exv10w5






Exhibit 10.5




NORTHROP GRUMMAN



SAVINGS EXCESS PLAN



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








 









 








TABLE OF CONTENTS




	 	 	 	 	 

	INTRODUCTION
	 	 	2	 
	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	1.1     Definitions
	 	 	2	 
	 	 	 	 	 
	ARTICLE II PARTICIPATION
	 	 	6	 
	2.1     In General
	 	 	6	 
	2.2     Disputes as to Employment Status
	 	 	6	 
	 	 	 	 	 
	ARTICLE III DEFERRAL ELECTIONS
	 	 	7	 
	3.1    Elections to Defer Eligible Compensation
	 	 	7	 
	3.2    Contribution Amounts
	 	 	7	 
	3.3    Crediting of Deferrals
	 	 	8	 
	3.4    Maximum Contributions
	 	 	8	 
	3.5    Investment Elections
	 	 	8	 
	3.6    Investment Return Not Guaranteed
	 	 	9	 
	 	 	 	 	 
	ARTICLE IV ACCOUNTS
	 	 	9	 
	4.1    Accounts
	 	 	9	 
	4.2    Valuation of Accounts
	 	 	9	 
	4.3    Use of a Trust
	 	 	10	 
	 	 	 	 	 
	ARTICLE V VESTING AND FORFEITURES
	 	 	10	 
	5.1    In General
	 	 	10	 
	5.2    Exceptions
	 	 	10	 
	 	 	 	 	 
	ARTICLE VI DISTRIBUTIONS
	 	 	11	 
	6.1    Distribution Rules for Non-RAC Amounts
	 	 	11	 
	6.2    Distribution Rules for RAC Subaccount
	 	 	12	 
	6.3    Effect of Taxation
	 	 	12	 
	6.4    Permitted Delays
	 	 	12	 
	6.5    Payments Not Received At Death
	 	 	12	 
	6.6    Inability to Locate Participant
	 	 	12	 
	6.7    Committee Rules
	 	 	13	 
	 	 	 	 	 
	ARTICLE VII ADMINISTRATION
	 	 	13	 
	7.1    Committees
	 	 	13	 
	7.2    Committee Action
	 	 	13	 
	7.3    Powers and Duties of the Administrative Committee
	 	 	14	 
	7.4    Powers and Duties of the Investment Committee
	 	 	14	 
	7.5    Construction and Interpretation
	 	 	15	 
	7.6    Information
	 	 	15	 
	7.7    Committee Compensation, Expenses and Indemnity
	 	 	15	 
	7.8    Disputes
	 	 	15	 
	 	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	16	 
	8.1    Unsecured General Creditor
	 	 	16	 
	8.2    Restriction Against Assignment
	 	 	16	 






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	8.3    Restriction Against Double Payment
	 	 	17	 
	8.4    Withholding
	 	 	17	 
	8.5    Amendment, Modification, Suspension or Termination
	 	 	17	 
	8.6    Governing Law
	 	 	18	 
	8.7    Receipt and Release
	 	 	18	 
	8.8    Payments on Behalf of Persons Under Incapacity
	 	 	18	 
	8.9    Limitation of Rights and Employment Relationship
	 	 	18	 
	8.10  Headings
	 	 	18	 
	8.11  Liabilities Transferred to HII
	 	 	18	 
	 	 	 	 	 
	APPENDIX A – 2005 TRANSITION RELIEF
	 	 	1	 
	A.1    Cash-Out
	 	 	1	 
	A.2    Elections
	 	 	1	 
	A.3    Key Employees
	 	 	1	 
	 	 	 	 	 
	APPENDIX B – DISTRIBUTION RULES FOR PRE-2005 AMOUNTS
	 	 	1	 
	B.1    Distribution of Contributions
	 	 	1	 
	 	 	 	 	 
	APPENDIX C – MERGED PLANS
	 	 	1	 
	C.1    Plan Mergers
	 	 	1	 
	C.2    Merged Plans – General Rule
	 	 	1	 














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INTRODUCTION




                    The Northrop Grumman Savings Excess Plan (the “Plan”) was last amended and restated effective
as of January 1, 2011. This restatement amends that version of the Plan, and is also effective
January 1, 2011. This restatement includes changes that apply to amounts earned and vested under
the Plan prior to 2005.



                    Northrop Grumman Corporation (the “Company”) established this Plan for participants in the
Northrop Grumman Savings Plan who exceed the limits under sections 401(a)(17) or 415(c) of the
Internal Revenue Code. This Plan is intended (1) to comply with section 409A of the Internal
Revenue Code, as amended (the “Code”) and official guidance issued thereunder (except with respect
to amounts covered by Appendix B), and (2) to be “a plan which is unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a select group of
management or highly compensated employees” within the meaning of sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974. Notwithstanding any other
provision of this Plan, this Plan shall be interpreted, operated and administered in a manner
consistent with these intentions.



ARTICLE I




DEFINITIONS



          1.1     Definitions




                    Whenever the following words and phrases are used in this Plan, with the first letter
capitalized, they shall have the meanings specified below.



                    (a)     “Account” shall mean the recordkeeping account set up for each Participant to keep track
of amounts to his or her credit.



                    (b)     “Administrative Committee” means the committee in charge of Plan administration, as
described in Article VII.



                    (c)     “Affiliated Companies” shall mean the Company and any entity affiliated with the Company
under Code sections 414(b) or (c).



                    (d)     “Base Salary” shall mean a Participant’s annual base salary, excluding bonuses,
commissions, incentive and all other remuneration for services rendered to the Affiliated Companies
and prior to reduction for any salary contributions to a plan established pursuant to section 125
of the Code or qualified pursuant to section 401(k) of the Code.



                    (e)     “Basic Contributions” shall have the same meaning as that term is defined in the NGSP.



                    (f)     “Beneficiary” or “Beneficiaries” shall mean the person or persons, including a trustee,
personal representative or other fiduciary, last designated in writing by a



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Participant in accordance with procedures established by the Administrative Committee to
receive the benefits specified hereunder in the event of the Participant’s death.




                              (1)     
No Beneficiary designation shall become effective until it is filed with the
Administrative Committee.



                              (2)     
Any designation shall be revocable at any time through a written instrument filed by the
Participant with the Administrative Committee with or without the consent of the previous
Beneficiary.



                                    
    No designation of a Beneficiary other than the Participant’s spouse shall be valid unless
consented to in writing by such spouse. If there is no such designation or if there is no surviving
designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary. If there
is no surviving spouse to receive any benefits payable in accordance with the preceding sentence,
the duly appointed and currently acting personal representative of the Participant’s estate (which
shall include either the Participant’s probate estate or living trust) shall be the Beneficiary. In
any case where there is no such personal representative of the Participant’s estate duly appointed
and acting in that capacity within 90 days after the Participant’s death (or such extended period
as the Administrative Committee determines is reasonably necessary to allow such personal
representative to be appointed, but not to exceed 180 days after the Participant’s death), then
Beneficiary shall mean the person or persons who can verify by affidavit or court order to the
satisfaction of the Administrative Committee that they are legally entitled to receive the benefits
specified hereunder. Any payment made pursuant to such determination shall constitute a full
release and discharge of the Plan, the Administrative Committee and the Company. Effective January
1, 2007, a Participant will automatically revoke a designation of a spouse as primary beneficiary
upon the dissolution of their marriage.



                              (3)     
In the event any amount is payable under the Plan to a minor, payment shall not be made to
the minor, but instead be paid (a) to that person’s living parent(s) to act as custodian, (b) if
that person’s parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (c) if no parent of that person is then living, to a custodian selected by the
Administrative Committee to hold the funds for the minor under the Uniform Transfers or Gifts to
Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the
Administrative Committee decides not to select another custodian to hold the funds for the minor,
then payment shall be made to the duly appointed and currently acting guardian of the estate for
the minor or, if no guardian of the estate for the minor is duly appointed and currently acting
within 60 days after the date the amount becomes payable, payment shall be deposited with the court
having jurisdiction over the estate of the minor. Any payment made pursuant to such determination
shall constitute a full release and discharge of the Plan, the Administrative Committee and the
Company.



                              (4)     
Payment by the Affiliated Companies pursuant to any unrevoked Beneficiary designation, or
to the Participant’s estate if no such designation exists, of all benefits owed hereunder shall
terminate any and all liability of the Affiliated Companies.



                    (g)     
“Board” shall mean the Board of Directors of the Company.



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                    (h)     “Bonuses” shall mean the bonuses earned under the Company’s formal incentive plans as
defined by the Administrative Committee.



                    (i)     “Code” shall mean the Internal Revenue Code of 1986, as amended.



                    (j)     “Committees” shall mean the Committees appointed as provided in Article VII.



                    (k)     “Company” shall mean Northrop Grumman Corporation and any successor.



                    (l)     “Company Contributions” shall mean contributions by the Company to a Participant’s
Account.



                    (m)     “Compensation” shall be Compensation as defined by Section 5.01 of the NGSP.



                    (n)     “Disability” or “Disabled” shall mean the Participant’s inability to perform each and
every duty of his or her occupation or position of employment due to illness or injury as
determined in the sole and absolute discretion of the Administrative Committee.



                    (o)     “Eligible Compensation” shall mean (1) Compensation prior to January 1, 2009, and (2)
after 2008, Base Salary and Bonuses, reduced by the amount of any deferrals made from such amounts
under the Northrop Grumman Deferred Compensation Plan.



                    (p)     “Eligible Employee” shall mean any Employee who meets the following conditions:



                              (1)     he or she is eligible to participate in the NGSP;



                              (2)     he or she is classified by the Affiliated Companies as an Employee and not as an
independent contractor; and



                              (3)     he or she meets any additional eligibility criteria set by the Administrative Committee.




Additional eligibility criteria established by the Administrative Committee
may include specifying classifications of Employees who are eligible to
participate and the date as of which various groups of Employees will be
eligible to participate. This includes, for example, Administrative
Committee authority to delay eligibility for employees of newly acquired
companies who become Employees.



                    (q)     “Employee” shall mean any common law employee of the Affiliated Companies who is
classified as an employee by the Affiliated Companies.



                    (r)     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.



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                    (s)     “Investment Committee” means the committee in charge of investment aspects of the Plan, as
described in Article VII.



                    (t)     “Key Employee” means an employee treated as a “specified employee” under Code section
409A(a)(2)(B)(i) of the Company or the Affiliated Companies (i.e., a key employee (as defined in
Code section 416(i) without regard to paragraph (5) thereof)) if the Company’s or an Affiliated
Company’s stock is publicly traded on an established securities market or otherwise. The Company
shall determine in accordance with a uniform Company policy which Participants are Key Employees as
of each December 31 in accordance with IRS regulations or other guidance under Code section 409A,
provided that in determining the compensation of individuals for this purpose, the definition of
compensation in Treas. Reg. § 1.415(c)-2(d)(3) shall be used. Such determination shall be
effective for the twelve (12) month period commencing on April 1 of the following year.



                    (u)     “NGSP” means the Northrop Grumman Savings Plan.



                    (v)     “Open Enrollment Period” means the period designated by the Administrative Committee for
electing deferrals for the following Plan Year.



                    (w)     “Participant” shall mean any Eligible Employee who participates in this Plan in accordance
with Article II or any Employee who is a RAC Participant.



                    (x)     “Payment Date” shall mean:



                              (1)     for distributions upon early termination under Section B.1(a), a date after the end of the
month in which termination of employment occurs; and



                              (2)     for distributions after Retirement, Disability or death under Section B.1(b), a date after
the end of the month in which occurs Retirement, the determination of Disability by the
Administrative Committee, or the notification of the Administrative Committee of the Participant’s
death (or later qualification of the Beneficiary or Beneficiaries), as applicable.


The exact date in each case will be determined by the Administrative Committee to allow time for
administrative processing.




                    (y)     “Plan” shall be the Northrop Grumman Savings Excess Plan.



                    (z)     “Plan Year” shall be the calendar year.



                    (aa)     “RAC Contributions” shall mean the Company contributions under Section 3.2(b)(2).



                    (bb)      “RAC Participant” shall mean an Employee who is eligible to participate in the NGSP,
receives Retirement Account Contributions under the NGSP, and is classified by the Affiliated
Companies as an Employee and not as an independent contractor. Notwithstanding the foregoing, an
Employee who becomes eligible to participate in the Officers Supplemental Executive Retirement
Program II (“OSERP II”) under the Northrop Grumman Supplemental Plan 2 shall immediately cease to
be eligible for RAC Contributions.



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                    (cc)     “RAC Subaccount” shall mean the portion of a Participant’s Account made up of RAC
Contributions and earnings thereon.



                    (dd)     “Retirement” shall mean termination of employment with the Affiliated Companies after
reaching age 55.



                    (ee)     “Separation from Service” or “Separates from Service” or “Separating from Service” means
a “separation from service” within the meaning of Code section 409A.



ARTICLE II




PARTICIPATION



          2.1      In General




                    (a)     An Eligible Employee may become a Participant by complying with the procedures established
by the Administrative Committee for enrolling in the Plan. Anyone who becomes an Eligible Employee
will be entitled to become a Participant during an Open Enrollment Period.



                    (b)     A RAC Participant will become a Participant when RAC Contributions are first made to his
or her RAC Subaccount.



                    (c)     An individual will cease to be a Participant when he or she no longer has a positive
balance to his or her Account under the Plan.



          2.2      Disputes as to Employment Status




                    (a)     Because there may be disputes about an individual’s proper status as an Employee or
non-Employee, this Section describes how such disputes are to be handled with respect to Plan
participation.



                    (b)     The Affiliated Companies will make the initial determination of an individual’s employment
status.



                         
   (1)     If an individual is not treated by the Affiliated Companies as a common law employee, then
the Plan will not consider the individual to be an “Eligible Employee” and he or she will not be
entitled to participate in the Plan.



                         
   (2)     This will be so even if the individual is told he or she is entitled to participate in the
Plan and given a summary of the plan and enrollment forms or other actions are taken indicating
that he or she may participate.



                             (c)     Disputes may arise as to an individual’s employment status. As part of the resolution of
the dispute, an individual’s status may be changed by the Affiliated Companies from non-Employee to
Employee. Such Employees are not Eligible Employees and will not be entitled to participate in the
Plan.



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ARTICLE III




DEFERRAL ELECTIONS



          3.1     Elections to Defer Eligible Compensation




                    (a)     Timing. An Eligible Employee who meets the requirements of Section 2.1(a) may
elect to defer Eligible Compensation earned in a Plan Year by filing an election in the Open
Enrollment Period for the Plan Year. An election to participate for a Plan Year is irrevocable.



                    (b)     Election Rules. An Eligible Employee’s election may be made in writing,
electronically, or as otherwise specified by the Administrative Committee. Such election shall
specify the Eligible Employee’s rate of deferral for contributions to the Plan, which shall be
between 1% and 75%, and shall address distribution of the deferred amounts as described in Section
6.1. All elections must be made in accordance with the rules, procedures and forms provided by the
Administrative Committee. The Administrative Committee may change the rules, procedures and forms
from time to time and without prior notice to Participants.



                    (c)     Cancellation of Election. If a Participant becomes disabled (as defined under Code
section 409A) during a Plan Year, his deferral election for such Plan Year shall be cancelled.



          3.2     Contribution Amounts




                    (a)     Participant Contributions. An Eligible Employee’s contributions under the Plan for
a Plan Year will begin once his or her Compensation for the Plan Year exceeds the Code section
401(a)(17) limit for the Plan Year. The Participant’s elected deferral percentage will be applied
to his or her Eligible Compensation for the balance of the Plan Year.



                    (b)     Company Contributions. The Company will make Company Contributions to a
Participant’s Account as provided in (1), (2) and (3) below.



                              (1)     Matching Contributions. The Company will make a Company Contribution equal to the
matching contribution rate for which the Participant is eligible under the NGSP for the Plan Year
multiplied by the amount of the Participant’s contributions under subsection (a).



                              (2)     RAC Contributions. Effective July 1, 2008, the Company will make RAC Contributions
equal to a percentage of a RAC Participant’s Compensation for a Plan Year in excess of the Code
section 401(a)(17) limit. The percentage used to calculate a RAC Participant’s contribution for a
Plan Year shall be based on the RAC Participant’s age on the last day of the Plan Year as follows:



                                        (i)     Three percent if not yet age 35.



                                        (ii)     Four percent if 35 or older, but not yet 50.



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                                        (iii)     
Five percent if age 50 or older.



                              (3)     Make-Up Contributions for Contribution Limitation. If an Eligible Employee’s Basic
Contributions under the NGSP for a Plan Year are limited by the Code section 415(c) contribution
limit before the Eligible Employee’s Basic Contributions under the NGSP are limited by the Code
section 401(a)(17) compensation limit, the Company will make a Company Contribution equal to the
amount of matching contributions for which the Eligible Employee would have been eligible under the
NGSP were Code section 415(c) not applied, reduced by the actual amount of matching contributions
made for the Plan Year under the NGSP.



          3.3     Crediting of Deferrals




                    Amounts deferred by a Participant under the Plan shall be credited to the Participant’s
Account as soon as practicable after the amounts would have otherwise been paid to the Participant.
Company contributions other than those under Section 3.2(b)(3) will be credited to Accounts as
soon as practicable after each payroll cycle in which they accrue. Company contributions under
Section 3.2(b)(3) will be credited to Accounts as soon as practicable after each Plan Year.



          3.4     Maximum Contributions




                    Effective January 1, 2011, the total amount of contributions under Sections 3.2(a) and (b)
made to the Plan on behalf of each Corporate Policy Council member (“CPC Participant”) shall not
exceed $5 million (the “Lifetime Cap”). The following items will not count toward the Lifetime
Cap: (a) investment gains or earnings, and (b) amounts originally contributed to other plans that
have been or are merged into the Plan. Notwithstanding the foregoing, Company Contributions shall
continue to be made to a CPC Participant’s Account until the end of the Plan Year in which the CPC
Participant reaches the Lifetime Cap, and any deferral election made by a CPC Participant that is
irrevocable under Code section 409A on the date the Lifetime Cap is reached shall remain effective.



          3.5     Investment Elections




                    (a)     The Investment Committee will establish a number of different investment funds or other
investment options for the Plan. The Investment Committee may change the funds or other investment
options from time to time, without prior notice to Participants.



                    (b)     Participants may elect how their future contributions and existing Account balances will
be deemed invested in the various investment funds and may change their elections from time to
time. If a Participant does not elect how future contributions will be deemed invested,
contributions will be deemed invested in the qualified default investment alternative (“QDIA”) that
applies to the Participant under the NGSP.



                    (c)     The deemed investments for a RAC Participant’s RAC Subaccount must be the same as the
deemed investments for the RAC Participant’s Company contributions under Section 3.2(b)(1).



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                    (d)     Selections of investments, changes and transfers must be made according to the rules and
procedures of the Administrative Committee.



                              (1)     The Administrative Committee may prescribe rules that may include, among other matters,
limitations on the amounts that may be transferred and procedures for electing transfers.



                              (2)     The Administrative Committee may prescribe valuation rules for purposes of investment
elections and transfers. Such rules may, in the Administrative Committee’s discretion, use
averaging methods to determine values and accrue estimated expenses. The Administrative Committee
may change the methods it uses for valuation from time to time.



                              (3)     The Administrative Committee may prescribe the periods and frequency with which
Participants may change deemed investment elections and make transfers.



                              (4)     The Administrative Committee may change its rules and procedures from time to time and
without prior notice to Participants.



                    (e)     Effective January 13, 2011, Participant investment elections involving a Company stock
investment fund (e.g., transfers into or out of the fund) may be restricted, including in
accordance with Company policies generally applicable to employee transactions in Company stock.



          3.6     Investment Return Not Guaranteed




                    Investment performance under the Plan is not guaranteed at any level. Participants may lose
all or a portion of their contributions due to poor investment performance.



ARTICLE IV




ACCOUNTS



          4.1     Accounts




                    The Administrative Committee shall establish and maintain a recordkeeping Account for each
Participant under the Plan.



          4.2     Valuation of Accounts




                    The valuation of Participants’ recordkeeping Accounts will reflect earnings, losses, expenses
and distributions, and will be made in accordance with the rules and procedures of the
Administrative Committee.



                    (a)     The Administrative Committee may set regular valuation dates and times and also use
special valuation dates and times and procedures from time to time under unusual circumstances and
to protect the financial integrity of the Plan.



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                    (b)     The Administrative Committee may use averaging methods to determine values and accrue
estimated expenses.



                    (c)     The Administrative Committee may change its valuation rules and procedures from time to
time and without prior notice to Participants.



          4.3     Use of a Trust




                    The Company may set up a trust to hold any assets or insurance policies that it may use in
meeting its obligations under the Plan. Any trust set up will be a rabbi trust and any assets
placed in the trust shall continue for all purposes to be part of the general assets of the Company
and shall be available to its general creditors in the event of the Company’s bankruptcy or
insolvency.



ARTICLE V




VESTING AND FORFEITURES



          5.1     In General




                    A Participant’s interest in his or her Account will be nonforfeitable, subject to the
exceptions in Section 5.2.



          5.2     Exceptions




                    The following exceptions apply to the vesting rule:



                    (a)     A RAC Participant shall become vested in his RAC Subaccount upon completing three years of
service. For this purpose, years of service shall be calculated in the same manner as for purposes
of determining vesting in Retirement Account Contributions under the NGSP (including the treatment
of a break in service).



                    (b)     Forfeitures on account of a lost payee. See Section 6.6.



                    (c)     Forfeitures under an escheat law.



                    (d)     Recapture of amounts improperly credited to a Participant’s Account or improperly paid to
or with respect to a Participant.



                    (e)     Expenses charged to a Participant’s Account.



                    (f)     Investment losses.



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ARTICLE VI




DISTRIBUTIONS



          6.1     Distribution Rules for Non-RAC Amounts




                    The rules in this Section 6.1 apply to distribution of a Participant’s Account other than the
RAC Subaccount.



                    Notwithstanding the foregoing, Appendix B governs the distribution of amounts that were earned
and vested (within the meaning of Code section 409A and regulations thereunder) under the Plan
prior to 2005 (and earnings thereon) and are exempt from the requirements of Code section 409A.
Thus, this Section 6.1 does not apply to these pre-2005 deferrals, but does apply to all other
amounts deferred under the Plan.



                    (a)     Separate Distribution Election. A Participant must make a separate distribution
election for each year’s contributions. A Participant generally makes a distribution election at
the same time the Participant makes the deferral election, i.e., during the Open Enrollment Period.



                    (b)     Distribution Upon Separation. A Participant may elect on a deferral form to have
the portion of his Account related to amounts deferred under the deferral form and Company
contributions for the same year (and earnings thereon) distributed in a lump sum or in quarterly or
annual installments over a period of 1 to 15 years. Lump sum payments under the Plan will be made
in the month following the Participant’s Separation from Service. Installment payments shall
commence in the March, June, September or December next following the month of Separation from
Service. If a Participant does not make a distribution election and his Account balance exceeds
$50,000 and the Participant is age 55 or older at the time the Participant Separates from Service,
the Participant will receive quarterly installments over a 10-year period. Otherwise, a
Participant not making an election will receive a lump sum payment. Notwithstanding the foregoing,
if the Participant’s Account balance is $50,000 or less or the Participant is under age 55 at the
time the Participant Separates from Service, the full Account balance shall be distributed in a
lump sum payment in the month following the Participant’s Separation from Service.



                              Notwithstanding the timing rules in the foregoing paragraph, distributions may not be made to
a Key Employee upon a Separation from Service before the date which is six months after the date of
the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key Employee).
Any payments that would otherwise be made during this period of delay shall be accumulated and
paid six months after the date payments would have commenced absent the six month delay.



                    (c)     Changes in Form of Distribution. A Participant may make up to two subsequent
elections to change the form of a distribution for any year’s deferrals and Company contributions.
Such an election, however, shall be effective only if the following conditions are satisfied:



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                              (1) The election may not take effect until at least twelve (12) months after the date on which
the election is made; and



                              (2) The distribution will be made exactly five (5) years from the date the distribution would
have otherwise been made.



          6.2     Distribution Rules for RAC Subaccount




                    The full balance in a RAC Subaccount shall be distributed in a lump sum upon a RAC
Participant’s Separation from Service. Notwithstanding the foregoing, distribution will not be
made to a Key Employee upon a Separation from Service until the date which is six months after the
date of the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key
Employee).



          6.3     Effect of Taxation




                    If Plan benefits are includible in the income of a Participant under Code section 409A prior
to actual receipt of the benefits, the Administrative Committee shall immediately distribute the
benefits found to be so includible to the Participant.



          6.4     Permitted Delays




                    Notwithstanding the foregoing, any payment to a Participant under the Plan shall be delayed
upon the Committee’s reasonable anticipation of one or more of the following events:



                    (a)     The Company’s deduction with respect to such payment would be eliminated by application of
Code section 162(m); or



                    (b)     The making of the payment would violate Federal securities laws or other applicable law;



                    (c)     provided, that any payment delayed pursuant to this Section 6.4 shall be paid in
accordance with Code section 409A.



          6.5     Payments Not Received At Death




                    In the event of the death of a Participant before receiving a payment, payment will be made to
his or her estate if death occurs on or after the date of a check that has been issued by the Plan.
Otherwise, payment of the amount will be made to the Participant’s Beneficiary.



          6.6     Inability to Locate Participant




                    In the event that the Administrative Committee is unable to locate a Participant or
Beneficiary within two years following the required payment date, the amount allocated to the
Participant’s Account shall be forfeited. If, after such forfeiture and prior to termination of the
Plan, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated
without interest or earnings for the forfeiture period.



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          6.7     Committee Rules




                    All distributions are subject to the rules and procedures of the Administrative Committee. The
Administrative Committee may also require the use of particular forms. The Administrative Committee
may change its rules, procedures and forms from time to time and without prior notice to
Participants.



ARTICLE VII




ADMINISTRATION



          7.1     Committees




                    (a)     Effective April 27, 2006, the Administrative Committee shall be comprised of the
individuals (in their corporate capacity) who are members of the Administrative Committee for
Northrop Grumman Deferred Compensation Plan. If no such Administrative Committee exists, the
members of the Administrative Committee for the Plan shall be individuals holding the following
positions within the Company (as such titles may be modified from time to time), or their
successors in office: the Corporate Vice President and Chief Human Resources and Administration
Officer; the Corporate Vice President, Controller and Chief Accounting Officer; the Vice President,
Taxation; the Vice President, Compensation, Benefits and HRIS; and the Corporate Director, Benefits
Administration and Services. A member of the Administrative Committee may resign by delivering a
written notice of resignation to the Corporate Vice President and Chief Human Resources and
Administration Officer.



                    (b)     Prior to April 27, 2006, the Administrative Committee shall be comprised of the
individuals appointed by the Compensation Committee of the Board (the “Compensation Committee”).



                    (c)     An Investment Committee (referred to together with the Administrative Committee as, the
“Committees”), comprised of one or more persons, shall be appointed by and serve at the pleasure of
the Board (or its delegate). The number of members comprising the Investment Committee shall be
determined by the Board, which may from time to time vary the number of members. A member of the
Investment Committee may resign by delivering a written notice of resignation to the Board. The
Board may remove any member by delivering a certified copy of its resolution of removal to such
member. Vacancies in the membership of the Investment Committee shall be filled promptly by the
Board.



          7.2     Committee Action




                    Each Committee shall act at meetings by affirmative vote of a majority of the members of that
Committee. Any determination of action of a Committee 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 of the Committee then in office. A member of a Committee shall
not vote or act upon any matter which relates solely to himself or herself as a Participant. The
Chairman or any other member or members of each Committee



13









 




designated by the Chairman may execute any certificate or other written direction on behalf of
the Committee of which he or she is a member.




                    The Compensation Committee shall appoint a Chairman from among the members of the
Administrative Committee and a Secretary who may or may not be a member of the Administrative
Committee. The Administrative Committee shall conduct its business according to the provisions of
this Article and the rules contained in the current edition of Robert’s Rules of Order or such
other rules of order the Administrative Committee may deem appropriate. The Administrative
Committee shall hold meetings from time to time in any convenient location.



          7.3     Powers and Duties of the Administrative Committee




                    The Administrative Committee shall enforce the Plan in accordance with its terms, shall be
charged with the general administration of the Plan, and shall have all powers necessary to
accomplish its purposes, including, but not by way of limitation, the following:



                    (a)     To construe and interpret the terms and provisions of this Plan and make all factual
determinations;



                    (b)     To compute and certify to the amount and kind of benefits payable to Participants and
their Beneficiaries;



                    (c)     To maintain all records that may be necessary for the administration of the Plan;



                    (d)     To provide for the disclosure of all information and the filing or provision of all
reports and statements to Participants, Beneficiaries or governmental agencies as shall be required
by law;



                    (e)     To make and publish such rules for the regulation of the Plan and procedures for the
administration of the Plan as are not inconsistent with the terms hereof;



                    (f)     To appoint a Plan administrator or any other agent, and to delegate to them such powers
and duties in connection with the administration of the Plan as the Administrative Committee may
from time to time prescribe (including the power to subdelegate);



                    (g)     To exercise powers granted the Administrative Committee under other Sections of the Plan;
and



                    (h)     To take all actions necessary for the administration of the Plan, including determining
whether to hold or discontinue insurance policies purchased in connection with the Plan.



          7.4     Powers and Duties of the Investment Committee




                    The Investment Committee shall have all powers necessary to accomplish its purposes,
including, but not by way of limitation, the following:



14









 





                    (a)     To select types of investment and the actual investments against which earnings and losses
will be measured;



                    (b)     To oversee any rabbi trust; and



                    (c)     To appoint agents, and to delegate to them such powers and duties in connection with its
duties as the Investment Committee may from time to time prescribe (including the power to
subdelegate).



          7.5     Construction and Interpretation




                    The Administrative Committee shall have full discretion to construe and interpret the terms
and provisions of this Plan, to make factual determinations and to remedy possible inconsistencies
and omissions. The Administrative Committee’s interpretations, constructions and remedies shall be
final and binding on all parties, including but not limited to the Affiliated Companies and any
Participant or Beneficiary. The Administrative Committee shall administer such terms and provisions
in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable
to the Plan.



          7.6     Information




                    To enable the Committees to perform their functions, the Affiliated Companies adopting the
Plan shall supply full and timely information to the Committees on all matters relating to the
compensation of all Participants, their death or other events that cause termination of their
participation in this Plan, and such other pertinent facts as the Committees may require.



          7.7     Committee Compensation, Expenses and Indemnity




                    (a)     The members of the Committees shall serve without compensation for their services
hereunder.



                    (b)     The Committees are authorized to employ such accounting, consultants or legal counsel as
they may deem advisable to assist in the performance of their duties hereunder.



                    (c)     To the extent permitted by ERISA and applicable state law, the Company shall indemnify and
hold harmless the Committees and each member thereof, the Board and any delegate of the Committees
who is an employee of the Affiliated Companies against any and all expenses, liabilities and
claims, including legal fees to defend against such liabilities and claims arising out of their
discharge in good faith of responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude such further
indemnities as may be available under insurance purchased by the Company or provided by the Company
under any bylaw, agreement or otherwise, as such indemnities are permitted under ERISA and state
law.



          7.8     Disputes




                    The Company’s standardized “Northrop Grumman Nonqualified Retirement Plans Claims and Appeals
Procedures” shall apply in handling claims and appeals under this Plan.



15









 





ARTICLE VIII




MISCELLANEOUS



          8.1     Unsecured General Creditor




                    Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, claims, or interest in any specific property or assets of the Affiliated
Companies. No assets of the Affiliated Companies shall be held in any way as collateral security
for the fulfilling of the obligations of the Affiliated Companies under this Plan. Any and all of
the Affiliated Companies’ assets shall be, and remain, the general unpledged, unrestricted assets
of the Affiliated Companies. The obligation under the Plan of the Affiliated Companies adopting the
Plan shall be merely that of an unfunded and unsecured promise of those Affiliated Companies to pay
money in the future, and the rights of the Participants and Beneficiaries shall be no greater than
those of unsecured general creditors. It is the intention of the Affiliated Companies that this
Plan be unfunded for purposes of the Code and for purposes of Title I of ERISA.



          8.2     Restriction Against Assignment




                    (a)     The Company shall pay all amounts payable hereunder only to the person or persons
designated by the Plan and not to any other person or corporation. No part of a Participant’s
Accounts shall be liable for the debts, contracts, or engagements of any Participant, his or her
Beneficiary, or successors in interest, nor shall a Participant’s Accounts be subject to execution
by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any
such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or
assign any benefits or payments hereunder in any manner whatsoever. If any Participant, Beneficiary
or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, commute, assign, pledge, encumber or charge any distribution or payment from the Plan,
voluntarily or involuntarily, the Administrative Committee, in its discretion, may cancel such
distribution or payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the Administrative Committee shall direct.



                    (b)     The actions considered exceptions to the vesting rule under Section 5.2 will not be
treated as violations of this Section.



                    (c)     Notwithstanding the foregoing, all or a portion of a Participant’s Account balance 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 Participant;



16









 





                              (3) creates or recognizes the right of a spouse, former spouse, child or other dependent of
the Participant to receive all or a portion of the Participant’s benefits under the Plan; and



                              (4) meets such other requirements established by the 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.



          8.3     Restriction Against Double Payment




                    If a court orders an assignment of benefits despite Section 8.2, the affected Participant’s
benefits will be reduced accordingly. The Administrative Committee may use any reasonable actuarial
assumptions to accomplish the offset under this Section.



          8.4     Withholding




                    There shall be deducted from each payment made under the Plan or any other compensation
payable to the Participant (or Beneficiary) all taxes, which are required to be withheld by the
Affiliated Companies in respect to such payment or this Plan. The Affiliated Companies shall have
the right to reduce any payment (or compensation) by the amount of cash sufficient to provide the
amount of said taxes.



          8.5     Amendment, Modification, Suspension or Termination




                    The Company may, in its sole discretion, terminate, suspend or amend this Plan at any time or
from time to time, in whole or in part for any reason. Notwithstanding the foregoing, no amendment
or termination of the Plan shall reduce the amount of a Participant’s Account balance as of the
date of such amendment or termination. Upon termination of the Plan, distribution of balances in
Accounts shall be made to Participants and Beneficiaries in the manner and at the time described in
Article VI, unless the Company determines in its sole discretion that all such amounts shall be
distributed upon termination in accordance with the requirements under Code section 409A.



                    Notwithstanding the foregoing, no amendment of the Plan shall apply to amounts that were
earned and vested (within the meaning of Code section 409A and regulations thereunder) under the
Plan prior to 2005, 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 amounts that are “grandfathered” and exempt from the requirements of
Code section 409A.



17









 





          8.6     Governing Law




                    To the extent not preempted by ERISA, this Plan shall be construed, governed and administered
in accordance with the laws of Delaware.



          8.7     Receipt and Release




                    Any payment to a payee in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Plan, the Committees and the Affiliated
Companies. The Administrative Committee may require such payee, as a condition precedent to such
payment, to execute a receipt and release to such effect.



          8.8     Payments on Behalf of Persons Under Incapacity




                    In the event that any amount becomes payable under the Plan to a person who, in the sole
judgment of the Administrative Committee, is considered by reason of physical or mental condition
to be unable to give a valid receipt therefore, the Administrative Committee may direct that such
payment be made to any person found by the Committee, in its sole judgment, to have assumed the
care of such person. Any payment made pursuant to such determination shall constitute a full
release and discharge of the Administrative Committee and the Company.



          8.9     Limitation of Rights and Employment Relationship




                    Neither the establishment of the Plan, any trust nor any modification thereof, nor the
creating of any fund or account, nor the payment of any benefits shall be construed as giving to
any Participant, or Beneficiary or other person any legal or equitable right against the Affiliated
Companies or any trustee except as provided in the Plan and any trust agreement; and in no event
shall the terms of employment of any Employee or Participant be modified or in any way be affected
by the provisions of the Plan and any trust agreement.



          8.10    Headings




                    Headings and subheadings in this Plan are inserted for convenience of reference only and are
not to be considered in the construction of the provisions hereof.



          8.11    Liabilities Transferred 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 Plan and the liabilities for
these participants’ benefits under the Plan were transferred to HII. On and after the HII
Distribution Date, the Company and the Plan, 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 Plan.



*   *   *







18









 








                    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 	 



19









 






	 	 	 	 	 



APPENDIX A – 2005 TRANSITION RELIEF




          The following provisions apply only during 2005, pursuant to transition relief granted in IRS
Notice 2005-1:




          A.1     Cash-Out





                    Participants Separating from Service during 2005 for any reason before age 55 will receive an
immediate lump sum distribution of their Account balances. Other Participants Separating from
Service in 2005 will receive payments in accordance with their prior elections.



          A.2     Elections




                    During the Plan’s open enrollment period in June 2005 Participants may fully or partially
cancel 2005 deferral elections and receive in 2005 a refund of amounts previously deferred in 2005.



                    In addition, individuals working in Company facilities impacted by Hurricane Katrina may stop
or reduce 2005 elective contributions to the Plan at any time during 2005. All payments under this
Section A.2 will be made before the end of calendar year 2005.



          A.3     Key Employees




                    Key Employees Separating from Service on or after July 1, 2005, with distributions subject to
Code section 409A and scheduled for payment in 2006 within six months of Separation from Service,
may choose I or II below, subject to III:




	 	I.	 	Delay the distributions described above for six months from the
date of Separation from Service. The delayed payments will be paid as a single
sum with interest at the end of the six month period, with the remaining
payments resuming as scheduled.
	 
	 	II.	 	Accelerate the distributions described above into a payment in
2005 without interest adjustments.
	 
	 	III.	 	Key Employees must elect I or II during 2005.




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APPENDIX
B – DISTRIBUTION RULES FOR PRE-2005 AMOUNTS




                    Distribution of amounts earned and vested (within the meaning of Code section 409A and
regulations thereunder) under the Plan prior to 2005 (and earnings thereon) are exempt from the
requirements of Code section 409A and shall be made in accordance with the Plan terms as in effect
on December 31, 2004 and as summarized in the following provisions.



          B.1     Distribution of Contributions




                    (a)     Distributions Upon Early Termination.



                              (1)     Voluntary Termination. If a Participant voluntarily terminates employment with the
Affiliated Companies before age 55 or Disability, distribution of his or her Account will be made
in a lump sum on the Participant’s Payment Date.



                              (2)     Involuntary Termination. If a Participant involuntarily terminates employment with
the Affiliated Companies before age 55, distribution of his or her Account will generally be made
in quarterly or annual installments over a fixed number of whole years not to exceed 15 years,
commencing on the Participant’s Payment Date, in accordance with the Participant’s original
election on his or her deferral election form. Payment will be made in a lump sum if the
Participant had originally elected a lump sum, if the Account balance is $50,000 or less, or if the
Administrative Committee so specifies.



                    (b)     Distribution After Retirement, Disability or Death. In the case of a Participant
who separates from service with the Affiliated Companies on account of Retirement, Disability or
death and has an Account balance of more than $50,000, the Account shall be paid to the Participant
(and after his or her death to his or her Beneficiary) in substantially equal quarterly
installments over 10 years commencing on the Participant’s Payment Date unless an optional form of
benefit has been specified pursuant to Section B.1(b)(1).



                              (1)     An optional form of benefit may be elected by the Participant, on the form provided by
Administrative Committee, during his or her initial election period from among those listed below:




          (i)     A lump sum distribution on the Participant’s Payment Date.




          (ii)     Quarterly installments over a period of at least 1 and no more
than 15 years beginning on the Participant’s Payment Date.




          (iii)     Annual installments over a period of at least 2 and no more than
15 years beginning on the Participant’s Payment Date.



                              (2)     A Participant from time to time may modify the form of benefit that he or she has
previously elected. Upon his or her separation from service, the most recently elected form of
distribution submitted at least 12 months prior to separation will govern. If no such election
exists, distributions will be paid under the 10-year installment method.



B1









 





                              (3)     In the case of a Participant who terminates employment with the Affiliated Companies on
account of Retirement, Disability or death with an Account balance of $50,000 or less, the Account
shall be paid to the Participant in a lump sum distribution on the Participant’s Payment Date.



                              (4)     In general, upon the Participant’s death, payment of any remaining Account balance will be
made to the Beneficiary in a lump sum on the Payment Date. But the Beneficiary will receive any
remaining installments (starting on the Payment Date) if the Participant was receiving
installments, or if the Participant died on or after age 55 with an Account balance over $50,000
and with an effective installment payout election in place. In such cases, the Beneficiary may
still elect a lump sum payment of the remaining Account balance, but only with the Administrative
Committee’s consent.



                              (5)     In the event that this Plan is terminated, the amounts allocated to a Participant’s
Account shall be distributed to the Participant or, in the event of his or her death, to his or her
Beneficiary in a lump sum.



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APPENDIX
C – MERGED PLANS




          C.1     Plan Mergers




                    (a) Merged Plans. As of their respective effective dates, the plans listed in (c)(the
“Merged Plans”) are merged into this Plan. All amounts from those plans that were merged into this
Plan are held in their corresponding Accounts.



                    (b) Accounts. Effective as of the dates below, Accounts are established for
individuals who, before the merger, had account balances under the merged plans. These individuals
will not accrue benefits under this Plan unless they become Participants by virtue of being hired
into a covered position with an Affiliated Company, but they will be considered Participants for
purposes of the merged accounts. The balance credited to the Participant’s merged plan account
will, effective as of the date provided in the table below, be invested in accordance with the
terms of this Plan. Except as provided in section C.2 below, amounts merged into this Plan from the
merged plans are governed by the terms of this Plan.



                    (c) Table.




	 	 	 	 	 
	 	 	Merger Effective	 	Merged Account
	Name of Merged Plans	 	Dates	 	Names
	 
	Northrop Grumman Benefits 

Equalization Plan

	 	December 10, 2004
	 	NG BEP Account
	Northrop Grumman Space &
Mission Systems Corp.
Deferred Compensation Plan

	 	December 10, 2004
	 	S & MS Deferred

Compensation

Account
	BDM International, Inc. 1997
Executive Deferred
Compensation Plan (“BDM
Plan”)

	 	April 29, 2005
	 	BDM Account






          C.2     Merged Plans — General Rule




                    (a)     NG BEP Account and S & MS Deferred Compensation Account. Distributions from
Participants’ NG BEP and S & MS Deferred Compensation Accounts are made under the provisions of
Appendix B, except as provided in this Section.



                              (1)     Amounts in the Participant’s NG BEP Account and the S & MS Deferred Compensation Account
shall be paid out in accordance with elections made under the Merged Plans.



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                              (2)     The Participant’s “Payment Date” for amounts in the NG BEP Account and the S & MS Deferred
Compensation Account shall be deemed to be the end of January following the Participant’s
termination of employment.



                              (3)     The reference to $50,000 in the provisions of Appendix B shall be deemed to be $5,000 with
respect to amounts in the NG BEP Account and the S & MS Deferred Compensation Account.



                              (4)     The Administrative Committee shall assume the rights and responsibilities of the
Directors/Committee with respect to determining whether a Participant’s NG BEP Account may be paid
out in a form other than the automatic form of payment.



                              (5)     The Administrative Committee shall assume the rights and responsibilities of the Committee
or Special Committee with respect to determining whether a Participant’s S & MS Deferred
Compensation Account may be paid out in a form other than the automatic form of payment.



                              (6)     For purposes of determining the time of payment of a Participant’s NG BEP Account, a
Participant’s employment will not be deemed to have terminated following the Participant’s layoff
until the earlier of the end of the twelve-month period following layoff (without a return to
employment with the Affiliated Companies) or the date on which the Participant retires under any
pension plan maintained by the Affiliated Companies.



                              (7)     A Participant’s S & MS Deferred Compensation Account shall be paid to the Participant no
later than the January 5 next preceding the Participant’s 80th birthday.



                              (8)     In no event will payments of amounts in the Participant’s NG BEP Account and the S & MS
Deferred Compensation Account be accelerated or deferred beyond the payment schedule provided under
the Merged Plans. However, any election to change the time or form of payment for such an amount
may be made based on the terms of the relevant Merged Plan as in effect on October 3, 2004.



                    (b)     BDM Account. Distributions of a Participant’s vested BDM Account balance shall be
made in accordance with this Section C.2(b), and Article VI shall not apply to such distributions.
A Participant shall be vested in his BDM Account balance in accordance with the vesting provisions
of the BDM Plan.



                              (1)     Timing of Payment: A Participant’s vested BDM Account balance shall be distributed
in accordance with elections made under the BDM Plan. For those Participants who have not commenced
distributions as of April 29, 2005, payments from the BDM Account will commence at the time
designated on his or her BDM enrollment and election form, unless extended prior to such date.
However, if such a Participant did not elect a fixed date (or elect the earlier of a fixed date or
termination of employment), his or her vested BDM Account balance will be paid as soon as
administratively practicable following termination of employment in the form designated under
Section C.2(b)(2) below.



                              (2)     Form of Payment: A Participant’s vested BDM Account balance shall be paid in cash.
The vested BDM Account balance will be paid in (i) a lump sum, (ii) five



C2









 




(5) or ten (10) substantially equal annual installments (adjusted for gains and losses), or
(iii) a combination thereof, as selected by the Participant (or Beneficiary) prior to the date on
which amounts are first payable to the Participant (or Beneficiary) under Section C.2(b)(1) above.
If the Participant fails to designate properly the manner of payment, such payment will be made in
a lump sum.




                              (3)     Death Benefits: If a Participant dies before commencement of payment of his BDM
Account balance, the entire Account balance will be paid at the times provided in Section C.2(b)(2)
above to his or her Beneficiary. If a Participant dies after commencement but before he or she has
received all payments from his vested BDM Account balance, the remaining installments shall be paid
annually to the Beneficiary. For purposes of this Section C.2(b), a Participant’s Beneficiary,
unless subsequently changed, will be the designated beneficiary(ies) under the BDM Plan or if none,
the Participant’s spouse, if then living, but otherwise the Participant’s then living descendants,
if any, per stirpes, but, if none, the Participant’s estate.



                              (4)     Lost Participant: In the event that the Administrative Committee is unable to
locate a Participant or Beneficiary within three years following the payment date under Section
C.2(b)(1) above, the amount allocated to the Participant’s BDM Account shall be forfeited. If,
after such forfeiture and prior to termination of the Plan, the Participant or Beneficiary later
claims such benefit, such benefit shall be reinstated without interest or earnings for the
forfeiture period. In lieu of such a forfeiture, the Administrative Committee has the discretion to
direct distribution of the vested BDM Account balance to any one or more or all of the
Participant’s next of kin, and in the proportions as the Administrative Committee determines.



                              (5)     Committee Rules: All distributions are subject to the rules and procedures of the
Administrative Committee. The Administrative Committee may also require the use of particular
forms. The Administrative Committee may change its rules, procedures and forms from time to time
and without prior notice to Participants.



                              (6)     Payment Schedule: In no event will payments of amounts in the Participant’s BDM
Account be accelerated or deferred beyond the payment schedule provided under the BDM Plan.



                              (7)     Application to Trustee: BDM International, Inc. set aside amounts in a grantor
trust to assist it in meeting its obligations under the BDM Plan. Notwithstanding Section C.2(b)(5)
above and the claims procedures provided in Section 7.8, a Participant may make application for
payment of benefits under this Section C.2(b) directly to the trustee of such trust.




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