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.