Capital Goods

Key Executive Retention Bonus Agreement

The purpose of this agreement between Lockheed Martin Corporation Space Systems Company (the Business Unit) and C. Thomas Marsh (the Executive) is to provide for continuity of management and the success of business operations during a period of substantial change by ensuring the commitment of the Executive to continue to serve diligently in his present assignment for a two-year period. The bonus herein provided is intended to be consideration for the performance and satisfaction of the criteria set forth in Paragraph 2 by the personal services of the Executive himself, and these criteria cannot be satisfied by the services of any other employee. This Agreement may not be assigned or applied to any other employee, including any successor to the Executive.

1. Term of Agreement

This agreement will be in effect from the date of execution through December 31, 2003, unless terminated earlier in accordance with Paragraph 5 or 6.

2. Criteria for Bonus Payment

The executive will be eligible for payments under this agreement if:

                           RETENTION BONUS AGREEMENT

1.  PARTIES:  The parties to this Retention Bonus Agreement ("Agreement") are
    Thomas C. Schievelbein ("Executive") and Northrop Grumman Corporation
    ("Parent").

2.  RECITALS:  This Agreement is made with reference to the following facts:

    2.1  Parent, Purchaser Corp. I, and Newport News Shipbuilding, Inc.
         ("Newport News") intend to enter into an Agreement and Plan of Merger
         (the "Merger Agreement"), pursuant to which Parent shall offer to
          . . .