Exhibit 10.5

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE GENERAL DYNAMICS CORPORATION

2012 EQUITY COMPENSATION PLAN

This Performance Restricted Stock Unit Award Agreement (the “Agreement”) is
entered into as of [DATE], (the “Grant Date”), by and between General Dynamics
Corporation (the “Company”) and [NAME] (the “Grantee”).

WHEREAS, the Company sponsors the General Dynamics Corporation 2012 Equity
Compensation Plan (the “Plan”) and pursuant to Section 7 of the Plan the Company
may grant performance-based restricted stock units (“Performance RSUs”); and

WHEREAS, the Company desires to grant to the Grantee an award of Performance
RSUs.

NOW, THEREFORE, in consideration of the recitals and the mutual agreements
herein contained, the parties hereto agree as follows:

1. Number of Performance RSUs. The Grantee is hereby granted [NUMBER]
Performance RSUs (the “Target Performance RSUs”). Each Performance RSU
represents an unfunded, unsecured promise by the Company to deliver one share of
the Company’s common stock (“Common Stock”), subject to certain restrictions,
terms and conditions. The number of shares of Common Stock actually required to
be delivered to the Grantee (the “Earned Performance RSUs”) may vary from the
number represented by the Target Performance RSUs, based on performance as
described in Section 2(b) hereof.

2. Terms of Performance RSUs. The Performance RSUs will be subject to the
following terms, conditions and restrictions:

(a) No Shareholder Rights. The grant of Performance RSUs does not entitle the
Grantee to any rights of a shareholder of Common Stock, including dividends or
voting rights.

(b) Performance Feature. The number of Earned Performance RSUs will range from
0% to 200% of the number of Target Performance RSUs, as determined by the extent
to which the Performance Goals set forth on Schedule A to this Agreement are
achieved in accordance with the formula described on Schedule A; provided that
the Committee may, in its sole and absolute discretion, reduce the number of
Earned Performance RSUs, based on such factors as the Committee may deem
relevant.

(c) Performance Period and Vesting. Attainment of the Performance Goals shall be
measured over [INSERT CALENDAR YEAR IN WHICH THE GRANT DATE OCCURS] (the
“Performance Period”), and the number of Earned Performance RSUs shall be fixed
as of the end of the Performance Period. Except as may otherwise be provided in
Section 3 below, the Earned Performance RSUs and the Total Dividend Equivalent
RSUs (as defined below) will vest on the first day of January on which the New
York Stock Exchange is open for business of the fourth calendar year following
the calendar year in which the Grant Date occurs (the “Scheduled Vesting Date”)
but only if the Grantee’s Termination Date (as defined below) has not occurred,
and does not occur, prior to or on the Scheduled Vesting Date.

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(d) Settlement of Awards. Settlement of vested Earned Performance RSUs and Total
Dividend Equivalent RSUs shall occur on, or no later than ninety (90) days
following, the Scheduled Vesting Date; provided, however, that if the Grantee’s
employment with the Company and its affiliates is terminated within two
(2) years following a Change in Control (i) by the Company or any of its
affiliates for any reason other than for Cause or (ii) by the Grantee for Good
Reason, then settlement of vested Earned Performance RSUs and Total Dividend
Equivalent RSUs shall occur within two and one half (2.5) months after the
January 1 following the Termination Date (as defined below). (The actual date of
settlement is hereinafter referred to as the “Settlement Date”). The Company, in
its sole discretion, may settle the vested Performance RSUs and Dividend
Equivalent RSUs by either (i) issuing to the Grantee or the Grantee’s personal
representative a stock certificate representing one share of Common Stock for
each Earned Performance RSU that has vested and one share of Common Stock for
each Dividend Equivalent RSU that has vested or (ii) depositing in such
Grantee’s or the Grantee’s personal representative’s brokerage account via
electronic transfer one share of Common Stock for each Earned Performance RSU
that has vested and one share of Common Stock for each Dividend Equivalent RSU
that has vested.

(e) Dividend Equivalents. Dividend equivalents will accrue on the Performance
RSUs and will be notionally credited in the form of additional Performance RSUs
(“Dividend Equivalent RSUs”) to the Grantee’s bookkeeping account. During the
Performance Period, dividend equivalents will accrue on the Target Performance
RSUs and on the Dividend Equivalent RSUs outstanding on each dividend equivalent
determination date. At the end of the Performance Period the number of
outstanding Dividend Equivalent RSUs will be adjusted to reflect the attainment
of the Performance Goals in the same manner as the Target Performance RSUs (such
adjusted number, the “Earned Dividend Equivalent RSUs”). During the period
beginning on the day after the Performance Period ends and ending on the
Scheduled Vesting Date (the “Service Vesting Period”), Dividened Equivalent RSUs
will accrue on the Earned Performance RSUs and on the Earned Dividend Equivalent
RSUs (the Earned Dividend Equivalent RSUs together with any additional Dividend
Equivalent RSUs credited thereon and credited on the Earned Performance RSUs
during the Service Vesting Period being referred to herein as the “Total
Dividend Equivalent RSUs”). The Company will round down to the nearest whole
share in settling any Dividend Equivalent RSUs and no fractional shares will be
issued. Dividend Equivalent RSUs will in all cases be subject to the same terms
and conditions, including but not limited to those related to vesting,
transferability, and payment, that apply to the Performance RSUs.

(f) Transfer Restrictions. Neither the Performance RSUs, the Dividend Equivalent
RSUs, nor any interest therein may be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of by the Grantee, except by will or the laws
of descent and distribution, and any such purported sale, assignment, transfer,
pledge, hypothecation or other disposition shall be void and unenforceable
against the Company.

 

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(g) Incorporation of Plan by Reference, Etc. The provisions of the Plan are
hereby incorporated herein by reference. Except as otherwise expressly set forth
herein, this Agreement will be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement will
have the definitions set forth in the Plan. The Committee will have final
authority to interpret and construe the Plan and this Agreement and to make any
and all determinations under them, and its decisions will be binding and
conclusive upon the Grantee and the Grantee’s legal representative in respect of
any questions arising under the Plan or this Agreement. If there exists any
inconsistency between the terms of this Agreement and the Plan, the terms
contained in the Plan will govern. If there exists any inconsistency between the
terms of the Performance RSUs and Dividend Equivalent RSUs as provided for
herein (including terms relating to the number of Performance RSUs or Dividend
Equivalent RSUs) and the terms as indicated in the records maintained by
Company, the terms as indicated in the records of the Company will govern.

3. Termination of Employment or Service as a Director.

(a) General. In the event that (i) the Grantee ceases to be employed by the
Company or ceases to be a director of the Company for any reason (the date of
such cessation, the “Termination Date”) other than due to death, total and
permanent disability, or, in the case of Grantees who are employed by the
Company, Retirement (as defined below), divestiture or discontinued operation of
a Subsidiary or division with which the Grantee was associated, or lay-off, on
or prior to the Scheduled Vesting Date or (ii) the Grantee ceases to be employed
by the Company on account of lay-off prior to the last day of the Performance
Period, the Performance RSUs and any Dividend Equivalent RSUs credited as of the
Termination Date will be automatically forfeited by the Grantee as of the
Termination Date. For purposes of this Agreement, the Termination Date will in
all cases without exception (notwithstanding, for example, any failure under
local labor laws) be deemed to occur as of the date that the Grantee is no
longer actively employed and will not be extended by any notice period mandated
under local law (e.g., active employment would not include a period of “garden
leave” or similar period pursuant to local law). For purposes of this Agreement,
“Retirement” means, (A) with respect to an employee who is not an elected
officer of the Company on the Termination Date, the termination of employment
after the attainment of age 55 with at least five (5) or more years of
continuous service and (B) with respect to an employee who is an elected officer
of the Company on the Termination Date, termination of employment after
attaining age 55 with the consent of the Chief Executive Officer of the Company
(or for the the Chief Executive Officer, with the consent of the Committee).

(b) Certain Terminations. This Section 3(b) provides for special vesting rules
in certain circumstances. For the avoidance of doubt, with respect to each such
circumstance, without regard to when the vesting event (i.e the Termination Date
or the Grantee’s death) occurs in relation to the Performance Period, the number
of Performance RSUs and Dividend Equivalents that vest under this Section 3(b)
will be based on the number of Earned Performance RSUs and the number of Earned
Dividend Equivalents, each of which is determined based on the provisions of
Sections 2(b) and 2(e). In addition, regardless of when the vesting event
occurs, all Performance RSUs and Dividend Equivalents that vest under this
Section 3(b) will be settled in accordance with Section 2(d) on, or no later
than ninety (90) days following, the Scheduled Vesting Date; provided, however,
that if the Grantee’s employment with the Company and its affiliates is
terminated within two (2) years following a Change in Control (i) by the Company
or any of its affiliates for any reason other than for Cause or (ii) by the
Grantee for Good Reason, then the Performance RSUs and Dividend Equivalents that
vest under this Section 3(b) will be settled within two and one half
(2.5) months after the January 1 following the Termination Date.

 

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(i) Prior to the Last Day of the Performance Period. In the event that the
Grantee ceases to be employed by the Company due to total and permanent
disability, Retirement, divestiture or discontinued operation of a Subsidiary or
division with which the Grantee was associated or ceases to be a director of the
Company due to total and permanent disability, in each case prior to the last
day of the Performance Period, then the award of Performance RSUs will vest on
the Termination Date with respect to a number of Performance RSUs equal to the
product of (A) the sum of (x) the total number of Earned Performance RSUs and
(y) the total number of Earned Dividend Equivalent RSUs and (B) a fraction, the
numerator of which will be the number of days from January 1 of the year in
which the Grant Date occurs to the last day of the month in which the
Termination Date occurs and the denominator of which will be 365, such product
to be rounded down to the nearest whole share, and the remaining Earned
Performance RSUs and Earned Dividend Equivalent RSUs will be automatically
forfeited by the Grantee as of the Termination Date.

(ii) On or After the Last Day of the Performance Period. In the event that the
Grantee ceases to be employed by the Company due to total and permanent
disability, Retirement, divestiture or discontinued operation of a Subsidiary or
division with which the Grantee was associated, or lay-off, or ceases to be a
director of the Company due to total and permanent disability, in each case on
or after the last day of the Performance Period and on or prior to the Scheduled
Vesting Date, then the Earned Performance RSUs and the Total Dividend Equivalent
RSUs that have been credited as of the Termination Date will become immediately
vested.

(iii) Death. In the event of the Grantee’s death on or prior to the Scheduled
Vesting Date, the Earned Performance RSUs and the Total Dividend Equivalent RSUs
that have been credited as of the date of the Grantee’s death will become
immediately vested.

(iv) Change in Control. Notwithstanding the foregoing, in the event that within
two (2) years following a Change in Control, the Grantee’s employment with the
Company and its affiliates is terminated (i) by the Company or any of its
affiliates for any reason other than for Cause or (ii) by the Grantee for Good
Reason, then the Earned Performance RSUs and the Total Dividend Equivalent RSUs
that have been credited as of the Termination Date will become immediately
vested.

(c) Harm. Notwithstanding anything to the contrary herein, all of the
Performance RSUs and Dividend Equivalent RSUs will be automatically forfeited by
the Grantee if the Grantee causes Harm (as defined below) to the Company prior
to the Settlement Date. For purposes of this Agreement, “Harm” includes, any
actions that adversely affect the Company’s financial standing, reputation, or
products, or any actions involving personal dishonesty, a felony conviction
related to the Company, or any material violation of any confidentiality or
non-competition agreement with the Company.

 

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4. Tax Withholding. Regardless of any action the Company or the Grantee’s actual
employer (the “Employer”) takes with respect to any or all income tax (including
federal, state and local taxes), social insurance, payroll tax, payment on
account or other tax-related withholding (“Tax-Related Items”), the Grantee
acknowledges that the ultimate liability for all Tax-Related Items legally due
by the Grantee is and remains the Grantee’s responsibility and that the Company
and/or the Employer (i) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the
Performance RSUs and the Dividend Equivalent RSUs, including the grant of the
Performance RSUs and crediting of the Dividend Equivalent RSUs, the vesting of
the Performance RSUs and Dividend Equivalent RSUs, the settlement of the
Performance RSUs and Dividend Equivalent RSUs, and the subsequent sale of any
shares acquired at settlement; and (ii) do not commit to structure the terms of
the grant or any aspect of the Performance RSUs and Dividend Equivalent RSUs to
reduce or eliminate the Grantee’s liability for Tax-Related Items.

Prior to the issuance of shares pursuant to this award of Performance RSUs, the
Grantee shall pay, or make adequate arrangements satisfactory to the Company or
to the Employer (in their sole discretion) to satisfy all withholding and
payment on account obligations of the Company and/or Employer. In this regard,
the Grantee authorizes the Company or the Employer to withhold all applicable
Tax-Related Items legally payable by the Grantee from the Grantee’s wages or
other cash compensation payable to the Grantee by the Company or the Employer.
Alternatively, or in addition, if permissible under local law, the Company or
the Employer may, in their sole discretion, (i) sell or arrange for the sale of
shares of Common Stock to be issued on the settlement of the Performance RSUs
and/or the Dividend Equivalent RSUs to satisfy the withholding or payment on
account obligation, and/or (ii) withhold from the shares to be delivered upon
settlement of the Performance RSUs and/or the Dividend Equivalent RSUs the
amount of shares necessary to satisfy the minimum withholding amount (or such
other rate that will not result in a negative accounting impact). The Grantee
shall pay to the Company or to the Employer any amount of Tax-Related Items that
the Company or the Employer may be required to withhold as a result of the
Grantee’s receipt of this award, the vesting of the Performance RSUs and the
Dividend Equivalent RSUs, or the settlement of the Performance RSUs and the
Dividend Equivalent RSUs that cannot be satisfied by the means previously
described. The Company may refuse to deliver shares pursuant to the Performance
RSUs and the Dividened Equivalent RSUs to the Grantee if the Grantee fails to
comply with the Grantee’s obligation in connection with the Tax-Related Items as
described herein. If the Grantee fails to pay or make satisfactory arrangements
to satisfy all withholding and payment on account obligations by the Settlement
Date, then the Performance RSUs and the Dividend Equivalent RSUs shall be
forfeited.

5. Nature of Grant. In accepting the award of Performance RSUs, the Grantee
acknowledges that:

(a) the Plan is discretionary in nature and established voluntarily by the
Company and may be modified, amended, suspended or terminated by the Company at
any time, as provided in the Plan, and the award of Performance RSUs is at the
sole discretion of the Company and does not create any contractual or other
right to receive future awards of Performance RSUs, or benefits in lieu of
Performance RSUs even if Performance RSUs have been awarded repeatedly in the
past;

(b) the award of Performance RSUs is an extraordinary item that does not
constitute compensation of any kind for services of any kind rendered to the
Company or to the Employer, and the Performance RSUs are outside the scope of
the Grantee’s employment contract, if any;

 

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(c) the Performance RSUs and the Dividend Equivalent RSUs are not part of normal
or expected compensation or salary for any purposes, including, calculation of
any severance, resignation, termination, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments;

(d) neither the award of Performance RSUs nor any provision of this Agreement
nor the Plan confer upon the Grantee any right with respect to employment or
continuation of current employment, and in the event that the Grantee is not an
employee of the Company, the Performance RSUs shall not be interpreted to form
an employment contract or relationship with the Company; and

(e) no claim or entitlement to compensation or damages arises from termination
of the Performance RSUs or Dividend Equivalent RSUs, and no claim or entitlement
to compensation or damages shall arise from any diminution in value of the
Performance RSUs, Dividend Equivalent RSUs, or shares received upon settlement
of the Performance RSUs or Dividend Equivalent RSUs resulting from termination
of the Grantee’s employment by the Employer (for any reason whatsoever and
whether or not in breach of local labor laws) and the Grantee irrevocably
releases the Company and the Employer from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen, then, by signing this Agreement, the Grantee shall
be deemed irrevocably to have waived his or her entitlement to pursue such
claim.

6. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the
collection, holding, use and transfer, in electronic or other form, of his or
her personal data as described in this document by and among, as applicable, the
Employer, and the Parent and its Subsidiaries for the exclusive purpose of
implementing, administering and managing the Grantee’s participation in the
Plan.

The Grantee understands that the Company and the Employer may hold certain
personal information about the Grantee, including his or her name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all options or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or
outstanding in the Grantee’s favor, for the purpose of implementing,
administering and managing the Plan (“Data”). Data may be transferred to any
third parties assisting in the implementation, administration and management of
the Plan, that these recipients may be located in the Grantee’s country or
elsewhere and that the recipients’ country may have different data privacy laws
and protections than the Grantee’s country. The Grantee may request a list with
the names and addresses of any potential recipients of the Data by contacting
his or her local human resources representative. The Grantee authorizes the
recipients to receive, possess, use, retain and transfer the Data, in electronic
or other form, for the sole purpose of implementing, administering and managing
his or her participation in the Plan, including any requisite transfer of such
Data as may be required to a broker or other third party with whom the Grantee
may elect to deposit any shares acquired upon settlement of the Performance RSUs
and Dividend Equivalent RSUs.

 

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Data will be held only as long as is necessary to implement, administer and
manage the Grantee’s participation in the Plan. The Grantee may, at any time,
view Data, request additional information about the storage and processing of
Data, require any necessary amendments to Data or refuse or withdraw the
consents herein, in any case without cost, by contacting in writing his or her
local human resources representative. Refusing or withdrawing his or her consent
may affect the Grantee’s ability to participate in the Plan. For more
information on the consequences of a refusal to consent or withdrawal of
consent, the Grantee may contact his or her local human resources
representative.

7. Miscellaneous.

(a) Modification; Entire Agreement; Waiver. No change or modification to any
provision of this Agreement will be valid unless the same is agreed to in
writing by the parties hereto; provided, however, that the Committee may
unilaterally waive any condition set forth in this Agreement at any time in its
sole discretion. This Agreement and the Plan contain the entire agreement and
understanding of the parties hereto with respect to the subject matter contained
herein and therein and supercede all prior communications, representations and
negotiations in respect thereof. The failure of the Company to enforce at any
time any provision of this Agreement will in no way be construed to be a waiver
of such provision or of any other provision hereof. The Company reserves the
right, however, to the extent the Company deems necessary or advisable in its
sole discretion, to unilaterally alter or modify the awards to ensure all
Performance RSUs, Dividend Equivalent RSUs and the Agreements provided to
Grantees are made in such a manner that either qualifies for exemption from or
complies with Section 409A (“Section 409A”) of the Internal Revenue Code of
1986, as amended; provided, however that the Company makes no representations
that the Performance RSUs and Dividend Equivalent RSUs will be exempt from or
will comply with Section 409A and makes no undertaking to preclude Section 409A
from applying to the Performance RSUs and Dividend Equivalent RSUs.

(b) Bound by Plan and Other Related Documents. By accepting the award of
Performance RSUs, the Grantee acknowledges that the Grantee has received a copy
of the Plan and General Dynamics Corporate Policy regarding insider trading
compliance (the “Trading Policy”) and has had an opportunity to review the Plan
and the Trading Policy and agrees to be bound by all the terms and provisions of
the Plan and the Trading Policy.

(c) Successors. The terms of this Agreement will be binding upon and inure to
the benefit of the Company, its successors and assigns, and of the
beneficiaries, executors, administrators, heirs and successors of the Grantee.

(d) Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another jurisdiction.
For purposes of litigating any dispute that arises under this Award or this
Award Agreement, the parties hereby submit to and consent to the jurisdiction of
the State of Virginia, and agree that such litigation shall be conducted
exclusively in the courts of Virginia or the federal courts for the Eastern
District of Virginia.

 

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(e) Section 409A Compliance . To the extent applicable, it is intended that the
Plan and the Agreement comply with the requirements of Section 409A and any
related regulations or other guidance promulgated with respect to such Section
by the U.S. Department of the Treasury or the Internal Revenue Service.
Accordingly, to the maximum extent permitted, this Agreement shall be
interpreted and administered to be in compliance therewith. Notwithstanding
anything contained herein to the contrary, to the extent required in order to
avoid accelerated taxation and/or tax penalties under Section 409A, Grantee
shall not be considered to have terminated employment with the Company for
purposes of this Agreement until Grantee would be considered to have incurred a
“separation from service” from the Company within the meaning of Section 409A.
For purposes of this Agreement, each amount to be paid or benefit to be provided
shall be construed as a separate identified payment for purposes of
Section 409A. To the extent required in order to avoid accelerated taxation
and/or tax penalties under Section 409A, amounts that would otherwise be payable
and benefits that would otherwise be provided pursuant to this Agreement during
the six-month period immediately following Grantee’s separation from service
shall instead be paid on the first business day after the date that is six
months following Grantee’s separation from service (or death, if earlier).

(f) Severability. In the event any provision of this Agreement shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of this Agreement, and this Agreement shall be
construed and enforced as if such illegal or invalid provision had not been
included.

(g) Language. If the Grantee has received this Agreement or any other document
related to the Plan translated into a language other than English and if the
translated version is different that the English version, the English version
will control.

 

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