exv10w11






Exhibit 10.11




APPENDIX G

TO THE NORTHROP GRUMMAN SUPPLEMENTAL PLAN 2




Officers Supplemental Executive Retirement Program



(Amended and Restated Effective as of January 1, 2011)


Appendix G to the Northrop Grumman Supplemental Plan 2 (the “Appendix”) is hereby amended and
restated effective as of January 1, 2011. This restatement amends the prior January 1, 2011
restatement and includes changes that apply to Grandfathered Amounts.





	G.01 	 	Purpose. The purpose of this Program is to give enhanced retirement
benefits to eligible officers of the Company. This Program is
intended to supplement benefits that are otherwise available under
the Qualified Plans.
	 
	G.02 	 	Definitions and Construction.






	 	(a)	 	Capitalized terms used in this Appendix that are not defined in this Appendix
or Article I of the Plan are taken from the Qualified Plans, and are intended to have
the same meaning.
	 
	 	(b)	 	Eligible Pay. Subject to paragraphs (1) through (5) below, Eligible Pay will
generally be determined under the rules of the Participant’s supplemental benefit plan
(for section 401(a)(17) purposes).






	 	(1)	 	For periods during which a Participant did not participate in a
supplemental benefit plan, Eligible Pay will be determined by reference to the
applicable qualified defined benefit retirement plan under which the
Participant benefits.






	 	(A)	 	Eligible Pay will be calculated without regard
to any otherwise applicable limitations under the Code, including
section 401(a)(17).
	 
	 	(B)	 	Eligible Pay will include compensation deferred
under a Deferred Compensation Plan and in connection with the Northrop
Grumman Electronic Systems Executive Pension Plan.
	 
	 	(C)	 	For purposes of (B), any compensation deferred
will only be treated as compensation for Plan benefit calculation
purposes in the year(s) payment would otherwise have been made and not
in the year(s) of actual payment.






	 	(2)	 	Special Rules for Certain Participants.




 









 












	 	(A)	 	Former Northrop Grumman Electronic Systems
Executive Pension Plan Participants. For years prior to 2002, Eligible
Pay is determined by reference to the Participant’s total base salary
under the Northrop Grumman Electronic Systems Pension Plan plus any
bonuses that were received or would have been received had the
Participant not elected to have the amounts deferred under a deferred
compensation arrangement. No compensation of any kind paid or otherwise
earned while employed by an entity prior to that entity becoming an
Affiliated Company will be included in the Participant’s Eligible Pay.
	 
	 	(B)	 	Employees of Newport News Shipbuilding, Inc.
For the period beginning on January 1, 1994 and ending December 31,
2003, Eligible Pay is determined by reference to the Participant’s
total base salary plus any bonuses that were received or would have
been received had the Participant not elected to have the amounts
deferred under a deferred compensation arrangement.






	 	(3)	 	If a Participant experiences a Termination of Employment before
December 31 of any year, Eligible Pay for the year in which the Participant’s
Termination of Employment occurs is determined in accordance with the Standard
Annualization Procedure in Article 2 of the Standard Definitions and Procedures
for Certain Northrop Grumman Corporation Retirement Plans.
	 
	 	(4)	 	The following shall not be considered as Eligible Pay for
purposes of determining the amount of any benefit under the Program:






	 	(A)	 	any payment authorized by the Compensation
Committee that is (1) calculated pursuant to the method for determining
a bonus amount under the Annual Incentive Plan (AIP) for a given year,
and (2) 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.






	 	(5)	 	Eligible Pay shall include amounts earned after a Participant
attains age 65, provided any benefits based on such compensation shall be
subject to Code section 409A.






	 	(c)	 	Final Average Salary for any Plan Year is the Participant’s average Eligible
Pay for the highest three of the last ten consecutive Plan Years in which the
Participant was an employee of an Affiliated Company and a participant in a qualified
defined benefit retirement plan. For this purpose, years will be deemed to be
consecutive even though a break in service year(s) intervenes.




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	 	 	 	Notwithstanding the foregoing, for Participants whose employment ceases after 2005,
all Plan Years after 1996 (not just the last ten) shall be considered in determining
the highest three years of Eligible Pay. All benefits resulting from this change in
determining the highest three years of Eligible Pay shall be subject to Code section
409A.
	 
	 	(d)	 	Months of Benefit Service.






	 	(1)	 	Months of Benefit Service will be determined under the rules of
the Qualified Plans for determining Credited Service.
	 
	 	(2)	 	Months of Benefit Service will continue to be counted for a
Participant until the earlier of (A) or (B):






	 	(A)	 	The date the Participant ceases to earn benefit
accrual service under either the Qualified Plans or some other defined
benefit plan of the Affiliated Companies that is qualified under
section 401(a) of the Code (“Successor Qualified Plan”).
	 
	 	(B)	 	Cessation of the Participant’s status as an
elected or appointed officer of the Company (except as otherwise
provided in Section G.04(f)).






	 	(3)	 	If a Participant is transferred to a position with an
Affiliated Company not covered by a Qualified Plan, Months of Benefit Service
will be determined as the Credited Service in the Participant’s last Qualified
Plan.






	 	(A)	 	If such a transfer occurs, the Participant will
continue to earn deemed service credits as if he or she were still
participating under the Qualified Plan.
	 
	 	(B)	 	Those deemed service credits will not be
considered as earned under the Qualified Plan for purposes of
determining:






	 	(i)	 	benefits under the Qualified Plan
or supplements to the Qualified Plan other than this Program, or
	 
	 	(ii)	 	the offset under Section G.05
below, including the early retirement factors associated with
the plans included in the offset.






	 	(4)	 	For Participants who become eligible to participate in the
Program on or after March 10, 2006, Months of Benefit Service shall not include
any time that counts as service under any portion of a plan spun out of the
Company’s controlled group, if the service is no longer treated as benefit
accrual service under a qualified plan in the Company’s controlled group.




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	 	(5)	 	Months of Benefit Service shall continue to be earned after a
Participant has attained age 65, provided that any benefits based on such
service shall be subject to Code section 409A.






	 	(e)	 	The benefits under this Program are designed to supplement benefits under the
Qualified Plans and are to be construed using the same principles and benefit
calculation methodologies applicable under the Qualified Plans except where expressly
modified in this Program.
	 
	 	(f)	 	Benefits are calculated without regard to the limits in sections 401(a)(17) and
415 of the Code.






	G.03 	 	Eligibility. Except as otherwise provided in (a) through (f) below, eligibility for
benefits under this Program is limited to elected or appointed officers of the Company, other
than Charles H. Noski.






	 	(a)	 	Employees of Newport New Shipbuilding, Inc. will be eligible to participate
under this Program effective January 1, 2004.
	 
	 	(b)	 	No employees of Vinnell Corporation, Component Technologies, or Premier America
Credit Union are eligible for benefits under this Program.
	 
	 	(c)	 	No Participant is entitled to any benefits under this Appendix G until he or
she becomes Vested under the Qualified Plans, except to the extent provided otherwise
in this Appendix G.
	 
	 	(d)	 	No individual who is, was, or will be eligible to participate in and receive
benefits under Appendix F of the Plan (the “CPC SERP”) is eligible to participate
under this Program.
	 
	 	(e)	 	Notwithstanding any other provisions of this Program to the contrary, elected
and appointed officers of the Company’s Mission Systems and Space Technology Sectors
will be eligible to participate under this Program effective as of January 1, 2005.
	 
	 	(f)	 	After June 2008, the only employees who shall become eligible to participate in
the Program shall be:






	 	(1)	 	individuals who become elected or appointed officers of the
Company after June 2008 due to rehire or promotion, provided they have been and
continue to be actively accruing benefits under a Company-sponsored qualified
defined benefit pension plan, and
	 
	 	(2)	 	any other individuals designated for participation in writing
by the Vice President, Compensation, Benefits and International (as such title
may be modified from time to time).






	G.04 	 	Benefit Amount.




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	 	(a)	 	A Participant’s annual Normal Retirement Benefit under this Program equals the
sum of (1) through (3) below, subject to the limit described in Section G.05:






	 	(1)	 	2.0% x Final Average Salary x Months of Benefit Service up to
120 months ÷ 12
	 
	 	(2)	 	1.5% x Final Average Salary x Months of Benefit Service in
excess of 120 months up to 240 months ÷ 12
	 
	 	(3)	 	1.0% x Final Average Salary x Months of Benefit Service in
excess of 240 months up to 540 months ÷ 12






	 	 	 	However, if an employee performs service during his or her career in covered
positions under both this Appendix G and the CPC SERP: the employee’s entire benefit
will be calculated under Section F.04 of the CPC SERP and payable under the terms of
that program; all benefits accrued under this Program will be eliminated; and no
amounts will be payable under this Appendix G.
	 
	 	(b)	 	The total benefit payable is a single, straight life annuity commencing at age
65, assuming an annual benefit equal to the gross benefit under (a). The form of
benefit and timing of commencement will be determined under Section G.06.
	 
	 	(c)	 	If a Participant’s benefit is paid under this Program before age 65, the
benefit will be adjusted as follows. The Early Retirement Benefit is a monthly benefit
equal to the Normal Retirement Benefit reduced by the lesser of:






	 	(1)	 	1/12th of 2.5% for each calendar month the payment of benefits
begins before age 65; or
	 
	 	(2)	 	2.5% for each Benefit Point less than 85 where the
Participant’s Benefit Points (truncated to reach a whole number) equal the sum
of:






	 	(A)	 	his or her age (computed to the nearest 1/12th
of a year) at the annuity starting date and
	 
	 	(B)	 	1/12th of his or her months of Credited Service
under the applicable Qualified Plan (also computed to the nearest
1/12th of a year) as of the date his or her employment terminated.






	 	 	 	A Participant’s Vesting Service and months of Credited Service earned under the
Qualified Plans (or deemed earned in the event of a transfer) are used to determine
whether the Early Retirement Benefit provisions apply and to calculate the early
retirement reduction.
	 
	 	(d)	 	Except as provided otherwise in this Appendix G, no benefit will be paid under
this Program if a Participant experiences a Termination of Employment before (1)




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	 	 	 	attaining age 55 and completing 120 Months of Benefit Service, or (2) attaining age 65
and completing 60 Months of Benefit Service.
	 
	 	 	 	Notwithstanding any other provision of the Program to the contrary, a Participant
who otherwise satisfies the requirements of this subsection (d) is not required to
retire and commence benefits under this Program upon his or her Termination of
Employment. This provision applies to Grandfathered Amounts only.
	 
	 	(e)	 	A Participant shall be entitled to benefits notwithstanding the Participant’s
failure to meet the requirements of Section G.04(d) if the following requirements are
satisfied:






	 	(1)	 	the Participant has been involuntarily terminated without cause
or terminated due to the divestiture of his business unit;
	 
	 	(2)	 	the Participant has reached age 53 and completed 10 years of
early retirement eligibility service, or has accumulated 75 points, as of the
date of termination, all as determined under the terms of the Northrop Grumman
Pension Plan; and
	 
	 	(3)	 	the Participant is actively accruing benefits under the Program
as of the date of termination.






	 	 	 	If a Participant receives a notice of an involuntary termination and then transfers
to another related entity instead of being involuntarily terminated, the Participant
will not qualify for vesting under this subsection (e). If an involuntarily
terminated Participant is rehired by the Company, vesting under this subsection (e)
would not apply unless the Participant is subsequently terminated and meets the
requirements described above.
	 
	 	 	 	All benefits payable pursuant to this subsection (e) shall be subject to reduction
for early retirement as applicable under Section G.04(c). All benefits payable under
this subsection (e) shall be subject to section 409A of the Code.
	 
	 	(f)	 	The rules set forth in this Section G.04(f) shall apply in the event a
Participant ceases to satisfy the eligibility requirements of Section G.03 (the
“eligibility requirements”) because the Participant is no longer an elected or
appointed officer of the Company:






	 	(1)	 	for purposes of calculating the Participant’s benefit amount
pursuant to Section G.04(a), “Eligible Pay” and “Months of Benefit Service”
shall not reflect amounts paid or service on or after the date the Participant
ceases to satisfy the eligibility requirements, except that in the event the
Participant subsequently satisfies the eligibility requirements, “Eligible Pay”
and “Months of Benefit Service” shall reflect all pay and past service to the
extent consistent with the terms of this Program in effect for newly
eligible employees at the time the Participant satisfies the eligibility
requirements for the second time;




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	 	(2)	 	for purposes of applying the 60% limitation pursuant to Section
G.05(a), “Eligible Pay” shall include amounts paid on or after the date the
Participant ceases to satisfy the eligibility requirements;
	 
	 	(3)	 	for purposes of applying the offset provision of Section
G.05(b), benefits accrued under other plans shall reflect pay and service on or
after the date the Participant ceases to satisfy the eligibility requirements;
	 
	 	(4)	 	for purposes of applying Sections G.04(d) and G.04(e), service
on or after the date the Participant ceases to satisfy the eligibility
requirements shall continue to count as service, provided that if the
Participant would not otherwise receive benefits if not for the application of
this paragraph (4), all benefits shall be subject to section 409A of the Code;
	 
	 	(5)	 	for purposes of applying the reduction for early retirement
pursuant to Section G.04(c), service on or after the date the Participant
ceases to satisfy the eligibility requirements shall continue to count as
service.






	G.05 	 	Benefit Limit. Accruals under Section G.04 will be limited as provided in this
Section.






	 	(a)	 	A Participant’s total accrued benefits under all plans, programs, and
arrangements in which he or she participates, including the benefit accrued under
Section G.04 and all plans included in Section G.05(b), may not exceed 60% of his or
her Final Average Salary. If this limit is exceeded, the Participant’s benefit accrued
under this Program will be reduced to the extent necessary to satisfy the limit.






	 	(1)	 	The Participant’s Final Average Salary will be reduced for
early retirement applying the factors in Section G.04(c).
	 
	 	(2)	 	The limit in this subsection may not be exceeded even after the
benefits under this Program have been enhanced under any Special Agreements.






	 	(b)	 	The gross benefit calculated under Section G.04 above (multiplied by any
applicable early retirement factor) is reduced by the retirement benefits the
participant is entitled to receive (including all early retirement subsidies,
supplements, and other such benefits) under all defined benefit retirement plans,
programs, and arrangements maintained by the Affiliated Companies, whether qualified or
nonqualified (but not contributory or defined contribution plans, programs, or
arrangements).
	 
	 	(c)	 	For purposes of the offset in subsection (b):






	 	(1)	 	Offsets will be made:






	 	(A)	 	with respect to:




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	 	(i)	 	benefits accrued under any plan
while a Participant is employed by the Affiliated Companies; and
	 
	 	(ii)	 	benefits accrued under any plan
while a Participant was employed by a company before it became
an Affiliated Company;






	 	(B)	 	with respect to any benefit enhancements under
change-in-control Special Agreements (including enhancements for age
and service) that Participants have entered into with the Company
(“Special Agreements”); and
	 
	 	(C)	 	without regard to:






	 	(i)	 	benefits accrued under the
Supplemental Retirement Income Program for Senior Executives
described in Appendix A;
	 
	 	(ii)	 	Part II benefits under the Litton
Restoration Plan and Litton Restoration Plan II; or
	 
	 	(iii)	 	benefits accrued under the
Company’s Pilot’s Transition Plan.






	 	(2)	 	If a Participant’s benefit under this Program commences upon
reaching age 65, the Participant’s benefits under all the plans and programs
described in (b) above will be compared on the basis of a single, straight life
annuity commencing at age 65 using the assumptions stated in Section G.09.
	 
	 	(3)	 	If a Participant’s benefit under this Program commences before
age 65, benefits under this Program will be offset for the plans described in
(b) above by converting the benefits paid or payable from those plans to an
actuarially equivalent single life annuity benefit commencing upon retirement.
For this purpose, the benefit will be converted to an early retirement benefit
under each applicable plan’s terms and further adjusted, if necessary, for
different normal forms of benefits or different commencement dates using the
actuarial assumptions of Section G.09.
	 
	 	(4)	 	If a Participant previously received a distribution under one
of the plans described in (b) above for a period of service that counts as
Months of Benefit Service, that previously received benefit applies toward the
limit under this Section.






	 	(e)	 	Example: A Participant elects to receive an early retirement benefit at age 55
after completing 240 Months of Benefit Service with Final Average Salary equal to
$250,000. The Participant has accrued monthly benefits under the Northrop Grumman
Electronic Systems Pension Plan (the “ES Plan”) equal to $2,550




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	 	 	 	payable at age 55, the
Northrop Grumman ERISA Supplemental Program 2 (“ERISA 2”) equal to $600 payable at age
55, and the Northrop Grumman Electronic Systems Executive Pension Plan (the “ES EPP”)
equal to $600 payable at age 65.
	 
	 	 	 	The Participant’s pre-offset benefit under this Program, calculated in accordance
with Section G.04, equals 35% of the Participant’s Final Average Salary ($250,000) x
75% to account for the early retirement reduction under Section G.04(c). This
results in a monthly gross benefit under this Program, before the benefit limit is
applied, equal to $5,468.75. The Participant’s total net benefit is calculated,
taking into account the offset under (b) above, by reducing the gross benefit by the
following:






	 	(1)	 	the $2,550 monthly benefit under the ES Plan payable at age 55,
subject to that plan’s conversion factors; and
	 
	 	(2)	 	the $600 ERISA 2 early retirement single life annuity payable
at age 55.
	 
	 	(3)	 	No offset results from the ES EPP, however, because the
Participant is not eligible to receive a benefit at age 55 under that plan.






	 	 	 	This results in a monthly gross benefit under this Program equal to $2,318.75.






	G.06 	 	Payment of Benefits.






	 	(a)	 	Benefits will generally be paid in accordance with Section 2.03 of the Plan.
	 
	 	 	 	In addition to all other benefit forms otherwise available under this Program,
effective as of January 1, 2004, a Participant may elect to have his or her benefits
paid in the form of a 75% Joint and Survivor Option. Under this option, the
Participant is paid a reduced monthly benefit for life and then, if the
Participant’s spouse is still alive, a benefit equal to 75% of the Participant’s
monthly benefit is paid to the spouse for the remainder of his or her life. If the
spouse is not still alive when the Participant dies, no further payments are made.
The determination of the benefit payable under this option will be made utilizing
the factors for a 75% Joint and Survivor Option under the provisions of the Northrop
Grumman Retirement Plan.
	 
	 	(b)	 	Except as provided in (c), benefits will commence as of the first day of the
month following the Participant’s Termination of Employment or, if later, as of the
date the Participant’s early retirement benefit commences under the Qualified Plans.
	 
	 	(c)	 	If a Participant has a Termination of Employment because of disability before
the Participant is eligible for an early retirement benefit from a Qualified Plan,
benefits may commence immediately, subject to adjustment for early commencement using
the applicable factors and methodologies under Sections G.04(c) and G.05(c)(3).




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	 	(d)	 	If a Participant dies after commencement of benefits, any survivor benefits
will be paid in accordance with the form of benefit selected by the Company. If a
Participant dies prior to commencement of benefits, payment will be made under Section
G.07.






	 	 	The distribution rules under this Section only apply to Grandfathered Amounts. See Appendix
1 and Appendix 2 for distribution rules that apply to other Plan benefits.
	 
	G.07 	 	Preretirement Death Benefits. If a Participant dies before benefits commence,
preretirement surviving spouse benefits are payable under this Program on behalf of the
Participant if his or her surviving spouse is eligible for a qualified preretirement survivor
annuity (as required under section 401(a)(11) of the Code) from a Qualified Plan.






	 	(a)	 	Amount and Form of Preretirement Death Benefit. A preretirement death benefit
paid to a surviving spouse is the survivor benefit paid to a surviving spouse is the
survivor benefit portion of a 100% joint and survivor annuity calculated using the
survivor annuity factors under the Northrop Grumman Pension Plan in an amount
determined as follows:






	 	(1)	 	First, the Participant’s gross benefit under Section G.04(a)
will be calculated and reduced, as necessary, for early retirement using the
factors in Section G.04(c);
	 
	 	(2)	 	Second, the target preretirement death benefit under this
Program will be calculated by applying the appropriate 100% joint-and-survivor
annuity factor (as provided in the Northrop Grumman Pension Plan) to the amount
determined in (1); and
	 
	 	(3)	 	Third, the target preretirement death benefit determined in (2)
will be reduced by the preretirement death benefits, if any, payable under all
defined benefit retirement plans, programs, and arrangements maintained by the
Affiliated Companies, whether qualified or nonqualified, that are otherwise
included in the offsets described under Section G.05(b) such that the sum of
the preretirement death benefit payments made to the surviving spouse under all
plans, including this Program, will equal, at all times, the level of payments
determined to be the target preretirement death benefit (subject to the benefit
limit described in Section G.05(a)).






	 	(b)	 	Timing of Preretirement Death Benefit.






	 	(1)	 	Benefits commence as of the first day of the month following
the death of the Participant, subject to adjustment for early commencement
using the applicable factors under G.04(c).
	 
	 	(2)	 	If there is a dispute as to whom payment is due, the Company
may delay payment until the dispute is settled.




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	 	(c)	 	No benefit is payable under this Program with respect to a spouse after the
spouse dies.





          The distribution rules under this Section only apply to Grandfathered Amounts. See Appendix 1
and Appendix 2 for distribution rules that apply to other Plan benefits.




	G.08 	 	Individual Arrangements. This Section applies to a Participant who has an
individually-negotiated arrangement with the Company for supplemental retirement pension
benefits. Notwithstanding any other provision to the contrary, this Section does not apply to
any individually-negotiated arrangements between a Participant and the Company concerning
severance payments.






	 	(a)	 	This Section is intended to coordinate the benefits under this Program with
those of any individually-negotiated arrangement. Participants with such arrangements
will be paid the better of the benefits under the arrangement or under Sections G.04 or
G.07 (as limited by G.05).
	 
	 	(b)	 	In no case will duplicate benefits be paid under this Program and such an
individual arrangement. Any payments under this Program will be counted toward the
Company’s obligations under an individual arrangement, and vice-versa.
	 
	 	(c)	 	If the benefit under an individually-negotiated arrangement exceeds the one
payable under this Program, then the individual benefit will be substituted as the
benefit payable under this Program (even if it exceeds the limit under G.05).
	 
	 	(d)	 	To determine which benefit is greater, all benefits will be compared, subject
to adjustment for early retirement using the applicable factors and methodologies under
Sections G.04(c) and G.05(c)(3).
	 
	 	(e)	 	For purposes of (d), the individually-negotiated benefit will be determined in
accordance with all of its terms and conditions. Nothing in this Section is meant to
alter any of those terms and conditions.
	 
	 	(f)	 	This Section does not apply to the Special Agreements.






	G.09 	 	Actuarial Assumptions. The following defined terms and actuarial assumptions will be
used to the extent necessary under Sections G.05 and G.08 to convert benefits to straight life
annuity form commencing upon the Participant reaching age 65:
	 
	 	 	Interest: Five percent (5%)
	 
	 	 	Mortality: The applicable mortality table which would be used to calculate a lump
sum value for the benefit under the Qualified Plans.

	 
	 	 	Increase in Code Section 415 Limit: 2.8% per year.
	 
	 	 	Variable Unit Values: Variable Unit Values are presumed not to increase for future
periods after commencement of benefit.





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	G.10 	 	Forfeiture of Benefits. Notwithstanding any other provision of this Program, this
Section applies to a Participant’s total accrued benefit under this Program earned after 2010.






	 	(a)	 	Determination of a Forfeiture Event. The Compensation Committee or
its delegate will, in its sole discretion, determine whether a Forfeiture Event (as
defined in subsection (b)) has occurred; provided that no Forfeiture Event shall be
incurred by a Participant who has a termination of employment due to mandatory
retirement pursuant to Company policy. Such a determination may be made by the
Compensation Committee or its delegate for up to one year following the date that the
Compensation Committee has actual knowledge of the circumstances that could constitute
a Forfeiture Event.
	 
	 	(b)	 	Forfeiture Event Defined. A “Forfeiture Event” means that, while
employed by any of the Affiliated Companies or at any time in the two year period
immediately following the Participant’s last day of employment by one of the Affiliated
Companies, the Participant, either directly or indirectly through any other person, is
employed by, renders services (as a director, consultant or otherwise) to, has any
ownership interest in, or otherwise participates in the financing, operation,
management or control of, any business that is then in competition with the business of
any of the Affiliated Companies. A Participant will not, however, be considered to
have incurred a Forfeiture Event solely by reason of owning up to (and not more than)
two percent (2%) of any class of capital stock of a corporation that is registered
under the Securities Exchange Act of 1934.
	 
	 	(c)	 	Forfeiture of Benefits.






	 	(1)	 	If the Compensation Committee or its delegate determines that a
Forfeiture Event has occurred, the relevant Participant may forfeit up to 100%
of his or her total accrued benefit under this Program earned after 2010. The
amount forfeited, if any, will be determined by the Compensation Committee or
its delegate in its sole discretion, and may consist of all or a portion of the
Program benefits earned after 2010 and not yet paid.
	 
	 	(2)	 	Program benefits earned by a Participant after 2010 shall be
deemed to constitute a proportionate share of each payment of benefits that is
not a Grandfathered Amount for purposes of determining the portion of each such
payment to be forfeited under subsection (1).
	 
	 	(3)	 	Any forfeiture pursuant to this Section will also apply with
respect to survivor benefits or benefits assigned under a Qualified Domestic
Relations Order.






	 	(d)	 	Coordination with 60% Benefit Limit. For purposes of applying the 60%
of Final Average Salary benefit limit of Section G.05, or any other similar provision
in other plans, programs and arrangements of the Affiliated Companies, such benefit
limit will be applied as if no forfeiture occurred under this Section G.10.




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	 	(e)	 	Notice and Claims Procedure.






	 	(1)	 	The Company will provide timely notice to any Participant who
incurs a forfeiture pursuant to this Section G.10. Any delay by the Company in
providing such notice will not otherwise affect the amount or timing of any
forfeiture determined by the Compensation Committee or its delegate.
	 
	 	(2)	 	The procedures set forth in the Company’s standardized Northrop
Grumman Nonqualified Plans Claims and Appeals Procedures (“Claims Procedures”)
will apply to any claims and appeals arising out of or related to any
forfeiture under this Section G.10, except as provided below:






	 	(A)	 	The Compensation Committee, or its delegate,
will serve in place of the designated decision-makers on any such
claims and appeals.
	 
	 	(B)	 	After a claimant has exhausted his remedies
under the Claims Procedures, including the appeal stage, the claimant
forgoes any right to file a civil action under ERISA section 502(a),
but instead may present any claims arising out of or related to any
forfeiture under this Section G.10 to final and binding arbitration in
the manner described below:






	 	(i)	 	A claimant must file a demand for
arbitration no later than one year following a final decision on
the appeal under the Claims Procedures. After such period, no
claim for arbitration may be filed, and the decision becomes
final. A claimant must deliver a demand for arbitration to the
Company’s General Counsel.
	 
	 	(ii)	 	Any claims presented shall be
settled by arbitration consistent with the Federal Arbitration
Act, and consistent with the then-current Arbitration Rules and
Procedures for Employment Disputes, or equivalent, established
by JAMS, a provider of private dispute resolution services.
	 
	 	(iii)	 	The parties will confer to
identify a mutually acceptable arbitrator. If the parties are
unable to agree on an arbitrator,
the parties will request a list of proposed arbitrators from
JAMS and:






	 	(a)	 	If there is an
arbitrator on the list acceptable to both parties, that
person will be selected. If there is more than one
arbitrator on the list acceptable to both parties, each
party will rank each arbitrator in order of preference,
and the arbitrator with the highest combined ranking
will be selected.





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	 	(b)	 	If there is no
arbitrator acceptable to both parties on the list, the
parties will alternately strike names from the list
until only one name remains, who will be selected.






	 	(iv)	 	The fees and expenses of the
arbitrator will be borne equally by the claimant and the
Company. Each side will be entitled to use a representative,
including an attorney, at the arbitration. Each side will bear
its own deposition, witness, expert, attorneys’ fees, and other
expenses to the same extent as if the matter were being heard in
court. If, however, any party prevails on a claim, which (if
brought in court) affords the prevailing party attorneys’ fees
and/or costs, then the arbitrator may award reasonable fees
and/or costs to the prevailing party to the same extent as would
apply in court. The arbitrator will resolve any dispute as to
who is the prevailing party and as to the reasonableness of any
fee or cost.
	 
	 	(v)	 	The arbitrator will take into
account all comments, documents, records, other information,
arguments, and theories submitted by the claimant relating to
the claim, or considered by the Compensation Committee or its
delegate relating to the claim, but only to the extent that it
was previously provided as part of the initial decision or
appeal request on the claim.
	 
	 	 	 	The arbitrator may grant a claimant’s claim only if the
arbitrator determines it is justified based on: (a) the
Compensation Committee, or its delegate erred upon an issue
of law in the appeal request, or (b) the Compensation
Committee’s, or its delegate’s, findings of fact during the
appeal process were not supported by the evidence.
	 
	 	(vi)	 	The arbitrator shall issue a
written opinion to the parties stating the essential findings
and conclusions upon which the arbitrator’s award is based. The
decision of the
arbitrator will be final and binding upon the claimant and
the Company. A reviewing court may only confirm, correct, or
vacate an award in accordance with the standards set forth in
the Federal Arbitration Act, 9 U.S.C. §§ 1-16.
	 
	 	(vii)	 	In the event any court finds any
portion of this procedure to be unenforceable, the unenforceable
section(s) or provision(s) will be severed from the rest, and the




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	 	 	 	remaining section(s) or provisions(s) will be otherwise
enforced as written.






	 	(f)	 	Application. Should a Forfeiture Event occur, this Section G.10 is in
addition to, and does not in any way limit, any other right or remedy of the Affiliated
Companies, at law or otherwise, in connection with such Forfeiture Event.






	G.11 	 	Grumman SRP Participants. The following special rules shall apply to Participants who
are entitled to benefits under the Northrop Grumman Corporation Supplemental Retirement Plan
(the “SRP”). Any additional accrued benefits resulting from these special rules shall be
subject to Code Section 409A.






	 	(a)	 	The offset provided for in Section G.05(b) related to an SRP benefit shall be
based on the amount payable under the 15-year certain payment form in the SRP, not the
actuarially equivalent single life annuity amount.
	 
	 	(b)	 	The offset for the SRP amount shall be applied after the benefit under this
Program has been converted into any optional form of payment elected.
	 
	 	(c)	 	When payments cease under the SRP after 15 years, the annual benefit under this
Program shall increase by the amount of the annual benefit that was being paid under
the SRP.






	G.12 	 	TASC Participants. Participants who are actively employed in a TASC
Entity: 254 or 255 on the date the entities are transferred to an
unrelated buyer (“TASC Closing Date”) will be 100% vested in their
benefit under the Program on the TASC Closing Date. No pay or service
after the TASC Closing Date will count for purposes of determining
the amount of such a Participant’s benefit under the Program. The
offsets that apply to a Participant’s benefit under Section G.05(b)
shall be determined on the date the Participant’s benefits payments
commence under the Program. All benefits that become vested under
this Section G.12 shall be subject to section 409A of the Code.
	 
	G.13 	 	Transfer of Liabilities to HII. Northrop Grumman Corporation
distributed its interest in Huntington Ingalls Industries, Inc.
(“HII”) to its shareholders on March 31, 2011 (the “HII Distribution
Date”). Pursuant to an agreement between Northrop Grumman Corporation
and HII, on the HII Distribution Date certain employees and former
employees of HII ceased to participate in the Program and the
liabilities for these participants’ benefits under the Program were
transferred to HII. On and after the HII Distribution Date, the
Company and the Program, and any successors thereto, shall have no further obligation or
liability to any such participant with respect to any benefit, amount, or right due under
the Program.





*   *   *





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               IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly
authorized officer on this 27th day of June, 2011.




	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

	 
	 	By:  	/s/ Debora L. Catsavas
 
	 
	 	Debora L. Catsavas 	 
	 	Vice President, Compensation,

Benefits & International 	 
	 




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