When will Nicholas D. Chabraja step down as CEO?

Nicholas D. Chabraja will step down as CEO on June 30, 2009, as per his employment agreement. He will continue to serve as Chairman of the Board through the annual shareholders meeting in May 2010.

Who is Jay L. Johnson and what is his background?

Jay L. Johnson is currently the Chief Executive Officer of Dominion Virginia Power and has a background as an executive at Dominion Resources, Inc. He previously had a distinguished career as an officer in the U.S. Navy, retiring as an Admiral and serving as Chief of Naval Operations.

What is the compensation package for Jay L. Johnson?

Mr. Johnson will receive an initial base salary of $845,000. He will be eligible for company benefit programs, bonuses, and long-term equity grants starting in 2009. Notably, he will receive an initial equity grant valued at $2,600,000 to offset lost pension benefits and forfeited stock from his previous employer.

What is a severance protection agreement and why is Mr. Johnson receiving one?

A severance protection agreement is designed to provide Mr. Johnson with specified payments and benefits if his employment is terminated without cause or if he resigns for good reason within 24 months after a change of control of General Dynamics. This type of agreement is standard for executive officers and key employees to ensure stability and security during potential transitional periods, especially upon taking a CEO role.

GD 8-K: Leadership Changes

Summary

This 8-K filing from General Dynamics Corporation (GD) announces a significant leadership transition plan. Chairman and CEO Nicholas D. Chabraja will step down as CEO on June 30, 2009, but will remain as Chairman of the Board until May 2010. The company has appointed Jay L. Johnson, currently a board member and CEO of Dominion Virginia Power, to become Vice Chairman and an executive officer starting September 2, 2008, and will succeed Mr. Chabraja as CEO on July 1, 2009. Mr. Johnson's compensation package includes a base salary of $845,000, eligibility for bonuses and equity grants, and a substantial initial equity grant valued at $2,600,000 plus additional amounts to offset forfeited benefits and stock from his previous employer. He will also be subject to the company's stock ownership guidelines and will enter into a severance protection agreement.

Key Highlights

1Nicholas D. Chabraja, current Chairman and CEO, will transition from CEO on June 30, 2009, and continue as Chairman until May 2010.
2Jay L. Johnson, currently a board member and CEO of Dominion Virginia Power, to be appointed Vice Chairman and executive officer on September 2, 2008.
3Jay L. Johnson is slated to become the new CEO on July 1, 2009.
4Mr. Johnson's initial base salary will be $845,000.
5Significant equity grant for Mr. Johnson valued at $2,600,000 to compensate for forfeited benefits and stock from his prior role.
6Mr. Johnson will be subject to General Dynamics' stock ownership guidelines.
7A severance protection agreement will be in place for Mr. Johnson, providing benefits in case of termination under specific change-of-control scenarios.

GENERAL DYNAMICS CORP 8-K Report, Executive Changes (May 8, 2008)

Summary

Key Highlights

Frequently Asked Questions