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Show 3. Messrs. Jones, Dance and Parker have all reached the career limit determined by the Management Development and Compensation Committee for mandatory deferment of allotments of incentive compensation. The number of annual installments in which deferred allotments are paid following retirement is dependent upon prescribed options approved by the Management Development and Compensation Committee which the employee elects prior to his retirement. Subject to the terms of the Plan, and assuming eighteen installments with retirement at age 62, average annual distribution of allotments made through December 31, 1975 will be approximately as follows: Mr. Jones, 877 shares and $4,787; Mr. Dance, 562 shares and $323; and Mr. Parker, 1,290 shares and $9,699. Based on the foregoing assumptions, persons who were officers and directors of General Electric on December 31, 1975, excluding Mr. Weiss, (the only such directors being Messrs. Jones, Dance and Parker) would as a group receive eighteen annual installments each consisting of 22,707 shares and $38,867. Mr. Weiss's allotment will be paid to his estate in twenty annual installments, each consisting of 1,064 shares and $4,058. 4. The figures in this table relating to officers as a group cover all employees of General Electric who were at division general manager level and above during 1975 (for the portion of the year during which they held such positions) although some of them were not officers of General Electric. 5. Outside directors are paid an annual retainer of $10,000 plus a fee of $500 for each Board and Board Committee meeting attended. Retirement Benefits The General Electric Pension Plan provides a pension for employees who elect to participate, and either retire directly from service with General Electric or terminate service with vested rights. In addition to General Electric contributions, participating employees make contributions on earnings in excess of $6,600 in a calendar year. The contributions of General Electric and its affiliates cannot be allocated to the account of any particular employee. In 1973 the Board of Directors approved a Supplementary Pension Plan primarily affecting professional and managerial employees (including all officers of General Electric) with five or more years of credited service whose compensation is determined pursuant to General Electric's Exempt Salary Plan or certain variable compensation plans and who participate in the General Electric Pension Plan. Incentive compensation earned prior to 1970 was not included in the determination of retirement benefits, and since that date, only the lower of 50% of an employee's incentive compensation or the non-deferred portion was included. In 1975 the Board of Directors modified the Supplementary Pension Plan to include total compensation (salary plus incentive compensation) from 1970 in the determination of retirement benefits under this Plan. In accordance with prior practice, retired employees have received adjustments to their retirement benefits where the inclusion of additional incentive compensation from 1970 is applicable. The approximate annual retirement benefits payable to employees in higher salary classifications who participate in the Supplementary Pension Plan is described in the following table. ESTIMATED TOTAL ANNUAL RETIREMENT BENEFITS UNDER THE PENSION PLAN, THE SUPPLEMENTARY PENSION PLAN, AND SOCIAL SECURITY Earnings Credited Years of Service at Retirement_ for Retirement Benefits 20 30 40 $100,000................................................. $22,500 $ 33,750 $ 45,000 200,000................................................. 41,500 62,300 83,100 300,000................................................. 56,350 84,500 112,700 400,000................................................. 71,150 106,700 142,300 500,000................................................. 85,950 128,900 171,900 Notes: Amounts shown as "Earnings Credited for Retirement Benefits" represent the average annual total compensation paid for the highest 60 consecutive months out of the last 120 months prior to retirement. With minor exceptions, the total annual retirement benefits payable to an officer or former officer under General Electric's pension plans may not exceed an amount which, when added to his Social Security Benefit, results in retirement income of 50% of such compensation. 38 Actual retirement benefits will be lower than shown because of a 10% reduction in the supplementary pension in lieu of contributions, and may also differ slightly as a result of the integration with Social Security benefits. The above amounts are payable to an employee who retires at age 62 or older and whose surviving spouse is entitled to continuation of approximately one-half of the benefits shown. The Plans provide for optional early retirement at age 60. In the case of optional retirement prior to age 62, the above amounts would be reduced by one-half of one per cent for each month by which the date of retirement precedes attainment of age 62. Stock Options The table below shows data with respect to stock options and related stock appreciation rights. Options granted mature, upon being earned out, in approximately equal annual installments over a period of nine years from the date of the granting of the option, except that no options were granted with installments maturing after the optionee's normal retirement date. Each option expires one year after maturity of the final installment or three months after the optionee's normal retirement date, whichever is earlier. The option price is 100% of the market value of the stock on the date the options are granted and must be paid to General Electric by the optionee in full in cash prior to transfer of the stock. Except in the event of an optionee's death, no options may be transferred, and no options may be exercised more than three months after termination of the optionee's service with General Electric or any affiliate. In the event of an optionee's death, the person or persons to whom the optionee's rights under the option shall pass by will or descent may exercise the option within two years of the optionee's death to the extent it was exercisable by its terms at time of death and provided it has not expired. Stock appreciation rights may be granted only in connection with a stock option and may be exercised only upon surrender of the related portion of the stock option. They are not exercisable prior to or later than the time the related stock option could be exercised. The rights permit the optionee, in lieu of exercising all or a portion of an option, to receive an amount equal to the excess of the market price of the common stock on the date the right is exercised over the option price. The Management Development and Compensation Committee has determined that this amount will be distributed in General Electric common shares. Stock Options and Appreciation Rights All directors Mr. Mr. Mr. Mr. and officers Common Shares Jones Dance Parker Weiss1 as a group2 GrantedJan. 1, 1975 to Sept. 20, 1976: Number of shares.................... 419 2,222 1,204 356 81,455 Option price per share3............ $47,875 $47,875 $47,875 $47,875 $49,668 Number of appreciation rights4................................... 48,370 32,933 33,583 29,795 1,086,552 ExercisedJan. 1, 1975 to Sept. 20, 1976: Number of shares.................... 4,096 Number of appreciation rights 1,939 10,444 Aggregate value of rights exercised.................................. $24,419 $122,527 Unexercised at Sept. 20, 1976: Number of shares.................... 52,342 34,514 38,023 17,624 1,081,685 Average per share option price...................................... $54.11 $51.96 $51.84 $50.65 $50.49 Number of appreciation rights 48,370 30,994 33,583 941,732 Notes: 1. Upon Mr. Weiss's death on September 6, 1976 all stock appreciation rights held by him automatically terminated. His estate may exercise all or part of the options which were exercisable at his death at any time through September 6, 1978 or the relevant option expiration date if sooner. 39 |
