Document:

exv10wk

Exhibit 10(k)

NORTHROP GRUMMAN SUPPLEMENTARY

RETIREMENT INCOME PLAN

Amended and Restated

Effective January 1, 2009

1. Purpose. The purpose of the Northrop Grumman Supplementary Retirement Income Plan (SRIP) is to
provide supplemental retirement and death benefits to those:

     (i) employees, including officers, of Northrop Grumman Space & Mission Systems Corp. and its
subsidiaries (“NGSMSC”) whose benefits under the Northrop Grumman Space & Mission Systems Corp.
Salaried Pension Plan (“SPP”) have been limited by virtue of §415 of the Internal Revenue Code of
1986 (“Code”);

     (ii) management and highly-compensated employees of NGSMSC whose benefits under the SPP are
limited by Code §401(a)(17);

     (iii) management and highly-compensated employees of NGSMSC whose compensation otherwise
included as pensionable earnings received by such individual within the meaning of the SPP could
not be so included because such compensation was deferred in accordance with the provisions of the
Northrop Grumman Space & Mission Systems Corp. Deferred Compensation Plan or the Northrop Grumman
Deferred Compensation Plan (“DC Plan” or DC Plans”); and

     (iv) management and highly-compensated employees of NGSMSC whose compensation otherwise
included as “Earnings” under the SPP and service otherwise included as Benefit Service under the
SPP would not be so included because of a determination by NGSMSC that such inclusion could violate
the regulations under Code §401(a)(4).

The SRIP is unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income
Security Act (“ERISA”) and is designed to provide benefits which mirror the provisions of the SPP
but cannot be paid from the SPP because of certain Code limitations.

The SRIP is hereby amended and restated effective as of January 1, 2009. This restatement amends
the January 1, 2005 restatement of the SRIP and includes changes that apply to Grandfathered
Amounts (as defined below).

 

 

The SRIP is intended to comply with Code section 409A and official guidance issued thereunder
(except for SRIP benefits that were earned and vested as of December 31, 2004 within the meaning of
Code section 409A and official guidance thereunder (“Grandfathered Amounts”)). Notwithstanding any
other provision of the SRIP, the SRIP shall be interpreted, operated and administered in a manner
consistent with this intention.

2. Eligibility. Employees of NGSMSC covered by the SPP and not otherwise covered by the BDM
International, Inc. Defined Contribution Supplemental Executive Retirement Plan (the “BDM DC SERP”)
whose base pay and bonus paid in any year (or deferred pursuant to the DC Plan) exceed the
limitations of Code §401(a)(17) shall automatically be covered under the SRIP. All SPP
participants not otherwise covered by the BDM DC SERP who are eligible to receive benefits from the
SPP shall automatically receive a benefit from the SRIP if their benefit cannot be fully provided
under the SPP because of the limits under Code §415.

     The foregoing notwithstanding, effective as of February 28, 2003, individuals who qualify as
“TRW Automotive Participants” under the February 28, 2003 Employee Matters Agreement between
Northrop Grumman Space & Mission Systems Corp. and TRW Automotive Acquisition Corp. cease to
participate in the SRIP, and the SRIP and NGSMSC cease to be liable for TRW Automotive
Participants’ benefits.

3. Benefits.

     a. In General. The amount of the benefit payable under the SRIP shall be equal to the
amount which would be payable to or in respect of a participant under the SPP if the limitations
identified in §1 above were inapplicable, less the amount of the benefit payable under the SPP,
taking into account such limitations. The amount of benefit payable under the SRIP to a
participant shall also be reduced to the extent that any other nonqualified plan established by
NGSMSC or any other entity affiliated with NGSMSC under Code §414(b) or (c) (“Affiliate”) pays
benefits to the participant that are attributable to limits imposed upon the SPP other than those
identified in §1 above. The benefit payable under the SRIP for those participants who were
participants in The BDM Corporation Supplemental Executive Retirement Plan which was merged into
the SRIP (the “BDM SERP”) on the close of business on December 31, 1998 (the “Merger Effective
Date”) will not be less than the benefit which had accrued under the BDM SERP as of the Merger
Effective Date for such participants. Schedule A attached hereto sets forth the relevant provisions
of the BDM SERP necessary to calculate such accrued benefits. The benefit payable under the SRIP
for the sole participant who was a “Covered Executive” in the Astro Aerospace Corporation
Supplemental Executive Retirement Plan (the “Astro SERP”) on the close of business on November 30,
1999 will not be less than the benefit which had accrued under the Astro SERP as of November 30,
1999 for such participant, as determined in accordance with the terms of the Astro SERP

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as in effect on November 30, 1999 (a copy of which is attached hereto as Schedule B) and the
benefit payable to such participant’s spouse under the SRIP shall not be less than the benefit
which would have been payable to such spouse under the terms of the Astro SERP had the participant
died on November 30, 1999.

     b. Benefit Limit. The amount of the SRIP benefit will be limited as provided below:

          i. A participant’s total accrued benefits under all defined benefit plans, programs, and
arrangements maintained by Northrop Grumman Corporation and its affiliates (as determined under
Code section 414) in which he or she participates, including the SRIP, may not exceed 60% of his or
her Final Average Salary. If this limit is exceeded, the participant’s benefit accrued under the
SRIP will be reduced to the extent necessary to satisfy the limit.

               (1) For this purpose, “Final Average Salary” has the meaning provided under
Appendix G to the
Northrop Grumman Supplemental Plan 2 (the “OSERP”).

               (2) The Participant’s Final Average Salary will be reduced for early retirement applying
the
factors in the OSERP.

               (3) The limit in this subsection may not be exceeded even after the benefits under the SRIP
have been enhanced under any change in control agreements or Northrop Grumman Corporation Special
Agreements.

     c. Compensation. The following shall not be considered as compensation for purposes
of determining the amount of any benefit under the SRIP:

          i. Any payment authorized by the Compensation Committee of Northrop Grumman Corporation that
is (i) calculated pursuant to the method for determining a bonus amount under the Northrop Grumman
Corporation Annual Incentive Plan (AIP) for a given year, and (ii) paid in lieu of such bonus in
the year prior to the year the bonus would otherwise be paid under the AIP, and

          ii. Any award payment under the Northrop Grumman Long-Term Incentive Cash Plan.

4. Payment of Benefits. The distribution rules of this Section 4 only apply to Grandfathered
Amounts. See Appendix A and Appendix B for the rules that apply to other benefits earned under the
SRIP.

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     a. Except as provided below, no benefit is payable from the SRIP, even if the participant has
terminated his/her employment, unless a participant has five years of vesting service as defined
under the SPP and has attained age fifty-five, provided, however, a benefit will be payable from
the SRIP prior to a participant’s attainment of age fifty-five if the participant terminates his or
her employment in connection with (i) a special voluntary early retirement program offered under
the SPP, the terms of which provide for eligibility prior to age fifty-five, or (ii) a special
early commencement option under the SPP, the terms of which provide for commencement of the SPP
benefit before age fifty-five.

     b. If a participant who has five or more years of vesting service dies before his/her benefit
commencement date under the SPP, the SRIP benefit shall be paid in the same form and shall commence
at the same time as a pre-retirement survivor benefit under the SPP.

     c. Except as provided in paragraph g., i., j., or as provided below, any participant in the
SPP and the SRIP who is entitled to a vested or deferred vested pension under the SPP shall have
his SRIP benefit (i) commence at the same time as his benefit commencement date under the SPP and
(ii) paid in the same form and with the same designated joint annuitant, if any, as his form of
payment under the SPP unless otherwise provided under the terms of any Qualified Domestic Relations
Order (as defined in Section 5) applicable to said participant or unless otherwise determined by
the Administrative Committee in its sole discretion. Any such participant who is eligible for the
special early commencement option under the SPP may petition the Administrative Committee at any
time at least two months prior to his severance from service date under the SPP to change such form
of payment into a single sum or annual installments from two to ten years, or any other payment
form approved by the Administrative Committee in their or its discretion. If annual installment
payments are elected, interest, if any, on such installments shall be determined by the Actuary,
subject to approval by the Administrative Committee.

     d. Except as provided above or in paragraph g., i., or j., payment of benefits under the SRIP
shall be made commencing with the January following the date the participant becomes eligible,
having terminated his employment with NGSMSC and all Affiliates, for benefits under the SPP;
provided, however, that if the participant’s termination of employment is the result of a
divestiture of the NGSMSC or Affiliate unit or operation 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 SRIP benefit shall not be payable until such participant is eligible
for and receives (or commences to receive) his SPP benefit (even if the SRIP benefit is less than
$5,000).

     e. Except as provided above and in paragraph g., i., or j., the automatic form of benefit
payable under the Plan shall be, for an unmarried participant, a single life annuity, and, for a
married participant, a 50% joint and survivor annuity, with the participant’s eligible spouse being
the survivor

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annuitant. Notwithstanding the above, the participant may elect, by notice to the
administrator for the SRIP, at any time at least two months prior to the severance from service
date under the SPP (the “Severance from Service Date”) to change such form of payment into a single
sum or annual installments from two to ten years, or any other payment form approved by the
Administrative Committee in its discretion. If annual installment payments are elected, interest,
if any, on such installments shall be determined by the Actuary, subject to approval by the
Administrative Committee.

     f. If not rejected by the Administrative Committee at least 14 days prior to the Severance
from Service Date, any election of a form of payment or benefit commencement date other than the
automatic form and commencement date shall be irrevocable.

     g. If the present value of a participant’s interest in the SRIP, determined as of the later of
the participant’s age 55 or severance from service date under the SPP, is less than an amount
which, if converted to a single sum equals $5,000, the benefit shall be paid out in a single sum,
either at the same time as his benefit commencement date under the SPP or at another date as
determined by the Administrative Committee in its sole discretion. (See paragraph i for the rule
that applies as of January 1, 2008.)

     h. Payments to be made pursuant to the SRIP shall be made by NGSMSC, with any appropriate
reimbursement being made by subsidiaries of NGSMSC. The SRIP shall be unfunded, and NGSMSC shall
not be required to establish any special or separate fund nor to make any other segregation of
assets in order to assure the payment of any amounts under the SRIP. Participants of the SRIP
shall have the status of general unsecured creditors of NGSMSC and the SRIP constitutes a mere
promise by NGSMSC to make benefit payments in the future.

     i. Mandatory Cashout. Notwithstanding any other provisions in the SRIP, participants
with Grandfathered Amounts who have not commenced payment of such benefits prior to January 1, 2008
will be subject to the following rules:

          i. Post-2007 Terminations. Participants who have a complete termination of employment
with NGSMSC and the Affiliates after 2007 will receive a lump sum distribution of the present value
of their Grandfathered Amounts within two months of such termination (without interest), if such
present value is below the Code section 402(g) limit in effect at the termination.

          ii. Pre-2008 Terminations. Participants who had a complete termination of employment
with NGSMSC and the Affiliates before 2008 will receive a lump sum distribution of the present
value of their Grandfathered Amounts within two months of the time they commence payment of their
underlying qualified pension plan benefits (without interest), if such present value

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is below the Code section 402(g) limit in effect at the time such payments commence.

     j. Optional Payment Forms. Participants with Grandfathered Amounts shall be permitted
to elect i. or ii. below:

          i. To receive their Grandfathered Amounts in any form of distribution available under the SRIP
at October 3, 2004, provided that form remains available under the underlying qualified pension
plan at the time payment of the Grandfathered Amounts commences. The conversion factors for these
distribution forms will be based on the factors or basis in effect under the SRIP on October 3,
2004.

          ii. To receive their Grandfathered Amounts in any life annuity form not included in i. above
but included in the underlying qualified pension plan distribution options at the time payment of
the Grandfathered Amounts commences. The conversion factors will be based on the following
actuarial assumptions:

          Interest Rate:           6%

          Mortality Table:         RP-2000 Mortality Table projected 15 years for future
standardized cash balance factors

     k. Special Tax Distribution. On the date a participant’s retirement benefit is
reasonably ascertainable within the meaning of IRS regulations under Code section 3121(v)(2), an
amount equal to the participant’s portion of the FICA tax withholding will be distributed in a
single lump sum payment. This payment will be based on all benefits under the SRIP, including
Grandfathered Amounts. This payment will reduce the participant’s future benefit payments under
the SRIP on an actuarial basis.

5. Non-Alienation of Benefits. Neither a participant nor any other person shall have any right to
sell, assign, transfer, pledge, mortgage or otherwise encumber, in advance of actual receipt, any
SRIP benefit. Any such attempted assignment or transfer shall be ineffective; NGSMSC’s sole
obligation under the SRIP shall be to pay benefits to the participant, his beneficiary or his
estate, as appropriate. No part of any SRIP benefit shall, prior to actual payment, be subject to
the payment of any debts, judgments, alimony or separate maintenance owed by a participant or any
other person; nor shall any SRIP 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 or permitted by
law.

     Notwithstanding the foregoing, all or a portion of a participant’s benefit may be paid to
another person as specified in a domestic relations order that the plan administrator determines is
qualified (a “Qualified Domestic Relations
Order”). For this purpose, a Qualified Domestic Relations Order means a

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judgment, decree, or order
(including the approval of a settlement agreement) which is:

     a. Issued pursuant to a State’s domestic relations law;

     b. Relates to the provision of child support, alimony payments or marital property rights to a
spouse, former spouse, child or other dependent of the participant;

     c. Creates or recognizes the right of a spouse, former spouse, child or other dependent of the
participant to receive all or a portion of the participant’s benefits under the SRIP; and

     d. Meets such other requirements established by the plan administrator.

     The plan administrator shall determine whether any document received by it is a Qualified
Domestic Relations Order. In making this determination, the plan administrator may consider the
rules applicable to “domestic relations orders” under Code section 414(p) and ERISA section 206(d),
and such other rules and procedures as it deems relevant.

6. Committees.

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

     b. i. Each Committee shall act at meetings by affirmative vote of a majority of the members of
that Committee. Any determination of action of the Committees may be made or taken by a majority of
a quorum present at any meeting thereof, or without a meeting, by resolution or written memorandum
signed by a majority of the members of the Committees then in office. A member of the Committees
shall not vote or act upon any matter which relates solely to himself or herself as a Participant.
The Chairman or any other member or members of each Committee designated by the Chairman may
execute any certificate or other written direction on behalf of the Committee of which he or she is
a member.

          ii. The Board shall appoint a Chairman from among the members of the Administrative Committee
and a Secretary who may or may not

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be a member of the Administrative Committee. The members of the
Investment Committee will elect one of their members as Chairman and will appoint a Secretary and
any other officers as the Investment Committee may deem necessary. The Committees shall conduct
their business according to the provisions of this Article and the rules contained in the current
edition of Robert’s Rules of Order or such other rules of order the Committees may deem
appropriate. The Committees shall hold meetings from time to time in any convenient location.

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

          i. To construe and interpret the terms and provisions of the SRIP and make all factual
determinations;

          ii. To compute and certify to the amount and kind of benefits payable to participants and
their beneficiaries;

          iii. To maintain all records that may be necessary for the administration of the SRIP;

          iv. To provide for the disclosure of all information and the filing or provision of all
reports and statements to participants, beneficiaries or governmental agencies as shall be required
by law;

          v. To make and publish such rules for the regulation of the SRIP and procedures for the
administration of the SRIP as are not inconsistent with the terms hereof;

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

          vii. To exercise powers granted the Administrative Committee under other Sections of the SRIP;
and

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

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

          i. To oversee the rabbi trust, if any; and

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

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

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

     g. i. The members of the Committees shall serve without compensation for their services
hereunder.

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

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

7. Claims Procedure.

     The standardized “Northrop Grumman Nonqualified Retirement Plans Claims and Appeals
Procedures” shall apply in handling claims and appeals under the SRIP.

8. Amendment and Termination. NGSMSC may, in its sole discretion, terminate, suspend or amend the
SRIP at any time or from time to time, in whole or in part for any reason. This includes the right
to amend or eliminate any of the

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 provisions of the SRIP with respect to lump sum distributions,
including any lump sum calculation factors, whether or not a participant has already made a lump
sum election. Notwithstanding the foregoing, no amendment or termination of the SRIP shall reduce
the amount of a participant’s accrued benefit under the SRIP as of the date of such amendment or
termination.

     No amendment of the SRIP shall apply to the Grandfathered Amounts, unless the amendment
specifically provides that it applies to such amounts. The purpose of this restriction is to
prevent a SRIP amendment from resulting in an inadvertent “material modification” to the
Grandfathered Amounts.

9. Miscellaneous.

     a. As used herein, the masculine gender shall include the feminine gender. To the extent that
any term is not defined under the SRIP, it shall have the same meaning as defined in the SPP.

     b. Employment rights with NGSMSC shall not be enlarged or affected by the existence of the
SRIP.

     c. In case any provision of the SRIP shall be held illegal or invalid for any reason, said
illegality or invalidity shall not affect the remaining provisions.

     d. The SRIP shall be governed by the laws of the State of Ohio to the extent not preempted by
ERISA.

          IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly authorized
officer on this 17th day of December, 2009.

	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

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

Benefits & International 	 

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APPENDIX A

2005-2007 TRANSITION RULES

     This Appendix A provides the distribution rules that apply to the portion of benefits under
the SRIP subject to Code section 409A for participants with benefit commencement dates after
January 1, 2005 and before January 1, 2008.

     A.1 Election. Participants scheduled to commence payments during 2005 may elect to
receive both pre-2005 benefit accruals and 2005 benefit accruals in any optional form of benefit
available under the SRIP as of December 31, 2004. Participants electing optional forms of benefits
under this provision will commence payments on the participant’s selected benefit commencement
date.

     A.2 2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 & Q&A-20, participants
commencing payments in 2005 from the SRIP may elect a form of distribution from among those
available under the SRIP on December 31, 2004, and benefit payments shall begin at the time elected
by the participant.

          a. Key Employees. A Key Employee Separating from Service on or after July 1, 2005,
with SRIP distributions subject to Code section 409A scheduled to be paid in 2006 and within six
months of his date of Separation from Service, shall have such distributions delayed for six months
from the Key Employee’s date of Separation from Service. The delayed distributions shall be paid
as a single sum with interest at the end of the six month period and SRIP distributions will resume
as scheduled at such time. Interest shall be computed using the retroactive annuity starting date
rate in effect under the Northrop Grumman Pension Plan on a month-by-month basis during such period
(i.e., the rate may change in the event the period spans two calendar years). Alternatively, the
Key Employee may elect under IRS Notice 2005-1, Q&A-20 to have such distributions accelerated and
paid in 2005 without the interest adjustment, provided, such election is made in 2005.

          For purposes of Appendix A and Appendix B, A “Key Employee” is an employee treated as a
“specified employee” under Code section 409A(a)(2)(B)(i) of NGSMSC or an Affiliate (i.e., a key
employee (as defined in Code section 416(i) without regard to paragraph (5) thereof)) if NGSMSC’s
or an Affiliate’s stock is publicly traded on an established securities market or otherwise.
NGSMSC shall determine in accordance with a uniform NGSMSC policy which participants are Key
Employees as of each December 31 in accordance with IRS regulations or other guidance under Code
section 409A, provided that in determining the compensation of individuals for this purpose, the
definition of compensation in Treas. Reg. § 1.415(c)-2(d)(3) shall be used. Such
determination shall be effective for the twelve (12) month period commencing on April 1 of the
following year.

 

 

          For purposes of Appendix A and Appendix B, “Separation from Service” or “Separates from
Service” means a “separation from service” within the meaning of Code section 409A.

          b. Lump Sum Option. During 2005, a temporary immediate lump sum feature shall be
available as follows:

               i. In order to elect a lump sum payment pursuant to IRS Notice 2005-1, Q&A-20, a
participant
must be an elected or appointed officer of NGSMSC and eligible to commence payments under the
underlying qualified pension plan on or after June 1, 2005 and on or before December 1, 2005;

               ii. The lump sum payment shall be made in 2005 as soon as feasible after the election; and

               iii. Interest and mortality assumptions and methodology for calculating lump sum amount shall
be based on the SRIP’s procedures for calculating lump sums as of December 31, 2004.

     A.3 2006 and 2007 Commencements. Pursuant to IRS transition relief, for all benefit
commencement dates in 2006 and 2007 (provided election is made in 2006 or 2007), distribution of
SRIP benefits subject to Code section 409A shall begin 12 months after the later of: (a) the
participant’s benefit election date, or (b) the underlying qualified pension plan benefit
commencement date (as specified in the participant’s benefit election form). Payments delayed
during this 12-month period will be paid at the end of the period with interest. Interest shall be
computed using the retroactive annuity starting date rate in effect under the Northrop Grumman
Pension Plan on a month-by-month basis during such period (i.e., the rate may change in the event
the period spans two calendar years).

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APPENDIX B

POST 2007 DISTRIBUTION OF 409A AMOUNTS

     The provisions of this Appendix B shall apply only to the portion of benefits under the SRIP
that are subject to Code section 409A with benefit commencement dates on or after January 1, 2008.
Distribution rules applicable to the Grandfathered Amounts are set forth in Section 4, and Appendix
A addresses distributions of amounts subject to Code section 409A with benefit commencement dates
after January 1, 2005 and prior to January 1, 2008.

     B.1 Time of Distribution. Subject to the special rules provided in this Appendix B,
distributions to a participant of his vested retirement benefit shall commence as of the 1st of the
month coincident with or following the later of (a) the date the participant attains age 55, or (b)
the date the participant Separates from Service (“Payment Date”).

     B.2 Special Rule for Key Employees. If a participant is a Key Employee and age 55 or
older at his Separation from Service, distributions to the participant shall commence on the first
day of the seventh month following the date of his Separation from Service (or, if earlier, the
date of the participant’s death). Amounts otherwise payable to the participant during such period
of delay shall be accumulated and paid on the first day of the seventh month following the
participant’s Separation from Service, along with interest on the delayed payments. Interest shall
be computed using the retroactive annuity starting date rate in effect under the Northrop Grumman
Pension Plan on a month-by-month basis during such delay (i.e., the rate may change in the event
the delay spans two calendar years).

     B.3 Forms of Distribution. Subject to the special rules provided in this Appendix B,
a participant’s vested retirement benefit shall be distributed in the form of a single life
annuity. However, a participant may elect an optional form of benefit up until the Payment Date.
The optional forms of payment are:

	 	a.	 	50% joint and survivor annuity
	 
	 	b.	 	75% joint and survivor annuity
	 
	 	c.	 	100% joint and survivor annuity.

     If a participant is married on his Payment Date and elects a joint and survivor annuity, his
survivor annuitant will be his spouse unless some other survivor annuitant is named with spousal
consent. Spousal consent, to be effective, must be submitted in writing before the Payment Date
and must be witnessed by a SRIP representative or notary public. No spousal consent is
necessary if NGSMSC determines that there is no spouse or that the spouse cannot be found.

 

 

     B.4 Death. If a married participant dies before the Payment Date, a death benefit
will be payable to the participant’s spouse commencing 90 days after the participant’s death. The
death benefit will be a single life annuity in an amount equal to the survivor portion of a
participant’s vested retirement benefit based on a 100% joint and survivor annuity determined on
the participant’s date of death. This benefit is also payable to a participant’s domestic partner
who is properly registered with NGSMSC in accordance with procedures established by NGSMSC.

     B.5 Actuarial Assumptions. Except as provided in Section B.6, all forms of payment
under this Appendix B shall be actuarially equivalent life annuity forms of payment, and all
conversions from one such form to another shall be based on the following actuarial assumptions:

     Interest Rate:           6%

     Mortality Table:         RP-2000 Mortality Table projected 15 years for future standardized cash balance factors

     B.6 Accelerated Lump Sum Payouts.

          a. Post-2007 Separations. Notwithstanding the provisions of this Appendix B, for
participants who Separate from Service on or after January 1, 2008, if the present value of (a) the
vested portion of a participant’s retirement benefit and (b) other vested amounts under nonaccount
balance plans that are aggregated with the retirement benefit under Code section 409A, determined
on the first of the month coincident with or following the date of his Separation from Service, is
less than or equal to $25,000, such benefit amount shall be distributed to the participant (or his
spouse or domestic partner, if applicable) in a lump sum payment. Subject to the special timing
rule for Key Employees under Section B.2, the lump sum payment shall be made within 90 days after
the first of the month coincident with or following the date of the participant’s Separation from
Service.

          b. Pre-2008 Separations. Notwithstanding the provisions of this Appendix B, for
participants who Separate from Service before January 1, 2008, if the present value of (a) the
vested portion of a participant’s retirement benefit and (b) other vested amounts under nonaccount
balance plans that are aggregated with the retirement benefit under Code section 409A, determined
on the first of the month coincident with or following the date the participant attains age 55, is
less than or equal to $25,000, such benefit amount shall be distributed
to the participant (or his spouse or domestic partner, if applicable) in a lump sum payment
within 90 days after the first of the month coincident with or following the date the participant
attains age 55, but no earlier that January 1, 2008.

- 2 -

 

          c. Conflicts of Interest. The present value of a participant’s vested retirement
benefit shall also be payable in an immediate lump sum to the extent required under conflict of
interest rules for government service and permissible under Code section 409A.

          d. Present Value Calculation. The conversion of a participant’s retirement benefit
into a lump sum payment and the present value calculations under this Section B.6 shall be based on
the actuarial assumptions in effect under the Northrop Grumman Pension Plan for purposes of
calculating lump sum amounts, and will be based on the participant’s immediate benefit if the
participant is 55 or older at Separation from Service. Otherwise, the calculation will be based on
the benefit amount the participant will be eligible to receive at age 55.

     B.7 Effect of Early Taxation. If the participant’s benefits under the SRIP are
includible in income pursuant to Code section 409A, such benefits shall be distributed immediately
to the participant.

     B.8 Permitted Delays. Notwithstanding the foregoing, any payment to a participant
under the SRIP shall be delayed upon NGSMSC’s reasonable anticipation of one or more of the
following events:

	 	a.	 	NGSMSC’s deduction with respect to such payment would be eliminated by
application of Code section 162(m); or
	 
	 	b.	 	The making of the payment would violate Federal securities laws or other
applicable law;

provided, that any payment delayed pursuant to this Section B.8 shall be paid in accordance with
Code section 409A.

- 3 -

 

Schedule A

Article 2

BENEFITS

2.1 Computation of Benefits.

     a. Total Benefit Objective. Total retirement benefits from the Company, coupled with
expected Social Security benefits, are designed to provide a level of income during retirement
based on the Member’s service and income while with the Company. The Benefit Objective (as
determined on or prior to Normal Retirement Date) for a Member who retires on or after his/her
Normal Retirement Date with 20 or more years of Benefit Service (Benefit Service accrues to age
65), is 45% of the Member’s Average Annual Compensation for the five highest consecutive plan years
of his/her employment with the Company. For Members who retire with less than 20 years of Benefit
Service, the Benefit Objective is the amount calculated above reduced by multiplying that amount by
a fraction the numerator of which is the number of years of Benefit Service and the denominator of
which is 20. The Benefit Objective, as defined above, is intended to be met by unreduced
retirement income (without any reductions associated with any payment option) from both the
Company’s Retirement Plan and Supplemental Executive Retirement Plan plus the unreduced Social
Security Benefit (commencing as late as age 67).

     b. Calculation of Benefits Under This Plan. The benefit payable under this Plan shall
be equal to the Benefit Objective as stated in paragraph a. above, reduced, as applicable, by the
factors and in accordance with the provisions set forth for such purposes in the Retirement Plan,
(i) for commencement prior to Normal Retirement Date, (ii) for election of a form of payment other
than life only to the Member, and (iii) upon death, less the Retirement Plan Benefit and the
unreduced Social Security Benefit as stated in paragraph a. above. If the benefit payable under
this plan according to the preceding sentence plus the Retirement Plan Benefit is less than the
Target Benefit Amount, as hereinafter defined, the benefit payable under this Plan shall be equal
to the Target Benefit Amount less the Retirement Plan Benefit. The Target Benefit Amount shall
mean $90,000, reduced, as applicable, by the factors and in accordance with the provisions set
forth for such purposes in the Retirement Plan, (i) for commencement prior to Normal Retirement
Date, (ii) for election of a form of payment other than life only to the Member, and (iii) upon
death.

2.2 Form of Benefit Payments.

 

 

The benefit payable to or on behalf of a Member as determined under Section 2.1 shall be paid in
the same form, and to the same beneficiary, if any, as the Member’s benefit under the Retirement
Plan.

2.3 Time of Benefit Payments.

Benefits due under this Plan shall be paid coincident with the payment date of benefits under the
Retirement Plan.

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Schedule B

APPENDIX A

ASTRO AEROSPACE CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

i 

 

ASTRO AEROSPACE CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II DESIGNATION OF COVERED EXECUTIVES
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III RETIREMENT BENEFITS
	 	 	5	 
	3.01 Retirement Allowance on Normal or Postponed Retirement Date
	 	 	5	 
	3.02 Retirement Allowance on Early Retirement Date
	 	 	5	 
	3.03 Payment of Retirement Allowance
	 	 	6	 
	3.04 Retirement Allowance Payable to Surviving Spouse of a Covered Executive
	 	 	6	 
	3.05 Deeming Rule
	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV TERMINATION OF SERVICE
	 	 	7	 
	4.01 Termination Benefits
	 	 	7	 
	4.02 Early Commencement of Deferred Retirement Allowance
	 	 	7	 
	4.03 Applicable Provisions
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V DEATH BENEFITS
	 	 	8	 
	5.01 Benefits on Covered Executive’s Death Prior to Retirement
	 	 	8	 
	5.02 Benefits on a Former Covered Executive’s Death Prior to Retirement
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VI DISABILITY BENEFITS
	 	 	10	 
	6.01 Disabled Covered Executives
	 	 	10	 
	6.02 Disability Retirement
	 	 	10	 
	6.03 Applicable Provisions
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VII ADMINISTRATION
	 	 	11	 
	 
	 	 	 	 
	ARTICLE VIII AMENDMENT OR TERMINATION OF THE PLAN
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IX CLAIMS REVIEW PROCEDURE
	 	 	13	 
	9.01 Denial of Benefits
	 	 	13	 
	9.02 Notice
	 	 	13	 
	9.03 Appeals Procedure
	 	 	13	 
	9.04 Review
	 	 	13	 

ii 

 

	 	 	 	 	 
	ARTICLE X GENERAL
	 	 	14	 
	10.01 No Employment Rights
	 	 	14	 
	10.02 No Claim Against the Company
	 	 	14	 
	10.03 Incompetence
	 	 	14	 
	10.04 Nonassignability
	 	 	14	 
	10.05 Continuance of Payments
	 	 	14	 
	10.06 Notice
	 	 	15	 
	10.07 Gender and Number
	 	 	15	 
	10.08 Corporate Successors
	 	 	15	 
	10.09 Unclaimed Benefits
	 	 	15	 
	10.10 Withholding; Employment Taxes
	 	 	15	 
	10.11 Validity
	 	 	15	 
	10.12 Applicable Law
	 	 	15	 

iii 

 

ASTRO AEROSPACE CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

INTRODUCTION

     The purpose of this Supplemental Executive Retirement Plan (the “Plan”) is to provide a
further means whereby Astro Aerospace Corporation (the “Corporation”) may afford financial security
to a select group of Covered Executives of the Corporation, who render valuable services to the
Corporation, constituting an important contribution toward its continued growth and success, by
providing for additional future compensation so that such employees may be retained and their
productive efforts encouraged, all as provided herein. Retirement Allowances under this
Supplemental Executive Retirement Plan are in addition to benefits payable under the Astro
Aerospace Corporation Employees’ Pension Plan and any other qualified retirement plan maintained by
the Corporation.

 

 

ARTICLE I

DEFINITIONS

     (a) “Administrator” means the Corporation which shall be responsible for the administration of
this Plan.

     (b) “Astro Pension Plan” means the Astro Aerospace Corporation Employees’ Pension Plan, as
amended from time to time.

     (c) “Affiliate” means a member of a controlled group of corporations, within the meaning of
section 414(b) of the Internal Revenue Code (“Code”), which includes the Corporation; a trade or
business (whether or not incorporated) which is in common control with the Corporation as
determined in accordance with section 414(c) of the Code; or any organization which is a member of
an affiliated service group, within the meaning of section 414(m) of the Code, which includes the
Corporation, and any other organization required to be aggregated with the Corporation pursuant to
section 414(o) of the Code.

     (d) “Corporation” means Astro Aerospace Corporation.

     (e) “Covered Executive” means a person who is a member of the Astro Pension Plan and who is
designated by the board of directors of the Corporation as being eligible to receive a Retirement
Allowance.

     (f) “Covered Service” means, with respect to a Covered Executive, a number of years and
completed months equal to his period of “Service” for purposes of the Astro Pension Plan. For
purposes of this Plan, “Service”, as defined under the Astro Pension Plan, shall include Service
with the Corporation and its Affiliates. Covered Service shall not exceed 35 years.

     (g) “Early Retirement Date” means retirement from employment with Corporation and all
Affiliates after attaining age 55 with 10 years of Covered Service.

     (h) “Effective Date” means September 1, 1993.

     (i) “Final Average Earnings” shall have the meaning ascribed under the terms of the Spar
Pension Plan except that it will not be subject to the compensation limitation imposed by Internal
Revenue Code Section 401(a)(17).

     (j) “Former Covered Executive” means a Covered Executive who is no longer an active Covered
Executive of the Plan but who remains entitled to benefits under the Plan and is not yet receiving
a Retirement Allowance.

- 2 -

 

     (k) “Normal Retirement Date” means retirement from employment with Corporation and all
Affiliates after attaining age 65.

     (l) “Postponed Retirement Date” means the actual retirement date of a Covered Executive who
continues employment with the Corporation or any Affiliate beyond Normal Retirement Date.

     (m) “Plan” means the plan to provide Retirement Allowances set forth herein and as amended
from time to time, which shall be known as the Astro Aerospace Corporation Supplemental Executive
Retirement Plan.

     (n) “Plan Year” means the period January 1 to December 31.

     (o) “Retired Executive” means a Covered Executive or Former Covered Executive who has retired
and is receiving a Retirement Allowance under the Plan.

     (p) “Retirement Allowance” means an amount payable to a Covered Executive, a Former Covered
Executive or a Spouse under the terms of the Plan.

     (q) “Spar Pension Plan” or “Registered Plan” means the Spar Aerospace Limited Pension Plan for
Executive Employees, as amended from time to time.

     (r) “Spar SERP” means the Spar Aerospace Limited Supplemental Executive Retirement Plan.

     (s) “Spouse” means, with respect to a (Former) Covered Executive, that person to whom the
(Former) Covered Executive is lawfully married at the relevant time.

     (t) “Total and Permanent Disability” means a physical or mental condition which results in a
Covered Executive being eligible to receive disability benefits under the federal Social Security
program, or under any formal program of long-term disability insurance provided by the Corporation
or its Affiliates.

- 3 -

 

ARTICLE II

DESIGNATION OF COVERED EXECUTIVES

The Board of Directors of the Corporation (“Board”) shall, from time to time, in its discretion,
designate as Covered Executives, for the purposes of the Plan, individuals who are members of the
Astro Pension Plan. Once an individual is designated as a Covered Executive, the Board shall
notify such Covered Executive in writing of his designation and shall provide him with a copy of
the Plan.

- 4 -

 

ARTICLE III

RETIREMENT BENEFITS

3.01 Retirement Allowance on Normal or Postponed Retirement Date. A Covered Executive retiring on
his Normal Retirement Date or on his Postponed Retirement Date shall be entitled to receive a
monthly Retirement Allowance equal to the excess of:

     (a) 1/12 x 2% x the Covered Executive’s Final Average Earnings multiplied by his Covered
Service; over

     (b) The sum of the monthly benefits payable to the Covered Executive under the Astro Pension
Plan and any other qualified retirement plan to the extent such benefits are attributable to
contributions of the Corporation or its Affiliates on the Covered Executive’s behalf, excluding
employee deferrals and employer matching contributions under the Astro Aerospace Corporation 401(k)
Savings Plan (“401(k) Plan”).

     The benefits payable or benefits that would be payable under (a) and (b) above shall be
determined as follows:

          (i) under the Astro Pension Plan (or any other defined benefit plan of the Corporation or its
Affiliates in which the Covered Executive participates or participated) assuming a straight life
annuity form of benefit; and

          (ii) under any defined contribution plan of the Corporation or its Affiliates in which the
Covered Executive participates or participated assuming the Covered Executive’s account balance(s)
attributable to contributions by the Corporation or its Affiliates (other than elective salary
deferrals, other employee contributions, employer matching contributions and earnings thereon) is
paid in the form of a single life annuity beginning on the date the payment of the Retirement
Allowance commences.

     When determining the amount of the Covered Executive’s benefits in any plan, any such benefits
paid out prior to the date on which the Retirement Allowance is determined (e.g., hardship
withdrawals, payments pursuant to a qualified domestic relations order or other in-service
withdrawal) shall be treated as if no such payment was made and shall be included in the
calculation of (a) and (b) above in accordance with Section 3.05 herein.

3.02 Retirement Allowance on Early Retirement Date. A Covered Executive who retires on an Early
Retirement Date shall be entitled to receive a Retirement Allowance commencing on his Early
Retirement Date calculated in accordance with Section 3.01 provided that:

- 5 -

 

     (a) The amounts in Subsection 3.01(a) and 3.01(b) will be reduced to take into account the
early receipt of the Retirement Allowance. The reduction will be calculated consistent with the
actuarial reduction applied to the benefit under the Astro Pension Plan; and

     (b) The benefits under the Astro Pension Plan and any other qualified retirement plan of the
Corporation or its Affiliates will be determined according to the applicable terms of such plan(s)
at the Early Retirement Date.

3.03 Payment of Retirement Allowance. Retirement Allowances shall be paid on the first day of each
month commencing after the Covered Executive’s Normal Retirement Date, Early Retirement Date or
Postponed Retirement Date, as the case may be, and, subject to Section 3.04, ceasing with the 360th
monthly payment or, if earlier, the payment made coincident with or immediately preceding the death
of the Covered Executive.

3.04 Retirement Allowance Payable to Surviving Spouse of a Covered Executive. If a Covered
Executive who has a Spouse at the date payment of his Retirement Allowance commences, dies after
retirement but before receiving 360 monthly payments of his Retirement Allowance under the Plan,
such Spouse is entitled to receive a monthly amount equal to 66 2/3% of the monthly
amount paid to the Covered Executive in the month immediately preceding his date of death from the
Plan.

     This monthly amount is payable to the Spouse for the balance of the 360 payments or until the
death of the Spouse, whichever occurs first.

3.05 Deeming Rule. If the benefits payable to a Covered Executive or his Spouse under the Astro
Pension Plan or any other qualified plan of the Corporation or its Affiliates are (were):

          (i) commuted at the election of the Covered Executive or his Spouse, or;

          (ii) divided pursuant to a decree, order or judgment of a competent tribunal, or a written
separation agreement, relating to a division of property between the Covered Executive and his
Spouse or former Spouse in settlement of rights arising out of their marriage or other conjugal
relationship, on or after the breakdown of the marriage or other relationship; for the purposes of
calculating the amount of the Covered Executive’s or the surviving Spouse’s Retirement Allowance,
the benefits payable under such plans shall be deemed to be equal to the amount of the benefit that
would have been payable if such election to commute or such division of the benefits under the
plans had not been made and payment of such benefits commenced at the same time as the Retirement
Allowance.

- 6 -

 

ARTICLE IV

TERMINATION OF SERVICE

4.01 Termination Benefits. A Covered Executive, who has been a member of the Astro Pension Plan
for 24 continuous months and whose employment with the Corporation and its Affiliates is terminated
for any reason other than retirement or death prior to his Normal Retirement Date, shall be
entitled to a Retirement Allowance commencing, subject to Section 4.02, on his Normal Retirement
Date. The Retirement Allowance shall be determined in accordance with section 3.01.

4.02 Early Commencement of Deferred Retirement Allowance. A Former Covered Executive who is
entitled to a Retirement Allowance payable under the terms of Section 4.01 who has elected to
receive Early Retirement benefits under the Astro Pension Plan will commence receipt of his
Retirement Allowance prior to his Normal Retirement Date coincident with the commencement of
benefit payments from the Astro Pension Plan provided that he attained the age of 55 and had ten
(10) years of Covered Service on his date of termination. The Retirement Allowance payable from
such date shall be reduced to take into account the early receipt of the Retirement Allowance. The
reduction will be calculated consistent with the actuarial reduction which would be applied under
the Astro Pension Plan for an Early Retirement.

4.03 Applicable Provisions. The provisions of Section 3.03 and 3.04 apply to Retirement Allowances
paid under Article IV, with such wording changes as may be necessary. However, the provisions of
Article V shall apply when a Former Covered Executive dies prior to commencement of his Retirement
Allowance.

- 7 -

 

ARTICLE V

DEATH BENEFITS

5.01 Benefits on Covered Executive’s Death Prior to Retirement. If a Covered Executive dies prior
to commencement of a Retirement Allowance, the person who is his Spouse at the date of his death
shall be entitled to a monthly amount equal to the excess of:

     (a) 66 2/3% of the amount in Subsection 3.01(a) of the Plan calculated at the date
of the Covered Executive’s death,
less

     (b) an amount, if any, equal to the sum of the monthly survivor benefits from the Astro
Pension Plan and any other qualified plan of the Corporation or Affiliate payable to the Spouse in
the same month.

     The actual benefits under the Astro Pension Plan and any other qualified plan of the
Corporation or Affiliate will be determined according to the applicable terms of such plan(s) at
the date of the Covered Executive’s death and shall not include benefits attributable to the
Covered Executive’s salary deferrals or matching contributions and earnings thereon under the
401(k) Plan.

     Payment of the Spouse’s benefit will commence on the first day of the month following the
Covered Executive’s date of death.

     This monthly amount is payable to the Spouse for 360 monthly payments or until the death of
the Spouse, whichever occurs first.

5.02 Benefits on a Former Covered Executive’s Death Prior to Retirement. If a Former Covered
Executive dies prior to commencement of a Retirement Allowance, his Spouse at the date of death
shall be entitled to receive a Retirement Allowance equal to the Retirement Allowance calculated in
accordance with Section 5.01 provided that:

     (a) The amounts in subsection 3.01 will be reduced to take into account the early receipt of
the Retirement Allowance. The reduction will be calculated consistent with the actuarial reduction
applied to the benefit under the Astro Pension Plan; and

     (b) The actual benefits under the Astro Pension Plan and any other qualified plan of the
Corporation or Affiliate will be determined according to the applicable terms of such plan(s) at
the Former Covered Executive’s date of termination of employment with the Corporation and its
Affiliates.

- 8 -

 

     Payment of the Spouse’s benefit will commence on the later of (1) first day of the month
following the Former Covered Executive’s date of death, (2) the Annuity Starting Date (as defined
under the Astro Pension) elected by the surviving Spouse, or (3) the first date the surviving
Spouse receives payment of the death benefit under the Astro Pension Plan.

     This monthly amount is payable to the Spouse for 360 monthly payments or until the death of
the Spouse, whichever occurs first.

- 9 -

 

ARTICLE VI

DISABILITY BENEFITS

6.01 Disabled Covered Executives. A Covered Executive who is receiving benefits under a long-term
disability benefit plan designated by the Corporation shall continue to be a Covered Executive.
Such Covered Executive’s Covered Service shall continue to accrue during the covered disability.
The Covered Executive’s Final Average Earnings while on disability shall be deemed to be equal to
the Final Average Earnings in effect immediately preceding the commencement of the disability.

If the disabled Covered Executive does not return to active employment with the Corporation or any
Affiliate, he will be entitled to receive a Retirement Allowance commencing, subject to Section
6.02, on his Normal Retirement Date calculated in accordance with Section 3.01, based on his Final
Average Earnings on his date of disability and his Covered Service at his Normal Retirement Date.

6.02 Disability Retirement. A Covered Executive who, while in the employ of the Corporation or any
Affiliate and, prior to his Normal Retirement Date:

     (1) incurs a Total and Permanent Disability;

     (2) does not qualify or ceases to qualify for benefits under any salary continuance or
long-term disability benefits plan designated by the Corporation, or any applicable Worker’s
Compensation legislation; and

     (3) retires under the Astro Pension Plan;

will be entitled to receive a Retirement Allowance coincident with the commencement of the payment
of his benefit under the Astro Pension Plan. Such Retirement Allowance shall be equal to the
amount calculated in accordance with Section 3.02 based on his Final Average Earnings on his date
of disability and his Covered Service at his date of retirement.

6.03 Applicable Provisions. The provisions of Sections 3.03 and 3.04 apply to Retirement
Allowances paid under Article VI, with such wording changes as may be necessary. However, the
provisions of Article V shall apply when a disabled Covered Executive dies prior to commencement of
his Retirement Allowance.

- 10 -

 

ARTICLE VII

ADMINISTRATION

The Corporation is the Administrator of the Plan. The Administrator shall be responsible for the
general administration of the Plan and shall perform all administrative functions and shall
interpret, construe and apply the Plan provisions in accordance with its terms. The Corporation as
Administrator may establish, adopt or revise rules and regulations as it deems necessary or
advisable for the administration of the Plan. The Corporation may consult with and rely upon the
advice of such counsel, actuaries and other advisors as it shall see fit.

- 11 -

 

ARTICLE VIII

AMENDMENT OR TERMINATION OF THE PLAN

It is the intention of the Corporation in establishing the Plan that it should operate to the
indefinite future. The Corporation does however, reserve the sole right to terminate the Plan at
any time. The Corporation further reserves the right in its sole discretion to amend the Plan in
any respect; provided, however, that no such amendment that reduces the value of the benefits
therefore accrued by the Covered Executive shall be effective unless the Covered Executive consents
to such amendment in writing.

In the event of termination of the Plan, the value of the benefits accrued by the Covered Executive
at the time of termination will be determined assuming the Astro Pension Plan and all other
qualified retirement plans of the Corporation and it’s Affiliates are terminated at the same time.
Any amendment or termination shall be made pursuant to a resolution of the Board of Directors of
the Corporation and shall be effective as of the date specified in such resolution.

- 12 -

 

ARTICLE IX

CLAIMS REVIEW PROCEDURE

9.01 Denial of Benefits. If a Retirement Allowance under the Plan is wholly or partially denied,
notice of the decision shall be furnished to the Covered or Former Covered Executive or Spouse
(claimant) as the case may be by the Administrator within a reasonable period of time after such
decision is reached.

9.02 Notice. Any claimant who is denied a claim for Benefits shall be furnished written notice
setting forth:

     (a) the specific reason or reasons for the denial;

     (b) specific reference to the pertinent provision of the Plan upon which the denial is based;

     (c) a description of any additional material or information necessary for the claimant to
perfect the claim; and

     (d) an explanation of the claim review procedure under the Plan.

9.03 Appeals Procedure. In order that a claimant may appeal a denial of a claim, the claimant or
the claimant’s duly authorized representative may:

     (a) request a review by written application to the Administrator, or its designate, no later
than 60 days after receipt by the claimant of written notification of denial of a claim;

     (b) review pertinent documents; and

     (c) submit issues and comments in writing.

9.04 Review. A decision on review of a denied claim shall be made not later than 60 days after
receipt of a request for review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered within a reasonable period of time, but not
later than 120 days after receipt of a request for review. The decision on review shall be in
writing and shall include the specific reason(s) for the decision and the specific reference(s) to
the pertinent provisions of the Plan on which the decision is based.

- 13 -

 

ARTICLE X

GENERAL

10.01 No Employment Rights. Nothing herein shall constitute a contract of continuing employment or
in any manner obligate the Corporation to continue the service of a Covered Executive, or obligate
a Covered Executive to continue in the service of the Corporation, and nothing herein shall be
construed as fixing or regulating the compensation paid to Covered Executive.

10.02 No Claim Against the Company. Neither a Covered Executive nor any other person shall acquire
by reason of the Plan any right in or title to any assets, funds or property of the Corporation
whatsoever including, without limiting the generality of the foregoing, any specific funds or
assets which the Corporation, in its sole discretion, may set aside in anticipation of a liability
hereunder. Any trust which is created in connection with this Plan or any agreement shall provide
that the assets of the trust are subject to the claims of the Corporation’s general creditors. A
Covered Executive shall have only a Contractual right to the amounts, if any, payable hereunder
unsecured by any asset of the Corporation.

10.03 Incompetence. If the Administrator determines that any person entitled to any payment
hereunder is incompetent by reason of any physical or mental disability, and consequently unable to
give a valid receipt, the Administrator may cause any payment due to such person to be made to
another person for his benefit, without responsibility on the part of the Administrator to follow
the application of such funds. Payment made pursuant to this section 10.03 shall operate as a
complete discharge of the responsibility of the Administrator.

10.04 Nonassignability. Neither a Covered Executive 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 the amounts, if any, payable hereunder, or any
part thereof, which are, and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance
owed by a Covered Executive or any other person, nor be transferable by operation of law in the
event of a Covered Executive’s or any other person’s bankruptcy or insolvency.

10.05 Continuance of Payments. The payment of a Retirement Allowance to a Covered Executive or
Former Covered Executive, or to his surviving Spouse, is subject to satisfactory proof of the
existence of a Covered Executive or Former Covered Executive, or his surviving Spouse, as the case
may be, as may be required from time to time by the Administrator.

- 14 -

 

10.06 Notice. Any notice required or permitted to be given to the Administrator of the Plan shall
be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the
principal office of the Corporation, directed to the attention of the Administrator. Such notice
shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date
shown on the postmark or on the receipt for registration or certification.

10.07 Gender and Number. Wherever appropriate herein, the masculine may mean the feminine and the
singular may mean the plural or vice versa.

10.08 Corporate Successors. The Plan shall not be automatically terminated by a transfer or sale
of assets of the Corporation or the merger or consolidation of the Corporation into or with any
other corporation or other entity, but the Plan shall be continued after such sale, merger or
consolidation only if and to the extent that the transferee, purchaser or successor entity agrees
to continue the Plan. In the event that the Plan is not continued by the transferee, purchaser or
successor entity, then the Plan shall terminate subject to the provisions of Article VIII.

10.09 Unclaimed Benefits. Each Covered Executive shall keep the Corporation informed of his
current address and the current address of his Spouse. The Corporation shall not be obligated to
search for the whereabouts of any person. If the location of a Covered Executive is not made known
to the Corporation within three (3) years after the date on which payment of the Covered
Executive’s Retirement Allowance may first be made, payment may be made as though the Covered
Executive had died at the end of the three-year period. If, within one additional year after such
three-year period has elapsed, or, within three years after the actual death of a Covered
Executive, the Corporation is able to locate any surviving Spouse of the Covered Executive, then
the Corporation shall have no further obligation to pay any benefit hereunder to such Covered
Executive or surviving Spouse or any other person and such benefit shall be irrevocably forfeited.

10.10 Withholding; Employment Taxes. To the extent required by the law in effect at the time
payments are made, the Corporation shall withhold from payments made hereunder any taxes required
to be withheld by the Federal or any state or local government.

10.11 Validity. In the event any provision of this Plan is held invalid, void or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of any other provision of this
Plan.

10.12 Applicable Law. This Plan shall be governed and construed in accordance with the laws of the
State of California.

- 15 -exv10wl

Exhibit 10(l)

NORTHROP GRUMMAN

ELECTRONIC SYSTEMS EXECUTIVE PENSION PLAN

(Amended and Restated Effective as of January 1, 2009)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1—Introduction
	 	 	2	 
	Section 1.01. Introduction
	 	 	2	 
	Section 1.02. Effective Date
	 	 	2	 
	Section 1.03. Sponsor
	 	 	2	 
	Section 1.04. Predecessor Plan
	 	 	2	 
	Section 1.05. 2001 Reorganization
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 2—Definitions
	 	 	3	 
	Section 2.01. Affiliated Companies
	 	 	3	 
	Section 2.02. Annual Incentive Programs
	 	 	3	 
	Section 2.03. Average Annual Compensation
	 	 	3	 
	Section 2.04. Board
	 	 	3	 
	Section 2.05. Code
	 	 	3	 
	Section 2.06. Committee
	 	 	3	 
	Section 2.07. Company
	 	 	3	 
	Section 2.08. Defined Contribution Plan
	 	 	3	 
	Section 2.09. Designated Entity
	 	 	3	 
	Section 2.10. ERISA
	 	 	3	 
	Section 2.11. ES Pension Plan
	 	 	3	 
	Section 2.12. Executive
	 	 	3	 
	Section 2.13. Executive Benefit Service
	 	 	4	 
	Section 2.14. Executive Pension Base
	 	 	4	 
	Section 2.15. Executive Pension Supplement
	 	 	4	 
	Section 2.16. Grandfathered Amounts
	 	 	4	 
	Section 2.17. Key Employee
	 	 	4	 
	Section 2.18. Maximum Contribution
	 	 	5	 
	Section 2.19. Participating Company
	 	 	5	 
	Section 2.20. Payment Date
	 	 	5	 
	Section 2.21. Pension Plan and Pension Plans
	 	 	5	 
	Section 2.22. Plan
	 	 	6	 
	Section 2.23. Qualified Plan Benefit
	 	 	6	 
	Section 2.24. Retirement Eligible
	 	 	6	 
	Section 2.25. Separation from Service or Separates from Service
	 	 	7	 
	Section 2.26. Westinghouse
	 	 	7	 
	Section 2.27. Westinghouse Acquisition
	 	 	7	 
	Section 2.28. Westinghouse Plan
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 3—Qualification for Benefits; Mandatory Retirement
	 	 	8	 
	Section 3.01. Qualification for Benefits
	 	 	8	 
	Section 3.02. Mandatory Retirement
	 	 	8	 
	Section 3.03. Certain Transfers
	 	 	8	 
	 
	 	 	 	 
	ARTICLE 4—Calculation of Executive Pension Supplement
	 	 	10	 
	Section 4.01. In General
	 	 	10	 

 

 

	 	 	 	 	 
	Section 4.02. Amount
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 5—Death in Active Service
	 	 	11	 
	Section 5.01. Eligibility For an Immediate Benefit
	 	 	11	 
	Section 5.02. Calculation of Immediate Benefit
	 	 	11	 
	Section 5.03. Eligibility For a Deferred Benefit
	 	 	11	 
	Section 5.04. Calculation of Deferred Benefit
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 6—Executive Pension Base
	 	 	12	 
	Section 6.01. In General
	 	 	12	 
	Section 6.02. Executive Pension Base
	 	 	12	 
	Section 6.03. Average Annual Compensation
	 	 	12	 
	Section 6.04. Annual Incentive Programs
	 	 	13	 
	Section 6.05. Executive Benefit Service
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 7—Payment of Benefits
	 	 	15	 
	Section 7.01. Limitation on Benefits
	 	 	15	 
	Section 7.02. Normal Form and Commencement of Benefits
	 	 	15	 
	Section 7.03. Guaranteed Benefit
	 	 	15	 
	Section 7.04. Guaranteed Surviving Spouse Benefit
	 	 	15	 
	Section 7.05. Lump Sum Payments
	 	 	15	 
	Section 7.06. Mandatory Cashout
	 	 	16	 
	Section 7.07. Optional Payment Forms
	 	 	16	 
	Section 7.08. Rehires
	 	 	17	 
	Section 7.09. Special Tax Distribution
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 8—Conditions to Receipt of Executive Pension Supplement
	 	 	18	 
	Section 8.01. Non-Competition Condition
	 	 	18	 
	Section 8.02. Breach of Condition
	 	 	18	 
	Section 8.03. Waiver After 65
	 	 	18	 
	 
	 	 	 	 
	ARTICLE 9—Administration
	 	 	19	 
	Section 9.01. Committee
	 	 	19	 
	Section 9.02. Claims Procedures
	 	 	19	 
	Section 9.03. Trust
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 10—Modification or Termination
	 	 	20	 
	Section 10.01. Amendment and Plan Termination
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 11—Miscellaneous
	 	 	21	 
	Section 11.01. Benefits Not Assignable
	 	 	21	 
	Section 11.02. Facility of Payment
	 	 	21	 
	Section 11.03. Committee Rules
	 	 	22	 
	Section 11.04. Limitation on Rights
	 	 	22	 
	Section 11.05. Benefits Unsecured
	 	 	22	 
	Section 11.06. Governing Law
	 	 	22	 
	Section 11.07. Severability
	 	 	22	 

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	Section 11.08. Expanded Benefits
	 	 	22	 
	Section 11.09. Plan Costs
	 	 	22	 
	Section 11.10. Termination of Participation
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 12—Change in Control
	 	 	23	 
	Section 12.01. Definition
	 	 	23	 
	Section 12.02. Vesting and Funding Rules
	 	 	24	 
	Section 12.03. Special Retirement Provisions
	 	 	24	 
	Section 12.04. Calculation of Present Value
	 	 	24	 
	Section 12.05. Calculation of Offset
	 	 	25	 
	Section 12.06. Limitation on Amendment, Suspension and Termination
	 	 	25	 
	 
	 	 	 	 
	APPENDIX A—Executive Buyback
	 	 	26	 
	Section A.01. Introduction
	 	 	26	 
	Section A.02. Buy Back Offer
	 	 	26	 
	Section A.03. One-Time Opportunity
	 	 	26	 
	Section A.04. Payment
	 	 	26	 
	Section A.05. Refund of Buy Back Payment
	 	 	26	 
	Section A.06. Effective Date
	 	 	27	 
	 
	 	 	 	 
	APPENDIX B—Rehired Executives
	 	 	28	 
	Section B.01. Retired Executives Rehired as Executives
	 	 	28	 
	Section B.02. Former Executives with Vested Pensions Rehired as Executives
	 	 	29	 
	Section B.03. Retired Executives Rehired in Non-Executive Positions
	 	 	29	 
	Section B.04. Events That Span Westinghouse Acquisition
	 	 	30	 
	Section B.05. Breaks Spanning March 1, 1996
	 	 	30	 
	 
	 	 	 	 
	APPENDIX C—Coordination With Westinghouse Plan
	 	 	32	 
	Section C.01. In General
	 	 	32	 
	Section C.02. Pre-Acquisition Benefits
	 	 	32	 
	Section C.03. Coordination of Pre and Post-Acquisition Benefits
	 	 	32	 
	Section C.04. No Duplication of Benefits
	 	 	32	 
	 
	 	 	 	 
	APPENDIX D 2005-2007 Transition Rules
	 	 	33	 
	Section D.01. Election
	 	 	33	 
	Section D.02. 2005 Commencements
	 	 	33	 
	Section D.03. 2006 and 2007 Commencements
	 	 	34	 
	 
	 	 	 	 
	APPENDIX E Post 2007 Distribution of 409A Amounts
	 	 	35	 
	Section E.01. Time of Distribution
	 	 	35	 
	Section E.02. Special Rule for Key Employees
	 	 	35	 
	Section E.03. Forms of Distribution
	 	 	35	 
	Section E.04. Death
	 	 	35	 
	Section E.05. Actuarial Assumptions
	 	 	36	 
	Section E.06. Accelerated Lump Sum Payouts
	 	 	36	 
	Section E.07. Effect of Early Taxation
	 	 	37	 
	Section E.08. Permitted Delays
	 	 	37	 

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NORTHROP GRUMMAN

ELECTRONIC SYSTEMS EXECUTIVE PENSION PLAN

(Amended and Restated Effective as of January 1, 2009)

     The Northrop Grumman Electronic Systems Executive Pension Plan (the “Plan”) is hereby amended
and restated effective as of January 1, 2009. This restatement of the Plan amends the January 1,
2005 restatement and includes changes that apply to Grandfathered Amounts.

     The Plan is intended to comply with Code section 409A and official guidance issued thereunder
(except for Grandfathered Amounts). Notwithstanding any other provision of this Plan, this Plan
shall be interpreted, operated and administered in a manner consistent with this intention.

 

 

ARTICLE 1

Introduction

     Section 1.01. Introduction. The Northrop Grumman Electronic Systems Executive
Pension Plan is a supplemental pension plan that provides nonqualified deferred compensation for a
select group of management or highly compensated employees.

     Section 1.02. Effective Date. The Plan became effective March 1, 1996.

     Section 1.03. Sponsor. The Plan sponsor is Northrop Grumman Corporation.

     Section 1.04. Predecessor Plan. The Plan was established as a successor to
the Westinghouse Executive Pension Plan, maintained by Westinghouse Electric Corporation
(“Westinghouse”) for the benefit of certain executive employees of the Westinghouse Electronic
Systems Group as of February 29, 1996 who became employees of the Northrop Grumman Electronic
Sensors & Systems Division as of March 1, 1996 as a result of the Westinghouse Acquisition, and
certain other executive employees who may become employed by the Northrop Grumman Electronic
Sensors & Systems Division on or after March 1, 1996. The Northrop Grumman Electronic Sensors &
Systems Division became the Northrop Grumman Electronic Sensors & Systems Sector effective August
24, 1998.

     Section 1.05. 2001 Reorganization. Effective as of the 2001 Reorganization
Date in (d), the corporate structure of Northrop Grumman Corporation and its affiliates was
modified. Effective as of the Litton Acquisition Date in (e), Litton Industries, Inc. was acquired
and became a subsidiary of the Northrop Grumman Corporation (the “Litton Acquisition”).

     (a) The former Northrop Grumman Corporation was renamed Northrop Grumman Systems Corporation.
It became a wholly-owned subsidiary of the new parent of the reorganized controlled group.

     (b) The new parent corporation resulting from the restructuring is called Northrop Grumman
Corporation. All references in this Plan to the former Northrop Grumman Corporation and its Board
of Directors now refer to the new parent corporation bearing the same name and its Board of
Directors.

     (c) As of the 2001 Reorganization Date, the new Northrop Grumman Corporation became the
sponsor of this Plan, and its Board of Directors assumed authority over this Plan.

     (d) 2001 Reorganization Date. The date as of which the corporate restructuring
described in (a) and (b) occurred.

     (e) Litton Acquisition Date. The date as of which the conditions for the completion
of the Litton Acquisition were satisfied in accordance with the Amended and Restated Agreement and
Plan of Merger Among Northrop Grumman Corporation, Litton Industries, Inc., NNG, Inc., and LII
Acquisition Corp.

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ARTICLE 2

Definitions

     Capitalized terms which are defined in the ES Pension Plan will have the same meanings in this
Plan unless otherwise expressly stated. In addition, the following terms when used and capitalized
will have the following meanings:

     Section 2.01. Affiliated Companies. The Company and any other entity related
to the Company under the rules of section 414 of the Code. The Affiliated Companies include
Northrop Grumman Corporation and its 80%-owned subsidiaries and may include other entities as well.

     Section 2.02. Annual Incentive Programs. See Article 6.

     Section 2.03. Average Annual Compensation. See Article 6.

     Section 2.04. Board. Board means the Board of Directors of Northrop Grumman
Corporation, or its delegate.

     Section 2.05. Code. The Internal Revenue Code of 1986, as amended, and as it
may be amended.

     Section 2.06. Committee. A committee of not less than three members appointed
by the Board with responsibility for the general administration of the Plan. The Committee is the
“plan administrator” under ERISA.

     Section 2.07. Company. Northrop Grumman Corporation.

     Section 2.08. Defined Contribution Plan. A defined contribution plan within
the meaning of ERISA § 3(34), but not including:

     (a) the Northrop Grumman Electronic Systems Savings Program or any similar program of a
Participating Company or a Designated Entity or

     (b) any amount received pursuant to a cash or deferred arrangement (as that term is defined in
the Code) maintained by a Participating Company or a Designated Entity.

     Section 2.09. Designated Entity. Designated Entity means an Affiliated
Company or other entity that has been and is still designated by the Committee as participating in
the Plan.

     Section 2.10. ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and as it may be amended.

     Section 2.11. ES Pension Plan. The Northrop Grumman Electronic Systems
Pension Plan, formerly known as the ESSD Pension Plan.

     Section 2.12. Executive. Executive means an individual who satisfies
(a) and (b) and is not excluded by (c) or (d):

- 3 -

 

     (a) An Employee who is employed by ES (or by a Participating Company, Designated
Entity, or other Affiliated Company) in a position that is determined by the Company’s
Chief Executive Officer or Vice President and Chief Human Resources and Administrative
Officer to be eligible as an Executive position under this Plan based on the duties and
responsibilities of the position.

     (b) The Employee has been notified by the Committee in writing that he or she is
eligible for benefits under the Plan.

     (c) No Employee may receive benefits under this Plan if he or she is currently
accruing supplemental benefits under any other nonqualified deferred compensation plan,
contract, or arrangement maintained by the Affiliated Companies or to which the Affiliated
Companies contribute with the exception of the Officers Supplemental Executive Retirement
Program under the Northrop Grumman Supplemental Plan 2.

     (d) Notwithstanding any provision of the Plan to the contrary, effective as of July 1,
2003, no Employee will first become eligible to participate in the Plan or otherwise
receive credit for service or compensation for purposes of calculating a benefit under the
Plan unless the Employee was classified as an Executive eligible to participate in the Plan
before that date. Executives that terminate employment and are later rehired into positions
that are determined to be eligible as Executive positions under the Plan will be eligible
to resume participation in the Plan and will be subject to Appendix B.

     Section 2.13. Executive Benefit Service. See Article 6.

     Section 2.14. Executive Pension Base. See Article 6.

     Section 2.15. Executive Pension Supplement. The pension calculated pursuant
to Articles 4 and 5 of this Plan. There will be no Executive Pension Supplement payable if the
Executive’s Qualified Plan Benefit equals or exceeds his or her Executive Pension Base.

     Section 2.16. Grandfathered Amounts. Plan benefits that were earned and
vested as of December 31, 2004 within the meaning of Code section 409A and official guidance
thereunder.

     Section 2.17. Key Employee. An employee treated as a “specified employee”
under Code section 409A(a)(2)(B)(i) of the Company or the Affiliated Companies (i.e., a key
employee (as defined in Code section 416(i)
without regard to paragraph (5) thereof)) if the Company’s or an Affiliated Company’s stock is
publicly traded on an established securities market or otherwise. The Company shall determine in
accordance with a uniform Company policy which Executives are Key Employees as of each December 31
in accordance with IRS regulations or other guidance under Code section 409A, provided that in
determining the compensation of individuals for this purpose, the definition of compensation in
Treas. Reg. § 1.415(c)-2(d)(3) shall be used. Such determination shall be effective for the twelve
(12) month period commencing on April 1 of the following year.

- 4 -

 

     Section 2.18. Maximum Contribution. An Employee will be deemed to have made
the Maximum Contribution if he or she has made the contributions under (a) and (b), as interpreted
under (c):

     (a) During such time as the Employee was eligible to participate in the ES Pension Plan and
the Westinghouse Pension Plan, he or she contributed the maximum amount the Employee was permitted
to contribute under those plans, and

     (b) During such time as the Employee was employed by a Designated Entity (which includes for
this purpose a “Designated Entity” under the Westinghouse Plan during periods before the
Westinghouse Acquisition),

          (1) The Employee contributed the maximum amount he or she was permitted to contribute, if any,
to that Designated Entity’s defined benefit pension or Defined Contribution Plan, if any, and

          (2) The Employee paid to the Company (or to Westinghouse, before the Westinghouse Acquisition)
an amount of each of his or her annual incentive compensation awards based on the maximum ES
Pension Plan contribution formula (or Westinghouse Pension Plan contribution formula, as
appropriate) applied to 50% of his or her awards. This payment is pre-tax and is made by a deferral
election entered into prior to the year in which the annual incentive compensation award is
determined and paid.

     (c) This Plan is intended as essentially a continuation of the Westinghouse Plan (see Appendix
C). Accordingly, this Section is to be interpreted as requiring an Executive to have made the
Maximum Contribution not only under this Plan but also under the Westinghouse Plan.

     Section 2.19. Participating Company. Any of the “Participating Companies”
under the ES Pension Plan.

     Section 2.20. Payment Date. The 1st of the month coincident with or following
the later of (a) the date the Executive attains age 55, or (b) the date the Executive Separates
from Service.

     Section 2.21. Pension Plan and Pension Plans. Any of the following:

	 	(a)	 	The Northrop Grumman Retirement Plan
	 
	 	(b)	 	The Northrop Grumman Retirement Plan—Rolling Meadows Site
	 
	 	(c)	 	The Northrop Grumman Retirement Value Plan (effective as of January 1, 2000)
	 
	 	(d)	 	The Northrop Grumman Electronics Systems — Space Division Salaried Employees’
Pension Plan (effective as of the Aerojet Closing Date)
	 
	 	(e)	 	The Northrop Grumman Electronics Systems — Space Division Union Employees’
Pension Plan (effective as of the Aerojet Closing Date)

- 5 -

 

     “Aerojet Closing Date” means the Closing Date specified in the April 19, 2001 Asset Purchase
Agreement by and Between Aerojet-General Corporation and Northrop Grumman Systems Corporation.

     Section 2.22. Plan. The Northrop Grumman Electronic Systems Executive Pension
Plan.

     Section 2.23. Qualified Plan Benefit.

     (a) The Qualified Plan Benefit is equal to the sum of:

	 	(1)	 	the annual amount of pension the Executive has accrued under
the ES Pension Plan and any applicable defined benefit pension plan of a
Designated Entity based on Benefit Service accumulated up to the earlier of the
Executive’s actual retirement date or death;
	 
	 	(2)	 	the amount the Executive is entitled to receive on a life
annuity basis for retirement under any applicable Defined Contribution Plan of
a Designated Entity;
	 
	 	(3)	 	in any case where service included in the Executive’s Vesting
Service also entitles that Executive to benefits under one or more retirement
plans (whether a defined benefit or Defined Contribution Plan or both) of
another company, the amount the Executive is entitled to receive on a life
annuity basis for retirement from those plans; and
	 
	 	(4)	 	the amount of any “Qualified Plan Benefits” taken into account
under the Westinghouse Plan (or which would have been taken into account, but
for the Westinghouse Acquisition) with respect to plans that were not acquired
by the Affiliated Companies as part of the Westinghouse Acquisition;

provided, the method of benefit measurement, in the case of (2), (3) and (4) above, will be on the
basis of procedures determined by the Committee on a plan-by-plan basis.

     (b) The Qualified Plan Benefit does not include any early pension retirement supplement.

     (c) The term Qualified Plan Benefit will also include amounts accrued under an excess benefit
plan or other similar arrangement in which the Executive is a participant.

     Section 2.24. Retirement Eligible. An Executive is Retirement Eligible if he
or she is accruing Vesting Service and:

     (a) has attained age 65 and completed five or more years of Vesting Service;

     (b) has attained age 60 and completed 10 or more years of Vesting Service;

- 6 -

 

     (c) has attained age 58 and completed 30 or more years of Vesting Service; or

     (d) has satisfied the requirements for an immediate pension under the Special Retirement
Benefit provisions of the ES Pension Plan.

     Section 2.25. Separation from Service or Separates from Service. A
“separation from service” within the meaning of Code section 409A.

     Section 2.26. Westinghouse. Westinghouse Electric Corporation.

     Section 2.27. Westinghouse Acquisition. The acquisition by Northrop Grumman
Corporation of the Electronic Systems Group of Westinghouse effective March 1, 1996.

     Section 2.28. Westinghouse Plan. The Westinghouse Executive Pension Plan, as
it existed from time to time.

- 7 -

 

ARTICLE 3

Qualification for Benefits; Mandatory Retirement

     Section 3.01. Qualification for Benefits. Subject to Article 8 and
other applicable provisions of the Plan, if any, each Executive will be entitled to the
benefits of this Plan on separation from service from a Participating Company, a Designated
Entity, or any other Affiliated Company, provided that such Executive meets the following
four conditions:

     (a) He or she has been employed in a position that meets the definition of Executive for five
or more continuous years immediately preceding the earlier of the Executive’s actual retirement
date or the Executive’s Normal Retirement Date. For purposes of this five-year requirement (but not
for purposes of determining Executive Benefit Service under Section 6.05), the General Manager of
ES and the Vice President of Human Resources for ES may determine that one or more years of an
Employee’s service with an Affiliated Company prior to the Employee’s transfer to ES shall be
counted as having been in an Executive position.

     (b) He or she has made the Maximum Contribution during each year of Vesting Service from the
date he or she first became an Executive until the earliest of his or her date of death, actual
retirement date or Normal Retirement Date;

     (c) He or she is a participant in the ES Pension Plan or in the defined benefit plan or
Defined Contribution Plan of a Designated Entity, if any;

     (d) He or she is Retirement Eligible on the date of voluntary or involuntary separation from
service from a Participating Company or a Designated Entity or, in the case of a Surviving Spouse
benefit, satisfies the requirements for benefits under Article 5 of the Plan.

     Section 3.02. Mandatory Retirement. Pursuant to this Plan, the Company will
be entitled, at its option, to retire any Executive who has attained age 65 and who, for the
two-year period immediately before his or her retirement, has participated in this Plan, if such
Executive is entitled to an immediate nonforfeitable annual retirement benefit from a pension,
profit-sharing, savings or deferred compensation plan, or any combination of such plans, of a
Participating Company or any Affiliated Company, which equals, in the aggregate, at least $44,000.
The calculation of the $44,000 (or greater) amount will be performed in a manner consistent with 29
U.S.C. § 631(c)(2).

     Section 3.03. Certain Transfers. Except as otherwise provided in (e) below,
if an Executive transfers to a position with an Affiliated Company that is not covered by a
Participating Company or Designated Entity:

     (a) He or she will immediately cease to accrue Executive Benefit Service.

     (b) He or she will continue to earn Vesting Service (for purposes of the Plan other than
Executive Benefit Service) for periods of employment with the Affiliated Company.

- 8 -

 

     (c) His or her Average Annual Compensation will include earnings as an employee from the
Affiliated Company for periods after the transfer until his or her termination of employment with
all Affiliated Companies.

     (d) He or she may receive benefits under the Plan if he or she subsequently retires from the
Company and satisfies the Plan’s eligibility requirements.

     (e) Effective as of July 1, 2003, if an Executive transfers to a position with an Affiliated
Company that has been determined by the Company’s Chief Executive Officer or Vice President and
Chief Human Resources and Administrative Officer to be an eligible position under the Plan, (a)-(d)
above will not apply and the Executive will continue to be classified as an active participant for
all purposes under the Plan until the Executive’s separation from service from all Affiliated
Companies.

- 9 -

 

ARTICLE 4

Calculation of Executive Pension Supplement

     Section 4.01. In General. The Executive Pension Supplement for an Executive
who meets the qualifications of Article 3 of the Plan retiring on an Early, Normal or Special
Retirement Date will be calculated as described in Section 4.02(a) or (b).

     Section 4.02. Amount.

     (a) If the Executive

          (1) has attained age 60 and completed 10 or more years of Vesting Service,

          (2) has attained age 65, or

          (3) has satisfied the eligibility requirements for an immediate pension under the “Special
Retirement Benefit” provisions of the ES Pension Plan,

the Executive Pension Supplement is determined by subtracting the Executive’s Qualified Plan
Benefit that would be payable if he or she elected a Life Annuity Option (after any reduction for
early retirement, if applicable) from his or her Executive Pension Base.

     (b) If the Executive has not met the requirements of paragraph (a) above but has attained age
58 and completed 30 or more years of Vesting Service, the Executive Pension Supplement is
determined by subtracting the Executive’s Qualified Plan Benefit that would be payable if he or she
elected a Life Annuity Option (before any reduction for retirement prior to age 60) from his or her
Executive Pension Base.

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ARTICLE 5

Death in Active Service

     Section 5.01. Eligibility For an Immediate Benefit. If an Executive dies in
active service and, on his or her date of death, satisfies the requirements of the “Special
Surviving Spouse Benefit” under the ES Pension Plan and satisfied the requirements of Section
3.01(b) and (c) of this Plan at the time of death, a Surviving Spouse benefit will also be payable
under this Plan if his or her Executive Pension Base exceeds his or her Qualified Plan Benefit. The
requirement of Section 3.01(a) is waived.

     Section 5.02. Calculation of Immediate Benefit. The amount of the immediate
Surviving Spouse benefit under Section 5.01 will be the Executive Pension Supplement reduced in the
same manner as though the benefit were a “Special Surviving Spouse Benefit” under the ES Pension
Plan. For purposes of this Section, the Executive Pension Supplement will be calculated as follows:

     (a) If the Executive had attained age 60 or if the Executive had completed 30 years of Vesting
Service, the Executive Pension Supplement would be calculated as described in Section 4.02(a);

     (b) Otherwise, the Executive Pension Supplement would be 80% of the difference between the
Executive Pension Base and the unreduced Qualified Plan Benefit.

     Section 5.03. Eligibility For a Deferred Benefit. If an Executive dies in
active service who does not satisfy the requirements of Section 5.01 but who satisfies the
requirements of the “Surviving Spouse Benefit” under the ES Pension Plan and satisfied the
requirements of Section 3.01(b) and (c) of this Plan at the time of death, a Surviving Spouse
benefit will also be payable under this Plan if his or her Executive Pension Base exceeds his or
her Qualified Plan Benefit. The requirement of Section 3.01(a) is waived.

     Section 5.04. Calculation of Deferred Benefit. The amount of the deferred
Surviving Spouse benefit under Section 5.03 will be the Executive Pension Supplement reduced in the
same manner as though the benefit were payable under the ES Pension Plan. For purposes of this
paragraph, the Executive Pension Supplement will be calculated by subtracting the Executive’s
Qualified Plan Benefit (before any reductions) from his or her Executive Pension Base.

- 11 -

 

ARTICLE 6

Executive Pension Base

     Section 6.01. In General. This Article sets forth the rules for determining a
Participant’s Executive Pension Base.

     Section 6.02. Executive Pension Base. The Executive Pension Base = (a) x (b)
x (c) as follows:

     (a) 1.47%;

     (b) Average Annual Compensation;

     (c) the number of years of Executive Benefit Service accrued to the earliest of:

          (1) the Executive’s actual retirement date,

          (2) the date of the Executive’s death, or

          (3) the Executive’s Normal Retirement Date.

     Section 6.03. Average Annual Compensation. Average Annual Compensation = (a)
+ (b) as follows:

     (a) 12 times the average of the five highest of the Executive’s December l monthly base
salaries during the 10-year period immediately preceding the earliest of:

          (1) the Executive’s date of death,

          (2) the Executive’s actual retirement date, or

          (3) the Executive’s Normal Retirement Date;

     (b) the average of the Executive’s five highest annual incentive compensation awards paid
under the Annual Incentive Programs or equivalent annual program or programs during the 10-year
period ending with the earliest of:

          (1) the year of the Executive’s death,

          (2) the year of the Executive’s actual retirement date, or

          (3) the year of the Executive’s Normal Retirement Date.

     (c) No earnings before March 1, 1996 are taken into account under this Article.

     (d) Notwithstanding the foregoing, for Executives terminating employment with the Affiliated
Companies after 2004, the averages in subsection (a) and (b) above shall be based on

- 12 -

 

salaries and annual incentive compensation awards paid in 1995 or later and shall not be limited to
the 10-year periods described in subsections (a) and (b). All amounts accrued as a result of this
change shall be subject to Code section 409A.

     (e) Average Annual Compensation normally includes only pay earned while an Executive. But see
Section 3.03.

     (f) The following shall not be considered as compensation for purposes of determining the
amount of any benefit under the Plan:

          (1) any payment authorized by the Company’s Compensation Committee that is (a) calculated
pursuant to the method for determining a bonus amount under the Annual Incentive Programs (AIP) for
a given year, and (b) paid in lieu of such bonus in the year prior to the year the bonus would
otherwise be paid under the AIP, and

          (2) any award payment under the Northrop Grumman Long-Term Incentive Cash Plan.

     Section 6.04. Annual Incentive Programs. The Annual Incentive Programs are
the Timely Awards Program, Management Achievement Plan, the Incentive Compensation Plan, the
Incentive Management Achievement Plan and the Performance Achievement Plan of the Company.

     Section 6.05. Executive Benefit Service. An Executive’s Executive Benefit
Service is determined under (a) or (b) as appropriate, and subject to (c) and (d):

     (a) Executive Benefit Service is an Executive’s total years of Vesting Service under the ES
Pension Plan if:

          (l) the Executive was making the Maximum Contribution during each of those years; or

          (2) the use of the Executive Buy Back process has been authorized by the Committee and the
Executive:

     (A) was making the Maximum Contribution during each of those years after the date he or she
first became an Executive and

     (B) has complied with the provisions of the Executive Buy Back process (as set forth in
Appendix A) as to those years prior to his or her first becoming an Executive.

     (b) Otherwise, Executive Benefit Service is the Executive’s period of Vesting Service during
which he or she made the Maximum Contribution.

     (c) No service before March 1, 1996 is taken into account under this Article.

- 13 -

 

     (d) Notwithstanding the foregoing, for an Executive terminating employment with the Affiliated
Companies after 2004, Executive Benefit Service accruals after 2004 equal (1) minus (2) below:

          (1) Elapsed time while the Executive was making the Maximum Contributions, including time
purchased under the Executive Buy Back process (as set forth in Appendix A);

          (2) Executive Benefit Service accrued as of December 31, 2004.

          All amounts accrued as a result of this change shall be subject to Code section 409A.

- 14 -

 

ARTICLE 7

Payment of Benefits

     Section 7.01. Limitation on Benefits. No benefits will be payable under this
Plan to any Executive whose employment terminates for any reason other than death prior to becoming
Retirement Eligible.

     Section 7.02. Normal Form and Commencement of Benefits. This Section only
applies to Grandfathered Amounts. The Executive Pension Supplement will be paid for life in
monthly installments, each equal to l/12th of the annual amount determined in Article 4 or 5,
whichever is applicable.

     (a) The Committee will determine the form and commencement of benefit payments in its sole
discretion.

     (b) The Committee will choose among the various forms of payment, other than the lump sum,
then available under the ES Pension Plan, subject to the same reductions or other provisions that
apply to the elected form of payment under the ES Pension Plan.

     (c) No payments may commence under this Plan until payments to the Executive or Surviving
Spouse have commenced under the ES Pension Plan or other tax-qualified defined benefit plan or
Defined Contribution Plan maintained by a Participating Company or Designated Entity.

See Appendix D and Appendix E for the rules that apply to other benefits earned under the Plan.

     Section 7.03. Guaranteed Benefit. This Section only applies to Grandfathered
Amounts. Regardless of the form of payment elected by the Committee, after the Executive retires
and begins receiving an Executive Pension Supplement, a minimum of 60 times the monthly payment he
or she would have received on a life annuity basis is guaranteed.

See Appendix D and Appendix E for the rules that apply to other benefits earned under the Plan.

     Section 7.04. Guaranteed Surviving Spouse Benefit. This Section only applies
to Grandfathered Amounts. Once a Surviving Spouse Benefit determined under Sections 5.01 and 5.02
has commenced, a minimum of 60 times the monthly benefit payable to the Surviving Spouse is
guaranteed. See Appendix D and Appendix E for distribution rules that apply to death benefits that
are not Grandfathered Amounts

     Section 7.05. Lump Sum Payments. This Section only applies to Grandfathered
Amounts. An Executive who elects lump sum payments of all his or her nonqualified benefits under
the Northrop Grumman Corporation Change-In-Control Severance Plan (effective August 1, 1996, as
amended) or the Northrop Grumman Corporation March 2000 Change-In-Control Severance Plan
(collectively, the “CIC
Plans”) is entitled to have his or her Executive Pension Supplement paid as a lump sum calculated
under the terms of the applicable CIC Plan.

- 15 -

 

Otherwise, Executive Pension Supplement payments are
governed by the general provisions of this Article, which do not provide for lump sum payments.

     Northrop Grumman Corporation may, in its sole discretion, amend or eliminate any provision of
the Plan with respect to lump sum distributions at any time. This applies whether or not a
Participant has already made a lump sum election.

See Appendix D and Appendix E for the rules that apply to other benefits earned under the Plan

     Section 7.06. Mandatory Cashout. Notwithstanding any other provisions in the
Plan, Executives with Grandfathered Amounts who have not commenced payment of such benefits prior
to January 1, 2008 will be subject to the following rules:

     (a) Post-2007 Terminations. Executives who have a complete termination of employment
with the Affiliated Companies after 2007 will receive a lump sum distribution of the present value
of their Grandfathered Amounts within two months of such termination (without interest), if such
present value is below the Code section 402(g) limit in effect at the termination.

     (b) Pre-2008 Terminations. Executives who had a complete termination of employment
with the Affiliated Companies before 2008 will receive a lump sum distribution of the present value
of their Grandfathered Amounts within two months of the time they commence payment of their
underlying qualified pension plan benefits (without interest), if such present value is below the
Code section 402(g) limit in effect at the time such payments commence.

For purposes of calculating present values under this Section, the actual assumptions and
calculation procedures for lump sum distributions under the Northrop Grumman Pension Plan shall be
used.

     Section 7.07. Optional Payment Forms. Executives with Grandfathered Amounts
shall be permitted to elect (a) or (b) below:

     (a) To receive their Grandfathered Amounts in any form of distribution available under the
Plan at October 3, 2004, provided that form remains available under the underlying qualified
pension plan at the time payment of the Grandfathered Amounts commences. The conversion factors for
these distribution forms will be based on the factors or basis in effect under this Plan on October
3, 2004.

     (b) To receive their Grandfathered Amounts in any life annuity form not included in (a) above
but included in the underlying qualified pension plan distribution options at the time payment of
the Grandfathered Amounts commences. The conversion factors will be based on the following
actuarial assumptions:

			
	          Interest Rate:	 	6%
	 	 	 
	          Mortality Table:	 	RP-2000 Mortality Table projected 15 years for future standardized
cash balance factors

- 16 -

 

     Section 7.08. Rehires. In the event that an Executive retires or otherwise
ceases to be an Employee of a Participating Company or a Designated Entity and is later rehired by
one of those entities, the provisions of Appendix B will apply.

     Section 7.09. Special Tax Distribution. On the date an Executive’s retirement
benefit is reasonably ascertainable within the meaning of IRS regulations under Code section
3121(v)(2), an amount equal to the Executive’s portion of the FICA tax withholding will be
distributed in a single lump sum payment. This payment will be based on all benefits under the
Plan, including Grandfathered Amounts. This payment will reduce the Executive’s future benefit
payments under the Plan on an actuarial basis.

- 17 -

 

ARTICLE 8

Conditions to Receipt of Executive Pension Supplement

     Section 8.01. Non-Competition Condition. Payments of benefits under this Plan
to Executives are subject to the condition that the recipient will not compete with the Company.

     (a) Competition for this purpose means engaging directly or indirectly in any business which
is at the time competitive with any business, part of a business, or activity then conducted by the
Company, any of its subsidiaries or any other corporation, partnership, joint venture or other
entity of which the Company directly or indirectly holds a 10% or greater interest (together, the
“Affiliated Group”) in the area in which such business, part of a business, or activity is then
being conducted by the Affiliated Group.

     (b) The condition of this Section may be waived with respect to a recipient but only in
writing and only by the Compensation Committee of the Board.

     Section 8.02. Breach of Condition. Breach of the condition contained in
Section 8.01 will be deemed to occur immediately upon an Executive’s engaging in competitive
activity.

     (a) Payments suspended for breach of the condition will not be resumed whether or not the
Executive terminates the competitive activity.

     (b) A recipient will be deemed to be engaged in such a business indirectly if he or she is an
employee, officer, director, trustee, agent or partner of, or a consultant or advisor to or for, a
person, firm, corporation, association, trust or other entity which is engaged in such a business
or if he or she owns, directly or indirectly, in excess of 5% of any such firm, corporation,
association, trust or other entity.

     Section 8.03. Waiver After 65. The ongoing condition of this Article will not
apply to an Executive age 65 or older.

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ARTICLE 9

Administration

     Section 9.01. Committee. This Plan will be administered by the Committee. The
Committee will have the right to make reasonable rules from time to time regarding the Plan. All
such rules will be consistent with the policy provided by this Plan document. The Committee will
have full discretion to interpret the Plan, and to resolve ambiguities and inconsistencies. The
Committee’s interpretations will in all cases be final and not be subject to appeal.

     Section 9.02. Claims Procedures. The Company’s standardized “Northrop Grumman
Nonqualified Retirement Plans Claims and Appeals Procedures” shall apply in handling claims and
appeals under this Plan.

     Section 9.03. Trust. The Board may authorize the establishment of one or more
trusts and the appointment of a trustee or trustees (“Trustee”) to hold any and all assets of the
Plan in trust. The Board may delegate this power to the Committee.

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ARTICLE 10

Modification or Termination

     Section 10.01. Amendment and Plan Termination. The Company may, in its sole
discretion, terminate, suspend or amend this Plan at any time or from time to time, in whole or in
part for any reason. This includes the right to amend or eliminate any of the provisions of the
Plan with respect to lump sum distributions, including any lump sum calculation factors, whether or
not an Executive has already made a lump sum election. Notwithstanding the foregoing, no amendment
or termination of the Plan shall reduce the amount of an Executive’s accrued benefit under the Plan
as of the date of such amendment or termination.

     No amendment of the Plan shall apply to the Grandfathered Amounts, unless the amendment
specifically provides that it applies to such amounts. The purpose of this restriction is to
prevent a Plan amendment from resulting in an inadvertent “material modification” to the
Grandfathered Amounts.

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ARTICLE 11

Miscellaneous

     Section 11.01. Benefits Not Assignable.

     (a) No Executive, former Executive or Surviving Spouse shall have the right to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or otherwise subject to lien any of the
benefits provided under this Plan. Such rights may not be subject to the debts, contracts,
liabilities, engagements or torts of the Executive, former Executive or Surviving Spouse of an
Executive.

     (b) Notwithstanding the foregoing, all or a portion of an Executive’s Plan benefits may be
paid to another person as specified in a domestic relations order that the Committee determines is
qualified (a “Qualified Domestic Relations Order”). For this purpose, a Qualified Domestic
Relations Order means a judgment, decree, or order (including the approval of a settlement
agreement) which is:

          (1) issued pursuant to a State’s domestic relations law;

          (2) relates to the provision of child support, alimony payments or marital property rights to
a spouse, former spouse, child or other dependent of the Executive;

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

          (4) meets such other requirements established by the Committee.

     The Committee shall determine whether any document received by it is a Qualified Domestic
Relations Order. In making this determination, the Committee may consider the rules applicable to
“domestic relations orders” under Code section 414(p) and ERISA section 206(d), and such other
rules and procedures as it deems relevant.

     Section 11.02. Facility of Payment. If the Committee deems any person
entitled to receive any payment under the Plan incapable of receiving it by reason of age, illness,
infirmity, mental incompetency or incapacity of any kind, the Committee may, in its discretion,
direct that payment be made in any one or more of the following manners:

     (a) Applying the amount directly for the comfort, support and maintenance of the payee;

     (b) Reimbursing any person for any such support supplied by any other person to the payee;

     (c) Paying the amount to a legal representative or guardian or any other person selected by
the Committee on behalf of the payee; or

- 21 -

 

     (d) Depositing the amount in a bank account to the credit of the payee.

     Section 11.03. Committee Rules. Payment of benefits will be made in
accordance with the rules and procedures of the Committee.

     Section 11.04. Limitation on Rights. The Company, in adopting this Plan,
will not be held to create or vest in any Executive or any other person any interest, pension or
benefits other than the benefits specifically provided herein, or to confer upon any Executive the
right to remain in the service of the Company.

     Section 11.05. Benefits Unsecured. Any assets purchased by the Company to
provide benefits under this Plan will at all times remain subject to the claims of general
creditors of the Company and any Executive, former Executive or Surviving Spouse of an Executive
participating in the Plan has only an unsecured promise to pay benefits from the Company.

     Section 11.06. Governing Law. To the extent not preempted by federal law,
the law of the State of Maryland will govern the construction and administration of the Plan.

     Section 11.07. Severability. If any provision of this Plan or its
application to any circumstance or person is held to be invalid by a court of competent
jurisdiction, the remainder of the Plan and the application of such provision to other
circumstances or persons will not be affected thereby.

     Section 11.08. Expanded Benefits. The Board or the Compensation Committee
of the Board may, from time to time and without notice, by resolution of the Board or of the
Compensation Committee of the Board, authorize the payment of benefits or expand the benefits
otherwise payable or to be payable to any one or more individuals. Notwithstanding the foregoing,
this Section 11.08 shall not apply to any benefits under the Plan that are not Grandfathered
Amounts.

     Section 11.09. Plan Costs. Benefits payable under the Plan and any expenses
in connection therewith will be paid by the Company to the extent they are not available to be paid
from any trust fund established by the Company to help defray the costs of providing Plan benefits.

     Section 11.10. Termination of Participation. Participation in the Plan will
terminate:

     (a) in the case of a nonvested Executive, upon separation from service with a Participating
Company or Designated Entity;

     (b) in the case of a vested Executive, when payment of all amounts due with respect to the
Executive are paid, or purported to be paid, by the Plan.

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ARTICLE 12

Change in Control

     Section 12.01. Definition. The term “Change in Control” means the
occurrence of one or more of the following events:

     (a) There will be consummated:

          (1) Any consolidation or merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the Company’s common stock would be converted
into cash, securities or other property, other than a merger of the Company in which the holders of
the Company’s common stock immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger; or

          (2) Any sale, lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or

     (b) The stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or

     (c) (1) Any person (as such term is defined in section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), corporation or other entity will purchase any common stock
of the Company (or securities convertible into Company common stock) for cash, securities or any
other consideration pursuant to a tender offer or exchange offer, unless, prior to the making of
such purchase of Company common stock (or securities convertible into Company common stock), the
Board will determine that the making of such purchase will not constitute a Change in Control; or

          (2) Any person (as such term is defined in section 13(d) of the Exchange Act), corporation or
other entity (other than the Company or any benefit plan sponsored by the Affiliated Companies)
will become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act:),
directly or indirectly, of securities of the Company representing twenty percent or more of the
combined voting power of the Company’s then outstanding securities ordinarily (and apart from any
rights accruing under special circumstances) having the right to vote in the election of directors
(calculated as provided in Rule 13d-3(d) in the case of rights to acquire any such securities),
unless, prior to such person so becoming such beneficial owner, the Board will determine that such
person so becoming such beneficial owner will not constitute a Change in Control; or

     (d) At any time during any period of two consecutive years, individuals who at the beginning
of such period constituted the entire Board will cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for election of each new director during
such two-year period was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such two-year period.

- 23 -

 

     Section 12.02. Vesting and Funding Rules. Notwithstanding any other
provision of the Plan, upon a Change in Control, as defined above, all Executives will be deemed
fully vested under this Plan, but only such vesting as to the otherwise applicable five-year
service requirement. In addition, upon a Change in Control, but only under circumstances where the
successor, surviving or parent company of Northrop Grumman Corporation or the successor plan
sponsor or any successor thereto, if any, does not agree to assume the obligation to provide
benefits under this Plan as they become due and payable, then an amount sufficient to fund all
unpaid benefits and any Surviving Spouse benefits payable under this Plan will be paid immediately
by the Company to a Trustee pursuant to a Trust Agreement for the payment of such benefits at the
earliest date available in accordance with the provisions of the Plan and on such terms as the
committee composed of the Company’s Chief Executive Officer, Chief Financial Officer and General
Counsel, will deem appropriate (including a direction to the Trustee to pay immediately all
benefits that are Grandfathered Amounts on a present value basis and/or such other terms as they
may deem appropriate). Notwithstanding this funding, the Company will be obligated to pay benefits
to Executives and to Surviving Spouses of Executives to the extent such funding proves to be
insufficient. To the extent such funding proves to be more than sufficient, any excess will revert
to the Company.

     Section 12.03. Special Retirement Provisions. Upon a Change in Control, for
any Executive in the Plan who is involuntarily separated and who is not then eligible for a Normal
or Special Retirement Pension under the ES Pension Plan, such separation will be deemed to be a
separation due to a “Permanent Job Separation”, and the Special Retirement Pension provisions under
the ES Pension Plan will be used for purposes of determining eligibility and payment of benefits to
such Executive under the Plan, provided that distribution of amounts that are not Grandfathered
Amounts will still be controlled by Appendix D and Appendix E.

     Section 12.04. Calculation of Present Value. The present value of benefits
payable by the Trustee will be calculated for specific groups of Executives at the time of the
Change in Control as follows:

     (a) The present value of the benefits payable from this Plan to Executives who have retired at
the time of the Change in Control (as well as benefits payable from this Plan to any Surviving
Spouse of an Executive) will be calculated by using the PBGC immediate discount rate established
and in effect for the beginning of the calendar year in which the Change in Control occurs.

     (b) The present value of the benefits payable from this Plan to Executives who are eligible to
retire under the terms of this Plan at the time of the Change in Control will be calculated by
using the PBGC immediate discount rates established and in effect at the beginning of the calendar
year in which the Change in Control occurs, assuming a pension which is immediately payable at the
time of the Change in Control.

     (c) The present value of the benefits payable from this Plan to Executives who have completed
at least 30 years of service with a Participating Company or a Designated Entity but have not yet
attained age 58 at the time of the Change in Control will be calculated by using the

- 24 -

 

PBGC deferred discount rates established and in effect for the beginning of the calendar year in
which the Change in Control occurs, assuming a pension which is payable at age 58.

     (d) The present value of benefits payable from this Plan to Executives who have completed at
least 10 years of service with a Participating Company or a Designated Entity but less than 30
years of service at the time of the Change in Control, but have not yet attained age 60 at the time
of the Change in Control, will be calculated by using the PBGC deferred discount rates established
and in effect for the beginning of the calendar year in which the Change in Control occurs,
assuming a pension which is payable at age 60.

     (e) The present value of benefits payable from this Plan to Executives who have completed less
than 10 years of service with a Participating Company or a Designated Entity at the time of the
Change in Control will be calculated by using the PBGC deferred discount rates established and in
effect for the beginning of the calendar year in which the Change in Control occurs, assuming a
pension which is payable at age 65.

     Section 12.05. Calculation of Offset. In calculating the benefit payable
to each Executive, any offset for the ES Pension Plan or other plan in which the Executive
participates, will be based upon the last official pension file data available, adjusted to the
date of any Change in Control by assuming that the most recent salary reflected in the pension file
remains constant.

     Section 12.06. Limitation on Amendment, Suspension and Termination.
Notwithstanding any provision of this Plan, this Plan may not be:

     (a) Amended such that future benefits would be reduced;

     (b) Suspended; or

     (c) Terminated;

as to the further accrual of benefits, for a period of 24 months following a Change in Control; and
as to the payment of benefits, at any time prior to the last payment, determined in accordance with
the provisions of this Plan, to each Executive, former Executive receiving benefits under the Plan,
or eligible spouse.

*     *     *

     IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly
authorized officer on this 17th day of December, 2009.

	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

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

Benefits & International 	 

- 25 -

 

	 	 	 	 	 

APPENDIX A

Executive Buyback

     Section A.01. Introduction. The Executive Buy Back process permits newly
eligible Executives to “buy back” past years of Executive Benefit Service under the Plan for
periods of time during which they did not make the Maximum Contribution.

     Section A.02. Buy Back Offer. If an Employee did not make the Maximum
Contribution during each of the years of his or her Vesting Service prior to the time he or she
first became an Executive, the Employee will be permitted to pay make-up payments of Maximum
Contributions in order to “buy back” his or her non-contributory years of service.

     (a) The make-up payments required are the Maximum Contributions that would have been payable
during the 10 years prior to the date he or she first became an Executive (or such lesser period
from the date the Employee was employed by a Participating Company or a Designated Entity) plus
compounded interest on those amounts.

     (b) This Plan is intended as essentially a continuation of the Westinghouse Plan (see Appendix
C). Accordingly, this Section is to be interpreted as requiring an Executive to make up Maximum
Contributions not only for his or her periods of participation under this Plan but also Maximum
Contributions that would have been due under the Westinghouse Plan. The terms of (a) will be
interpreted to include the corresponding terms under the Westinghouse Plan and the 10-year period
will include periods before the Westinghouse Acquisition.

     Section A.03. One-Time Opportunity. Upon qualifying as an Executive, an
Executive will be offered an Executive Buy Back opportunity at the time he or she first becomes an
Executive (or when this Appendix first becomes effective, if later). The actual terms of the
Executive Buy Back will be determined from time to time by the Committee. This election will be
offered one time to the Executive and his or her decision whether or not to “buy back” will be
irrevocable.

     Section A.04. Payment. Executive Buy Back payments are pre-tax and are made
from compensation by deferral elections entered into prior to the year in which the compensation is
determined and paid. Executive Buy Back payments will not be deposited into the ES Pension Plan
trust and will not increase the Executive’s Qualified Plan Benefit.

     Section A.05. Refund of Buy Back Payment. If, at some point, an Employee is
no longer an Executive or otherwise becomes ineligible to receive an Executive Pension Supplement,
any Executive Buy Back payments the Employee has made (including any interest the Employee paid)
plus any other amount as defined in Section 2.16(b)(2) in the definition of Maximum Contribution
paid by the Employee to the Company will be refunded, with interest at such time as the Employee
meets one of the following criteria:

     (a) Termination or retirement from a Participating Company or a Designated Entity; or

- 26 -

 

     (b) Death;

provided, however, no refund will be made if the Employee is an eligible Executive, whether or not
the amount of his or her Executive Pension Supplement exceeds zero. All interest rates will be
determined at the discretion of the Committee.

Any amounts that are refundable under this Section A.05 that are not Grandfathered Amounts will be
paid in a lump sum upon the Executive’s Separation from Service, subject to the six-month delay
rule in Section E.02.

     Section A.06. Effective Date. The provisions of this Appendix permitting Buy
Backs will become effective on a date specified by resolution of the Committee specifically citing
this Section.

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APPENDIX B

Rehired Executives

     Section B.01. Retired Executives Rehired as Executives. If an Executive who
retired from a Participating Company or a Designated Entity and who received or is receiving an
Executive Pension Supplement as a lump sum or on a monthly basis is rehired in an Executive
position by a Participating Company, Designated Entity, or any other Affiliated Company, the
following provisions apply:

     (a) Monthly Payments: For an Executive with a monthly Executive Pension Supplement:

          (1) The Plan will suspend all Executive Pension Supplement payments that are Grandfathered
Amounts;

          (2) If, but only if, the Executive is Retirement Eligible at the time of subsequent actual
retirement:

               (A) Previous years of Vesting Service and Executive Benefit Service accrued prior to the
Executive’s retirement will be restored; and

               (B) The Executive’s Executive Pension Supplement will be recalculated in accordance with the
Plan at his or her subsequent actual retirement date as long as the Executive then meets all Plan
benefit qualification requirements;

          (3) The Executive, having previously met the requirement of five years of continuous service
as an Executive prior to his or her first retirement, need not again meet that requirement;

          (4) The Executive’s Average Annual Compensation will be computed without regard to the break
in service, using zero for any periods during which the Executive was a retiree;

          (5) If the Executive elected to take a lump sum Qualified Plan Benefit with respect to his or
her initial retirement, then in any subsequent calculation of the Executive’s Executive Pension
Supplement, the Executive’s Executive Pension Base will be reduced by both the Executive’s
Qualified Plan Benefit received at the time of the initial retirement and the Executive’s Qualified
Plan Benefit accrued from the date of rehire through the date of his or her subsequent retirement.

          (6) If the Executive continued to receive payments that were not Grandfathered Amounts during
the period of rehire, an actuarial reduction will apply at his subsequent termination.

     (b) Lump Sums: For an Executive who received a lump sum Executive Pension Supplement
and who is Retirement Eligible at the time of subsequent actual retirement:

- 28 -

 

          (1) Previous years of Vesting Service will be restored but not previous years of Executive
Benefit Service;

          (2) The Plan will calculate the Executive’s additional Executive Pension Supplement at his or
her subsequent actual retirement date on the basis of years of service after the rehire in
accordance with the Plan as the Executive then meets all Plan benefit qualification requirements;

          (3) The Executive, having previously met the requirement of five years of continuous service
as an Executive prior to his or her first retirement, need not again meet that requirement;

          (4) The Executive’s Average Annual Compensation will be computed without regard to the break
in service, using zero for any periods during which the Executive was a retiree;

          (5) If the Executive elected a monthly Qualified Plan Benefit with respect to his or her
initial retirement, then the Executive’s Qualified Plan Benefit accrued from the date of rehire
through the subsequent date of actual retirement will be subtracted from the Executive’s Executive
Pension Base in calculating the Executive’s additional Executive Pension Supplement at his or her
subsequent retirement.

     Section B.02. Former Executives with Vested Pensions Rehired as Executives.
If the employment of an Executive of a Participating Company or a Designated Entity who was
eligible only for a vested pension under the relevant qualified defined benefit or Defined
Contribution Plan, if any, was terminated and the Executive is rehired by a Participating Company,
Designated Entity, or any other Affiliated Company, the following provisions apply:

     (a) Previous years of Vesting Service and Executive Benefit Service accrued prior to the
Executive’s termination of employment will be restored;

     (b) The Executive must meet the requirement of five years of continuous service as an
Executive prior to a subsequent actual retirement, counting only years of service after the rehire;

     (c) Only base salary and incentive awards earned after the rehire will be used in computing
Average Annual Compensation;

     (d) If the Executive elected to take his or her vested pension as a lump sum, in any
calculation of an Executive Pension Supplement at actual retirement, the Executive’s Executive
Pension Base will be reduced by both the Executive’s Qualified Plan Benefit at the time of the
initial termination of employment and the Executive’s Qualified Plan Benefit accrued from the date
of rehire through the date of actual retirement.

     Section B.03. Retired Executives Rehired in Non-Executive Positions. If an
Executive who retired from a Participating Company or a Designated Entity and who received or is
receiving an Executive Pension Supplement as a lump sum or on a monthly basis is rehired by a

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Participating Company, Designated Entity, or any other Affiliated Company in a non-Executive
position, the following provisions apply:

     (a) For a former Executive who was receiving a monthly Executive Pension Supplement:

          (1) The Plan will suspend all Executive Pension Supplement payments that are Grandfathered
Amounts;

          (2) If, but only if, the former Executive is still Retirement Eligible at the time of
subsequent actual retirement, the Plan will recommence Executive Pension Supplement payments that
were suspended at the time of the Executive’s subsequent actual retirement without recalculation of
amount;

          (3) At subsequent actual retirement, the former Executive may receive any form of payment of
his or her Executive Pension Supplement then permitted under the Plan, as selected by the
Committee.

     (b) For a former Executive who received his or her Executive Pension Supplement as a lump sum,
no further benefits will be paid by the Plan.

     Section B.04. Events That Span Westinghouse Acquisition. This Plan is
intended as essentially a continuation of the Westinghouse Plan (see Appendix C) and this Appendix
is to be interpreted accordingly.

     (a) Reductions for payments of Qualified Plan Benefits will be interpreted to include
reductions for payments of similar benefits under Westinghouse plans.

     (b) Determination of the form of Qualified Plan Benefits will take into account the form of
payments under Westinghouse plans.

     (c) The terms of this Appendix will be interpreted, where appropriate, to include the
corresponding terms under the Westinghouse Plan and to take into account events both before and
after the Westinghouse Acquisition.

     Section B.05. Breaks Spanning March 1, 1996. There may be Executives who
participated in the Westinghouse Plan but because of a break in their service did not become
employees of the Affiliated Companies on March 1, 1996 as a result of the Westinghouse Acquisition.

     (a) Those Executives might be hired later by the Electronic Sensors & Systems Division.

     (b) They will in no case be entitled to service or compensation credits or benefits under this
Plan with respect to any service or compensation prior to their first hire by the Electronic
Sensors & Systems Division after March 1, 1996. The Executives will not be

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considered to have
previously met the requirement of five years of continuous service as an Executive.

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APPENDIX C

Coordination With Westinghouse Plan

     Section C.01. In General. As part of the Westinghouse Acquisition, this Plan
was established by Northrop Grumman Corporation.

     (a) This Plan is intended to be a continuation of the Westinghouse Plan with only minor
changes.

     (b) This Plan assumes remaining liabilities of the Westinghouse Plan with regard to those
participants of the Westinghouse Plan who became Employees of the Northrop Grumman controlled group
on March 1, 1996 as a result of the Westinghouse Acquisition. Accordingly, benefits earned by
Participants of this Plan under the Westinghouse Plan before March 1, 1996 are payable under this
Appendix.

     (c) Employees first hired after the Westinghouse Acquisition will therefore not be affected by
this Appendix and will have their pension benefits governed entirely by the other Articles and
Appendices of this Plan.

     Section C.02. Pre-Acquisition Benefits.

     (a) Except as provided in Sections C.03 and C.04, benefits earned under the Westinghouse
Executive Pension Plan are in addition to the benefits which may be earned under Articles 4 and 5.

     (b) The Westinghouse Plan benefits will be calculated taking into account all pertinent facts
for determining benefits under the Westinghouse Plan’s provisions (including benefits and
contributions under Westinghouse plans) as they have existed from time to time.

     Section C.03. Coordination of Pre and Post-Acquisition Benefits. The Plan
will be interpreted in light of events before and after the Westinghouse Acquisition to coordinate
the calculation of benefits (including service and compensation components, benefits and
contributions under Westinghouse plans and rehire provisions) under this Appendix and benefits
based on Articles 4 and 5 so that the Plan will function as if it were essentially a continuation
of the Westinghouse Plan.

     Section C.04. No Duplication of Benefits. Because this Plan is intended as a
continuation of the Westinghouse Plan, this Plan will not pay any benefits already paid or payable
by the Westinghouse Plan itself.

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APPENDIX D

2005-2007 Transition Rules

     This Appendix D provides the distribution rules that apply to the portion of benefits under
the Plan subject to Code section 409A for Executives with benefit commencement dates after January
1, 2005 and before January 1, 2008.

     Section D.01. Election. Executives scheduled to commence payments during 2005
may elect to receive both pre-2005 benefit accruals and 2005 benefit accruals in any optional form
of benefit available under the Plan as of December 31, 2004. Executives electing optional forms of
benefits under this provision will commence payments on the Executive’s selected benefit
commencement date.

     Section D.02. 2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 &
Q&A-20, Executives commencing payments in 2005 from the Plan may elect a form of distribution from
among those available under the Plan on December 31, 2004, and benefit payments shall begin at the
time elected by the Executive.

     (a) Key Employees. A Key Employee Separating from Service on or after July 1, 2005,
with Plan distributions subject to Code section 409A scheduled to be paid in 2006 and within six
months of his date of Separation from Service, shall have such distributions delayed for six months
from the Key Employee’s date of Separation from Service. The delayed distributions shall be paid
as a single sum with interest at the end of the six month period and Plan distributions will resume
as scheduled at such time. Interest shall be computed using the retroactive annuity starting date
rate in effect under the Northrop Grumman Pension Plan on a month-by-month basis during such period
(i.e., the rate may change in the event the period spans two calendar years). Alternatively, the
Key Employee may elect under IRS Notice 2005-1, Q&A-20 to have such distributions accelerated and
paid in 2005 without the interest adjustment, provided, such election is made in 2005.

     (b) Lump Sum Option. During 2005, a temporary immediate lump sum feature shall be
available as follows:

          (1) In order to elect a lump sum payment pursuant to IRS Notice 2005-1, Q&A-20, an Executive
must be an elected or appointed officer of the Company and eligible to commence payments under the
underlying qualified pension plan on or after June 1, 2005 and on or before December 1, 2005;

          (2) The lump sum payment shall be made in 2005 as soon as feasible after the election; and

          (3) Interest and mortality assumptions and methodology for calculating lump sum amount shall
be based on the Plan’s procedures for calculating lump sums as of December 31, 2004.

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     Section D.03. 2006 and 2007 Commencements. Pursuant to IRS transition relief,
for all benefit commencement dates in 2006 and 2007 (provided election is made in 2006 or 2007),
distribution of Plan benefits subject to Code section 409A shall begin 12 months after the later
of: (a) the Executive’s benefit election date, or (b) the underlying qualified pension plan
benefit commencement date (as specified in the Executive’s benefit election form). Payments
delayed during this 12-month period will be paid at the end of the period with interest. Interest
shall be computed using the retroactive annuity starting date rate in effect under the Northrop
Grumman Pension Plan on a month-by-month basis during such period (i.e., the rate may change in the
event the period spans two calendar years).

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APPENDIX E

Post 2007 Distribution of 409A Amounts

     The provisions of this Appendix E shall apply only to the portion of benefits under the Plan
that are subject to Code section 409A with benefit commencement dates on or after January 1, 2008.
Distribution rules applicable to the Grandfathered Amounts are set forth in Article VII, and
Appendix D addresses distributions of amounts subject to Code section 409A with benefit
commencement dates after January 1, 2005 and prior to January 1, 2008

     Section E.01. Time of Distribution. Subject to the special rules provided in
this Appendix E, distributions to an Executive of his vested retirement benefit shall commence as
of the Payment Date.

     Section E.02. Special Rule for Key Employees. If an Executive is a Key
Employee and age 55 or older at his Separation from Service, distributions to the Executive shall
commence on the first day of the seventh month following the date of his Separation from Service
(or, if earlier, the date of the Executive’s death). Amounts otherwise payable to the Executive
during such period of delay shall be accumulated and paid on the first day of the seventh month
following the Executive’s Separation from Service, along with interest on the delayed payments.
Interest shall be computed using the retroactive annuity starting date rate in effect under the
Northrop Grumman Pension Plan on a month-by-month basis during such delay (i.e., the rate may
change in the event the delay spans two calendar years).

     Section E.03. Forms of Distribution. Subject to the special rules provided in
this Appendix E, an Executive’s vested retirement benefit shall be distributed in the form of a
single life annuity. However, an Executive may elect an optional form of benefit up until the
Payment Date. The optional forms of payment are:

     (a) 50% joint and survivor annuity

     (b) 75% joint and survivor annuity

     (c) 100% joint and survivor annuity.

     If an Executive is married on his Payment Date and elects a joint and survivor annuity, his
survivor annuitant will be his spouse unless some other survivor annuitant is named with spousal
consent. Spousal consent, to be effective, must be submitted in writing before the Payment Date
and must be witnessed by a Plan representative or notary public. No spousal consent is necessary
if the Company determines that there is no spouse or that the spouse cannot be found

     Section E.04. Death. If a married Executive dies before the Payment Date, a
death benefit will be payable to the Executive’s spouse commencing 90 days after the Executive’s
death. The death benefit will be a single life annuity in an amount equal to the survivor portion
of an Executive’s vested retirement benefit based on a 100% joint and survivor annuity determined
on the Executive’s date of death. This benefit is also payable to an Executive’s

- 35 -

 

domestic partner
who is properly registered with the Company in accordance with procedures established by the
Company.

     Section E.05. Actuarial Assumptions. Except as provided in Section E.06, all
forms of payment under this Appendix E shall be actuarially equivalent life annuity forms of
payment, and all conversions from one such form to another shall be based on the following
actuarial assumptions:

			
	     Interest Rate:	 	6%
	 	 	 
	     Mortality Table:	 	RP-2000 Mortality Table projected 15 years for future standardized cash
balance factors

     Section E.06. Accelerated Lump Sum Payouts.

     (a) Post-2007 Separations. Notwithstanding the provisions of this Appendix E, for
Executives who Separate from Service on or after January 1, 2008, if the present value of (a) the
vested portion of an Executive’s retirement benefit and (b) other vested amounts under nonaccount
balance plans that are aggregated with the retirement benefit under Code section 409A, determined
on the first of the month coincident with or following the date of his Separation from Service, is
less than or equal to $25,000, such benefit amount shall be distributed to the Executive (or his
spouse or domestic partner, if applicable) in a lump sum payment. Subject to the special timing
rule for Key Employees under Section E.02, the lump sum payment shall be made within 90 days after
the first of the month coincident with or following the date of the Executive’s Separation from
Service.

     (b) Pre-2008 Separations. Notwithstanding the provisions of this Appendix E, for
Executives who Separate from Service before January 1, 2008, if the present value of (a) the vested
portion of an Executive’s retirement benefit and (b) other vested amounts under nonaccount balance
plans that are aggregated with the retirement benefit under Code section 409A, determined on the
first of the month coincident with or following the date the Executive attains age 55, is less than
or equal to $25,000, such benefit amount shall be distributed to the Executive (or his spouse or
domestic partner, if applicable) in a lump sum payment within 90 days after the first of the month
coincident with or following the date the Executive attains age 55, but no earlier that January 1,
2008.

     (c) Conflicts of Interest. The present value of an Executive’s vested retirement
benefit shall also be payable in an immediate lump sum to the extent required under conflict of
interest rules for government service and permissible under Code section 409A.

     (d) Present Value Calculation. The conversion of an Executive’s retirement benefit
into a lump sum payment and the present value calculations under this Section E.06 shall be based
on the actuarial assumptions in effect under the Northrop Grumman Pension Plan for purposes of
calculating lump sum amounts, and will be based on the Executive’s immediate benefit if the
Executive is 55 or older at Separation from Service. Otherwise, the calculation will be based on
the benefit amount the Executive will be eligible to receive at age 55.

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     Section E.07. Effect of Early Taxation. If the Executive’s benefits under the
Plan are includible in income pursuant to Code section 409A, such benefits shall be distributed
immediately to the Executive.

     Section E.08. Permitted Delays. Notwithstanding the foregoing, any payment to
an Executive under the Plan shall be delayed upon the Company’s reasonable anticipation of one or
more of the following events:

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

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

     provided, that any payment delayed pursuant to this Section E.08 shall be paid in accordance
with Code section 409A.

- 37 -

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