exv10w3







Exhibit 10.3




Amendment To




Letter Agreement




     WHEREAS, Northrop Grumman Corporation (the “Company”) entered into a letter agreement with
James F. Palmer regarding certain terms of his employment with the Company dated February 1, 2007
(the “Agreement”);



     WHEREAS, the parties desire to amend the Agreement to address the impact of section 409A of
the Internal Revenue Code (“Code”);



     NOW, THEREFORE, effective January 1, 2008, the parties hereby agree as follows:




	1.	 	Section 5 is amended by adding the following sentence to the end of the section:
	 
	 	 	Notwithstanding the foregoing, the provision of these benefits will be in accordance
with the terms of the Northrop Grumman Corporation Supplemental Retirement
Replacement Plan, as amended effective January 1, 2008.
	 
	2.	 	Section 9 is amended by adding the following sentence to the end of the section:
	 
	 	 	Benefits provided under this Section shall be administered consistent with the following
requirements as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv): (1) your eligibility for
benefits in one year will not affect your eligibility for benefits in any other year; (2)
any reimbursement of eligible expenses will be made on or before the last day of the year
following the year in which the expense was incurred; and (3) your right to benefits is not
subject to liquidation or exchange for another benefit.
	 
	3.	 	Section 10 is amended by adding the following sentence to the end of the section:
	 
	 	 	Any benefits you become entitled to under this Section will be paid in accordance
with terms of the VP Severance Plan.






	4.	 	Section 11 is amended:






	 	(a)	 	by adding the following sentence to the end of the section: All
benefits provided under this Section will be paid to you by March 15, 2008.
	 
	 	(b)	 	by reaffirming and restating Section 11 respecting reasonable professional fees
incurred in connection with this Amendment and related plans and agreements, which
benefits shall not exceed $10,000 and shall be provided not later than March 15, 2009.





 









 











	5.	 	Section 13 is amended in its entirety to read as follows:
	 
	 	 	Signing Bonus
	 
	 	 	Effective with your Date of Hire, the Company agreed to provide you with a cash
signing bonus in the total amount of $700,000, to be paid in three equal
installments. The first installment was paid prior to the effective date hereof;
the second installment is payable on the first anniversary of your Date of Hire; and
the third installment on the second anniversary of your Date of Hire. Except as
provided for in the next sentence, your entitlement to each installment of the
signing bonus is contingent on your continued employment with the Company through
the installment payment date. However, in the event of your death, your Disability
or Qualifying Termination (as these two terms are defined in the VP Severance Plan)
prior to payment of the full signing bonus, the remaining installments will be paid
in cash to you in a single lump sum within 30 days following such separation from
service (within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treasury
Regulation 1.409A-1(h)); provided, if you are a “Key Employee” as defined in the
Northrop Grumman Corporation Supplemental Retirement Replacement Plan on the date of
your separation from service, the lump sum payment shall be made the first day of
the seventh month following your separation from service (or, if earlier, the first
day of the month after your death after such separation from service).
	 
	6.	 	Section 14 is amended by adding the following sentence to the end of the section:
	 
	 	 	Notwithstanding the foregoing, the provision of these benefits will be in accordance
with the terms of the Northrop Grumman Corporation Supplemental Retirement
Replacement Plan, as amended effective January 1, 2008.





          IN WITNESS WHEREOF, the parties have caused these presents to be duly executed as of the dates
indicated below.




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	JAMES F. PALMER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:
	 	December 17, 2008	 	 	 	/s/ James F. Palmer	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	NORTHROP GRUMMAN CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	December 17, 2008	 	 	 	By:	 	/s/ Ian V. Ziskin	 	 
	 

	 	 

	 	 	 	 	 	 

Ian V. Ziskin
	 	 
	 

	 	 	 	 	 	 	 	Corporate Vice President, Chief Human
Resources and Administrative Officer	 	 






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