Document:

ex10-5

 

Exhibit 10.5

SUCCESSOR RETIREMENT PLAN FOR DIRECTORS

        WHEREAS, General Dynamics Corporation (the “Corporation”) maintained a
retirement plan for certain non-employee members of its Board of Directors (the
“Directors Retirement Plan”);

        WHEREAS, the Board of Directors of the Corporation (the “Board”)
terminated the Directors Retirement Plan effective December 1, 1999;

        NOW, THEREFORE, notwithstanding any provisions of the Directors Retirement
Plan to the contrary, effective December 1, 1999, the following provisions
shall govern the unpaid accrued benefits under the Directors Retirement Plan.

1.     The value of the unpaid accrued benefits under the Directors Retirement Plan
shall be deferred and paid under this Successor Retirement Plan (the “Plan”)
according to the provisions described below.

2.     As of December 1, 1999, each director listed on Schedule A attached hereto
(each an “eligible director”) shall be given an irrevocable option to convert
the entire actuarial lump sum value (as determined below) of such eligible
director’s vested benefit in the Directors Retirement Plan into either (a) a
deemed cash account or (b) a number of “phantom shares” of the Corporation’s
common stock, par value $1.00 per share (the “Common Stock”) determined by
dividing the actuarial lump sum value determined below by the average of the
high and low market price of the Common Stock on the New York Stock Exchange on
December 1, 1999. Such deemed amount of cash or phantom shares shall be
credited to a Plan account established and maintained for each eligible
director. The account shall not require segregation of any Corporation assets
and shall at all times remain subject to the claims of the Corporation’s
general creditors.

The actuarial lump sum value shall be determined as of December 1, 1999, which
value shall assume the benefit is payable for life and that the eligible
director would have retired at age 75 and began receiving annual payments
guaranteed for the longer of ten years or the number of completed years of
service as an outside director as of December 31, 1999, and based on the 1984
Unisex Pension Table with a one year setback and a discount rate of 7% per
annum compound.

3.     From December 1, 1999 until retirement, (a) amounts converted into the
deemed cash account shall be credited with interest at prime rate (as set by
The Northern Trust Company of Chicago, or its successor) on the last day of
each calendar quarter and (b) amounts converted into phantom shares shall be
adjusted upward or downward based on the value of Common Stock and shall be
credited with stock dividend equivalents when the Corporation issues dividends
on Common Stock.

4.     Any dividend equivalents credited to an eligible director’s account shall be
reinvested in phantom shares of the Common Stock based on the average of the
high and low market price of Common Stock on the New York Stock Exchange on the
payment date of the dividend with respect to which such dividend equivalents
are credited.

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5.     Benefits under the Plan are payable upon retirement as provided in this
Section. As of the eligible director’s retirement or death (if sooner), the
Corporation shall determine the value of the eligible director’s account. If
the eligible director had elected a deemed cash account, the value of such
account shall be based on the method described in Section 3. If the eligible
director had elected to take phantom shares, the eligible director’s account
shall be valued as of the eligible director’s retirement date based on the
average of the high and low market price of the Common Stock on the New York
Stock Exchange as of that date. Prior to retirement (or such other period as
the Board may, in its discretion, determine) an eligible director shall make an
election in writing to receive the value of the eligible director’s account as
determined above in either: (a) ten (10) installments with the first
installment to be paid as soon as practical following the eligible director’s
retirement date and the additional nine (9) installments to be paid annually on
or about the eligible director’s anniversary of retirement, or (b) a lump sum
payment which shall be paid within ten (10) business days of the director’s
retirement. Any such election may be changed or revoked at any time prior to
the eligible director’s retirement date shall be given effect (or such other
period of time as the Board may, in its discretion, determine). If no election
is made or if the election is determined to be invalid, payment shall be in
such form as determined by the Board in its sole discretion. Payments under
the Plan shall be in cash. If an eligible director elects to receive his
account in annual installments, during the period he receives such annual
installments his account shall be credited with interest at prime rate (as set
by The Northern Trust Company of Chicago, or its successor) which interest
shall be paid in full with the next installment payment.

6.     No eligible director shall be entitled to any voting rights with respect to
the phantom stock in the eligible director’s account. The phantom stock under
the Plan does not have any of the rights of the Common Stock other than to
receive dividend equivalents. In the event of any change in the outstanding
shares of the Common Stock by reason of a stock split, dividend, combination or
similar transaction, the phantom stock shall be automatically proportionally
adjusted in an equitable manner.

7.     All eligible director accounts are subject to the general creditors of the
Corporation and are unfunded promises to pay amounts in the future. Such
eligible director accounts may not be assigned nor alienated.

8.     In the event of the death of an eligible director, any unpaid amounts in the
eligible director’s account shall be paid to the eligible director’s designated
beneficiary. If no beneficiary is designated, such amounts shall be paid to
the eligible director’s estate. Amounts paid to a designated beneficiary or to
an estate shall be in a lump sum.

9.     The Board shall have complete power and authority to amend and terminate the
Plan. The Board shall have complete power and authority to interpret and
administer the Plan, to adopt, amend and rescind rules and regulations, and to
establish terms and conditions, not inconsistent with the provisions of the
Plan, for the administration and implementation of the Plan, provided, however,
that the Board may not make any changes that would adversely affect the rights
of an eligible director who retired prior to the date of the change without the
consent of such director. No benefits shall be payable from this Plan if the
Board determines in its sole discretion that a director is not entitled to such
benefits.

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Schedule A

Julius W. Becton, Jr.

James S. Crown

Charles H. Goodman

George A. Joulwan

Paul G. Kaminski

Carl E. Mundy, Jr.

Carlisle A. H. Trost

3ex10-6

 

EXHIBIT 10.6

GENERAL DYNAMICS CORPORATION

NON-EMPLOYEE DIRECTORS 1999 STOCK PLAN

	1.	 	Purpose. The purpose of the General Dynamics Corporation Non-Employee
Directors 1999 Stock Plan (the “Plan”) is to provide General Dynamics
Corporation (the “Company”) with an effective means of attracting,
retaining, and motivating directors of the Company.
	 
	2.	 	Eligibility. Any member of the Board of Directors of the Company (the
“Board”) who is not an employee of the Company (an “Eligible Director”) is
eligible to participate in the Plan.
	 
	3.	 	Administration. The Plan shall be administered by the Board. Except as
otherwise expressly provided in the Plan, the Board shall have full power and
authority to interpret and administer the Plan, to determine the Eligible
Directors to receive awards and the amounts, types and terms of the awards, to
adopt, amend, and rescind rules and regulations, and to establish terms and
conditions, not inconsistent with the provisions of the Plan, for the
administration and implementation of the Plan, provided, however, that the
Board may not, after the date of any award, make any changes that would
adversely affect the rights of a recipient under such award without the consent
of the recipient. The determination of the Board on all matters shall be final
and conclusive and binding on the Company and all participants.
	 
	4.	 	Awards. Awards may be made by the Board in such amounts as it shall
determine in cash, in the Company’s common stock, par value $1.00 per
share (“Common Stock”), in options to purchase Common Stock of the
Corporation (“Stock Options”), or in shares of Common Stock subject to
certain restrictions (“Restricted Stock”), or any combination thereof.
Further, an Eligible Director’s annual retainer may also be paid under the
Plan in either cash or Common Stock or in a fifty percent (50%) and fifty
percent (50%) combination thereof, as the Eligible Director may elect.
There shall be 40,000 shares of Common Stock available for issuance in
connection with awards under the Plan. If any award under the Plan shall
expire, terminate, or be canceled for any reason without having been
vested or exercised in full, the corresponding number of shares which were
reserved for issuance in connection therewith shall again be available for
the purposes of the Plan. Shares available under the Plan may be
authorized and unissued shares or may be treasury shares.
	 
	5.	 	Common Stock. In the case of awards or payments of retainers in Common
Stock, the number of shares shall be determined by dividing the amount of
the award or retainer elected to be received in Common Stock by the average
of the highest and lowest quoted selling prices of the Company’s Common
Stock on the New York Stock Exchange on the date of the award or retainer.
The average is referred to throughout this Plan as the “fair market value.”

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	6.	 	Dividend Equivalents and Interest.

	 	a.	 	Dividends. If any award in Common Stock or Restricted Stock is
to be paid on a deferred basis, the recipient may be entitled, on
terms and conditions to be established by the Board, to receive a
payment of, or credit equivalent to, any dividend payable with respect
to the number of shares of Common Stock or Restricted Stock which, as
of the record date for the dividend, has been awarded or made payable
to the recipient but not delivered.
	 
	 	b.	 	Interest. If any award in cash is to be paid on a deferred
basis, the recipient may be entitled, on terms and conditions to be
established by the Board, to accrue interest on the unpaid amount.

	7.	 	Restricted Stock Awards.

	 	a.	 	General. Restricted Stock represents awards made in Common Stock
in which the shares granted may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated except upon passage
of time, or upon satisfaction of other conditions, or both, in every
case as provided by the Board. The recipient of an award of
Restricted Stock shall be entitled to vote the shares awarded and to
the payment of dividends on the shares from the date the award of
shares is made; and, in addition, all Special Distributions (as
defined in Section 9 hereof) thereon shall be credited to an account
similar to the Account described in Section 9. The recipient of an
award of Restricted Stock shall have a nonforfeitable interest in
amounts credited to such account in proportion to the lapse of
restrictions on the Restricted Stock to which such amounts relate.
For example, when restrictions lapse on fifty percent (50%) of the
Restricted Stock granted in an award, the holder of such Restricted
Stock shall have a nonforfeitable interest in fifty percent (50%) of
the amount credited to his account which is attributable to such
Restricted Stock. The holder of Restricted Stock shall receive a
payment in cash of any amount in his account as soon as practicable
after the lapse of restrictions relating thereto.
	 
	 	b.	 	Restricted Stock Performance Formula. Awards of Restricted Stock
may be granted pursuant to the formula described in this Section,
referred to herein as the “Restricted Stock Performance Formula.” The
Board shall make an initial grant of shares of Restricted Stock (the
“Initial Grant”). At the end of a specified performance period
(determined by the Board), the number of shares in the Initial Grant
shall be increased or decreased, based on the increase or decrease in
the fair market value of a share of Common Stock during the
performance period, by a number of shares equal to (a) the excess of
the fair market value of a share of Common Stock on the last day of
the performance period over the fair market value of a share of Common
Stock on the grant date multiplied by (b) the number of shares of
Restricted Stock subject to the Initial Grant and divided by (c) the
fair market value of a share of Common Stock on the last day of the
performance period. The number of shares of Common Stock so
determined is added to (in the case of a higher fair market value) or
subtracted from (in the case of a lower fair market value) the number
of shares of Restricted Stock to be earned at that time. Once the
number of shares of Restricted Stock has been adjusted, restrictions
will continue to be imposed for a period of time determined by the
Board.

	8.	 	Stock Option Awards.

	 	a.	 	Type of Options. Options shall be in the form of options which
do not qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended.

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	 	b.	 	Purchase Price. The purchase price of the Common Stock under
each option shall be determined by the Board, but shall not be less
than 100 percent of the fair market value of the Common Stock on the
date of the award of the option.
	 
	 	c.	 	Terms and Conditions. The Board shall establish (i) the term of
each option, (ii) the terms and conditions upon which and the times
when each option shall be exercised, and (iii) the terms and
conditions under which options may be exercised after termination as
an Eligible Director for any reason for periods not to exceed three
years after such termination.
	 
	 	d.	 	Purchase by Cash or Stock. The purchase price of shares
purchased upon the exercise of any stock option shall be paid (i) in
full in cash, or (ii) in whole or in part (in combination with cash)
in full shares of Common Stock owned by the optionee and valued at
fair market value on the date of exercise, all pursuant to procedures
approved by the Board.
	 
	 	e.	 	Transferability. Options shall not be transferable other than by
will or pursuant to the laws of descent and distribution. During the
lifetime of the person to whom an option has been awarded, it may be
exercisable only by such person or one acting in his stead or in a
representative capacity. Upon or after the death of the person to
whom an option is awarded, an option may be exercised by the
optionee’s legatee or legatees under his last will, or by the option
holder’s personal representative or distributee’s executive,
administrator, or personal representative or designee in accordance
with the terms of the option.

	9.	 	Adjustments for Special Distributions. The Board shall have the
authority to change all Stock Options granted under this Plan to adjust
equitably the purchase price thereof and the number and kind of shares or
other property subject thereto to reflect a special distribution to
shareholders or other extraordinary corporate action involving
distributions or payments to shareholders (collectively referred to as
“Special Distributions”). In the event of any Special Distribution, the
Board may cause to be created a Special Distribution account (the
“Account”) in the name of the individual to whom Stock Options have been
granted hereunder (sometimes herein referred to as a “Grantee”) to which
shall be credited an amount determined by the Board, or, in the case of
non-cash Special Distributions, make appropriate comparable adjustments
for, or payments to or for the benefit of, the Grantee.
	 
	 	 	Amounts credited to the Account in accordance with the preceding rules
shall be credited with interest, accrued monthly, at an annual rate equal
to the higher of Moody’s Corporate Bond Yield Average or the prime rate in
effect from time to time, and such interest shall be credited in accordance
with rules to be established by the Board. Notwithstanding the foregoing,
at no time shall the Board permit the amount credited to the Grantee’s
Account to exceed 90 percent of the purchase price of the Grantee’s
outstanding Stock Options to which such amount relates. To the extent that
any credit would cause the Account to exceed that limitation, such excess
shall be distributed to the Grantee in cash.
	 
	 	 	Amounts credited to the Grantee’s Account shall be paid to the Grantee or,
if the Grantee is deceased, his or her beneficiary at the time that the
options to which it relates are exercised or expire, whichever occurs
first.

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	 	 	The Account shall for all purposes be deemed to be an unfunded promise to
pay money in the future in certain specified circumstances. As to amounts
credited to the Account, a Grantee shall have no rights greater than the
rights of a general unsecured creditor of the Company, and amounts credited
to the Grantee’s Account shall not be assignable or transferable other than
by will or the laws of descent and distribution, and such amounts shall not
be subject to the claims of the Grantee’s creditors.
	 
	10.	 	Adjustments and Reorganizations. The Board may make such adjustments to
awards granted under the Plan (including the terms, exercise price, and
otherwise) as it deems appropriate in the event of changes that impact the
Company, the Company’s share price, or share status.
	 
	 	 	In the event of any merger, reorganization, consolidation, change of
control, recapitalization, separation, liquidation, stock dividend, stock
split, extraordinary dividend, spin-off, split-up, rights offering, share
combination, or other change in the corporate structure of the Company
affecting the Common Stock, the number and kind of shares that may be
delivered under the Plan shall be subject to such equitable adjustment as
the Board may deem appropriate. Except as otherwise provided by the Board,
all authorized shares, share limitations, and awards under the Plan shall
be proportionately adjusted to account for any increase or decrease in the
number of issued shares of Common Stock resulting from any stock split,
stock dividend, reverse stock split, or any similar reorganization or
event. Notwithstanding anything in this Plan to the contrary, all awards
outstanding hereunder shall become fully vested upon the occurrence of a
change in control.
	 
	 	 	In the preceding paragraph, “change of control” means any of the following
events:

	 	a.	 	An acquisition (other than directly from the Company) of any voting
securities of the Company by any Person (as used in Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
including any “group” as such term is used in such sections) who immediately
after such acquisition is the Beneficial Owner (as used in Rule 13d-3
promulgated under the Exchange Act) of 40 percent or more of the combined
voting power of the Company’s then outstanding voting securities; provided
that, in determining whether a change of control has occurred, voting
securities which are acquired by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by the Company or any subsidiary of the
Company, (ii) the Company or any subsidiary of the Company, (iii) any Person
that, pursuant to Rule 13d-1 promulgated under the Exchange Act, is permitted
to, and actually does, report its beneficial ownership of voting securities of
the Company on Schedule 13G (or any successor Schedule) (a “13G Filer”)
provided that, if any 13G Filer subsequently becomes required to or does
report its Beneficial Ownership of voting securities of the Company on Schedule
13D (or any successor Schedule) then such Person shall be deemed to have first
acquired, on the first date on which such Person becomes required to or does so
file, Beneficial Ownership of all voting securities of the Company Beneficially
Owned by it on such date, or (iv) any person in connection with a Non-Control
Transaction (as hereinafter defined), will not constitute an acquisition which
results in a change of control
	 
	 	b.	 	Consummation of:

	 	(i)	 	a merger, consolidation, or reorganization involving the
Company or any direct or indirect subsidiary of the Company,
unless:

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	 	(A)	 	the stockholders of the Company
immediately before such merger, consolidation, or
reorganization will own, directly or indirectly,
immediately following such merger, consolidation, or
reorganization, at least 50 percent of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation, or
reorganization (the “Surviving Company”) or any parent
thereof in substantially the same proportion as their
ownership of the voting securities of the Company
immediately before such merger, consolidation, or
reorganization; and
	 
	 	(B)	 	the individuals who were members of the
Board immediately prior to the execution of the agreement
providing for such merger, consolidation, or
reorganization constitute a majority of the members of
the Board of Directors of the Surviving Company or any
parent thereof; and
	 
	 	(C)	 	no person (other than the Company, any
subsidiary of the Company, any employee benefit plan (or
any trust forming a part thereof) maintained by the
Company, any Schedule 13G Filer, the Surviving Company,
any subsidiary or parent of the Surviving Company, or any
person who, immediately prior to such merger,
consolidation, or reorganization, was the Beneficial
Owner of 40 percent or more of the then outstanding
voting securities of the Company) is the Beneficial Owner
of 40 percent or more of the combined voting power of the
Surviving Company’s then outstanding voting securities;
	 
	 	(D)	 	a transaction described in clauses (A)
through (C) above is referred to herein as a “Non-Control
Transaction;”

	 	(ii)	 	the complete liquidation or dissolution of the Company;
or
	 
	 	(iii)	 	a sale or other disposition of all or substantially all
of the assets of the Company (other than a sale or other
disposition to an entity (A) of which at least 50 percent of the
combined voting power of the outstanding voting securities are
owned, directly or indirectly, by stockholders of the Company in
substantially the same proportion as their ownership of the voting
securities of the Company, (B) a majority of whose board of
directors is comprised of individuals who were members of the
Board immediately prior to the execution of the agreement
providing for such sale or other disposition and (C) of which no
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan (or any trust forming a part thereof)
maintained by the Company, any Schedule 13G Filer, the Surviving
Corporation, any Subsidiary or parent of the Surviving
Corporation, or any Person who, immediately prior to such merger,
consolidation or reorganization, was the Beneficial Owner of 40
percent or more of the then outstanding voting securities of the
Company) has Beneficial Ownership of 40 percent or more of the
combined voting power of the entity’s outstanding voting
securities.

	 	c.	 	Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”), cease for any reason to constitute at least a
majority of the Board; provided, however, that any
individual becoming a director subsequent to the effective date of the
Plan whose election, or nomination for election by Company
stockholders, was approved by a vote of two-thirds of

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	 	 	 	the directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (including, but not limited to, a consent
solicitation).
	 
	 	d.	 	Notwithstanding the foregoing, a change of control will not be
deemed to occur solely because any person (a “Subject Person”)
acquires beneficial ownership of more than the permitted amount of the
outstanding voting securities of the Company as a result of the
acquisition of voting securities by the Company which, by reducing the
number of voting securities outstanding, increases the proportional
number of shares beneficially owned by the Subject Person, provided
that if a change of control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition by the Company, the Subject
Person becomes the beneficial owner of any additional voting
securities which increases the percentage of the then outstanding
voting securities beneficially owned by the Subject Person, then a
change of control will be deemed to have occurred.

	11.	 	Tax Withholding. In the event that federal, state or local tax laws
provide withholding requirements that apply to Eligible Directors, the
Company shall withhold amounts paid under the Plan as required by any such
law.
	 
	12.	 	Expenses. The expenses of administering the Plan shall be borne by the
Company.
	 
	13.	 	Amendments. The Board shall have complete power and authority to amend
the Plan, provided that the Board shall not amend the Plan in any manner
that requires shareholder approval under applicable law without such
approval No amendment to the Plan may, without the consent of the
individual to whom the award shall theretofore have been awarded,
adversely affect the rights of an individual under the award.
	 
	14.	 	Effective Date of the Plan. The Plan shall become effective on December
1, 1999, the date of its adoption by the Board.
	 
	15.	 	Termination. The Board may terminate the Plan or any part thereof at any
time, provided that no termination may, without the consent of the
individual to whom any award shall theretofore have been made, adversely
affect the rights of an individual under the award.
	 
	16.	 	Other Actions. Nothing contained in the Plan shall be deemed to preclude
other compensation plans which may be in effect from time to time or be
construed to limit the authority of the Company to exercise its corporate
rights and powers, including, but not by way of limitation, the right of the
Company (a) to award options for proper corporate purposes otherwise than under
the Plan to an employee or other person, firm, corporation, or association, or
(b) to award options to, or assume the option of, any person in connection with
the acquisition, by purchase, lease, merger, consolidation, or otherwise, of
the business and assets (in whole or in part) of any person, firm, corporation,
or association.

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