NORTHROP GRUMMAN CORPORATION
SPECIAL AGREEMENT
THIS AGREEMENT is made and entered into as of this _____ day of ____,
1996, by and between Northrop Grumman Corporation, a Delaware corporation
(hereinafter referred to as the "Company") and _____________________________
(hereinafter referred to as the "Executive").
RECITALS
The Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the
Company.
The Executive is a key executive of the Company.
Should the possibility of a Change in Control of the Company arise,
the Board believes it imperative that the Company and the Board should be
able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its shareholders
without concern that the Executive might be distracted by the personal
uncertainties and risks created by the possibility of a Change in Control.
Should the possibility of a Change in Control arise, in addition to
his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the
Board as to whether such Change in Control would be in the best interests
of the Company and its shareholders, and to take such other actions as the
Board.
The Executive and the Company desire that, with respect to those
Executives who have previously entered an Amended and Restated Special
Severance Pay Agreement, might determine to be appropriate, the terms of this
Agreement shall completely replace and supersede the provisions set forth
in the Amended and Restated Special Severance Pay Agreement, entered into
by and between the Company and the Executive prior to the date hereof
(setting forth terms and provisions with respect to the Executive's
entitlement to payments and benefits following a Change in Control of the
Company);
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in Control
of the Company, and to induce the Executive to remain in the employ of the
Company in the face of these circumstances and for other good and valuable
consideration, the Company and the Executive agree as follows:
Article 1. Certain Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Agreement" means this Special Agreement.
(b) "Base Salary" means the salary of record paid to the
Executive as annual salary, excluding amounts received under
incentive or other bonus plans, whether or not deferred.
(c) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
(d) "Beneficiary" means the persons or entities designated or
deemed designated by the Executive pursuant to Section 9.2
herein.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" shall mean the occurrence of either or both of the
following:
(i) The Executive's conviction for committing an act of
fraud, embezzlement, theft, or other act constituting
a felony; or
(ii) The willful engaging by the Executive in gross
misconduct materially and demonstrably injurious to
the Company. However, no act or failure to act, on
the Executive's part shall be considered "willful"
unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that
his action or omission was in the best interest of
the Company.
(g) "Change in Control" of the Company shall be deemed to have
occurred as of the first day that any one or more of the
following conditions shall have been satisfied:
(i) Any Person (other than those Persons in control of
the Company as of the Effective Date, or other than
a trustee or other fiduciary holding securities under
an employee benefit plan of the Company), becomes
the Beneficial Owner, directly or indirectly, of
securities of the Company representing fifteen percent
(15%) or more of the combined voting power of the
Company's then outstanding securities, and for
purposes of this subsection (i) "Person" or "group"
shall not include underwriters acquiring newly-issued
voting securities (or securities convertible into
voting securities) directly from the Company with a
view towards distribution; or
(ii) During any period of two (2) consecutive years (not
including any period prior to the execution of this
Agreement), individuals who at the beginning of such
period constitute the Board (and any new Director,
whose election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of
the Directors then still in office who either were
Directors at the beginning of the period or whose
election or nomination for election was so approved),
cease for any reason to constitute a majority thereof;
or
(iii) The stockholders of the Company approve: (A) a plan
of complete liquidation of the Company; or (B) an
agreement for the sale or disposition of all or
substantially all the Company's assets in one or a
series of related transactions; or (C) a merger,
consolidation, or reorganization of the Company with
or involving any other corporation, other than a
merger, consolidation, or reorganization that would
result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
being converted into voting securities of the
surviving entity), more than seventy-five percent
(75%) of the combined voting power of the voting
securities of the Company (or such surviving entity)
outstanding immediately after such merger,
consolidation, or reorganization.
(h) "Code" means the United States Internal Revenue Code of 1986,
as amended.
(i) "Committee" means the Compensation and Management Development
Committee of the Board, or any other committee appointed by
the Board to perform the functions of the Compensation and
Management Development Committee.
(j) "Company" means Northrop Grumman Corporation, a Delaware
corporation (including any and all subsidiaries), or any
successor thereto as provided in Article 8 herein.
(k) "Disability" means permanent and total disability, within
the meaning of Code Section 22(e)(3), as determined by the
Committee in the exercise of good faith and reasonable
judgment, upon receipt of and in reliance on sufficient
competent medical advice from one or more individuals
licensed and qualified to give professional medical advice.
(l) "Effective Date" means the date this Agreement is approved
by the Board or its delagatee, or such other date as the
Board or its delagatee shall determine.
(m) "Effective Date of Termination" means the date on which a
Qualifying Termination occurs.
(n) "Exchange Act" means the United States Securities Exchange
Act of 1934, as amended.
(o) "Executive" means the individual identified in the first
sentence and on the signature page of this Agreement.
(p) "Good Reason" means, without the Executive's express written
consent, the occurrence after a Change in Control of the
Company of any one or more of the following:
(i) The assignment of the Executive to duties materially
inconsistent with the Executive's authorities, duties,
responsibilities, and status (including titles and
reporting requirements) as an officer of the Company,
or a material reduction or alteration in the nature
or status of the Executive's authorities, duties, or
responsibilities, from their highest level during the
ninety (90) days prior to the Change in Control, other
than an insubstantial and inadvertent act that is
remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(ii) A reduction by the Company of the Executive's Base
Salary as in effect on the Effective Date, or as the
same shall be increased from time to time;
(iii) A significant reduction by the Company of the
Executive's aggregate incentive opportunities under
the Company's short- and long-term incentive programs,
as such opportunities exist on the Effective Date, or
as such opportunities may be increased after the
Effective Date. For this purpose, a significant
reduction in the Executive's incentive opportunities
shall be deemed to have occurred in the event his
targeted annualized award opportunities and/or the
degree of probability of attainment of such annualized
award opportunities are diminished from the levels
and probability of attainment that existed as of the
Effective Date;
(iv) The failure of the Company to maintain the
Executive's relative level of coverage and accruals
under the Company's employee benefit and/or retirement
plans, policies, practices, or arrangements in which
the Executive participates as of the Effective Date,
both in terms of the amount of benefits provided,
amounts accrued and the relative level of the
Executive's participation on a basis at least as
beneficial as, or substantially equivalent to that
on which the Executive participated in such plans
immediately prior to the Effective Date. For this
purpose, the Company may eliminate and/or modify
existing programs and coverage levels; provided,
however, that the Executive's level of coverage under
all such programs must be at least as great as is
such coverage provided to executives who have the
same or lesser levels of reporting responsibilities
within the Company's organization;
(v) The failure of the Company to obtain a satisfactory
agreement from any successor to the Company to assume
and agree to perform the Company's obligations under
this Agreement, as contemplated in Article 8 herein;
and
(vi) Any purported termination by the Company of the
Executive's employment that is not effected pursuant
to a Notice of Termination satisfying the
requirements of Section 2.8 herein, and for purposes
of this Agreement, no such purported termination shall
be effective.
The Executive's right to terminate employment for Good Reason
shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued
employment shall not constitute a consent to, or a waiver
of rights with respect to, any circumstance constituting Good
Reason herein.
(q) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections
13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d).
(r) "Qualifying Termination" means any of the events described
in Section 2.3 herein.
(s) "Severance Benefits" means the payments provided in Section
2.4 herein.
Article 2. Severance Benefits
2.1. Right to Severance Benefits. The Executive shall be entitled
to receive from the Company Severance Benefits as described in Section 2.4
herein, if there has been a Change in Control of the Company and if, within
the six (6) full calendar month period prior to the effective date of a
Change in Control, or within twenty-four (24) calendar months thereafter,
the Executive's employment with the Company shall end for any reason
specified in Section 2.3 herein.
The Executive shall not be entitled to receive Severance Benefits
if he is terminated for Cause, or if his employment with the Company ends
due to death or voluntary termination of employment by the Executive without
Good Reason.
2.2. Services During Certain Events. In the event a Person begins
a tender or exchange offer, circulates a proxy to shareholders of the
Company, or takes other steps seeking to effect a Change in Control, the
Executive agrees that he will not voluntarily leave the employ of the Company
and will render services until such Person has abandoned or terminated his
or its efforts to effect a Change in Control, or until six (6) months after
a Change in Control has occurred; provided, however, that the Company may
terminate the Executive for Cause at any time, and the Executive may
terminate his employment any time after the Change in Control for Good
Reason.
2.3. Qualifying Termination. The occurrence of any one or more
of the following events within twenty-four (24) calendar months after a
Change in Control of the Company shall cause the Company or any successor
to pay immediately the Severance Benefits to the Executive under this
Agreement:
(a) An involuntary termination of the Executive's employment by
the Company for reasons other than Cause;
(b) A voluntary termination of employment by the Executive for
Good Reason;
(c) A successor company fails or refuses to assume by written
instrument the Company's obligations under this Agreement,
as required by Article 8 herein; or
(d) The Company or any successor company repudiates or breaches
any of the provisions of this Agreement.
2.4. Description of Severance Benefits. In the event that the
Executive becomes entitled to receive Severance Benefits, as provided in
Sections 2.1 and 2.3 herein, the Company shall pay to the Executive and
provide him with the following:
(a) An amount equal to three (3) times the highest rate of the
Executive's annual Base Salary in effect at any time up to and
including the Effective Date of Termination.
(b) An amount equal to three (3) times the greater of: (i) the
Executive's average annual bonus earned over the three (3)
full fiscal years prior to the Effective Date of Termination;
or (ii) the Executive's target annual bonus established for
the bonus plan year in which the Executive's Effective Date
of Termination occurs.
(c) An amount equal to the Executive's unpaid Base Salary and
accrued vacation pay through the Effective Date of
Termination, together with a portion of the Executive's
target bonus under the bonus plan in which he participates
for that year, calculated by multiplying the target bonus by
a fraction the numerator of which is the number of days from
January 1 through the Effective Date of Termination and the
denominator of which is 365.
(d) A continuation of all benefits pursuant to any and all
welfare benefit plans under which the Executive and/or
the Executive's family is eligible to receive benefits and/or
coverage as of the effective date of the Change in Control,
including, but not limited to, group life insurance,
hospitalization, disability, medical, dental, and thrift
plans. Such benefits shall be provided to the Executive at
the same premium cost, and at the same coverage level, as in
effect as of the Executive's Effective Date of Termination.
The welfare benefits described in this Subsection 2.4(d)
shall continue following the Effective Date of Termination
for three (3) years; provided, however, that such benefits
shall be discontinued prior to the end of such period in the
event the Executive receives substantially similar benefits
from a subsequent employer, as determined by the Committee.
(e) A lump sum cash payment of the actuarial present value
equivalent of the aggregate benefits accrued by the
Executive as of the Effective Date of Termination under the
terms of the Northrop Grumman Corporation ERISA Supplemental
Plan 1 and ERISA Supplemental Plan 2, and if applicable, the
Grumman Corporation Supplemental Retirement Plan and all
similar excess benefit plans applicable to the Executive.
For this purpose, such benefits shall be calculated under
the assumption that the Executive's employment continued
following the Effective Date of Termination for three (3)
years (i.e., three (3) additional years of service credits
shall be added to the Executive's record of service with the
Company and three (3) additional years to his chronological
age for status and actuarial purposes); provided, however,
that for purposes of determining "final average pay" under
the benefit calculation, the Executive's actual pay history
as of the Effective Date of Termination shall be used,
including for this purpose 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.
(f) A lump sum cash payment of the entire balance of the
Executive's compensation which has been deferred under any
plan or program of the Company together with all interest that
has been credited with respect to such deferred compensation
balance.
(g) For purposes of this Agreement, any acceleration of vesting,
lapse of restrictions and/or payout occasioned by the Change
in Control pursuant to the provisions of long-term incentive
plans and/or individual award agreements under such long-term
incentive plans shall be deemed a benefit within the meaning
of this Section 2.4. Any amounts paid either directly to, or
for the benefit of the Executive pursuant to Article 7 of this
Agreement shall also be deemed a benefit within the meaning
of this Section 2.4.
2.5. Termination for Total and Permanent Disability. Following a
Change in Control of the Company, if the Executive's employment is terminated
due to Disability, the Executive shall receive his Base Salary through the
Effective Date of Termination, at which point in time the Executive's benefits
shall be determined in accordance with the Company's retirement, insurance,
and other applicable plans and programs then in effect, provided, however,
that if immediately prior to the condition or event leading to, or the
commencement of, the Disability of the Executive, the Executive would have
been entitled to invoke any of the subsections of Section 2.3 of this Special
Agreement if he had terminated at that time, then upon termination of his
employment for Disability he shall be entitled to collect immediately his
full Severance Benefits hereunder.
2.6. Termination on Executive's Death. Following a Change in
Control of the Company, if the Executive's employment is terminated by reason
of his death, the Executive's benefits shall be determined in accordance with
the Company's retirement, survivor's benefits, insurance, and other applicable
programs of the Company then in effect.
2.7. Termination for Cause or by the Executive Other Than for Good
Reason. Following a Change in Control of the Company, if the Executive's
employment is terminated either: (i) by the Company for Cause; or (ii) by the
Executive other than for Good Reason, the Company shall pay the Executive his
full Base Salary and accrued vacation through the Effective Date of
Termination, at the rate then in effect, plus all other amounts to which the
Executive is entitled under any compensation plans of the Company, at the time
such payments are due, and the Company shall have no further obligations to
the Executive under this Agreement.
2.8. Notice of Termination. Any termination by the Company for
Cause or by the Executive for Good Reason shall be communicated by Notice
of Termination to the other party. For purposes of this Agreement, a "Notice
of Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated. If the Executive is terminating for Good Reason hereunder, the
Notice of Termination shall be effective on the date specified in Section
9.7 of this Agreement.
Article 3. Form and Timing of Severance Benefits
3.1. Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 2.4(a), 2.4(b), 2.4(c), 2.4(e), and 2.4(f) herein shall
be paid in cash to the Executive in a single lump sum as soon as practicable
following the Effective Date of Termination, but in no event beyond thirty
(30) days from such date.
3.2. Withholding of Taxes. The Company shall be entitled to
withhold from any amounts payable under this Agreement all taxes as legally
shall be required (including, without limitation, any United States Federal
taxes, and any other state, city, or local taxes).
Article 4. Excise Tax Gross-Up
4.1. Equalization Payment. If upon or following a Change in
Control, the tax imposed by Section 4999 of the Code or any similar or
successor tax (the "Excise Tax") applies, solely because of the Change in
Control, to any payments, benefits and/or amounts received by the Executive
as Severance Benefits or otherwise, including, without limitation, any fees,
costs and expenses paid under Article 7 of this Agreement and/or any amounts
received or deemed received, within the meaning of any provision of the Code,
by the Executive as a result of (and not by way of limitation) any automatic
vesting, lapse of restrictions and/or accelerated target or performance
achievement provisions, or otherwise, applicable to outstanding grants or
awards to the Executive under any of the Company's incentive plans, including
without limitation, the 1993 Long Term Incentive Stock Plan, the 1987 Long
Term Incentive Plan and the 1981 Long-Term Incentive Plan, the Company shall
pay to the Executive in cash an additional amount or amounts (the "Gross-Up
Payment(s)") such that the net amount retained by the Executive after the
deduction of any Excise Tax on such payments, benefits and/or amounts so
received and any Federal, state and local income tax and Excise Tax upon the
Gross-Up Payment(s) provided for by this Section 4.1 shall be equal to such
payments, benefits and/or amounts so received had they not been subject to
the Excise Tax. Such payment(s) shall be made by the Company to the Executive
as soon as practicable following the receipt or deemed receipt of any such
payments, benefits and/or amounts so received, and may be satisfied by the
Company making a payment or payments on Executive's account in lieu of
withholding for tax purposes but in all events shall be made within thirty
(30) days of the receipt or deemed receipt by the Executive of any such
payment, benefit and/or amount.
4.2. Tax Computation. For purposes of determining whether any
payments, benefits and/or amounts, including amounts paid as Severance
Benefits, will be subject to Excise Tax, and the amount of any such Excise
Tax:
(a) Any other payments, benefits and/or amounts received or to be
received by the Executive in connection with or contingent
upon a Change in Control of the Company or the Executive's
termination of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement
with the Company, or with any Person whose actions result in
a Change in Control of the Company or any Person affiliated
with the Company or such Persons) shall be combined to
determine whether the Executive has received any "parachute
payment" within the meaning of Section 280G(b)(2) of the Code,
and if so, the amount of any "excess parachute payments"
within the meaning of Section 280G(b)(1) that shall be treated
as subject to the Excise Tax, unless in the opinion of tax
counsel selected by the Company's independent auditors and
acceptable to the Executive, such other payments, benefits
and/or amounts (in whole or in part) do not constitute
parachute payments, or unless such excess parachute payments
represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the
Excise Tax;
(b) The value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay Federal income taxes at the
highest marginal rate of Federal income taxation in the calendar year
in which the Gross-Up Payment is to be made and such highest marginal
rate shall take into account the loss of itemized deductions by the
Executive and shall also include the Executive's share of the
hospital insurance portion of FICA and state and local income taxes
at the highest marginal rate of taxation in the state and locality
of the Executive's residence on the Effective Date of Termination,
net of the maximum reduction in Federal income taxes that could be
obtained from the deduction of such state and local taxes.
4.3. Subsequent Recalculation. In the event the Internal Revenue
Service adjusts the computation of the Company under Section 4.2 herein, so
that the Executive did not receive the greatest net benefit, the Company shall
reimburse the Executive as provided herein for the full amount necessary to
place the Executive in the same after-tax position as he would have been in
had no Excise Taxapplied.
Article 5. The Company's Payment Obligation
5.1. Payment Obligations Absolute. The Company's obligation to
make the payments and the arrangements provided for herein shall be absolute
and unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against the Executive or anyone else. All
amounts payable by the Company hereunder shall be paid without notice or
demand. Each and every payment made hereunder by the Company shall be final,
and the Company shall not seek to recover all or any part of such payment
from the Executive or from whomsoever may be entitled thereto, for any
reasons whatsoever, except as otherwise provided in Article 7 hereof.
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision
of this Agreement, and the obtaining of any such other employment shall in
no event effect any reduction of the Company's obligations to make the
payments and arrangements required to be made under this Agreement, except
to the extent provided in Section 2.4(d) herein.
5.2. Contractual Rights to Benefits. This Agreement establishes
and vests in the Executive a contractual right to the benefits to which he is
entitled hereunder and the Company expressly waives any ability, if possible,
to deny liability for any breach of its contractual commitment hereunder upon
the grounds of lack of consideration, accord and satisfaction or any other
defense. In any dispute arising after a Change in Control as to whether
Executive is entitled to benefits under this Agreement, there shall be a
presumption that Executive is entitled to such benefits and the burden of
proving otherwise shall be on the Company. However, nothing herein contained
shall require or be deemed to require, or prohibit or be deemed to prohibit,
the Company to segregate, earmark, or otherwise set aside any funds or other
assets, in trust or otherwise, to provide for any payments to be made or
required hereunder.
5.3. All payments, benefits and amounts provided under this
Agreementshall be in addition to and not in substitution for any pension
rights under the Company's tax-qualified pension plan, and any disability,
workers' compensation or other Company benefit plan distribution that
Executive is entitled to at his Effective Date of Termination.
Article 6. Term of Agreement
This Agreement will commence on the Effective Date and shall continue
in effect for three (3) full calendar years. However, at the end of such
three-year (3) period and, if extended, at the end of each additional year
thereafter, the term of this Agreement shall be extended automatically for
one (1) additional year, unless the Committee delivers written notice six
(6) months prior to the end of such term, or extended term, to the
Executive, that the Agreement will not be extended. In such case, the
Agreement will terminate at the end of the term, or extended term, then in
progress.
However, in the event a Change in Control occurs during the original
or any extended term, this Agreement will remain in effect for the longer
of: (i) twenty-four (24) months beyond the month in which such Change in
Control occurred; or (ii) until all obligations of the Company hereunder have
been fulfilled, and until all benefits required hereunder have been paid to
the Executive.
Article 7. Legal Remedies
7.1. Payment of Legal Fees. To the extent permitted by law, the
Company shall pay in advance all legal fees, costs of litigation, prejudgment
interest, and other expenses incurred in good faith by the Executive as a
result of the Company's refusal to provide the Severance Benefits to which
the Executive becomes entitled under this Agreement, or as a result of the
Company's contesting the validity, enforceability, or interpretation of this
Agreement, or as a result of any conflict between the parties pertaining to
this Agreement; provided, however, that if it is finally adjudicated that
the Participant did not commence the litigation in good faith and had no
reasonable basis therefor, the Participant shall repay all advanced fees and
expenses and reimburse the Company for its reasonable legal fees and expenses
in connection therewith.
7.2. Arbitration. The Executive shall have the right and option
to elect (in lieu of litigation) to have any dispute or controversy arising
under or in connection with this Agreement settled by arbitration, conducted
before a panel of three (3) arbitrators sitting in a location selected by the
Executive within fifty (50) miles from the location of his job with the
Company, in accordance with the rules of the American Arbitration Association
then in effect.
Judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction. All expenses of such arbitrations, including
the fees and expenses of the counsel for the Executive, shall be advanced
and borne by the Company; provided however, that if it is finally adjudicated
that the Participant did not commence the arbitration in good faith and had
no reasonable basis therefor, the Participant shall repay all advanced fees
and expenses and reimburse the Company for its reasonable legal fees and
expenses in connection therewith.
Article 8. Successors
The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation, or otherwise) of all or substantially all
of the business and/or assets of the Company or of any division or subsidiary
thereof (the business and/or assets of which constitute at least fifty percent
(50%) of the total business and/or assets of the Company) to expressly assume
and agree to perform the Company's obligations under this Agreement in the
same manner and to the same extent that the Company would be required to
perform them if no such succession had taken place but a Change in Control
had occurred. Failure of the Company to obtain such assumption and agreement
in a written instrument prior to the effective date of any such succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if he had terminated his employment with the
Company voluntarily for Good Reason and in such case, the date on which any
such succession becomes effective shall be deemed the Effective Date of
Termination if the Executive so elects, but any delay or failure by the
Executive to so elect shall not be a waiver or release of any rights hereunder
which may be asserted at any time.
This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive
should die while any amount would still be payable to him hereunder had he
continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement, to the Executive's
Beneficiary. If the Executive has not named a Beneficiary, then such amounts
shall be paid to the Executive's devisee, legatee, or other designee, or if
there is no such designee, to the Executive's estate.
Article 9. Miscellaneous
9.1. Employment Status. The Executive and the Company acknowledge
that, except as may be provided under any other agreement between the
Executive and the Company, the employment of the Executive by the Company is
"at will," and, prior to the effective date of a Change in Control, may be
terminated by either the Executive or the Company at any time, subject to
applicable law.
9.2. Beneficiaries. The Executive may designate one or more
persons or entities as the primary and/or contingent Beneficiaries of any
Severance Benefits owing to the Executive under this Agreement. Such
designation must be in the form of a signed writing acceptable to the
Committee. The Executive may make or change such designation at any time.
9.3. Entire Agreement. This Agreement contains the entire
understanding of the Company and the Executive with respect to the subject
matter hereof. In particular, this Agreement completely replaces and
supersedes the terms of the Amended and Restated Special Severance Pay
Agreement, entered into by and between the Company and the Executive, setting
forth the terms and provisions with respect to the Executive's entitlement
to payments and benefits following a Change in Control of the Company. [to
be used for Executives with prior agreement]
9.4. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular, and the singular shall include the plural.
9.5. Severability. In the event any provision of this Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement
shall be construed and enforced as if the illegal or invalid provision had
not been included. Further, the captions of this Agreement are not part of
the provisions hereof and shall have no force and effect.
9.6. Modification. No provision of this Agreement may be
modified, waived, or discharged unless such modification, waiver, or
discharge is agreed to in writing and signed by the Executive and by an
authorized member of the Committee, or by the respective parties' legal
representatives and successors.
9.7. Notice. For purposes of this Agreement, notices including
Notice of Termination for Good Reason and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been
duly given when delivered or on the date stamped as received by the U.S.
Postal Service for delivery by certified or registered mail, postage prepaid,
address: (i) if to Executive, to his latest address as reflected on the
records of the Company, and if to Company: Northrop Grumman Corporation,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President, or
to such other address as Company may furnish to Executive in writing with
specific reference to this Agreement and the importance of the notice,
except that notice of change of address shall be effective only upon receipt.
9.8. Applicable Law. To the extent not preempted by the laws of
the United States, the laws of the State of California shall be the
controlling law in all matters relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
____ day of ______________________, 1996.
Northrop Grumman Corporation Executive
By: _______________________
____________________________ Attest: ___________________