exv10wi






Exhibit 10(i)




NORTHROP GRUMMAN




SUPPLEMENTAL PLAN 2



(Amended and Restated Effective as of January 1, 2009)







 









 








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 Special Tax Distribution 
	 	 	6	 
	2.08 Amendment and Plan Termination 
	 	 	6	 
	2.09 Not an Employment Agreement 
	 	 	6	 
	2.10 Assignment of Benefits 
	 	 	7	 
	2.11 Nonduplication of Benefits 
	 	 	7	 
	2.12 Funding 
	 	 	7	 
	2.13 Construction 
	 	 	8	 
	2.14 Governing Law 
	 	 	8	 
	2.15 Actions by Company and Claims Procedures 
	 	 	8	 
	2.16 Plan Representatives 
	 	 	8	 
	2.17 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	 






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	1.02 2005 Commencements 
	 	 	14	 
	1.03 2006 and 2007 Commencements 
	 	 	15	 
	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	 





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

APPENDIX I Officers Supplemental Executive Retirement Program II




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     The Northrop Grumman Supplemental Plan 2 (the “Plan”) is hereby amended and restated effective
as of January 1, 2009. This restatement amends the January 1, 2005 restatement of the Plan and
includes changes that apply to Grandfathered Amounts.



     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





 









 











	 	 	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)






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




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	 	 	Participant may
make a beneficiary designation, which may be changed at any 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 under a Program 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 under a Program 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




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	 	 	 	available under the
underlying qualified pension plan at the time payment of the Grandfathered Amounts
commences. The conversion factors for 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	 	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 be based on all benefits under the Plan,
including Grandfathered Amounts. This payment will reduce the Participant’s future benefit
payments under the Plan on an actuarial basis.
	 
	2.08	 	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.
	 
	2.09	 	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.




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	2.10	 	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.
	 
	 	 	Notwithstanding the foregoing, all or a portion of a Participant’s benefit may be paid to
another person as specified in a domestic relations order that the plan administrator
determines is qualified (a “Qualified Domestic Relations Order”). For this purpose, a
Qualified Domestic Relations Order means a judgment, decree, or order (including the
approval of a settlement agreement) which is:






	 	(1)	 	issued pursuant to a State’s domestic relations law;
	 
	 	(2)	 	relates to the provision of child support, alimony payments or marital
property rights to a spouse, former spouse, child or other dependent of the
Participant;
	 
	 	(3)	 	creates or recognizes the right of a spouse, former spouse, child or other
dependent of the Participant to receive all or a portion of the Participant’s benefits
under the Plan; and
	 
	 	(4)	 	meets such other requirements established by the plan administrator.






	 	 	The plan administrator shall determine whether any document received by it is a Qualified
Domestic Relations Order. In making this determination, the plan administrator may
consider the rules applicable to the “domestic relations orders” under Code section 414(p)
and ERISA section 206(d), and such other rules and procedures as it deems relevant.
	 
	2.11	 	Nonduplication of Benefits. This Section applies if, despite Section 2.10, 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 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.






	2.12	 	Funding. Participants have the status of general unsecured creditors of the Company
and the Plan constitutes a mere promise by the Company to make





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	 	 	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.
	 
	2.13	 	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.
	 
	2.14	 	Governing Law. This Plan shall be governed by the law of the State of California,
except to the extent superseded by federal law.
	 
	2.15	 	Actions by Company and Claims Procedures. 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.
	 
	 	 	The Company’s standardized “Northrop Grumman Nonqualified Retirement Plans Claims and
Appeals Procedures” shall apply in handling claims and appeals under this Plan.
	 
	2.16	 	Plan Representatives. Those authorized to act as Plan representatives will be
designated in writing by the Board of Directors or its delegate.
	 
	2.17	 	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





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	 	 	general provisions of this Article,
which provide different rules for calculating the amount of lump sum payments.
	 
	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.




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	 	(5)	 	In the case of a Participant who dies prior to commencement
of benefits under this Plan so that only a preretirement surviving 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 17th day of December, 2009.




	 	 	 	 	 	 	 
	 	 	NORTHROP GRUMMAN CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Debora L. Catsavas
	 	 
	 

	 	 	 	 	 	 
	 	 	Debora L. Catsavas	 	 
	 	 	Vice President,
Compensation, Benefits & International	 	 






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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




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	 	 	and survivor annuity determined on the Participant’s date of death. This
benefit is 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.




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	 	(d)	 	Present Value Calculation. The conversion of a Participant’s
retirement benefit into a lump sum payment and the present value calculations under
this Section 2.06 of this Appendix 2 shall be based on the actuarial assumptions in
effect under the Northrop Grumman Pension Plan for purposes of calculating lump sum
amounts, 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.






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