NORTHROP GRUMMAN 2006 ANNUAL INCENTIVE PLAN
INCENTIVE COMPENSATION PLAN (for NON-SECTION 162(m) OFFICERS)
Northrop Grumman has an annual incentive program to promote the success of the Company and render its operations
profitable to the maximum extent by providing incentives to key employees. Participating employees have varying degrees of
impact on the overall success and performance of the Company. To facilitate the appropriate incentive level for each Participant,
Northrop Grumman utilizes two incentive plans that use common financial and business performance criteria:
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Employees may be eligible for incentive compensation under one of the Northrop Grumman incentive plans as described below.
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The Incentive Compensation Plan (ICP)
The Annual Incentive Plan (AIP)
Company – Northrop Grumman Corporation and such of its subsidiaries as are consolidated in its consolidated financial
Code – The Internal Revenue Code of 1986, as amended from time to time.
Committee – The Compensation and Management Development Committee of the Board of Directors of the Company.
Incentive Compensation – Awards payable under these plans.
Participant – An employee of the Company granted or eligible to receive Incentive Compensation award under one of
Performance Criteria – The performance criteria is a weighted combination of various financial and non-financial factors
approved by the Committee for the Performance Year.
Performance Year – The year with respect to which an award of Incentive Compensation is calculated and paid.
Plans – Collectively, the Incentive Compensation Plan (ICP); and/or the Annual Incentive Plan (AIP).
Plan Year – The fiscal year of Northrop Grumman Corporation.
10. Section 162(m) Officer – An employee who is a “covered empl