exv10wcc






Exhibit 10(cc)




LITTON INDUSTRIES, INC.




RESTORATION PLAN



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



 









 





TABLE OF CONTENTS





	 	 	 	 	 
	Section
	 	Page
	Section 1 – General
	 	 	1	 
	1.1 Purpose
	 	 	1	 
	1.2 Coverage
	 	 	1	 
	 
	 	 	 	 
	Section 2 - Participating Divisions and Subsidiaries
	 	 	1	 
	2.1 Participating Division or Subsidiary
	 	 	1	 
	 
	 	 	 	 
	Section 3 – Definitions
	 	 	1	 
	3.1 Actuarial Equivalent
	 	 	1	 
	3.2 Affected Employee
	 	 	1	 
	3.3 Affiliate Company or Affiliated Companies
	 	 	2	 
	3.4 Annual Benefit
	 	 	2	 
	3.5 Annual Benefit Statement
	 	 	2	 
	3.6 Annual Compensation
	 	 	2	 
	3.7 Beneficiary
	 	 	2	 
	3.8 Board
	 	 	2	 
	3.9 Break in Service Period
	 	 	2	 
	3.10 Change in Control
	 	 	3	 
	3.11 Code
	 	 	4	 
	3.12 Committee
	 	 	4	 
	3.13 Coverage Date
	 	 	5	 
	3.14 Designated Foreign Corporation
	 	 	5	 
	3.15 Director
	 	 	5	 
	3.16 Grandfathered Amount
	 	 	5	 
	3.17 Interest
	 	 	5	 
	3.18 Key Employee
	 	 	5	 
	3.19 Litton
	 	 	5	 
	3.20 Mandatory Contribution
	 	 	6	 
	3.21 Payment Date
	 	 	6	 
	3.22 Pension Plan and Pension Plans
	 	 	6	 
	3.23 Plan
	 	 	6	 
	3.24 Plan Administrator
	 	 	6	 
	3.25 Plan Year
	 	 	6	 
	3.26 Restricted Amount
	 	 	6	 
	3.27 Retirement
	 	 	6	 
	3.28 Retirement Account Restricted Amount
	 	 	7	 
	3.29 Savings Account Restricted Amount
	 	 	7	 
	3.30 Separation from Service or Separates from Service
	 	 	7	 
	3.31 Spouse
	 	 	7	 
	3.32 Termination of Employment
	 	 	7	 






 









 





(ii)




	 	 	 	 	 
	Section
	 	Page
	3.33 Trust
	 	 	7	 
	3.34 Trust Agreement
	 	 	7	 
	3.35 Trustee
	 	 	7	 
	3.36 Year(s) of Service
	 	 	7	 
	 
	 	 	 	 
	Section 4 - Participation
	 	 	7	 
	4.1 Participation
	 	 	7	 
	 
	 	 	 	 
	Section 5 - Retirement Dates
	 	 	7	 
	5.1 Normal Retirement Date
	 	 	8	 
	5.2 Early-Retirement Date
	 	 	8	 
	5.3 Disability Retirement Date
	 	 	8	 
	 
	 	 	 	 
	Section 6 - Amount of Retirement Income
	 	 	8	 
	6.1 Normal Retirement Benefit
	 	 	8	 
	6.2 Early Retirement Benefit
	 	 	9	 
	6.3 Disability Retirement Benefit
	 	 	9	 
	6.4 Vesting Schedule
	 	 	9	 
	6.5 Initial and Subsequent Payment Dates
	 	 	10	 
	6.6 Compensation Considered
	 	 	10	 
	 
	 	 	 	 
	Section 7 - Death Benefits
	 	 	10	 
	7.1 Pre-Retirement Spouse Benefit
	 	 	10	 
	7.2 Death After Retirement
	 	 	11	 
	 
	 	 	 	 
	Section 8 - Termination of Employment
	 	 	11	 
	8.1 Rights of Affected Employees
	 	 	11	 
	8.2 Transfer of Employment
	 	 	11	 
	 
	 	 	 	 
	Section 9 - Forms of Retirement Income
	 	 	11	 
	9.1 Joint and Survivor Income Annuity
	 	 	11	 
	9.2 Straight Life Annuity
	 	 	12	 
	9.3 Spousal Death Within Two Years After Retirement
	 	 	12	 
	9.4 Annuity Options
	 	 	12	 
	9.5 Mandatory Cashout
	 	 	13	 
	9.6 Optional Payment Forms
	 	 	14	 
	9.7 Special Tax Distribution
	 	 	14	 
	 
	 	 	 	 
	Section 10 - Miscellaneous
	 	 	15	 
	10.1 Receipt and Release for Payments
	 	 	15	 
	10.2 Dispute as to Benefit Payments
	 	 	15	 
	10.3 No Contract of Employment
	 	 	15	 
	10.4 Commutation of Benefit
	 	 	15	 






 









 





(iii)




	 	 	 	 	 
	Section
	 	Page
	 
	 	 	 	 
	Section 11 - Amendment or Discontinuance
	 	 	15	 
	11.1 Amendment of Plan
	 	 	15	 
	11.2 Freezing Plan Benefits
	 	 	16	 
	11.3 Termination of Plan
	 	 	16	 
	11.4 Merger or Consolidation
	 	 	16	 
	 
	 	 	 	 
	Section 12 - Plan Administration
	 	 	16	 
	12.1 Plan Administrator
	 	 	16	 
	 
	 	 	 	 
	Section 13 – Change of Control Provisions
	 	 	17	 
	13.1 Change of Control
	 	 	17	 
	13.2 Eligibility for Retirement Benefits
	 	 	17	 
	13.3 Vesting – Change of Control
	 	 	17	 
	13.4 Benefit Forms after April 2, 2001
	 	 	17	 
	13.5 Payments to Trust
	 	 	18	 
	13.6 Administrative Procedures
	 	 	19	 
	13.7 Enforcement
	 	 	19	 
	 
	 	 	 	 
	Appendices
	 	 	 	 
	Appendix 1 – Participating Divisions and Subsidiaries
	 	 	 	 
	Appendix A – Assumptions to Calculate the Present Value of Remaining
Restoration Plan Benefits
	 	 	 	 
	Appendix B – 2005-2007 Transition Rules
	 	 	 	 
	Appendix C – Post 2007 Distribution of 409A Amounts
	 	 	 	 
	Appendix Regarding Acquisition Of Litton Industries, Inc.
	 	 	 	 
	Appendix Regarding Investment Matters
	 	 	 	 
	Appendix Regarding Plan Administration
	 	 	 	 






 









 




The Litton Industries, Inc. Restoration Plan (the “Plan”) became effective January 1, 1987 and 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.



Section 1 – General





	1.1	 	Purpose – The purpose of the Plan is to provide, on an unfunded basis, the
aggregate amount of Annual Benefits earned by the Affected Employees of the Participating
Divisions and Subsidiaries of Litton Industries, Inc., a Delaware corporation, and any unit
thereof, enumerated in Section 2 and hereinafter referred to collectively as the “Company”.
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.
	 
	1.2	 	Coverage






	 	A.	 	Unless otherwise provided, the provisions of the Plan shall apply to any
Affected Employee who incurs a Termination of Employment on or after January 1, 1989.
	 
	 	B.	 	Any subsequent amendment to this Plan shall apply only to an Affected Employee
who incurs a Termination of Employment on or after the effective date of said
amendment, unless said amendment provides otherwise.




Section 2 – Participating Divisions and Subsidiaries





	2.1	 	Participating Division or Subsidiary – The Participating Divisions and Subsidiaries
and their respective participation dates are listed in Appendix 1 attached hereto. When the
name or status of a Participating Division or Subsidiary is changed, the change shall be
effective for Plan purposes.




Section 3 – Definitions





	 	 	As used in the Plan, the following terms shall have the meanings defined below.
	 
	3.1	 	Actuarial Equivalent – Except as otherwise provided by the next sentence, the
definition of such term under the Litton Industries, Inc. Retirement Plan “B”, as amended. On
or after a Change of Control, an Affected Employee’s benefit, a Spouse’s benefit, or a
Beneficary’s benefit, shall be computed using the actuarial factors set forth in Appendix A
hereof.
	 
	3.2	 	Affected Employee – An Affected Employee, for any particular Plan Year, is an
individual employed as a common law employee by the
Company (except that an individual who is a participant under the Litton Supplemental
Retirement Plan, as amended, for such Plan Year shall, notwithstanding any other provision
of the Plan, be




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	 	 	deemed to have a Retirement Account Restricted Amount of zero for such Plan
Year) 8% of whose Annual Compensation for that particular Plan Year exceeds the maximum
amount of elective deferrals available to such Affected Employee to a Code section 401(k)
plan for such Plan Year and who was a participant in the Litton Financial Security and
Savings Program, as amended from time to time, (the “FSSP”) for such Plan Year and who
contributed his legally permissable maximum amount to the FSSP for such Plan Year.
	 
	3.3	 	Affiliate Company or Affiliated Companies– Each company fifty percent (50%) or more
of whose voting stock is owned directly or indirectly by Litton Industries, Inc., its
successors or assigns, and which company is not a participating division or subsidiary of the
Plan.
	 
	3.4	 	Annual Benefit – The portion of the total annual retirement benefit that an Affected
Employee is entitled to with respect to a particular Plan Year, determined in accordance with
Section 6.1, Section 6.2, or Section 6.3, whichever is applicable.
	 
	3.5	 	Annual Benefit Statement – The statement given to an Affected Employee for each Plan
Year such Affected Employee is entitled to an Annual Benefit under the Plan. All such Annual
Benefit Statements shall be in the form prescribed by the Plan Administrator.
	 
	3.6	 	Annual Compensation – An Affected Employees wages paid or deferred by the Company
(limited, however, to wages paid or deferred by the Company on or after the date the
Participating Division or Subsidiary by which the Affected Employee is employed became a
Participating Division or Subsidiary), as determined under section 3121 of the Code without
regard to the dollar limitation of section 3121(a)(1) of the Code, excluding therefrom any
amount so paid which represents (a) reimbursed expenses, (b) wages not paid in cash, (c) cash
received pursuant to the exercise of a stock appreciation right, or (d) certain other wage
items as may be agreed to from time to time between the Company and one or more Affected
Employees.
	 
	 	 	Wages deferred by an Affected Employee shall be treated as Annual Compensation only for the
Plan Year of deferral and not for the Plan Year of actual payment.
	 
	3.7	 	Beneficiary means the Spouse of an Affected Employee or, if there is no surviving
Spouse at the time of the Affected Employee’s death or if the Spouse has previously given
written consent, such other person(s) designated by the Affected Employee on a form provided
by the Plan Administrator to receive any payment or payments becoming due to a Beneficiary
under the Plan. Such designation may be changed from time to time, except that a designated
Beneficiary may not be changed after the commencement of retirement benefits. Any spousal
consent required hereunder shall be invalid unless signed by the Spouse and witnessed by the Plan Administrator, his representative or a
notary public.
	 
	3.8	 	Board – The Board of Directors of Litton Industries, Inc., a Delaware corporation.
	 
	3.9	 	Break in Service Period – The definition of such term under the Litton Industries,
Inc. Retirement Plan “B”, as amended from time to time.




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	3.10	 	Change in Control shall mean –






	 	(a)	 	The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty percent (30%) or more of either (1) the
then outstanding shares of common stock of the Company (the “Outstanding Company Common
Stock”) or (2) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of Directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this Section
3.10(a), the following acquisitions of stock shall not constitute a Change of Control:
(A) any acquisition directly from the Company, (B) any acquisition by the Company, (C)
any acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or (D) any acquisition by
any corporation pursuant to a transaction which complies with clauses (1), (2) and (3)
of Section 3.10(c); or
	 
	 	(b)	 	Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a Director subsequent to the date hereof whose
election, or nomination subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of a least a majority of
the Directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of Directors or
other actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
	 
	 	(c)	 	Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless following such Business Combination, (1) all or
substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (2) no person




- 3 -









 






	 	 	 	(excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, thirty percent (30%) or more of common
stock of the corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and (3) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
	 
	 	(d)	 	Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.






	3.11	 	Code – The Internal Revenue Code of 1986, as amended.
	 
	3.12	 	Committee shall mean –






	 	(a)	 	The Compensation and Selection Committee of the Board.
	 
	 	(b)	 	Notwithstanding Section 3.12(a), upon a Change of Control, the Committee shall
mean exclusively the “special administrators.” The “special administrators” shall be
the individuals who constituted the Committee immediately prior to the Change of
Control. The “special administrators” shall constitute the Committee until the last
day of the eighteenth month following the month in which the Change of Control
occurred. The “special administrators” shall have all rights and authority reserved to
the Committee under this Plan.
	 
	 	(c)	 	If a “special administrator” dies, becomes disabled, or resigns as “special
administrator” during the period that the “special administrators” constitute the
Committee, the remaining “special administrator(s)” shall continue to serve as the
Committee without interruption. A successor “special administrator” shall be required
only if there are less than three (3) remaining “special administrators.” If a
successor “special administrator” is required, the successor shall be the individual
who, at that time, (1) is not already a “special administrator,” and (2) is not a
Participant or currently an employee of the Company, and (3) was the
member of the Board immediately prior to the Change of Control with the longest
period of service on the Board, and (4) agrees to serve as a “special
administrator.”
	 
	 	(d)	 	If a successor “special administrator” is required and there are no individuals
remaining who satisfy the criteria described in Section 3.12(c), then a successor
“special administrator” shall either be appointed by the Trustee or, in the Trustee’s
discretion, the Trustee shall submit the selection of the “special administrator(s)” to
an arbitrator, the costs of which shall be borne fully by the Company, to be decided in
accordance with the American Arbitration Association Commercial Arbitration Rules then
in effect. If at any time, there are no remaining “special 




- 4 -









 






	 	 	 	administrators,” the
Trustee shall act as the “special administrator” until the successor(s) is selected.






	3.13	 	Coverage Date – January 1, 1987, or the date an employee of the Company first becomes
an Affected Employee, if later.
	 
	3.14	 	Designated Foreign Corporation – An entity: (a) created under the laws of a country
other than the United States; (b) of which a majority of the voting shares are owned directly
or indirectly by Litton Industries, Inc.; and (c) with respect to which the Company has
entered into an agreement under section 3121(l) of the Code, and has satisfied the provisions
of section 406 of the Code.
	 
	3.15	 	Director – shall mean a member of the Board of Directors of Litton Industries, Inc.
	 
	3.16	 	Grandfathered Amount – Plan benefits that were earned and vested as of December 31,
2004 within the meaning of Code section 409A and official guidance thereunder.
	 
	3.17	 	Interest – The amount of interest (based on a stated rate of interest, compounded
annually, as determined by the Board or its delegate) with respect to the Retirement Account
and Savings Account Restricted Amounts of all Affected Employees for a particular Plan Year
with such rate of interest to be fixed for all of such Restricted Amounts and to commence on
the first day of the Plan Year succeeding such particular Plan Year and to continue for all
Plan Years thereafter; but such interest shall cease with respect to the Retirement Account
and Savings Account Restricted Amounts of any particular Affected Employee upon the later of:
(i) the last day of the month such Affected Employee is projected to attain his Normal
Retirement Date for purposes of determining the amount of such Affected Employee’s annual
retirement benefit pursuant to Section 6.1; or (ii) if such Affected Employee attains
Retirement after his Normal Retirement Date, the last day of the month such Affected Employee
attains Retirement.
	 
	3.18	 	Key Employee – An employee treated as a “specified employee” under Code section
409A(a)(2)(B)(i) of Litton or the Affiliated Companies (i.e., a key employee (as defined in
Code section 416(i) without regard to paragraph (5) thereof)) if Litton’s or an Affiliated
Company’s stock is publicly traded on an established
securities market or otherwise. Litton shall determine in accordance with a
uniform Litton policy which employees 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. For purposes of this Section only, “Affiliated
Company” means Litton and any other entity related to Litton under the rules of
Code section 414. The Affiliated Companies include Northrop Grumman Corporation
and its 80%-owned subsidiaries and may include other entities as well.
	 
	3.19	 	Litton – Litton Industries, Inc. or any successor thereto.




- 5 -









 






	3.20	 	Mandatory Contribution shall mean, as of a Change of Control, an amount equal to the
excess of “A” over “B,” where –






	 	(a)	 	“A” is one hundred twenty percent (120%) of the present value of all vested
benefits under the Plan determined under the factors set forth in Appendix A; and
	 
	 	(b)	 	“B” is the current value of the Trust as determined by the Trustee on the
business day immediately preceding the day that a Mandatory Contribution is paid to the
Trustee.






	3.21	 	Payment Date – The 1st of the month coincident with or following the later of (a) the
date the Affected Employee attains age 55, or (b) the date the Affected Employee Separates
from Service.
	 
	3.22	 	Pension Plan and Pension Plans – Any of the following:






	 	(a)	 	The Northrop Grumman Retirement Plan
	 
	 	(b)	 	The Northrop Grumman Retirement Plan—Rolling Meadows Site
	 
	 	(c)	 	The Northrop Grumman Retirement Value Plan (effective as of January 1, 2000)
	 
	 	(d)	 	The Northrop Grumman Electronics Systems – Space Division Salaried Employees’
Pension Plan (effective as of the Aerojet Closing Date)
	 
	 	(e)	 	The Northrop Grumman Electronics Systems – Space Division Union Employees’
Pension Plan (effective as of the Aerojet Closing Date)






“Aerojet Closing Date” means the Closing Date specified in the April 19, 2001 Asset Purchase
Agreement by and Between Aerojet-General Corporation and Northrop Grumman Systems
Corporation.




	3.23	 	Plan – Litton Industries, Inc. Restoration Plan.
	 
	3.24	 	Plan Administrator – The person appointed to administer the Plan pursuant to Section
12.
	 
	3.25	 	Plan Year – January 1, 1987 to December 31, 1987 and each calendar year thereafter.
	 
	3.26	 	Restricted Amount – As applied for any particular Plan Year to a particular Affected
Employee, the Restricted Amount of such Affected Employee shall be the amount, if any, by
which 8% of such Affected Employee’s Annual Compensation for the particular Plan Year under
consideration exceeds the maximum amount of elective deferrals available to such Affected
Employee to a Code section 401(k) plan for such Plan Year.
	 
	3.27	 	Retirement – An Affected Employee who incurs a Termination of Employment attains
Retirement under the Plan when he is eligible to and elects to receive his annual retirement
benefit under the Plan except that any Affected Employee who continues to be




- 6 -









 






	 	 	employed by the
Company after his Normal Retirement Date shall attain Retirement immediately upon his
Termination of Employment.
	 
	3.28	 	Retirement Account Restricted Amount – As applied for any particular Plan Year to a
particular Affected Employee, the Retirement Account Restricted Amount, if any, shall be that
portion of such Affected Employee’s Restricted Amount for such Plan Year which is equal to the
excess, if any, of 4% of such Affected Employee’s Annual Compensation for such Plan Year over
4% of such Affected Employee’s Annual Compensation for such Plan Year where such Annual
Compensation is limited to the annual compensation limit perscribed under Code section
401(a)(17) for such Plan Year.
	 
	3.29	 	Savings Account Restricted Amount – As applied for any particular Plan Year to a
particular Affected Employee, the Savings Account Restricted Amount of such Affected Employee
shall equal one-half of the excess of 8% of such Affected Employee’s Annual Compensation for
such Plan Year over 4% of such Affected Employee’s Annual Compensation for such Plan Year
where such Annual Compensation is limited to the Annual Compensation limit prescribed under
Code section 401(a)(17) for such Plan Year.
	 
	3.30	 	Separation from Service or Separates from Service – A “separation from service”
within the meaning of Code section 409A.
	 
	3.31	 	Spouse – A person who has been married to the Affected Employee throughout the
one-year period ending on the earlier of the date the Affected Employee’s annual retirement
benefit commences under the Plan, or the date of the Affected Employee’s death.
	 
	3.32	 	Termination of Employment – When an Affected Employee is discharged or quits from the
Company; but such term shall not include an authorized leave of absence from the Company.
	 
	3.33	 	Trust shall mean the Litton Industries, Inc., Restoration Plan Trust, as amended from
time to time.
	 
	3.34	 	Trust Agreement shall mean the terms of the agreement entered into between Litton
Industries, Inc., and the Trustee that establish the Trust.
	 
	3.35	 	Trustee shall mean the trustee of the Trust.
	 
	3.36	 	Year(s) of Service – The definition of such term under the Litton Industries, Inc.
Retirement Plan “B”, as amended.




Section 4 — Participation





	4.1	 	Participation – Effective January 1, 1987, each Affected Employee of the Company
shall be a participant in the Plan.




Section 5 — Retirement Dates





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	5.1	 	Normal Retirement Date – An Affected Employee’s sixty-fifth (65th) birthday.
	 
	5.2	 	Early Retirement Date – The date that an eligible Affected Employee elects to retire
and receive an early retirement benefit prior to his Normal Retirement Date. Except as
otherwise provided in the following sentence with respect to the surviving Spouse of a
deceased Affected Employee, an Affected Employee may not elect to receive an early retirement
benefit unless he is age fifty-five (55) or older and has at least five (5) Years of Service.
In the case of determining whether a Pre-Retirement Spouse benefit is payable in accordance
with Section 7.1 of the Plan, the Early Retirement Date of the deceased Affected Employee
shall be the date on which such Affected Employee would have attained age fifty-five (55) or
older had he lived.
	 
	5.3	 	Disability Retirement Date – The date that an eligible Affected Employee elects to
retire and receive a disability retirement benefit prior to his Normal Retirement Date. An
Affected Employee may not elect to receive a disability retirement benefit unless he is an
Affected Employee who becomes totally and permanently disabled while employed by the Company
and who has attained age fifty-five (55). An Affected Employee shall be deemed totally and
permanently disabled for the purpose of the Plan only when he will be in the opinion of a
qualified physician permanently, continuously and wholly prevented by bodily injuries or
disease for life from engaging in any occupation or employment for wage or profit, as long as
he is also entitled to disability benefits under the Federal Social Security Act.




Section 6 — Amount of Retirement Income





	6.1	 	Normal Retirement Benefit






	 	(a)	 	Any person who was an Affected Employee with respect to one or more Plan Years
and who attains Retirement on or after his Normal Retirement Date shall be entitled to
receive an annual retirement benefit which will be equal to (i) multiplied by (ii),
wherein: (i) is equal to the aggregate amount of such Affected Employee’s Annual
Benefit amounts with respect to all Plan Years during which such Affected Employee was
an Affected Employee, with each such amount being computed for each such Plan Year in
accordance with paragraphs (b)(1) and (2) below; and, wherein (ii) is equal to the
vested percentage of such Affected Employee, determined in accordance with Section 6.4,
in his annual retirement benefit.






	 	(b) 	(1)	 	For any particular Plan Year, an Affected Employee’s Annual Benefit
attributable to his Retirement Account Restricted Amount, if any, for such Plan Year
shall be equal to eighty-five percent (85%) of the Retirement Account Restricted Amount
of such Affected Employee for such Plan Year reduced by [[the sum of (i) plus (ii)]
multipled by (iii)], wherein: (i) is equal to the Retirement Account Restricted Amount
of such Affected Employee for such Plan Year; wherein (ii) is equal to the amount of
Interest with respect of (i) above; and, wherein (iii) is equal to either:




- 8 -









 












	 	 	 	(a)the Actuarial Equivalent factor, for such Plan Year, applicable under the
Litton Industries, Inc. Retirement Plan “B”, as amended, with respect to such
Affected Employee’s projected age at his Normal Retirement Date; or (b) if
such Affected Employee attains Retirement after his Normal Retirement Date,
the Actuarial Equivalent factor, for such Plan Year, under the Litton
Industries, Inc. Retirement Plan “B”, as amended, with respect to such
Affected Employee’s age when he attains Retirement.
	 
	 	(2)	 	For any particular Plan Year, an Affected Employee’s Annual
Benefit attributable to his Savings Account Restricted Amount shall be equal to
[[the sum of (i) plus (ii)] multiplied by (iii)], wherein: (i) is equal to the
Savings Account Restricted Amount of such Affected Employee for such Plan Year;
wherein (ii) is equal to the amount of Interest with respect to (i) above; and,
wherein (iii) is equal to either: (a) the Actuarial Equivalent factor, for such
Plan Year, applicable under the Litton Industries, Inc. Retirement Plan “B”, as
amended, with respect to such Affected Employee’s projected age at his Normal
Retirement Date; or (b) if such Affected Employee attains Retirement after his
Normal Retirement Date, the Actuarial Equivalent factor, for such Plan Year,
under the Litton Industries, Inc. Retirement Plan “B”, as amended, with respect
to such Affected Employee’s age when he attains Retirement.






	6.2	 	Early Retirement Benefit – At his Early Retirement Date an Affected Employee who
attains Retirement, or his surviving Spouse if a benefit is payable pursuant to Section 7.1 of
the Plan, shall be entitled to an annual early retirement benefit which will be equal to the
annual retirement benefit amount calculated pursuant to Section 6.1(b)(1) and (2) above for
such Affected Employee reduced by one-half percent (1/2%) for each full month by which his
Early Retirement Date precedes (i) his Normal Retirement Date, or (ii) attainment of age
sixty-two (62) for any Affected Employee who incurred a Termination of Employment on or after
January 1, 1997 and who has attained both age fifty-five (55) or more at such time and who has
at least seven (7) Years of Service (five (5) Years of Service for any Affected Employee whose
annual retirement benefit commences on or after January 1, 1999) at such time.
	 
	6.3	 	Disability Retirement Benefit – At his Disability Retirement Date an Affected
Employee who attains Retirement shall be entitled to an annual disability benefit which will
be equal to the normal benefit amount calculated pursuant to Section 6.1 (b)(1) and (2) above
for such Affected Employee reduced by one-half percent (1/2%) for each full month by which his
Disability Retirement Date precedes his Normal Retirement Date.
	 
	6.4	 	Vesting Schedule – An Affected Employee shall be vested in his annual retirement
benefit under the Plan according to the Company purchased retirement benefit vesting schedule
under the Litton Industries, Inc. Retirement Plan “B”, as amended from time to time, except
that: (i) for purposes of this Plan only, on the Disability Retirement Date of any Affected
Employee, such Affected Employee shall become one hundred percent (100%) vested in his annual
disability retirement benefit, notwithstanding his actual number of




- 9 -









 






	 	 	Year(s) of Service; and
(ii) for purposes of this Plan only, if an Affected Employee should die prior to incurring a
Termination of Employment, such Affected Employee’s Spouse, if any, shall become one hundred
percent (100%) vested in his annual retirement benefit, notwithstanding such Affected
Employee’s actual number of Year(s) of Service at the time of his death.
	 
	6.5	 	Initial and Subsequent Payment Dates – An Affected Employee’s annual retirement
benefit shall be payable in twelve (12) equal monthly installments commencing effective
the first of the month following the month the Affected Employee attains Retirement and
the first payment shall be made no later than sixty (60) days following the end of the
Plan Year in which the Affected Employee attains Retirement, except that no payment shall
be made until the date that an Affected Employee files with the Company a request for
payment of an annual retirement benefit on a form prescribed by the Plan Administrator.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	6.6	 	Compensation Considered – The following shall not be considered as compensation for
purposes of determining the amount of benefits under the Plan:






	 	(a)	 	any payment authorized by the Northrop Grumman Corporation Compensation
Committee that is (a) calculated pursuant to the method for determining a bonus amount
under the Annual Incentive Plan (AIP) for a given year, and (b) paid in lieu of such
bonus in the year prior to the year the bonus would otherwise be paid under the AIP,
and
	 
	 	(b)	 	any award payment under the Northrop Grumman Long-Term Incentive Cash Plan.




Section 7 — Death Benefits





	7.1	 	Pre-Retirement Spouse Benefit – If a married Affected Employee dies after becoming
either wholly or partially vested under this Plan and before commencing to receive an annual
retirement benefit, his surviving spouse shall be entitled to receive an annual benefit,
commencing on the first day of the month following the later of the date of death of the
Affected Employee or the date the Affected Employee would have attained his Early Retirement
Date, and terminating with the last monthly payment preceding the surviving Spouse’s death. In
the case of an Affected Employee who dies before commencing to receive an annual retirement
benefit, but after he has attained his Early Retirement Date, the amount of annual benefit to
which such Affected Employee’s surviving Spouse shall be entitled shall be equal to the amount
which would have been payable to the surviving Spouse had the Affected Employee commenced
receiving an annual retirement benefit pursuant to Section 6.1 or Section 6.2, whichever is
applicable, on the day before his death, in the form of a joint and survivor income annuity
computed in accordance with Section 9.1. In the case of an Affected Employee who dies before




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	 	 	commencing to receive an annual retirement benefit and before he has attained his Early
Retirement Date, the amount of such annual benefit to which such Affected Employee’s surviving
Spouse shall be entitled shall be equal to the amount which would have been payable had the
Affected Employee incurred a Termination of Employment on the date of his death, (or the date
of his actual Termination of Employment, if earlier) survived to his Normal Retirement Date
under Section 5.1 or to his Early Retirement Date under Section 5.2, if applicable, and
commenced receiving his annual retirement benefit in the form of a joint and survivor income
annuity computed in accordance with Section 9.1 on his Normal Retirement Date or his Early
Retirement Date, whichever is applicable, and died immediately thereafter.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	7.2	 	Death After Retirement – Upon the death of an Affected Employee after he has attained
Retirement, his surviving Spouse shall be entitled to an annual benefit determined in
accordance with Section 9.1.




Section 8 — Termination of Employment





	8.1	 	Rights of Affected Employees – In the event that an Affected Employee incurs a
Termination of Employment, any part of his accrued benefit which is not then vested in
accordance with Section 6.4 shall be forfeited. Such amount forfeited shall not be restored
unless such Affected Employee is reemployed by the Company and has not incurred a Break in
Service Period prior to such reemployment by the Company.
	 
	8.2	 	Transfer of Employment – If an Affected Employee transfers from a category of
employment covered by the Plan to a category of employment not covered by the Plan with Litton
Industries, Inc., with any Affiliate Company or Designated Foreign Corporation, said Affected
Employee shall be deemed not to have incurred a Termination of Employment.






Section 9 — Forms of Retirement Income




	9.1	 	Joint and Survivor Income Annuity – The annual retirement benefit of an Affected
Employee who is married at the time he attains Retirement shall be payable to the Affected
Employee in twelve (12) equal monthly payments commencing with the first calendar month after
the Affected Employee attains Retirement for his life, and shall continue to be payable
monthly to his surviving Spouse, following the death of the Affected Employee, for the life of
the surviving Spouse. Payments will cease with the last payment made prior to the date of the
death of the surviving Spouse. Such annual retirement benefit shall be the Actuarial
Equivalent of a straight life annuity computed in accordance with Section 6.1, Section 6.2, or
Section 6.3, whichever is applicable, payable for the life of the Affected Employee. Any such
survivor benefit shall be equal to one hundred percent (100%) of the annual retirement benefit
payable during the joint lives of the Affected Employee and his surviving Spouse.




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	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.






	9.2	 	Straight Life Annuity – If an Affected Employee does not have a Spouse at the time he
attains Retirement, his annual retirement benefit will be payable in the form of a straight
life annuity for the life of the Affected Employee and shall be payable in twelve (12) equal
monthly payments commencing with the first calendar month after the Affected Employee attains
Retirement. Payments will cease with the last payment made prior to the date of death of the
Affected Employee. The amount of the annual retirement benefit will be computed in accordance
with Section 6.1, Section 6.2, or Section 6.3, whichever is applicable.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	9.3	 	Spousal Death Within Two Years After Retirement – Notwithstanding Section 9.1, if the
Spouse of an Affected Employee who is married at the time he attains Retirement and after he
commences to receive an annual retirement benefit pursuant to Section 9.1 should predecease
such Affected Employee not more than two (2) years after he commences to receive a retirement
benefit under Section 9.1, such annual retirement benefit shall, commencing with the first
retirement benefit payment payable as of the first day of the calendar month after the
calendar month during which the death of his Spouse occurred, be converted to an annual
retirement benefit computed pursuant to Section 9.2 in an annual amount equal to the amount of
the annual retirement benefit the Affected Employee would have received at the time of and
based on his age at the date of his Retirement.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	9.4	 	Annuity Options
	 
	 	 	An Affected Employee may elect in writing to the Plan Administrator, within the ninety (90)
day period prior to his commencement of benefits, to be paid in an optional form of annuity
other than that provided under Section 9.1 or 9.2 above. With respect to an Affected
Employee who is married at the time he attains Retirement, in no event shall an election of
any such optional benefit form be effective unless it is made in connection with the express
written consent of his Spouse in a form and manner satisfactory to the Plan Administrator.






	 	(a)	 	A married Affected Employee may elect, with the consent of his Spouse, a life
annuity pursuant to Section 9.1.




- 12 -









 












	 	(b)	(i)	 	A married Affected Employee may elect, with the consent of his Spouse an
optional form of joint and surviving spousal annuity which is the Actuarial Equivalent
of the annuity provided for under Section 9.2 but which provides a reduced monthly
benefit to the Affected Employee for his life, and, upon his death, an annuity for the
life of his surviving Spouse in a monthly amount equal to one of the following: fifty
percent (50%) or seventy-five percent (75%) of the amount payable to the Affected
Employee during his life.






	 
	 	(ii)	 	This annuity option is available only to an Affected Employee
who is married to a Spouse within the meaning of Section 3.26.






	 	(c)	 	“Ten-Year Certain and Continuous Annuity” means an annuity that is the
Actuarial Equivalent of the normal form of annuity that provides a reduced monthly
benefit to the Affected Employee for life. Upon his death, if he has not received one
hundred twenty (120) monthly payments, a monthly benefit, equal to that payable to the
Affected Employee during his life, shall be paid to his designated Beneficiary until
the number of monthly payments received by the Affected Employee and his designated
Beneficiary equals one hundred and twenty (120). The designated Beneficiary may elect
an additional Beneficiary to receive any monthly payment then still owing in the event
of the death of the first Beneficiary prior to the number of monthly payments equaling
one hundred and twenty. If there is ever a circumstance where no Beneficiary is alive
for purposes of receiving payments pursuant to this Subsection 9.4(c) of the Plan then
the estate of the last named Beneficiary may elect to receive the then Actuarial
Equivalent, determined in accordance with Subsection 6.05(c) of the Litton Industries,
Inc. Retirement Plan “B”, of any remaining payments in a lump sum amount which will be
payable by the Plan as soon as practicable thereafter.
	 
	 	(d)	 	“Contingent Annuitant Annuity” means an annuity that is the Actuarial
Equivalent of the form of annuity provided under Section 9.2 which provides a reduced
monthly benefit to the Affected Employee for life, and, upon his death, an annuity for
the life of his designated Beneficiary in a monthly amount equal to one of the
following: fifty percent (50%), seventy-five percent (75%), or one hundred percent
(100%) of the amount payable to the Affected Employee during his life.






	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	9.5	 	Mandatory Cashout – Notwithstanding any other provisions in the Plan, Affected
Employees with Grandfathered Amounts who have not commenced payment of such benefits prior to
January 1, 2008 will be subject to the following rules:




- 13 -









 












	 	(a)	 	Post-2007 Terminations. Affected Employees who have a complete termination of
employment with the Affiliated Companies after 2007 will receive a lump sum
distribution of the present value of their Grandfathered Amounts within two months of
such termination (without interest), if such present value is below the Code section
402(g) limit in effect at the termination.
	 
	 	(b)	 	Pre-2008 Terminations. Affected Employees who had a complete termination of
employment with the Affiliated Companies 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 this purpose, “Affiliated Companies” shall mean Litton and any other entity related to
Litton under the rules of Code section 414. The Affiliated Companies include Northrop
Grumman Corporation and its 80%-owned subsidiaries and may include other entities as well.
	 
	9.6	 	Optional Payment Forms – Affected Employees 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 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 factor






	9.7	 	Special Tax Distribution – On the date an Affected Employee’s retirement benefit is
reasonably ascertainable within the meaning of IRS regulations under Code section 3121(v)(2),
an amount equal to the Affected Employee’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 Affected Employee’s
future benefit payments under the Plan on an actuarial basis.




- 14 -









 










Section 10 — Miscellaneous





	10.1	 	Receipt and Release for Payments – Any payment to any Affected Employee, his
surviving Spouse or to his legal representative or to any committee appointed for such
Affected Employee or surviving Spouse in accordance with the provisions of this Plan shall, to
the extent thereof, be in full satisfaction of such benefit claim under the Plan. As a
condition precedent to the payment, such Affected Employee, surviving Spouse, legal
representative or committee may be required to execute a receipt and release therefor in such
form as shall be determined by the Plan Administrator.
	 
	10.2	 	Dispute as to Benefit Payments –Upon written notice to the Plan Administrator that
there is a dispute as to the proper recipient of any benefits not yet distributed under the
Plan, the Plan Administrator may in his sole discretion enter into any arrangement necessary
to prevent the benefits from being
paid to the wrong party until the dispute shall have been determined by a court of competent
jurisdiction or settled by the claimants concerned.
	 
	10.3	 	No Contract of Employment – Nothing herein contained shall be construed as giving
any Affected Employee the right to be retained in the service of the Company, nor upon
dismissal or upon his voluntary Termination of Employment, to have any right or interest in
this Plan other than as provided herein.
	 
	10.4	 	Commutation of Benefit – If the amount of the annual retirement benefit payable
hereunder to any Affected Employee or his surviving Spouse is less than five thousand dollars
($5,000) per year, payment of the Actuarial Equivalent of such payments may be made in a lump
sum in full settlement of all sums payable hereunder. (See Section 9.5 for the rule
that applies as of January 1, 2008).
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.




Section 11 — Amendment or Discontinuance





	11.1	 	Amendment of Plan – Litton 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 an Affected Employee
has already made a lump sum election. Notwithstanding the foregoing, no amendment or
termination of the Plan shall reduce the amount of an Affected Employee’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.




- 15 -









 












	11.2	 	Freezing Plan Benefits – The Company intends and expects to continue the Plan
indefinitely, but necessarily reserves the right at any time to discontinue, in whole or part,
future benefits under the Plan. No Affected Employee shall have any rights to benefits beyond
the freeze date. Solely for purposes of computing the Affected Employee’s vesting under
Section 6.4, Year(s) of Service, if any, with the Company after the freeze date shall be taken
into account.
	 
	11.3	 	Termination of Plan – The Company intends and expects to continue the Plan
indefinitely, but necessarily reserves the right at any time or times to terminate the Plan
(including the partial termination of the Plan). If the Plan is so
terminated and is not continued by a successor employer or merged into another plan of the
Company or a successor employer, each Affected Employee who is employed by the Company at
such time shall be vested one hundred percent (100%) in his annual retirement benefit,
notwithstanding the actual number of his Year(s) of Service.
	 
	11.4	 	Merger or Consolidation – In the event of any merger or consolidation of the Plan
with, any other plan of deferred compensation maintained or to be established for the benefit
of all or some of the Affected Employees of this Plan, each Affected Employee shall (if either
this Plan or the other Plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer (if the Plan had
then terminated).




Section 12 — Plan Administration





	12.1	 	Plan Administrator






	 	(a)	 	General – Except as otherwise provided by Section 13.6, a Plan
Administrator appointed by and serving at the pleasure of the Board of the Company
shall be responsible for the supervision and control of the operation and
administration of the Plan. The Plan Administrator shall not have the right to alter or
change any terms of the Plan, such right being retained solely by the Board of the
Company.
	 
	 	(b)	 	Specific Powers and Duties – The Plan Administrator shall have all
powers and duties, express and implied, necessary to carry out the supervision and
control of the Plan, as provided above, which shall include, but not by way of
limitation, the following:






	 	1.	 	To interpret the Plan and to decide any and all matters arising
hereunder; including the right to remedy possible ambiguities, inconsistencies
or omissions; provided, however, that all such interpretations and decisions
shall be applied in a uniform manner to all Affected Employees similarly
situated;
	 
	 	2.	 	To compute the amount of retirement benefit which shall be
payable to any Affected Employee, Spouse, or Beneficiary in accordance with the
provisions of the Plan;




- 16 -









 






	 	3.	 	To authorize payments under the Plan; and
	 
	 	4.	 	To establish a claims procedure to provide each Affected
Employee or Beneficiary a full and fair review of any denial, in whole or part,
of a claim for benefits.




Section 13 – Change of Control Provisions





	13.1	 	Change of Control – On or after a Change of Control, no additional Affected Employees
shall be provided benefits under the Plan.
	 
	13.2	 	Eligibility for Retirement Benefits






	 	(a)	 	Change of Control – Except as otherwise provided by Section 13.2(e)
below, as of a Change of Control, an Affected Employee shall be fully vested in his or
her benefit in accordance with Section 13.3 and there shall be a waiver of any
condition concerning eligibility for payment of an Annual Benefit that requires (1) the
filing of any election, (2) the attainment of a specified age, (3) an agreement not to
engage in competitive activities with the Company, (4) satisfaction of any other terms
or conditions or the application of any benefit reductions otherwise provided, and (5)
termination of employment with the Company in order to begin receiving an Annual
Benefit.
	 
	 	(b)	 	Benefits Accrued After a Change of Control – The provisions of
Section 13.2(d) above shall apply to any benefits accrued by an Affected
Employee after a Change of Control except that the waiver of the conditions of
having to file an appropriate election and to incur a termination of employment
with the Company shall not apply with respect to any benefits accrued by an
Affected Employee after a Change of Control.






	13.3	 	Vesting – Change of Control – Upon a Change of Control and thereafter, an Affected
Employee shall be vested in his or her Annual Benefit regardless of his or her years of
Year(s) of Service or age.
	 
	13.4	 	Benefit Forms after April 2, 2001 – This Section applies to benefits paid under this
Plan after April 3, 2001. It applies to a Participant’s entire Plan benefit, regardless of
when it accrued.






	 	(a)	 	Affected Employees who had Attained Retirement as of April 3, 2001. For
any Affected Employee (or beneficiary of an Affected Employee) who had attained
Retirement as of April 3, 2001, benefit payments under this Plan will continue to be
paid in the benefit form described in (1) below, unless he or she elects otherwise
under (2) below.




- 17 -









 












	 	(1)	 	Default Form. Unless otherwise elected under (2), a
Participant described in (a) will continue to receive his or her Plan benefits
in the form in which they were being paid as of April 2, 2001.
	 
	 	(2)	 	Alternative Form. A Participant described in (a) may
receive his or her Plan benefits in a lump sum if he or she timely elects to do
so in a manner prescribed by the Plan Administrator and subject to the Plan
Administrator’s discretion to pay the benefit in another form.






	 	(b)	 	Active Affected Employees as of April 3, 2001 Who Terminate Before October
1, 2003. For any Affected Employee who was accruing a benefit under the Plan as of
April 3, 2001 and terminates employment with the Northrop Grumman Corporation
controlled group before October 1, 2003, Plan benefits accrued before April 3, 2001 are
payable in the benefit form described in (1) below, unless he or she elects otherwise
under (2) below. Plan benefits accrued after April 2, 2001 are payable only under (1)
for Affected Employees described in this subsection.






	 	(1)	 	Default Form. Unless otherwise elected under (2), an
Affected Employee described in (b) will receive his or her Plan benefits in a
lump sum.
	 
	 	(2)	 	Alternative Form. An Affected Employee described in (b)
may receive his or her Plan benefits in a benefit form described in Section 9
if he or she timely elects to do so in a manner prescribed by the Plan
Administrator.






	 	(c)	 	Active Affected Employees as of April 3, 2001 Who Have a Termination of
Employment After September 30, 2003. For any Affected Employee who was actively
accruing a Plan benefit as of April 3, 2001 and who terminates employment with the
Northrop Grumman Corporation controlled group after September 30, 2003, Plan benefits
accrued after April 2, 2001 are payable under Section 9.1 or 9.2, whichever applies,
unless the Participant timely elects, in accordance with the Plan Administrator’s
rules, to receive Plan benefits in another form described in Section 9 or one of the
forms provided in the Litton Industries, Inc. Restoration Plan 2. Plan benefits accrued
before April 3, 2001 are payable in the benefit form described in (b)(1), unless he or
she elects otherwise under (b)(2).






	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	13.5	 	Payments to Trust






	 	(a)	 	Mandatory Contribution – Upon a Change of Control, the Company shall
make Mandatory Contributions to the Trustee by wire transfer in immediately available
funds of United States dollars. A Mandatory Contribution shall be made as soon as
possible upon the Change of Control, but in no event more than ten days from the date
of the Change of Control. In addition, a Mandatory Contribution shall be




- 18 -









 






	 	 	 	made every six
months thereafter, provided that the calculation of the Mandatory Contribution on the
sixth-month date yields a positive dollar amount. Mandatory Contributions shall
continue to be required semi-annually until all Annual Benefits have been paid to all
Affected Employees and Beneficiaries. The Company shall immediately notify the
Committee in writing when payment of the Mandatory Contribution is made to the Trustee.
	 
	 	(b)	 	Continuing Obligation of Company — Subsequent to the payment of a
Mandatory Contribution, Affected Employees, retired Affected Employees and, to the
extent they are entitled to benefit payments, their Beneficiaries shall be paid
benefits under the Plan from the Trust pursuant to the Trust Agreement, but in no event
shall the making of a Mandatory Contribution relieve the Company of its obligation
under this Plan.






	13.6	 	Administrative Procedures – These Administrative Procedures only take effect upon and
after Change of Control. In all other cases, the Administrative Procedures of Section 12 of
the Plan shall be those used.






	 	(a)	 	Notice of Denial — If the Committee determines that any person who had
submitted a claim for payment of benefits under the Plan is not eligible for payment of
benefits or, if applicable, is not eligible for payment of benefits in the form
requested, then the Committee shall, within a reasonable period of time, but no later
than 90 days after receipt of the written claim, notify the claimant of the denial of
the claim. Such notice of denial: (1) shall be in writing; (2) shall be written in a
manner calculated to be understood by the claimant; and (3) shall contain (A) the
specific reason or reasons for denial of claim; (B) a specific reference to the
pertinent Plan provisions or administrative rules and regulations upon which the denial
is based; (C) a description of any additional material or information necessary for the
claimant to perfect the claim; and (D) an explanation of the Plan’s appeal procedures.
	 
	 	(b)	 	Review Procedures — Within 90 days of the receipt by the claimant of
the written notice of denial of the claim, or if the claim has not been granted or
denied within 120 days of the claimant’s original claim, the claimant may file a
written request with the Board that it conduct a full and fair review of the denial of
the claimant’s claim for benefits. The claimant’s written request must include a
statement of the grounds on which the claimant appeals the original claim denial. The
Board shall deliver to the claimant a written decision on the claim promptly, but not
later than 60 days after the receipt of the claimant’s request for review, except that
if there are special circumstances that require an extension of time for processing,
the 60-day period shall be extended to 120 days, in which case written notice of the
extension shall be furnished to the claimant prior to the end of the 60-day period.






	13.7	 	Enforcement




- 19 -









 












	 	(a)	 	Right to Enforce — The Company’s obligations under the Plan may be
enforced by the filing of an action by any Affected Employee or by any Affected
Employee’s Spouse, Beneficiary, or personal representative.
	 
	 	(b)	 	Attorneys Fees and Costs — If, on or after a Change of Control, any
claimant is denied a claim for benefits under the Plan, and the claimant requests a
review under the procedures described in Section 13.6(b), or files a claim in a court
of law or any other tribunal to enforce any obligation of the Company under this Plan,
which is based on a failure to administer the Plan in accordance with its terms,
including the requirement that the Company make a Mandatory Contribution to the
Trust, the Company shall pay such claimant all attorneys fees and costs incurred in
connection with the claim, regardless of the outcome of the claim, provided that the
claim is not frivolous. All attorneys fees and costs under this Section 13.7(b)
shall be paid by the Company as they are incurred by the claimant, but no later than
thirty (30) days from the date that the claimant submits a bill or other statement
to the Company.
	 
	 	(c)	 	Interest — If any claimant prevails in a review procedure described in
Section 13.7(b), or if a claimant prevails in an action in a court of law or any other
tribunal to enforce the payment of benefits under the Plan, the Company shall pay
interest to the claimant on any unpaid benefits accruing from the date that benefit
payments should have commenced and continuing until the date that such owed and unpaid
benefits are paid to the claimant in full. For purposes of the preceding sentence,
interest shall accrue at an annual rate equal to one percent, plus the prime rate
reported by the Wall Street Journal.





* * *





               
     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 – Participating Divisions and Subsidiaries





	1.1	 	The Participating Divisions and Subsidiaries which comprise the Company and their respective
participating dates are as described in Section 1.3.
	 
	1.2	 	When the name or status of a Participating Division or Subsidiary is changed, the change
shall be deemed to have been made automatically in the Plan.





	 	 	 	 	 	 	 	 	 
	1.3	 	 	Participating Division and Subsidiaries	 	Participating Date	 
	 	 	 	 	Litton Industries Inc.
	 	 	 	 
	 	 	 	 	Corporate Office
	 	January 1, 1987
	 	 	 	 	Erie Marine
	 	January 1, 1987
	 	 	 	 	Ingalls Shipbuilding, Inc. Salaried Employees
	 	January 1, 1987
	 	 	 	 	Litton Italia, S.P.A.
	 	January 1, 1987
	 	 	 	 	Litton International Development Corporation
	 	 	 	 
	 	 	 	 	Data Command Systems
	 	January 1, 1987
	 	 	 	 	Litton Worldwide Services
	 	 	 	 
	 	 	 	 	Aero Products Division
	 	January 1, 1987
	 	 	 	 	Litton Korea, Ltd.
	 	 	 	 
	 	 	 	 	All U.S. Employees
	 	January 1, 1987
	 	 	 	 	Litton Precision Products International – U.K.
	 	 	 	 
	 	 	 	 	All U.S. Employees
	 	January 1, 1987
	 	 	 	 	Litton Systems, Inc.
	 	 	 	 
	 	 	 	 	Advanced Circuitry
	 	January 1, 1987
	 	 	 	 	Aero Products
	 	January 1, 1987
	 	 	 	 	Airtron Division
	 	January 1, 1987
	 	 	 	 	Amecom Division
	 	January 1, 1987
	 	 	 	 	Clifton Encoder
	 	January 1, 1987
	 	 	 	 	Clifton Instruments & Life Support
	 	 	 	 
	 	 	 	 	Non-Union
	 	January 1, 1987
	 	 	 	 	Union
	 	May 1, 1987
	 	 	 	 	Clifton Precision
	 	January 1, 1987
	 	 	 	 	Data Systems
	 	January 1, 1987
	 	 	 	 	Electronic Devices
	 	January 1, 1987
	 	 	 	 	Guidance and Control Systems Division
	 	January 1, 1987
	 	 	 	 	Kester Solder
	 	January 1, 1987
	 	 	 	 	Laser Systems
	 	January 1, 1987






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	1.3	 	 	Participating Division and Subsidiaries	 	Participating Date	 
	 	 	 	 	Litton Computer Services
	 	 	 	 
	 	 	 	 	Woodland Hills, Mountain View, Reston
	 	January 1, 1987
	 	 	 	 	Lexington
	 	August 3, 1987
	 	 	 	 	Poly-Scientific
	 	January 1, 1987
	 	 	 	 	Potentiometer
	 	January 1, 1987
	 	 	 	 	Systems Administration
	 	January 1, 1987
	 	 	 	 	VEAM
	 	January 1, 1987
	 	 	 	 	Winchester Electronics
	 	January 1, 1987
	 	 	 	 	Winchester/USECO
	 	January 1, 1987
	 	 	 	 	Litton Industrial Automation Systems, Inc.
	 	 	 	 
	 	 	 	 	Automated Guided Vehicles
	 	January 1, 1987
	 	 	 	 	Automated Systems, Hebron, Kentucky
	 	January 1, 1987
	 	 	 	 	Diamond & CBN Products
	 	January 1, 1987
	 	 	 	 	Engineered Systems
	 	January 1, 1987
	 	 	 	 	Industrial Automation Systems
	 	January 1, 1987
	 	 	 	 	Integrated Automation
	 	September 30, 1987
	 	 	 	 	Integrated Systems, Florence, Kentucky
	 	January 1, 1987
	 	 	 	 	Kimball Systems
	 	January 1, 1987
	 	 	 	 	Lamb Technicon
	 	July 1, 1987
	 	 	 	 	Litton Industrial Services, Inc.
	 	January 1, 1987
	 	 	 	 	Lucas Machine
	 	January 1, 1987
	 	 	 	 	New Britain Machine
	 	January 1, 1987
	 	 	 	 	Process Conveyor
	 	January 1, 1987
	 	 	 	 	Software Systems
	 	January 1, 1987
	 	 	 	 	Unit Handling Systems/Conveyor Systems
	 	January 1, 1987






- 22 -









 





APPENDIX A




LITTON INDUSTRIES INC.



ASSUMPTIONS TO CALCULATE

THE PRESENT VALUE OF REMAINING RESTORATION PLAN BENEFITS



	 	 	 	 	 
	ITEM	 	PAYMENT ASSUMPTIONS	 	OTHER REQUIRED DATA
	Age at Retirement (for accrued benefits)

	 	Current Age	 	 
	 
	 	 	 	 
	Mortality (Post-retirement only)

	 	83 GAM (Unisex)	 	 
	 
	 	 	 	 
	Present Value Interest Rate

	 	See Note 1
	 	Calculation Date
	 
	 	 	 	 
	Retirement Age

	 	Earliest ages to receive
unreduced benefits	 	 
	 
	 	 	 	 
	Form of Payment

	 	Single Life Annuity/Lump Sum
	 	For retirees with
other than Life
Annuity: Spouse
DOB; J&S %; 10-Year
certain data
(commencement date)
	 
	 	 	 	 
	Interest Rate of Annuity Equivalent

	 	See Note 1
	 	Litton Industries,
Inc. Retirement
Plan “B”, Interest
Rate, Qualified
Plan J & S Factor
Tables, LRP and
FSSP Annuity
Equivalent factors.






- 23 -









 





	 	 	 
	FORMULA

	 	Retirement Account Restoration Plan Benefit plus the Savings
Account Restoration Plan Benefit both multiplied by the Present
Value Factor
	 
	 	 
	WHERE

	 	Part I Restoration Plan Benefit equals 85% multiplied by the
Retirement Account Restricted Amount minus (Retirement Account
Annuity Equivalent Factor for age at Retirement multiplied by the
Retirement Account Restricted Amount with Interest)
	 
	 	 
	 

	 	Savings Account Annuity Equivalent Factor for age at Retirement
multiplied by the Savings Account Restricted Amount with Interest.
	 
	 	 
	 

	 	Present Value Factor equals Deferred to Retirement Age Actuarial
Factor Based on the Present Value Interest Rate and the Form of
Payment Specified Above.








 




			
	Note 1:  	For benefits payable as a lump sum, the interest rate shall be the average yield on
non-callable, coupon 10-Year AAA California Municipal Bonds offered to retail investors by Bonds
Online (http://www.bonds-online.com) as of 1p.m. EST immediately after the completion of the Change
of Control. For benefits payable as an annuity, the interest rate shall be the discount rate used
for funding purposes by the Litton Industries, Inc. Retirement Plan “B” as of the Change of Control
Date.





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APPENDIX B – 2005-2007 TRANSITION RULES




           This Appendix B provides the distribution rules that apply to the portion of benefits under
the Plan subject to Code section 409A for Affected Employees with benefit commencement dates after
January 1, 2005 and before January 1, 2008.




	B.01 	 	Election. Affected Employees 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. Affected Employees electing optional
forms of benefits under this provision will commence payments on the
Affected Employee’s selected benefit commencement date.
	 
	B.02 	 	2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 & Q&A-20,
Affected Employees 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 Affected Employee.






	 	(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, an Affected Employee must be an elected or appointed officer of
Litton 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.






	B.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),




- 25 -









 






	 	 	distribution of Plan benefits subject to Code section 409A shall begin 12 months after the
later of: (a) the Affected Employee’s benefit election date, or (b) the underlying
qualified pension plan benefit commencement date (as specified in the Affected Employee’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).




- 26 -









 











APPENDIX C – POST 2007

DISTRIBUTION OF 409A AMOUNTS




     The provisions of this Appendix C 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 Sections 6-10 and
Appendix B addresses distributions of amounts subject to Code section 409A with benefit
commencement dates after January 1, 2005 and prior to January 1, 2008.




	C.01 	 	Time of Distribution. Subject to the special rules provided in this
Appendix C, distributions to an Affected Employee of his vested
retirement benefit shall commence as of the Payment Date.
	 
	C.02 	 	Special Rule for Key Employees. If an Affected Employee is a Key
Employee and age 55 or older at his Separation from Service,
distributions to the Affected Employee 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 Affected Employee’s death).
Amounts otherwise payable to the Affected Employee during such period
of delay shall be accumulated and paid on the first day of the
seventh month following the Affected Employee’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).
	 
	C.03 	 	Forms of Distribution. Subject to the special rules provided in this
Appendix C, an Affected Employee’s vested retirement benefit shall be
distributed in the form of a single life annuity. However, an
Affected Employee 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 an Affected Employee 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 Litton determines that there is no spouse or that the spouse
cannot be found.




	C.04 	 	Death. If a married Affected Employee dies before the Payment Date, a death benefit will be
payable to the Affected Employee’s spouse commencing 90 days after the Affected Employee’s
death. The death benefit will be a single life annuity in an amount equal to the survivor
portion of an Affected Employee’s vested retirement benefit based on a 100% joint and survivor
annuity determined on the Affected Employee’s date of death. This




- 27 -









 






	 	 	benefit is also payable to an Affected Employee’s
domestic partner who is properly registered with
Litton in accordance with procedures established by
Litton.
	 
	C.05 	 	Actuarial Assumptions.
Except as provided in
Section C.06, all forms of
payment under this Appendix
C 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
	 
	C.06 	 	Accelerated Lump Sum Payouts.






	 	(a)	 	Post-2007 Separations. Notwithstanding the provisions of this Appendix C, for
Affected Employees who Separate from Service on or after January 1, 2008, if the
present value of (a) the vested portion of an Affected Employee’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 Affected Employee (or
his spouse or domestic partner, if applicable) in a lump sum payment. Subject to the
special timing rule for Key Employees under Section C.02, the lump sum payment shall be
made within 90 days after the first of the month coincident with or following the date
of the Affected Employee’s Separation from Service.
	 
	 	(b)	 	Pre-2008 Separations. Notwithstanding the provisions of this Appendix C, for
Affected Employees who Separate from Service before January 1, 2008, if the present
value of (a) the vested portion of an Affected Employee’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 Affected Employee attains age 55, is less
than or equal to $25,000, such benefit amount shall be distributed to the Affected
Employee (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
Affected Employee attains age 55, but no earlier that January 1, 2008.
	 
	 	(c)	 	Conflicts of Interest. The present value of an Affected Employee’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 an Affected Employee’s retirement
benefit into a lump sum payment and the present value calculations under this Section
C.06 shall be based on the actuarial assumptions in effect under the





- 28 -









 





	 	 	 	Northrop Grumman Pension Plan for purposes of calculating lump sum amounts, and will
be based on the Affected Employee’s immediate benefit if the Affected Employee is 55
or older at Separation from Service. Otherwise, the calculation will be based on
the benefit amount the Affected Employee will be eligible to receive at age 55.






	C.07 	 	Effect of Early Taxation. If the Affected Employee’s benefits under
the Plan are includible in income pursuant to Code section 409A, such
benefits shall be distributed immediately to the Affected Employee.
	 
	C.08 	 	Permitted Delays. Notwithstanding the foregoing, any payment to an
Affected Employee under the Plan shall be delayed upon Litton’s
reasonable anticipation of one or more of the following events:






	 	(a)	 	Litton’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 C.08 shall be paid in
accordance with Code section 409A.



- 29 -









 





Appendix Regarding Acquisition Of Litton Industries, Inc.





	1.	 	In General. This Appendix provides special rules concerning the acquisition by
Northrop Grumman Corporation of Litton Industries, Inc. (the “Litton Acquisition”).






	 	(a)	 	Purpose. This Appendix prevents employees of the Northrop Grumman Group
from receiving coverage or any credit for service or compensation under this Plan until
the Plan and this Appendix are explicitly amended to provide otherwise.
	 
	 	(b)	 	General Override. The provisions of this Appendix override any contrary
provisions elsewhere in the documents governing the Plan, except to the extent
prohibited by change-in-control provisions.
	 
	 	(c)	 	Definitions. For purposes of this Appendix:






	 	(1)	 	The term “Northrop Grumman Group” generally means
Northrop Grumman Corporation and any entity affiliated with it under sections
414(b), (c), (m) or (o) of the Internal Revenue Code.






	 	(A)	 	With reference to periods before the Litton
Acquisition Date, the term “Northrop Grumman Group” means the entire
affiliated group.
	 
	 	(B)	 	With reference to periods after the Litton
Acquisition Date, the term “Northrop Grumman Group” means the entire
affiliated group, but not including Litton Industries, Inc. (and any
successor entity) and its subsidiaries.






	 	(2)	 	The term “Litton Acquisition Date” means the date on
which Northrop Grumman Corporation purchased a majority interest in the shares
of Litton Industries, Inc. pursuant to the exchange offer filed with the
Securities and Exchange Commission on Form S-4.






	2.	 	Acquisition of Litton Industries, Inc. Effective as of the Litton Acquisition Date,
Litton Industries, Inc. was acquired and became a subsidiary of Northrop Grumman Corporation.
	 
	3.	 	Plan Sponsor. As of the Litton Acquisition Date, Northrop Grumman Corporation adopted
and became the sponsor of the Plan.
	 
	4.	 	Corporate Authority. During the period on and after the Litton Acquisition Date, all
Plan references to the Board of Directors of Litton Industries, Inc. will instead be deemed to
refer to the Board of Directors of Northrop Grumman Corporation.
	 
	5.	 	Amendment and Termination Authority. As of the Litton Acquisition Date:




- 30 -









 












	 	(a)	 	Northrop Grumman Corporation through its Board of Directors will have sole
authority to amend the Plan in its discretion. This authority may be delegated and
redelegated.
	 
	 	(b)	 	Northrop Grumman Corporation will have sole authority to terminate the Plan.






	6.	 	Coverage. No individuals who were employees of the Northrop Grumman Group immediately
before the Litton Acquisition Date may participate in this Plan. No individuals who became
employees of the Northrop Grumman Group after the Litton Acquisition Date may participate in
this Plan.
	 
	7.	 	Service With the Northrop Grumman Group. Service with the Northrop Grumman Group
before or after the Litton Acquisition Date will not be counted as service for any purpose.
	 
	8.	 	Compensation. No compensation for services performed for the Northrop Grumman Group
will be treated as compensation under this Plan.
	 
	9.	 	Nonduplication. Employees are not covered by this Plan for any Plan Year or portion
of a Plan Year if they are actively participating under a similar plan of the Northrop Grumman
Group.






	 	(a)	 	Solely for purposes of this section, employees are active participants in
another plan if they are generally eligible to make or receive contributions or accrue
benefits under the plan, or would be, but for limits in the plan.
	 
	 	(b)	 	If an employee could be covered by two plans, both of which include this
provision (or a similar provision), the plan administrators will resolve the
discrepancy to allow eligibility for one plan or another but not both.






	10.	 	Termination of Employment. No termination of employment will be deemed to occur as a
result of the Litton Acquisition, any corporate reorganization incident to the Litton
Acquisition, any later liquidation of Litton Industries, Inc. (or any successor entity) or its
subsidiaries or any transfer of assets or liabilities between members of the group consisting
of Northrop Grumman Corporation and its subsidiaries.






	 	(a)	 	Similarly, there will be no “separation from service” or “severance from
service” or event described by a similar term.
	 
	 	(b)	 	The provisions of this Section are not intended to modify any service-counting
provisions in the Plan, to extend service credits when they would not otherwise be
given, nor to override Section 7 above.




- 31 -









 











Appendix Regarding Investment Matters





	1.	 	In General. This Appendix gives responsibility for investment and trust matters
(other than trustee duties) in connection with the Plan to an Investment Committee, as
described below. The provisions of this Appendix override any contrary provision elsewhere in
the documents governing the Plan, unless prohibited by change-in-control provisions or
collective bargaining agreements.
	 
	2.	 	Investment Fiduciary. The named fiduciary for investment and trust matters (other
than trustee duties) is the Investment Committee.
	 
	3.	 	The Investment Committee. The Investment Committee shall consist of not less than
three persons appointed from time to time by the Board of Directors described in (a) (for
purposes of this Appendix, the “Board”) or its delegate.






	 	(a)	 	The “Board” for purposes of this Appendix means the Board of Directors with any
power to amend the Plan. If a corporation rather than a Board of Directors has the
power to amend, then “Board” refers to the Board of Directors of that corporation.
	 
	 	(b)	 	The members of the Investment Committee shall elect one of their members as
Chairman and shall appoint a Secretary and such other officers as the Investment
Committee may deem necessary.
	 
	 	(c)	 	The Investment Committee may employ such advisors, including investment
advisors, as it may require in carrying out the provisions hereof.
	 
	 	(d)	 	Except as otherwise provided in these resolutions, each member of the
Investment Committee shall continue in office until the expiration of three years from
the date of his or her latest appointment or reappointment to the Committee. A member
may be reappointed annually.
	 
	 	(e)	 	If at the end of his or her latest three year term, a member is not
reappointed, he or she will continue to serve until the date his or her successor is
appointed.
	 
	 	(f)	 	A member may resign at any time by delivering a written resignation to the
Corporate Secretary of Northrop Grumman Corporation and to the Secretary of the
Investment Committee.
	 
	 	(g)	 	A member may be removed by the Board at any time for any reason.






	4.	 	Alternate Members. The Board may from time to time appoint one or more persons as
alternate members of the Investment Committee to serve in the absence of members of the
Investment Committee, in the manner hereinafter stated, with the same effect as if they were
members.






	 	(a)	 	The Chairman of the Investment Committee, in his or her discretion, shall
designate which of the alternate members shall attend any particular meeting of





- 32 -









 





	 	 	 	the Investment Committee for the purpose of obtaining a quorum or full attendance as
the Chairman may elect.
	 
	 	(b)	 	Each alternate member shall have all the rights, powers and obligations of a
member in respect to the business of meetings which he or she so attends.






	5.	 	Actions by the Committee. A majority in number of the members of the Investment
Committee at the time in office, represented at a meeting by members or alternate members or
both, shall constitute a quorum for the transaction of business. Any determination or action
of the Investment Committee, including allocations and delegations of responsibilities, may be
made or taken by a majority of a quorum present at any meeting thereof, or without a meeting,
by resolution or written memorandum signed by a majority of the members then in office.
	 
	6.	 	Investment Responsibilities.






	 	(a)	 	The Investment Committee, in its capacity as named fiduciary for investment
matters, may, in its discretion, appoint one or more investment managers who shall
have, until terminated by the Investment Committee, the power to manage, acquire and
dispose of all or any part of the assets of the Plans allocated to an investment
manager by the Investment Committee.
	 
	 	(b)	 	The Investment Committee shall have the power to hire and terminate trustees.
	 
	 	(c)	 	The Investment Committee shall periodically review and evaluate the investment
performance of each trustee and investment manager and shall advise the Board of such
review and evaluation.
	 
	 	(d)	 	In the event that investment powers are divided among two or more trustees or
investment managers, the Investment Committee shall formulate investment policies for
such trustees and investment managers to diversify the investments of the Plans so as
to minimize the risk of large losses, unless under the circumstances it is prudent not
to do so.
	 
	 	(e)	 	The Investment Committee shall establish a funding policy and method to carry
out the Plan’s objectives. This procedure is to enable the Plan’s fiduciaries to
determine the Plan’s short- and long-term financial needs and to communicate these
requirements to the appropriate persons.






	7.	 	Liability and Indemnity.






	 	(a)	 	No Investment Committee member who has a fiduciary responsibility, or to whom
such responsibility is allocated, as provided in these resolutions, by appointment or
otherwise, shall be liable for any act or omission or investment policy of any other
fiduciary except as provided in Section 405 of Employee Retirement Income Security Act
of 1974.




- 33 -









 






	 	(b)	 	To the extent permitted by law, Northrop Grumman Corporation shall indemnify
and hold harmless members of the Board and the Investment Committee and employees of
Northrop Grumman Corporation or its subsidiaries who act for the Investment Committee,
as well as former members and former employees, with respect to their investment
responsibilities.




- 34 -









 











Appendix Regarding Plan Administration





	1.	 	In General. This Appendix gives responsibility for plan administration (other than
investment and trust matters) to an Administrative Committee, as described below. The
provisions of this Appendix override any contrary provision elsewhere in the documents
governing the Plan, except to the extent prohibited by change-in-control provisions or
collective bargaining agreements.
	 
	2.	 	Plan Administrator. The general administration of the Plan is the responsibility of
the Administrative Committee. The Committee is the plan administrator, and the Committee and
each of its members are named fiduciaries. Committee members and all other Plan fiduciaries
may serve in more than one fiduciary capacity with respect to the Plan.
	 
	3.	 	The Administrative Committee. The Administrative Committee consists of at least three
members appointed by the Board of Directors described in (a) (for purposes of this Appendix,
the “Board”) or its delegate. The members of the Committee shall serve without compensation
for such service, unless otherwise determined by the Board.






	 	(a)	 	The “Board” for purposes of this Appendix means the Board of Directors with any
power to amend the Plan. If a corporation rather than a Board of Directors has the
power to amend, then “Board” refers to the Board of Directors of that corporation.
	 
	 	(b)	 	Except as otherwise provided in this Appendix, each member of the Committee
shall continue in office until the expiration of 3 years from the date of his or her
latest appointment or reappointment to the Committee. A member may be reappointed.
	 
	 	(c)	 	If at the end of his or her latest term as a member of the Committee, a member
is not reappointed, he or she will continue to serve on the Committee until the date
his or her successor is appointed.
	 
	 	(d)	 	A member may be removed by the Board at any time and for any reason.






	4	 	Resignation of Committee Members. A member of the Administrative Committee may resign
at any time by delivering a written resignation to the Secretary of the corporation and to the
Secretary of the Committee. The member’s resignation will be effective as of the date of
delivery or, if later, the date specified in the notice of resignation.
	 
	5.	 	Conduct of Business. The Administrative Committee shall elect a Chairman from among
its members and a Secretary who may or may not be a member. The Committee shall conduct its
business according to the provisions of this Appendix and shall hold meetings from time to
time in any convenient location.
	 
	6.	 	Quorum. A majority of all of the members of the Administrative Committee constitutes
a quorum and has power to act for the entire Committee.




- 35 -









 






	7.	 	Voting. All actions taken by the Administrative Committee shall be by majority vote
of the members attending a meeting, whether physically present or through remote
communications. In addition, actions may be taken by written consent of a majority of the
Committee members without a meeting. The agreement or disagreement of any member may be by
means of any form of written or oral communications.
	 
	8.	 	Records and Reports of the Committee. The Administrative Committee shall keep such
written records as it shall deem necessary or proper, which records shall be open to
inspection by the Board.
	 
	9.	 	Powers of the Committee. The Administrative Committee shall have all powers necessary
or incident to its office as plan administrator. Such powers include, but are not limited to,
full discretionary authority to:






	 	(a)	 	prescribe rules for the operation of the Plan;
	 
	 	(b)	 	determine eligibility;
	 
	 	(c)	 	comply with the requirements of reporting and disclosure under ERISA and any
other applicable law, and to prepare and distribute other communications to
participants (and, if applicable, beneficiaries) as a part of Plan operations;
	 
	 	(d)	 	prescribe forms to facilitate the operation of the Plan;
	 
	 	(e)	 	secure government approvals for the Plan (if applicable);
	 
	 	(f)	 	construe and interpret the terms of the Plan, including the power to remedy
possible ambiguities, inconsistencies or omissions, and to determine the facts
underlying any claim for benefits;
	 
	 	(g)	 	determine the amount of benefits, and authorize payments from the trust;
	 
	 	(h)	 	maintain records;
	 
	 	(i)	 	litigate, settle claims, and respond to and comply with court proceedings and
orders on the Plan’s behalf;
	 
	 	(j)	 	enter into contracts on the Plan’s behalf;
	 
	 	(k)	 	employ counsel and others to render advice about any responsibility that the
Committee has under the Plan;
	 
	 	(l)	 	exercise all other powers given to the plan administrator under other
provisions of the Plan.






	10.	 	Allocation or Delegation of Duties and Responsibilities. The Administrative Committee
and the Board may:






	 	(a)	 	Employ agents to carry out nonfiduciary responsibilities;




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	 	(b)	 	Employ agents to carry out fiduciary responsibilities (other than trustee
responsibilities as defined in section 405(c)(3) of ERISA) under the rules of section
11 of this Appendix;
	 
	 	(c)	 	Consult with counsel, who may be counsel to Northrop Grumman Corporation;
	 
	 	(d)	 	Provide for the allocation of fiduciary responsibilities (other than trustee
responsibilities as defined in section 405(c)(3) of ERISA) among their members under
the rules of section 11 of this Appendix; and
	 
	 	(e)	 	In particular, designate one or more officers as having responsibility for
designing and implementing administrative procedures for the Plan.






	11.	 	Procedure for the Allocation or Delegation of Fiduciary Duties. The rules of this
section of the Appendix are as follows:






	 	(a)	 	Any allocation or delegation of fiduciary responsibilities must be approved by
majority vote of the members of the Administrative Committee, in a resolution approved
by the majority.
	 
	 	(b)	 	The vote cast by each member of the Administrative Committee for or against the
adoption of such resolution must be recorded and made a part of the written record of
the proceedings.
	 
	 	(c)	 	Any delegation or allocation of fiduciary responsibilities may be changed or
ended only under the rules of (a) and (b) of this section of the Appendix.






	12.	 	Expenses of the Plan. All reasonable and proper expenses of administration of the
Plan including counsel fees will be paid by the employers participating in the Plan.
	 
	13.	 	Indemnification. Northrop Grumman Corporation agrees to indemnify and reimburse, to
the fullest extent permitted by law, members and former members of the Board; members and
former members of the Administrative Committee; employees and former employees of Northrop
Grumman Corporation or its subsidiaries who act (or acted) for the Committee, Northrop Grumman
Corporation or another employer participating in the Plan for any and all expenses,
liabilities, or losses arising out of any act or omission relating to the rendition of
services for or the management and administration of the Plan, except in instances of gross
misconduct.
	 
	14.	 	Extensions of Time Periods. For good cause shown, the Administrative Committee may
extend any period set forth in the Plan for taking any action required of any participant or
beneficiary to the extent permitted by law.
	 
	15.	 	Claims Procedures. The standardized “Northrop Grumman Nonqualified Retirement Plans
Claims and Appeals Procedures” shall apply in handling claims and appeals under this Plan.




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	16.	 	Qualified Domestic Relations Orders. All or a portion of an Affected Employee’s
benefit may be paid to another person as specified in a domestic relations order that the
Administrative Committee 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 Affected Employee;
	 
	 	(3)	 	creates or recognizes the right of a spouse, former spouse, child or other
dependent of the Affected Employee to receive all or a portion of the Affected
Employee’s benefits under the Plan; and
	 
	 	(4)	 	meets such other requirements established by the Administrative Committee.






	 	 	The Administrative Committee shall determine whether any document received by it is a
Qualified Domestic Relations Order. In making this determination, the Administrative
Committee may consider the rules applicable to “domestic relations orders” under Code
section 414(p) and ERISA section 206(d), and such other rules and procedures as it deems
relevant.
	 
	17.	 	Amendments. The Administrative Committee may amend the Plan through written
resolution to make the changes identified in subsection (a). Any amendments must be made in
accordance with the rules of subsections (b), (c) and (d).






	 	(a)	 	The Committee may amend the Plan:






	 	(1)	 	to the extent necessary to keep the Plan in compliance
with law;
	 
	 	(2)	 	to make clarifying changes;
	 
	 	(3)	 	to correct drafting errors;
	 
	 	(4)	 	to otherwise conform the Plan documents to the
company’s intent;
	 
	 	(5)	 	to change the participation and eligibility provisions;
	 
	 	(6)	 	to change plan definitions, formulas or employee
transfer rules;
	 
	 	(7)	 	with respect to administrative, procedural and
technical matters including benefit calculation procedures,
distribution elections and timing, other elections, waivers, notices,
and other ministerial matters; and
	 
	 	(8)	 	with respect to management of funds.





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	 	(b)	 	Before adopting any Plan amendment, the Committee must obtain:






	 	(1)	 	a cost analysis of the proposed amendment;
	 
	 	(2)	 	a legal opinion that the amendment does not violate
ERISA or other applicable legal requirements;
	 
	 	(3)	 	a tax opinion that the amendment will not result in the
Plan’s disqualification;
	 
	 	(4)	 	approval of the amendment from the Corporate Vice
President and Chief Financial Officer of Northrop Grumman Corporation;
and
	 
	 	(5)	 	approval of the amendment from the Corporate Vice
President and Chief Human Resources and Administrative Officer of
Northrop Grumman Corporation.






	 	(c)	 	The Committee must refer to the Board for approval any amendments that:






	 	(1)	 	will result in an increase in costs on an annual basis
in excess of $5,000,000; or
	 
	 	(2)	 	will result in a decrease in costs on an annual basis
in excess of $5,000,000.






	 	(d)	 	The Committee’s amendment authority may not be delegated.
	 
	 	(e)	 	Nothing in this section 17 of the Appendix is intended to modify the
amendment authority of any company, board or directors, officer or other
committee.






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