UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
GENERAL ELECTRIC COMPANY
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(Name of Registrant as Specified In Its Charter)
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SEC 1913 (3-99)
[LOGO]
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Notice of 2001
Annual Meeting
and
Proxy Statement
[LOGO]
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General Electric Company
3135 Easton Turnpike, Fairfield, CT 06431
March 9, 2001
Dear Share Owner,
You are invited to attend the 2001 Annual Meeting to be held on Wednesday,
April 25, in Atlanta, Georgia.
The Annual Meeting will begin with a report on Company operations,
followed by discussion and voting on the matters set forth in the accompanying
Notice of Annual Meeting and Proxy Statement and discussion on other business
matters properly brought before the meeting.
If you plan to attend the meeting, please follow the advance registration
instructions on the back of this Proxy Statement. An admission card, which will
expedite your admission to the meeting, will be mailed to you prior to the
meeting.
Whether or not you plan to attend, you can be sure your shares are
represented at the meeting by promptly voting and submitting your proxy by
phone, by Internet, or by completing, signing, dating and returning your Proxy
Form in the enclosed envelope.
Cordially,
/s/ John F. Welch
John F. Welch, Jr.
Chairman of the Board
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CONTENTS
Notice of 2001 Annual Meeting of Share Owners ............................. 5
Proxy Statement ........................................................... 5
. Election of Directors ................................................ 6
Information Relating to Directors, Nominees
and Executive Officers ............................................... 13
Compensation Committee Report .......................................... 17
Summary Compensation Table ............................................. 22
Financial Performance Comparison Graphs ................................ 24
Stock Options and Stock Appreciation Rights ............................ 26
Retirement Benefits .................................................... 28
Independent Auditor Fees ............................................... 29
Audit Committee Report ................................................. 29
. Appointment of Independent Auditors .................................. 30
Share Owner Proposals relating to:
. No. 1 Cumulative Voting ......................................... 31
. No. 2 Workplace Code of Conduct ................................. 31
. No. 3 Report on PCB Cleanup Costs ............................... 33
. No. 4 Nuclear Power Report ...................................... 34
. No. 5 Director Election Process ................................. 36
. No. 6 Director Independence ..................................... 37
. No. 7 Landmine and Cluster Bomb Production ...................... 39
Additional Information ................................................. 41
Appendix A: Audit Committee Charter .................................... 45
. To be voted on at the meeting
Every Share Owner's Vote Is Important.
Please Complete, Sign, Date and Return
Your Proxy Form, Or Submit Your Vote
and Proxy By Phone Or By Internet.
[LOGO] Printed on recycled paper using soybean ink
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NOTICE OF 2001 ANNUAL MEETING OF SHARE OWNERS
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10:00 a.m., April 25, 2001
Atlanta Civic Center
395 Piedmont Avenue, N.E.
Atlanta, Georgia 30308
March 9, 2001
To the Share Owners:
General Electric Company's 2001 Annual Meeting of Share Owners will be held at
Atlanta Civic Center, 395 Piedmont Avenue, N.E., Atlanta, Georgia, on Wednesday,
April 25, 2001, at 10:00 a.m., to address all matters that may properly come
before the meeting. Following a report on GE's business operations, the share
owners will vote on:
(a) Election of Directors for the ensuing year;
(b) Approval of the appointment of Independent Auditors for 2001; and
(c) Seven share owner proposals set forth at pages 31 through 40 in the
accompanying Proxy Statement.
Share owners of record at the close of business on March 7, 2001, will be
entitled to vote at the meeting and any adjournments.
Benjamin W. Heineman, Jr.
Secretary
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PROXY STATEMENT
General Electric Company, Fairfield, Connecticut 06431
This Proxy Statement is furnished in connection with the solicitation of proxies
by General Electric Company on behalf of the Board of Directors for the 2001
Annual Meeting of Share Owners. Distribution of this Proxy Statement and a proxy
form to share owners is scheduled to begin on or about March 9, 2001.
You can ensure that your shares are voted at the meeting by submitting your
instructions by phone, by Internet, or by completing, signing, dating and
returning the enclosed Proxy Form in the envelope provided. Submitting your
instructions by any of these methods will not affect your right to attend the
meeting and vote. A share owner who gives a proxy may revoke it at any time
before it is exercised by voting in person at the Annual Meeting, by delivering
a subsequent proxy, or by notifying the Inspectors of Election in writing of
such revocation.
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ELECTION OF DIRECTORS
At the 2001 Annual Meeting, 19 directors are to be elected to hold office until
the 2002 Annual Meeting and until their successors have been elected and have
qualified. As part of the acquisition of Honeywell International Inc., the Board
will be expanded and three additional directors acceptable to Honeywell and the
Company will be added to the Board. The 19 nominees for election at the Annual
Meeting are listed on pages 6 to 12 with brief biographies. They are all now GE
directors. Jeffrey R. Immelt joined the Board in November 2000, Rochelle B.
Lazarus joined the Board in December 2000, and Robert C. Wright joined in July
2000. John D. Opie, who served as a director since 1995, retired from the
Company and the Board at the end of March 2000. The Board knows of no reason why
any nominee may be unable to serve as a director. If any nominee is unable to
serve, the shares represented by all valid proxies will be voted for the
election of such other person as the Board may recommend.
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[PHOTO]
James I. Cash, Jr., 53, James E. Robison Professor of Business Administration,
Harvard Graduate School of Business, Boston, Mass. Director since 1997.
A graduate of Texas Christian University with MS and PhD degrees from Purdue
University, Dr. Cash joined the faculty of Harvard Business School in 1976,
where he served as chairman of the MBA program from 1992 to 1995, and is
currently serving as chairman of HBS Publishing. Dr. Cash is also a director of
Cambridge Technology Partners, The Chubb Corporation, Knight-Ridder, Inc., State
Street Bank and Trust, and WinStar Corporation. He also serves as a trustee of
the Massachusetts General Hospital and Partners Healthcare and as an overseer
for the Boston Museum of Science.
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[PHOTO]
Silas S. Cathcart, 74, Retired Chairman of the Board and Chief Executive
Officer, Illinois Tool Works, Inc., diversified products, Chicago, Ill. Director
1972-1987 and since 1990.
Following his graduation from Princeton in 1948, Mr. Cathcart joined Illinois
Tool Works, Inc., a manufacturer of tools, fasteners, packaging and other
products. He was named a vice president in 1954, executive vice president in
1962, and president and director in 1964; and he served as chairman from 1972 to
1986. From 1987 to 1989, he served as chairman of the board of Kidder, Peabody
Group Inc. Mr. Cathcart is also a trustee of the Buffalo Bill Historical
Society.
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[PHOTO]
Dennis D. Dammerman, 55, Vice Chairman of the Board and Executive Officer,
General Electric Company, and Chairman, General Electric Capital Services, Inc.
Director since 1994.
Mr. Dammerman joined GE after graduating from the University of Dubuque in 1967.
He had financial assignments in several GE businesses before being named vice
president and comptroller of General Electric Credit Corporation (now GE Capital
Corporation) in 1979. In 1981, he became vice president and general manager of
GE Capital's Commercial Financial Services Department and, later that year, of
GE Capital's Real Estate Financial Services Division. He was elected senior vice
president for finance of GE in 1984, a director of GE in 1994 and, in 1998, was
named vice chairman of the board and executive officer of GE and chairman and
CEO of GE Capital Services, Inc.
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[PHOTO]
Paolo Fresco, 67, Chairman of the Board, Fiat SpA, automotive and industrial
products, Turin, Italy. Director since 1990.
Mr. Fresco received a law degree from the University of Genoa, and after
practicing law in Rome until 1962, he joined General Electric's Italian
subsidiary. During the ensuing years he held several positions with GE. In 1990,
he joined the Company's Board of Directors and in 1992 he became vice chairman
and executive officer and member of the Corporate Executive Office. In 1998,
upon retirement from GE, he became Chairman of Fiat SpA. Present board
memberships in addition to Fiat SpA, include IFI, Alcatel, Mediobanca and AUME
(Association for the European Monetary Union). Mr. Fresco is also a member of
the European Roundtable, Confindustria (the Confederation of Italian Industry)
and Assonime (Association of Italian stock companies).
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[PHOTO]
Ann M. Fudge, 49, President, Kraft's Beverages, Desserts & Post Divisions and
Group Vice President, Kraft Foods, Inc., packaged foods, Tarrytown, N.Y.
Director since 1999.
After graduating from Simmons College in 1973, Ms. Fudge worked in human
resources for GE until entering Harvard University, where she obtained an MBA in
1977. She then held marketing positions at General Mills until joining General
Foods in 1986, where she was appointed executive vice president in 1991. In
1994, she was named president of Kraft General Foods' Maxwell House Coffee
Company. In 2000, she was named Group Vice President of Kraft Foods, Inc. and
president of Kraft's Beverages, Desserts and Post Divisions. Ms. Fudge is a
director of Honey-well International Inc. and the Federal Reserve Bank of New
York.
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[PHOTO]
Claudio X. Gonzalez, 66, Chairman of the Board and Chief Executive Officer,
Kimberly-Clark de Mexico, S.A. de C.V., Mexico City, and Director, Kimberly-
Clark Corporation, consumer and paper products. Director since 1993.
Mr. Gonzalez is a graduate of Stanford University. He was employed by Kimberly-
Clark in 1956 and by Kimberly-Clark de Mexico, S.A. in 1957. He was elected vice
president of operations of Kimberly-Clark de Mexico, S.A. in 1962 and executive
vice president and managing director in 1966. He assumed his present position in
1973. Mr. Gonzalez is also a director of Kellogg Company, The Mexico Fund, Inc.,
Planet Hollywood International, Inc., Banco Nacional de Mexico, Grupo Carso,
Grupo Industrial ALFA, Grupo Modelo, Grupo Televisa and America Movil.
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[PHOTO]
Jeffrey R. Immelt, 44, President and Chairman-Elect, General Electric Company.
Director since 2000.
Mr. Immelt joined GE in corporate marketing in 1982 after receiving a degree in
applied mathematics from Dartmouth College and an MBA from Harvard University.
He then held a series of leadership positions with GE Plastics in sales,
marketing and global product development. He became a vice president of GE in
1989, responsible for consumer service for GE Appliances. He then became vice
president of worldwide marketing and product management for GE Appliances in
1991, vice president and general manager of GE Plastics Americas commercial
division in 1992, and vice president and general manager of GE Plastics Americas
in 1993. He became senior vice president of GE and president and chief executive
officer of GE Medical Systems in 1996. Mr. Immelt became GE's president and
chairman-elect in 2000.
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[PHOTO]
Andrea Jung, 42, President and Chief Executive Officer, Avon Products, Inc.,
cosmetics, New York, N.Y. Director since 1998.
Ms. Jung, a graduate of Princeton University, joined Avon Products, Inc., a
multinational cosmetics company, in 1994 as president, product marketing for
Avon U.S. She was elected president, global marketing, in 1996, an executive
vice president in 1997, president and a director of the company in 1998 and
chief executive officer in 1999. Previously, she was executive vice president,
Neiman Marcus and a senior vice president for I. Magnin. Ms. Jung is also a
member of the Princeton University Board of Trustees and is a director of
Catalyst and the Cosmetic, Toiletry and Fragrance Association.
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[PHOTO]
Kenneth G. Langone, 65, Chairman, President and Chief Executive Officer, Invemed
Associates, LLC, investment banking and brokerage, New York, N.Y. Director since
1999.
Mr. Langone received a BA from Bucknell University and an MBA from New York
University's Stern School of Business. He is the founder of Invemed Associates,
LLC, and a co-founder, director and member of the executive committee of Home
Depot, Inc. He is also a director of Choice-Point, Inc., Microtune, Inc., TRICON
Global Restaurants, Inc. and Unifi, Inc., as well as the New York Stock
Exchange. In addition to serving as a director of numerous charitable
organizations, Mr. Langone is chairman of the NYU School of Medicine and serves
on the Board of Trustees of New York University and the Board of Overseers of
its Stern School of Business.
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[PHOTO]
Rochelle B. Lazarus, 53, Chairman and Chief Executive Officer, Ogilvy & Mather
Worldwide, advertising, New York, N.Y. Director since 2000.
A graduate of Smith College, Ms. Lazarus holds an MBA from Columbia University.
She joined Ogilvy & Mather Worldwide, a multinational advertising agency, in
1971, becoming president of its U.S. direct marketing business in 1989. She then
became president of Ogilvy & Mather New York, and president of Ogilvy & Mather
North America before becoming president and chief operating officer of the
worldwide agency in 1995, chief executive officer in 1996, and chairman in 1997.
Ms. Lazarus also serves as a director of Ann Taylor Stores, New York
Presbyterian Hospital, the World Wildlife Fund and TIAA-CREF. She is chairman of
the Board of Trustees of Smith College, and immediate-past president of the
American Association of Advertising Agencies.
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[PHOTO]
Scott G. McNealy, 46, Chairman of the Board and Chief Executive Officer, Sun
Microsystems, Inc., supplier of network computing solutions, Palo Alto, Calif.
Director since 1999.
After graduating with an economics degree from Harvard University in 1976, Mr.
McNealy worked in manufacturing for Rockwell International before entering
Stanford University, where he obtained an MBA degree in 1980. Following
Stanford, Mr. McNealy worked at FMC Corporation and Onyx Systems before co-
founding Sun Microsystems, Inc., where he became a director and vice president
of operations in 1982. Mr. McNealy has been chairman of the Board of Directors
and chief executive officer of Sun Microsystems since 1984.
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[PHOTO]
Gertrude G. Michelson, 75, Former Senior Vice President-External Affairs and
former Director, R. H. Macy & Co., Inc., retailers, New York, N.Y. Director
since 1976.
Mrs. Michelson received a BA degree from Pennsylvania State University in 1945
and an LLB degree from Columbia University in 1947, at which time she joined
Macy's - New York. Mrs. Michelson was elected a vice president in 1963 and
senior vice president in 1979, and she was named senior vice president -external
affairs in 1980. She served as senior advisor to R. H. Macy & Co., Inc. from
1992 to 1994. She is chairman emeritus of the Board of Trustees of Columbia
University and past president of the Board of Overseers, TIAA-CREF.
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[PHOTO]
Sam Nunn, 62, Partner, King & Spalding, law firm, Atlanta, Ga. Director since
1997.
After attending Georgia Institute of Technology and serving in the U.S. Coast
Guard, Mr. Nunn received an AB degree from Emory University in 1960 and an LLB
degree from Emory Law School in 1962. He then practiced law and served in the
Georgia House of Representatives before being elected to the United States
Senate in 1972, where he served as the chairman and ranking member on both the
Senate Armed Services Committee and the Senate Permanent Subcommittee on
Investigations before retiring in 1997. Mr. Nunn is also a director of The Coca-
Cola Company, Community Health Systems, Inc., Dell Computer Corporation,
Internet Security Systems, Inc., National Service Industries, Inc., Scientific-
Atlanta, Inc., Texaco Inc. and Total System Services, Inc. Mr. Nunn is also co-
chairman and chief executive officer of the Nuclear Threat Initiative, a Wash-
ington-based organization working to reduce the global threat of weapons of mass
destruction.
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[PHOTO]
Roger S. Penske, 64, Chairman of the Board, Penske Corporation, Penske Truck
Leasing Corporation, and United Auto Group, Inc., transportation and automotive
services, Detroit, Mich. Director since 1994.
A 1959 graduate of Lehigh (Pa.) University, Mr. Penske founded Penske
Corporation in 1969. He became chairman of the board of Penske Truck Leasing
Corporation in 1982 and chairman of the board of United Auto Group, Inc. in
1999. Mr. Penske is also vice chairman and a director of International Speedway
Corporation and a director of Delphi Automotive Systems Corporation. He serves
as a trustee of the Henry Ford Museum and Greenfield Village, is a director of
Detroit Renaissance and is a member of The Business Council.
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[PHOTO]
Frank H. T. Rhodes, 74, President Emeritus, Cornell University, Ithaca, N.Y.
Director since 1984.
An English-born naturalized U.S. citizen, Dr. Rhodes holds bachelor of science,
doctor of philosophy and doctor of science degrees from the University of
Birmingham (U.K.). He served as president of Cornell University from 1977 to
1995. Dr. Rhodes previously served under presidential appointments as a member
of the National Science Board, of which he is a former chairman, and as a member
of the President's Education Policy Advisory Committee. He is currently
president of the American Philosophical Society.
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[PHOTO]
Andrew C. Sigler, 69, Retired Chairman of the Board and Chief Executive Officer,
Champion International Corporation, paper and forest products, Stamford, Conn.
Director since 1984.
A graduate of Dartmouth College with an MBA degree from its Amos Tuck School of
Business Administration, Mr. Sigler joined Champion Papers Inc., a predecessor
of Champion International, in 1956. He served as chief executive officer of
Champion International from 1974 until his retirement in 1996, and as chairman
of its board of directors from 1979 until his retirement.
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[PHOTO]
Douglas A. Warner III, 54, Chairman of the Board, J.P. Morgan Chase & Co., The
Chase Manhattan Bank, and Morgan Guaranty Trust Company of New York. New York,
N.Y. Director since 1992.
Following graduation from Yale University in 1968, Mr. Warner joined Morgan
Guaranty Trust Company of New York, a wholly owned subsidiary of J.P. Morgan
Chase & Co. (formerly J.P. Morgan & Co. Incorporated). He was elected president
and a director of the bank and its parent in 1990, serving as chairman and chief
executive officer from 1995 to December 31, 2000, when he became chairman of the
board of J.P. Morgan Chase & Co., The Chase Manhattan Bank, and Morgan Guaranty
Trust Company. Mr. Warner is also a director of Anheuser-Busch Companies, Inc.,
chairman of the Board of Managers and the Board of Overseers of Memorial Sloan-
Kettering Cancer Center, a member of The Business Council and a trustee of the
Pierpont Morgan Library.
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[PHOTO]
John F. Welch, Jr., 65, Chairman of the Board and Chief Executive Officer,
General Electric Company. Director since 1980.
A 1957 graduate of the University of Massachusetts with MS and PhD degrees from
the University of Illinois, Mr. Welch joined GE in 1960. Following managerial
assignments in the plastics and the chemical and metallurgical businesses, he
was elected a vice president in 1972. In 1973, he was named vice president and
group executive of the Components and Materials Group. He became a senior vice
president and sector executive of the Consumer Products and Services Sector in
1977 and was elected a vice chairman and named an executive officer in 1979. Mr.
Welch was elected chairman and named chief executive officer in 1981. He also
serves as a director of Fiat SpA and NBC Internet, Inc.
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[PHOTO]
Robert C. Wright, 57, Vice Chairman of the Board and Executive Officer, General
Electric Company, and President and Chief Executive Officer of National
Broadcasting Company, Inc. Director since 2000.
Mr. Wright graduated from the College of the Holy Cross and the University of
Virginia School of Law. He joined GE in 1969 as a staff lawyer, leaving in 1970
for a judicial clerkship. He rejoined GE in 1973 as a lawyer for GE Plastics,
subsequently serving in several management leadership positions with that
business. In 1980, he became president of Cox Cable Communications, and rejoined
GE in 1983 as vice president of the Housewares and Audio businesses. In 1984, he
became president and chief executive officer of General Electric Financial
Services, and in 1986 was elected to his current position of president and chief
executive officer of National Broadcasting Company, Inc. In 2000, he was also
elected vice chairman of the Board and executive officer of GE.
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INFORMATION RELATING TO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table includes all GE stock-based holdings, as of February 9,
2001, of the Company's directors and five most highly compensated executive
officers. This table indicates the alignment of the named individuals' financial
interests with the interests of the Company's share owners because the value of
their total GE holdings will increase or decrease in line with the price of GE's
stock.
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Common Stock and Total Stock-Based Holdings
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Name Stock/1/ Total/2/ Name Stock/1/ Total/2/
James I. Cash, Jr. 40,954 85,594 Rochelle B. Lazarus 2,200 20,200
Silas S. Cathcart 751,342/3/ 796,342 Scott G. McNealy 15,000 48,094
Dennis D. Dammerman 1,009,965 4,309,281 Gertrude G. Michelson 108,754/4/ 331,000
Paolo Fresco 2,524,393 2,570,772 Sam Nunn 48,000 103,958
Ann M. Fudge 6,885 38,385 Roger S. Penske 105,000 157,535
Claudio X. Gonzalez 131,770 227,199 Frank H. T. Rhodes 138,377 251,592
Benjamin W. Heineman, Jr. 1,374,135 2,596,468 Andrew C. Sigler 88,954 133,954
Jeffrey R. Immelt 724,238 3,011,596 Douglas A. Warner III 146,554/5/ 191,554
Andrea Jung 20,915 62,908 John F. Welch, Jr. 9,630,169/6/ 22,371,064
Kenneth G. Langone 304,639 340,756 Robert C. Wright 2,120,710 5,228,331
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Common stock holdings of all directors and executive officers as a group were 20,235,125 /7/
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Notes:
/1/ This column lists voting securities, including restricted stock held by
executive officers over which the officers have voting power but no investment
power. Otherwise, each director or officer has sole voting and investment power
over the shares reported, except as noted. This column includes 27,000 shares
for Dr. Cash, 105,000 shares for Mr. Cathcart, 2,398,500 shares for Mr. Fresco,
4,500 shares for Ms. Fudge, 117,000 shares for Messrs. Gonzalez and Warner,
13,500 shares for Ms. Jung, 4,500 shares for Mr. Langone and Mr. McNealy, 99,000
shares for Mrs. Michelson, 45,000 shares for Mr. Nunn, 49,500 shares for Mr.
Penske, 135,000 shares for Dr. Rhodes, and 63,000 shares for Mr. Sigler that may
be acquired by them pursuant to stock options that are or will become
exercisable within 60 days. It also includes 709,999 shares for Mr. Dammerman,
937,500 shares for Mr. Heineman, 579,000 shares for Mr. Immelt, 6,675,000 shares
for Mr. Welch and 1,335,000 shares for Mr. Wright that may be acquired by them
pursuant to stock options that are or will be exercisable within 60 days. No
director or executive officer owns more than one-tenth of one percent of the
total outstanding shares, nor do all directors and executive officers as a group
own more than one percent of the total outstanding shares.
/2/ This column shows the individual's total GE stock-based holdings, including
the voting securities shown in the "Stock" column (as described in note 1), plus
non-voting interests, including, as appropriate, the individual's holdings of
stock appreciation rights, restricted stock units, deferred compensation
accounted for as units of GE stock, and stock options that will not become
exercisable within 60 days.
/3/ Includes 32,640 shares over which Mr. Cathcart has shared voting and
investment power.
/4/ Includes 7,800 shares over which Mrs. Michelson shares voting and investment
power.
/5/ Includes 3,600 shares over which Mr. Warner has shared voting and investment
power but as to which he disclaims any other beneficial interest.
/6/ Includes 429,600 shares over which Mr. Welch has shared voting and
investment power but as to which he disclaims any other beneficial interest.
/7/ Includes 3,031,926 shares over which there are shared voting and investment
powers.
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13
. Board of Directors and Committees
The Board of Directors held ten meetings during 2000. The average attendance by
directors at Board meetings, and Committee meetings they were scheduled to
attend, was over 90%.
Among the committees of the Board of Directors are a Nominating Committee, a
Management Development and Compensation Committee, and an Audit Committee.
Members of the Nominating Committee are Directors Sigler (Chairman),
Cathcart, Jung, Michelson, Penske and Warner. This committee's responsibilities
include the selection of potential candidates for director and the
recommendation of candidates to the Board. It also makes recommendations to the
Board concerning the structure and membership of the other Board Committees. The
Nominating Committee held three meetings during 2000. This committee will
consider share owner recommendations for director sent to the Nominating
Committee, c/o Benjamin W. Heineman, Jr., Secretary, General Electric Company,
Fairfield, CT 06431.
Members of the Management Development and Compensation Committee are
Directors Cathcart (Chairman), Gonzalez, Langone, Michelson, Nunn, Penske,
Rhodes and Sigler. This committee has two primary responsibilities: (1) to
monitor the Company's management resources, structure, succession planning,
development and selection process as well as the performance of key executives;
and (2) to review and approve executive compensation and changes. It also serves
as the committee administering the GE 1990 Long-Term Incentive Plan and the
Incentive Compensation Plan. This committee met eleven times during 2000.
Members of the Audit Committee are Directors Michelson (Chairman), Cathcart,
Fudge, Gonzalez, Penske, Rhodes, Sigler and Warner. This committee is primarily
concerned with the effectiveness of the audits of GE by its internal audit staff
and by the independent auditors. Its duties include: (1) recommending the
selection of independent auditors; (2) reviewing the scope of the audit to be
conducted by them, as well as the results of their audit; (3) reviewing the
organization and scope of GE's internal system of audit and financial controls;
(4) appraising GE's financial reporting activities (including its Proxy
Statement and Annual Report) and the accounting standards and principles
followed; and (5) examining other reviews relating to compliance by employees
with important GE policies and applicable laws. There were five meetings of the
Audit Committee during 2000.
Non-employee directors are paid an annual retainer of $75,000 plus a fee of
$2,000 for each Board meeting and for each Board Committee meeting attended.
Half of any portion of the annual retainer that a director has not elected to
defer is paid in GE common stock. A director may make an irrevocable election
each year to defer all or a portion of annual retainer and fees. At the
director's option, his or her account is credited with units accounted for as GE
common stock or the dollar amount of the deferral. Accounts are also credited
with common stock dividend equivalents or interest equivalents based on the
yield for
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14
long-term U.S. government bonds. Participants will receive payments from their
account in cash or GE stock, in either a lump sum or annual installments, after
termination of Board service. Non-employee directors are also paid a travel
allowance for attendance at Board meetings.
Last year, the Board of Directors replaced the non-employee directors
retirement program with a contingent stock unit award for directors who join the
Board after the 2001 Annual Meeting. All non-employee directors elected to the
Board at the 2001 Annual Meeting, who retire directly from the Board at age 65
or older after at least five years of service, will continue to be eligible to
elect to receive: (1) an annual retirement benefit for the lives of the director
and eligible surviving spouse in the amount of the retainer fee in effect at
retirement; or (2) in lieu thereof, a life insurance benefit in the amount of
$450,000. All non-employee directors who are initially elected to the Board
after the 2001 Annual Meeting will receive a one-time contingent award of 5,000
GE stock units, to be accounted for as GE common stock including dividends,
payable only if the director retires from the Board at age 65 or older and after
at least five years of service on the Board. GE also provides each non-employee
director with group life and accidental death insurance in the aggregate amount
of $150,000. To assist in the promotion of its recently-introduced
Bellataire(TM) diamonds, the Company also permits directors to obtain such
diamonds at the Company's incremental cost, for the personal use of the director
or his or her spouse. Any director obtaining a diamond would be personally
responsible for paying income tax based upon the difference between the
diamond's incremental cost and fair market value. The following directors
purchased such items under the program at the prices indicated: Mr. Cathcart
($25,565), Dr. Cash ($90,887), Mr. Dammerman ($106,824), Mr. Fresco ($173,258),
Ms. Fudge ($92,190), Mr. Langone ($409,980) and Mr. McNealy ($76,891). The non-
employee directors are not eligible to participate in GE's Incentive
Compensation Plan, employee stock option plans or in any pension plans of GE or
its subsidiaries.
It is the Board's policy that directors should not stand for re-election
after their 73rd birthday. The Board has temporarily waived that policy to
permit increased leadership continuity for the Company during the CEO transition
process, and at Mr. Welch's request, Mr. Cathcart, Mrs. Michelson and Dr. Rhodes
have agreed to serve one additional term to assist in that transition.
GE has provided liability insurance for its directors and officers since
1968. Zurich Insurance Company and Executive Risk Speciality Insurance Company
are the principal underwriters of the current coverage, which extends until June
11, 2002. The annual cost of this coverage is approximately $5.8 million.
As part of the Company's overall support for charitable institutions, and in
order to preserve its ability to attract directors with outstanding experience
and ability, the Company maintains a plan which permits each director to
recommend up to five charitable organizations that would share in a $1 million
contribution to be made by the Company upon the director's retirement or death.
The directors will not receive any financial benefit from this program
____
15
since the charitable deductions accrue solely to the Company. The overall
program will not result in a material cost to the Company.
To further align the non-employee directors' interests with the long-term
interests of the share owners, the share owners approved the 1996 Stock Option
Plan for Non-Employee Directors, which automatically provides yearly grants of
options from 1997 through 2003 (with each grant becoming exercisable in four
equal annual installments) to each non-employee director who is serving on the
Board at the time of such grant. Each annual grant permits the holder to
purchase from GE up to 18,000 shares of GE's common stock at the fair market
value of such shares on the date the option was granted. Under the terms of the
Plan, grants were made on January 31, 2000, at an exercise price of $44.50 per
share, and on January 31, 2001, at an exercise price of $46.00 per share, and
annual grants will be made on the last day of trading of GE stock in each
January hereafter through the year 2003. The options expire ten years after the
date they were granted or at such earlier date as may be provided by the Plan
provisions upon retirement, disability, death or other termination of service.
The Plan is administered by a committee of employee directors, none of whom is
eligible to receive awards under the Plan.
The directors who were serving on the board in 1991 and certain officers are
defendants in a civil suit purportedly brought on behalf of the Company as a
share owner derivative action (the McNeil action) in New York State Supreme
Court, New York County, in 1991. The suit alleges the Company was negligent and
engaged in fraud in connection with the design and construction of containment
systems for nuclear power plants and contends that, as a result, GE has incurred
significant financial liabilities and is potentially exposed to additional
liabilities from claims brought by the Company's customers. The suit alleges
breach of fiduciary duty by the directors and seeks unspecified compensatory
damages and other relief. The Company and the defendants believe these claims
are without merit and are defending the suit.
. Certain Transactions
Mr. Penske has an indirect financial interest in Penske Truck Leasing Co., L.P.,
a limited partnership formed in 1988 between a subsidiary of Penske Corporation
and a subsidiary of GE Capital Corporation (GE Capital) in order to operate a
truck leasing and rental business. In connection with a 1996 restructuring that
increased GE Capital's interest in the partnership from 50% to 79%, the Penske
Corporation subsidiary will receive annual payments, declining from $11.3
million to $9.3 million over a ten-year period, with the majority of such
payments contingent upon the partnership achieving certain revenue thresholds.
GE Capital has also extended acquisition and working capital loans and
guarantees to the partnership, which totaled about $3.6 billion at the end of
2000, all on terms substantially equivalent to those extended to similar
affiliates and joint ventures. Mr. Penske also has a direct financial interest
in and controls Penske Capital Partners, LLC, which in 1997 entered into an
investment agree-
____
16
ment with GE Capital's Equity Capital Group and other investors. The agreement
permitted GE Capital to invest up to $100 million of equity in transactions
involving selected transportation-related companies in return for its agreement
to pay Penske Capital Partners an annual fee of up to $1.5 million for
evaluating and, as appropriate, managing such investments. GE Capital also
agreed that, after it recovered its investments and received a preferred return
on any such investments, Penske Capital Partners would then receive a 20%
interest in the remaining profits from the GE Capital investments.
GE has, for a number of years, used the services of the law firm of King &
Spalding, in which Mr. Nunn is a partner, for a variety of matters. Also, GE and
its subsidiaries have obtained investment banking and other financial services
from J.P. Morgan Chase & Co., of which Mr. Warner is Chairman of the Board, and
from certain of its subsidiaries and predecessors. Similarly, GE has obtained
brokerage services and GE and its subsidiaries have participated in investments
with Invemed Associates, LLC, of which Mr. Langone is Chairman, President and
Chief Executive Officer and in which he holds a controlling ownership interest.
For several years, GE and its subsidiaries have purchased computer equipment and
related services from Sun Microsystems, Inc. In 2000, GE Capital's Information
Technology Solutions business, a Sun distributor and value-added reseller,
purchased over $2.9 billion of Sun products and services for resale. GE Capital
also has a five-year global vendor financing agreement with Sun under which GE
Capital offers to provide loan and lease financing to Sun's customers. Mr.
McNealy is Chairman of the Board and Chief Executive Officer of Sun. GE and its
subsidiaries also have purchase, lease, finance, insurance and other
transactions and relationships in the normal course of business with companies
and organizations with which GE directors are associated, but which are not
sufficiently significant to be reportable. Management believes that all of these
transactions and relationships during 2000 were on terms that were reasonable
and competitive. Additional transactions and relationships of this nature may be
expected to take place in the ordinary course of business in the future.
================================================================================
COMPENSATION COMMITTEE REPORT
. Compensation Policies for Executive Officers
The Management Development and Compensation Committee of the Board of Directors
(the Committee), consisting entirely of non-employee directors, approves all of
the policies under which compensation is paid or awarded to the Company's
executive officers. The Company's basic compensation program for executive
officers currently consists of the following elements: annual payments of salary
and bonuses; annual grants of stock options; and periodic grants of restricted
stock units (RSUs) and other contingent long-term financial performance awards.
As described more fully below, each element of the Company's executive
compensation program has a somewhat different purpose. All stock
____
17
option, RSU and contingent long-term financial performance awards are made under
the share owner-approved GE 1990 Long-Term Incentive Plan (the Plan), which
limits total average annual awards to less than 1% of issued shares. In 1997,
the share owners approved the material terms of performance goals to be set by
the Committee for payments of bonuses, RSUs and long-term performance awards to
the Company's executive officers, and approved an amendment to the Plan to
establish a limit on the number of stock options that may be awarded to any
individual, so that the Company could continue to obtain tax deductions for the
full amount of such payments and awards under pertinent tax law.
As in prior years, and in accordance with the material terms of the
performance goals approved by the share owners, all of the Committee's judgments
during 2000 regarding the appropriate form and level of executive compensation
payments and incentive awards were ultimately based upon the Committee's
assessment of the Company's executive officers' embodiment of the "4-Es" of GE
leadership -- the personal energy to welcome and deal with the speed of change;
the ability to create an atmosphere that energizes others; the edge to make
difficult decisions; and the ability to consistently execute. The Committee's
determinations were also guided by the increasingly competitive demand for
superior executive talent, the Company's overall performance, and GE's future
objectives and challenges. The Committee did not rely solely upon a guideline or
formula based on any particular performance measure or single event in 2000. Key
factors affecting the Committee's judgments included: strong increases in
earnings and productivity; aggressive Six Sigma quality programs to provide
customer value in all the Company's product and service offerings; rapid
development and implementation of initiatives to expand e-Business
opportunities; increased revenues generated outside the United States and
further improvements in the Company's global competitive position; accelerated
growth of the Company's product service offerings; unyielding integrity, and
leadership in ensuring compliance with applicable law and Company ethics
policies; and continuation of productivity, asset utilization and employee
involvement initiatives that, among other things, provided improved cash flow
and increased return on share owner equity. The Committee also considered the
compensation practices and performances of other major corporations that are
most likely to compete with the Company for the services of executive officers.
Based upon all factors it deemed relevant, including those noted above and the
Company's superior overall long-term performance, the Committee considered it
appropriate, and in the best interest of the share owners, to set the overall
level of the Company's salary, bonus and other incentive compensation awards
above the average of companies in the comparison group in order to enable the
Company to continue to attract, retain and motivate the highest level of
executive talent possible.
Salary payments in 2000 were made to compensate ongoing performance
throughout the year. Bonuses for 2000 were based upon the Committee's
determination that the Company's 2000 financial results had exceeded the
performance goals previously established by the Committee and upon its judgment
_____
18
regarding the significance of each executive officer's contributions during
2000. The number of stock options granted to the Company's five most highly
compensated executive officers, and the hypothetical potential value of the
awards, are shown in the table on page 27. Each stock option permits the holder,
generally for a period of ten years, to purchase one share of GE stock from the
Company at the market price of GE stock on the date of grant. Stock options for
executive officers normally become exercisable in two installments, the first
half after three years and the other half after five years from the date of
grant.The number of RSUs awarded to the five most highly compensated executive
officers last year, and their market value on the date granted, are shown in the
table on page 23. In most cases, the restrictions on 25% of RSUs lapse three
years after grant, an additional 25% lapse in seven years and the remaining 50%
lapse at retirement. Stock options and RSUs provide strong incentives for
continued superior performance because, under the terms of these awards,
unexercised stock options and RSUs for which restrictions have not lapsed are
forfeited if the executive officer is terminated by the Company for performance
or voluntarily leaves the Company before retirement. The Committee also granted
long-term contingent financial performance incentive awards to key executives
for the 2000-2002 period to provide a continued emphasis on specified financial
performance goals which the Committee considers to be important contributors to
long-term share owner value. The new awards, which were more fully described in
last year's Proxy Statement, will be subject to forfeiture if the executive's
employment terminates for any reason other than disability, death or retirement
before December 31, 2002.
The Committee's decisions concerning the specific 2000 compensation elements
for individual executive officers, including the Chief Executive Officer, were
made within this broad framework and in light of each executive officer's level
of responsibility, performance, current salary, prior-year bonus and other
compensation awards. As noted above, in all cases the Committee's specific
decisions involving 2000 executive officer compensation were ultimately based
upon the Committee's judgment about the individual executive officer's
performance and potential future contributions, and about whether each
particular payment or award would provide an appropriate reward and incentive
for the executive to sustain and enhance the Company's long-term superior
performance.
. Basis for Chief Executive Officer Compensation
For 2000, Mr. Welch earned $16,700,000 in salary and bonus, as shown in the
Summary Compensation Table on page 22. The Committee considered this level of
payment appropriate in view of Mr. Welch's leadership of one of the world's most
respected and successful companies. In 2000, the Committee also granted Mr.
Welch 3,000,000 stock options, which will become exercisable on or after his
retirement, and 850,000 RSUs for which the restrictions lapse on April 30, 2001.
The primary basis for the Committee's determination to grant such stock options
and RSUs to Mr. Welch in 2000 was to recognize his 20 years of
____
19
outstanding service as CEO and his role in developing and implementing plans and
initiatives designed to increase the value of the Company during the remainder
of his employment and following his retirement. Last year, the Committee also
approved the Company's payment of annual premiums for a new split-dollar life
insurance policy for Mr. Welch, all of which will be repaid to the Company from
the policy. As reported in the last four Proxy Statements, the Board of
Directors entered into an employment contract with Mr. Welch in 1996, which
required him to serve as the Chairman and Chief Executive Officer of the Company
until at least December 31, 2000, at the pleasure of the Board of Directors on
terms no less favorable than his then current conditions of employment. In
addition, after his retirement, the contract requires Mr. Welch, when requested
by the Company's then current Chief Executive Officer, to be available for up to
30 days a year for the remainder of his lifetime to provide consulting services
or to participate in external events or activities on behalf of the Company. In
return for these commitments by Mr. Welch, the Board agreed to pay him, during
the term of the consulting agreement, a daily consulting fee for the days he
renders services based on his daily salary rate in the year prior to his
retirement, the first five days of which will be paid in advance through an
annual retainer, and to provide him continued lifetime access to Company
facilities and services comparable to those which are currently made available
to him by the Company.
The specific bases for the Committee's determinations regarding Mr. Welch's
compensation in 2000 included his aggressive leadership, which drove the
Company's outstanding financial results and improved its overall global
competitive position; his determination to confront the challenges and seize the
opportunities presented by e-Business and digital technology, and to achieve
preeminent customer-focused Six Sigma quality in all of the Company's products
and services; his drive to reinforce a culture of integrity, compliance,
diversity, stretch targets, boundaryless behavior and employee involvement
throughout the Company; and his firm commitment to create a leadership team that
will continue the Company's success well into the 21st century. As in prior
years, the key judgment the Committee made in determining Mr. Welch's 2000
compensation was its assessment of his ability and dedication to continue
increasing the long-term value of the Company for the share owners by providing
the leadership and vision that he has provided throughout his twenty-year tenure
as Chairman and Chief Executive Officer, during which GE's market value had
increased by more than $460,000,000,000 at the end of 2000. This performance is
further highlighted by the performance graph on page 25, which covers Mr.
Welch's tenure as CEO and compares GE stock performance with the stock
performance of other companies, as measured by broad market indices.
. Broad-Based Employee Stock Option Program
Over 30,000 employees below the executive officer level have been awarded one or
more stock option grants under a broad-based stock option program initiated
____
20
in 1989. This program is an increasingly vital element of the Company's drive to
identify, develop and motivate the high-potential leaders who will sustain GE's
outstanding performance far into the 21st century. It also reinforces in the
Company the entrepreneurial environment and spirit of a small company by
providing real incentives for these employees to sustain and enhance GE's long-
term performance. The Committee believes that the superior performance of these
individuals will contribute significantly to the Company's future success.
. Compensation Committee Interlocks and Insider Participation
The Management Development and Compensation Committee is composed of the
following non-employee directors: Silas S. Cathcart (Chairman), Claudio X.
Gonzalez, Kenneth G. Langone, Gertrude G. Michelson, Sam Nunn, Roger S. Penske,
Frank H. T. Rhodes and Andrew C. Sigler. Mr. Cathcart was reappointed to the
Committee in 1992 and became Chairman in 1993. He served as a member of the
Committee from 1977 to 1987 and as a director of GE since 1972, except for the
period during 1987 to 1989 when he served as Chairman and CEO of Kidder, Peabody
Group Inc., a former operating subsidiary of the Company.
*****
The foregoing report on executive compensation is provided by the following
non-employee directors, who constituted the Management Development and
Compensation Committee during 2000:
Silas S. Cathcart (Chairman) Sam Nunn
Claudio X. Gonzalez Roger S. Penske
Kenneth G. Langone Frank H. T. Rhodes
Gertrude G. Michelson Andrew C. Sigler
____
21
================================================================================
SUMMARY COMPENSATION TABLE
Annual Compensation
--------------------------------------------------------------------------------
Name and Other Annual Total Annual
Principal Position Year Salary Bonus Compensation/1/ Compensation
-------------------------------------------------------------------------------------------------------------------------------
John F. Welch, Jr. 2000 $ 4,000,000 $ 12,700,000 $ 54,019 $ 16,754,019
Chairman of the Board and 1999 3,325,000 10,000,000 - 13,325,000
Chief Executive Officer 1998 2,800,000 7,200,000 104,944 10,104,944
Dennis D. Dammerman 2000 $ 1,733,333 $ 3,500,000 $ - $ 5,233,333
Vice Chairman of the Board 1999 1,400,000 2,800,000 - 4,200,000
and Executive Officer 1998 1,100,000 2,000,000 - 3,100,000
Robert C. Wright 2000 $ 1,766,667 $ 3,100,000 $ 153,991 $ 5,020,658
Vice Chairman of the Board 1999 1,495,833 2,500,000 105,463 4,101,296
and Executive Officer 1998 1,350,000 2,000,000 100,587 3,450,587
Jeffrey R. Immelt 2000 $ 1,000,000 $ 2,500,000 $ 103,340 $ 3,603,340
President and 1999 616,667 1,200,000 121,124 1,937,791
Chairman-Elect 1998 533,333 850,000 91,887 1,475,220
Benjamin W. Heineman, Jr. 2000 $ 1,175,000 $ 1,900,000 $ 69,937 $ 3,144,937
Senior Vice President, 1999 1,050,000 1,560,000 97,036 2,707,036
General Counsel and Secretary 1998 983,333 1,300,000 121,956 2,405,289
-------------------------------------------------------------------------------------------------------------------------------
Notes:
/1/ This column includes the aggregate incremental cost to the Company of
providing various perquisites and personal benefits in 2000 in excess of
reporting thresholds, including financial counseling in 2000 for Mr. Welch
($33,920), Mr. Wright ($63,990) and Mr. Heineman ($22,860), and for Mr. Wright
in 1998 ($26,820), and the use of a car for Mr. Welch in 2000 ($18,796). It also
includes personal use of Company aircraft for Mr. Immelt in 2000 ($70,854), 1999
($86,998) and 1998 ($61,014), for Mr. Wright in 2000 ($68,494), 1999 ($41,644)
and 1998 ($60,048) and for Mr. Heineman in 2000 ($31,950).
/2/ This column shows the market value of restricted stock unit (RSU) awards on
date of grant. The Committee periodically grants restricted stock or RSUs to
executives of the Company. The aggregate holdings and market value of restricted
stock and RSUs held on December 31, 2000, by the individuals listed in this
table, are: Mr. Welch, 4,814,017 shares or units/$230,771,940; Mr. Dammerman,
1,395,370 shares or units/$66,890,549; Mr. Wright, 1,515,383 shares or
units/$72,643,673; Mr. Immelt, 814,638 shares or units/ $39,051,709; and Mr.
Heineman, 680,773 shares or units/$32,634,556. The restrictions on these shares
and units lapse on a scheduled basis over the executive officer's career, or
upon death, with the restrictions on 25% of the units generally scheduled to
lapse three and seven years after the date of grant, and the restrictions on the
remaining 50% scheduled to lapse at retirement. Regular quarterly dividends or
dividend equivalents are paid on restricted stock and RSUs held by these
individuals.
______
22
================================================================================
Long-Term
Compensation All Other Compensation
---------------------------------------------------------------------------------------------------------------------------------
Awards Payouts Payments
------ -------
Relating to Earnings on Value of
Number Employee Deferred Supplemental
Restricted of Stock LTIP Savings Compen- Life Insurance
Stock Units2 Options Payouts/3/ Plan /4/ sation /5/ Premiums /6/ Total
---------------------------------------------------------------------------------------------------------------------------------
$ 48,715,625 3,000,000 - $ 315,050 $ 974,005 $ 1,269,064 $ 2,558,119
- 1,875,000 $ 31,325,000 242,350 746,383 51,050 1,039,783
27,018,750 1,500,000 - 194,300 556,336 80,881 831,517
$ 13,093,750 550,000 - $ 109,650 $ 107,696 $ 26,444 $ 243,790
- 600,000 $ 8,522,135 84,000 68,696 28,007 180,703
6,754,688 390,000 - 61,250 47,723 32,252 141,225
$ 10,475,000 400,000 - $ 61,850 $ 149,649 $ 28,698 $ 240,197
- 450,000 $ 10,258,333 52,400 103,573 48,035 204,008
6,754,688 375,000 - 77,000 116,812 54,907 248,719
$ 15,000,000 550,000 - $ 56,000 $ 18,168 $ 39,340 $ 113,508
- 375,000 $ 4,233,333 36,500 13,152 25,075 74,727
6,754,688 270,000 - 29,200 11,677 27,435 68,313
$ 2,095,000 150,000 - $ 68,425 $ 90,165 $ 22,462 $ 181,052
- 180,000 $ 3,823,913 59,550 63,766 30,917 154,233
2,251,563 180,000 - 53,625 50,769 36,292 140,686
---------------------------------------------------------------------------------------------------------------------------------
/3/ These amounts represent the dollar value of payouts pursuant to the long-
term financial performance incentive awards granted in 1997. Half of the amounts
were paid in RSUs which are subject to forfeiture if the named executive
terminates employment within three years following payment for any reason other
than disability, death or retirement.
/4/ These amounts represent Company payments of 3.5% of eligible pay made in
connection with the Company's Savings and Security Program.
/5/ This compensation represents the difference between market interest rates
determined pursuant to SEC rules and the 10% to 14% interest contingently
credited by the Company on salary deferred by the executive officers under
various salary deferral plans in effect between 1987 and 2000. Under all such
plans, the executive officers generally must remain employed by the Company for
at least four years following the deferrals, or retire after the full year of
deferral, in order to obtain the stated interest rate.
/6/ This column includes the estimated dollar value of the Company's portion of
insurance premium payments for supplemental split-dollar life insurance provided
to Company officers. GE will recover all split-dollar premiums paid by it from
the policies. The estimated value is calculated, in accordance with SEC rules,
as if the 2000 premiums were advanced to the executive officers without interest
until the time the Company expects to recover its premium payments.
______
23
================================================================================
FIVE-YEAR PERFORMANCE GRAPH: 1996 - 2000
Comparison of Five-Year Cumulative Total Return Among
GE, S&P 500 and Dow Jones Industrial Average (DJIA)
The annual changes for the five- and nineteen-year periods shown in the graphs
on this and the opposite page are based on the assumption that $100 had been
invested in GE stock and each index on December 31, 1995 (as required by SEC
rules) and December 31, 1980, respectively, and that all quarterly dividends
were reinvested at the average of the closing stock prices at the beginning and
end of the quarter. The total cumulative dollar returns shown on the logarithmic
scale of the graphs represent the value that such investments would have had on
December 31 of each subsequent year.
--------------------------------------------------------------------------------
[GRAPH]
31-Dec GE DJIA S&P 500
1995 100 100 100
1996 140 129 123
1997 212 161 164
1998 299 190 211
1999 460 242 255
2000 432 231 232
24
================================================================================
TWENTY-YEAR PERFORMANCE GRAPH: 1981 - 2000
Comparison of Twenty-Year Cumulative Total Return Among GE, S&P 500 and Dow
Jones Industrial Average (DJIA)
The graph below shows the cumulative total return to GE share owners since
December 31, 1980, shortly before Mr. Welch became Chairman and Chief Executive
Officer in April 1981, compared with the same indices shown on the five-year
graph, thus illustrating the relative performance of the Company during his
tenure in that position. As with the five-year graph, this comparison assumes
that $100 was invested in GE and each index at the start of the period and that
all dividends were reinvested. The total cumulative dollar returns shown
represent the value that such investments would have had on December of each
subsequent year.
--------------------------------------------------------------------------------
[GRAPH]
31-Dec GE DJIA S&P 500
1980 100 100 100
1981 99 96 95
1982 171 123 116
1983 219 155 142
1984 220 157 150
1985 293 209 198
1986 357 266 235
1987 375 281 248
1988 394 326 289
1989 586 432 380
1990 538 430 368
1991 739 534 480
1992 851 573 517
1993 1,073 671 569
1994 1,076 705 576
1995 1,563 965 793
1996 2,194 1,245 975
1997 3,315 1,555 1,301
1998 4,676 1,837 1,672
1999 7,185 2,339 2,024
2000 6,749 2,229 1,839
25
================================================================================
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
As discussed in the Compensation Committee Report beginning on page 17, stock
options were granted in 2000 as an incentive for future superior performance
leading to increased share owner value. Each stock option permits the holder,
generally for a period of ten years, to purchase one share of GE stock from the
Company at the market price of GE stock on the date of grant. The relationship
between the potential gains in share owner value and the stock options granted
to employees in 2000 is illustrated in the examples set forth in the first table
on the opposite page.
That table shows, among other data, hypothetical potential gains from stock
options granted in 2000 and the corresponding hypothetical potential gains in
total share owner value. These hypothetical gains are based entirely on assumed
annual growth rates of 5% and 10% in the value of the Company's stock price over
the ten-year life of the stock options granted in 2000 (which would equal a
total increase in stock price of 63% and 159%, respectively). These assumed
rates of growth were selected by the Securities and Exchange Commission for
illustration purposes only and are not intended to predict future stock prices,
which will depend upon market conditions and the Company's future performance
and prospects.
The stock options granted to Mr. Welch in 2000, for example, would produce
the pre-tax gain of $274,024,094 shown in the first table only if the Company's
stock price rises to more than $148 per share before Mr. Welch exercises the
stock options. Based on the number of shares of GE stock outstanding at the end
of 2000, such an increase in the Company's stock price would produce a
corresponding aggregate pre-tax gain of more than $905,000,000,000 for the
Company's share owners. In other words, Mr. Welch's potential gain from stock
options granted in 2000 would equal about three-hundredths of one percent (i.e.,
0.03%) of the potential gain to all share owners resulting from the assumed
future stock price increases.
The second table on the opposite page provides information on previously
granted Stock Appreciation Rights (SARs) and stock options exercised by the five
most highly compensated executive officers during 2000, as well as information
on their SAR and stock option holdings at the end of 2000. In 1996, the
Committee changed its practice and began granting stock options instead of SARs
to executive officers and also replaced all outstanding SARs that had not become
exercisable in 1996 with stock options. The replacement stock options have grant
prices, forfeiture provisions, and vesting and expiration dates identical to the
SARs they replaced in order to provide the same incentive values as the original
SARs without increasing the economic benefit to any executive officer. As shown
in the table, Mr. Welch received an actual pre-tax gain of $57,112,560 from SARs
exercised in 2000. This gain was based solely upon increases in GE's stock price
between the date these SARs were granted and the date they were exercised. SARs
expire ten years after the date of grant and per-
______
26
================================================================================
STOCK OPTIONS GRANTED IN 2000
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Ten-Year Grant Term
------------------------------------------------------------------------------------------------------------------------------------
% of
Total
Number Options Exercise At 0% At 5% At 10%
of Granted or Base Expira- Annual Annual Annual
Name of Options to All Price tion Growth Growth Growth
Executive/Group Granted Employees Per Share Date Rate Rate Rate
------------------------------------------------------------------------------------------------------------------------------------
John F. Welch, Jr. 3,000,000 6.5% $ 57.3125 9/22/10 0 $ 108,130,570 $ 274,024,094
Dennis D. Dammerman 550,000 1.2% $ 57.3125 9/22/10 0 $ 19,823,938 $ 50,237,751
Robert C. Wright 400,000 0.9% $ 57.3125 9/22/10 0 $ 14,417,409 $ 36,536,546
Jeffrey R. Immelt 350,000 0.8% $ 57.3125 9/22/10 0 $ 12,615,233 $ 31,969,478
200,000 0.4% $ 49.3750 11/24/10 $ 6,210,334 $ 15,738,207
Benjamin W. Heineman, Jr. 150,000 0.3% $ 57.3125 9/22/10 0 $ 5,406,528 $ 134,701,205
-------------------------
All Share Owners NA NA NA NA 0 $ 357,552,202,000/(2)/ $ 905,103,670,000/(2)/
All Optionees - 45,876,175 100% $ 47.861 /(1)/ 0 $ 1,380,851,110 $ 3,499,347,826
% of Total NA NA NA NA N/A 0.4% 0.4%
Share Owners' Value
------------------------------------------------------------------------------------------------------------------------------------
/1/ Options expire on various dates during the year 2010. Exercise price shown
is an average of all grants.
/2/ Based on the number of shares outstanding at December 31, 2000.
================================================================================
AGGREGATED SARs/STOCK OPTIONS EXERCISED IN 2000, AND DECEMBER 31, 2000
SAR/OPTION VALUE
Exercised in 2000 Unexercised at December 31, 2000
--------------------------------------------------------------------------------------------------------------
Number Number of SARs/Options Value of SARs/Options/1/
---------------------- ---------------------
Name of of SARs/ $ Value Unexer- Unexer-
Executive Options Realized Exercisable cisable Exercisable cisable
--------------------------------------------------------------------------------------------------------------
John F. Welch, Jr. 1,200,000 $57,112,560 6,675,000 7,010,000 $244,514,313 $ 97,003,749
Dennis D. Dammerman 189,999 $ 8,404,766 1,069,998 1,967,500 $ 37,587,565 $ 26,246,182
Robert C. Wright 270,000 $12,337,083 1,335,000 1,660,000 $ 47,650,038 $ 24,886,015
Jeffrey R. Immelt 139,000 $ 6,437,402 410,000 1,366,000 $ 26,076,135 $ 13,905,551
Benjamin W. Heineman, Jr. 0 $ 0 937,500 727,500 $ 34,512,379 $ 11,967,379
--------------------------------------------------------------------------------------------------------------
/1/ SAR and option values are based upon the difference between the grant prices
of all SARs and options awarded in 2000 and prior years and the December 29,
2000, closing price for the Company's stock of $47.9375 per share.
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27
mit the executive officer to receive an amount of cash, before tax, equal to the
difference between the grant price of the SAR (which is equal to the closing
price of the Company's common stock on the date of grant) and the highest
closing price of the Company's common stock during a ten-business-day period,
beginning on the third business day following the public release of the
Company's quarterly summary statement of sales and earnings in which the SAR is
exercised.
================================================================================
RETIREMENT BENEFITS
Employees are generally eligible to retire with unreduced benefits under Company
retirement plans at age 60 or later, and with social security benefits at age 62
or later. The approximate annual retirement benefits provided under Company
retirement plans and social security for GE employees in higher salary
classifications retiring directly from the Company at age 62 or later are shown
in the table below.
Estimated Total Annual Retirement Benefits Under the GE Pension Plan, the GE
Supplementary Pension Plan, the GE Excess Benefit Plan and Social Security
Earnings credited for Years of service at retirement
---------------------------------------------------------------
retirement benefits 20 25 30 35 40
------------------------------------------------------------------------------------------
$ 2,000,000 $ 710,800 $ 884,720 $ 1,058,640 $ 1,200,000 $ 1,200,000
3,000,000 1,060,800 1,322,220 1,583,640 1,800,000 1,800,000
4,000,000 1,410,800 1,759,720 2,108,640 2,400,000 2,400,000
5,000,000 1,760,800 2,197,220 2,633,640 3,000,000 3,000,000
6,000,000 2,110,800 2,634,720 3,158,640 3,600,000 3,600,000
8,000,000 2,810,800 3,509,720 4,208,640 4,800,000 4,800,000
10,000,000 3,510,800 4,384,720 5,258,640 6,000,000 6,000,000
12,000,000 4,210,800 5,259,720 6,308,640 7,200,000 7,200,000
14,000,000 4,910,800 6,134,720 7,358,640 8,400,000 8,400,000
16,000,000 5,610,800 7,009,720 8,408,640 9,600,000 9,600,000
18,000,000 6,310,800 7,884,720 9,458,640 10,800,000 10,800,000
Note: The amounts shown above are applicable to employees retiring in 2001 at
age 62.
--------------------------------------------------------------------------------
Amounts shown as "earnings credited for retirement benefits" in this table
represent the average annual covered compensation paid for the highest 36
consecutive months out of the last 120 months prior to retirement. For 2000,
covered compensation for the individuals named in the table on page 22 is the
same as the total of their salary and bonus amounts shown in that table. As of
February 9, 2001, the GE executive officers listed had the following years of
credited service with the Company: Mr. Welch, 40 years; Mr. Dammerman, 33 years;
Mr. Wright, 32 years; Mr. Immelt, 18 years; and Mr. Heineman, 13 years. The
approximate annual retirement benefits provided under Company retirement plans
are payable in fixed monthly payments for life, with a guaranteed minimum term
of five years.
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28
================================================================================
INDEPENDENT AUDITORS FEES
In addition to retaining KPMG LLP to audit the consolidated financial statements
for 2000, the Company and its affiliates retained KPMG, as well as other
accounting and consulting firms, to provide various consulting services in 2000,
and expect to continue to do so in the future. The aggregate fees billed for
professional services by KPMG in 2000 for these various services were:
. Audit Fees: $23.9 million for services rendered for the annual audit of the
Company's consolidated financial statements for 2000 and the quarterly
reviews of the financial statements included in the Company's Forms 10-Q;
. Financial Information Systems Design and Implementation Fees: $11.5 million
for services rendered in connection with the design or implementation of
hardware or software systems that aggregate source data underlying the
financial statements or generate information that is significant to the
financial statements taken as a whole; and
. All Other Fees: $13.8 million for tax services; $15.5 million for non-
financial statement audit services such as due diligence procedures
associated with mergers and acquisitions; and $38.9 million for all other
services consisting primarily of information technology consulting and
assistance for systems not associated with the financial statements.
Although the Company expects to continue to retain KPMG and other firms to
assist in the design and implementation of its financial information systems, GE
managers make all management decisions with respect to such systems, and are
responsible for evaluating the adequacy of such systems and for establishing and
maintaining the Company's system of internal accounting controls.
================================================================================
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors (the Committee) is comprised of
the eight directors named below. Each member of the Committee is an independent
director as defined by New York Stock Exchange rules. The Committee has adopted
a written charter which has been approved by the Board of Directors, and which
is set forth in Appendix A of this Proxy Statement. The Committee has reviewed
and discussed the Company's audited financial statements with management, which
has primary responsibility for the financial statements. KPMG LLP, the Company's
independent auditor for 2000, is responsible for expressing an opinion on the
conformity of the Company's audited financial statements with generally accepted
accounting principles. The Committee has discussed with KPMG the matters that
are required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees). KPMG has provided to the Committee the
written disclosures and the letter required by Independence Standards
____
29
Board Standard No. 1 (Independence Discussions with Audit Committees), and the
Committee discussed with KPMG that firm's independence. The Committee also
considered whether KPMG's provision of non-audit services, including financial
information systems design and implementation services, to GE and its affiliates
is compatible with KPMG's independence.
Based on the considerations referred to above, the Committee recommended to
the Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for 2000 and that KPMG be appointed
independent auditors for the Company for 2001. The foregoing report is provided
by the following independent directors, who constitute the Audit Committee:
Gertrude G. Michelson (Chairman) Roger S. Penske
Silas S. Cathcart Frank H.T. Rhodes
Ann M. Fudge Andrew C. Sigler
Claudio X. Gonzalez Douglas A. Warner III
================================================================================
. APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP have been recommended by the Audit Committee of the Board for
reappointment as the Independent Auditors for the Company. KPMG LLP were the
Independent Auditors for the Company for the year ended December 31, 2000. The
Firm is a member of the SEC Practice Section of the American Institute of
Certified Public Accountants. Subject to share owner approval, the Board of
Directors has appointed this Firm as the Company's Independent Auditors for the
year 2001.
Representatives of the Firm are expected to attend the 2001 Annual Meeting.
They will have an opportunity to make a statement if they desire to do so and
will be available to respond to appropriate share owner questions.
Your Board of Directors recommends a vote FOR the following proposal:
Resolved that the appointment by the Board of Directors of the Firm of KPMG LLP,
Stamford Square, Stamford, Connecticut, as Independent Auditors for the Company
for the year 2001 is hereby approved.
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30
================================================================================
SHARE OWNER PROPOSALS
Some of the following share owner proposals contain assertions about GE that, in
the judgment of the Board, are incorrect. Rather than refuting all these
inaccuracies, however, your Board has recommended a vote against these proposals
for broader policy reasons as set forth following each proposal. Share holdings
of the various share owner proponents and, where applicable, names and addresses
of filers and co-filers, will be supplied upon oral or written request to GE.
. Share Owner Proposal No. 1
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W., Suite
215, Washington, D.C. 20037, has notified GE that she intends to present the
following proposal at this year's meeting:
"Resolved: That the stockholders of General Electric, assembled in Annual
Meeting in person and by proxy, hereby request the Board of Directors to take
the necessary steps to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes as
shall equal the number of shares he or she owns multiplied by the number of
directors to be elected, and he or she may cast all of such votes for a single
candidate, or any two or more of them as he or she may see fit.
"Reasons: Many states have mandatory cumulative voting, so do National
Banks. In addition, many corporations have adopted cumulative voting. Last year
the owners of 469,832,858 shares, representing approximately 22.4% of shares
voting, voted FOR this proposal.
"If you agree, please mark your proxy FOR this resolution."
Your Board of Directors recommends a vote AGAINST this proposal.
Like most major corporations, GE provides that each share of common stock
shall be entitled to one vote for each nominee for director. This procedure
ensures that each director is elected by share owners representing a majority of
all shares voted. It has served the Company well. The proposal would alter this
procedure in a way that could permit share owners representing less than a
majority of all shares to elect a director. Because each director oversees the
management of the Company for the benefit of all share owners, your Board
believes that changing the current voting procedure would not be in the best
interests of all share owners and therefore recommends a vote against the
proposal.
. Share Owner Proposal No. 2
The Missionary Oblates of Mary Immaculate, 391 Michigan Avenue, N.E.,
Washington, D.C. 20017-9444, and other filers have notified GE that they intend
to submit the following proposal at this year's meeting:
"Whereas, our company, as a global corporation, faces numerous complex
problems which also affect our interests as shareholders. The international
context within which our company operates is becoming increasingly diverse as we
enter the new millennium.
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31
"A 'Millennium Poll on Corporate Social Responsibility' interviewed over
25,000 citizens in 23 countries and found that two in three citizens want
companies to go beyond their historical role of making a profit, paying taxes,
employing people and obeying all laws; they want companies to contribute to
broader societal goals as well. (Environics International Ltd., October 1999)
"Companies face important concerns arising from diverse cultures and
political and economic contexts. These concerns require management to address
issues that include human rights, workers' right to organize and bargain
collectively, non-discrimination in the workplace and sustainable community
development. Companies must find effective ways to eliminate the use of child
labor, forced labor, bribery and harmful environmental practices.
"Our company recently issued its revised global code, `Integrity: the
Spirit and The Letter of Our Commitment.' While the code includes issues related
to employment practices, it fails to reference internationally recognized core
labor standards of the International Labor Organization, a tripartite body
founded in 1919 and made up of representatives of business, government and
labor. It is essential for a global company to include international labor and
human rights standards as principles guiding its policies and behavior.
"Companies should be in a position to assure shareholders that its
employees are treated fairly and paid a sustainable living wage wherever they
work in the global economy. We believe that General Electric should strengthen
its code by including mechanisms to make sure its suppliers comply with our
company's standards. One important element of ensuring compliance is the
utilization of independent monitors made up of respected local human rights,
religious and other non-governmental organizations that know the local culture.
"Improving the quality of life for employees and their communities can lead
to increased productivity and enhance the bottom line for the company.
"Resolved, the shareholders request the Board of Directors to amend the
Company's Code of Conduct to include the International Labor Organization's core
labor standards and to report this action to the shareholders by October 2001.
"Supporting Statement: We recommend the inclusion of the following
principles:
1. All workers have the right to form and join trade unions and to
bargain collectively. (ILO Convention 87 and 98)
2. Workers representatives shall not be the subject of discrimination and
shall have access to all workplaces necessary to enable them to carry
out their representation functions. (ILO Convention 135)
3. There shall be no discrimination or intimidation in employment.
Equality of opportunity and treatment shall be provided regardless of
race, color, sex, religion, political opinion, age, nationality,
social origin or other distinguishing characteristics. (ILO Convention
100 and 111)
4. Employment shall be freely chosen. There shall be no use of force,
including bonded or prison labor. (ILO Convention 29 and 105)
5. There shall be no use of child labor. (ILO Convention 138)"
____
32
Your Board of Directors recommends a vote AGAINST this proposal.
GE is committed to operating in every country where it does business in
full compliance with all applicable laws and has adopted and implemented a code
of conduct regarding a variety of matters, including fair treatment of
employees. GE has also implemented a substantial and ongoing global education
effort to assure that employees and managers understand both the spirit and
letter of these requirements and has established a global, multi-language
network of helplines and ombudspersons so that employees can raise concerns and
have them promptly addressed with care and respect. Your Board of Directors
therefore does not believe that the code of conduct suggested in the proposal is
necessary and recommends a vote against the proposal.
. Share Owner Proposal No. 3
The Sisters of St. Dominic of Caldwell, New Jersey, 52 Old Swartswood Station
Road, Newton, NJ 07860, and other filers have notified GE that they intend to
submit the following proposal at this year's meeting:
"Whereas:
"General Electric disposed of at least 1.3 million pounds of PCBs
(polychlori-nated biphenyls) into the Hudson River. An additional large amount
seeped beneath GE plants in Fort Edward and Hudson Falls, NY, some of which is
currently discharging into the Hudson River. The Environmental Protection Agency
designated 200 miles of the Hudson River as a Superfund site in 1984. In
February 1976, a state Department of Conservation Hearing Officer, in a case
against GE, described GE's actions as `corporate abuse' and found that the
record 'overwhelmingly' demonstrated that GE violated NY State law by
discharging large quantities of PCBs into the Hudson River.
"The federal government regulates PCBs as a known animal carcinogen and
probable human carcinogen. Additional independent evidence indicates that PCBs
may affect the immune and reproductive systems, cause endoctrine disruption and
have neurological effects.
"Sampling by the Environmental Protection Agency and the NYS Department of
Environmental Conservation has determined that PCB concentrations in the Upper
Hudson sediments range as high as 40 times the state standard. EPA determined in
1999 that the health risk from eating PCB-contaminated fish from the Upper
Hudson exceeds the EPA protective level by 1000 times. New York has warned
children under 15 and women of childbearing age to eat no fish from the Hudson,
south of the GE plants.
"Despite repeated government and other studies determining that PCBs are a
serious threat, GE engages in extensive public relations efforts, suggesting
that 'there is no credible evidence that PCBs in the Hudson River pose a risk to
people or wildlife,' (GE spokesman Mark Behan, EPA Reports Dangers in Eating
Fish From Upper Hudson River, Associated Press, 8/4/99).
"GE has engaged in extensive public relations and lobbying efforts
concerning the federal Superfund law, and related state laws, and repeatedly has
challenged federal and state enforcement actions. These efforts have tarnished
GE's credibility and delayed the cleanups.
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33
"Resolved: Shareholders request the Board of Directors to report by August
1, 2001, at reasonable cost and excluding confidential information, its annual
expenditures by category and specific site (where applicable) for each year from
1990-2000, on attorney's fees, expert fees, lobbying, and public relations/media
expenses, relating in any way to the health and environmental consequences of
PCB exposures, GE's remediation of sites contaminated by PCBs, and/or hazardous
substance laws and regulations, as well as expenditures on actual remediation of
PCB contaminated sites.
"Statement Of Support: A recent example of GE's misleading media efforts
was a public relations document concerning a GE-financed study by Dr. Renata
Kimbrough and others examining the cancer mortality of GE plant employees. GE's
document failed to note that scientists at the Agency for Toxic Substances and
Disease Registry stated the study `suffered from healthy worker effect bias,
failed to account for latency, potentially insufficient dosage differences ...
and poor statistical power (and) did find excesses in three of the six cancers
of interest.'"
Your Board of Directors recommends a vote AGAINST this proposal.
GE has undertaken substantial efforts to remediate the effects of past
waste disposal, to comply with current standards of environmental protection and
worker safety, and to prevent future environmental harm. Moreover, GE is
accountable to many units and levels of government, both in the United States
and in other nations, for sound environmental practices. As part of this
accountability, GE complies with governmental reporting requirements regarding
environmental matters. Under these circumstances - a substantial Company program
and regulatory requirements of localities, states, the federal government and
other nations - your Board does not believe that creating the type of report
requested by the proponents would help the Company improve its environmental
performance. Therefore, your Board recommends a vote against this proposal.
. Share Owner Proposal No. 4
GE Stockholders' Alliance, 5349 W. Bar X Street, Tucson, AZ 85713-6402, and
other filers have notified GE that they intend to submit the following proposal
at this year's meeting:
"Whereas U.S. utility deregulation is revealing the excessive cost of
nuclear power, leading to the likely early shutdown of many operating reactors.
"Whereas Wall Street reflects diminishing confidence in nuclear utilities;
Moody's average bond ratings for utilities with significant nuclear investments
have been dramatically lower than for utilities with no nuclear investments;
"Whereas shaky world economic conditions and growing threats of terrorism
make new reactor sales unlikely;
"Whereas reactor deterioration due to premature aging from radiation exposure
and corrosion and other technical flaws of GE's reactors require extensive
retrofits to keep them running (such as to modify containments, and core
____
34
shrouds); the continued operation of these dangerous reactors could result in a
catastrophic accident, exposing GE to severe financial risks and exposing
workers and the public to potential personal harm;
"Whereas GE-Nuclear Energy brings in only about 1.25% of the Company's
gross revenues;
"Whereas each 1000 megawatt reactor generates enough plutonium each year
for at least 40 nuclear bombs; and
"Whereas, according to the Rocky Mountain Institute, if enough nuclear
reactors were built to mitigate global warming, one would have to go on line
every three days for the next 40 years, bankrupting our economy (siphoning
scarce monies from renewable energy --- the REAL solution to global warming),
and adding still more lethal radioactive waste with no safe disposal technology
or location for any of it;
"Therefore Be It Resolved that the Shareholders request Management to
prepare a report for Shareholders within four months, to examine: (1) the
feasibility of implementing the phased withdrawal of GE from the promotion and
production of new nuclear power reactors and (2) facilitation of the expedited
decommissioning of the GE reactors currently on line. That report should include
an evaluation of the economic, ethical, environmental, national security,
nuclear weapons proliferation and public health impacts from GE's continuing
participation in nuclear power.
"Supporting Statement: It has been more than 27 years since an order was
placed (and not subsequently canceled) for a U.S. nuclear power plant. Strong
public opposition to nuclear power is increasing worldwide.
"While GE is under contractual obligation to provide, service and retrofit
reactors, we believe GE should (1) negotiate amicable termination that will
better protect the fiscal health of the Company and the long-term environmental
health of the planet; (2) assist customers in shutting down nuclear operations
and installing alternative power sources such as GE's fine combined-cycle
gas-powered generators; and (3) direct the expertise of GE's nuclear engineers
toward the permanent isolation of radioactive waste from the human biosphere. We
believe that other nuclear supplier corporations are looking to GE to lead the
way with a principled decision to phase out nuclear power.
"There is compelling evidence that GE's continued participation in nuclear
power is contrary to the interests of GE shareholders and the public at large.
The requested report will assist shareholders and management in coming to this
reasoned conclusion. We urge your supporting vote for this resolution."
Your Board of Directors recommends a vote AGAINST this proposal.
Nuclear power makes a significant contribution to meeting the world's
demand for electricity. In 2000, approximately 17% of the world's electricity
was generated from commercial nuclear plants. The Nuclear Regulatory Commission
in the United States and similar regulatory bodies in other countries have the
ongoing responsibility to ensure that nuclear facilities operate safely.
The major focus of GE's profitable nuclear business today is to provide
____
35
nuclear fuel and plant support services with the aim of enhancing safe and
efficient utility operations. These products and services should be available to
utility customers throughout the world who need and want them. Your Board
believes it is also appropriate for GE to participate in the development of
advanced designs for nuclear generating plants for sale, under appropriate
conditions and safeguards, to utility customers in areas of the world where a
mix of technologies will be necessary to supply a growing and balanced need for
electrical generating capacity. Therefore, your Board recommends a vote against
this proposal.
. Share Owner Proposal No. 5
Bartlett Naylor, 1255 N. Buchanan, Arlington, VA 22205, has notified GE that he
intends to submit the following proposal at this year's meeting:
"Resolved: The shareholders urge our board of directors to take the
necessary steps to nominate at least two candidates for each open board
position, and that the names, biographical sketches, SEC-required declarations
and photographs of such candidates shall appear in the company's proxy materials
(or other required disclosures) to the same extent that such information is
required by law and is our company's current practice with the single candidates
it now proposes for each position.
"Supporting statement: Although our company's board appreciates the
importance of qualified people overseeing management, we believe that the
process for electing directors can be improved.
"Our company currently nominates for election only one candidate for each
board seat, thus leaving shareholders no practical choice in most director
elections. Shareholders who oppose a candidate have no easy way to do so unless
they are willing to undertake the considerable expense of running an independent
candidate for the board. The only other way to register dissent about a given
candidate is to withhold support for that nominee, but that process rarely
affects the outcome of director elections. The current system thus provides no
readily effective way for shareholders to oppose a candidate that has failed to
attend board meetings; or serves on so many boards as to be unable to supervise
our company management diligently; or who serves as a consultant to the company
that could compromise independence; or poses other problems. As a result, while
directors legally serve as the shareholder agent in overseeing management, the
election of directors at the annual meeting is largely perfunctory. Even
directors of near bankrupt companies enjoy re-election with 90%+ pluralities.
The "real" selection comes through the nominating committee, a process too often
influenced, if not controlled, by the very management the board is expected to
scrutinize critically.
"Our company should offer a rational choice when shareholders elect
directors. Such a process could abate the problem of a chair "choosing" his own
board, that is, selecting those directors he expects will reflexively support
his initiatives, and shedding those who may sometimes dissent. Such a process
could create healthy and more rigorous shareholder evaluation about which
specific nominees are best qualified.
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36
"Would such a process lead to board discontinuity? Perhaps, but only with
shareholder approval. Presumably an incumbent would be defeated only because
shareholders considered the alternative a superior choice. Would such a
procedure discourage some candidates? Surely our board should not be made of
those intolerant of competition. Would such a procedure be "awkward" for
management when it recruits candidates? Hopefully so. (Management could print a
nominee's name advanced by an independent shareholder to limit such
embarrassment.). The point is to remove the "final" decision on who serves as a
board director from the hands of management, and place it firmly in those of
shareholders.
"We urge you to vote FOR this proposal."
Your Board of Directors recommends a vote AGAINST this proposal.
GE believes that its practice of nominating a single candidate for each
director position is consistent with the longstanding and widespread practice of
major companies and is in the best interests of the share owners. Your Board
nominates the individuals whom it believes are best qualified to serve as
directors. Your Board does not believe that nominating additional, less well
qualified candidates would result in a more effective Board. Because your Board
does not believe that the proposed change in the director nomination procedure
is in the best interests of the share owners, it recommends a vote against the
proposal.
. Share Owner Proposal No. 6
Charles E. Collins and Patricia M. Brennan, 35 Hampstead Road, Jamaica Plain, MA
02130 have notified GE that they intend to submit the following proposal at this
year's meeting:
"To enhance shareholder value General Electric shareholders recommend
increased director independence. This proposal recommends a majority of
directors on the full board be independent, for instance, a 60% majority.
The standard of independence is the standard in the Council of
Institutional Investors Bill of Rights: `A director is deemed independent if his
or her only non-trivial professional, familial or financial connection to the
corporation or its CEO is his or her directorship.'
"This proposal should be implemented as quickly as possible. The
independent directors alone would decide whether implementation is proceeding as
quickly as possible. Also, require that any future action on this topic be put
to shareholder vote - as a separate proposal.
"GE has a blatant lack of independent directors. The majority of the board
is made up of current employees; former employees; directors who collect legal
or service fees from GE; and a director who controls a company that has major
business transactions with GE. According to the Investor Responsibility Research
Center (IRRC), 63% of the full Board is not independent. 'At least two-thirds of
a corporation's directors should be independent,' according to the Council of
Institutional Investors. Institutional shareholders own a majority of GE stock.
____
37
"Furthermore: 60% of the Nominating Committee is not independent; 40% of
the Audit Committee is not independent; and 20% of the Compensation Committee is
not independent. `All members of these committees should be independent,'
according to the Council of Institutional Investors. Institutional Shareholder
Services also recommends that these 3 key committees be 100% independent. ISS
said independent directors include only outside independent directors.
Proposals to increase director independence won a substantial 24% overall
vote at 14 major companies in 2000 (Source: Investor Responsibility Research
Center).
"1) The independence of directors is of greater importance at GE since: a
director pension plan arguably compromises the independence of GE directors.
"The company has steadfastly opposed 4 Shareholder Proposals since 1996 to
limit director pensions. Meanwhile director pensions have dropped drastically to
only 8% of the largest 200 U.S. companies. Large companies like GE appear to
increasingly agree with shareholders who object to director pensions. Director
pensions can align directors with management rather than with the interests of
shareholders.
"2) The independence of directors is of greater importance at GE since 3 of
the 6 independent directors, on a board of 16, have long tenure which can impact
their independence: Ms. Michelson, 25 years; Mr. Rhodes, 17 years; and Mr.
Sigler, 17 years.
"What incentive is there for good corporate governance - highlighted by
increased director independence? A new survey by McKinsey & Co., international
management consultant, shows that institutional investors are prepared to pay an
18% premium for good corporate governance. McKinsey warns that companies that
fail to reform will find themselves at a competitive disadvantage in attracting
capital to finance growth. Wall Street Journal, June 19, 2000.
McKinsey & Co. defines independent directors as outside directors that are truly
independent with no management ties.
"To enhance shareholder value, vote YES for: the majority of directors to
be independent. YES on 6."
Your Board of Directors recommends a vote AGAINST this proposal.
Although your Board agrees that it is important for a majority of directors
to be outside directors who are not employees of the Company, it also believes
that the definition of independence set forth in this proposal is too narrow.
GE's size and diversity make it inevitable that many of the most experienced and
most qualified director candidates will have professional or business
relationships that involve the Company in some way. By requiring that a majority
of the Board meet an unduly restrictive definition, the proposal would deprive
the share owners of the services of some of the best-qualified director
candidates. Your Board does not believe it is in the best interests of the share
owners to adopt the definition or limitation set forth in this proposal and
therefore recommends a vote against the proposal.
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38
. Share Owner Proposal No. 7
Jeffrey S. Harwood, 3450 Toledo Terrace #417, Hyattsville, MD 20782, and other
filers have notified GE that they intend to submit the following proposal at
this year's meeting:
"Whereas landmines and cluster bombs are responsible for killing or maiming
thousands of innocent civilians yearly, usually after the cessation of
hostilities, and many of which retain the ability to detonate 50 to 100 years;
"Whereas the United States has refused to place a ban on landmine
production, or to sign the 1997 diplomatic initiative by Canada, Belgium and
Norway aimed at the signing of a comprehensive landmine ban treaty, though three
key NATO allies and 11 other nations have halted production;
"Whereas General Electric was a supplier of integrated circuit components
and other parts for landmines directly or through other business ties from 1989
through 1993 or possibly later, and
"Whereas General Electric is one of the landmine parts supplier
corporations approached by the Human Rights Watch Arms Project that has refused
to renounce future involvement in antipersonnel landmine production;
"Therefore Be It Resolved that the shareholders request GE management to
establish a firm policy to renounce future involvement in antipersonnel
land-mine and cluster bomb production.
"Supporting Statement: Antipersonnel mines and the newer hybrid, cluster
bombs, are indiscriminate, hidden killers and constitute one of the great public
health hazards of the late twentieth century. They frustrate post-war
reconstruction in dozens of countries. Resources which should be used to rebuild
schools and hospitals are instead diverted to landmine clearance, a crushing
financial burden for the world's poorest nations. One tragic irony is that U.S.
peacekeep-ing troops' lives are threatened by landmines manufactured and
exported from the U.S. some years ago. Landmines maim or kill 26,000 people a
year. Most victims are civilians, 30 to 40% are children.
"There has been a freeze on orders for the production of new landmines in
the U.S., yet the Department of Defense maintains a fund earmarked for this
purpose. The U.S. maintains a stockpile of approximately 14 million
antiper-sonnel mines. Until 1992, the U.S. was one of the biggest exporters of
antiper-sonnel mines. There remains a global moratorium on such exports at the
present.
"While it is true that corporations do not institute military or foreign
policy, we shareholders believe that something that violates human rights and
international law so flagrantly as this indiscriminate weapon should not be
manufactured at all. We want General Electric to be among the corporations
taking a moral stand refusing to supply any parts or know-how in landmine and
cluster bomb production. GE would not gain that much from participation in
production of landmine parts for shareholders to notice any financial loss if no
contracts were taken. GE will gain much public good will worldwide with its
renouncement of future involvement.
"We urge your supporting vote for this proposal."
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39
Your Board of Directors recommends a vote AGAINST this proposal.
GE is not involved in landmine or cluster bomb production. GE does not make
these devices, nor sell parts or components for use in the production of these
devices. In 1997, GE advised the Human Rights Watch Arms Project that GE was not
supplying material or components to any manufacturer of land-mines. GE still
does not. Because GE is not involved, and has no intention of becoming involved
in the future, your Board believes adopting an additional policy as requested by
the proposal is unnecessary and, therefore, recommends a vote against the
proposal.
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40
================================================================================
ADDITIONAL INFORMATION
. Share Owner Proposals for Inclusion in Next Year's Proxy Statement
To be considered for inclusion in next year's Proxy Statement, share owner
proposals must be received at GE's principal executive offices no later than the
close of business on November 9, 2001. Proposals should be addressed to Benjamin
W. Heineman, Jr., Secretary, General Electric Company, Fairfield, Connecticut
06431.
. Other Share Owner Proposals for Presentation at Next Year's Annual Meeting
For any proposal that is not submitted for inclusion in next year's Proxy
Statement, but is instead sought to be presented directly at the 2002 Annual
Meeting, SEC rules permit management to vote proxies in its discretion if the
Company: (1) receives notice of the proposal before the close of business on
January 23, 2002, and advises share owners in the 2002 Proxy Statement about the
nature of the matter and how management intends to vote on such matter; or (2)
does not receive notice of the proposal prior to the close of business on
January 23, 2002. Notices of intention to present proposals at the 2002 Annual
Meeting should be addressed to Benjamin W. Heineman, Jr., Secretary, General
Electric Company, Fairfield, Connecticut 06431.
. Voting Securities
Share owners of record at the close of business on March 7, 2001, will be
eligible to vote at the meeting. The voting securities of GE consist of its
$0.06 par value common stock, of which 9,930,487,294 shares were outstanding on
February 9, 2001. Each share outstanding on the record date will be entitled to
one vote. Treasury shares are not voted. Individual votes of share owners are
kept private, except as appropriate to meet legal requirements. Access to
proxies and other individual share owner voting records is limited to the
Independent Inspectors of Election and certain employees of GE and its agents
who must acknowledge in writing their responsibility to comply with this policy
of confidentiality.
. Vote Required for Approval
The 19 nominees for director receiving a plurality of the votes cast at the
meeting in person or by proxy shall be elected. All other matters require for
approval the favorable vote of a majority of shares voted at the meeting in
person or by proxy. Under New York law, abstentions and broker non-votes, if
any, will not be counted as votes cast. Therefore, they will have no effect on
the outcome of the other matters to be voted on at the meeting.
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41
. Manner for Voting Proxies
The shares represented by all valid proxies received by phone, by Internet or by
mail will be voted in the manner specified. Where specific choices are not
indicated, the shares represented by all valid proxies received will be voted:
(1) for the nominees for director named earlier in this Proxy Statement; (2) for
approval of the appointment of Independent Auditors; and (3) against the share
owner proposals described in this Proxy Statement. Shares represented by valid
proxies will also be voted against proposals which the Company has received from
share owners who did not submit them for inclusion in the Proxy Statement, but
have given notice that they may seek to present them at the Annual Meeting. Such
proposals are: a proposal that the Company tell share owners that its responses
to share owner proposals are the Company's position and not a summary of
arguments for and against the proposal; a proposal that the Company advise share
owners if the voting recommendation of institutional investors or proxy analysts
is inconsistent with the Company's recommendation; a proposal relating to the
directors' pension plan; a proposal on whether 15- or 20-year term limits for
directors would increase the overall performance of the board; and a proposal
that NBC avoid negative portrayals of Polish-Americans in its programming.
Should any matter not described above be properly presented at the meeting, the
persons named in the Proxy Form will vote in accordance with their judgment.
Except for share owner proposals omitted from this Proxy Statement, or noted
above, the Board knows of no other matters which may be presented to the
meeting.
. Solicitation of Proxies
Proxies will be solicited on behalf of the Board of Directors by mail,
telephone, other electronic means or in person, and solicitation costs will be
paid by GE. Copies of proxy material and of the Annual Report for 2000 will be
supplied to brokers, dealers, banks and voting trustees, or their nominees, for
the purpose of soliciting proxies from beneficial owners, and GE will reimburse
such record holders for their reasonable expenses. Morrow & Co. has been
retained to assist in soliciting proxies at a fee of $30,000 plus distribution
costs and other costs and expenses.
. Section 16(a) Beneficial Ownership Reporting Compliance
In December 2000, the Company inadvertently did not report that Invemed
Associates, LLC, in which Mr. Langone owns a controlling ownership interest,
purchased 75,000 shares of GE stock.
. Share Owners of Record with Multiple Accounts
Share owners who hold their shares directly with the Company and who previously
have elected not to receive an annual report for a specific account may request
GE to promptly mail GE's 2000 Annual Report to that account by
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42
writing GE Share Owner Services, c/o The Bank of New York, P.O. Box 1102, New
York, NY 10286-1402 or calling (800) 786-2543 (800-STOCK-GE) or (908) 769-9619.
In addition, participants in GE's Savings and Security Program may request
copies of GE's 2000 Annual Report by calling GE's Transaction Processing Center
at (800) 432-4313.
. Electronic Access to Proxy Statement and Annual Report
This Proxy Statement and GE's 2000 Annual Report may be viewed online at
www.ge.com/annual00. If you are a share owner of record, you can elect to
receive future annual reports and proxy statements electronically by marking the
appropriate box on your proxy card or by following the instructions provided if
you vote by Internet or by phone. If you choose this option, you will receive a
proxy form in mid-March listing the Web site locations and your choice will
remain in effect until you notify GE by mail that you wish to resume mail
delivery of these documents. If you hold your GE stock through a bank, broker or
another holder of record, refer to the information provided by that entity for
instructions on how to elect this option.
March 9, 2001
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43
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44
================================================================================
APPENDIX A
AUDIT COMMITTEE CHARTER
The Audit Committee (Committee) shall consist of a minimum of three
directors. As determined by the Board of Directors in accordance with applicable
requirements, all members of the Committee shall be independent directors having
no relationship that may interfere with the exercise of their objective judgment
in discharging the responsibilities set forth below. As also determined by the
Board of Directors, all members of the Committee shall have sufficient financial
experience and ability to enable them to discharge such responsibilities, and at
least one member shall have accounting or related financial management
expertise. The Committee shall have the following responsibilities with respect
to the Company, which term shall include without limitation its subsidiaries
General Electric Capital Services, Inc., and General Electric Capital
Corporation:
1. To recommend to the Board of Directors, for share owner approval,
the independent auditor to examine the Company's accounts, controls and
financial statements. The independent auditor is ultimately accountable to
the Board of Directors and to the Committee, and the Board of Directors and
the Committee have the ultimate authority and responsibility to select,
evaluate and if necessary replace the independent auditor.
2. To review and approve the scope of the examination to be conducted
by the independent auditor. In addition, the Committee shall at least
annually obtain from the independent auditor a formal written statement
delineating all relationships between the independent auditor and the
Company, and shall at least annually discuss with the independent auditor
any relationship or services which may impact the independent auditor's
objectivity or independence, and shall take or recommend that the Board
take appropriate actions to ensure such independence.
3. To review and approve the Corporate Audit Staff functions,
including: (i) purpose, authority and organizational reporting lines; (ii)
annual audit plan, budget and staffing; and (iii) concurrence in the
appointment, removal and compensation of the Vice President - Corporate
Audit Staff.
4. To review results of the examinations of the financial statements
of the Company by the independent auditors, their evaluation of the
Company's internal system of audit and financial controls, and their annual
report on the Company's financial statements.
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45
5. To review, with the Senior Vice President-Finance, the Vice
President - Corporate Audit Staff or such others as the Committee deems
appropriate the Company's internal system of audit and financial controls
and the results of internal audits.
6. To review the Company's financial reporting, the accounting
standards and principles followed by the Company and significant changes in
such standards or principles or in their application.
7. To review and investigate any matters pertaining to the integrity
of management, including conflicts of interest, or adherence to standards
of business conduct as required in the policies of the Company. In
connection therewith, the Committee will meet, as deemed appropriate, with
the General Counsel and other Company officers or employees.
In discharging its responsibilities, the Committee will periodically meet
with the Company's auditors without the presence of any Company officer or
employee.
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46
================================================================================
GE ANNUAL MEETING OF SHARE OWNERS
10:00 a.m., April 25, 2001
Atlanta Civic Center
395 Piedmont Avenue, N.E.
Atlanta, Georgia 30308
--------------------------------------------------------------------------------
ADVANCE REGISTRATION
Advance registration for the GE Annual Meeting will expedite your entry into the
meeting.
Attendance at the Annual Meeting is limited to GE share owners, members of their
immediate family or their named representative. We reserve the right to limit
the number of representatives who may attend the meeting. Share owners may
register at the door on the day of the meeting by showing proof of ownership of
GE shares.
. If you hold your GE shares directly with the Company and you plan to attend
the Annual Meeting, please follow the Advance Registration instructions on
the top portion of your Proxy Form, which was included in the mailing from
the Company.
. If your GE shares are held for you in a brokerage, bank or other
institutional account and you wish to pre-register, please send an Annual
Meeting advance registration request to:
GE Share Owner Services
Bldg 5-6E
1 River Road
Schenectady, NY 12345
Please include the following information:
. Your name and complete mailing address
. The name(s) of any family members who will accompany you
. If you will be naming a representative to attend the meeting on your
behalf, the name of that individual
. Proof that you own GE shares (e.g., a photocopy of a brokerage or
other account statement)
[LOGO] GE Annual Meeting
-----------
VOTE BY INTERNET, TELEPHONE OR MAIL
24 Hours a Day, 7 Days a Week
------------------------------------ ------------------------------------ ------------------------------------
INTERNET TELEPHONE MAIL
proxy.shareholder.com/ge OR 800-574-7051 OR
------------------------------------ ------------------------------------ ------------------------------------
Use the Internet to vote your proxy. Use any touch-tone telephone to vote Mark, sign and date your Proxy Form
Have your Proxy Form in hand when your proxy. Have your Proxy Form in and return it in the postage-paid
you access the website. You will be hand when you call. You will be envelope we have provided.
prompted to enter your control number, prompted to enter your control number,
located in the box below, to create an located in the box below, and then
electronic ballot. follow the simple directions.
------------------------------------------------------------- ---------------------------------------------------------
IMPORTANT VOTING INFORMATION
CONTROL NUMBER
If you vote by the Internet or by Telephone, do Use the Internet or Call Toll-Free to vote:
not return your Proxy Form by mail. proxy.shareholder.com/ge
------------------------------------------------------------- 800-574-7051
. Your Internet or telephone vote authorizes the named
proxies to vote your shares in the same manner as if
you marked, signed and returned your Proxy Form.
. If you wish to receive all future Annual Reports and Proxy
Statements via the internet as they become available, please
consent by marking the appropriate box below. This consent
will remain in effect until you notify GE by mail that you
wish to resume mail delivery of the Annual Report and Proxy
Statement.
GE's Proxy Statement and Annual Report are
available on GE's web site at:
www.ge.com/annual00
---------------------------------------------------------
. DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY INTERNET OR TELEPHONE .
-----------------------------------------------------------------------------------------------------
[LOGO] Proxy Form
-------------------
The Board of Directors recommends a vote "FOR" proposals A and B. The Board of Directors recommends a vote "AGAINST" the share owner
proposals 1 through 7.
FOR AGAINST ABSTAIN
A. Election of Directors 1. Cumulative Voting [_] [_] [_]
FOR WITHHOLD 2. Workplace Code [_] [_] [_]
ALL [_] FOR ALL [_] EXCEPTIONS [_] of Conduct
Exceptions:__________________________________________________ 3. Report on PCB [_] [_] [_]
INSTRUCTIONS: To withhold authority to vote for any individual Cleanup Costs
nominee(s) mark the exception box and write the name(s) on the
space provided above. 4. Nuclear Power [_] [_] [_]
Report
B. KPMG LLP as Independent Auditors
5. Director Election [_] [_] [_]
FOR [_] AGAINST [_] ABSTAIN [_] Process
6. Director [_] [_] [_]
Independence
7. Landmine and Cluster [_] [_] [_]
Bomb Production
----------------------------------------------------
SHARE OWNER SERVICES
--------------------
If you consent to use GE's Internet site to
receive all future annual reports and proxy [_]
statements, please mark this box.
To include any comments please mark [_]
this box and use reverse side.
To change your address please mark [_]
this box and correct at left.
___________________________________________
Signature of Share Owner
___________________________________________
Signature of Share Owner
Date:__________________________________2001
[X] Vote MUST be indicated (x) in Black or Blue ink.
3482
[LOGO] GE Annual Meeting
-----------
Dear Share Owner: Attendance at the GE Annual Meeting is limited to GE
share owners, members of their immediate families or their
You are invited to attend the 2001 GE Annual Meeting to named representatives. We reserve the right to limit the
be held on Wednesday, April 25, 2001, at 10:00 a.m., at the number of guests or representatives who may attend.
Atlanta Civic Center, 395 Piedmont Avenue, N.E., Atlanta,
Georgia. ADVANCE REGISTRATION INFORMATION
Whether or not you plan to attend the meeting, you can be Name ___________________________________________________
sure that your shares are represented at the meeting by promptly
voting your shares by Internet, phone or mail as described on Address ________________________________________________
the other side of this form.
________________________________________________
If you plan to attend the meeting, registering in advance will
expedite your entry. Please follow the instructions below. _________________________________Zip ___________
ADVANCE REGISTRATION INSTRUCTIONS Names of family members who will also attend:
. If you are voting by Internet, you will be able to pre-register ________________________________________________
at the same time you record your vote.
There is no need to return your Proxy Form. ________________________________________________
. If you are voting by phone, please complete the information I am a GE share owner. My Representative at the Annual
at right and tear off the top of this form and mail separately to: Meeting will be:
GE Share Owner Services, Bldg. 5-6E, 1 River Road, Schenectady,
NY 12345. There is no need to return the Proxy Form. ________________________________________________
(Admission card will be returned c/o the share owner)
. If you are voting by mail, please complete the information at
right and include this portion when mailing your marked, signed
and dated Proxy Form in the envelope provided.
[LOGO] Proxy Form
-------------------
Proxy solicited on behalf of the Board of Directors for the Annual Meeting of
Share Owners, April 25, 2001
The share owner(s) whose signature(s) appear(s) on the reverse side of this
Proxy Form hereby appoint(s) John F. Welch, Jr., Gertrude G. Michelson and
Benjamin W. Heineman, Jr., or any of them, each with full power of substitution,
as proxies, to vote all stock in General Electric Company which the share
owner(s) would be entitled to vote on all matters which may properly come before
the 2001 Annual Meeting of Share Owners and any adjournments or postponements
thereof. The proxies shall vote subject to the directions indicated on the
reverse side of this card and proxies are authorized to vote in their discretion
upon other business as may properly come before the meeting and any adjournments
or postponements thereof. The proxies will vote as the Board of Directors
recommends where a choice is not specified.
The nominees for Director are: (01) James I. Cash, Jr.; (02) Silas S. Cathcart;
(03) Dennis D. Dammerman; (04) Paolo Fresco; (05) Ann M. Fudge; (06) Claudio X.
Gonzalez; (07) Jeffrey R. Immelt; (08) Andrea Jung; (09) Kenneth G. Langone;
(10) Rochelle B. Lazarus; (11) Scott G. McNealy; (12) Gertrude G. Michelson;
(13) Sam Nunn; (14) Roger S. Penske; (15) Frank H.T. Rhodes; (16) Andrew C.
Sigler; (17) Douglas A. Warner III; (18) John F. Welch Jr. and (19) Robert C.
Wright.
FOR PARTICIPANTS IN GE'S SAVINGS AND SECURITY PROGRAM (S&SP)
In accordance with the terms of the Savings and Security
Program (S&SP), any shares held in the share owner's S&SP
account on the record date will be voted by the trustees
of the S&SP trust in accordance with the instructions
indicated on the reverse, and in accordance with the
judgement of the trustees upon other business as may INSPECTORS OF ELECTION
properly come before the meeting and any adjournments P.O. BOX 1138
or postponements thereof. IF NO INSTRUCTIONS ARE NEWARK, N.J. 07101-9758
PROVIDED OR IF THIS CARD IS NOT RECEIVED ON OR
BEFORE APRIL 23, 2001, shares held in the share
owner's S&SP account will be voted in accordance
with the recommendations of GE's Board of Directors.