NORTHROP GRUMMAN CORPORATION (NYSE:NOC) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangements of Certain Officers
On July 12, 2018, Northrop Grumman Corporation (the “Company”) announced that Wesley G. Bush, Chairman and Chief Executive Officer had notified the Company that he will step down from his position as Chief Executive Officer (“CEO”) on December 31, 2018, and he will retire from his position as Chairman on July 31, 2019. The Company also announced that the Board of Directors of the Company elected Kathy J. Warden, President and Chief Operating Officer, to the position of Chief Executive Officer and President effective January 1, 2019.
At its meeting on September 19, 2018, the Independent Members of the Board of Directors of the Company approved certain compensation and benefits for Ms. Warden in connection with her promotion to the role of CEO, as follows:
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An equity award granted September 19, 2018 under the 2011 Long-Term Incentive Stock Plan with an aggregate value of $5,000,000, comprised 70% of Restricted Performance Stock Rights for the 2018-2020 Performance Period and 30% of Restricted Stock Rights, in accordance with the metrics and terms and conditions previously approved by the Compensation Committee of the Board of Directors of the Company on February 13, 2018. |
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Security protection for Ms. Warden at the same level that such security protection is currently provided to the CEO, effective immediately. |
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Personal liability insurance coverage at the same level as the current CEO, effective at next renewal. |
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An annualized base salary of $1,500,000, effective January 1, 2019. |
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A target annual cash incentive award for 2019 under the applicable cash incentive compensation plan equal to 180% of base salary. |
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Effective January 1, 2019, participation in the same welfare benefit plans and programs in which the CEO currently participates, related to life insurance, disability, accidental death and dismemberment, financial planning and executive physicals, at the same level as currently provided to the CEO. |
At its meeting on September 19, 2018 the Independent Members of the Board of Directors of the Company approved amending the Severance Plan for Elected and Appointed Officers of Northrop Grumman Corporation, effective January 1, 2019, to include the Company’s Chief Executive Officer as an eligible CPC officer.
At its meeting on September 19, 2018 the Independent Members of the Board of Directors of the Company approved certain employee compensation and benefits for Mr. Bush, as follows:
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Effective January 1, 2019: |
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Annualized base salary of $1,000,000. |
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Mr. Bush will not receive any payments under the Company’s cash incentive compensation plan for the 2019 performance year. Mr. Bush will not receive a grant in 2019 under the Company’s long-term incentive stock plan. |
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Continued eligibility as Chairman under the benefit plans and programs in which he is currently a participant as CEO. |
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Continued security protection as currently provided to him as CEO. |
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The terms of Mr. Bush’s 2017 and 2018 grants of RPSRs and RSRs under the 2011 Long-Term Incentive Stock Plan are modified September 19, 2018 to extend each of the 12-month non-compete, 18-month non-solicitation of customers, and 24-month non-solicitation of employees to 36 months and to provide for continued vesting, such that the RPSRs and RSRs outstanding at the time of his retirement on July 31, 2019 will continue to vest as if his employment had continued through the applicable performance and vesting periods. The foregoing description is qualified in its entirety by reference to the modified terms applicable to the RPSR and RSR awards, which are filed as Exhibit 10.1 through 10.4 hereto. |
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The terms of the Special Officer Retiree Medical Plan will be amended, effective October 1, 2018, for vested participants who retire after the amendment date, to remove the life insurance benefit and to allow election of the medical benefit up to age 65. |
At its meeting on September 19, 2018 the Independent Members of the Board of Directors of the Company also authorized the Company or one of its subsidiaries to enter into an agreement with Mr. Bush commencing on August 1, 2019, to provide limited consulting services for the benefit of the Company at the request of the Chief Executive Officer for a period of five years, subject to termination by either party and to renewal or extension by agreement among the parties. Such consulting services fees are not expected to exceed approximately $200,000 per year plus expenses and certain IT services.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
NORTHROP GRUMMAN CORP /DE/ ExhibitEX-10.1 2 form8-k091918xex101.htm MODIFIED TERMS AND CONDITIONS TO 2018 RESTRICTED STOCK RIGHTS Exhibit Exhibit 10.1NORTHROP GRUMMAN CORPORATION MODIFIED TERMS AND CONDITIONS APPLICABLE TO 2018 RESTRICTED STOCK RIGHTS GRANTED UNDER THE 2011 LONG-TERM INCENTIVE STOCK PLANThese Terms and Conditions (“Terms”) apply to certain “Restricted Stock Rights” (“RSRs”) granted by Northrop Grumman Corporation (the “Company”) in 2018 under its 2011 Long-Term Incentive Stock Plan. If you were granted an RSR award by the Company in 2018,…To view the full exhibit click here
About NORTHROP GRUMMAN CORPORATION (NYSE:NOC)
Northrop Grumman Corporation (Northrop Grumman) is a global security company. The Company provides systems, products and solutions in unmanned systems; cyber; command, control, communications and computers (C4), intelligence, surveillance, and reconnaissance (C4ISR); strike aircraft, and logistics and modernization to Government and commercial customers across the world. The Company operates through four segments: Aerospace Systems, Electronic Systems, Information Systems and Technical Services. It offers a portfolio of capabilities and technologies that enable it to deliver systems and solutions for applications. The Company participates in defense and government programs in the United States and abroad. The Company conducts business with the United States Government, the Department of Defense (DoD) and intelligence community. The Company also conducts business with local, state and foreign Governments, and domestic and international commercial customers.
