Employment Agreement - General Dynamics Corp. and James R. Mellor
AMENDMENT TO EMPLOYMENT AGREEMENT
FOR JAMES R. MELLOR
This Amendment to Employment Agreement dated as of this fifth
day of November 1996 by and between General Dynamics Corporation, a Delaware
corporation (the 'Corporation') and Mr. James R. Mellor.
WHEREAS, effective October 3, 1995, the Corporation and Mr.
Mellor entered into an Employment Agreement (the '1995 Agreement') amending Mr.
Mellor's March 17, 1993, Employment Agreement, pursuant to which Mr. Mellor
agreed to extend his services as Chairman and Chief Executive Officer of the
Corporation from December 31, 1995, until December 31, 1996; and
WHEREAS, the Corporation and Mr. Mellor desire to extend his
services as Chairman and Chief Executive Officer of the Corporation until May
31, 1997, and to provide for Mr. Mellor to provide services to the Corporation
thereafter to an extent greater than contemplated in the 1995 Employment
Agreement, and in connection therewith desire to amend and modify in certain
respects the terms of his 1995 Employment Agreement.
NOW THEREFORE, the Corporation and Mr. Mellor hereby agree as
1. The Corporation hereby agrees to extend Mr. Mellor's employment as Chairman
and Chief Executive Officer of the Corporation until May 31, 1997, and Mr.
Mellor hereby agrees to serve in such capacity until such time upon the
terms and conditions hereinafter set forth.
2. In consideration of extending his services to the Corporation as Chairman
and Chief Executive Officer until May 31, 1997, the Corporation hereby
agrees that (i) Mr. Mellor's bonus compensation for the year 1996, which
will be paid to him in 1997 when bonuses are paid to other senior executive
officers of the Corporation, shall be in the amount of $1,750,000; (ii)
that Mr. Mellor's base compensation for the period January 1, 1997, through
May 31, 1997, shall be at the same annual rate of base compensation as is
currently being paid to Mr. Mellor; (iii) his bonus for the period January
1, 1997, through May 31, 1997, will be the pro rata amount of the bonus
payable to him with respect to 1996 or $730,000, payable upon his
resignation on May 31, 1997; and (iv) in lieu of Mr. Mellor's participation
in the 1997 Long-Term Incentive Program, a cash payment of $840,000 (the
equivalent present value of 5/12 of the 1997 Long-Term Award he would
otherwise have received), payable upon his resignation on May 31, 1997.
3. For the 12-month period following his resignation as Chairman and Chief
Executive Officer on May 31, 1997, Mr. Mellor will render services to the
Corporation in such manner and upon such terms and conditions as the
Corporation and Mr. Mellor shall agree to, provided that, upon the request
of the Corporation, Mr. Mellor will devote not less than 5 days during each
calendar month during such 12-month period to the rendition of such
services. In consideration of the rendition of such services, the
Corporation hereby agrees that upon Mr. Mellor's resignation as Chairman
and Chief Executive Officer of the Corporation on May 31, 1997, it shall
pay to Mr. Mellor the sum of $580,000.
4. Paragraph 1 of Section 1 of the 1995 Employment Agreement is hereby
modified, in order to reflect the additional months of service which Mr.
Mellor has agreed to render to the Corporation as hereinabove provided, so
that the annual supplemental retirement benefit to which he is entitled
pursuant to said Paragraph 1 is amended to be '$147,064.' Mr. Mellor may
receive that amount, upon his request, in a lump-sum payment upon his
retirement, said lump-sum payment to represent the normal value accumulated
in the General Dynamics Pension Plan for Salaried Employees using the
formulas provided for therein.
In addition, the amount to be paid to Mr. Mellor pursuant to Paragraph 2
of Section 1 of the 1995 Employment Agreement shall be $100,957 in order
to reflect the additional months of service to the Corporation as provided
for in this Amendment to the Employment Agreement.
5. The amount to be paid to Mr. Mellor pursuant to Section 2 of the 1995
Employment Agreement shall be deferred until May 31, 1997, with interest
thereon computed in accordance with the terms and provisions of Section 2
of said 1995 Employment Agreement.
6. The Addendum to the Retirement Benefit Agreement attached as an Addendum to
the 1995 Employment Agreement is hereby amended so that the amount provided
for in Section 3(a) therein is changed from '$58,272' to '$147,064.'
7. Except as expressly provided herein, the terms and conditions of the 1995
Employment Agreement, including the Addendum thereto, shall remain in full
force and effect.
8. This Agreement shall be construed and enforced in accordance with the laws
of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be executed as of the date first above written on its behalf by the Corporate
Vice President, Human Resources and Administration, and its Corporate seal to be
hereunto affixed and attested to by its Secretary, each of whom has been
'hereunto duly authorized, and Mr. Mellor has signed this Agreement.
GENERAL DYNAMICS CORPORATION
By: /s/ William P. Wylie
/s/ Paul A. Hesse
/s/ James R. Mellor
James R. Mellor