Document:

exv10w24

 

Exhibit 10.24

INDEMNIFICATION AGREEMENT

     THIS AGREEMENT is effective April 23, 2007, between Concho Resources Inc., a Delaware
corporation (the “Corporation”), and the undersigned director or officer of the Corporation
(“Indemnitee”).

     WHEREAS, the Certificate of Incorporation of the Corporation (as the same may be amended from
time to time, the “Certificate of Incorporation”) provides for indemnification of the Corporation’s
directors and officers; and

     WHEREAS, the Corporation has adopted Bylaws (as the same may be amended from time to time, the
“Bylaws”) providing for indemnification of the Corporation’s directors and officers; and

     WHEREAS, the Bylaws and the Delaware General Corporation Law (the “DGCL”) contemplate that
contracts and insurance policies may be entered into with respect to indemnification of directors
and officers; and

     WHEREAS, there are questions concerning the adequacy and reliability of the protection which
might be afforded to directors and officers from acquisition of policies of Directors and Officers
Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred by
directors and officers in the performance of their services to the Corporation; and

     WHEREAS, it is reasonable, prudent and necessary for the Corporation to obligate itself
contractually to indemnify Indemnitee so that he will serve or continue to serve the Corporation
free from undue concern that he will not be adequately protected;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:

     1. Definitions.

     As used in this Agreement:

     (a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
claim, inquiry or proceeding, whether brought by or in the right of the Corporation or otherwise
and whether of a civil, criminal, administrative, arbitrative or investigative nature, in which
Indemnitee is or is reasonably expected to be involved as a party, as a witness or otherwise, by
reason of the fact that Indemnitee is or was a director or officer of the Corporation, by reason of
any action taken by him or of any inaction on his part while acting as a director or officer of the
Corporation or by reason of the fact that he is or was serving at the request of the Corporation as
a director, officer, trustee, employee or agent of another corporation, partnership, joint venture,
trust, limited liability company or other enterprise; in each case whether or not he is acting or
serving in any such capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement; provided that any such
action, suit, claim, inquiry or proceeding which is brought by Indemnitee against the Corporation
or directors or officers of the Corporation, other than an action brought by Indemnitee to enforce
his rights under this Agreement, shall not be deemed a Proceeding without prior approval by a
majority of the Board of Directors of the Corporation.

 

 

     (b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties
against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a
Proceeding pursuant to this Agreement; and all attorneys’ fees and disbursements, accountants’
fees, private investigation fees and disbursements, retainers, court costs, transcript costs, fees
of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements, or
expenses, reasonably incurred by or for Indemnitee in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a witness in a Proceeding
or establishing Indemnitee’s right of entitlement to indemnification for any of the foregoing.

     (c) References to Indemnitee’s being or acting as “a director or officer of the Corporation”
or “serving at the request of the Corporation as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust, limited liability company or other
enterprise” shall include in each case service to or actions taken while a director, officer,
trustee, employee or agent of any subsidiary of the Corporation or while serving as a member of a
committee of the Board of Directors of the Corporation.

     (d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Corporation” shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves services by, such
director, officer, trustee, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably
believed to be in the interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” as
referred to in this Agreement.

     (e) The term “substantiating documentation” shall mean copies of bills or invoices for costs
incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement
agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of “Expenses” herein.

     (f) The terms “he” and “his” have been used for convenience and mean “she” and “her” if
Indemnitee is a female.

     2. Indemnity of Director or Officer. The Corporation hereby agrees to hold harmless and indemnify Indemnitee against Expenses to
the fullest extent authorized or permitted by law (including the applicable provisions of the
DGCL). The phrase “to the fullest extent permitted by law” shall include, but not be limited to
(a) to the fullest extent permitted by any provision of the DGCL that authorizes or permits
additional indemnification by agreement, or the corresponding provision of any amendment to or
replacement of the DGCL and (b) to the fullest extent authorized or permitted by any amendments to
or replacements of the DGCL adopted after the date of this Agreement that increase the extent to
which a corporation may indemnify its officers and directors. Any amendment, alteration or repeal
of the DGCL that adversely affects any right of Indemnitee shall be prospective only and shall not
limit or eliminate any such right with respect to any Proceeding involving any occurrence or
alleged occurrence of any action or omission to act that took place prior to such amendment or
repeal.

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     3. Additional Indemnity.

     The Corporation hereby further agrees to hold harmless and indemnify Indemnitee against
Expenses incurred by reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation as a director,
officer, trustee, employee or agent of another corporation, partnership, joint venture, trust,
limited liability company or other enterprise, but only if Indemnitee acted in good faith and, in
the case of conduct in his official capacity, in a manner he reasonably believed to be in the best
interests of the Corporation and, in all other cases, not opposed to the best interests of the
Corporation. Additionally, in the case of a criminal proceeding, Indemnitee must have had no
reasonable cause to believe that his conduct was unlawful. The termination of any Proceeding by
judgment, order of the court, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best interest of the
Corporation, and with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.

     4. Contribution. If the indemnification provided under Section 2 or Section 3 is unavailable by reason of a
court decision finding that Indemnitee is not eligible to receive indemnification for Expenses
incurred by Indemnitee under this Agreement, based on grounds other than any of those set forth in
Section 15, then, in respect of any Proceeding in which the Corporation is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Corporation shall contribute to the
amount of Expenses actually and reasonably incurred and paid or payable by Indemnitee in such
proportion as is appropriate to reflect (i) the relative benefits received by the Corporation on
one hand and Indemnitee on the other from the transaction from which such Proceeding arose and (ii)
the relative fault of the Corporation on the one hand and of Indemnitee on the other in connection
with the events that resulted in such Expenses as well as any other relevant equitable
considerations. The relative fault of the Corporation on the one hand and of Indemnitee on the
other shall be determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the circumstances resulting
in such Expenses. The Corporation agrees that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or any other method of allocation
that does not take into account of the foregoing equitable considerations.

     5. Choice of Counsel. Each Indemnitee that is an Outside Director, Chase Director or Other Indemnitee, together with
the other Indemnitees who are designated in the same group, shall be entitled to employ, and be
reimbursed for the fees and disbursements of, separate counsel to represent the Outside Directors,
the Chase Directors or the Other Indemnitees, as the case may be, in connection with any
Proceeding. For purposes of this Agreement, an Indemnitee shall be designated as (i) an “Outside
Director” if such Indemnitee is a director and not an officer of the Corporation and is not a Chase
Director, (ii) a “Chase Director” if such Indemnitee is G. Carl Everett, Larry V. Kalas, John A.
Knorr, Bradley D. Bartek or Robert C. Chase, and (iii) an “Other Indemnitee” if such Indemnitee is
not an Outside Director or a Chase Director. The principal counsel for Outside Directors (“Outside
Director Counsel”) shall be determined by

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majority vote of the Outside Directors, the principal
counsel for Chase Directors (“Chase Counsel”) shall be determined by majority vote of the Chase
Directors, and the Principal Counsel for the Other Indemnitees (“Other Indemnitee Counsel”) shall
be determined by majority vote of the Other Indemnitees, in each case subject to the consent of the
Corporation (not to be unreasonably withheld or delayed). The obligation of the Corporation to
reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the
fees and disbursements of any counsel employed by Indemnitee other than Outside Director Counsel,
Chase Counsel or Other Indemnitee Counsel, as the case may be, unless Indemnitee has interests that
are different from those of the other Indemnitees or defenses available to him that are in addition
to or different from those of the other Indemnitees such that Outside Director Counsel, Chase
Counsel or Other Indemnitee Counsel, as the case may be, would have an actual, apparent or
potential conflict of interest in representing Indemnitee.

     6. Advances of Expenses. Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee shall
be paid by the Corporation, in advance of the final disposition of the Proceeding, within 20
calendar days after receipt of Indemnitee’s written request accompanied by substantiating
documentation and Indemnitee’s written affirmation that he has met the standard of conduct for
indemnification and a written undertaking to repay such amount to the extent it is ultimately
determined that indemnitee is not entitled to indemnification. No objections based on or involving
the question whether such charges meet the definition of “Expenses,” including any question
regarding the reasonableness of such Expenses, shall be grounds for failure to advance such amount
to Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 20-day period,
and the undertaking of Indemnitee set forth in Section 8 hereof to repay any such amount to the
extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be
deemed to include an undertaking to repay any such amounts determined not to have met such
definition.

     7. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any indemnification under this Agreement, other than advances pursuant to Section 6 hereof,
shall be made no later than 60 days after receipt by the Corporation of the written request of
Indemnitee, accompanied by substantiating documentation, unless a determination is made within said
60-day period by (a) the Board of Directors by a majority vote of a quorum consisting of directors
who are not or were not parties to such Proceeding, (b) a committee of the
Board of Directors designated by majority vote of the Board of Directors, even though less than a
quorum, (c) if there are no such directors, or if such directors so direct, independent legal
counsel in a written opinion or (d) the stockholders, that Indemnitee has not met the relevant
standards for indemnification set forth in Section 3 hereof.

     The right to indemnification or advances as provided by this Agreement shall be enforceable by
Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is
not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, any committee thereof, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standards of conduct, nor an actual
determination by the Corporation (including its Board of Directors, any committee thereof,
independent legal counsel or its stockholders) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.

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     8. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Corporation (a) any advances of Expenses pursuant
to Section 6 hereof and (b) any judgments, penalties, fines and settlements paid to or on behalf of
Indemnitee hereunder, in each case to the extent that it is ultimately determined that Indemnitee
is not entitled to indemnification. As a condition to the advancement of such Expenses or the
payment of such judgments, penalties, fines and settlements, Indemnitee shall, at the request of
the Corporation, execute an acknowledgment that such Expenses or such judgments, penalties, fines
and settlements, as the case may be, are delivered pursuant and are subject to the provisions of
this Agreement.

     9. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the Certificate of
Incorporation, the Bylaws, the DGCL, any D&O Insurance, any agreement, or otherwise, both as to
action in his official capacity and as to action in another capacity while holding such office of
the Corporation; provided, however, that this Agreement supersedes all prior written
indemnification agreements between the Corporation (or any predecessor thereof) and Indemnitee with
respect to the subject matter hereof. However, Indemnitee shall reimburse the Corporation for
amounts paid to him pursuant to such other rights to the extent such payments duplicate any
payments received pursuant to this Agreement.

     10. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the
period Indemnitee is a director or officer of the Corporation (or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, limited liability company or other enterprise) and shall continue thereafter
so long as Indemnitee shall be subject to any possible Proceeding (notwithstanding the fact that
Indemnitee has ceased to serve the Corporation).

     11. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Corporation for a portion of Expenses, but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.

     12. Settlement of Claims. The Corporation shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without the Corporation’s prior written
consent. The Corporation shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee’s prior written consent. Neither the
Corporation nor Indemnitee will unreasonably withhold or delay their consent to any proposed
settlement. The Corporation shall not be liable to indemnify Indemnitee under this Agreement with
regard to any judicial award if the Corporation was not given a reasonable and timely opportunity,
at its expense, to participate in the defense of such action.

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     13. Acknowledgements.

     (a) Corporation Acknowledgement. The Corporation expressly confirms and agrees that
it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in
order to induce Indemnitee to serve or to continue to serve as a director or officer of the
Corporation, and acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve
or in continuing to serve as a director or officer of the Corporation.

     (b) Mutual Acknowledgment. Both the Corporation and Indemnitee acknowledge that in
certain instances, Federal law or public policy may override applicable state law and prohibit the
Corporation from indemnifying its directors and officers under this Agreement or otherwise. For
example, the Corporation and Indemnitee acknowledge that the Securities and Exchange Commission
(the “SEC”) has taken the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and federal legislation prohibits indemnification for
certain ERISA violations. Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the Corporation’s right
under public policy to indemnify Indemnitee.

     14. Enforcement. In the event Indemnitee is required to bring any action or other proceeding to enforce rights
or to collect moneys due under this Agreement and is successful in such action, the Corporation
shall reimburse Indemnitee for all of Indemnitee’s Expenses in bringing and pursuing such action.

     15. Exceptions. Any other provision herein to the contrary notwithstanding, the Corporation shall not be
obligated pursuant to the terms of this Agreement:

     (a) No Entitlement to Indemnification. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that Indemnitee was not
entitled to indemnification hereunder;

     (b) Insured Claims. To indemnify Indemnitee for Expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) to the extent such Expenses or liabilities have been paid directly to
Indemnitee by an insurance carrier under a D&O Insurance policy maintained by the Corporation;

     (c) Remuneration in Violation of Law. To indemnify Indemnitee in respect of
remuneration paid to Indemnitee if it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;

     (d) Indemnification Unlawful. To indemnify Indemnitee if a final decision by a court
having jurisdiction in the matter shall determine that such indemnification is not lawful;

     (e) Misconduct, Etc. To indemnify Indemnitee on account of Indemnitee’s conduct which
is finally adjudged to have been knowingly fraudulent or deliberately dishonest or to constitute
intentional misconduct, a knowing violation of law, a violation of Section 174 of the DGCL or a
transaction from which Indemnitee derived an improper personal benefit;

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     (f) Breach of Duty. To indemnify Indemnitee on account of Indemnitee’s conduct which
is the subject of any Proceeding brought by the Corporation and approved by a majority of the Board
of Directors which alleges willful misappropriation of corporate assets by Indemnitee, disclosure
of confidential information in violation of Indemnitee’s fiduciary or contractual obligations to
the Corporation, or any other willful and deliberate breach in bad faith of Indemnitee’s duty to
the Corporation or its stockholders; or

     (g) Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment
of profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

     16. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable (a)
the validity, legality and enforceability of the remaining provisions of this Agreement shall not
be in any way affected or impaired thereby, and (b) to the fullest extent possible, the provisions
of this Agreement shall be construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable. Each section of this Agreement is a separate and
independent portion of this Agreement. If the indemnification to which Indemnitee is entitled with
respect to any aspect of any claim varies between two or more sections of this Agreement, that
section providing the most comprehensive indemnification shall apply.

     17. Miscellaneous.

     (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Delaware, without giving effect to principles of conflict
of law.

     (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

     (c) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

     (d) Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given (i) when delivered personally to the recipient, (ii) when sent to the recipient by
telecopy (receipt electronically confirmed by sender’s telecopy machine) if during normal

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business
hours of the recipient, otherwise on the next business day, (iii) one business day after the date
when sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) five
business days after the date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other communications shall be
sent to the parties at the addresses indicated on the signature page hereto, or to such other
address as any party hereto may, from time to time, designate in writing delivered pursuant to the
terms of this Section 17(d).

     (e) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

     (f) Successors and Assigns. This Agreement shall be binding upon the Corporation and
its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs,
legal representatives and assigns.

     (g) Subrogation. In the event of payment under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all documents required and shall do all acts that may be necessary to secure such
rights and to enable the Corporation to effectively bring suit to enforce such rights.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 
	 	CONCHO RESOURCES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 	 	 
	 

	 	Address:
	 	550 West Texas Avenue	 	 
	 

	 	 	 	Suite 1300	 	 
	 

	 	 	 	Midland, Texas 79701	 	 
	 

	 	 	 	Facsimile: (432) 683-7441	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE:
	 
	 	 	 	 	 	 
	 	 	 

[Name]
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	 

 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Facsimile: (     )      -          	 	 

9exv10w2xiy

 

Exhibit 10(2)(i)

NORTHROP GRUMMAN CORPORATION

TERMS AND CONDITIONS APPLICABLE TO

2007 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 2007. If you were
granted an RPSR award by the Company in 2007, 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 2007 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, 2007 to December 31, 2009 (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 and any related Dividend Equivalents (as defined below) will be paid as provided
below. No fractional shares will be issued.

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

     1.2 Minimum Vesting. The Earnout Percentage determined under Section 1.1 shall not be less
than thirty (30) percent; provided, however, that such minimum Earnout Percentage shall not apply
if, as of the 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).

     1.4 Dividend Equivalents. At the conclusion of the Performance Period, the Grantee shall be
entitled to payment for Dividend Equivalents (if any) with respect to the Earned RPSRs (if any).
For purposes of these Terms, “Dividend Equivalents” means the aggregate amount of dividends paid by
the Company on a number of shares of Common Stock equivalent to the number of

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Earned RPSRs during the period from the beginning of the Performance Period until the date the
Earned RPSRs are paid (without interest or other adjustments to reflect the time value of money,
but subject to adjustment pursuant to Section 5.1). For these purposes, any Earned RPSRs in excess
of the target number of RPSRs subject to the award shall be considered to have been granted at the
beginning of the Performance Period.

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

2.  Early Termination of Award; Termination of Employment.

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

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

     Death or Disability. In the case of death or Disability (a) the Performance Period used to
calculate the Grantee’s Earned RPSRs will be deemed to have ended as of the most recent date that
performance has been measured by the Company with respect to the RPSRs (but in no event shall such
date be more than one year before the Grantee’s termination of employment), (b) the Earnout
Percentage of the Grantee’s RPSRs will be determined based on actual performance for that short
Performance Period, and (c) payment of Earned RPSRs (and Dividend Equivalents thereon) will 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 paragraph, in the case of Retirement, (a) the
number of Earned RPSRs subject to prorating shall be calculated based on the entire Performance
Period in accordance with Section 1 above as if the Grantee had not terminated employment, and (b)
payment of Earned RPSRs (and Dividend Equivalents thereon) will be made at the same time as payment
for Earned RPSRs generally with respect to the Performance Period. The Earnout Percentage shall be
determined after giving effect to Section 1.2, if applicable.

     Retirement With Certificate of Divestiture. In the case of Retirement where the Grantee
accepts a position in the federal government and a certificate of divestiture (as defined under
Code section 1043(b)(2)) is issued which applies to the award or an accelerated distribution under
the award is otherwise permitted under Code Section 409A based on such federal government
employment (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 (and Dividend Equivalents thereon) will be made in the calendar year containing the
75th day following the Grantee’s date of Retirement (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.

     2.3 Other Terminations of Employment. Subject to Section 5.2, all RPSRs subject to the award
and related Dividend Equivalents terminate immediately upon a termination of the Grantee’s
employment: (a) for any reason other than due to the Grantee’s Retirement, death or Disability; or
(b) for Retirement, death or

2

 

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.

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

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

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

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

     2.9 Effect of Code Section 409A. Notwithstanding anything else contained herein to the
contrary, if an RPSR and related Dividend Equivalents are to be paid upon a Grantee’s separation
from service, and the Grantee is a “specified employee” within the meaning of Code Section
409A(a)(2)(B)(i), payment shall be made in the seventh month after the Grantee’s separation from
service.

3.  Non-Transferability and Other Restrictions.

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

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

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

3

 

in such form for the benefit of the Grantee), if such shares become deliverable.

5.  Adjustments; Change in Control.

     5.1 Adjustments. The RPSRs, Dividend Equivalents, related performance criteria, and the
shares subject to the award are subject to adjustment upon the occurrence of events such as stock
splits, stock dividends and other changes in capitalization in accordance with Section 6(a) of the
Plan. In the event of any adjustment, the Company will give the Grantee written notice thereof
which will set forth the nature of the adjustment.

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

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

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

In the event the Grantee is entitled to a prorated payment in accordance with the foregoing
provisions of this Section 5.2, then the Grantee will be eligible for a prorated portion of the
RPSRs (and related Dividend Equivalents) determined in accordance with the following formula: (a)
the Earnout Percentage determined in accordance with Section 1 but calculated based on performance
for the portion of the three-year Performance Period ending on the last day of the month coinciding
with or immediately preceding the date of the termination of the Grantee’s employment, multiplied
by (b) the target number of RPSRs subject to the award, multiplied by (c) a fraction the numerator
of which is the total number of full months that the Grantee was an employee of the Company or a
subsidiary on and after the beginning of the Performance Period and through the date of the
termination of the Grantee’s employment (but not in excess of 36 months) and the denominator of
which is 36. Accumulated Dividend Equivalents through the date of the termination shall be paid to
the Grantee with respect to the Grantee’s RPSRs which are paid. Payment will be made in the
calendar year containing the 60th day after the later of the Change in Control of the Company or
the Grantee’s separation from service (and generally will be paid on or about such 60th
day); provided, however, if such later event is not a permissible distribution event under Code
Section 409A(a)(2)(A), payment shall be made at the same time payment would have otherwise been
made had such Change in Control not occurred.

     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

4

 

realize the benefits intended to be conveyed with respect to the shares underlying the award;
provided, however, that, the Committee may reinstate the original terms of the award if the related
event does not actually occur.

     In the event the Grantee is entitled to a prorated payment in accordance with the foregoing
provisions of this Section 5.3, then the Grantee will, be eligible for a prorated portion of the
RPSRs (and related Dividend Equivalents) determined in accordance with the following formula: (a)
the Earnout Percentage determined in accordance with Section 1 but calculated based on performance
for the portion of the three-year Performance Period ending on the date of the Change in Control of
the Company, multiplied by (b) the target number of RPSRs subject to the award, multiplied by (c) a
fraction the numerator of which is the total number of full months that the Grantee was an employee
of the Company or a subsidiary on and after the beginning of the Performance Period and before the
occurrence of the Change in Control (but not in excess of 36 months) and the denominator of which
is 36. Accumulated Dividend Equivalents through the date of the Change in Control shall be paid to
the Grantee with respect to the Grantee’s RPSRs which are paid. Payment will be made in the
calendar year containing the 60th day after the Change in Control (and generally will be paid on or
about such 60th day); provided, however, if the Change in Control is not a permissible
distribution event under Code Section 409A(a)(2)(A), payment shall be made at the same time payment
would have otherwise been made had such Change in Control not occurred.

6.  Tax Matters.

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

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

     6.3 Compliance with Code Section 409A. To the extent an RPSR award is subject to Code Section
409A, the Committee shall administer and construe the award in a manner designed to avoid adverse
tax consequences under Section 409A.

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

7.  Committee Authority.

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

8.  Plan; Amendment.

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

9.  Definitions.

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

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

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

	 	(i)	 	The Grantee’s conviction for committing an act of fraud, embezzlement, theft, or other act

5

 

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

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

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

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

     “Committee” means the Company’s Compensation and Management Development Committee or any
successor committee appointed by the Board to administer the Plan.

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

     “Disability” means, 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

6

 

	 	 	 	compensation plans (excluding stock-based incentive compensation plans), employee benefit or
retirement plans, or policies, practices, or arrangements in which the Grantee participates
immediately prior to the start of the Protected Period provided; however, that a reduction in
the aggregate value shall not be deemed to be “Good Reason” if the reduced value remains
substantially consistent with the average level of other employees who have positions
commensurate with the position held by the Grantee immediately prior to the start of the
Protected Period.
	 
	 	(iv)	 	A material reduction in the Grantee’s aggregate level of participation in the Company’s
stock-based incentive compensation plans from the level in effect immediately prior to the
start of the Protected Period; provided, however, that a reduction in the aggregate level of
participation shall not be deemed to be “Good Reason” if the reduced level of participation
remains substantially consistent with the average level of participation of other employees
who have positions commensurate with the position held by the Grantee immediately prior to
the start of the Protected Period.
	 
	 	(v)	 	The Grantee is informed by the Company that his or her principal place of employment for
the Company will be relocated to a location that is greater than fifty (50) miles away from
the Grantee’s principal place of employment for the Company at the start of the
corresponding Protected Period; provided that, if the Company communicates an intended
effective date for such relocation, in no event shall Good Reason exist pursuant to this
clause (v) more than ninety (90) days before such intended effective date.

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

     “Parent” is used as defined in the Plan.

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

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

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

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

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

7

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