As filed with the Securities and Exchange Commission on January 18, 2002
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NORTHROP GRUMMAN CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 95-4840775
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1840 Century Park East
Los Angeles, California 90067
(310) 553-6262
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
John H. Mullan, Esq., Corporate Vice President And Secretary
NORTHROP GRUMMAN CORPORATION
1840 Century Park
East Los Angeles, California 90067
(310) 553-6262
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
John D. Hussey, Esq.
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
(213) 620-1780
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Approximate date of commencement of proposed sale to public: As soon as
practicable after this registration statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, please check the following box. [X]
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES REGISTERED PRICE OFFERING REGISTRATION
TO BE REGISTERED (1)(2) PER UNIT (2) PRICE (1)(2) FEE
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Debt Securities, Preferred Stock, $1.00
par value, Common Stock, $1.00 par
value (3)(4), Warrants to Purchase
Debt Securities, Warrants to
Purchase Equity Securities, Stock
Purchase Contracts and Stock
Purchase Units of Northrop
Grumman Corporation.................. $2,000,000,000 $184,000(6)
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Capital Securities of Northrop
Grumman Corporation.................. (5) (5) (5) None
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(1)In no event will the aggregate initial offering price of the Debt
Securities, Preferred Stock, Common Stock, Warrants to Purchase Debt
Securities and Warrants to Purchase Equity Securities, Stock Purchase
Contracts and Stock Purchase Units issued under this Registration Statement
exceed $2,000,000,000 or, if any securities are in any foreign currency
units, the U.S. dollar equivalent of $2,000,000,000, and if any securities
are issued at original issue discount, such greater amount as shall result
in an aggregate offering price not to exceed $2,000,000,000.
(2)Not applicable pursuant to General Instruction II D to Form S-3.
(3)Includes Preferred Share Purchase Rights ("Rights"). Prior to the occurrence
of certain events, the Rights will not be exercisable or evidenced
separately from the Common Stock.
(4)The aggregate amount of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) of the Securities Act.
(5)In addition to any Preferred Stock or Common Stock that may be issued
directly under this Registration Statement, there are being registered
hereunder an indeterminate number of shares of Preferred Stock or Common
Stock as may be issued upon conversion or exchange of Debt Securities or
Preferred Stock, as the case may be. No separate consideration will be
received for any shares of Preferred Stock or Common Stock so issued upon
conversion or exchange.
(6)Pursuant to Rule 457(p) under the Securities Act, $51,450 of the filing fee
paid with respect to Registration Statement No. 333-73484 filed by the
Registrant on November 16, 2001 is offset against the currently due filing
fee.
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
Subject to Completion, Dated January 18, 2002
$2,000,000,000
Northrop Grumman Corporation
Debt Securities
Preferred Stock
Common Stock
Warrants to Purchase Debt Securities
Warrants to Purchase Equity Securities
Stock Purchase Contracts
Stock Purchase Units
You should read this prospectus and any supplement carefully before you
invest.
This prospectus describes debt and equity securities that we may issue and
sell at various times:
. Our prospectus supplements will contain the specific terms of each
issuance of debt or equity securities.
. We can issue debt and equity securities with a total offering price of
up to $2,000,000,000 under this prospectus.
. We may sell the debt and equity securities to or through underwriters,
dealers or agents. We also may sell debt and equity securities directly
to investors.
Our common shares are listed on the New York Stock Exchange under the
trading symbol "NOC." We will not sell any of the securities being offered
without delivery of the applicable prospectus supplement describing the method
and terms of the offering of such series of securities being offered. Any
common stock sold pursuant to a prospectus supplement will be listed on the New
York Stock Exchange, subject to official notice of issuance.
Neither the Securities and Exchange Commission nor any state securities
regulator has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
This prospectus is dated , 2002.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS............................................... 2
WHERE YOU CAN FIND MORE INFORMATION................................. 3
FORWARD-LOOKING STATEMENTS AND IMPORTANT FACTORS.................... 4
NORTHROP GRUMMAN CORPORATION........................................ 6
USE OF PROCEEDS..................................................... 8
RATIO OF EARNINGS TO FIXED CHARGES.................................. 8
DESCRIPTION OF DEBT SECURITIES...................................... 9
DESCRIPTION OF PREFERRED STOCK...................................... 15
DESCRIPTION OF COMMON STOCK......................................... 18
DESCRIPTION OF WARRANTS............................................. 19
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS 20
PLAN OF DISTRIBUTION................................................ 21
VALIDITY OF THE DEBT AND EQUITY SECURITIES.......................... 22
EXPERTS............................................................. 22
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf registration
process, we may sell any combination of the debt and equity securities
described in this prospectus in one or more offerings for total proceeds of up
to $2,000,000,000. This prospectus provides you with a general description of
the securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. This prospectus supplement may add, update or change information
contained in this prospectus. It is important for you to consider the
information contained in this prospectus and any prospectus supplement together
with additional information described under the heading, "Where You Can Find
More Information."
References to "Northrop Grumman" refer to Northrop Grumman Corporation.
Unless the context requires otherwise, references to "we," "us" or "our" refer
collectively to Northrop Grumman and its subsidiaries.
You should rely only on the information incorporated by reference or
provided in the prospectus or a prospectus supplement. We have not authorized
anyone else to provide you with different information. Neither we, nor any
other person on behalf of us, are making an offer to sell or soliciting an
offer to buy any of the securities described in this prospectus or in a
prospectus supplement in any state where the offer is not permitted by law. You
should not assume that the information in this prospectus or a prospectus
supplement is accurate as of any date other than the date on the front of the
documents. There may have been changes in our affairs since the date of the
prospectus or a prospectus supplement.
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WHERE YOU CAN FIND MORE INFORMATION
Northrop Grumman and its subsidiaries have filed annual, quarterly and
current reports, proxy statements and other information with the SEC. You may
read and copy any such report, statement or other information at the SEC's
public reference rooms at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. You may obtain additional information about the public
reference rooms by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a site on the Internet at http://www.sec.gov that contains reports,
proxy statements and other information regarding issuers that file
electronically with the SEC. You may also read such reports, proxy statements
and other documents at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.
We are "incorporating by reference" information into this prospectus. This
means that we are disclosing important information to you by referring you to
another document that has been filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus.
Information that is filed with the SEC after the date of this prospectus will
automatically modify and supersede the information included or incorporated by
reference in this prospectus to the extent that the subsequently filed
information modifies or supersedes the existing information. We incorporate by
reference our future filings with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until we complete this offering.
The following documents filed with the SEC by Northrop Grumman are hereby
incorporated by reference:
. Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
2001, June 30, 2001 and September 30, 2001;
. Current Reports on Form 8-K and Form 8-K/A filed April 17, 2001 and June
14, 2001, respectively; Current Reports on Form 8-K filed November 14,
2001, November 16, 2001, November 21, 2001 and December 14, 2001 and
Current Report on Form 8-K/A filed January 14, 2002; and
. Form 8-A registering our common stock under the Securities Exchange Act
of 1934, filed on March 28, 2001.
The following document filed with the SEC by Northrop Grumman Systems
Corporation (SEC File Number 2-26850) is hereby incorporated by reference:
. Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000.
The following documents filed with the SEC by Litton Industries, Inc. (SEC
File Number 1-3998) are hereby incorporated by reference:
. Annual Report on Form 10-K for the fiscal year ended July 31, 2000; and
. Quarterly Reports on Form 10-Q for the fiscal quarters ended October 31,
2000 and January 31, 2001.
You may request a copy of any of these filings at no cost by writing to or
telephoning us at the following address and telephone number: John H. Mullan,
Corporate Vice President and Secretary, 1840 Century Park East, Los Angeles,
California 90067, telephone (310) 553-6262.
We maintain an Internet site at http://www.northropgrumman.com. The
information contained at our Internet site is not incorporated by reference in
this prospectus, and you should not consider it a part of this prospectus.
Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual document.
You may obtain a copy of any document summarized in this prospectus at no cost
by writing to or telephoning us at the address and telephone number given
above. Each statement regarding a contract, agreement or other document is
qualified in its entirety by reference to the actual document.
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FORWARD-LOOKING STATEMENTS AND IMPORTANT FACTORS
This prospectus and the information incorporated by reference in it contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements concern our plans, expectations
and objectives for future operations. These include statements and assumptions
with respect to expected future revenues, margins, program performance,
earnings and cash flows, acquisitions of new contracts, the outcome of
competitions for new programs, the outcome of contingencies including
litigation and environmental remediation, the effect of completed and planned
acquisitions and divestitures of businesses or business assets, the anticipated
costs of capital investments, and anticipated industry trends. We base these
statements on assumptions and analyses we have made in light of our experience
and our historical trends, current conditions and expected future developments
as well as other factors we believe are appropriate in the circumstances. Our
actual results and trends may differ materially from the information,
statements and assumptions as described, and actual results could be materially
less than our planned results.
Important factors that should be considered in connection with an investment
in our securities and that could cause our actual results to differ materially
from those suggested by the forward-looking statements include:
. We depend on a limited number of customers. We are heavily dependent on
government contracts many of which are only partially funded; the
termination or failure to fund one or more significant contracts could
have a negative impact on our operations. We are a supplier, either
directly or as a subcontractor or team member, to the U.S. Government
and its agencies as well as foreign governments and agencies. These
contracts are subject to each customer's political and budgetary
constraints, changes in short-range and long-range plans, the timing of
contract awards, the congressional budget authorization and
appropriation processes, the relevant government's ability to terminate
contracts for convenience or for default, as well as other risks such as
contractor debarment in the event of certain violations of legal and
regulatory requirements.
. Many of our contracts are fixed price contracts. While firm, fixed price
contracts allow us to benefit from cost savings, they also expose us to
potential cost overruns. If our initial estimates used for calculating
the contract price are incorrect, we can incur losses on those
contracts. In addition, some of our contracts have provisions relating
to cost controls and audit rights and if we fail to meet the terms
specified in those contracts then we may not realize their full
benefits. Our ability to manage costs on these contracts may affect our
financial condition. Lower earnings caused by cost overruns and cost
controls would have an adverse effect on our financial results.
. We are subject to significant competition. Our markets include defense
and commercial areas where we compete with companies of substantial size
and resources. Our success or failure in winning new contracts or follow
on orders for our existing or future products may cause material
fluctuations in our future revenues and operating results.
. Our operations may be subject to events that cause adverse effects on
our ability to meet contract obligations within anticipated cost and
time parameters. We may encounter internal problems and delays in
delivery as a result of issues with respect to design, technology,
licensing and patent rights, labor or materials and components that
prevent us from achieving contract requirements. We may be affected by
delivery or performance issues with key suppliers and subcontractors, as
well as other factors inherent in our businesses that may adversely
affect operating results. Changes in inventory requirements or other
production cost increases may also have a negative impact on our
operating results.
. We must integrate our acquisitions successfully. Acquiring businesses is
a significant challenge. If we do not execute our acquisition and
integration plans for these businesses in accordance with our strategic
timetable, our operating results may be adversely affected. We acquired
several businesses in 2000 and we acquired Litton Industries, Inc. and
Newport News Shipbuilding Inc. in 2001. We believe our integration
processes are well-suited to achieve the anticipated strategic and
operating benefits of
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these acquisitions, but if we do not perform our plans as intended, or
if we encounter unforeseen problems in the acquired businesses, or
problems in those businesses develop subsequent to acquisition, our
operating results may be adversely affected. Among the factors that may
be involved would be unforeseen costs and expenses, previously
undisclosed liabilities, diversion of management focus, and any effects
of complying with government-imposed organizational conflicts of
interest rules as a result of the acquisitions.
. We rely on continuous innovation. We are dependent upon our ability to
anticipate changing needs for defense products, military and civilian
electronic systems and support, and information technology. Our success
is dependent on designing new products which will respond to such
requirements within customers' price limitations.
. We have significant foreign operations and sales, and are therefore
subject to the additional risks associated with international
activities. These risks include currency fluctuations, devaluation,
regional political instability, acts of international terrorists,
compliance with foreign laws and U.S. laws affecting the activities of
U.S. companies overseas, expropriations, antitrust and export/import
controls, taxation, extended span of managerial control, economic
conditions, governmental policies requiring inward investment as a
prerequisite to transacting business on the government level, practical
requirements and restrictions in retaining representatives and
consultants in connection with sales efforts, uprisings, acts of war,
embargoes and cultural and ethical differences. One or more of these or
other international risks could result in an adverse effect on our sales
and operations.
. We assume that any divestiture of non-core businesses and assets will be
completed successfully. Our performance may be affected by our inability
to successfully dispose of assets and businesses that do not fit with or
are no longer appropriate to our strategic plan. If any sales of such
businesses or assets can only be made at a loss, our earnings will be
negatively impacted.
. We are subject to environmental and other liabilities. Our performance
may be affected by known environmental risks, pending litigation and
other loss contingencies, if not resolved within the parameters of our
internal plans, and by unanticipated environmental or other liabilities.
. Our pension income may fluctuate. Pension income, a non-cash item which
is included in our earnings, is based on assumptions of market
performance and actual performance may differ. If an event causes us to
revalue our pension income during the calendar year, the portion of our
earnings attributed to pension income could vary significantly.
. Our indebtedness, primarily incurred in connection with the Litton and
Newport News acquisitions, is approximately $4.229 billion higher at
November 30, 2001 than our indebtedness at December 31, 2000. The
increase in debt will increase demands on our cash resources.
. A substantial portion of our employees in the Ship Systems and Newport
News sectors are represented by labor unions, and unions represent some
of our employees in other sectors as well. If we are unable to maintain
satisfactory relations with the unions, our productivity and
profitability may suffer. Union representation can involve various
activities and tactics, including work stoppages, to achieve negotiated
terms in collective bargaining agreements. A negative impact on timely
deliveries occasioned by a work stoppage could result in problems with
our governmental and other customers and consequently affect operating
results in an adverse manner.
. Our recorded goodwill is no longer being amortized and is subject to
annual impairment tests. In June 2001, the Financial Accounting
Standards Board issued SFAS No. 142 - Goodwill and Other Intangible
Assets. SFAS No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Effective January 1,
2002, we ceased amortizing goodwill, including goodwill recorded in past
business combinations. An initial impairment assessment of goodwill must
be performed and annual impairment tests must be performed thereafter.
We have acquired several businesses for which we have recorded goodwill.
We are currently evaluating the effect that SFAS No. 142 will have on
our results of operations and financial position. If we determine that
some portion of our recorded goodwill has been impaired, our earnings
could be adversely affected.
5
Additional information with respect to risks and uncertainties in our
business is contained in our SEC filings, including, without limitation,
Northrop Systems' Annual Report on Form 10-K/A for the year ended December 31,
2000 and our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001. We intend all forward looking
statements that we make to be subject to safe harbor protection of the federal
securities laws as found in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Accordingly, you should not rely on the accuracy of predictions contained in
forward-looking statements. These statements speak only as of the date of this
prospectus, or, in the case of documents incorporated by reference, the date of
those documents. We cannot undertake any obligation to update our
forward-looking statements to reflect events, circumstances, changes in
expectations or the occurrence of unanticipated events occurring after the date
of those statements.
NORTHROP GRUMMAN CORPORATION
We are a leading global aerospace and defense company providing a wide range
products and services in defense and commercial electronics, systems
integration, information technology and nuclear and non-nuclear shipbuilding
and systems. As a prime contractor, principal subcontractor, partner, or
preferred supplier, we participate in many high-priority defense and commercial
technology programs in the United States and abroad.
We are aligned into six business sectors: Electronic Systems, Information
Technology, Integrated Systems, Newport News, Ship Systems and Component
Technologies.
Electronic Systems designs, develops and manufactures a wide variety of
defense electronics and systems, airspace management systems, precision
weapons, marine systems, logistic systems, space systems and automation and
information systems. These include fire control radars for the F-16 fighter
aircraft, the F-22 air dominance fighter and the Longbow Apache helicopter.
Other key products include the AWACS airborne early warning radar, the Joint
STARS air-to-ground surveillance radar sensor, the Longbow Hellfire missile and
the BAT "brilliant" anti-armor submunition. This sector also provides tactical
military radars and countrywide air defense systems, as well as airborne
electronic countermeasures systems intended to jam enemy aircraft and weapons
systems. Electronic Systems is an international leader in airspace management
as a producer of civilian air traffic control systems. The sector also makes
sophisticated undersea warfare systems and naval propulsion and power
generation systems, as well as postal automation, image processing, material
management, asset track and trace and data communication systems. In addition,
this sector designs, develops and manufactures inertial navigation, guidance
and control, IFF (identification friend or foe) and marine electronic systems,
and provides electronic warfare systems and integrates avionics systems and
shipboard information and communication systems.
Information Technology is a leader in advanced information technologies,
systems and services. Information Technology includes our information systems
businesses, which design, develop, integrate and support computer-based
information systems and provide information technology and services primarily
for government customers. This sector is the prime contractor with the General
Services Administration ANSWER and Millennia programs. Information Technology
is also part of a team working with the Internal Revenue Service to modernize
the U.S. federal tax system. Information Technology has extensive expertise in
command, control, communications, computers, intelligence, surveillance and
reconnaissance (C4ISR). It is a key management support element for major
weapons systems, such as the U.S. Navy's AEGIS class destroyer as well as
mission planning for the U.S. Navy, Air Force and Special Operations Command.
Information Technology provides base operations support for NASA's Kennedy
Space Center, Cape Canaveral Air Station and Patrick Air Force Base, among
others. In addition, this sector provides information technology services to
commercial customers and to our other sectors.
6
Integrated Systems is a leader in design, development and production of
airborne early warning, electronic warfare and surveillance and battlefield
management systems. Integrated Systems is the prime contractor for the Joint
STARS advanced airborne targeting and battle management system and the U.S. Air
Force's B-2 Spirit stealth bomber. It has a principal role in producing the
U.S. Navy's F/A-18 Hornet strike fighter. The sector also is upgrading the
EA-6B Prowler electronic countermeasures aircraft and produces the E-2C Hawkeye
early-warning aircraft. We have a principal role in the Global Hawk program, a
development stage integrated unmanned aerial vehicle for reconnaissance and
surveillance. We are also a principal member of the Lockheed Martin Joint
Strike Fighter Team.
Newport News is the largest non-government-owned shipyard in the U.S., as
measured by each of revenues, size of facilities and number of employees. Its
primary business is the design, construction, repair, maintenance, overhaul,
life-cycle support and refueling of nuclear-powered aircraft carriers and the
design, life-cycle support and construction of nuclear-powered submarines for
the U.S. Navy.
Ship Systems is engaged in the building of large multimission non-nuclear
surface ships for the U.S. Navy as well as other government and commercial
customers and is a provider of overhaul, repair modernization, ship design and
engineering services. Key products include amphibious assault ships (WASP LHD 1
Class, San Antonio LPD 17 Class), destroyers (Arleigh Burke DDG 51 Class),
sealift transport ships (T-AKR Ro/Ro) and double-hulled oil tankers. In
addition, the new Full Service Center, a standalone business within the sector,
offers its customers a full range of ship-related services, which cover the
entire spectrum of an acquisition program, as well as a worldwide network of
fleet support services.
Component Technologies is a premier international supplier of complex
backplanes, connectors, laser crystals. solder materials, specialty products,
oxygen generating systems and other electronic components used primarily in the
aerospace, telecommunications, industrial and computer markets.
Northrop Grumman is a holding company formed in connection with our
acquisition of Litton in April 2001. Our principal executive offices are
located at 1840 Century Park East, Los Angeles, California 90067 and our
telephone number is (310) 553-6262.
7
USE OF PROCEEDS
We will use the net proceeds from the sale of the debt and equity securities
for general corporate purposes. These purposes may include repayment of debt,
working capital needs, capital expenditures, acquisitions and any other general
corporate purpose. If we identify a specific purpose for the net proceeds of an
offering, we will describe that purpose in the applicable prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed charges for
each of the fiscal years ended December 31, 1996 through December 31, 2000 and
for the nine months ended September 30, 2001 and 2000.
Nine Months
Ended September 30, Year Ended December 31,
------------------- ------------------------
2001 2000 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ---- ----
2.32 5.32 5.26 3.78 2.11 2.68 2.50
For purposes of computing the ratios of earnings to fixed charges, earnings
represent earnings from continuing operations before income taxes and fixed
charges, and fixed charges consist of interest expense, the portion of rental
expense calculated to be representative of the interest factor, amortization of
discounts and capitalized expenses related to indebtedness, and preferred stock
dividends. The ratios should be read in conjunction with the financial
statements and other financial data included or incorporated by reference in
this prospectus. See "Where You Can Find More Information."
8
DESCRIPTION OF DEBT SECURITIES
As used in this prospectus, "debt securities" means the senior and
subordinated debentures, notes, bonds and other evidences of indebtedness that
we issue and a trustee authenticates and delivers under the applicable
indenture. We will describe the particular terms of any series of debt
securities, and the extent to which the general terms summarized below may
apply, in the prospectus supplement relating to that series.
We will issue senior debt securities under an existing indenture between
Northrop Grumman and JPMorgan Chase Bank, as trustee. We will issue
subordinated debt securities under a separate indenture between Northrop
Grumman and JPMorgan Chase Bank, as trustee. We have summarized the material
provisions of the indentures on the following pages. We filed the senior
indenture and the form of the subordinated indenture as exhibits to this
registration statement and you should read the indentures for provisions that
may be important to you. If you would like more information on these
provisions, see "Where You Can Find More Information" on how to locate the
indentures.
If we use another trustee or another indenture for a series of debt
securities, we will provide the details in a prospectus supplement. We will
file the forms of any other indentures with the SEC at the time we use them.
Terms
The indentures provide for the issuance of debt securities in one or more
series. A prospectus supplement relating to a series of debt securities will
include specific terms relating to the offering. These terms will include some
or all of the following:
. the title and type of the debt securities;
. whether the debt securities will be senior or subordinated debt
securities and the terms of the subordination provisions;
. any limit on the total principal amount of the debt securities;
. the person who will receive interest payments on any debt securities if
other than the registered holder;
. the price or prices at which we will sell the debt securities;
. the maturity date or dates of the debt securities;
. the rate or rates, which may be fixed or variable, per annum at which
the debt securities will bear interest and the date from which such
interest will accrue;
. the dates on which interest will be payable and the related record dates;
. whether any index, formula or other method will determine payments of
principal or interest and the manner of determining the amount of such
payments;
. the place or places of payments on the debt securities;
. whether the debt securities are redeemable;
. any redemption dates, prices, obligations and restrictions on the debt
securities;
. any mandatory or optional sinking fund or purchase fund or analogous
provisions;
. the denominations of the debt securities if other than $1,000 or
multiples of $1,000;
. the currency of principal and interest payments if other than U.S.
Dollars;
. any provisions granting special rights if certain events happen;
. any deletions from, changes in or additions to the events of default or
the covenants specified in the indenture;
9
. any trustees, authenticating or paying agents, transfer agents,
registrars or other agents for the debt securities if other than
JPMorgan Chase Bank;
. any conversion or exchange features of the debt securities;
. whether we will issue the debt securities as original issue discount
securities for federal income tax purposes;
. any special tax implications of the debt securities;
. the terms of payment upon acceleration; and
. any other material terms of the debt securities.
We may issue debt securities that are convertible into or exchangeable for
our common stock or other securities, or the debt or equity of another company.
If we issue these types of debt securities, we will provide additional
information in a prospectus supplement.
We may sell debt securities at a discount below their stated principal
amount, bearing no interest or interest at a rate that, at the time of
issuance, is different than market rates. When we refer to the principal and
interest on debt securities, we also mean the payment of any additional amounts
that we must pay under the indenture or the debt securities, including amounts
for certain taxes, assessments or other governmental charges which holders of
debt securities must pay.
Denomination, Form, Payment and Transfer
Normally, we will denominate and make payments on debt securities in U.S.
dollars. If we issue debt securities denominated, or with payments, in a
foreign or composite currency, a prospectus supplement will specify the
currency or composite currency.
We may from time to time issue debt securities as registered securities.
This means that holders will be entitled to receive certificates representing
the debt securities registered in their name. You can transfer or exchange debt
securities in registered form without service charge, upon reimbursement of any
taxes or government charges. You can make this transfer or exchange at the
trustee's corporate trust office or at any other office we maintain for such
purposes. If the debt securities are in registered form, we can pay interest by
check mailed to the person in whose name the debt securities are registered on
the days specified in the indenture.
As a general rule, however, we will issue debt securities in book-entry
form. This means that one or more permanent global certificates registered in
the name of a depositary, or a nominee of the depositary, will represent the
debt securities. Only persons who have accounts with depositaries, which are
known as participants, or persons that may hold interests through participants,
can have beneficial ownership interests in global certificates representing a
series of debt securities. The depositary will maintain a computerized
book-entry and transfer system that keeps track of the principal amounts of
debt securities held in the accounts of participants. Participants keep records
of the interests of their clients who have purchased debt securities through
them. Beneficial ownership interests in debt securities issued in book-entry
form may be shown only on, and may be transferred only through, records
maintained by the depositary and its participants. Some states require that
certain purchasers receive securities only in certificate form. These state
laws may limit the ability of beneficial owners to transfer their interests.
The Depository Trust Company, or DTC, frequently acts as the depositary for
debt securities. DTC is owned by a number of its participants and by the NYSE,
AMEX and the NASD. The information below regarding DTC, which DTC provides, is
included informational purposes only. You should not treat it as a
representation, warranty or contract modification of any kind. If we issue the
debt securities of any series in book-entry form and the depositary is someone
other than DTC, we will provide you with additional information in a prospectus
supplement.
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DTC holds securities that its participants deposit. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations. DTC's book-entry system is also available to other
organizations such as securities brokers and dealers, banks and trust companies
that work through a participant. DTC electronically records the settlement
among participants of their securities transactions in deposited securities.
Issuers make interest and principal payments to DTC, which in turn credits
payments to participants' accounts according to their beneficial ownership
interests as reflected in DTC's records. In addition, DTC currently assigns any
voting rights to participants by using an omnibus proxy. These payments and
voting rights are governed by the customary practices between the participants
and holders of beneficial interests.
DTC will be the sole owner of the global certificates. We, the trustee and
the paying agent have no responsibility or liability for the records relating
to beneficial ownership interests in the global certificates or for the
payments of principal and interest due for the accounts of beneficial holders
of interests in the global certificates. The global certificates representing a
series of debt securities normally may not be transferred except by DTC to its
nominees or successors in accordance with the indenture. A series of debt
securities represented by global certificates will be exchangeable for debt
securities in registered form with the same terms in authorized denominations
if:
. DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and we do not appoint a successor depositary within 90 days; or
. we decide not to require all of the debt securities of a series to be
represented by global certificates and notify the trustee of that
decision.
Events of Default
Unless we indicate otherwise in a prospectus supplement, the following are
events of default under the indentures with respect to any issued debt
securities:
. failure to pay the principal or any premium on any debt security of that
series when due;
. failure for 30 days to pay interest on any debt security of that series
when due;
. failure to deposit any sinking fund payment on any debt security of that
series when due;
. failure to perform any other covenant in the indenture that continues
for 90 days after we have been given written notice of such failure; or
. the occurrence of certain events in bankruptcy, insolvency or
reorganization.
An event of default for one series of debt securities does not necessarily
constitute an event of default for any other series. The trustee may withhold
notice to the debt securities holders of any default, except a payment default,
if it considers such action to be in the holders' interests.
If an event of default occurs and continues, the trustee, or the holders of
at least 25% in aggregate principal amount of the debt securities of the
series, may declare the entire principal of all the debt securities of that
series to be due and payable immediately. If this happens, under a number of
circumstances, the holders of a majority of the aggregate principal amount of
the debt securities of that series can void the acceleration of payment.
The indentures provide that the trustee has no obligation to exercise any of
its rights at the direction of any holders, unless the holders offer the
trustee reasonable indemnity. If they provide this indemnification, the holders
of a majority in principal amount of any series of debt securities have the
right to direct any proceeding, remedy, or power available to the trustee with
respect to that series.
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Subordination
The subordinated debt securities will be subordinated and junior in right of
payment to all our senior indebtedness to the extent set forth in the
applicable prospectus supplement.
Conversion Rights
We will describe the terms upon which debt securities may be convertible
into our common stock or other securities in a prospectus supplement. These
terms will include provisions as to whether conversion is mandatory or
optional. They may also include provisions adjusting the number of shares of
our common stock or other securities.
Our Obligations Under the Indenture
Under the indentures, we will agree to the following:
Limitations on Liens. The indentures restrict our ability to encumber our
assets and the assets of our restricted subsidiaries. If we, or any restricted
subsidiary, pledge or mortgage any of our property to secure any debt, then we
will, unless an exception applies, pledge or mortgage the same property to the
trustee to secure the debt securities for as long as such debt is secured by
such property. Restricted subsidiary means one of our subsidiaries that has
substantially all of its assets located in, or carries on substantially all of
its business in, the United States.
This restriction will not apply in various situations. We may encumber
assets if the encumbrance is a permitted lien, as defined below, without regard
to the amount of debt secured by the encumbrance. We may also encumber assets
if the amount of all debt secured by encumbrances, other than some permitted
encumbrances, does not exceed the greater of $1,000,000,000 or 10% of our
consolidated net tangible assets. Consolidated net tangible assets means our
total assets, including the assets of our subsidiaries, as reflected in our
most recent balance sheet, less current liabilities, goodwill, patents and
trademarks. Permitted liens include:
. liens on a corporation's property, stock or debt at the time it becomes
a restricted subsidiary;
. liens on property at the time we or a restricted subsidiary acquires the
property;
. liens securing debt owing by a restricted subsidiary to us or another
restricted subsidiary;
. liens existing at the time the indenture becomes effective;
. liens on property of an entity at the time such entity is merged into or
consolidated with us or a restricted subsidiary or at the time we or a
restricted subsidiary acquire all or substantially all of the assets of
the entity;
. liens in favor of any governmental customer to secure payments or
performance pursuant to any contract or statute, or to secure
indebtedness we incur with respect to the acquisition or construction of
the property subject to the liens, any related indebtedness, or debt
guaranteed by a government or governmental authority; and
. any renewal, extension or replacement for any lien permitted by one of
the exceptions described above.
Limitations on Sale Leaseback Arrangements. Except under various
circumstances, the indentures also restrict our ability and the ability of any
restricted subsidiaries to enter into sale-leaseback transactions. Such an
arrangement is permissible if we or our restricted subsidiary would be
permitted to incur indebtedness secured by a principal property at least equal
in amount to the attributable debt with respect to such arrangement.
Sale-leaseback transaction means, subject to some exceptions, an arrangement
pursuant to which we, or a restricted subsidiary, transfer a principal property
to a person and contemporaneously lease it back from that person. Principal
property means, with some exceptions, any manufacturing plant or facility
located in the
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United States which we or one or more of our restricted subsidiaries owns,
except any plant or facility which our board of directors determines is not of
material importance to our total business. Attributable debt for a sale and
leaseback transaction means the lesser of the fair value of such property as
determined by our board of directors or the present value of the obligation of
the lessee for net rental payments during the remaining term of the lease.
The applicable indenture will not otherwise limit our ability to incur
additional debt, unless we tell you this in a prospectus supplement.
Consolidation, Merger or Sale
We may neither consolidate with nor merge into another corporation nor
transfer all or substantially all of our assets to another corporation unless:
. the successor corporation assumes all of our obligations under the debt
securities and the applicable indenture;
. immediately following the transaction, no event of default and no
circumstances which, after notice or lapse of time or both, would become
an event of default, shall have happened and be continuing; and
. we have delivered to the trustee an officers' certificate and a legal
opinion confirming that we have complied with the applicable indenture.
Defeasance and Covenant Defeasance
Any series of our debt securities is subject to the defeasance and discharge
provisions of the applicable indenture. Under those provisions, we may elect
either:
. to defease and be discharged from any and all our obligations with
respect to those debt securities, except for the rights of holders of
those debt securities to receive payments on the securities solely from
the trust fund established pursuant to the indenture and the obligations
to exchange or register the transfer of the securities, to replace
temporary or mutilated, destroyed, lost or stolen securities, to
maintain an office or agency with respect to the securities and to hold
moneys for payment in trust ("defeasance"); or
. to be released from our obligations with respect to those debt
securities concerning restrictive covenants which are subject to
covenant defeasance, and the occurrence of certain events of default
with respect to those restrictive covenants shall no longer be an event
default ("covenant defeasance").
To invoke defeasance or covenant defeasance with respect to any series of
debt securities, we must irrevocably deposit with the trustee, in trust, money
or U.S. Government Obligations, or both, which will provide money in an amount
sufficient to pay.
As a condition to defeasance or covenant defeasance, we must deliver to the
indenture trustee an opinion of counsel stating that holders of the debt
securities will not recognize gain or loss for federal income tax purposes as a
result of the defeasance or covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if we did not elect the defeasance or covenant
defeasance. We may exercise our defeasance option with respect to the
securities notwithstanding our prior exercise of our covenant defeasance
option. If we exercise our defeasance option, payment of the securities may not
be accelerated by the reference to restrictive covenants which are subject to
covenant defeasance. If we do not comply with our remaining obligations after
exercising our covenant defeasance option and the securities are declared due
and payable because of the occurrence of any event of default, the amount of
money and U.S. Government obligations on deposit in the defeasance trust may be
insufficient to pay amounts due on the securities at the time of the
acceleration. However, we will remain liable for those payments.
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Changes to the Indentures
Holders who own more than 50% in principal amount of the debt securities of
a series can agree with us to change the provisions of the indenture relating
to that series. However, no change can affect the payment terms or the
percentage required to change other terms without the consent of all holders of
debt securities of the affected series.
We may enter into supplemental indentures for other specified purposes and
to make changes that would not materially adversely affect your interests,
including the creation of any new series of debt securities, without the
consent of any holder of debt securities.
Governing Law
New York law will govern the indentures and the debt securities.
Trustee
JPMorgan Chase Bank will serve as trustee under each indenture. It is the
trustee under our existing senior debt securities indenture. If we use a
different trustee for any debt securities, we will let you know in a prospectus
supplement.
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DESCRIPTION OF PREFERRED STOCK
The following description discusses the general terms of the preferred stock
which we have issued and may issue in the future. Our certificate of
incorporation, as amended, the applicable certificate of designation to our
certificate of incorporation and the prospectus supplement will describe the
terms of the related series of preferred stock. We will provide you copies of
these documents upon request.
General. Our Certificate of Incorporation authorizes our board of
directors, from time to time and without further stockholder action, to provide
for the issuance of up to 10,000,000 shares of preferred stock, par value $1.00
per share. Our board of directors may authorize the issuance of preferred stock
in one or more series and may fix the relative rights and preferences of the
shares, including voting powers, dividend rights, liquidation preferences,
redemption rights and conversion privileges.
There are 3,500,000 shares of Series B preferred stock, par value $1.00 per
share, outstanding as of the date of this prospectus. As of the date of this
prospectus, there is no other series of preferred stock outstanding, and there
are no agreements or understandings for the issuance of any other preferred
stock, except for the issuance of Series A Junior Participating Preferred Stock
in connection with preferred share purchase rights attached to our common
stock. See "Description of Common Stock - Preferred Share Purchase Rights."
The shares of any series of preferred stock will be, when issued, fully paid
and non-assessable and holders of preferred stock will not have preemptive
rights.
General Terms of Preferred Stock
The following description discusses the general terms of preferred stock
which we may issue in the future. You should refer to the prospectus supplement
relating to the class or series of preferred stock being offered for the
specific terms of that class or series, including:
. the title and stated value of the preferred stock being offered;
. the number of shares of preferred stock being offered, their liquidation
preference per share and their purchase price;
. the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculating the payment date(s) applicable to the preferred stock being
offered;
. whether dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which dividends on the preferred stock being
offered shall accumulate;
. the procedures for any auction and remarketing, if any, for the
preferred stock being offered;
. the provisions for a sinking fund, if any, for the preferred stock being
offered;
. the provisions for redemption, if applicable, of the preferred stock
being offered;
. any listing of the preferred stock being offered on any securities
exchange or market;
. the terms and conditions, if applicable, upon which the preferred stock
being offered will be convertible into our common stock, including the
conversion price, or the manner of calculating the conversion price, and
the conversion period;
. the terms and conditions, if applicable, upon which the preferred stock
being offered will be exchangeable into debt or equity securities,
including the exchange price, or the manner of calculating the exchange
price, and the exchange period;
. voting rights, if any, of the preferred stock being offered;
. whether interests in the preferred stock being offered will be
represented by depositary shares;
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. a discussion of any material and/or special United States federal income
tax considerations applicable to the preferred stock being offered;
. the relative ranking and preferences of the preferred stock being
offered as to dividend rights and rights upon liquidation, dissolution
or winding up of the affairs of the company;
. any limitations on the issuance of any class or series of preferred
stock ranking senior to or on a parity with the series of preferred
stock being offered as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the company; and
. any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock being offered.
Rank. Unless otherwise specified in the applicable prospectus supplement,
the preferred stock will, with respect to distribution rights and rights upon
liquidation, dissolution or winding up of the company, rank:
(a)senior to all classes or series of our common stock and to all equity
securities the terms of which specifically provide that such equity
securities rank junior to the preferred stock being offered;
(b)junior to all equity securities issued by us the terms of which
specifically provide that such equity securities rank senior to the
preferred stock being offered; and
(c)on a parity with all equity securities issued by us other than those
referred to in clauses (a) and (b) of this subheading.
Distributions. A prospectus supplement will describe the circumstances
relating to distributions on our preferred stock. If our board of directors
approves distributions, holders of our preferred stock of each series will be
entitled to receive distributions out of our assets legally available for
payment to stockholders. These distributions may be cash distributions, or
distributions in kind or in other property. The prospectus supplement will
describe the rates of the distributions and the dates we will make
distributions. Each distribution shall be payable to holders of record on such
record date as shall be fixed by our board of directors. Distributions on any
series of preferred stock, if cumulative, will be cumulative from and after the
date set forth in the applicable prospectus supplement.
Redemption. A prospectus supplement may provide that the preferred stock
will be subject to mandatory redemption or redemption at our option, in whole
or in part. The prospectus supplement will describe the terms, the times and
the redemption prices of the preferred stock.
Liquidation Preference. If we liquidate, dissolve or wind up our affairs,
then, before we make distributions to holders of common stock or any other
class or series of shares of our capital stock ranking junior to the preferred
stock in the distribution of assets, the holders of each series of preferred
stock shall be entitled to receive liquidating distributions out of our assets
legally available for distribution to stockholders. We will make liquidating
distributions in the amount of the liquidation preference set forth in the
applicable prospectus supplement plus an amount equal to all accumulated and
unpaid distributions. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of shares of preferred
stock will have no right or claim to any of our remaining assets.
If we liquidate, dissolve or wind up and we do not have enough legally
available assets to pay the amount of the liquidating distributions on all
outstanding shares of preferred stock and other classes of capital stock
ranking equally with the preferred stock in the distribution of assets, then
the holders of the preferred stock and all other such classes or series of
shares of capital stock shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
Voting Rights. Holders of preferred stock will not have any voting rights,
except as set forth below or as otherwise from time to time required by law, or
as indicated in the applicable prospectus supplement.
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Under the Delaware General Corporation Law, holders of outstanding shares of
a series of preferred stock would be entitled to vote as a separate class on a
proposed amendment to the terms of that series of preferred stock or our
certificate of incorporation if the amendment would increase or decrease the
par value of that series of preferred stock or alter or change the powers,
preferences or special rights of the shares of such class so as to affect them
adversely, in which case the approval of the proposed amendment would require
the affirmative vote of at least a majority of the outstanding shares of that
series of preferred stock.
Conversion Rights. The terms and conditions, if any, upon which any series
of preferred stock is convertible into common stock will be set forth in the
applicable prospectus supplement. These terms will include the following:
. the number of shares of common stock into which the shares of preferred
stock are convertible;
. the conversion price or the manner of calculating the conversion price;
. the conversion date(s) or period(s);
. provisions as to whether conversion will be at the option of the holders
of the preferred stock or at our option; and
. the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of that
series of preferred stock.
Transfer Agent and Registrar. EquiServe Trust Company is the transfer agent
and registrar for our common stock and our Series B preferred stock. We
currently plan to retain EquiServe Trust Company to serve as the transfer agent
and registrar for any other series of preferred stock that we issue.
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DESCRIPTION OF COMMON STOCK
We have authority to issue 400,000,000 shares of common stock, par value
$1.00 per share. As of December 31, 2001, 108,621,459 shares of common stock
were outstanding. The number of shares of common stock outstanding does not
include shares issuable upon exercise of outstanding awards under our stock
compensation plans or a maximum of 7,796,310 shares that are subject to
issuance under our outstanding equity security units. Our common stock is
listed on the New York Stock Exchange and the Pacific Exchange.
Dividends. Dividends may be paid on the common stock and on any class or
series of stock entitled to participate with the common stock as to dividends,
but only when and as declared by our board of directors and only if full
dividends on our Series B preferred stock and all other then outstanding series
of our preferred stock for the then current and prior dividend periods have
been paid or provided for. Holders of Series B preferred stock are entitled to
cumulative cash dividends at a dividend rate per share $7.00 per year.
Voting Rights. Each holder of our common stock is entitled to one vote per
share on all matters submitted to a vote of stockholders and does not have
cumulative voting rights for the election of directors. If accrued dividends on
our Series B preferred stock are not paid for six quarterly dividend periods
(whether or not consecutive), a majority of the holders of Series B preferred
stock, voting separately as a class, will have the right to elect two
directors. If such holders exercise their right to elect two directors to our
board, the size of our board will be increased by two members until the
dividends in default are paid in full or payment for the past-due dividends is
set aside. In addition, the consent of two-thirds of the aggregate number of
outstanding shares of the Series B preferred stock is required in connection
with certain increases in authorized amounts of or changes in stock senior to
our common stock.
Liquidation. If we liquidate, holders of common stock are entitled to
receive all remaining assets available for distribution to stockholders after
satisfaction of our liabilities and the preferential rights of any preferred
stock that may be outstanding at that time. In any liquidation of Northrop
Grumman, each share of our outstanding Series B preferred stock is entitled to
a liquidation preference of $100.00 plus accrued but unpaid dividends, whether
or not declared, before any distribution may be made on the common stock or any
other class or series of our capital stock which is junior to the Series B
preferred stock.
Other Rights. Our outstanding common shares are fully paid and
nonassessable. The holders of our common stock do not have any preemptive,
conversion or redemption rights.
Registrar and Transfer Agent. The registrar and transfer agent for our
common stock is EquiServe Trust Company.
Preferred Share Purchase Rights. We have adopted a rights plan pursuant to
which a preferred share purchase right is attached to each share of our common
stock that is or becomes outstanding prior to October 31, 2008. The rights
become exercisable 10 days after the public announcement that any person or
group has (i) acquired 15% or more of the outstanding shares of our common
stock, or (ii) initiated a tender offer for shares of our common stock, which,
if consummated, would result in any person or group acquiring 15% or more of
the outstanding shares of our common stock. Once exercisable, each right will
entitle the holder to purchase one one-thousandth of a share of our Series A
junior participating preferred stock, par value $1.00 per share, at a price of
$250.00 per one one-thousandth of a share, subject to adjustment.
Alternatively, under certain circumstances involving an acquisition of 15% or
more of our common stock outstanding, each right will entitle its holder to
purchase, at a fifty per cent discount, a number of shares of our common stock
having a market value of two times the exercise price of the right. We may (i)
exchange the rights at an exchange ratio of one share of our common stock per
right, and (ii) redeem the rights, at a price of $0.01 per right, at any time
prior to an acquisition of 15% or more of the outstanding shares of our common
stock by any person or group.
Some Important Charter and Statutory Provisions. Our certificate of
incorporation provides for the division of our board of directors into three
classes of directors, each serving staggered, three year terms. Our
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certificate of incorporation further provides generally that any alteration,
amendment or repeal of the sections of our certificate of incorporation dealing
with the following subjects requires the approval of the holders of at least
80% of our outstanding voting power, unless such action is approved by a
majority of our board of directors:
. the election and classification of the board of directors;
. liability of directors; and
. the vote requirements for amendments to our certificate of incorporation,
If any of these changes to our certificate of incorporation are approved by our
board of directors, the approval of a majority of our outstanding voting power
is required to make these changes effective.
These provisions may have the effect of deterring hostile takeovers or
delaying changes in control or management of the company.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, the statute prohibits a Delaware corporation which
has a class of stock which is listed on a national stock exchange or which has
2,000 or more stockholders of record from engaging in business combination with
an interested stockholder (generally, the beneficial owner of 15% or more of
the corporation's outstanding voting stock) for three years following the time
the stockholder became an interested stockholder, unless, prior to that time,
the corporation's board of directors approved either the business combination
or the transaction that resulted in the stockholder becoming an interested
stockholder, or if at least two-thirds of the outstanding shares not owned by
that interested stockholder approve the business combination, or if, upon
becoming an interested stockholder, that stockholder owned at least 85% of the
outstanding shares, excluding those held by officers, directors and some
employee stock plans. A "business combination" includes a merger, asset sale,
or other transaction resulting in a financial benefit, other than
proportionately as a stockholder, to the interested stockholder.
DESCRIPTION OF WARRANTS
General. We may issue warrants to purchase our debt or equity securities.
We may issue warrants independently or together with any offered securities and
the warrants may be attached to or separate from those offered securities. We
will issue the warrants under warrant agreements to be entered into between us
and a bank or trust company, as warrant agent, all as described in the
applicable prospectus supplement. The warrant agent will act solely as our
agent in connection with the warrants of the series being offered and will not
assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of warrants.
The applicable prospectus supplement will describe the following terms,
where applicable, of warrants in respect of which this prospectus is being
delivered:
. the title of the warrants;
. the designation, amount and terms of the securities for which the
warrants are exercisable;
. the designation and terms of the other securities, if any, with which
the warrants are to be issued and the number of warrants issued with
each such security;
. the price or prices at which the warrants will be issued;
. the aggregate number of warrants;
. any provisions for adjustment of the number or amount of securities
receivable upon exercise of the warrants or the exercise price of the
warrants;
. the price or prices at which the securities purchasable upon exercise of
the warrants may be purchased;
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. if applicable, the date on and after which the warrants and the
securities purchasable upon exercise of the warrants will be separately
transferable;
. if applicable, a discussion of the material United States federal income
tax considerations applicable to the exercise of the warrants;
. any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants;
. the date on which the right to exercise the warrants shall commence, and
the date on which the right shall expire;
. the maximum or minimum number of warrants which may be exercised at any
time; and
. information with respect to book-entry procedures, if any.
Exercise of Warrants. Each warrant will entitle the holder of warrants to
purchase for cash the amount of debt or equity securities, at the exercise
price as shall be set forth in, or be determinable as set forth in, the
prospectus supplement relating to the warrants. Warrants may be exercised at
any time up to the close of business on the expiration date set forth in the
prospectus supplement relating to the warrants. After the close of business on
the expiration date, unexercised warrants will become void.
Warrants may be exercised as set forth in the prospectus supplement relating
to the warrants. When the warrant holder makes the payment and properly
completes and signs the warrant certificate at the corporate trust office of
the warrant agent or any other office indicated in the prospectus supplement,
we will, as soon as possible, forward the debt or equity securities which the
warrant holder has purchased. If the warrant holder exercises the warrant for
less than all of the warrants represented by the warrant certificates, we will
issue a new warrant certificate for the remaining warrants.
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, a specified number
of shares of common stock at a future date or dates, which we refer to herein
as "stock purchase contracts." The price per share of common stock and the
number of shares of common stock may be fixed at the time the stock purchase
contracts are issued or may be determined by reference to a specific formula
set forth in the stock purchase contracts. The stock purchase contracts may be
issued separately or as part of units consisting of a stock purchase contract
and debt securities, obligations of third parties, including U.S. treasury
securities, securing the holders' obligations to purchase the common stock
under the stock purchase contracts, which we refer to herein as "stock purchase
units." The stock purchase contracts may require holders to secure their
obligations thereunder in a specified manner. The stock purchase contracts also
may require us to make periodic payments to the holders of the stock purchase
units or vice versa, and such payments may be unsecured or refunded on some
basis.
The applicable prospectus supplement will describe the terms of the stock
purchase contracts or stock purchase units. The description in the prospectus
supplement will not necessarily be complete, and reference will be made to the
stock purchase contracts, and, if applicable, collateral or depositary
arrangements, relating to the stock purchase contracts or stock purchase units.
Material United States federal income tax considerations applicable to the
stock purchase units and the stock purchase contracts will also be discussed in
the applicable prospectus supplement.
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PLAN OF DISTRIBUTION
We may sell any series of debt or equity securities:
. through underwriters or dealers;
. through agents;
. directly to one or more purchasers; or
. directly to stockholders.
We may effect the distribution of the debt or equity securities from time to
time in one or more transactions either:
. at a fixed price or prices which may be changed;
. at market prices prevailing at the time of sale;
. at prices relating to such prevailing market prices; or
. at negotiated prices.
For each offering of debt or equity securities, the prospectus supplement
will describe the plan of distribution.
If we use underwriters in the sale, they will buy the debt or equity
securities for their own account. The underwriters may then resell the debt or
equity securities in one or more transactions at a fixed public offering price
or at varying prices determined at the time of sale or after the sale. The
obligations of the underwriters to purchase the debt or equity securities will
be subject to various conditions. The underwriters will be obligated to
purchase all the debt or equity securities offered if they purchase any debt or
equity securities. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time
to time.
If we use dealers in the sale, we will sell debt or equity securities to
these dealers as principals. The dealers may then resell the debt or equity
securities to the public at varying prices to be determined by these dealers at
the time of resale. If we use agents in the sale, they will use their
reasonable best efforts to solicit purchasers for the period of their
appointment. If we sell directly, no underwriters or agents would be involved.
We are not making an offer of debt or equity securities in any state that does
not permit such an offer.
Underwriters, dealers and agents that participate in the debt or equity
securities distribution may be deemed to be underwriters as defined in the
Securities Act of 1933. Any discounts, commissions, or profit they receive when
they resell the debt or equity securities may be treated as underwriting
discounts and commissions under that Act. We may have agreements with
underwriters, dealers and agents to indemnify them against various civil
liabilities, including certain liabilities under the Securities Act of 1933, or
to contribute with respect to payments that they may be required to make.
We may authorize underwriters, dealers or agents to solicit offers from
institutions whereby the institution contractually agrees to purchase the debt
or equity securities from us on a future date at a specified price. This type
of contract may be made only with institutions that we specifically approve.
These institutions could include banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. The
underwriters, dealers or agents will not be responsible for the validity or
performance of these contracts.
Underwriters, dealers and agents may engage in transactions with us or
perform services for us in the ordinary course of business.
21
VALIDITY OF THE DEBT AND EQUITY SECURITIES
Sheppard, Mullin, Richter & Hampton LLP, Los Angeles, California, will issue
an opinion about the legality of the debt and equity securities for us.
Underwriters, dealers or agents, who we will identify in a prospectus
supplement may have their counsel opine about certain legal matters relating to
the debt and equity securities.
EXPERTS
The consolidated financial statements and related financial statement
schedule incorporated in this prospectus by reference from Northrop Grumman
Systems Corporation's Annual Report on Form 10-K/A for the year ended
December 31, 2000 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information of Northrop
Grumman for the periods ended March 31, 2001, June 30, 2001 and September 30,
2001 and Northrop Systems for the periods ended March 31, 2000, June 30, 2000
and September 30, 2000 which is incorporated herein by reference, Deloitte &
Touche LLP have applied limited procedures in accordance with professional
standards for a review of such information. However, as stated in their reports
included in Northrop Grumman's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2001, June 30, 2001 and September 30, 2001 and incorporated by
reference herein, they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports
are not "reports" or a "part" of the registration statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the Act.
The consolidated financial statements incorporated in this prospectus by
reference from Litton's Annual Report on Form 10-K for the year ended July 31,
2000 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The audited financial statements of Newport News Shipbuilding Inc.
incorporated by reference in this prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said reports.
22
[LOGO] Northrop Grumman
[LOGO OF NORTHROP GRUMMAN CORPORATION]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses, other than underwriting
discounts and commissions, expected to be incurred in connection with the
offering or offerings described in this registration statement. All amounts are
estimated except the Securities and Exchange Commission registration fee.
Securities and Exchange Commission registration fee $184,000
Trustee fees and expenses.......................... 20,000
Legal fees and expenses............................ 175,000
Accounting fees and expenses....................... 40,000
Printing and engraving fees and expenses........... 100,000
Rating agency fees................................. 150,000
Blue Sky fees and expenses (including legal fees).. 20,000
Miscellaneous...................................... 15,000
--------
Total.............................................. $704,000
========
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the DGCL, provides that a corporation may indemnify directors
and officers as well as other employees and individuals against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation--a "derivative action") if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceedings, had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions, except
that indemnification only extends to expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement
of such action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, bylaws,
disinterested director vote, stockholder vote, agreement or otherwise.
As permitted by Section 145 of the DGCL, Article EIGHTEENTH of Northrop
Grumman's restated certificate of incorporation, as amended, provides:
"A director of the Corporation shall not be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or to its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, i(ii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derives any improper personal benefit. If, after approval of this
Article by the stockholders of the Corporation, the General Corporation Law of
the State of Delaware is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent permitted
by the General Corporation Law of the State of Delaware, as so amended. Any
repeal or modification of this Article by the stockholders of the Corporation
as provided in Article Seventeen hereof shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification."
II-1
Northrop Grumman has entered into an agreement with each of its directors
and certain of its officers indemnifying them to the fullest extent permitted
by the foregoing. Northrop Grumman has also purchased director and officer
liability insurance.
Item 16. EXHIBITS
1-1 Form of Underwriting Agreement relating to common equity securities (incorporated by reference to
Form S-3 Registration Statement filed August 10, 2001).
1-2 Form of Underwriting Agreement relating to preferred equity securities (incorporated by reference to
Form S-3 Registration Statement filed August 10, 2001).
1-3 Form of Underwriting Agreement relating to debt securities (incorporated by reference to Form S-3
Registration Statement filed August 10, 2001).
4-1 Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Form S-4
Registration Statement filed February 1, 2001).
4-2 Certificate of Amendment of Certificate of Incorporation (incorporated by reference to Form 10-Q for
the quarter ended March 31, 2001).
4-3 Certificate of Amendment of Certificate of Incorporation dated May 21, 2001 (incorporated by
reference to Form 10-Q for the quarter ended June 30, 2001).
4-5 Restated Bylaws (incorporated by reference to Form S-4 Registration Statement filed
February 1, 2001).
4-6 Rights Agreement dated as of January 31, 2001 between Northrop Grumman Corporation and
EquiServe Trust Company (incorporated by reference to Form S-4 Registration Statement filed
March 27, 2001).
4-7 Senior Indenture dated as of November 21, 2001 between Northrop Grumman Corporation and
JPMorgan Chase Bank, as trustee (incorporated by reference to Form 8-K filed November 21, 2001).
4-8 Form of Subordinated Indenture (incorporated by reference to Form S-3 Registration Statement filed
August 10, 2001).
4-9 Form of Warrant Agreement for Debt Securities (incorporated by reference to Form S-3 Registration
Statement filed August 10, 2001).
4-10 Form of Warrant Agreement for Equity Securities (incorporated by reference to Form S-3 Registration
Statement filed August 10, 2001).
4-11 Form of Certificate for Common Stock (incorporated by reference to Form S-3 Registration Statement
filed August 10, 2001).
4-12 Form of Certificate of Designations of Preferred Stock (incorporated by reference to Form S-3
Registration Statement filed August 10, 2001).
5-1 Opinion of Sheppard, Mullin, Richter & Hampton LLP.
12-1 Computation of Ratio of Earnings to Fixed Charges.
15-1 Letter from independent accountants regarding unaudited interim accounting information.
23-1 Consent of Deloitte & Touche LLP with respect to Northrop Grumman.
23-2 Consent of Deloitte & Touche LLP with respect to Litton.
23-3 Consent of Arthur Andersen LLP with respect to Newport News Shipbuilding Inc.
23-4 Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5-1).
24-1 Power of Attorney.
25-1 Form T-1 Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act of 1939.
II-2
Item 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any fact or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in the paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(b) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(d) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(e) that, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
II-3
(f) that, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (a) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(g) that, for purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(h) to file an application for the purposes of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of such Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 18 day of
January, 2002.
NORTHROP GRUMMAN CORPORATION
By: /s/ JOHN H. MULLAN
-----------------------------------
John H. Mullan
Corporate Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in their
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board, Chief January 18, 2002
--------------------- Executive Officer and Director
Kent Kresa (Principal Executive Officer)
* President, Chief Operating Officer January 18, 2002
--------------------- and Director
Ronald D. Sugar
* Corporate Vice President and Chief January 18, 2002
--------------------- Financial Officer (Principal
Richard B. Waugh, Jr. Financial Officer)
* Corporate Vice President and January 18, 2002
--------------------- Controller (Principal Accounting
Sandra J. Wright Officer)
* Director January 18, 2002
---------------------
John T. Chain, Jr.
* Director January 18, 2002
---------------------
Lewis W. Coleman
* Director January 18, 2002
---------------------
Vic Fazio
S-1
Signature Title Date
--------- ----- ----
* Director January 18, 2002
----------------------------
Phillip Frost
* Director January 18, 2002
----------------------------
Charles A. Larson
* Director January 18, 2002
----------------------------
Jay H. Nussbaum
* Director January 18, 2002
----------------------------
Aulana L. Peters
* Director January 18, 2002
----------------------------
John Brooks Slaughter
* By: /s/ JOHN H. MULLAN
----------------------------
John H. Mullan
Attorney-in-Fact
S-2
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
5-1 Opinion of Sheppard, Mullin, Richter & Hampton LLP.
12-1.. Computation of ratio of earnings to fixed charges.
15-1.. Letter from independent accountants regarding unaudited interim accounting information.
23-1.. Consent of Deloitte & Touche LLP with respect to Northrop Grumman.
23-2.. Consent of Deloitte & Touche LLP with respect to Litton.
23-3.. Consent of Arthur Andersen LLP with respect to Newport News Shipbuilding Inc.
24-1.. Power of Attorney.
25-1.. Form T-1 Statement of Eligibility and Qualification of Trustee under the Trust Indenture Act of
1939.
1