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Item 9A. Controls and Procedures

2023-03-28 compared with 2022-03-28 · 65 added, 1320 removed, 66 unchanged (95% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level.

However, management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As required by Rule 13a-15 under the Securities Exchange Act of 1934 , our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of December 31, 2022 and determined these disclosure controls and procedures are effective to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

The Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022.

This assessment was based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 framework).

Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

Due to the inherent limitations, internal control systems can provide only reasonable assurance with respect to financial statement preparation and presentation, and may not prevent or detect financial statement misstatements.

Also, projections of any evaluation of internal control effectiveness to future periods are subject to the risk that existing controls may become inadequate because of changing conditions, or that the degree of compliance with existing policies and procedures may deteriorate.

Management has excluded from the scope of its assessment of the effectiveness of internal control over financial reporting as of December 31, 2022, the operations and related assets acquired in the RADA merger (the “Acquired Company”), which were acquired on November 28, 2022.

The Acquired Company’s total assets and total sales represented approximately 8% and 0.5% of the Company's respective consolidated total assets and total sales as of and for the year ended December 31, 2022.

Changes in Internal Control over Financial Reporting

As the result of the RADA transaction, the Company added Business Combination and Stock Compensations controls into the overall internal controls framework in Q4.

Other than these additions, there were no changes in our internal control over financial reporting identified in connection with the

evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

2 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth certain information concerning our directors and executive officers.

The respective age of each individual in the table below is as of December 31, 2021.

Name Age Position

Lynn III 68 Chief Executive Officer and Chairman

Carey* 77 Lead Independent Director

General George W.

(Ret.) 73 Director

Krieg* 61 Director

Marino* 80 Director

Odeen* 86 Director

Townsend* 60 Director

Gail Baker 60 Director

Gallagher 56 Director

Baylouny 60 Executive Vice President, Chief Operating Officer

Dippold 41 Executive Vice President, Chief Financial Officer

Dorfman 48 Executive Vice President, General Counsel & Secretary

Wallace 55 Executive Vice President, Business Operations

________________

* Proxy holder.

See Part III.

“Certain Relationships and Related Transactions and Director Independence—Relationship with Leonardo S.p.A.—Proxy Agreement” in this Annual Report.

Lynn has been a director since 2012 and has been our Chief Executive Officer since January 2012.

Lynn also serves as chairman of our board.

Prior to joining DRS in January 2012, Mr.

Lynn served as the 30th United States Deputy Secretary of Defense from 2009 to 2011.

From 2002 to 2009, Mr.

Lynn was Senior Vice President of Government Operations and Strategy at the Raytheon Company.

In this position, he directed strategic planning, oversaw merger and acquisition activities and supervised government relations.

Previously, he served as the Chief Financial Officer and Under Secretary of Defense (Comptroller) from 1997 to 2001.

From 1993 to 1997, he led strategic planning for DoD as Director of Program Analysis and Evaluation.

Lynn worked for Senator Ted Kennedy as counsel to the Senate Armed Services Committee from 1987 to 1993.

Lynn is a member of the boards of Accenture Federal Services, the United Service Organizations, the Atlantic Council, the Marshall Legacy Institute and the Center for a New American Security.

He has been recognized for numerous professional and service contributions, including four DoD Distinguished Public Service medals and the Distinguished Civilian Service Award from the Chairman of the Joint Chiefs of Staff.

A graduate of Dartmouth College, Mr.

Lynn holds a law degree from Cornell Law School and a master’s degree from the Princeton School of Public and International Affairs.

Lynn brings to the board his extensive experience in national security, both in government and in industry.

Carey has been a director since 2009, and a member of our Audit Committee since 2012.

Carey also serves as lead independent director.

Since 2008, Mr.

Carey has operated a consulting practice providing business development and strategic advice to U.S.

and foreign firms engaged in defense and intelligence electronics.

From 2005 to 2008, he was an Executive Director with Blackbird Technologies Inc., and from 2001 to 2005 served as Vice President, Information Assurance for Oracle Corporation where he built and directed Oracle’s Information Assurance Center.

Prior to 2001, Mr.

Carey held several senior positions during a 32-year career at the Central Intelligence Agency including serving as Executive Director.

In this capacity, he oversaw all of the Agency’s strategic planning, budgetary, procurement, financial, logistics and research and development activities as well as day-to-day operations.

In addition to serving on the board of DRS, Mr.

Carey serves on the boards of OnPoint Consulting, Inc., Informatica Federal Operations Corp., and the CIA Officers Memorial Foundation Board.

He previously served on the boards of ImageWare Systems, Inc.

from 2006 to 2020 and Qinetiq North America from 2014 to 2019, and on the advisory board of Recorded Future Inc.

from 2011 to 2019.

Carey is a graduate of Cornell University and the University of Delaware.

We consider Mr.

Carey’s experience in key operational and leadership positions dealing with critical national security threats and challenges as a significant asset to our board.

Carey is a proxy holder and was appointed to our board in accordance with the proxy agreement.

General George W.

Casey has been a director since 2020.

Casey is a published author, and currently serves as a Distinguished Senior Lecturer of Leadership at the SC Johnson College of Business, Cornell University, and as the Rice Family Professor of Practice at the Korbel School, University of Denver.

He has lectured on leadership internationally at business schools and to numerous organizations, including Coca-Cola, Caterpillar, the National Australian Bank, Amazon, TDAmeritrade, Pentagon Federal Credit Union and General Electric.

Before joining DRS, Gen.

Casey served 41-years in the U.S.

Army including from 2007 to 2011 as the 36th Chief of Staff of the U.S.

Army where he led arguably the world’s largest and most complex organization with over 1.1 million personnel and an annual budget of over $200 billion.

From 2004 to 2007 he commanded the Multi-National Force – Iraq, a coalition of more than 30 countries, and in that role worked to build-up Iraqi security institutions while battling an insurgency and sectarian violence.

Casey also serves as the Chairman of the Board of Governors of the United Service Organizations, and serves as a member of the board of CZ-US Holdings, the Ross Initiative in Sports for Equality, and the Center for Global Development.

In addition, he serves as a member of the board of advisors for Streetshares, RallyPoint, Techwerks and Sarcos.

Casey holds a master’s degree in international relations from Denver University.

Casey brings to the board a deep knowledge of the military and a demonstrated history of leadership in the armed forces, academia, the non-profit sector and industry.

Krieg has been a director since 2008.

Krieg serves as the head of Samford Global Strategies, an advisory and consulting practice which he founded in 2007.

Since 2010, Mr.

Krieg has also held the position of Executive in Residence with Renaissance Strategic Advisors, one of the leading consultancies supporting premier firms in the aerospace, defense, space, intelligence and government services industry.

From 2001 to 2007, Mr.

Krieg served in several positions within the DoD, including as the Undersecretary of Defense for Acquisition, Technology and Logistics from 2005 to 2007 where he had overall responsibility for the DoD’s procurement, research and development programs.

Prior to joining the DoD, he spent 11 years working for the International Paper Company, most recently as Vice President and General Manager of the Office and Consumer Papers Division.

Krieg currently serves as lead independent director with BWX Technologies, Inc.

and also serves as a member of the board of Sparton Corporation.

He has previously served on the boards of Tempus Applied Solutions Holdings, Inc., API Technologies Corp.

and Logistics Management Institute.

Krieg has a bachelor of arts degree in history from Davidson College and a master’s degree in public policy from the Kennedy School of Government at Harvard University.

Krieg has significant experience overseeing major research, development and procurement programs for the DoD.

His background provides our board with valuable insight into acquisition priorities and considerations of the U.S.

government and he has significant experience in FOCI mitigation and public company governance.

Krieg is a proxy holder and was appointed to our board in accordance with the proxy agreement.

Marino has been a director, chair of our Government Security Committee and member of our Audit Committee since 2012.

Since 1999, Mr.

Marino has operated a sole proprietorship as a private consultant for government and industry on defense and intelligence issues.

His clients have included the DoD, Department of Homeland Security, CIA, the Director of National Intelligence and both small and large defense and aerospace companies.

From 1996 to 1999, he was CEO and President of Firearms Training Systems, from 1991 to 1996 was Senior VP E-Systems, Inc., from 1988 to 1991 was President and Chief Operating Officer of Fairchild Industries, Inc., and from 1986 to 1988 was President and Chief Operating Office of Lockheed Electronics.

Prior to that, Mr.

Marino served in several positions with the CIA from technical officer and manager responsible for the design of electronic, mechanical and communications equipment, to senior executive official with responsibility for the support of worldwide technical operations of people and equipment for the Directorate of Operations.

Marino currently serves on the boards of QTS Realty Trust, Inc., System & Technology Research, Inmarsat US and RADA Electronic Industries Ltd., as well as several government and non-profit advisory boards.

He previously served on the board of Engility Corporation from 2015 to 2018.

Marino has a bachelor of science degree in physics from Rollins College, and a master’s degree from Pennsylvania State University.

He also previously served as a Senior Executive Fellow at Harvard University.

Marino’s broad experience in leadership roles in the defense industry and intelligence community help

him bring a valuable perspective to our board.

Marino is a proxy holder and was appointed to our board in accordance with the proxy agreement.

Odeen has been a director since 2012.

Prior to joining DRS, Mr.

Odeen served as a director for numerous public companies including Booz Allen Hamilton, from 2008 to 2019, ASC Signal Corporation, from 2009 to 2015, AES Corporation from 2003 to 2013, and Northrop Grumman from 2003 to 2008.

From 2005 to 2006, Mr.

Odeen served as CEO of Qinetic North America, and from 2004 to 2005 was Chairman and CEO of Reynolds & Reynolds, a provider of software and management services to automotive retailers.

Odeen also held several positions from 1997 to 2002 with TRW Inc.

including serving as Chairman and CEO.

Odeen previously served as a senior official with the Office of the Secretary of Defense and the National Security Council.

He is a former member of the Defense Science Board, the Defense Business Board and the Chief of Naval Operations Executive Panel.

In addition to serving on the board of DRS, Mr.

Odeen currently serves as a director with Globant, an international information technology and software development company.

Odeen received a bachelor of arts degree in government from the University of South Dakota, is a Fulbright scholar, and earned a master’s degree from the University of Wisconsin.

Odeen provides invaluable guidance to our board from his decades of experience in leadership positions across industry and government.

Odeen is a proxy holder and was appointed to our board in accordance with the proxy agreement.

Townsend has been a director and chair of our Compensation Committee since 2009.

Presently, she is working as the EVP of Corporate Affairs, Corporate Secretary and Chief Compliance Officer at Activision Blizzard.

From 2010-2020, Ms.

Townsend worked at MacAndrews & Forbes Inc.

and concluded her tenure there as Vice Chairman, General Counsel and Chief Administrative Officer.

Before that she was Executive Vice President for Worldwide Government, Legal and Business Affairs working across MacAndrew’s portfolio companies focusing on international, legal, compliance and business development issues.

Since 2016, Ms.

Townsend has also been an on-air senior national security analyst for CBS News.

From April 2009 to October 2010, Ms.

Townsend was a corporate partner with the law firm of Baker Botts, LLP.

Prior to that, Ms.

Townsend served as Assistant to President George W.

Bush for Homeland Security and Counterterrorism and chaired the Homeland Security Council from 2004 to 2008.

She also served as Deputy National Security Advisor for Combatting Terrorism from May 2003 to May 2004.

Townsend also spent 13 years at the U.S.

Department of Justice under the administrations of President George H.

Bush, President Bill Clinton and President George W.

Townsend currently serves as a director with Chubb Limited, and Freeport-McMoRan Inc.

She previously served on the boards of SciPlay Corporation (2019 to 2020), Scientific Games Corporation (2010 to 2020), and Western Union (2013 to 2020).

Townsend 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 New York City Police Foundation.

Townsend received a bachelor of arts degree in political science and a bachelor of science degree in psychology from American University.

She also received a juris doctor degree from the University of San Diego School of Law.

Townsend brings to our board a deep understanding of national security issues and broad experience providing strategic advice in law, business and government.

Townsend is a proxy holder and was appointed to our board in accordance with the proxy agreement.

Baker has been a member of our board since April 2021.

Baker served as the President, Aftermarket services for Collins Aerospace from 2019 until her retirement in 2020.

In this role, she led the worldwide commercial and military aftermarket business and customer service organizations, and her responsibilities included customer-tailored solutions, long-term aftermarket programs, spares planning and delivery, asset management, technical and strategic planning and management of 14 global

maintenance, repair and overhaul facilities.

From 2017 to 2019, Ms.

Baker served as the President, Intelligence, Surveillance, Reconnaissance and Space Systems at Collins Aerospace.

From 2015 to 2017, she served as the Vice President, Air Management Systems, European Entities and Aftermarket for UTC Aerospace Systems, a predecessor of Collins Aerospace.

From 2011 to 2015 she also served as the President, Aerospace Customers and Business Development for UTC Aerospace Systems.

Prior to that she held executive roles in engineering and customer management.

Baker is the executive chair for the audit committee on the board of directors for the Hartford Bishops Foundation, Inc., a non-profit entity providing services throughout Hartford, New Haven and Litchfield Counties in Connecticut.

Baker received her bachelor’s degree in mechanical engineering from Worcester Polytechnic Institute and a master’s degree in mechanical engineering from Rensselaer Polytechnic Institute.

Baker brings to the board valuable experience in key business and operational leadership roles within the defense industry.

Gallagher has been a member of our board since April 2021.

Gallagher served as Chief Financial Officer for Wheels Up, a membership-based private aviation company, from 2016 to 2018.

From 2004 to 2016, Ms.

Gallagher held a variety of top financial roles at United Technologies Corporation (now Raytheon Technologies Corporation), a global leader in aerospace and building technologies, most recently serving as Chief Financial Officer of Sikorsky Aircraft from November 2013 through June 2016.

From 1996 to 2004, Ms.

Gallagher served as the Vice President Controller and Chief Accounting Officer of Olin Corporation, a global manufacturer and distributor of chemical products and a leading U.S.

manufacturer of ammunition.

Prior to joining Olin, Ms.

Gallagher spent nine years with KPMG in various positions in the audit, mergers/acquisitions, consulting and training groups.

Gallagher also serves as a director of Novaria Group, and as a director and Chair of the audit committee for both American Outdoor Brands and IronNet, Inc.

Gallagher graduated from the University of Vermont in 1987 with a bachelor’s degree in accounting and earned her masters of business administration from the Massachusetts Institute of Technology in 2008.

Gallagher is a Certified Public Accountant in New York, with extensive financial leadership roles and knowledge within the defense industry.

Executive Officers

The current executive officers (other than our chief executive officer, whose biography is included above in the directors information) are as follows:

Baylouny has been our Executive Vice President and Chief Operating Officer since October 2018.

In that role, Mr.

Baylouny is responsible for overseeing the business operations and technical strategy of the Company.

He is also currently the chairman of the AAC joint venture management committee.

Prior to assuming the position of Chief Operating Officer, Mr.

Baylouny served as our Chief Technology Officer from January 2017 to October 2018.

Prior to that, Mr.

Baylouny served as Vice President and General Manager of the Company’s Land Systems and Advanced ISR businesses from January 2014 to January 2017, among other leadership roles.

Baylouny has more than 30 years of experience in the aerospace and defense industry with diverse experience in operational responsibility, general management, technology, product and system design and development, and program management.

Baylouny has a master’s degree in electrical engineering from Stevens Institute of Technology, and a bachelor of science degree in electrical engineering from Fairleigh Dickinson University.

Michael Dippold has been our Executive Vice President and Chief Financial Officer since January 2017.

As the Chief Financial Officer, Mr.

Dippold is responsible for overseeing our financial activities and operations, controllership, treasury functions, and economic and business-related strategies.

In addition, he is currently treasurer of AAC.

Throughout his fifteen years at DRS, Mr.

Dippold has held a variety of roles of increasing responsibility.

Prior to assuming the position of CFO, Mr.

Dippold served as Senior Vice President, Corporate Controller from December 2015 to January 2017, and Vice President, Assistant Controller from December 2010 to December 2015.

Prior to joining DRS in 2006, Mr.

Dippold spent three years at KPMG where he worked primarily on defense industry client accounts, including DRS.

Dippold received a bachelor of science degree in accounting from Pennsylvania State University.

Dorfman has been our Executive Vice President, General Counsel and Secretary since February 2011.

Dorfman is responsible for providing advice and counsel to the Company’s board of directors and executive leadership of the Company on legal and business matters.

As the Company’s chief legal officer, Mr.

Dorfman oversees the Company's legal and regulatory affairs, including transactions, litigation, corporate governance, internal audit, contracts, insurance, intellectual property protection, and ethics and compliance programs (including environmental health and safety, international trade, and industrial and cyber security).

Dorfman joined the Company in 2005 as corporate counsel and was promoted multiple times between 2006 and 2011 to his current executive leadership position.

Prior to assuming the position of Executive Vice President, General Counsel and Secretary, Mr.

Dorfman served as Senior Vice President, General Counsel and Secretary from December 2009 to February 2011;

Vice President, Corporate Counsel from March 2006 to December 2009;

and Corporate Counsel from September 2005 to March 2006.

Prior to joining DRS, from 1999 to 2005, Mr.

Dorfman was a corporate attorney first at Chadbourne & Parke and then Lowenstein Sandler PC, where his practice included representation of corporate and other clients in connection with mergers and acquisitions, divestitures, public and private securities offerings, joint ventures and other complex transactions and providing advice and counsel on a variety of matters, including securities law and corporate governance.

Dorfman holds a bachelor of arts degree in political science from Emory University and a juris doctor degree from New York University School of Law.

Wallace has been our Executive Vice President, Operations since December 2016.

As EVP Operations, Ms.

Wallace is responsible for overseeing the policies and standards required for effective program execution.

Wallace has more than 30 years’ experience, in roles of increasing responsibility, within the defense industry.

Prior to assuming the position of Executive Vice President, Operations, Ms.

Wallace was President of the C4ISR Group within DRS from April 2014 to December 2016, Vice President of Business Operations for DRS Maritime and Combat Support Systems Group from July 2008 to April 2014, as well as the Vice President and General Manager of DRS Power and Control Technologies from 2004 to July 2008.

Wallace has a master’s degree in business from the University of Chicago, a master’s degree in mechanical engineering from the University of Connecticut and a bachelor of science degree in engineering physics from Grove City College.

Family Relationships

There are no family relationships among any of our directors or executive officers.

Corporate Governance

Board Composition and Director Independence

Our board is composed of nine directors.

Our directors are elected annually to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified.

Pursuant to the proxy agreement, Leonardo S.p.A., US Holding, the DCSA and the proxy holders have specified board designation and/or approval rights .

The proxy agreement requires that our board include the five proxy holders appointed by US Holding after consultation with Leonardo S.p.A.

and approval by the DCSA.

The proxy agreement also requires that our board include four additional directors consisting of our chief executive officer and three additional candidates, selected by the proxy holders in their sole discretion from candidates proposed by US Holding, after reasonable consultation with the nominating and corporate governance committee, subject to approval of the DCSA in certain circumstances.

See Part III.

“Certain Relationships and Related Transactions and Director Independence—Relationship with Leonardo S.p.A—Proxy Agreement” in this Annual Report.

While the proxy agreement remains in effect, the number of members on our board is determined in accordance with the proxy agreement and therefore a fully constituted board consists of nine directors.

During any period when the proxy agreement is not in effect, the number of members on our board may be fixed by majority vote of the members of our board.

While the proxy agreement remains in effect, any vacancy in the board that results from the death, disability, resignation, disqualification or removal, or expiration of the term of (i) any proxy holder shall be filled by the new proxy holder appointed to take such proxy holder’s place in accordance with the proxy agreement and (ii) any director who is not a proxy holder shall be filled by candidates determined in accordance with the proxy agreement, by the majority vote of the proxy holders, subject to approval of the DCSA in certain circumstances.

During any period when the proxy agreement is not in effect, any vacancy in the board shall be filled by an affirmative vote of at least a majority of the directors then in office, even if less than a quorum, or by a sole remaining director.

Each director shall hold office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal.

Our board has determined that the proxy holders, Gen.

Baker and Ms.

Gallagher are “independent” as defined under the rules and the Exchange Act rules and regulations.

Board Committees

Our board maintains an audit committee, a compensation committee, a nominating and corporate governance committee and a government security committee.

The composition of our government security committee is governed by the proxy agreement.

The following is a brief description of our committees.

Audit Committee

The primary purposes of the audit committee are to to assist the board in overseeing (a) the quality and integrity of our financial statements, (b) the qualifications, independence and performance of our independent auditor, (c) our accounting, financial and external reporting policies and practices, (d) the performance of our internal audit function and (e) our compliance with legal and regulatory requirements, including without limitation any requirements promulgated by the Public Company Accounting Oversight Board and the Financial Accounting Standards Board.

The members of our Audit Committee are Mr.

Gallagher, Mr.

Krieg and Mr.

Marino, with Ms.

Gallagher serving as Chair of the committee.

Our board has designated Ms.

Gallagher as an “audit committee financial expert” and each of Mr.

Gallagher, Mr.

Krieg and Mr.

Marino has been determined to be “financially literate” under NYSE rules.

Our board has also determined that Mr.

Gallagher, Mr.

Krieg and Mr.

Marino are “independent” as defined under NYSE and Exchange Act rules and regulations.

Compensation Committee

The primary purpose of the compensation committee are to:

(i) be responsible for general oversight of compensation and compensation-related matters;

(ii) prepare any report on executive compensation required by the rules and regulations of the SEC for inclusion in our Form 10‑K;

and (iii) take such other actions relating to our compensation and benefits structure as the compensation committee deems necessary or appropriate.

The members of our compensation committee are Ms.

Odeen and Ms.

Townsend, with Ms.

Townsend serving as Chair of the committee.

Our board has also determined that Ms.

Odeen and Ms.

Townsend are “independent” as defined under NYSE and Exchange Act rules and regulations.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee is responsible, among its other duties and responsibilities, for:

(i) identifying individuals qualified and suitable to become board members and recommending to the board the director nominees for each annual meeting of stockholders;

(ii) regularly review our corporate governance policies and practices, including compliance with existing laws and regulations, corporate governance developments, emerging trends and best practices and recommend any proposed changes to the board of directors;

and (iii) otherwise taking a leadership role in shaping our corporate governance policies.

While the proxy agreement is in effect, (x) the nominating and corporate governance committee will consist solely of proxy holders, each of whom will be appointed by US Holding after reasonable consultation with Leonardo S.p.A.

and subject to DCSA approval, and (y) US Holding, in consultation with the nominating and corporate governance committee (and subject to approval of DCSA in certain circumstances), will have the right to identify non-proxy holder director candidates.

The members of our nominating and corporate governance committee are Mr.

Krieg, and Mr.

Marino, with Mr.

Krieg serving as Chair of the committee.

Our board has also determined that Mr.

Krieg and Mr.

Marino are “independent” as defined under NYSE and Exchange Act rules and regulations.

Government Security Committee

The proxy agreement requires us to have a government security committee (the “GSC”), consisting of all proxy holders, our chief executive officer, our general counsel, our corporate facility security officer (“CFSO”) and our technology control officer (“TCO”), to the extent that such officers have adequate security clearances.

The primary purpose of the GSC is to ensure that we maintain policies and procedures, including a technology control plan, to safeguard classified information in our possession and to ensure that we comply with the proxy agreement, the ITAR, the EAR, and the NISPOM.

The members of the GSC are Mr.

Townsend, and our Chief Executive Officer, General Counsel, Corporate Facility Security Officer and Technology Control Officer, with Mr.

Marino serving as Chair of the committee.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves, or in the past has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our board of directors or our compensation committee.

None of the members of our compensation committee is, or has ever been, an officer or employee of our company.

Lead Independent Director

Our board of directors has designated Mr.

Carey to serve as our lead independent director.

Board Oversight of Risk Management

Our board believes that effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that we face and, ultimately, our long-term corporate success.

Our board, both directly and through its committees, is responsible for overseeing our risk management processes, with each of the committees of our board assuming a different and important role in overseeing the management of the risks we face.

Our audit committee is responsible for overseeing risks associated with financial matters including financial reporting, accounting practices and policies, disclosure controls and procedures and internal control over financial reporting.

The compensation committee of our board has primary responsibility for risks and exposures associated with our compensation policies, plans and practices, regarding both executive compensation and the compensation structure generally.

The nominating and corporate governance committee of our board of directors oversees risks associated with the independence of our board of directors, potential conflicts of interest and overall enterprise risk.

The government security committee of our board oversees risks associated with our obligation to safeguard classified information in our possession and our compliance with the proxy agreement and applicable law and regulation including ITAR, EAR, and NISPOM.

Our senior management is responsible for implementing and reporting to our board regarding our risk management processes, including by assessing and managing the risks we face on a day-to-day basis.

The role of our board in our risk oversight is consistent with our leadership structure, with our Chief Executive Officer and the other members of senior management having responsibility for assessing and managing our risk exposure, and our board of directors and its committees providing oversight in connection with those efforts.

We believe this division of risk management responsibilities presents a consistent, systemic and effective approach for identifying, managing and mitigating risks throughout our operations.

The information required by Item 10 regarding our directors and corporate governance matters is incorporated by reference herein to the Proxy Statement sections entitled "Directors and Corporate

Governance." The information required by Item 10 regarding our executive officers appears as a supplementary item following Item 4 under Part I of this Report.

The information required by Item 10 regarding compliance with section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated by reference herein to the Proxy Statement section entitled "Delinquent Section 16(a) Reports”.

We have adopted a Code of Business Conduct and Ethics that applies to our executive officers, including our Principal Executive Officer, our Principal Financial Officer and our Principal Accounting Officer, which can be found on our website at http://www.investors.leonardodrs.com.

We will post any amendment to or waiver from the provisions of the Code of Business Conduct and Ethics that applies to the executive officers above on the same website and will provide it to stockholders free of charge upon written request by contacting Leonardo DRS, Inc., at 2345 Crystal Drive, Suite 1000, Arlington, Virginia 22202.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis provides the details of our executive compensation program and the decisions made as they relate to the Company’s Named Executive Officers (“NEOs”).

The discussion below relates to compensation programs in effect for 2021.

Compensation Program Overview

Executive Compensation Philosophy

Our executive compensation philosophy is to provide market-based competitive total compensation to support our strategic plan for growth and success, attract and retain executives and other key employees to drive a superior performance culture, and closely link pay to the performance of our executives.

Our management team strives to deliver optimal results through focused operational excellence, management of costs and investments, optimization of human capital, leadership, and driving collaboration across our businesses to achieve our strategic goals.

The executive compensation and benefit programs are guided by the following principles:

• Pay for Performance.

Our program is intended to reward superior past performance and create incentives for future exemplary performance that will create long-term value.

To achieve these objectives, our compensation program is designed to reward long-term strategic management and to create a performance-oriented environment.

• Competitive Pay.

We generally target NEO total direct compensation, base salary, annual incentive compensation, and long-term incentive compensation at or around the median of our peers, although we do not target a specific level and give consideration to a number of other factors.

Our program provides the opportunity for above-median pay for above-median performance and below-median pay for below-median performance.

• Strategic Goals and Metrics.

Annual Incentive Compensation (IC) metrics and targets are driven by the Company’s strategic, financial, and operational business goals.

Long-Term Incentives (LTI) provide NEOs with a significant personal stake in the long-term success of the business by tying earned amounts to three-year financial performance cycles, facilitating retention of key talent, and aligning incentives with our long-term strategic goals.

• Leadership Recruitment and Retention.

Compensation is designed to be competitive within our industry and to retain top talent.

Our compensation program is designed to recruit, motivate, retain, and reward NEOs for delivering operational and strategic performance over time.

The compensation committee of the Company’s board of directors (the “compensation committee”) intends to provide a balanced mix of short- and long-term compensation.

When the compensation committee considers any component of the NEOs’ compensation, the aggregate value and mix of all components are taken into consideration.

The compensation committee believes that each component of compensation is important and that it is the appropriate combination of these components that enable us to appropriately compensate and retain executives.

Compensation Components

To support our compensation philosophy, our NEO compensation program for 2021 provided a mix of fixed and variable compensation components that based the majority of each executive’s compensation on the success of the Company’s operating performance as measured by the financial metrics of bookings, adjusted earnings before interest, taxes and amortization (EBITA),working capital, and free cash flow from continuing operations, as well as the executive’s individual performance relative to the

Company’s business goals of execution of our strategic operating plan, growth, taking care of our people, and environmental, social, and governance (“ESG”) initiatives.

Certain of the Company performance metrics are non-GAAP measures, as discussed in more detail under “Components of Compensation Program” below.

Other NEOs - Average

Base Salary Annual Cash Incentive (target) Long-Term Incentive (target) Base Salary Annual Cash Incentive (target) Long-Term Incentive (target)

19% 21% 60% 31% 21% 48%

Performance-Based Performance-Based

81% At Risk 69% At Risk

Executive Compensation Practices

WHAT WE DO WHAT WE DON’T DO

ü External compensation consultant to review and advise on executive compensation with annual reporting to the compensation committee

û Do not engage in executive compensation practices that encourage excessive risk

ü Conduct annual proactive engagement with the compensation committee to discuss executive pay program

û No excessive perquisites

ü Align pay and performance using annual and multi-year measures of financial, operational, and business objectives

û No excise tax gross-ups

ü Short and long-term incentives based on clear, measurable goals tied to key financial and operational metrics that drive current and future business performance and value creation

û No excessive change in control provisions

ü Place maximum caps on incentive payouts consistent with market competitive practice

û No deferred compensation offerings

ü Include a clawback in all incentive compensation

ü Double-trigger change in control agreement

ü Thoughtfully selected peer group consisting of other aerospace and defense firms or companies from related industries with annual compensation committee review

THE COMPENSATION PROCESS

Role of the Compensation Committee

The board of directors 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.

• Reviews, determines and approves the compensation levels for all NEOs annually.

• Receives advice from Willis Towers Watson, the Company’s 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 and approves the cost and design of the Company’s retirement plans.

• Reviews and approves the individual and Company annual and long-term 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.

Role of the Compensation Consultant

The Company retains Willis Towers Watson as its compensation consultant to provide advice on executive compensation matters.

The role of the compensation consultant includes:

• Provides information on competitive market data in general executive compensation as it impacts NEOs.

• In consultation with 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 compensation committee on other topics as the compensation committee deems appropriate.

The Company retained Willis Towers Watson 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 2021, Willis Towers Watson performed the following specific services:

• Attended 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.

Willis Towers Watson also provided communication services and consulting and broker services to the Company in 2021.

In 2021, the Company paid fees to Willis Towers Watson for its services as a compensation consultant of approximately $79,000, for its communication services of approximately $87,000, and for its consulting and broker services of approximately $390,000.

Role of Management

The Company’s chief executive officer evaluates the performance of other NEOs and makes recommendations to the compensation committee regarding base salary, annual compensation targets, and long-term cash incentive compensation targets for the NEOs other than himself.

Other members of the Company’s management, including the chief financial officer;

chief operating officer;

general counsel;

and senior vice president, human resources, make recommendations to the chief executive officer regarding annual and long-term incentive plan design and performance metrics, provide NEO analysis in collaboration with the compensation consultant and provide information and recommendations regarding board of director pay with guidance from the compensation consultant.

Use of Competitive Compensation Data

We demonstrate our commitment to aligning compensation with Company performance by strongly linking compensation to the strategic, financial and operational performance of the Company.

The Company generally targets NEO total direct compensation at or around the median percentile of the peer group by component, although we do not target a specific level and give consideration to a number of other factors including level of responsibility, position held, job performance, years of experience in the position, internal pay equity, and market value.

Realized compensation from other factors of wealth accumulation are not considered in setting current compensation levels.

Our program provides for above-median pay for above-median performance and below-median pay for below-median performance.

To the extent total compensation exceeds targeted levels, it is directly attributable to performance that increases Company value and exceeds measurable, clearly defined performance goals.

Conversely, total compensation can be substantially less than target for performance that falls significantly short of pre-established targets.

The compensation committee analyzed competitive market data utilizing peer group and published survey data when evaluating NEO compensation levels.

The peer group is representative of competitors within similar markets and industries and with comparable annual revenue.

Peer group performance is a key relative measure for the Company’s annual incentive plan and performance-based LTIP metrics.

The compensation committee, with guidance from Willis Towers Watson and management, used a 2020 peer group based on an analysis conducted in December 2020 consisting of the following 16 companies:

Peer Group Companies Revenue

(in millions) Employee

Population Market

Capitalization

(in millions)

$ 2,072.0 4,800 $ 1,342.0

Aerojet Rocketdyne Holdings, Inc.

$ 1,982.0 4,814 $ 4,026.0

CACI International Inc.

$ 5,720.0 22,900 $ 6,018.0

$ 3,283.0 13,000 $ 4,847.0

Cubic Corporation $ 1,476.0 6,100 $ 2,014.0

Curtiss-Wright Corporation $ 2,488.0 9,100 $ 4,956.0

FLIR Systems, Inc.

$ 1,887.0 4,265 $ 6,879.0

ManTech International Corporation $ 2,223.0 8,900 $ 3,715.0

$ 2,885.0 12,623 $ 2,673.0

Perspecta Inc.

$ 4,504.0 14,000 $ 3,894.0

$ 6,379.0 26,000 $ 5,532.0

Teledyne Technologies Inc.

$ 3,164.0 11,790 $ 13,632.0

Triumph Group, Inc.

$ 2,900.0 9,989 $ 669.0

Unisys Corporation $ 2,949.0 20,800 $ 1,304.0

$ 2,309.0 6,100 $ 2,248.0

Woodward, Inc.

$ 2,496.0 7,248 $ 7,982.0

Leonardo DRS, Inc.

$ 2,879.0 6,700 n/a

______________

Data obtained using Standard & Poor’s Capital IQ database and reflects the most recent fiscal year.

(1) Perspecta, Inc.

was a new addition to the 2020 Peer Group Companies.

COMPONENTS OF COMPENSATION PROGRAM

Annual Base Salary

The goal of our base salary is to provide a competitive, fixed rate of cash compensation.

Base salaries are reviewed annually, and increases, when they occur, are driven primarily by changes in the market.

For 2021, we adjusted the salaries for all of our NEOs.

We believe that organizations perform well over the long term when they make an effort to pay salaries at or near the market median and create opportunities for executives to earn above-median compensation through annual and long-term incentives that are awarded based on performance relative to challenging and clear performance goals.

The base salary earned by each NEO for 2021 was:

Name Base Salary (1)

Lynn $ 1,157,249

John Baylouny $ 522,500

Mike Dippold $ 476,000

Mark Dorfman $ 430,540

Sally Wallace $ 440,840

(1) Base salary reflects salary increases received in April 2021 as part of the annual performance review cycle, and approved by the Compensation Committee in March 2021.

Annual Incentive Compensation

The NEOs were eligible to earn an annual cash incentive award under our Incentive Compensation Plan (the “ICP”) for performance in 2021.

The ICP is designed to make a significant portion of each NEO’s total cash compensation contingent upon the successful achievement of certain annual company financial and individual strategic, operational and ESG goals.

For that reason, 75% of the NEOs’ annual incentive target is tied to financial performance, while the remaining 25% is tied to significant individual strategic and operational goals.

The incentive received is based on both Company and individual performance against specific, measurable goals established at the beginning of the year and approved by the compensation committee.

For individual performance, the chief executive officer assesses the other NEOs’ individual contributions, and the compensation committee assesses and approves the chief executive officer’s contributions and approves the chief executive officer’s assessment of each NEO’s contributions.

Targets for Annual Incentive

Each NEO’s target annual incentive, as a percentage of base salary, was determined during our annual compensation benchmarking process and is generally designed to provide total cash compensation at or around the market median of our peer group and balances other considerations such as Company performance, complexity of the role, length of service, future expected contributions, and impact to the Company’s annual growth and profitability.

Consistent with peer and market practice, the maximum incentive award that can be earned under the ICP is two times the target amount with the exception of the CEO.

The maximum target incentive for the CEO is capped at a maximum of 200%.

For performance that falls significantly short of the pre-established target, there may be no payout.

Name Base Salary Target Incentive (% of Base) Target Incentive Maximum Incentive (% of Base) Maximum Incentive $

Lynn $ 1,157,249 110% $ 1,272,974 200% $ 2,314,498

John Baylouny $ 522,500 75% $ 391,875 150% $ 783,750

Mike Dippold $ 476,000 70% $ 333,200 140% $ 666,400

Mark Dorfman $ 430,540 65% $ 279,851 130% $ 559,702

Sally Wallace $ 440,840 65% $ 286,546 130% $ 573,092

Performance Metrics for Annual Incentive

For 2021, the annual incentive for each NEO was determined based on two categories of performance metrics:

four weighted financial metrics totaling 75% of the award opportunity;

and individual strategic, operational, and ESG goals weighted at 25% of the award opportunity.

At the beginning of 2021, the Company financial performance metrics were approved by the compensation committee to align our annual operating plan, reflect the Company’s strategic plan, and to ensure challenging goal-setting.

Individual strategic, operational, and ESG goals were developed independently between the respective NEO and chief executive officer.

The individual strategic, operational, and ESG goals for the chief executive officer’s annual incentive were developed by the chief executive officer and presented to the compensation committee for consideration and approval.

All goals are tied to strategic business needs for the coming year and are pushed down through the organization to align all incentive pay participants with Company goals and objectives.

The compensation committee determines the final payout by considering the NEOs’ achievements and contributions during the year as well as Company performance, market conditions and difficulty of achieving the goals.

2021 Financial and Individual Performance Targets and Achievement for Annual Incentive

Financial Performance Metric .

Each 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:

Payout Ranges for Financial Performance Metrics

Performance Thresholds*

Working Capital

EBITA-Adjusted

Minimum (90%)

Target (100%)

Maximum (125%)

* Interpolation used between these points.

The 2021 Company financial performance objectives are set forth in the table below:

Performance Metric (1)

Weighting Minimum (in millions) 2021 Target (in millions) Maximum ( in millions)

20% $ 2,340.0 $ 2,600.0 $ 3,250.0

Working Capital (3)

20% Refer to Working Capital Performance Metric Table

Adjusted EBITA (4)

30% $ 230.4 $ 256.0 $ 320.0

Free Cash Flow (5)

30% $ 134.7 $ 149.7 $ 187.10

________________

(1) Targets calculated in accordance with International Financial Reporting Standards (IFRS).

The Company used IFRS as its principal method of accounting.

(2) “Bookings” is 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.

(3) For purposes of the Working Capital refer to the Working Capital Performance Metric table below.

it is based on quarterly turns and weighted based on quarterly achievement at 10% Q1 - Q3, and 70% for Q4.

(4) Adjusted EBITA is calculated as our net earnings before income taxes, amortization of acquired intangible assets, restructuring costs, interest, deal related transaction costs, acquisition and divestiture related expenses, foreign exchange, non-service pension expenditures and other one-time non-operational events.

(5) “Free Cash Flow” is calculated as cash flows provided by operating activities and the cash flows provided by (used in) investing activities pertaining to capital expenditures and proceeds generated from the sale of assets.

2021 Working Capital Performance Metric(1)

Quarter Weighting Minimum (in millions) 2021 Target (in millions) Maximum (in millions)

Q1 10% 2.85 3.16 3.95

Q2 10% 3.13 3.48 4.35

Q3 10% 3.53 3.92 4.90

Q4 70% 4.27 4.75 5.93

(1) Working Capital is based on quarterly turns and weighted based on quarterly achievement at 10% Q1 - Q3, and 70% for Q4.

The ICP financial performance objectives were subject to adjustment by the compensation committee, as recommended by the chief executive officer, for any of the following events:

asset write-downs;

significant litigation or claim judgments or settlements;

the effect of changes in tax laws, accounting standards or principles, or other laws or regulatory rules affecting reporting results;

any reorganization and restructuring programs;

extraordinary nonrecurring items;

acquisitions or divestitures;

foreign exchange gains and losses;

a change in the Company’s fiscal year;

and any other nonrecurring events.

The chief executive officer, with the approval of the compensation committee, had the discretion to determine that no award would be earned by a participant if the Company’s Adjusted EBITA for the year did not exceed 50% of the Adjusted EBITA target established for the 2021 ICP.

Individual Performance Objectives (25% of Incentive Opportunity) .

The individual strategic, operational, and ESG goals are specific, measurable goals, can be quantitative or more subjective, and are evaluated based on their relative importance to the strategic and operational performance, solid execution, and success of the Company.

The chief executive officer provides a goal rating from 0% to 200% for each of the other NEO’s individual strategic and operational goals, and the goal ratings are averaged to determine each NEO’s overall goal rating.

The compensation committee is presented with each NEO’s achievement of his or her individual strategic and operational goals, and the overall goal rating for review and approval.

For the chief executive officer, the compensation committee reviews the individual strategic, ESG, and operational goal performance, and approves an overall goal rating.

Earned Awards .

In January 2022, the level at which each of the NEOs earned the award opportunity under the ICP was recommended by the chief executive officer (for NEOs other than the chief executive officer) and approved by the compensation committee, and determined by the compensation committee for the chief executive officer.

The 2021 ICP awards were paid in March 2022.

The chief executive officer, with compensation committee consent, has the ability to apply an additional factor to the ICP earned award for the other NEOs, referred to as a discretionary factor, which is an increase or decrease to an ICP earned award.

The discretionary factor adjusts the ICP earned award under the ICP performance objectives (Company and individual) for an NEO when there is outstanding performance, or when an NEO has fallen short of expectations in the plan year.

The compensation committee has the sole authority to apply a discretionary factor to the chief executive officer’s ICP earned award.

The compensation committee approved the final ICP earned award for each of the NEOs, based on Company and individual performance, and any discretionary factor.

In no event may the ICP final earned award exceed 200% of the NEO’s target award opportunity.

2021 Incentive Performance Achievement

Company Performance (75% of Incentive Opportunity) .

The compensation committee determined that the achieved ICP company performance objectives for 2021 were as follows;

achievement of bookings,

slightly above target level achievement of EBITA and free cash flow, and for working capital slightly below target level achievement for Q1 and below minimum performance threshold for Q2 through Q4.

Objective 2021 Plan (in millions) Actual 2021 Performance (in millions) 1

% Performance Achieved ICP Performance Factor (2)

Weighting Weighted Performance Factor (3)

Bookings $ 2,600 $ 2,596 100 % 100 % 20 % 20.0 %

Working Capital (4)

Refer to Working Capital Achievement Table 20 % 1.2 %

Adjusted EBITA $ 256 $ 258 101 % 104 % 30 % 31.2 %

Free Cash Flow $ 150 $ 152 101 % 104 % 30 % 31.2 %

Total Financial Performance Achievement 100 % 84 %

________________

(1) Actual performance was calculated in accordance with IFRS.

The company used IFRS as its principal method of accounting.

(2) After the Percentage of Performance Achieved is calculated for each metric, an interpolation table is used to determine the ICP Performance Factor.

(3) The Weighted Performance Factor is calculated for each metric based on applying the Weighting to the ICP Performance Factor.

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) Working Capital is based on quarterly turns and weighted on quarterly achievement.

Working Capital Financial Achievement as follows:

2021 Working Capital Achievement

Quarter 2021 Plan (in millions) Actual 2021 Performance (in millions) % Performance Achieved ICP Performance Factor Weighting Weighted Performance Factor (3)

Q1 3.16 2.96 94% 64% 10% 6%

Q2 3.48 3.09 89% —% 10% —%

Q3 3.92 3.22 82% —% 10% —%

Q4 4.75 3.62 76% —% 70% —%

Working Capital Financial Achievement/Performance Factor (20%)......................

Individual Performance (25% of Incentive Opportunity) .

The individual strategic and operational goals for each NEO were designed to reflect the significant individual performance expectations for the NEO and reward notable achievements that exceeded expectations.

Each NEO is expected to contribute to the financial performance of the Company beyond that specifically recognized in the financial performance metrics listed in the table above.

The NEO’s results of their individual strategic and operational goals were taken into consideration by the compensation committee to determine the individual performance achievement.

for each NEO and are reflected in the level at which the individual performance metric was achieved.

Name Individual Performance Achievement (1)

Individual Performance Summary

Lynn 200% • In order to continue to strengthen Leonardo DRS, led our team through intensive portfolio shaping analysis to transform the Company strategically and financially to increase our revenue growth rate and improve operating margins.

• The Company experienced continued growth for the fifth straight year in 2021, achieving 4% top line growth, and growing profit by 27% and free cash flow by 58%.

• Improved operating efficiency, achieving our goal of $45 million in savings.

Implemented an aggressive risk mitigation approach for supply chain by buying ahead of need, finding new suppliers, and consolidating purchases that greatly reduced the impact.

• Continued priority to keep our workforce and their families safe during the pandemic.

In 2021, we achieved an 87% employee vaccination rate.

• Expanded our diversity and inclusion program by launching our employee resource group program, mERGe, with Women in Technology becoming our first group under the new mERGe program.

• DRS sustainability initiatives included increased use of renewable energy, facility improvements to increase energy efficiency, reductions in our overall facility footprint, and our diversity initiatives.

Name Individual Performance Achievement (1)

Individual Performance Summary

John Baylouny 200% • Improved customer satisfaction, leading to new awards, by helping to retire legacy issues and improving program performance, execution, and on time delivery.

• Leading the effort working with Human Resources and Legal, continued to manage the company’s COVID-19 plans to prioritize employee’s safety and maintain business continuity.

• A maturing enterprise and program risk and opportunity management process has identified and escalated issues rapidly resulting in an improved predictability of business performance.

• Continued to lead the company’s operational excellence program, APEX, to focus on customers, quality, efficiency, and process improvements across all businesses.

• Working closely with our business leaders, through succession-planning efforts filled key vacancies with internal talent reducing the impact of management disruption.

• Led the operational leadership team for the Company, and provided guidance and removed barriers to enable the team to succeed.

Name Individual Performance Achievement (1)

Individual Performance Summary

Mike Dippold 200% • Supported the CEO and led the finance team through intensive portfolio shaping analysis to transform the Company strategically and financially to increase our revenue growth rate and improve operating margins.

• Transformed the corporate financial team to support company reporting requirements, and compliance activities required of a public company.

• Led the Company’s efforts to prepare for a public offering, creating financial models, US GAAP reporting, capital structure, developing capital structure, and developing management presentations.

• Worked closely with our financial leaders across the Company to monitor achievement of business goals, and provide for early identification of risks.

• Monitored the Company’s risks associated with COVID-19 and high inflation for rising cost of materials, labor, and impact of supply chain disruptions.

• As a member of the executive team, provided advice, guidance, and counsel on the Company’s strategic objectives to support highly efficient and growth-oriented performance.

Name Individual Performance Achievement (1)

Individual Performance Summary

Mark Dorfman 200%

• Regularly provide valued advice and counsel to the senior leadership and board of directors of the Company on matters of great importance.

• Led the Company’s complex legal and regulatory efforts to enhance the governance, controls, and processes in place to support a public offering.

• Successfully navigated federal and state COVID-19 regulations, ensuring compliance while minimizing business impact.

• Continued to deliver highly effective and innovative ethics, compliance, and industrial security programs.

• Provided leadership and oversight to the cybersecurity team which received a perfect score on a defense industrial base cybersecurity assessment.

• Opened new markets and channels for our products through a best-in-class international trade program.

Name Individual Performance Achievement (1)

Individual Performance Summary

Sally Wallace 160% • Led efforts to integrate the strategic planning process and the business operating plans for seamless standardized planning, risk and opportunity management and EAC development.

• Enhanced the Company’s reporting capabilities of programmatic data, improving our business-level performance and early identification of program risks.

• Instrumental in developing processes and tools for the management of risks and opportunities by strengthening the EAC process.

• Works closely with the business leaders to integrate IT, ERP, business intelligence, program management, risk and opportunity management, apex and finance initiatives to ensure alignment and increase the business performance.

• Provided leadership guidance as the executive sponsor for the company’s Diversity Advisory Group.

(1) Individual Performance Achievement can range from 0% to 200%.

As referenced in the Individual Performance Objectives section, this component is weighted at 25%, and when multiplied by the Individual Performance Achievement determines an Individual’s Performance Achievement Factor.

Annual Incentive Plan (ICP) Earned Award Payment

The table below summarizes the NEOs’ targets and the compensation committee’s determination of ICP earned awards based on financial and individual performance achievement.

Name Target Incentive (% of Base) Target Incentive Financial Achievement

Individual Performance Achievement

Calculated Award (3)

Discretionary Factor Award (4)

Earned Award (5)

Overall Achievement

Lynn 110% $ 1,272,974 $ 801,974 $ 636,487 $ 1,438,461 1.2 $ 1,726,200 136%

John Baylouny 75% $ 391,875 $ 246,881 $ 195,938 $ 442,819 1.2 $ 531,400 136%

Mike Dippold 70% $ 333,200 $ 209,916 $ 166,600 $ 376,516 1.2 $ 451,900 136%

Mark Dorfman 65% $ 279,851 $ 176,306 $ 139,926 $ 316,232 1.2 $ 379,500 136%

Sally Wallace 65% $ 286,546 $ 180,524 $ 114,618 $ 295,142 1.2 $ 354,200 124%

______________

(1) Financial Achievement is based on Company Performance Factor of .84, and weighted at 75%.

(2) Individual Performance Achievement is the NEO’s calculated percentage achievement for individual goals and objectives which are weighted at 25%.

(3) Calculated Award is the sum of the Financial and Individual Achievement.

(4) A Discretionary Factor Award may be applied at the discretion of the Committee based on superior performance or extraordinary efforts unrelated to achievement of performance objectives, and is a multiplier on the Calculated Award.

(5) The Earned Award is the Calculated Award with the Discretionary Factor applied.

The Earned Award Amounts are rounded to the nearest $100.

(6) The Overall Achievement represents the percentage achievement of the Target Incentive.

Long-Term Incentive

Amendment to the Long Term Incentive Plan

We historically have awarded cash-based long-term incentive opportunities to the NEOs under our 2014 Long-Term Incentive Plan (“LTIP”), rather than equity-based opportunities.

In May of 2021, the board of directors approved an amendment to the LTIP to provide for the treatment of unvested LTIP grant awards, the terms of 2021 and future awards, and the treatment of awards upon the occurrence of a potential public offering.

The amended LTIP aligns our long term incentive compensation, including updated performance metrics, to similar public aerospace and defense companies.

On average, the LTIP comprises approximately 48% of each NEO’s target total direct compensation, which provides our executives with a significant personal stake in the long-term success of Leonardo DRS.

Treatment of Unvested 2019 and 2020 LTIP Grant Awards

The Company performance component for any LTIP awards that were issued prior to January 1, 2021 will be deemed satisfied at 100% of the remaining target award.

For awards issued in 2019, the remaining performance components will be paid in 2021 and 2022 and the retention component will be paid in 2022.

For awards issued in 2020, the two remaining performance components will be paid in 2022 and 2023 and the retention component will be paid in 2023.

The all LTIP awards are contingent upon the participant’s continued employment on the date of each payment.

Treatment of 2021 LTIP Grants and Future Awards

The Company utilizes our long-term incentive plan to attract and retain key talent and promote effective use of the company’s resources to achieve expected and superior performance.

In order to motivate participants to consistently deliver high performance, under the Amended LTIP, 50% of the LTIP award is a performance component contingent on the achievement of certain multi-year Company performance goals, and 50% of the award is a retention component.

On average, the LTIP comprises approximately 48% of each NEO’s target total direct compensation.

This provides our executives with a significant personal stake in the long-term success of Leonardo DRS.

As delegated by the board of directors, the LTIP is administered by the compensation committee.

Each NEO’s annual target and earned award recommendation are approved by the compensation committee.

Targets for Long-Term Incentive

The aggregate target opportunity for each NEO under the LTIP was established using competitive benchmarking at or around the market median and balances other considerations such as Company performance, complexity of the role, length of service, future expected contributions, and impact to long-term growth and profitability.

We believe the LTIP allows for the consideration of other factors in addition to the quantitative metrics that drive annual incentive payments.

Earned awards provided under the LTIP

may range from 0% to 200% of the target award opportunity.

The annual LTIP target awards for the NEOs are shown in the table below.

Name LTIP Target

Lynn $ 3,580,000

John Baylouny $ 975,000

Mike Dippold $ 800,000

Mark Dorfman $ 560,000

Sally Wallace $ 560,000

Vesting Terms for Long-Term Incentive

The 2021 LTIP target awards were comprised of two components, a Company financial performance component designed to tie compensation opportunities to achievement of certain company performance goals measured over the three-year performance cycle;

and a retention component to encourage the retention of key employees.

The two components combined provided a total compensation opportunity competitive with the businesses with which the Company competes.

Component End of Year 1 End of Year 2 End of Year 3

Retention (50%) 33.3% 33.3% 33.3%

Performance (50%) 100%

The retention component comprised 50% of each NEO’s 2021 target LTIP award, vesting in three equal annual installments over the period from January 2021 through December 2023.

In order to be eligible for payment of any portion of the retention component of the LTIP award, the NEO must be actively employed by the Company and in good standing on the date of payment.

Company Performance.

The Company performance component comprised 50% of each NEO’s 2021 target LTIP award, and will be payable after the end of the three-year performance cycle, the NEO must be actively employed by the Company and in good standing on the date of payment.

The Company performance metrics for the 2021 LTIP as approved by the compensation committee in May 2021, comprise metrics measured over 2021, 2022 and 2023.

The performance is measured based on relative adjusted net earnings weighted at 40%, revenue growth and return on invested capital weighted at 30%, with the performance thresholds and payout ranges shown in the table below and no payout earned for performance below the minimum threshold:

Company Performance Goal Weighting Payout Ranges for Company Performance Component (1)

Metric Performance Thresholds (2)

Relative Adjusted Net Earnings (3)

Return on Invested Capital Revenue Growth

Relative Adjusted Net Earnings 40% Minimum (50% payout) 40% 11% 3%

Revenue Growth 30% Target (100% payout) 60% 12.5% 5%

Return on Invested Capital (ROIC) 30% Maximum (200% payout) 80% or more 14% or more 8%

(1) Company performance component payable after 3rd year

(2) Interpolation used between these points

(3) Relative adjusted net earnings to convert to Total Shareholder Return (TSR) if the Company becomes publicly traded

Approval of Performance Achievement for the Long-Term Incentive

Earned award recommendations for each of the NEOs are approved by the compensation committee.

The compensation committee has the authority to adjust the LTIP performance objectives for any of the following events:

asset write-downs;

significant litigation or claim judgments or settlements;

the effect of changes in tax laws, accounting standards or principles, or other laws or regulatory rules affecting reporting results;

any reorganization and restructuring programs;

extraordinary nonrecurring items;

acquisitions or divestitures;

foreign exchange gains and losses;

a change in the Company’s fiscal year;

and any other nonrecurring events.

The LTIP permits the compensation committee to exercise negative discretion to reduce or eliminate an award that would have been earned under the performance objectives as the compensation committee determines appropriate.

2021 Long-Term Incentive Award Achievement

Each of the NEOs were granted long-term incentive awards in 2019, 2020, and 2021 with partial vesting, as show in the table below.

LTIP Award Grant Date Metric Target Weighting Achievement

% Achievement Award Factor

Retention 16.67 % 100 % 16.67 %

Retention 23.34 % 100 % 23.34 %

Retention 30 % 100 % 30 %

2021 (3-Year Performance Cycle) Total LTIP Award Factor:

________________

(1) 2021 Award is based on 1/3 of a 50% retention component.

(2) 2020 Award is based on 1/3 of a 70% performance component which was converted to a retention target award.

(3) 2019 Award is based on 1/3 of a 70% performance component which was converted to a retention target award.

(4) 2019 Award includes a 30% retention component.

As a result of the achievement for the components of the LTIP awards shown in the table above, each NEO earned the following 2021 LTIP Total Payment, which were approved in February 2022, and will be paid in April 2022, subject to continued employment of the NEO through the payment date:

Executive LTIP Award

LTIP Target % Target Earned Total Payment (1)

Lynn $ 3,580,000 93% $ 3,341,333

John Baylouny $ 975,000 93% $ 910,000

Mike Dippold $ 800,000 93% $ 746,667

Mark Dorfman $ 560,000 93% $ 522,667

Sally Wallace $ 560,000 93% $ 522,667

________________

(1) Total 2021 LTIP payment reflect the LTIP amounts for unvested awards for 2019, 2020, and 2021.

Benefits and Perquisites

The benefits provided by the Company are an important tool used to attract and retain executive talent.

These benefits are designed to be competitive, cost-effective, and support the overall needs of our employees.

The NEOs are eligible to participate in health and welfare benefits, retirement benefits, and executive perquisites.

Company-Sponsored Retirement Plans

Leonardo DRS 401(k) Plan .

We sponsor a 401(k) Plan, a tax-qualified defined contribution plan, for our eligible employees, including the NEOs.

Each NEO is eligible to make before-tax contributions to the 401(k) Plan, and after-tax contributions through a Roth 401(k) (or any combination of the foregoing), up to plan and tax law limits.

The 401(k) Plan also provides participants with the opportunity to earn a Company match contribution.

During 2020, the 401(k) Plan provided for a Company-matching contribution of 100% on contributions up to the first 5% of eligible pay for NEOs.

Defined-Benefit Retirement Plan .

Certain employees participate in the Pension Plan for Employees of DRS Naval Power Systems, Inc., a Company-sponsored, tax-qualified, noncontributory defined-benefit plan (the “Pension Plan”).

The Pension Plan was amended in October 2011 to freeze benefits for participants as of December 31, 2011.

Benefits under the Pension Plan are accrued benefits calculated using the final average pay formula, with an early retirement option at age 55, and normal retirement at age 65.

Final average monthly pay takes into account base salary and certain variable pay programs, but excludes non-recurring bonuses and executive incentive plans and any amount paid after December 31, 2011.

Additional payment options may be available including a lump sum, period certain, and social security adjustment options if the participant retires early.

Early retirement benefits, after age 55, are subject to a reduction schedule based on the participant’s age at commencement and credited service.

This projected benefit is not subject to cost-of-living adjustments.

Health and Welfare Benefits

Our chief executive officer is the beneficiary of an individual term life insurance policy.

We pay the required premiums for the policy on an annual basis.

The policy was effective October 17, 2019, and is for a ten-year period.

All NEOs, including our chief executive officer, are provided Company-funded group term life coverage of two times their annual base salary up to a maximum amount of $500,000 with reductions starting at age 65.

The life benefit under the term life coverage will reduce by 35% at the age of 65 and will reduce by 50% at the age of 70.

All of our current NEOs are eligible to participate in our employee benefit plans, including our medical, dental, vision, life, disability and accidental death and dismemberment insurance plans, in each case on the same basis as all of our other employees.

The senior leadership of the Company, including the NEOs, receive an enhanced short-term disability benefit of 70% of coverage with a weekly maximum of $3,500.00, and an enhanced long-term disability benefit of 66 2/3% of coverage with a monthly maximum of $15,000.00.

Pursuant to our vacation policy, on an annual basis we pay eligible employees, including each of the NEOs, for any accrued and unused vacation benefits in excess of 240 hours, up to a maximum of 40 hours of base pay.

Executive Perquisites

We provide our NEOs with an annual fixed perquisite allowance under the Executive Allowance Program that the compensation committee believes is reasonable yet competitive to attract and retain key talent.

The Company provides perquisites to the NEOs for purposes of recruitment, retention and security and to ensure the personal, physical, and fiscal fitness of our executives to facilitate the transaction of

The annual perquisite allowance in 2021 was $40,000 for Mr.

Lynn and $29,400 for the other NEOs.

The Company consulted with Willis Towers Watson regarding the market practice of our peers when considering the perquisite allowance.

The perquisite allowance provided to our NEOs was designed to be used at their discretion for such items as financial planning and tax preparation services, physical examinations, home security systems, personal liability and supplemental accidental death and dismemberment insurance, and the personal use of automobiles owned or leased by the NEO.

The executive allowance is paid to NEOs on a bi-weekly basis.

Severance and Change in Control Benefits

Incentive Awards

Termination under the ICP .

Annual incentive awards earned under the ICP generally were only payable subject to the NEO’s continued employment through the date on which awards are paid;

however the compensation committee has the discretion to pay a prorated earned award in the event of a NEO’s involuntary separation of employment for reasons other than cause after July 1 of a plan year, or due to death or disability.

Termination under the LTIP .

Long-term incentive awards earned under the LTIP are payable subject to the NEO’s continued employment through the date on which awards are paid.

In the event of a NEO’s involuntary separation of employment for reasons other than cause after December 31 of a plan year, the compensation committee may, in its sole discretion, authorize an award payment subject to achievement of any performance conditions for the plan year or portion of the performance cycle of which the plan year is a part.

If the NEO’s employment was terminated due to death or disability, then the compensation committee, in its sole discretion, may authorize a prorated award payment subject to achievement of any performance conditions.

Clawback Provision .

The ICP and LTIP include executive compensation recoupment, or “clawback,” provisions.

The clawback would apply in the event that the Company subsequently discovers facts that, if known earlier, would have constituted grounds for termination of employment for “cause” (as defined in the ICP or LTIP as applicable) prior to the payment of the earned award.

Additionally, in the event of a restatement of the Company’s financial results (other than a restatement caused by a change in applicable accounting rules or interpretations), the result of which is that an earned award would have been lower if calculated based on the restated results, the compensation committee will review each earned award during the period in question.

If the compensation committee determines that the restatement is the result of the negligence, misconduct, deception, non-disclosure, policy violation or fraud by a NEO, the compensation committee in its discretion may require repayment of all or a portion of the award.

Executive Severance Plan

Our board of directors approved an Executive Severance Plan (the “Severance Plan”) on May 27, 2021 to help retain qualified employees, maintain a stable work environment and provide economic security by providing benefits to certain key employees 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, including the change in control provision against the practices of our peer group companies.

The Change in Control Plan, dated September 12, 2016, was terminated and replaced with the Severance Plan.

The Severance Plan provides benefits to certain eligible employees, including the NEOs, whose jobs are eliminated by the Company without “cause” or by the executive with “good reason” (as each is defined

in the Severance Plan) within two years of a “change in control” (as defined in the Severance Plan), excluding any termination due to death or disability, including:

• Severance pay in an amount equal to the sum of (i) his or her annual base salary and target award under the ICP for the fiscal year in which termination occurs, multiplied by the applicable severance multiplier, (ii) his or her unpaid prior year bonus, if any, (iii) the pro-rata bonus, paid in a lump sum and;

(iv) payment of unvested LTIP award grants.

• A monthly reimbursement equal to the monthly COBRA premiums for NEOs, the shorter of either 30 months or the period ending on the last day of the second calendar year following the year in which the severance occurs and for other participants, 24 months;

• An additional monthly amount equal to the Company’s cost as of immediately prior to the severance date under the Company’s disability, accident and life insurance.

The Executive Severance Plan provides benefits to certain eligible employees whose jobs are eliminated by the Company without cause unrelated to a change in control, excluding any termination due to death or disability, including:

• Severance pay in an amount equal to the sum of (i) his or her annual base salary for 18 months for the NEOs and for 12 months for other executives, (ii) his or her unpaid prior year bonus, if any, (iii) the pro-rata bonus, paid in equal installments and;

(iv) payment for the prior year LTI payment if terminated after December 31 and prior to the award payment date.

• An additional monthly amount equal to the Company’s cost as of immediately prior to the severance date under the Company’s disability, accident and life insurance.

Any severed employee will not be eligible to receive the benefits listed above unless he or she first executes a written release, which becomes effective and is not revoked.

In the event a participant’s employment is terminated by the Company without cause or by the executive with good reason in connection with a change in control, any awards granted to a severed employee under the LTIP will be deemed to be immediately vested and payable.

If a participant’s employment is terminated unrelated to a change in control, the terms of the LTIP will apply, which include that any awards granted under the LTIP and not yet paid will terminate and the participant will not be entitled to any further payments.

However, if the termination is due to a reduction in force or due to a participant’s death or disability, the compensation committee may authorize certain payments to be made for such participant’s awards granted under the terms of the LTIP.

Other Considerations

Compensation and Risk Management

With the support of management and the compensation consultant, the compensation committee evaluates the Company’s overall risk profile relative to the incentive components of compensation.

The use of long-term incentive awards as a significant portion of total direct compensation is structured to ensure management is focused on the long term and not incentivized to take excessive risk.

Tax Considerations

The compensation committee considers certain tax implications when designing the Company’s executive compensation programs, including the deductibility of compensation paid to our NEOs.

Code Section 162(m) generally limits the deductibility of compensation paid to of certain executive officers of

publicly held companies in excess of $1 million during a year.

The compensation committee believes that tax deductibility is only one of several relevant considerations in setting compensation, and that the tax deduction limitation should be evaluated in conjunction with other relevant factors and not independently compromise the compensation committee’s ability to structure its compensation to attract, retain and appropriately motivate executive officers, thus providing benefits to the Company and its stockholders that outweigh the potential benefit of the tax deduction.

Accordingly, the compensation committee has discretion to approve and authorize compensation that is not deductible for federal income tax purposes.

SUMMARY COMPENSATION TABLE

The following table presents the compensation of our Named Executive Officers for services performed for the year ended December 31, 2021.

2021 SUMMARY COMPENSATION TABLE

Name and Principal Position Fiscal

Year Salary Non-Equity Incentive Plan Compensation (1)

Pension Value

Compensation (3)

William Lynn, CEO 2021 $1,156,439 $5,067,533 n/a $99,632 $6,323,603

2020 $1,137,185 $3,767,700 n/a $98,807 $5,003,692

John Baylouny, COO 2021 $515,584 $1,441,400 n/a $52,865 $2,009,849

2020 $470,346 $1,109,000 n/a $52,145 $ 1 $1,631,492

Michael Dippold, CFO 2021 $468,341 $1,198,567 n/a $51,904 $1,718,811

2020 $420,885 $901,900 n/a $51,280 $1,374,065

Mark Dorfman, EVP, Gen Counsel 2021 $429,518 $902,167 n/a $52,169 $1,383,854

2020 $418,717 $752,000 n/a $47,224 $1,217,940

Sally Wallace, EVP, Bus Ops 2021 $439,793 $876,867 n/a $51,962 $1,368,622

2020 $428,914 $742,900 $28,991 $51,859 $1,252,664

________________

(1) The amounts in this column reflect the annual incentive cash awards earned under the Company’s Incentive Compensation Plan and long-term cash awards earned under the Company’s Long-Term Incentive Plan.

See Part III.

“Compensation Discussion and Analysis—Components of Compensation Program—Annual Incentive Compensation” and “—Long-Term Incentives” for a description of these programs and the amounts earned by each NEO under each program for 2021.

(2) This column represents any increase during 2021 in the present value of the NEO’s accumulated benefit under the Pension Plan for Employees of DRS Naval Power Systems, Inc.

For more information regarding the NEO’s pension benefits, please see the Pension Benefits table below.

(3) The amounts shown in the “All Other Compensation” column for 2021 include the amounts detailed in the table below.

See Part III.

“Compensation Discussion and Analysis—Components of Compensation Program—Benefits and Perquisites” for a description of the benefits discussed in the table below.

2021 ALL OTHER COMPENSATION

Year 401(k) Plan

Contributions (a)

Life Insurance (b)

Executive Allowance Program (c)

Lynn 2021 $14,226 $23,680 $39,308 $21,818 $600

John Baylouny 2021 $14,250 n/a $29,481 $9,135 n/a

Michael Dippold 2021 $14,250 n/a $29,481 $8,173 n/a

Mark Dorfman 2021 $14,250 n/a $29,481 $8,038 $400

Sally Wallace 2021 $14,250 n/a $29,481 $8,231 n/a

________________

(a) This column reflects Company contributions under the Company’s 401(k) Plan.

(b) This column reflects Company paid insurance premiums with respect to an individual term life insurance policy.

(d) This column reflects the payout of accrued and unused vacation benefits in accordance with the Company’s vacation policy.

(e) This column reflects certain gym benefits.

2021 GRANTS OF PLAN-BASED AWARDS

The following table provides additional information about plan-based compensation disclosed in the Summary Compensation Table.

This table includes non-equity awards granted during 2021.

No equity awards in respect of Company stock were granted in 2021.

2021 GRANTS OF PLAN-BASED AWARDS TABLE

Estimated Future Payouts Under Non-Equity Incentive Plan Awards

Date Threshold

Lynn January 1, 2021 (2)

$381,892 $1,272,974 $2,545,948

January 1, 2021 (3)

$1,790,000 (1)

January 1, 2021 (4)

$895,000 $1,790,000 $3,580,000

January 1, 2021 (5)

$4,654,000 (1)

John Baylouny January 1, 2021 (2)

$117,563 $391,875 $783,750

January 1, 2021 (3)

January 1, 2021 (4)

$243,750 $487,500 $975,000

January 1, 2021 (5)

$1,267,500 (1)

Michael Dippold January 1, 2021 (2)

$99,960 $333,200 $666,400

January 1, 2021 (3)

January 1, 2021 (4)

$200,000 $400,000 $800,000

January 1, 2021 (5)

$1,040,000 (1)

Mark Dorfman January 1, 2021 (2)

$83,955 $279,851 $559,702

January 1, 2021 (3)

January 1, 2021 (4)

$140,000 $280,000 $560,000

January 1, 2021 (5)

Sally Wallace January 1, 2021 (2)

$85,964 $286,546 $573,092

January 1, 2021 (3)

January 1, 2021 (4)

$140,000 $280,000 $560,000

January 1, 2021 (5)

________________

(1) This award only has one potential payout, subject to the NEO’s continued employment through the applicable vesting date and there are no threshold or maximum levels for the award.

(2) These amounts represent cash awards that may be earned under the Company’s Incentive Compensation Plan (“ICP”).

The threshold assumes minimal financial performance permitted under the ICP, and no individual performance objectives achieved.

The value earned can be found in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column.

Refer to “Part III.

Compensation Discussion and Analysis—Components of Compensation Program—Annual Incentive Compensation” for a description of these programs and the amounts earned by each NEO under each program for 2021.

(3) These amounts represent estimated future payouts of the retention component of cash awards issued in January 1, 2021 under the Company’s Long Term Incentive Plan (“LTIP”).

(4) These amounts represent estimated future payouts of the performance component of cash awards issued in January 1, 2021 under the LTIP and payable in 2024.

(5) These amounts represent estimated future payouts of cash awards granted under the LTIP in 2019 and 2020, that will be vested and payable in 2022 and 2023.

These awards were converted on January 1, 2021 into retention time-based awards so that the awards will be paid out as if target performance has been achieved if the NEO remains continuously employed by the Company through the applicable vesting dates.

See Part III.

“Compensation Discussion and Analysis—Components of Compensation Program—Long-Term Incentives” for a description of these programs and the amounts earned by each NEO under each program for 2021.

PENSION BENEFITS AS OF DECEMBER 31, 2021

The following table lists the pension program participation and actuarial present value of the NEO with a defined benefit pension at December 31, 2021.

No other NEOs participate in a defined benefit pension.

PENSION BENEFITS

Name Plan Name (1)

Number of Years

Credited Service Present Value of

during the last

Sally Wallace Naval Power Systems Pension Plan 15.9 $639,896 $ —

________________

(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 Sally Wallace as of December 31, 2021 is $639,896, which is based on a discount rate of 2.63% and the PRI-2012 mortality table projected using MP-2021 with white collar adjustment.

The PVAB for her as of December 31, 2020 was $662,058, which is based on a discount rate of 2.23% and the PRI-2012 mortality table projected using MP-2020 with white collar adjustment.

So the change in her PVAB is a decrease of $22,162, which was caused primarily by the change in the discount rate, the mortality assumption 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.

The Pension Plan for Employees of DRS Naval Power Systems, Inc.

Certain employees were grandfathered to participate in the Pension Plan at DRS Naval Power Systems, Inc., a Company-sponsored, tax-qualified, noncontributory defined-benefit plan (the “Pension Plan”).

The Pension Plan was amended in October 2011 to freeze benefits for participants as of December 31, 2011.

Benefits under the Pension Plan are accrued benefits calculated using the final average pay formula, with an early retirement option at age 55, and normal retirement at age 65.

Additional payment options may be available including a lump sum, period certain, and social security adjustment options if the participant retires early.

Early retirement benefits, after age 55, are subject to a reduction schedule based on the participant’s age at commencement and credited service.

This projected benefit is not subject to cost-of-living adjustments.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

As discussed under “Components of Compensation Program—Benefits and Perquisites— Executive Severance Plan” NEOs may be entitled to certain amounts under the ICP and LTIP on a termination of employment in certain limited circumstances.

Additionally, pursuant to the Leonardo DRS, Inc.

Executive Severance Plan as in effect as of May 2021, NEOs are eligible for certain “double trigger” severance benefits in the event of a qualifying termination of an NEO’s employment up to 24-months after a change in control occurs.

No payments or benefits would be payable to an NEO solely as a result of a change in control of the Company.

This section estimates the payments that would be received by an NEO upon a termination of employment effective as of December 31, 2021.

Name Termination due to Death (1)

Termination due to Disability Involuntary Termination without Cause Termination without Cause or for Good Reason in connection with a Change in Control

Lynn $14,285,200 $9,960,200 (2)

$13,169,466 $15,715,636

John Baylouny $1,941,401 $1,441,400 (2)

$2,253,126 $4,973,093

Michael Dippold $1,698,567 $1,198,567 (2)

$1,953,590 $4,270,725

Mark Dorfman $1,402,167 $902,167 (2)

$1,588,961 $3,418,290

Sally Wallace $1,376,867 $876,867 (2)

$1,571,563 $3,454,892

(1) Payments in the event of death include the life insurance benefit which would be paid by the company’s third-party 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 2/3% 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 .

Employment Agreement

In 2021 under William Lynn’s employment agreement dated May 2021, he was eligible for certain severance benefits in the event of other types of termination, including death, disability or involuntary termination without cause.

In the event of a death or disability on December 31, 2021, he would be eligible for the life insurance or disability insurance benefit, payment of unvested grants at target under the LTIP for 2019, 2020, and 2021, and a prorated annual incentive compensation award at target.

In the event of a termination without cause on December 31, 2021, he would be eligible for 2.5 times the sum of his annual base salary and the target incentive compensation bonus, payment for unpaid prior year annual incentive compensation bonus, if applicable, and unvested grants of the retention component of the LTIP for 2019, 2020, 2021 which would continue to vest according to the vesting schedule, and the unvested grant of the performance component for the year in which termination occurs (unvested performance component awards for 2022 and 2023 would be forfeited), and 12 months of company-paid COBRA benefits.

Payments would be conditional upon a fully executed separation and release agreement.

The Company’s other NEOs, John Baylouny, Michael Dippold, Mark Dorfman, and Sally Wallace have no formal employment agreements.

Involuntary Termination without Cause

In May of 2021, John Baylouny, Michael Dippold, Mark Dorfman, and Sally Wallace were included in the approved Executive Severance Plan.

Under the Executive Severance Plan, in the event of an involuntary termination without cause on December 31, 2021, the eligible NEOs would have received, base salary of 18-months, pro-rated annual incentive plan, payable at the same time and in the same manner as other plan participants, and the LTIP grant awards which would vest in 2021, with payment at

the same time and in the same manner as other plan participants, and 18-months of company-paid COBRA.

Payments would be conditional upon a fully executed separation and release agreement.

Prior to May 2021, if an involuntary termination without cause would have occurred, at the company’s discretion in exchange for providing severance benefits, the employee must have agreed to and be in compliance with ongoing confidentiality and cooperation obligations, non-competition, and non-solicitation covenants for a period of 12-months following termination.

Generally, our separation pay benefits are 12-months of base salary, 12-months of company-paid COBRA, and outplacement services.

Under the terms of the annual incentive compensation plan, if the employee is terminated after July 1, 2021, the administrator of the plan may authorize an earned award, reflecting the employee’s participation for a portion of the plan year (“pro-rated award”).

The pro-rated award would be based on performance, and payable in March 2022.

Under the terms of the LTIP, if the employee is terminated on or after December 31, 2021 but before payment, the administrator of the plan may have authorized an earned award based on performance.

All future awards under the long-term incentive plan would be forfeited.

Death or Disability

Under the Executive Severance Plan, in the event of a death or disability on December 31, 2021, John Baylouny, Michael Dippold, Mark Dorfman, and Sally Wallace, would be eligible for benefits under the company’s group term life insurance and accidental death and dismemberment, and disability plan.

Under the terms of our ICP, the administrator may authorize a pro-rated award payment, payable at the same time in the same manner as earned award payments to other ICP participants, and the administrator may authorize a pro-rated LTIP award payment for a portion of the plan year or cycle in which employment terminated, payable at the same time in the same manner as payments to other LTIP participants.

Payments would be paid to the NEO or, in the case of death, to his or her estate.

Written Release

In all cases, except for death, where separation benefits are being provided by the Company, the NEO is required to execute a written separation and release agreement in order to be eligible for the severance benefits.

In 2021, each NEO will be a participant in the Executive Severance Plan which will cover change in control with a double-trigger, and non-change in control terminations.

Employment Agreement for Chief Executive Officer, William J.

The board of directors approved a new employment agreement for Mr.

Lynn, effective as of June 7, 2021, to continue to serve as the chief executive officer of the Company and chairman of the board of directors of the Company.

Lynn will be entitled to a base salary of $1,157,249 and eligible to participate in our annual incentive program with a target award of 110% of his base salary and a maximum earned award of 200% of the target award.

Lynn will be eligible to participate in the LTIP with a target award of $3,580,000.

Lynn is entitled to receive group health, dental, hospitalization, life and disability insurance benefits that are in effect as of the effective date of his employment agreement.

Lynn is also eligible to participate in other welfare and retirement benefit plans or programs offered to senior executives at the Company.

Term life insurance will provide Mr.

Lynn’s beneficiaries with a death benefit equal to $4,000,000 and a death benefit of $325,000 that is subject to age-related reductions after reaching the age of 65.

Lynn will be entitled to four weeks of paid vacation, coverage under the directors’ and officers’ insurance policy, and an executive allowance program of $40,000.

Lynn will be reimbursed for reasonable legal expenses, up to $10,000, in connection with the negotiation and documentation of his employment agreement.

Upon voluntarily termination of employment through retirement on one hundred eighty days’ prior written notice to the Company, Mr.

Lynn will be entitled to (i) his base salary and unused vacation days accrued through the effective date of termination of employment;

(ii) any unpaid earned awards under the ICP for any completed prior fiscal year;

(iii) his target award under the ICP for the full fiscal year in which he retires, payable at the same time as ICP awards are paid to other participants;

(iv) any unvested award payments under the LTIP for 2019 and 2020 will be paid out at the same time and manner as awards are made to other participants ( provided , however, that in any event such payment must be made within sixty days of the applicable vesting date);

(v) any unvested retention component of an LTIP award for 2021 and beyond will continue to vest on its vesting schedule, provided that his employment continued for a minimum of 6-months after the date of grant of such awards;

(vi) and any unvested performance component of an LTIP award for 2021 and beyond will vest pro rata in accordance with its vesting schedule, based on the date the employment terminates, subject to the satisfaction of the performance goals set forth in the applicable award agreement and subject to compensation committee approval;

(vii) provided, that in the event of a subsequent Change of Control (as defined under the Executive Severance Plan) prior to the vesting of all of the awards granted under the LTIP, such awards will be treated no less favorably than those of continuing employees, subject to any applicable proration;

and (viii) COBRA coverage for eighteen months.

Retirement generally means voluntary termination of employment by Mr.

Lynn after he reaches the age of 65 and subject to his providing notice to the Company at least 180 days prior to his retirement.

Upon a termination of employment for “cause” as defined in his employment agreement, Mr.

Lynn will be paid his base salary and unused vacation days accrued through the effective date of termination of employment and any unpaid earned awards under the ICP for any completed prior fiscal year, and any benefits owed to him under the Company’s benefit plans.

Upon a termination of employment for “death” or “disability" as defined in his employment agreement, Mr.

Lynn or his beneficiaries will be entitled to receive, in addition to any regular life insurance benefits paid by the Company, his base salary and unused vacation days accrued through the effective date of termination of employment and any unpaid earned awards under the ICP and any benefits owed to him under the Company’s benefit plans.

Any unvested target awards under the LTIP will fully vest on the date of termination of employment, payable in accordance with the terms of the LTIP.

Further, the compensation committee may authorize a pro-rated award payment under the ICP to Mr.

Lynn or his beneficiaries, reflecting the participation for the portion of year in which the employment is terminated.

Upon a termination of Mr.

Lynn’s employment by the Company or by Mr.

Lynn due to a material breach of the Company, other than terminations of employment due to cause, death, or disability, Mr.

Lynn will be entitled to a lump sum payment equal to two and one-half times the sum of his base salary and target award under the ICP, and any unpaid ICP award earned for the last full fiscal year prior to the termination of employment.

Lynn will also be eligible for unvested award payments for 2019 and 2020 awards granted under the LTIP payable in the same manner and at the same time as paid to other participants.

For LTIP awards granted for 2021 and beyond, Mr.

Lynn will be eligible for any unvested retention component of an LTIP award and these awards will continue to vest in accordance with the vesting schedule, and any performance component of an LTIP award will vest pro rata in accordance with its vesting scheduled based on the date his employment terminates, and will be subject to satisfaction of the performance goals as set forth in the LTIP as determined by the compensation committee.

In the event of a subsequent Change of Control (as defined under the Executive Severance Plan) prior to the vesting of all of the awards granted to you under the LTIP, such awards will be treated no less favorably than those of continuing employees, subject to any applicable proration.

Lynn will also be entitled to payment or reimbursement for COBRA premiums for health, dental and hospitalization insurance and continued participation in, and payment of premiums by the Company for, life insurance and other welfare

benefits had he remained employed at the Company for one year after the date his employment is terminated.

The employment agreement also contains a confidentiality provision that applies during the term of employment and following any termination of employment, a non-competition provision that applies during the term of employment and for one year following any termination of employment that results in severance benefits and an employee non-solicit provision that applies during the term of employment and for two years following any termination of employment.

2021 DIRECTOR COMPENSATION

We compensate each non-employee director for service on the board of directors.

The CEO and compensation committee review director compensation periodically.

In consideration of the duties performed each director receives a fixed annual cash retainer, payable quarterly in arrears.

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 in with the Company’s policies regarding reimbursement of business expenses and are approved by the CEO.

Name Fees Earned or Paid

in Cash ($) Total (1)

Frances Townsend $ 200,000 $ 200,000

Philip Odeen $ 150,000 $ 150,000

General George Casey, Jr.

$ 150,000 $ 150,000

Kenneth Krieg $ 200,000 $ 201,842

Carey $ 200,000 $ 200,986

Peter Marino $ 200,000 $ 201,195

Mary Gallagher $ 150,000 $ 150,000

Gail Baker $ 112,500 $ 114,322

(1) Total includes reimbursements for reasonable expenses incurred for travel or other business purposes

Directors who are our employees do not receive any compensation from us for their service on our board of directors.

The information required by Item 11 is incorporated by reference herein to the Proxy Statement sections entitled “Directors and Corporate Governance - Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report.” Notwithstanding anything indicating the contrary set forth in this Report, the “Compensation Committee Report” section of the Proxy Statement shall be deemed to be “furnished” not “filed” for purposes of the Securities Exchange Act of 1934, as amended.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

All the shares of our common stock are owned by US Holding, a wholly owned subsidiary of Leonardo S.p.A.

The following table sets forth information as of March 28, 2022 with respect to the ownership of our common stock by:

• each person known to own beneficially more than five percent of our common stock, including the selling stockholder;

• each of our directors and prospective directors;

• each of our named executive officers;

• all of our current executive officers, directors and prospective directors as a group.

The amounts and percentages of shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities.

Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security.

A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days.

Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage.

Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

Percentage computations are based on approximately 145 million shares of our common stock outstanding as of March 28, 2022 (after giving effect to a 1,450,000-for-1 forward stock split on our common stock effected on February 25, 2021) .

Except as otherwise indicated in these footnotes, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock.

Unless otherwise set forth in the footnotes to the table, the address for each listed stockholder is c/o 2345 Crystal Drive, Suite 1000, Arlington, Virginia 22202.

Name of Beneficial Owner Number of

Shares Owned Percent of

Leonardo S.p.A.

145,000,000 100.0

Gail Baker — —

Gallagher — —

General George W.

All directors and executive officers as a group (13 persons) — —

______________

(1) Leonardo S.p.A., as the parent of US Holding, beneficially owns all shares of our common stock owned of record by US Holding.

Leonardo S.p.A.

is a public company with shares listed on the Milan Stock Exchange.

The address of Leonardo S.p.A.

is Piazza Monte Grappa n.

4, 00195 Rome, Italy.

The information required by Item 12 is incorporated by reference herein to the Proxy Statement sections entitled “Stock Ownership of Management Table,” “Compensation Discussion and Analysis,” “Executive Compensation” and “Persons Owning More than 5% of Leonardo DRS Common Stock.”

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

Policies and Procedures for Related Person Transactions

Our audit committee has the primary responsibility for reviewing and approving or disapproving “related-party transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or may have a direct or indirect material interest.

Our policy regarding transactions between us and related persons provides that a related person is defined as a director, executive officer, nominee for director or greater than 5% beneficial owner of our securities, in each case since the beginning of the most recently completed year, and any of their immediate family members.

Our audit committee charter provides that our audit committee will review and approve or disapprove any related-party transactions.

Relationship with Leonardo S.p.A.

We are, an indirect wholly owned subsidiary of Leonardo S.p.A.

Proxy Agreement

We have entered into a proxy agreement, dated as of October 26, 2017, with the proxy holders, Leonardo S.p.A., US Holding and the DoD.

The parties to the proxy agreement have entered into a commitment letter, dated as of February 26, 2021, as to the form and content of the amended and restated proxy agreement which allows us to operate as if the amended and restated proxy agreement were already in effect.

The following description of the proxy agreement therefore reflects the terms of the proxy agreement as it will be amended and restated, in accordance with the commitment letter.

The material terms of the amended and restated proxy agreement and the commitment letter are discussed below and the form of the amended and restated proxy agreement and the commitment letter have been filed as exhibits to this Annual Report.

Leonardo S.p.A.

owns the entire share capital of our immediate parent, US Holding, which, in turn, beneficially owns 100% of the voting power of our outstanding common stock.

As a result, we are deemed to be under FOCI under the NISPOM, which establishes procedures and requirements for government contractors, such as our company, with regard to classified information.

Furthermore, the Italian state beneficially owns approximately 30.2% of Leonardo S.p.A.’s voting power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.).

A company is considered to be operating under FOCI whenever a foreign interest has the power, direct or indirect, whether or not exercised, and whether or not exercisable, to direct or decide matters affecting the management or operations of that company in a manner that may result in unauthorized access to classified information, may adversely affect the performance of classified contracts, or may undermine U.S.

security or export controls.

In order to be permitted to maintain our security clearances and our access to classified data and to perform or bid on classified programs, we are required to mitigate FOCI, which we have done by entering into the proxy agreement.

Among other things, the proxy agreement:

• provides that the shares of our common stock owned directly or indirectly by Leonardo S.p.A.

are voted through proxy holders, who must be independent from current and prior affiliation with Leonardo S.p.A.

and its subsidiaries (including US Holding and us) (subject to limited exceptions discussed below) and must maintain adequate security clearance;

• provides that the proxy holders are appointed by our immediate parent US Holding (in consultation with Leonardo S.p.A.), but the appointment is subject to approval of the DCSA, an agency of the DoD, and that the proxy holders must be members of our board of directors;

• restricts our ability to share facilities and personnel with and receive certain services from Leonardo S.p.A.

or its other subsidiaries;

• requires us to maintain a government security committee of our board of directors;

• regulates meetings, visits and communications that are not deemed to be routine business visits between us and Leonardo S.p.A.

or its other subsidiaries.

The proxy agreement restricts the ability of Leonardo S.p.A.

and US Holding to control our operations, as described further below.

The proxy agreement will automatically terminate, among other reasons, if US Holding holds less than 50% of our outstanding shares of common stock and the DCSA determines that FOCI mitigation is no longer necessary.

The proxy agreement has been filed as an exhibit to this Annual Report.

Proxy Holders

The proxy agreement requires the appointment of five proxy holders, who must be independent from current and prior affiliation with Leonardo S.p.A.

and its subsidiaries (including US Holding and us), other than prior service as a proxy holder or as an outside director of us or a proxy agreement affiliate (as defined below), and maintain adequate security clearance, to vote the shares of our common stock owned directly or indirectly by Leonardo S.p.A.

Proxy holders are appointed by US Holding after reasonable consultation with Leonardo S.p.A.

and approval by the DCSA and serve for staggered three-year terms.

During their terms, proxy holders may only be removed (i) for acts in violation of the proxy agreement, including the inability to protect the legitimate economic interest of US Holding, upon petition by US Holding to DCSA which may be granted or denied by DCSA in its sole discretion or (ii) for gross negligence or willful misconduct.

Upon expiration of a proxy holder’s term, or the death, resignation, removal or inability to act of any proxy holder, the proxy holder may be reappointed or replaced by US Holding after consultation with Leonardo S.p.A.

and approval by DCSA.

Until a successor proxy holder accepts appointment, the remaining proxy holders may exercise all of the rights, powers and privileges of the proxy holders and if no proxy holders remain, the chairman of our board shall be automatically vested with all rights, powers, authorities and immunities of the proxy holders for an interim period until a new proxy holder is appointed by US Holding and approved by DCSA.

The current proxy holders and the commencement and expiration of their terms are as set forth in the table below.

Proxy Holder Term Commencement Term Expiration

Carey January 1, 2018 December 31, 2022

Krieg January 1, 2018 December 31, 2024

Marino January 1, 2018 December 31, 2022

Odeen January 1, 2018 June 30, 2022

Townsend January 1, 2018 December 31, 2024

The proxy agreement confers on the proxy holders the right to vote US Holding’s shares of our common stock in the same manner and to the same extent as if they were the absolute owners of such shares in their own right.

All actions of the proxy holders with respect to US Holding’s shares of our common stock require a majority vote of the proxy holders.

Each proxy holder is entitled to one vote.

In exercising their power as proxy holders and fulfilling their duties as members of our board, the proxy holders are directed to seek to protect the legitimate economic interests of our shareholders and to act in a manner consistent with their fiduciary duties.

The proxy holders are permitted to vote for or consent to the following matters in their sole and absolute discretion, without consultation with US Holding or Leonardo S.p.A.:

• the election of additional directors who are not proxy holders, and who are proposed by US Holding after reasonable consultation with the nominating and corporate governance committee of our board;

• any changes or amendments to our certificate of incorporation or bylaws involving matters other than those described below;

• the sale or disposal of our property, assets or business other than as described below;

• our incurrence of debt or any pledge, mortgage or encumbrance of any of our assets other than as described below;

• any action necessary to effect a public offering other than as described below;

• any action with respect to the foregoing, or any other matter affecting us and not specifically described below that US Holding might lawfully exercise.

The proxy holders may only vote for or consent to the following matters with the express written approval of US Holding:

• the sale or disposition of any of our subsidiaries, property, assets or business or those of our subsidiaries or the purchase by us or our subsidiaries of any business, properties, assets or entities, other than in the ordinary course of business, in any individual transaction where our investment (based on our share of the enterprise value) exceeds two percent (2%) of our revenues for the immediately preceding year or where our investment, in the aggregate, for all such sales or dispositions in a calendar year, exceeds an amount equal to five percent (5%) of our revenues for the immediately preceding year;

• the incurrence of debt or pledge, mortgage, lease or other encumbrance of our assets of those of our subsidiaries in connection with the incurrence of debt, if such incurrence would cause the aggregate outstanding principal amount of all debt of us and our subsidiaries to exceed a target leverage ratio set forth in our then-current operating plan, excluding current debt incurred for purposes of funding day-to-day working capital requirements in the ordinary course of business;

• any merger, consolidation, reorganization or dissolution of us of any of our subsidiaries except as permitted above and excluding transactions solely among our wholly owned subsidiaries;

• the filing or making of any petition by us or our subsidiaries under the federal bankruptcy laws or any similar law or statute of any state or any foreign country.

In addition, the proxy holders may only vote to declare or suspend dividends after prior consultation with US Holding.

We and US Holding are required to jointly and severally indemnify and hold each proxy holder harmless from any and all claims arising from or in any way connected to his or her performance as a proxy holder except for his or her own individual gross negligence or willful misconduct.

Board of Directors

The proxy agreement requires that all five proxy holders serve as members of our board.

Additionally, our board must elect a chair and, if the chair is not one of the proxy holders, our board must elect a lead outside director from among the proxy holders.

Under the terms of the proxy agreement, the proxy holders shall, in their sole discretion and in their capacity as members of the nominating and corporate governance committee of our board, nominate four additional individuals who are not proxy holders, selected from candidates proposed by US Holding, in consultation with the nominating and corporate governance committee, as candidates for election to our board (the “non-proxy holder director nominees”).

The non-proxy holder director nominees shall include (i) our chief executive officer and (ii) three additional individuals.

If any non-proxy holder director nominee has a prior or existing contractual, financial or employment relationship with Leonardo S.p.A., such that they would not be an “independent director”, DCSA must approve their selection.

The nominating and corporate governance committee of our board, which will be comprised solely of proxy holders, will nominate the proxy holders for election as directors at any meeting of our 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 our board for the succeeding year.

The proxy holders may remove any non-proxy holder director nominee from our board by majority vote and after consultation with US Holding.

The proxy agreement requires our board to establish the GSC, consisting of all proxy holders, our chief executive officer, our general counsel, our CFSO and our TCO, to the extent that such officers have adequate security clearances.

The role of the GSC is to ensure that we maintain policies and procedures, including a technology control plan, to safeguard classified information in our possession and to ensure that we comply with the proxy agreement, the ITAR, the EAR, and the NISPOM.

The proxy agreement also requires that the audit committee of our board appoint an independent auditor to conduct an annual audit of our books and records which may be the same independent auditor used by Leonardo S.p.A.

or US Holding unless the GSC concludes that measures are not reasonably available to ensure that performance of the audit by such auditor complies with the proxy agreement.

Facilities, Personnel and Services

The proxy agreement restricts our ability to share facilities and personnel with and receive certain services from (i) Leonardo S.p.A., (ii) each entity that, to our knowledge, Leonardo S.p.A.

directly or indirectly controls, is directly or indirectly controlled by (other than DRS itself and our subsidiaries), or is directly under common control with, except for any entity operating under an effective DCSA FOCI mitigation agreement (each of (i) and (ii), a “proxy agreement affiliate”) or (iii) any director, officer, employee, beneficial owner of greater than 5% of a class of equity securities (as determined by voting or investment control over the securities), agent or other representative of a proxy agreement affiliate (together with the proxy agreement affiliates, the “proxy agreement affiliated group”).

Our officers may only serve as officers of any of the proxy agreement affiliated group and vice versa with the approval of the DCSA and the GSC.

DRS may only collocate facilities and personnel with the proxy agreement affiliated group with the prior written approval of the DCSA pursuant to the submission by DRS of a facility location plan describing the location of the relevant facilities and which may include, at the DCSA’s request, information such as maps and floor plans of such facilities.

Furthermore, DRS and the proxy agreement affiliated group may only engage in specified “affiliated operations” (as described below) pursuant to an AOP, setting out policies and procedures regarding services provided to, provided by, or exchanged between DRS and the proxy agreement affiliated group, and approved by the DCSA.

Any AOP must, at a minimum, require the GSC to notify the DCSA of any proposed category of affiliated operations and obtain DCSA approval prior to accepting or providing any associated affiliated operations, contain procedures for ensuring that any such services do not circumvent the requirements of the proxy agreement and require the GSC to provide the DCSA with an annual written certification that it is effectively monitoring any affiliated operations and that such affiliated operations do not allow the proxy agreement affiliated group to exercise prohibited control or influence with respect to the management or business of DRS.

Affiliated operations include (i) sharing of employees between DRS and the proxy agreement affiliated group, (ii) receipt by both DRS and the proxy agreement affiliated group of third party professional services such as accounting, legal, tax, information technology or business consulting from the same service provider and (iii) the provision of products or services between DRS and the proxy agreement affiliated group, where the provision of such products or services could result in the potential for operational leverage by the proxy agreement affiliated group over DRS.

See “—Affiliated Operations Plan (AOP) Services Agreements” below.

Sharing of third-party services between DRS and the proxy agreement affiliated group may be approved by the majority of the GSC but such approval is subject to DCSA review and the DCSA may require the GSC to rescind any such approval.

Sharing of services and products between DRS and the proxy agreement affiliated group pursuant to contracts and subcontracts,

joint research, development, marketing or other type of teaming arrangement entered in connection with a commercial pursuit or joint business venture may be approved by the majority of the proxy holders and must be disclosed to the DCSA.

If DRS expects to use technology products or services of the proxy agreement affiliated group in connection with classified contracts, DRS must notify each applicable government contracting activity and provide the GSC with an annual report regarding such the notifications.

Meetings, Visits and Communications

The proxy agreement regulates meetings, visits and other communications between us and the proxy agreement affiliated group.

Representatives of Leonardo S.p.A.

and US Holding are required to be invited to meetings of the proxy holders but the agenda and minutes for such meetings must be provided to the DCSA for its review.

Classified and controlled unclassified information may only be disclosed to Leonardo S.p.A.

and its subsidiaries (including US Holding) as specifically authorized by applicable law or regulation.

All proposed visits (which may include teleconferences and videoconferences), other than routine business visits, between us and the proxy agreement affiliated group must be approved in advance by a proxy holder.

Routine business visits are those that (i) are made by persons other than key management personnel, (ii) do not involve the transfer or receipt of classified information, (iii) either do not involve export-controlled information, or involve the approved transfer of export-controlled information under a proper license or authorization, (iv) do not relate to activities bearing upon our performance of classified contracts, and (v) pertain only to the commercial aspects of our business.

Routine business visits may include visits for the purpose of discussion of financial performance and securities law compliance, arm’s-length business, U.S.

government export control compliance and approved affiliated operations.

As long as our DCSA security rating is “satisfactory” or above, routine business visits may be approved by the CFSO, rather than a proxy holder, and all such visits may be approved in advance for a period of up to 180 days.

Strictly social visits between our personnel and the proxy agreement affiliate group are not prohibited but written reports of such visits must be submitted to the CFSO for review by the proxy holders.

The GSC must maintain documentation related to all meetings, visitations and communications, together with appropriate approvals or disapprovals and reports, for review by the DCSA.

Compliance and Termination

The proxy holders are required to meet as necessary to satisfy their responsibilities under the proxy agreement and our board must meet at least four times per year in addition to any separate meetings of the proxy holders.

Additionally, representatives of the DCSA, the proxy holders, other members of the GSC and certain other officers of DRS, Leonardo S.p.A.

and US Holding are required to meet annually to review the purpose and effectiveness of the proxy agreement.

The president of DRS and the chairman of the GSC are required to submit an annual report to the DCSA on the implementation of and compliance with the proxy agreement, accompanied by a certificate from our corporate secretary certifying that each of the representations and warranties in the proxy agreement remain true and correct on the date of such report or providing updates as applicable.

Under the proxy agreement, the DoD may impose any additional security safeguards that it believes necessary to adequately safeguard classified and controlled unclassified information.

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.

The proxy agreement will expire by its terms five years from its effective date.

Prior to that date, DCSA may terminate the proxy agreement if it deems the proxy agreement 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 the DCSA determines

that terminating is necessary for national security or, in the DCSA’s sole discretion, upon petition by us or US Holding.

Additionally, the proxy agreement will be automatically terminated upon the sale of our business or all of US Holding’s interest in us to 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 the DCSA determines that FOCI mitigation is no longer necessary.

Tax Allocation Agreement

We and US Holding have entered into a tax allocation agreement (the “tax allocation agreement”), dated as of November 16, 2020, with members of an affiliated group (the “affiliated group”), as defined in Section 1504(a) of the Tax Code, members of one or more consolidated, combined, unitary or similar state tax groups (the “state members”) and additional parties who are part of an “expanded affiliated group” for certain tax purposes.

The agreement provides for the method of computing and allocating the consolidated U.S.

federal tax liability of the affiliated group among its members and of allocating any state group tax liabilities among the state members for the taxable year ending December 31, 2020 and each subsequent year in which the parties are members of a group (whether federal or state).

The tax allocation agreement also provides for reimbursement of US Holding and/or DRS for payment of such tax liabilities, for compensation of any member for use of its “net operating loss” or “tax credits” in arriving at such tax liabilities and the allocation and payment of any refund arising from a carryback of net operating losses or tax credits from subsequent taxable years.

Under the tax allocation agreement, the parties have agreed to calculate and allocate their respective tax liabilities and other tax attributes for taxable years beginning with the first consolidated taxable year that included DRS (i.e., the taxable year ended March 31, 2009) as if the tax allocation agreement was then in effect.

The tax allocation agreement also allocates governance and decision-making rights, obligations and responsibilities in respect of the tax matters governed by the agreement including preparation and filing of covered returns, audits of covered returns and ensuring that payments and reimbursements in respect of covered returns are timely made.

The tax allocation agreement provides for administration of the agreement and any related tax matters by us, in our reasonable discretion, with respect to any group to which we belong in any taxable year in which we are an affiliated group member or state member.

For any taxable year in which we are not an affiliated group member or a state member, as applicable, US Holding will appoint an administrator.

The tax allocation agreement will require the parties, including those who do not file consolidated, combined, unitary or similar tax returns with the other parties but whose operations may impact such returns filed by the other parties, to reasonably cooperate with US Holding and the administrator in carrying out the provisions of the agreement, including providing the administrator access to their books and records and other relevant information.

The tax allocation agreement also requires the parties to cooperate in good faith, taking into account each relevant member’s tax consequences, in respect of certain specified matters as well as any other tax-related decision or matter the administrator determines, in its reasonable discretion, with the consent of US Holding where appropriate.

The tax allocation agreement is effective as of the first day of the consolidated return year beginning October 14, 2008 and will terminate upon the written agreement of the parties.

The tax allocation agreement has been filed as an exhibit to this Annual Report and the discussion of the tax allocation agreement in this Annual Report is subject to and qualified in its entirety by reference to the tax allocation agreement.

To the extent that DRS is no longer included as a consolidated member of the U.S.

federal and state returns of US Holding, we will be required to file standalone tax returns as of the date of the deconsolidation.

Pursuant to the tax allocation agreement, we will generally retain our historic tax assets and will be able to offset future taxable income against these attributes.

Accordingly, we do not anticipate any significant tax consequences as a result of exiting the US Holding consolidated tax group.

Trademark License Agreement

We have entered into a trademark license agreement (the “trademark license agreement”) with Leonardo S.p.A.

on April 28, 2021 pursuant to which Leonardo S.p.A.

grants us, subject to certain limitations, a non-exclusive license to use certain trademarks (the “licensed marks”), including the name “Leonardo.” The Trademark License Agreement will remain in effect until it is terminated by Leonardo S.p.A.’s and our mutual agreement, or upon the occurrence of certain conditions, including Leonardo S.p.A.’s right to terminate should it no longer consolidate our financial results under IFRS in its consolidated financial statements.

After the term of the trademark license agreement, unless the trademark license agreement is terminated for uncured breach, we will be able to continue to use the licensed marks for a transition period (the “transition period”) of six months (which period is subject to an extension, capped at a total of six months (we can request an extension of such period), for any licensed mark the removal of which we cannot obtain government approvals for), but we will be required to use reasonable best efforts to transition to other trademarks.

A copy of the trademark license agreement has been filed as an exhibit to this Annual Report and the discussion of the trademark license agreement in this Annual Report is subject to and qualified in its entirety by reference to the form of trademark license agreement.

Affiliated Operations Plan (AOP) Services Agreements

Although we operate largely independently from Leonardo S.p.A., and the proxy agreement contains limitations on services that we may provide to and receive from Leonardo S.p.A.

and its affiliates, we, Leonardo S.p.A.

and Leonardo S.p.A.’s subsidiaries each provide certain services to the one another, share certain services and rely on certain third-party service providers to provide services pursuant to shared services contracts, subject to the terms of the proxy agreement and in accordance with our AOP, approved by the DCSA.

Leonardo S.p.A.

and its subsidiaries rely on certain contracts to which we are party for the provision of services that are important to Leonardo S.p.A.’s business.

Likewise, we rely on certain contracts for the provision of certain services to which Leonardo S.p.A.

or its subsidiaries are a party.

For so long as we are required to comply with the AOP approval requirement for certain services within our proxy agreement affiliated group (see Part III.

“Certain Relationships and Related Transactions and Director Independence—Relationship with Leonardo S.p.A.—Proxy Agreement—Facilities, Personnel and Services” above), the proxy agreement will govern our continued provision or procurement of certain services among us, Leonardo S.p.A.

and its subsidiaries and third-party service providers.

The proxy agreement, including the AOP approval requirement, is expected to remain in place until such time as FOCI mitigation is no longer legally required.

Our AOP currently governs the following types of arrangements:

• services Leonardo S.p.A.

or its subsidiaries (excluding us) receive pursuant to a contract with a third-party service provider, which Leonardo S.p.A.

or its subsidiaries then provide to us on a pass-through basis;

• services we receive pursuant to a contract with a third-party service provider, which we then provide to Leonardo S.p.A.

or its subsidiaries (excluding us) on a pass-through basis;

• certain services we receive directly from Leonardo S.p.A.

or its subsidiaries (excluding us);

• certain services we provide directly to Leonardo S.p.A.

or its subsidiaries (excluding us).

Specifically, we are currently authorized to provide support services to Leonardo S.p.A.

in the following functional areas:

• Compliance and Training

• Finance, Tax and Accounting

• Marketing and Communications

• Procurement and Supply Chain

The fees for each of the services to be provided under the AOP are mutually agreed upon as part of the negotiation of the services agreement and may vary on the basis of usage and other factors.

Although we seek to implement commercially reasonable terms (including fees for the services provided) that could have been negotiated with an independent third party, the terms of such agreement may later prove to be more or less favorable than arrangements we could make to provide these services internally or to obtain them from unaffiliated service providers in the future.

Transactions with Leonardo S.p.A.

As an indirect wholly owned subsidiary of Leonardo S.p.A., historically, we have entered into various transactions with Leonardo S.p.A.

and its subsidiaries in the normal course of business.

The transactions described below are between us and affiliates of Leonardo S.p.A.

that are not also subsidiaries of DRS.

We have related-party sales with Leonardo S.p.A.

and its other affiliates that occur in the regular course of business.

Related-party sales for these transactions are included in revenues and were $26 million, $16 million and $20 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The receivables related to these transactions with Leonardo S.p.A.

and its other affiliates of $5 million and $2 million, respectively, and payables of $8 million and $10 million, respectively, are included in accounts receivable and accounts payable in our consolidated balance sheet as of December 31, 2021 and 2020.

Financing Arrangements

In January 2009, the Company entered into a credit agreement with Finmeccanica S.p.A.

(now known as Leonardo S.p.A.) in the amount of $2 billion (the “2009 Credit Agreement”).

The 2009 Credit Agreement was subsequently assigned to US Holding and has a maturity of November 30, 2022.

The 2009 Credit Agreement provides for a term loan bearing interest at a rate of 7.5%, with interest payments due semi-annually on June 20 and December 20 in each year (the “7.5% Term loan”).

The outstanding balance of the 7.5% Term loan at December 31, 2021 and 2020 was $139 million and $139 million, respectively.

The reduction in the outstanding balance was due to the contribution by US Holding of $300 million to us by converting an equal amount of borrowings outstanding under the 7.5% Term Loan into additional paid in capital in December 2020.

In June 2017, we entered into an unsecured term loan with US Holding in the principal amount of $137.5 million, the proceeds of which were used to finance the acquisition of Daylight Solutions, Inc.

(the “Daylight Term Loan”).

The Daylight Term Loan had an outstanding balance of $78 million and $98 million at December 31, 2021 and 2020, respectively, which approximates its fair value.

The Daylight Term Loan matures on October 15, 2024.

The Daylight Term Loan has an interest rate of 5.0%, with interest payments due semi-annually on April 15 and October 15.

During April 2018, we were advanced an additional $50 million by US Holding under a term loan.

This term loan bears interest at 4.0% and had an initial maturity date of December 31, 2018, which was

extended until December 31, 2021.

This term loan was repaid in full, with no prepayment penalty, on December 19, 2020.

Credit Facilities

The 2009 Credit Agreement provides for a revolving credit facility available for our working capital needs (the “Revolving Credit Facility”).

As of December 31, 2021 and2020, the Revolving Credit Facility had a credit limit of $450 million and $350 million, respectively, and an interest rate of LIBOR plus 3.5%.

There is a commitment fee of 0.25% applied to the unused balance of the Revolving Credit Facility and there are no compensating balance requirements.

There was no balance on the Revolving Credit Facility as of December 31, 2021 and 2020.

We also maintain uncommitted working capital credit facilities with certain financial institutions in the aggregate of $60 million and $65 million at December 31, 2021 and 2020, respectively (the “Financial Institution Credit Facilities”), which are guaranteed by Leonardo S.p.A.

The primary purpose of the Financial Institution Credit Facilities is to support standby letter of credit issuances on contracts with customers and also includes a revolving facility with a maximum borrowing limit of $15 million, which bears interest at LIBOR plus 0.5%.

At December 31, 2021 and December 31, 2020, there was no balance outstanding on the revolving facility.

We had letters of credit outstanding of approximately $31 million and $30 million as of December 31, 2021 and 2020, respectively, which reduces the available capacity of the Financial Institution Credit Facilities by an equal amount.

Surplus Treasury Agreement

We entered into a Surplus Treasury Agreement with US Holding (the “Surplus Agreement”) in December 2019.

The Surplus Agreement allows us to advance excess funds to US Holding when funds are available.

The advances bear interest at LIBOR plus between 5 and 20 basis points depending on the tenor of the advance.

Employment Agreement

We have entered into a new employment agreement with our Chief Executive Officer, William J.

Lynn III, effective as of June 7, 2021.

For more information regarding the employment agreement with Mr.

Lynn, see Part III.

“Executive Compensation—New Employment Agreement for Chief Executive Officer, William J.

The information required by Item 13 is incorporated by reference herein to the Proxy Statement sections entitled “Related Person Transaction Reporting Compliance” and “Director Independence.”

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our independent registered public accounting firm is KPMG LLP , McLean, VA , Auditor ID:

The following table shows aggregate fees for professional services rendered by KPMG for the audit of our annual consolidated financial statements for the years 2021 and 2020 and fees billed for other services rendered by KPMG during those years.

Audit Fees 1 $ 3,870,549 $ 5,554,293

Audit-related services 2 $ 65,000 $ 2,351,440

Tax Services $ — $ —

All Other Services 3 $ 811,097 $ —

$ 4,746,646 $ 7,905,733

1 Audit fees for the consolidated financial statements, interim reviews and issuance of consents related to the filings of the Form S-1 and amendments.

2 Audit-related services are comprised of fees associated with audits of financial information used in the preparation of the consolidated financial statements of our ultimate parent, Leonardo S.p.A.

as well as fees for services in 2020 related to audits of our consolidated financial statements for historical periods included in our Form S-1 and amendments.

3 All Other Services are comprised primarily of fees related to due diligence and deal advisory services

The information required by Item 14 is incorporated by reference herein to the Proxy Statement section entitled “Fees Paid to Auditor.”

Exhibits and Financial Statement Schedules

1 unchanged sentence

Consolidated Statement of Earnings

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statement of Cash Flows

Consolidated Statement of Shareholders Equity

Consolidated Statements of Shareholders Equity

Notes to Consolidated Financial Statements (1 to 21)

2 unchanged sentences

Number Exhibit Description

3.1 Amended and Restated Certificate of Incorporation of Leonardo DRS, Inc.

(f/k/a DRS Technologies, Inc.) (as amended) (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Leonardo DRS, Inc.

(f/k/a DRS Technologies, Inc.) (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

3.3 Amended and Restated Certificate of Incorporation of Leonardo DRS, Inc., as in effect (incorporated by reference to Exhibit 3.3 of Amendment No.

1 to the Company’s Registration Statement on Form S-1 filed on March 9, 2021)

3.3(a) Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Leonardo DRS, Inc.

(incorporated by reference to Exhibit 3.2 of the Company’s Qu art erly Report on Form 10-Q filed on May 17, 2021)

3.4 Amended and Restated Bylaws of Leonardo DRS, Inc., as in effect (incorporated by reference to Exhibit 3.4 of Amendment No.

1 to the Company’s Registration Statement on Form S-1 filed on March 9, 2021)

10.2 Form of Amended and Restated Proxy Agreement by and among Leonardo DRS, Inc., the individual Proxy Holders signatories thereto, Leonardo US Holding, Inc., Leonardo – Società per azioni and the U.S.

Department of Defense (incorporated by reference to Exhibit 10.2 of Amendment No.

1 to the Company’s Registration Statement on Form S-1 filed on March 9, 2021)

10.3 Commitment Letter re Leonardo DRS, Inc.

Commitment to Mitigate Foreign Ownership, Control or Influence, dated as of February 26, 2021, by and among Leonardo DRS, Inc., Leonardo US Holding, Inc., Leonardo – Societ à per azioni and the U.S.

Department of Defense (incorporated by reference to Exhibit 10.3 of Amendment No.

1 to the Company’s Registration Statement on Form S-1 filed on March 9, 2021)

2.1 Stock Purchase Agreement, dated as of March 21, 2022, by and among SES Government Solutions, Inc., SES S.A., DRS Defense Solutions, LLC and DRS Global Enterprise Solutions, Inc.

and Leonardo DRS, Inc.

2.2 Agreement and Plan of Merger, dated as of June 21, 2022, by among RADA Electronic Industries LTD., Leonardo DRS, Inc.

and Blackstart LTD

2.2(a) Certain Waivers to and Amendments of the Agreement and Plan of Merger, dated June 21, 2022, by and among RADA Electronic Industries LTD., Leonardo DRS, Inc.

and Blackstart LTD, effective August 25, 2022

3.3 Amended and Restated Certificate of Incorporation of Leonardo DRS, Inc., as in effect

3.4 Amended and Restated Bylaws of Leonardo DRS, Inc., as in effect

10.1 Tax Allocation Agreement, dated as of November 16, 2020, by and among Leonardo US Holding, Inc., Leonardo DRS, Inc.

and the other signatories thereto (incorporated by reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-1 filed on March 9, 2021)

and the other signatories thereto

10.2 Trademark License Agreement , dated as of January 1, 2021, by and between Leonardo DRS, Inc.

and Leonardo – Societ à per azioni (incorporated by reference to Exhibit 10.6 of Post-Effective Amendment No.

1 to the Company’s Registration Statement on Form S-1 filed on June 11, 2021)

10.7† Employment Agreement between Leonardo DRS, Inc.

and Leonardo – Societ à per azioni

10.3 Commitment Letter re Leonardo DRS, Inc.

Department of Defense

10.4 First Amendment to Tax Allocation Agreement, dated November 16, 2020, by and among Leonardo US Holding, Inc., Leonardo DRS, Inc.

and Leonardo Aircraft, Inc., effective July 28, 2022

10.5 Second Amendment to Tax Allocation Agreement, dated November 16, 2020, by and among Leonardo US Holding, Inc., Leonardo DRS, Inc.

and Leonardo Aircraft, Inc., effective July 29, 2022

10.6 Form of Amended and Restated Proxy Agreement by and among Leonardo DRS, Inc., the individual Proxy Holders signatories thereto, Leonardo US Holding, Inc., Leonardo – Società per azioni and the U.S.

Department of Defense

10.7 Registration Rights Agreement, dated as of November 28, 2022, by and among Leonardo DRS, Inc., Leonardo S.P.A.

and Leonardo US Holdings, Inc.

10.8 Cooperation Agreement, dated as of November 28, 2022, by and among Leonardo DRS, Inc., Leonardo S.P.A.

and Leonardo US Holdings, Inc.

10.9 Credit Agreement dated as of November 29, 2022, by and among Leonardo DRS, Inc.

referred to therein, each of the lenders identified therein and Bank of America, N.A., as administrative agent

10.10† Employment Agreement , dated as of November 22, 2022, by and between Leonardo DRS, Inc.

and William J.

Lynn III (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on June 11, 2021)

10.8† Leonardo DRS Incentive Compensation Plan (incorporated by reference to Exhibit 10.8 of Post-Effective Amendment No.

1 to the Company’s Registration Statement on Form S-1 filed on June 11, 2021)

10.9† Leonardo DRS Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on June 11, 2021)

10.11† Leonardo DRS Incentive Compensation Plan

10.12† Leonardo DRS Long-Term Incentive Plan

10.13† Leonardo DRS, Inc.

Executive Severance Plan (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on June 11, 2021)

Executive Severance Plan

10.14† Leonardo DRS, Inc.

Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

10.12† Form of Founders Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.12 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

10.13† Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.13 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

10.14† Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.14 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

10.15† Form of Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.15 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

21.1 Subsidiaries (incorporated by reference to Exhibit 21.1 of the Company’s Registration Statement on Form S-1 filed on February 26, 2021)

31.1 Certificat ion by principal executive officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certificat ion by principal financial officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2022 Omnibus Equity Compensation Plan

10.15† Form of Restricted Stock Unit Award Agreement

10.16† Form of Director Indemnification Agreement

10.17† Form of Performance Restricted Stock Unit Agreement

21.1 Subsidiaries

23.1 Consent of Independent Registered Public Accounting Firm

23.2 Consent of Independent Registered Public Accounting Firm

31.1 Certification by principal executive officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification by principal financial officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification by principal executive officer pursuant to 18 U.S.C.

28 unchanged sentences

(Principal Accounting Officer)

Brothers Director

Carey Director

4 unchanged sentences

Krieg Director

Marino Director

/s/ Philip A.

Odeen Director

Salzman Director

/s/ Frances F.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures