EXHIBIT 10.1

EMPLOYEE MATTERS AGREEMENT

among

NORTHROP GRUMMAN CORPORATION,

NEW P, INC.,

and

HUNTINGTON INGALLS INDUSTRIES, INC.

Dated as of [__________]

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			1
Section 1.1 Table of Definitions			1
Section 1.2 Certain Defined Terms			2
Section 1.3 Other Capitalized Terms			5
ARTICLE II GENERAL PRINCIPLES; EMPLOYEE TRANSFERS			5
Section 2.1 Assumption of HII Employee Liabilities			5
Section 2.2 Allocation of Liabilities With Respect to Benefit Plans and Employment Agreements			5
Section 2.3 HII Benefit Plans and HII Employment Agreements			6
Section 2.4 Plan-Related Litigation			6
Section 2.5 Vacation and Sick Pay			7
Section 2.6 Employee Transfers			7
Section 2.7 Annual Bonuses			7
ARTICLE III SERVICE CREDIT			7
Section 3.1 Service Credit for Employee Transfers			7
Section 3.2 HII Benefit Plans			8
ARTICLE IV CERTAIN WELFARE BENEFIT PLAN MATTERS			8
Section 4.1 HII Retained Welfare Plans			8
Section 4.2 HII Spinoff Welfare Plans			9
Section 4.3 Continuation of Elections			9
Section 4.4 Deductibles and Other Cost-Sharing Provisions			9
Section 4.5 Flexible Spending Account Treatment			9
Section 4.6 Health Reimbursement Arrangement Treatment			9
Section 4.7 Workers’ Compensation			10
ARTICLE V TAX-QUALIFIED DEFINED BENEFIT PLANS			10
Section 5.1 HII Retained Defined Benefit Plans			10
Section 5.2 HII Spinoff DB Plans			10
Section 5.3 Continuation of Elections			12
ARTICLE VI U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS			13
Section 6.1 HII Retained Defined Contribution Plans			13
Section 6.2 HII Spinoff DC Plans			13

TABLE OF CONTENTS
(Continued)

		Page
Section 6.3 Continuation of Elections			14
Section 6.4 Contributions Due			15
ARTICLE VII NONQUALIFIED RETIREMENT PLANS			15
Section 7.1 HII Retained Nonqualified Plans			15
Section 7.2 HII Spinoff Nonqualified Plans			15
Section 7.3 No Distributions On Separation			17
Section 7.4 Section 409A			17
Section 7.5 Continuation of Elections			17
Section 7.6 Delayed Transfer Employees			17
ARTICLE VIII NEW NGC EQUITY COMPENSATION AWARDS			18
Section 8.1 General Treatment of Outstanding New NGC Equity Compensation Awards			18
Section 8.2 Tax Withholding and Reporting			19
Section 8.3 Tax Deductions			19
ARTICLE IX BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS			19
Section 9.1 General Principles			19
Section 9.2 Benefit Plan Third-Party Claims			20
ARTICLE X COOPERATION			20
Section 10.1 Cooperation			20
ARTICLE XI MISCELLANEOUS			21
Section 11.1 Vendor Contracts			21
Section 11.2 Further Assurances			21
Section 11.3 Employment Tax Reporting Responsibility			21
Section 11.4 Data Privacy			21
Section 11.5 Employee Badges			21
Section 11.6 Third Party Beneficiaries			21
Section 11.7 Effect if Distribution Does Not Occur			22
Section 11.8 Incorporation of Separation Agreement Provisions			22
Section 11.9 No Representation or Warranty			22

EMPLOYEE MATTERS AGREEMENT

     EMPLOYEE MATTERS AGREEMENT, dated as of [____________] (this “ Employee Matters Agreement ”), among Northrop Grumman Corporation, a Delaware corporation (“ NGC ”), New P, Inc., a Delaware corporation (“ New NGC ”), and Huntington Ingalls Industries, Inc., a Delaware corporation (“ HII ”).

RECITALS

     A. The parties to this Employee Matters Agreement, together with certain Subsidiaries of NGC, have entered into the Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of the date hereof, pursuant to which New NGC intends to distribute to its stockholders its entire interest in HII by way of a stock dividend.

     B. The parties wish to set forth their agreements as to certain matters regarding employment, compensation and employee benefits.

     Section 1.2 Certain Defined Terms . For the purposes of this Employee Matters Agreement:

          “ Benefit Plan ” means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, including any “employee benefit plan” (as defined in Section 3(3) of ERISA) sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no New NGC Equity Compensation Award, nor any plan under which any such New NGC Equity Compensation Award is granted, shall constitute a “Benefit Plan” under this Employee Matters Agreement. In addition, no Employment Agreement shall constitute a Benefit Plan for purposes hereof.

          “ Employment Agreement ” means any individual employment, retention, consulting, change in control, split dollar life insurance, sale bonus, incentive bonus, severance or other individual compensatory agreement between any current or former employee and NGC or any of its Affiliates or a member of the New NGC Group or the HII Group.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

          “ HII Benefit Plans ” means the HII Retained Benefit Plans and the HII Spinoff Plans.

          “ HII Employee ” means each individual who, as of the Distribution, is employed by a member of the HII Group (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid, from which such employee is permitted to return (in accordance with HII’s personnel policies)).

          “ HII Employee Liabilities ” means all potential or actual employment and employee benefits-related or other Liabilities, whether arising before, on or after the Distribution Date, with respect to: (a) HII Employees and HII Retirees and any other persons employed by the HII Group (and their respective Plan Payees, including, without limitation, for any deferred vested benefits under any Benefit Plan); (b) any other individuals asserting rights or obligations stemming from their services to or in connection with the Shipbuilding Business; (c) HII Employment Agreements; and (d) the HII Benefit Plans (including, for avoidance of doubt, Liabilities that arise or are alleged to have arisen prior to Distribution under a Split Plan from which an HII Spinoff Plan assumed Liabilities hereunder).

          “ HII Employment Agreement ” means any Employment Agreement to which any member of the HII Group is a party and to which no member of the New NGC Group or NGC is a party. The HII Employment Agreements shall be the sole responsibility of one or more members of the HII Group following the Distribution.

          “ HII Group ” is defined in the Separation Agreement, but for convenience is duplicated here, provided that the definition in the Separation Agreement controls. HII Group means HII and each Person that will be a direct or indirect Subsidiary of HII immediately prior to the Distribution (but after giving effect to the Internal Reorganization) and each Person that is or becomes a member of the HII Group after the Distribution, including in all circumstances the predecessor and successor entities of each such Person. For the purposes of this Employee Matters Agreement, (a) New NGC shall not be deemed to be a successor entity of NGC and (b) NGC shall not be deemed to be a member of the HII Group.

          “ HII Retained Benefit Plan ” means any Benefit Plan that, as of the Distribution, is sponsored or maintained solely by any member of the HII Group. HII Retained Benefit Plan shall also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of the HII Group contributes for the benefit of its employees. For the avoidance of doubt, no member of the HII Group shall be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to New NGC any reimbursement in respect of such Benefit Plan. The HII Retained Benefit Plans (excluding any multiemployer plans) shall be sponsored solely by one or more members of the HII Group following the Distribution.

          “ HII Retiree ” means each former employee of NGC or its Affiliates (or the predecessors thereof), including, without limitation, any such individual with deferred

vested benefits under any Benefit Plan, whose last employment prior to the Distribution was with the HII Group or the Shipbuilding Business.

          “ HII Spinoff Plans ” means the HII Spinoff DB Plans, HII Spinoff DC Plans, HII Spinoff Nonqualified Plans and HII Spinoff Welfare Plans.

          “ HII Welfare Plan ” means each HII Benefit Plan that is a Welfare Plan.

          “ New NGC Benefit Plan ” means any Benefit Plan sponsored or maintained by any member of the New NGC Group or NGC. New NGC Benefit Plan shall also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of the New NGC Group or NGC contributes for the benefit of its employees. For the avoidance of doubt, no member of the New NGC Group shall be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to HII any reimbursement in respect of such Benefit Plan. The New NGC Benefit Plans (excluding any multiemployer plans) shall be those Benefit Plans sponsored solely by one or more members of the New NGC Group following the Distribution.

          “ New NGC Employee Liabilities ” means all potential or actual employment and employee benefits-related or other Liabilities with respect to current employees and former employees of NGC and the New NGC Group, whether arising before, on or after the Distribution Date, but excluding any HII Employee Liabilities.

          “ New NGC Employment Agreement ” means any Employment Agreement to which any member of the New NGC Group or NGC is a party and to which no member of the HII Group (other than NGC) is or was a party or beneficiary. The New NGC Employment Agreements shall be the responsibility of one or more members of the New NGC Group following the Distribution.

          “ New NGC Group ” is defined in the Separation Agreement, but for convenience is duplicated here, provided that the definition in the Separation Agreement controls. New NGC Group means New NGC and each Person that will be a direct or indirect Subsidiary of New NGC immediately after the Distribution and each Person that is or becomes a member of the New NGC Group after the Distribution, including in all circumstances the predecessor and successor entities of each such Person. For the purposes of this Employee Matters Agreement, NGC shall not be deemed to be a predecessor entity of New NGC.

          “ New NGC Retiree ” means each former employee of NGC, any of its Affiliates and the New NGC Group, who is not an HII Retiree.

          “ New NGC Welfare Plan ” means each New NGC Benefit Plan that is a Welfare Plan.

          “ Plan Payee ” means, as to an individual who participates in a Benefit Plan, such individual’s dependents, beneficiaries, alternate payees and alternate recipients, as applicable under such Benefit Plan.

          “ Split Plans ” means the Split Welfare Plans, Split DB Plans, Split DC Plans and Split Nonqualified Plans.

          “ Welfare Plan ” means each Benefit Plan that provides life insurance, health care, dental care, vision care, employee assistance programs (EAP), accidental death and dismemberment insurance, disability, severance, vacation or other group welfare or fringe benefits and is an “employee welfare benefit plan” as described in Section 3(1) of ERISA.

          “ Workers’ Compensation Event ” means the event, injury, illness or condition giving rise to a workers’ compensation claim.

     Section 1.3 Other Capitalized Terms . Capitalized terms not defined in this Employee Matters Agreement shall have the meanings ascribed to them in the Separation Agreement.

ARTICLE II
GENERAL PRINCIPLES; EMPLOYEE TRANSFERS

     Section 2.1 Assumption of HII Employee Liabilities . Effective as of the Distribution, except as otherwise specifically provided in this Employee Matters Agreement, (i) the HII Group shall be solely responsible for all HII Employee Liabilities and the New NGC Group shall not retain any HII Employee Liabilities and (ii) the New NGC Group shall be solely responsible for all New NGC Employee Liabilities and the HII Group shall not retain any New NGC Employee Liabilities.

     Section 2.2 Allocation of Liabilities With Respect to Benefit Plans and Employment Agreements . Except as otherwise specifically provided in this Employee Matters Agreement, effective as of the Distribution, each HII Employee and HII Retiree (and each such individual’s Plan Payees) shall cease participation in all New NGC Benefit Plans and, as of such time, HII shall or shall cause another member of the HII Group to have in effect such HII Benefit Plans as are necessary to comply with its obligations pursuant to this Employee Matters Agreement.

          (a) Effective as of the Distribution, except as otherwise specifically provided in this Employee Matters Agreement, New NGC shall, or shall cause one or more members of the New NGC Group to, retain, pay, perform, fulfill and discharge in due course all Liabilities arising out of or relating to all New NGC Employment Agreements.

          (b) Effective as of the Distribution, except as otherwise specifically provided in this Employee Matters Agreement, HII shall, or shall cause one or more members of the HII Group to, retain, pay, perform, fulfill and discharge in due course (i) all Liabilities arising out of or relating to all HII Benefit Plans, (ii) all Liabilities arising out of or relating to all HII Employment Agreements, (iii) all Liabilities arising out of or relating to the Converted HII Equity Compensation Awards (including, without limitation, any and all Liabilities with respect to any equity award of NGC or New NGC that, through assumption and conversion, becomes a Converted HII Equity Compensation Award, as well as any and all Liabilities with respect to the assumption and conversion of such an award), and (iv) all Liabilities with respect to the employment, service, termination of

employment or termination of service of all HII Employees, HII Retirees, their respective Plan Payees, and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or nonpayroll worker of any member of the HII Group or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the HII Group), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the HII Group or the Shipbuilding Business. For the avoidance of doubt, from and after the Distribution, in no event will HII be required to issue, grant or award any compensation relating to HII Common Stock to any employee who is a member of the New NGC Group, and, subject to the treatment of the New NGC Equity Compensation Awards that are outstanding as of the Distribution and held by any HII Employee or HII Retiree as provided in Section 8.1, in no event will New NGC be required to issue, grant or award any compensation relating to New NGC Common Stock to any employee who is a member of the HII Group.

     Section 2.3 HII Benefit Plans and HII Employment Agreements (a) . Schedule 2.3 sets forth a complete list of all material HII Benefit Plans and HII Employment Agreements. Effective as of the Distribution, HII or another member of the HII Group shall, as applicable in accordance with this Employee Matters Agreement, adopt, continue or, to the extent necessary, assume sponsorship of each HII Benefit Plan and HII Employment Agreement, and the New NGC Group shall use reasonable efforts to transfer or cause to be transferred to HII all plan documents, trust agreements, insurance policies, administrative agreements, and other agreements and instruments reasonably required for the maintenance and administration of the HII Benefit Plans and the HII Employment Agreements. To facilitate HII’s establishment of the HII Spinoff Plans, New NGC shall, prior to Distribution, provide HII with draft plan documents of the HII Spinoff Plans for HII’s review and consideration. New NGC shall endeavor to ensure that such draft plan documents accurately replicate the material terms of the respective Split DC Plans, Split DB Plans, Split Welfare Plans and Split Nonqualified Plans, but New NGC makes no representation or warranty that the draft plan documents do so or that draft plan documents satisfy any applicable legal requirements and New NGC expressly disclaims any and all liability related to the draft HII Spinoff Plans.

     Effective on the Distribution Date, the HII Group shall be exclusively responsible for administering each HII Benefit Plan and each HII Employment Agreement in accordance with its terms and for all obligations and liabilities with respect to the HII Benefit Plans and HII Employment Agreements and all benefits owed to participants in the HII Benefit Plans and individuals who are parties to the HII Employment Agreements, whether arising before, on or after the Distribution Date. Except as specifically provided herein, HII shall not assume sponsorship, maintenance or administration of any Benefit Plan or Employment Agreement that is not an HII Benefit Plan or an HII Employment Agreement or receive or assume any assets or liabilities in connection with any such Benefit Plan or Employment Agreement.

     Section 2.4 Plan-Related Litigation . Notwithstanding anything herein to the contrary, the management of the defense of all litigation related to the New NGC Benefit

Plans, the New NGC Employment Agreements, the HII Benefit Plans and the HII Employment Agreements shall be governed by the Litigation Management Agreement, and this Employee Matters Agreement shall govern the allocation of Liabilities related to any such litigation. For the avoidance of doubt, if such litigation relates solely to matters occurring after the Distribution with respect to a Benefit Plan or an Employment Agreement: (a) if such Benefit Plan or Employment Agreement is an HII Benefit Plan or an HII Employment Agreement, the HII Group shall be solely responsible for such litigation and any liabilities with respect thereto, and (b) if such Benefit Plan or Employment is a New NGC Benefit Plan or a New NGC Employment Agreement, the New NGC Group shall be solely responsible for such litigation and any liabilities with respect thereto.

     Section 2.5 Vacation and Sick Pay . HII shall assume responsibility for accrued vacation and sick pay and any other paid time off attributable to HII Employees and HII Retirees as of the Distribution, or Applicable Transfer Date.

     Section 2.6 Employee Transfers . Upon mutual agreement of HII and New NGC any employee whose employment transfers within 45 days after the Distribution from the New NGC Group to the HII Group or from the HII Group to the New NGC Group because they were inadvertently and erroneously treated as employed by the wrong employer on the Distribution Date, and who was continuously employed by a member of the HII Group or the New NGC Group (as applicable) from the Distribution through the date such employee commences active employment with a member of the New NGC Group or HII Group (as applicable) shall be a “ Delayed Transfer Employee .” Except as otherwise specifically provided in this Employee Matters Agreement, such Delayed Transfer Employees shall be treated in the same manner as HII Employees as specified in this Employee Matters Agreement, to the extent practicable in compliance with applicable Law and the Employee Plans. For purposes of this Employee Matters Agreement, the date on which a Delayed Transfer Employee actually commences employment with the HII Group or the New NGC Group (as applicable) is referred to as such individual’s “ Applicable Transfer Date ” and such Applicable Transfer Date shall, except as expressly provided herein and in compliance with Law applicable to the Employee Plans, be treated as the Distribution Date for Delayed Transfer Employees where the Distribution Date is referenced in this Employee Matters Agreement. Notwithstanding anything herein to the contrary, the mutual agreement with respect to, and Applicable Transfer Date of, any Delayed Transfer Employee must occur on or before 45 days after Distribution.

     Section 2.7 Annual Bonuses . HII shall be solely responsible for all annual bonuses earned by HII Employees and HII Retirees with respect to periods ending on or after January 1, 2011.

ARTICLE III
SERVICE CREDIT

     Section 3.1 Service Credit for Employee Transfers . The Benefit Plans shall provide the following service crediting rules effective as of the Distribution:

          (a) If a Delayed Transfer Employee becomes employed by a member of the New NGC Group or HII Group on or before 45 days after the Distribution then such Delayed Transfer Employee’s service with the HII Group or the New NGC Group (as applicable) following the Distribution shall be recognized for purposes of eligibility, vesting and pension credit under the appropriate Benefit Plans, subject to the terms of those plans.

          (b) If a former employee of HII Group or New NGC Group (such Group, the “ Original Group ”) (whether or not a Delayed Transfer Employee) becomes employed by a member of the other Group (such Group, the “Transferee Group”) either (i) later than 45 days after the Distribution or (ii) without having been continuously employed by a member of the Original Group from the Distribution through the date such former employee commences active employment with a member of the Transferee Group, then the Benefits Plans of the Transferee Group will not recognize for any purpose such individual’s service with the Original Group before or after the Distribution, except to the extent required by Law. If a former employee is rehired by his or her Original Group then all such individual’s service shall be recognized by the Benefit Plans of the Original Group to the extent required by Law.

     Section 3.2 HII Benefit Plans . From and after the Distribution, or Applicable Transfer Date, HII shall, and shall cause its affiliates and successors to, provide credit under the HII Benefit Plans to HII Employees and HII Retirees for their service with HII and its predecessors and affiliates (including but not limited to NGC and any of its Affiliates, HII Group, New NGC and the New NGC Group) for all purposes to the same extent that such service was recognized under the relevant New NGC Benefit Plans. For avoidance of doubt, service shall be credited for all purposes, including but not limited to, benefit accrual, determining eligibility to participate, vesting, eligibility to retire, and eligibility for subsidized post-retirement welfare benefits and the amount of such subsidy; provided , however , that service shall not be recognized to the extent that such recognition would result in the duplication of benefits.

ARTICLE IV
CERTAIN WELFARE BENEFIT PLAN MATTERS

     Section 4.1 HII Retained Welfare Plans . HII shall cause a member of the HII Group to retain, or to the extent necessary, assume sponsorship of any HII retained welfare plans (the “ HII Retained Welfare Plans ”) and take all necessary actions to continue contributions to the HII Retained Benefit Plans that are multiemployer Welfare Plans. To the extent necessary, prior to the Distribution, HII shall cause a member of the HII Group to assume sponsorship of the HII Retained Welfare Plans. New NGC shall use reasonable efforts to transfer or cause to be transferred to a member of the HII Group all plan documents, trust agreements, insurance policies, administrative agreements and other agreements and instruments reasonably required for the maintenance and administration of the HII Retained Welfare Plans. From and after the Distribution, the HII Group shall be exclusively responsible for all obligations and liabilities with respect to the HII Retained Welfare Plans, and all benefits owed to participants in the HII Retained Welfare Plans, whether accrued before, on or after the Distribution.

     Section 4.2 HII Spinoff Welfare Plans . Effective not later than the Distribution, HII or a member of the HII Group shall establish certain welfare benefit plans (such plans, the “ HII Spinoff Welfare Plans ”). Each HII Spinoff Welfare Plan shall have terms and features (including benefit coverage options and employer contribution provisions) that are substantially identical to one of the Benefit Plans listed on Schedule 4.2 (such Benefit Plans, the “ Split Welfare Plans ”) such that (for avoidance of doubt), each Split Welfare Plan is substantially replicated by an HII Spinoff Welfare Plan. Each HII Spinoff Welfare Plan shall assume all liability from the corresponding Split Welfare Plan with respect to, and shall provide benefits to, those HII Employees and HII Retirees and their respective Plan Payees who immediately prior to the Distribution were participating in, or entitled to present or future benefits under the corresponding Split Welfare Plan. From and after the Distribution, HII and the HII Group shall be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the HII Spinoff Welfare Plans, whether accrued before, on or after the Distribution. For avoidance of doubt, the HII Spinoff Welfare Plans shall have the sole obligation to provide benefits attributable to any lost participants who were formerly employed in the Shipbuilding Business.

     Section 4.3 Continuation of Elections . As of the Distribution, HII shall cause the HII Spinoff Welfare Plans to recognize and maintain all elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations) in effect with respect to HII Employees, HII Retirees and Delayed Transfer Employees prior to the Distribution under the corresponding Split Welfare Plan and apply such elections and designations under the HII Spinoff Welfare Plans for the remainder of the period or periods for which such elections or designations are by their original terms effective.

     Section 4.4 Deductibles and Other Cost-Sharing Provisions . As of the Distribution (or Applicable Transfer Date with respect to a Delayed Transfer Employee), HII shall cause the HII Spinoff Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to HII Employees, HII Retirees and Delayed Transfer Employees under the corresponding Split Welfare Plan during the plan year in which the Distribution or Applicable Transfer Date occurs, and the HII Spinoff Welfare Plans will not impose any limitations on coverage for preexisting conditions other than such limitations as were applicable under the comparable Benefit Plans prior to the Distribution or Applicable Transfer Date.

     Section 4.5 Flexible Spending Account Treatment . With respect to the portion of a Split Welfare Plan that consists of medical and dependent care flexible spending accounts, as of the Distribution, HII shall be solely responsible for all liabilities with respect thereto, and the applicable HII Spinoff Welfare Plan shall, as required under Section 4.3, give effect to the elections of HII Employees and HII Retirees that were in effect under the Split Welfare Plan as of the Distribution.

     Section 4.6 Health Reimbursement Arrangement Treatment . With respect to the portion of a Split Welfare Plan that is a health reimbursement arrangement (as defined in IRS Notice 2002-45) (“ HRA ”), as of the Distribution, HII shall cause the applicable HII Spinoff Welfare Plan to credit each HII Employee and HII Retiree who had an HRA

balance under the Split Welfare Plan immediately prior to the Distribution with an HRA balance equal to the HRA balance he or she had under the Split Welfare Plan immediately prior to the Distribution. With respect to a Delayed Transfer Employee who had an HRA balance under the Split Welfare Plan immediately prior to his or her Applicable Transfer Date, HII shall cause the applicable HII Spinoff Welfare Plan to credit to the Delayed Transfer Employee with an HRA balance equal to the HRA balance he or she had under the Split Welfare Plan immediately prior to his or her Applicable Transfer Date.

     Section 4.7 Workers’ Compensation . The HII Group shall be responsible for processing all workers’ compensation claims of HII Employees and HII Retirees, regardless of when the Workers’ Compensation Event occurred. Coverage for such claims shall be as specified in the Insurance Matters Agreement.

ARTICLE V
TAX-QUALIFIED DEFINED BENEFIT PLANS

     Section 5.1 HII Retained Defined Benefit Plans . Prior to the Distribution, HII shall cause a member of the HII Group to retain or, to the extent necessary, assume sponsorship of the HII Retained Defined Benefit Plans (and their related trusts) set forth on Schedule 5.1 (the “ HII Retained DB Plans ”) and take all necessary actions to continue contributions to the HII Retained DB Plans that are multiemployer defined benefit pension plans. New NGC shall use reasonable efforts to transfer or cause to be transferred to a member of the HII Group all plan documents, trust agreements, insurance policies, administrative agreements and other agreements and instruments reasonably required for the maintenance and administration of the HII Retained DB Plans. From and after the Distribution, the HII Group shall be exclusively responsible for all obligations and liabilities with respect to the HII Retained DB Plans, all assets of the HII Retained DB Plans, and all benefits owed to participants in the HII Retained DB Plans, whether accrued before, on or after the Distribution.

     Section 5.2 HII Spinoff DB Plans .

          (a) Effective as of the Distribution, HII or another member of the HII Group shall establish certain defined benefit plans that qualify under Code Section 401(a), along with a related master trust or trusts that is exempt under Code Section 501(a) (such plans and trusts, the “ HII Spinoff DB Plans ”). Each HII Spinoff DB Plan shall have terms and features (including benefit accrual provisions) that are substantially identical to one of the Benefit Plans listed on Schedule 5.2(a) (such Benefit Plans, the “ Split DB Plans ”), such that (for avoidance of doubt), each Split DB Plan is substantially replicated by a corresponding HII Spinoff DB Plan. Each HII Spinoff DB Plan shall assume liability for all benefits accrued or earned (whether or not vested) by HII Employees and HII Retirees and their respective Plan Payees under the corresponding Split DB Plan as of the Distribution. HII or a member of the HII Group shall be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the HII Spinoff DB Plans to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the HII Spinoff DB Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under

Section 501(a) of the Code. The portion of liabilities relating to HII Employees, HII Retirees and Delayed Transfer Employees and their respective Plan Payees shall cease to be liabilities of the applicable Split DB Plan, and shall be assumed by the corresponding HII Spinoff DB Plan in accordance with this Section and Section 414(l) of the Code, Treasury Regulation Section 1.414(l)-1, and Section 208 of ERISA.

          (b) A master trust (the “ HII Master Trust ”) has been established to hold the assets of the HII Spinoff DB Plans and the HII Retained Plans, and NGC has caused certain marketable securities to be transferred to the HII Master Trust. The HII Spinoff Plans currently participating in the HII Master Trust as of the date of this Employee Matters Agreement are specified on Schedule 5.2(b)(i) . As of the Distribution, New NGC or a member of the New NGC Group shall cause its actuary to determine the estimated value, as of the Distribution, of the assets required to be held on behalf of each HII Spin-Off DB Plan in accordance with the assumptions and valuation methodology set forth on Schedule 5.2(b)(ii) (the “ Estimated Retirement Plan Transfer Amount ” for each such plan). Prior to or as of the Distribution, New NGC or a member of the New NGC Group shall cause the trust for each Split DB Plan to transfer to the HII Master Trust on behalf of each corresponding HII Spinoff DB Plan an amount in cash or in kind equal to the Estimated Retirement Plan Transfer Amount for such plan, less amounts already held by the HII Master Trust as of the Distribution on behalf of the applicable HII Spinoff DB Plan. With respect to amounts included in the Estimated Retirement Plan Transfer Amount for private equity, real estate, infrastructure and hedge fund partnerships, New NGC shall cause the trust(s) in which the Split DB Plans participate to transfer to the HII Master Trust the cash value of such assets, as determined as of the end of the month prior to the month in which the Distribution occurs, adjusted to reflect interest in accordance with the methodology set forth on Schedule 5.2(b)(iii) from such month-end through the day before the day such cash transfer is made (which shall be no later than forty-five (45) days after the Distribution Date).

          (c) Within twelve (12) months following the Distribution, New NGC or a member of the New NGC Group shall cause its actuary to provide HII with a revised calculation of the value, as of the Distribution, of the assets to be transferred to each HII Spinoff DB Plan determined in accordance with the assumptions and valuation methodology determined by New NGC using the assumptions specified on Schedule 5.2(b)(ii) and reflecting any Delayed Transfer Employees and their respective Applicable Transfer Dates and any demographic updates (the “ Final Retirement Plan Transfer Amount ” for each such plan).

          (d) Within 45 days of the receipt from the actuary of the determination of the Final Retirement Plan Transfer Amount, New NGC shall cause each Split DB Plan to transfer to the corresponding HII Spinoff DB Plan (the date of each such transfer, the “ Final Transfer Date ” for each such plan) an amount in cash or in kind equal to (i) the Final Retirement Plan Transfer Amount, minus (ii) the sum of (A) the Estimated Retirement Plan Transfer Amount and (B) the aggregate amount of payments made from the Split DB Plan to HII Employees, HII Retirees and Delayed Transfer Employees and their respective Plan Payees in order to satisfy any benefit obligation with respect to such participants following the Distribution, or Applicable Transfer Date for Delayed Transfer Employees,

plus (iii) any payments made from an HII Spinoff DB Plan to a Delayed Transfer Employee prior to when such Delayed Transfer Employee transferred from the HII Group to the New NGC Group (such amount the “ True-Up Amount ”). However, if the True-Up Amount is a negative number with respect to any HII Spinoff DB Plan, New NGC shall not be required to cause any such additional transfer and instead HII shall be required to cause a transfer of cash within 45 days of the receipt of written notification by New NGC from such HII Spinoff DB Plan to the corresponding Split DB Plan the amount by which the sum of clauses (ii)(A) and (B) above, minus the amount in (iii) above, exceeds the Final Retirement Plan Transfer Amount. The True-Up Amount or the amount described in the immediately-preceding sentence shall be adjusted to reflect earnings or losses as described in Schedule 5.2(d) . The parties hereto acknowledge that the Split DB Plans’ transfer of the True-Up Amounts to the corresponding HII Spinoff DB Plans shall be in full settlement and satisfaction of the obligations of New NGC and the Split DB Plans to transfer assets to the HII Spinoff DB Plans pursuant to this Section.

               The True-Up Amount shall be paid from each Split DB Plan to the corresponding HII Spinoff DB Plan in cash according to the principles described in Section 5.2(b), and adjusted to reflect earnings or losses and expenses during the period from the Distribution (or Applicable Transfer Date with respect to Delayed Transfer Employees) to the day before the Final Transfer Date. Such earnings or losses shall be determined in accordance with the methodology set forth in Schedule 5.2(d) from the Distribution Date through the date the True-Up Amount is paid. In the event that HII is obligated to cause any HII Spinoff DB Plan to reimburse the corresponding Split DB Plan pursuant to this Section (or with respect to any earnings calculation attributable to individuals rehired by New NGC in accordance with this Section), such reimbursement or earnings calculation shall be performed in accordance with the same principles set forth herein (including, without limitation, earnings or losses in accordance with the methodology set forth in Schedule 5.2(d) ) with respect to the payment of the True-Up Amount.

          (e) From and after the Distribution, HII and the members of the HII Group shall be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the HII Spinoff DB Plans, whether accrued before, on or after the Distribution. For avoidance of doubt, the HII Spinoff DB Plans shall have the sole and exclusive obligation to restore the unvested accrued benefits attributable to any individual who becomes employed by a member of the HII Group and whose employment with NGC or any of its Affiliates or a member of the New NGC Group terminated on or before the Distribution at a time when such individual’s benefits under the Split DB Plan were not fully vested. Furthermore, the HII Spinoff DB Plans shall have the sole obligation to restore accounts attributable to any lost participants who were formerly employed in the Shipbuilding Business.

     Section 5.3 Continuation of Elections . As of the Distribution Date, HII (acting directly or through a member of the HII Group) shall cause the HII Spinoff DB Plans to recognize and maintain all existing elections, including, but not limited to, beneficiary designations, payment form elections and rights of alternate payees under qualified domestic relations orders with respect to HII Employees, HII Retirees and Delayed

Transfer Employees and their respective Plan Payees under the corresponding Split DB Plan.

ARTICLE VI
U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS

     Section 6.1 HII Retained Defined Contribution Plans . Prior to the Distribution, HII shall cause a member of the HII Group to retain or, to the extent necessary, assume sponsorship of the HII Retained Defined Contribution Plans (and their related trusts) set forth on Schedule 6.1 (the “ HII Retained DC Plans ”) and take all necessary actions to continue contributions to the HII Retained DC Plans that are multiemployer defined contribution pension plans. New NGC shall use reasonable efforts to transfer or cause to be transferred to a member of the HII Group all plan documents, trust agreements, insurance policies, administrative agreements and other agreements and instruments reasonably required for the maintenance and administration of the HII Retained DC Plans. From and after the Distribution, the HII Group shall be exclusively responsible for all obligations and liabilities with respect to the HII Retained DC Plans, all assets of the HII Retained DC Plans, and all benefits owed to participants in the HII Retained DC Plans, whether accrued before, on or after the Distribution.

     Section 6.2 HII Spinoff DC Plans .

          (a) Effective as of the Distribution, HII or another member of the HII Group shall establish certain defined contribution plans that qualify under Code Section 401(a), and a related master trust or trusts exempt under Code Section 501(a) (such plans and trusts, the “ HII Spinoff DC Plans ”). Each HII Spinoff DC Plan shall have terms and features (including employer contribution provisions) that are substantially identical to one of the Benefit Plans listed on Schedule 6.2 (such Benefit Plans, the “ Split DC Plans ”) such that (for avoidance of doubt), each Split DC Plan is substantially replicated by a corresponding HII Spinoff DC Plan. HII or a member of the HII Group shall be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the HII Spinoff DC Plans to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the HII Spinoff DC Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. Each HII Spinoff DC Plan shall assume liability for all benefits accrued or earned (whether or not vested) by HII Employees and HII Retirees and their respective Plan Payees under the corresponding Split DC Plan as of the Distribution.

          (b) On or as soon as reasonably practicable following the Distribution, New NGC or a member of the New NGC Group shall cause each Split DC Plan to transfer to the applicable HII Spinoff DC Plan, and HII or another member of the HII Group shall cause such HII Spinoff DC Plan to accept the transfer of, the accounts, liabilities and related assets in such Split DC Plan attributable to HII Employees and HII Retirees and their respective Plan Payees. The transfer of assets shall be in cash or in kind (as determined by the transferor) and include outstanding loan balances and amounts forfeited by HII Retirees that have not yet been reallocated or applied to the payment of

contributions or expenses and be conducted in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(1)-1, and Section 208 of ERISA.

          (c) As soon as reasonably practicable (but not later than 30 days) following the Applicable Transfer Date of a Delayed Transfer Employee who transfers employment from a member of the New NGC Group to a member of the HII Group within 45 days following the Distribution, New NGC or a member of the New NGC Group shall cause the accounts, related liabilities, and related assets in the corresponding Split DC Plan(s) attributable to such Delayed Transfer Employee and their respective Plan Payees (including any outstanding loan balances) to be transferred in cash or in kind (as determined by the transferor) (in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1, and Section 208 of ERISA) to the applicable HII Spinoff DC Plan(s) and HII or a member of the HII Group shall cause the applicable HII Spinoff DC Plan(s) to accept such transfer of accounts, liabilities and assets.

          (d) In the event a Delayed Transfer Employee is an HII Employee who returns to employment with New NGC or a member of the New NGC Group, then, as soon as reasonably practicable (but not later than 30 days thereafter), HII or a member of the HII Group shall cause the accounts, related liabilities, and related assets in the corresponding HII Spinoff DC Plan(s) attributable to such Delayed Transfer Employee and their respective Plan Payees (including any outstanding loan balances) to be transferred in cash or in-kind (as determined by the transferor) in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1, and Section 208 of ERISA to the applicable Split DC Plan(s). New NGC or a member of the New NGC Group shall cause the applicable Split DC Plan(s) to accept such transfer of accounts, liabilities and assets.

          (e) From and after the Distribution, except as specifically provided in paragraph (d) above, HII and the HII Group shall be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the HII Spinoff DC Plans, whether accrued before, on or after the Distribution. For avoidance of doubt, the HII Spinoff DC Plans shall have the sole and exclusive obligation to restore the unvested portion of any account attributable to any individual who becomes employed by a member of the HII Group and whose employment with NGC or any of its Affiliates, or a member of the New NGC Group terminated on or before the Distribution at a time when such individual’s benefits under the Split DC Plans were not fully vested. Furthermore, the HII Spinoff DC Plans shall have the sole obligation to restore accounts attributable to any lost participants who were formerly employed in the Shipbuilding Business.

     Section 6.3 Continuation of Elections . As of the Distribution, HII (acting directly or through a member of the HII Group) shall cause the HII Spinoff DC Plans to recognize and maintain all elections, including, but not limited to, deferral, investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to HII Employees, HII Retirees and Delayed Transfer Employees and their respective Plan Payees under the corresponding Split DC Plan; provided , that, investment elections relating to the Northrop Grumman stock fund shall be as determined by the appropriate fiduciary of the HII Split DC Plans.

     Section 6.4 Contributions Due . All contributions payable to the Split DC Plans with respect to employee deferrals, matching contributions and employer contributions for HII Employees through the Distribution Date, determined in accordance with the terms and provisions of the Split DC Plans, ERISA and the Code, shall be paid by New NGC or a member of the New NGC Group to the appropriate Split DC Plan prior to the date of any asset transfer described in Section 6.2.

ARTICLE VII
NONQUALIFIED RETIREMENT PLANS

     Section 7.1 HII Retained Nonqualified Plans .

          (a) Prior to the Distribution, HII shall cause a member of the HII Group to retain or, to the extent necessary, assume sponsorship of the HII Retained Nonqualified Plans set forth on Schedule 7.1(a) (the “ HII Retained Nonqualified Plans ”). New NGC shall use reasonable efforts to transfer or cause to be transferred to a member of the HII Group all plan documents, administrative agreements and other agreements and instruments reasonably required for the maintenance and administration of the HII Retained Nonqualified Plans. From and after the Distribution, the HII Group shall be exclusively responsible for all obligations and liabilities with respect to the HII Retained Nonqualified Plans, and all benefits owed to participants in the HII Retained Nonqualified Plans, whether accrued before, on or after the Distribution.

          (b) Unless New NGC and HII agree otherwise before the Distribution, prior to or on the Distribution Date, New NGC shall cause to be transferred, to one or more grantor trusts established or maintained by HII as designated by HII, cash equal to the amount of the assets held under any grantor trust maintained by a member of the New NGC Group (each a “ New NGC Grantor Trust ”) that are allocated in the records of such New NGC Grantor Trust to pay benefits under the HII Retained Nonqualified Plans specified on Schedule 7.1(b) . The amount of assets to be so transferred shall be determined by the actuary selected by the New NGC Group.

     Section 7.2 HII Spinoff Nonqualified Plans .

          (a) Effective as of the Distribution, HII or another member of the HII Group shall establish certain nonqualified retirement plans (such plans, the “ HII Spinoff Nonqualified Plans ”). Each HII Spinoff Nonqualified Plan shall have terms and features (including employer contribution provisions) that are substantially identical to one of the NGC Benefit Plans listed on Schedule 7.2(a) (such plans, the “ Split Nonqualified Plans ”) such that (for avoidance of doubt), each Split Nonqualified Plan is substantially replicated by a corresponding HII Spinoff Nonqualified Plan. Except as specifically provided in Section 7.6, HII or a member of the HII Group shall be solely responsible for taking all necessary, reasonable, and appropriate actions to establish, maintain and administer the HII Spinoff Nonqualified Plans so that they do not result in adverse tax consequences under Code Section 409A. Each HII Spinoff Nonqualified Plan shall assume liability for all benefits accrued or earned (whether or not vested) by HII Employees and HII Retirees and their respective Plan Payees under the corresponding Split Nonqualified Plan as of the

Distribution. From and after the Distribution, HII and the HII Group shall be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the HII Spinoff Nonqualified Plans, whether accrued before, on or after the Distribution. Furthermore, HII and the HII Group shall have the sole obligation to restore in the HII Spinoff Nonqualified Plans benefits under the Split Nonqualified Plans attributable to any lost participants who were formerly employed in the Shipbuilding Business.

          (b) Unless New NGC and HII agree otherwise before the Distribution, prior to or on the Distribution Date, New NGC or a member of the New NGC Group shall cause its actuary to determine the estimated value, as of the Distribution, of the amount of assets to be transferred from the New NGC Grantor Trusts to one or more grantor trusts established or maintained by HII as designated by HII with respect to the HII Spinoff Nonqualified Plans specified on Schedule 7.2(b) (the “ Initial Nonqualified Plan Transfer Amount ”). The Initial Nonqualified Plan Transfer Amount shall equal, for each such HII Spinoff Nonqualified Plan, (i) the total assets held by the applicable New NGC Grantor Trust multiplied by (ii) a fraction, (A) the numerator of which is the total value of accrued benefits allocated to such HII Spinoff Nonqualified Plan under such New NGC Grantor Trust, and (B) the denominator of which is the total value of all accrued benefits under all plans for which such New NGC Grantor Trust is intended to pay all or a portion of the benefits. For purposes of this Section 7.2(b), the value of accrued benefits shall be determined by the actuary selected by the New NGC Group.

          (c) Within twelve (12) months following the Distribution, New NGC or a member of the New NGC Group shall cause its actuary to provide HII with a revised calculation of the value, as of the Distribution, of the assets to be transferred with respect to each HII Spinoff Nonqualified Plans specified on Schedule 7.2(b) , as determined by the actuary selected by the New NGC Group, and reflecting any Delayed Transfer Employees and their respective Applicable Transfer Dates and any demographic updates (the “ Final Nonqualified Plan Transfer Amount ” for each such plan).

          (d) Within forty-five (45) days of the receipt from the actuary of the determination of the Final Nonqualified Plan Transfer Amount, New NGC shall cause the applicable New NGC Grantor Trust to transfer to a grantor trust specified by HII (the date of each such transfer, the “ Final Nonqualified Plan Transfer Date ” for each such plan) an amount in cash equal to (i) the Final Nonqualified Plan Transfer Amount, minus (ii) the sum of (A) the Initial Nonqualified Plan Transfer Amount and (B) the aggregate amount of payments made pursuant to the Split Nonqualified Plan to HII Employees, HII Retirees and Delayed Transfer Employees and their respective Plan Payees in order to satisfy any benefit obligation with respect to such participants following the Distribution, or Applicable Transfer Date for Delayed Transfer Employees, plus (iii) any payments made from an HII Spinoff Nonqualified Plan specified on Schedule 7.2(b) to a Delayed Transfer Employee prior to when such Delayed Transfer Employee transferred from the HII Group to the New NGC Group (such amount the “ Nonqualified Plan True-Up Amount ”). However, if the Nonqualified Plan True-Up Amount is a negative number with respect to any HII Spinoff Nonqualified Plan, New NGC shall not be required to cause any such additional transfer and instead HII shall be required to cause a transfer of cash within

forty-five (45) days of the receipt of written notification by New NGC from the relevant HII grantor trust to the New NGC Grantor Trust specified by New NGC the amount by which the sum of clauses (ii)(A) and (B) above, minus the amount in (iii) above, exceeds the Final Nonqualified Plan Transfer Amount. The Nonqualified Plan True-Up Amount or the amount described in the immediately-preceding sentence shall be adjusted to reflect earnings or losses as described in Schedule 7.2(d) . The parties hereto acknowledge that the New NGC Grantor Trusts’ transfer of the Nonqualified Plan True-Up Amounts to an HII grantor trust shall be in full settlement and satisfaction of the obligations of New NGC and the New NGC Grantor Trusts to transfer assets to HII or any HII grantor trust pursuant to this Section 7.2(d).

     Section 7.3 No Distributions On Separation . New NGC and HII acknowledge that neither the Distribution nor any of the other transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Ancillary Agreements will trigger a payment or distribution of compensation under any Benefit Plan that is a nonqualified retirement plan for any HII Employee or HII Retiree and, consequently, that the payment or distribution of any compensation to which any HII Employee or HII Retiree is entitled under any HII Retained Nonqualified Plan or HII Spinoff Nonqualified Plan will occur upon such HII Employee’s or HII Retiree’s separation from service from the HII Group or at such other time as provided in such HII Retained Nonqualified Plan or HII Spinoff Nonqualified Plan or such HII Employee’s or HII Retiree’s deferral election.

     Section 7.4 Section 409A . New NGC and HII shall cooperate in good faith so that the Distribution will not result in adverse tax consequences under Code Section 409A to any current or former employee of any member of the New NGC Group or any member of the HII Group, or their respective Plan Payees, in respect of his or her benefits under any New NGC Benefit Plan or HII Benefit Plan.

     Section 7.5 Continuation of Elections . As of the Distribution, HII (acting directly or through a member of the HII Group) shall cause each HII Spinoff Nonqualified Plan to recognize and maintain all elections, including, but not limited to, deferral, investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to HII Employees, HII Retirees and their Plan Payees under the corresponding Split Nonqualified Plan; provided , that investment elections relating to a Northrop Grumman stock fund under a Split Nonqualified Plan shall be as determined by the appropriate party with investment authority for such HII Spinoff Nonqualified Plan.

     Section 7.6 Delayed Transfer Employees . Any Delayed Transfer Employee who transfers to the HII Group within 45 days following the Distribution shall be treated in the same manner as an HII Employee under this Article VII. As indicated in Section 2.6, such a Delayed Transfer Employee’s Applicable Transfer Date shall be treated as the Distribution Date. In addition, if a Delayed Transfer Employee transfers from the HII Group to the New NGC Group within 45 days following the Distribution, the New NGC Group shall assume and be solely responsible, pursuant to the terms of the applicable Split

Nonqualified Plan, for any benefits accrued by such individual under any HII Spinoff Nonqualified Plan, and the HII Group shall have no liability with respect thereto.

ARTICLE VIII
NEW NGC EQUITY COMPENSATION AWARDS

     Section 8.1 General Treatment of Outstanding New NGC Equity Compensation Awards . Notwithstanding any other provision of this Employee Matters Agreement or the Separation Agreement to the contrary, from and after the Distribution, each outstanding option award to purchase New NGC Common Stock (“ New NGC Option ”) and each restricted performance stock right award with respect to New NGC Common Stock that relates to a performance period ending after January 1, 2011 (“ New NGC RPSR ”), restricted stock right award with respect to New NGC Common Stock (“ New NGC RSR ”) and cash performance unit award subject to the terms of a New NGC long-term incentive cash plan (“ New NGC CPU ”), in each case that was granted under or pursuant to any equity compensation plan or arrangement of New NGC (each such New NGC Option, New NGC RPSR, New NGC RSR or New NGC CPU, a “ New NGC Equity Compensation Award ”), that, as of the Distribution, is held by any HII Employee (which for purposes of this Section 8.1, shall not include any Delayed Transfer Employees) or HII Retiree, shall be assumed by HII (each such assumed New NGC Equity Compensation Award, a “ Converted HII Equity Compensation Award ”). Except for cash performance unit awards, in connection with the assumption by HII, each Converted HII Equity Compensation Award shall be adjusted into an option award, restricted performance stock right award or restricted stock right award, as applicable, with respect to shares of HII common stock, par value $1.00 per share (“ HII Common Stock ”), having the same intrinsic value as the applicable New NGC Equity Compensation Award using an exchange ratio (the “ Exchange Ratio ”) equal to the closing price of a share of New NGC Common Stock on the last regular trading day immediately prior to the Distribution Date based on “regular way” trading divided by the closing price of a share of HII Common Stock on the first day on or after the Distribution Date on which HII Common Stock trades on a “regular way” basis, with such adjustments subject to appropriate rounding and to be effective upon the Distribution. The per share exercise price of any Converted HII Equity Compensation Award that is a stock option shall also be adjusted effective upon the Distribution by dividing the applicable per share exercise price of the stock option as in effect immediately prior to the Distribution by the Exchange Ratio, with the result rounded up to the nearest whole cent. The performance criteria applicable to any Converted HII Equity Compensation Awards that are restricted performance stock rights and cash performance unit awards shall also be adjusted so that the applicable performance criteria are measured based on New NGC performance criteria through December 31, 2010, and HII performance criteria following such date through the end of the applicable performance period. Prior to the Distribution, HII shall establish equity compensation plans, so that upon the Distribution, HII shall have in effect an equity compensation plan containing substantially the same terms as each original New NGC equity compensation plan under which any Converted HII Equity Compensation Award was granted. From and after the Distribution, each Converted HII Equity Compensation Award shall be subject to the terms of the applicable HII equity compensation plan, the award agreement governing such Converted HII Equity Compensation Award and any Employment Agreement to which the

applicable HII Employee or HII Retiree is a party. From and after the Distribution, HII shall retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the Converted HII Equity Compensation Awards. Effective as of the Distribution, each HII Employee and HII Retiree shall cease participation in all New NGC equity compensation plans. In all events, the adjustments to the Converted HII Equity Compensation Awards provided for in this Section 8.1 shall be made in a manner that, as determined by New NGC, avoids adverse tax consequences under Code Section 409A.

     Section 8.2 Tax Withholding and Reporting . Effective from and after the Distribution, HII shall be solely responsible for all Tax withholding obligations with respect to the Converted HII Equity Compensation Awards.

     Section 8.3 Tax Deductions . The rights of the members of the New NGC Group and the members of the HII Group to take deductions for New NGC Equity Compensation Awards and the Converted HII Equity Compensation Awards shall be determined in accordance with Section 8.2 of the Tax Matters Agreement.

ARTICLE IX
BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS

     Section 9.1 General Principles .

          (a) With respect to costs relating to Welfare Plan benefits (including, for the avoidance of doubt, claim costs, insurance premiums and administrative fees) provided to HII Employees and HII Retirees prior to Distribution that were not previously charged to a member of the HII Group, the HII Group shall reimburse New NGC within 30 days following receipt of an invoice from New NGC accompanied by reasonable documentation of such cost; provided that: (i) New NGC shall reduce such cost to reflect the receipt by New NGC after Distribution of amounts under the Medicare Part D Retiree Drug Subsidy Program or Early Retiree Reimbursement Program in respect of pre-Distribution claim costs of HII Retirees, with the amount of such reduction determined by New NGC using the allocation method historically applied by New NGC with respect to such amounts prior the Distribution; (ii) New NGC shall further reduce such cost to reflect any subrogation or reimbursement or similar recovery received by New NGC or a New NGC Benefit Plan after Distribution with respect to pre-Distribution claims incurred by HII Employees and HII Retirees; (iii) no such Welfare Plan costs shall be charged to, or adjustment amounts described in (ii) and (iii) credited to, the HII Group after March 31, 2013; and (iv) if, as of March 31, 2013, the adjustment amounts determined under (i) and (ii) exceed the costs chargeable to the HII Group as of that date, the New NGC Group shall reimburse the HII Group the amount of such excess.

          (b) From and after the Distribution, any services that a member of the New NGC Group shall provide to the members of the HII Group relating to any Benefit Plans shall be set forth in the Transition Services Agreement (and, to the extent provided therein, a member of the New NGC Group shall provide administrative services referred to in this Employee Matters Agreement).

          (c) From and after the Distribution, the members of the New NGC Group shall reimburse the members of the HII Group for any rebates or reimbursements received by a member of the New NGC Group from any third party (whether from a vendor, a taxing authority or any other third party) that relates to amounts paid by a member of the HII Group prior to the Distribution in connection with participation by HII Employees and HII Retirees in any New NGC Benefit Plan.

     Section 9.2 Benefit Plan Third-Party Claims . In the event of any conflict or inconsistency between the following provision on the one hand, and the Separation Agreement or any of the Ancillary Agreements on the other hand, the following provision shall control over the inconsistent provisions to the extent of the inconsistency:

     If a Third-Party Claim relates solely to the Benefit Plan of the Indemnifying Party, HII and New NGC shall take all actions necessary to substitute the Indemnifying Party and/or the relevant Benefit Plan of the Indemnifying Party as the proper party for such Third-Party Claim. If the Third-Party Claim relates to both an HII Benefit Plan and a New NGC Benefit Plan, HII and New NGC shall take all actions necessary to separate or otherwise partition the Third-Party Claim so as to allow each party to solely defend the claim relating to its own Benefit Plan (unless the parties mutually agree that such a separation or partition is unnecessary or inadvisable). If the Third-Party Claim cannot be transferred to the Indemnifying Party or separated or partitioned so as to allow each party to solely defend the claim relating to its own Benefit Plan, then New NGC shall defend the Third-Party Claim and HII may elect to participate in (but not control) the defense, compromise, or settlement of any such Third-Party Claim at its own expense (including allocated costs of HII in-house counsel and other HII personnel).

ARTICLE X
COOPERATION

     Section 10.1 Cooperation . Following the date of this Employee Matters Agreement, New NGC and HII shall, and shall cause their respective Subsidiaries to, use reasonable best efforts to cooperate with respect to any employee compensation or benefits matters that New NGC or HII, as applicable, reasonably determines require the cooperation of both New NGC and HII in order to accomplish the objectives of this Employee Matters Agreement. Without limiting the generality of the preceding sentence, (a) New NGC and HII shall cooperate in coordinating each of their respective payroll systems in connection with the transfers of HII Employees to the HII Group and the Distribution, and (b) New NGC shall transfer records to HII as reasonably necessary for the proper administration of HII Benefit Plans, to the extent such records are in New NGC’s possession. The obligations of the HII Group and the New NGC Group to cooperate pursuant to this Section 10.1 shall remain in effect until all audits of all Benefit Plans with respect to which the other party may have information have been completed or the applicable statute of limitations with respect to such audits has expired.

ARTICLE XI
MISCELLANEOUS

     Section 11.1 Vendor Contracts . Prior to the Distribution, New NGC and HII shall use reasonable best efforts to (a) negotiate with the current third-party providers to separate and assign the applicable rights and obligations under each group insurance policy, health maintenance organization, administrative services contract, third-party administrator agreement, letter of understanding or arrangement that pertains to one or more New NGC Benefit Plans and one or more HII Benefit Plans (each, a “ Vendor Contract ”) to the extent that such rights or obligations pertain to HII Employees and HII Retirees and their respective Plan Payees or, in the alternative, to negotiate with the current third-party providers to provide substantially similar services to the HII Benefit Plans on substantially similar terms under separate contracts with HII or the HII Benefit Plans and (b) to the extent permitted by the applicable third-party provider, obtain and maintain pricing discounts or other preferential terms under the Vendor Contracts.

     Section 11.2 Further Assurances . Prior to the Distribution, if either party identifies any commercial or other service that is needed to ensure a smooth and orderly transition of its business in connection with the consummation of the transactions contemplated hereby, and that is not otherwise governed by the provisions of this Employee Matters Agreement, the parties will cooperate in determining whether there is a mutually acceptable arm’s-length basis on which the other party will provide such service.

     Section 11.3 Employment Tax Reporting Responsibility . HII and New NGC hereby agree to follow the standard procedure for United States employment tax withholding as provided in Section 4 of Rev. Proc. 2004-53, I.R.B. 2004-35.

     Section 11.4 Data Privacy . The parties agree that any applicable data privacy Laws and any other obligations of the HII Group and the New NGC Group to maintain the confidentiality of any employee information or information held by any Benefit Plans in accordance with applicable Law shall govern the disclosure of employee information among the parties under this Employee Matters Agreement. HII and New NGC shall ensure that they each have in place appropriate technical and organizational security measures to protect the personal data of the HII Employees and HII Retirees.

     Section 11.5 Employee Badges . HII shall use reasonable best efforts to cause HII Employees to remove references to NGC from such individuals’ security badges, effective as of the Distribution Date.

     Section 11.6 Third Party Beneficiaries . Nothing contained in this Employee Matters Agreement shall be construed to create any third-party beneficiary rights in any individual, including without limitation any HII Employee, New NGC Employee, New NGC Retiree or HII Retiree (including any dependent or beneficiary thereof) nor shall this Employee Matters Agreement be deemed to amend any Benefit Plan or to prohibit New NGC, HII or their respective Affiliates from amending or terminating any Benefit Plan.

     Section 11.7 Effect if Distribution Does Not Occur . If the Distribution does not occur, then all actions and events that are, under this Employee Matters Agreement, to be taken or occur effective as of the Distribution, or otherwise in connection with the Distribution shall not be taken or occur except to the extent specifically agreed by the parties.

     Section 11.8 Incorporation of Separation Agreement Provisions . The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein (references in this Section 11.8 to an “Article” or “Section” shall mean Articles or Sections of the Separation Agreement, and references in the material incorporated herein by reference shall be references to the Separation Agreement): Article V (relating to Mutual Releases; Indemnification); Article VI (relating to Shared Gains and Shared Liabilities); Article VII (relating to Exchange of Information; Confidentiality); Article VIII (relating to Further Assurances and Additional Covenants); Article IX (relating to Termination); Article X (relating to Dispute Resolution); and Article XI (relating to Miscellaneous).

     Section 11.9 No Representation or Warranty . New NGC makes no representation or warranty with respect to any matter in this Employee Matters Agreement, including, without limitation, any representation or warranty with respect to the legal or tax status or compliance of any Benefit Plan, compensation arrangement or Employment Agreement, and New NGC disclaims any and all liability with respect thereto.

[The remainder of this page is intentionally left blank.]

     IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed by their duly authorized representatives.

[Signature Page to Employee Matters Agreement]

EXHIBIT 10.2

INSURANCE MATTERS AGREEMENT

among

NORTHROP GRUMMAN CORPORATION,

NEW P, INC.,

and

HUNTINGTON INGALLS INDUSTRIES, INC.

Dated as of [______]

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			1
Section 1.1 Table of Definitions			1
Section 1.2 Certain Defined Terms			2
Section 1.3 Other Capitalized Terms			2
ARTICLE II SHIPBUILDING INSURANCE POLICIES			2
Section 2.1 Assignment of Shipbuilding Insurance Policies			2
Section 2.2 Assumption of Risk			3
Section 2.3 Assumption of Amounts Payable			3
Section 2.4 Further Assurances			3
Section 2.5 Pending Claims			3
ARTICLE III RETAINED INSURANCE POLICIES			3
Section 3.1 Assignment of Retained Insurance Policies			3
Section 3.2 Pre-Distribution Occurrences			4
Section 3.3 HII’s Financial Obligations for the Retained Insurance Policies			4
Section 3.4 Assumption of Risk			4
Section 3.5 Directors’ and Officers’ Insurance			4
Section 3.6 Northrop Grumman Risk Management Inc. Insurance Policies			4
Section 3.7 Replacement Insurance Policies			5
Section 3.8 Insurance Company Bankruptcy or Insolvency			5
ARTICLE IV COOPERATION			5
Section 4.1 Cooperation in Claims Handling			5
Section 4.2 Information			5
Section 4.3 Retention of Insurance Policies			5
Section 4.4 Certain Actions			5
Section 4.5 Allocation of Amounts			6
Section 4.6 No Agreement to Provide Insurance Management or Risk Management Services			6
Section 4.7 Outside-Entity Insurance Policies			6
ARTICLE V GENERAL PROVISIONS			6
Section 5.1 Effect if Distribution Does Not Occur			6
Section 5.2 Incorporation of Separation Agreement Provisions			6

     INSURANCE MATTERS AGREEMENT, dated as of [______________] (this “ Insurance Matters Agreement ”), among Northrop Grumman Corporation, a Delaware corporation (“ NGC ”), New P, Inc., a Delaware corporation (“ New NGC ”), and Huntington Ingalls Industries, Inc., a Delaware corporation (“ HII ”).

RECITALS

     A. The parties to this Insurance Matters Agreement, together with certain Subsidiaries of NGC, have entered into the Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of the date hereof.

     B. Pursuant to the Separation Agreement, the business of NGC will be separated into two publicly traded companies: (a) HII, which following the Separation will own and conduct, directly and indirectly, the Shipbuilding Business (as defined in the Separation Agreement), and (b) New NGC, which following the Separation will own and conduct, directly and indirectly, the Retained Business (as defined in the Separation Agreement).

     C. NGC, its Subsidiaries, and their respective predecessors have historically maintained various Insurance Policies providing coverage for the Shipbuilding Business and the Retained Business.

     D. The parties desire to enter into this Insurance Matters Agreement to allocate, among themselves, rights in the Insurance Policies and related coverages.

     Section 1.2 Certain Defined Terms . For the purposes of this Insurance Matters Agreement:

          “ Current Retained Insurance Policies ” means Retained Insurance Policies in effect as of the Distribution Date.

          “ Insurance Policies ” means insurance contracts of any kind, including, without limitation, first-party property, primary liability, excess liability, self-insurance, captive insurance company arrangements, reinsurance, surety bonds, and certificates of insurance naming or benefiting NGC or one of its pre-Distribution Subsidiaries, together with the rights, benefits, and privileges that arise thereunder or by virtue of law, except that “Insurance Policies” excludes life and employee benefits insurance. “Insurance Policies” includes insurance contracts issued to Subsidiaries of NGC before NGC acquired such Subsidiaries.

          “ Outside-Entity Insurance Policies ” means any Insurance Policies that (a) are acquired by any entity that is not a member of either Group and (b) name or benefit any New NGC Entity or any HII Entity.

          “ Retained Insurance Policies ” means the Insurance Policies identified on the memorandum exchanged between the parties to this Insurance Matters Agreement entitled “Listing of Retained Insurance Policies.”

          “ Shipbuilding Insurance Policies ” means the Insurance Policies identified on the memorandum exchanged between the parties to this Insurance Matters Agreement entitled “Listing of Shipbuilding Insurance Policies.”

     Section 1.3 Other Capitalized Terms . Capitalized terms not defined in this Insurance Matters Agreement shall have the meanings ascribed to them in the Separation Agreement.

ARTICLE II
SHIPBUILDING INSURANCE POLICIES

     Section 2.1 Assignment of Shipbuilding Insurance Policies . Effective as of the date of the Internal Reorganization, to the extent not already assigned, transferred, conveyed and delivered prior to such date and subject to Section 2.2 of the Separation Agreement, NGC hereby assigns, transfers, conveys and delivers to HII and HII hereby accepts and assumes NGC’s rights and obligations in the Shipbuilding Insurance Policies to the extent that the Shipbuilding Insurance Policies cover Shipbuilding Liabilities. NGC shall use reasonable best efforts to obtain written confirmation from its insurance broker that the Shipbuilding Insurance Policies may be assigned to HII or an HII Entity and shall use reasonable best efforts to obtain any necessary consents identified by its insurance broker to assign the Shipbuilding Insurance Policies.

     Section 2.2 Assumption of Risk . In the event that NGC does not have the right to completely assign the Shipbuilding Insurance Policies to HII, HII shall bear the risk that such coverage is not available and will be obligated at its own expense to obtain replacement coverage, but New NGC shall use reasonable best efforts to assist HII to the extent reasonably necessary to provide HII access to the benefits of the Shipbuilding Insurance Policies. HII shall nonetheless be responsible for handling its own claims and coverage disputes. New NGC shall promptly notify HII if New NGC receives notice from any insurance carrier that NGC does not have the right to assign the Shipbuilding Insurance Policies to HII.

     Section 2.3 Assumption of Amounts Payable . HII shall pay or cause to be paid any self-insured retentions, deductibles, premiums, retrospective premium adjustments, or other amounts payable after the Distribution relating to the Shipbuilding Insurance Policies.

     Section 2.4 Further Assurances . Under the Separation Agreement, HII has assumed or will assume the Shipbuilding Liabilities and is solely responsible for such. HII nevertheless agrees to use its reasonable best efforts to provide the New NGC Group the benefit of the Shipbuilding Insurance Policies to the extent any Person seeks to collect any Shipbuilding Liability against any New NGC Entity. HII shall not cancel, terminate, or amend the Shipbuilding Insurance Policies in a manner that adversely affects coverage for the New NGC Group. HII shall pay all amounts necessary to exhaust or otherwise satisfy all applicable self-insured retentions, deductibles, and retrospective premium adjustments for the Shipbuilding Insurance Policies and related to any Shipbuilding Liability, as well as similar amounts not covered by the Shipbuilding Insurance Policies and related to any of the Shipbuilding Liabilities. New NGC shall not be responsible for letters of credit or surety bonds required to maintain the Shipbuilding Insurance Policies.

     Section 2.5 Pending Claims . Unless otherwise provided in the Separation Agreement, New NGC shall pay to HII all net recoveries received on claims filed by NGC on behalf of the Shipbuilding Business under the Shipbuilding Insurance Policies when such claims were filed prior to the Distribution Date. New NGC shall make payments (net of expenses) to HII within 30 days of receiving the insurance proceeds related to the claims.

ARTICLE III
RETAINED INSURANCE POLICIES

     Section 3.1 Assignment of Retained Insurance Policies . Effective as of the date of the Internal Reorganization, to the extent not already assigned, transferred, conveyed and delivered prior to such date and subject to Section 2.2 of the Separation Agreement, NGC hereby assigns, transfers, conveys and delivers to New NGC and New NGC hereby accepts and assumes NGC’s rights and obligations in the Retained Insurance Policies. NGC shall use reasonable best efforts to obtain written confirmation from its insurance broker that the Retained Insurance Policies may be assigned to New NGC and its Subsidiaries and Affiliates and shall use reasonable best efforts to obtain any necessary consents identified by its insurance broker to assign the Retained Insurance Policies.

     Section 3.2 Pre-Distribution Occurrences . New NGC shall use reasonable best efforts to provide HII the benefit of the Retained Insurance Policies for occurrences, losses, circumstances and other acts or events occurring prior to the Distribution. HII shall make claims under the Retained Insurance Policies directly to the insurer and shall provide New NGC contemporaneous written notice of any such claim. HII may negotiate settlement of such claims under the Retained Insurance Policies independently of the New NGC Group, but shall keep New NGC reasonably advised concerning the status of any such negotiation. HII shall obtain the prior written consent of New NGC, which shall not be unreasonably withheld or delayed, before initiating coverage litigation against any insurer or initiating any legal action against a broker of the Retained Insurance Policies. In no event will HII initiate coverage litigation directly against any New NGC Entity.

     Section 3.3 HII’s Financial Obligations for the Retained Insurance Policies . After the Distribution Date, HII shall, independently and without the involvement of the New NGC Group, pay all amounts necessary to exhaust or otherwise satisfy all applicable self-insured retentions, deductibles, fronted policy program repayments, and any other amounts not covered by the Retained Insurance Policies and related to any claim made on the Retained Insurance Policies by HII. HII also shall pay its proportionate share of any retrospective premium adjustments for the Retained Insurance Policies, according to the protocols which have historically been followed prior to the Distribution. HII shall not be responsible for letters of credit or surety bonds required to maintain the Retained Insurance Policies.

     Section 3.4 Assumption of Risk . In the event that New NGC does not have the right under the Retained Insurance Policies to provide HII the benefit of such Insurance Policies, HII shall bear the risk that such coverage is not available, but New NGC shall at its own cost and expense use reasonable best efforts to assist HII to the extent reasonably necessary to provide HII access to the benefits of the Retained Insurance Policies. HII shall nonetheless be responsible for its own claims handling. New NGC shall promptly notify HII if New NGC receives notice from any insurance carrier that NGC does not have the right to provide HII with the benefits of the Retained Insurance Policies.

     Section 3.5 Directors’ and Officers’ Insurance . For the six-year period commencing immediately after the Distribution, New NGC shall maintain in effect directors’ and officers’ liability Insurance Policies providing coverage for acts or omissions occurring prior to the Distribution with respect to those Persons who are currently covered by NGC’s directors’ and officers’ liability Insurance Policies, including such Persons who become officers, directors or employees of HII, on terms and at limits no less favorable than New NGC’s directors’ and officers’ liability Insurance Policies in any given policy year.

     Section 3.6 Northrop Grumman Risk Management Inc. Insurance Policies . Notwithstanding Section 3.2 of this Insurance Matters Agreement, HII shall retain coverage under certain self-insurance policies issued by Northrop Grumman Risk Management Inc. until March 15, 2011, but only to the extent that Northrop Grumman Risk Management Inc. has reinsurance contracts covering losses incurred by HII during

that period. HII shall, independently and without the involvement of the New NGC Group, pay all amounts necessary to exhaust or otherwise satisfy all applicable self-insured retentions, deductibles, fronted policy program repayments, and any other amounts not covered by reinsurance and related to any claim made on Northrop Grumman Risk Management Inc. Insurance Policies.

     Section 3.7 Replacement Insurance Policies . Except as expressly set forth above, the policy period of all Current Retained Insurance Policies shall be deemed to end as to HII as of the Distribution. HII has arranged and shall be obligated to maintain its own separate replacement Insurance Policies for the period that commences as of the Distribution, and such insurance arrangements shall be separate and apart from the insurance programs of New NGC and its Subsidiaries.

     Section 3.8 Insurance Company Bankruptcy or Insolvency . With regards to the Retained Insurance Policies only, the parties shall use their best efforts to cooperate with one another to maximize the total recovery in the event of any future settlement or other disposition of the liabilities of any insurance company, which shall become insolvent or otherwise seek to avail itself of any scheme of arrangement or bankruptcy proceeding. In addition, the parties shall use their best efforts to allocate to HII any portion of any such recovery which pertains to the Shipbuilding Liabilities.

ARTICLE IV
COOPERATION

     Section 4.1 Cooperation in Claims Handling . Each of New NGC and HII, at the request of the other and at its own cost and expense, shall cooperate with and use reasonable best efforts to assist the other in processing or presenting claims made under any Insurance Policy for the benefit of any insured party.

     Section 4.2 Information . Each of New NGC and HII and their respective Groups shall share such information as is reasonably necessary in order to permit the other to manage and conduct its insurance matters in an orderly fashion. On or before the Distribution, New NGC will provide to HII the best available listing of historic Insurance Policies that provide coverage to HII for occurrences, claims, losses, circumstances and other acts or events on or after April 3, 2001 and electronic copies of all such Insurance Policies in its possession. HII shall be solely responsible for maintaining this information and New NGC shall not be obligated to provide duplicative or additional information following the Distribution.

     Section 4.3 Retention of Insurance Policies . Each of New NGC Entities and HII Entities will use reasonable best efforts to prevent the destruction of any Insurance Policy, to notify the other Group of the proposed destruction of any Insurance Policy, and to give such other Group reasonable opportunity to take possession of such Insurance Policy prior to such destruction.

     Section 4.4 Certain Actions . Except to the extent provided in this Insurance Matters Agreement, no New NGC Entity or HII Entity shall take any action that would

compromise, jeopardize, or otherwise interfere with either Group’s rights under any Insurance Policy. Except as otherwise contemplated by the Separation Agreement, this Insurance Matters Agreement, or any other Ancillary Agreement, after the Distribution, no New NGC Entity or HII Entity shall, without the prior written consent of the other Group, which such consent shall not be unreasonably withheld or delayed, provide any insurance carrier with a release, or amend, modify, settle, compromise, or waive any rights under any Insurance Policy, if such release, amendment, modification or waiver would adversely affect any rights or potential rights of any member of the other Group thereunder. However, nothing in this Section 4.4 shall (a) preclude any member of any Group from presenting any claim or from exhausting any policy limit, (b) require any member of any Group to pay any premium or other amount or to incur any Liability or (c) require any member of any Group to renew, extend or continue any Insurance Policy.

     Section 4.5 Allocation of Amounts . For purposes of the exhaustion of any limits that apply to coverage available under the Insurance Policies, amounts shall be allocated to the Insurance Policies on a first come/first served basis. That means that amounts covered by such Insurance Policies shall be allocated to such Insurance Policies in the order in which such amounts were paid by the insurance companies.

     Section 4.6 No Agreement to Provide Insurance Management or Risk Management Services . Nothing in this Insurance Matters Agreement shall be construed as providing for or creating an obligation to provide insurance management or risk management services.

     Section 4.7 Outside-Entity Insurance Policies . Outside-Entity Insurance Policies are unaffected by this transaction. It will be the responsibility of each Group to monitor and renew any Outside-Entity Insurance Policies benefiting that Group without the involvement of the other Group. However, the parties shall, each at its own cost and expense, use their reasonable best efforts to cooperate and assist one another to assure that appropriate name change amendments are made to any Outside-Entity Insurance Policies necessary to assure that said Outside-Entity Insurance Policies insure the entity that has the Liabilities to which the insurance relates.

ARTICLE V
GENERAL PROVISIONS

     Section 5.1 Effect if Distribution Does Not Occur . If the Distribution does not occur, then all actions and events that are, under this Insurance Matters Agreement, to be taken or occur effective as of the Distribution, or otherwise in connection with the Distribution shall not be taken or occur, except to the extent specifically agreed by the parties.

     Section 5.2 Incorporation of Separation Agreement Provisions . The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein (references in this Section 5.2 to an “Article” or “Section” shall mean Articles or Sections of the Separation Agreement, and references in the material incorporated herein

by reference shall be references to the Separation Agreement): Article V (relating to Mutual Releases; Indemnification); Article VI (relating to Shared Gains and Shared Liabilities); Article VII (relating to Exchange of Information; Confidentiality); Article VIII (relating to Further Assurances and Additional Covenants); Article IX (relating to Termination); Article X (relating to Dispute Resolution); and Article XI (relating to Miscellaneous). In the event of any conflict or inconsistency between any of the foregoing provisions of the Separation Agreement and any provision of this Insurance Matters Agreement, this Insurance Matters Agreement shall prevail with respect to matters governed by this Insurance Matters Agreement.

[The remainder of this page is intentionally left blank.]

     IN WITNESS WHEREOF, the parties have caused this Insurance Matters Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

[Signature Page to Insurance Matters Agreement]

EXHIBIT 10.3

INTELLECTUAL PROPERTY LICENSE AGREEMENT

between

NORTHROP GRUMMAN SYSTEMS CORPORATION

and

NORTHROP GRUMMAN SHIPBUILDING, INC.

Dated as of [________]

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			1
Section 1.1 Table of Definitions			1
Section 1.2 Certain Defined Terms			2
ARTICLE II GRANT OF LICENSES			4
Section 2.1 Grant of Licenses			4
Section 2.2 Have Made Rights			4
Section 2.3 Right to Sublicense			5
Section 2.4 Licensed Software			5
Section 2.5 Delivery of Embodiments of IP			5
Section 2.6 Jointly Developed Intellectual Property			5
ARTICLE III OWNERSHIP			6
Section 3.1 Ownership			6
Section 3.2 Ownership of Improvements and Derivative Works			6
Section 3.3 No Other License			6
Section 3.4 Prosecution and Maintenance			6
ARTICLE IV CONFIDENTIALITY			7
Section 4.1 Proprietary Information			7
Section 4.2 Confidentiality			7
Section 4.3 Limited Exception			8
Section 4.4 Unauthorized Disclosure			8
ARTICLE V REPRESENTATIONS; DISCLAIMER			8
Section 5.1 Mutual Representations			8
Section 5.2 Disclaimer			8
Section 5.3 Limitations on Liability			9
Section 5.4 Indemnification			9
ARTICLE VI TERM			9
Section 6.1 Term			9
ARTICLE VII TRANSFERABILITY			10
Section 7.1 Assignment			10

TABLE OF CONTENTS
(Continued)

		Page
ARTICLE VIII GENERAL PROVISIONS			10
Section 8.1 Amendment and Modification			10
Section 8.2 Waiver			10
Section 8.3 Notices			10
Section 8.4 Interpretation			11
Section 8.5 Entire Agreement			12
Section 8.6 No Third-Party Beneficiaries			12
Section 8.7 Governing Law			12
Section 8.8 Submission to Jurisdiction			12
Section 8.9 Enforcement			13
Section 8.10 Severability			13
Section 8.11 Waiver of Jury Trial			13
Section 8.12 Counterparts			13
Section 8.13 Facsimile Signature			13
Section 8.14 Effect if Distribution Does Not Occur			14

INTELLECTUAL PROPERTY LICENSE AGREEMENT

     INTELLECTUAL PROPERTY LICENSE AGREEMENT, dated as of [______________] (this “ License Agreement ”), between Northrop Grumman Systems Corporation, a Delaware corporation (“ NGSC ”) and Northrop Grumman Shipbuilding, Inc., a Virginia corporation (“ NGSB ”).

RECITALS

     A. NGSC, NGSB, Northrop Grumman Corporation, a Delaware corporation (“ NGC ”), New P, Inc., a Delaware corporation (“ New NGC ”), and Huntington Ingalls Industries, Inc., a Delaware corporation (“ HII ”), have entered into the Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of the date hereof, pursuant to which New NGC intends to distribute to its stockholders its entire interest in HII by way of a stock dividend (the “ Distribution ”).

     B. Following the Distribution, NGSC will be a wholly owned subsidiary of New NGC (which will be renamed “Northrop Grumman Corporation”) and NGSB will be a wholly owned subsidiary of HII and will be renamed “Huntington Ingalls Industries Company.”

     C. The parties wish to set forth their agreements as to certain matters regarding Intellectual Property (as defined below) under which each party shall grant to the other a non-exclusive license of the Intellectual Property owned by such party or any of its Affiliates that is used by the other party in the conduct of their respective businesses and within the Field of Use (as defined below).

     Section 1.2 Certain Defined Terms . For the purposes of this License Agreement:

          “ Affiliate ” of any Person means a Person that controls, is controlled by, or is under common control with such Person; provided , however , that for purposes of this License Agreement, NGSC and its Subsidiaries shall not be deemed to be an Affiliate of NGSB and NGSB and its Subsidiaries shall not be deemed to be an Affiliate of NGSC. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

          “ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

          “ Field of Use ” means, as to any Intellectual Property, the use of such Intellectual Property that the Licensee has made in the ordinary course of its business in the Relevant Usage Period prior to and including the Distribution, including the general manner and scope of such use in the Line of Business for which the Intellectual Property has been used during such Relevant Usage Period. In the event of a dispute between the parties as to whether a particular use by a Licensee of Licensed Intellectual Property licensed to such Licensee is within the applicable Field of Use, the Licensee will have the burden of proof by a preponderance of the evidence.

          “ Governmental Authority ” means any United States or non-United States federal, state, local, territorial, tribal or international court, government, department, commission, board, bureau, agency, official or other legislative, judicial, regulatory, administrative or governmental authority.

          “ Intellectual Property ” or “ IP ” means all of the following intellectual property rights, whether arising under the laws of the United States or the laws of any other jurisdiction: (a) patents, (b) copyrights, (c) trade secrets, know-how and other confidential and proprietary information, and (d) all registrations and applications for registration of any of the foregoing, but excluding (e) trademarks, service marks, domain names and similar rights.

          “ Licensed Intellectual Property ” means all Intellectual Property owned by a party or any of its Affiliates as of the Distribution that, in the Relevant Usage Period prior to or at the time of the Distribution, is being used by the other party or any of its Affiliates in the ordinary course of such other party’s or any of its Affiliate’s businesses.

          “ Licensee ” means, collectively, a party and its Affiliates in their capacity as licensees to which a license of Licensed Intellectual Property is granted by Licensor hereunder.

          “ Licensor ” means, collectively, a party and its Affiliates in their capacity as licensors of Licensed Intellectual Property that is licensed to Licensee hereunder.

          “ Line of Business ” means a set of one or more highly related products which service a particular business need.

          “ Person ” means an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any Governmental Authority, and including any successor, by merger or otherwise, of any of the foregoing.

          “ Relevant Usage Period ” means, in the case of the Licensed Intellectual Property that is described in Schedule A , the applicable period specified therein or, in the case of all other Licensed Intellectual Property, the 12-month period prior to the Distribution.

          “ Software ” means computer software and databases, together with, as applicable, object code, source code, firmware and embedded versions thereof and documentation related thereto.

          “ Subsidiary ” of any Person means any corporation or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided , however , that no Person that is not directly or indirectly wholly

owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

ARTICLE II
GRANT OF LICENSES

     Section 2.1 Grant of Licenses .

          (a) Subject to the terms and conditions of this License Agreement, each Licensor hereby grants to the respective Licensee a non-exclusive, worldwide, fully paid, non-transferable (except as expressly provided in Article VII), irrevocable and perpetual license, solely within such Licensee’s Field of Use, to:

               (i) make (including the right to use any apparatus and practice any method in making), have made, make improvements on, use, import, offer for sale, lease, sell and/or otherwise transfer products and provide services under the patents included in such Licensor’s Licensed Intellectual Property (including any patents that hereafter issue on patent applications that are pending as of the Distribution);

               (ii) use, reproduce, distribute, prepare derivative works of, and publicly perform and publicly display any original works of authorship (or any derivative works based thereon) that are the subject of any of the copyrights included in such Licensor’s Licensed Intellectual Property; and

               (iii) use and exploit any know-how or other trade secrets or proprietary information included in such Licensor’s Licensed Intellectual Property, subject to compliance with the confidentiality obligations set forth in Article IV.

          (b) Each party shall cause its Affiliates to grant the licenses contemplated to be granted by such Affiliates hereunder and to perform all of their obligations imposed hereunder, including the confidentiality obligations set forth in Article IV.

          (c) Each Licensee will, and will cause its Affiliates to, comply with the Field of Use and all other limitations or restrictions imposed under this License Agreement with respect to its and its Affiliates’ use of the Licensed Intellectual Property licensed to it and its Affiliates hereunder.

     Section 2.2 Have Made Rights . The licenses granted in Sections 2.1(a)(i) by the applicable Licensor to the applicable Licensee to have products made by a third party or to import products: (a) apply only when the specifications for such Licensee’s products were created by or specifically for Licensee (either solely or jointly with one or more third parties), (b) extend only to those claims of Licensor’s licensed patents, the infringement of which would be necessitated by compliance with such specifications and (c) do not apply to any methods used, or any products in substantially the same form manufactured or marketed, by such third party, prior to Licensee’s furnishing of such specifications.

     Section 2.3 Right to Sublicense . Each Licensee shall have the right to sublicense freely the rights and licenses granted by the applicable Licensor pursuant to Section 2.1(a) to Licensee’s contractors, sub-contractors and agents for use solely in connection with the operation of Licensee’s business and within the Field of Use. Each Licensee shall ensure that all such permitted sublicensees shall abide by the terms and conditions of this License Agreement, to the extent applicable, and all such grants of sublicenses shall be made in writing and executed by all parties thereto.

     Section 2.4 Licensed Software . The parties agree and acknowledge that any Software that is licensed under this License Agreement shall be licensed only in the form in which it is being used by the Licensee in the ordinary course of its business in the Relevant Usage Period prior to and including the Distribution. Accordingly, if a Licensee is using any source code of any Software licensed to it hereunder by the Licensor in the ordinary course of its business in the Relevant Usage Period prior to and including the Distribution, such Licensee will be permitted to retain such source code and the licenses granted under Section 2.1(a) to such Licensee shall extend to such source code. Notwithstanding the foregoing, for the Software identified on Schedule B hereto that is undergoing improvement or as to which a derivative work is being prepared (“ Improved Software ”), the parties agree and acknowledge that any such Improved Software that is licensed under this License Agreement shall be licensed in such form existing immediately after successful completion of testing of the improvement and/or derivative works that is in process of being made or prepared as of the Distribution, even if such form comes into existence after the Distribution. Accordingly, for such Improved Software that has been used by the Licensee in source code form in the ordinary course of its business in the Relevant Usage Period prior to and including the Distribution, such Licensee will be permitted to obtain such source code in the form existing immediately after such successful completion of testing and the licenses granted under Section 2.1(a) to such Licensee shall extend to such source code. For the avoidance of doubt, this License Agreement provides for the licensing of Intellectual Property that is owned by a party or an Affiliate thereof and nothing in this License Agreement provides for any sublicensing of Software or any other Intellectual Property that is owned by a third party or any assignment of any license of Software or any other Intellectual Property that is owned by a third party.

     Section 2.5 Delivery of Embodiments of IP . To the extent that a Licensee is not in possession as of the Distribution of any embodiment of Licensed Intellectual Property licensed to such Licensee hereunder, the respective Licensor hereby agrees to deliver to such Licensee upon request, as soon as practicable after the Distribution, copies of all such embodiments of such Licensed Intellectual Property. Thereafter, each Licensor shall have no further obligation to deliver any Licensed Intellectual Property, or copies thereof, to each Licensee under this License Agreement. Each Licensor shall have no further access to, or any obligation to maintain or service, any electronic copies of such Licensed Intellectual Property that is delivered to the Licensee.

     Section 2.6 Jointly Developed Intellectual Property . If either party or any of its Affiliates materially contributed to the development of any Intellectual Property that is owned by the other party or any of the other party’s Affiliates as of the Distribution, and such Intellectual Property does not constitute Licensed Intellectual Property that is licensed

to such party and such party’s Affiliates hereunder, the other party agrees that, if such party requests that it and its Affiliates be granted a license to use such Intellectual Property within the scope of their Lines of Business existing as of the Distribution, the other party will consider in good faith granting such requested license.

ARTICLE III
OWNERSHIP

     Section 3.1 Ownership . Each Licensee acknowledges that, as between the parties, each Licensor owns all right, title and interest in and to its Licensed Intellectual Property. Each Licensee agrees that it shall not, directly or indirectly, challenge the validity, enforceability or ownership of the respective Licensor’s Licensed Intellectual Property.

     Section 3.2 Ownership of Improvements and Derivative Works . Each party or its applicable Affiliate will own exclusively all improvements and derivative works created or developed by such party or its Affiliate that are derived from or based on any Licensed Intellectual Property licensed from the other party hereunder, subject to the other party’s retained ownership of the Licensed Intellectual Property on which such improvements and derivative works are based or from which they are derived. Other than for Improved Software as provided in Section 2.4, neither party (nor any Affiliate thereof) shall have any obligation to disclose or license any such improvements or derivative works to the other party.

     Section 3.3 No Other License . Except as expressly provided in this License Agreement, nothing herein shall be construed as granting to a party any license or other rights under any other Intellectual Property rights of the other party whether by implication or estoppel. Nothing herein shall grant either party, in selling or promoting the sale of products or services, the right to directly or indirectly use or refer to the trademarks or trademark type rights of the other party or trademarks or other marks and names similar thereto.

     Section 3.4 Prosecution and Maintenance . Each Licensor shall have the sole and exclusive right, but not the obligation, at its sole cost and expense: (a) to file, prosecute, obtain and maintain, throughout the world, any patents, patent applications and other registrations or applications for registration included in the Licensed Intellectual Property owned by such Licensor, and (b) to conduct or participate, throughout the world, in any interference, reexaminaton, opposition, cancellation, nullification and other interpartes, ex partes or other types of proceedings before the U.S. Patent & Trademark Office and similar authorities, registries or agencies, and all appeals thereof (regardless of forum) involving or relating to such Licensed Intellectual Property. The manner in which any such filing, prosecution, maintenance or any other action is conducted by such Licensor under this Section 3.4 shall be in such Licensor’s sole control and discretion.

ARTICLE IV
CONFIDENTIALITY

     Section 4.1 Proprietary Information . For the purposes hereof, “ Proprietary Information ” of a party (the “ Disclosing Party ”) means all business sensitive and/or proprietary information of the Disclosing Party disclosed to, or in the possession of, the other party (the “ Receiving Party ”), whether disclosed orally, verbally, visually, electronically, in tangible form or otherwise, and regardless of whether marked, denoted or otherwise indicated as “business sensitive,” “proprietary,” “private” or words of similar import. Proprietary Information of Licensor shall include trade secrets and other business sensitive and proprietary information included in the Licensed Intellectual Property.

     Section 4.2 Confidentiality .

          (a) In maintaining the confidentiality of Proprietary Information of the Disclosing Party, the Receiving Party shall exercise the same degree of care that it exercises with its own Proprietary Information, but in no event less than a reasonable degree of care. Without limiting any of the foregoing, the Receiving Party shall not disclose or give access to any such Proprietary Information to any third party, other than its personnel, sublicensees or customers pursuant to contract requirements, without the prior written consent of the Disclosing Party. The Receiving Party shall restrict access to such Proprietary Information to those of its personnel and sublicensees having a strict need for access thereto, and shall use commercially reasonable efforts to ensure that each of its personnel and sublicensees holds in confidence the Proprietary Information of the Disclosing Party in accordance with the terms and conditions hereof. The Receiving Party shall, and shall cause its personnel and sublicensees to, make no use, directly or indirectly, of any Proprietary Information of the Disclosing Party for any purpose other than as authorized hereunder. The Receiving Party shall not copy or reproduce the Proprietary Information or any portion thereof, or remove any tangible copies of the Proprietary Information or any portion thereof from the Receiving Party’s facilities except as reasonably required in connection with exercising the rights licensed hereunder or as expressly permitted by the Disclosing Party.

          (b) The confidentiality obligations contained in Section 4.2(a) shall not apply to any information that contemporaneous written records of the Receiving Party demonstrate (a) was lawfully disclosed to the Receiving Party without restriction by an unrelated third party who does not have any obligations of confidentiality to the Disclosing Party, (b) the Receiving Party independently developed such information prior to the Distribution without any use of or reference to the Proprietary Information of the Disclosing Party or (c) is or becomes part of the public domain through no fault of the Receiving Party, it being understood that if only a portion of any such information is or becomes part of the public domain (including by way of issued patents or published patent applications), the confidentiality obligations of the Receiving Party with respect to the rest of the Proprietary Information shall remain intact without modification.

     Section 4.3 Limited Exception . The obligation of confidentiality and non-disclosure contained in this License Agreement shall not apply to the extent that the Receiving Party is required to disclose any Proprietary Information of the Disclosing Party by a valid subpoena, order or regulation of a governmental agency or a court of competent jurisdiction having jurisdiction over the Receiving Party; provided , however , that the Receiving Party shall not intentionally make any such disclosure without (a) first notifying the Disclosing Party and allowing the Disclosing Party a reasonable opportunity to prevent or limit such disclosure (either by challenging or quashing any such subpoena, order or regulation or obtaining injunctive relief from, or a protective order with respect to, the obligation to make such disclosure), and (b) reasonably cooperating, at Disclosing Party’s expense, with the Disclosing Party’s efforts to prevent or limit such disclosure.

     Section 4.4 Unauthorized Disclosure . The Receiving Party acknowledges and confirms that the Proprietary Information of the Disclosing Party constitutes proprietary information and trade secrets valuable to the Disclosing Party, and that the unauthorized use, loss or outside disclosure of such Proprietary Information shall cause irreparable injury to the Disclosing Party. The Receiving Party shall notify the Disclosing Party immediately upon discovery of any unauthorized use or disclosure of such Proprietary Information, and will cooperate with the Disclosing Party in every reasonable way to help regain possession of such Proprietary Information and to prevent its further unauthorized use. The Receiving Party acknowledges and agrees that monetary damages may not be a sufficient remedy for unauthorized disclosure of Proprietary Information of the Disclosing Party and that the Disclosing Party shall be entitled, without waiving other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction. The prevailing party shall be entitled to recover reasonable attorney’s fees incurred by it in connection with any action commenced by the Disclosing Party against the Receiving Party arising out of or relating to any alleged disclosure of Proprietary Information of the Disclosing Party by the Receiving Party in breach of this License Agreement.

ARTICLE V
REPRESENTATIONS; DISCLAIMER

     Section 5.1 Mutual Representations . Each party represents and warrants that (a) it has the power and authority to enter into this License Agreement and has taken all necessary corporate action to authorize its performance under this License Agreement; (b) this License Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of each such party, enforceable in accordance with its terms; (c) no consent or authorization of, filing with, or notice to any governmental authority is required in connection with its performance under this License Agreement; and (d) its entering into this License Agreement or performance by it hereunder will not violate any federal, state or local licensing or other statute, rule or regulation, or any contractual obligation of such party. Each party agrees to comply with all applicable Laws, rules and regulations in connection with its activities under this License Agreement.

     Section 5.2 Disclaimer . Except as expressly set forth in this License Agreement, each of the licenses of Licensed Intellectual Property granted by a Licensor

hereunder are made “as-is” and “where-is.” Each Licensor hereby disclaims all representations or warranties of any kind, either express or implied, including any warranty of merchantability, fitness for a particular purpose, non-infringement or any other matter with respect to any Licensed Intellectual Property licensed by such Licensor, whether used alone or combined with other products or services.

     Section 5.3 Limitations on Liability . Except for any willful breach of Articles III and IV, under no circumstances shall either party be liable to the other party for indirect, incidental, consequential, punitive or exemplary damages (even if such other party has been advised of the possibility of such damages) arising from a claim for breach of any provision of this License Agreement. Notwithstanding the foregoing, the provisions of this Section 5.3 shall not limit an Indemnifying Party’s indemnification obligations with respect to any Liability that any Licensor Indemnitee may have to any third party that is not an Affiliate of any party.

     Section 5.4 Indemnification . Following the Distribution, each Licensee (an “ Indemnifying Party ”) shall indemnify, defend and hold harmless the respective Licensor and such Licensor’s Affiliates and its and their respective current, former and future directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ Licensor Indemnitees ”), from and against any and all (a) Third Party Claims (as defined in the Separation Agreement) asserted or brought against any of the Licensor Indemnitees based on or relating to the exercise by the Indemnifying Party or any of its Affiliates of the license to use the Licensed Intellectual Property that is granted to such Licensee or any such Affiliates hereunder or otherwise relating to the Indemnifying Party’s or any of its Affiliates’ use of the Licensed Intellectual Property licensed hereunder and (b) all Liabilities relating to, arising out of or resulting from any such Third Party Claims. The notice and other indemnification procedures set forth in Sections 5.4, 5.5 (other than Section 5.5(b)), 5.6, 5.7 and 5.8 of the Separation Agreement that apply to indemnification claims arising under Article V of the Separation Agreement are hereby incorporated by reference and shall apply to any indemnification claims arising under this Section 5.4.

ARTICLE VI
TERM

     Section 6.1 Term . The rights granted to each party under this License Agreement shall be irrevocable and perpetual and shall not be terminable by either party, and such rights shall continue in full force and effect notwithstanding any breach by the other party hereunder; provided that, if any Licensee breaches any limitations or restrictions imposed on it in Sections 2.1, 2.2 or 2.3 with respect to its use of any Licensed Intellectual Property licensed to it hereunder, or materially breaches any confidentiality obligations set forth in Article IV with respect to its use of any Licensed Intellectual Property licensed to it hereunder, then, effective upon 30 days’ prior written notice by the Licensor to the Licensee, such Intellectual Property thereafter shall be excluded from the Licensed Intellectual Property licensed to the Licensee hereunder and, upon the expiration of such 30-day period, Licensee shall cease any and all use of such Licensed Intellectual

Property unless, prior to expiration of such 30-day period, Licensee has fully cured such breach.

ARTICLE VII
TRANSFERABILITY

     Section 7.1 Assignment . This License Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign this License Agreement without the prior written consent of the other party. Notwithstanding the foregoing, either party may freely assign or otherwise transfer this License Agreement or its rights hereunder, in whole or in part, to any of its Affiliates or to a third party in connection with the sale of all or substantially all of the assets of such party or any of its Affiliates to which this License Agreement pertains or in connection with a merger, consolidation, corporate reorganization or any change of control of such party or any of its Affiliates or a sale or divestiture of any of the product lines, operating units or business divisions of such party or any of its Affiliates; provided that (a) the assigning party shall provide written notice to the other party of any such assignment, and (b) such assignee shall agree to assume all applicable obligations of the assigning party hereunder, and to be subject to the terms of this License Agreement. For the avoidance of doubt, any permitted assignee of any license granted under Article II of this License Agreement is subject to the Field of Use and all other limitations or restrictions imposed under this License Agreement with respect to such license, including in particular the Field of Use limitation that limits use of Licensed Intellectual Property to use by and in the Line of Business where and as the Licensed Intellectual Property was used during the Relevant Usage Period prior to the Distribution.

ARTICLE VIII
GENERAL PROVISIONS

     Section 8.1 Amendment and Modification . This License Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party.

     Section 8.2 Waiver . No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

     Section 8.3 Notices . All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon written confirmation of receipt by facsimile, e-mail or

otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(i)		if to NGSC prior to the date on which New NGC relocates its corporate headquarters, to:
		c/o Northrop Grumman Corporation
		1840 Century Park East
		Los Angeles, CA 90067-2199
		Attention: General Counsel
		Facsimile:
(ii)		if to NGSC after the date on which New NGC relocates its corporate headquarters, to:
		c/o Northrop Grumman Corporation
		4101 Washington Avenue
		Newport News, VA 23607
		Attention: General Counsel
		Facsimile:
(iii)		if to NGSB, to:
		c/o Huntington Ingalls Industries, Inc.
		4101 Washington Avenue
		Newport News, VA 23607
		Attention:
		Facsimile:

     Section 8.4 Interpretation . When a reference is made in this License Agreement to a Section, Article or Exhibit such reference shall be to a Section, Article or Exhibit of this License Agreement unless otherwise indicated. The table of contents and headings contained in this License Agreement or in any Exhibit are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this License Agreement. All words used in this License Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Exhibit but not otherwise defined therein shall have the meaning as defined in this License Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this License Agreement as if set forth herein. The word “including” and words of similar import when used in this License Agreement shall mean “including, without limitation,” unless otherwise specified. Where either party’s consent is required hereunder, except as otherwise specified herein, such party’s consent may be granted or

withheld in such party’s sole and absolute discretion. The word “day” when used in this License Agreement shall mean “calendar day,” unless otherwise specified.

     Section 8.5 Entire Agreement . This License Agreement, the Separation Agreement and the Exhibits, Schedules and Appendices hereto and thereto constitute the entire agreement, and supersedes all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the parties with respect to the subject matter hereof. This License Agreement shall not be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any party with respect to the transactions contemplated hereby other than those expressly set forth herein or in any document required to be delivered hereunder. Notwithstanding any oral agreement or course of action of the parties or their representatives to the contrary, no party to this License Agreement shall be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this License Agreement shall have been executed and delivered by each of the parties.

     Section 8.6 No Third-Party Beneficiaries . Nothing in this License Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this License Agreement.

     Section 8.7 Governing Law . This License Agreement and all disputes or controversies arising out of or relating to this License Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of New York (other than Section 5-1401 of the New York General Obligations Law).

     Section 8.8 Submission to Jurisdiction . Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this License Agreement brought by any other party or its successors or assigns shall be brought and determined in any federal court sitting in the Borough of Manhattan in the City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this License Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in New York, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in New York as described herein. Each of the parties further agrees that notice as provided in Section 8.3 shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this License Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the

jurisdiction of the courts in New York as described herein, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this License Agreement, or the subject matter hereof, may not be enforced in or by such courts.

     Section 8.9 Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this License Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this License Agreement and to enforce specifically the terms and provisions of this License Agreement in any federal court sitting in the Borough of Manhattan in the City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

     Section 8.10 Severability . Whenever possible, each provision or portion of any provision of this License Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this License Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this License Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

     Section 8.11 Waiver of Jury Trial . EACH OF THE PARTIES TO THIS LICENSE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS LICENSE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 8.12 Counterparts . This License Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

     Section 8.13 Facsimile Signature . This License Agreement may be executed by facsimile signature and a facsimile signature shall constitute an original for all purposes.

     Section 8.14 Effect if Distribution Does Not Occur . If the Distribution does not occur, then this License Agreement shall automatically be terminated and all actions and events that are, under this License Agreement, to be taken or occur effective as of the Distribution, or otherwise in connection with the Distribution shall not be taken or occur except to the extent specifically agreed by the parties.

[The remainder of this page is intentionally left blank.]

     IN WITNESS WHEREOF, the parties have caused this License Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

[Signature Page to Intellectual Property License Agreement]

EXHIBIT 10.4

TAX MATTERS AGREEMENT

by and between

NEW P, INC.
(to be renamed NORTHROP GRUMMAN CORPORATION)

and

HUNTINGTON INGALLS INDUSTRIES, INC.

Dated as of __________, 2011

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS			2
Section 1.1 Definitions			2
Section 1.2 Table of Additional Defined Terms			7
ARTICLE 2 PREPARATION AND FILING OF TAX RETURNS, PAYMENT OF TAXES DUE AFTER THE DISTRIBUTION DATE, AND ADJUSTMENT REQUESTS			7
Section 2.1 Current Tax Group Federal Consolidated Returns			7
Section 2.2 New NGC Non-Federal Tax Returns			7
Section 2.3 HII Tax Returns			8
Section 2.4 Tax Return Procedures			8
Section 2.5 Adjustment Requests			8
ARTICLE 3 GENERAL INDEMNIFICATION FOR TAXES			8
Section 3.1 Indemnification by New NGC			8
Section 3.2 Indemnification by HII			9
ARTICLE 4 REFUNDS AND CARRYBACKS			9
Section 4.1 Refunds			9
Section 4.2 Carrybacks			9
ARTICLE 5 TAX PROCEEDINGS			11
Section 5.1 Control of Tax Proceedings			11
Section 5.2 Notices Relating to Tax Proceedings			12
Section 5.3 Statute of Limitations			12
ARTICLE 6 PAYMENTS BETWEEN THE PARTIES FOR CERTAIN INCOME TAX ADJUSTMENTS			13
Section 6.1 Payments by HII to New NGC			13
Section 6.2 Payments by New NGC to HII			14
Section 6.3 Threshold Amount			14
Section 6.4 Separate Entity Provisions			15
Section 6.5 Acknowledgement			15
ARTICLE 7 ALLOCATION, CHARACTER, AND TREATMENT OF CERTAIN TAX ITEMS AND TRANSACTIONS			16
Section 7.1 Allocation of Certain Tax Items			16
Section 7.2 Tax Treatment of Payments between the Parties			16
Section 7.3 Tax Treatment of Novations of Shipbuilding Liabilities and Retained Liabilities			17
Section 7.4 Tax Treatment of Equity-Related Compensation			17
Section 7.5 Accounting Methods			18
Section 7.6 Indemnification for Taking Contrary Tax Treatment			19
Section 7.7 Tax Attributes			20