Supplemental Savings and Stock Investment Plan - General Dynamics Corp.
GENERAL DYNAMICS CORPORATION
SUPPLEMENTAL SAVINGS AND
STOCK INVESTMENT PLAN
Effective 1 January 1983 and
restated for amendments
through 1 January 1998
GENERAL DYNAMICS CORPORATION
SUPPLEMENTAL SAVINGS AND
STOCK INVESTMENT PLAN
TABLE OF CONTENTS
SECTION 1 Definitions....................................................................2
SECTION 2 Supplemental Benefits Due to Limitations
Under Defined Contribution Plans...............................................4
SECTION 3 Special Supplemental Benefits..................................................7
SECTION 4 Miscellaneous Provisions.......................................................8
SECTION 5 Amendment and Termination of Plan.............................................10
GENERAL DYNAMICS CORPORATION
SUPPLEMENTAL SAVINGS AND
STOCK INVESTMENT PLAN
This Plan is established effective 1 January 1983, restated as of 1 January
1987, and restated again as of 1 January 1998 so as to strengthen the ability of
the Corporation and its Subsidiaries to attract and retain persons of
outstanding competence upon which, in large measure, continued growth and
The Plan is intended to supplement benefits that may be provided under any plans
of the Corporation and its Subsidiaries, as they may be in effect from time to
time, that are qualified under Section 401 of the Internal Revenue Code of 1986,
as amended. The Corporation shall not be required to fund, in any way, any of
the benefits provided under this Plan prior to the time payments become due to
The Plan is intended to be an unfunded deferred compensation plan for a select
group of management or highly compensated employees and an unfunded excess
benefit plan within the meanings of Sections 3(36), 201(2), 201(7), and
301(a)(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and shall be construed and interpreted accordingly.
Where the following words and phrases appear in the Plan, they shall have the
respective meanings set forth below, unless the context clearly indicates to the
contrary. Some of the words and phrases used in the Plan are not defined in this
Section 1, but, for convenience, are defined as they are introduced into the
1.1 Plan shall mean the General Dynamics Corporation Supplemental Savings
and Stock Investment Plan effective 1 January 1983, restated effective 1
January 1987, and restated again effective 1 January 1998, as it shall
be amended from time to time.
1.2 Corporation or Company shall mean General Dynamics Corporation, a
Delaware corporation, and any successor thereof.
1.3 Subsidiary shall mean any corporation of which General Dynamics
Corporation owns, directly or indirectly, fifty percent (50%) or more of
the outstanding voting stock.
1.4 Employee shall mean any person who is regularly employed as a full-time,
salaried or hourly employee by the Corporation or its Subsidiaries in
any capacity including officers (and also including directors who
regularly render services to the Corporation or its Subsidiaries as
regular full-time employees), and who is not covered by a collective
1.5 Highly Compensated Employee shall mean an individual as described in
Code Section 414(q) as amended.
1.6 Member shall mean an employee who satisfies the eligibility criteria
described at Section 2.1.
1.7 Retirement Plan shall mean any plan, fund or program which was
theretofore or is hereafter established or maintained by the Corporation
and/or its Subsidiaries and which is qualified under Section 401 of the
Code to the extent that by its express terms or as a result of
surrounding circumstances such plan, fund, or program
(a) provides retirement income to Employees, or
(b) results in a deferral of income by Employees for periods
extending to the termination of covered employment or beyond,
regardless of the method of calculating the contributions made to the
Plan, the method of calculating the benefits under the Plan or the
method of distributing benefits from the Plan.
1.8 Defined Contribution Plan or "DC Plan" shall mean a qualified Retirement
Plan maintained by the Corporation which provides for an individual
account for each covered employee and for benefits based solely upon the
amount contributed to the Employee's account, and any income, expenses,
gains and losses, and any other amounts which may be allocated to such
account. Without limitation, this will include the General Dynamics
Savings and Stock Investment Plan and Hourly Employees Savings and Stock
Investment Plan and such other Plans as may be established from time to
time and included hereunder.
1.9 Code shall mean the Internal Revenue Code of 1986, as amended from time
1.10 ERISA shall mean Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.11. Matched Employee Contributions or Matched Salary Deferrals shall mean
employee contributions or salary deferrals made by an Employee to a
Defined Contribution Plan which are the basis for an allocation of a
Company contribution to the Defined Contribution Plan.
1.12 Company Contributions shall mean amounts contributed to a Defined
Contribution Plan by the Corporation or its subsidiaries which are
either (a) determined with reference to amounts of matched employee
contributions or matched salary deferrals or (b) determined
independently thereof but allocated with respect to such contributions,
deferrals, or employee compensation.
1.13 Prior Plan shall mean the General Dynamics Corporation Supplemental
Savings and Stock Investment Plan effective 1 January 1983, restated 1
SUPPLEMENTAL BENEFITS DUE TO LIMITATIONS
UNDER DEFINED CONTRIBUTION PLANS
2.1 Participation. Eligibility for participation in any benefits provided
under this Plan shall be extended to selected Highly Compensated
Employees who are active Members under any Defined Contribution Plan who
elect to defer salary or make contributions pursuant to this Plan and
whose Employee Contributions or Salary Deferrals to a Defined
Contribution Plan are restricted due to the limitations of Code Section
402(g) (limiting the maximum permitted elective deferral to such Plan)
or 401(a)(17) (limiting the maximum annual compensation which may be
considered under a Retirement Plan).
2.2 Benefits. An account shall be established on behalf of a Member entitled
to any benefits under this Section 2. All amounts accrued for the
benefit of Members under the Prior Plan shall remain credited to their
accounts. Such account shall be credited with an amount equal to (a)
minus (b) plus (c) as follows:
(a) As of each accounting date, the amount of Matched Employee
Contributions, Matched Salary Deferrals and Company
Contributions that would have been credited to the benefit of a
Member under the various Defined Contributions Plans in which
the Member participates if no limitations were imposed under
Code Sections 401(a)(17) and 402(g) as described in Section 2.1
above. Member contributions and salary deferrals credited to a
Member under this paragraph 2.2(a) shall be credited pursuant to
an election by the Member to defer the receipt of the
appropriate portion of his compensation. Notwithstanding the
foregoing, unmatched contributions may be credited under this
paragraph 2.2(a) in certain circumstances for Members in the
following groups: Bath Iron Works, General Dynamics Armament
Systems, Inc. and General Dynamics Defense Systems, Inc.,
General Dynamics Advanced Technology Systems, Inc. and General
Dynamics Information Systems.
(b) The amount of Matched Employee Contributions, Matched Salary
Deferrals and Company Contributions actually credited to the
benefit of the Member under the various Defined Contribution
(c) An amount equivalent to an investment return on any balance in
the account as of the close of the immediately preceding
accounting date. The amount added shall be the same as the
investment return actually recognized on each fund or investment
in the Defined Contribution Plan that the balances in this Plan
would have earned if the balances had been invested in the
Defined Contribution Plan under the investment options actually
selected by the Member thereunder.
No amount shall be credited to any account maintained pursuant to this
Section 2: (1) for any pay period in which a Member does not contribute
the maximum amount of Employee Contributions or make the maximum Salary
Deferral permitted under the various Defined Contributions Plans or (2)
with respect to any salary deferrals or contributions which a Member
made (or could have made but for the limitations described in paragraph
2.1) if the Company contributions are not made to the Defined
Contribution Plan with respect to such Member deferrals and
contributions. An "accounting date" is each day on which the financial
markets and the federal banking wire system are open for business.
2.3 Payment and Nonforfeitability of Benefits and Maintenance of Accounts.
All benefits accrued under this Section 2 shall be paid under the same
conditions, rules and restrictions as would apply to the benefits as if
they were provided under a Defined Contribution Plan except as provided
below or elsewhere in this Plan:
(a) If a Member makes an investment fund transfer or investment
option change pursuant to the provisions of a DC Plan, the
identical investment fund transfer or investment option change
shall be performed in this Plan but no such transfer or change
shall be permitted in this Plan unless made in the DC Plan.
Notwithstanding the foregoing, the Corporation may, in its
discretion, approve transfers or changes in this Plan where no
transfer or change is possible in the DC Plan due to loans and
(b) Members shall not be entitled to receive distributions or make
withdrawals of any portion of their account balances while
employed by the Corporation or any of its Subsidiaries.
(c) Upon separation from service with the Corporation and its
Subsidiaries, the entire nonforfeitable balance of a Member's
account (valued as of the accounting date coincident with or
immediately following the date of separation) shall be paid to
the Member within 90 days following the end of the month in
which the separation occurred. However, any Member who retires
from the service of the Corporation after attaining age 55 may,
by a written statement filed with the Corporation within 60 days
before the separation occurred, irrevocably elect to defer
commencement of such payments until a specific date which may be
as late as the Member's attaining age 70 1/2. If deferral is
elected, the Member may choose to have the account balance
subsequently paid in a lump sum or in annual installments (which
will commence as soon as practicable after the conclusion of the
deferral period and will be payable annually thereafter) not to
exceed 15 installments. To the extent consistent with the above
requirements, deferrals and installment payments of
distributions shall be governed by the provisions of the DC Plan
covering deferrals of distribution and installment payments.
(e) All account balances shall be paid in cash. No Member shall have
any right to receive payment in any other form.
(f) The provisions of the DC Plan concerning Benefit Limitations and
Top Heavy Conditions shall not apply to benefits accrued under
(g) Upon the death of a Member prior to the entire balance of the
Member's account having been paid, the entire unpaid balance
shall be payable to the Member's beneficiary as determined under
the DC Plan in which the Member was last actually participating.
The Corporation shall promulgate such other additional rules and
procedures governing the operation of this Plan as it may, from time to
time and in its best judgment, determine are necessary.
SPECIAL SUPPLEMENTAL BENEFITS
3.1 Participation. Recognizing the need to make special retirement and other
compensation or employee benefit provisions for certain Employees, the
Corporation may, from time to time and in its best judgment, designate
such other groups of select management or highly compensated employees
as being eligible to receive benefits under this Plan. Any such
employees or groups of employees will be described in Special Appendices
attached to this Plan.
3.2 Benefits. Such Supplemental Benefits may be provided only to select
management or highly compensated employees in such amounts as the
Corporation determines are appropriate.
4.1 Construction. In the construction of the Plan the masculine shall
include the feminine and the singular the plural in all cases where such
meanings would be appropriate. This Plan shall be construed, governed,
regulated and administered according to the laws of the State of
4.2 Employment. Participation in the Plan shall not give any Employee the
right to be retained in the employ of the Corporation or its
Subsidiaries, or upon dismissal or upon his voluntary termination of
employment, to have any right, legal or equitable, under the Plan or any
portion thereof, except as expressly granted by the Plan.
4.3 Nonalienability of Benefits. No benefit under the Plan 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 Plan.
4.4 Facility of Payment. If any recipient of benefits is, in the judgment of
the Corporation, legally incapable of personally receiving and giving a
valid receipt for any payment due him under the Plan, the Corporation
may, unless and until claims shall have been made by a duly appointed
guardian or committee of such person, make such payment or any part
thereof to such person's spouse, children or other legal entity deemed
by the Corporation to have incurred expenses or assumed responsibility
for the expenses of such person. Any payment so made shall be a complete
discharge of any liability under the Plan for such payment.
4.5 Obligation to Pay Amounts Hereunder.
(a) No trust fund, escrow account or other segregation of assets
need be established or made by the Corporation to guarantee,
secure or assure the payment of any amount payable hereunder.
The Corporation's obligation to make payments pursuant to this
Plan shall constitute only a general contractual liability of
the Corporation to individuals entitled to benefits hereunder
and other actual or possible payees hereunder in accordance with
the terms hereof. Payments hereunder shall be made only from
such funds of the Corporation as it shall determine, and no
individual entitled to benefits hereunder shall have any
interest in any particular asset of the Corporation by reason of
the existence of this Plan. It is expressly understood as a
condition for receipt of any benefits under
this Plan, that the Corporation is not obligated to create a
trust fund or escrow account, or to segregate any asset of the
Corporation in any fashion.
(b) The Corporation may, in its sole discretion, establish
segregated funds, escrow accounts or trust funds whose primary
purpose would be for the provision of benefits under this Plan.
If such funds or accounts are established, however, individuals
entitled to benefits hereunder shall not have any identifiable
interest in any such funds or accounts nor shall such
individuals be entitled to any preference or priority with
respect to the assets of such funds or accounts. These funds and
accounts would still be available to judgment creditors of the
Corporation and to all creditors in the event of the
Corporation's insolvency or bankruptcy.
4.6 Administration. The Plan shall be administered by the Company. The
Company shall have the discretionary authority to construe and interpret
the provisions of the Plan and make factual determinations thereunder,
including the power to determine the rights or eligibility of employees
or Members and any other persons, and the amounts of their benefits
under the Plan, and to remedy ambiguities, inconsistencies or omissions,
and such determinations shall be binding on all parties.
4.7 Claims Appeal Procedure. Upon receipt of a claim for benefits under the
Plan, the Company shall notify the Member, the Member's beneficiary or
authorized representative of any action taken within 90 days of
receiving the claim. If the claim is denied, the denial shall be set
forth in writing and shall include the specific reasons for the denial,
with reference to pertinent Plan provisions on which the denial is
based, and shall describe the procedure for perfecting the claim, or for
requesting a review of the denial. Within 60 days after receiving a
notification of denial of a claim, a Member or the Member's beneficiary
may request that the Company make a full and fair review of the denial.
In connection with this request, the Member may review pertinent
documents and submit issues or comments in writing. The Company will
make a final decision on the claim within 120 days of the request for
review. Any decision made by the Company in good faith shall be final
and binding on all parties.
AMENDMENT AND TERMINATION OF THE PLAN
5.1 Amendment. The Chairman of the Board of Directors of the Corporation
reserves the right to modify or amend this Plan in whole or in part,
effective as of any specified date; provided, however, that the Chairman
shall have no authority to modify or amend the Plan to:
(a) reduce any benefit accrued hereunder based on service and
compensation to the date of amendment unless such action is
necessary to prevent this Plan from being subject to any
provision of Title 1, Subtitle B, Parts 2, 3 or 4 of ERISA;
(b) permit the accrual, holding or payment of actual shares of
General Dynamics Common Stock under the Plan.
(a) The Chairman of the Board of Directors of the Corporation
reserves the right to terminate this Plan, in whole or in part.
This Plan shall be automatically terminated upon a dissolution
of the Corporation (but not upon a merger, consolidation,
reorganization, recapitalization or acquisition of a controlling
interest in the voting stock of the Corporation by another);
upon the Corporation being legally adjudicated bankrupt; upon
the appointment of a receiver or trustee in bankruptcy with
respect to the Corporation's assets and business if such
appointment is not set aside within ninety (90) days thereafter;
or upon the making by the Corporation of an assignment for the
benefit of creditors.
(b) Upon a termination of this Plan no additional Employees shall
become entitled to benefits hereunder; all benefits accrued
through the date of termination will become immediately
nonforfeitable as to each Member; no additional benefits (other
than the allocation of "income" or "earnings" on the Member's
contributions) shall be accrued hereunder for subsequent payment
and all benefits accrued to date shall be distributed to the
Members as soon as practicable.