<PAGE>
                            SCHEDULE 14A INFORMATION
 
                  Proxy Statement Pursuant to Section 14(a) of
                      the Securities Exchange Act of 1934
 
    Filed by the Registrant /X/
    Filed by a Party other than the Registrant / /
 
    Check the appropriate box:
    / /  Preliminary Proxy Statement
    /X/  Definitive Proxy Statement
    / /  Definitive Additional Materials
    / /  Soliciting  Material  Pursuant  to  Section  240.14a-11(c)  or  Section
         240.142-12
 
                              NORTHROP GRUMMAN CORPORATION
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
- --------------------------------------------------------------------------------
                   (Name of Person(s) Filing Proxy Statement)
 
Payment of Filing Fee (Check the appropriate box):
 
/X/  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
/ /  $500 per  each party  to  the controversy  pursuant  to Exchange  Act  Rule
     14a-6(i)(3)
/ /  Fee   computed  on   table  below   per  Exchange   Act  Rules  14a-6(i)(4)
     and 0-11
     1) Title of each class of securities to which transaction applies:
        ------------------------------------------------------------------------
     2) Aggregate number of securities to which transaction applies:
        ------------------------------------------------------------------------
     3) Per unit price or other underlying value of transaction computed
        pursuant to Exchange Act Rule 0-11:*
        ------------------------------------------------------------------------
     4) Proposed maximum aggregate value of transaction:
        ------------------------------------------------------------------------
*    Set forth the amount on which the filing fee is calculated and state how it
     was determined.
 
/ /  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the  filing for which the  offsetting fee was  paid
     previously.  Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.
 
     1) Amount Previously Paid:
        ------------------------------------------------------------------------
     2) Form, Schedule or Registration Statement No.:
        ------------------------------------------------------------------------
     3) Filing Party:
        ------------------------------------------------------------------------
     4) Date Filed:
        ------------------------------------------------------------------------

<PAGE>
                            [NORTHROP GRUMMAN LOGO]
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                              AND PROXY STATEMENT
 
                                     NOTICE
 
    Notice  is hereby given that the  Annual Meeting of Stockholders of Northrop
Grumman Corporation (the "Company") will be held on Wednesday, May 15, 1996,  at
10:00  A.M.  at the  Museum of  Flying,  2772 Donald  Douglas Loop  North, Santa
Monica, California 90405 for the following purposes:
 
    (1) To elect three  Class II directors  to hold office  for three years  and
       until their respective successors are elected and qualified;
 
    (2)  To  consider  and act  upon  a  proposal to  amend  the  Company's 1993
       Long-Term Incentive Stock Plan;
 
    (3) To  consider  and act  upon  a proposal  to  ratify the  appointment  of
       Deloitte & Touche LLP as the Company's independent auditors;
 
    (4)  To  consider  and act  upon  a stockholder  proposal  regarding foreign
       military sales; and
 
    (5) To consider and act upon such other business as may properly come before
       the Annual Meeting or any adjournments thereof.
 
    Stockholders of  record at  the close  of business  on March  19, 1996,  are
entitled to receive notice of and to vote at the Annual Meeting.
 
                                          By order of the Board of Directors,
 
                                          [SIG]
 
                                          JAMES C. JOHNSON
                                          CORPORATE VICE PRESIDENT AND SECRETARY
 
1840 Century Park East
Los Angeles, California 90067
A
pril 1, 1996
 
                                    IMPORTANT
      TO  ASSURE YOUR REPRESENTATION AT THE  ANNUAL MEETING, PLEASE SIGN AND
    MAIL PROMPTLY  THE  ENCLOSED  PROXY  FOR  WHICH  A  RETURN  ENVELOPE  IS
    PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.

<PAGE>
                                PROXY STATEMENT
                              GENERAL INFORMATION
 
    This  Proxy Statement,  which is part  of the accompanying  Notice of Annual
Meeting of Stockholders, is  furnished in connection  with the solicitation,  by
the  Board  of Directors  of Northrop  Grumman  Corporation (the  "Company"), of
proxies to be  used at the  Company's 1996 Annual  Meeting of Stockholders  (the
"Annual  Meeting") and at any and all  adjournments of such Annual Meeting. If a
proxy in  the  accompanying form  is  duly  executed and  returned,  the  shares
represented  by such proxy will be voted  as indicated. Any person executing the
proxy may revoke  it prior  to its exercise.  Unless otherwise  directed in  the
accompanying  proxy, the persons named therein  (or their substitutes) will vote
FOR the election of the three director nominees listed below under "Election  of
Directors,"  FOR the  proposal to amend  the Company's  1993 Long-Term Incentive
Stock Plan, FOR the proposal to ratify the appointment of Deloitte & Touche  LLP
as auditors of the Company for the year ending December 31, 1996 and AGAINST the
stockholder  proposal regarding foreign military sales. As to any other business
which may properly come before the  Annual Meeting, the named proxies will  vote
in  accordance with their best judgment. The  Company does not presently know of
any other such business.
 
    At the close of business on  February 13, 1996 there were 49,506,909  shares
of  Common Stock of the Company, par value $1.00 per share (the "Common Stock"),
outstanding. Only holders of record of Common Stock at the close of business  on
March  19, 1996 are entitled to notice of, and to vote at, the Annual Meeting or
any adjournment thereof.  Each share of  Common Stock is  entitled to one  vote.
Proxies  for  shares marked  "abstain"  on a  matter  will be  considered  to be
represented at the meeting, but not voted, for these purposes. Shares registered
in the names of brokers  or other "street name"  nominees for which proxies  are
voted  on some but not  all matters will be considered  to be represented at the
meeting, but will be considered  to be voted only  as to those matters  actually
voted.
 
    The  principal office of the  Company is located at  1840 Century Park East,
Los Angeles, California 90067. This Proxy  Statement and the form of proxy  will
be sent to stockholders commencing approximately April 1, 1996.
 

                               VOTING SECURITIES
 
    The  following table lists the beneficial  ownership of each person or group
who, as of December 31,  1995, owned to the  Company's knowledge more than  five
percent of the Company's Common Stock then outstanding.
 

<TABLE>
<CAPTION>
 
                                                                   AMOUNT AND NATURE OF    PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER                                BENEFICIAL OWNERSHIP       CLASS
- -----------------------------------------------------------------  -----------------------  -----------
<S>                                                                <C>                      <C>
Bankers Trust Company(a).........................................      6,014,741 shares(b)      12.17%
300 So. Grand Avenue, Los Angeles, CA 90071
U.S. Trust Company of California, N.A.(c)........................      5,974,826 shares(d)      12.09%
555 So. Flower St., Los Angeles, CA 90071-2429
Wellington Management Company....................................      4,575,655 shares(e)       9.26%
75 State Street, Boston, MA 02109
FMR Corp.........................................................      3,039,396 shares(f)       6.15%
82 Devonshire Street, Boston, MA 02109
Vanguard Wellington Fund, Inc....................................      2,636,800 shares(g)       5.34%
P.O. Box 2600, Valley Forge, PA 19482
</TABLE>

 
- ------------------------
(a)  Bankers  Trust  Company  is  Trustee  (the  "Trustee")  under  the Northrop
    Corporation Employee Benefit Plans Master Trust (the "Trust").
 
(b) These shares  are held  under the  Northrop Grumman  Savings and  Investment
    Plan, the relevant portion of which is an Employee Stock Ownership Plan, for
    the account of (but not beneficially
 
                                       1

<PAGE>
    owned  by) the  Trustee. The Trustee  votes these shares  in accordance with
    instructions received from the employee-participants  in such Plan to  whose
    accounts  the shares have been allocated. Undirected shares are voted in the
    same proportion as shares for which instructions are received.
 
(c) U.S. Trust Company is an  Investment Manager (the "Investment Manager")  for
    the  Northrop  Grumman  Pension  Plan  and  the  pension  plans  for certain
    divisions of  the  Company  (the  "Pension Plans");  under  the  Trust,  the
    Investment  Manager has responsibility for the management and control of the
    Northrop Grumman shares held in the Trust as assets of the Pension Plans.
 
(d) These shares are held for the account of (but not beneficially owned by) the
    Trustee. The Investment Manager has  voting power over these shares,  except
    in  the event of a  contested election of directors  or in connection with a
    tender offer.  In  such  cases  the shares  are  voted  in  accordance  with
    instructions  received  from  eligible participants  in  the  Pension Plans.
    Undirected shares  are voted  in the  same proportion  as shares  for  which
    instructions are received.
 
(e)  This  information was  provided by  Wellington Management  Company ("WMC").
    According to WMC, as of the date set forth above, WMC had shared dispositive
    power over  4,575,655 shares  but shared  voting power  over only  1,090,450
    shares.
 
(f)  This information was provided by FMR Corp. ("FMR"). According to FMR, as of
    the  date set forth above, FMR had sole dispositive power over the 3,039,396
    shares but sole voting power over only 162,327 shares.
 
(g) This  information  was  provided  by Vanguard  Wellington  Fund,  Inc.  (the
    "Fund"). According to the Fund, as of the date set forth above, the Fund had
    sole voting power but shared dispositive power over the 2,636,800 shares.
 

STOCK OWNERSHIP OF OFFICERS AND DIRECTORS
 
    The  following table sets forth  the total number of  shares of Common Stock
beneficially owned by directors, nominees  and Named Executive Officers and  all
directors and executive officers as a group at the close of business on February
13,  1996. Except as  noted below, and subject  to applicable community property
and similar laws,  each stockholder has  sole voting and  investment power  with
respect to the shares shown.
 

<TABLE>
<CAPTION>
 
                                         AMOUNT AND NATURE OF   PERCENT
NAME OF BENEFICIAL OWNER                  BENEFICIAL OWNERSHIP   OF CLASS
- ----------------------------------------  --------------------   --------
<S>                                       <C>                    <C>
Jack R. Borsting........................           2,519(1)(2)      *
John T. Chain, Jr. .....................           1,894(1)         *
Jack Edwards............................           1,107(1)(3)      *
Phillip Frost...........................               0            *
Kent Kresa..............................         722,107(4)        1.46
Richard R. Molleur......................          29,071(5)         *
Aulana L. Peters........................           3,111(1)(6)      *
John E. Robson..........................           2,647(1)(7)      *
Richard M. Rosenberg....................           2,625(1)         *
Brent Scowcroft.........................           1,394(1)         *
John Slaughter..........................             894(1)         *
Wallace C. Solberg......................          68,944(8)         *
Richard J. Stegemeier...................           3,038(1)(9)      *
Richard B. Waugh, Jr....................          19,909(10)        *
Gordon L. Williams......................           1,000            *
    Total...............................         860,260           1.74
Directors and executive officers as a            945,167(11)       1.91
group...................................
</TABLE>

 
- ------------------------
 *  Denotes ownership of less than 1% of the outstanding shares
 
(1)  Includes 500 shares  of Common Stock  which may be  acquired within 60 days
    after February 13, 1996, pursuant to the exercise of options.
 
                                       2

<PAGE>
(2) Includes  1,500  shares held  in  the Borsting  Family  Trust of  which  Dr.
    Borsting is trustee.
 
(3)  Includes 113  shares Mr.  Edwards has  deferred into  a stock  unit account
    pursuant to the 1993 Stock Plan for Non-Employee Directors.
 
(4) Includes 508,600 shares of Common Stock  which may be acquired by Mr.  Kresa
    within 60 days after February 13, 1996, pursuant to the exercise of options;
    22,500  Restricted  Award  Shares  issued pursuant  to  the  1987  Long Term
    Incentive Plan,  which  shares  carry  voting  and  dividend  rights;  4,940
    equivalent  shares  held as  of November  30, 1995  in the  Northrop Grumman
    Savings and Investment  Plan; and 186,067  shares held by  the Kresa  Family
    Trust of which Mr. Kresa is trustee.
 
(5)  Includes 25,500 shares which may be  acquired by Mr. Molleur within 60 days
    after February  13,  1996,  pursuant  to  the  exercise  of  options;  2,750
    Restricted  Award Shares  issued pursuant  to the  1987 Long  Term Incentive
    Plan, which shares carry voting and dividend rights.
 
(6) Includes 1,800  shares Ms.  Peters has deferred  into a  stock unit  account
    pursuant to the 1993 Stock Plan for Non-Employee Directors.
 
(7)  Includes  716 shares  Mr. Robson  has  deferred into  a stock  unit account
    pursuant to the 1993 Stock Plan for Non-Employee Directors.
 
(8) Includes 19,800 shares of Common Stock which may be acquired by Mr.  Solberg
    within  60 days after February 13, 1996, pursuant to the exercise of options
    and 10,144 equivalent shares  held as of November  30, 1995 in the  Northrop
    Grumman Savings and Investment Plan.
 
(9)  Includes 1,000  shares held  in the Richard  J. Stegemeier  Family Trust of
    which Mr.  Stegemeier  and his  wife  are  trustees; and  1,144  shares  Mr.
    Stegemeier has deferred into a stock unit account pursuant to the 1993 Stock
    Plan for Non-Employee Directors.
 
(10)  Includes 13,200 shares of Common Stock  which may be acquired by Mr. Waugh
    within 60 days after February 13, 1996, pursuant to the exercise of options;
    3,005 equivalent shares held as of November 30, 1995 in the Northrop Grumman
    Savings and Investment Plan; and 2,877 shares held by the Waugh Family Trust
    of which Mr. Waugh and his wife are trustees.
 
(11) Includes 619,095  shares of Common  Stock which may  be acquired within  60
    days  after February  13, 1996 pursuant  to the exercise  of options; 34,389
    equivalent shares  held as  of November  30, 1995  in the  Northrop  Grumman
    Savings  and Investment Plan for the  benefit of officers; 27,500 Restricted
    Award Shares, issued pursuant  to the 1987 Long  Term Incentive Plan,  which
    shares  carry voting and  dividend rights; and 3,773  shares deferred into a
    stock unit  account  pursuant  to  the  1993  Stock  Plan  for  Non-Employee
    Directors.
 
                             ELECTION OF DIRECTORS
 
    Under  the  Company's Certificate  of  Incorporation, which  provides  for a
classified Board of Directors,  three directors in Class  II will be elected  at
the  1996 Annual Meeting  to hold office  for three years  until the 1999 Annual
Meeting of Stockholders and  until their successors have  been duly elected  and
qualified.  Unless instructed otherwise,  the persons named  in the accompanying
proxy (or their substitutes) will vote the shares represented by such proxy  for
the  election of the  three Class II  Director Nominees listed  in the table set
forth below. In case any of such nominees shall become unavailable for  election
to  the Board of Directors, an event which is not anticipated, the persons named
as proxies (or their  substitutes) shall have full  discretion and authority  to
vote  or refrain  from voting  for any  other nominee  in accordance  with their
judgment.
 
    Under the Company's Bylaws, a stockholder may nominate a person for election
as a director at a meeting only  if the stockholder has given written notice  to
the  Corporate  Secretary no  later than  the  tenth day  following the  date of
mailing of  this  Proxy Statement.  The  notice must  include  information  with
respect  to the stockholder and the nominee required by the Bylaws including the
name and address of the stockholder as they appear on the books of the  Company,
all  information  relating  to  the  nominee required  to  be  disclosed  in the
solicitation of proxies pursuant  to Regulation 14A  of the Securities  Exchange
Act of 1934 and the consent of the nominee to serve.
 
                                       3

<PAGE>
    The  following  information, furnished  with respect  to  each of  the three
nominees for election as a Class II director,  and each of the five Class I  and
four  Class III directors whose terms will continue after the Annual Meeting, is
obtained from the Company's  records or from  information furnished directly  by
the  individual to the  Company. All the  nominees, including Dr.  Frost who was
appointed to the Board in March 1996 to fill the vacancy created by the untimely
death of Ms. Barbara Jordan, are presently serving on the Board of Directors. It
is the Company's policy that members of the Board of Directors are ineligible to
stand for election to the Board of  Directors if they will have attained age  70
by  the  date of  the Company's  Annual  Meeting of  Stockholders at  which such
election is held.
 
                       NOMINEES FOR DIRECTOR -- CLASS II
 
PHILLIP FROST,  59.  CHAIRMAN OF  THE BOARD  AND CHIEF  EXECUTIVE OFFICER,  IVAX
                     CORPORATION, A PHARMACEUTICAL COMPANY
 
Dr.  Phillip Frost has  served as Chairman  of the Board  of Directors and Chief
Executive Officer of  IVAX Corporation since  1987. He served  as its  President
from  July 1991  until January 1995.  He was  the Chairman of  the Department of
Dermatology at Mt. Sinai Medical Center  of Greater Miami, Miami Beach,  Florida
from  1972 to  1990. Dr.  Frost was Chairman  of the  Board of  Directors of Key
Pharmaceuticals, Inc. from 1972  to 1986. He  is Vice Chairman  of the Board  of
Directors   of  North  American  Vaccine,  Inc.,  and  a  director  of  American
Exploration Company, NaPro BioTherapeutics, Inc. and Whitman Medical Corp. He is
a trustee of the University of Miami and  a member of the Board of Governors  of
the American Stock Exchange.
 
JOHN E. ROBSON,  65.  SENIOR  ADVISOR, ROBERTSON, STEPHENS & COMPANY, INVESTMENT
                      BANKERS.
 
ELECTED 1993
MEMBER  OF  THE  COMPENSATION  AND   MANAGEMENT  DEVELOPMENT  AND  THE   FINANCE
COMMITTEES.
 
From  1989 to 1993, Mr. John E. Robson  served as Deputy Secretary of the United
States Treasury. Prior to that, he was  Dean and Professor of Management at  the
Emory  University  School  of  Business Administration  from  1986  to  1989 and
President and Chief  Executive Officer  and Executive Vice  President and  Chief
Operating  Officer of G.D. Searle  & Co., a pharmaceutical  company from 1977 to
1986. From 1975 to  1977, he served  as Chairman of  the U.S. Civil  Aeronautics
Board,  regulator of the airline industry. Mr.  Robson earned his B.A. from Yale
University in 1952 and his J.D., with  honors, from Harvard Law School in  1955.
He  was in  the U.S. Army  from 1955  to 1957 and  then returned  to Illinois to
become a partner in a major Chicago law firm. Mr. Robson became General  Counsel
of  the Department of  Transportation in 1967.  In 1968, he  was appointed Under
Secretary of the  Department of  Transportation, leaving  government service  in
1969  to return to the private practice of  law as a partner of Sidley & Austin,
into which his old  law firm merged.  Mr. Robson is a  director of Rand  McNally
Company,  Ralin,  Inc. and  Security Capital  Industrial Trust,  a Distinguished
Visiting Fellow of  the Hoover  Institution at Stanford  University, a  Visiting
Fellow at the Heritage Foundation and a Trustee of St. John's College.
 
JOHN BROOKS SLAUGHTER,  61.  PRESIDENT, OCCIDENTAL COLLEGE.
ELECTED 1993
MEMBER OF THE AUDIT AND THE NOMINATING COMMITTEES.
 
Dr.  John Brooks Slaughter  earned his B.S.E.E. from  Kansas State University in
1956, an M.S. in Engineering from the University of California at Los Angeles in
1961 and a Ph.D.  in Engineering Sciences from  the University of California  at
San  Diego in 1971. He began his  career as an electronics engineer with General
Dynamics Convair  in San  Diego in  1956. He  joined the  U.S. Navy  Electronics
Laboratory  in San  Diego in 1960.  In 1975,  he became Director  of the Applied
Physics Laboratory of the  University of Washington. In  1977, he was  appointed
Assistant  Director for Astronomics,  Atmospherics, Earth and  Ocean Sciences at
the National Science Foundation.  From 1979 to 1980  he served as Academic  Vice
President  and Provost of  Washington State University. In  1980, he returned to
the National Science  Foundation as  its Director  and served  in that  capacity
until November 1982 when he became Chancellor
 
                                       4

<PAGE>
of  the  University of  Maryland, College  Park. In  August 1988,  Dr. Slaughter
became President of Occidental  College in Los  Angeles. He is  a member of  the
National  Academy of Engineering, a  fellow of the American  Academy of Arts and
Sciences and  serves on  the Board  of Directors  of Atlantic  Richfield,  Avery
Dennison, Monsanto and IBM.
 
                        CONTINUING DIRECTORS -- CLASS I
 
JACK R. BORSTING,  67.  E.  MORGAN STANLEY PROFESSOR  OF BUSINESS ADMINISTRATION
                        AND  DIRECTOR  OF  THE  CENTER  FOR   TELECOMMUNICATIONS
                        MANAGEMENT, UNIVERSITY OF SOUTHERN CALIFORNIA.
 
ELECTED 1991
CHAIRMAN  OF THE NOMINATING COMMITTEE; MEMBER OF THE COMPENSATION AND MANAGEMENT
DEVELOPMENT AND THE AUDIT COMMITTEES.
 
Dr. Jack  R.  Borsting  was  at  the  Naval  Postgraduate  School  in  Monterey,
California from 1959 to 1980. During his tenure at Monterey, he was professor of
Operations  Research,  Chairman of  the  Department of  Operations  Research and
Administration  Science,  and  Provost  and  Academic  Dean.  Dr.  Borsting  was
Assistant  Secretary of Defense (Comptroller) from 1980  to 1983 and Dean of the
School of Business at the  University of Miami from 1983  to 1988. From 1988  to
1994,  he was the Robert R. Dockson professor and Dean of the School of Business
Administration at the University of Southern California, Los Angeles. He is past
president of both the  Operations Research Society of  America and the  Military
Operations  Research  Society.  He is  currently  a trustee  of  the Orthopaedic
Hospital Foundation of Los Angeles and  serves as a director of Whitman  Medical
and TROLearning.
 
AULANA L. PETERS,  54.  PARTNER, GIBSON, DUNN & CRUTCHER.
ELECTED 1992
CHAIRMAN  OF  THE EXECUTIVE  AND PUBLIC  POLICY COMMITTEE;  MEMBER OF  THE AUDIT
COMMITTEE.
 
Aulana L. Peters  joined the law  firm of Gibson,  Dunn & Crutcher  in 1973.  In
1980,  she was named a partner in the  firm and continued in the practice of law
until 1984 when she  accepted an appointment as  Commissioner of the  Securities
and  Exchange Commission. In  1988, after serving four  years as a Commissioner,
she returned to Gibson, Dunn & Crutcher.  Ms. Peters is a director of 3M,  Mobil
Corporation and Merrill Lynch & Co.
 
RICHARD M. ROSENBERG,  65.  CHAIRMAN  OF THE BOARD,  BANKAMERICA CORPORATION AND
                            BANK OF AMERICA NT & SA.
 
ELECTED 1991
CHAIRMAN OF THE FINANCE COMMITTEE; MEMBER OF THE NOMINATING COMMITTEE.
 
Richard M. Rosenberg has been Chairman  of the Board of BankAmerica  Corporation
(BAC)  and Bank of America since January 1996. From May 1990 to December 1995 he
was Chairman and Chief Executive Officer after having served as President  since
February  1990 and as Vice Chairman  of the Board and a  director of BAC and the
Bank since 1987. Before joining BankAmerica Corporation, Mr. Rosenberg served as
President and Chief Operating Officer of Seafirst Corporation and  Seattle-First
National  Bank which he joined in 1986.  Mr. Rosenberg is a retired Commander in
the U.S.  Navy Reserve,  a  director of  Airborne Express  Corporation,  Pacific
Telesis   Group,  Potlatch   Corporation  and  Pacific   Mutual  Life  Insurance
Corporation and  a trustee  of the  University of  Southern California  and  the
California Institute of Technology.
 
                                       5

<PAGE>
WALLACE C. SOLBERG,  64.  CORPORATE VICE PRESIDENT AND GENERAL MANAGER, MILITARY
                          AIRCRAFT SYSTEMS DIVISION.
 
ELECTED 1992
MEMBER OF THE EXECUTIVE AND PUBLIC POLICY COMMITTEE.
 
Before  joining Northrop Corporation, Wallace C. Solberg was a research engineer
at the  Hotpoint  Division  of  General Electric  Company.  In  1959  he  joined
Hallicrafters  Company which  was acquired by  Northrop in 1966  and renamed the
Defense Systems  Division. While  at  Northrop he  has  held such  positions  as
Manager  of Engineering,  Program Management, Customer  Requirements and Finance
before being named Vice President and  General Manager of the Division in  1974.
In November 1990, when Northrop integrated its three electronics operations, Mr.
Solberg  was named  Vice President  and General  Manager of  the new Electronics
Systems Division. In  1991, he was  named Corporate Vice  President and  General
Manager  of the  Aircraft Division  and in  June 1994  he became  Corporate Vice
President and General Manager, Military Aircraft Division. In January 1996, when
the Military Aircraft  and B-2 Divisions  were combined, Mr.  Solberg was  named
Corporate  Vice  President  and General  Manager  of the  new  Military Aircraft
Systems Division.
 
RICHARD J. STEGEMEIER,  67.  CHAIRMAN EMERITUS OF THE BOARD OF DIRECTORS, UNOCAL
                             CORPORATION, AN INTEGRATED PETROLEUM COMPANY.
 
ELECTED 1990
CHAIRMAN OF THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE; MEMBER OF THE
EXECUTIVE AND PUBLIC POLICY AND THE AUDIT COMMITTEES.
 
Richard  J.  Stegemeier  joined  Union  Oil  Company  of  California,  principal
operating subsidiary of Unocal Corporation, in 1951. Mr. Stegemeier was Chairman
of  the Board for Unocal  Corporation from April 1989 to  May 1995 and was Chief
Executive Officer from  1988 to 1994.  From December  1985 to June  1992 he  was
President  and from December 1985  to July 1988 he  was Chief Operating Officer.
Mr. Stegemeier is a member of the National Academy of Engineering and a director
of First Interstate Bancorp, Foundation Health Corporation, Halliburton  Company
and Outboard Marine Corporation.
 
                       CONTINUING DIRECTORS -- CLASS III
 
JOHN T. CHAIN, JR.,  61.  FORMER  EXECUTIVE VICE  PRESIDENT, BURLINGTON NORTHERN
                          SANTA FE RAILROAD COMPANY.
 
ELECTED 1991
MEMBER OF THE  COMPENSATION AND MANAGEMENT  DEVELOPMENT, FINANCE AND  NOMINATING
COMMITTEES.
 
During  his  military career,  John T.  Chain, Jr.  held a  number of  Air Force
commands. In 1978,  he became  military assistant to  the Secretary  of the  Air
Force.  In 1984, he became the Director of Politico-Military Affairs, Department
of State. General Chain has been Chief of Staff for Supreme Headquarters  Allied
Powers  Europe, and Commander in Chief, Strategic Air Command, the position from
which he  retired in  February 1991.  In March  1991, he  became Executive  Vice
President  for  Burlington Northern  Railroad,  serving in  that  capacity until
October 1995. General Chain is a member of the Council on Foreign Relations.  He
is  a director  of Kemper  National Corporation,  RJR Nabisco,  Thomas Group and
Nabisco, Inc.
 
JACK EDWARDS,  67.  MEMBER, HAND ARENDALL, L.L.C.
ELECTED 1991
CHAIRMAN OF  THE AUDIT  COMMITTEE;  MEMBER OF  THE COMPENSATION  AND  MANAGEMENT
DEVELOPMENT AND THE FINANCE COMMITTEES.
 
Jack Edwards was elected in 1964 to the U.S. House of Representatives and served
in  the Congress  for twenty years  representing the First  District of Alabama.
During his tenure in the House, Mr. Edwards
 
                                       6

<PAGE>
served on the Appropriations Committee for sixteen years, including ten years as
Senior Republican  on  the  Defense  Subcommittee,  and  sixteen  years  on  the
Transportation  Subcommittee. He also  served on the  Banking, Finance and Urban
Affairs Committee. He  retired from the  Congress in January  1985 and became  a
member  of his current law firm. He is a director of Southern Company and Holnam
Inc. Mr. Edwards is also a member of the Board of Trustees of the University  of
Alabama System.
 
KENT KRESA,  58.  CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER.
ELECTED 1987
 
Before  joining Northrop Corporation, Kent Kresa was associated with the Lincoln
Laboratories of M.I.T.  and the  Defense Advanced Research  Projects Agency.  In
1975,  he joined  Northrop as  Vice President  and Manager  of the Corporation's
Research and  Technology  Center.  He  became General  Manager  of  the  Ventura
Division  in 1976, Group Vice President of the Aircraft Group in 1982 and Senior
Vice President for  Technology and Development  in 1986. Mr.  Kresa was  elected
President  and Chief Operating Officer  of Northrop in 1987.  He was named Chief
Executive Officer in  1989 and Chairman  of the Board  in 1990. Mr.  Kresa is  a
member  of the Massachusetts Institute of  Technology Visiting Committee for the
Department of Aeronautics and Astronautics,  a Fellow of the American  Institute
of  Aeronautics  and  Astronautics, serves  on  the  Board of  Governors  of the
Aerospace Industries  Association,  the  Board of  Trustees  of  the  California
Institute of Technology, the CEO Board of Advisors of the University of Southern
California's  School  of Business  and  on the  Board  of Directors  of Chrysler
Corporation, Atlantic Richfield Company, the  Los Angeles World Affairs  Council
and the John Tracy Clinic.
 
BRENT SCOWCROFT,  71.  LIEUTENANT  GENERAL, USAF (RET.)  AND FORMER ASSISTANT TO
                       THE PRESIDENT FOR NATIONAL SECURITY AFFAIRS.
 
ELECTED 1993
MEMBER  OF  THE  COMPENSATION  AND   MANAGEMENT  DEVELOPMENT  AND  THE   FINANCE
COMMITTEES.
 
General  Scowcroft served  as Assistant to  the President  for National Security
Affairs for  Presidents Bush  and  Ford. A  retired  U.S. Air  Force  Lieutenant
General,  General Scowcroft  served in numerous  national security  posts in the
Pentagon and  the White  House prior  to his  appointments as  Assistant to  the
President  for  National Security  Affairs. He  also held  a number  of teaching
positions at West  Point and the  Air Force Academy,  specializing in  political
science. He received his B.S. degree from West Point, and M.A. and Ph.D. degrees
from  Columbia University.  General Scowcroft  is also  a director  of Pennzoil,
Enron Global Power & Pipelines L.L.C. and QUALCOMM Inc.
 
MEETINGS OF THE BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND DIRECTORS' FEES
 
    The Board  of  Directors schedules  regular  meetings throughout  the  year.
Normally,  such  meetings  convene  at the  Company's  principal  office  in Los
Angeles. Provision  has been  made in  the Bylaws  for special  meetings of  the
Board,  should they be required,  and for meetings of  the various committees of
the Board at appropriate times. In 1995, ten meetings of the Board of  Directors
were  held. During 1996, the  Board has scheduled eight  regular meetings of the
Board.
 
    The  Company  has  an  Audit   Committee,  a  Compensation  and   Management
Development  Committee and a Nominating Committee,  each of which is composed of
at least three members, all of  whom must be "Independent Outside Directors"  as
defined  in the Company's Bylaws. The members of the Audit Committee are Jack R.
Borsting, Jack Edwards, Aulana L. Peters,  John Brooks Slaughter and Richard  J.
Stegemeier. The members of the Compensation and Management Development Committee
are  Jack R. Borsting, John  T. Chain, Jr., Jack  Edwards, John E. Robson, Brent
Scowcroft and Richard J. Stegemeier. The members of the Nominating Committee are
Jack R.  Borsting, John  T. Chain,  Jr., Richard  M. Rosenberg  and John  Brooks
Slaughter. During 1995, the Audit Committee met four times, the Compensation and
Management Development Committee met nine times and the Nominating Committee met
once.
 
    The  Audit Committee meets periodically  with both the Company's independent
auditors and the Company's  chief internal auditor to  review audit results  and
the adequacy of the Company's systems of
 
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<PAGE>
internal  controls. In addition, the Audit  Committee recommends to the Board of
Directors the appointment  or discharge of  the Company's independent  auditors,
and  reviews each professional service  of a non-audit nature  to be provided by
the independent  auditors to  evaluate the  impact on  the independence  of  the
auditors of undertaking such added services.
 
    The  Compensation  and Management  Development  Committee recommends  to the
Board of Directors  the base salary  and incentive compensation  of all  elected
officers,  takes  final  action  with  respect  to  base  salary  and  incentive
compensation for  certain other  officers  and key  employees, and  reviews  the
Company's  compensation policies and management actions to assure the succession
of qualified officers.  In addition,  this Committee  establishes the  Company's
annual  performance objectives under the Company's incentive compensation plans,
recommends to the Board of Directors  the amounts to be appropriated for  awards
under  such  plans,  recommends  to  the Board  of  Directors  awards  under the
Company's 1973  Incentive Compensation  Plan (the  "1973 Plan"),  grants  awards
under  and administers the Company's Long-Term Incentive Plans and recommends to
the Board of  Directors all  compensation plans  in which  Company officers  are
eligible to participate.
 
    The  Nominating  Committee  reviews  candidates to  serve  as  directors and
recommends to the  Board of Directors  nominees for election  as directors.  The
activities  and associations of each candidate are examined to ensure that there
is no legal impediment, conflict of interest, or other consideration that  might
prevent service on the Board of Directors. In making its selection, the Board of
Directors  bears in mind that the  foremost responsibility of a Northrop Grumman
director is  to represent  the interests  of the  stockholders as  a whole.  The
Committee will consider nominees recommended by stockholders if such nominations
have  been  submitted  in writing,  accompanied  both  by a  description  of the
proposed nominee's  qualifications  and an  indication  of the  consent  of  the
proposed  nominee  and  relevant  biographical  information.  The recommendation
should be addressed to the Committee in care of the Secretary of the Company. In
addition, the  Nominating  Committee  makes  recommendations  to  the  Board  of
Directors  concerning  the  composition  and size  of  the  Board  of Directors,
candidates to fill vacancies,  the performance of  incumbent directors, and  the
remuneration of Non-Employee Directors.
 
    In  addition, the Company has an Executive and Public Policy Committee and a
Finance Committee.
 
    During 1995, each  of the directors  attended at  least 75% or  more of  all
meetings  of the  Board of  Directors and the  various committees  on which they
serve, with the exception of Dr. Slaughter.
 
    Directors are  compensated  for  their  services  according  to  a  standard
arrangement  authorized  by  resolution of  the  Board of  Directors.  An annual
retainer fee of  $28,000 was  paid to  each director  and an  additional fee  of
$1,000  was paid to each  director for each Board  meeting attended during 1995.
Committees of  the Board  usually meet  on the  same day  as the  regular  Board
meeting.  Members of each committee who  attended such meetings were compensated
at the rate of  $1,000 for each such  committee meeting. Committee chairman  are
compensated $3,000 per year pursuant to a retainer fee arrangement in lieu of an
additional  fee per meeting. If a  director performed extraordinary services for
the Board at  the request  of the Chairman  of the  Board or the  chairman of  a
committee,  such  director  was  compensated  at the  rate  of  $1,000  per day.
Directors are  reimbursed  for  all  reasonable expenses  incurred  by  them  in
attending  meetings  of the  Board  of Directors  or  committee meetings  and in
performing compensable extraordinary services.  Board members who are  employees
of the Company do not receive compensation under the above provisions.
 
    The  1993 Stock  Plan For  Non-Employee Directors  provides that  30% of the
retainer fee earned by each director  is paid in Northrop Grumman Common  Stock,
issued  as  soon as  practicable  following the  close  of the  fiscal  year. In
addition, directors may  defer payment of  all or a  portion of their  remaining
retainer fees, Committee Chairman retainer fees and/or their Board and Committee
meeting  fees.  Deferred  compensation  may either  be  distributed  in Northrop
Grumman Common  Stock, issued  as soon  as practicable  after the  close of  the
fiscal  year, or such compensation  may be placed in  a Stock Unit account until
the conclusion of a director-specified deferral  period, a minimum of two  years
from  the time  the compensation  is earned.  All deferral  instructions must be
received prior to  the performance  of the services  for which  the director  is
compensated.    Directors   are   credited    with   dividend   equivalents   in
 
                                       8

<PAGE>
connection with the Northrop Grumman Common Stock which is distributed early  in
the  year following the year earned or  deferred into the Stock Unit account for
longer periods, pending distribution. In early 1995, the Board adopted a Company
stock ownership  guideline  for outside  directors  of three  times  the  annual
retainer,  to be achieved within  five years of joining  the Board (for existing
directors, five years from the date of adoption).
 
    The 1995  Stock Option  Plan  for Non-Employee  Directors provides  for  the
annual  grant of an option to each  non-employee director to purchase 500 shares
of Common Stock with  an exercise price  equal to the fair  market value of  the
Common  Stock on  the grant date.  The option  has a term  of ten  years. If the
director ceases to serve as a  director, the option continues to be  exercisable
for  the lesser  of five  years or the  expiration of  the original  term of the
option unless such termination is for cause in which case the option  terminates
when the director ceases to serve.
 
    The  Northrop Grumman  Corporation Board  of Directors  Retirement Plan (the
"Directors Plan") provides that outside directors,  as defined in the Bylaws  of
the  Company,  are eligible  to  receive a  retirement  benefit pursuant  to the
Directors Plan if they  retire from the Board  following completion of at  least
five  or more consecutive years  of service as an  outside Board member. Outside
directors are also  eligible for benefits  if they are  ineligible to stand  for
election  to the Board  of Directors by virtue  of the fact  that they will have
attained age  70  prior to  the  Annual Meeting  of  Stockholders and  have  not
completed at least five consecutive years of service as an outside director. The
annual  benefit payable pursuant  to the Directors  Plan is equal  to the annual
retainer fee then being  paid to active  directors or such  lesser amount as  is
provided  for under the  Directors Plan. Benefits  are payable for  ten years or
less (as set  forth in  the Directors  Plan), from  the retirement  date of  the
director.  In the case of the death  of a director while receiving benefits, the
benefits are  payable to  the director's  surviving spouse,  as defined  in  the
Directors  Plan. In  the event  of a  change in  control, all  outside directors
serving on the Board at that time shall be immediately vested and entitled to an
annual benefit  amount  for  each  year of  consecutive  service.  In  addition,
benefits  payable  under  the  Directors  Plan  have  been  secured  through the
establishment of a grantor trust.
 
VOTE REQUIRED
 
    The vote of a plurality of the  shares of Common Stock voting at the  Annual
Meeting  (with each share entitled to one vote), is required for the election of
directors. THE BOARD OF DIRECTORS RECOMMENDS  A VOTE FOR THE THREE NOMINEES  FOR
DIRECTOR LISTED ABOVE.
 
                             COMPENSATION COMMITTEE
 
REPORT OF THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
 
    The  Compensation  and  Management  Development Committee  of  the  Board of
Directors (the  "Committee") has  furnished the  following report  on  executive
compensation  applicable to  employees elected as  officers of  the Company. The
Committee is comprised exclusively of outside directors, all of whom are free of
interlocking relationships with the Company.
 
COMPENSATION PHILOSOPHY
 
    Under the  direction of  the Committee,  the Corporation  has developed  and
implemented   compensation  policies  and  programs   intended  to  promote  the
attainment of the strategic business goals of the Company. As a vital element of
the Company's overall plan to accomplish its mission, its compensation  approach
is  designed to  enable recruitment and  retention of  executives of exceptional
ability, and  to concentrate  their  attention, energy  and skill  on  achieving
superior  current performance, financial  results exceeding specific thresholds,
and long-term prosperous growth.
 
    The Northrop  Grumman  executive compensation  program  comprises a  set  of
linked   elements  that  include  base   salary,  annually  determined  variable
compensation referred  to  as incentive  compensation  or bonus,  and  long-term
incentive   based  on  stock   ownership,  appreciation  and   total  return  to
shareholders. Successful accomplishment of goals  tied to the business plan  can
produce  significant individual  reward. Most components  of this  reward are at
risk and vary directly in their  amount with each executive's impact on  desired
business results.
 
                                       9

<PAGE>
    The  Company's administration  of executive  total compensation  is based on
both  performance  and  competitive  market  considerations.  Base  salaries  of
executives  are targeted  at a competitive  market median on  a job-by-job basis
with individual  variations explained  by differences  in training,  experience,
skills  of special  value to  the Company  and sustained  performance. Incentive
compensation varies directly with Company and business element performance,  and
also   with  individual  job  level,   scope  and  performance.  Normalized  for
aforementioned individual  variations, annual  total cash  compensation --  base
salary  plus incentive  compensation --  will be  lower than  competitive market
median in years of below target performance, and above competitive market median
in years performance exceeds  target performance. At the  time of their  initial
grant  under the  1993 Long-Term  Incentive Stock  Plan, the  size of individual
long-term incentive awards was targeted at competitive market median.
 
    Finally, the  Committee  may,  from time-to-time,  approve  other  specially
targeted  incentive  programs  and  awards where  it  believes  they  will serve
shareholder interests. A compensation program  in this category, the  Transition
Project Incentive Plan was approved by the Committee in 1994.
 
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
 
    Section  162(m) of the Internal Revenue  Code (the "Code"), enacted in 1993,
generally disallows a tax deduction to public companies for compensation over $1
million paid to the  corporation's chief executive officer  and four other  most
highly  compensated executive officers  ("Named Executive Officers"). Qualifying
performance-based compensation is not subject to the deduction limit.
 
    At the 1995 Annual Meeting, shareholders  approved an amendment to the  1993
Long-Term  Incentive  Stock  Plan ("Stock  Plan")  establishing a  limit  on the
maximum number of shares that may be  issued pursuant to stock option grants  to
any  employee, including  a Named Executive  Officer. This  action preserves the
Company's Federal income tax  deduction with respect to  future grants of  stock
options under the 1993 Plan.
 
    Payments   from  initial  grants  of  Restricted  Performance  Stock  Rights
("RPSRs") under the Stock  Plan, while performance  determined, may not  satisfy
the  definition  of  performance-based compensation  under  Section  162(m) and,
therefore, tax deductions  with respect  to some compensation  related to  those
initial  grants may  be lost.  Accordingly, in  order to  preserve the Company's
Federal income tax deduction  with respect to future  grants of RPSRs under  the
Stock Plan, the Board of Directors has adopted, subject to shareholder approval,
an  amendment to the  Stock Plan establishing  a limit on  the maximum number of
RPSRs that may be granted to  any employee, including Named Executive  Officers,
of  133,000  over a  three-year period.  Depending  on Company  Performance, the
maximum number of shares issuable pursuant to such limit is 199,500, plus shares
representing dividend equivalents.
 
    The 1973  Incentive  Compensation Plan  ("1973  Plan") is  also  subject  to
Section  162(m) of the Code. Based upon  the amount of incentive compensation to
be paid to each  of the Named  Executive Officers, and the  fact that the  Chief
Executive  Officer has elected to  defer 1995 and 1996  cash compensation to the
extent that it would  cause the loss  of a deduction  under Section 162(m),  the
Company  does not expect  to be denied  a tax deduction  under Section 162(m) in
1995 or 1996.
 
MEASUREMENT OF COMPANY PERFORMANCE
 
    Consistent with the business plan, management in each organizational element
prepares  and  submits  for  assessment  an  Annual  Operating  Plan  containing
Financial  and Supplemental  business goals  together with  defined measures and
weights. Financial Goals focus on operating earnings, cash flow and  shareholder
value  metrics. Supplemental business goals focus on such factors as new product
development and new business initiatives, and also include targets in areas such
as  contract  acquisition,  productivity  and  quality  improvement,   workplace
diversity,  management development and environmental management. These goals are
communicated within each  organizational element resulting  in the formation  of
individual  performance goals specific to each salaried employee. Documented and
approved in  accordance  with  the  Company's  Performance  Management  Process,
accomplishments  against individual goals  are evaluated on  an interim basis at
mid-year and, on a final basis, at year-end.
 
    For Named Executive Officers, three weighted Performance Measurement Factors
are used to determine annual incentive awards: pre-tax return on 3-year  average
shareholder equity -- weighted
 
                                       10

<PAGE>
40%;  business  value creation  as  measured by  a  shareholder value  metric --
weighted 40%;  and  Supplemental business  goals  such as  delineated  above  --
weighted  20%. Associated  with each financial  measure is  a specific numerical
threshold  approved  by  the  Committee   below  which  no  credit  is   earned.
Supplemental  business goals have stated  milestones, objectives and, sometimes,
numerical targets  also approved  by the  Committee. In  1995, the  category  of
Supplemental business goals included 7 corporate goals and 24 divisional goals.
 
    Annually,  the  Committee  reviews, approves  and  -- at  its  discretion --
modifies the Chief Executive Officer's  written proposal of goals and  numerical
values  for the following year within  each of the three Performance Measurement
Factors stated above.  Performance highlights  against 1995 goals  can be  found
below   in  ANNUAL  INCENTIVE  COMPENSATION   and  in  CHIEF  EXECUTIVE  OFFICER
COMPENSATION.
 
COMPANY PERFORMANCE AND THE ELEMENTS OF COMPENSATION
 
    COMPETITIVE COMPENSATION INFORMATION
 
    In determining  base  salaries  and incentive  compensation  for  the  Named
Executive  Officers, primary sources of competitive compensation information are
independent surveys of industry peer companies, specifically including those  in
the Standard & Poor's Aerospace and Defense Index cited in the SHAREOWNER RETURN
PERFORMANCE  PRESENTATION following this Report  and selected other companies in
related industries.  These primary  sources include  the Hewitt  Associates  MCS
Project  777  Survey  (Aerospace Segment)  and  the Summit  Survey  of Aerospace
Companies.
 
    Competitive award guidelines contained in the Company's Long-Term  Incentive
Plan  Guide to Administration have been  determined by an independent consulting
firm and adopted by the Committee.
 
    BASE SALARY
 
    At the  beginning  of each  year,  the  Committee reviews,  and  accepts  or
modifies  as it deems appropriate, an annual  salary plan submitted by the Chief
Executive Officer  for the  Company's senior  executives (other  than the  Chief
Executive  Officer). This  salary plan is  developed by  the Corporation's human
resources staff under  the ultimate  direction of the  Chief Executive  Officer,
based  on  independent market  surveys of  compensation  and evaluation  of past
performance and expected future contributions of the individual executives.
 
    Separately, the Committee  reviews the  base salary of  the Chief  Executive
Officer considering competitive compensation data and the Committee's assessment
of  past performance and its expectation  of future contributions in leading the
corporation.  The   Committee   then  presents   to   the  Board   (absent   all
employee-directors)  its recommendations concerning both  the annual salary plan
for senior executives and the salary for the Chief Executive Officer. The  Board
approves or modifies this submission.
 
    The  Chief  Executive Officer  is paid  a base  salary at  approximately the
competitive market median, measured by  third-party compensation surveys of  the
aerospace  and defense industry.  Also from sources  of competitive compensation
information, it  can be  concluded that  the  average base  salary paid  by  the
Corporation to this executive group is within the competitive market median.
 
    ANNUAL INCENTIVE COMPENSATION
 
    Executives,  including  the  Named  Executive  Officers,  are  eligible  for
incentive compensation  annually  under the  Corporation's  shareholder-approved
Incentive  Compensation Plan. However, no awards may be earned or paid for years
in which the pre-tax return on 3-year average shareholder equity is not at least
10%, or in  which no dividend  is declared  on common and  preferred stock.  The
aggregate  amount of awards  payable may not  exceed 3% of  the pre-tax adjusted
gross margin for that year.
 
    In years in which incentive  compensation awards are payable, the  Committee
decides  individual  awards  for  the  Named  Executive  Officers  following its
consideration of  the  Chief Executive  Officer's  report of  overall  corporate
performance  against the  business measures  delineated above  in MEASUREMENT OF
COMPANY PERFORMANCE. The Committee determines  the size of the annual  incentive
awards for executive officers generally by calculating the product of individual
base salary, target bonus percent based on salary grade, Unit Performance Factor
and an individual performance score termed Individual
 
                                       11

<PAGE>
Performance  Factor. The Unit Performance  Factor represents the Chief Executive
Officer's assessment of overall Company performance as a single numerical  value
that the Committee accepts or revises as it deems appropriate.
 
    Accompanying  his performance  report, the  Chief Executive  Officer submits
recommendations to the Committee for  individual incentive awards for the  Named
Executive  Officers,  except the  Chief Executive  Officer, which  reflect their
contributions to the accomplishment of annual goals and the Company's  long-term
business plan.
 
    Separately,  the Committee considers an incentive compensation award for the
Chief Executive Officer based on  the Committee's assessment of his  recent-year
performance.   The   Committee  then   presents   to  the   Board,   absent  all
employee-directors, its  recommendations concerning  the incentive  compensation
for  the Named  Executive Officers, including  the Chief  Executive Officer. The
Board considers the  Committee's recommendations and  approves this  submission,
modified as it deems appropriate.
 
    For 1995, performance targets for the Company's three Measurement Factors --
1)  pre-tax  return on  3  year average  shareholder  equity; 2)  business value
creation; and 3) supplemental business goals -- were exceeded.
 
    LONG-TERM INCENTIVE COMPENSATION
 
    During each  fiscal  year,  the  Committee  considers  the  desirability  of
granting senior executives, including the Named Executive Officers, awards under
the current shareholder-approved Long-Term Incentive Stock Plan.
 
    The  Long-Term Incentive Stock Plan provides the flexibility to grant awards
spanning a number of years  in a variety of  forms, including stock options  and
restricted performance stock rights. The purpose of this form of compensation is
to  establish long-term performance horizons for Plan participants. By promoting
ownership of  Northrop  Grumman  stock, the  Plan  creates  shareholder-managers
interested in the long-term growth and prosperity of the Company.
 
    In  the Company's fiscal year ended December 31, 1995, the Committee granted
stock options to selected key  managers and -- only  to new participants in  the
Plan  -- restricted performance stock rights. The performance variable governing
the value of  restricted performance  stock rights  is linked  to Company  total
shareholder  return  compared to  that  of companies  in  the Standard  & Poor's
Aerospace  and  Defense  Index  cited  in  the  SHAREOWNER  RETURN   PERFORMANCE
PRESENTATION that follows this Report.
 
    In  establishing  grants  for  individuals,  including  the  Named Executive
Officers other  than the  Chief Executive  Officer, the  Committee reviewed  the
Chief  Executive Officer's recommendations for  individual awards. The Committee
approved awards  taking into  account  the scope  of accountability,  record  of
achievement  and  contribution  and  anticipated  future  influence  on  company
performance of each recipient.
 
    Awards under the  Long-Term Incentive  Stock Plan  in 1995  were granted  on
November  15,  1995.  Applying established  guidelines  for the  size  of annual
long-term incentive awards for Named  Executive Officers, actual grants of  such
awards in 1995 were -- overall -- below the competitive market median.
 
    SPECIAL RECOGNITION AWARDS
 
    In  1994,  to strengthen  Company  performance in  reducing  operating costs
over-and-above the  amount  committed  by management  in  conjunction  with  the
acquisition  of Grumman  Corporation (and  later, Vought  Aircraft Company), the
Committee approved the  Transition Project Incentive  Plan. Effective only  from
July  1, 1994  through December 31,  1995, the  Plan has a  threshold of savings
below which no  compensation is earned,  as well  as a "cap,"  a savings  amount
above  which  no  extra compensation  is  earned. All  Named  Executive Officers
received awards  in March,  1996  associated with  this  Plan. The  amounts  are
reflected in the Summary Compensation Table following this Report.
 
DETERMINING CHIEF EXECUTIVE OFFICER COMPENSATION
 
    In  evaluating 1995 performance  of the Chief  Executive Officer and setting
his annual incentive compensation, the  Committee noted a number of  significant
Company achievements. In making its final
 
                                       12

<PAGE>
determination  as  to  the  Chief  Executive  Officer's  1995  annual  incentive
compensation, these important business results were considered by the  Committee
both separately and in the aggregate without assigned specific values.
 
    The  Committee  recognized  that  under Mr.  Kresa's  direction  the Company
rapidly and  effectively  integrated  the assets  and  operations  of  Northrop,
Grumman,  and Vought into the organization. Operating efficiencies were attained
that exceeded  original  high expectations  while  both customer  relations  and
prospects   for  new   business  were  strengthened.   The  Company's  financial
performance exceeded  planned numerical  targets and  shareholders total  return
outstripped projections for the year.
 
    The  Company met its commitment  of delivering four B-2  aircraft to the Air
Combat Command. Moreover, the Company was successful in supporting Congressional
efforts on behalf of the B-2.  Excellent performance on other military  aircraft
programs  was  highlighted  by  continued  customer  acclaim  for  the Company's
performance on  the F/A-18  E/F  program. Northrop  Grumman performance  in  the
production  of major structures for the C-17 aircraft resulted in the receipt of
the McDonnell Douglas  Silver Preferred  Supplier Award and  contributed to  the
Government's  decision  to extend  production beyond  the original  forty units.
Marking the  culmination of  a record  of  high performance  in the  design  and
fabrication  of commercial  aircraft structures,  the Company  earned continuing
customer confidence with the receipt of the Boeing President's Award as Supplier
of the Year  and new long-term  agreements for production  of major sections  of
Boeing's 747, 757, and 767 airliners.
 
    Further  strengthening the strategic position of the Company and its outlook
for success and high performance for customers and shareholders, Mr. Kresa, with
the approval of the Board, directed plans and actions that resulted, on  January
3,  1996, in the Company's agreement  with Westinghouse Electric Corporation for
the acquisition of  the Electronics  Systems Group  of that  company. This  will
contribute significantly to the long-term growth of the Company, its competitive
position, and the financial strength of Northrop Grumman.
 
    Based  upon competitive market bonus practice  derived from sources cited in
the Competitive Compensation Information section of this report and Mr.  Kresa's
performance  as  outlined in  this section,  and  taking into  consideration Mr.
Kresa's base salary, the Committee  granted Mr. Kresa an incentive  compensation
award to recognize his 1995 performance. Following its review of the total value
of  incentive  stock holdings  (i.e., grants  of stock  and stock  options under
present and  previous Long-Term  Incentive  Plans) and  considering  competitive
market  long-term  incentive  practices  discussed  in  the  Long-Term Incentive
Compensation section of  this report,  the Committee  also granted  Mr. Kresa  a
long-term  incentive award of stock options in  November 1995 to both reward and
motivate his continuing contributions to  the future prosperity of the  Company.
Finally,  considering his performance, the Company's expanded size and revenues,
and  previously  cited  Competitive  Compensation  Information,  the   Committee
adjusted   Mr.  Kresa's  base  salary  effective  March  1,  1995.  The  Summary
Compensation Table following  this Report contains  information detailing  these
actions.
 
    THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE:
 
                        RICHARD J. STEGEMEIER, CHAIRMAN
                                JACK R. BORSTING
                               JOHN T. CHAIN, JR.
                                  JACK EDWARDS
                                 JOHN E. ROBSON
                                BRENT SCOWCROFT
 
                                                                  MARCH 20, 1996
 
                                       13

<PAGE>
SHAREOWNER RETURN PERFORMANCE PRESENTATION
 
    Set  forth below is a  line graph comparing the  yearly percentage change in
the cumulative total shareowner return on the Company's Common Stock against the
cumulative total  return  of the  S&P  Composite-500  Stock Index  and  the  S&P
Aerospace  and Defense Composite  Index for the five  year period ended December
31, 1995.
 
                COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
   NORTHROP GRUMMAN CORPORATION, S&P 500 INDEX & S&P AEROSPACE/DEFENSE INDEX
 
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
 

<TABLE>
<CAPTION>
             NORTHROP GRUMMAN     S&P 500 INDEX      S&P AEROSPACE/DEFENSE INDEX
<S>        <C>                   <C>               <C>
1990                        100               100                              100
1991                        159               130                              120
1992                        216               140                              126
1993                        247               154                              163
1994                        289               156                              177
1995                        453               215                              291
</TABLE>

 
ASSUMES $100 INVESTED AT THE BEGINNING OF THE PERIOD IN NORTHROP GRUMMAN COMMON
STOCK, S&P 500 INDEX AND S&P AEROSPACE/DEFENSE INDEX.
 
* TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
 
                                       14

<PAGE>

                             EXECUTIVE COMPENSATION
 
    There  is  shown  below  information  concerning  the  annual  and long-term
compensation for services in all capacities  to the Company for the years  ended
December  31, 1995, 1994 and 1993 of those persons who were at December 31, 1995
the chief executive officer and the other four most highly compensated  officers
of the Company (the "Named Executive Officers").
 
                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                      ANNUAL COMPENSATION            OTHER
                                               ---------------------------------    ANNUAL
         NAME AND PRINCIPAL POSITION           YEAR    SALARY ($)     BONUS ($)   COMPENSATION ($)
- ---------------------------------------------  ----  --------------   ----------  -----------
<S>                                            <C>   <C>              <C>         <C>
KENT KRESA(4)................................  1995      730,000      1,000,000
    Chairman of the Board,                     1994      700,000        850,000     56,344
    President and Chief Executive Officer      1993      675,000        450,000
GORDON L. WILLIAMS...........................  1995      238,688(5)     428,000    481,742(7)
    Corporate Vice President and               1994      120,344(6)     126,000
    General Manager, Commercial
    Aircraft Division
WALLACE C. SOLBERG...........................  1995      336,667        320,000
    Corporate Vice President and               1994      305,833        300,000
    General Manager, Military Aircraft         1993      266,667        115,000
    Systems Division
RICHARD B. WAUGH, JR.........................  1995      275,000        350,000
    Corporate Vice President and               1994      245,833        360,000
    Chief Financial Officer                    1993      225,000        136,000
RICHARD R. MOLLEUR...........................  1995      288,333(8)     330,000
    Corporate Vice President and               1994      275,000        345,000
    and General Counsel                        1993      248,000        150,000
 
<CAPTION>
                                                          LONG-TERM COMPENSATION
                                               --------------------------------------------
 
                                                          AWARDS                PAYOUTS
                                               ----------------------------  --------------
                                                                 SECURITIES
                                                 RESTRICTED      UNDERLYING
                                                    STOCK         OPTIONS/        LTIP            ALL OTHER
         NAME AND PRINCIPAL POSITION           AWARD(S) ($)(1)    SARS (#)   PAYOUTS ($)(2)   COMPENSATION ($)(3)
- ---------------------------------------------  ---------------   ----------  --------------   ------------------
<S>                                            <C>               <C>         <C>              <C>
KENT KRESA(4)................................             0        42,000          480,000          5,625
    Chairman of the Board,                                0        40,000                           6,000
    President and Chief Executive Officer                 0        34,400                           9,434
GORDON L. WILLIAMS...........................       485,000        10,000          267,120
    Corporate Vice President and                          0        12,000
    General Manager, Commercial
    Aircraft Division
WALLACE C. SOLBERG...........................             0        10,000          180,200          6,000
    Corporate Vice President and                          0        12,000                           6,000
    General Manager, Military Aircraft              128,700        12,000                           8,686
    Systems Division
RICHARD B. WAUGH, JR.........................             0        10,000          148,400          6,000
    Corporate Vice President and                          0        12,000                           5,997
    Chief Financial Officer                         128,700        12,000                           9,434
RICHARD R. MOLLEUR...........................             0        10,000          153,700          6,000
    Corporate Vice President and                          0        10,000                           4,350
    and General Counsel                             107,250        10,000                           6,999
</TABLE>

 
- ------------------------------
(1)  Restricted Stock Rights ("RSRs") granted under the 1987 Long-Term Incentive
    Plan (the "Plan") provide for the  issuance of unrestricted Common Stock  in
    yearly  increments equal  to 20% of  the total grant,  commencing within one
    year of the grant date. The entire RSR grant is therefore issued within five
    (5) years from the  date of grant. Restricted  stock granted under the  1993
    Long-Term  Incentive Plan  with vesting dates  of less than  three (3) years
    were granted  to  G.L.  Williams  on  August  25,  1995  for  8,000  shares.
    Aggregated  restricted shares  or rights  held by  Named Executive Officers,
    valued at December  31, 1995, were:  K. Kresa 26,250  shares at  $1,680,000,
    G.L.  Williams  8,000  shares  at $512,000,  W.C.  Solberg  2,750  shares at
    $176,000, R.B.  Waugh, Jr.,  1,600 shares  at $102,400,  R.R. Molleur  1,000
    shares at $64,000.
 
(2)  Awards  granted pursuant  to the  Transition  Project Incentive  Plan whose
    performance period ended December 31, 1995.
 
(3) "All Other Compensation" consists  of Company contributions to the  Northrop
    Grumman Savings and Investment Plan for the Named Executive Officers.
 
(4)  Annual Compensation in excess of $1,000,000 attributable to 1995 that would
    be disallowed for tax deduction  under Internal Revenue Code Section  162(m)
    will  be  deferred  in  accordance  with  the  Company's  Executive Deferred
    Compensation Plan, which provides  for interest on  the deferred amount  and
    payment in installments or lump sum at the election of the participant.
 
(5)  In 1995,  Mr. Williams  received $196,439  pursuant to  the Vought Aircraft
    Supplemental Executive  Retirement  Plan, adopted  by  Vought in  1992  (the
    "Vought  Supplemental  Plan") which,  pursuant  to his  employment contract,
    reduced his salary in 1995 by an equal amount.
 
(6) Mr.  Williams was  elected  Corporate Vice  President and  General  Manager,
    Commercial  Aircraft Division  in September 1994.  The compensation reported
    for 1994 reflects  salary paid  following the  Corporation's acquisition  of
    Vought  Aircraft Company  in September  1994. Mr.  Williams received $21,909
    pursuant to the Vought Supplemental  Plan which, pursuant to his  employment
    contract, reduced his salary in 1994 by an equal amount.
 
(7)  Amount  includes  $424,018  reimbursement for  payment  of  taxes primarily
    related to required  reimbursement for  funding of  the Vought  Supplemental
    Plan.
 
(8)  Amount does  not include  $22,697 paid for  vacation hours  accrued but not
    used.
 
                                       15

<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
 
    There is  shown  below information  concerning  individual grants  of  stock
options  made  during  the last  completed  fiscal  year to  each  of  the Named
Executive Officers.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 

<TABLE>
<CAPTION>
                                                                                                 POTENTIAL REALIZABLE
                                                                                                   VALUE AT ASSUMED
                                                                                                   ANNUAL RATES OF
                                                                                                     STOCK PRICE
                                                                                                   APPRECIATION FOR
                                       INDIVIDUAL GRANTS                                           OPTION TERM (1)
- -----------------------------------------------------------------------------------------------  --------------------
                                    NUMBER OF
                                   SECURITIES        % OF TOTAL
                                   UNDERLYING      OPTIONS GRANTED    EXERCISE OR
                                     OPTIONS       TO EMPLOYEES IN       BASE       EXPIRATION
NAME                             GRANTED(#) (2)      FISCAL YEAR     PRICE ($/SH)      DATE       5% ($)     10% ($)
- -------------------------------  ---------------  -----------------  -------------  -----------  ---------  ---------
<S>                              <C>              <C>                <C>            <C>          <C>        <C>
KENT KRESA.....................        42,000              5.81        $   57.00      11/15/05   1,505,826  3,816,036
GORDON L. WILLIAMS.............        10,000              1.38            57.00      11/15/05     358,530    908,580
WALLACE C. SOLBERG.............        10,000              1.38            57.00      11/15/05     358,530    908,580
RICHARD B. WAUGH, JR...........        10,000              1.38            57.00      11/15/05     358,530    908,580
RICHARD R. MOLLEUR.............        10,000              1.38            57.00      11/15/05     358,530    908,580
</TABLE>

 
- ------------------------------
(1) The potential realizable  value of each grant  of options assuming that  the
    market  price of Northrop Grumman Common Stock from the date of the grant to
    the end of the option term (10 years) appreciates in value at an  annualized
    rate of 5% and 10%.
 
(2)  The first  installment of  25% of the  total grant  becomes exercisable two
    years after the date of the grant, with 25% vesting annually thereafter.
 
OPTION EXERCISES AND VALUES
 
    Shown below is aggregated information with respect to the exercise of  stock
options  during the year ending December 31, 1995 by each of the Named Executive
Officers, and the  value at December  31, 1995 of  unexercised options,  without
stock appreciation rights.
 
    AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
 

<TABLE>
<CAPTION>
                                                                               NUMBER OF
                                                                              SECURITIES           VALUE OF
                                                                              UNDERLYING         UNEXERCISED
                                                                              UNEXERCISED        IN-THE-MONEY
                                                                              OPTIONS AT          OPTIONS AT
                                                                               FY-END(#)          FY-END($)
                                           SHARES ACQUIRED       VALUE       EXERCISABLE/        EXERCISABLE/
NAME                                       ON EXERCISE (#)   REALIZED ($)    UNEXERCISABLE    UNEXERCISABLE (1)
- ----------------------------------------  -----------------  -------------  ---------------  --------------------
<S>                                       <C>                <C>            <C>              <C>
KENT KRESA..............................              0                0    508,600/107,800  23,242,950/1,862,850
GORDON L. WILLIAMS......................              0                0           0/22,000             0/322,000
WALLACE C. SOLBERG......................         11,000          363,000      19,800/42,200     721,050/1,000,450
RICHARD B. WAUGH, JR....................              0                0      13,200/34,200       511,575/697,450
RICHARD R. MOLLEUR......................          2,000           64,750      21,500/37,500       801,500/875,125
</TABLE>

 
- ------------------------------
(1) Based on the market value at December 31, 1995 of $64.00
 
                                       16

<PAGE>
PENSION PLANS
 
    For purposes of illustration, the following table shows the amount of annual
retirement  benefits that would be accrued at  age 65 under the Northrop Grumman
Pension Plan (the "Pension Plan"),  as supplemented by the Northrop  Corporation
ERISA  Supplemental  Plan I  ("ERISA 1")  and the  ERISA Supplemental  Program 2
("ERISA 2") (collectively, the "Supplemental Retirement Plans").
 

<TABLE>
<CAPTION>
   ANNUAL
   AVERAGE
COMPENSATION
  (HIGHEST                                   YEARS OF BENEFIT SERVICE
 3 YEARS OUT     --------------------------------------------------------------------------------
 OF LAST 10)        5           10          15          20          25          30          35
- -------------    --------    --------    --------    --------    --------    --------    --------
<S>              <C>         <C>         <C>         <C>         <C>         <C>         <C>
  $  100,000     $  8,300    $ 16,700    $ 25,000    $ 33,300    $ 41,700    $ 50,000    $ 50,000
     150,000       12,500      25,000      37,500      50,000      62,500      75,000      75,000
     200,000       16,700      33,300      50,000      66,700      83,300     100,000     100,000
     250,000       20,800      41,700      62,500      83,300     104,200     125,000     125,000
     300,000       25,000      50,000      75,000     100,000     125,000     150,000     150,000
     400,000       33,300      66,700     100,000     133,300     166,700     200,000     200,000
     500,000       41,700      83,300     125,000     166,700     208,300     250,000     250,000
     600,000       50,000     100,000     150,000     200,000     250,000     300,000     300,000
   1,000,000       83,300     166,700     250,000     333,300     416,700     500,000     500,000
   1,400,000      116,700     233,300     350,000     466,700     583,300     700,000     700,000
   1,800,000      150,000     300,000     450,000     600,000     750,000     900,000     900,000
</TABLE>

 
Compensation covered  by  the  plans for  executive  officers  is  substantially
equivalent to salary and bonuses as reflected in the Summary Compensation Table.
Benefit  Service earned after January 1, 1995 in  excess of 30 years will not be
taken into account for  accrual of retirement  benefits. Benefits payable  under
the Supplemental Retirement Plans have been secured through the establishment of
two  grantor trusts. The  credited years of  service under the  Pension Plan and
Supplemental Retirement  Plans of  four of  the five  individuals named  in  the
Summary  Compensation Table are as follows: Mr. Kresa, 21 years; Mr. Solberg, 12
years; Mr. Waugh, 17 years  and Mr. Molleur, 5  years. In addition, Mr.  Solberg
will receive an annual retirement benefit of $32,059 under a separate retirement
plan  of a Company division. Benefits are  calculated on a straight life annuity
basis, at selected  compensation levels and  years of service  reflected in  the
table  above. The listed  benefit amounts are  not subject to  any reduction for
Social Security benefits or other offset amounts.
- ------------------------
(1) The Company maintains  a Supplemental Retirement  Income Program for  Senior
    Executives  ("SRI"),  under which  certain employees  are designated  by the
    Board of  Directors,  to receive  benefits  in lieu  of  benefits  otherwise
    payable  under the Pension  Plan and the  Supplemental Retirement Plans. The
    amount of the supplemental benefit under the SRI is equal to the greater  of
    1)  the  participant's benefit  under  the Pension  Plan  calculated without
    regard to the limits imposed under Sections 415 and 401(a)(17) of the  Code,
    or  2) a fixed  percentage of the participant's  final average salary (which
    term includes bonus and is based on the highest 3 years out of last 5) equal
    to 30% at age 55,  increasing 4% for each year  up to and including age  60,
    and  increasing 2% for each year beyond age  60 to 65, in each case less the
    benefit allowable under  the Pension  Plan. Mr.  Kresa, who  is eligible  to
    receive  an  annual benefit  (estimated to  be $957,511  payable at  age 65,
    assuming continued  employment  and based  upon  estimated levels  of  final
    average  salary) under  SRI, is the  only Named  Executive Officer currently
    participating in SRI.  SRI eligibility,  in addition to  designation by  the
    Board  of  Directors, requires  the attainment  of  age 55  and 10  years of
    vesting service. The vesting service requirement may be waived by the  Chief
    Executive Officer.
 
(2)  Benefits paid to Mr. Williams pursuant  to the Vought Supplemental Plan are
    determined on an actuarial basis based  on 50% of the participant's  average
    monthly  compensation (based on highest total compensation over a three year
    period) subject to offsets for amounts paid or payable under defined benefit
    retirement plans. Mr. Williams commenced receiving benefits pursuant to  the
    Vought Supplemental Plan in 1994, and he is currently eligible to receive an
    annual benefit (estimated to be
 
                                       17

<PAGE>
    not less than $400,000) under this plan for life with a 50% spousal survivor
    benefit  thereafter.  Mr.  Williams  is  the  only  Named  Executive Officer
    currently participating in the Vought Supplemental Plan.
 
CHANGE IN CONTROL AGREEMENT
 
    The Company  has approved  new special  severance agreements  ("Agreements")
with  its  executive  officers,  including  Messrs.  Kresa,  Solberg,  Waugh and
Molleur. The purpose of the Agreements  is to encourage these key executives  to
continue  to carry out their duties in the  event of the possibility of a change
in control of the Company. Payments under  the Agreements would be made only  if
there  is a Change in  Control of the Company  and the executive's employment is
thereafter terminated, within  a period  of 24  months other  than for  narrowly
defined causes.
 
    Generally,  a "Change in  Control" shall be  deemed to have  occurred if (i)
there is a consolidation  or merger of  the Company and the  Company is not  the
surviving  corporation or the Company's shareholders do not own more than 75% of
the voting stock of the  surviving corporation, (ii) there  is a sale, lease  or
transfer  of  substantially  all  of  the  assets  of  the  Company,  (iii)  the
shareholders approve a plan  or proposal for the  liquidation or dissolution  of
the  Company, (iv)  any person  (other than a  trust established  pursuant to an
employee benefit plan  of the Company)  becomes the beneficial  owner of 15%  or
more  of  the Company's  outstanding stock,  or (v)  during any  two-year period
individuals who at the beginning of  such period (including new directors  whose
election  was approved  by at  least two-thirds (2/3)  of the  directors then in
office or whose election was so approved) cease for any reason to be a  majority
of the board of directors.
 
    The  executive shall be  entitled to certain benefits  upon a termination of
employment within the  twenty-four month  period following a  Change in  Control
except  a  termination of  employment resulting  from  the executive's  death, a
termination by the Company for "cause" or "disability", or a termination by  the
executive other than for "good reason."
 
    In  the event of a  termination which requires the  Company to make payments
under an  Agreement,  the  executive  shall  be  entitled,  subject  to  certain
exceptions,  to: (i) full  base salary through  the date of  termination and any
other sums owed the executive, (ii) severance pay equal to 3.0 X the executive's
highest  annual  base  salary  in  effect  at  any  time  through  the  date  of
termination,  (iii) 3.0  X the  higher of the  executive's average  bonus over a
three year period  or the target  bonus for  the year in  which the  termination
occurs;  (iv) medical, dental and  life insurance benefits substantially similar
to those which the  executive was receiving  as of the Change  in Control for  a
period  of  36 months,  (v)  all deferred  and  accrued bonus  and  vacation pay
pursuant to policies in  effect as of designated  alternative dates, and (vi)  a
cash  payment  representing  the present  value  of benefits  accrued  under the
Company's supplemental  and  excess  benefit plans  (calculated  as  though  the
executive's  employment had continued for three  years). The Company will make a
payment to the executive to ensure  that the amounts received attributable to  a
Change  in Control are not subject to net reductions due to imposition of excise
taxes under Section 4999 of the Code.
 
MANAGEMENT CONTRACTS
 
    In August, 1995, the Company entered  into an employment agreement with  Mr.
Gordon  L. Williams,  Corporate Vice  President and  General Manager, Commercial
Aircraft Division.  Under  the Agreement,  which  expires August  1,  1997,  Mr.
Williams  is entitled to an annual base  salary, commencing in 1996, of $420,000
which is not offset by amounts  payable under the Vought Supplemental Plan,  and
is  eligible  to  participate  in  the  Company's  Incentive  Compensation Plan.
Pursuant to  the contract,  Mr. Williams  received a  grant of  8,000 shares  of
restricted  stock under the Company's 1993 Plan  of which 3,000 shares vested on
February 16, 1996 with the remaining shares vesting on August 1, 1997.
 
C
ERTAIN TRANSACTIONS
 
    Mr. Edwards is a  member of the  law firm of Hand  Arendall, LLC. This  firm
served as a consultant for Northrop Grumman Corporation through March 31, 1995.
 
                                       18

<PAGE>
    Ms.  Peters is  a partner  of the  law firm  of Gibson,  Dunn &  Crutcher. A
partner of  Gibson,  Dunn  &  Crutcher is  a  consultant  for  Northrop  Grumman
Corporation  providing analysis and advice with  respect to pending and proposed
legislation, and  the  firm  provided  legal  counsel  in  connection  with  the
acquisition   of  the   Electronic  Systems   Group  of   Westinghouse  Electric
Corporation.
 

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    Section  16(a)  of  the  Securities  Exchange  Act  of  1934  requires   the
Corporation's  officers and directors, and persons who own more than ten percent
of a registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership on Forms  3, 4 and 5 with the Securities  and
Exchange  Commission (SEC) and the New  York Stock Exchange. Officers, directors
and greater  than ten  percent shareowners  are required  by SEC  regulation  to
furnish the Corporation with copies of all Forms 3, 4 and 5 they file.
 
    Based  solely on the Corporation's review of the copies of such forms it has
received and written  representations from certain  reporting persons that  they
were  not required to file  Forms 5 for specified  fiscal years, the Corporation
believes that  all  its  officers,  directors,  and  greater  than  ten  percent
beneficial  owners complied with all filing requirements applicable to them with
respect to transactions during fiscal 1995, except John E. Robson, who  reported
on August 15, 1995 the purchase of 27 shares on July 26, 1995.
 
                                       19

<PAGE>
 
            PROPOSAL TO APPROVE AMENDMENTS TO THE NORTHROP GRUMMAN
                1993 LONG-TERM INCENTIVE STOCK PLAN TO ESTABLISH
                   GRANT LIMITS ON SHARES AWARDED PURSUANT TO
                      RESTRICTED PERFORMANCE STOCK RIGHTS
 
    On  February 17, 1993,  the Board of Directors  adopted the Northrop Grumman
1993 Long-Term Incentive Stock  Plan (the "1993  Plan"), which was  subsequently
approved  by the  stockholders on  May 19, 1993.  In May  1995, the stockholders
approved amendments to the Plan to increase the number of shares available under
the Plan by 1,800,000 and to place individual grant limits on stock options.  As
of March 1, 1996, 2,308,315 shares of Common Stock remained available for grants
of incentive awards under the 1993 Plan.
 
    The  Board  of  Directors has  further  amended  the 1993  Plan,  subject to
stockholder approval of  the amendment,  to provide  for the  granting of  stock
awards  in  the form  of Restricted  Performance Stock  Rights ("RPSRs")  and to
impose a limit  on the number  of RPSRs which  may be granted  to a  participant
during  any three consecutive years and to limit eligibility for any award under
the 1993 Plan to key employees.
 
    The full text of the 1993 Plan, with the proposed amendments, is attached to
this Proxy Statement as Exhibit A.  Principal features are described below,  but
such  description is qualified in its entirety  by reference to the text. Except
as otherwise described  herein, all other  provisions of the  1993 Plan are  not
materially changed.
 
ESTABLISHMENT OF AN INDIVIDUAL GRANT LIMIT
 
    To comply with final regulations under Section 162(m) of the Code, the Board
has amended the 1993 Plan to establish a limit of 133,000 on the number of RPSRs
which  may be awarded during any three  consecutive years under the 1993 Plan to
an eligible employee. Pursuant to this limitation, the maximum amount of  shares
an eligible employee could receive pursuant to such awards is 150% of such limit
(199,500 shares) plus the number of shares distributable as dividend equivalents
on earned RPSRs for the period of time the RPSRs were outstanding.
 
    Section  162(m) of the Code and the regulations adopted thereunder generally
would disallow the Company a Federal income tax deduction for compensation  paid
to  the  chief executive  officer  and the  four  other most  highly compensated
executive officers to  the extent  such compensation exceeds  $1,000,000 in  any
year  excluding  certain  performance-based  compensation.  Compensation expense
attributable to the  RPSRs granted under  the 1993 Plan  would be excludable  as
performance-based compensation only if the 1993 Plan includes the proposed limit
on  the number  of RPSRs with  respect to  which awards may  be made  to any one
employee in a specified period and the material terms of the performance goal is
disclosed to and subsequently approved by the shareholders. Pursuant to the 1993
Plan, certain other stock awards may also be granted which will not comply  with
the  regulations proposed under  Section 162(m), in  which case the compensation
paid thereto would not constitute excludable performance-based compensation  for
purposes of Section 162(m).
 
1993 PLAN DESCRIPTION
 
    The  primary  objectives  of the  1993  Plan  are to:  (1)  link significant
ownership-creating opportunities for  key employees to  successful execution  of
strategic business goals and growth in stockholder value; (2) create the energy,
enthusiasm  and incentive to position the  Corporation for sustained growth; (3)
retain outstanding performers and those with critical skills; and (4) support  a
philosophy of fairness, reasonableness and pay for results.
 
    The  1993 Plan is administered by  the Company's Compensation and Management
Development  Committee   (the  "Committee")   consisting  of   at  least   three
non-employee  members of  the Board  of Directors  who qualify  as disinterested
directors  under  Rule   16b-3.  The   Committee,  in   addition  to   selecting
participants,  is empowered,  within certain limitations  set forth  in the 1993
Plan, to determine the number  of shares to be covered  by awards and the  terms
(including  form of  settlement) of all  awards. The  Committee also interprets,
makes  rules,  regulations   and  determinations,   and  otherwise   administers
 
                                       20

<PAGE>
the  1993 Plan  to carry out  its intent. No  amendment to the  1993 Plan, which
would increase the  number of  shares available for  issuance thereunder  (other
than  for changes in the corporate  structure explained below)or would otherwise
cause the 1993 Plan not to comply  with Rule 16b-3, may be effected without  the
approval of stockholders.
 
    Any  key employee of the Company (or of any subsidiary or other entity which
the Committee  determines  meets  the  1993  Plan  eligibility  requirement)  is
eligible to receive awards. While the concept of a "key employee" is necessarily
and  intentionally flexible, approximately 300 employees are considered eligible
at this  time.  Awards received  under  the 1993  Plan  by the  Named  Executive
Officers in 1995, 1994 and 1993 are disclosed in the Summary Compensation Table.
Under  the 1993 Plan, all executive officers as a group have received options to
purchase 430,900 shares and  all employees (including  current officers who  are
not  executive officers) as a group  have received options to purchase 2,627,600
shares.
 
    The 1993  Plan  terminates  as  of  the  fifth  anniversary  of  stockholder
approval,  unless terminated  by the  Board of Directors  at an  earlier date or
extended to a later date by stockholder vote. Subject to appropriate  adjustment
in  the event of certain changes in the Company's corporate structure, including
stock dividends, recapitalizations, mergers  or similar transactions or  events,
as  determined by  the Committee, the  number of  shares of Common  Stock of the
Company available for issuance under the 1993 Plan is 4,100,000, plus any shares
which are available but not issued under the Prior Plans (as defined in the 1993
Plan), plus any  shares which are  forfeited back to  the Company or  used by  a
participant as payment, whether full or partial, in connection with the exercise
of  a stock option or other  award. Where an award is  settled in cash or a form
other than shares, the shares that would have been issued had there been no cash
or other settlement shall be charged  against the maximum number of shares  that
may  be issued. The closing price of Common  Stock on March 1, 1996, as reported
on the New York Stock Exchange, was $62 per share.
 
    The 1993 Plan provides for three general types of stock incentive awards, as
follows:
 
    STOCK OPTIONS:   The  Committee  may award  non-qualified stock  options  or
incentive  stock options ("ISOs")  which qualify for  specified tax status under
Section 422 of the  Code. A stock  option entitles the  recipient to purchase  a
specified number of shares of Common Stock at a fixed price subject to terms and
conditions set by the Committee. The purchase price of shares covered by a stock
option  may not be less than 100% of fair market value on the date the option is
awarded, except  that in  situations  where a  non-qualified option  is  awarded
retroactively  in tandem with or as substitution for another award, the purchase
price may be the same  as the purchase or designated  price of the other  award.
There are statutory limits on the number of shares for which ISOs may be awarded
to  any  participant. Currently,  the aggregate  fair market  value of  such ISO
shares (determined at the  time the option is  awarded) may not exceed  $100,000
for  all  shares  covered  by  options awarded  to  a  participant  which become
exercisable for the first time in any calendar year.
 
    STOCK APPRECIATION RIGHTS:  A  stock appreciation right ("SAR") permits  its
recipient,  subject to such  terms and conditions  as the Committee  may set for
each award, to receive in shares, cash or a combination of both, an amount up to
the positive aggregate  difference, if  any, between  the value  of the  covered
shares,  based on the closing price as  of the exercise date, and the designated
price of a specified number of shares.  The designated price of the SARs may  be
not less than the closing price of the Common Stock on the date of award, except
that  if a SAR  is awarded retroactively  in tandem with  or in substitution for
another award,  the  designated  price  may  be the  same  as  the  purchase  or
designated price of the other award.
 
    STOCK  AWARDS:  The  Committee may award to  selected participants shares of
Common Stock or  share equivalents  under such terms  and conditions  as it  may
determine.  These awards may require that the recipients remain in the Company's
employ for specified future periods of time for the shares or share  equivalents
to  vest. Additionally, the Committee  may require that the  awards vest only if
certain
 
                                       21

<PAGE>
levels  of  shareholder  returns  or  other  measurable  financial  performance,
determined  in  advance, are  achieved. Stock  awards  also may  be used  by the
Committee as a  form of payment  to key  employees for salary  or for  incentive
compensation awarded under other Company plans (e.g., annual incentives).
 
    Any  awards under  the 1993 Plan  may carry dividend  or dividend equivalent
rights as determined by  the Committee. Further, the  Committee is empowered  to
permit  participants to defer award payments and settlements under such terms as
it may unilaterally establish.
 
    Generally, all awards  under the  1993 Plan are  non-transferable except  by
will or in accordance with the laws of descent and distribution or pursuant to a
qualified domestic relations order. During the life of a participant, awards may
be  exercised  only  by  such  participant,  and  the  Committee  may  permit  a
participant to designate a  beneficiary to exercise or  receive any rights  that
may  exist upon the participant's death. In the  event of a change in control of
the Company,  all outstanding  stock options  and restricted  stock awards  vest
immediately;  RPSRs vest on  a pro-rata basis  (with an earnout  based on actual
performance).
 
    Awards granted under the 1993 Plan include (1) non-qualified stock  options,
(2) stock awards and (3) RPSRs.
 
    An RPSR is a right to receive a share of Company stock on a specified future
date conditioned upon continued employment and the change in the Company's Total
Shareholder  Return ("TSR") compared to that of Peer Companies as a group. RPSRs
can be earned over  the five-year Performance Period.  The number earned  versus
the  number  granted  will  be  determined by  measurement  at  the  end  of the
Performance Period  of changes  in the  Company  TSR compared  to that  of  Peer
Companies  as a group. This will occur by taking the value of a theoretical $100
investment in  the  Company  and a  $100  investment  in Peer  Companies  (as  a
portfolio)  at the start of the Performance  Period at the Base Period Price and
comparing it to the  value of those  investments at the  end of the  Performance
Period.  TSR  equals the  value at  the end  of the  Performance Period  of $100
invested in a company's stock at the company Base Period Price at the  beginning
of  the  Performance  Period,  with  dividends  reinvested  and  converted  into
additional shares of stock. The Performance Period for earning RPSRs is the five
full calendar years following the initial Date of Grant. The Base Period is  the
immediate  three calendar years preceding a  Performance Period. The Base Period
Price for the  Company and  each Peer  Company is  the average  of the  year-end
closing stock prices for the three-year period preceding the Performance Period.
Peer   Companies  are   those  that  comprise   the  Standard   &  Poor's  (S&P)
Aerospace/Defense Group.
 
    Under present Federal income tax law, the Company believes that the award of
a stock option  or SAR  generally creates no  Federal tax  consequences for  the
recipient or the Company. In general, the optionee has no Federal taxable income
upon  exercising an ISO (except that the alternative minimum tax may apply), and
the Company receives no  deduction when an ISO  is exercised. Upon exercising  a
non-qualified  stock option, the recipient  must recognize ordinary income equal
to the difference between the  exercise price and the  fair market value of  the
stock  on the date of exercise, and the  Company generally will be entitled to a
deduction for  the  same  amount. The  tax  consequences  to a  recipient  on  a
disposition  of shares acquired through the exercise of an option depends on how
long the shares  have been  held and  on whether  such shares  were acquired  by
exercising  an ISO  or by  exercising a  non-qualified stock  option. Generally,
there are no Federal income tax consequences to the Company in connection with a
disposition of shares acquired  under an option except  that the Company may  be
entitled to a deduction in the case of a disposition of shares acquired under an
ISO before the applicable ISO holding periods have been satisfied.
 
    With  respect to other awards  made under the 1993  Plan that are settled in
cash, stock or  other property  that is either  transferable or  not subject  to
substantial  risk of forfeiture, the  participant must recognize ordinary income
equal to the  cash or  the fair  market value of  the shares  or other  property
received at that time, and the Company generally will be entitled to a deduction
for  the same amount. Under present Federal income tax law, the Company believes
that the recipient of RPSRs granted under the 1993 Plan must recognize  ordinary
income   equal   to  the   fair  market   value  of   the  shares   received  on
 
                                       22

<PAGE>
the payment  date of  such shares.  Dividend equivalents  earned on  RPSRs  also
constitute  ordinary  income when  such dividends  are  paid at  the end  of the
five-year performance  period.  The Company  generally  will be  entitled  to  a
deduction equal to the ordinary income recognized by the recipient. With respect
to  awards that are settled in stock or  other property that is restricted as to
transferability and subject to substantial risk of forfeiture, unless a  special
election  to be  taxed is made,  the participant must  recognize ordinary income
equal to the fair market value of  the shares or other property received at  the
time  the  shares  or  other  property become  transferable  or  not  subject to
substantial risk of forfeiture,  whichever occurs earlier,  over the amount  (if
any)  paid by the participant,  and the Company will  be entitled to a deduction
for the same amount at that time.  Different Federal income tax rules may  apply
with  respect to participants  who are subject  to Section 16  of the Securities
Exchange Act of 1934.
 
    The preceding discussion is only a general summary of certain Federal income
tax consequences arising from participation in  the 1993 Plan and should not  be
used  for  a  determination  of  an individual's  unique  tax  situation.  It is
suggested  that  the  individual  consult  with  a  tax  advisor  regarding  the
application  of  Federal,  state  and  local  tax  laws  to  his/her  particular
situation.
 
VOTE REQUIRED
 
    The affirmative vote of a majority of  the shares of Common Stock voting  at
the  Annual  Meeting (with  each share  entitled  to one  vote) is  required for
approval of this  proposal. THE BOARD  OF DIRECTORS RECOMMENDS  A VOTE FOR  THIS
PROPOSAL.
 
                      APPOINTMENT OF INDEPENDENT AUDITORS
 
    The  Board of Directors recommends that  the stockholders ratify the Board's
appointment of Deloitte & Touche LLP as the independent auditors of the  Company
for  1996. Deloitte & Touche LLP served  the Company as its independent auditors
for 1995. Should the stockholders fail  to ratify the appointment of Deloitte  &
Touche  LLP, the Board of  Directors will consider this  an indication to select
other auditors for the following year.
 
    A representative of  Deloitte &  Touche LLP will  be present  at the  Annual
Meeting  of Stockholders and will be offered  an opportunity to make a statement
if he so desires. He will also be available to answer appropriate questions from
stockholders.
 
VOTE REQUIRED
 
    The affirmative vote of a majority of  the shares of Common Stock voting  at
the  annual meeting  (with each  share entitled  to one  vote), is  required for
approval of this  proposal. THE BOARD  OF DIRECTORS RECOMMENDS  A VOTE FOR  THIS
PROPOSAL.
 
                                       23

<PAGE>
                              STOCKHOLDER PROPOSAL
 
    The  proponent  of  a stockholder  proposal  has stated  that  the proponent
intends to  present a  proposal at  the Annual  Meeting. The  name, address  and
number  of shares held by  the proponent will be  furnished by Northrop Grumman,
orally or in writing as requested, promptly upon receipt of any oral or  written
request  therefor,  directed  to  the  Corporate  Secretary.  The  proposal  and
supporting  statement,   for   which  the   Board   of  Directors   accepts   no
responsibility,  is set forth below. The Board of Directors opposes the proposal
for the reasons stated after the proposal.
 

PROPOSAL
 
WHEREAS   in fiscal  year  1994, the  United  States controlled  65-70%  of  the
          world's arms market, delivering $12 billion in weapons. Since the fall
          of   the  Berlin  Wall,  the  U.S.   delivered  over  $62  billion  in
          weapons--almost half of total  worldwide exports. ("Arms Trade  News,"
          7/95)
WHEREAS   the  last three times the U.S.  sent troops into combat in significant
          numbers, in  Panama, Iraq  and Somalia,  they faced  adversaries  that
          received  U.S. weapons or military technology in the period leading to
          the conflict. U.S. weapons supplied to anti-Communist rebels in Angola
          and  Afghanistan  under  the  Reagan  Doctrine  have  been  used   for
          devastating  civil  wars; in  the  Afghan case,  U.S.-supplied Stinger
          missiles turned up on the  International black market as prized  items
          sought  by  all manner  of rebel  groups and  terrorist organizations.
          ("Sale of the Century," COMMONWEAL, William D. Hartung, 6/20/94)
          "U.S. Weapons  at War:  United States  Arms Deliveries  to Regions  of
          Conflict,  (World Policy Institute,  1995) shows the  U.S. was a major
          arms supplier in one-third of the 50 ethnic and territorial  conflicts
          currently  raging.  The study  says some  45  parties involved  in the
          conflicts purchased over  $42 billion  in U.S.  arms in  the last  ten
          years.
WHEREAS   our   company  ranked  3  among  Department  of  Defense  leading  100
          corporations and has  been a leading  contractor for foreign  military
          sales.
RESOLVED  the   shareholders  request  the  Board  of  Directors  to  provide  a
          comprehensive report on Northrop Grumman's foreign military sales. The
          report, prepared  at  reasonable  cost, should  be  available  to  all
          shareholders   by  December,   1996,  and  may   omit  classified  and
          proprietary information.
 
STOCKHOLDER SUPPORTING STATEMENT
 
    Global security is  security of people.  The cold-war notion  of using  arms
sales  to maintain balances of  power or support allies  has been discredited by
1990s experience, when alliances, governments  and boundaries in large parts  of
the world are in flux.
 
    We  are disturbed  at industry's claims  and lobbying  efforts asserting the
only way to  keep jobs is  to promote  foreign military sales.  We believe  such
statements  are  inconsistent  with  co-production  agreements  and  transfer of
technology to foreign companies. Offset  arrangements on major sales often  give
business  to  overseas suppliers.  Contracts with  foreign companies/governments
have harsh repercussions on U.S. workers during times of accelerated down-sizing
of our workforce.
 
    Therefore, it is reasonable for shareholders to ask:
 
    1.  Criteria used to promote foreign military sales.
 
    2.  Procedures used to negotiate sales directly with foreign governments  or
       through  the U.S. government. For  example, what determines which weapons
       are direct commercial arms sales and what must be negotiated through  the
       Pentagon?  What percentage is  commercial arms sales  and what is foreign
       military sales?
 
    3.  Categories of military equipment exported for the past three years, with
       as  much   statistical   information  as   permissible;   contracts   for
       servicing/maintaining  equipment; offset agreements; and licensing and/or
       co-production with foreign governments.
 
                                       24

<PAGE>
    4.  Analysis  of legislation establishing  a code for  U.S. arms  transfers,
       e.g.  no  sales to  governments that  violate human  rights of  their own
       citizens, engage in aggression against  neighbors, come to power  through
       undemocratic means or ignore international arms-control arrangements.
 
MANAGEMENT'S POSITION
 
    Northrop  Grumman sells military  equipment and services  only in compliance
with stringent United States regulations that control where products can be sold
overseas and what products may be exported. Further, a report on procedures used
to  negotiate  sales  would  be  disadvantageous  to  the  Company  through  the
revelation  of business information, the  disclosure of which may  not be in the
best interest of the Company and its shareholders. The Company believes that the
comprehensive report requested  would only  be of interest  and use  to a  small
number of shareholders.
 
 
   THE BOARD RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
 
                                 MISCELLANEOUS
 
VOTING ON OTHER MATTERS
 
    Management  is not aware of any matters  not referred to herein that will be
presented for action at the Annual Meeting. Assuming a stockholder complies with
the Bylaw  requirement  to  notify the  Company  no  later than  the  tenth  day
following  the date of mailing this Proxy Statement of the intent to present any
matter for  action  and  that the  matter  is  a proper  item  of  business  for
shareholder  action,  the matter  would  be entitled  to  be voted  upon  at the
meeting. If any  other matters properly  come before the  Annual Meeting, it  is
intended  that  the shares  represented by  proxies will  be voted  with respect
thereto in accordance with the judgment of the persons authorized to vote them.
 
PROPOSAL OF STOCKHOLDERS
 
    Copies of proposals which stockholders of the Company wish to be included in
the Company's proxy statement relating to its Annual Meeting to be held in  1997
must be received by the Company no later than December 1, 1996.
 
    Copies  of such  proposals of stockholders  should be sent  to the Corporate
Secretary, Northrop Grumman  Corporation, 1840 Century  Park East, Los  Angeles,
California 90067.
 
COST OF SOLICITING PROXIES
 
    The  cost of soliciting proxies in the accompanying form has been or will be
paid by the  Company. In addition  to solicitation by  mail, arrangements  will,
where  appropriate, be made with brokerage houses and other custodians, nominees
and fiduciaries to send  proxy materials to beneficial  owners, and the  Company
will,  upon request, reimburse  them for their reasonable  expenses in so doing.
The Company has  retained Georgeson &  Company Inc. of  New York to  aid in  the
solicitation  of  proxies  at  an  estimated  fee  of  $10,000  plus  reasonable
disbursements. Officers,  directors and  regular employees  of the  Company  may
request  the return  of proxies personally,  by means of  materials prepared for
stockholders and employee-stockholders or by telephone or telegram to the extent
deemed appropriate by the Board of Directors. No additional compensation will be
paid  to  such  individuals  for  this  activity.  The  extent  to  which   this
solicitation  will  be  necessary  will depend  upon  how  promptly  proxies are
received; therefore,  stockholders are  urged to  return their  proxies  without
delay.
 
                                          James C. Johnson
                                          CORPORATE VICE PRESIDENT AND SECRETARY
 
April 1, 1996
 
    NOTICE:  THE COMPANY  FILED AN  ANNUAL REPORT ON  FORM 10-K  ON FEBRUARY 22,
1996. SHAREHOLDERS OF RECORD ON MARCH 19, 1996, MAY OBTAIN A COPY OF THIS REPORT
WITHOUT CHARGE  BY DIRECTING  A  REQUEST TO  THE CORPORATE  SECRETARY,  NORTHROP
GRUMMAN CORPORATION, 1840 CENTURY PARK EAST, LOS ANGELES, CALIFORNIA 90067.
 
                                       25

<PAGE>
                                                                       EXHIBIT A
 
              NORTHROP GRUMMAN 1993 LONG-TERM INCENTIVE STOCK PLAN
 
1. PURPOSE
 
    The purpose of the Northrop Grumman 1993 Long-Term Incentive Stock Plan (the
"Plan") is to promote the long-term success of Northrop Grumman Corporation (the
"Company")  and  to increase  shareholder value  by  providing its  officers and
selected employees  with  incentives  to create  excellent  performance  and  to
continue  service with  the Company,  its subsidiaries  and affiliates.  Both by
encouraging such officers and employees to become owners of the common stock  of
the  Company  and  by providing  actual  ownership  through Plan  awards,  it is
intended that  Plan  participants  will  view  the  Company  from  an  ownership
perspective.  Additionally,  the  Company  believes  the  Plan  will  assist  in
attracting  and  retaining  in  its  employ  outstanding  people  of   training,
experience and ability.
 
2. TERM
 
    The Plan shall become effective upon the approval by the stockholders of the
Company.  Unless previously terminated by the  Company's Board of Directors (the
"Board"), the  Plan  shall terminate  at  the close  of  business on  the  fifth
anniversary  of such  stockholder approval.  After termination  of the  Plan, no
future awards  may  be  granted  but  previously  granted  awards  shall  remain
outstanding  in accordance  with their applicable  terms and  conditions and the
terms and conditions of the Plan.
 
3. PLAN ADMINISTRATION
 
    A Committee (the "Committee")  appointed by the  Board shall be  responsible
for  administering the Plan. The  Committee shall be comprised  of three or more
non-employee members  of  the  Board  who qualify  to  administer  the  Plan  as
contemplated  by Rule 16b-3 under  the Securities and Exchange  Act of 1934 (the
"1934 Act") or any successor rule.  The Committee shall have full and  exclusive
power  to interpret the Plan and to adopt such rules, regulations and guidelines
for carrying out the Plan as it may deem necessary or proper, all of which power
shall be executed in the best interests  of the Company and in keeping with  the
objectives  of the Plan. This  power includes, but is  not limited to, selecting
award recipients,  establishing  all award  terms  and conditions  and  adopting
modifications, amendments and procedures, including subplans and the like as may
be  necessary to  comply with provisions  of the laws  and applicable regulatory
rulings of  countries in  which the  Company  operates in  order to  assure  the
viability  of awards granted under the  Plan and to enable participants employed
in such countries  to receive advantages  and benefits under  the Plan and  such
laws and rulings. In no event, however, shall the Committee or its designee have
the  right to cancel outstanding  stock options for the  purpose of replacing or
regranting such options  with a purchase  price that is  less than the  purchase
price of the original option.
 
4. ELIGIBILITY
 
    Any  key employee of  the Company shall  be eligible to  receive one or more
awards under the Plan. "Key Employee" shall also include any former key employee
of  the  Company  eligible  to  receive  an  assumed  or  replacement  award  as
contemplated  in Sections  5 and  8, and "Company"  includes any  entity that is
directly or indirectly  controlled by  the Company or  any entity  in which  the
Company has a significant equity interest, as determined by the Committee.
 
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN AND GRANT LIMITS
 
    (a)  Subject to Section  6 of the  Plan, the aggregate  number of additional
shares of common stock of  the Company ("Common Stock")  which may be issued  or
transferred  pursuant to awards under the Plan, or reserved for such issuance or
transfer, shall not  exceed 4,100,000  shares. In  addition, (i)  any shares  of
Common  Stock  which as  of  the effective  date of  the  Plan are  reserved for
issuance under the Company's 1981 and 1987 Long-Term Incentive Plans (the "Prior
Plans") and which  are not thereafter  issued; (ii) any  shares of Common  Stock
which   are   forfeited   back  to   the   Company   under  the   Plan   or  the
 
                                      A-1

<PAGE>
Prior Plans; and (iii) any shares which have been exchanged by a participant  as
full  or partial payment to  the Company in connection  with any award under the
Plan or the Prior Plans, shall be available for issuance under the Plan.
 
    (b) In no  event, however, except  as subject to  adjustment as provided  in
Section  6  shall more  than 1,800,000  shares of  Common Stock  be cumulatively
available for issuance pursuant  to stock awards granted  under Section 8(c)  of
the Plan.
 
    (c)  In instances where a stock appreciation right ("SAR") or other award is
settled in cash or  a form other  than shares, the shares  that would have  been
issued  had there been no cash or  other settlement shall nevertheless be deemed
issued and shall no  longer be available for  issuance under the Plan.  However,
the  payment  of cash  dividends and  dividend  equivalents in  conjunction with
outstanding awards  shall  not  be  counted against  the  shares  available  for
issuance.  Any shares that  are issued by  the Company, and  any awards that are
granted by, or become obligations of, the Company, through the assumption by the
Company  or  an  affiliate  of,  or  in  substitution  for,  outstanding  awards
previously  granted by  an acquired  company shall  not, except  in the  case of
awards granted to employees who  are subject to Section 16  of the 1934 Act,  be
counted against the shares available for issuance under the Plan.
 
    (d)  Any shares  issued under the  Plan may consist  in whole or  in part of
authorized and unissued shares or of  treasury shares, and no fractional  shares
shall  be issued  under the  Plan. Cash may  be paid  in lieu  of any fractional
shares in settlements of awards under the Plan.
 
    (e) In no event shall the total number of shares of Common Stock that may be
awarded to any  eligible participant during  any three year  period pursuant  to
stock  option grants hereunder exceed  400,000 shares and in  no event shall the
total number  of Restricted  Performance  Stock Rights  ("RPSRs") which  may  be
granted  to any eligible  participant during any  three consecutive years exceed
133,000 (maximum  199,500 shares  of common  stock) plus  the number  of  shares
distributable as dividend equivalents on earned RPSRs for the period of time the
RPSRs were outstanding.
 
6. ADJUSTMENTS AND REORGANIZATIONS
 
    Other than in a change of control, in the event of any stock dividend, stock
split,  combination  or  exchange of  shares,  merger,  consolidation, spin-off,
recapitalization or other  distribution (other  than normal  cash dividends)  of
Company  assets to stockholders,  or any other change  affecting shares or share
price,  such  proportionate  adjustments,  if  any,  as  the  Committee  in  its
discretion  may  deem appropriate  to  reflect such  change  shall be  made with
respect to (a) the aggregate number of shares that may be issued under the Plan;
(b) the Grant Limits established under the Plan; (c) each outstanding award made
under the Plan; and (d) the exercise  price per share for any outstanding  stock
options, SARs or similar awards under the Plan.
 
    If  the Company undergoes  a Change in  Control, as defined  herein, (i) all
outstanding grants and  awards under the  Stock Option provisions  of this  Plan
shall  vest fully and completely, any  and all restrictions on exercisability or
otherwise shall lapse,  and such options  shall be fully  exercisable upon  such
Change  in Control; (ii)  all outstanding grants  and awards of  SARs under this
Plan shall vest  fully and  completely, any and  all restrictions  on such  SARs
shall  lapse, and such SARs  shall be converted completely  into cash at a price
per share-unit equal to the higher of (x) the highest price paid for a share  of
the Company's common stock, as reported in the New York Stock Exchange Composite
Transactions,  during the 120 days prior to and including the date of the Change
in Control, and (y) the highest price  paid (on a national stock exchange or  as
quoted  in  the NASDAQ  National  Market Issues)  for a  share  of stock  of the
corporation or other entity with which or  into which the Company is merged,  or
if  such corporation or  other entity is  not publicly traded,  then the highest
price paid on an exchange or as quoted in the NASDAQ National Market Issues  for
a  share of stock of a publicly traded corporation or other entity that owns 50%
or more (directly or indirectly) of such corporation or other entity on the date
of the Change in Control; and (iii) all outstanding grants and awards under  the
Stock  Awards provision of  this Plan, other than  RPSRs, shall immediately vest
fully and completely, and all restrictions shall lapse and (iv) with respect  to
RPSRs,  all outstanding awards shall vest and the number of shares to be issued,
 
                                      A-2

<PAGE>
as of  the date  of  the Change  in  Control, to  each  holder of  a  restricted
performance stock right shall be computed by multiplying (x) the number of RPSRs
received  by  that  individual  by  (y)  the  actual  percentage  of performance
conditions established for  such grant or  award that has  been achieved to  the
date of the Change in Control.
 
    For  purposes of this Section 6, "Change in Control" of the Company shall be
deemed to  have occurred  as  of the  first day  that  any one  or more  of  the
following conditions shall have been satisified:
 
         (i)  Any Person (other than those Persons  in control of the Company as
    of November  15,  1995,  or  other  than  a  trustee  or  fiduciary  holding
    securities  under  an employee  benefit plan  of  the Company),  becomes the
    Beneficial Owner,  directly  or indirectly,  of  securities of  the  Company
    representing  fifteen percent (15%) or more  of the combined voting power of
    the Company's then outstanding securities and for purposes of this  section,
    "Person"  shall have the meaning ascribed to such term in Section 3(a)(9) of
    the Securities Exchange  Act of  1934, as amended,  and as  used in  Section
    13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) and
    for  purposes of this  subsection (i) "person" or  "group" shall not include
    underwriters acquiring newly-issued voting shares (or securities convertible
    into voting shares) directly from the  Company with a view to  distribution;
    or
 
        (ii)  During any period of two  (2) consecutive years (not including any
    period prior to November 15, 1995), individuals who at the beginning of such
    period constitute the  Board (and any  new Director, whose  election by  the
    Company's  stockholders was approved by a  vote of at least two-thirds (2/3)
    of the  Directors then  still in  office who  either were  Directors at  the
    beginning  of the period or whose election or nomination for election was so
    approved), cease for any reason to constitute a majority thereof; or
 
        (iii) The stockholders of  the Company approve: (a)  a plan of  complete
    liquidation  of the Company; or (b) an agreement for the sale or disposition
    of all or substantially all  of the Company's assets in  one or a series  of
    related  transactions; or (c) a  merger, consolidation, or reorganization of
    the Company with or  involving any other corporation,  other than a  merger,
    consolidation,  or reorganization that would result in the voting securities
    of the Company outstanding immediately prior thereto continuing to represent
    (either  by  remaining  outstanding  or  by  being  converted  into   voting
    securities  of the surviving entity) more than seventy-five percent (75%) of
    the combined voting power of the  voting securities of the Company (or  such
    surviving  entity) outstanding immediately after such merger, consolidation,
    or reorganization.
 
7. FAIR MARKET VALUE
 
    Fair Market Value  for all purposes  under the Plan  shall mean the  closing
price  of  a  share  of Common  Stock  as  reported on  the  composite  tape for
securities listed on the New York  Stock Exchange (the "Exchange") for the  date
in question. If no sales of Common Stock were made on the Exchange on that date,
the  closing price of a share of Common Stock as reported on said composite tape
for the preceding day on which sales  of Common Stock were made on the  Exchange
shall be substituted.
 
8. AWARDS
 
    The  Committee shall determine the  type or types of  award(s) to be made to
each participant. Awards  may be granted  singly, in combination  or in  tandem.
Awards  also may be made in combination or in tandem with, in replacement of, as
alternatives to, or as  the payment form  for grants or  rights under any  other
employee or compensation plan of the Company, including the plan of any acquired
entity. The types of awards that may be granted under the Plan are:
 
        (a)  Stock Options -- A grant of  a right to purchase a specified number
    of shares of  Common Stock during  a specified period  as determined by  the
    Committee.  The purchase price per  share for each option  shall be not less
    than 100% of Fair  Market Value on  the date of grant,  except that, in  the
    case  of  a  stock option  granted  retroactively  in tandem  with  or  as a
    substitution for another award, the exercise  or designated price may be  no
    lower than the Fair Market Value of a share on the date such other award was
    granted.  A stock  option may be  in the  form of an  incentive stock option
 
                                      A-3

<PAGE>
    ("ISO") which, in addition to being subject to applicable terms,  conditions
    and  limitations established by the Committee,  complies with Section 422 of
    the Internal Revenue Code  of 1986, as  amended (the "Code").  If an ISO  is
    granted,  the aggregate Fair Market Value (determined on the date the option
    is granted) of Common Stock  subject to an ISO  granted to a participant  by
    the Committee which first becomes exercisable in any calendar year shall not
    exceed  $100,000.00.  The  price at  which  shares  of Common  Stock  may be
    purchased under a  stock option shall  be paid in  full at the  time of  the
    exercise  in cash or such other method permitted by the Committee, including
    (i) tendering  (either  actually  or  by  attestation)  Common  Stock;  (ii)
    surrendering  a  stock award  valued at  Fair  Market Value  on the  date of
    surrender; (iii)  authorizing  a  third  party to  sell  the  shares  (or  a
    sufficient  portion thereof)  acquired upon exercise  of a  stock option and
    assigning the delivery  to the Company  of a sufficient  amount of the  sale
    proceeds  to pay for all the shares  acquired through such exercise; or (iv)
    any combination of  the above. The  Committee may grant  stock options  that
    provide  for the award of a new option when the exercise price has been paid
    for by tendering  shares of  Common Stock to  the Company.  This new  option
    grant  would cover  the number of  shares tendered with  the option purchase
    price set  at the  then current  Fair Market  Value and  would never  extend
    beyond the remaining term of the originally exercised option.
 
        (b)  SARs -- A right to receive  a payment, in cash and/or Common Stock,
    equal to the excess of the Fair Market Value of a specified number of shares
    of Common Stock on the date the SAR is exercised over the Fair Market  Value
    on  the  date the  SAR  was granted  as set  forth  in the  applicable award
    agreement, except that, in the case of a SAR granted retroactively in tandem
    with or as  a substitution  for another  award, the  exercise or  designated
    price may be no lower than the Fair Market Value of a share on the date such
    other award was granted.
 
        (c)  Stock Awards -- An  award made or denominated  in stock or units of
    stock. All or  part of  any stock  award may  be subject  to conditions  and
    restrictions  established  by  the Committee,  and  set forth  in  the award
    agreement, which may  include, but  are not limited  to, continuous  service
    with  the Company,  achievement of  specific business  objectives, and other
    measurements of  individual, business  unit  or Company  performance.  Stock
    Awards  may include RPSRs. An RPSR is a  right to receive a share of Company
    stock on a specified future  date conditioned upon continued employment  and
    the  change in  the Company's Total  Shareholder Return  ("TSR") compared to
    that of Peer Companies as  a group. RPSRs can  be earned over the  five-year
    Performance  Period. The  number earned  versus the  number granted  will be
    determined by measurement at the end of the Performance Period of changes in
    Northrop Grumman TSR  compared to that  of Peer Companies  as a group.  This
    will  occur by taking the value of a theoretical $100 investment in Northrop
    Grumman and a  $100 investment  in Peer Companies  (as a  portfolio) at  the
    start of the Performance Period at the Base Period Price and comparing it to
    the  value of those  investments at the  end of the  Performance Period. TSR
    equals the value at the end of the Performance Period of $100 invested in  a
    company's  stock at the  company Base Period  Price at the  beginning of the
    Performance Period, with dividends reinvested and converted into  additional
    shares  of stock. The Performance Period for  earning RPSRs is the five full
    calendar years following the initial Date  of Grant. The Base Period is  the
    immediate  three  calendar years  preceding a  Performance Period.  The Base
    Period Price for the  Company and each  Peer Company is  the average of  the
    year-end  closing  stock  prices  for the  three-year  period  preceding the
    Performance Period. Peer Companies  are those that  comprise the Standard  &
    Poor's (S&P) Aerospace/Defense Group.
 
9. DIVIDENDS AND DIVIDEND EQUIVALENTS
 
    The  Committee may provide that any awards  under the Plan earn dividends or
dividend equivalents.  Such  dividends  or  dividend  equivalents  may  be  paid
currently  or  may be  credited  to a  participant's  account. Any  crediting of
dividends or  dividend  equivalents may  be  subject to  such  restrictions  and
conditions  as the Committee may establish, including reinvestment in additional
shares or share equivalents.
 
                                      A-4

<PAGE>
10. DEFERRALS AND SETTLEMENTS
 
    Payment of  awards may  be  in the  form of  cash,  stock, other  awards  or
combinations   thereof  as  the   Committee  shall  determine,   and  with  such
restrictions as  it  may  impose.  The Committee  may  also  require  or  permit
participants  to elect  to defer  the issuance  of shares  or the  settlement of
awards in cash under  such rules and  procedures as it  may establish under  the
Plan.  It  may also  provide that  deferred settlements  include the  payment or
crediting of interest on  the deferral amounts, or  the payment or crediting  of
dividend equivalents where the deferral amounts are denominated in shares.
 
11. TRANSFERABILITY AND EXERCISABILITY
 
    All  awards  under  the  Plan  shall be  nontransferable  and  shall  not be
assignable, alienable,  saleable or  otherwise transferable  by the  participant
other  than  by will  or the  laws of  descent and  distribution, pursuant  to a
qualified domestic relations order (as defined by the Code) or unless  otherwise
determined by the Committee. However, in the event that a participant terminates
employment   with  the  Company  to  assume  a  position  with  a  governmental,
charitable, educational  or similar  non-profit institution,  the Committee  may
subsequently  authorize a  third party, including  but not limited  to a "blind"
trust, to act on  behalf of and  for the benefit  of the respective  participant
regarding  any outstanding  awards held  by the  participant subsequent  to such
termination of employment. If so permitted  by the Committee, a participant  may
designate  a  beneficiary  or  beneficiaries  to  exercise  the  rights  of  the
participant and receive any distributions under  the Plan upon the death of  the
participant.
 
12. AWARD AGREEMENTS
 
    Awards  under the Plan shall  be evidenced by agreements  that set forth the
terms, conditions and limitations for each  award which may include the term  of
an  award (except that in no event shall the  term of any ISO exceed a period of
ten years from the date  of its grant), the  provisions applicable in the  event
the   participant's  employment  terminates,  and  the  Company's  authority  to
unilaterally or bilaterally amend, modify, suspend, cancel or rescind any award;
provided, however, that such authority shall not extend to the reduction of  the
exercise  price of a previously granted option,  except as provided in Section 6
hereof. The Committee need not require  the execution of any such agreement,  in
which  case  acceptance  of  the  award  by  the  respective  participant  shall
constitute agreement to the terms of the award.
 
13. PLAN AMENDMENT
 
    The plan may only  be amended by  a disinterested majority  of the Board  of
Directors  as it deems necessary or appropriate to better achieve the purpose of
the Plan, except that no  such amendment shall be  made without the approval  of
the  Company's stockholders which would increase  the number of shares available
for issuance in accordance with Sections 5 and 6 of the Plan or otherwise  cause
the  Plan not to comply  with Rule 16b-3, or any  successor rule, under the 1934
Act.
 
14. TAX WITHHOLDING
 
    The Company shall have the right to  deduct from any settlement of an  award
made  under the Plan, including the delivery  or vesting of shares, a sufficient
amount to cover withholding of any Federal, state or local taxes required by law
or to take such other action as may be necessary to satisfy any such withholding
obligations. The Committee may permit shares to be used to satisfy required  tax
withholding  and such shares shall be valued at  the Fair Market Value as of the
settlement date of the applicable award.
 
15. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS
 
    Unless otherwise specifically  determined by the  Committee, settlements  of
awards  received by participants under the Plan shall  not be deemed a part of a
participant's  regular,  recurring  compensation  for  purposes  of  calculating
payments  or  benefits  from  any Company  benefit  plan,  severance  program or
severance pay  law  of  any  country.  Further,  the  Company  may  adopt  other
compensation  programs,  plans  or  arrangements  as  it  deems  appropriate  or
necessary.
 
                                      A-5

<PAGE>
16. UNFUNDED PLAN
 
    Unless otherwise determined by the Committee, the Plan shall be unfunded and
shall not create  (or be  construed to  create) a trust  or a  separate fund  or
funds.  The  Plan shall  not establish  any  fiduciary relationship  between the
Company and any participant or other person. To the extent any person holds  any
rights  by  virtue  of a  grant  awarded  under the  Plan,  such  rights (unless
otherwise determined by the Committee) shall be no greater than the rights of an
unsecured general creditor of the Company.
 
17. FUTURE RIGHTS
 
    No person shall have any  claim or rights to be  granted an award under  the
Plan,  and no participant shall have any rights under the Plan to be retained in
the employ of the Company.
 
18. GOVERNING LAW
 
    The validity, construction and effect of  the Plan and any actions taken  or
relating  to the  Plan shall be  determined in  accordance with the  laws of the
State of California and applicable Federal law.
 
19. SUCCESSORS AND ASSIGNS
 
    The Plan shall be  binding on all successors  and assigns of a  participant,
including,  without limitation, the estate of such participant and the executor,
administrator or  trustee  of  such  estate,  or  any  receiver  or  trustee  in
bankruptcy or representative of the participant's creditors.
 
20. RIGHTS AS A SHAREHOLDER
 
    Except  as otherwise  provided in the  award agreement,  a participant shall
have no rights as a shareholder until he or she becomes the holder of record  of
shares of Common Stock.
 
                                      A-6

<PAGE>
       [Graphic of map displaying directions to Annual Meeting location]
 

<TABLE>
<S>                                       <C>
Traveling WEST on the Santa Monica        Traveling EAST on the Santa Monica
Fwy. (10): Exit at Bundy Dr. South.       Fwy. (10): exit at Centinela. Turn
Take Bundy South to Ocean Park Blvd.      right onto Pico Blvd. Continue to 28th
Turn right on Ocean Park and continue     Street. Turn left onto 28th Street.
to 28th Street. Turn left on 28th.
</TABLE>


<PAGE>

PROXY                                                           NORTHROP GRUMMAN

                   ANNUAL MEETING OF STOCKHOLDERS MAY 15, 1996

                    PROXY SOLICITED BY THE BOARD OF DIRECTORS

     The undersigned hereby appoints R. R. Molleur and J. C. Johnson, and each
of them, proxies of the undersigned, with full power of substitution in each of
them, to vote all shares of Common Stock of Northrop Grumman Corporation which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders to
be held at the Museum of Flying, 2772 Donald Douglas Loop North, Santa Monica,
California, on May 15, 1996 at 10:00 A.M., and at any adjournments thereof, with
all the powers the undersigned would possess if personally present and voting,
as specified below, and in their discretion on any other matters that may
properly come before the Meeting.

Election of Directors: Nominees P. Frost, J. Robson, J. Slaughter.

     PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY, EVEN IF YOU
PLAN TO ATTEND THE MEETING.


                 (Continued and to be Signed on the other side)


- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE

<PAGE>

                                                               /x/  PLEASE MARK
                                                                    YOUR CHOICES
                                                                    LIKE THIS

        THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED,
              THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 AND AGAINST 

              PROPOSAL 4.


         THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.


Proposal 1 - Election of Class II directors to hold office  for three years and
             until their respective successors  are elected and qualified.

              FOR   / /     WITHHELD   / /

             WITHHELD for the following nominee(s) only, write name(s) below:
             ________________________________________________________________

P
roposal 2 - Proposal to amend the 1993 Long Term Incentive Stock Plan.

             FOR   / /       AGAINST  / /        ABSTAIN   / /

Proposal 3 - Ratification of the appointment of Deloitte & Touche LLP as the
             Company's independent auditors.

             FOR   / /       AGAINST  / /        ABSTAIN   / /

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4.

P
roposal 4 - Stockholder Stock regarding foreign military sales.

             FOR   / /       AGAINST  / /        ABSTAIN   / /


Signature(s)                                                Date
            -------------------------------------------          ---------------

Note: Please sign as name appears herein. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE
- --------------------------------------------------------------------------------

PROXY                                                           NORTHROP GRUMMAN
- --------------------------------------------------------------------------------
                   ANNUAL MEETING OF STOCKHOLDERS MAY 15, 1996
- --------------------------------------------------------------------------------
Just a reminder, the annual meeting will be held:

    DATE:      May 15, 1996
    TIME:      10:00 A.M.
    LOCATION:  Museum of Flying
               2772 Donald Douglas Loop North
               Santa Monica, California

PLEASE RETURN YOUR PROXY PROMPTLY.


<PAGE>

                                NORTHROP GRUMMAN

                   ANNUAL MEETING OF STOCKHOLDERS MAY 15, 1996

               CONFIDENTIAL INSTRUCTIONS TO BANKERS TRUST COMPANY,
           TRUSTEE FOR THE NORTHROP GRUMMAN SAVINGS AND INVESTMENT PLAN

     Receipt of proxy material for the above Meeting is acknowledged. I instruct
you to vote (in person or by proxy) all shares of Common Stock of Northrop
Grumman Corporation held by you for my account under the Plan at the Annual
Meeting of Stockholders of Northrop Grumman Corporation to be held May 15, 1996
at 10:00 A.M., and at all adjournments thereof, on the following matters as
indicated on the reverse side and in your discretion on any other matters that
may come before the Meeting. If this card is signed and returned, but no choice
is specified, I instruct you to vote this proxy in accordance with the Board of
Directors' recommendations, "FOR all Nominees" in Proposal 1, "FOR" Proposals 2
and 3 and "AGAINST" Proposal 4.

Election of Directors: Nominees P. Frost, J. Robson, J. Slaughter.



                 (Continued and to be Signed on the other side)



- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE

<PAGE>

                                                               /x/  PLEASE MARK
                                                                    YOUR CHOICES
                                                                    LIKE THIS

        THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED,
              THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 AND AGAINST 

              PROPOSAL 4.


         THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.


Proposal 1 - Election of Class II directors to hold office for three years and 
             until their respective successors are elected and qualified.

             FOR  / /       WITHHELD  / /

             WITHHELD for the following nominee(s) only, write name(s) below:
             ________________________________________________________________

P
roposal 2 - Proposal to amend the 1993 Long Term Incentive Stock Plan.

             FOR  / /       AGAINST  / /        ABSTAIN  / /

Proposal 3 - Ratification of the appointment of Deloitte & Touche LLP as the
             Company's independent auditors.

             FOR  / /       AGAINST  / /        ABSTAIN  / /

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4.

P
roposal 4 - Stockholder proposal regarding foreign military sales.

             FOR  / /       AGAINST  / /        ABSTAIN  / /


Signature(s)                                                Date
            --------------------------------------------         ---------------

Note: Please sign as name appears herein. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
INSTRUCTION CARD                                                NORTHROP GRUMMAN
- --------------------------------------------------------------------------------

Dear Fellow Employee:

     Just a reminder, your vote and your investment in Northrop Grumman is very
important. Please complete and return your Confidential Instruction Card to the
Trustee for tabulation as soon as possible.

                                        Kent Kresa
                                        Chairman, President and
                                        Chief Executive Officer


PLEASE RETURN YOUR PROXY PROMPTLY.

<PAGE>

                                NORTHROP GRUMMAN

                   ANNUAL MEETING OF STOCKHOLDERS MAY 15, 1996

               CONFIDENTIAL INSTRUCTIONS TO BANKERS TRUST COMPANY,
       TRUSTEE FOR THE VOUGHT AIRCRAFT SALARIED SAVINGS AND INVESTMENT PLAN

     Receipt of proxy material for the above Meeting is acknowledged. I instruct
you to vote (in person or by proxy) all shares of Common Stock of Northrop
Grumman Corporation held by you for my account under the Plan at the Annual
Meeting of Stockholders of Northrop Grumman Corporation to be held May 15, 1996
at 10:00 A.M., and at all adjournments thereof, on the following matters as
indicated on the reverse side and in your discretion on any other matters that
may come before the Meeting. If this card is signed and returned, but no choice
is specified, I instruct you to vote this proxy in accordance with the Board of
Directors' recommendations, "FOR all Nominees" in Proposal 1, "FOR" Proposals 2
and 3 and "AGAINST" Proposal 4.

Election of Directors: Nominees P. Frost, J. Robson, J. Slaughter.



                 (Continued and to be Signed on the other side)



- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE

<PAGE>

                                                               /x/  PLEASE MARK
                                                                    YOUR CHOICES
                                                                    LIKE THIS

       THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED,
       THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 AND AGAINST PROPOSAL 4.


       THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.


Proposal 1 - Election of Class II directors to hold office for three years and 
             until their respective successors are elected and qualified.

             FOR  / /       AGAINST  / /

             WITHHELD for the following nominee(s) only, write name(s) below:
             ________________________________________________________________


Proposal 2 - Proposal to amend the 1993 Long Term Incentive Stock Plan.

             FOR  / /       AGAINST  / /        ABSTAIN  / /

Proposal 3 - Ratification of the appointment of Deloitte & Touche LLP as the
             Company's independent auditors.

             FOR  / /       AGAINST  / /        ABSTAIN  / /

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4.

P
roposal 4 - Stockholder proposal regarding foreign military sales.

             FOR  / /       AGAINST  / /        ABSTAIN  / /


Signature(s)                                                Date
            --------------------------------------------         ---------------

Note: Please sign as name appears herein. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
INSTRUCTION CARD                                                NORTHROP GRUMMAN
- --------------------------------------------------------------------------------

Dear Fellow Employee:

     Just a reminder, your vote and your investment in Northrop Grumman is very
important. Please complete and return your Confidential Instruction Card to the
Trustee for tabulation as soon as possible.

                                        Kent Kresa
                                        Chairman, President and
                                        Chief Executive Officer


PLEASE RETURN YOUR PROXY PROMPTLY.