DEF 14A of Leonardo DRS, Inc., Apr 23, 2025

DEF 14A of Leonardo DRS, Inc.

Filed Apr 23, 2025 · FY20240001628280-25-019362

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 – Società per Azioni (“Leonardo S.p.A.”), Leonardo International -- Società per Azioni, and the U.S. Department of Defense (the “DoD”), which is 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 this proxy statement, 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 2026 or until their successors, if any, are elected and qualified, or until their earlier resignation or removal. 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 | 2025 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 (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 9, 2025, 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 Joint Chiefs of Staff Distinguished Civilian Service Award | | William J. Lynn III Age: 71 Director Since: 2012 Board Committee: Government Security | |

  8. Director Nominees

    | Leonardo DRS | 8 | 2025 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: 63 Director Since: 2009 Board Committees: Compensation (Chair), Government Security Proxy Holder Independent | |

  10. Director Nominees

    | Leonardo DRS | 9 | 2025 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 •Serves on the non-profit board for the Hartford Bishops Foundation as Executive Chair of the Grants Committee | | Gail S. Baker Age: 62 Director Since: 2021 Board Committee: Compensation Independent | |

  12. Director Nominees

    | Leonardo DRS | 10 | 2025 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: 65 Director Since: 2023 Board Committees: Audit, Government Security Proxy Holder Independent | |

  14. Director Nominees

    | Leonardo DRS | 11 | 2025 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: 80 Director Since: 2009 Board Committees: Audit, Government Security (Chair), Nominating Proxy Holder Independent | |

  16. Director Nominees

    | Leonardo DRS | 12 | 2025 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 (2019-2024), 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: 76 Director Since: 2020 Board Committees: Compensation, Government Security Proxy Holder Independent | |

  18. Director Nominees

    | Leonardo DRS | 13 | 2025 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: 59 Director Since: 2021 Board Committee: Audit (Chair) Independent | |

  20. Director Nominees

    | Leonardo DRS | 14 | 2025 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: 64 Director Since: 2009 Board Committees: Compensation, Nominating (Chair), Government Security Proxy Holder Independent | |

  22. Director Nominees

    | Leonardo DRS | 15 | 2025 Proxy Statement |

  23. Director Nominees

    | | Other Public Company Directorships: •Movella Holdings Inc. (DEL: MVLA) (2023-2024) •8x8, Inc. (NASDAQ: EGHT) (2012-2024) Relevant Experience and Skills: •Independent Director (2023-present) and Chief Executive Officer at Movella Holdings Inc. (2024-present) •Former Chief Executive Officer at Safeguard Scientifics, Inc. (2020-2023) and former Board Chairman of SolAero Technologies Corp. (2018-2022) •Director of Prognos Health (2022-present), meQuilibrium (2022-present), Dixa (2024-present), and Typeform (2024-present) •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 Principal 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: 58 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 | 2025 Proxy Statement |

  26. Non-Employee Director Compensation

    Non-Employee Director Compensation

  27. Summary of Director Compensation Arrangements

    Summary of Director Compensation Arrangements The Company compensates each of its non-employee directors for service on the Board. 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. Employee directors do not receive any compensation for service on the Board. The Compensation Committee periodically reviews our non-employee director compensation program and makes recommendations for adjustments, as appropriate, to the Board. No changes were made to the non-employee director compensation program in 2024. In October 2024, the Board approved changes to the 2025 non-employee director compensation program. For a description of the changes to the 2025 non-employee director compensation program, see “Changes to Director Compensation for 2025” below. The Company’s current non-employee director compensation structure consists of the following elements: •Annual Cash Retainer; •Committee Chair and Lead Director Retainers; •Annual Equity Retainer; and •Other Director Compensation and Benefits. Information about the Company’s current non-employee director compensation structure is described in more detail below.

  28. Other Director Compensation and Benefits

    Other Director Compensation and Benefits Directors are reimbursed for reasonable expenses incurred in attending or returning from meetings of the Board or any committee thereof, or otherwise in or about the business of the Company. These expenses are reimbursed in accordance with the Company’s policies regarding reimbursement of business expenses and are approved by the Senior Vice President, Human Resources, General Counsel, Chief Financial Officer (“CFO”) and/or the CEO.

  29. 2024 Director Compensation Table

    2024 Director Compensation Table The following table presents information regarding the compensation earned by our non-employee directors for serving on the Board in 2024.

  30. 2024 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($)(2) | | Frances F. Townsend | 180,000 | 148,010 | 19,128 | 347,138 | | Gail S. Baker | 100,000 | 148,010 | 7,358 | 255,368 | | Dr. Louis R. Brothers | 100,000 | 148,010 | — | 248,010 | | David W. Carey | 140,000 | 148,010 | 4,214 | 292,224 | | General George W. Casey, Jr. | 100,000 | 148,010 | 2,916 | 250,926 | | Mary E. Gallagher | 140,000 | 148,010 | 3,665 | 291,675 | | Kenneth J. Krieg | 140,000 | 148,010 | 11,427 | 299,437 | | Eric C. Salzman | 100,000 | 148,010 | 3,512 | 251,522 |

  31. 2024 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 2024. The RSU awards are scheduled to vest on May 16, 2025, 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 2024 Annual Report. As of December 31, 2024, each of our non-employee directors who were members of the Board on such date held 6,438 outstanding and unvested RSUs. 2.Total includes reimbursements for reasonable expenses incurred for travel or other business purposes.

  32. Changes to Director Compensation for 2025

    Changes to Director Compensation for 2025 In October 2024, the Company’s independent compensation consultant, Exequity, conducted a review of the Company’s non-employee director compensation relative to peer group practices. Based on this review and conversations with Exequity, the Compensation Committee recommended, and the Board approved, the following changes to the non-employee director compensation program, effective January 1, 2025: •An increase in the annual cash retainer for each non-employee director from $100,000 to $110,000; •An increase to the grant value of the annual equity award retainer from $150,000 to $160,000; •A decrease in the amount of the annual cash retainer for each committee chair from $40,000 to $20,000; and •An increase in the non-employee director stock ownership level from four times to five times a director’s annual cash retainer.

  33. Changes to Director Compensation for 2025

    | Leonardo DRS | 29 | 2025 Proxy Statement |

  34. Changes to Director Compensation for 2025

    | Approval of Advisory Resolution Regarding the Compensation of the Company’s NEOs | | | As required by Section 14A of the Exchange Act, we are offering our stockholders an opportunity to cast an advisory vote on the compensation of our NEOs, as disclosed in this proxy statement. Although the vote is non-binding, we value continuing and constructive feedback from our stockholders on compensation and other important matters. The Board and the Compensation Committee will consider the voting results when making future compensation decisions. The Company is committed to maintaining executive compensation programs and practices that are aligned with the Company’s business strategy. As a result, the Company has a strong pay-for-performance philosophy that greatly impacts its decisions regarding executive compensation. Our executive compensation programs seek to align management’s interests with our stockholders’ interests to support long-term value creation and pay for performance. This philosophy and the compensation structure are essential to the Company’s ability to attract, retain and motivate individuals who can achieve superior financial results in the best interests of the Company and its stockholders. To that end, our program links pay to performance by delivering a substantial component of the total compensation opportunity of our NEOs in variable or performance-based compensation programs (annual and long-term incentive plans). Performance measures used in the Company’s annual and long-term incentive plans support the Company’s annual operating plan and longer-term strategy and are tied to key Company measures of short and long-term performance. Our program also aligns our NEOs’ financial interest with those of our stockholders by delivering a substantial portion of their total compensation in the form of equity awards and other long-term incentive vehicles. The affirmative vote of the holders of a majority of shares of Leonardo DRS common stock present in person (virtually) or by proxy and entitled to vote on the matter at the Annual Meeting will be required for the approval of this proposal. Abstentions will count as a vote “against” the proposal. Broker non-votes will have no effect on the outcome of the vote. We urge our stockholders to read the section entitled “Compensation Discussion and Analysis” below, which describes in detail how our executive compensation program and practices operate and are designed to achieve our compensation objectives, as well as the accompanying compensation tables which provide detailed information on the compensation of our NEOs. For these reasons, we recommend that stockholders vote in favor of the following advisory resolution: “RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion presented in the Company’s proxy statement for its 2025 Annual Meeting of Stockholders, is hereby APPROVED.” | VOTE The Board unanimously recommends that you vote “FOR” the advisory resolution presented in Proposal 2. |

  35. Changes to Director Compensation for 2025

    | Leonardo DRS | 30 | 2025 Proxy Statement |

  36. 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 | Our executive pay is structured to foster an environment of accountability and transparency by incentivizing long-term value creation by utilizing a mix of RSU and PRSU grants tied to multi-year performance metrics, and subject to stock ownership guidelines, clawback provisions, and no hedging or pledging policies. The program aligns executive and stockholder interests and also balances risk, reward, and ethical considerations. |

  37. 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 guaranteed annual salary increases, with increases determined based on a review of market data, executive’s experience, tenure, company, and individual performance |

  38. 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 and has the authority to modify the terms of awards granted under the annual and long-term incentive plans as it deems appropriate. •Receives advice from the Compensation Committee’s independent compensation consultant. •Reviews the peer group, benchmarking data, and survey data 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 performance goals and objectives, determines if any 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) is warranted, and determines and approves all annual and long-term compensation earned by the NEOs based on this evaluation.

  39. Role of the Compensation Consultant

    Role of the Compensation Consultant In 2024, the Company and Compensation Committee retained Exequity as our compensation consultant to provide advice on executive compensation matters. The compensation consultant: •Provides information on executive compensation, including design, structure, and level. •In consultation with Company management, develops the peer group, and provides the relevant market data from proxies and survey data. •Assesses the Company’s NEOs’ competitive levels relative to the benchmarking analysis. •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 Compensation Committee assesses the independence of Exequity annually and has concluded that no conflict of interest exists or existed in 2024 that would prevent Exequity from providing independent advice to the Compensation Committee.

  40. 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.

  41. Use of Competitive Compensation Data

    Use of Competitive Compensation Data The Compensation Committee reviews market data for the preestablished peer group and survey data as provided by Exequity to assess the competitiveness of the compensation program and each element of compensation (e.g., base salary, annual and long-term incentive performance targets). The peer group serves as the primary comparison for evaluating NEO total direct compensation. Size-appropriate general industry survey data serves as a secondary reference. As noted earlier, while external benchmark data serves as an important input in setting appropriate pay levels, the Compensation Committee considers a number of other factors in assessing pay levels including the individual’s level of responsibility, position held, job performance, years of experience in the position, internal pay equity, and market value.

  42. Use of Competitive Compensation Data

    | Leonardo DRS | 35 | 2025 Proxy Statement |

  43. Use of Competitive Compensation Data

    The Compensation Committee reviews the peer group annually and in 2023, in consultation with management and Exequity, revised the peer group to better reflect the Company’s operating characteristics and size. The resulting 2024 peer group includes 16 companies in the aerospace and defense and related industries of similar size and scope to the Company. The peer group was used to inform 2024 NEO compensation.

  44. Use of Competitive Compensation Data

    | Peer Group Companies(1)(2) | | | | AAR Corporation (AIR) | Curtiss-Wright Corporation (CW) | Science Applications International Corporation (SAIC) | | Aerojet Rocketdyne Holdings, Inc. (AJRD) | HEICO Corporation (HEI) | Teledyne Technologies Inc. (TDY) | | Barnes Group, Inc. (B) | Hexcel Corporation (HXL) | V2X, Inc. (VVX) | | BWX Technologies Inc. (BWXT) | Huntington Ingalls Industries Inc. (HII) | Woodward, Inc. (WWD) | | CACI International Inc. (CACI) | Mercury Systems, Inc. (MRCY) | | | Crane Co. (CR) | Moog, Inc. (MOG.A) | |

  45. Use of Competitive Compensation Data

    1.ITT Inc., Oshkosh Corporation, Unisys Corporation, and Viasat, Inc. were removed from the 2024 peer group as recommended by Exequity. 2.Barnes Group, Inc., Crane Company, HEICO Corporation, Hexcel Corporation, Mercury Systems, Inc., MOOG Inc., and V2X, Inc. were added to the 2024 peer group as recommended by Exequity.

  46. 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 2024. 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.

  47. 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 2024, the annual target incentive opportunity for Mr. Lynn remained at 120% of his annual base salary. The annual target incentive opportunity for Mr. Baylouny, Mr. Dippold, Mr. Dorfman, and Ms. Wallace remained the same for 2024, at 80%, 75%, 70% and 65%, respectively, of their annual base salaries. Consistent with peer and market practice, for 2024 the maximum incentive award that can be earned under the ICP is two times the annual target opportunity. The minimum incentive award that can be earned under the ICP can vary based on the achievement of each performance metric under the plan. For each financial metric, no payout will be earned if the performance achievement of the metric falls below the minimum threshold. The minimum threshold for bookings, adjusted EBITDA, and free cash flow is 80%; the minimum threshold for revenue is 90%.

  48. 2024 Performance Metrics for Annual Incentive Compensation

    2024 Performance Metrics for Annual Incentive Compensation For 2024, the ICP consisted of (i) 75% Company performance objectives based on four individually weighted financial performance metrics and (ii) 25% individual performance objectives that may be based on the Company’s growth and strategy, operational, and taking care of our people goals, each described in more detail below.

  49. 2024 Performance Metrics for Annual Incentive Compensation

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  50. 2024 Performance Metrics for Annual Incentive Compensation

    Company Financial Performance Metrics. The four individually weighted financial metrics are described in the below table.

  51. 2024 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) | 30% 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. | | 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. | | Revenue | 20% of Company Financial Performance | •Revenue is calculated by comparing actual revenue generated by the sale of goods and services before any deductions or adjustments. •Revenue directly reflects the Company’s ability to generate income and growth performance and is a readily measurable indicator of success. |

  52. 2024 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.

  53. 2024 Performance Metrics for Annual Incentive Compensation

    | 2024 Company Financial Performance Targets by Threshold | | | | | | | Metric | Weighting | Min Perf ($ in millions) | Target Perf ($ in millions) | Max Perf ($ in millions) | Thresholds (Min-Target-Max)(1) | | Adjusted EBITDA | 30% | 310 | 388 | 466 | 80%-100%-120% | | FCF | 30% | 150 | 187 | 224 | | | Bookings | 20% | 2,624 | 3,280 | 3,936 | | | Revenue | 20% | 2,671 | 2,968 | 3,265 | 90%-100%-110% |

  54. 2024 Performance Metrics for Annual Incentive Compensation

    1.Interpolation used between these points. 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 A: Non-GAAP Financial Measures” to this proxy statement. Individual Performance Objectives. The individual performance objectives may consist of growth and strategy, operational, and taking care of our people 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.

  55. 2024 Performance Metrics for Annual Incentive Compensation

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  56. 2024 Performance Achievement for Annual Incentive Compensation

    2024 Performance Achievement for Annual Incentive Compensation Company Financial Performance (75% of Incentive Opportunity). The Company’s 2024 performance in relation to the 2024 ICP targets resulted in the Company Financial Performance being achieved at 145.5% of target, as shown below.

  57. 2024 Performance Achievement for Annual Incentive Compensation

    | 2024 Company Financial Performance Achievement | | | | | | | | Performance Metric | 2024 Target (in millions) ($) | 2024 Actual Performance (in millions) ($) | % Performance Achieved (%) | ICP Performance Factor(1) (%) | Weighting (%) | Weighted Performance Factor(2) (%) | | | (a) | (b) | (c) = (b) ÷ (a) | (d) | (e) | (f) = (d) × (e) | | Adjusted EBITDA | 388 | 400 | 103 | 115 | 30 | 34.5 | | FCF | 187 | 190 | 102 | 110 | 30 | 33.0 | | Bookings | 3,280 | 4,077 | 124 | 200 | 20 | 40.0 | | Revenue | 2,968 | 3,234 | 109 | 190 | 20 | 38.0 | | Total Financial Performance Achievement(3) | | | | | 100 | 145.5 |

  58. 2024 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. 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 2024, 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 183%. Below is a summary of each NEO’s achievement toward their individual performance goals.

  59. 2024 Performance Achievement for Annual Incentive Compensation

    | William J. Lynn III | | •The strategy implemented in our four core markets of advanced sensing, network computing, force protection, and electric power and propulsion continued to yield positive results. Domestically and internationally our capture pursuits in force protection programs and electric power and propulsion have opened up new opportunities for us. We have increased our R&D funding to invest in development of improved or new technology supporting our next generation network computing programs, and our integrated sensing capabilities. Continued to expand our international business to approximately 13% of annual revenue. | | •We exceeded our financial plan across all four metrics; bookings resulted in a 1.25x book to bill ratio, revenue outperformed expectations, Adjusted EBITDA was increased year over year by 23% leading to 90 bps improvement in operating margins, and free cash flow exceeded plan with increased linearity that drove lower interest expenses. Ensured we continued to drive stockholder value by driving revenue growth through such actions as our business excellence initiatives and optimizing supply chain initiatives resulting in a 61 percent increase in share price. Through improvement in our financial forecasting tools, it allowed us to achieve all quarterly targets. | | •Strong focus on program execution with improved risk mitigation process and tools allowed us to reduce risk and discover new opportunities. Deploying new strategies to mitigate supply chain risks led to improved revenue predictability. Our APEX, operational efficiency program, continued to be successful generating savings equal to 2.6 percent of revenue, exceeding our goal of 1.5 percent. | | •We improved our employee retention rates, and we were able to grow the employee base by offering competitive wages and enhancing our benefits portfolio offerings including an employee stock purchase plan. We strengthened our internal pipeline of candidates by completing comprehensive succession planning by adding additional structured development programs, mentorship programs, and targeted training. We increased our community engagement and involvement to support the warfighters, our veterans, and the communities where we operate. Continued to foster our culture of compliance and ethical responsibility. These actions and more led us to be recognized as a Great Place to Work by our employees. |

  60. 2024 Performance Achievement for Annual Incentive Compensation

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  61. 2024 Performance Achievement for Annual Incentive Compensation

    | Michael Dippold | | •Developed financial strategy to meet or exceed commitments while enabling sufficient investment to allow for continued growth. Met quarterly commitments and continued to drive shareholder value through robust investor interactions. Led the financial team with a series of process improvements that led to improved efficiencies, financial controls, and risk management. | | •Under Mike’s leadership, the Company developed tax planning strategies to permanently reduce our effective tax rate enhancing our EPS for 2024 and beyond. | | •Assisted in developing a strategic capital allocation strategy, advising and directing capital usage in effective and efficient manners including R&D investments, instituting a combination of dividends and share buy backs, and expanding CAPEX expenditures to include investing in a new South Carolina facility to enhance our power propulsion capabilities. |

  62. 2024 Performance Achievement for Annual Incentive Compensation

    | John Baylouny | | •Produced strong bookings growth by increasing internal business collaborations and pursuits in our strategic areas, and by expanding international sales portfolio. Focused on customer priorities to expand business priorities. Launched new product and customer areas to support long-term growth. | | •Exceeded revenue growth targets by establishing specific growth goals above target for each core market area. Continued to evaluate the opportunities and risks associated with operational performance and risk mitigation planning leading to improved program performance and customer satisfaction. | | •Continued to focus on executive leadership development to build leadership strength in our core team. Conducted leadership assessments for key leaders within the business to build readiness for new opportunities with our continued expansion, succession planning, and retention of talent. |

  63. 2024 Performance Achievement for Annual Incentive Compensation

    | Mark Dorfman | | •Provided exceptional advice and counsel to our senior leadership, Board, and other DRS employees on matters of great strategic and operational significance. | | •Developed and implemented a strategy that reduced risk and exposure on active and potential legal matters and drove increased oversight and improvement of our risk assessment, contracting and compliance and ethics programs. Introduced toolkits, forms, tailored training, and tracking of key metrics and functional maturity, implemented a new compliance training suite, improved compliance with robust quarterly ethics and compliance reviews, and cultivated a culture that empowered employees to raise issues or questions early and often. | | •Continued to improve our overall governance, compliance, and oversight practices by seeking continuous improvement in already highly functioning areas. Directed the review and updated essentially all corporate policies and procedures including our corporate approval policy. Accelerated the growth of our international portfolio in a complex geopolitical environment, with enhanced compliance procedures, use of automation and other tools. Worked to better align our corporate control environment to the Company’s risk profile and business priorities. Added additional oversight and direction that led to enhanced worker safety, improved cyber governance, and more robust physical and industrial security practices. |

  64. 2024 Performance Achievement for Annual Incentive Compensation

    | Sally Wallace | | •Improved our supplier strategic initiatives by standardizing suppliers across the business portfolio and introducing new tools to drive enhanced supplier performance and reduce delivery risk. Introduced a new supply chain enterprise dashboard scorecard, a new supplier quality DataMart, and implemented price agreements focused on top new suppliers for more effective and consistent pricing. Led efforts to develop supply chain talent with training and mentorship program. | | •Drove business excellence across functions to improve efficiency by standardizing and automating metrics and financial visibility in deploying power BI, cross business cooperations, and use of new automated tools, i.e. one stream. Developed program assessment reporting to validate effective EAC process across the business, focus on risk and opportunity management and the correlation to MR on program. Leading these efforts resulted in large savings with a 11 percent increase over last year. | | •Led the effort to provide next level strategic planning analysis by introducing an improved model to allow for direct linkage between strategic planning and FOP planning to facilitate enhanced analysis of our strategic plans and associated risks. Reinstituted the program management working group resulting in specific standardization targets and development of three internal training modules to improve collaboration and program execution leading to mitigation of risk and increased customer satisfaction. |

  65. 2024 Performance Achievement for Annual Incentive Compensation

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  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 high-performing and experienced leaders who will contribute to the Company’s long-term success, focus on achievement of specific long-term financial performance goals aligned with our operating and strategic plans, and provide participants, including our NEOs, with a direct financial interest in the Company’s long-term growth and performance. The Compensation Committee approves our NEOs’ equity awards, which are granted under the ECP (last approved by our stockholders in 2024).

  67. 2024 Equity Award Design under the ECP

    2024 Equity Award Design under the ECP 2024 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 2024 ECP, the target opportunity for each NEO was as follows: $4,100,000 for Mr. Lynn, $880,000 for Mr. Dippold, $1,075,000 for Mr. Baylouny, $616,000 for Mr. Dorfman and $560,000 for 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 2024 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. 2024 ECP Components. •RSUs. RSUs represent one-half of the 2024 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 2024 target ECP value and are intended to motivate participants to consistently deliver strong performance. The PRSU portion of our 2024 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. 2024 Equity Award Design under the ECP

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  69. 2024 ECP Performance Metrics

    2024 ECP Performance Metrics The PRSUs granted in 2024 will be earned based on three performance metrics as described in the below table.

  70. 2024 ECP Performance Metrics

    | Metric | Weighting | Background, Definition and Rationale | | Relative Total Shareholder Return (TSR) | 40% of PRSU award | •Measured by using the Comparison Group of the companies that comprise the S&P Aerospace and Defense Select Index Fund at the beginning of the performance period, January 1, 2024. The Comparison Group becomes a fixed group and will be used as the basis for the percentile ranking. The rTSR calculation includes stock price appreciation and the dividends for the Company, and for each company in the Comparison Group. The rTSR will be measured at the end of the performance period, December 31, 2026, and will be determined by dividing the ending stock price of a share of common stock (adjusted for dividends reinvested during the cycle) by the beginning stock price. Both beginning and ending stock prices will be measured over a 60-day average. After the rTSR calculation is completed, each company in the Comparison Group is ranked in descending order, and the Company’s rTSR calculation will be measured against the Comparison Group to determine the Company’s percentile ranking. •Focuses alignment of executive pay with shareholder value creation, and encourages market competitive performance amongst peers. | | 3-year Average Adjusted Diluted Earnings Per Share (EPS) | 40% of PRSU award | •Measured over the performance period, January 1, 2024 through December 31, 2026, and will be calculated by excluding deal-related transaction costs, amortization of acquired intangible assets, restructuring costs, other non-operating expenses such as foreign exchange, non-service pension expenditures, legal liability accrual reversals, and other one-time non-operational events offset by the tax effect of such adjustments, as well as gains (losses) on business disposals (net of tax) from our net earnings and dividing by the diluted weighted average number of shares outstanding to arrive at adjusted diluted EPS. Aligns executive pay with value creation for our stockholders relative to our peers. •Encourages sustainable growth by aligning executive decision making and long-term shareholder value creation. | | 3-year Average Return on Invested Capital (ROIC) | 20% of PRSU award | •Measured over the three-year performance period, January 1, 2024 through December 31, 2026, and will be 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, ensures executive focus on profitability and capital efficiency, and along with EPS and rTSR ensures a balanced, strategic approach to executive compensation. |

  71. 2024 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 Net earnings generated from acquisitions in the year of purchase. “Invested Capital” is defined as equity plus net debt (inclusive of lease debt), excluding invested capital generated from acquisitions in the year of purchase. The 2024 ECP financial performance metrics and the target for each metric were approved by the Compensation Committee in early 2024. 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 2024 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 2024 ECP awards, see the “2024 Grants of Plan-Based Awards Table” below and corresponding narrative disclosure.

  72. 2024 ECP Performance Metrics

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  73. 2022 PRSU Performance Results and Payment

    2022 PRSU Performance Results and Payment The PRSUs granted to the NEOs in 2022 were eligible to vest based on the Company attaining certain levels of relative TSR (measured from November 29, 2022 through December 31, 2024), 3-year Revenue Growth and 3-year Average ROIC during the 2022-2024 performance period, generally subject to the NEO’s continued service through March 15, 2025. The NEOs’ PRSUs vested on March 15, 2025, based on the Company’s achievement of the Company performance metrics at 164.42% of target for the 2022-2024 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.

  74. 2022 PRSU Performance Results and Payment

    | | 2022 - 2024 Company Performance Targets by Threshold | | | Performance Payout Threshold (interpolation used between these points) (%) | | Performance Threshold | Relative TSR (40% Weighting) (percentile) | 3-Year Revenue Growth (30% Weighting) (%) | 3-Year Average ROIC (30% Weighting) (%) | | | Minimum | 40th Percentile | 2.7 percent | 12.5 percent | 50% of Target | | Target | 60th Percentile | 4.7 percent | 14.0 percent | 100% of Target | | Maximum | 80th Percentile | 7.7 percent | 15.5 percent | 200% of Target |

  75. 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.

  76. Policies and Practices Related to the Grant of Certain Equity Awards

    Policies and Practices Related to the Grant of Certain Equity Awards We do not time the grant of equity awards in coordination with the release of material non-public information, and the release of material non-public information is not timed on the basis option or of equity grant dates. Our equity awards are granted under a stockholder-approved plan and we do not currently grant stock options. Equity awards are generally approved on the dates of our regularly scheduled Compensation Committee meetings and are effective as of such dates or specified prospective dates. Outside of the annual grant cycle, we may make equity award grants in connection with a new hire package or retention grant.

  77. 2024 Summary Compensation Table

    2024 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 2024 Summary Compensation Table generally explain amounts reported for 2024, unless otherwise noted.

  78. 2024 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 Chairman and CEO | 2024 | 1,157,249 | 4,395,296 | 2,209,800 | — | 112,626 | 7,874,971 | | | 2023 | 1,160,428 | 4,410,599 | 5,137,726 | — | 112,826 | 10,821,579 | | | 2022 | 1,160,428 | 5,881,020 | 3,905,700 | — | 103,130 | 11,050,279 | | Michael Dippold Executive Vice President, CFO | 2024 | 526,747 | 943,375 | 632,600 | — | 58,554 | 2,161,276 | | | 2023 | 512,346 | 985,609 | 1,273,434 | — | 57,819 | 2,829,209 | | | 2022 | 493,901 | 1,351,936 | 969,100 | — | 52,885 | 2,867,822 | | John Baylouny Executive Vice President, COO | 2024 | 589,341 | 1,152,440 | 754,900 | — | 58,671 | 2,555,352 | | | 2023 | 573,165 | 1,201,221 | 1,535,550 | — | 59,873 | 3,369,809 | | | 2022 | 550,900 | 1,664,807 | 1,170,700 | — | 53,779 | 3,440,186 | | Mark Dorfman Executive Vice President General Counsel & Secretary | 2024 | 479,137 | 660,379 | 538,100 | — | 58,443 | 1,736,059 | | | 2023 | 462,550 | 689,924 | 982,954 | — | 57,491 | 2,192,918 | | | 2022 | 446,209 | 1,037,649 | 712,200 | — | 52,010 | 2,248,069 | | Sally Wallace Executive Vice President, Operations | 2024 | 486,950 | 600,324 | 493,300 | — | 57,842 | 1,638,417 | | | 2023 | 474,205 | 689,924 | 937,754 | 39,512 | 57,011 | 2,198,407 | | | 2022 | 456,681 | 777,480 | 684,300 | — | 52,208 | 1,970,670 |

  79. 2024 Summary Compensation Table

    1.Reflects the aggregate grant date fair value of awards of RSUs and PRSUs awarded under the ECP in 2024, 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 2024 Annual Report. The value of the portion of the 2024 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 2024 PRSUs with market-based vesting conditions reported in the Stock Awards column is based on a Monte Carlo simulation. For all PRSUs awarded in 2024, the aggregate values achievable assuming the performance or market-based vesting conditions will be achieved at the highest level are $6,741,550 for Mr. Lynn, $1,446,957 for Mr. Dippold, $1,767,625 for Mr. Baylouny, $1,012,906 for Mr. Dorfman, and $920,782 for Ms. Wallace. These amounts do not reflect the actual value that will be realized by our NEOs. Amounts reported for 2023 in the Stock Awards and Total columns have been updated to correct a miscalculation. 2.The amounts in this column reflect the annual incentive cash awards earned under the Company’s ICP for 2024. See “Compensation Discussion and Analysis—Components of Compensation Program—Annual Incentive Compensation” above for a description of this program. 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.

  80. 2024 Summary Compensation Table

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  81. 2024 Summary Compensation Table

    4.The amounts shown in the “All Other Compensation” column for 2024 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.

  82. 2024 Grants of Plan-Based Awards Table

    2024 Grants of Plan-Based Awards Table The following table provides additional information about plan-based compensation disclosed in the 2024 Summary Compensation Table. This table includes equity and non-equity awards granted during 2024.

  83. 2024 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) | | 694,349 | 1,388,699 | 2,777,398 | | | | | | | (3) | 4/16/2024 | | | | 47,630 | 95,260 | 190,520 | | 2,346,254 | | (3) | 4/16/2024 | | | | | | | 95,260 | 2,049,043 | | Michael Dippold | | | | | | | | | | | (2) | | 198,750 | 397,500 | 795,000 | | | | | | | (3) | 4/16/2024 | | | | 10,223 | 20,446 | 40,892 | | 503,582 | | (3) | 4/16/2024 | | | | | | | 20,446 | 439,793 | | John Baylouny | | | | | | | | | | | (2) | | 237,200 | 474,400 | 948,800 | | | | | | | (3) | 4/16/2024 | | | | 12,489 | 24,977 | 49,954 | | 615,185 | | (3) | 4/16/2024 | | | | | | | 24,977 | 537,255 | | Mark Dorfman | | | | | | | | | | | (2) | | 169,050 | 338,100 | 676,200 | | | | | | | (3) | 4/16/2024 | | | | 7,157 | 14,313 | 28,626 | | 352,528 | | (3) | 4/16/2024 | | | | | | | 14,312 | 307,851 |

  84. 2024 Grants of Plan-Based Awards Table

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  85. 2024 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 (#) | | | | Sally Wallace | | | | | | | | | | | (2) | | 159,250 | 318,500 | 637,000 | | | | | | | (3) | 4/16/2024 | | | | 6,506 | 13,011 | 26,022 | | 320,458 | | (3) | 4/16/2024 | | | | | | | 13,011 | 279,867 |

  86. 2024 Grants of Plan-Based Awards Table

    1.The amounts reported in this column for 2024 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 2024 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 50%, 100%, and 200%, respectively, of the annual total incentive award opportunity for each NEO. 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 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.

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

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

  88. 2024 Outstanding Equity Awards At Fiscal Year-End

    2024 Outstanding Equity Awards At Fiscal Year-End The following table shows outstanding equity awards as of December 31, 2024 for each NEO.

  89. 2024 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 | 5/8/2024 | 95,260 | 3,077,851(3) | 95,260 | 6,155,701(5) | | | 4/18/2023 | 92,722 | 2,995,848(3) | 139,083 | 8,987,543(6) | | | 11/29/2022 | 60,452 | 1,953,204(3) | | | | | 11/29/2022 | 181,358 | 9,634,481(4) | | | | Michael Dippold | 5/8/2024 | 20,446 | 660,610(3) | 20,446 | 1,321,221(5) | | | 4/18/2023 | 20,720 | 669,463(3) | 31,080 | 2,008,390(6) | | | 11/29/2022 | 13,509 | 436,476(3) | | | | | 11/29/2022 | 40,527 | 2,152,960(4) | | | | John Baylouny | 5/8/2024 | 24,977 | 807,007(3) | 24,977 | 1,614,014(5) | | | 4/18/2023 | 25,253 | 815,924(3) | 37,879 | 2,447,741 (6) | | | 11/29/2022 | 16,465 | 531,984(3) | | | | | 11/29/2022 | 49,393 | 2,623,959(4) | | | | Mark Dorfman | 5/8/2024 | 14,312 | 462,421(3) | 14,313 | 924,906(5) | | | 4/18/2023 | 14,504 | 468,624(3) | 21,756 | 1,405,873(6) | | | 11/29/2022 | 9,457 | 305,556(3) | | | | | 11/29/2022 | 28,369 | 1,507,078(4) | | |

  90. 2024 Outstanding Equity Awards At Fiscal Year-End

    | Leonardo DRS | 52 | 2025 Proxy Statement |

  91. 2024 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) | | Sally Wallace | 5/8/2024 | 13,011 | 420,385(3) | 13,011 | 840,771(5) | | | 4/18/2023 | 14,504 | 468,624(3) | 21,756 | 1,405,873(6) | | | 11/29/2022 | 9,457 | 305,556(3) | | | | | 11/29/2022 | 28,369 | 1,507,078(4) | | |

  92. 2024 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 $32.31, the closing price of one share of Company common stock on the last trading day of the year (December 31, 2024). 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 awards of PRSUs shown at actual performance that cliff vested on March 15, 2025. 5.These amounts represent outstanding awards of PRSUs at maximum that cliff vest on April 1, 2027, generally subject to an NEO’s continued service through the applicable vesting date and the Company achieving the relative TSR, Average Adjusted Diluted EPS and Average ROIC performance conditions during the 2024-2026 performance period. In calculating the number of PRSUs and their value, we are required by SEC rules to compare our performance through 2024 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. 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 2024 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.

  93. 2024 Option Exercises And Stock Vested

    2024 Option Exercises And Stock Vested The following table sets forth the stock awards that vested for each NEO during 2024. None of the NEOs have received or exercised options in 2024.

  94. 2024 Option Exercises And Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | William J. Lynn III | 463,958 | 14,743,738 | | Michael Dippold | 109,584 | 3,500,050 | | John Baylouny | 136,234 | 4,358,823 | | Mark Dorfman | 90,955 | 2,946,770 | | Sally Wallace | 50,280 | 1,531,110 |

  95. 2024 Option Exercises And Stock Vested

    | Leonardo DRS | 53 | 2025 Proxy Statement |

  96. 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, as of December 31, 2024. No other NEOs participate in a defined benefit pension.

  97. Pension Benefits as of December 31, 2024

    Pension Benefits as of December 31, 2024

  98. Pension Benefits as of December 31, 2024

    | 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 | 465,107 | — |

  99. Pension Benefits as of December 31, 2024

    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, 2024 is $465,107, which is based on a discount rate of 5.44% and the PRI-2012 mortality table projected using MP-2021 with white collar adjustment. The PVAB for Ms. Wallace as of December 31, 2023 was $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 change in Ms. Wallace’s PVAB is a decrease of $29,041, which was caused 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.

  100. 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.”

  101. 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, 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, 2024. Values of accelerated equity awards are based on the closing price of our common stock on December 31, 2024, which was $32.31. The actual amounts due to any one of the NEOs upon termination of 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, 2024” table above.

  102. Potential Payments Upon Termination or Change in Control

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  103. 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 | 146,023 | 21,458,202 | 29,357,793 | | | •Involuntary Termination without Cause or Termination due to Material Breach by the Company | 7,753,568 | 87,614 | 17,908,378 | 25,749,560 | | | •Retirement | 2,209,800 | 87,614 | 9,881,475 | 12,178,889 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 2,209,800 | — | 21,458,202 | 23,668,002 | | Michael Dippold | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,716,250 | 87,655 | 4,740,782 | 7,544,687 | | | •Involuntary Termination without Cause | 1,192,500 | 52,593 | — | 1,245,093 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 632,600 | — | 4,740,782 | 5,373,382 | | John Baylouny | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 3,142,900 | 61,688 | 5,781,681 | 8,986,268 | | | •Involuntary Termination without Cause | 1,363,900 | 37,013 | — | 1,400,913 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 754,900 | — | 5,781,681 | 6,536,581 | | Mark Dorfman | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,390,850 | 87,655 | 3,318,592 | 5,797,097 | | | •Involuntary Termination without Cause | 1,062,600 | 52,593 | — | 1,115,193 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 538,100 | — | 3,318,592 | 3,856,692 | | Sally Wallace | •Involuntary Termination without Cause (or for Good Reason) With Change in Control | 2,339,750 | 51,008 | 3,234,489 | 5,625,247 | | | •Involuntary Termination without Cause | 1,053,500 | 30,605 | — | 1,084,105 | | | •Voluntary Termination (or Involuntary Termination for Cause) | — | — | — | — | | | •Disability or Death | 493,300 | — | 3,234,489 | 3,727,789 |

  104. 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. 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 ECP equity awards (using the Company’s closing share price of $32.31 as of December 31, 2024, the last trading day of the year). The treatment of termination payments for equity awards under the ECP is outlined in the narrative descriptions below.

  105. Potential Payments Upon Termination or Change in Control

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  106. 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.

  107. 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 2024:

  108. CEO Pay Ratio

    | Median Employee total annual compensation | $88,177 | | Total Compensation of our CEO | $7,874,971 | | Ratio of CEO to Median Employee compensation | 89 to 1 |

  109. 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: •As permitted by SEC rules, we used the same median employee for purposes of this disclosure as was used in the proxy statement for our 2024 annual meeting of stockholders. There has been no change in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio disclosure in this proxy statement. •We combined all of the elements of the median employee’s compensation for the 2024 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $88,177. •With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2024 Summary Compensation Table included in this proxy statement.

  110. CEO Pay Ratio

    | Leonardo DRS | 58 | 2025 Proxy Statement |

  111. Pay Versus Performance Disclosure

    Pay Versus Performance Disclosure

  112. 2024 Pay Versus Performance Table

    2024 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.

  113. 2024 Pay Versus Performance Table

    | | SCT Total for PEO ($)(2) | Compensation Actually Paid to PEO ($)(3) | Average SCT Total for Non-PEO Named Executive Officers ($)(2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(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) | | 2024 | 7,874,971 | 26,193,985 | 2,022,776 | 5,741,640 | 294 | 157 | 213 | 400 | | 2023 | 10,821,579 | 19,073,744 | 2,647,586 | 4,326,150 | 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 | 1,361,792 | n/a | n/a | 84 | 85 |

  114. 2024 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.Reflects the SCT “Total Compensation” for our PEO and the average SCT “Total Compensation” of each of the non-PEO NEOs (determined as set forth below). Amounts reported for 2023 have been updated to correct a miscalculation. 3.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. Amount reported for 2020 has been updated to correct a miscalculation. 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, 2024. 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 2024 Annual Report, the S&P Aerospace & Defense Select Industry Index. 5.Adjusted EBITDA is a non-GAAP financial measure. For more information, see “Appendix A: 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:

  115. Narrative to the 2024 Pay Versus Performance Table

    Narrative to the 2024 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.

  116. 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. 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.

  117. Board of Directors

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  118. Board of Directors

    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.