Document:

Stock Rights and Rights Agreement, Kent Kresa

 Exhibit 10.6
  

	Notice of Grant of Restricted Performance Stock Rights
 and Rights Agreement		Northrop Grumman Corporation
 1840 Century Park East   
 Los Angeles, CA 90067 
	 
	 
 
	 Kent Kresa
 [Address]
 		
	 
	 
	 
	 Pursuant to the terms and conditions of the company’s 54 2001 Performance Plan (the “Plan”), you have been granted Restricted Performance Stock Rights (the
“Rights”) in the amount of 45,000 shares of stock as outlined below.
 
	 
	 
 
	Granted To:	 	Kent Kresa 	 	 
	 	 	[Social Security Number] 	 	 
	Grant Date:	 	August 15, 2001	 	 
	Target RPSR’s Granted:	 	 45,000	 	 
	Performance Period:	 	January 1, 2002 – December 31, 2004	 	 
	Vesting Schedule:	 	Special Vesting	 	 
	 	 	45,000 on 12/31/2004	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 
 
	This page and the attached Terms and Conditions together constitute the Rights Agreement. By your signature and the Company’s signature below, you and the Company agree that
these Rights are granted under and governed by the terms of the Company’s 2001 Long-Term Incentive Stock Plan and the Rights Agreement. 
	 	 	 

	NORTHROP GRUMMAN CORPORATION
	 	 	 
	By: 	 	By:
	 
 	 	 
 
	 	 	 
	Signature: 	 	 	 	Date:
	 
 		 
 
		Kent Kresa	 	 	 
	 	 	 

  
 
  
  

 
 NORTHROP GRUMMAN CORPORATION
 2001 LONG-TERM INCENTIVE STOCK PLAN
 RESTRICTED PERFORMANCE STOCK RIGHTS
 TERMS AND CONDITIONS
                This grant of Restricted Performance Stock Rights
(“RPSRs”) was granted on August 15, 2001 (the “Date of Grant”) by Northrop Grumman Corporation (the “Company”) to Kent Kresa (the “Grantee”).

	1.	 	The performance period with respect to this award shall commence January 1, 2002 and shall end December 31, 2004 (the “Performance Period”). The RPSRs subject to this grant shall be
paid at the conclusion of the Performance Period, provided that the Grantee has remained in the continuous employment of the Company or one of its subsidiaries through the last day of the Performance Period, and subject to the terms and performance
conditions stated herein, in the Northrop Grumman 2001 Long–Term Incentive Stock Plan, as amended from time to time (the “Plan”), and any rules or guides to administration adopted by the Company’s Compensation and Management
Development Committee or any successor committee appointed by the Company’s Board of Directors to administer the Plan (the “Committee”) in effect from time to time, including, without limitation, the Plan’s 2001 Guide to
Administration (the “Guide”). Without limiting the generality of the foregoing, the RPSRs are subject to the earnout provisions set forth in the Guide. In accordance with the Guide, Dividend Equivalents (as defined in the Guide) will be
paid on and at the same time as any RPSRs that are paid. RPSRs that become payable will be paid by delivery of an equivalent number of shares of Company Common Stock or, in the discretion of the Committee, in cash. Dividend Equivalents that become
payable will be paid in cash or, in the discretion of the Committee, shares of Company Common Stock. 
	 	 	 
	2.	 	 Except as expressly provided below if the Grantee Retires while employed by the Company or a subsidiary, this grant of RPSRs and related Dividend Equivalents is subject to
termination in accordance with the provisions of the Guide if the Grantee ceases to be an employee of the Company and its subsidiaries. The number of RPSRs (and related Dividend Equivalents) subject hereto that would otherwise be paid if the Grantee
had remained employed by the Company or a subsidiary through the entire Performance Period will be pro-rated in accordance with the Guide if the Grantee dies or becomes Disabled (as defined below) while employed by the Company or a subsidiary and
after completing at least twelve consecutive calendar months of employment with the Company or a subsidiary during the three-year Performance Period. Notwithstanding any retirement provisions set forth in the Guide to the contrary, if the Grantee
Retires (as defined below) while employed by the Company or a subsidiary, there will be no pro ration of the target number of RPSRs subject to this grant (that is, 100% of the target number of RPSRs initially subject to this grant shall remain
subject to this grant) and payment of the RPSRs subject to this grant (and related Dividend Equivalents) will be made at the same time and on the same performance basis as if the Grantee had not Retired. For purposes of this instrument,
“Disabled” means disabled pursuant to the provisions of the Company’s (or one of its subsidiary’s) Long Term Disability Plan applicable to the Grantee; or, if the Grantee is not covered by such a Long Term Disability Plan, the
incapacity of the Grantee, due to injury, illness, disease, or bodily or mental infirmity, to engage in the performance of substantially all of the usual duties of employment with the Company or the subsidiary which employs the Grantee, such
disability to be determined by the Committee upon receipt and in reliance on competent medical advice from one or more individuals, selected by the Committee, who are qualified to give such professional medical advice. For purposes of this
instrument, “Retire” means that the Grantee terminates employment after attaining age 55 with at least 10 years of service (other than in connection with a termination by the Company or a subsidiary for cause).
 
 

  
  
  

	3. 	 	The Company or the subsidiary which employs the Grantee shall be entitled to require, as a condition to any payment of the RPSRs and Dividend Equivalents,
that the Grantee pay any sums required to be withheld by federal, state or local tax law with respect to such payment. Alternatively, the Company or such subsidiary, in its discretion, may make such provisions for the withholding of taxes as it
deems appropriate.
	 	 	 
	4.	 	Other than by will or the laws of descent and distribution, the RPSRs and Dividend Equivalents subject to this instrument may not be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered, either voluntarily or involuntarily.
	 	 	 
	5.	 	Payments and the issuance of shares with respect hereto are subject to full compliance with all then applicable requirements of law, the Securities and Exchange Commission, the
Commissioner of Corporations of the State of California, or other regulatory agencies having jurisdiction over the Company and its shares, and of any exchange upon which stock of the Company may be listed. The Grantee shall not have the rights and
privileges of a stockholder with respect to any shares which may be issued in respect of the RPSRs and/or Dividend Equivalents until the date appearing on the certificate(s) for such shares, if such shares become issuable.
	 	 	 
	6.	 	The RPSRs, Dividend Equivalents, and the shares subject to this grant are subject to adjustment upon the occurrence of events such as stock splits, stock dividends and other changes
in capitalization in accordance with Section 6 of the Plan. In the event of any adjustment, the Company will give the Grantee written notice thereof which will set forth the nature of the adjustment. Except as set forth below in this paragraph 6,
the Grantee’s rights with respect to the RPSRs and Dividend Equivalents in the event of a Change in Control (as defined in the Plan) shall be determined under the Guide. Subject to the exceptions set forth in Section X of the Guide, if, within
the Protected Period (as defined in the Guide) corresponding to a Change in Control of the Company, the Grantee’s employment by the Company and its subsidiaries is involuntarily terminated by the Company and its subsidiaries for reasons other
than Cause (as defined in the Section X of the Guide) or by the Grantee for Good Reason (as defined in Section X of the Guide) and the Grantee was not otherwise entitled to a pro-rated payment with respect to the RPSRs as referenced in paragraph 2
hereof, then upon the Change in Control the Grantee will be eligible for a prorated portion of the RPSRs (and Dividend Equivalents with respect thereto) in accordance with Section VI.K.2 of the Guide.
	 	 	 
	7.	 	Vesting in the RPSRs and Dividend Equivalents subject to this instrument requires continued employment through the last day of the Performance Period. Unless otherwise expressly
provided in paragraph 2 or paragraph 6 hereof, employment for only a portion of the Performance Period, even if substantial, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment. Subject to the leave of absence provisions of the Guide, the term “employment” as used herein means active employment by the Company or one of its subsidiaries and salary continuation without active
employment will not, in and of itself, constitute “employment” for purposes hereof (in the case of salary continuation without active employment, the participant’s cessation of active employee status shall be deemed to be a
termination of “employment” for purposes hereof). Nothing contained in this instrument, the Plan, or the Guide constitutes an employment commitment by the Company or any subsidiary, affects the Grantee’s status (if the Grantee is
otherwise an at-will employee) as an employee at will who is subject to termination without cause, confers upon the Grantee any right to continue in the employ of the Company or any subsidiary, or interferes in any way with the right of the Company
or of any subsidiary to terminate such employment at any time.
	 	 	 
	8. 	 	 The Committee has the discretionary authority to determine any questions as to the date when the Grantee’s employment terminated and the cause of such termination and to
interpret any provision of this instrument, the Plan, the Guide, and any other applicable rules or guides to administration. Any action taken by, or inaction of, the Committee relating to or pursuant to this instrument, the Plan, the Guide, or any
other applicable rules or guides to administration shall be within the absolute discretion of the Committee and shall be conclusive and binding on all persons.
  
 

  
  
  

	9.		This grant of RPSRs and related Dividend Equivalents was made under the Plan. The RPSRs and related Dividend Equivalents are governed by, and the Grantee’s rights are subject
to, all of the terms and conditions of the Plan, the Guide (except as expressly provided in paragraph 2 hereof), and any other rules or regulations adopted by the Committee, as the foregoing may be amended from time to time. The Grantee shall have
no rights with respect to any amendment of this instrument, the Plan or the Guide unless such amendment is in writing and signed by a duly authorized officer of the Company.

                IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by its Chief Financial Officer or Chief
Human Resources and Administrative Officer and its Corporate Secretary effective as of the Date of Grant stated above.

	 	 	NORTHROP GRUMMAN CORPORATION
	 	 	 
	 	 	By _____________________________________
	 	 	 
	 	 	By _____________________________________Stock Options and Option Agreement, Kent Kresa

 Exhibit 10.7
  

	 Notice of Grant of Stock Options
 and Option Agreement
 	 	Northrop Grumman Corporation
 1840 Century Park East   
 Los Angeles, CA 90067 
	 
	 
 
	Kent Kresa
 [Address] 	 	 
	 	 	 
	 	 	 
	  
  
 	 	 
	 	 	 
	 Pursuant to the terms and conditions of the company’s 52 2001 NQ Stock Option Plan (the “Plan”), you have been granted a Non-Qualified Stock Option to purchase 100,000 shares
(the “Option”) of stock as outlined below.
 
	 
	 
 
	 	 	 
	 	Granted To:	  	Kent Kresa	 	 
	 	 	 	 	 	 
	 	Grant Date:	  	August 15, 2001	 	 
	 	 	 	 	 	 
	 	Options Granted:	 	100,000	 	 
	  	 	 	 	 	 
	 	Option Price per Share:	 
 	$78.5500	 	 
	 	 	 	 	 	 
	 	Expiration Date:	 	August 15, 2011	 	 
	 	 	 	 	 	 
	 	Vesting Schedule:	 	 25% per year for 4 years
 25,000 on 08/15/2002
 25,000 on 08/15/2003
 25,000 on 08/15/2004
 25,000 on 08/15/2005
 	 	 
	 	 	 

	 	 	 
	 
 
	This page and the attached Terms and Conditions together constitute the Option Agreement. By your signature and the Company’s signature below, you and the Company agree that these options are
granted under and governed by the terms of the Company’s 2001 Long-Term Incentive Stock Plan and the Option Agreement. 
	 	 	 

	NORTHROP GRUMMAN CORPORATION
	 	 	 
	By: 	 	 By:
 
	 
 	 	 
 
	 	 	 
	 Signature: 
 	 	 	 Date:
 
	  	 
 		 
 
	 	  Kent Kresa 	 	 
	 	 	 

 2001 NORTHROP GRUMMAN LONG-TERM INCENTIVE STOCK PLAN
 NON-QUALIFIED STOCK
OPTION
 TERMS AND CONDITIONS - KK

	1. 	 	The Grantee is entitled at the time or times designated in paragraph 4 hereof but before the close of business on the day before the tenth anniversary of the Date of Grant (the “Expiration
Date”) to purchase and receive from the Company the maximum number of shares of Common Stock of the Company set forth above upon exercise of this Option, all subject, however, to the terms and conditions stated herein and in the Northrop
Grumman 2001 Long-Term Incentive Stock Plan, as amended from time to time (the “Plan”), and any rules or guides to administration adopted by the Company’s Compensation and Management Development Committee or any successor committee
appointed by the Company’s Board of Directors to administer the Plan (the “Committee”) in effect from time to time, including, without limitation, the Plan’s 2001 Guide to Administration (the “Guide”). 
	 	 	 
	2.	 	This Option is non-transferable and non-assignable and may be exercised solely by the Grantee or a duly appointed guardian or personal representative, except as provided in paragraph 3 hereof in
the event of the death of the Grantee. This Option shall not be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
	 	 	 
	3.	 	This Option shall terminate if and when the Grantee ceases to be an employee of the Company or one of its subsidiaries, except as follows:
	 	 	 
	          (i)    If the Grantee dies or is Disabled (as defined below) while employed by the Company or a subsidiary, the next
succeeding vesting installment of this Option shall vest and all installments under this Option which have vested may be exercised by the Grantee (or, in the case of the Grantee’s death, by the Grantee’s successor) until the fifth
anniversary of the Grantee’s death or Disability, whichever first occurs, but in no event after the Expiration Date.
	 	 	 
	          (ii)    Notwithstanding any retirement provisions set forth in the Guide to the contrary, if the Grantee Retires (as
defined below) while employed by the Company or a subsidiary, (x) the next succeeding vesting installment of this Option shall vest as of the Grantee’s Retirement date, (y) any and all succeeding installments of this Option will vest as of the
date(s) that they would have otherwise vested had the Grantee remained employed by the Company or one of its subsidiaries, and (z) all installments under this Option which have vested as of the Grantee’s Retirement date or which vest as
described in the foregoing clause (y) may be exercised by the Grantee (or, in the case of the Grantee’s death, by the Grantee’s successor) until the fifth anniversary of the Grantee’s Retirement, but in no event after the Expiration
Date.
	 	 	 
	          (iii)    Subject to the following sentence, if the employment of the Grantee with the Company or a subsidiary is
terminated for any reason other than the Grantee’s death, Retirement or Disability, this Option may be exercised (as to not more than the number of shares as to which the Grantee might have exercised this Option on the date on which his or her
employment terminated) only within 90 days from the date of such termination of employment, but in no event after the Expiration Date; provided, however, that if the Grantee is dismissed by the Company or a subsidiary for cause, of which the
Committee shall be the sole judge, this Option shall expire forthwith. If the Grantee dies within 90 days after a termination of employment described in the preceding sentence (other than a termination by the Company or a subsidiary for cause), this
Option may be exercised by the Grantee’s successor for one year from the date of the Grantee’s death, but in no event after the Expiration Date and as to not more than the number of shares as to which the Grantee might have exercised this
Option on the date on which his or her employment by the Company or a subsidiary terminated.

  
  
  
  
  

	          (iv)     For purposes of this instrument, “Disabled” means disabled pursuant to the provisions of the
Company’s (or one of its subsidiary’s) Long Term Disability Plan applicable to the Grantee; or, if the Grantee is not covered by such a Long Term Disability Plan, the incapacity of the Grantee, due to injury, illness, disease, or bodily or
mental infirmity, to engage in the performance of substantially all of the usual duties of employment with the Company or the subsidiary which employs the Grantee, such disability to be determined by the Committee upon receipt and in reliance on
competent medical advice from one or more individuals, selected by the Committee, who are qualified to give such professional medical advice. For purposes of this instrument, “Retire” means that the Grantee terminates employment after
attaining age 55 with at least 10 years of service (other than in connection with a termination by the Company or a subsidiary for cause).
	 	 	 
	4.	 	Subject to the earlier vesting and/or termination of this Option pursuant to paragraph 3 or paragraph 8 hereof, this Option shall become exercisable as to 25 percent of the total number of shares
set forth above on the first anniversary of the Date of Grant, and on each succeeding anniversary of the Date of Grant this Option shall become exercisable as to an additional 25 percent of the total number of shares so that on the fourth
anniversary of the Date of Grant this Option shall be exercisable in full. Subject to the earlier vesting and/or termination of this Option pursuant to paragraph 3 or paragraph 8 hereof, this Option may be exercised to the extent that it is
exercisable in accordance with the foregoing at any time up to the Expiration Date.
	 	 	 
	5. 	 	 In order to exercise this Option, the Grantee or such other person as may be entitled to exercise the same shall (i) execute and deliver to the Corporate Secretary of the Company a written
notice indicating the number of shares subject to this Option to be exercised, and/or (ii) complete such other exercise procedure as may be prescribed by the Corporate Secretary of the Company. The date of exercise of this Option shall be the day
such notice is received by the Corporate Secretary of the Company or the day such exercise procedures are satisfied, as applicable; provided that in no event shall this Option be considered to have been exercised unless the per share exercise price
of this Option is paid in full (or provided for in accordance with the following sentence) for each of the shares to be acquired on such exercise and all required tax withholding obligations with respect to such exercise have been satisfied or
provided for in accordance with paragraph 8 hereof. The purchase price shall be paid in cash or, in the sole discretion of the Committee and on such terms and conditions as the Corporate Secretary of the Company may prescribe, either in whole or in
part in Common Stock of the Company (either actually or by attestation and valued at their fair market value on the date of exercise of this Option as defined in paragraph 6 hereof) or pursuant to a cashless exercise arranged through a broker or
other third party.
 
	 	 	 
	6. 	 	The fair market value of the shares of Common Stock of the Company on the date of exercise of this Option shall be the closing price in the composite tape of the Common Stock on the New York Stock
Exchange on such date, or, if there was no trading on such date, the closing price on the next preceding date on which there was trading in such shares; provided, however, the Committee in determining such fair market value may utilize such other
exchange, market, or listing as it deems appropriate. For purposes of a cashless exercise, the fair market value of the shares shall be the price at which the shares in payment of the exercise price are sold.
	 	 	 
	7. 	 	The issue and sale of shares of stock upon any exercise of this Option is further subject to full compliance with all then applicable requirements of law, the Securities and Exchange Commission,
the Commissioner of Corporations of the State of California, or other regulatory agencies having jurisdiction over the Company and its shares, and of any exchanges upon which stock of the Company may be listed. The Grantee shall not have the rights
and privileges of a stockholder with respect to shares subject to or purchased under this Option until the date appearing on the certificate(s) issued upon the exercise of this Option.

  
  

 

	8.	 	 The number and price of shares subject to this Option are subject to adjustment upon the occurrence of events such as stock splits, stock dividends and other changes in
capitalization in accordance with Section 6 of the Plan. In the event of any adjustment, the Company will give the Grantee written notice thereof which will set forth the nature of the adjustment. Except as set forth below in this paragraph 8, the
Grantee’s rights with respect to this Option in the event of a Change in Control (as defined in the Plan) shall be determined under Section 6 of the Plan. Notwithstanding the acceleration provisions of paragraph 3 hereof but subject to the
limited exercise periods set forth therein, further subject to the Company’s ability to terminate this Option in connection with a Change in Control in accordance with the provisions of Section 6 of the Plan, and further subject to the
exceptions set forth in Section X of the Guide, this Option shall become fully exercisable as of the date of the Grantee’s termination of employment if either within the Protected Period (as defined in the Guide) corresponding to a Change in
Control of the Company or within twenty-four (24) calendar months following the date of a Change in Control of the Company, the Grantee’s employment by the Company and its subsidiaries is involuntarily terminated by the Company and its
subsidiaries for reasons other than Cause (as defined in Section X of the Guide) or by the Grantee for Good Reason (as defined in Section X of the Guide).
 
	 	 	
	9. 	 	The vesting of this Option requires continued employment through each vesting date as a condition to the vesting of the corresponding installment of this Option. Unless otherwise
expressly provided in paragraph 3 or paragraph 8 hereof, employment before or between the specified vesting dates, even if substantial, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment. Subject to the leave of absence provisions of the Guide, the term “employment” as used herein means active employment by the Company or one of its subsidiaries and salary continuation
without active employment will not, in and of itself, constitute “employment” for purposes hereof (in the case of salary continuation without active employment, the participant’s cessation of active employee status shall be deemed to
be a termination of “employment” for purposes hereof). Nothing contained in this instrument, the Plan, or the Guide constitutes an employment commitment by the Company or any subsidiary, affects the Grantee’s status (if the Grantee is
otherwise an at-will employee) as an employee at will who is subject to termination without cause, confers upon the Grantee any right to continue in the employ of the Company or any subsidiary, or interferes in any way with the right of the Company
or of any subsidiary to terminate such employment at any time.
	 	 	
	10.	 	The Company or the subsidiary which employs the Grantee shall be entitled to require, as a condition of issuing shares upon exercise of this Option, that the Grantee or other person
exercising this Option pay any sums required to be withheld by federal, state or local tax law with respect to the exercise of this Option. Alternatively, the Company or such subsidiary, in its discretion, may make such provisions for the
withholding of any taxes as it deems appropriate.
	 	 	
	11.	 	The Company will pay all federal and state transfer taxes, if any, and other fees and expenses in connection with the issuance of shares upon exercise of this Option.
	 	 	
	12. 	 	The Company may, for all purposes, regard the Grantee as the holder of this Option until written notice of transfer pursuant to paragraph 3 hereof in connection with the
Grantee’s death has been given to and received by the Corporate Secretary of the Company.

  
  
  

	13.	 	The Committee has the discretionary authority to determine any questions as to the date when the Grantee’s employment terminated and the cause of such termination and to
interpret any provision of this instrument, the Plan, the Guide, and any other applicable rules or guides to administration. Any action taken by, or inaction of, the Committee relating to or pursuant to this instrument, the Plan, the Guide, or any
other applicable rules or guides to administration shall be within the absolute discretion of the Committee and shall be conclusive and binding on all persons.
	 	 	 	 
	14.	 	 This Option was granted under the Plan. This Option is governed by, and the Grantee’s rights are subject to, all of the terms and conditions of the Plan, the Guide (except
as expressly provided in paragraph 3 hereof), and any other rules or regulations adopted by the Committee, as the foregoing may be amended from time to time. The Grantee shall have no rights with respect to any amendment of this instrument, the Plan
or the Guide unless such amendment is in writing and signed by a duly authorized officer of the Company.
 

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