Exhibit 10(j)
NORTHROP GRUMMAN
SUPPLEMENTAL PLAN 2

(Amended and Restated Effective as of January 1, 2005)

 

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TABLE OF CONTENTS

              ARTICLE I Definitions     1  
1.01
  Affiliated Companies     1  
1.02
  Board of Directors     1  
1.03
  CIC Plans     1  
1.04
  Code     1  
1.05
  Company     1  
1.06
  Deferred Compensation Plan     1  
1.07
  ERISA     1  
1.08
  Grandfathered Amounts     1  
1.09
  Key Employee     1  
1.10
  Participant     2  
1.11
  Payment Date     2  
1.12
  Pension Plan     2  
1.13
  Plan     2  
1.14
  Program     2  
1.15
  Qualified Plan     2  
1.16
  Separation from Service or Separates from Service     2  
1.17
  Termination of Employment     2  
 
            ARTICLE II General Provisions     4  
2.01
  In General     4  
2.02
  Treatment of 2000 Ad Hoc Increases for Retirees     4  
2.03
  Forms and Times of Benefit Payments     4  
2.04
  Beneficiaries and Spouses     4  
2.05
  Mandatory Cashout     5  
2.06
  Optional Payment Forms     5  
2.07
  Amendment and Plan Termination     6  
2.08
  Not an Employment Agreement     6  
2.09
  Assignment of Benefits     6  
2.10
  Nonduplication of Benefits     6  
2.11
  Funding     7  
2.12
  Construction     7  
2.13
  Governing Law     7  
2.14
  Actions by Company     7  
2.15
  Plan Representatives     7  
2.16
  Number     8  
 
            ARTICLE III Lump Sum Election     9  
3.01
  In General     9  
3.02
  Election     9  
3.03
  Lump Sum—Retirement Eligible     10  
3.04
  Lump Sum—Not Retirement Eligible     11  
3.05
  Lump Sums with CIC Severance Plan Election     11  
3.06
  Calculation of Lump Sum     12  
3.07
  Spousal consent     13  
 
            APPENDIX 1 — 2005-2007 TRANSITION RULES     14  
1.01
  Election     14  
1.02
  2005 Commencements     14  
1.03
  2006 and 2007 Commencements     15  

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              APPENDIX 2 — POST 2007 DISTRIBUTION OF 409A AMOUNTS     16  
2.01
  Time of Distribution     16  
2.02
  Special Rule for Key Employees     16  
2.03
  Forms of Distribution     16  
2.04
  Death     16  
2.05
  Actuarial Assumptions     17  
2.06
  Accelerated Lump Sum Payouts     17  
2.07
  Effect of Early Taxation     18  
2.08
  Permitted Delays     18  
2.09
  Special Tax Distribution     18  

Note: All of the following Appendices are saved as separate documents.
Confidential documents may be requested from Benefits Strategy & Design.
APPENDIX A Northrop Supplemental Retirement Income Program For Senior Executives
APPENDIX B ERISA Supplemental Program 2

APPENDIX C Arthur F. Dauer Program (Confidential)

APPENDIX D Nelson Gibbs, Jr. Program (Confidential)

APPENDIX E Oliver Boileau Program (Confidential)

APPENDIX F CPC Supplemental Executive Retirement Program

APPENDIX G Officers Supplemental Executive Retirement Program

APPENDIX H Robert P. Iorizzo Program

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          The Northrop Grumman Supplemental Plan 2 (the “Plan”) is hereby
amended and restated effective as of January 1, 2005. This restatement amends
the October 1, 2004 restatement of the Plan to address the requirements of Code
section 409A and certain other changes.
          The Plan is intended to comply with Code section 409A and official
guidance issued thereunder (except for Grandfathered Amounts). Notwithstanding
any other provision of this Plan, this Plan shall be interpreted, operated and
administered in a manner consistent with this intention.
ARTICLE I
Definitions
          For purposes of the Plan, the following terms, when capitalized, will
have the following meanings:

1.01   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.   1.02   Board of Directors. The Board of
Directors of the Company.   1.03   CIC Plans. 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.   1.04
  Code. The Internal Revenue Code of 1986, as amended.   1.05   Company.
Northrop Grumman Corporation.   1.06   Deferred Compensation Plan. The Northrop
Grumman Deferred Compensation Plan and the Northrop Grumman Savings Excess Plan.
  1.07   ERISA. The Employee Retirement Income Security Act of 1974, as amended.
  1.08   Grandfathered Amounts. Plan benefits that were earned and vested as of
December 31, 2004 within the meaning of Code section 409A and official guidance
thereunder.   1.09   Key Employee. An employee treated as a “specified employee”
under Code section 409A(a)(2)(B)(i) of the Company or the Affiliated Companies
(i.e., a key employee (as defined in Code section 416(i) without regard to
paragraph (5) thereof)) if the Company’s or an Affiliated 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 Participants
are Key

 

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    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.   1.10  
Participant. Any employee of the Company who is eligible for benefits under a
particular Program and has not received full payment under the Program.   1.11  
Payment Date. The 1st of the month coincident with or following the later of
(a) the date the Participant attains age 55, or (b) the date the Participant
Separates from Service.   1.12   Pension Plan.

  (a)   The Northrop Grumman Pension Plan (subject to the special effective
dates noted below for the following merged plans)

  •   The Northrop Grumman Retirement Value Plan (effective as of January 1,
2000)     •   The Northrop Grumman Commercial Aircraft Division Salaried
Retirement Plan (effective as of July 1, 2000)     •   The Grumman Pension Plan
(effective as of July 1, 2003)

  (b)   The Northrop Grumman Electronic Systems — Space Division Consolidated
Pension Plan (effective as of October 22, 2001)     (c)   The Northrop Grumman
Norden Systems Employee Retirement Plan (effective July 1, 2003)

1.13   Plan. The Northrop Grumman Supplemental Plan 2.   1.14   Program. One of
the eligibility and benefit structures described in the Appendices.   1.15  
Qualified Plan. The Northrop Grumman Pension Plan and Cash Balance Plans (as
defined under the Northrop Grumman Pension Plan).   1.16   Separation from
Service or Separates from Service. A “separation from service” within the
meaning of Code section 409A.   1.17   Termination of Employment. Complete
termination of employment with the Affiliated Companies.

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  (a)   If a Participant leaves one Affiliated Company to go to work for
another, he or she will not have a Termination of Employment.     (b)   A
Participant will have a Termination of Employment if he or she leaves the
Affiliated Companies because the affiliate he or she works for ceases to be an
Affiliated Company because it is sold or spunoff.

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ARTICLE II
General Provisions

2.01   In General. The Plan contains a number of different benefit Programs
which are set forth in the Appendices. The Appendices describe the eligibility
conditions and the amount of benefits payable under the Programs. The Company,
in its sole discretion, will determine all eligibility conditions, make all
benefit determinations, and otherwise exercise sole authority to interpret the
Plan and Programs.   2.02   Treatment of 2000 Ad Hoc Increases for Retirees. In
no event, however, (1) will this Plan pay any amount of a Participant’s
retirement benefit, if any, attributable to the “2000 Ad Hoc Increase for
Retirees” Appendix added to certain of the Company’s tax-qualified plans
pursuant to the Board of Directors resolution adopted May 17, 2000, or (2) will
a Participant be entitled to a benefit (or an increased benefit) from or as a
result of participation in this Plan under the Board of Directors resolution
adopted May 17, 2000.   2.03   Forms and Times of Benefit Payments. This Section
only applies to Grandfathered Amounts. The Company will determine the form and
timing of benefit payments in its sole discretion unless particular rules
regarding the form and timing of benefit payments are set forth in a Program or
where a lump sum election under Article III is applicable.

  (a)   For payments made to supplement those of a particular tax-qualified
retirement or savings plan, the Company will only select among the options
available under that plan, using the same actuarial adjustments used in that
plan, except in cases of lump sums.     (b)   Whenever the present value of the
amount payable under a particular Program does not exceed $10,000, it will be
paid in the form of a single lump sum as of the first of the month following
Termination of Employment. The lump sum will be calculated using the factors and
methodology described in Section 3.06 below (See Section 2.05 for the rule that
applies as of January 1, 2008).     (c)   No payments will commence under this
Plan until a Participant has a Termination of Employment, even in cases where
benefits have commenced under a qualified retirement plan for Participants over
age 701/2, or for any other reason.

See Appendix 1 and Appendix 2 for the rules that apply to other benefits earned
under the Plan.

2.04   Beneficiaries and Spouses. This Section only applies to Grandfathered
Amounts. If the Company selects a form of payment which includes a survivor
benefit, the Participant may make a beneficiary designation, which may be
changed at any

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    time prior to commencement of benefits. A beneficiary designation must be in
writing and will be effective only when received by the Company.

  (a)   If a Participant is married on the date his or her benefits are
scheduled to commence, his or her beneficiary will be his or her spouse unless
some other beneficiary is named with spousal consent. Spousal consent, to be
effective, must be submitted in writing before benefits commence and must be
witnessed by a Plan representative or notary public. No spousal consent is
necessary if the Company determines that there is no spouse or that the spouse
cannot be found.     (b)   With respect to Programs designed to supplement
tax-qualified retirement or savings plans, the Participant’s spouse will be the
spouse as determined under the underlying tax-qualified plan. Otherwise, the
Participant’s spouse will be determined by the Company in its sole discretion.

See Appendix 1 and Appendix 2 for the rules that apply to other benefits earned
under the Plan.

2.05   Mandatory Cashout. Notwithstanding any other provisions in the Plan,
Participants with Grandfathered Amounts who have not commenced payment of such
benefits prior to January 1, 2008 will be subject to the following rules:

  (a)   Post-2007 Terminations. Participants who have a Termination of
Employment after 2007 will receive a lump sum distribution of the present value
of their Grandfathered Amounts within two months of Termination of Employment
(without interest), if such present value is below the Code section 402(g) limit
in effect at the Termination of Employment.     (b)   Pre-2008 Terminations.
Participants who had a Termination of Employment before 2008 will receive a lump
sum distribution of the present value of their Grandfathered Amounts within two
months of the time they commence payment of their underlying qualified pension
plan benefits (without interest), if such present value is below the Code
section 402(g) limit in effect at the time such payments commence.

For purposes of calculating present values under this Section, the actual
assumptions and calculation procedures for lump sum distributions under the
Northrop Grumman Pension Plan shall be used.

2.06   Optional Payment Forms. Participants with Grandfathered Amounts shall be
permitted to elect (a) or (b) below:

  (a)   To receive their Grandfathered Amounts in any form of distribution
available under the Plan at October 3, 2004, provided that form remains
available under the underlying qualified pension plan at the time payment of the
Grandfathered Amounts commences. The conversion factors for

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      these distribution forms will be based on the factors or basis in effect
under this Plan on October 3, 2004.     (b)   To receive their Grandfathered
Amounts in any life annuity form not included in (a) above but included in the
underlying qualified pension plan distribution options at the time payment of
the Grandfathered Amounts commences. The conversion factors will be based on the
following actuarial assumptions:

Interest Rate:          6%
Mortality Table:     RP-2000 Mortality Table projected 15 years for future
standardized cash balance factors

2.07   Amendment and Plan Termination. The Company may, in its sole discretion,
terminate, suspend or amend this Plan at any time or from time to time, in whole
or in part for any reason. This includes the right to amend or eliminate any of
the provisions of the Plan with respect to lump sum distributions, including any
lump sum calculation factors, whether or not a Participant has already made a
lump sum election. Notwithstanding the foregoing, no amendment or termination of
the Plan shall reduce the amount of a Participant’s accrued benefit under the
Plan as of the date of such amendment or termination.       No amendment of the
Plan shall apply to the Grandfathered Amounts, unless the amendment specifically
provides that it applies to such amounts. The purpose of this restriction is to
prevent a Plan amendment from resulting in an inadvertent “material
modification” to the Grandfathered Amounts.       The Company may, in its sole
discretion, seek reimbursement from the Company’s tax-qualified plans to the
extent this Plan pays tax-qualified plan benefits to which Participants were
entitled to or became entitled to under the tax-qualified plans.   2.08   Not an
Employment Agreement. Nothing contained in this Plan gives any Participant the
right to be retained in the service of the Company, nor does it interfere with
the right of the Company to discharge or otherwise deal with Participants
without regard to the existence of this Plan.   2.09   Assignment of Benefits. A
Participant, surviving spouse or beneficiary may not, either voluntarily or
involuntarily, assign, anticipate, alienate, commute, sell, transfer, pledge or
encumber any benefits to which he or she is or may become entitled under the
Plan, nor may Plan benefits be subject to attachment or garnishment by any of
their creditors or to legal process.   2.10   Nonduplication of Benefits. This
Section applies if, despite Section 2.09, with respect to any Participant (or
his or her beneficiaries), the Company is required to make payments under this
Plan to a person or entity other than the payees described in the Plan. In such
a case, any amounts due the Participant (or his or

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    her beneficiaries) under this Plan will be reduced by the actuarial value of
the payments required to be made to such other person or entity.

  (a)   Actuarial value will be determined using the factors and methodology
described in Section 3.06 below (in the case of lump sums) and using the
actuarial assumptions in the underlying Pension Plan in all other cases.     (b)
  In dividing a Participant’s benefit between the Participant and another person
or entity, consistent actuarial assumptions and methodologies will be used so
that there is no increased actuarial cost to the Company.

2.11   Funding. Participants have the status of general unsecured creditors of
the Company and the Plan constitutes a mere promise by the Company to make
benefit payments in the future. The Company may, but need not, fund benefits
under the Plan through a trust. If it does so, any trust created by the Company
and any assets held by the trust to assist it in meeting its obligations under
the Plan will conform to the terms of the model trust, as described in Internal
Revenue Service Revenue Procedure 92-64, but only to the extent required by
Internal Revenue Service Revenue Procedure 92-65. It is the intention of the
Company and Participants that the Plan be unfunded for tax purposes and for
purposes of Title I of ERISA.       Any funding of benefits under this Plan will
be in the Company’s sole discretion. The Company may set and amend the terms
under which it will fund and may cease to fund at any time.   2.12  
Construction. The Company shall have full discretion to construe and interpret
the terms and provisions of this Plan, to make factual determinations and to
remedy possible inconsistencies and omissions. The Company’s interpretations,
constructions and remedies shall be final and binding on all parties, including
but not limited to the Affiliated Companies and any Participant or beneficiary.
The Company shall administer such terms and provisions in a uniform and
nondiscriminatory manner and in full accordance with any and all laws applicable
to the Plan.   2.13   Governing Law. This Plan shall be governed by the law of
the State of California, except to the extent superseded by federal law.   2.14
  Actions by Company. Any powers exercisable by the Company under the Plan shall
be utilized by written resolution adopted by the Board of Directors or its
delegate. The Board of Directors may by written resolution delegate any of the
Company’s powers under the Plan and any such delegations may provide for
subdelegations, also by written resolution.   2.15   Plan Representatives. Those
authorized to act as Plan representatives will be designated in writing by the
Board of Directors or its delegate.

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2.16   Number. The singular, where appearing in this Plan, will be deemed to
include the plural, unless the context clearly indicates the contrary.

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ARTICLE III
Lump Sum Election
          This Article only applies with respect to Grandfathered Amounts. See
Appendix 1 and Appendix 2 for the distribution rules that apply to other
benefits earned under the Plan.

3.01   In General. This Article sets forth the rules under which Participants
may elect to receive their benefits in a lump sum. Except as provided in
Section 3.05, this Article does not apply to employees in cases where benefits
under a particular Program are automatically payable in lump sum form under
Article II. This Article will not apply if a particular Program so provides.  
3.02   Election. Participants may elect to have their benefits paid in the form
of a single lump sum under this Section.

  (a)   An election to take a lump sum may be made at any time during the 60-day
period prior to Termination of Employment and covers both—

  (1)   Benefits payable to the Participant during his or her lifetime, and    
(2)   Survivor benefits (if any) payable to the Participant’s beneficiary,
including preretirement death benefits (if any) payable to the Participant’s
spouse.

  (b)   An election does not become effective until the earlier of:

  (1)   the Participant’s Termination of Employment, or     (2)   the
Participant’s death.

  (c)   Before the election becomes effective, it may be revoked.     (d)   If a
Participant does not have a Termination of Employment within 60 days after
making an election, the election will never take effect.     (e)   An election
may only be made once. If it fails to become effective after 60 days or is
revoked before becoming effective, it cannot be made again at a later time.    
(f)   After a Participant has a Termination of Employment, no election can be
made.     (g)   If a Participant dies before making a lump sum election, his or
her spouse may not make a lump sum election with respect to any benefits which
may be due the spouse.

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  (h)   Elections to receive a lump sum must be made in writing and must include
spousal consent if the Participant is married. Elections and spousal consent
must be witnessed by a Plan representative or a notary public.

3.03   Lump Sum—Retirement Eligible. If a Participant with a valid lump sum
election in effect under Section 3.02 has a Termination of Employment after he
or she is entitled to commence benefits under the Pension Plans, payments will
be made in accordance with this Section.

  (a)   Monthly benefit payments will be made for up to 12 months, commencing
the first of the month following Termination of Employment. Payments will be
made:

  (1)   in the case of a Participant who is not married on the date benefits are
scheduled to commence, based on a straight life annuity for the Participant’s
life and ceasing upon the Participant’s death should he or she die before the
12 months elapse, or     (2)   in the case of a Participant who is married on
the date benefits are scheduled to commence, based on a joint and survivor
annuity form—

  (A)   with the survivor benefit equal to 50% of the Participant’s benefit;    
(B)   with the Participant’s spouse as the survivor annuitant;     (C)  
determined by using the contingent annuitant option factors used to convert
straight life annuities to 50% joint and survivor annuities under the Northrop
Grumman Retirement Plan; and     (D)   with all payments ceasing upon the death
of both the Participant and his or her spouse should they die before the
12 months elapse.

  (b)   As of the first of the 13th month, the present value of the remaining
benefit payments will be paid in a single lump sum. Payment of the lump sum will
be made to the Participant if he or she is still alive, or, if not, to his or
her surviving spouse, if any.     (c)   No lump sum payment will be made if:

  (1)   The Participant is receiving monthly benefit payments in the form of a
straight life annuity and the Participant dies before the time the lump sum
payment is due.

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  (2)   The Participant is receiving monthly benefit payments in a joint and
survivor annuity form and the Participant and his or her spouse both die before
the time the lump sum payment is due.

  (d)   A lump sum will be payable to a Participant’s spouse as of the first of
the month following the date of the Participant’s death, if:

  (1)   the Participant dies after making a valid lump sum election but prior to
commencement of any benefits under this Plan;     (2)   the Participant is
survived by a spouse who is entitled to a preretirement surviving spouse benefit
under this Plan; and     (3)   the spouse survives to the first of the month
following the date of the Participant’s death.

3.04   Lump Sum—Not Retirement Eligible. If a Participant with a valid lump sum
election in effect under Section 3.02 has a Termination of Employment before he
or she is entitled to commence benefits under the Pension Plans, payments will
be made in accordance with this Section.

  (a)   No monthly benefit payments will be made.     (b)   Following
Termination of Employment, a single lump sum payment of the benefit will be made
on the first of the month following 12 months after the date of the
Participant’s Termination of Employment.     (c)   A lump sum will be payable to
a Participant’s spouse as of the first of the month following the date of the
Participant’s death, if:

  (1)   the Participant dies after making a valid lump sum election but prior to
commencement of any benefits under this Plan;     (2)   the Participant is
survived by a spouse who is entitled to a preretirement surviving spouse benefit
under this Plan; and     (3)   the spouse survives to the first of the month
following the date of the Participant’s death.

  (d)   No lump sum payment will be made if the Participant is unmarried at the
time of death and dies before the time the lump sum payment is due.

3.05   Lump Sums with CIC Severance Plan Election. A Participant who elects lump
sum payments of all his or her nonqualified benefits under the CIC Plans is
entitled to have his or her benefits paid as a lump sum calculated under the
terms of the applicable CIC Plan. Otherwise, benefit payments are governed by
the general provisions of this Article, which provide different rules for
calculating the amount of lump sum payments.

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3.06   Calculation of Lump Sum.

  (a)   The factors to be used in calculating the lump sum are as follows:

  (1)   Interest: Whichever of the following two rates that produces the smaller
lump sum:

  (A)   the discount rate used by the Company for purposes of Statement of
Financial Accounting Standards No. 87 of the Financial Accounting Standards
Board as disclosed in the Company’s annual report to shareholders for the year
end immediately preceding the date of distribution, or     (B)   the applicable
interest rate that would be used to calculate a lump sum value for the benefit
under the Pension Plans.

  (2)   Mortality: the applicable mortality table, which would be used to
calculate a lump sum value for the benefit under the Pension Plans.     (3)  
Increase in Section 415 Limit: 4% per year.     (4)   Age: Age rounded to the
nearest month on the date the lump sum is payable.     (5)   Variable Unit
Values: Variable Unit Values are presumed not to increase for future periods
after the date the lump sum is payable.

  (b)   The annuity to be converted to a lump sum will be the remaining annuity
currently payable to the Participant or his or her beneficiary at the time the
lump sum is due.

  (1)   For example, assume a Participant is receiving benefit payments in the
form of a 50% joint and survivor annuity.     (2)   If the Participant and the
survivor annuitant are both still alive at the time the lump sum payment is due,
the present value calculation will be based on the remaining benefits that would
be paid to both the Participant and the survivor in the annuity form.     (3)  
If only the survivor is alive, the calculation will be based solely on the
remaining 50% survivor benefits that would be paid to the survivor.     (4)   If
only the Participant is alive, the calculation will be based solely on the
remaining benefits that would be paid to the Participant.     (5)   In the case
of a Participant who dies prior to commencement of benefits under this Plan so
that only a preretirement surviving

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      spouse benefit (if any) is payable, the lump sum will be based solely on
the value of the preretirement surviving spouse benefit.

  (c)   In the case of a lump-sum under Section 3.05 (related to lump sums with
a CIC Severance Plan election), the lump-sum amount will be calculated as
described in that section and the rules of this Section 3.06 are not used.

3.07   Spousal consent. Spousal consent, as required for elections as described
above, need not be obtained if the Company determines that there is no spouse or
the spouse cannot be located.

* * *
          IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed
by a duly authorized officer on this 21st day of December, 2007.

            NORTHROP GRUMMAN CORPORATION
      By:   /s/ Debora L. Catsavas         Debora L. Catsavas        Vice
President, Compensation,
Benefits and HRIS   

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APPENDIX 1 — 2005-2007 TRANSITION RULES
          This Appendix 1 provides the distribution rules that apply to the
portion of benefits under the Plan subject to Code section 409A for Participants
with benefit commencement dates after January 1, 2005 and before January 1,
2008.

1.01   Election. Participants scheduled to commence payments during 2005 may
elect to receive both pre-2005 benefit accruals and 2005 benefit accruals in any
optional form of benefit available under the Plan as of December 31, 2004.
Participants electing optional forms of benefits under this provision will
commence payments on the Participant’s selected benefit commencement date.  
1.02   2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 & Q&A-20,
Participants commencing payments in 2005 from the Plan may elect a form of
distribution from among those available under the Plan on December 31, 2004, and
benefit payments shall begin at the time elected by the Participant.

  (a)   Key Employees. A Key Employee Separating from Service on or after
July 1, 2005, with Plan distributions subject to Code section 409A scheduled to
be paid in 2006 and within six months of his date of Separation from Service,
shall have such distributions delayed for six months from the Key Employee’s
date of Separation from Service. The delayed distributions shall be paid as a
single sum with interest at the end of the six month period and Plan
distributions will resume as scheduled at such time. Interest shall be computed
using the retroactive annuity starting date rate in effect under the Northrop
Grumman Pension Plan on a month-by-month basis during such period (i.e., the
rate may change in the event the period spans two calendar years).
Alternatively, the Key Employee may elect under IRS Notice 2005-1, Q&A-20 to
have such distributions accelerated and paid in 2005 without the interest
adjustment, provided, such election is made in 2005.     (b)   Lump Sum Option.
During 2005, a temporary immediate lump sum feature shall be available as
follows:

  (i)   In order to elect a lump sum payment pursuant to IRS Notice 2005-1,
Q&A-20, a Participant must be an elected or appointed officer of the Company and
eligible to commence payments under the underlying qualified pension plan on or
after June 1, 2005 and on or before December 1, 2005;     (ii)   The lump sum
payment shall be made in 2005 as soon as feasible after the election; and    
(iii)   Interest and mortality assumptions and methodology for calculating lump
sum amount shall be based on the Plan’s procedures for calculating lump sums as
of December 31, 2004.

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1.03   2006 and 2007 Commencements. Pursuant to IRS transition relief, for all
benefit commencement dates in 2006 and 2007 (provided election is made in 2006
or 2007), distribution of Plan benefits subject to Code section 409A shall begin
12 months after the later of: (a) the Participant’s benefit election date, or
(b) the underlying qualified pension plan benefit commencement date (as
specified in the Participant’s benefit election form). Payments delayed during
this 12-month period will be paid at the end of the period with interest.
Interest shall be computed using the retroactive annuity starting date rate in
effect under the Northrop Grumman Pension Plan on a month-by-month basis during
such period (i.e., the rate may change in the event the period spans two
calendar years).

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APPENDIX 2 — POST 2007
DISTRIBUTION OF 409A AMOUNTS
          The provisions of this Appendix 2 shall apply only to the portion of
benefits under the Plan that are subject to Code section 409A with benefit
commencement dates on or after January 1, 2008. Distribution rules applicable to
the Grandfathered Amounts are set forth in Articles II and III, and Appendix 1
addresses distributions of amounts subject to Code section 409A with benefit
commencement dates after January 1, 2005 and prior to January 1, 2008.

2.01   Time of Distribution. Subject to the special rules provided in this
Appendix 2, distributions to a Participant of his vested retirement benefit
shall commence as of the Payment Date.   2.02   Special Rule for Key Employees.
If a Participant is a Key Employee and age 55 or older at his Separation from
Service, distributions to the Participant shall commence on the first day of the
seventh month following the date of his Separation from Service (or, if earlier,
the date of the Participant’s death). Amounts otherwise payable to the
Participant during such period of delay shall be accumulated and paid on the
first day of the seventh month following the Participant’s Separation from
Service, along with interest on the delayed payments. Interest shall be computed
using the retroactive annuity starting date rate in effect under the Northrop
Grumman Pension Plan on a month-by-month basis during such delay (i.e., the rate
may change in the event the delay spans two calendar years).   2.03   Forms of
Distribution. Subject to the special rules provided in this Appendix 2, a
Participant’s vested retirement benefit shall be distributed in the form of a
single life annuity. However, a Participant may elect an optional form of
benefit up until the Payment Date. The optional forms of payment are:

  (a)   50% joint and survivor annuity     (b)   75% joint and survivor annuity
    (c)   100% joint and survivor annuity.

If a Participant is married on his Payment Date and elects a joint and survivor
annuity, his survivor annuitant will be his spouse unless some other survivor
annuitant is named with spousal consent. Spousal consent, to be effective, must
be submitted in writing before the Payment Date and must be witnessed by a Plan
representative or notary public. No spousal consent is necessary if the Company
determines that there is no spouse or that the spouse cannot be found.

2.04   Death. If a married Participant dies before the Payment Date, a death
benefit will be payable to the Participant’s spouse commencing 90 days after the
Participant’s death. The death benefit will be a single life annuity in an
amount equal to the survivor portion of a Participant’s vested retirement
benefit based on a 100% joint and survivor annuity determined on the
Participant’s date of death. This benefit is

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    also payable to a Participant’s domestic partner who is properly registered
with the Company in accordance with procedures established by the Company.  
2.05   Actuarial Assumptions. Except as provided in Section 2.06 of this
Appendix 2, all forms of payment under this Appendix 2 shall be actuarially
equivalent life annuity forms of payment, and all conversions from one such form
to another shall be based on the following actuarial assumptions:       Interest
Rate:           6%       Mortality Table:      RP-2000 Mortality Table projected
15 years for future standardized cash balance factors

2.06   Accelerated Lump Sum Payouts.

  (a)   Post-2007 Separations. Notwithstanding the provisions of this
Appendix 2, for Participants who Separate from Service on or after January 1,
2008, if the present value of (a) the vested portion of a Participant’s
retirement benefit and (b) other vested amounts under nonaccount balance plans
that are aggregated with the retirement benefit under Code section 409A,
determined on the first of the month coincident with or following the date of
his Separation from Service, is less than or equal to $25,000, such benefit
amount shall be distributed to the Participant (or his spouse or domestic
partner, if applicable) in a lump sum payment. Subject to the special timing
rule for Key Employees under Section 2.02 of this Appendix 2, the lump sum
payment shall be made within 90 days after the first of the month coincident
with or following the date of the Participant’s Separation from Service.     (b)
  Pre-2008 Separations. Notwithstanding the provisions of this Appendix 2, for
Participants who Separate from Service before January 1, 2008, if the present
value of (a) the vested portion of a Participant’s retirement benefit and (b)
other vested amounts under nonaccount balance plans that are aggregated with the
retirement benefit under Code section 409A, determined on the first of the month
coincident with or following the date the Participant attains age 55, is less
than or equal to $25,000, such benefit amount shall be distributed to the
Participant (or his spouse or domestic partner, if applicable) in a lump sum
payment within 90 days after the first of the month coincident with or following
the date the Participant attains age 55, but no earlier that January 1, 2008.  
  (c)   Conflicts of Interest. The present value of a Participant’s vested
retirement benefit shall also be payable in an immediate lump sum to the extent
required under conflict of interest rules for government service and permissible
under Code section 409A.     (d)   Present Value Calculation. The conversion of
a Participant’s retirement benefit into a lump sum payment and the present value
calculations under

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      this Section 2.06 of this Appendix 2 shall be based on the GATT
assumptions in effect under the Northrop Grumman Pension Plan, and will be based
on the Participant’s immediate benefit if the Participant is 55 or older at
Separation from Service. Otherwise, the calculation will be based on the benefit
amount the Participant will be eligible to receive at age 55.

2.07   Effect of Early Taxation. If the Participant’s benefits under the Plan
are includible in income pursuant to Code section 409A, such benefits shall be
distributed immediately to the Participant.   2.08   Permitted Delays.
Notwithstanding the foregoing, any payment to a Participant under the Plan shall
be delayed upon the Company’s reasonable anticipation of one or more of the
following events:

  (a)   The Company’s deduction with respect to such payment would be eliminated
by application of Code section 162(m); or     (b)   The making of the payment
would violate Federal securities laws or other applicable law;

provided, that any payment delayed pursuant to this Section 2.08 of this
Appendix 2 shall be paid in accordance with Code section 409A.

2.09   Special Tax Distribution. On the date a Participant’s retirement benefit
is reasonably ascertainable within the meaning of IRS regulations under Code
section 3121(v)(2), an amount equal to the Participant’s portion of the FICA tax
withholding will be distributed in a single lump sum payment. This payment will
reduce the Participant’s future benefit payments under the Plan. This reduction
shall be calculated using GATT assumptions in effect under the Northrop Grumman
Pension Plan and a cost of living adjustment of 4%.

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