|
APPENDIX A - USE OF
NON-GAAP FINANCIAL MEASURES
|
This Proxy Statement contains
non-GAAP
(accounting
principles generally accepted in the United States of America) financial measures, as defined by SEC Regulation G and indicated by an asterisk in this Proxy Statement. While we believe investors and other users of our financial statements may find
these
non-GAAP
financial measures useful in evaluating our financial performance and operational trends, they should be considered as supplemental in nature, and therefore, should not be considered in
isolation or as a substitute for financial information prepared in accordance with GAAP. Definitions and reconciliations for the
non-GAAP
financial measures contained in this Proxy Statement are provided
below. Other companies may define these measures differently or may utilize different
non-GAAP
financial measures.
Cash flow metrics
:
We use cash flow metrics as internal measures of financial performance and for performance-based compensation decisions. We also
use these measures as a key factor in our planning for, and consideration of, acquisitions, stock repurchases and the payment of dividends. The following cash flow metrics may be useful to investors and other users of our financial statements as a
supplemental measure of our cash performance, but should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with GAAP.
Cash provided by operating activities before
after-tax
discretionary pension contribution
: Cash
provided by operating activities before the
after-tax
impact of discretionary pension contribution. Cash provided by operating activities before
after-tax
discretionary
pension contribution is reconciled below.
Cash Flow from Operations Conversion
:
Cash provided by operating activities before
after-tax
pension contribution as defined above, divided by net income excluding the impact of 2017 tax reform.
Free cash flow
: Net cash provided by operating activities less capital expenditures. Free cash flow is reconciled below.
Free cash flow before
after-tax
discretionary pension contribution
: Free cash flow before the
after-tax
impact of discretionary pension contribution. Free cash flow before
after-tax
discretionary pension contribution is reconciled below.
Cumulative free cash flow
: The aggregate free cash flow before the
after-tax
impact of total
pension funding over a three-year period.
Pension-adjusted metrics
: For financial statement purposes, we account for our employee pension plans in
accordance with GAAP (FAS). However, the cost of these plans is charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS) that govern such plans. We use
pension-adjusted metrics as internal measures of financial performance and for performance-based compensation decisions. The following pension-adjusted measures may be useful to investors and other users of our financial statements in evaluating our
performance based upon the pension costs charged to our contracts.
Net FAS/CAS pension adjustment
: The difference between pension
expense charged to contracts and included as cost in segment operating income in accordance with CAS and pension expense determined in accordance with FAS. Net FAS/CAS pension adjustment is presented below.
Pension-adjusted operating income
: Operating income before the net FAS/CAS pension adjustment as defined above. Pension-adjusted operating
income is reconciled below.
Pension-adjusted operating margin rate
: Pension-adjusted operating income as defined above, divided by
sales. Pension-adjusted operating margin rate is reconciled below.
After-tax
net pension
adjustment
:
The net income impact, after tax at the statutory rate of 35 percent, of the net FAS/CAS pension adjustment as defined above.
After-tax
net pension adjustment is presented
below.
Pension-adjusted net income
:
Net income before the
after-tax
net pension
adjustment as defined above and excluding the impact of 2017 tax reform. Pension-adjusted net income is reconciled below.
Pre-tax
net pension adjustment per share
: The per share impact, before tax, of the net FAS/CAS pension adjustment as defined above.
Pre-tax
net pension adjustment per
share is presented below.
After-tax
net pension adjustment per share
: The per share impact,
after tax at the statutory rate of 35 percent, of the net FAS/CAS pension adjustment as defined above.
After-tax
net pension adjustment per share is presented below.
Pension-adjusted diluted EPS
: Diluted EPS excluding the
after-tax
net pension adjustment per share
as defined above. Pension-adjusted diluted EPS is reconciled below.
Diluted EPS excluding 2017 tax reform and related discretionary pension contribution
impacts:
Net earnings excluding the impacts of 2017 tax reform and our related discretionary pension contribution divided by weighted average diluted shares outstanding. This measure may be useful to investors and other users of our
financial statements in understanding the impact of these items to our
NOTICE OF 2018 ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT
|
A-1
This Proxy/Voting Instruction Card is Solicited on Behalf of The Board of Directors for the 2018 Annual Meeting of Shareholders
The undersigned hereby constitutes and appoints Sheila C. Cheston and Jennifer C. McGarey, and each of them, attorneys and proxies with full power of
substitution, to represent the undersigned and to vote all shares of Common Stock, $1.00 par value, of Northrop Grumman Corporation (the Company), that the undersigned would be entitled to vote if personally present at the 2018 Annual
Meeting of Shareholders of the Company to be held on Wednesday, May 16, 2018, at 8:00 a.m. (Eastern Daylight Time) at the Northrop Grumman Corporation Headquarters, 2980 Fairview Park Drive, Falls Church, Virginia 22042, and at any and all
adjournments or postponements thereof (the Meeting), as herein specified and in such proxyholders discretion upon any other matter that may properly come before the Meeting including without limitation to vote on the election of
such substitute nominees as such proxies may select in the event nominee(s) named on their card become(s) unable to serve as director. By granting this proxy, the undersigned hereby revokes any proxy previously granted by the undersigned.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED UNDER PROPOSAL 1, FOR
PROPOSAL 2, FOR PROPOSAL 3 AND AGAINST PROPOSAL 4.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY, EVEN IF YOU PLAN
TO ATTEND THE ANNUAL MEETING.
If shares are held on your behalf under any of the Company Savings Plans, the proxy serves to provide confidential
instructions to the plan Trustee or Voting Manager who then votes the shares. Instructions must be received by 11:59 p.m. Eastern Time on May 13, 2018 to be included in the tabulation to the plan Trustee or Voting Manager. For shares represented by
proxies not received by this date, the applicable plan Trustee or Voting Manager will treat the received proxies as instructions to vote the respective plan shares in the same proportion as shares held under the plan for which voting instructions
have been received, unless contrary to the Employment Retirement Income Security Act.
(Continued and to be signed on the other side)
Change of Address
Please print new address below.
|
|
|
|
|
|
|
IMPORTANT ANNUAL MEETING INFORMATION
|
|
|
|
|
|
Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
|
|
☒
|
q
PLEASE FOLD ALONG THE PERFORATION,
DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
Proposals The Board of Directors recommends a vote
FOR
all the nominees listed,
FOR
Proposal 2,
FOR
Proposal 3
|
|
|
and
AGAINST
Proposal
4.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
Election of Directors:
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
+
|
|
|
01 - Wesley G. Bush
|
|
☐
|
|
☐
|
|
☐
|
|
06 - William H. Hernandez
|
|
☐
|
|
☐
|
|
☐
|
|
10 - Thomas M. Schoewe
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
02 - Marianne C. Brown
|
|
☐
|
|
☐
|
|
☐
|
|
07 - Madeleine A. Kleiner
|
|
☐
|
|
☐
|
|
☐
|
|
11 - James S. Turley
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
03 - Donald E. Felsinger
|
|
☐
|
|
☐
|
|
☐
|
|
08 - Karl J. Krapek
|
|
☐
|
|
☐
|
|
☐
|
|
12 - Mark A. Welsh III
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
04 - Ann M. Fudge
|
|
☐
|
|
☐
|
|
☐
|
|
09 - Gary Roughead
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
05 - Bruce S. Gordon
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
2.
|
|
Proposal to approve, on an advisory basis, the compensation of the
Companys Named Executive Officers.
|
|
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
3.
|
|
Proposal to ratify the appointment of Deloitte & Touche LLP as the
Companys Independent Auditor for fiscal year ending December 31, 2018.
|
|
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
|
4.
|
|
Proposal to modify the ownership threshold for shareholders to call a
special meeting.
|
|
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
|
|
B
|
|
Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
|
|
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full
title.
|
|
|
|
|
|
|
|
|
|
Date (mm/dd/yyyy) Please print date below.
|
|
|
|
Signature 1 Please keep signature within the box.
|
|
|
|
Signature 2 Please keep signature within the box.
|
q
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
|
|
|
|
|
|
Proxy NORTHROP
GRUMMAN CORPORATION
|
|
|
|
ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2018, 8:00 A.M.
Northrop Grumman Corporation Headquarters
2980 Fairview Park Drive, Falls Church, Virginia 22042
This Proxy/Voting Instruction Card is Solicited on Behalf of The Board of Directors for the 2018 Annual Meeting of Shareholders
The undersigned hereby constitutes and appoints Sheila C. Cheston and Jennifer C. McGarey, and each of them, attorneys and proxies with full power of
substitution, to represent the undersigned and to vote all shares of Common Stock, $1.00 par value, of Northrop Grumman Corporation (the Company), that the undersigned would be entitled to vote if personally present at the 2018 Annual
Meeting of Shareholders of the Company to be held on Wednesday, May 16, 2018, at 8:00 a.m. (Eastern Daylight Time) at the Northrop Grumman Corporation Headquarters, 2980 Fairview Park Drive, Falls Church, Virginia 22042, and at any and all
adjournments or postponements thereof (the Meeting), as herein specified and in such proxyholders discretion upon any other matter that may properly come before the Meeting including without limitation to vote on the election of
such substitute nominees as such proxies may select in the event nominee(s) named on their card become(s) unable to serve as director. By granting this proxy, the undersigned hereby revokes any proxy previously granted by the undersigned.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED UNDER PROPOSAL 1, FOR
PROPOSAL 2, FOR PROPOSAL 3 AND AGAINST PROPOSAL 4.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY, EVEN IF YOU PLAN
TO ATTEND THE ANNUAL MEETING.
If shares are held on your behalf under any of the Company Savings Plans, the proxy serves to provide confidential
instructions to the plan Trustee or Voting Manager who then votes the shares. Instructions must be received by 11:59 p.m. Eastern Time on May 13, 2018 to be included in the tabulation to the plan Trustee or Voting Manager. For shares represented by
proxies not received by this date, the applicable plan Trustee or Voting Manager will treat the received proxies as instructions to vote the respective plan shares in the same proportion as shares held under the plan for which voting instructions
have been received, unless contrary to the Employment Retirement Income Security Act.
(Continued and to be signed on the other side)
|
|
|
|
|
|
|
+
|
IMPORTANT ANNUAL MEETING INFORMATION
|
|
|
|
|
|
|
|
|
|
Vote by Internet
|
|
Go to
www.envisionreports.com/NOC
|
|
Or scan the QR code with your smartphone
|
|
Follow the steps outlined on the secure website
|
Important Notice Regarding the Availability of Proxy Materials for the
Northrop Grumman Corporation Annual Meeting of Shareholders to be Held on May 16, 2018
Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual meeting of shareholders are available on
the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important!
This communication is not a form for voting and presents only an overview of the more complete proxy materials that are available to you on the Internet or
by mail. We encourage you to access and review all of the important information contained in the proxy materials before voting. The proxy statement and annual report to shareholders are available at:
|
|
|
|
|
Easy Online Access A Convenient Way to View Proxy Materials and Vote
When you go online to view materials, you can also vote your shares.
Step 1:
Go to
www.envisionreports.com/NOC
to view the materials
.
Step 2:
Click on
Cast Your Vote or Request Materials
.
Step 3:
Follow the instructions on the screen to log in.
Step 4:
Make your selection as instructed on each screen to select delivery
preferences and vote.
|
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
|
|
|
|
|
Obtaining a Copy of the Proxy Materials If you want to receive a paper or
e-mail
copy of these documents, you must request one. There is no charge to you for requesting a copy.
Please make your request for a copy as instructed on the reverse side on or before May 6, 2018 to facilitate timely delivery.
|
Northrop Grumman Corporations Annual Meeting of Shareholders will be held on May 16, 2018 at Northrop Grumman
Corporation Headquarters, 2980 Fairview Park Drive, Falls Church, Virginia 22042, at 8:00 a.m. Eastern Daylight Time.
Proposals to be voted on at
the meeting are listed below along with the Board of Directors recommendations.
The Board of Directors recommends that you vote
FOR
proposals 13 and
AGAINST
Proposal 4.
|
1.
|
Election of the following 12 nominees as Directors:
|
Wesley G. Bush, Marianne C. Brown, Donald
E. Felsinger, Ann M. Fudge, Bruce S. Gordon, William H. Hernandez, Madeleine A. Kleiner, Karl J. Krapek, Gary Roughead, Thomas M. Schoewe, James S. Turley and Mark A. Welsh III.
|
2.
|
Proposal to approve, on an advisory basis, the compensation of the Companys Named Executive Officers.
|
|
3.
|
Proposal to ratify the appointment of Deloitte & Touche LLP as the Companys Independent Auditor for fiscal year ending December 31, 2018.
|
|
4.
|
Proposal to modify the ownership threshold for shareholders to call a special meeting.
|
PLEASE NOTE
YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or by telephone or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with
you.
Directions to the 2018 annual meeting are available in the proxy statement,
which can be viewed at www.envisionreports.com/NOC.
|
|
|
|
|
|
|
Heres how to order a copy of the proxy materials and select a future delivery preference:
Paper copies:
Current and future paper delivery requests can be submitted via the
telephone, Internet or email options below.
Email copies:
Current and future
email delivery requests must be submitted via the Internet following the instructions below.
If you request an email copy of current materials you will receive an email with a link to the materials.
PLEASE NOTE:
You must use the number in the shaded bar on the reverse side when
requesting a set of proxy materials.
|
|
|
|
|
|
|
|
|
|
g
|
|
Internet
Go to
www.envisionreports.com/NOC
. Click
Cast Your Vote or Request Materials. Follow the instructions to log in and order a paper or email copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials.
|
|
|
g
|
|
Telephone
Call us free of charge at
1-866-641-4276
using a touch-tone phone and follow the instructions to log in and order a paper copy of the materials by mail for the
current meeting. You can also submit a preference to receive a paper copy for future meetings.
|
|
|
g
|
|
Email
Send email to investorvote@computershare.com with
Proxy Materials Northrop Grumman Corporation in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current
meeting materials. You can also state your preference to receive a paper copy for future meetings.
To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by May 6, 2018.
|
02SCPA
March 30, 2018
CA
18-XX
Important Information Regarding Your
Northrop Grumman SharesYour Vote Is Important
To Northrop Grumman Employees:
Northrop Grumman filed its
proxy statement today for the 2018 Annual Meeting of Shareholders. The 2018 proxy statement and 2017 annual report are now available online.
Many of you
hold Northrop Grumman shares through one of the companys savings plans. As shareholders, you have the right to vote on matters that impact the company. Your vote on these matters is important, and Northrop Grumman encourages you to vote your
shares.
Northrop Grumman employees who hold Northrop Grumman shares as participants in the Northrop Grumman Savings Plan or the Northrop Grumman
Financial Security and Savings Program will receive an email
tonight
from the companys transfer agent, Computershare. This email will contain important instructions for viewing the proxy statement and annual report, and for voting your
shares.
This email is an important communication approved by Northrop Grumman. The subject line of the email will read,
Northrop Grumman
Corporation Proxy Meeting Materials
. Note that the EXT warning tag, which appears in the subject line of emails originating outside of Northrop Grumman, will be removed for this message coming directly from Computershare. If
you do not receive this email, or if you have any questions, please contact Computershare at 877-498-8861 or the companys shareholder services at 703-280-3507.
Northrop Grumman values your input as shareholders. Please ensure that your shares are represented at the 2018 Annual Meeting.
Thank you for your attention to this matter.
|
|
Your Northrop Grumman Corporation proxy statement and annual report are now available online and you may also vote your shares for the 2018 Annual Meeting of Shareholders.
|
|
To view the proxy statement and annual report, please visit:
www.envisionreports.com/NOC
|
|
To cast your vote, please visit
www.envisionreports.com/NOC
and follow the
on-screen
instructions. You will be prompted to enter your Control Number (provided above) to access this
voting site.
|
|
Please note that votes submitted through this site must be received by 1:00 a.m., Eastern Time, May 16, 2018.
|
|
If shares are held on your behalf under any of the Company Savings Plans, voting instructions submitted through this site must be received by 11:59 p.m., Eastern Time, Sunday, May 13, 2018.
|
|
Thank you for viewing the 2018 Northrop Grumman Corporation Annual Meeting Materials and for submitting your very important vote.
|
|
REMEMBER, YOUR VOTE IS VERY IMPORTANT, PLEASE VOTE.
|
|
Please note: Registered shareholders may unsubscribe to email notifications at any time by changing their elections at Investor Center.
|
|
Questions? For additional assistance regarding your account please visit
www.computershare.com/ContactUs
. Our virtual agent, Penny, provides answer to many frequently asked questions.
|
|
Please do not reply to this email. This mailbox is not monitored and you will not receive a response.
|
|
This email and any files
transmitted with it are solely intended for the use of the addressee(s) and may contain information that is confidential and privileged. If you receive this email in error, please advise us immediately. Please also disregard the contents of the
email, delete it and destroy any copies immediately.
Computershare Limited and its subsidiaries do not accept liability for the views expressed in the email or for the consequences of any computer viruses that may be transmitted with this email. This email is also subject to
copyright. No part of it should be reproduced, adapted or transmitted without the written consent of the copyright owner.
|