Document:

exv10w8

Exhibit 10.8

NORTHROP GRUMMAN

OFFICERS RETIREMENT ACCOUNT CONTRIBUTION PLAN

(Effective as of January 1, 2011)

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	INTRODUCTION	 	 	1	 
	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	 
	 	1.1	 	Definitions	 	 	1	 
	 	 	 	 	 
	ARTICLE II PARTICIPATION	 	 	4	 
	 
	 	2.1	 	In General	 	 	4	 
	 
	 	2.2	 	Disputes as to Employment Status	 	 	4	 
	 	 	 	 	 
	ARTICLE III CREDITS TO ACCOUNTS	 	 	4	 
	 
	 	3.1	 	Accounts	 	 	4	 
	 
	 	3.2	 	Company Contribution Credits	 	 	5	 
	 
	 	3.3	 	Earnings Credits	 	 	5	 
	 
	 	3.4	 	Valuation of Accounts	 	 	5	 
	 
	 	3.5	 	Use of a Trust	 	 	5	 
	 
	 	3.6	 	Investment Return Not Guaranteed	 	 	5	 
	 	 	 	 	 
	ARTICLE IV VESTING AND FORFEITURES	 	 	6	 
	 
	 	4.1	 	In General	 	 	6	 
	 
	 	4.2	 	Exceptions	 	 	6	 
	 	 	 	 	 
	ARTICLE V DISTRIBUTIONS	 	 	6	 
	 
	 	5.1	 	Normal Distribution Rules	 	 	6	 
	 
	 	5.2	 	Effect of Taxation	 	 	6	 
	 
	 	5.3	 	Permitted Delays	 	 	7	 
	 
	 	5.4	 	Payments Not Received At Death	 	 	7	 
	 
	 	5.5	 	Inability to Locate Participant	 	 	7	 
	 
	 	5.6	 	Committee Rules	 	 	7	 
	 	 	 	 	 
	ARTICLE VI ADMINISTRATION	 	 	7	 
	 
	 	6.1	 	Committees	 	 	7	 
	 
	 	6.2	 	Committee Action	 	 	8	 
	 
	 	6.3	 	Powers and Duties of the Administrative Committee	 	 	8	 
	 
	 	6.4	 	Powers and Duties of the Investment Committee	 	 	9	 
	 
	 	6.5	 	Construction and Interpretation	 	 	9	 
	 
	 	6.6	 	Information	 	 	9	 
	 
	 	6.7	 	Committee Compensation, Expenses and Indemnity	 	 	9	 
	 
	 	6.8	 	Claims	 	 	10	 
	 	 	 	 	 
	ARTICLE VII MISCELLANEOUS	 	 	10	 
	 
	 	7.1	 	Unsecured General Creditor	 	 	10	 
	 
	 	7.2	 	Restriction Against Assignment	 	 	10	 
	 
	 	7.3	 	Restriction Against Double Payment	 	 	11	 
	 
	 	7.4	 	Withholding	 	 	11	 
	 
	 	7.5	 	Amendment, Modification, Suspension or Termination	 	 	11	 
	 
	 	7.6	 	Governing Law	 	 	12	 
	 
	 	7.7	 	Receipt and Release	 	 	12	 
	 
	 	7.8	 	Payments on Behalf of Persons Under Incapacity	 	 	12	 

i

 

	 	 	 	 	 	 	 	 	 
	 
	 	7.9	 	Limitation of Rights and Employment Relationship	 	 	12	 
	 
	 	7.10	 	Headings	 	 	12	 
	 
	 	7.11	 	Liabilities Transferred to HII	 	 	12	 

ii

 

     INTRODUCTION

                    The Northrop Grumman Officers Retirement Account Contribution Plan (the “Plan”) was adopted
effective as of October 1, 2009. This restatement amends the Plan effective January 1, 2011.

                    This Plan is intended (1) to comply with section 409A of the Internal Revenue Code, as amended
(the “Code”) and official guidance issued thereunder, and (2) to be “a plan which is unfunded and
is maintained by an employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees” within the meaning of sections 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974. Notwithstanding any
other provision of this Plan, this Plan shall be interpreted, operated and administered in a manner
consistent with these intentions.

ARTICLE I

 DEFINITIONS

          1.1     Definitions

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

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

                    “Administrative Committee” means the committee in charge of Plan administration, as
described in Article VI.

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

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

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

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

                              No designation of a Beneficiary other than the Participant’s spouse shall be valid unless
consented to in writing by such spouse. If there is no such designation or if there is

1

 

no surviving designated Beneficiary, then the Participant’s surviving spouse shall be the
Beneficiary. If there is no surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the duly appointed and currently acting personal representative of the
Participant’s estate (which shall include either the Participant’s probate estate or living trust)
shall be the Beneficiary. In any case where there is no such personal representative of the
Participant’s estate duly appointed and acting in that capacity within 90 days after the
Participant’s death (or such extended period as the Administrative Committee determines is
reasonably necessary to allow such personal representative to be appointed, but not to exceed 180
days after the Participant’s death), then Beneficiary shall mean the person or persons who can
verify by affidavit or court order to the satisfaction of the Administrative Committee that they
are legally entitled to receive the benefits specified hereunder. Any payment made pursuant to such
determination shall constitute a full release and discharge of the Plan, the Administrative
Committee and the Company. A Participant will automatically revoke a designation of a spouse as
primary beneficiary upon the dissolution of their marriage.

                    (c)     In the event any amount is payable under the Plan to a minor, payment shall not be made to
the minor, but instead be paid (1) to that person’s living parent(s) to act as custodian, (2) if
that person’s parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (3) if no parent of that person is then living, to a custodian selected by the
Administrative Committee to hold the funds for the minor under the Uniform Transfers or Gifts to
Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the
Administrative Committee decides not to select another custodian to hold the funds for the minor,
then payment shall be made to the duly appointed and currently acting guardian of the estate for
the minor or, if no guardian of the estate for the minor is duly appointed and currently acting
within 60 days after the date the amount becomes payable, payment shall be deposited with the court
having jurisdiction over the estate of the minor. Any payment made pursuant to such determination
shall constitute a full release and discharge of the Plan, the Administrative Committee and the
Company.

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

                    “Board” shall mean the Board of Directors of the Company.

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

                    “Committees” shall mean the Committees appointed as provided in Article VI.

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

                    “Company Contributions” shall mean credits to a Participant’s Account, as described in
Section 3.2.

                    “Compensation” shall be “compensation” as defined by Section 5.01 of the NGSP.

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

2

 

                    (a)     he or she is an elected or appointed officer of an Affiliated Company other than Vinnell
Corporation, Component Technologies or Premier America Credit Union;

                    (b)     he or she is not eligible to accrue benefits under a Company-sponsored qualified defined
benefit pension plan;

                    (c)     he or she is not eligible to actively accrue benefits under Appendix F (“CPC SERP”),
Appendix G (“OSERP”), or Appendix I (“OSERP II”) of the Northrop Grumman Supplemental Plan 2; and

                    (d)     he or she is not otherwise designated as being ineligible to participate in the Plan.

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

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

                    “Investment Committee” means the committee in charge of investment aspects of the
Plan, as described in Article VI.

                    “Key Employee” means an employee treated as a “specified employee” under Code section
409A(a)(2)(B)(i) of the Company or the Affiliated Companies (i.e., a key employee (as defined in
Code section 416(i) without regard to paragraph (5) thereof)) if the Company’s or an Affiliated
Company’s stock is publicly traded on an established securities market or otherwise. The Company
shall determine in accordance with a uniform Company policy which Participants are Key Employees as
of each December 31 in accordance with IRS regulations or other guidance under Code section 409A,
provided that in determining the compensation of individuals for this purpose, the definition of
compensation in Treas. Reg. § 1.415(c)-2(d)(3) shall be used. Such determination shall be effective
for the twelve (12) month period commencing on April 1 of the following year.

                    “NGSP” means the Northrop Grumman Savings Plan.

                    “Participant” shall mean any Eligible Employee who participates in this Plan in
accordance with Article II.

                    “Plan” shall be the Northrop Grumman Officers Retirement Account Contribution Plan.

                    “Separation from Service” means a “separation from service” within the meaning of Code
section 409A.

3

 

ARTICLE II

PARTICIPATION

          2.1     In General

                    (a)     An Employee shall automatically become a Participant and eligible for Company
Contributions as of the later of October 1, 2009 or the date the Employee becomes an Eligible
Employee.

                    (b)     An individual will cease to be a Participant when he or she no longer has a positive
balance in his or her Account.

          2.2     Disputes as to Employment Status

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

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

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

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

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

ARTICLE III

CREDITS TO ACCOUNTS

          3.1     Accounts

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

4

 

          3.2     Company Contribution Credits

                    If a Participant qualifies as an Eligible Employee during a payroll period, the Participant’s
Account shall be credited with a Company Contribution as soon as practicable after the end of the
payroll period. The Company Contribution for a payroll period shall equal 4% of the Participant’s
Compensation for the payroll period.

          3.3     Earnings Credits

                    A Participant’s Account will be periodically credited with earnings, gains and losses as if
the Account was invested in the same investment options as the Participant’s RAC Subaccount in the
Northrop Grumman Savings Excess Plan. If a Participant does not have such a RAC Subaccount, his
Account will be credited with earnings, gains and losses as if the Account was invested in the
qualified default investment alternative (“QDIA”) that applies to the Participant under the NGSP.

          3.4     Valuation of Accounts

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

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

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

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

          3.5     Use of a Trust

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

          3.6     Investment Return Not Guaranteed

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

5

 

ARTICLE IV

VESTING AND FORFEITURES

          4.1     In General

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

          4.2     Exceptions

                    The following exceptions apply to the vesting rule:

                    (a)     Forfeitures on account of a lost payee. See Section 5.5.

                    (b)     Forfeitures under an escheat law.

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

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

                    (e)     Investment losses.

ARTICLE V

DISTRIBUTIONS

          5.1     Normal Distribution Rules

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

          5.2     Effect of Taxation

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

6

 

          5.3     Permitted Delays

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

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

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

                    (c)     provided, that any payment delayed pursuant to this Section 5.3 shall be paid in
accordance with Code section 409A.

          5.4     Payments Not Received At Death

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

          5.5     Inability to Locate Participant

                    In the event that the Administrative Committee is unable to locate a Participant or
Beneficiary within two years following the required payment date, the amount allocated to the
Participant’s Account shall be forfeited.

          5.6     Committee Rules

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

ARTICLE VI

ADMINISTRATION

          6.1     Committees

                    (a)     The Administrative Committee shall be appointed by the Company.

                    (b)     An Investment Committee (referred to together with the Administrative Committee as, the
“Committees”), comprised of one or more persons, shall be appointed by and serve at the pleasure of
the Board (or its delegate). The number of members comprising the Investment Committee shall be
determined by the Board, which may from time to time vary the number of members. A member of the
Investment Committee may resign by delivering a written

7

 

notice of resignation to the Board. The Board may remove any member by delivering a certified
copy of its resolution of removal to such member. Vacancies in the membership of the Investment
Committee shall be filled promptly by the Board.

          6.2     Committee Action

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

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

          6.3     Powers and Duties of the Administrative Committee

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

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

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

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

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

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

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

8

 

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

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

          6.4     Powers and Duties of the Investment Committee

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

                    (a)     To oversee any rabbi trust; and

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

          6.5     Construction and Interpretation

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

          6.6      Information

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

          6.7      Committee Compensation, Expenses and Indemnity

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

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

                    (c)     To the extent permitted by ERISA and applicable state law, the Company shall indemnify and
hold harmless the Committees and each member thereof, the Board and any delegate of the Committees
who is an employee of the Affiliated Companies against any and all expenses, liabilities and
claims, including legal fees to defend against such liabilities and claims arising out of their
discharge in good faith of responsibilities under or incident to the Plan, other

9

 

than expenses and liabilities arising out of willful misconduct. This indemnity shall not
preclude such further indemnities as may be available under insurance purchased by the Company or
provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted
under ERISA and state law.

          6.8      Claims

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

ARTICLE VII

MISCELLANEOUS

          7.1     Unsecured General Creditor

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

          7.2     Restriction Against Assignment

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

                    (b)     The actions considered exceptions to the vesting rule under Section 4.2 will not be
treated as violations of this Section.

10

 

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

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

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

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

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

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

          7.3     Restriction Against Double Payment

                    If a court orders an assignment of benefits despite Section 7.2, the affected Participant’s
benefits will be reduced accordingly. The Administrative Committee may use any reasonable actuarial
assumptions to accomplish the offset under this Section.

          7.4     Withholding

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

          7.5     Amendment, Modification, Suspension or Termination

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

11

 

          7.6     Governing Law

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

          7.7     Receipt and Release

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

          7.8     Payments on Behalf of Persons Under Incapacity

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

          7.9     Limitation of Rights and Employment Relationship

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

          7.10   Headings

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

          7.11   Liabilities Transferred to HII

                    Northrop Grumman Corporation distributed its interest in Huntington Ingalls Industries, Inc.
(“HII) to its shareholders on March 31, 2011 (the “HII Distribution Date”). Pursuant to an
agreement between Northrop Grumman Corporation and HII, on the HII Distribution Date certain
employees and former employees of HII ceased to participate in the Plan and the liabilities for
these participants’ benefits under the Plan were transferred to HII. On and after the HII
Distribution Date, the Company and the Plan, and any successors thereto, shall have no further
obligation or liability to any such participant with respect to any benefit, amount, or right due
under the Plan.

*   *   *

12

 

                    IN WITNESS WHEREOF, this Plan is hereby executed by a duly authorized officer on this 27th day
of June, 2011.

	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

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

International 	 
	 

13exv10w9

Exhibit 10.9

APPENDIX B

TO THE NORTHROP GRUMMAN SUPPLEMENTAL PLAN 2

ERISA Supplemental Program 2

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

          Appendix B to the Northrop Grumman Supplemental Plan 2 (the “Appendix”) is hereby amended
and restated effective as of January 1, 2011. This restatement amends the January 1, 2009
restatement and includes changes that apply to Grandfathered Amounts.

	B.01	 	 Purpose. The purpose of the Program is:

	 	(a)	 	to restore benefits lost under the Pension Plans as a result of the
compensation limit in Code section 401(a)(17), or any successor provision; and

	 	(b)	 	to include compensation deferred under a Deferred Compensation Plan and
deferrals required in connection with participation under the Northrop Grumman
Electronic Systems Executive Pension Plan.

	B.02	 	 Eligibility. An employee of the Company, other than Charles H. Noski, is eligible
to receive a benefit under this Program if he or she:

	 	(a)	 	retires on or after January 1, 1989;

	 	(b)	 	has vested in Pension Plan benefits that are reduced because of one or both
of the following:

	 	(1)	 	the Code section 401(a)(17) limit on compensation; or

	 	(2)	 	participation in a Deferred Compensation Plan.

	B.03	 	 Amount of Benefit.

	 	(a)	 	The benefit payable under this Program with respect to a Participant who
commences benefits during his or her lifetime will equal the amounts described in (1)
through (3) below.

	 	(1)	 	Cash Balance Piece. Effective for periods after
June 30, 2003, a Participant whose retirement benefit is determined under the
terms of a Cash Balance Plan is credited under this Program with Benefit
Credits (as defined under the Participant’s Cash Balance Plan) he or she would
have received:

 

	 	(A)	 	but for the restrictions of Code sections
401(a)(17) or 415, as those limits are described by the applicable Cash
Balance Plan; and

	 	(B)	 	but for the fact the Participant made
deferrals to a Deferred Compensation Plan.

	 	 	 	For purposes of (B), the Benefit Credits earned are credited in accordance
with the terms of the Cash Balance Plan applicable to Eligible Pay in excess
of the Social Security Wage Base and any compensation deferred is only
treated as compensation for benefit calculation purposes under this Program
in the year(s) payment would otherwise have been made and not in the year(s)
of actual payment.

	 	(2)	 	Historical and Transition Piece. Effective for
periods prior to July 1, 2003 the Participant is credited with the retirement
benefit, if any, that would have been payable under the terms of the Pension
Plan:

	 	(A)	 	but for the restrictions of Code sections
401(a)(17) or 415, as those limits are described by the applicable
Pension Plan; and

	 	(B)	 	but for the fact that the Participant
deferred compensation under either a Deferred Compensation Plan or in
connection with the Northrop Grumman Electronic Systems Executive
Pension Plan.

	 	 	 	For purposes of (B), any compensation deferred is only treated as
compensation for benefit calculation purposes under this Program in the
year(s) payment would otherwise have been made and not in the year(s) of
actual payment.

	 	(3)	 	For Participants whose employment ceases after 2005, all
Plan Years after 1996 (not just the last ten) shall be considered in
determining the highest three years of eligible pay for purposes of calculating
benefit amounts. All benefits resulting from this change in determining the
highest three years of eligible pay shall be subject to Code section 409A.

	 	(b)	 	The benefit payable under this Program will be reduced by the combined
amounts of Pension Plan Benefits and the Northrop Grumman ERISA Supplemental Plan
benefits attributable to the applicable Pension Plan.

	 	(c)	 	Notwithstanding any other provision of the Program, in accordance with
Section G.05, a Participant’s total accrued benefits under all plans, programs, and
arrangements in which he or she participates, including the benefit accrued under
Section B.03, may not exceed 60% of his or her Final Average Salary (as defined in
Section G.02(c)), reduced for early retirement using the factors in Section G.09. If
this limit is exceeded, the Participant’s accrued benefit under Appendix F or G,
whichever is applicable, will be reduced first, and the Participant’s accrued benefit
under this Program will then be reduced to the extent necessary to satisfy the
limit.

 - 2 - 

 

	 	(d)	 	Minimum Normal Retirement Benefits for Designated Participants.

	 	(1)	 	“Minimum Normal Retirement Benefits for Designated
Participants” are benefits provided only in the Pension Plan appendices (i.e.,
benefits in excess of the benefits provided by other portions of the Pension
Plans).

	 	(A)	 	These extra benefits are meant to partially
restore benefits lost because of Code section 401(a)(17).

	 	(B)	 	Therefore, they are not included in the
“retirement benefit” in (a), but they are included for purposes of the
offset in (b).

	 	(2)	 	Example. An employee is initially entitled to an
$85,000 annual benefit under the Pension Plans. The employee would be entitled,
but for section 401(a)(17), to a $100,000 annual benefit under the Pension
Plans, so that $15,000 is payable under this Program. The Company then adds the
minimum normal retirement benefit appendices under the Pension Plans, which are
intended to pay all or a portion of the benefits previously payable by this
Program under the Pension Plans instead. Assume this results in the employee
being entitled to an additional $10,000 annual benefit under the appendices to
the Pension Plans, so that the Pension Plans now pay a total of $95,000. This
Program restores to the employee only the difference between $100,000 and
$95,000, or a $5,000 annual benefit.

	 	(e)	 	Benefits under this Program will only be paid to supplement benefit
payments actually made from a Pension Plan. If benefits are not payable under a Pension
Plan because the Participant has failed to vest or for any other reason, no payments
will be made under this Program with respect to such Pension Plan.

	 	(f)	 	The following shall not be considered as compensation for purposes of
determining the amount of any benefit under the Program:

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

	 	(2)	 	any award payment under the Northrop Grumman Long-Term
Incentive Cash Plan.

 - 3 - 

 

	B.04 	 	Preretirement Surviving Spouse Benefit.

	 	(a)	 	Preretirement surviving spouse benefits will be payable under this Program
on behalf of a Participant if such Participant’s surviving spouse is eligible for
benefits payable from a Pension Plan.

	 	(b)	 	The benefit payable will be:

	 	(1)	 	for periods after June 30, 2003, the amount which would
have been payable under the Cash Balance Plan:

	 	(A)	 	but for the restrictions of Code sections
401(a)(17) and 415 (or any successor sections), as those limits are
described by the applicable Cash Balance Plan; and

	 	(B)	 	but for the fact that the Participant
deferred compensation under a Deferred Compensation Plan (with Benefit
Credits determined by reference to amounts exceeding the Social
Security Wage Base); and

	 	(2)	 	for periods prior to July 1, 2003, the amount which would
have been payable under the Pension Plan:

	 	(A)	 	but for the restrictions of Code sections
401(a)(17) and 415 (or any successor sections), as those limits are
described by the applicable Pension Plan; and

	 	(B)	 	but for the fact that the Participant
deferred compensation under either a Deferred Compensation Plan or in
connection with the Northrop Grumman Electronic Systems Executive
Pension Plan.

	 	(3)	 	For Participants whose employment ceases after 2005, all
Plan Years after 1996 (not just the last ten) shall be considered in
determining the highest three years of eligible pay for purposes of calculating
benefit amounts. All benefits resulting from this change in determining the
highest three years of eligible pay shall be subject to Code section 409A.

	 	(c)	 	For purposes of paragraph (b)(2) above, any compensation deferred will only
be treated as compensation for benefit calculation purposes under this Program in the
year(s) payment would otherwise have been made and not in the year(s) of actual
payment.

	 	(d)	 	The benefit payable under this Program will be reduced by the combined
amounts of the Pension Plan Benefits and the Northrop Grumman Corporation ERISA
Supplemental Plan benefits attributable to the applicable Pension Plan.

	 	(e)	 	No benefit will be payable under this Program with respect to a spouse
after the death of that spouse.

 - 4 - 

 

	 	(f)	 	The following shall not be considered as compensation for purposes of
determining the amount of any benefit under the Program:

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

	 	(2)	 	any award payment under the Northrop Grumman Long-Term
Incentive Cash Plan.

	B.05	 	 Plan Termination. No further benefits may be earned under this Program with
respect to a particular Pension Plan after the termination of such Pension Plan.

	B.06	 	 Pension Plan Benefits. For purposes of this Appendix, the term “Pension Plan
Benefits” generally means the benefits actually payable to a Participant, spouse, beneficiary
or contingent annuitant under a Pension Plan. However, this Program is only intended to remedy
pension reductions caused by the operation of section 401(a)(17) and not reductions caused for
any other reason. In those instances where pension benefits are reduced for some other reason,
the term “Pension Plan Benefits” shall be deemed to mean the benefits that actually would have
been payable but for such other reason.

	 	 	Examples of such other reasons include, but are not limited to, the following:

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

	 	(b)	 	A reduction of accrued benefits as permitted under Code section 412(c)(8),
as amended, or any comparable successor provision of law.

	 	(c)	 	A reduction of pension benefits as a result of payment of all or a portion
of a Participant’s benefits to a third party on behalf of or with respect to a
Participant.

	B.07	 	 ISA Excess Plan Participants.

	 	(a)	 	Background. Effective as of the ISA Eligibility Date, all
liabilities for benefits accrued after that date under the Northrop Grumman Integrated
Systems &
Aerostructures (ISA) Sector ERISA Excess Plan (the “ISA Plan”) are transferred to
this Plan. This Section describes the treatment of those liabilities
(“Transferred Liabilities”) and the Participants to whom those liabilities
relate (“Transferred Participants”).

 - 5 - 

 

	 	 	 	The “ISA Eligibility Date” is July 1, 2000.

	 	(b)	 	Transferred Participants. This Section B.07 applies only to
employees who: (1) were active participants in the ISA Plan as of the day before the
ISA Eligibility Date; and (2) accrued a benefit under the terms of the ISA Plan on or
after the ISA Eligibility Date.

	 	(c)	 	Treatment of Transferred Liabilities. The Transferred Liabilities
consist of any post-ISA Eligibility Date accruals under Article III of the ISA Plan.
Those liabilities are treated as if they were accrued under Section B.03 of this Plan.
Other provisions of this Plan govern as provided below.

	 	(d)	 	Distributions. Distributions of benefits attributable to the
Transferred Liabilities are generally made under Articles II and III of this Plan.

	 	(e)	 	Other Provisions. The Transferred Liabilities and the Transferred
Participants are fully subject to Articles I-III and Appendix B of this Plan. The
amount of the Transferred Liabilities is, however, determined under Article III of the
ISA Plan.

	B.08	 	 Grumman Excess Plan Spinoff.

	 	(a)	 	Background. Effective as of the Grumman Spinoff Date, all
liabilities for benefits accrued by Transferred Participants under the Northrop Grumman
Excess Plan for the Grumman Pension Plan (the “Grumman Plan”) were transferred to this
Plan. This Section describes the treatment of those liabilities (“Transferred
Liabilities”) under this Plan.
The “Grumman Spinoff Date” is July 1, 2003.

	 	(b)	 	Treatment of Transferred Liabilities. The Transferred Liabilities
will generally be treated under the Plan like any other benefits under B.03.

	 	(c)	 	Transferred Participants. The “Transferred Participants” are active
employees who were eligible to participate in the Grumman Plan as of June 30, 2003.
Grumman Plan benefits of individuals who terminated employment before July 1, 2003
remain subject to the Grumman Plan, and this Plan assumes no liabilities for those
benefits.

	 	(d)	 	Distributions. Distributions of amounts corresponding to the
Transferred Liabilities will generally be made under Articles II and III.

	 	(e)	 	Other Provisions. The Transferred Liabilities and the Transferred
Participants are fully subject to Articles I-III and Appendix B.

	B.09	 	 Liabilities Transferred to HII. Northrop Grumman Corporation distributed its
interest in Huntington Ingalls Industries, Inc. (“HII”) to its shareholders on March 31, 2011
(the “HII Distribution Date”). Pursuant to an agreement between Northrop Grumman Corporation
and HII, on the HII Distribution Date certain employees and former employees of HII ceased to
participate in the Program and the liabilities for these 

 - 6 - 

 

	 	 	participants” benefits under the
Program were transferred to HII. On and after the HII Distribution Date, the Company and the
Program, and any successors thereto, shall have no further obligation or liability to any such
participant with respect to any benefit, amount, or right due under the Program.

*   *   *

               IN WITNESS WHEREOF, this Amendment and Restatement is hereby executed by a duly
authorized officer on this 27th day of June, 2011.

	 	 	 	 	 
	 	NORTHROP GRUMMAN CORPORATION

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

International 	 
	 

 - 7 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00192-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00192-of-00352.parquet"}]]