SEPARATION AGREEMENT AND GENERAL RELEASE

1.0

PARTIES : The parties to this Separation Agreement and General Release (“Agreement”) are Dr. Philip A. Dur (“Dr. Dur”) and NORTHROP GRUMMAN CORPORATION (“Northrop Grumman” or “the Company”).

2.0

RECITALS : This Agreement is made regarding the following facts:

2.1

Dr. Dur is currently an elected officer of the Company. From October 1, 2001 through July 1, 2005 he served as President of the Company’s Ships Systems sector, which is engaged in the design, manufacture, modification, maintenance and overhaul of ships and components thereof to the U.S. Government.

2.2

Dr. Dur and the Company have concluded that it is in their mutual best interests for Dr. Dur to retire from the Company no later than December 31, 2005.

2.3

The Company has concluded that it is in its best interests to offer Dr. Dur the severance benefits set forth in this Agreement in recognition of his contributions to the Company.

2.4

Dr. Dur wishes to accept the Company’s offer, and to enter into this Agreement.

3.0

CONSIDERATION : In exchange for Dr. Dur’s promise to abide by all of the terms of this Agreement, the Company agrees to provide the following consideration:

3.1

Lump-sum Cash Severance . The Company agrees to pay Dr. Dur the sum of $2,900,000, less applicable withholding. This amount will be paid to Dr. Dur in a single lump sum payment within thirty (30) calendar days of the later of the following two events: (a) the expiration of the revocation period set forth in Section 14 of this Agreement, or (b) the date Dr. Dur’s employment with the Company ends (“Separation Date”).

3.2

Continued Vesting in RPSRs: Following his Separation Date, Dr. Dur shall continue to vest in all Restricted Performance Stock Rights (“RPSRs”) granted to him, as if he were actively employed. Such RPSR grants shall be valued and paid to Dr. Dur at the conclusion of the Performance Periods specified therein, at the same time that RPSR grants to other employees which have the same Performance Periods are valued and paid.

3.3

Continued Vesting in Stock Options : Following his Separation Date, Dr. Dur shall continue to vest in all unvested stock options previously granted to him as if he were actively employed. Notwithstanding the provision in the stock option grant certificates which provides that options must be exercised within 90 days following termination of employment (except for certain retirement provisions not applicable here), Dr. Dur shall have five years from his Separation Date to exercise all of his stock options, but in no event shall Dr. Dur be able to exercise an option after the Expiration Date set forth therein.

3.4

Bonus for 2005 . Dr. Dur will be paid a bonus for the 2005 performance year pursuant to the terms of the Performance Achievement Plan, in addition to the lump-sum cash severance payment described in Section 3.1. This bonus will be paid when the annual bonuses are paid to active employees in February or March of 2006. The amount of the bonus will be based on the Corporate Unit Performance Factor (“UPF”) with an Individual Performance Factor (“IPF”) determined by the Company’s Chief Executive Officer.

3.5

Medical and Dental Coverage Continuation . Dr. Dur may elect to continue his medical and dental coverage in effect as of the Separation Date for three years, provided he pays his portion of the cost of such coverage with after-tax dollars. The Company will continue to pay its portion of the cost of Dr. Dur’s medical and dental benefits for the three year period. If rates for active employees increase during this continuation period, Dr. Dur’s contribution will increase proportionately. Also, if medical and dental benefits are modified or terminated for elected officers during this continuation period, Dr. Dur’s benefits shall be subject to this modification or termination. Following the end of this three year period, Dr. Dur shall have the option of continuing his medical and dental coverage until July 1, 2009, but only if he provides reasonable advance notice to the Company of his intent to so, and only if he timely pays the full COBRA rate for such coverage.

3.6

Other Fringe Benefits . Pursuant to the terms of the Executive Perquisite Program for elected officers, Dr. Dur is currently entitled to certain perquisites, including an automobile allowance and reimbursement for certain tax preparation and financial planning fees. All such perquisites shall cease as of Dr. Dur’s Separation Date. However, the Company shall make cash payments to Dr. Dur of (i) $45,000, representing the value of three years of the automobile allowance, and (ii) $27,000, representing the value of three years of the tax preparation/financial planning perquisites. These cash payments shall be made at the same time as the payment set forth in Section 3.1 of this Agreement.

3.7

Outplacement . Dr. Dur will be eligible to be reimbursed for the cost of outplacement services during the one year period following his Separation Date; provided, however that the total cost reimbursed shall be no greater than $50,000.

3.8

Not Pension Eligible Compensation . None of the consideration or payments made pursuant to this Agreement shall be eligible as compensation under any Company retirement, pension or benefit plan.

4.0

SEPARATION FROM EMPLOYMENT : Dr. Dur agrees to retire from the Company effective December 31, 2005. In the event Dr. Dur’s services are no longer needed prior to December 31, 2005, the Company may elect to request that Dr. Dur retire on a date earlier than December 31, 2005. In that event, Dr. Dur shall retire on the date requested by the Company, and the Company shall pay Dr. Dur, in a lump sum, the base salary he would have earned had he worked through December 31 (less applicable withholding), with this payment to be made at the same time as the payment set forth in Section 3.1. The date Dr. Dur retires in accordance with this Section 4.0 shall be his Separation Date. Dr. Dur will remain entitled to the bonus described in Section 3.4, regardless of whether the Company elects to request his retirement before December 31, 2005,

5.0

COMPLETE RELEASE : In exchange for the consideration described in Section 3, Dr. Dur RELEASES and PROMISES NOT TO SUE the Company. For purposes of this Release, the term “Company” includes not only Northrop Grumman Corporation, but also any parents, subsidiaries, affiliates, predecessors, successors, assigns, related companies or entities, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys, accountants, actuaries and employees. For purposes of this Release, the term “Dr. Dur” includes not only Dr. Dur himself, but also his heirs, spouses or former spouses, executors, administrators, agents, attorneys, represen