AMSEC Employees 401(k) Profit Sharing Plan - Benefits Connect

• Promissory note• NotarizationMinimum amount for loans $1,000 $1,000Maximum amount for loans $50,000 $50,000Minimum term for loans (months) 1 1Maximum term for loans (years) 25 5Interest rate: Expressed as a percentage of the loan amount, the interest rate is the charge for borrowing money. Theinterest rate on an outstanding loan remains the same over the life of the loan, unless otherwise indicated.Loan interest rate calculation method Prime rate plus 1% Prime rate plus 1%*An express loan is a loan that can be confirmed on the Vanguard website or by phone. Most express loans donot involve paperwork. Your check normally is mailed from Vanguard the next business day after the loan isapproved.I mpact on L oans – L eave of AbsenceIf you go on an approved leave of absence for medical/disability, military or FMLA before your loanis repaid, you repayments may be suspended. The suspension can be in effect for 12 months, to theend of the term of your loan, or until you return to full pay status, whichever is earliest. If you have anoutstanding Plan loan, the term of your loan does not change because of your leave of absence. Youare not required to make loan repayments during your leave for up to 12 months. You are required,however, to repay your outstanding loan balance when you return to work or by the final payment dateon your loan schedule if it is earlier than your return-to-work date.When you return to work, your payments resume through payroll withholding at a higher level, takinginto account additional interest accruing on your loan during your leave, and spreading yoursuspended amounts over the remaining term of your loan.I f Y ou H ave an Outstanding L oan and Y ou T r ansfer fr om AM SE C but withinH untington I ngalls I ndustr ies, I nc.If you leave AMSEC as the result of a transfer to the Parent Company, or as the result of a divestitureof an identified group, you may continue to make scheduled loan payments by arranging an electronicfund transfer (ACH) payment directly with Vanguard. Participants must call Vanguard ParticipantServices at 1-800-523-1188 and speak to a Participant Services Associate to set up an ACH payment.If you fail to make a loan repayment by its due date and are not eligible for a distribution under thePlan, the total outstanding amount of your loan, including any interest that accrued, is defaulted anddeemed distributed to you.On retirement or separation of employment, your loan must be repaid before you receive your finaldistribution from the Plan. If you do not repay your loan, the outstanding balance of your loan issubtracted from your total account balance in determining the amount of your actual distribution. Itwill be included, however, in your taxable distribution from the Plan. The total account balance,including any outstanding loan balance, is subject to applicable federal income tax rules andregulations, which may include a 10% early-distribution penalty.March 2011 13 AMSEC SPD