Document:

exv10w2xiiy

Exhibit 10.2(ii)

NORTHROP GRUMMAN CORPORATION

TERMS AND CONDITIONS APPLICABLE TO

2009 RESTRICTED PERFORMANCE STOCK RIGHTS

GRANTED UNDER THE 2001 LONG-TERM INCENTIVE STOCK PLAN

          These Terms and Conditions (“Terms”) apply to certain “Restricted Performance Stock Rights”
(“RPSRs”) granted by Northrop Grumman Corporation (the “Company”) in 2009. If you were granted an
RPSR award by the Company in 2009, the date of grant of your RPSR award and the target number of
RPSRs applicable to your award are set forth in the letter from the Company announcing your RPSR
award grant (your “Grant Letter”) and are also reflected in the electronic stock plan award
recordkeeping system (“Stock Plan System”) maintained by the Company or its designee. These Terms
apply only with respect to your 2009 RPSR award. If you were granted an RPSR award, you are
referred to as the “Grantee” with respect to your award. Capitalized terms are generally defined
in Section 9 below if not otherwise defined herein.

          Each RPSR represents a right to receive one share of the Company’s Common Stock, or cash of
equivalent value as provided herein, subject to vesting as provided herein. The performance
period applicable to your award is January 1, 2009 to December 31, 2011 (the “Performance
Period”). The target number of RPSRs subject to your award is subject to adjustment as
provided herein. The RPSR award is subject to all of the terms and conditions set forth in
these Terms, and is further subject to all of the terms and conditions of the Plan, as it may
be amended from time to time, and any rules adopted by the Committee, as such rules are in
effect from time to time.

	1.	 	Vesting; Payment of RPSRs.

     The RPSRs are subject to the vesting and payment provisions established (or to be established,
as the case may be) by the Committee with respect to the Performance Period. RPSRs that vest based
on such provisions will be paid as provided below. No fractional shares will be issued.

     1.1 Performance-Based Vesting of RPSRs. At the conclusion of the Performance Period, the
Committee shall determine whether and the extent to which the applicable performance criteria have
been achieved for purposes of determining earnouts and RPSR payments. Based on its determination,
the Committee shall determine the percentage of target RPSRs subject to the award (if any) that
have vested for the Performance Period in accordance with the earnout schedule established (or to
be established, as the case may be) by the Committee with respect to the Performance Period (the
“Earnout Percentage”). Except as provided in Section 1.2 below, any RPSRs subject to the award
that are not vested as of the conclusion of the Performance Period after giving effect to the
Committee’s determinations under this Section 1.1 shall terminate and become null and void
immediately following such determinations.

     1.2 Minimum Vesting. The Earnout Percentage determined under Section 1.1 shall not be less
than thirty (30) percent; provided, however, that such minimum Earnout Percentage shall not apply
if, as of the grant date, the Grantee is either the Chief Executive Officer of the Company or is a
member of the Company’s Corporate Policy Council.

     1.3 Payment of RPSRs. The number of RPSRs payable at the conclusion of the Performance
Period (“Earned RPSRs”) shall be determined by multiplying the Earnout Percentage by the target
number of RPSRs subject to the award. The Earned RPSRs may be paid out in either an equivalent
number of shares of Common Stock, or, in the discretion of the Committee, in cash or in a
combination of shares of Common Stock and cash. In the event of a cash payment, the amount of the
payment for each Earned RPSR to be paid in cash will equal the Fair Market Value of a share of
Common Stock as of the date the Committee determines the extent to which the applicable RPSR
performance criteria have been achieved. RPSRs will be paid in the calendar year following the
calendar year containing the last day of the Performance Period (and generally will be paid in the
first 75 days of such year).

	2.	 	Early Termination of Award; Termination of Employment.

     2.1 General. The RPSRs subject to the award shall terminate and become null and void prior
to the conclusion of the Performance Period if and when (a) the award terminates in connection with
a Change in Control pursuant to Section 5 below, or (b) except as provided below in this Section 2
and in Section 5, the Grantee ceases for any reason to be an employee of the Company or one of its
subsidiaries.

     2.2 Termination of Employment Due to Retirement, Death or Disability. The number of RPSRs
subject to the award shall vest on a prorated basis as provided herein if the Grantee’s employment
by the Company and its subsidiaries terminates due to the Grantee’s Retirement, death, or
Disability and, in each

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case, only if the Grantee has completed at least six (6)
consecutive calendar months of employment with the Company or a subsidiary during the three-year
Performance Period. Such prorating of RPSRs shall be based on the number of full months the
Grantee was actually employed by the Company or one of its subsidiaries out of the thirty-six month
Performance Period. Partial months of employment during the Performance Period, even if
substantial, shall not be counted for purposes of prorated vesting. Any RPSRs subject to the award
that do not vest in accordance with this Section 2.2 upon a termination of the Grantee’s employment
due to Retirement, death or Disability shall terminate immediately upon such termination of
employment.

     Death or Disability. In the case of death or Disability (a) the Performance Period used to
calculate the Grantee’s Earned RPSRs will be deemed to have ended as of the most recent date that
performance has been measured by the Company with respect to the RPSRs (but in no event shall such
date be more than one year before the Grantee’s termination of employment), (b) the Earnout
Percentage of the Grantee’s RPSRs will be determined based on actual performance for that short
Performance Period, and (c) payment of Earned RPSRs will be made in the calendar year containing
the 75th day following the date of the Grantee’s death or Disability (and generally will
be paid on or about such 75th day). The Earnout Percentage shall be determined after
giving effect to Section 1.2, if applicable.

     Retirement in General. Subject to the following provisions of this Section 2.2, in the case
of Retirement, (a) the entire Performance Period will be used to calculate the Grantee’s Earned
RPSRs, (b) the Earnout Percentage of the Grantee’s RPSRs will be determined based on actual
performance for the Performance Period, and (c) payment of Earned RPSRs will be made in the
calendar year following the calendar year containing the last day of the Performance Period (and
generally will be paid in the first 75 days of such year). The Earnout Percentage shall be
determined after giving effect to Section 1.2, if applicable.

     In determining the Grantee’s eligibility for Retirement, service is measured by dividing (a)
the number of days the Grantee was employed by the Company or a subsidiary in the period commencing
with his or her last date of hire by the Company or a subsidiary through and including the date on
which the Grantee is last employed by the Company or a subsidiary, by (b) 365. If the Grantee
ceased to be employed by the Company or a subsidiary and was later rehired by the Company or a
subsidiary, the Grantee’s service prior to the break in service shall be disregarded in determining
service for such purposes; provided that, if the Grantee’s employment with the Company or a
subsidiary had terminated due to the Grantee’s Retirement, or by the Company as part of a reduction
in force (in each case, other than a termination by the Company or a subsidiary for cause) and,
within the two-year period following such termination of employment (the “break in service”) the
Grantee was subsequently rehired by the Company or a subsidiary, then the Grantee’s period of
service with the Company or a subsidiary prior to and ending with the break in service will be
included in determining service for such purposes. In the event the Grantee is employed by a
business that is acquired by the Company or a subsidiary, the Company shall have discretion to
determine whether the Grantee’s service prior to the acquisition will be included in determining
service for such purposes.

     Retirement Due to Government Service. In the case of Retirement where the Grantee accepts a
position in the federal government or a state or local government and an accelerated distribution
under the award is permitted under Code Section 409A based on such government employment and
related ethics rules (a) the Performance Period used to calculate the Grantee’s Earned RPSRs will
be deemed to have ended as of the most recent date that performance has been measured by the
Company with respect to the RPSRs prior to the Grantee’s Retirement (but in no event shall such
date be more than one year before the Grantee’s Retirement), (b) the Earnout Percentage of the
Grantee’s RPSRs will be determined based on actual performance for that short Performance Period,
and (c) payment of Earned RPSRs will be made within 10 days after Retirement. The Earnout
Percentage shall be determined after giving effect to Section 1.2, if applicable.

     2.3 Other Terminations of Employment. Subject to Section 5.2, all RPSRs subject to the
award terminate immediately upon a termination of the Grantee’s employment: (a) for any reason
other than due to the Grantee’s Retirement, death or Disability; or (b) for Retirement, death or
Disability, if the six-month employment requirement under Section 2.2 above is not satisfied.

     2.4 Leave of Absence. Unless the Committee otherwise provides (at the time of the leave or
otherwise), if the Grantee is granted a leave of absence by the Company, the Grantee (a) shall not
be deemed to have incurred a termination of employment at the time such leave commences for
purposes of the award, and (b) shall be deemed to be employed by the Company for the duration of
such approved leave of absence for purposes of the award. A termination of employment shall
be deemed to have occurred if the Grantee does not timely return to active employment upon the
expiration of such approved leave or if the Grantee commences a leave that is not approved by the
Company.

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     2.5 Salary Continuation. Subject to Section 2.4 above, the term “employment” as used herein
means active employment by the Company and salary continuation without active employment (other
than a leave of absence approved by the Company that is covered by Section 2.4) will not, in and of
itself, constitute “employment” for purposes hereof (in the case of salary continuation without
active employment, the Grantee’s cessation of active employee status shall, subject to Section 2.4,
be deemed to be a termination of “employment” for purposes hereof). Furthermore, salary
continuation will not, in and of itself, constitute a leave of absence approved by the Company for
purposes of the award.

     2.6 Sale or Spinoff of Subsidiary or Business Unit. For purposes of the RPSRs subject to
the award, a termination of employment of the Grantee shall be deemed to have occurred if the
Grantee is employed by a subsidiary or business unit and that subsidiary or business unit is sold,
spun off, or otherwise divested and the Grantee does not Retire upon or immediately before such
event and the Grantee does not otherwise continue to be employed by the Company or one of its
subsidiaries after such event.

     2.7 Continuance of Employment Required. Except as expressly provided in Sections 2.2 and
2.4 above and in Section 5 below, the vesting of the RPSRs subject to the award requires continued
employment through the last day of the Performance Period as a condition of the payment of such
RPSRs. Employment for only a portion of the Performance Period, even if a substantial portion,
will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment. Nothing contained in these
Terms, the Grant Letter, the Stock Plan System, or the Plan constitutes an employment commitment by
the Company or any subsidiary, affects the Grantee’s status (if the Grantee is otherwise an at-will
employee) as an employee at will who is subject to termination without cause, confers upon the
Grantee any right to continue in the employ of the Company or any subsidiary, or interferes in any
way with the right of the Company or of any subsidiary to terminate such employment at any time.

     2.8 Death. In the event of the Grantee’s death subsequent to the vesting of RPSRs but prior
to the delivery of shares or other payment with respect to such RPSRs, the Grantee’s Successor
shall be entitled to any payments to which the Grantee would have been entitled under this
Agreement with respect to such RPSRs.

	3.	 	Non-Transferability and Other Restrictions.

     3.1 Non-Transferability. The award, as well as the RPSRs subject to the award, are
non-transferable and shall not be subject in any manner to sale, transfer, anticipation,
alienation, assignment, pledge, encumbrance or charge. The foregoing transfer restrictions shall
not apply to transfers to the Company. Notwithstanding the foregoing, the Company may honor any
transfer required pursuant to the terms of a court order in a divorce or similar domestic relations
matter to the extent that such transfer does not adversely affect the Company’s ability to register
the offer and sale of the underlying shares on a Form S-8 Registration Statement and such transfer
is otherwise in compliance with all applicable legal, regulatory and listing requirements.

     3.2 Recoupment of Awards. Any payments or issuances of shares with respect to the award are
subject to recoupment pursuant to the Company’s Policy Regarding the Recoupment of Certain
Performance-Based Compensation Payments as in effect from time to time, and the Grantee shall
promptly make any reimbursement requested by the Board or Committee pursuant to such policy with
respect to the award. Further, the Grantee agrees, by accepting the award, that the Company and
its affiliates may deduct from any amounts it may owe the Grantee from time to time (such as wages
or other compensation) to the extent of any amounts the Grantee is required to reimburse the
Company pursuant to such policy with respect to the award.

	4.	 	Compliance with Laws; No Stockholder Rights Prior to Issuance.

     The Company’s obligation to make any payments or issue any shares with respect to the award is
subject to full compliance with all then applicable requirements of law, the Securities and
Exchange Commission, the Commissioner of Corporations of the State of California, or other
regulatory agencies having jurisdiction over the Company and its shares, and of any exchange upon
which stock of the Company may be listed. The Grantee shall not have the rights and privileges of
a stockholder, including without limitation the right to vote or receive dividends, with respect to
any shares which may be issued in respect of the RPSRs until the date appearing on the
certificate(s) for such shares (or, in the case of shares entered in book entry form, the date that
the shares are actually recorded in such form for the benefit of the Grantee), if such shares
become deliverable.

	5.	 	Adjustments; Change in Control.

     5.1 Adjustments. The RPSRs, related performance criteria, and the shares subject to the
award are subject to adjustment upon the occurrence of events such as stock splits, stock dividends
and other changes in capitalization in accordance with Section 6(a) of the Plan. In the event of
any adjustment, the Company will

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give the Grantee written notice thereof which will set forth the
nature of the adjustment.

     5.2 Possible Acceleration on Change in Control. Notwithstanding the provisions of Section 2
hereof, and further subject to the Company’s ability to terminate the award as provided in Section
5.3 below, the Grantee shall be entitled to proportionate vesting of the award as provided below if
the Grantee is not otherwise entitled to a pro-rata payment pursuant to Section 2 and in the event
of the Grantee’s termination of employment in the following circumstances:

	 	(a)	 	if the Grantee is covered by a Change in Control Severance Arrangement at the time of the
termination, and the termination of employment constitutes a “Qualifying Termination” (as
such term, or any similar successor term, is defined in such Change in Control Severance
Arrangement) that triggers the Grantee’s right to severance benefits under such Change in
Control Severance Arrangement.
	 
	 	(b)	 	if the Grantee is not covered by a Change in Control Severance Arrangement at the time of
the termination, the termination occurs either within the Protected Period corresponding to
a Change in Control of the Company or within twenty-four (24) calendar months following the
date of a Change in Control of the Company, and the Grantee’s employment by the Company and
its subsidiaries is involuntarily terminated by the Company and its subsidiaries for reasons
other than Cause or by the Grantee for Good Reason.

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

In the event the Grantee is entitled to a prorated payment in accordance with the foregoing
provisions of this Section 5.2, then the Grantee will be eligible for a prorated portion of the
RPSRs determined in accordance with the following formula: (a) the Earnout Percentage determined
in accordance with Section 1 but calculated based on performance for the portion of the three-year
Performance Period ending on the last day of the month coinciding with or immediately preceding the
date of the termination of the Grantee’s employment, multiplied by (b) the target number of RPSRs
subject to the award, multiplied by (c) a fraction the numerator of which is the total number of
full months that the Grantee was an employee of the Company or a subsidiary on and after the
beginning of the Performance Period and through the date of the termination of the Grantee’s
employment (but not in excess of 36 months) and the denominator of which is 36. Payment of any
amount due under this Section 5.2 will be made in the calendar year following the calendar year
containing the last day of the Performance Period (and generally will be paid in the first 75 days
of such year).

     5.3 Automatic Acceleration; Early Termination. If the Company undergoes a Change in Control
triggered by clause (iii) or (iv) of the definition thereof and the Company is not the surviving
entity and the successor to the Company (if any) (or a Parent thereof) does not agree in writing
prior to the occurrence of the Change in Control to continue and assume the award following the
Change in Control, or if for any other reason the award would not continue after the Change in
Control, then upon the Change in Control the Grantee shall be entitled to a prorated payment of the
RPSRs as provided below and the award shall terminate. Unless the Committee expressly provides
otherwise in the circumstances, no acceleration of vesting of the award shall occur pursuant to
this Section 5.3 in connection with a Change in Control if either (a) the Company is the surviving
entity, or (b) the successor to the Company (if any) (or a Parent thereof) agrees in writing prior
to the Change in Control to assume the award. The Committee may make adjustments pursuant to
Section 6(a) of the Plan and/or deem an acceleration of vesting of the award pursuant to this
Section 5.3 to occur sufficiently prior to an event if necessary or deemed appropriate to permit
the Grantee to realize the benefits intended to be conveyed with respect to the shares underlying
the award; provided, however, that, the Committee may reinstate the original terms of the award if
the related event does not actually occur.

     In the event the Grantee is entitled to a prorated payment in accordance with the foregoing
provisions of this Section 5.3, then the Grantee will, be eligible for a prorated portion of the
RPSRs determined in accordance with the following formula: (a) the Earnout Percentage determined
in accordance with Section 1 but calculated based on performance for the
portion of the three-year Performance Period ending on the date of the Change in Control of
the Company, multiplied by (b) the target number of RPSRs subject to the award, multiplied by (c) a
fraction the numerator of which is the total number of full months that the Grantee was an employee
of the Company or a subsidiary on and after the beginning of the Performance Period and before the
occurrence of the

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Change in Control (but not in excess of 36 months) and the denominator of which
is 36. Payment of any amount due under this Section 5.3 will be made in the calendar year
following the calendar year containing the last day of the Performance Period (and generally will
be paid in the first 75 days of such year).

	6.	 	Tax Matters.

     6.1 Tax Withholding. The Company or the subsidiary which employs the Grantee shall be
entitled to require, as a condition of making any payments or issuing any shares upon vesting of
the RPSRs, that the Grantee or other person entitled to such shares or other payment pay any sums
required to be withheld by federal, state, local or other applicable tax law with respect to such
vesting or payment. Alternatively, the Company or such subsidiary, in its discretion, may make
such provisions for the withholding of taxes as it deems appropriate (including, without
limitation, withholding the taxes due from compensation otherwise payable to the Grantee or
reducing the number of shares otherwise deliverable with respect to the award (valued at their then
Fair Market Value) by the amount necessary to satisfy such withholding obligations).

     6.2 Transfer Taxes. The Company will pay all federal and state transfer taxes, if any, and
other fees and expenses in connection with the issuance of shares in connection with the vesting of
the RPSRs.

     6.3 Compliance with Code. The Committee shall administer and construe the award, and may
amend the Terms of the award, in a manner designed to comply with the Code and to avoid adverse tax
consequences under Code Section 409A or otherwise.

     6.4 Unfunded Arrangement. The right of the Grantee to receive payment under the award shall
be an unsecured contractual claim against the Company. As such, neither the Grantee nor any
Successor shall have any rights in or against any specific assets of the Company based on the
award. Awards shall at all times be considered entirely unfunded for tax purposes.

	7.	 	Committee Authority.

     The Committee has the discretionary authority to determine any questions as to the date when
the Grantee’s employment terminated and the cause of such termination and to interpret any
provision of these Terms, the Grant Letter, the Stock Plan System, the Plan, and any other
applicable rules. Any action taken by, or inaction of, the Committee relating to or pursuant to
these Terms, the Grant Letter, the Stock Plan System, the Plan, or any other applicable rules shall
be within the absolute discretion of the Committee and shall be conclusive and binding on all
persons.

	8.	 	Plan; Amendment.

     The RPSRs subject to the award are governed by, and the Grantee’s rights are subject to, all
of the terms and conditions of the Plan and any other rules adopted by the Committee, as the
foregoing may be amended from time to time. The Grantee shall have no rights with respect to any
amendment of these Terms or the Plan unless such amendment is in writing and signed by a duly
authorized officer of the Company. In the event of a conflict between the provisions of the Grant
Letter and/or the Stock Plan System and the provisions of these Terms and/or the Plan, the
provisions of these Terms and/or the Plan, as applicable, shall control.

	9.	 	Definitions.

     Whenever used in these Terms, the following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is capitalized:

     “Board” means the Board of Directors of the Company.

     “Cause” means the occurrence of either or both of the following:

	 	(i)	 	The Grantee’s conviction for committing an act of fraud, embezzlement, theft, or other
act constituting a felony (other than traffic related offenses or as a result of vicarious
liability); or
	 
	 	(ii)	 	The willful engaging by the Grantee in misconduct that is significantly injurious to the
Company. However, no act, or failure to act, on the Grantee’s part shall be considered
“willful” unless done, or omitted to be done, by the Grantee not in good faith and without
reasonable belief that his action or omission was in the best interest of the Company.

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

     “Change in Control Severance Arrangement” means a “Special Agreement” entered into by and
between the Grantee and the Company that provides severance protections in the event of certain
changes in control of the Company or the Company’s Change-in-Control Severance Plan, as each may be
in effect from time to time, or any similar successor agreement or plan that provides severance
protections in the event of a change in control of the Company.

     “Code” means the United States Internal Revenue Code of 1986, as amended.

     “Committee” means the Company’s Compensation and Management Development Committee or any

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successor committee appointed by the Board to administer the Plan.

     “Common Stock” means the Company’s common stock.

     “Disability” means, with respect to a Grantee, that the Grantee: (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve months; or (ii) is, by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve months, receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering employees of the
Grantee’s employer; all construed and interpreted consistent with the definition of “Disability”
set forth in Code Section 409A(a)(2)(C).

     “Fair Market Value” is used as defined in the Plan; provided, however, the Committee in
determining such Fair Market Value for purposes of the award may utilize such other exchange,
market, or listing as it deems appropriate.

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

	 	(i)	 	A material and substantial reduction in the nature or status of the Grantee’s authorities
or responsibilities (when such authorities and/or responsibilities are viewed in the
aggregate) from their level in effect on the day immediately prior to the start of the
Protected Period, other than (A) an inadvertent act that is remedied by the Company promptly
after receipt of notice thereof given by the Grantee, and/or (B) changes in the nature or
status of the Grantee’s authorities or responsibilities that, in the aggregate, would
generally be viewed by a nationally-recognized executive placement firm as resulting in the
Grantee having not materially and substantially fewer authorities and responsibilities
(taking into consideration the Company’s industry) when compared to the authorities and
responsibilities applicable to the position held by the Grantee immediately prior to the
start of the Protected Period. The Company may retain a nationally-recognized executive
placement firm for purposes of making the determination required by the preceding sentence
and the written opinion of the firm thus selected shall be conclusive as to this issue.
	 
	 	 	 	In addition, if the Grantee is a vice president, the Grantee’s loss of vice-president status
will constitute “Good Reason”; provided that the loss of the title of “vice president” will
not, in and of itself, constitute Good Reason if the Grantee’s lack of a vice president title
is generally consistent with the manner in which the title of vice president is used within
the Grantee’s business unit or if the loss of the title is the result of a promotion to a
higher level office. For the purposes of the preceding sentence, the Grantee’s lack of a
vice-president title will only be considered generally consistent with the manner in which
such title is used if most persons in the business unit with authorities, duties, and
responsibilities comparable to those of the Grantee immediately prior to the commencement of
the Protected Period do not have the title of vice-president.
	 
	 	(ii)	 	A reduction by the Company in the Grantee’s annualized rate of base salary as in effect
on the first to occur of the start of the Performance Period or the start of the Protected
Period, or as the same shall be increased from time to time.
	 
	 	(iii)	 	A material reduction in the aggregate value of the Grantee’s level of participation in
any of the Company’s short and/or long-term incentive compensation plans (excluding
stock-based incentive compensation plans), employee
benefit or retirement plans, or policies, practices, or arrangements in which the Grantee
participates immediately prior to the start of the Protected Period provided; however, that a
reduction in the aggregate value shall not be deemed to be “Good Reason” if the reduced value
remains substantially consistent with the average level of other employees who have positions
commensurate with the position held by the Grantee immediately prior to the start of the
Protected Period.

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

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

     The Grantee’s right to terminate employment for Good Reason shall not be affected by the
Grantee’s incapacity due to physical or mental illness. The Grantee’s continued employment shall
not constitute a consent to, or a waiver of rights with respect to, any circumstances constituting
Good Reason herein.

     “Parent” is used as defined in the Plan.

     “Plan” means the Northrop Grumman 2001 Long-Term Incentive Stock Plan, as it may be amended
form time to time.

     The “Protected Period” corresponding to a Change in Control of the Company shall be a period
of time determined in accordance with the following:

	 	(i)	 	If the Change in Control is triggered by a tender offer for shares of the Company’s stock
or by the offeror’s acquisition of shares pursuant to such a tender offer, the Protected
Period shall commence on the date of the initial tender offer and shall continue through and
including the date of the Change in Control; provided that in no case will the Protected
Period commence earlier than the date that is six (6) months prior to the Change in Control.
	 
	 	(ii)	 	If the Change in Control is triggered by a merger, consolidation, or reorganization of
the Company with or involving any other corporation, the Protected Period shall commence on
the date that serious and substantial discussions first take place to effect the merger,
consolidation, or reorganization and shall continue through and including the date of the
Change in Control; provided that in no case will the Protected Period commence earlier than
the date that is six (6) months prior to the Change in Control.
	 
	 	(iii)	 	In the case of any Change in Control not described in clause (i) or (ii) above, the
Protected Period shall commence on the date that is six (6) months prior to the Change in
Control and shall continue through and include the date of the Change in Control.

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

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

7exv10w3

Exhibit 10.3

CALIFORNIA LIFE AND HEALTH INSURANCE

GUARANTY ASSOCIATION ACT

SUMMARY DOCUMENT AND DISCLAIMER

Residents of California who purchase life and health insurance and annuities should know that the
insurance companies licensed in this state to write these types of insurance are members of the
California Life and Health Insurance Guaranty Association. The purpose of this Association is to
assure that policyholders will be protected, within limits, in the unlikely event that a member
insurer becomes financially unable to meet its obligations. If this should happen, the Association
will assess its other member insurance companies for the money to pay the claims of insured persons
who live in this state and, in some cases, to keep coverage in force. The valuable extra
protection provided through the Association is not unlimited, as noted in the box below, and is not
a substitute for consumers’ care in selecting well managed and financially stable insurers.

The California Life and Health Insurance Guaranty Association may not provide
coverage for this insurance. If coverage is provided, it may be subject to
substantial limitations or exclusions, and require continued residency in the
state. You should not rely on coverage by the Association in selecting an
insurance company or in selecting an insurance policy.

Coverage is NOT provided for your insurance or any portion of it that is not
guaranteed by the Insurer or for which you have assumed the risk, such as a
variable contract sold by prospectus.

Insurance companies or their agents are required by law to give or send you
this notice. However, insurance companies and their agents are prohibited by
law from using the existence of the Association to induce you to purchase any
kind of insurance policy.

If you have additional questions, you should first contact your insurer or
agent and then may contact:

	 	 	 	 	 
	     California Life and Health

	 	OR
	 	Consumer Service Division
	     Insurance Guaranty Association

	 	 	 	California Department of Insurance
	     P.O. Box 16860

	 	 	 	300 South Spring Street
	     Beverly Hills, CA 90209

	 	 	 	Los Angeles, CA 90013

Below is a brief summary of this law’s coverages, exclusions and limits. This summary does not
cover all provisions of the law; nor does it in any way change anyone’s rights or obligations under
the Act or the rights or obligations of the Association.

COVERAGE

Generally, individuals will be protected by the California Life and Health Insurance Guaranty
Association if they live in this state and hold a life or health insurance contract, or an annuity,
or if they are insured under a group insurance contract, issued by a member insurer. The
beneficiaries, payees or assignees of insured persons are protected as well, even if they live in
another state.

 

 

EXCLUSIONS FROM COVERAGE

However, persons holding such policies are not protected by this Association if:

	•	 	their insurer was not authorized to do business in this state when it issued the policy or
contract;
	 
	•	 	their policy was issued by a health care service plan (HMO), Blue Cross, Blue Shield, a
charitable organization, a fraternal benefit society, a mandatory state pooling plan, a mutual
assessment company, an insurance exchange, or a grants and annuities society;
	 
	•	 	they are eligible for protection under the laws of another state. This may occur when the
insolvent insurer was incorporated in another state whose Guaranty Association protects
insureds who live outside that state.

The Association also does not provide coverage for:

	•	 	unallocated annuity contracts; that is, contracts which are not issued to and owned by an
individual and which guarantee rights to group contract holders, not individuals;
	 
	•	 	employer and association plans to the extent they are self-funded or uninsured;
	 
	•	 	synthetic guaranteed interest contracts;
	 
	•	 	any policy or portion of a policy which is not guaranteed by the insurer or for which the
individual has assumed the risk, such as a variable contract sold by prospectus;
	 
	•	 	any policy of reinsurance unless an assumption certificate was issued;
	 
	•	 	interest rate yields that exceed an average rate; and
	 
	•	 	any portion of a contract that provides dividends or experience rating credits.

LIMITS ON AMOUNT OF COVERAGE

The Act limits the Association to pay benefits as follows:

Life and Annuity Benefits

	•	 	80% of what the life insurance company would owe under a life policy or annuity contract up
to

	 	•	 	$100,000 in cash surrender values;
	 
	 	•	 	$100,000 in present value of annuities; or
	 
	 	•	 	$250,000 in life insurance death benefits.

	•	 	A maximum of $250,000 for any one insured life no matter how many policies and contracts
there were with the same company, even if the policies provided different types of coverages.

Health Benefits

	 	•	 	A maximum of $200,000 of the contractual obligations that the health insurance company
would owe were it not insolvent. The maximum may increase or decrease annually based upon
changes in the health care cost component of the consumer price index.

PREMIUM SURCHARGE

Member insurers are required to recoup assessments paid to the Association by way of a surcharge on
premiums charged for health insurance policies to which the act applies.

 

 

Life Insurance Company of North America

1601 Chestnut Street, Philadelphia, Pennsylvania 19192-2235

A Stock Insurance Company

 

GROUP ACCIDENT POLICY

	 	 	 	 	 
	 

	 	POLICYHOLDER:
	 	Trustee of the Group Insurance Trust for
	 

	 	 	 	Employers in the Manufacturing Industry
	 
	 	 	 	 
	 

	 	SUBSCRIBER:
	 	Northrop Grumman Corporation
	 
	 	 	 	 
	 

	 	POLICY NUMBER:
	 	OK 980036
	 
	 	 	 	 
	 

	 	POLICY EFFECTIVE DATE:
	 	June 1, 2004
	 
	 	 	 	 
	 

	 	POLICY REWRITE DATE:
	 	July 1, 2007
	 
	 	 	 	 
	 

	 	POLICY ANNIVERSARY DATE:
	 	July 1
	 
	 	 	 	 
	 

	 	STATE OF ISSUE:
	 	Delaware

This Policy is a continuation of and replaces the same numbered policy that became effective June
1, 2004, as rewritten effective December 29, 2004. Any different benefits provided by this Policy
become effective on its Rewrite Date shown above. Any different benefits will not affect benefits
payable for claims incurred before the Policy Rewrite Date.

This Policy describes the terms and conditions of insurance. This Policy goes into effect subject
to its applicable terms and conditions at 12:01 AM on the Policy Rewrite Date shown above at the
Policyholder’s address. The laws of the State of Issue shown above govern this Policy.

We and the Policyholder agree to all of the terms of this Policy.

THIS IS A GROUP ACCIDENT ONLY INSURANCE POLICY.

IT DOES NOT PAY BENEFITS FOR LOSS CAUSED BY SICKNESS.

THIS IS A LIMITED POLICY.

PLEASE READ IT CAREFULLY.

	 	 	 	 	 
	

	 	 	 	
	 

	 	 	 	 
	Deborah Young, Corporate Secretary

	 	 	 	Karen S. Rohan, President

Countersigned ______________________________________

Where Required By Law

GA-00-1000.00

 

 

TABLE OF CONTENTS

	 	 	 
	SECTION	 	PAGE NUMBER
	 
	 	 
	SCHEDULE OF AFFILIATES
	 	  1
	SCHEDULE OF BENEFITS
	 	  2
	GENERAL DEFINITIONS
	 	42
	ELIGIBILITY AND EFFECTIVE DATE PROVISIONS
	 	45
	COMMON EXCLUSIONS
	 	46
	CONVERSION PRIVILEGE
	 	47
	CLAIM PROVISIONS
	 	48
	ADMINISTRATIVE PROVISIONS
	 	50
	GENERAL PROVISIONS
	 	51
	ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGE
	 	53
	EXPOSURE AND DISAPPEARANCE COVERAGE
	 	54
	HIJACKING AND AIR PIRACY COVERAGE
	 	54
	OWNED AIRCRAFT COVERAGE
	 	54
	PILOT COVERAGE
	 	54
	WAR RISK COVERAGE
	 	55
	BRAIN DAMAGE BENEFIT
	 	55
	FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
	 	55
	HOME ALTERATION AND VEHICLE MODIFICATION BENEFIT
	 	56
	HOSPITAL STAY BENEFIT
	 	56
	REHABILITATION BENEFIT
	 	57
	SEATBELT AND AIRBAG BENEFIT
	 	57
	SPOUSE OR DOMESTIC PARTNER SURVIVOR BENEFIT
	 	57

GA-00-1000.00

 

 

SCHEDULE OF AFFILIATES

The following affiliates are covered under this Policy on the effective dates listed below.

	 	 	 	 	 	 	 	 	 
	AFFILIATE NAME	 	LOCATION	 	 	EFFECTIVE DATE	 
	 
	 	 	 	 	 	 	 	 
	None
	 	 	 	 	 	 	 	 

GA-00-1000.00

1

 

SCHEDULE OF BENEFITS
 

This Policy is intended to be read in its entirety. In order to understand all the conditions,
exclusions and limitations applicable to its benefits, please read all the policy provisions
carefully.

The Schedule of Benefits provides a brief outline of the coverage and benefits provided by this
Policy. Please read the Description of Coverages and Benefits Section for full details.

	 	 	 
	Subscriber:
	 	Northrop Grumman Corporation
	 
	 	 
	Effective Date of Subscriber Participation:
	 	June 1, 2004
	 
	 	 
	Policy Rewrite Date:
	 	July 1, 2007
	 
	 	 
	Minimum Participation Requirements:
	 	 
	Percentage
	 	Not applicable
	 
	 	 
	Covered Classes:
	 	 

	 	 	 
	Class 1

	 	All active, Employees who are members of Executive Class 1, Executive Class 2, Executive Class 3,
Executive Class 4, and Executive Class 9 as on file with the Subscriber.
	Class 2

	 	All active, Employees eligible for coverage under the Northrop Grumman Health Plan (NGHP)*,
excluding the following: Employees who are members of Executive Classes 1, 2, 3, 4, and 9 as on
file with the Subscriber; Electronic Systems (ES) Employees in Entities 66, 68 and 78 represented
by a collective bargaining agreement; Electronic Systems (ES) Contract Specific Employees;
Employees of Ingalls represented by a collective bargaining agreement; Employees of Avondale
represented by a collective bargaining agreement; Litton Corporate Office Employees under a CIC
Agreement; and Employees represented by collective bargaining agreements between Newport News
Shipbuilding and United Steelworkers of America, Local 888, The International Union Security,
Police and Fire Professionals of America, Local 451, and International Association of Fire
Fighters, Local I-45.
	Class 5

	 	All active, Employees represented by a collective bargaining agreement between Newport News
Shipbuilding and United Steelworkers of America, Local 888 (bargaining unit) who have completed at
least 3 months of continuous, active employment.
	Class 6

	 	All active, Electronic Systems (ES) Employees in Entities 66, 68 and 78 who are eligible for
coverage under the Northrop Grumman Health Plan (NGHP)* that are represented by a collective
bargaining agreement.
	Class 7

	 	All active, Electronic Systems (ES) Contract Specific Employees.
	Class 8

	 	All active, Employees represented by a collective bargaining agreement between Newport News
Shipbuilding and The International Union Security, Police and Fire Professionals of America, Local
451 (bargaining unit) who have completed at least 3 months of continuous, active employment.
	Class 9

	 	All active, Employees who are covered by the collective bargaining agreement between Newport News
Shipbuilding and International Association of Fire Fighters, Local I-45 (bargaining unit) who have
completed at least 3 months of continuous, active employment.
	Class 10

	 	Former hourly Employees of Northrop Grumman’s PEI facility on disability leave commencing June 9,
2006.
	Class 11

	 	Former hourly Employees of Northrop Grumman’s PEI facility on disability leave commencing August
16, 2006.
	Class 12

	 	Hourly Employees of Northrop Grumman’s PEI facility.
	Class 13

	 	All active, Employees of Ingalls represented by a collective bargaining agreement.
	Class 14

	 	All active, Employees of Avondale represented by a collective bargaining agreement.
	Class 15

	 	All former Litton Corporate Office Employees under a CIC agreement.

2

 

SCHEDULE OF BENEFITS FOR CLASS 1
 

This Schedule of Benefits shows maximums, benefit periods and any limitations applicable to
benefits provided in this Policy for each Covered Person unless otherwise indicated. Principal
Sum, when referred to in this Schedule, means the Employee’s Principal Sum in effect on the date of
the Covered Accident causing the Covered Injury or Covered Loss unless otherwise specified.

Eligibility Waiting Period

The Eligibility Waiting Period is the period of time the Employee must be in a Covered Class to be
eligible for coverage.

	 	 	 
	For Employees hired on or before the Policy Effective Date:

	 	None
	For Employees hired after the Policy Effective Date:

	 	None

Time Period for Loss:

	 	 	 
	Any Covered Loss must occur within:

	 	365 days of the Covered Accident

BASIC ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS

	 	 	 
	Employee Principal Sum:

	 	6 times the Employee’s Annual Compensation to a maximum of
$1,000,000

Changes in the Covered Person’s amount of insurance resulting from a change in the
Employee’s amount of Annual Compensation take effect, subject to any Active Service
requirement, on the effective date of the change in Annual Compensation.

SCHEDULE OF COVERED LOSSES

	 	 	 
	Covered Loss	 	Benefit
	Loss of Life
	 	100% of the Principal Sum
	Loss of Two or More Hands or Feet
	 	100% of the Principal Sum
	Loss of Sight of Both Eyes
	 	100% of the Principal Sum
	Loss of One Hand or One Foot and Sight in One Eye
	 	100% of the Principal Sum
	Loss of Speech and Hearing (in both ears)
	 	100% of the Principal Sum
	Quadriplegia
	 	100% of the Principal Sum
	Paraplegia
	 	75% of the Principal Sum
	Hemiplegia
	 	50% of the Principal Sum
	Coma
	 	 
	Monthly Benefit
	 	1% of the Principal Sum
	Number of Monthly Benefits
	 	11
	When Payable
	 	At the end of each month during which the Covered
	 
	 	Person remains comatose
	Lump Sum Benefit
	 	100% of the Principal Sum
	When Payable
	 	Beginning of the 12th month
	Loss of One Hand or Foot
	 	75% of the Principal Sum
	Loss of Sight in One Eye
	 	60% of the Principal Sum
	Loss of Speech
	 	85% of the Principal Sum
	Loss of Hearing (in both ears)
	 	85% of the Principal Sum
	Severance and Reattachment of One Hand or Foot
	 	25% of the Principal Sum
	Loss of Thumb and Index Finger of the Same Hand
	 	25% of the Principal Sum
	 
	Maximum for all Covered Losses
	 	 
	from any one Covered Accident
	 	100% of the Principal Sum

3

 

ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES

Accidental Death and Dismemberment benefits are provided under the following coverages. Any
benefits payable under them are as shown in the Schedule of Covered Losses and are not paid in
addition to any other Accidental Death and Dismemberment benefits.

	 	 	 
	EXPOSURE AND DISAPPEARANCE COVERAGE

	 	Principal Sum multiplied by the
percentage applicable to the Covered
Loss, as shown in the Schedule of
Covered Losses.
	 
	 	 
	HIJACKING AND AIR PIRACY COVERAGE

	 	Principal Sum multiplied by the
percentage applicable to the Covered
Loss, as shown in the Schedule of
Covered Losses.
	 
	 	 
	OWNED AIRCRAFT COVERAGE

	 	Principal Sum multiplied by the
percentage applicable to the Covered
Loss, as shown in the Schedule of
Covered Losses.
	 
	 	 
	PILOT COVERAGE

	 	Principal Sum multiplied by the
percentage applicable to the Covered
Loss, as shown in the Schedule of
Covered Losses.
	 
	 	 
	WAR RISK COVERAGE

	 	Principal Sum multiplied by the
percentage applicable to the Covered
Loss, as shown in the Schedule of
Covered Losses.

ADDITIONAL ACCIDENT BENEFITS

Any benefits payable under these Additional Accident Benefits shown below are paid in addition to
any other Accidental Death and Dismemberment benefits payable.

	 	 	 
	BRAIN DAMAGE BENEFIT
	 	100% of the Covered Person’s Principal Sum
	 
	 	 
	FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
	 	 
	Accidental Death and Dismemberment Benefit
	 	10% multiplied by the percentage of the Covered
Person’s Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered Losses, subject to a minimum of $100 and a maximum of $10,000
	 
	 	 
	HOME ALTERATION AND VEHICLE
	 	 
	MODIFICATION BENEFIT
	 	 
	Benefit
	 	10% of the Covered Person’s Principal Sum subject to a maximum of $25,000
	 
	 	 
	HOSPITAL STAY BENEFIT
	 	 
	Benefit Amount
	 	5% of the Covered Person’s Principal
Sum per month, subject to a minimum of $250 and a maximum of $1,000 per month
	Maximum Benefit Period
	 	12 months per Hospital Stay per Covered Accident
	Benefit Waiting Period
	 	7 days
	 
	 	 
	REHABILITATION BENEFIT
	 	 
	Benefit per Covered Accident
	 	20% multiplied by the percentage of the Covered Person’s Principal
	 
	 	Sum applicable to the Covered Loss, as shown in the Schedule of Covered Losses, subject to a minimum of $4,500 and a maximum of $18,000
	 
	 	 
	SEATBELT AND AIRBAG BENEFIT
	 	 
	Seatbelt Benefit
	 	20% of the Covered Person’s Principal Sum subject to a minimum of $500 and a maximum of $25,000
	Airbag Benefit
	 	10% of the Covered Person’s Principal Sum subject to a minimum of $250 and a maximum of $10,000

4

 

	 	 	 
	SPOUSE OR DOMESTIC PARTNER
	 	 
	SURVIVOR BENEFIT
	 	 
	Benefit
	 	$12,000

INITIAL PREMIUM RATES

	 	 	 
	Premium Rate:

	 	Basic Insurance
	 

	 	Employee Rate:$0.017 per $1,000
	 
	 	 
	Mode of Premium Payment:

	 	Monthly
	 
	 	 
	Contributions:

	 	The cost of the coverage is paid by the Subscriber
	 
	 	 
	Premium Due Dates:

	 	The Policy Effective Date and the first day of each succeeding modal period

Premium rates are subject to change in accordance with the Changes in Premium Rates section
contained in the Administrative Provisions section of this Policy.

GA-00-1120.00

[Terms applicable to non-executives intentionally omitted]

5

 

GENERAL DEFINITIONS 

Please note that certain words used in this Policy have specific meanings. The words defined below
and capitalized within the text of this Policy have the meanings set forth below.

	 	 	 
	Active Service

	 	An Employee will be considered in Active Service with his
Employer on any day that is either of the following:
	 

	 	1.   one of the Employer’s scheduled work days on which the
Employee is performing his regular duties on a full-time
basis, either at one of the Employer’s usual places of
business or at some other location to which the Employer’s
business requires the Employee to travel;

	 

	 	2.   a scheduled holiday, vacation day or period of
Employer-approved paid leave of absence, other than sick
leave, only if the Employee was in Active Service on the
preceding scheduled workday.

	 
	 	 
	 

	 	A person other than an Employee is considered in Active
Service if he is not an Inpatient in a Hospital.
	 
	 	 
	Age

	 	A Covered Person’s Age, for purposes of initial premium
calculations, is his Age attained on the date coverage
becomes effective for him under this Policy. Thereafter,
it is his Age attained on his last birthday.
	 
	 	 
	Aircraft

	 	A vehicle which:
	 

	 	1.   is designed to fly above the earth’s surface; and

	 

	 	2.   is being flown by a pilot with a valid license, if
applicable to operate the Aircraft.

	 
	 	 
	Annual Compensation

	 	An Employee’s gross straight-time pay for regularly
scheduled hours for a seven-day week, excluding bonuses,
overtime, incentive compensation allowances, benefit
dollars or other types of special compensation or as
determined by the Subscriber and/or its subsidiaries.
	 
	 	 
	Covered Accident

	 	A sudden, unforeseeable, external event that results,
directly and independently of all other causes, in a
Covered Injury or Covered Loss and meets all of the
following conditions:
	 

	 	1.   occurs while the Covered Person is insured under this
Policy;

	 

	 	2.   is not contributed to by disease, Sickness, mental or
bodily infirmity;

	 

	 	3.   is not otherwise excluded under the terms of this Policy.

	 
	 	 
	Covered Injury

	 	Any bodily harm that results directly and independently of
all other causes from a Covered Accident.
	 
	 	 
	Covered Loss

	 	A loss that is all of the following:
	 

	 	1.   the result, directly and independently of all other
causes, of a Covered Accident;

	 

	 	2.   one of the Covered Losses specified in the Schedule of
Covered Losses;

	 

	 	3.   suffered by the Covered Person within the applicable
time period specified in the Schedule of Benefits.

	 
	 	 
	Covered Person

	 	An eligible person, as defined in the Schedule of Benefits,
for whom an enrollment form has been accepted by Us and
required premium has been paid when due and for whom
coverage under this Policy remains in force. The term
Covered Person shall include, where this Policy provides
coverage, an eligible Spouse or Domestic Partner.

42

 

	 	 	 
	Domestic Partner

	 	A person who is registered as the covered Employee’s
domestic partner with the California Secretary of State.
If there is no domestic partner registered with the
California Secretary of State, “Domestic Partner” means a
person who meets all of the following criteria:
	 

	 	1.   shares the covered Employee’s permanent residence;

	 

	 	2.   has resided with the covered Employee continuously for
at least six months and is expected to reside with the
covered Employee indefinitely;

	 

	 	3.   is financially interdependent with the covered Employee;

	 

	 	4.   is no less than 18 years of age;

	 

	 	5.   is not legally married to any other person;

	 

	 	6.   is not a blood relative any closer than would prohibit
legal marriage.

	 
	 	 
	 

	 	In addition to the above requirements, consent of either
party due to the Domestic Partner relationship must not
have been obtained by force, duress or fraud.
	 
	 	 
	 

	 	A covered Employee may insure a Domestic Partner if all of
the following conditions are met:
	 

	 	a.   For domestic partnerships registered with the California
Secretary of State, the Domestic Partner is the only person
meeting the Policy’s definition of “Domestic Partner” with
respect to the covered Employee.

	 

	 	b.   For domestic partnerships not registered with the
California Secretary of State:

	 

	 	i.   the covered Employee has not been married to any person
within the past 12 months;

	 

	 	ii.  the Domestic Partner is the only person meeting this
Policy’s definition of “Domestic Partner” with respect to
the covered Employee;

	 

	 	iii.  the covered Employee furnishes an affidavit or signed
statement reflecting these requirements, and an agreement
to notify Us if the requirements cease to be met, on a form
acceptable to Us.

	 
	 	 
	Employee

	 	For eligibility purposes, an Employee of the Employer who
is in one of the Covered Classes as defined by that
business unit.
	 
	 	 
	Employer

	 	The Subscriber and any affiliates, subsidiaries or
divisions shown in the Schedule of Covered Affiliates and
which are covered under this Policy on the date of issue or
subsequently agreed to by Us.
	 
	 	 
	He, His, Him

	 	Refers to any individual, male or female.
	 
	 	 
	Hospital

	 	An institution that meets all of the following:
	 

	 	1.   it is licensed as a Hospital pursuant to applicable law;

	 

	 	2.   it is primarily and continuously engaged in providing
medical care and treatment to sick and injured persons;

	 

	 	3.   it is managed under the supervision of a staff of
medical doctors;

	 

	 	4.   it provides 24-hour nursing services by or under the
supervision of a graduate registered nurse (R.N.);

	 

	 	5.   it has medical, diagnostic and treatment facilities,
with major surgical facilities on its premises, or
available on a prearranged basis;

	 

	 	6.   it charges for its services.

	 
	 	 
	 

	 	The term Hospital does not include a clinic, facility, or
unit of a Hospital for:
	 

	 	1.   rehabilitation, convalescent, custodial, educational or
nursing care;

	 

	 	2.   the aged, drug addicts or alcoholics;

	 

	 	3.   a Veteran’s Administration Hospital or Federal
Government Hospital unless the Covered Person incurs an
expense.

43

 

	 	 	 
	Hospital Stay

	 	A confinement in a Hospital, ordered by a
Physician, over a period of time when room and
board and general nursing care are provided at a
per diem charge made by the Hospital. The
Hospital Stay must result directly and
independently of all other causes from a Covered
Accident. Separate Hospital Stays due to the
same Covered Accident will be treated as one
Hospital Stay unless separated by at least 90
days.
	 
	 	 
	Inpatient

	 	A Covered Person who is confined for at least one
full day’s Hospital room and board. The
requirement that a person be charged for room and
board does not apply to confinement in a
Veteran’s Administration Hospital or Federal
Government Hospital and in such case, the term
‘Inpatient’ shall mean a Covered Person who is
required to be confined for a period of at least
a full day as determined by the Hospital.
	 
	 	 
	Nurse

	 	A licensed graduate Registered Nurse (R.N.), a
licensed practical Nurse (L.P.N.) or a licensed
vocational Nurse (L.V.N.) and who is not:
	 

	 	1.   employed or retained by the Subscriber;

	 

	 	2.   living in the Covered Person’s household; or

	 

	 	3.   a parent, sibling, spouse or Domestic Partner
or child of the Covered Person.

	 
	 	 
	Outpatient

	 	A Covered Person who receives treatment, services
and supplies while not an Inpatient in a
Hospital.
	 
	 	 
	Permanently Totally Disabled

	 	A Covered Person who is Totally Disabled and is
expected to remain Totally Disabled, as certified
by a Physician, for the rest of his life.
	 
	 	 
	Prior Plan

	 	The plan of insurance providing similar benefits,
sponsored by the Employer in effect immediately
prior to this Policy’s Effective Date.
	 
	 	 
	Physician

	 	A licensed health care provider practicing within
the scope of his license and rendering care and
treatment to a Covered Person that is appropriate
for the condition and locality and who is not:
	 

	 	1.   employed or retained by the Subscriber;

	 

	 	2.   living in the Covered Person’s household;

	 

	 	3.   a parent, sibling, spouse or Domestic Partner
or child of the Covered Person.

	 
	 	 
	Sickness

	 	A physical or mental illness.
	 
	 	 
	Spouse

	 	The Employee’s lawful spouse.
	 
	 	 
	Subscriber

	 	Any participating organization that subscribes to
the trust to which this Policy is issued.
	 
	 	 
	Totally Disabled or

	 	Totally Disabled or Total Disability means either:
	Total Disability

	 	1.   inability of the Covered Person who is
currently employed to do any type of work for
which he is or may become qualified by reason of
education, training or experience; or

	 

	 	2.   inability of the Covered Person who is not
currently employed to perform all of the
activities of daily living including eating,
transferring, dressing, toileting, bathing, and
continence, without human supervision or
assistance.

	 
	 	 
	We, Us, Our

	 	Life Insurance Company of North America.

GA-00-1200.00 (Amended by TL-007152-1.05)

44

 

ELIGIBILITY AND EFFECTIVE DATE PROVISIONS
 

Subscriber Effective Date

Accident Insurance Benefits become effective for each Subscriber in consideration of the
Subscriber’s application, Subscription Agreement and payment of the initial premium when due.
Insurance coverage for the Subscriber becomes effective on the Effective Date of Subscriber
Participation as long as the Minimum Participation Requirement shown in the Schedule of Benefits
has been satisfied.

Eligibility

An Employee becomes eligible for insurance under this Policy on the date he meets all of the
requirements of one of the Covered Classes and completes any Eligibility Waiting Period, as shown
in the Schedule of Benefits. A Spouse or Domestic Partner of an eligible Employee becomes eligible
for any dependent insurance provided by this Policy on the later of the date the Employee becomes
eligible and the date the Spouse or Domestic Partner meets the applicable definition shown in the
Definitions section of this Policy. No person may be eligible for insurance under this Policy as
both an Employee and a Spouse or Domestic Partner at the same time.

Effective Date for Individuals

Insurance becomes effective for an eligible Employee, subject to the Deferred Effective Date
provision below, on the later of the following dates:

	1.	 	the effective date of this Policy;
	 
	2.	 	the date the Employee becomes eligible.

Insurance becomes effective for an Employee’s eligible dependents, subject to the Deferred
Effective Date provision below, on the latest of the following dates:

	1.	 	the effective date of this Policy;
	 
	2.	 	the date the Employee becomes eligible;
	 
	3.	 	the date the Employee’s insurance becomes effective;
	 
	4.	 	the date the dependent meets the definition of Spouse or Domestic Partner.

DEFERRED EFFECTIVE DATE

Active Service

The effective date of insurance will be deferred for any Employee or any eligible Spouse or
Domestic Partner who is not in Active Service on the date coverage would otherwise become
effective. Coverage will become effective on the later of the date he returns to Active Service
and the date coverage would otherwise have become effective.

Effective Date of Changes

Any increase or decrease in the amount of insurance for the Covered Person resulting from:

	1.	 	a change in benefits provided by this Policy; or
	 
	2.	 	a change in the Employee’s Covered Class will take effect on the date of such change.

Increases will take effect subject to any Active Service requirement.

TERMINATION OF INSURANCE

The insurance on a Covered Person will end on the earliest date below:

	1.	 	the date this Policy ends;
	 
	2.	 	the date the insurance for the Covered Person’s Covered Class ends;
	 
	3.	 	the next premium due date after the date the Covered Person is no longer in a Covered Class;
	 
	4.	 	the last day of the last period for which premium is paid.

Termination will not affect a claim for a Covered Loss or Covered Injury that is the result,
directly and independently of all other causes, of a Covered Accident that occurs while coverage
was in effect, subject to all other terms of the Policy.

Continuation for Family, Medical, Educational or Personal Leave

Insurance for an Employee and Covered Dependents may be continued in accordance with the Employer’s
personnel policies if: (a) an Employee is on an Employer-approved Family Leave, Medical Leave,
Educational Leave or Personal Leave; and (b) required premium contributions are paid when due.

GA-00-1325.00

45

 

COMMON EXCLUSIONS
 

In addition to any benefit-specific exclusions, benefits will not be paid for any Covered Injury or
Covered Loss which, directly or indirectly, in whole or in part, is caused by or results from any
of the following unless coverage is specifically provided for by name in the Description of
Coverages and Benefits Section:

	1.	 	intentionally self-inflicted Injury, suicide or any attempt thereat while sane or insane;
	 
	2.	 	commission or attempt to commit a felony or an assault;
	 
	3.	 	declared or undeclared war or act of war;
	 
	4.	 	flight in, boarding or alighting from an Aircraft or any craft designed to fly above the
Earth’s surface, except as a passenger in an Aircraft piloted by properly qualified and
licensed pilots holding current and valid certificates of competency of a rating authorizing
them to pilot such Aircraft;
	 
	5.	 	Sickness, disease, bodily or mental infirmity, bacterial or viral infection or medical or
surgical treatment thereof (except surgical or medical treatment required by an Accident),
except for any bacterial infection resulting from an accidental external cut or wound or
accidental ingestion of contaminated food;
	 
	6.	 	voluntary ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken
under the direction of a Physician and taken in accordance with the prescribed dosage;
	 
	7.	 	a Covered Accident that occurs while engaged in the activities of active duty service in the
military, navy or air force of any country or international organization. Covered Accidents
that occur while engaged in Reserve or National Guard training are not excluded until training
extends beyond 31 days;
	 
	8.	 	operating any type of vehicle while under the influence of alcohol or any drug, narcotic or
other intoxicant including any prescribed drug for which the Covered Person has been provided
a written warning against operating a vehicle while taking it. Under the influence of
alcohol, for purposes of this exclusion, means intoxicated, as defined by the law of the state
in which the Covered Accident occurred.

GA-00-1401.00

46

 

CONVERSION PRIVILEGE
 

If the Covered Person’s insurance or any portion of it ends for any of the following reasons:

	a.	 	employment or membership ends;
	 
	b.	 	eligibility ends;

the Covered Person may have Us issue converted accident insurance on an individual policy or an
individual certificate under a designated group policy. The Covered Person may apply for an amount
of coverage that is:

	a.	 	in $1,000 increments;
	 
	b.	 	not less than $25,000, regardless of the amount of insurance under the group policy; and
	 
	c.	 	not more than the amount of insurance he had under the group policy, except as provided
above, up to a maximum amount of $250,000.

The Covered Person must be under age 70 to get a converted policy.

If the Covered Person’s insurance or any portion of it ends for non-payment of premium, he may not
convert.

The converted policy or certificate will cover accidental death and dismemberment. The policy or
certificate will not contain disability or other additional benefits. The Covered Person need not
show Us that he is insurable.

If the Covered Person has converted his group coverage and later becomes insured under the same
group plan as before, he may not convert a second time unless he provides, at his own expense,
proof of insurability or proof the prior converted policy is no longer in force.

The Covered Person must apply for the individual policy within 90 days after his coverage under
this Group Policy ends and pay the required premium, based on Our table of rates for such policies,
his Age and class of risk. If the Covered Person has assigned ownership of his group coverage, the
owner/assignee must apply for the individual policy.

If the Covered Person dies during the first 31 days of this 90-day period as the result of an
accident that would have been covered under this Group Policy, We will pay as a claim under this
Group Policy the amount of insurance that the Covered Person was entitled to convert. It does not
matter whether the Covered Person applied for the individual policy or certificate. If such policy
or certificate is issued, it will be in exchange for any other benefits under this Group Policy.

The individual policy or certificate will take effect on the day following the date coverage under
the Group Policy ended; or, if later, the date application is made.

Exclusions

The converted policy may exclude the hazards or conditions that apply to the Covered Person’s group
coverage at the time it ends. We will reduce payment under the converted policy by the amount of
any benefits paid under the group policy if both cover the same loss.

GA-00-1501.00

47

 

CLAIM PROVISIONS
 

Notice of Claim

Written or authorized electronic/telephonic notice of claim must be given to Us within 31 days
after a Covered Loss occurs or begins or as soon as reasonably possible. If written or authorized
electronic/telephonic notice is not given in that time, the claim will not be invalidated or
reduced if it is shown that written or authorized electronic/telephonic notice was given as soon as
was reasonably possible. Notice can be given to Us at Our Home Office in Philadelphia,
Pennsylvania, such other place as We may designate for the purpose, or to Our authorized agent.
Notice should include the Subscriber’s name and policy number and the Covered Person’s name,
address, policy and certificate number.

Claim Forms

We will send claim forms for filing proof of loss when We receive notice of a claim. If such forms
are not sent within 15 days after We receive notice, the proof requirements will be met by
submitting, within the time fixed in this Policy for filing proof of loss, written or authorized
electronic proof of the nature and extent of the loss for which the claim is made.

Claimant Cooperation Provision

Failure of a claimant to cooperate with Us in the administration of the claim may result in
termination of the claim. Such cooperation includes, but is not limited to, providing any
information or documents needed to determine whether benefits are payable or the actual benefit
amount due.

Proof of Loss

Written or authorized electronic proof of loss satisfactory to Us must be given to Us at Our
office, within 90 days of the loss for which claim is made. If (a) benefits are payable as
periodic payments and (b) each payment is contingent upon continuing loss, then proof of loss must
be submitted within 90 days after the termination of each period for which We are liable. If
written or authorized electronic notice is not given within that time, no claim will be invalidated
or reduced if it is shown that such notice was given as soon as reasonably possible. In any case,
written or authorized electronic proof must be given not more than two years after the time it is
otherwise required, except if proof is not given solely due to the lack of legal capacity.

Time of Payment of Claims

We will pay benefits due under this Policy for any loss other than a loss for which this Policy
provides any periodic payment immediately upon receipt of due written or authorized electronic
proof of such loss. Subject to due written or authorized electronic proof of loss, all accrued
benefits for loss for which this Policy provides periodic payment will be paid monthly unless
otherwise specified in the benefits descriptions and any balance remaining unpaid at the
termination of liability will be paid immediately upon receipt of proof satisfactory to Us.

Payment of Claims

All benefits will be paid in United States currency. Benefits for loss of life will be payable in
accordance with the Beneficiary provision and these Claim Provisions. All other proceeds payable
under this Policy, unless otherwise stated, will be payable to the covered Employee or to his
estate.

If We are to pay benefits to the estate or to a person who is incapable of giving a valid release,
We may pay $1,000 to a relative by blood or marriage whom We believe is equitably entitled. Any
payment made by Us in good faith pursuant to this provision will fully discharge Us to the extent
of such payment and release Us from all liability.

Payment of Claims to Foreign Employees

The Subscriber may, in a fiduciary capacity, receive and hold any benefits payable to covered
Employees whose place of employment is other than:

	1.	 	the United States of America;
	 
	2.	 	Puerto Rico; or
	 
	3.	 	the Dominion of Canada.

We will not be responsible for the application or disposition by the Subscriber of any such
benefits paid. Our payments to the Subscriber will constitute a full discharge of Our liability
for those payments under this Policy.

48

 

Physical Examination and Autopsy

We, at Our own expense, have the right and opportunity to examine the Covered Person when and as
often as We may reasonably require while a claim is pending and to make an autopsy in case of death
where it is not forbidden by law.

Legal Actions

No action at law or in equity may be brought to recover under this Policy less than 60 days after
written or authorized electronic proof of loss has been furnished as required by this Policy. No
such action will be brought more than three years after the time such written proof of loss must be
furnished.

Beneficiary

The beneficiary is the person or persons the Employee names or changes on a form executed by him
and satisfactory to Us. This form may be in writing or by any electronic means agreed upon between
Us and the Subscriber. Consent of the beneficiary is not required to affect any changes, unless
the beneficiary has been designated as an irrevocable beneficiary, or to make any assignment of
rights or benefits permitted by this Policy. Any Accidental Death Benefit payable at the death of
the Employee’s Spouse or Domestic Partner will be paid to the Employee or to his estate.

A beneficiary designation or change will become effective on the date the Employee executes it.
However, We will not be liable for any action taken or payment made before We record notice of the
change at our Home Office.

If more than one person is named as beneficiary, the interests of each will be equal unless the
Employee has specified otherwise. The share of any beneficiary who does not survive the Covered
Person will pass equally to any surviving beneficiaries unless otherwise specified.

If there is no named beneficiary or surviving beneficiary, or if the Employee dies while benefits
are payable to him, We may make direct payment to the first surviving class of the following
classes of persons:

	1.	 	spouse;
	 
	2.	 	estate of the Covered Person.

Recovery of Overpayment

If benefits are overpaid, We have the right to recover the amount overpaid by either of the
following methods.

	1.	 	A request for lump sum payment of the overpaid amount.
	 
	2.	 	A reduction of any amounts payable under this Policy.

If there is an overpayment due when the Covered Person dies, We may recover the overpayment from
the Covered Person’s estate.

GA-00-1600.00

49

 

ADMINISTRATIVE PROVISIONS
 

Premiums

All premium rates are expressed in, and all premiums are payable in, United States currency. The
premiums for this Policy will be based on the rates set forth in the Schedule of Benefits, the plan
and amounts of insurance in effect. If a Covered Person’s insurance amounts are reduced due to
age, premium will be based on the amounts of insurance in force on the day before the reduction
took place.

Changes in Premium Rates

We may change the premium rates from time to time with at least 31 days advance written notice to
the Subscriber. No change in rates will be made until 25 months after the Policy Effective Date.
An increase in rates will not be made more often than once in a 12-month period. However, We
reserve the right to change rates at any time if any of the following events take place:

	1.	 	the terms of this Policy change;
	 
	2.	 	the terms of the Subscriber’s participation change;
	 
	3.	 	a division, subsidiary, affiliated company or eligible class is added or deleted from this
Policy;
	 
	4.	 	there is a change in the factors bearing on the risk assumed;
	 
	5.	 	any federal or state law or regulation is amended to the extent it affects Our benefit
obligation.

Payment of Premium

The first premium is due on the Subscriber’s effective date of participation under this Policy.
Thereafter, premiums are due on the Premium Due Dates agreed upon between Us and the Subscriber.
If any premium is not paid when due, the Subscriber’s participation under this Policy will be
terminated as of the Premium Due Date on which premium was not paid.

Grace Period

A Grace Period of 60 days will be granted to each Subscriber for payment of required premiums under
this Policy. A Subscriber’s participation under this Policy will remain in effect during the Grace
Period. The Subscriber is liable to Us for any unpaid premium for the time its participation under
this Policy was in force.

GA-00-1700.00

50

 

GENERAL PROVISIONS
 

Entire Contract; Changes

This Policy, including the endorsements, amendments and any attached papers constitutes the entire
contract of insurance. No change in this Policy will be valid until approved by one of Our
executive officers and endorsed on or attached to this Policy. No agent has authority to change
this Policy or to waive any of its provisions.

Subscriber Participation Under This Policy

An organization may elect to participate under this Policy by submitting a signed Subscriber
participation agreement to the Policyholder. No participation by an organization is in effect
until approved by Us.

Misstatement of Fact

If the Covered Person has misstated any fact, all amounts payable under this Policy will be such as
the premium paid would have purchased had such fact been correctly stated.

Certificates

Where required by law, We will provide a certificate of insurance for delivery to the Covered
Person. Each certificate will list the benefits, conditions and limits of this Policy. It will
state to whom benefits will be paid.

30 Day Right To Examine Certificate

If a Covered Person does not like the Certificate for any reason, it may be returned to Us within
30 days after receipt. We will return any premium that has been paid and the Certificate will be
void as if it had never been issued.

Multiple Certificates

The Covered Person may have in force only one certificate at a time under this Policy. If at any
time the Covered Person has been issued more than one certificate, then only the largest shall be
in effect. We will refund premiums paid for the others for any period of time that more than one
certificate was issued.

Assignment

The rights and benefits under this Policy may not be assigned and any attempt to assign will be
void.

Incontestability

	1.	 	Of This Policy or Participation Under This Policy

All statements made by the Subscriber to obtain this Policy or to participate under this Policy are
considered representations and not warranties. No statement will be used to deny or reduce
benefits or be used as a defense to a claim, or to deny the validity of this Policy or of
participation under this Policy unless a copy of the instrument containing the statement is, or has
been, furnished to the Subscriber.

After two years from the Policy Effective Date, no such statement will cause this Policy to be
contested except for fraud.

	2.	 	Of A Covered Person’s Insurance

All statements made by a Covered Person are considered representations and not warranties. No
statement will be used to deny or reduce benefits or be used as a defense to a claim, unless a copy
of the instrument containing the statement is, or has been, furnished to the claimant.

After two years from the Covered Person’s effective date of insurance, or from the effective date
of increased benefits, no such statement will cause insurance or the increased benefits to be
contested except for fraud or lack of eligibility for insurance.

In the event of death or incapacity, the beneficiary or representative shall be given a copy.

Reporting Requirements

At Our request, the Subscriber or its authorized agent must report to Us the names of persons
insured under the Policy as of any specified date and any additional information required by Us.

51

 

Policy Termination

We may terminate coverage on or after the first anniversary of the policy effective date. The
Subscriber may terminate coverage on any premium due date. Written or authorized electronic notice
must be given at least 31 days prior to such premium due date.

Termination will not affect a claim for a Covered Loss that is the result, directly and
independently of all other causes, of a Covered Accident that occurs while coverage was in effect.

Reinstatement

This Policy may be reinstated if it lapsed for nonpayment of premium. Requirements for
reinstatement are written application of the Subscriber satisfactory to Us and payment of all
overdue premiums. Any premium accepted in connection with a reinstatement will be applied to a
period for which premium was not previously paid.

Clerical Error

A Covered Person’s insurance will not be affected by error or delay in keeping records of insurance
under this Policy. If such error or delay is found, We will adjust the premium fairly.

Conformity with Statutes

Any provisions in conflict with the requirements of any state or federal law that apply to this
Policy are automatically changed to satisfy the minimum requirements of such laws.

Policy Changes

We may agree with the Subscriber to modify a plan of benefits without the Covered Person’s consent.

Workers’ Compensation Insurance

This Policy is not in place of and does not affect any requirements for coverage under any Workers’
Compensation law.

Examination of the Policy

This Group Policy will be available for inspection at the Subscriber’s office during regular
business hours.

Examination of Records

We will be permitted to examine all of the Subscriber’s records relating to this Group Policy.
Examination may occur at any reasonable time while the Group Policy is in force; or it may occur:

	1.	 	at any time for two years after the expiration of this Group Policy; or, if later,
	 
	2.	 	upon the final adjustment and settlement of all Group Policy claims.

For purposes of this policy, the Subscriber acts on its own behalf and not as the Covered Person’s
agent. Under no circumstances will the Subscriber be deemed the agent of US. The actions of the
Subscriber will not be considered Our actions.

GA-00-1800.00

52

 

DESCRIPTION OF COVERAGES AND BENEFITS
 

This Description of Coverages and Benefits Section describes the Accident Coverages and Benefits
provided by this Policy. Benefit amounts, benefit periods and any applicable aggregate and benefit
maximums are shown in the Schedule of Benefits. Certain words capitalized in the text of these
descriptions have special meanings within this Policy and are defined in the General Definitions
section. Please read these and the Common Exclusions sections in order to understand all of the
terms, conditions and limitations applicable to these coverages and benefits.

ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS

	 	 	 
	Covered Loss

	 	We will pay the benefit for any one of the Covered Losses listed in the Schedule of
Benefits, if the Covered Person suffers a Covered Loss resulting directly and independently of
all other causes from a Covered Accident within the applicable time period specified in the
Schedule of Benefits.
	 
	 	 
	 

	 	If the Covered Person sustains more than one Covered Loss as a result of the
same Covered Accident, the maximum benefit that will be paid for all Covered
Losses is the Principal Sum. If the loss results in death, benefits will only
be paid under the Loss of Life benefit provision. Any Loss of Life benefit
will be reduced by any paid or payable Accidental Dismemberment benefit.
However, if such Accidental Dismemberment benefit equals or exceeds the Loss
of Life benefit, no additional benefit will be paid.

	 	 	 
	Definitions

	 	Loss of a Hand or Foot means complete Severance through or above the wrist or ankle
joint.
	 
	 	 
	 

	 	Loss of Sight means the total, permanent loss of all vision in one eye
which is irrecoverable by natural, surgical or artificial means.
	 
	 	 
	 

	 	Loss of Speech means total and permanent loss of audible communication
which is irrecoverable by natural, surgical or artificial means.
	 
	 	 
	 

	 	Loss of Hearing means total and permanent loss of ability to hear any
sound in both ears which is irrecoverable by natural, surgical or
artificial means.
	 
	 	 
	 

	 	Loss of a Thumb and Index Finger of the Same Hand means complete
Severance through or above the metacarpophalangeal joints of the same
hand (the joints between the fingers and the hand).
	 
	 	 
	 

	 	Paralysis or Paralyzed means total loss of use of a limb. A Physician
must determine the loss of use to be complete and irreversible.
	 
	 	 
	 

	 	Quadriplegia means total Paralysis of both upper and both lower limbs.
	 
	 	 
	 

	 	Hemiplegia means total Paralysis of the upper and lower limbs on one
side of the body.
	 
	 	 
	 

	 	Paraplegia means total Paralysis of both lower limbs or both upper
limbs.
	 
	 	 
	 

	 	Coma means a profound state of unconsciousness which resulted directly
and independently from all other causes from a Covered Accident, and
from which the Covered Person is not likely to be aroused through
powerful stimulation. This condition must be diagnosed and treated
regularly by a Physician. Coma does not mean any state of
unconsciousness intentionally induced during the course of treatment of
a Covered Injury unless the state of unconsciousness results from the
administration of anesthesia in preparation for surgical treatment of
that Covered Accident.

53

 

	 	 	 
	 

	 	Severance means the complete and permanent separation and dismemberment
of the part from the body.

	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions section.

GA-00-2100.00

ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES

Accidental Death and Dismemberment benefits are provided under the following coverages. Any
benefits payable under them are shown in the Schedule of Covered Losses and will not be paid in
addition to any other Accidental Death and Dismemberment benefits payable.

EXPOSURE AND DISAPPEARANCE COVERAGE

Benefits for Accidental Death and Dismemberment, as shown in the Schedule of Covered Losses, will
be payable if a Covered Person suffers a Covered Loss which results directly and independently of
all other causes from unavoidable exposure to the elements following a Covered Accident.

If the Covered Person disappears and is not found within one year from the date of the wrecking,
sinking or disappearance of the conveyance in which the Covered Person was riding in the course of
a trip which would otherwise be covered under this Policy, it will be presumed that the Covered
Person’s death resulted directly and independently of all other causes from a Covered Accident.

	Exclusions  	 	The exclusions that apply to this coverage are in the Common Exclusions Section.

GA-00-2202.00

HIJACKING AND AIR PIRACY COVERAGE

Benefits for Accidental Death and Dismemberment, as shown in the Schedule of Covered Losses, will
be payable if the Covered Person suffers a Covered Loss resulting directly and independently of all
other causes from a Covered Accident that occurs during the hijacking, air piracy, or unlawful
seizure or attempted seizure of an Aircraft.

	Exclusions  	 	The exclusions that apply to this coverage are in the Common Exclusions Section.

GA-00-2203.00

OWNED AIRCRAFT COVERAGE

Benefits for Accidental Death and Dismemberment, as shown in the Schedule of Covered Losses, will
be payable if the Covered Person suffers a Covered Loss that results directly and independently of
all other causes from a Covered Accident that occurs during travel or flight in, including getting
in or out of, any Aircraft that is owned, leased, operated or controlled by the Subscriber or any
of its subsidiaries or affiliates. A record of eligible Aircraft will be maintained by the
Subscriber and available for review by Us at any time during normal business hours. An Aircraft
substituted for an eligible Aircraft will also be eligible if it has no greater seating capacity
and the original Aircraft is withdrawn from normal use due to breakdown, repair, servicing, loss or
destruction. An Aircraft will be deemed to be “controlled” by the Subscriber if the Aircraft may
be used as the Subscriber wishes for more than 10 straight days, or more than 15 days in any year.

	Exclusions  	 	The exclusions that apply to this coverage are in the Common Exclusions Section.

GA-00-2205.00

PILOT COVERAGE

Benefits for Accidental Death and Dismemberment, as shown in the Schedule of Covered Losses, will
be payable if the Covered Person suffers a Covered Loss resulting directly and independently of all
other causes from a Covered Accident that occurs while the Covered Person is flying as a licensed
pilot or member of the crew of an Aircraft and meets all of the following requirements:

	1.	 	is flying as a pilot or member of the crew of an Aircraft for which he is qualified.
	 
	2.	 	is not giving or receiving flight instruction.

	Exclusions  	 	The exclusions that apply to this coverage are in the Common Exclusions Section.

GA-00-2206.00

54

 

WAR RISK COVERAGE

Benefits for Accidental Death and Dismemberment as shown in the Schedule of Covered Losses, will be
payable, subject to the following conditions and exclusions, if a Covered Person suffers a Covered
Loss that results directly and independently of all other causes from a Covered Accident that
occurs during war or acts of war that occur worldwide, except for countries where travel is
permitted only under licenses granted by the Office of Foreign Assets Control, unless such license
is granted, or not required, or when such travel is undertaken at the request or under the
direction of the United States Government.

The Subscriber may cancel this war risk coverage at any time by sending written notice to Us at Our
home office address. Coverage will be canceled upon receipt of notice or a date specified by the
Subscriber.

	Exclusions  	 	This benefit does not provide coverage when a Covered Loss occurs:
	 

	1.	 	in the United States and its territories and possessions;
or

	 
	2.	 	in any nation of which the Covered Person is a citizen.

	 	 	Other exclusions that apply to this coverage are in the Common Exclusions Section.

GA-00-2262.00

ADDITIONAL ACCIDENT BENEFITS

Accidental Death and Dismemberment benefits are provided under the following Additional Benefits.
Any benefits payable under them will be paid in addition to any other Accidental Death and
Dismemberment benefit payable.

BRAIN DAMAGE BENEFIT

We will pay the benefit shown in the Schedule of Benefits if a Covered Person suffers a Covered
Injury that results directly and independently of all other causes from a Covered Accident and
results in Brain Damage. The benefit will be payable if all of the following conditions are met:

	1.	 	Brain Damage begins within 60 days from the date of the Covered Accident;
	 
	2.	 	the Covered Person is hospitalized for treatment of Brain Damage at least seven days within
the first 120 days following the Covered Accident;
	 
	3.	 	Brain Damage continues for 12 consecutive months;
	 
	4.	 	a Physician determines that as a result of Brain Damage, the Covered Person is Permanently
Totally Disabled at the end of the 12 consecutive month period.

The benefit will be paid in one lump sum at the beginning of the 13th month following the date of
the Covered Accident if Brain Damage continues longer than 12 consecutive months. The amount
payable will not exceed the Accidental Death and Dismemberment Principal Sum for the Covered Person
whose Covered Accident is the basis of the claim.

	Definition  	 	 For purposes of this benefit:

Brain Damage means physical damage to the brain that results directly and
independently of all other causes from a Covered Accident and causes the
Covered Person to be Permanently Totally Disabled.

	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2217.00

FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT

We will pay the amount shown in the Schedule of Benefits, subject to the following conditions and
exclusions, when the Covered Person suffers a Covered Loss resulting directly and independently of
all other causes from a Covered Accident that occurs during a violent crime or felonious assault as
described below. A police report detailing the felonious assault or violent crime must be provided
before any benefits will be paid.

To qualify for benefit payment, the Covered Accident must occur during any of the following:

	1.	 	actual or attempted robbery or holdup;
	 
	2.	 	actual or attempted kidnapping;
	 
	3.	 	any other type of intentional assault that is a crime classified as a felony by the governing
statute or common law in the state where the felony occurred.

55

 

	Definitions  	 	For purposes of this benefit:

Family Member means the Covered Person’s parent, step-parent, Spouse or
Domestic Partner or former Spouse or Domestic Partner, son, daughter, brother,
sister, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, sister-in-law, aunt, uncle, cousins, grandparent, grandchild
and stepchild.

Fellow Employee means a person employed by the same Employer as the Covered
Person or by an Employer that is an affiliated or subsidiary corporation. It
shall also include any person who was so employed, but whose employment was
terminated not more than 45 days prior to the date on which the defined
violent crime/felonious assault was committed.

Member of the Same Household means a person who maintains residence at the
same address as the Covered Person.

	Exclusions  	 	Benefits will not be paid for treatment of any Covered Injury sustained or Covered Loss
incurred during any:

	1.	 	violent crime or felonious assault committed by the Covered Person; or
	 
	2.	 	felonious assault or violent crime committed upon
the Covered Person by a Fellow Employee, Family Member, or Member of the
Same Household.

	 	 	  Other exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2234.00

HOME ALTERATION AND VEHICLE MODIFICATION BENEFIT

We will pay the Home Alteration and Vehicle Modification Benefit shown in the Schedule of Benefits,
subject to the following conditions and exclusions, when the Covered Person suffers a Covered Loss,
other than a Loss of Life, resulting directly and independently of all other causes from a Covered
Accident.

This benefit will be payable if all of the following conditions are met:

	1.	 	prior to the date of the Covered Accident causing such Covered Loss, the Covered Person did
not require the use of any adaptive devices or adaptation of residence and/or vehicle;

	2.	 	as a direct result of such Covered Loss, the Covered Person now requires such adaptive
devices or adaptation of residence and/or vehicle to maintain an independent lifestyle;

	3.	 	the Covered Person requires home alteration or vehicle modification within one year of the
date of the Covered Accident.

	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2236.00

HOSPITAL STAY BENEFIT

We will pay the monthly benefit shown in the Schedule of Benefits, subject to the following
conditions and exclusions, if the Covered Person requires a Hospital Stay due to a Covered Loss
resulting directly and independently of all other causes from a Covered Accident.

The Hospital Stay must meet all of the following:

	1.	 	be at the direction and under the care of a Physician;
	 
	2.	 	begin within 90 days of the Covered Accident;
	 
	3.	 	begin while the Covered Person’s insurance is in effect.

The benefit will be paid for each day of a continuous Hospital Stay that continues after the end of
the Benefit Waiting Period as shown in the Schedule of Benefits. Benefits will be paid
retroactively to the first day of the Hospital Stay. If benefits are calculated on a monthly
basis, pro rata payments will be made for confinements of less than one month.

	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2237.00

56

 

REHABILITATION BENEFIT

We will pay the Rehabilitation Benefit shown in the Schedule of Benefits, subject to the following
conditions and exclusions, when the Covered Person requires Rehabilitation after sustaining a
Covered Loss resulting directly and independently of all other causes from a Covered Accident.

The Covered Person must require Rehabilitation within two years after the date of the Covered Loss.

	Definition  	 	For purposes of this benefit:

Rehabilitation means medical services, supplies, or treatment, or Hospital
confinement (or part of a Hospital confinement) that satisfies all of the
following conditions:

	1.	 	are essential for physical rehabilitation required
due to the Covered Person’s Covered Loss;
	 
	2.	 	meet generally accepted standards of medical
practice;
	 
	3.	 	are performed under the care, supervision or order
of a Physician;
	 
	4.	 	prepare the Covered Person to return to his or any
other occupation.

	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2248.00

SEATBELT AND AIRBAG BENEFIT

We will pay the benefit shown in the Schedule of Benefits, subject to the conditions and exclusions
described below, when the Covered Person dies directly and independently of all other causes from a
Covered Accident while wearing a seatbelt and operating or riding as a passenger in an Automobile.
An additional benefit is provided if the Covered Person was also positioned in a seat protected by
a properly-functioning and properly deployed Supplemental Restraint System (Airbag).

Verification of proper use of the seatbelt at the time of the Covered Accident and that the
Supplemental Restraint System properly inflated upon impact must be a part of an official police
report of the Covered Accident or be certified, in writing, by the investigating officer(s) and
submitted with the Covered Person’s claim to Us.

	Definitions  	 	For purposes of this benefit:
	 
	 	 	Supplemental Restraint System means an airbag that inflates upon impact for added
protection to the head and chest areas.
	 
	 	 	Automobile means a self-propelled, private passenger motor vehicle with four or more
wheels which is a type both designed and required to be licensed for use on the
highway of any state or country. Automobile includes, but is not limited to, a
sedan, station wagon, sport utility vehicle, or a motor vehicle of the pickup, van,
camper, or motor-home type. Automobile does not include a mobile home or any motor
vehicle which is used in mass or public transit.
	 
	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2251.00

SPOUSE OR DOMESTIC PARTNER SURVIVOR BENEFIT

We will pay the Spouse or Domestic Partner Survivor Benefit shown in the Schedule of Benefits,
subject to the conditions and exclusions described below, if the covered Employee’s death results
directly and independently of all other causes from a Covered Accident.

The Spouse or Domestic Partner will receive a lump sum benefit, specified in the Schedule of
Benefits.

	Exclusions  	 	The exclusions that apply to this benefit are in the Common Exclusions Section.

GA-00-2286.00

57

 

LIFE INSURANCE COMPANY OF NORTH AMERICA

Philadelphia, PA 19192-2235

We, Northrop Grumman Corporation, whose main office address is Los Angeles, CA, hereby approve and
accept the terms of Group Policy Number OK 980036 issued by the LIFE INSURANCE COMPANY OF NORTH
AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE MANUFACTURING INDUSTRY.

This form is to be signed in duplicate. One part is to be retained by Northrop Grumman
Corporation; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA.

Northrop Grumman Corporation

	 	 	 	 	 	 	 
	Signature and Title:

	 	 
	 	Date:
	 	 

(This Copy Is To Be Returned To Life Insurance Company of North America)

 

LIFE INSURANCE COMPANY OF NORTH AMERICA

Philadelphia, PA 19192-2235

We, Northrop Grumman Corporation, whose main office address is Los Angeles, CA, hereby approve and
accept the terms of Group Policy Number OK 980036 issued by the LIFE INSURANCE COMPANY OF NORTH
AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE MANUFACTURING INDUSTRY.

This form is to be signed in duplicate. One part is to be retained by Northrop Grumman
Corporation; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA.

Northrop Grumman Corporation

 
	 	 	 	 	 	 	 
	Signature and Title:

	 	/s/ D. Catsavas
	 	Date:
	 	1-6-2009

(This Copy Is To Be Retained By Northrop Grumman Corporation)

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