Document:

Long-Term Incentive Stock Plan

 EXHIBIT 10(d)(vii) 
  
 NORTHROP GRUMMAN CORPORATION 
 TERMS AND CONDITIONS APPLICABLE TO 
 2006 RESTRICTED PERFORMANCE STOCK RIGHTS 
 GRANTED UNDER THE 2001 LONG-TERM INCENTIVE STOCK PLAN 
  
 These Terms and Conditions (“Terms”) apply to certain “Restricted Performance Stock Rights” (“RPSRs”) granted by Northrop
Grumman Corporation (the “Company”) in 2006. If you were granted an RPSR award by the Company in 2006, the date of grant of your RPSR award and the target number of RPSRs applicable to your award are set forth in the letter from the
Company announcing your RPSR award grant (your “Grant Letter”) and are also reflected in the electronic stock plan award recordkeeping system (“Stock Plan System”) maintained by the Company or its designee. These Terms apply only
with respect to your 2006 RPSR award. If you were granted an RPSR award, you are referred to as the “Grantee” with respect to your award. Capitalized terms are generally defined in Section 9 below if not otherwise defined herein.

  
 Each RPSR represents a right to receive one share of the
Company’s Common Stock, or cash of equivalent value as provided herein, subject to vesting as provided herein. The performance period applicable to your award is January 1, 2006 to December 31, 2008 (the “Performance
Period”). The target number of RPSRs subject to your award are subject to adjustment as provided herein. The RPSR award is subject to all of the terms and conditions set forth in these Terms, and is further subject to all of the terms and
conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Committee, as such rules are in effect from time to time. 
  
 1. Vesting; Payment of RPSRs. 
  
 The RPSRs are subject to the vesting and payment provisions established (or to be established, as the case may be) by the Committee with respect to the
Performance Period. RPSRs that vest based on such provisions and any related Dividend Equivalents (as defined below) will be paid as provided below. No fractional shares will be issued. 
  
 1.1 Performance-Based Vesting of RPSRs. At the conclusion of the Performance Period, the
Committee shall determine whether and the extent to which the applicable performance criteria have been achieved for purposes of determining earnouts and RPSR payments. Based on its determination, the Committee shall determine the percentage of
target RPSRs subject to the award (if any) that have vested for the Performance Period in accordance with the earnout schedule established (or to be established, as the case may be) by the Committee with respect to the Performance Period (the
“Earnout Percentage”). Except as provided in Section 1.2 below, any RPSRs subject to the award that are not vested as of the conclusion of the Performance Period after giving effect to the Committee’s determinations under this
Section 1.1 shall terminate and become null and void immediately following such determinations. 
  
 1.2 Minimum Vesting. The Earnout Percentage determined under Section 1.1 shall not be less than thirty (30) percent;
provided, however, that such minimum Earnout Percentage shall not apply if, as of the December 31 immediately preceding the start of the Performance Period, the Grantee is either the Chief Executive Officer of the Company, is otherwise a
“Covered Employee” (as defined for purposes of Section 162(m) of the Code) of the Company, or is one of the next three highest compensated employees (as determined by proxy convention) with respect to the Company. 
  
 1.3 Payment of RPSRs. The number of RPSRs payable at the
conclusion of the Performance Period (“Earned RPSRs”) shall be determined by multiplying the Earnout Percentage by the target number of RPSRs subject to the award. The Earned RPSRs may be paid out in either an equivalent number of shares
of Common Stock, or, in the discretion of the Committee, in cash or in a combination of shares of Common Stock and cash. In the event of a cash payment, the amount of the payment for each Earned RPSR to be paid in cash will equal the Fair Market
Value of a share of Common Stock as of the date the Committee determines the extent to which the applicable RPSR performance criteria have been achieved. RPSRs will be paid by the March 15 immediately following the end of the Performance
Period. 
  
 1.4 Dividend Equivalents. At the
conclusion of the Performance Period, the Grantee shall be entitled to payment for Dividend Equivalents (if any) with respect to the Earned RPSRs (if any). For purposes of these Terms, “Dividend Equivalents” means the aggregate amount of
dividends paid by the Company on a number of shares of Common Stock equivalent to the number of Earned RPSRs during the period from the beginning of the Performance Period until the date the Earned RPSRs are paid (without interest or other
adjustments to reflect the time value of money, but subject to adjustment pursuant to Section 5.1). For these purposes, any Earned RPSRs in excess of the target number of RPSRs subject to the award shall be considered to have been granted at
the beginning of the Performance Period. 
  

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 1.5 Payment of Dividend Equivalents. Dividend Equivalents (if any) will be paid at
the same time as the Earned RPSRs to which they relate are paid. Dividend Equivalents will be paid in cash or, in the discretion of the Committee, distributed in shares of Company Common Stock or a combination of cash and shares. If distributed in
shares, the number of shares to be issued will be determined by (a) determining the aggregate cash amount of the Dividend Equivalents payable, and (b) dividing such amount by the average closing price of a share of Common Stock on the
composite tape of the New York Stock Exchange for trading days during the last month of the Performance Period. Fractional shares will not be paid. 
  
 2. Early Termination of Award; Termination of Employment. 
  

2.1 General. The RPSRs and related Dividend Equivalents subject to the award shall terminate and become null and void prior
to the conclusion of the Performance Period if and when (a) the award terminates in connection with a Change in Control pursuant to Section 5 below, or (b) except as provided below in this Section 2 and in Section 5, the
Grantee ceases for any reason to be an employee of the Company or one of its subsidiaries. 
  
 2.2 Termination of Employment Due to Retirement, Death or Disability. The number of RPSRs (and related Dividend Equivalents) subject to the award shall vest on a prorated basis as provided herein
if the Grantee’s employment by the Company and its subsidiaries terminates due to the Grantee’s Retirement, death, or Disability and, in each case, only if the Grantee has completed at least six (6) consecutive calendar months
of employment with the Company or a subsidiary during the three-year Performance Period. Such prorating of RPSRs (and related Dividend Equivalents) shall be based on the number of full months the Grantee was actually employed by the Company or one
of its subsidiaries out of the thirty-six month Performance Period. Partial months of employment during the Performance Period, even if substantial, shall not be counted for purposes of prorated vesting. Any RPSRs (and related Dividend Equivalents)
subject to the award that do not vest in accordance with this Section 2.2 upon a termination of the Grantee’s employment due to Retirement, death or Disability shall terminate immediately upon such termination of employment. 
  
 Death or Disability. In the case of death or Disability (a) the
Performance Period used to calculate the Grantee’s Earned RPSRs will be deemed to have ended as of the most recent date that performance has been measured by the Company with respect to the RPSRs (but in no event shall such date be more than
one year before the Grantee’s termination of employment), (b) the Earnout Percentage of the Grantee’s RPSRs will be determined based on actual performance for that short Performance Period, and (c) payment of Earned RPSRs (and
Dividend Equivalents thereon) will normally be made by the end of the third month following the month of the Grantee’s death or Disability, but in no event later than March 15 following the year in which such termination occurs. The
Earnout Percentage shall be determined after giving effect to Section 1.2, if applicable. 
  
 Retirement in General. Subject to the following paragraph, in the case of Retirement, the number of Earned RPSRs subject to prorating shall be calculated based on the entire Performance Period in accordance
with Section 1 above as if the Grantee had not terminated employment. 
  
 Retirement With Certificate of Divestiture. In the case of Retirement where the Grantee accepts a position in the federal government and a certificate of divestiture (as defined under Code section 1043(b)(2))
is issued which applies to the award (a) the Performance Period used to calculate the Grantee’s Earned RPSRs will be deemed to have ended as of the most recent date that performance has been measured by the Company with respect to the
RPSRs prior to the Grantee’s Retirement (but in no event shall such date be more than one year before the Grantee’s Retirement), (b) the Earnout Percentage of the Grantee’s RPSRs will be determined based on actual performance for
that short Performance Period, and (c) notwithstanding section 2.9, payment of Earned RPSRs (and Dividend Equivalents thereon) will be made as soon as practicable after such Retirement occurs. The Earnout Percentage shall be determined after
giving effect to Section 1.2, if applicable. 
  
 2.3
Other Terminations of Employment. Subject to Section 5.2, all RPSRs subject to the award and related Dividend Equivalents terminate immediately upon a termination of the Grantee’s employment: (a) for any
reason other than due to the Grantee’s Retirement, death or Disability; or (b) for Retirement, death or Disability, if the six-month employment requirement under Section 2.2 above is not satisfied. 
  
 2.4 Leave of Absence. Unless the Committee otherwise
provides (at the time of the leave or otherwise), if the Grantee is granted a leave of absence by the Company, the Grantee (a) shall not be deemed to have incurred a termination of employment at the time such leave commences for purposes of the
award, and (b) shall be deemed to be employed by the Company for the duration of such approved leave of absence for purposes of the award. A termination of employment shall be deemed to have occurred if the Grantee does not timely 

  

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return to active employment upon the expiration of such approved leave or if the Grantee commences a leave that is not approved by the Company. 

 
 2.5 Salary Continuation. Subject to Section 2.4
above, the term “employment” as used herein means active employment by the Company and salary continuation without active employment (other than a leave of absence approved by the Company that is covered by Section 2.4) will not, in
and of itself, constitute “employment” for purposes hereof (in the case of salary continuation without active employment, the Grantee’s cessation of active employee status shall, subject to Section 2.4, be deemed to be a
termination of “employment” for purposes hereof). Furthermore, salary continuation will not, in and of itself, constitute a leave of absence approved by the Company for purposes of the award. 
  
 2.6 Sale or Spinoff of Subsidiary or Business Unit. For
purposes of the RPSRs (and related Dividend Equivalents) subject to the award, a termination of employment of the Grantee shall be deemed to have occurred if the Grantee is employed by a subsidiary or business unit and that subsidiary or business
unit is sold, spun off, or otherwise divested and the Grantee does not Retire upon or immediately before such event and the Grantee does not otherwise continue to be employed by the Company or one of its subsidiaries after such event. 
  
 2.7 Continuance of Employment Required. Except as
expressly provided in Sections 2.2 and 2.4 above and in Section 5 below, the vesting of the RPSRs and related Dividend Equivalents subject to the award requires continued employment through the last day of the Performance Period as a condition
of the payment of such RPSRs and Dividend Equivalents. Employment for only a portion of the Performance Period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment. Nothing contained in these Terms, the Grant Letter, the Stock Plan System, or the Plan constitutes an employment commitment by the Company or any subsidiary, affects the Grantee’s status
(if the Grantee is otherwise an at-will employee) as an employee at will who is subject to termination without cause, confers upon the Grantee any right to continue in the employ of the Company or any subsidiary, or interferes in any way with the
right of the Company or of any subsidiary to terminate such employment at any time. 
  
 2.8 Death. In the event of the Grantee’s death subsequent to the vesting of RPSRs but prior to the delivery of shares or other payment with respect to such RPSRs and related Dividend
Equivalents, the Grantee’s Successor shall be entitled to any payments to which the Grantee would have been entitled under this Agreement with respect to such RPSRs. 
  
 2.9 Effect of Code Section 409A. The following rules shall apply to all RPSRs under an award that
is (i) subject to the minimum thirty (30) percent Earnout Percentage under Section 1.2, and (ii) issued to a Grantee who is eligible for Retirement at the beginning of the Performance Period or who could become eligible for
Retirement during the Performance Period by continuing in service: 
  

	 	(a)	Once vested, RPSRs and related Dividend Equivalents shall be paid 75 days after the earliest of (1) the end of the Performance Period, (2) the Grantee’s
“separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i), (3) the Grantee’s death, or (4) a change in control of the Company within the meaning of Code Section 409A(a)(2)(A)(v)
that causes awards to vest under Section 5.3. 

  

	 	(b)	Notwithstanding the foregoing, if an RPSR and related Dividend Equivalents are to be paid upon a Grantee’s separation from service under subsection (a)(2) above, and the
Grantee is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), payment shall be made as soon as practical after the date that is six months after the Grantee’s separation from service.

  
 3. Non-Transferability and Other Restrictions.

  
 The award, as well as the RPSRs and Dividend Equivalents
subject to the award, are non-transferable and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. The foregoing transfer restrictions shall not apply to transfers to the
Company. Notwithstanding the foregoing, the Company may honor any transfer required pursuant to the terms of a court order in a divorce or similar domestic relations matter to the extent that such transfer does not adversely affect the
Company’s ability to register the offer and sale of the underlying shares on a Form S-8 Registration Statement and such transfer is otherwise in compliance with all applicable legal, regulatory and listing requirements. 
  
 4. Compliance with Laws; No Stockholder Rights Prior to Issuance. 

 
 The Company’s obligation to make any payments or issue any shares
with respect to the award is subject to full compliance with all then applicable requirements of law, the Securities and Exchange Commission, the Commissioner of Corporations of the State of California, or other regulatory agencies having
jurisdiction over the 

  

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Company and its shares, and of any exchange upon which stock of the Company may be listed. The Grantee shall not have the rights and privileges of a
stockholder, including without limitation the right to vote or receive dividends, with respect to any shares which may be issued in respect of the RPSRs and/or Dividend Equivalents until the date appearing on the certificate(s) for such shares (or,
in the case of shares entered in book entry form, the date that the shares are actually recorded in such form for the benefit of the Grantee), if such shares become deliverable. 
  
 5. Adjustments; Change in Control. 
  
 5.1 Adjustments. The RPSRs, Dividend Equivalents, related performance criteria, and the shares subject
to the award are subject to adjustment upon the occurrence of events such as stock splits, stock dividends and other changes in capitalization in accordance with Section 6(a) of the Plan. In the event of any adjustment, the Company will give
the Grantee written notice thereof which will set forth the nature of the adjustment. 
  
 5.2 Possible Acceleration on Change in Control. Notwithstanding the provisions of Section 2 hereof, and further subject to the Company’s ability to terminate the award as provided in
Section 5.3 below, the Grantee shall be entitled to proportionate vesting of the award as provided below if the Grantee is not otherwise entitled to a pro-rata payment pursuant to Section 2 and in the event of the Grantee’s
termination of employment in the following circumstances: 
  

	 	(a)	if the Grantee is covered by a Change in Control Severance Arrangement at the time of the termination, and the termination of employment constitutes a “Qualifying
Termination” (as such term, or any similar successor term, is defined in such Change in Control Severance Arrangement) that triggers the Grantee’s right to severance benefits under such Change in Control Severance Arrangement.

  

	 	(b)	if the Grantee is not covered by a Change in Control Severance Arrangement at the time of the termination, the termination occurs either within the Protected Period corresponding to
a Change in Control of the Company or within twenty-four (24) calendar months following the date of a Change in Control of the Company, and the Grantee’s employment by the Company and its subsidiaries is involuntarily terminated by the
Company and its subsidiaries for reasons other than Cause or by the Grantee for Good Reason. 

  
 Notwithstanding anything else contained herein to the contrary, the termination of the Grantee’s employment (or other events giving rise to Good
Reason) shall not entitle the Grantee to any accelerated vesting pursuant to clause (b) above if there is objective evidence that, as of the commencement of the Protected Period, the Grantee had specifically been identified by the Company as an
employee whose employment would be terminated as part of a corporate restructuring or downsizing program that commenced prior to the Protected Period and such termination of employment was expected at that time to occur within six (6) months.
The applicable Change in Control Severance Arrangement shall govern the matters addressed in this paragraph as to clause (a) above. 
  
 In the event the Grantee is entitled to a prorated payment in accordance with the foregoing provisions of this Section 5.2, then the Grantee will be
eligible for a prorated portion of the RPSRs (and related Dividend Equivalents) determined in accordance with the following formula: (a) the Earnout Percentage determined in accordance with Section 1 but calculated based on performance for
the portion of the three-year Performance Period ending on the last day of the month coinciding with or immediately preceding the date of the termination of the Grantee’s employment, multiplied by (b) the target number of RPSRs subject to
the award, multiplied by (c) a fraction the numerator of which is the total number of full months that the Grantee was an employee of the Company or a subsidiary on and after the beginning of the Performance Period and through the date of the
termination of the Grantee’s employment (but not in excess of 36 months) and the denominator of which is 36. Accumulated Dividend Equivalents through the date of the termination shall be paid to the Grantee with respect to the Grantee’s
RPSRs which are paid. Payment will be made no later than 60 days after the later of the Change in Control of the Company or the termination of the Grantee’s employment. 
  
 5.3 Automatic Acceleration; Early Termination. If the Company undergoes a Change in Control triggered by
clause (iii) or (iv) of the definition thereof and the Company is not the surviving entity and the successor to the Company (if any) (or a Parent thereof) does not agree in writing prior to the occurrence of the Change in Control to
continue and assume the award following the Change in Control, or if for any other reason the award would not continue after the Change in Control, then upon the Change in Control the Grantee shall be entitled to a prorated payment of the RPSRs as
provided below and the award shall terminate. Unless the Committee expressly provides otherwise in the circumstances, no acceleration of vesting of the award shall occur pursuant to this Section 5.3 in connection with a Change in Control if
either (a) the Company is the surviving entity, or (b) the successor to the Company (if any) (or a Parent thereof) agrees in writing prior to the Change in Control to assume the award. The Committee may make adjustments pursuant to
Section 6(a) of the Plan and/or deem an acceleration of vesting of the award pursuant to 

  

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this Section 5.3 to occur sufficiently prior to an event if necessary or deemed appropriate to permit the Grantee to realize the benefits intended to be
conveyed with respect to the shares underlying the award; provided, however, that, the Committee may reinstate the original terms of the award if the related event does not actually occur. 
  
 In the event the Grantee is entitled to a prorated payment in accordance with
the foregoing provisions of this Section 5.3, then the Grantee will, be eligible for a prorated portion of the RPSRs (and related Dividend Equivalents) determined in accordance with the following formula: (a) the Earnout Percentage
determined in accordance with Section 1 but calculated based on performance for the portion of the three-year Performance Period ending on the date of the Change in Control of the Company, multiplied by (b) the target number of RPSRs
subject to the award, multiplied by (c) a fraction the numerator of which is the total number of full months that the Grantee was an employee of the Company or a subsidiary on and after the beginning of the Performance Period and before the
occurrence of the Change in Control (but not in excess of 36 months) and the denominator of which is 36. Accumulated Dividend Equivalents through the date of the Change in Control shall be paid to the Grantee with respect to the Grantee’s RPSRs
which are paid. Payment will be made no later than 60 days after the Change in Control. 
  
 6. Tax Matters. 
  
 6.1 Tax
Withholding. The Company or the subsidiary which employs the Grantee shall be entitled to require, as a condition of making any payments or issuing any shares upon vesting of the RPSRs or related Dividend Equivalents, that the
Grantee or other person entitled to such shares or other payment pay any sums required to be withheld by federal, state, local or other applicable tax law with respect to such vesting or payment. Alternatively, the Company or such subsidiary, in its
discretion, may make such provisions for the withholding of taxes as it deems appropriate (including, without limitation, withholding the taxes due from compensation otherwise payable to the Grantee or reducing the number of shares otherwise
deliverable with respect to the award (valued at their then Fair Market Value) by the amount necessary to satisfy such withholding obligations). 
  
 6.2 Transfer Taxes. The Company will pay all federal and state transfer taxes, if any, and other fees and expenses in connection with
the issuance of shares in connection with the vesting of the RPSRs or related Dividend Equivalents. 
  
 6.3 Compliance with Code Section 409A. To the extent an RPSR award is subject to Code Section 409A, the Committee shall
administer and construe the award in a manner designed to avoid adverse tax consequences under Section 409A. 
  
 6.4 Unfunded Arrangement. The right of the Grantee to receive payment under the award shall be an unsecured contractual claim against
the Company. As such, neither the Grantee nor any Successor shall have any rights in or against any specific assets of the Company based on the award. Awards shall at all times be considered entirely unfunded for tax purposes. 
  
 7. Committee Authority. 
  
 The Committee has the discretionary authority to determine any questions as
to the date when the Grantee’s employment terminated and the cause of such termination and to interpret any provision of these Terms, the Grant Letter, the Stock Plan System, the Plan, and any other applicable rules. Any action taken by, or
inaction of, the Committee relating to or pursuant to these Terms, the Grant Letter, the Stock Plan System, the Plan, or any other applicable rules shall be within the absolute discretion of the Committee and shall be conclusive and binding on all
persons. 
  
 8. Plan; Amendment. 
  
 The RPSRs and Dividend Equivalents subject to the award are governed by, and
the Grantee’s rights are subject to, all of the terms and conditions of the Plan and any other rules adopted by the Committee, as the foregoing may be amended from time to time. The Grantee shall have no rights with respect to any amendment of
these Terms or the Plan unless such amendment is in writing and signed by a duly authorized officer of the Company. In the event of a conflict between the provisions of the Grant Letter and/or the Stock Plan System and the provisions of these Terms
and/or the Plan, the provisions of these Terms and/or the Plan, as applicable, shall control. 
  
 9. Definitions. 
  
 Whenever used in these Terms, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized: 
  
 “Board” means the Board of Directors of the Company. 
  
 “Cause” means the occurrence of either or both of the
following: 
  

	 	(i)	The Grantee’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony (other than traffic related offenses or as a result of
vicarious liability); or 

  

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	 	(ii)	The willful engaging by the Grantee in misconduct that is significantly injurious to the Company. However, no act, or failure to act, on the Grantee’s part shall be considered
“willful” unless done, or omitted to be done, by the Grantee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. 

  
 “Change in Control” is used as defined in the Plan.

  
 “Change in Control Severance Arrangement”
means a “Special Agreement” entered into by and between the Grantee and the Company that provides severance protections in the event of certain changes in control of the Company or the Company’s Change-in-Control Severance Plan, as
each may be in effect from time to time, or any similar successor agreement or plan that provides severance protections in the event of a change in control of the Company. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
  
 “Committee” means the Company’s Compensation and
Management Development Committee or any successor committee appointed by the Board to administer the Plan. 
  
 “Common Stock” means the Company’s common stock. 
  
 “Disability” means disabled pursuant to the provisions of the Company’s (or one of its
subsidiary’s) Long Term Disability Plan applicable to the Grantee; or, if the Grantee is not covered by such a Long Term Disability Plan, the incapacity of the Grantee, due to injury, illness, disease, or bodily or mental infirmity, to engage
in the performance of substantially all of the usual duties of employment with the Company or the subsidiary which employs the Grantee, such disability to be determined by the Committee upon receipt and in reliance on competent medical advice from
one or more individuals, selected by the Committee, who are qualified to give such professional medical advice. 
  
 “Fair Market Value” is used as defined in the Plan; provided, however, the Committee in determining such Fair Market Value for purposes
of the award may utilize such other exchange, market, or listing as it deems appropriate. 
  
 “Good Reason” means, without the Grantee’s express written consent, the occurrence of any one or more of the following: 
  

	 	(i)	A material and substantial reduction in the nature or status of the Grantee’s authorities or responsibilities (when such authorities and/or responsibilities are viewed in the
aggregate) from their level in effect on the day immediately prior to the start of the Protected Period, other than (A) an inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Grantee, and/or
(B) changes in the nature or status of the Grantee’s authorities or responsibilities that, in the aggregate, would generally be viewed by a nationally-recognized executive placement firm as resulting in the Grantee having not materially
and substantially fewer authorities and responsibilities (taking into consideration the Company’s industry) when compared to the authorities and responsibilities applicable to the position held by the Grantee immediately prior to the start of
the Protected Period. The Company may retain a nationally-recognized executive placement firm for purposes of making the determination required by the preceding sentence and the written opinion of the firm thus selected shall be conclusive as to
this issue. 

  
 In addition, if the Grantee is a
vice president, the Grantee’s loss of vice-president status will constitute “Good Reason”; provided that the loss of the title of “vice president” will not, in and of itself, constitute Good Reason if the Grantee’s lack
of a vice president title is generally consistent with the manner in which the title of vice president is used within the Grantee’s business unit or if the loss of the title is the result of a promotion to a higher level office. For the
purposes of the preceding sentence, the Grantee’s lack of a vice-president title will only be considered generally consistent with the manner in which such title is used if most persons in the business unit with authorities, duties, and
responsibilities comparable to those of the Grantee immediately prior to the commencement of the Protected Period do not have the title of vice-president. 
  

	 	(ii)	A reduction by the Company in the Grantee’s annualized rate of base salary as in effect on the first to occur of the start of the Performance Period or the start of the
Protected Period, or as the same shall be increased from time to time. 

  

	 	(iii)	 A material reduction in the aggregate value of the Grantee’s level of participation in any of the Company’s short and/or long-term incentive compensation
plans (excluding stock-based incentive compensation plans), employee benefit or retirement plans, or policies, practices, or arrangements in which the Grantee participates immediately prior to the start of the Protected Period provided; however,
that a reduction in the aggregate value shall not be deemed to be “Good 

  

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Reason” if the reduced value remains substantially consistent with the average level of other employees who have positions commensurate with the
position held by the Grantee immediately prior to the start of the Protected Period. 

  

	 	(iv)	A material reduction in the Grantee’s aggregate level of participation in the Company’s stock-based incentive compensation plans from the level in effect immediately prior
to the start of the Protected Period; provided, however, that a reduction in the aggregate level of participation shall not be deemed to be “Good Reason” if the reduced level of participation remains substantially consistent with the
average level of participation of other employees who have positions commensurate with the position held by the Grantee immediately prior to the start of the Protected Period. 

  

	 	(v)	The Grantee is informed by the Company that his or her principal place of employment for the Company will be relocated to a location that is greater than fifty (50) miles away
from the Grantee’s principal place of employment for the Company at the start of the corresponding Protected Period; provided that, if the Company communicates an intended effective date for such relocation, in no event shall Good Reason exist
pursuant to this clause (v) more than ninety (90) days before such intended effective date. 

  
 The Grantee’s right to terminate employment for Good Reason shall not be affected by the Grantee’s incapacity due to physical or mental illness.
The Grantee’s continued employment shall not constitute a consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason herein. 
  
 “Parent” is used as defined in the Plan. 
  
 “Plan” means the Northrop Grumman 2001 Long-Term Incentive Stock Plan, as it may be amended form time to
time. 
  
 The “Protected Period” corresponding to
a Change in Control of the Company shall be a period of time determined in accordance with the following: 
  

	 	(i)	If the Change in Control is triggered by a tender offer for shares of the Company’s stock or by the offeror’s acquisition of shares pursuant to such a tender offer, the
Protected Period shall commence on the date of the initial tender offer and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period commence earlier than the date that is six
(6) months prior to the Change in Control. 

  

	 	(ii)	If the Change in Control is triggered by a merger, consolidation, or reorganization of the Company with or involving any other corporation, the Protected Period shall commence on
the date that serious and substantial discussions first take place to effect the merger, consolidation, or reorganization and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period
commence earlier than the date that is six (6) months prior to the Change in Control. 

  

	 	(iii)	In the case of any Change in Control not described in clause (i) or (ii) above, the Protected Period shall commence on the date that is six (6) months prior to the
Change in Control and shall continue through and include the date of the Change in Control. 

  
 “Retirement” or “Retire” means that the Grantee terminates employment after attaining age 55 with at least 10 years of
service (other than in connection with a termination by the Company or a subsidiary for cause). In the case of a Grantee who is an officer of the Company subject to the Company’s mandatory retirement at age 65 policy, “Retirement” or
“Retire” shall also include as to that Grantee (without limiting the Grantee’s ability to Retire pursuant to the preceding sentence) a termination of the Grantee’s employment pursuant to such mandatory retirement policy
(regardless of the Grantee’s years of service and other than in connection with a termination by the Company or a subsidiary for cause). 
  
 “Successor” means the person acquiring a Grantee’s rights to a grant under the Plan by will or by the laws of descent or
distribution. 
  

 7 

 EXHIBIT 10(d)(viii) 
  
 FORM B - OFFICER 
  
 NORTHROP GRUMMAN CORPORATION 
 TERMS
AND CONDITIONS APPLICABLE TO 2006 STOCK OPTIONS 
 GRANTED UNDER THE 2001 LONG-TERM INCENTIVE STOCK PLAN 
  
 These Terms and Conditions (“Terms”) apply to certain stock options
granted by Northrop Grumman Corporation (the “Company”) in 2006. If you were granted a stock option by the Company in 2006, the date of grant of your stock option (your “Option”), the total number of shares of common stock of the
Company subject to your Option, and the per share exercise price of your Option are set forth in the letter from the Company announcing your Option grant (your “Grant Letter”) and are reflected in the electronic stock plan award
recordkeeping system (“Stock Plan System”) maintained by the Company or its designee. These Terms apply to your Option if referenced in your Grant Letter and/or on the Stock Plan System with respect to your Option. If you were granted an
Option, you are referred to as the “Grantee” with respect to your Option. Capitalized terms are generally defined in Section 9 below if not otherwise defined herein. 
  
 The Option represents a right to purchase the number of shares of the Company’s Common Stock, for the per share
exercise price of the Option, each as stated in your Grant Letter and as reflected in the Stock Plan System. The number of shares and exercise price of the Option are subject to adjustment as provided herein. The Option is subject to all of the
terms and conditions set forth in these Terms, and is further subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Committee, as such rules are in effect from time to time.

  
 1. Vesting; Exercise of Option. 
  
 1.1 Vesting. The Option is exercisable only to
the extent that it has vested and has not expired or terminated. Subject to Sections 2 and 5 below, one-fourth ( 1/4) of the total number of shares of Company Common Stock subject to the Option (subject to adjustment as provided in Section 5.1) shall vest and become exercisable upon each of the first, second, third and fourth anniversaries of
the Grant Date. 
  
 1.2 Method of
Exercise. In order to exercise the Option, the Grantee or such other person as may be entitled to exercise the same shall (a) execute and deliver to the Corporate Secretary of the Company a written notice indicating the number of shares
subject to the Option to be exercised, and/or (b) complete such other exercise procedure as may be prescribed by the Corporate Secretary of the Company. The date of exercise of the Option shall be the day such notice is received by the
Corporate Secretary of the Company or the day such exercise procedures are satisfied, as applicable; provided that in no event shall the Option be considered to have been exercised unless the per share exercise price of the Option is paid in full
(or provided for in accordance with Section 1.3) for each of the shares to be acquired on such exercise and all required tax withholding obligations with respect to such exercise have been satisfied or provided for in accordance with
Section 6 hereof. No fractional shares will be issued. 
  
 1.3 Payment of Exercise Price. The exercise price shall be paid at the time of exercise. Payment may be made (a) in cash; (b) in the sole discretion of the Committee and on such terms and conditions as the
Corporate Secretary of the Company may prescribe, either in whole or in part in Common Stock of the Company (either actually or by attestation and valued at their Fair Market Value on the date of exercise of the Option, provided, however, that any
previously-acquired shares of Common Stock used to pay the exercise price of the Option that have been acquired directly from the Company must have been owned by the Grantee for at least six (6) months before the date of such exercise);
(c) in a combination of payments under clauses (a) and (b); or (d) pursuant to a cashless exercise arranged through a broker or other third party. Notwithstanding the foregoing, the Committee may at any time (a) limit the ability
of the Grantee to exercise the Option through any method other than a cash payment, or (b) require the Grantee to exercise, to the extent possible, the Option in the manner described in clause (b) of the preceding sentence. 
  
 1.4 Tax Status. The Option is not and shall not be
deemed to be an incentive stock option within the meaning of Section 422 of the Code. 
  
 2. Termination of Option; Termination of Employment. 
  
 2.1 General. The Option, to the extent not previously exercised, and all other rights in respect thereof, whether vested and
exercisable or not, shall terminate and become null and void at the close of business on the last business day preceding the tenth (10th) anniversary of the Grant Date (the “Expiration Date”). The Option, to the extent not previously exercised, and all other rights in respect thereof, whether vested and exercisable or not, shall terminate and
become null and void prior to the Expiration Date if and when (a) the Option terminates in connection with a Change in Control pursuant to Section 5 below, or (b) except as provided below in this Section 2 and in Section 5,
the Grantee ceases to be an employee of the Company or one of its subsidiaries. 
  

 1 

 2.2 Termination of Employment Due to Retirement. If the Grantee ceases to be
employed by the Company or one of its subsidiaries due to the Grantee’s Early Retirement and such Early Retirement occurs more than six months after the Grant Date, the next succeeding vesting installment of the Option shall vest, and all
installments under the Option which have vested may be exercised by the Grantee (or, in the event of the Grantee’s death, by the Grantee’s Successor) until the fifth anniversary of the Grantee’s Early Retirement, but in no event after
the Expiration Date. Any remaining unvested installments, after giving effect to the foregoing sentence, shall terminate immediately upon the Grantee’s Early Retirement. If the Grantee ceases to be employed by the Company or one of its
subsidiaries due to the Grantee’s Normal Retirement and such Normal Retirement occurs more than six months after the Grant Date, all remaining installments of the Option shall vest, and all installments under the Option may be exercised by the
Grantee (or, in the event of the Grantee’s death, by the Grantee’s Successor) until the fifth anniversary of the Grantee’s Normal Retirement, but in no event after the Expiration Date. 
  
 2.3 Termination of Employment Due to Death or
Disability. If the Grantee dies while employed by the Company or a subsidiary and such death occurs more than six months after the Grant Date, or if the Grantee’s employment by the Company and its subsidiaries terminates due to the
Grantee’s Disability and such termination occurs more than six months after the Grant Date, the next succeeding vesting installment of the Option shall vest, and all installments under the Option which have vested may be exercised by the
Grantee (or, in the case of the Grantee’s death, by the Grantee’s Successor) until the fifth anniversary of the Grantee’s death or Disability, whichever first occurs, but in no event after the Expiration Date. Any remaining unvested
installments, after giving effect to the foregoing sentence, shall terminate immediately upon the Grantee’s death or Disability, as applicable. 
  
 2.4 Other Terminations of Employment. Subject to the following sentence, if the employment of the Grantee with the Company or a
subsidiary is terminated for any reason other than the Grantee’s Early or Normal Retirement, death, or Disability, or in the event of a termination of the Grantee’s employment with the Company or a subsidiary on or before the six-month
anniversary of the Grant Date due to the Grantee’s Early or Normal Retirement, death, or Disability, the Option may be exercised (as to not more than the number of shares as to which the Grantee might have exercised the Option on the date on
which his or her employment terminated) only within 90 days from the date of such termination of employment, but in no event after the Expiration Date; provided, however, that if the Grantee is dismissed by the Company or a subsidiary for cause, the
Option shall expire forthwith. If the Grantee dies within 90 days after a termination of employment described in the preceding sentence (other than a termination by the Company or a subsidiary for cause), the Option may be exercised by the
Grantee’s Successor for one year from the date of the Grantee’s death, but in no event after the Expiration Date and as to not more than the number of shares as to which the Grantee might have exercised the Option on the date on which his
or her employment by the Company or a subsidiary terminated. For purposes of this Section 2 and prior to a Change in Control, the Company shall be the sole judge of “cause” unless such term is expressly defined in a written employment
agreement by and between the Grantee and either the Company or one of its subsidiaries, in which case “cause” is used as defined in such employment agreement for purposes of this Section 2. Prior to a Change in Control, the definition
of “Cause” in Section 9 does not apply for purposes of this Section 2. With respect to a termination of employment upon or following a Change in Control, the definition of “Cause” in Section 9 shall apply for
purposes of this Section 2. 
  
 2.5 Leave of
Absence. Unless the Committee otherwise provides (at the time of the leave or otherwise), if the Grantee is granted a leave of absence by the Company, the Grantee (a) shall not be deemed to have incurred a termination of employment at
the time such leave commences for purposes of the Option, and (b) shall be deemed to be employed by the Company for the duration of such approved leave of absence for purposes of the Option. A termination of employment shall be deemed to have
occurred if the Grantee does not timely return to active employment upon the expiration of such approved leave or if the Grantee commences a leave that is not approved by the Company. 
  
 2.6 Salary Continuation. Subject to Section 2.5 above, the term “employment” as used
herein means active employment by the Company and salary continuation without active employment (other than a leave of absence approved by the Company and covered by Section 2.5) will not, in and of itself, constitute “employment” for
purposes hereof (in the case of salary continuation without active employment, the Grantee’s cessation of active employee status shall, subject to Section 2.5, be deemed to be a termination of “employment” for purposes hereof).
Furthermore, salary continuation will not, in and of itself, constitute a leave of absence approved by the Company for purposes of the Option. 
  
 2.7 Sale or Spinoff of Subsidiary or Business Unit. For purposes of the Option, a termination of employment of the Grantee shall be
deemed to have occurred if the Grantee is employed by a subsidiary or business unit and that subsidiary or business unit is sold, spun off, or otherwise divested and the Grantee’s employment does not terminate due to the Grantee’s Early or
Normal Retirement upon or immediately before such event and the Grantee does not otherwise continue to be employed by the Company after such event. 
  

 2 

 2.8 Continuance of Employment Required. Except as expressly provided in Sections 2.2
and 2.3 above, and Section 5 below, the vesting of the Option requires continued employment through each vesting date as a condition to the vesting of the corresponding installment of the award. Employment before or between the specified
vesting dates, even if substantial, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment. Nothing contained in these Terms, the Grant
Letter, the Stock Plan System, or the Plan constitutes an employment commitment by the Company or any subsidiary, affects the Grantee’s status (if the Grantee is otherwise an at-will employee) as an employee at will who is subject to
termination without cause, confers upon the Grantee any right to continue in the employ of the Company or any subsidiary, or interferes in any way with the right of the Company or of any subsidiary to terminate such employment at any time.

  
 3. Non-Transferability and Other Restrictions.

  
 The Option is non-transferable and shall not be subject
in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. The foregoing transfer restrictions shall not apply to: (a) transfers to the Company; (b) transfers by will or the laws of descent and
distribution; or (c) if the Grantee has suffered a disability, permitted transfers to or exercises on behalf of the holder by his or her legal representative. Notwithstanding the foregoing, the Company may honor any transfer required pursuant
to the terms of a court order in a divorce or similar domestic relations matter to the extent that such transfer does not adversely affect the Company’s ability to register the offer and sale of the underlying shares on a Form S-8 Registration
Statement and such transfer is otherwise in compliance with all applicable legal, regulatory and listing requirements. 
  
 4. Compliance with Laws; No Stockholder Rights Prior to Issuance. 
  
 The Company’s obligation to issue any shares with respect to the Option is subject to full compliance with all then
applicable requirements of law, the Securities and Exchange Commission, the Commissioner of Corporations of the State of California, or other regulatory agencies having jurisdiction over the Company and its shares, and of any exchanges upon which
stock of the Company may be listed. The Grantee shall not have the rights and privileges of a stockholder with respect to shares subject to or purchased under the Option until the date appearing on the certificate(s) for such shares (or, in the case
of shares entered in book entry form, the date that the shares are actually recorded in such form for the benefit of the Grantee) issued upon the exercise of the Option. 
  
 5. Adjustments; Change in Control. 
  
 5.1 Adjustments. The number, type and price of shares subject to the Option, as well as the per share
exercise price of the Option, are subject to adjustment upon the occurrence of events such as stock splits, stock dividends and other changes in capitalization in accordance with Section 6(a) of the Plan. In the event of any adjustment, the
Company will give the Grantee written notice thereof which will set forth the nature of the adjustment. 
  
 5.2 Possible Acceleration on Change in Control. Notwithstanding the acceleration provisions of Section 2 hereof but subject to
the limited exercise periods set forth therein, and further subject to the Company’s ability to terminate the Option as provided in Section 5.3 below, the outstanding and previously unvested portion of the Option shall become fully
exercisable as of the date of the Grantee’s termination of employment as follows: 
  

	 	(a)	if the Grantee is covered by a Change in Control Severance Arrangement at the time of the termination, if the termination of employment constitutes a “Qualifying
Termination” (as such term, or any similar successor term, is defined in such Change in Control Severance Arrangement) that triggers the Grantee’s right to severance benefits under such Change in Control Severance Arrangement.

  

	 	(b)	if the Grantee is not covered by a Change in Control Severance Arrangement at the time of the termination and if the termination occurs either within the Protected Period
corresponding to a Change in Control of the Company or within twenty-four (24) calendar months following the date of a Change in Control of the Company, the Grantee’s employment by the Company and its subsidiaries is involuntarily
terminated by the Company and its subsidiaries for reasons other than Cause or by the Grantee for Good Reason. 

  
 Notwithstanding anything else contained herein to the contrary, the termination of the Grantee’s employment (or other events giving rise to Good
Reason) shall not entitle the Grantee to any accelerated vesting pursuant to clause (b) above if there is objective evidence that, as of the commencement of the Protected Period, the Grantee had specifically been identified by the Company as an
employee whose employment would be terminated as part of a corporate restructuring or downsizing program that commenced prior to the Protected Period and such termination of employment was expected at that time to occur within six (6) months.

  

 3 

 
The applicable Change in Control Severance Arrangement shall govern the matters addressed in this paragraph as to clause (a) above. 
  
 5.3 Automatic Acceleration; Early Termination. If the
Company undergoes a Change in Control triggered by clause (iii) or (iv) of the definition thereof and the Company is not the surviving entity and the successor to the Company (if any) (or a Parent thereof) does not agree in writing prior
to the occurrence of the Change in Control to continue and assume the Option following the Change in Control, or if for any other reason the Option would not continue after the Change in Control, then upon the Change in Control the outstanding and
previously unvested portion of the Option shall vest fully and completely, any and all restrictions on exercisability or otherwise shall lapse, and it shall be fully exercisable. Unless the Committee expressly provides otherwise in the
circumstances, no acceleration of vesting or exercisability of the Option shall occur pursuant to this Section 5.3 in connection with a Change in Control if either (a) the Company is the surviving entity, or (b) the successor to the
Company (if any) (or a Parent thereof) agrees in writing prior to the Change in Control to assume the Option. If the Option is fully vested or becomes fully vested as provided in this Section 5.3 but is not exercised prior to a Change in
Control triggered by clause (iii) or (iv) of the definition thereof and the Company is not the surviving entity and the successor to the Company (if any) (or a Parent thereof) does not agree in writing prior to the occurrence of the Change
in Control to continue and assume the Option following the Change in Control, or if for any other reason the Option would not continue after the Change in Control, then the Committee may provide for the settlement in cash of the award (such
settlement to be calculated as though the Option was exercised simultaneously with the Change in Control and based upon the then Fair Market Value of a share of Common Stock). The Option, if so settled by the Committee, shall automatically
terminate. If, in such circumstances, the Committee does not provide for the cash settlement of the Option, then upon the Change in Control the Option shall terminate, subject to any provision that has been made by the Committee through a plan of
reorganization or otherwise for the survival, substitution or exchange of the Option; provided that the Grantee shall be given reasonable notice of such intended termination and an opportunity to exercise the Option prior to or upon the Change in
Control. The Committee may make adjustments pursuant to Section 6(a) of the Plan and/or deem an acceleration of vesting of the Option pursuant to this Section 5.3 to occur sufficiently prior to an event if necessary or deemed appropriate
to permit the Grantee to realize the benefits intended to be conveyed with respect to the shares underlying the Option; provided, however, that, the Committee may reinstate the original terms of the Option if the related event does not actually
occur. The provisions in this Section 5.3 for the early termination of the Option in connection with a Change in Control of the Company supercede any other provision hereof that would otherwise allow for a longer Option term. 
  
 6. Tax Matters. 
  
 6.1 Tax Withholding. The Company or the
subsidiary which employs the Grantee shall be entitled to require, as a condition of issuing shares upon exercise of the Option, that the Grantee or other person exercising the Option pay any sums required to be withheld by federal, state or local
tax law with respect to such vesting or payment. Alternatively, the Company or such subsidiary, in its discretion, may make such provisions for the withholding of taxes as it deems appropriate (including, without limitation, withholding the taxes
due from compensation otherwise payable to the Grantee or reducing the number of shares otherwise deliverable with respect to the Option (valued at their then Fair Market Value) by the amount necessary to satisfy such withholding obligations at the
flat percentage rates applicable to supplemental wages). 
  
 6.2 Transfer Taxes. The Company will pay all federal and state transfer taxes, if any, and other fees and expenses in connection with the issuance of shares in connection with the vesting of the Option. 
  
 7. Committee Authority. 
  
 The Committee has the discretionary authority to determine any questions as
to the date when the Grantee’s employment terminated and the cause of such termination and to interpret any provision of these Terms, the Grant Letter, the Stock Plan System, the Plan, and any other applicable rules. Any action taken by, or
inaction of, the Committee relating to or pursuant to these Terms, the Grant Letter, the Stock Plan System, the Plan, or any other applicable rules shall be within the absolute discretion of the Committee and shall be conclusive and binding on all
persons. 
  
 8. Plan; Amendment. 
  
 The Option is governed by, and the Grantee’s rights are subject to, all
of the terms and conditions of the Plan and any other rules adopted by the Committee, as the foregoing may be amended from time to time. The Grantee shall have no rights with respect to any amendment of these Terms or the Plan unless such amendment
is in writing and signed by a duly authorized officer of the Company. In the event of a conflict between the provisions of the Grant Letter and/or the Stock Plan System and the provisions of these Terms and/or the Plan, the provisions of these Terms
and/or the Plan, as applicable, shall control. 
  

 4 

 9. Definitions. 
  
 Whenever used in these Terms, the following terms shall have the meanings set forth below and, when the meaning is intended,
the initial letter of the word is capitalized: 
  
 “Board” means the Board of Directors of the Company. 
  
 “Cause” means the occurrence of either or both of the following: 
  

	 	(i)	The Grantee’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony (other than traffic related offenses or as a result of
vicarious liability); or 

  

	 	(ii)	The willful engaging by the Grantee in misconduct that is significantly injurious to the Company. However, no act, or failure to act, on the Grantee’s part shall be considered
“willful” unless done, or omitted to be done, by the Grantee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. 

  
 “Change in Control” is used as defined in the Plan.

  
 “Change in Control Severance Arrangement”
means a “Special Agreement” entered into by and between the Grantee and the Company that provides severance protections in the event of certain changes in control of the Company or the Company’s Change-in-Control Severance Plan, as
each may be in effect from time to time, or any similar successor agreement or plan that provides severance protections in the event of a change in control of the Company. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
  
 “Committee” means the Company’s Compensation and
Management Development Committee or any successor committee appointed by the Board to administer the Plan. 
  
 “Disability” means disabled pursuant to the provisions of the Company’s (or one of its subsidiary’s) Long Term Disability Plan
applicable to the Grantee; or, if the Grantee is not covered by such a Long Term Disability Plan, the incapacity of the Grantee, due to injury, illness, disease, or bodily or mental infirmity, to engage in the performance of substantially all of the
usual duties of employment with the Company or the subsidiary which employs the Grantee, such disability to be determined by the Committee upon receipt and in reliance on competent medical advice from one or more individuals, selected by the
Committee, who are qualified to give such professional medical advice. 
  
 “Early Retirement” means that the Grantee terminates employment after attaining age 55 with at least 10 years of service (other than in connection with a termination by the Company or a subsidiary for cause) and other than
a Normal Retirement. However, in the case of a Grantee who is an officer of the Company subject to the Company’s mandatory retirement at age 65 policy and who, at the applicable time, is not otherwise eligible for Early Retirement as defined in
the preceding sentence or for Normal Retirement, “Early Retirement” as to that Grantee means that the Grantee’s employment is terminated pursuant to such mandatory retirement policy (regardless of the Grantee’s years of service
and other than in connection with a termination by the Company or a subsidiary for cause). 
  
 “Exchange Act” means the United States Securities Exchange Act of 1934, as amended. 
  
 “Fair Market Value” is used as defined in the Plan; provided, however, the Committee in determining such Fair Market Value for purposes
of the Option may utilize such other exchange, market, or listing as it deems appropriate. For purposes of a cashless exercise, the Fair Market Value of the shares shall be the price at which the shares in payment of the exercise price are sold.

  
 “Good Reason” means, without the
Grantee’s express written consent, the occurrence of any one or more of the following: 
  

	 	(i)	 A material and substantial reduction in the nature or status of the Grantee’s authorities or responsibilities (when such authorities and/or responsibilities
are viewed in the aggregate) from their level in effect on the day immediately prior to the start of the Protected Period, other than (A) an inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the
Grantee, and/or (B) changes in the nature or status of the Grantee’s authorities or responsibilities that, in the aggregate, would generally be viewed by a nationally-recognized executive placement firm as resulting in the Grantee having
not materially and substantially fewer authorities and responsibilities (taking into consideration the Company’s industry) when compared to the authorities and responsibilities applicable to the position held by the Grantee immediately prior to
the start of the Protected Period. For the purpose of the preceding test, the Grantee and the Company shall mutually agree on a nationally-recognized consulting firm; provided that, if agreement cannot timely be reached, the Company and the Grantee
shall each timely choose a nationally-recognized firm and 

  

 5 

	 	 
representatives of these two firms shall promptly choose a third firm, which third firm will make the determination referred to in the preceding sentence.
The written opinion of the firm thus selected shall be conclusive as to this issue. 

  
 In addition, if the Grantee is a vice president, the Grantee’s loss of vice-president status will constitute “Good Reason”; provided that
the loss of the title of “vice president” will not, in and of itself, constitute Good Reason if the Grantee’s lack of a vice president title is generally consistent with the manner in which the title of vice president is used within
the Grantee’s business unit or if the loss of the title is the result of a promotion to a higher level office. For the purposes of the preceding sentence, the Grantee’s lack of a vice-president title will only be considered generally
consistent with the manner in which such title is used if most persons in the business unit with authorities, duties, and responsibilities comparable to those of the Grantee immediately prior to the commencement of the Protected Period do not have
the title of vice-president. 
  

	 	(ii)	A reduction by the Company in the Grantee’s annualized rate of base salary as in effect on the Grant Date or as the same shall be increased from time to time.

  

	 	(iii)	A material reduction in the aggregate value of the Grantee’s level of participation in any of the Company’s short and/or long-term incentive compensation plans (excluding
stock-based incentive compensation plans), employee benefit or retirement plans, or policies, practices, or arrangements in which the Grantee participates immediately prior to the start of the Protected Period provided; however, that a reduction in
the aggregate value shall not be deemed to be “Good Reason” if the reduced value remains substantially consistent with the average level of other employees who have positions commensurate with the position held by the Grantee immediately
prior to the start of the Protected Period. 

  

	 	(iv)	A material reduction in the Grantee’s aggregate level of participation in the Company’s stock-based incentive compensation plans from the level in effect immediately prior
to the start of the Protected Period; provided, however, that a reduction in the aggregate level of participation shall not be deemed to be “Good Reason” if the reduced level of participation remains substantially consistent with the
average level of participation of other employees who have positions commensurate with the position held by the Grantee immediately prior to the start of the Protected Period. 

  

	 	(v)	The Grantee is informed by the Company that his or her principal place of employment for the Company will be relocated to a location that is greater than fifty (50) miles away
from the Grantee’s principal place of employment for the Company at the start of the corresponding Protected Period; provided that, if the Company communicates an intended effective date for such relocation, in no event shall Good Reason exist
pursuant to this clause (v) more than ninety (90) days before such intended effective date. 

  
 The Grantee’s right to terminate employment for Good Reason shall not be affected by the Grantee’s incapacity due to physical or mental illness.
The Grantee’s continued employment shall not constitute a consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason herein. 
  
 “Grant Date” means the date that the Committee approved the grant of the Option. 
  
 “Normal Retirement” means that the Grantee terminates
employment after attaining age 65 with at least 10 years of service (other than in connection with a termination by the Company or a subsidiary for cause). 
  
 “Parent” is used as defined in the Plan. 
  
 “Plan” means the Northrop Grumman 2001 Long-Term Incentive Stock Plan, as it may be amended from time to time. 
  
 The “Protected Period” corresponding to a Change in Control
of the Company shall be a period of time determined in accordance with the following: 
  

	 	(i)	If the Change in Control is triggered by a tender offer for shares of the Company’s stock or by the offeror’s acquisition of shares pursuant to such a tender offer, the
Protected Period shall commence on the date of the initial tender offer and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period commence earlier than the date that is six
(6) months prior to the Change in Control. 

  

	 	(ii)	If the Change in Control is triggered by a merger, consolidation, or reorganization of the Company with or involving any other corporation, the Protected Period shall commence on
the date that serious and substantial discussions first take place to effect the merger, consolidation, or reorganization and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period
commence earlier than the date that is six (6) months prior to the Change in Control. 

  

	 	(iii)	In the case of any Change in Control not described in clause (i) or (ii) above, the Protected Period shall commence on the date that is six (6) months prior to the
Change in Control and shall continue through and including the date of the Change in Control. 

  
 “Successor” means the person acquiring a Grantee’s rights to a grant under the Plan by will or by the laws of descent or
distribution. 
  

 6 

 EXHIBIT 10(d)(ix) 
  
 FORM A - RSR 
  
 NORTHROP GRUMMAN CORPORATION 
 TERMS
AND CONDITIONS APPLICABLE TO 2006 RESTRICTED STOCK RIGHTS 
 GRANTED UNDER THE 2001 LONG-TERM INCENTIVE STOCK PLAN 
  
 These Terms and Conditions (“Terms”) apply to certain
“Restricted Stock Rights” (“RSRs”) granted by Northrop Grumman Corporation (the “Company”) in 2006. If you were granted an RSR award by the Company in 2006, the date of grant of your RSR award (“Date of
Grant”) and the number of RSRs applicable to your award are set forth in the letter from the Company announcing your RSR award grant (your “Grant Letter”) and are also reflected in the electronic stock plan award recordkeeping system
(“Stock Plan System”) maintained by the Company or its designee. These Terms apply only with respect to your 2006 RSR award. If you were granted an RSR award, you are referred to as the “Grantee” with respect to your award.
Capitalized terms are generally defined in Section 9 below if not otherwise defined herein. 
  
 Each RSR represents a right to receive one share of the Company’s Common Stock, or cash of equivalent value as provided herein, subject to vesting as
provided herein. The number of RSRs subject to your award is subject to adjustment as provided herein. The RSR award is subject to all of the terms and conditions set forth in these Terms, and is further subject to all of the terms and conditions of
the Plan, as it may be amended from time to time, and any rules adopted by the Committee, as such rules are in effect from time to time. 
  
 1. Vesting; Payment. 
  
 Subject to Sections 2 and 5 below, one hundred percent (100%) of the RSRs subject to your award (subject to adjustment as provided in
Section 5.1) shall vest upon the third anniversary of the Date of Grant. 
  
 Except as otherwise provided below, the Company shall pay a vested RSR as soon as practicable following the vesting of the RSR and no later than March 15th of the year following the year of vesting. The Company shall pay a vested RSR in a share of Common Stock, or, in the discretion of the Committee, in cash. In
the event of a cash payment, the amount of the payment for the RSR to be paid in cash will equal the Fair Market Value of a share of Common Stock as of the vesting date of the RSR. No fractional shares shall be issued. Upon payment of the RSR, the
Grantee’s rights with respect to the RSR shall terminate. 
  
 If an RSR award is subject to Code Section 409A, the following rules shall apply: 
  

	 	(a)	Vested RSRs shall be paid as soon as practicable after the earlier of (1) the third anniversary of the Date of Grant, (2) the Grantee’s “separation from
service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i), (3) the Grantee’s death, or (4) a change in control of the Company within the meaning of Code Section 409A(a)(2)(A)(v) that causes awards to
vest under Section 5.3. 

  

	 	(b)	Notwithstanding the foregoing, if an RSR is to be paid upon a Grantee’s separation from service under subsection (a)(2) above, and the Grantee is a “specified
employee” within the meaning of Code Section 409A(a)(2)(B)(i), payment shall be made six months after the Grantee’s separation from service. 

  
 2. Early Termination of Award; Termination of Employment. 
  
 2.1 General. The RSRs subject to the award, to
the extent not previously vested, shall terminate and become null and void if and when the Grantee ceases for any reason to be an employee of the Company or one of its subsidiaries, except as provided in Section 2.2 and in Section 5.

  
 2.2 Termination of Employment Due to Retirement, Death or
Disability. A pro-rated number of RSRs subject to the award shall vest on the date the Grantee’s employment by the Company and its subsidiaries terminates due to the Grantee’s Retirement, death or Disability and, in each case,
only if the Grantee has completed at least six (6) consecutive calendar months of employment with the Company or a subsidiary during the period between the Date of Grant and the third anniversary of the Date of Grant. Such prorating of RSRs
shall be based on the number of full months the Grantee was actually employed by the Company or one of its subsidiaries out of the thirty-six month vesting period of the RSRs. Partial months of employment during such period, even if substantial,
shall not be counted for purposes of prorated vesting. Any RSRs subject to the award that do not vest in accordance with this Section 2.2 upon a termination of the Grantee’s employment due to Retirement, death or Disability shall terminate
immediately upon such termination of employment. 
  

 1 

 2.3 Leave of Absence. Unless the Committee otherwise provides (at the time of the
leave or otherwise), if the Grantee is granted a leave of absence by the Company, the Grantee (a) shall not be deemed to have incurred a termination of employment at the time such leave commences for purposes of the award, and (b) shall be
deemed to be employed by the Company for the duration of such approved leave of absence for purposes of the award. A termination of employment shall be deemed to have occurred if the Grantee does not timely return to active employment upon the
expiration of such approved leave or if the Grantee commences a leave that is not approved by the Company. 
  
 2.4 Salary Continuation. Subject to Section 2.3 above, the term “employment” as used herein means active employment by
the Company and salary continuation without active employment (other than a leave of absence approved by the Company that is covered by Section 2.3) will not, in and of itself, constitute “employment” for purposes hereof (in the case
of salary continuation without active employment, the Grantee’s cessation of active employee status shall, subject to Section 2.3, be deemed to be a termination of “employment” for purposes hereof). Furthermore, salary
continuation will not, in and of itself, constitute a leave of absence approved by the Company for purposes of the award. 
  
 2.5 Sale or Spinoff of Subsidiary or Business Unit. For purposes of the RSRs subject to the award, a termination of employment of the
Grantee shall be deemed to have occurred if the Grantee is employed by a subsidiary or business unit and that subsidiary or business unit is sold, spun off, or otherwise divested and the Grantee does not Retire upon or immediately before such event
and Grantee does not otherwise continue to be employed by the Company or one of its subsidiaries after such event. 
  
 2.6 Continuance of Employment Required. Except as expressly provided in Section 2.2 above and in Section 5 below, the
vesting of the RSRs subject to the award requires continued employment through the third anniversary of the Date of Grant as a condition to the vesting of the award. Employment for only a portion of the vesting period, even if a substantial portion,
will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment. Nothing contained in these Terms, the Grant Letter, the Stock Plan System, or the Plan
constitutes an employment commitment by the Company or any subsidiary, affects the Grantee’s status (if the Grantee is otherwise an at-will employee) as an employee at will who is subject to termination without cause, confers upon the Grantee
any right to continue in the employ of the Company or any subsidiary, or interferes in any way with the right of the Company or of any subsidiary to terminate such employment at any time. 
  
 2.7 Death. In the event of the Grantee’s death subsequent to the vesting of RSRs but prior to the
delivery of shares or other payment with respect to such RSRs, the Grantee’s Successor shall be entitled to any payments to which the Grantee would have been entitled under this Agreement with respect to such RSRs. 
  
 3. Non-Transferability and Other Restrictions. 
  
 The award, as well as the RSRs subject to the award, are non-transferable
and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. The foregoing transfer restrictions shall not apply to transfers to the Company. Notwithstanding the foregoing, the
Company may honor any transfer required pursuant to the terms of a court order in a divorce or similar domestic relations matter to the extent that such transfer does not adversely affect the Company’s ability to register the offer and sale of
the underlying shares on a Form S-8 Registration Statement and such transfer is otherwise in compliance with all applicable legal, regulatory and listing requirements. 
  
 4. Compliance with Laws; No Stockholder Rights Prior to Issuance. 
  
 The Company’s obligation to make any payments or issue any shares with
respect to the award is subject to full compliance with all then applicable requirements of law, the Securities and Exchange Commission, the Commissioner of Corporations of the State of California, or other regulatory agencies having jurisdiction
over the Company and its shares, and of any exchange upon which stock of the Company may be listed. The Grantee shall not have the rights and privileges of a stockholder, including without limitation the right to vote or receive dividends, with
respect to any shares which may be issued in respect of the RSRs until the date appearing on the certificate(s) for such shares (or, in the case of shares entered in book entry form, the date that the shares are actually recorded in such form for
the benefit of the Grantee), if such shares become deliverable. 
  
 5.
Adjustments; Change in Control. 
  
 5.1
Adjustments. The RSRs and the shares subject to the award are subject to adjustment upon the occurrence of events such as stock splits, stock dividends and other changes in capitalization in accordance with Section 6(a) of the
Plan. In the event of any adjustment, the Company will give the Grantee written notice thereof which will set forth the nature of the adjustment. 
  

 2 

 5.2 Possible Acceleration on Change in Control. Outstanding and previously unvested
RSRs subject to the award shall become fully vested as of the date of the Grantee’s termination of employment in the following circumstances: 
  

	 	(a)	if the Grantee is covered by a Change in Control Severance Arrangement at the time of the termination, and the termination of employment constitutes a “Qualifying
Termination” (as such term, or any similar successor term, is defined in such Change in Control Severance Arrangement) that triggers the Grantee’s right to severance benefits under such Change in Control Severance Arrangement.

  

	 	(b)	if the Grantee is not covered by a Change in Control Severance Arrangement at the time of the termination, the termination occurs either within the Protected Period
corresponding to a Change in Control of the Company or within twenty-four (24) calendar months following the date of a Change in Control of the Company, and the Grantee’s employment by the Company and its subsidiaries is involuntarily
terminated by the Company and its subsidiaries for reasons other than Cause or by the Grantee for Good Reason. 

  
 Notwithstanding anything else contained herein to the contrary, the termination of the Grantee’s employment (or other events giving rise to Good
Reason) shall not entitle the Grantee to any accelerated vesting pursuant to clause (b) above if there is objective evidence that, as of the commencement of the Protected Period, the Grantee had specifically been identified by the Company as an
employee whose employment would be terminated as part of a corporate restructuring or downsizing program that commenced prior to the Protected Period and such termination of employment was expected at that time to occur within six (6) months.
The applicable Change in Control Severance Arrangement shall govern the matters addressed in this paragraph as to clause (a) above. 
  
 5.3 Automatic Acceleration; Early Termination. If the Company undergoes a Change in Control triggered by clause (iii) or
(iv) of the definition thereof and the Company is not the surviving entity and the successor to the Company (if any) (or a Parent thereof) does not agree in writing prior to the occurrence of the Change in Control to continue and assume the
award following the Change in Control, or if for any other reason the award would not continue after the Change in Control, then upon the Change in Control the outstanding and previously unvested RSRs subject to the award shall vest fully and
completely. Unless the Committee expressly provides otherwise in the circumstances, no acceleration of vesting of the award shall occur pursuant to this Section 5.3 in connection with a Change in Control if either (a) the Company is the
surviving entity, or (b) the successor to the Company (if any) (or a Parent thereof) agrees in writing prior to the Change in Control to assume the award. The Committee may make adjustments pursuant to Section 6(a) of the Plan and/or deem
an acceleration of vesting of the award pursuant to this Section 5.3 to occur sufficiently prior to an event if necessary or deemed appropriate to permit the Grantee to realize the benefits intended to be conveyed with respect to the shares
underlying the RSRs; provided, however, that, the Committee may reinstate the original terms of the award if the related event does not actually occur. 
  
 6. Tax Matters. 
  
 6.1 Tax Withholding. The Company or the subsidiary which employs the Grantee shall be entitled to require, as a
condition of making any payments or issuing any shares upon vesting of the RSRs, that the Grantee or other person entitled to such shares or other payment pay any sums required to be withheld by federal, state, local, or other applicable tax law
with respect to such vesting or payment. Alternatively, the Company or such subsidiary, in its discretion, may make such provisions for the withholding of taxes as it deems appropriate (including, without limitation, withholding the taxes due from
compensation otherwise payable to the Grantee or reducing the number of shares otherwise deliverable with respect to the award (valued at their then Fair Market Value) by the amount necessary to satisfy such withholding obligations).

  
 6.2 Transfer Taxes. The Company will
pay all federal and state transfer taxes, if any, and other fees and expenses in connection with the issuance of shares in connection with the vesting of the RSRs. 
  
 6.3 Compliance with Code Section 409A. If an RSR award is subject to Code Section 409A, the
Committee shall administer and construe the award in a manner designed to avoid adverse tax consequences under Section 409A. 
  
 6.4 Unfunded Arrangement. The right of a Grantee to receive payment under the RSR award shall be an unsecured claim against
the Company, and neither the Grantee nor any Successor shall have any rights in or against any assets of the Company based on the award. Awards of RSRs shall at all times be considered entirely unfunded for tax purposes. 
  
 7. Committee Authority. 
  
 The Committee has the discretionary authority to determine any questions as
to the date when the Grantee’s employment terminated and the cause of such termination and to interpret any provision of these Terms, the Grant Letter, the Stock Plan System, the Plan, and any other applicable rules. Any action taken by, or
inaction of, the Committee relating to or pursuant to 

  

 3 

 
these Terms, the Grant Letter, the Stock Plan System, the Plan, or any other applicable rules shall be within the absolute discretion of the Committee and
shall be conclusive and binding on all persons. 
  
 8. Plan;
Amendment. 
  
 The RSRs are governed by, and the
Grantee’s rights are subject to, all of the terms and conditions of the Plan and any other rules adopted by the Committee, as the foregoing may be amended from time to time. The Grantee shall have no rights with respect to any amendment of
these Terms or the Plan unless such amendment is in writing and signed by a duly authorized officer of the Company. In the event of a conflict between the provisions of the Grant Letter and/or the Stock Plan System and the provisions of these Terms
and/or the Plan, the provisions of these Terms and/or the Plan, as applicable, shall control. 
  
 9. Definitions. 
  
 Whenever used in these Terms, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized: 
  
 “Board” means the Board of Directors of the Company. 
  
 “Cause” means the occurrence of either or both of the
following: 
  

	 	(i)	The Grantee’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony (other than traffic related offenses or as a result of
vicarious liability); or 

  

	 	(ii)	The willful engaging by the Grantee in misconduct that is significantly injurious to the Company. However, no act, or failure to act, on the Grantee’s part shall be considered
“willful” unless done, or omitted to be done, by the Grantee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. 

  
 “Change in Control” is used as defined in the Plan.

  
 “Change in Control Severance Arrangement”
means a “Special Agreement” entered into by and between the Grantee and the Company that provides severance protections in the event of certain changes in control of the Company or the Company’s Change-in-Control Severance Plan, as
each may be in effect from time to time, or any similar successor agreement or plan that provides severance protections in the event of a change in control of the Company. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
  
 “Committee” means the Company’s Compensation and
Management Development Committee or any successor committee appointed by the Board to administer the Plan. 
  
 “Common Stock” means the Company’s common stock. 
  
 “Disability” means disabled pursuant to the provisions of the Company’s (or one of its
subsidiary’s) Long Term Disability Plan applicable to the Grantee; or, if the Grantee is not covered by such a Long Term Disability Plan, the incapacity of the Grantee, due to injury, illness, disease, or bodily or mental infirmity, to engage
in the performance of substantially all of the usual duties of employment with the Company or the subsidiary which employs the Grantee, such disability to be determined by the Committee upon receipt and in reliance on competent medical advice from
one or more individuals, selected by the Committee, who are qualified to give such professional medical advice. 
  
 “Fair Market Value” is used as defined in the Plan; provided, however, the Committee in determining such Fair Market Value for purposes
of the award may utilize such other exchange, market, or listing as it deems appropriate. 
  
 “Good Reason” means, without the Grantee’s express written consent, the occurrence of any one or more of the following: 
  

	 	(i)	A material and substantial reduction in the nature or status of the Grantee’s authorities or responsibilities (when such authorities and/or responsibilities are viewed in the
aggregate) from their level in effect on the day immediately prior to the start of the Protected Period, other than (A) an inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Grantee, and/or
(B) changes in the nature or status of the Grantee’s authorities or responsibilities that, in the aggregate, would generally be viewed by a nationally-recognized executive placement firm as resulting in the Grantee having not materially
and substantially fewer authorities and responsibilities (taking into consideration the Company’s industry) when compared to the authorities and responsibilities applicable to the position held by the Grantee immediately prior to the start of
the Protected Period. The Company may retain a nationally-recognized executive placement firm for purposes of making the determination required by the preceding sentence and the written opinion of the firm thus selected shall be conclusive as to
this issue. 

  

 4 

 In addition, if the Grantee is a vice president, the Grantee’s loss of vice-president status will
constitute “Good Reason”; provided that the loss of the title of “vice president” will not, in and of itself, constitute Good Reason if the Grantee’s lack of a vice president title is generally consistent with the manner in
which the title of vice president is used within the Grantee’s business unit or if the loss of the title is the result of a promotion to a higher level office. For the purposes of the preceding sentence, the Grantee’s lack of a
vice-president title will only be considered generally consistent with the manner in which such title is used if most persons in the business unit with authorities, duties, and responsibilities comparable to those of the Grantee immediately prior to
the commencement of the Protected Period do not have the title of vice-president. 
  

	 	(ii)	A reduction by the Company in the Grantee’s annualized rate of base salary as in effect on the first to occur of the Date of Grant or the start of the Protected Period, or as
the same shall be increased from time to time. 

  

	 	(iii)	A material reduction in the aggregate value of the Grantee’s level of participation in any of the Company’s short and/or long-term incentive compensation plans (excluding
stock-based incentive compensation plans), employee benefit or retirement plans, or policies, practices, or arrangements in which the Grantee participates immediately prior to the start of the Protected Period; provided;, however, that
a reduction in the aggregate value shall not be deemed to be “Good Reason” if the reduced value remains substantially consistent with the average level of other employees who have positions commensurate with the position held by the
Grantee immediately prior to the start of the Protected Period. 

  

	 	(iv)	A material reduction in the Grantee’s aggregate level of participation in the Company’s stock-based incentive compensation plans from the level in effect immediately prior
to the start of the Protected Period; provided, however, that a reduction in the aggregate level of participation shall not be deemed to be “Good Reason” if the reduced level of participation remains substantially consistent with the
average level of participation of other employees who have positions commensurate with the position held by the Grantee immediately prior to the start of the Protected Period. 

  

	 	(v)	The Grantee is informed by the Company that his or her principal place of employment for the Company will be relocated to a location that is greater than fifty (50) miles away
from the Grantee’s principal place of employment for the Company at the start of the corresponding Protected Period; provided that, if the Company communicates an intended effective date for such relocation, in no event shall Good Reason exist
pursuant to this clause (v) more than ninety (90) days before such intended effective date. 

  
 The Grantee’s right to terminate employment for Good Reason shall not be affected by the Grantee’s incapacity due to physical or mental illness.
The Grantee’s continued employment shall not constitute a consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason herein. 
  
 “Parent” is used as defined in the Plan. 
  
 “Plan” means the Northrop Grumman 2001 Long-Term Incentive Stock Plan, as it may be amended form time to
time. 
  
 The “Protected Period” corresponding
to a Change in Control of the Company shall be a period of time determined in accordance with the following: 
  

	 	(i)	If the Change in Control is triggered by a tender offer for shares of the Company’s stock or by the offeror’s acquisition of shares pursuant to such a tender offer, the
Protected Period shall commence on the date of the initial tender offer and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period commence earlier than the date that is six
(6) months prior to the Change in Control. 

  

	 	(ii)	If the Change in Control is triggered by a merger, consolidation, or reorganization of the Company with or involving any other corporation, the Protected Period shall commence on
the date that serious and substantial discussions first take place to effect the merger, consolidation, or reorganization and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period
commence earlier than the date that is six (6) months prior to the Change in Control. 

  

	 	(iii)	In the case of any Change in Control not described in clause (i) or (ii) above, the Protected Period shall commence on the date that is six (6) months prior to the
Change in Control and shall continue through and include the date of the Change in Control. 

  
 “Retirement” or “Retire” means that the Grantee terminates employment after attaining age 55 with at least 10 years of
service (other than in connection with a termination by the Company or a subsidiary for cause). In the case of a Grantee who is an officer of the Company subject to the Company’s mandatory retirement at age 65 policy, “Retirement” or
“Retire” shall also include as to that Grantee (without limiting the Grantee’s ability to Retire pursuant to the preceding sentence) a termination of the Grantee’s employment pursuant to such mandatory retirement policy
(regardless of the Grantee’s years of service and other than in connection with a termination by the Company or a subsidiary for cause). 
  
 “Successor” means the person acquiring a Grantee’s rights to a grant under the Plan by will or by the laws of descent or
distribution. 
  

 5BNSF Railway Company Incentive Compensation Plan as amended and restated

 Exhibit 10.2 
  
 BNSF RAILWAY COMPANY 
 Incentive Compensation
Plan 
 Amended and Restated Effective January 1, 2006 
  

	1.0	OBJECTIVE 

  
 The BNSF Railway Company (“BNSF Railway” or the “Company”) Incentive Compensation Plan (“ICP” or the “Plan”) has as its objective to: 
  

	 	1.1	Communicate and focus attention on key BNSF Railway business goals. 

  

	 	1.2	Identify and reward superior performance. 

  

	 	1.3	Provide a competitive compensation package to attract and retain high quality employees. 

  

	2.0	ADMINISTRATION 

  
 The ICP Committee shall provide overall administration of the Plan. The ICP Committee shall be comprised of the Chief Executive Officer, the Executive
Vice President and CFO, the Executive Vice President Law & Government Affairs and Secretary, and the Vice President-Human Resources and Medical. 
  
 The ICP Committee will have discretionary authority to review and approve any changes in eligibility, levels of participation, incentive opportunity,
basis for award determination, performance objectives, etc., subject to other requirements of the Plan. Review and approval of Plan details will be performed on an annual basis. 
  
 The ICP Committee will appoint a plan administrator whose responsibility to the ICP Committee will include: 
  

	 	2.1	Establishment of procedures for the Plan operation. 

  

	 	2.2	Timely and effective management of the day-to-day operations of the Plan. 

  

	 	2.3	Performance of periodic analyses to ensure the Plan’s effectiveness. 

  

	3.0	ELIGIBILITY 

  
 All regularly assigned, active salaried employees of BNSF Railway and its rail subsidiaries shall be eligible to participate in the ICP subject to the discretion of the ICP Committee. Employees hired into a salaried
position after October 1, will not be eligible until the next calendar year. The ICP Committee shall designate an employee’s level of participation. The extent of participation in the ICP may vary according to the employee’s level of
responsibility. Depending on one’s level within the organization and departmental discretion, some percentage of an employee’s payout potential may be based upon achievement of personal goals. 

	 	3.1	ICP eligibility of newly hired salaried employees or scheduled employees promoted to a salaried position will be treated as follows: 

  

	 	3.1.1	A new employee hired into an eligible position on or before October 1 will be eligible to participate in the current calendar year. 

  

	 	3.1.2	A scheduled employee promoted to a regularly assigned salaried position on or before October 1 will be eligible to participate in the current calendar year.

  

	 	3.1.3	The ICP award for a new salaried employee or a scheduled employee promoted into an eligible position for the first time, on or before October 1, will be prorated based upon the
number of days worked in active service in the eligible position. 

  

	 	3.2	Promotions, transfers, and assignments of active employees to temporary, part-time, red-circle or other similar salary band continuation status will be treated in the following
manner: 

  

	 	3.2.1	A scheduled employee placed on temporary assignment to a salaried position will not be eligible for an ICP payout. 

  

	 	3.2.2	A regularly-assigned salaried employee placed on a temporary assignment to another salaried position of a higher salary band will maintain his/her regularly assigned position’s
ICP participation level. 

  

	 	3.2.3	A regularly-assigned salaried employee promoted (or demoted) from one position to another with a higher (or lower) ICP participation level will have his/her ICP award calculated on
a pro-rata basis for the number of days employed at each level. 

  

	 	3.2.4	A regularly-assigned salaried employee who is assigned for all or a portion of the year to a part-time position will have his/her ICP award calculated on a pro-rata basis for the
number of days employed at each ICP participation level and full-time-equivalency level. 

  

	 	3.2.5	A regularly-assigned salaried employee who has red-circle or other similar salary band continuation status at a higher salary band will have his/her ICP award calculated on a
pro-rata basis at the ICP participation level of the higher salary band for the number of days of red-circle or other similar salary band continuation status and at the ICP participation level of the assigned band for the number of days without such
status. 

  

	 	3.3	ICP eligibility with respect to voluntary and involuntary separation will be determined as follows: 

  

 2 

	 	3.3.1	VOLUNTARY RESIGNATIONS 

  

	 	3.3.1(a)	If a participating employee voluntarily resigns after December 31, but before award payout, the amount that would have otherwise been received had there been no resignation
will be paid to the employee. 

  

	 	3.3.1(b)	If a participating employee voluntarily resigns on or before December 31, and is not eligible for participation in a company-sponsored severance program, the employee forfeits
all rights to an ICP award. 

  

	 	3.3.1(c)	If a participating employee voluntarily resigns in conjunction with a Company-sponsored severance program, the participant is eligible to receive a pro-rata share of the ICP award
he/she would otherwise have earned based upon the number of days worked in active service during the severance year. 

  

	 	3.3.2	INVOLUNTARY SEPARATION 

  

	 	3.3.2(a)	If a participating employee is terminated for cause, the participant forfeits all rights to an ICP award. Cause shall be defined by the ICP Committee. 

  

	 	3.3.2(b)	If a participating employee is terminated at the discretion of the Company as part of a Company-sponsored severance program and other than for cause, the participant is eligible to
receive a pro-rata share of the ICP award he/she would otherwise have earned based upon the number of days worked in active service during the severance year. 

  

	 	3.4	ICP eligibility with respect to the following events will be determined as indicated. 

  

	 	    	MISCELLANEOUS EVENTS AFFECTING ELIGIBILITY 

  

	 	3.4.1	Retirement—The participant is eligible to receive a pro-rata share of the ICP award he/she would otherwise have earned based upon the number of days’ service prior to
retirement. 

  

	 	3.4.2	Disability—A participating employee on short-term disability is eligible to receive the full ICP payout. A participating employee who is placed on long-term disability
(“LTD”) is eligible to receive a pro-rata share of the ICP award he/she would have earned based upon the number of days’ of otherwise eligible service accrued prior to being placed on LTD. No ICP eligibility accrues for any employee
while on LTD, but eligibility will be reinstated should the employee be removed from LTD and return to an active, regularly-assigned salaried position. 

  

 3 

	 	3.4.3	Medical Leave—A participating employee on short-term paid medical leave is eligible to receive the full ICP payout. An employee on unpaid medical leave will be ineligible to
receive an ICP payout for those days comprising the unpaid medical leave period. The employee will receive a pro-rata ICP payout based upon the total of all otherwise eligible salaried service during the year, excluding the days on unpaid medical
leave of absence. 

  

	 	3.4.4	Suspension—A participating employee suspended (without pay) for disciplinary reasons is ineligible to receive an ICP payout for any and all days comprising the suspension
period. 

  

	 	3.4.5	Leave of Absence with Pay—A participating employee on leave of absence with pay is entitled to receive the full ICP payout. 

  

	 	3.4.6	Leave of Absence without Pay—A participating employee on leave of absence without pay will be ineligible to receive an ICP payout for those days comprising the unpaid leave
period. The employee will receive a pro-rata ICP payout based upon the total of all otherwise eligible salaried service during the year, excluding the days on unpaid leave of absence. 

  

	 	3.4.7	Military Leave—A participating employee on paid military leave is entitled to the full ICP payout. An employee on unpaid military leave will be ineligible to receive an ICP
payout for those days comprising the unpaid military leave period. The employee will receive a pro-rata ICP payout based upon the total of all otherwise eligible salaried service during the year, excluding the days on unpaid military leave of
absence. 

  

	 	3.4.8	Death—A pro-rata share of the ICP award the participant would otherwise have earned will be paid to the deceased employee’s estate based upon the total number of days of
eligible service during the award year. 

  

	 	3.4.9	Seniority Exercise—A participating employee who exercises his/her seniority at any time during the year forfeits all rights to an ICP award for that year except under
circumstances when an employee exercises seniority in lieu of a severance package which had been offered to the employee. 

  

	 	3.4.10	Position Abolishment—If the Company abolishes a participating salaried employee’s position and the Company offers a severance package, the participant is eligible to
receive a pro-rata share of the ICP award he/she would otherwise have earned based upon the number of days’ service prior to abolishment. 

  

	 	3.4.11	The ICP Committee may, at its discretion, decide to pay all or a portion of the award a participant would otherwise have earned when termination occurs under any subsection to
Section 3.0 ELIGIBILITY. 

  

 4 

 For purposes of Section 3.0, a pro-rata share of the ICP award a participant would otherwise have
earned shall be based upon the nearest whole number of days in active service during the award year. Performance awards for eligible persons terminating employment during the award year shall be based on actual Company and individual performance
through the full year and will be payable at the payment date for continuing employees. 
  

	4.0	INCENTIVE OPPORTUNITIES 

  
 The incentive awards will be designed to reflect the position’s impact on BNSF Railway performance and will provide incentives that are in line with
key competitors. Incentive levels will be determined and communicated to employees on an annual basis. 
  

	5.0	INCENTIVE AWARD BASES 

  
 The ICP Committee shall annually review the mix of Company goals and individual or departmental goals (defined further in Section 6.0) and may modify
them at its discretion. 
  

	6.0	PERFORMANCE OBJECTIVES 

  
 Payments of ICP awards shall be based on performance measured against objectives established by the Compensation and Development Committee of the Board of
Directors of Burlington Northern Santa Fe Corporation (“BNSF Corporation”). 
  

	 	6.1.	COMPANY-WIDE GOALS 

  
 Company-wide performance objectives shall be established at the beginning of each year for BNSF Railway. 
  

	 	6.2.	PERSONAL AND DEPARTMENTAL GOALS 

  
 If the ICP Committee determines that departments may have departmental or personal goals, then each department may establish its own departmental goals
and assign them to some or all departmental employees. The department may also establish personal goals for selected employees to be accomplished in addition to or in lieu of any departmental goals. 
  
 The personal goals element of the ICP is intended to be used by the immediate
supervisor of an employee whose salary band is a level approved by the ICP Committee to have personal goals assigned as part of an employee’s plan participation. In such circumstances, the manager may deem it necessary or desirable to encourage
the planning and review of written individual objectives in order to accomplish the following: 
  

	 	6.2.1	Provide a system whereby senior management and subordinates mutually agree on important objectives to be attained. 

  

 5 

	 	6.2.2	Provide an opportunity for regular review and feedback regarding progress towards stated objectives. 

  

	 	6.2.3	Introduce a discretionary element into the ICP to give senior management greater flexibility in ensuring that the ICP accomplishes its basic purposes. 

  
 At the beginning of each year for which there are to be personal goals, it is
recommended that approximately two goals be mutually agreed upon by the participating employee and his/her immediate supervisor. These objectives are to represent specific accomplishments desired within the framework of the responsibilities of the
participating employee, or could represent specific goals beyond the scope of the employee’s usual job requirements. Objectives may be related solely to one individual, or may relate to a group of two or more individuals whose efforts are
required to complete a common task. Objectives may apply to the full year, or to a portion of the year, as appropriate. Each objective shall be designed to be measurable and attainable, but not without significant effort. 
  
 Personal goals, when they apply, will be established for each participating
employee by the employee and his or her manager subject to the approval of the department head and the ICP Committee. 
  

	7.0	PERFORMANCE 

  
 Company performance will be reviewed each quarter when quarterly financial and operating results are available. The determination and distribution of awards will occur as soon as practicable after the compilation of
the full year results. 
  
 Senior management and the ICP Committee
shall have the discretion to apply judgment to their performance evaluation at the company, departmental and individual performance levels. Performance shall be evaluated in light of opportunities and conditions prevailing during the measurement
period. 
  

	 	7.1	The ICP Committee shall approve all awards except as described in Section 7.3. 

  

	 	7.2	Subject to Section 7.3, the ICP Committee has the discretion of increasing or decreasing individual or collective awards on any basis including the following considerations:

  

	 	7.2.1	BNSF Railway performance relative to its competitors. 

  

	 	7.2.2	Long term as well as short term performance considerations. 

  

	 	7.2.3	Unforeseen opportunities and obstacles. 

  

	 	7.2.4	The ICP Committee’s judgment of BNSF Railway and individual performance. 

  

 6 

	 	7.3	The awards of all executive officers of BNSF Railway who are also executive officers of BNSF Corporation shall be recommended by the Compensation and Development Committee of the
BNSF Corporation Board of Directors and approved by the BNSF Corporation Board of Directors, provided, however, that the award for the Chief Executive Officer shall be approved by the independent directors on the BNSF Corporation Board of Directors.

  

	8.0	AWARD PAYMENT 

  
 The ICP Committee will select the payment date at its discretion as soon as practicable after the close of the year and completion of performance
evaluations, provided, however, that the payment date shall be no later than the 15th day of the third month
following the close of the year unless unforeseeable events make it impractical to make the payments by such date. ICP awards are subject to all usual tax and withholding requirements. 
  
 To the extent that the Plan and the awards under the Plan are subject to the rules applicable to nonqualified deferred
compensation plans under section 409A of the Code, such portion of the Plan and such awards are not intended to result in acceleration of income recognition or imposition of penalty taxes by reason of section 409A, and the terms of such portion of
the Plan and such awards shall be interpreted in a manner (and such portion of the Plan and such awards will be amended to the extent determined necessary or appropriate by the Committee) to avoid such acceleration and penalties. 
  
 NOTE: If the Company fails to meet its financial threshold objectives, then
no ICP awards (companywide, departmental, or individual) shall be due or payable for that year above 200 percent of target for each non-financial measure except to the extent that the ICP Committee shall decide, in its discretion, that ICP awards
shall nevertheless be paid above that level (provided, however, that with respect to any employees who are executive officers of BNSF Corporation, the Compensation and Development Committee and the Board of Directors of BNSF Corporation must concur
in this decision, provided, however, that in the case of the Chief Executive Officer, only the independent directors on the BNSF Corporation Board of Directors must concur in this decision). 
  

	9.0	COMMUNICATIONS 

  
 The Plan administrator, under the direction of the ICP Committee, shall be responsible for maintaining records and communicating information concerning
the ICP. 
  

	10.0	TERMINATION OR AMENDMENT 

  
 The ICP shall remain in effect until terminated or ended by the Board of Directors or the ICP Committee. However, if a Change in Control shall have
occurred during the term of this Plan, this Plan shall continue in effect through the end of the year in which such Change in Control occurred, during which time the Company is contractually bound to maintain the Plan, and provided further that the
membership of the Committee cannot be changed during such period. 
  
 A “Change in Control” shall be deemed to have occurred if 
  

 7 

	 	(a)	any “person”, as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than BNSF
Corporation, any trustee or other fiduciary holding securities under an employee benefit plan of BNSF Corporation, or any company owned, directly or indirectly, by the stockholders of BNSF Corporation in substantially the same proportions as their
ownership of stock of BNSF Corporation), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of BNSF Corporation representing 25% or more of the combined voting
power of BNSF Corporation’s then outstanding securities; 

  

	 	(b)	during any period of two consecutive years (not including any period prior to the effective date of this provision), individuals who at the beginning of such period constitute the
Board of BNSF Corporation, and any new director (other than a director designated by a person who has entered into an agreement with BNSF Corporation to effect a transaction described in clause (a), (c) or (d) of this definition) whose
election by the Board of BNSF Corporation or nomination for election by BNSF Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; 

  

	 	(c)	the stockholders of BNSF Corporation approve a merger or consolidation of BNSF Corporation with any other company other than (i) a merger or consolidation which would result in
the voting securities of BNSF Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 80% of the combined voting power
of the voting securities of BNSF Corporation (or such surviving entity) outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of BNSF Corporation (or similar
transaction) in which no “person” (as hereinabove defined) acquires more than 25% of the combined voting power of BNSF Corporation’s then outstanding securities; or 

  

	 	(d)	 the stockholders of BNSF Corporation adopt a plan of complete liquidation of BNSF Corporation or approve an agreement for the sale or disposition by BNSF
Corporation of all or substantially all of BNSF Corporation’s assets. For purposes of this clause (d), the term “the sale or disposition by BNSF Corporation of all or substantially all of BNSF Corporation’s assets” shall mean a
sale or other disposition transaction or series of related transactions involving assets of BNSF Corporation or of any direct or indirect subsidiary of BNSF Corporation (including the stock of any direct or indirect subsidiary of BNSF Corporation)
in which the value of the assets or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefore or by such other method as the Board of Directors of BNSF Corporation determines is appropriate in a case where
there is no readily ascertainable purchase price) constitutes more than two-thirds of the fair market value of BNSF Corporation (as hereinafter defined). For 

  

 8 

	 	 
purposes of the preceding sentence, the “fair market value of BNSF Corporation” shall be the aggregate market value of BNSF Corporation’s
outstanding shares of common stock (on a fully diluted basis) plus the aggregate market value of BNSF Corporation’s other outstanding equity securities. The aggregate market value of the shares of BNSF Corporation’s common stock (on a
fully diluted basis) outstanding on the date of the execution and delivery of a definitive agreement with respect to the transaction or series of related transactions (the “Transaction Date”) shall be determined by the average closing
price for BNSF Corporation’s common stock for the ten trading days immediately preceding the Transaction Date. The aggregate market value of any other equity securities of BNSF Corporation shall be determined in a manner similar to that
prescribed in the immediately preceding sentence for determining the aggregate market value of the shares of BNSF Corporation’s common stock or by such other method as the Board of Directors of BNSF Corporation shall determine is appropriate.

  
 Subject to Section 10.0 hereof, BNSF
Railway and its subsidiaries reserve the right to change Plan provisions or terminate the Plan at any time. 
  

	11.0	EFFECTIVE DATE 

  
 The Amended and Restated ICP is effective January 1, 2006. 
  

	12.0	NON-DUPLICATION OF BENEFITS 

  
 The ICP is in place of the Burlington Northern Santa Fe Incentive Compensation Plan effective as of January 1, 1996, and there shall be no
duplication of benefits under such plan and the ICP. 
  

 9

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