Document:

Form of Director Indemnification Agreement

 Exhibit 10.2 
 INDEMNIFICATION AGREEMENT 
 THIS AGREEMENT is made as of this
         day of April, 2006 between The Colonial BancGroup, Inc., a Delaware corporation (the “Corporation”), and
                                        
(“Director”). 
 WITNESSETH THAT: 
 WHEREAS, Director is a member of, or is willing to become a member of, the Board of Directors of the Corporation and in such capacity is, or will be, performing a valuable service for the Corporation; and 

WHEREAS, Section 145 of the Delaware General Corporation Law (the “State Statute”) specifically provides that it is not exclusive, and
thereby contemplates that contracts may be entered into between the Corporation and the members of its Board of Directors with respect to indemnification of such directors; and 
 WHEREAS, in accordance with the authorization provided by the State Statute, the Corporation has purchased and presently maintains a policy or policies
of directors and officers liability insurance (“D&O Insurance”), covering certain liabilities which may be incurred by its directors and officers in the performance of their services for the Corporation; and 
 WHEREAS, in order to resolve questions regarding the adequacy and reliability of the protection afforded to directors by the Corporation and thereby
induce Director to serve or to continue to serve as a member of the Board of Directors of the Corporation, the Corporation has determined and agreed to enter into this Agreement with Director; 
 NOW, THEREFORE, in consideration of Director’s continued service as a Director after the date hereof, the parties hereto agree as follows:

 1. Indemnity of Director. In addition to the indemnity provided in Section 3 hereof, the Corporation hereby agrees to hold
harmless and indemnify Director to the fullest extent authorized or permitted by the provisions of the State Statute, or by any amendment thereof or other statutory provisions authorizing or permitting such indemnification which is adopted after the
date hereof, provided that no such indemnification is required to the extent that D&O Insurance is available to provide in full the indemnification to which Director would otherwise be entitled pursuant to this Section 1. 
 2. Maintenance of Insurance and Self-Insurance. (a) The Corporation represents that it presently has in force and effect policies of D&O
Insurance with insurance companies. Subject only to the provisions of Section 2(b) hereof, the Corporation hereby agrees that, so long as Director shall continue to serve as a director of the Corporation and thereafter so long as a Director
shall be subject to any possible claim 

 
or threatened, pending or completed action, suit or proceeding, whether civil, criminal or investigative, by reason of the fact that Director was a director
of the Corporation, the Corporation will purchase and maintain in effect for the benefit of Director one or more valid, binding and enforceable policy or policies of D&O Insurance. 
 (b) The Corporation shall not be required to maintain said policies of D&O Insurance in effect if said insurance is not reasonably available or if,
in the reasonable business judgment of the directors of the Corporation then in office, either (i) the premium cost for such insurance is substantially disproportionate to the amount of coverage or (ii) the coverage provided by such
insurance is so limited by exclusions or otherwise that there is insufficient benefit from such insurance. 
 3. Additional Indemnity.
(a) Subject only to the exclusions set forth in Section 4 and the limitations set forth in Section 6 hereof, the Corporation hereby further agrees to hold harmless and indemnify Director against any and all expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Director in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of or upon election by the Corporation) to which Director is, was, or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Director is, was, or at any time
becomes a director, officer, employee or agent of the Corporation, or is or was serving or at any time serves at the request of or upon election by the Corporation as a director, officer, employee or agent of another corporation, partnership,
employee benefit plan, joint venture, trust or other enterprise. 
 (b) For purposes of this Agreement, “expenses” means all costs,
charges and expenses incurred in connection with any threatened, pending, or completed proceeding, action or suit, whether civil or criminal, administrative or investigative (including an action by or in the right of or upon election by the
Corporation), including, without limitation, attorneys’ fees, disbursements and retainers, accounting and witness fees, travel and deposition costs, expenses of investigation, judicial or administrative proceedings or appeals, and any expenses
of establishing a right to indemnification pursuant to this Agreement or otherwise, including reasonable compensation for time spent by the Director in connection with the investigation, defense or appeal of any proceeding or action for
indemnification for which he is not otherwise compensated by the Corporation or any third party; provided, however, that the term “expenses” includes only those costs, charges and expenses incurred with the Corporation’s consent,
which consent shall not be unreasonably withheld; and provided further, that the term “expenses” does not include the amount of damages, judgments, amounts paid in settlement, fines, penalties or excise taxes under the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), actually levied against the Director or paid by or on behalf of the Director. 
  

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 4. Exclusions on Additional Indemnity. No indemnity pursuant to Section 3 hereof shall be
paid by the Corporation: 
 (a) except to the extent the aggregate of losses to be indemnified thereunder exceeds the amount of such losses
for which Director is indemnified either pursuant to Section 1 hereof or pursuant to any D&O Insurance purchased and maintained by the Corporation; 
 (b) on account of Director’s conduct which is finally adjudged as resulting in an unlawful personal benefit; 
 (c) on account of any suit in which judgment is rendered against Director for an accounting of profits made or otherwise in connection with the purchase or sale by Director of securities of the Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; 
 (d) on account of Director’s conduct which is finally adjudged as constituting active or deliberate dishonesty or willful fraud or illegality; 
 (d) on account of any action initiated or brought voluntarily by the Director and not by way of defense, except with respect to actions brought pursuant
to Section 10(b) hereof; 
 (f) if a final decision by a Court having jurisdiction in the matter shall determine that such
indemnification is not lawful. 
 5. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein
shall continue during the period Director is a director, officer, employee or agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise) and shall continue thereafter so long as Director shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal or investigative, by reason of the
fact that Director was a director of the Corporation or serving in any other capacity referred to herein. 
 6. Notification and Defense
of Claim. Promptly after receipt by Director of notice of the commencement of any action, suit or proceeding, Director will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the
commencement thereof; but the omission so to notify the Corporation will not relieve the Corporation from any liability which it may have to Director otherwise than under this Agreement. With respect to any such action, suit or proceeding as to
which Director notifies the Corporation of the commencement thereof: 
 (a) the Corporation will be entitled to participate therein at its own
expenses; 
 (b) except as otherwise provided below, to the extent that it may wish, the Corporation jointly with any other indemnifying
party similarly notified will be entitled to assume the defense thereof, with counsel satisfactory to the Corporation. After written 

  

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notice from the Corporation to Director of its election so to assume the defense thereof, the Corporation will not be liable to Director under this Agreement
for any legal or other expenses subsequently incurred by Director in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Director shall have the right to employ his counsel in such action,
suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Director unless (i) the employment of counsel by Director has been
authorized in writing by the Corporation, (ii) Director shall have reasonably concluded that there may be a conflict of interest between the Corporation and Director in the conduct of the defense of such action or (iii) the Corporation
shall not in fact have employed counsel to assume the defense of such action, in each of which cases the expenses of counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit
or proceeding brought by or on behalf of the Corporation or as to which Director shall have made the conclusion provided for in (ii) above; and 
 (c) the Corporation shall not be liable to indemnify Director under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Corporation shall not settle any
action or claim in any manner which would impose any penalty or limitation on Director without Director’s written consent. Neither the Corporation nor Director will unreasonably withhold its consent to any proposed settlement. 
 7. Repayment of Expenses; Advances. (a) Director agrees that Director will reimburse the Corporation for all reasonable expenses paid by the
Corporation in defending any civil or criminal action, suit or proceeding against Director in the event and only to the extent that it shall be ultimately determined that Director is not entitled to be indemnified by the Corporation for such
expenses under the provisions of the State Statute, this Agreement or otherwise. 
 (b) Expenses incurred by Director in any action, suit or
proceeding to which the Director is entitled to be indemnified hereunder shall be paid promptly by the Corporation in advance of the final disposition of such proceeding at the written request of the Director to the fullest extent permitted by
Delaware law; provided that the Director shall undertake in writing to repay such amount to the extent that it is ultimately determined that the Director is not entitled to indemnification by the Corporation. 
 8. Partial Indemnification. If the Director is entitled under any provision of this Agreement to indemnification by the Corporation for some or a
portion of the expenses, damages, judgments, amounts paid in settlement, fines, penalties or ERISA excise taxes actually and reasonably incurred by Director in the investigation, defense, appeal or settlement of any action, suit or proceeding but,
however, for the total amount thereof, the Corporation shall nevertheless indemnify the Director for the portion of such expenses, damages, judgments, amounts paid in settlement, fines, penalties or ERISA excise taxes to which the Director is
entitled. 
  

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 9. Burden of Proof; Standards of Conduct. In connection with any determination as to whether a
Director is entitled to be indemnified under Section 1 hereof, the burden of proof shall be on the Corporation to establish that Director is not so entitled. The Director shall be conclusively presumed to have met the relevant standards of
conduct required by Delaware law for such indemnification, unless a determination is made that the Director has not met such standards (i) by the Board of Directors of the Corporation by a majority vote of the directors who were not parties to
the proceeding for which the Director is to be indemnified, even though less than a quorum, or (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (iii) if there are no
such directors, or if such directors so direct, in a written opinion of independent legal counsel, the selection of whom has been approved by the Director in writing, or (iv) by the stockholders of the Corporation by majority vote. The failure
of the directors or stockholders of the Corporation or independent legal counsel to have made a determination that indemnification or advancement of expenses under the State Statute is proper in the circumstances because the Director has met the
applicable standard of conduct shall not be a defense to the action or create a presumption that the Director has not met the applicable standard of conduct. If a determination is made that the Director is not entitled to indemnification under the
State Statute, any judicial proceeding commenced by the Director to enforce this Agreement shall be conducted in all respects as a de novo trial on the merits, and the Director shall not be prejudiced by reason of that adverse determination.

 10. Enforcement. (a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on the Corporation hereby in order to induce Director to become or to continue as a director of the Corporation, and acknowledges that Director is relying upon this Agreement. 
 (b) If a claim under this Agreement is not paid by or on behalf of the Corporation within 30 days after receipt of written notice thereof, Director may
at any time thereafter bring suit in any court of competent jurisdiction against the Corporation to enforce the right to indemnification provided by this Agreement. In the event Director is required to bring any action to enforce rights or to
collect moneys due under this Agreement, the Certificate of Incorporation, the State Statute or otherwise, regardless of whether the Director is successful in such action, the Corporation shall reimburse Director for all of Director’s
reasonable fees and expenses in bringing and pursuing such action, unless a court of competent jurisdiction determines that each of the material claims made by the Director in such action was not made in good faith and was frivolous. 
 11. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses provided by this Agreement shall not be deemed to
limit or preclude any other rights to which the Director may be entitled under the Certificate of Incorporation, the Bylaws, any agreement, any vote of stockholders or disinterested directors, the State Statute, or otherwise, both as to action in
Director’s official capacity and as to action in any other capacity on behalf of the Corporation while holding such office. 
  

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 12. Separability. Each of the provisions of this Agreement is a separate and distinct agreement
and independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof.

 13. Governing Law; Binding Effect; Amendment and Termination. (a) This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware. 
 (b) This Agreement shall be binding upon and shall inure to the benefit of (i) the
Director and Director’s heirs, personal representatives, executors, administrators and assigns and (ii) the Corporation and its successors and assigns, including any transferee or all or substantially all of the Corporation by merger or by
operation of law. 
 (c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing
signed by both parties hereto. The indemnification afforded to Director hereby is a contract right and may not be diminished, eliminated or otherwise affected with amendments to the Corporation’s Certificate of Incorporation, Bylaws or
agreements, including any directors and officers liability insurance policies, whether the alleged actions or conduct giving rise to the indemnification hereunder arose before or after any such amendment. No waiver of any provision of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof, whether or not similar, nor shall any waiver constitute a continuing waiver. 
 14. Notice. All notices and communications pursuant to this Agreement shall be in writing and shall be deemed duly given on the date of delivery if personally delivered or on the date or receipt or refusal
indicated on the return receipt if sent by first class mail, postage prepaid, registered or certified, return receipt requested to the following addresses, unless notice of a change of address is duly given by one party to the other, in which case
notices shall be sent to such changed address: 
  

							
	If to the Corporation:	 		 	
				
		 	The Colonial BancGroup, Inc.	 		 	
		 	Post Office Box 1108	 		 	
		 	Montgomery, Alabama 36101	 		 	
				
		 	Attention: Secretary	 		 	
	If to Director:	 		 		 	
				
		 	  
	 		 	
		 	  
	 		 	
		 	  
	 		 	

  

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 15. Subrogation. In the event of any payment under this Agreement to or on behalf of Director, the
Corporation shall be subrogated to the extent of such payment to all of the rights or recovery of Director against any person, firm, corporation or other entity (other than the Corporation) and Director shall execute all papers requested by the
Corporation and shall do any and all things that may be necessary or desirable to secure such rights for the Corporation, including the execution of such documents necessary or desirable to enable the Corporation to effectively bring suit to enforce
such rights. 
 16. Headings. The headings used herein are for convenience only and shall not be used in construing or interpreting
any provision of this Agreement. 
 17. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to the other. 
 18. Subject Matter and Parties. This Agreement supercedes any prior agreements between the parties relating to the same subject matter. The intended purpose of this Agreement is to provide for indemnification
and advancement of expenses, and this Agreement is not intended to affect any other aspect of any relationship between Director and the Corporation and is not intended to and shall not create any rights in any person as a third party beneficiary
hereunder. 
 [Signatures appear on the following page] 
  

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

			
	THE COLONIAL BANCGROUP, INC.
		
	By:	 	  

		 	Robert E. Lowder
		 	 Chairman of the Board of Directors,
 Chief Executive
Officer and President

		
		 	  

		 	Director

  

 8Northrop Grumman 2006 Annual Incentive Plan and Incentive Compensation Plan

 Exhibit 10.2 
 NORTHROP GRUMMAN 2006 ANNUAL INCENTIVE PLAN 
 AND 
 INCENTIVE COMPENSATION PLAN (for NON-SECTION 162(m) OFFICERS) 
 SECTION I 
 PURPOSE 
 Northrop Grumman has an annual incentive program to promote the success of the Company and render its operations profitable to the maximum extent by providing incentives to key employees. Participating employees have varying degrees of
impact on the overall success and performance of the Company. To facilitate the appropriate incentive level for each Participant, Northrop Grumman utilizes two incentive plans that use common financial and business performance criteria: 

 

	 	•	 	The Incentive Compensation Plan (ICP) 

  

	 	•	 	The Annual Incentive Plan (AIP) 

 SECTION II 
 DEFINITIONS 
  

	1.	Company – Northrop Grumman Corporation and such of its subsidiaries as are consolidated in its consolidated financial statements. 

  

	2.	Code – The Internal Revenue Code of 1986, as amended from time to time. 

  

	3.	Committee – The Compensation and Management Development Committee of the Board of Directors of the Company. 

  

	4.	Incentive Compensation – Awards payable under these plans. 

  

	5.	Participant – An employee of the Company granted or eligible to receive Incentive Compensation award under one of these Plans. 

  

	6.	Performance Criteria – The performance criteria is a weighted combination of various financial and non-financial factors approved by the Committee for the Performance Year.

  

	7.	Performance Year – The year with respect to which an award of Incentive Compensation is calculated and paid. 

  

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	8.	Plans – Collectively, the Incentive Compensation Plan (ICP); and/or the Annual Incentive Plan (AIP). 

  

	9.	Plan Year – The fiscal year of Northrop Grumman Corporation. 

  

	10.	Section 162(m) Officer – An employee who is a “covered employee” as defined in Section 162(m) of the Code with respect to an award of Incentive Compensation
under the 2002 Incentive Compensation Plan for any Performance Year 

 SECTION III 
 PARTICIPATION 
 Employees may be eligible for incentive
compensation under one of the Northrop Grumman incentive plans as described below. 
  

	1.	Incentive Compensation Plan (ICP): 

  

	 	a.	Employees eligible to receive incentive compensation under the ICP are elected corporate officers of the rank of vice president and above and the presidents of those consolidated
subsidiaries that the committee determines to be significant in the overall corporate operations that are not section 162(m) officers for the performance year. If an executive receives or is eligible to receive an incentive compensation award under
the 2002 Incentive Compensation Plan for 162(m) officers, then the executive will not be eligible and shall not receive an incentive compensation award under the ICP. 

  

	 	b.	Directors, as such, shall not participate in the ICP, but the fact that an elected corporate officer or subsidiary president is also a director of the Company shall not prevent
participation. 

  

	2.	Annual Incentive Plan (AIP): 

  

	 	a.	Employees eligible to receive incentive compensation awards under the AIP are appointed vice presidents, senior management, middle management and individual key contributors
(employees normally in a position that customarily perform quasi-management or team leadership duties). In addition, employees may be eligible to participate in the AIP if they have specific individual goals that directly contribute to the
attainment of their respective business unit’s operating goals or if employees are considered “high performing” and are in a position to make measurable and significant contributions to the success of the Company.

  

	 	b.	 At the beginning of, or prior to, a performance year, the Company’s CEO approves the number of participants eligible for participation in the AIP. Participants
are then selected by their management based on an assessment of 

  

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their position relative to other candidates, their performance, and their potential impact on achievement of business unit and the Company goals.

  

	 	c.	Participation in the AIP during any performance year does not imply nor guarantee participation in the AIP in future years. 

  

	3.	Non-Duplication of Awards 

  

	 	a.	A participant may not receive an incentive compensation award under more than one of the above plans for the performance year. The only exception to this is in the event that an
individual is a participant in a particular plan for a portion of the performance year and then is selected to participate in one of the other plans for the remainder of that performance year. In this event, an individual may receive pro-rated
awards based on the time that he/she participated in each plan. 

  

	 	b.	A participant will not be eligible to receive any incentive compensation award from either of these plans if the employee is a participant in the Company’s 2002 Incentive
Compensation Plan for 162(m) Officers. 

  

	4.	Death, Disability, or Retirement 

 A participant may be
eligible to receive a pro-rated incentive compensation award in the event of the employee’s death, disability, or retirement. In the case of a deceased participant, such incentive compensation award will be paid to the participant’s
estate. 
  

	5.	Employment Status 

 Except as provided in Section III 4
(see above), in order to be eligible to receive a payment from these plans, a participant must be an active employee of the Company as of December 31 of the plan year, unless an exception is approved in writing by the Company’s chief human
resources and administrative officer. 
 SECTION IV 
 GOAL SETTING AND PERFORMANCE CRITERIA 
 Goal setting and performance planning are essential elements of plan administration.
This requires establishing performance criteria, such as annual goals, goal weights, and performance measures. Except as provided in the plan, the Committee approves annual business and financial goals for the Company no later than the end of the
first quarter of the annual performance period. 
  

	1.	Corporation Goals 

 For each performance year, until
otherwise determined by the Committee, financial and non-financial objectives will be established by the Committee in its sole discretion. 
  

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	2.	Financial Measures 

  

	 	a.	The CEO’s recommended goals are reviewed and amended as appropriate, and established by the Committee at its sole discretion. Measures may include, but are not limited to: cash
management, cash flow, return on investment, debt reduction, revenue growth, net earnings, and return on equity. 

  

	 	b.	The Committee approves a performance threshold, a target level and a maximum performance level for each of the financial measures for the performance year. 

 

	3.	Supplemental Goals 

 Supplemental goals may be either
qualitative or quantitative such as, but not limited to: customer satisfaction, contract acquisition, delivery schedule, cycle-time improvement, productivity, quality, workforce diversity, and environmental management. The CEO recommends the
supplemental goals based on sector goals contained in Annual Operating Plans and corporate office goals established prior to the beginning of each year. Supplemental goals have stated milestones and weights. The CEO’s recommended supplemental
goals are reviewed and amended as appropriate, and established by the Committee at its sole discretion. 
  

	4.	Individual Goals 

 Each year participants develop
individual goals that support achievement of the Company’s business plan and the specific goals established by the Committee in the three aforementioned corporation goals. Individual goals are prepared, approved and documented. The
employee’s manager reviews these goals with each participant to ensure they are aggressive, coordinated and focused on attainment of Company business objectives. 
 SECTION V 
 PERFORMANCE DETERMINATION 
 At the end of the performance year the CEO evaluates the performance of each of the operating units and that of the overall Company against the financial and business goals 

  

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established at the beginning of the performance year and submits his assessment to the Committee. 
 The CEO’s final evaluation of performance (the “unit performance factor” or “UPF”) is stated numerically and is a performance multiplier for
individual incentive targets. The UPF will vary from 0.0 to a maximum as approved by the Committee. 
 The Committee, in its sole discretion, after taking
into account its appraisal of the overall performance of the Company in the attainment of such predetermined financial and non-financial objectives, may either increase or decrease the company UPF for these plans. 
 SECTION VI 
 INCENTIVE COMPENSATION
APPROPRIATIONS 
  

	1.	The amount appropriated for the plans for a performance year is based on the CEO’s determination of the UPF (as approved or modified by the Committee) and applied to the
individual incentive targets of participants. These performance-adjusted targets are aggregated into the “Appropriated Incentive Compensation” for the performance year. 

  

	2.	In no event shall incentive compensation payable to participants for a performance year exceed the appropriated incentive compensation for the plans as approved by the Committee.

  

	3.	Any appropriated incentive compensation for a performance year, which is not actually distributed to the participants as awards for such year, cannot be transferred to the following
performance year. 

 SECTION VII 
 INCENTIVE COMPENSATION AWARDS 
  

	1.	Individual Award Factors 

  

	 	a.	Target award percentage – is established annually and is a percentage of annual aggregate salary that reflects the varying impact of participant’s positions on business
results. Generally vice presidents will have higher target award percentages than senior middle managers and so forth. 

  

	 	b.	 Individual performance – prior to the submission of recommended incentive compensation awards, each participant will be evaluated by his management in relation
to the participant’s achievement of predetermined individual goals and his/her relative contribution during the performance year compared to 

  

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other participants to the success or profit of the Company. This assessment of performance (the “individual performance factor” or “IPF”)
is stated numerically and is a performance multiplier for individual incentive targets. The IPF may range from 0 to 1.5. 

  

	 	c.	Both the IPF and the UPF are multipliers for the individual participant’s target award percentage to determine that participant’s incentive compensation award.

  

	2.	ICP Awards: 

  

	 	a.	The Committee shall review the CEO’s recommendations and make the final determination of each individual ICP participant’s incentive compensation award for the performance
year. 

  

	3.	AIP Awards: 

  

	 	a.	Prior to the payment of any incentive compensation awards for a performance year, the CEO, or his delegate, may in his sole discretion, adjust or reduce to zero recommended amounts
of incentive compensation awards to all or any of the participants. 

  

	 	b.	The CEO or his delegate shall determine the amount of any adjustment in a participant’s incentive compensation award on the basis of such factors as he deems relevant, and
shall not be required to establish any allocation or weighting component with respect to the factors he considers. 

 SECTION
VIII 
 ADMINISTRATION OF THE PLANS 
  

	1.	ICP: The Committee shall be responsible for the administration of the Plan. The Committee shall: 

  

	 	a.	Interpret the ICP , make any rules and regulations relating to that plan, determine which consolidated subsidiaries are significant for the purpose of the first paragraph of SECTION
III, and determine factual questions arising in connection with the ICP , after such investigation or hearing as the Committee may deem appropriate. 

  

	 	b.	As soon as feasible after the close of each performance year and prior to the payment of any incentive compensation for such performance year, review the performance of each
participant and determine the amount of each participant’s individual incentive compensation award, if any, with respect to that performance year. 

  

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	 	c.	Have sole discretion in determining incentive compensation awards under the ICP, except that in making awards the Committee may, in its discretion, request and consider the
recommendations of the CEO and others whom it may designate. 

  

	 	d.	Any decisions made by the Committee under the provisions of this SECTION VIII, as well as any interpretations of the ICP by the Committee, shall be conclusive and binding on all
parties concerned. 

  

	2.	AIP: The CEO shall be responsible for the administration of this plan. The CEO shall: 

  

	 	a.	Interpret the AIP, make any rules and regulations relating to thae plan, and determine factual questions arising in connection with the AIP. 

  

	 	b.	As soon as feasible after the close of each performance year and prior to the payment of any incentive compensation for such performance year, review the recommended awards of
selected participants, as determined by the CEO, to determine if the award is appropriate with respect to that performance year, making any adjustments as he deems necessary and approving each such award. 

  

	 	c.	Review and approve the total incentive compensation award expenditure of each sector and the Company overall. 

  

	 	d.	Any decisions made by the CEO under the provisions of this Section VIII, as well as any interpretation of the AIP by the CEO, shall be conclusive and binding on all parties
concerned. 

 SECTION IX 
 METHOD OF PAYMENT OF INCENTIVE 
 COMPENSATION TO INDIVIDUALS 
  

	1.	ICP Payments 

  

	 	a.	The amount of incentive compensation award determined for each participant with respect to a given performance year shall be paid in cash or in common stock of the Company
(“Northrop Grumman common stock”) or partly in cash and partly in Northrop Grumman common stock, as the Committee may determine. Except as provided below in this Section IX and subject to any applicable deferred compensation election to
the contrary, payment of the incentive compensation award with respect to a given performance year shall be made by March 15 of the year following such performance year. 

  

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	 	b.	Payments in cash may be made in a lump sum with respect to an incentive compensation award for a performance year, or in installments, as the Committee may determine and (in the
case of installments) to the extent consistent with Section 409A of the code. In either event, the Committee may impose such conditions, including forfeitures and restrictions, as the Committee believes will best serve the interests of the
Company and the purposes of the ICP. 

  

	 	c.	Payments in Northrop Grumman common stock may be made in full with respect to an incentive compensation award for a performance year, or in installments, as the Committee may
determine and (in the case of installments) to the extent consistent with Section 409A of the code. In either event, the Committee may impose such conditions, including forfeitures and restrictions, as the Committee believes will best serve the
interests of the Company and the purposes of the ICP. 

  

	 	d.	In making awards of Northrop Grumman common stock, the Committee shall first determine all incentive compensation awards in terms of dollars. The total dollar amount of all
incentive compensation awards for a particular year shall not exceed the appropriated incentive compensation for that performance year under the ICP. After fixing the total amount of each Participant’s incentive compensation award in terms of
dollars, then if some or all of the award is to be paid in Northrop Grumman common stock, the dollar amount of the incentive compensation award so to be paid shall be converted into shares of Northrop Grumman common stock by using the fair market
value of such stock on the date of the award. “Fair market value” shall be the closing price of such stock on the New York Stock Exchange on the date of the award, or, if no sales of such stock occurred on that date, then on the last
preceding date on which such sales occurred. No fractional share shall be issued. 

  

	 	e.	If an incentive compensation award is paid in Northrop Grumman common stock, the number of shares shall be appropriately adjusted for any stock splits, stock dividends,
re-capitalization or other relevant changes in capitalization effective after the date of award and prior to the date as of which the participant becomes the record owner of the shares received in payment of the award. All such adjustments
thereafter shall accrue to the participant as the record owner of the shares. 

  

	 	f.	Northrop Grumman common stock issued in payment of incentive compensation awards may, at the option of the Board of Directors, be either originally issued shares or treasury shares.

  

	 	g.	Distribution of awards shall be governed by the terms and conditions applicable to such awards, as determined by the Committee or its delegate. 

  

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 An award, the payment of which is to be deferred pursuant to the terms of an employment agreement, shall
be paid as provided by the terms of such agreement. Awards or portions thereof deferred pursuant to any other deferred compensation plan or deferral arrangement shall be paid as provided in such plan or arrangement. Any other awards the payment of
which has been deferred, in whole or in part, shall be paid as determined by the Committee. 
  

	 	h.	The Company shall have the right to deduct from all payments under the ICP any federal, state, or local taxes required by law to be withheld with respect to such payments.

  

	 	i.	No participant or any other party claiming an interest in amounts earned under the ICP shall have any interests whatsoever in any specific asset of the Company. To the extent that
any party acquires a right to receive payments under the ICP, such right shall be equivalent to that of an unsecured general creditor of the Company. Awards payable under the plan shall be payable in shares or from the general assets of Northrop
Grumman, and no special or separate reserve, fund or deposit shall be made to assure payment of such awards. 

  

	2.	AIP Payments 

  

	 	a.	The amount of incentive compensation award determined for each participant with respect to a given performance year shall be paid in cash no later than March 15 of the year
following that performance year. 

  

	 	b.	The Company shall have the right to deduct from all payments under this plan any federal, state, or local taxes required by law to be withheld with respect to such payments.

  

	 	c.	No participant or any other party claiming an interest in amounts earned under the AIP shall have any interest whatsoever in any specific asset of the Company. To the extent that
any party acquires a right to receive payments under the plan, such right shall be equivalent to that of an unsecured general creditor of the Company. Awards payable under the AIP shall be payable in shares or from the general assets of Northrop
Grumman, and no special or separate reserve, fund or deposit shall be made to assure payment of such awards. 

  

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 SECTION X 
 AMENDMENT OR TERMINATION OF PLANS 
 The Committee shall have the right to terminate or amend these plans at any time and to
discontinue further appropriations to the plans. 
 Without limiting the generality of the preceding paragraph, the Committee reserves the right to adjust
performance measures, the applicable performance goals and performance results with respect to either or both of the plans to the extent the Committee determines such adjustment is reasonably necessary or advisable to preserve the intended
incentives and benefits under the plans to reflect (1) any change in capitalization, any corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or
partial liquidation, (2) any change in accounting policies or practices, or (3) the effects of any special charges to earnings, or (4) any other similar special circumstances. 
 SECTION XI 
 EFFECTIVE DATE 
 These plans shall be effective for performance years commencing with and following 2006 and shall stay in effect until amended, modified or terminated by the Committee.
The provisions of these plans, together with those of the 2002 Incentive Compensation Plan for Section 162(m) Officers, shall supersede and replace those of prior plan documents. 
 SECTION XII 
 MISCELLANEOUS 
  

	1.	Participation in any plan shall not constitute an agreement of the participant to remain in the employ of and to render his/her services to the Company, or of the Company to
continue to employ such participant, and the Company may terminate the employment of a participant at any time with or without cause. 

  

	2.	In the event any provision of the plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the plans, and the plans
shall be construed and enforced as if the illegal or invalid provision had not been included. 

  

	3.	All costs of implementing and administering the plans shall be borne by the Company. 

  

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	4.	All obligations of the Company under the plans shall be binding upon and inure to the benefit of any successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. 

  

	5.	The plans and any agreements hereunder, shall be governed by and construed in accordance with the laws of the state of Delaware. 

  

	6.	The rights of a participant or any other person to any payment or other benefits under either of the plans may not be assigned, transferred, pledged, or encumbered except by will or
the laws of decent or distribution. 

 Neither of the plans constitutes a contract. Neither of the plans confers upon any person any right to
receive a bonus or any other payment or benefit. There is no commitment or obligation on the part of Northrop Grumman (or any affiliate) to continue any bonus plan (similar to the plans or otherwise) in any particular year. 
  

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