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1
General Electric Company
3135 Easton Turnpike, Fairfield, CT 06431
March 7, 1995
Dear Share Owner,
You are invited to attend the 1995 Annual Meeting to be held on
Wednesday, April 26, in Louisville, Kentucky.
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 on other
business matters properly brought before the meeting.
If you plan to attend the meeting, please complete and return the
advance registration form on the back page of this Proxy Statement. An
admission card, which will expedite your admission to the meeting, will be
mailed to you about three weeks prior to the meeting.
Whether or not you plan to attend, you can be sure your shares are
represented at the meeting by promptly completing, signing, dating and
returning your proxy form in the enclosed envelope.
Cordially,
John F. Welch, Jr.
Chairman of the Board
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CONTENTS
Notice of 1995 Annual Meeting of Share Owners 3
Proxy Statement 4
* Election of Directors 4
Information Relating to Directors, Nominees
and Executive Officers 10
Report of the Compensation Committee
of the Board of Directors 15
Summary Compensation Table 20
Financial Performance Comparison Graphs 22
Stock Appreciation Rights and Stock Options 24
Contingent Long-Term Financial Performance
Incentive Awards in 1994 26
Retirement Benefits 27
* Appointment of Independent Auditors 28
* Share Owner Proposals relating to:
No. 1 Prior Government Service 28
No. 2 GE's Nuclear Power Business 29
No. 3 Radioactive Waste and Decommissioning 31
No. 4 NBC Programming 32
No. 5 Maquiladoras 33
No. 6 Community Reinvestment at GE Capital 35
Other Matters 37
* To be voted on at the meeting
EVERY SHARE OWNER'S VOTE IS IMPORTANT
PLEASE COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY FORM
Printed on recycled paper using soybean ink
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3
NOTICE OF 1995 ANNUAL MEETING
OF SHARE OWNERS
10:00 a.m., EDT, April 26, 1995
South Wing Conference Center
Kentucky Fair & Exposition Center
937 Phillips Lane
Louisville, Kentucky 40209
March 7, 1995
To the Share Owners:
General Electric Company's 1995 Annual Meeting of Share Owners will be held
in the South Wing Conference Center, Kentucky Fair & Exposition Center, 937
Phillips Lane, Louisville, Kentucky, on Wednesday, April 26, 1995, at 10:00
a.m., EDT. Following a report on GE's business operations, the share owners
will act on the matters listed below:
(a) Election of Directors for the ensuing year;
(b) Approval of the appointment of Independent
Auditors for 1995;
(c) Consideration of the share owner proposals described in the
accompanying Proxy Statement; and
(d) Consideration of any other matters which may
properly come before the meeting.
Share owners of record at the close of business on March 7, 1995, will be
entitled to vote at the meeting and any adjournments.
Benjamin W. Heineman, Jr.
Secretary
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4
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 1995 Annual Meeting of Share Owners. This Proxy Statement and a proxy
form are scheduled to be mailed to share owners beginning on March 7, 1995.
You can ensure that your shares are voted at the meeting by
completing, signing, dating and returning the enclosed proxy form in the
envelope provided. Sending in a signed proxy 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 submitting another proxy bearing a later date or by notifying
the Inspectors of Election in writing of such revocation.
ELECTION OF DIRECTORS
At the 1995 Annual Meeting, 15 directors are to be elected to hold office
until the 1996 Annual Meeting and until their successors have been elected
and have qualified. The nominees, listed on pages five to nine with brief
biographies, are all now GE directors. The elections of Mr. Roger S. Penske
and Mr. Dennis D. Dammerman were effective on October 31, 1994, and
December 16, 1994, respectively. Under the Board's retirement policy, Mr.
Henry H. Henley, Jr., who has served as a director since 1972, and General
David C. Jones, who has served as a director since 1986, will not be
standing for re-election. 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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H. BREWSTER ATWATER, JR., 63, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
OFFICER AND DIRECTOR, GENERAL MILLS, INC., CONSUMER FOODS AND RESTAURANTS,
MINNEAPOLIS, MINN. DIRECTOR SINCE 1989.
A graduate of Princeton University and Stanford University Graduate School
of Business, Mr. Atwater joined General Mills in 1958 and served in a
variety of sales and marketing positions. He was elected executive vice
president in 1970, chief operating officer in 1976, chief executive officer
in 1981 and chairman in 1982. Mr. Atwater is a director of Merck & Co.,
Inc.; a member of the Business Roundtable and the Business Council; a
member of the International Council, J. P. Morgan & Co. Incorporated; and a
director of Public Radio International, the Walker Art Center and the Mayo
Foundation.
D. WAYNE CALLOWAY, 59, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND
DIRECTOR, PEPSICO, INC., BEVERAGES, SNACK FOODS AND RESTAURANTS, PURCHASE,
N.Y. DIRECTOR SINCE 1991.
A graduate of Wake Forest University, Mr. Calloway joined PepsiCo in 1967,
became president and chief operating officer of Frito-Lay, Inc. in 1976 and
chairman of the board and chief executive officer of Frito-Lay in 1978. Mr.
Calloway became executive vice president, chief financial officer and
director of PepsiCo in 1983, president and chief operating officer in 1985
and chairman and chief executive officer in 1986. He is a director of
Citicorp and Exxon, chairman of Grocery Manufacturers of America, and a
member of the Business Council and the Business Council of New York State.
SILAS S. CATHCART, 68, DIRECTOR AND RETIRED CHAIRMAN OF THE BOARD, 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, president and director in 1964, and 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 a director of Baxter
International, Inc., Montgomery Ward & Co., Inc. and Quaker Oats Company.
He is also on the board of the Chicago Botanic Garden and is a trustee of
the Buffalo Bill Historical Society.
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DENNIS D. DAMMERMAN, 49, SENIOR VICE PRESIDENT, FINANCE, AND CHIEF
FINANCIAL OFFICER, GENERAL ELECTRIC COMPANY. 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 General Electric 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. In 1984, he was elected senior vice president for
finance and became an executive officer of GE.
LAWRENCE E. FOURAKER, 71, FORMER DEAN, HARVARD BUSINESS SCHOOL, CAMBRIDGE,
MASS. DIRECTOR SINCE 1981.
The holder of a PhD degree from the University of Colorado, Dr. Fouraker
joined the faculty of Harvard Business School in 1961, where he has taught
business and government relations, headed the international business area,
was director of the division of research, and served as dean of faculty
from 1970 to 1980. Dr. Fouraker is a director of Alcan Aluminum Ltd.,
Ionics Corp. and the New England Investment Company.
PAOLO FRESCO, 61, VICE CHAIRMAN OF THE BOARD AND EXECUTIVE OFFICER, GENERAL
ELECTRIC COMPANY. DIRECTOR SINCE 1990.
Mr. Fresco received a law degree from the University of Genoa. After
practicing law in Rome, he joined GE's Italian subsidiary, Compagnia
Generale di Elettricita (COGENEL), in 1962 as corporate counsel, becoming
president and general manager of that company in 1972. In 1976, he joined
GE's International Group and was elected a vice president in 1977. Mr.
Fresco became vice president and general manager - Europe and Africa
Operations in 1979, and in 1985 was named vice president and general
manager - International Operations. In 1987, he was elected senior vice
president - GE International. He became a member of the Board in 1990, and
was elected vice chairman of the Board and executive officer in 1992.
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CLAUDIO X. GONZALEZ, 60, CHAIRMAN OF THE BOARD AND MANAGING DIRECTOR,
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 a director of Kellogg
Company, IBM Latin America, The Mexico Fund, Inc., Banco Nacional de
Mexico, Grupo Industrial ALFA, Grupo Industrial Saltillo, Grupo Carso,
Synkro and Telefonos de Mexico.
ROBERT E. MERCER, 70, RETIRED CHAIRMAN OF THE BOARD AND FORMER DIRECTOR,
THE GOODYEAR TIRE & RUBBER COMPANY, AKRON, OHIO. DIRECTOR SINCE 1984.
A graduate of Yale University, Mr. Mercer joined Goodyear in 1947. He
became president of the Kelly-Springfield Tire Company subsidiary in 1974
and was elected an executive vice president of Goodyear in 1976. Mr. Mercer
was elected president of Goodyear in 1978, president and chief operating
officer in 1981, vice chairman and chief executive officer in 1982, and
served as chairman and chief executive officer from 1983 to 1989. He is
also a director of Roadway Services, Inc.
GERTRUDE G. MICHELSON, 69, 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, senior vice president in 1979, and 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 also a director of The Chubb Corporation,
Federated Department Stores, The Goodyear Tire & Rubber Company, Quaker
Oats Company and Stanley Works. Mrs. Michelson is chairman emeritus of the
Board of Trustees of Columbia University and a governor of the American
Stock Exchange.
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ROGER S. PENSKE, 58, CHAIRMAN OF THE BOARD, PRESIDENT AND DIRECTOR, PENSKE
CORPORATION AND DETROIT DIESEL CORPORATION, TRANSPORTATION AND AUTOMOTIVE
SERVICES, DETROIT, MICH. DIRECTOR SINCE 1994.
A 1959 graduate of Lehigh (Pa.) University, Mr. Penske became president of
Penske Corporation in 1969. He became chief executive officer of Detroit
Diesel Corporation in 1988. Mr. Penske is also a director of American
Express Company and Philip Morris Companies Inc. He serves as a trustee of
the Henry Ford Museum and Greenfield Village and as a director of Detroit
Renaissance.
BARBARA SCOTT PREISKEL, 70, FORMER SENIOR VICE PRESIDENT, MOTION PICTURE
ASSOCIATIONS OF AMERICA, NEW YORK, N.Y. DIRECTOR SINCE 1982.
Mrs. Preiskel graduated from Wellesley College and Yale Law School. She
joined the Motion Picture Associations of America in 1959 as deputy
attorney and served as senior vice president and general counsel from 1977
to 1983. Mrs. Preiskel is a trustee of Wellesley College and Tougaloo
College, and is the chairman of the New York Community Trust. She is a
director of American Stores Company, Massachusetts Mutual Life Insurance
Company, Textron Inc. and the Washington Post Company.
FRANK H. T. RHODES, 68, PRESIDENT, 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 was elected president of Cornell
University in 1977. Dr. Rhodes is a director of Tompkins County Trust
Company. He is a trustee of the Mellon Foundation and the Committee for
Economic Development. He was appointed by President Reagan as a member of
the National Science Board and by President Bush as a member of the
President's Education Policy Advisory Committee.
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ANDREW C. SIGLER, 63, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND
DIRECTOR, 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 became executive vice
president of Champion International in 1972, a director in 1973, president
and chief executive officer in 1974, and chairman in 1979. Mr. Sigler is
also a director of AlliedSignal, Inc., Bristol-Myers Squibb Company and
Chemical Banking Corporation and is a member of the Board of Trustees of
Dartmouth College. He is a member of the Business Roundtable and the
Business Council and is active in various civic organizations.
DOUGLAS A. WARNER III, 48, CHAIRMAN OF THE BOARD, PRESIDENT, CHIEF
EXECUTIVE OFFICER AND DIRECTOR, J.P. MORGAN & CO. INCORPORATED AND MORGAN
GUARANTY TRUST COMPANY, NEW YORK, N.Y. DIRECTOR SINCE 1992.
Following graduation from Yale University in 1968, Mr. Warner joined Morgan
Guaranty Trust Company, a wholly owned subsidiary of J.P. Morgan & Co.
Incorporated. He was named a senior vice president of the bank in 1985,
executive vice president in 1987, executive vice president of the parent in
1989, and managing director of the bank and its parent in 1989. He was
elected president and director of the bank and its parent in 1990 and
became chairman and chief executive officer in 1995. Mr. Warner is also a
director of Anheuser-Busch Companies, Inc., a member of the Board of
Overseers of the Memorial Sloan-Kettering Cancer Center, a trustee of Cold
Spring Harbor Laboratory and a trustee of the Pierpont Morgan Library.
JOHN F. WELCH, JR., 59, 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 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.
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INFORMATION RELATING TO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table includes all GE stock-based holdings, as of January 31,
1995, 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 holdings will increase or decrease in line
with the price of GE's stock.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
COMMON STOCK AND TOTAL STOCK-BASED HOLDINGS
- ----------------------------------------------------------------------------------------------------------------
Name Stock <F1> Total<F2> Name Stock<F1> Total<F2>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <S> <C> <C>
H. Brewster Atwater, Jr. 15,500 34,776 David C. Jones 18,500<F7> 44,469
D. Wayne Calloway 6,500 14,000 Robert E. Mercer 15,500 23,000
Silas S. Cathcart 119,398 <F3> 126,898 Gertrude G. Michelson 15,100 49,247
Dennis D. Dammerman 49,154 <F4> 536,050 Roger S. Penske 4,000 7,000
Frank P. Doyle 790 <F5> 450,928 Barbara Scott Preiskel 19,000<F8> 27,696
Lawrence E. Fouraker 12,550 <F6> 34,603 Frank H. T. Rhodes 13,900 24,854
Paolo Fresco 81,255 885,508 Andrew C. Sigler 17,500 25,000
Claudio X. Gonzalez 4,650 14,170 Douglas A. Warner III 6,850<F9> 13,600
Benjamin W. Heineman, Jr. 73,500 526,983 John F. Welch, Jr. 413,712<F10> 2,763,388
Henry H. Henley, Jr. 15,100 84,891
- ----------------------------------------------------------------------------------------------------------------
Common stock holdings of all directors and executive officers as a group were 1,397,536 <F11>
- ----------------------------------------------------------------------------------------------------------------
<FN>
NOTES:
<F1> 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
also includes 4,500 shares for Mr. Calloway, 7,500 shares for Mr. Cathcart,
5,250 shares for Dr. Fouraker, 2,250 shares for Messrs. Gonzalez and
Warner, and 13,500 shares for each other director, except Messrs.
Dammerman, Fresco, Penske and Welch, which may be acquired by such director
pursuant to stock options that are or will become 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.
<F2> This column shows the individual's total stock-based holdings,
including the voting securities shown in the "Stock" column (as described
in footnote 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.
<F3> Includes 5,440 shares over which Mr. Cathcart has shared voting
and investment power.
<F4> Includes 2,164 shares over which Mr. Dammerman has shared
voting and investment power but as to which he disclaims any other
beneficial interest.
<F5> Includes 790 shares over which Mr. Doyle has shared voting and
investment power but as to which he disclaims any other beneficial
interest.
<F6> Includes 2,600 shares over which Dr. Fouraker has shared voting
and investment power but as to which he disclaims any other beneficial
interest.
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11
NOTES (CONTINUED):
<F7> Includes 2,000 shares over which General Jones has shared
voting and investment power but as to which he disclaims any other
beneficial interest.
<F8> Includes 2,000 shares over which Mrs. Preiskel has shared
voting and investment power but as to which she disclaims any other
beneficial interest.
<F9> Includes 600 shares over which Mr. Warner has shared voting and
investment power but as to which he disclaims any other beneficial
interest.
<F10> Includes 44,400 shares over which Mr. Welch has shared voting
and investment power but as to which he disclaims any other beneficial
interest.
<F11> Includes 599,798 shares over which there are shared voting
and/or investment powers.
</TABLE>
* BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held nine meetings during 1994. The average
attendance by directors at Board meetings, and Committee meetings they were
scheduled to attend, was over 95%.
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 Atwater (Chairman),
Calloway, Cathcart, Henley, Michelson and Sigler. 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
1994. 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, Conn. 06431.
Members of the Management Development and Compensation Committee are
Directors Cathcart (Chairman), Henley, Jones, Michelson and Rhodes. This
committee has two primary responsibilities: (1) to monitor the Company's
management resources, structure, succession planning, development and
selection process and 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 nine times during 1994.
Members of the Audit Committee are Directors Michelson (Chairman),
Atwater, Cathcart, Fouraker, Preiskel and Rhodes. 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)
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12
and the accounting standards and principles followed; and (5) examining
other reviews relating to compliance by employees with important GE
policies. There were four meetings of the Audit Committee during 1994.
Directors (other than those who are GE employees) are paid an annual
retainer of $50,000 plus a fee of $1,400 for each Board meeting and for
each Board Committee meeting attended. Non-employee directors are also paid
a travel allowance for attendance at Board meetings.
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 long-
term U.S. government bonds. Participants will receive payments from their
account in cash, in either a lump sum or annual installments, after
termination of Board service.
Any non-employee director who has served as a director for at least
five years, is 65 years of age or older, and retires directly from the
Board is 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. The Board has decided that no
director shall stand for re-election after his or her 73rd birthday.
GE also provides each director (other than those who are GE
employees) with group life and accidental death insurance in the aggregate
amount of $150,000. No present director or nominee is eligible to
participate in GE's Incentive Compensation Plan, employee stock option
plans or in any pension plans of GE or its subsidiaries, except for Messrs.
Dammerman, Fresco and Welch.
All the directors, except for Messrs. Dammerman, Fresco and Welch,
are eligible to participate in the 1989 Stock Option Plan for Non-Employee
Directors. The Plan automatically provides yearly grants of options (with
each grant becoming exercisable in four equal annual installments) to each
director who is serving on the Board at the time of such grant and who is
not also an employee of GE or any of its affiliates. Each annual grant
permits the holder to purchase from GE up to 3,000 shares of GE's common
stock (subject to adjustment as provided in the Plan) at the fair market
value of such shares on the date the option was granted. Payment to GE may
be in cash, GE common stock or a combination thereof. Annual grants are
made on the last day of trading of GE stock in each January through 1996.
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. In 1994, each participating director received a
grant of options on 3,000 shares at an exercise price of $53.875.
GE has had directors' and officers' liability insurance in effect since
1968. National Union Fire Insurance Company, Aetna Casualty and Surety
Company, and Federal Insurance Company are the principal underwriters. GE
<PAGE>
13
also has fiduciary liability insurance covering fiduciaries of GE's
employee benefit plans. National Union Fire Insurance Company, Federal
Insurance Company, and Aetna Casualty and Surety Company are the principal
underwriters. The directors' and officers' liability insurance covers
directors, officers and certain managers of GE and its subsidiaries. The
fiduciary liability insurance covers, among others, directors, officers and
employees who may be fiduciaries of any of GE's employee benefit plans. The
current term of the policies will be until September 25, 1995, for the
directors' and officers' liability insurance and May 31, 1995, for the
fiduciary liability insurance. The total annual premium is approximately
$4,153,000.
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. The Company's payment of the contributions will ultimately be
recovered from life insurance policies that the Company maintains on the
directors for this purpose. The directors will not receive any financial
benefit from this program since the insurance proceeds and charitable
deductions accrue solely to the Company. The overall program will not
result in a material cost to the Company.
The directors (other than Messrs. Calloway, Gonzalez, Penske and
Warner) 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.
The directors (other than Messrs. Dammerman, Gonzalez, Penske and
Warner), certain former directors, a former officer, and a former employee
of the Company are defendants in a civil suit purportedly brought on behalf
of the Company as a share owner derivative action (the Benfield action) in
U.S. District Court in Cincinnati, Ohio, in 1992. The suit seeks
compensatory damages and equitable relief arising out of the alleged
failure of the director-defendants to prevent government contract fraud.
Plaintiff's claims relate primarily to the fact that, in July 1992, the
Company pled guilty to four federal felony counts and settled a related
federal False Claims Act civil suit, all of which were related to
diversions of U.S. military aid funds in connection with the Company's sale
of military aircraft engines to Israel. The Company paid a fine of $9.5
million and simultaneously agreed to pay $59.5 million to settle the False
Claims Act civil suit. On December 3, 1993, the court approved a settlement
<PAGE>
14
of the derivative action. Under the terms of the settlement, the Company
will receive a payment of $19.5 million from an insurance policy it
maintains to cover officers' liability, less plaintiff's counsel fees and
expenses awarded by the court. The defendants have denied all allegations
of wrongdoing, and all parties to the action have agreed that the
settlement is premised upon the litigation risks associated with the claims
that a single former officer non-willfully failed to implement effectively
the Company's compliance policies and procedures. In agreeing to resolve
this matter, plaintiff did not contest the director-defendants' position
that they had lawfully discharged their duties to GE and that the Company,
at all relevant times, has had in existence detailed plans and procedures
designed to promote and enforce compliance with relevant laws. One share
owner has appealed the District Court's order approving the settlement. A
U.S. Court of Appeals dismissed the appeal, and the share owner has
indicated his intention to petition for review by the U.S. Supreme Court.
The directors (other than Messrs. Dammerman and Penske) and certain
former directors are defendants in a civil suit purportedly brought on
behalf of the Company as a share owner derivative action (the Bildstein
action) in New York State Supreme Court, Queens County, in 1994. The suit
seeks compensatory damages arising out of the purported failure of the
defendants to prevent alleged government contract fraud and alleged
violations of the Foreign Corrupt Practices Act in connection with U.S.
government funded sales of military equipment to Egypt by a unit of the
Company's former GE Aerospace business. GE Aerospace was transferred to
Martin Marietta Corporation in 1993. The suit claims that the risk of
litigation arising from the alleged wrongdoing caused the Company to
receive less than it would have otherwise received in connection with the
transfer of GE Aerospace. Upon the Company's motion, the suit was dismissed
by the court and the plaintiff has appealed that dismissal.
The directors (other than Messrs. Dammerman and Penske) are also
defendants in two civil suits purportedly brought on behalf of the Company
as share owner derivative actions (the Kidder actions) in New York State
Supreme Court, New York County, in 1994. The suits claim that the Company's
directors breached their fiduciary duties to the Company by failing to
adequately supervise and control its indirect subsidiary, Kidder, Peabody &
Co., Incorporated, where an employee created $350 million of false trading
profits. The suits seek compensatory damages and other relief. The Company
expects to move to dismiss these suits for failure to meet certain
requirements of New York corporate law.
Pursuant to the indemnification provisions of the By-laws, the
Company paid a total of $1,296,640 in defense costs incurred since 1986 by
the directors named as defendants in a share owner derivative suit that
challenged the use of Company funds to provide administrative support to
the GE employees' non-partisan political action committee. That suit was
concluded in favor of the directors in 1994.
<PAGE>
15
* CERTAIN TRANSACTIONS
Mr. Penske has an indirect financial interest in Penske Truck Leasing Co.,
L.P., a partnership formed in 1988 between subsidiaries of Penske
Corporation and GE Capital in order to operate a truck leasing and rental
business. 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
1994 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. In connection with the
relocation of William J. Conaty at the time of his promotion to the
position of Senior Vice President - Human Resources in 1993, the Company
provided a $500,000 loan to assist him in purchasing a home. The loan is
secured by a second mortgage on the home and is repayable, with interest at
the Company's commercial paper borrowing rate, in five years from the date
the loan was made.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
* Compensation Policies for Executive Officers
The Management Development and Compensation Committee of the Board of
Directors (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 consists of the following elements: annual payments
of salary and bonuses; annual grants of stock appreciation rights (SARs);
and periodic grants of restricted stock units (RSUs). In 1994, the
Committee also granted a new form of contingent long-term financial
performance award to a number of the Company's key executives. As described
more fully below, each element of the Company's executive compensation
program has a somewhat different purpose. All SAR, RSU and contingent long-
term financial performance awards were made under the share-owner-approved
GE 1990 Long Term Incentive Plan (Plan), which limits total annual awards
to less than 1% of issued shares.
All of the Committee's judgments during 1994, as in prior years, regarding
the appropriate form and level of executive compensation payments and
awards were ultimately based upon the Committee's assessment of the
Company's executive officers, the continuing demand for superior executive
talent, the Company's overall performance, and GE's future objectives and
challenges. Although the Committee did not rely upon a guideline or formula
<PAGE>
16
based on any particular performance measure or single event in 1994, some
of the specific factors affecting the Committee's judgment included, among
other things: strong increases in the earnings of the Company's continuing
operations and a record operating margin rate reflecting solid productivity
gains in a period of intense competition; increased revenues derived
outside the United States and further improvements in the Company's global
competitive position through a number of strategic transactions, such as
the acquisition of a controlling interest in Nuovo Pignone and numerous
joint ventures with partners in developing markets; the increasing
worldwide development and introduction of new products and services; and
continuation of productivity, quality and employee empowerment initiatives
that, among other things, improved working capital turnover and cash flows,
and increased return on share owner equity. The Committee also considered
the compensation practices and performances of other major corporations,
including the companies in the Dow Jones Industrial Average, which 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 Company and the
share owners, to set the overall level of the Company's salary, bonus and
other compensation awards above the average of companies in the comparison
group in order to enable the Company to continue to attract and retain the
highest level of executive talent possible.
Salary payments in 1994 were made to compensate ongoing performance
throughout the year, while 1994 bonuses were based upon the Committee's
judgment regarding the significance of the executive officers'
contributions during 1994. The new contingent long-term financial
performance awards granted in June 1994 were designed to provide additional
emphasis on three key financial performance measurements (earnings per
share, return on equity and cash flow), measured on a cumulative basis for
continuing operations during the two-and-one-half year period from July
1994 through December 1996. A participant's award will be canceled if the
participant's employment terminates before December 31, 1996 for any reason
other than retirement or death. Potential payments for the named executive
officers who received these awards are shown in the table on page 26.
SAR and RSU awards are primarily designed to provide strong
incentives for superior longer-term future performance and continued
retention by the Company. The exercisability of SARs and the lapse of
restrictions on RSUs are therefore conditioned upon the executive officer's
continued employment by the Company for periods of time specified by the
Committee when these awards are granted. Unexercised SARs and RSUs for
which restrictions have not lapsed are forfeited if the executive officer
leaves the Company before retirement. SARs granted in 1994 become
exercisable in two installments, the first half after three years and the
other half after five years from the date of grant. Only one executive
officer was granted RSUs in 1994. The restrictions on 25% of these RSUs
lapse in three years, an additional 25% lapse in seven years, and the
remaining 50% lapse at retirement.
<PAGE>
17
The SAR and RSU awards will increase or decrease in value based upon
the future price of the Company's stock. SARs permit 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. The Committee awards SARs, instead of stock options, to the
Company's executive officers to provide them with long-term performance-
based cash incentives equivalent to those provided by stock options,
without incurring the risk of frivolous private securities litigation. The
Committee doubled the number of outstanding stock options, SARs, and RSUs
granted prior to May 1994, as permitted under the Plan, in order to
preserve their value following the Company's 2-for-1 stock split in 1994.
However, in view of its assessment of the overall executive compensation
program, the Committee considered it appropriate in 1994 to grant executive
officers less than double the number of pre-split SARs granted in 1993. In
addition to annual SAR grants and periodic RSU grants to the executive
officer group, the Committee also periodically makes special SAR and RSU
grants to reflect unusual contributions made or responsibilities assumed.
For example, as shown in the accompanying tables, the Committee made
special grants of 10,000 SARs, and RSUs having a grant-date value of
$1,687,500, to Mr. Dammerman in 1994 in view of the additional
responsibilities he assumed in connection with Kidder, Peabody.
The Committee's decisions concerning the specific 1994 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,
and prior-year bonus and other compensation awards. As noted above, in all
cases the Committee's specific decisions involving 1994 executive officer
compensation were ultimately based upon the Committee's judgment regarding
the individual executive officer's performance, potential future
contributions, and whether each particular payment or award would provide
an appropriate reward and incentive for him or her to sustain and enhance
the Company's long-term superior performance as shown on the performance
graphs on pages 22 and 23.
* BROAD-BASED EMPLOYEE STOCK OPTION PLAN
In addition to granting 1,360,000 SARs (about 9% of the total number of
SARs and stock options awarded in 1994) to the Company's 23 executive
officers under the programs described above, the Committee also granted
more than 15 million stock options (about 91% of the total) to about 8,000
other GE employees under the Company's broad-based stock option program.
This broad-based program was initiated in 1989 and is a vital element of
the Company's drive to empower and motivate outstanding long-term
contributions by the high-performing employees who will lead GE into the
<PAGE>
18
21st century. It is designed to create in the Company the entrepreneurial
environment and spirit of a small company and to provide broad incentives
for the day-to-day achievements of these employees in order to sustain and
enhance GE's long-term performance. The Committee believes that the
superior performance of these individuals has contributed significantly to
the productivity gains that led to the solid financial performance of the
Company's continuing operations in 1994. Currently, there are more than
17,000 employees below the executive officer level who have been awarded
one or more stock option grants under this broad-based program.
* BASES FOR CHIEF EXECUTIVE OFFICER COMPENSATION
In 1994, Mr. Welch received total cash payments of $4,350,000 in salary and
bonus (as shown in the Summary Compensation Table on page 20), keeping him
among the highest-paid CEOs in terms of current salary and bonus. The
Committee continued to consider this level of payment appropriate in view
of Mr. Welch's leadership of one of the world's top companies in terms of
earnings, balance sheet, share owner value and management processes.
In June 1994, the Committee granted Mr. Welch, along with other key
executives, the new contingent long-term financial performance award
described above and in the table on page 26 in order to provide additional
incentive for achieving the specified financial performance objectives
through 1996. The Committee also granted Mr. Welch 320,000 SARs in 1994,
half of which become exercisable in 1997, and half in 1999. These SARs will
have no value at all if GE's stock price is below $51 per share, the price
of the stock on the date the SARs were granted. These awards would also be
forfeited if Mr. Welch were to leave the Company for reasons other than
retirement before they become exercisable. The primary basis for the
Committee's determination to grant such SARs to Mr. Welch in 1994 was to
provide a strong incentive for him to continue to serve the share owners by
remaining CEO of the Company and to increase the value of the Company
during the remainder of his employment.
The bases for the Committee's determinations regarding Mr. Welch's
compensation in 1994 included his effectiveness in improving the overall
global competitive position and financial results of the Company's
continuing operations; his drive to reinforce a culture of integrity,
quality, stretch targets, and boundaryless behavior throughout the entire
organization; his decisive management of operational and strategic issues,
including the difficulties which arose at Kidder, Peabody; and his
leadership in the Company's successful court defense against antitrust
charges. As in prior years, the key judgment the Committee made in
determining Mr. Welch's 1994 compensation was its assessment of his ability
and dedication to enhance the long-term value of the Company for the share
owners by continuing to provide the leadership and vision that he has
provided throughout his tenure as CEO, during which GE's market value has
increased by more than $73 billion. This performance is further highlighted
on the Fourteen-Year Performance Graph on page 23, which covers Mr. Welch's
tenure as CEO and compares GE's stock performance with the stock
performance of other companies as measured by broad indices.
<PAGE>
19
* COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Management Development and Compensation Committee is composed of the
following outside directors: Silas S. Cathcart (Chairman), Henry H. Henley,
David C. Jones, Gertrude G. Michelson, and Frank H. T. Rhodes. 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
the Company since 1972, except for the period during 1987 to 1989 when he
served as Chairman and CEO of Kidder, Peabody Group Inc., a subsidiary of
the Company.
*****
The foregoing report on executive compensation is provided by the following
outside directors, who constituted the Management Development and
Compensation Committee during 1994:
Silas S. Cathcart (Chairman) Gertrude G. Michelson
Henry H. Henley, Jr. Frank H. T. Rhodes
David C. Jones
<PAGE>
20
SUMMARY COMPENSATION TABLE
<TABLE>
ANNUAL COMPENSATION
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
NAME AND OTHER ANNUAL TOTAL ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION <F1> COMPENSATION
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
JOHN F. WELCH, JR. 1994 $1,850,000 $2,500,000 - $4,350,000
Chairman of the Board and 1993 1,750,000 2,200,000 $62,767 4,012,767
Chief Executive Officer 1992 1,600,000 1,900,000 - 3,500,000
PAOLO FRESCO 1994 $ 875,000 $1,250,000 - $2,125,000
Vice Chairman of the Board and 1993 762,500 1,000,000 - 1,762,500
Executive Officer 1992 653,333 650,000 - 1,303,333
FRANK P. DOYLE 1994 $ 716,667 $ 760,000 - $1,476,667
Executive Vice President 1993 666,667 625,000 $68,815 1,360,482
1992 554,167 475,000 - 1,029,167
DENNIS D. DAMMERMAN 1994 $ 775,000 $ 700,000 - $1,475,000
Senior Vice President, 1993 656,250 560,000 $64,228 1,280,478
Finance 1992 595,833 460,000 68,713 1,124,546
BENJAMIN W. HEINEMAN, JR. 1994 $ 762,500 $ 665,000 - $1,427,500
Senior Vice President, 1993 700,000 565,000 - 1,265,000
General Counsel and Secretary 1992 656,667 500,000 - 1,156,667
- -----------------------------------------------------------------------------------------------------------------
<FN>
NOTES:
<F1> This column includes the aggregate incremental cost to the
Company of providing various perquisites and personal benefits in excess of
reporting thresholds.
<F2> 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 senior officers of the Company. The aggregate
holdings/value of restricted stock and RSUs from prior years held on
December 31, 1994, by the individuals listed in this table, are: Mr. Welch,
467,500 shares or units/$23,842,500; Mr. Fresco, 138,000 shares or
units/$7,038,000; Mr. Dammerman, 147,000 shares or units/$7,497,000; and
Mr. Heineman, 102,000 shares or units/$5,202,000. The restrictions on these
units lapse on a scheduled basis over the executive officer's career, or
upon death, with the restrictions on 25% of the units 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.
<F3> The numbers of SARs granted before 1994 were doubled to reflect
the Company's 2-for-1 stock split in 1994.
<F4> These amounts represent Company payments of 3 1/2% of eligible
pay made in connection with the Company's Savings and Security Program.
<PAGE>
21
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Long-Term
Compensation All Other Compensation
--------------------------- --------------------------------------------------------------------
Payments
Number Relating to Earnings on Value of
Restricted of Stock Employee Deferred Supplemental
Name and Stock Appreciation Savings Compen- Life Insurance Total All Other
Principal Positions Units<F2> Rights<F3> Plan<F4> sation <F5> Premiums<F6> Compensation<F7>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JOHN F. WELCH, JR. - 320,000 $103,225 $101,112 $189,794 $394,131
Chairman of the Board and - 400,000 94,492 67,383 216,404 378,279
Chief Executive Officer $7,800,000 300,000 85,461 59,108 75,223 219,792
PAOLO FRESCO - 160,000 $30,626 $ 35,450 $ 46,187 $284,416
Vice Chairman of the Board - 200,000 26,717 21,052 51,777 288,915
and Executive Officer $3,510,000 140,000 28,961 18,466 24,541 94,008
FRANK P. DOYLE - 80,000 $ 36,050 $ 28,413 $ 44,142 $108,605
Executive Vice President - 100,000 31,692 24,924 49,338 105,954
- 130,000 25,761 21,863 4,163 51,787
DENNIS D. DAMMERMAN $1,687,500 95,000 $ 36,901 $ 10,970 $ 43,404 $91,275
Senior Vice President, - 150,000 30,992 6,443 47,123 84,558
Finance 2,730,000 80,000 27,462 5,652 10,025 43,139
BENJAMIN W. HEINEMAN, JR. - 45,000 $ 36,594 $ 15,252 $ 54,485 $106,331
Senior Vice President, - 80,000 33,242 8,465 58,906 100,613
General Counsel and Secretary $1,950,000 54,000 30,811 7,426 7,952 46,189
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
Notes (continued):
<F5> This compensation represents the difference between market
interest rates determined pursuant to SEC rules and the 14% interest
credited by the Company on salary deferred by the executive officers in
1987 and 1991, and the 10% interest credited on salary deferred in 1994.
The executive officers must remain employed by the Company for at least
four years following the deferrals in order to obtain the stated interest
rate.
<F6> This column sets forth the maximum potential estimated dollar
value of the Company's portion of insurance premium payments for
supplemental life insurance. GE will recover all premiums paid by it,
generally upon the later of ten years after purchase of the policy or when
the insured executive reaches age 60. The maximum potential value is
calculated, in line with current SEC directions, as if the 1994 premiums
were advanced to the executive officers without interest until the time the
Company expects to recover the premium. This approach was also used for the
1993 premiums as contrasted to the increase in policy cash value
calculation used for 1992. Under the terms of the policies, the executive
officers would receive significantly reduced value from the premiums paid
by the Company if they were to leave the Company prior to retirement.
<F7> For Mr. Fresco, these figures include amounts which represent
customary payments made to employees who are temporarily located outside
their home country. The net payments to Mr. Fresco amounted to $22,040 in
1992, $189,369 in 1993, and $172,153 in 1994.
</TABLE>
<PAGE>
22
FIVE-YEAR PERFORMANCE GRAPH: 1989 - 1994
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG GE, S&P 500, DOW
JONES INDUSTRIAL AVERAGE (DJIA) AND S&P ELECTRICAL EQUIPMENT GROUP
The annual changes for the five- and fourteen-year periods shown in the
graphs on this and the facing page are based on the assumption that $100
had been invested in GE stock and each index on December 31st of 1989 (as
required by SEC rules) and 1980, respectively, and that all quarterly
dividends were re-invested at the average of the closing stock prices at
the beginning and end of the quarter. The total cumulative dollar returns
shown on the graphs represent the value that such investments would have
had on December 31, 1994.
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
- ------------------------------------------------------------------------
GE S&P Elec. DJIA S&P 500
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1989 $100.0 $100.0 $100.0 $100.0
1990 91.7 91.9 99.4 96.9
1991 126.0 121.9 123.5 126.3
1992 145.1 133.5 132.7 136.0
1993 182.9 161.1 155.3 149.7
1994 183.4 163.0 163.1 151.7
- ------------------------------------------------------------------------
</TABLE>
<PAGE>
23
FOURTEEN-YEAR PERFORMANCE GRAPH: 1980 - 1994
COMPARISON OF FOURTEEN-YEAR CUMULATIVE TOTAL RETURN AMONG GE, S&P 500, DOW
JONES INDUSTRIAL AVERAGE (DJIA) AND S&P ELECTRICAL EQUIPMENT GROUP
The graph below shows the cumulative total return to GE share owners since
December 31, 1980, shortly before Mr. Welch became GE's Chairman and Chief
Executive Officer in April 1981, compared with the same indices shown on
the previous graph, thus illustrating the relative performance of the
Company during his tenure in that position.
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
- ------------------------------------------------------------------------
GE S&P Elec. DJIA S&P 500
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------
1980 $ 100.0 $100.0 $100.0 $100.0
1981 98.7 113.5 96.4 95.1
1982 171.3 151.0 122.6 115.6
1983 219.2 162.6 154.6 141.7
1984 219.7 166.3 156.6 150.5
1985 292.7 214.7 209.4 198.3
1986 356.7 233.4 266.4 235.4
1987 375.3 252.0 280.9 247.5
1988 393.7 254.5 326.4 288.5
1989 586.5 358.9 432.1 380.0
1990 538.1 329.8 429.5 368.1
1991 739.1 437.5 533.8 480.1
1992 850.8 479.1 573.4 516.7
1993 1072.9 578.2 670.9 568.7
1994 1075.5 584.9 704.9 576.4
- ------------------------------------------------------------------------
</TABLE>
<PAGE>
24
STOCK APPRECIATION RIGHTS AND STOCK OPTIONS
As discussed in the Compensation Committee Report on pages 15 to 19, stock
appreciation rights (SARs) and stock options are granted as an incentive
for superior performance leading to increased share owner value. The
relationship between the potential gains in share owner value and the SARs
and stock options granted to employees in 1994 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
SARs and stock options granted in 1994, and the corresponding 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 SARs and stock options
granted in 1994 (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 SARs
granted to Mr. Welch in 1994, for example, would produce the pre-tax gain
of $25,949,000 shown in the table only if the Company's stock price rises
to over $132 per share before Mr. Welch exercises the SARs. Based on the
number of shares outstanding at the end of 1994, such an increase in the
Company's stock price would produce a corresponding aggregate pre-tax gain
of over $138 billion for the Company's share owners. In other words, Mr.
Welch's potential gain from SARs granted in 1994 would equal less than two-
hundredths of one percent (i.e., 0.019%) of the potential gain to all share
owners resulting from the assumed future stock price increases.
The tables on the opposite page also provide information on SARs
granted to or exercised by the five most highly compensated executive
officers during 1994, as well as information on their SAR holdings at the
end of 1994. SARs expire ten years after the date of grant, and are
generally exercisable during quarterly ten-business-day periods beginning
on the third business day following the public release of the Company's
quarterly summary statement of sales and earnings.
As shown in the second table, Mr. Welch received an actual pre-tax
gain of $3,259,375 from SARs exercised in 1994. This entire gain was based
upon increases in GE's stock price between the date of grant and the date
of exercise of these SARs.
<PAGE>
25
STOCK APPRECIATION RIGHTS AND STOCK OPTIONS GRANTED IN 1994
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
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 Options/ SARs Grant- or Base Expira- Annual Annual Annual
Name of SARs ed to All Price Per tion Growth Growth Growth
Executive/Group Granted Employees Share Date Rate Rate Rate
- --------------------------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John F. Welch, Jr. 320,000 1.9% $51.00 9/16/04 0 $ 10,282,000 $ 25,949,000
Paolo Fresco 160,000 1.0% $51.00 9/16/04 0 $ 5,141,000 $ 12,974,000
Frank P. Doyle 80,000 0.5% $51.00 9/16/04 0 $ 2,570,000 $ 6,487,000
Dennis D. Dammerman 10,000 0.1% $46.25 6/24/04 0 $ 291,000 $ 735,000
85,000 0.5% $51.00 9/16/04 0 $ 2,731,000 $ 6,893,000
Benjamin W. Heineman, Jr. 45,000 0.3% $51.00 9/16/04 0 $ 1,446,000 $ 3,649,000
________________________
All Share Owners NA NA NA NA 0 $54,812,700,000<F2> $138,336,864,000<F2>
All Optionees 16,654,500 100% $50.68 <F1> 0 $ 531,778,000 $ 1,342,020,000
- % of Total Share NA NA NA NA NA 1.0% 1.0%
Owners' Value
- -------------------------------------------------------------------------------------------------------------------
<F1> Options expire on various dates during the year 2004. Exercise price
shown is an average of all grants.
<F2> Based on the number of shares outstanding at December 31, 1994.
- ---------------------------------------------------------------------------
</TABLE>
AGGREGATED STOCK APPRECIATION RIGHTS EXERCISED IN 1994 AND DECEMBER 31,
1994, SAR VALUE
<TABLE>
<CAPTION>
Exercised in 1994 Unexercised at December 31, 1994
------------------------ -------------------------------------------------------------
Number of SARs Value of SARs<F1>
-------------------------- -----------------------------
Name of Number of $ Value Unexer- Unexer-
Executive SARs Realized Exercisable cisable Exercisable cisable
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John F. Welch, Jr. 100,000 $3,259,375 910,000 940,000 $18,662,500 $3,971,875
Paolo Fresco - - 198,000 444,000 $ 3,440,500 $1,556,875
Frank P. Doyle 45,500 $1,243,281 153,000 243,500 $ 2,398,469 $1,054,688
Dennis D. Dammerman - - 90,500 274,000 $ 1,076,219 $1,124,375
Benjamin W. Heineman, Jr. - - 234,500 154,500 $ 4,914,594 $ 728,406
- ------------------------------------------------------------------------------------------------------------------
<FN>
<F1> These values are based upon the difference between the grant prices
of all SARs awarded in 1994 and prior years and the December 31, 1994,
closing price for the Company's stock of $51.00 per share.
</TABLE>
<PAGE>
26
CONTINGENT LONG-TERM FINANCIAL PERFORMANCE INCENTIVE AWARDS IN 1994
The following table sets forth the contingent long-term financial
performance incentive awards granted to named executives in 1994 as
explained in the Management Development and Compensation Committee report
on pages 15 to 19.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Potential 1997 Payments as a Percentage
of Aggregate Salary and Annual Bonuses for 1994-1996
----------------------------------------------------
Name of Performance Threshold Target Maximum
Executive Period Payment (%) Payment (%) Payment (%)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John F. Welch, Jr. 7/94 - 12/96 33% 67% 100%
Paolo Fresco 7/94 - 12/96 33% 67% 100%
Frank P. Doyle 7/94 - 12/96 33% 67% 100%
Dennis D. Dammerman 7/94 - 12/96 33% 67% 100%
Benjamin W. Heineman, Jr. 7/94 - 12/96 17% 33% 67%
- -----------------------------------------------------------------------------------------------------
</TABLE>
The awards will be payable in 1997 in cash, or at the discretion of
the Committee, Company common stock or combination thereof, if the Company
attains any of the threshold, target or maximum goals set by the Management
Development and Compensation Committee of the Board for three financial
performance measurements of GE's continuing operations (earnings per share,
return on equity and cash flow). The table shows the percentage of the
participant's aggregate salary and annual bonuses for January 1, 1994
through December 31, 1996 that would be payable if the Company precisely
attained the threshold, or target, or maximum goals set by the Committee
for all three of the financial performance measurements. In granting the
awards, the Committee also established different potential payment rates
for the participants based upon its judgment of the participants' ability
to contribute to the financial performance measurements. Each measurement
is weighted equally, and payments will be made for the attainment of any of
the three goals for any of the three measurements. Also, payments will be
prorated for performance that falls between goals.
<PAGE>
27
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
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
ESTIMATED TOTAL ANNUAL RETIREMENT BENEFITS UNDER THE GE PENSION PLAN, THE GE SUPPLEMENTARY
PENSION PLAN, THE GE EXCESS BENEFIT PLAN AND SOCIAL SECURITY
Years of service at retirement
Earnings credited for -------------------------------------------------------------------------
retirement benefits 20 25 30 35 40
- --------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$ 250,000 $ 95,763 $ 116,812 $ 137,860 $ 150,000 $ 150,000
500,000 183,263 226,187 269,110 300,000 300,000
750,000 270,763 335,562 400,360 450,000 450,000
1,000,000 358,263 444,937 531,610 600,000 600,000
1,500,000 533,263 663,687 794,110 900,000 900,000
2,000,000 708,263 882,437 1,056,610 1,200,000 1,200,000
2,500,000 883,263 1,101,187 1,319,110 1,500,000 1,500,000
3,000,000 1,058,263 1,319,937 1,581,610 1,800,000 1,800,000
3,500,000 1,233,263 1,538,687 1,844,110 2,100,000 2,100,000
4,000,000 1,408,263 1,757,437 2,106,610 2,400,000 2,400,000
4,500,000 1,583,263 1,976,187 2,369,110 2,700,000 2,700,000
- --------------------------------------------------------------------------------------------------
</TABLE>
Amounts shown as "earnings credited for retirement benefits" in this
table represent the average annual covered compensation (as defined in the
GE Supplementary Pension Plan) paid for the highest 36 consecutive months
out of the last 120 months prior to retirement. For 1994, covered
compensation for the executive officers named in the table on page 20 is
the same as the total of their salary and bonus amounts shown in that
table. As of February 1, 1995, those executive officers had the following
years of credited service with GE: Mr. Welch, 34 years; Mr. Fresco, 33
years; Mr. Doyle, 33 years; Mr. Dammerman, 27 years; and Mr. Heineman, 7
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.
<PAGE>
28
APPOINTMENT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP have been recommended by the Audit Committee of the
Board for reappointment as the Independent Auditors for the Company. KPMG
Peat Marwick LLP were the Independent Auditors for the Company for the year
ended December 31, 1994. 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 1995.
Representatives of the Firm are expected to attend the 1995 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
Peat Marwick LLP, Stamford Square, Stamford, Connecticut, as Independent
Auditors for the Company for the year 1995 is hereby approved.
SHARE OWNER PROPOSALS
Some of the following share owner proposals contain assertions about GE
which, 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 GE assembled in Annual Meeting in
person and by proxy hereby request the Board of Directors to have the
Company furnish the stockholders each year with a list of people employed
by the Corporation with the rank of Vice President or above, or as a
consultant, or as a lobbyist, or as legal counsel or investment banker or
director, who, in the previous five years have served in any governmental
capacity, whether Federal, City or State, or as a staff member of any
congressional committee or regulatory agency, and to disclose to the
stockholders whether such person was engaged in any matter which had a
<PAGE>
29
direct bearing on the business of the Corporation and/or its subsidiaries,
provided that information directly affecting the competitive position of
the Corporation may be omitted."
Reasons: "Full disclosure on these matters is essential at General
Electric because of its many dealings with Federal and State agencies, and
because of pending issues forthcoming in Congress and/or State and
Regulatory Agencies.
"If you agree, please mark your proxy FOR this resolution."
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
GE consistently seeks both highly qualified employees and outside
advice from diverse sources: from colleges and universities, from other
businesses, from the professions and from government.
In hiring or retaining such employees or advisors, GE follows internal
policies and practices designed to identify and avoid any improper contacts
with governmental officials or agencies. Moreover, with respect to former
governmental employees it hires or retains, the Company has programs for
complying with laws and regulations designed to prevent such impropriety.
Because avoiding improper contacts by all Company employees is an
ongoing responsibility of management, because compliance with the law
requires it, and because the Company is making substantial efforts to avoid
both the reality and appearance of impropriety, the Board believes that no
purpose would be served by furnishing the list called for in this proposal.
Therefore, your Board recommends a vote against this proposal.
* SHARE OWNER PROPOSAL NO. 2
GE Stockholders' Alliance, 1302 W. Ajo Way, #313, Tucson, AZ 85713-5727,
and other filers have notified GE that they intend to present the following
proposal at this year's meeting:
"Whereas: Operating GE Boiling Water Reactors have dangerous aging
problems that pose excessive economic costs for repairs and cause
decreasing safety margins;
"Whereas: GE should avoid possible sources of further litigation as
GE's reactors are subject to serious accidents due to the plants' aging and
defective design;
"Whereas: Nuclear reactors generate radioactive waste, a source of
material for making nuclear bombs, contributing to potential nuclear
weapons proliferation;
"Whereas: There is still no method or permanent location for
isolating radioactive waste, making it irresponsible to continue to
generate radioactive waste;
"Whereas: Increasing knowledge about adverse health consequences of
radiation exposure also dictates a halt to the further generation and use
of radioactive materials;
"Whereas: GE could replace nuclear generated energy with its energy
efficient, safe operating and environmentally superior gas combined cycle
<PAGE>
30
units -- thus both protecting the environment and promoting business
opportunities;
"Whereas: GE's 'advanced reactors' have only minimal improvements in
design and still generate long-lived radioactive waste; and
"Whereas: There are no 'domestic' and few foreign market
opportunities for selling the so-called 'advanced' reactor; in the U.S. no
nuclear power plant order has been placed in 21 years - that is, all orders
placed since 1973 have been cancelled;
"Therefore be it resolved that GE management shall: assist all
customers of its nuclear reactors (domestic and foreign) to close nuclear
operations and halt further development of any 'advanced' reactors as soon
as possible, to help avert environmental catastrophe, reduce the potential
for weapons proliferation, and remove a source of liability for lawsuits;
and promote the sale of GE's energy efficient non-nuclear generating
units."
Supporting Statement: "Independent scientific organizations warn
about impending serious accidents from continued operation of GE's boiling
water reactors. In 1986 there was wide publicity (and subsequent lawsuits
against GE) about GE's flawed pressure-suppression containments -- still
unresolved -- and other unresolved generic issues. Additional serious plant
design flaws continue to be revealed, including maintenance problems of
corrosion of reactor internals involving 19 components. The continuing need
to repair and replace worn-out or defective parts makes nuclear power
prohibitively expensive.
"We urge General Electric to withdraw from this failed technological
experiment as soon as possible to avert further environmental and
biological harm, and, potentially, a catastrophic accident."
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 1994, about 19% of the electrical power used in
the United States was generated at nuclear plants, many of them using
reactors provided by GE. An even greater percentage of the electrical power
needs of many other nations is produced with nuclear power. The Nuclear
Regulatory Commission in the United States and similar regulatory bodies in
other countries have the ongoing responsibility for ensuring that nuclear
facilities operate safely.
The focus of GE's profitable nuclear business today is to provide
high-quality nuclear fuel and plant support services for utility customers.
These products and services are aimed at making existing nuclear plants run
safely and efficiently. Your Board also believes it is appropriate for GE
to participate in the development of advanced designs for nuclear
generating plants to support utility customers in areas of the world where
a mix of technologies will be necessary to supply a growing need for
electrical generating capacity.
Because GE's nuclear business continues to provide important products
and services for the Company's utility customers, your Board recommends a
vote against this proposal.
<PAGE>
31
* SHARE OWNER PROPOSAL NO. 3
Mrs. Patricia T. Birnie, 1302 W. Ajo Way, #313, Tucson, AZ 85713-5727, and
other filers, have notified GE that they intend to present the following
proposal at this year's meeting:
"Whereas GE has hundreds of highly trained nuclear energy engineers
and technicians;
"Whereas it is in the interest of public health and the environment
that we halt further generation of radioactive waste and develop
responsible methods for isolation of radioactive materials; and
"Whereas there will be enormous demand for expertise in
decommissioning nuclear facilities in the near future;
"Therefore be it resolved that GE management shall promote
environmental sustainability and expand business opportunities, by
directing GE's nuclear engineers and staff to try to help resolve problems
of radioactive waste isolation and develop technology for decommissioning
all reactors and nuclear fuel cycle facilities."
Supporting Statement: "We face a major crisis of growing quantities
of radioactive waste for which no method nor location exists to safely
isolate this highly toxic material. In spite of nuclear industry claims
that failure to resolve the problem is merely political, objective
scientists maintain that no safe technical solution or location exists, at
this time. The nuclear industry has been generating radioactive waste for
over 50 years; to continue -- knowing that no safe solution or location
exists for any of it -- is unconscionable.
"GE would perform a worldwide public service if it were to halt its
own promotion of nuclear power (stopping the generation of this major
source of radioactive waste) and apply the expertise of its nuclear
engineers to try to help resolve this most urgent problem.
"Waste isolation and decommissioning of nuclear facilities will
provide jobs for GE's engineers and thousands of people now needing jobs.
"Department of Energy documents show that more than 760 U.S. nuclear
reactors (civilian, research, university, and military) will need to be
decommissioned, many within the next few years. Uranium fuel fabrication
plants and other fuel cycle facilities, irradiators for medical supplies
and food, and other commercial radioactive facilities will also need to be
decommissioned. The worldwide market for these services is a great
potential for Company business.
"Radioactive pollution of the air, ground, and water that exists from
the routine operation of nuclear facilities (from planned as well as
accidental releases), transportation, and illegal dumping have increased
the level of 'background' radiation. Ingestion and inhalation of some of
this radioactivity are known causes of cancer and other life-shortening
diseases and many other grave health problems including damage to immune,
reproductive and neurological systems. The need to minimize further
releases of radiation cannot be overstated.
"General Electric has the expertise and prestige, and should feel the
responsibility to take leadership in efforts to resolve the radioactive
waste crisis."
<PAGE>
32
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
As discussed in the response to Share Owner Proposal No. 2, the focus
of GE's nuclear business today is to provide nuclear fuel and plant support
services to help utility customers operate their plants safely and
efficiently.
Under the Federal Nuclear Waste Policy Act of 1983, permanent storage
of spent fuel from the nation's nuclear generating facilities is the
responsibility of the U.S. Department of Energy. GE has decided that there
is no viable business opportunity for nuclear fuel storage at present.
Decisions on whether, and when, nuclear electrical generating plants
should be decommissioned are the responsibility of the utility companies
that operate them and the regulators. Under its current business strategy,
the Company does not plan to pursue the market for decommissioning
services.
Because the Company does not currently intend to pursue market
opportunities in either nuclear fuel storage or decommissioning services,
your Board recommends a vote against this proposal.
* SHARE OWNER PROPOSAL NO. 4
The Presbyterian Church (USA), 100 Witherspoon Street, Louisville, KY 40202-
1396, and other filers have notified GE that they intend to present the
following proposal at this year's meeting:
"Whereas, GE owns NBC, and is responsible for its programs;
"Whereas, we believe NBC has cut back substantially on its programs
for young children, and has not promoted good citizenship systematically in
the few such programs that remain;
"Whereas, NBC has developed 'Program Standards guidelines' to
'reflect an appreciation of fundamental elements of taste and
propriety...';
"Whereas, those guidelines do not include some standards that are
needed for the healthy development of children in NBC's audience, and the
guidelines are not fully implemented in NBC's television programs, which
often appear to condone illegal violent conduct and exaggerate the amount
and severity of illegal violence in life;
"Whereas, illegal violence in America has increased substantially
since the advent of television, and television viewing has been shown by
over 3,000 research studies to be one of the most significant indirect
causes of violence;
"Whereas, watching television, with its excesses of illegal violence,
has been proven to increase aggressiveness and reduce compassion in
viewers, especially children;
"Whereas, the Federal Government may find it necessary to regulate
the more obvious abuses of broadcaster responsibility to the viewing
public, if the broadcasters fail to exercise self-discipline effectively;
and
"Whereas, NBC's continuing neglect of its youngest audience, its
hesitancy to implement fully its Program Standards, and its reticence to
limit significantly the dramatizations of illegal violent acts are likely
to affect adversely its public image and profitability;
<PAGE>
33
"Therefore be it resolved, that the Shareholders request the Board of
Directors to review and report back to shareholders about NBC's Program
Standards and their implementation from the perspective of GE's social
responsibility to the public, in the light of what is known from research
about the effects of violence and other television programming features on
its viewing audience, especially young children."
Supporting Statement: "Are you concerned about the rising tide of
violence in our communities, and its effect on our culture and our people?
Now you can do something positive about it.
"Over 3,000 research studies, including two by U.S. Surgeons-General,
show that current broadcast television programming is a hazard to our
nation's health. General Electric owns NBC, and therefore can lead others
to improve the quality of programming shown on broadcast television. NBC
has adopted positive-sounding Program Standards, but they are not
effectively implemented. Violence, even graphic in nature, happens far too
often on NBC's airwaves, sometimes without indication of its consequences
or remorse by its perpetrators. Violence is paraded daily on NBC before us
and our young children who learn about life from television.
"GE's Directors must 'bring good things to life' by taking a fresh
look at what NBC actually broadcasts, and by asking themselves, 'Do I want
my children and grandchildren to be guided by what I'm seeing?' By your
vote for this resolution, you can help to initiate such a review. This is
the first step toward a reduction of violence which negatively affects
children, and the creation of more programming which will influence
children positively. We ask for your support."
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
NBC serves a vast national audience which has a great diversity of
backgrounds, customs and tastes.
NBC's goal is to present programming that reflects this broad
audience diversity and is consistent with NBC's standards for quality,
integrity and entertainment value. NBC has a well-staffed Broadcast &
Standards Department which sets and enforces standards and practices which
ensure, among other things, that excessive or gratuitous violence are not
in NBC programs. One of the daily functions of the Department is to review
every entertainment program and every commercial before they air to ensure
they are consistent with NBC's programming standards and policies.
In addition to internal program standards, NBC is a full participant
in several industry initiatives aimed at addressing the issue of violence
in programming.
Because NBC's program standards review is intense and ongoing, the
Board recommends a vote against this proposal.
* SHARE OWNER PROPOSAL NO. 5
Missionary Oblates of Mary Immaculate of Texas, 7711 Madonna Drive, San
Antonio, TX 78216-6696, and other filers have notified GE that they intend
to present the following proposal at this year's meeting:
<PAGE>
34
"Whereas: NAFTA, the North American Free Trade Agreement, and GATT,
the General Agreement on Trade and Tariffs, have emphasized the debate
surrounding U.S. corporations in Mexican maquiladora operations. Critics
deplore marginal survival wages paid Mexican maquiladora employees by a
majority of U.S. companies, even though those employees work productively
and efficiently.
"A 1994 market basket study reveals a maquiladora worker labors 69.0
minutes to purchase 5 lbs. of rice in comparison to the 13.5 minutes of a
U.S. worker. The purchasing power required by the maquiladora worker for
aspirin is 153.8 minutes versus 19.3 minutes for the U.S. worker; American
cheese, 214.3 to 12.6; chicken legs, 54.5 to 5.0; bananas, 20.4 to 2.3
('Market Basket Survey', Ruth Rosenbaum, 1994)
"An MIT study declares the Ford factory in Hermosillo, Mexico has the
highest quality of any auto plant in North America. Yet it pays on average
one-tenth of U.S. wages. Even in Mexico, these wages are barely enough to
feed a family, let alone buy a refrigerator or one of the cars the workers
assemble. ('Policy Advocate,' The Center for Ethics and Economic Policy,
Spring 1994)
"In 1982, the average Mexican blue collar employee worked 8.1 hours
to buy the basic basket of food: beef, beans, tortillas, tomatoes, sugar,
eggs and milk. In 1986, it was 12.7 hours and by 1993, 21.9 hours. (Dallas
Morning News, 8/14/94)
"Whereas: The U.S. and Mexico could build a healthy model of North-
South integration for the 21st century if Mexico is recognized not just as
a trading partner but as a country that contains fellow workers and global
citizens with whom we share much more than trade.
"Whereas: The socially-concerned proponents of this resolution firmly
believe there is a need for strict, enforceable standards of conduct for
corporations operating in Canada, Mexico and the United States. One
expectation, based on NAFTA, is that Mexican wages will rise, thereby
raising the standard of living of Mexican workers and their families.
However, we believe this will not happen unless corporations commit to
paying wages substantially higher than marginal survival wages paid in
maquiladoras. We find it ironic that some of the same companies that
publicly committed to paying entry-level workers 50% above the poverty
datum line in South Africa in 1974, are unresponsive when challenged with
the reality of the poverty level wages they pay employees in Mexico.
"It is important that our company review maquiladora operations
including: minimum and average wages paid to employees; how these compare
with local cost of living and poverty level; other methods of compensation
such as profit sharing, special trust funds to finance infrastructure
improvements in nearby neighborhoods where employees live. The religiously-
affiliated proponents of this resolution recommend the review contain a
market basket survey.
"Resolved: The shareholders request management to initiate a review
of wages and benefits paid and environmental standards upheld in its
Maquiladora Operations. A summary report of findings of the review and
<PAGE>
35
recommendations for changes in policy or performance in light of this
survey should be available to shareholders upon request within six months
of the 1995 annual meeting."
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
GE is committed to operating its maquiladora (or maquila) facilities
in compliance with all applicable Mexican laws and regulations and in
accordance with GE's policies and procedures. GE's maquila facilities
benefit their employees because they provide wages which are fair and
competitive for the region. These facilities also provide quality training,
work and benefits.
GE constantly reviews the working conditions and environmental
performance of its maquila facilities in light of applicable law and
regulation and GE's policies and procedures, in order to advance the
Company's goals of providing fair and competitive wages and following sound
environmental practices.
Because it believes that the Company's continuous review process is
sufficient, your Board recommends a vote against this proposal.
* SHARE OWNER PROPOSAL NO. 6
The Domestic and Foreign Missionary Society of the Protestant Episcopal
Church, Episcopal Church Center, 815 Second Avenue, New York, NY 10017-
4594, and another filer have notified GE that they intend to present the
following proposal at this year's meeting:
"Whereas, the Community Reinvestment Act (CRA) requires that federal
regulators evaluate depository institutions on their community reinvestment
activities (i.e., lending and other services to the communities in which
they operate) and that these evaluations be available to the public;
"Whereas, while the present Act refers only to depository
corporations (i.e., banks and savings institutions), the banking industry
has expanded and changed since the Act's passage in 1977. A large portion
of the loans held on the books of the originating institution in 1977 now
are sold into the secondary market; a still larger portion of those loans
now are generated by non-depository institutions, such as mortgage and
finance companies;
"Whereas, GE Capital is one of the leading providers of mortgages in
the United States;
"Whereas, we believe our corporation has a duty and a business
opportunity to incorporate its financial subsidiaries into a coherent
corporate-wide community reinvestment program;
"Be it resolved, Shareholders request the board of directors to
develop a policy to include all financial subsidiaries of the corporation
under a general program for community reinvestment similar to that required
of individual depository subsidiaries under the Community Reinvestment Act
and to report annually to shareholders on its achievements."
Supporting Statement: "CRA is good business and raises the quality of
life in communities.
<PAGE>
36
"We believe all financial institutions operating in a community have
a duty to provide products and services to meet the credit needs of the
entire community. Henry B. Gonzalez, Chairman of the Banking Committee of
the U.S. House of Representatives, implied the same belief when he raised
the question at a conference on CRA held by the Federal Reserve of Dallas:
'Why should other credit-granting institutions be exempt from CRA?'
"Moreover, banks have found CRA to be good business. As Richard M.
Rosenberg, CEO of BankAmerica, stated at a CRA conference in Dallas: 'A
substantive CRA program, which targets affordable housing, small business
and consumer credit, is fundamentally a way to add business to the
portfolio. In fact, CRA should be approached as a business tool, not a
social program.'"
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
GE Capital Services' 24 distinct businesses are engaged in a broad
spectrum of financial services. Deposit-taking entities within GE Capital
Services that are subject to the Community Reinvestment Act have programs
for complying with its requirements. Other GE Capital Services businesses
endeavor to serve a broad and diverse range of credit needs. For example,
GE Capital's equipment leasing business provides financing to small, as
well as medium and large firms throughout the nation; GE Capital Mortgage
Insurance Corporation is a leader in the development of services that help
lenders nationwide expand their market among first-time and low-income home
buyers; and a recently formed Community Small Business Development unit is
providing capital and technical assistance to small businesses in urban
communities.
Because GE Capital Services deposit-taking entities are committed to
complying with the Community Reinvestment Act and GE Capital Services has
developed programs and services to address the credit needs of a broad and
diverse range of communities, your Board recommends a vote against this
proposal.
<PAGE>
37
OTHER MATTERS
* SHARE OWNER PROPOSALS FOR 1996
Under the rules of the Securities and Exchange Commission, share owner
proposals submitted for next year's Proxy Statement must be received by GE
no later than the close of business on November 8, 1995, to be considered.
Proposals should be addressed to Benjamin W. Heineman, Jr., Secretary,
General Electric Company, Fairfield, Conn. 06431.
* VOTING SECURITIES
Share owners of record at the close of business on March 7, 1995, will be
eligible to vote at the meeting. The voting securities of GE consist of its
$0.32 par value common stock, of which 1,700,783,176 shares were
outstanding on January 31, 1995. 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 (The Corporation Trust Company) 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 15 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 will not be treated as votes cast and, therefore, will have no
effect on the outcome of the matters to be voted on at the meeting.
* MANNER FOR VOTING PROXIES
The shares represented by all valid proxies received will be voted in the
manner specified on the proxies. 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.
Should any matter not described above be acted upon at the meeting,
the persons named in the proxy form will vote in accordance with their
judgment. Except for omitted share owner proposals, the Board knows of no
other matters which may be presented to the meeting.
<PAGE>
38
* 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
1994 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 $17,000, plus distribution costs and other costs and expenses.
March 7, 1995
<PAGE>
39
1995 ANNUAL MEETING OF SHARE OWNERS
10:00 A.M., EDT, APRIL 26, 1995
SOUTH WING CONFERENCE CENTER
KENTUCKY FAIR & EXPOSITION CENTER
937 PHILLIPS LANE
LOUISVILLE, KENTUCKY 40209
CUT OFF AT DOTTED LINE
- ---------------------------------------------------------------------------
ADVANCE REGISTRATION FORM
Send your completed and signed proxy form in the enclosed envelope. Include
this Advance Registration Form in the envelope if you plan to attend or
send a representative to the Annual 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 guests or representatives who may attend the
meeting.
(PLEASE PRINT)
Share Owner's
Name __________________________________________________________________
Address ________________________________________________________________
________________________________________________________________________
_______________________________________________ Zip ___________________
Name(s) of
Family Member(s)
Who Will Also Attend ___________________________________________________
I am a GE Share Owner. My Representative at the Annual Meeting will be:
________________________________________________________________________
(Admission card will be returned c/o the share owner's address)
_________________________________________________________________________
Share Owner's Signature
<PAGE>
40
GE PROXY FORM
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHARE OWNERS, APRIL 26, 1995.
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
come before the 1995 Annual Meeting of Share Owners and any adjournments
thereof.
Returned proxy forms will be voted: (1) as specified on the matters listed
on the reverse side of this form; (2) in accordance with the Directors'
recommendations where a choice is not specified; and (3) in accordance with
the judgment of the proxies on any other matters that properly come before
the meeting.
The nominees for Director are: H. Brewster Atwater, Jr., D. Wayne Calloway,
Silas S. Cathcart, Dennis D. Dammerman, Lawrence E. Fouraker, Paolo Fresco,
Claudio X. Gonzalez, Robert E. Mercer, Gertrude G. Michelson, Roger S.
Penske, Barbara Scott Prieskel, Frank H. T. Rhodes, Andrew C. Sigler,
Douglas A. Warner III, and John F. Welch, Jr.
Your shares will not be voted unless your signed Proxy Form is returned or
you otherwise vote at the meeting.
Please mark your vote and sign on the reverse side and return promptly to:
Inspectors of Election, Post Office Box 9110, Farmingdale, NY 11735-9541.
<PAGE>
41
GE PROXY FORM
The Board of Directors recommends a vote FOR the proposals relating to:
(A) ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
FOR WITHHOLD __________________________________________
<S> <C> <S> <C> <S>
all nominees listed on the / / authority to vote for all nominees on / / (INSTRUCTIONS: To withhold authority to
reverse side (except as the reverse side vote for any individual nominee, write
marked to the contrary to the that nominee's name on the line provided
right) above.)
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(B) KPMG Peat Marwick LLP as / / / / / /
Independent Auditors
The Board of Directors recommends a vote AGAINST the share owner proposals relating to:
<CAPTION>
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
<S> <C> <C> <C> <S> <C> <C> <C>
(1) Prior Government Service / / / / / / (4) NBC Programming / / / / / /
(2) GE's Nuclear Power Business / / / / / / (5) Maquiladoras / / / / / /
(3) Radioactive Waste and / / / / / / (6) Community Reinvestment at / / / / / /
Decommissioning GE Capital
</TABLE>
If you wish to include any comments, please mark this box and then write
your comments on the reverse side of this form -> / /
PLEASE MARK ALL /X/
CHOICES CLEARLY
Please sign as registered. Executors,
trustees and others signing in a
representative capacity should include
their names and the capacity in which
they sign.
SIGNATURE ___________________________________ DATE___________________
SIGNATURE ___________________________________ DATE___________________
<PAGE>
42
General Electric Company
3135 Easton Turnpike,
Fairfield, CT 06431
April 5, 1995
Dear Share Owner:
We have not, as yet, received your proxy for GE's Annual Meeting
of Share Owners to be held on April 26.
I sincerely believe that as a share owner you will want to have
your shares represented and voted the way you wish at the meeting.
Accordingly, we are enclosing a duplicate proxy statement and proxy form.
If you've just recently mailed back your original proxy, you needn't send
another. If, however, that is not the case, please complete, sign and mail
this form as soon as possible. By doing so, you can be sure your shares
will be represented at the meeting whether or not you plan to attend.
Cordially,
/s/ John F. Welch, Jr.
Chairman of the Board
<PAGE>
43
Differences between the Proxy Materials
Proposed for Circulation
and the Materials in Electronic Format
A. PROXY STATEMENT
All headings in the Proxy Statement are in boldface large and small caps
and are represented in the EDGAR document by all caps.
The cover pages of the circulated document, the table of contents and
the pages of the form of proxy and reminder letter are not numbered.
Page 1 is the front cover of the Proxy Statement. The top of the page
has the General Electric monogram. The space above John F. Welch, Jr.'s
name holds his signature. All other words on this page are in italics.
On the table of contents (page 2) and throughout the Proxy Statement,
solid boxes are represented by asterisks in the EDGAR document, and the
words on page 2 "Every Share Owner's Vote Is Important Please Complete,
Sign, Date and Return your Proxy Vote" are in large and small caps. A
recycling logo precedes the words "Printed on recycled paper using
soybean ink."
On pages 5-9 there are black and white photographs of each director or
nominee adjacent to the respective biography. The first sentence of each
biography, stating name, age, current employment and date of first
service, is in boldface upper and lower case.
Pages 20-21 (the summary compensation table) are facing pages in the
centerfold of the proxy statement.
On pages 22 and 23, the data points are used to create line graphs, and
the words "Comparison of Five-Year Cumulative Total Return Among GE, S&P
500, Dow Jones Industrial Average (DJIA) and S&P Electrical Equipment
Group" and "Comparison of Thirteen-Year Cumulative Total Return Among
GE, S&P 500, Dow Jones Industrial Average (DJIA) and S&P Electrical
Equipment Group" are in boldface upper and lower case.
Page 39 is the back cover of the Proxy Statement. On that page the
words "cut off at dotted line" are centered and above dotted lines. The
words "1995 Annual Meeting of Share Owners" and "Advance Registration
Form" and the time and location of the annual meeting are in boldface.
B. PROXY CARD
The language on pages 40 and 41, comprising the form of proxy, is
printed, one page each, on observe sides of a white card with dimensions
of approximately 7 3/4" x 5 l/4". The language is printed so that it
reads with the card's longest dimension held horizontally.
At the top of pages 40 and 41 there is a gray stripe. A General
Electric monogram appears at the left edge of this stripe, and the words
"GE Proxy Form" appear towards the right edge.
On page 40, the space on the bottom left is held blank to contain the
name(s) and address of the share owner(s). The sentences:
(i) "Returned proxy forms will be voted: (1) as specified on matters
listed on the reverse side of this form; (2) in accordance with the
Directors' recommendations where a choice is not specified; and (3) in
accordance with the judgment of the proxies on any other matters that
may properly come before the meeting"
and
(ii) "Your shares will not be voted unless your signed Proxy Form is
returned or you otherwise vote at the meeting";
and the language at the top of the page
"Proxy Solicited on Behalf of Board of Directors for the Annual Meeting
of Share Owners, April 26, 1995"
are all in bold face.
On page 41, space beneath the grey bar is held blank for an account
number and a control number. The phrase "The Board of Directors
recommends a vote FOR the proposals relating to" is bold. An unbroken
line encloses, in a rectangle, the items so referenced and this phrase.
Similarly the phrase "The Board of Directors recommends a vote AGAINST
the share owner proposals relating to" is bold, and an unbroken line
encloses, in a rectangle, the items so referenced and this phrase.
Empty boxes are positioned opposite each item to be voted on, one each
below the words "FOR" or "VOTE WITHHELD" or "FOR" or "AGAINST" or
"ABSTAIN" respectively.
C. REMINDER LETTER
Page 42 is a form of letter from John F. Welch, Jr. dated April 5, 1995
sent to share owners who have not returned their proxies by that date.
This letter is printed on the top portion of Mr. Welch's stationery (8
1/2" x 11") and contains his signature. The bottom portion of his
stationery will be a duplicate proxy card as shown on pages 40 and 41.
The two sections of this letter will be perforated so the card can be
separated and mailed back.
