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TO BE VOTED ON AT THE MEETING
Shareowner Proposal No. 13
The New York City Police
Pension Fund and the New York City Fire Department Pension Fund, 1 Center
Street, New York, NY 10007-2341, have notified us that they intend to submit
the following proposal at this year's meeting:
“Whereas, since
the 2001 terrorist attacks against the United States, there has been increased
interest among investors and the general public concerning corporate ties to
states that reportedly sponsor terrorist activity, and
“Whereas, U.S.
law currently prohibits American companies from doing business in states
designated as 'sponsors of terrorism' by the U.S. State Department, and
“Whereas,
General Electric conducts business operations with the Iranian government
through its Canadian subsidiary General Electric Hydro,
“Therefore, be
it resolved that shareholders request that the Board of Directors establish a
committee of the Board to review General Electric’s operations in Iran
with a particular reference to potential financial and reputational risks
incurred by the company by such operations, and
“Be it further
resolved that shareholders request that this review committee report to
shareholders on its findings no later than September 2003. This report should
be produced at reasonable cost and contain no proprietary information.
“Supporting
Statement: According to the U.S. State Department, the Iranian government has
actively supported and funded terrorist operations against innocent civilians
outside its own borders. These activities led to the imposition of government
sanctions barring U.S. companies from operating in Iran. General
Electric’s use of its Canadian subsidiary to conduct business with the
Iranian government violates the spirit of the law. It also exposes the company
to the prospect of negative publicity, public protests, and a loss of consumer
confidence, all of which can have a negative impact on shareholder value.
“In 2001, the
Securities and Exchange Commission stated that a company’s involvement
with states that sponsor terrorism is a legitimate shareholder ‘concern
substantially likely to be significant to a reasonable investors decision about
whether to invest in that company’.
“The New York City Police and Fire Department Pension Funds urge
you to vote FOR this resolution.”
Our board of directors recommends a vote against this proposal.
We are compliant with
U.S. law and regulations which recognize that foreign subsidiaries of U.S.
companies can and will do business in Iran and which provide clear guidance on
how these activities are to be conducted. U.S. law also provides for licenses
to sell medical products into Iran when U.S. content, U.S. origin products or
U.S. personnel are involved. Our Canadian subsidiary, GE Hydro, a business that
manufactures world class hydropower equipment for projects all over the world,
has contracted to engineer, design and manufacture hydroelectric generators for
a hydro power plant in Iran. The project is being supported through financing
arranged by Canadian export agencies in cooperation with the Canadian
government and in full compliance with Canadian and U.S. law.
GE Medical Systems
Europe sells limited products in Iran including medical imaging and other
diagnostic devices, such as MRIs, ultrasound and X-ray equipment. One of our
subsidiaries in Italy, Nuovo Pignone, provides certain oil and gas field and
pipeline equipment in Iran, such as compressors and gas turbines. GE strictly
adheres to U.S. government decisions and guidelines about whether and how to
sell to Iran. Because all of these sales are made in compliance with U.S. law,
we believe the review requested by the proposal is unnecessary, and therefore
recommend a vote against the proposal.
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