits other than the benefits specifically provided herein, or to
confer upon any Executive the right to remain in the service of the Company.

 

Section 11.05. Benefits Unsecured. Any assets purchased by the Company to
provide benefits under this Plan will at all times remain subject to the claims
of general creditors of the Company and any Executive, former Executive or
Surviving Spouse of an Executive participating in the Plan has only an unsecured
promise to pay benefits from the Company.

 

Section 11.06. Governing Law. To the extent not preempted by federal law, the
law of the State of Maryland will govern the construction and administration of
the Plan.

 

Section 11.07. Severability. If any provision of this Plan or its application to
any circumstance or person is held to be invalid by a court of competent
jurisdiction, the remainder of the Plan and the application of such provision to
other circumstances or persons will not be affected thereby.

 

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Section 11.08. Expanded Benefits. The Board or the Compensation Committee of the
Board may, from time to time and without notice, by resolution of the Board or
of the Compensation Committee of the Board, authorize the payment of benefits or
expand the benefits otherwise payable or to be payable to any one or more
individuals.

 

Section 11.09. Plan Costs. Benefits payable under the Plan and any expenses in
connection therewith will be paid by the Company to the extent they are not
available to be paid from any trust fund established by the Company to help
defray the costs of providing Plan benefits.

 

Section 11.10. Termination of Participation. Participation in the Plan will
terminate:

 

(a) in the case of a nonvested Executive, upon separation from service with a
Participating Company or Designated Entity;

 

(b) in the case of a vested Executive, when payment of all amounts due with
respect to the Executive are paid, or purported to be paid, by the Plan.

 

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ARTICLE 12

 

Change in Control

 

Section 12.01. Definition. The term “Change in Control” means the occurrence of
one or more of the following events:

 

(a) There will be consummated:

 

(1) Any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
common stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of the Company’s common stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger; or

 

(2) Any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company; or

 

(b) The stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or

 

(c) (1) Any person (as such term is defined in section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), corporation or other
entity will purchase any common stock of the Company (or securities convertible
into Company common stock) for cash, securities or any other consideration
pursuant to a tender offer or exchange offer, unless, prior to the making of
such purchase of Company common stock (or securities convertible into Company
common stock), the Board will determine that the making of such purchase will
not constitute a Change in Control; or

 

(2) Any person (as such term is defined in section 13(d) of the Exchange Act),
corporation or other entity (other than the Company or any benefit plan
sponsored by the Affiliated Companies) will become the “beneficial owner” (as
such term is defined in Rule 13d-3 under the Exchange Act:), directly or
indirectly, of securities of the Company representing twenty percent or more of
the combined voting power of the Company’s then outstanding securities
ordinarily (and apart from any rights accruing under special circumstances)
having the right to vote in the election of directors (calculated as provided in
Rule 13d-3(d) in the case of rights to acquire any such securities), unless,
prior to such person so becoming such beneficial owner, the Board will determine
that such person so becoming such beneficial owner will not constitute a Change
in Control; or

 

(d) At any time during any period of two consecutive years, individuals who at
the beginning of such period constituted the entire Board will cease for any
reason to constitute at least a majority thereof, unless the election or the
nomination for election of each new director during such two-year period was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such two-year period.

 

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Section 12.02. Vesting and Funding Rules. Notwithstanding any other provision of
the Plan, upon a Change in Control, as defined above, all Executives will be
deemed fully vested under this Plan, but only such vesting as to the otherwise
applicable five-year service requirement. In addition, upon a Change in Control,
but only under circumstances where the successor, surviving or parent company of
Northrop Grumman Corporation or the successor plan sponsor or any successor
thereto, if any, does not agree to assume the obligation to provide benefits
under this Plan as they become due and payable, then an amount sufficient to
fund all unpaid benefits and any Surviving Spouse benefits payable under this
Plan will be paid immediately by the Company to a Trustee pursuant to a Trust
Agreement for the payment of such benefits at the earliest date available in
accordance with the provisions of the Plan and on such terms as the committee
composed of the Company’s Chief Executive Officer, Chief Financial Officer and
General Counsel, will deem appropriate (including a direction to the Trustee to
pay immediately all benefits on a present value basis and/or such other terms as
they may deem appropriate). Notwithstanding this funding, the Company will be
obligated to pay benefits to Executives and to Surviving Spouses of Executives
to the extent such funding proves to be insufficient. To the extent such funding
proves to be more than sufficient, any excess will revert to the Company.

 

Section 12.03. Special Retirement Provisions. Upon a Change in Control, for any
Executive in the Plan who is involuntarily separated and who is not then
eligible for a Normal or Special Retirement Pension under the ES Pension Plan,
such separation will be deemed to be a separation due to a “Permanent Job
Separation”, and the Special Retirement Pension provisions under the ES Pension
Plan will be used for purposes of determining eligibility and payment of
benefits to such Executive under the Plan.

 

Section 12.04. Calculation of Present Value. The present value of benefits
payable by the Trustee will be calculated for specific groups of Executives at
the time of the Change in Control as follows:

 

(a) The present value of the benefits payable from this Plan to Executives who
have retired at the time of the Change in Control (as well as benefits payable
from this Plan to any Surviving Spouse of an Executive) will be calculated by
using the PBGC immediate discount rate established and in effect for the
beginning of the calendar year in which the Change in Control occurs.

 

(b) The present value of the benefits payable from this Plan to Executives who
are eligible to retire under the terms of this Plan at the time of the Change in
Control will be calculated by using the PBGC immediate discount rates
established and in effect at the beginning of the calendar year in which the
Change in Control occurs, assuming a pension which is immediately payable at the
time of the Change in Control.

 

(c) The present value of the benefits payable from this Plan to Executives who
have completed at least 30 years of service with a Participating Company or a
Designated Entity but have not yet attained age 58 at the time of the Change in
Control will be calculated by using the PBGC deferred discount rates established
and in effect for the beginning of the calendar year in which the Change in
Control occurs, assuming a pension which is payable at age 58.

 

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(d) The present value of benefits payable from this Plan to Executives who have
completed at least 10 years of service with a Participating Company or a
Designated Entity but less than 30 years of service at the time of the Change in
Control, but have not yet attained age 60 at the time of the Change in Control,
will be calculated by using the PBGC deferred discount rates established and in
effect for the beginning of the calendar year in which the Change in Control
occurs, assuming a pension which is payable at age 60.

 

(e) The present value of benefits payable from this Plan to Executives who have
completed less than 10 years of service with a Participating Company or a
Designated Entity at the time of the Change in Control will be calculated by
using the PBGC deferred discount rates established and in effect for the
beginning of the calendar year in which the Change in Control occurs, assuming a
pension which is payable at age 65.

 

Section 12.05. Calculation of Offset. In calculating the benefit payable to each
Executive, any offset for the ES Pension Plan or other plan in which the
Executive participates, will be based upon the last official pension file data
available, adjusted to the date of any Change in Control by assuming that the
most recent salary reflected in the pension file remains constant.

 

Section 12.06. Limitation on Amendment, Suspension and Termination.
Notwithstanding any provision of this Plan, this Plan may not be:

 

(a) Amended such that future benefits would be reduced;

 

(b) Suspended; or

 

(c) Terminated;

 

as to the further accrual of benefits, for a period of 24 months following a
Change in Control; and as to the payment of benefits, at any time prior to the
last payment, determined in accordance with the provisions of this Plan, to each
Executive, former Executive receiving benefits under the Plan, or eligible
spouse.

 

* * *

 

IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly
authorized officer on this 22 day of February, 2005.

 

NORTHROP GRUMMAN CORPORATION

By:

 

/s/ J. Michael Hateley

J. Michael Hateley

Corporate Vice President and Chief Human

Resources and Administrative Officer

 

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APPENDIX A

 

Executive Buyback

 

Section A.01. Introduction. The Executive Buy Back process permits newly
eligible Executives to “buy back” past years of Executive Benefit Service under
the Plan for periods of time during which they did not make the Maximum
Contribution.

 

Section A.02. Buy Back Offer. If an Employee did not make the Maximum
Contribution during each of the years of his or her Vesting Service prior to the
time he or she first became an Executive, the Employee will be permitted to pay
make-up payments of Maximum Contributions in order to “buy back” his or her
non-contributory years of service.

 

(a) The make-up payments required are the Maximum Contributions that would have
been payable during the 10 years prior to the date he or she first became an
Executive (or such lesser period from the date the Employee was employed by a
Participating Company or a Designated Entity) plus compounded interest on those
amounts.

 

(b) This Plan is intended as essentially a continuation of the Westinghouse Plan
(see Appendix C). Accordingly, this Section is to be interpreted as requiring an
Executive to make up Maximum Contributions not only for his or her periods of
participation under this Plan but also Maximum Contributions that would have
been due under the Westinghouse Plan. The terms of (a) will be interpreted to
include the corresponding terms under the Westinghouse Plan and the 10-year
period will include periods before the Westinghouse Acquisition.

 

Section A.03. One-Time Opportunity. Upon qualifying as an Executive, an
Executive will be offered an Executive Buy Back opportunity at the time he or
she first becomes an Executive (or when this Appendix first becomes effective,
if later). The actual terms of the Executive Buy Back will be determined from
time to time by the Committee. This election will be offered one time to the
Executive and his or her decision whether or not to “buy back” will be
irrevocable.

 

Section A.04. Payment. Executive Buy Back payments are pre-tax and are made from
compensation by deferral elections entered into prior to the year in which the
compensation is determined and paid. Executive Buy Back payments will not be
deposited into the ES Pension Plan trust and will not increase the Executive’s
Qualified Plan Benefit.

 

Section A.05. Refund of Buy Back Payment. If, at some point, an Employee is no
longer an Executive or otherwise becomes ineligible to receive an Executive
Pension Supplement, any Executive Buy Back payments the Employee has made
(including any interest the Employee paid) plus any other amount as defined in
Section 2.16(b)(2) in the definition of Maximum Contribution paid by the
Employee to the Company will be refunded, with interest at such time as the
Employee meets one of the following criteria:

 

(a) Termination or retirement from a Participating Company or a Designated
Entity; or

 

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(b) Death;

 

provided, however, no refund will be made if the Employee is an eligible
Executive, whether or not the amount of his or her Executive Pension Supplement
exceeds zero. All interest rates will be determined at the discretion of the
Committee.

 

Section A.06. Effective Date. The provisions of this Appendix permitting Buy
Backs will become effective on a date specified by resolution of the Committee
specifically citing this Section.

 

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APPENDIX B

 

Rehired Executives

 

Section B.01. Retired Executives Rehired as Executives. If an Executive who
retired from a Participating Company or a Designated Entity and who received or
is receiving an Executive Pension Supplement as a lump sum or on a monthly basis
is rehired in an Executive position by a Participating Company, Designated
Entity, or any other Affiliated Company, the following provisions apply:

 

(a) Monthly Payments: For an Executive with a monthly Executive Pension
Supplement:

 

(1) The Plan will suspend all Executive Pension Supplement payments;

 

(2) If, but only if, the Executive is Retirement Eligible at the time of
subsequent actual retirement:

 

(A) Previous years of Vesting Service and Executive Benefit Service accrued
prior to the Executive’s retirement will be restored; and

 

(B) The Executive’s Executive Pension Supplement will be recalculated in
accordance with the Plan at his or her subsequent actual retirement date as long
as the Executive then meets all Plan benefit qualification requirements;

 

(3) The Executive, having previously met the requirement of five years of
continuous service as an Executive prior to his or her first retirement, need
not again meet that requirement;

 

(4) The Executive’s Average Annual Compensation will be computed without regard
to the break in service, using zero for any periods during which the Executive
was a retiree;

 

(5) If the Executive elected to take a lump sum Qualified Plan Benefit with
respect to his or her initial retirement, then in any subsequent calculation of
the Executive’s Executive Pension Supplement, the Executive’s Executive Pension
Base will be reduced by both the Executive’s Qualified Plan Benefit received at
the time of the initial retirement and the Executive’s Qualified Plan Benefit
accrued from the date of rehire through the date of his or her subsequent
retirement.

 

(b) Lump Sums: For an Executive who received a lump sum Executive Pension
Supplement and who is Retirement Eligible at the time of subsequent actual
retirement:

 

(1) Previous years of Vesting Service will be restored but not previous years of
Executive Benefit Service;

 

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(2) The Plan will calculate the Executive’s additional Executive Pension
Supplement at his or her subsequent actual retirement date on the basis of years
of service after the rehire in accordance with the Plan as the Executive then
meets all Plan benefit qualification requirements;

 

(3) The Executive, having previously met the requirement of five years of
continuous service as an Executive prior to his or her first retirement, need
not again meet that requirement;

 

(4) The Executive’s Average Annual Compensation will be computed without regard
to the break in service, using zero for any periods during which the Executive
was a retiree;

 

(5) If the Executive elected a monthly Qualified Plan Benefit with respect to
his or her initial retirement, then the Executive’s Qualified Plan Benefit
accrued from the date of rehire through the subsequent date of actual retirement
will be subtracted from the Executive’s Executive Pension Base in calculating
the Executive’s additional Executive Pension Supplement at his or her subsequent
retirement.

 

Section B.02. Former Executives with Vested Pensions Rehired as Executives. If
the employment of an Executive of a Participating Company or a Designated Entity
who was eligible only for a vested pension under the relevant qualified defined
benefit or Defined Contribution Plan, if any, was terminated and the Executive
is rehired by a Participating Company, Designated Entity, or any other
Affiliated Company, the following provisions apply:

 

(a) Previous years of Vesting Service and Executive Benefit Service accrued
prior to the Executive’s termination of employment will be restored;

 

(b) The Executive must meet the requirement of five years of continuous service
as an Executive prior to a subsequent actual retirement, counting only years of
service after the rehire;

 

(c) Only base salary and incentive awards earned after the rehire will be used
in computing Average Annual Compensation;

 

(d) If the Executive elected to take his or her vested pension as a lump sum, in
any calculation of an Executive Pension Supplement at actual retirement, the
Executive’s Executive Pension Base will be reduced by both the Executive’s
Qualified Plan Benefit at the time of the initial termination of employment and
the Executive’s Qualified Plan Benefit accrued from the date of rehire through
the date of actual retirement.

 

Section B.03. Retired Executives Rehired in Non-Executive Positions. If an
Executive who retired from a Participating Company or a Designated Entity and
who received or is receiving an Executive Pension Supplement as a lump sum or on
a monthly basis is rehired by a Participating Company, Designated Entity, or any
other Affiliated Company in a non-Executive position, the following provisions
apply:

 

(a) For a former Executive who was receiving a monthly Executive Pension
Supplement:

 

(1) The Plan will suspend all Executive Pension Supplement payments;

 

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(2) If, but only if, the former Executive is still Retirement Eligible at the
time of subsequent actual retirement, the Plan will recommence Executive Pension
Supplement payments at the time of the Executive’s subsequent actual retirement
without recalculation of amount;

 

(3) At subsequent actual retirement, the former Executive may receive any form
of payment of his or her Executive Pension Supplement then permitted under the
Plan, as selected by the Committee.

 

(b) For a former Executive who received his or her Executive Pension Supplement
as a lump sum, no further benefits will be paid by the Plan.

 

Section B.04. Events That Span Westinghouse Acquisition. This Plan is intended
as essentially a continuation of the Westinghouse Plan (see Appendix C) and this
Appendix is to be interpreted accordingly.

 

(a) Reductions for payments of Qualified Plan Benefits will be interpreted to
include reductions for payments of similar benefits under Westinghouse plans.

 

(b) Determination of the form of Qualified Plan Benefits will take into account
the form of payments under Westinghouse plans.

 

(c) The terms of this Appendix will be interpreted, where appropriate, to
include the corresponding terms under the Westinghouse Plan and to take into
account events both before and after the Westinghouse Acquisition.

 

Section B.05. Breaks Spanning March 1, 1996. There may be Executives who
participated in the Westinghouse Plan but because of a break in their service
did not become employees of the Affiliated Companies on March 1, 1996 as a
result of the Westinghouse Acquisition.

 

(a) Those Executives might be hired later by the Electronic Sensors & Systems
Division.

 

(b) They will in no case be entitled to service or compensation credits or
benefits under this Plan with respect to any service or compensation prior to
their first hire by the Electronic Sensors & Systems Division after March 1,
1996. The Executives will not be considered to have previously met the
requirement of five years of continuous service as an Executive.

 

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APPENDIX C

 

Coordination With Westinghouse Plan

 

Section C.01. In General. As part of the Westinghouse Acquisition, this Plan was
established by Northrop Grumman Corporation.

 

(a) This Plan is intended to be a continuation of the Westinghouse Plan with
only minor changes.

 

(b) This Plan assumes remaining liabilities of the Westinghouse Plan with regard
to those participants of the Westinghouse Plan who became Employees of the
Northrop Grumman controlled group on March 1, 1996 as a result of the
Westinghouse Acquisition. Accordingly, benefits earned by Participants of this
Plan under the Westinghouse Plan before March 1, 1996 are payable under this
Appendix.

 

(c) Employees first hired after the Westinghouse Acquisition will therefore not
be affected by this Appendix and will have their pension benefits governed
entirely by the other Articles and Appendices of this Plan.

 

Section C.02. Pre-Acquisition Benefits.

 

(a) Except as provided in Sections C.03 and C.04, benefits earned under the
Westinghouse Executive Pension Plan are in addition to the benefits which may be
earned under Articles 4 and 5.

 

(b) The Westinghouse Plan benefits will be calculated taking into account all
pertinent facts for determining benefits under the Westinghouse Plan’s
provisions (including benefits and contributions under Westinghouse plans) as
they have existed from time to time.

 

Section C.03. Coordination of Pre and Post-Acquisition Benefits. The Plan will
be interpreted in light of events before and after the Westinghouse Acquisition
to coordinate the calculation of benefits (including service and compensation
components, benefits and contributions under Westinghouse plans and rehire
provisions) under this Appendix and benefits based on Articles 4 and 5 so that
the Plan will function as if it were essentially a continuation of the
Westinghouse Plan.

 

Section C.04. No Duplication of Benefits. Because this Plan is intended as a
continuation of the Westinghouse Plan, this Plan will not pay any benefits
already paid or payable by the Westinghouse Plan itself.

 

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