<PAGE> 1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 1
to
FORM 10-K
AMENDMENT TO APPLICATION ON REPORT FILED
PURSUANT TO SECTION 12, 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1998
GENERAL DYNAMICS CORPORATION
3190 Fairview Park Drive
Falls Church, Virginia 22042-4253
Commission File Number 1-3671
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its 1998 Annual Report on Form 10-K as
set forth in the pages attached hereto:
Index to Exhibits
Exhibit 99F Annual Report on Form 11-K
for the General Dynamics Corporation Savings
and Stock Investment Plan
Exhibit 99G 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 thereunto duly authorized.
GENERAL DYNAMICS CORPORATION
(Registrant)
By /s/ David A. Savner
-------------------------
David A. Savner
Secretary
Dated: June 30, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 2
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Note Exhibit
Number Number Description
- ------ ------- -----------
<S> <C> <C>
(5) 3-1A --Restated Certificate of Incorporation, effective May 21, 1991
(12) 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
(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
* (12) 10-31 --Retirement Benefit Agreement between the company and Gordon R. England dated
February 14, 1997
(12) 10-32 --Credit Enhancement Agreement between Bath Iron Works Corporation and the City of
Bath, Maine dated September 19, 1997, relatingto the development program of facilities
in Bath, Maine
* (12) 10-33 --Retirement Benefit Agreement between the company and Michael J. Mancuso dated
March 6, 1998
* (12) 10-34 --Consulting agreement between the company and Paul G. Kaminski dated August 18, 1997
(13) 10-36 --Stock Purchase Agreement dated as of October 8, 1998, between the company and NASSCO
Holdings Incorporated and the stockholders of NASSCO Holdings Incorporated
* (14) 10-37 --Retirement Benefit Agreement between the company and David A. Savner dated March 4, 1998
</TABLE>
<PAGE> 3
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Note Exhibit
Number Number Description
- ------ ------- -----------
<S> <C> <C>
(14) 10-38 --Lease Agreement dated January 1, 1991, between National Steel and Shipbuilding Company and
the San Diego Unified Port District, relating to facilities in the San Diego, California harbor
(14) 10-38A --Amendment of Lease Agreement between National Steel and Shipbuilding Company and the
San Diego Unified Port District, dated December 6, 1994
(14) 10-39 --Capital Construction Fund Agreement, dated September 13, 1988, between National Steel and
Shipbuilding Company and the United States of America, represented by the Maritime
Administrator, Department of Transportation
(14) 10-39A --Capital Construction Fund Agreement-Addendum No. 1, dated September 13, 1988, between
National Steel and Shipbuilding Company and the United States of America, represented by
the Maritime Administrator, Department of Transportation
(14) 10-39B --Capital Construction Fund Agreement-Addendum No. 2, dated October 29, 1992, between
National Steel and Shipbuilding Company and the United States of America, represented by
the Maritime Administrator, Department of Transportation
(14) 10-39C --Capital Construction Fund Agreement-Addendum No. 3, dated August 27, 1993, between
National Steel and Shipbuilding Company and the United States of America, represented by
the Maritime Administrator, Department of Transportation
(14) 10-39D --Capital Construction Fund Agreement-Addendum No. 4, dated August 28, 1997, between
National Steel and Shipbuilding Company and the United States of America, represented by
the Maritime Administrator, Department of Transportation
(14) 10-39E --Capital Construction Fund Agreement-Addendum No. 5, dated October 29, 1997, between
National Steel and Shipbuilding Company and the United States of America, represented by
the Maritime Administrator, Department of Transportation
(16) 10-40 --Agreement and Plan of Merger dated May 16, 1999 between General Dynamics Corporation,
Tara Acquisition Corporation and Gulfstream Aerospace Corporation
(16) 10-41 --Voting Agreement dated May 16, 1999 between General Dynamics Corporation and certain
stockholders of Gulfstream Aerospace Corporation
(17) 10-42 --Stock Purchase Agreement (without Schedules and Exhibits) dated as of June 21, 1999 between
General Dynamics, Contel Federal Systems, Inc. and GTE Corporation
(14) 13 --1998 Annual Report (pages 20 through 44)
(14) 21 --Subsidiaries
(14) 23 --Consent of Independent Public Accountants
(14) 24 --Power of Attorney of the Board of Directors
(14) 27 --Financial Data Schedule
(14) 27-A --Amended Financial Data Schedule for the year ended December 31, 1997
(14) 27-B --Amended Financial Data Schedule for the nine months ended September 28, 1997
(14) 27-C --Amended Financial Data Schedule for the six months ended June 29, 1997
(14) 27-D --Amended Financial Data Schedule for the three months ended March 30, 1997
(15) 99D --1997 Annual Reprt on Form 11-K for the General Dynamics Corporation Savings and Stock
Investment Plan
(15) 99E --1997 Annual Reprt on Form 11-K for the General Dynamics Corporation Hourly Employees
Savings and Stock Investment Plan
99F --1998 Annual Report on Form 11-K for the General Dynamics Corporation Savings and Stock
Investment Plan
99G --1998 Annual Report on Form 11-K for the General Dynamics Corporation Hourly Employees
Savings and Stock Investment Plan
</TABLE>
* Indicates a management contract or compensatory plan or arrangement
required to be filed pursuant to Item 14(c) of Form 10-K.
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 (Commission File No.
1-3671).
(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 (Commission File No.
1-3671).
(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 (Commission File No.
1-3671).
<PAGE> 4
(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 (Commission File No.
1-3671).
(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 (Commission File No.
1-3671).
(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 (Commission File No.
1-3671).
(8) Not used.
(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 (Commission File No.
1-3671).
(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 (Commission File No. 1-3671).
(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 (Commission File No.
1-3671).
(12) Filed as an exhibit to the company's annual report on Form 10-K for
the year ending December 31, 1997, and filed with the Commission March
18, 1998, and incorporated herein by reference (Commission File No.
1-3671).
(13) Filed as an exhibit to the company's current report on Form 8-K filed
with the Commission November 25, 1998, and incorporated herein by
reference (Commission File No. 1-3671).
(14) Filed as an exhibit to the company's annual report on Form 10-K for
the year ending December 31, 1998, and filed with the Commission March
18, 1999, and incorporated herein by reference (Commission File No.
1-3671).
(15) Filed as an exhibit to the company's annual report on Form 10-K/A for
the year ending December 31, 1997, and filed with the Commission June
26, 1998, and incorporated herein by reference (Commission File No.
1-3671).
(16) Filed as an exhibit to the company's quarterly report on Form 10-Q for
the quarterly period ended April 4, 1999, and filed with the
Commission May 18, 1999, and incorporated herein by reference
(Commission File No. 1-3671).
(17) Filed as an exhibit to the company's current report on Form 8-K filed
with the Commission June 24, 1999, and incorporated herein by reference
(Commission File No. 1-3671).
<PAGE> 1
Exhibit 99F
- -------------------------------------------------------------------------------
EXHIBIT 99F TO
ANNUAL REPORT ON FORM 10-K
COMMISSION FILE NO. 1-3671
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1998
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 its principal executive office:
GENERAL DYNAMICS CORPORATION
3190 FAIRVIEW PARK DRIVE
FALLS CHURCH, VIRGINIA 22042-4253
<PAGE> 2
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<CAPTION>
Pages of this
Exhibit 99F
<S> <C> <C>
(a) FINANCIAL STATEMENTS
Report of Independent Public Accountants 1
Statements of Net Assets Available for Benefits, as of
December 31, 1998 and 1997 2-3
Statement of Changes in Net Assets Available for Benefits,
For the Year Ended December 31, 1998 4
Notes to Financial Statements 5-8
Schedule I - Statement of Investments
in Master Trust Funds as of December 31, 1998 9-10
Schedule II - Schedule of Loans or Fixed Income Obligations 11-16
(b) SIGNATURE 17
(c) EXHIBITS
Exhibit 23- Consent of Independent Public Accountants 18
</TABLE>
<PAGE> 3
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE> 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, 1998 and 1997, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1998. These
financial statements and the schedule referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and schedule 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 Plan as of
December 31, 1998 and 1997, and the changes in net assets available for
benefits for the year ended December 31, 1998, 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), is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is 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 schedule and Fund
Information are the responsibility of the Plan's management. The supplemental
schedule 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.
/s/ ARTHUR ANDERSEN LLP
- ------------------------------
ARTHUR ANDERSEN LLP
Washington, D.C.
June 4, 1999
1
<PAGE> 5
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
STOCK FIXED INCOME BOND INDEX BALANCED
TOTAL FUND FUND FUND FUND
------------------ --------------- ----------------- -------------- ---------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investment in Master Trust $2,575,814,821 $662,777,394 $1,025,430,024 $108,120,872 $ 57,984,985
Loans receivable 19,972,729 - - - -
Miscellaneous receivables 2,536,660 1,758,958 112,882 220,063 54,323
------------------ --------------- ----------------- -------------- ---------------
Total assets 2,598,324,210 664,536,352 1,025,542,906 108,340,935 58,039,308
------------------ --------------- ----------------- -------------- ---------------
LIABILITIES:
Fund transfers - 1,623,587 (1,208,102) 69,290 115,219
Accrued payables 708,661 107,466 269,475 50,550 22,515
------------------ --------------- ----------------- -------------- ---------------
Total liabilities 708,661 1,731,053 (938,627) 119,840 137,734
------------------ --------------- ----------------- -------------- ---------------
Net assets available for benefits $2,597,615,549 $662,805,299 $1,026,481,533 $108,221,095 $ 57,901,574
================== =============== ================= ============== ===============
<CAPTION>
S&P 500 STOCK INTERNATIONAL SMALL CAP DISTRIBUTION LOAN
INDEX FUND INDEX FUND INDEX FUND ACCOUNT FUND
--------------- ----------------- --------------- -------------- --------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investment in Master Trust $ 666,052,137 $ 12,433,099 $ 39,867,610 $ 3,148,700 $ -
Loans receivable - - - - 19,972,729
Miscellaneous receivables 272,623 54,012 37,752 - 26,047
--------------- ----------------- --------------- -------------- --------------
Total assets 666,324,760 12,487,111 39,905,362 3,148,700 19,998,776
--------------- ----------------- --------------- -------------- --------------
LIABILITIES:
Fund transfers (366,913) (138,974) (94,107) - -
Accrued payables 156,161 - 19,275 - 83,219
--------------- ----------------- --------------- -------------- --------------
Total liabilities (210,752) (138,974) (74,832) - 83,219
--------------- ----------------- --------------- -------------- --------------
Net assets available for benefits $ 666,535,512 $ 12,626,085 $ 39,980,194 $ 3,148,700 $ 19,915,557
=============== ================= =============== ============== ==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
-2-
<PAGE> 6
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
STOCK FIXED INCOME BOND INDEX BALANCED
TOTAL FUND FUND FUND FUND
--------------- -------------- ---------------- ------------- -------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investment in Master Trust $2,236,325,051 $ 455,779,945 $1,060,772,264 $ 95,296,407 $ 39,550,914
Loans receivable 18,656,039 - - - -
--------------- -------------- ---------------- ------------- -------------
Total assets 2,254,981,090 455,779,945 1,060,772,264 95,296,407 39,550,914
--------------- -------------- ---------------- ------------- -------------
LIABILITIES:
Fund transfers - 489,669 (675,999) (61,797) 144,953
Amounts payable to BIW Hourly Plan (Note 10) 1,496,305 - - - -
Amounts payable to General Dynamics Corporation 93,915 - - - -
Accrued payables 1,141,512 61,066 144,372 17,126 8,816
--------------- -------------- ---------------- ------------- --------------
Total liabilities 2,731,732 550,735 (531,627) (44,671) 153,769
--------------- -------------- ---------------- ------------- --------------
Net assets available for benefits $2,252,249,358 $ 455,229,210 $1,061,303,891 $ 95,341,078 $ 39,397,145
=============== ============== ================ ============= ==============
<CAPTION>
S&P 500 STOCK INTERNATIONAL SMALL CAP DISTRIBUTION LOAN
INDEX FUND INDEX FUND INDEX FUND ACCOUNT FUND
----------------- ------------- -------------- ------------- --------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investment in Master Trust $ 537,364,113 $ 8,975,722 $ 35,352,123 $ 3,233,563 $ -
Loans receivable - - - - 18,656,039
----------------- ------------- -------------- ------------- --------------
Total assets 537,364,113 8,975,722 35,352,123 3,233,563 18,656,039
----------------- ------------- -------------- ------------- --------------
LIABILITIES:
Fund transfers (30,018) 370,971 (237,779) - -
Amounts payable to BIW Hourly Plan (Note 10) - - - 1,496,305 -
Amounts payable to General Dynamics Corporation - - - 93,915 -
Accrued payables 71,952 1,565 6,314 830,301 -
------------------ ------------- -------------- ------------- --------------
Total liabilities 41,934 372,536 (231,465) 2,420,521 -
------------------ ------------- -------------- ------------- --------------
Net assets available for benefits $ 537,322,179 $ 8,603,186 $ 35,583,588 $ 813,042 $ 18,656,039
================== ============= ============== ============= ==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
-3-
<PAGE> 7
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
STOCK FIXED INCOME BOND INDEX BALANCED
TOTAL FUND FUND FUND FUND
---------------- --------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
PARTICIPATION IN INCOME (LOSS) OF MASTER TRUST $ 415,685,954 $ 176,931,609 $ 74,102,194 $ 7,874,906 $ 7,322,013
---------------- --------------- ---------------- -------------- -------------
ADD (DEDUCT):
Rollover contributions 11,656,456 1,785,156 1,090,500 1,286,931 1,296,227
Contributions by participants 48,175,925 30,285,263 4,708,269 1,096,408 1,590,758
Contributions by General Dynamics Corporation 29,348,319 28,057,188 78,127 65,253 232,626
Participating forfeitures (485,383) (453,432) (2,367) (436) (7,567)
Loan repayments 1,647,612 7,368,683 1,663,228 194,675 117,684
Transfers among funds - (7,499,637) (23,717,417) 9,723,724 11,351,334
Distributions to withdrawn participants (162,998,350) (27,284,381) (88,838,653) (6,905,777) (3,051,869)
Loans issued - (1,614,360) (3,906,239) (455,667) (346,777)
Miscellaneous pending transactions 2,335,658 - - - -
---------------- --------------- ---------------- -------------- -------------
Net increase (decrease) 345,366,191 207,576,089 (34,822,358) 12,880,017 18,504,429
---------------- --------------- -------------------------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,252,249,358 455,229,210 1,061,303,891 95,341,078 39,397,145
---------------- --------------- ---------------- -------------- -------------
End of year $ 2,597,615,549 $ 662,805,299 $ 1,026,481,533 $ 108,221,095 $ 57,901,574
================ =============== ================ ============== =============
<CAPTION>
S&P 500 STOCK INTERNATIONAL SMALL CAP DISTRIBUTION LOAN
INDEX FUND INDEX FUND INDEX FUND ACCOUNT FUND
----------------- ------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
PARTICIPATION IN INCOME (LOSS) OF MASTER TRUST $ 149,438,541 $ 2,021,618 $ (2,004,927) $ - $ -
----------------- ------------- ---------------- ------------- --------------
ADD (DEDUCT):
Rollover contributions 4,357,402 489,706 1,350,534 - -
Contributions by participants 8,452,746 446,500 1,595,981 - -
Contributions by General Dynamics Corporation 615,977 59,437 239,711 - -
Participating forfeitures (13,817) (1,331) (6,433) - -
Loan repayments 895,490 19,949 58,972 - (8,671,069)
Transfers among funds 2,412,795 1,873,578 5,855,623 - -
Distributions to withdrawn participants (33,083,567) (765,341) (2,317,479) - (751,283)
Loans issued (3,862,234) (121,217) (375,376) - 10,681,870
Miscellaneous pending transactions - - - 2,335,658 -
----------------- ------------- ---------------- ------------- --------------
Net increase (decrease) 129,213,333 4,022,899 4,396,606 2,335,658 1,259,518
----------------- ------------- ---------------- ------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 537,322,179 8,603,186 35,583,588 813,042 18,656,039
----------------- ------------- ---------------- ------------- --------------
End of year $ 666,535,512 $ 12,626,085 $ 39,980,194 $ 3,148,700 $ 19,915,557
================= ============= ================ ============= ==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
-4-
<PAGE> 8
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
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 ("BIW"),
Armament Systems, Defense Systems, Advanced Technology Systems and
Information Systems may contribute 1% to 15% of their salary on a pre-tax
basis.
Each participant shall direct his or her contributions to be invested in
one percent increments into the available 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 percent to 100 percent for participants at BIW,
Armament Systems, Defense Systems, Advanced Technology Systems and
Information Systems.
Participants are eligible to participate in the Plan upon hire, and their
contributions are always 100 percent vested. In general, Company matching
contributions are fully vested upon five years of service. For
participants from many of the General Dynamics' subsidiaries,
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 the prime rate of interest.
-5-
<PAGE> 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 common stock in his or her account.
2. During June 1997, the Company extended the investment options for plan
participants. The 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 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 "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 the Company 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
S&P 500 Index. It may also hold 2 percent to 5 percent 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 MSCI EAFE 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
Russell 2000 Index. The Russell 2000 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.
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.
-6-
<PAGE> 10
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 financial statement captions have been changed 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 (the
"Trustee"). The recordkeeper is Hewitt Associates. At December 31, 1998
and 1997, the Plan's interest in the net assets of the Master Trust was
approximately 81.7% and 83.2%, 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.
<TABLE>
<CAPTION>
December 31,
--------------------------------------------
1998 1997
-------------------- ------------------
<S> <C> <C>
General Dynamics Corporation common stock $ 762,414,942 $ 513,911,736
Investments in registered investment companies 1,138,026,273 901,907,398
Cash and cash equivalents 31,805,631 14,594,902
Loans receivable 28,704,785 22,839,462
Guaranteed investment contracts 1,218,525,581 1,255,533,974
-------------------- ------------------
Total $ 3,179,477,212 $ 2,708,787,472
==================== ==================
</TABLE>
-7-
<PAGE> 11
Investment income for the Master Trust is as follows:
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
---------------------------
<S> <C>
Dividends $ 10,665,773
Interest 91,525,729
Net realized and unrealized gains on assets 401,630,816
------------------------
$ 503,822,318
========================
</TABLE>
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 1998, 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, 1998 and 1997, amounts
payable on withdrawals and distributions were $3,857,680 and $370,328,
respectively. In addition, on the statement of changes in net assets
available for benefits, 1998 distributions to withdrawn participants would
have been $166,856,030 instead of $162,998,350 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, 1998 and 1997. 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, 1998 and 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. The fair value of the GICs at
December 31, 1998 was approximately $1.28 billion. The average yield and
crediting interest rates ranged from 5.62 percent to 10.0 percent for
1998.
9. In April 1997, the assets of the Bath Iron Works Corporation Tax Deferred
Savings Plan for Salaried Employees were merged into the Plan and the
related Master Trust.
10. During 1997, $1,496,305 of assets were transferred to the Master Trust in
error by Chase Manhattan Bank, trustee for the BIW benefit plans. The
amount represents an asset of the BIW Hourly Plan. Therefore, the amount
was appropriately included as a liability of the Master Trust on the
statement of net assets available for benefits as of December 31, 1997.
The amount was returned to the BIW Hourly Plan in January 1998.
-8-
<PAGE> 12
GENERAL DYNAMICS CORPORATION SCHEDULE I
SAVINGS AND STOCK INVESTMENT PLAN 1 OF 2
STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET/CONTRACT
COST VALUE
----------------- -------------------
<S> <C> <C>
GENERAL DYNAMICS STOCK FUND:
Investment in common stock of
General Dynamics Corporation * $ 287,427,476 $ 762,414,942
Temporary investments in
The Northern Trust Company
Collective Short-Term Investment Fund * 1,896,652 1,896,652
----------------- -------------------
Total $ 289,324,128 $ 764,311,594
================= ===================
PROPORTIONATE INTEREST $ 662,777,394
===================
FIXED INCOME FUND:
Investment in the Fixed Income Fund $ 1,218,525,580 $ 1,218,525,580
Temporary investments
The Northern Trust Company
Collective Short-Term Investment Fund * 26,257,956 26,257,956
----------------- -------------------
Total $ 1,244,783,536 $ 1,244,783,536
================= ===================
PROPORTIONATE INTEREST $ 1,025,430,024
===================
BOND INDEX FUND:
Investment in the Bond Index Fund $ 145,203,664 $ 167,485,221
================= ===================
PROPORTIONATE INTEREST $ 108,120,872
===================
BALANCED FUND:
Investment in the Balanced Fund $ 61,656,640 $ 71,696,277
================= ===================
PROPORTIONATE INTEREST $ 57,984,985
===================
</TABLE>
The accompanying notes are an integral part of this schedule.
-9-
<PAGE> 13
GENERAL DYNAMICS CORPORATION SCHEDULE I
SAVINGS AND STOCK INVESTMENT PLAN 2 OF 2
STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET/CONTRACT
COST VALUE
--------------- ---------------
<S> <C> <C>
S&P 500 STOCK INDEX FUND:
Investment in the S&P 500 Stock Index Fund $ 542,185,771 $ 838,059,236
=============== ================
PROPORTIONATE INTEREST $ 666,052,137
================
INTERNATIONAL INDEX FUND:
Investment in the International Index Fund $ 13,089,556 $ 14,246,751
=============== ================
PROPORTIONATE INTEREST $ 12,433,099
================
SMALL CAP INDEX FUND:
Investment in the Small Cap Index Fund $ 45,827,472 $ 46,538,788
=============== ================
PROPORTIONATE INTEREST $ 39,867,610
================
DISTRIBUTION ACCOUNT:
Distribution Account $ 3,651,023 $ 3,651,023
=============== ================
PROPORTIONATE INTEREST $ 3,148,700
================
LOAN Fund:
Loans Receivable $ 28,704,785 $ 28,704,785
=============== ================
PROPORTIONATE INTEREST $ 19,972,729
================
</TABLE>
* denotes party-in-interest
The accompanying notes are an integral part of this schedule.
-10-
<PAGE> 14
GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN SCHEDULE II
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS 1 OF 6
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $2,276.00 $2,092.76 $106.12 $183.24
Participant Loan $25,000.00 $5,709.91 $1,328.45 $22,882.26
Participant Loan $14,500.00 $2,724.54 $1,027.83 $11,775.46
Participant Loan $17,813.00 $638.70 $373.26 $17,174.30
Participant Loan $10,000.00 $1,347.06 $335.61 $7,152.91
Participant Loan $13,736.00 $370.31 $215.05 $13,365.69
Participant Loan $5,000.00 $0.00 $0.00 $5,000.00
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 10/8/97 $183.24 $0.00
Maturity: 11/1/98
Rate: 8.5%
Participant Loan Date of making: 3/13/98 $796.33 $0.00
Maturity: 4/1/03
Rate: 8.5%
Participant Loan Date of making: 7/17/97 $1,574.69 $390.86
Maturity: 8/1/01
Rate: 8.5%
Participant Loan Date of making: 8/10/98 $84.33 $0.00
Maturity: 9/1/03
Rate: 8.5%
Participant Loan Date of making: 4/30/96 $1,949.05 $447.48
Maturity: 5/30/01
Rate: 8.25%
Participant Loan Date of making: 8/11/98 $187.13 $73.03
Maturity: 9/1/03
Rate 8.5%
Participant Loan Date of making: 5/31/95 $3,500.28 $961.80
Maturity: 6/31/00
Rate: 10.0%
</TABLE>
The accompanying notes are an integral part of this schedule
-11-
<PAGE> 15
GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN SCHEDULE II
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS 2 OF 6
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $5,000.00 $0.00 $0.00 $3,472.21
Participant Loan $37,000.00 $4,700.85 $2,132.27 $30,797.38
Participant Loan $11,140.00 $715.03 $383.72 $10,424.97
Participant Loan $13,800.00 $2,530.00 $493.90 $2,070.00
Participant Loan $3,500.00 $0.00 $0.00 $2,508.22
Participant Loan $1,288.00 $234.14 $25.06 $1,053.86
Participant Loan $15,000.00 $0.00 $0.00 $13,145.00
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 11/20/94 $3,472.21 $430.79
Maturity: 10/31/97
Rate: 7.75%
Participant Loan Date of making: 8/13/97 $1,634.48 $641.24
Maturity: 9/1/02
Rate: 8.5%
Participant Loan Date of making: 12/29/97 $950.78 $424.41
Maturity: 1/1/03
Rate: 8.5%
Participant Loan Date of making: 6/30/94 $460.00 $89.80
Maturity: 7/31/99
Rate: 7.25%
Participant Loan Date of making: 9/30/93 $2,508.22 $419.80
Maturity: 10/30/98
Rate: 6.0%
Participant Loan Date of Making: 6/16/98 $289.38 $13.02
Maturity: 7/1/99
Rate: 8.5%
Participant Loan Date of making: 9/30/93 $13,145.00 $2,080.00
Maturity: 10/30/98
Rate: 6.0%
</TABLE>
The accompanying notes are an integral part of this schedule
-12-
<PAGE> 16
GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN SCHEDULE II
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS 3 OF 6
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $22,500.00 $3,469.57 $1,608.36 $18,946.84
Participant Loan $3,000.00 $509.59 $229.85 $2,409.62
Participant Loan $15,000.00 $2,940.90 $671.28 $10,059.10
Participant Loan $813.00 $698.92 $38.18 $114.08
Participant Loan $7,600.00 $1,646.71 $392.21 $3,332.43
Participant Loan $3,400.00 $751.70 $142.59 $381.50
Participant Loan $13,000.00 $81.74 $53.19 $7,068.17
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 7/28/97 $1,548.63 $516.56
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 7/14/97 $89.24 $21.72
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $59.10 $0.00
Maturity: 4/1/02
Rate: 8.25%
Participant Loan Date of making: 11/4/97 $114.08 $0.58
Maturity: 12/1/98
Rate: 8.5%
Participant Loan Date of making: 12/31/95 $39.21 $0.00
Maturity: 1/1/01
Rate: 8.75%
Participant Loan Date of making: 2/28/95 $169.09 $25.94
Maturity: 3/1/99
Rate: 8.5%
Participant Loan Date of making: 4/30/95 $3,384.98 $797.85
Maturity: 5/1/00
Rate: 9.0%
</TABLE>
The accompanying notes are an integral part of this schedule
-13-
<PAGE> 17
GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN SCHEDULE II
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS 4 OF 6
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $7,000.00 $1,104.48 $113.88 $858.91
Participant Loan $23,000.00 $3,521.71 $1,669.19 $19,478.29
Participant Loan $13,000.00 $1,990.18 $944.18 $11,009.82
Participant Loan $8,400.00 $1,540.02 $344.74 $5,222.82
Participant Loan $2,000.00 $829.61 $124.56 $1,170.39
Participant Loan $15,000.00 $3,290.04 $781.56 $8,001.60
Participant Loan $26,000.00 $4,907.57 $1,163.52 $17,758.29
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 1/31/94 $625.57 $100.10
Maturity: 2/1/99
Rate: 6.0%
Participant Loan Date of making: 8/14/97 $1,349.99 $537.59
Maturity: 9/1/02
Rate: 8.5%
Participant Loan Date of making: 9/2/97 $508.60 $230.12
Maturity: 10/1/02
Rate: 8.5%
Participant Loan Date of making: 11/30/96 $182.82 $31.34
Maturity: 12/01/01
Rate: 8.25%
Participant Loan Date of making: 10/31/97 $211.88 $15.26
Maturity: 11/1/99
Rate: 8.5%
Participant Loan Date of making: 2/29/96 $1,316.28 $93.12
Maturity: 3/30/01
Rate: 9.25%
Participant Loan Date of making: 3/31/97 $424.89 $0.20
Maturity: 4/30/02
Rate: 8.25%
</TABLE>
The accompanying notes are an integral part of this schedule
-14-
<PAGE> 18
GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN SCHEDULE II
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS 5 OF 6
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $1,000.00 $437.19 $66.81 $562.81
Participant Loan $700.00 $74.55 $18.27 $508.75
Participant Loan $10,000.00 $1,676.90 $315.10 $2,347.35
Participant Loan $20,000.00 $3,939.99 $315.10 $2,347.35
Participant Loan $14,000.00 $2,354.07 $1,183.68 $11,645.93
Participant Loan $5,000.00 $1,264.14 $314.06 $3,735.86
Participant Loan $10,000.00 $3,127.86 $489.12 $2,894.86
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 10/27/97 $83.24 $4.26
Maturity: 11/1/99
Rate: 8.25%
Participant Loan Date of making: 1/31/97 $65.49 $13.05
Maturity: 2/28/02
Rate: 8.25%
Participant Loan Date of making: 8/31/94 $847.52 $115.95
Maturity: 9/1/99
Rate: 7.25%
Participant Loan Date of making: 7/3/97 $595.30 $225.26
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 7/3/97 $819.67 $239.18
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 11/19/97 $263.71 $51.93
Maturity: 12/1/00
Rate: 8.5%
Participant Loan Date of making: 7/31/96 $588.28 $40.76
Maturity: 8/1/99
Rate: 8.25%
</TABLE>
The accompanying notes are an integral part of this schedule
-15-
<PAGE> 19
GENERAL DYNAMICS SAVINGS AND STOCK INVESTMENT PLAN SCHEDULE II
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS 6 OF 6
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $17,900.00 $2,557.15 $1,298.96 $15,342.85
Participant Loan $6,500.00 $1,529.66 $272.80 $270.70
Participant Loan $50,000.00 $5,113.92 $2,698.17 $44,886.08
Participant Loan $12,000.00 $1,476.17 $381.28 $5,723.83
Participant Loan $3,500.00 $697.35 $134.56 $2,802.65
Participant Loan $10,000.00 $1,936.55 $436.81 $3,833.23
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 11/11/97 $705.24 $212.90
Maturity: 12/1/02
Rate: 8.5%
Participant Loan Date of making: 12/31/94 $135.44 $24.80
Maturity: 1/31/99
Rate: 8.5%
Participant Loan Date of making: 9/2/97 $4,734.91 $1,814.62
Maturity: 10/1/02
Rate: 8.5%
Participant Loan Date of making: 11/30/95 $923.83 $190.64
Maturity: 12/31/00
Rate: 8.75%
Participant Loan Date of making: 4/22/98 $262.92 $19.01
Maturity: 5/1/00
Rate: 8.5%
Participant Loan Date of making: 9/30/95 $166.69 $39.71
Maturity: 10/1/00
Rate: 8.75%
</TABLE>
The accompanying notes are an integral part of this schedule
-16-
<PAGE> 20
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
GENERAL DYNAMICS CORPORATION
As Plan Administrator of the General Dynamics
Corporation Savings and Stock Investment Plan
By /s/ David A. Savner
-------------------------
David A. Savner
Secretary
Dated: June 30, 1999
-17-
<PAGE> 21
EXHIBIT 23
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 30, 1999
-18-
<PAGE> 1
Exhibit 99G
- --------------------------------------------------------------------------------
EXHIBIT 99G TO
ANNUAL REPORT ON FORM 10-K
COMMISSION FILE NO. 1-3671
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1998
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 its principal executive office:
GENERAL DYNAMICS CORPORATION
3190 FAIRVIEW PARK DRIVE
FALLS CHURCH, VIRGINIA 22042-4253
<PAGE> 2
GENERAL DYNAMICS CORPORATION
SAVINGS AND STOCK INVESTMENT PLAN
INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<CAPTION>
Pages of this
Exhibit 99G
<S> <C>
(a) FINANCIAL STATEMENTS
Report of Independent Public Accountants 1
Statements of Net Assets Available for Benefits, as of
December 31, 1998 and 1997 2-3
Statement of Changes in Net Assets Available for Benefits,
For the Year Ended December 31, 1998 4
Notes to Financial Statements 5-8
Schedule I - Statement of Investments in Master Trust Funds 9-10
as of December 31, 1998
Schedule II - Schedule of Loans or Fixed Income Obligations 11-23
(b) SIGNATURE 24
(c) EXHIBITS
Exhibit 23- Consent of Independent Public Accountants 25
</TABLE>
<PAGE> 3
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE> 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, 1998 and 1997, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1998. These financial statements and the schedule referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedule 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 Plan as of
December 31, 1998 and 1997, and the changes in net assets available for
benefits for the year ended December 31, 1998, 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), is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is 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 schedule and Fund
Information are the responsibility of the Plan's management. The supplemental
schedule 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.
/s/ ARTHUR ANDERSEN LLP
- ------------------------------
ARTHUR ANDERSEN LLP
1
Washington, D.C.
June 4, 1999
<PAGE> 5
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
STOCK FIXED INCOME BOND INDEX BALANCED
TOTAL FUND FUND FUND FUND
------------- ------------- ------------- ------------- -------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investment in Master Trust $ 574,957,607 $ 101,534,200 $ 219,353,511 $ 59,364,352 $ 13,711,292
Loans receivable 8,732,055 - - - -
Miscellaneous receivables 384,676 81,887 96,920 10,445 18,572
------------- ------------- ------------- ------------- -------------
Total assets 584,074,338 101,616,087 219,450,431 59,374,797 13,729,864
------------- ------------- ------------- ------------- -------------
LIABILITIES:
Fund transfers - 225,762 (267,938) (3,982) -
Accrued payables 151,539 21,714 89,907 7,572 -
------------- ------------- ------------- ------------- -------------
Total liabilities 151,539 247,476 (178,031) 3,590 -
------------- ------------- ------------- ------------- -------------
Net assets available for benefits $ 583,922,799 $ 101,368,611 $ 219,628,462 $ 59,371,207 $ 13,729,864
============= ============= ============= ============= =============
<CAPTION>
S&P 500 STOCK INTERNATIONAL SMALL CAP DISTRIBUTION LOAN
INDEX FUND INDEX FUND INDEX FUND ACCOUNT FUND
------------- ------------- ------------- ------------- -------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investment in Master Trust $ 172,007,100 $ 1,813,651 $ 6,671,178 $ 502,323 $ -
Loans receivable - - - - 8,732,055
Miscellaneous receivables 134,958 2,600 10,535 - 28,759
------------- ------------- ------------- ------------- -------------
Total assets 172,142,058 1,816,251 6,681,713 502,323 8,760,814
------------- ------------- ------------- ------------- -------------
LIABILITIES:
Fund transfers 99,451 (19,074) (34,219) - -
Accrued payables 8,649 - - - 23,697
------------- ------------- ------------- ------------- -------------
Total liabilities 108,100 (19,074) (34,219) - 23,697
------------- ------------- ------------- ------------- -------------
Net assets available for benefits $ 172,033,958 $ 1,835,325 $ 6,715,932 $ 502,323 $ 8,737,117
============= ============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of this financial statement
-2-
<PAGE> 6
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
STOCK FIXED INCOME BOND INDEX BALANCED
TOTAL FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
ASSETS:
<S> <C> <C> <C> <C> <C>
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)
Accrued payables 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
============ ============ ============ ============ ============
<CAPTION>
S&P 500 STOCK INTERNATIONAL SMALL CAP LOAN
INDEX FUND INDEX FUND INDEX FUND FUND
------------ ------------ ------------ ------------
Assets:
<S> <C> <C> <C> <C>
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) -
Accrued payables 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
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this finanicial statement
-3-
<PAGE> 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, 1998
<TABLE>
<CAPTION>
STOCK FIXED INCOME BOND INDEX BALANCED
TOTAL FUND FUND FUND FUND
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Participation in income (loss) of Master Trust $ 85,426,379 $ 26,320,633 $ 15,743,823 $ 4,624,100 $ 1,744,141
------------- ------------- ------------- ------------- -------------
ADD (DEDUCT):
Rollover contributions 555,551 117,828 70,552 28,956 82,760
Contributions by participants 19,925,392 3,440,597 6,153,673 1,004,582 987,664
Contributions by General Dynamics Corporation 7,465,225 2,429,894 1,958,812 381,218 273,315
Participating forfeitures (19,927) 1,829 (3,867) (835) (347)
Loan repayments 512,613 699,231 762,291 209,178 74,648
Interportfolio transfers - 12,504,370 (12,790,114) (1,546,816) 828,913
Distributions to withdrawn participants (46,571,693) (5,499,443) (22,344,609) (6,048,846) (566,221)
New loans issued - (321,520) (2,522,352) (364,057) (368,580)
Transfers in from BIW Hourly Plan (Note 9) 62,384,678 - 30,311,028 - 3,906,025
Miscellaneous pending transactions 502,323 - - - -
------------- ------------- ------------- ------------- -------------
Net increase (decrease) 130,180,541 39,693,419 17,339,237 (1,712,520) 6,962,318
------------- ------------- ------------- ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 453,742,258 61,675,192 202,289,225 61,083,727 6,767,546
------------- ------------- ------------- ------------- -------------
End of year $ 583,922,799 $ 101,368,611 $ 219,628,462 $ 59,371,207 $ 13,729,864
============= ============= ============= ============= =============
<CAPTION>
S&P 500 STOCK INTERNATIONAL SMALL CAP DISTRIBUTION LOAN
FUND INDEX FUND INDEX FUND ACCOUNT FUND
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Participation in income (loss) of Master Trust $ 37,231,216 $ 233,146 $ (470,680) $ - $ -
------------- ------------- ------------- ------------- -------------
Add (deduct):
Rollover contributions 208,964 5,131 41,360 - -
Contributions by participants 7,653,513 120,800 564,563 - -
Contributions by General Dynamics Corporation 2,200,482 37,104 184,400 - -
Participating forfeitures (6,849) (4,639) (5,219) - -
Loan repayments 901,306 15,286 63,854 - (2,213,181)
Interportfolio transfers 45,327 498,925 459,396 - -
Distributions to withdrawn participants (11,350,880) (76,736) (412,955) - (272,004)
New loans issued (3,213,254) (48,281) (200,835) - 7,038,879
Transfers in from BIW Hourly Plan (Note 9) 28,167,625 - - - -
Miscellaneous pending transactions - - - 502,323 -
------------- ------------- ------------- ------------- -------------
Net increase (decrease) 61,837,450 780,736 223,884 502,323 4,553,694
------------- ------------- ------------- ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 110,196,508 1,054,589 6,492,048 - 4,183,423
------------- ------------- ------------- ------------- -------------
End of year $ 172,033,958 $ 1,835,325 $ 6,715,932 $ 502,323 $ 8,737,117
============= ============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of this financial statement
-4-
<PAGE> 8
GENERAL DYNAMICS CORPORATION
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
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, Advanced Technology
Systems and Information Systems may contribute 1% to 15% of their salary
on a pre-tax basis.
Each participant shall direct his or her 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, Advanced Technology
Systems and Information 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. Generally, for
participants from many of the Company's subsidiaries, 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
-5-
<PAGE> 9
regular payroll deductions over a period of up to five years. Loans are
issued at the 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 common stock in his or her account.
2. During June 1997, the Company extended the investment options for plan
participants. The 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 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 "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 the Company
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
S&P 500 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 MSCI EAFE 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 Russell 2000 Index. The Russell 2000 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.
-6-
<PAGE> 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 financial statement captions have been changed 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 (the "Trustee"). The recordkeeper
is Hewitt Associates. At December 31, 1998 and 1997, the Plan's interest
in the net assets of the Master Trust was approximately 18.3% and 16.8%,
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.
<TABLE>
<CAPTION>
December 31,
----------------------------------------
1998 1997
------------------ ------------------
<S> <C> <C>
General Dynamics Corporation common stock $ 762,414,942 $ 513,911,736
Investments in registered investment companies 1,138,026,273 901,907,398
Cash and cash equivalents 31,805,631 14,594,902
Loans receivable 28,704,785 22,839,462
Guaranteed investment contracts 1,218,525,581 1,255,533,974
------------------ ------------------
Total $ 3,179,477,212 $ 2,708,787,472
================== ==================
</TABLE>
-7-
<PAGE> 11
Investment income for the Master Trust is as follows:
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
-------------------
<S> <C>
Dividends $ 10,665,773
Interest 91,525,729
Net realized and unrealized gains on assets 401,630,816
-------------------
$ 503,822,318
===================
</TABLE>
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 1998, 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, 1998 and 1997, amounts
payable on withdrawals and distributions were $830,385 and $85,013,
respectively. In addition, on the statement of changes in net assets
available for benefits, 1998 distributions to withdrawn participants
would have been $47,402,078 instead of $46,571,693 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, 1998 and 1997. 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, 1998 and 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. The fair value of the
GICs at December 31, 1998 was approximately $1.28 billion. The average
yield and crediting interest rates ranged from 5.62 percent to 10.0
percent for 1998.
9. During 1998, the assets of the Bath Iron Works ("BIW") Hourly Plan were
merged into the Plan and the related Master Trust.
-8-
<PAGE> 12
GENERAL DYNAMICS CORPORATION SCHEDULE I
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN 1 OF 2
STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET/CONTRACT
COST VALUE
------------------ -----------------
GENERAL DYNAMICS STOCK FUND:
<S> <C> <C>
Investment in common stock of
General Dynamics Corporation * $ 287,427,476 $ 762,414,942
Temporary investments in
The Northern Trust Company
Collective Short-Term Investment Fund * 1,896,652 1,896,652
------------------ ------------------
Total $ 289,324,128 $ 764,311,594
================== ==================
PROPORTIONATE INTEREST $ 101,534,200
==================
FIXED INCOME FUND:
Investment in the Fixed Income Fund $ 1,218,525,580 $ 1,218,525,580
Temporary investments
The Northern Trust Company
Collective Short-Term Investment Fund * 26,257,956 26,257,956
------------------ ------------------
Total $ 1,244,783,536 $ 1,244,783,536
================== ==================
PROPORTIONATE INTEREST $ 219,353,511
==================
BOND INDEX FUND:
Investment in the Bond Index Fund $ 145,203,664 $ 167,485,221
================== ==================
PROPORTIONATE INTEREST $ 59,364,352
==================
BALANCED FUND:
Investment in the Balanced Fund $ 61,656,640 $ 71,696,277
================== ==================
PROPORTIONATE INTEREST $ 13,711,292
==================
</TABLE>
The accompanying notes are an integral part of this schedule.
-9-
<PAGE> 13
GENERAL DYNAMICS CORPORATION SCHEDULE I
HOURLY EMPLOYEES SAVINGS AND STOCK INVESTMENT PLAN 2 OF 2
STATEMENT OF INVESTMENTS IN MASTER TRUST FUNDS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
Market/Contract
Cost Value
----------------- -----------------
S&P 500 STOCK INDEX FUND:
<S> <C> <C>
Investment in the S&P 500 Stock Index Fund $ 542,185,771 $ 838,059,236
================= =================
PROPORTIONATE INTEREST $ 172,007,100
=================
INTERNATIONAL INDEX FUND:
Investment in the International Index Fund $ 13,089,556 $ 14,246,751
================= =================
PROPORTIONATE INTEREST $ 1,813,651
=================
SMALL CAP INDEX FUND:
Investment in the Small Cap Index Fund $ 45,827,472 $ 46,538,788
================= =================
PROPORTIONATE INTEREST $ 6,671,178
=================
DISTRIBUTION ACCOUNT
Distribution Account $ 3,651,023 $ 3,651,023
================= =================
PROPORTIONATE INTEREST $ 502,323
=================
LOAN FUND:
Loans Receivable $ 28,704,785 $ 28,704,785
================= =================
PROPORTIONATE INTEREST $ 8,732,055
=================
</TABLE>
* denotes party-in-interest
The accompanying notes are an integral part of this schedule.
-10-
<PAGE> 14
SCHEDULE II
1 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $3,000.00 $2,226.00 $192.20 $774.00
Participant Loan $5,000.00 $913.26 $319.14 $3,998.91
Participant Loan $500.00 $0.00 $0.00 $500.00
Participant Loan $1,500.00 $542.80 $88.52 $957.20
Participant Loan $10,000.00 $1,970.39 $307.32 $1,145.40
Participant Loan $6,000.00 $945.15 $439.83 $4,728.94
Participant Loan $6,000.00 $1,004.00 $442.54 $4,670.09
Participant Loan $1,500.00 $645.45 $71.17 $562.86
Participant Loan $7,000.00 $902.40 $371.52 $6,097.60
Participant Loan $1,800.00 $548.89 $104.43 $1,055.93
Participant Loan $10,000.00 $2,469.54 $438.63 $7,530.46
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 1/9/98 $256.21 $5.49
Maturity: 2/1/99
Rate: 8.5%
Participant Loan Date of making: 10/6/97 $190.51 $55.97
Maturity: 11/1/01
Rate: 8.5%
Participant Loan Date of making: 8/13/98 $120.94 $10.10
Maturity: 9/1/99
Rate: 8.5%
Participant Loan Date of making: 1/20/98 $51.19 $0.00
Maturity: 2/1/00
Rate: 8.5%
Participant Loan Date of making: 12/31/93 $812.26 $100.15
Maturity: 2/28/99
Rate: 6.0%
Participant Loan Date of making: 7/22/97 $89.62 $2.72
Maturity: 8/1/02
Rate 8.5%
Participant Loan Date of making: 6/17/97 $121.02 $32.86
Maturity: 7/1/02
Rate: 8.5%
Participant Loan Date of making: 6/6/97 $98.60 $3.78
Maturity: 7/1/99
Rate: 8.5%
Participant Loan Date of making: 2/20/98 $236.28 $42.39
Maturity: 3/1/02
Rate: 8.5%
Participant Loan Date of making: 6/6/97 $49.35 $7.45
Maturity: 7/1/00
Rate: 8.5%
Participant Loan Date of making: 2/11/98 $1,083.26 $100.06
Maturity: 3/1/00
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-11-
<PAGE> 15
SCHEDULE II
2 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $1,905.00 $476.18 $83.26 $1,428.82
Participant Loan $1,198.00 $212.15 $39.25 $0.00
Participant Loan $5,000.00 $1,560.09 $244.21 $3,439.91
Participant Loan $12,000.00 $1,815.42 $769.90 $9,697.46
Participant Loan $5,000.00 $0.00 $0.00 $5,000.00
Participant Loan $1,500.00 $385.48 $37.04 $1,114.52
Participant Loan $500.00 $214.31 $17.53 $285.69
Participant Loan $2,000.00 $77.32 $13.50 $1,845.90
Participant Loan $500.00 $6.73 $5.12 $493.27
Participant Loan $7,000.00 $507.87 $287.73 $6,492.13
Participant Loan $6,000.00 $538.56 $285.33 $5,461.44
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 3/31/98 $123.43 $9.77
Maturity: 4/1/00
Rate: 8.5%
Participant Loan Date of Making: 4/17/98 $116.53 $13.36
Maturity: 5/1/00
Rate: 8.5%
Participant Loan Date of making: 2/2/98 $216.64 $24.22
Maturity: 3/1/00
Rate: 8.5%
Participant Loan Date of making: 8/25/97 $418.76 $135.24
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 7/15/97 $1,133.86 $507.26
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 6/1/98 $231.38 $0.00
Maturity: 7/1/99
Rate: 8.5%
Participant Loan Date of making: 4/30/98 $72.05 $1.87
Maturity: 5/1/99
Rate: 8.5%
Participant Loan Date of making: 10/28/97 $1,005.97 $84.47
Maturity: 11/1/99
Rate: 8.5%
Participant Loan Date of making: 6/9/98 $27.42 $12.08
Maturity: 7/1/03
Rate: 8.5%
Participant Loan Date of making: 3/6/98 $263.16 $90.44
Maturity: 4/1/03
Rate: 8.5%
Participant Loan Date of making: 3/10/98 $122.58 $38.41
Maturity: 4/1/03
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-12-
<PAGE> 16
SCHEDULE II
3 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $6,500.00 $290.88 $1,300.08 $3,207.76
Participant Loan $2,500.00 $519.80 $131.20 $1,795.23
Participant Loan $1,000.00 $566.42 $37.48 $433.58
Participant Loan $30,000.00 $6,000.00 $1,342.80 $20,500.00
Participant Loan $3,359.00 $415.46 $157.84 $2,943.54
Participant Loan $12,000.00 $1,020.01 $570.95 $10,979.99
Participant Loan $5,000.00 $863.35 $229.25 $4,136.65
Participant Loan $7,500.00 $2,004.63 $481.03 $5,126.75
Participant Loan $500.00 $90.70 $10.10 $409.30
Participant Loan $1,788.00 $268.71 $125.40 $1,471.04
Participant Loan $2,000.00 $817.76 $67.96 $1,182.24
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 3/31/97 $141.49 $24.24
Maturity: 4/1/02
Rate: 8.25%
Participant Loan Date of making: 8/11/97 $260.49 $35.42
Maturity: 9/1/00
Rate: 8.5%
Participant Loan Date of making: 3/13/98 $90.92 $3.02
Maturity: 4/1/99
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $1,000.00 $223.76
Maturity: 4/1/02
Rate: 8.25%
Participant Loan Date of making: 3/24/98 $68.35 $20.83
Maturity: 4/1/02
Rate: 8.5%
Participant Loan Date of making: 3/26/98 $301.94 $76.86
Maturity: 4/1/03
Rate: 8.5%
Participant Loan Date of making: 3/23/98 $140.78 $29.18
Maturity: 4/1/01
Rate: 8.5%
Participant Loan Date of making: 9/11/97 $319.66 $35.44
Maturity: 10/1/00
Rate: 8.5%
Participant Loan Date of making: 12/10/98 $71.24 $2.68
Maturity: 1/1/00
Rate: 8.5%
Participant Loan Date of making: 9/16/97 $35.49 $10.32
Maturity: 10/1/02
Rate: 8.5%
Participant Loan Date of making: 4/21/98 $328.25 $7.25
Maturity: 5/1/99
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-13-
<PAGE> 17
SCHEDULE II
4 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $8,000.00 $1,352.15 $521.34 $6,647.85
Participant Loan $500.00 $120.94 $10.10 $379.06
Participant Loan $688.00 $242.54 $20.80 $445.46
Participant Loan $2,500.00 $1,088.52 $132.91 $1,121.59
Participant Loan $6,200.00 $968.94 $253.70 $2,337.61
Participant Loan $4,400.00 $493.17 $147.63 $3,906.83
Participant Loan $18,000.00 $3,508.21 $805.68 $12,163.80
Participant Loan $978.00 $295.71 $47.83 $682.29
Participant Loan $12,900.00 $2,150.00 $493.00 $8,600.00
Participant Loan $5,878.00 $310.94 $163.87 $5,587.06
Participant Loan $900.00 $270.42 $56.98 $525.15
Participant Loan $1,000.00 $102.19 $54.23 $897.81
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 12/17/97 $249.40 $46.42
Maturity: 1/1/02
Rate: 8.5%
Participant Loan Date of making: 6/3/98 $82.10 $5.26
Maturity: 7/1/99
Rate: 8.5%
Participant Loan Date of making: 5/26/98 $94.08 $2.94
Maturity: 6/1/99
Rate: 8.5%
Participant Loan Date of making: 8/6/97 $134.29 $7.72
Maturity: 9/1/99
Rate: 8.5%
Participant Loan Date of making: 4/30/95 $477.68 $101.48
Maturity: 5/1/00
Rate: 9.0%
Participant Loan Date of making: 5/6/98 $165.04 $27.20
Maturity: 6/1/01
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $463.80 $67.14
Maturity: 4/1/02
Rate: 8.25%
Participant Loan Date of making: 11/24/97 $172.71 $5.02
Maturity: 12/1/99
Rate: 8.5%
Participant Loan Date of making: 1/31/97 $430.00 $84.44
Maturity: 2/1/02
Rate: 8.25%
Participant Loan Date of making: 3/2/98 $338.75 $154.68
Maturity: 4/1/03
Rate: 8.5%
Participant Loan Date of making: 6/24/97 $21.36 $0.00
Maturity: 2/18/99
Rate: 8.5%
Participant Loan Date of making: 2/25/98 $22.11 $6.33
Maturity: 3/1/03
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-14-
<PAGE> 18
SCHEDULE II
5 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $2,384.00 $176.34 $57.81 $2,207.66
Participant Loan $22,000.00 $1,700.76 $903.24 $20,299.24
Participant Loan $1,000.00 $188.59 $51.98 $811.41
Participant Loan $600.00 $44.01 $4.35 $555.99
Participant Loan $2,500.00 $462.62 $129.20 $2,037.38
Participant Loan $6,500.00 $330.96 $86.47 $23,720.07
Participant Loan $8,500.00 $724.77 $290.79 $29,662.52
Participant Loan $1,000.00 $300.69 $62.59 $583.09
Participant Loan $4,500.00 $187.71 $93.78 $4,312.29
Participant Loan $1,034.00 $0.00 $0.00 $1,034.00
Participant Loan $5,055.00 $953.33 $262.39 $4,101.67
Participant Loan $5,000.00 $622.02 $303.90 $4,377.98
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 5/5/98 $180.12 $37.35
Maturity: 4/1/99
Rate: 8.5%
Participant Loan Date of making: 2/17/98 $1,035.69 $422.55
Maturity: 3/1/03
Rate: 8.5%
Participant Loan Date of making: 2/2/98 $38.05 $5.69
Maturity: 3/1/01
Rate: 8.5%
Participant Loan Date of making: 8/4/98 $101.16 $7.65
Maturity: 9/1/99
Rate: 8.5%
Participant Loan Date of making: 1/14/98 $169.47 $27.81
Maturity: 2/1/01
Rate: 8.5%
Participant Loan Date of making: 6/3/97 $1,726.60 $317.65
Maturity: 7/1/00
Rate: 8.5%
Participant Loan Date of making: 5/27/98 $186.88 $54.92
Maturity: 6/1/02
Rate: 8.5%
Participant Loan Date of making: 6/13/97 $23.70 $0.00
Maturity: 7/1/00
Rate: 8.5%
Participant Loan Date of making: 3/6/98 $25.59 $0.00
Maturity: 4/21/99
Rate: 8.5%
Participant Loan Date of making: 6/11/98 $420.16 $30.94
Maturity: 7/1/99
Rate: 8.5%
Participant Loan Date of making: 2/18/98 $192.33 $28.71
Maturity: 3/1/01
Rate: 8.5%
Participant Loan Date of making: 12/9/97 $143.67 $58.68
Maturity: 1/1/03
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-15-
<PAGE> 19
SCHEDULE II
6 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $4,000.00 $409.30 $205.93 $3,428.27
Participant Loan $3,888.00 $554.22 $283.00 $3,333.78
Participant Loan $6,000.00 $1,200.00 $268.56 $4,200.00
Participant Loan $1,000.00 $188.48 $19.53 $811.52
Participant Loan $22,000.00 $2,274.89 $1,187.13 $19,725.11
Participant Loan $1,300.00 $0.00 $0.00 $1,288.74
Participant Loan $5,200.00 $684.16 $155.12 $3,669.21
Participant Loan $4,875.00 $36.46 $34.58 $4,838.54
Participant Loan $6,106.00 $741.22 $287.02 $5,364.78
Participant Loan $6,617.00 $0.00 $0.00 $6,617.00
Participant Loan $551.00 $46.25 $22.60 $508.35
Participant Loan $1,698.00 $154.45 $80.72 $1,543.55
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 8/15/97 $275.87 $93.26
Maturity: 9/1/02
Rate: 8.5%
Participant Loan Date of making: 11/18/97 $97.22 $23.40
Maturity: 12/1/02
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $300.00 $67.14
Maturity: 3/1/02
Rate: 8.25%
Participant Loan Date of making: 7/17/98 $135.55 $5.36
Maturity: 8/1/99
Rate: 8.5%
Participant Loan Date of making: 1/28/98 $776.48 $275.10
Maturity: 2/1/03
Rate: 8.5%
Participant Loan Date of making: 7/9/97 $525.74 $111.00
Maturity: 8/1/00
Rate: 8.5%
Participant Loan Date of making: 1/31/97 $375.95 $77.56
Maturity: 2/1/02
Rate: 8.25%
Participant Loan Date of making: 2/18/98 $1,068.62 $245.62
Maturity: 3/1/01
Rate: 8.5%
Participant Loan Date of making: 3/24/98 $138.21 $37.87
Maturity: 4/1/02
Rate: 8.5%
Participant Loan Date of making: 2/25/98 $729.22 $398.10
Maturity: 3/1/03
Rate: 8.5%
Participant Loan Date of making: 3/26/98 $18.13 $7.10
Maturity: 4/1/03
Rate: 8.5%
Participant Loan Date of making: 3/16/98 $32.68 $10.87
Maturity: 4/1/03
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-16-
<PAGE> 20
SCHEDULE II
7 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $6,000.00 $700.84 $345.59 $5,055.59
Participant Loan $30,000.00 $4,593.02 $2,225.38 $25,406.98
Participant Loan $939.00 $108.97 $18.95 $830.03
Participant Loan $1,000.00 $36.97 $14.06 $963.03
Participant Loan $16,500.00 $2,574.90 $1,143.25 $13,255.42
Participant Loan $5,000.00 $1,406.14 $290.40 $3,012.37
Participant Loan $13,600.00 $2,720.04 $530.76 $2,719.84
Participant Loan $2,194.00 $468.26 $83.98 $1,725.74
Participant Loan $4,500.00 $988.92 $286.32 $3,165.54
Participant Loan $10,000.00 $890.82 $341.58 $9,109.18
Participant Loan $2,090.00 $0.00 $0.00 $2,090.00
Participant Loan $10,000.00 $2,564.14 $592.26 $6,944.38
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 8/5/97 $326.65 $104.24
Maturity: 9/1/02
Rate: 8.5%
Participant Loan Date of making: 10/13/97 $874.11 $309.64
Maturity: 11/1/02
Rate: 8.5%
Participant Loan Date of making: 4/29/98 $148.88 $21.68
Maturity: 5/1/00
Rate: 8.5%
Participant Loan Date of making: 4/20/98 $189.67 $43.61
Maturity: 5/1/00
Rate: 8.5%
Participant Loan Date of making: 8/18/97 $250.25 $93.84
Maturity: 9/1/02
Rate: 8.5%
Participant Loan Date of making: 6/17/97 $215.98 $20.76
Maturity: 7/1/00
Rate: 8.5%
Participant Loan Date of making: 8/31/94 $453.34 $88.46
Maturity: 10/1/99
Rate: 7.25%
Participant Loan Date of making: 4/20/98 $133.86 $11.87
Maturity: 5/1/00
Rate: 8.5%
Participant Loan Date of making: 6/17/97 $88.51 $22.37
Maturity: 7/1/01
Rate: 8.5%
Participant Loan Date of making: 4/28/98 $365.23 $127.73
Maturity: 5/1/02
Rate: 8.5%
Participant Loan Date of making: 8/20/98 $242.25 $42.84
Maturity: 9/1/00
Rate: 8.5%
Participant Loan Date of making: 9/24/97 $534.89 $96.39
Maturity: 10/1/00
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-17-
<PAGE> 21
SCHEDULE II
8 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $9,000.00 $2,981.76 $427.68 $1,313.48
Participant Loan $5,000.00 $790.51 $229.25 $4,209.49
Participant Loan $2,000.00 $563.44 $147.32 $1,436.56
Participant Loan $8,000.00 $1,051.86 $466.90 $6,623.26
Participant Loan $5,000.00 $701.36 $265.60 $4,298.64
Participant Loan $3,500.00 $522.12 $249.30 $2,930.82
Participant Loan $2,094.00 $644.50 $102.14 $1,449.50
Participant Loan $10,000.00 $1,990.36 $447.48 $6,720.73
Participant Loan $9,000.00 $864.75 $435.45 $8,135.25
Participant Loan $3,000.00 $1,145.90 $149.61 $1,506.27
Participant Loan $2,400.00 $480.00 $107.52 $1,492.24
Participant Loan $1,983.00 $360.43 $140.59 $1,622.57
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 1/31/96 $568.11 $71.28
Maturity: 6/10/99
Rate: 8.5%
Participant Loan Date of making: 3/19/98 $213.62 $29.18
Maturity: 4/1/01
Rate: 8.5%
Participant Loan Date of making: 11/24/97 $47.40 $0.00
Maturity: 12/1/00
Rate: 8.5%
Participant Loan Date of making: 8/15/97 $406.74 $167.93
Maturity: 6/13/99
Rate: 8.5%
Participant Loan Date of making: 2/17/98 $111.89 $30.31
Maturity: 3/1/02
Rate: 8.5%
Participant Loan Date of making: 10/9/97 $69.14 $20.56
Maturity: 11/1/02
Rate: 8.5%
Participant Loan Date of making: 2/18/98 $99.67 $10.13
Maturity: 3/1/00
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $54.13 $0.00
Maturity: 4/1/02
Rate: 8.5%
Participant Loan Date of making: 2/26/98 $255.02 $106.18
Maturity: 3/1/03
Rate: 8.5%
Participant Loan Date of making: 8/25/97 $321.46 $19.47
Maturity: 9/1/99
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $132.24 $26.88
Maturity: 4/1/02
Rate: 8.25%
Participant Loan Date of making: 11/12/97 $74.31 $11.23
Maturity: 12/1/02
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-18-
<PAGE> 22
SCHEDULE II
9 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $1,000.00 $168.80 $67.40 $773.41
Participant Loan $600.00 $23.08 $8.42 $576.92
Participant Loan $20,000.00 $1,362.69 $720.27 $18,637.31
Participant Loan $4,000.00 $833.40 $147.80 $1,573.39
Participant Loan $8,000.00 $679.78 $381.14 $7,320.22
Participant Loan $4,036.00 $1,553.37 $235.08 $2,482.63
Participant Loan $20,500.00 $1,578.24 $841.30 $18,921.76
Participant Loan $3,000.00 $231.07 $41.67 $2,768.93
Participant Loan $1,000.00 $107.09 $41.13 $829.91
Participant Loan $677.00 $27.12 $422.34 $254.66
Participant Loan $4,000.00 $999.43 $175.73 $3,000.57
Participant Loan $7,000.00 $1,400.04 $313.32 $4,773.68
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 6/30/97 $15.06 $5.50
Maturity: 7/1/02
Rate: 8.5%
Participant Loan Date of making: 8/28/98 $46.44 $3.96
Maturity: 9/1/00
Rate: 8.5%
Participant Loan Date of making: 4/27/98 $558.67 $230.33
Maturity: 5/1/03
Rate: 8.5%
Participant Loan Date of making: 3/31/97 $323.61 $44.34
Maturity: 4/1/01
Rate: 8.25%
Participant Loan Date of making: 3/31/98 $201.29 $51.31
Maturity: 4/1/03
Rate: 8.5%
Participant Loan Date of making: 12/29/97 $212.06 $17.22
Maturity: 1/1/00
Rate: 8.5%
Participant Loan Date of making: 4/29/98 $391.08 $133.23
Maturity: 5/1/03
Rate: 8.5%
Participant Loan Date of making: 7/17/98 $272.74 $42.48
Maturity: 3/15/99
Rate: 8.5%
Participant Loan Date of making: 12/11/97 $92.82 $30.46
Maturity: 1/1/02
Rate: 8.5%
Participant Loan Date of making: 2/20/98 $80.10 $1.62
Maturity: 5/13/99
Rate: 8.5%
Participant Loan Date of making: 3/2/98 $259.18 $20.62
Maturity: 4/1/00
Rate: 8.5%
Participant Loan Date of making: 2/28/97 $223.75 $26.11
Maturity: 3/1/02
Rate: 8.25%
</TABLE>
The accompanying notes are an integral part of this schedule
-19-
<PAGE> 23
SCHEDULE II
10 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $2,100.00 $47.04 $188.58 $1,561.42
Participant Loan $6,000.00 $2,000.04 $264.60 $2,833.27
Participant Loan $7,000.00 $1,198.35 $525.45 $5,517.61
Participant Loan $3,500.00 $472.34 $139.66 $3,021.66
Participant Loan $4,300.00 $1,011.86 $174.79 $1,459.49
Participant Loan $7,500.00 $1,718.77 $305.03 $4,577.23
Participant Loan $1,900.00 $479.53 $41.88 $757.85
Participant Loan $2,058.00 $313.44 $140.74 $1,632.86
Participant Loan $832.00 $54.23 $28.30 $777.77
Participant Loan $3,000.00 $1,332.85 $94.30 $3,000.00
Participant Loan $8,000.00 $1,251.41 $320.40 $3,610.11
Participant Loan $6,800.00 $1,690.22 $402.63 $4,775.76
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 1/31/97 $213.42 $47.04
Maturity: 2/1/02
Rate: 8.25%
Participant Loan Date of making: 2/28/97 $333.34 $33.35
Maturity: 3/1/00
Rate: 8.25%
Participant Loan Date of making: 6/2/97 $209.80 $41.58
Maturity: 7/1/02
Rate: 8.5%
Participant Loan Date of making: 4/3/98 $140.40 $21.10
Maturity: 5/1/01
Rate: 8.5%
Participant Loan Date of making: 2/29/96 $115.96 $15.98
Maturity: 3/1/00
Rate: 8.25%
Participant Loan Date of making: 3/31/97 $358.48 $55.46
Maturity: 4/1/01
Rate: 8.25%
Participant Loan Date of making: 3/31/97 $520.42 $41.88
Maturity: 4/1/99
Rate: 8.25%
Participant Loan Date of making: 7/11/97 $41.30 $11.52
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 5/20/98 $14.23 $5.42
Maturity: 6/1/03
Rate: 8.5%
Participant Loan Date of making: 9/25/98 $105.73 $42.21
Maturity: 10/1/02
Rate: 8.5%
Participant Loan Date of making: 4/30/95 $1,109.31 $152.79
Maturity: 5/1/00
Rate: 9.0%
Participant Loan Date of making: 9/3/97 $417.38 $65.53
Maturity: 10/1/00
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-20-
<PAGE> 24
SCHEDULE II
11 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $2,500.00 $343.55 $157.11 $2,020.83
Participant Loan $4,452.00 $600.93 $177.39 $3,851.07
Participant Loan $3,670.00 $489.83 $225.22 $2,930.05
Participant Loan $11,000.00 $1,223.08 $653.18 $9,629.15
Participant Loan $8,000.00 $1,969.02 $431.05 $5,100.93
Participant Loan $2,000.00 $312.18 $137.12 $1,587.01
Participant Loan $1,258.00 $0.00 $0.00 $1,258.00
Participant Loan $7,000.00 $1,604.24 $294.68 $3,062.32
Participant Loan $2,500.00 $298.33 $84.08 $2,201.67
Participant Loan $4,200.00 $791.50 $172.26 $2,912.76
Participant Loan $5,500.00 $148.30 $112.10 $5,351.70
Participant Loan $7,500.00 $0.00 $0.00 $6,038.23
</TABLE>
<TABLE>
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 7/22/97 $115.54 $0.00
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 3/6/98 $293.12 $52.80
Maturity: 4/1/01
Rate: 8.5%
Participant Loan Date of making: 6/11/97 $147.68 $40.51
Maturity: 7/1/02
Rate: 8.5%
Participant Loan Date of making: 10/7/97 $633.97 $197.93
Maturity: 11/1/02
Rate: 8.5%
Participant Loan Date of making: 6/30/97 $626.02 $68.14
Maturity: 7/1/00
Rate: 8.5%
Participant Loan Date of making: 7/29/97 $40.12 $11.23
Maturity: 8/1/02
Rate: 8.5%
Participant Loan Date of making: 8/27/98 $145.82 $25.78
Maturity: 9/1/00
Rate: 8.5%
Participant Loan Date of making: 6/30/96 $291.68 $41.76
Maturity: 7/1/00
Rate: 8.25%
Participant Loan Date of making: 5/28/98 $75.56 $15.49
Maturity: 6/1/01
Rate: 8.5%
Participant Loan Date of making: 12/31/96 $322.76 $15.49
Maturity: 1/1/02
Rate: 8.25%
Participant Loan Date of making: 7/13/98 $150.41 $40.55
Maturity: 8/1/03
Rate: 8.5%
Participant Loan Date of making: 8/31/96 $1,913.23 $419.70
Maturity: 9/1/01
Rate: 8.25%
</TABLE>
The accompanying notes are an integral part of this schedule
-21-
<PAGE> 25
SCHEDULE II
12 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $10,000.00 $1,192.73 $602.24 $8,807.27
Participant Loan $7,643.00 $1,253.11 $86.59 $7,436.51
Participant Loan $3,000.00 $813.31 $205.65 $2,186.87
Participant Loan $2,500.00 $312.86 $149.29 $2,153.59
Participant Loan $10,000.00 $543.16 $277.40 $9,456.84
Participant Loan $6,480.00 $351.81 $200.61 $6,128.19
Participant Loan $1,967.00 $43.35 $14.01 $1,923.65
Participant Loan $6,000.00 $1,200.00 $268.56 $3,330.60
Participant Loan $1,000.00 $420.71 $57.03 $513.69
Participant Loan $2,500.00 $585.97 $95.75 $1,914.03
Participant Loan $25,000.00 $3,025.18 $1,463.39 $21,300.86
Participant Loan $2,500.00 $601.61 $148.03 $1,775.51
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 3/11/98 $194.45 $61.98
Maturity: 2/1/02
Rate: 8.5%
Participant Loan Date of making: 9/17/98 $382.25 $51.95
Maturity: 10/1/00
Rate: 8.5%
Participant Loan Date of making: 2/18/99 $103.06 $15.40
Maturity: 3/1/02
Rate: 8.5%
Participant Loan Date of making: 10/21/97 $108.81 $45.24
Maturity: 11/1/02
Rate: 8.5%
Participant Loan Date of making: 4/17/98 $417.54 $197.88
Maturity: 5/1/03
Rate: 8.5%
Participant Loan Date of making: 2/18/98 $453.98 $190.51
Maturity: 3/1/03
Rate: 8.5%
Participant Loan Date of making: 9/14/98 $53.25 $13.67
Maturity: 10/1/01
Rate: 8.5%
Participant Loan Date of making: 7/31/96 $130.06 $22.38
Maturity: 8/1/01
Rate: 8.5%
Participant Loan Date of making: 9/29/97 $76.19 $3.43
Maturity: 10/1/99
Rate: 8.5%
Participant Loan Date of making: 4/17/98 $100.09 $13.53
Maturity: 5/1/00
Rate: 8.5%
Participant Loan Date of making: 9/19/97 $1,224.74 $442.45
Maturity: 10/1/02
Rate: 8.5%
Participant Loan Date of making: 9/22/97 $173.19 $24.09
Maturity: 10/1/00
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-22-
<PAGE> 26
SCHEDULE II
13 OF 13
GENERAL DYNAMICS HOURLY SAVINGS AND STOCK INVESTMENT PLAN
LINE 27b -- SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
<TABLE>
<CAPTION>
Amount received (f) Unpaid
(c) Original during reporting year balance at
(b) Identity of obligator amount of loan (d) Principal (e) Interest end of year
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participant Loan $1,500.00 $429.78 $74.22 $1,070.22
Participant Loan $1,800.00 $91.02 $22.60 $1,530.75
Participant Loan $3,600.00 $406.82 $120.98 $3,193.18
Participant Loan $5,000.00 $747.76 $199.16 $4,252.24
<CAPTION>
(g) 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
(b) Identity of obligator and other material items (h) Principal (i) Interest
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Participant Loan Date of making: 2/24/98 $102.89 $7.36
Maturity: 3/1/00
Rate: 8.5%
Participant Loan Date of making: 12/3/98 $474.81 $93.29
Maturity: 11/1/01
Rate: 8.5%
Participant Loan Date of making: 2/13/98 $409.50 $85.28
Maturity: 3/1/01
Rate: 8.5%
Participant Loan Date of making: 3/31/98 $256.37 $59.27
Maturity: 4/1/01
Rate: 8.5%
</TABLE>
The accompanying notes are an integral part of this schedule
-23-
<PAGE> 27
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
GENERAL DYNAMICS CORPORATION
As Plan Administrator of the General Dynamics
Corporation Hourly Employees Savings and
Stock Investment Plan
By /s/ David A. Savner
--------------------------
David A. Savner
Secretary
Dated: June 30, 1999
-24-
<PAGE> 28
EXHIBIT 23
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 30, 1999
-25-
