COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE CHARTER

Purpose

The Compensation and Management Development Committee ("the Committee") of the Board of Directors of Northrop Grumman Corporation (the "Company") is organized and established by and among the Board of Directors for the purpose of ensuring that the senior executives of the Company are compensated effectively in a manner consistent with the stated compensation philosophy of the Company, internal equity considerations, competitive practice and the requirements of the appropriate regulatory bodies; ensuring that an effective management succession plan is in place; and communicating to stockholders the Company's compensation policies and the reasoning behind such policies as required by the Securities and Exchange Commission (the "SEC") and the New York Stock Exchange (the "NYSE").

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Organization

The Committee shall consist of at least three directors as determined by the Board of Directors, each of whom shall be independent in accordance with SEC and NYSE rules and regulations. Committee members shall be appointed or removed by the Board of Directors.

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Meetings

The Committee shall meet at least four times annually, or more frequently as required with such members of management as determined by the Chairman of the Committee. The agenda for each regularly scheduled meeting shall provide for the opportunity, at the discretion of the Compensation and Management Development Committee, for separate sessions with Company management and for an executive session. The Committee shall report actions taken by the Committee to the Board of Directors on a regular basis.

A majority of the members of the Committee shall constitute a quorum for any meeting. Any action of a majority of the members of the Committee present at any meeting at which a quorum is present shall be an action of the Committee.

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Duties and Responsibilities

The specific responsibilities of the Committee are as follows:

  1. Establish the Company's annual performance objectives under the Company's incentive compensation plans and review and approve the final performance against the approved goals.
  2. Take final action with respect to the base salary and incentive compensation of the elected officers with the exception of the Chief Executive Officer and the Chief Operating Officer and report such actions to the Board of Directors.
  3. Review and approve corporate goals and objectives relevant to Chief Executive Officer compensation, evaluate the Chief Executive Officer's performance in light of those goals and objectives and make recommendations to the Board of Directors with respect to the compensation of the Chief Executive Officer based on this evaluation.
  4. Review management's recommendations and take final action with respect to all awards to be made to the elected officers under the Company's long-term incentive plans or other similar benefit plans which may be adopted by the Board of Directors or the stockholders and in which corporate officers or directors are eligible to participate, and report such awards to the Board of Directors.
  5. Review on a continuing basis the Corporation's general compensation policies and practices and benefits and approve compensation plans in which elected officers are eligible to participate and recommend action to the independent members of the Board of Directors on those plans which will be submitted to the stockholders for final approval.
  6. Review at least annually and report to the Board of Directors actions taken by management concerning the Company's overall executive structure and the steps being taken to assure the succession of qualified management.
  7. Produce a Committee report on executive compensation to be included in the Company's annual proxy statement or annual report on Form 10-K as required by the SEC.
  8. Review this charter periodically, at least annually, as conditions dictate and make any necessary or appropriate amendments.
  9. Perform an annual performance evaluation of the Committee.
  10. Engage outside consultants as the Committee deems necessary with the Committee having sole authority to retain and terminate the consultant and to approve the consultant's fees and other retention terms.
  11. Delegate Committee authority to a subcommittee as the Committee deems necessary, provided that the members of such subcommittees shall meet the same independence requirements as members of the Committee.
  12. Perform such other duties as may be lawfully delegated to it by the Board of Directors.