exv10w17






EXHIBIT 10.17





HUNTINGTON INGALLS INDUSTRIES




ERISA SUPPLEMENTAL PLAN



 









 





TABLE OF CONTENTS




	 	 	 	 	 

	INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	Article I Definitions
	 	 	2	 
	1.01 Affiliated Companies
	 	 	2	 
	1.02 CIC Plans
	 	 	2	 
	1.03 Code
	 	 	2	 
	1.04 Company
	 	 	2	 
	1.05 Grandfathered Amounts
	 	 	2	 
	1.06 Key Employee
	 	 	2	 
	1.07 Participant
	 	 	2	 
	1.08 Payment Date
	 	 	2	 
	1.09 Plan
	 	 	2	 
	1.10 Pension Plan Benefits
	 	 	2	 
	1.11 Pension Plan
	 	 	2	 
	1.12 Separation from Service
	 	 	3	 
	1.13 Termination of Employment
	 	 	3	 
	 
	 	 	 	 
	Article II Eligibility for and Amount of Benefits
	 	 	4	 
	2.01 Purpose
	 	 	4	 
	2.02 Eligibility
	 	 	4	 
	2.03 Amount of Benefit
	 	 	4	 
	2.04 Preretirement Surviving Spouse Benefit
	 	 	5	 
	2.05 Forms and Times of Benefit Payments
	 	 	5	 
	2.06 Beneficiaries and Spouses
	 	 	6	 
	2.07 Plan Termination
	 	 	6	 
	2.08 Pension Plan Benefits
	 	 	6	 
	2.09 Mandatory Cashout
	 	 	7	 
	2.10 Optional Payment Forms
	 	 	7	 
	2.11 Special Tax Distribution
	 	 	7	 
	 
	 	 	 	 
	Article III Lump Sum Election
	 	 	9	 
	3.01 In General
	 	 	9	 
	3.02 Retirees Election
	 	 	9	 
	3.03 Retirees Lump Sum
	 	 	10	 
	3.04 Actives Election
	 	 	10	 
	3.05 Actives Lump Sum — Retirement Eligible
	 	 	11	 
	3.06 Actives Lump Sum — Not Retirement Eligible
	 	 	13	 
	3.07 Lump Sums with CIC Severance Plan Election
	 	 	13	 
	3.08 Calculation of Lump Sum
	 	 	13	 
	3.09 Spousal Consent
	 	 	14	 






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	Article IV Miscellaneous
	 	 	15	 
	4.01 Amendment and Plan Termination
	 	 	15	 
	4.02 Not an Employment Agreement
	 	 	15	 
	4.03 Assignment of Benefits
	 	 	15	 
	4.04 Nonduplication of Benefits
	 	 	16	 
	4.05 Funding
	 	 	16	 
	4.06 Construction
	 	 	16	 
	4.07 Governing Law
	 	 	16	 
	4.08 Actions By Company and Claims Procedures
	 	 	16	 
	4.09 Plan Representatives
	 	 	17	 
	4.10 Number
	 	 	17	 
	 
	 	 	 	 
	APPENDIX A — 2005-2007 TRANSITION RULES
	 	 	18	 
	A.01 Election
	 	 	18	 
	A.02 2005 Commencements
	 	 	18	 
	A.03 2006 and 2007 Commencements
	 	 	19	 
	 
	 	 	 	 
	APPENDIX B — POST 2007 DISTRIBUTION OF 409A AMOUNTS
	 	 	20	 
	B.01 Time of Distribution
	 	 	20	 
	B.02 Special Rule for Key Employees
	 	 	20	 
	B.03 Forms of Distribution
	 	 	20	 
	B.04 Death
	 	 	20	 
	B.05 Actuarial Assumptions
	 	 	21	 
	B.06 Accelerated Lump Sum Payouts
	 	 	21	 
	B.07 Effect of Early Taxation
	 	 	22	 
	B.08 Permitted Delays
	 	 	22	 
	 
	 	 	 	 
	APPENDIX C — NORTHROP GRUMMAN SPIN-OFF
	 	 	23	 
	C.01 Background
	 	 	23	 
	C.02 Plan Benefits
	 	 	23	 
	C.03 Distributions
	 	 	23	 
	C.04 Termination and Key Employees
	 	 	23	 
	C.05 Participant Elections
	 	 	23	 
	C.06 References to Plan
	 	 	23	 
	C.07 Right to Benefits
	 	 	23	 






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INTRODUCTION




     The Huntington Ingalls Industries ERISA Supplemental Plan (the “Plan”) is hereby adopted
effective as of the “Distribution Date” defined in the Separation and Distribution Agreement among
Northrop Grumman Corporation, Huntington Ingalls Industries, Inc. and New P, Inc. (the
“Distribution Date”) and conditioned upon such Distribution Date occurring.



     The Plan is intended to comply with Code section 409A and official guidance issued thereunder
(except for Grandfathered Amounts). Notwithstanding any other provision of this Plan, this Plan
shall be interpreted, operated and administered in a manner consistent with this intention.



     See Appendix C for special rules related to the spin-off of the Company from Northrop Grumman
Corporation.








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ARTICLE I

Definitions



For purposes of the Plan, the following terms, when capitalized, will have the following meanings:





	1.01	 	Affiliated Companies. The Company and any other entity related to the Company under
the rules of section 414 of the Code. The Affiliated Companies include Huntington Ingalls
Industries, Inc. and its 80%-owned subsidiaries and may include other entities as well.






	1.02	 	CIC Plans. Northrop Grumman Corporation Change-In-Control Severance Plan (effective
August 1, 1996, as amended) or the Northrop Grumman Corporation March 2000 Change-In-Control
Severance Plan.






	1.03	 	Code. The Internal Revenue Code of 1986, as amended.






	1.04	 	Company. The Company as designated in the Pension Plans.






	1.05	 	Grandfathered Amounts. Plan benefits that were earned and vested as of December 31,
2004 within the meaning of Code section 409A and official guidance thereunder.






	1.06	 	Key Employee. An employee treated as a “specified employee” under Code section
409A(a)(2)(B)(i) of the Company or the Affiliated Companies (i.e., a key employee (as defined
in Code section 416(i) without regard to paragraph (5) thereof)) if the Company’s or an
Affiliated Company’s stock is publicly traded on an established securities market or
otherwise. The Company shall determine in accordance with a uniform Company policy which
Participants are Key Employees as of each December 31 in accordance with IRS regulations or
other guidance under Code section 409A, provided that in determining the compensation of
individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(3)
shall be used. Such determination shall be effective for the twelve (12) month period
commencing on April 1 of the following year.






	1.07	 	Participant. Any employee who (a) is eligible for benefits under one or both Pension
Plans, (b) meets the eligibility requirements of Section 2.02 of this Plan and (c) and has not
received full payment under the Plan.






	1.08	 	Payment Date. The 1st of the month coincident with or following the later of (a) the
date the Participant attains age 55, or (b) the date the Participant Separates from Service.






	1.09	 	Plan. The Huntington Ingalls Industries ERISA Supplemental Plan.
	 
	1.10	 	Pension Plan Benefits. This term is defined in Section 2.08 of this Plan.
	 
	1.11	 	Pension Plan and Pension Plans. Any of the following:






	 	(a)	 	The Northrop Grumman Retirement Plan




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	 	(b)	 	The Northrop Grumman Retirement Plan — Rolling Meadows Site
	 
	 	(c)	 	The Northrop Grumman Retirement Value Plan (effective as of January 1, 2000)
	 
	 	(d)	 	The Northrop Grumman Electronics Systems — Space Division Salaried Employees’
Pension Plan (effective as of the Aerojet Closing Date)
	 
	 	(e)	 	The Northrop Grumman Electronics Systems — Space Division Union Employees’
Pension Plan (effective as of the Aerojet Closing Date)






“Aerojet Closing Date” means the Closing Date specified in the April 19, 2001 Asset Purchase
Agreement by and Between Aerojet-General Corporation and Northrop Grumman Systems
Corporation.




	1.12	 	Separation from Service or Separates from Service. A “separation from
service” within the meaning of Code section 409A.






	1.13	 	Termination of Employment. Complete termination of employment with the Affiliated
Companies.






	 	(a)	 	If a Participant leaves one Affiliated Company to go to work for another, he or
she will not have a Termination of Employment.
	 
	 	(b)	 	A Participant will have a Termination of Employment if he or she leaves the
Affiliated Companies because the affiliate he or she works for ceases to be an
Affiliated Company because it is sold or spunoff.




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ARTICLE II




Eligibility for and Amount of Benefits





	2.01	 	Purpose. The purpose of this Plan is simply to restore to employees of the Company
the benefits they lose under the Pension Plans as a result of the benefit limits in Code
section 415, as amended, or any successor section (“section 415”), as the benefit limits are
described in the applicable Pension Plan.






	2.02	 	Eligibility. Each Participant is eligible to receive a benefit under this Plan if:






	 	(a)	 	he or she has vested in benefits under one or more of the Pension Plans;
	 
	 	(b)	 	he or she has vested benefits reduced because of the application of section
415;
	 
	 	(c)	 	he or she is not eligible to receive a benefit under the Northrop Corporation
Supplemental Retirement Income Program for Senior Executives or any other plan or
program which bars an employee from participation in this Plan; and
	 
	 	(d)	 	he or she is not a “Participant” in the Charles H. Noski Executive Retirement
Plan as that term is defined under that plan.






	2.03	 	Amount of Benefit. The benefit payable from the Company under this Plan to a
Participant will equal the retirement benefit, if any, which would have been payable to the
Participant under the terms of a Pension Plan but for the restrictions of section 415 (as
described in the applicable Pension Plan).
	 
	 	 	The benefit payable under this Plan will be reduced by the amount of Pension Plan Benefits
attributable to the applicable Pension Plan.
	 
	 	 	Benefits under this Plan will only be paid to supplement benefit payments actually made from
a Pension Plan. If benefits are not payable under a Pension Plan because the Participant
has failed to vest or for any other reason, no payments will be made under this Plan with
respect to such Pension Plan.
	 
	 	 	In no event, however, (1) will this Plan pay any amount of a Participant’s retirement
benefit, if any, attributable to the “2000 Ad Hoc Increase for Retirees” Appendix added to
certain of the Company’s tax-qualified plans pursuant to the Northrop Grumman Corporation
Board of Directors resolution adopted May 17, 2000, or (2) will a Participant be entitled to
a benefit (or an increased benefit) from or as a result of participation in this Plan under
the Northrop Grumman Corporation Board of Directors resolution adopted May 17, 2000.
	 
	 	 	The following shall not be considered as compensation for purposes of determining the amount
of any benefit under the Plan:






	 	(1)	 	any payment authorized by the Compensation Committee that is (a) calculated
pursuant to the method for determining a bonus amount under the Annual





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	 	 	 	Incentive Plan (AIP) for a given year, and (b) paid in lieu of such bonus in the
year prior to the year the bonus would otherwise be paid under the AIP, and
	 
	 	(2)	 	any award payment under any Huntington Ingalls Industries long-term incentive
cash plan.






	2.04	 	Preretirement Surviving Spouse Benefit. This Section only applies to Grandfathered
Amounts.
	 
	 	 	Preretirement surviving spouse benefits will be payable under this Plan on behalf of a
Participant if such Participant’s surviving spouse is eligible for preretirement surviving
spouse benefits payable from a Pension Plan. The benefit payable will be the amount which
would have been payable under the Pension Plan but for the restrictions of section 415 (as
described in the applicable Pension Plan).
	 
	 	 	The benefit payable under this Plan will be reduced by the amount of Pension Plan Benefits
attributable to the applicable Pension Plan.
	 
	 	 	No benefit will be payable under this Plan with respect to a spouse after the death of that
spouse.
	 
	 	 	See Appendix A and Appendix B for the rules that apply to other benefits earned under the
Plan.
	 
	2.05	 	Forms and Times of Benefit Payments. This Section only applies to Grandfathered
Amounts.
	 
	 	 	The Company will determine the form and timing of benefit payments in its sole discretion.
However, for payments made to supplement those of a particular Pension Plan, the Company
will only select among the options available under that Pension Plan, and using the same
actuarial adjustments used in that Pension Plan except in cases of lump sums.
	 
	 	 	Whenever the present value of the amount payable under the Plan does not exceed $10,000, it
will be paid in the form of a single lump sum as of the first of the month following
Termination of Employment. The lump sum will be calculated using the factors and
methodology described in Section 3.08 below. (See Section 2.09 for the rule that applies as
of January 1, 2008).
	 
	 	 	No payments will commence under this Plan until a Participant has a Termination of
Employment, even in cases where benefits have commenced under a Pension Plan for
Participants over age 70-1/2.
	 
	 	 	See Appendix A and Appendix B for the rules that apply to other benefits earned under the
Plan.




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	2.06	 	Beneficiaries and Spouses. This Section only applies to Grandfathered Amounts.
	 
	 	 	If the Company selects a form of payment which includes a survivor benefit, the Participant
may make a beneficiary designation, which may be changed at any time prior to commencement
of benefits. A beneficiary designation must be in writing and will be effective only when
received by the Company.
	 
	 	 	If a Participant is married on the date his or her benefits are scheduled to commence, his
or her beneficiary will be his or her spouse unless some other beneficiary is named with
spousal consent. Spousal consent, to be effective, must be submitted in writing before
benefits commence and must be witnessed by a Plan representative or notary public. No
spousal consent is necessary if the Company determines that there is no spouse or that the
spouse cannot be found.
	 
	 	 	The Participant’s spouse will be the spouse as determined under the underlying Pension Plan.
	 
	 	 	See Appendix A and Appendix B for the rules that apply to other benefits earned under the
Plan.
	 
	2.07	 	Plan Termination. No further benefits may be earned under this Plan with respect to
a particular Pension Plan after the termination of such Pension Plan.
	 
	2.08	 	Pension Plan Benefits. The term “Pension Plan Benefits” generally means the benefits
actually payable to a Participant, spouse, beneficiary or contingent annuitant under a Pension
Plan. However, this Plan is only intended to remedy pension reductions caused by the
operation of section 415 and not reductions caused for any other reason. In those instances
where pension benefits are reduced for some other reason, the term “Pension Plan Benefits”
shall be deemed to mean the benefits that would have been actually payable but for such other
reason.
	 
	 	 	Examples of such other reasons include, but are not limited to, the following:






	 	(a)	 	A reduction in pension benefits as a result of a distress termination (as
described in ERISA § 4041(c) or any comparable successor provision of law) of a Pension
Plan. In such a case, the Pension Plan Benefits will be deemed to refer to the
payments that would have been made from the Pension Plan had it terminated on a fully
funded basis as a standard termination (as described in ERISA § 4041(b) or any
comparable successor provision of law).
	 
	 	(b)	 	A reduction of accrued benefits as permitted under Code section 412(c)(8), as
amended, or any comparable successor provision of law.
	 
	 	(c)	 	A reduction of pension benefits as a result of payment of all or a portion of a
Participant’s benefits to a third party on behalf of or with respect to a Participant.




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	2.09	 	Mandatory Cashout. Notwithstanding any other provisions in the Plan, Participants
with Grandfathered Amounts who have not commenced payment of such benefits prior to January 1,
2008 will be subject to the following rules:






	 	(a)	 	Post-2007 Terminations. Participants who have a Termination of
Employment after 2007 will receive a lump sum distribution of the present value of
their Grandfathered Amounts within two months of Termination of Employment (without
interest), if such present value is below the Code section 402(g) limit in effect at
the Termination of Employment.
	 
	 	(b)	 	Pre-2008 Terminations. Participants who had a Termination of
Employment before 2008 will receive a lump sum distribution of the present value of
their Grandfathered Amounts within two months of the time they commence payment of
their underlying qualified pension plan benefits (without interest), if such present
value is below the Code section 402(g) limit in effect at the time such payments
commence.






For purposes of calculating present values under this Section, the actual assumptions and
calculation procedures for lump sum distributions under the Huntington Ingalls Industries
Pension Plan shall be used.




	2.10	 	Optional Payment Forms. Participants with Grandfathered Amounts shall be permitted
to elect (a) or (b) below:






	 	(a)	 	To receive their Grandfathered Amounts in any form of distribution available
under the Plan at October 3, 2004, provided that form remains available under the
underlying qualified pension plan at the time payment of the Grandfathered Amounts
commences. The conversion factors for these distribution forms will be based on the
factors or basis in effect under the Plan on October 3, 2004.
	 
	 	(b)	 	To receive their Grandfathered Amounts in any life annuity form not included in
(a) above but included in the underlying qualified pension plan distribution options at
the time payment of the Grandfathered Amounts commences. The conversion factors will
be based on the following actuarial assumptions:





	 	 	 

	Interest Rate: 

	6%nbsp;
	 
	 	 
	Mortality Table: 	 RP-2000 Mortality Table projected 15 years for future standardized
cash balance factors







	2.11	 	Special Tax Distribution. On the date a Participant’s retirement benefit is
reasonably ascertainable within the meaning of IRS regulations under Code section 3121(v)(2),
an amount equal to the Participant’s portion of the FICA tax withholding will be distributed
in a single lump sum payment. This payment will be based on all benefits under the Plan,
including Grandfathered Amounts. This




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	 	 	payment will reduce the Participant’s future benefit payments under the Plan on an actuarial
basis.






- 8 -











 





ARTICLE III




Lump Sum Election



     This Article only applies with respect to Grandfathered Amounts. See Appendix A and Appendix
B for the distribution rules that apply to other benefits earned under the Plan.




	3.01	 	In General. This Article sets forth the rules under which Participants may elect to
receive their benefits in a lump sum. Except as provided in Section 3.08, this Article does
not apply to active employees (as defined in Section 3.04) in cases where benefits are
automatically payable in lump sum form under Article II.
	 
	3.02	 	Retirees Election. Participants and Participants’ beneficiaries already receiving
monthly benefits under the Northrop Grumman ERISA Supplemental Plan at its inception will be
given a one-time opportunity to elect a lump sum payout of future benefit payments.






	 	(a)	 	The election must be made within a 60-day period determined by the Company.
Within its discretion, the Company may delay the commencement of the 60-day period in
instances where the Company is unable to timely communicate with a particular payee.
	 
	 	(b)	 	The determination as to whether a payee is already receiving monthly benefits
will be made at the beginning of the 60-day period.
	 
	 	(c)	 	An election to take a lump sum must be accompanied by a waiver of the existing
retiree medical benefits by those Participants (and their covered spouses or surviving
spouses) entitled either to have such benefits entirely paid for by the Company or to
receive such benefits as a result of their classification as an employee under
Executive Class Code II.
	 
	 	 	 	Following the waiver, waiving Participants (and covered spouses or surviving
spouses) will be entitled to the coverage offered to employees who are eligible for
Senior Executive Retirement Insurance Benefits in effect as of July 1, 1993.
	 
	 	(d)	 	If the person receiving payments as of the beginning of the 60-day period dies
prior to making a lump sum election, his or her beneficiary, if any, may not make the
lump sum election.
	 
	 	(e)	 	Elections to receive a lump sum (and waivers under (c)) must be made in writing
and must include spousal consent if the payee (whether the Participant or beneficiary)
is married. Elections and spousal consent must be witnessed by a Plan representative
or a notary public.
	 
	 	(f)	 	An election (with spousal consent, where required) to receive the lump sum made
at any time during the 60-day period will be irrevocable. If no proper
election has been made by the end of the 60-day period, payments will continue
unchanged in the monthly form that had previously been applicable.





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	3.03	 	Retirees Lump Sum. If a retired Participant or beneficiary makes a valid election
under Section 3.02 within the 60-day period, monthly payments will continue in the previously
applicable form for 12 months (assuming the payees live that long).






	 	(a)	 	As of the first of the 13th month, the present value of the
remaining benefit payments will be paid in a single lump sum to the Participant, if
alive, or, if not, to the beneficiary under the previously applicable form of payment.
	 
	 	(b)	 	No lump sum payment will be made if:






	 	(1)	 	The Participant is receiving monthly benefit payments in a form
that does not provide for survivor benefits and the Participant dies before the
time the lump sum payment is due.
	 
	 	(2)	 	The Participant is receiving monthly benefit payments in a form
that does provide for survivor benefits but the Participant and the beneficiary
die before the time the lump sum payment is due.






	 	(c)	 	The following rules apply where payment is being made in the form of a 10-year
certain and continuous life annuity option:






	 	(1)	 	If the Participant is deceased at the commencement of the
60-day election period, the surviving beneficiary may not make the election if
there are less than 13 months left in the 10-year certain period.
	 
	 	(2)	 	If the Participant elects the lump sum and dies prior to the
first of the 13th month:






	 	(A)	 	if the 10-year certain period has already
ended, all monthly payments will cease at the Participant’s death and
no lump sum payment will be made;
	 
	 	(B)	 	if the 10-year certain period ends after the
Participant’s death and before the beginning of the 13th
month, monthly payments will end at the end of the 10-year certain
period and no lump sum payment will be made; and
	 
	 	(C)	 	if the 10-year certain period ends after the
beginning of the 13th month, monthly payments will continue
through the 12th month, and a lump sum payment will be made
as of the first of the 13th month, equal to the present
value of the remaining benefit payments.






	3.04	 	Actives Election. Active Participants may elect to have their benefits paid in the
form of a single lump sum under this Section.




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	 	(a)	 	A Participant is considered to be “Active” under this Section if he or she is
still employed by the Affiliated Companies on or after the beginning of the initial
60-day period referred to in Section 3.02.
	 
	 	(b)	 	An election to take a lump sum may be made at any time during the 60-day period
prior to Termination of Employment and covers both—






	 	(1)	 	Benefits payable to the Participant during his or her lifetime,
and
	 
	 	(2)	 	Survivor benefits (if any) payable to the Participant’s
beneficiary, including preretirement death benefits (if any) payable to the
Participant’s spouse.






	 	(c)	 	An election does not become effective until the earlier of






	 	(1)	 	the Participant’s Termination of Employment, or
	 
	 	(2)	 	the Participant’s death.
	 
	 	 	 	Before the election becomes effective, it may be revoked.
	 
	 	 	 	If a Participant does not have a Termination of Employment within 60 days after
making an election, the election will never take effect.






	 	(d)	 	An election may only be made once. If it fails to become effective after 60
days or is revoked before becoming effective, it cannot be made again at a later time.
	 
	 	(e)	 	After a Participant has a Termination of Employment, no election can be made.
	 
	 	(f)	 	If a Participant dies before making a lump sum election, his or her spouse may
not make a lump sum election with respect to any benefits which may be due the spouse.
	 
	 	(g)	 	Elections to receive a lump sum must be made in writing and must include
spousal consent if the Participant is married. Elections and spousal consent must be
witnessed by a Plan representative or a notary public.






	3.05	 	Actives Lump Sum — Retirement Eligible. If a Participant with a valid lump sum
election in effect under Section 3.04 has a Termination of Employment after he or she is
entitled to commence benefits under the Pension Plans, payments will be made in accordance
with this Section.






	 	(a)	 	Monthly benefit payments will be made for up to 12 months, commencing the first
of the month following Termination of Employment. Payments will be made:




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	 	(1)	 	in the case of a Participant who is not married on the date
benefits are scheduled to commence, based on a straight life annuity for the
Participant’s life and ceasing upon the Participant’s death should he or she
die before the 12 months elapse, or
	 
	 	(2)	 	in the case of a Participant who is married on the date
benefits are scheduled to commence, based on a joint and survivor annuity form
—






	 	(A)	 	with the survivor benefit equal to 50% of the
Participant’s benefit;
	 
	 	(B)	 	with the Participant’s spouse as the survivor
annuitant;
	 
	 	(C)	 	determined by using the contingent annuitant
option factors used to convert straight life annuities to 50% joint and
survivor annuities under the Huntington Ingalls Industries Pension
Plan; and
	 
	 	(D)	 	with all payments ceasing upon the death of
both the Participant and his or her spouse should they die before the
12 months elapse.






	 	(b)	 	As of the first of the 13th month, the present value of the
remaining benefit payments will be paid in a single lump sum. Payment of the lump sum
will be made to the Participant if he or she is still alive, or, if not, to his or her
surviving spouse, if any.
	 
	 	(c)	 	No lump sum payment will be made if:






	 	(1)	 	The Participant is receiving monthly benefit payments in the
form of a straight life annuity and the Participant dies before the time the
lump sum payment is due.
	 
	 	(2)	 	The Participant is receiving monthly benefit payments in a
joint and survivor annuity form and the Participant and his or her spouse both
die before the time the lump sum payment is due.






	 	(d)	 	A lump sum will be payable to a Participant’s spouse as of the first of the
month following the date of the Participant’s death, if:






	 	(1)	 	the Participant dies after making a valid lump sum election but
prior to commencement of any benefits under this Plan;
	 
	 	(2)	 	the Participant is survived by a spouse who is entitled to a
preretirement surviving spouse benefit under this Plan; and
	 
	 	(3)	 	the spouse survives to the first of the month following the
date of the Participant’s death.




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	3.06	 	Actives Lump Sum — Not Retirement Eligible. If a Participant with a valid lump sum
election in effect under Section 3.04, has a Termination of Employment before he or she is
entitled to commence benefits under the Pension Plans, payments will be made in accordance
with this Section.






	 	(a)	 	No monthly benefit payments will be made.
	 
	 	(b)	 	Following Termination of Employment, a single lump sum payment of the benefit
will be made on the first of the month following 12 months after the date of the
Participant’s Termination of Employment.
	 
	 	(c)	 	A lump sum will be payable to a Participant’s spouse as of the first of the
month following the date of the Participant’s death, if:






	 	(1)	 	the Participant dies after making a valid lump sum election but
prior to commencement of any benefits under this Plan;
	 
	 	(2)	 	the Participant is survived by a spouse who is entitled to a
preretirement surviving spouse benefit under this Plan; and
	 
	 	(3)	 	the spouse survives to the first of the month following the
date of the Participant’s death.






	 	(d)	 	No lump sum payment will be made if the Participant is unmarried at the time of
death and dies before the time the lump sum payment is due.






	3.07	 	Lump Sums with CIC Severance Plan Election. A Participant who elects lump sum
payments of all his or her nonqualified benefits under the CIC Plans is entitled to have his
or her benefits paid as a lump sum calculated under the terms of the applicable CIC Plan.
Otherwise, benefit payments are governed by the general provisions of this Article, which
provide different rules for calculating the amount of lump sum payments.
	 
	3.08	 	Calculation of Lump Sum. The factors to be used in calculating the lump sum are as
follows:






	 	Interest: Whichever of the following two rates that produces the smaller
lump sum:
	 
	 	(1)	 	the discount rate used by the Company for purposes of Statement
of Financial Accounting Standards No. 87 of the Financial Accounting Standards
Board as disclosed in the Company’s annual report to shareholders for the year
end immediately preceding the date of distribution, or
	 
	 	(2)	 	the applicable interest rate that would be used to calculate a
lump sum value for the benefit under the Pension Plans.




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	 	 	 	Mortality: the applicable mortality table that would be used to calculate a
lump sum value for the benefit under the Huntington Ingalls Industries Pension Plan.
	 
	 	 	 	Increase in Section 415 Limit: 4% per year.
	 
	 	 	 	Age: Age rounded to the nearest month on the date the lump sum is payable.
	 
	 	 	 	Variable Unit Values: Variable Unit Values are presumed not to increase for
future periods after the date the lump sum is payable.






	 	 	 	The annuity to be converted to a lump sum will be the remaining annuity currently payable to
the Participant or his or her beneficiary at the time the lump sum is due.






	 	 	 	For example, assume a Participant is receiving benefit payments in the form of a 50%
joint and survivor annuity.
	 
	 	 	 	If the Participant and the survivor annuitant are both still alive at the time the
lump sum payment is due, the present value calculation will be based on the
remaining benefits that would be paid to both the Participant and the survivor in
the annuity form.
	 
	 	 	 	If only the survivor is alive, the calculation will be based solely on the remaining
50% survivor benefits that would be paid to the survivor.
	 
	 	 	 	If only the Participant is alive, the calculation will be based solely on the
remaining benefits that would be paid to the Participant.






	 	 	 	In the case of a Participant who dies prior to commencement of benefits under this Plan so
that only a preretirement surviving spouse benefit (if any) is payable, the lump sum will be
based solely on the value of the preretirement surviving spouse benefit.
	 
	 	 	 	In the case of a lump-sum under Section 3.07 (related to lump sums with a CIC Severance Plan
election), the lump-sum amount will be calculated as described in that section and the rules
of this Section 3.08 are not used.






	3.09	 	Spousal Consent. Spousal consent, as required for elections as described above, need
not be obtained if the Company determines that there is no spouse or the spouse cannot be
located.




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ARTICLE IV




Miscellaneous




	4.01	 	Amendment and Plan Termination. The Company may, in its sole discretion, terminate,
suspend or amend this Plan at any time or from time to time, in whole or in part for any
reason. This includes the right to amend or eliminate any of the provisions of the Plan with
respect to lump sum distributions, including any lump sum calculation factors, whether or not
a Participant has already made a lump sum election. Notwithstanding the foregoing, no
amendment or termination of the Plan shall reduce the amount of a Participant’s accrued
benefit under the Plan as of the date of such amendment or termination.
	 
	 	 	No amendment of the Plan shall apply to the Grandfathered Amounts, unless the amendment
specifically provides that it applies to such amounts. The purpose of this restriction is
to prevent a Plan amendment from resulting in an inadvertent “material modification” to the
Grandfathered Amounts.
	 
	 	 	The Company may, in its sole discretion, seek reimbursement from the Pension Plans to the
extent this Plan pays Pension Plan Benefits to which Participants were entitled to or became
entitled to under the Pension Plans.
	 
	4.02	 	Not an Employment Agreement. Nothing contained in this Plan gives any Participant
the right to be retained in the service of the Company, nor does it interfere with the right
of the Company to discharge or otherwise deal with Participants without regard to the
existence of this Plan.
	 
	4.03	 	Assignment of Benefits. A Participant, surviving spouse or beneficiary may not,
either voluntarily or involuntarily, assign, anticipate, alienate, commute, sell, transfer,
pledge or encumber any benefits to which he or she is or may become entitled under the Plan,
nor may Plan benefits be subject to attachment or garnishment by any of their creditors or to
legal process.
	 
	 	 	Notwithstanding the foregoing, all or a portion of a Participant’s benefit may be paid to
another person as specified in a domestic relations order that the plan administrator
determines is qualified (a “Qualified Domestic Relations Order”). For this purpose, a
Qualified Domestic Relations Order means a judgment, decree, or order (including the
approval of a settlement agreement) which is:






	 	(1)	 	issued pursuant to a State’s domestic relations law;
	 
	 	(2)	 	relates to the provision of child support, alimony payments or marital property
rights to a spouse, former spouse, child or other dependent of the Participant;
	 
	 	(3)	 	creates or recognizes the right of a spouse, former spouse, child or other
dependent of the Participant to receive all or a portion of the Participant’s benefits
under the Plan; and




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	 	(4)	 	meets such other requirements established by the plan administrator.
	 





	 	 	The plan administrator shall determine whether any document received by it is a Qualified
Domestic Relations Order. In making this determination, the plan administrator may consider
the rules applicable to “domestic relations orders” under Code section 414(p) and ERISA
section 206(d), and such other rules and procedures as it deems relevant.






	4.04	 	Nonduplication of Benefits. This Section applies if, despite Section 4.03, with
respect to any Participant (or his or her beneficiaries), the Company is required to make
payments under this Plan to a person or entity other than the payees described in the Plan.
In such a case, any amounts due the Participant (or his or her beneficiaries) under this Plan
will be reduced by the actuarial value of the payments required to be made to such other
person or entity.






	 	 	 	Actuarial value will be determined using the factors and methodology described in
Section 3.08 above (in the case of lump sums) and using the actuarial assumptions in
the underlying Pension Plan in all other cases.
	 
	 	 	 	In dividing a Participant’s benefit between the Participant and another person or
entity, consistent actuarial assumptions and methodologies will be used so that
there is no increased actuarial cost to the Company.






	4.05	 	Funding. Participants have the status of general unsecured creditors of the Company
and the Plan constitutes a mere promise by the Company to make benefit payments in the future.
The Company may, but need not, fund benefits under the Plan through a trust. If it does so,
any trust created by the Company and any assets held by the trust to assist it in meeting its
obligations under the Plan will conform to the terms of the model trust, as described in
Internal Revenue Service Revenue Procedure 92-64, but only to the extent required by Internal
Revenue Service Revenue Procedure 92-65. It is the intention of the Company and Participants
that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA.
	 
	 	 	Any funding of benefits under this Plan will be in the Company’s sole discretion. The
Company may set and amend the terms under which it will fund and may cease to fund at any
time.
	 
	4.06	 	Construction. The Company shall have full discretionary authority to determine
eligibility and to construe and interpret the terms of the Plan, including the power to remedy
possible ambiguities, inconsistencies or omissions.
	 
	4.07	 	Governing Law. This Plan shall be governed by the law of the State of Delaware,
except to the extent superseded by federal law.
	 
	4.08	 	Actions By Company and Claims Procedures. Any powers exercisable by the Company
under the Plan shall be utilized by written resolution adopted by the Board of Directors or
its delegate. The Board may by written resolution delegate any of the Company’s powers




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	 	 	under the Plan and any such delegations may provide for subdelegations, also by written resolution.
	 
	 	 	The Company’s standardized “Huntington Ingalls Industries Nonqualified Retirement Plans
Claims and Appeals Procedures” shall apply in handling claims and appeals under this Plan.






	4.09	 	Plan Representatives. Those authorized to act as Plan representatives will be
designated in writing by the Board of Directors or its delegate.
	 
	4.10	 	Number. The singular, where appearing in this Plan, will be deemed to include the
plural, unless the context clearly indicates the contrary.





* * *




     IN WITNESS WHEREOF, this Plan is hereby executed by a duly authorized officer on this
______ day of _____________, 2011.



	 	 	 	 	 
	 	HUNTINGTON INGALLS INDUSTRIES, INC.

 	 
	 	By:  	 	 




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APPENDIX A — 2005-2007 TRANSITION RULES




          This Appendix A provides the distribution rules that apply to the portion of benefits under
the Plan subject to Code section 409A for Participants with benefit commencement dates after
January 1, 2005 and before January 1, 2008.



	 	 	 

	A.01

	 	 Election. Participants scheduled to commence payments during 2005
may elect to receive both pre-2005 benefit accruals and 2005 benefit
accruals in any optional form of benefit available under the Plan as
of December 31, 2004. Participants electing optional forms of
benefits under this provision will commence payments on the
Participant’s selected benefit commencement date.
	 
	 	 
	A.02

	 	 2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 & Q&A-20,
Participants commencing payments in 2005 from the Plan may elect a
form of distribution from among those available under the Plan on
December 31, 2004, and benefit payments shall begin at the time
elected by the Participant.







	 	(a)	 	Key Employees. A Key Employee Separating from Service on or after July
1, 2005, with Plan distributions subject to Code section 409A scheduled to be paid in
2006 and within six months of his date of Separation from Service, shall have such
distributions delayed for six months from the Key Employee’s date of Separation from
Service. The delayed distributions shall be paid as a single sum with interest at the
end of the six month period and Plan distributions will resume as scheduled at such
time. Interest shall be computed using the retroactive annuity starting date rate in
effect under the Northrop Grumman Pension Plan on a month-by-month basis during such
period (i.e., the rate may change in the event the period spans two calendar years).
Alternatively, the Key Employee may elect under IRS Notice 2005-1, Q&A-20 to have such
distributions accelerated and paid in 2005 without the interest adjustment, provided,
such election is made in 2005.
	 
	 	(b)	 	Lump Sum Option. During 2005, a temporary immediate lump sum feature
shall be available as follows:






	 	(i)	 	In order to elect a lump sum payment pursuant to IRS Notice
2005-1, Q&A-20, a Participant must be an elected or appointed officer of the
Company and eligible to commence payments under the underlying qualified
pension plan on or after June 1, 2005 and on or before December 1, 2005;
	 
	 	(ii)	 	The lump sum payment shall be made in 2005 as soon as feasible
after the election; and
	 
	 	(iii)	 	Interest and mortality assumptions and methodology for
calculating lump sum amount shall be based on the Plan’s procedures for
calculating lump sums as of December 31, 2004.




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	A.03

	 	2006 and 2007 Commencements. Pursuant to IRS transition relief, for all benefit
commencement dates in 2006 and 2007 (provided election is made in 2006 or 2007), distribution
of Plan benefits subject to Code section 409A shall begin 12 months after the later of: (a)
the Participant’s benefit election date, or (b) the underlying qualified pension plan benefit
commencement date (as specified in the Participant’s benefit election form). Payments delayed
during this 12-month period will be paid at the end of the period with interest. Interest
shall be computed using the retroactive annuity starting date rate in effect under the
Northrop Grumman Pension Plan on a month-by-month basis during such period (i.e., the rate may
change in the event the period spans two calendar years).






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APPENDIX B — POST 2007

DISTRIBUTION OF 409A AMOUNTS




          The provisions of this Appendix B shall apply only to the portion of benefits under the Plan
that are subject to Code section 409A with benefit commencement dates on or after January 1, 2008.
Distribution rules applicable to the Grandfathered Amounts are set forth in Articles II and III,
and Appendix A addresses distributions of amounts subject to Code section 409A with benefit
commencement dates after January 1, 2005 and prior to January 1, 2008.



	 	 	 

	B.01

	 	Time of Distribution. Subject to the special rules provided in this
Appendix B, distributions to a Participant of his vested retirement
benefit shall commence as of the Payment Date.
	 
	 	 
	B.02

	 	Special Rule for Key Employees. If a Participant is a Key Employee
and age 55 or older at his Separation from Service, distributions to
the Participant shall commence on the first day of the seventh month
following the date of his Separation from Service (or, if earlier,
the date of the Participant’s death). Amounts otherwise payable to
the Participant during such period of delay shall be accumulated and
paid on the first day of the seventh month following the
Participant’s Separation from Service, along with interest on the
delayed payments. Interest shall be computed using the retroactive
annuity starting date rate in effect under the Huntington Ingalls
Industries Pension Plan on a month-by-month basis during such delay
(i.e., the rate may change in the event the delay spans two calendar
years).
	 
	 	 
	B.03

	 	Forms of Distribution. Subject to the special rules provided in this
Appendix B, a Participant’s vested retirement benefit shall be
distributed in the form of a single life annuity. However, a
Participant may elect an optional form of benefit up until the
Payment Date. The optional forms of payment are:







	 	(a)	 	50% joint and survivor annuity
	 
	 	(b)	 	75% joint and survivor annuity
	 
	 	(c)	 	100% joint and survivor annuity.





	 	 	 

	 

	 	If a Participant is married on his Payment Date and elects a joint and survivor annuity, his
survivor annuitant will be his spouse unless some other survivor annuitant is named with
spousal consent. Spousal consent, to be effective, must be submitted in writing before the
Payment Date and must be witnessed by a Plan representative or notary public. No spousal
consent is necessary if the Company determines that there is no spouse or that the spouse
cannot be found.
	 
	 	 
	B.04

	 	Death. If a married Participant dies before the Payment Date, a death benefit will
be payable to the Participant’s spouse commencing 90 days after the Participant’s death. The
death benefit will be a single life annuity in an amount equal to the survivor portion of a
Participant’s vested retirement benefit based on a 100% joint and survivor annuity determined
on the Participant’s date of death. This
benefit is also payable to a






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	 	Participant’s domestic
partner who is properly registered with the Company in
accordance with procedures established by the Company.
	 
	 	 
	B.05

	 	Actuarial Assumptions.
Except as provided in
Section B.06, all forms of
payment under this Appendix
B shall be actuarially
equivalent life annuity
forms of payment, and all
conversions from one such
form to another shall be
based on the following
actuarial assumptions:






	 	 	 

	Interest Rate:

	 	6%
	 
	Mortality Table:

	 	RP-2000 Mortality Table projected 15 years for future standardized cash
balance factors






	 	 	 

	B.06

	 	Accelerated Lump Sum Payouts.







	 	(a)	 	Post-2007 Separations. Notwithstanding the provisions of this Appendix
B, for Participants who Separate from Service on or after January 1, 2008, if the
present value of (a) the vested portion of a Participant’s retirement benefit and (b)
other vested amounts under nonaccount balance plans that are aggregated with the
retirement benefit under Code section 409A, determined on the first of the month
coincident with or following the date of his Separation from Service, is less than or
equal to $25,000, such benefit amount shall be distributed to the Participant (or his
spouse or domestic partner, if applicable) in a lump sum payment. Subject to the
special timing rule for Key Employees under Section B.02, the lump sum payment shall be
made within 90 days after the first of the month coincident with or following the date
of the Participant’s Separation from Service.
	 
	 	(b)	 	Pre-2008 Separations. Notwithstanding the provisions of this Appendix
B, for Participants who Separate from Service before January 1, 2008, if the present
value of (a) the vested portion of a Participant’s retirement benefit and (b) other
vested amounts under nonaccount balance plans that are aggregated with the retirement
benefit under Code section 409A, determined on the first of the month coincident with
or following the date the Participant attains age 55, is less than or equal to $25,000,
such benefit amount shall be distributed to the Participant (or his spouse or domestic
partner, if applicable) in a lump sum payment within 90 days after the first of the
month coincident with or following the date the Participant attains age 55, but no
earlier that January 1, 2008.
	 
	 	(c)	 	Conflicts of Interest. The present value of a Participant’s vested
retirement benefit shall also be payable in an immediate lump sum to the extent
required under conflict of interest rules for government service and permissible under
Code section 409A.
	 
	 	(d)	 	Present Value Calculation. The conversion of a Participant’s
retirement benefit into a lump sum payment and the present value calculations under
this Section B.06 shall be based on the actuarial assumptions in effect under the
Huntington Ingalls Industries Pension Plan for purposes of calculating lump sum amounts,




- 21 -









 






	 	 	 	and
will be based on the Participant’s immediate benefit if the Participant is 55 or
older at Separation from Service. Otherwise, the calculation will be based on the
benefit amount the Participant will be eligible to receive at age 55.





	 	 	 

	B.07

	 	 Effect of Early Taxation. If the Participant’s benefits under the
Plan are includible in income pursuant to Code section 409A, such
benefits shall be distributed immediately to the Participant.
	 
	 	 
	B.08

	 	Permitted Delays. Notwithstanding the foregoing, any payment to a
Participant under the Plan shall be delayed upon the Company’s
reasonable anticipation of one or more of the following events:







	 	(a)	 	The Company’s deduction with respect to such payment would be eliminated by
application of Code section 162(m); or
	 
	 	(b)	 	The making of the payment would violate Federal securities laws or other
applicable law;






provided, that any payment delayed pursuant to this Section B.08 shall be paid in accordance
with Code section 409A.



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APPENDIX C — NORTHROP GRUMMAN SPIN-OFF




	 	 	 

	C.01

	 	Background. The Company was a subsidiary of Northrop Grumman
Corporation (“NGC”) prior to the Distribution Date. On the
Distribution Date, pursuant to an agreement between the Company and
NGC, the liabilities for certain participants’ benefits under the
Northrop Grumman ERISA Supplemental Plan (the “NGC Plan”), including
Grandfathered Amounts, were transferred to the Company and to this
Plan. The Participants whose benefits were transferred to this Plan
on the Distribution Date and other Participants who were employees of
the Affiliated Companies on the Distribution Date are referred to
below as “NGC Participants.” The rules in this Appendix shall apply
to NGC Participants and certain other Plan terms notwithstanding any
Plan provisions to the contrary.
	 
	 	 
	C.02

	 	Plan Benefits. NGC Participants who qualified as eligible employees
under the NGC Plan on the Distribution Date shall be eligible
employees under this Plan on such date. All service and compensation
that would be taken into account for purposes of determining the
amount of a NGC Participant’s benefit or his vested right to a
benefit under the NGC Plan as of the Distribution Date shall be taken
into account for the same purposes under this Plan.
	 
	 	 
	C.03

	 	Distributions. The terms of this Plan shall govern the distribution
of all benefits payable to a NGC Participant or any other person with
a right to receive such benefits, including amounts accrued under the
NGC Plan and then transferred to this Plan.
	 
	 	 
	C.04

	 	Termination and Key Employees. For avoidance of doubt, no NGC
Participant shall be treated as incurring a separation from service,
termination of employment, retirement, or similar event for purposes
of determining the right to a distribution (for amounts subject to
Code section 409A or otherwise), vesting, benefits, or any other
purpose under the Plan as a result of NGC’s distribution of Company
shares to NGC’s shareholders. Also, the Company’s Key Employees
shall be determined in accordance with the special rules for
spin-offs under Treas. Reg. §1.409A-1(i)(6)(iii), or any successor
thereto, for the period indicated in such regulation.
	 
	 	 
	C.05

	 	Participant Elections. All elections made by NGC Participants under
the NGC Plan, including any payment elections or beneficiary
designations, shall apply to the same effect under this Plan as if
made under the terms of this Plan.
	 
	 	 
	C.06

	 	References to Plan. All references in this Plan to the “Plan” as in
effect before the effective date of the Plan shall be read as
references to the NGC Plan.
	 
	 	 
	C.07

	 	Right to Benefits. With respect to any service or compensation used to determine a
benefit provided or due under the NGC Plan at any time, no benefit will be due under the Plan
except with respect to such service and compensation related to a liability transferred from the
NGC Plan to the Plan on the Distribution Date. Additionally, on and after the Distribution Date,
NGC and the NGC Plan, and any successors thereto shall have no further obligation or liability to
any NGC Participant with respect to any benefit, amount, or right due under the NGC
Plan.







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