Company Name: General Electric Co.
Public Availability Date: January 29, 1999
Document Sections:
LETTER OF INQUIRY 1
APPENDIX
LETTER OF INQUIRY 2
LETTER OF INQUIRY 3
APPENDIX
STAFF REPLY LETTER
[LETTER OF INQUIRY 1]
December 21, 1998
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, D. C. 20549
Re: Omission of Share Owner Proposal by GE Stockholders' Alliance
Gentlemen and Ladies:
This letter is to inform you, pursuant to Rule 14a-8(j) under the Securities
Exchange Act of 1934 ("Exchange Act"), that General Electric Company ("GE")
intends to omit from its proxy statement for its 1999 Annual Meeting the
following resolution and its supporting statement ("Proposal") which it received
from Ms. Patricia T. Birnie, as Chair of the GE Stockholders' Alliance:
"RESOLVED: that the Shareholders request Management to prepare a report for
Shareholders within four months, to examine: (1) the feasibility of implementing
the phased withdrawal of GE from the promotion and production of new nuclear
power reactors, and (2) the expedited decommissioning of the GE reactors
currently on line. That report should include an evaluation of the ethical,
economic, environmental, national security, nuclear weapons proliferation and
public health impacts from GE's participation in nuclear power."
A copy of the Proposal is attached.
It is GE's opinion that the Proposal is excludable pursuant to Rule
14a-8(i)(12)(ii) because the Proposal deals with substantially the same subject
matter (participation in the nuclear power business) as a proposal submitted by
Ms. Birnie and included in GE's 1995 and 1996 proxy statements, which proposal
received less than 6% of the vote at the 1996 Annual Meeting of Share Owners.
I enclose herewith as Annex A extracts from GE's proxy statements for the 1995
and 1996 Annual Meetings of Share Owners, setting forth the proposal submitted
by Ms. Birnie, for those proxy statements, and an extract from GE 10-Q filed on
August 14, 1996 showing that Ms. Birnie's 1996 proposal received less than 4% of
the vote at the 1996 meeting.
Rule 14a-8(c)(12)(ii) provides that a proposal may be omitted from a company's
proxy statement if it "deals with substantially the same subject matter" as
another proposal previously included in a company's proxy materials within the
preceding five years, provided that if at the time of its second submission to a
vote it received less that 6% of the vote. In order to be excluded under Rule
14a-(c)(12), a later proposal need not be identical to a prior proposal. It is
enough that the thrust and direction of both be the same.
The thrust and direction of both the Proposal and Ms. Birnie's prior proposal is
to have GE withdraw from the nuclear power business. The Proposal seeks a
feasibility study for withdrawal and a plan to expedite decommissioning nuclear
power plants currently on line. The prior proposal asks GE to assist customers
of its nuclear reactors to close their nuclear operations and halt development
of future reactors. The supporting statements of both proposals suggest that GE
instead promote the sale of other power services, such as GE's gas combined
cycle units. The aim of both proposals is the same, to end GE's participation in
the nuclear power business.
In numerous recent letters, the Staff of the Division of Corporation Finance has
concurred in the exclusion of a shareholder proposal on the grounds that it
dealt with substantially the same subject matter of a prior proposal which had
failed to reach its resubmission threshold, if the two proposals have similar
substantial concerns and aims, notwithstanding differences in specific language
or corporate action proposed. See Eastman Chemical Company (February 9,
1998)(proposal requesting company to cease manufacturing cigarette filters deals
with substantially the same subject matter (production of products used in
cigarette business) as prior proposal seeking divestiture of product line);
Eastman Chemical Company (February 28, 1997)(proposal seeking report on legal
matters related to supply of raw material products to tobacco companies deals
with substantially the same subject matter (production of products used in
cigarettes) as prior proposal requesting divestiture of product line); Great
Lakes Chemical Corporation (February 22, 1996) (proposal requesting a report on
various aspects of methyl bromide production, including management studies,
risk-benefit analysis, and related litigation, deals with substantially the same
subject matter (methyl bromide production) as prior proposals seeking cessation
of methyl bromide production).
Accordingly, because the Proposal has the similar aim and concern, GE's
withdrawal from the nuclear power business, as the proposal submitted by Ms.
Birnie in 1995 and 1996 which received less than 4% at its second submission,
the proposal is excludable under Rule 14a-8(ii)(12)(ii).
***
Five additional copies of this letter and the attachments are enclosed pursuant
to Rule 14a-8(j) under the Exchange Act. By copy of this letter, GE
Stockholders' Alliance is being notified that GE does not intend to include the
proposal in its 1999 proxy statement.
If you have any questions, please feel free to call me at (203) 373-2442.
Very truly yours,
Eliza W. Fraser
Enclosures
cc: Carolyn Sherman
Special Counsel
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
GE Stockholders' Alliance
Patricia T. Birnie, Chair
5349 W. Bar X Street
Tucson, AZ 85713-6402
Amasa B. Ford, M.D.
45001 Mather Lane
Chagrin Falls, Ohio 44022
Arthur Milholland, M.D. and
Lucille Ann Mostello, M.D.
2220 Blue Valley Dr.
Silver Spring, MD 20904-5260
Faith Adams Young
1004 Dixon Springs Hwy.
Dixon Springs, TN 37057
Leo A. Drey
721 Olive St.Room 1016
St. Louis, Missouri 63101
Allen P. Lovejoy
7500 N. Calle Sin Envidia
#8208
Tucson, Arizona 85718
[APPENDIX]
[EXHIBIT]
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 half
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 ruclear
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 continueknowing
that no safe solution or location exists for any of itis 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."
31 TEXT OF 1995 & 1996 PROPOSALS ARE IDENTICAL
[LETTER OF INQUIRY 2]
December 26, 1998
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: GE's attempt to omit Proposal by GE Stockholders' Alliance
To SEC Officials:
I received a letter, dated December 21, 1998, informing me that GE considers our
1999 Proposal "Report to Assess GE's Role in Nuclear Power" excludable because
they claim it deals with substantially the same subject matter as a proposal
(copy enclosed) submitted in 1995 and re-submitted in 1996.
The two proposals are clearly very different in subject matter.
The earlier one advocates the use of GE's nuclear engineers to resolve the
problem of radioactive waste isolation and develop technology for
decommissioning all reactors and nuclear fuel cycle facilities. This is
obviously recommending a good business opportunity since there already is a
great need for these services. (See Exhibit A for full text).
From 1995 & 1996 Proposal: "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."
This earlier proposal deals entirely with the growing problem and hazards of
radioactive waste. Nowhere in the proposal does it refer to asking GE to assist
customers of its nuclear reactors to close their nuclear operations and halt
development of future reactors (as claimed by Ms. Fraser's letter of December
21, 1998). Nor does its supporting statement promote the sale of other power
services, such as GE's gas combined cycle units (as claimed by Ms. Fraser's
letter).
The new proposal requests a report to shareholders examining the feasibility of
GE's phased withdrawal from production and promotion of new nuclear power
reactors, and the expedited decommissioning of those GE reactors now on line.
(See Exhibit B for full text).
From 1999 Proposal: "Therefore be it resolved that Shareholders request
Management to prepare a report for Shareholders within four months, to examine:
(1) the feasibility of implementing the phased withdrawal of GE from the
promotion and production of new nuclear power reactors, and (2) the expedited
decommissioning of the GE reactors currently on line. That report should include
an evaluation of the ethical, economic, environmental, national security,
nuclear weapons proliferation and public health impacts from GE's participation
in nuclear power."
These two proposals are clearly two separate subjects.
On December 15 GE's Associate Corporate Counsel Eliza Fraser phoned me. She
explained that GE had received 20 stockholder proposals, and that this number
was too great for all to be placed on the meeting agenda. Since there were other
proposals submitted dealing with the environment, she asked if I would withdraw
the one I had submitted (now for the third year), and those co-filers could be
added to the new proposal (on nuclear power) submitted by the GE Stockholders'
Alliance. When I said I didn't want to drop the environmental proposal, she said
she would then file an action with the SEC with intentions to exclude the
nuclear power proposal on the basis of its dealing with substantially the same
subject matter as a previous recent proposal. I asked for her clarification, and
she reiterated that she would allow the new nuclear power proposal to be
included if I would withdraw the environment proposal. To me this is a device
intended to pressure me, and convinces me that she does not believe that the new
nuclear power proposal is, indeed, excludable.
In conclusion, I urge your ruling that our proposal, "Report to Assess GE's Role
in Nuclear Power" cannot be excluded because it violates Rule 14a-8(i)(12)(ii)
since it does not deal with substantially the same subject matter (participation
in the nuclear power business) as the referred-to proposal submitted by Patricia
Birnie in 1995 and 1996 (radioactive waste isolation).
Note: I could not find SEC rules 14a-8(c)(12)(ii), 14a-(c)(12), nor
14a-8(ii)(12)(ii) which were referred to in Ms Fraser's letter, pages 2, 2 and
3. Perhaps the Division could send me a copy of your rules that are more
complete than I can find on your web site, or the proper web site on which I can
find them.
Five additional copies of this letter and enclosures are included in this
mailing, for your staff's review, as required by SEC Rule 14a-8(k).
Thank you for your careful review and concurrence with our position.
Sincerely,
Patricia Birnie, Chair
Enclosures
cc: Liza W. Fraser, Associate Corporate Counsel, General Electric Company
[LETTER OF INQUIRY 3]
December 21, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Filing Section
Re: GE Shareholder Proposals: Nine No Action Letter Requests
I enclose herewith seven copies of the nine No Action Letter requests that we
are submitting to the Division of Corporation Finance. The first enclosure is a
complete set of all nine letters, each of which is stamped "Acknowledgement
Copy". I would appreciate it if you could have these date stamped and returned
to me. The additional sets each contain and original and five copies of one of
the No Action Letters, so that you may distribute them as needed within your
organization.
As of November 13, 1998, GE had received 19 shareowner proposals, and currently
expects to include several of them in its 1999 proxy statement. We expect to
file GE's definitive proxy material with the Securities and Exchange Commission
on or about March 13, 1999, the date on which GE currently expects to begin
mailing the proxy statement to its share owners. In order to meet printing and
distribution requirements, GE intends to start printing the proxy statement on
or about February 27, 1999. GE's Annual Meeting is scheduled to be held on April
21, 1999. In light of this schedule, we would greatly appreciate the Staff's
response to our requests at your earliest convenience.
If you have any questions or suggestions, please feel free to contact me or Liza
Fraser. We would be pleased to do whatever we can to facilitate your review of
these letters. Thank you very much.
Very truly yours,
cc: Carolyn Sherman, Special Counsel
Office of Chief Counsel
Division of Corporation Finance
Ms. Sherman: For your convenience, next week we will forward a complete set of
the precedent that we cite in our requests.
[APPENDIX]
November 5, 1998
Mr. Benjamin W. Heineman, Jr., Secretary
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431
Dear Mr. Heineman:
The GE Stockholders' Alliance is an owner of 25.33 shares of General Electric
stock. The enclosed document verifies our ownership.
The GE Stockholders' Alliance hereby notifies you of its intention [text
redacted] the enclosed proposal [text illegible] for consideration and action by
the stockholders at the 1999 Annual Meeting, and for inclusion in the Company's
proxy statement, in accordance with rule 14-a-8 of the General Rules and
Regulations of the Securities and Exchange Act of 1934.
Sincerely,
Patricia T. Birnie, Chair
Enclosure
cc: Securities & Exchange Commission
[STAFF REPLY LETTER]
January 29, 1999
Response of the Office of Chief Counsel
Division of Corporation Finance
Re: General Electric Company
Incoming letter dated December 21, 1998
The proposal requests a report examining the feasibility of General Electric's
withdrawal from the promotion and production of new nuclear power reactors and
the decommissioning of General Electric's reactors currently on line.
There appears to be some basis for your view that General Electric may exclude
the proposal under rule 14a-8(i)(12)(ii). We note in particular that the
proposals submitted to votes in 1995 and 1996, when viewed together with their
supporting statements, appear to focus on decommissioning reactors and halting
General Electric's promotion of nuclear power. Accordingly, we will not
recommend enforcement action to the Commission if General Electric omits the
proposal from its proxy materials in reliance on that rule.
Sincerely,
Theresa Regan
Attorney Advisor
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