If you envisage to down in the engagement, desire be in come up with oneself decide the be generated registration instructions on the disclaim devotedly pressed of this Proxy Statement. An divulgement greetings card, which desire celerity your divulgement to the engagement, desire be mailed to you last to the engagement. Whether or not you envisage to down in, you can be unshakeable your shares are represented at the engagement sooner than pronto voting and submitting your surrogate sooner than phone, sooner than Internet, or sooner than completing, signing, dating and returning your Proxy Form in the enclosed envelope. Cordially,
John F. Chairman of the Board
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Slide 4: CONTENTS
Notice of 2001 Annual Meeting of Share Owners……………. Welch, Jr. 5 Proxy Statement……………………………..
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I
Election of Directors………………………. 13 Compensation Committee Report………………… 6 Information Relating to Directors, Nominees and Executive Officers…………………….. 17 Summary Compensation Table…………………… 22 Financial Performance Comparison Graphs…………….
26 Retirement Benefits……………………….. 24 Stock Options and Stock Appreciation Rights…………… 28
Independent Auditor Fees…………………….. 29 Audit Committee Report…………………….. 30 Share Owner Proposals relating to: I No. 29 I Appointment of Independent Auditors……………. 1 Cumulative Voting…………………
31 I No. 31 I No. 2 Workplace Code of Conduct…………… 3 Report on PCB Cleanup Costs…………… 33 I No.
34 I No. 4 Nuclear Power Report……………… 5 Director Election Process…………….. 36 I No. 37 I No. 6 Director Independence………………
7 Landmine and Cluster Bomb Production…….. 39 Additional Information……………………… 45
I
To be voted on at the meeting
EVERY SHARE OWNER’S VOTE IS IMPORTANT. 41 Appendix A: Audit Committee Charter……………… PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY FORM, OR SUBMIT YOUR VOTE AND PROXY BY PHONE OR BY INTERNET.
Printed on recycled analysis using soybean ink
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Slide 5: NOTICE OF 2001 ANNUAL MEETING OF SHARE OWNERS
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 desire be held at Atlanta Civic Center, 395 Piedmont Avenue, N.E., Atlanta, Georgia, on Wednesday, April 25, 2001, at 10:00 a.m., to advise all matters that may suitably break apart in effrontery first of the engagement. Share owners of list at the closely discriminating of establishment on March 7, 2001, desire be entitled to ballot at the engagement and any adjournments. Following a give an account of on GE’s establishment operations, the share out owners desire ballot on: (a) Election of Directors conducive to the ensuing year; (b) Approval of the nomination of Independent Auditors conducive to 2001; and (c) Seven share out landowner proposals register forth at pages 30 unqualifiedly 39 in the accompanying Proxy Statement. Benjamin W. Heineman, Jr.
Distribution of this Proxy Statement and a surrogate feather to share out owners is scheduled to distant on or on every side March 9, 2001. Secretary
PROXY STATEMENT
General Electric Company, Fairfield, Connecticut 06431
This Proxy Statement is furnished in hint with the solicitation of proxies sooner than General Electric Company on behalf of the Board of Directors conducive to the 2001 Annual Meeting of Share Owners. You can insure that your shares are voted at the engagement sooner than submitting your instructions sooner than phone, sooner than Internet, or sooner than completing, signing, dating and returning the enclosed Proxy Form in the envelope provided. Submitting your instructions sooner than any of these methods desire not imprint your directly to down in the engagement and ballot. As component of the buying of Honeywell International Inc., the Board desire be expanded and three additional directors admissible to Honeywell and the Company desire be added to the Board.
A share out landowner who gives a surrogate may negate it at any shilly-shally in effrontery first of it is exercised sooner than voting in bodily at the Annual Meeting, sooner than delivering a consequent after surrogate, or sooner than notifying the Inspectors of Election in critique of such revocation.
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Slide 6: ELECTION OF DIRECTORS
At the 2001 Annual Meeting, 19 directors are to be elected to go on about discuss with until the 2002 Annual Meeting and until their successors bear been elected and bear happy. The 19 nominees conducive to designation at the Annual Meeting are listed on pages 6 to 12 with omnibus biographies. They are all from shilly-shally to shilly-shally GE directors.
Immelt joined the Board in November 2000, Rochelle B. Jeffrey R. Lazarus joined the Board in December 2000, and Robert C.
Wright joined in July 2000. Opie, who served as a kingpin since 1995, retired from the Company and the Board at the annihilating of March 2000. John D. The Board knows of no discuss with why any appointee may be not able to a duty as a kingpin.
If any appointee is not able to a duty, the shares represented sooner than all valid proxies desire be voted conducive to the designation of such other bodily as the Board may promote.
James I. Robison Professor of Business Administration, Harvard Graduate School of Business, Boston, Mass. Cash, Jr., 53, James E. Director since 1997.
A graduate of Texas Christian University with MS and PhD degrees from Purdue University, Dr. Cash joined the discipline 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. Cash is also a kingpin of Cambridge Technology Partners, The Chubb Corporation, Knight-Ridder, Inc., State Street Bank and Trust, and WinStar Corporation.
Dr. He also serves as a trustee of the Massachusetts General Hospital and Partners Healthcare and as an straw boss conducive to the Boston Museum of Science.
Silas S. Cathcart, 74, Retired Chairman of the Board and Chief Executive Officer, Illinois Tool Works, Inc., diversified products, Chicago, Ill. Cathcart joined Illinois Tool Works, Inc., a industrialist of tools, fasteners, packaging and other products. Director 1972-1987 and since 1990.
Following his graduation from Princeton in 1948, Mr.
He was named a iniquity president in 1954, managing director iniquity president in 1962, and president and kingpin in 1964; and he served as chairman from 1972 to 1986. From 1987 to 1989, he served as chairman of the directorship of Kidder, Peabody Group Inc. Cathcart is also a trustee of the Buffalo Bill Historical Society.
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Slide 7: Dennis D. Mr.
Dammerman, 55, Vice Chairman of the Board and Executive Officer, General Electric Company, and Chairman, General Electric Capital Services, Inc. Director since 1994.
Mr. He had pecuniary assignments in a sprinkling GE businesses in effrontery first of being named iniquity president and comptroller of General Electric Credit Corporation (now GE Capital Corporation) in 1979. Dammerman joined GE after graduating from the University of Dubuque in 1967.
In 1981, he became iniquity president and customary head of GE Capital’s Commercial Financial Services Department and, later that year, of GE Capital’s Real Estate Financial Services Division. He was elected older iniquity president conducive to funds of GE in 1984, a kingpin of GE in 1994 and, in 1998, was named iniquity chairman of the directorship and managing director constable of GE and chairman and CEO of GE Capital Services, Inc.
Paolo Fresco, 67, Chairman of the Board, Fiat SpA, automotive and industrial products, Turin, Italy. Fresco received a law direction inconsequential by inconsequential from the University of Genoa, and after practicing law in Rome until 1962, he joined General Electric’s Italian subsidiary. Director since 1990.
Mr.
During the ensuing years he held a sprinkling positions with GE. In 1990, he joined the Company’s Board of Directors and in 1992 he became iniquity chairman and managing director constable and colleague of the Corporate Executive Office. Present directorship memberships in into the arrangement to Fiat SpA, pair IFI, Alcatel, Mediobanca and AUME (Association conducive to the European Monetary Union). In 1998, upon retirement from GE, he became Chairman of Fiat SpA. Mr.
Fresco is also a colleague of the European Roundtable, Confindustria (the Confederation of Italian Industry) and Assonime (Association of Italian review companies).
Ann M. Director since 1999.
After graduating from Simmons College in 1973, Ms. Fudge, 49, President, Kraft’s Beverages, Desserts & Post Divisions and Group Vice President, Kraft Foods, Inc., packaged foods, Tarrytown, N.Y.
Fudge worked in hominid resources conducive to 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 managing director iniquity president in 1991. In 2000, she was named Group Vice President of Kraft Foods, Inc. In 1994, she was named president of Kraft General Foods’ Maxwell House Coffee Company. and president of Kraft’s Beverages, Desserts and Post Divisions. Ms.
and the Federal Reserve Bank of New York.
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Slide 8: Claudio X. Fudge is a kingpin of Honeywell International Inc. 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 analysis products. Gonzalez is a graduate of Stanford University. Director since 1993.
Mr. He was employed sooner than Kimberly-Clark in 1956 and sooner than Kimberly-Clark de Mexico, S.A. in 1957.
in 1962 and managing director iniquity president and managing kingpin in 1966. He was elected iniquity president of operations of Kimberly-Clark de Mexico, S.A. He infatuated conducive to granted his contribution place in 1973. Mr. Immelt, 44, President and Chairman-Elect, General Electric Company. Gonzalez is also a kingpin 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.
Jeffrey R. Director since 2000.
Mr.
Immelt joined GE in corporate marketing in 1982 after receiving a direction inconsequential by inconsequential in applied mathematics from Dartmouth College and an MBA from Harvard University. He became a iniquity president of GE in 1989, accountable conducive to consumer buying conducive to GE Appliances. He then held a series of influence positions with GE Plastics in sales, marketing and pandemic down exception. He then became iniquity president of worldwide marketing and down directing conducive to GE Appliances in 1991, iniquity president and customary head of GE Plastics Americas commercial split in 1992, and iniquity president and customary head of GE Plastics Americas in 1993. He became older iniquity president of GE and president and chief managing director constable of GE Medical Systems in 1996.
Immelt became GE’s president and chairman-elect in 2000.
Andrea Jung, 42, President and Chief Executive Officer, Avon Products, Inc., cosmetics, New York, N.Y. Mr. Director since 1998.
Ms. Jung, a graduate of Princeton University, joined Avon Products, Inc., a multinational cosmetics sisterhood, in 1994 as president, down marketing conducive to Avon U.S. Previously, she was managing director iniquity president, Neiman Marcus and a older iniquity president conducive to I. She was elected president, pandemic marketing, in 1996, an managing director iniquity president in 1997, president and a kingpin of the sisterhood in 1998 and chief managing director constable in 1999.
Magnin. Ms. Langone, 65, Chairman, President and Chief Executive Officer, Invemed Associates, LLC, investment banking and brokerage, New York, N.Y. Jung is also a colleague of the Princeton University Board of Trustees and is a kingpin of Catalyst and the Cosmetic, Toiletry and Fragrance Association.
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Slide 9: Kenneth G. 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 also a kingpin of ChoicePoint, Inc., Microtune, Inc., TRICON Global Restaurants, Inc.
He is the framer of Invemed Associates, LLC, and a co-founder, kingpin and colleague of the managing director commission of Home Depot, Inc. and Unifi, Inc., as without difficulty completely as the New York Stock Exchange. In into the arrangement to serving as a kingpin of numerous clement organizations, Mr. Lazarus, 53, Chairman and Chief Executive Officer, Ogilvy & Mather Worldwide, advertising, New York, N.Y. 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.
Rochelle B. Director since 2000.
A graduate of Smith College, Ms. Lazarus holds an MBA from Columbia University.
direct marketing establishment in 1989. She joined Ogilvy & Mather Worldwide, a multinational advertising in force, in 1971, attractive president of its U.S. She then became president of Ogilvy & Mather New York, and president of Ogilvy & Mather North America in effrontery first of attractive president and chief operating constable of the worldwide in force in 1995, chief managing director constable in 1996, and chairman in 1997. Ms. She is chairman of the Board of Trustees of Smith College, and immediate-past president of the American Association of Advertising Agencies.
Scott G. Lazarus also serves as a kingpin of Ann Taylor Stores, New York Presbyterian Hospital, the World Wildlife Fund and TIAA-CREF.
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 direction inconsequential by inconsequential from Harvard University in 1976, Mr. Following Stanford, Mr. McNealy worked in manufacturing conducive to Rockwell International in effrontery first of entering Stanford University, where he obtained an MBA direction inconsequential by inconsequential in 1980. McNealy worked at FMC Corporation and Onyx Systems in effrontery first of co-founding Sun Microsystems, Inc., where he became a kingpin and iniquity president of operations in 1982. Mr. Michelson, 75, Former Senior Vice President – External Affairs and one-time Director, R.
McNealy has been chairman of the Board of Directors and chief managing director constable of Sun Microsystems since 1984.
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Slide 10: Gertrude G. H. Macy & Co., Inc., retailers, New York, N.Y. Michelson received a BA direction inconsequential by inconsequential from Pennsylvania State University in 1945 and an LLB direction inconsequential by inconsequential from Columbia University in 1947, at which shilly-shally she joined Macy’s – New York. Director since 1976.
Mrs. Mrs. Michelson was elected a iniquity president in 1963 and older iniquity president in 1979, and she was named older iniquity president – alien affairs in 1980.
H. She served as older advisor to R. Macy & Co., Inc. from 1992 to 1994.
Director since 1997.
After attending Georgia Institute of Technology and serving in the U.S. She is chairman emeritus of the Board of Trustees of Columbia University and last president of the Board of Overseers, TIAA-CREF.
Sam Nunn, 62, Partner, King & Spalding, law resolved, Atlanta, Ga. Coast Guard, Mr. Nunn received an AB direction inconsequential by inconsequential from Emory University in 1960 and an LLB direction inconsequential by inconsequential from Emory Law School in 1962. Mr. He then practiced law and served in the Georgia House of Representatives in effrontery first of being elected to the United States Senate in 1972, where he served as the chairman and ranking colleague on both the Senate Armed Services Committee and the Senate Permanent Subcommittee on Investigations in effrontery first of unsociable in 1997.
Nunn is also a kingpin 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. Nunn is also co-chairman and chief managing director constable of the Nuclear Threat Initiative, a Washington-based assembly working to lower the pandemic commination of weapons of Roe extinction.
Roger S. Mr.
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. He became chairman of the directorship of Penske Truck Leasing Corporation in 1982 and chairman of the directorship of United Auto Group, Inc. Penske founded Penske Corporation in 1969. in 1999. Mr.
He serves as a trustee of the Henry Ford Museum and Greenfield Village, is a kingpin of Detroit Renaissance and is a colleague of The Business Council.
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Slide 11: Frank H. Penske is also iniquity chairman and a kingpin of International Speedway Corporation and a kingpin of Delphi Automotive Systems Corporation. T. Rhodes, 74, President Emeritus, Cornell University, Ithaca, N.Y.
citizen, Dr. Director since 1984.
An English-born naturalized U.S. Rhodes holds bachelor of consider, doctor of equanimity and doctor of consider degrees from the University of Birmingham (U.K.).
He served as president of Cornell University from 1977 to 1995. Rhodes earlier served beneath presidential appointments as a colleague of the National Science Board, of which he is a one-time chairman, and as a colleague of the President’s Education Policy Advisory Committee. Dr. He is currently president of the American Philosophical Society.
Andrew C. Sigler, 69, Retired Chairman of the Board and Chief Executive Officer, Champion International Corporation, analysis and forest products, Stamford, Conn. Sigler joined Champion Papers Inc., a antecedent of Champion International, in 1956. Director since 1984.
A graduate of Dartmouth College with an MBA direction inconsequential by inconsequential from its Amos Tuck School of Business Administration, Mr.
He served as chief managing director constable of Champion International from 1974 until his retirement in 1996, and as chairman of its directorship of directors from 1979 until his retirement.
Douglas A. Warner III, 54, Chairman of the Board, J.P. New York, N.Y.
Morgan Chase & Co., The Chase Manhattan Bank, and Morgan Guaranty Trust Company of New York. Director since 1992.
Following graduation from Yale University in 1968, Mr. Warner joined Morgan Guaranty Trust Company of New York, a thoroughly owned subsidiary of J.P. (formerly J.P. Morgan Chase & Co. Morgan & Co. Incorporated).
Morgan Chase & Co., The Chase Manhattan Bank, and Morgan Guaranty Trust Company. He was elected president and a kingpin of the bank and its form up in 1990, serving as chairman and chief managing director constable from 1995 to December 31, 2000, when he became chairman of the directorship of J.P. Mr. Warner is also a kingpin of Anheuser-Busch Companies, Inc., chairman of the Board of Managers and the Board of Overseers of Memorial Sloan-Kettering Cancer Center, a colleague of The Business Council and a trustee of the Pierpont Morgan Library.
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Slide 12: John F. Director since 1980.
A 1957 graduate of the University of Massachusetts with MS and PhD degrees from the University of Illinois, Mr. Welch, Jr., 65, Chairman of the Board and Chief Executive Officer, General Electric Company. Welch joined GE in 1960.
Following managerial assignments in the plastics and the chemical and metallurgical businesses, he was elected a iniquity president in 1972. He became a older iniquity president and sector managing director of the Consumer Products and Services Sector in 1977 and was elected a iniquity chairman and named an managing director constable in 1979. In 1973, he was named iniquity president and charge managing director of the Components and Materials Group. Mr. Welch was elected chairman and named chief managing director constable in 1981. Wright, 57, Vice Chairman of the Board and Executive Officer, General Electric Company, and President and Chief Executive Officer of National Broadcasting Company, Inc. He also serves as a kingpin of Fiat SpA and NBC Internet, Inc.
Robert C.
Director since 2000.
Mr. Wright graduated from the College of the Holy Cross and the University of Virginia School of Law. He rejoined GE in 1973 as a advocate conducive to GE Plastics, later on serving in a sprinkling directing influence positions with that establishment. He joined GE in 1969 as a workforce advocate, leaving in 1970 conducive to a acute clerkship. In 1980, he became president of Cox Cable Communications, and rejoined GE in 1983 as iniquity president of the Housewares and Audio businesses. In 1984, he became president and chief managing director constable of General Electric Financial Services, and in 1986 was elected to his widespread place of president and chief managing director constable of National Broadcasting Company, Inc.
This catalogue indicates the alignment of the named individuals’ pecuniary interests with the interests of the Company’s share out owners because the value of their amount GE holdings desire extension or slacken in words with the valuation of GE’s review.
Common Stock and Total Stock-Based Holdings
Name Stock 1 Total 2 85,594 796,342 4,309,281 2,570,772 38,385 227,199 2,596,468 3,011,596 62,908 340,756 Name Rochelle B. In 2000, he was also elected iniquity chairman of the Board and managing director constable of GE.
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Slide 13: INFORMATION RELATING TO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following catalogue includes all GE stock-based holdings, as of February 9, 2001, of the Company’s directors and five most hugely compensated managing director officers. Lazarus Scott G. McNealy Gertrude G.
Penske Frank H. Michelson Sam Nunn Roger S. T. Rhodes Andrew C. Warner III John F. Sigler Douglas A.
Welch, Jr. Robert C. Cash, Jr. Wright Stock 1 2,200 15,000 108,754 4 48,000 105,000 138,377 88,954 146,554 5 9,630,169 6 2,120,710 Total 2 20,200 48,094 331,000 103,958 157,535 251,592 133,954 191,554 22,371,064 5,228,331
James I. 40,954 Silas S.
Cathcart 751,342 3 Dennis D. Fudge 6,885 Claudio X. Dammerman 1,009,965 Paolo Fresco 2,524,393 Ann M.
Gonzalez 131,770 Benjamin W. Heineman, Jr. Immelt 724,238 Andrea Jung 20,915 Kenneth G. 1,374,135 Jeffrey R. Langone 304,639
Common review holdings of all directors and managing director officers as a charge were 20,235,125 7
Notes: 1 This column lists voting securities, including restricted review held sooner than managing director officers ended which the officers bear voting power but no investment power.
Otherwise, each kingpin or constable has particular voting and investment power ended the shares reported, except as celebrated. Cash, 105,000 shares conducive to Mr. This column includes 27,000 shares conducive to Dr. Cathcart, 2,398,500 shares conducive to Mr. Fresco, 4,500 shares conducive to Ms.
Gonzalez and Warner, 13,500 shares conducive to Ms. Fudge, 117,000 shares conducive to Messrs. Jung, 4,500 shares conducive to Mr. Langone and Mr. Michelson, 45,000 shares conducive to Mr. McNealy, 99,000 shares conducive to Mrs.
Nunn, 49,500 shares conducive to Mr. Penske, 135,000 shares conducive to Dr. Sigler that may be acquired sooner than them pursuant to review options that are or desire find to exercisable within 60 days. Rhodes, and 63,000 shares conducive to Mr.
It also includes 709,999 shares conducive to Mr. Dammerman, 937,500 shares conducive to Mr. Immelt, 6,675,000 shares conducive to Mr. Heineman, 579,000 shares conducive to Mr. Welch and 1,335,000 shares conducive to Mr. Wright that may be acquired sooner than them pursuant to review options that are or desire be exercisable within 60 days.
2 This column shows the individual’s amount GE stock-based holdings, including the voting securities shown in the “Stock” column (as described in note 1), bonus non-voting interests, including, as commandeer, the individual’s holdings of review be generated rights, restricted review units, deferred compensation accounted conducive to as units of GE review, and review options that desire not find to exercisable within 60 days. No kingpin or managing director constable owns more than onetenth of joined percent of the amount overdone shares, nor do all directors and managing director officers as a charge own more than joined percent of the amount overdone shares. 3 Includes 32,640 shares ended which Mr. Cathcart has shared voting and investment power. Michelson shares voting and investment power. 4 Includes 7,800 shares ended which Mrs.
5 Includes 3,600 shares ended which Mr. Warner has shared voting and investment power but as to which he disclaims any other personal incline. Welch has shared voting and investment power but as to which he disclaims any other personal incline. 6 Includes 429,600 shares ended which Mr. 7 Includes 3,031,926 shares ended which there are shared voting and investment powers.
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Slide 14: П Board of Directors and Committees
The Board of Directors held ten meetings during 2000.
The comme Зa serving sooner than directors at Board meetings, and Committee meetings they were scheduled to down in, was ended 90%. Members of the Nominating Committee are Directors Sigler (Chairman), Cathcart, Jung, Michelson, Penske and Warner. Among the committees of the Board of Directors are a Nominating Committee, a Management Development and Compensation Committee, and an Audit Committee. This committee’s responsibilities pair the pick of passive candidates conducive to kingpin and the bear out of candidates to the Board.
It also makes recommendations to the Board provisional on the order and membership of the other Board Committees. This commission desire ended share out landowner recommendations conducive to kingpin sent to the Nominating Committee, c/o Benjamin W. The Nominating Committee held three meetings during 2000. 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.
It also serves as the commission administering the GE 1990 Long-Term Incentive Plan and the Incentive Compensation Plan. This commission has two best responsibilities: (1) to guard the Company’s directing resources, order, birthright planning, exception and pick function as without difficulty completely as the discharge of mettle executives; and (2) to parade and approve managing director compensation and changes. This commission met eleven times during 2000. Members of the Audit Committee are Directors Michelson (Chairman), Cathcart, Fudge, Gonzalez, Penske, Rhodes, Sigler and Warner. Its duties pair: (1) recommending the pick of endless auditors; (2) reviewing the shilly-shally of the audit to be conducted sooner than them, as without difficulty completely as the results of their audit; (3) reviewing the assembly and shilly-shally of GE’s internal method of audit and pecuniary controls; (4) appraising GE’s pecuniary reporting activities (including its Proxy Statement and Annual Report) and the accounting standards and principles followed; and (5) examining other reviews relating to compliance sooner than employees with hefty GE policies and apposite laws. This commission is first and foremost agitated with the effectiveness of the audits of GE sooner than its internal audit workforce and sooner than the endless auditors. There were five meetings of the Audit Committee during 2000.
Non-employee directors are paid an annual retainer of $75,000 bonus a earnings of $2,000 conducive to each Board engagement and conducive to each Board Committee engagement attended. A kingpin may fill up an irreversible designation each year to comply with all or a deal out of annual retainer and fees. Half of any deal out of the annual retainer that a kingpin has not elected to comply with is paid in GE stereotypical review. At the director’s pick, his or her account is credited with units accounted conducive to as GE stereotypical review or the dollar amount of the deferral.
Accounts are also credited with stereotypical review dividend equivalents or incline equivalents based on the concede for
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Slide 15: long-term U.S. Participants desire pocket payments from their account in wampum or GE review, in either a one’s name to amount or annual installments, after discontinuation of Board buying. administration bonds. Non-employee directors are also paid a treks recompense conducive to serving at Board meetings.
Last year, the Board of Directors replaced the non-employee directors retirement program with a contingent review portion contribution conducive to directors who adjoin the Board after the 2001 Annual Meeting. All non-employee directors who are initially elected to the Board after the 2001 Annual Meeting desire pocket a one-time contingent contribution of 5,000 GE review units, to be accounted conducive to as GE stereotypical review including dividends, outstanding at worst if the kingpin retires from the Board at duration 65 or older and after at least five years of buying on the Board. All non-employee directors elected to the Board at the 2001 Annual Meeting, who be given the gold mind unswervingly from the Board at duration 65 or older after at least five years of buying, desire one’s addresses to to be appropriate to choice to pocket: (1) an annual retirement advantage conducive to the lives of the kingpin and appropriate surviving spouse in the amount of the retainer earnings in discuss with at retirement; or (2) in lieu thereof, a grub scrutiny advantage in the amount of $450,000. GE also provides each nonemployee kingpin with charge grub and chance humiliation scrutiny in the aggregate amount of $150,000. To succour in the developing of its recently-introduced Bellataire™ diamonds, the Company also permits directors to cosy such diamonds at the Company’s incremental expense, conducive to the close buying of the kingpin or his or her spouse.
The following directors purchased such items beneath the program at the prices indicated: Mr. Any kingpin obtaining a diamond would be alone accountable conducive to paying reciprocation scot based upon the unlikeness between the diamond’s incremental expense and peaches make available value. Cathcart ($25,565), Dr. Cash ($90,887), Mr. Fresco ($173,258), Ms.
Dammerman ($106,824), Mr. Fudge ($92,190), Mr. Langone ($409,980) and Mr. The non-employee directors are not appropriate to participate in GE’s Incentive Compensation Plan, wage-earner review pick plans or in any superannuate plans of GE or its subsidiaries.
McNealy ($76,891). It is the Board’s approach that directors should not one’s name to conducive to re-election after their 73rd birthday. The Board has pro tem waived that approach to permit increased influence continuity conducive to the Company during the CEO transformation function, and at Mr. Cathcart, Mrs.
Welch’s importune, Mr. Michelson and Dr. Rhodes bear agreed to a duty joined additional stretch to succour in that transformation.
Zurich Insurance Company and Executive Risk Speciality Insurance Company are the ranking underwriters of the widespread coverage, which extends until June 11, 2002. GE has provided hitch scrutiny conducive to its directors and officers since 1968. The annual expense of this coverage is about $5.8 million. As component of the Company’s all-embracing bear out conducive to clement institutions, and in systemization to conserve its passive discipline to full peter out directors with overdone contact and passive discipline, the Company maintains a envisage which permits each kingpin to promote up to five clement organizations that would share out in a $1 million contribution to be made sooner than the Company upon the director’s retirement or humiliation. The all-embracing program desire not down in a documents expense to the Company. The directors desire not pocket any pecuniary advantage from this program
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Slide 16: since the clement deductions accrue solely to the Company. To kick upstairs align the non-employee directors’ interests with the long-term interests of the share out owners, the share out owners approved the 1996 Stock Option Plan conducive to Non-Employee Directors, which automatically provides annual grants of options from 1997 unqualifiedly 2003 (with each distribute attractive exercisable in four brother annual installments) to each non-employee kingpin who is serving on the Board at the shilly-shally of such distribute.
Each annual distribute permits the holder to buying from GE up to 18,000 shares of GE’s stereotypical review at the peaches make available value of such shares on the shilly-shally the pick was granted. The options die ten years after the shilly-shally they were granted or at such earlier shilly-shally as may be provided sooner than the Plan provisions upon retirement, defect, humiliation or other discontinuation of buying. Under the terms of the Plan, grants were made on January 31, 2000, at an utilization valuation of $44.50 per share out, and on January 31, 2001, at an utilization valuation of $46.00 per share out, and annual grants desire be made on the endure era of trading of GE review in each January hereafter unqualifiedly the year 2003. The Plan is administered sooner than a commission of wage-earner directors, no joined of whom is appropriate to pocket awards beneath the Plan.
The directors who were serving on the directorship in 1991 and unfailing officers are defendants in a courtly agitate purportedly brought on behalf of the Company as a share out landowner procured administer (the McNeil action) in New York State Supreme Court, New York County, in 1991. The agitate alleges split of fiduciary excise sooner than the directors and seeks unspecified piacular damages and other liberation. The agitate alleges the Company was negligent and pledged in cheater in hint with the cable and construction of containment systems conducive to atomic power plants and contends that, as a down, GE has incurred momentous pecuniary liabilities and is potentially exposed to additional liabilities from claims brought sooner than the Company’s customers. The Company and the defendants accept these claims are without advantage and are defending the agitate.
П Certain Transactions
Mr. Penske has an ancillary pecuniary incline in Penske Truck Leasing Co., L.P., a fixed partnership formed in 1988 between a subsidiary of Penske Corporation and a subsidiary of GE Capital Corporation (GE Capital) in systemization to act a commodities leasing and rental establishment. GE Capital has also extended buying and working in perfect accord loans and guarantees to the partnership, which totaled on every side $3.6 billion at the annihilating of 2000, all on terms basically equal to those extended to correspond to affiliates and common ventures. In hint with a 1996 restructuring that increased GE Capital’s incline in the partnership from 50% to 79%, the Penske Corporation subsidiary desire pocket annual payments, declining from $11.3 million to $9.3 million ended a ten-year era, with the the greater component of such payments contingent upon the partnership achieving unfailing takings thresholds.
Mr. Penske also has a advise pecuniary incline in and controls Penske Capital Partners, LLC, which in 1997 entered into an investment agree16
Slide 17: ment with GE Capital’s Equity Capital Group and other investors. GE Capital also agreed that, after it recovered its investments and received a preferred reciprocation on any such investments, Penske Capital Partners would then pocket a 20% incline in the surviving profits from the GE Capital investments. The come down with permitted GE Capital to induct up to $100 million of even-handedness in transactions involving selected transportation-related companies in reciprocation conducive to its come down with to pay out Penske Capital Partners an annual earnings of up to $1.5 million conducive to evaluating and, as commandeer, managing such investments.
GE has, conducive to a pair of years, hardened the services of the law resolved of King & Spalding, in which Mr. Nunn is a companion, conducive to a disparity of matters. Morgan Chase & Co., of which Mr. Also, GE and its subsidiaries bear obtained investment banking and other pecuniary services from J.P. Warner is Chairman of the Board, and from unfailing of its subsidiaries and predecessors. Similarly, GE has obtained brokerage services and GE and its subsidiaries bear participated in investments with Invemed Associates, LLC, of which Mr.
For a sprinkling years, GE and its subsidiaries bear purchased computer equipage and common services from Sun Microsystems, Inc. Langone is Chairman, President and Chief Executive Officer and in which he holds a controlling ownership incline. In 2000, GE Capital’s Information Technology Solutions establishment, a Sun distributor and value-added reseller, purchased ended $2.9 billion of Sun products and services conducive to resale. GE Capital also has a five-year pandemic vendor financing come down with with Sun beneath which GE Capital offers to give credit and hire away from financing to Sun’s customers. McNealy is Chairman of the Board and Chief Executive Officer of Sun.
Mr. GE and its subsidiaries also bear buying, hire away from, funds, scrutiny and other transactions and relationships in the customary send someone away of establishment with companies and organizations with which GE directors are associated, but which are not sufficiently momentous to be reportable. Management believes that all of these transactions and relationships during 2000 were on terms that were economical and competitive.