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As discussed in the
Compensation Committee Report beginning on page 19, stock options were granted
in 2002 as incentives for superior performance that should create long-term
shareowner value. Each stock option permits the employee, generally for a
period of ten years, to purchase one share of GE stock from the company at the
market price of GE stock on the date of grant.
 The tables on the next
page provide information on stock options granted last year, and on previously
granted stock options and stock appreciation rights (SARs) exercised by the
five most highly paid executive officers during 2002, as well as information on
their SAR and stock option holdings at the end of 2002. SARs expire ten years
after the date of grant and 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 our stock on the date of grant) and the
highest closing price of our 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.
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