-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RBnofu6xXcGSxpWDq5x6poPiraYmK0J1D3ryrpJqoH2rgMX4xtswOQ/b58lh6Mwu divlmy0zIQO9q4sI53aVcQ== 0000950133-98-002427.txt : 19980629 0000950133-98-002427.hdr.sgml : 19980629 ACCESSION NUMBER: 0000950133-98-002427 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL DYNAMICS CORP CENTRAL INDEX KEY: 0000040533 STANDARD INDUSTRIAL CLASSIFICATION: SHIP & BOAT BUILDING & REPAIRING [3730] IRS NUMBER: 131673581 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-03671 FILM NUMBER: 98655025 BUSINESS ADDRESS: STREET 1: 3190 FAIRVIEW PARK DRIVE CITY: FALLS CHURCH STATE: VA ZIP: 22042 BUSINESS PHONE: 7038763375 MAIL ADDRESS: STREET 1: 3190 FAIRVIEW PARK DR CITY: FALLS CHURCH STATE: VA ZIP: 22042 10-K/A 1 GENERAL DYNAMICS CORPORATION FORM 10-K, AMEND. #1 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 10-K/A AMENDMENT TO APPLICATION ON REPORT FILED PURSUANT TO SECTION 12, 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 [GENERAL DYNAMICS CORPORATION LOGO] 3190 Fairview Park Drive Falls Church, Virginia 22042-4253 AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its 1997 Annual Report on Form 10-K as set forth in the pages attached hereto: Index to Exhibits Exhibit 99D Annual Report on Form 11-K for the General Dynamics Corporation Savings and Stock Investment Plan Exhibit 99E Annual Report on Form 11-K for the General Dynamics Corporation Hourly Employees Savings and Stock Investment Plan Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned and thereunto duly authorized. GENERAL DYNAMICS CORPORATION (Registrant) By /s/ D. A. Savner --------------------------- D. A. Savner Secretary Date June 26, 1998 2 INDEX TO EXHIBITS
Note Exhibit Number Number Description - ------ ------ ----------- (5) 3-1A --Restated Certificate of Incorporation, effective May 21, 1991 3-2D --Bylaws as amended effective October 1, 1997 (11) 4 --Letter re agreement to furnish copy of indenture (1) 10-1A --Amendment of Mining Leases between American National Bank and Trust of Chicago, Trustee, and La Salle National Bank, Trustee, to Freeman Coal Mining Corporation, dated January 1, 1960 (1) 10-1B --Amendatory Agreement between Freeman United Coal Mining Company and American National Bank and Trust Company, as Trustee, and La Salle National Bank, as Trustee, dated January 1, 1975 (3) 10-6A --General Dynamics Corporation Incentive Compensation Plan adopted February 3, 1988, approved by the shareholders on May 4, 1988 (4) 10-6B --General Dynamics Corporation Incentive Compensation Plan (as amended), approved by shareholders on May 1, 1991 (4) 10-7E --Facilities Contract DAAE07-90-E-A001 dated June 24, 1990, between General Dynamics Land Systems, Inc. and the United States relating to government-owned facilities and equipment at the Lima Army Tank Plant, Lima, Ohio (7) 10-8B --General Dynamics Corporation Retirement Plan for Directors adopted March 6, 1986, as amended May 5, 1993 (11) 10-14A --Lease Agreement dated December 20, 1996, between Electric Boat Corporation and the Rhode Island Economic Development Corporation (6) 10-18 --Employment Agreement between the company and James R. Mellor dated as of March 17, 1993 (9) 10-18A --Amendment to employment agreement between the company and James R. Mellor dated as of October 3, 1995 (11) 10-18B --Amendment to employment agreement between the company and James R. Mellor dated as of November 5, 1996 (6) 10-22 --Form of Agreement entered into in 1993 between the company and Corporate Officers who were being retained in employment with the company (8) 10-24 --Asset Purchase Agreement, dated August 17, 1995, between the company and Bath Iron Works Corporation (9) 10-25 --Lease Agreement dated January 14, 1982, between Bath Iron Works Corporation and the City of Portland, Maine, relating to pier facilities in the Portland, Maine harbor (9) 10-26 --Lease Agreement dated January 14, 1982, between Bath Iron Works Corporation and the State of Maine, relating to a dry dock facility in the Portland, Maine harbor (10) 10-28 --Asset Purchase and Sale Agreement, dated November 6, 1996, as amended December 20, 1996, between the company and Lockheed Martin Corporation (11) 10-29 --Employment agreement between the company and Nicholas D. Chabraja dated November 12, 1996 (11) 10-30 --General Dynamics Corporation Incentive Compensation Plan adopted February 5, 1997, approved by shareholders on May 7, 1997 10-31 --Retirement Benefit Agreement between the company and Gordon R. England dated February 14, 1997 10-32 --Credit Enhancement Agreement between Bath Iron Works Corporation and the City of Bath, Maine dated September 19, 1997, relating to the development program of facilities in Bath, Maine 10-33 --Retirement Benefit Agreement between the company and Michael J. Mancuso dated March 6, 1998 10-34 --Consulting agreement between the company and Paul G. Kaminski dated August 18, 1997 10-35 --Salary and benefit continuation agreement between the company and Michael W. Wynne dated February 7, 1997
3 INDEX TO EXHIBITS
Note Exhibit Number Number Description - ------ ------ ----------- 13 --1997 Shareholder Report (pages 18 through 40) 21 --Subsidiaries 23 --Consent of Independent Public Accountants 24 --Power of Attorney of the Board of Directors 27 --Financial Data Schedule 27A --Restated Financial Data Schedule for the nine months ended September 28, 1997 27B --Restated Financial Data Schedule for the six months ended June 29, 1997 27C --Restated Financial Data Schedule for the three months ended March 30, 1997 27D --Restated Financial Data Schedule for the year ended December 31, 1996 27E --Amended and Restated Financial Data Schedule for the nine months ended September 29, 1996 27F --Restated Financial Data Schedule for the six months ended June 30, 1996 27G --Restated Financial Data Schedule for the three months ended March 31, 1996 27H --Restated Financial Data Schedule for the year ended December 31, 1995 99D --1997 Annual Report on Form 11-K for the General Dynamics Corporation Savings and Stock Investment Plan 99E --1997 Annual Report on Form 11-K for the General Dynamics Corporation Hourly Employees Savings and Stock Investment Plan
NOTES (1) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1980, and filed with the Commission March 31, 1981, and incorporated herein by reference. (2) Not used. (3) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1987, and filed with the Commission March 17, 1988, and incorporated herein by reference. (4) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1990, and filed with the Commission March 29, 1991, and incorporated herein by reference. (5) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1991, and filed with the Commission March 26, 1992, and incorporated herein by reference. (6) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1992, and filed with the Commission March 30, 1993, and incorporated herein by reference. (7) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1994, and filed with the Commission March 9, 1995, and incorporated herein by reference. (8) Filed as an exhibit to the company's current report on Form 8-K filed with the Commission September 28, 1995, and incorporated herein by reference. (9) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1995, and filed with the Commission March 21, 1996, and incorporated herein by reference. (10) Filed as an exhibit to the company's current report on Form 8-K filed with the Commission January 15, 1997, and incorporated herein by reference. (11) Filed as an exhibit to the company's annual report on Form 10-K for the year ending December 31, 1996, and filed with the Commission March 21, 1997, and incorporated herein by reference. EX-99.D 2 REPORT ON FORM 11-K/ STOCK INVESTMENT PLAN 1 - -------------------------------------------------------------------------------- ANNUAL EXHIBIT 99D TO ANNUAL REPORT ON FORM 10-K OF GENERAL DYNAMICS CORPORATION SEC FILE NO. 1-3671 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 19 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED December 31, 1997 A. Full title of the Plan and the address of the Plan, if different from the issuer named below: GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN B. Name of the issuer of the securities held pursuant to the Plan and the address of the principal executive office: GENERAL DYNAMICS CORPORATION 3190 FAIRVIEW PARK DRIVE FALLS CHURCH, VIRGINIA 22042-4253 2 GENERAL DYNAMICS CORPORATION INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
Pages of this Exhibit 99D (a) FINANCIAL STATEMENTS Report of Independent Public Accountants 2 Statements of Net Assets Available for Benefits, As of December 31, 1997 and 1996 3-4 Statement of Changes in Net Assets Available for Benefits, For the Year Ended December 31, 1997 5 Notes to Financial Statements 6-10 Schedule I - Statement of Investments In Master Trust Funds 11-13 Schedule II - Schedule of Loans or Fixed Income Obligations 14-20 (b) SIGNATURE 21 (c) EXHIBITS Consent of Independent Public Accountants 22
3 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996 TOGETHER WITH AUDITORS' REPORT -1- 4 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To General Dynamics Corporation: We have audited the accompanying statements of net assets available for benefits of the General Dynamics Corporation Savings and Stock Investment Plan as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1997. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the General Dynamics Corporation Savings and Stock Investment Plan as of December 31, 1997 and 1996, and the changes in its net assets available for benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental statement of investments in master trust funds (schedule I) and schedule of loans or fixed income obligations (schedule II), are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information are the responsibility of the Plan's management. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Washington, D.C. June 15, 1998 -2- 5 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1997
STOCK FIXED INCOME BOND INDEX TOTAL FUND FUND FUND ----------------- --------------- ----------------- ------------------ ASSETS: Investment in Master Trust $ 2,236,325,051 $ 455,779,945 $ 1,060,772,264 $ 95,296,407 Loans receivable 18,656,039 - - - ----------------- --------------- ----------------- ------------------ Total assets 2,254,981,090 455,779,945 1,060,772,264 95,296,407 ----------------- --------------- ----------------- ------------------ LIABILITIES: Fund transfers - 489,669 (675,999) (61,797) Amounts payable to BIW Hourly Plan (Note 10) 1,496,305 - - - Amounts payable to General Dynamics Corporation 93,915 - - - Administrative fees payable 1,141,512 61,066 144,372 17,126 ----------------- --------------- ----------------- ------------------ Total liabilities 2,731,732 550,735 (531,627) (44,671) ----------------- --------------- ----------------- ------------------ Net assets available for benefits $ 2,252,249,358 $ 455,229,210 $ 1,061,303,891 $ 95,341,078 ================= =============== ================= ================== BALANCED S&P 500 STOCK INTERNATIONAL SMALL CAP FUND INDEX FUND INDEX FUND INDEX FUND -------------- ---------------- ------------- --------------- ASSETS: Investment in Master Trust $ 39,550,914 $ 537,364,113 $ 8,975,722 $ 35,352,123 Loans receivable - - - - -------------- ---------------- ------------- --------------- Total assets 39,550,914 537,364,113 8,975,722 35,352,123 -------------- ---------------- ------------- --------------- LIABILITIES: Fund transfers 144,953 (30,018) 370,971 (237,779) Amounts payable to BIW Hourly Plan (Note 10) - - - - Amounts payable to General Dynamics Corporation - - - - Administrative fees payable 8,816 71,952 1,565 6,314 -------------- ---------------- ------------- --------------- Total liabilities 153,769 41,934 372,536 (231,465) -------------- ---------------- ------------- --------------- Net assets available for benefits $ 39,397,145 $ 537,322,179 $ 8,603,186 $ 35,583,588 ============== ================ ============= =============== DISTRIBUTION LOAN ACCOUNT FUND -------------- -------------- ASSETS: Investment in Master Trust $ 3,233,563 $ - Loans receivable - 18,656,039 -------------- -------------- Total assets 3,233,563 18,656,039 -------------- -------------- LIABILITIES: Fund transfers - - Amounts payable to BIW Hourly Plan (Note 10) 1,496,305 - Amounts payable to General Dynamics Corporation 93,915 - Administrative fees payable 830,301 - -------------- -------------- Total liabilities 2,420,521 - -------------- -------------- Net assets available for benefits $ 813,042 $ 18,656,039 ============== ==============
The accompanying notes are an integral part of this financial statement. -3- 6 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1996
STOCK GOVERNMENT TOTAL FUND BOND FUND ----------------- --------------- -------------- ASSETS: Investment in Master Trust $ 2,096,063,730 $ 370,474,739 $ 97,703,893 Loans receivable (payable) 15,130,746 59,405 (90,380) ----------------- --------------- -------------- Total assets 2,111,194,476 370,534,144 97,613,513 ----------------- --------------- -------------- LIABILITIES: Fund transfers (3,008) 2,205,381 659,735 Amounts payable to (receivable from) General Dynamics Corporation 18,232 30,519 1,656 Administrative fees payable 189,656 17,557 4,553 ----------------- --------------- -------------- Total liabilities 204,880 2,253,457 665,944 ----------------- --------------- -------------- Net assets available for benefits $ 2,110,989,596 $ 368,280,687 $ 96,947,569 ================= =============== ============== DIVERSIFIED FIXED INCOME SPECIAL DISTRIBUTION FUND FUND FUND ----------------- ------------------- --------------- ASSETS: Investment in Master Trust $ 352,149,275 $ 1,255,348,014 $ 20,387,809 Loans receivable (payable) (182,096) (937,500) (23,697) ----------------- ------------------- --------------- Total assets 351,967,179 1,254,410,514 20,364,112 ----------------- ------------------- --------------- LIABILITIES: Fund transfers (1,286,389) (1,686,422) 104,687 Amounts payable to (receivable from) General Dynamics Corporation (4,124) (9,819) - Administrative fees payable 109,146 55,911 2,489 ----------------- ------------------- --------------- Total liabilities (1,181,367) (1,640,330) 107,176 ----------------- ------------------- --------------- Net assets available for benefits $ 353,148,546 $ 1,256,050,844 $ 20,256,936 ================= =================== =============== LOAN FUND -------------- ASSETS: Investment in Master Trust $ - Loans receivable (payable) 16,305,014 -------------- Total assets 16,305,014 -------------- LIABILITIES: Fund transfers - Amounts payable to (receivable from) General Dynamics Corporation - Administrative fees payable - -------------- Total liabilities - -------------- Net assets available for benefits $ 16,305,014 ==============
The accompanying notes are an integral part of this financial statement. -4- 7 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997
STOCK FIXED INCOME BOND INDEX TOTAL FUND FUND FUND ---------------- --------------- ----------------- --------------- Participation in income (loss) of Master Trust $ 262,996,369 $ 89,461,448 $ 43,245,430 $ 6,999,741 ---------------- --------------- ----------------- --------------- ADD (DEDUCT): Rollover contributions 4,122,849 1,341,127 624,871 189,447 Contributions by participants 34,873,142 21,600,043 5,797,806 535,383 Contributions by General Dynamics Corporation 22,272,622 22,273,917 271 - Loan repayments 1,227,261 5,821,761 2,164,194 167,556 Loans issued - (1,195,402) (5,550,957) (340,615) Transfers among funds - (14,153,376) (119,750,051) 92,493,574 Distributions to withdrawn participants (216,889,828) (35,001,428) (140,581,943) (4,594,719) Plan expenses (3,996,252) (530,876) (1,924,913) (109,291) BIW Salary Plan merger 38,565,565 - 20,711,648 - Other (1,911,966) (2,668,691) 516,691 2 ---------------- --------------- ----------------- --------------- Net increase (decrease) 141,259,762 86,948,523 (194,746,953) 95,341,078 ---------------- --------------- ----------------- --------------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 2,110,989,596 368,280,687 1,256,050,844 - ---------------- --------------- ----------------- --------------- End of year $ 2,252,249,358 $ 455,229,210 $ 1,061,303,891 $ 95,341,078 ================ =============== ================= =============== BALANCED S&P 500 STOCK INTERNATIONAL SMALL CAP LOAN FUND INDEX FUND INDEX FUND INDEX FUND FUND -------------- ---------------- --------------- -------------- -------------- Participation in income (loss) of Master Trust $ 1,732,459 $ 68,478,362 $ (719,613) $ 1,782,839 $ - -------------- ---------------- --------------- -------------- -------------- ADD (DEDUCT): Rollover contributions 277,812 880,361 36,870 230,222 - Contributions by participants 467,993 3,662,363 99,436 231,147 - Contributions by General Dynamics Corporation - - - - - Loan repayments 46,795 627,823 9,665 19,599 (8,175,704) Loans issued (268,794) (3,071,265) (28,099) (141,311) 11,293,081 Transfers among funds 35,029,463 486,831,153 9,300,187 33,813,640 - Distributions to withdrawn participants (739,233) (19,727,320) (87,217) (325,779) (765,857) Plan expenses (43,796) (375,722) (8,043) (26,769) - BIW Salary Plan merger 2,894,446 - - - - Other - 16,424 - - (495) -------------- ---------------- --------------- -------------- -------------- Net increase (decrease) 39,397,145 537,322,179 8,603,186 35,583,588 2,351,025 -------------- ---------------- --------------- -------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year - - - - 16,305,014 -------------- ---------------- --------------- -------------- -------------- End of year $ 39,397,145 $ 537,322,179 $ 8,603,186 $ 35,583,588 $ 18,656,039 ============== ================ =============== ============== ============== GOVERNMENT DIVERSIFIED SPECIAL DISTRIBUTION DISTRIBUTION BOND FUND FUND FUND ACCOUNT ------------- -------------- ------------------- --------------- Participation in income (loss) of Master Trust $ 2,716,258 $ 49,328,708 $ 268,450 $ (297,713) ------------- -------------- ------------------- --------------- ADD (DEDUCT): Rollover contributions 160,721 382,504 - (1,086) Contributions by participants 390,870 2,118,463 - (30,362) Contributions by General Dynamics Corporation (1,503) (63) - - Loan repayments 130,962 410,772 - 3,838 Loans issued (137,173) (517,391) (42,074) - Transfers among funds (96,834,214) (406,904,581) (19,825,795) - Distributions to withdrawn participants (3,322,906) (12,143,455) (654,814) 1,054,843 Plan expenses (60,462) (913,677) (2,703) - BIW Salary Plan merger - 14,959,471 - - Other 9,878 130,703 - 83,522 ------------- -------------- ------------------- --------------- Net increase (decrease) (96,947,569) (353,148,546) (20,256,936) 813,042 ------------- -------------- ------------------- --------------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 96,947,569 353,148,546 20,256,936 - ------------- -------------- ------------------- --------------- End of year $ - $ - $ - $ 813,042 ============= ============== =================== ===============
The accompanying notes are an integral part of this financial statement. -5- 8 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996 1. The General Dynamics Corporation Savings and Stock Investment Plan (the "Plan") is a defined contribution plan covering eligible salaried employees of General Dynamics Corporation (the "Company"). The following is a brief description of the Plan provided for general information purposes. Participants should refer to the Plan agreement for more complete information. Generally, a participant may contribute from 1% to 10% of the first $25,000 of base earnings and 1% to 6% of base earnings in excess of $25,000. In addition, non-highly compensated participants, as determined by the Plan Administrator, may also contribute another 1% to 4% of base earnings on an unmatched basis. Participants at Bath Iron Works, Armament Systems, Defense Systems and Advanced Technology Systems may contribute 1% to 15% of their salary on a pre-tax basis. Each participant shall direct his contributions to be invested in one percent increments into all funds. Participants can change their investment elections daily and can make an unlimited number of investment election changes each year. All Company matching contributions to the Plan are invested in Company common stock. Generally, participants that are 100 percent invested in the General Dynamics Stock Fund receive a 100 percent Company matching contribution in Company common stock. Participants that are less than 100 percent invested in the General Dynamics Stock Fund receive a 50 percent Company matching contribution in Company common stock. The matching contributions vary from 50% to 100% for participants at Bath Iron Works, Armament Systems, Defense Systems and Advanced Technology Systems. Participants are eligible to participate in the Plan upon hire, and their contributions are always 100 percent vested. Company matching contributions are fully vested upon five years of service. Contributions invested in the General Dynamics Stock Fund must be maintained in that fund for 5 years before becoming eligible for transfer to any other fund. Therefore, a portion of the balance in the General Dynamics Stock Fund represents non-participant-directed investments due to the match. With the exception of the General Dynamics Stock Fund, all other investment funds are completely participant-directed. The Plan permits active participants and employed inactive participants to borrow up to 50% of the vested amount in their accounts (as limited by the Plan) and to repay the loan by regular payroll deductions over a period of up to five years. Loans are issued at prime rate of interest. -6- 9 In the event the Plan is terminated, each participant will automatically be vested in the undistributed Company contributions. Each participant will receive payments based on the specific dollar amounts and shares of Company stock in his account. 2. During June 1997, the Company extended the investment options for plan participants. Two of the options offered in 1996 remain available to participants: the General Dynamics Stock Fund and the Fixed Income Fund. The five options added in 1997 include: Bond Index Fund, Balanced Fund, S&P 500 Stock Index Fund, International Index Fund and Small Cap Index Fund. These investment options will offer participants the opportunity to invest in a broader range on the risk/return spectrum for actively traded securities. According to the Plan documents, the seven funds may hold the following types of investments: a) General Dynamics Stock Fund - The fund invests only in common stock of the Company. b) Fixed Income Fund - The fund invests in General Account and Separate Account Guaranteed Investment Contracts ("GICs"). General account GICs are deposits with an insurance company that earn a contractually specified rate of return over a defined period. These contracts are secured by the issuer's general account (a broadly diversified portfolio of fixed income assets) and the net worth of the insurance company. Separate account GICs are deposits with an insurance company, but are invested in a separate portfolio of high-quality securities. The GICs are not guaranteed by General Dynamics Corporation or any government agency. c) Bond Index Fund - The fund invests in government, corporate, mortgage-backed and asset-backed securities. The fund also invests in high-quality bonds, as defined. d) Balanced Fund - The fund is a mixed portfolio of commingled stocks and bond funds. The fund is made up of international equities, U.S. large cap equities, fixed income securities and U.S. small cap equities. e) S&P 500 Stock Index Fund - The fund invests in all 500 U.S. common stocks in the S&P 500 Index in proportion to their weighting in the Index. It may also hold 2% to 5% of its value in S&P 500 futures contracts. f) International Index Fund - The fund invests in over 1,000 stocks in major markets outside the United States and Canada. Investments are made in all stocks in the MSCI EAFE Index in approximate proportion to the weighting in the Index. g) Small Cap Index Fund - The fund attempts to invest in all 2,000 stocks in the Russell 2000 Index in proportion to their weighting in the Index. The Russell Index represents the smallest two-thirds of the 3,000 largest U.S. companies. It may also hold 2% to 5% of its value in Russell 2000 Index futures contracts. -7- 10 All of the above funds may hold a small cash balance for purposes of liquidity and expense control that is maintained in The Northern Trust Company Collective Short-Term Investment Fund. 3. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions from net assets available for benefits during the reporting period. Actual results could differ from those estimates. 4. The accompanying financial statements are prepared on the accrual basis of accounting. Certain reclassifications have been made to balances on the December 31, 1996 statement of net assets available for benefits to conform with the current year presentation. 5. The Company has received a determination from the Internal Revenue Service that the Plan, including all amendments through June 20, 1994, is a qualified profit sharing plan under Section 401 (a) of the Internal Revenue Code. The trust formed thereunder is exempt from Federal income tax under Section 501 (a). The Plan administrator and Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax exempt as of the financial statement date. 6. The Plan's investments are in the General Dynamics Corporation Savings and Stock Investment Plan Master Trust (the "Master Trust"), which was established for the investment of assets of the Plan and the Hourly Employees Savings and Stock Investment Plan (the "Plans"). Each participating plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by The Northern Trust Company ("Trustee"). At December 31, 1997 and 1996, the Plan's interest in the net assets of the Master Trust was approximately 83.2% and 82.5%, respectively. Net assets and net participation in the income of the Master Trust are allocated to the Plans according to their percentage interest in various funds included in the Master Trust. The following table presents the reported value of investments for the Master Trust.
December 31, ---------------------------------- 1997 1996 -------------- ------------- General Dynamics Common Stock $ 513,911,736 $ 419,069,977 Investments in registered investment companies 901,907,398 - U.S. government bonds and other securities - 589,912,139 Cash and cash equivalents 14,594,902 36,819,637 Loans receivable 22,839,462 16,401,791 Guaranteed investment contracts 1,255,533,974 1,496,248,785 -------------- ------------- Total $2,708,787,472 $2,558,452,329 ============== ==============
-8- 11 Investment income for the Master Trust is as follows:
Year Ended December 31, 1997 -------------------- Investment Income: Dividends $ 11,294,041 Interest 110,306,765 Net realized and unrealized gain on assets 192,193,228 -------------------- $ 313,794,034 ====================
Administrative expenses are primarily paid by the Plan, although certain administrative functions are performed by employees of the Company. Although no costs were reimbursed by the Company in 1997, the Plan document provides that these costs may be reimbursed by the Company. 7. In accordance with generally accepted accounting principles, amounts allocated to accounts of participants who have elected to withdraw from the Plan but have not yet been paid as of year end are not reported as liabilities on the Statements of Net Assets Available for Benefits. However, the Department of Labor requires that these amounts be reported as liabilities on Form 5500. At December 31, 1997 and 1996, amounts payable on withdrawals and distributions were $370,328 and $30,544,627, respectively. In addition, on the statement of changes in net assets available for benefits, 1997 distributions to withdrawn participants would have been $186,715,437 instead of $216,889,828 if the December 31 amounts payable on withdrawals and distributions had been included. 8. Most investments held by the Master Trust are recorded at quoted market value, as stated on public exchanges as of December 31, 1997 and 1996. The Company values the GICs in the Fixed Income Fund in accordance with AICPA Statement of Position No. 94-4, "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans." As of December 31, 1997, the GICs included in the Master Trust are reported at contract value because they have been determined to be fully benefit responsive. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuers or otherwise. As of December 31, 1996, the GICs were included in the financial statements of the Master Trust at fair value as certain provisions of the Plans restricted the benefit-responsiveness of the GICs. These provisions were changed during 1997. The fair value of the GICs at December 31, 1997 was approximately $1.32 billion. The average yield and crediting interest rates ranged from 5.62 percent to 10.25 for 1997. 9. In April 1997, the assets of the Bath Iron Works Corporation Tax Deferred Savings Plan for Salaried Employees merged into the Savings and Stock Investment Plan and the related Master Trust. -9- 12 10. During 1997, $1,496,305 of assets were transferred to the Trust in error by Chase Manhattan Bank, trustee for the Bath Iron Works ("BIW") Plans. The amount represents an asset of the Bath Iron Works Hourly Plan. Therefore, the amount has been appropriately included as a liability of the Trust on the Statement of Net Assets Available for Benefits as of December 31, 1997. -10- 13 Schedule I Page 1 of 3 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS AS OF DECEMBER 31, 1997
QUOTED MARKET/CONTRACT COST VALUE ------------------ ------------------ GENERAL DYNAMICS STOCK FUND: Investment in common stock of General Dynamics Corporation * $ 184,594,747 $ 513,911,736 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 3,501,934 3,501,934 ------------------ ------------------ Total $ 188,096,681 $ 517,413,670 ================== ================== PROPORTIONATE INTEREST $ 455,779,945 ================== FIXED INCOME FUND: Investment in the Fixed Income Fund $ 1,255,533,974 $ 1,255,533,974 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 7,575,428 7,575,428 ------------------ ------------------ Total $ 1,263,109,402 $ 1,263,109,402 ================== ================== PROPORTIONATE INTEREST $ 1,060,772,264 ================== BOND INDEX FUND: Investment in the Bond Index Fund $ 144,116,679 $ 156,111,648 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 283,267 283,267 ------------------ ------------------ Total $ 144,399,946 $ 156,394,915 ================== ================== PROPORTIONATE INTEREST $ 95,296,407 ==================
* denotes party-in-interest -11- The accompanying notes are an integral part of this schedule. 14 Schedule I Page 2 of 3 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS AS OF DECEMBER 31, 1997
QUOTED MARKET/CONTRACT COST VALUE ------------------ ------------------ BALANCED FUND: Investment in the Balanced Fund $ 44,433,401 $ 46,302,809 ================= ===================== PROPORTIONATE INTEREST $ 39,550,914 ===================== S&P 500 STOCK INDEX FUND: Investment in the S&P 500 Stock Index Fund $ 516,044,858 $ 647,682,968 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 710 710 ----------------- --------------------- Total 516,045,568 647,683,678 ================= ===================== PROPORTIONATE INTEREST $ 537,364,113 ===================== INTERNATIONAL INDEX FUND: Investment in the International Index Fund $ 10,554,112 $ 10,030,495 ================= ===================== PROPORTIONATE INTEREST $ 8,975,722 ===================== SMALL CAP INDEX FUND: Investment in the Small Cap Index Fund $ 39,754,999 $ 41,779,478 ================= ===================== PROPORTIONATE INTEREST $ 35,352,123 ===================== DISTRIBUTION ACCOUNT: Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * $ 3,233,563 $ 3,233,563 ================= ===================== PROPORTIONATE INTEREST $ 3,233,563 =====================
* denotes party-in-interest -12- The accompanying notes are an integral part of this schedule. 15 Schedule I Page 3 of 3 GENERAL DYNAMICS CORPORATION SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS AS OF DECEMBER 31, 1997
QUOTED MARKET/CONTRACT COST VALUE ------------------ ------------------ LOAN FUND: Loans Receivable $ 22,839,462 $ 22,839,462 ================= =================== PORPORTIONATE INTEREST $ 18,656,039 ===================
-13- The accompanying notes are an integral part of this schedule. 16 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------- Participant Loan $4,000.00 $0.00 $0.00 $3,213.80 Participant Loan $25,000.00 $2,916.69 $652.75 $19,999.96 Participant Loan $5,000.00 $0.00 $0.00 $5,000.00 Participant Loan $20,000.00 $2,265.11 $318.24 $2,318.10 Participant Loan $7,000.00 $632.35 $112.02 $2,634.21 Participant Loan $9,800.00 $1,262.01 $209.11 $1,351.04 Participant Loan $7,600.00 $686.52 $121.65 $1,846.68 Participant Loan $6,000.00 $176.41 $44.36 $5,323.59
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - ----------------------------------------------------------------------- Date of making: 6/30/94 $2,547.40 $331.80 Maturity: 5/98 Rate: 6.25% Date of making: 8/31/96 $1,250.01 $279.75 Maturity: 7/02 Rate: 8.25% Date of making: 8/1/97 $166.68 $38.46 Maturity: 7/02 Rate: 8.50% Date of making: 12/31/93 $1,484.92 $159.03 Maturity: 11/97 Rate: 6.0% Date of making: 5/31/94 $417.68 $56.01 Maturity: 4/99 Rate: 6.0% Date of making: 5/31/93 $534.74 $78.21 Maturity: 4/98 Rate: 6.0% Date of making: 9/30/93 $453.51 $60.78 Maturity: 8/98 Rate: 6.0% Date of making: 9/30/96 $823.59 $133.08 Maturity: 8/00 Rate: 8.25%
The accompanying notes are an integral part of this schedule. - 14 - 17 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------ Participant Loan $20,000.00 $1,000.02 $426.61 $5,999.78 Participant Loan $2,200.00 $15.40 $5.87 $351.10 Participant Loan $7,400.00 $0.00 $0.00 $6,566.62 Participant Loan $2,000.00 $100.02 $49.11 $1,133.19 Participant Loan $15,500.00 $1,291.68 $365.72 $9,365.08 Participant Loan $17,000.00 $0.00 $0.00 $1,010.10 Participant Loan $3,000.00 $0.00 $0.00 $2,437.50 Participant Loan $8,000.00 $1,066.67 $261.97 $4,399.87
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - -------------------------------------------------------------------------- Date of making: 3/31/94 $2,666.73 $159.91 Maturity: 2/99 Rate: 6.0% Date of making: 11/30/92 $277.96 $41.09 Maturity: 10/97 Rate: 6.0% Date of making: 10/31/95 $2,866.70 $523.98 Maturity: 9/99 Rate: 8.75% Date of making: 5/31/95 $200.04 $24.51 Maturity: 4/00 Rate: 9.0% Date of making: 11/30/95 $807.90 $30.52 Maturity: 10/99 Rate: 8.75% Date of making: 4/30/92 $1,010.10 $148.24 Maturity: 3/97 Rate: 6.5% Date of making: 4/30/96 $375.00 $66.60 Maturity: 3/00 Rate: 8.25% Date of making: 6/30/95 $400.07 $98.17 Maturity: 5/00 Rate: 9.0%
The accompanying notes are an integral part of this schedule. - 15 - 18 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------ Participant Loan $36,000.00 $2,616.00 $671.86 $4,800.00 Participant Loan $5,000.00 $586.32 $127.54 $4,163.66 Participant Loan $25,500.00 $189.94 $101.49 $22,595.20 Participant Loan $12,000.00 $1,851.40 $377.60 $6,898.60 Participant Loan $22,000.00 $1,100.01 $175.95 $3,299.83 Participant Loan $17,000.00 $1,700.01 $356.07 $8,499.83 Participant Loan $5,000.00 $500.04 $119.16 $3,499.88
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - -------------------------------------------------------------------------- Date of making: 4/30/93 $1,884.00 $47.99 Maturity: 3/98 Rate: 6.0% Date of making: 10/31/96 $247.08 $58.86 Maturity: 9/01 Rate: 8.25% Date of making: 06/30/96 $3,470.20 $659.31 Maturity: 3/01 Rate: 8.25% Date of making: 12/31/95 $1,101.40 $118.00 Maturity: 12/99 Rate: 8.75% Date of making: 1/31/93 $1,833.35 $293.25 Maturity: 12/98 Rate: 6.0% Date of making: 1/31/95 $850.05 $177.99 Maturity: 12/00 Rate: 7.75% Date of making: 1/31/96 $250.02 $59.58 Maturity: 12/01 Rate: 8.76%
The accompanying notes are an integral part of this schedule. - 16 - 19 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------ Participant Loan $15,000.00 $1,000.00 $160.00 $6,000.00 Participant Loan $17,000.00 $3,777.84 $499.60 $12,277.70 Participant Loan $11,000.00 $1,100.01 $230.43 $5,499.83 Participant Loan $10,000.00 $999.96 $160.08 $999.88 Participant Loan $6,000.00 $1,750.00 $154.42 $2,500.00 Participant Loan $21,000.00 $1,400.00 $254.16 $9,100.00 Participant Loan $38,400.00 $2,571.38 $398.14 $5,211.00 Participant Loan $17,000.00 $283.34 $69.56 $11,616.54
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - -------------------------------------------------------------------------- Date of making: 5/31/94 $1,000.00 $160.00 Maturity: 4/99 Rate: 6.0% Date of making: 11/30/96 $1,416.69 $187.35 Maturity: 10/99 Rate: 8.25% Date of making: 1/31/95 $550.05 $115.17 Maturity: 12/00 Rate: 7.75% Date of making: 1/31/93 $500.07 $79.95 Maturity: 12/98 Rate: 6.0% Date of making: 6/30/96 $750.00 $66.18 Maturity: 5/98 Rate: 8.25% Date of making: 7/31/94 $1,400.00 $253.44 Maturity: 6/99 Rate: 6.75% Date of making: 11/30/92 $5,211.00 $728.04 Maturity: 10/97 Rate: 6.0% Date of making: 7/31/95 $2,266.72 $556.48 Maturity: 6/00 Rate: 9.0%
The accompanying notes are an integral part of this schedule. - 17 - 20 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------ Participant Loan $5,000.00 $1,250.01 $56.35 $1,249.97 Participant Loan $28,800.00 $1,440.00 $332.64 $17,280.00 Participant Loan $16,000.00 $2,333.34 $427.32 $6,333.18 Participant Loan $3,000.00 $535.64 $84.46 $1,047.58 Participant Loan $20,000.00 $2,473.24 $426.71 $2,526.46 Participant Loan $15,000.00 $500.00 $111.88 $13,555.94 Participant Loan $15,000.00 $0.00 $0.00 $6,500.00 Participant Loan $31,000.00 $0.00 $0.00 $6,122.19
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - --------------------------------------------------------------------------- Date of making: 7/31/96 $1,249.97 $56.59 Maturity: 6/97 Rate: 8.25% Date of making: 4/30/95 $2,880.00 $665.28 Maturity: 3/00 Rate: 8.50% Date of making: 3/31/95 $1,666.74 $305.16 Maturity: 2/99 Rate: 8.50% Date of making: 8/31/95 $47.74 $0.00 Maturity: 7/98 Rate: 9.0% Date of making: 4/30/93 $193.48 $0.00 Maturity: 3/98 Rate: 6.0% Date of making: 8/31/96 $1,930.94 $363.61 Maturity: 7/01 Rate: 8.25% Date of making: 3/31/94 $625.00 $100.00 Maturity: 2/99 Rate: 6.0% Date of making: 8/31/92 $6,122.19 $988.99 Maturity: 7/97 Rate: 6.5%
The accompanying notes are an integral part of this schedule. - 18 - 21 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------ Participant Loan $2,000.00 $125.01 $23.61 $1,333.28 Participant Loan $15,000.00 $1,750.00 $341.60 $6,500.00 Participant Loan $23,200.00 $2,706.61 $433.03 $1,933.23 Participant Loan $18,000.00 $0.00 $0.00 $8,400.00 Participant Loan $9,000.00 $750.00 $130.50 $150.00 Participant Loan $3,300.00 $275.00 $47.90 $110.00 Participant Loan $4,400.00 $176.19 $42.96 $2,243.63 Participant Loan $6,000.00 $0.00 $0.00 $3,900.00
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - --------------------------------------------------------------------------- Date of making: 12/31/95 $229.18 $43.28 Maturity: 11/99 Rate: 8.75% Date of making: 10/31/94 $1,000.00 $195.20 Maturity: 9/99 Rate: 7.25% Date of making: 1/31/94 $386.75 $61.77 Maturity: 12/97 Rate: 6.0% Date of making: 5/31/94 $2,550.00 $408.00 Maturity: 4/99 Rate: 6.0% Date of making: 6/30/92 $150.00 $26.10 Maturity: 5/97 Rate: 6.5% Date of making: 8/31/92 $110.00 $19.16 Maturity: 7/97 Rate: 6.5% Date of making: 10/31/94 $447.20 $78.76 Maturity: 9/99 Rate: 7.25% Date of making: 1/31/95 $400.00 $83.76 Maturity: 12/99 Rate: 7.75%
The accompanying notes are an integral part of this schedule. - 19 - 22 SCHEDULE II GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ------------------------------------------------------------------------------------------ Participant Loan $2,100.00 $42.58 $0.00 $42.58 Participant Loan $29,900.00 $0.00 $0.00 $23,421.58 Participant Loan $10,000.00 $0.00 $0.00 $5,735.42 Participant Loan $12,200.00 $0.00 $0.00 $6,132.32 Participant Loan $5,000.00 $83.34 $14.50 $499.64
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - --------------------------------------------------------------------------- Date of making: 1/31/92 $35.00 $7.58 Maturity: 12/96 Rate: 8.0% Date of making: 10/31/95 $2,491.70 $593.60 Maturity: 9/00 Rate: 8.75% Date of making: 4/30/92 $5,735.42 $1,014.65 Maturity: 3/97 Rate: 6.5% Date of making: 5/31/94 $1,049.22 $130.08 Maturity: 4/99 Rate: 6.0% Date of making: 8/31/92 $166.58 $29.00 Maturity: 7/97 Rate: 6.5%
The accompanying notes are an integral part of this schedule. - 20 - 23 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has caused this Annual Report to be signed by the undersigned thereunto duly authorized. GENERAL DYNAMICS CORPORATION As Plan Administrator of the General Dynamics Corporation Savings and Stock Investment Plan By /s/ D. A. Savner ----------------------------- D. A. Savner Secretary June 26, 1998 -21- 24 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into General Dynamics Corporation's previously filed Registration Statement on Form S-8, File No. 2-23904. By /s/ Arthur Andersen LLP ---------------------------------- Arthur Andersen LLP Washington, D.C. June 26, 1998 -22- EX-99.E 3 REPORT ON FORM 11-K/ HOURLY EMPLOYEE INVEST. PLAN 1 - -------------------------------------------------------------------------------- ANNUAL EXHIBIT 99E TO ANNUAL REPORT ON FORM 10-K OF GENERAL DYNAMICS CORPORATION SEC FILE NO. 1-3671 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 19 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED December 31, 1997 A. Full title of the Plan and the address of the Plan, if different from the issuer named below: GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN B. Name of the issuer of the securities held pursuant to the Plan and the address of the principal executive office: GENERAL DYNAMICS CORPORATION 3190 FAIRVIEW PARK DRIVE FALLS CHURCH, VIRGINIA 22042-4253 2 GENERAL DYNAMICS CORPORATION INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
Pages of this Exhibit 99E (a) FINANCIAL STATEMENTS Report of Independent Public Accountants 2 Statements of Net Assets Available for Benefits, As of December 31, 1997 and 1996 3-4 Statement of Changes in Net Assets Available for Benefits, For the Year Ended December 31, 1997 5 Notes to Financial Statements 6-9 Schedule I - Statement of Investments in Master Trust Funds 10-11 Schedule II - Schedule of Loans or Fixed Income Obligations 12-13 (b) SIGNATURE 14 (c) EXHIBITS Consent of Independent Public Accountants 15
3 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996 TOGETHER WITH AUDITORS' REPORT -1- 4 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To General Dynamics Corporation: We have audited the accompanying statements of net assets available for benefits of the General Dynamics Corporation Hourly Employees Savings and Stock Investment Plan as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1997. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the General Dynamics Corporation Hourly Employees Savings and Stock Investment Plan as of December 31, 1997 and 1996, and the changes in its net assets available for benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental statement of investments in master trust funds (schedule I) and schedule of loans or fixed income obligations (schedule II), are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information are the responsibility of the Plan's management. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Washington, D.C. June 15, 1998 -2- 5 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1997
STOCK FIXED INCOME BOND INDEX BALANCED TOTAL FUND FUND FUND FUND --------------- -------------- --------------- -------------- ------------- ASSETS: Investment in Master Trust $ 449,622,959 $ 61,633,725 $ 202,337,138 $ 61,098,508 $ 6,751,895 Loans receivable 4,183,423 - - - - --------------- -------------- --------------- -------------- ------------- Total assets 453,806,382 61,633,725 202,337,138 61,098,508 6,751,895 --------------- -------------- --------------- -------------- ------------- LIABILITIES: Fund transfers - (49,547) 20,374 3,800 (17,156) Administrative fees payable 64,124 8,080 27,539 10,981 1,505 --------------- -------------- --------------- -------------- ------------- Total liabilities 64,124 (41,467) 47,913 14,781 (15,651) --------------- -------------- --------------- -------------- ------------- Net assets available for benefits $ 453,742,258 $ 61,675,192 $ 202,289,225 $ 61,083,727 $ 6,767,546 =============== ============== =============== ============== ============= S&P 500 STOCK INTERNATIONAL SMALL CAP LOAN INDEX FUND INDEX FUND INDEX FUND FUND --------------- -------------- ------------- ------------- ASSETS: Investment in Master Trust $ 110,319,565 $ 1,054,773 $ 6,427,355 $ - Loans receivable - - - 4,183,423 --------------- -------------- ------------- ------------- Total assets 110,319,565 1,054,773 6,427,355 4,183,423 --------------- -------------- ------------- ------------- LIABILITIES: Fund transfers 108,286 - (65,757) - Administrative fees payable 14,771 184 1,064 - --------------- -------------- ------------- ------------- Total liabilities 123,057 184 (64,693) - --------------- -------------- ------------- ------------- Net assets available for benefits $ 110,196,508 $ 1,054,589 $ 6,492,048 $ 4,183,423 =============== ============== ============= =============
The accompanying notes are an integral part of this financial statement. -3- 6 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1996
STOCK GOVERNMENT DIVERSIFIED TOTAL FUND BOND FUND FUND --------------- -------------- -------------- ---------------- ASSETS: Investment in Master Trust $ 445,986,808 $ 48,595,238 $ 68,889,380 $ 75,165,683 Loans receivable (payable) 1,271,045 (6,116) (6,960) (33,208) --------------- -------------- -------------- ---------------- Total assets 447,257,853 48,589,122 68,882,420 75,132,475 --------------- -------------- -------------- ---------------- LIABILITIES: Fund transfers 3,008 78,562 453,805 (77,203) Amounts payable to General Dynamics Corporation 606,271 133,202 86,638 125,345 Administrative fees payable 116,582 9,764 15,471 46,605 --------------- -------------- -------------- ---------------- Total liabilities 725,861 221,528 555,914 94,747 --------------- -------------- -------------- ---------------- Net assets available for benefits $ 446,531,992 $ 48,367,594 $ 68,326,506 $ 75,037,728 =============== ============== ============== ================ FIXED INCOME SPECIAL DISTRIBUTION LOAN FUND FUND FUND --------------- ---------------------- ------------- ASSETS: Investment in Master Trust $ 245,666,720 $ 7,669,787 $ - Loans receivable (payable) (12,617) (3,096) 1,333,042 --------------- ---------------------- ------------- Total assets 245,654,103 7,666,691 1,333,042 --------------- ---------------------- ------------- LIABILITIES: Fund transfers (458,792) 6,636 - Amounts payable to General Dynamics Corporation 261,086 - - Administrative fees payable 43,824 918 - --------------- ---------------------- ------------- Total liabilities (153,882) 7,554 - --------------- ---------------------- ------------- Net assets available for benefits $ 245,807,985 $ 7,659,137 $ 1,333,042 =============== ====================== =============
The accompanying notes are an integral part of this financial statement. -4- 7 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997
STOCK FIXED INCOME BOND INDEX BALANCED TOTAL FUND FUND FUND FUND --------------- -------------- --------------- -------------- ------------- Participation in income (loss) of Master Trust $ 50,797,665 $ 12,039,891 $ 7,737,041 $ 4,652,396 $ 206,020 --------------- -------------- --------------- -------------- ------------- ADD (DEDUCT): Rollover contributions 881,410 260,491 180,826 9,777 76,958 Contributions by participants 11,238,056 2,146,025 4,600,385 644,874 104,913 Contributions by General Dynamics Corporation 5,248,211 1,701,381 1,855,832 251,140 40,011 Loan repayments 152,571 348,403 323,453 78,715 4,758 Loans issued - (153,580) (1,615,340) (520,653) (57,094) Transfers among funds - 1,336,102 (20,127,354) 60,633,973 6,458,237 Distributions to withdrawn participants (63,384,235) (7,284,898) (36,117,954) (4,593,791) (61,049) Plan expenses (759,343) (71,450) (355,971) (72,706) (5,208) Other 3,035,931 2,985,233 322 2 - --------------- -------------- --------------- -------------- ------------- Net increase (decrease) 7,210,266 13,307,598 (43,518,760) 61,083,727 6,767,546 --------------- -------------- --------------- -------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 446,531,992 48,367,594 245,807,985 - - --------------- -------------- --------------- -------------- ------------- End of year $ 453,742,258 $ 61,675,192 $ 202,289,225 $ 61,083,727 $ 6,767,546 =============== ============== =============== ============== ============= S&P 500 STOCK INTERNATIONAL SMALL CAP GOVERNMENT DIVERSIFIED INDEX FUND INDEX FUND INDEX FUND BOND FUND ---------------- -------------- ------------- ------------- ------------- Participation in income (loss) of Master Trust $ 13,944,529 $ (105,832) $ 367,512 $ 1,873,867 $ 9,983,360 ---------------- -------------- ------------- ------------- ------------- ADD (DEDUCT): Rollover contributions 175,538 10,729 39,523 - 127,568 Contributions by participants 1,891,088 37,740 133,118 550,581 1,129,332 Contributions by General Dynamics Corporation 684,482 13,885 48,367 222,359 430,754 Loan repayments 142,295 1,764 7,573 32,121 40,550 Loans issued (1,239,407) (18,137) (69,727) (28,667) (94,383) Transfers among funds 100,230,501 1,127,601 6,096,126 (66,073,888) (82,333,869) Distributions to withdrawn participants (5,556,004) (11,978) (124,926) (4,863,453) (4,241,243) Plan expenses (76,514) (1,183) (5,518) (41,711) (128,086) Other - - - 2,285 48,289 ---------------- -------------- ------------- ------------- ------------- Net increase (decrease) 110,196,508 1,054,589 6,492,048 (68,326,506) (75,037,728) ---------------- -------------- ------------- ------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year - - - 68,326,506 75,037,728 ---------------- -------------- ------------- ------------- ------------- End of year $ 110,196,508 $ 1,054,589 $ 6,492,048 $ - $ - ================ ============== ============= ============= ============= SPECIAL DISTRIBUTION LOAN FUND FUND -------------------- ------------- Participation in income (loss) of Master Trust $ 98,881 $ - -------------------- ------------- ADD (DEDUCT): Rollover contributions - - Contributions by participants - - Contributions by General Dynamics Corporation - - Loan repayments - (827,061) Loans issued (6,228) 3,803,216 Transfers among funds (7,347,429) - Distributions to withdrawn participants (403,365) (125,574) Plan expenses (996) - Other - (200) -------------------- ------------- Net increase (decrease) (7,659,137) 2,850,381 -------------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 7,659,137 1,333,042 -------------------- ------------- End of year $ - $ 4,183,423 ==================== =============
The accompanying notes are an integral part of this financial statement. -5- 8 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996 1. The General Dynamics Corporation Hourly Employees Savings and Stock Investment Plan (the "Plan") is a defined contribution plan covering eligible hourly employees of General Dynamics Corporation (the "Company"). The following is a brief description of the Plan provided for general information purposes. Participants should refer to the Plan agreement for more complete information. A participant may contribute from 1% to 10% of base earnings up to $12.01 per hour and 1% to 6% of base earnings in excess of $12.01 per hour up to $16.01 per hour. Maximum contributions for represented participants are determined by the applicable collective bargaining agreements. In addition, participants at some locations may contribute another 1% to 4% of base earnings up to $16.01 per hour on an unmatched basis. Participants at Armament Systems, Defense Systems and Advanced Technology Systems may contribute 1% to 15% of their salary on a pre-tax basis. Each participant shall direct his contributions to be invested in one percent increments into all funds. Participants can change their investment elections daily and can make an unlimited number of investment election changes each year. Most Company matching contributions to the Plan are invested in Company common stock. However, at certain locations the Company match follows the employee's election. Generally, participants that are eligible for the Company matching contribution and are 100 percent invested in the General Dynamics Stock Fund receive a 100 percent Company matching contribution in Company common stock. Participants that are eligible for the Company matching contribution but are less than 100 percent invested in the General Dynamics Stock Fund receive a 50 percent Company matching contribution in Company common stock. The matching contributions vary for participants at Armament Systems, Defense Systems and Advanced Technology Systems. Participants are eligible to participate in the Plan upon hire, and their contributions are always 100 percent vested. Company matching contributions are fully vested upon five years of service. Contributions invested in the General Dynamics Stock Fund must be maintained in that fund for 5 years before becoming eligible for transfer to any other fund. Therefore, a portion of the balance in the General Dynamics Stock Fund represents non-participant-directed investments due to the match. With the exception of the General Dynamics Stock Fund, all other investment funds are completely participant-directed. The Plan permits active participants and employed inactive participants to borrow up to 50% of the vested amount in their accounts (as limited by the Plan) and to repay the loan by -6- 9 regular payroll deductions over a period of up to five years. Loans are issued at prime rate of interest. In the event the Plan is terminated, each participant will automatically be vested in the undistributed Company contributions. Each participant will receive payments based on the specific dollar amounts and shares of company stock in his account. 2. During June 1997, the Company extended the investment options for plan participants. Two of the options offered in 1996 remain available to participants: the General Dynamics Stock Fund and the Fixed Income Fund. The five options added in 1997 include: Bond Index Fund, Balanced Fund, S&P 500 Stock Index Fund, International Index Fund and Small Cap Index Fund. These investment options will offer participants the opportunity to invest in a broader range on the risk/return spectrum for actively traded securities. According to the Plan documents, the seven funds may hold the following types of investments: a) General Dynamics Stock Fund - The fund invests only in common stock of the Company. b) Fixed Income Fund - The fund invests in General Account and Separate Account Guaranteed Investment Contracts ("GICs"). General account GICs are deposits with an insurance company that earn a contractually specified rate of return over a defined period. These contracts are secured by the issuer's general account (a broadly diversified portfolio of fixed income assets) and the net worth of the insurance company. Separate account GICs are deposits with an insurance company, but are invested in a separate portfolio of high-quality securities. The GICs are not guaranteed by General Dynamics Corporation or any government agency. c) Bond Index Fund - The fund invests in government, corporate, mortgage-backed and asset-backed securities. The fund also invests in high-quality bonds, as defined. d) Balanced Fund - The fund is a mixed portfolio of commingled stocks and bond funds. The fund is made up of international equities, U.S. large cap equities, fixed income securities and U.S. small cap equities. e) S&P 500 Stock Index Fund - The fund invests in all 500 U.S. common stocks in the S&P 500 Index in proportion to their weighting in the Index. It may also hold 2% to 5% of its value in S&P 500 futures contracts. f) International Index Fund - The fund invests in over 1,000 stocks in major markets outside the United States and Canada. Investments are made in all stocks in the MSCI EAFE Index in approximate proportion to the weighting in the Index. g) Small Cap Index Fund - The fund attempts to invest in all 2,000 stocks in the Russell 2000 Index in proportion to their weighting in the Index. The Russell Index represents the smallest two-thirds of the 3,000 largest U.S. companies. It may also hold 2% to 5% of its value in Russell 2000 Index futures contracts. -7- 10 All of the above funds may hold a small cash balance for purposes of liquidity and expense control that is maintained in The Northern Trust Company Collective Short-Term Investment Fund. 3. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions from net assets available for benefits during the reporting period. Actual results could differ from those estimates. 4. The accompanying financial statements are prepared on the accrual basis of accounting. Certain reclassifications have been made to balances on the December 31, 1996 statement of net assets available for benefits to conform with the current year presentation. 5. The Company has received a determination from the Internal Revenue Service that the Plan, including all amendments through June 20, 1994, is a qualified profit sharing plan under Section 401 (a) of the Internal Revenue Code. The trust formed thereunder is exempt from Federal income tax under Section 501 (a). The Plan administrator and Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax exempt as of the financial statement date. 6. The Plan's investments are in the General Dynamics Corporation Savings and Stock Investment Plan Master Trust (the "Master Trust"), which was established for the investment of assets of the Plan and the Savings and Stock Investment Plan (the "Plans"). Each participating plan has an undivided interest in the Master Trust. The assets of the Master Trust are held by The Northern Trust Company ("Trustee"). At December 31, 1997 and 1996, the Plan's interest in the net assets of the Master Trust was approximately 16.8% and 17.5%, respectively. Net assets and net participation in the income of the Master Trust are allocated to the Plans according to their percentage interest in the Master Trust. The following table presents the reported value of investments for the Master Trust.
December 31, -------------------------------------- 1997 1996 ----------------- ----------------- General Dynamics Common Stock $ 513,911,736 $ 419,069,977 Investments in registered investment companies 901,907,398 - U.S. government bonds and other securities - 589,912,139 Cash and cash equivalents 14,594,902 36,819,637 Loans receivable 22,839,462 16,401,791 Guaranteed investment contracts 1,255,533,974 1,496,248,785 ----------------- ----------------- Total $ 2,708,787,472 $ 2,558,452,329 ================= =================
-8- 11 Investment income for the Master Trust is as follows:
YEAR ENDED DECEMBER 31, 1997 ------------------- Investment Income: Dividends $ 11,294,041 Interest 110,306,765 Net realized and unrealized gain on assets 192,193,228 ------------------- $ 313,794,034 ===================
Administrative expenses are primarily paid by the Plan, although certain administrative functions are performed by employees of the Company. Although no costs were reimbursed by the Company in 1997, the Plan document provides that these costs may be reimbursed by the Company. 7. In accordance with generally accepted accounting principles, amounts allocated to accounts of participants who have elected to withdraw from the Plan but have not yet been paid as of year end are not reported as liabilities on the Statements of Net Assets Available for Benefits. However, the Department of Labor requires that these amounts be reported as liabilities on Form 5500. At December 31, 1997 and 1996, amounts payable on withdrawals and distributions were $85,013 and $8,898,407, respectively. In addition, on the statement of changes in net assets available for benefits, 1997 distributions to withdrawn participants would have been $54,570,841 instead of $63,384,235 if the December 31 amounts payable on withdrawals and distributions had been included. 8. Most investments held by the Master Trust are recorded at quoted market value as stated on public exchanges as of December 31, 1997 and 1996. The Company values the GICs in the Fixed Income Fund in accordance with AICPA Statement of Position No. 94-4, "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans." As of December 31, 1997, the GICs included in the Master Trust are reported at contract value because they have been determined to be fully benefit responsive. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuers or otherwise. As of December 31, 1996, the GICs were included in the financial statements of the Master Trust at fair value as certain provisions of the Plans restricted the benefit-responsiveness of the GICs. These provisions were changed during 1997. The fair value of the GICs at December 31, 1997 was approximately $1.32 billion. The average yield and crediting interest rates ranged from 5.62 percent to 10.25 percent for 1997. 9. During 1998, the assets of the Bath Iron Works Hourly Plan were merged into the General Dynamics Hourly Savings and Stock Investment Plan and the related Master Trust. -9- 12 Schedule I Page 1 of 2 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS AS OF DECEMBER 31, 1997
QUOTED MARKET/CONTRACT COST VALUE ----------------- ----------------- GENERAL DYNAMICS STOCK FUND: Investment in common stock of General Dynamics Corporation * $ 184,594,747 $ 513,911,736 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 3,501,934 3,501,934 ----------------- ----------------- Total $ 188,096,681 $ 517,413,670 ================= ================= PROPORTIONATE INTEREST $ 61,633,725 ================= FIXED INCOME FUND: Investment in the Fixed Income Fund $ 1,255,533,974 $ 1,255,533,974 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 7,575,428 7,575,428 ----------------- ----------------- Total $ 1,263,109,402 $ 1,263,109,402 ================= ================= PROPORTIONATE INTEREST $ 202,337,138 ================= BOND INDEX FUND: Investment in the Bond Index Fund $ 144,116,679 $ 156,111,648 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 283,267 283,267 ----------------- ----------------- Total $ 144,399,946 $ 156,394,915 ================= ================= PROPORTIONATE INTEREST $ 61,098,508 =================
* denotes party-in-interest -10- The accompanying notes are an integral part of this schedule. 13 Schedule I Page 2 of 2 GENERAL DYNAMICS CORPORATION HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS AS OF DECEMBER 31, 1997
QUOTED MARKET/CONTRACT COST VALUE ----------------- ----------------- BALANCED FUND: Investment in the Balanced Fund $ 44,433,401 $ 46,302,809 ================= ================= PROPORTIONATE INTEREST $ 6,751,895 ================= S&P 500 STOCK INDEX FUND: Investment in the S&P 500 Stock Index Fund $ 516,044,858 $ 647,682,968 Temporary Investments in The Northern Trust Company Collective Short-Term Investment Fund * 710 710 ----------------- ----------------- Total 516,045,568 647,683,678 ================= ================= PROPORTIONATE INTEREST $ 110,319,565 ================= INTERNATIONAL INDEX FUND: Investment in the International Index Fund $ 10,554,112 $ 10,030,495 ================= ================= PROPORTIONATE INTEREST $ 1,054,773 ================= SMALL CAP INDEX FUND: Investment in the Small Cap Index Fund $ 39,754,999 $ 41,779,478 ================= ================= PROPORTIONATE INTEREST $ 6,427,355 ================= LOAN FUND: Loans Receivable $ 22,839,462 $ 22,839,462 ================= ================= PORPORTIONATE INTEREST $ 4,183,423 =================
* denotes party-in-interest -11- The accompanying notes are an integral part of this schedule. 14 SCHEDULE II GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ---------------------------------------------------------------------------------------- Participant Loan $20,000.00 $236.96 $53.32 $7,096.40 Participant Loan $8,000.00 $25.34 $56.76 $7,974.66 Participant Loan $9,500.00 $1,108.38 $247.94 $7,490.02 Participant Loan $7,500.00 $375.00 $97.60 $3,449.70 Participant Loan $10,200.00 $0.00 $0.00 $10,200.00 Participant Loan $10,000.00 $0.00 $0.00 $9,096.58 Participant Loan $5,000.00 $67.18 $35.39 $3,039.91 Participant Loan $2,000.00 $0.00 $0.00 $987.64
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - ------------------------------------------------------------------------- Date of making: 11/30/93 $2,430.04 $373.24 Maturity: 10/98 Rate: 6.0% Date of making: 8/1/97 $374.68 $92.55 Maturity: 7/02 Rate: 8.5% Date of making: 7/31/96 $760.97 $159.39 Maturity: 6/01 Rate: 8.25% Date of making: 8/31/94 $875.00 $146.40 Maturity: 9/99 Rate: 7.25% Date of making: 9/1/97 $340.00 $78.60 Maturity: 8/02 Rate: 8.50% Date of making: 4/30/95 $3,930.01 $695.88 Maturity: 3/00 Rate 8.5% Date of making: 8/1/97 $67.18 $35.59 Maturity: 7/02 Rate: 8.50% Date of making: 9/1/97 $111.12 $15.24 Maturity: 8/00 Rate: 8.50%
The accompanying notes are an integral part of this schedule. - 12 - 15 SCHEDULE II GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
Amount received (e) Unpaid (b) Original during reporting year balance at (a) Identity of obligator amount of loan (c) Principal (d) Interest end of year - ---------------------------------------------------------------------------------------- Participant Loan $1,600.00 $0.00 $0.00 $503.35 Participant Loan $10,000.00 $333.34 $79.42 $7,499.95 Participant Loan $5,700.00 $95.00 $15.20 $1,045.00 Participant Loan $45,500.00 $382.14 $318.01 $44,740.06 Participant Loan $6,200.00 $281.87 $53.94 $291.64 Participant Loan $8,000.00 $0.00 $0.00 $4,287.80 Participant Loan $3,700.00 $0.00 $0.00 $2,219.92
(f) Detailed description of loan including dates of making and maturity, interest rate, the type and value of collateral, any renegotiation of the loan and terms of the renegotiation Amount overdue and other material items (g) Principal (h) Interest - ------------------------------------------------------------------------ Date of making: 8/31/92 $503.35 $83.90 Maturity: 7/97 Rate: 6.5% Date of making: 12/31/95 $1,083.36 $258.12 Maturity: 11/00 Rate: 8.75% Date of making: 12/31/92 $807.50 $129.20 Maturity: 11/97 Rate: 6.0% Date of making: 8/1/97 $233.38 $0.00 Maturity: 7/02 Rate: 8.50% Date of Making: 9/30/92 $291.64 $72.32 Maturity: 8/97 Rate: 6.5% Date of making: 5/31/94 $688.02 $85.28 Maturity: 4/00 Rate: 6.0% Date of making: 9/30/94 $308.35 $60.15 Maturity: 8/99 Rate: 7.25%
The accompanying notes are an integral part of this schedule. - 13 - 16 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has caused this Annual Report to be signed by the undersigned thereunto duly authorized. GENERAL DYNAMICS CORPORATION As Plan Administrator of the General Dynamics Corporation Hourly Employees Savings and Stock Investment Plan By /s/ D. A. Savner ----------------------- D. A. Savner Secretary June 26, 1998 -14- 17 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into General Dynamics Corporation's previously filed Registration Statement on Form S-8, File No. 2-23904. By /s/ Arthur Andersen LLP ------------------------------- Arthur Andersen LLP Washington, D.C. June 26, 1998 -15- -----END PRIVACY-ENHANCED MESSAGE-----