Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (including Attachments A & B) (the “2004 Employment
Agreement”) which is dated as of this 3rd day of June 2004, (the “Effective
Date”) by and between General Dynamics Corporation (the “Corporation”) and
Nicholas D. Chabraja, (a “Party” or collectively the “Parties”).

Recitals

WHEREAS, Mr. Chabraja is currently the Corporation’s Chief Executive Officer and
the Chairman of its Board of Directors (the “Board”) and has been since June 1,
1997; and

WHEREAS, the Corporation entered into an Employment Agreement with Mr. Chabraja
on August 7, 2002, providing for his employment through December 31, 2005; and

WHEREAS, the Board, on behalf of the Corporation’s shareholders, in recognition
of Mr. Chabraja’s continued exceptional performance and superb leadership,
strongly desires to extend Mr. Chabraja’s tenure as its Chairman and Chief
Executive Officer through April 30, 2008; and

WHEREAS, Mr. Chabraja agrees to continue his employment in only this capacity.

Terms & Conditions

NOW THEREFORE, the Parties agree as follows:

1.   Position and Term. The Corporation desires that Mr. Chabraja continue his
employment as Chairman and Chief Executive Officer, and Mr. Chabraja agrees to
continue his employment, from the Effective Date through April 30, 2008.   2.  
Annual Salary. Mr. Chabraja will continue to receive an annual salary of not
less than his current annual salary. During this Agreement, the Compensation
Committee of the Board may from time to time increase Mr. Chabraja’s annual
salary as it, in its sole discretion, deems appropriate.   3.   Incentive
Compensation. Mr. Chabraja will continue to be eligible for annual bonuses and
incentive compensation awards. In making this determination, the Compensation
Committee of the Board will annually review the Corporation’s actual performance
as compared to its strategic and operational plans. The Compensation Committee
of the Board will also consider Mr. Chabraja’s total compensation in
relationship to the performance pay levels of other chief executive officers of
industrial concerns and in the aerospace and defense industry.   4.   Other
Benefits and Perquisites. Mr. Chabraja will be eligible for all other benefits
and perquisites the Corporation provides to its senior executive officers. These
benefits include participation in the Corporation’s qualified and non-qualified
retirement plans, the Corporation’s qualified and non-qualified 401(k) Savings
and Stock Incentive plans, and group health, life and disability coverage.
Additionally, Mr. Chabraja will continue to have use of the Corporation’s
aircraft, consistent in all cases with the Corporation’s Board resolutions and
the Corporation’s policies regarding the use of aircraft.

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5.   Termination of Employment between the Effective Date and April 30, 2008.

a.   If Mr. Chabraja’s employment ends prior to April 30, 2008, by reason of his
Voluntary Resignation or death, the Corporation agrees to provide him the
following amounts and benefits:

i.   The Corporation will pay Mr. Chabraja or his designated beneficiary, as the
case may be, his annual salary earned through his last day of Active Employment
(including unused vacation and personal days); and   ii.   The Corporation will
pay Mr. Chabraja or his designated beneficiary, as the case may be, a pro rated
payment equal to his immediately prior year’s annual bonus or 100% of the
current year’s target bonus, whichever is greater. The pro-ration of such amount
will be from the first day of the year in which he voluntarily resigns or dies
through his last day of Active Employment (i.e., not including any period
attributable to the payment of unused vacation and/or personal days). Any such
payments to Mr. Chabraja, or his designated beneficiary, as the case may be,
will be made at the same time and manner as the Corporation makes similar
payments to its other senior executive officers.   iii.   The Corporation will
provide Mr. Chabraja (or his survivors, as appropriate) with the benefits
enumerated in Section 6 (c) through (h) listed below.

b.   Termination due to Disability, by the Corporation Without Cause or as a
Result of or Breach by the Corporation of Its Obligations. In the event
Mr. Chabraja’s employment is terminated: (i) due to his Disability; (ii) by the
Corporation, without cause, or (iii) by Mr. Chabraja due to the Corporation’s
breach of its obligations hereunder and its failure to cure such breach within
thirty (30) days of written notice thereof, the Corporation agrees to provide
Mr. Chabraja the following:

i.   The Corporation will continue to pay Mr. Chabraja an amount equal to the
annual salary he is earning at the time of his termination for the remaining
term of this Agreement; and   ii.   The Corporation will continue to pay
Mr. Chabraja an amount equal to the annual bonus and incentive compensation he
would have earned had he continued his employment for the remaining term of this
Agreement. Such amounts must be the greater of his prior year’s annual bonus or
100% of the current year’s target bonus. Payments to Mr. Chabraja will be made
at the same time and manner as the Corporation makes similar payments to its
other senior executive officers; and   iii.   The Corporation will provide
Mr. Chabraja with the benefits enumerated in Section 6 (c) through (h) listed
below.

c.   Termination due to a Change in Control. In the event that Mr. Chabraja’s
employment is terminated (either in fact or constructively) as a result of a
“Change in Control”, the Corporation agrees that Mr. Chabraja will be treated

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    for purposes of this Agreement as having terminated employment “Without
Cause” under Section 5 (b) above. Where the Severance Protection Agreement
between the Corporation and Mr. Chabraja dated April 12, 1999, as may be
hereafter amended from time to time, and this Agreement provide for payment
covering the same benefit, the Corporation will provide Mr. Chabraja with the
benefit most favorable to him, otherwise, Mr. Chabraja is entitled to retain the
benefits under both agreements.

d.   Termination “For Cause”. In the event Mr. Chabraja’s employment by the
Corporation is terminated “For Cause”, in full satisfaction of its obligations
hereunder, the Corporation will:

i.   pay Mr. Chabraja his annual salary earned through his last day of Active
Employment (including unused vacation and personal days);   ii.   provide to
Mr. Chabraja the retirement benefits enumerated in Attachment A, the 2002
Retirement Benefits Agreement; and   iii.   provide to Mr. Chabraja such other
benefits as are required by law.

6.   Expiration on or after April 30, 2008. If Mr. Chabraja maintains his Active
Employment through April 30, 2008, the Corporation, at its sole expense, will:

a.   pay Mr. Chabraja any remaining earned but unpaid annual salary (including
any earned but unpaid vacation and/or personal days); and   b.   pay
Mr. Chabraja a prorated bonus for the 2008 calendar year in an amount not less
than two thirds (2/3) of Mr. Chabraja’s 2007 bonus, which shall be paid to
Mr. Chabraja’s on or before his last day of Active Employment (including any
earned but unpaid vacation and/or personal days). In addition, any equity award
Mr. Chabraja receives for the 2007 calendar year shall not be prorated as may
otherwise be required under the Corporation’s Executive Compensation program, as
amended; and   c.   direct a buy-out of Mr. Chabraja’s residence located in
McLean, Virginia, in an amount which is equal to the greater of:

i.   the residence’s appraised value on or about April 1, 2008, or   ii.   the
residence’s original cost, plus all subsequent improvements Mr. Chabraja made,
as defined in the Corporation’s Relocation Policy; and

d.   reimburse Mr. Chabraja for the cost of transporting and storing (up to six
(6) months) his household furnishings and personal effects from McLean, Virginia
to anywhere in the 48 contiguous United States of America; and   e.   secure at
its sole expense executive office space in the Chicago, Illinois area with
administrative support for a period of not less than two (2) years; and   f.  
provide Mr. Chabraja and his then eligible dependents with continued
participation in the Corporation’s medical plans at then active employee cost
for up to six (6) months, following which, Mr. Chabraja will be eligible to
elect continued coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”), as amended, by paying the full cost; and

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g.   provide to Mr. Chabraja the retirement benefits enumerated in Attachment A,
the 2004 Retirement Benefits Agreement; and   h.   provide Mr. Chabraja with
usage of a corporate provided aircraft as stated in Attachment B, the Aircraft
Usage Agreement.

7.   Definitions. For purposes of this Agreement, the terms below will have the
following definitions:

a.   “Active Employment” means a period of employment during which services are
required to be performed. The continued payment of amounts in lieu of annual
salary, annual bonuses, unused vacation, unused personal days will not be
considered a period of Active Employment.   b.   “Change in Control” means a
change in control as defined in Section 1 of the Severance Protection Agreement,
as amended, dated April 12, 1999, between the Corporation and Mr. Chabraja as
such agreement may be amended from time to time.   c.   “For Cause” means the
termination of Mr. Chabraja’s employment as a direct result of any of the
following acts: (i) the commission of a felony or a crime involving dishonesty
or fraud which materially and adversely affects the Corporation or any of its
affiliates, (ii) a material violation of the Corporation’s standards of business
ethics and conduct, or (iii) individually filing or participating in a lawsuit
against the Corporation during Active Employment with the Corporation.   d.  
“Disability” means if, as a direct result of an illness or injury, Mr. Chabraja
is unable, in the sole opinion of the Compensation Committee of the
Corporation’s Board of Directors, to adequately perform the tasks of his
position for the entire balance of his Employment Agreement.   e.   “Voluntary
Resignation” or “Voluntarily Resigns” means a termination of Mr. Chabraja’s
employment resulting from his decision to cease performing services for the
Corporation.

8.   Tax Liability. Following Mr. Chabraja’s termination of employment (for any
reason other than a termination of employment “For Cause”), the Corporation will
provide Mr. Chabraja with one (1) round of federal and state tax gross ups
(determined using the top marginal rate and tax rates for federal and applicable
state taxes) for amounts imputed to Mr. Chabraja pursuant to this Agreement (but
specifically excluding annual salary, bonuses, equity awards and amounts paid
pursuant to Attachment A). Any tax gross up will be included in Mr. Chabraja’s
taxable income and included in the Corporation’s tax reporting consistent with
its policies and procedures for other executives.   9.   Miscellaneous. This
Agreement will be construed and enforced in accordance with the laws of the
State of Delaware. Notwithstanding anything in this Agreement or the
Corporation’s policies to the contrary, unless both Parties agree in writing,
all issues, disputes, controversies and/or enforcement actions by and between
the Parties hereto (whether such issue is ‘at law’ or ‘in equity’) shall be
resolved solely by an action brought in a court of competent jurisdiction in the
State of Delaware

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    and, for that purpose, the Parties hereby submit to the jurisdiction of the
State of Delaware.   10.   Notice. Any notice required under this Agreement (or
an Attachment hereto) will be made in writing addressed to the Corporation in
care of the Senior Vice President, Human Resources (with a copy to the Senior
Vice President and General Counsel) at the Corporation’s headquarters and to
Mr. Chabraja at his home address as noted in the Corporation’s employee records.
  11.   Termination. Mr. Chabraja shall have the right to terminate this
Agreement upon thirty (30) days prior written notice to the Corporation. Subject
to its obligations hereunder, the Corporation shall have the right to terminate
this Agreement upon thirty (30) days prior written notice to Mr. Chabraja;
provided, however, unless Mr. Chabraja waives the effect of such termination in
writing, the Corporation’s termination of this Agreement (either actual or
constructive) shall constitute an immediate termination of the employment
relationship and the Corporation’s obligations hereunder shall become
immediately due and owing without a right to cure. The Corporation’s obligations
hereunder shall survive the expiration, or earlier termination, of this
Agreement   12.   Effect of Prior Agreements. With Mr. Chabraja’s Active
Employment on and after the Effective Date stated above, this Agreement
(including its Attachments) will become effective and his prior employment
agreement (including all attachments thereto) is superseded; provided, however,
this Agreement does not supersede the Severance Protection Agreement between
Mr. Chabraja and the Corporation.   13.   Severability. Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability
will not affect the validity, legality or enforceability of any other provision
of this Agreement or the validity, legality or enforceability of such provision
in any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.   14.   Amendment and Waiver. The
provisions of this Agreement may be amended or waived only by the written
agreement of the Corporation and Mr. Chabraja, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement will affect the
validity, binding effect or enforceability of this Agreement.   15.  
Counterparts. This Agreement may be executed in counterparts; each of which will
be deemed to be an original and both of which together will constitute one and
the same instrument.   16.   Right to Assign. This Agreement is not assignable
without the written consent of each Party.   17.   Successorship. This Agreement
will inure to the benefit of Mr. Chabraja’s estate.

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IN WITNESS WHEREOF, pursuant to the authority granted by the Corporation’s Board
of Directors to the Corporation’s Senior Vice President — Human Resources &
Administration, the Corporation has caused this Employment Agreement to be
executed on behalf of itself and caused the Corporation’s seal to be hereunto
affixed and attested to by the Secretary of the Corporation. In like manner, the
Executive has executed this Agreement on his behalf. This Agreement is effective
as of the first date stated above.

         
ATTEST:
      GENERAL DYNAMICS CORPORATION
 
       
/s/ DAVID A. SAVNER
  By:   /s/ WALTER M. OLIVER

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      Senior Vice President — Human Resources & Administration
 
       
ATTEST:
      NICHOLAS D. CHABRAJA
 
       
/s/ DAVID A. SAVNER

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      /s/ NICHOLAS D. CHABRAJA

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Attachment A — 2004 Retirement Agreement

WHEREAS, General Dynamics Corporation, a Delaware corporation (the
“Corporation”), and Nicholas D. Chabraja (the “Executive”) (collectively the
“Parties”) entered into an extension of Mr. Chabraja’s Employment Agreement (the
“2004 Employment Agreement”); and

WHEREAS, the Corporation, as part of the 2004 Employment Agreement, has agreed
to pay certain additional supplemental retirement benefits as provided herein.

NOW, THEREFORE, in consideration for Mr. Chabraja’s entering into the 2004
Employment Agreement, the Parties agree to the following terms and conditions
(hereinafter the “2004 Retirement Agreement”) which is incorporated by reference
into Mr. Chabraja’s Employment Agreement as follows:

1.   Agreement Benefit. The Corporation agrees to pay Mr. Chabraja a monthly
single-life benefit at retirement equal to a percentage of his “Average Monthly
Salary”, as defined below. This percentage is thirty percent (30.0%) as of
April 30, 2004, and increases by one-half percentage point (0.50%) for each
completed calendar month of Active Employment thereafter (such that by April 30,
2008, the percentage will be fifty-four percent (54.0%)). For purposes of this
Attachment A, “Average Monthly Salary” shall equal the average determined by
(i) summing the total of Mr. Chabraja’s highest aggregate monthly salary and
cash executive compensation bonuses (excluding equity awards) paid during a
consecutive sixty (60) month period within Mr. Chabraja’s last one hundred and
twenty months (120) of Active Employment and (ii) dividing it by sixty (60).  
2.   Payment of Benefits.

  a.   If, after the Effective Date of this Agreement, Mr. Chabraja
(a) Voluntarily Resigns, (b) retires, or (c) is terminated “For Cause,” he will
be entitled to receive the benefit he earned under Section 1 through the end of
the month in which such separation or retirement occurs. Mr. Chabraja will begin
receiving his benefit under this subparagraph as of the first day of the month
following his separation or retirement.     b.   If Mr. Chabraja’s employment
with the Corporation terminates at any time on or after the Effective Date of
his 2004 Employment Agreement, but prior to April 30, 2008, due to (a) his
“Disability,” (b) termination “Without Cause,” or (c) a “Change in Control”, Mr.
Chabraja will be entitled to receive the benefit under Section 1 above as if
Mr. Chabraja had maintained his Active Employment and pensionable earnings
through April 30, 2008. Mr. Chabraja will begin receiving his benefit under this
subparagraph as of May 1, 2008.

3.   Survivor Benefit in the Case of Death Prior to Benefit Commencement. If
Mr. Chabraja dies during the term of this 2004 Retirement Agreement, but prior
to separating from employment and does not leave a surviving spouse, no benefit
will be paid under this Agreement. If Mr. Chabraja dies during the term of this
2004 Retirement Agreement, but prior to separating from employment and leaves a
surviving spouse, his surviving spouse will receive a 50% Contingent Annuitant
benefit with a 10-Year Certain feature based on the retirement benefit
Mr. Chabraja will have earned as of his date of death. In the event that
Mrs. Chabraja dies prior to the 10th anniversary of Mr. Chabraja’s death,
payments will continue to Mrs. Chabraja’s designated beneficiary or estate.
Payment will commence on the first day of the month following Mr. Chabraja’s
death.

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4.   Form of Payment. All retirement benefits payable pursuant to this 2004
Retirement Agreement will be paid in such form and at such time as
Mr. Chabraja’s elects under the Retirement Program. The Corporation may, in its
sole discretion, accelerate the payment of some or all of the benefits under
this 2004 Retirement Agreement in a form of actuarial equivalent value. In
addition to all of forms of payment under the Retirement Program, Mr. Chabraja
may elect a 100% Contingent Annuitant option with a 10-Year Certain feature.  
5.   No Assignment. No benefit under this 2004 Retirement Agreement will be
subjected in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same will be void, and no such
benefit will in any manner be liable for or subject to the debts, liabilities,
engagements or torts of the person entitled to such benefit, except as
specifically provided in the Retirement Program or pursuant to a Qualified
Domestic Relations Order as described in Code Section 414(p).   6.   Payment
from General Assets.

  a.   To the extent a benefit under this 2004 Retirement Agreement is not
otherwise payable from a Retirement Program (or unless otherwise determined by
the Corporation), all benefits payable to Mr. Chabraja hereunder will be paid by
the Corporation from its general assets. The Corporation will not be obliged to
acquire, designate or set aside any specific assets for payment of the
Supplement. Further, Mr. Chabraja will have no claim whatsoever to any specific
assets or group assets of the Corporation.     b.   The Corporation may, in its
discretion, designate that the some or all the benefits payable hereunder will
be satisfied from the assets of a trust, fund, or other segregated group of
assets. But, should these assets prove to be insufficient to satisfy payment of
such benefits or other post-retirement benefits, the Corporation will remain
liable for payment thereof.

7.   Prior Agreement. The 2002 Retirement Agreement is superceded.   8.   Plan
Administration. The Board of Directors hereby delegates to the Senior Vice
President, Human Resources and Administration (or his authorized designee) the
power to interpret this Agreement in his sole discretion and such
interpretations will be binding on the Corporation and Mr. Chabraja. The
Retirement Programs actuary will determine all values and payments required
under this 2004 Retirement Agreement based on the actuarial assumptions used
under the Corporation’s Retirement Program.   9.   Income Taxes. Mr. Chabraja
and the Corporation agree that all payments made pursuant to this 2004
Retirement Agreement will be treated as “wages” for federal and state income tax
and employment tax purposes (including FICA) at such time and in such manner as
prescribed by law. Each Party to this 2004 Retirement Agreement is responsible
for the payment of its own taxes.   10.   Incorporation by Reference. This 2004
Retirement Agreement is be incorporated by reference into Mr. Chabraja’s
Employment Agreement with the Corporation. The defined terms in this 2004
Retirement Agreement will have the same meaning provided in Mr. Chabraja’s 2004
Employment Agreement.

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Attachment B — Aircraft Usage Agreement

1.   Flight Hours Earned. As of the Effective Date of this Agreement,
Mr. Chabraja has earned and shall retain the right to two-hundred and fifty
(250) Flight Hours (the “Prior Agreement Flight Hours”) on an aircraft provided
by the Corporation. In addition, on and after the Effective Date of this
Agreement, Mr. Chabraja will earn an additional fourteen (14.0) Flight Hours for
each full month of service under his Active Employment with the Corporation;
provided however, the sum total of his Prior Agreement Flight Hours and the
Flight Hours earned under this Agreement shall not exceed Five Hundred (500).

  a.   Termination “For Cause”. Notwithstanding anything in this Attachment B or
Mr. Chabraja’s Employment Agreement to the contrary, if Mr. Chabraja’s
employment with the Corporation is terminated “For Cause” (as defined in his
Employment Agreement) all Flight Hours will be forfeited.     b.   Termination
“Without Cause”, Change in Control or “Disability”. Notwithstanding anything in
this Attachment B or Mr. Chabraja’s Employment Agreement to the contrary, if Mr.
Chabraja’s employment with the Corporation is terminated “Without Cause”, due to
a “Change in Control”, or as a result of a “Disability”, Mr. Chabraja will be
entitled to Five Hundred (500) Flight Hours regardless of his length of
employment.

2.   Acceptable Aircraft. The Corporation will make available to Mr. Chabraja a
large cabin aircraft or larger (e.g., a Gulfstream 350) along with fuel, trained
personnel and basic snack and beverage service. Mr. Chabraja will be responsible
for all food and beverage costs in excess of basic snack and beverage service.  
3.   Right to Use Aircraft. Mr. Chabraja’s right to use the Corporation’s
aircraft is personal in nature and will not inure to the benefit of his
surviving spouse or estate following his death. All of Mr. Chabraja’s rights
under this Attachment B expire upon the earlier to occur of:

  a.   his death;     b.   one hundred and twenty (120) months after his last
day of Active Employment; or     c.   the exhaustion of all his Flight Hours,
including any carryover.

4.   Usage of Flight Hours.

  a.   annual Limit. Following Mr. Chabraja’s termination of employment (other
than “For Cause”) entitled to any amount of Flight Hours, Mr. Chabraja may use
up to one hundred (100) Flight Hours in any calendar year. If Mr. Chabraja
separates employment in the middle of a calendar year, the one hundred
(100) Credited Flight Hour maximum will be prorated by the number of completed
calendar months remaining in that year.     b.   Carryover of Unused Flight
Hours. Subject to paragraph 3 immediately above, if, for any reason Mr. Chabraja
does not use his entire allotment of Flight Hours within any calendar year, the
unused number of Flight Hours will be carried over to the subsequent calendar
year (subject to an overall maximum usage of one hundred (100) Flight Hours in
any calendar year).

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5.   Protocol for Aircraft Usage.

  a.   In order to obtain the use of a Corporation aircraft, Mr. Chabraja must
request the use of such aircraft at least 24 hours prior to the requested flight
departure for flights that will depart and arrive within the 48 contiguous
United States of America and at least 48 hours prior to the requested flight
departure for all other flights. Such request must be made to an agreed upon
contact at the Corporation and must specify the requested departure and arrival
locations and the amount of people in the flight party.

  i.   The Corporation will supply Mr. Chabraja with an aircraft based upon
Corporation aircraft availability. The size of Mr. Chabraja’s flight party will
be limited by aircraft size and availability.     ii.   If a corporate aircraft
is available, it will pick up Mr. Chabraja and his flight party at the nearest
suitable location for that aircraft. The flights will include the particular
aircraft’s basic flight service.

6. Usage of Flight Hours.

  a.   Mr. Chabraja will be charged against his bank of Flight Hours for each
hour or fraction of an hour Mr. Chabraja’s requested aircraft is airborne.

  i.   Aircraft flight time to arrive at a requested pick-up location within the
48 contiguous United States of America will not count against Mr. Chabraja’s
Flight Hours. Aircraft flight time (including any “dead heading” time) to all
other pick up locations will count towards the total number of Flight Hours
Mr. Chabraja’s has earned under this Agreement.

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