Company Name: General Electric Co. (Rocheleau)
Public Availability Date: January 9, 2008
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
STAFF REPLY LETTER
[INQUIRY LETTER]
December 7, 2007
Direct Dial (202) 955-8671
Fax No. (202) 530-9569
Client No. C 32016-00092
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareowner Proposals of Dennis W. Rocheleau Exchange Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that our client, General Electric Company ("GE"),
intends to omit from its proxy statement and form of proxy for its 2008 Annual
Shareowners Meeting (collectively, the "2008 Proxy Materials") two shareowner
proposals captioned "AFA" and "AFB" (collectively, the "Proposals") initially
submitted by Dennis W. Rocheleau (the "Proponent") and subsequently resubmitted
by him through his daughters, Lauren M. Rocheleau and Shana R. Rocheleau
(together, the "Nominal Proponents").
Pursuant to Rule 14a-8(j), we have:
enclosed herewith six (6) copies of this letter and its attachments;
filed this letter with the Securities and Exchange Commission (the
"Commission") no later than eighty (80) calendar days before GE intends to file
its definitive 2008 Proxy Materials with the Commission; and
concurrently sent copies of this correspondence to the Proponent and the
Nominal Proponents.
Rule 14a-8(k) provides that shareowner proponents are required to send companies
a copy of any correspondence that the proponents elect to submit to the
Commission or the staff of the Division of Corporation Finance (the "Staff").
Accordingly, we are taking this opportunity to inform the Proponent that if he
elects to submit additional correspondence to the Commission or the Staff with
respect to the Proposals, a copy of that correspondence should concurrently be
furnished to the undersigned on behalf of GE pursuant to Rule 14a-8(k).
BASES FOR EXCLUSION
We believe that both Proposals may properly be excluded from the 2008 Proxy
Materials pursuant to:
Rule 14a-8(c) because the Proponent has exceeded the one-proposal limitation;
and
Rule 14a-8(i)(8) because the Proposals relate to the election of a director.
Copies of the Proposals and their supporting statements, as well as related
correspondence from the Proponent, are attached to this letter as Exhibit A. On
behalf of our client, we hereby respectfully request that the Staff concur in
our view that the Proposals may be excluded from the 2008 Proxy Materials for
the reasons set forth below.
ANALYSIS
I. The Proposals May Be Excluded under Rule 14a-8(c) Because the Proponent Has
Exceeded the One-Proposal Limitation.
A. Background.
On September 21, 2007, GE received a letter from the Proponent, dated September
21, 2007, containing two shareowner proposals, entitled "AFA" and "AFB," for
inclusion in the 2008 Proxy Materials. The Proponent's submission contained
several procedural deficiencies: (i) he did not provide verification of his
ownership of the requisite number of GE shares; (ii) he did not state his
intention to hold such shares through the date of the 2008 Annual Meeting; and
(iii) he submitted two proposals for consideration at the 2008 Annual Meeting.
Thus, in a letter dated October 4, 2007, which was sent within 14 days of the
date GE received the Proposals, GE timely provided the Proponent with a notice
of deficiencies as required by Rule 14a-8(f) (the "Deficiency Notice"). In the
Deficiency Notice, attached hereto as Exhibit B, GE informed the Proponent of
the requirements of Rule 14a-8 and how he could cure the procedural
deficiencies, including that he was limited to the submission of one shareowner
proposal for consideration at the 2008 Annual Meeting pursuant to Rule 14a-8(c).
The Deficiency Notice also included a copy of Rule 14a-8. See Exhibit B.
By letter dated October 11, 2007, and received by GE on October 15, 2007, the
Proponent responded to the Deficiency Notice (the "Proponent's Response"), a
copy of which is attached hereto as Exhibit C. In the Proponent's Response, the
Proponent stated that he would not be able to meet the ownership requirements of
Rule 14a-8(b) in order to be eligible to submit a shareowner proposal for the
2008 Annual Meeting, noting that:
"With respect to I. Share Ownership Deficiency, I cannot cure the defect in
time, but will meet the standard for 2009 inasmuch as I purchased more shares
today."
In addition, the Proponent's Response included the following statements with
regard to the number of shareowner proposals he submitted:
"In light of II. Multiple Proposals, I will withdraw `AFB' and have my daughter,
Lauren, file "AFA". You can expect `AFB' next year unless my other daughter,
Shana, also holds sufficient GE shares."
In a letter dated October 14, 2007 (which was received by GE on October 16,
2007), Lauren Rocheleau submitted a shareowner proposal and supporting statement
entitled "AFA" that is identical to the proposal and supporting statement
submitted by the Proponent, also entitled "AFA." See Exhibit D. By letter dated
October 23, 2007 (which was received by GE on October 25, 2007), Shana Rocheleau
submitted a shareowner proposal and supporting statement entitled "AFB" that is
identical to the proposal and supporting statement submitted by the Proponent,
also entitled "AFB." See Exhibit E. The submissions by Lauren Rocheleau and
Shana Rocheleau both provide that the Proponenttheir fatheris the designated
representative with respect to the Proposals.
B. Rule 14a-8(c)The "One-Proposal" Limitation.
Both Proposals may be excluded from the 2008 Proxy Materials by reason of Rule
14a-8(c), which permits each shareowner no more than one proposal for each
shareowner meeting. In adopting the predecessor to Rule 14a-8(c) (Rule
14a-8(a)(4)), the Commission noted its awareness of the "possibility that some
proponents may attempt to evade the rule's limitations through various
maneuvers...." Exchange Act Release No. 12999 (Nov. 22, 1976). The Commission
went on to note that "such tactics" would result in "the granting of request[s]
by the affected managements for a `no action' letter concerning the omission
from their proxy materials of the proposals at issue." Id. In cases where a
shareowner has submitted multiple proposals and then has had family members,
friends or other associates submit the same or similar proposals shortly after
being notified of the one proposal rule, the Staff repeatedly has concurred that
such tactics will entitle the company to no-action relief in reliance on Rule
14a-8(c). See, e.g., Staten Island Bancorp, Inc. (avail. Feb. 27, 2002)
(concurring in the exclusion under Rule 14a-8(c) of five shareowner proposals,
all of which were initially submitted by one proponent, and when notified of the
one-proposal rule, the proponent, a daughter, close friends and neighbors
resubmitted similar and in some cases identical proposals); Spartan Motors, Inc.
(avail. Mar. 12, 2001) (permitting the omission of two proposals under Rule
14a-8(c) that were initially submitted by the proponent where, after he was made
aware of the one-proposal rule, two identical proposals were resubmitted under
his name and his wife's name); Dominion Resources, Inc. (avail. Feb. 24, 1993)
(concurring under the predecessor to Rule 14a-8(c) in the exclusion of three
shareowner proposals that were initially submitted by one shareowner and when he
was notified by the company of the one-proposal limitation, the shareowner had
two identical proposals, each created on the same typewriter or word processor
and each sent certified mail with consecutive serial numbers, nominally
submitted by two different individuals).
Moreover, the Staff has interpreted Rule 14a-8(c) to permit exclusion of all of
a group of multiple proposals submitted by related parties when circumstances
show that the nominal proponents "are acting on behalf of, under the control of,
or alter ego of the [proponent]." Weyerhaeuser Co. (avail. Dec. 20, 1995). For
instance, in International Business Machines Corp. (avail. Jan. 26, 1998), a
shareowner proponent submitted four proposals, and after the company notified
him of the one-proposal rule, the proponent resubmitted one proposal and then
had his wife, his son and his daughter resubmit the other three identical
proposals in their own names. The Staff permitted the exclusion of all four
proposals for exceeding the one-proposal limitation under the predecessor to
Rule 14a-8(c), concurring in the company's argument that the proponent's wife,
son and daughter were simply nominal proponents. Similarly, in Banc One Corp.
(avail. Feb. 2, 1993), the Staff concurred in the exclusion of three shareowner
proposals under the predecessor to Rule 14a-8(c), because although the proposals
were submitted by three different proponents, it was clear that two of the
proponents were only nominal proponents for the original proponent. The company
based its argument on the fact that the original proponent stated in a letter to
the company that he had "arranged for other qualified shareholders to serve as
proponents of three shareholder proposals which we intend to lay before the 1993
Annual Meeting." In the same letter, the proponent named one of the nominal
proponents and indicated that he was still finalizing the text of the proposal
of one of these nominal proponents. See also BankAmerica Corp. (avail. Feb. 8,
1996) (concurring in the exclusion of two shareowner proposals, in reliance on
Rule 14a-8(c)one submitted as president of a corporation and the other as
custodian of a minornoting that nominal proponents were "acting on behalf of,
under the control of, or as the alter ego of [the proponent]"); Occidental
Petroleum Corp. (avail. Mar. 27, 1984) (permitting the exclusion of three
proposals where the shareowner proponent "attempted to evade the one proposal
limitation ... by having additional proposals submitted by other nominal
proponents" after being notified of the one-proposal limitation by the company
and having failed to reduce the number of proposals). This is precisely what the
Proponent has done, as set forth in more detail below, by having his two
daughters submit the Proposals after he was notified of the one-proposal
limitation. As such, the Nominal Proponents have acted on his behalf, and under
his control, in submitting the Proposals in violation of Rule 14a-8(c).
The Proponent was notified in the Deficiency Notice of the one-proposal
limitation, and was given the opportunity to withdraw one proposal.
Nevertheless, the Proponent had the Nominal Proponents resubmit the Proposals,
both of whom designated the Proponent as their representative with respect to
the Proposals. The Proponent clearly is attempting to evade the rule's
limitations through this maneuver. Following receipt of the Deficiency Notice,
the Proponent stated that "I will have my daughter file AFA" and that he would
have his other daughter submit "AFB" if she owned sufficient shares. That, in
fact, is exactly what then happened: the Proponent arranged for others to submit
the exact same Proposals, in order to do what he knew he was not permitted to do
himself under the Commission's regulations. As further evidence of the
Proponent's control or influence over the Nominal Proponents, we note that:
(i) the Proposals and supporting statements submitted by the Nominal Proponents
are identical to the Proposals and supporting statements initially submitted by
the Proponent;
(ii) one of the Nominal Proponents entitled one of the Proposals "AFA" and the
other Nominal Proponent entitled the other Proposal "AFB," the exact same
captions that the Proponent had used for the Proposals;
(iii) the Nominal Proponents are both daughters of the Proponent; and
(iv) Proposals submitted by the Proponent and the Nominal Proponents are in
exactly the same format and font.
In short, it is clear from the documents and the facts that the Nominal
Proponents are acting under the Proponent's direction and on his behalf in order
to circumvent the one-proposal limit in Rule 14a-8(c). Moreover, the Proponent
is not eligible to submit even one shareowner proposal for the 2008 Annual
Meeting, because, by his own admission, he does not meet the share ownership
requirements of Rule 14a-8(b). As noted in the Proponent's Response, he "cannot
cure the [ownership] defect in time...." Thus, based on the language set forth
by the Commission in Exchange Act Release No. 12999, specifically that "such
tactics" and "maneuvers" will result in the granting of no-action relief
concerning the omission of the proposals at issue and based on the no-action
letter precedent cited above, we believe that both of the Proposals are
excludable in reliance on Rule 14a-8(c) for exceeding the one-proposal
limitation.
II. The Proposals May Be Excluded Under Rule 14a-8(i)(8) Because the Proposals
Relate to the Election of Directors.
A. BackgroundRule 14a-8(i)(8) and GE's Board of Directors.
We believe that the Proposals also are excludable pursuant to Rule 14a-8(i)(8),
which permits the exclusion of shareowner proposals "relat[ing] to an election
for membership on a company's board of directors or analogous governing body."
The purpose of the exclusion is to ensure that the shareowner proposal process
is not used to circumvent more elaborate rules governing election contests. The
Commission has stated, "the principal purpose of this provision is to make
clear, with respect to corporate elections, that Rule 14a-8 is not the proper
means for conducting campaigns or effecting reforms in elections ... since other
proxy rules ... are applicable thereto." Exchange Act Release No. 12598 (July 7,
1976).
As evidenced by the language of the Proposals, their supporting statements and
the cover letter under which the Proposals were submitted by the Proponent, both
Proposals target Ann Fudge, a current member of GE's Board of Directors (the
"Board"), whom GE expects the Board to nominate for reelection at the 2008
Annual Meeting of Shareowners. Thus, "AFA" undoubtedly is intended to be "Ann
Fudge proposal A" and "AFB" is intended to be "Ann Fudge proposal B." The
supporting statement of AFA specifically states that it is intended to apply to
Ms. Fudge; it states "in short, we don't need Ann Fudge." AFB is likewise
designed to target Ms. Fudge in that it would apply to only a few of GE's
directors who will be nominated for reelection at the 2008 Annual Shareowners
Meeting, including Ms. Fudge. Finally, the Proponent has stated that the
Proposals are intended to have this effect; in his letter of September 21, 2007,
initially transmitting the Proposals, the Proponent states among other things,
"My approach may be a bit of a blunt instrument, but I am very much offended by
Ms. Fudge's continuing presence on our Board."
As set forth below, the Staff consistently has concurred in the exclusion of
shareowner proposals that are intended to question the business judgment and
suitability of a particular director and those proposals that operate to prevent
the election of only some of the directors nominated for reelection at the
annual meeting. Thus, we believe that both Proposals are excludable from the
2008 Proxy Materials in reliance on Rule 14a-8(i)(8) as relating to the election
to the Board.
B. Exclusion of Shareowner Proposal AFA.
AFA provides that:
Section 3. Qualifications of the Company's Governance Principles which states
"Directors should offer their resignation in the event of any significant change
in their personal circumstances, including a change in their principal job
responsibilities." will hereafter be interpreted to mean, inter alia, that any
director who, for any reason other than normal retirement, no longer remains in
the executive position held at the time of initial election, or a substantially
similar or higher office, must resign immediately from the GE Board unless all
other directors by secret ballot unanimously vote to refuse to accept the
resignation and the Board then provides a written, public explanation of the
reasons for its stance.
Although this Proposal is phrased in general terms, the supporting statement
leaves no doubt as to how the Proponent intends for it to operate. It states,
"We do not require individuals [as directors] marching to a distant, different
drummer.... In short, we do not need Ann Fudge."
The Staff consistently has permitted companies to exclude a shareowner proposal
that requests or requires the resignation of one or more specific directors who
are standing for election at the same meeting at which the proposal will be
considered. For example, in PepsiCo, Inc. (avail. Feb. 1, 1999), the company
received a shareowner proposal requesting that the board of directors "establish
a policy that board members shall submit a resignation if their individual
professional responsibilities change through ouster, or resignation due to
shareholder pressure." Although in PepsiCo, the proponent phrased the proposal
to appear broad and generic, the supporting statement indicated that the
proposal was directed against two incumbent directors, noting that the company's
board included "two CEOs who were ousted from their own places of employment. We
believe that directors should submit a resignation under circumstances such as
these." In concurring that the proposal in PepsiCo was excludable under Rule
14a-8(i)(8), the Staff noted that "the proposal, together with the supporting
statement, appears to question the ability of two members of the board who
PepsiCo indicates will stand for reelection at the upcoming annual meeting to
fulfill the obligations of directors." See also, e.g., CA, Inc. (avail. June 20,
2006) (concurring, under Rule 14a-8(i)(8), in the exclusion of a proposal
requesting that two members of the board be removed pursuant to a provision of
the Delaware General Corporation Law); Second Bancorp Inc. (avail. Feb. 12,
2001) (permitting exclusion of a proposal, under Rule 14a-8(i)(8), calling for
the resignation of an incumbent director); U.S. Bancorp (avail. Feb. 27, 2000)
(granting no-action relief under Rule 14a-8(i)(8) for a proposal mandating the
removal of the company's officers and directors); ChemTrak Inc. (avail. Mar. 10,
1997) (concurring in the omission of a proposal, under Rule 14a-8(i)(8),
requesting that the board of directors accept the resignation of the current
chairman).
Further, the Staff consistently has permitted the exclusion of shareowner
proposals that question the personal suitability of a specific individual to
serve on the Board. As noted above, in PepsiCo the Staff provided that the
proposal and supporting statement, when viewed together, seemed to "question the
ability of two members of the board." See also Brocade Communication Systems,
Inc. (avail. Jan. 31, 2007); Exxon-Mobil Corp. (avail. Mar. 20, 2002); AT&T
Corp. (avail. Feb. 13, 2001); Honeywell International Inc. (avail. Mar. 2, 2000)
(where, in each case, the Staff concurred the proposal was excludable under Rule
14a-8(i)(8) noting that "the proposal, together with the supporting statement"
appeared to "question the business judgment" of a board member or members who
would stand for reelection at the upcoming annual meeting of shareowners). See
also Delta Air Lines, Inc. (avail. Jul. 21, 1992) (granting exclusion of a
shareowner proposal that "calls into question the qualifications of at least one
director for reelection and thus the proposal may be deemed an effort to oppose
the management's solicitation on behalf of the reelection of this person" in
reliance on the predecessor to Rule 14a-8(i)(8)).
Here, the facts are substantially similar to those in PepsiCo. AFA requests that
GE's Governance Principles require the immediate resignation of any director who
no longer remains in the executive position held at the time of initial
election, or a substantially similar or higher office. As the company noted in
its letter to the Staff in PepsiCo, the Proponent here has "carefully
constructed the wording of the proposal so that it appears to be a broad,
generic proposal establishing a certain criteria for board membership." However,
when viewed together with the language in the supporting statement quoted above
and the Proponent's cover letter under which AFA initially was submitted, it is
clear that AFA is targeting Ms. Fudge, whom GE expects the Board to nominate for
reelection at the 2008 Annual Meeting. In his cover letter dated September 21,
2007, the Proponent notes that he is "very much offended by Ms. Fudge's
continuing presence on our Board." This statement, together with the language of
the supporting statement as well as the Proposal's title of AFA (presumably, Ann
Fudge proposal A), makes it clear that by its terms and underlying meaning, AFA
is targeting Ms. Fudge, a specific member currently serving on the Board who the
Board expects to nominate for reelection at the 2008 Annual Meeting. Based on
the well-established precedent set forth above, the Staff views the proposals
and supporting statements together when evaluating the excludability of
shareowner proposals under Rule 14a-8(i)(8). As such, we believe that AFA is
attempting to question the ability of, and seek to disqualify from reelection, a
current member of the Board who would otherwise be nominated for reelection at
the 2008 Annual Meeting. Accordingly, AFA is excludable from the 2008 Proxy
Materials under Rule 14a-8(i)(8).
C. Exclusion of Shareowner Proposal AFB.
AFB provides that:
Prior to the annual nomination and election of directors, the Board's
N[ominating and] G[overnance] C[ommittee] will specifically review the
performance of all directors who have served for more than 8 years on our Board.
If only one director meets that standard, he or she will not be recommended
unless the entire Board unanimously votes by secret ballot to endorse that
member's candidacy. If more than one director so qualifies, the NGC will force
rank the directors and the bottom rated candidate will not be re-nominated.
In various contexts, the Staff has permitted companies to exclude under Rule
14a-8(i)(8) shareowner proposals that, in purpose or effect, seek through the
Rule 14a-8 process to oppose the election of specific nominees for election to
the company's board of directors, an effort that should properly be the subject
of a Rule 14a-12 "election contest." For example, in Archer-Daniels-Midland Co.
(avail. Aug. 6, 1999), the Staff concurred that the company could exclude a
shareowner proposal that sought to disqualify for election any director who
failed to offer to buy the company. The company argued, among other things, that
the proposal related to an election for directors given that only a very
particular and limited group of individuals could qualify. The company also
noted that, although on its face the proposal spoke in terms of qualifications,
the practical effect would be the same as the waging of a proxy context to place
on the board only those who would approve a narrowly defined extraordinary
transaction.
Similarly, AFB is excludable because its practical effect is to disqualify one
of a limited number of Board members, as AFB only applies to current directors
"who have served for more than 8 years on our Board." Currently, seven of the 16
members of GE's Board have served more than 8 years: James I. Cash, Jr., Ann M.
Fudge, Claudio X. Gonzalez, Andrea Jung, Sam Nunn, Roger S. Penske and Douglas
A. Warner III. To the extent that GE's Board nominates some or all of these
directors for reelection at the 2008 Annual Shareowners Meeting, as is expected,
the effect of AFB would be to disqualify one of GE's nominees. AFB does not
similarly disqualify nominees who have served on the Board for less than eight
years. Such disparate treatment constitutes an opposition to the reelection of
current directors, which indicates the Proponent's intent to circumvent Rule
14a-12, and which renders AFB excludable under Rule 14a-8(i)(8).
AFB requests that GE's Nominating and Governance Committee "specifically review
the performance of all directors who have served more than 8 years on our
Board," and provides that if "only one director meets that standard, he or she
will not be recommended unless the entire Board unanimously votes by secret
ballot to endorse that member's candidacy" and calls for a force ranking" of
certain nominees in which the "bottom rated candidate will not be re-nominated."
Thus, similar to Delta Air Lines, AFB "calls into question the qualifications of
at least one director for reelection and thus the proposal must be deemed an
effort to oppose the management's solicitation on behalf of the reelection of
this person." Delta Air Lines, Inc. (avail. Jul. 21, 1992) (granting exclusion
of a shareowner proposal that "calls into question the qualifications of at
least one director for reelection and thus the proposal may be deemed an effort
to oppose the management's solicitation on behalf of the reelection of this
person" in reliance on the predecessor to Rule 14a-8(i)(8)). As such, AFB is
excludable under Rule 14a-8(i)(8) because it questions the business judgment and
suitability for office of specific GE directors who will be up for reelection at
the upcoming annual meeting and attempts to use the Rule 14a-8 process to oppose
the election of specific nominees to the Board. See also Brocade Communication
Systems, Inc. (avail. Jan. 31, 2007); Exxon-Mobil Corp. (avail. Mar. 20, 2002);
AT&T Corp. (avail. Feb. 13, 2001) (where, in each case, the Staff concurred that
the proposal was excludable under Rule 14a-8(i)(8) noting that "the proposal,
together with the supporting statement" appeared to "question the business
judgment" of a board member or members who would stand for reelection at the
upcoming annual meeting of shareowners).
Moreover, the Staff consistently has determined that shareowner proposals are
excludable under Rule 14a-8(i)(8) when such proposals involve director
nomination criteria or director qualifications that, if implemented, would
affect the selection of director nominees, or the election of such nominees, at
the annual meeting at which the proposal would be presented. See, e.g.,
Washington Mutual, Inc. (avail. Feb. 20, 2007) (concurring that a proposal
relating to certain requirements for director nominees was excludable under Rule
14a-8(i)(8) noting that "it could, if implemented, disqualify nominees for
director at the upcoming annual meeting"); Bank of America Corp. (avail. Jan.
12, 2007) (noting that a shareowner proposal was excludable under Rule
14a-8(i)(8) that sought to reduce the size of the company's board of directors,
noting that "implementation of the proposal may disqualify nominees for
directors at the upcoming annual meeting"); Peabody Energy Corp. (avail. Mar. 4,
2005) (noting that a shareowner proposal seeking to adopt a policy so that
independent directors would comprise two-thirds of the company's board of
directors was excludable under Rule 14a-8(i)(8) because "it could, if
implemented, disqualify nominees for director at the upcoming annual meeting").
As noted above, AFB targets seven of the 16 current members of the Board, and if
implemented, one of those seven directors would be disqualified as a nominee for
reelection at the 2008 Annual Meeting. Thus, as set forth in the precedent cited
above, AFB is excludable under Rule 14a-8(i)(8) because it questions the
business judgment and suitability for office of specific GE directors who will
be up for reelection at the upcoming annual meeting and could "if implemented"
disqualify a director nominee at the upcoming 2008 Annual Meeting.
CONCLUSION
Based on the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if GE excludes the Proposals from its 2008 Proxy
Materials for the reasons set forth above. We would be happy to provide you with
any additional information and answer any questions that you may have regarding
this subject. In addition, GE agrees to promptly forward to the Proponents any
response from the Staff to this no-action request that the Staff transmits by
facsimile to GE only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 995-8671, my colleague Elizabeth A. Ising at (202) 955-8287 or
David M. Stuart, GE's Senior Counsel, at (203) 373-2243.
Sincerely,
/s/
Ronald O. Mueller
ROM/jlk
Enclosures
cc: David M. Stuart, General Electric Company
Dennis W. Rocheleau
Lauren M. Rocheleau
Shana R. Rocheleau
[INQUIRY LETTER]
September 21, 2007
Brackett B. Denniston, Secretary
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06828
Dear Brackett:
Following up on our earlier dialogue, and that which I had with Mike McAlevey on
September 12, I submit the attached two proposals for inclusion in next year's
proxy statement.
My approach may be a bit of a blunt instrument, but I am very much offended by
Ms. Fudge's continuing presence on our Board. As I have said previously, I am
not attacking her integrity, her decency, or her willingness to devote time to
our Board. What I am asserting is that she is a relative lightweight and if she
were white, she would never have been nominated. This, in my opinion, is not the
first time GE's devotion to diversity or political correctness has proved to be
wrongheaded and - violative of "The Letter and the Spirit" standards.
Sincerely,
/s/
Dennis W. Rocheleau
460 Papurah Road
Fairfield, CT 06825
[APPENDIX 1]
SHAREHOLDER PROPOSAL #AFA
RESOLVED: That Section 3. Qualifications of the Company's Governance Principles
which states "Directors should offer their resignation in the event of any
significant change in their personal circumstances, including a change in their
principal job responsibilities." will hereafter be interpreted to mean, inter
alia, that any director who, for any reason other than normal retirement, no
longer remains in the executive position held at the time of initial election,
or a substantially similar or higher office, must resign immediately from the GE
Board unless all other directors by secret ballot unanimously vote to refuse to
accept the resignation and the Board then provides a written, public explanation
of the reasons for its stance.
COMMENT: Certainly we should expect that our directors should be able to devote
sufficient time to fulfill their Board duties. But our Board also should not
countenance serial instances of arguable "job failure" or burnout by our
directors ... however it may be spun for the public. We need the informed
insights of the best people engaged in activities reasonably related to the
conduct of the Company. We do not require individuals marching to a distant,
different drummer providing the beat for bicycling in Europe, practicing yoga,
reading ... or even writing ... short stories, or learning to yodel. In short,
we don't need Ann Fudge.
[APPENDIX 2]
SHAREHOLDER PROPOSAL #AFB
RESOLVED: Prior to the annual nomination and election of directors, the Board's
NGC will specifically review the performance of all directors who have served
for more than 8 years on our Board. If only one director meets that standard, he
or she will not be recommended unless the entire Board unanimously votes by
secret ballot to endorse that member's candidacy. If more than one director so
qualifies, the NGC will force rank the directors and the bottom rated candidate
will not be re-nominated.
COMMENT: Insufficient dynamism is an unhealthy byproduct of a "once elected you
stay until you resign or reach 74" reality that abides with respect to the
outside directors on our Board. In a Company that apparently embraces an
executive culture of "grow or go", "rank and yank", and "a little angst-improves
performance", its Board ought to practice what it countenances. The argument
that we always get it right in our initial selection of directors defies the
laws of statistics ... and our history.
[STAFF REPLY LETTER]
January 9, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: General Electric Company Incoming letter dated December 7, 2007
The proposals relate to directors.
There appears to be some basis for your view that GE may exclude the proposals
under rule 14a-8(c). Accordingly, we will not recommend enforcement action to
the Commission if GE omits the proposals from its proxy materials in reliance on
rule 14a-8(c). In reaching this position, we have not found it necessary to
address the alternative basis for omission upon which GE relies.
Sincerely,
/s/
Heather L. Maples
Special Counsel
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