DEF 14A of Leonardo DRS, Inc., Apr 5, 2024

DEF 14A of Leonardo DRS, Inc.

Filed Apr 5, 2024 · FY20230001628280-24-015046

Open on EDGAR

  1. Director Nominees

    Director Nominees

  2. Director Nominees

    | Leonardo DRS’s Fourth Amended and Restated Bylaws (the “Bylaws”) provide that the Board must consist of no less than one director nor more than ten directors. The exact number of directors serving on the Board is determined from time to time as specified in the Amended and Restated Proxy Agreement (the “Proxy Agreement”) by and among the Company, the individual proxy holders that are signatories thereto, Leonardo US Holding, LLC (“US Holding”), Leonardo – Societa per Azioni (“Leonardo S.p.A.”) and the U.S. Department of Defense (the “DoD”) and the Commitment Letter (the “Commitment Letter”) by and among the Company, US Holding, Leonardo S.p.A. and the Defense Counterintelligence and Security Agency (the “DCSA”), which are discussed in the “Certain Relationships and Related Party Transactions” section in this proxy statement. The Company’s Bylaws provide that directors are elected by a plurality vote. This means that the nominees receiving the highest number of affirmative votes will be elected as directors. In other words, because there are no other nominees for election as directors other than the persons named in the enclosed proxy card, and assuming each of those persons receives at least one vote, all such nominees will be elected to our Board. A stockholder may choose to withhold his or her vote in lieu of voting “for” any director nominee. Withheld votes have the same effect as votes against the director nominee. The director nominees identified in this proxy statement are standing for election at the Annual Meeting and have been nominated by the Board at the recommendation of the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) to hold office for a one-year term expiring at the annual meeting of stockholders in 2025 or until their successors, if any, are elected and qualified. Unless contrary instructions are given, the shares represented by your proxy will be voted FOR the election of all director nominees named in this proxy statement. The Board has determined that each director nominee, other than Mr. Lynn, if elected, would be an independent director. All of the director nominees listed below have consented to being named in this proxy statement and to serve if elected. However, if any nominee becomes unable to serve, proxy holders will have discretion and authority to vote for another nominee proposed by our Board. | VOTE The Board unanimously recommends that you vote “FOR” the election of each nominee presented in Proposal 1. |

  3. Director Nominees

    | Leonardo DRS | 7 | 2024 Proxy Statement |

  4. Director Nominees

    The following table and biographical summaries set forth, with respect to each nominee for director, his or her committee membership, the year in which he or she first became a director of the Company, and whether or not US Holding (after consultation with Leonardo S.p.A. and the DCSA) appointed such director as a proxy holder to serve on the Board pursuant to the Proxy Agreement and the Commitment Letter (as discussed in the “Certain Relationships and Related Party Transactions” section in this proxy statement):

  5. Director Nominees

    | Name | Position | Committee | Director Since | Proxy Holder? | | William J. Lynn III | Chairman & CEO | Government Security | 2012 | No | | Frances F. Townsend | Lead Ind. Director | Compensation (Chair) & Government Security | 2009 | Yes | | Gail S. Baker | Director | Compensation | 2021 | No | | Dr. Louis R. Brothers | Director | Audit & Government Security | 2023 | Yes | | David W. Carey | Director | Audit, Government Security (Chair) & Nominating | 2009 | Yes | | General George W. Casey, Jr. | Director | Compensation & Government Security | 2020 | Yes | | Mary E. Gallagher | Director | Audit (Chair) | 2021 | No | | Kenneth J. Krieg | Director | Compensation, Nominating (Chair) & Government Security | 2009 | Yes | | Eric C. Salzman | Director | Audit & Nominating | 2022 | No |

  6. Director Nominees

    Set forth below are the biographies for our director nominees as of April 5, 2024, including information concerning their specific experiences, qualifications, attributes and skills that led the Board to conclude that the nominee should serve on the Board:

  7. Director Nominees

    | | William J. Lynn III has been Chairman of the Board since 2021 and Chief Executive Officer (“CEO”) since January 2012. Relevant Experience and Skills: •30th United States Deputy Secretary of Defense (2009-2011) •Senior Vice President of Government Operations and Strategy at Raytheon Company (2002-2009) •Chief Financial Officer and Under Secretary of Defense (Comptroller) (1997-2001) •Director of Program Analysis and Evaluation for the Department of Defense (1993-1997) •Counsel to the Senate Armed Forces Committee under Senator Ted Kennedy (1987-1993) •Serves on the boards of Accenture Federal Services, the USO Foundation, the Atlantic Council, and the Center for a New American Security •Skilled and experienced in matters of national security, both in government and industry •Numerous recognitions for professional and service contributions, including four Department of Defense Distinguished Public Service medals and the Distinguished Civilian Services Award | | William J. Lynn III Age: 70 Director Since: 2012 Board Committee: Government Security | |

  8. Director Nominees

    | Leonardo DRS | 8 | 2024 Proxy Statement |

  9. Director Nominees

    | | Frances F. Townsend has been Lead Director since 2023 and Chair of the Compensation Committee since 2009. Other Public Company Directorships: •Chubb Limited (NYSE: CB) (2020-present) •Freeport-McMoRan Inc. (NYSE: FCX) (2013-present) •SciPlay Corporation (NASDAQ: SCPL) (2019-2020) •Scientific Games Corporation (n/k/a Light & Wonder) (NASDAQ: LNW) (2010-2020) •Western Union Company (NYSE: WU) (2013-2020) Relevant Experience and Skills: •Founder, Frances Fragos Townsend LLC (2022-present) •EVP of Corporate Affairs, Corporate Secretary, and Chief Compliance Officer at Activision Blizzard (2020-2022) •Vice Chairman, General Counsel, and Chief Administrative Officer at MacAndrews & Forbes Inc. (2010-2020) •On-air national security analyst for CBS news (2016-2022) •Corporate partner with the law firm Baker Botts, LLP (2009-2010) •Served as Assistant to President George W. Bush for Homeland Security and Counter terrorism and chaired the Homeland Security Council (2004-2008) •Served as Deputy National Security Advisor for Combating Terrorism (2003-2004) •Served in various senior positions at the U.S. Department of Justice (1990-2001) •Serves on several non-profit boards including the Council on Foreign Relations, the Atlantic Council, the Center for Strategic and International Studies, the McCain Institute and the Hospital for Special Surgery •Skilled and experienced in matters of national security and law, business, and government | | Frances F. Townsend Age: 62 Director Since: 2009 Board Committees: Compensation (Chair), Government Security Proxy Holder Independent | |

  10. Director Nominees

    | Leonardo DRS | 9 | 2024 Proxy Statement |

  11. Director Nominees

    | | Other Public Company Directorships: •Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) (2022-2023) Relevant Experience and Skills: •Serves on the board of advisors of Argosy Investment Partners-Capewell Aerial Systems (2022- present) •Consultant to Arcline Investment Management, L.P. (2022-present) •President, Aftermarket Services at Collins Aerospace (2019-2020) •President, Intelligence, Surveillance, Reconnaissance, and Space Systems at Collins Aerospace (2017-2019) •President, Air Management Systems, European Entities and Aftermarket (2015-2017) •President, Aerospace Customers and Business Development for UTC Aerospace Systems (2011-2015) •Skilled and experienced in matters of strategic planning, portfolio management, technical and operational leadership, P&L management, national security and defense •Holds a top-secret U.S. clearance •Serves on the non-profit board for the Hartford Bishops Foundation as Executive Chair of the Grants Committee | | Gail S. Baker Age: 61 Director Since: 2021 Board Committee: Compensation Independent | |

  12. Director Nominees

    | Leonardo DRS | 10 | 2024 Proxy Statement |

  13. Director Nominees

    | | Other Public Company Directorships: •Redwire (NYSE: RDW) (2021-present) •BigBear.ai (NYSE: BBAI) (2020-2022) Relevant Experience and Skills: •Principal with the MIT Lincoln Laboratory (2023-present) •Operating Partner at AE Industrial Partners (2022-present) •Chief Executive Officer of BigBear.ai (2020-2022) •Chief Technology Officer at Peraton (2018-2020) •Principal with The Chertoff Group (2017-2018) •Under Secretary for Science and Technology at the U.S. Department of Homeland Security (2014-2017) •Deputy Assistant Secretary of Defense for Research at the Department of Defense (2011-2014) •Served in various senior roles at the Defense Advanced Research Projects Agency, BAE Systems, Draper Laboratory, and Envoy Networks •Serves on the non-profit board of Riverside Research (2017-present) •Skilled and experienced in matters of defense, government services, and technology industries | | Dr. Louis R. Brothers Age: 64 Director Since: 2023 Board Committees: Audit, Government Security Proxy Holder Independent | |

  14. Director Nominees

    | Leonardo DRS | 11 | 2024 Proxy Statement |

  15. Director Nominees

    | | David W. Carey has been the Chair of the Government Security Committee since 2023. Other Public Company Directorships: •ImageWare Systems, Inc (OTCQB: IWSY) (2006-2020) Relevant Experience and Skills: •Serves on the board of OnPoint Consulting, Inc. (2009-present) and Informatica Federal Operations Corp. (2015-present) •Executive Director at Blackbird Technologies, Inc. (2005-2008) •Vice President, Information Assurance at Oracle Corporation (2001-2005) •Held several senior positions during a 32-year career at the Central Intelligence Agency including service as Executive Director until 2001 •Previously served on several boards to include Qinetiq North America (2014-2019), the advisory board of Recorded Future Inc. (2011-2019) as well as on the non-profit board of the CIA Officers Memorial Foundation until 2022 •Skilled and experienced in matters of national security, business development, and defense and intelligence electronics | | David W. Carey Age: 79 Director Since: 2009 Board Committees: Audit, Government Security (Chair), Nominating Proxy Holder Independent | |

  16. Director Nominees

    | Leonardo DRS | 12 | 2024 Proxy Statement |

  17. Director Nominees

    | | Relevant Experience and Skills: •Served 41 years in the U.S. Army, including from 2007-2011 as the 36th Chief of Staff of the U.S. Army •Commanded the Multi-National Force – Iraq, a coalition of more than 30 countries (2004-2007) •Serves as Distinguished Senior Lecturer of Leadership at the SC Johnson College of Business, Cornell University, and lectures at the Korbel School, University of Denver •Served as the Chairman of the board of governors of the United Service Organizations (2015-2023) and board member of the University of Denver (2021-present), ColtCZ North America (2021-present), the Ross Initiative in Sports for Equality (2019-present), the Center for Global Development (2019-present), Thanks, USA (2011-2022), Student Veterans of America (2014-2021), Georgetown University (2014-2020), Army Historical Foundation (2011-2020), and FedBid (2012-2017) •Skilled and experienced in the matters of military operations, government operations, the non-profit sector, and industry | | General George W. Casey, Jr. (Ret.) Age: 75 Director Since: 2020 Board Committees: Compensation, Government Security Proxy Holder Independent | |

  18. Director Nominees

    | Leonardo DRS | 13 | 2024 Proxy Statement |

  19. Director Nominees

    | | Mary E. Gallagher has been the Chair of the Audit Committee since 2021. Other Public Company Directorships: •American Outdoor Brands (NASDAQ: AOUT) (2020-present) •Served as director of IronNet (NYSE: IRNT) (2021-2023) Relevant Experience and Skills: •Serves as director of Novaria Group (2020-present) •Chief Financial Officer at Wheels Up (2016-2018) •Served in a variety of top financial roles at United Technologies Corporation (now Raytheon Technologies Corporation) (2004-2016) most recently serving as Chief Financial Officer at Sikorsky Aircraft (2013-2016) •Vice President Controller and Chief Accounting Officer at Olin Corporation (1996-2004) •Served for nine years with KPMG in various positions in the audit, mergers/acquisitions, consulting, and training groups (1987-1996) •Skilled and experienced in the matters of business administration, accounting, financial leadership, and defense | | Mary E. Gallagher Age: 58 Director Since: 2021 Board Committee: Audit (Chair) Independent | |

  20. Director Nominees

    | Leonardo DRS | 14 | 2024 Proxy Statement |

  21. Director Nominees

    | | Kenneth J. Krieg has been the Chair of the Nominating Committee since 2021. Other Public Company Directorships: •BWX Technologies, Inc. (NYSE: BWXT) (2016-present) Relevant Experience and Skills: •Head of Samford Global Strategies, an advisory and consulting practice which Mr. Krieg founded in 2007 •Served as Executive in Residence with Renaissance Strategic Advisors, a leading consultancy supporting premier firms in the aerospace, defense, space, intelligence and government services industry (2010-present) •Served in several positions within the Department of Defense (2001-2007), including as Undersecretary of Defense for Acquisition, Technology, and Logistics (2005-2007) •Spent 11 years working for the International Paper Company, most recently as Vice President and General Manager of the Office and Consumer Papers Division •Served on the boards of Tempus Applied Solutions Holdings, Inc. (2014-2016) and API Technologies Corp. (2011-2016) •Serves on a number of private and foreign ownership control and influence (“FOCI”) mitigation boards •Skilled and experienced in the matters of overseeing research, development, acquisitions, FOCI mitigation, public company governance, and government | | Kenneth J. Krieg Age: 63 Director Since: 2009 Board Committees: Compensation, Nominating (Chair), Government Security Proxy Holder Independent | |

  22. Director Nominees

    | Leonardo DRS | 15 | 2024 Proxy Statement |

  23. Director Nominees

    | | Other Public Company Directorships: •Movella Holdings Inc. (NASDAQ: MVLA) (2023-present) •8x8, Inc. (NASDAQ: EGHT) (2012-March 2024) Relevant Experience and Skills: •Interim Chief Executive Officer at Movella Holdings Inc. •Former Chief Executive Officer at Safeguard Scientifics, Inc. (NASDAQ: SFE) (2020-2023) and former Board Chairman of SolAero Technologies Corp. (2018-2022) •Director of Prognos Health (2022-present), meQuilibrium (2022-present), and Aktana (2022-2023) •Managing Member of SarniHaan Capital Partners LLC, a private boutique consulting firm that provides capital and expertise to support the growth of technology driven business in healthcare, financial services and digital media (2011-present) •Served nearly ten years as Managing Director for Lehman Brothers Holdings in the Private Equity and Principle Investing Group as well as in the Global Trading Strategies Division •Served as a board member, investor, and strategic advisor for public and private growth companies for over 25 years •Served as an independent director, executive chairman, non-executive chairman, audit committee chairman, compensation committee chairman, and M&A committee chairman at over 25 public and private companies •Skilled and experienced in the matters of capital markets, M&A, corporate governance, restructuring, investments, technology, software, communications, medical devices, manufacturing, defense, and business services | | Eric C. Salzman Age: 57 Director Since: 2022 Board Committees: Audit, Nominating Independent | |

  24. Director Nominees

    | VOTE | | The Board unanimously recommends that stockholders vote “FOR” the election of each nominee. |

  25. Director Nominees

    | Leonardo DRS | 16 | 2024 Proxy Statement |

  26. Non-Employee Director Compensation

    Non-Employee Director Compensation

  27. Summary of Director Compensation Arrangements

    Summary of Director Compensation Arrangements The Company has historically compensated each of its non-employee directors for service on its Board. In order to attract and retain highly qualified non-employee directors, our philosophy is to align non-employee director compensation with compensation structures of similar publicly traded companies and to incentivize retention of each non-employee director then serving on the Board. The Compensation Committee periodically reviews our non-employee director compensation program and makes recommendations for adjustments, as appropriate, to the Board. In 2023, no changes were made to the non-employee director compensation program. The Company’s current non-employee director compensation structure consists of the following elements: •Annual Cash Retainer; •Committee Chair and Lead Director Retainers; and •Annual Equity Retainer. Information about the Company’s current non-employee director compensation structure is described in more detail below.

  28. 2023 Director Compensation Table

    2023 Director Compensation Table The following table presents information regarding the compensation earned by our non-employee directors for serving on the Board in 2023.

  29. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($)(2) | | Frances F. Townsend | 180,000 | 150,004 | 24,419 | 354,423 | | Gail S. Baker | 100,000 | 150,004 | 6,356 | 256,360 | | Dr. Louis R. Brothers(3) | 100,000 | 210,391 | 60 | 310,451 | | David W. Carey | 140,000 | 150,004 | 5,873 | 295,877 | | General George W. Casey, Jr. | 100,000 | 150,004 | 610 | 250,614 | | Mary E. Gallagher | 140,000 | 150,004 | 19,369 | 309,373 | | Kenneth J. Krieg | 140,000 | 150,004 | 12,093 | 302,097 | | Eric C. Salzman | 100,000 | 150,004 | 13,455 | 263,459 |

  30. 2023 Director Compensation Table

    1.Reflects the aggregate grant date fair value of RSU awards granted to Ms. Townsend, Ms. Gallagher, Ms. Baker, Gen. Casey, Jr., Dr. Brothers, Mr. Krieg, Mr. Carey and Mr. Salzman as part of the non-employee directors’ annual equity retainer for their Board service in 2023. The RSU awards are scheduled to vest on June 1, 2024, subject to each director’s continued service through such date. The grant date fair value is computed in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718. The assumptions used in calculating the grant date fair value are incorporated by reference to Note 15 to the consolidated financial statements in the Company’s 2023 Annual Report. As of December 31, 2023, each of our non-employee directors who were members of the Board on such date held the following outstanding and unvested RSUs: Ms. Townsend, Ms. Gallagher, Ms. Baker, Gen. Casey, Jr., Mr. Krieg and Mr. Carey 13,357; Dr. Brothers and Mr. Salzman 9,785. 2.Total includes reimbursements for reasonable expenses incurred for travel or other business purposes. 3.Dr. Louis R. Brothers was appointed as a director of the Board, effective as of January 1, 2023. Following his appointment, Dr. Brothers received a prorated annual equity retainer with a grant date fair value to reflect his director service from January 1, 2023 through May 15, 2023. All other non-employee directors received their annual equity retainers in 2022 for Board service between November 29, 2022 and the 2023 annual meeting.

  31. Executive Compensation Philosophy

    | Principle | Philosophy | | Pay for Performance | Our compensation program is designed to reward superior past performance and create incentives for future exemplary performance that will create long-term value. | | Competitive Pay | We do not target NEO total direct compensation (which includes base salary, annual incentive compensation, and long-term incentive compensation) at a specific market level. When determining the total direct compensation opportunity for individual NEOs, the Compensation Committee takes many factors into account, including (i) such executive’s experience, responsibilities, management abilities and job performance, (ii) the performance of the Company as a whole, (iii) current market conditions, (iv) an assessment of competitive pay for similar positions at comparable companies and at companies in other industries that could recruit the Company’s executives, and (v) pay relative to other executives at the Company. To understand the appropriate markets for executive compensation, the Compensation Committee considers benchmark data from both a targeted industry and size-relevant peer group, and a broader general industry data set. Our program is structured to provide the opportunity for above-median pay for above-median performance and below-median pay for below-median performance. | | Strategic Goals and Metrics | Annual incentive metrics and targets are driven by the Company’s strategic, financial, and operational business goals. Long-term incentive performance restricted stock units (“PRSUs”) provide NEOs with a significant personal stake in the long-term success of the business by tying awards to a three-year performance period and aligning incentives with our long-term strategic goals. | | Leadership Recruitment and Retention | Our compensation program is designed to recruit, motivate, retain, and reward NEOs through a balanced mix of fixed and variable compensation, and time-based and performance-based awards. | | Alignment between Executives’ and Stockholders’ Interests | In connection with our becoming a public company, in 2022, we transitioned from granting executives and other key employees long-term incentives under our cash-based long-term incentive program to equity-based long-term incentives under the ECP to align executives’ interests with those of our stockholders. |

  32. Executive Compensation Practices

    | What We Do | What We Don’t Do | | Independent external compensation consultant to review and advise on executive compensation matters | No guaranteed minimum pay-out for our annual or long-term performance-based awards | | Align pay and performance using annual and multi-year measures of financial, operational, and business objectives | No single trigger on change in control, with change in control benefits provided only if there is both a change in control and a qualifying termination | | Review and assess compensation policies annually to ensure features of the plan are reflective of market practice and do not encourage undue risk to the Company | No excise tax gross-ups for severance, excise tax, or other benefits provided to our executives | | Cap incentive compensation awards at two times target | No excessive perquisites for executives | | Maintain a clawback policy to seek recoupment of any incentive-based compensation compliant with the new SEC rules and Nasdaq listing standards | No hedging or pledging of Company stock | | Robust stock ownership guidelines for directors and executives, including our NEOs | No employment agreements with any of our executives, with the exception of our CEO |

  33. Role of the Compensation Committee

    Role of the Compensation Committee The Board has delegated its authority to the Compensation Committee for certain compensation related matters. The Compensation Committee approves and is actively engaged in the design and implementation of the Company’s executive compensation program, with the support of the compensation consultant and Company management. In performing its duties, the Compensation Committee: •Oversees the administration of the Company’s executive compensation program including approval of changes to existing plans or new plans to the program. •Reviews and recommends CEO compensation to the Board. •Reviews and approves NEO compensation. •Receives advice from the Compensation Committee’s independent compensation consultant. •Reviews peer group and benchmarking data and other survey input from the compensation consultant. •Evaluates the competitiveness of each executive officer’s total compensation package. •Oversees the Company’s retirement plans. •Reviews and approves the individual and Company annual and long-term performance goals and objectives for the NEOs, evaluates the Company’s strategic, financial, and operational performance against those goals and objectives, and determines and approves all annual and long-term compensation earned by the NEOs based on this evaluation. •Reviews competitiveness and business fit of overall executive compensation plans, philosophies, and policies.

  34. Role of the Compensation Consultant

    Role of the Compensation Consultant The Company and Compensation Committee continued to retain WTW at the beginning of 2023 as its compensation consultant to provide advice on executive compensation matters. The compensation consultant: •Provides information on competitive market data in general executive compensation as it impacts NEOs. •In consultation with Company management, develops peer group proxy data and provides survey data from likely sources of competition for executive talent to assess competitive levels and target positioning. •Reviews and advises the Compensation Committee on executive compensation philosophy and programs, pay and performance alignment, and program design. •Identifies market trends and practices and advises the Compensation Committee on program design implications. •Advises the Compensation Committee on other topics as the Compensation Committee deems appropriate. The Company and Compensation Committee retained WTW to provide perspectives about market practices for executive compensation, peer company analysis and selection, the levels and structure of the compensation program and compensation governance. During 2023, WTW performed the following specific services: •Attended the Compensation Committee meeting held in January for review and discussion of the compensation processes and to present the market benchmarking analysis. •Provided regulatory education to the Compensation Committee. •Provided information and advice relating to executive compensation matters and incentive plan design. WTW also provides compensation, communications, and health and welfare consulting services to the Company. In 2023, the Company paid the following approximate fees to WTW: $58,565 for compensation consultant services, and $379,903 for health and welfare consulting services. In April 2023, at the request of the Compensation Committee, the Company initiated a request-for-proposal process with multiple external compensation consulting firms to selects its next compensation consultant. After an extensive review and interview process, the Compensation Committee selected Exequity to serve as its independent compensation consultant. Exequity reports directly to the Compensation Committee and does not provide any non-compensation-related services to the Company. The Compensation Committee has reviewed the independence of WTW and Exequity in light of SEC rules and Nasdaq listing standards regarding compensation consultants and has concluded that neither compensation consultant’s work for the Compensation Committee raises any conflict of interest.

  35. Role of Management

    Role of Management The Company’s CEO evaluates the performance of the other NEOs and makes recommendations to the Compensation Committee regarding base salary, annual compensation targets, and long-term incentive compensation targets for the NEOs other than himself. The Company’s compensation consultant provides the Compensation Committee with competitive market data and this data, along with the CEO’s recommendations, is used by the Compensation Committee to determine any changes to the NEOs’ annual compensation. Other members of the Company’s management, including the CFO and COO, make recommendations to the CEO regarding annual and long-term incentive plan design and performance metrics.

  36. Authority of Compensation Committee under Incentive Plans

    Authority of Compensation Committee under Incentive Plans Under the Company’s annual and long-term incentive plans (described in more detail below), the Compensation Committee generally retains the authority to provide for adjustments to the financial measures, such as excluding the impact of gains or losses on the sale of assets, the effects of changes in accounting principles or the application thereof, or unusual or non-recurring items, including the impact of significant differences from the assumptions contained in the financial budget upon which the applicable performance targets were established. Any such adjustments to financial measures are intended to better reflect the actual performance of plan participants, align award payments with decisions that support the Company’s long-term financial plan and strategies, avoid unintended inflation or deflation of awards due to unusual or non-recurring items during the performance period, and emphasize the Company’s preference for long-term, sustainable growth. Adjustments are limited in number and, when considered and applied, take into account our overarching objectives of ensuring strong alignment of pay decisions and Company performance in support of stockholder value creation and talent attraction, retention, and motivation. In addition, the Compensation Committee generally has the discretion to make and, if permissible under the terms of the plans, modify awards to our executive officers, including the NEOs.

  37. Use of Competitive Compensation Data

    Use of Competitive Compensation Data We demonstrate our commitment to aligning compensation to the competitive market by using the preestablished peer group and published survey data provided by WTW. The Company generally evaluates NEO total direct compensation relative to our customized compensation peer group. As a secondary reference, we utilize size-appropriate general industry survey data. As referenced earlier, while external benchmark data serves as an important input in setting appropriate pay levels, there are a number of other factors taken into consideration including the individual’s level of responsibility, position held, job performance, years of experience in the position, internal pay equity, and market value. The Compensation Committee utilizes the data provided by WTW to determine each NEO’s competitive positioning when evaluating compensation levels (e.g., base salary, annual and long-term incentive performance targets). The peer group is representative of competitors generally similar in size and scope reflective of companies in the aerospace and defense and other related industries. To inform our 2023 NEO compensation decisions, the Compensation Committee – with guidance from WTW and management – used a 2023 peer group based on an analysis conducted in December 2022 consisting of the following 15 companies:

  38. Use of Competitive Compensation Data

    | Peer Group Companies(1) | | | | AAR Corporation (AIR) | Curtiss-Wright Corporation (CW) | Science Applications International Corporation (SAIC) | | Aerojet Rocketdyne Holdings, Inc. (AJRD) | Huntington Ingalls Industries Inc. (HII)(2) | Teledyne Technologies Inc. (TDY) | | BWX Technologies Inc. (BWXT)(2) | ITT Inc. (ITT)(2) | Unisys Corporation (UIS) | | CACI International Inc. (CACI) | Oshkosh Corporation (OSK) | Viasat, Inc. (VSAT) | | Crane Co. (CR) | Parsons Corporation (PSN) | Woodward, Inc. (WWD) |

  39. Use of Competitive Compensation Data

    1.Moog Inc. and Triumph Group, Inc. were removed from the 2023 peer group based on an analysis provided by WTW. ManTech International Corporation was also removed, since it was acquired in 2022. 2.New companies added to the 2023 peer group as recommended by WTW.

  40. Use of Competitive Compensation Data

    | Leonardo DRS | 36 | 2024 Proxy Statement |

  41. Annual Incentive Compensation

    Annual Incentive Compensation The NEOs were eligible to earn an annual cash incentive award under the Leonardo DRS Incentive Compensation Plan (the “ICP”) in 2023. The ICP is contingent upon the successful achievement of certain Company performance objectives and certain individual performance objectives, each considered important to the Company’s future success. These objectives are established and approved at the beginning of each year by the Compensation Committee. The incentives, if earned, are typically paid early in the following year based on the performance achieved by the Company and the NEO. Following the end of the plan year, which is measured on a calendar year basis, the Compensation Committee measures Company and individual performance against the relevant performance objectives to determine the NEO’s earned award. For individual performance, the CEO’s contributions are assessed and approved by the Compensation Committee, while the NEOs’ individual contributions are first assessed by the CEO, and then approved by the Compensation Committee.

  42. Targets for Annual Incentive Compensation

    Targets for Annual Incentive Compensation Each NEO is assigned an annual target incentive amount under the ICP expressed as a percentage of the NEO’s annual base salary. The annual targets are reviewed during the annual compensation assessment process. An NEO’s annual target percentage can change based on several factors including an increase in responsibilities and market competitiveness. For 2023, the annual target incentive opportunity for Mr. Lynn increased by 10 percentage points (from 110% to 120%) and increased by 5 percentage points for Mr. Dorfman (from 65% to 70%). The annual target incentive opportunity for Mr. Baylouny, Mr. Dippold, and Ms. Wallace remained the same for 2023 at 80%, 75%, and 65%, respectively, of their annual base salaries. Consistent with peer and market practice, the maximum incentive award that can be earned under the ICP is two times the annual target opportunity, except for the CEO whose maximum annual target opportunity under the ICP is capped at 200% of base salary, even if two times the target would result in a higher payout. The minimum incentive award that can be earned under the ICP can vary based on the achievement of each performance metric under the plan. If achievement of a metric falls below 90% of that particular metric’s target, there may be no payout for that metric.

  43. Targets for Annual Incentive Compensation

    | Leonardo DRS | 37 | 2024 Proxy Statement |

  44. 2023 Performance Metrics for Annual Incentive Compensation

    2023 Performance Metrics for Annual Incentive Compensation For 2023, the ICP consisted of (i) 75% Company performance objectives based on four individually weighted financial performance metrics and (ii) 25% individual performance objectives based on strategic, operational, and ESG goals, each described in more detail below. Company Financial Performance Metrics. The four individually weighted financial metrics are described in the below table.

  45. 2023 Performance Metrics for Annual Incentive Compensation

    | Metric | Weighting | Background, Definition and Rationale | | Adjusted EBITDA | 30% of Company Financial Performance | •Adjusted EBITDA is calculated as our net earnings before income taxes, depreciation, amortization of acquired intangible assets, restructuring costs, interest, acquisition and divestiture related expenses, foreign exchange, non-service pension expenditures and other one-time non-operational events. •The Adjusted EBITDA metric is important for the Company to measure and assess operating performance and increase profit levels to enhance stockholder value. | | Free Cash Flow (FCF) | 25% of Company Financial Performance | •FCF is calculated as the (i) sum of the cash flows provided by (used in) operating activities, the cash flows provided by (used in) investing activities pertaining to capital expenditures, proceeds generated from the sale of capital assets and dividends received from investments, less (ii) the sum of transaction-related expenditures (net of tax) and tax payments on disposals. •The FCF metric provides management and investors with an important measure of our ability to generate cash on a normalized basis. FCF also provides insight into our flexibility to allocate capital and pursue opportunities that may enhance stockholder value. | | Working Capital | 25% of Company Financial Performance | •Working Capital is based on the quarterly turns and weighted based on quarterly achievement. •The Working Capital metric is implemented to drive the Company to improve cash performance and quality of cash generation, reducing the cost of holding inventory and excess working capital. | | Bookings | 20% of Company Financial Performance | •Bookings are calculated as the total value of contract awards received from the U.S. government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the value of contract awards and orders received from customers other than the U.S. government. •The Bookings metric is important for the Company to monitor the value of new contract awards received which will underpin confidence in future growth. |

  46. 2023 Performance Metrics for Annual Incentive Compensation

    Each Company financial performance metric is weighted, with the performance thresholds and payout ranges shown in the table below and no payout earned for performance below the minimum threshold.

  47. 2023 Performance Metrics for Annual Incentive Compensation

    | | 2023 Company Financial Performance Targets by Threshold | | | | | | Performance Thresholds | EBITDA – Adjusted (30% Weighting) ($ in millions) | FCF (25% Weighting) ($ in millions) | Working Capital(1) (25% Weighting) ($) | Bookings (20% Weighting) ($ in millions) | Performance Payout Threshold (interpolation used between these points) (%) | | Minimum | 311 | 125 | See table | 2,555 | 90% of Target | | Target | 346 | 139 | See table | 2,839 | 100% of Target | | Maximum | 432 | 174 | See table | 3,549 | 125% of Target |

  48. 2023 Performance Metrics for Annual Incentive Compensation

    1.The targets reportable in this column for 2023 Working Capital are based on the below quarterly turns and weighted based on quarterly achievement:

  49. 2023 Performance Metrics for Annual Incentive Compensation

    | Quarter | Weighting (%) | Minimum ($ in millions) | Target ($ in millions) | Maximum ($ in millions) | | Q1 | 10 | 1.89 | 2.10 | 2.62 | | Q2 | 10 | 2.18 | 2.42 | 3.02 | | Q3 | 10 | 2.29 | 2.55 | 3.19 | | Q4 | 70 | 2.67 | 2.97 | 3.71 |

  50. 2023 Performance Metrics for Annual Incentive Compensation

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  51. 2023 Performance Metrics for Annual Incentive Compensation

    The financial performance metrics are calculated in accordance with GAAP and our disclosed non-GAAP metrics. For more information on non-GAAP metrics, see “Appendix C: Non-GAAP Financial Measures” to this proxy statement. Individual Performance Objectives. The individual performance objectives consist of strategic, operational, and ESG goals. The goals are evaluated based on their execution and relative importance to the strategic and operational performance and success of the Company. Following the end of the year, the CEO evaluates each NEO’s performance and assigns a goal rating from 0% to 200% based on the NEO’s achievement of each goal. The goal ratings are then averaged to determine the NEO’s overall goal rating. The Compensation Committee is presented with each NEO’s overall goal rating for review and approval. For the CEO, the Compensation Committee reviews his annual goal accomplishment summary and approves an overall goal rating each performance year.

  52. 2023 Performance Achievement for Annual Incentive Compensation

    2023 Performance Achievement for Annual Incentive Compensation Company Financial Performance (75% of Incentive Opportunity). The Company’s 2023 performance in relation to the 2023 ICP targets resulted in the Company Financial Performance being achieved at 118.5% of target, as shown below.

  53. 2023 Performance Achievement for Annual Incentive Compensation

    | | 2023 Company Financial Performance Achievement | | | | | | | Performance Metric | 2023 Target (in millions) ($) | 2023 Actual Performance (in millions) ($) | % Performance Achieved (%) | ICP Performance Factor(1) (%) | Weighting (%) | Weighted Performance Factor(2) (%) | | | (a) | (b) | (c) = (b) ÷ (a) | (d) | (e) | (f) = (d) × (e) | | Adjusted EBITDA | 346 | 324 | 94 | 64 | 30 | 19.2 | | FCF | 139 | 159 | 114 | 156 | 25 | 39.0 | | Working Capital(4) | Refer to Working Capital Achievement Table | | | | 25 | 21.1 | | Bookings | 2,839 | 3,516 | 124 | 196 | 20 | 39.2 | | Total Financial Performance Achievement(3) | | | | | 100 | 118.5 |

  54. 2023 Performance Achievement for Annual Incentive Compensation

    1.The ICP Performance Factor is determined by applying an interpolation scale to the Percentage of Performance Achieved for each metric. 2.The Weighted Performance Factor is determined by applying the Weighting to the ICP Performance Factor. 3.The Financial Performance Achievement is the total of the Weighted Performance Factors and is used along with the Individual Performance Achievement to determine the Calculated Award. 4.The 2023 Working Capital Achievement is based on the weighted quarterly turns as set forth below:

  55. 2023 Performance Achievement for Annual Incentive Compensation

    | Quarter | 2023 Target (in millions) ($) | Actual 2023 Performance (in millions) ($) | % Performance Achieved (%) | ICP Performance Factor (%) | Weighting (%) | Weighted Performance Factor (%) | | | (a) | (b) | (c) = (b) ÷ (a) | (d) | (e) | (f) = (d) × (e) | | Q1 | 2.10 | 2.06 | 98 | 88 | 10 | 8.8 | | Q2 | 2.42 | 2.13 | 88 | — | 10 | — | | Q3 | 2.55 | 2.10 | 82 | — | 10 | — | | Q4 | 2.97 | 3.02 | 102 | 108 | 70 | 75.6 | | Total Working Capital Achievement | | | | | | 84.4 | | Working Capital Weighted Financial Performance Factor | | | | | | 21.1 |

  56. 2023 Performance Achievement for Annual Incentive Compensation

    Individual Performance (25% of Incentive Opportunity). The Compensation Committee evaluated each NEO’s individual performance goals to determine each NEO’s overall individual performance achievement. For 2023, Mr. Lynn’s individual goal rating was achieved at 200% of target, Mr. Baylouny, Mr. Dippold and Mr. Dorfman’s average goal rating was achieved at 200% and Ms. Wallace’s average goal rating was achieved at 180%.

  57. 2023 Performance Achievement for Annual Incentive Compensation

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  58. 2023 Performance Achievement for Annual Incentive Compensation

    Below is a summary of each NEO’s achievement toward their individual performance goals.

  59. 2023 Performance Achievement for Annual Incentive Compensation

    | William J. Lynn III | | •Focused on driving the growth in the Company’s core markets and continued to shape the portfolio via organic growth investments to include a major investment of capital expenditure for a new maritime facility and another investment to support a strategic IR&D program for the Army. Developed a strong pipeline of acquisition opportunities, and a disciplined screening process. Significantly improved the strategy and execution in one of the key business areas driving improved operating results and enhanced profit margins with our ASC segment. Expanded our international business to approximately 10 percent of our annual revenue. | | •Ensured the achievement of the financial plan objectives, meeting or exceeding most during the first year as a public company. Sustained the strategic growth plans by exceeding the bookings result and achieved the organic growth goals. Delivered higher operating margins through operational efficiencies and management of the cost structure, and managed the external influences such as supply chain, talent, and other economic pressures. | | •Increased stockholder value by maintaining excellence in program execution and other areas by driving business excellence using APEX Program across the Company and incorporating lessons learned resulting in improvement in efficiencies, cost reductions, and improved the quality of design to yield higher quality products. Focused on outstanding performance and timely execution on programs to increase customer satisfaction. Achieved greater predictability in financial forecasting through policy, process, and training improvements. Created reliable, resilient, and cost-effective stream of materials through measures such as procuring key components in advance of contract to reduce delivery risk. | | •Continued focus on employees by recruiting and retaining the highest caliber of talent by creating a cross-Company recruiting program with enhanced training for recruiters, automation of additional processes, and expanded social media efforts. Enhanced employee benefit offerings while minimizing the cost to employees. Continued to provide growth opportunities to develop talent and cultivate new leaders throughout the Company by creating a high potential program, and through expansion of the mentorship program. Created strong succession plans and the identification of high potential employees. Continued to improve the diversity of the workforce by attracting and retaining top tier talent across all levels of the Company, and increased our commitment to the communities where we do business through Company-sponsored volunteering and charitable giving. For these efforts, the Company continued to receive recognition awards from organizations such as Great Places to Work, HireVets, Military Times, and Disability Index. | | •Ensured full compliance of all security regulations to maintain Company and national security interests and strengthened all aspects of the Ethics Program to align with federal guidance and industry best practices. Led the progress on key sustainability initiatives such as completing two new solar power projects, and continued facility upgrades and improvements to drive energy efficiency. Completed a Nasdaq assessment of our sustainability program which led to enhancements in the current environmental plan and reporting. |

  60. 2023 Performance Achievement for Annual Incentive Compensation

    | Mike Dippold | | •Enhanced the finance organization to broaden the skills to support operating as a public company, adding key talent in SEC reporting and financial reporting. Strengthened the Sarbanes-Oxley team to drive focus, execution and continued maturity of our control structure. The additions to the structure have further improved our succession planning and strengthened our existing finance team. | | •Expanded the Company’s marketing efforts through improved investor relations communications, activities, and interactions to reach a broader community for awareness of the Company’s performance, market differentiators, and capabilities. The results of which drove shareholder value and market capitalization. | | •Executed successful secondary offering culminating in an oversubscribed deal, enhancing the public company trading fundamentals including public float and average daily trading volume. | | •Worked closely with our financial leaders across the Company to monitor and deliver solid financial performance on a quarterly and annual basis, including early identification of risks ensuring timely mitigation plans were actioned. | | •Led the financial team to reduce closing time to achieve the accelerated filing requirements of a large accelerated filer while simultaneously updating our processes to drive optimum financial performance. |

  61. 2023 Performance Achievement for Annual Incentive Compensation

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  62. 2023 Performance Achievement for Annual Incentive Compensation

    | John Baylouny | | •Increased collaboration across the Company to drive our strategic goals for reaching new markets of opportunities with subsequent program wins. | | •Improved supply chain strategy by utilizing advance of contract methodology to drive revenue predictability and improvement of the financial forecasting of key indicators to reduce variance and improve financial results. | | •Improved execution by enhancing processes, including our operational processes in the risk and opportunity management, and new product development procedures to support our philosophy of design excellence. | | •Continued to lead the operational excellence program by introducing approximately 300 new projects to improve performance, reduce costs, and mitigate program risks. | | •Ensured succession planning completed to identify internal successors and develop our future leaders with an emphasis on career development plans. |

  63. 2023 Performance Achievement for Annual Incentive Compensation

    | Mark Dorfman | | •Provided advice and counsel to the Board and Company leadership on matters of great complexity and importance. | | •Enhanced the Company’s governance and regulatory compliance processes to meet the needs of being a first-year publicly reporting Nasdaq-listed company, including timely and accurate filings with the SEC and Tel Aviv Stock Exchange and adherence with applicable stock exchange and security law requirements. Led the Company’s first annual shareholder meeting, aligned internal approval processes, established new risk-based policies and procedures, and trained the Company’s workforce on the new rules and requirements associated with having a public traded security. Oversaw the Company’s inaugural Sarbanes-Oxley control audit and strengthened the internal audit function. | | •Executed strategically significant transactions across the Company, including the secondary offering of the Company’s securities. | | •Ensured the successful integration of RADA Technologies Ltd (“RADA”) through increased oversight, professionalization of legal and compliance functions and elimination of structural inefficacy in furtherance of strategic and operational objectives. | | •Protected the Company through active litigation and claims management, enhanced the DRS Compliance program to align with the federal guidance and industry best practices, and strengthened the Company’s cyber security program with heightened capabilities, increased readiness, and improved governance controls. Led the Company’s Ethics program to ensure regular and robust employee communications, local ethics officer engagement, and employee training to promote the Company’s core values in support of a culture of respect and integrity. |

  64. 2023 Performance Achievement for Annual Incentive Compensation

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  65. 2023 Performance Achievement for Annual Incentive Compensation

    | Sally Wallace | | •Improved program and business execution by creating and implementing new processes, policies, and tools. Implemented new policies related to inventory management and new product information, and a checklist to support the EAC policy and the Sarbanes-Oxley requirements. Worked with finance and IT to review inventory approaches and develop a standardized path forward. Monitored the root cause and corrective action approaches across the Company to ensure continued improvement and consistency. Ensured cross-Company collaboration by establishing a collaborative approach and tools to support the team. | | •Led our continuous improvement team, APEX, which resulted in significant cost savings, improved on-time delivery and customer satisfaction scores across the Company. | | •Worked closely with our IT/ERP team for new or enhanced processes and tools to improve business capability and use. Enhanced the use of PowerBI and updated tools for new reporting capability on risk and opportunity management to allow for the identification, analysis, and escalation of programmatic issues earlier in the process. Implemented Enterprise Data Reporting and worked to enhance the use of “citizen developers” across the Company to achieve our goals. Drove the further standardization of our core tools across business segments (CostPoint 8.0, Unison, Empower 8.3). | | •To increase our profitable growth, supported the business leaders on specific execution challenges to drive greater customer satisfaction, improve design challenges, and provide critical insights on strategy and negotiations. Focused on enhancing the business proposal process to ensure clear understanding of costs, price to win, and understanding of challenges to lead to a path towards winning proposals. Provided support on next level strategic planning analysis throughout planning cycle, to model the direct linkages between strategic planning and FOP planning and facilitate enhanced analysis of our strategic plans and associated risks. | | •Led the corporate program management and supply chain organization, which included efforts to top grade talent and refocus efforts to support the execution at the business level. Served as Executive sponsor of both Supply Chain Steering Council and Engineering Working Group for the Company. Participated as an executive sponsor on the diversity advisory group, and as the executive lead to the LGBTQ employee resource group and working with the group to promote expanded membership. Mentored several high potential employees within IT, ERP, Program Management, Operations, and other areas to support development across the Company. Worked with HR to initiate succession planning, and training and development for program management function. |

  66. Long-Term Incentive Compensation

    Long-Term Incentive Compensation We utilize equity-based long-term incentives to motivate and reward eligible employees, attract and retain key talent who will contribute to the Company’s long-term success, promote effective use of the Company’s resources to achieve expected and superior performance, and provide participants, including our NEOs, with a significant personal stake in the Company’s long-term success. The Compensation Committee approves our NEOs’ equity awards, which are granted under the ECP (last approved by our stockholders in 2022).

  67. 2023 Equity Award Design under the ECP

    2023 Equity Award Design under the ECP 2023 ECP Target Opportunities. Each of our NEOs has a target opportunity expressed as a fixed value that is potentially payable to the NEO over a three-year period. For the 2023 ECP, the target opportunity for each NEO was as follows: $3,580,000 for Mr. Lynn, $800,000 for Mr. Dippold, $975,000 for Mr. Baylouny and $560,000 for Mr. Dorfman and Ms. Wallace. The target opportunity is split equally amongst two ECP components: time-vested RSUs and PRSUs. The aggregate target opportunity for each NEO under the ECP is reviewed during our annual compensation benchmarking process. For the 2023 ECP grants, each NEO’s target ECP award amount was established based on review of market data, in addition to Company performance, complexity of the role, length of service, future expected contributions, and impact to long-term growth and profitability. 2023 ECP Components. •RSUs. RSUs represent one-half of the 2023 target ECP value and are intended to retain key employees and to align our NEOs’ compensation with stockholder interest through long-term stock ownership. •PRSUs. PRSUs represent the other half of the 2023 target ECP value and are intended to motivate participants to consistently deliver strong performance. The PRSU portion of our 2023 ECP has different metrics than our short-term incentive plan (the ICP), with the intention of providing a balanced compensation program tied to long-term financial performance metrics. PRSU goals are reviewed and approved by our Compensation Committee at the beginning of the three-year performance period.

  68. 2023 Equity Award Design under the ECP

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  69. 2023 ECP Performance Metrics

    2023 ECP Performance Metrics The PRSUs granted in 2023 will be earned based on three performance metrics as described in the below table.

  70. 2023 ECP Performance Metrics

    | Metric | Weighting | Background, Definition and Rationale | | Relative Total Shareholder Return (TSR) | 40% of PRSU award | •The performance period for Relative TSR for the 2023 PRSUs is measured from January 1, 2023 through December 31, 2025, and is defined as the ending stock price of a share of common stock (adjusted for dividends reinvested during the cycle) divided by the beginning stock price. Both beginning and ending stock prices are measured over a 60-day average. Relative TSR is measured against the Company’s Relative TSR Comparison Group (disclosed below). •Focuses on alignment of executive pay with value creation for our stockholders relative to our peers. | | 3-year Revenue Growth | 30% of PRSU award | •Revenue Growth is measured based on the Compound Annual Growth Rate (CAGR) for the three-year performance period (2023-2025), using the baseline value at the end of the prior year in which the performance period begins (the 2022 results) and the ending value at the end of the three-year performance period (the 2025 results). •Long-term revenue growth is a key driver of stockholder value creation. | | 3-year Average Return on Invested Capital (ROIC) | 30% of PRSU award | •Measured over the three-year performance period (2023-2025), ROIC is determined by taking the 3-year average Net Operating Profit After Tax (“NOPAT”) divided by Invested Capital.(1) •ROIC measures our executives’ ability to generate sustained returns on our invested capital. |

  71. 2023 ECP Performance Metrics

    1.“NOPAT” is a non-GAAP metric defined as Net Earnings plus Tax effected Interest, plus Tax effected Amortization and Tax effected deal related expenditures, and Tax effected restructuring and other nonoperational expenditures, and “Invested Capital” is defined as equity plus net debt (inclusive of lease debt). The 2023 ECP financial performance metrics and the target for each metric were approved by the Compensation Committee in early 2023. Below is the Relative TSR Comparison Group for the 2023 PRSU awards:

  72. 2023 ECP Performance Metrics

    | 2023-2025 PRSUs – Relative TSR Comparison Group(1) | | | | | AAR Corporation | Elbit Systems | Mercury Systems, Inc. | Science Applications International Corporation | | BAE Systems | Huntington Ingalls | Moog, Inc. | Teledyne Technologies, Inc. | | CACI International Inc. | KRATOS Defense & Security Solutions, Inc. | Oshkosh Corporation | | | Crane Co. | L-3 Harris Technologies | Parsons Corporation | | | Curtiss-Wright Corporation | Leidos Corporation | Rheinmetall Corporation | |

  73. 2023 ECP Performance Metrics

    1.If a Comparison Group member ceases to be publicly traded on a principal national securities exchange in the United States, including by reason of a sale of stock, merger, consolidation, sale of all or substantially all of the assets, or a similar transaction, during the performance period, such Comparison Group member will be removed from the Comparison Group. The Compensation Committee will have the sole discretion to determine whether performance goals have been met and, if they have, will determine the number of PRSUs earned. Awards earned under the ECP may range from 0% to 200% of the target award opportunity. The Compensation Committee approved the 2023 minimum and maximum performance threshold levels. For each metric, the minimum performance threshold level was approved by the Compensation Committee to set the threshold below which no awards would be earned; and the maximum performance level was set significantly above target, reflecting performance at which the Compensation Committee believed a 200% target award was warranted. For the specific amounts and terms of the 2023 ECP awards, see the “2023 Grants of Plan-Based Awards Table” below and corresponding narrative disclosure.

  74. 2023 ECP Performance Metrics

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  75. 2021 LTIP Cash Payments

    2021 LTIP Cash Payments Historically, we awarded cash-based long-term incentives to our NEOs under our Long-Term Incentive Plan, as amended (“LTIP”). The NEOs were eligible to participate in the 2021 LTIP, which provided for cash payments. Under the 2021 LTIP, 50% of the 2021 LTIP award was retention-based and vested in three equal installments based on a participant’s continued service through each vesting date and 50% of the 2021 LTIP award was performance-based and vested based on the Company’s achievement of three performance metrics over the three-year performance period ending December 31, 2023. Participants generally have to be employed on the payment date in order to receive an award under the 2021 LTIP. The Compensation Committee approved payments under the 2021 LTIP in March 2024, relating to NEO retention and the Company’s 2021-2023 performance. All NEOs received the final 2021 LTIP payment on April 5, 2024, based on meeting the continued service requirement, and the Company’s achievement of the Company performance component at 124.4% of target for the 2021-2023 performance period. The Company performance metrics are weighted, with the performance thresholds and payout ranges shown in the table below. There is no payout if Company performance is below the minimum threshold.

  76. 2021 LTIP Cash Payments

    | | 2021 - 2023 Company Performance Targets by Threshold | | | | | Performance Threshold | Relative Adjusted Net Earnings (40% Weighting) (percentile) | 3-Year Revenue Growth (30% Weighting) (%) | 3-Year Average ROIC (30% Weighting) (%) | Performance Payout Threshold (interpolation used between these points) (%) | | Minimum | 40th Percentile | 3.0 percent | 11.0 percent | 50% of Target | | Target | 60th Percentile | 5.0 percent | 12.5 percent | 100% of Target | | Maximum | 80th Percentile | 8.0 percent | 14.0 percent | 200% of Target |

  77. 2021 LTIP Cash Payments

    The Company’s 2021- 2023 performance achievement was 124.4% of target, as shown below.

  78. 2021 LTIP Cash Payments

    | Performance Metric | 2021 to 2023 Target | 2021 to 2023 Actual Performance | LTIP Performance Factor(1) | Weighting (%) | Weighted Performance Factor(2) (%) | | | (a) | (b) | (c) | (d) | (e) = (c) × (d) | | Relative Adjusted Net Earnings | 60th Percentile | 72nd Percentile | 161 | 40 | 64.4 | | 3-Year Revenue Growth | 5.0 percent | 0.6 percent | — | 30 | — | | 3-Year Average ROIC | 12.5 percent | 15.2 percent | 200 | 30 | 60.0 | | Total Financial Performance Achievement(3) | | | | 100 | 124.4 |

  79. 2021 LTIP Cash Payments

    1.The LTIP Performance Factor is determined by applying an interpolation scale to the Actual Performance achieved against Target for each metric. 2.The Weighted Performance Factor is determined by applying the Weighting to the LTIP Performance Factor. 3.The Total Financial Performance Achievement is the total of the Weighted Performance Factors and is used to determine the Calculated Award. The NEOs’ cash payments under the 2021 LTIP are included in the “2023 Summary Compensation Table” below, under the Non-Equity Incentive Plan Compensation column. The 2021 LTIP cash payments for retention and Company performance achievement were $2,823,426 for Mr. Lynn, $630,934 for Mr. Dippold, $768,950 for Mr. Baylouny, $441,654 for Mr. Dorfman, and $441,654 for Ms. Wallace.

  80. 2021 LTIP Cash Payments

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  81. Severance and Change in Control Benefits

    Severance and Change in Control Benefits The Company maintains the Leonardo DRS, Inc. Executive Severance Plan, as subsequently amended and restated and approved by the Compensation Committee on October 10, 2022 (collectively, the “Severance Plan”). The purpose of the Severance Plan is to help retain qualified employees, maintain a stable work environment and provide economic security by providing benefits to certain key employees, including the NEOs, in the event of certain qualifying terminations including a change in control. The Compensation Committee periodically evaluates and reviews payment and benefit levels under the Severance Plan. In addition to the Severance Plan, NEOs may also be eligible for certain payments under the ICP and award agreements issued under the ECP, subject to the Compensation Committee’s discretion, in the event of certain qualifying terminations, including an NEO’s death or disability. Mr. Lynn is also eligible to receive enhanced severance benefits for certain qualifying terminations, as well as upon retirement, pursuant to his employment agreement. Each NEO’s respective severance and change in control benefits are described in greater detail, and quantified, in the “Executive Compensation – Potential Payments Upon Termination or Change in Control” section below.

  82. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table shows information concerning the annual compensation for services to the Company and its subsidiaries in all capacities of the CEO, CFO, and the other NEOs during the last three completed fiscal years. The footnotes accompanying the 2023 Summary Compensation Table generally explain amounts reported for 2023, unless otherwise noted.

  83. 2023 Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($)(4) | Total ($) | | William J. Lynn III Chief Executive Officer | 2023 | 1,160,428 | 3,263,996 | 5,137,726 | — | 112,826 | 9,674,976 | | | 2022 | 1,160,428 | 5,881,020 | 3,905,700 | — | 103,130 | 11,050,279 | | | 2021 | 1,156,439 | — | 5,067,533 | — | 99,632 | 6,323,603 | | Mike Dippold Executive Vice President, Chief Financial Officer | 2023 | 512,346 | 729,385 | 1,273,434 | — | 57,819 | 2,572,985 | | | 2022 | 493,901 | 1,351,936 | 969,100 | — | 52,885 | 2,867,822 | | | 2021 | 468,341 | — | 1,198,567 | — | 51,904 | 1,718,811 | | John Baylouny Executive Vice President, Chief Operating Officer | 2023 | 573,165 | 888,952 | 1,535,550 | — | 59,873 | 3,057,540 | | | 2022 | 550,900 | 1,664,807 | 1,170,700 | — | 53,779 | 3,440,186 | | | 2021 | 515,584 | — | 1,441,400 | — | 52,865 | 2,009,849 | | Mark Dorfman Executive Vice President General Counsel & Secretary | 2023 | 462,550 | 510,562 | 982,954 | — | 57,491 | 2,013,557 | | | 2022 | 446,209 | 1,037,649 | 712,200 | — | 52,010 | 2,248,069 | | | 2021 | 429,518 | — | 902,167 | — | 52,169 | 1,383,854 | | Sally Wallace Executive Vice President, Operations | 2023 | 474,205 | 510,562 | 937,754 | 39,512 | 57,011 | 2,019,045 | | | 2022 | 456,681 | 777,480 | 684,300 | — | 52,208 | 1,970,670 | | | 2021 | 439,793 | — | 876,867 | — | 51,962 | 1,368,622 |

  84. 2023 Summary Compensation Table

    1.Reflects the aggregate grant date fair value of awards of RSUs and PRSUs awarded under the ECP in 2023, computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the RSUs and PRSUs are incorporated by reference to Note 15 to the consolidated financial statements in the Company’s 2023 Annual Report. The value of the portion of the 2023 PRSUs with performance-based vesting reported in the Stock Awards column is based on the probable outcome of the performance conditions (at the award date) in accordance with ASC Topic 718, assuming no forfeitures. The value of the portion of the 2023 PRSUs with market-based vesting conditions reported in the Stock Awards column is based on a Monte Carlo simulation. For all PRSUs awarded in 2023, the aggregate values achievable assuming the performance or market-based vesting conditions will be achieved at the highest level are $2,427,825 for Mr. Lynn, $542,532 for Mr. Dippold, $661,231 for Mr. Baylouny, $379,757 for Mr. Dorfman, and $379,757 for Ms. Wallace. These amounts do not reflect the actual value that will be realized by our NEOs. 2.The amounts in this column reflect the annual incentive cash awards earned under the Company’s ICP for 2023 and long-term cash awards earned under the Company’s 2021 LTIP. See “Compensation Discussion and Analysis—Components of Compensation Program—Annual Incentive Compensation” and “—Long-Term Incentive Compensation” above for a description of these programs. 3.This column represents an increase during 2023 in the present value of Ms. Wallace’s accumulated benefit under the Pension Plan for Employees of DRS Naval Power Systems, Inc. For more information regarding Ms. Wallace’s pension benefits, please see the “Pension Benefits” table below.

  85. 2023 Summary Compensation Table

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  86. 2023 Summary Compensation Table

    4.The amounts shown in the “All Other Compensation” column for 2023 include the amounts detailed in the table below. See “Compensation Discussion and Analysis—Components of Benefits and Perquisites Program” for a description of the benefits discussed in the table below.

  87. 2023 Grants of Plan-Based Awards Table

    2023 Grants of Plan-Based Awards Table The following table provides additional information about plan-based compensation disclosed in the 2023 Summary Compensation Table. This table includes equity and non-equity awards granted during 2023.

  88. 2023 Grants of Plan-Based Awards Table

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(1) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | William J. Lynn III | | | | | | | | | | | (2) | | 555,480 | 1,388,699 | 2,314,498 | | | | | | | (3) | | | 596,666 | | | | | | | | (4) | 4/18/23 | | | | 69,542 | 139,083 | 278,166 | | 1,213,913 | | (4) | 4/18/23 | | | | | | | 139,083 | 2,050,083 | | Mike Dippold | | | | | | | | | | | (2) | | 154,200 | 385,500 | 771,000 | | | | | | | (3) | | | 133,334 | | | | | | | | (4) | 4/18/23 | | | | 15,540 | 31,080 | 62,160 | | 271,266 | | (4) | 4/18/23 | | | | | | | 31,080 | 458,119 | | John Baylouny | | | | | | | | | | | (2) | | 184,000 | 460,000 | 920,000 | | | | | | | (3) | | | 162,500 | | | | | | | | (4) | 4/18/23 | | | | 18,940 | 37,879 | 75,758 | | 330,616 | | (4) | 4/18/23 | | | | | | | 37,879 | 558,336 |

  89. 2023 Grants of Plan-Based Awards Table

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  90. 2023 Grants of Plan-Based Awards Table

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(1) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Mark Dorfman | | | | | | | | | | | (2) | | 129,290 | 324,800 | 649,600 | | | | | | | (3) | | | 93,334 | | | | | | | | (4) | 4/18/23 | | | | 10,878 | 21,756 | 43,512 | | 189,879 | | (4) | 4/18/23 | | | | | | | 21,756 | 320,683 | | Sally Wallace | | | | | | | | | | | (2) | | 123,500 | 308,750 | 617,500 | | | | | | | (3) | | | 93,334 | | | | | | | | (4) | 4/18/23 | | | | 10,878 | 21,756 | 43,512 | | 189,879 | | (4) | 4/18/23 | | | | | | | 21,756 | 320,683 |

  91. 2023 Grants of Plan-Based Awards Table

    1.The amounts reported in this column for 2023 reflect the aggregate grant date fair value of RSUs and PRSUs under the ECP awarded in the year. There can be no assurance that these values will ever be realized. See Note 15 to the consolidated financial statements in the Company’s 2023 Annual Report for the assumptions made in determining values. 2.These amounts represent cash bonus awards made under the ICP. The threshold, target, and maximum amounts represent 40%, 100%, and 200%, respectively, of the annual total incentive award opportunity for each NEO; except for the CEO whose maximum is capped at 200% of base salary, even if 200% of his target would result in a higher payout. If actual performance falls between threshold and target or between target and maximum, the award would be calculated using linear interpolation. Under the ICP, the target annual incentive opportunity for the NEOs was based on a percentage of base salary, which is 120% for Mr. Lynn, 75% for Mr. Dippold, 80% for Mr. Baylouny, 70% for Mr. Dorfman, and 65% for Ms. Wallace. The target amount is generally the NEO’s base salary multiplied by his or her respective target opportunity. 3.These amounts represent estimated payouts of the retention component of cash awards issued in 2021 under the Company’s LTIP. 4.These awards were granted under the ECP and were awarded as part of the Company’s annual long-term incentive program. See below for a description of each form of award.

  92. Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table

    Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table

  93. 2023 Outstanding Equity Awards At Fiscal Year-End

    2023 Outstanding Equity Awards At Fiscal Year-End The following table shows outstanding equity awards as of December 31, 2023 for each NEO.

  94. 2023 Outstanding Equity Awards At Fiscal Year-End

    | Name | Grant Date | Stock Awards(1) | | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | William J. Lynn III | 4/18/2023 | 139,083 | 2,787,223(3) | 278,166 | 5,574,447(6) | | | 11/29/2022 | 120,905 | 2,422,936(3) | 362,716 | 7,268,829(7) | | | 11/29/2022 | 142,858 | 2,862,874(4) | 128,572 | 2,576,583(8) | | | 11/29/2022 | 85,714 | 1,717,709(5) | | |

  95. 2023 Outstanding Equity Awards At Fiscal Year-End

    | Leonardo DRS | 53 | 2024 Proxy Statement |

  96. 2023 Outstanding Equity Awards At Fiscal Year-End

    | Name | Grant Date | Stock Awards(1) | | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Mike Dippold | 4/18/2023 | 31,080 | 622,843(3) | 62,160 | 1,245,686(6) | | | 11/29/2022 | 27,018 | 541,441(3) | 81,054 | 1,624,322(7) | | | 11/29/2022 | 34,286 | 687,091(4) | 30,857 | 618,374(8) | | | 11/29/2022 | 20,572 | 412,263(5) | | | | John Baylouny | 4/18/2023 | 37,879 | 759,095(3) | 75,758 | 1,518,190(6) | | | 11/29/2022 | 32,929 | 659,897(3) | 98,786 | 1,979,671(7) | | | 11/29/2022 | 42,858 | 858,874(4) | 38,572 | 772,983(8) | | | 11/29/2022 | 25,714 | 515,309(5) | | | | Mark Dorfman | 4/18/2023 | 21,756 | 435,990(3) | 43,512 | 871,980(6) | | | 11/29/2022 | 18,913 | 379,017(3) | 56,738 | 1,137,030(7) | | | 11/29/2022 | 29,715 | 595,489(4) | 26,743 | 535,930(8) | | | 11/29/2022 | 17,829 | 357,293(5) | | | | Sally Wallace | 4/18/2023 | 21,756 | 435,990(3) | 43,512 | 871,980(6) | | | 11/29/2022 | 18,913 | 379,017(3) | 56,738 | 1,137,030(7) | | | 11/29/2022 | 13,429 | 269,117(4) | 12,086 | 242,203(8) | | | 11/29/2022 | 8,057 | 161,462(5) | | |

  97. 2023 Outstanding Equity Awards At Fiscal Year-End

    1.All awards in this table were granted under the ECP. 2.For purposes of this table, the market value of the RSUs and PRSUs is determined by multiplying the number of shares by $20.04, the closing price of one share of Company common stock on the last trading day of the year (December 29, 2023). 3.These amounts represent outstanding awards of RSUs that vest in three equal annual installments starting on the grant date, generally subject to an NEO’s continued service through each applicable vesting date. 4.These amounts represent outstanding RSU Founders Awards that cliff vest on the second anniversary of November 29, 2022, generally subject to an NEO’s continued service through the applicable vesting date. 5.These amounts represent outstanding awards of PRSU Founders Awards that have met the relative stock price percentage goal as of November 29, 2023. These PRSUs will cliff vest on the second anniversary of November 29, 2022, generally subject to an NEO’s continued service through the applicable vesting date. 6.These amounts represent outstanding awards of PRSUs at maximum that cliff vest on April 1, 2026, generally subject to an NEO’s continued service through the applicable vesting date and the Company achieving the relative TSR, Revenue Growth and Average ROIC performance conditions during the 2023-2025 performance period. In calculating the number of PRSUs and their value, we are required by SEC rules to compare our performance through 2023 under the PRSU award against the threshold, target, and maximum performance levels for the award and report in the table the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. 7.These amounts represent outstanding awards of PRSUs at maximum that cliff vest on March 15, 2025, generally subject to an NEO’s continued service through the applicable vesting date and the Company achieving the relative TSR, Revenue Growth and Average ROIC performance conditions during the 2022-2024 performance period. In calculating the number of PRSUs and their value, we are required by SEC rules to compare our performance through 2023 under the PRSU award against the threshold, target, and maximum performance levels for the award and report in the table the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. 8.These amounts represent outstanding awards of PRSU Founders Awards that cliff vest on the second anniversary of November 29, 2022, generally subject to an NEO’s continued service through the applicable vesting date and the Company achieving the relative stock price percentage goal before November 29, 2024.

  98. 2023 Outstanding Equity Awards At Fiscal Year-End

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  99. 2023 Option Exercises And Stock Vested

    2023 Option Exercises And Stock Vested The following table sets forth the stock awards that vested for each NEO during 2023. None of the NEOs have received or exercised options in 2023.

  100. 2023 Option Exercises And Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | William J. Lynn III | 60,453 | 746,595 | | Mike Dippold | 13,509 | 166,836 | | John Baylouny | 16,464 | 203,330 | | Mark Dorfman | 9,456 | 116,782 | | Sally Wallace | 9,456 | 116,782 |

  101. Pension Benefits

    Pension Benefits The following table lists the pension program participation and actuarial present value for Ms. Wallace, the NEO with a defined benefit pension, at December 31, 2023. No other NEOs participate in a defined benefit pension.

  102. Pension Benefits as of December 31, 2023

    Pension Benefits as of December 31, 2023

  103. Pension Benefits as of December 31, 2023

    | Name | Plan Name(1) | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(2) | Payments during last fiscal year ($) | | Sally Wallace | Naval Power Systems Pension Plan | 15.9 | 494,148 | — |

  104. Pension Benefits as of December 31, 2023

    1.Benefits under the Pension Plan for Employees of DRS Naval Power Systems, Inc. were frozen effective as of December 31, 2011. 2.The Present Value of Accumulated Benefit (PVAB) for Ms. Wallace as of December 31, 2023 is $494,148, which is based on a discount rate of 4.78% and the PRI-2012 mortality table projected using MP-2021 with white collar adjustment. The PVAB for Ms. Wallace as of December 31, 2022 was $454,636, which is based on a discount rate of 4.98% and the PRI-2012 mortality table projected using MP-2021 with white collar adjustment. The change in Ms. Wallace’s PVAB, an increase of $39,512, was caused primarily by the change in the discount rate and her age. The above amounts are determined based on the same assumptions used for financial reporting purposes, except that the assumed retirement age is the normal retirement age of age 65, which is also the earliest age at which she may receive retirement benefits without any reduction in benefits.

  105. Narrative to Pension Benefits

    Narrative to Pension Benefits A description of the Company’s Pension Plan is included above under the heading “Company-Sponsored Retirement Plans.”

  106. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control As discussed under “Compensation Discussion and Analysis—Components of Benefits and Perquisites Program—Severance and Change in Control Benefits” above, NEOs may be entitled to certain amounts upon termination of employment under the Severance Plan, ICP, LTIP, ECP, and the award agreements under the ECP, and for Mr. Lynn, his employment agreement. Additionally, pursuant to the Severance Plan, NEOs are eligible for certain “double-trigger” severance benefits in the event of a qualifying termination of an NEO’s employment on or within two years of a change in control. No payments or benefits would be payable to an NEO solely as a result of a change in control of the Company. The table below shows estimates of the compensation payable to each of our NEOs upon their termination of employment with the Company. The amount payable is shown for each termination trigger applicable to the NEO. All amounts are calculated as if the NEO had terminated employment effective December 31, 2023. Values of accelerated equity awards are based on the closing price of our common stock on December 29, 2023, which was $20.04. The actual amounts due to any one of the NEOs upon termination of

  107. Potential Payments Upon Termination or Change in Control

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  108. Potential Payments Upon Termination or Change in Control

    employment can only be determined at the time, and depending on the circumstances, of the termination. There can be no assurance that a termination or change in control would produce the same or similar results as those described below if it occurs on any other date or at any other stock price, or if any assumption is not, in fact, correct. Accrued amounts under the Pension Plan are not included in this table. For these amounts, see the “Pension Benefits as of December 31, 2023” table above.

  109. Potential Payments Upon Termination or Change in Control

    | Named Executive Officer | Triggering Event | Cash Severance ($)(1) | Continuation of Medical/Welfare Benefits (Present Value) ($)(2) | Accelerated Vesting or Payout of Long-Term Incentive Awards ($)(3) | Total Termination Benefits ($) | | William J. Lynn III | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 7,753,568 | 154,796 | 21,612,389 | 29,520,753 | | | •Involuntary Termination without Cause or Termination due to Material Breach by the Company | 7,753,568 | 92,878 | 18,542,769 | 26,389,215 | | | •Retirement | 2,314,300 | 92,878 | 6,175,443 | 8,582,621 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 2,314,300 | — | 21,612,389 | 23,926,689 | | Mike Dippold | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,634,250 | 96,511 | 4,947,951 | 7,678,712 | | | •Involuntary Termination without Cause | 1,156,500 | 57,907 | — | 1,214,407 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 642,500 | — | 4,947,951 | 5,590,451 | | John Baylouny | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 3,047,500 | 67,783 | 6,084,039 | 9,199,322 | | | •Involuntary Termination without Cause | 1,322,500 | 40,670 | — | 1,363,170 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 766,600 | — | 6,084,039 | 6,850,639 | | Mark Dorfman | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,296,800 | 96,511 | 3,749,877 | 6,143,188 | | | •Involuntary Termination without Cause | 1,020,800 | 57,907 | — | 1,078,707 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 541,300 | — | 3,749,877 | 4,291,177 | | Sally Wallace | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,268,125 | 96,511 | 2,933,949 | 5,298,585 | | | •Involuntary Termination without Cause | 1,021,250 | 57,907 | — | 1,079,157 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 496,100 | — | 2,933,949 | 3,430,049 |

  110. Potential Payments Upon Termination or Change in Control

    1.In addition to the amounts provided above, in the event of death, each NEO’s beneficiary would receive payment from the Company’s third-party life insurance provider under the group life insurance benefit. Additionally, Mr. Lynn’s beneficiary would receive payment under his individual term life insurance provider.

  111. Potential Payments Upon Termination or Change in Control

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  112. Potential Payments Upon Termination or Change in Control

    2.In addition to the amounts provided above, each NEO would be eligible for a monthly disability benefit under our current provider. The long-term disability benefit is 66 ⅔% of the monthly base salary subject to a cap of $15,000. The NEOs would be eligible for disability benefits as long as they have a qualifying disability as determined in the sole discretion of our disability insurance provider. 3.The amounts provided above include the value of accelerated 2021 LTIP cash payments and ECP equity awards (using the Company’s closing share price of $20.04 as of December 29, 2023, the last trading day of the year). The treatment of termination payments for the 2021 LTIP and equity awards under the ECP are outlined in the narrative descriptions below.

  113. Narrative to Potential Payments upon Termination or Change in Control Table

    Narrative to Potential Payments upon Termination or Change in Control Table Termination and change in control payments for each NEO are determined as set forth below. Except for Mr. Lynn, the termination benefits shown in the table above and discussed below are generally available to our executives, including the NEOs, and vary based upon the circumstances of the executive’s termination. None of the NEOs are entitled to any termination payments, other than legally required accrued benefits, upon an involuntary termination for “cause” or voluntary termination. Additionally, neither the Severance Plan nor Mr. Lynn’s employment agreement contain a provision that would reimburse an executive for any excise taxes the executive becomes subject to under Section 4999 of the Code upon a change in control. Instead, these documents each contain a provision that reduces their change in control benefits below the level at which an excise tax is triggered, but only if the reduction results in greater after-tax proceeds to the executive.

  114. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of the Company’s employees and the total compensation of William J. Lynn III, our CEO, for 2023:

  115. CEO Pay Ratio

    | Median Employee total annual compensation | $85,501 | | Total Compensation of our CEO | $9,674,976 | | Ratio of CEO to Median Employee compensation | 113 to 1 |

  116. CEO Pay Ratio

    To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps: •We determined that, as of October 31, 2023, our employee population consisted of 6,579 individuals, with 6,044 of these employees located in the United States and 535 employees located outside of the United States. In determining our median employee, we excluded all employees located in Israel (or 257 employees), which in aggregate represents less than 5% of our total employee population as of October 31, 2023, as permitted by SEC rules. As a result, our employee population used for determining the median employee was 6,322 employees, consisting of 6,044 employees based in the United States and 278 employees based outside the United States. Our employee population consisted of our full-time, part-time, and temporary employees, as we do not have seasonal workers. We selected October 31, 2023, as our identification date for determining our median employee because it enabled us to make such identification in a reasonably efficient and economic manner. •We used a consistently applied compensation measure to identify our median employee by comparing the amount of base salary only. To make them comparable, salaries for newly hired employees who had worked less than one year were annualized. •We identified our median employee by consistently applying this compensation measure to all of our employees included in our analysis. We did not make any cost-of-living adjustments in identifying the median employee. •After we identified our median employee, we combined all of the elements of such employee’s compensation for the 2023 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $85,501. •With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this proxy statement.

  117. CEO Pay Ratio

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  118. Pay Versus Performance Disclosure

    Pay Versus Performance Disclosure

  119. 2023 Pay Versus Performance Table

    2023 Pay Versus Performance Table The following table sets forth (i) the total and average total compensation set forth in the Summary Compensation Table (“SCT”) for the CEO and the other NEOs as a group, respectively; (ii) the total and average total CAP (as determined in accordance with Item 402(v)) for the CEO and the other NEOs as a group, respectively; (iii) the Company’s cumulative TSR (“Cumulative TSR”) and the cumulative TSR (“Peer Group Cumulative TSR”) of our Item 402(v) peer group (“PVP Peer Group”), as determined in accordance with Item 402(v); and (iv) Net Income and Adjusted EBITDA, for the previous four years.

  120. 2023 Pay Versus Performance Table

    | | SCT Total for PEO ($) | Compensation Actually Paid to PEO ($)(2) | Average SCT Total for Non-PEO Named Executive Officers ($)(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(2)(3) | Value of Initial Fixed $100 Investment Based on(4): | | | | | Year(1) | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) | Net Income ($ in millions) | Adjusted EBITDA ($ in millions)(5) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 9,674,976 | 19,073,744 | 2,415,782 | 4,326,151 | 182 | 127 | 168 | 324 | | 2022 | 11,050,279 | 13,210,191 | 2,631,687 | 3,087,365 | 116 | 102 | 405 | 318 | | 2021 | 6,323,603 | 6,323,603 | 1,620,284 | 1,620,284 | n/a | n/a | 154 | 310 | | 2020 | 5,003,692 | 5,003,692 | 1,369,040 | 1,362,156 | n/a | n/a | 84 | 85 |

  121. 2023 Pay Versus Performance Table

    1.Mr. Lynn served as PEO and Mr. Dippold, Mr. Baylouny, Mr. Dorfman and Ms. Wallace served as Non-PEO NEOs since 2020. 2.Represents CAP for our PEO and Average CAP for our non-PEO NEOs as a group, as determined in accordance with Item 402(v) and does not reflect the compensation ultimately earned or realized by our PEO or non-PEO NEOs. 3.Reflects the average SCT and CAP “Total Compensation” of each of the non-PEO NEOs (determined as set forth below). 4.Reflects our Cumulative TSR and our Peer Group Cumulative TSR for each measurement period from the date of our public listing (November 29, 2022) through December 31, 2023. Dividends are assumed to be reinvested, and the returns of each company in our PVP Peer Group are weighted to reflect relative stock market capitalization. Results assume that $100 was invested on November 29, 2022 (our first trading day), in each of our common stock and the stocks comprising our PVP Peer Group. Our PVP Peer Group is the same peer group used in the Performance Graph for purposes of Item 201(e)(1)(ii) of Regulation S-K in our 2023 Annual Report, the S&P Aerospace & Defense Select Industry Index. 5.Adjusted EBITDA is a non-GAAP financial measure. For more information, see “Appendix C: Non-GAAP Financial Measures” to this proxy statement. Reconciliations of SCT Total Compensation to CAP Total Compensation for our PEO and Average SCT Total Compensation to Average CAP Total Compensation for our non-PEO NEOs is shown below:

  122. Narrative to the 2023 Pay Versus Performance Table

    Narrative to the 2023 Pay Versus Performance Table As noted above, we are required to provide the above tabular and below narrative disclosures in order to comply with Item 402(v). The following graph illustrates the relationship between the CAP for our PEO and the Average CAP of our Non-PEO NEOs and the performance measures set forth in the above table.

  123. Board of Directors

    Board of Directors Under the terms of the Proxy Agreement, the proxy holders will, in their discretion and in consultation with the Nominating Committee, nominate four additional individuals who are not proxy holders, selected from candidates proposed by US Holding, in consultation with the Nominating Committee, as candidates for election to our Board (the “non-proxy holder director nominees”). The non-proxy holder director nominees will include (i) our CEO and (ii) three additional individuals. The Nominating Committee will nominate the proxy holders for election as directors at any meeting of the Company’s stockholders at which directors are to be elected. At any such meeting, the proxy holders will vote on behalf of US Holding to elect the then-current proxy holders and the non-proxy holder director nominees to serve on the Board for the succeeding year. The proxy holders may remove any non-proxy holder director nominee from the Board by majority vote after consultation with US Holding.

  124. Board of Directors

    | Leonardo DRS | 88 | 2024 Proxy Statement |

  125. Board of Directors

    In the event of a material breach of the Proxy Agreement, the DoD may (i) novate our classified contracts to a company not under FOCI at our expense, (ii) terminate our classified contracts and deny us new classified contracts, (iii) revoke our facility security clearance and/or (iv) suspend or debar us from participation in all U.S. government contracts. DCSA may terminate the Proxy Agreement if it deems it is no longer necessary in order to maintain our facility security clearance or if our facility security clearance is no longer necessary, if there has been a breach of the Proxy Agreement that requires its termination or if DCSA determines that terminating is necessary for national security or, in DCSA’s sole discretion, upon petition by us or US Holding. The Proxy Agreement automatically terminates upon the sale of our business or all of US Holding’s interest in a person or entity not controlled by Leonardo S.p.A. or if US Holding holds less than 50% of our outstanding shares of common stock and DCSA determines that FOCI mitigation is no longer necessary.