8-KOther Events

NORTHROP GRUMMAN CORP /DE/ 8-K Report, Corporate Update (May 13, 2013)

Filed May 13, 2013For Securities:NOC

Summary

Northrop Grumman Corporation (NOC) filed an 8-K report on May 13, 2013, to correct an error in its 2013 Notice of Annual Meeting and Proxy Statement. The error pertained to the vesting provisions of Restricted Performance Share Awards (RPSRs) in the event of a change in control. Specifically, the proxy statement incorrectly stated that RPSRs awarded from 2011 onwards would provide for prorated payments in certain change in control scenarios, when in fact, these awards are eligible for full payment, subject to a double trigger (i.e., a change in control event coupled with an involuntary termination or termination for good reason). While this correction impacts the disclosed potential equity vesting amounts for certain named executive officers, the company emphasizes that the actual financial impact on the company is nil, as the correction relates to the calculation of potential payouts to executives. One executive, Mr. Bush, has proactively elected to forgo any additional amounts that could have been due to him as a result of this correction. The filing details the corrected amounts for other affected executives, including Messrs. Palmer, Mills, Pitts, and Ervin, and clarifies that there are no changes to disclosures concerning RSRs or stock options.

Key Highlights

  • 1Correction of an error in the 2013 Proxy Statement regarding the change in control provisions for Restricted Performance Share Awards (RPSRs).
  • 2RPSRs awarded from 2011 onwards provide for full payment, not prorated payment, upon a qualifying change in control event (subject to a double trigger).
  • 3The error affected the disclosed estimated values of accelerated equity vesting for certain named executive officers.
  • 4Executive Mr. Bush has waived any additional potential payout due to this correction.
  • 5Corrected values for Messrs. Palmer, Mills, Pitts, and Ervin have been provided, showing increased potential payouts.
  • 6The correction does not impact the company's financial results or disclosures related to RSRs or stock options.

Frequently Asked Questions

The main error was in the 2013 Proxy Statement, which incorrectly stated that Restricted Performance Share Awards (RPSRs) granted from 2011 onwards would be prorated upon certain change in control events. The correct terms provide for full payment of these awards, subject to a double trigger (change in control plus termination).

No, this correction has no impact on the financial statements or the amounts reported for the company. It only affects the calculation of potential equity payouts to certain named executive officers in the event of a change in control and subsequent termination.

The filing clarifies the terms for potential executive payouts in a change of control scenario. While it increases the potential amounts for some executives (Messrs. Palmer, Mills, Pitts, and Ervin), one executive (Mr. Bush) has opted out of receiving any additional amounts that would have resulted from this correction. The company is making these corrections to ensure accurate disclosure of potential compensation.

No, the filing explicitly states that there are no changes to the disclosures with respect to RSRs (Restricted Stock Awards) or stock options. The correction is solely related to the change in control provisions for RPSRs.