Document:

EX-10.(x)

Exhibit 10(x)

NORTHROP GRUMMAN

SAVINGS EXCESS PLAN

(Amended and Restated Effective as of January 1, 2011)

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	1.1     Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II PARTICIPATION
	 	 	6	 
	2.1     In General
	 	 	6	 
	2.2     Disputes as to Employment Status
	 	 	6	 
	 
	 	 	 	 
	ARTICLE III DEFERRAL ELECTIONS
	 	 	7	 
	3.1     Elections to Defer Eligible Compensation
	 	 	7	 
	3.2     Contribution Amounts
	 	 	7	 
	3.3     Crediting of Deferrals
	 	 	8	 
	3.4     Maximum Contributions
	 	 	8	 
	3.5     Investment Elections
	 	 	8	 
	3.6     Investment Return Not Guaranteed
	 	 	9	 
	 
	 	 	 	 
	ARTICLE IV ACCOUNTS
	 	 	10	 
	4.1     Accounts
	 	 	10	 
	4.2     Valuation of Accounts
	 	 	10	 
	4.3     Use of a Trust
	 	 	10	 
	 
	 	 	 	 
	ARTICLE V VESTING AND FORFEITURES
	 	 	11	 
	5.1     In General
	 	 	11	 
	5.2     Exceptions
	 	 	11	 
	 
	 	 	 	 
	ARTICLE VI DISTRIBUTIONS
	 	 	12	 
	6.1     Distribution Rules for Non-RAC Amounts
	 	 	12	 
	6.2     Distribution Rules for RAC Subaccount
	 	 	13	 
	6.3     Effect of Taxation
	 	 	13	 
	6.4     Permitted Delays
	 	 	13	 
	6.5     Payments Not Received At Death
	 	 	13	 
	6.6     Inability to Locate Participant
	 	 	13	 
	6.7     Committee Rules
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VII ADMINISTRATION
	 	 	15	 
	7.1     Committees
	 	 	15	 
	7.2     Committee Action
	 	 	15	 
	7.3     Powers and Duties of the Administrative Committee
	 	 	16	 
	7.4     Powers and Duties of the Investment Committee
	 	 	16	 
	7.5     Construction and Interpretation
	 	 	17	 
	7.6     Information
	 	 	17	 
	7.7     Committee Compensation, Expenses and Indemnity
	 	 	17	 
	7.8     Disputes
	 	 	17	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	18	 
	8.1     Unsecured General Creditor
	 	 	18	 
	8.2     Restriction Against Assignment
	 	 	18	 

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	8.3     Restriction Against Double Payment
	 	 	19	 
	8.4     Withholding
	 	 	19	 
	8.5     Amendment, Modification, Suspension or Termination
	 	 	19	 
	8.6     Governing Law
	 	 	20	 
	8.7     Receipt and Release
	 	 	20	 
	8.8     Payments on Behalf of Persons Under Incapacity
	 	 	20	 
	8.9     Limitation of Rights and Employment Relationship
	 	 	20	 
	8.10   Headings
	 	 	20	 
	 
	 	 	 	 
	APPENDIX A — 2005 TRANSITION RELIEF
	 	 	1	 
	A.1     Cash-Out
	 	 	1	 
	A.2     Elections
	 	 	1	 
	A.3     Key Employees
	 	 	1	 
	 
	 	 	 	 
	APPENDIX B — DISTRIBUTION RULES FOR PRE-2005 AMOUNTS
	 	 	1	 
	B.1     Distribution of Contributions
	 	 	1	 
	 
	 	 	 	 
	APPENDIX C — MERGED PLANS
	 	 	1	 
	C.1     Plan Mergers
	 	 	1	 
	C.2     Merged Plans — General Rule
	 	 	1	 

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INTRODUCTION

          The Northrop Grumman Savings Excess Plan (the “Plan”) was previously amended and restated
effective as of January 1, 2009. This restatement, effective January 1, 2011, amends the January 1,
2009 version of the Plan and includes changes that apply to amounts earned and vested under the
Plan prior to 2005.

          Northrop Grumman Corporation (the “Company”) established this Plan for participants in the
Northrop Grumman Savings Plan who exceed the limits under sections 401(a)(17) or 415(c) of the
Internal Revenue Code. This Plan is intended (1) to comply with section 409A of the Internal
Revenue Code, as amended (the “Code”) and official guidance issued thereunder (except with respect
to amounts covered by Appendix B), and (2) to be “a plan which is unfunded and is maintained by an
employer primarily for the purpose of providing deferred compensation for a select group of
management or highly compensated employees” within the meaning of sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974. Notwithstanding any other
provision of this Plan, this Plan shall be interpreted, operated and administered in a manner
consistent with these intentions.

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ARTICLE I

DEFINITIONS

	 	1.1	 	 Definitions

          Whenever the following words and phrases are used in this Plan, with the first letter
capitalized, they shall have the meanings specified below.

          (a) “Account” shall mean the recordkeeping account set up for each Participant to keep track
of amounts to his or her credit.

          (b) “Administrative Committee” means the committee in charge of Plan administration, as
described in Article VII.

          (c) “Affiliated Companies” shall mean the Company and any entity affiliated with the Company
under Code sections 414(b) or (c).

          (d) “Base Salary” shall mean a Participant’s annual base salary, excluding bonuses,
commissions, incentive and all other remuneration for services rendered to the Affiliated Companies
and prior to reduction for any salary contributions to a plan established pursuant to section 125
of the Code or qualified pursuant to section 401(k) of the Code.

          (e) “Basic Contributions” shall have the same meaning as that term is defined in the NGSP.

          (f) “Beneficiary” or “Beneficiaries” shall mean the person or persons, including a trustee,
personal representative or other fiduciary, last designated in writing by a Participant in
accordance with procedures established by the Administrative Committee to receive the benefits
specified hereunder in the event of the Participant’s death.

               (1) No Beneficiary designation shall become effective until it is filed with the
Administrative Committee.

               (2) Any designation shall be revocable at any time through a written instrument filed by the
Participant with the Administrative Committee with or without the consent of the previous
Beneficiary.

                    No designation of a Beneficiary other than the Participant’s spouse shall be valid unless
consented to in writing by such spouse. If there is no such designation or if there is no surviving
designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary. If there
is no surviving spouse to receive any benefits payable in accordance with the preceding sentence,
the duly appointed and currently acting personal representative of the Participant’s estate (which
shall include either the Participant’s probate estate or living trust) shall be the Beneficiary. In
any case where there is no such personal representative of the Participant’s estate duly appointed
and acting in that capacity within 90 days after the Participant’s death (or such extended period
as the Administrative Committee determines is reasonably necessary to allow such personal
representative to be appointed, but not to exceed 180 days after the

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Participant’s death), then Beneficiary shall mean the person or persons who can verify by
affidavit or court order to the satisfaction of the Administrative Committee that they are legally
entitled to receive the benefits specified hereunder. Any payment made pursuant to such
determination shall constitute a full release and discharge of the Plan, the Administrative
Committee and the Company. Effective January 1, 2007, a Participant will automatically revoke a
designation of a spouse as primary beneficiary upon the dissolution of their marriage.

               (3) In the event any amount is payable under the Plan to a minor, payment shall not be made to
the minor, but instead be paid (a) to that person’s living parent(s) to act as custodian, (b) if
that person’s parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (c) if no parent of that person is then living, to a custodian selected by the
Administrative Committee to hold the funds for the minor under the Uniform Transfers or Gifts to
Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the
Administrative Committee decides not to select another custodian to hold the funds for the minor,
then payment shall be made to the duly appointed and currently acting guardian of the estate for
the minor or, if no guardian of the estate for the minor is duly appointed and currently acting
within 60 days after the date the amount becomes payable, payment shall be deposited with the court
having jurisdiction over the estate of the minor. Any payment made pursuant to such determination
shall constitute a full release and discharge of the Plan, the Administrative Committee and the
Company.

               (4) Payment by the Affiliated Companies pursuant to any unrevoked Beneficiary designation, or
to the Participant’s estate if no such designation exists, of all benefits owed hereunder shall
terminate any and all liability of the Affiliated Companies.

          (g) “Board” shall mean the Board of Directors of the Company.

          (h) “Bonuses” shall mean the bonuses earned under the Company’s formal incentive plans as
defined by the Administrative Committee.

          (i) “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (j) “Committees” shall mean the Committees appointed as provided in Article VII.

          (k) “Company” shall mean Northrop Grumman Corporation and any successor.

          (l) “Company Contributions” shall mean contributions by the Company to a Participant’s
Account.

          (m) “Compensation” shall be Compensation as defined by Section 5.01 of the NGSP.

          (n) “Disability” or “Disabled” shall mean the Participant’s inability to perform each and
every duty of his or her occupation or position of employment due to illness or injury as
determined in the sole and absolute discretion of the Administrative Committee.

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          (o) “Eligible Compensation” shall mean (1) Compensation prior to January 1, 2009, and (2)
after 2008, Base Salary and Bonuses, reduced by the amount of any deferrals made from such amounts
under the Northrop Grumman Deferred Compensation Plan.

          (p) “Eligible Employee” shall mean any Employee who meets the following conditions:

               (1) he or she is eligible to participate in the NGSP;

               (2) he or she is classified by the Affiliated Companies as an Employee and not as an
independent contractor; and

               (3) he or she meets any additional eligibility criteria set by the Administrative Committee.

Additional eligibility criteria established by the Administrative Committee
may include specifying classifications of Employees who are eligible to
participate and the date as of which various groups of Employees will be
eligible to participate. This includes, for example, Administrative
Committee authority to delay eligibility for employees of newly acquired
companies who become Employees.

          (q) “Employee” shall mean any common law employee of the Affiliated Companies who is
classified as an employee by the Affiliated Companies.

          (r) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

          (s) “Investment Committee” means the committee in charge of investment aspects of the Plan, as
described in Article VII.

          (t) “Key Employee” means an employee treated as a “specified employee” under Code section
409A(a)(2)(B)(i) of the Company or the Affiliated Companies (i.e., a key employee (as defined in
Code section 416(i) without regard to paragraph (5) thereof)) if the Company’s or an Affiliated
Company’s stock is publicly traded on an established securities market or otherwise. The Company
shall determine in accordance with a uniform Company policy which Participants are Key Employees as
of each December 31 in accordance with IRS regulations or other guidance under Code section 409A,
provided that in determining the compensation of individuals for this purpose, the definition of
compensation in Treas. Reg. § 1.415(c)-2(d)(3) shall be used. Such determination shall be
effective for the twelve (12) month period commencing on April 1 of the following year.

          (u) “NGSP” means the Northrop Grumman Savings Plan.

          (v) “Open Enrollment Period” means the period designated by the Administrative Committee for
electing deferrals for the following Plan Year.

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          (w) “Participant” shall mean any Eligible Employee who participates in this Plan in accordance
with Article II or any Employee who is a RAC Participant.

          (x) “Payment Date” shall mean:

               (1) for distributions upon early termination under Section B.1(a), a date after the end of the
month in which termination of employment occurs; and

               (2) for distributions after Retirement, Disability or death under Section B.1(b), a date after
the end of the month in which occurs Retirement, the determination of Disability by the
Administrative Committee, or the notification of the Administrative Committee of the Participant’s
death (or later qualification of the Beneficiary or Beneficiaries), as applicable.

The exact date in each case will be determined by the Administrative Committee to allow time for
administrative processing.

          (y) “Plan” shall be the Northrop Grumman Savings Excess Plan.

          (z) “Plan Year” shall be the calendar year.

          (aa) “RAC Contributions” shall mean the Company contributions under Section 3.2(b)(2).

          (bb) “RAC Participant” shall mean an Employee who is eligible to participate in the NGSP,
receives Retirement Account Contributions under the NGSP, and is classified by the Affiliated
Companies as an Employee and not as an independent contractor. Notwithstanding the foregoing, an
Employee who becomes eligible to participate in the Officers Supplemental Executive Retirement
Program II (“OSERP II”) under the Northrop Grumman Supplemental Plan 2 shall immediately cease to
be eligible for RAC Contributions.

          (cc) “RAC Subaccount” shall mean the portion of a Participant’s Account made up of RAC
Contributions and earnings thereon.

          (dd) “Retirement” shall mean termination of employment with the Affiliated Companies after
reaching age 55.

          (ee) “Separation from Service” or “Separates from Service” or “Separating from Service” means
a “separation from service” within the meaning of Code section 409A.

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ARTICLE II

PARTICIPATION

 
	 	2.1	 	 In General

          (a) An Eligible Employee may become a Participant by complying with the procedures established
by the Administrative Committee for enrolling in the Plan. Anyone who becomes an Eligible Employee
will be entitled to become a Participant during an Open Enrollment Period.

          (b) A RAC Participant will become a Participant when RAC Contributions are first made to his
or her RAC Subaccount.

          (c) An individual will cease to be a Participant when he or she no longer has a positive
balance to his or her Account under the Plan.

 
	 	2.2	 	 Disputes as to Employment Status

          (a) Because there may be disputes about an individual’s proper status as an Employee or
non-Employee, this Section describes how such disputes are to be handled with respect to Plan
participation.

          (b) The Affiliated Companies will make the initial determination of an individual’s employment
status.

               (1) If an individual is not treated by the Affiliated Companies as a common law employee, then
the Plan will not consider the individual to be an “Eligible Employee” and he or she will not be
entitled to participate in the Plan.

               (2) This will be so even if the individual is told he or she is entitled to participate in the
Plan and given a summary of the plan and enrollment forms or other actions are taken indicating
that he or she may participate.

          (c) Disputes may arise as to an individual’s employment status. As part of the resolution of
the dispute, an individual’s status may be changed by the Affiliated Companies from non-Employee to
Employee. Such Employees are not Eligible Employees and will not be entitled to participate in the
Plan.

6

 

ARTICLE III

DEFERRAL ELECTIONS

 
	 	3.1	 	 Elections to Defer Eligible Compensation

          (a) Timing. An Eligible Employee who meets the requirements of Section 2.1(a) may
elect to defer Eligible Compensation earned in a Plan Year by filing an election in the Open
Enrollment Period for the Plan Year. An election to participate for a Plan Year is irrevocable.

          (b) Election Rules. An Eligible Employee’s election may be made in writing,
electronically, or as otherwise specified by the Administrative Committee. Such election shall
specify the Eligible Employee’s rate of deferral for contributions to the Plan, which shall be
between 1% and 75%, and shall address distribution of the deferred amounts as described in Section
6.1. All elections must be made in accordance with the rules, procedures and forms provided by the
Administrative Committee. The Administrative Committee may change the rules, procedures and forms
from time to time and without prior notice to Participants.

          (c) Cancellation of Election. If a Participant becomes disabled (as defined under Code
section 409A) during a Plan Year, his deferral election for such Plan Year shall be cancelled.

 
	 	3.2	 	 Contribution Amounts

          (a) Participant Contributions. An Eligible Employee’s contributions under the Plan for
a Plan Year will begin once his or her Compensation for the Plan Year exceeds the Code section
401(a)(17) limit for the Plan Year. The Participant’s elected deferral percentage will be applied
to his or her Eligible Compensation for the balance of the Plan Year.

          (b) Company Contributions. The Company will make Company Contributions to a
Participant’s Account as provided in (1), (2) and (3) below.

               (1) Matching Contributions. The Company will make a Company Contribution equal to the
matching contribution rate for which the Participant is eligible under the NGSP for the Plan Year
multiplied by the amount of the Participant’s contributions under subsection (a).

               (2) RAC Contributions. Effective July 1, 2008, the Company will make RAC Contributions
equal to a percentage of a RAC Participant’s Compensation for a Plan Year in excess of the Code
section 401(a)(17) limit. The percentage used to calculate a RAC Participant’s contribution for a
Plan Year shall be based on the RAC Participant’s age on the last day of the Plan Year as follows:

                    (i) Three percent if not yet age 35.

                    (ii) Four percent if 35 or older, but not yet 50.

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                    (iii) Five percent if age 50 or older.

               (3) Make-Up Contributions for Contribution Limitation. If an Eligible Employee’s Basic
Contributions under the NGSP for a Plan Year are limited by the Code section 415(c) contribution
limit before the Eligible Employee’s Basic Contributions under the NGSP are limited by the Code
section 401(a)(17) compensation limit, the Company will make a Company Contribution equal to the
amount of matching contributions for which the Eligible Employee would have been eligible under the
NGSP were Code section 415(c) not applied, reduced by the actual amount of matching contributions
made for the Plan Year under the NGSP.

	 	3.3	 	 Crediting of Deferrals

          Amounts deferred by a Participant under the Plan shall be credited to the Participant’s
Account as soon as practicable after the amounts would have otherwise been paid to the Participant.
Company contributions other than those under Section 3.2(b)(3) will be credited to Accounts as
soon as practicable after each payroll cycle in which they accrue. Company contributions under
Section 3.2(b)(3) will be credited to Accounts as soon as practicable after each Plan Year.

	 	3.4	 	 Maximum Contributions

          Effective January 1, 2011, the total amount of contributions under Sections 3.2(a) and (b)
made to the Plan on behalf of each Corporate Policy Council member (“CPC Participant”) shall not
exceed $5 million (the “Lifetime Cap”). The following items will not count toward the Lifetime
Cap: (a) investment gains or earnings, and (b) amounts originally contributed to other plans that
have been or are merged into the Plan. Notwithstanding the foregoing, Company Contributions shall
continue to be made to a CPC Participant’s Account until the end of the Plan Year in which the CPC
Participant reaches the Lifetime Cap, and any deferral election made by a CPC Participant that is
irrevocable under Code section 409A on the date the Lifetime Cap is reached shall remain effective.

	 	3.5	 	Investment Elections

          (a) The Investment Committee will establish a number of different investment funds or other
investment options for the Plan. The Investment Committee may change the funds or other investment
options from time to time, without prior notice to Participants.

          (b) Participants may elect how their future contributions and existing Account balances will
be deemed invested in the various investment funds and may change their elections from time to
time. If a Participant does not elect how future contributions will be deemed invested,
contributions will be deemed invested in the qualified default investment alternative (“QDIA”) that
applies to the Participant under the NGSP.

          (c) The deemed investments for a RAC Participant’s RAC Subaccount must be the same as the
deemed investments for the RAC Participant’s Company contributions under Section 3.2(b)(1).

8

 

          (d) Selections of investments, changes and transfers must be made according to the rules and
procedures of the Administrative Committee.

               (1) The Administrative Committee may prescribe rules that may include, among other matters,
limitations on the amounts that may be transferred and procedures for electing transfers.

               (2) The Administrative Committee may prescribe valuation rules for purposes of investment
elections and transfers. Such rules may, in the Administrative Committee’s discretion, use
averaging methods to determine values and accrue estimated expenses. The Administrative Committee
may change the methods it uses for valuation from time to time.

               (3) The Administrative Committee may prescribe the periods and frequency with which
Participants may change deemed investment elections and make transfers.

               (4) The Administrative Committee may change its rules and procedures from time to time and
without prior notice to Participants.

	 	3.6	 	Investment Return Not Guaranteed

          Investment performance under the Plan is not guaranteed at any level. Participants may lose
all or a portion of their contributions due to poor investment performance.

9

 

ARTICLE IV

ACCOUNTS

	 	4.1	 	Accounts

          The Administrative Committee shall establish and maintain a recordkeeping Account for each
Participant under the Plan.

	 	4.2	 	Valuation of Accounts

          The valuation of Participants’ recordkeeping Accounts will reflect earnings, losses, expenses
and distributions, and will be made in accordance with the rules and procedures of the
Administrative Committee.

          (a) The Administrative Committee may set regular valuation dates and times and also use
special valuation dates and times and procedures from time to time under unusual circumstances and
to protect the financial integrity of the Plan.

          (b) The Administrative Committee may use averaging methods to determine values and accrue
estimated expenses.

          (c) The Administrative Committee may change its valuation rules and procedures from time to
time and without prior notice to Participants.

	 	4.3	 	Use of a Trust

          The Company may set up a trust to hold any assets or insurance policies that it may use in
meeting its obligations under the Plan. Any trust set up will be a rabbi trust and any assets
placed in the trust shall continue for all purposes to be part of the general assets of the Company
and shall be available to its general creditors in the event of the Company’s bankruptcy or
insolvency.

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ARTICLE V

VESTING AND FORFEITURES

	 	5.1	 	In General

          A Participant’s interest in his or her Account will be nonforfeitable, subject to the
exceptions in Section 5.2.

	 	5.2	 	Exceptions

          The following exceptions apply to the vesting rule:

          (a) A RAC Participant shall become vested in his RAC Subaccount upon completing three years of
service. For this purpose, years of service shall be calculated in the same manner as for purposes
of determining vesting in Retirement Account Contributions under the NGSP (including the treatment
of a break in service).

          (b) Forfeitures on account of a lost payee. See Section 6.6.

          (c) Forfeitures under an escheat law.

          (d) Recapture of amounts improperly credited to a Participant’s Account or improperly paid to
or with respect to a Participant.

          (e) Expenses charged to a Participant’s Account.

          (f) Investment losses.

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ARTICLE VI

DISTRIBUTIONS

	 	6.1	 	Distribution Rules for Non-RAC Amounts

          The rules in this Section 6.1 apply to distribution of a Participant’s Account other than the
RAC Subaccount.

          Notwithstanding the foregoing, Appendix B governs the distribution of amounts that were earned
and vested (within the meaning of Code section 409A and regulations thereunder) under the Plan
prior to 2005 (and earnings thereon) and are exempt from the requirements of Code section 409A.
Thus, this Section 6.1 does not apply to these pre-2005 deferrals, but does apply to all other
amounts deferred under the Plan.

          (a) Separate Distribution Election. A Participant must make a separate distribution
election for each year’s contributions. A Participant generally makes a distribution election at
the same time the Participant makes the deferral election, i.e., during the Open Enrollment Period.

          (b) Distribution Upon Separation. A Participant may elect on a deferral form to have
the portion of his Account related to amounts deferred under the deferral form and Company
contributions for the same year (and earnings thereon) distributed in a lump sum or in quarterly or
annual installments over a period of 1 to 15 years. Lump sum payments under the Plan will be made
in the month following the Participant’s Separation from Service. Installment payments shall
commence in the March, June, September or December next following the month of Separation from
Service. If a Participant does not make a distribution election and his Account balance exceeds
$50,000 and the Participant is age 55 or older at the time the Participant Separates from Service,
the Participant will receive quarterly installments over a 10-year period. Otherwise, a
Participant not making an election will receive a lump sum payment. Notwithstanding the foregoing,
if the Participant’s Account balance is $50,000 or less or the Participant is under age 55 at the
time the Participant Separates from Service, the full Account balance shall be distributed in a
lump sum payment in the month following the Participant’s Separation from Service.

               Notwithstanding the timing rules in the foregoing paragraph, distributions may not be made to
a Key Employee upon a Separation from Service before the date which is six months after the date of
the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key Employee).
Any payments that would otherwise be made during this period of delay shall be accumulated and
paid six months after the date payments would have commenced absent the six month delay.

          (c) Changes in Form of Distribution. A Participant may make up to two subsequent
elections to change the form of a distribution for any year’s deferrals and Company contributions.
Such an election, however, shall be effective only if the following conditions are satisfied:

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               (1) The election may not take effect until at least twelve (12) months after the date on which
the election is made; and

               (2) The distribution will be made exactly five (5) years from the date the distribution would
have otherwise been made.

	 	6.2	 	Distribution Rules for RAC Subaccount

          The full balance in a RAC Subaccount shall be distributed in a lump sum upon a RAC
Participant’s Separation from Service. Notwithstanding the foregoing, distribution will not be
made to a Key Employee upon a Separation from Service until the date which is six months after the
date of the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key
Employee).

	 	6.3	 	Effect of Taxation

          If Plan benefits are includible in the income of a Participant under Code section 409A prior
to actual receipt of the benefits, the Administrative Committee shall immediately distribute the
benefits found to be so includible to the Participant.

	 	6.4	 	Permitted Delays

          Notwithstanding the foregoing, any payment to a Participant under the Plan shall be delayed
upon the Committee’s reasonable anticipation of one or more of the following events:

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

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

          (c) provided, that any payment delayed pursuant to this Section 6.4 shall be paid in
accordance with Code section 409A.

	 	6.5	 	Payments Not Received At Death

          In the event of the death of a Participant before receiving a payment, payment will be made to
his or her estate if death occurs on or after the date of a check that has been issued by the Plan.
Otherwise, payment of the amount will be made to the Participant’s Beneficiary.

	 	6.6	 	Inability to Locate Participant

          In the event that the Administrative Committee is unable to locate a Participant or
Beneficiary within two years following the required payment date, the amount allocated to the
Participant’s Account shall be forfeited. If, after such forfeiture and prior to termination of the
Plan, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated
without interest or earnings for the forfeiture period.

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	 	6.7	 	Committee Rules

          All distributions are subject to the rules and procedures of the Administrative Committee. The
Administrative Committee may also require the use of particular forms. The Administrative Committee
may change its rules, procedures and forms from time to time and without prior notice to
Participants.

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ARTICLE VII

ADMINISTRATION

	 	7.1	 	Committees

          (a) Effective April 27, 2006, the Administrative Committee shall be comprised of the
individuals (in their corporate capacity) who are members of the Administrative Committee for
Northrop Grumman Deferred Compensation Plan. If no such Administrative Committee exists, the
members of the Administrative Committee for the Plan shall be individuals holding the following
positions within the Company (as such titles may be modified from time to time), or their
successors in office: the Corporate Vice President and Chief Human Resources and Administration
Officer; the Corporate Vice President, Controller and Chief Accounting Officer; the Vice President,
Taxation; the Vice President, Compensation, Benefits and HRIS; and the Corporate Director, Benefits
Administration and Services. A member of the Administrative Committee may resign by delivering a
written notice of resignation to the Corporate Vice President and Chief Human Resources and
Administration Officer.

          (b) Prior to April 27, 2006, the Administrative Committee shall be comprised of the
individuals appointed by the Compensation Committee of the Board (the “Compensation Committee”).

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

	 	7.2	 	Committee Action

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

          The Compensation Committee shall appoint a Chairman from among the members of the
Administrative Committee and a Secretary who may or may not be a member of the Administrative
Committee. The Administrative Committee shall conduct its business according to the provisions of
this Article and the rules contained in the current edition of Robert’s Rules of Order or such
other rules of order the Administrative Committee may deem

15

 

appropriate. The Administrative Committee shall hold meetings from time to time in any
convenient location.

	 	7.3	 	Powers and Duties of the Administrative Committee

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

          (a) To construe and interpret the terms and provisions of this Plan and make all factual
determinations;

          (b) To compute and certify to the amount and kind of benefits payable to Participants and
their Beneficiaries;

          (c) To maintain all records that may be necessary for the administration of the Plan;

          (d) To provide for the disclosure of all information and the filing or provision of all
reports and statements to Participants, Beneficiaries or governmental agencies as shall be required
by law;

          (e) To make and publish such rules for the regulation of the Plan and procedures for the
administration of the Plan as are not inconsistent with the terms hereof;

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

          (g) To exercise powers granted the Administrative Committee under other Sections of the Plan;
and

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

	 	7.4	 	Powers and Duties of the Investment Committee

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

          (a) To select types of investment and the actual investments against which earnings and losses
will be measured;

          (b) To oversee any rabbi trust; and

16

 

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

	 	7.5	 	Construction and Interpretation

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

	 	7.6	 	Information

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

	 	7.7	 	Committee Compensation, Expenses and Indemnity

          (a) The members of the Committees shall serve without compensation for their services
hereunder.

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

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

	 	7.8	 	Disputes

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

17

 

ARTICLE VIII

MISCELLANEOUS

	 	8.1	 	Unsecured General Creditor

          Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, claims, or interest in any specific property or assets of the Affiliated
Companies. No assets of the Affiliated Companies shall be held in any way as collateral security
for the fulfilling of the obligations of the Affiliated Companies under this Plan. Any and all of
the Affiliated Companies’ assets shall be, and remain, the general unpledged, unrestricted assets
of the Affiliated Companies. The obligation under the Plan of the Affiliated Companies adopting the
Plan shall be merely that of an unfunded and unsecured promise of those Affiliated Companies to pay
money in the future, and the rights of the Participants and Beneficiaries shall be no greater than
those of unsecured general creditors. It is the intention of the Affiliated Companies that this
Plan be unfunded for purposes of the Code and for purposes of Title I of ERISA.

	 	8.2	 	Restriction Against Assignment

          (a) The Company shall pay all amounts payable hereunder only to the person or persons
designated by the Plan and not to any other person or corporation. No part of a Participant’s
Accounts shall be liable for the debts, contracts, or engagements of any Participant, his or her
Beneficiary, or successors in interest, nor shall a Participant’s Accounts be subject to execution
by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any
such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or
assign any benefits or payments hereunder in any manner whatsoever. If any Participant, Beneficiary
or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, commute, assign, pledge, encumber or charge any distribution or payment from the Plan,
voluntarily or involuntarily, the Administrative Committee, in its discretion, may cancel such
distribution or payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the Administrative Committee shall direct.

          (b) The actions considered exceptions to the vesting rule under Section 5.2 will not be
treated as violations of this Section.

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

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

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

18

 

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

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

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

	 	8.3	 	Restriction Against Double Payment

          If a court orders an assignment of benefits despite Section 8.2, the affected Participant’s
benefits will be reduced accordingly. The Administrative Committee may use any reasonable actuarial
assumptions to accomplish the offset under this Section.

	 	8.4	 	Withholding

          There shall be deducted from each payment made under the Plan or any other compensation
payable to the Participant (or Beneficiary) all taxes, which are required to be withheld by the
Affiliated Companies in respect to such payment or this Plan. The Affiliated Companies shall have
the right to reduce any payment (or compensation) by the amount of cash sufficient to provide the
amount of said taxes.

	 	8.5	 	Amendment, Modification, Suspension or Termination

          The Company may, in its sole discretion, terminate, suspend or amend this Plan at any time or
from time to time, in whole or in part for any reason. Notwithstanding the foregoing, no amendment
or termination of the Plan shall reduce the amount of a Participant’s Account balance as of the
date of such amendment or termination. Upon termination of the Plan, distribution of balances in
Accounts shall be made to Participants and Beneficiaries in the manner and at the time described in
Article VI, unless the Company determines in its sole discretion that all such amounts shall be
distributed upon termination in accordance with the requirements under Code section 409A.

          Notwithstanding the foregoing, no amendment of the Plan shall apply to amounts that were
earned and vested (within the meaning of Code section 409A and regulations thereunder) under the
Plan prior to 2005, unless the amendment specifically provides that it applies to such amounts.
The purpose of this restriction is to prevent a Plan amendment from resulting in an inadvertent
“material modification” to amounts that are “grandfathered” and exempt from the requirements of
Code section 409A.

19

 

	 	8.6	 	Governing Law

          To the extent not preempted by ERISA, this Plan shall be construed, governed and administered
in accordance with the laws of Delaware.

	 	8.7	 	Receipt and Release

          Any payment to a payee in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Plan, the Committees and the Affiliated
Companies. The Administrative Committee may require such payee, as a condition precedent to such
payment, to execute a receipt and release to such effect.

	 	8.8	 	Payments on Behalf of Persons Under Incapacity

          In the event that any amount becomes payable under the Plan to a person who, in the sole
judgment of the Administrative Committee, is considered by reason of physical or mental condition
to be unable to give a valid receipt therefore, the Administrative Committee may direct that such
payment be made to any person found by the Committee, in its sole judgment, to have assumed the
care of such person. Any payment made pursuant to such determination shall constitute a full
release and discharge of the Administrative Committee and the Company.

	 	8.9	 	Limitation of Rights and Employment Relationship

          Neither the establishment of the Plan, any trust nor any modification thereof, nor the
creating of any fund or account, nor the payment of any benefits shall be construed as giving to
any Participant, or Beneficiary or other person any legal or equitable right against the Affiliated
Companies or any trustee except as provided in the Plan and any trust agreement; and in no event
shall the terms of employment of any Employee or Participant be modified or in any way be affected
by the provisions of the Plan and any trust agreement.

	 	8.10	 	Headings

          Headings and subheadings in this Plan are inserted for convenience of reference only and are
not to be considered in the construction of the provisions hereof.

* * *

20

 

          IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly authorized
officer on this 20th day of December, 2010.

	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

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

21

 

	 	 	 	 	 

APPENDIX A — 2005 TRANSITION RELIEF

     The following provisions apply only during 2005, pursuant to transition relief granted in IRS
Notice 2005-1:

	 	A.1	 	Cash-Out

          Participants Separating from Service during 2005 for any reason before age 55 will receive an
immediate lump sum distribution of their Account balances. Other Participants Separating from
Service in 2005 will receive payments in accordance with their prior elections.

	 	A.2	 	Elections

          During the Plan’s open enrollment period in June 2005 Participants may fully or partially
cancel 2005 deferral elections and receive in 2005 a refund of amounts previously deferred in 2005.

          In addition, individuals working in Company facilities impacted by Hurricane Katrina may stop
or reduce 2005 elective contributions to the Plan at any time during 2005. All payments under this
Section A.2 will be made before the end of calendar year 2005.

	 	A.3	 	Key Employees

          Key Employees Separating from Service on or after July 1, 2005, with distributions subject to
Code section 409A and scheduled for payment in 2006 within six months of Separation from Service,
may choose I or II below, subject to III:

	 	I.	 	Delay the distributions described above for six months from the
date of Separation from Service. The delayed payments will be paid as a single
sum with interest at the end of the six month period, with the remaining
payments resuming as scheduled.
	 
	 	II.	 	Accelerate the distributions described above into a payment in
2005 without interest adjustments.
	 
	 	III.	 	Key Employees must elect I or II during 2005.

A1

 

APPENDIX B — DISTRIBUTION RULES FOR PRE-2005 AMOUNTS

     Distribution of amounts earned and vested (within the meaning of Code section 409A and
regulations thereunder) under the Plan prior to 2005 (and earnings thereon) are exempt from the
requirements of Code section 409A and shall be made in accordance with the Plan terms as in effect
on December 31, 2004 and as summarized in the following provisions.

	 	B.1	 	Distribution of Contributions

          (a) Distributions Upon Early Termination.

               (1) Voluntary Termination. If a Participant voluntarily terminates employment with the
Affiliated Companies before age 55 or Disability, distribution of his or her Account will be made
in a lump sum on the Participant’s Payment Date.

               (2) Involuntary Termination. If a Participant involuntarily terminates employment with
the Affiliated Companies before age 55, distribution of his or her Account will generally be made
in quarterly or annual installments over a fixed number of whole years not to exceed 15 years,
commencing on the Participant’s Payment Date, in accordance with the Participant’s original
election on his or her deferral election form. Payment will be made in a lump sum if the
Participant had originally elected a lump sum, if the Account balance is $50,000 or less, or if the
Administrative Committee so specifies.

          (b) Distribution After Retirement, Disability or Death. In the case of a Participant
who separates from service with the Affiliated Companies on account of Retirement, Disability or
death and has an Account balance of more than $50,000, the Account shall be paid to the Participant
(and after his or her death to his or her Beneficiary) in substantially equal quarterly
installments over 10 years commencing on the Participant’s Payment Date unless an optional form of
benefit has been specified pursuant to Section B.1(b)(1).

               (1) An optional form of benefit may be elected by the Participant, on the form provided by
Administrative Committee, during his or her initial election period from among those listed below:

                    (i) A lump sum distribution on the Participant’s Payment Date.

                    (ii) Quarterly installments over a period of at least 1 and no more
than 15 years beginning on the Participant’s Payment Date.

                    (iii) Annual installments over a period of at least 2 and no more than
15 years beginning on the Participant’s Payment Date.

               (2) A Participant from time to time may modify the form of benefit that he or she has
previously elected. Upon his or her separation from service, the most recently elected form of
distribution submitted at least 12 months prior to separation will govern. If no such election
exists, distributions will be paid under the 10-year installment method.

B1

 

               (3) In the case of a Participant who terminates employment with the Affiliated Companies on
account of Retirement, Disability or death with an Account balance of $50,000 or less, the Account
shall be paid to the Participant in a lump sum distribution on the Participant’s Payment Date.

               (4) In general, upon the Participant’s death, payment of any remaining Account balance will be
made to the Beneficiary in a lump sum on the Payment Date. But the Beneficiary will receive any
remaining installments (starting on the Payment Date) if the Participant was receiving
installments, or if the Participant died on or after age 55 with an Account balance over $50,000
and with an effective installment payout election in place. In such cases, the Beneficiary may
still elect a lump sum payment of the remaining Account balance, but only with the Administrative
Committee’s consent.

               (5) In the event that this Plan is terminated, the amounts allocated to a Participant’s
Account shall be distributed to the Participant or, in the event of his or her death, to his or her
Beneficiary in a lump sum.

B2

 

APPENDIX C — MERGED PLANS

	 	C.1	 	Plan Mergers

          (a) Merged Plans. As of their respective effective dates, the plans listed in (c)(the
“Merged Plans”) are merged into this Plan. All amounts from those plans that were merged into this
Plan are held in their corresponding Accounts.

          (b) Accounts. Effective as of the dates below, Accounts are established for
individuals who, before the merger, had account balances under the merged plans. These individuals
will not accrue benefits under this Plan unless they become Participants by virtue of being hired
into a covered position with an Affiliated Company, but they will be considered Participants for
purposes of the merged accounts. The balance credited to the Participant’s merged plan account
will, effective as of the date provided in the table below, be invested in accordance with the
terms of this Plan. Except as provided in section C.2 below, amounts merged into this Plan from the
merged plans are governed by the terms of this Plan.

          (c) Table.

	 	 	 	 	 
	 	 	Merger Effective	 	Merged Account
	Name of Merged Plans	 	Dates	 	Names
	 
	 	 	 	 
	Northrop Grumman Benefits
Equalization Plan

	 	December 10, 2004
	 	NG BEP Account
	 
	 	 	 	 
	Northrop Grumman Space &
Mission Systems Corp.
Deferred Compensation Plan

	 	December 10, 2004
	 	S & MS Deferred Compensation Account
	 
	 	 	 	 
	BDM International, Inc. 1997
Executive Deferred
Compensation Plan (“BDM
Plan”)

	 	April 29, 2005
	 	BDM Account
	 
	 	 	 	 

	 	C.2	 	Merged Plans — General Rule

          (a) NG BEP Account and S & MS Deferred Compensation Account. Distributions from
Participants’ NG BEP and S & MS Deferred Compensation Accounts are made under the provisions of
Appendix B, except as provided in this Section.

               (1) Amounts in the Participant’s NG BEP Account and the S & MS Deferred Compensation Account
shall be paid out in accordance with elections made under the Merged Plans.

C1

 

               (2) The Participant’s “Payment Date” for amounts in the NG BEP Account and the S & MS Deferred
Compensation Account shall be deemed to be the end of January following the Participant’s
termination of employment.

               (3) The reference to $50,000 in the provisions of Appendix B shall be deemed to be $5,000 with
respect to amounts in the NG BEP Account and the S & MS Deferred Compensation Account.

               (4) The Administrative Committee shall assume the rights and responsibilities of the
Directors/Committee with respect to determining whether a Participant’s NG BEP Account may be paid
out in a form other than the automatic form of payment.

               (5) The Administrative Committee shall assume the rights and responsibilities of the Committee
or Special Committee with respect to determining whether a Participant’s S & MS Deferred
Compensation Account may be paid out in a form other than the automatic form of payment.

               (6) For purposes of determining the time of payment of a Participant’s NG BEP Account, a
Participant’s employment will not be deemed to have terminated following the Participant’s layoff
until the earlier of the end of the twelve-month period following layoff (without a return to
employment with the Affiliated Companies) or the date on which the Participant retires under any
pension plan maintained by the Affiliated Companies.

               (7) A Participant’s S & MS Deferred Compensation Account shall be paid to the Participant no
later than the January 5 next preceding the Participant’s 80th birthday.

               (8) In no event will payments of amounts in the Participant’s NG BEP Account and the S & MS
Deferred Compensation Account be accelerated or deferred beyond the payment schedule provided under
the Merged Plans. However, any election to change the time or form of payment for such an amount
may be made based on the terms of the relevant Merged Plan as in effect on October 3, 2004.

          (b) BDM Account. Distributions of a Participant’s vested BDM Account balance shall be
made in accordance with this Section C.2(b), and Article VI shall not apply to such distributions.
A Participant shall be vested in his BDM Account balance in accordance with the vesting provisions
of the BDM Plan.

               (1) Timing of Payment: A Participant’s vested BDM Account balance shall be distributed
in accordance with elections made under the BDM Plan. For those Participants who have not commenced
distributions as of April 29, 2005, payments from the BDM Account will commence at the time
designated on his or her BDM enrollment and election form, unless extended prior to such date.
However, if such a Participant did not elect a fixed date (or elect the earlier of a fixed date or
termination of employment), his or her vested BDM Account balance will be paid as soon as
administratively practicable following termination of employment in the form designated under
Section C.2(b)(2) below.

               (2) Form of Payment: A Participant’s vested BDM Account balance shall be paid in cash.
The vested BDM Account balance will be paid in (i) a lump sum, (ii) five

C2

 

(5) or ten (10) substantially equal annual installments (adjusted for gains and losses), or
(iii) a combination thereof, as selected by the Participant (or Beneficiary) prior to the date on
which amounts are first payable to the Participant (or Beneficiary) under Section C.2(b)(1) above.
If the Participant fails to designate properly the manner of payment, such payment will be made in
a lump sum.

               (3) Death Benefits: If a Participant dies before commencement of payment of his BDM
Account balance, the entire Account balance will be paid at the times provided in Section C.2(b)(2)
above to his or her Beneficiary. If a Participant dies after commencement but before he or she has
received all payments from his vested BDM Account balance, the remaining installments shall be paid
annually to the Beneficiary. For purposes of this Section C.2(b), a Participant’s Beneficiary,
unless subsequently changed, will be the designated beneficiary(ies) under the BDM Plan or if none,
the Participant’s spouse, if then living, but otherwise the Participant’s then living descendants,
if any, per stirpes, but, if none, the Participant’s estate.

               (4) Lost Participant: In the event that the Administrative Committee is unable to
locate a Participant or Beneficiary within three years following the payment date under Section
C.2(b)(1) above, the amount allocated to the Participant’s BDM Account shall be forfeited. If,
after such forfeiture and prior to termination of the Plan, the Participant or Beneficiary later
claims such benefit, such benefit shall be reinstated without interest or earnings for the
forfeiture period. In lieu of such a forfeiture, the Administrative Committee has the discretion to
direct distribution of the vested BDM Account balance to any one or more or all of the
Participant’s next of kin, and in the proportions as the Administrative Committee determines.

               (5) Committee Rules: All distributions are subject to the rules and procedures of the
Administrative Committee. The Administrative Committee may also require the use of particular
forms. The Administrative Committee may change its rules, procedures and forms from time to time
and without prior notice to Participants.

               (6) Payment Schedule: In no event will payments of amounts in the Participant’s BDM
Account be accelerated or deferred beyond the payment schedule provided under the BDM Plan.

               (7) Application to Trustee: BDM International, Inc. set aside amounts in a grantor
trust to assist it in meeting its obligations under the BDM Plan. Notwithstanding Section C.2(b)(5)
above and the claims procedures provided in Section 7.8, a Participant may make application for
payment of benefits under this Section C.2(b) directly to the trustee of such trust.

C3EX-10.(bb)

Exhibit 10(bb)

LITTON INDUSTRIES, INC. RESTORATION PLAN 2

Amended and Restated Effective as of January 1, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 

	INTRODUCTION	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE I Definitions	 	 	1	 
	1.01
	 	Active Participant	 	 	1	 
	1.02
	 	Affiliated Companies	 	 	1	 
	1.03
	 	Avondale Plan	 	 	1	 
	1.04
	 	Board of Directors	 	 	1	 
	1.05
	 	Code	 	 	1	 
	1.06
	 	Company	 	 	1	 
	1.07
	 	ERISA	 	 	1	 
	1.08
	 	FSSP	 	 	1	 
	1.09
	 	Grandfathered Amounts	 	 	1	 
	1.10
	 	Key Employee	 	 	1	 
	1.11
	 	Ingalls Salaried Plan	 	 	2	 
	1.12
	 	Participant	 	 	2	 
	1.13
	 	Payment Date	 	 	2	 
	1.14
	 	Pension Plan and Pension Plans	 	 	2	 
	1.15
	 	Plan	 	 	2	 
	1.16
	 	Plan Year	 	 	3	 
	1.17
	 	Program	 	 	3	 
	1.18
	 	Retirement Plan and Retirement Plans	 	 	3	 
	1.19
	 	Retirement Plan “B”	 	 	3	 
	1.20
	 	Separation from Service or Separates from Service	 	 	3	 
	1.21
	 	Termination of Employment	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE II General Provisions	 	 	4	 
	2.01
	 	In General	 	 	4	 
	2.02
	 	Forms and Times of Benefit Payments	 	 	4	 
	2.03
	 	Mandatory Cashout	 	 	5	 
	2.04
	 	Optional Payment Forms	 	 	5	 
	2.05
	 	Beneficiaries and Spouses	 	 	6	 
	2.06
	 	Amendment and Plan Termination	 	 	6	 
	2.07
	 	Not an Employment Agreement	 	 	7	 
	2.08
	 	Assignment of Benefits	 	 	7	 
	2.09
	 	Nonduplication of Benefits	 	 	7	 
	2.10
	 	Funding	 	 	8	 
	2.11
	 	Construction	 	 	8	 
	2.12
	 	Governing Law	 	 	8	 
	2.13
	 	Actions By Company and Claims Procedures	 	 	8	 
	2.14
	 	Plan Representatives	 	 	8	 
	2.15
	 	Number	 	 	9	 
	2.16
	 	Special Tax Distribution	 	 	9	 
	2.17
	 	Benefit Limit	 	 	9	 

 

 

	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	ARTICLE III Lump Sum Election	 	 	10	 
	3.01
	 	In General	 	 	10	 
	3.02
	 	Retirees Election	 	 	10	 
	3.03
	 	Retirees Lump Sum	 	 	11	 
	3.04
	 	Actives Election	 	 	12	 
	3.05
	 	Actives Lump Sum—Retirement Eligible	 	 	13	 
	3.06
	 	Actives Lump Sum—Not Retirement Eligible	 	 	14	 
	3.07
	 	Calculation of Lump Sum	 	 	15	 
	3.08
	 	Spousal Consent	 	 	16	 
	 
	 	 	 	 	 	 
	APPENDIX A Litton Restoration Program — Post April 3, 2001 through June 30, 2003	 	 	1	 
	A.01
	 	Purpose	 	 	1	 
	A.02
	 	Definitions	 	 	1	 
	A.03
	 	Eligibility	 	 	1	 
	A.04
	 	Amount of Benefit	 	 	2	 
	A.05
	 	Preretirement Surviving Spouse Benefit	 	 	3	 
	A.06
	 	Plan Termination	 	 	4	 
	A.07
	 	Retirement Plan Benefits	 	 	4	 
	 
	 	 	 	 	 	 
	APPENDIX B Litton Cash Balance Restoration Program	 	 	1	 
	B.01
	 	Purpose	 	 	1	 
	B.02
	 	Eligibility	 	 	1	 
	B.03
	 	Amount of Benefit	 	 	1	 
	B.04
	 	Preretirement Survivor Benefit	 	 	1	 
	B.05
	 	Plan Termination	 	 	2	 
	B.06
	 	Retirement Plan Benefits	 	 	2	 
	 
	 	 	 	 	 	 
	APPENDIX C 2005-2007 Transition Rules	 	 	1	 
	C.01
	 	Election	 	 	1	 
	C.02
	 	2005 Commencements	 	 	1	 
	C.03
	 	2006 and 2007 Commencements	 	 	2	 
	 
	 	 	 	 	 	 
	APPENDIX D Post 2007 Distribution of 409A Amounts	 	 	1	 
	D.01
	 	Time of Distribution	 	 	1	 
	D.02
	 	Special Rule for Key Employees	 	 	1	 
	D.03
	 	Forms of Distribution	 	 	1	 
	D.04
	 	Death	 	 	2	 
	D.05
	 	Actuarial Assumptions	 	 	2	 
	D.06
	 	Accelerated Lump Sum Payouts	 	 	2	 
	D.07
	 	Effect of Early Taxation	 	 	3	 
	D.08
	 	Permitted Delays	 	 	3	 
	 
	 	 	 	 	 	 
	APPENDIX E Cutting Edge Optronics Transfer	 	 	1	 
	E.01
	 	Eligible Transferred Employees	 	 	1	 
	E.02
	 	Transferred Benefits	 	 	1	 
	E.03
	 	Transferred Employee Benefits	 	 	1	 

ii

 

INTRODUCTION

          The Litton Industries, Inc. Restoration Plan 2 (the “Plan”), is hereby amended and restated
effective as of January 1, 2010, except as otherwise provided. This restatement amends the January
1, 2009 restatement of the Plan.

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

ARTICLE I

Definitions

The terms in this Article have the following meanings when capitalized:

	 	1.01	 	Active Participant. This term is defined in Section 3.04(a).
	 
	 	1.02	 	Affiliated Companies. The Company and any other entity related to the Company
under the rules of section 414 of the Code. The Affiliated Companies include Northrop
Grumman Corporation and its 80%-owned subsidiaries and may also include other entities.
	 
	 	1.03	 	Avondale Plan. The Avondale Industries, Inc. Non-Represented Employees’
Pension Plan.
	 
	 	1.04	 	Board of Directors. The Board of Directors of Northrop Grumman Corporation.
	 
	 	1.05	 	Code. The Internal Revenue Code of 1986, as amended.
	 
	 	1.06	 	Company. Litton Industries, Inc.
	 
	 	1.07	 	ERISA. The Employee Retirement Income Security Act of 1974, as amended.
	 
	 	1.08	 	FSSP. The Northrop Grumman Financial Security and Savings Program.
	 
	 	1.09	 	Grandfathered Amounts. Plan benefits that were earned and vested as of
December 31, 2004 within the meaning of Code section 409A and official guidance
thereunder.
	 
	 	1.10	 	Key Employee. An employee treated as a “specified employee” under Code
section 409A(a)(2)(B)(i) of the Company or the Affiliated

 

 

	 	 	 	Companies (i.e., a key employee (as defined in Code section 416(i) without regard
to paragraph (5) thereof)) if the Company’s or an Affiliated Company’s stock is
publicly traded on an established securities market or otherwise. The Company shall
determine in accordance with a uniform Company policy which Participants are Key
Employees as of each December 31 in accordance with IRS regulations or other
guidance under Code section 409A, provided that in determining the compensation of
individuals for this purpose, the definition of compensation in Treas. Reg. §
1.415(c)-2(d)(3) shall be used. Such determination shall be effective for the
twelve (12) month period commencing on April 1 of the following year.
	 
	 	1.11	 	Ingalls Salaried Plan. The Ingalls Shipbuilding, Inc. Salaried Employees’
Retirement Plan.
	 
	 	1.12	 	Participant. Any employee of the Company or any employee identified as a
“Transferred Employee” in Appendix E who is eligible for benefits under a particular
Program and has not received full payment under the Program. However, no employees of the
Component Technologies Sector or Premier America Credit Union may be Participants.
	 
	 	1.13	 	Payment Date. The 1st of the month coincident with or following the later of
(a) the date the Participant attains age 55, or (b) the date the Participant Separates
from Service.
	 
	 	1.14	 	Pension Plan and Pension Plans. Any of the following:

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

	 	 	 	“Aerojet Closing Date” means the Closing Date specified in the April 19, 2001 Asset
Purchase Agreement by and Between Aerojet-General Corporation and Northrop Grumman
Systems Corporation.
	 
	 	1.15	 	Plan. The Litton Industries, Inc. Restoration Plan 2.

2

 

	 	1.16	 	Plan Year. A 12-month period ending on December 31.
	 
	 	1.17	 	Program. One of the eligibility and benefit structures described in the
Appendices.
	 
	 	1.18	 	Retirement Plan and Retirement Plans.

	 	(a)	 	For periods after April 3, 2001 and before July 1, 2003, the
FSSP, Retirement Plan “B,” and the Ingalls Salaried Plan. Appendix A provides
the Program for this period.
	 
	 	(b)	 	For periods after June 30, 2003, Retirement Plan “B,” the
Avondale Plan, and the Ingalls Salaried Plan. Appendix B provides the Program
for this period.

	 	1.19	 	Retirement Plan “B”. This term refers to the benefit structure described in
the plan document entitled Northrop Grumman Retirement Plan “B” or one of its predecessor
plans. It does not include any benefit structures described in other plan documents, even
if part of the legal plan named Northrop Grumman Retirement Plan “B” (for example,
Northrop Grumman Retirement Plan “A,” the Ingalls Salaried Plan, and the Avondale Plan).
	 
	 	1.20	 	Separation from Service or Separates from Service. A “separation from
service” within the meaning of Code section 409A.
	 
	 	1.21	 	Termination of Employment. Complete termination of employment with the
Affiliated Companies.

	 	(a)	 	If a Participant ceases to perform services for one
Affiliated Company to begin performing services for another, he or she will
not have a Termination of Employment.
	 
	 	(b)	 	A Participant will have a Termination of Employment if he or
she leaves the Affiliated Companies because the affiliate he or she works for
ceases to be an Affiliated Company because it is sold or spun off.

3

 

ARTICLE II

General Provisions

	 	2.01	 	In General. The Plan contains two different benefit Programs, which are
described in Appendices A and B. Except as provided in Appendix E, Appendices A and B
provide the eligibility conditions and the amount of benefits payable under the Programs.

	 	(a)	 	See Appendix A for the Program that applies to benefits
earned for services performed after April 3, 2001 and before July 1, 2003.
	 
	 	(b)	 	See Appendix B for the Program that applies to benefits
earned for services performed after June 30, 2003.
	 
	 	(c)	 	See Appendix E for benefits earned by “Transferred Employees”
under the Cutting Edge Optronics transfer.

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

	 	(a)	 	any payment authorized by the Northrop Grumman Corporation
Compensation Committee that is (1) calculated pursuant to the method for
determining a bonus amount under the Annual Incentive Plan (AIP) for a given
year, and (2) paid in lieu of such bonus in the year prior to the year the
bonus would otherwise be paid under the AIP, and
	 
	 	(b)	 	any award payment under the Northrop Grumman Long-Term
Incentive Cash Plan.

	 	2.02	 	Forms and Times of Benefit Payments. Unless a Program provides rules
concerning the form and timing of benefit payments, the Company will determine the form
and timing of benefit payments in its sole discretion, except where a lump sum election
under Article III applies.
	 
	 	 	 	For payments made to supplement those of a particular tax-qualified retirement or
savings plan, the Company will only select among the options available under that
plan, using the same actuarial adjustments used in that plan, except in cases of
lump sums.
	 
	 	 	 	Whenever the present value of the amount payable under the Plan does not exceed
$10,000, it will be paid in the form of a single lump sum as of the first of the
month following Termination of Employment. The lump sum will be calculated using
the factors and methodology described in Section 3.07 below. (See Section 2.03 for
the rule that applies as of January 1, 2008.)

4

 

	 	 	 	No payments will commence under this Plan until a Participant’s Termination of
Employment, even if benefits have commenced under a Retirement Plan for
Participants over age 701/2.
	 
	 	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See
Appendix C and Appendix D for the rules that apply to other benefits earned under
the Plan.
	 
	 	2.03	 	Mandatory Cashout. Notwithstanding any other provision in the Plan,
Participants with Grandfathered Amounts who have not commenced payment of such benefits
prior to January 1, 2008 will be subject to the following rules:

	 	(a)	 	Post-2007 Terminations. Participants who have a
Termination of Employment after 2007 will receive a lump sum distribution of
the present value of their Grandfathered Amounts within two months of
Termination of Employment (without interest), if such present value is below
the Code section 402(g) limit in effect at the Termination of Employment.
	 
	 	(b)	 	Pre-2008 Terminations. Participants who had a
Termination of Employment before 2008 will receive a lump sum distribution of
the present value of their Grandfathered Amounts within two months of the time
they commence payment of their underlying qualified pension plan benefits
(without interest), if such present value is below the Code section 402(g)
limit in effect at the time such payments commence.

	 	 	 	For purposes of calculating present values under this Section, the actual
assumptions and calculation procedures for lump sum distributions under the
Northrop Grumman Pension Plan shall be used.
	 
	 	2.04	 	Optional Payment Forms. Participants with Grandfathered Amounts shall be
permitted to elect (a) or (b) below:

	 	(a)	 	To receive their Grandfathered Amounts in any form of
distribution available under the Plan at October 3, 2004, provided that form
remains available under the underlying qualified pension plan at the time
payment of the Grandfathered Amounts commences. The conversion factors for
these distribution forms will be based on the factors or basis in effect under
this Plan on October 3, 2004.
	 
	 	(b)	 	To receive their Grandfathered Amounts in any life annuity
form not included in (a) above but included in the underlying qualified
pension plan distribution options at the time payment

5

 

	 	 	 	of the Grandfathered Amounts commences. The conversion factors will be
based on the following actuarial assumptions:

	 	 	 	 	 	 	 

	 

	 	Interest Rate:
	 	6% 		
	 
	 	 	 	 	 	 
	 

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

	 	2.05	 	Beneficiaries and Spouses. The Participant may designate a beneficiary if the
Company selects a form of payment that includes a survivor benefit. The Participant may
change this designation at any time before benefits commence. A beneficiary designation
must be in writing and will be effective only when received by the Company.
	 
	 	 	 	The beneficiary of a Participant who is married on the date his or her benefits are
scheduled to commence will be the Participant’s spouse unless some other
beneficiary is named with spousal consent. To be effective, spousal consent must be
submitted in writing before benefits commence and must be witnessed by a Plan
representative or notary public. Spousal consent is not necessary if the Company
determines that there is no spouse or that the spouse cannot be found.
	 
	 	 	 	With respect to Programs designed to supplement tax-qualified retirement or savings
plans, the Participant’s spouse will be the spouse as determined under the
underlying tax-qualified plan. Otherwise, the Company has full discretionary
authority to determine the identity of the Participant’s spouse.
	 
	 	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See
Appendix C and Appendix D for the rules that apply to other benefits earned under
the Plan.
	 
	 	2.06	 	Amendment and Plan Termination. The Company may, in its sole discretion,
terminate, suspend or amend this Plan at any time or from time to time, in whole or in
part for any reason. This includes the right to amend or eliminate any of the provisions
of the Plan with respect to lump sum distributions, including any lump sum calculation
factors, whether or not a Participant has already made a lump sum election.
Notwithstanding the foregoing, no amendment or termination of the Plan shall reduce the
amount of a Participant’s accrued benefit under the Plan as of the date of such amendment
or termination.
	 
	 	 	 	No amendment of the Plan shall apply to the Grandfathered Amounts, unless the
amendment specifically provides that it applies to such amounts. The purpose of
this restriction is to prevent a Plan amendment from resulting in an inadvertent
“material modification” to the Grandfathered Amounts.

6

 

	 	 	 	The Company may, in its sole discretion, seek reimbursement from the Company’s
tax-qualified plans to the extent this Plan pays tax-qualified plan benefits to
which Participants were entitled or became entitled under the tax-qualified plans.
	 
	 	2.07	 	Not an Employment Agreement. Nothing contained in this Plan gives any
Participant the right to be retained in the service of the Company, nor does it interfere
with the right of the Company to discharge or otherwise deal with Participants without
regard to the existence of this Plan.
	 
	 	2.08	 	Assignment of Benefits. A Participant, surviving spouse or beneficiary may
not, either voluntarily or involuntarily, assign, anticipate, alienate, commute, sell,
transfer, pledge or encumber any benefits to which he or she is or may become entitled
under the Plan, nor may Plan benefits be subject to legal process or to attachment or
garnishment by a Participant’s creditors.
	 
	 	 	 	Notwithstanding the foregoing, all or a portion of a Participant’s benefit may be
paid to another person as specified in a domestic relations order that the Company
determines is qualified (a “Qualified Domestic Relations Order”). For this purpose,
a Qualified Domestic Relations Order means a judgment, decree, or order (including
the approval of a settlement agreement) which is:

	 	(a)	 	Issued pursuant to a State’s domestic relations law;
	 
	 	(b)	 	Relates to the provision of child support, alimony payments
or marital property rights to a spouse, former spouse, child or other
dependent of the Participant;
	 
	 	(c)	 	Creates or recognizes the right of a spouse, former spouse,
child or other dependent of the Participant to receive all or a portion of the
Participant’s benefits under the Plan; and
	 
	 	(d)	 	Meets such other requirements established by the Company.

	 	 	 	The Company shall determine whether any document received by it is a Qualified
Domestic Relations Order. In making this determination, the Company may consider
the rules applicable to “domestic relations orders” under Code section 414(p) and
ERISA § 206(d), and such other rules and procedures as it deems relevant.
	 
	 	2.09	 	Nonduplication of Benefits. This Section applies if, despite Section 2.08,
the Company is required to make payments under this Plan to a person or entity other than
the payees described in the Plan. In such a case, any amounts due a Participant or
beneficiary under this Plan will be reduced

7

 

	 	 	 	by the actuarial value of the payments made to another person or entity with
respect to that Participant or beneficiary.

	 	 	 	The actuarial value of lump sums will be determined using the factors and
methodology described in Section 3.07 below. In all other cases, actuarial
value will be determined using the actuarial assumptions in the underlying
Retirement Plan.
	 
	 	 	 	In dividing a Participant’s benefit between the Participant and another
person or entity, consistent actuarial assumptions and methodologies will
be used so that there is no increased actuarial cost to the Company.

	 	2.10	 	Funding. Participants have the status of general unsecured creditors of the
Company, and the Plan constitutes a mere promise by the Company to pay benefits in the
future. The Company may, but need not, fund benefits under the Plan through a trust. If it
does so, any trust created by the Company and any assets held by the trust to assist it in
meeting its obligations under the Plan will conform to the terms of the model trust, as
described in Internal Revenue Service Revenue Procedure 92-64, but only to the extent
required by Internal Revenue Service Revenue Procedure 92-65. The Company and Participants
intend that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA.
	 
	 	 	 	Any funding of benefits under this Plan will be in the Company’s sole discretion.
The Company may set and amend the terms under which it will fund and may cease to
fund at any time.
	 
	 	2.11	 	Construction. The Company has full discretionary authority to determine
eligibility and to construe and interpret the terms of the Plan, including the power to
remedy possible ambiguities, inconsistencies or omissions.
	 
	 	2.12	 	Governing Law. This Plan is governed by the law of the State of California,
except to the extent superseded by federal law.
	 
	 	2.13	 	Actions By Company and Claims Procedures. The Company’s powers under the Plan
will be exercised by written resolution of the Board of Directors or its delegate. The
Board may by written resolution delegate any of the Company’s powers under the Plan and
any such delegations may provide for subdelegations, also by written resolution.
	 
	 	 	 	The standardized “Northrop Grumman Nonqualified Retirement Plans Claims and Appeals
Procedures” shall apply in handling claims and appeals under this Plan.
	 
	 	2.14	 	Plan Representatives. Those authorized to act as Plan representatives will be
designated in writing by the Board of Directors or its delegate.

8

 

	 	2.15	 	Number. The singular, where appearing in this Plan, will be deemed to include
the plural, unless the context clearly indicates the contrary.
	 
	 	2.16	 	Special Tax Distribution. On the date a Participant’s retirement benefit is
reasonably ascertainable within the meaning of IRS regulations under Code section
3121(v)(2), an amount equal to the Participant’s portion of the FICA tax withholding will
be distributed in a single lump sum payment. This payment will be based on all benefits
under the Plan, including Grandfathered Amounts. This payment will reduce the
Participant’s future benefit payments under the Plan on an actuarial basis.
	 
	 	2.17	 	Benefit Limit. The amount of the benefit under this Plan will be limited as
provided below:

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

	 	(1)	 	For this purpose, “Final Average Salary”
has the meaning provided under Appendix G to the Northrop Grumman
Supplemental Plan 2 (the “OSERP”).
	 
	 	(2)	 	The Participant’s Final Average Salary will
be reduced for early retirement applying the factors in the OSERP.
	 
	 	(3)	 	The limit in this subsection may not be
exceeded even after the benefits under the Plan have been enhanced
under any change in control agreements or Northrop Grumman
Corporation Special Agreements.

9

 

ARTICLE III

Lump Sum Election

          This Article only applies with respect to Grandfathered Amounts. See Appendix C and Appendix
D for the distribution rules that apply to other benefits earned under the Plan.

	 	3.01	 	In General. This Article provides the rules under which Participants may
elect to receive their Plan benefits in a lump sum. Except as provided in Section 3.07,
this Article does not apply to Active Participants (as defined in Section 3.04) whose
benefits are automatically payable in lump sum form under Article II.
	 
	 	 	 	This Article will not apply if a particular Program so provides.
	 
	 	3.02	 	Retirees Election. Participants and Participants’ beneficiaries already
receiving monthly benefits under the Plan at its inception will be given a one-time
opportunity to elect a lump sum payout of future benefit payments.

	 	(a)	 	The election must be made within a 45-day period determined
by the Company. Within its discretion, the Company may delay the commencement
of the 45-day period in instances where the Company is unable to timely
communicate with a particular payee.
	 
	 	(b)	 	The determination as to whether a payee is already receiving
monthly benefits will be made at the beginning of the 45-day period.
	 
	 	(c)	 	An election to take a lump sum must be accompanied by a
waiver of the existing retiree medical benefits by those Participants (and
their covered spouses or surviving spouses) entitled either to have such
benefits entirely paid for by the Company or to receive such benefits as a
result of their classification as an employee under Executive Class Code II.

	 	 	 	Following the waiver, waiving Participants (and covered spouses or
surviving spouses) will be entitled to the coverage offered to
employees who are eligible for Senior Executive Retirement
Insurance Benefits in effect as of July 1, 1993. The cost charged
to the retirees for this coverage will be determined as if the
retiree had been employed 20 or more years by the Company.

10

 

	 	(d)	 	If the person receiving payments as of the beginning of the
45-day period dies before electing a lump sum, his or her beneficiary, if any,
may not elect a lump sum.
	 
	 	(e)	 	Elections to receive a lump sum (and waivers under (c)) must
be made in writing and must include spousal consent if the payee (whether the
Participant or beneficiary) is married. Elections and spousal consent must be
witnessed by a Plan representative or a notary public.
	 
	 	(f)	 	An election (with spousal consent, where required) to receive
the lump sum made at any time during the 45-day period will be irrevocable. If
no proper election has been made by the end of the 45-day period, payments
will continue unchanged in the monthly form that previously applied.

	 	3.03	 	Retirees Lump Sum. If a retired Participant or beneficiary makes a valid
election under Section 3.02 within the 45-day period, monthly payments will continue in
the previously applicable form for 12 months (assuming the payees live that long).

	 	(a)	 	As of the first of the 13th month, the present value of the
remaining benefit payments will be paid in a single lump sum to the
Participant, if alive, or, if not, to the beneficiary under the previously
applicable form of payment.
	 
	 	(b)	 	No lump sum payment will be made if:

	 	(1)	 	The Participant is receiving monthly
benefit payments in a form that does not provide for survivor
benefits and the Participant dies before the lump sum payment is due.
	 
	 	(2)	 	The Participant is receiving monthly
benefit payments in a form that does provide for survivor benefits,
but the Participant and beneficiary die before the lump sum payment
is due.

	 	(c)	 	The following rules apply where payment is being made in the
form of a 10-year certain and continuous life annuity option:

	 	(1)	 	If the Participant is deceased at the
commencement of the 45-day election period, the surviving beneficiary
may not make the election if there are less than 13 months left in
the 10-year certain period.
	 
	 	(2)	 	If the Participant elects the lump sum and
dies before the first of the 13th month and:

11

 

	 	(A)	 	if the 10-year certain
period has already ended, all monthly payments will cease at
the Participant’s death and no lump sum will be paid;
	 
	 	(B)	 	if the 10-year certain
period ends after the Participant’s death and before the
beginning of the 13th month, monthly payments will end at the
end of the 10-year certain period and no lump sum will be
paid; and
	 
	 	(C)	 	if the 10-year certain
period ends after the beginning of the 13th month, monthly
payments will continue through the 12th month, and a lump sum
equal to the present value of the remaining benefit payments
will be paid as of the first of the 13th month.

	 	3.04	 	Actives Election. Active Participants may elect to have their benefits paid
in the form of a single lump sum under this Section.

	 	(a)	 	A Participant is an Active Participant if he or she is still
employed by the Affiliated Companies on or after the beginning of the initial
45-day period referred to in Section 3.02.
	 
	 	(b)	 	An election to take a lump sum may be made at any time during
the 60-day period before Termination of Employment and covers both—

	 	(1)	 	Benefits payable to the Participant during
his or her lifetime, and
	 
	 	(2)	 	Survivor benefits (if any) payable to the
Participant’s beneficiary, including preretirement death benefits (if
any) payable to the Participant’s spouse.

	 	(c)	 	An election does not become effective until the earlier of:

	 	(1)	 	the Participant’s Termination of
Employment, or
	 
	 	(2)	 	the Participant’s death.

	 	 	 	A Participant’s election may be revoked before it is effective.
	 
	 	 	 	A Participant’s election will never take effect if the Participant does
not have a Termination of Employment within 60 days after making the
election.

12

 

	 	(d)	 	An election may only be made once. It cannot be made again if
it fails to become effective after 60 days or is revoked before becoming
effective.
	 
	 	(e)	 	No election can be made after a Participant’s Termination of
Employment.
	 
	 	(f)	 	If a Participant dies before making a lump sum election, his
or her spouse may not make a lump sum election with respect to any benefits
that may be due the spouse.
	 
	 	(g)	 	Elections to receive a lump sum must be made in writing and
must include spousal consent if the Participant is married. Elections and
spousal consent must be witnessed by a Plan representative or notary public.

	 	3.05	 	Actives Lump Sum—Retirement Eligible. If a Participant with a valid
lump sum election in effect under Section 3.04 has a Termination of Employment after
he or she is entitled to commence benefits under the Retirement Plans, payments will
be made in accordance with this Section.

	 	(a)	 	Monthly benefit payments will be made for up to 12 months,
commencing the first of the month following Termination of Employment.
Payments will be made:

	 	(1)	 	for a Participant who is not married on the
date benefits are scheduled to commence, based on a straight life
annuity for the Participant’s life and ceasing upon the Participant’s
death should he or she die before the 12 months elapse, or
	 
	 	(2)	 	for a Participant who is married on the
date benefits are scheduled to commence, based on a joint and
survivor annuity form—

	 	(A)	 	with the survivor benefit
equal to 50% of the Participant’s benefit;
	 
	 	(B)	 	with the Participant’s
spouse as the survivor annuitant;
	 
	 	(C)	 	determined by using the
contingent annuitant option factors used to convert straight
life annuities to 50% joint and survivor annuities under the
Northrop Grumman Retirement Plan “B”; and
	 
	 	(D)	 	with all payments ceasing
upon the death of both the Participant and his or her spouse
should they die before the 12 months elapse.

13

 

	 	(b)	 	As of the first of the 13th month, the present value of the
remaining benefit payments will be paid in a single lump sum. Payment of the
lump sum will be made to the Participant if he or she is still alive, or, if
not, to his or her surviving spouse, if any.
	 
	 	(c)	 	No lump sum payment will be made if:

	 	(1)	 	The Participant is receiving monthly
benefit payments in the form of a straight life annuity and the
Participant dies before the time the lump sum payment is due.
	 
	 	(2)	 	The Participant is receiving monthly
benefit payments in a joint and survivor annuity form and the
Participant and his or her spouse both die before the time the lump
sum payment is due.

	 	(d)	 	A lump sum will be payable to a Participant’s spouse as of
the first of the month following the date of the Participant’s death, if:

	 	(1)	 	the Participant dies after making a valid
lump sum election but before commencement of any benefits under this
Plan;
	 
	 	(2)	 	the Participant is survived by a spouse who
is entitled to a preretirement surviving spouse benefit under this
Plan; and
	 
	 	(3)	 	the spouse survives to the first of the
month following the date of the Participant’s death.

	 	3.06	 	Actives Lump Sum—Not Retirement Eligible. If a Participant with a
valid lump sum election in effect under Section 3.04 has a Termination of Employment
before he or she is entitled to commence benefits under the Retirement Plans, payments
will be made in accordance with this Section.

	 	(a)	 	No monthly benefit payments will be made.
	 
	 	(b)	 	Following Termination of Employment, a single lump sum
payment of the benefit will be made on the first of the month following 12
months after the date of the Participant’s Termination of Employment.
	 
	 	(c)	 	A lump sum will be payable to a Participant’s spouse as of
the first of the month following the date of the Participant’s death, if:

	 	(1)	 	the Participant dies after making a valid
lump sum election but before commencing benefits under this Plan;

14

 

	 	(2)	 	the Participant is survived by a spouse who
is entitled to a preretirement surviving spouse benefit under this
Plan; and
	 
	 	(3)	 	the spouse survives to the first of the
month following the date of the Participant’s death.

	 	(d)	 	No lump sum payment will be made if the Participant is
unmarried at the time of death and dies before the time the lump sum payment
is due.

	 	3.07	 	Calculation of Lump Sum. The factors to be used in calculating the lump sum
are as follows:

	 	 	 	Interest: Whichever of the following two rates that produces the
smaller lump sum:

	 	(1)	 	the discount rate used by the Company for
purposes of Statement of Financial Accounting Standards No. 87 of the
Financial Accounting Standards Board as disclosed in the Company’s
annual report to shareholders for the year end immediately preceding
the date of distribution, or
	 
	 	(2)	 	the applicable interest rate that would be
used to calculate a lump sum value for the benefit under the
Retirement Plans.

	 	 	 	Mortality: The applicable mortality table that would be used to
calculate a lump sum value for the benefit under the Retirement Plans.
	 
	 	 	 	Increase in Section 415 Limit: 4% per year.
	 
	 	 	 	Age: Age rounded to the nearest month on the date the lump sum is
payable.

	 	 	 	The annuity to be converted to a lump sum will be the remaining annuity currently
payable to the Participant or his or her beneficiary at the time the lump sum is
due.

	 	 	 	For example, assume a Participant is receiving benefit payments in the
form of a 50% joint and survivor annuity.
	 
	 	 	 	If the Participant and the survivor annuitant are both still alive when
the lump sum payment is due, the present value calculation will be based
on the remaining benefits that would be paid to both the Participant and
the survivor in the annuity form.

15

 

	 	 	 	If only the survivor is alive, the calculation will be based solely on the
remaining 50% survivor benefits that would be paid to the survivor.
	 
	 	 	 	If only the Participant is alive, the calculation will be based solely on
the remaining benefits that would be paid to the Participant.

	 	 	 	In the case of a Participant who dies before commencing benefits under this Plan so
that only a preretirement surviving spouse benefit (if any) is payable, the lump
sum will be based solely on the value of the preretirement surviving spouse
benefit.
	 
	 	3.08	 	Spousal Consent. Spousal consent for the elections described above is not
necessary if the Company determines that there is no spouse or the spouse cannot be
located.

* * *

          IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly authorized
officer on this 20th day of December, 2010.

	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

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

Benefits & International 	 

16

 

	 	 	 	 	 

APPENDIX A

Litton Restoration Program — Post April 3, 2001 through June 30, 2003

	 	A.01  	 	Purpose. The purpose of this Program is simply to restore to employees of the
Company the benefits they lose under the Retirement Plans as a result of the compensation
limit in Code section 401(a)(17) and/or the limit on deferrals in Code section 402(g), or
any successor provisions. This Appendix applies to benefits earned for service performed
after April 3, 2001 and before July 1, 2003.
	 
	 	A.02  	 	Definitions. The following terms have the meanings below for purposes of this
Appendix.

	 	(a)	 	Annual Compensation. Compensation paid during the
calendar year, subject to the following:

	 	(1)	 	For compensation paid before July 1, 2003,
Annual Compensation means “Compensation” as defined in the FSSP.
	 
	 	(2)	 	For compensation paid after June 30, 2003,
Annual Compensation means “Compensation” as defined in the Northrop
Grumman Savings Plan (NGSP) for participants who transfer to that
plan only in the year of transfer.
	 
	 	(3)	 	Compensation does not include retention
bonuses paid as a result of the acquisition of Litton Industries,
Inc. by Northrop Grumman Corporation.
	 
	 	(4)	 	Compensation does not include amounts paid
for service performed before January 1, 2001 or after December 31,
2003.
	 
	 	(5)	 	Transfers. For anyone who
transferred from the FSSP to the NGSP before 2003, the rule under (1)
applies to pre-transfer periods, and the rules under (2) apply to
periods after the transfer.

	 	(b)	 	Annuity Equivalent. “Annuity Equivalent” determined
in the same manner as the prior version of this Program.

	 	A.03  	 	Eligibility. An employee of the Company or one of its subsidiaries is
eligible to receive a benefit under this Program if he or she:

	 	(a)	 	retires on or after May 1, 2001;

 

 

	 	(b)	 	has vested in benefits under one or more of the Retirement
Plans that are reduced because of the application of Code section 401(a)(17)
and/or Code section 402(g);
	 
	 	(c)	 	is not eligible to receive a benefit under the Northrop
Corporation Supplemental Retirement Income Program for Senior Executives, the
Litton Industries, Inc. Restoration Plan, or any other plan or program that
bars an employee from participation in this Program; and
	 
	 	(d)	 	Has deposited the maximum amount of pretax Employee Deposits
under the FSSP, including the Basic Contributions under the NGSP in a transfer
year (excluding any age 50 catch-up contributions).

	 	A.04  	 	Amount of Benefit.

	 	(a)	 	General. The benefit payable under this Program with
respect to a Participant who commences benefits during his or her lifetime is
intended to make up for the retirement benefit, if any, that would have been
payable to the Participant under the terms of a Retirement Plan, but for the
restrictions of Code sections 401(a)(17) and/or 402(g), or any successor
section as those limits are described by the applicable Retirement Plan.
	 
	 	(b)	 	Benefit Formula. The benefit payable under this
Program with respect to a Participant who commences benefits during his or her
lifetime equals the sum of all of his or her annual Part I Excess Benefits and
annual Part II Excess Benefits for each year in which the individual was a
Participant.
	 
	 	(c)	 	Part I Excess Benefit. A Participant’s annual Part I
Excess Benefit equals (4), where:

	 	(1)	 	equals the Participant’s Annual
Compensation multiplied by 4%;
	 
	 	(2)	 	equals the actual amount of the
Participant’s pretax Employee Deposits under the FSSP or Tax-Deferred
Contributions under the NGSP for the Plan Year (as limited by Code
sections 401(a)(17) and/or 402(g));
	 
	 	(3)	 	equals (1) minus (2); and
	 
	 	(4)	 	equals 85% of (3), minus the Annuity
Equivalent of (3).

	 	(d)	 	Part II Excess Benefit. A Participant’s annual Part
II Excess Benefit equals (4), where:

2

 

	 	(1)	 	equals the Participant’s Annual
Compensation multiplied by 6%;
	 
	 	(2)	 	equals the actual amount of the
Participant’s Matched Deposits under the FSSP and Basic Contributions
under the NGSP for the Plan Year (as limited by Code sections
401(a)(17) and/or 402(g));
	 
	 	(3)	 	equals (1) minus (2);
	 
	 	(4)	 	equals the Annuity Equivalent of 50% of
(3).

	 	(e)	 	Partial Year 2003. Subsections (c) and (d) above are
modified as provided in this subsection for Participants who are eligible for
an accrual under this Program in Plan Year 2003.

	 	(1)	 	The benefit will be calculated based on a
full year of Annual Compensation.
	 
	 	(2)	 	The total benefit in subsections (c) and
(d) above are offset by the benefit amount earned from July 1, 2003
to December 31, 2003 under Appendix B.

	 	(f)	 	Vested Benefits. Benefits under this Program will
only be paid to supplement benefit payments actually made from a Retirement
Plan. If benefits are not payable under a Retirement Plan because the
Participant has failed to vest or for any other reason, no payments will be
made under this Program with respect to such Retirement Plan.
	 
	 	(g)	 	No duplication of benefits. In any year in which a
Participant earns benefits in two or more qualified defined benefit plans,
the benefits from this plan will be reduced for any restoration plan benefits
paid from the other defined benefit plan.

	 	A.05  	 	Preretirement Surviving Spouse Benefit. Preretirement surviving spouse
benefits will be payable under this Program on behalf of a Participant if such
Participant’s surviving spouse is eligible for benefits payable from a Retirement Plan.
The amount of the preretirement surviving spouse benefit is the amount under A.04,
adjusted as follows:

	 	(a)	 	Death on or After Normal Retirement Age. The
Participant’s surviving spouse will receive a 100% survivor annuity calculated
assuming the employee commenced receiving normal retirement benefits the day
before death.

3

 

	 	(b)	 	Death on or After Early Retirement Age, But Before Normal
Retirement Age. The Participant’s surviving spouse will receive a 100%
survivor annuity calculated assuming the employee commenced receiving early
retirement benefits the day before death.
	 
	 	(c)	 	Death Before Early Retirement Age. The Participant’s
surviving spouse will receive a 100% survivor annuity calculated assuming the
employee terminated employment and survived to normal (or early) retirement
age and commenced receiving a joint and survivor annuity.

	 	 	 	No benefit will be payable under this Program with respect to a spouse after the
death of that spouse.
	 
	 	A.06  	 	Plan Termination. No further benefits may be earned under this Program with
respect to a particular Retirement Plan after the termination of such Retirement Plan.
	 
	 	A.07  	 	Retirement Plan Benefits. For purposes of this Appendix, the term “Retirement
Plan Benefits” generally means the benefits actually payable to a Participant, spouse,
beneficiary or contingent annuitant under a Retirement Plan. However, this Program is only
intended to remedy pension reductions caused by the operation of section 401(a)(17) and/or
402(g) and not reductions caused for any other reason. In those instances where pension
benefits are reduced for some other reason, the term “Retirement Plan Benefits” shall be
deemed to mean the benefits that actually would have been payable but for such other
reason.
	 
	 	 	 	Examples of such other reasons include, but are not limited to, the following:

	 	(a)	 	A reduction in pension benefits as a result of a distress
termination (as described in ERISA § 4041(c) or any comparable successor
provision of law) of a Retirement Plan. In such a case, the Retirement Plan
Benefits will be deemed to refer to the payments that would have been made
from the Retirement Plan had it terminated on a fully funded basis as a
standard termination (as described in ERISA § 4041(b) or any comparable
successor provision of law).
	 
	 	(b)	 	A reduction of accrued benefits as permitted under Code
section 412(c)(8), as amended, or any comparable successor provision of law.
	 
	 	(c)	 	A reduction of pension benefits as a result of payment of all
or a portion of a Participant’s benefits to a third party on behalf of or with
respect to a Participant.

4

 

APPENDIX B

Litton Cash Balance Restoration Program

	 	B.01  	 	Purpose. The purpose of this Program is simply to restore to employees of the
Company the benefits they lose under Retirement Plan “B” and the Avondale Plan after June
30, 2003 as a result of the compensation limit in Code section 401(a)(17) and/or the
benefit limit in Code section 415(b), or any successor provisions.
	 
	 	B.02  	 	Eligibility. An employee of the Company or any employee identified as a
“Transferred Employee” in Appendix E is eligible to receive a benefit under this Program
if he or she:

	 	(a)	 	retires on or after July 1, 2003;
	 
	 	(b)	 	has vested in benefits under Retirement Plan “B,” the Ingalls
Salaried Plan, or the Avondale Plan that are reduced because of the
application of Code section 401(a)(17) and/or Code section 415(b); and
	 
	 	(c)	 	is not eligible to receive a benefit under the Northrop
Corporation Supplemental Retirement Income Program for Senior Executives or
any other plan or program which bars an employee from participation in this
Program.

	 	B.03  	 	Amount of Benefit. The benefit payable under this Program with
respect to a Participant who commences benefits during his or her lifetime will equal
the retirement benefit, if any, that would have been payable to the Participant under
the terms of a Retirement Plan, but for the restrictions of Code section 401(a)(17)
and/or Code section 415(b) (or any successor sections) as those limits are described
by the applicable Retirement Plan. “Compensation” is defined by the pension plans and
includes the amount that would have been counted under the Qualified plans except that
it was deferred under The Northrop Grumman Deferred Compensation plan.
	 
	 	 	 	Benefits under this Program will only be paid to supplement benefit payments
actually made from Retirement Plan “B” or the Avondale Plan. If benefits are not
payable under Retirement Plan “B” or the Avondale Plan because the Participant has
failed to vest or for any other reason, no payments will be made under this Program
with respect to those plans.
	 
	 	B.04  	 	Preretirement Survivor Benefit. Preretirement survivor benefits will be
payable under this Program on behalf of a Participant if the Participant’s beneficiary is
eligible for benefits payable from Retirement Plan “B” or the Avondale Plan. The benefit
payable will be the amount that would have been payable under the Retirement Plan but for
the restrictions of

 

 

	 	 	 	section 401(a)(17) (or any successor section), as that limit is described in the
applicable Retirement Plan.

	 	 	 	The benefit payable under this Program will be paid in a lump sum to nonspouse
beneficiaries and in either a lump sum or single life annuity to spouse
beneficiaries. Notwithstanding the foregoing, the timing and form of the payment of
benefits described in this Section that relate to amounts other than Grandfathered
Amounts shall be determined in accordance with Appendix C and Appendix D.
	 
	 	 	 	The benefit payable under this Program will be reduced by the combined amounts of
the Retirement Plan Benefits and the Northrop Grumman Corporation ERISA
Supplemental Plan 1 benefits attributable to the applicable Retirement Plan.
	 
	 	 	 	No benefit will be payable under this Program with respect to a spouse after the
death of that spouse.
	 
	 	B.05  	 	Plan Termination. No further benefits may be earned under this Program with
respect to a particular Retirement Plan after the termination of the Retirement Plan.
	 
	 	B.06  	 	Retirement Plan Benefits. For purposes of this Appendix, the term “Retirement
Plan Benefits” generally means the benefits actually payable to a Participant, spouse,
beneficiary or contingent annuitant under a Retirement Plan. However, this Program is only
intended to remedy pension reductions caused by the operation of section 401(a)(17) and
not reductions caused for any other reason. Where pension benefits are reduced for some
other reason, the term “Retirement Plan Benefits” shall be deemed to mean the benefits
that actually would have been payable but for such other reason.
	 
	 	 	 	Examples of such other reasons include, but are not limited to, the following:

	 	(a)	 	A reduction in pension benefits as a result of a distress
termination (as described in ERISA § 4041(c) or any comparable successor
provision of law) of a Retirement Plan. In such a case, the Retirement Plan
Benefits will be deemed to refer to the payments that would have been made
from the Retirement Plan had it terminated on a fully funded basis as a
standard termination (as described in ERISA § 4041(b) or any comparable
successor provision of law).
	 
	 	(b)	 	A reduction of accrued benefits as permitted under Code
section 412(c)(8), as amended, or any comparable successor provision of law.

2

 

	 	(c)	 	A reduction of pension benefits as a result of payment of all
or a portion of a Participant’s benefits to a third party on behalf of or with
respect to a Participant.
	 
	 	(d)	 	No duplication of benefits. If the participant is eligible
for restoration plan benefits another Excess plan for the same period of
service, the benefit under this plan will be reduced accordingly to prevent a
duplication of benefits.

3

 

APPENDIX C

2005-2007 Transition Rules

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

	 	C.01  	 	Election. Participants scheduled to commence payments during 2005 may elect
to receive both pre-2005 benefit accruals and 2005 benefit accruals in any optional form
of benefit available under the Plan as of December 31, 2004. Participants electing
optional forms of benefits under this provision will commence payments on the
Participant’s selected benefit commencement date.
	 
	 	C.02  	 	2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 & Q&A-20,
Participants commencing payments in 2005 from the Plan may elect a form of distribution
from among those available under the Plan on December 31, 2004, and benefit payments shall
begin at the time elected by the Participant.

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

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

 

 

	 	(ii)	 	The lump sum payment shall be made in 2005
as soon as feasible after the election; and
	 
	 	(iii)	 	Interest and mortality assumptions and
methodology for calculating lump sum amount shall be based on the
Plan’s procedures for calculating lump sums as of December 31, 2004.

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

2

 

APPENDIX D

Post 2007 Distribution of 409A Amounts

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

	 	D.01  	 	Time of Distribution. Subject to the special rules provided in this Appendix
D, distributions to a Participant of his vested retirement benefit shall commence as of
the Payment Date.
	 
	 	D.02  	 	Special Rule for Key Employees. If a Participant is a Key Employee and age 55
or older at his Separation from Service, distributions to the Participant shall commence
on the first day of the seventh month following the date of his Separation from Service
(or, if earlier, the date of the Participant’s death). Amounts otherwise payable to the
Participant during such period of delay shall be accumulated and paid on the first day of
the seventh month following the Participant’s Separation from Service, along with interest
on the delayed payments. Interest shall be computed using the retroactive annuity starting
date rate in effect under the Northrop Grumman Pension Plan on a month-by-month basis
during such delay (i.e., the rate may change in the event the delay spans two calendar
years).
	 
	 	D.03  	 	Forms of Distribution. Subject to the special rules provided in this Appendix
D, a Participant’s vested retirement benefit shall be distributed in the form of a single
life annuity. However, a Participant may elect an optional form of benefit up until the
Payment Date. The optional forms of payment are:

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

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

 

 

	 	D.04  	 	Death. If a married Participant dies before the Payment Date, a death benefit
will be payable to the Participant’s spouse commencing 90 days after the Participant’s
death. The death benefit will be a single life annuity in an amount equal to the survivor
portion of a Participant’s vested retirement benefit based on a 100% joint and survivor
annuity determined on the Participant’s date of death. This benefit is also payable to a
Participant’s domestic partner who is properly registered with the Company in accordance
with procedures established by the Company.
	 
	 	D.05  	 	Actuarial Assumptions. Except as provided in Section D.06, all forms of
payment under this Appendix D shall be actuarially equivalent life annuity forms of
payment, and all conversions from one such form to another shall be based on the following
actuarial assumptions:

	 	 	 	 	 	 	 

	 

	 	Interest Rate:
	 	6% 		
	 
	 	 	 	 	 	 
	 

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

	 	D.06  	 	Accelerated Lump Sum Payouts.

	 	(a)	 	Post-2007 Separations. Notwithstanding the provisions
of this Appendix D, for Participants who Separate from Service on or after
January 1, 2008, if the present value of (a) the vested portion of a
Participant’s retirement benefit and (b) other vested amounts under nonaccount
balance plans that are aggregated with the retirement benefit under Code
section 409A, determined on the first of the month coincident with or
following the date of his Separation from Service, is less than or equal to
$25,000, such benefit amount shall be distributed to the Participant (or his
spouse or domestic partner, if applicable) in a lump sum payment. Subject to
the special timing rule for Key Employees under Section D.02, the lump sum
payment shall be made within 90 days after the first of the month coincident
with or following the date of the Participant’s Separation from Service.
	 
	 	(b)	 	Pre-2008 Separations. Notwithstanding the provisions
of this Appendix D, for Participants who Separate from Service before January
1, 2008, if the present value of (a) the vested portion of a Participant’s
retirement benefit and (b) other vested amounts under nonaccount balance plans
that are aggregated with the retirement benefit under Code section 409A,
determined on the first of the month coincident with or following the date the
Participant attains age 55, is less than or equal to $25,000, such benefit
amount shall be distributed to the Participant (or his spouse or domestic
partner, if applicable) in a lump sum payment within 90 days after the first
of the month coincident with or following the date the Participant attains age
55, but no earlier that January 1, 2008.

2

 

	 	(c)	 	Conflicts of Interest. The present value of a
Participant’s vested retirement benefit shall also be payable in an immediate
lump sum to the extent required under conflict of interest rules for
government service and permissible under Code section 409A.
	 
	 	(d)	 	Present Value Calculation. The conversion of a
Participant’s retirement benefit into a lump sum payment and the present value
calculations under this Section D.06 shall be based on the actuarial
assumptions in effect under the Northrop Grumman Pension Plan for purposes of
calculating lump sum amounts, and will be based on the Participant’s immediate
benefit if the Participant is 55 or older at Separation from Service.
Otherwise, the calculation will be based on the benefit amount the Participant
will be eligible to receive at age 55.

	 	D.07  	 	Effect of Early Taxation. If the Participant’s benefits under the Plan are
includible in income pursuant to Code section 409A, such benefits shall be distributed
immediately to the Participant.
	 
	 	D.08  	 	Permitted Delays. Notwithstanding the foregoing, any payment to a Participant
under the Plan shall be delayed upon the Company’s reasonable anticipation of one or more
of the following events:

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

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

3

 

APPENDIX E

Cutting Edge Optronics Transfer

          The provisions of this Appendix E are intended to comply with Code section 409A and to address
Plan benefits for the Transferred Employees (as defined below).

	 	E.01  	 	Eligible Transferred Employees. As of January 1, 2009 (the “Transfer Date”),
except for any employees of Cutting Edge Optronics that had an earned and vested benefit
under the Northrop Grumman Supplementary Retirement Income Plan (“SRIP”) prior to 2005
(each, a “SRIP Grandfathered Participant”), the employees of Cutting Edge Optronics who
began to participate in the Retirement Plan on January 1, 2009 (the “Transferred
Employees”) shall be eligible to participate and accrue benefits under the Plan.
Notwithstanding anything herein to the contrary, no SRIP Grandfathered Participant shall
be eligible to participate in this Plan.
	 
	 	E.02  	 	Transferred Benefits. Benefits accrued by a Transferred Employee under the
SRIP for services prior to the Transfer Date (the “SRIP Benefits”) shall be transferred to
and payable under the Plan, provided that before his termination date such Transferred
Employee has vested in the portion of his Retirement Plan benefits attributable to
services prior to the Transfer Date. In no event shall the transfer of such benefits to
the Plan operate to change the time or form of payment of the SRIP Benefits.
	 
	 	E.03  	 	Transferred Employee Benefits. Notwithstanding anything in the Plan to the
contrary other than Section 2.17, the accrued benefits of a Transferred Employee shall be
equal to any SRIP Benefits, plus benefits accrued in accordance with the terms of the Plan
for services on and after the Transfer Date.

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