EXHIBIT 10.8
HUNTINGTON INGALLS INDUSTRIES, INC.
TERMS AND CONDITIONS APPLICABLE TO
2011 RESTRICTED PERFORMANCE STOCK RIGHTS
GRANTED UNDER THE 2011 LONG-TERM INCENTIVE STOCK PLAN
          These Terms and Conditions (“Terms”) apply to certain “Restricted
Performance Stock Rights” (“RPSRs”) granted by Huntington Ingalls Industries,
Inc. (the “Company”) in 2011. If you were granted an RPSR award by the Company
in 2011, the date of grant of your RPSR award and the target number of RPSRs
applicable to your award are set forth in the letter from the Company announcing
your RPSR award grant (your “Grant Letter”) and are also reflected in the
electronic stock plan award recordkeeping system (“Stock Plan System”)
maintained by the Company or its designee. These Terms apply only with respect
to your 2011 RPSR award. If you were granted an RPSR award, you are referred to
as the “Grantee” with respect to your award. Capitalized terms are generally
defined in Section 10 below if not otherwise defined herein.
          Each RPSR represents a right to receive one share of the Company’s
Common Stock, or cash of equivalent value as provided herein, subject to vesting
as provided herein. The performance period applicable to your award is
January 1, 2011 to December 31, 2013 (the “Performance Period”). The target
number of RPSRs subject to your award is subject to adjustment as provided
herein. The RPSR award is subject to all of the terms and conditions set forth
in these Terms, and is further subject to all of the terms and conditions of the
Plan, as it may be amended from time to time, and any rules adopted by the
Committee, as such rules are in effect from time to time.
1. Vesting; Payment of RPSRs.
          The RPSRs are subject to the vesting and payment provisions
established (or to be established, as the case may be) by the Committee with
respect to the Performance Period. RPSRs that vest based on such provisions will
be paid as provided below. No fractional shares will be issued.
          1.1 Performance-Based Vesting of RPSRs. At the conclusion of the
Performance Period, the Committee shall determine whether and the extent to
which the applicable performance criteria have been achieved for purposes of
determining earnouts and RPSR payments. Based on its determination, the
Committee shall determine the percentage of target RPSRs subject to the award
(if any) that have vested for the Performance Period in accordance with the
earnout schedule established (or to be established, as the case may be) by the
Committee with respect to the Performance Period (the “Earnout Percentage”). Any
RPSRs subject to the award that are not vested as of the conclusion of the
Performance Period after giving effect to the Committee’s determinations under
this Section 1.1 shall terminate and become null and void immediately following
such determinations.
          1.2 Payment of RPSRs. The number of RPSRs payable at the conclusion of
the Performance Period (“Earned RPSRs”) shall be determined by multiplying the
Earnout Percentage by the target number of RPSRs subject to the award. The
Earned RPSRs may be paid out in either an equivalent number of shares of Common
Stock, or, in the discretion of the Committee, in cash or in a combination of
shares of Common Stock and cash. In the event of a cash payment, the amount of
the payment for each Earned RPSR to be paid in cash will equal the Fair Market
Value of a share of Common Stock as of the date the Committee determines the
extent to which the applicable RPSR performance criteria have been achieved.
RPSRs will be paid in the calendar year following the calendar year containing
the last day of the Performance Period (and generally will be paid in the first
75 days of such year).
2. Early Termination of Award; Termination of Employment.
          2.1 General. The RPSRs subject to the award shall terminate and become
null and void prior to the conclusion of the Performance Period if and when
(a) the award terminates in connection with a Change in Control pursuant to
Section 5 below, or (b) except as provided below in this Section 2 and in
Section 5, the Grantee ceases for any reason to be an employee of the Company or
one of its subsidiaries.
          2.2 Termination of Employment Due to Retirement, Death or Disability.
The number of RPSRs subject to the award shall vest on a prorated basis as
provided herein if the Grantee’s employment by the Company and its subsidiaries
terminates due to the Grantee’s Retirement, death, or Disability and, in each
case, only if the Grantee has completed at least six (6) consecutive calendar
months of

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employment with the Company or a subsidiary during the three-year Performance
Period. Such prorating of RPSRs shall be based on the number of full months the
Grantee was actually employed by the Company or one of its subsidiaries out of
the thirty-six month Performance Period. Partial months of employment during the
Performance Period, even if substantial, shall not be counted for purposes of
prorated vesting. Any RPSRs subject to the award that do not vest in accordance
with this Section 2.2 upon a termination of the Grantee’s employment due to
Retirement, death or Disability shall terminate immediately upon such
termination of employment.
          Death or Disability. In the case of death or Disability (a) the
Performance Period used to calculate the Grantee’s Earned RPSRs will be deemed
to have ended as of the most recent date that performance has been measured by
the Company with respect to the RPSRs (but in no event shall such date be more
than one year before the Grantee’s termination of employment), (b) the Earnout
Percentage of the Grantee’s RPSRs will be determined based on actual performance
for that short Performance Period, and (c) payment of Earned RPSRs will be made
in the calendar year containing the 75th day following the date of the Grantee’s
death or Disability (and generally will be paid on or about such 75th day).
          Retirement in General. Subject to the following provisions of this
Section 2.2, in the case of Retirement, (a) the entire Performance Period will
be used to calculate the Grantee’s Earned RPSRs, (b) the Earnout Percentage of
the Grantee’s RPSRs will be determined based on actual performance for the
Performance Period, and (c) payment of Earned RPSRs will be made in the calendar
year following the calendar year containing the last day of the Performance
Period (and generally will be paid in the first 75 days of such year).
          In determining the Grantee’s eligibility for Retirement, service is
measured by dividing (a) the number of days the Grantee was employed by the
Company or a subsidiary in the period commencing with his or her last date of
hire by the Company or a subsidiary through and including the date on which the
Grantee is last employed by the Company or a subsidiary, by (b) 365. If the
Grantee ceased to be employed by the Company or a subsidiary and was later
rehired by the Company or a subsidiary, the Grantee’s service prior to the break
in service shall be disregarded in determining service for such purposes;
provided that, if the Grantee’s employment with the Company or a subsidiary had
terminated due to the Grantee’s Retirement, or by the Company or a subsidiary as
part of a reduction in force (in each case, other than a termination by the
Company or a subsidiary for cause) and, within the two-year period following
such termination of employment (the “break in service”) the Grantee was
subsequently rehired by the Company or a subsidiary, then the Grantee’s period
of service with the Company or a subsidiary prior to and ending with the break
in service will be included in determining service for such purposes. For
purposes of determining the Grantee’s eligibility for Retirement pursuant to
this paragraph, service with the Northrop Grumman Corporation or its
subsidiaries prior to the Company’s separation from the Northrop Grumman
Corporation will be recognized in the same manner as service for the Company or
a subsidiary of the Company. In the event the Grantee is employed by a business
that is acquired by the Company or a subsidiary, the Company shall have
discretion to determine whether the Grantee’s service prior to the acquisition
will be included in determining service for such purposes.
          Retirement Due to Government Service. In the case of a Governmental
Service Retirement by the Grantee (a) the Performance Period used to calculate
the Grantee’s Earned RPSRs will be deemed to have ended as of the most recent
date that performance has been measured by the Company with respect to the RPSRs
prior to the Grantee’s Retirement (but in no event shall such date be more than
one year before the Grantee’s Retirement), (b) the Earnout Percentage of the
Grantee’s RPSRs will be determined based on actual performance for that short
Performance Period, and (c) payment of Earned RPSRs will be made within 10 days
after Retirement.
          2.3 Other Terminations of Employment. Subject to Section 5.2, all
RPSRs subject to the award terminate immediately upon a termination of the
Grantee’s employment: (a) for any reason other than due to the Grantee’s
Retirement, death or Disability; or (b) for Retirement, death or Disability, if
the six-month employment requirement under Section 2.2 above is not satisfied.
          2.4 Leave of Absence. Unless the Committee otherwise provides (at the
time of the leave or otherwise), if the Grantee is granted a leave of absence by
the Company, the Grantee (a) shall not be deemed to have incurred a termination
of employment at the time such leave commences for purposes of the award, and
(b) shall be deemed to be employed by the Company for the duration of such

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approved leave of absence for purposes of the award. A termination of employment
shall be deemed to have occurred if the Grantee does not timely return to active
employment upon the expiration of such approved leave or if the Grantee
commences a leave that is not approved by the Company.
          2.5 Salary Continuation. Subject to Section 2.4 above, the term
“employment” as used herein means active employment by the Company and salary
continuation without active employment (other than a leave of absence approved
by the Company that is covered by Section 2.4) will not, in and of itself,
constitute “employment” for purposes hereof (in the case of salary continuation
without active employment, the Grantee’s cessation of active employee status
shall, subject to Section 2.4, be deemed to be a termination of “employment” for
purposes hereof). Furthermore, salary continuation will not, in and of itself,
constitute a leave of absence approved by the Company for purposes of the award.
          2.6 Sale or Spinoff of Subsidiary or Business Unit. For purposes of
the RPSRs subject to the award, a termination of employment of the Grantee shall
be deemed to have occurred if the Grantee is employed by a subsidiary or
business unit and that subsidiary or business unit is sold, spun off, or
otherwise divested, the Grantee does not otherwise continue to be employed by
the Company or one of its subsidiaries after such event, and the divested entity
or business (or its successor or a parent company) does not assume the award in
connection with such transaction. In the event of such a termination of
employment, the termination shall be deemed to be a Retirement treated as
provided for in Section 2.2 (subject to Section 5).
          2.7 Continuance of Employment Required. Except as expressly provided
in Sections 2.2 and 2.4 above and in Section 5 below, the vesting of the RPSRs
subject to the award requires continued employment through the last day of the
Performance Period as a condition of the payment of such RPSRs. Employment for
only a portion of the Performance Period, even if a substantial portion, will
not entitle the Grantee to any proportionate vesting or avoid or mitigate a
termination of rights and benefits upon or following a termination of
employment. Nothing contained in these Terms, the Grant Letter, the Stock Plan
System, or the Plan constitutes an employment commitment by the Company or any
subsidiary, affects the Grantee’s status (if the Grantee is otherwise an at-will
employee) as an employee at will who is subject to termination without cause,
confers upon the Grantee any right to continue in the employ of the Company or
any subsidiary, or interferes in any way with the right of the Company or of any
subsidiary to terminate such employment at any time.
          2.8 Death. In the event of the Grantee’s death subsequent to the
vesting of RPSRs but prior to the delivery of shares or other payment with
respect to such RPSRs, the Grantee’s Successor shall be entitled to any payments
to which the Grantee would have been entitled under this Agreement with respect
to such RPSRs.
3. Non-Transferability and Other Restrictions.
          3.1 Non-Transferability. The award, as well as the RPSRs subject to
the award, are non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or charge.
The foregoing transfer restrictions shall not apply to transfers to the Company.
Notwithstanding the foregoing, the Company may honor any transfer required
pursuant to the terms of a court order in a divorce or similar domestic
relations matter to the extent that such transfer does not adversely affect the
Company’s ability to register the offer and sale of the underlying shares on a
Form S-8 Registration Statement and such transfer is otherwise in compliance
with all applicable legal, regulatory and listing requirements.
          3.2 Recoupment of Awards. Any payments or issuances of shares with
respect to the award are subject to recoupment pursuant to the Company’s Policy
Regarding the Recoupment of Certain Performance-Based Compensation Payments as
in effect from time to time as well as any recoupment or similar provisions of
applicable law, and the Grantee shall promptly make any reimbursement requested
by the Board or Committee pursuant to such policy or applicable law with respect
to the award. Further, the Grantee agrees, by accepting the award, that the
Company and its affiliates may deduct from any amounts it may owe the Grantee
from time to time (such as wages or other compensation) to the extent of any
amounts the Grantee is required to reimburse the Company pursuant to such policy
or applicable law with respect to the award.
4. Compliance with Laws; No Stockholder Rights Prior to Issuance.
     The Company’s obligation to make any payments or issue any shares with
respect to the award is subject to full compliance with all then applicable
requirements of law, the Securities and

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Exchange Commission or other regulatory agencies having jurisdiction over the
Company and its shares, and of any exchange upon which stock of the Company may
be listed. The Grantee shall not have the rights and privileges of a
stockholder, including without limitation the right to vote or receive
dividends, with respect to any shares which may be issued in respect of the
RPSRs until the date appearing on the certificate(s) for such shares (or, in the
case of shares entered in book entry form, the date that the shares are actually
recorded in such form for the benefit of the Grantee), if such shares become
deliverable.
5. Adjustments; Change in Control.
          5.1 Adjustments. The RPSRs and the shares subject to the award are
subject to adjustment upon the occurrence of events such as stock splits, stock
dividends and other changes in capitalization in accordance with Section 6(a) of
the Plan. In addition, for RPSRs that do not use a relative total shareholder
return metric as the applicable performance criterion, the Committee shall
adjust the applicable performance criteria to eliminate the effects of the gain,
loss, income or expense or other extraordinary items resulting from (i) changes
in accounting principles that become effective during the Performance Period,
(ii) the purchase or disposition of a business during the Performance Period,
and (iii) extraordinary charges not foreseen at the date of grant of the RPSRs,
provided that the Committee shall have the discretion not to make any such
adjustment if not making such adjustment would result in a reduction in the
number of Earned RPSRs. In the event of any adjustment, the Company will give
the Grantee written notice thereof which will set forth the nature of the
adjustment.
          5.2 Possible Acceleration on Change in Control. Notwithstanding the
provisions of Section 2 hereof, and further subject to the Company’s ability to
terminate the award as provided in Section 5.3 below, the Grantee shall be
entitled to vesting of the award as provided below in the event of the Grantee’s
termination of employment in the following circumstances:

  (a)   if the Grantee is covered by a Change in Control Severance Arrangement
at the time of the termination, and the termination of employment constitutes a
“Qualifying Termination” (as such term, or any similar successor term, is
defined in such Change in Control Severance Arrangement) that triggers the
Grantee’s right to severance benefits under such Change in Control Severance
Arrangement.     (b)   if the Grantee is not covered by a Change in Control
Severance Arrangement at the time of the termination, the termination occurs
either within the Protected Period corresponding to a Change in Control of the
Company or within twenty-four (24) calendar months following the date of a
Change in Control of the Company, and the Grantee’s employment by the Company
and its subsidiaries is involuntarily terminated by the Company and its
subsidiaries for reasons other than Cause or by the Grantee for Good Reason.

          Notwithstanding anything else contained herein to the contrary, the
termination of the Grantee’s employment (or other events giving rise to Good
Reason) shall not entitle the Grantee to any accelerated vesting pursuant to
clause (b) above if there is objective evidence that, as of the commencement of
the Protected Period, the Grantee had specifically been identified by the
Company as an employee whose employment would be terminated as part of a
corporate restructuring or downsizing program that commenced prior to the
Protected Period and such termination of employment was expected at that time to
occur within six (6) months. The applicable Change in Control Severance
Arrangement shall govern the matters addressed in this paragraph as to clause
(a) above.
          In the event the Grantee is entitled to payment in accordance with the
foregoing provisions of this Section 5.2, then the Grantee will be eligible for
payment of a number of RPSRs determined in accordance with the following
formula: (a) the Earnout Percentage determined in accordance with Section 1 but
calculated based on performance for the portion of the three-year Performance
Period ending on the last day of the month coinciding with or immediately
preceding the date of the termination of the Grantee’s employment, multiplied by
(b) the target number of RPSRs subject to the award. Payment of any amount due
under this Section 5.2 will be made in the calendar year following the calendar
year containing the last day of the Performance Period (and generally will be
paid in the first 75 days of such year) unless: (i) the Grantee dies or has a
Disability, in which case such payment will be made in the calendar year
containing the 75th day following the date of the Grantee’s death or Disability,
as the case may be (and generally will be

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paid on or about such 75th day), or (ii) a Governmental Service Retirement by
the Grantee, in which case payment will be made within 10 days after Retirement.
In the event the Grantee is entitled to payment in accordance with the foregoing
provisions of this Section 5.2, then this Section 5.2 shall control as to the
amount and timing of the payment of the award notwithstanding anything in
Section 2.2 to the contrary.
          5.3 Automatic Acceleration; Early Termination. If the Company
undergoes a Change in Control triggered by clause (iii) or (iv) of the
definition thereof and the Company is not the surviving entity and the successor
to the Company (if any) (or a Parent thereof) does not agree in writing prior to
the occurrence of the Change in Control to continue and assume the award
following the Change in Control, or if for any other reason the award would not
continue after the Change in Control, then upon the Change in Control the
Grantee shall be entitled to a payment of the RPSRs as provided below and the
award shall terminate. Unless the Committee expressly provides otherwise in the
circumstances, no acceleration of vesting of the award shall occur pursuant to
this Section 5.3 in connection with a Change in Control if either (a) the
Company is the surviving entity, or (b) the successor to the Company (if any)
(or a Parent thereof) agrees in writing prior to the Change in Control to assume
the award. The Committee may make adjustments pursuant to Section 6(a) of the
Plan and/or deem an acceleration of vesting of the award pursuant to this
Section 5.3 to occur sufficiently prior to an event if necessary or deemed
appropriate to permit the Grantee to realize the benefits intended to be
conveyed with respect to the shares underlying the award; provided, however,
that, the Committee may reinstate the original terms of the award if the related
event does not actually occur.
          In the event the Grantee is entitled to a payment in accordance with
the foregoing provisions of this Section 5.3, then the Grantee will be eligible
for payment of a number of RPSRs determined in accordance with the following
formula: (a) the Earnout Percentage determined in accordance with Section 1 but
calculated based on performance for the portion of the three-year Performance
Period ending on the date of the Change in Control of the Company, multiplied by
(b) the target number of RPSRs subject to the award. Payment of any amount due
under this Section 5.3 will be made in the calendar year following the calendar
year containing the last day of the Performance Period (and generally will be
paid in the first 75 days of such year) unless: (i) the Grantee dies or has a
Disability, in which case such payment will be made in the calendar year
containing the 75th day following the date of the Grantee’s death or Disability,
as the case may be (and generally will be paid on or about such 75th day), or
(ii) a Governmental Service Retirement by the Grantee, in which case payment
will be made within 10 days after Retirement. In the event the Grantee is
employed by the Company or a subsidiary immediately prior to the Change in
Control and is entitled to payment in accordance with the foregoing provisions
of this Section 5.3, then this Section 5.3 shall control as to the amount and
timing of the payment of the award notwithstanding anything in Section 2.2 or
5.2 to the contrary. In the event of the Grantee’s Retirement pursuant to
Section 2.2 prior to a Change in Control described in the first paragraph of
this Section 5.3 in which the award is to be terminated, the Earnout Percentage
shall no longer be based on the portion of the Performance Period otherwise
considered for purposes of Section 2.2 but shall instead be calculated based on
performance for the portion of the three-year Performance Period ending on the
date of the Change in Control of the Company.
6. Tax Matters.
          6.1 Tax Withholding. The Company or the subsidiary which employs the
Grantee shall be entitled to require, as a condition of making any payments or
issuing any shares upon vesting of the RPSRs, that the Grantee or other person
entitled to such shares or other payment pay any sums required to be withheld by
federal, state, local or other applicable tax law with respect to such vesting
or payment. Alternatively, the Company or such subsidiary, in its discretion,
may make such provisions for the withholding of taxes as it deems appropriate
(including, without limitation, withholding the taxes due from compensation
otherwise payable to the Grantee or reducing the number of shares otherwise
deliverable with respect to the award (valued at their then Fair Market Value)
by the amount necessary to satisfy such withholding obligations at the flat
percentage rates applicable to supplemental wages).
          6.2 Transfer Taxes. The Company will pay all federal and state
transfer taxes, if any, and other fees and expenses in connection with the
issuance of shares in connection with the vesting of the RPSRs.
          6.3 Compliance with Code. The Committee shall administer and construe
the award, and may amend the Terms of the award, in a manner designed

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to comply with the Code and to avoid adverse tax consequences under Code
Section 409A or otherwise.
          6.4 Unfunded Arrangement. The right of the Grantee to receive payment
under the award shall be an unsecured contractual claim against the Company. As
such, neither the Grantee nor any Successor shall have any rights in or against
any specific assets of the Company based on the award. Awards shall at all times
be considered entirely unfunded for tax purposes.
7. Committee Authority.
          The Committee has the discretionary authority to determine any
questions as to the date when the Grantee’s employment terminated and the cause
of such termination and to interpret any provision of these Terms, the Grant
Letter, the Stock Plan System, the Plan, and any other applicable rules. Any
action taken by, or inaction of, the Committee relating to or pursuant to these
Terms, the Grant Letter, the Stock Plan System, the Plan, or any other
applicable rules shall be within the absolute discretion of the Committee and
shall be conclusive and binding on all persons.
8. Plan; Amendment.
          The RPSRs subject to the award are governed by, and the Grantee’s
rights are subject to, all of the terms and conditions of the Plan and any other
rules adopted by the Committee, as the foregoing may be amended from time to
time. The Grantee shall have no rights with respect to any amendment of these
Terms or the Plan unless such amendment is in writing and signed by a duly
authorized officer of the Company. In the event of a conflict between the
provisions of the Grant Letter and/or the Stock Plan System and the provisions
of these Terms and/or the Plan, the provisions of these Terms and/or the Plan,
as applicable, shall control.
9. Required Holding Period.
          The holding requirements of this Section 9 shall apply to any Grantee
who is an elected or appointed officer of the Company on the date Earned RPSRs
are paid (or, if earlier, on the date the Grantee’s employment by the Company
and its subsidiaries terminates for any reason). Any Grantee subject to this
Section 9 shall not be permitted to sell, transfer, anticipate, alienate,
assign, pledge, encumber or charge 50% of the total number (if any) of shares of
Common Stock the Grantee receives as payment for Earned RPSRs until the earlier
of (A) the third anniversary of the date such shares of Common Stock are paid to
the Grantee, or (B) the date the Grantee’s employment by the Company and its
subsidiaries terminates due to the Grantee’s death or Disability. Should the
Grantee’s employment by the Company and its subsidiaries terminate (regardless
of the reason for such termination, but other than due to the Grantee’s death or
Disability), such holding period requirement shall not apply as to any shares
acquired upon payment of Earned RPSRs to the extent such payment is made more
than one year after such termination of employment. (For purposes of clarity, in
such circumstances the holding period requirement will apply as to any shares
acquired upon payment of Earned RPSRs within one year after such a termination
of employment.) For purposes of this Section 9, the total number of shares of
Common Stock the Grantee receives as payment for Earned RPSRs shall be
determined on a net basis after taking into account any shares otherwise
deliverable with respect to the award that the Company withholds to satisfy tax
obligations pursuant to Section 6.1. Any shares of Common Stock received in
respect of shares that are covered by the holding period requirements of this
Section 9 (such as shares received in respect of a stock split or stock
dividend) shall be subject to the same holding period requirements as the shares
to which they relate.
10. Definitions.
          Whenever used in these Terms, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
          “Board” means the Board of Directors of the Company.
          “Cause” means the occurrence of either or both of the following:

  (i)   The Grantee’s conviction for committing an act of fraud, embezzlement,
theft, or other act

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      constituting a felony (other than traffic related offenses or as a result
of vicarious liability); or

  (ii)   The willful engaging by the Grantee in misconduct that is significantly
injurious to the Company. However, no act, or failure to act, on the Grantee’s
part shall be considered “willful” unless done, or omitted to be done, by the
Grantee not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company.

          “Change in Control” is used as defined in the Plan.
          “Change in Control Severance Arrangement” means a “Special Agreement”
entered into by and between the Grantee and the Company that provides severance
protections in the event of certain changes in control of the Company or the
Company’s Change-in-Control Severance Plan, as each may be in effect from time
to time, or any similar successor agreement or plan that provides severance
protections in the event of a change in control of the Company.
          “Code” means the United States Internal Revenue Code of 1986, as
amended.
          “Committee” means the Company’s Compensation Committee or any
successor committee appointed by the Board to administer the Plan.
          “Common Stock” means the Company’s common stock.
          “Disability” means, with respect to a Grantee, that the Grantee:
(i) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve months; or (ii) is, by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Grantee’s employer; all
construed and interpreted consistent with the definition of “Disability” set
forth in Code Section 409A(a)(2)(C).
          “Fair Market Value” is used as defined in the Plan; provided, however,
the Committee in determining such Fair Market Value for purposes of the award
may utilize such other exchange, market, or listing as it deems appropriate.
          “Good Reason” means, without the Grantee’s express written consent,
the occurrence of any one or more of the following:

  (i)   A material and substantial reduction in the nature or status of the
Grantee’s authorities or responsibilities (when such authorities and/or
responsibilities are viewed in the aggregate) from their level in effect on the
day immediately prior to the start of the Protected Period, other than (A) an
inadvertent act that is remedied by the Company promptly after receipt of notice
thereof given by the Grantee, and/or (B) changes in the nature or status of the
Grantee’s authorities or responsibilities that, in the aggregate, would
generally be viewed by a nationally-recognized executive placement firm as
resulting in the Grantee having not materially and substantially fewer
authorities and responsibilities (taking into consideration the Company’s
industry) when compared to the authorities and responsibilities applicable to
the position held by the Grantee immediately prior to the start of the Protected
Period. The Company may retain a nationally-recognized executive placement firm
for purposes of making the determination required by the preceding sentence and
the written opinion of the firm thus selected shall be conclusive as to this
issue.         In addition, if the Grantee is a vice president, the Grantee’s
loss of vice-president status will constitute “Good Reason”; provided that the
loss of the title of “vice president” will not, in and of itself, constitute
Good Reason if the Grantee’s lack of a vice president title is generally
consistent with the manner in which the title of vice president is used within
the Grantee’s business unit or if the loss of the title is the result of a
promotion to a higher level office. For the purposes of the preceding sentence,
the Grantee’s lack of a vice-president title will only be considered generally
consistent with the manner in which such title is used if most persons in the
business unit with authorities, duties, and responsibilities comparable to those
of the Grantee immediately prior to the

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commencement of the Protected Period do not have the title of vice-president.

  (ii)   A reduction by the Company in the Grantee’s annualized rate of base
salary as in effect on the first to occur of the start of the Performance Period
or the start of the Protected Period, or as the same shall be increased from
time to time.     (iii)   A material reduction in the aggregate value of the
Grantee’s level of participation in any of the Company’s short and/or long-term
incentive compensation plans (excluding stock-based incentive compensation
plans), employee benefit or retirement plans, or policies, practices, or
arrangements in which the Grantee participates immediately prior to the start of
the Protected Period provided; however, that a reduction in the aggregate value
shall not be deemed to be “Good Reason” if the reduced value remains
substantially consistent with the average level of other employees who have
positions commensurate with the position held by the Grantee immediately prior
to the start of the Protected Period.     (iv)   A material reduction in the
Grantee’s aggregate level of participation in the Company’s stock-based
incentive compensation plans from the level in effect immediately prior to the
start of the Protected Period; provided, however, that a reduction in the
aggregate level of participation shall not be deemed to be “Good Reason” if the
reduced level of participation remains substantially consistent with the average
level of participation of other employees who have positions commensurate with
the position held by the Grantee immediately prior to the start of the Protected
Period.     (v)   The Grantee is informed by the Company that his or her
principal place of employment for the Company will be relocated to a location
that is greater than fifty (50) miles away from the Grantee’s principal place of
employment for the Company at the start of the corresponding Protected Period;
provided that, if the Company communicates an intended effective date for such
relocation, in no event shall Good Reason exist pursuant to this clause (v) more
than ninety (90) days before such intended effective date.

          The Grantee’s right to terminate employment for Good Reason shall not
be affected by the Grantee’s incapacity due to physical or mental illness. The
Grantee’s continued employment shall not constitute a consent to, or a waiver of
rights with respect to, any circumstances constituting Good Reason herein.
          “Governmental Service Retirement” means a Retirement by the Grantee
where the Grantee accepts a position in the federal government or a state or
local government and an accelerated distribution under the award is permitted
under Code Section 409A based on such government employment and related ethics
rules.
          “Parent” is used as defined in the Plan.
          “Plan” means the Huntington Ingalls Industries, Inc. 2011 Long-Term
Incentive Stock Plan, as it may be amended form time to time.
          The “Protected Period” corresponding to a Change in Control of the
Company shall be a period of time determined in accordance with the following:

  (i)   If the Change in Control is triggered by a tender offer for shares of
the Company’s stock or by the offeror’s acquisition of shares pursuant to such a
tender offer, the Protected Period shall commence on the date of the initial
tender offer and shall continue through and including the date of the Change in
Control; provided that in no case will the Protected Period commence earlier
than the date that is six (6) months prior to the Change in Control.     (ii)  
If the Change in Control is triggered by a merger, consolidation, or
reorganization of the Company with or involving any other corporation, the
Protected Period shall commence on the date that serious and substantial
discussions first take place to effect the merger, consolidation, or
reorganization and shall continue through and including the date of the Change
in Control; provided that in no case will the Protected Period commence earlier
than the date that is six (6) months prior to the Change in Control.     (iii)  
In the case of any Change in Control not described in clause (i) or (ii) above,
the Protected Period shall commence on the date that is six (6) months prior to
the Change in Control and shall continue through and including the date of the
Change in Control.

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          “Retirement” or “Retire” means that the Grantee terminates employment
after attaining age 55 with at least 10 years of service (other than in
connection with a termination by the Company or a subsidiary for cause). In the
case of a Grantee who is an officer of the Company subject to the Company’s
mandatory retirement at age 65 policy, “Retirement” or “Retire” shall also
include as to that Grantee (without limiting the Grantee’s ability to Retire
pursuant to the preceding sentence) a termination of the Grantee’s employment
pursuant to such mandatory retirement policy (regardless of the Grantee’s years
of service and other than in connection with a termination by the Company or a
subsidiary for cause).
          “Successor” means the person acquiring a Grantee’s rights to a grant
under the Plan by will or by the laws of descent or distribution.

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