================================================================================
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TRW INC.
(Name of Registrant as Specified in Its Charter)
NORTHROP GRUMMAN CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: Common
Stock, par value $0.625 per share ("Common Shares") and Serial
Preference Stock II ("Preference Stock II"), no par value per share. The
Preference Stock II is divided into two series: Cumulative Serial
Preference Stock II, $4.40 Convertible Series 1, no par value per share
("Series 1 Shares") and Cumulative Serial Preference Stock II, $4.50
Convertible Series 3, no par value per share ("Series 3 Shares").
(2) Aggregate number of securities to which transaction applies: 126,286,307
Common Shares and 90,926 shares of Preference Stock II, comprised of
31,710 Series 1 Shares and 59,216 Series 3 Shares.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: $47.00 in market value of Northrop
Grumman Corporation common stock per Common Share (based on the formula
described below); $413.60 in market value of Northrop Grumman common
stock per Series 1 Share (based on the formula described below); and
$350.06 in market value of Northrop Grumman common stock per Series 3
Share (based on the formula described below).
(4) Proposed maximum aggregate value of transaction: $6,487,486,707.68.
(5) Total fee paid: $1,297,497.34.
-----------------
Pursuant to, and as provided by, Rule 0-11(c), the aggregate filing fee of
$1,297,497.34 is based upon 1/50th of 1% of the transaction value, based on
the proposed exchange of (i) each Common Share for a number of shares of
Northrop Grumman Corporation common stock with a market value of $47.00 per
Common Share based on the average of the closing sale prices for a share of
Northrop Grumman common stock on the New York Stock Exchange as reported in the
Wall Street Journal over the five consecutive trading days ending immediately
prior to the second trading day prior to the expiration of Northrop Grumman's
Offer to Exchange dated March 4, 2002, but in no event will the number of
shares of Common Stock exchanged for each Common Share be greater than 0.4563
($47.00/$103.00) or less than 0.4159 ($47.00/$113.00) (such number, the
"Exchange Ratio"); (ii) each Series 1 Shares for a number of shares of Northrop
Grumman Common Stock equal to the Exchange Ratio multiplied by the
then-effective conversion rate for the Series 1 Shares; and (iii) each Series 3
Share for a number of shares of Northrop Grumman Common Stock equal to the
Exchange Ratio multiplied by the then-effective conversion rate for the Series
3 Shares. As of March 13, 2001, TRW reported that the conversion rate for the
Series 1 Shares was 8.8 Common Shares per Series 1 Share and the conversion
rate for the Series 3 Shares was 7.448 Common Shares per Series 3 Share.
[X] 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: $1,297,497.34.
(2) Form, Schedule or Registration Statement No.: Tender Offer Statement on
Schedule TO ($700,648.56 paid with filing) and Registration Statement on
Form S-4 ($596,848.78 paid with filing).
(3) Filing Party: Northrop Grumman Corporation
(4) Date Filed: March 4, 2002
================================================================================
PRELIMINARY COPY
PROXY STATEMENT
OF
NORTHROP GRUMMAN CORPORATION
FOR THE
SPECIAL MEETING OF SHAREHOLDERS
OF
TRW INC.
To Be Held On April , 2002
CONTROL SHARE ACQUISITION
This Proxy Statement and the accompanying BLUE proxy card are being
furnished by Northrop Grumman Corporation in connection with the Special
Meeting of Shareholders of TRW Inc., an Ohio corporation ("TRW"), to be held on
April , 2002, and at any adjournments or postponements thereof (the
"Special Meeting"). The record date for the Special Meeting is , 2002
(the "Record Date").
Northrop Grumman is soliciting proxies to permit, in accordance with the
Ohio Revised Code, the acquisition of TRW common stock (the "Common Shares")
and Serial Preference Stock II of TRW pursuant to Northrop Grumman's Offer to
Exchange dated March 4, 2002, a copy of which is attached as Annex A to this
Proxy Statement. As used herein, the term "Offer to Exchange" includes the
Offer to Exchange and the related Letters of Transmittal, as the same may be
amended from time to time.
On the terms and subject to the conditions specified in the Offer to
Exchange, Northrop Grumman is offering to exchange:
. each outstanding Common Share for a number of shares of Northrop Grumman
common stock, par value $1.00 per share, equal to $47.00 divided by the
average of the closing sale prices for a share of Northrop Grumman Common
Stock on the New York Stock Exchange over the five consecutive trading
days ending immediately prior to the second trading day prior to the
expiration of the Offer to Exchange, as reported in the Wall Street
Journal; provided, however, that in no event will the number of shares of
Northrop Grumman common stock exchanged for each Common Share be greater
than 0.4563 ($47.00/$103.00) or less than 0.4159 ($47.00/$113.00) (such
number, the "Exchange Ratio");
. each outstanding share of Serial Preference II Stock, $4.40 Convertible
Series 1 (the "Series 1 Shares") for a number of shares of Northrop
Grumman common stock equal to the Exchange Ratio multiplied by the
then-effective common stock conversion rate for the Series 1 Shares; and
. each outstanding share of Serial Preference II Preferred Stock, $4.50
Convertible Series 3 (the "Series 3 Shares") for a number of shares of
Northrop Grumman common stock equal to the Exchange Ratio multiplied by
the then-effective common stock conversion rate for the Series 3 Shares.
As of March 13, 2001, TRW reported that the conversion rate for the Series 1
Shares was 8.8 Common Shares for each Series 1 Share and the conversion rate
for the Series 3 Shares was 7.448 Common Shares for each Series 3 Share.
The date of this Proxy Statement is , 2002. This Proxy Statement and
the accompanying BLUE form of proxy are first being sent or given to TRW
shareholders on or about , 2002.
As more fully described below in the section entitled "Ohio Control Share
Acquisition Law," TRW shareholder authorization must be obtained before
Northrop Grumman may acquire TRW shares that would entitle it directly or
indirectly to control 20% or more of the voting power of TRW in the election of
its directors.
Accordingly, TRW shareholders who want the opportunity to exchange their TRW
shares for the consideration specified in Northrop Grumman's Offer to Exchange
should vote to authorize the acquisition of TRW shares by Northrop Grumman
pursuant to the Offer to Exchange by signing, dating and promptly mailing the
enclosed BLUE proxy with a vote FOR the authorization for the acquisition of
TRW shares pursuant to the Offer to Exchange.
Tendering TRW shares for exchange pursuant to the Offer to Exchange does NOT
constitute a vote to authorize the acquisition of TRW shares pursuant to the
Offer to Exchange. To vote FOR such authorization, TRW shareholders must vote
by dating, signing and returning the enclosed BLUE proxy card or by voting in
person at the Special Meeting.
Any TRW shareholder who has questions about voting TRW shares, the terms and
conditions of the Offer to Exchange or the proposal to authorize the
acquisition of TRW shares pursuant to the Offer to Exchange, should call D.F.
King & Co., Inc., the Information Agent for the Offer to Exchange, toll free at
(800) 755-7250 or collect at (212) 269-5550.
VOTING AT THE SPECIAL MEETING
At the Special Meeting, TRW shareholders will be asked to approve a
resolution of TRW shareholders authorizing the acquisition of TRW shares
pursuant to the Offer to Exchange. If sufficient proxies are not received to
authorize the acquisition of TRW shares pursuant to the Offer to Exchange,
Northrop Grumman may seek to adjourn the Special Meeting to allow additional
time to solicit votes.
Authorization for the acquisition of TRW shares pursuant to the Offer to
Exchange requires:
. the affirmative vote of the holders of a majority of the voting power in
the election of TRW directors at the Special Meeting in person or by
proxy; and
. the affirmative vote of the holders of a majority of the portion of the
voting power represented at the Special Meeting in person or by proxy,
excluding any shares which are "interested shares," as defined below in
the section entitled "Ohio Control Share Acquisition Law."
A quorum will be deemed present at the Special Meeting if at least a
majority of the voting power in the election of TRW directors is represented at
the Special Meeting in person or by proxy.
Based on TRW's Quarterly Report on Form 10-Q for the quarter ended September
30, 2001, as of November 2, 2001 there were 126,286,307 TRW Common Shares
issued and outstanding. Based on TRW's Definitive Proxy Statement for its 2001
Annual Meeting of Shareholders, as of February 9, 2001 there were 31,710 TRW
Series 1 Shares and 59,216 TRW Series 3 Shares issued and outstanding. Each
Common Share, Series 1 Share and Series 3 Share entitles the holder thereof to
one vote per share on the proposal to authorize the acquisition of TRW shares
pursuant to the Offer to Exchange (provided that, as described herein,
"interested shares" may be excluded for certain purposes).
A vote to authorize the acquisition of TRW shares pursuant to the Offer to
Exchange will not obligate a TRW shareholder to tender TRW shares pursuant to
the Offer to Exchange. However, authorization for the acquisition of TRW shares
pursuant to the Offer to Exchange will afford TRW shareholders the opportunity
to decide for themselves whether to exchange their TRW shares pursuant to the
Offer to Exchange. Each shareholder of record on the Record Date will be
entitled to vote at the Special Meeting, even if such shareholder has tendered
its TRW shares pursuant to the Offer to Exchange or sold its TRW shares after
the Record Date.
2
Whether or not a TRW shareholder plans to attend the Special Meeting,
Northrop Grumman urges all TRW shareholders to vote FOR authorization of the
acquisition of TRW shares pursuant to the Offer to Exchange by so indicating on
the accompanying BLUE proxy card and immediately mailing it in the enclosed
postage paid envelope. Each TRW shareholder may revoke its proxy at any time
before it is voted at the Special Meeting by delivering a written notice of
revocation or a later dated proxy for the Special Meeting to TRW Inc., 1900
Richmond Road, Cleveland, Ohio 44124. Although a revocation will be effective
if delivered only to TRW, please also send a copy of any such notice of
revocation or later dated proxy to Northrop Grumman Corporation, c/o D.F. King
& Co., Inc., Wall Street Station - P.O. Box 411, New York, New York 10269-0069.
Proxies for the Special Meeting may also be revoked by voting in person at
the Special Meeting, although attendance at the Special Meeting will not in and
of itself revoke a proxy. Unless revoked in the manner set forth above, BLUE
proxies received by Northrop Grumman in the accompanying form will be voted at
the Special Meeting only in accordance with the written instructions of the
beneficial owner of the underlying shares. In the absence of written
instructions, BLUE proxies in the form accompanying this Proxy Statement will
be voted FOR the authorization for the acquisition of TRW shares pursuant to
the Offer to Exchange and FOR adjournment of the Special Meeting (should
Northrop Grumman deem it desirable to provide additional time to solicit
additional votes).
Any abstention from voting on a proxy which has not been revoked will count
as a vote withheld (and thus will have the same practical effect as a "no"
vote), but will be included in computing the number of TRW shares present for
purposes of determining whether a quorum is present at the Special Meeting. If
a broker indicates on a proxy which has not been revoked that it does not have
discretionary authority to vote the shares subject to the proxy (a so-called
"broker non-vote"), the TRW shares represented by that proxy will also be
considered present for purposes of determining the presence of a quorum at the
Special Meeting but will not entitled to vote with respect to the applicable
proposal. Therefore, a broker non-vote will also have the same practical effect
as a "no" vote on such proposal.
THE OFFER TO EXCHANGE
On March 4, 2002, Northrop Grumman commenced the Offer to Exchange. The
Offer to Exchange is subject to certain terms and conditions described in the
Offer to Exchange, a copy of which is attached as Annex A and is incorporated
herein by this reference. The purpose of the Offer to Exchange is to acquire
control of, and the entire equity interest in, TRW. Following the completion of
the Offer to Exchange and subject to compliance with applicable law, Northrop
Grumman intends to seek to merge TRW with either Northrop Grumman or a
wholly-owned subsidiary of Northrop Grumman, based on the same exchange ratio
used, and subject to the terms and conditions described, in the Offer to
Exchange. Following any such merger, Northrop Grumman expects to promptly
dispose of TRW's automotive business either by selling that business to a third
party or parties or by spinning it off to Northrop Grumman's stockholders
(including the former TRW shareholders), or a combination thereof.
Over the past twelve months, TRW Common Shares have traded as low as $28.01
per Common Share. Based on the respective prices of TRW and Northrop Grumman
stock on February 21, 2001 (the date Northrop Grumman proposed a business
combination of TRW and Northrop Grumman), the value of the consideration
offered in the Offer to Exchange represents an 18% premium over the closing
price per Common Share on February 21, 2001, a 22% premium over the average
trading price of the TRW Common Shares for the 12 months preceding February 21,
2001 and a 4% premium over the highest closing price of the TRW Common Shares
for the 12 months preceding February 21, 2001.
A Registration Statement on Form S-4 (which includes the Offer to Exchange)
and a Tender Offer Statement on Schedule TO relating to the Offer to Exchange
were filed by Northrop Grumman with the Securities and Exchange Commission (the
"Commission") on March 4, 2002. Those documents and any
3
amendments thereto may be obtained from the Commission, upon payment of the
Commission's customary charges, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Such materials
also are available for inspection and copying at the principal office of the
Commission at the address set forth immediately above, and at the Commission's
regional offices at 233 Broadway, New York, New York 10279 and 175 W. Jackson
Boulevard, Suite 900, Chicago, Illinois 60604. This information also is
available on the Commission's website at http://www.sec.gov.
If the acquisition of TRW shares pursuant to the Offer to Exchange is not
authorized by TRW's shareholders at the Special Meeting, TRW shares will not be
accepted for exchange pursuant to the Offer to Exchange unless Northrop Grumman
is satisfied, in its sole discretion, that the provisions of the Ohio Control
Share Acquisition Law are invalid or inapplicable to the acquisition of TRW
shares by Northrop Grumman pursuant to the Offer to Exchange.
A TRW shareholder who votes to authorize the acquisition of TRW shares
pursuant to the Offer to Exchange is NOT obligated to tender TRW shares
pursuant to the Offer to Exchange, and will NOT be prohibited from later voting
against any other proposed control share acquisition or business combination
involving TRW and Northrop Grumman. Shareholder approval for the acquisition of
TRW shares pursuant to the Offer to Exchange, to the extent required by law,
only provides TRW's shareholders the opportunity to decide for themselves
whether to exchange their TRW shares pursuant to the Offer to Exchange.
OHIO CONTROL SHARE ACQUISITION LAW
The Ohio Control Share Acquisition Law (Section 1710.831 of the Ohio Revised
Code) provides that, unless the articles of incorporation or the regulations of
an issuing public corporation provide otherwise, any control share acquisition
of such corporation shall be made only with the prior authorization of the
shareholders. An "issuing public corporation" is defined in the Ohio Revised
Code as a corporation, such as TRW, organized for profit under the laws of
Ohio, with 50 or more shareholders, that has its principal place of business,
principal executive offices or substantial assets in Ohio, and as to which
there is no close corporation agreement in existence.
A "control share acquisition" is defined in the Ohio Revised Code as the
acquisition, directly or indirectly, by any person of shares of an issuing
public corporation that, when added to all other shares of the issuing public
corporation in respect of which such person may exercise or direct the exercise
of voting power, would entitle such acquiring person, immediately after such
acquisition, directly or indirectly, alone or with others, to control any of
the following ranges of voting power of such issuing public corporation in the
election of directors:
. one-fifth or more but less than one-third of such voting power;
. one-third or more but less than a majority of such voting power; or
. a majority or more of such voting power.
Any person who proposes to make a control share acquisition must deliver an
"acquiring person statement" to the issuing public corporation, which statement
must include:
. the identity of the acquiring person;
. a statement that the acquiring person statement is being given pursuant to
Section 1710.831 of the Ohio Revised Code;
. the number of shares of the issuing public corporation owned, directly or
indirectly, by such acquiring person;
4
. the range of voting power in the election of directors under which the
proposed acquisition would, if consummated, fall (i.e., in excess of 20%,
33 1/3% or 50%);
. a description of the terms of the proposed acquisition; and
. representations of the acquiring person that the acquisition will not be
contrary to the law and that such acquiring person has the financial
capacity to make the proposed acquisition (including the facts upon which
such representations are based).
Northrop Grumman delivered an acquiring person statement (the "Northrop
Acquiring Person Statement") to TRW on March 4, 2002.
Within 10 days of receipt of a qualifying acquiring person statement, the
directors of the issuing public corporation must call a special shareholders
meeting to vote on the proposed acquisition. The special shareholders meeting
must be held within 50 days of receipt of the acquiring person statement,
unless the acquiring person otherwise agrees.
The issuing public corporation is required to send a notice of the special
meeting as promptly as reasonably practicable to all shareholders of record as
of the record date set for such meeting, together with a copy of the acquiring
person statement and a statement of the issuing public corporation, authorized
by its directors, of the issuing public corporation's position or
recommendation, or that it is taking no position, with respect to the proposed
control share acquisition.
The acquiring person may make the proposed control share acquisition only if:
. at a meeting at which a quorum is present, the control share acquisition
is authorized by a majority of the holders of the voting power entitled to
vote in the election of directors represented in person or by proxy at
such meeting and the control share acquisition is authorized by a majority
of the portion of the voting power represented at the meeting in person or
by proxy, excluding "interested shares;" and
. such acquisition is consummated, in accordance with the terms so
authorized, within 360 days following such authorization.
"Interested shares" are defined in the Ohio Revised Code as shares as to
which any of the following persons may exercise or direct the exercise of
voting power in the election of directors:
. an acquiring person;
. an officer of the issuing public corporation elected or appointed by its
directors;
. any employee of the issuing public corporation who is also a director of
such corporation; or
. any person who acquires such shares for valuable consideration during the
period beginning with the date of the first public disclosure of a
proposed control share acquisition of the issuing public corporation or
any proposed merger, consolidation or other transaction that would result
in a change in control of the corporation or all or substantially all of
its assets and ending on the Record Date, if either of the following apply:
. the aggregate consideration paid or otherwise given by the person who
acquired the shares and any other persons acting in concert with such
persons exceeds $250,000; or
. the number of shares acquired by the person who acquired the shares and
any other persons acting in concert with such person exceeds 1/2 of 1%
of the outstanding shares of the issuing public corporation entitled to
vote in the election of directors.
"Interested shares" also include interested shares held by a person who
transfers such interested shares after the record date if accompanied by an
instrument (such as a proxy or voting agreement) that gives the transferee the
power to vote those shares.
5
Dissenters' rights are not available to shareholders of an issuing public
corporation in connection with the authorization of a control share acquisition.
The foregoing summary does not purport to be a complete statement of the
provisions of the Ohio Control Share Acquisition Law. The foregoing summary is
qualified in its entirety by reference to the Ohio Control Share Acquisition
Law (a copy of which is attached as Annex B to this Proxy Statement, along with
Section 1701.01 of the Ohio Revised Code, which defines certain terms used
therein) and the Ohio Revised Code.
OHIO LITIGATION
Northrop Grumman expects to file a lawsuit in the United States District for
the Northern District of Ohio against TRW and certain other persons, seeking
declaratory and injunctive relief with respect to the Ohio Control Share
Acquisition Law, the Ohio business combination law (Section 1704.01 et seq. of
the Ohio Revised Code) and the Ohio control bid law (Section 1707.01 et seq. of
the Ohio Revised Code). The lawsuit alleges that such statutes conflict with
the United States constitution and United States laws governing the conduct of
tender offers. No assurance can be provided as to the time which may be
required for a final decision with respect to the issues presented, or as to
the outcome of this lawsuit.
OTHER MATTERS
Except as set forth herein, Northrop Grumman is not aware of any other
substantive matter to be considered at the Special Meeting. However, if any
other matter (other than with respect to the election of TRW directors)
properly comes before the Special Meeting, the accompanying BLUE proxy also
confers authority to the persons named in the accompanying proxy to vote the
TRW shares to which the proxy relates on such other matters at their
discretion. Northrop Grumman is not requesting, and the accompanying BLUE proxy
does not grant, discretionary authority to vote TRW shares subject to the proxy
with respect to the election of TRW directors.
A copy of the Northrop Acquiring Person Statement (without exhibits) is
attached as Annex C to this Proxy Statement. The Northrop Acquiring Person
Statement and the Offer to Exchange contain important information and should be
read by TRW shareholders before making any decision with respect to voting.
Only holders of record of TRW shares as of the close of business on the
Record Date will be entitled to vote. Any TRW shareholder of record on the
Record Date will be entitled to vote at the Special Meeting even if such
shareholder (a) sold the TRW shares it held on the Record Date after the Record
Date or (b) tenders such TRW shares for exchange pursuant to the Offer to
Exchange, whether before or after the Record Date. The tender of TRW shares
pursuant to the Offer to Exchange does not constitute the grant to Northrop
Grumman of a proxy or any voting rights with respect to the tendered TRW shares
until such time as such TRW shares are accepted for exchange by Northrop
Grumman. Accordingly, it is important that each TRW shareholder vote the TRW
shares held by it on the Record Date, or grant a proxy to vote such TRW shares
on the accompanying BLUE proxy card, even if the shareholder decides to sell
such TRW shares after the Record Date or to tender such TRW shares for exchange
pursuant to the Offer to Exchange.
If TRW shares are held in the name of a brokerage firm, bank, bank nominee
or other institution on the Record Date, only the brokerage firm, bank, bank
nominee or other institution can execute a proxy for such TRW shares and will
do so only upon receipt of specific instructions from the beneficial owner of
such TRW shares. Accordingly, each TRW shareholder who holds TRW shares through
a nominee such as a brokerage firm, bank, bank nominee or other institution
must contact the person responsible for its account and advise that person to
6
execute and return the accompanying BLUE proxy card with a vote FOR the
authorization for the acquisition of TRW shares pursuant to the Offer to
Exchange as promptly as possible.
Please sign, date and mail (or direct any nominee holder to sign, date and
mail) the enclosed BLUE proxy card promptly. No postage is required if mailed
in the United States. By signing and mailing the enclosed BLUE proxy card, any
proxy previously delivered by a TRW shareholder with respect to the proposal to
authorize the acquisition of TRW shares pursuant to the Offer to Exchange
automatically will be revoked.
SOLICITATION OF PROXIES
Proxies may be solicited by mail, telephone, telecopier and in person.
Solicitations may be made by directors, officers, investor relations personnel
and other employees of Northrop Grumman, none of whom will receive additional
compensation for such solicitations. Northrop Grumman has requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
of its solicitation materials to the beneficial owners of the TRW shares they
hold of record. Northrop Grumman will reimburse these record holders for
customary clerical and mailing expenses incurred by them in forwarding these
materials to their customers.
Northrop Grumman has retained D.F. King & Co., Inc. ("D.F. King") for
solicitation and advisory services in connection with this proxy solicitation.
D.F. King will be paid an aggregate fee of approximately $ for acting (a)
as proxy solicitor in connection with this Proxy Statement and (b) as
Information Agent in connection with the Offer to Exchange. D.F. King may also
receive additional reasonable and customary compensation for providing
additional advisory services in connection with this proxy solicitation.
Northrop Grumman has also agreed to reimburse D.F. King for its reasonable
out-of-pocket expenses and to indemnify D.F. King against certain liabilities
and expenses, including liabilities and expenses under U.S. federal securities
laws. D.F. King will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders.
Northrop Grumman has retained Salomon Smith Barney, Inc. to act as the
dealer manager in connection with the Offer to Exchange and to provide various
financial advisory services to Northrop Grumman in connection with the Offer to
Exchange and the proposed merger of TRW and either Northrop Grumman or its
wholly-owned subsidiary described above in the section entitled "The Offer to
Exchange." Salomon Smith Barney will receive reasonable and customary
compensation for these services and will be reimbursed for out-of-pocket
expenses, including reasonable expenses of counsel and other advisors. Northrop
Grumman has agreed to indemnify Salomon Smith Barney and certain related
persons against various liabilities and expenses in connection with its
services as the dealer manager and financial advisor, including various
liabilities and expenses under U.S. state and federal securities laws. From
time to time, Salomon Smith Barney and its affiliates may actively trade the
debt and equity securities of Northrop Grumman and TRW for their own account or
for the accounts of customers and, accordingly, may hold a long or short
position in those securities. Salomon Smith Barney has in the past performed
various investment banking and financial advisory services for Northrop Grumman
for which they have received customary compensation.
The entire expense of soliciting proxies for the Special Meeting is being
borne by Northrop Grumman. Northrop Grumman will not seek reimbursement for
such expenses from TRW. Costs incidental to this proxy solicitation include
expenditures for printing, postage, legal and related expenses and are expected
to be approximately $ . Total costs incurred to date in furtherance of or
in connection with this proxy solicitation are approximately $ .
If Northrop Grumman should terminate, or materially amend the terms of, the
Offer to Exchange prior to the Special Meeting, Northrop Grumman will
disseminate information regarding such changes to TRW shareholders and, in
appropriate circumstances, will provide TRW shareholders with a reasonable
opportunity to revoke their proxies prior to the Special Meeting.
7
INFORMATION ABOUT THE COMPANY
TRW is an Ohio corporation with its principal executive offices located at
1900 Richmond Road, Cleveland, Ohio 44124. The telephone number of TRW is (216)
291-7000.
TRW is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and, in accordance therewith, files reports and other
information with the Commission. Reports, proxy statements and other
information filed by TRW may be obtained on the Commission's website at
http://www.sec.gov and directly from the Commission, upon payment of the
Commission's customary charges, by writing to its principal office at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549. Such materials also are
available for inspection and copying at the principal office of the Commission
at the address set forth immediately above, at the Commission's regional
offices at 233 Broadway, New York, New York 10279 and 175 W. Jackson Boulevard,
Suite 900, Chicago, Illinois 60604.
INFORMATION ABOUT NORTHROP GRUMMAN
Northrop Grumman is a leading global aerospace and defense company providing
a wide range products and services in defense and commercial electronics,
systems integration, information technology and nuclear and non-nuclear
shipbuilding and systems. As a prime contractor, principal subcontractor,
partner, or preferred supplier, Northrop Grumman participates in many
high-priority defense and commercial technology programs in the United States
and abroad. Northrop Grumman is aligned into six business sectors: Electronic
Systems, Information Technology, Integrated Systems, Newport News, Ship Systems
and Component Technologies.
Northrop Grumman is a Delaware holding company formed in connection with the
acquisition of Litton Industries, Inc. in April 2001. Northrop Grumman's
principal executive offices are located at 1840 Century Park East, Los Angeles,
California 90067 and its telephone number is (310) 553-6262.
Northrop Grumman is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and, in accordance therewith,
files reports and other information with the Commission. Reports, proxy
statements and other information filed by Northrop Grumman may be obtained from
the Commission at the same locations and by following the same procedures
described above in the section entitled "Information About TRW."
8
OTHER INFORMATION
Certain directors, executive officers, employees and other representatives
of Northrop Grumman who may also assist D.F. King in soliciting proxies are
listed on the attached Schedule I. Schedule II sets forth certain information,
as made available in public documents, regarding TRW shares held by TRW's
principal shareholders and its management.
This Proxy Statement is neither a request for the tender or exchange of TRW
shares nor an offer with respect thereto. Northrop Grumman's Offer to Exchange
is being made only by means of the Offer to Exchange, as filed with the
Commission.
Please indicate support FOR the authorization for the acquisition of TRW
shares pursuant to the Offer to Exchange by completing, signing and dating the
enclosed BLUE proxy card and promptly returning it in the enclosed envelope to:
Northrop Grumman Corporation
c/o D.F. King & Co., Inc.
Wall Street Station - P.O. Box 411
New York, New York 10269-0069
No postage is necessary if the envelope is mailed in the United States.
Northrop Grumman wants your vote! Your vote is important! Please sign, date and
mail the enclosed
BLUE proxy card promptly and advise each bank, broker or other nominee holder
of TRW shares
to vote your TRW shares FOR the shareholder proposals described above.
NORTHROP GRUMMAN CORPORATION
March , 2002
9
SCHEDULE I
The following tables set forth the name of (i) each Director and executive
officer of Northrop Grumman and (ii) certain employees and other
representatives who may also assist D.F. King in soliciting proxies from TRW
shareholders. Unless otherwise noted, each person's business address is 1840
Century Park East, Los Angeles, California 90067. None of the officers,
directors or employees of Northrop Grumman will receive compensation for
soliciting proxies other than their ordinary compensation as an officer,
director or employee, as the case may be.
DIRECTORS AND EXECUTIVE OFFICERS OF NORTHROP GRUMMAN
Name
---- -
John T. Chain, Jr.
Lewis W. Coleman
Vic Fazio
Phillip Frost
Kent Kresa
Charles R. Larson
Jay H. Nussbaum
Aulana L. Peters
John Brooks Slaughter
Ronald D. Sugar
Herbert W. Anderson
Frank G. Brandenberg
Phillip A. Dur
J. Michael Hateley
Robert W. Helm
Robert P. Iorizzo
John H. Mullan
Albert F. Myers
Roseanne P. O'Brien
W. Burks Terry
Thomas C. Schievelbein
Scott J. Seymour
Richard B. Waugh, Jr.
Sandra J. Wright
CERTAIN EMPLOYEES AND OTHER REPRESENTATIVES OF NORTHROP GRUMMAN WHO MAY ALSO
SOLICIT PROXIES
Name
---- -
Gaston Kent
Frank Moore
I-1
SCHEDULE II
BENEFICIAL OWNERSHIP OF TRW COMMON SHARES
Set forth below is information regarding Common Shares owned by (i) those
persons owning more than 5% of the outstanding TRW Common Shares and (ii)
directors and executive officers of TRW as a group. Such information is derived
from TRW's Definitive Proxy Statement for its 2001 Annual Meeting and
subsequent filings on Schedule 13D and Schedule 13G, as described in the
footnotes below. All percentages are based on the information in TRW's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, which
reflects that, as of November 2, 2001, there were 126,286,307 Common Shares
outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class
------------------- ----------------------- ----------
The TRW Employee Stock Ownership and Savings Plan 21,687,649(2) 17.2
1900 Richmond Road.............................
Cleveland, Ohio 44124..........................
Capital Research and Management Company.......... 13,058,300(3) 10.3
333 South Hope Street..........................
Los Angeles, California 90071..................
FMR Corp......................................... 7,185,623(4) 5.7
82 Devonshire Street...........................
Boston, Massachusetts 02109....................
--------
(1) Each beneficial owner listed in the table certified in its Schedule 13G
that, to the best of its knowledge and belief, the Common Shares
beneficially owned by it was acquired in the ordinary course of business
and not for the purpose of changing or influencing control of TRW.
(2) Putnam Fiduciary Trust Company ("Putnam"), One Post Office Square, Boston,
Massachusetts 02109, served as trustee of the TRW Employee Stock Ownership
and Savings Plan during 2000. At that time, Putnam disclaimed beneficial
ownership of the shares, as it did not retain discretionary authority to
buy, sell or vote the securities. The TRW Employee Stock Ownership and
Savings Plan reported shared voting and dispositive power over all the
shares beneficially owned.
(3) Capital Research and Management Company ("Capital Research") filed
Amendment No. 4 to its Statement of Beneficial Ownership on Schedule 13G on
February 11, 2002, reporting beneficial ownership of 13,058,300 Common
Shares. Of these shares, Capital Research and Management reported that it
has sole dispositive power over 13,058,300 shares and voting power over no
shares. Capital Research and Management is deemed to be the beneficial
owner of these shares as a result of acting as investment adviser to
various investment companies registered under the Investment Company Act of
1940. Capital Research and Management has disclaimed beneficial ownership
of all 13,058,300 shares.
(4) FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson jointly filed
Amendment No. 4 to their Statement of Beneficial Ownership on Schedule 13G
on February 14, 2002, reporting beneficial ownership of 7,185,623 Common
Shares. Of the total amount held by FMR Corp., 6,668,713 shares are
beneficially owned by Fidelity Management & Research Company ("FMRC") as a
result of FMRC's acting as investment adviser to various investment
companies registered under the Investment Company Act of 1940, 300,882
shares are beneficially owned by Fidelity Management Trust Company ("FMTC")
as a result of its serving as investment manager of institutional accounts
and 215,300 shares are beneficially owned by Fidelity International Limited
("FIL"). FMRC and FMTC are wholly-owned subsidiaries of FMR Corp. FIL is
39.89 percent owned by a partnership controlled by the controlling group of
FMR Corp. FMR Corp. (through its control of FMTC) has sole power to vote
222,882 shares and sole dispositive power over 300,882 shares. FMR Corp.
has no voting power over 78,000 shares owned by the institutional accounts
managed by FMTC. FMR Corp. (through its control of FMRC) has sole
dispositive power over an
II-1
additional 6,668,713 shares. The sole voting power of such 6,668,713 shares
resides with the Boards of Trustees of the Fidelity Funds. FIL has sole
power to vote and the sole power to dispose of 215,300 shares. Edward C.
Johnson 3d and Abigail P. Johnson are control persons of FMR Corp. Robert M.
Gates, a TRW Director, is a trustee of The Fidelity Funds.
SECURITY OWNERSHIP OF MANAGEMENT
The information in the following table is derived from TRW's Definitive
Proxy Statement for its 2001 Annual Meeting and shows the Common Share
ownership for the directors and executive officers of TRW as of the close of
business on March 1, 2001. Unless otherwise indicates in a footnote, sole
voting and investment power in the shares owned are held either by the named
individual alone or by the named individual and his or her spouse.
Shares Deferred Percent
Beneficially Exercisable Share of
Name Owned(1) Options(2) Units(3) Class
---- ------------ ----------- -------- -------
M. H. Armacost................................. 5,221 7,000 1,712 *
D. M. Cote..................................... 440,395(4) 199,999 27,513 *
M. Feldstein................................... 5,899 5,500 0 *
R. M. Gates.................................... 4,358 7,000 0 *
J. T. Gorman................................... 269,435 1,353,332 0 1.3%
G. H. Heilmeier................................ 6,680 7,000 0 *
C. R. Hollick.................................. 975 2,500 0 *
K. N. Horn..................................... 5,621 7,000(5) 0 *
H. V. Knicely.................................. 22,956 181,999 0 *
D. B. Lewis.................................... 4,376 7,000 0 *
L. M. Martin................................... 5,121 7,000 1,426 *
P. A. Odeen.................................... 10,524 108,333 2,751 *
J. D. Ong...................................... 3,821 7,000 0 *
J. C. Plant.................................... 26,000 36,666 0 *
R. W. Pogue.................................... 9,088 7,000 0 *
All Directors and Executive Officers as a Group 1,047,077 2,865,724 106,875 3.2
--------
* Less than 1 percent.
(1) Includes Common Shares held in the TRW Employee Stock Ownership and Savings
Plan, Common Shares that have been automatically deferred under the
deferred compensation plan for non-employee directors and shares of
restricted stock awarded to certain executive officers.
(2) As required by the Commission, this column shows the number of shares that
may be acquired within 60 days of March 1, 2001, upon exercise of stock
options.
(3) This column shows phantom units of Common Shares that have been credited
under deferred compensation plans and certain other nonqualified benefit
plans.
(4) This figure does not include 250,000 restricted stock units awarded to Mr.
Cote in connection with his election as Chief Executive Officer of TRW.
Until the restricted stock units vest on February 1, 2006, Mr. Cote will
have neither voting rights nor dispositive power over the Common Shares
that will be issued upon vesting.
(5) This figure includes an option for 1,500 Common Shares, which Mrs. Horn has
transferred to her child.
Except as otherwise noted, the information concerning TRW in this Proxy
Statement has been taken from or is based upon documents and records on file
with the Commission and other publicly available information. Northrop Grumman
disclaims any responsibility for the accuracy or completeness of the
information contained in such documents and records, or for any failure by TRW
or any other third party to disclose events that many have occurred any may
affect the significance or accuracy of any such information but which are
unknown to Northrop Grumman.
II-2
Annex A
Offer to Exchange
(Filed separately as part of the
Registration Statement on Form S-4 filed by
Northrop Grumman on March 4, 2002)
Annex B
1701.831 CONTROL SHARE ACQUISITIONS; PRIOR SHAREHOLDER AUTHORIZATION REQUIRED;
SEVERABILITY OF SECTION
(A) Unless the articles or the regulations of the issuing public corporation
provide that this section does not apply to control share acquisitions of
shares of such corporation, any control share acquisition of an issuing public
corporation shall be made only with the prior authorization of the shareholders
of such corporation in accordance with this section.
(B) Any person who proposes to make a control share acquisition shall
deliver an acquiring person statement to the issuing public corporation at the
issuing public corporation's principal executive offices. Such acquiring person
statement shall set forth all of the following:
(1) The identity of the acquiring person;
(2) A statement that the acquiring person statement is given pursuant to
this section;
(3) The number of shares of the issuing public corporation owned,
directly or indirectly, by the acquiring person;
(4) The range of voting power, described in division (Z)(1)(a), (b), or
(c) of section 1701.01 of the Revised Code, under which the proposed control
share acquisition would, if consummated, fall;
(5) A description in reasonable detail of the terms of the proposed
control share acquisition;
(6) Representations of the acquiring person, together with a statement in
reasonable detail of the facts upon which they are based, that the proposed
control share acquisition, if consummated, will not be contrary to law, and
that the acquiring person has the financial capacity to make the proposed
control share acquisition.
(C) Within ten days after receipt of an acquiring person statement that
complies with division (B) of this section, the directors of the issuing public
corporation shall call a special meeting of shareholders of the issuing public
corporation for the purpose of voting on the proposed control share
acquisition. Unless the acquiring person agrees in writing to another date,
such special meeting of shareholders shall be held within fifty days after
receipt by the issuing public corporation of the acquiring person statement. If
the acquiring person so requests in writing at the time of delivery of the
acquiring person statement, such special meetings shall be held no sooner than
thirty days after receipt by the issuing public corporation of the acquiring
person statement. Such special meeting of shareholders shall be held no later
than any other special meeting of shareholders that is called, after receipt by
the issuing public corporation of the acquiring person statement, in compliance
with section 1701.76, 1701.78, 1701.79, 1701.83, or 1701.831 of the Revised
Code.
(D) Notice of the special meeting of shareholders shall be given as promptly
as reasonably practicable by the issuing public corporation to all shareholders
of record as of the record date set for such meeting, whether or not entitled
to vote thereat. Such notice shall include or be accompanied by both of the
following:
(1) A copy of the acquiring person statement delivered to the issuing
public corporation pursuant to this section;
B-1
(2) A statement by the issuing public corporation, authorized by its
directors, of its position or recommendation, or that it is taking no
position or making no recommendation, with respect to the proposed control
share acquisition.
(E) The acquiring person may make the proposed control share acquisition if
both of the following occur:
(1) The shareholders of the issuing public corporation who hold shares as
of the record date of such corporation entitling them to vote in the
election of directors authorize the acquisition at the special meeting held
for that purpose at which a quorum is present by an affirmative vote of a
majority of the voting power of such corporation in the election of
directors represented at the meeting in person or by proxy, and a majority
of the portion of the voting power excluding the voting power of interested
shares represented at the meeting in person or by proxy. A quorum shall be
deemed to be present at the special meeting if at least a majority of the
voting power of the issuing public corporation in the election of directors
is represented at the meeting in person or by proxy.
(2) The acquisition is consummated, in accordance with the terms so
authorized, no later than three hundred sixty days following shareholder
authorization of the control share acquisition.
(F) Except as expressly provided in this section, nothing in this section
shall be construed to affect or impair any right, remedy, obligation, duty,
power, or authority of any acquiring person, any issuing public corporation,
the directors of any acquiring person or issuing public corporation, or any
other person under the laws of this or any other state or of the United States.
(G) If any application of any provision of this section is for any reason
held to be illegal or invalid, the illegality or invalidity shall not affect
any legal and valid provision or application of this section, and the parts and
applications of this section are severable.
B-2
1701.01 DEFINITIONS
As used in sections 1701.01 to 1701.98 of the Revised Code, unless the
context otherwise requires:
(A) "Corporation" or "domestic corporation" means a corporation for
profit formed under the laws of this state.
(B) "Foreign corporation" means a corporation for profit formed under the
laws of another state, and "foreign entity" means an entity formed under the
laws of another state.
(C) "State" means the United States; any state, territory, insular
possession, or other political subdivision of the United States, including
the District of Columbia; any foreign country or nation; and any province,
territory, or other political subdivision of such foreign country or nation.
(D) "Articles" includes original articles of incorporation, certificates
of reorganization, amended articles, and amendments to any of these, and, in
the case of a corporation created before September 1, 1851, the special
charter and any amendments to it made by special act of the general assembly
or pursuant to general law.
(E) "Incorporator" means a person who signed the original articles of
incorporation.
(F) "Shareholder" means a person whose name appears on the books of the
corporation as the owner of shares of such corporation. Unless the articles,
the regulations, or the contract of subscription otherwise provides,
"shareholder" includes a subscriber to shares, whether the subscription is
received by the incorporators or pursuant to authorization by the directors,
and such shares shall be deemed to be outstanding shares.
(G) "Person" includes, without limitation, a natural person, a
corporation, whether nonprofit or for profit, a partnership, a limited
liability company, an unincorporated society or association, and two or more
persons having a joint or common interest.
(H) The location of the "principal office" of a corporation is the place
named as the principal office in its articles.
(I) The "express terms" of shares of a class are the statements expressed
in the articles with respect to such shares.
(J) TRW shares of a class are "junior" to shares of another class when
any of their dividend or distribution rights are subordinate to, or
dependent or contingent upon, any right of, or dividend on, or distribution
to, shares of such other class.
(K) "Treasury shares" means shares belonging to the corporation and not
retired that have been either issued and thereafter acquired by the
corporation or paid as a dividend or distribution in shares of the
corporation on treasury shares of the same class; such shares shall be
deemed to be issued, but they shall not be considered as an asset or a
liability of the corporation, or as outstanding for dividend or
distribution, quorum, voting, or other purposes, except, when authorized by
the directors, for dividends or distributions in authorized but unissued
shares of the corporation of the same class.
(L) To "retire" a share means to restore it to the status of an
authorized but unissued share.
(M) "Redemption price of shares" means the amount required by the
articles to be paid on redemption of shares.
(N) "Liquidation price" means the amount or portion of assets required by
the articles to be distributed to the holders of shares of any class upon
dissolution, liquidation, merger, or consolidation of the corporation, or
upon sale of all or substantially all of its assets.
(O) "Insolvent" means that the corporation is unable to pay its
obligations as they become due in the usual course of its affairs.
B-3
(P) "Parent corporation" or "parent" means a domestic or foreign
corporation that owns and holds of record shares of another corporation,
domestic or foreign, entitling the holder of the shares at the time to
exercise a majority of the voting power in the election of the directors of
the other corporation without regard to voting power that may thereafter
exist upon a default, failure, or other contingency; "subsidiary
corporation" or "subsidiary" means a domestic or foreign corporation of
which another corporation, domestic or foreign, is the parent.
(Q) "Combination" means a transaction, other than a merger or
consolidation, wherein either of the following applies:
(1) Voting shares of a domestic corporation are issued or transferred
in consideration in whole or in part for the transfer to itself or to
one or more of its subsidiaries, domestic or foreign, of all or
substantially all the assets of one or more corporations, domestic or
foreign, with or without good will or the assumption of liabilities;
(2) Voting shares of a foreign parent corporation are issued or
transferred in consideration in whole or in part for the transfer of
such assets to one or more of its domestic subsidiaries.
"Transferee corporation" in a combination means the corporation,
domestic or foreign, to which the assets are transferred, and
"transferor corporation" in a combination means the corporation,
domestic or foreign, transferring such assets and to which, or to the
shareholders of which, the voting shares of the domestic or foreign
corporation are issued or transferred.
(R) "Majority share acquisition" means the acquisition of shares of a
corporation, domestic or foreign, entitling the holder of the shares to
exercise a majority of the voting power in the election of directors of such
corporation without regard to voting power that may thereafter exist upon a
default, failure, or other contingency, by either of the following:
(1) A domestic corporation in consideration in whole or in part, for
the issuance or transfer of its voting shares;
(2) A domestic or foreign subsidiary in consideration in whole or in
part for the issuance or transfer of voting shares of its domestic
parent.
(S) "Acquiring corporation" in a combination means the domestic
corporation whose voting shares are issued or transferred by it or its
subsidiary or subsidiaries to the transferor corporation or corporations or
the shareholders of the transferor corporation or corporations; and
"acquiring corporation" in a majority share acquisition means the domestic
corporation whose voting shares are issued or transferred by it or its
subsidiary in consideration for shares of a domestic or foreign corporation
entitling the holder of the shares to exercise a majority of the voting
power in the election of directors of such corporation.
(T) When used in connection with a combination or a majority share
acquisition, "voting shares" means shares of a corporation, domestic or
foreign, entitling the holder of the shares to vote at the time in the
election of directors of such corporation without regard to voting power
which may thereafter exist upon a default, failure, or other contingency.
(U) "An emergency" exists when the governor, or any other person lawfully
exercising the power and discharging the duties of the office of governor,
proclaims that an attack on the United States or any nuclear, atomic, or
other disaster has caused an emergency for corporations, and such an
emergency shall continue until terminated by proclamation of the governor or
any other person lawfully exercising the powers and discharging the duties
of the office of governor.
(V) "Constituent corporation" means an existing corporation merging into
or into which is being merged one or more other entities in a merger or an
existing corporation being consolidated with one or more other entities into
a new entity in a consolidation, whether any of the entities is domestic or
foreign, and "constituent entity" means any entity merging into or into
which is being merged one or more other entities in a merger, or an existing
entity being consolidated with one or more other entities into a new entity
in a consolidation, whether any of the entities is domestic or foreign.
B-4
(W) "Surviving corporation" means the constituent domestic or foreign
corporation that is specified as the corporation into which one or more
other constituent entities are to be or have been merged, and "surviving
entity" means the constituent domestic or foreign entity that is specified
as the entity into which one or more other constituent entities are to be or
have been merged.
(X) "Close corporation agreement" means an agreement that satisfies the
three requirements of division (A) of section 1701.591 of the Revised Code.
(Y) "Issuing public corporation" means a domestic corporation with fifty
or more shareholders that has its principal place of business, its principal
executive offices, assets having substantial value, or a substantial
percentage of its assets within this state, and as to which no valid close
corporation agreement exists under division (H) of section 1701.591 of the
Revised Code.
(Z)(1) "Control share acquisition" means the acquisition, directly or
indirectly, by any person of shares of an issuing public corporation that,
when added to all other shares of the issuing public corporation in respect
of which such person may exercise or direct the exercise of voting power as
provided in this division, would entitle such person, immediately after such
acquisition, directly or indirectly, alone or with others, to exercise or
direct the exercise of the voting power of the issuing public corporation in
the election of directors within any of the following ranges of such voting
power:
(a) One-fifth or more but less than one-third of such voting power;
(b) One-third or more but less than a majority of such voting power;
(c) A majority or more of such voting power.
A bank, broker, nominee, trustee, or other person who acquires shares in
the ordinary course of business for the benefit of others in good faith and
not for the purpose of circumventing section 1701.831 of the Revised Code
shall, however, be deemed to have voting power only of shares in respect of
which such person would be able, without further instructions from others,
to exercise or direct the exercise of votes on a proposed control share
acquisition at a meeting of shareholders called under section 1701.831 of
the Revised Code.
(2) The acquisition by any person of any shares of an issuing public
corporation does not constitute a control share acquisition for the purpose
of section 1701.831 of the Revised Code if the acquisition was or is
consummated in, results from, or is the consequence of any of the following
circumstances:
(a) Prior to November 19, 1982;
(b) Pursuant to a contract existing prior to November 19, 1982;
(c) By bequest or inheritance, by operation of law upon the death of
an individual, or by any other transfer without valuable consideration,
including a gift, that is made in good faith and not for the purpose of
circumventing section 1701.831 of the Revised Code;
(d) Pursuant to the satisfaction of a pledge or other security
interest created in good faith and not for the purpose of circumventing
section 1701.831 of the Revised Code;
(e) Pursuant to a merger or consolidation adopted, or a combination
or majority share acquisition authorized, by shareholder vote in
compliance with section 1701.78, 1701.781, or 1701.83 of the Revised
Code provided the issuing public corporation is the surviving or new
corporation in the merger or consolidation or is the acquiring
corporation in the combination or majority share acquisition;
(f) The person's being entitled, immediately thereafter, to exercise
or direct the exercise of voting power of the issuing public corporation
in the election of directors within the same range theretofore attained
by that person either in compliance with the provisions of section
1701.831 of the Revised Code or as a result solely of the issuing public
corporation's purchase of shares issued by it.
The acquisition by any person of shares of an issuing public
corporation in a manner described under division (Z)(2) of this section
shall be deemed a control share acquisition authorized pursuant to
B-5
section 1701.831 of the Revised Code within the range of voting power
under division (Z)(1)(a), (b), or (c) of this section that such person
is entitled to exercise after such acquisition, provided, in the case of
an acquisition in a manner described under division (Z)(2)(c) or (d) of
this section, the transferor of shares to such person had previously
obtained any authorization of shareholders required under section
1701.831 of the Revised Code in connection with such transferor's
acquisition of shares of the issuing public corporation.
(3) The acquisition of shares of an issuing public corporation in good
faith and not for the purpose of circumventing section 1701.831 of the
Revised Code from any person whose control share acquisition previously had
been authorized by shareholders in compliance with section 1701.831 of the
Revised Code, or from any person whose previous acquisition of shares of an
issuing public corporation would have constituted a control share
acquisition but for division (Z)(2) or (3) of this section, does not
constitute a control share acquisition for the purpose of section 1701.831
of the Revised Code unless such acquisition entitles the person making the
acquisition, directly or indirectly, alone or with others, to exercise or
direct the exercise of voting power of the corporation in the election of
directors in excess of the range of such voting power authorized pursuant to
section 1701.831 of the Revised Code, or deemed to be so authorized under
division (Z)(2) of this section.
(AA) "Acquiring person" means any person who has delivered an acquiring
person statement to an issuing public corporation pursuant to section
1701.831 of the Revised Code.
(BB) "Acquiring person statement" means a written statement that complies
with division (B) of section 1701.831 of the Revised Code.
(CC)(1) "Interested shares" means the shares of an issuing public
corporation in respect of which any of the following persons may exercise or
direct the exercise of the voting power of the corporation in the election
of directors:
(a) An acquiring person;
(b) Any officer of the issuing public corporation elected or
appointed by the directors of the issuing public corporation;
(c) Any employee of the issuing public corporation who is also a
director of such corporation;
(d) Any person that acquires such shares for valuable consideration
during the period beginning with the date of the first public disclosure
of a proposed control share acquisition of the issuing public
corporation or any proposed merger, consolidation, or other transaction
that would result in a change in control of the corporation or all or
substantially all of its assets, and ending on the record date
established by the directors pursuant to section 1701.45 and division
(D) of section 1701.831 of the Revised Code, if either of the following
applies:
(i) The aggregate consideration paid or given by the person who
acquired the shares, and any other persons acting in concert with the
person, for all such shares exceeds two hundred fifty thousand
dollars;
(ii) The number of shares acquired by the person who acquired the
shares, and any other persons acting in concert with the person,
exceeds one-half of one per cent of the outstanding shares of the
corporation entitled to vote in the election of directors.
(e) Any person that transfers such shares for valuable consideration
after the record date described in division (CC)(1)(d) of this section
as to shares so transferred, if accompanied by the voting power in the
form of a blank proxy, an agreement to vote as instructed by the
transferee, or otherwise.
(2) If any part of this division is held to be illegal or invalid in
application, the illegality or invalidity does not affect any legal and
valid application thereof or any other provision or application of this
division or section 1701.831 of the Revised Code that can be given effect
without the invalid or illegal provision, and the parts and applications of
this division are severable.
B-6
(DD) "Certificated security" and "uncertificated security" have the same
meanings as in section 1308.01 of the Revised Code.
(EE) "Entity" means any of the following:
(1) A for profit corporation existing under the laws of this state or
any other state;
(2) Any of the following organizations existing under the laws of
this state, the United States, or any other state:
(a) A business trust or association;
(b) A real estate investment trust;
(c) A common law trust;
(d) An unincorporated business or for profit organization, including
a general or limited partnership;
(e) A limited liability company;
(f) A nonprofit corporation.
B-7
ANNEX C
ACQUIRING PERSON STATEMENT
This Acquiring Person Statement (this "Statement"), dated as of March 4,
2002, is being delivered to the principal executive offices of TRW Inc., an
Ohio corporation (the "Company") at 1900 Richmond Road, Cleveland, Ohio 44124
on behalf of Northrop Grumman Corporation, a Delaware corporation (the
"Acquiring Person")./(1)/ The Acquiring Person is delivering this Statement
pursuant to Section 1701.831 of Title 17 of the Ohio Revised Code in connection
with the Acquiring Person's exchange offer (the "Offer") for all outstanding
shares of capital stock of TRW pursuant to the Offer to Exchange filed by the
Acquiring Person as a part of the Registration Statement on Form S-4 filed with
the Securities and Exchange Commission on March 4, 2002 (as amended from time
to time, the "Offer to Exchange"), a copy of which is attached as Exhibit A
hereto and incorporated herein by this reference. The principal executive
office of the Acquiring Person is 1840 Century Park East, Los Angeles,
California 90067.
The Acquiring Person currently owns, directly and indirectly, four shares of
the outstanding capital stock of TRW. On the terms and subject to the
conditions set forth in the Offer to Exchange and the related Letters of
Transmittal, the Acquiring Person proposes to exchange shares of common stock
of the Acquiring Person for up to 100% of the outstanding shares of the capital
stock of TRW, which consists of Common Stock, $0.625 par value per share
("Common Shares"), Cumulative Serial Preference Stock II, $4.40 Convertible
Series 1, no par value per share ("Series 1 Shares") and Cumulative Serial
Preference Stock II, $4.50 Convertible Series 3, no par value per share
("Series 3 Shares"). If consummated, the proposed transaction (the "Control
Share Acquisition") would result in the acquisition of a majority or more of
the voting power of the capital stock of TRW as described in Section
1701.01(Z)(1)(c) of Title 17 of the Ohio Revised Code.
Based on TRW's Quarterly Report on Form 10-Q for the quarter ended September
30, 2001, as of November 2, 2001 there were 126,286,307 Common Shares issued
and outstanding. Based on TRW's Definitive Proxy Statement relating to its 2001
Annual Meeting of Shareholders filed on March 21, 2001, as of February 9, 2001
there were 31,710 Series 1 Shares and 59,216 Series 3 Shares issued and
outstanding. Pursuant to the Offer to Exchange, each Company shareholder may
exchange (i) each Common Share for a number of shares of the Acquiring Person's
common stock equal to $47.00 per Common Share divided by the average of the
closing sale prices for a share of the Acquiring Person's common stock on the
New York Stock Exchange as reported in the Wall Street Journal over the five
consecutive trading days ending immediately prior to the second trading day
before the Acquiring Person completes the Offer; provided, however, that in no
event will the number of shares of the Acquiring Person's common stock
exchanged for each Common Share be more than .4563 ($47.00/$103) or less than
..4159 ($47.00/$113) (such number, the "Exchange Rate"), (ii) each Series 1
Share for a number of shares of the Acquiring Person's common stock equal to
the Exchange Rate multiplied by the then effective conversion rate for Series 1
Shares and (iii) each Series 3 Share for a number of shares of the Acquiring
Person's common stock equal to the Exchange Rate multiplied by the then
effective conversion rate for Series 3 Shares. As of March 13, 2001, the
conversion rate for Series 1 Shares was 8.8 Common Shares for each Series 1
Share and the conversion rate for the Series 3 Shares was 7.448 Common Shares
for each Series 3 Share, calculated as provided in TRW's Amended Articles of
Incorporation.
--------
/(1)/ Notwithstanding the making and delivery of this Statement, the Acquiring
Person reserves all rights to (i) challenge the constitutionality,
validity and/or legality of all or any part of Section 1701.831 and
related provisions of the Ohio Revised Code and the application of such
provisions to the Acquiring Person's acquisition of capital stock of TRW
or the Offer to Exchange (as defined herein) and/or (ii) seek an
amendment to the Articles of Incorporation or Regulations of TRW to
provide that Section 1701.831 and related provisions of the Ohio Revised
Code do not apply to control share acquisitions of capital stock,
including, but not limited to, pursuant to the Offer to Exchange.
C-1
The purpose of the Offer is for the Acquiring Person to acquire control of,
and ultimately the entire equity interest in, TRW. Promptly after the
completion of the Offer, and subject to the requirements of applicable law, the
Acquiring Person intends to seek to have TRW complete a merger with the
Acquiring Person or a wholly owned subsidiary of the Acquiring Person in which
each outstanding share of capital stock of TRW (except for treasury shares of
TRW and shares beneficially owned directly or indirectly by the Acquiring
Person for its own account) would be converted into the right to receive shares
of the Acquiring Person's common stock at the same Exchange Rate as used in the
Offer to Exchange, subject to dissenters' rights available under Ohio law. For
a more detailed description of the terms and conditions of the Control Share
Acquisition, reference is made to the information set forth in the Offer to
Exchange.
The Acquiring Person hereby represents that, if consummated, the proposed
Control Share Acquisition will not be contrary to applicable law and that the
Acquiring Person has the financial capacity to fully consummate such proposed
Control Share Acquisition upon the terms and subject to the conditions
described herein and in the Offer to Exchange and the related Letters of
Transmittal. The facts upon which the foregoing representations are based are
set forth in the Offer to Exchange.
IN WITNESS WHEREOF, Northrop Grumman Corporation has caused this Acquiring
Person Statement to be executed by its duly authorized officer as of the date
first set forth above.
NORTHROP GRUMMAN CORPORATION
By: /S/
-----------------------------------
Name: W. Burks Terry, Esq.
Title: Corporate Vice President and
General Counsel
C-2
IMPORTANT
Your vote is important! No matter how many TRW shares you own, please give
Northrop Grumman your vote by:
SIGNING the enclosed BLUE proxy card;
DATING the enclosed BLUE proxy card; and
MAILING the enclosed BLUE proxy card TODAY in the enclosed postage paid
envelope.
If you have any questions, or would like a copy of the Letters of
Transmittal for the Offer to Exchange or any related documents, or require any
additional information concerning this Proxy Statement, voting your TRW shares
or the Offer to Exchange, please contact D.F. King at the address or phone
numbers set forth below. If any TRW shares are held in the name of a brokerage
firm, bank, bank nominee or other institution, only it can vote such TRW shares
and only upon receipt of your specific instructions. Accordingly, please
contact the person responsible for your account and advise them to vote FOR the
proposal authorizing the acquisition of TRW shares pursuant to the Offer to
Exchange by dating executing and returning the BLUE proxy card promptly.
D.F. KING & CO., INC.
Wall Street Station - P.O. Box 411
New York, New York 10269-0069
Call Collect: (212) 269-5550
or
Call Toll-Free: (800) 755-7250
PRELIMINARY COPY
PROXY
THIS PROXY IS SOLICITED BY NORTHROP GRUMMAN CORPORATION
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
TRW INC.
UNDER SECTION 1701.831
OF THE OHIO REVISED CODE
The undersigned hereby appoints _________, ________ and
_______, and each of them, with full power of substitution, the proxies of the
undersigned to vote all of the outstanding shares of
o Common Stock, par value $0.625 per share, of TRW Inc.
("TRW");
o Cumulative Serial Preference Stock II, $4.40 Convertible
Series 1, no par value per share, of TRW; and
o Cumulative Serial Preference Stock II, $4.50 Convertible
Series 3, no par value per share, of TRW
that the undersigned is entitled to vote at the Special Meeting of TRW
shareholders to be held on April _, 2002 (the "Special Meeting"), or at any
adjournment or postponement of the Special Meeting, on the following matter:
NORTHROP GRUMMAN RECOMMENDS A VOTE FOR THE
PROPOSAL SET FORTH BELOW
ACQUISITION PROPOSAL. A resolution of TRW's shareholders authorizing
the acquisition by Northrop Grumman of shares of TRW capital stock pursuant to
the offer to exchange by Northrop Grumman Corporation dated March 4, 2002, as
the same may be amended.
[_] FOR [_] AGAINST [_] ABSTAIN
In their discretion, the proxies named above are authorized to vote
upon such other matters (other than with respect to the election of TRW
directors) as may properly come before the Special Meeting and any adjournment
or postponement thereof. This proxy is not intended to, and does not, grant any
discretionary or other authority to vote the shares represented by this proxy in
any election of TRW directors.
[PROXY CONTINUED ON REVERSE]
This proxy when properly executed will be voted as directed above. If
no directions are given, this proxy will be voted FOR the proposal to authorize
the acquisition of TRW shares pursuant to the Offer to Exchange, and, if the
above named proxies deem it advisable, FOR the adjournment of the Special
Meeting to provide more time to solicit votes to authorize such acquisition of
TRW shares. The undersigned hereby acknowledges receipt of the Proxy Statement
of Northrop Grumman Corporation dated March __, 2002, soliciting proxies for the
Special Meeting.
All previous proxies given by the undersigned to vote at the Special
Meeting or at any adjournment or postponement thereof are hereby revoked.
Dated: , 2002
---------------
---------------------------------------
(Signature)
---------------------------------------
(Name/Title)
---------------------------------------
(Signature, if jointly held)
---------------------------------------
(Name/Title)
Please sign your name exactly as you print it on the line immediately
below the signature line.
If shares are held by joint tenants or otherwise jointly held, both
parties should sign.
If you are signing as an attorney, executor, administrator, trustee or
guardian, please specify your title.
If the holder is a corporation, please sign in the full corporate name
by the President or other authorized officer.
If the holder is a partnership, please sign in the partnership name by
an appropriate authorized person.
Please complete, sign, date and promptly mail promptly your proxy in
the enclosed postage paid envelope to:
------------------------------
NORTHROP GRUMMAN CORPORATION
c/o D.F. KING & CO., INC.
Wall Street Station - P.O. Box 411
New York, New York 10269-0069
2