Exhibit 10(s)
EMPLOYMENT AGREEMENT
This Agreement is entered into effective January 1, 1996, by and
between Northrop Grumman Corporation, a Delaware corporation
("Northrop Grumman"), and Xxxxxx X. Xxxxxxxx ("Xx. Xxxxxxxx"), an
individual residing in Texas.
WHEREAS, Xx. Xxxxxxxx is currently employed by Northrop Grumman,
the parent and successor in interest to Xxxxxx Aircraft Company
("Xxxxxx") as the Vice President and General Manager of Northrop
Grumman's Commercial Aircraft Division; and
WHEREAS, Xx. Xxxxxxxx currently has in effect an employment
agreement with Xxxxxx ("Xxxxxx Agreement") which expires on
January 1, 1996; and
WHEREAS, Northrop Grumman wishes to continue to employ Xx.
Xxxxxxxx and Xx. Xxxxxxxx desires to continue to be employed by
Northrop Grumman on and after January 1, 1996 upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, it is agreed as follows:
1. Employment
Northrop Grumman hereby offers to continue to employ Xx.
Xxxxxxxx as Vice President and General Manager of its
Commercial Aircraft Division on and after January 1, 1996,
and Xx. Xxxxxxxx hereby accepts such continued employment by
Northrop Grumman, upon the terms and conditions herein set
forth.
2. Term
The term of this Agreement shall commence as of January 1,
1996, and shall expire on August 1, 1997, unless sooner
terminated as hereinafter set forth in Section 6, below. If
this Agreement is not terminated pursuant to Section 6, it
is the intent of the parties that Xx. Xxxxxxxx retire from
employment with Northrop Grumman effective August 1, 1997.
3. Duties
Xx. Xxxxxxxx will, during the term hereof:
(a) Faithfully and diligently do and perform all such
acts and duties and furnish such services as the Chief
Executive Officer of Northrop Grumman (the "CEO") or
the Board of Directors of Northrop Grumman (the
"Board") shall direct, and do and perform all acts in
the ordinary course of Northrop Grumman's business
(within such limits as the CEO or the Board may
prescribe) necessary and conducive to Northrop
Grumman's best interest; and
(b) Devote his full time, energy and skill to the
business of Northrop Grumman and to the promotion of
Northrop Grumman's best interests, except for vacations
and absences made necessary because of illness.
4. Compensation
(a) Subject to the provisions of Section 6 below,
Northrop Grumman shall pay to Xx. Xxxxxxxx for all
services to be performed by him during the term of this
Agreement a fixed salary at the rate of $420,000 per
annum, payable in periodic payments in accordance with
Northrop Grumman's practices for other executive and
managerial employees, as such practices may be
determined from time to time.
(b) Under the terms of the Xxxxxx Agreement, Xx.
Xxxxxxxx' annual salary and/or bonus is offset by
amounts he receives from an annuity purchased by Xxxxxx
and Northrop Grumman under the Xxxxxx Aircraft
Supplemental Executive Retirement Plan ("SERP"). Xx.
Xxxxxxxx shall continue to be a participant in SERP (or
any successor or replacement plan with substantially
identical benefits). However, there shall be no such
offset from the salary payable to Xx. Xxxxxxxx starting
January 1, 1996 pursuant to the terms of this
Agreement. No further purchase of annuities to
recognize additional accrual of retirement benefits
beyond 1994 will be made until August 1, 1997.
(c) Xx. Xxxxxxxx shall be a participant in Northrop
Grumman's Incentive Compensation Plan or any successor
or replacement plan. Xx. Xxxxxxxx shall be assigned a
target bonus level of 55% of his annual base salary
with customary adjustments for individual and unit
performance pursuant to the terms of the Incentive
Compensation Plan.
(d) Xx. Xxxxxxxx shall receive a grant of 8,000 shares
of restricted Northrop Grumman stock pursuant to the
terms of the 1993 Long-Term Stock Incentive Plan.
Vesting of those shares shall be as follows: 3,000 of
these shares shall vest as of February 16, 1996, and
the remaining 5,000 shares shall vest as of August 1,
1997. Vesting shall be contingent upon Xx. Xxxxxxxx
remaining employed by Northrop Grumman as of the
relevant vesting date.
(e) Xx. Xxxxxxxx shall be paid a one-time bonus of
$50,000, with this amount to be paid to him no later
than January 12, 1996.
(f) Northrop Grumman agrees that, unless this
Agreement is terminated pursuant to paragraph 6(b)
below, for the purposes of SERP the Average Monthly
Compensation as defined in SERP shall not be less than
$66,666.67.
(g) All compensation payments to Xx. Xxxxxxxx pursuant
to this Agreement shall be subject to such deductions
as may be required to be made pursuant to law,
government regulation or order, or by agreement with,
or consent of, Xx. Xxxxxxxx.
5. Fringe Benefits and Perquisites
Xx. Xxxxxxxx shall be eligible to participate in the fringe
benefit plans and perquisites normally available to Northrop
Grumman Vice Presidents of comparable status, in accordance
with each plan's rules of eligibility. These benefits and
perquisites are subject to change by Northrop Grumman during
the term of this Agreement during the course of Northrop
Grumman's regular review of its fringe benefit plans and
perquisites applicable to other officers.
6. Termination of Employment
(a) Voluntary Termination by Xx. Xxxxxxxx
Xx. Xxxxxxxx shall have the right to voluntarily
terminate his employment with Northrop Grumman at any
time. In such event, Xx. Xxxxxxxx shall not be
entitled to any further benefits under this Agreement
after the date of his voluntary termination of
employment, including, but not limited to, any
continuation of base salary, bonus awards or other
perquisites and unvested stock awards.
(b) Termination by Northrop Grumman for Certain Specified
Reasons
Notwithstanding any other provision of this
Agreement to the contrary, Northrop Grumman shall have
the right to terminate Xx. Xxxxxxxx' employment for (i)
the willful and continued failure by Xx. Xxxxxxxx to
perform substantially the duties of his position, (ii)
the willful engaging by Xx. Xxxxxxxx in conduct which
is demonstrably injurious to Northrop Grumman,
monetarily or otherwise; or (iii) gross negligence in
performing his job duties. In such event, Xx. Xxxxxxxx
shall not be entitled to any further benefits under
this Agreement after the date of such termination,
including, but not limited to, any continuation of base
salary, bonus awards or other perquisites and unvested
stock awards.
(c) Termination by Northrop Grumman for Other Reasons
Notwithstanding any other provision of this
Agreement to the contrary, Northrop Grumman shall have
the right, in its sole discretion, to terminate Xx.
Xxxxxxxx' employment, with or without cause, for
reasons other than those specified in Section 6(b)
above. In such event, Xx. Xxxxxxxx shall immediately
be paid all sums due as of the date of termination.
Northrop Grumman shall also continue to pay Xx.
Xxxxxxxx his base salary as of the date of his
termination on a monthly basis, with such monthly
payments to terminate as of August 1, 1997. Xx.
Xxxxxxxx shall be eligible for consideration for a pro
rata bonus for work performed by him in the year in
which the termination occurs. Any such pro rata bonus
will be paid by February 15 in the succeeding calendar
year. In addition, Northrop Grumman's management shall
recommend to the Board the accelerated vesting of a pro
rata portion of Xx. Xxxxxxxx' unvested shares under the
Long-Term Stock Incentive Plan.
These arrangements constitute full compensation
for Xx. Xxxxxxxx' loss of any salary, bonuses, stock
options, fringe benefits and other employment rights
and benefits as a result of a termination pursuant to
this Section 6(c). Xx. Xxxxxxxx agrees that his sole
claim for any losses or damages arising out of any such
termination shall be for the recovery of benefits
enumerated in this Section 6(c), and Xx. Xxxxxxxx
hereby waives his rights to any and all other remedies
at law or equity.
(d) Termination Upon Disability
In the event that Xx. Xxxxxxxx becomes permanently
disabled during the term of this Agreement, this
Agreement shall automatically terminate, but Xx.
Xxxxxxxx shall be entitled to the same benefits
accorded to other disabled senior executives of
Northrop Grumman, including long-term disability
insurance plan benefits. Xx. Xxxxxxxx shall be
eligible for consideration for a pro rata bonus for
work performed by him in the year in which the
disability occurs. Any such pro rata bonus will be
paid by February 15 in the succeeding calendar year.
In addition, Northrop Grumman's management shall
recommend to the Board the accelerated vesting of a pro
rata portion of Xx. Xxxxxxxx' unvested shares under the
Long-Term Stock Incentive Plan.
(e) Termination Upon Death of Xx. Xxxxxxxx
In the event that Xx. Xxxxxxxx dies during the
term of this Agreement, this Agreement shall
automatically terminate, but Xx. Xxxxxxxx' estate or
designated beneficiary shall be entitled to receive
payments pursuant to Xx. Xxxxxxxx' life insurance
benefits, any base salary payments earned but not
received by Xx. Xxxxxxxx prior to the date of his
death, and any other benefits provided in accordance
with other plans of Northrop Grumman to which Xx.
Xxxxxxxx would have been entitled. Xx. Xxxxxxxx shall
be eligible for consideration for a pro rata bonus for
work performed by him in the year in which death
occurs. Any such pro rata bonus will be paid by
February 15 in the succeeding calendar year. In
addition, Northrop Grumman's management shall recommend
to the Board the accelerated vesting of a pro rata
portion of Xx. Xxxxxxxx' unvested shares under the Long-
Term Stock Incentive Plan.
(f) Nothing in (a) through (e) above, shall affect the
rights and benefits Xx. Xxxxxxxx, his estate or
designated beneficiaries would otherwise be entitled to
if this Agreement were not in force and effect.
Further, if this Agreement is terminated pursuant to
(a) through (e) above, participation in the Xxxxxx
Aircraft Salaried Health Care Plan (or any successor or
replacement plan) as amended from time to time, shall
be continued for the remainder of the lives of Xx.
Xxxxxxxx and his legally recognized spouse on the
effective date of this Agreement.
7. Complete Agreement
This Agreement represents the complete agreement and
understanding between Northrop Grumman and Xx. Xxxxxxxx
pertaining to the subject matter contained herein, and
supersedes all prior agreements or understandings, written
or oral, between the parties with respect to such subject
matter as of its effective date.
8. Amendment or Modification; Waiver
No provision of this Agreement may be amended or waived
unless such amendment or waiver is agreed to in writing,
signed by Xx. Xxxxxxxx and by a duly authorized officer of
Northrop Grumman. No waiver by any party hereto of any
breach by another party hereto of any condition or provision
of this Agreement to be performed by such other party shall
be deemed a waiver of a similar or dissimilar condition or
provision at the same time or any prior or subsequent time.
9. Arbitration
Any dispute arising out of or concerning Xx. Xxxxxxxx'
employment with Northrop Grumman, including, but not limited
to, disputes concerning the termination of such employment
or the interpretation of this Agreement, shall be resolved
by final and binding arbitration to be conducted in Dallas,
Texas, under rules of the American Arbitration Association
using a single arbitrator. The parties shall each pay one-
half the cost of the arbitrator but otherwise shall bear
their own expenses and attorney's fees. The arbitrator
shall have no authority to award punitive damages to either
party.
10. Severability
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any
reason, the remaining provisions or portions of the
Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by
law.
11. Assignment
This Agreement is personal to Xx. Xxxxxxxx and shall not be
assigned by him. Northrop Grumman may assign this Agreement
without Xx. Xxxxxxxx' consent to any other entity succeeding
to all or substantially all of the assets or business of
Northrop Grumman, whether by merger, consolidation,
acquisition or otherwise. This Agreement shall be binding
upon Northrop Grumman, its successors and permitted assigns,
and Xx. Xxxxxxxx.
12. Applicable Law
This Agreement shall be construed and enforced in accordance
with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement on
________________, ______________, 1995.
XXXXXX X. XXXXXXXX NORTHROP GRUMMAN CORPORATION
______________________________ By:
__________________________________
Xxxxxx Xxxxx
Corporate Vice President and
Chief
Human Resources and
Administrative
Officer
