EXHIBIT 10.5

HUNTINGTON INGALLS INDUSTRIES, INC.

DIRECTOR COMPENSATION POLICY

AMENDED AND RESTATED

BOARD DEFERRED COMPENSATION POLICY

Stock Retainer Elections by Directors. A Director who has met his or her
Ownership Guideline under the Directors’ Compensation Policy may elect (the
“Stock Retainer Election”) by the date that the Administrator prescribes (the
“Election Deadline”) to receive one hundred percent (100%) of his or her Annual
Equity Award for the following calendar year in the form of either (a) shares of
Common Stock or (b) Stock Units payable in five years (“Five-Year Stock Units”).
A Director who does not make an election will receive his or her Annual Equity
Award in Stock Units payable at separation from service from the Company within
the meaning of Section 409A, including due to the Director’s death (a
“Separation from Service”).

Stock Retainer Election Payment Date. On each Stock Retainer Election, the
Director shall elect whether he or she wishes to receive Common Stock or
Five-Year Stock Units. If the Director elects to receive Five-Year Stock Units,
the Five-Year Stock Units shall be payable on the earlier of (a) the date the
Director has a Separation from Service or (b) January 15th of the fifth (5th)
calendar year ending after the calendar year in which the Annual Equity Award is
earned.

Cash Retainer Elections by Directors. A Director may elect (the “Cash Retainer
Election” and, together with the Stock Retainer Election, the “Election”) by the
Election Deadline to receive one hundred percent (100%) of his or her Annual
Cash Retainers for the following calendar year in the form of Stock Units. The
Stock Units will, by default, be payable within 30 days following the date the
Director has a Separation from Service. However, if the Director has met his or
her Ownership Guideline under the Directors’ Compensation Policy as of the date
of the last quarterly grant of the Annual Equity Award for a given year, the
Director may elect on each Cash Retainer Election to receive his or her Annual
Cash Retainers for the following calendar year in the form of Five-Year Stock
Units instead. The Five-Year Stock Units shall be payable on the earlier of
(a) the date the Director has a Separation from Service or (b) January 15th of
the fifth (5th) calendar year ending after the calendar year in which the Annual
Cash Retainers are earned.

Stock Units and Accounts. Each Director who receives Stock Units shall have a
Stock Unit Account. Stock Units with respect to Annual Equity Awards shall be
credited to the Director’s Stock Unit Account on the quarterly grant dates on
which the Annual Equity Award is earned. Stock Units with respect to Annual Cash
Retainers shall be credited to the Director’s Stock Unit Account on the
quarterly dates on which the Annual Cash Retainers would otherwise have been
paid. The number of Stock Units shall be calculated in accordance with the
Directors’ Compensation Policy. Any Account Earnings shall be credited to the
Director’s Stock Unit Account in accordance with the Administration Provisions.

Vesting. A Director shall be one hundred percent (100%) vested at all times in
his or her Stock Unit Account.

 

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Distributions from Stock Unit Account. At the payment date applicable to the
Stock Units described above (the “Payment Date”), each Stock Unit shall be
converted into one share of Common Stock and the shares shall be distributed to
the Director as follows:

 

  (a)

Except as otherwise provided in paragraphs (b) and (c) below, distribution shall
be made in a lump sum within 30 days following the Payment Date. All Account
Earnings accrued to the date of any distribution shall be included in the
payment.

 

  (b)

If the Payment Date occurs by reason of the Director’s death, the lump sum
distribution of shares of Common Stock shall be made in the following order:
(i) to the Director’s beneficiary selected by the Director on a form provided by
the Administrator; (ii) if there is no beneficiary designation effective at the
Director’s death, to the Director’s surviving spouse; or (iii) if there is no
beneficiary designation effective or surviving spouse at the Director’s death,
to the Director’s estate or personal representative, in each case as soon as
administratively feasible following the Director’s death, but in no event later
than 90 days following the Director’s death, provided the recipient shall not
have a right to designate the taxable year of the payment.

 

  (c)

Any fraction of a Stock Unit to be distributed shall be converted into an amount
in cash equal to the Fair Market Value of one share of the Common Stock on the
trading day immediately preceding the date of distribution, multiplied by such
fraction, and the cash shall be distributed.

 

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BOARD DEFERRED COMPENSATION POLICY

ADMINISTRATION PROVISIONS

The following provisions relate to the administration of the Board Deferred
Compensation Policy (the “Policy”).

ARTICLE I. ADMINISTRATION

Section 1.01    Administrator. The Committee shall serve as the Administrator
and shall administer all aspects of the Policy. Notwithstanding the foregoing,
(a) the full Board shall have the authority to take any action that could be
taken by the Committee, and (b) the Committee may delegate some or all of its
functions hereunder to a subcommittee or to one or more officers or employees of
the Company in its discretion.

 

  (a)

The Administrator shall have discretionary authority to interpret and
administer, correct errors in administration of, and otherwise implement the
Policy. The Administrator also shall have authority to take all actions
necessary to ensure that any transactions pursuant to the Policy do not result
in liability under Section 16(b) of the Securities Exchange Act of 1934. All
actions of the Administrator with respect to the Policy shall be final and
binding on all persons.

 

  (b)

The Company shall maintain complete and adequate records pertaining to the
Directors’ Stock Unit Accounts.

Section 1.02    Elections. Elections shall be made by completing and executing
an election form prescribed by the Administrator and delivering the election
form to the Administrator on or before the Election Deadline. Any Election shall
become irrevocable as of the close of business on the date of the Election
Deadline. The Election Deadline shall be December 31 of the year immediately
prior to the year in which the Annual Equity Award or Annual Cash Retainers to
which the Election applies are earned, or such earlier date as may be determined
by the Administrator.

Section 1.03    Amendment and Termination. The Committee may, without the
consent of Directors or their beneficiaries, amend the Policy at any time and
from time to time; provided, that no amendment may reduce the number of Stock
Units allocated to a Director’s Stock Unit Account as of the date of the
amendment without the Director’s consent. The Committee may terminate the Policy
at any time. Upon termination of the Policy, no further amounts shall be
deferred, and distributions in respect of credits to Directors’ Stock Unit
Accounts as of the date of termination shall be made in the manner and at the
time prescribed under the Policy immediately before termination or otherwise as
required or permitted under Section 409A.

ARTICLE II. ACCOUNT EARNINGS

Section 2.01    Dividend Credits. Dividends or other distributions with respect
to the Common Stock shall be credited to a Director’s Stock Unit Account as
additional Stock Units (“Account Earnings”) throughout the period of such
Director’s participation in the Policy until all distributions to which the
Director is entitled have been made. The Account Earnings shall be credited as a
number of shares (including fractional shares) of Common Stock with a Fair
Market

 

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Value (as of the applicable dividend payment date) equal to (i) for cash
dividends or distributions, the amount of any cash dividends or distributions,
(ii) for distributions of property (other than Common Stock but including any
securities convertible into the Common Stock), the Fair Market Value of any
distributions of such property, and (iii) for distributions of Common Stock, the
number of shares (including fractional shares) of Common Stock, in each case to
which the Director would have been entitled from time to time had he or she been
the owner on the record dates for the payment of such dividends or distributions
of the number of shares of the Common Stock equal to the number of Stock Units
in his or her Stock Unit Account on such dates. Each credit of Account Earnings
shall be effective as of the payment date for the dividend or distribution.

ARTICLE III. GENERAL PROVISIONS

Section 3.01    Funding. Benefits payable under the Policy shall be paid from
the general assets of the Company, and nothing shall give any Director any
rights that are greater than those of a general unsecured creditor of the
Company. The Company shall not be required to fund or otherwise segregate assets
to be used for payment of benefits under the Policy. The Company, in its
discretion, may maintain one or more trusts to hold assets to be used for
payment of benefits under the Policy; provided, that the assets of such trust
shall be subject to the creditors of the Company in the event that the Company
becomes insolvent or is subject to bankruptcy or insolvency proceedings. Any
payments by a trust of benefits under the Policy shall be considered payment by
the Company and shall discharge the Company of any further liability for the
payments made by such trust.

Section 3.02    No Right to Directorship. The Policy shall not give any Director
any right with respect to continuance of directorship of the Company or limit in
any way the right of the Company to terminate his or her directorship at any
time.

Section 3.03    Authorized Payments. If the Committee receives evidence
satisfactory to it that any person entitled to receive a payment hereunder is,
at the time the benefit is payable, physically, mentally or legally incompetent
to receive such payment and to give a valid receipt therefor, and that an
individual or institution is then maintaining or has custody of such person and
that no guardian, committee or other representative of the estate of such person
has been duly appointed, the Committee may direct that such payment be paid to
such individual or institution maintaining or having custody of such person, and
the receipt of such individual or institution shall be valid and a complete
discharge for the payment of such benefit.

Section 3.04    Section 409A. Although the Company makes no guarantee with
respect to the tax treatment of payments and benefits hereunder, the Policy is
intended to comply with the applicable requirements of Section 409A and shall be
limited, construed and interpreted in accordance with such intent. Accordingly,
the Company reserves the right to amend the provisions of the Policy at any time
in order to avoid the imposition of an excise tax under Section 409A on any
payments deferred, accrued or to be made hereunder. In no event shall the
Company or any of its affiliates be liable for any additional tax, interest or
penalty that may be imposed on a Director by Section 409A or for damages for
failing to comply with Section 409A, other than for withholding or other
obligations applicable to employers, if any, under Section 409A.

 

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Section 3.05    Assignment of Benefits. Benefits provided under the Policy may
not be transferred, assigned or alienated by the Director, either voluntarily or
involuntarily, other than by will or the laws of descent and distribution. These
transfer restrictions shall not apply to: (a) transfers to the Company; or
(b) transfers pursuant to a qualified domestic relations order (as defined in
the Code). 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.

Section 3.06    Governing Law. The Policy and the actions taken in connection
herewith shall be governed by and construed in accordance with the internal laws
of the Commonwealth of Virginia, without giving effect to its principles of
conflict of laws.

Section 3.07    2012 Plan. Stock Units under the Policy shall be subject to the
provisions of the 2012 Plan, which are incorporated herein by reference.

Section 3.08    Recoupment. Any payments or issuances of shares under the Plan
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 Director shall promptly make any reimbursement requested by the Board
pursuant to such policy or applicable law with respect to amounts deferred under
the Plan. Further, the Director agrees, by electing to participate in the Plan,
that the Company and its affiliates may deduct from any amounts it may owe the
Director from time to time (such as other compensation) to the extent of any
amounts the Director is required to reimburse the Company pursuant to such
policy or applicable law with respect to amounts deferred under the Plan.

Section 3.09    Compliance with Laws. The Company’s obligation to make any
payments or issue any shares under the Policy is subject to full compliance with
all then applicable requirements of law, the Securities and 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.

Section 3.10    Limitations on Rights Associated with Stock Units. A Director
shall not have the rights and privileges of a stockholder, including without
limitation the right to vote or receive dividends (except as Account Earnings),
with respect to any shares which may be issued in respect of the Stock Units
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 Director), if such shares become
deliverable.

Section 3.11    Adjustment. The Stock Units 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 2012 Plan. In the event of
any adjustment, the Company will give the Director written notice thereof which
will set forth the nature of the adjustment.

 

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ARTICLE IV. DEFINITIONS

As used in this Policy, the following capitalized terms shall have the following
meanings:

Section 4.01    “2012 Plan” shall mean the Huntington Ingalls Industries, Inc.
2012 Long-Term Incentive Stock Plan and any successor plan, in each case, as
amended from time to time.

Section 4.02     “Account Earnings” shall have the meaning set forth in
Section 2.01 of the Administrative Provisions.

Section 4.03    “Administrator” shall mean the administrator of the Policy
appointed pursuant to Section 1.01 of the Administrative Provisions.

Section 4.04    “Annual Cash Retainers” shall have the meaning set forth in the
Directors’ Compensation Policy.

Section 4.05    “Annual Equity Award” shall have the meaning set forth in the
Directors’ Compensation Policy.

Section 4.06    “Board” shall mean the Board of Directors of the Company.

Section 4.07     “Code” shall mean the Internal Revenue Code of 1986, as
amended, and applicable Treasury regulations promulgated thereunder.

Section 4.08    “Committee” shall mean the Committee described in Section 3(a)
of the 2012 Plan.

Section 4.09    “Common Stock” means the Company’s common stock, par value $0.01
per share.

Section 4.10     “Director” shall mean a member of the Board who is not an
officer or employee of the Company.

Section 4.11    “Directors’ Compensation Policy” shall mean the Amended and
Restated Directors’ Compensation Policy of even date herewith, as amended from
time to time.

Section 4.12    “Election” shall have the meaning set forth in the Summary of
Terms.

Section 4.13    “Election Deadline” shall have the meaning set forth in the
Summary of Terms.

Section 4.14    “Fair Market Value” means, as of any date, (a) with respect to
the Common Stock, the closing price reported for the Common Stock on such date
on the principal national securities exchange on which it is then traded (or if
such date was not a trading day, on the trading day immediately prior thereto),
or, if the Common Stock is not traded, listed or otherwise reported or quoted on
a national securities exchange, the fair market value of the Common Stock on
such date as determined by the Administrator; and (b) with respect to any other
property, the fair market value thereof on such date as determined by the
Administrator.

 

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Section 4.15    “Five-Year Stock Units” means Stock Units that are payable in
the fifth year after the year in which the Stock Units are credited to a
Director’s Stock Unit Account (or upon the Director’s separation from service,
if earlier), as described in the Summary of Terms.

Section 4.16    “Ownership Guideline” shall have the meaning set forth in the
Directors’ Compensation Policy.

Section 4.17    “Payment Date” shall have the meaning set forth in the Summary
of Terms.

Section 4.18    “Policy” means this Board Deferred Compensation Policy,
including the Summary of Terms and the Administrative Provisions, as amended
from time to time.

Section 4.19     “Section 409A” shall mean Section 409A of the Code and the
regulations promulgated thereunder.

Section 4.20    “Stock Unit” shall mean a measure of value equal to one share of
the Common Stock.

Section 4.21    “Stock Unit Account” shall mean a bookkeeping account for
recording a Director’s Stock Units and any Account Earnings credited with
respect thereto under the Policy.

Effective December 14, 2018

 

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