COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE CHARTER
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").
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.
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.
Duties and Responsibilities
The specific responsibilities of the Committee are as follows:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Review this charter
periodically, at least annually, as conditions dictate and make any
necessary or appropriate amendments.
- Perform an annual performance
evaluation of the Committee.
- 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.
- 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.
- Perform such other duties as
may be lawfully delegated to it by the Board of Directors.