Executive Compensation Agreement - United Defense LP and Arthur L. Roberts


                              UNITED DEFENSE, L.P.

                                 June 3O, 1997

Arthur L. Roberts

              Re: Executive Compensation Agreement
                  --------------------------------

Dear Arthur:

         This Letter Agreement serves to confirm the discussion between Thomas
W. Rabaut and you ('Executive') concerning the decision of the Board of
Directors of FMC Corporation ('FMC' or the 'General Partner'), the general
partner of United Defense, L.P. (the 'Company'), to (i) solicit potential buyers
for a possible sale of the outstanding general partner interests, or outstanding
general partner and limited partner interests, of the Company (a 'Sale of the
Company') and (ii) to consider a spin-off of the Company in a transaction or
series of related transactions pursuant to which the stockholders of FMC would
become the holders of FMC's equity interests in the Company as a result of a
distribution of such interests (a 'Spin-Off'). Each of a Sale of the Company
and a Spin-Off are referred to herein as a 'Transaction.' In connection with
such decision, the Company hereby agrees with Executive, effective as of the
date written above, to the following terms and conditions set forth in this
Letter Agreement.

1. Compensation Arrangements. In consideration of Executive's agreement to
   cooperate with the General Partner in pursuing a Transaction and to fulfill
   Executive's other obligations set forth in this Letter Agreement, Executive
   shall be entitled to receive the payments and benefits described below:

   (a) Performance Incentive: If a Transaction is consummated, Executive shall
       be entitled to a bonus (the 'Performance Incentive Bonus') of $100,000
       payable 30 days after the consummation of such Transaction (the 'Final
       Transaction Date'); provided, however, that (i) the Performance Incentive
       Bonus shall not be payable if, prior to the Final Transaction Date,
       Executive's employment with the Company is voluntarily terminated without
       Good Reason or is involuntarily terminated for Cause and (ii) the
       Performance Incentive Bonus shall be payable if Executive's employment is
       voluntarily terminated with Good Reason or involuntarily terminated not
       for Cause prior to the Final Transaction Date. Notwithstanding the
       foregoing, the Performance Incentive Bonus shall be payable if Executive
       voluntarily terminates his employment prior to the Final Transaction Date
       in order to accept an offer of employment from FMC.

   (b) Severance Pay: Subject to consummation of a Sale of the Company (but not
       a Spin-Off), if Executive is terminated by the Company not for Cause, or
       if Executive voluntarily terminates his employment with the Company with
       Good Reason, at any time after the Final Transaction Date up to and
       including the two-year anniversary





       of the Final Transaction Date, Executive shall be entitled to receive
       from the Company the following:

       (i)    An amount equal to Executive's annualized base salary in effect at
              the effective time of such termination plus an amount equal to
              Executive's (A) earned and unused and (B) accrued vacation pay
              through the effective time of such termination.

       (ii)   An amount equal to the greater of (A) Executive's target bonus
              established for the plan period commencing January 1, 1997 and (B)
              Executive's target bonus established for the plan period
              commencing in the year of such termination.

       (iii)  A continuation of the welfare benefits of health care (including
              dental insurance coverage), life and accidental death and
              dismemberment and long-term disability insurance coverage for one
              full year after the effective time of such termination. These
              benefits shall be provided to Executive at the same premium cost,
              and at the same coverage level, as in effect as of the effective
              time of such termination. However, in the event the premium cost
              and/or level of coverage shall change for all employees of the
              Company, or for management employees with respect to supplemental
              benefits, the cost and/or coverage level, as applicable, shall
              change for Executive in a corresponding manner.

       (iv)   Executive outplacement assistance in accordance with FMC's
              customary practices for persons in Executive's employment position
              from the outplacement firm employed by FMC as of the effective
              time of such termination.

       Executive shall also be entitled to receive severance benefits under this
       paragraph 1(b) upon voluntary termination of employment with the Company
       prior to the Final Transaction Date if the buyer of partnership interests
       of the Company ('Buyer') indicates in writing to FMC prior to the Final
       Transaction Date that Buyer intends to cause the Company to terminate
       Executive following the Final Transaction Date, unless Executive accepts
       an offer of employment with FMC prior to the Final Transaction Date. A
       liquidation or dissolution of the Company in connection with a Sale of
       the Company or as part of the integration of the operations of the
       Company and Buyer shall not be deemed to involve a termination of
       Executive for purposes of this paragraph 1(b), but in such event this
       paragraph 1(b) is intended to apply to and be binding on the successor
       of the Company.

   (c) FMC 1995 Management Incentive Plan:

       (i)    Bonus Performance Incentive Award. Whether or not Executive
              completes the Three-Year Period (as defined in the FMC 1995
              Management Incentive Plan (the 'MIP')) ending December 31, 1997 as
              an employee of the





              Company, Executive shall receive a BPI Award (as defined below)
              with respect to such Three-Year Period based on the greater of the
              at-target performance and the actual performance of the Company
              for such Three-Year Period. Such BPI Award shall be reduced by the
              amount of the draw against such BPI Award previously paid to
              Executive and, as so reduced, shall be payable at the time when
              FMC makes payment of the BPI Awards to other participants in the
              MIP. For purposes of this Letter Agreement, the term 'BPI Award'
              shall mean a Three-Year Incentive Award within the meaning of the
              MIP.

       (ii)   Annual Performance Incentive Award. Whether or not Executive
              completes the calendar year ending December 31, 1997 as an
              employee of the Company, Executive shall receive an annual
              performance incentive award with respect to such period based on a
              review of Executive's performance during such period. Such annual
              performance incentive award shall be payable at the time when FMC
              makes payment of the annual performance incentive awards to other
              participants in the MIP.

   (d) Equity Incentive Awards: Notwithstanding any contrary term contained in
       any applicable FMC stock option plan (the 'Option Plan') or any
       applicable stock option agreement, but subject to the approval of the
       Compensation and Organization Committee of the Board of Directors of FMC
       or any other appropriate committee, Executive shall have the right to
       exercise any outstanding stock options granted to him under the Option
       Plan that are vested as of the Final Transaction Date within the earlier
       of (A) two years from the Final Transaction Date and (B) the scheduled
       expiration date of such options under the Option Plan and the applicable
       stock option agreements.

2. Obligations of Executive:

   (a) Nondisclosure of Transaction Matters. Except as required by any court or
       governmental entity, Executive agrees not to disclose or discuss with any
       person (regardless of any termination of this Letter Agreement or any
       determination by FMC to no longer pursue a Transaction) the existence or
       terms of this Letter Agreement, the fact that a Transaction is being
       considered, the terms or conditions of a Transaction or the status of any
       Transaction discussions or negotiations; provided, however, that (i)
       Executive shall be free to consult with the other officers of the Company
       or with his or their legal counsel, accountants and financial advisors in
       connection with this Letter Agreement and any Transaction; and (ii)
       Executive shall be free to disclose and discuss such matters in
       connection with any Transaction as authorized by FMC officials leading
       FMC's efforts in connection with any such Transaction.

   (b) Executive Cooperation in Transaction Efforts. Executive agrees to
       cooperate with the partners of the Company in their respective efforts to
       negotiate and close a Transaction, regardless of whether Executive or any
       other member of the





       management of the Company ('Management') becomes a participant in such
       Transaction. Without limiting the generality of the foregoing, (i)
       Executive shall not take any action which could be reasonably expected to
       give Management or any investors who propose to participate with
       Management in a Transaction an advantage over other potential
       participants in such Transaction or any alternative Transaction; (ii)
       Executive shall make himself available at FMC's request from time to time
       to answer questions and provide information to potential participants in
       a Transaction, which shall be done in a manner consistent with the
       policies, procedures and guidelines established by FMC; and (iii)
       Executive shall otherwise promote any Transaction consistent with his
       duty to act in the best interest of the Company and shall continue his
       functional responsibilities and assist FMC in connection with the
       negotiation and consummation of any such Transaction, consistent with
       Executive's demonstrated capabilities.

   (c) Representations and Warranties Relating to any Transaction. Executive
       understands that FMC and/or the limited partner of the Company may decide
       to make certain representations and warranties relating to the business
       and operations of the Company to participants in a Transaction under the
       terms of the definitive agreements with such participants (the
       'Definitive Agreements'). Executive agrees that, prior to the execution
       of the Definitive Agreements and prior to the closing of any such
       Transaction, Executive will (i) review all such representations and
       warranties and (ii) certify in writing to FMC and/or the limited partner
       of the Company (the 'Certificate') (A) that Executive knows of no
       material misstatement or omission contained in such representations and
       warranties or (B) that Executive has identified to FMC and/or the limited
       partner of the Company in writing any material misstatements or omissions
       contained in such representations and warranties. Executive understands
       and acknowledges that such certification is customary in connection with
       transactions such as such Transaction and that FMC will rely on such
       certification in executing the Definitive Agreement and in closing such
       Transaction.

3. No Contract of Employment. This Letter Agreement is not a contract of
   employment. Nothing expressed or implied in this Letter Agreement shall
   create any right or duty of Executive's continued employment by FMC or the
   Company, and the Company reserves all rights to terminate Executive's
   employment at any time for or not for Cause, subject to the provisions
   hereof.





4. Certain Definitions.

   (a) The term 'Cause' as used herein shall mean (i) Executive's willful and
       continued failure to substantially perform his duties with the Company
       (other than any such failure resulting from disability or occurring after
       issuance by Executive of a notice of termination with Good Reason), after
       a written demand for substantial performance is delivered to Executive
       that specifically identifies the manner in which the Company believes
       that Executive has willfully failed to substantially perform his duties,
       and after Executive has failed to resume substantial performance of his
       duties on a continuous basis within thirty (30) calendar days of
       receiving such demand, (ii) the commission by Executive of an act of
       fraud, misappropriation, embezzlement or any other act involving moral
       turpitude or constituting a felony, or (iii) the commission by Executive
       of any act of dishonesty which injures the Company, any partner of the
       Company or Buyer, as the case may be.

   (b) The term 'Good Reason' as used herein shall mean the occurrence of one or
       more of the following events without Executive's consent: (i) Executive's
       base salary as of the date hereof is reduced for any reason by more than
       5% other than as a result of the termination of Executive's employment or
       (ii) after the Final Transaction Date, Executive's employment with the
       Company is not on terms comparable to Executive's employment with the
       Company as of the date hereof in terms of compensation, responsibility
       and authority. Executive shall notify the Company within 15 days after
       Executive knows of the occurrence of any event within the meaning of
       clauses (i) or (ii) above and the Company may cure any such event and
       notify Executive thereof within 15 days of the Company's receipt of
       Executive's notice. Within 15 days after expiration of such 15-day
       period, Executive must voluntarily terminate his employment with the
       Company in order to be entitled to benefits hereunder.

5. General Provisions: It is expressly understood and agreed: (i) that all of
   the terms and conditions of the compensation plans described in paragraph 1
   above are to remain in full force and effect as applied to Executive and (ii)
   that, except as specifically modified by this Letter Agreement, any payments
   and distributions made pursuant to paragraph 1 above are in lieu of any other
   payments which would otherwise be due under the same compensation plan for
   the same relevant time period. It is further understood and agreed that the
   following provisions shall apply to this Letter Agreement:

   (a) Irreparable Harm. Executive acknowledges and agrees that the failure of
       Executive to comply with any of the terms of paragraph 2 will irreparably
       harm the Company and that money damages would not adequately compensate
       them for such harm. Thus, Executive agrees that, in addition to any other
       remedies that the Company may have hereunder or otherwise, the Company
       shall be entitled to injunctive or other equitable relief to restrain any
       breach by Executive of such terms, and further that the Company shall be
       entitled to apply for such relief in any court of competent jurisdiction
       without the posting of a bond or any other security.





   (b) Assignment. Neither this Letter Agreement nor any of the rights,
       interests or obligations hereunder may be assigned by Executive. This
       Letter Agreement may be assigned by the Company and is intended to be
       binding on any successor to the Company.

   (c) Governing Law. This Letter Agreement shall be governed by and construed
       in accordance with the laws of the State of Illinois without reference to
       the choice of law principles thereof.

   (d) Parol Integration. The rights and benefits granted pursuant to this
       Letter Agreement are in addition to, and not in lieu of, any rights and
       other benefits to which Executive may be entitled.

   (e) Arbitration. Each of Executive and the Company hereby irrevocably agree
       that, except as provided in paragraph 5(a), any dispute arising out of or
       relating in any way to this Letter Agreement shall be settled solely by
       arbitration in the City of Chicago, Illinois to be administered by the
       American Arbitration Association in accordance with its then prevailing
       rules.

   (f) Status of Payments. No payments made to Executive by the Company pursuant
       to this Letter Agreement (other than with respect to the MIP) shall be
       deemed to be pensionable income or compensation for purposes of
       Executive's rights under the FMC and/or Company pension plan applicable
       to Executive.

                                   * * * * *





         If you agree that the foregoing correctly sets forth the agreement
between us, please sign the enclosed copy of this Letter Agreement in the space
indicated below and return it to the Company.

                                           Very truly yours,

                                           UNITED DEFENSE, L.P.

                                           By:  FMC Corporation

                                           Its: General Partner

                                                  By:  /s/ Thomas W. Rabaut
                                                       -------------------------

                                                  Its: Vice President
                                                       -------------------------

Agreed to as of the day and
year first written above:

   /s/ Arthur L. Roberts
----------------------------
Arthur L. Roberts

      July 9, 1997
----------------------------
Date of Signature





To: Arthur L. Roberts

                Re: Amendment to Executive Compensation Agreement

Dear Art:

         In connection with the Letter Agreement dated as of June 30, 1997,
between you ('Executive') and United Defense L.P. (the 'Company'), the Company
desires, in order to more fully realize the objectives of the Letter Agreement,
to amend the same to clarify certain additional aspects of your compensation not
addressed or only partially addressed therein, as follows:

         FMC Stock Option Plan: Certain options have been granted to you in
connection with such plan (the 'Option Plan') under one or more stock option
agreements which, among other things, ordinarily subject the right of exercise
to the condition precedent that Executive shall have been continuously employed
by the Company or one of its affiliates between the grant date for such options
and December 31, 1997. Regarding such options, the condition regarding such
period of continuous employment shall be deemed fully satisfied if Executive
remains continuously employed from the grant date until the earlier of December
31, 1997 or the Final Transaction Date.

         Any terms not separately defined above shall have the same definitions
set forth in the Letter Agreement.

         If you are in agreement with the foregoing, please execute both
originals of this Amendment, keep one original for your records, and return the
other original to the Company, whereupon the Letter Agreement shall become
amended in the manner set forth above.

                                                Very truly yours,

                                                UNITED DEFENSE, L.P.
                                                By FMC Corporation, acting as
                                                General Partner of United
                                                Defense, L.P., and acting for
                                                itself regarding the Option Plan

                                                By:  /s/ Thomas W. Rabaut
                                                     ---------------------------

                                                Its: Vice President
                                                     ---------------------------

Accepted and agreed to as of the date and
year first written above

   /s/ Arthur L. Roberts
----------------------------
Arthur L. Roberts

      July 22, 1997
----------------------------
Date of Signature