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EXHIBIT 10.37
RETIREMENT BENEFIT AGREEMENT
AGREEMENT DATED AS OF 4 March, 1998 between General Dynamics Corporation, a
Delaware corporation ("the Corporation"), and Xxxxx X. Xxxxxx ("the Executive").
WHEREAS, the Executive, following his employment by the Corporation, will accrue
retirement benefits under the General Dynamics Retirement Plan for Salaried
Employees (the "Retirement Plan") and to the extent the accrued benefits under
the Retirement Plan are limited by Section 415, 401(a)(4) or 401(a)(17) of the
Internal Revenue Code (or similar provisions), any benefit that would have been
provided by the benefit formula of the Retirement Plan in excess of those
limitations will be provided under a nonqualified plan (Supplemental Retirement
Plan). The Retirement Plan and the Supplemental Retirement Plan are hereinafter
collectively referred to as the "Retirement Program."
WHEREAS, this Agreement provides for certain additional retirement benefits to
be paid following the Executive's termination of employment or retirement.
NOW, THEREFORE, in consideration for the Executive's acceptance of employment
with the Corporation and the services to be rendered to the Corporation by the
Executive, the Corporation and the Executive agree as follows:
1. MEMBERSHIP IN GENERAL DYNAMICS RETIREMENT PLAN.
The Executive will become a member of the General Dynamics Retirement
Program, a copy of which has been furnished to him.
2. RETIREMENT PROGRAM BENEFIT.
Upon the Executive's retirement from the Corporation, the Executive shall
be entitled to such annual retirement benefits, if any, as of the date of
the Executive's termination of employment with the Corporation, based upon
the terms of the Retirement Program. Payment of these benefits shall
commence at such time and in the form the Executive elects pursuant to the
terms of the Retirement Plan.
3. AMOUNT OF SUPPLEMENTAL RETIREMENT BENEFIT.
Upon termination of the Executive's employment with the Corporation under
the conditions specified in Section 4, the Supplemental Retirement Benefit
shall equal an amount calculated under the Final Average Benefit Formula
of the Retirement Plan increased to reflect the addition of five (5) years
of Plan Membership (as defined in the Retirement Plan) to the Executive's
actual period of Plan Membership while an Executive and then reduced by
any payments that may be payable under the Retirement Program. This offset
shall be calculated based on the normal lifetime benefits payable under
the terms of this Retirement Benefit Agreement and the Retirement Program
prior to the election of any optional forms for payment of retirement
benefits.
Payment of Supplemental Retirement Benefits shall commence to the
Executive on the first day of the month following his attainment of age
sixty-two (62) or following his date of termination of employment or
retirement, if later.
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4. ELIGIBILITY FOR SUPPLEMENTAL RETIREMENT BENEFITS.
If the Executive voluntarily terminates employment with the Corporation
during his first six (6) years of employment, no Supplemental Retirement
Benefit shall be payable under the terms of this Retirement Benefit
Agreement. This restriction shall not apply to any retirement benefits
that may be payable under the Retirement Program. Subject to the
restrictions enumerated in the last paragraph of this Section 4, if the
Executive terminates employment following completion of at least six (6)
years of employment, the Executive shall be entitled to the Supplemental
Retirement Benefit specified in Section 3 above.
Alternatively, if the Executive shall terminate his employment with the
Corporation at anytime after the execution of this Agreement under either
of the conditions specified in paragraphs (a) or (b) below, the Executive
shall be entitled to the Supplemental Retirement Benefit specified in
Section 3 above.
(a) In the event of the Executive's illness or disability such that he
is unable, in the sole opinion of the Compensation Committee, to
adequately perform the tasks of his position; or
(b) If the Corporation shall substantially downgrade the Executive's
responsibilities or if the Corporation shall involuntarily terminate
his employment other than for cause.
Notwithstanding anything in this Agreement to the contrary, no
Supplemental Retirement Benefit shall be paid hereunder (and any
Supplemental Retirement Benefit currently being paid to the Executive
shall cease) if, in the sole opinion of the Compensation Committee, the
Executive: (a) is discharged for causing harm to the Corporation
(financial, reputation, or product), through: (i) an act or acts of
personal dishonesty, (ii) conviction of a felony related to the
Corporation, (iii) material violation of General Dynamics' standards of
business ethics and conduct, or (iv) individually filing, assisting or
participating in a lawsuit against the Corporation, or (b) is subsequently
employed either as an employee or an independent contractor (other than as
a director on the board of directors for a charitable organization)
without prior Compensation Committee approval which approval shall not be
unreasonably withheld.
5. ALTERNATE FORM OF BENEFIT.
The Executive shall have the option, on written notice transmitted to the
Corporation at least 30 days prior to the date on which payment of his
benefit would otherwise commence hereunder, to elect to receive the
retirement benefit described herein payable in an alternate form as
provided by the Retirement Plan or, in the Corporation's discretion, in
another form of actuarial equivalent value. The applicable single-life
annual benefit shall then be converted to the alternate form elected by
the application of the actuarial factors used for converting benefits
under the Retirement Plan at the time the retirement benefit is to
commence.
6. SURVIVOR BENEFIT IN CASE OF DEATH PRIOR TO COMMENCEMENT OF BENEFITS.
If the Executive dies after the date of this Agreement but prior to
commencement of benefits, and at the time of his death he would have been
entitled to a Supplemental Retirement Benefit under this Agreement in the
event of his involuntary termination, then his spouse shall be entitled to
receive a "Pre-Retirement Surviving Spouse Annuity" as provided in the
Retirement Plan (currently defined as a 50% Contingent Annuity) for her
life. The amount of the Pre-Retirement Surviving Spouse Annuity payable
under this Agreement shall equal the amount that would have been paid to
the Executive under this
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Agreement as a single-life annuity, assuming he was involuntarily
terminated immediately prior to his date of death, reduced by the
Retirement Plan's actuarial adjustments necessary to express the
single-life annuity as a 50% contingent annuity option. Payment of this
benefit shall commence on the date the Supplemental Retirement would have
commenced to the Executive if he had involuntarily terminated immediately
prior to his death.
7. PAYMENT.
All annual retirement benefits for the life of the Executive (or alternate
form of benefit) or other amounts payable as provided in this Agreement
shall be paid as provided in the Executive's benefit election under the
Retirement Plan. Any retirement benefits to which the Executive is
entitled under this Agreement shall be paid directly by the Corporation to
the extent they are not paid under the Retirement Plan. The Corporation
may, in its sole discretion, accelerate the payment of benefits under this
Agreement in the form of an actuarial equivalent value mutually agreeable
to the parties.
8. NO ASSIGNMENT.
No benefit under this Agreement shall be subject 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 shall be void, and no such
benefit shall 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.
9. PAYMENT FROM GENERAL ASSETS.
Unless otherwise determined by the Corporation, the Supplemental
Retirement Benefit will be payable by the Corporation from its general
assets. The Corporation shall not be obliged to acquire, designate or set
aside any specific assets for payment of the Supplemental Retirement
Benefit. Further, the Executive shall have no claim whatsoever to any
specific assets or group of assets of the Corporation.
The Corporation may, in its discretion, designate that the Supplemental
Retirement Benefit shall 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 the Supplemental Retirement Benefit
described above, the Corporation shall remain liable for their payment
unless otherwise agreed to by the parties of this Agreement.
10. TAXATION.
The Executive and the Corporation agree that all payments hereunder shall
be treated as "wages" for federal and state income tax and employment tax
purposes at such time and in such manner as shall be prescribed by law.
Each party to this Agreement shall be responsible for the payment of any
such taxes as shall be legally required of such party.
11. This Agreement shall be governed by the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
behalf of its Chairman and Chief Executive Officer by the Corporate Vice
President - Human Resources and Administration and its corporate seal to be
hereunto affixed and attested to by the Secretary of the Corporation, and the
Executive has executed this Agreement as of the date first above written.
ATTEST: GENERAL DYNAMICS CORPORATION
[SIG] By: /s/ W. XXXX XXXXX
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Secretary W. Xxxx Xxxxx
Corporate Vice President - Human
Resources and Administration
[SIG] /s/ XXXXX XXXXXX
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Witness Xxxxx X. Xxxxxx
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