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As filed with the Securities and Exchange Commission on January 24, 2003

Registration No. 333-102111



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933


GENERAL ELECTRIC COMPANY
(Exact name of co-registrants as specified in their charters)


New York
(State of Incorporation)
  3724
(Primary Standard Industrial
Classification Code Number)
  14-0689340
(I.R.S. Employer Identification No.)

3135 Easton Turnpike
Fairfield, Connecticut 06828-1077
(203) 373-2211
(Address, including zip code, and telephone number, including area code, of registrants' principal executive offices)

Robert E. Healing, Esq.
3135 Easton Turnpike
Fairfield, Connecticut 06828-1077
(203) 373-2243
(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Stephen M. Wiseman
King & Spalding LLP
1185 Avenue of the Americas
New York, New York 10036-4003
(212) 556-2100
  John G. Finley
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000

        Approximate date of commencement of proposed sale to the public:    As soon as practicable after this Registration Statement is declared effective.

        If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box. o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o


        The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.




Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such State.

LOGO       LOGO
Osmonics, Inc.
Proxy Statement
      General Electric Company
Prospectus

Dear Osmonics Shareholder:

        On November 2, 2002 the board of directors of Osmonics, Inc. approved a merger agreement authorizing the merger of Osmonics with and into a wholly owned subsidiary of General Electric Company. As a result of the merger, GE will acquire Osmonics. We are sending you this proxy statement/prospectus to ask you to vote on the adoption of a merger agreement and the merger with GE.

        If the merger is completed, each Osmonics common share you hold will be exchanged for a fraction of a share of GE common stock having a market value of approximately $17.00, determined during a pre-closing measurement period. You may elect to receive $17.00 in cash per share instead of GE shares, subject to proration so that the total cash paid does not exceed 55% of the total merger consideration.

        GE and Osmonics common shares are both listed on the New York Stock Exchange. GE is listed under the trading symbol "GE" and Osmonics is listed under the trading symbol "OSM". On January 23, 2003, the closing price of a share of GE common stock was $23.95.

        We will hold a special meeting of our shareholders to consider and vote on the merger agreement and the merger. Only Osmonics shareholders who hold their Osmonics shares at the close of business on January 23, 2003, the record date for the special meeting, will be entitled to vote at the special meeting.

        Your vote is very important.    Your board of directors has determined that the merger agreement and the merger are advisable, fair and in the best interests of Osmonics and its shareholders and recommends that you vote "FOR" adoption of the merger agreement and the merger. The merger cannot be completed unless the holders of a majority of the outstanding shares of Osmonics common stock vote to adopt the merger agreement. Whether or not you plan to attend the special meeting, please take the time to vote by submitting a valid proxy promptly. If your shares of Osmonics common stock are registered in your own name, you may submit your proxy by completing and mailing the enclosed proxy card to Osmonics. If your shares are held in "street name" you should follow the directions your broker or bank provides. If you sign, date and mail your proxy card without indicating how you want to vote, your proxy will be counted as a vote in favor of adoption of the merger agreement and the merger. If you fail to submit your proxy, the effect will be a vote against the merger agreement and the merger. Returning your proxy does not deprive you of your right to attend the meeting and to vote your shares in person should you decide to do so. Granting your proxy will impact your dissenters' rights as discussed in this proxy statement/prospectus under the caption "The Merger—Dissenters' Rights."

        This proxy statement/prospectus provides you with detailed information about the proposed merger. You may obtain additional information about us and GE from documents we and GE have filed with the Securities and Exchange Commission. See "Where You Can Find More Information." We encourage you to read this entire document carefully.

    SIGNATURE

 

 

D. Dean Spatz
Chief Executive Officer and
Chairman of the Board of Directors

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the common shares to be issued by GE under this proxy statement/prospectus or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

        This proxy statement/prospectus is dated January 24, 2003, and is being first mailed to shareholders on or about January 27, 2003.


LOGO        

                
CORPORATE HEADQUARTERS

 

 

 

 
        5951 Clearwater Drive
Minnetonka, MN 55343-8995 USA

Osmonics, Inc.

Notice of Special Meeting of Shareholders

February 26, 2003

To the Shareholders of Osmonics, Inc.

        A special meeting of shareholders of Osmonics, Inc. will be held at the corporate offices of Osmonics, 5951 Clearwater Drive, Minnetonka, Minnesota 55343 on February 26, 2003 at 10:00 a.m. local time, and at any adjournments thereof, to consider and act upon the following matters:

        The board of directors has fixed the close of business on January 23, 2003, as the record date for the determination of shareholders entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of the special meeting. Therefore, only shareholders of record on January 23, 2003 are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.

        The accompanying proxy statement/prospectus describes the terms and conditions of the merger agreement and includes, as Annex A, a complete text of the merger agreement. We urge you to read the enclosed materials carefully for a complete description of the merger. The accompanying proxy statement/prospectus forms a part of this notice. You are cordially invited to attend the special meeting. Your proxy is being solicited by Osmonics' board of directors. Even if you plan to attend the special meeting, we urge you to submit a valid proxy promptly. If your shares of Osmonics common stock are registered in your own name, you may submit your proxy by signing, dating and returning the proxy, in the enclosed envelope, which requires no postage if mailed in the United States. If your shares are held in "street name" you should follow the directions your broker or bank provides.

        The merger agreement must be approved by the holders of a majority of the outstanding shares of Osmonics common stock.

        Your vote is very important. We urge you to review the enclosed materials and return your proxy card. Your board of directors recommends that shareholders vote for the adoption of the merger agreement and the merger.

By Order of the Board of Directors:

SIGNATURE

Ruth Carol Spatz
Secretary
January 24, 2003



REFERENCES TO ADDITIONAL INFORMATION

        This proxy statement/prospectus incorporates important business and financial information about General Electric Company and Osmonics, Inc. from documents that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You can obtain documents incorporated by reference in this proxy statement/prospectus by requesting them in writing, by telephone or by e-mail from the appropriate company at the following addresses:

Osmonics, Inc.
Investor Relations
  General Electric Company
Investor Relations

5951 Clearwater Drive

 

3135 Easton Turnpike
Minnetonka, MN 55343-8990   Fairfield, CT 06828-1077

Telephone: (952) 933-2277

 

Telephone: (203) 373-2816

e-mail: generalinvestor@osmonics.com

 

e-mail: pauline.berardi@corporate.ge.com

        If you would like to request any documents, please do so by February 19, 2003 in order to receive them before the special meeting.

        See "Where You Can Find More Information" for more information about the documents referred to in this proxy statement/prospectus.

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TABLE OF CONTENTS

 
  Page
QUESTIONS AND ANSWERS ABOUT THE MERGER   1

SUMMARY

 

6
  The Companies   6
  What You Will Receive in the Merger   7
  The Special Meeting   8
  Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger   8
  Opinion of Goldman, Sachs & Co.   8
  GE's Reasons for the Merger   9
  Interests of Certain Persons in the Merger   9
  Conditions to the Merger   9
  Restrictions on Solicitation   10
  Termination   10
  Fees   10
  Material United States Federal Income Tax Consequences   10
  Comparison of Rights of GE Shareholders and Osmonics Shareholders   11
  Comparative Market Price Information   11
  Listing and Trading of GE Common Stock   11
  Dissenters' Rights   11

SELECTED HISTORICAL FINANCIAL DATA OF GE

 

12

SELECTED HISTORICAL FINANCIAL DATA OF OSMONICS

 

13

COMPARATIVE PER SHARE DATA

 

14

COMPARATIVE STOCK PRICES AND DIVIDENDS

 

15
  Comparison   15
  GE Dividend Policy   15
  GE Stock Purchase Program   16
  Recent Earnings and Debt Offering   16

THE SPECIAL MEETING

 

17
  Date, Time and Place of the Special Meeting   17
  Purpose of the Special Meeting   17
  Recommendation of the Osmonics Board   17
  Required Vote   17
  Record Date   17
  Quorum   18
  Proxies   18
  Other Matters   18
  Revocation   19
  Solicitation of Proxies   19

THE MERGER

 

20
  General   20
  Background of the Merger   20
  Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger   25
  Opinion of Goldman, Sachs & Co.   28
  GE's Reasons for the Merger   36
  Interests of Certain Persons in the Merger; Conflicts of Interest   37
  Procedures for Cash Election and Exchange of Osmonics Common Stock Certificates   38

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  Anticipated Accounting Treatment   40
  Material United States Federal Income Tax Consequences   40
  Dissenters' Rights   42

THE MERGER AGREEMENT

 

46
  Form of the Merger   46
  Merger Consideration   46
  Effective Time   48
  Treatment of Stock Options   48
  Representations and Warranties   48
  Covenants and Agreements   50
  Regulatory Approvals   53
  Conditions to the Merger   54
  Termination   55
  Effect of Termination   55
  Fees   55
  Amendment and Waiver   56

COMPARATIVE RIGHTS OF GE AND OSMONICS SHAREHOLDERS

 

57

DESCRIPTION OF GE'S CAPITAL STOCK

 

66
  General   66
  Transfer Agent and Registrar   66

STOCK EXCHANGE LISTING

 

66

EXPERTS

 

66

LEGAL MATTERS

 

66

SHAREHOLDER PROPOSALS

 

67

WHERE YOU CAN FIND MORE INFORMATION

 

67
 
GE filings with the SEC

 

67
 
Osmonics filings with the SEC

 

68

SPECIAL NOTE CONCERNING FORWARD LOOKING STATEMENTS

 

70

Annex A—

 

Agreement and Plan of Merger by and among General Electric Company,
Oasis Acquisition, Inc. and Osmonics, Inc. dated as of November 3, 2002

 

A-1

Annex B—

 

Opinion of Goldman, Sachs & Co.

 

B-1

Annex C—

 

Section 302A.471 and Section 302A.473 of the Minnesota Business
Corporation Act

 

C-1

iii



QUESTIONS AND ANSWERS ABOUT THE MERGER

Q1:
What is the proposed transaction for which I am being asked to vote?

A1:
You are being asked to vote to adopt an agreement and plan of merger among General Electric Company, Oasis Acquisition, Inc., and Osmonics and the merger contemplated thereby. In this proxy statement/prospectus, we refer to the agreement and plan of merger as the "merger agreement." In the merger, Osmonics will be merged into Oasis Acquisition, a newly formed, wholly owned subsidiary of GE. After the merger, Oasis Acquisition will be the surviving corporation and will remain a wholly owned subsidiary of GE.

Q2:
What will I receive in exchange for my Osmonics stock in the merger?

A2:
In the merger each share of your Osmonics common stock will be exchanged for a fraction of a share of GE common stock having a market value of approximately $17.00, unless you elect to receive cash as discussed below. In this proxy statement/prospectus, we refer to the fraction of GE common stock to be issued for each share of Osmonics common stock as the "exchange ratio." The exchange ratio will be determined by dividing $17.00 by the average of the volume weighted sales price per share of GE common stock on the New York Stock Exchange for the ten consecutive full trading days ending on the third trading day prior to the effective time of the merger. You will not receive any fractional shares of GE common stock. Instead of any fractional shares, you will be paid cash for such fraction based on the closing price of GE common stock on the trading day immediately preceding the effective time of the merger.
Q3:
What happens if the aggregate number of shares for which cash elections are made, for which dissenters' rights are perfected and that are owned by GE or Oasis Acquisition exceeds 55% of the outstanding shares of Osmonics common stock? What effect would that have on me if I elected to receive cash for my Osmonics shares?

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A3:
Under the merger agreement, GE cannot pay cash for more than 55% of the shares of Osmonics common stock outstanding immediately prior to the effective time of the merger, including shares owned by Osmonics shareholders that have perfected their dissenters' rights and shares owned by GE or Oasis Acquisition. If the aggregate number of shares for which cash elections are made, for which dissenters' rights are perfected and that are owned by GE or Oasis Acquisition exceeds 55% of the outstanding shares of Osmonics common stock, then all shares of Osmonics common stock for which cash elections are made will be exchanged on a pro rata basis for a combination of cash and GE common stock so that the total number of Osmonics shares exchanged for cash (when combined with the total number of shares of Osmonics common stock for which dissenters' rights have been perfected and that are owned by GE or Oasis Acquisition) does not, in the aggregate, exceed 55% of the outstanding shares of Osmonics common stock.
Q4:
How do I make a cash election?

A4:
If your shares of Osmonics common stock are registered in your own name, complete and sign the enclosed cash election form and send it to Wells Fargo Shareowner Services, the exchange agent for the merger, together with the stock certificates representing the shares you wish to exchange for cash, properly endorsed for transfer, a book entry transfer of shares or a guarantee of delivery as described on the cash election form.
Q5:
Is there a deadline for making a cash election?

A5:
Yes. Your cash election form must be received by the exchange agent not later than 5:00 p.m. eastern time on the day of the special meeting. However, if the closing of the merger will occur more than four business days after the special meeting this deadline will be extended until two business days before the closing date and GE will publicly announce the closing date by press release at least five business days before the closing date.

Q6:
If I elect to receive cash, can I revoke that election and, if so, how?

A6:
If your shares of Osmonics common stock are registered in your own name, you may revoke any cash election form by submitting a written notice of revocation to the exchange agent at the address shown on the cash election form. The notice of revocation must be received by the exchange agent not later than the deadline for the submission of cash election forms discussed in the preceding question. After the deadline for submission of cash election forms, you may not revoke any elections you have made.

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Q7:
Can I make a partial election?

A7:
Yes. The cash election form provides for an election to be made for cash for all or any portion of your shares of Osmonics common stock.

Q8:
What if I do not send a cash election form or it is not received?

A8:
If the exchange agent does not receive a properly completed cash election form from you before the deadline, together with the stock certificates representing the shares you wish to exchange for cash, properly endorsed for transfer, a book entry transfer of shares or a guarantee of delivery as described on the cash election form, each share of your Osmonics common stock will be exchanged for a fraction of GE common stock based on the exchange ratio. You bear the risk of delivery and should send any cash election form by courier or by hand to the appropriate addresses shown in the cash election form.

Q9:
How will I know what the actual exchange ratio is?

A9:
GE will issue a press release prior to the special meeting that will disclose the exchange ratio assuming that the closing of the merger occurs on the business day immediately following the special meeting. If the closing of the merger is delayed for any reason, then the exchange ratio could change. Additionally, you can call toll free (877) 456-3488 to receive hypothetical information about the exchange ratio updated as of the week of your call.

Q10:
What are the U.S. federal income tax consequences of the merger to Osmonics shareholders?

A10:
Assuming that the merger is completed as currently contemplated, you will not recognize any gain or loss for U.S. federal income tax purposes if you exchange your Osmonics shares solely for GE shares in the merger, except with respect to cash received in lieu of a fractional GE share. You will recognize gain or loss if you exchange your Osmonics shares solely for cash in the merger. You will recognize gain, but not loss, if you exchange your Osmonics shares for a combination of GE shares and cash, but not in excess of the cash you receive in the merger. The tax consequences to you of the transaction will depend on your particular facts and circumstances and the form of merger consideration you receive. You should consult your tax advisor for a full understanding of the tax consequences of the merger to you.

Q11:
Am I entitled to dissenters' rights?

A11:
Yes. If you wish, you may dissent from the merger agreement and obtain a cash payment for the fair value of your shares. To exercise dissenters' rights, you must not vote in favor of the adoption of the merger and the merger agreement, and you must strictly comply with all of the applicable requirements of Minnesota law summarized under the heading "The Merger—Dissenters' Rights." The fair value of your shares, as determined by a court, may be more or less than the consideration to be paid in the merger.
Q12:
When and where is the special meeting?

A12:
The Osmonics special meeting is scheduled to take place on February 26, 2003 at 10:00 a.m., local time, at the corporate offices of Osmonics, 5951 Clearwater Drive, Minnetonka, Minnesota 55343.

Q13:
What vote is required for approval?

A13:
The merger agreement and the merger must be adopted by a majority of the outstanding shares of Osmonics common stock. Therefore, if you abstain or fail to vote, it will be the same as voting against the merger. You are entitled to vote on the merger if you held Osmonics common stock at the close of business on the record date, which is January 23, 2003. On that date, approximately 14,850,505 shares of

3


Q14:
When do you expect the merger to be completed?

A14:
We expect to complete the merger promptly after we receive Osmonics shareholder approval at the special meeting and after we receive all necessary regulatory approvals. We currently expect this to occur during the first quarter of 2003. Fulfilling some of the conditions to closing the merger, such as receiving certain governmental clearances or approvals, is not entirely within our control. If all the conditions to completion of the merger are not fulfilled during the first quarter of 2003, we expect to complete the merger as quickly as practicable once the conditions are fulfilled.

Q15:
If my shares are held in "street name" by my broker or bank, will my broker or bank vote my shares for me?

A15:
You should instruct your broker or bank to vote your shares by following the instructions your broker or bank provides. If you do not instruct your broker or bank, they will generally not have the discretion to vote your shares without your instructions. Because the proposals in this proxy statement/prospectus require an affirmative vote of a majority of the outstanding shares of Osmonics common stock for approval, these "broker non-votes" have the same effect as votes cast against the merger agreement.

Q16:
What do I need to do now?

A16:
After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy as soon as possible so that your shares may be voted at the special meeting. If your shares of Osmonics common stock are registered in your own name you may submit your proxy by filling out and signing the proxy card, and then mailing your signed proxy card in the enclosed envelope.
Q17:
May I change my vote after I have mailed my signed proxy card?

A17:
You may change your vote at any time before your proxy is voted at the special meeting. If your shares of Osmonics common stock are registered in your own name, you can do this in one of three ways. First, you can send a written notice stating that you want to revoke your proxy. Second, you can complete and submit a new proxy card. If you choose either of these two methods, you must submit your notice of revocation or your new proxy card to:
Q18:
If I plan to attend the Osmonics special meeting in person, should I still grant my proxy?

A18:
Yes. Whether or not you plan to attend the special meeting, you should grant your proxy as described above. The failure of an

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Q19:
Should I send in my stock certificates now?

A19:
If you are not making a cash election and are not completing a cash election form, you should not send your stock certificates. After the merger is completed, you will receive written instructions for exchanging your stock certificates.

Q20:
What does Osmonics' board of directors recommend?

A20:
Osmonics' board of directors has determined that the proposed merger is advisable, fair to and in the best interests of Osmonics and its shareholders and recommends that you vote FOR the proposal to adopt the merger agreement and the merger.

Q21:
Was the Osmonics' board of directors' recommendation unanimous?

A21:
No. Dean Spatz and Carol Spatz abstained from the board vote on the merger agreement.

Q22:
Will Osmonics continue as a public company?

A22:
No. If the merger occurs, Osmonics will no longer be publicly owned.

Q23:
Is GE's financial condition relevant to my decision to vote in favor of the transaction?

A23:
Yes. Even if you elect to receive only cash for your Osmonics common stock, because of the proration limitations discussed above, it is possible that you will receive GE common stock in the merger. Therefore, you should consider GE's financial condition before you vote. In considering GE's financial condition, you should review the documents incorporated by reference in this proxy statement/prospectus because they contain detailed business, financial and other information about GE.

Q24:
Who can help answer my questions?

A24:
If you have any questions about the merger, need assistance in voting your shares or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Innisfree M&A Incorporated toll free at (888) 750-5834.

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SUMMARY

        This summary is not intended to be complete and is qualified in all respects by the more detailed information appearing elsewhere in this proxy statement/prospectus. The terms "Osmonics" and the "Company" refer to Osmonics, Inc. and its subsidiaries, unless otherwise stated or indicated by the context. Shareholders are urged to review carefully the entire proxy statement/prospectus.

The Companies

General Electric Company

General Electric Company
3135 Easton Turnpike
Fairfield, Connecticut 06828-1077
(203) 373-2211

        GE, a New York corporation, is one of the largest and most diversified industrial corporations in the world. GE has engaged in developing, manufacturing and marketing a wide variety of products for the generation, transmission, distribution, control and utilization of electricity since its incorporation in 1892. Over the years, GE has developed or acquired new technologies or services that have broadened considerably the scope of its activities.

        GE's products include: major appliances; lighting products; industrial automation products; medical diagnostic imaging equipment; motors; electrical distribution and control equipment; locomotives; power generation and delivery products; nuclear power support services and fuel assemblies; commercial and military aircraft jet engines; and engineered materials, such as plastics, silicones and superabrasive industrial diamonds.

        GE's services include: product services; electrical product supply houses and electrical apparatus installation, engineering, and repair and rebuilding services. Through its affiliate, the National Broadcasting Company, Inc., GE delivers network television services, operates television stations, and provides broadcast, cable, internet and multimedia programming and distribution services. Through another affiliate, General Electric Capital Services, Inc., GE offers a broad array of financial and other services, including consumer financing, commercial and industrial financing, real estate financing, asset management and leasing, mortgage services, consumer savings and insurance services, and specialty insurance and reinsurance.

Oasis Acquisition

Oasis Acquisition, Inc.
3135 Easton Turnpike
Fairfield, Connecticut 06828-1077
(203) 373-2211

        Oasis Acquisition, Inc. is a Minnesota corporation and a wholly owned subsidiary of GE. Oasis Acquisition, Inc. was incorporated on October 28, 2002 solely for the purposes of effecting the merger with Osmonics. It has not carried on any activities other than in connection with the merger agreement.

        Following the merger, Oasis Acquisition, Inc. will continue the business of Osmonics.

6



Osmonics

Osmonics, Inc.
5951 Clearwater Drive
Minnetonka, Minnesota 55343-8990
(952) 933-2277

        Osmonics, a Minnesota corporation, is a leading developer, manufacturer and worldwide marketer of high-technology water purification and fluid filtration, fluid separation, and fluid handling equipment, as well as replaceable components used in purification, filtration, and separation equipment. These products are used by a broad range of consumer, industrial, commercial, and institutional customers. Osmonics, with worldwide employment exceeding 1,200, reported sales of $207 million in 2001. Osmonics consists of three major businesses: the Filtration and Separations Group, the Process Water Group and the Household Water Group. The Filtration and Separations Group supplies filtration and separation products for customers in the food and beverage, dairy, semiconductor, industrial and petrochemical businesses. The Process Water Group offers standard and custom-designed reverse osmosis water purification systems and components for beverage, health care, industrial, power and municipal markets. The Household Water Group provides point-of-use filtration and purification and point-of-entry control valve products for the residential and commercial markets.

What You Will Receive in the Merger (page 46)

        The merger agreement provides that each share of Osmonics common stock issued and outstanding immediately prior to the effective time of the merger (other than Osmonics common stock owned by Osmonics or GE and other than Osmonics common stock as to which dissenters' rights have been properly perfected) will be converted into the right to receive the number of shares of GE common stock determined by dividing $17.00 by the average of the volume weighted sales prices per share of GE common stock on the NYSE for the ten consecutive full trading days ending on the third trading day immediately preceding, but not including, the effective time of the merger. Each Osmonics shareholder may elect to receive $17.00 in cash rather than GE common stock for all or any portion of the Osmonics shares owned by such shareholder. Under the merger agreement, however, GE cannot pay cash for more than 55% of the shares of Osmonics common stock outstanding immediately prior to the effective time of the merger, including shares owned by Osmonics shareholders that have perfected their dissenters' rights and shares owned by GE or Oasis Acquisition. If the aggregate number of shares for which cash elections are made, for which dissenters' rights are perfected and that are owned by GE or Oasis Acquisition exceeds 55% of the outstanding shares of Osmonics common stock, then all shares of Osmonics common stock for which cash elections are made will be exchanged on a pro rata basis for a combination of cash and GE common stock so that the total number of Osmonics shares exchanged for cash (when combined with the total number of shares of Osmonics common stock for which dissenters' rights have been perfected and that are owned by GE or Oasis Acquisition) does not, in the aggregate, exceed 55% of the outstanding shares of Osmonics common stock. A pro rata reduction in the cash consideration paid to Osmonics shareholders electing cash will also be made if the aggregate cash consideration payable to shareholders who have elected cash plus $17.00 multiplied by the sum of the number of shares of Osmonics common stock for which dissenters' rights have been perfected and the number of shares of Osmonics common stock that are owned by GE or Oasis Acquisition exceeds 55% of the fair market value, as of the date of the merger, of the aggregate cash and stock consideration payable in the merger, or if a reduction is otherwise necessary to allow GE's and Osmonics' outside legal counsel to deliver their opinions as to the qualification of the merger as a "reorganization" under Section 368(a) of the Internal Revenue Code.

        If you wish to elect to receive cash for any or all of your Osmonics shares and your Osmonics shares are registered in your own name, you must fill out and return to the exchange agent the cash

7



election form included with this proxy statement/prospectus, together with the stock certificates representing the shares you wish to exchange for cash, properly endorsed for transfer, a book entry transfer of shares or a guarantee of delivery, as described on the cash election form.

        The cash election form and related stock certificates or other documentation must be received by the exchange agent not later than 5:00 p.m. eastern time on the date of the special meeting. If the closing of the merger will occur more than four business days after the special meeting, this deadline will be extended until two business days before the closing date and GE will publicly announce the closing date by press release at least five business days in advance.

        If you wish to elect to receive cash for your Osmonics shares and your Osmonics shares are held in "street name," you must follow the instructions your broker or bank provides.

The Special Meeting (page 17)

        The Osmonics special meeting will take place at the offices of Osmonics at 5951 Clearwater Drive, Minnetonka, Minnesota 55343 on February 26, 2003 at 10:00 a.m., local time. At the special meeting, the holders of Osmonics common stock will be asked to adopt the merger agreement and the merger. The close of business on January 23, 2003, is the record date for determining if you are entitled to vote at the special meeting. On that date, there were approximately 14,850,505 shares of Osmonics common stock outstanding. Each share of Osmonics common stock is entitled to one vote at the special meeting. The affirmative vote of a majority of the outstanding shares of Osmonics common stock is required to adopt the merger agreement and the merger. On the record date, directors and executive officers of Osmonics beneficially owned and had the right to vote approximately 3,302,315 shares of Osmonics common stock entitling them to exercise approximately 22% of the voting power of the Osmonics common stock.

Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger (page 25)

        Osmonics' board of directors has approved the merger agreement. Osmonics' board believes that the merger agreement is advisable and fair to and in the best interest of Osmonics and its shareholders and recommends that Osmonics' shareholders vote for the adoption of the merger agreement and the merger. In reaching its decision, the Osmonics board considered a number of factors, which are described in more detail in "The Merger—Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger" beginning on page 25. The Osmonics board of directors did not assign relative weights to the factors described in that section or the other factors considered by it. In addition, the Osmonics board did not reach any specific conclusion on each factor considered, but conducted an overall analysis of these factors. Individual members of the Osmonics board may have given different weight to different factors.

Opinion of Goldman, Sachs & Co. (page 28)

        Goldman, Sachs & Co. delivered its written opinion, dated November 3, 2002, to Osmonics' board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in such opinion, the stock consideration and the cash consideration to be received by the holders of Osmonics common stock, taken in the aggregate, is fair from a financial point of view to such holders.

        The full text of the written opinion of Goldman Sachs, dated November 3, 2002, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement/prospectus. You should read the opinion in its entirety. Goldman Sachs provided its opinion for the information and assistance of Osmonics' board of directors in connection with the board's consideration of the transaction contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to

8



how any holder of Osmonics common stock should vote or make any election with respect to the transaction contemplated by the merger agreement.

GE's Reasons for the Merger (page 36)

        The board of directors of GE approved the merger agreement on October 28, 2002 after GE's senior management discussed with the board of directors the business, assets, liabilities, results of operations and financial performance of Osmonics, the complementary nature of certain of Osmonics' products and capabilities and the products of GE Water, the expectation that Osmonics could be readily integrated with GE Water, and the potential benefits that could be realized as a result of such integration.

Interests of Certain Persons in the Merger (page 37)

        In considering the recommendation of Osmonics' board of directors with respect to the merger, you should be aware that some of the directors and executive officers of Osmonics have interests in the merger that are different from, or are in addition to, the interests of Osmonics shareholders generally. These interests relate to, among other things:

Conditions to the Merger (page 54)

        The obligations of GE and Osmonics to complete the merger are conditioned upon each having received an opinion of its counsel that the merger qualifies as a "reorganization" under Section 368(a) of the Internal Revenue Code, the other party's representations and warranties being true and correct, except as has not had or would not reasonably be expected to have a material adverse effect, and the other party having complied in all material respects with such party's covenants. In addition, GE's and Osmonics' obligations are further conditioned on:

9


Restrictions on Solicitation (page 51)

        Subject to certain exceptions, the merger agreement precludes Osmonics, its subsidiaries, officers, directors, employees, investment bankers, attorneys, accountants and other representatives from directly or indirectly soliciting, knowingly encouraging, participating in any discussions regarding, furnishing any non-public information with respect to, or assisting or facilitating any proposal for any third party to acquire more than 20% ownership of Osmonics, its subsidiaries, or its assets.

Termination (page 55)

        The merger agreement may be terminated by the mutual consent of GE and Osmonics. Additionally, either GE or Osmonics may terminate the merger agreement if:

        Subject to certain conditions and the payment to GE of a $7.7 million termination fee, Osmonics may terminate the merger agreement to accept an acquisition proposal that is more favorable to Osmonics' shareholders than the proposed merger with GE.

        GE may also terminate the merger agreement if Osmonics' board of directors adversely withdraws, modifies or changes its recommendation of the merger agreement or recommends an alternative acquisition transaction with a third party.

Fees (page 55)

        The merger agreement requires Osmonics to pay GE a termination fee of $7.7 million if the merger agreement is terminated under certain circumstances. If the merger agreement is terminated because Osmonics' shareholders do not adopt the merger agreement and the merger, GE can collect up to $750,000 of expenses actually incurred by GE on or after October 28, 2002. Any expenses reimbursed to GE will reduce any termination fee, described in the first sentence of this paragraph, that may be payable by Osmonics.

Material United States Federal Income Tax Consequences (page 40)

        If the merger is completed as currently contemplated, then, in general,

10


        Certain exceptions and/or other considerations may apply to the above. See "The Merger—Material United States Federal Income Tax Consequences."

Comparison of Rights of GE Shareholders and Osmonics Shareholders (page 57)

        After the merger, Osmonics shareholders who receive GE common stock in the merger will become GE shareholders and their rights as shareholders will be governed by the certificate of incorporation and bylaws of GE and the New York Business Corporation Law (the "NYBCL"). There are a number of differences between the articles of incorporation and bylaws of GE and the NYBCL and the articles of incorporation and bylaws of Osmonics and the Minnesota Business Corporation Act. These differences are summarized under "Comparative Rights of GE and Osmonics Shareholders."

Comparative Market Price Information (page 15)

        Shares of GE common stock and Osmonics common stock are listed on the New York Stock Exchange. GE is listed under the trading symbol "GE" and Osmonics is listed under the trading symbol "OSM." On November 1, 2002, the last full trading day prior to the public announcement of the merger agreement, the last sales price of Osmonics common stock was $13.50 per share and the last sales price of GE common stock was $26.00 per share, each as reported on the NYSE Composite Tape.

        On January 23, 2003, the most recent practicable date prior to the printing of this proxy statement/prospectus, the last sales price of Osmonics common stock was $17.02 per share and the last sales price of GE common stock was $23.95 per share. We urge you to obtain current market quotations.

Listing and Trading of GE Common Stock (page 15)

        Shares of GE common stock received by Osmonics shareholders in the merger will be listed on the New York Stock Exchange. After completion of the merger, shares of GE common stock will continue to be traded on the New York Stock Exchange, but shares of Osmonics common stock will no longer be listed or traded.

Dissenters' Rights (page 42)

        Under Minnesota law, Osmonics shareholders have the right to dissent from the merger agreement and obtain payment for the fair value of their shares of Osmonics common stock in connection with the merger. A discussion of these dissenters' rights is included in this proxy statement/prospectus beginning on page 42. The relevant provisions of the Minnesota Business Corporation Act are included as Annex C to this proxy statement/prospectus.

11



SELECTED HISTORICAL FINANCIAL DATA OF GE

        The following selected financial data for each of the five years in the period ended December 31, 2001 have been derived from GE's audited consolidated financial statements. The financial data as of September 30, 2002 and 2001, and for each of the nine-month periods then ended, have been derived from GE's unaudited condensed consolidated financial statements which include, in management's opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of operations and financial position of GE for the periods and dates presented. This data should be read in conjunction with the respective audited and unaudited consolidated financial statements of GE, including the notes thereto, incorporated herein by reference and with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" of GE contained in, or incorporated in, the Annual Reports and other information that GE has filed with the SEC. See "Where You Can Find More Information."

 
  Nine Months Ended September 30,
  For the Year Ended December 31,
 
 
  2002
  2001
  2001
  2000
  1999
  1998
  1997
 
 
  (in millions, except per share amounts or as otherwise indicated)

 
Revenues   $ 96,320   $ 91,938   $ 125,913   $ 129,853   $ 111,630   $ 100,469   $ 90,840  
Net Earnings   $ 11,016   $ 9,751   $ 13,684   $ 12,735   $ 10,717   $ 9,296   $ 8,203  
Dividends Declared   $ 5,370   $ 4,770   $ 6,555   $ 5,647   $ 4,786   $ 4,081   $ 3,535  
Return Earned on Average Share Owners' Equity (excluding effect of accounting changes)     20.8 %   19.8 %   27.1 %   27.5 %   26.8 %   25.7 %   25.0 %
Earnings Per Share Of Common Stock (1)                                            
  Basic   $ 1.11   $ .98   $ 1.38   $ 1.29   $ 1.09   $ .95   $ .83  
  Diluted   $ 1.10   $ .97   $ 1.37   $ 1.27   $ 1.07   $ .93   $ .82  
Dividends Declared Per Share of Common Stock (1)   $ .54   $ .48   $ .66   $ .57   $ .48  2/3 $ .41  2/3 $ .36  
Balance Sheet Data (as of the end of the period)                                            
  Total Assets   $ 555,523   $ 460,097   $ 495,023   $ 437,006   $ 405,200   $ 355,935   $ 304,012  
  Long-term Borrowings   $ 134,036   $ 81,035   $ 79,806   $ 82,132   $ 71,427   $ 59,663   $ 46,603  
Shares Outstanding Average (in thousands) (1)     9,941,111     9,933,431     9,932,245     9,897,110     9,833,478     9,806,995     9,824,075  

(1)
Reflects the three-for-one stock split effective on April 27, 2000 and the two-for-one stock split effective April 28, 1997.

12



SELECTED HISTORICAL FINANCIAL DATA OF OSMONICS

        The following selected financial data for each of the five years in the period ended December 31, 2001 have been derived from Osmonics' consolidated financial statements, which have been audited by Deloitte & Touche LLP, independent public auditors. The financial data as of September 30, 2002 and 2001, and for each of the nine-month periods then ended, have been derived from Osmonics' unaudited condensed consolidated financial statements which include, in management's opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of operations and financial position of Osmonics for the periods and dates presented. This data should be read in conjunction with the respective audited and unaudited consolidated financial statements of Osmonics, including the notes thereto, incorporated herein by reference and with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" of Osmonics contained in, or incorporated in, the Annual Reports and other information that Osmonics has filed with the SEC. See "Where You Can Find More Information."

        Osmonics historically has not paid cash dividends on its common shares.

 
  Nine Months Ended September 30,
  For the Year Ended December 31,
 
 
  2002
  2001
  2001
  2000
  1999
  1998
  1997
 
 
  (in thousands, except per share amounts)

 
Revenues   $ 156,989   $ 153,395   $ 207,439   $ 200,139   $ 187,028   $ 179,742   $ 164,905  
Net Earnings   $ 7,382   $ 5,031   $ 6,179   $ 5,419   $ 964   $ (1,053 ) $ 9,793  
Return Earned on Average Share Owners' Equity     6.2 %   4.5 %   5.5 %   5.1 %   0.9 %   (1.0 %)   9.8 %
Earnings Per Share Of Common Stock                                            
  Basic   $ .51   $ .35   $ .43   $ .38   $ .07   $ (.08 ) $ .70  
  Diluted   $ .50   $ .34   $ .42   $ .38   $ .07   $ (.08 ) $ .68  
Balance Sheet Data (as of the end of the period)                                            
  Total Assets   $ 179,517   $ 188,245   $ 184,798   $ 188,692   $ 194,366   $ 194,049   $ 164,483  
  Long-term Borrowings   $ 16,416   $ 19,984   $ 20,449   $ 24,603   $ 32,201   $ 31,665   $ 13,792  
  Shares Outstanding Average     14,554     14,448     14,464     14,329     14,162     13,976     14,031  

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COMPARATIVE PER SHARE DATA

        The following tables present historical per share data of Osmonics and GE as of and for the nine and twelve months ended September 30, 2002 and December 31, 2001, respectively. The data presented below should be read in conjunction with the historical financial statements of GE and Osmonics incorporated by reference in this proxy statement/prospectus.

        Diluted earnings per share data are calculated using the diluted weighted average equivalent shares. Because the number of shares of GE common stock to be issued in the merger will not be known until three trading days prior to the completion of the merger, Osmonics' equivalent per share data cannot be computed at this time. That information will be available via telephone, toll-free, at (877) 456-3488. Hypothetical Osmonics equivalent per share data is presented below using the closing sale price of a share of GE common stock on January 23, 2003 which was $23.95 and a resulting hypothetical exchange ratio of 0.7098. The hypothetical Osmonics' equivalent per share data was calculated by multiplying the actual GE per share data by the hypothetical exchange ratio of 0.7098. No pro forma GE information giving effect to the merger is presented because the merger will not materially change the GE historical amounts presented.

        Osmonics historically has not paid cash dividends on its common shares.

 
  Nine Months Ended
September 30, 2002

  Year Ended
December 31, 2001

Osmonics Historical            
  Earnings per share, diluted   $ .50   $ .42
  Book Value per share (as of end of period)   $ 8.56   $ 7.98

GE Historical

 

 

 

 

 

 
  Earnings per share, diluted   $ 1.10   $ 1.37
  Dividends declared per share   $ .54   $ .66
  Book Value per share (as of end of period)   $ 6.26   $ 5.52

Hypothetical Osmonics Equivalent

 

 

 

 

 

 
  Earnings per share, diluted   $ .78   $ .97
  Dividends per share   $ .38   $ .47
  Book Value per share (as of end of period)   $ 4.44   $ 3.92

14



COMPARATIVE STOCK PRICES AND DIVIDENDS

Comparison

        GE common stock and Osmonics common stock are each listed and traded on the New York Stock Exchange under the symbols "GE" and "OSM," respectively. The following table sets forth, for the periods indicated, the high and low sales prices per share of GE common stock and Osmonics common stock as reported on the NYSE Composite Tape. The table also sets forth the quarterly cash dividends per share declared by GE with respect to its common stock. Osmonics has not paid dividends with respect to its common stock.

 
  GE COMMON STOCK (1)
  OSMONICS COMMON STOCK
 
  High
  Low
  Dividends
  High
  Low
2000                              
  First Quarter   $ 54.96   $ 41.67   $ 0.13  2/3 $ 9.94   $ 7.69
  Second Quarter   $ 55.98   $ 47.69   $ 0.13  2/3 $ 9.50   $ 7.63
  Third Quarter   $ 60.50   $ 49.50   $ 0.13  2/3 $ 9.50   $ 7.94
  Fourth Quarter   $ 59.94   $ 47.19   $ 0.16   $ 8.13   $ 6.81

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  First Quarter   $ 47.99   $ 35.98   $ 0.16   $ 8.05   $ 6.81
  Second Quarter   $ 52.90   $ 38.57   $ 0.16   $ 13.89   $ 7.15
  Third Quarter   $ 49.59   $ 28.25   $ 0.16   $ 16.30   $ 10.00
  Fourth Quarter   $ 41.59   $ 35.88   $ 0.18   $ 15.45   $ 11.30

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  First Quarter   $ 41.29   $ 33.88   $ 0.18   $ 15.75   $ 10.40
  Second Quarter   $ 37.30   $ 27.23   $ 0.18   $ 17.50   $ 13.30
  Third Quarter   $ 32.75   $ 22.86   $ 0.18   $ 16.07   $ 11.33
  Fourth Quarter   $ 27.98   $ 21.40   $ 0.19   $ 17.00   $ 10.00

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  First Quarter (through January 23, 2003)   $ 26.26   $ 23.51   $   $ 17.10   $ 16.93

(1)
Reflects the three-for-one stock split effective April 27, 2000.

        On November 1, 2002, the last trading day prior to the public announcement of the execution of the merger agreement, the closing price of Osmonics common stock was $13.50 per share and the closing price of GE common stock was $26.00 per share, each as reported on the NYSE Composite Tape. On January 23, 2003, the most recent practicable trading day prior to the printing of this proxy statement/prospectus, the closing price of Osmonics common stock was $17.02 per share and the closing price of GE common stock was $23.95 per share. The market prices of shares of Osmonics common stock and GE common stock are subject to fluctuation. As a result, Osmonics shareholders are urged to obtain current market quotations. On January 23, 2003, there were approximately 14,850,505 shares of Osmonics common stock outstanding and on December 31, 2002, there were approximately 9,969,893,660 shares of GE common stock outstanding.

GE Dividend Policy

        The holders of GE common stock receive dividends if and when declared by the GE board of directors out of funds legally available therefor. GE expects to continue paying quarterly cash dividends on GE common stock. The declaration and payment of dividends after the merger will depend upon

15


business conditions, operating results and the GE board of directors' consideration of other relevant factors. GE declared dividends of $6.555 billion in 2001, or approximately 48% of GE's 2001 consolidated earnings. Per share dividends declared of $.66 in 2001 increased 16% from 2000.

GE Stock Purchase Program

        By December 2001, GE had purchased and placed into treasury a total of more than one billion shares of its common stock having an aggregate cost of $20.6 billion under a share repurchase program begun in December 1994. In December 2001, GE's board of directors increased the authorization to repurchase GE common stock from $22 billion to $30 billion. These repurchased shares are from time to time reissued upon the exercise of employee stock options, conversion of convertible securities and for other corporate purposes. GE announced that its share repurchase program will be continued at a reduced level of approximately $500 million in 2003.

Recent Earnings and Debt Offering

        GE's unaudited consolidated revenues, earnings before income taxes and accounting changes, earnings before accounting changes and net earnings for the year ended December 31, 2002 were $131.7 billion, $18.9 billion, $15.1 billion and $14.1 billion, respectively. These results, which are subject to audit completion, compared with the following respective audited amounts for the year 2001: $125.9 billion, $19.7 billion, $14.1 billion and $13.7 billion. Factors affecting earnings in 2002 included record years by Power Systems, NBC, Commercial Finance, Consumer Finance and Medical Systems, sound performances by Aircraft Engines and Aviation Services in a very challenging business environment, much higher underwriting losses at Employers Reinsurance Corporation (ERC), and difficult years at Plastics and Lighting. With regard to accounting changes, in the first quarter of 2002, GE recorded a non-cash transition charge to earnings of $1.0 billion for impairment of goodwill as required for the adoption of Statement of Financial Accounting Standards No. 142. In the first quarter of 2001, GE recorded a one time non-cash transition charge of $0.4 billion as required for the adoption of Statement of Financial Accounting Standards No. 133 and Emerging Issues Task Force Issue 99-20, which provided new accounting rules for derivatives and other financial instruments.

        Unaudited consolidated fourth quarter 2002 revenues, earnings before income taxes and accounting changes, earnings before accounting changes and net earnings were $35.4 billion, $3.0 billion, $3.1 billion and $3.1 billion, respectively. These results, which are also subject to audit completion, compared with the following respective unaudited amounts for the fourth quarter of 2001: $34.0 billion, $5.3 billion, $3.9 billion and $3.9 billion. Fourth quarter 2002 earnings reflect charges of $1.4 billion for adverse development at ERC, a $0.5 billion gain from NBC's exchange of certain assets for the cable network Bravo and $0.3 billion of restructuring and other charges, all on an after-tax basis.

        On January 23, 2003, GE agreed to sell $5 billion of its 5% senior unsecured notes due 2013. The sale of these notes is expected to close on January 28, 2003.

16



THE SPECIAL MEETING

Date, Time and Place of the Special Meeting

        We are sending you this proxy statement/prospectus as part of a solicitation of proxies by the board of directors of Osmonics for use at the special meeting of Osmonics shareholders. We are first mailing this proxy statement/prospectus, including a notice of the special meeting and a form of proxy, on or about January 27, 2003.

        The special meeting is scheduled to be held at the corporate offices of Osmonics on:

February 26, 2003
10:00 a.m., local time
5951 Clearwater Drive
Minnetonka, Minnesota 55343

Purpose of the Special Meeting

        The purpose of the special meeting is to vote on a proposal to adopt the merger agreement and the merger. As a result of the merger each share of Osmonics common stock will be exchanged for a fraction of a share of GE common stock having a market value of approximately $17.00, determined during a pre-closing measurement period. Each shareholder may elect to receive $17.00 in cash per share of Osmonics common stock instead of GE shares, subject to proration so that the total cash paid does not exceed 55% of the total merger consideration. Osmonics is not proposing any matters other than adoption of the merger agreement and the merger at the Osmonics special meeting.

Recommendation of the Osmonics Board

        Osmonics' board of directors has approved the merger agreement. Osmonics' board believes that the merger agreement is advisable and fair to and in the best interests of Osmonics and its shareholders and recommends that Osmonics' shareholders vote for the adoption of the merger agreement. See "The Merger—Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger."

Required Vote

        Adoption of the merger agreement and the merger requires the affirmative vote of a majority of the outstanding shares of Osmonics common stock entitled to vote at the special meeting. Each share of outstanding Osmonics common stock entitles its holder to one vote.

        If you hold your shares in an account with a broker or bank, you must instruct the broker or bank on how to vote your shares. If an executed proxy card returned by a broker or bank holding shares indicates that the broker or bank does not have authority to vote on the proposal to adopt the merger agreement and the merger, the shares will be considered present at the meeting for purposes of determining the presence of a quorum, but will not be voted on the proposal to adopt the merger agreement. This is called a "broker non-vote." Your broker or bank will vote your shares only if you provide instructions on how to vote by following the instructions provided to you by your broker or bank.

Record Date

        Osmonics' board of directors has fixed the close of business on January 23, 2003 as the record date for the special meeting. At that date, there were approximately 14,850,505 shares of Osmonics common stock outstanding. Only shareholders of record on the record date will receive notice of and be entitled to vote at the meeting. No other voting securities of Osmonics are outstanding.

17


        As of the record date, directors and executive officers of Osmonics beneficially owned and had the right to vote approximately 3,302,315 shares of Osmonics common stock entitling them to exercise approximately 22% of the voting power of the Osmonics common stock.

Quorum

        A majority of the shares of Osmonics common stock entitled to vote must be present at the special meeting, either in person or by proxy, in order for there to be a quorum at the special meeting. There must be a quorum in order for the vote on the merger agreement to be taken.

        We will count the following shares of Osmonics common stock as present at the special meeting for purposes of determining whether or not there is a quorum:

Proxies

        Whether or not you plan to attend the special meeting in person you should submit your proxy as soon as possible. Shareholders whose shares of Osmonics common stock are registered in their own name may submit their proxies by filling out and signing the proxy card, and then mailing the signed proxy card in the enclosed envelope. Shareholders whose shares are held in "street name" must follow the instructions provided by their broker or bank to vote their shares.

        All properly submitted proxies received by Osmonics before the special meeting that are not revoked prior to being voted at the special meeting will be voted at the special meeting in accordance with the instructions indicated on the proxies or, if no instructions were provided, FOR adoption of the merger agreement and the merger.

        Proxies marked "Abstain" will not be voted at the special meeting. Abstentions and broker non-votes will have the same effect as votes against adoption of the merger agreement and the merger. Accordingly, Osmonics' board of directors urges you to promptly submit your proxy.

        Submitting a proxy will impact your dissenters' rights. See "The Merger—Dissenters' Rights."

Other Matters

        As of the date of this proxy statement/prospectus, Osmonics' board of directors knows of no other matters that will be presented for consideration at the special meeting other than as described in this proxy statement/prospectus. If any other matters properly come before the special meeting of Osmonics shareholders, or any adjournments or postponements of the special meeting are proposed, and are properly voted upon, the enclosed proxies will give the individuals that they name as proxies discretionary authority to vote the shares represented by these proxies as to any of these matters. The individuals named as proxies intend to vote or not to vote in accordance with the recommendation of Osmonics' board of directors.

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Revocation

        Your grant of a proxy on the enclosed proxy card does not prevent you from voting in person or otherwise revoking your proxy at any time before it is voted at the special meeting. If your shares of Osmonics stock are registered in your own name, you can revoke your proxy, by:

        


        If you have instructed a broker or bank to vote your shares, you must follow the instructions received from your broker or bank if you wish to change those instructions.

Solicitation of Proxies

        In addition to soliciting proxies by mail, officers, directors and employees of Osmonics, without receiving additional compensation, may solicit proxies by telephone, telegraph, in person or by other means. Arrangements also will be made with brokerage firms and other custodians, nominees and fiduciaries to forward proxy solicitation materials to the beneficial owners of Osmonics common stock held of record by those persons, and GE and Osmonics will reimburse these brokerage firms, custodians, nominees and fiduciaries for related, reasonable out-of-pocket expenses they incur. Osmonics has also made arrangements with Innisfree M&A Incorporated to help in soliciting proxies for the proposed merger and in communicating with shareholders. Osmonics has agreed to pay Innisfree M&A Incorporated approximately $10,000 plus expenses for its services. GE and Osmonics will pay their respective expenses incurred in connection with the printing and mailing of this proxy statement/prospectus.

19



THE MERGER

General

        On November 2, 2002, Osmonics' board of directors approved the merger agreement, which provides for the acquisition by GE of Osmonics through a merger of Osmonics with and into Oasis Acquisition, a newly formed and wholly owned subsidiary of GE. After the merger, Oasis Acquisition will be the surviving corporation and will remain a wholly owned subsidiary of GE. Upon completion of the merger, each share of your Osmonics common stock will be converted into a fraction of a share of GE common stock or, at your election and subject to proration, $17.00 in cash. The conversion of Osmonics shares into GE shares will be based on a conversion ratio determined by dividing $17.00 by the average of the volume weighted sales prices per share of GE common stock on the NYSE Composite Tape for the ten consecutive full trading days ending on the third trading day prior to, but not including, the date on which the merger occurs and then rounding to the nearest ten-thousandth. The result of this equation is the fractional share of GE common stock to be exchanged for each share of Osmonics common stock. You will have your shares aggregated, except for those shares, if any, for which you elect to receive cash, and will receive whole shares of GE common stock plus cash instead of fractional shares, if any.

Background of the Merger

        Over the past several years, the water purification and filtration industry has undergone significant change, including the acceleration of a trend towards consolidation. Mergers in the industry have changed the competitive landscape, and Osmonics' board of directors recognized the challenges of continuing to compete against larger companies with greater financial and operational resources and larger market capitalizations. Osmonics' board also recognized the possibility of new entrants, including those who were already developing plans for expansion in the industry. In late 2000 and early 2001, Osmonics' board of directors became increasingly concerned about Osmonics' repeated difficulties in meeting management financial projections for the business and about the price of Osmonics' stock, which was near a ten-year low. At approximately the same time (in December of 2000) Osmonics was contacted by a party who expressed interest in acquiring Osmonics. Although Osmonics' management had made strides in restructuring and refocusing its business and developing growth opportunities, it was the consensus of a majority of the board of directors that the board should consider other strategic alternatives given the directors' concerns about increasing competition in a consolidating marketplace, financial performance and stock price performance.

        In light of the inquiry regarding the acquisition of Osmonics and the challenges facing the company, Osmonics engaged Goldman, Sachs & Co. in February 2001 to help Osmonics review its financial alternatives. In April 2001, Goldman Sachs reviewed for Osmonics' board various financial alternatives, including the sale of Osmonics, expansion through acquisitions, potential recapitalization transactions or remaining independent and executing management's strategic plan for the business. At that time, Osmonics' board decided that Osmonics should continue executing its existing strategic plan.

        Although the Osmonics board determined in April 2001 to continue executing Osmonics' existing strategic plan, the scheduled elimination of the "pooling of interests" accounting treatment for business combinations triggered the Osmonics board's renewed focus in May 2001 on a possible business combination involving a potentially attractive deal structure. The opportunity to use pooling of interests accounting for a transaction led Osmonics to have discussions regarding a potential business combination with the party who had earlier expressed interest in such a transaction. While these discussions did not result in an agreement prior to July 1, 2001, when the pooling of interests accounting treatment was eliminated for business combinations, such discussions were not terminated.

        Separately, beginning in the fall of 2001, Jon Freedman, Leader, Business Development of GE's Power Systems division, and Dean Spatz, Osmonics' Chief Executive Officer, began a number of informal discussions. These discussions led to a meeting in December 2001 of John Rice, Mark Little

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and David Tucker, Chief Executive Officer, Vice President, Energy Products and General Manager, Business Development, respectively, of GE's Power Systems division, Mr. Freedman and Mr. Spatz at which the parties discussed their businesses and GE suggested to Osmonics a potential acquisition of Osmonics by GE. No specific proposal was made, and Mr. Spatz told GE he would discuss the possibility of a transaction with Osmonics' board.

        Given the earlier discussions and the concerns that had previously led Osmonics' board to review its strategic alternatives, in November 2001 Osmonics entered into a new engagement letter with Goldman Sachs providing that Goldman Sachs would act as financial advisor to Osmonics in connection with a possible sale of all or a portion of Osmonics.

        At a meeting of the Osmonics board on January 23, 2002, the board reviewed management's assessment of Osmonics' current position, including, among other matters, Osmonics' strategic plan, projections and financial results. The board also discussed, among other matters, the consolidation trend in its industry and the implications for Osmonics of attempting to remain independent in light of that trend in addition to the possibility that potential buyers would provide a higher value for Osmonics than would be available in the equity markets if Osmonics remained independent. Representatives of Goldman Sachs reviewed for the board Osmonics' potential financial alternatives, including executing Osmonics' strategic plan, a sale, a merger or a leveraged buyout transaction. In connection with this overview of alternatives, Goldman Sachs reviewed potential candidates that it had identified together with management as possible buyers of Osmonics. The board discussed various alternatives and Goldman Sachs responded to questions from the board. The board decided that it was in the best interests of Osmonics and its shareholders to begin a more organized process for soliciting proposals to acquire Osmonics, and the board authorized Goldman Sachs to assist Osmonics in doing so. At this time, Osmonics engaged the law firm of Simpson Thacher & Bartlett to assist the company with respect to legal matters related to a possible business combination transaction, in coordination with Maslon Edelman Borman & Brand LLP, Osmonics' regular outside counsel.

        Following Osmonics' 2002 annual meeting in May 2002, the management of Osmonics, with the assistance of Goldman Sachs, began to compile a list of prospective buyers to be contacted directly by Goldman Sachs regarding their interest in a potential transaction. Representatives of Goldman Sachs also assisted management in preparing a confidential presentation on Osmonics for potential use in future discussions with interested parties. During June of 2002, Goldman Sachs contacted 12 companies on behalf of Osmonics to ascertain their potential interest in Osmonics. During June and July of 2002, with the assistance of legal counsel, Osmonics negotiated and entered into confidentiality agreements with seven parties, including GE, for the purpose of facilitating the delivery of confidential information regarding Osmonics to the parties who expressed an interest in receiving such information. During July and August 2002, members of Osmonics' management provided a confidential presentation to, and held meetings with, the parties that had entered into confidentiality agreements with Osmonics. Those parties also conducted an initial due diligence review of Osmonics. In early August, at Osmonics' direction, Goldman Sachs sent letters to those parties inviting them to submit preliminary indications of interest with respect to a business combination with Osmonics.

        On August 22, 2002, Osmonics received preliminary indications of interest from two parties, one of which was GE. GE's preliminary indication of interest proposed a price of $18.00 per share, subject to, among other qualifications and assumptions, the completion of additional due diligence. On August 27, 2002, the Osmonics board held a meeting to review the preliminary indications of interest received. At this meeting, the board instructed Goldman Sachs to invite both parties to conduct further due diligence and submit final bids. On September 18, 2002, Goldman Sachs sent letters to both parties on behalf of Osmonics outlining the procedures for submitting a final bid for Osmonics. Shortly thereafter, a draft merger agreement was circulated to both parties.

        During the week of October 7, 2002, Osmonics received final bids and detailed mark-ups of the draft merger agreement from the two parties that had submitted preliminary indications of interest. GE

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proposed a price of $16.50 per share, payable (as requested by Osmonics in the draft merger agreement provided to the bidders) in shares of GE stock with a value equal to that dollar amount or, at the election of a shareholder, $16.50 in cash, subject to proration so that the total cash paid did not exceed 55% of the total merger consideration. GE proposed that shareholders of Osmonics, who were not identified but who GE stated would represent ownership of 19.9% of the outstanding common shares, enter into voting agreements committing them to vote their shares in favor of the GE transaction and against any competing transactions.

        The other bidder proposed a lower per share amount than GE. This bidder proposed an exchange ratio that varied depending upon the price of the bidder's common stock over a pre-closing measurement period, subject to a maximum and minimum exchange ratio. The cash price per share would equal the implied value of the exchange ratio based on the pre-closing measurement period. The proposed aggregate consideration included stock and a fixed amount of cash, with shareholders having the right to elect cash, stock or a combination of cash and stock, subject to proration to ensure the fixed aggregate amount of cash. This bidder's proposal also contemplated a voting agreement for shareholders, although no detail on the shareholders to enter into such agreement or the terms of the agreement were provided.

        On October 14, 2002, a meeting of the board of directors of Osmonics was convened. Representatives of Simpson Thacher & Bartlett reviewed for the board its legal duties in light of a possible sale of Osmonics. Osmonics' management presented its assessment of Osmonics' current position, including its strategic plan and financial results, and their financial projections for Osmonics for the next several years. Members of management also presented their views on the implications for Osmonics of pursuing a stand-alone strategy and discussed various risks affecting the business, including, among other matters, the consolidation trend in the industry and the possibility of new entrants. At this meeting, representatives of Goldman Sachs reviewed for the board, among other matters, a financial analysis of Osmonics' strategic plan and a financial summary of the two bids received. Goldman Sachs also reviewed certain publicly available information relating to the bidders. Representatives of Simpson Thacher & Bartlett also provided for the board a detailed summary of the material legal terms of the two proposals. Members of management and representatives of Simpson Thacher & Bartlett and Goldman Sachs responded to questions from the board. The board discussed, among other matters, management's presentation, the implications of Osmonics remaining independent, their ongoing concerns about the ability of Osmonics to achieve its current projections and Osmonics' inability to achieve past projections for Osmonics as a whole. The board also considered the values that potentially could be obtained for shareholders pursuant to Osmonics' strategic plan and based on the estimates of research analysts, as well as the execution risks related to the management plan. The board discussed the two bid proposals and the risks to Osmonics if a transaction were not pursued at this time. Based on these presentations and discussions, the board authorized management and its advisors to seek improvement in the financial terms of both bids and to ask each bidder to submit its best and final proposal.

        Following the October 14 board meeting, Goldman Sachs requested that each bidder submit its best and final offer for Osmonics. GE indicated that it would increase its price to $17.00 per share. GE expressly stated that this was its best and final offer and that it would terminate discussions if this were not acceptable to Osmonics. The other bidder stated that it was not willing to increase its price. On October 18, 2002, Osmonics' board held a telephonic meeting at which representatives of Goldman Sachs reported these responses. At this meeting, the board discussed the best course of action available to Osmonics and then authorized Goldman Sachs to inform GE that it was willing to continue negotiations on the basis of a $17.00 per share price. Goldman Sachs then communicated this to GE.

        On October 21, 2002, Simpson Thacher & Bartlett sent to GE's outside counsel, King & Spalding LLP, a revised draft of the merger agreement reflecting aspects of the GE proposal that Osmonics was willing to accept. On October 23, 2002, representatives of Simpson Thacher & Bartlett

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and King & Spalding LLP met to negotiate the merger agreement. At this meeting, King & Spalding LLP indicated that GE would require a voting agreement from Dean Spatz and Carol Spatz, who collectively hold approximately 11.0% of Osmonics' outstanding common shares. Simpson Thacher & Bartlett indicated that Mr. and Mrs. Spatz had not indicated a willingness to enter into a voting agreement.

        Osmonics' board of directors held telephonic meetings on October 24, 2002 and on the morning of October 25, 2002 to discuss the status of negotiations and, in particular, GE's request for a voting agreement from Mr. and Mrs. Spatz. Mr. Spatz and Mrs. Spatz indicated that they did not believe GE's price reflected a sufficient premium or otherwise provided adequate value to Osmonics' shareholders. Mr. Spatz also noted that he and Mrs. Spatz expected that the release, in 2003, of Osmonics' 2002 year-end earnings per share would have a positive impact on Osmonics' stock price, even taking into account the adverse impact on year-end earnings per share from transaction-related costs (which were approximately $880,000 for the nine months ended September 30, 2002 and are expected to be approximately $2.5 million for the year ended December 31, 2002). Mr. Spatz also stated his belief that this earnings release would help the stock recover to trade at earnings and sales multiples more in line with its peers. Accordingly, Mr. and Mrs. Spatz stated that they would not sign a voting agreement and also had significant reservations about supporting the deal in their capacity as directors. Mr. Spatz noted that the premium represented by GE's offer had declined from approximately 60% (based on GE's original offer price of $16.50) on October 10, the date of GE's offer and on which Osmonics stock closed at its 52-week low, to approximately 23% (based on GE's amended offer price of $17.00) on October 23. Mr. Spatz also pointed out that, based on his belief that the typical premium over the average stock price for an acquisition of a company like Osmonics was 35%, the appropriate price to be paid to acquire Osmonics was between $18 and $19 per share (using Osmonics' six-month and 12-month closing stock price averages, which were $14.12 and $13.75 for the six- and 12-month periods ending October 11, 2002). After a full discussion of its negotiating options and the directors' views regarding the sufficiency of the price offered, the board of directors instructed Goldman Sachs to inform GE that Mr. and Mrs. Spatz would not accept a voting agreement, to report to GE the concerns of certain members of the board regarding the price, and request an increase in price. Goldman Sachs then communicated this information to GE.

        Osmonics' board reconvened telephonically during the evening of October 25 to hear Goldman Sachs' report on their discussion with representatives of GE. Goldman Sachs reported that Mr. Tucker of GE had indicated that GE would not increase its proposed price of $17.00, but that GE would not require a voting agreement from Mr. and Mrs. Spatz if the board of directors unanimously approved the transaction. A full discussion ensued, with Mr. Spatz repeating his and Mrs. Spatz's view that the premium represented by GE's price was inadequate, and they would not be able to support a transaction at that price. Mr. Spatz indicated, however, that he would be much more favorably disposed in his capacity as a director towards a transaction at $18.00 per share. Mr. Spatz indicated that the timing for a business combination involving Osmonics was not ideal, given market conditions, while recognizing that a business combination was inevitable sometime in the future. He further noted that he recognized that a transaction with GE would be beneficial for Osmonics' employees. The three outside directors (the directors other than Mr. Spatz and Mrs. Spatz) indicated that they would support a deal at a $17.00 price and discussed the risks associated with not proceeding with a business combination with GE at that time. The board directed Goldman Sachs to ask GE if GE would be prepared to proceed with the support of a majority of the board of directors of Osmonics.

        Osmonics' board reconvened telephonically a few hours later and Goldman Sachs reported that Mr. Tucker had said he would have to further discuss the lack of unanimous board support for the transaction with other representatives of GE. Following Goldman Sachs' report and a discussion of the situation, the outside directors asked to meet separately with legal counsel. The meeting of the full board of directors adjourned and the outside directors then reconvened with representatives of Simpson Thacher & Bartlett and Maslon Edelman Borman & Brand LLP. The outside directors and

23


counsel discussed various matters related to the possibility of pursuing a transaction that was not unanimously approved by the board. These discussions were followed by a number of telephonic meetings among the outside directors the next day to consider the situation. In the course of these discussions, the outside directors considered issues relating to the continuity of management and related retention issues if a transaction with GE did not occur at this time.

        On October 27, 2002, at the request of the Osmonics board, Goldman Sachs arranged a telephonic meeting between Messrs. Spatz and Tucker to discuss how GE arrived at its $17.00 per share price, as well as GE's preliminary views on the integration process. Mr. Spatz expressed concern that GE was not properly valuing certain excess unused land held by Osmonics or Osmonics' recent reduction in its debt (by approximately $7.5 million between the end of July 2002 and the end of October 2002) and was not fully valuing Osmonics' membrane and filter science and base technology, or certain synergies that could result from a transaction between the parties. Mr. Tucker explained GE's views of these items, noted that GE's bid price was a function of a number of factors, indicated GE's belief that $17.00 per share was a fair value, and reiterated that GE would not increase the price beyond $17.00 and would not proceed without the unanimous support of Osmonics' board.

        At the request of the Osmonics board, Goldman Sachs again arranged a call between Mr. Spatz and Mr. Tucker on October 28, 2002. Mr. Tucker reiterated that GE would not raise its price, and told Mr. Spatz that GE had considered Osmonics' partial debt reduction but not the real estate given the uncertainty of the valuation of and ability to sell such real estate. He also reported that GE had determined that it would no longer require unanimity on the part of the board, but would be prepared to proceed with the support of a majority of the board of directors of Osmonics. The Osmonics board of directors met telephonically later that day. Mr. Spatz reported on his conversation with Mr. Tucker and reiterated his view that GE was not properly valuing certain aspects of the business, and the board discussed the respective positions of Messrs. Spatz and Tucker. Following these discussions, a majority of the board instructed Goldman Sachs to advise GE that a majority of the board (other than Mr. and Mrs. Spatz) was in favor of continuing negotiations.

        On October 28, 2002, GE's board of directors approved the transaction.

        Between October 29 and November 2, 2002, representatives of Simpson Thacher & Bartlett, Maslon Edelman Borman & Brand LLP and King & Spalding LLP negotiated the remaining terms of the merger agreement. During this time, the board of directors of Osmonics held telephonic meetings at least once a day to receive updates on the status of negotiations on the merger agreement and provide guidance to Simpson Thacher & Bartlett, Maslon Edelman Borman & Brand LLP and Goldman Sachs regarding negotiations.

        On November 2, 2002, the board of directors of Osmonics met to consider and review the terms of the merger agreement. Representatives of Simpson Thacher & Bartlett reviewed for the board its fiduciary and other legal duties and updated the board on the changes in the merger agreement since their previous review and reviewed the terms of the ancillary agreements to be entered into in connection with the merger agreement. Goldman Sachs presented to the Osmonics board, among other matters, an analysis of the financial terms of the GE proposal and an analysis of Osmonics' financial plan. Goldman Sachs also reviewed certain publicly available information relating to GE. The board posed questions to both Simpson Thacher & Bartlett and Goldman Sachs. The board discussed, among other matters, the risks and benefits of a stand-alone strategy and proceeding with a transaction with GE. After further board discussion, the board requested that Goldman Sachs render an opinion as to whether the transaction proposed by GE was fair from a financial point of view to the Osmonics' shareholders. Goldman Sachs delivered to the board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated November 3, 2002, that, as of that date, and subject to the assumptions made, matters considered and limitations on the review undertaken in connection with such opinion, the stock consideration and the cash consideration to be received by Osmonics' shareholders, taken in the aggregate, is fair from a financial point of view to Osmonics' shareholders.

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The full text of Goldman Sachs' written fairness opinion is attached as Annex B to this proxy statement/prospectus and incorporated herein by reference in its entirety. Shareholders are urged to and should read such opinion carefully and in its entirety.

        Following questions and a discussion of certain aspects of the merger agreement, the board of directors, with Mr. and Mrs. Spatz abstaining, approved the merger agreement and the transactions contemplated thereby and resolved to recommend that the holders of common shares of Osmonics adopt the merger agreement and the merger.

        On the evening of November 3, 2002, the merger agreement was executed by Osmonics and GE. On the morning of November 4, 2002, Osmonics and GE issued a joint press release announcing the transaction.

Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger

        In reaching its decision to approve the merger agreement and the merger and the other transactions contemplated by the merger agreement and to recommend that Osmonics shareholders vote to adopt the merger agreement and the merger, the Osmonics board of directors consulted with Osmonics' management and its legal and financial advisors. The board considered a number of factors and potential benefits of the merger including, without limitation, the following:

25


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        The Osmonics board of directors also considered and balanced against the potential benefits of the merger a number of potentially adverse factors concerning the merger including, without limitation, the following:

        After taking into account all of the factors set forth above, as well as others, the Osmonics board of directors agreed (with two directors abstaining) that the benefits of the merger outweigh the risks and that the merger agreement and the merger are advisable and fair and in the best interests of Osmonics and its shareholders. The Osmonics board of directors has approved (with two directors abstaining) the merger agreement and the merger and recommends that holders of Osmonics common stock vote to adopt the merger agreement and the merger at the special meeting.

        The Osmonics board of directors did not assign relative weights to the above factors or the other factors considered by it. In addition, the Osmonics board did not reach any specific conclusion on each factor considered, but conducted an overall analysis of these factors. Individual members of the Osmonics board may have given different weight to different factors.

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Opinion of Goldman, Sachs & Co.

        Goldman Sachs delivered its written opinion, dated November 3, 2002, to Osmonics' board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in such opinion, the stock consideration and the cash consideration to be received by the holders of Osmonics' common stock, taken in the aggregate, is fair from a financial point of view to such holders.

        The full text of the written opinion of Goldman Sachs, dated November 3, 2002, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement/prospectus. Osmonics' shareholders should read the opinion in its entirety. Goldman Sachs provided its opinion for the information and assistance of Osmonics' board of directors in connection with the board's consideration of the transaction contemplated by the merger agreement. The Goldman Sachs opinion is not a recommendation as to how any holder of Osmonics' common stock should vote or make any election with respect to the transaction contemplated by the merger agreement.

        In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

        Goldman Sachs also held discussions with members of the board of directors and senior management of Osmonics regarding their assessment of the strategic rationale for, and the potential benefits of, the transaction contemplated by the merger agreement. Goldman Sachs also held discussions with members of the board of directors and senior management of Osmonics regarding the past and current business operations, financial condition and future prospects of Osmonics, including discussions with respect to the risks and uncertainties relating to Osmonics' ability to realize the internal forecasts prepared by its management in the amounts and time periods contemplated thereby. In addition, Goldman Sachs reviewed the reported price and trading activity for Osmonics' common stock and GE's common stock, compared certain financial and stock market information for Osmonics and GE with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the water filtration industry specifically and in other industries generally and performed such other studies and analyses as it considered appropriate.

        Goldman Sachs relied upon the accuracy and completeness of all of the financial, accounting, tax and other information discussed with or reviewed by it and assumed such accuracy and completeness for purposes of rendering the opinion described above. As the Osmonics board was aware, Goldman Sachs' review of GE was limited to publicly available information and certain discussions with GE and GE did not make available to Goldman Sachs its projections of expected future performance. In addition, Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any derivative or off-balance-sheet assets and liabilities) of Osmonics or GE or any of their respective subsidiaries. No evaluation or appraisal of the assets or liabilities of Osmonics or GE or any of their respective subsidiaries was furnished to Goldman Sachs.

        The following is a summary of the material financial analyses used by Goldman Sachs in connection with rendering the opinion described above. The following summary, however, does not

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purport to be a complete description of the financial analyses performed by Goldman Sachs. The order of analyses described does not represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and alone are not a complete description of Goldman Sachs' financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before November 1, 2002 and is not necessarily indicative of current market conditions.

        Analysis at Transaction Price.    Goldman Sachs performed certain analyses, based on historical information and projections contained in public filings and Osmonics' Management October 2002 Financial Plan and based on Osmonics' closing market price as of November 1, 2002 of $13.50 and the $17.00 per share transaction price. For each of these two prices, Goldman Sachs calculated for Osmonics the implied total equity consideration (on a diluted basis) and enterprise value, the ratio of enterprise value to sales, the ratio of enterprise value to earnings before interest, taxes and depreciation and amortization, or EBITDA, the ratio of enterprise value to earnings before interest and taxes, or EBIT, and the ratio of the price per share to the earnings per share estimates of Osmonics Management and IBES. Table 1 presents the results of this analysis:

 
   
  Osmonics at
November 1, 2002
closing price

  Osmonics at
transaction price

 
          $ 13.50   $ 17.00  

Analysis of Premium

 

 

 

 

 

 

 

 

 

 
Equity consideration (diluted) ($in millions)         $ 201.8   $ 257.5  
Enterprise value         $ 222.0   $ 277.6  
 
  Management
Projections

   
   
 
Enterprise value/LTM sales(1)   $ 211.0     1.05 x   1.32 x
Enterprise value/2002E sales     213.7     1.04     1.30  
Enterprise value/2003E sales     239.0     0.93     1.16  
Enterprise value/LTM EBITDA(1)   $ 23.6     9.4 x   11.8 x
Enterprise value/2002E EBITDA     26.3     8.4     10.6  
Enterprise value/2003E EBITDA     36.7     6.0     7.6  
Enterprise value/LTM EBIT(1)   $ 15.4     14.4 x   18.0 x
Enterprise value/2002E EBIT     16.6     13.4     16.7  
Enterprise value/2003E EBIT     25.8     8.6     10.8  
Price/2002E EPS Estimate   $ 0.74     18.2 x   23.0 x
Price/2003E EPS Estimate     1.07     12.6     15.9  
 
  IBES Estimates

   
   
 
Price/2002 IBES EPS Estimate   $ 0.71     19.0 x   23.9 x
Price/2003 IBES EPS Estimate     0.85     15.9     20.0  

(1)
LTM as of September 30, 2002.

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        Historical Analysis.    Goldman Sachs reviewed the historical trading prices for Osmonics' common stock for the ten-year period ending November 1, 2002 and the average daily trading volume for Osmonics' common stock over the latest twelve-month, or LTM, period ending November 1, 2002. In addition, Goldman Sachs analyzed the $17.00 per share consideration to be received by holders of Osmonics' common stock pursuant to the merger agreement in relation to the prices of Osmonics' common stock during certain periods within the one-year period ending November 1, 2002.

        This analysis indicated that the price per share of Osmonics' common stock to be paid to Osmonics' shareholders pursuant to the merger agreement represented:

        Selected Companies Analysis.    Goldman Sachs reviewed and compared certain financial information for Osmonics to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the water filtration industry:

Goldman Sachs also reviewed and compared certain financial information for Osmonics to corresponding financial information, ratios and public market multiples for nine publicly traded diversified industrial corporations. Although none of the selected companies are directly comparable to Osmonics, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of Osmonics.

        Goldman Sachs analyzed and compared the enterprise value of Osmonics, the selected companies in the water filtration industry and the selected diversified industrial companies as a multiple of LTM sales, LTM EBITDA and LTM EBIT using their respective closing prices on November 1, 2002 and the most recent publicly available information. The enterprise value for Osmonics' common stock was based on the November 1, 2002 closing price of $13.50 and the transaction price of $17.00. These calculations resulted in (1) at a price per share of Osmonics' common stock of $13.50, an enterprise value multiple of LTM sales of 1.1x, an enterprise value multiple of LTM EBITDA of 9.4x and an enterprise value multiple of LTM EBIT of 14.4x, and (2) at a price per share of Osmonics' common stock of $17.00, an enterprise value multiple of LTM sales of 1.3x, an enterprise value multiple of LTM

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EBITDA of 11.8x and an enterprise value multiple of LTM EBIT of 18.0x. Table 2 presents the results of this analysis:

 
  Selected Companies in the Water Filtration Industry
  Selected Diversified Industrial Companies
   
   
Enterprise Value as
a multiple of:

  Osmonics at
November 1, 2002 closing
price—$13.50

  Osmonics at
transaction price—$17.00

  Range
  Median
  Range
  Median
LTM Sales   0.8x to 2.9x   1.4x   0.4x to 2.8x   1.5x   1.1x   1.3x
LTM EBITDA   8.2x to 16.8x   11.5x   4.5x to 12.6x   8.8x   9.4x   11.8x
LTM EBIT   11.8x to 33.5x   15.5x   5.3x to 27.3x   13.8x   14.4x   18.0x

        Goldman Sachs also calculated and compared the ratio of the price per share to the calendarized earnings per share for Osmonics, the selected companies in the water filtration industry and the selected diversified industrial companies as a multiple of Osmonics' 2002 and 2003 earnings estimates using their respective closing prices on November 1, 2002 and IBES median earnings estimates for 2002 and 2003. The calendarized price/earnings multiples for Osmonics' common stock were based on the November 1, 2002 closing price of $13.50 and the transaction price of $17.00. These calculations resulted in (1) at a price per share of Osmonics' common stock of $13.50, calendarized price/earnings multiples of 19.0x and 15.9x for 2002E and 2003E, respectively, and (2) at a price per share of Osmonics' common stock of $17.00, calendarized price/earnings multiples of 23.9x and 20.0x for 2002E and 2003E, respectively. Table 3 presents the results of this analysis:

 
  Selected Companies in the Water Filtration Industry
  Selected Diversified
Industrial Companies

   
   
 
  Osmonics at
November 1, 2002
closing
price—$13.50

   
Price/Earnings
Ratio:

  Osmonics at
transaction price—$17.00

  Range
  Median
  Range
  Median
2002E   16.4x to 36.6x   20.1x   9.7x to 55.1x   17.9x   19.0x   23.9x
2003E   11.9x to 25.4x   16.8x   8.9x to 23.7x   15.2x   15.9x   20.0x

        Goldman Sachs also calculated and compared LTM EBITDA margins, LTM EBIT margins, five-year compound annual growth rate of earnings per share provided by IBES with the selected companies in the water filtration industry and selected diversified industrial companies. Table 4 presents the results of this analysis:

 
  Selected Companies in the
Water Filtration Industry

  Selected Diversified
Industrial Companies

   
 
  Range
  Median
  Range
  Median
  Osmonics
LTM EBITDA Margin   6.6% to 22.7%   13.7%   5.3% to 35.1%   17.4%   11.2%
LTM EBIT Margin   (0.6%) to 18.0%   10.9%   1.5% to 27.5%   12.4%   7.3%
5-Year Compound Annual Growth Rate of EPS   8.0% to 15.0%   13.5%   8.0% to 15.0%   13.0%   12.5%

        Using the Osmonics closing price of $13.50 as of November 1, 2002 and the transaction price of $17.00, Goldman Sachs also analyzed the 2003 estimated price/earnings ratio of Osmonics as a multiple of the five-year compound annual growth rate of earnings per share and compared them with the selected companies in the water filtration industry and selected diversified industrial companies using IBES median estimates. These calculations resulted in (1) at a price per share of Osmonics' common

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stock of $13.50, a multiple of 1.3x, and (2) at a price per share of Osmonics' common stock of $17.00, a multiple of 1.6x. Table 5 presents the results of this analysis:

 
  Selected Companies in the
Water Filtration Industry

  Selected Diversified
Industrial Companies

   
   
 
  Osmonics at
November 1, 2002
closing
price—$13.50

   
 
  Osmonics at
transaction price—$17.00

 
  Range
  Median
  Range
  Median
2003 P/E to 5-Year Compounded Annual Growth Rate of EPS   1.1x to 3.2x   1.2x   0.6x to 1.8x   1.4x   1.3x   1.6x

        Selected Transactions Analysis.    Goldman Sachs analyzed certain publicly available information relating to the following transactions in the water filtration industry since October 1996:

Date
  Acquiror
  Target
September 2002(1)   Pentair, Inc.   Vivendi Environnement (Plymouth Products)

February 2002

 

Pall Corporation

 

Vivendi Environnement (US Filter Filtration & Separation Group)

October 2001

 

Weatherford International, Inc.

 

Vivendi Environnement (Johnson Screens)

April 2000

 

Parker Hannifin Corporation

 

Whatman Plc (Industrial Filtration Business)

August 1999

 

The Procter & Gamble Company

 

Recovery Engineering

April 1999

 

Pentair, Inc.

 

Essef Corporation

March 1999

 

Vivendi Environnement

 

U.S. Filter

February 1998

 

U.S. Filter

 

Culligan Water Technologies

December 1997

 

U.S. Filter

 

Memtec Limited

October 1997

 

Culligan Water Technologies

 

Protean Plc

February 1997

 

Culligan Water Technologies

 

Ametek, Inc. (Water Filtration)

December 1996

 

Esco Electronics

 

Schawk, Inc. (Filtertek)

October 1996

 

U.S. Filter

 

United Utilities Plc (Process Equipment)

October 1996

 

Pall Corporation

 

Gelman Sciences

(1)
Data for this transaction was estimated by Osmonics' management.

        Goldman Sachs calculated the enterprise value of the proposed Osmonics/GE transaction as a multiple of LTM sales, LTM EBITDA and LTM EBIT and compared them with selected transactions in the water filtration industry. These calculations resulted in an enterprise value multiple of LTM sales of 1.32x, enterprise value multiple of LTM EBITDA of 11.8x and enterprise value multiple of LTM EBIT of 18.0x. Table 6 presents the results of this analysis:

32



 
  Selected Transactions
   
Enterprise Valuation as
a Multiple of:

  Osmonics at
transaction
price $17.00

  Range
  Median
LTM Sales   0.75x to 3.38x   1.38x   1.32x
LTM EBITDA   8.8x to 23.0x   12.9x   11.8x
LTM EBIT   10.4x to 38.7x   20.0x   18.0x

        Goldman Sachs reviewed the historical and projected financial performance of Osmonics and performed certain benchmarking analyses with respect to the projections prepared by Osmonics' management. Goldman Sachs compared Osmonics management's net income projections with Osmonics' actual net income for each of the years 1998-2002, reviewed revisions made to the estimates of Osmonics' management, compared the EBIT margin projected by Osmonics' management for 2007 with the LTM EBIT margins of Osmonics and other selected companies and compared the projected 5-year EPS growth rate for Osmonics as prepared by its management with the projected 5-year EPS growth rates for selected companies from IBES as well as to the projected 5-year EPS growth rate for Osmonics from IBES.

        Table 7 presents the results of the comparison of the LTM EBIT margins for Osmonics and other selected companies with the EBIT margin projected by Osmonics' management for 2007. Table 7 also compares the projected 5-year EPS growth rates for Osmonics and the selected companies:

 
   
  EBIT Margin
  EBIT Margin
Selected Companies

  Projected 5-Year
compound annual
growth rate of EPS

  LTM
  2007E
Osmonics Management   25.7%   7.3%   14.9%

Osmonics IBES

 

12.5%

 

Not Available

 

Not Available

Millipore Corporation

 

15.0%

 

18.0%

 

Not Available

Donaldson Company, Inc.

 

13.0%

 

11.0%

 

Not Available

Pall Corporation

 

14.0%

 

10.9%

 

Not Available

Clarcor Inc.

 

13.5%

 

11.0%

 

Not Available

Cuno Incorporated

 

15.0%

 

13.6%

 

Not Available

Esco Technologies, Inc.

 

15.0%

 

9.2%

 

Not Available

Ionics, Incorporated

 

12.0%

 

(0.6%

)

Not Available

Calgon Carbon Corporation

 

8.0%

 

4.4%

 

Not Available

Whatman

 

8.0%

 

5.7%

 

Not Available

Average (Excluding Osmonics)

 

12.6%

 

9.2%

 

Not Available

33


        Table 8 presents the results of the comparison of Osmonics' net income budgets prepared by Osmonics' management with Osmonics' adjusted actual net income for each of the years 1998 through 2002:

 
  Adjusted Actual v. Budgeted Net Income
($ in millions)

 
Year:

  Budgeted
  Adjusted Actual(1)
 
1998   13.6   4.1  
1999   16.0   3.7  
2000   10.1   3.0  
2001   10.4   8.1  
2002   11.6   11.1 (2)

(1)
Based on Osmonics' public filings and information provided by Osmonics' management. Adjusted actual net income excludes certain charges and credits identified by Osmonics' management that are not included in budgeted amounts.
(2)
Based on Osmonics' Management October 2002 Financial Plan.

        Table 9 presents the revisions to the Osmonics Management Financial Plan since April 2001:

Estimated EBITDA
($ in millions)

  2002E
  2003E
  2004E
  2005E
  2006E
  2007E
April 2001(1)   $ 36.6   $ 46.2   $ 54.7   $ 62.7   Not Available   Not Available
December 2001(1)     29.9     37.0     46.0     60.4   72.3   Not Available
August 2002(2)     26.9     37.3     47.4     59.9   72.7   83.8
October 2002(1)     26.3     36.7     46.4     57.6   69.6   78.4
% Change from December 2001 to October 2002     (11.9 )%   (0.7 )%   1.0 %   (4.6 )% (3.7 )% Not Available

(1)
Based on Osmonics' Management Financial Plans.
(2)
Based on Osmonics' Management Presentation.

        Implied Future Stock Price Analysis.    Goldman Sachs performed an analysis of the present value of the implied future price of Osmonics' common stock based on earnings per share estimates from (1) Osmonics' Management October 2002 Financial Plan and (2) IBES for 2002 and 2003 and extrapolated earnings per share estimates for 2004 through 2007 based on the IBES 5-year compound annual growth rate of 12.5%. Goldman Sachs calculated such implied present values for the calendar years 2003 through 2007 using a discount rate of 10% and price/earnings multiples ranging from 10x to 25x. Using the Osmonics Management estimates, the analysis indicated a range of implied present values of $9.73 to $36.03 per share of Osmonics' common stock. Using the IBES estimates, the analysis indicated a range of implied present values of $7.73 to $21.14 per share of Osmonics' common stock. Goldman Sachs also performed a sensitivity analysis to the analysis of the present value of the implied future stock price by applying discount rates ranging from 12% to 14% and price/earnings multiples ranging from 10x to 25x to the implied 2007 future stock price. Using the Osmonics Management estimates, the sensitivity analysis indicated a range of implied 2007 present values of $12.05 to $32.93 per share of Osmonics' common stock. Using the IBES estimates, the sensitivity analysis indicated a

34



range of implied 2007 present values of $7.07 to $19.31 per share of Osmonics' common stock. Goldman Sachs also performed a sensitivity analysis to the analysis of the present value of the implied future stock price by applying earnings per share growth rates ranging from 5% to 12.5% to the IBES 2003 earnings per share estimate for Osmonics to calculate extrapolated Osmonics earnings per share estimates for 2007. Goldman Sachs calculated illustrative present values per share of Osmonics' common stock based on these extrapolated estimates using discount rates ranging from 10% to 14% and price/earnings multiples ranging from 10x to 25x. The sensitivity analysis indicated a range of implied 2007 present values of $5.37 to $21.14 per share of Osmonics' common stock.

        Discounted Cash Flow Analysis.    Goldman Sachs performed a discounted cash flow analysis on Osmonics using Osmonics' Management October 2002 Financial Plan. Goldman Sachs calculated illustrative per share value ranges of Osmonics' common stock by calculating implied values of the free cash flows and by using implied terminal value indications in the year 2007 based on multiples ranging from 7x to 12x estimated EBITDA for 2007. The implied values of the free cash flows and the implied terminal value indications derived from this analysis were then discounted using discount rates ranging from 7% to 11%. This analysis indicated a range of implied present values per share of Osmonics' common stock of $25.32 per share to $48.16 per share.

        Goldman Sachs performed a sensitivity analysis to the discounted cash flow analysis by applying certain ranges of deviations to the annual sales growth estimates and EBIT margin estimates in Osmonics' Management October 2002 Financial Plan. These ranges were provided by Osmonics' management, with the lower end of such ranges observed to be approximately consistent with the recent historical financial performance of Osmonics. The annual sales growth deviations ranged from (75.0)% to 20.0%, which implied a range of estimated sales growth from 3.0% to 23.6% depending on the year and the deviation, and the EBIT margin deviations ranged from (40.0)% to 40.0%, which implied a range of estimated EBIT margins of 6.5% to 20.9% depending on the year and the deviation. Based on a 9% discount rate and a 9x terminal multiple of estimated EBITDA for 2007, the analysis indicated a range of implied present values of $14.84 to $51.43 per share of Osmonics' common stock.

        Goldman Sachs also performed an additional sensitivity analysis to the discounted cash flow analysis by applying a (75.0)% deviation of sales growth and a (40.0)% deviation of EBIT margin, which deviations were approximately consistent with the recent historical financial performance of Osmonics, as indicated by Osmonics' management, to Osmonics' Management October 2002 Financial Plan. Based on multiples ranging from 7x to 12x estimated EBITDA for 2007 and using discount rates ranging from 7% to 11%, the analysis indicated a range of implied present values of $11.04 to $20.84 per share of Osmonics' common stock.

        The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs' opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Osmonics or the contemplated transaction.

        Goldman Sachs prepared these analyses solely for purposes of Goldman Sachs providing its opinion to Osmonics' board of directors as to the fairness from a financial point of view of the transaction contemplated by the merger agreement. These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of

35



the parties or their respective advisors, none of Osmonics, GE, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

        As described above, Goldman Sachs' opinion to the Osmonics board of directors was one of many factors taken into consideration by Osmonics' board of directors in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B to this proxy statement/prospectus.

        Goldman Sachs, as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities and private placements as well as for estate, corporate and other purposes. Goldman Sachs is familiar with Osmonics having provided certain investment banking services to it from time to time, including having acted as its financial advisor in connection with, and having participated in certain of the negotiations leading to, the merger agreement.

        Goldman Sachs also provided certain investment banking services to GE and its affiliates from time to time, including, among other transactions, having acted as:

Goldman Sachs also is providing and may provide, in the future, investment banking services to GE and its affiliates. The Osmonics board of directors selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transaction contemplated by the merger agreement.

        Goldman Sachs provides a full range of financial advisory and securities services and, in the course of its normal trading activities, may from time to time effect transactions and hold positions in securities, including derivative securities, of Osmonics or GE for its own account and for the account of customers.

        Pursuant to a letter agreement dated November 12, 2001, Osmonics engaged Goldman Sachs to act as its financial advisor in connection with the contemplated transaction. Pursuant to the terms of this engagement letter, Osmonics has agreed to pay Goldman Sachs a transaction fee equal to the greater of $3,000,000 or 1.5% of the aggregate consideration paid in the merger, the principal portion of which is payable upon consummation of the transaction. In addition, Osmonics has agreed to reimburse Goldman Sachs for its reasonable expenses, including attorneys' fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

GE's Reasons for the Merger

        The board of directors of GE approved the merger agreement on October 28, 2002 after GE's senior management discussed with the board of directors the business, assets, liabilities, results of

36



operations and financial performance of Osmonics, the complementary nature of certain of Osmonics' products and capabilities and the products of GE Water, the expectation that Osmonics could be readily integrated with GE Water, and the potential benefits that could be realized as a result of such integration.

Interests of Certain Persons in the Merger; Conflicts of Interest

        In considering the recommendation of Osmonics' board of directors with respect to the merger, Osmonics shareholders should be aware that some of Osmonics' directors and executive officers have interests in the merger that are different from, or in addition to, the interests of Osmonics shareholders generally. The board of directors of Osmonics was aware of these interests and considered them in approving the merger and the merger agreement.

        Change in Control Agreements.    The executive officers of Osmonics (other than Phil Rolchigo) are parties to change of control agreements with Osmonics. Pursuant to these change of control agreements, if (1) there is a change of control of Osmonics (which will occur upon the completion of the merger) and (2) the executive is terminated by Osmonics (or GE) other than for "Cause" (as defined in the change of control agreements) or such executive terminates his employment for a "Good Reason" (as defined in the change of control agreements), either within two years following such change of control or during the three months prior to certain events that are followed by a change of control, the terminated executive will be entitled to receive monthly payments equal to one-twelfth of the executive's annual target bonus amount for three years following such termination of employment. In addition, during the three year period, the executive will be subject to a covenant not to compete with the business of Osmonics in exchange for receiving monthly payments equal to one-twelfth of the executive's annual cash base salary. These monthly non-competition payments are subject to annual increases based on the consumer price index. Finally, in the event that the executive becomes subject to excise tax pursuant to Section 4999 of the Internal Revenue Code, the executive will receive the greater of (x) the net after-tax amount of the benefits and payments provided under his change of control agreement or otherwise (after payment by the executive of all income and excise tax) or (y) the severance payments provided under his change of control agreement or otherwise, reduced to the extent necessary to avoid the imposition of the excise tax.

        In October 2001, Osmonics replaced Phil Rolchigo's change of control agreement with a letter agreement that provides Dr. Rolchigo with the right to receive certain payments triggered by the termination of Dr. Rolchigo's employment with Osmonics (whether or not following a change in control). Pursuant to the letter agreement, upon a termination of employment for any reason (other than by Osmonics for cause) Dr. Rolchigo is entitled to three times the sum of his base salary and his annual incentive target for the fiscal year in which his employment with Osmonics terminates (the "Termination Payment"), in addition to a lump sum payment equal to $305,000 he earned in 2001 for agreeing not to compete for one year following any termination of employment after July 31, 2001. In consideration for the Termination Payment, which would be payable over four years, Dr. Rolchigo has agreed not to compete with the business of Osmonics for four years after termination of his employment with Osmonics.

        Equity Plans.    Pursuant to the merger agreement, upon the completion of the merger all outstanding options to purchase shares of Osmonics common stock will be converted into options to purchase shares of GE common stock. See "The Merger Agreement—Treatment of Stock Options." The stock option plan under which Osmonics' executive officers and other key employees were granted options to purchase Osmonics common stock provides that all outstanding options will become fully vested and exercisable upon completion of the merger. Options to purchase in the aggregate approximately 172,500 shares of Osmonics common stock held by the executive officers and directors who are officers of Osmonics will become fully vested and exercisable upon completion of the merger.

37



In addition, the executive officers and directors hold options to purchase, in the aggregate, approximately 249,000 shares of Osmonics common stock that are currently fully vested and exercisable.

        The option plan under which Osmonics' directors were granted options to purchase Osmonics common stock does not provide for accelerated vesting upon the completion of the merger; any vested options will be converted into options to purchase GE common stock and any unvested options will expire upon completion of the merger.

        Indemnification; Directors' and Officers' Insurance.    The merger agreement provides that, after the merger, the surviving corporation will, for six years following the merger, indemnify persons who were Osmonics directors or officers before the merger who suffer liabilities or losses from any threatened or actual claim or proceeding based on the fact that the person was an Osmonics director or officer and occurring at or prior to the merger. The merger agreement further requires that, for six years following the merger, subject to certain limitations, the surviving corporation maintain coverage under a director and officer liability insurance policy at a level at least equal to that which Osmonics is maintaining for its officers and directors prior to the merger.

Procedures for Cash Election and Exchange of Osmonics Common Stock Certificates

        Procedure for Cash Election.    Included with this proxy statement/prospectus is a cash election form to be completed and returned to Wells Fargo Shareowner Services, who will act as the exchange agent for the merger.

        You only need to complete and return a cash election form if you wish to receive cash for any or all of your Osmonics shares. You do not need to complete the cash election form if you wish to receive only GE stock for your Osmonics shares. If the exchange agent does not receive from you a properly completed cash election form, together with the stock certificates representing the shares you wish to exchange for cash, properly endorsed for transfer, a book entry transfer of shares or a guarantee of delivery by the election deadline, all of your Osmonics stock will be exchanged for GE common stock (or cash in lieu of fractional shares of GE common stock) in the merger.

        Osmonics shareholders can also specify the number of shares of their Osmonics common stock to be converted into cash, subject to proration if the aggregate number of shares for which cash elections are made, for which dissenters' rights are perfected, and that are owned by GE or Oasis Acquisition exceeds 55% of the number of shares of Osmonics common stock outstanding immediately prior to the effective time of the merger, or in certain other situations. See "The Merger Agreement—Merger Consideration—Cash Election Option."

        All cash election forms must be received by the exchange agent at its designated office, by 5:00 p.m., eastern time, on the day of the special meeting or, if the closing of the merger is more than four business days after the day of the special meeting, then not later than two business days prior to the closing date of the merger. If the closing of the merger is more than four business days after the special meeting, GE will publicly announce the closing date of the merger at least five business days in advance.

        The cash election form must be properly completed and signed and accompanied by:

38


Osmonics shareholders electing to receive cash for all or any of their shares of Osmonics common stock are urged to send their cash election forms, accompanied by applicable stock certificates, properly endorsed for transfer, or other required documents so that they are received by the exchange agent not later than 5:00 p.m., eastern time on February 26, 2003.

        Cash election forms will be made available, as may be reasonably requested, to all persons who become holders of Osmonics common stock between the record date and the deadline for delivery of cash election forms.

        If the exchange agent (or GE and Osmonics) determines that any purported election was not properly made or was received by the exchange agent after 5:00 p.m. on the deadline for delivery of cash election forms, such purported election will be deemed to be void and of no force and effect and the holder making such purported cash election will be entitled to receive only GE common stock in the merger (other than cash in lieu of any fractional shares).

        Any Osmonics shareholder may change or revoke such holder's election by giving written notice to the exchange agent prior to 5:00 p.m., eastern time, on the deadline for delivery of cash election forms. After this date, you may not change or revoke any election you have made. All cash election forms will automatically be revoked if the exchange agent is notified in writing by GE and Osmonics that the merger has been abandoned. If a cash election form is revoked, the certificates, guarantee of delivery, or other documents as applicable evidencing the shares of Osmonics common stock to which such cash election form relates will be returned to the shareholder. The determination of the exchange agent (or GE and Osmonics if the exchange agent declines to make a determination) will be binding as to whether a cash election has been properly revoked.

        Osmonics shareholders who wish to elect to receive cash for any or all of their shares of Osmonics common stock must complete the cash election form if their shares of Osmonics common stock are registered in their own name or must follow the instructions of their bank or broker if their shares of Osmonics common stock are held in "street name"; otherwise, they will be deemed not to have made a cash election and will receive GE common stock (or cash in lieu of fractional shares) for their shares of Osmonics common stock. None of Osmonics, the Osmonics board of directors or GE makes any recommendation as to whether shareholders should elect to receive cash or GE common stock in the merger. Each Osmonics shareholder must make his or her own decision with respect to such election.

        If any Osmonics shareholder would like any of his or her cash consideration paid in a name other than his or her own, he or she must pay to the exchange agent any and all required transfer or other taxes or must establish that such tax has been paid or is not applicable.

        Surrender of Certificates.    At or following the effective time of the merger, the exchange agent will mail to each holder of record of shares of Osmonics common stock who has not properly made a cash election for those shares or perfected dissenters' rights with respect to those shares, a letter of transmittal and instructions for surrendering their certificates of Osmonics common stock in exchange for a certificate or certificates representing GE common stock into which the Osmonics common stock will be converted pursuant to the merger. Upon surrender of a certificate representing shares of Osmonics common stock for cancellation to the exchange agent, together with a letter of transmittal, the holder of such certificate will be entitled to receive only GE common stock (or cash in lieu of any fractional shares of GE common stock).

        Osmonics shareholders who surrender their stock certificates together with a properly completed letter of transmittal will receive stock certificates representing the shares of GE common stock (or cash in lieu of any fractional shares of GE common stock) into which their shares of Osmonics common stock have been converted in the merger.

        After the merger, each certificate that previously represented shares of Osmonics common stock will represent only the right to receive cash or the shares of GE common stock (or cash in lieu of any

39



fractional shares of GE common stock) into which those shares of Osmonics common stock have been converted.

        GE will not pay dividends to holders of Osmonics common stock in respect of the shares of GE common stock, if any, into which the Osmonics shares represented by those certificates have been converted until the certificates representing the shares of Osmonics common stock are surrendered to the exchange agent.

        After the effective time of the merger, the surviving corporation will not register any further transfers of Osmonics shares. Any certificates evidencing Osmonics shares that you present for transfer after the effective time of the merger will be exchanged for GE common shares (or cash in lieu of any fractional shares of GE common stock).

        If any Osmonics shareholder would like his or her certificates of GE common stock issued in a name other than his or her own, he or she must pay to the exchange agent any and all required transfer or other taxes or must establish that such tax has been paid or is not applicable.

Anticipated Accounting Treatment

        GE will account for the merger under the "purchase" method of accounting in accordance with generally accepted accounting principles. Therefore, the total merger consideration paid by GE, together with the direct costs of the merger, will be allocated to Osmonics' tangible and intangible assets and liabilities based on their fair market values, with any excess being treated as goodwill. The assets, liabilities and results of operations of Osmonics will be consolidated into the assets, liabilities and results of operations of GE after the merger.

Material United States Federal Income Tax Consequences

        The following discussion is a summary of certain U.S. federal income tax consequences of the merger to a U.S. Holder (as defined below) of Osmonics common stock who holds such shares of common stock as capital assets. The discussion is based on laws, regulations, rulings and decisions in effect on the date hereof, all of which are subject to change, possibly with retroactive effect, and to differing interpretation. This discussion is for general information only and does not address all aspects of U.S. federal income taxation that may be applicable to holders subject to special treatment under the Internal Revenue Code (including, but not limited to, financial institutions, tax-exempt organizations, mutual funds, insurance companies, S corporations or other pass through entities, dealers in securities or foreign currency, holders who exercise dissenters' rights, Non-U.S. Holders (as defined below), holders who acquired shares of Osmonics common stock pursuant to the exercise of an employee stock option or otherwise as compensation or through a tax-qualified retirement plan, traders in securities who elect the mark-to-market method of accounting for their securities holdings, holders subject to the alternative minimum tax, persons that have a functional currency other than the U.S. dollar, a holder of options granted under any Osmonics benefit plan, or holders who hold Osmonics common stock as part of a hedge against currency risk, straddle or a constructive sale or conversion transaction). In addition, the discussion does not address the state, local or foreign tax consequences of the merger.

        For purposes of this discussion, we use the term "U.S. Holder" to mean (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized under the laws of the United States or any of its political subdivisions, (iii) a trust if it (x) is subject to the supervision of a court within the United States and one or more U.S. persons control all substantial decisions of the trust, or (y) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. A "Non-U.S. Holder" is a holder that is not a U.S. Holder.

40



        GE and Osmonics have not and will not seek any ruling from the Internal Revenue Service regarding any matters relating to the merger, and as a result, there can be no assurance that the Internal Revenue Service will not disagree with or challenge any of the conclusions described herein.

        Based on representations contained in representation letters provided by Osmonics and GE and on certain customary factual assumptions, all of which must continue to be true and accurate in all material respects as of the effective time of the merger, it is the opinion of Simpson Thacher & Bartlett, counsel to Osmonics, and King & Spalding LLP, counsel to GE, that the material U.S. federal income tax consequences of the merger are as follows:

        If a U.S. Holder acquired different blocks of Osmonics common stock at different times and at different prices, any gain or loss will be determined separately with respect to each block of Osmonics common stock, and the cash and GE common stock received will be allocated pro rata to each such block of stock. In addition, a U.S. Holder's basis and holding period in its GE common stock may be determined with reference to each block of Osmonics common stock.

        Taxation of Capital Gain.    Subject to the discussion under "Possible Treatment of Cash as a Dividend" set forth below, gain or loss recognized in connection with the merger will generally constitute capital gain or loss and will constitute long-term capital gain or loss if a U.S. Holder's holding period in its Osmonics common stock is greater than one year as of the date of the merger. If

41



a U.S. Holder is a non-corporate holder of Osmonics common stock, this long-term capital gain generally will be taxed at a maximum U.S. federal income tax rate of 20%. The deductibility of capital losses is subject to limitations.

        Possible Treatment of Cash as a Dividend.    In general, the determination of whether the gain recognized in the exchange will be treated as capital gain or dividend income will depend upon whether and to what extent the exchange reduces the U.S. Holder's deemed percentage stock ownership interest in GE. For purposes of this determination, a U.S. Holder will be treated as if it first exchanged all of the U.S. Holder's shares of Osmonics common stock solely for GE common stock and then GE immediately redeemed a portion of that GE common stock in exchange for the cash that the U.S. Holder actually received. Each U.S. Holder that may be subject to these rules should consult its tax advisor. The Internal Revenue Service has ruled that a relatively minor reduction in the percentage stock ownership of a minority shareholder in a publicly held corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is a "meaningful reduction." Accordingly, in most circumstances, gain recognized by a U.S. Holder that exchanges its shares of Osmonics common stock for a combination of GE common stock and cash generally will be a long-term capital gain if the U.S. Holder's holding period with respect to the stock is more than one year, and otherwise will be short-term capital gain.

        Cash Received in Lieu of a Fractional Share.    Cash received in lieu of a fractional share of GE common stock will be treated as received in redemption of such fractional share, and gain or loss will be recognized by a U.S. Holder equal to the difference between the amount of cash received and the portion of the basis of the share of Osmonics common stock allocable to such fractional interest. Such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the holding period for such share of Osmonics common stock was greater than one year as of the date of the exchange.

        Backup Withholding.    Unless a U.S. Holder complies with certain reporting or certification procedures or is an "exempt recipient" (i.e., in general, corporations and certain other entities), the U.S. Holder may be subject to backup withholding tax of 30% with respect to any cash payments received pursuant to the merger. A Non-U.S. Holder should consult such holder's tax advisor with respect to the application of withholding rules to any cash payments received by it pursuant to the merger.

        If a U.S. Holder receives GE common stock as a result of the merger, such U.S. Holder will be required to retain records pertaining to the merger and will be required to file with such U.S. Holder's U.S. federal income tax return for the year in which the merger takes place a statement setting forth certain facts relating to the merger.

        Each Osmonics shareholder is urged to consult his or her own tax advisor with respect to the federal, state, local and foreign tax consequences of the merger.

Dissenters' Rights

        The following is a brief summary of the rights of holders of Osmonics common stock to dissent from the merger agreement and receive cash equal to the "fair value" of their Osmonics common stock instead of receiving shares of GE common stock or cash as provided in the merger agreement. This summary is not exhaustive, and you should read Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act, which are attached to this proxy statement/prospectus as Annex C.

        If you are contemplating the possibility of dissenting from the merger agreement, you should carefully review the text of Annex C, particularly the procedural steps required to assert dissenters' rights, which are complex. You should also consult your legal counsel. If you do not fully comply with the procedural requirements of the statute, you will lose your dissenters' rights.

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        Who may exercise dissenters' rights.    Under Minnesota law, shareholders of Osmonics have the right, by fully complying with the applicable provisions of Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act, to dissent from the merger agreement and to receive from Osmonics payment in cash for the "fair value" of their shares after the merger is completed. The term "fair value" means the value of the shares immediately before the effective time of the merger and may be less than, equal to or greater than the market price of the GE common stock to be issued or the $17.00 cash to be paid to shareholders who do not dissent from the merger agreement for their Osmonics common stock pursuant to the merger agreement if the merger is consummated.

        All references in this summary to a "shareholder" or "you" are to a shareholder of Osmonics as of January 23, 2003, the record date for the special meeting. A person having beneficial ownership of shares that are held of record in the name of another person, such as a broker, nominee, trustee or custodian, must act promptly to cause the record holder to follow the steps summarized below in a proper and timely manner if the beneficial owner wishes to assert any dissenters' rights.

        Requirements for exercising dissenters' rights.    If you desire to exercise your dissenters' rights, you must:

        If you do not satisfy all of these conditions, you cannot exercise dissenters' rights and will be entitled to receive only the consideration described in the merger agreement. Voting against, abstaining from voting or failing to vote with respect to the merger agreement does not constitute a notice of intent to demand the fair value of your shares within the meaning of Minnesota law.

        A shareholder's failure to vote with respect to the merger agreement will not constitute as a waiver of dissenters' rights. However, to assert your dissenters' rights you must not vote in favor of the merger agreement, and you must send a written notice to Osmonics stating your intent to demand fair value for your shares before the shareholder vote is taken at the special meeting of shareholders to adopt the merger agreement.

        If you return a signed proxy but do not specify a vote against the merger agreement or a direction to abstain, the proxy will be voted for the merger agreement, and you will lose your dissenters' rights even if you send a written notice of intent to demand fair value of your shares before the shareholder vote is taken at the special meeting of shareholders to adopt the merger agreement.

        Even if you do not return your proxy to Osmonics, if you do not send a written notice of intent to demand fair value for your shares to Osmonics before the shareholder vote is taken at the special meeting of shareholders to adopt the merger agreement, you will lose your dissenters' rights.

        A shareholder must assert dissenters' rights with respect to all of the shares registered in the holder's name, except where certain shares are beneficially owned by another person but registered in the holder's name. If a record holder, such as a broker, nominee, trustee or custodian, wishes to dissent with respect to shares beneficially owned by another person, the record holder must dissent with respect to all of the beneficial owner's shares and must disclose the name and address of the beneficial owner on whose behalf dissent is made. Also, a beneficial owner of shares who is not the record holder of those shares may assert dissenters' rights as to the shares held by a record holder on that beneficial owner's behalf, only if the beneficial owner submits a written consent from the record holder to Osmonics at or before the time the dissenters' rights are asserted.

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        Notices of intent to exercise dissenters' rights should be filed with Osmonics at: Osmonics, Inc., 5951 Clearwater Drive, Minnetonka, Minnesota, 55343, Attn: Ruth Carol Spatz.

        Post-shareholder meeting procedure.    If the merger agreement is adopted by the shareholders at the special meeting, then Osmonics (or the surviving corporation, if the merger has occurred) will send written notice to all shareholders who have given written notice under the dissenters' rights provisions and have not voted in favor of the merger agreement as described above. The notice will contain:

        If you wish to assert dissenters' rights and receive the fair value of your shares, you must demand payment and deposit your certificates with Osmonics (or the surviving corporation, if the merger has occurred) within thirty days after the notice is given. If you fail to make a demand for payment and deposit your certificates within the thirty-day period, you will lose the right to receive fair value for your shares under the dissenters' rights provisions, even if you filed a timely notice of intent to demand payment.

        Except as provided below, after the later of the effective time of the merger or Osmonics' or the surviving corporation's receipt of a valid demand for payment, the surviving corporation will remit to each dissenting shareholder who has complied with the requirements of Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act the amount the surviving corporation estimates to be the fair value of the shareholder's Osmonics common stock, with interest starting five days after the effective time of the merger at the rate prescribed by Minnesota Statutes Annotated §549.09. The surviving corporation will include the following information with the payment:

        The surviving corporation may withhold payment for any person who was not a shareholder on November 4, 2002, the date the merger was first announced to the public, or who is dissenting on behalf of a person who was not a beneficial owner on that date. If any dissenting shareholder to whom the surviving corporation is withholding payment in accordance with the preceding sentence has complied with the procedures described above, the surviving corporation shall send a statement to the shareholder setting forth the above information as well as the reason for withholding the remittance and an offer to pay to the dissenting shareholder the surviving corporation's estimate of the fair value of the shares, with interest, as a final settlement of the dissenting shareholder's demand for payment.

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        If you exercise dissenters' rights and you believe that the amount paid by the surviving corporation is less than the fair value of the shares plus interest, you may, within thirty days of the payment by the surviving corporation or offer for payment, notify the surviving corporation in writing of your estimate of the fair value of your shares plus interest and demand payment of the difference. If you fail to make a written demand within such thirty-day period you will only be entitled to the amount paid by the surviving corporation.

        Within sixty days after receipt by the surviving corporation of any dissenting shareholder's demand for supplemental payment, the surviving corporation shall either pay to the dissenting shareholder the supplemental amount demanded or agreed to by the dissenting shareholder after discussion with the surviving corporation or file a petition in court requesting that the court determine the fair value of the shares, plus interest. The petition shall be filed in Hennepin County, Minnesota, and shall name as parties all dissenting shareholders whose demands remain unsettled.

        The court may appoint one or more appraisers to receive evidence and make recommendations to the court as to the amount of the fair value of the shares. The court shall determine whether the shareholder or shareholders in question have fully complied with the requirements of Section 302A.473 of the Minnesota Business Corporation Act and shall determine the fair value of the shares, taking into account any and all factors the court finds relevant, computed by any method or combination of methods that the court, in its discretion, sees fit to use, whether or not used by the surviving corporation or by a dissenting shareholder. The fair value of the shares as determined by the court is binding on all dissenting shareholders. If the court determines that the fair value of the shares is in excess of any amount remitted by the surviving corporation, then the court will enter a judgment for cash in favor of the dissenting shareholders in an amount by which the value determined by the court, plus interest, exceeds the amount previously remitted.

        The court will determine the costs and expenses of the court proceeding, including the reasonable expenses and compensation of any appraisers appointed by the court, and assess them against the surviving corporation, except that the court may assess part or all of the costs against any dissenting shareholders whose actions in demanding supplemental payments are found by the court to be arbitrary, vexatious or not in good faith. If the court finds that Osmonics and/or the surviving corporation did not substantially comply with the relevant provisions of Section 302A.473 of the Minnesota Business Corporation Act, the court may also assess against the surviving corporation any fees and expenses of attorneys or experts that the court deems equitable. The court may also assess those fees and expenses against any party if the court finds that the party has acted arbitrarily, vexatiously or not in good faith in bringing the proceedings. The court may award, in its discretion, fees and expenses of an attorney for the dissenting shareholders out of the amount awarded to the dissenting shareholders.

        Under subdivision 4 of Section 302A.471 of the Minnesota Business Corporation Act, a shareholder has no right, at law or in equity, to set aside the adoption of the merger agreement except if the approval is fraudulent with respect to that shareholder or Osmonics.

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THE MERGER AGREEMENT

        The following is a summary of selected material provisions of the merger agreement. This summary is qualified in its entirety by reference to the merger agreement, which is incorporated by reference in its entirety and attached to this proxy statement/prospectus as Annex A. We urge you to read the merger agreement in its entirety.

Form of the Merger

        If the holders of Osmonics common stock adopt the merger agreement and all other conditions to the merger are satisfied or waived, Osmonics will be merged with and into Oasis Acquisition, Inc. a newly formed and wholly owned subsidiary of GE. After the merger, Oasis Acquisition will be the surviving corporation and will remain a wholly owned subsidiary of GE. GE and Osmonics anticipate that the closing of the merger will occur as promptly as practicable after the adoption of the merger agreement by the Osmonics shareholders at the special meeting.

Merger Consideration

        Exchange Ratio.    The merger agreement provides that each share of Osmonics common stock issued and outstanding immediately prior to the effective time (other than Osmonics common stock owned by GE or Osmonics and other than Osmonics common stock as to which dissenters' rights have been properly perfected) will be converted into the right to receive the number of shares of GE common stock (the "exchange ratio") determined by dividing $17.00 by the average of the volume weighted sales prices per share of GE common stock on the New York Stock Exchange for the ten consecutive full trading days ending on the third trading day immediately preceding, but not including, the effective time of the merger. GE will not issue any fractional shares. Instead, GE will pay cash for such fractional shares based on the closing price of GE common stock on the trading day immediately preceding the effective time. At the option of the shareholder, a shareholder may elect to receive $17.00 in cash for all or any portion of such shareholder's Osmonics common stock subject to proration as described below. See "—Cash Election Option."

        For example, if the average per share price of GE common stock for the ten-day valuation period is $23.95, which was the closing price of GE common stock on the New York Stock Exchange on January 23, 2003, an Osmonics shareholder owning 1000 shares of Osmonics common stock would receive 709 shares of GE common stock, plus cash instead of fractional shares. If the closing price of GE common stock on the trading day immediately preceding the effective time of the merger is equal to $23.95, the amount of cash paid in lieu of the fractional shares in this example would equal $19.45.

        Determination of Exchange Ratio; Changes in Stock Price.    The merger agreement provides that the ten-day valuation period will end on the trading day that is three trading days prior to the effective time of the merger. As a result, the number of shares of GE common stock constituting the merger consideration will be fixed three trading days before the merger. Because the market price of GE common stock fluctuates, the value of the GE common stock that Osmonics shareholders will receive in the merger may increase or decrease during the three trading day period between the end of the valuation period and the date of the merger. You may call, toll-free, (877) 456-3488 to receive hypothetical information concerning the estimated fraction of a share of GE common stock that will be issued in exchange for each share of Osmonics common stock, updated as of the week of your call. As part of its ongoing stock repurchase program, GE may reacquire shares of its common stock during the valuation period. For additional information see "Comparative Stock Prices and Dividends—GE Stock Purchase Program."

        The merger consideration generally is intended to provide, for each share of Osmonics common stock for which a cash election is not made, shares of GE common stock valued at $17.00, based on the average of the volume weighted sales prices of GE common stock (referred to as the "average price")

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during the ten-day valuation period. Therefore, a higher average price of GE common stock during the ten-day valuation period would result in fewer shares of GE common stock constituting the merger consideration, and a lower average price of GE common stock during the ten-day valuation period would result in more shares of GE common stock constituting the merger consideration. For example, if the average price of GE common stock during the ten-day valuation period were equal to $23.95 per share, one share of Osmonics common stock would become 0.7098 shares of GE common stock. An average price of GE common stock during the ten-day valuation period greater than $23.95 would result in fewer than 0.7098 shares of GE common stock constituting the merger consideration and an average price of GE common stock during the ten-day valuation period less than $23.95 would result in more than 0.7098 shares of GE common stock constituting the merger consideration.

        If between the date of the determination of the average price and the effective time of the merger, the outstanding shares of GE common stock are changed into a different number of shares or a different class by reason of any stock dividend, subdivision, reclassification or combination of shares, the merger agreement provides that the exchange ratio will be correspondingly adjusted, to the extent appropriate, to reflect such changes.

        Cash Election Option.    Each Osmonics shareholder may elect to receive $17.00 in cash rather than GE common stock for all or any portion of the Osmonics shares owned by such shareholder. See "The Merger—Procedures for Cash Election and Exchange of Osmonics Common Stock Certificates." Under the merger agreement, however, no more than 55% of the outstanding shares of Osmonics common stock, including shares owned by Osmonics shareholders that have perfected their dissenters' rights and shares owned by GE or Oasis Acquisition can be exchanged for cash. If the aggregate number of shares for which cash elections are made, for which dissenters' rights are perfected and that are owned by GE or Oasis Acquisition exceeds 55% of the outstanding shares of Osmonics common stock, then all shares of Osmonics common stock for which cash elections are made will be exchanged on a pro rata basis for a combination of cash and GE common stock so that the total number of Osmonics shares exchanged for cash (when combined with the total number of shares of Osmonics common stock for which dissenters' rights have been perfected and that are owned by GE or Oasis Acquisition) does not, in the aggregate, exceed 55% of the outstanding shares of Osmonics common stock. A pro rata reduction in the cash consideration paid to Osmonics shareholders electing cash will also be made if the aggregate cash consideration payable to shareholders who have elected cash plus $17.00 multiplied by the sum of the number of shares of Osmonics common stock for which dissenters' rights have been perfected and the number of shares of Osmonics common stock that are owned by GE or Oasis Acquisition exceeds 55% of the fair market value, as of the date of the merger, of the aggregate cash and stock consideration payable in the merger, or if a reduction is otherwise necessary to allow GE's and Osmonics' outside legal counsel to deliver their opinions as to the qualification of the merger as a "reorganization" under the Internal Revenue Code.

        For example, if you own 1000 shares of Osmonics common stock, you elect to receive all of your merger consideration in cash but shares for which cash elections are made, for which dissenters' rights are perfected or that are owned by GE or Oasis Acquisition equal 75% of the outstanding shares of Osmonics common stock, you will receive $12,461 in cash for 733 shares of your Osmonics common stock. The remaining 267 shares of your Osmonics common stock will be converted into GE common stock as described above. See "—Exchange Ratio".

        This means that there can be no assurance that you will receive 100% of the merger consideration in the form of cash for each share of Osmonics common stock for which you properly deliver a cash election form.

        Shares Held by Osmonics and GE.    Shares of Osmonics common stock owned by Osmonics or GE will be cancelled in the merger without payment of any merger consideration.

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        Fractional Shares of GE Common Stock.    GE will not issue fractional shares of GE common stock in the merger. Instead a cash payment will be paid in an amount equal to the product of (1) the fractional part of a share of GE common stock multiplied by (2) the closing price for GE common stock on the NYSE Composite Tape on the trading day immediately preceding the effective time of the merger.

Effective Time

        The merger will become effective on the date on which articles of merger relating to the merger are duly filed with the Secretary of State of Minnesota or such later time as is agreed upon by the parties and specified in the articles of merger. The filing of the articles of merger will take place as soon as practicable after the satisfaction or waiver of the conditions described below under "—Conditions of the Merger."

Treatment of Stock Options

        Each outstanding and unexercised option to buy shares of Osmonics common stock held by any current or former director, officer, employee, contractor or consultant of Osmonics will be converted, in accordance with its terms, into an option to purchase that number of shares of GE common stock equal to the number, rounded (or, in the case of an incentive stock option under Section 422 of the Internal Revenue Code, rounded down) to the nearest whole number of shares of GE common stock, determined by multiplying the exchange ratio by the number of shares of Osmonics common stock that were originally subject to the Osmonics option. The purchase price for each such converted option will equal the amount, rounded to the nearest one-hundredth of a cent, determined by dividing the per share exercise price for each such Osmonics option immediately before the effective time by the exchange ratio. The converted options will otherwise be subject to the same terms and conditions as were applicable to such option immediately prior to the merger, except for certain non-substantive administrative procedures, if necessary.

        The option plan under which Osmonics' executive officers and other key employees were granted options to purchase Osmonics common stock provides that all outstanding options will become fully vested and exercisable upon completion of the merger. The option plan under which Osmonics' directors were granted options to purchase Osmonics common stock does not provide for accelerated vesting upon the completion of the merger; the vested options will be converted into options to purchase GE common stock and the unvested options will expire upon completion of the merger.

Representations and Warranties

        The merger agreement contains representations and warranties by Osmonics relating to a number of matters, including the following:

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        The merger agreement also contains representations and warranties by GE and Oasis Acquisition, Inc. relating to a number of matters, including:

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        Certain of Osmonics' and GE's representations and warranties are qualified as to materiality or "material adverse effect." When used with respect to Osmonics or GE, "material adverse effect" means any change, event, occurrence or effect that would be materially adverse to the business, financial condition or results of operations of that party and its subsidiaries taken as a whole, other than any change or effect resulting from:

Covenants and Agreements

        Conduct of Business Pending Merger.    Osmonics has agreed that until the effective time of the merger it will conduct its business in the ordinary course consistent with past practice and use its reasonable best efforts to preserve intact its business organization and to preserve its present relationships with customers, suppliers and other persons with which Osmonics has significant business relations. Additionally, subject to certain exceptions, the merger agreement expressly restricts the ability of Osmonics, without GE's prior written consent (which consent cannot be unreasonably delayed or withheld), to:

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        Shareholders Meeting.    The merger agreement requires Osmonics to call and hold a meeting of its shareholders to adopt the merger agreement and the merger. Osmonics, however, is not required to hold the special meeting if the merger agreement is terminated. See "—Termination." Additionally, subject to certain limitations and certain fiduciary duty considerations, the board of directors of Osmonics has agreed to recommend that Osmonics' shareholders vote in favor of adoption of the merger agreement and the merger. See "—Covenants and Agreements—No Solicitation."

        Resignation of Osmonics' Directors.    Osmonics has agreed to deliver to GE at the effective time the resignation of its directors.

        Access to Information.    Subject to applicable laws relating to the exchange of information, Osmonics has agreed to, and to cause its subsidiaries to, provide GE's officers, employees, accountants, counsel and other representatives reasonable access to all Osmonics' properties, books and records and to Osmonics' officers and employees.

        GE has agreed to hold in confidence all information that GE receives from Osmonics in connection with the merger and the merger agreement. GE and Osmonics have entered into a confidentiality agreement governing GE's and Osmonics' rights and obligations with respect to such confidential treatment.

        No Solicitation.    The merger agreement precludes Osmonics, its subsidiaries, officers, directors and employees from, and requires Osmonics to use its reasonable best efforts to keep its investment bankers, attorneys, accountants and other representatives from, directly or indirectly, initiating, soliciting, knowingly encouraging, participating in any discussions regarding, furnishing any access to its properties, books and records or any confidential information or data with respect to, or facilitating any proposal to acquire more than 20% ownership of Osmonics, its subsidiaries or its assets. The merger agreement, however, permits Osmonics, prior to the approval of the merger agreement and the merger by Osmonics' shareholders, to furnish such information or negotiate with a third party if such actions are a response to an unsolicited, bona fide proposal from a third party regarding such an acquisition, if the acquisition did not result from a breach by Osmonics of its non-solicitation obligations and if the Osmonics board of directors determines in good faith, after consultation with its legal counsel and financial advisors, that as a result of such actions the proposal will result in, or could reasonably be expected to constitute or result in, a "superior proposal." In addition, Osmonics may withdraw, change or modify, in a manner adverse to GE, its recommendation of the merger agreement or may recommend an alternative transaction if the Osmonics board of directors determines in good faith,

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after consultation with its legal counsel and financial advisors, that the proposal is a superior proposal. If Osmonics withdraws, changes or modifies its recommendation or recommends a different transaction to Osmonics shareholders, GE may terminate the merger agreement requiring Osmonics to pay a termination fee of $7.7 million to GE. See "—Fees."

        The merger agreement defines a "superior proposal" as a proposal to acquire all of Osmonics' stock or all or substantially all of Osmonics' assets that the Osmonics board of directors reasonably determines in good faith, after consulting with its legal and financial advisors, is more favorable to Osmonics and its shareholders than the merger and is reasonably capable of being completed (including obtaining necessary financing).

        Osmonics is required to promptly advise GE if it receives any acquisition proposal. Osmonics is obligated to keep GE informed of all material developments affecting the status and terms of any takeover proposals or the status of any such discussions or negotiations.

        Under certain circumstances with respect to an alternative transaction that the board has determined is a superior proposal and subject to meeting certain requirements, including negotiating with GE in good faith to alter the terms of the merger and paying GE the termination fee, Osmonics can terminate the merger agreement if it elects to enter into a transaction that is a superior proposal. See "—Termination."

        The merger agreement does not prohibit Osmonics from complying with the requirements of Rules 14d-9 and 14e-2(a) promulgated pursuant to the Securities Exchange Act of 1934.

        Employee Matters.    GE has agreed that, for at least one year following the effective time of the merger, it will cause the surviving corporation to provide to Osmonics employees compensation and benefits that are substantially comparable, in the aggregate, to those provided by Osmonics to its employees on November 3, 2002, subject in the case of GE's equity based plans to eligibility requirements of those plans. GE will also provide Osmonics employees with credit for all service with Osmonics to the same extent as such service was credited by Osmonics under all employee benefit plans and arrangements to be provided by GE to such employees for purposes of eligibility and vesting and for purposes of calculating the amount of each employee's severance, vacation and sick leave benefits. GE has also agreed to waive any waiting periods or limitations for preexisting conditions under its employee benefit plans and to ensure that employees are given credit for any amounts paid toward deductibles, out-of-pocket limits or other fees on or prior to the effective time of the merger. GE has agreed to cause the surviving corporation to discharge Osmonics' obligations under certain employment and severance agreements.

        Directors' and Officers' Insurance; Indemnification.    The merger agreement provides that, for a minimum period of six years following the effective time of the merger, GE will, as permitted by law, indemnify persons who were Osmonics directors or officers before the merger and who suffer liabilities or losses from any claim, proceeding, action, suit or investigation arising out of or pertaining to the fact that the person was an Osmonics director or officer and pertaining to matters existing or occurring prior to the effective time of the merger. For six years following the merger, the articles of incorporation and bylaws of the surviving corporation will contain indemnification provisions relating to current and former directors, officers and employees no less favorable than those set forth in Osmonics' articles of incorporation and bylaws on November 3, 2002 and such provisions will not be amended, repealed or otherwise modified in any manner that would adversely affect the rights of those individuals. The merger agreement further requires that, for a minimum of six years following the effective time of the merger, subject to certain limitations, the surviving corporation maintain coverage under a director and officer liability insurance policy at a level at least equal to that which Osmonics is maintaining for its officers and directors prior to the merger.

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        Further Assurances.    Each of the parties to the merger agreement has agreed to use its reasonable best efforts to take all actions necessary, proper or advisable to consummate the transactions contemplated by the merger agreement as promptly as practicable. Specifically, GE and Osmonics have agreed to provide all necessary information and to make all filings required by the Hart-Scott-Rodino Antitrust Improvements Act and all applicable foreign antitrust laws. In the event that any governmental authority or private person institutes any proceeding to challenge the merger, Osmonics and GE have agreed to use their reasonable best efforts to defend such proceeding or to vacate or overturn any resulting decree or judgment. Additionally, Osmonics and GE have agreed to defend, at their own cost and expense any judicial or administrative action in connection with the merger. Finally, GE is not required to make any divestitures or to take, accept, or commit to any operational restriction on GE or any of its businesses.

        New York Stock Exchange Listing.    GE and Osmonics have agreed to use their reasonable best efforts to have the shares of GE common stock to be issued in the merger or reserved for issuance pursuant to the exercise of converted Osmonics options approved for listing on the New York Stock Exchange. GE has agreed to pay any fees in connection with such listing.

        Section 16(b) Exemption.    GE and Osmonics have agreed to take all steps necessary to cause the disposition of Osmonics common stock pursuant to the merger by any individual who may be subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 to be exempt under Rule 16b-3 promulgated pursuant to such act.

        Standstill Agreements.    Subject to the fiduciary duty obligations of Osmonics' board of directors, Osmonics has agreed to not terminate, amend, modify, or waive any provision of and to use its reasonable best efforts with respect to the enforcement of any confidentiality or standstill agreement relating to Osmonics.

        Termination of Certain Benefit Plans.    Osmonics has agreed to terminate its profit sharing and savings plan effective immediately prior to the closing date of the merger. GE has agreed to permit any current Osmonics employee to roll over the employee's account balance in the profit sharing and savings plan to a qualified defined contribution plan maintained by GE, at such times and in accordance with such requirements as are applicable to such GE plans. Finally, Osmonics has agreed to take all action reasonably necessary to terminate its 1995 Employee Stock Purchase Plan, effective as of the last day of the month immediately preceding the month in which the merger is completed. All participants in such stock purchase plan will be entitled to receive a refund of all cash amounts in their accounts in accordance with the terms of such plan.

Regulatory Approvals

        Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules of the Federal Trade Commission, the merger may not be consummated until notifications have been given and certain information has been furnished to the FTC and the Antitrust Division of the United States Department of Justice and specified waiting period requirements have been satisfied. GE and Osmonics each filed notification and report forms with the FTC and the Department of Justice effective December 10, 2002. On December 24, 2002, GE and Osmonics received notification of termination of the applicable waiting period.

        GE and Osmonics have also made filings with regulatory authorities pursuant to antitrust laws in countries where such filing is required, including Austria, Germany and Portugal. Necessary clearances have been obtained in Austria and Germany and it is currently anticipated that necessary clearances pursuant to the antitrust laws in such other countries where filings have been made will also be obtained prior to the special meeting. Except for these antitrust clearances and compliance with applicable federal and state securities and corporate laws, GE and Osmonics are not aware of any

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other material governmental or regulatory approvals required to be obtained in order to consummate the merger.

Conditions to the Merger

        Conditions to Each Party's Obligation to Effect the Merger.    The obligations of GE and Osmonics to complete the merger are conditioned on the following conditions being fulfilled:

        Conditions to Obligation of Osmonics to Effect the Merger.    The obligation of Osmonics to complete the merger depends on the following additional conditions being fulfilled:

        Conditions to Obligations of GE and Oasis Acquisition to Effect the Merger.    The obligations of GE and Oasis Acquisition to complete the merger depend upon the following additional conditions being fulfilled:

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Termination

        The merger agreement may be terminated and the merger may be abandoned at any time prior to the completion of the merger:


Effect of Termination

        If the merger agreement is terminated as described above, the agreement will be null and void, and there will be no liability of any party or its officers and directors except as to confidentiality, public announcements, and fees and expenses, including the termination fee and expense reimbursement described in the following section.

Fees

        Osmonics is required to pay GE a termination fee of $7.7 million:

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        If the merger agreement is terminated because the Osmonics shareholders do not adopt the merger, Osmonics will reimburse GE for up to $750,000 of expenses actually incurred by GE on or after October 28, 2002. Any expenses reimbursed to GE will reduce any termination fee, described in the preceding paragraph, that may be payable by Osmonics.

Amendment and Waiver

        Amendment.    The merger agreement may be amended by the written agreement of the parties at any time prior to the effective time of the merger, whether before or after the approval and adoption of the merger agreement by Osmonics' shareholders. However, following such approval and adoption, no amendment of the merger agreement shall be made which requires further approval of Osmonics' shareholders, unless further approval is sought and obtained.

        Waiver.    At any time prior to the effective time of the merger, GE or Osmonics may:

        Any extension or waiver will be valid only if set forth in writing and signed by the party granting the waiver. Neither GE nor Osmonics currently intends or expects to amend or waive any of the representations, warranties, agreements or conditions in the merger agreement. The failure of any party to assert any rights under the merger agreement will not constitute a waiver.

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COMPARATIVE RIGHTS OF GE AND OSMONICS SHAREHOLDERS

        GE is incorporated under the laws of the State of New York, whereas Osmonics is incorporated under the laws of the State of Minnesota. Osmonics shareholders' rights are currently governed by the Minnesota Business Corporation Act (the "MBCA"), the articles of incorporation of Osmonics and the bylaws of Osmonics; however, if the merger is completed, Osmonics shareholders who receive shares of GE common stock in the merger will become shareholders of GE, and their rights as such will be governed by the New York Business Corporation Law (the "NYBCL"), the GE certificate of incorporation and the bylaws of GE. The material differences between the rights of holders of Osmonics common stock and the rights of holders of GE common stock, resulting from the differences in their governing documents, are summarized below.

        The following summary does not purport to be a complete statement of the rights of holders of GE common stock under the applicable provisions of the NYBCL, the GE certificate of incorporation and the GE bylaws or the rights of the holders of Osmonics common stock under the applicable provisions of the MBCA, the Osmonics articles of incorporation and the Osmonics bylaws, or a complete description of the specific provisions referred to herein. This summary contains a list of the material differences but is not meant to be relied upon as an exhaustive list or a detailed description of the provisions discussed and is qualified in its entirety by reference to the NYBCL and MBCA and the governing corporate documents of GE and Osmonics, to which the holders of Osmonics common stock are referred. Copies of such governing corporate documents of GE and Osmonics are available, without charge, to any person, including any beneficial owner to whom this proxy statement/prospectus is delivered, by following the instructions listed under "Where You Can Find More Information."


Summary of Material Differences Between
the Rights of Osmonics Shareholders
and the Rights of GE Shareholders

 
  Osmonics Shareholder Rights
  GE Shareholder Rights
Authorized Capital Stock:   The authorized capital stock of Osmonics currently consists of 50,500,000 shares of capital stock consisting of (i) 50,000,000 shares of common stock, par value $0.01 per share, and (ii) 500,000 shares of preferred stock, par value $1.00 per share.

The MBCA does not allow shares of capital stock to be held in treasury.
  The authorized capital stock of GE currently consists of 13,250,000,000 shares of capital stock, consisting of (i) 13,200,000,000 shares of GE common stock, par value $0.06 per share, and (ii) 50,000,000 shares of preferred stock, par value $1.00 per share.

The NYBCL allows shares of capital stock to be held in treasury.

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Payment of Dividends   Under the MBCA, a corporation may declare a dividend to its shareholders if the board of directors determines that the corporation will be able to pay its debts in the ordinary course of business after distributing the dividend and the board does not know before the dividend is made that the determination was or has become erroneous and if the dividend does not violate any prohibition, limitation, restriction, or rights or priorities of persons to receive dividends in the corporation's articles or bylaws or an agreement. A dividend may be made to the holders of a class or series of shares only if (i) all amounts payable to the holders of a class or series of shares having a payment preference are paid and (ii) the distribution does not reduce the remaining net assets of the corporation below the aggregate preferential amount payable in the event of liquidation to the holders of shares having preferential rights.   Under the NYBCL, a corporation may pay dividends out of surplus; however, no dividends may be paid if the corporation is insolvent, if the dividend payment would render the corporation insolvent or if such payment would be contrary to any restrictions contained in the certificate of incorporation. GE's certificate of incorporation does not address restrictions on the payment of dividends.

Number of Directors:

 

The Osmonics board of directors currently consists of five directors. The number of directors shall be established from time to time by resolution adopted by the Osmonics board of directors. Directors serve for three year terms, with approximately one-third of the directors' terms expiring each year.

 

The GE board of directors currently consists of 19 directors. The number of directors is determined by vote of the majority of the entire board or by a vote of the shareholders of GE at the annual meeting but cannot be less than ten. Directors serve for one year terms.

Removal of Directors:

 

The MBCA and Osmonics' bylaws provide that any or all of the directors of a corporation may be removed with or without cause by the affirmative vote of a majority of the outstanding shares entitled to vote; provided that if a director has been elected solely by the holders of a class or series of shares, then that director may be removed only by the affirmative vote of the holders of a majority of the voting power of all shares of that class or series entitled to vote at an election of that director. Additionally, the board of directors, by majority vote, may remove a director who was appointed to fill a vacancy if the shareholders have not elected directors in the interval between the time of appointment and the time of removal.

 

The NYBCL provides that any or all of the directors of a corporation may be removed for cause and, if the certificate of incorporation or bylaws of the corporation provide, without cause by vote of the shareholders. GE's certificate of incorporation and bylaws do not provide for removal of directors without cause.

58


Vacancies on the Board:   Under the MBCA, unless a corporation's articles or bylaws provide otherwise, (1) a vacancy on a corporation's board of directors may be filled by a majority vote of the directors then in office, although less than a quorum, (2) a newly created directorship resulting from an increase in the number of directors may be filled by a majority vote of the directors then serving on the board, and (3) any director elected pursuant to clause (1) or (2) above can hold office only until a qualified successor is elected at the next regular or special meeting of shareholders. Osmonics' bylaws provide that any vacancies on the board or increase in the authorized number of directors shall be filled for the unexpired term by a majority of the directors then in office.   The NYBCL provides that newly created directorships resulting from an increase in the number of directors and vacancies occurring on the board for any reason, except the removal of directors without cause, may be filled by the vote of the directors then in office, and if the number of directors remaining in office is less than a quorum, by the vote of a majority of the directors then in office. GE's bylaws provide that a third of the number of directors on the board constitutes a quorum. GE's bylaws also provide that any vacancy may be filled for the unexpired term by the remaining board members.

Amendment of Charter:

 

Osmonics' articles of incorporation may be amended in any manner permitted under Minnesota law, which includes the affirmative vote of the holders of a majority of the outstanding shares entitled to vote, except that amendment of the provisions establishing the classified board and establishing special voting requirements in certain transactions requires the affirmative vote of 90% of Osmonics' voting power.

 

Generally, the NYBCL permits amendment of the GE charter if the amendment is approved by a majority vote of the board of directors of GE and the affirmative vote of at least a majority of the outstanding shares of GE common stock.

Amendment of Bylaws:

 

Osmonics' bylaws may be amended, supplemented or repealed by the board of directors of Osmonics or by the shareholders entitled to vote thereon at any annual or special meeting of shareholders. However, Osmonics' board of directors is prohibited from adopting, amending, or repealing any bylaw fixing a quorum for meetings of shareholders, prescribing procedures for removing directors, filling vacancies on the board of directors, or fixing the number of directors or their classifications, qualifications or terms of office. The board of directors may, however, adopt or amend a bylaw to increase the number of directors.

 

GE's bylaws may be amended or repealed by the shareholders or the board of directors of GE, except that the GE board of directors does not have the authority to amend or repeal any bylaw which is adopted by the GE shareholders after April 20, 1948, unless such authority is granted to the GE board of directors by the specific provisions of a bylaw adopted by the GE shareholders.

59


Indemnification:   The MBCA provides that, unless the articles of incorporation or bylaws otherwise provide, directors, officers and employees of a corporation will be indemnified against judgments, penalties, fines, settlements and reasonable expenses (including attorneys' fees) incurred in connection with legal proceedings to which they are made, or threatened to be made, a party by reason of their present or former status as a director, officer or employee, if:

    •  they have not been indemnified by another organization;

    •  they acted in good faith;

    •  they received no improper personal benefit;

    •  in the case of any criminal proceeding, they had no reasonable cause to believe their conduct was unlawful; and

    •  they reasonably believed their conduct was not opposed to the corporation's best interests.

Indemnification under the MBCA is not exclusive of other indemnification rights to which a director or officer may be entitled through a corporation's articles, bylaws, resolutions or individual agreements.

Osmonics' bylaws provide that all persons shall be indemnified to the extent permitted by the laws of Minnesota. Additionally, Osmonics' articles of incorporation eliminate personal liability for a director for a breach of his or her fiduciary duty to the extent allowed by law.
  Under the NYBCL, a corporation may indemnify any person made, or threatened to be made, a party to any action or proceeding (other than a proceeding by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that he or she was a director or officer of the corporation, provided such director or officer acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the corporation. In an action by or in the right of the corporation to procure a judgment, the corporation may indemnify any person who was a director or officer of the corporation if he or she acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the corporation, except that no indemnification may be made for (1) a threatened action or a pending action which is settled or otherwise disposed of or (2) any claim, issue or matter as to which such person had been adjudged to be 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 circumstances the person is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper.

No indemnification may be made if a judgment or other final adjudication adverse to the director or officer establishes that (1) his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action or (2) resulted in financial gain or other advantage to which he or she was not legally entitled.

Indemnification under the NYBCL is not exclusive of other indemnification rights to which a director or officer may be entitled through a corporation's articles, bylaws, resolutions, or individual agreements.

GE's bylaws allow for indemnification to the full extent of the NYBCL. GE's articles of incorporation also eliminate personal liability for breaches of fiduciary duty except where liability is specifically imposed under the NYBCL.

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Meetings of Shareholders   Osmonics' bylaws provide that the annual meeting of the shareholders will be held within six months after the end of Osmonics' fiscal year. The MBCA provides that a special meeting of shareholders may be called by certain officers, two or more directors, a person authorized to do so in the articles of incorporation or bylaws or shareholders holding at least 10% of the voting power of all shares entitled to vote, except that a special meeting for the purpose of considering an action to effect, directly or indirectly, a business combination must be called by shareholders holding at least 25% of the voting power of all shares entitled to vote.   GE's bylaws provide that the annual meeting of the shareholders will be held on the fourth Wednesday in April. Under the NYBCL, a special meeting of shareholders may be called by the board of directors or by any person authorized to do so in the certificate of incorporation or bylaws. The GE bylaws provide that special meetings of shareholders may be called by the GE board, or by the written request of shareholders holding 40% of the outstanding stock of GE.

Consent of Shareholders in Lieu of a Meeting:

 

Under the MBCA, an action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting by written action only if signed by all of the shareholders entitled to vote on that action.

Osmonics' bylaws provide that any action that may be taken at a meeting of the shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the actions so taken is signed by all of the shareholders entitled to notice of a meeting for such purpose.

 

The NYBCL provides that shareholder action may be taken without a meeting upon the written consent of the holders of all the outstanding shares entitled to vote, and also allows, if the certificate of incorporation so provides, shareholder action without a meeting upon the written consent of holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize such action at a meeting at which all shares entitled to vote thereon were present and voted.

Neither the GE certificate of incorporation nor bylaws contains any provision with respect to actions by shareholders by written consent.

Dissenters' Rights:

 

Under the MBCA, a shareholder may dissent and obtain the fair value for its shares in connection with (1) certain mergers, exchanges, or consolidations, (2) certain sales, leases transfers or dispositions of substantially all of the assets of the corporation, or (3) amendments to the articles of incorporation that materially and adversely affect the rights or preferences of the shares of the dissenting shareholder.

 

The NYBCL provides that, upon strict compliance with the applicable statutory requirements and procedures, a dissenting shareholder has the right to receive payment of the fair value of such shareholder's shares if such shareholder objects to: (1) mergers or consolidations, unless the corporation's shares are listed on a national securities exchange, (2) dispositions of assets requiring shareholder approval, (3) specified share exchanges, or (4) amendments to the certificate of incorporation that adversely affect the rights of such shareholder in certain specified ways.

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Shareholder's Right to Examine Books and Records:

 

The MBCA provides that any shareholder, beneficial owner, or holder of a voting trust certificate of a publicly held corporation has the right, upon written demand stating the purpose, to examine and copy the corporation's share register and other corporate records upon demonstrating a proper purpose.

 

The NYBCL provides that any shareholder has the right to examine and copy the minutes and proceedings of its shareholders and the record of shareholders upon demonstrating a proper purpose. Inspection may be denied to a shareholder should he or she refuse to furnish an affidavit showing that the inspection is (i) not for a purpose against the best interests of the business and (ii) that he or she has not within five years sold or offered for sale a list of shareholders to outside parties.

Interested Shareholders:

 

Osmonics is subject to Section 302A.673 of the MBCA which prohibits an "interested shareholder" from engaging in a business combination with the corporation for four years following the time that person became an interested shareholder unless a committee of the board of directors comprised of "disinterested" directors (or if there are not disinterested directors, disinterested persons), prior to the time the person became an interested shareholder, approved either the business combination or the transaction that resulted in the person becoming an interested shareholder.

An "interested shareholder" is a person or an entity who is the beneficial owner, directly or indirectly, of 10% or more of the voting power of the corporation or who is an affiliate or associate of the corporation and, at any time within the four year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the corporation.

A director or person is "disinterested" if the director or person is neither an officer nor an employee, nor has been an officer or employee, of the corporation within five years preceding the formation of the committee of disinterested directors.

 

An interested shareholder, defined generally as a person owning 20% or more of a corporation's outstanding voting stock, is prevented from engaging in a business combination with the corporation for five years after becoming an interested shareholder, unless:

        (i) the board approved the transaction in
    which the interested shareholder became
    an interested shareholder; or

        (ii) the board approves the business
    combination before the shareholder
    becomes an interested shareholder.

If the board did not approve the transaction in which the interested shareholder became an interested shareholder, such interested shareholder is prevented from engaging in a business combination after the five-year period unless:

        (i) a majority of the shares not owned by
    the interested shareholder approve the
    business combination; or

        (ii) the consideration to be provided in
    connection with the business combination
    meets certain fair price criteria.

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Fair Price Provisions:   Pursuant to Section 302A.675 of the MBCA, an offeror cannot acquire additional shares of a public corporation within two years of acquiring stock of the corporation pursuant to a "takeover offer" unless the selling shareholder is afforded the opportunity to dispose of its stock on substantially equivalent terms as provided in the takeover offer. A "takeover offer" is defined as an acquisition pursuant to a tender offer or request for tenders resulting in (a) the buyer owning directly or indirectly more than 10% of the outstanding stock of the corporation if the buyer did not previously own 10%, or (b) the buyer increasing its ownership of any class of stock of the corporation by more than 10% if the buyer did previously own 10% of the outstanding stock of the corporation. Section 302A.675 does not apply if the original takeover offer is approved by a committed of the board of directors who:   There is no analogous provision in the NYBCL.

 

 

    •  are not or during the preceding five years were not officers or employees of the corporation;

 

 

 

 

    •  are neither the offeror nor affiliates or associates of the offeror;

 

 

 

 

    •  were not nominated for election as directors by the offeror or an affiliate or associate of the offeror; and

 

 

 

 

    •  were directors at the time of the announcement of the takeover offer or were nominated for election by a majority of the directors.

 

 

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Supermajority Voting:

 

Osmonics' articles of incorporation require that any "business combination" between Osmonics (or any subsidiary) and any "related person" be approved by 90% of Osmonics' outstanding voting power. A "business combination" includes any merger or consolidation, sale, transfer, lease or other disposition of assets, and the issuance (other than on a pro rata basis to all shareholders) of securities of Osmonics. A "related person" is any person that beneficially owns (together with such person's affiliates and associates) 25% or more of Osmonics outstanding voting power. The voting provisions required by this provision do not apply if a majority of the disinterested and unaffiliated members of Osmonics' board of directors approves the transaction or if the "business combination" is a merger, consolidation, or sale of all or substantially all of Osmonics' assets and the consideration received by Osmonics' shareholders meet certain "fair price" requirements.

 

Neither the NYBCL nor GE's certificate of incorporation or bylaws have a similar provision.

Control Share Acquisition:

 

Section 302A.671 of the MBCA requires disinterested shareholder approval for any acquisition of shares of an "issuing public corporation" which results in the "acquiring person" owning more than a designated percentage of the outstanding shares of such corporation. Shares beneficially owned by the acquiring person that exceed certain share ownership thresholds lose their voting power unless and until the acquiring person discloses certain information to the corporation and voting rights are granted by the shareholders, pursuant to special voting requirements set forth in Section 302A.671, at a special or annual meeting of the shareholders or the shares are transferred to an unaffiliated third party. Those shares may also be subject to redemption in various circumstances.

 

There is no analogous provision in the NYBCL.

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    Control share acquisitions do not include:    

 

 

(i) mergers or consolidations if the issuing public corporation is a party to the transaction;

 

 

 

 

(ii) an acquisition of shares from the issuing public corporation; and

 

 

 

 

(iii) an acquisition pursuant to a cash tender offer of, or an exchange for stock pursuant to an exchange offer for, all shares of the voting stock of the issuing public corporation which has been approved by a majority vote of the members of a committee comprised of the disinterested members of the board of directors of the issuing public corporation formed before the commencement of, or the public announcement of the intent to commence, the tender offer and pursuant to which acquisition the acquiring person will become the owner of over 50% of the voting stock of the issuing public corporation outstanding at the time of the transaction.

 

 

 

 

Section 302A.671 of the MBCA applies unless the issuing public corporation opts out of the statute in its articles of incorporation or bylaws. Osmonics has not opted out of the statute.

 

 

Anti-Greenmail Provisions

 

The MBCA contains a provision that limits the ability of a Minnesota corporation to pay "greenmail." Pursuant to the statute, a publicly held corporation is prohibited from purchasing or agreeing to purchase any shares from any person (or two or more persons who act as a partnership or limited partnership, syndicate, or other group pursuant to any written, or oral agreement, arrangement, relationship, understanding or otherwise for the purpose of acquiring, owning or voting shares of the publicly held corporation) who beneficially owns more than 5% of the voting power of the corporation if the shares had been beneficially owned by that person for less than two years, and if the purchase price would exceed the market value of those shares. However, such a purchase would not violate the statute if the purchase is approved at a meeting of the shareholders entitled to vote or if the corporation's offer is at least of equal value per share and is made to all holders of any class or series into which the securities may be converted.

 

There is no analogous provision in the NYBCL.

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DESCRIPTION OF GE'S CAPITAL STOCK

        Set forth below is a description of the GE common stock. The following statements are brief summaries of, and are subject to the detailed provisions of, GE's certificate of incorporation, GE's bylaws and the relevant provisions of the New York corporate law.

General

        GE currently is authorized to issue up to 13,200,000,000 shares of common stock, par value $0.06 per share. GE is also authorized to issue up to 50,000,000 shares of preferred stock, par value $1.00 per share, in series. GE has not issued any of this preferred stock. If preferred stock is issued, GE's board of directors may fix the designation, relative rights, preferences and limitations of the shares of each series.

        Dividends may be paid on the GE common stock out of funds legally available for dividends, when and if declared by GE's board of directors.

        Holders of the GE common stock are entitled to share ratably in any dividends and in any assets available for distribution on liquidation, dissolution or winding up, subject, if preferred stock of GE is then outstanding, to any preferential rights of such preferred stock. Each share of GE common stock entitles the holder thereof to one vote at all meetings of share owners, and the votes are noncumulative. The GE common stock is not redeemable, has no subscription or conversion rights and does not entitle the holder thereof to any preemptive rights.

Transfer Agent and Registrar

        The Bank of New York is the transfer agent and registrar for the GE common stock.


STOCK EXCHANGE LISTING

        It is a condition to the merger that the shares of GE common stock issuable as a result of the merger be approved for listing on the NYSE. If the merger is completed, Osmonics common stock will cease to be quoted on the NYSE.


EXPERTS

        KPMG LLP, independent certified public accountants, audited GE's consolidated financial statements as of December 31, 2001 and 2000, and for each of the years in the three-year period ended December 31, 2001. GE's Current Report on Form 8-K dated September 17, 2002 includes these financial statements and the auditor's report. The audit report covering the December 31, 2001, consolidated financial statements refers to changes in the method of accounting for derivative instruments and hedging activities and impairment of certain beneficial interests in securitized assets. This proxy statement/prospectus incorporates the financial statements and report by reference, relying on KPMG LLP's authority as experts in accounting and auditing.

        The consolidated financial statements of Osmonics incorporated in this proxy statement/prospectus by reference from Osmonics' Annual Report on Form 10-K for the year ended December 31, 2001 and the related financial statement schedule incorporated in this proxy statement/prospectus by reference from Osmonics' Amendment No. 2 to Annual Report on Form 10-K/A for the year ended December 31, 2001 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports which are incorporated by reference and have been so incorporated in reliance upon the reports of such firm given their authority as experts in accounting and auditing.


LEGAL MATTERS

        The legality of the GE common stock offered hereby will be passed upon for GE by Robert E. Healing, Corporate Counsel of GE. Mr. Healing beneficially owns or has rights to acquire an aggregate of less than 0.01% of GE common stock. King & Spalding LLP, counsel to GE, and Simpson Thacher & Bartlett, counsel to Osmonics, will each deliver an opinion concerning the federal income tax consequences of the merger.

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SHAREHOLDER PROPOSALS

        Osmonics will hold an annual meeting of its shareholders in 2003 only if the merger is not completed. If Osmonics' 2003 annual meeting is to be held, in order to be considered for inclusion in Osmonics' proxy statement for the meeting, shareholder proposals must have been received at Osmonics' principal executive offices, 5951 Clearwater Drive, Minnetonka, Minnesota 55343-8995, no later than December 17, 2002 and otherwise have complied with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended.

        With respect to any shareholder proposal which the shareholder has not previously sought to include in Osmonics' proxy statement, notice of the same must be provided by March 2, 2003 or management proxies will be allowed, pursuant to Rules 14a-4 and 14a-5(e) promulgated pursuant to the Securities Exchange Act of 1934, to use their discretionary authority with respect to such proposals when raised at Osmonics' 2003 annual meeting.


WHERE YOU CAN FIND MORE INFORMATION

        This proxy statement/prospectus incorporates important business and financial information about Osmonics and GE from documents filed with the Securities and Exchange Commission that are not included in or delivered with this proxy statement/prospectus.

        Osmonics and GE file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed by GE or Osmonics at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. You can also inspect reports, proxy statements and other information about GE and Osmonics at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

        You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates, or from commercial document retrieval services.

        The SEC maintains a website that contains reports, proxy statements and other information, including those filed by GE and Osmonics, at http://www.sec.gov. You may also access the SEC filings and obtain other information about GE and Osmonics through the websites maintained by GE and Osmonics, which are http://www.ge.com and http://www.osmonics.com. The information contained in such websites is not incorporated by reference into this proxy statement/prospectus.

        As allowed by SEC rules, this proxy statement/prospectus does not contain all the information you can find in the registration statement on Form S-4 filed by GE to register the shares of stock to be issued in the merger and the exhibits to the registration statement. The SEC allows GE and Osmonics to "incorporate by reference" information into this proxy statement/prospectus, which means that we can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus, except for any information superseded by information in this proxy statement/prospectus. This proxy statement/prospectus incorporates by reference the documents set forth below that GE and Osmonics have previously filed with the SEC. These documents contain important information about the companies and their financial condition.

GE filings with the SEC

67


Osmonics filings with the SEC

        All documents filed by GE and Osmonics pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date of this prospectus to the date of the special meeting shall also be incorporated herein by reference.

        You may also obtain copies of any document incorporated in this proxy statement/prospectus, without charge, by requesting them in writing, by telephone or by e-mail from the appropriate company at the following addresses:

Osmonics, Inc.
Investor Relations
  General Electric Company
GE Corporate Investor Communications
5951 Clearwater Drive
Minnetonka, MN 55343-8990
  3135 Easton Turnpike
Fairfield, CT 06828-1077

Telephone: (952) 933-2277

 

Telephone: (203) 373-2816

e-mail: generalinvestor@osmonics.com

 

e-mail: pauline.berardi@corporate.ge.com

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        If you would like to request documents, please do so by February 19, 2003 in order to receive them before the special meeting.

        Neither GE nor Osmonics have authorized anyone to give any information or make any representation about the merger that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that are incorporated by reference into this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date and neither the mailing of this proxy statement/prospectus nor the issuance of GE common stock in the merger shall create an implication to the contrary. All information contained in or incorporated by reference in this proxy statement/prospectus with respect to Osmonics and its subsidiaries has been provided by Osmonics. All information contained or incorporated by reference in this proxy statement/prospectus with respect to GE and its subsidiaries has been provided by GE. Neither GE nor Osmonics warrants the accuracy of the information provided by the other party.

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SPECIAL NOTE CONCERNING FORWARD LOOKING STATEMENTS

        This proxy statement/prospectus, including information included or incorporated by reference in this proxy statement/prospectus, contains certain forward-looking statements, within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words "will," "may," "should," "continue," "believes," "expects," "intends," "anticipates", "estimates" or similar expressions identify forward-looking statements and any statements regarding the benefits of the merger, or GE's or Osmonics' financial condition, results of operations and business are also forward-looking statements. Without limiting the generality of the preceding sentence, the statements contained in the sections "The Merger—Background of the Merger," "The Merger—Recommendation of the Osmonics Board; Osmonics' Reasons for the Merger," "The Merger—Opinion of Goldman, Sachs & Co.," and "The Merger—GE's Reasons for the Merger" constitute forward-looking statements.

        These forward-looking statements involve certain risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following factors:

Any forward-looking statements in the proxy statement/prospectus are not guarantees of future performance, and actual results, developments and business decisions may differ from those contemplated by those forward-looking statements, possibly materially. GE and Osmonics disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section. See also "Where You Can Find More Information."

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ANNEX A

        EXECUTION COPY


AGREEMENT AND PLAN OF MERGER

among

GENERAL ELECTRIC COMPANY,

OASIS ACQUISITION, INC.

and

OSMONICS, INC.

Dated as of November 3, 2002



TABLE OF CONTENTS

 
  Page
ARTICLE I THE MERGER   A-1

SECTION 1.1 The Merger

 

A-1
SECTION 1.2 Closing; Effective Time   A-1
SECTION 1.3 Effects of the Merger   A-1
SECTION 1.4 Articles of Incorporation; By-Laws   A-1
SECTION 1.5 Directors and Officers   A-2
SECTION 1.6 Tax Consequences   A-2

ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS

 

A-2

SECTION 2.1 Conversion of Securities

 

A-2
SECTION 2.2 Cash Elections   A-3
SECTION 2.3 Proration   A-4
SECTION 2.4 Treatment of Options and other Share-based Company Plans   A-5
SECTION 2.5 Dissenting Shares   A-6
SECTION 2.6 Surrender of Shares   A-6

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

A-8

SECTION 3.1 Organization and Qualification; Subsidiaries

 

A-8
SECTION 3.2 Articles of Incorporation and By-laws   A-9
SECTION 3.3 Capitalization   A-9
SECTION 3.4 Authority Relative to This Agreement   A-10
SECTION 3.5 No Conflict; Required Filings and Consents   A-10
SECTION 3.6 Compliance   A-11
SECTION 3.7 SEC Filings; Financial Statements   A-11
SECTION 3.8 Absence of Certain Changes or Events   A-12
SECTION 3.9 Absence of Litigation   A-12
SECTION 3.10 Employee Benefit Plans   A-12
SECTION 3.11 Tax Matters   A-14
SECTION 3.12 Form S-4; Proxy Statement   A-15
SECTION 3.13 Opinion of Financial Advisor   A-15
SECTION 3.14 Brokers   A-15
SECTION 3.15 Takeover Statutes; Rights Plans   A-15
SECTION 3.16 Intellectual Property   A-16
SECTION 3.17 Environmental Matters   A-16
SECTION 3.18 Reorganization Qualification   A-18
SECTION 3.19 Properties   A-18
SECTION 3.20 Contracts   A-18
SECTION 3.21 Insurance   A-19
SECTION 3.22 Employee And Labor Relations   A-19
SECTION 3.23 Related Party Transactions   A-20
SECTION 3.24 Industrial Development Bonds   A-20
SECTION 3.25 Product Liability; Warranties   A-20

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

 

A-21

SECTION 4.1 Organization and Qualification; Subsidiaries

 

A-21

i


SECTION 4.2 Capitalization   A-21
SECTION 4.3 Authority Relative to This Agreement   A-21
SECTION 4.4 No Conflict; Required Filings and Consents   A-22
SECTION 4.5 SEC Filings; Financial Statements   A-22
SECTION 4.6 Absence of Certain Changes or Events   A-23
SECTION 4.7 Form S-4; Proxy Statement   A-23
SECTION 4.8 Brokers   A-23
SECTION 4.9 Ownership of Shares   A-23
SECTION 4.10 Vote/Approval Required   A-23
SECTION 4.11 Reorganization Qualification   A-23

ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER

 

A-23

SECTION 5.1 Conduct of Business of the Company Pending the Merger

 

A-23
SECTION 5.2 No Control of Other Party's Business   A-25

ARTICLE VI ADDITIONAL AGREEMENTS

 

A-25

SECTION 6.1 Shareholders Meeting

 

A-25
SECTION 6.2 Form S-4 and Proxy Statement   A-25
SECTION 6.3 Resignation of Directors   A-26
SECTION 6.4 Access to Information; Confidentiality   A-26
SECTION 6.5 Acquisition Proposals   A-26
SECTION 6.6 Employment and Employee Benefits Matters   A-28
SECTION 6.7 Directors' and Officers' Indemnification and Insurance   A-29
SECTION 6.8 Further Action; Reasonable Best Efforts   A-30
SECTION 6.9 Public Announcements   A-31
SECTION 6.10 NYSE Listing   A-31
SECTION 6.11 Rule 16(b)   A-31
SECTION 6.12 Affiliates   A-32
SECTION 6.13 Standstill Agreements; Confidentiality Agreements   A-32
SECTION 6.14 Shareholder Litigation   A-32
SECTION 6.15 Termination of Benefits Plan   A-32

ARTICLE VII CONDITIONS OF MERGER

 

A-32

SECTION 7.1 Conditions to Obligation of Each Party to Effect the Merger

 

A-32
SECTION 7.2 Conditions to Obligations of Parent and Merger Sub   A-33
SECTION 7.3 Conditions to Obligations of the Company   A-33

ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER

 

A-34

SECTION 8.1 Termination

 

A-34
SECTION 8.2 Effect of Termination   A-35
SECTION 8.3 Expenses   A-36
SECTION 8.4 Amendment   A-36
SECTION 8.5 Waiver   A-36

ARTICLE IX GENERAL PROVISIONS

 

A-36

SECTION 9.1 Non-Survival of Representations, Warranties and Agreements

 

A-36
SECTION 9.2 Notices   A-36
SECTION 9.3 Certain Definitions   A-37
SECTION 9.4 Severability   A-38
SECTION 9.5 Entire Agreement; Assignment   A-38

ii


SECTION 9.6 Parties in Interest   A-39
SECTION 9.7 Governing Law   A-39
SECTION 9.8 Headings   A-39
SECTION 9.9 Counterparts   A-39
SECTION 9.10 Specific Performance; Service of Process   A-39
SECTION 9.11 Parent Guarantee   A-39
SECTION 9.12 Interpretation   A-39

Exhibit A—Form of Affiliate Letter

 

 

iii



INDEX OF PRINCIPAL TERMS

 
  Page
Acquisition Proposal   A-27
affiliate   A-37
Agreement   A-1
Antitrust Law   A-30
Articles of Merger   A-1
Average Price   A-2
beneficial owner   A-37
beneficially owned   A-38
Bonds   A-20
business day   A-38
By-Laws   A-9
Cash Consideration   A-2
Cash Election   A-3
Cash Proration Factor   A-4
Certificates   A-3
Closing   A-1
Closing Date   A-1
Code   A-1
Company   A-1
Company Common Stock   A-2
Company Disclosure Schedule   A-8
Company Employees   A-12
Company Material Adverse Effect   A-8
Company Plans   A-12
Company Preferred Stock   A-9
Company Requisite Vote   A-10
Company SEC Reports   A-11
Company Securities   A-9
Company Stock Plans   A-9
control   A-38
controlled   A-38
controlled by   A-38
Costs   A-29
Dissenting Shares   A-6
DOJ   A-30
Effective Time   A-1
Electing Company Shares   A-2
Election Date   A-3
employee benefit plan   A-12
Environmental Laws   A-17
Environmental Permits   A-17
Environmental Tests   A-26
ERISA   A-12
Exchange Act   A-3
Exchange Agent   A-3
Exchange Ratio   A-2
Financial Advisor   A-15
Foreign Plans   A-13

iv


Form of Election   A-3
Form S-4   A-11
FTC   A-30
generally accepted accounting principles   A-38
Governmental Authority   A-30
governmental entity   A-38
HSR Act   A-10
IDB Indenture   A-20
Indemnified Parties   A-29
Insurance Policies   A-19
IRS   A-12
knowledge   A-38
Lien   A-14
Liens   A-14
Material Contracts   A-18
Materials of Environmental Concern   A-17
Maximum Cash Election Number   A-4
MBCA   A-1
Merger   A-1
Merger Consideration   A-2
Merger Sub   A-1
New Certificates   A-7
Notice of Superior Proposal   A-27
NYSE   A-2
Option   A-5
Other Shares Value   A-5
Parent   A-1
Parent Common Stock   A-2
Parent Disclosure Schedule   A-21
Parent Material Adverse Effect   A-21
Parent SEC Financial Statements   A-22
Parent SEC Reports   A-22
person   A-38
Protected Period   A-28
Proxy Statement   A-15
Representatives   A-27
SEC   A-6
SEC Financial Statements   A-11
Securities Act   A-10
Shareholders Meeting   A-25
Standard Terms   A-19
Stock Consideration   A-2
Stock Purchase Plan   A-5
subsidiaries   A-38
subsidiary   A-38
Surviving Corporation   A-1
Tax Return   A-15
Taxes   A-15
Termination Date   A-34
under common control with   A-38

v



AGREEMENT AND PLAN OF MERGER

        AGREEMENT AND PLAN OF MERGER, dated as of November 3, 2002 (this "Agreement"), among General Electric Company, a New York corporation ("Parent"), Oasis Acquisition, Inc., a Minnesota corporation and a direct wholly-owned subsidiary of Parent ("Merger Sub"), and Osmonics, Inc., a Minnesota corporation (the "Company").

        WHEREAS, the Board of Directors of the Company has (i) determined that it is in the best interests of the Company and the shareholders of the Company and declared it advisable to enter into this Agreement with Parent and Merger Sub providing for the merger (the "Merger") of the Company with and into Merger Sub in accordance with the Minnesota Business Corporation Act (the "MBCA"), upon the terms and subject to the conditions set forth herein, and (ii) resolved to recommend approval of this Agreement and the Merger by the shareholders of the Company;

        WHEREAS, the Board of Directors of the Company, Parent and Merger Sub have each approved this Agreement pursuant to which the Company will merge with and into Merger Sub in accordance with the MBCA upon the terms and subject to the conditions set forth herein; and

        WHEREAS, for Federal income tax purposes, it is intended that the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").

        NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Merger Sub and the Company hereby agree as follows:

ARTICLE I

THE MERGER

        SECTION 1.1    The Merger.    Upon the terms and subject to the conditions of this Agreement and in accordance with the MBCA, at the Effective Time, the Company shall be merged with and into Merger Sub. As a result of the Merger, the separate corporate existence of the Company shall cease and Merger Sub shall continue as the surviving corporation of the Merger (the "Surviving Corporation").

        SECTION 1.2    Closing; Effective Time.    Subject to the provisions of Article VII, the closing of the Merger (the "Closing") shall take place at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York, as soon as practicable, but in no event later than the second business day after the satisfaction or waiver of the conditions set forth in Article VII (excluding conditions that, by their terms, cannot be satisfied until the Closing), or at such other place or at such other date as Parent and the Company may mutually agree. The date on which the Closing actually occurs is hereinafter referred to as the "Closing Date". At the Closing, the parties hereto shall cause the Merger to be consummated by filing articles of merger (the "Articles of Merger") with the Secretary of State of the State of Minnesota, in such form as required by, and executed in accordance with, the relevant provisions of the MBCA (the date and time of the filing of the Articles of Merger with the Secretary of State of the State of Minnesota, or such later time as is specified in the Articles of Merger and as is agreed to by the parties hereto, being the "Effective Time") and shall make all other filings or recordings required under the MBCA in connection with the Merger.

        SECTION 1.3    Effects of the Merger.    The Merger shall have the effects set forth in the applicable provisions of the MBCA. Without limiting the generality of the foregoing and subject thereto, at the Effective Time, all the property, rights, privileges, immunities, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

A-1



        SECTION 1.4    Articles of Incorporation; By-Laws.    (a) At the Effective Time and without any further action on the part of the Company and Merger Sub, the articles of incorporation of Merger Sub as in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation until thereafter amended as provided therein and under the MBCA.

        SECTION 1.5    Directors and Officers.    The directors of the Company immediately prior to the Effective Time shall submit their resignations to be effective as of the Effective Time. The directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the articles of incorporation and by-laws of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case until the earlier of their resignation or removal or their respective successors are duly elected or appointed (as the case may be) and qualified.

        SECTION 1.6    Tax Consequences.    It is intended that the Merger shall constitute a reorganization within the meaning of Section 368(a) of the Code and that this Agreement will constitute a "plan of reorganization" for the purposes of Section 368 of the Code.

ARTICLE II

EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS

        SECTION 2.1    Conversion of Securities.    At the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, the Company or the holders of any of the following securities:

A-2


        SECTION 2.2    Cash Elections.    (a) Each person who, on or prior to the Election Date (as defined below), is a record holder of shares of Company Common Stock shall be entitled, with respect to all or any portion of such person's shares, other than Dissenting Shares, to make an unconditional election (a "Cash Election") on or prior to the Election Date to receive the Cash Consideration, on the basis hereinafter set forth.

A-3


        SECTION 2.3    Proration.    (a) As promptly as practicable following the Election Date, the Exchange Agent shall calculate the allocation among holders of Company Common Stock of rights to receive Parent Common Stock and cash in accordance with the Forms of Election received and this Section 2.3.

A-4


        SECTION 2.4    Treatment of Options and other Share-based Company Plans.    (a) At the Effective Time, each outstanding option to purchase shares of Company Common Stock held by any Company Employee (as defined in Section 3.10(a)) (an "Option") which is outstanding and unexercised (whether or not exercisable) immediately prior thereto shall (i) cease to represent a right to acquire shares of Company Common Stock and (ii) be converted automatically into an option to purchase shares of Parent Common Stock, on the same terms and conditions (to the extent practicable with respect to non-substantive administrative procedures) as were available under the Option (but taking into account any changes thereto, including the acceleration or the exercisability thereof, provided for in the Company Stock Plans (as defined in Section 3.3) or in such Option by reason of this Agreement or the transaction contemplated hereby), (x) equal to such number of shares of Parent Common Stock determined by multiplying the number of shares of Company Common Stock subject to the Option by the Exchange Ratio (rounded, if necessary, to the nearest whole share of Parent Common Stock or, for any incentive stock option under Section 422 of the Code, rounded if necessary down to the nearest whole share of Parent Common Stock) and (y) having a per share exercise price equal to the per share exercise price specified in the Option divided by the Exchange Ratio (rounded, if necessary, to the nearest one-hundredth of a cent); provided, however, that in the case of any Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the exercise price, the number of shares subject to such Option and the terms and conditions of exercise of such Option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code.

A-5


        SECTION 2.5    Dissenting Shares.    (a) Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and which are held by holders of shares of Company Common Stock who have not voted in favor of or consented to the Merger and who have properly demanded and perfected their rights to dissent from the Merger and to be paid the fair value of such shares in accordance with Sections 302A.471 and 302A.473 of the MBCA (the "Dissenting Shares") shall not be converted into the right to receive the Merger Consideration, and the holders thereof shall be entitled to only such rights as are granted by the MBCA; provided, however, that if any such shareholder of the Company shall fail to perfect or shall effectively withdraw or lose such shareholder's right to dissent under the MBCA, such shareholder's shares of Company Common Stock shall thereupon be deemed to have been converted, at the Effective Time, into the right to receive the Merger Consideration, as set forth in Section 2.1 of this Agreement, without any interest thereon (and, if no election is timely made by such holder pursuant to Section 2.2, into the Stock Consideration).

        SECTION 2.6    Surrender of Shares.    (a) Prior to or as of the Effective Time, Parent shall deposit with the Exchange Agent, for the benefit of the shareholders of the Company, (i) cash in an amount sufficient to pay the aggregate Cash Consideration and any payments of cash in lieu of fractional shares pursuant to Section 2.6(e) and (ii) sufficient shares of Parent Common Stock to make all exchanges pursuant to Section 2.6(b). Any cash so deposited shall be invested by the Exchange Agent as directed by Merger Sub or, after the Effective Time, the Surviving Corporation; provided that such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker's acceptances of commercial banks with capital exceeding $500 million. Any net profit resulting from, or interest or income produced by, such investments will be payable to Parent.

A-6


A-7


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company hereby represents and warrants to Parent and Merger Sub that, except as set forth on the company disclosure schedule delivered by the Company to the Parent and Merger Sub prior to the execution of this Agreement (the "Company Disclosure Schedule"):

        SECTION 3.1    Organization and Qualification; Subsidiaries.    (a) The Company and each of its subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where any such failures to be so organized, existing or in good standing or to have such power or authority would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (as defined below). The Company and each of its subsidiaries is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of its properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for any such failures to be so qualified or licensed or in good standing which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. "Company Material Adverse Effect" means any change, event, occurrence or effect that would be materially adverse to the business, financial condition or results of operations of the Company and its subsidiaries taken as a whole, other than any change or effect resulting from (i) changes in general economic conditions, (ii) the announcement and performance of this Agreement and the transactions contemplated hereby and compliance with the covenants set forth herein or (iii) general changes or developments in the industries in which the Company and its subsidiaries operate that do not have a materially disproportionate effect (relative to other industry participants) on the Company and its subsidiaries, taken as a whole.

A-8



        SECTION 3.2    Articles of Incorporation and By-laws.    The Company has heretofore furnished or otherwise provided to Parent a complete and correct copy of its articles of incorporation and the First Amended and Restated By-Laws (the "By-Laws") of the Company as currently in effect and the certificates of incorporation, bylaws or all such equivalent documents for each of the Company's subsidiaries (the "Subsidiary Governing Documents"). The articles of incorporation of the Company and the By-Laws are in full force and effect and no other organizational documents are applicable to or binding upon the Company. The Company is not in violation of any provisions of its articles of incorporation or By-Laws and none of the Company's subsidiaries is in violation of any of the Subsidiary Governing Documents.

        SECTION 3.3    Capitalization.    The authorized capital stock of the Company consists of (i) 50,000,000 shares of Company Common Stock and (ii) 500,000 shares of preferred stock, par value $1.00 per share (the "Company Preferred Stock"). As of September 30, 2002, (i) 14,648,744 shares of Company Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and were issued free of preemptive rights, (ii) 1,251,794 shares of Company Common Stock were reserved for issuance and issuable upon or otherwise deliverable in connection with the grant of equity-based awards or the exercise of outstanding Options issued pursuant to the Company 1993 Stock Option and Compensation Plan (as amended) and the Company 1995 Director Stock Option Plan (as amended) and the Company 1995 Employee Stock Purchase Plan (as amended) (collectively, the "Company Stock Plans") and (iii) no shares of Company Preferred Stock were outstanding. Except as set forth in Section 3.3 of the Company Disclosure Schedule, since September 30, 2002, no options to purchase shares of Company Common Stock or Company Preferred Stock have been granted and no shares of Common Stock or Preferred Stock have been issued, except (i) for shares of Company Common Stock issued pursuant to (A) the exercise of Options, (B) the Company 1995 Employee Stock Purchase Plan (as amended) (in accordance with the Company's past practice with respect to such plan) and (C) the Company 1995 Director Stock Option Plan (as amended) (with respect to "restricted stock", as defined in such plan), or (ii) as otherwise provided for or permitted herein. Except as set forth above or in Section 3.3 of the Company Disclosure Schedule, (A) there are not outstanding or authorized any (I) shares of capital stock or other voting securities of the Company, (II) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or (III) options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company (collectively, "Company Securities"), (B) there are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any Company Securities and (C) there are no other options, calls, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any of its subsidiaries to which the Company or any of its subsidiaries is a party. Except with respect to subsidiaries of the Company that do not conduct operations or engage in any business as of the date hereof, each of the outstanding shares of capital stock of each of the Company's subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and all such shares are owned by the Company or another wholly-owned subsidiary of the Company and are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations in voting rights, charges or other encumbrances of any nature whatsoever.

A-9


        SECTION 3.4    Authority Relative to This Agreement.    The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions so contemplated (other than approval of the Merger and this Agreement by the holders of a majority of the outstanding shares of Company Common Stock (the "Company Requisite Vote"), and the filing with the Secretary of State of the State of Minnesota of the Articles of Merger as required by the MBCA). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery hereof by Parent and Merger Sub, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and any implied covenant of good faith and fair dealing and subject further to the approval of the Merger and this Agreement by the Company Requisite Vote. The only vote of the shareholders of the Company required to approve this Agreement and the Merger is the Company Requisite Vote. The Board of Directors of the Company has approved and taken all corporate action required to be taken by the Board of Directors for the consummation by the Company of the Merger. As of the date hereof, the Company's Board of Directors has adopted resolutions (i) approving and declaring advisable this Agreement, determining that the Merger is advisable and that the terms of the Merger are fair to, and in the best interests of, the Company's shareholders, and (ii) recommending that the shareholders of the Company adopt this Agreement and the Merger.

        SECTION 3.5    No Conflict; Required Filings and Consents.    (a) Except as set forth in Section 3.5 of the Company Disclosure Schedule, the execution, delivery and performance of this Agreement by the Company do not and will not (i) conflict with or violate the articles of incorporation or By-Laws of the Company or any of the Subsidiary Governing Documents, (ii) assuming that all consents, approvals and authorizations contemplated by clauses (i), (ii), (iii), (iv) and (v) of subsection (b) below have been obtained and all filings described in such clauses have been made, conflict with or violate any law, rule, regulation, order, judgment or decree applicable to the Company or any of its subsidiaries or by which its or any of their respective properties are bound or (iii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) or result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or its or any of their respective properties are bound, except, in the case of clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults, losses, rights or other occurrences which would not have, individually or in the aggregate, a Company Material Adverse Effect.

A-10


        SECTION 3.6    Compliance.    (a) Except as set forth in Section 3.6 of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries is in violation of any law, rule, regulation, order, judgment or decree applicable to the Company or any of its subsidiaries or by which its or any of their respective properties are bound, except for any such violations which would not have, individually or in the aggregate, a Company Material Adverse Effect, and (b) the Company and its subsidiaries have all permits, licenses, authorizations, exemptions, orders, consents, approvals and franchises from governmental and regulatory agencies required to conduct their respective businesses as now being conducted, except for any such permits, licenses, authorizations, exemptions, orders, consents, approvals or franchises the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

        SECTION 3.7    SEC Filings; Financial Statements.    (a) Except as set forth in Section 3.7 of the Company Disclosure Schedule, the Company has filed or otherwise transmitted all forms, reports, statements, certifications and other documents required to be filed with the SEC since December 31, 2000 (collectively, the "Company SEC Reports"), each of which, as finally amended, has complied as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations promulgated thereunder, or the Exchange Act and the rules and regulations promulgated thereunder, each as in effect on the date so filed. None of the Company SEC Reports (including the financial statements contained therein), when filed (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. There are no outstanding comments from the SEC with respect to any of the Company SEC Reports. None of the Company's subsidiaries is required to file periodic reports with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

A-11


        SECTION 3.8    Absence of Certain Changes or Events.    Except as set forth in Section 3.8 of the Company Disclosure Schedule and except as disclosed in the Company SEC Reports filed prior to the date of this Agreement, since December 31, 2001, except as contemplated by this Agreement, the Company and its subsidiaries have conducted their business in the ordinary course, consistent with past practice and, since such date, (1) there has not been any change, event or occurrence which has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (2) prior to the date of this Agreement, there has not occurred: (a) any change by the Company in its accounting principles, (b) any revaluation of any of the Company's or any of its subsidiaries' assets, including, without limitation, writing off notes or accounts receivable other than in the ordinary course of business and consistent with past practice, (c) any sale, pledge, disposition of or encumbrance upon a material amount of property of the Company or of any of its subsidiaries, except in the ordinary course of business and consistent with past practice, (d) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any class of capital stock, (e) any split, combination or reclassification of any of its capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (f) any damage, destruction or loss of any material asset not covered by insurance and which materially affects the use or value thereof.

        SECTION 3.9    Absence of Litigation.    Except as set forth in Section 3.9 of the Company Disclosure Schedule, there are no material suits, claims, actions, proceedings or investigations pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries nor any of their respective properties is or are subject to any material order, writ, judgment, injunction, decree or award. There are no SEC inquiries or investigations, other governmental inquiries or investigations or internal investigations pending or, to the knowledge of the Company with respect to SEC or other governmental inquiries or investigations, threatened, in each case regarding any accounting practices of the Company or any of its subsidiaries or any malfeasance by any executive officer of the Company or any of its subsidiaries.

        SECTION 3.10    Employee Benefit Plans.    (a) Section 3.10(a) of the Company Disclosure Schedule contains a true and complete list of each material "employee benefit plan" (within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and each other vacation or sick pay policy, fringe benefit plan, and compensation, benefit, severance or employment agreement, plan, program or arrangement contributed to, sponsored or maintained by the Company or any of its subsidiaries as of the date hereof or under which the Company or any of its subsidiaries has any liability (other than any such plan, program or arrangement legally mandated under the laws of any jurisdiction outside the United States) for the benefit of any current or former directors, officers, employees, contractors, or consultants of the Company and its subsidiaries (such current and former directors, officers, employees, contractors, and consultants collectively, "Company Employees" and such plans, programs, agreements and arrangements, collectively, "Company Plans").

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        SECTION 3.11    Tax Matters.    Except as set forth in Section 3.11 of the Company Disclosure Schedule: (a) The Company and each of its subsidiaries has timely filed all material Tax Returns (as defined below) required to be filed by it in the manner provided by law and has paid all Taxes (as defined below) shown thereon to be due. All such material Tax Returns are correct and complete in all material respects. The Company has provided adequate reserves in the most recent Company SEC Reports for any material Taxes that have not been paid, whether or not shown as being due on any Tax Returns.

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For purposes of this Agreement, "Taxes" shall mean any taxes of any kind, including but not limited to those on or measured by or referred to as income, gross receipts, capital, sales and/or use (including sales and/or use Taxes which are the obligation of another party but which are required to be collected by the Company and remitted to a Tax authority), ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. For purposes of this Agreement, "Tax Return" shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes, including any schedule or attachment thereto or amendment thereof.

        SECTION 3.12    Form S-4; Proxy Statement.    None of the information supplied or to be supplied by the Company for inclusion or incorporation by reference in (i) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented and at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading and (ii) the proxy statement to be sent to the shareholders of the Company in connection with the Shareholders Meeting (such proxy statement, as amended or supplemented, the "Proxy Statement") will, at the date it is first mailed to the shareholders of the Company and at the time of the Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Proxy Statement will, at the time of the Shareholders Meeting, comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by Parent or Merger Sub or any of their respective representatives which is contained or incorporated by reference in the Form S-4 or the Proxy Statement.

        SECTION 3.13    Opinion of Financial Advisor.    Goldman, Sachs & Co. (the "Financial Advisor") has delivered to the Board of Directors of the Company its written opinion (or oral opinion to be confirmed in writing), dated as of the date hereof, that, as of such date, the Stock Consideration and the Cash Consideration, taken in the aggregate, is fair to the holders of Company Common Stock from a financial point of view.

        SECTION 3.14    Brokers.    No broker, finder or investment banker (other than the Financial Advisor) is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of the Company. The Company has delivered to Parent a current executed copy of the engagement letter with the Financial Advisor, which engagement letter describes all such fees payable to the Financial Advisor.

        SECTION 3.15    Takeover Statutes; Rights Plans.    Assuming the accuracy of the representations and warranties of Parent and Merger Sub set forth in Section 4.9, no "fair price", "moratorium", "control share acquisition" or other similar anti-takeover statute or regulation enacted under state or federal laws in the United States applicable to the Company is applicable to the Merger. As of the date of this Agreement, the Company does not have any shareholder rights plan in effect. The Company has taken any action required to be taken by it in order to exempt this Agreement and the Merger from

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the requirements of the Company's articles of incorporation or Bylaws including, without limitation, Article 9 of the Company's articles of incorporation.

        SECTION 3.16    Intellectual Property.    (a) As used herein, the term "Intellectual Property" shall mean all patents, patent applications, statutory invention registrations, inventions and other industrial property rights; trademarks, service marks, trade names, trade dress, logos, and other source identified, including registrations and applications for the registration thereof; copyrights (including without limitation, computer software programs); Internet domain name registrations; Internet web sites, web content, and registrations and applications for registrations thereof; confidential and proprietary information, including know-how and trade secret rights, technologies, techniques and processes; computer software, programs and databases in any form, all versions, updates, corrections, enhancements, replacements, and modifications thereof, and all documentation related thereto; and rights of privacy, publicity and endorsement, in each case under the laws of any jurisdiction in the world, and including rights under and with respect to all applications, registrations, continuations, divisions, renewals, extensions and reissues of the foregoing. As used herein, "Company Intellectual Property" shall mean the Intellectual Property currently used in connection with the business of the Company or any of its subsidiaries or owned or held for use by the Company or any of its subsidiaries.

        SECTION 3.17    Environmental Matters.    (a) Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and except as set forth in the environmental assessments listed in Section 3.17 of the Company Disclosure Schedule: (i) the Company and each of its subsidiaries are and have been in compliance with all applicable Environmental Laws (as defined below), and possess and are and have been in compliance with all applicable Environmental

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Permits (as defined below) required under such laws to operate as it presently operates; (ii) to the knowledge of the Company, there are no Materials of Environmental Concern (as defined below) at any property owned or operated by the Company or any of its subsidiaries, under circumstances that are reasonably likely to result in liability of the Company or any of its subsidiaries under any applicable Environmental Law; (iii) neither the Company nor any of its subsidiaries has received any notification alleging that it is liable for, or request for information pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act or similar state statute, concerning any release or threatened release of Materials of Environmental Concern at any location except, with respect to any such notification or request for information concerning any such release or threatened release, to the extent such matter has been resolved with the appropriate foreign, Federal, state or local regulatory authority or otherwise; (iv) neither the Company nor any of its subsidiaries has used, stored or Released (as hereinafter defined) any Materials of Environmental Concern and, to the knowledge of the Company, there are no other present or past actions or activities, circumstances, conditions, events or incidents that are or could reasonably be expected to form the basis of any claim under applicable Environmental Laws against the Company or its subsidiaries, predecessors, affiliates or agents; (v) no Lien has been placed or to the knowledge of the Company, threatened to be placed upon any real property owned or leased by the Company or any of its subsidiaries or any real property previously owned by the Company or any of its subsidiaries under any applicable Environmental Law; (vi) there is no written report of any environmental, health or safety investigation, study, audit, test, review or other analysis conducted in relation to any current operations or properties of the Company or any of its subsidiaries or any other operations or properties or facilities now or previously owned or leased by Company or its subsidiaries, in the possession of or under the control of the Company, which has not been made available to Parent and which identifies a violation of Environmental Law or a Release of Materials of Environmental Concern for which the Company or any of its subsidiaries is liable; (vii) neither the Company nor any of its subsidiaries has entered into or agreed to, nor is it negotiating, any consent decree or order under any Environmental Law in respect of its business or any property owned or leased by it, and it is not subject to any court order relating to compliance with, or addressing the presence of Materials of Environmental Concern, under any Environmental Laws in respect of its business or properties; (viii) no action, claim or proceeding for any violation or liability by the Company or any of its subsidiaries under any Environmental Laws or Environmental Permits has been commenced or to the knowledge of the Company, is threatened by any governmental entity against the Company or any of its subsidiaries; and (ix) the Company has no knowledge of any proposed or draft Environmental Law that, as proposed or drafted, would be applicable to the Company or any of its subsidiaries.

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        SECTION 3.18    Reorganization Qualification.    Neither the Company nor, to its knowledge, any of its affiliates, has taken or agreed to take any action, or knows of any circumstances, that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

        SECTION 3.19    Properties.    Except as disclosed in the Company SEC Reports and as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each of the Company and its subsidiaries (i) has good and valid title to all of its properties (real, personal or intangible) and assets which are reflected on the latest balance sheet included in such Company SEC Reports as being owned by the Company or one of its subsidiaries or acquired after the date thereof (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of (A) all Liens except (1) statutory liens securing payments not yet due and (2) such imperfections or irregularities of title or other Liens (other than real property mortgages or deeds of trust) as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, and (B) all real property mortgages and deeds of trust except secured indebtedness that is properly reflected in the latest Company SEC Reports, and (ii) is the lessee or sublessee of all leasehold estates reflected in the latest audited financial statements included in the Company SEC Reports or acquired after the date thereof and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to the Company's knowledge, the lessor.

        SECTION 3.20    Contracts.    (a) Section 3.20(a) of the Company Disclosure Schedule sets forth a list of (i) each written customer or supply contract or agreement of the Company or any subsidiary of the Company currently in effect that involves consideration in fiscal year 2001 in excess of $1 million or that is reasonably likely to involve consideration in fiscal year 2002 in excess of $1 million and (ii) each written contract or agreement (other than customer or supply contracts or agreements) of the Company or any subsidiary of the Company currently in effect that involves consideration (whether or not measured in cash) of greater than $1 million (such contracts, the "Material Contracts"). All the Material Contracts are valid and in full force and effect, except to the extent they have previously expired or terminated in accordance with their terms or they expire or terminate in compliance with the provisions of Section 5.1 and except for any invalidity or failure to be in full force and effect which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as disclosed in the Company SEC Reports filed prior to the date of this Agreement, none of the Company or any of its subsidiaries is in violation of or default (with or without notice or lapse of time or both) under, or has waived or failed to enforce any rights or benefits under, any Material Contract, except for violations, defaults, waivers or failures to enforce rights or benefits that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

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        SECTION 3.21    Insurance.    All material insurance policies of the Company and its subsidiaries including, without limitation, that certain Fiduciary Liability insurance policy dated October 15, 2001 issued by Chubb to the Company (the "Insurance Policies") are in full force and effect and provide insurance in such amounts and against such risks as the management of the Company reasonably has determined to be prudent in accordance with industry practices or as is required by law. Neither the Company nor any of its subsidiaries is in material breach or default, and neither the Company nor any of its subsidiaries has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification of any of the Insurance Policies. No notice of cancellation or termination has been received by the Company with respect to any such Insurance Policy.

        SECTION 3.22    Employee And Labor Relations.    (a) Except as set forth in Section 3.22(a) of the Company Disclosure Schedule, no labor organization or group of employees has been recognized or certified as representatives to the Company or any of its subsidiaries for any current or former employees of the Company or any such subsidiary. No labor organization or group of employees of the Company or any of its subsidiaries has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened in writing to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority of which the Company has actual knowledge. There are no strikes, work stoppages, slowdowns, lockouts, arbitrations, grievances, or other labor disputes pending or threatened in writing against or involving the Company or any of its subsidiaries of which the Company has actual knowledge. There has been no "mass layoff" or "plant closing" as defined by the Worker Adjustment Retraining Notification Act or any similar state or local "plant closing" laws with respect to the Company or any of its subsidiaries within the six months prior to the date hereof.

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        SECTION 3.23    Related Party Transactions.    Except as set forth in the Company SEC Reports or for events as to which the amounts involved do not exceed $60,000, since the Company's proxy statement dated April 15, 2002, no event has occurred that would be required to be reported as a "Certain Relationship or Related Transaction" pursuant to Item 404 of Regulation S-K promulgated by the SEC.

        SECTION 3.24    Industrial Development Bonds.    Desalination Systems, Inc., a California corporation and wholly owned subsidiary of the Company and the obligor under the loan agreement with respect to those certain Variable Rate Demand Industrial Development Revenue Bonds (Desalination Systems, Inc. Project) in the aggregate principal amount of $8,550,000 (the "Bonds") issued pursuant to that certain Trust Indenture dated as of June 1, 1995 between Industrial Development Authority of the City of Vista and State Street Bank and Trust Company of California, N.A. (the "IDB Indenture"), has elected to have such bonds bear interest at the Weekly Rate or the Flexible Rate (as such terms are defined in the IDB Indenture) and, except as set forth in Section 3.24 of the Company Disclosure Schedule, has taken all action necessary such that such Bonds can be redeemed on any business day pursuant to Section 3.01(a) of the IDB Indenture.

        SECTION 3.25    Product Liability; Warranties.    (a) There are no claims asserted or, to the Company's knowledge, threatened against the Company or any of its subsidiaries related to the safety of the products of the Company or any of its subsidiaries that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB

        Parent and Merger Sub hereby, jointly and severally, represent and warrant to the Company that, except as set forth on the disclosure schedule delivered by Parent and Merger Sub to the Company prior to the execution of this Agreement (the "Parent Disclosure Schedule"):

        SECTION 4.1    Organization and Qualification; Subsidiaries.    Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power or authority would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect (as defined below). Parent owns beneficially and of record all of the outstanding capital stock of Merger Sub. A "Parent Material Adverse Effect" means any change, event, occurrence or effect that would be materially adverse to the business, financial condition or results of operations of Parent and its subsidiaries taken as a whole, other than any change or effect resulting from (i) changes in general economic conditions, (ii) the announcement and performance of this Agreement and the transactions contemplated hereby and compliance with the covenants set forth herein or (iii) general changes or developments in the industries in which Parent and its subsidiaries operate that do not have a materially disproportionate effect (relative to other industry participants) on Parent and its subsidiaries, taken as a whole.

        SECTION 4.2    Capitalization.    (a) All of the shares of Parent Common Stock issuable as consideration in the Merger at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights.

        SECTION 4.3    Authority Relative to This Agreement.    Each of Parent and Merger Sub has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by each of Parent and Merger Sub and the consummation by each of Parent and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action (including by the Boards of Directors of Parent and Merger Sub and, prior to the Effective Time, by Parent as the sole shareholder of Merger Sub) and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize this Agreement or to consummate the transactions so contemplated (other than the filing with the Secretary of State of the State of Minnesota of the Articles of Merger as required by the MBCA). This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of each such corporation enforceable against such corporation in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and any implied covenant of good faith and fair dealing.

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        SECTION 4.4    No Conflict; Required Filings and Consents.    (a) The execution, delivery and performance of this Agreement by Parent and Merger Sub do not and will not (i) conflict with or violate the respective certificates of incorporation or articles of incorporation or by-laws of Parent or Merger Sub, (ii) assuming that all consents, approvals and authorizations contemplated by clauses (i), (ii), (iii), (iv) and (v) of subsection (b) below have been obtained and all filings described in such clauses have been made, conflict with or violate any law, rule, regulation, order, judgment or decree applicable to Parent or Merger Sub or by which either of them or their respective properties are bound or (iii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) or result in the loss of a material benefit under, or give rise to any right of termination, cancellation, material amendment or material acceleration of, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit or other instrument or obligation to which Parent or Merger Sub is a party or by which Parent or Merger Sub or any of their respective properties are bound, except, in the case of clauses (ii) and (iii), for any such conflict, violation, breach, default, loss, right or other occurrence which would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

        SECTION 4.5    SEC Filings; Financial Statements.    (a) Parent has filed all forms, reports, statements, certifications and other documents required to be filed with the SEC since December 31, 2000 (collectively, the "Parent SEC Reports"), each of which, as finally amended, has complied as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations promulgated thereunder, or the Exchange Act and the rules and regulations promulgated thereunder, each as in effect on the date so filed. None of the Parent SEC Reports contained, when filed, as finally amended, any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. There are no outstanding comments from the SEC with respect to any of the Parent SEC Reports.

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        SECTION 4.6    Absence of Certain Changes or Events.    Except as contemplated by this Agreement and except as disclosed in the Parent SEC Reports filed prior to the date of this Agreement, since December 31, 2001, there has not been any change, event or occurrence which has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

        SECTION 4.7    Form S-4; Proxy Statement.    None of the information supplied or to be supplied by Parent or Merger Sub for inclusion or incorporation by reference in (i) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented and at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading and (ii) the Proxy Statement will, at the date it is first mailed to the shareholders of the Company and at the time of the Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Form S-4 will, as of its effective date, and the prospectus contained therein will, as of its date, comply as to form in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing, Parent and Merger Sub make no representation or warranty with respect to any information supplied by the Company or any of its representatives which is contained or incorporated by reference in the Form S-4 or the Proxy Statement.

        SECTION 4.8    Brokers.    No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of Parent or Merger Sub.

        SECTION 4.9    Ownership of Shares.    As of the date of this Agreement, Parent, Merger Sub and their respective affiliates do not own (directly or indirectly, beneficially or of record) any shares of Company Common Stock and none of Parent, Merger Sub or their respective affiliates hold any rights to acquire any shares of Company Common Stock except pursuant to this Agreement.

        SECTION 4.10    Vote/Approval Required.    No vote or consent of the holders of any class or series of capital stock of Parent is necessary to approve this Agreement or the Merger or the transactions contemplated hereby. The vote or consent of Parent as the sole shareholder of Merger Sub (which shall have occurred prior to the Effective Time) is the only vote or consent of the holders of any class or series of capital stock of Merger Sub necessary to approve this Agreement or the Merger or the transactions contemplated hereby.

        SECTION 4.11    Reorganization Qualification.    Neither Parent nor Merger Sub, nor to Parent's knowledge, any other affiliate of Parent, has taken or agreed to take any action, or knows of any circumstances, that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

ARTICLE V

CONDUCT OF BUSINESS PENDING THE MERGER

        SECTION 5.1    Conduct of Business of the Company Pending the Merger.    The Company covenants and agrees that, during the period from the date hereof until the Effective Time, except as

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contemplated by this Agreement or as required by law, or unless Parent shall otherwise agree in writing, the business of the Company and its subsidiaries shall be conducted in its ordinary course of business consistent with past practice and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and to preserve its present relationships with customers, suppliers and other persons with which it has significant business relations. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or as required by law, neither the Company nor any of its subsidiaries shall without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):

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        SECTION 5.2    No Control of Other Party's Business.    Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company's or its subsidiaries' operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its subsidiaries' operations.

ARTICLE VI

ADDITIONAL AGREEMENTS

        SECTION 6.1    Shareholders Meeting.    (a) As soon as reasonably practicable following the date of this Agreement, the Company, acting through its Board of Directors or a duly authorized committee thereof, shall (i) duly call, give notice of, convene and hold a meeting of its shareholders for the purpose of approving the Merger and this Agreement (the "Shareholders Meeting") and (ii) subject to Section 6.5, (A) include in the Proxy Statement the recommendation of the Board of Directors that the shareholders of the Company vote in favor of the approval of the Merger and this Agreement and, subject to the approval of the Financial Advisor, the written opinion of the Financial Advisor, dated as of the date hereof that, as of such date, the Stock Consideration and the Cash Consideration, taken in the aggregate, is fair to the holders of Company Common Stock from a financial point of view and (B) use its reasonable best efforts to obtain the necessary approval of the Merger and this Agreement by the shareholders of the Company.

        SECTION 6.2    Form S-4 and Proxy Statement.    As soon as reasonably practicable following the date of this Agreement, the Company shall, with the assistance and approval (not to be unreasonably withheld or delayed) of Parent, prepare the Proxy Statement and Parent, with the assistance and approval (not to be unreasonably withheld or delayed) of the Company, shall prepare and file with the SEC the Form S-4, in which the Proxy Statement shall be included as a prospectus. Parent, Merger Sub and the Company will cooperate with each other in the preparation of the Form S-4 and the Proxy Statement. Without limiting the generality of the foregoing, each of Parent and Merger Sub and the Company will furnish to each other the information relating to it required by the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder to be set forth in the Form S-4 and the Proxy Statement. Each of Parent and the Company shall use its reasonable best efforts to have the Form S-4 declared effective under the Securities Act as soon as reasonably practicable after it is filed with the SEC. The Company shall use its reasonable best efforts to cause the Proxy Statement to be mailed to the shareholders of the Company as soon as reasonably practicable after the Form S-4 is declared effective under the Securities Act. Parent shall also take any action required to be taken under any applicable state securities laws in connection with the issuance of Parent Common Stock in

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connection with the Merger, and the Company shall furnish all information concerning the Company as may be reasonably required in connection with any such action. Each of Parent, Merger Sub and the Company agree to correct any information provided by it for use in the Form S-4 or the Proxy Statement which shall have become false or misleading. Parent shall as soon as reasonably practicable notify the Company of the effectiveness of the Form S-4, and each of Parent, Merger Sub and the Company shall as soon as reasonably practicable notify the other of the receipt of any comments from the SEC with respect to the Form S-4 or the Proxy Statement and any request by the SEC for any amendment to the Form S-4 or the Proxy Statement or for additional information.

        SECTION 6.3    Resignation of Directors.    At the Closing, the Company shall deliver to Parent evidence reasonably satisfactory to Parent of the resignation of all directors of the Company, effective at the Effective Time.

        SECTION 6.4    Access to Information; Confidentiality.    (a) Subject to the limitations set forth herein, from the date hereof to the Effective Time or the earlier termination of this Agreement, upon reasonable prior written notice, the Company shall, and shall use its reasonable best efforts to cause its subsidiaries, officers, directors and employees to, afford the officers, employees, auditors, consultants and other authorized representatives of Parent reasonable access, consistent with applicable law, at all reasonable times to its officers, employees, properties, offices, plants and other facilities (including, without limitation, until November 25, 2002, such access necessary for Parent and its representatives to conduct Phase II or other environmental testing or samplings at the sites and in the manner specified in the Environmental Access Agreement, dated the date hereof, among Parent, Merger Sub and the Company (the "Environmental Tests")) and to all books and records, and shall furnish Parent with all financial, operating and other data and information as Parent through its officers, employees or authorized representatives, may from time to time reasonably request in writing. Notwithstanding the foregoing, any such investigation or consultation shall be conducted in such a manner as not to interfere unreasonably with the business or operations of the Company or its subsidiaries. If Parent believes that any condition to closing of Parent and Merger Sub contained in Article VII hereof would fail to be satisfied due primarily to the results of the Environmental Tests, then Parent shall notify the Company in writing as to such fact no later than December 2, 2002. If Parent so notifies the Company that it believes that any such condition to closing would fail to be satisfied due primarily to the Environmental Tests, Parent shall provide such information with respect to such purported failure as the Company reasonably requests. If Parent does not so notify the Company that it believes that any such condition to closing would fail to be satisfied due primarily to the Environmental Tests, then Parent and Merger Sub shall be deemed to have irrevocably waived any right to assert a failure of any of the conditions in Article VII to be satisfied due primarily to the Environmental Tests. Not later than December 2, 2002, Parent shall notify the Company in writing of the estimate of the remediation costs and related expenses determined as a result of the Environmental Tests and promptly following any request, such supporting documentation with respect thereto as the Company shall reasonably request.

        SECTION 6.5    Acquisition Proposals.    (a) The Company agrees that (i) it and its employees, officers and directors shall not, (ii) its subsidiaries and its subsidiaries' employees, officers and directors shall not and (iii) it shall use reasonable best efforts to ensure that its and its subsidiaries' agents, accountants, consultants, financial and other advisors, investment bankers, attorneys, and

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representatives ("Representatives") shall not, (A) directly or indirectly, initiate, solicit or knowingly encourage or facilitate any inquiries or the making of any proposal or offer with respect to a tender offer or exchange offer, proposal for a merger, consolidation or other business combination involving the Company and its subsidiaries or any proposal or offer, in each case, to acquire in any manner 20% or more of the equity in the Company or any of its material subsidiaries or 20% or more of the assets of the Company and its subsidiaries taken as a whole, other than the transactions contemplated by this Agreement (any such proposal or offer being hereinafter referred to as an "Acquisition Proposal") or (B) directly or indirectly, engage in any negotiations or discussions concerning, or provide access to its properties, books and records or any confidential information or data to, any person relating to an Acquisition Proposal or which may reasonably be expected to lead to an Acquisition Proposal. Notwithstanding the foregoing, nothing contained in this Agreement shall prevent the Company or its Board of Directors from (i) prior to the approval of the Merger and this Agreement by the Company's shareholders by the Company Requisite Vote, providing access to its properties, books and records and providing information or data in response to a request therefor by a person who has made an unsolicited bona fide written Acquisition Proposal not resulting from a breach of Section 6.5(a) if the Board of Directors receives from the person so requesting such information an executed confidentiality agreement on terms substantially similar to those contained in the Confidentiality Agreement (except for such changes specifically necessary in order for the Company to be able to comply with its obligations under this Agreement), (ii) prior to the approval of the Merger and this Agreement by the Company's shareholders by the Company Requisite Vote, engaging in any negotiations or discussions with any person who has made an unsolicited bona fide written Acquisition Proposal not resulting from a breach of Section 6.5(a) or (iii)(A) withdrawing, modifying or changing in any adverse manner its approval or recommendation of this Agreement or (B) recommending an unsolicited bona fide written Acquisition Proposal; if and only if in connection with the foregoing clauses, the Board of Directors of the Company shall have determined in good faith, after consultation with its legal counsel and financial advisors that (x) in the case of clause (iii) above only, such Acquisition Proposal constitutes a Superior Proposal and (y) in the case of clauses (i) and (ii) above only, as a result of such actions, such Acquisition Proposal will result in, or could reasonably be expected to constitute or result in, a Superior Proposal. The Company agrees that it will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any persons conducted heretofore with respect to any Acquisition Proposal. The Company shall also (1) promptly (and in any event within 48 hours) notify Parent of the receipt of any Acquisition Proposal after the date hereof, which notice shall include the identity of the person making such Acquisition Proposal and the material terms thereof (including any material modifications or amendment to such terms) and (2) keep Parent reasonably informed of the status and details of any such proposal or inquiry.

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        As used herein, the term "Superior Proposal" shall mean an Acquisition Proposal to acquire all of the equity interest in or all or substantially all of the assets of the Company (on a consolidated basis) and which the Board of Directors of the Company reasonably determines, in good faith after consultation with its financial advisors and legal advisors taking into account all legal, financial, regulatory and other aspects of the proposal, is more favorable to the Company and its shareholders than the Merger and is reasonably capable of being completed (including with respect to the ability of such third party to obtain any external financing). Reference in the foregoing definition to the "Merger" shall include any proposed alteration of the terms of this Agreement committed to in writing by Parent in response to such Acquisition Proposal.

        SECTION 6.6    Employment and Employee Benefits Matters.    (a) For a period of at least one year following the Effective Time (such period of time, the "Protected Period"), Parent shall cause the Surviving Corporation or any of its affiliates to provide to employees of the Company pay (which shall include rates of base salary or wages and annual bonus opportunities), benefits and benefit plans, programs and policies (including, without limitation, severance benefits, medical and welfare plans), which are substantially comparable in the aggregate to those provided by the Company to the employees of the Company on the date hereof. Notwithstanding anything set forth above, the participation of the employees of the Company in any Parent's option or similar equity grant or purchase programs or plans shall be subject to the eligibility requirements of such programs or plans.

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        SECTION 6.7    Directors' and Officers' Indemnification and Insurance.    (a) Without limiting any additional rights that any employee may have under any employment agreement or Company Plan, from the Effective Time through the sixth anniversary of the date on which the Effective Time occurs, Parent shall, or shall cause the Surviving Corporation to, indemnify and hold harmless each present (as of the Effective Time) and former officer or director of the Company and its subsidiaries (the "Indemnified Parties"), against all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses, including, without limitation, attorneys' fees and disbursements (collectively, "Costs"), incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to (i) the fact that the Indemnified Party is or was an officer or director of the Company or any of its subsidiaries and (ii) matters existing or occurring at or prior to the Effective Time (including, without limitation, this Agreement and the transactions and actions contemplated hereby), whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent permitted under applicable law. Each Indemnified Party will be entitled to advancement of expenses incurred in the defense of any claim, action, suit, proceeding or investigation from Parent or the Surviving Corporation within ten business days of receipt by Parent from the Indemnified Party of a request therefor; provided that any person to whom expenses are advanced provides an undertaking, if and only to the extent required by the MBCA, to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

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        SECTION 6.8    Further Action; Reasonable Best Efforts.    (a) Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement as promptly as practicable. In furtherance and not in limitation of the foregoing, each party hereto agrees to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act, to make any additional filings required by any applicable Antitrust Law, and to take all other actions reasonably necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under the approval of the Merger pursuant to the HSR Act or other Antitrust Laws as soon as practicable. Each of Parent and the Company (to the extent directed by Parent) shall as promptly as practicable comply with the Foreign Antitrust Laws.

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        SECTION 6.9    Public Announcements.    Each of the Company, Parent and Merger Sub agrees that no public release or announcement concerning the transactions contemplated hereby shall be issued by any party without the prior written consent of the Company and Parent (which consent shall not be unreasonably withheld or delayed), except as such release or announcement may be required by law or the rules or regulations of any applicable United States securities exchange, in which case the party required to make the release or announcement shall use its reasonable best efforts to allow each other party reasonable time to comment on such release or announcement in advance of such issuance, it being understood that the final form and content of any such release or announcement, to the extent so required, shall be at the final discretion of the disclosing party.

        SECTION 6.10    NYSE Listing.    The parties hereto shall use their reasonable best efforts to have the shares of Parent Common Stock to be issued in the Merger and the shares of Parent Common Stock to be reserved for issuance upon exercise of the Options to be approved for listing on the NYSE, subject to notice of official issuance, prior to the Closing Date. Any fees in connection with the listing payable prior to the Effective Time shall be paid by Parent or Merger Sub.

        SECTION 6.11    Rule 16(b).    Prior to the Effective Time, Parent and the Company shall take all such steps as may be required to cause any dispositions of Company Common Stock (including derivative securities with respect to the Company Common Stock) and acquisitions of Parent Common Stock (including derivative securities with respect to Parent Common Stock) pursuant to the Merger by each individual who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company or Parent, as the case may be, to be exempt under Rule 16b-3 promulgated under the Exchange Act, such steps to be taken in accordance with the No-Action Letter dated January 12, 1999 issued by the SEC regarding such matters.

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        SECTION 6.12    Affiliates.    Prior to the Closing Date, the Company shall deliver to Parent a letter identifying all persons that, to its knowledge, are at the time this Agreement is submitted for adoption by the shareholders of the Company "affiliates" of the Company for purposes of Rule 145 under the Securities Act. The Company shall use its reasonable best efforts to cause each such person to deliver to Parent on or prior to the Closing Date a written agreement substantially in the form attached as Exhibit A hereto.

        SECTION 6.13    Standstill Agreements; Confidentiality Agreements.    During the period from the date of this Agreement through the Effective Time or earlier termination of this Agreement, the Company (i) shall not terminate, amend, modify or waive any provision of any confidentiality or standstill agreement relating to the making of an Acquisition Proposal to which it or any of its subsidiaries is a party (other than the confidentiality agreement referenced in Section 6.4) unless, in response to an unsolicited bona fide written Acquisition Proposal not resulting from a breach of Section 6.5(a), the Board of Directors shall have determined in good faith, after consultation with outside counsel to the Company, that such action is appropriate in order for the Board of Directors to act in a manner consistent with its fiduciary duties under applicable law, and (ii) subject to clause (i), shall use reasonable efforts to enforce, to the fullest extent permitted under applicable law, the provisions of any such agreement, including by obtaining injunctions to prevent any breaches of such agreements and to enforce specifically the terms and provisions thereof in any court having jurisdiction.

        SECTION 6.14    Shareholder Litigation.    Each of the Company and Parent shall give the other the reasonable opportunity to participate in the defense of any shareholder litigation against the Company or Parent, as applicable, and their respective directors relating to the transactions contemplated by this Agreement.

        SECTION 6.15    Termination of Benefits Plan.    The Company shall, or shall cause each of its subsidiaries, to (a) terminate the Company Profit Sharing and Savings Plan effective immediately prior to the Closing Date and make all contributions required for periods through such termination date, (b) cease all further contributions to such plan with respect to pay periods beginning on and after the Closing Date (other than as required to repay loans thereunder) and (c) cease making any additional loans to participants under the Company Profit Sharing and Savings Plan effective as of the termination of such plan. The Company shall provide written resolutions reasonably satisfactory to Parent authorizing the foregoing. A copy of such resolutions shall be delivered to Parent prior to the Closing Date. In connection with the foregoing, Parent shall permit any current employee of the Company to roll over their account balances under the Company Profit Sharing and Savings Plan into a qualified defined contribution plan maintained by Parent (or an affiliate of Parent), at such times and in accordance with such requirements as are applicable to such qualified defined contribution plan.

ARTICLE VII

CONDITIONS OF MERGER

        SECTION 7.1    Conditions to Obligation of Each Party to Effect the Merger.    The respective obligations of each party to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

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        SECTION 7.2    Conditions to Obligations of Parent and Merger Sub.    The obligations of Parent and Merger Sub to effect the Merger shall be further subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions:

        SECTION 7.3    Conditions to Obligations of the Company.    The obligation of the Company to effect the Merger shall be further subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions:

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ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

        SECTION 8.1    Termination.    This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any time prior to the Effective Time, notwithstanding approval thereof by the shareholders of the Company:

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        SECTION 8.2    Effect of Termination.    (a) In the event of the termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any party hereto, except with respect to Sections 3.14, 4.8, 6.4(b), 6.9, this Section 8.2, Section 8.3 and Article IX, which shall survive such termination; provided, however, that nothing herein shall relieve any party from liability for any willful breach of its representations, warranties, covenants and agreements contained herein.

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        SECTION 8.3    Expenses.    Except as otherwise specifically provided herein, each party shall bear its own expenses in connection with this Agreement and the transactions contemplated hereby. In the event that this Agreement is terminated by Parent or the Company pursuant to Section 8.1(f), the Company shall reimburse Parent for all of its reasonable out-of-pocket documented expenses incurred by Parent on or after October 28, 2002 in connection with or related to the performance of this Agreement and the transactions contemplated hereby, such expenses not to exceed $750,000. Any such payment shall be credited against any payment otherwise payable by the Company pursuant to Section 8.2.

        SECTION 8.4    Amendment.    This Agreement may be amended by the parties hereto by action taken by or on behalf of their respective Boards of Directors at any time prior to the Effective Time; provided, however, that, after approval of the Merger and this Agreement by the shareholders of the Company, no amendment may be made which by law requires the further approval of the shareholders of the Company without such further approval. This Agreement may not be amended except by an instrument in writing signed by the parties hereto.

        SECTION 8.5    Waiver.    At any time prior to the Effective Time, any party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) subject to the requirements of applicable law, waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.

ARTICLE IX

GENERAL PROVISIONS

        SECTION 9.1    Non-Survival of Representations, Warranties and Agreements.    None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants and agreements, shall survive the Effective Time, except for (i) those covenants and agreements contained herein that by their terms apply or are to be performed in whole or in part after the Effective Time and (ii) this Article IX.

        SECTION 9.2    Notices.    All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice):

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        SECTION 9.3    Certain Definitions.    For purposes of this Agreement, the term:

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        SECTION 9.4    Severability.    If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

        SECTION 9.5    Entire Agreement; Assignment.    This Agreement, the Company Disclosure Schedule and the Parent Disclosure Schedule, the Environmental Access Agreement referred to in Section 6.4, the confidentiality agreement referred to in Section 6.4 and that certain letter dated the date hereof

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from the Company to Parent constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. The Company Disclosure Schedule and the Parent Disclosure Schedule referred to herein and signed for identification by the parties hereto are hereby incorporated herein and made a part hereof for all purposes as if fully set forth herein. This Agreement shall not be assigned by operation of law or otherwise.

        SECTION 9.6    Parties in Interest.    This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement, other than with respect to the provisions of Sections 6.7 which shall inure to the benefit of the persons or entities benefiting therefrom who are intended to be third-party beneficiaries thereof.

        SECTION 9.7    Governing Law.    This Agreement shall be governed and construed in accordance with the laws of the State of Minnesota, without regard to such state's conflict of laws principles.

        SECTION 9.8    Headings.    The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

        SECTION 9.9    Counterparts.    This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

        SECTION 9.10    Specific Performance; Service of Process.    The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement. Each of the Company, Parent and Merger Sub hereby agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 9.2 shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby.

        SECTION 9.11    Parent Guarantee.    Parent agrees to take all action necessary to cause Merger Sub or the Surviving Corporation, as applicable, to perform all of its respective agreements, covenants and obligations under this Agreement. Parent unconditionally guarantees to the Company the full and complete performance by Merger Sub or the Surviving Corporation, as applicable, of its respective obligations under this Agreement and shall be liable for any breach of any representation, warranty, covenant or obligation of Merger Sub or the Surviving Corporation, as applicable, under this Agreement. This is a guarantee of payment and performance and not collectibility. Parent hereby waives diligence, presentment, demand of performance, filing of any claim, any right to require any proceeding first against Merger Sub or the Surviving Corporation, as applicable, protest, notice and all demands whatsoever in connection with the performance of its obligations set forth in this Section 9.11.

        SECTION 9.12    Interpretation.    When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

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        IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

    GENERAL ELECTRIC COMPANY

 

 

By:

 

/s/  
JOHN G. RICE      
Name:  John G. Rice
Title:    
Senior Vice President, President &
CEO of GE Power Systems

 

 

OASIS ACQUISITION, INC.

 

 

By:

 

/s/  
JAMES M. WATERBURY      
Name:  James M. Waterbury
Title:    
Vice President

 

 

OSMONICS, INC.

 

 

By:

 

/s/  
D. DEAN SPATZ      
Name:  D. Dean Spatz
Title:    
C.E.O.

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ANNEX B

         LOGO


PERSONAL AND CONFIDENTIAL

November 3, 2002 Board of Directors
Osmonics, Inc.
5951 Clearwater Drive
Minnetonka, MN 55343-8995

Madame and Gentlemen:

You have requested our opinion as to the fairness from a financial point of view to the holders of the outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of Osmonics, Inc. (the "Company") of the Stock Consideration and the Cash Consideration (as defined below) to be received by the holders of Shares, taken in the aggregate, pursuant to the Agreement and Plan of Merger, dated as of November 3, 2002 (the "Agreement"), among General Electric Company ("GE"), Oasis Acquisition, Inc., a wholly owned subsidiary of GE ("Merger Sub"), and the Company. Pursuant to the Agreement, the Company will be merged with and into Merger Sub (the "Merger") and each outstanding Share will be converted into that number of shares (or fraction thereof) of Common Stock, par value $0.06 per share (the "GE Shares"), of GE equal to $17.00 divided by the Average Price (as defined in the Agreement), as more fully set forth in the Agreement (the "Stock Consideration"). Holders of Shares may elect, with respect to all or a portion of their Shares, to convert such Shares into the right to receive $17.00 per Share in cash (the "Cash Consideration"), subject to certain procedures and limitations contained in the Agreement, including that the sum of the number of Shares converted into the right to receive the Cash Consideration, the number of Shares owned by GE or Merger Sub and the number of Dissenting Shares (as defined in the Agreement) will not exceed 55% of the number of issued and outstanding Shares immediately prior to the effective time of the Merger. We express no view regarding such procedures and limitations.

Goldman, Sachs & Co., as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities and private placements as well as for estate, corporate and other purposes. We are familiar with the Company having provided certain investment banking services to the Company from time to time, including having acted as its financial advisor in connection with, and having participated in certain of the negotiations leading to, the Agreement. We also have provided certain investment banking services to GE and its affiliates from time to time, including having acted as agent to GE in connection with its medium term note program; having acted as financial advisor to GE in connection with its acquisition of Kretztechnik AG in October 2001, its acquisition of Interlogix, Inc. in February 2002 and its acquisition of Telemundo Communications Group, Inc. in April 2002; having acted as financial advisor to GE Capital Corporation in connection with its acquisition of MetLife Capital Credit Corporation in August 1998, its acquisition of Mellon U.S. Leasing and Mellon Leasing-Manufacturer and Dealer Services in June 2001 and its acquisition of Franchise Finance Corporation of America in August 2001; and having acted as

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underwriter in connection with a number of financing transactions for GE and its affiliates. We also are providing and may provide in the future investment banking services to GE and its affiliates. Goldman, Sachs & Co. provides a full range of financial advisory and securities services and, in the course of its normal trading activities, may from time to time effect transactions and hold positions in securities, including derivative securities, of the Company or GE for its own account and for the accounts of customers.

In connection with this opinion, we have reviewed, among other things, the Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the Company and GE for the five years ended December 31, 2001; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company and GE; certain other communications from the Company and GE to their respective stockholders; and certain internal financial analyses and forecasts for the Company prepared by its management. We have held discussions with members of the Board of Directors and senior management of the Company regarding their assessment of the strategic rationale for, and the potential benefits of, the transaction contemplated by the Agreement. We also have held discussions with members of the Board of Directors and senior management of the Company regarding the past and current business operations, financial condition and future prospects of the Company, including discussions with respect to the risks and uncertainties relating to the Company's ability to realize the internal forecasts prepared by its management in the amounts and time periods contemplated thereby. In addition, we have reviewed the reported price and trading activity for the Shares and the GE Shares, compared certain financial and stock market information for the Company and GE with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the water filtration industry specifically and in other industries generally and performed such other studies and analyses as we considered appropriate.

We have relied upon the accuracy and completeness of all of the financial, accounting, tax and other information discussed with or reviewed by us and have assumed such accuracy and completeness for purposes of rendering this opinion. In addition, we have not made an independent evaluation or appraisal of the assets and liabilities (including any derivative or off-balance-sheet assets and liabilities) of the Company or GE or any of their respective subsidiaries and we have not been furnished with any such evaluation or appraisal. As you are aware, our review of GE was limited to publicly available information and certain discussions with GE and GE did not make available to us its projections of expected future performance. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors of the Company in connection with its consideration of the transaction contemplated by the Agreement and such opinion does not constitute a recommendation as to how any holder of Shares should vote or make any election with respect to such transaction.

Based upon and subject to the foregoing and based upon such other matters as we consider relevant, it is our opinion that, as of the date hereof, the Stock Consideration and the Cash Consideration to be received by the holders of Shares, taken in the aggregate, is fair from a financial point of view to such holders.

Very truly yours,

SIGNATURE
(GOLDMAN, SACHS & CO.)
 

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ANNEX C

SECTIONS 302A.471 AND 302A.473 OF THE
MINNESOTA BUSINESS CORPORATION ACT

        Set forth below are Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act which provide that shareholders may dissent from, and obtain payment for the fair value of their shares in the event of certain corporate actions and establish procedures for the exercise of such dissenters' rights.

        302A.471 Rights of dissenting shareholders.

        Subd. 1. Actions creating rights.    A shareholder of a corporation may dissent from, and obtain payment for the fair value of the shareholder's shares in the event of, any of the following corporate actions:

        Subd. 2. Beneficial owners.    (a) A shareholder shall not assert dissenters' rights as to less than all of the shares registered in the name of the shareholder, unless the shareholder dissents with respect to all the shares that are beneficially owned by another person but registered in the name of the shareholder and discloses the name and address of each beneficial owner on whose behalf the shareholder dissents. In that event, the rights of the dissenter shall be determined as if the shares as to


which the shareholder has dissented and the other shares were registered in the names of different shareholders.

        Subd. 3. Rights not to apply.    (a) Unless the articles, the bylaws, or a resolution approved by the board otherwise provide, the right to obtain payment under this section does not apply to a shareholder of (1) the surviving corporation in a merger with respect to shares of the shareholder that are not entitled to be voted on the merger and are not canceled or exchanged in the merger or (2) the corporation whose shares will be acquired by the acquiring corporation in a plan of exchange with respect to shares of the shareholder that are not entitled to be voted on the plan of exchange and are not exchanged in the plan of exchange.

        Subd. 4. Other rights.    The shareholders of a corporation who have a right under this section to obtain payment for their shares do not have a right at law or in equity to have a corporate action described in subdivision 1 set aside or rescinded, except when the corporate action is fraudulent with regard to the complaining shareholder or the corporation.

***

        302A.473 Procedures for asserting dissenters' rights.

        Subd. 1. Definitions.    (a) For purposes of this section, the terms defined in this subdivision have the meanings given them.

        Subd. 2. Notice of action.    If a corporation calls a shareholder meeting at which any action described in section 302A.471, subdivision 1 is to be voted upon, the notice of the meeting shall inform each shareholder of the right to dissent and shall include a copy of section 302A.471 and this section and a brief description of the procedure to be followed under these sections.

        Subd. 3. Notice of dissent.    If the proposed action must be approved by the shareholders, a shareholder who is entitled to dissent under section 302A.471 and who wishes to exercise dissenters' rights must file with the corporation before the vote on the proposed action a written notice of intent to demand the fair value of the shares owned by the shareholder and must not vote the shares in favor of the proposed action.

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        Subd. 4. Notice of procedure; deposit of shares.    (a) After the proposed action has been approved by the board and, if necessary, the shareholders, the corporation shall send to all shareholders who have complied with subdivision 3 and to all shareholders entitled to dissent if no shareholder vote was required, a notice that contains:

        Subd. 5. Payment; return of shares.    (a) After the corporate action takes effect, or after the corporation receives a valid demand for payment, whichever is later, the corporation shall remit to each dissenting share holder who has complied with subdivisions 3 and 4 the amount the corporation estimates to be the fair value of the shares, plus interest, accompanied by:

        Subd. 6. Supplemental payment; demand.    If a dissenter believes that the amount remitted under subdivision 5 is less than the fair value of the shares plus interest, the dissenter may give written notice to the corporation of the dissenter's own estimate of the fair value of the shares, plus interest, within

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30 days after the corporation mails the remittance under subdivision 5, and demand payment of the difference. Otherwise, a dissenter is entitled only to the amount remitted by the corporation.

        Subd. 7. Petition; determination.    If the corporation receives a demand under subdivision 6, it shall, within 60 days after receiving the demand, either pay to the dissenter the amount demanded or agreed to by the dissenter after discussion with the corporation or file in court a petition requesting that the court determine the fair value of the shares, plus interest. The petition shall be filed in the county in which the registered office of the corporation is located, except that a surviving foreign corporation that receives a demand relating to the shares of a constituent domestic corporation shall file the petition in the county in this state in which the last registered office of the constituent corporation was located. The petition shall name as parties all dissenters who have demanded payment under subdivision 6 and who have not reached agreement with the corporation. The corporation shall, after filing the petition, serve all parties with a summons and copy of the petition under the rules of civil procedure. Nonresidents of this state may be served by registered or certified mail or by publication as provided by law. Except as otherwise provided, the rules of civil procedure apply to this proceeding. The jurisdiction of the court is plenary and exclusive. The court may appoint appraisers, with powers and authorities the court deems proper, to receive evidence on and recommend the amount of the fair value of the shares. The court shall determine whether the shareholder or shareholders in question have fully complied with the requirements of this section, and shall determine the fair value of the shares, taking into account any and all factors the court finds relevant, computed by any method or combination of methods that the court, in its discretion, sees fit to use, whether or not used by the corporation or by a dissenter. The fair value of the shares as determined by the court is binding on all shareholders, wherever located. A dissenter is entitled to judgment in cash for the amount by which the fair value of the shares as determined by the court, plus interest, exceeds the amount, if any, remitted under subdivision 5, but shall not be liable to the corporation for the amount, if any, by which the amount, if any, remitted to the dissenter under subdivision 5 exceeds the fair value of the shares as determined by the court, plus interest.

        Subd. 8. Costs; fees; expenses.    (a) The court shall determine the costs and expenses of a proceeding under subdivision 7, including the reasonable expenses and compensation of any appraisers appointed by the court, and shall assess those costs and expenses against the corporation, except that the court may assess part or all of those costs and expenses against a dissenter whose action in demanding payment under subdivision 6 is found to be arbitrary, vexatious, or not in good faith.

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PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers

        Section 721 of 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 bylaws 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 so adjudicated, or that he 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 actually and necessarily incurred as a result of such action, 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 actually and necessarily incurred by him 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 (1) a threatened or pending action which is settled or otherwise disposed of, or (2) 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 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 under Section 722 and Section 723 of the NYBCL. Section 725 of the NYBCL contains certain other miscellaneous provisions affecting the indemnification of directors and officers.

        Section 726 of the NYBCL authorizes a corporation to purchase and maintain 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 a 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 a corporation under such section, provided the contract of insurance covering such directors and

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officers provides, in a manner acceptable to the New York State Superintendent of Insurance, 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:

        Article XI of the bylaws, as amended, of GE provides as follows:

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        GE has purchased liability insurance for its officers and directors as permitted by Section 727 of the NYBCL.

Item 21. Exhibits and Financial Statement Schedules


Exhibit Number

   
  Description of Exhibit
2.1     Agreement and Plan of Merger, dated as of November 3, 2002 among General Electric Company, Oasis Acquisition, Inc. and Osmonics, Inc. (included as Annex A to the proxy statement/prospectus).
4.1     The Certificate of Incorporation, as amended, and Bylaws, as amended, of General Electric Company are incorporated by reference to Exhibit 3 of General Electric Company's Current Report on Form 8-K dated May 1, 2000.
4.2     The instruments defining the rights of holders of long-term debt securities of General Electric Company and its subsidiaries are omitted pursuant to item 601(b)(4)(iii)(A) of Regulation S-K. General Electric Company hereby agrees to furnish copies of instruments to the SEC upon request.
*5.1     Opinion of Robert E. Healing, Corporate Counsel to General Electric Company, as to the legality of the securities being registered.
8.1     Opinion of King & Spalding LLP as to the United States federal income tax consequences of the Merger.
8.2     Opinion of Simpson Thacher & Bartlett as to the United States federal income tax consequences of the Merger.
23.1     Consent of King & Spalding LLP (included as part of Exhibit 8.1 to this Registration Statement).
23.2     Consent of Simpson Thacher & Bartlett (included as part of Exhibit 8.2 to this Registration Statement).
23.3     Consent of KPMG LLP.
23.4     Consent of Deloitte & Touche LLP.
*23.5     Consent of Robert E. Healing (included as part of Exhibit 5.1 to this Registration Statement).
*24.1     Powers of Attorney.
99.1     Proxy Card.
99.2     Cash Election Form.
99.3     Consent of Goldman, Sachs & Co.

*
Filed on December 23, 2002, in connection with this Registration Statement


(b)
Not applicable

(c)
Opinion of Goldman, Sachs & Co. attached as Annex B to the proxy statement/prospectus

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Item 22. Undertakings

        The undersigned registrant hereby undertakes 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.

        The undersigned registrant undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

        The registrant undertakes that every prospectus: (i) that is filed pursuant to the preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes 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.

        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 advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by GE 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.

        The undersigned registrant 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 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.

        The undersigned registrant hereby undertakes to supply by means of a 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.

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SIGNATURE PAGE

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Fairfield, State of Connecticut, on January 24, 2003.

    GENERAL ELECTRIC COMPANY

 

 

By:

 

/s/  
PHILIP D. AMEEN      
Name: Philip D. Ameen
Title:
Vice President and Comptroller

        Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature
  Title
  Date

 

 

 

 

 
*Jeffrey R. Immelt   Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)   January 24, 2003

*Keith S. Sherin

 

Senior Vice President-Finance, Chief Financial Officer (Principal Financial Officer)

 

January 24, 2003

/s/  
PHILIP D. AMEEN      
Philip D. Ameen

 

Vice President and Comptroller (Principal Accounting Officer)

 

January 24, 2003

*James I. Cash, Jr.

 

Director

 

January 24, 2003

*Dennis D. Dammerman

 

Director

 

January 24, 2003

*Ann M. Fudge

 

Director

 

January 24, 2003

*Claudio X. Gonzalez

 

Director

 

January 24, 2003

*Andrea Jung

 

Director

 

January 24, 2003

*Kenneth G. Langone

 

Director

 

January 24, 2003

*Ralph S. Larsen

 

Director

 

January 24, 2003

 

 

 

 

 


*Rochelle B. Lazarus

 

Director

 

January 24, 2003

*Sam Nunn

 

Director

 

January 24, 2003

*Roger S. Penske

 

Director

 

January 24, 2003

*Gary L. Rogers

 

Director

 

January 24, 2003

*Robert J. Swieringa

 

Director

 

January 24, 2003

*Douglas A. Warner III

 

Director

 

January 24, 2003
A majority of the Board of Directors    

*By

/s/  
PHILIP D. AMEEN      
Philip D. Ameen
Attorney-in-Fact

 

 



QuickLinks

REFERENCES TO ADDITIONAL INFORMATION
TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT THE MERGER
SUMMARY
SELECTED HISTORICAL FINANCIAL DATA OF GE
SELECTED HISTORICAL FINANCIAL DATA OF OSMONICS
COMPARATIVE PER SHARE DATA
COMPARATIVE STOCK PRICES AND DIVIDENDS
THE SPECIAL MEETING
THE MERGER
THE MERGER AGREEMENT
COMPARATIVE RIGHTS OF GE AND OSMONICS SHAREHOLDERS
Summary of Material Differences Between the Rights of Osmonics Shareholders and the Rights of GE Shareholders
DESCRIPTION OF GE'S CAPITAL STOCK
STOCK EXCHANGE LISTING
EXPERTS
LEGAL MATTERS
SHAREHOLDER PROPOSALS
WHERE YOU CAN FIND MORE INFORMATION
SPECIAL NOTE CONCERNING FORWARD LOOKING STATEMENTS
TABLE OF CONTENTS
INDEX OF PRINCIPAL TERMS
AGREEMENT AND PLAN OF MERGER
PART II
SIGNATURE PAGE