Document:

EX-10(V) Form of Employment Continuation Agt

 

Exhibit 10(v)

AMENDED AND RESTATED EMPLOYMENT CONTINUATION AGREEMENT

                           This AMENDED AND RESTATED EMPLOYMENT CONTINUATION AGREEMENT (this
“Agreement”), is made and entered into as of [DATE], by TRW INC., an Ohio
corporation (the “Company”), and                     (the “Executive”).

W I T N E S S E T H :

                  WHEREAS, the Executive presently is the                     of the
Company and has made and is expected to continue to make major contributions to
the profitability, growth and financial strength of the Company;

                  WHEREAS, the Company recognizes that, as is the case with many publicly-
held companies, the possibility of a Change in Control (as that term is
hereafter defined) exists;

                  WHEREAS, the Company wishes to assure itself of both present and future
continuity of management in the event of any Change in Control;

                  WHEREAS, the Company wishes to ensure that certain of its executives are
not practically disabled from discharging their duties upon a Change in
Control;

                  WHEREAS, the Company and the Executive are parties to an Employment
Continuation Agreement (the “Prior Agreement”) providing certain benefits in
the event of a Change in Control and the Company and the Executive desire to
amend and restate the Prior Agreement; and

                  WHEREAS, although effective and binding as of the date hereof, this
Agreement shall become operative only upon the occurrence of a Change in
Control;

                  NOW, THEREFORE, the Company and the Executive agree as follows:

                  1.      Operation of the Agreement.

                           (a) This Agreement shall be effective and binding immediately upon its
execution, but anything in this Agreement to the contrary notwithstanding
(except for the provisions of Section 1(d)), this Agreement shall not be
operative unless and until there shall have occurred a Change in Control. For
purposes of this Agreement, a “Change in Control” shall have occurred if at any
time during the Term (as that word is hereafter defined) any of the following
events shall occur:

		
	 	                           (i) The Company or any direct or indirect subsidiary of the Company
is merged or consolidated or reorganized into or with another
corporation or other legal person and as a result of such merger,
consolidation or reorganization the securities of the Company entitled to
vote generally in the election of Directors (“Voting Stock”) outstanding
immediately prior to such 

 

 

		
	 	merger, consolidation or reorganization do not
continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof) at least 51% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof outstanding
immediately after such merger, consolidation or reorganization;
	 
	 	                           (ii) The Company sells or otherwise transfers all or substantially
all of its assets to any other corporation or other legal person if less
than 51% of the combined voting power of the then-outstanding Voting
Stock of such corporation or person immediately after such sale or
transfer is held in the aggregate by the holders of Voting Stock of the
Company immediately prior to such sale or transfer;
	 
	 	                           (iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to
the Securities Exchange Act of 1934 (the “Exchange Act”), disclosing that
any person (as the term “person” is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has acquired beneficial ownership (as the
term “beneficial ownership” is defined under Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act) of securities
representing 20% or more of the then-outstanding Voting Stock of the
Company, other than pursuant to any acquisition of securities by the
Company or any of its subsidiaries;
	 
	 	                           (iv) The Company shall file a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Item 1 of Form 8-K thereunder or Item 6(e) of
Schedule 14A thereunder (or any successor schedule, form or report or
item therein) that a change in control of the Company has occurred; or
	 
	 	                           (v) The following individuals cease for any reason to constitute at
least a majority of the number of directors then serving: individuals
who, on February 28, 2002, constitute the Directors of the Company and
any new Director of the Company (other than a Director of the Company (A)
whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of Directors of the Company and
(B) who was nominated as a Director of the Company by a person other than
the Company) whose appointment, election or nomination for election by
the Company’s shareholders was approved or recommended by a vote of at
least two-thirds of the Directors of the Company then still in office who
were Directors of the Company on February 28, 2002 or whose appointment,
election or nomination for election was previously so approved or
recommended.

                  Notwithstanding the foregoing provisions of Section 1(a)(iii) and 1(a)(iv)
hereof, a Change in Control shall not be deemed to have occurred for purposes
of this Agreement solely because (A) the Company, (B) an entity in which the
Company directly
or indirectly beneficially owns more than 50% of the voting securities or
(C) any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company, or any entity holding shares of Voting Stock for
or pursuant to the terms

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of any such plan, either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Item 1 of Form 8-K or Item 6(e) of Schedule 14A (or any
successor schedule, form or report or item therein) under the Exchange Act,
disclosing beneficial ownership by it of shares of Voting Stock of the Company,
whether in excess of 20% or otherwise, or because the Company reports that a
change in control of the Company has occurred by reason of such beneficial
ownership by the entities described in clauses (A), (B) and (C) of this
paragraph.

                           (b) Upon the occurrence of a Change in Control at any time during the
Term, this Agreement shall become immediately operative.

                           (c) The period during which this Agreement shall be in effect (the “Term”)
shall commence as of the date hereof and shall expire as of the later of (i)
the close of business on June 1, 200[4] or (ii) the expiration of the Period of
Employment (as that term is hereafter defined); provided, however, that (i)
commencing on June 1, 200[2] and each June 1 thereafter, the Term of this
Agreement shall automatically be extended for an additional year unless, not
later than January 1 of each such year, the Company or the Executive shall have
given notice that it or he, as the case may be, does not wish to have the Term
extended, and (ii) subject to Section 14 hereof, if, prior to a Change in
Control, the Executive ceases for any reason to be an elected officer or
assistant officer of the Company, thereupon the Term shall be deemed to have
expired and this Agreement shall immediately terminate and have no further
effect.

                           (d) The Executive agrees that from and after February 28, 2002, the
definition of Change in Control set forth in this Agreement shall apply for
purposes of all outstanding equity-based and other long-term incentive awards
held by the Executive (including, but not limited to, stock options, restricted
stock, restricted stock units and awards under the Company’s Strategic
Incentive Program (“SIP”)) which contain change in control provisions.

                  2.      Employment; Period of Employment.

                           (a) Subject to the terms and conditions of this Agreement, upon the
occurrence of a Change in Control, the Company shall continue the Executive in
its employ and the Executive shall remain in the employ of the Company for the
period set forth in Section 2(b) below (the “Period of Employment”), with the
duties and responsibilities set forth in Schedule A hereto and any additional
duties and responsibilities that he may have immediately prior to the Change in
Control or to which the Company and the Executive may hereafter mutually agree
in writing. So long as the Executive remains in the employ of the Company, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of the Company as in effect for executives immediately prior to
the Change in Control) to the business and affairs of the Company, but nothing
in this Agreement shall preclude the Executive from devoting reasonable periods
of time during normal business hours to (i) serving as a director, trustee or
member of or participant in any organization or business so long as such
activity would not constitute Competitive Activity (as that term is
hereafter defined), (ii) engaging in charitable and community activities or
(iii) managing his personal affairs.

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                           (b) The Period of Employment shall commence on the date of the occurrence
of a Change in Control and, subject only to the provisions of Section 4 hereof,
shall continue until the earlier of (i) the Executive’s death; (ii) the
Executive’s attainment of age 65; or (iii) the expiration of the third
anniversary of the occurrence of the Change in Control.

                  3.      Compensation During Period of Employment.

                           (a) Upon the occurrence of a Change in Control, the Executive shall
receive during the Period of Employment (i) annual base salary at a rate not
less than the Executive’s annual fixed or base compensation as in effect
immediately prior to a Change in Control or such higher rate as may be
determined from time to time by the Company, payable monthly or otherwise as in
effect immediately prior to a Change in Control (“Base Pay”) and (ii) an annual
amount, payable at the time that annual bonuses are paid to officers of the
Company based on the Company’s practice immediately prior to the Change in
Control, equal to not less than the highest annual aggregate bonuses or
incentive payments of compensation in addition to the amounts referred to in
clause (i) above made or to be made (regardless of when, or in what form, such
compensation is paid) for services rendered in any calendar year during the
three calendar years immediately preceding the year in which a Change in
Control occurred pursuant to any bonus, incentive, profit-sharing or similar
policy, plan, program or arrangement of the Company or any successor thereto
(“Incentive Pay”); provided, however, that nothing herein shall preclude a
change in the mix of Base Pay and Incentive Pay by an increase in the relative
amount of Base Pay, provided that the aggregate compensation received by the
Executive in any one year is not reduced and provided, further, that in no
event shall any increase in the Executive’s aggregate compensation or any
portion thereof in any way diminish any other obligation of the Company under
this Agreement. For the purposes of this Agreement, any compensation the
Executive elected to defer under any policy, plan, program or arrangement shall
be included in the determination of Base Pay and/or Incentive Pay, as
applicable.

                           (b) For his service pursuant to Section 2(a) hereof, during the Period of
Employment the Executive shall be a full participant in any and all employee
retirement income and welfare benefit policies, plans, programs or arrangements
in which executives of the Company participate immediately prior to the Change
in Control or during the Period of Employment, including without limitation the
TRW Salaried Pension Plan (“Retirement Plan”), the TRW Nonqualified
Supplementary Retirement Income Plan (“SRIP”), the TRW Benefits Equalization
Plan (“BEP”), the TRW Supplemental Executive Retirement Plan, the TRW Employee
Stock Ownership and Stock Savings Plan (“ESOSP”), the TRW Long-Term Disability
Benefits Plan (the “Disability Plan”), the TRW Deferred Compensation Plan (the
“DCP”) and any executive automobile, stock option, stock purchase, stock
appreciation, performance improvement, long-term incentive, medical or health,
life insurance, vacation, disability, salary continuation and any other
retirement income or welfare benefit policy, plan, program or arrangement or
any equivalent successor policy, plan, program or arrangement that may now
exist or be adopted hereafter by the Company or any successor thereto providing
benefits and other perquisites at least as great as are payable thereunder
prior to a Change in Control (collectively, “Employee Benefits”). If and to
the extent that any such

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Employee Benefits shall not or cannot be paid or
provided under any policy, plan, program or arrangement of the Company as a
result of the amendment or termination thereof, the Company shall itself pay or
provide therefor. Nothing in this Agreement shall preclude improvement of
reward opportunities in any Employee Benefits, provided that no such
improvement shall in any way diminish any other obligation of the Company under
this Agreement.

                  4.      Termination Following a Change in Control.

                           (a) In the event of the occurrence of a Change in Control, this Agreement
may be terminated by the Company during the Period of Employment only upon the
occurrence thereafter of one or more of the following events:

		
	 	                           (i) If the Executive shall become permanently disabled and begins
actually to receive disability benefits pursuant to the Disability Plan
or any successor plan adopted prior to a Change in Control; or
	 
	 	                           (ii) For “Cause”, which for purposes of this Agreement shall mean
that, prior to any termination pursuant to Section 4(b) hereof, the
Executive shall have committed:

		
	 	                           (A) an act of fraud, embezzlement or theft in connection with
his duties or in the course of his employment with the Company;
	 
	 	                           (B) intentional wrongful damage to the property of the
Company;
	 
	 	                           (C) intentional wrongful disclosure of secret processes or
confidential information of the Company; or
	 
	 	                           (D) intentional wrongful engagement in any Competitive
Activity (as that term is hereafter defined) while the Executive
remains in the employ of the Company;

		
	 	         and any such act shall be determined by the Directors of the Company as
hereafter provided to have been materially harmful to the Company. For
purposes of this Agreement, no act, or failure to act, on the part of the
Executive shall be deemed for “Cause” unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.

                                    Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for “Cause” hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the Directors then in
office at a meeting of the Directors called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before the
Directors), finding that, in the good faith opinion of the Directors, the
Executive had committed an act set forth above in this Section 4(a)(ii) and
specifying the particulars

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thereof in detail; provided, however, that in the
event of a dispute as to whether Cause exists, no claim by the Company that
Cause exists shall be given effect unless the Company establishes by clear and
convincing evidence that Cause exists. Nothing herein shall limit the right of
the Executive or his beneficiaries to contest the validity or propriety of any
such determination.

                           (b) In the event of the occurrence of a Change in Control, this Agreement
may be terminated by the Executive with the right to receive benefits under
Section 5 hereof and, if applicable, Section 6 hereof, only upon the occurrence
thereafter of one or more of the following events:

		
	 	                           (i) Any termination by the Company of the employment of the
Executive during the Period of Employment, unless (x) Cause for
termination shall exist or (y) as a result of the death of the Executive
or (z) by reason of the Executive’s disability and the actual receipt of
disability benefits as provided in Section 4(a)(i) hereof; or
	 
	 	                           (ii) Termination by the Executive of his employment with the Company
during the Period of Employment and upon the occurrence of any of the
following events:

		
	 	                           (A) Failure to elect, reelect or otherwise maintain the
Executive in the office or position in the Company which the
Executive held immediately prior to a Change in Control, or the
removal of the Executive as a Director of the Company (or any
successor thereof) if the Executive shall have been a Director of
the Company immediately prior to the Change in Control or, if the
Executive was an executive officer of the Company immediately
prior to the Change in Control, the failure of the Executive to be
an executive officer of a public company following such Change in
Control;
	 
	 	                           (B) A significant adverse change in the nature or scope of
the authorities, powers, functions, responsibilities or duties in
respect of the Company which the Executive had immediately prior
to the Change in Control, a reduction in the aggregate of the
Executive’s Base Pay and Incentive Pay received from the Company,
or the termination of the Executive’s rights to Employee Benefits
to which he was entitled immediately prior to the Change in
Control or a reduction in scope or value thereof without the prior
written consent of the Executive, any of which is not remedied
within 10 calendar days after receipt by the Company of written
notice from the Executive of such change, reduction or
termination, as the case may be;
	 
	 	                           (C) A determination by the Executive (which determination
will be conclusive and binding upon the parties hereto provided it
has been made in good faith and in all events will be presumed
to have been made in good faith unless otherwise shown by the
Company by clear and convincing evidence) that a change in
circumstances has 

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	 	occurred significantly affecting his position,
including without limitation a change in the scope of the business
or other activities for which he was responsible or a substantial
reduction in any of the resources available to carry out any of
the authorities, powers, functions, responsibilities or duties
that he had immediately prior to the Change in Control, has been
rendered substantially unable to carry out, has been substantially
hindered in the performance of or has suffered a substantial
reduction in any of such authorities, powers, functions,
responsibilities or duties, which situation is not remedied within
10 calendar days after receipt by the Company of written notice
from the Executive of such determination;
	 
	 	                           (D) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or a significant
portion of its business and/or assets unless the successor or
successors (by liquidation, merger, consolidation, reorganization
or otherwise) to which all or a significant portion of its
business and/or assets have been transferred (directly or by
operation of law) shall have assumed all duties and obligations of
the Company under this Agreement pursuant to Section 8 hereof;
	 
	 	                           (E) The relocation of the Company’s principal executive
offices or the requirement by the Company that the Executive
change his principal location of work to any location which is in
excess of 35 miles from his principal location immediately prior
to the Change in Control or travel away from his office in the
course of discharging his responsibilities or duties hereunder
more than 20 consecutive calendar days or an aggregate of more
than 30 calendar days in any consecutive 90 calendar-day period
without in either case his prior written consent; or
	 
	 	                           (F) Without limiting the generality or effect of the
foregoing, any material breach of this Agreement by the Company.

                   The Executive’s continued employment shall constitute consent to, and a
waiver of rights with respect to, any event described in this Section 4(b)(ii)
unless the Executive terminates his employment with the Company within 120 days
after the Executive has actual knowledge of the occurrence of an event
described in this Section 4(b)(ii) that is not remedied as provided herein.
The parties agree that any consent to or waiver of any such event shall not be
deemed to constitute a consent to or waiver of any other circumstance
constituting an event described in this Section 4(b)(ii).

                                    (c) Notwithstanding anything contained in this Agreement to the contrary,
in the event of a Change in Control, the Executive may terminate employment
with the Company for any reason, or without reason, during the 60-day period
immediately following the first anniversary of the first occurrence of a Change
in Control, with the right to severance compensation as provided in Section 5
hereof and, if applicable, Section 6 hereof.

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                                      (d) A termination by the Company pursuant to Section 4(a) hereof or by the
Executive pursuant to Section 4(b) or Section 4(c) hereof shall not affect any
rights which the Executive may have pursuant to any other agreement, policy,
plan, program or arrangement of the Company providing Employee Benefits, which
rights shall be governed by the terms thereof; provided, however, that if the
Executive shall have received or shall be receiving benefits under Section 5
hereof and, if applicable, Section 6 hereof, the Executive shall not be
entitled to receive benefits under any other policy, plan, program or
arrangement of the Company providing severance compensation to which the
Executive would otherwise be entitled. If this Agreement or the employment of
the Executive is terminated under circumstances in which the Executive is not
entitled to any payments under Sections 3 or 5 hereof, the Executive shall have
no further obligation or liability to the Company hereunder with respect to his
prior or any future employment by the Company.

                                    (e) The Company shall provide the Executive with timely notice of any of
the events referred to in Section 4(b)(ii)(D) hereof so that a determination
can be made as to the assumption of duties and obligations by any successor or
successors.

                  5.      Severance Compensation.

                           (a) If, following the occurrence of a Change in Control, the Company shall
terminate the Executive’s employment other than pursuant to Section 4(a)
hereof, or if the Executive shall terminate his employment pursuant to Section
4(b) or Section 4(c) hereof:

		
	 	                           (i) The Company shall pay or cause to be paid to the Executive,
within five business days after the effective date of any such
termination (the “Termination Date”), in lieu of any further payments to
the Executive for the portion of the Period of Employment subsequent to
the Termination Date, but without affecting the rights of the Executive
referred to in Section 5(b) hereof and the Executive’s rights at law or
in equity (other than rights to damages for termination of his employment
or this Agreement), a lump sum severance payment (the “Severance
Payment”) equal to the present value (to be determined by the Accounting
Firm, as defined in Section 6(b) hereof, using a discount rate equal to
the applicable interest rate promulgated by the Internal Revenue Service
“IRS” under Section 417(e)(3) of the Code for the third month preceding
the month in which the Termination Date occurs, and if the IRS ceases to
promulgate such interest rates, the last such interest rate so
promulgated) of the sum of (A) the aggregate Base Pay (at the highest
rate in effect at any time during the Period of Employment or immediately
prior to the Change in Control) which the Executive would have received
pursuant to this Agreement for (x) each remaining year or fraction
thereof during the Period of Employment or (y) two years, whichever is
the longer period, had his employment with the Company continued for the
longer of such periods; plus (B) the aggregate Incentive Pay (based upon
the highest annual aggregate Incentive Pay that the Executive
received (or fully earned) 

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	 	with respect to any calendar year during
the three calendar years immediately preceding the calendar year in which
the Change in Control occurred or the Incentive Pay that the Executive
received (or fully earned) with respect to the calendar year preceding
the calendar year in which the Termination Date occurs, whichever is the
larger amount) which the Executive would have received (or fully earned)
pursuant to this Agreement with respect to (x) each remaining year or
fraction thereof during the Period of Employment or (y) two years,
whichever is the longer period, had his employment with the Company
continued for the longer of such periods; plus (C) the cash value of all
Employee Benefits, other than stock option, stock purchase, stock
appreciation or similar equity and long-term incentive benefits and other
than Employee Benefits providing Base Pay, Incentive Pay and the Employee
Benefits to be provided pursuant to Sections 5(a)(ii) and 5(a)(iv) hereof
(based upon the highest annual aggregate rate that the Executive received
Employee Benefits with respect to any calendar year during the three
calendar years immediately preceding the calendar year in which the
Change in Control occurred or the Employee Benefits that the Executive
received with respect to the calendar year preceding the calendar year in
which the Termination Date occurs, whichever is the larger amount), which
the Executive would have received pursuant to this Agreement with respect
to (x) each remaining year or fraction thereof during the Period of
Employment or (y) two years, whichever is the longer period, had his
employment with the Company continued for
the longer of such periods;
	 
	 	                           (ii) The Company shall pay or cause to be paid to the Executive,
within five business days after the Termination Date, a lump sum payment
equal to the sum of the following:

		
	 	                           (A) The present value of the benefit that would be payable to
the Executive from the SRIP, commencing at the earliest time
permissible under the SRIP, assuming, solely for the purposes of
the SRIP (but not for purposes of the Retirement Plan), that (I)
the SRIP contained no vesting requirements, (II) the Executive was
credited with additional service with the Company equal to the
remaining Period of Employment or two years, whichever is the
longer period, (III) the Executive’s age was increased in an
amount equal to the remaining Period of Employment or two years,
whichever is the longer period, and (IV) the Executive’s final
average compensation was determined by including the compensation
that would have been paid to the Executive for a period equal to
the remaining Period of Employment or two years, whichever is the
longer period, had his employment with the Company continued for
the longer of such periods, if the Executive’s annual compensation
for such period was the sum of the amounts described in Sections
5(a)(i)(A) and 5(a)(i)(B) and such amounts were included as
compensation for purposes of the SRIP, such present value to be
determined using the applicable mortality table promulgated by the
IRS under Section 417(e)(3) of the Code in effect on the
Termination Date and the applicable interest rate promulgated by
the IRS under Section 417(e)(3) of the Code for the third month
preceding the month in which the Termination Date occurs,
and if the IRS ceases to promulgate such interest rates, the
last such interest rate so promulgated. The Executive hereby
waives, in 

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	 	consideration of, and subject to receipt of, the
payment contemplated by this Section 5(ii)(A), any payments under
the provisions of the SRIP.
	 
	 	                           (B) The amount credited to the Executive’s Account (as such
term is defined in the BEP) under the BEP. The Executive hereby
waives, in consideration of, and subject to receipt of, the
payment contemplated by this Section 5(ii)(B), any payments under
the provisions of the BEP.
	 
	 	                           (C) The amount of TRW Matching Contributions (as such term is
defined in the ESOSP) that would have been contributed to the
ESOSP on behalf of the Executive for the remaining Period of
Employment or two years, whichever is the longer period, had his
employment with the Company continued for the longer of such
periods, if (I) the Executive’s employment had not been
terminated, (II) the Executive had received Base Pay and Incentive
Pay during such period at the rates or in the amounts described in
Section 5(a)(i) hereof, (III) the ESOSP did not contain provisions
implementing the requirements of Sections 401(a)(4), 401(a)(17),
401(k), 401(m), 402(g), and 415 of the Code or any other
provisions of the Code limiting the amount of contributions that
may be made to the ESOSP by or on behalf of the Executive and (IV)
the Executive had elected to contribute the maximum amount of
Before-Tax Contributions (as such term is defined in the ESOSP)
permitted to be contributed to the ESOSP for such period.
	 
	 	                           (D) The amounts (including interest through the Termination
Date) credited to the Executive’s Account (as such term is defined
in the DCP) under the DCP. The Executive acknowledges that the
Executive’s receipt of the payment contemplated by this Section
5(a)(ii)(D) shall discharge the Company’s obligations to the
Executive under the DCP.

                     The Executive and the Company acknowledge that references in this Section
5(a)(ii) to the Retirement Plan, the ESOSP, the BEP, the SRIP and the DCP shall
be deemed to be references to such plans as amended or restated from time to
time and to any similar plan of the Company that supplements or supersedes any
such plans; provided that any amendment following a Change in Control that
reduces benefits under the Retirement Plan, the ESOSP, the BEP, the SRIP or the
DCP (or any similar plan of the Company that supplements or supersedes any of
such plans) in any way (including without limitation by reducing the rate of
benefit accruals or contribution levels under any of such plans, or by changing
the basis upon which actuarial equivalents are determined under any such plans)
shall be disregarded for purposes of this Section 5(a)(ii). In addition, the
Executive and the Company acknowledge that references in this Section 5 to any
Section of the Code shall be deemed to be references to such Section as amended
from time to time or to any successor thereto.

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	 	                           (iii) The Company shall pay all legal fees and expenses incurred by
the Executive as a result of such termination (including without
limitation all such fees and expenses, if any, incurred in seeking to
obtain or enforce any right or benefit provided by this Agreement in
accordance with Section 17 hereof); and
	 
	 	                           (iv) The Company shall arrange to provide to the Executive, for the
remainder of the Period of Employment or two years, whichever is the
longer period, with Employee Benefits consisting of life insurance (other
than split-dollar life insurance), medical, health, disability and
similar welfare benefits (and not stock option, stock purchase, stock
appreciation or similar equity or long-term incentive benefits) which the
Executive was receiving or entitled to receive during the Period of
Employment. If and to the extent that any such Employee Benefits shall
not or cannot be paid or provided under any policy, plan, program or
arrangement of the Company (i) solely due to the fact that the Executive
is no longer an officer or employee of the Company or did not continue as
an officer or employee of the Company during the remainder of the Period
of Employment or (ii) as a result of the amendment or termination of any
such Employee Benefit, the Company shall itself pay or provide for the
payment of such Employee Benefits to the Executive, his dependents and
beneficiaries. Without otherwise limiting the purposes or effect of
Section 7 hereof, Employee Benefits payable to the Executive (including
his dependents and beneficiaries) pursuant to this Section 5(a)(iii) by
reason of any “welfare benefit plan” of the Company (as the term “welfare
benefit plan” is defined in Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended) shall be reduced to the extent
comparable welfare benefits are actually received by the Executive
(including his dependents and beneficiaries) from another employer during
such period, and any such benefits actually received by the Executive
shall be reported by the Executive to the Company.

                           (b) Upon a termination of employment as described in Section 5(a) hereof,
the Company shall pay to the Executive, within five business days after the
Termination Date, (i) an amount equal to the product of (A) the Incentive Pay
that would have been payable to the Executive with respect to the entire
calendar year had the Executive’s employment with the Company continued until
the end of such year and (B) a fraction, the numerator of which equals the
number of days in the calendar year through the Termination Date and the
denominator of which equals 365 (the “Pro Rata Fraction”) and (ii) in addition
to any amounts paid or payable under the SIP, an amount equal to the product of
(A) the highest amount earned by the Executive under the SIP (or any successor
thereto) in any single calendar year with respect to grants (or portions
thereof) under such plan that settled in the three calendar years ending with
the year in which the Change in Control occurred (excluding any such grants
that became payable upon a Change in Control) and (B) the Pro Rata Fraction.

                           (c) There shall be no right of set-off or counterclaim in respect of any
claim, debt or obligation against any payment to or benefit for the Executive
provided for in this Agreement.

11

 

                           (d) Without limiting the rights of the Executive at law or in equity, if
the Company fails to make any payment or provide any benefit required to be
made or provided hereunder on a timely basis, the Company will pay interest on
the amount or value thereof at an annualized rate of interest equal to the
so-called composite “prime rate” as quoted from time to time during the
relevant period in the Northeast Edition of THE WALL STREET JOURNAL, plus three
percent. Such interest will be payable as it accrues on demand. Any change in
such prime rate will be effective on and as of the date of such change.

                           (e) In the event a Change in Control occurs, the Company shall deposit in
trust, pursuant to certain trust agreements to which the Company shall be a
party, cash or other property in such an amount as necessary to assure the
payment of the amounts due to the Executive under this Agreement. Any failure
by the Company to satisfy any of its obligations under this Section 5(e) shall
not limit the rights of the Executive hereunder. Notwithstanding the foregoing,
the Executive shall have the status of a general unsecured creditor of the
Company and shall have no right to, or security interest in, any assets of the
Company.

                  6.      Certain Additional Payments by the Company.

                           (a) Anything in this Agreement to the contrary notwithstanding, in the
event that this Agreement shall become operative, whether or not the
Executive’s employment with the Company subsequently terminates, and it shall
be determined (as hereafter provided) that any payment or distribution by the
Company to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a “Payment”), would be subject to the excise tax imposed by Section
4999 (or any successor thereto) of the Code, or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereafter collectively referred to as the “Excise Tax”),
then the Executive shall be entitled to receive an additional payment or
payments (collectively, a “Gross-Up Payment”); provided, however, that no
Gross-Up Payment shall be made with respect to the Excise Tax, if any,
attributable to (i) any incentive stock option, as defined by Section 422 of
the Code (“ISO”) granted prior to the execution of this Agreement, or (ii) any
stock appreciation or similar right, whether or not limited, granted in tandem
with any ISO described in clause (i). The Gross-Up Payment shall be in an
amount such that, after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

                           (b) Subject to the provisions of Section 6(e) hereof, all determinations
required to be made under this Section 6, including whether an Excise Tax is
payable by the Executive and the amount of such Excise Tax and whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by a nationally recognized firm of certified public accountants (the
“Accounting Firm”) selected by the Executive in his sole discretion. The
Executive shall direct the Accounting Firm to submit its determination and
detailed supporting calculations to both the Company and the Executive within
15 calendar days after the Termination Date, if applicable, or such earlier
time or times as may be requested by the Company or the

12

 

 Executive. If the Accounting Firm determines that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up Payment
to the Executive within five business days after receipt of the aforesaid
determination and calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the same time as it makes
such determination, furnish the Executive with an opinion that he has
substantial authority not to report any Excise Tax on his federal income tax
return. Any determination by the Accounting Firm as to the amount of the
Gross-Up Payment to be paid by the Company within such 15 calendar-day period
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 (or any successor thereto) of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 6(e) thereof and the Executive
thereafter is required to make a payment of any Excise Tax, the Executive shall
direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations
to both the Company and the Executive as promptly as possible. Any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive within three calendar days after receipt of such determination and
calculations.

                           (c) The Company and the Executive shall each cooperate with the Accounting
Firm in connection with the preparation and issuance of the determination
provided for in Section 6(b) hereof. Such cooperation shall include without
limitation providing the Accounting Firm access to and copies of any books,
records and documents in the possession of the Company or the Executive, as the
case may be, that are reasonably requested by the Accounting Firm.

                           (d) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations provided for in Section
6(b) hereof shall be paid by the Executive. The Company shall reimburse the
Executive for his payment of such costs and expenses within five business days
after receipt from the Executive of a statement therefor and evidence of his
payment thereof.

                           (e) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive receives
notice of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the earlier of (i) the expiration of the 30
calendar-day period following the date on which it gives such notice to the
Company or (ii) the date that any payment of taxes with respect to such claim
is due. If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

		
	 	                           (i) give the Company any information reasonably requested by the
Company relating to such claim;

13

 

		
	 	                           (ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including without limitation accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company;
	 
	 	                           (iii) cooperate with the Company in good faith in order effectively
to contest such claim; and
	 
	 	                           (iv) permit the Company to participate in any proceedings relating
to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 6(e), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conference with the
taxing authority in respect of such claim (but the Executive may participate
therein at his own cost and expense) and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
the tax claimed and sue for a refund, the Company shall advance the amount of
such payment to the Executive on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto, imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of such
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

                           (f) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 6(e) hereof, the Executive receives any refund with
respect to such claim, the Executive shall (subject to the Company’s complying
with the requirements of Section 6(e) hereof) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after any taxes applicable thereto). If, after the receipt by the Executive of
an amount advanced by the Company pursuant to Section 6(e) hereof, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial or refund prior to the expiration
of 30 calendar days after such determination, then such advance shall be
forgiven and shall

14

 

 not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

                  7.      No Mitigation Obligation. The Company hereby acknowledges that it will
be difficult, and may be impossible, for the Executive to find reasonably
comparable employment following the Termination Date. In addition, the Company
acknowledges that its severance pay plans and policies applicable in general to
its salaried employees do not provide for mitigation, offset or reduction of
any severance payment received thereunder. Accordingly, the parties hereto
expressly agree that the payment of the severance compensation by the Company
to the Executive in accordance with the terms of this Agreement shall be
liquidated damages and that the Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise, nor shall any profits, income, earnings or other
benefits from any source whatsoever create any mitigation, offset, reduction or
any other obligation on the part of the Executive hereunder or otherwise,
except as expressly provided in Section 5(a)(iv) hereof.

                  8.      Successors and Binding Agreement.

                           (a) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement and each of the Company’s obligations hereunder.
This Agreement shall be binding upon and inure to the benefit of the Company
and any successor of or to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall thereafter
be deemed the “Company” for the purposes of this Agreement), but shall not
otherwise be assignable or delegable by the Company.

                           (b) This Agreement shall insure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees and/or legatees.

                           (c) This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly provided
in Section 8(a) hereof. Without limiting the generality of the foregoing, the
Executive’s right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by his will or by the laws of descent and distribution
and, in the event of any attempted assignment or transfer contrary to this
Section 8(c), the Company shall have no liability to pay to the purported
assignee or transferee any amount so attempted to be assigned or transferred.

                           (d) The Company and the Executive recognize that each party will have no
adequate remedy at law for any material breach by the other of any of the
agreements contained herein and, in the event of any such breach, the Company
and the

15

 

Executive hereby agree and consent that the other shall be entitled to
a decree of specific performance, mandamus or other appropriate remedy to
enforce performance of this Agreement.

                  9.      Notice. For all purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or five business days after having been mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive office and to the Executive at his principal residence,
or to such other address as any party may have furnished to the other in
writing and in accordance herewith, except that notices of change of address
shall be effective only upon receipt.

                  10.      Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflict of laws of such
State.

                  11.      Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

                  12.      Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement which shall remain in full force and effect.

                  13.      Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same agreement.

                  14.      Employment Rights. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or the Executive to
have the Executive continue as an officer or assistant officer of the Company
or to remain in the employment of the
Company prior to any Change in Control; provided, however, that any
termination of employment of the Executive or removal of the Executive as an
elected officer or assistant officer of the Company following the commencement
of any discussion with or communication from a third person that ultimately
results in a Change in Control shall be deemed to be a termination or removal
of the Executive after a Change in Control for purposes of this Agreement.

                  15.      Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall
be required pursuant to any law or government regulation or ruling.

16

 

                  16.      Competitive Activity. For purposes of this Agreement, the term
“Competitive Activity” shall mean the Executive’s participation, without the
written consent of an officer of the Company, in the management of any business
enterprise if such enterprise engages in substantial and direct competition
with the Company and such enterprise’s sales of any product or service
competitive with any product or service of the Company amounted to 25% of such
enterprise’s net sales for its most recently completed fiscal year and if the
Company’s net sales of said product or service amounted to 25% of the Company’s
net sales for its most recently completed fiscal year. “Competitive Activity”
shall not include (i) the mere ownership of securities in any enterprise and
exercise of rights appurtenant thereto or (ii) participation in management of
any enterprise or business operation thereof other than in connection with the
competitive operation of such enterprise.

                  17.      Legal Fees and Expenses. It is the intent of the Company that the
Executive not be required to incur the expenses associated with the enforcement
of his rights under this Agreement (or with respect to any compensation or
benefit, including but not limited to split-dollar life insurance, under any
employee benefit plan, agreement or arrangement, the payment or vesting of
which is accelerated upon the occurrence of a Change in Control (“Change in
Control Benefits”)) by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Executive hereunder (and by the Change in Control Benefits).
Accordingly, if it should appear to the Executive that the Company has failed
to comply with any of its obligations under this Agreement (or has failed to
provide any portion of the Change in Control Benefits) or in the event that the
Company or any other person takes any action to declare the Agreement (or any
Change in Control Benefits) void or unenforceable or institutes any litigation
designed to deny, or to recover from the Executive the benefits intended to be
provided to the Executive hereunder (or by any Change in Control Benefits), the
Company irrevocably authorizes the Executive from time to time to retain
counsel of his choice, at the expense of the Company as hereafter provided, to
represent the Executive in connection with the initiation or defense of any
litigation or other legal action relating thereto, whether by or against the
Company or any Director, officer, shareholder or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and any such counsel, the
Company irrevocably consents to the Executive’s entering into an
attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. The Company shall pay or cause to be paid and be
solely responsible for any and all attorneys’ and related fees and expenses
incurred by the Executive (i) as a result of the Company’s failure to perform
this Agreement or any provision hereof (or the failure to provide any portion
of the Change in Control Benefits) or (ii) as a result of the Company or any
person contesting the validity or enforceability of this Agreement or any
provision hereof (or any Change in Control Benefits or any provision thereof)
as aforesaid.

                  18.      Prior Agreement. This Agreement amends and restates in its entirety
the Employment Continuation Agreement, 

dated                      , between the Company
and the Executive.

17

 

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first set forth above.

	 	 	 
	 	
TRW INC.
	
	
	
	

	 	 	 
	 	
By:	 
	
	
	
	

	 	
 	

	 	 	
Name

Title
	 	 	 
	 	 	 
	 	

	
	
	
	

	 	
Executive

 

 

 

18EX-10(W) TRW Deferred Compensation Plan

 

Exhibit 10(w)

 

TRW INC.

DEFERRED COMPENSATION PLAN

     THIS AMENDED AND RESTATED PLAN, established by TRW Inc. (“TRW”)
effective July 28, 1993, and as amended from time to time, including this
amendment and restatement effective January 1, 2002, is for the benefit of
certain employees of the Corporation in executive, managerial or professional
capacities so as to enhance the Corporation’s ability to attract and retain
outstanding employees who are expected to contribute to its success. It shall
remain in effect, as it may be amended from time to time, until termination as
provided in Article VII of the Plan.

ARTICLE I

DEFINITIONS

For the purposes of the Plan, the following words and phrases shall mean:

1.1 Account. The bookkeeping or accounting records maintained (having and
requiring no segregation or holding of any assets) by TRW or the Service
Provider pursuant to Article IV with respect to and resulting from a
Participant’s Deferral Election, Prior Plan Credit or compensation mandatorily
deferred pursuant to the terms of an Other Grant. Notwithstanding any provision
of the Plan to the contrary, if the terms of an Other Grant provide that rights
to such Other Grant and/or the earnings on such Other Grant is subject to the
satisfaction of any condition, for purposes of Article V of the Plan, the
Account balance shall not be deemed to include the amounts subject to such
condition until those conditions are met, as determined by the Committee, the
Special Committee, or the person or persons designated to make such
determination in the terms of the Other Grant.

1.2 Affiliate.

		
	 	     (a) Any corporation incorporated under the laws of one of the
United States of America of which TRW owns, directly or indirectly, in
excess of 50% of the combined voting power of all classes of stock or
in excess of 50% of the total value of the shares of all classes of
stock (all within the meaning of §1563 of the Code);
	 
	 	     (b) any partnership or other business entity organized under
such laws, in which TRW owns, directly or indirectly, (i) in excess of
50% of the total capital or profits interest of such partnership, or
(ii) in excess of 50% or more of the total value of such other business
entity (all within the meaning of §414(c) of the Code); and
	 
	 	     (c) any other company designated as an Affiliate by the Committee.

 

1.3 Affiliate Plan. An unfunded non-qualified deferred compensation plan
maintained by an Affiliate for a select group of executive, managerial or
professional employees.

1.4 Beneficiary. The person, persons or entity entitled under Article VI to
receive any Plan Benefits payable after a Participant’s death.

1.5 Code. The Internal Revenue Code of 1986, as amended. References in the Plan
to Sections of the Code are to such Sections as in effect on the Effective Date
or any successor provision.

1.6 Committee. The Compensation Committee of the Directors.

1.7 Corporation. TRW or an Affiliate of TRW.

1.8 Date of Deposit. The Determination Date immediately preceding the date that,
but for the Deferral Election, the Incentive Compensation would be paid, or,
with respect to compensation mandatorily deferred pursuant to the terms of an
Other Grant, the date on which such compensation is deferred.

1.9 Deferral Election. An election pursuant to Article III by an Eligible
Employee to defer receipt of all or part of his or her Incentive Compensation.

1.10 Deferred Compensation. (a) The portion of Incentive Compensation or the
portion of an Other Grant which an Eligible Employee elects to defer pursuant to
a Participation Agreement, (b) any Prior Plan Credit and (c) any portion of an
Other Grant mandatorily deferred pursuant to the terms of such Other Grant.

1.11 Determination Date. Daily.

1.12 Directors. The Directors of TRW.

1.13 Effective Date. July 28, 1993, the effective date of the establishment of
the Plan.

1.14 Eligible Employee. (a) A person (who must be a U.S. resident on a U.S.
payroll of the Corporation) in the full-time active salary employ of the
Corporation who is employed at Operational Incentive Plan Level III or above at
the time Incentive Compensation would be paid or at the end of the year for
which Incentive Compensation would be payable; or (b) a person who is employed
at Operational Incentive Plan Level III or above on the U.S. payroll of either
TRW Overseas Inc. or TRW Systems Overseas Inc. at the time Incentive
Compensation would be paid or at the end of the year for which Incentive
Compensation would be payable; or (c) a person who would qualify under clause
(a) or (b) above but for the fact that such person retires or is terminated due
to a divestiture after executing a valid Deferral Election in the year the
retirement or termination is effective. Notwithstanding the foregoing, the
Special Committee or its delegate may determine that an employee’s participation
in the Plan

2

 

must cease in order to preserve the Plan’s status as a plan maintained primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees and may take such action as it deems
appropriate in connection with such a determination, including determining that
a person is not or is no longer an Eligible Employee.

1.15 Executive Officer. Any Eligible Employee who is an “executive officer” of
TRW for the purposes of Rule 3b-7 under the Securities Exchange Act of 1934.

1.16 Financial Hardship. A severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent (as defined in §152(a) of the Code) of the Participant, loss of
the Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstance arising as a result of events beyond the control of
the Participant. In case of the Participant’s death, the word “Beneficiary or
other person or entity entitled to receive a Plan Benefit” shall be substituted
for the word “Participant” wherever the latter appears in this Section 1.16.

1.17 Incentive Bonus. A cash award payable to an Eligible Employee under TRW’s
Operational Incentive Plan (or similar compensation program that replaces the
Operational Incentive Plan).

1.18 Incentive Compensation. Any cash award payable to an Eligible Employee as
an Incentive Bonus or, if applicable, a Strategic Grant or Other Grant that, but
for a Deferral Election or mandatory deferral under the Plan, would be paid to
the Eligible Employee and considered to be “wages” for purposes of United States
federal income tax withholding (or other appropriate jurisdiction).

1.19 Interest Rate or Interest. One-twelfth of the annual interest rate, equal
to 110% of the applicable long-term federal rate as published by the Internal
Revenue Service pursuant to Code §1274(d) or any successor provision and in
effect on the first business day of each calendar month.

1.20 Investment Fund Returns. The gains or losses in one or more of the
investment funds offered to participants under the TRW Employee Stock Ownership
and Savings Plan, any of which shall be available to any Participant for
purposes of having such investment fund results credited to his Account under
this Plan; provided, however, that effective July 1, 2000, any changes to the
investment funds offered to participants under the TRW Employee Stock Ownership
and Savings Plan will result in a change to the investment options available
under the Plan only if and when such changes are approved by the Chairman of the
Board, the General Counsel and the Executive Vice President — Human Resources of
TRW; and, provided further that the self-directed brokerage window to be offered
to participants under the TRW Employee Stock Ownership and Savings Plan
effective July 5, 2000, will not be made available as an investment option under
the Plan.

1.21 Other Grant. A cash award payable to an Eligible Employee, other than an
Incentive Bonus or Strategic Grant, that the Chief Executive Officer (or the
Committee,

3

 

if the Eligible Employee is an Executive Officer) designates as being eligible
for deferral under the Plan or mandatorily deferrable under the Plan. Such
designation shall be subject to a determination by the Vice President — Taxation
that such deferral would effectively defer the inclusion of such award in the
Eligible Employee’s taxable income under applicable law.

1.22 Other Grant Sub-Account. A Sub-Account of a Participant’s Account
established pursuant to Section 4.3, to which there shall be credited Deferred
Compensation mandatorily deferred pursuant to the terms of an Other Grant or the
portion of a single Other Grant that a Participant elects to defer under the
Plan, and all Interest and/or Investment Fund Returns accrued thereon or charged
thereto, as to which the Plan Benefit is intended to be payable in accordance
with the payout terms provided for with respect to such Other Grant or, if
applicable, the Participant’s elections with respect thereto. A separate Other
Grant Sub-Account shall be maintained with respect to each Other Grant;
provided, however, that if two or more Other Grant Sub-Accounts:

		
	 	     i. contain the same restrictions (or lack thereof) on investment
alternatives available under the Plan with respect to such Other Grant,
	 
	 	     ii. contain the same (or absence of) conditions to vesting, and
	 
	 	     iii. provide for Plan Benefits to be payable in accordance with an
identical payout schedule,

then such Other Grant Sub-Accounts shall be considered a single Other Grant
Sub-Account for purposes of this Plan.

1.23 Participant. An Eligible Employee who has elected to participate in the
Plan and has executed and filed with TRW (or, if TRW has designated a Service
Provider for such purpose, that Service Provider) a Participation Agreement as
provided in Article III; provided, however, that such term shall include a
person who does not have in place an effective Deferral Election so long as he
retains, under the Plan, an interest in an Account under the Plan.

1.24 Participation Agreement. An agreement between TRW and a Participant setting
forth the Participant’s Deferral Election.

1.25 Plan. This Deferred Compensation Plan, as it may be amended from time to
time.

1.26 Plan Benefit. The benefit payable to a Participant in accordance with
Article V hereof.

1.27 Plan Year. Each of the twelve month periods ending December 31 and
occurring while the Plan remains in effect. The term “Plan Year” shall also
include the period beginning on the Effective Date and ending December 31, 1993,
and any period

4

 

of less than twelve months beginning January 1 and ending on the date the Plan
is terminated.

1.28 Pre-Retirement Payment Sub-Account. A Sub-Account of a Participant’s
Account, established pursuant to Section 4.3, to which there shall be credited
Deferred Compensation under a single Deferral Election, and all Interest and/or
Investment Fund Returns accrued thereon or charged thereto, as to which the
Participant has elected payment of his Plan Benefit in either five years or ten
years from the Date of Deposit; provided, however, that except with respect to
Pre-Retirement Payment Sub-Accounts attributable to Prior Plan Credits, if two
Pre-Retirement Payment Sub-Accounts provide for Plan Benefits to be payable in
the same year, both such Pre-Retirement Payment Sub-Accounts shall be considered
a single Pre-Retirement Payment Sub-Account for purposes of Sections
3.1(b)(iii), 3.3, 4.4 and 4.5. All or a portion of a Prior Plan Credit may be
credited to a Pre-Retirement Payment Sub-Account pursuant to Section 8.2.

1.29 Prior Plan Credit. The amount credited to a Participant’s Account as a
result of a merger of an Affiliate Plan into the Plan pursuant to Section 8.2.

1.30 Retirement Payment Sub-Account. A Sub-Account of a Participant’s Account,
established pursuant to Section 4.3, to which there shall be credited Deferred
Compensation under all Deferral Elections, and all Interest and/or Investment
Fund Returns accrued thereon or charged thereto, as to which the Plan Benefit is
intended to be payable following retirement of the Participant from the
Corporation. All or a portion of a Prior Plan Credit may be credited to a
Retirement Payment Sub-Account pursuant to Section 8.2.

1.31 Service Provider. Putnam Fiduciary Trust Company, or such other entity
selected by the Committee or the Special Committee to perform certain
recordkeeping, administrative, communication and/or other functions related to
the Plan.

1.32 Special Committee. The committee composed of the Executive Vice President -
Human Resources, the General Counsel and the Chief Financial Officer of TRW,
which committee reviews and acts upon the requests of Participants (other than
Participants who are Executive Officers, whose requests are acted upon by the
Committee) to receive early payout as a result of a Financial Hardship or to
change payout upon retirement and which is authorized to take such other actions
as are specified by the Plan.

1.33 Strategic Grant. A cash award and/or performance unit payable to an
Eligible Employee pursuant to TRW’s Strategic Incentive Program (or similar
long-term compensation plan that replaces or augments the Strategic Incentive
Program).

1.34 Sub-Account. A Pre-Retirement Payment Sub-Account, a Retirement Payment
Sub-Account or an Other Grant Sub-Account.

1.35 Termination of Employment. Any severance of a Participant from full-time
active salaried employment by the Corporation for any reason (other than a
transfer of

5

 

employment from TRW to an Affiliate, from an Affiliate to another
Affiliate or from an Affiliate to TRW).

1.36 TRW. TRW Inc., an Ohio corporation.

ARTICLE II

ADMINISTRATION

2.1 Administrators. The Plan shall be administered by the Committee and the
Special Committee, and certain decisions concerning Financial Hardship and
change in payment upon retirement may be made by the Special Committee. The
Special Committee or its delegate may determine that an employee’s participation
in the Plan must cease in order to preserve the Plan’s status as a plan
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees and may take such
action as it deems appropriate in connection with such a determination. Except
as otherwise provided herein, decisions of the Committee or the Special
Committee shall be final and binding on all parties.

2.2 Committee. The Committee shall have the authority (a) to make, amend,
interpret and enforce all rules and regulations for the administration of the
Plan and (b) to decide all questions, including interpretation of the Plan as
may arise in connection with the Plan insofar as it is applicable to
Participants (i) who are Executive Officers or (ii) with respect to whom
questions are referred to the Committee by the Executive Vice President — Human
Resources. A majority of the members of the Committee shall constitute a quorum.
The Committee may act by a vote of a majority of a quorum at a meeting or by a
writing signed by a majority of the members of the Committee.

2.3 Human Resources. The Executive Vice President — Human Resources shall
administer the Plan in accordance with the terms of the Plan and the rules and
regulations of the Plan as established by the Committee. Consistent with the
authorized precedents and the rules and regulations authorized by the Committee,
the Executive Vice President — Human Resources shall have the authority to
decide all questions, including interpretations of the Plan, as may arise in
connection with the Plan insofar as it is applicable to Participants other than
Executive Officers.

2.4 Special Committee. With regard to all Participants, other than Participants
who are Executive Officers, the Special Committee shall act upon (i) written
requests of Participants concerning early payout of some or all of the
Participant’s Account balances as a result of Financial Hardship and (ii)
written requests of Participants to change the payout of a Participant’s
Retirement Payment Sub-Account as provided by Section 5.1(b). The Special
Committee may act by a vote of the majority at a meeting or by a writing signed
by a majority of the members of the Special Committee.

2.5 Financial Hardship and Retirement Payout Change Requests. In order for a
request to be considered by the Special Committee (or, in the case of a request
as set forth in clauses (i) or (ii) of Section 2.4 by an Executive Officer, the
Committee), the requests must (i) be in writing and delivered to the Executive
Vice President — Human

6

 

Resources, (ii) set forth whether the Participant is requesting an early payout
because of a Financial Hardship or a change of payout upon retirement, (iii) set
forth the reasons for such request, including in detail the Financial Hardship
or the circumstances that necessitate the change of payout upon retirement, (iv)
in the case of a request as a result of a Financial Hardship set forth the
amount of such Participant’s Account that the Participant wishes to be paid and
the Sub-Accounts from which such early payout shall be made and (v) in the case
of a change of payout at retirement set forth the manner in which the
Participant wishes to receive payout (e.g., single sum or in annual installments
from two to ten years). Compliance with the petition procedures set forth in
this Section 2.5 does not insure that the request will be granted by the Special
Committee (or the Committee).

ARTICLE III

PARTICIPATION

3.1 Participation.

		
	 	     (a) Subject to the limitations set forth in this Article III and
subject to the terms specified by an Other Grant, any person who is an
Eligible Employee may participate in the Plan by executing and filing
with the Executive Vice President — Human Resources (or, if indicated
by TRW, the Service Provider) a Participation Agreement.
	 
	 	     (b) In each Participation Agreement, the Eligible Employee shall
specify:

		
	 	     (i) the percentage of Incentive Bonus, Strategic Grant or
Other Grant, as applicable, to be deferred;
	 
	 	     (ii) subject to the limitations of Section 5.1, the form of
Plan Benefit (i.e., whether such benefits are intended to be paid
following retirement or five or ten years from the Date of
Deposit);
	 
	 	     (iii) the Investment Fund Returns and/or Interest Rate to be
credited to the Participant’s entire Sub-Account applicable to
the payout year, or, if the deferred amount is to be paid out
following retirement, the entire Retirement Payment Sub-Account
(if the Eligible Employee does not specify such matters, 100% of
the amount deferred for such fiscal year and all amounts in the
applicable Sub-Account with the same payout year, or the
Retirement Payment Sub-Account, as the case may be, shall be
credited with the Interest Rate).

	 	 	If the Eligible Employee has chosen to have Deferred Compensation paid
five or ten years from the Date of Deposit, such payments shall be
made as provided in Section 5.1(e) below.

7

 

		
	 	     (c) Before September 30 of each Plan Year or, if required by the
terms of an Other Grant, before such date as specified by the Chief
Executive Officer or the Committee, each Eligible Employee who elects
to become a Participant shall file with the Executive Vice President -
Human Resources or the Service Provider, if indicated by TRW, a
Participation Agreement specifying the items identified in paragraph
(b) above.

3.2 Deferral Elections. Subject to the restrictions concerning deferral of
Incentive Bonus set forth in Section 3.1(a), any Eligible Employee may elect to
defer any percentage of each of his or her Other Grant (if applicable),
Strategic Grant and his Incentive Bonus; provided, however, that, to the extent
that the Eligible Employee chooses to defer a percentage of his Other Grant,
Incentive Bonus and/or Strategic Bonus, each Deferral Election, to be effective,
must be in increments of 1% for each of the Other Grant, Strategic Grant and
Incentive Bonus, which election percentages do not need to be identical . The
terms of an Other Grant may specify the percentage of the Other Grant that is
deferred without the requirement for a Deferral Election by the Eligible
Employee.

3.3 Modification of Deferral Election.

		
	 	     (a) By notice to TRW (or, the Service Provider, if designated by
TRW), in the manner specified by TRW, a Deferral Election filed in any
Plan Year with respect to an Incentive Bonus and/or Strategic Bonus
may be modified or revoked at any time prior to October 1 of such Plan
Year. Thereafter, a Deferral Election specified in a Participation
Agreement with respect to an Incentive Bonus and/or Strategic Bonus
shall be irrevocable, except that the Committee or the Special
Committee, as appropriate under Article II, may permit a Participant
at any time prior to the actual deferral of such Incentive Bonus
and/or Strategic Bonus to reduce the designated percentage to be
deferred upon a finding, based upon uniform standards established by
the Committee, that the Participant has suffered a Financial Hardship.
A Participant may change his or her elections made pursuant to Section
3.1(b)(iii) for a particular Deferral Election with respect to an
Incentive Bonus and/or Strategic Bonus at any time prior to February 1
of the year in which the Incentive Bonus and/or Strategic Bonus is
actually deferred by communicating such changes to TRW or, if
designated by TRW, to the Service Provider, in the manner specified by
TRW.
	 
	 	     (b) A Deferral Election with respect to an Other Grant shall be
irrevocable, except that the Committee or the Special Committee, as
appropriate under Article II, may permit a Participant at any time
prior to the actual deferral of the Other Grant to reduce the
designated percentage to be deferred upon a finding, based upon
uniform standards established by the Committee, that the Participant
has suffered a Financial Hardship. Subject to the terms of an Other
Grant, a Participant may change his or her elections made pursuant to
Section 3.1(b)(iii) with respect to an Other Grant at any time prior
to the date established by the Executive Vice President — Human
Resources.

8

 

ARTICLE IV

DEFERRED COMPENSATION

4.1 Deferred Compensation. The amount of Incentive Compensation deferred
pursuant to a Deferral Election shall be withheld in a single sum at the time
such Incentive Compensation, but for a Deferral Election, would be paid.

4.2 Withholding of Taxes and SSP/BEP Contributions. Any withholding of taxes or
other amounts which is required by any federal, state, or local law shall be
withheld from the Participant’s remaining undeferred Incentive Compensation, if
any. If necessary in order to comply with any federal, state or local law, the
amount of Incentive Compensation deferred may be reduced by an amount equal to
any required withholding. Otherwise, such withholding may be made from any of
the Participant’s other compensation payable by the Corporation, or, at the
election of the Executive Vice President — Human Resources, a Participant may be
permitted to pay to the Corporation the amount of any such required withholding
at or prior to the time such withholding would otherwise be required to be made.
In addition, the amount of Incentive Compensation deferred shall be reduced by
the amount of TRW Stock Savings Plan and Benefits Equalization Plan
contributions to be made by the Eligible Employee on account of such Incentive
Compensation.

4.3 Accounts. For recordkeeping purposes only, a separate Account shall be
established and maintained by TRW for each Participant to which his Deferred
Compensation and Investment Fund Returns or Interest accrued thereon pursuant to
Section 4.5 shall be credited (or charged). Each such Account shall be divided
into the following Sub-Accounts for purposes of Section 5.1: (i) a Retirement
Payment Sub-Account to which there shall be credited all Incentive Compensation
deferred (and all Investment Fund Returns or Interest thereon) pursuant to all
Deferral Elections under which a Plan Benefit is payable the year following
retirement; and (ii) a separate Pre-Retirement Payment Sub-Account for each
Deferral Election under which the Participant has elected that his Plan Benefit
be payable five or ten years from the Date of Deposit, to which the Incentive
Compensation deferred (and all Investment Fund Returns or Interest thereon)
pursuant to such Deferral Election shall be credited. An Account will also
consist of, if applicable, one or more separate Other Grant Sub-Accounts, to
which there shall be credited all compensation deferred (and all Investment Fund
Returns or Interest thereon) pursuant to Other Grants, the Plan Benefit of which
shall be payable in accordance with the terms of such Other Grant, or as
otherwise provided by the Participant’s election. A Participant’s Prior Plan
Credit shall be credited to a Retirement Payment Sub-Account and/or
Pre-Retirement Payment Sub-Account(s) as provided in Section 8.2.

4.4 Interest and Investment Fund Return Changes. A Participant may, on a daily
basis, revise the Investment Fund Returns and/or Interest Rate to be credited to
any of such Participant’s Sub-Accounts (except for an Other Grant Sub-Account,
if the terms of such Other Grant restrict the investment election alternatives
with respect to such Other Grant) on a daily basis by communicating such changes
to TRW or, if TRW has

9

 

selected a Service Provider, to the Service Provider, in the manner communicated
from time to time by TRW to the Participant. Such elections must be made in
increments of 1%. Such changes shall take effect in accordance with the
timeframes established by TRW or the Service Provider, as the case may be.

4.5 Determination of Account. The value of each Participant’s Account as of each
Determination Date shall be the total of the Participant’s Retirement Payment,
Pre-Retirement Payment and Other Grant Sub-Accounts. The value of each such
Sub-Account shall consist of (i) the balance of such Sub-Account as of the last
preceding Determination Date plus (ii) any Deferred Compensation credited to
such Sub-Account since the last preceding Determination Date, (iii) adjusted for
Investment Fund Returns or Interest since the last preceding Determination Date
based upon the Investment Fund Returns or Interest Rate selected by the
Participant under this Plan or applicable to the Other Grant Sub-Account;
provided, however, that interest and dividend performance under PIMCO Total
Return Fund and PRIMCO Stable Value Fund will be accrued daily and credited
monthly, less (iv) the amount of all Plan Benefits, if any, paid during the
period since the last preceding Determination Date; provided, however, that for
any payment of a Plan Benefit payable pursuant to Article V during the month of
January, the value of each Sub-Account shall be calculated as of the December 31
preceding the date of payment, and Investment Fund Returns or Interest on the
amount paid out shall cease to accrue as of such December 31. For new
allocations of Deferred Compensation deferred to a Participant’s Account in the
month of February, Investment Fund Returns and Interest will be credited
retroactive to February 1. Notwithstanding anything to the contrary in this
Section 4.5 or the Plan, if the terms of an Other Grant provide that the right
to such Other Grant and/or the earnings on such Other Grant is subject to the
satisfaction of any condition, the amount included in the Account that is
subject to such condition shall be subject to forfeiture and shall not be
considered part of the Plan Benefit payable under Article V of the Plan until
such conditions are met, as determined by the Committee, the Special Committee,
or the person or persons designed to make such determination in the terms of the
Other Grant.

4.6 Statement of Accounts. TRW shall submit or cause the Service Provider to
submit to each Participant, no less frequently than quarterly, within a
reasonable period after the end of each calendar quarter, a statement setting
forth the total balance of the Participant’s Account, and the balance of each
Sub-Account thereof, as of the last day of such quarter, the Deferred
Compensation and Investment Fund Returns credited or charged, or Interest
accrued thereon, to each Sub-Account during the quarter and the payments of the
Plan Benefits from each Sub-Account during the quarter.

10

 

ARTICLE V

PLAN BENEFITS

5.1 Plan Benefits Payable on Termination of Employment, Five Years from Date of
Deposit or Ten Years from Date of Deposit.

		
	 	     (a) Subject to the provisions of Section 5.1(b) and except as
otherwise provided below, upon Termination of Employment a Participant
shall receive a Plan Benefit equal to the balance of his Account as of
the Determination Date immediately preceding such Termination of
Employment, plus the amount of any Deferred Compensation credited his
or her Account after such Determination Date, plus the gains or losses
on the balance of his or her Account for the period from the
Determination Date immediately preceding such Termination of
Employment through the December 31 preceding the date of payment based
upon the applicable Investment Fund Returns or Interest Rate. Such
Plan Benefit shall be payable as a single sum during the January
following such Termination of Employment. However, in the event that
the Termination of Employment is the result of a divestiture of the
unit or operations of the Corporation where the Participant worked
prior to Termination of Employment and the Participant obtains
employment with the entity that acquired such unit or operations, then
the balance of such Participant’s Account shall be payable in
accordance with such Participant’s original Deferral Election or in
one lump sum the January following such Participant’s termination of
employment from such entity (or its successor), whichever occurs
first. Such Participant’s Account shall continue to be credited or
charged with Investment Fund Returns or accrued Interest following
such Participant’s Termination of Employment through the December 31
preceding payment in full of his or her Account.
	 
	 	     (b) In the event that a Participant’s Termination of Employment
occurs as a result of his retirement, the Participant shall receive
the Plan Benefit payable in respect of his Retirement Payment
Sub-Account in ten annual installments commencing in the year
following the year that Termination of Employment occurred; provided,
however, that the Participant can petition the Special Committee (or
the Committee in the case of an Executive Officer) at any time at
least two months prior to retirement to change such payment into
annual installments from two to ten years or a single sum; further
provided, that any such payment change approved by the Special
Committee (or the Committee) shall not be effective until the calendar
year following the date of the payment change; provided further,
however, that if the amount in the Retirement Payment Sub-Account is
less than $5,000 valued at December 31 of any year, the balance in the
Retirement Payment Sub-Account shall be paid in a lump sum in the
January following retirement or any January thereafter in which such
Participant’s Retirement Payment Sub-Account falls below $5,000. In
the event that payment shall be made in a single sum, such payment
shall be in accordance with the procedures set forth in Section 5.1(a)
above, but in no event in the same calendar year as the year of any
requested change and no earlier than January 1 of the calendar year
following the year that Termination of

11

 

	 	 	Employment occurred. In the event that the payment shall be made in
installments, such payments shall be made in accordance with Section
5.1(f) below. If, at the time of retirement, the Participant has a
credit in a Pre-Retirement Payment Sub-Account, such Sub-Account
balances shall be paid in accordance with the Participant’s original
Deferral Election. In the event of death of a Participant after
payouts have begun from such Participant’s Retirement Payment
Sub-Account, payouts will continue to be made to the beneficiary or
estate until paid out completely, subject to the third provision of
the first sentence of this Section 5.1(b).

		
	 	     (c) In the event that a Participant’s Termination of Employment
occurs as a result of a layoff, the Participant shall receive a Plan
Benefit equal to the balance of his Account as of the Determination
Date immediately preceding such Termination of Employment, plus the
amount of any Deferred Compensation credited his Account after such
Determination Date, payable in one lump sum during the January
following the date that is 12 months following Participant’s
Termination of Employment. The Participant’s Account shall be credited
with gains or losses on the balance of his Account for the period from
such Determination Date through the December 31 preceding the date of
payment based upon the applicable Investment Fund Returns or Interest
Rate. If the Participant retires during the 12-month period following
his Termination of Employment, the Plan Benefit to which he is
entitled shall be calculated and paid in accordance with Section
5.1(b).
	 
	 	     (d) In the event that a Participant’s Termination of Employment
occurs because of his death, his Beneficiary or, if no designated
Beneficiary shall survive him, his estate shall receive the Plan
Benefit in the manner provided in Section 5.1(a).
	 
	 	     (e) If the Participant has chosen in his Deferral Election to
receive payouts either five or ten years from the Date of Deposit (as
opposed to upon retirement from the Corporation), payments shall be
made in a single sum form from each Pre-Retirement Payment Sub-Account
of the Participant by the end of January of the year either five or
ten years (depending upon the applicable Deferral Election) following
the applicable Date of Deposit; provided, however, that if Termination
of Employment has occurred prior to payment (other than as a result of
retirement), payment of the Participant’s Plan Benefits shall be made
as provided in Section 5.1(a).
	 
	 	     (f) If the payments from the Participant’s Retirement Payment
Sub-Account are to be paid in installment form, such installments
shall be paid in ten annual installments (or in such number of annual
installments approved by the Special Committee or the Committee
pursuant to Section 2.5) by the end of January of each year in which
an installment is to be made. Installment payments will commence in
the year following the Participant’s Termination of Employment. If
annual installments are paid, the balance of the Account shall
continue to be credited or charged with Investment Fund Returns or
Interest as

12

 

		
	 	previously elected by the Participant in accordance with Section
3.1(b) or as most recently revised pursuant to Section 4.4.

		
	 	     (g) Any portion of a Participant’s Prior Plan Credit that has
been credited to one or more Pre-Retirement Payment Sub-Accounts
pursuant to Section 8.2 shall be paid to the Participant in a single
sum form from each Pre-Retirement Payment Sub-Account of the
Participant by the end of January of the year designated as the payout
year pursuant to Section 8.2; provided, however, that if Termination
of Employment has occurred prior to payment (other than as a result of
retirement, if an agreement providing for payout in accordance with
the terms of this Plan was entered into by the Participant in
accordance with Section 8.2), payment of the Participant’s Plan
Benefits attributable to such Prior Plan Credit shall be made as
provided in Section 5.1(a).
	 
	 	     (h) Notwithstanding anything to the contrary in Section 5.1, the
balance in a Participant’s Other Grant Sub-Account or Sub-Accounts
shall be payable as provided for by the terms of the applicable Other
Grant and/or the Participant’s elections with respect thereto.

5.2 Withdrawal of Plan Benefit. No Plan Benefit shall be payable prior to the
Participant’s Termination of Employment other than in the form determined
pursuant to Section 5.1(e) or 5.1(h), except that the Committee or the Special
Committee, as appropriate under Article II, may permit a Participant or, after a
Participant’s death, a Participant’s Beneficiary or other person or entity
entitled to receive such Plan Benefit, to withdraw from the Participant’s
Account an amount necessary to meet a Financial Hardship.

5.3 Withholding; Payroll Taxes. TRW shall withhold from Plan Benefits payable
under the Plan any taxes required to be withheld from an employee’s wages for
the federal or any state or local governments.

5.4 Full Payment of Benefits. Notwithstanding any other provision of the Plan,
all Plan Benefits shall be paid to the Participant no later than the January 5
next preceding the Participant’s 80th birthday.

ARTICLE VI

BENEFICIARY DESIGNATION

6.1 Beneficiary Designation. Each Participant shall have the right, at any time,
to designate any person or persons as his Beneficiary (both principal as well as
contingent) to whom payment under the Plan shall be made in the event of his
death prior to complete distribution of all Plan Benefits due him under the
Plan. Any Beneficiary designation shall be made in writing on a form prescribed
by the Committee and shall become effective only when filed with the Executive
Vice President — Human Resources.

13

 

6.2 Amendments. Subject to the limitations of Section 6.1 of the Plan, any
Beneficiary designation may be changed by a Participant only by written notice
of such change to the Executive Vice President — Human Resources on a form
prescribed by the Committee. The filing of a new Beneficiary designation form
will cancel all prior Beneficiary designations.

6.3 Absence of Effective Beneficiary
Designation. If a Participant fails to
designate a Beneficiary as provided above or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant’s Plan Benefit, the Participant’s remaining Plan Benefit shall be
paid to his estate.

6.4 Effect of Payment. Payment to the Beneficiary designated pursuant to
Sections 6.1 and 6.2 or to the Participant’s estate pursuant to Section 6.3
shall completely discharge TRW’s obligations under the Plan.

ARTICLE VII

AMENDMENT AND TERMINATION OF PLAN

7.1 Termination. The Committee shall have the power in its sole discretion to
suspend or terminate the Plan at any time, except that no such action shall
adversely affect rights with respect to any Account without the consent of the
person affected.

7.2 Amendment. The Committee can amend any part of this Plan (including, without
limitation, changing the Interest Rate or Investment Fund Returns to be paid to
current and future Participants or changing who can become Participants) in its
sole discretion without notice to Participants.

ARTICLE VIII

MISCELLANEOUS

8.1 Unfunded Plan. The Plan is an unfunded plan maintained by TRW primarily to
provide Deferred Compensation benefits for a select group of executive,
managerial or professional employees of the Corporation.

8.2 Merger. The Committee (or the Special Committee, if no Executive Officer is
a participant in the Affiliate Plan) may, in its sole discretion, approve the
merger of an Affiliate Plan into this Plan. Upon the merger of an Affiliate Plan
into this Plan, any participant in the Affiliate Plan who is not already a
Participant in this Plan shall have an Account established in his name under
this Plan and he shall be considered a Participant for purposes of that Account.
The amount credited to a Participant’s Account as a Prior Plan Credit shall be
equal to the balance credited to the Participant’s account under the Affiliate
Plan as of the date of the merger. Unless a Participant in the Affiliate Plan
executes an agreement in a form approved by the Executive Vice President — Human
Resources providing for payments of a prior Plan Credit to be made in accordance
with the payment provisions provided for by the Plan, a Participant’s

14

 

Prior Plan Credit shall be allocated to a Sub-Account or Sub-Accounts in a
manner designed to cause such amounts to be paid to the Participant at a date
not later than the date such amounts would have been paid to the Participant
under the Affiliate Plan had the Affiliate Plan continued as a separate plan. If
any portion of a Participant’s Prior Plan Credit is allocated to a
Pre-Retirement Payment Sub-Account, a specific year for distribution of such
Sub-Account shall be established. To the extent that a Participant’s Prior Plan
Credit is allocated to his existing (pre-merger) Retirement Payment Sub-Account,
the Investment Fund Returns and/or Interest Rate in effect with respect to such
Sub-Account shall be applicable to such Prior Plan Credit, subject to
modification by the Participant under Section 4.4. To the extent that a
Participant’s Prior Plan Credit is allocated to a newly established
(post-merger) Sub-Account, such Prior Plan Credit shall be credited with the
Interest Rate, subject to modification by the Participant under Section 4.4. If,
upon the merger of an Affiliate Plan into this Plan, a participant in the
Affiliate Plan enters into an agreement in the form approved by the Executive
Vice President — Human Resources providing for payments of a Prior Plan Credit
to be made in accordance with this Plan, then such elections shall apply;
provided that such agreement shall not be effective with respect to any election
that results in the deferral of income to a later date if such election is not
made before the beginning of the year in which the payment would have been made
under the Affiliate Plan.

8.3 Unsecured General Creditor. Participants and their Beneficiaries, estates,
heirs, successors and assigns shall have no legal or equitable rights, interest
or claims in any property or assets of TRW. Such assets of TRW shall not be held
under any trust or in any other way as collateral security for the fulfillment
of the obligations of TRW under the Plan. Any and all of TRW’s assets shall be,
and remain, the general, unpledged, unrestricted assets of TRW. TRW’s sole
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of TRW to pay money in the future.

8.4 Nonassignability. Neither a Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey, in advance of actual
receipt, any Plan Benefit. Plan Benefits and all rights to Plan Benefits are and
shall be nonassignable and nontransferable prior to actual payment as provided
by the Plan. Any such attempted assignment or transfer shall be ineffective;
TRW’s sole obligation shall be to pay Plan Benefits to the Participant, his or
her Beneficiary or his or her estate as appropriate. No part of any Plan Benefit
shall, prior to actual payment as provided by the Plan, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person; nor shall any Plan
Benefit be transferable by operation of law in the event of a Participant’s or
any other person’s bankruptcy or insolvency, except as required by law.

8.5 Not a Contract of Employment. Neither the terms and conditions of the Plan
nor those of any Participation Agreement shall be deemed to constitute a
contract of employment between the Corporation and the Participant, and neither
the Participant, his Beneficiary nor his estate shall have any rights against
TRW under the Plan except as may otherwise be specifically provided in the Plan.
Moreover, nothing in the Plan shall be deemed to give a Participant the right to
be retained in the service of the

15

 

Corporation or to interfere with the right of the Corporation to discipline,
discharge or change the status of a Participant at any time. Further, nothing in
the Plan shall be deemed to give a Participant a right to receive any Incentive
Compensation.

8.6 Protective Provisions. A Participant will cooperate with TRW by furnishing
any and all information requested by TRW in order to facilitate the payment of
Plan Benefits under the Plan, and by taking such other action as may be
reasonably requested by TRW.

8.7 Terms. Whenever any words are used in the Plan in the singular or in the
plural, they shall be construed as though they were used in the plural or
singular, as the case may be, in all cases where they would so apply.

8.8 Captions. The captions of the articles and sections of the Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

8.9. Governing Law. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of Ohio.

8.10 Validity. In case any provision of the Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if such illegal or invalid provision were not included in the Plan.

8.11 Notice or Filing. Any notice or filing required or permitted to be given to
TRW or a Participant under the Plan shall be sufficient if in writing and hand
delivered, or sent by regular mail or by registered or certified mail, to the
principal office of TRW or to the last known address of the Participant, as the
case may be. Such notice or filing shall be deemed given or made (i) when hand
delivered to the residence or offices of the recipient, (ii) as of five days
after the date of mailing if delivery is made by regular mail, or, (iii) as of
five days after the date shown on the postmark on the receipt for registration
or certification provided to the sender at the time of mailing, if by registered
or certified mail.

8.12 Successors. The provisions of the Plan shall bind and obligate TRW and any
successors. The term “successors” as used in this Section 8.12 shall include any
corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of TRW and successors of any such corporation or other
business entity.

8.13 Expenses and Costs. TRW shall bear all expenses and costs in connection
with the operation of the Plan.

8.14 Reliance on Certified Public Accountants. TRW, the Directors, the
Committee, the Special Committee, the Executive Vice President — Human Resources
and any employee of TRW or the Corporation shall be fully protected for actions
taken

16

 

in good faith based on the computations and reports made pursuant to or in
connection with the Plan by the independent certified public accountants who
audit TRW’s accounts.

ARTICLE IX

CLAIMS PROCEDURE

9.1 Claim. Any person claiming a Plan Benefit, requesting an interpretation or
ruling under the Plan (other than a ruling under Section 2.5 above, or
requesting information under the Plan shall present the request in writing to
the Executive Vice President — Human Resources who (a) shall respond in writing
within 90 days following his receipt of the request or (b) in the case of a
claimant who is an Executive Officer, shall refer the claim with his recommended
response to the Committee, which shall respond in writing within 120 days
following the receipt of the request by the Executive Vice President — Human
Resources.

9.2 Denial of Claim. If the claim or request is denied, the written notice of
denial shall state (i) the reasons for denial; (ii) a description of any
additional material or information required and an explanation of why it is
necessary; and (iii) an explanation of the Plan’s claim review procedure.

9.3 Review of Claim. Any person whose claim or request is denied may make a
second request for review by notice given in writing to the Executive Vice
President — Human Resources. The claim or request shall be reviewed further by
the Executive Vice President — Human Resources or the Committee, as appropriate,
and he or it may, but shall not be required to, grant the claimant a hearing.

9.4 Final Decision. A decision on such second request shall normally be made
within 60 days after the date of the second request. If an extension of time is
required for a hearing or other special circumstances, the claimant shall be
notified and the time limit shall be 120 days from the date of the second
request. The decision shall be in writing and, whether made by the Executive
Vice President — Human Resources or the Committee, shall be final and bind all
parties concerned.

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