Newport News Shipbuilding Inc.

Article I. Purpose


The purpose of the Annual Incentive Plan (the "Plan") is to advance the
interests of Newport News Shipbuilding Inc. (the "Company")
shareholders, by tying a significant portion of executive compensation
to corporate performance measures. Payments made to executives under the
Plan will satisfy the Company's need to attract, retain and motivate key
executive talent.


Article II. Definitions


When used in this document the following terms shall have the meanings
set forth below:


A. NNS and Company means Newport News Shipbuilding Inc.


B. Board means the Board of Directors of Newport News Shipbuilding Inc.


C. Cause means the commission of any of the following acts by a
Participant:


(1) an intentional act of fraud embezzlement or theft in connection
with his/her duties or in the course of his/her employment with
NNS,


(2) intentional, wrongful damage to property of NNS,


(3) intentional, wrongful disclosure of secret processes or of
confidential information of NNS, or


(4) intentional violation of NNS code of conduct or ethics.


D. Code means the Internal Revenue Code of l986, as amended from time to
time, and the regulations thereunder


E. Committee means the Board's Compensation and Benefits Committee, which
shall consist solely of at least two outside directors within the
meaning of Code section 162(m)(3)(C)(i).


F. Participant means an employee of NNS who participates in the Plan in
accordance with Article 4.


G. Plan means the Newport News Shipbuilding Inc. Annual Incentive Plan,
as set forth in this document and as may be amended from time to time.


H. Salary means the salary earned by a Participant during a plan year
from employment with NNS. For purposes of this Plan, Salary shall
include salary earned pursuant to any holiday, vacation, or sick leave
policy of NNS, salary deferred pursuant to any Internal Revenue Code
section 401(k) plan and nonqualified deferred compensation plan
maintained by NNS, and salary contributed pursuant to any Internal
Revenue Code section 125 plan maintained by NNS. Except as otherwise
provided in the preceding sentence, Salary shall not include any
amount payable pursuant to an employee benefit or incentive
compensation plan.


Article III. Committee Authority


The Compensation and Benefits Committee of the Board shall have full
discretion and authority to modify, interpret, and establish
procedures for Plan administration.


Article IV. Eligibility and Participation


A. The individuals who are eligible to participate in the Plan are those
key executives who, by the nature and scope of their positions,
regularly and directly make or influence policy decisions which
significantly impact the overall results or success of the Company.
The Company will receive recommendations for participation from
functional Staff Heads. Each such nominated executive shall become a
Participant upon being approved by the Company. Non-employee directors
of NNS will not be eligible to participate in the Plan.


B. The Company may withdraw its approval of an existing position at any
time during the Plan Year Participants whose employment is terminated
during the Plan Year for reasons other than disability, death, or
retirement under a Company retirement plan shall forfeit partic ...