Document:

exv10w22

EXHIBIT 10.22

HII NEWPORT NEWS SHIPBUILDING INC.

RETIREMENT BENEFIT RESTORATION PLAN

Article I

ESTABLISHMENT & PURPOSE

	1.1	 	Establishment. 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 Company has adopted this retirement benefit restoration plan known as the HII
Newport News Shipbuilding Inc. Retirement Benefit Restoration Plan (the “Plan”) for the
benefit of a select group of highly compensated employees and their Surviving Spouses. The
Plan is established to receive liabilities transferred from the Newport News Shipbuilding Inc.
Retirement Benefit Restoration Plan, including Grandfathered Amounts. See Appendix D for
special rules related to the spin-off of the Company from Northrop Grumman Corporation.
	 
	1.2	 	Purpose. The purpose of the Plan is to provide retirement income and supplemental death
benefits for eligible Participants to supplement the benefits provided under the HII Newport
News Shipbuilding Inc. Retirement Plan and to enable the Company and any adopting Employers to
attract and retain certain key executives. 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.

Article II

DEFINITIONS

As used herein, the following words and phrases have the meanings ascribed to them in Article II
unless a different meaning is plainly required by the context. Some of the words and phrases used
in the Plan are not defined in this Article II, but, for convenience, are defined as they are
introduced into the text. Words in the masculine gender shall be deemed to include the feminine
gender and words in the feminine gender shall be deemed to include the masculine gender. Any
headings used herein are included for ease of reference only, and are not to be construed so as to
alter any of the terms of the Plan.

	2.1	 	“Accrued Benefit” as of a specified date with respect to a Participant means a monthly
benefit equal to (a) minus (b) minus (c) below (but NOT less than zero) where

	 	(a)	 	means the amounts described in (1) and (2) below.

	 	(1)	 	Cash Balance Piece. Effective for periods after December 31,
2003, a Participant is credited with Benefit Credits (as defined under the
Qualified Plan) he or she would have received:

 

 

	 	(A)	 	but for the restrictions of Code sections
401(a)(17) or 415, as those limits are described by the Qualified Plan;
and
	 
	 	(B)	 	but for the fact he or she made deferrals to
the Huntington Ingalls Industries Deferred Compensation Plan or the
Huntington Ingalls Industries Savings Excess Plan.

For purposes of (B), the Benefit Credits earned are credited in accordance
with the terms of the Qualified Plan applicable to Eligible Pay in excess of
the Social Security Wage Base and any compensation deferred is only treated
as compensation with respect to the calendar year in which it was earned by
the Participant, without regard to the calendar year in which it was paid to
the Participant.

	 	(2)	 	Historical and Transition Piece. Effective for periods prior to
December 31, 2003, a Participant is credited with the retirement benefit, if
any, that would have been payable under the terms of the Qualified Plan
modified as follows:

	 	(A)	 	Years of Participation under the Qualified Plan
shall be treated as also including “years of participation” used to
calculate the Participant’s benefit under the Tenneco, Inc. Retirement
Plan.
	 
	 	(B)	 	Compensation under the Qualified Plan shall be
treated as also including amounts deferred under the Newport News
Shipbuilding Inc. Deferred Compensation Plan, Northrop Grumman Deferred
Compensation Plan, or Northrop Grumman Savings Excess Plan.
	 
	 	(C)	 	Solely for employees in positions designated as
ECP Level 5 or above, the following shall be substituted for the
definition of Covered Compensation and Final Average Compensation under
the Qualified Plan.

	 	(i)	 	Compensation for such purposes
shall mean the sum of (a) the average of the Participant’s
regular base compensation for the five most recent years,
expressed as an annual amount, and (b) the average of the
Participant’s actual short-term incentive compensation earned
for the five most recent full calendar years, expressed as an
annual award amount.
	 
	 	(ii)	 	Short-term incentive compensation
shall be included as Covered Compensation with respect to the
calendar year in which it was earned by the Participant, without
regard to the calendar year in which it was paid to the
Participant.

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	 	(iii)	 	Short-term incentive
compensation shall mean only annual bonuses based on company
and/or individual employee performance criteria and paid to the
Participant in cash or deferred under a deferred compensation
plan, and shall not include signing bonuses, relocation
allowances, long-term incentive awards, stock options,
performance share grants, expense allowances or reimbursements,
or any other compensation.
	 
	 	(iv)	 	In the event a Participant has
been employed by an Employer for less than five years during the
most recent five years, the average of his regular base
compensation and short-term incentive compensation for the years
the Participant was employed by an Employer during the five most
recent years will be used for purposes of calculating
Compensation under this Section.
	 
	 	(v)	 	Notwithstanding the foregoing,
and except in the event of a Change in Control within the
meaning of the Company’s Change in Control Severance Benefit
Plan for Key Executives (as amended and restated), a
Participant’s short-term incentive compensation earned for any
calendar year prior to 1998 shall be deemed to be $0 (zero)
solely for purposes of calculating his or her Final Average
Compensation.
	 
	 	(vi)	 	In the event of a Change in
Control, the Participant’s short-term incentive compensation
earned for any calendar year prior to 1998 shall be the actual
bonus amount paid to the Participant in cash or deferred under a
deferred compensation plan.

	 	(D)	 	The vested benefit payable under the Qualified
Plan shall be calculated without applying Sections 415 and 401(a)(17)
of the Code, as adjusted by the Secretary of the Treasury for any plan
year, or the successor of such Sections.

The benefit described in this subsection (a) shall be expressed as a Life Annuity
commencing at the Participant’s Normal Retirement Date.

	 	(b)	 	means the sum of: (i) the monthly vested benefit payable to the Participant
under the Qualified Plan (including any annuity purchased for him under the provisions
of the Qualified Plan); plus (ii) the monthly vested benefit that would be payable to
the Participant under the Tenneco Inc. Retirement Plan if the Participant commenced
receiving his benefit on the Participant’s Normal Retirement Date.

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The benefit described in subsection (b)(i) shall be expressed as a Life Annuity
commencing on the Participant’s Normal Retirement Date. The benefit described in
subsection (b)(ii) shall be the benefit that would actually be payable under the
Tenneco Inc. Retirement Plan if the Participant commenced such benefits on his
Normal Retirement Date in the form of a Life Annuity using the appropriate interest
rates and mortality tables specified in the plan.

	 	(c)	 	means the monthly vested Tenneco Restoration Benefit. The “Tenneco
Restoration Benefit” shall mean the monthly benefit payable under the Tenneco Inc.
Supplemental Executive Retirement Plan determined as of December 31, 1996, but not
more than (i) the monthly vested benefit payable to the Participant under the
Tenneco Inc. Retirement Plan calculated without applying Sections 415(b)(1)(A),
415(e), and 401(a)(17) of the Code less (ii) the monthly vested benefit payable to
the Participant under the Tenneco Inc. Retirement Plan. The amounts under subsection
(c)(i) and (c)(ii) shall likewise be determined as of December 31, 1996.

The benefit described in subsection (c)(i) shall be expressed as an actuarially
equivalent Life Annuity commencing on the Participant’s Normal Retirement Date. The
benefit described in subsection (c)(ii) shall be the benefit that would actually be
payable under the Tenneco Inc. Retirement Plan if the Participant commenced such
benefits on his Normal Retirement Date in the form of an actuarially equivalent Life
Annuity. In both instances, actuarial equivalence shall be determined using the
appropriate interest rates and mortality tables specified in the appropriate plan.

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 Company’s Compensation
Committee that is (i) calculated pursuant to the method for determining a bonus amount under
the Annual Incentive Plan (AIP) for a given year, and (ii) 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.

	2.2	 	“Actuarial Equivalent” shall mean a benefit which is of equal value at the date of
determination to the benefit for which it is to be substituted. Actuarial Equivalence shall
be based on the interest and mortality tables used to determine actuarial equivalence under
the Qualified Plan.
	 
	2.3	 	“Affiliated Companies” shall mean the Company and any other entity related to the Company
under the rules of Code section 414.
	 
	2.4	 	“Annuity Starting Date” shall mean the first day of the first period for which an amount is
payable as an annuity, or in the case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred which entitle the Participant to such a benefit
and on which payment is due under the Plan.

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	2.5	 	“Associated Employer” means any corporation which has been designated as an Associated
Employer by the Board of Directors and which has adopted the Plan.
	 
	2.6	 	“Beneficiary” shall mean the person or entity designated by a Participant to receive benefits
under this Plan. This designation shall be made on a beneficiary designation form provided by
the Plan Administrator, signed by such Participant, and filed with the Plan Administrator.
	 
	2.7	 	“Board of Directors” or “Board” shall mean the Board of Directors of the Company.
	 
	2.8	 	“Change in Control” shall mean the first to occur of the following events (but no event other
than the following events), except as otherwise provided below:

	 	(a)	 	Any Person (other than those Persons in control of the Company as of the
Effective Date, or other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company) becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing thirty three and one-third
percent (33-1/3%) or more of the combined voting power of the Company’s then
outstanding securities; provided, however, that such an acquisition shall not
constitute a Change in Control if made by an entity pursuant to a merger, consolidation
or reorganization that is covered by and does not otherwise constitute a Change in
Control under subsection (c) below. For purposes of this Section:

	 	(1)	 	the terms “Person” or “group” shall not include underwriters
acquiring newly-issued voting securities (or securities convertible into voting
securities) directly from the Company with a view towards distribution; and
	 
	 	(2)	 	the terms “Person” and “Beneficial Owner” shall have the
meaning set forth in Sections 3(a) and 13(d) of the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder.

	 	(b)	 	On any day after the Effective Date (the “Measurement Date”) Continuing
Directors cease for any reason to constitute a majority of the Board of Directors of
the Company. A director is a “Continuing Director” if he or she either:

	 	(1)	 	was a member of the Board of Directors of the Company on the
applicable Initial Date (an “Initial Director”); or
	 
	 	(2)	 	was elected to the Board of Directors of the Company, or was
nominated for election by the Company’s stockholders, by a vote of at least
two-thirds (2/3) of the Initial Directors then in office.

A member of the Board of Directors of the Company who was not a director on the
applicable Initial Date shall be deemed to be an Initial Director for purposes of

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clause (2) above if his or her election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least two-thirds (2/3) of the Initial
Directors (including directors elected after the applicable Initial Date who are
deemed to be Initial Directors by application of this provision) then in office.
“Initial Date” means the later of (1) the Effective Date or (2) the date that is two
years before the Measurement Date.

	 	(c)	 	The Company is liquidated; all or substantially all of the Company’s assets are
sold in one or a series of related transactions; or the Company is merged,
consolidated, or reorganized with or involving any other corporation, other than a
merger, consolidation, or reorganization that results in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding immediately after such
merger, consolidation, or reorganization. Notwithstanding the foregoing, an event
described in this paragraph (c) that occurred prior to the Effective Date shall not
constitute a Change in Control.

	2.9	 	“Code” shall mean the Internal Revenue Code of 1986, as amended. Reference to a section of
the Code shall include that section and any comparable section or sections of any future
legislation that amends, supplements, or supersedes such section.
	 
	2.10	 	“Committee” shall mean the Committees as described in Article VI.
	 
	2.11	 	“Company” shall mean Huntington Ingalls Industries, Inc.
	 
	2.12	 	“Death Benefit” means the Benefit described in Section 4.4 payable at the Participant’s
death.
	 
	2.13	 	“Early Retirement Date” shall mean the date as of which the Participant commences an Early
Retirement Benefit pursuant to Section 3.2 of the Qualified Plan.
	 
	2.14	 	“Effective Date” shall mean the Distribution Date.
	 
	2.15	 	“Employer” shall mean Newport News Shipbuilding Inc., or any successor thereto, and any
Associated Employer.
	 
	2.16	 	“Grandfathered Amount” shall mean Plan benefits that were earned and vested as of December
31, 2004 within the meaning of Code section 409A and official guidance thereunder.
	 
	2.17	 	“Hour of Service” shall have the same meaning as set forth in Article I of the Qualified
Plan.
	 
	2.18	 	“Key Employee” shall mean 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

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	 	 	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.

	2.19	 	“Life Annuity” shall mean a series of monthly installments which will continue for the
lifetime of the Participant and will cease upon his death.
	 
	2.20	 	“Normal Retirement Date” shall have the same meaning as set forth in Article I of the
Qualified Plan.
	 
	2.21	 	“Participant” shall mean any employee of an Employer who becomes eligible to participate in
the Plan pursuant to Article III and who continues to be entitled to any benefits under the
Plan.
	 
	2.22	 	“Payment Date” shall mean 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.
	 
	2.23	 	“Pension Plan” and “Pension Plans” shall mean any of the following:

	 	(a)	 	The Northrop Grumman Retirement Plan
	 
	 	(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.

	2.24	 	“Plan” shall mean the HII Newport News Shipbuilding Inc. Retirement Benefit Restoration Plan.

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	2.25	 	“Plan Year” shall mean the calendar year.

	2.26	 	“Qualified Plan” shall mean the HII Newport News Shipbuilding Inc. Retirement Plan. In the
event the Qualified Plan is subsequently amended, reference to a Section of the Qualified Plan
shall be deemed to refer to the operational successor of such Section. In addition,
capitalized terms used in this Plan that are not defined in the Plan are taken from the
Qualified Plan and are intended to have the same meaning as in the Qualified Plan, including
any successor thereto.
	 
	2.27	 	“Rabbi Trust” means a trust described in Code Section 671, which shall be established in
connection with this Plan.
	 
	2.28	 	“Retirement” shall mean termination of employment with all Employers at a time when the
Participant is eligible for an Early or Normal Retirement Benefit.
	 
	2.29	 	“Retirement Benefit” means the Benefit described in Section 4.1 payable at the Participant’s
Retirement Date.
	 
	2.30	 	“Retirement Date” shall mean the Participant’s Early or Normal Retirement Date.
	 
	2.31	 	“Separation from Service” or “Separates from Service” shall mean a “separation from service”
within the meaning of Code section 409A.
	 
	2.32	 	“Spouse” shall mean the person legally married to the Participant at his Annuity Starting
Date.
	 
	2.33	 	“Surviving Spouse” shall mean the person legally married to the Participant at his date of
death.
	 
	2.34	 	“Years of Participation” shall have the same meaning as set forth in Article I of the
Qualified Plan.
	 
	2.35	 	“Years of Service” shall have the same meaning as set forth in Article I of the Qualified
Plan.

Article III

PLAN PARTICIPATION

	3.1	 	Eligibility to Participate in the Plan. Each participant in the Qualified Plan who satisfies
both (a) and (b) below is eligible to participate in the Plan.

	 	(a)	 	The employee’s accrued benefit under the Qualified Plan is reduced as a result
of the application of Section 415(b)(1)(A), 415(e), or 401(a)(17) of the Code, or the
employee is in a position designated as ECP Level 5 or above.

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	 	(b)	 	The employee is one of a select group of management or highly compensated
employees as per ERISA sections 201, 301, and 401.

	3.2	 	Participation. A Participant shall remain a Participant so long as he is entitled to current
or contingent benefits under the Plan, but shall cease to be a Participant if he terminates
employment with all Employers prior to the date he becomes eligible for payment of benefits
under Article IV of the Plan. Should a Participant cease to be an employee, but later become
re-employed by an Employer, he shall again become a Participant when he satisfies the
requirements of Section 3.1.
	 
	3.3	 	Select Group of Employees. The Plan is intended to qualify as a plan maintained by the
Employers primarily for the purpose of providing deferred compensation for a select group of
highly compensated employees, and, as such, to be exempt from certain provisions of the
Employee Retirement Income Security Act of 1974, as amended. If the Company determines based
on subsequent authority or if an agency or court of competent jurisdiction determines that the
Plan benefits any person other than a member of the select group of management or highly
compensated employees as per ERISA sections 201, 301, or 401 (and the period for appeal of
such determination has elapsed), the participation of each employee who is determined not to
be included in such group shall be terminated retroactive to the date on which his benefit
under the Qualified Plan was first reduced as a result of the application of Section
415(b)(1)(A), 415(e), or 401(a)(17) of the Code. Such employee shall forfeit any Accrued
Benefit, regardless of whether such benefit is otherwise vested and shall cease to accrue any
additional benefit under the Plan.

Article IV

BENEFITS

	4.1	 	Retirement Benefits. Except as otherwise provided herein, retirement benefits will be
computed and paid as follows:

	 	(a)	 	Normal Retirement Benefit shall be equal to the Participant’s Accrued Benefit
determined at the Participant’s termination of employment on or after his Normal
Retirement Date and commencing on such termination of employment. If the Participant
remains employed after his Normal Retirement Date, the Accrued Benefit under Section
2.1 shall be calculated by substituting the Participant’s date of termination of
employment for his Normal Retirement Date.
	 
	 	(b)	 	Early Retirement Benefit shall be equal to the Participant’s Accrued Benefit,
reduced for early commencement using the actuarial reduction factors set forth below,
determined at the Participant’s Early Retirement Date and commencing on such date:

	 	(1)	 	at age 60 (or thereafter up to age 62), a .25% reduction for each
month early retirement precedes age 62; and

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	 	(2)	 	at age 55 (or thereafter up to age 60), a .5% additional reduction for each month early
retirement precedes age 60.

	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.

	4.2	 	Termination of Service. A Participant shall be entitled to a monthly retirement benefit if
he terminates before he is eligible to receive a Retirement Benefit, provided that a
Participant meets the vesting requirements of Article V. The Participant’s benefit on his
termination of employment shall be the Participant’s Accrued Benefit at the date of
termination of employment, commencing on the Participant’s Normal Retirement Date. However,
if a Participant who has completed 10 Years of Service and whose employment terminated before
age 55 elects to commence his benefit under the Qualified Plan on a date on or after his or
her 55th birthday, the Participant’s vested benefit under this Plan shall likewise
commence on that date, but shall be reduced to the Actuarial Equivalent of the benefit that
would have commenced on his Normal Retirement Date.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	4.3	 	Form of Retirement Benefit. Except as provided in the last paragraph of this Section the
Participant’s benefit under this Plan shall be paid in the same form as the Participant’s
benefit under the Qualified Plan. Benefits under this section shall be the Actuarial
Equivalent of the Benefit payable in the form of a Life Annuity.
	 
	 	 	Notwithstanding the above, a Participant who separates from service or retires with a vested
Accrued Benefit shall be paid the Actuarial Equivalent of such benefit in a single sum as
soon as practicable after his retirement or termination of employment if such Actuarial
Equivalent does not exceed ten thousand dollars ($10,000). (See Section 4.8 for the rule
that applies as of January 1, 2008). If the Participant subsequently resumes participation
in the Plan, such Participant’s benefit at his later date of termination shall be reduced by
his prior Accrued Benefit determined as of the date of his previous retirement or
termination.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	4.4	 	Death Benefit. If death occurs before the Participant’s Annuity Starting Date, a monthly
benefit for life shall be payable to the Surviving Spouse of the Participant. The amount of
such benefit shall be equal to (a) minus (b) minus (c) below (but not less than zero) where

	 	(a)	 	means the death benefit that would have been payable to the Surviving

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	 	 	 	Spouse under the Qualified Plan calculated as if Years of Participation under the
Qualified Plan also include “years of participation” used to calculate the
Participant’s benefit under the Tenneco Inc. Retirement Plan and calculated without
applying Sections 415(b)(1)(A), 415(e) and 401(a)(17) of the Code, as adjusted by
the Secretary of the Treasury for any plan year, or the successor of such Section.
The benefit described in this subsection (a) shall be expressed as a Life Annuity
commencing on the date the death benefit under the Qualified Plan commences.

	 	(b)	 	means the sum of: (i) the vested death benefit payable to the Surviving Spouse
under the Qualified Plan (including any annuity purchased under the provisions of the
Qualified Plan); plus (ii) the vested death benefit that would be payable to the
Surviving Spouse under the Tenneco Inc. Retirement Plan if the Surviving Spouse
commenced such benefit on the date the death benefit under the Qualified Plan
commences.
	 
	 	 	 	The benefit described in subsection (b)(i) shall be expressed as a Life Annuity
commencing on the date the death benefit under the Qualified Plan commences. The
benefit described in subsection (b)(ii) shall be the death benefit that would
actually be payable under the Tenneco Inc. Retirement Plan if the Surviving Spouse
commenced such benefit on the date the death benefit under the Qualified Plan
commences in the form of a Life Annuity using the appropriate interest rates and
mortality tables specified in the plan.
	 
	 	(c)	 	means the vested Tenneco Restoration Death Benefit. The “Tenneco Restoration
Death Benefit” shall mean the death benefit payable under the Tenneco Inc. Supplemental
Executive Retirement Plan determined as of December 31, 1996, but not more than (i) the
vested death benefit payable to the Surviving Spouse under the Tenneco Inc. Retirement
Plan calculated without applying Sections 415(b)(1)(A), 415(e), and 401(a)(17) of the
Code less (ii) the vested death benefit payable to the Surviving Spouse under the
Tenneco Inc. Retirement Plan. The amounts under subsection (c)(i) and (c)(ii) shall
likewise be determined as of December 31, 1996.
	 
	 	 	 	The death benefit described in subsection (c)(i) shall be expressed as an
actuarially equivalent Life Annuity commencing on the date the death benefit under
the Qualified Plan commences. The death benefit described in subsection (c)(ii)
shall be the death benefit that would actually be payable under the Tenneco Inc.
Retirement Plan if the Surviving Spouse commenced such benefit on the date the death
benefit under the Qualified Plan commences in the form of an actuarially equivalent
Life Annuity. In both instances, actuarial equivalence shall be determined using
the appropriate interest rates and mortality tables specified in the appropriate
plan.

	 	 	Notwithstanding the above, a Surviving Spouse shall be paid the Actuarial Equivalent of such
benefit in a single sum as soon as practicable after the Participant’s death if such

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	 	 	Actuarial Equivalent does not exceed ten thousand dollars ($10,000). (See Section 4.8 for
the rule that applies as of January 1, 2008)
	 
	 	 	If death occurs on or after the Participant’s Annuity Starting Date, the only Death Benefit
payable is the survivor benefit payable in accordance with the form of payment applicable to
the Participant’s Retirement Benefit in accordance with Section 4.3.
	 
	 	 	The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the
Plan.
	 
	4.5	 	Time of Payment. Except as provided in Section 4.3, payment of a Participant’s benefit under
this Article shall commence on the day the death benefit under the Qualified Plan commences.
The distribution rules of this Section only apply to Grandfathered Amounts. See Appendix B
and Appendix C for the distribution rules that apply to other benefits earned under the Plan.
	 
	4.6	 	Suspension of Benefits. In the event that benefit payments are suspended under Section 2.3
of the Qualified Plan, payments of Grandfathered Amounts under this Plan shall likewise be
suspended. Upon the Participant’s subsequent Retirement or other termination of employment,
the Participant’s Accrued Benefit under Section 2.1 shall be recalculated based on the terms
of this Plan and the Qualified Plan at the time of such subsequent Retirement or other
termination of employment without reduction for any amounts received prior to reemployment.
The Accrued Benefit under Section 2.1 shall then be reduced by the Actuarial Equivalent of any
benefits paid under this Plan prior to reemployment.
	 
	 	 	The Plan Administrator shall establish procedures for the resumption of benefits and the
offsetting of benefit overpayments, if any.
	 
	4.7	 	Income and Payroll Tax Withholding. To the extent required by the laws in effect at the time
deferred compensation payments are made under this Plan, the Employer shall withhold from such
deferred compensation payments any taxes required to be withheld for federal, state, or local
government purposes.
	 
	4.8	 	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 complete termination of
employment with the Affiliated Companies after 2007 will receive a lump sum
distribution of the present value of their Grandfathered Amounts within two months of
such termination (without interest), if such present value is below the Code section
402(g) limit in effect at the termination.

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	 	(b)	 	Pre-2008 Terminations. Participants who had a complete termination of
employment with the Affiliated Companies 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.

	4.9	 	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 this 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%
	 
	Mortality Table:

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

	4.10	 	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 payment will reduce the Participant’s future benefit payments
under the Plan on an actuarial basis.
	 
	4.11	 	Benefit Limit. The amount of the benefit under this Plan will be limited as provided below:

	 	(a)	 	A Participant’s total accrued benefits under all defined benefit plans,
programs, and arrangements maintained by the Company and its affiliates (as determined
under Code section 414) in which he or she participates, including the Plan, may not
exceed 60% of his or her Final Average Salary. If this limit is exceeded, the
Participant’s benefit accrued under the Plan will be reduced to the extent necessary to
satisfy the limit.

	 	(1)	 	For this purpose, “Final Average Salary” has the meaning
provided under Appendix G to the Hunting Ingalls Industries Supplemental Plan 2
(the “OSERP”).

13

 

	 	(2)	 	The Participant’s Final Average Salary will be reduced for
early retirement applying the factors in the OSERP.
	 
	 	(3)	 	The limit in this subsection may not be exceeded even after the
benefits under the Plan have been enhanced under any change in control
agreements or Huntington Ingalls Industries, Inc. Special Agreements.

Article V

VESTING

	5.1	 	Vesting. Except as provided in Section 3.3, a Participant shall be 100% vested in his
Accrued Benefit after completion of five Years of Service or on the occurrence of a Change in
Control. Provided, however, that if a Participant’s employment with an Employer is terminated
for Cause prior to Retirement, the Participant’s Accrued Benefit shall be forfeited.
Termination for Cause shall mean termination on account of dishonesty or any act or conduct on
the part of the Participant which is materially injurious to the business or reputation of any
Employer.

Article VI

PLAN ADMINISTRATION

	6.1	 	Committees. An Administrative Committee and an Investment Committee (together, the
“Committees”), each of one or more persons, shall be appointed by and serve at the pleasure of
the Board. The number of members comprising the Committees shall be determined by the Board,
which may from time to time vary the number of members. A member of the Committees may resign
by delivering a written notice of resignation to the Board. The Board may remove any member by
delivering a certified copy of its resolution of removal to such member. Vacancies in the
membership of the Committees shall be filled promptly by the Board.
	 
	6.2	 	Committee Action.

	 	(a)	 	Each Committee shall act at meetings by affirmative vote of a majority of the
members of that Committee. Any determination of action of the Committees may be made or
taken by a majority of a quorum present at any meeting thereof, or without a meeting,
by resolution or written memorandum signed by a majority of the members of the
Committees then in office. A member of the Committees shall not vote or act upon any
matter which relates solely to himself or herself as a Participant. The Chairman or any
other member or members of each Committee designated by the Chairman may execute any
certificate or other written direction on behalf of the Committee of which he or she is
a member.
	 
	 	(b)	 	The Board shall appoint a Chairman from among the members of the Administrative
Committee and a Secretary who may or may not be a member of the Administrative
Committee. The members of the Investment Committee will

14

 

	 	 	 	elect one of their members as Chairman and will appoint a Secretary and any other
officers as the Investment Committee may deem necessary. The Committees shall
conduct their business according to the provisions of this Article and the rules
contained in the current edition of Robert’s Rules of Order or such other rules of
order the Committees may deem appropriate. The Committees shall hold meetings from
time to time in any convenient location.

	6.3	 	Powers and Duties of the Administrative Committee. The Administrative Committee shall act as
Plan Administrator and shall enforce the Plan in accordance with its terms, shall be charged
with the general administration of the Plan, and shall have all powers necessary to accomplish
its purposes, including, but not by way of limitation, the following:

	 	(a)	 	To construe and interpret the terms and provisions of this Plan and make all
factual determinations;
	 
	 	(b)	 	To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;
	 
	 	(c)	 	To maintain all records that may be necessary for the administration of the Plan;
	 
	 	(d)	 	To provide for the disclosure of all information and the filing or provision of
all reports and statements to Participants, Beneficiaries or governmental agencies as
shall be required by law;
	 
	 	(e)	 	To make and publish such rules for the regulation of the Plan and procedures
for the administration of the Plan as are not inconsistent with the terms hereof;
	 
	 	(f)	 	To appoint a Plan administrator or any other agent, and to delegate to them
such powers and duties in connection with the administration of the Plan as the
Administrative Committee may from time to time prescribe (including the power to
subdelegate);
	 
	 	(g)	 	To exercise powers granted the Administrative Committee under other Sections of
the Plan; and
	 
	 	(h)	 	To take all actions necessary for the administration of the Plan, including
determining whether to hold or discontinue insurance policies purchased in connection
with the Plan.

	6.4	 	Powers and Duties of the Investment Committee. The Investment Committee shall have all powers
necessary to accomplish its purposes, including, but not by way of limitation, the following:

	 	(a)	 	To select types of investment and the actual investments against which earnings
and losses will be measured;

15

 

	 	(b)	 	To oversee the rabbi trust; and
	 
	 	(c)	 	To appoint agents, and to delegate to them such powers and duties in connection
with its duties as the Investment Committee may from time to time prescribe (including
the power to subdelegate).

	6.5	 	Construction and Interpretation. The Administrative Committee shall have full discretion to
construe and interpret the terms and provisions of this Plan, to make factual determinations
and to remedy possible inconsistencies and omissions. The Administrative Committee’s
interpretations, constructions and remedies shall be final and binding on all parties,
including but not limited to the Affiliated Companies and any Participant or Beneficiary. The
Administrative Committee shall administer such terms and provisions in a uniform and
nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan.
	 
	6.6	 	Information. To enable the Committees to perform their functions, the Employer shall supply
full and timely information to the Committees on all matters relating to the compensation of
all Participants, their death or other events that cause termination of their participation in
this Plan, and such other pertinent facts as the Committees may require.
	 
	6.7	 	Committee Compensation, Expenses and Indemnity.

	 	(a)	 	The members of the Committees shall serve without compensation for their
services hereunder.
	 
	 	(b)	 	The Committees are authorized to employ such accounting, consultants or legal
counsel as they may deem advisable to assist in the performance of their duties
hereunder.
	 
	 	(c)	 	To the extent permitted by ERISA and applicable state law, the Company shall
indemnify and hold harmless the Committees and each member thereof, the Board and any
delegate of the Committees who is an employee of the Affiliated Companies against any
and all expenses, liabilities and claims, including legal fees to defend against such
liabilities and claims arising out of their discharge in good faith of responsibilities
under or incident to the Plan, other than expenses and liabilities arising out of
willful misconduct. This indemnity shall not preclude such further indemnities as may
be available under insurance purchased by the Company or provided by the Company under
any bylaw, agreement or otherwise, as such indemnities are permitted under ERISA and
state law.

16

 

Article VII

AMENDMENT AND TERMINATION

	7.1	 	Amendment and Termination of the Plan. 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.

Article VIII

GENERAL PROVISIONS

	8.1	 	Funding. Benefits payable under this Plan to a Participant shall be paid directly from the
general assets of the Employer. No Employer shall be obligated to set aside, earmark or
escrow any funds or other assets to satisfy its obligations under this Plan, and the
Participant and his Surviving Spouse shall not have any property interest in any specific
assets of any Employer other than the unsecured right to receive payments from the Employer as
provided herein. Notwithstanding the foregoing, in the event of a Change in Control, the
Company shall fund all Accrued Benefits payable under this Plan through a trust described in
Code section 671 with respect to which the Company is the grantor (a “Rabbi Trust”). Prior to
a Change in Control, the Company shall not be obligated to deposit funds into such Rabbi
Trust.
	 
	8.2	 	Nonalienation of Benefits under this Plan. Except for claims of indebtedness owing to an
Employer (with respect to Grandfathered Amounts), the interests of Participants and their
Beneficiaries under this Plan are not subject to the claims of their creditors and may not be
voluntarily or involuntarily sold, transferred, alienated, assigned, pledged, anticipated, or
encumbered. Any attempt by a Participant, his Beneficiary, or any other person to sell,
transfer, alienate, assign, pledge, anticipate, encumber, charge or otherwise dispose of any
right to benefits payable hereunder shall be void. The Employer may cancel and refuse to pay
any portion of a benefit which is sold, transferred, alienated, assigned, pledged, anticipated
or encumbered.
	 
	8.3	 	Plan not a Contract of Employment. This Plan shall not be deemed to constitute a contract of
employment between any Employer and any Participant or to be a consideration or an inducement
for the employment or continued employment of any Participant or Employee. Nothing contained
in this Plan shall be deemed to give any Participant or Employee the right to be retained in
the service of any Employer or to

17

 

	 	 	interfere with the right of any Employer to discharge any Participant or employee at any
time regardless of the effect which such discharge shall have upon such individual as a
Participant in the Plan.

	8.4	 	Required Notification to Plan Administrator. Each Participant entitled to benefits hereunder
shall file with the Plan Administrator from time to time in writing his post office address
and each change of post office address. Any check representing payment hereunder and any
communication addressed to a Participant or a former Participant hereunder at his last address
filed with the Plan Administrator, or if no such address has been filed, then at his last
address as indicated on the records of the Employer shall be binding on such person for all
purposes of the Plan, and neither the Plan Administrator nor the Employer or other payor shall
be obliged to search for or ascertain the location of any such person. If the Plan
Administrator for any reason is in doubt as to the address of any Participant or former
Participant entitled to benefits hereunder or as to whether benefit payments are being
received by the person entitled thereto, it shall, by registered mail addressed to the person
concerned at his address last known to the Plan Administrator, notify such person that:

	 	(a)	 	All unmailed and future retirement income payments (with respect to
Grandfathered Amounts) shall be henceforth withheld until he provides the Plan
Administrator with evidence of his continued life and his proper mailing address; and
	 
	 	(b)	 	His right to any retirement income (with respect to Grandfathered Amounts)
whatsoever shall, at the option of the Plan Administrator, be canceled forever, if, at
the expiration of two (2) years from the date of such mailing, he shall not have
provided the Plan Administrator with evidence of his continued life and his proper
mailing address.

	8.5	 	Successors. The provisions of this Plan shall be binding upon each Employer, and their
successors and assigns and upon each Participant and his heirs, spouses, estates, and legal
representatives.
	 
	8.6	 	Facility of Payment. Whenever and as often as any person entitled to payments hereunder
shall be under a legal disability, or in the sole judgment of the Plan Administrator shall
otherwise be in any way incapacitated so as to be unable to manage his financial affairs, the
Plan Administrator, in the exercise of its discretion, may direct that the distribution or
payments to which such person otherwise would be entitled shall be made in any one or more of
the following ways:

	 	(a)	 	Directly to such person;
	 
	 	(b)	 	To his legal curator, guardian, or conservator, or other court-appointed or
court-recognized representatives;

18

 

	 	(c)	 	To his Surviving Spouse, to another member of his family or to any other
person, to be expended for his benefit; or
	 
	 	(d)	 	By the Plan Administrator itself, receiving and expending, or directing the
expenditure of the same for the benefit of such person.
	 
	 	Any payment made in good faith in accordance with the provisions of this Section shall be a
complete discharge of any liability for the making of such payment under the provisions of
this Plan.

	8.7	 	Required Information to Plan Administrator. Each Participant or Surviving Spouse will
furnish to the Plan Administrator such information as the Plan Administrator considers
necessary or desirable for purposes of administering the Plan. The provisions of the Plan
respecting any payments thereunder are conditional upon the Participant’s furnishing promptly
such true, full and complete information as the Plan Administrator may request. Each
Participant or Surviving Spouse will submit proof of his age and his spouse’s age to the Plan
Administrator at such time as required by the Plan Administrator. The Plan Administrator
will, if such proof of age is not submitted as required, use as conclusive evidence thereof
such information as is deemed by it to be reliable, regardless of the lack of proof, or the
misstatement of the age of persons entitled to benefits hereunder, by the Participant or
otherwise. Any notice or information which, according to the terms of the Plan or the rules
of the Plan Administrator, must be filed with the Plan Administrator, shall be deemed so filed
if addressed and either delivered in person or mailed to and received by the Plan
Administrator, in care of the Company at:
	 
	Newport News Shipbuilding Inc.

4101 Washington Avenue

Newport News, Virginia 23607-2770
	 
	8.8	 	Claims Procedure. The standardized “Huntington Ingalls Industries Nonqualified Retirement
Plans Claims and Appeals Procedures” shall apply in handling claims and appeals under this
Plan.
	 
	8.9	 	Controlling State Law. To the extent not superseded by the laws of the United States, the
Plan will be construed and enforced according to the laws of the State of Delaware.
	 
	8.10	 	Severability. In case any provision of this Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining provisions of the Plan,
and the Plan shall be construed and enforced as if such illegal and invalid provisions had
never been set forth.
	 
	8.11	 	Adoption of Plan. Any subsidiary, affiliate company, or other entity that satisfies the
requirements of Section 2.15 of this Plan, may adopt this Plan for all or a portion of its
employees, provided that the Board of Directors of the Company approves such participation.
The administrative powers and control of the Company as provided in the

19

 

Plan shall not be deemed diminished under the Plan by reason of the participation of other
companies in the Plan.

* * *

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

	 	 	 	 	 
	 	HUNTINGTON INGALLS INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

20

 

	 	 	 	 	 

APPENDIX A — REGARDING PLAN ADMINISTRATION

	A.1 	 	In General. This Appendix A gives responsibility for plan
administration (other than investment and trust matters) to an
Administrative Committee, as described below. The provisions of this
Appendix A override any contrary provision elsewhere in the documents
governing the Plan, except to the extent prohibited by
change-in-control provisions or collective bargaining agreements.
	 
	A.2 	 	Plan Administrator. The general administration of the Plan is the
responsibility of the Administrative Committee. The Committee is the
plan administrator, and the Committee and each of its members are
named fiduciaries. Committee members and all other Plan fiduciaries
may serve in more than one fiduciary capacity with respect to the
Plan.
	 
	A.3	 	 The Administrative Committee. The Administrative Committee consists of
at least three members appointed by the Board of Directors of the
sponsoring corporation, the Board of Directors of the Company, or
their delegate. The members of the Committee shall serve without
compensation for such service, unless otherwise determined by the
Board.

	 	(a)	 	Except as otherwise provided in this Appendix A, each member of the Committee
shall continue in office until the expiration of 3 years from the date of his or her
latest appointment or reappointment to the Committee. A member may be reappointed.
	 
	 	(b)	 	If at the end of his or her latest term as a member of the Committee, a member
is not reappointed, he or she will continue to serve on the Committee until the date
his or her successor is appointed.
	 
	 	(c)	 	A member may be removed by the Board at any time and for any reason.

	A.4	 	 Resignation of Committee Members. A member of the Administrative
Committee may resign at any time by delivering a written resignation
to the Secretary of the corporation and to the Secretary of the
Committee. The member’s resignation will be effective as of the date
of delivery or, if later, the date specified in the notice of
resignation.
	 
	A.5	 	 Conduct of Business. The Administrative Committee shall elect a
Chairman from among its members and a Secretary who may or may not be
a member. The Committee shall conduct its business according to the
provisions of this Appendix A and shall hold meetings from time to
time in any convenient location.
	 
	A.6	 	 Quorum. A majority of all of the members of the Administrative
Committee constitutes a quorum and has power to act for the entire
Committee.
	 
	A.7	 	 Voting. All actions taken by the Administrative Committee shall be by
majority vote of the members attending a meeting, whether physically
present or through remote communications. In addition, actions may be
taken by written consent of a majority of the

 

 

	 	 	Committee members without a meeting. The agreement or disagreement of any member may be by
means of any form of written or oral communications.

	A.8	 	 Records and Reports of the Committee. The Administrative Committee
shall keep such written records as it shall deem necessary or proper,
which records shall be open to inspection by the Board.
	 
	A.9	 	 Powers of the Committee. The Administrative Committee shall have all
powers necessary or incident to its office as plan administrator. Such
powers include, but are not limited to, full discretionary authority
to:

	 	(a)	 	prescribe rules for the operation of the Plan;
	 
	 	(b)	 	determine eligibility;
	 
	 	(c)	 	comply with the requirements of reporting and disclosure under ERISA and any
other applicable law, and to prepare and distribute other communications to
participants (and, if applicable, beneficiaries) as a part of Plan operations;
	 
	 	(d)	 	prescribe forms to facilitate the operation of the Plan;
	 
	 	(e)	 	secure government approvals for the Plan (if applicable);
	 
	 	(f)	 	construe and interpret the terms of the Plan, including the power to remedy
possible ambiguities, inconsistencies or omissions, and to determine the facts
underlying any claim for benefits;
	 
	 	(g)	 	determine the amount of benefits, and authorize payments from the trust;
	 
	 	(h)	 	maintain records;
	 
	 	(i)	 	litigate, settle claims, and respond to and comply with court proceedings and
orders on the Plan’s behalf;
	 
	 	(j)	 	enter into contracts on the Plan’s behalf;
	 
	 	(k)	 	employ counsel and others to render advice about any responsibility that the
Committee has under the Plan;
	 
	 	(l)	 	exercise all other powers given to the plan administrator under other
provisions of the Plan.

	A.10	 	 Allocation or Delegation of Duties and Responsibilities. The Administrative Committee and the
Board may:

	 	(a)	 	Employ agents to carry out nonfiduciary responsibilities;

2

 

	 	(b)	 	Employ agents to carry out fiduciary responsibilities (other than trustee
responsibilities as defined in section 405(c)(3) of ERISA) under the rules of section
11 of this Appendix A;
	 
	 	(c)	 	Consult with counsel, who may be counsel to the Company;
	 
	 	(d)	 	Provide for the allocation of fiduciary responsibilities (other than trustee
responsibilities as defined in section 405(c)(3) of ERISA) among their members under
the rules of section 11 of this Appendix A; and
	 
	 	(e)	 	In particular, designate one or more officers as having responsibility for
designing and implementing administrative procedures for the Plan.

	A.11	 	 Procedure for the Allocation or Delegation of Fiduciary Duties. The rules of this section of
the Appendix A are as follows:

	 	(a)	 	Any allocation or delegation of fiduciary responsibilities must be approved by
majority vote of the members of the Administrative Committee, in a resolution approved
by the majority.
	 
	 	(b)	 	The vote cast by each member of the Administrative Committee for or against the
adoption of such resolution must be recorded and made a part of the written record of
the proceedings.
	 
	 	(c)	 	Any delegation or allocation of fiduciary responsibilities may be changed or
ended only under the rules of (a) and (b) of this section of the Appendix A.

	A.12	 	 Expenses of the Plan. All reasonable and proper expenses of administration of the Plan
including counsel fees will be paid out of Plan assets, unless paid by the employers
participating in the Plan (subject to subsection (b)).

	 	(a)	 	No expenses may be withdrawn from Plan assets without the consent of the
Administrative Committee. The Committee may authorize the trustee to withdraw
particular expenses or kinds of expenses on a standing basis.
	 
	 	(b)	 	The participating employers may initially pay any expense that normally would
be a charge on Plan assets and later obtain reimbursement from Plan assets.

	 	(1)	 	This even applies in cases where, at the time of the employers’
initial payment of the expense, it is not clear that the employers may lawfully
seek reimbursement from Plan assets but the employers’ legal right to
reimbursement is later clarified.
	 
	 	(2)	 	It is specifically anticipated that there may be situations,
such as litigation, where the employers might choose to bear costs initially,
but later obtain

3

 

	 	 	 	reimbursement many years after the costs were incurred. Such delayed
reimbursements shall be permissible.

	A.13	 	 Indemnification. The Company agrees to indemnify and reimburse, to
the fullest extent permitted by law, members and former members of
the Board; members and former members of the Administrative
Committee; employees and former employees of the Company or its
subsidiaries who act (or acted) for the Committee, the Company or
another employer participating in the Plan for any and all expenses,
liabilities, or losses arising out of any act or omission relating to
the rendition of services for or the management and administration of
the Plan, except in instances of gross misconduct.
	 
	A.14	 	 Extensions of Time Periods. For good cause shown, the Administrative
Committee may extend any period set forth in the Plan for taking any
action required of any participant or beneficiary to the extent
permitted by law.
	 
	A.15	 	 Claims Procedures. The standardized “Huntington Ingalls Industries
Nonqualified Retirement Plans Claims and Appeals Procedures” shall
apply in handling claims and appeals under this Plan.
	 
	A.16	 	 Qualified Domestic Relations Orders. Notwithstanding anything in the
Plan to the contrary, all or a portion of a Participant’s benefit may
be paid to another person as specified in a domestic relations order
that the Administrative Committee 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:

	 	(a)	 	issued pursuant to a State’s domestic relations law;
	 
	 	(b)	 	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;
	 
	 	(c)	 	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
	 
	 	(d)	 	meets such other requirements established by the Administrative Committee.
	 
	 	The Administrative Committee shall determine whether any document received by it is a
Qualified Domestic Relations Order. In making this determination, the Administrative
Committee 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.

	A.17	 	 Amendments. The Administrative Committee may amend the Plan through written resolution to
make the changes identified in subsection (a). Any amendments must be made in accordance with
the rules of subsections (b), (c) and (d).

4

 

	 	(a)	 	The Committee may amend the Plan:

	 	(1)	 	to the extent necessary to keep the Plan in compliance
with law;
	 
	 	(2)	 	to make clarifying changes;
	 
	 	(3)	 	to correct drafting errors;
	 
	 	(4)	 	to otherwise conform the Plan documents to the
company’s intent;
	 
	 	(5)	 	to change the participation and eligibility provisions;
	 
	 	(6)	 	to change plan definitions, formulas or employee
transfer rules;
	 
	 	(7)	 	with respect to administrative, procedural and
technical matters including benefit calculation procedures,
distribution elections and timing, other elections, waivers, notices,
and other ministerial matters; and
	 
	 	(8)	 	with respect to management of funds.

	 	(b)	 	Before adopting any Plan amendment, the Committee must obtain:

	 	(1)	 	a cost analysis of the proposed amendment;
	 
	 	(2)	 	a legal opinion that the amendment does not violate
ERISA or other applicable legal requirements;
	 
	 	(3)	 	a tax opinion that the amendment will not result in the
Plan’s disqualification;
	 
	 	(4)	 	approval of the amendment from the Corporate Vice
President and Chief Financial Officer of the Company; and
	 
	 	(5)	 	approval of the amendment from the Corporate Vice
President and Chief Human Resources and Administrative Officer of the
Company.

	 	(c)	 	The Committee must refer to the Board for approval of any amendments
that:

	 	(1)	 	will result in an increase in costs on an annual basis
in excess of $5,000,000; or

5

 

	 	(2)	 	will result in a decrease in costs on an annual basis
in excess of $5,000,000.

	 	(d)	 	The Committee’s amendment authority may not be delegated.
	 
	 	(e)	 	Nothing in this section 17 of the Appendix A is intended to modify the
amendment authority of any company, board of directors, officer or other committee.

6

 

APPENDIX B — 2005-2007 TRANSITION RULES

     This Appendix B 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.

	B.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.
	 
	B.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.

 

 

	B.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).

2

 

APPENDIX C — POST 2007

DISTRIBUTION OF 409A AMOUNTS

     The provisions of this Appendix C 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 Article IV and Appendix
B addresses distributions of amounts subject to Code section 409A with benefit commencement dates
after January 1, 2005 and prior to January 1, 2008.

	C.01	 	 Time of Distribution. Subject to the special rules provided in this
Appendix C, distributions to a Participant of his vested retirement
benefit shall commence as of the Payment Date.
	 
	C.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).
	 
	C.03	 	 Forms of Distribution. Subject to the special rules provided in this
Appendix C, 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.

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

	C.05	 	 Actuarial Assumptions.
Except as provided in
Section C.06, all forms of
payment under this Appendix
C 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

	C.06	 	 Accelerated Lump Sum Payouts.

	 	(a)	 	Post-2007 Separations. Notwithstanding the provisions of this Appendix C, 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 C.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 C, 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

2

 

	 	 	 

	C.06

	 	shall be based on the actuarial assumptions in effect
under the Huntington Ingalls Industries Pension Plan for purposes of calculating
lump sum amounts, 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.
	 
	 	 
	C.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.
	 
	 	 
	C.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 C.08 shall be paid in accordance
with Code section 409A.

3

 

APPENDIX D — NORTHROP GRUMMAN SPIN-OFF

	 	 	 

	D.01

	 	Background. The Company was a subsidiary of
Northrop Grumman Corporation (“NGC”) prior to
Distribution Date. On the Distribution Date,
pursuant to an agreement between the Company and
NGC, the liabilities for certain participants’
benefits under the Newport News Shipbuilding Inc.
Retirement Benefit Restoration Plan (the “NGC
Plan”), including Grandfathered Amounts, were
transferred to this Plan. The Participants whose
benefits were transferred to this Plan on the
Distribution Date and other Participants who were
employees of 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.
	 
	 	 
	D.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.
	 
	 	 
	D.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.
	 
	 	 
	D.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, or to have
experienced a Change in Control, 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 the Company’s 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.
	 
	 	 
	D.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.
	 
	 	 
	D.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.
	 
	 	 
	D.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.exv10w23

Exhibit 10.23

HUNTINGTON INGALLS INDUSTRIES

ELECTRONIC SYSTEMS EXECUTIVE PENSION PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE 1—Introduction
	 	 	2	 
	Section 1.01. Introduction
	 	 	2	 
	Section 1.02. Effective Date
	 	 	2	 
	Section 1.03. Sponsor
	 	 	2	 
	Section 1.04. Predecessor Plan
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 2—Definitions
	 	 	2	 
	Section 2.01. Affiliated Companies
	 	 	2	 
	Section 2.02. Annual Incentive Programs
	 	 	2	 
	Section 2.03. Average Annual Compensation
	 	 	2	 
	Section 2.04. Board
	 	 	2	 
	Section 2.05. Code
	 	 	2	 
	Section 2.06. Committee
	 	 	2	 
	Section 2.07. Company
	 	 	3	 
	Section 2.08. Defined Contribution Plan
	 	 	3	 
	Section 2.09. Designated Entity
	 	 	3	 
	Section 2.10. ERISA
	 	 	3	 
	Section 2.11. ES Pension Plan
	 	 	3	 
	Section 2.12. Executive
	 	 	3	 
	Section 2.13. Executive Benefit Service
	 	 	4	 
	Section 2.14. Executive Pension Base
	 	 	4	 
	Section 2.15. Executive Pension Supplement
	 	 	4	 
	Section 2.16. Grandfathered Amounts
	 	 	4	 
	Section 2.17. Key Employee
	 	 	4	 
	Section 2.18. Maximum Contribution
	 	 	4	 
	Section 2.19. Participating Company
	 	 	5	 
	Section 2.20. Payment Date
	 	 	5	 
	Section 2.21. Pension Plan and Pension Plans
	 	 	5	 
	Section 2.22. Plan
	 	 	5	 
	Section 2.23. Qualified Plan Benefit
	 	 	5	 
	Section 2.24. Retirement Eligible
	 	 	6	 
	Section 2.25. Separation from Service or Separates from Service
	 	 	6	 
	Section 2.26. Westinghouse
	 	 	6	 
	Section 2.27. Westinghouse Acquisition
	 	 	6	 
	Section 2.28. Westinghouse Plan
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 3—Qualification for Benefits; Mandatory Retirement
	 	 	7	 
	Section 3.01. Qualification for Benefits
	 	 	7	 
	Section 3.02. Mandatory Retirement
	 	 	8	 
	Section 3.03. Certain Transfers
	 	 	8	 
	 
	 	 	 	 
	ARTICLE 4—Calculation of Executive Pension Supplement
	 	 	8	 
	Section 4.01. In General
	 	 	8	 
	Section 4.02. Amount
	 	 	8	 

 

 

	 	 	 	 	 

	ARTICLE 5—Death in Active Service
	 	 	9	 
	Section 5.01. Eligibility For an Immediate Benefit
	 	 	9	 
	Section 5.02. Calculation of Immediate Benefit
	 	 	9	 
	Section 5.03. Eligibility For a Deferred Benefit
	 	 	10	 
	Section 5.04. Calculation of Deferred Benefit
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 6—Executive Pension Base
	 	 	10	 
	Section 6.01. In General
	 	 	10	 
	Section 6.02. Executive Pension Base
	 	 	10	 
	Section 6.03. Average Annual Compensation
	 	 	10	 
	Section 6.04. Annual Incentive Programs
	 	 	11	 
	Section 6.05. Executive Benefit Service
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 7—Payment of Benefits
	 	 	12	 
	Section 7.01. Limitation on Benefits
	 	 	12	 
	Section 7.02. Normal Form and Commencement of Benefits
	 	 	12	 
	Section 7.03. Guaranteed Benefit
	 	 	13	 
	Section 7.04. Guaranteed Surviving Spouse Benefit
	 	 	13	 
	Section 7.05. Lump Sum Payments
	 	 	13	 
	Section 7.06. Mandatory Cashout
	 	 	13	 
	Section 7.07. Optional Payment Forms
	 	 	14	 
	Section 7.08. Rehires
	 	 	14	 
	Section 7.09. Special Tax Distribution
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 8—Conditions to Receipt of Executive Pension Supplement
	 	 	14	 
	Section 8.01. Non-Competition Condition
	 	 	14	 
	Section 8.02. Breach of Condition
	 	 	15	 
	Section 8.03. Waiver After 65
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 9—Administration
	 	 	15	 
	Section 9.01. Committee
	 	 	15	 
	Section 9.02. Claims Procedures
	 	 	15	 
	Section 9.03. Trust
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 10—Modification or Termination
	 	 	16	 
	Section 10.01. Amendment and Plan Termination
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 11—Miscellaneous
	 	 	16	 
	Section 11.01. Benefits Not Assignable
	 	 	16	 
	Section 11.02. Facility of Payment
	 	 	17	 
	Section 11.03. Committee Rules
	 	 	17	 
	Section 11.04. Limitation on Rights
	 	 	17	 
	Section 11.05. Benefits Unsecured
	 	 	17	 
	Section 11.06. Governing Law
	 	 	17	 
	Section 11.07. Severability
	 	 	17	 
	Section 11.08. Expanded Benefits
	 	 	17	 
	Section 11.09. Plan Costs
	 	 	18	 

- ii -

 

	 	 	 	 	 

	Section 11.10. Termination of Participation
	 	 	18	 
	 
	 	 	 	 
	ARTICLE 12—Change in Control
	 	 	18	 
	Section 12.01. Definition
	 	 	18	 
	Section 12.02. Vesting and Funding Rules
	 	 	19	 
	Section 12.03. Special Retirement Provisions
	 	 	19	 
	Section 12.04. Calculation of Present Value
	 	 	19	 
	Section 12.05. Calculation of Offset
	 	 	20	 
	Section 12.06. Limitation on Amendment, Suspension and Termination
	 	 	20	 
	 
	 	 	 	 
	APPENDIX A—Executive Buyback
	 	 	22	 
	Section A.01. Introduction
	 	 	22	 
	Section A.02. Buy Back Offer
	 	 	22	 
	Section A.03. One-Time Opportunity
	 	 	22	 
	Section A.04. Payment
	 	 	22	 
	Section A.05. Refund of Buy Back Payment
	 	 	22	 
	Section A.06. Effective Date
	 	 	23	 
	 
	 	 	 	 
	APPENDIX B—Rehired Executives
	 	 	24	 
	Section B.01. Retired Executives Rehired as Executives
	 	 	24	 
	Section B.02. Former Executives with Vested Pensions Rehired as Executives
	 	 	25	 
	Section B.03. Retired Executives Rehired in Non-Executive Positions
	 	 	25	 
	Section B.04. Events That Span Westinghouse Acquisition
	 	 	26	 
	Section B.05. Breaks Spanning March 1, 1996
	 	 	26	 
	 
	 	 	 	 
	APPENDIX C—Coordination With Westinghouse Plan
	 	 	27	 
	Section C.01. In General
	 	 	27	 
	Section C.02. Pre-Acquisition Benefits
	 	 	27	 
	Section C.03. Coordination of Pre and Post-Acquisition Benefits
	 	 	27	 
	Section C.04. No Duplication of Benefits
	 	 	27	 
	 
	 	 	 	 
	APPENDIX D 2005-2007 Transition Rules
	 	 	28	 
	Section D.01. Election
	 	 	28	 
	Section D.02. 2005 Commencements
	 	 	28	 
	Section D.03. 2006 and 2007 Commencements
	 	 	28	 
	 
	 	 	 	 
	APPENDIX E Post 2007 Distribution of 409A Amounts
	 	 	30	 
	Section E.01. Time of Distribution
	 	 	30	 
	Section E.02. Special Rule for Key Employees
	 	 	30	 
	Section E.03. Forms of Distribution
	 	 	30	 
	Section E.04. Death
	 	 	30	 
	
Section E.05. Actuarial Assumptions
	 	 	31	 
	Section E.06. Accelerated Lump Sum Payouts
	 	 	31	 
	Section E.07. Effect of Early Taxation
	 	 	32	 
	Section E.08. Permitted Delays
	 	 	32	 

- iii -

 

	 	 	 	 	 

	APPENDIX F Northrop Grumman Spin-Off
	 	 	33	 
	Section F.01. Background
	 	 	33	 
	Section F.02. Plan Benefits
	 	 	33	 
	Section F.03. Distributions
	 	 	33	 
	Section F.04. Termination and Key Employees
	 	 	33	 
	Section F.05. Participant Elections
	 	 	33	 
	Section F.06. References to Plan
	 	 	33	 
	Section F.07. Right to Benefits
	 	 	33	 

- iv -

 

HUNTINGTON INGALLS INDUSTRIES

ELECTRONIC SYSTEMS EXECUTIVE PENSION PLAN

     The Huntington Ingalls Industries Electronic Systems Executive Pension 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 F for special rules related to the spin-off of the Company from Northrop Grumman
Corporation.

 

 

ARTICLE 1

Introduction

     Section 1.01. Introduction. The Huntington Ingalls Industries Electronic
Systems Executive Pension Plan is a supplemental pension plan that provides nonqualified deferred
compensation for a select group of management or highly compensated employees.

     Section 1.02. Effective Date. The Plan became effective as of the Distribution Date.

     Section 1.03. Sponsor. The Plan sponsor is the Company.

     Section 1.04. Predecessor Plan. The Plan was established as a successor to
the Westinghouse Executive Pension Plan, maintained by Westinghouse Electric Corporation
(“Westinghouse”) for the benefit of certain executive employees of the Westinghouse Electronic
Systems Group as of February 29, 1996 who became employees of the Northrop Grumman Electronic
Sensors & Systems Division as of March 1, 1996 as a result of the Westinghouse Acquisition, and
certain other executive employees who may become employed by the Northrop Grumman Electronic
Sensors & Systems Division on or after March 1, 1996. The Northrop Grumman Electronic Sensors &
Systems Division became the Northrop Grumman Electronic Sensors & Systems Sector effective August
24, 1998.

ARTICLE 2

Definitions

     Capitalized terms which are defined in the ES Pension Plan will have the same meanings in this
Plan unless otherwise expressly stated. In addition, the following terms when used and capitalized
will have the following meanings:

     Section 2.01. Affiliated Companies. The Company and any other entity related
to the Company under the rules of section 414 of the Code.

     Section 2.02. Annual Incentive Programs. See Article 6.

     Section 2.03. Average Annual Compensation. See Article 6.

     Section 2.04. Board. Board means the Board of Directors of the Company or its
delegate.

     Section 2.05. Code. The Internal Revenue Code of 1986, as amended, and as it
may be amended.

     Section 2.06. Committee. A committee of not less than three members appointed
by the Board with responsibility for the general administration of the Plan. The Committee is the
“plan administrator” under ERISA.

- 2 -

 

     Section 2.07. Company. Huntington Ingalls Industries, Inc.

     Section 2.08. Defined Contribution Plan. A defined contribution plan within
the meaning of ERISA § 3(34), but not including:

     (a) the Northrop Grumman Electronic Systems Savings Program or any similar program of a
Participating Company or a Designated Entity or

     (b) any amount received pursuant to a cash or deferred arrangement (as that term is defined in
the Code) maintained by a Participating Company or a Designated Entity.

     Section 2.09. Designated Entity. Designated Entity means an Affiliated
Company or other entity that has been and is still designated by the Committee as participating in
the Plan.

     Section 2.10. ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and as it may be amended.

     Section 2.11. ES Pension Plan. The Northrop Grumman Electronic Systems
Pension Plan, formerly known as the ESSD Pension Plan.

     Section 2.12. Executive. Executive means an individual who satisfies
(a) and (b) and is not excluded by (c) or (d):

     (a) An Employee who is employed by ES (or by a Participating Company, Designated
Entity, or other Affiliated Company) in a position that is determined by the Company’s
Chief Executive Officer or Vice President and Chief Human Resources and Administrative
Officer to be eligible as an Executive position under this Plan based on the duties and
responsibilities of the position.

     (b) The Employee has been notified by the Committee in writing that he or she is
eligible for benefits under the Plan.

     (c) No Employee may receive benefits under this Plan if he or she is currently
accruing supplemental benefits under any other nonqualified deferred compensation plan,
contract, or arrangement maintained by the Affiliated Companies or to which the Affiliated
Companies contribute with the exception of the Officers Supplemental Executive Retirement
Program under the Huntington Ingalls Industries Supplemental Plan 2.

     (d) Notwithstanding any provision of the Plan to the contrary, effective as of July 1,
2003, no Employee will first become eligible to participate in the Plan or otherwise
receive credit for service or compensation for purposes of calculating a benefit under the
Plan unless the Employee was classified as an Executive eligible to participate in the Plan
before that date. Executives that terminate employment and are later rehired into positions
that are determined to be eligible as Executive positions under the Plan will be eligible
to resume participation in the Plan and will be subject to Appendix B.

- 3 -

 

     Section 2.13. Executive Benefit Service. See Article 6.

     Section 2.14.  Executive Pension Base. See Article 6.

     Section 2.15. Executive Pension Supplement. The pension calculated pursuant
to Articles 4 and 5 of this Plan. There will be no Executive Pension Supplement payable if the
Executive’s Qualified Plan Benefit equals or exceeds his or her Executive Pension Base.

     Section 2.16. 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.

     Section 2.17. 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
Executives 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.

     Section 2.18. Maximum Contribution. An Employee will be deemed to have made
the Maximum Contribution if he or she has made the contributions under (a) and (b), as interpreted
under (c):

     (a) During such time as the Employee was eligible to participate in the ES Pension Plan and
the Westinghouse Pension Plan, he or she contributed the maximum amount the Employee was permitted
to contribute under those plans, and

     (b) During such time as the Employee was employed by a Designated Entity (which includes for
this purpose a “Designated Entity” under the Westinghouse Plan during periods before the
Westinghouse Acquisition),

          (1) The Employee contributed the maximum amount he or she was permitted to contribute, if any,
to that Designated Entity’s defined benefit pension or Defined Contribution Plan, if any, and

          (2) The Employee paid to the Company (or to Westinghouse, before the Westinghouse Acquisition)
an amount of each of his or her annual incentive compensation awards based on the maximum ES
Pension Plan contribution formula (or Westinghouse Pension Plan contribution formula, as
appropriate) applied to 50% of his or her awards. This payment is pre-tax and is made by a deferral
election entered into prior to the year in which the annual incentive compensation award is
determined and paid.

     (c) This Plan is intended as essentially a continuation of the Westinghouse
Plan (see Appendix C). Accordingly, this Section is to be interpreted as requiring an Executive to
have made the Maximum Contribution not only under this Plan but also under the Westinghouse Plan.

- 4 -

 

     Section 2.19. Participating Company. Any of the “Participating Companies”
under the ES Pension Plan.

     Section 2.20. Payment Date. The 1st of the month coincident with or following
the later of (a) the date the Executive attains age 55, or (b) the date the Executive Separates
from Service.

     Section 2.21. Pension Plan and Pension Plans. Any of the following:

	 	(a)	 	The Northrop Grumman Retirement Plan
	 
	 	(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.

     Section 2.22. Plan. The Huntington Ingalls Industries Electronic Systems
Executive Pension Plan.

     Section 2.23. Qualified Plan Benefit.

	 	(a)	 	The Qualified Plan Benefit is equal to the sum of:

	 	(1)	 	the annual amount of pension the Executive has accrued under
the ES Pension Plan and any applicable defined benefit pension plan of a
Designated Entity based on Benefit Service accumulated up to the earlier of the
Executive’s actual retirement date or death;
	 
	 	(2)	 	the amount the Executive is entitled to receive on a life
annuity basis for retirement under any applicable Defined Contribution Plan of
a Designated Entity;
	 
	 	(3)	 	in any case where service included in the Executive’s Vesting
Service also entitles that Executive to benefits under one or more retirement
plans (whether a defined benefit or Defined Contribution Plan or both) of
another company, the amount the Executive is entitled to receive on a life
annuity basis for retirement from those plans; and
	 
	 	(4)	 	the amount of any “Qualified Plan Benefits” taken into account
under the Westinghouse Plan (or which would have been taken into account, but
for

- 5 -

 

	 	 	 	the Westinghouse Acquisition) with respect to plans that were not acquired
by the Affiliated Companies as part of the Westinghouse Acquisition;

provided, the method of benefit measurement, in the case of (2), (3) and (4) above, will be on the
basis of procedures determined by the Committee on a plan-by-plan basis.

     (b) The Qualified Plan Benefit does not include any early pension retirement supplement.

     (c) The term Qualified Plan Benefit will also include amounts accrued under an excess benefit
plan or other similar arrangement in which the Executive is a participant.

     Section 2.24. Retirement Eligible. An Executive is Retirement Eligible if he
or she is accruing Vesting Service and:

     (a) has attained age 65 and completed five or more years of Vesting Service;

     (b) has attained age 60 and completed 10 or more years of Vesting Service;

     (c) has attained age 58 and completed 30 or more years of Vesting Service; or

     (d) has satisfied the requirements for an immediate pension under the Special Retirement
Benefit provisions of the ES Pension Plan.

     Section 2.25. Separation from Service or Separates from Service. A
“separation from service” within the meaning of Code section 409A.

     Section 2.26. Westinghouse. Westinghouse Electric Corporation.

     Section 2.27. Westinghouse Acquisition. The acquisition by Northrop Grumman
Corporation of the Electronic Systems Group of Westinghouse effective March 1, 1996.

     Section 2.28. Westinghouse Plan. The Westinghouse Executive Pension Plan, as
it existed from time to time.

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ARTICLE 3

Qualification for Benefits; Mandatory Retirement

     Section 3.01. Qualification for Benefits. Subject to Article 8 and
other applicable provisions of the Plan, if any, each Executive will be entitled to the
benefits of this Plan on separation from service from a Participating Company, a Designated
Entity, or any other Affiliated Company, provided that such Executive meets the following
four conditions:

     (a) He or she has been employed in a position that meets the definition of Executive for five
or more continuous years immediately preceding the earlier of the Executive’s actual retirement
date or the Executive’s Normal Retirement Date. For purposes of this five-year requirement (but not
for purposes of determining Executive Benefit Service under Section 6.05), the General Manager of
ES and the Vice President of Human Resources for ES may determine that one or more years of an
Employee’s service with an Affiliated Company prior to the Employee’s transfer to ES shall be
counted as having been in an Executive position.

     (b) He or she has made the Maximum Contribution during each year of Vesting Service from the
date he or she first became an Executive until the earliest of his or her date of death, actual
retirement date or Normal Retirement Date;

     (c) He or she is a participant in the ES Pension Plan or in the defined benefit plan or
Defined Contribution Plan of a Designated Entity, if any;

     (d) He or she is Retirement Eligible on the date of voluntary or involuntary separation from
service from a Participating Company or a Designated Entity or, in the case of a Surviving Spouse
benefit, satisfies the requirements for benefits under Article 5 of the Plan.

          An Executive who meets the following requirements will be treated as “Retirement Eligible”
even though not meeting the Plan’s definition of this term:

          (1) The Executive is involuntarily terminated without cause, or terminated due to a
divestiture of his business unit,

          (2) The Executive has attained age 53 with 10 or more years of Early Retirement Eligibility
Service, or 75 points (age plus Years of Credited Service) at date of termination, and

          (3) The Executive is actively accruing benefits at date of termination and has satisfied both
the rule of Section 3.01(a) and the rule of Section 3.01(b) on the date of termination.

          Benefits that become payable based on the Executive’s termination meeting the three
requirements above shall be subject to Code Section 409A and payable in accordance with the terms
of Appendix E. Reduction factors will apply in cases where benefit payments commence prior to age
58 (if the Executive has 30 or more years of Vesting Service) or age 60 (if the Executive has 10 -
29 years of Vesting Service). The reduction will be an actuarial one

- 7 -

 

from age 58 or 60 (whichever
age applies) to the actual payment commencement date. The reduction factor will be based on the
actuarial assumptions used for determining lump sum actuarial equivalents in the Northrop Grumman
Cash Balance Plan Program.

     Section 3.02. Mandatory Retirement. Pursuant to this Plan, the Company will
be entitled, at its option, to retire any Executive who has attained age 65 and who, for the
two-year period immediately before his or her retirement, has participated in this Plan, if such
Executive is entitled to an immediate nonforfeitable annual retirement benefit from a pension,
profit-sharing, savings or deferred compensation plan, or any combination of such plans, of a
Participating Company or any Affiliated Company, which equals, in the aggregate, at least $44,000.
The calculation of the $44,000 (or greater) amount will be performed in a manner consistent with 29
U.S.C. § 631(c)(2).

     Section 3.03. Certain Transfers. Except as otherwise provided in (e) below,
if an Executive transfers to a position with an Affiliated Company that is not covered by a
Participating Company or Designated Entity:

     (a) He or she will immediately cease to accrue Executive Benefit Service.

     (b) He or she will continue to earn Vesting Service (for purposes of the Plan other than
Executive Benefit Service) for periods of employment with the Affiliated Company.

     (c) His or her Average Annual Compensation will include earnings as an employee from the
Affiliated Company for periods after the transfer until his or her termination of employment with
all Affiliated Companies.

     (d) He or she may receive benefits under the Plan if he or she subsequently retires from the
Company and satisfies the Plan’s eligibility requirements.

     (e) If an Executive transfers to a position with an Affiliated Company that has been
determined by the Company’s Chief Executive Officer or Vice President and Chief Human Resources and
Administrative Officer to be an eligible position under the Plan, (a)-(d) above will not apply and
the Executive will continue to be classified as an active participant for all purposes under the
Plan until the Executive’s separation from service from all Affiliated Companies.

ARTICLE 4

Calculation of Executive Pension Supplement

     Section 4.01. In General. The Executive Pension Supplement for an Executive
who meets the qualifications of Article 3 of the Plan retiring on an Early, Normal or Special
Retirement Date will be calculated as described in Section 4.02(a) or (b).

     Section 4.02. Amount.

- 8 -

 

     (a) If the Executive

          (1) has attained age 60 and completed 10 or more years of Vesting Service,

          (2) has attained age 65, or

          (3) has satisfied the eligibility requirements for an immediate pension under the “Special
Retirement Benefit” provisions of the ES Pension Plan,

the Executive Pension Supplement is determined by subtracting the Executive’s Qualified Plan
Benefit that would be payable if he or she elected a Life Annuity Option (after any reduction for
early retirement, if applicable) from his or her Executive Pension Base.

     (b) If the Executive has not met the requirements of paragraph (a) above but has attained age
58 and completed 30 or more years of Vesting Service, the Executive Pension Supplement is
determined by subtracting the Executive’s Qualified Plan Benefit that would be payable if he or she
elected a Life Annuity Option (before any reduction for retirement prior to age 60) from his or her
Executive Pension Base.

     (c) If the Executive has not met the requirements of paragraph (a) or (b) above but is deemed
to be Retirement Eligible under Section 3.01(d) based on the circumstances of the Executive’s
termination, the Executive Pension Supplement is determined by subtracting the Executive’s
Qualified Plan Benefit projected to age 60 as a Life Annuity from his or her Executive Pension
Base.

ARTICLE 5

Death in Active Service

     Section 5.01. Eligibility For an Immediate Benefit. If an Executive dies in
active service and, on his or her date of death, satisfies the requirements of the “Special
Surviving Spouse Benefit” under the ES Pension Plan and satisfied the requirements of Section
3.01(b) and (c) of this Plan at the time of death, a Surviving Spouse benefit will also be payable
under this Plan if his or her Executive Pension Base exceeds his or her Qualified Plan Benefit. The
requirement of Section 3.01(a) is waived.

     Section 5.02. Calculation of Immediate Benefit. The amount of the immediate
Surviving Spouse benefit under Section 5.01 will be the Executive Pension Supplement reduced in the
same manner as though the benefit were a “Special Surviving Spouse Benefit” under the ES Pension
Plan. For purposes of this Section, the Executive Pension Supplement will be calculated as follows:

     (a) If the Executive had attained age 60 or if the Executive had completed 30 years of Vesting
Service, the Executive Pension Supplement would be calculated as described in Section 4.02(a);

- 9 -

 

     (b) Otherwise, the Executive Pension Supplement would be 80% of the difference between the
Executive Pension Base and the unreduced Qualified Plan Benefit.

     Section 5.03. Eligibility For a Deferred Benefit. If an Executive dies in
active service who does not satisfy the requirements of Section 5.01 but who satisfies the
requirements of the “Surviving Spouse Benefit” under the ES Pension Plan and satisfied the
requirements of Section 3.01(b) and (c) of this Plan at the time of death, a Surviving Spouse
benefit will also be payable under this Plan if his or her Executive Pension Base exceeds his or
her Qualified Plan Benefit. The requirement of Section 3.01(a) is waived.

     Section 5.04. Calculation of Deferred Benefit. The amount of the deferred
Surviving Spouse benefit under Section 5.03 will be the Executive Pension Supplement reduced in the
same manner as though the benefit were payable under the ES Pension Plan. For purposes of this
paragraph, the Executive Pension Supplement will be calculated by subtracting the Executive’s
Qualified Plan Benefit (before any reductions) from his or her Executive Pension Base.

ARTICLE 6

Executive Pension Base

     Section 6.01. In General. This Article sets forth the rules for determining a
Participant’s Executive Pension Base.

     Section 6.02. Executive Pension Base. The Executive Pension Base = (a) x (b)
x (c) as follows:

	 	(a)	 	1.47%;
	 
	 	(b)	 	Average Annual Compensation;
	 
	 	(c)	 	the number of years of Executive Benefit Service accrued to the earliest of:

	 	(1)	 	the Executive’s actual retirement date, or
	 
	 	(2)	 	the date of the Executive’s death.

     Section 6.03. Average Annual Compensation. Average Annual Compensation = (a)
+ (b) as follows:

     (a) 12 times the average of the five highest of the Executive’s December l monthly base
salaries during the 10-year period immediately preceding the earliest of:

	 	(1)	 	the Executive’s date of death, or
	 
	 	(2)	 	the Executive’s actual retirement date.

- 10 -

 

     (b) the average of the Executive’s five highest annual incentive compensation awards paid
under the Annual Incentive Programs or equivalent annual program or programs during the 10-year
period ending with the earliest of:

	 	(1)	 	the year of the Executive’s death, or
	 
	 	(2)	 	the year of the Executive’s actual retirement date.

     (c) No earnings before March 1, 1996 are taken into account under this Article.

     (d) Notwithstanding the foregoing, for Executives terminating employment with the Affiliated
Companies after 2004, the averages in subsection (a) and (b) above shall be based on salaries and
annual incentive compensation awards paid in 1995 or later and shall not be limited to the 10-year
periods described in subsections (a) and (b). All amounts accrued as a result of this change shall
be subject to Code section 409A.

     (e) Average Annual Compensation normally includes only pay earned while an Executive. But see
Section 3.03.

     (f) 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 Company’s Compensation Committee that is (a) calculated
pursuant to the method for determining a bonus amount under the Annual Incentive Programs (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.

     Section 6.04. Annual Incentive Programs. The Annual Incentive Programs are
the Timely Awards Program, Management Achievement Plan, the Incentive Compensation Plan, the
Incentive Management Achievement Plan and the Performance Achievement Plan of the Company.

     Section 6.05. Executive Benefit Service. An Executive’s Executive Benefit
Service is determined under (a) or (b) as appropriate, and subject to (c) and (d):

     (a) Executive Benefit Service is an Executive’s total years of Vesting Service under the ES
Pension Plan if:

          (l) the Executive was making the Maximum Contribution during each of those years; or

          (2) the use of the Executive Buy Back process has been authorized by the Committee and the
Executive:

- 11 -

 

                    (A) was making the Maximum Contribution during each of those years after the date he or she
first became an Executive and

                    (B) has complied with the provisions of the Executive Buy Back process (as set forth in
Appendix A) as to those years prior to his or her first becoming an Executive.

     (b) Otherwise, Executive Benefit Service is the Executive’s period of Vesting Service during
which he or she made the Maximum Contribution.

     (c) No service before March 1, 1996 is taken into account under this Article.

     (d) Notwithstanding the foregoing, for an Executive terminating employment with the Affiliated
Companies after 2004, Executive Benefit Service accruals after 2004 equal (1) minus (2) below:

               (1) Elapsed time while the Executive was making the Maximum Contributions, including time
purchased under the Executive Buy Back process (as set forth in Appendix A);

               (2) Executive Benefit Service accrued as of December 31, 2004.

          All amounts accrued as a result of this change shall be subject to Code section 409A.

ARTICLE 7

Payment of Benefits

     Section 7.01. Limitation on Benefits. No benefits will be payable under this
Plan to any Executive whose employment terminates for any reason other than death prior to becoming
Retirement Eligible.

     Section 7.02. Normal Form and Commencement of Benefits. This Section only
applies to Grandfathered Amounts. The Executive Pension Supplement will be paid for life in
monthly installments, each equal to l/12th of the annual amount determined in Article 4 or 5,
whichever is applicable.

     (a) The Committee will determine the form and commencement of benefit payments in its sole
discretion.

     (b) The Committee will choose among the various forms of payment, other than the lump sum,
then available under the ES Pension Plan, subject to the same reductions or other provisions that
apply to the elected form of payment under the ES Pension Plan.

     (c) No payments may commence under this Plan until payments to the Executive or Surviving
Spouse have commenced under the ES Pension Plan or other tax-qualified defined

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benefit plan or Defined Contribution Plan maintained by a Participating Company or Designated Entity.

See Appendix D and Appendix E for the rules that apply to other benefits earned under the Plan.

     Section 7.03. Guaranteed Benefit. This Section only applies to Grandfathered
Amounts. Regardless of the form of payment elected by the Committee, after the Executive retires
and begins receiving an Executive Pension Supplement, a minimum of 60 times the monthly payment he
or she would have received on a life annuity basis is guaranteed.

See Appendix D and Appendix E for the rules that apply to other benefits earned under the Plan.

     Section 7.04. Guaranteed Surviving Spouse Benefit. This Section only applies
to Grandfathered Amounts. Once a Surviving Spouse Benefit determined under Sections 5.01 and 5.02
has commenced, a minimum of 60 times the monthly benefit payable to the Surviving Spouse is
guaranteed. See Appendix D and Appendix E for distribution rules that apply to death benefits that
are not Grandfathered Amounts

     Section 7.05. Lump Sum Payments. This Section only applies to Grandfathered
Amounts. An Executive who elects lump sum payments of all his or her nonqualified benefits under
the 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
(collectively, the “CIC Plans”) is entitled to have his or her Executive Pension Supplement paid as
a lump sum calculated under the terms of the applicable CIC Plan. Otherwise, Executive Pension
Supplement payments are governed by the general provisions of this Article, which do not provide
for lump sum payments.

     The Company may, in its sole discretion, amend or eliminate any provision of the Plan with
respect to lump sum distributions at any time. This applies whether or not a Participant has
already made a lump sum election.

See Appendix D and Appendix E for the rules that apply to other benefits earned under the Plan

     Section 7.06. Mandatory Cashout. Notwithstanding any other provisions in the
Plan, Executives 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. Executives who have a complete termination of employment
with the Affiliated Companies after 2007 will receive a lump sum distribution of the present value
of their Grandfathered Amounts within two months of such termination (without interest), if such
present value is below the Code section 402(g) limit in effect at the termination.

     (b) Pre-2008 Terminations. Executives who had a complete termination of employment
with the Affiliated Companies 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.

- 13 -

 

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.

     Section 7.07. Optional Payment Forms. Executives 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 this 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% 		
	 
	 	 	 	 
	Mortality Table:

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

     Section 7.08. Rehires. In the event that an Executive retires or otherwise
ceases to be an Employee of a Participating Company or a Designated Entity and is later rehired by
one of those entities, the provisions of Appendix B will apply.

     Section 7.09. Special Tax Distribution. On the date an Executive’s retirement
benefit is reasonably ascertainable within the meaning of IRS regulations under Code section
3121(v)(2), an amount equal to the Executive’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 payment will reduce the Executive’s future benefit
payments under the Plan on an actuarial basis.

ARTICLE 8

Conditions to Receipt of Executive Pension Supplement

     Section 8.01. Non-Competition Condition. Payments of benefits under this Plan
to Executives are subject to the condition that the recipient will not compete with the Company.

     (a) Competition for this purpose means engaging directly or indirectly in any business
which is at the time competitive with any business, part of a business, or activity then conducted
by the Company, any of its subsidiaries or any other corporation, partnership, joint venture or
other entity of which the Company directly or indirectly holds a 10% or greater

- 14 -

 

interest (together, the “Affiliated Group”) in the area in which such business, part of a
business, or activity is then being conducted by the Affiliated Group.

     (b) The condition of this Section may be waived with respect to a recipient but only in
writing and only by the Compensation Committee of the Board.

     Section 8.02. Breach of Condition. Breach of the condition contained in
Section 8.01 will be deemed to occur immediately upon an Executive’s engaging in competitive
activity.

     (a) Payments suspended for breach of the condition will not be resumed whether or not the
Executive terminates the competitive activity.

     (b) A recipient will be deemed to be engaged in such a business indirectly if he or she is an
employee, officer, director, trustee, agent or partner of, or a consultant or advisor to or for, a
person, firm, corporation, association, trust or other entity which is engaged in such a business
or if he or she owns, directly or indirectly, in excess of 5% of any such firm, corporation,
association, trust or other entity.

     Section 8.03. Waiver After 65. The ongoing condition of this Article will not
apply to an Executive age 65 or older.

ARTICLE 9

Administration

     Section 9.01. Committee. This Plan will be administered by the Committee. The
Committee will have the right to make reasonable rules from time to time regarding the Plan. All
such rules will be consistent with the policy provided by this Plan document. The Committee will
have full discretion to interpret the Plan, and to resolve ambiguities and inconsistencies. The
Committee’s interpretations will in all cases be final and not be subject to appeal.

     Section 9.02. Claims Procedures. The Company’s standardized “Huntington
Ingalls Industries Nonqualified Retirement Plans Claims and Appeals Procedures” shall apply in
handling claims and appeals under this Plan.

     Section 9.03. Trust. The Board may authorize the establishment of one or more
trusts and the appointment of a trustee or trustees (“Trustee”) to hold any and all assets of the
Plan in trust. The Board may delegate this power to the Committee.

- 15 -

 

ARTICLE 10

Modification or Termination

     Section 10.01. 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 an Executive has already made a lump sum election. Notwithstanding the foregoing, no amendment
or termination of the Plan shall reduce the amount of an Executive’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.

ARTICLE 11

Miscellaneous

     Section 11.01. Benefits Not Assignable.

     (a) No Executive, former Executive or Surviving Spouse shall have the right to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or otherwise subject to lien any of the
benefits provided under this Plan. Such rights may not be subject to the debts, contracts,
liabilities, engagements or torts of the Executive, former Executive or Surviving Spouse of an
Executive.

     (b) Notwithstanding the foregoing, all or a portion of an Executive’s Plan benefits may be
paid to another person as specified in a domestic relations order that the Committee 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 Executive;

          (3) creates or recognizes the right of a spouse, former spouse, child or other dependent of
the Executive to receive all or a portion of the Executive’s benefits under the Plan; and

          (4) meets such other requirements established by the Committee.

- 16 -

 

          The Committee shall determine whether any document received by it is a Qualified Domestic
Relations Order. In making this determination, the Committee 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.

     Section 11.02. Facility of Payment. If the Committee deems any person
entitled to receive any payment under the Plan incapable of receiving it by reason of age, illness,
infirmity, mental incompetency or incapacity of any kind, the Committee may, in its discretion,
direct that payment be made in any one or more of the following manners:

     (a) Applying the amount directly for the comfort, support and maintenance of the payee;

     (b) Reimbursing any person for any such support supplied by any other person to the payee;

     (c) Paying the amount to a legal representative or guardian or any other person selected by
the Committee on behalf of the payee; or

     (d) Depositing the amount in a bank account to the credit of the payee.

     Section 11.03. Committee Rules. Payment of benefits will be made in
accordance with the rules and procedures of the Committee.

     Section 11.04. Limitation on Rights. The Company, in adopting this Plan,
will not be held to create or vest in any Executive or any other person any interest, pension or
benefits other than the benefits specifically provided herein, or to confer upon any Executive the
right to remain in the service of the Company.

     Section 11.05. Benefits Unsecured. Any assets purchased by the Company to
provide benefits under this Plan will at all times remain subject to the claims of general
creditors of the Company and any Executive, former Executive or Surviving Spouse of an Executive
participating in the Plan has only an unsecured promise to pay benefits from the Company.

     Section 11.06. Governing Law. To the extent not preempted by federal law,
the law of the State of Delaware will govern the construction and administration of the Plan.

     Section 11.07. Severability. If any provision of this Plan or its
application to any circumstance or person is held to be invalid by a court of competent
jurisdiction, the remainder of the Plan and the application of such provision to other
circumstances or persons will not be affected thereby.

     Section 11.08. Expanded Benefits. The Board or the Compensation Committee
of the Board may, from time to time and without notice, by resolution of the Board or of the
Compensation Committee of the Board, authorize the
payment of benefits or expand the benefits otherwise payable or to be payable to any one or more
individuals. Notwithstanding the foregoing, this Section 11.08 shall not apply to any benefits
under the Plan that are not Grandfathered Amounts.

- 17 -

 

     Section 11.09. Plan Costs. Benefits payable under the Plan and any expenses
in connection therewith will be paid by the Company to the extent they are not available to be paid
from any trust fund established by the Company to help defray the costs of providing Plan benefits.

     Section 11.10. Termination of Participation. Participation in the Plan will
terminate:

     (a) in the case of a nonvested Executive, upon separation from service with a Participating
Company or Designated Entity;

     (b) in the case of a vested Executive, when payment of all amounts due with respect to the
Executive are paid, or purported to be paid, by the Plan.

ARTICLE 12

Change in Control

     Section 12.01. Definition. The term “Change in Control” means the
occurrence of one or more of the following events:

     (a) There will be consummated:

          (1) Any consolidation or merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the Company’s common stock would be converted
into cash, securities or other property, other than a merger of the Company in which the holders of
the Company’s common stock immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger; or

          (2) Any sale, lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or

     (b) The stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or

     (c) (1) Any person (as such term is defined in section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), corporation or other entity will purchase any common stock
of the Company (or securities convertible into Company common stock) for cash, securities or any
other consideration pursuant to a tender offer or exchange offer, unless, prior to the making of
such purchase of Company common stock (or securities convertible into Company common stock), the
Board will determine that the making of such purchase will not constitute a Change in Control; or

          (2) Any person (as such term is defined in section 13(d) of the Exchange Act), corporation or
other entity (other than the Company or any benefit plan sponsored by the
Affiliated Companies) will become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Exchange Act:), directly or indirectly, of securities of the Company representing

- 18 -

 

twenty percent or more of the combined voting power of the Company’s then outstanding securities
ordinarily (and apart from any rights accruing under special circumstances) having the right to
vote in the election of directors (calculated as provided in Rule 13d-3(d) in the case of rights to
acquire any such securities), unless, prior to such person so becoming such beneficial owner, the
Board will determine that such person so becoming such beneficial owner will not constitute a
Change in Control; or

     (d) At any time during any period of two consecutive years, individuals who at the beginning
of such period constituted the entire Board will cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for election of each new director during
such two-year period was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such two-year period.

     Section 12.02. Vesting and Funding Rules. Notwithstanding any other
provision of the Plan, upon a Change in Control, as defined above, all Executives will be deemed
fully vested under this Plan, but only such vesting as to the otherwise applicable five-year
service requirement. In addition, upon a Change in Control, but only under circumstances where the
successor, surviving or parent company of Huntington Ingalls Industries, Inc. or the successor plan
sponsor or any successor thereto, if any, does not agree to assume the obligation to provide
benefits under this Plan as they become due and payable, then an amount sufficient to fund all
unpaid benefits and any Surviving Spouse benefits payable under this Plan will be paid immediately
by the Company to a Trustee pursuant to a Trust Agreement for the payment of such benefits at the
earliest date available in accordance with the provisions of the Plan and on such terms as the
committee composed of the Company’s Chief Executive Officer, Chief Financial Officer and General
Counsel, will deem appropriate (including a direction to the Trustee to pay immediately all
benefits that are Grandfathered Amounts on a present value basis and/or such other terms as they
may deem appropriate). Notwithstanding this funding, the Company will be obligated to pay benefits
to Executives and to Surviving Spouses of Executives to the extent such funding proves to be
insufficient. To the extent such funding proves to be more than sufficient, any excess will revert
to the Company.

     Section 12.03. Special Retirement Provisions. Upon a Change in Control, for
any Executive in the Plan who is involuntarily separated and who is not then eligible for a Normal
or Special Retirement Pension under the ES Pension Plan, such separation will be deemed to be a
separation due to a “Permanent Job Separation”, and the Special Retirement Pension provisions under
the ES Pension Plan will be used for purposes of determining eligibility and payment of benefits to
such Executive under the Plan, provided that distribution of amounts that are not Grandfathered
Amounts will still be controlled by Appendix D and Appendix E.

     Section 12.04. Calculation of Present Value. The present value of benefits
payable by the Trustee will be calculated for specific groups of Executives at the time of the
Change in Control as follows:

     (a) The present value of the benefits payable from this Plan to Executives who have retired at
the time of the Change in Control (as well as benefits payable from this Plan to any Surviving
Spouse of an Executive) will be calculated by using the PBGC immediate discount

- 19 -

 

rate established and in effect for the beginning of the calendar year in which the Change in
Control occurs.

     (b) The present value of the benefits payable from this Plan to Executives who are eligible to
retire under the terms of this Plan at the time of the Change in Control will be calculated by
using the PBGC immediate discount rates established and in effect at the beginning of the calendar
year in which the Change in Control occurs, assuming a pension which is immediately payable at the
time of the Change in Control.

     (c) The present value of the benefits payable from this Plan to Executives who have completed
at least 30 years of service with a Participating Company or a Designated Entity but have not yet
attained age 58 at the time of the Change in Control will be calculated by using the PBGC deferred
discount rates established and in effect for the beginning of the calendar year in which the Change
in Control occurs, assuming a pension which is payable at age 58.

     (d) The present value of benefits payable from this Plan to Executives who have completed at
least 10 years of service with a Participating Company or a Designated Entity but less than 30
years of service at the time of the Change in Control, but have not yet attained age 60 at the time
of the Change in Control, will be calculated by using the PBGC deferred discount rates established
and in effect for the beginning of the calendar year in which the Change in Control occurs,
assuming a pension which is payable at age 60.

     (e) The present value of benefits payable from this Plan to Executives who have completed less
than 10 years of service with a Participating Company or a Designated Entity at the time of the
Change in Control will be calculated by using the PBGC deferred discount rates established and in
effect for the beginning of the calendar year in which the Change in Control occurs, assuming a
pension which is payable at age 65.

     Section 12.05. Calculation of Offset. In calculating the benefit payable
to each Executive, any offset for the ES Pension Plan or other plan in which the Executive
participates, will be based upon the last official pension file data available, adjusted to the
date of any Change in Control by assuming that the most recent salary reflected in the pension file
remains constant.

     Section 12.06. Limitation on Amendment, Suspension and Termination.
Notwithstanding any provision of this Plan, this Plan may not be:

     (a) Amended such that future benefits would be reduced;

     (b) Suspended; or

     (c) Terminated;

as to the further accrual of benefits, for a period of 24 months following a Change in Control; and
as to the payment of benefits, at any time prior to the last payment, determined in accordance
with the provisions of this Plan, to each Executive, former Executive receiving benefits under the
Plan, or eligible spouse.

* * *

- 20 -

 

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

	 	 	 	 	 
	 	HUNTINGTON INGALLS INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

- 21 -

 

	 	 	 	 	 

APPENDIX A

Executive Buyback

     Section A.01. Introduction. The Executive Buy Back process permits newly
eligible Executives to “buy back” past years of Executive Benefit Service under the Plan for
periods of time during which they did not make the Maximum Contribution.

     Section A.02. Buy Back Offer. If an Employee did not make the Maximum
Contribution during each of the years of his or her Vesting Service prior to the time he or she
first became an Executive, the Employee will be permitted to pay make-up payments of Maximum
Contributions in order to “buy back” his or her non-contributory years of service.

     (a) The make-up payments required are the Maximum Contributions that would have been payable
during the 10 years prior to the date he or she first became an Executive (or such lesser period
from the date the Employee was employed by a Participating Company or a Designated Entity) plus
compounded interest on those amounts.

     (b) This Plan is intended as essentially a continuation of the Westinghouse Plan (see Appendix
C). Accordingly, this Section is to be interpreted as requiring an Executive to make up Maximum
Contributions not only for his or her periods of participation under this Plan but also Maximum
Contributions that would have been due under the Westinghouse Plan. The terms of (a) will be
interpreted to include the corresponding terms under the Westinghouse Plan and the 10-year period
will include periods before the Westinghouse Acquisition.

     Section A.03. One-Time Opportunity. Upon qualifying as an Executive, an
Executive will be offered an Executive Buy Back opportunity at the time he or she first becomes an
Executive (or when this Appendix first becomes effective, if later). The actual terms of the
Executive Buy Back will be determined from time to time by the Committee. This election will be
offered one time to the Executive and his or her decision whether or not to “buy back” will be
irrevocable.

     Section A.04. Payment. Executive Buy Back payments are pre-tax and are made
from compensation by deferral elections entered into prior to the year in which the compensation is
determined and paid. Executive Buy Back payments will not be deposited into the ES Pension Plan
trust and will not increase the Executive’s Qualified Plan Benefit.

     Section A.05. Refund of Buy Back Payment. If, at some point, an Employee is
no longer an Executive or otherwise becomes ineligible to receive an Executive Pension Supplement,
any Executive Buy Back payments the Employee has made (including any interest the Employee paid)
plus any other amount as defined in Section 2.16(b)(2) in the definition of Maximum Contribution
paid by the Employee to the Company will be refunded, with interest at such time as the Employee
meets one of the following criteria:

     (a) Termination or retirement from a Participating Company or a Designated Entity; or

     (b) Death;

- 22 -

 

provided, however, no refund will be made if the Employee is an eligible Executive, whether or not
the amount of his or her Executive Pension Supplement exceeds zero. All interest rates will be
determined at the discretion of the Committee.

Any amounts that are refundable under this Section A.05 that are not Grandfathered Amounts will be
paid in a lump sum upon the Executive’s Separation from Service, subject to the six-month delay
rule in Section E.02.

     Section A.06. Effective Date. The provisions of this Appendix permitting Buy
Backs will become effective on a date specified by resolution of the Committee specifically citing
this Section.

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APPENDIX B

Rehired Executives

     Section B.01. Retired Executives Rehired as Executives. If an Executive who
retired from a Participating Company or a Designated Entity and who received or is receiving an
Executive Pension Supplement as a lump sum or on a monthly basis is rehired in an Executive
position by a Participating Company, Designated Entity, or any other Affiliated Company, the
following provisions apply:

     (a) Monthly Payments: For an Executive with a monthly Executive Pension Supplement:

          (1) The Plan will suspend all Executive Pension Supplement payments that are Grandfathered
Amounts;

          (2) If, but only if, the Executive is Retirement Eligible at the time of subsequent actual
retirement:

               (A) Previous years of Vesting Service and Executive Benefit Service accrued prior to the
Executive’s retirement will be restored; and

               (B) The Executive’s Executive Pension Supplement will be recalculated in accordance with the
Plan at his or her subsequent actual retirement date as long as the Executive then meets all Plan
benefit qualification requirements;

          (3) The Executive, having previously met the requirement of five years of continuous service
as an Executive prior to his or her first retirement, need not again meet that requirement;

          (4) The Executive’s Average Annual Compensation will be computed without regard to the break
in service, using zero for any periods during which the Executive was a retiree;

          (5) If the Executive elected to take a lump sum Qualified Plan Benefit with respect to his or
her initial retirement, then in any subsequent calculation of the Executive’s Executive Pension
Supplement, the Executive’s Executive Pension Base will be reduced by both the Executive’s
Qualified Plan Benefit received at the time of the initial retirement and the Executive’s Qualified
Plan Benefit accrued from the date of rehire through the date of his or her subsequent retirement.

          (6) If the Executive continued to receive payments that were not Grandfathered Amounts during
the period of rehire, an actuarial reduction will apply at his subsequent termination.

     (b) Lump Sums: For an Executive who received a lump sum Executive Pension Supplement
and who is Retirement Eligible at the time of subsequent actual retirement:

- 24 -

 

          (1) Previous years of Vesting Service will be restored but not previous years of Executive
Benefit Service;

          (2) The Plan will calculate the Executive’s additional Executive Pension Supplement at his or
her subsequent actual retirement date on the basis of years of service after the rehire in
accordance with the Plan as the Executive then meets all Plan benefit qualification requirements;

          (3) The Executive, having previously met the requirement of five years of continuous service
as an Executive prior to his or her first retirement, need not again meet that requirement;

          (4) The Executive’s Average Annual Compensation will be computed without regard to the break
in service, using zero for any periods during which the Executive was a retiree;

          (5) If the Executive elected a monthly Qualified Plan Benefit with respect to his or her
initial retirement, then the Executive’s Qualified Plan Benefit accrued from the date of rehire
through the subsequent date of actual retirement will be subtracted from the Executive’s Executive
Pension Base in calculating the Executive’s additional Executive Pension Supplement at his or her
subsequent retirement.

     Section B.02. Former Executives with Vested Pensions Rehired as Executives.
If the employment of an Executive of a Participating Company or a Designated Entity who was
eligible only for a vested pension under the relevant qualified defined benefit or Defined
Contribution Plan, if any, was terminated and the Executive is rehired by a Participating Company,
Designated Entity, or any other Affiliated Company, the following provisions apply:

     (a) Previous years of Vesting Service and Executive Benefit Service accrued prior to the
Executive’s termination of employment will be restored;

     (b) The Executive must meet the requirement of five years of continuous service as an
Executive prior to a subsequent actual retirement, counting only years of service after the rehire;

     (c) Only base salary and incentive awards earned after the rehire will be used in computing
Average Annual Compensation;

     (d) If the Executive elected to take his or her vested pension as a lump sum, in any
calculation of an Executive Pension Supplement at actual retirement, the Executive’s Executive
Pension Base will be reduced by both the Executive’s Qualified Plan Benefit at the time of the
initial termination of employment and the Executive’s Qualified Plan Benefit accrued from the date
of rehire through the date of actual retirement.

     Section B.03. Retired Executives Rehired in Non-Executive Positions. If an
Executive who retired from a Participating Company or a Designated Entity and who received or is
receiving an Executive Pension Supplement as a lump sum or on a monthly basis is rehired by a

- 25 -

 

Participating Company, Designated Entity, or any other Affiliated Company in a non-Executive
position, the following provisions apply:

     (a) For a former Executive who was receiving a monthly Executive Pension Supplement:

          (1) The Plan will suspend all Executive Pension Supplement payments that are Grandfathered
Amounts;

          (2) If, but only if, the former Executive is still Retirement Eligible at the time of
subsequent actual retirement, the Plan will recommence Executive Pension Supplement payments that
were suspended at the time of the Executive’s subsequent actual retirement without recalculation of
amount;

          (3) At subsequent actual retirement, the former Executive may receive any form of payment of
his or her Executive Pension Supplement then permitted under the Plan, as selected by the
Committee.

     (b) For a former Executive who received his or her Executive Pension Supplement as a lump sum,
no further benefits will be paid by the Plan.

     Section B.04. Events That Span Westinghouse Acquisition. This Plan is
intended as essentially a continuation of the Westinghouse Plan (see Appendix C) and this Appendix
is to be interpreted accordingly.

     (a) Reductions for payments of Qualified Plan Benefits will be interpreted to include
reductions for payments of similar benefits under Westinghouse plans.

     (b) Determination of the form of Qualified Plan Benefits will take into account the form of
payments under Westinghouse plans.

     (c) The terms of this Appendix will be interpreted, where appropriate, to include the
corresponding terms under the Westinghouse Plan and to take into account events both before and
after the Westinghouse Acquisition.

     Section B.05. Breaks Spanning March 1, 1996. There may be Executives who
participated in the Westinghouse Plan but because of a break in their service did not become
employees of the Affiliated Companies on March 1, 1996 as a result of the Westinghouse Acquisition.

     (a) Those Executives might be hired later by the Electronic Sensors & Systems Division.

     (b) They will in no case be entitled to service or compensation credits or benefits under this
Plan with respect to any service or compensation prior to their first hire by the Electronic
Sensors & Systems Division after March 1, 1996. The Executives will not be
considered to have previously met the requirement of five years of continuous service as an
Executive.

- 26 -

 

APPENDIX C

Coordination With Westinghouse Plan

     Section C.01. In General. As part of the Westinghouse Acquisition, this Plan
was established by Northrop Grumman Corporation. As of the Distribution Date, the Company replaces
Northrop Grumman Corporation for purposes of this Appendix.

     (a) This Plan is intended to be a continuation of the Westinghouse Plan with only minor
changes.

     (b) This Plan assumes remaining liabilities of the Westinghouse Plan with regard to those
participants of the Westinghouse Plan who became Employees of the Northrop Grumman controlled group
on March 1, 1996 as a result of the Westinghouse Acquisition. Accordingly, benefits earned by
Participants of this Plan under the Westinghouse Plan before March 1, 1996 are payable under this
Appendix.

     (c) Employees first hired after the Westinghouse Acquisition will therefore not be affected by
this Appendix and will have their pension benefits governed entirely by the other Articles and
Appendices of this Plan.

     Section C.02. Pre-Acquisition Benefits.

     (a) Except as provided in Sections C.03 and C.04, benefits earned under the Westinghouse
Executive Pension Plan are in addition to the benefits which may be earned under Articles 4 and 5.

     (b) The Westinghouse Plan benefits will be calculated taking into account all pertinent facts
for determining benefits under the Westinghouse Plan’s provisions (including benefits and
contributions under Westinghouse plans) as they have existed from time to time.

     Section C.03. Coordination of Pre and Post-Acquisition Benefits. The Plan
will be interpreted in light of events before and after the Westinghouse Acquisition to coordinate
the calculation of benefits (including service and compensation components, benefits and
contributions under Westinghouse plans and rehire provisions) under this Appendix and benefits
based on Articles 4 and 5 so that the Plan will function as if it were essentially a continuation
of the Westinghouse Plan.

     Section C.04. No Duplication of Benefits. Because this Plan is intended as a
continuation of the Westinghouse Plan, this Plan will not pay any benefits already paid or payable
by the Westinghouse Plan itself.

- 27 -

 

APPENDIX D

2005-2007 Transition Rules

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

     Section D.01. Election. Executives 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. Executives electing optional forms of
benefits under this provision will commence payments on the Executive’s selected benefit
commencement date.

     Section D.02. 2005 Commencements. Pursuant to IRS Notice 2005-1, Q&A-19 &
Q&A-20, Executives 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 Executive.

     (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:

          (1) In order to elect a lump sum payment pursuant to IRS Notice 2005-1, Q&A-20, an Executive
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;

          (2) The lump sum payment shall be made in 2005 as soon as feasible after the election; and

          (3) 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.

     Section D.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),

- 28 -

 

distribution of Plan benefits subject to Code section 409A shall begin 12 months after the later
of: (a) the Executive’s benefit election date, or (b) the underlying qualified pension plan
benefit commencement date (as specified in the Executive’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).

- 29 -

 

APPENDIX E

Post 2007 Distribution of 409A Amounts

     The provisions of this Appendix E 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 Article VII, and
Appendix D addresses distributions of amounts subject to Code section 409A with benefit
commencement dates after January 1, 2005 and prior to January 1, 2008

     Section E.01. Time of Distribution. Subject to the special rules provided in
this Appendix E, distributions to an Executive of his vested retirement benefit shall commence as
of the Payment Date.

     Section E.02. Special Rule for Key Employees. If an Executive is a Key
Employee and age 55 or older at his Separation from Service, distributions to the Executive 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 Executive’s death). Amounts otherwise payable to the Executive
during such period of delay shall be accumulated and paid on the first day of the seventh month
following the Executive’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).

     Section E.03. Forms of Distribution. Subject to the special rules provided in
this Appendix E, an Executive’s vested retirement benefit shall be distributed in the form of a
single life annuity. However, an Executive 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 an Executive 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

     Section E.04. Death. If a married Executive dies before the Payment Date, a
death benefit will be payable to the Executive’s spouse
commencing 90 days after the Executive’s death. The death benefit will be a single life
annuity in an amount equal to the survivor portion of an Executive’s vested retirement benefit
based on a 100% joint and survivor annuity determined on the Executive’s date of death. This
benefit is also payable to an Executive’s

- 30 -

 

domestic partner who is properly registered with the Company in accordance with procedures
established by the Company.

     Section E.05. Actuarial Assumptions. Except as provided in Section E.06, all
forms of payment under this Appendix E 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

     Section E.06.
Accelerated Lump Sum Payouts.

     (a) Post-2007 Separations. Notwithstanding the provisions of this Appendix E, for
Executives who Separate from Service on or after January 1, 2008, if the present value of (a) the
vested portion of an Executive’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 Executive (or his
spouse or domestic partner, if applicable) in a lump sum payment. Subject to the special timing
rule for Key Employees under Section E.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 Executive’s Separation from
Service.

     (b) Pre-2008 Separations. Notwithstanding the provisions of this Appendix E, for
Executives who Separate from Service before January 1, 2008, if the present value of (a) the vested
portion of an Executive’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 Executive attains age 55, is less than
or equal to $25,000, such benefit amount shall be distributed to the Executive (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 Executive attains age 55, but no earlier that January 1,
2008.

     (c) Conflicts of Interest. The present value of an Executive’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 an Executive’s retirement benefit
into a lump sum payment and the present value calculations under this Section E.06 shall be based
on the actuarial assumptions in effect under the Huntington Ingalls Industries Pension Plan for
purposes of calculating lump sum amounts, and will be based on the Executive’s immediate
benefit if the Executive is 55 or older at Separation from Service. Otherwise, the
calculation will be based on the benefit amount the Executive will be eligible to receive at age
55.

- 31 -

 

     Section E.07. Effect of Early Taxation. If the Executive’s benefits under the
Plan are includible in income pursuant to Code section 409A, such benefits shall be distributed
immediately to the Executive.

     Section E.08. Permitted Delays. Notwithstanding the foregoing, any payment to
an Executive 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 E.08 shall be paid in accordance
with Code section 409A.

- 32 -

 

APPENDIX F

Northrop Grumman Spin-Off

     Section F.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 Electronic Systems Executive Pension 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.

     Section F.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, including for purposes of Appendix B.

     Section F.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.

     Section F.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, or to have experienced a Change in Control, for purposes of
determining the right to a distribution (for amounts subject to Code section 409A or otherwise),
vesting (including under section 3.01(d)), 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.

     Section F.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.

     Section F.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.

     Section F.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

- 33 -

 

obligation or liability to any NGC Participant with respect to any benefit, amount, or right due
under the NGC Plan.

- 34 -

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