General Dynamics Corp PRE 14A, filed Mar 14, 2023

General Dynamics Corp (GD)

PRE 14A 2023-03-14

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Proposal		Board Recommendation	Additional Information
1	Election of Directors	“FOR” each nominee	See pages 12 through 21 for more information on the nominees
2	Vote to Approve Amendment to Delaware Charter to Limit Liability of Officers as Permitted by Law	“FOR”	See page 39 for details
3	Advisory Vote on the Selection of Independent Auditors	“FOR”	See page 40 for details
4	Advisory Vote to Approve Executive Compensation	“FOR”	See page 42 for details
5	Advisory Vote on the Frequency of Future Executive Compensation Advisory Votes	“FOR” 1 YEAR	See page 43 for details
6	Shareholder Proposal — Human Rights Impact Assesment	“AGAINST”	See pages 90 through 92 for details
7	Shareholder Proposal — Independent Board Chairman	“AGAINST”	See pages 93 through 95 for details

	INTERNET Access www.ProxyVote.com and follow the instructions.
	MAIL Sign and date each proxy card received and return each card using the prepaid postage envelope.
	TELEPHONE Call 1-800-690-6903 if you are a registered holder. If you are a beneficial holder, call the phone number listed on your voter instruction form.
	ATTEND THE VIRTUAL MEETING To be admitted to the virtual meeting, you must register in advance by accessing www.ProxyVote.com and following the instructions by 11:59 p.m. Eastern Time on April 28, 2023. Once registered, you can access the virtual meeting at www.VirtualShareholderMeeting.com/ GD2023.

PROPOSAL 1 ELECTION OF DIRECTORS
The Board recommends a vote FOR all director nominees.		See page 12

PROPOSAL 2 VOTE TO APPROVE AMENDMENT TO DELAWARE CHARTER TO LIMIT LIABILITY OF OFFICERS AS PERMITTED BY LAW
The Board recommends a vote FOR this proposal.		See page 39

PROPOSAL 3 ADVISORY VOTE ON THE SELECTION OF INDEPENDENT AUDITORS
The Board recommends a vote FOR this proposal.		See page 40

PROPOSAL 4 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
The Board recommends a vote FOR this proposal.		See page 42

PROPOSAL 5 ADVISORY VOTE ON THE FREQUENCY OF FUTURE EXECUTIVE COMPENSATION ADVISORY VOTES
The Board recommends a vote FOR 1 YEAR for this proposal.		See page 43

PROPOSAL 6 SHAREHOLDER PROPOSAL — HUMAN RIGHTS IMPACT ASSESSMENT
✘ The Board recommends a vote AGAINST this proposal.		See page 90

PROPOSAL 7 SHAREHOLDER PROPOSAL — INDEPENDENT BOARD CHAIRMAN
✘ The Board recommends a vote AGAINST this proposal.		See page 93

$39.4 billion	$12.19	$3.4 billion	$1.26 per share
REVENUE	DILUTED EARNINGS PER SHARE (EPS)	NET EARNINGS	QUARTERLY DIVIDEND
2.4% increase from 2021 despite some challenges, such as supply chain disruptions and other headwinds	Record high; Exceeded our EPS projections for the year	Fifth-straight year of net earnings in excess of $3 billion	25th consecutive year with a dividend increase
12.6%	10.7%	$4.6 billion	$91.1 billion
RETURN ON INVESTED CAPITAL (ROIC)⁽¹⁾	OPERATING MARGIN	NET CASH PROVIDED BY OPERATING ACTIVITIES	BACKLOG
Strong results from a period of significant investment in our business over the past 10 years	Solid double-digit performance	Highest-ever cash from operations; Facilitated the return of $2.6 billion to shareholders through dividends and share repurchases	Highest in the company’s history

Name and Primary Occupation		Independent	Director Since	Other Public Company Boards	Committee Membership
Name and Primary Occupation		Independent	Director Since	Other Public Company Boards	AC	CC	FBPC	NCGC	SC
	RICHARD D. CLARKE Former Commander of U.S. Special Operations Command and Retired General, U.S. Army		2023
	JAMES S. CROWN Lead Director Chairman and CEO, Henry Crown and Company		1987	1
	RUDY F. DELEON Senior Fellow, Center for American Progress		2014
	CECIL D. HANEY Retired Admiral, U.S. Navy		2019	1
	MARK M. MALCOLM Former President and CEO, Tower International, Inc.		2015
	JAMES N. MATTIS Former United States Secretary of Defense and Retired General, U.S. Marine Corps		2019
	PHEBE N. NOVAKOVIC Chairman and CEO, General Dynamics Corporation		2012	1
	C. HOWARD NYE Chairman, President and CEO, Martin Marietta Materials, Inc.		2018	1
	CATHERINE B. REYNOLDS Chairman and CEO, EduCap, Inc.		2017	1
	LAURA J. SCHUMACHER Former Vice Chairman, External Affairs and Chief Legal Counsel, AbbVie Inc.		2014	1
	ROBERT K. STEEL Vice Chairman & Partner, Perella Weinberg Partners		2021	2
	JOHN G. STRATTON Executive Chairman, Frontier Communications Parent, Inc.		2020	2
	PETER A. WALL Retired General, British Army		2016
Committee Chair Committee Member					AC = Audit Committee CC = Compensation Committee FBPC = Finance and Benefit Plans Committee NCGC = Nominating and Corporate Governance Committee SC = Sustainability Committee

Governance Practice		For more information
Stock Ownership	• *Market-leading stock ownership requirements* provide that executive officers must hold shares of our Common Stock worth at least 8 to 15 times of base salary.	P. 70
	• We *prohibit hedging and pledging* of our Common Stock by directors and executive officers.	P. 71
Board Structure and Governance	• Thoughtful *Board refreshment* supports *Board diversity* and a balanced mix of new and more seasoned directors with an average tenure of 7.8 years.	P. 8
	• An *independent Lead Director* with a robust set of responsibilities is elected annually by the Board and provides additional independent oversight of senior management and Board matters.	P. 23
	• 12 of our 13 director nominees are *independent*. All of our Board committees are chaired by independent directors and are 100% independent.	P. 21
	• Our independent directors meet in *executive sessions*, chaired by the Lead Director, without management present following each regularly scheduled Board meeting.	P. 30
	• Our directors *attended 100% of Board and committee meetings* in 2022.	P. 30
	• Diligent *Board oversight of risk* is a cornerstone of our risk management program.	P. 27
	• The Board and each committee conduct *annual self-assessments* of their performance and effectiveness.	P. 35
	• Our *related person transactions policy* ensures appropriate Board review of related person transactions.	P. 36
	• Our directors are *elected annually* based on a *majority voting standard* for uncontested elections. We have a *resignation policy* if a director fails to receive a majority of votes cast.	P. 98; Bylaws*
	• We *prevent overboarding* by providing that directors may not serve on more than four other public company boards, and Audit Committee members may not serve on the audit committees of more than two other public companies.	CGG*
Corporate Responsibility and Sustainability	• The Board’s fully-independent *Sustainability Committee* assists the Board in overseeing corporate practices relating to sustainability, including environmental, health, safety, human rights and social matters.	SC Charter*
	• In December 2022, we released an updated *Corporate Sustainability Report* that discusses our Ethos, our commitment to our stakeholders and communities, our efforts to *reduce greenhouse gas (GHG) emissions, and our commitment to diversity and inclusion*.	CSR**
	• Our *ethics program* includes *strong Codes of Ethics* for all employees globally, with specific codes for our directors and financial professionals.	GD Website**
	• Disclosure of our *corporate political contributions* and *trade association dues* describes the process and oversight we employ in each area.	GD Website***
	• We have a strong corporate commitment to respecting the *dignity, human rights* and *autonomy* of others.	CSR; GD Website
Shareholder Rights	• Our *proxy access Bylaws* enable shareholders meeting the requirements in our Bylaws to nominate director candidates and have those nominees included in our proxy statement.	Bylaws*
	• We *do not have a shareholder rights plan*, or poison pill. Any such future plan would require shareholder approval.	CGG*
	• Our Bylaws do not restrict shareholders’ rights under Delaware law to *act by written consent*.	Bylaws*
	• Our shareholders have the right to request a *special meeting* of shareholders.	Bylaws*
	• *Voting rights are proportional* to economic interests. One share equals one vote.	Certificate of Incorporation*
* Our Corporate Governance Guidelines (CGG), Certificate of Incorporation, Bylaws and Sustainability Committee Charter (SC Charter) are available on our website at www.gd.com/CorporateGovernance. Our Standards of Business Ethics and Conduct, Codes of Ethics, Corporate Sustainability Report (CSR) and Human Rights Policy are available on our website at www.gd.com/Responsibility. * See www.gd.com/AdditionalDisclosure.

In 2022, we reached out to shareholders representing approximately:	KEY ITEMS DISCUSSED WITH SHAREHOLDERS IN 2022
	Board of Directors and Corporate Governance	• Board refreshment and succession planning • Risk oversight • Board structure and independence • Director diversity
	Executive Compensation	• Program structure, including role of equity compensation • Pay-for-performance alignment • Strong shareholder support for 2022 say-on-pay vote
	Corporate Responsibility and Sustainability	• Board oversight, including Sustainability Committee • GHG emissions target and climate risk • Human capital management, including diversity and inclusion • Human rights

Age: 60 Director since: February 2023 INDEPENDENT Committees: • Nominating and Corporate Governance	RICHARD D. CLARKE
	BACKGROUND • Commander, U.S. Special Operations Command (USSOCOM), 2019 to 2022 • Director for Strategy Plans and Policy (J5), 2016 to 2019 • Commander, 82^nd Airborne Division, 2014 to 2016; 74th Commandant of Cadets, U.S. Military Academy at West Point, 2013 to 2014; Deputy Commanding General for Operations, 10th Mountain Division, 2011 to 2013	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. Clarke, a four-star U.S. Army General, retired from the U.S. military after nearly four decades of leading complex and diverse organizations at every level, including over 15 years internationally with more than 10 combat deployments to Iraq and Afghanistan. As Commander of USSOCOM, he led a joint force of over 75,000 military members with an annual operating budget of in excess of $25 billion. Further, he directed global deployments to conduct some of the nation’s most sensitive and critical missions, advising the Secretary of Defense directly on human capital, strategy and mission risks. Mr. Clarke brings to the Board a deep understanding of current global security issues, as well as insight into practical considerations underlying strategic and risk assessment analyses in the defense industry.

Age: 69 Director since: May 1987 INDEPENDENT Committees: • Audit • Compensation • Nominating and Corporate Governance • Sustainability	JAMES S. CROWN — Lead Director
	BACKGROUND • Lead Director since May 2010 • Chairman and Chief Executive Officer of Henry Crown and Company since 2018; President of Henry Crown and Company, 2002 to 2018; Vice President of Henry Crown and Company, 1985 to 2002 • Mr. Crown currently serves as a director of J.P. Morgan Chase & Co.	KEY ATTRIBUTES/SKILLS/EXPERIENCE As the longest-serving member of our Board and a significant shareholder, Mr. Crown has an abundance of knowledge regarding General Dynamics and our history. As chairman and chief executive officer of Henry Crown and Company, a private investment firm with diversified interests, Mr. Crown has broad experience in business management and capital deployment strategies. His many years of service as a director of our company and other large public companies provide him with a deep understanding of the roles and responsibilities of a board of a public company, including those of a lead director.

Age: 70 Director since: September 2014 INDEPENDENT Committees: • Compensation • Finance and Benefit Plans • Sustainability	RUDY F. DELEON
	BACKGROUND • Senior Fellow with the Center for American Progress since 2007 • Senior Vice President of The Boeing Company, 2001 to 2006 • Deputy Secretary of Defense, 2000 to 2001; Undersecretary of Defense for Personnel and Readiness, 1997 to 2000 • Undersecretary of the U.S. Air Force, 1994 to 1997	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. deLeon’s experience as the second-highest ranking civilian official in the U.S. Department of Defense and as a foreign policy and military advisor gives him a keen understanding of the complexities of the U.S. military and the defense industry. His experience in government, combined with his leadership at The Boeing Company as a senior vice president leading all U.S. federal, state and local government liaison operations, provides him with a deep understanding of the aerospace and defense industry, enabling him to serve General Dynamics with valuable perspectives on the business.

Age: 67 Director since: March 2019 INDEPENDENT Committees: • Audit • Nominating and Corporate Governance (Chair)	CECIL D. HANEY
	BACKGROUND • Retired Admiral, U.S. Navy; Commander, U.S. Strategic Command, 2013 to 2016; Commander, U.S. Pacific Fleet, 2012 to 2013 • Mr. Haney currently serves as a director of Tenet Healthcare Corporation.	KEY ATTRIBUTES/SKILLS/EXPERIENCE Prior to retiring from the U.S. Navy at the rank of Admiral, Mr. Haney served as Commander of the U.S. Strategic Command and Commander of the U.S. Pacific Fleet. His leadership positions, particularly with U.S. Strategic Command, required extensive knowledge about the role of advanced technologies and cybersecurity in the national security of the United States. During his service, Mr. Haney also gained broad global experience in managing complex operational and budgetary issues. His nearly four-decade career with the U.S. Navy gives him valuable insight into key aspects of the defense industry and national security priorities. Mr. Haney’s engineering and national security educational backgrounds, together with his extensive experience with advanced technologies and cyber matters, position him as a valuable advisor to our businesses.

Age: 69 Director since: August 2015 INDEPENDENT Committees: • Audit • Finance and Benefit Plans	MARK M. MALCOLM
	BACKGROUND • President and Chief Executive Officer of Tower International, Inc., 2007 to 2016 • Senior Advisor, Cerberus Capital Management, 2006 to 2007 • Executive Vice President and Controller of Ford Motor Credit, 2004 to 2005; Director of Finance and Strategy, Global Purchasing, of Ford Motor Company, 2002 to 2004 • Mr. Malcolm served as a director of Tower International, Inc., then a public company, within the past five years.	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. Malcolm’s senior executive positions at Tower International, Inc. and Ford provide him with critical knowledge of the management, financial and operational requirements of a large company. In these positions, Mr. Malcolm gained extensive experience in dealing with accounting principles and financial reporting, evaluating financial results and the financial reporting process of a public company. Mr. Malcolm brings to the Board a broad knowledge of the complex business issues facing a public company in areas such as risk management, global supply chain management and corporate governance. Based on his experience, the Board has determined that Mr. Malcolm is an Audit Committee Financial Expert.

Age: 72 Director since: August 2019 INDEPENDENT Committees: • Audit • Nominating and Corporate Governance	JAMES N. MATTIS
	BACKGROUND • Senior Counselor, The Cohen Group since 2019 • United States Secretary of Defense, 2017 to 2019 • Retired General, U.S. Marine Corps; Commander, United States Central Command, 2010 to 2013; Commander, U.S. Joint Forces Command, 2007 to 2010; NATO Supreme Allied Commander Transformation, 2007 to 2009 • Mr. Mattis previously served as a director of the company from August 2013 to January 2017	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. Mattis served as the U.S. Secretary of Defense, after having had a distinguished career in the U.S. Marine Corps. He served as Commander, U.S. Central Command and Commander, U.S. Joint Forces as well as NATO Supreme Allied Commander Transformation. Mr. Mattis’ unique perspective and experiences with U.S. and foreign military strategy and operations, including NATO operations, provide him with valuable insight into international and government affairs and the global defense industry. Mr. Mattis’ leadership positions also required extensive understanding of advanced technologies and cybersecurity. His demonstrated leadership and strategic skills make him well-equipped to advise on strategic opportunities and risks associated with our aerospace and defense businesses.

Age: 65 Director since: May 2012 Committees: • None	PHEBE N. NOVAKOVIC
Age: 65 Director since: May 2012 Committees: • None	BACKGROUND • Chairman and Chief Executive Officer of General Dynamics since January 2013; President and Chief Operating Officer, May 2012 to December 2012; Executive Vice President, Marine Systems, May 2010 to May 2012; Senior Vice President, Planning and Development, July 2005 to May 2010; Vice President, Strategic Planning, October 2002 to July 2005 • Ms. Novakovic currently serves as a director of J.P. Morgan Chase & Co. She served as a director of Abbott Laboratories within the past five years.	KEY ATTRIBUTES/SKILLS/EXPERIENCE Ms. Novakovic’s service as a senior officer of General Dynamics since 2002 makes her a valuable and trusted leader. Through her roles as chairman and chief executive officer, president and chief operating officer, and executive vice president, Marine Systems, she has developed a deep understanding of the company’s business operations, growth opportunities, risks and challenges. As senior vice president, planning and development, she gained a strong understanding of our core customers and the global marketplace in which we operate. Ms. Novakovic’s current service as a public company director provides her with a valuable perspective on corporate governance matters and the roles and responsibilities of a public company board.

Age: 60 Director since: May 2018 INDEPENDENT Committees: • Audit (Chair) • Compensation	C. HOWARD NYE
	BACKGROUND • Chairman of Martin Marietta Materials, Inc. since 2014 and President and CEO since 2010; President and Chief Operating Officer, 2006 to 2009 • Executive Vice President of Hanson PLC’s North American building materials business, 2003 to 2006 • Mr. Nye currently serves as Chairman of the Martin Marietta Materials, Inc. Board of Directors. He served as a director of Cree, Inc. (n/k/a Wolfspeed, Inc.) within the past five years.	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. Nye’s roles with Martin Marietta Materials, Inc., a leading supplier of aggregates and heavy building materials, position him well to advise our businesses on a range of matters in the areas of engineering, manufacturing, supply chain, mergers and acquisitions, sustainability, regulation and governance matters. Mr. Nye also brings extensive risk management experience, particularly in the area of employee health and safety. His strong business and legal background, together with service on public company boards provide him with a deep understanding of the challenges and risks facing large public companies and their boards. Based on Mr. Nye’s experience with public company financial statements and reporting, the Board has determined that Mr. Nye is an Audit Committee Financial Expert.

Age: 65 Director since: May 2017 INDEPENDENT Committees: • Audit • Finance and Benefit Plans (Chair) • Sustainability	CATHERINE B. REYNOLDS
	BACKGROUND • Chairman and Chief Executive Officer of EduCap, Inc. since 1989 • Co-founder of VitaKey Inc.; Chief Executive Officer since 2021 • Chairman and Chief Executive Officer of The Catherine B. Reynolds Foundation since 2000 • Founder and Chairman of Servus Financial Corporation, 1993 to 2000 • Ms. Reynolds currently serves as a director of Lindblad Expeditions Holdings, Inc. • Chairman of the Board of Lyndra Therapeutics, Inc. since 2017	KEY ATTRIBUTES/SKILLS/EXPERIENCE Ms. Reynolds’ sound business experience and financial background, including her innovative development of the first asset-backed securitization structure for consumer education loans, enable her to provide valuable financial and business advice to the company. Ms. Reynolds is a certified public accountant and has served on the audit and compensation committees of a public company. Through her senior executive and board positions with EduCap, Inc. and Servus Financial Corporation, she has developed critical knowledge of the financial and risk management challenges that companies face. Ms. Reynolds also has gained valuable insight into public company governance and operations through her prior and current service on public company boards. The Board has determined that Ms. Reynolds’ extensive financial and accounting background qualifies her as an Audit Committee Financial Expert.

Age: 60 Director since: February 2014 INDEPENDENT Committees: • Compensation (Chair) • Nominating and Corporate Governance	LAURA J. SCHUMACHER
	BACKGROUND • Vice Chairman, External Affairs and Chief Legal Counsel of AbbVie Inc., 2018 to 2022; Executive Vice President, External Affairs and General Counsel of AbbVie Inc., 2013 to 2018 • Executive Vice President, General Counsel and Secretary of Abbott Laboratories, 2007 to 2012 • Ms. Schumacher currently serves as a director of CrowdStrike Holdings, Inc.	KEY ATTRIBUTES/SKILLS/EXPERIENCE Ms. Schumacher’s positions as chief legal officer of two large public companies provide her with extensive experience with respect to risk management and a deep knowledge of the types of legal, regulatory and corporate governance risks facing public companies. Her experience as a senior executive in the healthcare industry has provided her with a keen awareness of strategic considerations and challenges associated with a complex, highly regulated industry. Additionally, through her key role in the strategic consideration and execution of the separation of AbbVie Inc. from Abbott Laboratories, Ms. Schumacher brings an important understanding of and insight into corporate governance matters and complex corporate transactions.

Age: 71 Director since: February 2021 INDEPENDENT Committees: • Compensation • Finance and Benefit Plans • Sustainability (Chair)	ROBERT K. STEEL
	BACKGROUND • Vice Chairman, Perella Weinberg Partners, since 2021; Chairman of Advisory, 2014 to 2021; Chief Executive Officer, 2014 to 2019; Partner since 2014 • Deputy Mayor for Economic Development, New York City, 2010 to 2013 • Chief Executive Officer and President of Wachovia Corporation, 2008 to 2009 • Under Secretary of Domestic Finance, United States Treasury, 2006 to 2008 • Vice Chairman of Goldman Sachs, 2002 to 2004; Co-head of Equities Division, 1996 to 2002 • Mr. Steel currently serves as Vice Chairman of Perella Weinberg Partners and also as a director of USHG Acquisition Corp. He served as a director of Cadence Bancorporation within the past five years.	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. Steel’s extensive experience with financial markets, gained through public service and private sector roles, positions him as a strong advisor to the company on financial matters. Mr. Steel gained firsthand experience with regulatory structures during his high-ranking government service both at the federal and local levels. Mr. Steel also served as Co-Chair of the Board of Directors of the Value Reporting Foundation, now part of the International Financial Reporting Standards (IFRS) Foundation, which gives him unique insights into sustainability issues. Additionally, his service as the chief executive officer and president of a public company provided him with valuable insights into challenges facing public companies.

Age: 62 Director since: February 2020 INDEPENDENT Committees: • Audit • Finance and Benefit Plans	JOHN G. STRATTON
	BACKGROUND • Executive Chairman of Frontier Communications Parent, Inc. since April 2021 • Executive Vice President and President of Global Operations, Verizon Communications, Inc., 2015 to 2018; Executive Vice President of Global Enterprise and Consumer Wireline, 2014 to 2015; Executive Vice President and President of Verizon Enterprise, 2012 to 2014; Executive Vice President and Chief Operating Officer of Verizon Wireless, 2010 to 2012 • Mr. Stratton currently serves as Executive Chairman of the Board of Frontier Communications Parent, Inc.; he also currently serves as a director of Abbott Laboratories since 2017	KEY ATTRIBUTES/SKILLS/EXPERIENCE Through his leadership positions at Frontier Communications and, previously, at Verizon Communications, Mr. Stratton gained extensive business and management experience operating global public companies, including business strategy and risk management. Mr. Stratton also gained extensive insight into the importance and role of technology, including opportunities and risks associated with rapidly developing new technologies and cybersecurity. His experience in the telecommunications industry also provides him with an understanding of business operations in a highly regulated industry.

Age: 67 Director since: August 2016 INDEPENDENT Committees: • Finance and Benefit Plans • Nominating and Corporate Governance • Sustainability	PETER A. WALL
	BACKGROUND • Retired General, British Army, Chief of the General Staff, 2010 to 2014; Commander in Chief, Land Command, 2009 to 2010 • Director of Operations, United Kingdom Ministry of Defence, 2007 to 2009 • Director, Amicus (strategic leadership advisory firm) since 2014	KEY ATTRIBUTES/SKILLS/EXPERIENCE Mr. Wall had a distinguished career in the British Army before retiring at the rank of General in 2014. He also served as Director of Operations for the United Kingdom Ministry of Defence, directing operations worldwide. As Chief of the General Staff of the British Army, Mr. Wall managed significant operating budgets and led a major transformation of the British Army, including capital investment to harness the latest military technology. Mr. Wall’s service in the U.K. Ministry of Defence and in the British Army give him an in-depth understanding and appreciation of the complexities of the U.K. military, its allies and the overall defense industry. Mr. Wall brings to the Board important insight into the operational requirements of our customers, the application of technology and a deep understanding of global security issues.

	Audit Committee	Compensation Committee	Finance and Benefit Plans Committee	Nominating and Corporate Governance Committee	Sustainability Committee
Richard D. Clarke
James S. Crown
Rudy F. deLeon
Cecil D. Haney
Mark M. Malcolm
James N. Mattis
C. Howard Nye
Catherine B. Reynolds
Laura J. Schumacher
Robert K. Steel
John G. Stratton
Peter A. Wall
Lead Director Audit Committee Financial Expert	Chair Member


AUDIT COMMITTEE Members: C. Howard Nye (Chair) James S. Crown Cecil D. Haney Mark M. Malcolm James N. Mattis Catherine B. Reynolds John G. Stratton Meetings in 2022: 8	RESPONSIBILITIES: • Oversees accounting, financial reporting, internal control, auditing and regulatory compliance activities • Selects and oversees the independent auditor • Approves audit and non-audit services provided by the independent auditor, including a review of the scope of the audit • Reviews our consolidated financial statements with management and the independent auditor • Evaluates the performance, responsibilities, budget and staffing of internal audit program • Evaluates the scope of the internal audit plan • Monitors management’s implementation of the company’s policies, practices and programs with respect to business ethics and conduct
COMPENSATION COMMITTEE Members: Laura J. Schumacher (Chair) James S. Crown Rudy F. deLeon C. Howard Nye Robert K. Steel Meetings in 2022: 4	RESPONSIBILITIES: • Evaluates the performance of the CEO and other officers and reviews and approves their compensation • Recommends to the Board the level and form of director compensation and benefits • Reviews and approves both incentive and equity-based compensation plans • Reviews and monitors succession plans for officers, including the CEO • Has authority to retain and terminate external advisors in connection with the discharge of its duties • Has sole authority to approve compensation consultant fees (to be funded by the company) and the terms of the consultant’s retention
FINANCE AND BENEFIT PLANS COMMITTEE Members: Catherine B. Reynolds (Chair) Rudy F. deLeon Mark M. Malcolm Robert K. Steel John G. Stratton Peter A. Wall Meetings in 2022: 4	RESPONSIBILITIES: • Oversees the management of the company’s financial policies to ensure the policies are in keeping with the company’s overall business objectives • For employee benefit plans that name the company or one of its subsidiaries as the investment fiduciary (and for which the company or one of its subsidiaries has not appointed the management investment committee as investment fiduciary): — Provides strategic oversight of the management of the assets — Reviews and approves management's investment policy recommendations — Reviews and approves the retention of third parties for administration and management services related to trust assets
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE Members: Cecil D. Haney (Chair) Richard D. Clarke James S. Crown James N. Mattis Laura J. Schumacher Peter A. Wall Meetings in 2022: 3	RESPONSIBILITIES: • Evaluates Board and management effectiveness • Advises the Board on the appropriate size, composition, structure and operations of the Board and its committees • Reviews and recommends to the Board committee assignments for directors • Advises the Board on corporate governance matters and monitors developments, trends and best practices in corporate governance • Recommends to the Board corporate governance guidelines that comply with legal and regulatory requirements • Identifies qualified individuals as director candidates
SUSTAINABILITY COMMITTEE Members: Robert K. Steel (Chair) James S. Crown Rudy F. deLeon Catherine B. Reynolds Peter A. Wall Meetings in 2022: 1	RESPONSIBILITIES: • Reviews and monitors corporate practices related to corporate sustainability matters, including those regarding environmental, health, safety, human rights (including international sales of defense articles) and social matters • Monitors developments, trends and best practices in managing corporate sustainability • Has authority to obtain advice and assistance from internal and external advisors in connection with the discharge of its duties

8	100%	100%	100%
Board of Directors meetings in 2022	Director attendance at 2022 Board and committee meetings	Director attendance at the 2022 Annual Meeting	Each 2022 Board meeting was followed by a non-management director executive session
2022 Board meetings included a multi-day meeting in February to review our 2022 operating plan, including the operating plans of each of our business segments.	Strong director participation, with all Board members attending 100% of their Board and committee meetings.	We encourage directors to attend each Annual Meeting of Shareholders.	Non-management directors may also meet without management present at other times as requested by any non-management director. The independent Lead Director chairs executive sessions.

	ENVIRONMENT			HUMAN CAPITAL MANAGEMENT
	As a company with multiple business lines that include heavy manufacturing, we recognize that our actions have an impact on our planet. In keeping with our commitment to environmental stewardship, we adopted a company-wide target to reduce our GHG emissions by 40% by 2034 compared to our 2019 emissions.			People are the heart of our company. We are committed to the safety, health and well-being of our employees, including fair compensation for the work they perform, so that they can remain focused on their mission.

	HUMAN RIGHTS			DIVERSITY AND INCLUSION
	We recognize the fundamental human dignity of all people. As a company with operations and suppliers around the world, we appreciate the importance of ensuring that we respect basic human rights in our business activities and conduct risk-based due diligence efforts scaled in proportion with the degree of potential risk.			We believe that a diverse workplace yields better ideas and outcomes. We are committed to promoting a workforce that reflects a rich tapestry of different backgrounds, experiences and perspectives, where all are welcomed.

		SUPPLY CHAIN
		Suppliers are critical to our ability to deliver quality products and services at market prices to our customers, and we expect our suppliers to act as good corporate citizens.

	BOARD OF DIRECTORS AND CORPORATE GOVERNANCE			EXECUTIVE COMPENSATION			CORPORATE RESPONSIBILITY AND SUSTAINABILITY
	• Board refreshment and succession planning • Risk oversight • Board structure and independence • Director diversity			• Program structure, including role of equity compensation • Pay-for-performance alignment • Strong shareholder support for 2022 say-on-pay vote			• Board oversight, including Sustainability Committee • GHG emissions target and climate risk • Human capital management, including diversity and inclusion • Human rights

Compensation Element	Amount
Annual Retainer	$125,000
Lead Director Retainer	$42,500
Annual Retainer: Audit Committee Chair	$27,500
Annual Retainer: Compensation Committee Chair	$25,000
Annual Retainer: • Finance and Benefit Plans Committee Chair • Nominating and Corporate Governance Committee Chair • Sustainability Committee Chair	$20,000
Annual Retainer: Audit Committee Member	$13,750
Annual Retainer: Compensation Committee Member	$12,500
Annual Retainer: • Finance and Benefit Plans Committee Member • Nominating and Corporate Governance Committee Member • Sustainability Committee Member	$10,000
Annual Equity Award	Approximately $170,000 on the date of award
Per Diem Fee for Non-Employee Directors Performing Specific Projects for the Company	$10,000

Name	Fees Earned or Paid in Cash ($)	^(a)	Stock Awards ($)	^(b)	Option Awards ($)	^(c)	All Other Compensation ($)	^(d)	Total ($)
James S. Crown	217,582		85,009		84,775		552		387,918
Rudy F. deLeon	161,332		85,009		84,775		552		331,668
Cecil D. Haney	154,918		85,009		84,775		552		325,254
Mark M. Malcolm	154,018		85,009		84,775		552		324,354
James N. Mattis	148,750		85,009		84,775		552		319,086
C. Howard Nye	159,732		85,009		84,775		552		330,068
Catherine B. Reynolds	164,918		85,009		84,775		552		335,254
Laura J. Schumacher	160,000		85,009		84,775		552		330,336
Robert K. Steel	171,332		85,009		84,775		552		341,668
John G. Stratton	148,750		85,009		84,775		552		319,086
Peter A. Wall	255,000		85,009		84,775		552		425,336
* Mr. Richard D. Clarke joined the Board as a non-management director effective as of February 1, 2023, and did not receive any compensation for fiscal year 2022. (a) Messrs. Malcolm, Mattis, Nye and Stratton, Ms. Reynolds and Ms. Schumacher elected to receive 100% of their annual retainer in Common Stock; Mr. deLeon elected to receive 50% of his annual retainer in Common Stock; and Mr. Haney elected to receive 20% of his annual retainer in Common Stock. Based upon these elections and each director’s length of service for the year, they received the following number of shares of Common Stock with the associated approximate grant date fair value: Mr. deLeon — 268 shares ($62,080); Mr. Haney — 106 shares ($24,556); and 538 shares ($124,624) for each of Messrs. Malcolm, Mattis, Nye and Stratton, and Ms. Reynolds and Ms. Schumacher. (b) The amounts reported in the Stock Awards column reflect the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Compensation — Stock Compensation. Assumptions used in the calculation of these amounts are included in Note R to our consolidated audited financial statements for the year ended December 31, 2022, included in our Annual Report on Form 10-K filed with the SEC on February 7, 2023. Restricted stock awards outstanding as of December 31, 2022, for each director were as follows: 1,325 for Messrs. Crown, deLeon, Haney, Malcolm, Mattis, Nye, Stratton and Wall and Ms. Reynolds and Ms. Schumacher; and 840 for Mr. Steel. (c) The amounts reported in the Option Awards column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. Assumptions used in the calculation of these amounts are included in Note R to our consolidated audited financial statements for the year ended December 31, 2022, included in our Annual Report on Form 10-K filed with the SEC on February 7, 2023. Option awards outstanding as of December 31, 2022, for each director were as follows: 20,810 for Messrs. Crown and deLeon and Ms. Schumacher; 10,760 for Mr. Haney; 19,450 for Mr. Malcolm; 9,150 for Mr. Mattis; 12,210 for Mr. Nye; 14,220 for Ms. Reynolds; 4,960 for Mr. Steel; 8,170 for Mr. Stratton; and 16,340 for Mr. Wall. (d) Amounts reflect payments for AD&D insurance.

	2022 ($)	2021 ($)
Audit Fees^(a)	22,311,000	23,231,000
Audit-related Fees^(b)	2,043,000	1,897,000
Tax Fees^(c)	790,000	743,000
All Other Fees^(d)	142,000	130,000
Total Fees	25,286,000	26,001,000
(a) Audit fees are fees for professional services performed by KPMG for the audit of our consolidated annual financial statements (including the audit of internal control over financial reporting) and review of our consolidated quarterly financial statements. These fees also include fees for services that are normally provided in connection with statutory and regulatory filings. (b) Audit-related fees are fees for assurance and related services performed by KPMG that are reasonably related to the performance of the audit or review of our consolidated financial statements. These fees consist primarily of fees for professional services for benefit plan audits and evaluation of new accounting standards. (c) Tax fees are fees for professional services performed by KPMG for tax compliance, tax advice and tax planning. These fees consist primarily of fees for tax return preparation and review, tax compliance services for expatriates and advice regarding tax implications of certain transactions. (d) All other fees are primarily related to professional services performed by KPMG for information technology contract compliance, assessment and advisory services.

Name	Title	Tenure in Role
Phebe N. Novakovic	Chairman and Chief Executive Officer	10 years
Jason W. Aiken	Executive Vice President, Technologies and Chief Financial Officer	9 years*
Mark L. Burns	Vice President of the company and President, Gulfstream Aerospace	7 years
Robert E. Smith	Executive Vice President, Marine Systems	4 years
Mark C. Roualet	Executive Vice President, Combat Systems	10 years
* Mr. Aiken was promoted to Executive Vice President, Technologies & CFO effective January 1, 2023. He assumed the CFO role in 2014.

General Dynamics Corp PRE 14A, filed Mar 14, 2023

LETTER TO OUR SHAREHOLDERS

Company Performance

Shareholder Engagement

Board Engagement and Qualifications

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TABLE OF CONTENTS

PROXY SUMMARY

Voting Matters and Board Recommendations

Who We Are

Overview of Our Business and Strategy

Delivering Both Short- and Long-Term Shareholder Value

Strong Financial and Operational Performance

2023 Board of Director Nominees

Composition of the General Dynamics Board

A Commitment to Sound Corporate Governance

THESE VALUES:

Corporate Governance Highlights

Shareholder Engagement

Executive Compensation Highlights

Components of 2022 Compensation Program

ELECTION OF THE BOARD OF DIRECTORS OF THE COMPANY

Election of Directors

Director Nominations

NOMINEES ARE THOROUGHLY EVALUATED TO ENSURE A BALANCED AND EFFECTIVE BOARD

DIRECTOR CANDIDATE EVALUATION

Director Skills and Experience

Board Diversity

Limitation on Directorships

Director Retirement Policy

2023 Director Nominees

Director Independence

Independence Standards

Independence Determinations

Board Nominees Recommended by Shareholders

GOVERNANCE OF THE COMPANY

Our Commitment to Strong Corporate Governance

Our Ethos

Board Leadership Structure

Chairman

Independent Lead Director

Lead Director Authorities and Responsibilities

Board Committees

Committee Members

Committee Responsibilities

Risk Oversight

ROLES IN RISK MANAGEMENT

Board of Directors

Audit Committee

Finance and Benefit Plans Committee

Compensation Committee

Nominating and Corporate Governance Committee

Sustainability Committee

Senior Management

External Advisors

Board Meetings, Attendance and Executive Sessions

Engaged and Active Board of Directors

Corporate Responsibility and Sustainability

Sustainability Governance

Overarching Principles

Key Focus Areas

Shareholder Outreach and Engagement

OUR SHAREHOLDER ENGAGEMENT PROGRAM

KEY ITEMS DISCUSSED WITH SHAREHOLDERS IN 2022

Director Orientation and Continuing Education

Board and Committee Performance Assessments

Communications with the Board

Related Person Transactions Policy

Director Compensation

2022 Compensation

2023 Compensation

Director Compensation Table

DIRECTOR COMPENSATION FOR FISCAL YEAR 2022

Director Stock Ownership Guidelines

VOTE TO APPROVE AMENDMENT TO DELAWARE CHARTER TO LIMIT LIABILITY OF OFFICERS AS PERMITTED BY LAW

Vote to Approve Amendment to Delaware Charter to Limit Liability of Officers as Permitted by Law

ADVISORY VOTE ON THE SELECTION OF INDEPENDENT AUDITORS

Advisory Vote on the Selection of Independent Auditors

Audit and Non-Audit Fees

Auditor Independence

DEMONSTRATED COMMITMENT TO DELIVERING STRONG FINANCIAL PERFORMANCE
$39.4 billion	$4.6 billion	$2.6 billion	$91.1 billion
REVENUE	NET CASH PROVIDED BY OPERATING ACTIVITIES	CASH RETURNED TO SHAREHOLDERS	BACKLOG
Record High	Record High	Including the 25th consecutive annual dividend increase	Record High
$12.19	102%	$1.6 billion	21.7%
DILUTED EARNINGS PER SHARE (EPS)	CASH CONVERSION RATE⁽¹⁾	CASH INVESTED IN THE BUSINESS	TOTAL SHAREHOLDER RETURN (TSR)
Record High		Representing capital expenditures and company-sponsored research and development (R&D)	vs. -18.1% for the S&P 500 Index

Component	Purpose	Description
Annual Base Salary	Provides competitive, fixed-rate cash compensation	• Base salary is targeted to be a market competitive rate and reflects the experience, potential and performance track-record of each executive.
Annual Incentive Compensation	Provides a cash incentive opportunity based on annual performance and aligns management with our short-term financial, strategic and operational goals	• Targeted around the median of our peers, the annual incentive is designed to motivate and align management with current year business goals and varies based on achievements. The incentive includes a balance of financial, strategic and operational measures to align with annual key priorities. • The 2022 annual incentive was formulaic and based on three financial metrics of EPS (25%), FCF (25%) and operating margin (20%), as well as overall and individual strategic and operational performance (30%). • Strategic and operational performance measures include, but are not limited to: financial performance improvements, prudent allocation of capital, human capital management, ESG management, debt management, segment performance, cost reductions, leadership and other significant factors not contemplated at the start of the year.
Long-Term Incentive Compensation	Provides our NEOs with a significant personal stake in the long-term success of the company by tying earned amounts to our multi-year financial and TSR performance; aligns management’s interest with that of shareholders; and supports our human capital strategy	• LTI awards are targeted around a market competitive range of our peers and also reflect the experience, potential and performance track-record of executives. LTI awards have multi-year performance metrics designed to align the NEOs with the objectives of our company and shareholders. • The LTI program consists of three elements: PSUs (50%), stock options (30%) and restricted stock (20%). • A mix of elements serves to: — Focus leaders on specific long-term performance results; — Provide a balance of rewards focused on different objectives over varying time periods; — Reward management for improvements in shareholder value; — Retain key employees through longer-term vesting and performance periods; and — Provide an opportunity for wealth accumulation over time that is consistent with the shareholder experience.

	100% independent Compensation Committee Independent compensation consultant reporting to the Committee Director and management proactive annual engagement with shareholders to discuss executive compensation Market-leading stock ownership requirements for executive officers (values at least equal to 15x base salary for the CEO and at least equal to 8x to 10x base salary for the other NEOs) Incentive compensation based on clear, measurable goals for key financial, strategic and operational metrics that drive business performance The value of earned long-term incentives is based on our future and sustained performance and shareholder value creation Thoughtfully selected peer group consisting of other aerospace and defense firms as well as other companies with large market capitalization in related industries, with annual Committee review 50% of our long-term incentive is delivered in performance-based stock units that vest in three years subject to two relevant and objective metrics, ROIC and rTSR Double-trigger change-in-control arrangements Clawback, anti-hedging and anti-pledging policies

	No single-trigger equity acceleration upon a change in control No excessive perquisites No excise tax gross-ups No employment agreements with NEOs No spring-loading of equity grants

November 2021			January – February 2023
• Business unit presidents present operating goals and plans to the CEO. • The CEO, in consultation with the CFO and executive vice presidents, establishes company operating goals.			• Based on company and individual performance for the prior fiscal year, the CEO calculates a score for each NEO (other than herself). • The Committee evaluates the CEO’s performance and the CEO’s assessment of other NEO performance, as well as reviews peer compensation data in preparation for considering 2023 base salary recommendations and determining 2022 annual incentive payouts for the NEOs. • The proposed annual incentive payouts for 2022 performance, together with proposed base salary and LTI grant values for 2023, are presented to the Committee on a scorecard for each executive, along with commentary on financial performance accomplishments, strategic and operational performance and other significant factors not contemplated at the start of the year.


February 2022
• Business unit presidents present business plans to the Board over a three-day session. • The Board reviews, adjusts where appropriate, and approves business unit operating goals and adopts the company operating plan. • The company operating plan establishes the financial goals for the annual incentive and long-term incentive plans. Throughout the year, the Board reviews and monitors company performance as compared to the operating plan through a series of financial and operating reports from senior management.


			March 2023
			• The Committee reviews the NEO scorecards with pay recommendations from management and approves compensation based on the clearly defined performance metrics that are described and disclosed in this Proxy Statement. The Committee’s decisions also reflect factors such as the degree of difficulty of goals, market conditions and exceptional individual achievement. • The Committee meets in executive session to review, refine and approve the compensation for the CEO. • The Committee certifies the results of the three-year performance measures for PSUs. • The Committee reviews, refines and approves the performance metrics for the annual incentive for 2023 and the next three-year performance period for the PSUs.

Peer Group Companies	Ticker Symbol	Revenue ($ in millions)	*	Market Capitalization ($ in millions)	**	Employee Population	Peer of Peers
3M Company	MMM	34,229		69,104		92,000
Accenture plc^†	ACN	61,594		168,040		721,000
The Boeing Company^†	BA	66,608		113,529		156,000
Caterpillar Inc.	CAT	59,427		124,669		109,100
Cisco Systems, Inc.	CSCO	51,557		195,710		83,300
Deere & Company^†	DE	52,577		127,872		82,200
Eaton Corporation plc	ETN	20,752		62,419		92,000
Emerson Electric Co.^†	EMR	19,629		56,810		85,500
Honeywell International Inc.^†	HON	35,466		144,079		97,000
Johnson Controls International plc^†	JCI	25,299		43,949		102,000
Lockheed Martin Corporation^†	LMT	65,984		127,496		116,000
Northrop Grumman Corporation^†	NOC	36,602		83,976		95,000
Raytheon Technologies Corporation^†	RTX	67,074		148,530		182,000
Textron Inc.^†	TXT	12,869		14,781		34,000
General Dynamics Corporation	GD	39,407		67,986		106,500
General Dynamics (Percentile Rank)		48%		29%		66%
* As of the latest annual SEC filing ** As of December 31, 2022 ^† Lists General Dynamics as a peer

Components of Compensation		Description
Annual Base Salary (Cash)		• Base salary is targeted to be a market competitive rate and reflects the experience, potential and performance track-record of each executive. It represents a fixed level of compensation commensurate with the responsibilities of the role.
Annual Incentive Compensation (Cash)		• The 2022 annual incentive was formulaic and based on three financial metrics of EPS (25%), FCF (25%) and operating margin (20%), as well as overall and individual strategic and operational performance (30%). • Strategic and operational performance measures include, but are not limited to: financial performance improvements, prudent allocation of capital, human capital management, ESG management, debt management, segment performance, cost reductions, leadership and other significant factors not contemplated at the start of the year.
Long-Term Incentive Compensation (Equity)
Performance Stock Units		• PSUs closely connect the NEOs to the company’s sustained financial performance through three- year average ROIC and rTSR metrics, and act as a retention tool through a three-year vesting and performance period.
Stock Options		• Stock options link the NEOs to the company’s stock price performance and align our executive team with shareholders’ interests in the long-term.
Restricted Stock		• Restricted stock aligns the NEOs with the company’s TSR performance over each three-year vesting period, acts as a retention tool and directly supports stock ownership.
Benefits and Perquisites		• The company provides market-competitive perquisites, retirement, health and welfare benefits and certain change-in-control arrangements for purposes of recruitment and retention and to ensure the security and accessibility of our executives to facilitate the transaction of business.

Name and Title	2021 Base Salary		2022 Base Salary
Ms. Novakovic Chairman and Chief Executive Officer	$	1,700,000	$	1,700,000
Mr. Aiken Executive Vice President, Technologies and Chief Financial Officer	$	900,000	$	900,000
Mr. Burns Vice President of the company and President, Gulfstream Aerospace	$	800,000	$	875,000
Mr. Smith Executive Vice President, Marine Systems	$	800,000	$	875,000
Mr. Roualet Executive Vice President, Combat Systems	$	835,000	$	875,000

	Performance Metrics	Weighting	Threshold (50% Payout)	Target Range* (100% Payout)	Maximum (200% Payout)	2022 Result	Payout (% of Target)
	Diluted Earnings Per Share		$10.07	$11.85 — $12.15	$12.76	$12.19	106.6% of Target
	Free Cash Flow		$2,602M	$3,252M — $3,397M	$3,737M	$3,465M	120% of Target
	Operating Margin		9.7%	10.5% — 10.7%	10.9%	10.7%	100% of Target
Strategic and Operational			0%	100%	200%	See Discussion Below	See Individual Results

Name	2022 Base Salary ($)	Target Incentive (% of Base)	Target Incentive ($)	Overall Achievement (% of Target)	Annual Incentive Payout ($)
Ms. Novakovic	1,700,000	180	3,060,000	133.6	4,089,000
Mr. Aiken	900,000	115	1,035,000	133.6	1,383,000
Mr. Burns	875,000	110	962,500	136.6	1,315,000
Mr. Smith	875,000	110	962,500	124.6	1,200,000
Mr. Roualet	875,000	110	962,500	133.6	1,286,000

Name		2022 LTI Grant^* ($)
Ms. Novakovic		15,000,000
Mr. Aiken		4,500,000
Mr. Burns		4,000,000
Mr. Smith		3,800,000
Mr. Roualet		3,500,000
* Amounts awarded by the Committee may differ from those displayed in the Summary Compensation Table (SCT) due to the requirement to value the equity amounts in the SCT at aggregate grant date fair value computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation.