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RETIREMENT TRANSITION
AGREEMENT
| 1.0
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PARTIES : The parties to
this Retirement Transition Agreement (“Agreement”) are
SCOTT J. SEYMOUR (“Mr. Seymour”) and NORTHROP GRUMMAN
CORPORATION (“Northrop Grumman” or the
“Company”). |
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| 2.0
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RECITALS : This Agreement is
made with reference to the following facts: |
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2.1
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Mr. Seymour,
who is currently Corporate Vice President and President, Integrated
Systems, has advised the Company of his wish to retire. |
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2.2
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The Company
wishes to establish a transition plan for Mr. Seymour to transition
his responsibilities to his successor. |
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2.3
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The Company
also wishes to offer Mr. Seymour special vesting for one of his
restricted stock grants in exchange for Mr. Seymour’s
agreement to all of the provisions of this Agreement. |
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2.4
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Mr. Seymour
wishes to accept the Company’s offer and to enter into this
Agreement. |
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| 3.0
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RETIREMENT TRANSITION : Mr. Seymour will
continue to serve as Corporate Vice President and President,
Integrated Systems, through December 31, 2007. During this period,
he will assist in the orderly transition of his responsibilities
and knowledge to his successor. For the period January 1 through
February 29, 2008, Mr. Seymour will continue to serve as an elected
officer of the Company performing such duties as may be assigned to
him by the Chairman and Chief Executive Officer or the President
and Chief Operating Officer. Mr. Seymour’s last day as an
employee shall be February 29, 2008 (“Termination
Date”), and he will retire from employment effective March 1,
2008. |
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| 4.0
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COMPENSATION : |
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4.1
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Base
Salary : Mr. Seymour will
continue to be paid his present annual base salary of $620,000
through February 29, 2008. |
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4.2
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Bonus : |
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4.2.1
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2007 Bonus
: Mr. Seymour will be paid a bonus for 2007
under the Incentive Compensation Plan (“ICP”) in
accordance with the terms of the ICP. This bonus will be paid at
the same time that ICP bonuses are paid to other elected officers,
in late February or early March of 2008. |
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1
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4.2.2
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Pro-Rata Bonus for
2008 : Mr. Seymour will be paid
a pro-rata ICP bonus for 2008. This bonus will be calculated using
the Unit Performance Factor for the Company’s performance
during 2008 and an Individual Performance Factor of 1.0. This
amount will then be prorated by multiplying it by .167
(representing two months of employment during 2008 divided by 12.)
This prorated bonus will be paid in late February or early March of
2009. |
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| 4.3
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Equity
Grants : |
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4.3.1
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Stock
Options : As of his Termination
Date, Mr. Seymour will have unvested options from three separate
option grants dated June 14, 2004, February 15, 2006 and February
28, 2007, respectively. Consistent with the terms of the grant
certificates for each of these option grants, (i) the next
succeeding vesting installment for each of these grants shall vest
as of the Termination Date, (ii) the unvested portions of such
options shall terminate and be forfeited on the Termination Date,
and (iii) Mr. Seymour shall have the lesser of five years following
his Termination Date or until the respective Expiration Date of
each of his vested options to exercise those options (subject, in
the case of a change of control of the Company, to earlier
termination pursuant to the change in control provisions applicable
to the options). |
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4.3.2
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RPSRs
: As of his Termination Date, Mr. Seymour
will have unvested Restricted Performance Stock Rights (RPSRs) from
two separate grants dated February 15, 2006 and February 28, 2007,
respectively. In connection with his retirement on March 1, 2008,
Mr. Seymour will be entitled to pro-rata treatment of these grants
consistent with the retirement provisions of the respective grant
certificates. |
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Following his continued
employment through December 31, 2007, Mr. Seymour will be fully
vested in his RPSR grant of February 28, 2005 for 24,000 RPSRs. For
purposes of clarity, in each case payout of the vested RPSRs
remains subject to the performance-based conditions of the grant.
Any unvested RPSRs will terminate and be forfeited not later than
the Termination Date. |
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2
| 4.3.3
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RSRs |
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4.3.3.1
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2004 Grant
: Following his continuous employment
through February 17, 2008, Mr. Seymour will be fully vested in the
30,000 Restricted Stock Rights (RSRs) granted to him on February
17, 2004. |
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4.3.3.2
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2006 Grant
: On May 16, 2006, Mr. Seymour was granted
15,000 RSRs. By the terms of the grant, these RSRs will be
forfeited if Mr. Seymour retires prior to May 17, 2009. However, in
consideration of Mr. Seymour’s agreement to all of the terms
of this Agreement, and in recognition of the fact that Mr. Seymour
will have served nearly two-thirds of the vesting period for this
grant, the Company will provide for the accelerated vesting of
10,000 of these RSRs as of his Termination Date provided
Mr. |
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Seymour satisfies his
obligations to the Company under this Agreement through that date.
Mr. Seymour acknowledges that he is not entitled to these RSRs
other than by virtue of this Agreement. Any unvested portion of the
RSRs subject to this grant that do not so vest on the Termination
Date shall terminate and be forfeited on the Termination
Date.
| 5.0
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RESIGNATION FROM
OFFICER AND DIRECTOR POSTIONS : Effective
February 29, 2008 Mr. Seymour will resign his positions as an
officer and/or director of the Company and each of its
subsidiaries. |
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| 6.0
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COMPLETE
RELEASE :
In exchange for the consideration described
in Section 3, Mr. Seymour RELEASES the Company from liability for
any claims, demands or causes of action (except as described in
Section 6.5). This Release applies not only to the
“Company” itself, but also to all Northrop Grumman
subsidiaries, affiliates, related companies, predecessors,
successors, its or their employee benefit plans, trustees,
fiduciaries and administrators, and any and all of its and their
respective past or present officers, directors, agents and
employees (“Released Parties”). For purposes of this
Release, the term “Mr. Seymour” includes not only Mr.
Seymour himself, but also his heirs, spouses or former spouses,
executors and agents. Except as described in Section 6.5, this
Release extinguishes all of Mr. Seymour’s claims, demands or
causes of action, known or unknown, against the Company and the
Released Parties, based on anything occurring on or before the date
Mr. Seymour signs this Agreement. |
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3
| 6.1
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This Release includes, but
is not limited to, claims relating to Mr. Seymour's employment or
termination of employment from the Company or from any Released
Party, any rights of continued employment, reinstatement or
reemployment by the Company and any Released Party, claims relating
to or arising under Company or Released Party dispute resolution
procedures, claims for any costs or attorneys’ fees incurred
by Mr. Seymour, and claims for severance benefits under any
severance plan, policy or agreement. |
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| 6.2
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This Release includes, but
is not limited to, claims arising under the Age Discrimination in
Employment Act, the Employee Retirement Income Security Act, the
False Claims Act, Executive Order No. |
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11246, the Civil Rights
Act of 1991, and 42 U.S.C. § 1981. It also includes, but is
not limited to, claims under Title VII of the Civil Rights Act of
1964, which prohibits |
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