Document:

EX-10(d)

 

Exhibit 10(d)

TRW INC.

DEFERRED COMPENSATION PLAN

     THIS AMENDED AND RESTATED PLAN, established by TRW Inc. (“TRW”) effective
July 28, 1993, and as amended from time to time, including this amendment and
restatement effective October 23, 2002, is for the benefit of certain employees
of the Corporation in executive, managerial or professional capacities so as to
enhance the Corporation’s ability to attract and retain outstanding employees
who are expected to contribute to its success. It shall remain in effect, as
it may be amended from time to time, until termination as provided in Article
VII of the Plan.

ARTICLE I

DEFINITIONS

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

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

1.2 Affiliate.

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

 

 

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

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

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

1.6 Committee. The Compensation Committee of the Directors.

1.7 Corporation. TRW or an Affiliate of TRW.

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

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

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

1.11 Determination Date. Daily.

1.12 Directors. The Directors of TRW.

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

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

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

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

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

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

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

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

1.20 Investment Fund Returns. The gains or losses in one or more of the
investment funds offered to participants under the TRW Employee Stock Ownership
and Savings Plan, any of which shall be available to any Participant for
purposes of having such investment fund results credited to his Account under
this Plan; provided, however, that effective July 1, 2000, any changes to the
investment funds offered to participants under the TRW Employee Stock Ownership
and Savings Plan will result in a change to the investment options available
under the Plan only if and when such changes are approved by the Chairman of
the Board, the General Counsel and the Executive Vice President – Human
Resources of TRW; and, provided further that the self-directed brokerage window
to be offered to participants under the TRW Employee Stock Ownership and
Savings Plan effective July 5, 2000, will not be made available as an
investment option under the Plan. Subject to consummation of the merger (the
“Merger”) contemplated by the Agreement and Plan of Merger dated as of June 30,
2002 by and among TRW, Northrop Grumman Corporation and Richmond Acquisition
Corp., as may be amended from time to time (the “Merger Agreement”), each
phantom

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share of TRW Common Stock allocated to the account of a Participant in
the Plan as of the Effective Time (as defined in the Merger Agreement) shall be
converted into phantom shares of Northrop Grumman Common Stock at the Exchange
Rate (as defined in the Merger Agreement), and the TRW Stock Fund under the
Plan shall be converted into a Northrop Grumman Stock Fund.

1.21 Other Grant. A cash award payable to an Eligible Employee, other than an
Incentive Bonus or Strategic Grant, that the Chief Executive Officer (or the
Committee, if the Eligible Employee is an Executive Officer) designates as
being eligible for deferral under the Plan or mandatorily deferrable under the
Plan. Such designation shall be subject to a determination by the Vice
President — Taxation that such deferral would effectively defer the inclusion
of such award in the Eligible Employee’s taxable income under applicable law.

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

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

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

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

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

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

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

1.27 Plan Year. Each of the twelve month periods ending December 31 and
occurring while the Plan remains in effect. The term “Plan Year” shall also
include the period beginning on the Effective Date and ending December 31,
1993, and any period of less than twelve months beginning January 1 and ending
on the date the Plan is terminated.

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

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

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

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

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

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

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

1.35 Termination of Employment. Any severance of a Participant from full-time
active salaried employment by the Corporation for any reason (other than a
transfer of employment from TRW to an Affiliate, from an Affiliate to another
Affiliate or from an Affiliate to TRW).

1.36 TRW. TRW Inc., an Ohio corporation.

ARTICLE II

ADMINISTRATION

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

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

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

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

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Section 5.1(b). The Special Committee may act by a vote of the majority
at a meeting or by a writing signed by a majority of the members of the Special Committee.

2.5 Financial Hardship and Retirement Payout Change Requests. In order for a
request to be considered by the Special Committee (or, in the case of a request
as set forth in clauses (i) or (ii) of Section 2.4 by an Executive Officer, the
Committee), the requests must (i) be in writing and delivered to the Executive
Vice President – Human Resources, (ii) set forth whether the Participant is
requesting an early payout because of a Financial Hardship or a change of
payout upon retirement, (iii) set forth the reasons for such request, including
in detail the Financial Hardship or the circumstances that necessitate the
change of payout upon retirement, (iv) in the case of a request as a result of
a Financial Hardship set forth the amount of such Participant’s Account that
the Participant wishes to be paid and the Sub-Accounts from which such early
payout shall be made and (v) in the case of a change of payout at retirement
set forth the manner in which the Participant wishes to receive payout (e.g.,
single sum or in annual installments from two to ten years). Compliance with
the petition procedures set forth in this Section 2.5 does not insure that the
request will be granted by the Special Committee (or the Committee).

ARTICLE III

PARTICIPATION

3.1 Participation.

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

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

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	 	year, or the Retirement Payment
Sub-Account, as the case may be, shall be credited with the
Interest Rate).

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

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

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

3.3 Modification of Deferral Election.

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

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	 	finding, based upon uniform standards
established by the Committee, that the Participant has suffered a
Financial Hardship. Subject to the terms of an Other Grant, a
Participant may change his or her elections made pursuant to Section
3.1(b)(iii) with respect to an Other Grant at any time prior to the date
established by the Executive Vice President – Human Resources.

ARTICLE IV

DEFERRED COMPENSATION

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

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

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

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4.4 Interest and Investment Fund Return Changes. A Participant may, on a daily
basis, revise the Investment Fund Returns and/or Interest Rate to be credited
to any of such Participant’s Sub-Accounts (except for an Other Grant
Sub-Account, if the terms of such Other Grant restrict the investment election
alternatives with respect to such Other Grant) on a daily basis by
communicating such changes to TRW or, if TRW has selected a Service Provider,
to the Service Provider, in the manner communicated from time to time by TRW to
the Participant. Such elections must be made in increments of 1%. Such
changes shall take effect in accordance with the timeframes established by TRW
or the Service Provider, as the case may be.

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

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

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ARTICLE V

PLAN BENEFITS

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

		
	 	     (a) Subject to the provisions of Section 5.1(b) and except as
otherwise provided below, upon Termination of Employment a Participant
shall receive a Plan Benefit equal to the balance of his Account as of
the Determination Date immediately preceding such Termination of
Employment, plus the amount of any Deferred Compensation credited his or
her Account after such Determination Date, plus the gains or losses on
the balance of his or her Account for the period from the Determination
Date immediately preceding such Termination of Employment through the
December 31 preceding the date of payment based upon the applicable
Investment Fund Returns or Interest Rate. Such Plan Benefit shall be
payable as a single sum during the January following such Termination of
Employment. However, in the event that the Termination of Employment is
the result of a divestiture of the unit or operations of the Corporation
where the Participant worked prior to Termination of Employment and the
Participant obtains employment with the entity that acquired such unit or
operations, then the balance of such Participant’s Account shall be
payable in accordance with such Participant’s original Deferral Election
or in one lump sum the January following such Participant’s termination
of employment from such entity (or its successor), whichever occurs
first. Such Participant’s Account shall continue to be credited or
charged with Investment Fund Returns or accrued Interest following such
Participant’s Termination of Employment through the December 31 preceding
payment in full of his or her Account.
	 
	 	     (b) In the event that a Participant’s Termination of Employment
occurs as a result of his retirement, the Participant shall receive the
Plan Benefit payable in respect of his Retirement Payment Sub-Account in
ten annual installments commencing in the year following the year that
Termination of Employment occurred; provided, however, that the
Participant can petition the Special Committee (or the Committee in the
case of an Executive Officer) at any time at least two months prior to
retirement to change such payment into annual installments from two to
ten years or a single sum; further provided, that any such payment change
approved by the Special Committee (or the Committee) shall not be
effective until the calendar year following the date of the payment
change; provided further, however, that if the amount in the Retirement
Payment Sub-Account is less than $5,000 valued at December 31 of any
year, the balance in the Retirement Payment Sub-Account shall be paid in
a lump sum in the January following retirement or any January thereafter
in which such Participant’s Retirement Payment Sub-Account falls below
$5,000. Notwithstanding the foregoing, following consummation of the
Merger, the Participant may, rather than petition the Special Committee
(or the Committee in the case of an Executive Officer) elect (by notice
to the Service Provider) at any time at least two months prior to
retirement to change such payment into annual 

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	 	installments from two to
ten years or a single sum, and such election shall be deemed accepted by
TRW if not rejected by TRW at least 14 days prior to such Participant’s
retirement. In the event that payment shall be made in a single sum,
such payment shall be in accordance with the procedures set forth in
Section 5.1(a) above, but in no event in the same calendar year as the
year of any requested change and no earlier than January 1 of the
calendar year following the year that Termination of Employment occurred.
In the event that the payment shall be made in installments, such
payments shall be made in accordance with Section 5.1(f) below. If, at
the time of retirement, the Participant has a credit in a Pre-Retirement
Payment Sub-Account, such Sub-Account balances shall be paid in
accordance with the Participant’s original Deferral Election. In the
event of death of a Participant after payouts have begun from such
Participant’s Retirement Payment Sub-Account, payouts will continue to be
made to the beneficiary or estate until paid out completely, subject to
the third provision of the first sentence of this Section 5.1(b).

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

12

 

		
	 	Special Committee or the Committee pursuant
to Section 2.5 or, with respect to elections made following the Merger
that are not rejected by TRW in accordance with Section 5.1(b), in such
number of annual installments elected by the Participant) by the end of
January of each year in which an installment is to be made. Installment
payments will commence in the year following the Participant’s
Termination of Employment. If annual installments are paid, the balance
of the Account shall continue to be credited or charged with Investment
Fund Returns or Interest as previously elected by the Participant in
accordance with Section 3.1(b) or as most recently revised pursuant to
Section 4.4.

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

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

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

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

ARTICLE VI

BENEFICIARY DESIGNATION

6.1 Beneficiary Designation. Each Participant shall have the right, at any
time, to designate any person or persons as his Beneficiary (both principal as
well as

13

 

contingent) to whom payment under the Plan shall be made in the event
of his death prior to complete distribution of all Plan Benefits due him under
the Plan. Any Beneficiary designation shall be made in writing on a form
prescribed by the Committee and shall become effective only when filed with the
Executive Vice President – Human Resources.

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

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

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

ARTICLE VII

AMENDMENT AND TERMINATION OF PLAN

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

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

7.3 Alteration following Merger. Notwithstanding any provision to the contrary
in Sections 7.1 or 7.2 hereof, effective upon consummation of the Merger, the
Plan may not, except as required by law or regulation, be altered in any way
that would negatively affect Participants with respect to benefits accrued at
the time of adoption of any such alteration (including, without limitation, any
alteration that would (A) affect the form or timing of payouts, or (B)
materially reduce the number and types of investment alternatives under the
Plan as available to Participants as of June 30, 2002 (it being understood that
the elimination of any particular fund shall not be considered to negatively
affect Plan Participants so long as the overall number and types of investment
alternatives has not been materially reduced compared to the number and types
of investment alternatives available under the Plan as of June 30, 2002)). The
foregoing sentence shall not prohibit Northrop Grumman Corporation, following

14

 

consummation of the Merger, from otherwise freezing or otherwise amending the
Plan with respect to administrative provisions and future accruals.

ARTICLE VIII

MISCELLANEOUS

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

8.2 Merger. The Committee (or the Special Committee, if no Executive Officer
is a participant in the Affiliate Plan) may, in its sole discretion, approve
the merger of an Affiliate Plan into this Plan. Upon the merger of an
Affiliate Plan into this Plan, any participant in the Affiliate Plan who is not
already a Participant in this Plan shall have an Account established in his
name under this Plan and he shall be considered a Participant for purposes of
that Account. The amount credited to a Participant’s Account as a Prior Plan
Credit shall be equal to the balance credited to the Participant’s account
under the Affiliate Plan as of the date of the merger. Unless a Participant in
the Affiliate Plan executes an agreement in a form approved by the Executive
Vice President – Human Resources providing for payments of a prior Plan Credit
to be made in accordance with the payment provisions provided for by the Plan,
a Participant’s Prior Plan Credit shall be allocated to a Sub-Account or
Sub-Accounts in a manner designed to cause such amounts to be paid to the
Participant at a date not later than the date such amounts would have been paid
to the Participant under the Affiliate Plan had the Affiliate Plan continued as
a separate plan. If any portion of a Participant’s Prior Plan Credit is
allocated to a Pre-Retirement Payment Sub-Account, a specific year for
distribution of such Sub-Account shall be established. To the extent that a
Participant’s Prior Plan Credit is allocated to his existing (pre-merger)
Retirement Payment Sub-Account, the Investment Fund Returns and/or Interest
Rate in effect with respect to such Sub-Account shall be applicable to such
Prior Plan Credit, subject to modification by the Participant under Section
4.4. To the extent that a Participant’s Prior Plan Credit is allocated to a
newly established (post-merger) Sub-Account, such Prior Plan Credit shall be
credited with the Interest Rate, subject to modification by the Participant
under Section 4.4. If, upon the merger of an Affiliate Plan into this Plan, a
participant in the Affiliate Plan enters into an agreement in the form approved
by the Executive Vice President – Human Resources providing for payments of a
Prior Plan Credit to be made in accordance with this Plan, then such elections
shall apply; provided that such agreement shall not be effective with respect
to any election that results in the deferral of income to a later date if such
election is not made before the beginning of the year in which the payment
would have been made under the Affiliate Plan.

8.3 Unsecured General Creditor. Participants and their Beneficiaries, estates,
heirs, successors and assigns shall have no legal or equitable rights, interest
or claims in any property or assets of TRW. Such assets of TRW shall not be
held under any trust or in any other way as collateral security for the
fulfillment of the obligations of TRW under the Plan. Any and all of TRW’s
assets shall be, and remain, the general,

15

 

unpledged, unrestricted assets of
TRW. TRW’s sole obligation under the Plan shall be merely that of an unfunded
and unsecured promise of TRW to pay money in the future.

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

8.5 Not a Contract of Employment. Neither the terms and conditions of the Plan
nor those of any Participation Agreement shall be deemed to constitute a
contract of employment between the Corporation and the Participant, and neither
the Participant, his Beneficiary nor his estate shall have any rights against
TRW under the Plan except as may otherwise be specifically provided in the
Plan. Moreover, nothing in the Plan shall be deemed to give a Participant the
right to be retained in the service of the Corporation or to interfere with the
right of the Corporation to discipline, discharge or change the status of a
Participant at any time. Further, nothing in the Plan shall be deemed to give
a Participant a right to receive any Incentive Compensation.

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

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

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

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

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

16

 

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

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

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

8.14 Reliance on Certified Public Accountants. TRW, the Directors, the
Committee, the Special Committee, the Executive Vice President – Human
Resources and any employee of TRW or the Corporation shall be fully protected
for actions taken in good faith based on the computations and reports made
pursuant to or in connection with the Plan by the independent certified public
accountants who audit TRW’s accounts.

ARTICLE IX

CLAIMS PROCEDURE

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

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

9.3 Review of Claim. Any person whose claim or request is denied may make a
second request for review by notice given in writing to the Executive Vice
President – Human Resources. The claim or request shall be reviewed further by
the Executive

17

 

Vice President – Human Resources or the Committee, as
appropriate, and he or it may, but shall not be required to, grant the claimant
a hearing.

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

18EX-10(e)

 

Exhibit 10(e)

TRW BENEFITS EQUALIZATION PLAN

Amended and Restated

Effective October 23, 2002

1.     Purpose. The purpose of the TRW Benefits Equalization Plan (“BEP”), as
amended and restated effective October 23, 2002, is to provide supplemental
retirement and death benefits to those management and highly-compensated
employees of TRW Inc. and its subsidiaries (“TRW”) whose benefits under the TRW
Employee Stock Ownership and Savings Plan (the “Stock Savings Plan”) are
limited by reason of:

     a.     the limitations on compensation under §401(a)(17) of the Internal
Revenue Code of 1986 (“Code”);

     b.     the dollar limitations on elective deferrals under Code §402(g)(1);

     c.     the limitations on the amount that TRW can contribute as “TRW Matching
Contributions” as defined under the Stock Savings Plan without exceeding the
amount provided by Code §415(c)(1)(A); and

     d.     the exclusion of compensation otherwise included as “Compensation”
under the Stock Savings Plan due to the fact that (i) such compensation was
deferred under the provisions of the TRW Inc. Deferred Compensation Plan (“DC
Plan”) rather than received or (ii) a determination was made by TRW that such
inclusion could violate the regulations under Code §401(a)(4).

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

2. Eligibility. An employee who is employed at Operational Incentive Plan
(“OIP”) Level III or above during a calendar year or whose base pay and other
compensation paid or deferred in a calendar year exceeds the compensation
limitations of Code §401(a)(17) for such year will be eligible to participate
in the BEP for the immediately following calendar year provided he or she is
otherwise eligible, and has elected, to participate in the Stock Savings Plan
and has timely elected to participate in the BEP. An employee who has timely
elected to participate in the BEP will continue to be eligible to participate
in subsequent years even if the employee ceases to be employed at OIP Level III
or higher or ceases to have compensation in excess of the compensation limit of
Code §401(a)(17), subject to a determination by the Committee or its delegate
that the employee’s participation must cease in order to preserve the BEP’s
status as a plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.
An employee who fails to timely elect to participate in the BEP upon becoming
eligible will cease to be eligible to participate in the BEP if his or her base
pay and bonus paid (or deferred) falls below the compensation limit of Code
§401(a)(17) or if he or she ceases to be employed at OIP Level III or above.

 

 

3. Accounts.

     a.     An account (“Account”) shall be established in the name of each
eligible employee who has timely elected to participate (a “Participant”) into
which shall be credited the following amounts:

		
	 	     i. that percentage of the Participant’s current compensation which
the Participant elected to contribute to the Stock Savings Plan as
“Before-Tax Contributions” and that percentage of the Participant’s
current compensation which the Company would have contributed to the Stock
Savings Plan as “TRW Matching Contributions” (both terms as defined under
the Stock Savings Plan) to the extent that such amounts cannot be
contributed to the Stock Savings Plan due to any of the reasons identified
in Section 1; provided: (A) for a Participant who is eligible to make an
additional Before-Tax Contribution to the Stock Savings Plan pursuant to
Code §414(v), in determining the amount that may be contributed to the
Stock Savings Plan (for purposes of applying this Section 3.a.i), the
dollar limitation on elective deferrals under Code §402(g)(1) shall be
increased by the “applicable dollar amount” for the year as defined under
Code §414(v)(2)(B); (B) the percentage of the Participant’s compensation
credited to the Account, when combined with the percentage elected under
the Stock Savings Plan, may not at any time be greater than that amount of
“Before-Tax Contributions” which the Participant would be permitted to
contribute, as a highly-compensated Participant, to the Stock Savings Plan
without regard to the above-referenced limitations; and (C) the TRW
Matching Contributions credited to the Account shall be reduced by any
amounts actually contributed for the Participant by the Company to the
Stock Savings Plan as TRW Matching Contributions; plus

		
	 	     ii. investment performance on a daily basis on the amounts credited
under Section 3.a.i. above in accordance with the Participant’s election
as provided in Section 4 below; provided, however that interest and
dividend performance under PIMCO Total Return Fund and PRIMCO Stable Value
fund will be accrued daily and credited monthly.

     b.     The Participant’s annual election to participate in the BEP by having
his Account credited as provided in Section 3.a. shall be filed with Putnam
Fiduciary Trust Company (“Putnam”) in a prescribed manner and shall be filed at
such time as the Committee may specify, but in all cases prior to the time such
compensation is to be earned by the Participant. No changes in the percentage
of compensation credited to the Account shall be made during the calendar year
following the election, unless the Participant elects zero percent.

     c.     Participants shall have, at all times, a nonforfeitable interest in the
amounts credited to their Accounts, subject to the provisions of Section 6.e.

     d.     Participants shall receive, no less frequently than quarterly, a
statement of their Account within a reasonable period after the end of each
calendar quarter.

4. Earnings.

     a.     Each Participant in the BEP may elect to have monies credited to his
or her Account based upon the performance of the same investment fund options
offered to Participants under the Stock Savings Plan; provided, however, that
effective July 1, 2000, any changes to the investment funds offered to
participants under the Stock Savings Plan will result in a change to the
investment options available under the BEP only if and when such changes are
approved by the Chairman of the Board, the General Counsel and the Executive
Vice President – Human Resources of TRW; and provided further that the
self-directed brokerage

-2-

 

window to be offered to participants under the Stock
Savings Plan effective July 5, 2000, will not be made available as an
investment option under the BEP; such election may be made by allocating the
entire Account to one of the earnings options or by allocating the Account
between selected investment fund options in one percent multiples. Each
Participant may change his or her election on a daily basis with Putnam
through its online or automated voice response unit or through a BEP Customer
Service Representative. Subject to consummation of the merger (the “Merger”)
contemplated by the Agreement and Plan of Merger dated as of June 30, 2002 by
and among TRW, Northrop Grumman Corporation and Richmond Acquisition Corp.,
as may be amended from time to time (the “Merger Agreement”), each phantom
share of TRW Common Stock allocated to the account of a Participant in the
BEP as of the Effective Time (as defined in the Merger Agreement) shall be
converted into phantom shares of Northrop Grumman Common Stock at the
Exchange Rate (as defined in the Merger Agreement), and the TRW Stock Fund
under the BEP shall be converted into a Northrop Grumman Stock Fund.

     b.     All TRW Matching Contributions allocated to a Participant’s Account
will be credited in the same manner as the Participant’s election under Section
4.a.

5. Time of Payment.

     a.     Except as otherwise provided herein, payment of the Account to the
Participant (or, in the event of his death, to his beneficiary as designated in
writing to the Committee) shall be made as of the end of January following the
following events:

		
	 	     i. the Participant’s becoming disabled as defined by the terms and
conditions of the Stock Savings Plan;
	 
	 	     ii. the death of the Participant; or
	 
	 	     iii. the termination of the Participant’s employment with TRW through
retirement or otherwise.

     b.     Notwithstanding Section 5.a.iii., if the Participant’s termination of
employment is the result of the divestiture of the unit or operations of TRW
where the Participant worked prior to termination of employment and the
Participant obtains employment with the entity that acquired such operations
(“successor employer”), the BEP benefit shall not be payable until such
Participant’s termination of employment with the successor employer, except as
provided under Section 6.d.

     c.     Notwithstanding the above, the Directors/Committee, upon determining
that the Participant has suffered an emergency event beyond his control which
would impose an immediate and heavy financial hardship if the payment of his
benefits were not made, may pay to the Participant that part of his Account
which is needed to satisfy such hardship. Further, for purposes of Section
5.a.iii, a Participant’s employment with TRW 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 TRW employment)
or the date on which the Participant retires under any TRW-sponsored pension
plan.

6. Payment of Benefits.

     a.     Subject to Section 6.b., the automatic form of payment of monies in the
Account in the event of a termination of employment due to retirement shall be
ten equal annual installments, payable during the month of January.
Notwithstanding the foregoing, a Participant may petition (prior to the
consummation of the Merger) the Directors or the Committee or elect

-3-

 

(after
consummation of the Merger), by notice to Putnam, at any time at least two
months prior to the Participant’s eligibility for payout from the Stock Savings
Plan to change such payment to any lesser number of annual installments or to a
single sum. If annual installments are paid, the balance of the Account shall
continue to be credited with investment performance as previously elected by
the Participant in accordance with Section 4. The form of payment of monies in
the Account for a termination of employment other than retirement shall be a
single sum, payable during the month of January following termination of
employment. If a Participant’s employment terminates due to layoff, payment of
monies in his Account will be made in a single sum during the month of January
following the end of the 12-month period following layoff; provided, however,
that if a Participant retires during the 12-month period following layoff,
payment will be made in accordance with the automatic form of payment for
retirements. The form of payment of monies in the Account in the event that a
Participant’s termination of employment occurs due to his death shall be a
single sum, payable during the month of January following the Participant’s
date of death; provided, however, that if a participant shall die while
receiving retirement installments, installments shall continue to the
beneficiary or estate until the Account is completely paid out.

     b.     Upon approval by the Directors/Committee, any election of a form of
payment other than the automatic form of payment for a retirement provided in
this Section shall be irrevocable.

     c.     Payment of the Account shall be made in the form of cash unless the
Directors/Committee determines in its discretion that it is appropriate to pay
that portion of the Participant’s Account attributable to TRW Matching
Contributions and earnings thereon in shares of TRW common stock, in which
event such distribution of shares shall occur no earlier than six months
following the date that the Participant is last employed by TRW.

     d.     If the balance in the Participant’s Account under the BEP, determined
as of any of the events described in Section 5.a. above or following payment of
any retirement installment payment, is less than $5,000, said Account balance
shall automatically be paid out in a single sum in the first January following
said event or installment payment.

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

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

8.     Directors/Committee. For purposes of the BEP, “Directors” shall mean the
Compensation Committee of the Directors of TRW Inc. with respect to the
approval of benefits of any Participant who is, or ever was, either a Director
of TRW, a member of the Chief Executive Office, or a member of the Management
Committee. With respect to the approval of benefits of other Participants,
“Committee” shall refer to a Special Committee consisting of those three
employees of TRW Inc. who occupy the most senior positions in the Company Staff
Finance,

-4-

 

Human Resources, and Law Departments. The Committee or its delegate
shall interpret the provisions of the BEP, determine the rights and status of
Participants and beneficiaries hereunder, and handle the general administration
of the BEP. The Committee or its delegate may determine that an employee’s
participation in the BEP must cease in order to preserve the BEP’s status as a
plan maintained primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees and may take
such action as it deems appropriate in connection with such a determination.
Such interpretations and determinations shall be final and conclusive as to all
interested persons.

9.     Claims Procedure. If a claim for a BEP benefit is denied, in whole or in
part, a written notice of denial provided to the Participant shall state the
reasons for denial, a description of any additional material or information
required; and an explanation of the claim review procedure. Any person whose
claim, upon his written request for review, is again denied may make a second
request for review. A decision on such second request shall normally be made
within sixty days.

10.     Amendment and Termination. Nothing herein shall be construed to constitute
a contract between TRW and the Participants to continue the BEP, and TRW Inc.’s
Directors in their sole discretion may terminate or discontinue the BEP at any
time and may at any time and from time to time amend any or all of its
provisions; provided, however, that no termination or amendment shall reduce
amounts credited prior to such termination or amendment.

11. Miscellaneous Provisions.

     a.     As used in this document, the masculine gender shall include the
feminine and the singular shall include the plural. To the extent that any
term is not defined under the BEP, it shall have the same meaning as defined in
the Stock Savings Plan.

     b.     Employment rights with TRW shall not be enlarged or affected by the
existence of the BEP.

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

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

-5-

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