Summary Plan Description. for the. Vought Aircraft Industries, Inc. Retirement Plan

Transcription

1 Summary Plan Description for the Vought Aircraft Industries, Inc. Retirement Plan July 1, 2009 i

2 Introduction This is the summary plan description ( SPD ) for the Vought Aircraft Industries, Inc. Retirement Plan ( Plan ). The Plan was established on July 24, 2000, and this summary describes the general terms and conditions under which you earn retirement benefits from the Plan. When using this booklet, please remember that this is only a summary and does not contain all the details of the Plan. The actual terms of the Plan are contained in the Plan document, a copy of which is available from the Vought Benefits Center for the cost of copying. If you need to know more details about the rules discussed in this booklet, you should refer to the Plan document. In the event of a conflict between this booklet and the terms of the Plan, the terms of the Plan will control. If you were transferred to Vought Aircraft Industries, Inc. as part of the July 24, 2000 sale, the Appendix to this booklet contains a very general description of the main features of the Vought, Northrop and Grumman retirement plans for benefits that you may have earned under those plans before 1995, and that were transferred to this Plan. Of course, you should refer to actual plan documents for those retirement plans for more details concerning those benefits. i

3 Subject Table of Contents Page History of the Plan... 1 Participation Freeze...1 Benefit Accrual Freeze...1 Benefits for Employees and Retirees Transferred to Vought as Part of the July 24, 2000 Sale...1 Benefits for New Hires...1 Benefits for Employees Rehired after the July 24, 2000 Sale...2 A Note about Benefit Formulas and Heritage Plans...2 The Role of the Vought Retirement Plan in Planning for Your Retirement... 3 Highlights of the Vought Retirement Plan... 4 How the Retirement Plan Works... 5 The Retirement Benefit Formulas...5 Eligibility...5 Service: Vesting Service, Benefit Service, Early Retirement Service and Points...6 Vesting Service...7 Benefit Service...7 Early Retirement Service...9 Points...9 When You Can Lose Credit for Service: Break in Service Rules...9 Periods of Absence that Don t Count as a Break in Service...10 Layoff...10 Military Leave...10 Parental Leave or FMLA Leave...10 How You Can Lose Benefit Service...11 Calculating Your Final Average Salary...11 Putting it All Together: Calculating Your Retirement Benefit Payable at Age Maximum Benefit Limit: 50% of Final Average Salary...16 Transition Rule for Heritage Plan Benefits...16 When You Can Retire...16 Normal Retirement and Postponed Retirement...16 Working Past Age 70½...16 Early Retirement...17 Special Layoff Provision...18 Deferred Vested Retirement...18 Deciding How to Receive Your Retirement Benefit...19 How Benefits Are Paid...20 Automatic Forms of Payment...20 If You Are Unmarried: Straight Life Annuity Option...20 If You Are Married: 50% Joint and Survivor Annuity Option...20 Lump Sum Payment: For Certain Small Benefit Amounts...21 Optional Payment Forms...21 Level Income Option...21 Annual Increase Option...22 Contingent Annuitant Option...22 Combined Contingent Annuitant and Level Income Option...22 Combined Contingent Annuitant and Annual Increase Option...23 ii

4 Ten Year Certain and Continuous Option...23 How to Determine Contingent Annuitant Payment Options...23 If You Die Before Your Benefit Payments Are Scheduled to Begin...25 If You Are Rehired after You Retire...26 If You Get Divorced: Splitting Your Benefit through a QDRO...27 How to Apply for Retirement Benefits...27 Receiving an Estimate of Your Plan Benefit...28 Errors in Payment...28 General Information about the Plan Funding...30 When You Pay Taxes...30 Assignment of Benefits...30 Loss of Benefits...30 Maximum Benefit for Tax Purposes...31 Top Heavy Rules...31 Future of the Plan: Company s Right to Amend and Terminate the Plan...31 Certain Benefits Insured by the Pension Benefit Guaranty Corporation...31 Claim Review and Appeals Your Rights under ERISA iii

5 History of the Plan On July 24, 2000, Vought Aircraft Industries, Inc. became a new company ( Vought or the Company ). In connection with creation of this new company, the Vought Aircraft Industries, Inc. Retirement Plan ( Vought Retirement Plan or Plan ) was established for certain employees who were transferred to the new company, as well as for new employees hired after July 24, In recent years, there have been two different types of freezes under the Plan. Participation Freeze This freeze limits your ability to join the Plan if you are not already a participant. If your initial hire date was on or after October 10, 2005 you are not eligible to participate. In addition, effective October 10, 2005, you could not become a new participant in the Plan unless you had at least five Years of Vesting Service or reached age 65 on or before December 31, Furthermore, effective December 31, 2007, you could not become a new participant in this Plan unless you had at least 16 Years of Vesting Service as of December 31, Benefit Accrual Freeze This freeze applies to certain employees who are already participants in the Plan. If the freeze applies to you, you stopped accruing benefits under the Plan as of the date your benefits were frozen. This means that you have not been credited with Years of Benefit Service after the freeze date, and your benefit does not reflect compensation earned after the freeze date. Your benefits were frozen as of December 31, 2005 if you were not vested as of December 31, If you were not subject to the 2005 freeze, your benefits were frozen as of December 31, 2007 if you had less than 16 Years of Vesting Service as of December 31, Even if you continued to accrue benefits following one or both freeze dates, the benefit formula was changed for benefit accruals after December 31, Benefits for Employees and Retirees Transferred to Vought as Part of the July 24, 2000 Sale If you are an employee or retiree who previously participated in the Northrop Grumman Pension Plan and you were transferred to Vought as part of the July 24, 2000 sale, your benefits were transferred from the Northrop Grumman Pension Plan into the Vought Retirement Plan. In general, if you are one of these transferred employees, your entire pension benefit earned based on service at Vought, as well as prior service at Northrop Grumman and companies that it acquired or merged with, will be payable from this Plan. Benefits for New Hires If you are a new employee hired by Vought after July 24, 2000, this booklet describes the pension benefits that you will earn if you are eligible for the Plan. All new hires are subject to the Participation Freeze described above. 1

6 Benefits for Employees Rehired after the July 24, 2000 Sale If you are an employee who has service with a heritage company like Northrop Grumman or one of its affiliates, but you were not part of the group of employees who were officially transferred as part of the Vought sale, any benefits you earn under this Plan will be calculated based on your status as a new employee with Vought as of your date of hire after July 24, 2000, and will be subject to the freezes described previously. If you are an employee who has a vested benefit under the Vought Aircraft Salaried Retirement Plan for service before August 31, 1994, but you did not work for Vought or Northrop Grumman between that date and July 24, 2000, that benefit may be payable from this Plan. In order to make that determination, please contact the Vought Benefits Center. In general, the plan document that was in effect at the time of your termination governs payment of that benefit. A Note about Benefit Formulas and Heritage Plans If you are an employee whose benefits were transferred to this Plan as part of the July 24, 2000 sale, your total benefit may include benefits earned since January 1, 1995 under a plan that was merged into the Northrop Grumman Pension Plan. It also may include service earned before 1995 from a plan sponsored by your heritage company (e.g., Vought Aircraft Company, Northrop Corporation or Grumman Corporation). In general, the Northrop Grumman Pension Plan had a single formula for benefits earned on and after January 1, 1995, but different formulas for benefits earned before that time. The Appendix to this booklet contains general information about how to calculate any benefits that you earned before 1995 that may now be part of this Plan. The Appendix also shows you how to add the heritage benefit you earned before 1995 to the benefit you have earned after 1994 to determine your total benefit payable at retirement. 2

7 The Role of the Vought Retirement Plan in Planning for Your Retirement The Vought Retirement Plan can be an important source of income for you during your retirement. In general, the longer you participate in the Plan, the larger your benefit will be at retirement, subject to the Plan freezes described previously. But this benefit alone will probably not be enough to provide you with a financially comfortable retirement. Retirement benefits from this Plan should be considered together with other sources of income in planning for your financial future. In planning for retirement, you will want to take into account a variety of sources of income to meet your financial goals in retirement. These income sources should include: Your personal savings and investments, Your 401(k) and IRA accounts, Social Security, Pension benefits that you might earn at another company, and Benefits that you earn under the Vought Retirement Plan. The Company contributes to the Plan and Social Security on your behalf and may make additional contributions to your 401(k) account; however, you should not rely on Companyprovided benefits alone to cover all of your financial needs in retirement. 3

8 Highlights of the Vought Retirement Plan Here is a brief look at some of the main features of the Vought Retirement Plan: Once you are eligible, you automatically become a participant. You do not need to enroll. However, new hires generally are not eligible for the Plan because of the Participation Freeze described on page 1. The Company makes all required contributions to the Plan. You are not required, or permitted, to contribute to the Plan. You become vested in your benefit after you have five Years of Vesting Service or when you reach age 65, whichever comes first. Vested means you are entitled to receive a benefit from the Plan, even if you leave before retirement age. The amount of your pension benefit is generally based upon your pay and your years of service. However, if your benefits have been frozen because of the Benefit Accrual Freeze described on page 1, your pay and years of service following the freeze date are not taken into account for purposes of calculating your benefit. You may retire and begin receiving a benefit at age 65. Once you are vested, you may retire as early as age 55 (if you have at least 10 Years of Early Retirement Service as defined on page 9) and receive a reduced benefit. Depending on the payment option you elect, the Plan can provide a monthly benefit to your beneficiary upon your death. Once you are vested, the Plan generally provides a benefit to your spouse if you die before you retire. 4

9 How the Retirement Plan Works The Retirement Benefit Formulas If you had benefits transferred into this Plan from a heritage plan, the Appendix to this booklet provides you general information about how to calculate benefits that you earned before 1995, and how to add those benefits to the benefit you earned after 1994 to determine your total benefit payable at retirement. The following section applies only to benefits earned after December 31, The amount of annual retirement benefit that you can expect to receive if you retire from the Company at age 65 is calculated using two formulas. The first formula is used to determine your benefit earned between January 1, 1995 and December 31, 2005 (the benefit) and takes into account only your Years of Benefit Service earned during that period, if any. The second formula is used to determine your benefit earned after December 31, 2005 (the post 2005 benefit) and takes into account only your Years of Benefit Service earned after December 31, 2005, if any. If your benefits have been frozen, you will not receive credit for Years of Benefit Service following the freeze date that applies to you. Your total benefit is the sum of your benefit, and your post 2005 benefit (plus your pre-1995 benefit, as discussed in the Appendix, if applicable). The formulas for these post-1994 benefits are as follows: Benefit Formula 1-2/3% x Your Final Average Salary x Your Years of Benefit Service earned between January 1, 1995 and December 31, 2005 Post 2005 Benefit Formula (1% x Your Final Average Salary up to 50% of the Social Security Wage Base + 1.5% x Your Final Average Salary over 50% of the Social Security Wage Base) x Your Years of Benefit Service earned after December 31, 2005 The Social Security Wage Base the amount each year on which you and the Company pay FICA taxes is determined each year by the Social Security Administration. Your benefit under the Plan is determined using the Social Security Wage Base for the year in which you terminate employment or in the year in which your benefit was frozen, if earlier. This booklet explains how you determine things like your Final Average Salary and your Years of Benefit Service. It also explains how many years you must work to be eligible to receive any benefit at all, and if you can start to receive benefits before age 65. Eligibility You are a Covered Employee under the Vought Retirement Plan if you are: A non-represented employee of Vought Aircraft Industries, Inc, Vought Commercial Aircraft Company (Aero) China or VAC Industries, Inc who is paid from the Company payroll and are not excluded below. You are not a Covered Employee under this Plan if: You were first hired by a Company element on or after October 10, 2005; 5

10 You were not a participant as of October 10, 2005 (unless you had at least five Years of Vesting Service or you had reached age 65 as of December 31, 2005); You were not a participant as of December 31, 2007 (unless you had at least 16 Years of Vesting Service as of December 31, 2007); You are covered by a collective bargaining agreement; You are covered by another defined benefit pension plan sponsored by Vought; You are a nonresident alien, unless your participation has been specifically authorized by the Company s Board of Directors, or You are an individual designated as an independent contractor or one who performs services through an outside agency (for example, a job shopper, contract employee or leased employee), even if a government agency or court later determines that you performed those services as an employee. Once you are a Covered Employee, you automatically become a participant in the Plan. You do not need to enroll, and you are not required or permitted to make any contributions. Service: Vesting Service, Benefit Service, Early Retirement Service and Points Different types of Service and Points are used to determine different aspects of your retirement benefit, as follows: Vesting Service Benefit Service Early Retirement Service Points Determines whether you are eligible to receive any benefit from the Plan You earn a Year of Vesting Service if you were compensated for 1,000 hours in a calendar year Determines the amount of benefit you receive from the Plan You earn a Year of Benefit Service if you were compensated for 1,907 hours in a calendar year* Determines whether you can begin to receive an Early Retirement Benefit before age 65 Generally equals Vesting Service, with some exceptions Determines whether you can receive an unreduced retirement benefit before age 65 May determine whether you can receive an Early Retirement Benefit, and the amount of that benefit Generally equals your age plus Years of Benefit Service (see page 9 Points for further details if your Benefit Service has been frozen) *A Note about Frozen Benefits: If your benefit was frozen as of December 31, 2005 or December 31, 2007 (as described on page 1), you will not earn Years of Benefit Service after the freeze date. 6

11 Vesting Service You must be vested in order to receive any retirement benefit from the Plan. You need five Years of Vesting Service, without a Break in Service, to become vested. Once you become vested, you are always vested. Here are more details about how you earn Vesting Service: You become vested in your retirement benefit after you complete five Years of Vesting Service without a Break in Service. There is no partial vesting under this Plan. You earn one Year of Vesting Service for each calendar year in which you are credited with at least 1,000 Vesting Hours. A Vesting Hour is each hour for which you are paid while working for Vought and its affiliates. This includes sick leave, vacation time and jury duty. You also may receive some credit for certain qualified leaves of absence, such as parental leave and military leave. If you are actively employed when you reach age 65, you become vested, even if you don t have five Years of Vesting Service. For example, if you are hired at the beginning of September 2001 and work full-time for the rest of that year, you would earn approximately 640 Vesting Hours in Because this is less than 1,000 hours, you do not earn a Year of Vesting Service during If you continue working into the next year, and you work through July 31, 2002 and then quit, you would have earned approximately 1,120 Vesting Hours in Even though you didn t work a full 12 months, you worked enough to earn one Year of Vesting Service during Remember, once you become vested, you are always vested. Even if you leave the Company before you are eligible to begin receiving a benefit, you are still entitled to a retirement benefit from the Plan when you reach Normal Retirement Age (age 65). If you transferred to this Plan on or after January 1, 2004 from the Aerostructures Heritage Pension Plan or the Aerostructures Heritage Pension Plan for Hourly-Rated Employees, your Vesting Service under those plans will count towards your Vesting Service under this Plan. A Note about Vesting Service under the Heritage Plans: The methods for calculating Vesting Service were different before 1995 under each of the heritage plans. If you had benefits transferred into this Plan from a heritage plan, please refer to the Appendix to see how you earned Vesting Service under your heritage plan. Benefit Service Retirement benefits under the Plan are calculated using a formula that takes into account both your pay and your Years of Benefit Service. You earn Benefit Service as follows: You earn 12 Months of Benefit Service when you are credited with at least 1,907 Benefit Hours in a calendar year. You earn one Benefit Hour for each hour you are paid while a Covered Employee under the Plan. You also may receive some credit for certain qualified leaves of absence, such as military leaves. 7

12 If you had less than five Years of Vesting Service and were under age 65 as of December 31, 2005, you will not earn any additional Years of Benefit Service after December 31, If you had less than 16 Years of Vesting Service as of December 31, 2007, you will not earn any additional Years of Benefit Service after December 31, You earn Months of Benefit Service based on the number of Benefit Hours you earn in a calendar year, as shown in the following table. Benefit Hours Earned in a Calendar Year Months of Benefit Service Earned in a Calendar Year 0 to to to to to to to 1, ,041 to 1, ,214 to 1, ,387 to 1, ,561 to 1, ,734 to 1, more than 1, For example, if you earned 640 Benefit Hours in 2001, you would have earned four Months of Benefit Service for that year. If you earned 960 Benefit Hours the following year, you would have earned six Months of Benefit Service in As you can see by this example, it is possible to earn Months of Benefit Service in a year, even if you don t meet the requirements to earn a Year of Vesting Service. To convert your Months of Benefit Service into Years of Benefit Service, just divide by twelve. For example, if you work part-time and earn 24 Months of Benefit Service over five calendar years, you would have earned a total of two Years of Benefit Service. Remember also that if you are employed by Vought, but you are covered by a collective bargaining agreement, you work for a Company element that does not participate in this Plan, or you are ineligible to participate in the Plan for some other reason, you do not earn Benefit Service for that period of employment, even though that service is generally counted as Vesting Service. In no event will you accrue more than one Year of Benefit Service under this Plan in one calendar year. Additionally, the sum of your Benefit Service accrued under this Plan and the Benefit Service accrued under any other plan sponsored by Vought or its affiliated companies cannot exceed one year in one calendar year. 8

13 A Note about Benefit Service under the Heritage Plans: The methods for calculating Benefit Service were different before 1995 under each of the heritage plans. If you had benefits transferred into this Plan from a heritage plan, please refer to the Appendix to see how you earned Benefit Service under your heritage plan. Early Retirement Service In general, your Early Retirement Service is equal to your Vesting Service. However, certain exceptions apply in the case of transfers, mergers, acquisitions and other specified cases. If you transferred between this Plan and another plan, either before or after July 24, 2000, please contact the Vought Benefits Center for more details about your Early Retirement Service. Points In general, your Points are equal to your age when you retire, plus your Years of Benefit Service, plus years of service that would be counted as Years of Benefit Service except that: Your Benefit Service was frozen effective December 31, 2005 or December 31, 2007, or You worked for a Company element that does not participate in the Plan or as an employee covered by a collective bargaining agreement. In other words, if your Benefit Service has been frozen, you will continue to accrue Points to the extent that you would have if not for the freeze. Furthermore, if you worked for a Company element that does not participate in the Plan or as an employee covered by a collective bargaining agreement, then you will receive Points for that service to the extent that you would have if that service had been under this Plan. If you transferred to this Plan on or after January 1, 2004 from the Aerostructures Heritage Pension Plan or the Aerostructures Heritage Pension Plan for Hourly-Rated Employees, your Credited Service under those plans will count towards your Points under this Plan. Your Points may be used to determine the amount your benefit is reduced, if any, if you retire before age 65. Your Points may also be used to determine your eligibility for an Early Retirement Benefit. If you have 85 Points, you can retire before age 65 (but no earlier than age 55) without any reduction in your Normal Retirement Benefit. This may not apply to benefits earned prior to January 1, 1995 (please refer to the Appendix for more information on your pre-1995 benefit). When You Can Lose Credit for Service: Break in Service Rules When you become vested, you have earned an irrevocable right to receive a benefit from the Plan. Once vested, you are always vested, even if you leave the Company for a long period of time, or do not return at all before your retirement. However, if you leave the Company before you are vested, the following Break in Service rules apply to determine whether your prior service counts when you return. Here are the Break in Service rules: You have a Break in Service Year if you are not yet vested and you work less than 501 hours in a year. 9

14 If you have five consecutive years that qualify as Break in Service Years, you lose the Vesting Service, Benefit Service, Early Retirement Service and service used for Points that you previously earned. If you earn more than 500 Vesting Hours but less than 1,000 Vesting Hours in a year, that year does not count as either a Year of Vesting Service or a Break in Service Year. For example, let's assume you earned three Years of Vesting Service from 1995 to 1997, and then you left the Company. You then return to work in Because you were not vested when you left, and then you earned fewer than 501 Vesting Hours for five consecutive years, none of your prior service counts for any purpose under the Plan when you are rehired in In contrast, if you worked full-time from 2001 through 2003, then worked 750 hours in each of the next six years, and then returned to full-time work in 2010, your three Years of Vesting Service earned from 2001 through 2003 would remain to your credit. In addition, you would have earned five Months of Benefit Service in each of those six years from 2004 to 2009 (or 2½ Years of Benefit Service) even though you did not work enough to earn any Years of Vesting Service. You will need to work two more calendar years in which you are paid for 1,000 hours or more to become vested. Periods of Absence that Don t Count as a Break in Service The following types of absence do not cause you to have a Break in Service: Layoff If you are laid off and return to work in the time and manner that allows you to maintain your seniority rights according to the layoff policy of your business unit in effect at the time of your layoff, you do not have a Break in Service. However, you do not earn Vesting Service, Benefit Service, Early Retirement Service or service used for Points during your layoff. Military Leave A period of military leave will not be treated as a Break in Service if you return to employment with a Company element while your employment rights are protected by federal law. You will be credited with 40 Vesting Hours for each week of the leave or eight Vesting Hours for each working day of the leave. Parental Leave or FMLA Leave If you take an approved leave of absence due to pregnancy, or the birth or adoption of a child, or if you take an approved leave under the Family and Medical Leave Act (FMLA), you can receive Vesting Hours for some or all of this period of leave, up to 501 hours, solely for the purpose of preventing you from incurring a Break in Service. In general, you receive enough Vesting Service credit to prevent you from incurring a Break in Service during the year that your leave starts, or in the following year. However, you do not earn Vesting Service, Benefit Service, Early Retirement Service or service used for Points during your Parental or FMLA leave. 10

15 Example 1 If you work full-time from January to September 2001 and earn 1,440 Vesting Hours, and then take maternity or paternity leave, you would have earned a full Year of Vesting Service for You don t get the 501 hours of credit for 2001 because you didn t need it to prevent a Break in Service. If you then continue your leave for all of 2002, 501 Vesting Hours would be credited to you for that year, so that 2002 would count neither as a Year of Vesting Service, nor as a Break in Service Year. Example 2 If you work full-time during January and February 2001 and earn 360 Vesting Hours, and then take a leave to care for your elderly parent and do not return to work in 2001, you would receive 141 hours of credit for 2001 solely to prevent you from incurring a Break in Service (so you d have 501 hours for the year). If you then continue your leave for all of 2002, you would get the remaining 360 Vesting Hours credited to you for that year (501 minus the 141 you used to prevent a Break in Service in 2001). However, 360 hours is not enough to prevent a Break in Service, so 2002 would count as a Break in Service Year. How You Can Lose Benefit Service You can lose credit for Benefit Service if you receive a lump sum distribution or other type of payout of your retirement benefit. In fact, you re not really losing this Benefit Service, because you would have received benefits to account for that Service. However, if you come back to work, you would have your Vesting Service restored based on your prior employment, but your prior Benefit Service would not be counted. Of course, you would also lose Benefit Service if you have five consecutive Break in Service Years prior to vesting. Calculating Your Final Average Salary The Plan s benefit formula takes into account your Final Average Salary. Your Final Average Salary is the average of your Annual Salary for the three highest years during your last 10 consecutive years of employment. If you have fewer than 10 years of employment, you use an average of your Annual Salary for the three highest years. Years will be treated as consecutive, even if a Break in Service Year intervenes. For employees with a heritage benefit transferred from the Northrop Retirement Plan or the Vought Aircraft Salaried Retirement Plan, you can use Annual Salary for years before 1995 that counted under those Plans. For employees with a heritage benefit transferred from the Grumman Corporation Pension Plan, you only use years of Annual Salary since For employees who transferred between the Vought Retirement Plan and the Aerostructures Heritage Pension Plan or the Aerostructures Heritage Pension Plan for Hourly-Rated Employees on or after January 1, 2004, Annual Salary as determined under the 11

16 Aerostructures Heritage Pension Plan during the years these employees were covered by those plans will be used to determine Final Average Salary under this Plan. For employees who were under age 65 and had less than five Years of Vesting Service as of December 31, 2005, Final Average Salary was determined as of December 31, 2005 as if the employee terminated employment on that date and will not change afterwards. For employees whose benefits were not frozen as of December 31, 2005 but who had less than 16 Years of Vesting Service as of December 31, 2007, Final Average Salary was determined as of December 31, 2007 as if the employee terminated employment on that date and will not change afterwards. In general, in determining your Annual Salary for each year (except the year of your termination), you include: Your annualized base rate of compensation using the rate in effect at December 31 of each year, and Other Includible Pay, as defined in the Plan. Generally, Other Includible Pay includes: Overtime and extended workweek pay paid during that year; Bonuses paid during that year (such as Vought Rewards and Gaining Ground); Merit increases paid as lump sums; and Certain types of Foreign Service Pay including International Relocation Allowance Incentive Payments (a.k.a. Foreign Service Allowance), Hardship Allowance (a.k.a. International Hardship Allowance), International Hazardous Duty Pay (a.k.a. Danger Pay), and International Undesirable Location Allowance. Other items of pay are excluded from your Annual Salary for Plan purposes. The types of pay that are excluded are such items as: Straight-time pay earned when an employee is already receiving pay, for example, paid holidays; Tuition reimbursements; Inventor awards; Per diem and overseas allowances; Excess vacation payoff; Severance payments; and Relocation expenses. Different rules apply for determining your Annual Salary during your last year of employment. For your last year, your Annual Salary includes your annualized base rate of compensation, using the rate in effect at the end of the month preceding your termination, plus Other Includible Pay paid to you both: During the calendar year of your termination, and 12

17 Before the end of the month following your month of termination. For example: If you terminate on December 31, 2002 and are due a bonus that is not paid until January 15, 2003, that bonus is not included in your final year s Annual Salary. If you terminate on January 31, 2003, and you are due a bonus that is not paid until March 15, 2003, that bonus is not included in your final year s Annual Salary. If you terminate on January 31, 2003 and you are due a bonus that is not paid until February 28, 2003, that bonus will be included in your final year s Annual Salary. Here s an example of how to calculate Final Average Salary for a participant not affected by the Benefit Accrual Freeze, based on a sample salary history for 10 consecutive years: Annualized Base Rate of Pay Bonuses Overtime Annual Salary Year 2009 $57,000 $3,500 $1,500 $62, $53,500 $3,000 $1,500 $58, $51,000 $0 $1,000 $52, $48,500 $3,500 $2,000 $54, $47,000 $2,000 $1,000 $50, $45,000 $2,000 $2,000 $49, $44,000 $1,000 $0 $45, $42,000 $0 $0 $42, $42,000 $0 $1,000 $43, $41,000 $0 $500 $41,500 Now add together the three highest years of Annual Salary. In this case, the calculation is: $62,000 (2009) + $58,000 (2008) + $54,000 (2006) = $174,000 Then divide by three to get the average: $174,000 3 = $58,000 In this example, the Final Average Salary is $58,000. Remember that in determining your three highest years of Annual Salary, the three years used do not need to be consecutive. Here s an example of how to calculate Final Average Salary for a participant who is affected by the Benefit Accrual Freeze as of December 31, 2007, based on a sample salary history for 10 consecutive years prior to the Benefit Accrual Freeze (for illustration purposes the annual salary for two years after the Benefit Accrual Freeze are included even though they do not apply to the calculation): 13

18 Annualized Base Rate of Pay Bonuses Overtime Annual Salary Year 2009* $57,000 $3,500 $1,500 $62, * $53,500 $3,000 $1,500 $58, $51,000 $0 $1,000 $52, $48,500 $3,500 $2,000 $54, $47,000 $2,000 $1,000 $50, $45,000 $2,000 $2,000 $49, $44,000 $1,000 $0 $45, $42,000 $0 $0 $42, $42,000 $0 $1,000 $43, $41,000 $0 $500 $41, $40,000 $500 $250 $40, $37,000 $0 $0 $37,000 *After Benefit Accrual Freeze, Annual Salary does not count for calculation of Final Average Salary. Now add together the three highest years of Annual Salary. In this case, the calculation is: $54,000 (2006) + $52,000 (2007) + $50,000 (2005) = $156,000 Then divide by three to get the average: $156,000 3 = $52,000 In this example, the Final Average Salary is $52,000. Remember that in determining your three highest years of Annual Salary, the three years used do not need to be consecutive. Putting it All Together: Calculating Your Retirement Benefit Payable at Age 65 If you had benefits transferred into this Plan from a prior plan, the Appendix to this booklet provides you general information about how to calculate benefits that you earned before 1995, and how to add those benefits to the benefit you earned before 1994 to determine your total benefit payable at retirement. The following examples illustrate the calculation of your benefits earned after December 31, 1994 only. 14

19 Remember the formulas from the beginning of this booklet for calculating your post-1994 benefit Benefit Formula 1-2/3% x Your Final Average Salary x Your Years of Benefit Service earned between January 1, 1995 and December 31, 2005 Post 2005 Benefit Formula Example 1 (1% x Your Final Average Salary up to 50% of the Social Security Wage Base + 1.5% x Your Final Average Salary over 50% of the Social Security Wage Base) x Your Years of Benefit Service earned after December 31, 2005 Now apply this to an example of an employee who is not subject to the Benefit Accrual Freeze, who retires in 2008 with 21 Years of Benefit Service and a Final Average Salary of $58,000. This employee s 21 Years of Benefit Service include 7 years before January 1, 1995, 11 years between January 1, 2005 and December 31, 2005 and three years after Her annual retirement benefit earned prior to January 1, 1995 is covered in the Appendix. The Social Security Wage Base in 2008 is $102,000 (50% of this amount is $51,000). Her annual post-1994 retirement benefit payable at age 65 (called the Normal Retirement Benefit ) would be calculated like this: Benefit Formula 1-2/3% x $58,000 x 11 = $ 10,633.55/year Post 2005 Benefit Formula [1% x $51,000 (=$510) + 1.5% x $7,000 (=$105)] x 3 = $ 1,845/year Her total annual benefit is $12, ($10, $1,845) or $1,039.88/month. Example 2 Now apply this to an example of an employee who is subject to the Benefit Accrual Freeze who retires in 2008 with 13 Years of Benefit Service prior to the Benefit Accrual Freeze (11 before January 1, 2006 and 2 after January 1, 2006) and a Final Average Salary of $58,000. The Social Security Wage Base in 2007 is $97,500 (50% of this amount is $48,750). Her annual retirement benefit payable at age 65 (called the Normal Retirement Benefit ) would be calculated like this: Benefit Formula 1-2/3% x $58,000 x 11 = $10,633.55/year Post 2005 Benefit Formula [1% x $48,750 (=$487.50) + 1.5% x $9,250 (=$138.75)] x 2 = $1,252.50/year Her total annual benefit is $11, ($10, $1,252.50) or $990.51/month. The benefits in the two examples above represent a monthly retirement benefit payable as a Straight Life Annuity beginning at age 65. A Straight Life Annuity pays you a benefit beginning with the month you retire, and ending at your death, no matter how long you live after retirement. If you want to have payments made in a different form, including payments to a beneficiary after your death, your monthly benefit will generally be smaller than this amount. 15

20 However, the total payments under each optional form of payment are actuarially equivalent to all the other forms. Your benefits also may be reduced if you retire and begin benefit payments before age 65, as described on page 17 under Early Retirement. You have several other payment options in addition to the Straight Life Annuity. In addition, if you are married, you must elect a form of payment that pays a survivor benefit to your spouse, unless he or she gives written, notarized consent to waive that form of payment. This is a requirement of federal law. Maximum Benefit Limit: 50% of Final Average Salary Your total retirement benefit payable under the Vought Retirement Plan, including the benefit earned under one of the heritage plans (as provided in the Appendix), is limited to 50% of your Final Average Salary. For example, if your Final Average Salary is $58,000, your total annual retirement benefit cannot be more than $29,000. Transition Rule for Heritage Plan Benefits If you accrued a benefit under one of the heritage plans before the date that plan adopted the new benefit formula in 1995, and that accrued benefit is higher than 50% of your Final Average Salary, you are entitled to that accrued benefit amount. For example, if your Final Average Salary at retirement is $60,000, and your annual retirement benefit equaled $32,000 on the date your heritage plan converted to the new formula, you will receive the higher annual benefit amount even though it is more than 50% of your Final Average Salary. As a practical matter, if you have continued to work since 1995 and received regular salary increases since then, it is very unlikely that this transition rule will apply to you. When You Can Retire Normal Retirement and Postponed Retirement Your Normal Retirement Date under the Plan is the first day of the month following your 65th birthday (or your 65th birthday, if your birthday is the first day of the month). You can receive an unreduced benefit at any time on or after your Normal Retirement Date. You may continue working for the Company beyond age 65 and continue earning benefits under the Plan. In this case, your retirement benefits will not start to be paid to you until you actually retire. This is called a Postponed Retirement Benefit. If you continue working for the Company after you reach age 65, you forfeit the monthly pension payments you would have received from age 65 to the actual date you commence receiving a benefit. At the time you do retire, you receive a benefit based on your Final Average Salary and Years of Benefit Service earned until that time, but you do not receive an actuarial increase to account for the benefits that you would have been paid had you retired at age 65. Of course, if your benefit was frozen as of December 31, 2005 or December 31, 2007, your benefit will be based on your Final Average Salary and Years of Benefit Service as of the freeze date, regardless of when you retire. Working Past Age 70½ If you reached age 70½ on or before December 31, 2001, you were required to commence your retirement benefits even if your employment continued with the Company. You were required to elect a form of payment and commence your benefits on the April 1 of the year following your 16

21 attainment of age 70½. When you terminate your employment with the Company, you may make a new election on how to receive your benefits. This is the one exception to the rule that you cannot change your payment form once your retirement benefits commence. If you reach age 70½ after December 31, 2001, you are not required or allowed to commence your benefits from the Plan prior to terminating employment. Early Retirement Once you have 10 Years of Early Retirement Service (generally equal to Vesting Service for most employees), you can retire from active service at any time after you reach age 55. Your benefit may be reduced for early payment. The amount of this reduction, if any, depends on your age or your Points when you retire. Usually, your benefit is reduced when you retire before Normal Retirement Age because you will receive payments over a longer period of time. For example, if you retire at 55, you will receive payments for 10 years more than if you retired at age 65. However, if you retire on or after age 55 with 85 Points, your benefit will not be reduced from your Normal Retirement Benefit (the benefit normally payable at age 65). If your total Points are less than 85, your retirement benefit is reduced based on the percentage in the chart below. Use this chart to determine the percentage of your Normal Retirement Benefit that you will receive based on your age and Points when you retire; use your age or Points, depending on which gives you the higher benefit. Remember that Points are generally the sum of your age and your Years of Benefit Service (plus service that would be counted as Years of Benefit Service if your benefits had not been frozen effective December 31, 2005 or December 31, 2007). Percentage of Your Normal Your Age or Your Number of Points Retirement Benefit that You When Payments Begin Receive Age 55 or 75 Points 75.0% Age 56 or 76 points 77.5% Age 57 or 77 points 80.0% Age 58 or 78 points 82.5% Age 59 or 79 points 85.0% Age 60 or 80 points 87.5% Age 61 or 81 points 90.0% Age 62 or 82 points 92.5% Age 63 or 83 points 95.0% Age 64 or 84 points 97.5% Age 65 or 85 points 100.0% 17

22 For example, if you are age 60 with 23 Years of Benefit Service, you have 83 Points. By using the chart, you can see that the percentage at age 60 is 87.5%, compared to 95% with 83 Points. Therefore, you would use the 95% factor to determine your Early Retirement Benefit. If you have a Normal Retirement Benefit of $1,000/month payable at age 65, you could receive a monthly benefit of $950 ($1,000 x 95%) at age 60 with 83 Points. Reductions are calculated to the nearest month, and interpolated between the percentages shown. For example, if you are age 63, you are entitled to 95% of your benefit, as shown in the chart. If you are age 63 and six months, you are entitled to 96.25% of your Normal Retirement Benefit. If you are a Grumman heritage employee, your pre-1995 benefits are subject to different early retirement rules and reduction factors. See the Appendix for more details. Special Layoff Provision If you are laid off before you reach age 55, you may elect an Early Retirement Benefit to begin as early as age 55 if: You have 75 Points on the date of your layoff, or You are age 53 with 10 or more Years of Vesting Service at the time of your layoff. Your benefit will be calculated based on your age and Points, as described previously. If you receive a layoff notice but you transfer within the Company or its affiliates instead of being laid off, you are no longer eligible for the special layoff provision. If you are laid off and are then rehired before benefits begin, the special layoff provision no longer applies. Deferred Vested Retirement If your employment with the Company ends before you are eligible to begin receiving your benefit, but after you are vested in the Plan, you are entitled to a benefit payable at a later date. This is called a Deferred Vested Benefit. Your Deferred Vested Benefit can be paid as early as age 55, if you have at least 10 Years of Early Retirement Service. The following chart shows the reduction factors that apply to a Deferred Vested Benefit received before age

23 Deferred Vested Retirement Factors (When You Retire as a Deferred Vested Employee) Your Age When Percentage of Your Normal Retirement Payments Begin Benefit that You Receive 55 46% 56 49% 57 53% 58 57% 59 62% 60 67% 61 72% 62 78% 63 85% 64 92% % For example, if you work for the Company for 10 years and quit at age 40, and during that time you accrued a Normal Retirement Benefit of $1,000/month, you could start to receive that benefit as early as age 55. At that age, your monthly Deferred Vested Benefit (payable as a Straight Life Annuity) would be $460/month ($1,000 x 46%). You may defer payment of your benefit until the April 1 following the calendar year in which you reach age 70½. Deciding How to Receive Your Retirement Benefit You can choose how your retirement benefit is paid to you. You must file an election form with your payment option in order to receive a benefit. This election form may be filed no more than 90 days before your retirement date. The retirement payment option you select should take into account whether or not you are married, at what age you retire, the age of your spouse, if you receive income from other sources, and many other factors that will be unique to your circumstances. The decision on how to receive your retirement benefit is an important one and should be made carefully. It requires you to look strategically at your current financial picture and your future financial needs. Take your time and consider all your sources of income. Estimate your expenses and talk to your family. It may also be advisable to consult with your tax advisor or financial planner before making a decision as important as the payment option you elect. 19

24 You cannot change your payment option election after your official retirement date. Your official retirement date is the first day of the first month for which a benefit is payable under the Plan. If you are married, remember that you will need your spouse s written, notarized consent if you wish to elect an optional form of payment that does not provide a continuing lifetime benefit to your spouse after your death. Your retirement benefit is calculated to be paid as a Straight Life Annuity. Generally, if you elect another option, the benefit payable to you will be reduced to reflect that payments may be continued after your death or payments in the future will increase. Finally, remember that even though the monthly amounts under each option may vary significantly, each of the payment forms provide you with a benefit that is actuarially equivalent to your benefit payable as a Straight Life Annuity. This means that, at the time an option is elected, the present value of the payments expected to be received under that option is the same as the present value of the payments expected to be received under the Straight Life Annuity option. How Benefits Are Paid Automatic Forms of Payment If You Are Unmarried: Straight Life Annuity Option If you are unmarried when your pension benefit payments begin, your benefit is automatically paid in the form of a Straight Life Annuity, unless you elect another option. Under this option, you receive monthly payments for as long as you live. Your benefit is paid on the first day of each month, and payments stop at your death. There are no beneficiary payments made to anyone after your death under this option. If You Are Married: 50% Joint and Survivor Annuity Option If you are married when your pension benefit payments begin, your benefit is automatically paid in the form of a 50% Joint and Survivor Annuity, unless you elect another option. Under this option, you receive reduced monthly payments for as long as you live. If you die before your spouse, he or she is entitled to a monthly payment for the remainder of his or her life equal to 50% of the monthly benefit you were receiving before your death. After your death and your spouse s death, no further payments are made. Because payments may continue after your death under this payment form, the monthly amount payable to you during your lifetime is less than you would receive under the Straight Life Annuity Option. Note: You are considered married to your legally recognized spouse. Your legally recognized spouse includes your common-law spouse if your state recognizes common law marriage and you provide a Declaration of Informal Marriage, available at the County Clerk s office, or a common-law affidavit to the Company. However, a same-sex spouse is not considered a legally recognized spouse for purposes of the Plan, even if your state recognizes same-sex marriages. This is a requirement of federal law governing ERISA plans. 20

25 Lump Sum Payment: For Certain Small Benefit Amounts If the present value of your total benefit is $1,000 or less when you apply for your benefit, you will automatically receive a Lump Sum payout of your total benefit. You will not have the option of receiving monthly payments. If the present value of your total benefit is between $1,000 and $7,500, and you are at least age 65, or age 55 with 10 Years of Vesting Service, you may choose to receive your total benefit in the form of a Lump Sum. Under this option, you do not receive any further benefit from the Plan. In addition, if you are rehired after receiving a Lump Sum, your prior Benefit Service will not be counted towards any second retirement benefit that you might earn. If you are married and the present value of your total benefit is more than $5,000, you will need spousal consent to choose the Lump Sum Option. Optional Payment Forms When you are ready to retire, you may request a pension calculation that shows your estimated monthly benefit under all the available optional payment forms. Estimated monthly benefits are subject to audit and correction if any of the assumptions used in the calculation are incorrect or turn out to be different after the estimate is provided (e.g., you separate from employment sooner than expected). Two of these optional forms provide a benefit to you only; the remaining four options generally provide a benefit to your spouse or other beneficiary after your death. In addition, if you are married when your pension benefit payments begin, you may elect the Straight Life Annuity Option (as described previously for unmarried participants). Under some of these optional forms, you may elect a benefit that does not provide a benefit to your spouse after your death or you may name someone other than your spouse as beneficiary. Remember, if you are married, electing one of these options may require spousal consent. Level Income Option This option coordinates with your estimated Social Security benefits to provide you with, as nearly as possible, a level monthly income throughout your retirement even before you are eligible to begin receiving Social Security benefits. Under this option, a larger monthly payment will be made to you until either age 62 or age 65, whichever age you anticipate applying for Social Security benefits. After attaining that age, your Plan benefit will be reduced to account for the fact that you will then be eligible to draw Social Security benefits. For example, if you retire at age 58 and your Early Retirement Benefit is $1,600/month and your estimated Social Security benefit is $800/month, you might receive $2,000 in monthly payments from the Plan from age 58 to 62, and then $1,200/month from the Plan starting at age 62. This way, your retirement income from the combination of the Plan and Social Security is a level $2,000/month throughout your retirement, assuming your Social Security benefit equals the estimated amount used at the time of your retirement. After you retire and begin receiving payments, you may not change the age you elected your level income reduction to begin (either 62 or 65). Your monthly retirement payment will be reduced the first of the month following your birthday at the age you selected, whether or not you actually start receiving your Social Security benefits at that age. Under this payment option, no additional payments are made after your death, regardless of your age. 21

26 This option is not available for a Deferred Vested Benefit or if your reduced monthly benefit under this option would be $25 or less. Annual Increase Option Under this option, you receive a reduced monthly benefit for your first year of retirement and, on each anniversary of your retirement date, your payment is increased by 3%. For example, if your benefit amount during the first year is $1,000 per month, here s how your monthly benefit increases each year: First year: Second year: Third year: Fourth year: $1,000.00/month $1,030.00/month $1,060.90/month $1,092.73/month You will receive a 3% increase each year until your death. This option provides an increasing monthly benefit for the rest of your life, with no payments made after your death. Contingent Annuitant Option Under this option, you receive a reduced monthly benefit during your lifetime. After your death, a benefit is paid to your named beneficiary for the remainder of your beneficiary s lifetime. Whether you are single or married, you choose your beneficiary and the percentage of your benefit that continues to your beneficiary after your death (100%, 75% or 50%). If your beneficiary dies before you do, your benefit amount does not change and no payments are made after your death. If you are married, your spouse must consent in writing before a notary to the designation of a non-spouse beneficiary. According to IRS rules, if you elect a non-spouse beneficiary who is more than 20 years younger than you, you may be limited in the percentage of your benefit you may designate for your beneficiary. Combined Contingent Annuitant and Level Income Option This payment option combines the features of the Contingent Annuitant and Level Income Options. This option is not available for a Deferred Vested Benefit or if your monthly benefit under this option would be $25 or less. This option coordinates with your estimated Social Security benefits to provide you with a level income throughout your retirement, and it provides a benefit to your beneficiary after your death (you choose whether the beneficiary portion will be 100%, 75% or 50%) calculated as if you had elected only the Contingent Annuitant Option. For example, assume you elect this option when you are age 58, you choose your level income reduction to occur at age 65, and you choose that your spouse will receive a 75% contingent annuity. If you die before your spouse, your spouse will receive 75% of the amount that you would have received if you had elected the 75% Contingent Annuitant Option without the level income feature (not 75% of the amount that you were receiving at your death). 22

27 Combined Contingent Annuitant and Annual Increase Option This payment option combines the features of the Contingent Annuitant and Annual Increase Options. This option is available only if you are married and designate your spouse as your beneficiary. Under this option, the reduced benefit that would otherwise be payable under the Contingent Annuitant Option is further reduced for your first year of retirement, and at each anniversary of your retirement, your payment is increased by 3% of your prior year s benefit. Upon your death, your spouse will receive 100%, 75% or 50% of the amount that you would have received if you had elected only the Contingent Annuitant Option. Your spouse does not receive the annual 3% increase. For example, you elect this option and specify that you want your spouse to receive a 75% contingent annuity. If you receive increasing payments for 20 years and then die, your spouse will receive 75% of what you would have received if you had elected the 75% Contingent Annuitant Option without the annual increase feature (not 75% of the amount that you were receiving at your death). Ten Year Certain and Continuous Option If you choose this payment option, you receive a monthly benefit for your life with payments guaranteed for 10 years (120 payments). If you die during this 10-year period, the remaining payments are made to your beneficiary. If you survive to receive all 120 payments, payments continue for the rest of your life, but no further payments are made after your death. If your beneficiary dies before you receive all 120 payments, you can name another beneficiary. If your last beneficiary dies after your death but before all 120 payments have been made, the remaining benefits will be paid in a Lump Sum to that beneficiary s estate. You cannot elect this option if you are age 93 or older. How to Determine Contingent Annuitant Payment Options Although all of the forms of benefit payment are actuarially equivalent to the Straight Life Annuity Option, they all result in different monthly payments depending on your age, whether you have a beneficiary and, if so, that beneficiary s age, and whether payments increase (Annual Increase Option) or decrease (Level Income Option) over your lifetime. When you are preparing for retirement, you may request a pension calculation based on retiring on a date within one year. This statement will estimate the amount of your benefit under each of the payment options. Following is an example of how the benefit can vary based on the option you choose. Example: How Each Payment Option Affects an Early Retirement Benefit Amount In the following charts, you can see how an Early Retirement Benefit amount is adjusted for each payment option. These are only estimated amounts based on a sample employee. Your actual retirement benefit is based on your personal information, including your age and your beneficiary s age at your retirement, your years of Benefit Service, your number of Points and your Final Average Salary. This example is based on these assumptions: You retire in 2008 at age 60 with 20 years of Benefit Service. 23

28 Your Final Average Salary is $58,000. You have 80 Points. Your beneficiary is your spouse, and her age is 57. Your Normal Retirement Benefit at age 65 is $18,630.35/year or $1,552.53/month. Your Early Retirement Benefit starting at age 60 with 80 Points is $16,301.56/year, or $1,358.46/month. And If You Die, Your If You Choose the Your Monthly Retirement Benefit Would Be Beneficiary Would Receive Straight Life Annuity $1, $ 0.00 Ten Year Certain and Continuous $1, $1,327.99* 100% Contingent Annuitant $1, $1, % Contingent Annuitant $1, $ % Contingent Annuitant $1, $ Annual Increase Option: Straight Life Annuity $1, $ % Contingent Annuitant $ $1, % Contingent Annuitant $ $ % Contingent Annuitant $ $ *If you die before the end of the 10-year period, your beneficiary receives this amount for the remainder of the 10-year period. If you survive for the 10-year period, your beneficiary receives no benefit. Age 62 Level Income Option The following chart illustrates your monthly Early Retirement Benefit amount under the Age 62 Level Income Option, assuming an estimated Social Security benefit of $970/month, and uses the same assumptions as the previous example. 24

29 If You Choose the Level Income Option At Age 62 with the Straight Life Annuity before age 62 after age % Contingent Annuitant before age 62 after age 62 75% Contingent Annuitant before age 62 after age 62 50% Contingent Annuitant before age 62 after age 62 Your Monthly Retirement Benefit Would Be $2, $1, $2, $1, $2, $1, $2, $1, And If You Die, Your Beneficiary Would Receive $ 0.00 $ 0.00 $1, $1, $ $ $ $ Age 65 Level Income Option The following chart illustrates your monthly Early Retirement Benefit amount under the Age 65 Level Income Option, assuming an estimated Social Security benefit of $1,220/month, and uses the same assumptions as the previous example. If You Choose the Level Income Option At Age 65 with the Straight Life Annuity before age 65 after age % Contingent Annuitant before age 65 after age 65 75% Contingent Annuitant before age 65 after age 65 50% Contingent Annuitant before age 65 after age 65 Your Monthly Retirement Benefit Would Be $2, $ $2, $ $2, $ $2, $ And If You Die, Your Beneficiary Would Receive $ 0.00 $ 0.00 $1, $1, $ $ $ $ If You Die Before Your Benefit Payments Are Scheduled to Begin If you are not married when you die, and you have not yet started your pension, no benefit is paid from the Plan. If you are not vested in the Plan when you die, no benefit is paid. If you are married on the date of your death and you die after you are vested but before you retire (or after you retire but before the payment commencement date you selected), your surviving spouse will be eligible to receive a survivor benefit for his or her lifetime. 25

30 If you die after age 65 (but before you retire), your spouse may begin receiving the survivor benefit immediately. If you are eligible for an Early Retirement Benefit when you die, your spouse could begin receiving the survivor benefit immediately, and the amount of the survivor benefit is based on your Early Retirement Benefit amount. If you die before you are eligible for early retirement and you had 10 or more Years of Early Retirement Service, your spouse can start receiving a reduced survivor benefit any time after you would have reached age 55, and the amount of the survivor benefit is based on your Deferred Vested Benefit. If you die after you are vested but before you are eligible for early retirement and you had fewer than 10 Years of Early Retirement Service, your spouse may start receiving the survivor benefit when you would have reached age 65, and the amount of the survivor benefit is based on your Deferred Vested Benefit. Your spouse may delay payment of benefits until the date that you would have reached age 70½. The amount of the survivor benefit your spouse will receive is equal to the amount he or she would have received if you had terminated employment on the date of your death and elected the 50% Joint and Survivor Option as of the date indicated above and then died immediately. However, if you elect the 75% or 100% Contingent Annuitant Option within 90 days before your payments are scheduled to begin and then you die before your scheduled payment commencement date, your spouse is paid under the option you elected. If the present value of the benefit payable to your spouse is $1,000 or less, this benefit will be paid to him or her in one Lump Sum payment. Unless otherwise provided under a qualified domestic relations order ( QDRO ), your spouse is considered the person to whom you were married at the time of your death. Remember, this includes your common-law spouse if your state recognizes common law marriage and you provide a Declaration of Informal Marriage or a common-law affidavit to the Company, but does not include a same-sex spouse. A QDRO may provide for payment of all or a portion of your death benefits to a former spouse. See page 27 for more information about QDROs. If You Are Rehired after You Retire There is not an automatic suspension of benefits under the Plan if you are re-employed by the Company. You will continue to receive your current benefit, unless you elect otherwise, until your next termination of employment. During your period of re-employment, you may accrue additional benefits under the Plan. This benefit will be based on your total Years of Vesting Service but will only use the Years of Benefit Service accrued since your re-employment to determine your new benefit. If your benefit was or would have been frozen as of December 31, 2005 or December 31, 2007, you will not earn additional Years of Benefit Service during your period of re-employment after that time. If you elect to suspend your retirement benefits during your re-employment, your previous retirement benefit will start again at your subsequent termination (recalculated to take into account the period of suspension) and your new benefit will be calculated as described above. 26

31 You may elect a new payment option for any new benefit you accrue after your re-employment, with your spouse s consent, if applicable. If You Get Divorced: Splitting Your Benefit through a QDRO If you get divorced, the retirement benefits that you have earned under the Company s retirement and savings plans are usually treated as marital or community property, and subject to division according to a domestic relations order. In order for any domestic relations order to compel payment from this Plan, the order has to be what is called a qualified domestic relations order, or QDRO. To be a QDRO, the domestic relations order must generally: Be an order from a court, it cannot be simply a signed agreement between you and your spouse or former spouse; Require payment to a spouse, former spouse, child or other dependent of yours (these dependents are all called alternate payees ); Include the names and mailing addresses of the participant (the employee), and each alternate payee; Specify the name of the plan to which it applies; Specify the amount or percentage of benefits to be paid to the alternate payee, or the method of determining that amount; and Not require that the Plan pay benefits in a form not otherwise offered. This is just an outline of some of the rules. If you anticipate getting divorced, you can get more information, including Model QDROs, from the Vought Benefits Center. You can also submit a domestic relations order in draft form, to make sure that it will be approved before you submit it for court approval. How to Apply for Retirement Benefits Please keep in mind that it is your responsibility to request your retirement benefits from the Company. Once you decide to retire, call your local benefits representative, or the Vought Benefits Center at to request a retirement package. To complete the retirement process, you will need to provide the following documents and information, all in legible form: The date you terminated employment, retired or plan to retire, Your name and home address, A copy of the Social Security cards for you and your spouse, A copy of your birth certificate or passport, A copy of your spouse s birth certificate or passport, A copy of your marriage certificate, and Your telephone numbers (work and home). 27

32 Receiving an Estimate of Your Plan Benefit If you know you will be retiring within one year, you may request a benefit calculation estimate from the Vought Benefits Center. If you are not within one year of retirement but you are vested, you may request an accrued benefit statement instead of a full benefit estimate. This statement shows the current estimated value of your accrued benefit as a Straight Life Annuity. It does not take into account other possible forms of payment, such as a joint and survivor benefit, which allow you to share payments with your spouse or other beneficiary. Benefit estimates are provided only within the current year; your retirement date cannot be projected further into the future for estimating purposes. Estimated monthly benefits are subject to audit and correction if any of the assumptions used in the calculation are incorrect or turn out to be different after the estimate is provided (e.g., you separate from employment sooner than expected). Errors in Payment Once you have commenced benefits, any suspected or known errors in your benefit payment amount should be reported to the Plan Administrator immediately so that any necessary corrections can be promptly made. No participant is entitled to receive a benefit greater than that called for under the terms of the Plan and in accordance with the participant's elections. Generally, if you or your surviving spouse or beneficiary were to receive overpayments from the Plan, regardless of the reason, you would be required to repay the overpaid amount (including interest) to the Plan s trust, either through a lump-sum repayment or a series of reductions from future benefit payments. Likewise, verified underpayments will be corrected by the Plan Administrator as soon as administratively possible. 28

33 General Information about the Plan Name of Plan Plan Sponsor Vought Aircraft Industries, Inc. Retirement Plan Vought Aircraft Industries, Inc. 201 East John Carpenter Freeway Suite 900 Irving, TX Mailing Address: Vought Aircraft Industries, Inc. P.O. Box Mail Stop 49L-01 Dallas, TX Plan Sponsor EIN Plan Number 001 Type of Plan Plan Administration Plan Administrator Agent for Service of Legal Process Plan Trustee Defined benefit pension plan The Plan is administered by the Plan Administrator indicated below Administrative Committee for the Retirement Plans of Vought Aircraft Industries, Inc. P.O. Box Mail Stop 49L-01 Dallas, TX CT Corporation 350 North St. Paul, Suite 2900 Dallas, TX State Street Bank and Trust Company Master Trust Client Services One Enterprise Drive North Quincy, MA Plan Year End December 31 29

34 Funding The Plan is funded through a trust. The Company makes contributions to the Plan as necessary to meet all IRS funding requirements. No employee contributions are required or permitted. When You Pay Taxes When you receive your monthly retirement benefit, generally you are subject to federal income tax and, in some states, state and local income tax on the payments. If you receive a Lump Sum payment of your retirement benefit, you may be able to roll over the payment into another qualified plan or an individual retirement account (IRA) and postpone payment of certain federal, state and local income taxes to a later date. If you do not roll over your Lump Sum into another qualified plan or IRA, your distribution generally is subject to a mandatory 20% withholding for federal income taxes; similar withholding may apply in your state. Your spouse or other non-spouse beneficiary may also roll over a Lump Sum benefit into an IRA. Assignment of Benefits Your benefits belong to you and, except in the case of a QDRO (defined below) or IRS levy, may not be sold, assigned, transferred, pledged or garnished. If you (or your beneficiary) are unable to care for your own affairs, the Plan Administrator may pay your benefits directly to your legal representative or guardian or other custodian, or other person determined to be appropriate at the discretion of the Plan Administrator. A QDRO is a qualified domestic relations order. It is an order issued by a court that requires benefit payments to a spouse, former spouse, child or other dependent. If the Plan Administrator determines that an order is qualified, some or all of your benefits may be paid to the person designated in the order (called an alternate payee). Loss of Benefits Certain circumstances result in a loss or delay of benefits. Here are some examples of these types of circumstances: If you terminate employment with the Company before earning five Years of Vesting Service, and have not reached age 65 prior to termination, your benefit from the Plan will be zero. If you move and do not notify the Plan Administrator, you will not receive information about the Plan or your benefits until you contact the Plan Administrator. If you cannot be located, in some cases you may forfeit your benefit. However, your benefit will be reinstated if you provide your new address to the Plan Administrator. If the Plan is terminated before you retire, you will be unable to earn benefits after the date of Plan termination. If there are not sufficient funds to pay all benefits at termination, the Pension Benefit Guaranty Corporation (PBGC) guarantees some or all of the benefits you previously earned. If you die before commencing benefit payments under the Plan, any benefit you had earned will be forfeited unless it is payable to a qualifying spouse or other dependent. 30

35 Maximum Benefit for Tax Purposes Plan benefits are limited by federal tax laws to an annual maximum. In addition, federal tax laws limit the amount of compensation that may be used to calculate your benefits. These limits may be increased in accordance with IRS regulations. Top Heavy Rules Federal regulations require that the Plan include provisions that take effect in the event the Plan ever becomes top-heavy. The Plan is considered top-heavy if 60% or more of the Plan s benefits have accrued in favor of key employees (as defined by the IRS). The Company does not expect this Plan to become top-heavy. Future of the Plan: Company s Right to Amend and Terminate the Plan The Company intends to continue the Plan indefinitely. However, the Company has the right to amend any and all provisions of the Plan, cease future accruals, or terminate the Plan at any time in whole or in part, in its sole discretion. Any amendment, suspension or termination will be made by resolution of the Company s Board of Directors, or any person to whom it has delegated that authority. When plan amendments are made that materially affect benefits, a summary of the changes will be communicated to affected Plan participants. If the Plan is terminated, all of your accrued Plan benefits will immediately become vested. Certain Benefits Insured by the Pension Benefit Guaranty Corporation Your pension benefits under this Plan are insured, up to certain limits, by the federal Pension Benefit Guaranty Corporation (PBGC). If the Plan is terminated, you will have a vested right to receive the benefits you have earned under the Plan, to the extent the Plan has assets to pay benefits. If the Plan does not have enough assets to pay all benefits, the PBGC will step in to pay some or all of those remaining benefits. Most people will receive all of the pension benefits they would have received under this Plan, but some people may lose certain benefits. The PBGC guarantee generally covers: Normal and early retirement benefits; Disability benefits if you become disabled before the Plan terminates; and Certain benefits for your survivors. The PBGC guarantee generally does not cover: Benefits greater than the maximum guaranteed amount established for the year in which the Plan terminates; Some or all of benefit increases and new benefits based on Plan provisions that have been in place for less than five years at the time of termination; Benefits that are not vested because you have not worked long enough for the Company; Benefits for which you have not met all of the requirements at the time the Plan terminates; 31

36 Certain early retirement payments (such as supplemental benefits that stop when you become eligible for Social Security) that result in a monthly Early Retirement Benefit greater than your monthly benefit at the Plan s Normal Retirement Age; and Non-pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay and severance pay. Even if certain of your benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money the Plan has and on how much the PBGC collects from employers. For more information about the PBGC and the benefits it guarantees, you may contact the PBGC s Technical Assistance Division, 1200 K Street N.W., Suite 930, Washington, D.C or call TTY/TTD users may call the federal relay service toll-free at and ask to be connected to Additional information about the PBGC s pension insurance program is available through the PBGC s website at 32

37 Claim Review and Appeals Sometimes you may believe that you are entitled to a retirement benefit different from what is included in the calculation you receive from the Vought Benefits Center. For example, you may believe that you should have been credited with more service than Plan records show, or you may believe that your Final Average Salary should have been calculated differently. Whatever the reason, if you disagree with your retirement benefit calculations, very often it can be resolved informally by calling or visiting the Vought Benefits Center and discussing the situation. Filing a Formal Claim for Benefits If, after trying to resolve your concerns informally, you still believe you are entitled to benefits other than those provided to you, you may file a formal claim for benefits with the Plan Administrator. To do so, you must send a written notice to the Plan Administrator at the following address: Administrative Committee for the Retirement Plans of Vought Aircraft Industries, Inc. P.O. Box Mail Stop 49L-01 Dallas, TX Your letter should state the reason you think you are entitled to a benefit different from the Plan s calculation, and should provide any supporting materials. If your claim for a benefit under this Plan is denied, in whole or in part, you (or your beneficiary) will receive a written explanation of the reason for the denial from the Plan Administrator. You should receive this notice within 90 days after the Administrative Committee receives your claim. If up to an extra 90 days are needed to make a decision due to special circumstances, you will be notified in writing. If your claim for benefits is denied, the written notice will include: Specific reasons for the denial; References to Plan provisions on which the denial is based; A description of any additional materials or information that are necessary; Procedures for appealing the decision, including applicable time limits; and A statement of your right to bring a civil action under Section 502(a) of ERISA following a denial of your claim on appeal. You or your authorized representative may review all documents related to any denial of benefits. 33

38 Appealing a Claim Denial If you disagree with the Plan Administrator s decision regarding your benefits claim, you have 60 days from receipt of written notification of the denial (or partial denial) to request a review on appeal. This request should be made in writing and sent to the Plan Administrator at the following address: Administrative Committee for the Retirement Plans of Vought Aircraft Industries, Inc. P.O. Box Mail Stop 49L-01 Dallas, TX Your appeal request should state all the grounds on which your request for a review is based. You should state any facts, address any issues and make any comments that support your request. Besides having the right to appeal, you or your authorized representative also has the right to examine, at locations and times convenient to the Plan Administrator, or to receive copies of, upon request and free of charge, any documents, records or other information relevant to your claim. Your appeal to the Administrative Committee will be reviewed, and a decision will ordinarily be made at the next regularly scheduled Administrative Committee meeting. If your appeal is received within 30 days preceding the date of the next scheduled meeting, a decision will be made no later than the date of the second meeting following the Administrative Committee s receipt of the appeal. If special circumstances require a further extension of time, a decision will be made not later than the third meeting following the Administrative Committee s receipt of your appeal. If an extension of time is required, the Committee will provide you with written notice of the extension, describing the special circumstances and the date as of which the decision will be made, prior to the commencement of the extension. The Administrative Committee will notify you of its decision within five days after a decision is made. You will receive written notification of the Administrative Committee s final decision, including, for an adverse decision: Specific reasons for the decision; References to specific Plan provisions on which the decision is based; A statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant to your claim; and A statement of your right to bring a civil action under Section 502(a) of ERISA. The decision of the Plan Administrator is final and conclusive. If your claim appeal is denied, you may bring legal action in court, provided you abide by certain time limitations. Specifically, you may not bring legal action on a claim for benefits against a party under the Plan after the latest of: 34

39 One year from the time the claim arose, or 90 days from the final disposition of the claim by the Administrative Committee. In addition, the action must be filed before the time any otherwise applicable statute of limitations expires, if sooner than the time periods referenced above. The Plan Administrator or its delegate shall have full and sole discretionary authority to interpret all Plan documents and to make all interpretive and factual determinations as to whether any individual is entitled to receive any benefit under the terms of this Plan. The Plan Administrator or its delegate shall determine, exercising its discretion, appropriate courses of action in light of the reason and purpose for which this Plan is established and maintained. Any construction of the terms of any Plan document and any determination of fact adopted by the Plan Administrator or its delegate shall be final and legally binding on all parties. The resolution, settlement, or adjudication of a claim may result in a compliance procedure 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 Plan Administrator, it does not result in disqualification of the Plan or violate (or cause the Plan to violate) any applicable statute, government regulation or ruling. 35

40 Your Rights under ERISA As a participant in the Vought Aircraft Industries, Inc. Retirement Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA provides that all Plan participants are entitled to: Examine, without charge, at the Plan Administrator s office and at other specified locations, such as worksites, all documents governing the Plan, including the annual report and summary descriptions, as well as documents filed with the U.S. Department of Labor. Obtain copies of the Plan document and certain other Plan information, by making a written request to the Plan Administrator. There may be a charge for copies. Receive a summary of the Plan s annual financial report. You do not have to request a copy of this summary; it will be automatically sent to you each year. Receive a statement telling you whether you have a right to receive a pension at Normal Retirement Age (age 65) and if so, what your benefits would be at Normal Retirement Age if you stop working under the Plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. This statement must be provided at least once every three years, but may be requested (in writing) up to once every 12 months. The Plan will provide this statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the people responsible for the operation of the Plan. These people, called fiduciaries, have a duty to operate your Plan prudently and in the interest of you and other Plan participants and beneficiaries. No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. If your claim for a pension benefit is denied, in whole or in part, you will receive a written explanation of the reason for the denial. You also have the right to have your claim reviewed and reconsidered. If your claim on appeal is denied, in whole or in part, you may file suit in a state or federal court. Under ERISA, there are steps you can take to enforce these rights. For instance, if you make a written request for Plan documents and do not receive them within 30 days, you may file suit in federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you believe that the Plan s fiduciaries misuse Plan assets, or you believe you have been discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the entity you sued to pay these costs and legal fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. 36

41 If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C

42 Appendix to the Vought Retirement Plan Summary Plan Description for Transferred and Delayed Transferred Employees July 1, 2009

43 Table of Contents Subject Page Vought Aircraft Salaried Retirement Plan... 1 For Benefits Earned before History of the Plan... 1 Eligibility, Vesting and Benefit Service Requirements... 1 Calculating Your Pre-95 Normal Retirement Benefit... 2 Calculating Your Post-94 Normal Retirement Benefit... 3 Add these Benefits Together to Get Your Total Normal Retirement Benefit... 3 Offset for the Hourly Plan Benefits... 4 Early Retirement... 4 Early Retirement with 85 Points... 5 Deferred Vested Retirement... 6 Special 1995 Minimum Benefit... 8 Payments Options... 8 Northrop Retirement Plan... 9 For Benefits Earned before History of the Plan... 9 Benefit Service... 9 Annual Salary... 9 Pre-1989 Service and Annual Salary Fixed and Variable Option Grumman Corporation Pension Plan For Benefits Earned before History of the Plan Overview: Your December 31, 1994 Benefit Statement Eligibility, Vesting and Benefit Service Requirements Calculating Your Post-94 Normal Retirement Benefit Add these Benefits Together to Get Your Total Normal Retirement Benefit i

44 Table of Contents (continued) Subject Page Early Retirement and Deferred Vested Benefits Cost of Living Adjustment Overall Maximum Benefit Payment Options for Your Pre-95 Grumman Corporation Pension Plan Benefit Contingent Annuitant with Pop-Up Option Combined Contingent Annuitant and Level Income with Pop-Up Option Period Certain and Continuous Option Combined Period Certain and Level Income Option If You Die before Benefits Begin: Survivor Payments from Your Pre-95 Benefit ii

45 Vought Aircraft Salaried Retirement Plan For Benefits Earned before 1995 This section provides an overview of the Vought Aircraft Salaried Retirement Plan for benefits earned before This applies only to employees who participated in the Vought Aircraft Salaried Retirement Plan before 1995, who continued working for Vought Aircraft Company or Northrop Grumman Corporation or its affiliated companies between 1995 and 2000, and who transferred to the new Vought Aircraft Industries, Inc. as part of the July 24, 2000 sale. If you were not an employee transferred as part of the Vought sale on July 24, 2000, this section does not apply to you. History of the Plan Effective January 1, 1995, the Vought Aircraft Salaried Retirement Plan was amended to adopt the benefit formula under the Northrop Retirement Plan for service after December 31, Therefore, your total retirement benefit will be a combination of the benefit you earned under the formula in the pre-95 Vought Aircraft Salaried Retirement Plan, and the formulas that apply during and after This section helps you determine the benefit you earned before 1995 under the Vought Aircraft Salaried Retirement Plan. For information about your benefit earned during and after 1995 and general rules regarding applying for retirement, claim and appeal rights, and administration of the Vought Aircraft Industries, Inc. Retirement Plan, please see the main part of this Summary Plan Description. This Appendix contains a general summary of your pre benefits. The official plan rules are found in the Vought Aircraft Salaried Retirement Plan documents. Although every effort has been made to provide accurate information here, the official plan document governs in the event of any inconsistency between this summary and the plan document. Eligibility, Vesting and Benefit Service Requirements Before 1995, the Vought Aircraft Salaried Retirement Plan had the following conditions for becoming eligible for the Plan, and for earning Vesting Service and Benefit Service (formerly called Credited Service ). Please note that these terms only apply for pre-95 service, and are only very general descriptions of the rules. You must refer to the Plan document in effect at that time for a more detailed description of these requirements. Eligibility Vesting Age 21 and one year of service Not covered by a collective bargaining agreement Not a leased employee or nonresident alien Starts on date of hire Ends on date of termination Includes collective bargaining service 1

46 Benefit Service (Credited Service) Starts on date of hire Includes pre-95 Benefit Service earned under the Hourly Plans Calculating Your Pre-95 Normal Retirement Benefit Use the formula below to determine the benefit you earned under the Vought Aircraft Salaried Retirement Plan before Your normal retirement benefit payable at age 65 will be equal to this benefit plus the benefit you earn from 1995 until your termination or retirement under the new formula. The benefit formula for your pre-95 annual benefit is: 1.5% x Your Final Average Salary x Your Years of Benefit Service earned before 1995 Minus 1.5% x Your Estimated Annual Social Security Benefit x Your Years of Benefit Service earned before 1995 (limited to 33-1/3 years) Here s how to determine the three components that go into this formula: Final Average Salary Estimated Annual Social Security Benefit Benefit Service Calculated the same way as under current rules Highest 3 years Annual Salary out of last 10 years Annual Salary before 1995 calculated based on prior rules Annual Salary after 1994 calculated the same way as current rules Frozen as of December 31, 2005, if less than 5 Years of Vesting Service and not yet age 65 as of December 31, 2005 Frozen as of December 31, 2007, if less than 16 Years of Vesting Service as of December 31, 2007 Estimated benefit you would be entitled to receive from Social Security as of the first of the year following retirement under the law in effect at termination of employment payable using the schedule of benefits at termination but including wages in the year of retirement. Earnings may be estimated Actual Social Security earnings can be provided Frozen as of December 31, 2005, if less than 5 Years of Vesting Service and not yet age 65 as of December 31, 2005 Frozen as of December 31, 2007, if less than 16 Years of Vesting Service as of December 31, 2007 This was called Credited Service in the former plan Generally equals your full years of service as a salaried employee 2

47 Earned Before 1995 Service in a collective bargaining unit, prior to becoming a salaried employee, will also be included as Benefit Service (Your benefit will be subject to an offset for benefits earned under the Hourly Plan(s)) See pre-95 Plan for detailed rules For example, if you have a Final Average Salary of $65,000, an Estimated Annual Social Security Benefit of $14,200, and 14 Years of Benefit Service earned before 1995, your pre-95 benefit would be calculated as follows: 1.5% x $65,000 x 14 (= $13,650) Minus 1.5% x $14,200 x 14 (= $2,982) = $13,650 - $2,982 = $10,668/year or $889/month Calculating Your Post-94 Normal Retirement Benefit Remember, the formulas for calculating your post-94 benefit are: Benefit Formula 1-2/3% x Your Final Average Salary x Your Years of Benefit Service earned after 1994 and before January 1, 2006 Post 2005 Benefit Formula (1% x Your Final Average Salary up to 50% of the Social Security Wage Base + 1.5% x Your Final Average Salary over 50% of the Social Security Wage Base) x Your Years of Benefit Service earned after December 31, 2005 Assume you earn 14 more Years of Benefit Service after Years before January 1, 2006 and 3 Years after January 1, Also assume the Social Security Wage Base is $102,000. Here s how your post-94 benefit would be calculated: Benefit Formula 1-2/3% x $65,000 x 11 (= $11,916.91) Plus Post 2005 Benefit Formula [1% x $51,000 (= $510) + 1.5% x $14,000 (= $210)] x 3 (= $2,160) = $11, $2,160 = $14,076.91/year or $1,173.08/month Add these Benefits Together to Get Your Total Normal Retirement Benefit You add the pre-95 benefit and the post-94 benefit together to get your total benefit payable at age 65: $10,668 + $14, = $24,744.91/year or $2,062.08/month. 3

48 This is the amount you would receive, starting at age 65, and payable as a Straight Life Annuity. If you elect to receive benefits in a form other than a Straight Life Annuity, your monthly benefit amount will be different. See the main part of this Summary Plan Description for general options, and see below for payment options that are only available for the pre-95 portion of your benefit. Offset for Hourly Plan Benefits If you earned benefits under the Vought Hourly Retirement Plan or the Vought Protective Services Retirement Plan (the Hourly Plans) before 1995, your benefit under the Vought Aircraft Salaried Retirement Plan will be calculated taking into account all of your pre-95 Benefit Service, including service under the Hourly Plans. However, your total benefit under the Vought Aircraft Salaried Retirement Plan will then be reduced (offset) by the amount of your benefits earned under the Hourly Plan(s). For example, assume you were hired in 1969 as an hourly employee and earned eight years of Benefit Service through You transferred and became a salaried employee in 1977, and remained a salaried employee until you terminated or retired. Your total Benefit Service up to December 31, 1994 includes your eight years of Hourly Plan service, and your next 18 Years of Benefit Service under the Plan. Your pre-95 benefit will be calculated based on your total 26 Years of Benefit Service through 1994, but your benefit will then be reduced by the amount of your Hourly Plan benefit. In calculating your Hourly Plan benefit to use as an offset, only your pre-1995 Benefit Service earned under those plans prior to becoming a salaried employee is counted, but the calculation uses the dollar rate in effect under the Hourly Plans at the time of your termination (or freeze date, if earlier), even if you are then a salaried employee. Early Retirement Once you have 10 Years of Vesting Service, you can retire from active service at any time after the first day of the month on or after your 55th birthday. If you terminate employment on or after age 62, your Estimated Annual Social Security Benefit is calculated the same as for your normal retirement benefit. If you terminate employment prior to age 62 (or if your benefit was frozen as of December 31, 2005 or December 31, 2007 and you were under age 62 at that time), your Estimated Annual Social Security Benefit is the estimated Social Security benefit that you would be entitled to receive at age 62, assuming your current pay (or pay at the time your benefit was frozen) continues until age 62. In addition, if you retire before age 65 and you have less than 85 Points, your benefits are reduced to account for your early retirement. The amount of this reduction depends on your age and your Points when you begin receiving your retirement benefit. In general, Points is the sum of your age and your Benefit Service. 4

49 The same early retirement reduction factors apply to your pre-95 benefit as apply to your post-94 benefit. This is the same chart that is in the main part of this Summary Plan Description. Your Age or Your Number of Points When Payments Begin Percentage of Your Normal Retirement Benefit Age 55 or 75 Points 75.0% Age 56 or 76 Points 77.5% Age 57 or 77 Points 80.0% Age 58 or 78 Points 82.5% Age 59 or 79 Points 85.0% Age 60 or 80 Points 87.5% Age 61 or 81 Points 90.0% Age 62 or 82 Points 92.5% Age 63 or 83 Points 95.0% Age 64 or 84 Points 97.5% Age 65 or 85 Points 100.0% For example, if you are age 57 with 25 Years of Benefit Service; you would have 82 Points. Assume you have a normal retirement benefit of $18,000/year or $1,500/month (payable at age 65). Since your 82 Points gives you a higher percentage than your age (92.5% v. 80%), you would apply the 92.5% factor to your normal retirement benefit. This means that you could begin to receive $16,650/year or $1,387.50/month, beginning at age 57. Of course, you could also wait until age 60 (the age at which you will have 85 Points) and receive the full $18,000/year. Early Retirement with 85 Points If you have 85 Points or more, then you can retire on or after age 55 with a special subsidy that applies to the pre-95 portion of your benefit until you reach age 62. Under this feature of the pre-95 Plan, the Social Security offset portion of the benefit formula does not apply until after you reach age 62. For illustration, let s go back to our example where you have a Final Average Salary of $65,000, and an Estimated Annual Social Security Benefit of $14,200/year. If you have 85 or more Points at retirement, your pre-95 benefit payable until age 62 will be $13,650/year or $1,137.50/month. After reaching age 62, your pre-95 benefit will be $10,668/year or $889/month. 5

50 Here s how the benefits compare, depending on whether you have 85 Points at retirement, or retire after age 55 with the early retirement factors. Our examples both have: Final Average Salary of $65,000 Estimated Annual Social Security Benefit of $14, Years of Benefit Service through the end of 1994, and 14 Years of Benefit Service from 1995 through Age and Benefit Service Points Monthly Pre-95 Benefit To Age 62 Monthly Pre-95 Benefit After Age 62 Monthly Post-94 Benefit* Total Monthly Benefit Age 57, 28 Years of Service 85 $1, $889 $1, Before 62: $2, After 62: $2, Age 55, 28 Years of Service 83 $889 x 95% = $ (applying early retirement % from chart) $ $1, x 95% = $1, Both before and after 62: $1, * See prior example on page 3. This amount stays the same both before and after age 62. Deferred Vested Retirement If you leave the Company before you are eligible to begin receiving your benefit, but after you are vested in the Plan, you are entitled to a benefit payable at a later date. This is called a deferred vested benefit. The deferred vested benefit payable at age 65 is calculated using the same formula as the normal retirement benefit, except that the Social Security offset portion of the formula is adjusted as follows: Your Estimated Annual Social Security Benefit is the estimated Social Security benefit that you would be entitled to receive at age 65, assuming your current pay (or pay at the time your benefit was frozen) continues until age 65, and The formula is 1.5% x (Your Estimated Annual Social Security Benefit) x (Your Years of Benefit Service projected to age 65 not greater than 33-1/3 years) x [(Your Actual Years of Benefit Service earned prior to 1995) (Your Years of Benefit Service projected to age 65)] For example, if on December 31, 1994 you were age 40 and had 15 Years of Benefit Service, and you terminated employment on December 31, 2008 at age 54 with a Final Average Salary of $65,000 and an Estimated Annual Social Security Benefit of $14,000, your Deferred Vested Benefit payable at age 65 would be calculated as follows: 6

51 Pre 1995 Benefit Formula 1.5% x $65,000 x 15 (= $14,625) minus 1.5% x $14,000 x (33-1/3) x (15 40) (=$2,625) = $12,000/year or $1,000/month Benefit Formula 1-2/3% x $65,000 x 11 (= $11,916.91) Plus Post 2005 Benefit Formula [1% x $51,000 (= $510) + 1.5% x $14,000 (= $210)] x 3 (= $2,160) = $11, $2,160 = $14,076.91/year or 1,173.08/month Your total monthly benefit, payable beginning at age 65, would be $2, ($1,000 + $1,173.08). Your deferred vested benefit can be paid as early as age 55, if you have at least 10 Years of Early Retirement Service. The chart below shows the reduction factors that apply to a deferred Vested Benefit received before age 65. Deferred Vested Retirement Factors If Payments Start at Age Percentage of Your Age 65 Benefit That You Receive 55 46% 56 49% 57 53% 58 57% 59 62% 60 67% 61 72% 62 78% 63 85% 64 92% % For example, if you work for the Company for 10 years and quit at age 40, and during that time you accrued a normal retirement benefit of $1,000/month, you could start to 7

52 receive that benefit as early as age 55. At that age, your monthly benefit (payable as a Straight Life Annuity) would be $460/month. Special 1995 Minimum Benefit The Vought Aircraft Salaried Retirement Plan was amended to include the new formula during 1995, and applied the new formula to benefits earned starting January 1, However, because of the timing of that amendment, under IRS rules the Plan is required to pay you a minimum benefit of no less than the benefit that you would have earned under the old formula up through December 31, 1995, if that benefit is larger than the benefit you earn under the old and new formulas put together, effective January 1, This is a transition rule that, while it must be continued under the Plan, is unlikely to apply to participants anymore. Payment Options If you have a pre-95 benefit accrued from the Vought Aircraft Salaried Retirement Plan, you can have this benefit paid under any of the options available for your post-94 benefit, but you can also have a portion of your total benefit paid separately as a 66-2/3% survivor benefit. This option will pay you a reduced pre-95 benefit until the earlier of your death or your spouse s death, at which time the survivor (you or your spouse) will receive two-thirds of the amount payable before the first death. After you and your spouse die, no further payments are made. If you elect this option, the remainder of your benefit will be paid as a 75% Contingent Annuity. If you are a member of a collective bargaining unit at your termination, you may also receive a portion of your total benefit paid separately as an Optional Survivor Benefit available under the Hourly Plans. This option will pay you a reduced benefit until the earlier of your death or your spouse s death. If you die first, your spouse will receive 55% of the amount that you were receiving prior to your death. If your spouse dies first, your benefit will increase to the amount you would have received if you had elected the Straight Life Annuity Option. If you elect this option, the remainder of your benefit will be paid as a 50% Joint & Survivor Annuity. The portion of your total benefit that may be paid as a 66-2/3% survivor benefit or as an Optional Survivor Benefit is equal to the Special 1995 Minimum Benefit described above. 8

53 Northrop Retirement Plan For Benefits Earned before 1995 This section provides an overview of the Northrop Retirement Plan for benefits earned before This applies only to employees who participated in the Northrop Retirement Plan before 1995, who continued working for Northrop Grumman Corporation or its affiliated companies between 1995 and 2000, and who were transferred to the new Vought Aircraft Industries, Inc. as part of the July 24, 2000 sale. If you were not an employee transferred as part of the Vought sale on July 24, 2000, this section does not apply to you. History of the Plan There are only a few differences between the January 1, 1989 restatement of the Northrop Retirement Plan and the post-1995 Vought Aircraft Industries, Inc. Retirement Plan. In general, these features involve the way that Benefit Service was calculated, and the definition of Annual Salary. There is no difference in the formula under which benefits are calculated if you were employed by Northrop Corporation on December 31, 1994 and January 1, This section helps you determine the benefit you earned before 1995 under the Northrop Retirement Plan. Of course, you must refer to the Northrop Retirement Plan documents for more details. Benefit Service Between January 1, 1989 and December 31, 1994, you earned a Year of Benefit Service for each year that: You were an active participant of this Plan, and You received pay for 1,000 or more Benefit Hours. If you did not meet these requirements, you did not earn any Benefit Service for that calendar year. For example, if you worked in a position not covered by the Plan, you didn t earn any Benefit Service. Also, if you were hired late in the year and only worked 900 hours that year, you didn t earn Benefit Service for that year. A Benefit Hour is each hour for which you received pay from Northrop Corporation. This included all paid hours that you worked (both straight time and overtime) and hours for which you were paid for vacation, and hours that you are paid for sickness and holiday, jury duty and other approved time off. This does not include vacation time for which you received cash in lieu of time taken off. Annual Salary Your Annual Salary for years between 1989 and 1995 was generally defined as your total W-2 wages. It included tax-deferred contributions, overtime, extended workweek, bonuses, taxable educational reimbursement and income for Company-provided automobiles and life insurance. Annual Salary during these years did not include certain other things, such as moving expense reimbursement and stock options. 9

54 Pre-1989 Service and Annual Salary Service, Annual Salary and benefits may be determined differently for pre-1989 periods. Details about the pre-1989 rules can be found in the applicable Northrop Retirement Plan documents. You may also contact the Vought Benefits Center for information. Fixed and Variable Option If you were a participant in the Northrop Retirement Plan before January 1, 1975, a portion of the benefit you earned each year was converted to variable benefit units. These units increase or decrease in value each quarter (the last day of March, June, September and December) depending on the investment performance of the equity portion of the assets of the Plan. As a result, the benefit amount would change quarterly to reflect the change in value. As of January 1, 1975, this conversion to variable benefit units was discontinued. However, Plan members before that date retained the number of variable benefit units they had earned for Plan participation prior to January 1, The number of variable benefit units was frozen as of December 31, If you are affected by this provision, you will be told what portion of your benefit is based on variable units when you retire. You may elect to receive your variable benefit adjusted each quarter, or you may elect to have your variable benefit converted to a fixed benefit so that there will be no change in your monthly payments following retirement. You will receive more details about this option at the time you retire. 10

55 Grumman Corporation Pension Plan For Benefits Earned before 1995 This section provides an overview of the Grumman Corporation Pension Plan for benefits earned before This applies only to employees who participated in the Grumman Corporation Pension Plan before 1995, who continued working for Northrop Grumman Corporation or its affiliated companies between 1995 and 2000, and who were transferred to the new Vought Aircraft Industries, Inc. as part of the July 24, 2000 sale. If you were not an employee transferred as part of the Vought sale on July 24, 2000, this section does not apply to you. History of the Plan Effective January 1, 1995, the Grumman Corporation Pension Plan was amended to adopt the benefit formula under the Northrop Retirement Plan for service after December 31, Therefore, your total retirement benefit will be a combination of the benefit you earned under the Grumman Corporation Pension Plan (pre-95 benefit) and the benefit you earned after that (post-94 benefit). This section helps you determine the benefit you earned before 1995 under the Grumman Corporation Pension Plan. Of course, this is only a very general summary, and you must refer to the Grumman Corporation Pension Plan documents for more details. Overview: Your December 31, 1994 Benefit Statement If you worked for Grumman Corporation before 1995, you received a Statement of Your Benefits in February of This statement informed you of the accrued benefit that you had earned under the Grumman Corporation Pension Plan as of December 31, 1994, payable as a Straight Life Annuity beginning at age 65. This pre-95 benefit amount will not change between now and the time you retire. If you have lost this statement, you may contact the Vought Benefits Center to obtain a replacement statement. You can use the information in this statement, together with the information in this Appendix, to calculate your total retirement benefit. Eligibility, Vesting and Benefit Service Requirements You can use the following table to determine when you became eligible for the Plan, when your Vesting Service started, and when you began to earn Benefit Service before Of course, this is only a very general description, and more details apply in determining your exact amount of service. In addition, different rules applied if you left employment before 1995 and were later rehired. You must refer to the Grumman Corporation Pension Plan that applied at the time of your termination and rehire to determine your total Vesting and Benefit Service in that case. 11

56 Plan Year Eligibility Requirements Vesting (Continuous) Service Generally Counts From: Benefit (Membership) Service Generally Counts From: Five years of service Date of hire Date of membership (after five years) Age 25 and 1 year of service Date of hire Date of membership (after age year) Age 21 and 1 year of service Date of hire Date of membership (after age year) 1995 to current Eligible on date of hire Date of hire Date of hire Calculating Your Post-94 Normal Retirement Benefit To calculate your total retirement benefit, you add your Grumman Corporation Pension Plan pre-95 benefit to your post-94 benefit. Remember, the formulas for calculating your post-94 benefit are: Benefit Formula 1-2/3% x Your Final Average Salary x Your Years of Benefit Service earned after 1994 and before January 1, 2006 Post 2005 Benefit Formula (1% x Your Final Average Salary up to 50% of the Social Security Wage Base + 1.5% x Your Final Average Salary over 50% of the Social Security Wage Base) x Your Years of Benefit Service earned after December 31, 2005 Your Final Average Salary is the average of your Annual Salary for the three highest years during the last 10 years that you participated in the Plan, but only counting years since You do not include Annual Salary for years before 1995, even if it means that you take into account less than 10 years of Annual Salary. Here s how your post-94 benefit would be calculated: Assume your Final Average Salary is $65,000, and you earn 11 Years of Benefit Service between 1995 and 2006, and 3 more Years of Benefit Service before your retirement in Also assume the Social Security Wage Base is $102,000. Your post-94 normal retirement benefit is: 12

57 Benefit Formula 1-2/3% x $65,000 x 11 (= $11,916.91) Plus Post 2005 Benefit Formula [1% x $51,000 (= $510) + 1.5% x $14,000 (= $210)] x 3 (= $2,160) = $11, $2,160 = $14,076.91/year or $1,173.08/month Add these Benefits Together to Get Your Total Normal Retirement Benefit Assume that your 1995 Benefit Statement showed that you had an accrued benefit from the Grumman Corporation Pension Plan of $9,000/year based on your total service through You add this amount to your post-94 benefit to get your total benefit payable at age 65: $9,000/year (pre-95 benefit) + $14,076.91/year (post-94 benefit) = $23,076.91/year or $1,923.08/month This $1, amount is the monthly benefit that you would receive, payable at age 65, as a Straight Life Annuity. If you elect to receive benefits in a form other than a Straight Life Annuity, or before age 65, your monthly benefit amount will generally be less. See the main section of this Summary Plan Description for general payment options, and see below for payment options that are only available for the pre-95 portion of your benefit. Early Retirement and Deferred Vested Benefits The calculations above show what your benefit will be if you start to receive your benefit at age 65, and receive it in a Straight Life Annuity form. This is called your normal retirement benefit. Early Retirement Benefits If you retire from active service on or after age 60, you receive 100% of your pre-95 normal retirement benefit. If you retire from active service on or after age 50, and you have at least 20 Years of Vesting Service, you can begin to receive your pre-95 benefit as an Early Retirement Benefit as early as age 50, in accordance with the Early Retirement reduction factors in the chart on page 14. Deferred Vested Benefits If you terminate employment with at least five Years of Vesting Service but less than 20, you can start your pre-95 benefit as early as age 60, in accordance with the deferred vested reduction factors in the chart on page 14. If you terminate employment with at least 20 Years of Vesting Service, you can start your pre-95 benefit as early as age 50, using the early retirement reduction factors in the chart on page 14. If you have 30 or more Years of Benefit Service, you use the early retirement percentage as if you had 20 years, and then add 5% for each Year of Benefit Service over 30 that you earned after For example, if you have 32 Years of Benefit Service, and two of 13

58 these years were earned in 1995 and 1996, then you would add 10% (5% x 2) to the early retirement percentage. However, the resulting early retirement percentage cannot be more than 100%. The following chart illustrates the percentage of your pre-95 normal retirement benefit that you can receive before age 65, depending on your length of service. You use your actual age at retirement (or termination of employment), and your total years of service (both before and after 1995) for this purpose. However, remember that the percentages described here only apply to your pre-95 benefit. Age when Pre-95 Benefit Payments Begin Early Retirement Percentage of Your Normal Benefit that You Will Receive % % % % % % % % % % Deferred Vested Percentage of Your Normal Benefit that You Will Receive Not Eligible to Begin Pre-95 Benefit until Age % 65% % 70% % 76% % 83% % 91% % 100% Here are some examples. In each example assume your pre-95 normal retirement benefit is $9,000/year or $750/month. 14

59 If you retire at age 57 with 25 Years of Vesting Service, then the annual benefit you can receive starting at age 57 is ($9,000 x % =) $7,203.60/year, or $600.30/month. If you retire at age 57 with 32 Years of Benefit Service, and two of those years were earned after 1994, then your annual benefit will be ($9,000 x [ % + 10%] =) $8,103.60/year, or $675.30/month. If you terminate employment at age 57 and had 10 Years of Vesting Service, you would not be eligible to begin your pre-95 benefit until you reach age 60. If you then started your benefit at age 60, you would receive ($9,000 x 65% =) $5,580/year, or $487.50/month. If you wait until age 65 to start your benefit, you would receive the full $9,000/year. Cost of Living Adjustment Under the Grumman Corporation Pension Plan, a special feature called a cost of living adjustment (COLA) is applied to benefits earned before The COLA does not apply to Grumman Corporation benefits earned in 1993 or later years. In general, the benefit you earned before 1993 can be adjusted up or down in a range from 0% to 3% per year to reflect changes in the U.S. Consumer Price Index (CPI). Should the CPI be adjusted downward, you will never receive less than your original unadjusted pre-93 benefit (the base amount ). Any decreases in the CPI that would result in a benefit lower than the base amount will not be reflected in your monthly pension payment. However, subsequent CPI increases will be paid only after any unreflected decreases in the CPI have been offset. If applicable, the COLA adjustment (positive or negative) is reflected each year starting April 1 and is added to any benefit paid on or before the previous January 1. In your first year of retirement, you must begin receiving benefits no later than January 1 in order to receive the COLA adjustment on April 1 of that year. The following examples illustrate how the COLA feature works. Assume your pre-93 benefit (or base amount) is $1,000.00/month and you start receiving payments February 1, Your first COLA increase will be effective April 1, If the CPI increase for 2006 is 2%, your monthly benefit beginning April 1, 2006 will be increased by $20.00 (2% of $1,000.00) for a total pre-93 benefit of $1, Assume that the CPI decrease for 2007 is 4%. Since the maximum annual adjustment is 3% per year, your monthly benefit beginning April 1, 2010 will be decreased by $30.60 (3% of $1,020.00) for a total pre-93 benefit of $ However, since this amount is less than the base amount, your monthly pre-93 benefit beginning April 1, 2007 will be $1, If the CPI increase for 2008 is 3%, your monthly benefit beginning April 1, 2008 will be increased by $29.68 (3% of $989.40) for a total pre-93 benefit of $1, Note that only $19.08 of the increase for 2008 will be included in your monthly benefit, 15

60 since $10.60 of the decrease for 2007 was not actually reflected in your monthly benefit. For any benefits earned before 1993, you can choose to receive the COLA, payable on that portion of your benefit. Otherwise, you can waive the COLA in exchange for an increased flat dollar amount. Under either option, the benefits are actuarially equivalent, based on your life expectancy, assumed interest rates and assumed future CPI increases. Overall Maximum Benefit The highest retirement benefit that you can earn under the Vought Aircraft Industries, Inc. Retirement Plan (including your pre-95 Grumman Corporation Pension Plan benefit) is 50% of your Final Average Salary. For example, if your Final Average Salary is $60,000, your total retirement benefit cannot exceed $30,000. However, if you accrued a benefit before January 1, 1995 that exceeds 50% of your Final Average Salary at your retirement, you are entitled to at least that benefit amount. For example, if your Final Average Salary at retirement is $60,000 and your accrued retirement benefit equaled $32,000 on December 31, 1994, you are entitled to that benefit amount even though it exceeds 50% of your Final Average Salary. Note about COLA: Because the COLA can substantially increase the value of your benefit over time, the value of the COLA is included in determining if your total benefit exceeds the 50% maximum benefit limit. To determine its value, the COLA is converted to a flat pension benefit based on your life expectancy, assumed interest rates and assumed future CPI increases. Keep in mind that after you retire and begin receiving your benefit payments, you still receive COLA increases if you elect that option, even if your benefit is limited by the 50% maximum. Payment Options for Your Pre-95 Grumman Corporation Pension Plan Benefit When you retire, you can choose how your retirement benefit is paid to you. If you elect a payment option for your pre-95 benefit that is also available for your post-94 benefit, you must elect that same payment option for both components. However, if the option you elect for your pre-95 Grumman Corporation Pension Plan benefit is not available for your post-94 benefit, you can elect separate payment options. Described below are four payment options that you may choose for your pre-95 benefit. The main part of this Summary Plan Description describes the payment options that are available for your entire benefit. Of course, if you are married, you will need your spouse s written, notarized consent to elect an optional form of payment that provides less than 50% of your benefit to your spouse after your death. Contingent Annuitant with Pop-Up Option Under this option, if your contingent annuitant dies before you do, your benefit reverts back to the full monthly benefit you were entitled to under the Straight Life Annuity Option. This is called the Pop-Up Option because your benefit pops up to your Straight Life Annuity amount if your contingent annuitant dies while you are receiving your benefit. 16

61 If you die before your contingent annuitant does, he or she receives all or a portion of the monthly payment you received before your death. You may elect to have 100%, 75% or 50% of the amount you were receiving paid to your contingent annuitant after you die. Combined Contingent Annuitant and Level Income with Pop-Up Option This option combines the Contingent Annuitant with Pop-Up Option and the Level Income Option. This option provides you with an increased portion of your Plan benefit before age 62, and a reduced portion after age 62, to take into account the fact that you can receive Social Security benefits starting at age 62. In addition, the benefit pops up if your contingent annuitant dies before you do. Note that under this option, Level Income is not offered to age 65. This option also provides a reduced monthly payment during your life and provides a percentage of your benefit to your contingent annuitant after your death (100%, 75% or 50%) if you die before your contingent annuitant, calculated as if you had elected only the Contingent Annuitant with Pop-Up Option. Period Certain and Continuous Option Under this option, payments are guaranteed for five, ten or fifteen years, whichever you choose. If you die within the guaranteed period that you elect (which begins with your retirement), your beneficiary (or your estate if your beneficiary dies before you do) receives the same monthly payment you were receiving for the remainder of the guaranteed period. If you do not die during your guaranteed payment period, you continue receiving payments for the rest of your life, but no payments are made to anyone after your death. You may not be able to elect this payment option if you are age 85 or older. Check with the Vought Benefits Center for more information. Combined Period Certain and Level Income Option This option combines the Period Certain and Continuous Option and the Level Income Option. This option provides you with an increased portion of your benefit before age 62, and a reduced portion after age 62, when you will be eligible to receive Social Security benefits. The amount that you receive will be guaranteed for five, ten or fifteen years, whichever you choose. If you die before the end of the guaranteed period (which begins with your retirement), your beneficiary (or your estate if your beneficiary dies before you do) will receive the same monthly amount as if you had elected only the Period Certain and Continuous Option for the remainder of the guaranteed period. You may not be able to elect this payment option if you are age 85 or older. Check with the Vought Benefits Center for more information. The Level Income portion of this option is not available to age

62 If You Die before Benefits Begin: Survivor Payments from your Pre-95 Benefit If you earned a vested benefit under the pre-95 Grumman Corporation Pension Plan and you are married on the date of your death, your surviving spouse will receive a portion of your pre-95 benefit. The amount your spouse receives depends on whether you die while actively employed, or after you terminate employment, and how much Vesting Service you had earned. If you die after you are vested and while actively employed, your spouse receives what he or she would have received had you retired as of the date of your death and chosen the 100% Contingent Annuitant Option. Your spouse also receives a 100% Contingent Annuity if you die after leaving the Company, and Had 20 Years of Vesting Service, or Were age 60 with five Years of Vesting Service. If you die after leaving the Company but before starting your benefit, your spouse will be eligible for a 50% contingent annuity starting when you would have turned age 60 if you died: With more than five but less than 20 Years of Vesting Service, and Before age 60. If you are not married on the date of your death or your spouse dies while receiving payments, your dependent children may be eligible to receive certain benefits. Benefits are payable to your dependents if, at the time of your death, you were eligible for retirement or had at least 10 Years of Vesting Service. Dependent benefits continue until: February 1 following the dependent s 19th birthday, or February 1 following the dependent s 24th birthday, but only if the child is and continues to be a full-time student. Benefits stop before age 24 if the child ceases to be a full-time student. Note that these death benefit provisions only apply to your pre-95 benefit. The post-94 benefit pays an automatic 50% Survivor Annuity, and no payments are made to nonspouse dependents. 18

63 Vought Aircraft Industries, Inc. Retirement SPD & Appendix July 2009 V