Share Owner Proposal No. 5
John Chevedden, on behalf of Mr. Chris Rossi, P. O. Box 249, Boonville, CA 94545, has
notified GE that he intends to submit the following proposal at this year's meeting:
"Shareholders request that our Board of Directors seek shareholder approval
prior to adopting any poison pill and also redeem or terminate any pill now in effect unless it
has been approved by a shareholder vote at the next shareholder meeting.
"The poison pill is an important issue for shareholder vote even if our company does not now
have a poison pill or plan to adopt a poison pill in the future. Currently our board can adopt
a poison pill and or redeem a current poison pill and adopt a new poison pill: 1) at any time;
2) in a short period of time; 3) without shareholder approval.
"Negative Effects of Poison Pills on Shareholder Value: A study by the Securities
and Exchange Commission found evidence that the negative effect of poison pills to deter profitable
takeover bids outweigh benefits. Source: Office of the Chief Economist, Securities and Exchange
Commission, The Effect of Poison Pills on the Wealth of Target Shareholders, October 23, 1986.
"Additional Support for this Proposal Topic: Pills adversely affect shareholder value. Power and
Accountability, Nell Minow and Robert Monks, source:
www.thecorporatelibrary.com/power. The Council of Institutional Investors,
www.ciiorg.com/ciicentral/policies.htm &
www.cii.org, recommends shareholder approval of all poison pills.
"Institutional Investor Support for Shareholder Vote: Many Institutional
investors believe poison pills should be voted on by shareholders. A poison pill can insulate
management at the expense of shareholders. A poison pill is such a powerful tool that shareholders
should be able to vote on whether it is appropriate. We believe a shareholder vote on poison
pills will avoid an unbalanced concentration of power in our directors who could focus on
narrow interests at the expense of the vast majority of shareholders.
"Institutional Investor Support Is High-Caliber Support: This proposal topic
has significant institutional support. Shareholder right to vote on poison pill resolutions
achieved a 57% average yes-vote from shareholders at 26 major companies in 2000 (Percentage
based on yes-no votes). Institutional investor support is high-caliber support. Institutional
investors have the advantage of a specialized staff and resources, long-term focus, fiduciary
duty and independent perspective to thoroughly study the issues involved in this proposal topic.
"Shareholder Vote Precedent Set by Other Companies: In recent years, various
companies have been willing to redeem poison pills or at least allow shareholders to have a
meaningful vote on whether a poison pill should remain in force. We believe that our company
should do so as well.
"68% Vote at a Major Company: This proposal topic won 68% of the yes-no vote
at the Burlington Northern Santa Fe (BNI) 2001 annual meeting. The text of
the BNI proposal which has further information on poison pills, is available
at The Corporate Library website: www.thecorporatelibrary.com. At this URL
page:
http://asp.thecorporatelibrary.net/proposals/FullText.asp?Company_ID=10563&R
esolution_ID=515&Proxy_Season=2001 *
"In the interest of shareholder value vote YES: shareholder vote on
poison pills. YES on 5."
Your Board of Directors recommends a vote AGAINST this proposal.
In this proposal, the term "poison pill" refers to the type of shareholder
rights plan that some companies adopt to make a hostile takeover of the company more difficult.
GE does not have a poison pill; GE has never had a poison pill; and your Board has no intention
of adopting a poison pill. The proposal requests that the Board seek shareholder approval prior
to adopting any poison pill. Because a hostile takeover of a company the size of GE is unrealistic,
and because your Board has no intention of adopting a poison pill, your Board recommends a vote
against this proposal.
(*As provided by share owner.)
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