General Electric

Create an Independent Board of Directors

THE MAJORITY OF DIRECTORS TO BE INDEPENDENT

To enhance shareholder value General Electric shareholders recommend increased independence for our directors. This proposal recommends a majority of directors on the full board be independent, for instance a 60% majority.

The standard of independence is the standard in the Council of Institutional
Investors: "A director is deemed independent if his or her only non-trivial professional, familial or financial connection to the corporation or its CEO is his or her directorship."

This proposal is requested to be implemented as quickly as possible as openings occur on the board. The independent directors alone would decide whether implementation is proceeding as quickly as possible. Also, require that any future action on this topic be put to shareholder vote - as a separate proposal.

This proposal topic won a significant 31% of the yes-no votes in 2001

GE has a serious lack of independent directors. The majority of the board is made up of:

• Current employees
• Former employees
• Directors who collect legal and financial service fees from GE

According to an independent analysis of the 2001 GE proxy:

• 63% of the full GE Board is not independent.

"At least two-thirds of a corporation's directors should be independent," according to the Council of Institutional Investors. Institutional shareholders own a majority of GE stock.

Furthermore:

• 50% of the Nominating Committee is not independent.
• 50% of the Audit Committee is not independent.
• 50% of the Compensation Committee is not independent.

"All members of these committees should be independent," according to the Council of Institutional Investors.

The independence of directors is of greater importance at GE since:

1) A director pension plan could further compromise the independence of GE
directors. All the directors who joined the Board before 2001 continue to participate in a generous pension plan. Many large companies have eliminated pensions for all directors. Director pensions can align directors with management in contrast to the interests of all shareholders.

2) Three of the 7 independent directors, on a board of 19, have long tenure which can impact their independence:

• Ms. Michelson 26 years
• Mr. Rhodes 18 years
• Mr. Sigler 18 years

What incentive is there for good corporate governance - highlighted by increased director independence?

A survey by McKinsey & Co., international management consultant, shows that institutional investors are prepared to pay an 18% premium for good corporate governance (Wall Street Journal, June 19, 2000).

In the interest of shareholder value and independent oversight of our company vote yes:
THE MAJORITY OF DIRECTORS TO BE INDEPENDENT. YES ON 4.

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