Document:

Exhibit 10.1

 

CONFIDENTIAL

 

SETTLEMENT AGREEMENT

 

THIS SETTLEMENT AGREEMENT
(this "Agreement") is entered into as of January 3, 2012 (the "Effective Date"), by and between Webxu,
Inc. a Delaware corporation, and its subsidiary Bonus Interactive, Inc., a Delaware corporation (collectively
referred to hereafter as “Webxu”), on the one hand, and Kirkcaldy Group, LLC (“Kirkcaldy”), a
Nevada limited liability company, on the other hand.

 

WHEREAS, the parties entered
into a Consulting Agreement dated as of April 15, 2011 and have had various other business dealings related to Bonus
Interactive between themselves (collectively referred to as the “Contract”), and

 

WHEREAS, certain disputes and differences have
existed between the parties with respect to performance under the Contract, and

 

WHEREAS the parties to this Agreement wish to
finally resolve and settle any and all disputes and differences between and among them.

 

NOW, THEREFORE, in consideration of the promises
and mutual covenants and agreements contained in this Agreement, the parties agree as follows:

 

1.         Consideration

 

a.        Payments.

 

1.        Services:
As set forth in the payment schedule below, Webxu shall pay to Kirkcaldy the net reconciled balance of all sums due and owing to
Kirkcaldy for the services provided by Kirkcaldy for the past four (4) months, which sum is $81,482.30. Payment of the aforementioned
sum shall be made by Webxu as follows: $20,000 shall be due and payable no later than January 9, 2012; thereafter $20,000 shall
be paid each month on the 15th day of the month starting with February 15, 2012 until the sum is paid in full. All payments shall
be made via wire transfer.

 

2.        Settlement:
In addition to the sums set forth in subsection 1(a)(1) above, Webxu shall also pay to Kirkcaldy the additional sum of One Hundred
Thousand Dollars ($100,000.00). This additional sum shall be as follows: $20,000 shall be due and payable no later than May 15,
2012;thereafter $20,000 shall be paid each month on the 15th day of the month starting with June 15, 2012 until the sum is paid
in full. Webxu shall have the right but not the obligation to prepay any sums due under this Subsection 1(a) in advance without
any penalty or charge. All payments shall be made via wire transfer.

 

b.         Issuance
of Stock. Within seven days (7) of execution of this Agreement by all parties, Webxu shall issue to Kirkcaldy a stock certificate
for four hundred thousand (400,000) restricted shares of common stock of Webxu which shares shall be subject to a lock-up agreement.
Prior to delivery of the certificate for such shares, Kirkcaldy shall deliver to Webxu an executed lock-up agreement amendment
in the form attached hereto as Exhibit A.

 

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CONFIDENTIAL

 

c.        Termination
of the Contract. Coincident with the execution of this Agreement, the Contract shall be terminated in its entirety, and there
shall be no further obligations of Webxu to Kirkcaldy as to the Contract except as set forth in this Agreement. The execution of
this Agreement by all parties terminates any and all prior obligations of any kind or nature of Webxu to Kirkcaldy, whether written
or verbal, except any separate obligations of Webxu to Kirkcaldy in its capacity as a stockholder (including any stock transfer
and registration obligations) or any obligations of Kirkcaldy to Webxu under the lock-up agreement.

 

2.        Confidentiality.
Each party shall forever refrain from any disclosure of any information whatsoever to any third person or entity concerning the
terms of this Agreement, or other confidential or proprietary information of the other party, without the prior written permission
of the other party, with the exception of disclosures on a need-to-know basis to any party’s tax preparer, accountants, financial
advisors, attorneys, or as required by law.

 

3.         Accredited
Investor. Kirkcaldy represents and warrants:

 

a.        Kirkcaldy
has such knowledge and experience in financial and business matters that Kirkcaldy is capable of evaluating the merits and risks
of an investment in the Company and the suitability of the Units as an investment for Subscriber;

 

b.        Kirkcaldy
is an Accredited Investor; “Accredited Investor” means:

 

1.        an
individual who has a net worth (either individually or jointly with spouse) in excess of $1,000,000 (not including my principal
residence); or an individual who had an individual income (NOT including joint income with spouse) in excess of $200,000 in each
of the two most recent tax years and reasonably expects individual income in excess of $200,000 during the current tax year; or
an individual who had an income (including joint income with spouse) in excess of $300,000 in each of the two most recent tax years
and reasonably expects individual income in excess of $300,000 during the current tax year. “Income” for this purpose
is computed by adding the following items to adjusted gross income for federal income tax purposes: (a) the amount of any tax-exempt
interest income received; (b) the amount of losses claimed as a limited partner in a limited partnership; (c) any deduction claimed
for depletion; (d) deductions for alimony paid; (e) deductible amounts contributed to an IRA or Keogh retirement plan; and (f)
any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions
of Section 1202 of the Code; or

 

2.        an
entity which is one of the following:(a) A bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”) or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether
acting in an individual or a fiduciary capacity; (b) An insurance company, as defined in Section 2(13) of the Securities Act; (c)
An investment company registered under the Investment Company Act of 1940; (d) A business development company, as defined in Section
2(a)(48) of the Investment Company Act of 1940; (e) A small business investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958; (f) An employee benefit plan within the meaning of Title
I of the Employee Retirement Income Security Act of 1974 and the investment is made by Subscriber as a plan fiduciary, as defined
in Section 3(21) of such Act, and Subscriber is a bank, insurance company or a registered investment advisor, or has total assets
in excess of $5 million; (g) A private business development company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940; (h) An organization described in Section 501 (c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or
similar business trust, or a partnership, not formed for the specific purpose of acquiring Units, with total assets in excess of
$5 million; (i) An irrevocable trust with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring
Units, whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable
of evaluating the merits and risks of the prospective investment; (j) A revocable trust that is revocable by its grantors, each
of whose grantors is an accredited investor, qualifies as an accredited investor for the purposes of the subscription (each grantor
should complete the individual accredited information questionnaire, and describe the fact that they are grantors of the trust
on such individual questionnaire below); or (k) An entity in which all of the equity owners are Accredited Investors.

 

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CONFIDENTIAL

 

c.        Kirkcaldy
is acquiring the shares for its own account for long-term investment and not with a view toward resale, fractionalization or division,
or distribution thereof, and it does not presently have any reason to anticipate any change in its circumstances, financial or
otherwise, or particular occasion or event which would necessitate or require its sale or distribution of the shares. No one other
than Kirkcaldy has any beneficial interest in said securities;

 

d.        Kirkcaldy
has received no representations or warranties from Webxu, or its affiliates, employees, or agents regarding the shares or suitability
of an investment in the shares or Webxu other than those set forth in this Agreement. Kirkcaldy recognizes that Webxu will need
additional capital but has no assurance of obtaining such additional necessary capital;

 

e.        Kirkcaldy
is able to bear the economic risk of the investment in the shares, and Kirkcaldy has sufficient net worth to sustain a loss of
Kirkcaldy’s entire investment in Webxu without economic hardship if such a loss should occur;

 

f.        Kirkcaldy
has had an opportunity to inspect relevant documents relating to the organization and operations of Webxu. Kirkcaldy acknowledges
that all documents, records, and books pertaining to this investment that Kirkcaldy has requested have been made available for
inspection by Kirkcaldy and Kirkcaldy’s attorney, accountant, or other adviser(s);

 

g.        Kirkcaldy
has had an opportunity to ask questions of and receive satisfactory answers from Webxu, or any person or persons acting on behalf
of Webxu, concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction
of Kirkcaldy. Webxu has not supplied Kirkcaldy any information other than as contained in this Agreement, and Kirkcaldy is relying
on its own investigation and evaluation of Webxu and the shares in making an investment hereunder and not on any other information;

 

h.        Kirkcaldy
has not become aware of and has not been offered the shares by any form of general solicitation or advertising, including, but
not limited to, advertisements, articles, notices, or other communications published in any newspaper, magazine, or other similar
media or television or radio broadcast or any seminar or meeting where, to the Kirkcaldy’s knowledge, those individuals that
have attended have been invited by any such or similar means of general solicitation or advertising.

 

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CONFIDENTIAL

 

4.        Release
and Discharge . Except as otherwise expressly set forth in this Agreement, each party, on behalf of itself and its past, present
and future subsidiaries, affiliates, parents, subsidiaries, officers, directors, trustees, managing agents, employees, members,
managers, predecessors and successor organizations, hereby releases and forever discharges the other, and any and all of its past,
present and future parents, subsidiaries, officers, directors, trustees, managing agents, employees, members, managers, predecessors
and successor organizations (collectively, the “Released Parties”), of and from any and all claims, demands, causes
of action, litigation costs, attorneys’ fees, obligations, damages and liabilities, whether or not known, suspected or claimed,
which such party ever had, now has or may hereafter claim to have had as of or prior to the date of this Agreement, against the
other with respect to the Contract. Notwithstanding the foregoing, the release in this Section does not apply to any default or
claimarising out of this Agreement. The claims released in this Section are referred to collectively as the "Released Claims."

 

5.        Civil
Code Section 1542. Each party expressly waives any right or benefit available to it in any capacity under the provisions of
Section 1542 of the Civil Code of California which provides:

 

“A
general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement with the debtor.”

 

6.        Covenant
Not To Sue. Each party covenants and agrees that it will never, individually or with any entity or person or in any way, commence,
aid in any way (except as required by due legal process), prosecute or cause or permit to be commenced or prosecuted against any
of the Released Parties any action or other proceeding based upon any Released Claim. This Agreement shall be deemed breached and
a cause of action shall be deemed to have accrued immediately upon the commencement or prosecution of any action or proceeding
contrary to this Agreement.

 

7.        No
Third Party Claims. Each party represents and covenants that it has no knowledge of any person other than the parties to this
Agreement that had or has any claims to or interest in any of the Released Claims; and that it has not sold, assigned, transferred,
conveyed or otherwise disposed of any claim or demand relating to any Released Claim.

 

8.        Breach
and Indemnification. If either party fails to carry out the terms of this Agreement, then that party shall indemnify and reimburse
the other party for all losses, expenses, costs and charges incurred by such other party, including, but not limited to, such other
indemnified party’s attorneys' fees, costs and all other expenses incurred in enforcing this Agreement. It is further agreed
that this Agreement shall be deemed breached and a cause of action accrued thereon immediately upon the commencement of any action
contrary to this Agreement, and in any such action this Agreement may be pleaded by the non-breaching party, both as a defense
and as a counter-claim or cross-claim in such action.

 

9.        Arbitration.
The parties will attempt to settle any controversy or claim arising out of or relating to this Agreement, or the breach thereof,
through friendly consultation between the parties. If within thirty (30) days from the initial receipt by the allegedly offending
party of written notice of the controversy, claim or breach (the "Consultation Period") settlement cannot be reached,
the controversy or claim will be settled by binding arbitration conducted before a single arbitrator selected in accordance with
the procedures of the American Arbitration Association. The arbitration will be conducted in accordance with the then applicable
Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. Except as set forth elsewhere, each party will bear its own costs and expenses,
including fees and expenses of counsel, associated with the arbitration, with the cost of the arbitrator to be split equally. The
arbitrator will not be empowered to award punitive damages except for willful misconduct. All arbitrations shall be conducted in
Los Angeles County, California.

 

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CONFIDENTIAL

 

10.        Costs
and Expenses. If either party should bring any action or arbitration to resolve any claim arising out of or related to this
Agreement, the prevailing party in such action shall be entitled to receive from the non-prevailing party all of its costs and
expenses incurred in such action (including, without limitation, reasonable attorneys’ fees).

 

11.        No
Admissions or Concessions. The parties acknowledge that the consideration provided for in this Agreement is solely for the
purpose of preventing litigation based upon the claims raised by the parties, and without admission or concession by any party
of any violation of any law or liability on account of any of the claims or any matters of alleged breach of duty imposed by law.
Each Party will bear its own costs and attorneys’ fees incurred in connection with this dispute.

 

12.        Entire
Agreement. Each party warrants that no promise, inducement or agreement not expressed in this Agreement has been made in connection
with this Agreement, and that this Agreement constitutes the entire agreement between them. Each party acknowledges and agrees
that it has entered into this Agreement freely and voluntarily and that each party has been advised by counsel of its own choosing.
This Agreement may be amended only by a subsequent writing signed by both parties to this Agreement.

 

13.         Severability.
If any provision of this Agreement shall be declared invalid, illegal or unenforceable, such provision shall be severed and all
remaining provisions shall continue in full force and effect and the parties shall negotiate in good faith to replace the unenforceable
provision with a provision that has the effect nearest to that of the provision being severed.

 

14.        Interpretation.
This Agreement has been negotiated by the parties and by their respective counsel. This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or against either party either as drafter or otherwise.

 

15.        Waiver.
A waiver of any provision, breach or default of this Agreement shall only be effective if it is pursuant to a writing signed by
both parties. Any waiver by either party of any default or breach hereunder shall not constitute a waiver of any provision of
this Agreement or of any subsequent default or breach of the same or a different kind.

 

16.        Successors.
This Agreement shall be binding on and shall inure to the benefit of each party's respective successors, assigns, directors, officers,
trustees, shareholders, members, managers and employees.

 

17.        Controlling
Law; Jurisdiction and Venue. The rights and obligations of the parties under this Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of California, without regard to its conflicts of laws rules. The parties
hereby submit and consent to the exclusive jurisdiction of any state or federal court located within Los Angeles County in the
State of California and irrevocably agree that all actions or proceedings relating to this Agreement shall be litigated in such
courts and each of the parties waives any objection which it may have to the conduct of any such action or proceeding in such
court.

 

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CONFIDENTIAL

 

18.        Counterparts. Either
the original or copies, including facsimile transmissions, of this Agreement, may be executed in counterparts, each of which shall
be an original as against any party whose signature appears on such counterpart and all of which together shall constitute one
and the same instrument.

 

IN WITNESS WHEREOF, the parties, by the duly
authorized representatives, have executed this Agreement as of the date first set forth above.

 

	 	WEBXU, INC.
	 	 
	 	By:	/s/
    Matt Hill
	 	Name: Matt Hill
	 	Its: CEO
	 	Date: January 3, 2012
	 	 
	 	BONUS INTERACTIVE, INC.
	 	 
	 	By:	/s/
    Matt Hill 
	 	Name: Matt Hill
	 	Its: CEO
	 	Date: January 3, 2012
	 	 
	 	KIRKCALDY GROUP, LLC
	 	 
	 	By:	/s/
    Somephone Soukhaseum
	 	Name: Somephone Soukhaseum
	 	Its: Manager
	 	Date: January 3, 2012

 

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CONFIDENTIAL

 

EXHIBIT A

 

AMENDMENT TO LOCK-UP/LEAK-OUT AGREEMENT

 

THIS AMENDMENT TO THE
LOCK-UP/LEAK-OUT AGREEMENT dated as of April 16, 2011(the “Agreement”) is made and entered into as of the ___
day of January 2012, by and among Webxu, Inc., a Delaware corporation (the “Company”), and the undersigned owner
of the shares of the Company’s common stock, $.001 par value per share (the “Common Stock”), set forth
opposite the undersigned’s name on the signature page of this Agreement.

 

RECITALS:

 

WHEREAS, the Company and the undersigned, are
parties to that certain Settlement Agreement dated on or about January 3rd, 2012 (the “Settlement Agreement”), a copy
of which is annexed hereto and incorporated herein by this reference, pursuant to which (concurrently with the execution of this
Agreement) the undersigned received the shares of Common Stock from the Company; and

 

WHEREAS, as contemplated and required by the
Settlement Agreement, the undersigned desires to enter into this Agreement and restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of all shares of Common Stock contemplated as being issued under the Settlement Agreement, all on the
terms set forth below.

 

NOW, THEREFORE, in consideration of the foregoing
premises and the mutual covenants, contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree to amend the Agreement as follows:

 

1.        The
terms and restrictions of Agreement shall cover and be applicable to the following groups of shares: 1.3 million shares of Common
Stock issued by the Company on or about April 16, 2011, 50,000 shares of Common Stock issued by the Company on or about May 2,
2011 and 400,000 shares of Common Stock issued by the Company on or about January 3rd, 2012. For all purposes of the Agreement,
the anniversary dates for each group of shares shall run from the date such shares were issued.

 

2.        Paragraph
4 is deleted in its entirety and the following new paragraph 4 is substituted therefor:

 

“4.        The
final lock-up date for any group of shares issued to the Stockholder shall be two (2) years from the date such shares were issued.
For example, the final lock-up date for shares issued on April 16, 2011 shall be April 15, 2013, whereas the final lock-up date
for shares issued pursuant to the Settlement Agreement shall be January 3rd, 2014.”

 

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CONFIDENTIAL

 

        Unless
otherwise defined in this Amendment, the capitalized terms used in this Amendment shall have the meanings assigned to such terms
in the Agreement, as the case may be. This Amendment shall prevail and control with respect to any inconsistency between the interpretation
and provisions of this Amendment and the interpretation of the Agreement. No modification, amendment or waiver of any provisions
of this Amendment shall be binding unless in writing and signed by an authorized representative of each party. This Amendment and
the Agreement are the entire understanding with respect to the subject matter thereof and supersede any prior or contemporaneous
agreements, proposals, warranties or representations. Except as expressly amended, supplemented or modified in this Amendment,
all other provisions of the Agreement are hereby ratified and confirmed.

 

IN WITNESS WHEREOF, the undersigned have
duly executed and delivered this Agreement as of the day and year first above written.

 

	THE COMPANY	Webxu, Inc.
	 	 
	 	By	 
	 	Name: 	 
	 	Its: Chief Financial Officer
	 	 
	THE STOCKHOLDER:	Kirkcaldy Group, LLC
	 	 
	 	By:	 
	 	Name: Somphone Soukhaseum
	 	Address: 1017 El Camino Real #218
	 	Redwood City, CA 94063

 

    	-8-HII-EX10.18

Exhibit 31.1
Severance Plan for
Elected and Appointed Officers of
Huntington Ingalls Industries

Amended and Restated (effective March 31, 2012)

1.Purpose of Plan.  The purpose of the Plan is to provide severance benefits for eligible elected and appointed officers of Huntington Ingalls Industries, Inc. (the "Company") who reside and work in the United States.  The Plan was originally effective as of the "Distribution Date" defined in the Separation and Distribution Agreement among Northrop Grumman Corporation, the Company and New P, Inc. (the "Distribution Date") and conditioned upon such Distribution Date occurring.  The amended and restated plan document is intended only to clarify certain aspects of plan administration and does not change eligibility or the benefits available under the Plan. 
 
In all cases, no individual will be entitled to benefits under both this Plan and the Severance Plan for Elected and Appointed Officers of Northrop Grumman Corporation (the "NGC Plan") at the same time or with respect to the same service.  
For an individual (1) whose employment with NGC and its affiliates was terminated prior to the Distribution, (2) who qualifies as an HII Retiree, and (3) who was eligible to receive a benefit under the NGC Plan based on such termination, but who had not received all potential severance benefits under the NGC Plan prior to the Distribution, any obligation to provide severance benefits to such individual, to the extent not paid prior to the Distribution, transferred to the Company and the Plan as of the Distribution.  Thereafter, the Plan will provide any severance benefits due such person, and no further severance benefits will be due under the NGC Plan.  (The terms "Distribution" and "HII Retiree" used in this paragraph have the meanings specified in the Employee Matters Agreement among Northrop Grumman Corporation, New P, Inc. and the Company.)
2.    Definitions.  The terms defined in this section shall have the meaning given below:
		
	(a)
	“Administrative Committee” means the Huntington Ingalls Industries, Inc. Administrative  Committee established by the Board of Directors of the Company or any successor to the Administrative Committee.

		
	(b)
	“Committee” means the Compensation Committee of the Board of Directors of the Company or any successor to the Committee.

		
	(c)
	“Code” means the Internal Revenue Code of 1986, as amended.

		
	(d)
	“Company” means Huntington Ingalls Industries, Inc.

		
	(e)
	“Disability” means any disability of an Officer recognized as a disability for purposes of the Company’s long-term disability plan, or similar plan later adopted by the Company in place of such plan.

		
	(f)
	“Key Employee” means an employee treated as a “specified employee” as of his Separation from Service under Code section 409A(a)(2)(B)(i) of the Company or its affiliate (i.e., a key employee (as defined in Code section 416(i) without regard to paragraph (5) thereof)) if the 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 Officers 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.  Notwithstanding the foregoing, Key Employees of the Company will 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.

		
	(g)
	“Officer” means an elected or appointed officer of Huntington Ingalls Industries, Inc. who resides and works in the United States.

		
	(h)
	“Plan” means this Severance Plan for Elected and Appointed Officers of Huntington Ingalls Industries, as it may be amended from time to time.

		
	(i)
	“Qualifying Termination” means any one of the following (i) an Officer’s involuntary termination of employment with the Company, other than Termination for Cause or mandatory retirement, or (ii) an Officer’s election to terminate employment with the Company in lieu of accepting a downgrade to a non-Officer position or status.  “Qualifying Termination” does not include any change in the Officer’s employment status due to any transfer within the Company or to an affiliate, or to a purchaser of assets or a portion of the business of the Company or an affiliate in connection with the purchase, Disability, voluntary termination or normal retirement.

		
	(j)
	“Release” means the Company’s Confidential Separation Agreement and General Release as in effect at the time of the Officer’s termination of employment.

		
	(k)
	“Separation from Service” or “Separate from Service” means a “separation from service” within the meaning of Code section 409A, applying the default terms thereof.

		
	(l)
	“Termination for Cause” means an Officer’s termination of employment with the Company because of:

		
	(i)
	The failure by the Officer to perform his duties in a satisfactory manner (other than a failure caused by the Officer’s medically documented incapacity due to physical or mental illness) after written demand for improved performance has been delivered to the Officer by the Company that specifically identifies how the Officer has not performed his duties in a satisfactory manner;

		
	(ii)
	The engaging by Officer in misconduct that is injurious to the Company, monetarily or otherwise, or that reflects adversely on the Officer’s fitness for continued employment with the Company; or

		
	(iii)
	The Officer’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony, regardless of whether the actual conviction is for a felony or misdemeanor, or the Officer’s pretrial incarceration pending the disposition of such a charge.

3.    Eligibility Requirements.
		
	(a)
	An Officer will be notified of potential eligibility for benefits under the Plan through a written notice from a Vice President of Human Resources or their designee.   No other Company employee is authorized to provide such notice.

		
	(b)
	To receive benefits under the Plan, an Officer must meet the following conditions:

		
	(i)
	The Officer must experience a Qualifying Termination that results in termination of employment.  If, before termination of employment occurs due to the Qualifying Termination event, the Officer voluntarily quits, retires, or experiences a Termination for Cause, the Officer will not receive benefits under this Plan.

		
	(ii)
	The Officer must sign a Confidential Separation Agreement and General Release provided by the Company.  

4.    Severance Benefits.  Upon the Qualifying Termination of any eligible Officer, the terminated Officer shall be entitled to the following benefits under the Plan:  (a) a lump-sum severance cash payment, (b) an extension of the Officer’s existing medical and dental coverage, (c) a prorated annual cash bonus payment, and (d) certain other fringe benefits.
		
	(a)
	Lump-sum Cash Severance Payment.  The designated Appendix describes the lump sum severance benefit available to the Officer.

		
	(b)
	Extension of Medical and Dental Benefits.  The Company will continue to pay its portion of the Officer’s medical and dental benefits for the period of time following the Officer’s termination date that is specified in the designated Appendix.  Such continuation coverage shall run concurrently with COBRA continuation coverage (or similar state law).  The Officer must continue to pay his portion of the cost of this coverage with after-tax dollars.  If rates for active employees increase during this continuation period, the contribution amount will increase proportionately.  Also, if medical and dental benefits are modified, terminated or changed in any way for active employees during this continuation period, the Officer will also be subject to such modification, termination or change.  Following the continuation period specified in the designated Appendix, the Officer will be eligible to receive COBRA benefits for any remaining portion of the applicable COBRA period (typically 18 months) at normal COBRA rates.  The unreimbursed COBRA period (e.g., the period when the Officer must pay full COBRA rates in order to receive COBRA benefits) starts the first day of the month following the end of the continuation period specified in the designated Appendix.

Example:  An Officer receives a layoff notice on June 15, 2011, and his last day of work is June 30, 2011.  The Officer’s 18-month COBRA period commences July 1, 2011.  The Officer will continue to receive medical and dental coverage from July 1, 2011 through June 30, 2012, as long as the Officer continues to pay the appropriate contribution.  Full COBRA rates will apply to the Officer from July 1, 2012 until the end of the remaining COBRA period on December 31, 2012.
If the Officer is not covered by medical and dental benefits at the time of his termination, this section 4(b) will not apply and no continuation coverage will be offered.  No health or welfare benefits other than medical and dental will be continued pursuant to the Plan, including but not limited to disability benefits.
The medical and dental benefits to be provided or payments to be made under this section 4(b) shall be reduced to the extent that the Officer is eligible for benefits or payments for the same occurrence under another employer sponsored plan to which the Officer is entitled because of his employment subsequent to the Qualifying Termination.
To the extent the benefits under this section 4(b) are, or ever become, subject to Code section 409A, the Company shall administer such continuation of coverage consistent with the following additional requirements as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv):
		
	(i)
	The Officer’s eligibility for benefits in one year will not affect the Officer’s eligibility for benefits in any other year;

		
	(ii)
	Any reimbursement of eligible expenses will be made on or before the last day of the year following the year in which the expense was incurred; and

		
	(iii)
	The Officer’s right to benefits is not subject to liquidation or exchange for another benefit.

In the event the preceding sentence applies and the Officer is a Key Employee at Separation from Service, provision of these benefits after the COBRA period shall commence on the first day of the seventh month following the Officer’s Separation from Service (or, if earlier, the first day of the month after the Officer’s death).  Each payment of the benefits described in this Section 4(b) shall be considered a separate “payment” for purposes of Code section 409A.
		
	(c)
	Company Performance-Related Payment.  The Officer will be eligible for a severance payment equal to a pro-rata portion of the bonus he or she would have received under the Company annual incentive plan in which he or she was a participant for the year in which the Qualifying Termination occurred, in addition to the lump-sum cash severance payment described in section 4(a).  For this purpose, the pro-rated bonus (if any) will be based on the applicable annual incentive plan payout formula, with any applicable individual performance factor set at 1.00, prorated from the beginning of the performance period (January 1st) to the Officer’s date of termination.  The severance payment contemplated by this Section 4(c) will be paid when the annual bonuses are paid to active employees between February 15 and March 15 of the year following termination.  Notwithstanding anything to the contrary in this section 4(c), if the Officer’s bonus opportunity for the fiscal year in which his or her termination occurs is covered by the Company’s Incentive Compensation Plan (or similar successor bonus program designed to comply with the performance-based compensation exception under Code section 162(m)), then the Officer’s severance payment pursuant to this section 4(c) shall not exceed the maximum bonus the Officer would have been entitled to receive under the Company’s Incentive Compensation Plan for that fiscal year, assuming the Officer had been employed through the date bonuses are paid under such plan for that year, and otherwise calculated under the terms of such plan based on actual performance for that fiscal year (but without giving effect to any discretion of the plan administrator to reduce the bonus amount from the maximum otherwise determined in accordance with such plan).

		
	(d)
	Other Benefits.  All reimbursements will be within the limits established in the Executive Perquisite Program.  These perquisites will cease as of the date of termination except for the following:

		
	(i)
	Financial Planning.  If an Officer is eligible for financial planning reimbursement at the time of termination, the Officer will be reimbursed for any financial planning fees as specified in the designated Appendix.  For these purposes, “financial planning reimbursement” includes any income tax preparation fee reimbursement the Officer may be entitled to under the financial planning reimbursement terms and conditions applicable to the Officer at the time of termination.  The financial planning (including income tax preparation fee) reimbursements contemplated by the Appendices are subject to any other applicable limitations that may apply under the financial planning reimbursement terms and conditions applicable to the Officer at the time of termination (for example, and without limitation, annual caps on amounts that may be used in connection with income tax preparation).  To the extent any such reimbursements are, or ever become, subject to Code section 409A, any such reimbursements pursuant to this section 4(d)(i) shall be administered consistent with the following additional requirements as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv):  (1) Officer’s eligibility for benefits in one year will not affect Officer’s eligibility for benefits in any other year; (2) any reimbursement of eligible expenses will be made on or before the last day of the year following the year in which the expense was incurred; and (3) Officer’s right to benefits is not subject to liquidation or exchange for another benefit.  In addition, no reimbursements shall be made to an Officer who is a Key Employee for six months following the Officer’s Separation from Service.

		
	(ii)
	Outplacement Service.  The Officer will be reimbursed for the cost of reasonable outplacement services provided by the Company’s outplacement service provider for services provided within one year after the Officer’s date of termination; provided, however, that the total reimbursement shall be limited to an amount equal to fifteen percent (15%) of the Officer’s base salary as of the date of termination.  All services will be subject to the current contract with the provider, and all such expenses shall be reimbursed as soon as practicable, but in no event later than the end of the year following the year the Officer Separates from Service.

		
	(e)
	Time and Form of Payment.  The severance benefits under section 4(a) will be paid to the eligible Officer in a lump sum as soon as practicable following the Officer’s Separation from Service, but in no event beyond thirty (30) days from such date, provided the Officer signs the Release within twenty-one (21) days following the Officer’s Separation from Service, provided further, that if the Officer’s Separation from Service date occurs within twenty one (21) days before the end of a calendar year, then, to the extent the lump-sum payment is or becomes subject to Code section 409A, the lump-sum payment shall not be paid before the later of (i) the date on which the Officer signs the Release and any revocation period with respect to the Release has elapsed; and (ii) January 1 of the calendar year immediately following the calendar year in which the Officer’s Separation from Service occurred.  Notwithstanding the foregoing, if the Officer is a Key Employee at the time of Separation from Service, and to the extent the lump-sum payment is or becomes subject to Code section 409A, the lump sum payment shall be made on or within thirty (30) days after the first day of the seventh month following the Officer’s Separation from Service (or, if earlier, the first day of the month after the Officer’s death), provided the Officer signs the Release within twenty-one (21) days following the Officer’s Separation from Service.  This amount will be paid after all regular taxes and withholdings have been deducted.  No payment made pursuant to the Plan is eligible compensation under any of the Company’s benefit plans, including without limitation, pension, savings, or deferred compensation plans. 

5.    Limitation of Plan Benefits.  Notwithstanding anything contained in this Plan to the contrary, if upon or following a change in the “ownership or effective control” of the Company or in the “ownership of a substantial portion of the assets” of the Company (each within the meaning of Code section 280G ), the tax imposed by Code section 4999 or any similar or successor tax (the “Excise Tax”) applies, solely because of such transaction, to any payments, benefits and/or amounts received by the Officer pursuant to the Plan or otherwise, including, without limitation, any amounts received, or deemed received within the meaning of any provision of the Code, by the Officer as a result of (and not by way of limitation) any automatic vesting, lapse of restrictions and/or accelerated target or performance achievement provisions, or otherwise, applicable to outstanding grants or awards to the Officer under any of the Company’s incentive plans, including without limitation, any long-term incentive stock plan (collectively, the “Total Payments”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the Excise Tax; provided that such reduction to the Total Payments shall be made only if the total after-tax benefit to the Officer is greater after giving effect to such reduction than if no such reduction had been made.  If such a reduction is required, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of stock options, then by reducing or eliminating any accelerated vesting of other equity awards, then by reducing or eliminating any other remaining Total Payments, in each case in reverse order beginning with the payments which are to be paid the farthest in time from the date of the transaction triggering the Excise Tax.  The preceding provisions of this section 5 shall take precedence over the provisions of any other plan, arrangement or agreement governing the Officer’s rights and entitlements to any benefits or compensation.
6.    Offset for Other Benefits Received.  The benefits under the Plan are in lieu of, and not in addition 

to, any other severance or separation benefits for which the Officer is eligible under any Company plan, policy or arrangements (including but not limited to, severance benefits provided under any employment agreement, retention incentive agreement, or similar benefits under any individual change in control agreements, plans, policies, arrangements and change in control agreements of acquired companies or business units) (collectively, “severance plans”); provided that if the Officer is otherwise entitled to receive benefits under the Plan and severance benefits under the Huntington Ingalls Industries, Inc. Change-In-Control Severance Plan and/or a Huntington Ingalls Industries, Inc. Special Agreement, benefits shall be paid under such Change-In-Control Severance Plan and/or Special Agreement rather than under the Plan.  If an Officer receives any benefit under any severance plan, such benefit shall cause a corresponding reduction in benefits under this Plan.  If, despite any release that the Officer signs in connection with the Plan, such Officer is later awarded and receives benefits under any other severance plan(s), any benefits that the Officer receives under the Plan will be treated as having been received under those other severance plans for purposes of calculating total benefits received under those other severance plans (that is, benefits under those other severance plans will be reduced by amounts received under the Plan).
7.    Administration.  The Company is the Plan Sponsor and the principal employer that maintains the Plan.  The Plan is administered by the Administrative Committee, which has overall responsibility for general plan administration.   The Administrative Committee has full and complete discretion to interpret Plan provisions, to determine eligibility for benefits, to decide benefit claims (including the resolution of factual disputes relating to such claims), and its interpretations, determinations and decisions will not be overturned unless they are arbitrary and capricious or otherwise an abuse of discretion. The Administrative Committee is vested with all power and authority necessary or appropriate to administer the Plan on behalf of the Plan Sponsor, and has full discretionary authority in this capacity. The address and telephone number of the Administrative Committee is:

Huntington Ingalls Industries, Inc.
Attn: Administrative Committee 
4101 Washington Avenue
Newport News, Virginia 23607
(757) 380-2000

The Administrative Committee may delegate any of its administrative or fiduciary authority, including the authority to hear claims and appeals, to other Company officers or employees.
8.    Claims and Appeals Procedures.
Claims Procedure.  If an Officer believes that he or she is entitled to benefits under the Plan and has not received them, the Officer or his authorized representative (each, a “claimant”) may file a claim for benefits by writing to the Administrative Committee.  The letter must state the reason why the claimant believes the Officer is entitled to benefits, and the letter must be received no later than 90 days after the Officer’s termination of employment, or 90 days after a payment was due, whichever comes first.  The Administrative Committee or its designee will evaluate the claim and make a determination to accept or deny the claim.
If the claim is denied, in whole or in part, the claimant will receive a written response within 90 days.  This response will include (i) the reason(s) for the denial, (ii) reference(s) to the specific Plan provisions on which denial is based, (iii) a description of any additional information necessary to perfect the claim, and (iv) a description of the Plan’s claims and appeals procedures.  In some cases more than 90 days may be needed to make a decision, in which case the claimant will be notified prior to the expiration of the 90 days that more time is needed to review the claim and the date by which the Plan expects to render 

the decision.  In no event will the extension be for more than an additional 90 days.
Appeal of Denied Claim.  The claimant may appeal a denied claim by filing an appeal with the Administrative Committee within 60 days after the claim is denied.  The appeal should be sent to the address provided in Section 6 above.  As part of the appeal process the claimant will be given the opportunity to submit written comments and information and be provided, upon request and free or charge, with copies of documents and other information relevant to the claim.  The review on appeal will take into account all information submitted on appeal, whether or not it was provided for in the initial benefit determination.  A decision will be made on the appeal within 60 days, unless additional time is needed.  If more time is needed, the claimant will be notified prior to the expiration of the 60 days that up to an additional 60 days is needed and the date by which the Plan expects to render the decision.  If the claim is denied, in whole or in part, on appeal the claimant will receive a written response which will include (i) the reason(s) for the denial, (ii) references to the specific Plan provisions on which the denial is based, (iii) a statement that the claimant is entitled to receive, upon request and free of charge, copies of all documents and other information relevant to the claim on appeal, and (iv) a description of the Plan’s claims and appeals procedures.
If the claim is denied on appeal, the Officer has the right to bring an action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended.  Any claimant must pursue all claims and appeals procedures described in the Plan document before seeking any other legal recourse with respect to Plan benefits.  In addition, any lawsuit must be filed within six months from the date of the denied appeal, or two years from the Officer’s termination date, whichever occurs first.
9.    Amendment.  The Company (acting through the Compensation Committee) reserves the right at any time to terminate or amend this Plan in any respect and without the consent of any Officer.
10.    Unfunded Obligations.  All benefits due an Officer or the Officer’s beneficiary under this Plan are unfunded and unsecured and are payable out of the general funds of the Company.  The Company, in its sole and absolute discretion, may establish a trust associated with the payment of Plan benefits, provided that the trust does not alter the characterization of the Plan as an “unfunded plan” for purposes of the Employee Retirement Income Security Act, as amended.  Any such trust shall make distributions in accordance with the terms of the Plan.
11.    Transferability of Benefits.  The right to receive payment of any benefits under this Plan shall not be transferred, assigned or pledged except by beneficiary designation or by will or under the laws of descent and distribution.
12.    Taxes.  The Company may withhold from any payment due under this Plan any taxes required to be withheld under applicable federal, state or local tax laws or regulations.
13.    Gender.  The use of masculine pronouns in this Plan shall be deemed to include both males and females.
14.    Construction, Governing Laws.  The Plan is intended as (i) a pension plan within the meaning of Section 3(2) of the Employee Retirement Income Security Act, as amended (“ERISA”), and (ii) an unfunded pension plan maintained by the Company for a select group of management or highly compensated employees within the meaning of Department of Labor Regulation 2520.104-23 promulgated under ERISA, and Sections 201, 301, and 401 of ERISA.  Nothing in this Plan creates a vested right to benefits in any employee or any right to be retained in the employ of the Company.  Except to the extent that federal legislation or applicable regulation shall govern, the validity and construction of the Plan and each of its provisions shall be subject to and governed by the laws of the State of Delaware.  

The severance benefits payable under the Plan are intended to comply with, or alternatively to qualify for an exemption from, the applicable requirements of Code section 409A, and the Plan shall be interpreted in accordance with such intent; provided however, that nothing in the Plan shall create any liability of the Company to any Participant or beneficiary thereof for or with respect to any tax, penalty or interest that may be assessed against such Participant or beneficiary under Code section 409A (or otherwise).
15.    Severability.  If any provision of the Plan is found, held or deemed to be void, unlawful or unenforceable under any applicable statute or other controlling law, the remainder of the Plan shall continue in full force and effect.

HUNTINGTON INGALLS INDUSTRIES, INC.

By:  ______________________________________        
            William R. Ermatinger
            Vice President and Chief Human Resources 
Officer

Date:  ____________________________________

Appendix A
The following benefits shall apply to the Chief Executive Officer (“CEO”) of the Company and elected officers who report directly to the CEO:
Section 4(a).  Lump-sum Cash Severance Payment.  The lump sum cash severance payment shall equal one and one half (1.5) times the sum of (A) one year’s base salary as in effect on the effective date of the Officer’s termination, plus (B) the Officer’s target annual bonus established under the Company’s annual incentive plan in which he or she was a participant for the fiscal year in which the date of termination occurs.  No supplemental bonuses or other bonuses will be combined with the Officer’s annual bonus for purposes of this computation.
Section 4(b).  Extension of Medical and Dental Benefits.  The Company will continue to pay its portion of the Officer’s medical and dental benefits for eighteen months following the Officer’s termination date.
Section 4(d)(i).  Financial Planning.  If the Officer is eligible for financial planning reimbursement at the time of termination, the Officer will be reimbursed for any financial planning fees incurred before his termination date.  In addition, the Officer will be reimbursed for the following financial planning fees incurred after his termination date: (i) any fees incurred in the year in which the date of termination occurs, provided that the total financial planning reimbursement for such year (including fees incurred before and after the date of termination) shall not exceed $15,000 and (ii) any fees incurred in the year following the year in which the date of termination occurs, provided that the total financial planning reimbursement for such year shall not exceed $15,000.

Appendix B
The following benefits shall apply to elected officers who do not report directly to the CEO and to appointed officers:
Section 4(a).  Lump-sum Cash Severance Payment.  The lump sum cash severance payment shall equal the sum of (A) one year’s base salary as in effect on the effective date of the Officer’s termination, plus (B) the Officer’s target annual bonus established under the Company’s annual incentive plan in which he or she was a participant for the fiscal year in which the date of termination occurs.  No supplemental bonuses or other bonuses will be combined with the Officer’s annual bonus for purposes of this computation.
Section 4(b).  Extension of Medical and Dental Benefits.  The Company will continue to pay its portion of the Officer’s medical and dental benefits for one year following the Officer’s termination date.
Section 4(d)(i).  Financial Planning.  If the Officer is eligible for financial planning reimbursement at the time of termination, the Officer will be reimbursed for any financial planning fees incurred before his termination date.  In addition, the Officer will be reimbursed for the following financial planning fees incurred after his termination date: (i) any fees incurred in the year in which the date of termination occurs, provided that the total financial planning reimbursement for such year (including fees incurred before and after the date of termination) shall not exceed $5,000 and (ii) any fees incurred in the year following the year in which the date of termination occurs, provided that the total financial planning reimbursement for such year shall not exceed $5,000.

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