Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 56± 248K
2: EX-10 Material Contract 14± 54K
3: EX-10 Material Contract 2± 9K
4: EX-10 Material Contract 2± 11K
5: EX-10 Material Contract 3± 13K
6: EX-10 Material Contract 1 6K
7: EX-10 Material Contract 6± 24K
8: EX-10 Material Contract 2 10K
9: EX-10 Material Contract 4± 18K
10: EX-21 Subsidiaries of the Registrant 1 7K
12: EX-24 Power of Attorney 2 11K
11: EX-27 Financial Data Schedule (Pre-XBRL) 1 7K
EX-10 — Material Contract
| EX-10 | 1st “Page” of 2 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
|---|
EXHIBIT 10(u)
NORTHROP GRUMMAN
TRANSITION PROJECT INCENTIVE PLAN
1. Purpose
The purpose of the Northrop Grumman Transition Project Incentive
Plan (the "Plan") is to impel leadership, decisions and actions of
managers to reduce costs of operations and promote consolidations
and efficiencies with respect to the acquisition of Grumman
Corporation by Northrop Grumman Corporation ("Company").
Accomplishing this purpose while maintaining long-term high
performance and meeting customer requirements will add
significantly to total shareholder value.
2. Term
The Plan shall become effective upon approval by the Northrop
Grumman Board of Directors ("Board") and compensate managers
according to stated provisions for verified cost reductions
attained during the "Plan Measurement Period," defined as the
period between 1 July 1994 and 31 December 1995. This interval
spans the crucial time from commencement of the opportunity for
Northrop Grumman management to affect change in the operations of
Grumman Corporation, to the time by which the purpose of the Plan
must be accomplished. The Plan shall terminate at the close of
business on 1 March 1996. After termination of the Plan, no future
awards may be granted but previously granted awards may be paid if
they are outstanding in accordance with the terms and conditions of
the Plan.
3. Plan Administration
The Compensation and Management Development Committee ("Committee")
of the Board shall be responsible for administration of the Plan.
The Committee shall have full and exclusive power to administer the
plan and to adopt such rules, regulations and guidelines--
consistent with the bylaws of the Corporation--for carrying out the
Plan as it may deem necessary and proper, all of which power shall
be exercised in the best interests of the Company and in keeping
with the objectives of the Plan. This power includes, but is not
limited to, establishing all awards terms and conditions and
adopting Plan modifications, amendments and procedures.
4. Eligibility
Employees in management positions of the Company designated by the
Chief Executive Officer as participants shall be eligible to
receive awards under the Plan. "Employees" shall include persons
on the active payroll of the Company during the term of the Plan
Measurement Period. "Management" shall include any Employee in a
position classification titled manager, director or vice president.
Eligible Managers shall be assigned to one of two groups designated
i) "Senior Executive Group" and ii) "Executive Group." Assignment
to the Senior Executive Group shall be limited to twenty (20)
Managers. Payments of awards under the Plan on a pro rata basis to
participants who, during the Measurement Period, become disabled or
who terminate for any reason--including retirement and resignation-
-shall be at the sole discretion of the Committee and the Board in
accordance with provisions of Section 5.
5. Awards
Awards under the Plan to elected officers of the Company, including
the Chief Executive Officer, shall be reviewed by the Committee and
submitted for approval to the Board. The Committee shall submit to
the Board its recommendation for award under the Plan to the Chief
Executive Officer. The Board, absent employee directors, shall
determine all such awards to elected officers, including the Chief
Executive Officer. The Committee shall determine awards under the
Plan to each other participant. Recommendations for awards and
justifications under the Plan shall be submitted to the Committee
by the Chief Executive Officer within the term of the Plan. Such
awards will be in cash payment to designated recipients before 31
March 1996, net of tax withholding and other deductions and
adjustments consistent with Company policy and payroll practices.
Awards to all participants may not exceed the amount determined by
calculations defined in Section 7 below. Within this limitation,
individual awards under the Plan may vary at the discretion of the
Committee and the Board.
6. Justification for Awards
Awards under the Plan may be granted by the Committee only for
Verified Cost Savings. "Verified Cost Savings" are dollar value
reductions in Company expense that are reflected in official
financial records of the Company in areas such as, but not limited
to, plant, equipment, real estate, production and overhead costs,
scrap, surplus, inventory, debt and capital cost. The Chief
Executive Office shall only submit to the Committee recommendations
for awards under the Plan that are authenticated and corroborated
by tangible, measured dollar value savings instituted and affected
by Plan participants. Notwithstanding this or such other
justifications or assertions of savings attributed to Plan
participants, the decisions of the Committee and the Board as to
Verified Cost Savings, awards and any other factual matters under
the Plan shall not be subject to review or appeal by participants
or any other persons.
7. Award Schedule
When determined by the Committee, awards under the Plan are paid
according to a schedule establishing a defined fraction of total
cost savings payable. The Awards Schedule is derived by the
following formula: (Savings > $250M) X Percentage to Margin X
Performance Coefficient X Percentage Share, where: i) "Savings >
$250M" equals Verified Cost Savings under the Plan exceeding
$250,000,000, and a value that defines the term "Qualified Cost
Savings;" ii) "Percentage to Margin" equals the percentage of
Qualified Cost Savings for the Measurement Period reflected in the
Company's profit in its official financial records; iii)
"Performance Coefficient" equals a percentage of Qualified Cost
Savings eligible for payment to participants; and iv) "Percent
Share" equals the percentage of the product of i, ii and iii to be
distributed among participants of the Senior Executive Group and
the Executive Group. For purposes of this Plan, Percentage to
Margin shall equal 40%. For Qualified Costs Savings greater than
$250,000,000 and less than $260,000,000, Performance Coefficient
shall equal 10%; for Qualified Costs Savings greater than
$260,000,000 but less than $275,000,000, Performance Coefficient
shall equal 15%; for Qualified Costs Savings greater than
$275,000,000 but less than $300,000,000, Performance Coefficient
shall equal 20%; for Qualified Costs Savings greater than
$300,000,000, Performance Coefficient shall equal 25%; for
Qualified Costs Savings greater than $350,000,000, Performance
Coefficient shall equal 0%. Finally, Percent Share shall equal 40%
for the Senior Executive Group and 60% for the Executive Group.
For illustration, the Appendix contains a graphical representation
of Plan awards at the thresholds of saving defined above for an
assumed number of participants.
8. Adjustments and Reorganizations
In the event the Company undergoes a change in control (as defined
by the Committee), or is not the surviving company in a merger or
consolidation with another company or in the event of a liquidation
or reorganization of the Company during the Term of the Plan, the
Committee may provide for adjustments and settlements of awards as,
and at a time, it deems appropriate.
9. Plan Amendment or Termination
Notwithstanding any other provision of the Plan, the Plan may be
amended or terminated by the Committee in its sole and absolute
discretion. Nothing herein creates or shall be deemed to create a
vested right in any participant.
10. Company Benefit Programs
Awards under the Plan shall be deemed a part of a participants
incentive or bonus compensation for purposes of calculating payment
of benefits from any Company benefit plan.
11. Unfunded Plan
Unless otherwise determined by the Committee, the Plan shall be
unfunded and shall not create (or be construed to create) a trust
or separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any participant or
other person.
12. Future Rights
No person shall have any claim or rights to be granted an award
under the Plan, and no participant shall have any rights under the
Plan to be retained in the employ of the Company.
13. Governing Law
The validity, construction and effect of the Plan and any action
taken or relating to the Plan shall be determined in accordance
with the laws of the State of California and applicable Federal
Law.
14. Successors and Assigns
The Plan shall be binding on all successors and assigns of a
participant, including, without limitation, the estate of such
participant and the executor, administrator or trustee of such
estate, or any receiver or trustee in bankruptcy or representative
of a participant's creditors.
APPENDIX
GRAPHIC PRESENTATION OF TRANSITION PROJECT INCENTIVE PLAN AWARDS AT
THE THRESHOLDS OF SAVINGS AS DESCRIBED IN CLAUSE 7 OF THE PLAN.
THE GRAPH ILLUSTRATES EXAMPLES OF AVERAGE INDIVIDUAL PAYOUTS AT
VARYING COST SAVINGS:
GROUP A GROUP B
SAVINGS SENIOR EXECUTIVES EXECUTIVES
(in millions) (in thousands) (in thousands)
Less than 250 0 0
260 8.0 2.4
275 26.0 7.8
300 66.0 19.8
325 116.0 34.8
350 166.0 49.8
↑Top
Filing Submission 0000072945-95-000004 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Sun., Apr. 28, 7:56:10.1pm ET 