Employment and Post-Retirement Consulting Agreement - General Electric Co. and John F. Welch Jr.
EMPLOYMENT AND POST-RETIREMENT CONSULTING AGREEMENT
between
GENERAL ELECTRIC COMPANY
and
John F. Welch, Jr.
This agreement is entered into on December 20, 1996 by and between
General Electric Company, a New York corporation, and John F. Welch, Jr.
WHEREAS, in recognition of Mr. Welch's unique contribution to the
creation of more than $150 billion of shareholder value during his tenure as the
Chairman of the Board and Chief Executive Officer of General Electric Company
("Company"), the Board of Directors wishes to obtain his commitment to serve as
Chairman of the Board of Directors and Chief Executive Officer of the Company
until December 31, 2000, and his commitment to serve thereafter as a consultant
to and representative of the Company, at the direction of the Chief Executive
Officer of the Company; and
NOW THEREFORE, the Company and Mr. Welch agree as follows:
1. Mr. Welch agrees to continue to serve as Chairman of the Board of Directors
and Chief Executive Officer of the Company for the period from the date of this
agreement until December 31, 2000, on terms no less favorable to him than his
present conditions of employment, or such earlier date as the Board of Directors
may determine at anytime in its sole discretion.
2. Mr. Welch agrees that, following his retirement from the Company, and when
and as requested by the Chief Executive Officer of the Company, he will provide
consulting and advice to the Company and will participate in various external
activities and events for the benefit of the Company. Mr. Welch agrees to
provide up to 30 days per year to the Company, subject to his reasonable
availability, for such consulting services or such participation in external
activities and events. In addition, Mr. Welch agrees to obtain the approval of
the Management Development and Compensation Committee of the Board of Directors
before providing any consulting, advice or service of any kind to any other
company or organization that competes with the Company.
3. The services contemplated under this agreement will require that Mr. Welch
have access, following his retirement, to information which is proprietary or
confidential to the Company. Mr. Welch agrees not to publish or otherwise
disclose to persons outside the Company, without specific permission from the
Company, any Company proprietary or confidential information which he acquires
as a result of services performed under this agreement, and not to use such
information in any way which might be detrimental to the interests of the
Company.
4. Mr. Welch also agrees to promptly disclose to the Company any information,
ideas, or inventions made or conceived by him which may result from or be
suggested by post-retirement services performed by him under this agreement, and
to assign to the Company all rights pertaining to such information, ideas, or
inventions. Knowledge or information of any kind disclosed by Mr. Welch to the
Company shall be deemed to have been disclosed without obligation on the part of
the Company to hold the same in confidence, and the Company shall have the full
right to use and disclose such knowledge and information without compensation to
Mr. Welch beyond that specifically provided in this agreement.
5. In return for his willingness to continue to help create value for the
Company's shareholders throughout his retirement, and in return for the
foregoing commitments by Mr. Welch, the Company shall pay Mr. Welch, for
consulting services or participation in external activities and events performed
at the request of the Chief Executive Officer of the Company, a daily consulting
fee, for the days he renders services, equal to his daily salary rate at the
time of his retirement, and, as an annual retainer, shall pay for 5 days of such
services in advance at the beginning of each year of his retirement. In
addition, the Company shall provide Mr. Welch, for the remainder of his life,
continued access to Company facilities and services comparable to those provided
to him prior to his retirement, including access to Company aircraft, cars,
office, apartments, and financial planning services. The Company shall also
reimburse Mr. Welch, upon the receipt of appropriate documentation, for
reasonable travel and living expenses which he incurs in providing services at
the request of the Chief Executive Officer, or which he incurs because of his
position as a retired Chairman of the Board and Chief Executive Officer of the
Company. Subject only to Mr. Welch's compliance, to the best of his ability,
with his commitments set forth in paragraph 1 of this agreement, the Company's
obligations set forth in this agreement are unconditional and irrevocable and
shall apply irrespective of Mr. Welch's incapacitation, prior or subsequent to
his retirement, to perform services hereunder, provided, however, that the
Company's obligation to pay Mr. Welch an annual retainer shall terminate if he
should become totally and permanently unable to provide services hereunder.
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6. Nothing in this agreement shall require any change in the Board's current
processes for establishing Mr. Welch's salary, bonus and long-term incentive
compensation awards based on his performance during the remainder of his service
as Chairman and Chief Executive Officer.
7. Following his retirement, Mr. Welch shall be an independent contractor under
this agreement, and no provision of, or action taken under, this agreement shall
affect in any way Mr. Welch's rights under any Company compensation, employee
benefit and welfare plans, programs or practices, including, without limitation,
Company executive compensation, insurance, or pension plans.
8. This agreement is the sole agreement between Mr. Welch and the Company with
respect to the duration of his service as Chairman of the Board and Chief
Executive Officer, and to his post-retirement consulting services and activities
for the Company, and supersedes all prior agreements and understandings with
respect thereto. No change, modification, alteration or addition to any
provision hereof shall be binding unless in writing and signed by both Mr. Welch
and a duly authorized representative of the Board of Directors of the Company.
GENERAL ELECTRIC COMPANY
By_______________________________________ Date _________________
Silas S. Cathcart
By order of the Board of Directors
__________________________________ Date _________________
John F. Welch, Jr.