Item 20. Indemnification of Directors and Officers
General Electric Company
Section 721 of the New York Business Corporation
Law (the “NYBCL”) provides that, in addition to indemnification provided in Article 7 of the NYBCL, a corporation
may indemnify a director or officer by a provision contained in the certificate of incorporation or by-laws or by a duly authorized
resolution of its shareholders or directors or by agreement, provided that no indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were
committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action, or that
such director or officer personally gained in fact a financial profit or other advantage to which he was not legally entitled.
Section 722(a) of the NYBCL provides that
a corporation may indemnify a director or officer made, or threatened to be made, a party to any action other than a derivative
action, whether civil or criminal, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’
fees, actually and necessarily incurred as a result of such action or proceeding or any appeal therein, if such director or officer
acted in good faith, for a purpose which he reasonably believed to be in, or not opposed to, the best interests of the corporation
and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the NYBCL provides that
a corporation may indemnify a director or officer, made or threatened to be made, a party in a derivative action, against amounts
paid in settlement and reasonable expenses, including attorneys’ fees, actually and necessarily incurred by the director
or officer in connection with the defense or settlement of such action or in connection with an appeal therein if such director
or officer acted, in good faith, for a purpose which he reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification will be available under Section 722(c) of the NYBCL in respect of a threatened
or pending action which is settled or otherwise disposed of, or any claim as to which such director or officer shall have been
adjudged liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action
was brought, any court of competent jurisdiction, determines, upon application, that, in view of all the circumstances of the
case, the director or officer is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses
as the court deems proper.
Section 723 of the NYBCL specifies the
manner in which payment of indemnification under Section 722 of the NYBCL or indemnification permitted under Section 721 of the
NYBCL may be authorized by the corporation. It provides that indemnification may be authorized by the corporation. It provides
that indemnification by a corporation is mandatory in any case in which the director or officer has been successful, whether on
the merits or otherwise, in defending an action. In the event that the director or officer has not been successful or the action
is settled, indemnification must be authorized by the appropriate corporate action as set forth in Section 723.
Section 724 of the NYBCL provides that,
upon application by a director or officer, indemnification may be awarded by a court to the extent authorized. Section 722 and
Section 723 of the NYBCL contain certain other miscellaneous provisions affecting the indemnification of directors and officers.
Section 726 of the NYBCL authorizes the
purchase and maintenance of insurance to indemnify (1) a corporation for any obligation which it incurs as a result of the indemnification
of directors and officers under the provisions of Article 7 of the NYBCL, (2) directors and officers in instances in which they
may be indemnified by the corporation under the provisions of Article 7 of the NYBCL, and (3) directors and officers in instances
in which they may not otherwise be indemnified by the corporation under the provisions of Article 7 of the NYBCL, provided the
contract of insurance covering such directors and officers provides, in a manner acceptable to the New York State Superintendent
of Financial Services, for a retention amount and for co-insurance.
Section 6 of the Restated Certificate
of Incorporation, as amended, of GE provides, in part, as follows:
“A person who is or was a director
of the corporation shall have no personal liability to the corporation or its shareholders for damages for any breach of duty
in such capacity except that the foregoing shall not eliminate or limit liability where such liability is imposed under the Business
Corporation Law of the State of New York.”
Article XI of the By-Laws, as amended,
of GE provides, in part, as follows:
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A.
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GE
shall,
to
the
fullest
extent
permitted
by
applicable
law
as
the
same
exists
or
may
hereafter
be
in
effect,
indemnify
any
person
who
is
or
was
or
has
agreed
to
become
a
director
or
officer
of
GE
(hereinafter,
a
“director”
or
“officer”)
and
who
is
or
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was made or threatened to be made
a party to or is involved in any threatened, pending or completed action, suit, arbitration, alternative dispute mechanism, inquiry,
investigation, hearing or other proceeding (including any appeal therein), whether civil, criminal, administrative, investigative,
legislative or otherwise (hereinafter, a “proceeding”), including an action by or in the right of GE to procure a
judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other enterprise, which such person is serving, has served or has
agreed to serve in any capacity at the request of GE, by reason of the fact that he or she is or was or has agreed to become a
director or officer of GE, or, while a director or officer of GE, is or was serving or has agreed to serve such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against (i) judgments, fines, amounts
paid or to be paid in settlement, taxes or penalties, and (ii) costs, charges and expenses, including attorneys fees (hereinafter,
“expenses”), incurred in connection with such proceeding, provided, however, that no indemnification shall be provided
to any such person if a judgment or other final adjudication adverse to the director or officer and from which there is no further
right to appeal establishes that (i) his or her acts were committed in bad faith or were the result of active and deliberate dishonesty
and, in either case, were material to the cause of action so adjudicated, or (ii) he or she personally gained in fact a financial
profit or other advantage to which he or she was not legally entitled. Notwithstanding the foregoing, except as provided in Section
E with respect to a suit to enforce rights to indemnification or advancement of expenses under this Article XI, GE shall be required
to indemnify a director or officer under this Section A in connection with any suit (or part thereof) initiated by such person
only if such suit (or part thereof) was authorized by the GE Board of Directors.
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B.
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In
addition
to
the
right
to
indemnification
conferred
by
Section
A,
a
director
or
officer
of
GE
shall,
to
the
fullest
extent
permitted
by
applicable
law
as
the
same
exists
or
may
hereafter
be
in
effect,
also
have
the
right
to
be
paid
by
GE
the
expenses
incurred
in
defending
any
proceeding
in
advance
of
the
final
disposition
of
such
proceeding
upon
delivery
to
GE
of
an
undertaking
by
or
on
behalf
of
such
person
to
repay
any
amounts
so
advanced
if
(i)
such
person
is
ultimately
found,
under
the
procedure
set
forth
in
Section
C
or
by
a
court
of
competent
jurisdiction,
not
to
be
entitled
to
indemnification
under
this
Article
XI
or
otherwise,
or
(ii)
where
indemnification
is
granted,
to
the
extent
the
expenses
so
advanced
by
GE
exceed
the
indemnification
to
which
such
person
is
entitled.
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C.
|
To
receive
indemnification
under
Section
A,
a
director
or
officer
of
GE
shall
submit
to
GE
a
written
request,
which
shall
include
documentation
or
information
that
is
necessary
to
determine
the
entitlement
of
such
person
to
indemnification
and
that
is
reasonably
available
to
such
person
Upon
receipt
by
GE
of
a
written
request
for
indemnification,
if
required
by
the
New
York
Business
Corporation
Law,
a
determination
with
respect
to
the
request
shall
be
made
(i)
by
the
GE
Board
of
Directors,
acting
by
a
quorum
consisting
of
directors
who
are
not
parties
to
the
proceeding
upon
a
finding
that
the
director
or
officer
has
met
the
applicable
standard
of
conduct
set
forth
in
the
New
York
Business
Corporation
Law,
or
(ii)
if
a
quorum
of
such
disinterested
directors
is
not
obtainable,
or
even
if
obtainable,
if
a
quorum
of
disinterested
directors
so
directs,
by
the
GE
Board
of
Directors
upon
the
opinion
in
writing
of
independent
legal
counsel
that
indemnification
is
proper
in
the
circumstances
because
the
director
or
officer
has
met
the
applicable
standard
of
conduct
set
forth
in
the
New
York
Business
Corporation
Law
or
by
the
shareholders
upon
a
finding
that
such
person
has
met
such
standard
of
conduct.
The
determination
of
entitlement
to
indemnification
shall
be
made,
and
such
indemnification
shall
be
paid
in
full,
within
90
days
after
a
written
request
for
indemnification
has
been
received
by
GE.
Upon
making
a
request
for
indemnification,
a
director
or
officer
shall
be
presumed
to
be
entitled
to
indemnification
and
the
burden
of
establishing
that
a
director
or
officer
is
not
entitled
to
indemnification
under
this
Article
XI
or
otherwise
shall
be
on
GE.
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D.
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To
receive
an
advancement
of
expenses
under
Section
B,
a
director
or
officer
shall
submit
to
GE
a
written
request,
which
shall
reasonably
evidence
the
expenses
incurred
by
such
person
and
shall
include
the
undertaking
required
by
Section
B.
Expenses
shall
be
paid
in
full
within
30
days
after
a
written
request
for
advancement
has
been
received
by
GE.
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E.
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If
a
claim
for
indemnification
or
advancement
of
expenses
is
not
paid
in
full
by
GE
or
on
its
behalf
within
the
time
frames
specified
in
Section
C
or
D,
as
applicable,
a
director
or
officer
of
GE
may
at
any
time
thereafter
bring
suit
against
GE
in
a
court
of
competent
jurisdiction
to
recover
the
unpaid
amount
of
the
claim.
If
successful
in
whole
or
in
part
in
any
such
suit,
or
in
a
suit
brought
by
GE
to
recover
an
advancement
of
expenses
pursuant
to
the
terms
of
an
undertaking,
such
person
shall
be
entitled
to
be
paid
also
the
expense
of
prosecuting
or
defending
such
suit.
In
any
suit
brought
by
a
director
or
officer
of
GE
to
enforce
a
right
to
indemnification
or
advancement
of
expenses
under
this
Article
XI,
or
brought
by
GE
to
recover
an
advancement
of
expenses
pursuant
to
the
terms
of
an
undertaking,
the
burden
of
proving
that
such
person
is
not
entitled
to
be
indemnified,
or
to
such
advancement
of
expenses,
under
this
Article
XI
or
otherwise
shall
be
on
GE.
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F.
|
Notwithstanding
any
other
provision
of
this
Article
XI,
to
the
fullest
extent
permitted
by
applicable
law
as
the
same
exists
or
may
hereafter
be
in
effect,
a
director
or
officer
of
GE
shall
be
entitled
to
indemnification
against
all
expenses
incurred
by
such
person
or
on
such
person’s
behalf
if
such
person
appears
as
a
witness
or
otherwise
incurs
legal
expenses
as
a
result
of
or
related
to
such
person’s
service
(i)
as
a
director
or
officer
of
GE,
or
(ii)
while
a
director
or
officer
of
GE,
at
any
other
corporation,
partnership,
joint
venture,
trust,
employee
benefit
plan
or
other
enterprise,
which
such
person
is
serving,
has
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served or has agreed to serve in
any capacity at the request of GE, in any threatened, pending or completed action, suit, arbitration, alternative dispute mechanism,
inquiry, investigation, hearing or other proceeding to which such person neither is, nor is threatened to be made, a party.
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G.
|
GE
may,
to
the
extent
authorized
from
time
to
time
by
the
GE
Board
of
Directors,
or
by
a
committee
comprised
of
members
of
the
GE
Board
of
Directors
or
members
of
management
as
the
GE
Board
of
Directors
may
designate
for
such
purpose,
provide
indemnification
to
employees
or
agents
of
GE
who
are
not
officers
or
directors
of
GE
with
such
scope
and
effect
as
determined
by
the
GE
Board
of
Directors,
or
such
committee.
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H.
|
GE
may
indemnify
any
person
to
whom
GE
is
permitted
by
applicable
law
to
provide
indemnification
or
the
advancement
of
expenses,
whether
pursuant
to
rights
granted
pursuant
to,
or
provided
by,
the
New
York
Business
Corporation
Law
or
other
rights
created
by
(i)
a
resolution
of
shareholders,
(ii)
a
resolution
of
directors,
or
(iii)
an
agreement
providing
for
such
indemnification,
it
being
expressly
intended
that
these
By-Laws
authorize
the
creation
of
other
rights
in
any
such
manner.
The
right
to
be
indemnified
and
to
the
advancement
of
expenses
authorized
by
this
Section
H
shall
not
be
exclusive
of
any
other
right
which
any
person
may
have
or
hereafter
acquire
under
any
statute,
provision
of
the
Certificate
of
Incorporation,
By-Laws,
agreement,
vote
of
shareholders
or
disinterested
directors
or
otherwise.
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I.
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The
rights
conferred
by
this
Article
XI
shall
be
contract
rights
and
shall
vest
at
the
time
a
person
agrees
to
become
a
director
or
officer
of
GE.
Such
rights
shall
continue
as
to
a
person
who
has
ceased
to
be
a
director
or
officer
of
GE
and
shall
extend
to
the
heirs
and
legal
representatives
of
such
person.
Any
repeal
or
modification
of
the
provisions
of
this
Article
XI
shall
not
adversely
affect
any
right
or
protection
hereunder
of
any
director
or
officer
in
respect
of
any
act
or
omission
occurring
prior
to
the
time
of
such
repeal
or
modification.
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J.
|
If
any
provision
of
this
Article
XI
is
held
to
be
invalid,
illegal
or
unenforceable
for
any
reason
whatsoever
(i)
the
validity,
legality
and
enforceability
of
the
remaining
provisions
of
this
Article
XI
(including
without
limitation,
all
portions
of
any
section
of
this
Article
XI
containing
any
such
provision
held
to
be
invalid,
illegal
or
unenforceable,
that
are
not
by
themselves
invalid,
illegal
or
unenforceable)
shall
not
in
any
way
be
affected
or
impaired
thereby
and
(ii)
to
the
fullest
extent
possible,
the
provisions
of
this
Article
XI
(including,
without
limitation,
all
portions
of
any
section
of
this
Article
XI
containing
any
such
provision
held
to
be
invalid,
illegal
or
unenforceable,
that
are
not
themselves
invalid,
illegal
or
unenforceable)
shall
be
construed
so
as
to
give
effect
to
the
intent
manifested
by
the
provision
held
invalid,
illegal
or
unenforceable.
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K.
|
This
Article
XI
may
be
amended,
modified
or
repealed
either
by
action
of
the
GE
Board
of
Directors
or
by
the
vote
of
the
shareholders.
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GE has purchased liability insurance for
its officers and directors as permitted by Section 726 of the NYBCL.
In addition, GE has entered into indemnification
agreements with each of its directors. Under these indemnification agreements, GE agrees to indemnify its directors for all expenses
related to any action, suit, arbitration, or investigation (among other proceedings, as defined therein) and to advance expenses
in advance of such matters’ final disposition. The right to indemnification and advancement is limited to the extent expressly
prohibited by law, to the extent the expenses are covered by other sources (such as insurance or another indemnity clause, among
others), or in connection with an action, suit or proceeding, or portion thereof, voluntarily initiated by the director, subject
to certain exceptions.
GE Capital Funding, LLC
Section 18-303(a) of the Delaware Limited
Liability Company Act (the “DLLCA”) provides that, except as otherwise provided by the DLLCA, the debts, obligations
and liabilities of a limited liability company shall be solely the limited liability company’s, and no member or manager
of a limited liability company shall be obligated personally for any such debt, obligation or liability solely by reason of being
a member or acting as a manager. Section 18-108 of the DLLCA provides that, subject to such standards and restrictions, if any,
as are set forth in its limited liability company agreement, a limited liability company may, and shall have the power to, indemnify
and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.
Section 16 of the Limited Liability Company
Agreement of GE Capital Funding (the “LLC Agreement”) provides, in part, as follows:
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A.
|
No
member,
officer,
manager,
employee
or
agent
of
GE
Capital
Funding
and
no
employee,
representative,
agent
or
affiliate
of
any
member
(collectively,
the
“covered
persons”)
shall
be
liable
to
GE
Capital
Funding
or
any
other
person
who
is
bound
by
the
LLC
Agreement
for
any
loss,
damage
or
claim
incurred
by
reason
of
any
act
or
omission
performed
or
omitted
by
such
covered
person
in
good
faith
on
behalf
of
GE
Capital
Funding
and
in
a
manner
reasonably
believed
to
be
within
the
scope
of
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the authority conferred on such
covered person by the LLC Agreement, except that a covered person shall be liable for any such loss, damage or claim incurred
by reason of such covered person’s willful misconduct.
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B.
|
To
the
fullest
extent
permitted
by
applicable
law,
a
covered
person
shall
be
entitled
to
indemnification
from
GE
Capital
Funding
for
any
loss,
damage
or
claim
incurred
by
such
covered
person
by
reason
of
any
act
or
omission
performed
or
omitted
by
such
covered
person
in
good
faith
on
behalf
of
GE
Capital
Funding
and
in
a
manner
reasonably
believed
to
be
within
the
scope
of
the
authority
conferred
on
such
covered
person
by
the
LLC
Agreement,
except
that
no
covered
person
shall
be
entitled
to
be
indemnified
in
respect
of
any
loss,
damage
or
claim
incurred
by
such
covered
person
by
reason
of
such
covered
person’s
willful
misconduct
with
respect
to
such
acts
or
omissions;
provided,
however,
that
any
indemnity
under
this
Section
16
shall
be
provided
out
of
and
to
the
extent
of
GE
Capital
Funding
assets
only,
and
no
member
shall
have
personal
liability
on
account
thereof.
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C.
|
To
the
fullest
extent
permitted
by
applicable
law,
expenses
(including
legal
fees)
incurred
by
a
covered
person
defending
any
claim,
demand,
action,
suit
or
proceeding
shall,
from
time
to
time,
be
advanced
by
GE
Capital
Funding
prior
to
the
final
disposition
of
such
claim,
demand,
action,
suit
or
proceeding
upon
receipt
by
GE
Capital
Funding
of
an
undertaking
by
or
on
behalf
of
the
covered
person
to
repay
such
amount
if
it
shall
be
determined
that
the
covered
person
is
not
entitled
to
be
indemnified
as
authorized
in
this
Section
16.
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D.
|
A
Covered
person
shall
be
fully
protected
in
relying
in
good
faith
upon
the
records
of
GE
Capital
Funding
and
upon
such
information,
opinions,
reports
or
statements
presented
to
GE
Capital
Funding
by
any
Person
as
to
matters
the
covered
person
reasonably
believes
are
within
such
other
person’s
professional
or
expert
competence
and
who
has
been
selected
with
reasonable
care
by
or
on
behalf
of
GE
Capital
Funding
,
including
information,
opinions,
reports
or
statements
as
to
the
value
and
amount
of
the
assets,
liabilities,
or
any
other
facts
pertinent
to
the
existence
and
amount
of
assets
from
which
distributions
to
the
members
might
properly
be
paid.
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E.
|
To
the
extent
that,
at
law
or
in
equity,
a
covered
person
has
duties
(including
fiduciary
duties)
and
liabilities
relating
thereto
to
GE
Capital
Funding
or
to
any
other
covered
person,
a
covered
person
acting
under
the
LLC
Agreement
shall
not
be
liable
to
GE
Capital
Funding
or
to
any
other
covered
person
for
its
good
faith
reliance
on
the
provisions
of
the
LLC
Agreement
or
any
approval
or
authorization
granted
by
GE
Capital
Funding
or
any
other
covered
person.
The
provisions
of
the
LLC
Agreement,
to
the
extent
that
they
restrict
or
eliminate
the
duties
and
liabilities
of
a
Covered
person
to
GE
Capital
Funding
or
its
members
otherwise
existing
at
law
or
in
equity,
are
agreed
by
the
members
to
replace
such
other
duties
and
liabilities
of
such
covered
person.
|
|
|
F.
|
The
foregoing
provisions
of
this
Section
16
shall
survive
any
termination
of
the
LLC
Agreement.
|
Item 22. Undertakings
Each of the undersigned registrants hereby
undertakes:
To respond to requests for information
that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form within one business day
of the receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective date of the registration statement through the date
of responding to the request.
To supply by means of post-effective amendment
all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included
in the registration statement when it became effective.
To file, during any period in which offers
or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required
by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and
(iii) to include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.
That, for the purpose of determining any
liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
To remove from registration by means of
a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
That, for the purpose of determining liability
under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of first use.
That, for the purpose of determining liability
of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus
of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the portion of any other free writing
prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) any other communication that is an
offer in the offering made by the undersigned registrant to the purchaser.
That, for purposes of determining any
liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d)
of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter
has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.