Document:

EX-10(b)

 

Exhibit 10(b)

AMENDMENT NO. 1 TO [AMENDED AND RESTATED]

EMPLOYMENT CONTINUATION AGREEMENT

     This AMENDMENT NO. 1 TO [AMENDED AND RESTATED] EMPLOYMENT CONTINUATION
AGREEMENT is made and entered into as of the      day of                , 2002, by TRW
INC., an Ohio corporation (the “Company”), and                (the “Executive”).

W I T N E S S E T H :

     WHEREAS, the Company and Executive have previously entered into an
[Amended and Restated] Employment Continuation Agreement dated as of February
28, 2002 (the “Agreement”); and

     WHEREAS, the Board of Directors of the Company has determined that it is
in the best interests of the Company and its shareholders to further amend the
Agreement; and

     WHEREAS, Section 11 of the Agreement authorizes its modification in a
writing signed by both Executive and of the Company;

     NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound hereby, the Company and the
Executive hereby amend the Agreement as follows:

     1.     Defined Terms in Amendment; Headings. The definitions of capitalized
terms used in the Amendment will be the same as are set forth in the Agreement
except as amended herein. Headings used in the Amendment are provided for
reference and convenience only, shall not be considered part of the Amendment,
and shall not be employed in the construction of the Amendment.

     2.     The following Section is added as Section [19] of the Agreement:

	 	 	 	[19.] Deferral of Compensation. Notwithstanding any provisions
of the Agreement to the contrary, to the extent the Executive
submits an effective Participation Agreement/Election Form (a
“Deferral Election”) in accordance with the terms of the TRW
Employment Continuation Agreement Deferred Compensation Plan (the
“Plan”), the Executive irrevocably (subject to the conditions
contained in such Deferral Election) elects to defer payment of
the compensation specified in such Deferral Election that would
otherwise become payable under the Agreement within five business
days after the Termination Date.

 

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first set forth above.

	 	 
	 	TRW INC
	 
	 	By:
	 	

        Name

	 	        Title
	 
	 	 

[Executive]

2EX-10(c)

 

Exhibit 10(c)

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS OF TRW INC.

 
 

Amended and Restated as of:

October 23, 2002

 

 

Deferred Compensation Plan

for Non-Employee Directors of TRW Inc.

	 	 	 	 	 	 	 
	 	 	Table of Contents	 	 	 	 
	 	 		 	 	 	 
	 	 	 	 	Page
	 	 	 	 	

	Section 1.	 	
Effective Date
	 	 	1	 
	Section 2.	 	
Purpose
	 	 	1	 
	Section 3.	 	
Eligibility
	 	 	1	 
	Section 4.	 	
Administration
	 	 	1	 
	Section 5.	 	
Deferral of Compensation
	 	 	2	 
	Section 6.	 	
Effect of Deferral Elections
	 	 	3	 
	Section 7.	 	
Deferred Compensation Account
	 	 	4	 
	Section 8.	 	
Value of Deferred Compensation Accounts
	 	 	5	 
	Section 9.	 	
Distribution of Account
	 	 	5	 
	Section 10.	 	
Acceleration of Account Distribution
Due to Unforeseeable Emergency
	 	 	7	 
	Section 11.	 	
Death of Eligible Director;

Distribution of Account Balance
	 	 	8	 
	Section 12.	 	
Acceleration of Account Distribution
Due to Change in Control
	 	 	8	 
	Section 13.	 	
Eligible Directors’ Rights Unsecured
	 	 	10	 
	Section 14.	 	
Assignability
	 	 	11	 
	Section 15.	 	
Amendment
	 	 	11	 

 

 

Section 1. Effective Date.

     The effective date of the Deferred Compensation Plan for Non-Employee
Directors of TRW Inc. (the “Plan”) is July 1, 1997 (the “Effective Date”).

Section 2. Purpose.

     The purposes of the Plan are to align a significant portion of Director
compensation with creating and sustaining shareholder value and to attract and
retain a diverse and truly superior Board of Directors. The Plan is intended
to serve as the mechanism that will allow each eligible Director to defer all
or a portion of the compensation otherwise payable to him or her for his or her
services to TRW Inc. (the “Company”).

Section 3. Eligibility.

     Each Director of the Company who is not an employee of the Company or of
one of its subsidiaries shall be eligible to, and shall participate in, the
Plan (the “Eligible Director”). Following the Effective Date of the Plan, (i)
a non-employee Director will be deemed an Eligible Director as of the effective
date of his or her election as a Director of the Company, and (ii) an employee
Director will be deemed an Eligible Director as of the date he or she ceases to
be an employee of the Company or of one of its subsidiaries but continues to be
a Director, in accordance with the provisions of the Directors’ retirement
policy as amended from time to time. Eligibility to receive and defer
compensation pursuant to this Plan will cease upon the earlier of the Eligible
Director’s termination of service as a Director of the Company or upon his or
her death.

Section 4. Administration.

     The Plan shall be administered by a committee (the “Committee”) consisting
of the following three officers of the Company: the Executive Vice President
and Chief

 

 

Financial Officer, the Executive Vice President and General Counsel,
and the Executive Vice President of Human Resources. The Committee shall have
the power to (i) determine all questions of fact or interpretation regarding
Plan provisions; (ii) adopt rules, regulations and procedures deemed necessary
and appropriate to carry out the Plan’s operation; and (iii) maintain or cause
to be maintained necessary and appropriate records. The Committee’s
determinations on questions of fact or interpretation of Plan provisions will
be binding on all parties.

     The Committee may delegate its authority to carry out specific
responsibilities given to it under the Plan.

Section 5. Deferral of Compensation.

     (a)  Automatic Deferral. One-half (50 percent) of the annual retainer,
exclusive of any retainer paid for chairing a Committee of the Directors, (the
“Base Annual Retainer”) otherwise payable by the Company to an Eligible
Director for his or her services to the Company on or after the Effective Date,
will be automatically deferred in equivalent shares of TRW Common Stock (the
“Automatic Deferral”) under the Plan. The shares will be held in trust for the
Eligible Director’s benefit.

     (b)  Elective Deferral. In addition to the Automatic Deferral described
above, an Eligible Director may elect to defer all or a portion of the
remaining 50 percent of his or her Base Annual Retainer (the “Elective
Deferral”), expressed either as a dollar amount or as a percentage, and any
retainer that he or she may receive for chairing one of the Committees of the
Directors of the Company (together, the “Available Retainer”), as well as any
additional compensation set for committees, assignments or the performance of
special projects.

     With respect to the initial elections under the Plan for 1997, an Eligible
Director may elect to defer all or any portion of the Available Retainer for
services to

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be performed on or after the Effective Date, by completing a deferral election
form prescribed by the Secretary of the Company (the “Secretary”) and returning
it to the Secretary with the following effect: (i) on or before June 13, 1997
for effect as of July 1; (ii) on or before July 15, 1997 for effect by August
1; and (iii) on or before July 31, 1997 for effect September 1.

     An Eligible Director who (i) is elected a Director of the Company
following the Effective Date of the Plan or (ii) ceases to be an employee of
the Company or one of its subsidiaries but continues to be a Director may
choose to defer all or any portion of the Available Retainer for his or her
subsequent services to the Company, provided that the prescribed deferral
election form is delivered to the Secretary within 30 days after the effective
date of the Eligible Director’s (i) election as a Director of the Company or
(ii) change in employment status.

     For years subsequent to 1997, an Eligible Director who elects to defer all
or a portion of the Available Retainer must execute the prescribed election
form and deliver it to the Secretary prior to the first day of the calendar
year for which the election is to be effective. If the Director becomes
eligible to participate in the Plan during the calendar year, the prescribed
deferral election form must be delivered to the Secretary within 30 days after
the effective date of the Eligible Director’s (i) election as a Director of the
Company or (ii) change in employment status.

Section 6. Effect of Deferral Elections.

     Deferral elections, expressed either as a dollar amount or as a
percentage, made under this Plan with respect to any calendar year may not be
amended or revoked after the beginning of the calendar year with respect to
compensation to be received for services performed during that calendar year.

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Section 7. Deferred Compensation Account.

     As of the Effective Date of the Plan, or the effective date of the
Director’s eligibility, as appropriate, the Company shall establish an unfunded
deferred compensation account (the “Account”) for each Eligible Director
consisting of an Automatic Deferral portion and an Elective Deferral portion,
if any.

     (a)  Automatic Deferral Portion. The Company will establish a trust
account for the benefit of the Eligible Directors. On the first business day
of each month, the Company will transfer to the trustee of the trust account
one-twelfth (1/12) of the amount of each Eligible Director’s Automatic
Deferral, to be used by the trustee to purchase equivalent shares of TRW Common
Stock that will be held in the trust account. The trustee will participate in
the Company’s Dividend Reinvestment Plan, and all cash dividends will be
reinvested in TRW Common Stock for the Eligible Directors’ benefit.

     (b)  Elective Deferral Portion. This portion of the Eligible Director’s
Account will consist of (i) amounts rolled over from the Eligible Director’s
Account under the former Deferred Compensation Plan for Non-Employee Directors
of TRW Inc., if applicable, and (ii) any portion of the Available Retainer that
the Eligible Director elects to defer. These amounts will be held in phantom
accounts and indexed to the performance of one or more investment funds
established under The TRW Employee Stock Ownership and Stock Savings Plan (the
“Stock Savings 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 share of
TRW Common Stock allocated to the account of an Eligible Director 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

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Merger Agreement), and the TRW Stock Fund under the
Plan shall be converted into a Northrop Grumman Stock Fund.

     Allocation of the Elective Deferral portion of the Eligible Director’s
Account to any of the available investment funds must be made in increments of
1 percent. The Eligible Director’s allocation choices shall be implemented as
soon as practicable, in the sole discretion of the Committee.

     Subject to any restrictions imposed by Section 16(b) of the Securities
Exchange Act of 1934, the Eligible Director may, at any time, (i) change his or
her allocation choices with respect to future Elective Deferrals or (ii)
reallocate the hypothetical investment earnings in the existing Elective
Deferral portion of his or her Account. Changes or reallocations so made must
also be in increments of 1 percent.

     The Committee shall have the right to substitute investment fund choices
for the Elective Deferral portion of the Accounts from time to time, without
adversely affecting existing accruals in the Eligible Directors’ Accounts.

     Hypothetical investment earnings shall continue to accrue until the
Eligible Director’s Account is fully distributed.

Section 8. Value of Deferred Compensation Accounts.

     The value of each Eligible Director’s Account shall reflect all amounts
deferred, including gains and losses from the hypothetical investments, and
shall be determined on the last day of each month (the “Valuation Date”). The
value of hypothetical investments in the Stock Savings Plan shall be based upon
the valuation date under the Stock Savings Plan coincident with or immediately
preceding such Valuation Dates.

     The amount in an Eligible Director’s Account as of each Valuation Date
that has not been previously deemed invested shall be deemed invested in a
hypothetical

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investment on such date, based on the value of the hypothetical
investment on such date.

Section 9. Distribution of Account.

     No distributions may be made from an Eligible Director’s Account, except
as provided in this Section and Sections 11 and 12.

     (a)  Automatic Deferral Portion. Automatic Deferral amounts and earnings
from the Company’s Dividend Reinvestment Plan credited to an Account shall be
distributed, beginning as soon as practicable, after the Eligible Director
ceases to hold office as a Director of the Company. The distribution shall be
made in whole shares of TRW Common Stock, valued at the fair market value of a
share of TRW Common Stock on the date of distribution. The Eligible Director
shall specify, at the time set forth in Section 5 for making Elective
Deferrals, how distribution is to be made with respect to this portion of his
or her Account:

		
	 	     (1) as a single payment, with any fractional shares being paid in
cash; or

		
	 	     (2) in regular annual installments payable over a period not to
exceed 10 years, with fractional shares paid in cash at the
time
          of
the final installment payment.

     (b)  Elective Deferral Portion. Elective Deferral amounts and the relevant
hypothetical investment earnings credited to an Account shall be distributed in
accordance with the instructions given to the Secretary by the Eligible
Director at the time of his or her election to defer all or a portion of the
Available Retainer and may begin as of:

		
	 	     (1) the date the Eligible Director ceases to hold office as a
Director of the Company;

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	 	     (2) the date the Eligible Director reaches an age at which he or
she may earn unlimited amounts without penalty under the
          Social
Security Act and the regulations promulgated thereunder; or
	 
	 	     (3) such other date specified by the Eligible Director on the
election form (at least two years from the date deferral of
          compensation begins).

Distribution of an Account may be made as a single payment or in regular annual
installments over a period of not more than 10 years.

     All distributions from the Elective Deferral portion of the Account will
be made in cash, denominated and payable in United States dollars, equal to the
amounts deferred and any gains or losses on those amounts, based on the
performance of the investment funds to which the Eligible Director allocated
his or her deferred compensation.

     The Eligible Director may change his or her Elective Deferral distribution
instructions by subsequent written notice to the Secretary, but any such change
will apply only to future deferrals. If an Eligible Director should fail to
give the Secretary instructions as to the type of distribution preferred, his
or her Account will be distributed as a single payment as soon as practicable
following the date on which he or she ceases to hold office as a Director of
the Company.

Section 10. Acceleration of Account
Distribution Due to Unforeseeable Emergency.

     An Eligible Director will be permitted to receive distribution of all or a
part of the Elective Deferral portion of his or her Account if the Committee
determines that an unforeseeable emergency has occurred. An unforeseeable
emergency is one that is caused by an event beyond the Eligible Director’s
control and that would cause severe financial hardship to him or her if the
distribution of all or a part of the Elective

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Deferral portion of his or her
Account were not approved. Any distribution approved under this provision
shall be limited to the amount deemed necessary to meet the emergency.

Section 11. Death of Eligible Director; Distribution of Account Balance.

     In the event of the death of an Eligible Director before he or she has
received full distribution of his or her Account, the value of the Account
balance remaining to be distributed shall be determined as of the Valuation
Date coincident with or immediately following the Eligible Director’s death.
The Account balance shall, as soon as practicable, be distributed in a single
payment to the beneficiary or beneficiaries designated by the Eligible
Director. In the event that an Eligible Director has failed to name a
beneficiary, his or her Account balance shall be distributed to his or her
estate.

Section 12. Acceleration of Account Distribution Due to Change in Control.

     In the event of a change in control of the Company, an Eligible Director’s
Account balance may become subject to immediate distribution in accordance with
the Eligible Director’s election instructions; provided, however, that the
Eligible Director specifically stipulated on his or her election form that such
accelerated payout be made. An Eligible Director may, by subsequent written
notice to the Secretary, change his or her election with respect to whether an
accelerated payout be made with respect to the Automatic and/or Elective
Deferral portions of his or her account, subject to a determination by the
Company that such a change would not affect the deferral of compensation in
taxable income under applicable law. Such subsequent election may be made
separately for the Automatic and Elective Deferral portions of his or her
account and if made would serve to supersede all prior elections related to
accelerated payout in the event of a change in control with respect to each of
the Automatic and the Elective Deferral portions of his or her account. For
purposes of this Plan, a change in control, as defined in resolutions adopted
by the Compensation

-8-

 

Committee of the Directors of the Company on February 28,
2002, will be deemed to have occurred if:

		
	 	     (i) The Company or any direct or indirect subsidiary
of the Company is merged or consolidated or reorganized
into or with another corporation or other legal person and
as a result of such merger, consolidation or reorganization
the securities of the Company entitled to vote generally in
the election of Directors (“Voting Stock”) outstanding
immediately prior to such merger, consolidation or
reorganization do not continue to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof)
at least 51% of the combined voting power of the securities
of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger,
consolidation or reorganization;

		
	 	     (ii) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or
other legal person if less than 51% of the combined voting
power of the then-outstanding Voting Stock of such
corporation or person immediately after such sale or
transfer is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale or
transfer;

		
	 	     (iii) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report),
each as promulgated pursuant to the Securities Exchange Act
of 1934 (the “Exchange Act”), disclosing that any person
(as the term “person” is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has acquired
beneficial ownership (as the term “beneficial ownership” is
defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of
securities representing 20% or more of the then-outstanding
Voting Stock of the Company, other than pursuant to any
acquisition of securities by the Company or any of its
subsidiaries;

		
	 	     (iv) The Company shall file a report or proxy
statement with the Securities and Exchange Commission
pursuant to the Exchange Act disclosing in response to Item
1 of Form 8-K thereunder or Item 6(e) of Schedule 14A
thereunder (or any successor schedule, form or report or item

-9-

 

		
	 	     therein) that a change in control of the Company has
occurred; or

		
	 	     (v) The following individuals cease for any reason to
constitute at least a majority of the number of directors
then serving: individuals who, on February 28, 2002,
constitute the Directors of the Company and any new
Director of the Company (other than a Director of the
Company (A) whose initial assumption of office is in
connection with an actual or threatened election contest,
including but not limited to a consent solicitation,
relating to the election of Directors of the Company and
(B) who was nominated as a Director of the Company by a
person other than the Company) whose appointment, election
or nomination for election by the Company’s shareholders
was approved or recommended by a vote of at least
two-thirds of the Directors of the Company then still in
office who were Directors of the Company on February 28,
2002 or whose appointment, election or nomination for
election was previously so approved or recommended.

		
	 	     Notwithstanding the foregoing provisions of clauses
(iii) and (iv) above, a Change in Control shall not be
deemed to have occurred solely because (A) the Company, (B)
an entity in which the Company directly or indirectly
beneficially owns more than 50% of the voting securities or
(C) any Company-sponsored employee stock ownership plan or
any other employee benefit plan of the Company, or any
entity holding shares of Voting Stock for or pursuant to
the terms of any such plan, either files or becomes
obligated to file a report or a proxy statement under or in
response to Schedule 13D, Schedule 14D-1, Item 1 of Form
8-K or Item 6(e) of Schedule 14A (or any successor
schedule, form or report or item therein) under the
Exchange Act, disclosing beneficial ownership by it of
shares of Voting Stock of the Company, whether in excess of
20% or otherwise, or because the Company reports that a
change in control of the Company has occurred by reason of
such beneficial ownership by the entities described in
clauses (A), (B) and (C) of this paragraph.”

-10-

 

Section 13. Eligible Directors’ Rights Unsecured.

     This Plan is deemed unfunded for tax purposes and is not governed by the
Employee Retirement Income Security Act of 1974. Consequently, for purposes of
this Plan, no assets shall be segregated and placed beyond the reach of the
Company’s general creditors. The right of an Eligible Director to receive
future installments under the provisions of this Plan shall be an unsecured
claim against the general assets of the Company. Accordingly, the Eligible
Directors will have the status of general unsecured creditors of the Company,
and the Plan constitutes a mere promise by the Company to make Account
distributions in the future.

Section 14. Assignability.

     The right of the Eligible Director, or of his or her beneficiary, to
receive distribution of his or her Account pursuant to the provisions of this
Plan are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of the
Eligible Director, or of his or her beneficiary, except by will or by the laws
of descent and distribution.

Section 15. Amendment.

     This Plan may at any time or from time to time be amended, modified or
terminated by the Directors or the Executive Committee of the Directors of the
Company. No amendment, modification or termination shall adversely affect an
Eligible Director’s Account, without his or her consent. Notwithstanding any
provision to the contrary in this Section 15, 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 Eligible Directors 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 Eligible Directors as of June 30,
2002 (it being understood that the elimination of any

-11-

 

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

-12-

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