Exhibit 99.1

HUNTINGTON INGALLS INDUSTRIES SAVINGS PLAN

Amendment and Restatement Effective as of July 1, 2021

TABLE OF CONTENTS

 

				Page
ARTICLE 1 INTRODUCTION					1
Section 1.01		Introduction			1
Section 1.02		Spin-Off			1
Section 1.03		Transfer of Assets and Liabilities, Service Credit			2
Section 1.04		Plan Mergers			2
ARTICLE 2 DEFINITIONS					6
Section 2.01		Account			6
Section 2.02		Active Participant			6
Section 2.03		Affiliated Companies			6
Section 2.04		After-Tax Contributions			6
Section 2.05		Annuity Starting Date			6
Section 2.06		Basic Contributions			6
Section 2.07		Board			6
Section 2.08		Break in Service Period			6
Section 2.09		Catch-Up Contributions			7
Section 2.10		Code			7
Section 2.11		Committee			7
Section 2.12		Company			7
Section 2.13		Company Matching Contributions			7
Section 2.14		Company Profit Sharing Contributions			7
Section 2.15		Compensation			7
Section 2.16		Disabled			7
Section 2.17		Disqualified Person			7
Section 2.18		Dividends			7
Section 2.19		Eligible Employee			7
Section 2.20		Employee			7
Section 2.21		Employer			7
Section 2.22		ERISA			8
Section 2.23		ESOP			8
Section 2.24		ESOP Account			8
Section 2.25		5%-Owner			8
Section 2.26		Forfeiture			8
Section 2.27		Highly Compensated Participant			8
Section 2.28		Huntington Ingalls Industries Stock Fund			8
Section 2.29		Inactive Participant			8
Section 2.30		Investment Committee			8
Section 2.31		Investment Manager			8
Section 2.32		IRS			8
Section 2.33		Leased Employee			8
Section 2.34		Leave of Absence			9
Section 2.35		Mandatory Commencement Date			9
Section 2.36		Merged Plans			9

 

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Section 2.37		Northrop Grumman Stock Fund			9
Section 2.38		Participant			9
Section 2.39		Period of Service			9
Section 2.40		Plan			10
Section 2.41		Plan Year			10
Section 2.42		Qualifying Securities			10
Section 2.43		RAC TSD April Transfer Entities			10
Section 2.44		RAC TSD Transfer Entities			10
Section 2.45		RAC TSD July Transfer Entities			10
Section 2.46		Retirement Account Contributions			10
Section 2.47		Roth Catch Up Contributions			10
Section 2.48		Roth Contributions			10
Section 2.49		Special Contribution			11
Section 2.50		Spin-Off			11
Section 2.51		Spouse			11
Section 2.52		Supplemental Contributions			11
Section 2.53		Suspense Account			11
Section 2.54		Tax-Deferred Contributions			11
Section 2.55		Termination of Employment			11
Section 2.56		TSD Entity			11
Section 2.57		Trust or Trust Fund			12
Section 2.58		Trust Agreement			12
Section 2.59		Trustee			12
Section 2.60		Year of Service			12
ARTICLE 3 ELIGIBLE EMPLOYEES					13
Section 3.01		In General			13
Section 3.02		Eligible Employees			13
Section 3.03		Leased Employees			13
Section 3.04		Participants in Other Plans			13
ARTICLE 4 PARTICIPATION					14
Section 4.01		In General			14
Section 4.02		Transfers To Ineligible Positions			14
Section 4.03		Ineligible Positions			14
Section 4.04		Leased Employees			14
Section 4.05		Sub-Plans			14
Section 4.06		Committee Rules for Participation			14
ARTICLE 5 CONTRIBUTIONS					15
Section 5.01		Compensation			15
Section 5.02		Compensation Limit			15
Section 5.03		Basic Contributions			15

 

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Section 5.04		Supplemental Contributions			16
Section 5.05		Company Matching Contributions			16
Section 5.06		Company Profit Sharing Contributions			16
Section 5.07		Contribution Levels			19
Section 5.08		Contribution Elections			20
Section 5.09		Elections for Transferring Employees			20
Section 5.10		Changes in Participant Contributions			21
Section 5.11		Stopping Contributions			21
Section 5.12		Rollover Contributions			21
Section 5.13		Catch-Up Contributions			23
Section 5.14		Retirement Account Contributions			23
Section 5.15		Contributions for Certain Periods of Qualified Military Service			26
Section 5.16		Committee Rules			27
ARTICLE 6 LIMITATIONS ON CONTRIBUTIONS					28
Section 6.01		In General			28
Section 6.02		Dollar Limit on Participant Contributions			28
Section 6.03		Limits on Highly Compensated Participants			29
Section 6.04		Section 415 Limitations			29
Section 6.05		Committee Authority			29
ARTICLE 7 VESTING					30
Section 7.01		In General			30
Section 7.02		Vesting of Retirement Account Contributions			31
Section 7.03		Forfeitures			31
Section 7.04		Application of Forfeitures			31
Section 7.05		Reinstatement of Forfeitures			32
Section 7.06		Change in Service Crediting			32
ARTICLE 8 ACCOUNTS					33
Section 8.01		Participant Accounts			33
Section 8.02		Valuation of Accounts			34
Section 8.03		Benefits Not Assignable			34
ARTICLE 9 INVESTMENTS					35
Section 9.01		In General			35
Section 9.02		Investment Elections and Transfers			35
Section 9.03		Committee Rules			36
ARTICLE 10 POST-EMPLOYMENT AND REQUIRED MINIMUM DISTRIBUTIONS					37
Section 10.01		In General			37
Section 10.02		Termination, Layoff, and Leave			37
Section 10.03		Small Benefits			37

 

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Section 10.04		Required Minimum Distributions			38
Section 10.05		Immediate Rehires			45
Section 10.06		Delaying Payment for Accounts Over $5,000			45
Section 10.07		Commencement of Benefits			45
Section 10.08		Form of Distributions			45
Section 10.09		Time of Election			45
Section 10.10		Valuing Distributions			46
Section 10.11		Committee Rules			46
ARTICLE 11 WITHDRAWALS					47
Section 11.01		Eligibility for Withdrawals			47
Section 11.02		Hardship Withdrawals			47
Section 11.03		Age 591⁄2 Withdrawals			49
Section 11.04		Other In Service Withdrawals			49
Section 11.05		Valuing Withdrawals			49
Section 11.06		Minimum Withdrawals			49
Section 11.07		Committee Rules			49
Section 11.08		Military Reservist Distributions			49
Section 11.09		Military Service Distributions			50
Section 11.10		Restriction on Huntington Ingalls Industries Stock Fund Withdrawals for Officers			50
ARTICLE 12 LOANS					51
Section 12.01		In General			51
Section 12.02		Former Employees			51
Section 12.03		Transferred Plan Loans			51
Section 12.04		Repayment Upon Death			51
Section 12.05		Restriction on Huntington Ingalls Industries Stock Fund Loans for Officers			51
ARTICLE 13 DEATH BENEFITS					52
Section 13.01		In General			52
Section 13.02		Method and Timing of Payment			52
Section 13.03		Form of Distributions			52
Section 13.04		Valuing Death Benefits			52
Section 13.05		Survivor Benefits Related to Military Service			52
Section 13.06		Committee Rules			52
ARTICLE 14 BENEFICIARIES					53
Section 14.01		In General			53
Section 14.02		Married Participants			53
Section 14.03		Determining Marital Status and Spouse			53
Section 14.04		Spousal Consent			53
Section 14.05		Explanation			54

 

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Section 14.06		Failure to Designate Beneficiary			54
Section 14.07		Death of Beneficiary			54
Section 14.08		Committee Rules			54
ARTICLE 15 OTHER RULES ON DISTRIBUTIONS					55
Section 15.01		Missing Payee			55
Section 15.02		Disputes About Payee			55
Section 15.03		Administrative Delays			55
Section 15.04		Facility of Payment			55
Section 15.05		Incorrect Payment of Benefits			55
Section 15.06		Direct Rollover			56
Section 15.07		Annuity Starting Date			57
Section 15.08		Top Heavy Rules			57
Section 15.09		Claims and Issues			57
Section 15.10		Annuity Form of Distribution			57
ARTICLE 16 ADMINISTRATION					59
Section 16.01		In General			59
Section 16.02		The Committee			59
Section 16.03		Resignation of Committee Members			59
Section 16.04		Conduct of Business			59
Section 16.05		Quorum			59
Section 16.06		Voting			59
Section 16.07		Records and Reports of the Committee			59
Section 16.08		Powers of the Committee			59
Section 16.09		Allocation or Delegation of Duties and Responsibilities			60
Section 16.10		Procedure for the Allocation or Delegation of Fiduciary Duties			60
Section 16.11		Expenses of the Plan			61
Section 16.12		Indemnification			61
Section 16.13		Extensions of Time Periods			62
Section 16.14		Corrections Involving Participant Direction			62
Section 16.15		Claims and Appeals; Time Limitations; Exhaustion of Remedies			62
Section 16.16		Qualified Domestic Relations Orders			62
ARTICLE 17 MANAGEMENT OF FUNDS					63
Section 17.01		The Trust			63
Section 17.02		The Trustee			63
Section 17.03		Trust Agreement			63
Section 17.04		Huntington Ingalls Industries, Inc. Stock			63
Section 17.05		The Investment Committee			63
Section 17.06		Resignation of Investment Committee Members			63
Section 17.07		Alternate Members			64

 

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Section 17.08		Actions by the Investment Committee			64
Section 17.09		Investment Responsibilities			64
Section 17.10		Liability and Indemnity			65
ARTICLE 18 AMENDMENT AND TERMINATION					66
Section 18.01		Right to Amend the Plan			66
Section 18.02		Termination or Reduction			66
Section 18.03		Partial Terminations			66
ARTICLE 19 MERGERS					67
Section 19.01		Merger of Plans			67
ARTICLE 20 RETURN OF CONTRIBUTIONS					68
Section 20.01		In General			68
Section 20.02		Exceptions			68
ARTICLE 21 MISCELLANEOUS					69
Section 21.01		Headings			69
Section 21.02		Construction			69
Section 21.03		No Employment Rights			69
Section 21.04		Limitation to Trust Fund			69
Section 21.05		Separability			69
APPENDIX A SECTION 415 LIMITS					70
Section A.01		In General			70
Section A.02		Reductions Among Defined Contribution Plans			70
Section A.03		Compensation			70
Section A.04		Annual Additions			70
Section A.05		Limitation Year			71
Section A.06		Special Aggregation Group			71
APPENDIX B TOP HEAVY PROVISIONS					72
Section B.01		Generally			72
Section B.02		Eligibility for Required Contributions			72
Section B.03		Required Contribution			72
Section B.04		Top-Heavy Minimum			72
Section B.05		Participants Under Defined Benefit Plans			73
Section B.06		Leased Employees			74
Section B.07		Determination of Top Heaviness			74
Section B.08		Calculation of Top-Heavy Ratios			74
Section B.09		Cumulative Accounts and Cumulative Accrued Benefits			74
Section B.10		Other Definitions			76
Section B.11		Affiliated Companies			76
Section B.12		Aggregation Group			77

 

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Section B.13		Compensation			77
Section B.14		Determination Date			77
Section B.15		Hour of Service			77
Section B.16		Key Employee			78
Section B.17		Limitation Year			79
Section B.18		Nonintegrated			79
Section B.19		Special Member			79
Section B.20		Test Period			79
APPENDIX C THE 401(K) AND 401(M) TESTS					80
Section C.01		In General			80
Section C.02		The 401(k) Test			80
Section C.03		K Percentage			80
Section C.04		401(k) Limit			81
Section C.05		Highly Compensated Individual K Percentage Limit			82
Section C.06		Excess Tax-Deferred Contributions			82
Section C.07		Treatment of Excess Tax-Deferred Contributions and/or Roth Contributions			82
Section C.08		The 401(m) Test			83
Section C.09		A&C Percentage			84
Section C.10		Highly Compensated Group Contribution Limit			85
Section C.11		Highly Compensated Individual A&C Limit			86
Section C.12		Excess A&C Contributions			86
Section C.13		Treatment of Excess A&C Contributions			86
Section C.14		Reductions During the Year			87
Section C.15		Unmatched Company Contributions			87
Section C.16		Employee Stock Ownership Plan			87
Section C.17		Compensation			87
APPENDIX D HIGHLY COMPENSATED PARTICIPANTS					88
Section D.01		In General			88
Section D.02		Highly Compensated Participant			88
Section D.03		5%-Owner Test			88
Section D.04		Preceding Plan Year Compensation Test			88
Section D.05		5%-Owner			88
Section D.06		Nonresident Aliens			88
Section D.07		Compensation			88
APPENDIX E MERGED MONEY PURCHASE ACCOUNTS					89
ARTICLE E1 In General					89
Section E1.01		Covered Accounts			89
Section E1.02		Other Provisions Applicable			90

 

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ARTICLE E2 Definitions					91
Section E2.01		In General			91
ARTICLE E3 In-Service Withdrawals					92
Section E3.01		In General			92
Section E3.02		TASC Plan Money Purchase Contributions			92
Section E3.03		Committee Rules			92
ARTICLE E4 Distributions					93
Section E4.01		In General			93
Section E4.02		Small Benefits			93
Section E4.03		Lump Sums			93
Section E4.04		Married Participants			93
Section E4.05		Unmarried Participants			93
Section E4.06		Joint And Survivor Option			93
Section E4.07		Life Annuity Option			93
Section E4.08		Determining Marital Status and Spouse			93
Section E4.09		Spousal Consent			93
Section E4.10		Explanation			94
Section E4.11		Deferral of Commencement			94
Section E4.12		Minimum Distribution Requirements			94
Section E4.13		Committee Rules			94
ARTICLE E5 Death Benefits					95
Section E5.01		In General			95
Section E5.02		Small Benefits			95
Section E5.03		Married Participants			95
Section E5.04		Nonspouse Beneficiaries			95
Section E5.05		Spouse Beneficiaries			95
Section E5.06		Commencement			95
Section E5.07		Determining Marital Status and Spouse			96
Section E5.08		Beneficiaries			96
Section E5.09		Valuing Death Benefits			96
Section E5.10		Minimum Distribution Requirements			96
Section E5.11		Committee Rules			96
ARTICLE E6 Form of Payments					97
Section E6.01		In General			97
APPENDIX F MERGED NON-MONEY PURCHASE PLAN ACCOUNTS					98
ARTICLE F1 In General					98
Section F1.01		Covered Accounts			98
Section F1.02		Other Provisions Applicable			105
ARTICLE F2 Definitions					106
Section F2.01		In General			106
ARTICLE F3 In-Service Withdrawals					107
Section F3.01		In General			107
Section F3.02		EIP and REIP Account Withdrawals			107

 

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Section F3.03		NGR&S and GPS Account Withdrawals			107
Section F3.04		O&M and IAM Account Withdrawals			107
Section F3.05		GSSC PSP Account Withdrawals			107
Section F3.06		CAD Account Withdrawals			108
Section F3.07		Logicon Account Withdrawals			108
Section F3.08		INRI Account Withdrawals			108
Section F3.09		ISA Hourly Account Withdrawals			108
Section F3.10		Naval Plan Account Withdrawals			109
Section F3.11		Geodynamics Plan Account Withdrawals			109
Section F3.12		Xetron RISP Account Withdrawals			109
Section F3.13		TASC Plan Account Withdrawals			109
Section F3.14		TSC Plan Account Withdrawals			109
Section F3.15		S & MS Account Withdrawals			109
Section F3.16		Xontech Account Withdrawals			110
Section F3.17		Avondale Industries, Inc. 401(k) Savings Plan Account Withdrawals			110
Section F3.18		Stoller Newport News Nuclear, Inc. 401(k) Savings Plan and Trust Withdrawals			110
Section F3.19		UniversalPegasus International, Inc. Retirement Plan Withdrawals			110
Section F3.20		AMSEC Employees 401(k) Profit Sharing Plan Withdrawals			111
Section F3.21		Camber Corporation 401(k) Plan Withdrawals			111
Section F3.22		Fulcrum IT Services LLC 401(k) Plan Withdrawals			111
Section F3.23		G2, Inc. 401(k) Profit Sharing Plan & Trust Withdrawals			111
Section F3.24		The PTR Group, LLC Safe Harbor 401(k) Plan Withdrawals			111
ARTICLE F4 Distributions					112
Section F4.01		In General			112
Section F4.02		Small Benefits			112
Section F4.03		Integic Corporation 401(k) Plan			112
Section F4.04		Fulcrum IT Services LLC 401(k) Plan			112
Section F4.05		G2, Inc. 401(k) Profit Sharing Plan & Trust			112
Section F4.06		The PTR Group, LLC Safe Harbor 401(k) Plan			112
ARTICLE F5 Death Benefits					113
Section F5.01		In General			113
Section F5.02		Small Benefits			113
ARTICLE F6 Form of Payments					114
Section F6.01		In General			114
APPENDIX G VETERANS’ REEMPLOYMENT RIGHTS					115
Section G.01		In General			115
Section G.02		Service Credit			115
Section G.03		Make-Up Participant Contributions			115
Section G.04		Make-Up Company Contributions			115

 

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Section G.05		Qualified Veteran			115
Section G.06		Qualified Military Service			116
Section G.07		Maximum Make-Up Amount			116
Section G.08		Make-Up Period			116
APPENDIX H EMPLOYEE STOCK OWNERSHIP PLAN					117
ARTICLE H1 General Provisions					117
Section H1.01		Single Plan			117
Section H1.02		Application of Savings Plan Provisions			117
Section H1.03		Form of Contributions			117
Section H1.04		Vesting			117
Section H1.05		Forfeitures			117
Section H1.06		Section 415 Limitations			117
Section H1.07		Non-Allocation Rules			117
ARTICLE H2 Loan Requirements					119
Section H2.01		In General			119
Section H2.02		Use of Loan Proceeds			119
Section H2.03		Price of Securities			119
Section H2.04		Suspense Account			119
Section H2.05		Restrictions on Securities			119
Section H2.06		Liability and Collateral			119
Section H2.07		Release of Collateral			120
Section H2.08		Payments			120
Section H2.09		Separate Accounting			120
Section H2.10		Default			120
Section H2.11		Interest Rate			120
Section H2.12		Loan Term			120
ARTICLE H3 Loan Repayments					121
Section H3.01		Ordering Rule			121
Section H3.02		Special Contributions			121
Section H3.03		Use of Qualifying Securities			121
ARTICLE H4 Suspense Account					122
Section H4.01		Application			122
Section H4.02		Suspense Account			122
Section H4.03		Income			122
Section H4.04		Rights to Suspense Account Amounts			122
Section H4.05		General Rule for Release from Suspense			122
Section H4.06		Special Election			122
ARTICLE H5 Company Contributions					124
Section H5.01		Special Company Contributions			124
Section H5.02		Allocation of Special Contributions			124
Section H5.03		Section 415 Limitations			124

 

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ARTICLE H6 Dividends					125
Section H6.01		In General			125
Section H6.02		Allocation of Dividends			125
Section H6.03		Loan Repayments			125
Section H6.04		Excess Dividends			125
Section H6.05		Conditioned on Deductibility			125
Section H6.06		Direct Distribution of Dividends			125
Section H6.07		Meaning of “Participant”			126
ARTICLE H7 Allocations of Suspense Account Amounts					127
Section H7.01		In General			127
Section H7.02		Release from Suspense Account			127
Section H7.03		Allocation of Amounts Attributable to Special Contributions			128
Section H7.04		Release of Collateral			128
Section H7.05		Section 415 Limits			128
ARTICLE H8 Voting Rights and Tender Offers					129
Section H8.01		In General			129
Section H8.02		Voting of Qualifying Securities			129
Section H8.03		Tender Offers, Etc.			130
ARTICLE H9 Investments					134
Section H9.01		Huntington Ingalls Industries Stock Fund			134
Section H9.02		Primary Investment			134
ARTICLE H10 Diversification					135
Section H10.01		In General			135
Section H10.02		Eligibility			135
Section H10.03		Diversification Election			135
Section H10.04		Timing of Election			135
Section H10.05		Diversification Rights			135
ARTICLE H11 Distributions					136
Section H11.01		Application			136
Section H11.02		Timing of Distributions			136
Section H11.03		Exception for Financed Securities			136
Section H11.04		Form of Distributions			136
Section H11.05		Condition of Distributions			136
ARTICLE H12 Termination					137
Section H12.01		Termination			137
APPENDIX I HUNTINGTON INGALLS INDUSTRIES TRANSFER PROVISIONS					138
ARTICLE I1 Application and Definitions					138
Section I1.01		Application			138
Section I1.02		Definitions			138
ARTICLE I2 Transfers and Rehires					139
Section I2.01		Service Credit			139
Section I2.02		Former Employees			139

 

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Section I2.03		Continuation of Elections			139
Section I2.04		Transfers to the Northrop Grumman Group			139
ARTICLE I3 Plan Limits and Non-Discrimination Testing					140
Section I3.01		Code Section 401(a)(17) Limits			140
Section I3.02		Code Section 415 Limits			140
Section I3.03		Code Section 402(g) Limits			140
Section I3.04		Non-Discrimination Testing			140
EXHIBIT A COVERAGE PARTICIPATING EMPLOYERS					141
EXHIBIT B FORM POWER OF ATTORNEY					147

 

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ARTICLE 1

Introduction

Section 1.01 Introduction. Effective as of March 31, 2011, Huntington Ingalls Industries, Inc. (the “Company”) established the Huntington Ingalls Industries Savings Plan (the “Plan”), a profit-sharing plan and stock bonus plan that includes an employee stock ownership plan and provides for pre-tax and after-tax Participant contributions and Company matching and profit-sharing contributions. The Plan is intended to be qualified under Section 401(a) and to meet the requirements of Section 401(k) of the Internal Revenue Code of 1986, as amended, and is to be interpreted and administered accordingly. The Plan also is intended to be an “ERISA section 404(c) plan” as described in ERISA Section 404(c) and the regulations thereunder. Plan language concerning the requirements for tax-qualified plans under the Code or ERISA — or the regulations or rulings under the Code or ERISA — is to be interpreted only to implement the statute, regulation, or ruling, unless Plan language explicitly and clearly provides additional rights or benefits. The Plan is established and maintained by Huntington Ingalls Industries, Inc. under EIN 90-0607005.

The Plan was last amended and restated effective as of December 1, 2015. Effective July 1, 2021, the Plan is hereby amended and restated to incorporate those Amendments 1 through 10 that were adopted since the Plan was last restated, to reflect certain changes made to Retirement Account Contributions eligibility and matching contribution formulas effective July 1, 2021, to reflect certain changes made pursuant to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2020, and to reflect and/or clarify certain other administrative practices. No Plan changes were made in connection with the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020.

For the avoidance of doubt, the Plan adopted good faith amendments, effective as of the dates specified herein, implementing those provisions of the SECURE Act providing that required minimum distributions begin for affected Participants no earlier than April 1 of the calendar year following the year the Participant attains age 72 and those changes to the required minimum distribution rules applicable to a Participant’s beneficiaries. The Plan shall be interpreted and administered in accordance with the SECURE Act and any subsequent guidance issued. The Plan was not amended to provide for in-service qualified birth or adoption distributions, to allow in-service distributions at age 59 ¹⁄₂ from grandfathered money purchase accounts, to allow for the distribution of lifetime income investments to the extent any such investments are made available under the Plan, or to implement any disaster relief provided under the Further Consolidated Appropriations Act of 2020 or the Consolidated Appropriations Act of 2021.

Section 1.02 Spin-Off. In connection with Northrop Grumman Corporation’s (“Northrop Grumman”) spin-off of its shipbuilding business, Northrop Grumman underwent an internal reorganization and incorporated the Company on August 4, 2010 as an indirect subsidiary of Northrop Grumman. The Company was spun-off effective March 31, 2011 (the “Spin-Off”) pursuant to a Separation and Distribution Agreement, dated March 31, 2011. Effective as of the Spin-Off, the Company became an independent, publicly traded corporation which owns and operates the shipbuilding business previously owned and operated by Northrop Grumman (through its direct and indirect subsidiaries). Prior to the Spin-Off, Northrop Grumman’s EIN was 95-4840775. After the Spin-Off, Northrop Grumman’s EIN became 80-0640649.

 

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Section 1.03 Transfer of Assets and Liabilities, Service Credit. Coincident with the Spin-Off and as described in that certain Employee Matters Agreement dated March 31, 2011, the Company and its affiliates established a number of qualified defined contribution pension plans that are substantially similar to those plans maintained by Northrop Grumman. Certain employees, former employees, and retirees identified as of the Spin-Off (“HII Participants”) had their account balances under the Northrop Grumman Savings Plan transferred to this Plan. The assets and liabilities attributable to these HII Participants are transferred to this Plan in accordance with Code Section 414(l) and ERISA Section 208.

Section 1.04 Plan Mergers. The following plans have merged into this Plan or into the Northrop Grumman Savings Plan prior to the Spin-Off, effective as of the dates provided in the table below.

(a) Amounts merged into this Plan or into the Northrop Grumman Savings Plan prior to the Spin-Off from the Merged Plans are governed by the terms of this Plan.

(b) Effective as of the dates below, Accounts were established for Employees who, before the merger, had account balances under the Merged Plans. These Employees may not be Active Participants under this Plan unless they become Active Participants by virtue of being hired into a covered position with an Employer. So long as they remain Employees of Affiliated Companies, Inactive Participants are able to change investment options, borrow under Article 12, and make in-service withdrawals.

 

Name of Merged Plans		Merger Effective Dates
Employee Investment Plan of Grumman Corporation (including the merger of the Grumman Corporation Employee Stock Ownership Plan into the Northrop Grumman Corporation Employee Stock Ownership Plan)		August 1, 1995
Northrop Grumman Retirement and Savings Plan		January 1, 1998
Grumman Technical Services, Inc. Aircraft Services Unit (Operations and Maintenance) Capital Accumulation Plan, including the Grumman Technical Services, Inc. 5% Capital Accumulation Plan		April 1, 1998
Grumman Technical Services, Inc. Capital Accumulation and Savings Plan for the Employees Represented by the International Association of Machinists and Aerospace Workers, AFL-CIO		April 1, 1998
Grumman Technical Services, Inc. Represented Employee Investment Plan		April 1, 1998
Grumman Technical Services, Inc. Capital Accumulation Plan SPC — Represented Employees		April 1, 1998
Grumman St. Augustine Corporation Capital Accumulation Plan		April 1, 1998

 

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Name of Merged Plans		Merger Effective Dates
Grumman Aerospace Corporation Electronics Systems Division (Salisbury, Maryland Operations) Capital Accumulation Plan		April 1, 1998
Georgia Production Site Retirement and Savings Plan		April 1, 1998
Grumman Systems Support Corporation Money Purchase Pension Plan, including frozen accounts from the former Grumman Systems Support Corporation Employees Profit Sharing Plan		July 1, 1998
Northrop Grumman Commercial Aircraft Division Salaried Savings and Investment Plan		September 1, 1999
Employee Salary Deferral Plan of Logicon, Inc.		July 28, 2000
Employees Profit Sharing Plan of Logicon, Inc., which includes the Logicon R&D Associates Employees Profit Sharing Plan		July 28, 2000
Employees Profit Sharing Plan of Logicon Eagle Technology, Inc.		July 28, 2000
Logicon Syscon, Inc. Profit Sharing Plan		July 28, 2000
INRI 401(k) and Profit Sharing Plan		July 28, 2000
INRI Money Purchase Plan		July 28, 2000
Northrop Grumman Integrated Systems & Aerostructures (ISA) Sector Represented Employee Savings and Investment Plan (only for ISA Plan participants who (i) were “Returned Business Employees” or (ii) were not “Business Employees” or “Retired Business Employees” on the “Closing Date” or “Applicable Transfer Date,” as the case may be, as defined in the June 9, 2000 Asset Purchase Agreement between Northrop Grumman Corporation and VAC Acquisition Corp. II)		December 15, 2000
Northrop Grumman Naval Systems Division – Cleveland Facility Salaried Employees 401(k) Savings Plan		February 23, 2001
Northrop Grumman Naval Systems Division – Cleveland Facility Hourly Employees 401(k) Savings Plan		February 23, 2001
Northrop Grumman Electronic Sensors & Systems Sector Savings and Investment Plan		April 12, 2001
Employees’ Profit Sharing Plan of Logicon Geodynamics, Inc.		June 22, 2001
Data Procurement Corporation, Inc. 401(k) Retirement Plan		August 17, 2001
Page Communications Engineers, Inc. Employees Trust Fund		September 1, 2001
Northrop Grumman Norden Systems Employee Savings Plan		September 27, 2001

 

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Name of Merged Plans		Merger Effective Dates
Xetron Corporation Money Purchase Pension Plan		September 27, 2001
Xetron Corporation Retirement Income/Savings Plan		September 27, 2001
Perceptics Corporation 401(k) Retirement Plan		September 27, 2002
Northrop Grumman Norden Systems Represented Employee Savings Plan		October 17, 2002
TASC Profit Sharing and Savings Plan		March 28, 2003
TASC Services Corporation Employee Savings Plan		March 28, 2003
Newport News Shipbuilding, Inc. 401(k) Investment Plan for Salaried Employees		January 1, 2004
Continental Maritime Employee Stock Ownership Plan		January 1, 2004
Northrop Grumman Electronic Systems Union Represented Employees Savings and Investment Plan		October 22, 2004
Northrop Grumman Space & Mission Systems Corp. Savings Plan		December 10, 2004
Comptek Amherst Systems, Inc. 401(k) Plan		November 18, 2005
PRB Associates, Inc. 401(k) Plan		November 18, 2005

 

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Name of Merged Plans		Merger Effective Dates
PRC Inc. Retirement Savings Program		December 1, 2007
Redstone Arsenal Retirement Savings Plan		March 31, 2008
Illgen Simulation Technologies, Inc. 401(k) Savings Plan		June 20, 2008
Northrop Grumman Mobile Access Software, Inc. 401(k) Plan		June 20, 2008
Xontech, Inc. Salary Savings and Profit Sharing Plan		October 16, 2008
Xinetics Inc. 401(k) Plan		November 4, 2008
Fibersense Technology Corporation 401(k) Plan		May 6, 2009
Integic Corporation 401(k) Plan		May 20, 2009
3001, Inc. 401(k) Plan		July 1, 2010
Comptek Research Retirement Savings Plan		July 8, 2010
Litton Marine Systems, Inc. 401(k) Savings Plan		July 15, 2010
Avondale Industries, Inc. 401(k) Savings Plan		December 1, 2015
Stoller Newport News Nuclear, Inc. 401(k) Savings Plan and Trust		March 29, 2018
UniversalPegasus International, Inc. Retirement Plan		March 29, 2018
AMSEC Employees 401(k) Profit Sharing Plan		June 29, 2018
Camber Corporation 401(k) Plan		June 29, 2018
Fulcrum IT Services LLC 401(k) Plan		October, 1, 2020
G2, Inc. 401(k) Profit Sharing Plan & Trust		October 1, 2020
The PTR Group, LLC Safe Harbor 401(k) Plan		October 1, 2020

(c) Notwithstanding anything herein to the contrary, all protected benefits, rights and features associated with any Merged Accounts (as identified in Article E1 or as defined in Article F1) shall be maintained under this Plan as required by the law and the Plan shall be administered accordingly.

 

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ARTICLE 2

Definitions

Section 2.01 Account. The Account set up for each Participant. See Article 8.

Section 2.02 Active Participant. An Employee who is currently eligible to make or receive contributions under the Plan.

Section 2.03 Affiliated Companies. Each entity that satisfies the conditions of any of subsections (a) through (d), but only during such periods that such entity satisfies the conditions of any of subsections (a) through (d):

(a) Any corporation that is included in a controlled group of corporations, within the meaning of Code Section 414(b), that includes the Company;

(b) Any trade or business that is under common control with the Company within the meaning of Code Section 414(c);

(c) Any member of an affiliated service group, within the meaning of Code Section 414(m), that includes the Company; and

(d) Any entity required to be included under Code Section 414(o).

Section 2.04 After-Tax Contributions. After-tax Participant contributions whether Basic or Supplemental. See Sections 5.03 and 5.04.

Section 2.05 Annuity Starting Date. This term is defined in Section 15.07.

Section 2.06 Basic Contributions. Participant contributions whether After-Tax, Roth, or Tax-Deferred that are eligible for a Company Matching Contribution. See Section 5.03.

Section 2.07 Board. The Board of Directors of the Company.

Section 2.08 Break in Service Period. Break in Service Period shall mean a period of severance of at least 12 consecutive months commencing on the day after the Employee’s Termination of Employment or the day that marks the first anniversary of an absence due to disability, vacation, leave, layoff, or similar reason, and ending on the date the Employee recommences employment with an Employer. For purposes of determining whether or not an Employee has incurred a Break in Service Period, an Employee’s period of severance shall be deemed to commence on the second anniversary of the Employee’s absence on account of:

(a) Absence by an individual by reason of the individual’s pregnancy;

(b) Absence by an individual by reason of the birth of a child of the individual;

(c) Absence by an individual by reason of the placement of a child with the individual in connection with the adoption of such child by the individual; or

 

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(d) Absence by an individual for purposes of caring for such a child for a period immediately following such birth or placement.

Solely for the purposes of determining whether an Employee has incurred a Break in Service Period, the Employee shall be credited with service during a period of leave for the birth, adoption or placement of a child, to care for a Spouse or an immediate family member with a serious illness or for the Employee’s own illness to the extent required by the Family and Medical Leave Act of 1993 and applicable regulations thereunder.

Section 2.09 Catch-Up Contributions. This term is defined in Section 5.13.

Section 2.10 Code. The Internal Revenue Code of 1986, as amended.

Section 2.11 Committee. The administrator of the Plan as described in Article 16 or its delegate(s).

Section 2.12 Company. Huntington Ingalls Industries, Inc.

Section 2.13 Company Matching Contributions. Employer contributions that match Participants’ Basic Contributions. See Section 5.05.

Section 2.14 Company Profit Sharing Contributions. Employer contributions under Section 5.06 for which no Participant contributions are required.

Section 2.15 Compensation. This term is defined for most contribution purposes in Section 5.01.

Section 2.16 Disabled. Total disability as determined by the Social Security Administration.

Section 2.17 Disqualified Person. A person who is a “disqualified person” within the meaning of Code Section 4975(e)(2).

Section 2.18 Dividends. Dividends on Qualifying Securities whether held in the Suspense Account or allocated to Participants’ ESOP Accounts.

Section 2.19 Eligible Employee. Any Employee who is eligible to participate in the Plan in accordance with Article 3.

Section 2.20 Employee. An individual is an Employee only if he or she is reported on the payroll records of an Affiliated Company as a common law employee. This term does not include any other common law employee or any Leased Employee. In particular, it is expressly intended that an individual not treated as a common law employee by the Affiliated Companies on their payroll records is excluded from Plan participation even if a court or administrative agency determines that the individual is a common law employee.

Section 2.21 Employer. The Company and any Affiliated Company that adopts the Plan with the Board’s permission.

 

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Section 2.22 ERISA. The Employee Retirement Income Security Act of 1974, as amended.

Section 2.23 ESOP. The Huntington Ingalls Industries, Inc. Employee Stock Ownership Plan, a part of the Huntington Ingalls Industries Savings Plan.

Section 2.24 ESOP Account. A subaccount of a Participant’s Account under the Plan to account for allocations, earnings, and distributions with respect to the Participant under the ESOP.

Section 2.25 5%-Owner. This term is defined in Section D.05.

Section 2.26 Forfeiture. The term Forfeiture shall refer to the nonvested portion of a Participant’s account that is forfeited under Section 7.03 after the Participant’s Termination of Employment.

Section 2.27 Highly Compensated Participant. This term is defined in Section D.02.

Section 2.28 Huntington Ingalls Industries Stock Fund. This is described under the ESOP.

Section 2.29 Inactive Participant. A Participant who is not currently eligible to make or receive contributions under the Plan. See Article 4.

Section 2.30 Investment Committee. The committee charged generally with investment responsibility as described in Article 17.

Section 2.31 Investment Manager.

 

(a)

An Investment Manager is:

 

(1)

An Investment Manager as defined under ERISA; or

 

(2)

The Investment Committee.

 

(b)

An Investment Manager is a fiduciary under the Plan.

Section 2.32 IRS. The Internal Revenue Service, United States Department of the Treasury.

Section 2.33 Leased Employee. Any individual who is not an Employee but provides services to an Affiliated Company (or an Affiliated Company and “related persons” under Code Section 414(n)(6)) on a substantially full-time basis for a period of at least one year, under an agreement between an Affiliated Company and any other person and performed under the primary direction or control of an Affiliated Company. In the event that any Leased Employee subsequently becomes an Eligible Employee, then unless the Plan is otherwise excluded by applicable Treasury Regulations from the requirements of Code Section 414(n), the total period

 

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that such former Leased Employee provided services to the Company or an Affiliated Company shall be treated under the Plan, for participation eligibility and vesting purposes as though he or she had been an Employee of the Employer.

Section 2.34 Leave of Absence. An approved leave granted an Employee by an Affiliated Company in accordance with applicable policies of the Affiliated Company for a temporary or indefinite period after which it is expected that the Employee will return to employment with the Affiliated Companies.

Section 2.35 Mandatory Commencement Date. This term is defined in Section 10.04(b). For the avoidance of doubt, the provisions in Article 10 relating to the statutory mandatory commencement of benefits pursuant to Code Section 401(a)(9) override any inconsistent provision in the Plan, including any provision in any Appendix or Exhibit hereof, that relate to such statutory provisions. These provisions are not intended to override Plan provisions that govern the earlier commencement of benefits to Participants and beneficiaries under Plan rules.

Section 2.36 Merged Plans. The qualified retirement plans with accounts that have merged into this Plan or that had been merged into the Northrop Grumman Savings Plan prior to March 31, 2011 to the extent assets attributable to those plans were transferred to this Plan. The Merged Plans are listed in Section 1.04.

Section 2.37 Northrop Grumman Stock Fund. The investment fund the sole purpose of which is to invest in Northrop Grumman Corporation common stock, other than cash or short-term investments necessary to fund Participant transactions or to pay Plan expenses. The fund was liquidated on March 30, 2012.

Section 2.38 Participant. Any Employee or former Employee who has an account balance under the Plan.

Section 2.39 Period of Service.

(a) In General. The term Period of Service refers to the period of time beginning on the day the Employee commences employment with the Company or an Affiliated Company and ending on the earlier of (1) Termination of Employment or (2) the day that marks the first anniversary of an absence due to disability, vacation, leave, layoff, or similar reason (except, in the case of absence due to maternity or paternity leave, the second anniversary of the date the individual is first absent). All individual Periods of Service under the Plan shall be aggregated in determining an Employee’s total Period of Service.

(b) Periods of Severance Treated as Periods of Service. In determining a Participant’s Period of Service, the following periods of severance shall be taken into account:

(1) If an Employee severs from service by reason of a quit, discharge, or retirement and then recommences employment with an Employer within 12 months of the Termination of Employment, the period of severance shall be taken into account;

 

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(2) If an Employee severs from service by reason of a quit, discharge, or retirement during an absence from service of 12 months or less for any reason other than a quit, discharge, retirement, or death, and then recommences employment with an Employer within 12 months of the date on which the Employee was first absent from service, the period of severance shall be taken into account.

Section 2.40 Plan. The Huntington Ingalls Industries Savings Plan.

(a) For purposes of making and receiving contributions, the Plan consists of the Sub-Plans identified in Exhibit A.

(b) For purposes of retaining distribution and withdrawal rights under plans that have been merged into this Plan, several subaccounts are maintained as described in Article 8.

Section 2.41 Plan Year. The calendar year, except the initial Plan Year was the period beginning on March 31, 2011 and ending on December 31, 2011.

Section 2.42 Qualifying Securities. “Qualifying Securities” means common stock issued by the Company (or a corporation which is a member of the same controlled group) that is readily tradable on an established securities market. The term “controlled group of corporations” has the meaning given such term by Code Section 409(l)(4).

Section 2.43 RAC TSD April Transfer Entities. HII Nuclear Inc., and Newport News Nuclear Inc.

Section 2.44 RAC TSD Transfer Entities. RAC TSD April Transfer Entities, RAC TSD July Transfer Entities, and HII Technical Solutions Corporation, collectively.

Section 2.45 RAC TSD July Transfer Entities. Continental Maritime of San Diego, Inc. (became HII San Diego Shipyard Inc., which was divested February 1, 2021).

Section 2.46 Retirement Account Contributions. Employer contributions under Section 5.14 for which no Participant contributions are required.

Section 2.47 Roth Catch Up Contributions. Roth Contributions made in accordance with and subject to the limitations of Code Section 414(v) and the regulations issued under that Code Section.

Section 2.48 Roth Contributions. After tax salary deferral contributions by Participants under Code Section 402A from Compensation paid by an Employer whose payroll system supports the processing of Roth Contributions, as determined by the Employer in its sole discretion. If a Participant is transferred from employment with an Employer whose payroll system supports the processing of Roth Contributions to employment with an Employer whose

 

10

payroll system does not support the processing of Roth Contributions, such Participant’s election to contribute Roth Contributions, if any, shall become an election to contribute the same percentage of Tax Deferred Contributions, subject to the provisions of Article 6.

Section 2.49 Special Contribution. A discretionary contribution made by the Affiliated Companies in addition to any Company Matching Contributions.

Section 2.50 Spin-Off. This term is defined in Section 1.02.

Section 2.51 Spouse. An individual who is lawfully married to an Employee under the law of any U.S. or foreign jurisdiction having the legal authority to sanction marriages, including the common law spouse of an Employee in a legally recognized common law marriage. The term Spouse does not include an individual who has entered into a registered domestic partnership, civil union, or other similar formal relationship with an Employee recognized under the law of any U.S. or foreign jurisdiction that is not denominated as a marriage under the laws of that U.S. or foreign jurisdiction. Notwithstanding any provision of this Plan to the contrary, this provision shall be construed in accordance with federal law.

Section 2.52 Supplemental Contributions. Participant contributions whether After-Tax, Roth, or Tax-Deferred that are not eligible for a Company Matching Contribution. See Section 5.04.

Section 2.53 Suspense Account. An account in the Trust Fund maintained by the Trustee under the ESOP to hold unallocated Qualifying Securities acquired with the proceeds of a loan, Dividends on such unallocated Qualifying Securities, earnings on such Dividends, and any proceeds from the disposition of such unallocated Qualifying Securities.

Section 2.54 Tax-Deferred Contributions. Pre-tax salary deferral contributions by Participants under Code Section 401(k). See Sections 5.03 and 5.04.

Section 2.55 Termination of Employment. The term Termination of Employment shall refer to the date an Employee ceases to be employed by the Company or an Affiliated Company because he or she is discharged, quits, or dies. If a Participant is no longer employed by the Company or an Affiliated Company as a result of a sale, outsourcing of the Participant’s job function, or similar transaction with an unrelated employer that constitutes a severance from employment, he or she will be considered to have a Termination of Employment only to the extent, consistent with Internal Revenue Service interpretations, as determined in the sole discretion of the Committee, that the Plan would remain qualified under Code Sections 401(a) and 401(k) if the Participant was treated as having a Termination of Employment.

Section 2.56 TSD Entity. HII Energy Inc. (formerly known as Newport News Energy Company), HII Mechanical Inc. (formerly known as Newport News Industrial Corporation), HII Nuclear Inc. (formerly known as Stoller Newport News Nuclear, Inc.), Newport News Nuclear Inc., UniversalPegasus International, Inc. (divested February 1, 2021), Universal Ensco Inc. (divested February 1, 2021), HII San Diego Shipyard Inc. (formerly known as Continental Maritime of San Diego, Inc., which employees, contracts and assets were divested February 1, 2021), HII Unmanned Maritime Systems Inc., (formerly known as Undersea Solutions Corporation and which merged into HII Unmanned Systems, Inc. (formerly known as Hydroid,

 

11

Inc.) on January 1, 2021), HII Fleet Support Group LLC (formerly known as AMSEC LLC), HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation), HII Mission Driven Innovative Technical Services LLC (formerly known as Camber Technical Services LLC and which was merged into HII Defense and Federal Solutions, Inc. on January 1, 2021), Veritas Analytics Inc., HII Technical Solutions Corporation, HII Unmanned Systems, Inc. (formerly known as Hydroid, Inc.), Fulcrum IT Services, LLC, The PTR Group, LLC and G2, Inc. (all subsequently merged into HII Defense and Federal Solutions, Inc. on January 1, 2021) and such other entities as identified by the Company as a TSD Entity for employment, payroll and benefits purposes.

Section 2.57 Trust or Trust Fund. The sum of the contributions made to the Plan and held by the Trustee, increased by the amount of any earnings and decreased by the amount of any losses, administrative expenses, and benefit payments.

Section 2.58 Trust Agreement. The agreement or agreements described in Article 17.

Section 2.59 Trustee. The one or more trustees, banks, trust companies, insurers, or other individuals or entities that hold and manage the Trust Fund.

Section 2.60 Year of Service. The term Year of Service shall refer to each twelve month Period of Service.

Notwithstanding anything herein to the contrary, (i) for those Employees who became Eligible Employees on March 27, 2020, as a result of the Company’s acquisition of HII Unmanned Systems, Inc. (formerly known as Hydroid, Inc.) on such date, service with HII Unmanned Systems, Inc. (formerly known as Hydroid, Inc.) shall be treated as service under this Plan to the extent service records have been provided to the Company by HII Unmanned Systems, Inc. (formerly known as Hydroid, Inc.), and (ii) for those Employees who became Eligible Employees on July 1, 2020, in connection with the entities formerly known as Fulcrum IT Services, LLC, The PTR Group, LLC, and G2, Inc. becoming participating employers, service with such entities prior to their respective acquisition dates shall be treated as service under this Plan to the extent service records have been provided to the Company by such employers.    

 

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ARTICLE 3

Eligible Employees

Section 3.01 In General. This Article describes Employees who are eligible to make contributions to the Plan and to have contributions made for them by the Affiliated Companies.

Section 3.02 Eligible Employees. All Employees who are at least 18 years old are Eligible Employees under the Plan, so long as they meet the requirements of (a) and either (b), (c), or (d):

(a) An Employee covered under Exhibit A.

(b) A salaried Employee who is either a citizen or a legal resident of the United States.

(c) An hourly-rated Employee who is either a citizen or a legal resident of the United States.

(d) Other Employees allowed to participate by a written resolution of the Board.

Section 3.03 Leased Employees. Leased Employees are not eligible to make contributions or to have contributions made for them by the Company under the Plan. However, the Company elects to count Leased Employees as permitted by Treasury Regulation Section 1.414(q) 1T, Q&A-7(b)(4).

Section 3.04 Participants in Other Plans. Employees are not covered by this Plan for any Plan Year or portion of a Plan Year if they are actively participating under any other defined contribution plan qualified under Code Section 401(a). Solely for purposes of this Section 3.04, Employees are active participants in another defined contribution plan if they are generally eligible to make or receive contributions under the plan. If an Employee could be covered by more than one plan, some or all of which include this or a similar provision, the Committee will resolve the discrepancy to allow eligibility for one plan only.

 

13

ARTICLE 4

Participation

Section 4.01 In General. All Eligible Employees will become Active Participants in the Plan in accordance with this Article. Employees who are not Eligible Employees but had accounts merged into this Plan or under the Northrop Grumman Savings Plan that were transferred to this Plan in connection with the Spin-Off will become Inactive Participants in the Plan. Only Active Participants are eligible for Company contributions under the Plan and to make contributions.

Section 4.02 Transfers To Ineligible Positions. An Eligible Employee who is transferred to an ineligible position becomes an Inactive Participant and is no longer eligible to receive or make contributions under the Plan. However, a transferred Employee has not terminated employment for purposes of this Plan. So long as they remain Employees of the Affiliated Companies, Inactive Participants may change investment options, borrow under Article 12, and make in-service withdrawals.

Section 4.03 Ineligible Positions. Ineligible positions include all employment not described in Exhibit A and positions outside of the United States if the Employee is not a citizen of the United States. Notwithstanding the preceding sentence, effective as of August 7, 2017 any Employee who is covered under the terms of the collective bargaining agreement between the Employer and the International Association of Machinist and Aerospace Workers shall be an Inactive Participant.

Section 4.04 Leased Employees. Leased Employees may not participate in the Plan.

Section 4.05 Sub-Plans. Multiple contribution formulas apply under the Plan. Sub-Plans are established to assign contribution formulas to each group of Participants. See Article 5 and Exhibit A.

(a) An Eligible Employee may participate in no more than one of the Sub-Plans at any one time.

(b) Contribution levels, including Company Matching Contributions and/or Company Profit Sharing Contributions, are based upon a Participant’s Sub-Plan as described in Article 5.

Section 4.06 Committee Rules for Participation. The Committee may establish further rules for starting, stopping, and restarting active participation in the Plan. The Committee may change those rules at any time without advance notice to the Participants. Those rules may involve procedures for recordkeeping, enrollment confirmation, payroll deduction, receiving and processing Participant transaction requests, procedures related to automatic enrollment, and other matters.

 

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ARTICLE 5

Contributions

Section 5.01 Compensation.

(a) “Compensation” is described in detail in the Standard Definitions and Procedures for Certain Huntington Ingalls Industries, Inc. Retirement Plans, which the Committee or its delegate may amend from time to time.

(b) For the Plan Year in which an Active Participant terminates employment with the Affiliated Companies, Compensation includes only amounts paid before the end of the first full calendar month following the calendar month of termination of employment.

Section 5.02 Compensation Limit. To the extent required by Code Section 401(a)(17), compensation counted under this Plan will be limited in amount.

(a) This Section is only intended to implement Code Section 401(a)(17) and is to be interpreted accordingly.

(b) Compensation may not exceed $290,000 (the 2021 IRS limit, as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B)).

(c) If Code Section 401(a)(17) is amended, any additional limitations on counted compensation apply automatically, without further amendment to the Plan.

Section 5.03 Basic Contributions. Active Participants may make Basic Contributions in accordance with this Section.

(a) Basic Contributions are eligible for a Company Matching Contribution.

(b) A Participant’s Basic Contributions may be made up of After Tax Contributions, Tax Deferred Contributions, Roth Contributions, or any combination thereof. Notwithstanding the preceding sentence, matching contributions made with respect to Employees of (i) a TSD Entity are made only on Tax Deferred Contributions and Roth Contributions, (ii) HII Mechanical Inc. are made only on Tax Deferred Contributions and Roth Contributions until the pay period that includes July 1, 2021, (iii) HII Nuclear Inc. (formerly known as Stoller Newport News Nuclear Inc.) are made only on Tax Deferred Contributions, and (iv) UniversalPegasus International, Inc. (divested February 1, 2021) were made only on Tax Deferred Contributions.

(c) Article 6 may limit the amount of Basic Contributions a Participant may otherwise make under this Section.

(d) The amount of Basic Contributions an Active Participant may make depends upon the Sub-Plan to which he or she is assigned. The amount is the applicable percentage of Compensation provided in the Basic Contributions column of the table in Section 5.07.

 

15

Section 5.04 Supplemental Contributions. Active Participants may make Supplemental Contributions under the rules of this Section.

(a) Supplemental Contributions are not eligible for any Company Matching Contribution.

(b) A Participant’s Supplemental Contributions may be made up of After Tax Contributions, Tax Deferred Contributions, Roth Contributions, or any combination thereof.

(c) Article 6 may limit the amount of Supplemental Contributions a Participant may otherwise make under this Section.

(d) The amount of Supplemental Contributions an Active Participant may make depends upon the Sub-Plan to which he or she is assigned. The amount is the applicable percentage of Compensation provided in the Supplemental Contributions column of the table in Section 5.07.

Section 5.05 Company Matching Contributions. The Employers contribute matching amounts based on Active Participants’ Basic Contributions under the rules of this Section.

(a) The match is calculated for each payroll date rather than annually and is credited for the period for which the corresponding Basic Contribution is credited to the Plan.

(b) Article 6 may prevent the Employers from making any contribution or from making the full contribution under this Section.

(c) The amount of Company Matching Contributions depends upon the Sub Plan to which an Active Participant is assigned. The amount is the applicable percentage of Basic Contributions that the Active Participant makes, as provided in the Company Matching Contributions column of the table in Section 5.07.

Section 5.06 Company Profit Sharing Contributions. The Employers make Company Profit Sharing Contributions for certain Active Participants under the rules of this Section.

(a) The rules of Article 6 may prevent the Employers from making any contribution or from making the full contribution under this Section.

(b) Company Profit Sharing Contributions are paid to the Trust for each Plan Year within the time prescribed by law, including extensions of time, for filing the Company’s federal income tax return for the Plan Year. Contributions may be made at different times by the Employers for different Employees.

(c) The amount of Company Profit Sharing Contributions depends upon the Sub-Plan to which an Active Participant is assigned. The amount is the applicable percentage of Compensation provided in the Company Profit Sharing Contributions column of the table in Section 5.07.

 

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(d) Notwithstanding anything else in the Plan to the contrary, Participants who are employees of HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation), HII Mission Driven Innovative Technical Services LLC (formerly known as Camber Technical Services LLC and which subsequently merged into HII Defense and Federal Solutions, Inc. on January 1, 2021), or Veritas Analytics Inc. as of June 28, 2018 are eligible to receive a discretionary contribution, as soon as administratively practicable following July 30, 2018, in an amount equal to a percentage of Base Compensation earned while employed at HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation), HII Mission Driven Innovative Technical Services LLC (formerly known as Camber Technical Services LLC and which subsequently merged into HII Defense and Federal Solutions, Inc. on January 1, 2021), or Veritas Analytics Inc., respectively, from January 1, 2018 until June 30, 2018. For purposes of this Section 5.06(d) “Base Compensation” means regular base pay (including sick pay, vacation pay and holiday pay, but excluding LWOP pay and the additional amounts paid pursuant to the Service Contract Act).

(e) Notwithstanding anything else in the Plan to the contrary,

(1) Eligible Employees who are employees of HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation), HII Mission Driven Innovative Technical Services LLC (formerly known as Camber Technical Services LLC and which subsequently merged into HII Defense and Federal Solutions, Inc. on January 1, 2021), or Veritas Analytics Inc. as of July 1, 2018 and who are covered under the terms of the collective bargaining agreement between the Employer and the International Association of Machinist and Aerospace Workers and its Local W-24 are eligible to receive a nondiscretionary contribution, as soon as administratively practicable following July 1, 2018, in an amount equal to (i) four percent (4%) of Compensation earned while employed at HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation), HII Mission Driven Innovative Technical Services LLC (formerly known as Camber Technical Services LLC and which subsequently merged into HII Defense and Federal Solutions, Inc. on January 1, 2021), or Veritas Analytics Inc., respectively, from April 1, 2018 until April 9, 2018.

(2) Effective April 10, 2018, Eligible Employees who are employees of HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation), HII Mission Driven Innovative Technical Services LLC (formerly known as Camber Technical Services LLC and which subsequently merged into HII Defense and Federal Solutions, Inc. on January 1, 2021), or Veritas Analytics Inc. and who are covered under the terms of the collective bargaining agreement between the

 

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Employer and the International Association of Machinist and Aerospace Workers and its Local W-24 are eligible to receive a nondiscretionary contribution, in an amount equal to four percent (4%) of Base Compensation.

(3) “Base Compensation” for this Section 5.06(e) means for each week the product of (i) the sum (not to exceed 40 hours) of the respective employee’s regular working hours and other non-working paid hours (e.g., sick time, holiday time, vacation hours, etc.); multiplied by (ii) the respective employee’s base rate as set forth in the applicable collective bargaining agreement.

(f) Notwithstanding anything else in the Plan to the contrary, any Eligible Employee who is or becomes an Employee of the entities formerly known as The PTR Group, LLC or G2, Inc. on or after July 1, 2020 (the date those employers became participating employers in the Plan) is eligible to receive a nondiscretionary contribution in an amount equal to four percent (4%) of Compensation while such Eligible Employee remains employed by the entities formerly known as The PTR Group, LLC or G2, Inc. Any Eligible Employee who is an Employee of the entities formerly known as The PTR Group, LLC or G2, Inc. on December 20, 2020, and who becomes an Employee of HII Defense and Federal Solutions, Inc. on December 21, 2020 (the date on which the Employees were transferred to HII Defense and Federal Solutions, Inc., which was prior to January 1, 2021, the date on which the The PTR Group, LLC and G2, Inc. entities merged into HII Defense and Federal Solutions, Inc.), shall remain eligible to receive a nondiscretionary contribution in an amount equal to four percent (4%) of Compensation while such Eligible Employee remains employed by HII Defense and Federal Solutions, Inc. In addition, any Eligible Employee who becomes an Employee of HII Defense and Federal Solutions, Inc. on or after December 21, 2020 and is assigned to BPC Code NCA (the division formally associated with the entities formerly known as The PTR Group, LLC and G2, Inc.), shall be eligible to receive a nondiscretionary contribution in an amount equal to four percent (4%) of Compensation while such Eligible Employee remains employed by HII Defense and Federal Solutions, Inc.

Discretionary and non-discretionary contributions made under this Section 5.06 are referred to collectively as “Employer Contributions” and are subject to the 3-year graded vesting schedule specified in Section 7.01(3).

 

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Section 5.07 Contribution Levels. The following table provides the contribution levels for Sections 5.03-5.06, based upon the Sub-Plan to which an Active Participant is assigned. See Exhibit A for Sub-Plan assignments.

 

SUB- PLAN		BASIC CONTRIBUTIONS		SUPPLEMENTAL CONTRIBUTIONS		COMPANY MATCHING CONTRIBUTIONS		COMPANY PROFIT SHARING CONTRIBUTIONS
A		0-8%		0-67% (0-27% for HCEs*)		100% of first 2 percentage points of Basic Contributions			0	%
						50% of next 2 percentage points of Basic Contributions   25% of next 4 percentage points of Basic Contributions
CC		0-4%		0-71% (0-31% for HCEs*)		100% of first 2 percentage points of Basic Contributions   50% of next 2 percentage points of Basic Contributions			0	%
D		0-8%		0-67% (0-27% for HCEs*)		0%			0	%
GG		0-4%		0-71% (0-31% for HCEs*)		Effective July 7, 2014, for those participants employed by Avondale Engineering and Construction Co.:   100% of first 1 percent of Basic Contributions   50% of next 2 percent of Basic Contributions			0	%
H (aka AMSEC)		Varies (see matching formula)		75% minus Basic Contributions		45% of Basic Contributions Up to $2,500			0	%
I (aka Camber or CM)		0-4%		0-71% (0-31% for HCEs*)		100% of first 2 percentage points of Basic Contributions   50% of next 2 percentage points of Basic Contributions			0	%
HD		0-8%		0-67% (0-27% for HCEs*)		100% of first 2 percentage points of Basic Contributions			0	%

 

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SUB- PLAN		BASIC CONTRIBUTIONS		SUPPLEMENTAL CONTRIBUTIONS		COMPANY MATCHING CONTRIBUTIONS		COMPANY PROFIT SHARING CONTRIBUTIONS
						50% of next 6 percentage points of Basic Contributions
AA		0-6%		0-69% (0-29% for HCEs*)		100% of first 6 percentage points of Basic Contributions			0	%
AB		0-8%		0-67% (0-27% for HCEs*)		100% of first 8 percentage points of Basic Contributions			0	%

 

*	“HCEs” means Employees who are Highly Compensated Participants for the Plan Year.

(1) Newport News and Ingalls Match Philosophy Beginning July 1, 2021. As a general rule, Employees of the Company’s Newport News and Ingalls divisions who are not eligible for pension accruals or Retirement Account Contributions on or after July 1, 2021, will be eligible for an enhanced match pursuant to Sub-Plans AA or AB, as applicable. Employees who are eligible for pension accruals or Retirement Account Contributions on or after July 1, 2021 will be eligible for matching contributions pursuant to Sub-Plan A.

Section 5.08 Contribution Elections.

(a) An Active Participant may elect to make contributions by filing an authorization with the Committee. In the authorization, the Participant:

(1) Agrees to be bound by the terms of the Plan,

(2) Chooses the percentages of Compensation that he or she wishes to contribute, and

(3) Authorizes the Employer to withhold his or her contributions from his or her paychecks.

(b) If an Active Participant is hired or rehired and makes no affirmative election to contribute to the Plan pursuant to Section 5.08(a) within a period of time after the Active Participant is hired or rehired, as established by the Committee, then the Active Participant shall be deemed to have initially elected a Tax Deferred Contribution equal to two percent (2%) of Compensation.

The Committee may provide further rules and procedures for these authorizations, which rules and procedures may be changed at any time without advance notice to Participants.

Section 5.09 Elections for Transferring Employees. Beginning March 25, 2021, if an Employee transfers from an ineligible position to a position that makes him or her an Eligible Employee, his or her contribution election shall be governed by the auto-enrollment provisions of Section 5.08.

 

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Section 5.10 Changes in Participant Contributions.

(a) An Active Participant may change the amount of his or her contributions and select a new percentage of contributions as often as permitted under rules established by the Committee.

(b) The Committee may establish procedures whereby an Active Participant who is automatically enrolled in the Plan pursuant to Section 5.08(b) and who makes no change to his or her deemed election by a date established by the Committee shall be deemed to have elected to increase his or her contribution percentage by a designated percentage until the Active Participant reaches a designated maximum contribution.

(c) The Committee may establish the rules and procedures governing changes in contributions, rules providing for when contribution changes become effective, through what means an Active Participant may change the contribution percentage and procedures that allow an Active Participant to make a single election that automatically escalates the Active Participant’s contribution percentage. These rules and procedures may be changed at any time without advance notice to Participants.

Section 5.11 Stopping Contributions. An Active Participant may stop making all contributions under rules prescribed by the Committee.

(a) In order to resume making contributions, a Participant must elect to begin contributions again in accordance with the rules and procedures of the Committee.

(b) The Committee may specify further rules and procedures for these changes, including timing rules for when the contributions cease, which rules and procedures may be changed at any time without advance notice to Participants.

Section 5.12 Rollover Contributions.

(a) Subject to (b), (c), (d), and (e), an Eligible Employee may contribute to the Plan an “eligible rollover distribution” from an “eligible retirement plan.”

(1) An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the Eligible Employee described in Code Section 402(c)(4) (including any distribution attributable to an Eligible Employee’s Spouse as described in Code Section 402(c)(9)), 403(b)(8), or 408(d)(3), except that an eligible rollover distribution does not include:

(A) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Eligible Employee or the joint lives (or joint life expectancies) of the Eligible Employee and the Eligible Employee’s designated beneficiary, or for a specified period of ten years or more;

 

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(B) any distribution to the extent the distribution is required under Code Section 401(a)(9); or

(C) any distribution made upon hardship of the Eligible Employee.

The term “eligible rollover distribution” includes after-tax money, but only to the extent that money is transferred to the Plan in a direct trustee-to-trustee transfer. The term “eligible rollover distribution” also includes a distribution of a Roth amount only if it is a direct rollover from another Roth elective deferral account under an applicable retirement plan described in Code Section 402A(e)(1) and only to the extent the rollover is permitted in accordance with Code Section 402(c).

(2) An “eligible retirement plan” is:

(A) an individual retirement account described in Code Section 408(a), including a Roth individual retirement account described in Code Section 408A;

(B) an individual retirement annuity described in Code Section 408(b) (other than an endowment contract);

(C) an annuity plan described in Code Section 403(a);

(D) a qualified trust described in Code Section 401(a);

(E) an eligible deferred compensation plan described in Code Section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state; or

(F) an annuity contract described in Code Section 403(b).

In addition, a Participant may contribute to the Plan an “eligible rollover distribution” from any of the Northrop Grumman Electronic Systems Pension Plan, Huntington Ingalls Industries Electronic Systems Union Represented Employees Pension Plan, Huntington Ingalls Industries Space & Mission Systems Corp. Salaried Pension Plan, or Northrop Grumman Retirement Value Plan.

(b) The amounts rolled into the Plan will be allocated to a subaccount for rollover contributions. In addition, if applicable, any Roth or other after-tax money rolled into the Plan will be allocated to separate subaccounts for rollover contributions of after tax money.

 

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(c) The option to make rollover contributions under (a) is available only in accordance with procedures established by the Committee.

(d) The Committee may condition acceptance of a rollover contribution under (a) upon its reasonable conclusion that the distributing plan is qualified. The Committee may, for example, require written confirmation as described in Treasury Regulation Section 1.401(a)(31) 1, Q&A-13(b) or any successor guidance. The Committee may establish rules concerning the acceptance of rollover contributions. These rules may be changed at any time without advance notice to Eligible Employees or Participants.

(e) If an Eligible Employee makes a rollover contribution that the Committee later determines does not qualify as an eligible rollover contribution, the Committee will distribute to the Employee as soon as practicable the improper amount standing to the Employee’s credit in the rollover contribution subaccount, valued as of the time of the distribution.

(f) Rollovers may be withdrawn as provided under Article 11. In addition, any rollover amounts invested in the Huntington Ingalls Industries Stock Fund are subject to the distribution rules of the ESOP.

(g) Rollovers may be invested under the rules of Article 9 in the same manner as the rest of the Participant’s Account.

Section 5.13 Catch-Up Contributions. In accordance with, and subject to the limitations of Code Section 414(v) and the regulations issued under that section:

(a) All Employees who are eligible to make elective deferrals under the Plan and who are projected to attain age 50 before the end of the tax year (“Catch-Up Eligible Participants”) may elect to defer an amount in excess of the maximum contribution level provided in Section 5.07 up to the limits under Code Section 414(v) (“Catch-Up Contributions”), which shall be inclusive of any Roth Catch-Up Contributions.

(b) If a Catch-Up Eligible Participant’s elective deferrals exceed the otherwise applicable limits on elective deferrals or annual additions of Code Section 401(a)(30) or 415(c), or of Plan Section 5.07, those deferrals shall be treated as Catch-Up Contributions.

Such Catch-Up Contributions shall be taken into account for purposes of Plan Section 5.05 (Matching Contributions), but shall not be taken into account for purposes of Sections 6.02 (deferral limitation) and 6.04 (Code Section 415 limitation). The Plan will not be treated as failing to satisfy Code Section 401(a)(4), 401(k)(3), 410(b), or 416, as applicable, because a Participant makes Catch-Up Contributions.

Section 5.14 Retirement Account Contributions. The Employers shall make Retirement Account Contributions for certain Active Participants under the rules of this Section.

 

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(a) An Employee who was eligible for Retirement Account Contributions under the Northrop Grumman Savings Plan as of March 31, 2011 shall be eligible for such contributions under this Plan effective March 31, 2011 so long as he or she remains an Eligible Employee and meets the following requirements: (1) satisfies the eligibility requirements contained in Section 3.02, (2) is employed in a Cash Balance Participating Business Unit (as determined under the Huntington Ingalls Industries, Inc. Cash Balance Program), and (3) is not eligible to participate in a defined benefit plan maintained by the Company or any Affiliated Company.

Employees hired or rehired by an Employer on or after March 31, 2011 who (1) satisfy the eligibility requirements contained in Section 3.02, (2) are employed in a Cash Balance Participating Business Unit (as determined under the Huntington Ingalls Industries, Inc. Cash Balance Program), and (3) are not eligible to participate in a defined benefit plan maintained by the Company or any Affiliated Company shall be eligible to receive a Retirement Account Contribution pursuant to this Section 5.14.

Employees hired or rehired on or after March 31, 2011 by an Affiliated Company that is not an Employer who (1) subsequently transfer to employment with an Employer that is a Cash Balance Participating Business Unit (as determined under the Huntington Ingalls Industries, Inc. Cash Balance Program), (2) satisfy the eligibility requirements contained in Section 3.02 after such transfer, and (3) are not eligible to participate in a defined benefit plan maintained by the Company or any Affiliated Company shall be eligible to receive a Retirement Account Contribution pursuant to this Section 5.14.

(b) Notwithstanding anything in this Plan to the contrary:

(1) An Employee of a RAC TSD April Transfer Entity shall be eligible to receive Retirement Account Contributions pursuant to this Section 5.14 if (1) such Employee was eligible to receive Retirement Account Contributions under the second paragraph of Section 5.14(a) on April 9, 2018; (2) such Employee obtained employment with a RAC TSD April Transfer Entity via a direct transfer from the Cash Balance Participating Business Unit through which such Employee was previously eligible for Retirement Account Contributions under clause (1) of this sentence; and (3) such Employee does not terminate employment with such RAC TSD April Transfer Entity.

(2) An Employee of HII Technical Solutions Corporation shall be eligible to receive Retirement Account Contributions pursuant to this Section 5.14 if (1) such Employee was eligible to receive Retirement Account Contributions under the second paragraph of Section 5.14(a) on June 30, 2018; (2) such Employee obtained employment with HII Technical Solutions Corporation via a direct transfer from the Cash Balance Participating Business Unit through which such Employee was previously eligible for Retirement Account Contributions under clause (1) of this sentence; and (3) such Employee does not terminate employment with HII Technical Solutions Corporation.

 

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(3) An Employee of a RAC TSD July Transfer Entity shall be eligible to receive Retirement Account Contributions pursuant to this Section 5.14 if (1) such Employee was eligible to receive Retirement Account Contributions under the second paragraph of Section 5.14(a) on June 30, 2018; and (2) such Employee does not terminate employment with such RAC TSD July Transfer Entity.

(c) In the event an Employee of a RAC TSD Transfer Entity eligible for Retirement Account Contributions under Section 5.14(b) terminates employment with the Company and all Affiliated Companies, in no event shall such Employee again be eligible for Retirement Account Contributions from a RAC TSD Transfer Entity, even upon subsequent re-hire or transfer to a RAC TSD Transfer Entity. In the event an Employee of a RAC TSD Transfer Entity eligible for Retirement Account Contributions under Section 5.14(b) transfers employment to the Company or an Affiliated Company which is not a RAC TSD Transfer Entity and subsequently transfers employment back to a RAC TSD Transfer Entity without any termination of employment, such Employee shall again be eligible for Retirement Account Contributions upon re-employment by a RAC TSD Transfer Entity.

(d) Notwithstanding anything in this Plan to the contrary, Employees of UniversalPegasus International, Inc. (divested February 1, 2021), Universal Ensco Inc. (divested February 1, 2021), HII Defense and Federal Solutions, Inc. (formerly known as HII Mission Driven Innovative Solutions Inc. and also formerly known as Camber Corporation, including Employees of HII Mission Driven Innovative Technical Solutions (formerly known as Camber Technical Services LLC) Fulcrum IT Services Inc., The PTR Group, LLC, and G2, Inc., which entities merged into HII Defense and Federal Solutions, Inc.), Veritas Analytics, Inc., HII Fleet Support Group LLC (formerly known as AMSEC LLC) and HII Unmanned Systems, Inc. (formerly known as Hydroid, Inc.) are not eligible to receive Retirement Account Contributions.

(e) Retirement Account Contributions are calculated and credited for each payroll date rather than annually, and are paid to the Trust for each Plan Year within the time prescribed by law, including extensions of time, for filing the Company’s federal income tax return for the Plan Year.

(f) The rules of Article 6 may prevent the Employers from making any contribution or from making the full contribution under this Section.

 

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(g) Participants who satisfy the eligibility in subsection (a) above shall be credited with a Retirement Account Contribution each pay period in an amount determined as a percentage of Compensation for such pay period in accordance with the following table:

 

Participant’s Age		Percentage of Compensation
Less than 35			3	%
35-49			4	%
50 or older			5	%

A Participant’s age shall be determined as of December 31 of the applicable Plan Year.

(h) [RESERVED]

(i) July 1, 2021 RAC Elimination for Certain Employees. Notwithstanding anything in this Section 5.14 to the contrary, effective July 1, 2021, (i) non-represented Employees hired or rehired by a participating Employer on or after July 1, 2021, and (ii) Participants who transfer employment after June 30, 2021 from a participating Employer and who, as of such transfer date, are not eligible for Retirement Account Contributions, are not eligible to receive Retirement Account Contributions on or after such hire, rehire or transfer date.

Section 5.15 Contributions for Certain Periods of Qualified Military Service. This Section 5.15 shall apply with respect to a Participant who becomes Disabled or dies during a period of qualified military service, as determined under Code Section 414(u). The Company shall make a Company Matching Contribution, a Company Profit Sharing Contribution, and a Retirement Account Contribution, as applicable, on behalf of the Participant to the extent that such contributions would have been made under the terms of the Plan, as modified by this Section 5.15, if the Participant had been reemployed by an Employer on the date immediately preceding his or her disability or death, as applicable, and then terminated employment on the date of his or her disability or death.

The Company Matching Contributions shall be determined based on the Participant’s average Tax Deferred Contributions, Roth Contributions, After Tax Contributions, and Catch Up Contributions for the 12 months immediately preceding the period of qualified military service, or if shorter his or her actual period of continuous service with an Employer. The Company Profit Sharing Contributions and Retirement Account Contributions shall be determined based on either: (a) the Compensation that the Participant would have received during the period of qualified military service if the Participant had continued to be employed by the Employer, determined by the Committee in accordance with the Code and applicable regulations; or (b) if the amount in clause (a) is not reasonably certain, the Participant’s Compensation from the Employer during the 12-month period (or, if shorter, his or her actual period of continuous service with the Employer) immediately preceding the start of such qualified military service. Notwithstanding the foregoing, the amounts contributed under this Section 5.15 shall be limited by application of Article 6 during the year(s) to which the contributions relate and shall be reduced by any Company Matching Contributions, Company Profit Sharing Contributions, and Retirement Account Contributions actually made on behalf of the Participant during such period of qualified military service.

 

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Section 5.16 Committee Rules. Contributions will be made and credited to the Trust Fund under the rules and procedures of the Committee, which rules and procedures may be changed at any time without advance notice to Participants.

 

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ARTICLE 6

Limitations on Contributions

Section 6.01 In General. This Article describes the federal tax law limitations on contributions to the Plan on behalf of Highly Compensated Participants and other limitations that apply to all Participants.

Section 6.02 Dollar Limit on Participant Contributions.

(a) Except to the extent permitted under Section 5.13 and Code Section 414(v), a Participant’s Tax-Deferred Contributions and Roth Contributions (along with similar contributions under any plan maintained by the Affiliated Companies) may not exceed $19,500 (the 2021 IRS limit, as adjusted) in any Plan Year:

(b) For Plan Years after 2011, the limit will be adjusted in accordance with guidance issued by the Secretary of the Treasury.

(c) Treatment of Excess Tax-Deferred Contributions.

(1) If a Participant elects a percentage of Compensation to be contributed as Tax-Deferred Contributions and/or Roth Contributions that exceeds the limit under this Section, any excess will be contributed as After-Tax Contributions. Similarly, if a Participant makes Tax-Deferred Contributions and/or Roth Contributions to the Plan and another plan maintained by an Affiliated Company, any excess will be contributed as After Tax Contributions. Either of such elections shall revert to Tax Deferred Contributions and/or Roth Contributions at the beginning of the next Plan Year, provided such a Participant makes no affirmative change to his or her election after the recharacterization as After Tax Contributions.

(2) If a Participant makes Tax-Deferred Contributions and/or Roth Contributions to the Plan and another plan maintained by an employer that is not an Affiliated Company (or any combination of plans under (1) above and this paragraph) and those Tax-Deferred Contributions and/or Roth Contributions collectively exceed the limit of this Section, the Participant may elect, in accordance with rules and procedures established by the Committee, to either have such excess contributions recharacterized as After-Tax Contributions or receive a distribution of a part or all of the excess amounts.

(d) The Participant’s election to receive a distribution of an excess amount must include the Participant’s certification that the specified amount is an excess Tax-Deferred Contribution and/or Roth Contribution.

(e) The Participant’s election must be made not later than the first March 1st following the close of the Plan Year in which the excess deferral occurred, and the excess amount specified by the Participant will be recharacterized or distributed not later than the first April 15th following the close of the Plan Year in which the excess deferral occurred.

 

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Any excess amount distributed shall include income allocable to such amount through the end of the Plan Year to which such excess amount is attributable.

(f) If the Participant fails to make an election, the excess will be contributed as After-Tax Contributions.

(g) Participants who are Employees of a TSD Entity must affirmatively elect to make After-Tax Contributions to the Plan. Any excess Tax-Deferred Contributions and/or Roth Contributions made by these Employees will not be automatically re-characterized as After-Tax Contributions. For the avoidance of doubt, the excess Tax-Deferred Contributions and/or Roth Contributions of any TSD Entity Employee will be distributed unless such TSD Entity Employee affirmatively elects, in accordance with rules and procedures established by the Committee, to have such excess contributions re-characterized as After-Tax Contributions.

Section 6.03 Limits on Highly Compensated Participants. All Participant and Company contributions for Highly Compensated Participants are subject to the special limitations imposed by Code Sections 401(k) and 401(m). These rules are designed so that the amount of contributions for Highly Compensated Participants is limited based on the amount of contributions made for non-Highly Compensated Participants. See Appendix C for details.

Section 6.04 Section 415 Limitations. Except to the extent permitted under Section 5.13 and Code Section 414(v) (related to Catch-Up Contributions), the maximum amount of contributions to any Participant’s Account in any Plan Year may not exceed the lesser of $58,000 (the 2021 IRS limit, as indexed in accordance with published IRS guidance) or 100% of the Participant’s Compensation for the year. In certain cases, benefits under other plans may apply toward these limits. See Appendix A for details.

Section 6.05 Committee Authority. The Committee has the authority to reduce contributions during the Plan Year, to repay contributions, and to forfeit amounts to protect the tax qualification of the Plan and for reasons of administrative convenience.

 

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ARTICLE 7

Vesting

Section 7.01 In General. Except as provided in Section 7.02 and subject to Section 5.06, a Participant’s interest in his or her Account shall at all times be fully vested, subject to Article 6 and Appendix A. Notwithstanding anything in the previous sentence to the contrary:

(1) [RESERVED]

(2) [RESERVED]

(3) TSD Vesting. Any Employee of a TSD Entity who (i) is not a Participant in the Plan as of June 30, 2018; or (ii) fails to continuously remain a Participant in the Plan after June 30, 2018 and, subsequent to such failure, again becomes a Participant in the Plan, shall vest in any Company Matching Contributions contributed by a TSD Entity in accordance with the following schedule:

 

Years of Vesting Service		Vested Percentage of TSD Entity Company Matching Contribution
0			0	%
1			33	%
2			66	%
3			100	%

For the avoidance of doubt, with regard to any Employee of a TSD Entity who was a Participant as of June 30^th but who fails to continuously remain a Participant in the Plan as described in clause (ii), above, and subsequently again becomes a Participant in the Plan, the vesting schedule of this subparagraph (3) shall apply to any Company Matching Contributions contributed by a TSD Entity after the date the failure to continuously remain a Participant in the Plan, as described in (ii), above, occurs.

(4) San Diego Shipyard Sale. Notwithstanding anything herein to the contrary, in connection with the Company’s closing (“Titan Closing”) on the sale of its San Diego Shipyard employees, contracts and assets to Titan Acquisition Holdings or an affiliate thereof (“Titan”)

 

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on February 1, 2021 (“Titan Closing Date”), the following Participants will be fully vested in their Accounts as of the date they become employees of Titan:

(i) An active Employee who (a) becomes an employee of Titan as of the Titan Closing Date, and (b) reports to work with Titan on the first business day immediately following the Titan Closing Date; and

(ii) An Employee who (a) is on a leave of absence (“LOA”) and receiving benefits under a short-term or long-term disability plan sponsored by the Company as of the Titan Closing Date, (b) returns from such LOA and resumes active employment within 180 days of the Titan Closing Date, and (c) becomes an employee of Titan within such 180 day period.

(5) Pegasus Sale. Notwithstanding anything herein to the contrary, in connection with the Company’s closing (“PMC Capital Closing”) on the sale of UniversalPegasus International, Inc. to PMC Capital Partners, LLC or an affiliate thereof (“PMC Capital”) on February 1, 2021 (“PMC Capital Closing Date”), the following Participants will be fully vested in their Accounts as of the PMC Capital Closing Date:

(i) An active Employee of UniversalPegasus International, Inc. as of the PMC Capital Closing Date; and

(ii) An Employee of UniversalPegasus International, Inc. who is on a leave of absence (“LOA”) and receiving benefits under a short-term or long-term disability plan sponsored by the Company as of the PMC Capital Closing Date.

Section 7.02 Vesting of Retirement Account Contributions.

(a) Except as provided in subsection (b) next below, a Participant will be fully vested in his or her Retirement Account Contributions, and earnings thereon, upon the completion of three Years of Service.

(b) Notwithstanding subsection (a) above, a Participant who is an Employee shall be fully vested in his or her Retirement Account Contributions, and earnings thereon, as of the earliest of the following dates: (1) the date of his or her 65th birthday, (2) the date of his or her death, or (3) the date he or she becomes Disabled. A Participant shall also be fully vested in his or her Retirement Account Contributions, and earnings thereon, if Employer contributions to the Plan are completely discontinued or if the Plan is terminated.

Section 7.03 Forfeitures. If a Participant’s Termination of Employment occurs and such Participant receives a distribution of his or her vested Account balance under the Plan, the portion of his or her Account balance that is not vested shall be forfeited. Otherwise, the portion of his or her Account balance that is not vested shall be forfeited only after such Participant has incurred a 5-year Break in Service Period. A Participant who terminates with a zero vested Account balance is deemed to have received a distribution of his or her vested Account balance.

Section 7.04 Application of Forfeitures. To the extent not used in the Plan Year to restore Participants’ Accounts pursuant to Section 7.05 or to pay expenses in accordance with Section 16.11, the Committee shall apply Forfeitures to reduce Company contributions due for the Plan Year in which they arise. Any Forfeitures in excess of the amounts applied to reduce

 

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Company contributions and to restore Participants’ Accounts in such Plan Year shall be carried forward to restore Participants’ Accounts, to reduce Company contributions, and to pay Plan expenses in accordance with Section 16.11 due for succeeding Plan Years. In the event that Forfeitures arise in the year the Plan terminates, such Forfeitures shall be used to restore Participants’ Accounts and the excess, if any, shall be used to reduce Company contributions (if any) due for the Plan Year and to pay Plan expenses in accordance with Section 16.11. Notwithstanding anything in the Plan to the contrary, Forfeitures related to Participants of a particular Employer will be used to reduce such Employer’s share of expenses and then to reduce such Employer’s share of Company contributions, as determined in accordance with Committee procedures.    

Section 7.05 Reinstatement of Forfeitures. If upon Termination of Employment a Participant incurred a Forfeiture, and if he or she is reemployed by the Company before he or she has incurred a Break in Service Period of five years, then the balance of his or her Account that was forfeited pursuant to Section 7.03, unadjusted by any gains or losses, shall be reinstated upon rehire. The restored balance shall be funded, first, by Forfeitures and, second, by additional Company contributions, which shall be due by the end of said Plan Year. Thereafter, the balance of his or her reinstated Account that is considered vested shall be determined in accordance with Section 7.02 as if the Participant had remained continuously employed by the Company, but excluding the Break in Service Period in determining Years of Service.

Section 7.06 Change in Service Crediting. If an amendment to the Plan or a transfer from employment as an Employee covered under another qualified plan maintained by the Employer or an Affiliated Company results in a change in the method of crediting eligibility and/or vesting service with respect to a Participant between the hours of service crediting method set forth in Section 2530.200b-2 of the Department of Labor Regulations and the elapsed-time crediting method set forth in Section 1.410(a)-7 of the Treasury Regulations, each Participant with respect to whom the method of crediting service is changed shall have his service determined in the manner set forth in Section 1.410(a)-7(f)(1) of the Treasury Regulations, which are incorporated herein by reference.

 

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ARTICLE 8

Accounts

Section 8.01 Participant Accounts. An Account is maintained for each Participant having an amount to his or her credit under the Plan. The Account keeps track of a Participant’s benefits. The rules for valuations and allocations of earnings, losses, expenses, and Forfeitures are covered by other provisions of this Plan.

Subaccounts shall be maintained to hold the following types of contributions:

 

(1)

Tax Deferred;

 

(2)

After Tax;

 

(3)

Roth;

 

(4)

Rollover (excludes rollover of Roth contributions);

 

(5)

Roth Rollover;

 

(6)

Company Match;

 

(7)

Company Profit Sharing;

 

(8)

Retirement Account;

 

(9)

Qualified Nonelective;

 

(10)

Prior Plan Pre Tax;

 

(11)

Prior Plan After Tax;

 

(12)

[RESERVED];

 

(13)

Prior Plan MPP;

 

(14)

Prior Plan Company;

 

(15)

Prior Plan Safe Harbor;

 

(16)

Prior Plan Roth;

 

(17)

Prior Plan QNEC;

 

(18)

Prior Plan ESOP;

 

(19)

Prior Plan Company 5 Yr;

 

(20)

NNS/PCI Employer;

 

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(21)

NNS/PCI Pre-Tax;

 

(22)

NNS Rollover;

 

(23)

NNS After-Tax;

 

(24)

Company 3 Yr;

 

(25)

Company Match 3 Yr;

 

(26)

[RESERVED]; and

 

(27)

Employer Contributions.

Section 8.02 Valuation of Accounts.

(a) The assets of the Trust Fund will be valued as of the end of each business day as defined by and in accordance with the rules of the Committee. These rules may be changed at any time without advance notice to Participants.

(b) Valuations take into account earnings and losses of the Trust Fund along with appreciation or depreciation, expenses, and distributions. The valuation method is established by the Committee and may be changed at any time without advance notice to Participants.

(c) The allocation of expenses and other items listed in (b) is made in accordance with the Committee’s rules and procedures, which may be changed at any time without advance notice to Participants.

(d) The Committee may, under unusual circumstances, direct that Accounts be valued as of a date other than that provided under its normal rules to protect the financial integrity of the Plan or for other reasons the Committee deems appropriate.

Section 8.03 Benefits Not Assignable. An interest in a Participant’s Account may not be sold, assigned, used as security (except for Plan loans under Article 12), or transferred in any way by any Participant or beneficiary except as may be provided in a qualified domestic relations order under Code Section 414(p) or in accordance with a levy or garnishment under the Federal Debt Collection Procedures Act or the Mandatory Victims Restitution Act.

 

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ARTICLE 9

Investments

Section 9.01 In General. The Investment Committee will establish a number of different investment funds or other investment options for the Plan. The Investment Committee may change the funds or other investment options from time to time, except that the Plan shall maintain the Huntington Ingalls Industries Stock Fund in accordance with Appendix H.

Section 9.02 Investment Elections and Transfers.

(a) Participants may elect how future contributions to their Accounts will be invested in the various investment funds and may change their elections from time to time.

(b) Except as provided in (c), Participants may elect to make transfers of previously contributed amounts plus earnings among the different investment funds.

(c) Amounts may be transferred to or from the Huntington Ingalls Industries Stock Fund only as provided under the ESOP.

(d) An election or change of election made under this Section is within the independent control of the Participant or beneficiary. To the extent this control is exercised, no person who is otherwise a fiduciary will be liable for any loss or breach resulting from the Participant’s or beneficiary’s exercise of control. The Committee and Trustee will comply with the Participant’s or beneficiary’s investment instruction unless it would result in a prohibited transaction under ERISA or the Code, generate taxable income to the Trust Fund, or result in an event described in 29 CFR Section 2550.404c-1(d)(2)(ii).

(e) The Investment Committee may establish rules and procedures whereby, in the absence of an affirmative election, an Active Participant or beneficiary is deemed to have elected an investment fund that is a “qualified default investment alternative” under 29 CFR Section 2550.404c-5(e). The Investment Committee may, in its sole direction, apply such deemed investment election to an Active Participant who is automatically enrolled in the Plan pursuant to Section 5.08(b) and to any other situation involving a failure by an Active Participant or beneficiary to provide investment instruction, provided such rules and procedures are consistent with 29 CFR Section 2550.404c-5 and any final regulations or other guidance issued thereunder.

(f) Notwithstanding the preceding provisions of this Section 9.02 and except as necessary under Section 16.16, Company policy provides that Employees who are officers subject to Section 16 of the Securities Exchange Act of 1934 and other appointed or elected officers of the Company may not, absent prior approval of the office of the Corporate Secretary of the Company, make any investment elections impacting, or transfer into or out of, the Huntington Ingalls Industries Stock Fund outside the window period specified by the Executive Vice President and Chief Legal Officer of the Company. Except as determined by the Executive Vice President and Chief Legal Officer of the Company, each window period shall begin the second day following the release of the Company’s quarterly or annual statement of sales and earnings and end as of the 30th day following such announcement. The restrictions in this subsection (f) shall be implemented by the Plan as soon as administratively feasible after March 31, 2011.

 

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Section 9.03 Committee Rules. Selections of investments, changes, and transfers by participants must be made according to the Committee’s rules and procedures.

(a) The Committee may prescribe rules addressing, among other matters, limits on amounts that may be transferred and procedures for electing transfers.

(b) The Committee may prescribe valuation rules for purposes of investment elections and transfers. Those rules may, in the Committee’s discretion, apply averaging methods to determine values. The Committee may also change the methods it uses for valuation from time to time.

(c) The Committee may prescribe the periods and frequency with which Participants may change investment elections and make transfers.

(d) If an Employee transfers from an ineligible position (see Section 4.03) to a position that makes him or her an Eligible Employee and such Eligible Employee was previously a Participant in the Plan, his or her investment elections at the time of his or her prior participation will be applied under the Plan when he or she recommences participation in accordance with the rules and procedures determined by the Committee. If an Employee transfers from an ineligible position to a position that makes him or her an Eligible Employee and such transferring Employee was not previously a Participant in the Plan, his or her investment elections will be made in accordance with Section 9.02.

(e) The Committee may change its rules and procedures under this Article at any time without advance notice to Participants.

 

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ARTICLE 10

Post-Employment And Required Minimum Distributions

Section 10.01 In General. When a Participant terminates employment with the Affiliated Companies, becomes Disabled, or reaches age 70¹⁄₂, distributions may be made under this Article. Effective with respect to minimum distributions required to be made under Code Section 401(a)(9) after December 31, 2019 (“RMD Effective Date”), such distributions will begin no earlier than April 1st of the calendar year following the year the affected Participant attains age 72 and references herein to age 70 ¹⁄₂ shall instead refer to age 72, as the context requires. For purposes hereof, an “affected Participant” is a Participant born after June 30, 1949. For the avoidance of doubt, the provisions in this Article 10 relating to the statutory mandatory commencement of benefits pursuant to Code Section 401(a)(9) override any inconsistent provision in the Plan, including any provision in any Appendix or Exhibit hereof, that relate to such statutory provisions. These provisions are not intended to override Plan provisions that govern the earlier commencement of benefits to Participants and beneficiaries under Plan rules.

(a) Distributions on account of a Participant’s death are made under Article 13.

(b) Distributions of a Participant’s Merged Accounts are made under Appendix E or F, whichever applies.

Section 10.02 Termination, Layoff, and Leave. When a Participant:

(a) terminates employment for any reason,

(b) becomes Disabled, or

(c) is laid off,

the Participant may elect to have his or her entire Account paid to him or her as soon as possible.

Section 10.03 Small Benefits.

(a) If a Participant’s vested Account equals $1,000 or less at the time of the distribution, the Account shall be distributed in a single lump sum in cash as soon as administratively practicable.

(b) If a Participant’s vested Account exceeds $1,000, but does not exceed $5,000 at the time of the distribution, the Account shall be distributed in the form of a direct rollover to an individual retirement account as designated by the Committee unless the Participant timely elects an immediate lump sum distribution or to have such distribution paid directly to an eligible retirement plan as described in Section 15.06(b). For purposes of this subsection (b):

(1) The determination of whether the value of a Participant’s vested Account exceeds $1,000 shall be made by considering the Participant’s Roth Account and his or her other Accounts under the Plan as accounts held under two separate plans (within the meaning of Code Section 414(l), in accordance with Treasury Regulations Section 1.401(k)-1(f)(4)(ii)); and

 

37

(2) The determination of whether the value of a Participant’s vested Account exceeds $5,000 shall be made without regard to that portion of the Participant’s vested Account that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

(c) Except as otherwise provided in this Section 10.03, the determination of the value of a Participant’s Account balance under subsections (a) and (b) shall include his or her Money Purchase Accounts under Appendix E and Merged Accounts under Appendix F.

(d) A Participant who terminates with a zero vested Account balance is deemed to have received a distribution of his or her vested Account balance.

Section 10.04 Required Minimum Distributions.

(a) Mandatory Commencement. Distribution of a Participant’s entire Account will commence in accordance with this Section 10.04.

(b) Required Minimum Distributions.

(1) General Rules.

(A) Effective Date. The provisions of this Section 10.04(b) shall apply for determining required minimum distributions for calendar years beginning on or after January 1, 2016, as amended by the SECURE Act as of the RMD Effective Date.

(B) Statutory Requirements. The provisions of this Section 10.04(b) will take precedence over any inconsistent provisions of the Plan.

(C) Treasury Regulations Incorporated. All distributions required under this Section 10.04(b) will be determined and made in accordance with the Treasury Regulations under Code Section 401(a)(9).

(2) Time and Manner of Distribution.

(A) Mandatory Commencement Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the April 1 immediately following the later of (i) the calendar year in which the Participant attains age 70 ¹⁄₂ or (ii) if so elected by the Participant under subsection (c), the calendar year in which the Participant retires.

 

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(B) Death of Participant before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

(i) If the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, then distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 ¹⁄₂, if later.

(ii) If the Participant’s surviving Spouse is not the Participant’s sole Designated Beneficiary, then distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(iii) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(iv) If the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Section 10.04(b)(2)(B), other than Section 10.04(b)(2)(B)(i), will apply as if the surviving Spouse were the Participant.

For purposes of this Section 10.04(b)(2)(B) and Section 10.04(b)(4), unless Section 10.04(b)(2)(B)(iv) applies, distributions are considered to begin on the Participant’s Mandatory Commencement Date. If Section 10.04(b)(2)(B)(iv) applies, distributions are considered to begin on the date distributions are required to begin to the surviving Spouse under Section 10.04(b)(2)(B)(i). If distributions under an annuity purchased from an authorized annuity provider irrevocably commence to the Participant before the Participant’s Mandatory Commencement Date (or to the Participant’s surviving Spouse before the date distributions are required to begin to the surviving Spouse under Section 10.04(b)(2)(B)(i)), the date distributions are considered to begin is the date distributions actually commence.

 

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(C) Forms of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an authorized annuity provider or in a single sum on or before the Mandatory Commencement Date, as of the first Distribution Calendar Year distributions will be made in accordance with Sections 10.04(b)(3) and (4). If the Participant’s interest is distributed in the form of an annuity purchased from an authorized annuity provider, distributions under that annuity will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury Regulations.

(3) Required Minimum Distributions during Participant’s Lifetime.

(A) Amount of Required Minimum Distribution for Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

(i) the quotient obtained by dividing the Participant’s Account Balance by the distribution period in the Uniform Lifetime Table set forth in Treasury Regulations Section 1.401(a)(9)-9, using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or

(ii) if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s Spouse, the quotient obtained by dividing the Participant’s Account Balance by the number in the Joint and Last Survivor Table provided in Treasury Regulations Section 1.401(a)(9)-9, using the Participant’s and Spouse’s attained ages as of the Participant’s and Spouse’s birthdays in the Distribution Calendar Year.

(B) Lifetime Required Minimum Distributions Continue through Year of Participant’s Death. Required minimum distributions will be determined under this Section 10.04(b)(3) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death.

(4) Required Minimum Distributions after Participant’s Death.

(A) Death On or After Date Distributions Begin.

(i) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be

 

40

distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows:

(a) The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(b) If the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving Spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using the surviving Spouse’s age as of the Spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving Spouse’s death, the remaining Life Expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse’s birthday in the calendar year of the Spouse’s death, reduced by one for each subsequent calendar year.

(c) If the Participant’s surviving Spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

(ii) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(B) Death before Date Distributions Begin.

(i) Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in Section 10.04(b)(4)(A).

 

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(ii) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(iii) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, and the surviving Spouse dies before distributions are required to begin to the surviving Spouse under Section 10.04(b)(2)(B)(i), this Section 10.04(b)(4)(B) will apply as if the surviving Spouse were the Participant.

(5) Definitions.

(A) Designated Beneficiary. The individual who is designated as the beneficiary under Article 14 and is the designated beneficiary under Code Section 401(a)(9) and Treasury Regulations Section 1.401(a)(9)-4, Q&A-1.

(B) Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year containing the Participant’s Mandatory Commencement Date. For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Section 10.04(b)(2)(B). The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s Mandatory Commencement Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s Mandatory Commencement Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

 

42

(C) Life Expectancy. Life expectancy as computed under the Single Life Table in Treasury Regulations Section 1.401(a)(9)-9.

(D) Participant’s Account Balance. The Account balance as of the last valuation date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions made and allocated or Forfeitures allocated to the Account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The Account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year.

(6) SECURE Act Requirements. The provisions of this subsection apply as of the RMD Effective Date, are intended to reflect only changes made to the Code by the SECURE Act, and shall be administered in accordance with such changes and any guidance issued thereunder notwithstanding anything contained in the Plan, including any Article, Appendix, or Exhibit, to the contrary.

(A) Delay of the Mandatory Commencement Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Mandatory Commencement Date. For Plan purposes, The “Mandatory Commencement Date” is April 1 immediately following the later of (i) the calendar year in which the Participant attains age 72 or (ii) if so elected by the Participant under subsection (c), the calendar year in which the Participant retires.

(i) Exception for 5% Owners. For purposes of determining a Participant’s Mandatory Commencement Date, an affected Participant will be treated as more than a 5% owner if he or she was a 5% owner (as defined in Code Section 416(i)(1)(B)) as to the Plan Year ending in the calendar year the Participant attains age 72.

(B) Mandatory Spousal Distributions. If the Participant dies before the Participant’s Mandatory Commencement Date and the Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary, then distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the

 

43

calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 72, if later.

(C) Required Minimum Distributions to Beneficiaries. With respect to Participants who die on or after January 1, 2020:

(i) 10-Year Rule. If the distributee of a deceased Participant’s Account is a Designated Beneficiary who is not an Eligible Designated Beneficiary, then the Plan will distribute the Account in full no later than December 31 of the 10th year following the year of the Participant’s death.

(ii) Beneficiary Death. If an Eligible Designated Beneficiary dies before receiving distribution of the Beneficiary’s entire interest in the Participant’s Account, the Plan will distribute that interest in full no later than December 31 of the 10th year following the year of the Eligible Designated Beneficiary’s death. Similarly, if a Participant died before January 1, 2020, the limitations of this subparagraph 6(C) shall apply to distributions to the beneficiary of the Participant’s Designated Beneficiary if the Designated Beneficiary died after January 1, 2020.

(iii) Eligible Designated Beneficiaries. An individual is an “Eligible Designated Beneficiary” of a Participant if the individual qualifies as a Designated Beneficiary and is:

(a) the Participant’s Spouse,

(b) the Participant’s child who has not reached the age of majority (as defined for purposes of Code Section 401(a)(9)(F)),

(c) an individual not more than 10 years younger than the Participant,

(d) a disabled individual (as defined in Code Section 72(m)(7)), or

(e) an individual who has been certified to be chronically ill (as defined in Code Section 7702B(c)(2)) for a reasonably lengthy period, or indefinitely.

Certain trusts may be treated as Eligible Designated Beneficiaries pursuant to Code Section 401(a)(9)(H)(iv) and (v). When a child of the Participant reaches the age of majority, the Plan will distribute the child’s account in full no later than 10 years after that date.

 

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(c) One-Time Election. An Eligible Participant (as defined in paragraph (3)) is permitted to make a one-time election to receive the distribution under subsection (b) upon attaining age 70 ¹⁄₂ or forego the distribution of his or her Account until he or she ceases to be an Eligible Participant.

(1) An Eligible Participant who fails to make an election will be treated as having elected to forego the distribution until he or she ceases to be an Eligible Participant.

(2) Eligible Participants must make the same affirmative or negative election for purposes of his or her Merged Accounts and amounts accumulated under this Plan.

(3) An individual is an Eligible Participant for purposes of this Section so long as:

(A) He or she is not a 5%-Owner; and

(B) He or she remains an Employee.

Section 10.05 Immediate Rehires. No distribution will be made to a Participant who terminates employment, goes on leave, or is laid off, and then returns to work for the Affiliated Companies before receiving a distribution.

Section 10.06 Delaying Payment for Accounts Over $5,000. Any Participant with an Account balance over $5,000, as determined under Section 10.03, may elect to delay payment of benefits until the date prescribed in Section 10.04.

Section 10.07 Commencement of Benefits. Upon termination, absent a contrary election, a Participant will be deemed to have elected to leave his or her Account in the Plan subject to the distribution rules of Section 10.04.

Section 10.08 Form of Distributions. Distributions are made in a single payment in cash, except as provided in (a) and (b).

(a) ESOP. Interests in the Huntington Ingalls Industries Stock Fund are distributed in accordance with the ESOP.

(b) Partial Distributions. A Participant may instruct the Committee to distribute a portion of his or her vested Account under this Article.

Section 10.09 Time of Election. A Participant must elect the form of benefit payments within the 180-day period ending on his or her Annuity Starting Date.

 

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Section 10.10 Valuing Distributions. Distributions are valued on dates determined under the Committee’s rules.

(a) The Committee may change its rules at any time without advance notice to the Participants.

(b) The Committee may, under unusual circumstances, direct that distributions be valued as of a date other than that provided under its normal rules to protect the financial integrity of the Plan or for other reasons the Committee deems appropriate.

Section 10.11 Committee Rules. Payment of benefits and Participant elections must be made according to the Committee’s rules and procedures, which may be changed at any time without advance notice to Participants.

 

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ARTICLE 11

Withdrawals

Section 11.01 Eligibility for Withdrawals.

(a) Withdrawals under Sections 11.02 and 11.04 may be made by any Participant who is still employed by an Affiliated Company. A Participant may not make a withdrawal under Section 11.02 (Hardship Withdrawals) unless the Participant has completely withdrawn amounts available at the time a hardship withdrawal request is made under Section 11.04 (Other In-Service Withdrawals) and, if applicable, Section 11.03 (Age 59 ¹⁄₂ Withdrawals) and Section 10.04(c) (Age 70 ¹⁄₂ In-service Withdrawal).

(b) Withdrawals from a Participant’s Merged Accounts are subject to Appendix E or F, whichever applies. Withdrawals of all other money are made under this Article.

Section 11.02 Hardship Withdrawals. A Participant may elect a withdrawal if a hardship described in this Section occurs. Hardship withdrawals are generally limited to the dollar amount of a Participant’s Tax-Deferred Contributions (i.e., including amounts held in a Participant’s Prior Plan Pre Tax subaccount), any earnings that he or she had on any such tax-deferred contributions as of December 31, 1988, plus Roth Contributions (i.e., including amounts held in a Participant’s Prior Plan Roth subaccount). Any hardship withdrawal under the Plan shall first be made from Tax-Deferred Contributions, if any, and then from Roth Contributions to the extent necessary, except to the extent amounts available under Section 11.04 are available at the time the hardship withdrawal is processed.

(a) Determination of Hardship. Before the Participant is eligible for a hardship withdrawal, the Committee must determine that a Participant has an immediate and heavy financial need, and the amount of the withdrawal is necessary to satisfy the need. This Section is to be interpreted in accordance with the hardship distribution requirements of Treasury Regulation Section l.401(k)-l(d)(3).

The Committee may request information it deems appropriate and necessary to ascertain whether a Participant is suffering a hardship.

(b) Amount Necessary to Satisfy Hardship. In determining whether the amount of the hardship withdrawal satisfies the immediate and heavy financial need, the Committee may reasonably rely upon the Participant’s representation (in writing, by an electronic medium, or in other such form as permitted by the Plan administrator in accordance with applicable law) that:

(1) the amount of the hardship withdrawal is not in excess of the amount of the immediate and heavy financial needs of the Participant (including any amount necessary to pay income taxes and/or penalties reasonably anticipated to result from the hardship withdrawal);

(2) the Participant has obtained all distributions, other than hardship withdrawals, and all non-taxable loans currently available under the Plan and all other plans of deferred compensation, whether qualified or nonqualified, maintained by the Company; and

 

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(3) the Participant has insufficient cash or other liquid assets to satisfy the need.

(c) Immediate and Heavy Financial Need. The source of a Participant’s immediate and heavy financial need must include one or more of the following circumstances:

(1) payment of expenses for (or necessary to obtain) medical care that would be deductible under Code Section 213(d) (determined without regard to the limitations in Code Section 213(a)) incurred by the Participant, his Spouse, any dependent (as defined in Code Section 152, determined without regard to Code Sections 152(b)(1), (b)(2), and (d)(l)(B)) of the Participant, or primary beneficiary under the Plan;

(2) payment of tuition and related educational fees (including room and board expenses) for up to the next 12 months of post-secondary education of the Participant, his Spouse, children, dependents ( as defined in Code Section 152, determined without regard to Code Sections 152(b)(l), (b)(2), and (d)(l)(B)), or primary beneficiary under the Plan;

(3) costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

(4) prevention of eviction of the Participant from his principal residence or foreclosure on the mortgage of his principal residence;

(5) burial or funeral expenses for the Participant’s deceased parent, Spouse, children, dependents (as defined in Code Section 152, determined without regard to Code Section 152(d)(l)(B)), or primary beneficiary under the Plan;

(6) expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds l0% of adjusted gross income and without regard to the limits imposed under Code Section 165(h)(5));

(7) any federal, state, or local income taxes or penalties reasonably anticipated to result from the hardship withdrawal; or

(8) any other circumstances determined by the Secretary of the Treasury to constitute immediate and heavy financial need for this purpose.

A financial need will not fail to qualify as immediate and heavy solely because the need was reasonably foreseeable or voluntarily incurred by the Participant.

 

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(d) Hardship Withdrawal Suspensions. A Participant who was granted a hardship withdrawal under the Plan prior to January 1, 2020 was suspended from making Basic Contributions and Supplemental Contributions under the Plan and elective contributions and employee contributions to any other plan maintained by the Employer, for a period of six (6) months following receipt of such withdrawal. Notwithstanding the foregoing, for hardship withdrawals initiated on or after January 1, 2020 and for hardship withdrawals initiated prior to January 1, 2020 for which the 6-month suspension period has not expired as of December 31, 2019, the 6-month suspension period shall no longer apply beginning January 1, 2020.

Section 11.03 Age 59¹⁄₂ Withdrawals. Upon reaching age 59¹⁄₂, a Participant may withdraw all or a portion of the vested amounts held in the Participant’s Tax Deferred, After Tax, Roth, Rollover, Roth Rollover, Company Match, Retirement Account, Qualified Nonelective, Prior Plan Pre Tax, Prior Plan After Tax, Prior Plan Company, Prior Plan Safe Harbor, Prior Plan Roth, Prior Plan QNEC, Prior Plan ESOP, Prior Plan Company 5 Yr, NNS/PCI Employer, NNS/PCI Pre Tax, NNS Rollover, NNS After Tax, Company 3 Yr, Company Match 3Yr and Employer Contributions.

Section 11.04 Other In Service Withdrawals. A Participant who is still employed by an Affiliated Company may request an in-service withdrawal of all or a portion of the Participant’s Prior Plan After Tax, After-Tax, Rollover, Roth, Prior Plan Roth, Prior Plan Company, Prior Plan Company 5 Yr, Company 3 Yr, Company Match 3 Yr, Company Match, NNS After-Tax, and Roth Rollover subaccounts. The Committee may establish, in its sole discretion, minimum withdrawal amounts and frequency limitations that apply to withdrawals under this Section 11.04.

Section 11.05 Valuing Withdrawals. Withdrawals are valued on dates as determined in accordance with the rules of the Committee.

(a) The Committee may change its rules at any time without advance notice to the Participants.

(b) Under unusual circumstances, in order to protect the financial integrity of the Plan, the Committee may direct that withdrawals be valued as of a date other than that provided by its normal rules or for other reasons the Committee deems appropriate.

Section 11.06 Minimum Withdrawals. The Committee may establish a minimum withdrawal requirement applicable to any or all withdrawals under this Article. Any such limitations will be communicated to Participants in accordance with Plan rules and procedures.

Section 11.07 Committee Rules. Payment of withdrawals and Participant elections must be made in accordance with the Committee’s rules and procedures, which may be changed at any time without advance notice to Participants.

Section 11.08 Military Reservist Distributions. Any Participant who is a member of the U.S. military reserves and who is called or ordered to duty for a period of at least 180 days during the period after September 11, 2001 may request a distribution of his or her Tax Deferred, Prior Plan Pre Tax, Roth, Prior Plan Roth, and NNS/PCI Pre Tax Contributions by notifying the

 

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Committee. The Committee may establish such rules, impose such requirements, and require the completion of such forms and documents (in electronic or paper formats), in its sole discretion, and applied in a nondiscriminatory and objective basis, in order to administer this Section 11.08.

Section 11.09 Military Service Distributions. A Participant may request a distribution of his or her Tax Deferred, Roth, Prior Plan Pre Tax, Prior Plan Roth, Prior Plan Safe Harbor, and Prior Plan QNEC Contributions during a period of qualified military service, as determined under Code Section 414(u), of more than 30 days by notifying the Committee. No Basic or Supplemental Contributions shall be made on behalf of a Participant who takes a distribution pursuant to this Section 11.09 for a period of six months following such distribution. The Committee may establish such other rules, impose such requirements, and require the completion of such forms and documents (in electronic or paper formats), in its sole discretion, and applied in a nondiscriminatory and objective basis, in order to administer this Section 11.09.

Section 11.10 Restriction on Huntington Ingalls Industries Stock Fund Withdrawals for Officers. Company policy provides that an Employee who is an officer subject to Section 16 of the Securities Exchange Act of 1934 or other appointed or elected officer of the Company may not, absent prior approval of the office of the Corporate Secretary of the Company, take any withdrawal pursuant to this Article 11 from the Huntington Ingalls Industries Stock Fund outside the window period specified by the Executive Vice President and Chief Legal Officer of the Company; however, the portion of such Participant’s Account invested in the Huntington Ingalls Industries Stock Fund shall be taken into consideration for determining the amount available for withdrawals. Except as determined by the Executive Vice President and Chief Legal Officer of the Company, each window period shall begin the second day following the release of the Company’s quarterly or annual statement of sales and earnings and end as of the 30th day following such announcement. The restrictions in this Section 11.10 shall be implemented by the Plan as soon as administratively feasible after March 31, 2011.

 

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ARTICLE 12

Loans

Section 12.01 In General. Participants, other than those described in Section 12.02, may borrow from their Accounts in accordance with Code Sections 72(p) and 401(k) and the Huntington Ingalls Industries Employee Benefit Plan Loan Guidelines (“Guidelines”), which can be found in Article 3 of the Standard Definitions and Procedures for Certain Huntington Ingalls Industries, Inc. Retirement Plans. The Guidelines may be amended at any time without advance notice to Participants by the individual or entity identified in the Guidelines as having amendment authority. Notwithstanding the preceding sentences and any provisions of the Guidelines, loan amounts may not be taken from a Participant’s Retirement Account, Employer Contributions, Company Profit Sharing, or QNEC subaccounts, and the balance in the Participant’s Retirement Account, or Employer Contributions shall not be considered in determining the Participant’s total Account balance for purposes of determining his or her maximum loan amount.

Section 12.02 Former Employees. Former Employees may not obtain loans unless they are “parties in interest” within the meaning of ERISA Section 3(14).

Section 12.03 Transferred Plan Loans. Any Participant with a plan loan outstanding from a Merged Plan as of the effective date of that plan’s merger into this Plan will continue to be required to repay that loan on the same terms and over the same period as in effect under the terms of the Merged Plan. Any Participant with a plan loan outstanding under the Northrop Grumman Savings Plan as of the Spin-Off that was transferred to this Plan will continue to be required to repay that loan on the same terms and over the same period as in effect under the terms of the Northrop Grumman Savings Plan as of the date of transfer to this Plan.

Section 12.04 Repayment Upon Death. The Spouse of a Participant who dies with a loan outstanding on the date of the Participant’s death may continue repayment of such loan under the terms and conditions that applied to the loan immediately prior to the Participant’s death.

Section 12.05 Restriction on Huntington Ingalls Industries Stock Fund Loans for Officers. Company policy provides that an Employee who is an officer subject to Section 16 of the Securities Exchange Act of 1934 or other appointed or elected officer of the Company may not, absent prior approval of the office of the Corporate Secretary of the Company, take any loan pursuant to this Article 12 from the Huntington Ingalls Industries Stock Fund outside the window period specified by the Executive Vice President and Chief Legal Officer of the Company; however, the portion of such Participant’s Account invested in the Huntington Ingalls Industries Stock Fund shall be taken into consideration for determining the amount available for loans. Except as determined by the Executive Vice President and Chief Legal Officer of the Company, each window period shall begin the second day following the release of the Company’s quarterly or annual statement of sales and earnings and end as of the 30th day following such announcement. The restrictions in this Section 12.05 shall be implemented by the Plan as soon as administratively feasible after March 31, 2011.

 

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ARTICLE 13

Death Benefits

Section 13.01 In General. This Article describes the payment of benefits following the death of a Participant prior to his or her Annuity Starting Date. Death benefits from a Participant’s Merged Accounts are paid under Appendix E or F, whichever applies.

Section 13.02 Method and Timing of Payment. Upon the Participant’s death, payment of his or her Account is made in a single lump sum to his or her beneficiary.

(a) Except as provided in subsection (b) below, payment is generally made as soon as possible following the Participant’s death.

(b) However, if a Participant’s Spouse is the beneficiary and the value of the Participant’s entire Account equals more than $1,000 on the date of distribution, the Spouse may elect to delay payment of benefits up to the time the Participant would have reached his or her Mandatory Commencement Date. The Account shall be distributed to the Participant’s Spouse in a single lump sum as soon as administratively feasible following the date the Participant would have reached his or her Mandatory Commencement Date.

Section 13.03 Form of Distributions. In general, distributions will be made in a single payment in cash. The ESOP, however, governs the distribution form of a Participant’s interest in the Huntington Ingalls Industries Stock Fund.

Section 13.04 Valuing Death Benefits. Death benefits are valued on dates determined in accordance with the Committee’s rules.

(a) The Committee may change its rules at any time without advance notice to the Participants.

(b) Under unusual circumstances, the Committee may direct that death benefits be valued as of a date other than that provided by its normal rules to protect the financial integrity of the Plan or for other reasons the Committee deems appropriate.

Section 13.05 Survivor Benefits Related to Military Service. If a Participant dies during a period of qualified military service, as determined under Code Section 414(u), his or her beneficiary shall be entitled to any additional benefits, other than benefit accruals, as if the Participant was reemployed by an Employer on the date immediately preceding his or her death and terminated employment on the date of his or her death.

Section 13.06 Committee Rules. Benefits will be paid in accordance with the Committee’s rules and procedures, which may be changed at any time without advance notice to Participants.

 

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ARTICLE 14

Beneficiaries

Section 14.01 In General. A Participant at any time may name, on a form or in a format prescribed by the Committee, a beneficiary to receive any benefits remaining under the Plan when the Participant dies. A Participant may change beneficiaries at any time. A beneficiary selection or a change in a selection is effective only when it is received by the Committee, or, if later, at the time specified by the Participant in the selection or change.

A Participant’s beneficiary may not be changed following the Participant’s death, except by (a) a written instrument intended to be a “qualified disclaimer” within the meaning of Code Section 2518, or any successor provision, that is received by the Committee not later than nine months after the Participant’s death and is accepted by the Committee prior to payment of benefits, or (b) a qualified domestic relations order under Code Section 414(p) that is received and accepted by the Committee prior to payment of benefits. The Committee may provide rules and procedures for these authorizations, which rules and procedures may be changed at any time without advance notice to Participants.

Section 14.02 Married Participants.

(a) The beneficiary of a married Participant is the Participant’s Spouse unless otherwise elected. An election of a non-spouse beneficiary by a married Participant is effective only with spousal consent.

(b) If an unmarried Participant becomes married (or a married Participant remarries), any prior selection of a beneficiary by that Participant will be invalid, and the Participant’s beneficiary will be his or her new Spouse unless a different beneficiary is named with spousal consent.

Section 14.03 Determining Marital Status and Spouse. A Participant will be considered married if he or she is married on the date of his or her death.

(a) Unless otherwise provided by a qualified domestic relations order, as defined in Code Section 414(p), the Participant’s Spouse is the person to whom he or she was married when the Participant died.

(b) A qualified domestic relations order, as defined in Code Section 414(p), may provide that a former Spouse is deemed to be the Participant’s Spouse for purposes of all or a portion of the Participant’s benefit under the Plan.

(c) If within six months after the death of a Participant, the Committee has no knowledge that a Spouse survived the Participant, it shall be conclusively presumed that no Spouse survived, and distribution may be made accordingly.

Section 14.04 Spousal Consent. If a married Participant wishes to name someone other than his or her Spouse as beneficiary, the Participant may do so, but only with the written consent of his or her Spouse.

 

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(a) For the written consent to be valid:

(1) A notary public or Plan representative must witness the signing of the consent documents;

(2) The consent documents must either designate a specific beneficiary or form of benefits, which may not be changed by the Participant without further spousal consent, or it must expressly permit the Participant to change the beneficiary or form of benefits without further consent by the Spouse; and

(3) The consent documents must acknowledge the effect of the election.

(b) Spousal consent is not required if the Committee determines that there is no Spouse, it is presumed under Section 14.03(c) that there is no Spouse, or under other circumstances permitted by regulations under the Code.

(c) Any consent by a Spouse (or determination that spousal consent cannot be obtained) is effective only with respect to that particular Spouse.

Section 14.05 Explanation. The Committee must provide each Participant a written explanation of:

(a) The terms and conditions of the various death benefit options;

(b) The Participant’s right to make, and the effect of, an election to waive the spousal benefit;

(c) The rights of the Participant’s Spouse under Section 14.04; and

(d) The right to make, and the effect of, a revocation of a waiver of the spousal benefit.

Section 14.06 Failure to Designate Beneficiary. If no beneficiary is properly named or the beneficiary named by the Participant dies before the Participant and no new beneficiary is named, the beneficiary will be the Participant’s Spouse, or, if there is no Spouse, the Participant’s estate.

Section 14.07 Death of Beneficiary. If a beneficiary entitled to a payment dies, any amount payable to the beneficiary will be paid in a single lump sum as soon as possible to the beneficiary’s estate. Notwithstanding the preceding sentence, a Spouse who is a beneficiary may designate a beneficiary to be paid upon such Spouse’s death; therefore, if such Spouse beneficiary dies, any amount payable to him or her will be paid to his or her designated beneficiary or, if none, to his or her estate in accordance with the preceding sentence.

Section 14.08 Committee Rules. The designation of beneficiaries will be made according to the Committee’s rules and procedures, which may be changed at any time without advance notice to Participants. These rules will cover, among other things, the designation of multiple and secondary beneficiaries and the selection of trusts as beneficiaries.

 

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ARTICLE 15

Other Rules On Distributions

Section 15.01 Missing Payee. All payments due under the Plan to missing payees shall be governed by the terms of Article 7 in the Standard Definitions and Procedures for Certain Huntington Ingalls Industries, Inc. Retirement Plans.

Section 15.02 Disputes About Payee. If the Committee determines that there is some uncertainty as to whom any Plan payment is due, the Committee is authorized to delay payment, seek agreements from the interested parties, make payment to an appropriate judicial forum and allow the court to determine the identity of the proper payee, and/or take any other necessary or appropriate steps to protect the Plan and the interested parties.

Section 15.03 Administrative Delays. If the amount of any payment cannot be determined by the date it is supposed to be paid, or if it is not possible to make payments on time because the Committee cannot find the payee, or adequate information is not available to make the distribution, or the payee has failed to make the applicable elections with the Committee, or because of other legal, financial, or administrative obstacles, payments may be made no later than 60 days after the date payment becomes possible.

Section 15.04 Facility of Payment. If the Committee deems any person entitled to receive any payment under the Plan incapable of receiving it because of age, illness or infirmity, mental incompetency, or incapacity of any kind, the Committee may, in its discretion, direct that payment be made in any one or more of the following manners:

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

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

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

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

Section 15.05 Incorrect Payment of Benefits. If the Committee determines in its sole discretion that the Plan made an incorrect payment of benefits, and that a correction is necessary or desirable under the law, then:

(a) If the Plan makes an overpayment of the amount of any benefits due any payee under the Plan, the Plan may recover the amounts either by requiring the payee to return the excess to the Plan, by reducing any future Plan payments to the payee, or by any other method that the Committee deems reasonable.

(b) If the Plan makes a late payment or an underpayment of the amount of any benefits due any payee under the Plan, correct payment will be made as soon as reasonably possible after the late payment or underpayment is discovered.

 

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Section 15.06 Direct Rollover. A Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover (as those terms are defined in this Section). This Section is intended only to implement Code Section 401(a)(31) and is to be construed accordingly.

(a) Eligible Rollover Distribution. An Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include:

(1) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated beneficiary, or for a specified period of ten years or more;

(2) any distribution to the extent the distribution is required under Code Section 401(a)(9); or

(3) any distribution made upon hardship of the Distributee.

(b) Eligible Retirement Plan. An Eligible Retirement Plan is:

(1) an individual retirement account described in Code Section 408(a), including a Roth individual retirement account described in Code Section 408A;

(2) an individual retirement annuity described in Code Section 408(b);

(3) an annuity plan described in Code Section 403(a);

(4) a qualified trust described in Code Section 401(a);

(5) an eligible deferred compensation plan described in Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state; or

(6) an annuity contract described in Code Section 403(b) that accepts the Distributee’s Eligible Rollover Distribution.

However, in the case of an Eligible Rollover Distribution to a beneficiary who is a designated beneficiary as defined in Code Section 401(a)(9)(E), but is not a surviving Spouse or a former Spouse who is an alternate payee under a qualified domestic relations order as defined in Code Section 414(p), an Eligible Retirement Plan is only an individual retirement account or individual retirement annuity that is treated as an inherited account under Code Section 402(c)(11).

(c) Distributee. A Distributee includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving Spouse and the Employee’s or former Employee’s Spouse or former Spouse who is the alternate payee under a qualified

 

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domestic relations order, as defined in Code Section 414(p), are Distributees of distributions they receive. In addition, a beneficiary who is a designated beneficiary as defined in Code Section 401(a)(9)(E) is a Distributee with regard to the beneficiary’s interest in the Plan.

(d) Direct Rollover. A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

(e) Direct Rollover of After-Tax Contributions. For purposes of this Section, no portion of a distribution will fail to be an Eligible Rollover Distribution merely because the portion consists of After-Tax Contributions, which are not includible in gross income. After-Tax Contributions, however, may be transferred only to an individual retirement account or annuity described in Code Section 408(a) or (b) or to a qualified defined contribution plan described in Code Section 401(a), 403(a), or 403(b) that agrees to separately account for amounts so transferred, including separately accounting for the portion of a distribution that is includible in gross income and the portion of a distribution that is not includible in gross income.

Section 15.07 Annuity Starting Date.

(a) In General. The Annuity Starting Date for Plan distributions is the business day that the distribution is valued and removed from the Participant’s investment funds.

(b) Administrative Delay. The Annuity Starting Date is the date described in (a) even though for administrative reasons payment is delayed until some later date.

(c) Valuation. The amount of a distribution is determined under the valuation rules described in other Sections of this Plan. This Section does not modify those rules in any way.

Section 15.08 Top Heavy Rules. The top-heavy provisions of Appendix B apply if the Plan becomes top-heavy.

Section 15.09 Claims and Issues. From time to time, claims or issues may arise that involve the Plan, including, among others, claims and issues raised by Participants, those addressed under any of the Internal Revenue Service’s Employee Plans Compliance Resolution System programs or similar programs, or those permitted under the terms of a qualified domestic relations order that complies with Code Section 414(p). The resolution, settlement, or adjudication of these claims or issues may result in an action that is not expressly permitted under some other Section of the Plan document. Such a procedure, agreement, or order will be respected to the extent that, as determined in the sole discretion of the Committee, it does not result in disqualification of the Plan or violate (or cause the Plan to violate) any applicable statute, government regulation, or ruling.

Section 15.10 Annuity Form of Distribution. To the extent required under Code Sections 401(a)(11) and 417, a married Participant who elects payment of his or her benefits in the form of a life annuity (if available under the Plan) must receive his or her benefits in the form of a qualified joint and 50% survivor annuity (“QJSA”) unless the Participant elects another form of

 

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distribution permitted under the Plan, which shall include a single life annuity, or a qualified optional 75% survivor annuity (“QOSA”), with the written consent of his or her Spouse that satisfies the provisions of Code Section 417(a)(2). The required consent must be signed by the Spouse, contain an acknowledgment by the Spouse of the effect of the consent, and be witnessed by a Plan representative (other than the Participant) or by a notary public. Notwithstanding the foregoing, spousal consent need not be required if the Committee determines that there is no Spouse because the Spouse cannot be located or under other circumstances permitted by regulations under the Code. The provision for the distribution of any annuity form of distribution may be satisfied by the application of the Participant’s vested Account balance to purchase an annuity contract from an insurance company or other annuity provider.    

The Committee shall provide to the Participant, within a reasonable period before payment of benefits commences, a written explanation of the terms and conditions of the QJSA and the QOSA, the Participant’s right to make, and the effect of, an election to waive the QJSA option and elect another option, the rights of the Participant’s Spouse and the Participant’s right to make, and the effect of, a revocation of a waiver of the QJSA form of distribution.

 

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ARTICLE 16

Administration

Section 16.01 In General. The general administration of the Plan is the responsibility of the Committee. The Committee is the “plan administrator” under ERISA. In addition, the Committee and each of its members are “named fiduciaries” of the Plan under ERISA for all purposes other than investment matters. Committee members and all other Plan fiduciaries may serve in more than one fiduciary capacity with respect to the Plan.

Section 16.02 The Committee. The Committee consists of at least three members appointed by the Board or its delegate. The Committee members serve at the pleasure of the Board, without compensation, unless otherwise determined by the Board or its delegate.

Section 16.03 Resignation of Committee Members. A member of the Committee may resign at any time by delivering a written resignation to the Chairman of the Committee. The member’s resignation will be effective as of the date of delivery or, if later, the date specified in the notice of resignation.

Section 16.04 Conduct of Business. The Board or its delegate will appoint a Chairman from among the members of the Committee and a Secretary who may or may not be a member of the Committee. The Committee will conduct its business in accordance with this Article and shall hold meetings from time to time in any convenient location.

Section 16.05 Quorum. A majority of all of the members of the Committee constitutes a quorum and has power to act for the entire Committee.

Section 16.06 Voting. All actions taken shall be by majority vote of the members attending a meeting, whether physically present or through remote communications. In addition, actions may be taken by written consent of a majority of the Committee members without a meeting. The agreement or disagreement of any member may be by means of any form of written or oral communications.

Section 16.07 Records and Reports of the Committee. The Committee will keep written records as it deems necessary or proper, which records will be open to inspection by the Board or its delegate.

Section 16.08 Powers of the Committee. The Committee has all powers necessary or incident to its office as plan administrator. Its powers include, but are not limited to, full discretionary authority to:

(a) Prescribe rules for the operation of the Plan.

(b) Determine eligibility.

(c) Comply with the requirements of reporting and disclosure under ERISA and any other applicable law and to prepare and distribute other communications to Participants as part of Plan operations.

 

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