EXHIBIT 10(r)
FIRST AMENDMENT TO
NORTHROP GRUMMAN CORPORATION
SPECIAL AGREEMENT
THIS FIRST AMENDMENT to the Northrop Grumman
Corporation Special Agreement is made and entered into by
and between Northrop Grumman Corporation, a Delaware
corporation (hereinafter, the "Company"), and [insert name],
(hereinafter, the "Executive").
Pursuant to Section 9.6 of the Special Agreement, which
allows modification of the Agreement as agreed to in writing
and signed by the Executive and by an authorized member of
the Committee, and pursuant to delegation of the Committee's
authority to Messrs. Kresa and ▇▇▇▇▇ by the Board of
Directors of the Company at its meeting on July 2, 1997, the
Company and the Executive agree to amend the Special
Agreement as follows:
Section 2.4(e) shall be amended in its entirety to state as
follows:
A lump-sum cash payment of the actuarial present value
equivalent of the aggregate benefits accrued by the
Participant as of the Effective Date of Termination
under the qualified defined benefit pension plan or
plans in which the Participant participates (the
"qualified plan"), and under any and all supplemental
retirement plans in which the Participant participates.
For this purpose, such benefits shall be calculated as
if the Participant's employment continued for three
full years following the Effective Date of Termination
(i.e., the Participant receives three additional years
of vesting and benefit accruals, and his age is also
increased three years from his age as of the Effective
Date of Termination for all purposes under such plans,
including any and all early retirement subsidies);
provided, however, that for purposes of determining
"Final Average Pay" under such plans, the Participant's
actual pay history as of the Effective Date of
Termination shall be used, except that such pay shall
include the higher of (x) the average of the last three
bonuses received by the Executive, or (y) the
Executive's target bonus for the year in which the
Effective Date of Termination occurs. In addition, for
this purpose there shall be offset from the lump sum
payment the actuarial present value equivalent of
benefits payable to the Participant from the qualified
plan as actually accrued by the Participant through the
Effective Date of Termination under the qualified plan
(or such other date as determined under the terms of
the qualified plan); the intent of this provision being
that the qualified plan benefits will be paid in the
normal course under the terms of the qualified plan or
plans, with additional benefits payable as a result of
the imputation of age and service under this provision
being paid from this Plan.
A new second paragraph of Section 2.4(d) shall be
substituted for the existing second paragraph of that
Section, as follows:
The welfare benefits described in this Subsection
2.4(d) shall continue for three years following the
Effective Date of Termination for the Executive and his
spouse; provided, however, that such welfare benefits
that are medical benefits shall be continued for the
life of the Executive and the life of his spouse, and
may be coordinated with and paid secondary to any
benefits that the Executive or his spouse receives from
another employer or from Medicare (following the
Executive and/or his spouse's entitlement to Medicare
benefits).
IN WITNESS WHEREOF, the parties have executed this First
Amendment to the Special Agreement on the ______ day of
August, 1997.
Northrop Grumman Corporation Executive
____________________________ ____________________
▇▇▇▇▇▇ ▇▇▇▇▇, [insert name]
Corporate Vice President and
Chief Human Resources Officer
SECOND AMENDMENT TO
NORTHROP GRUMMAN CORPORATION
SPECIAL AGREEMENT
THIS SECOND AMENDMENT to the Northrop Grumman
Corporation Special Agreement is made by Northrop Grumman
Corporation, a Delaware corporation (hereinafter, the
"Company").
WHEREAS, Northrop Grumman Corporation (the "Company")
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (the "Executive") have previously
entered into an agreement known as the Northrop Grumman
Corporation Special Agreement dated
, 1997 and subsequently amended (the "Agreement"), and
WHEREAS, pursuant to Section 9.6 of the Agreement, the
Company may modify the Agreement with the written consent of
the Executive, and
WHEREAS, the Executive has given the Company written
consent to amend the Agreement with respect to certain
payout provisions and such consent is attached hereto, and
WHEREAS, the Company now wishes to amend such payout
provisions,
NOW THEREFORE, the Agreement shall be amended as
follows:
Section 2.4(e) shall be amended to replace the "A" at the
beginning with the following:
"Except as provided in Appendix A, a"
A new Appendix A shall be added as follows:
APPENDIX A
Manner of Payment of Benefits
1. Coverage: This Appendix applies only to the payment
of benefits under the Executive's nonqualified supplemental
retirement plans. It does not cover "3+3" benefits under
this Special Agreement. The covered benefits are referred to
for purposes of this Appendix as the "Supplemental
Retirement Benefits".
2. Override: The provisions of this Appendix override
any inconsistent provisions in Section 2.4(e) of this
Special Agreement with respect to the manner of payment of
Supplemental Retirement Benefits.
3. Basic Form Of Payment: The Supplemental Retirement
Benefits will be paid to the Executive in the form of a 100%
contingent annuitant annuity, except as provided below.
(a) Payment will be made to the Executive with his
spouse as the contingent annuitant.
(b) The Executive's spouse will be his spouse at the
date of the adoption of this Appendix ("Spouse").
4. Calculation Of Annuity: The calculation of the 100%
contingent annuitant option will be made using the factors
applicable for that payment form under the Northrop Grumman
Retirement Plan.
5. Commencement Of Annuity: The effective annuity
starting date will be the first of the month following the
Executive's termination of employment with the Company's
affiliated group (which may include Lockheed ▇▇▇▇▇▇
Corporation and its affiliates if Lockheed ▇▇▇▇▇▇
Corporation has merged with or acquired Northrop Grumman
Corporation at the time of the Executive's termination).
Actual payment will commence as soon as practicable on or
after the annuity starting date, but no more than 30 days
after the Executive's Effective Date of Termination.
6. Lump Sum In Certain Cases: If the Executive's Spouse
should die prior to the annuity starting date described in
paragraph 5, or if the Spouse's life expectancy should
become shortened as a result of illness diagnosed or an
injury occurring after the date of adoption of this
Appendix, payment will be made to the Executive in a single
lump sum.
(a) The payment will be the present value of the
Executive's entire accrued benefit (but only with respect to
the Supplemental Retirement Benefits).
(b) The procedure for calculating the lump sum,
including the applicable actuarial factors, will be the same
as that used by the Company for making lump sum payments of
Supplemental Retirement Benefits under the Northrop Grumman
Corporation change-in-control Special Agreements with its
elected officers.
(c) Payment will be made as soon as practicable
following the Executive's termination of employment as
described in paragraph 5, but no more than 30 days after the
Executive's Effective Date of Termination.
(d) If the Company and the Executive cannot agree as to
whether the life expectancy of the Spouse has become
shortened as a result of an illness diagnosed or an injury
occurring after the date of adoption of this Appendix, the
issue will be determined by two doctors designated by the
Executive. If the designated doctors cannot agree, payment
will be made in annuity form under paragraph 3.
7. No Vesting: This Appendix is intended only to
describe the manner of payment of benefits to which the
Executive may become entitled under other provisions of this
Special Agreement. This Appendix is not intended to confer
any additional right to benefits not derived from such other
provisions.
IN WITNESS WHEREOF, the Company has executed this Second
Amendment to the Special Agreement on the day of
December, 1997.
NORTHROP GRUMMAN CORPORATION
By:
Attest:
Waiver Under
Northrop Grumman Corporation
Special Agreement
1. This constitutes a waiver of any right the
undersigned Executive may have to object to a modification
(as described in paragraph 3 below) of the Northrop Grumman
Corporation Special Agreement (the "Agreement") between the
undersigned Executive and Northrop Grumman Corporation (the
"Company") entered into on .
2. This waiver is only effective until the date that is
10 days before the date of the vote by Northrop Grumman
shareholders on the proposed merger with Lockheed ▇▇▇▇▇▇
("Final Date").
3. This waiver permits only the following modification
to the Agreement: in lieu of the lump sum payout described
in Section 2.4(e) of the Agreement of supplemental
retirement benefits, such benefits would be paid in the form
of an annuity (or installments), assuming such an option is
available to the Executive in the underlying plan or
agreement on which the supplemental benefits are based (such
as the Northrop Corporation ERISA Supplemental Plan 1, ERISA
Supplemental Program 2, etc.) This will not apply to 3+3
benefits provided under the Agreement or benefits under the
CPC Supplemental Executive Retirement Program.
The Company will determine the form of annuity (or
installments) in its sole discretion. With respect to an
amount attributable to a particular plan or agreement (such
as the Northrop Corporation ERISA Supplemental Plan 1, ERISA
Supplemental Program 2, etc.), the Company will only select
among the options available under that particular plan or
agreement, as to both form and timing of payment.
4. The Company does not promise to make the foregoing
amendment, but may do so at its option during the period of
the waiver.
5. The undersigned Executive understands that the
Company will incur expenses in reliance upon this waiver and
the Executive therefore agrees that this waiver cannot be
revoked before the Final Date except as provided in 6.
6. This waiver may be revoked before the Company amends
the Agreement if the Executive suffers from (a) an
unanticipated emergency that is caused by an event beyond
the control of the Executive and that would result in severe
financial hardship to the Executive if revocation were not
permitted, or (b) an illness or injury which severely
reduces the Executive's life expectancy.
Executed this day of December, 1997.
Northrop Grumman Corporation Executive
By:
Attest:
AMENDMENT TO
THE NORTHROP GRUMMAN CORPORATION
SPECIAL AGREEMENTS
WHEREAS, Northrop Grumman Corporation (the "Company")
and its elected officers have previously entered into a
series of agreements known as the Northrop Grumman
Corporation Special Agreements which provide change in
control benefits (the "Agreements"), and
WHEREAS, pursuant to Section 9.6 of those Agreements,
the Company may modify the Agreements with the written
consent of the officers, and
WHEREAS, the officers listed in Exhibit A hereto (the
"Waiving Officers") have given the Company written consent
to amend the Agreement with respect to certain payout
provisions, and
WHEREAS, the Company now wishes to amend such payout
provisions,
NOW THEREFORE, the Agreements of the Waiving Officers
shall be amended as follows:
1. Section 2.4(e) shall be amended to replace the "A" at
the beginning with the following:
"Except as provided in Appendix A, a"
2. A new Appendix A shall be added as follows:
APPENDIX A
Manner of Payment of Benefits
1. Rescission of Lump Sum Payout: Section 2.4(e) of
this Agreement contains a provision for a lump sum cash
payout of the actuarial present value equivalent of the
aggregate benefits accrued by the Executive under
supplemental nonqualified retirement plans. That lump sum
override of the form of payment provisions of other plans is
rescinded. Accordingly, the form of payment of benefits
under those plans will be determined in accordance with the
provisions of those plans.
2. 3+3 Benefits: The rescission in paragraph 1 is not
meant to have any effect on the lump sum payout provision in
Section 2.4(e) with respect to the 3+3 benefits (i.e., the
imputed three additional years of vesting and benefit
accruals and three years of age).
3. Coordination of Benefits: If the payout provisions
in other supplemental nonqualified retirement plans made
operative by the rescission in paragraph 1 contain reduction
in benefit provisions (such as forfeitures or penalties
attached to a lump sum election), the reduced amounts will
not be restored by this Plan.
Adopted this 13th day of February, 1998.
NORTHROP GRUMMAN CORPORATION
By:
▇▇▇▇▇▇ ▇▇▇▇▇
Attest:
Exhibit A
Waiving Officers
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