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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
THE BOEING COMPANY
(Name of Registrant as Specified in Its Charter)
------------------------
(Names of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Investment Company Act Rule 20a-1(c).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
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THE BOEING COMPANY
March 10, 1995
Dear Shareholder:
You are invited to attend your Company's 1995 Annual Meeting of
Shareholders.
It will be held on Monday, April 24, 1995, in the second-floor
auditorium of the Company's 2-22 Building, located at 7755 East Marginal Way
South, Seattle, Washington. The meeting will begin at 11:00 a.m., Seattle time.
A map and directions to the meeting facility are on the back of this proxy
statement. The Annual Meeting will be accessible through the use of a sign
language interpreter.
At the meeting there will be reports on the activities of the Company
and an opportunity to submit questions or comments on matters of interest to
shareholders generally.
Whether or not you attend in person, it is important that your shares
be voted on matters that come before the meeting. I urge you to specify your
choices by marking, dating, and signing the accompanying proxy card and
returning it promptly. If you sign and return your proxy card without marking
choices, it will be understood that you wish to have your shares voted in
accordance with the directors' recommendations.
Very truly yours,
/s/ Frank Shrontz
FRANK SHRONTZ
Chairman of the Board
and Chief Executive Officer
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THE BOEING COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1995
The Annual Meeting of Shareholders of The Boeing Company will be held on April
24, 1995, at 11:00 a.m., Seattle time, in the second-floor auditorium of the
Company's 2-22 Building, at 7755 East Marginal Way South, Seattle, Washington.
Shareholders at the close of business on February 23, 1995, will be entitled to
vote at the Annual Meeting. The only item on the agenda is the election of five
people to the Board of Directors, each for a three-year term expiring in 1998.
Management does not expect any other business to come before the Annual
Meeting.
For admission to the meeting, shareholders who own shares in their own names
should come to the Registered Shareholders check-in tables, where their
ownership will be verified. Those who have beneficial ownership of stock
through a bank or broker should come to the Beneficial Owners table and must
bring account statements or letters from their banks or brokers indicating that
they owned Boeing stock as of February 23, 1995. SHAREHOLDER ADMISSION TICKETS
WILL NOT BE USED THIS YEAR.
/s/ Heather Howard
HEATHER HOWARD
Corporate Secretary and Corporate Counsel
Seattle, Washington
March 10, 1995
IF YOU CANNOT ATTEND THE MEETING, PLEASE SIGN, DATE, AND RETURN THE ENCLOSED
PROXY CARD APPOINTING PHILIP M. CONDIT, GEORGE M. KELLER, AND
GEORGE H. WEYERHAEUSER AS YOUR PROXIES.
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THE BOEING COMPANY
P.O. BOX 3707
SEATTLE, WASHINGTON
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1995
This proxy statement is issued in connection with solicitation of the enclosed
proxy by the Board of Directors of The Boeing Company (the "Company" or
"Boeing") for use at the Company's 1995 Annual Meeting of Shareholders (the
"Annual Meeting"). The approximate date on which this proxy material is first
to be sent to shareholders is March 15, 1995.
OUTSTANDING SECURITIES
The Company's only class of capital stock outstanding is common stock with
voting rights. The Board of Directors has fixed the close of business on
February 23, 1995, as the record date for identifying shareholders of the
Company entitled to vote at the Annual Meeting. On February 23, 1995, there
were 341,057,901 shares of common stock outstanding and entitled to vote. The
last sale price of the Company's common stock for that date, as reported in The
Wall Street Journal, was $47.00 per share.
ATTENDANCE AT THE MEETING
For admission to the meeting, shareholders who own shares in their own names
should come to the Registered Shareholders check-in tables, where their
ownership will be verified. Those who have beneficial ownership of stock that
is held by a bank or broker (often referred to as "holding in street name")
should come to the Beneficial Owners tables; they must bring account statements
or letters from their banks or brokers indicating that they owned Boeing stock
as of February 23, 1995. Shareholder admission tickets will not be used this
year.
The doors to the 2-22 Building will be opened at 9:30 a.m. and the meeting will
begin at 11:00 a.m. It is expected to be finished no later than 12:30 p.m. A
map and directions to the meeting facility are on the back of this proxy
statement.
Anyone who wishes to bring a translator to provide simultaneous translation
during the meeting is asked to contact the Assistant Secretary no later than
April 10, 1995, at The Boeing Company, P.O. Box 3707, Mail Stop 10-13, Seattle,
Washington 98124-2207. Those with translators will be seated in the meeting
room annex in order to avoid disturbing others.
VOTING AT THE MEETING OR BY PROXY
At the date of this statement, the only matter that management intends to
present is the election of five directors, each for a three-year term expiring
in 1998.
Shares represented by a properly executed proxy in the accompanying form will
be voted at the meeting and, when instructions are given by the shareholder,
will be voted in accordance with
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those instructions. If no instructions are given, the shares will be voted
according to the recommendation of the Board of Directors. That recommendation
is reported later in this statement.
The enclosed proxy card gives discretionary authority to the persons named on
the proxy card to vote the shares in their best judgment, if any matters other
than those shown on the proxy card are properly brought before the meeting.
A shareholder who executes a proxy may revoke it at any time before its
exercise by delivering a written notice of revocation to the Secretary of the
Company or signing and delivering another proxy that is dated later. If the
shareholder attends the meeting in person, either giving notice of revocation
to an inspector of election at the meeting or voting at the meeting will revoke
the proxy.
VOTING BY FUND E PARTICIPANTS
Most Boeing employees may participate in either The Boeing Company Voluntary
Investment Plan for Hourly Employees or The Boeing Company Voluntary Investment
Plan for Salaried Employees (the "VIP Plans"), which are retirement plans
established under Section 401(k) of the Internal Revenue Code. One of the five
funds into which employees may direct their investments is Fund E, which
invests in Boeing common stock. The shares of stock held in that fund are
registered in the name of The Chase Manhattan Bank, N.A., which is the Trustee
of the VIP Plans. The participants do not acquire ownership of the shares and
therefore are not eligible to vote the shares directly or attend the Annual
Meeting (unless they are also registered or beneficial owners of Boeing stock).
However, the participants are allocated units in the fund and may instruct the
Trustee how to vote the shares represented by their units.
The proxy card that is being sent with this proxy statement to registered
shareholders is also being sent to Fund E participants. (Beneficial owners
receive proxy cards from their brokers or other agents; some brokers use the
Company's proxy card and some prepare their own proxy cards.) The number of
common shares held is shown on the back of the proxy card, above the boxes to
be marked, with the notation "COM." The number of Fund E shares, if any, is
shown on a separate line with the notation "VIP." If one person has both common
shares and Fund E shares, both lines will appear on the card and that person
may vote both the common and Fund E shares by signing and returning the single
card. Fund E shares can be voted only by signing and returning the proxy card;
they cannot be voted at the meeting and prior votes cannot be revoked at the
meeting.
Fund E shares will be voted by the Trustee according to the participant's
instructions. If the card is signed and returned but no voting instructions are
given, such shares will be voted as recommended by the Board of Directors.
Signing the card will also authorize the Trustee or its proxies to vote at
their discretion on any other matter that may properly come before the meeting.
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VOTE REQUIRED
Under Delaware law and the Company's Restated Certificate of Incorporation, the
presence at the Annual Meeting, in person or by duly authorized proxy, of the
holders of one-third of the outstanding shares of stock entitled to vote
constitutes a quorum for the transaction of business. The five nominees for
election as directors who receive the greatest number of votes cast for the
election of directors by shares entitled to vote and present in person or by
proxy at the Annual Meeting will be elected directors. The affirmative vote of
the majority of shares entitled to vote and present in person or by proxy at
the Annual Meeting is required for approval of any other matter submitted to a
vote of the shareholders.
METHOD OF COUNTING VOTES
Each share of common stock entitles the holder to one vote on each matter
presented for shareholder approval. An abstention with respect to the election
of directors will not be counted either in favor of or against the election of
the nominees. In the case of any other proposal presented for shareholder
approval, an abstention will effectively count as a vote against that proposal.
Brokers who hold shares for the accounts of their clients may vote such shares
either as directed by their clients or in their own discretion if permitted by
the stock exchange or other organization of which they are members. Members of
the New York Stock Exchange are permitted to vote their clients' proxies in
their own discretion as to the election of directors if the clients have not
furnished voting instructions within ten days of the meeting. Certain proposals
other than the election of directors are "non-discretionary" and brokers who
have received no instructions from their clients do not have discretion to vote
on those items. When brokers vote proxies on some but not all of the proposals
at a meeting, the missing votes are referred to as "broker non-votes." Broker
non-votes will be included in determining the presence of a quorum at the
meeting, but they are not considered "shares present" for voting purposes and
have no impact on the outcome of the proposals, other than to reduce the number
of favorable votes necessary to approve the proposal.
CONFIDENTIAL VOTING POLICY
It is the policy of the Company that all proxy, ballot, and voting materials
that identify the vote of a specific shareholder on any matter submitted for a
vote of shareholders will be kept secret from directors and executive officers
of the Company except (1) when disclosure is required by applicable law or
regulation; (2) when a shareholder expressly requests such disclosure; and (3)
in a contested proxy solicitation. If the shareholder is an employee of the
Company or a participant in Fund E of the Company's VIP Plans, the information
will not be disclosed to management unless (1) or (2) above applies.
Proxies and ballots will be received and tabulated by an independent business
entity that is not affiliated with the Company. The inspectors of election will
be independent of the Company.
Comments written on proxy cards will be provided to the Secretary of the
Company without disclosing the vote unless that information is necessary to
understand the comment.
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EXPENSES OF SOLICITATION
All expenses for soliciting proxies will be paid by the Company. The Company
has retained D.F. King & Co., Inc., 77 Water Street, New York, New York 10005,
to aid in the solicitation of proxies, for a fee of $17,500, plus reasonable
out-of-pocket expenses. Proxies may be solicited by personal interview, mail,
and telephone. Brokerage houses, other custodians, and nominees have been asked
whether other persons are the beneficial owners of the shares that they hold in
street name and, if that is the case, they have been supplied with additional
copies of the proxy materials for distribution to such beneficial owners. The
Company will reimburse such parties for their reasonable expenses in sending
proxy materials to the beneficial owners of the shares.
INDEPENDENT AUDITORS
As recommended by the Audit Committee of the Board of Directors, the Board has
appointed Deloitte & Touche LLP as independent auditors to audit the financial
statements of the Company for the fiscal year ending December 31, 1995.
Deloitte & Touche LLP and predecessor firms have served continuously since 1934
as independent auditors for the Company. Representatives of Deloitte & Touche
LLP will be present at the Annual Meeting to respond to appropriate questions
and to make a statement if they so desire.
ELECTION OF DIRECTORS
The Board of Directors currently consists of thirteen people, eleven of whom
are independent directors and two of whom are members of management. In
accordance with the Company's By-Laws, directors are divided into three
classes, each of which is composed of approximately one-third of the
directors. At the Annual Meeting, five directors will be elected to serve for
terms of three years, expiring on the date of the annual meeting of
shareholders in 1998. Each director elected will continue in office until a
successor has been elected or until resignation or removal in the manner
provided by the By-Laws of the Company. The nominees for the Board of
Directors, recommended by its Organization and Nominating Committee, are all
currently board members. The nominees for director and the directors whose
terms will continue after the Annual Meeting are listed below. Shares
represented by a properly executed proxy card will be voted for the nominees
unless such authority is withheld. The Board of Directors does not contemplate
that any of the nominees will be unable to stand for election, but should any
nominee become unavailable for election, all proxies will be voted for the
election of a substitute nominee designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
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NOMINEES
JOHN E. BRYSON Director since 1995
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER OF SCECORP. Age 51. Mr.
Bryson has served as Chairman of the Board and Chief Executive Officer of
SCEcorp and its principal subsidiary, Southern California Edison Company
(electric utility), since 1990. He is also a director of The Mission Group,
which is a nonutility subsidiary of SCEcorp. Mr. Bryson joined Southern
California Edison Company in 1984. Immediately prior thereto, he was a partner
in the law firm of Morrison and Foerster. From 1979 through 1982, Mr. Bryson
served as President of the California Public Utilities Commission and earlier
served as Chairman of the California State Water Resources Control Board. He is
also a director of First Interstate Bancorp, The Times Mirror Company, and the
Council on Foreign Relations, and a trustee of Stanford University. Mr. Bryson
has 500 shares of Boeing stock and interests in 106 Boeing shares under the
Deferred Compensation Plan for Directors. He was elected a director, and a
member of the Audit and Finance Committees, by the Board of Directors on
February 27, 1995.
STANLEY HILLER, JR. Director since 1976
PARTNER, HILLER INVESTMENT COMPANY. Age 70. Mr. Hiller has been a senior
partner in Hiller Investment Company (private investments) since 1968. He is
currently Chief Executive Officer of Key Tronic Corporation (manufacturer of
computer keyboards and other input devices). Previously, he was Chairman of the
Board of Baker International, Reed Tool, York International, and other
corporations. Mr. Hiller is chairman of the Audit Committee and a member of the
Finance Committee. He has 10,630 shares of Boeing stock and exercisable options
for 2,010 shares.
CHARLES M. PIGOTT Director since 1972
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, PACCAR INC. Age 65. Mr.
Pigott has been Chairman of the Board and Chief Executive Officer of PACCAR Inc
(manufacturer of transportation equipment) since 1986. He served as President
of that company from 1965 to 1987. He is also a director of Chevron Corporation
and The Seattle Times Company. Mr. Pigott is chairman of the Organization and
Nominating Committee and a member of the Compensation Committee. He has 15,093
shares of Boeing stock and exercisable options for 2,010 shares.
ROZANNE L. RIDGWAY Director since 1992
CO-CHAIR, THE ATLANTIC COUNCIL OF THE UNITED STATES. Age 59. Ambassador
Ridgway, Co-Chair of The Atlantic Council of the United States (an association
to promote better understanding of international economic, political, and
security issues), was its President from 1989 through 1992. Prior to that, she
served with the U.S. State Department, including service as Special Assistant
to the Secretary of State, Ambassador to the German Democratic Republic, and
Ambassador to Finland. From 1985 until her retirement in 1989, she was
Assistant Secretary of State for European and Canadian Affairs. She is also a
director of Bell Atlantic Corporation, Citicorp, Emerson Electric Company, RJR
Nabisco, Inc., 3M Corporation, The Sara Lee Corporation, and Union Carbide
Corporation. She is a trustee of the National Geographic Society and the CNA
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Corporation, and a member of the International Advisory Board of the New
Perspective Fund. Ambassador Ridgway is a member of the Audit Committee and the
Finance Committee. She has 100 shares of Boeing stock, interests in 1,234
Boeing shares under the Deferred Compensation Plan for Directors, and
exercisable options for 2,010 shares.
FRANK SHRONTZ Director since 1985
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, THE BOEING COMPANY. Age 63.
Mr. Shrontz was named Chairman of the Board of The Boeing Company in 1988. He
has been Chief Executive Officer since 1986 and was President of the Company
from 1985 until 1988. He has been employed by the Company since 1958, except
for the period from 1973 through 1976, when he served as Assistant Secretary of
the Air Force and as Assistant Secretary of Defense. Mr. Shrontz is also a
director of Boise Cascade Corporation, Citicorp, and 3M Corporation. He has
17,670 shares of Boeing stock, 26,740 performance shares issued under the
Long-Term Incentive Program, 3,226 Boeing Stock Units, and exercisable options
for 415,124 shares. He also has a vested option for 200,000 shares that becomes
exercisable only when the market price reaches certain levels.
CONTINUING DIRECTORS
ROBERT A. BECK Director since 1985
CHAIRMAN EMERITUS, THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. Age 69. Mr.
Beck served as Chairman of the Board and Chief Executive Officer of The
Prudential Insurance Company of America (a diversified insurance company) from
1978 until his retirement from those positions in 1987. Currently he serves as
Chairman Emeritus and director of Prudential. He is also a director of Campbell
Soup Company, Texaco, Inc., and Xerox Corporation. Mr. Beck is a member of the
Audit Committee and the Finance Committee. His current term expires in 1996. He
has 1,125 shares of Boeing stock, interests in 11,945 Boeing shares under the
Deferred Compensation Plan for Directors, and exercisable options for 2,010
shares.
PHILIP M. CONDIT Director since 1992
PRESIDENT, THE BOEING COMPANY. Age 53. Mr. Condit was elected President of The
Boeing Company in August 1992. From 1989 to 1992, he was Executive Vice
President of Boeing Commercial Airplane Group and General Manager of its 777
Division (previously called the New Airplane Division). Mr. Condit is also a
director of Fluke Corporation and Nordstrom Inc. His current term expires in
1996. Mr. Condit has 5,818 shares of Boeing stock, 10,660 performance shares,
1,570 Boeing Stock Units, and exercisable options for 53,450 shares. He also
has a vested option for 125,000 shares that becomes exercisable only when the
market price reaches certain levels.
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JOHN B. FERY Director since 1989
CHAIRMAN OF THE BOARD, BOISE CASCADE CORPORATION. Age 65. Mr. Fery has served
as Chairman of the Board of Boise Cascade Corporation (wood and paper products)
since 1978, and served as Chief Executive Officer from 1972 until July 29,
1994. He is also a director of Albertson's, Inc., Hewlett-Packard Company, and
West One Bancorp. Mr. Fery is chairman of the Finance Committee and a member of
the Audit Committee. His current term expires in 1996. Mr. Fery has 2,250
shares of Boeing stock and exercisable options for 2,010 shares.
PAUL E. GRAY Director since 1990
CHAIRMAN OF THE CORPORATION, MASSACHUSETTS INSTITUTE OF TECHNOLOGY. Age 63. Dr.
Gray served as President of Massachusetts Institute of Technology (education)
from 1980 until he retired in 1990. He was Chancellor of MIT from 1971 to 1980
and Dean of the School of Engineering from 1970 to 1971. Dr. Gray is a director
of Eastman Kodak Company, New England Mutual Life Insurance Co., and Arthur D.
Little, Incorporated. He is a member of the Audit Committee and the Finance
Committee. His current term expires in 1997. Dr. Gray has 800 shares of Boeing
stock and exercisable options for 1,710 shares.
HAROLD J. HAYNES Director from 1974 to 1982 and since 1984
RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, CHEVRON CORPORATION.
Age 69. Mr. Haynes served Chevron Corporation (petroleum products) as President
from 1969 to 1974 and as Chairman of the Board and Chief Executive Officer from
1974 until his retirement in 1981. He currently serves as a director of and
Senior Counselor to Bechtel Group, Inc. Mr. Haynes is also a director of
Citicorp, Hewlett-Packard Company, PACCAR Inc, and Saudi Arabian Oil Company.
He is a member of the Compensation Committee and the Organization and
Nominating Committee. His current term expires in 1997. Mr. Haynes has 8,000
shares of Boeing stock and exercisable options for 2,010 shares.
GEORGE M. KELLER Director since 1983
RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, CHEVRON CORPORATION.
Age 71. Mr. Keller was Chairman of the Board and Chief Executive Officer of
Chevron Corporation (petroleum products) from 1981 until his retirement on
January 1, 1989. He had been continuously employed by that company since 1948,
including service as Vice Chairman from 1974 to 1981. Mr. Keller is a director
of The Chronicle Publishing Company, First Interstate Bancorp, McKesson Corp.,
Metropolitan Life Insurance Company, and SRI International. He is chairman of
the Compensation Committee and a member of the Organization and Nominating
Committee. His current term expires in 1997. Mr. Keller has 4,375 shares of
Boeing stock and exercisable options for 2,010 shares.
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DONALD E. PETERSEN Director since 1990
RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, FORD MOTOR COMPANY.
Age 68. Mr. Petersen served as Chairman of the Board and Chief Executive
Officer of Ford Motor Company (automobile manufacturer) from 1985 to 1990. He
had served as President of Ford Motor Company from 1980 to 1985. Mr. Petersen
is a director of Dow Jones & Co., Inc. and Hewlett-Packard Company. He is a
member of the Compensation Committee and the Organization and Nominating
Committee. His current term expires in 1996. Mr. Petersen has 1,500 shares of
Boeing stock, interests in 2,590 Boeing shares under the Deferred Compensation
Plan for Directors, and exercisable options for 2,010 shares.
GEORGE H. WEYERHAEUSER Director since 1962
CHAIRMAN OF THE BOARD, WEYERHAEUSER COMPANY. Age 68. Mr. Weyerhaeuser has been
Chairman of the Board of Weyerhaeuser Company (forest products) since 1988. He
joined Weyerhaeuser Company in 1949, became its President in 1966, and was its
Chief Executive Officer from 1966 to 1991. He has been a director of that
corporation since 1960 and is also a director of Chevron Corporation and SAFECO
Corporation. Mr. Weyerhaeuser is a member of the Compensation Committee and the
Organization and Nominating Committee. His current term expires in 1997. Mr.
Weyerhaeuser has 9,112 shares of Boeing stock and exercisable options for 2,010
shares.
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COMPENSATION OF DIRECTORS
The Company pays each non-employee director an annual board retainer fee of
$26,000 and a fee of $2,000 for each day on which that director attends a board
meeting. Additionally, the Company pays a non-employee director an annual
committee retainer of $6,000 for all committee service and a daily fee of
$1,000 for attendance at one or more committee meetings on a day on which a
board meeting is not also held. The Company reimburses non-employee directors
for actual travel and out-of-pocket expenses incurred in connection with
service to the Company.
In addition to the cash compensation described above, at the time of a
non-employee director's first annual meeting, the director receives an initial
option to purchase 1,500 shares of Boeing common stock. After each subsequent
annual meeting during the non-employee director's term, the director receives
an option to purchase an additional 1,200 shares. The exercise price is
determined by the Fair Market Value of Boeing common stock. "Fair Market Value"
is the mean of the high and low per share trading prices as reported in The
Wall Street Journal for the New York Stock Exchange - Composite Transactions
for a single trading day. The exercise price of an option is equal to the
average of the Fair Market Values during the fifth through ninth business days
following the grant. Options vest approximately one year after grant, provided
the recipient remains a director. Options become exercisable in installments
one, three, and five years after the date of grant.
The Company also has a Deferred Compensation Plan for Directors. Participating
directors may elect to defer all or a portion of their cash compensation for
service as directors in a cash-based account that bears interest or a stock
unit account that earns dividends.
COMMITTEES
The Board of Directors has standing Audit, Compensation, Finance, and
Organization and Nominating Committees. Additionally, from time to time, the
board establishes special committees for specific purposes. The membership of
the standing committees is usually determined at the organizational meeting of
the board in conjunction with the annual meeting of shareholders. Only
independent directors currently serve on standing committees. The membership of
the committees is as follows, with the chairman of each committee listed first:
ORGANIZATION
AUDIT COMPENSATION FINANCE AND NOMINATING
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Stanley Hiller, Jr. George M. Keller John B. Fery Charles M. Pigott
Robert A. Beck Harold J. Haynes Robert A. Beck Harold J. Haynes
John E. Bryson Donald E. Petersen John E. Bryson George M. Keller
John B. Fery Charles M. Pigott Paul E. Gray Donald E. Petersen
Paul E. Gray George H. Weyerhaeuser Stanley Hiller, Jr. George H. Weyerhaeuser
Rozanne L. Ridgway Rozanne L. Ridgway
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AUDIT COMMITTEE
The functions of the Audit Committee are to recommend to the board the
appointment of a firm of certified public accountants to conduct the audit of
the Company's consolidated financial statements, to review the scope and
results of the audit, to monitor the adequacy of financial reporting controls,
to review significant legal items, and to monitor the adequacy of the Company's
risk management program. It also reviews the Company's ethics and business
conduct programs and compliance with the Defense Industry Initiative on
Business Ethics and Conduct, and monitors Company compliance with laws,
regulations, and Company policies established by the board relating to sales
consultants, government affairs consultants and political contributions. In
1994, the Audit Committee held five meetings.
COMPENSATION COMMITTEE
The Compensation Committee makes recommendations to the Board of Directors
concerning the compensation of elected Company officers. The committee
determines the number of stock options awarded to certain officers of the
Company and the terms and conditions on which the options will be granted. It
administers the Deferred Compensation Plans for employees and independent
directors and oversees incentive compensation awards to officers and employees
of the Company, in accordance with the Company's Incentive Compensation Plan.
In 1994, the Compensation Committee held six meetings.
FINANCE COMMITTEE
The Finance Committee reviews and makes recommendations concerning proposed
dividend actions, current and projected capital requirements, issuance of debt
or equity securities, major changes to credit agreements with commercial banks,
and short-term investment policy. The committee reviews annually the investment
policies, administration, and performance of the trust investments of the
Company's employee benefit plans. The Finance Committee held five meetings in
1994.
ORGANIZATION AND NOMINATING COMMITTEE
The Organization and Nominating Committee makes recommendations to the Board of
Directors concerning the desired qualifications of prospective candidates to
fill vacancies on, or to be elected or re-elected to, the board. The committee
will consider the names and qualifications of candidates for the board
submitted by shareholders in accordance with the procedures referred to on page
30 of this proxy statement. The Organization and Nominating Committee advises
the Board of Directors with respect to recommendations of management concerning
compensation of the board and its committees. The committee also makes
recommendations to the Board of Directors concerning candidates for election as
chief executive officer of the Company, election of other corporate officers,
and succession planning for senior management. The Organization and Nominating
Committee held six meetings in 1994.
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BOARD AND COMMITTEE MEETINGS
During 1994, the board held six meetings and the committees described above
held 22 meetings. Average attendance at all such meetings was 90%. Each
incumbent director attended at least 75% of the total number of board and
committee meetings he or she was eligible to attend, except Mr. Beck, who was
ill.
RELATED PARTY TRANSACTIONS
The Company and its subsidiaries have transactions in the ordinary course of
business with other corporations of which certain Boeing directors are
executive officers. The Company does not consider the amounts involved in such
transactions to be material in relation to its business and believes that such
amounts are not material in relation to the business of such other corporations
or the interests of the directors involved.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain of its officers to file reports of their ownership of
Boeing stock and of changes in such ownership with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange. SEC regulations also
require the Company to identify in this proxy statement any person subject to
this requirement who failed to file any such report on a timely basis. Based
solely on the Company's review of the copies of such reports it has received,
the Company believes that all of its directors and officers complied with all
filing requirements applicable to them with respect to transactions during
1994.
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SECURITY OWNERSHIP OF MANAGEMENT
The table below shows ownership of the Company's common stock as of February
28, 1995, by each director and director nominee, by the Chief Executive Officer
and the other five most highly compensated executive officers (collectively,
the "named executive officers"), and by all directors and executive officers as
a group. The first column, "Number of Shares Beneficially Owned," includes for
each person the number of shares of common stock directly and indirectly owned
on February 28, 1995. The second column shows the number of shares that such
person may acquire on or before April 29, 1995, by exercising stock options
awarded by the Company. The third column shows the number of shares, share
equivalents, and interests in shares held pursuant to the Company's
compensation and benefit plans, on February 28, 1995. All numbers in the table
are rounded to whole shares.
No family relationship exists between any of the directors, director nominees,
or executive officers of the Company.
All amounts shown in the table together represent less than one percent of the
outstanding common stock. The Company is not aware of any person who
beneficially owns five percent or more of the Company's common stock.
NUMBER OF OTHER
NUMBER OF SHARES THAT INTERESTS
SHARES MAY BE IN SHARES
BENEFICIALLY ACQUIRED BY OR SHARE
NAME OF BENEFICIAL OWNER OWNED EXERCISING OPTIONS EQUIVALENTS
------------------------ ------------ ------------------ -----------
DIRECTORS AND NOMINEES
Robert A. Beck 1,125 2,010 11,945(1)
John E. Bryson 500(2) 0 106(1)
John B. Fery 2,250 2,010 0
Paul E. Gray 800(2) 1,710 0
Harold J. Haynes 8,000 2,010 0
Stanley Hiller, Jr. 10,630 2,010 0
George M. Keller 4,375(2) 2,010 0
Donald E. Petersen 1,500 2,010 2,590(1)
Charles M. Pigott 15,093 2,010 0
Rozanne L. Ridgway 100 2,010 1,234(1)
George H. Weyerhaeuser 9,112 2,010 0
NAMED EXECUTIVE OFFICERS
(*also served as directors)
Frank Shrontz* 17,670 415,124(4) 29,966(3)
Douglas P. Beighle 8,311 127,050 10,702(3)
Philip M. Condit* 5,818 53,450(4) 12,230(3)
Boyd E. Givan 9,552(5) 80,275(4) 10,235(3)
C. Gerald King 11,999 71,587(4) 8,643(3)
Ronald B. Woodard 0 27,012(4) 7,610(3)(6)
All directors and executive
officers as a group (22 persons) 121,189(5) 985,721(4) 119,449
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(1) Each number represents stock units in the Deferred Compensation Plan
for Directors, which is described on page 15.
(2) Voting and investment power over this stock is shared with the
director's spouse.
(3) Each number includes performance shares issued pursuant to the
Company's Long-Term Incentive Program and Boeing Stock Units. For a
description of these interests, see the Compensation Committee Report
on Executive Compensation, which begins on page 25. The numbers held
by each named executive officer are as follows:
PERFORMANCE BOEING
SHARES STOCK UNITS
----------- -----------
Frank Shrontz 26,740 3,226
Douglas P. Beighle 9,820 882
Philip M. Condit 10,660 1,570
Boyd E. Givan 9,310 925
C. Gerald King 7,740 903
Ronald B. Woodard 3,700 796
(4) In addition to the stock options shown here, Messrs. Shrontz, Condit,
Givan, King, and Woodard have vested supplemental stock options that
expire on December 13, 1998. They are not exercisable until the
closing price of Boeing common stock, as reported in The Wall Street
Journal for the New York Stock Exchange - Composite Transactions,
averages or exceeds specified prices for 20 consecutive trading days.
For further discussion of these options, see footnote (2) to Option
Grants in Last Fiscal Year, on page 22, and the Compensation Committee
Report on Executive Compensation, at page 27. The total number of
shares that could be acquired by each officer by exercise of such
options is as follows:
Frank Shrontz 200,000
Philip M. Condit 125,000
Boyd E. Givan 45,000
C. Gerald King 45,000
Ronald B. Woodard 45,000
(5) This number does not include 3,641,364 shares for which Mr. Givan has
shared investment power as a member of the Retirement Committee, which
is appointed by the Board of Directors to oversee employee retirement
matters. Mr. Givan disclaims beneficial ownership of these shares.
(6) Mr. Woodard also has units equivalent to 3,114 common shares in Fund E
of the Voluntary Investment Plan, a 401(k) retirement plan. See page 8
for additional information on Fund E.
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EXECUTIVE COMPENSATION
The following table summarizes the annual and long-term compensation of the
named executive officers for fiscal years 1994, 1993, and 1992. All numbers in
the table are rounded to the nearest dollar or whole share. A Compensation
Committee Report on Executive Compensation begins on page 25.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------- ----------------------- -------
NAME AND RESTRICTED SECURITIES LTIP ALL OTHER
PRINCIPAL SALARY BONUS STOCK UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR ($)(1) ($)(2) ($)(3) OPTIONS(#) ($)(4) ($)(5)
--------- ---- -------- -------- -------- ---------- ------- ------------
Frank Shrontz 1994 $844,828 $600,000 $149,194 31,875 $74,959
Chairman of the 1993 796,935 624,000 170,233 231,875 $218,426 66,669
Board & CEO 1992 821,361 554,000 184,031 31,875 185,000 59,511
Douglas P. Beighle 1994 356,215 164,000 40,780 12,750 30,596
Senior Vice 1993 338,220 174,400 60,345 12,750 81,156 27,181
President 1992 324,868 158,650 64,594 12,750 69,930 23,220
Philip M. Condit 1994 499,714 292,000 72,608 21,250 40,514
President 1993 464,063 312,000 97,595 147,750 79,765 35,782
1992 341,534 238,000 63,375 12,750 68,450 23,515
Boyd E. Givan 1994 372,874 172,000 42,769 57,750 31,102
Senior Vice President 1993 342,625 178,950 60,718 12,750 76,519 27,064
& CFO 1992 298,008 153,900 62,563 12,750 64,010 21,400
C. Gerald King 1994 333,143 168,000 41,774 57,750 27,316
Senior Vice President- 1993 297,319 172,100 57,738 12,750 73,736 23,303
Pres., Defense & Space 1992(6)
Group
Ronald B. Woodard 1994 316,476 148,000 36,801 57,750 22,592
Senior Vice President- 1993 213,410 130,200 49,543 12,750 38,955 11,110
Pres., Commercial 1992(6)
Airplane Group
(1) The specific amounts shown here (the amounts of salary reported to the
IRS as taxable income) reflect the fact that one more payday fell in
1992 than in 1993 or 1994.
(2) Incentive compensation is based on performance in the year shown but
determined and paid the following year.
(3) The amount reported for each officer for 1993 and 1992 is the number
of executive investment performance shares credited to that officer
under the Company's Long-Term Incentive Program, multiplied by the
closing market price of Boeing common stock as reported in The Wall
Street Journal for the New York Stock Exchange - Composite
Transactions on the date of the award. The amount
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reported for each officer for 1994 is the number of Boeing Stock Units
("BSUs") awarded on February 27, 1995, in lieu of 20% of the 1994
annual cash incentive award, multiplied by the closing market price of
Boeing common stock on that date.
Performance shares earn dividend equivalents and interest on dividend
equivalents, payable after four years, when each performance share is
converted into one share of Boeing stock. BSUs earn dividends, which
are reinvested in BSUs each quarter. BSUs vest and are payable three
years after the award. The officer may choose to receive for each BSU
one share of Boeing stock or cash equal to the Fair Market Value of
one share at the time of vesting.
The following table shows (a) the total number of performance shares
credited to each of the named executive officers, (b) the value of
those performance shares, based on the closing market price of Boeing
stock on December 30, 1994, (c) the total number of BSUs credited to
each of the named executive officers, and (d) the value of those BSUs,
based on the closing market price of Boeing common stock on February
27, 1995, the date on which the BSUs were awarded.
NUMBER OF 12/30/94 VALUE
PERFORMANCE OF PERFORMANCE NUMBER 2/27/95 VALUE
SHARES SHARES OF BSUs OF BSUs
----------- -------------- ------- -------------
Frank Shrontz 26,740 $1,256,780 3,226 $149,194
Douglas P. Beighle 9,820 461,540 882 40,780
Philip M. Condit 10,660 501,020 1,570 72,608
Boyd E. Givan 9,310 437,570 925 42,769
C. Gerald King 7,740 363,780 903 41,774
Ronald B. Woodard 3,700 173,900 796 36,801
BSUs and the Long-Term Incentive Program are also described in the
Compensation Committee Report on Executive Compensation, at pages 26
and 27, respectively.
(4) The amount reported for each officer on the line for 1992 reflects the
award of performance-based performance shares (under the Long-Term
Incentive Program) by the Compensation Committee in 1993, for
performance in the three-year period ended December 31, 1992. The
amount reported for each officer on the line for 1993 reflects the
award of performance-based performance shares by the Compensation
Committee in 1994, for performance in the three-year period ended
December 31, 1993. The amount shown in each year is equal to the
number of performance-based performance shares awarded multiplied by
the closing market price of Boeing common stock on the date of grant.
The Compensation Committee is expected to determine in August 1995 any
awards of performance-based performance shares with respect to the
three-year period ended December 31, 1994.
(5) Amounts of "All Other Compensation" are the sum of the value of (a)
dividend equivalents and interest on dividend equivalents on
performance shares under the Long-Term Incentive Program and (b)
Company contributions to the Company's Financial Security Plan,
Supplemental Benefit Plan, and Voluntary Investment Plan. The amounts
described in (a) and (b) above, for the named executive officers, are
as follows for 1994:
(a) (b)
------- --------
Frank Shrontz $25,840 $49,119
Douglas P. Beighle 9,489 21,107
Philip M. Condit 10,468 30,046
Boyd E. Givan 9,003 22,099
C. Gerald King 7,572 19,743
Ronald B. Woodard 3,803 18,789
(6) Mr. King and Mr. Woodard did not become members of the group of
executive officers whose compensation is reportable in this table
until 1993.
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OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------
PERCENT
NUMBER OF OF TOTAL POTENTIAL REALIZABLE VALUE
SECURITIES OPTIONS AT ASSUMED RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE OR APPRECIATION FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------------------------
NAME GRANTED(#) FISCAL YEAR ($/Sh) DATE 0% ($) 5% ($) 10% ($)
---- ---------- ------------ ----------- ---------- ------ --------------- ---------------
F. Shrontz 31,875(1) 1.43 $47.2500 2/29/04 $0 $ 947,174 $ 2,400,326
D.P. Beighle 12,750(1) .57 47.2500 2/29/04 0 378,870 960,130
P.M. Condit 21,250(1) .96 47.2500 2/29/04 0 631,450 1,600,217
B.E. Givan 12,750(1) .57 47.2500 2/29/04 0 378,870 960,130
45,000(2) 2.02 47.2500 12/13/98 0 0 1,230,773
C.G. King 12,750(1) .57 47.2500 2/29/04 0 378,870 960,130
45,000(2) 2.02 47.2500 12/13/98 0 0 1,230,773
R.B. Woodard 12,750(1) .57 47.2500 2/29/04 0 378,870 960,130
45,000(2) 2.02 47.2500 12/13/98 0 0 1,230,773
All optionees 0 62,000,000 161,000,000
All shareholders(4) 0 10,114,000,000 25,630,000,000
Gain of all optionees as % of gain of all shareholders 0 0.61% 0.63%
(1) All options listed were granted pursuant to the 1993 Incentive Stock
Plan for Employees. The per share exercise price is the Fair Market
Value of Boeing common stock (as defined on page 15) on the date of
grant, and the term of each option is ten years, subject to earlier
termination in the event of termination of employment. The options
vest after one year's employment from the date of grant. As to each
grant, 40% becomes exercisable after one year from the date of grant,
an additional 30% after three years, and the remaining 30% after five
years. The exercise price may be paid by cash or by delivery of shares
already owned. The schedule on which options become exercisable is
subject to acceleration for retirement, death, or disability after
vesting.
(2) The per share exercise price of these supplemental stock option grants
to Mr. Givan, Mr. King and Mr. Woodard is the Fair Market Value of
Boeing common stock on the date of grant, and the term of each option
is four years and 9-1/2 months. The options vest after one year's
employment from the date of grant. They are not exercisable until the
closing price of Boeing common stock, as reported in The Wall Street
Journal for the New York Stock Exchange - Composite Transactions,
averages or exceeds specified prices for 20 consecutive trading days.
At $64, 50% of each option becomes exercisable, at $67, an additional
25% of each option becomes exercisable, and at $70, the remaining 25%
becomes exercisable. These options were also granted pursuant to the
1993 Incentive Stock Plan for Employees.
(3) Potential realizable values are based on assumed appreciation rates
specified by the Securities and Exchange Commission. These increases
in value are based on speculative assumptions and are not intended to
forecast possible future appreciation, if any, of the Company's stock
price. For options expiring on December 13, 1998, assuming 0%, 5%, and
10% annual rates of stock price appreciation, the market price per
share at expiration would be $47.2500, $59.6944, and $74.6005,
respectively. For options expiring on February 29, 2004, assuming the
same rates of appreciation, the market price per share at expiration
would be $47.2500, $76.9653, and $122.5543, respectively.
(4) Each amount represents the increase in total market value of
outstanding Boeing common stock consistent with the stock price
appreciation assumptions for the grants dated February 27, 1994, and
expiring on February 29, 2004. As of February 27, 1994, there were
340,356,167 shares of common stock outstanding.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
NUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED UNEXERCISED OPTIONS/SARs IN-THE-MONEY OPTIONS/SARs
ON VALUE AT FISCAL YEAR-END(#)(2) AT FISCAL YEAR-END ($)(3)
EXERCISE REALIZED ----------------------------- ------------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
Frank Shrontz 35,086 $877,298 404,963 295,438 $7,696,739 $1,590,844
Douglas P. Beighle 10,069 210,852 122,689 37,275 2,165,132 122,906
Philip M. Condit 30,773 498,667 35,725 176,775 166,000 994,406
Boyd E. Givan 6,050 136,060 67,469 82,275 881,093 122,906
C. Gerald King 3,500 88,010 64,337 78,563 1,058,091 116,044
Ronald B. Woodard 0 0 18,200 68,700 170,531 58,022
(1) The value realized is the difference between the Fair Market Value of
the underlying stock at the time of exercise and the exercise price.
(2) The terms of the stock option grants, including the schedule on which
they become exercisable, are stated in footnotes (1) and (2) to Option
Grants in Last Fiscal Year, on page 22.
(3) Amounts are based on the Fair Market Value of Boeing common stock on
December 30, 1994, which was $46.9375. There is no guarantee that if
and when these options are exercised they will have this value.
PENSION PLAN TABLE
The following table shows the estimated annual benefits payable to an employee,
assuming retirement on January 1, 1995, at age 65 after selected periods of
service, including amounts to be paid pursuant to the Employee Retirement Plan,
the Supplemental Benefit Plan, and the Supplemental Retirement Plan, based on
straight life annuity amounts. The plans also permit selection of a joint and
survivor annuity with reductions in the benefits shown. The benefits shown in
the table are not subject to any deduction for Social Security or other offset
amounts.
YEARS OF CREDITED SERVICE(1)
REMUNERATION(2) 15 20 25 30 35 40
- --------------- -------- -------- -------- -------- -------- ----------
$ 300,000 $ 65,700 $ 87,600 $109,500 $131,400 $153,200 $ 175,100
500,000 110,700 147,600 184,500 221,400 258,200 295,100
700,000 155,700 207,600 259,500 311,400 363,200 415,100
900,000 200,700 267,600 334,500 401,400 468,200 535,100
1,100,000 245,700 327,600 409,500 491,400 573,200 655,100
1,300,000 290,700 387,600 484,500 581,400 678,200 775,100
1,500,000 335,700 447,600 559,500 671,400 783,200 895,100
1,700,000 380,700 507,600 634,500 761,400 888,200 1,015,100
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(1) For pension plan purposes, "credited" service begins after one year of
employment with the Company. Credit for the first year is made up
during the 20th, 21st, and 22nd years of employment. The named
executive officers have the following years of credited service:
Frank Shrontz 36.5
Douglas P. Beighle 13.8
Philip M. Condit 29.5
Boyd E. Givan 28.9
C. Gerald King 36.5
Ronald B. Woodard 28.4
(2) Pension benefits are based on earnings in the last ten years of
employment, which equal (a) the average annual salary for the highest
consecutive 60 months, plus (b) the average annual incentive
compensation for the five highest years. The total final annual
averages for the named executive officers are currently as follows:
Frank Shrontz $1,408,400
Douglas P. Beighle 505,383
Philip M. Condit 640,000
Boyd E. Givan 472,950
C. Gerald King 420,167
Ronald B. Woodard 317,150
The Company has entered into an agreement with Mr. Beighle whereby his
retirement benefits at age 65 will be supplemented by an amount which,
when added to his aggregate benefits under the Employee Retirement
Plan, the Supplemental Retirement Plan, and the Supplemental Benefit
Plan, will yield 30% of his total final average annual compensation,
as determined under those plans. If Mr. Beighle retired at age 65, and
his total final average compensation under the plans were the amount
shown above, he would receive approximately $30,662 per year under his
agreement. The benefit would be lower for retirement prior to age 65.
Amounts shown for 1992 and 1993 in the Bonus column of the Summary
Compensation Table on page 20 are net of the 20% reduction for
participants in the Long-Term Incentive Program. Amounts shown for
1994 in the Bonus column are net of the 20% of the incentive award
that was converted into Boeing Stock Units. Compensation covered under
the plans referred to above (the Employee Retirement Plan, the
Supplemental Retirement Plan, and the Supplemental Benefit Plan) does
not take into account such 20% reduction.
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COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors establishes and
administers the Company's executive compensation programs. The goals of the
Company's integrated executive compensation programs are to:
1. Align executive compensation with shareholder interests;
2. Attract, retain, and motivate a highly competent executive team;
3. Link pay to individual, operating group, and Company performance; and
4. Achieve a balance between short-term and long-term results.
The full Board of Directors reviews the Committee's recommendations and
approves the salaries of all elected officers, including the executive officers
named in the Summary Compensation Table on page 20. The Committee is
responsible for all other elements of executive compensation, including annual
incentive awards, stock options, and the Long-Term Incentive Program for key
executives.
During 1994, the Committee sponsored a comprehensive study of the Company's
executive compensation programs and revised several components for
implementation in 1995. As a result, the number of executive pay grades was
reduced, and executive investments under the Long-Term Incentive Program were
discontinued and replaced with more competitive stock option grant guidelines.
In addition, a portion of the 1994 annual incentive award for each named
executive officer was converted into Boeing Stock Units, which are restricted
for a three-year vesting period.
Boeing executive officers are assigned to pay grades with established salary
ranges, annual incentive award target percentages, and stock option grant
guidelines. Assignment to a pay grade is determined by comparing individual
responsibilities with industry survey data and internal executive job
relationships. It is the Committee's objective to maintain a competitive
compensation structure for Boeing executives.
Boeing executive compensation programs are designed to provide awards based on
individual, operating group, and overall Company performance measures. To the
extent that there is no adverse effect on this performance-related approach or
on the Company's ability to provide competitive compensation, it is the
Committee's policy to minimize executive compensation expense that is
non-deductible by the Company for tax purposes.
SALARIES
The Committee annually reviews the salary levels of executive officers,
utilizing data provided by an outside consulting firm, and comparing Boeing
salaries to those for comparable jobs in major aerospace and large industrial
corporations. These companies were selected on the basis of their comparable
size and operating performance, and include approximately half of the aerospace
and defense companies in the Standard & Poor's Aerospace Index, used in the
performance
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comparison data on page 29. Boeing executive officer salary levels are
targeted for the median position of this benchmark company group.
Executive officer salary adjustments are determined by a subjective evaluation,
based on sustained performance, and comparisons to peers inside and outside the
Company. Survey data indicate that 1994 base salaries of the named executive
officers, including Mr. Shrontz, are on average slightly below the median of
the benchmark companies.
ANNUAL INCENTIVE AWARDS
Annual incentive awards are designed to focus management attention on Company
performance. Each pay grade has an assigned incentive award percentage (which
is a percentage of annual salary) that provides an incentive opportunity based
on Company, operating group, and individual performance. The 1994 incentive
award percentages assigned to the named executive officers range from 45% to
60% of salary. The annual incentive award an executive officer is eligible to
receive can range from zero to two times the incentive award percentage
assigned to the individual's pay grade.
Company performance is evaluated based on the achievement of operating group
goals, as well as progress toward specific long-term goals of quality,
profitability, and sales growth. Operating group performance is evaluated
based primarily on operating plan measures of customer, employee, and community
satisfaction; productivity, cost performance, and net profit contribution; and
market share or new product orders.
At the end of the year, the Chief Executive Officer and the President evaluate
performance toward Company and operating group goals. The evaluation takes into
consideration a comparison to the performance of peer and premier companies and
the overall industry environment. The resulting performance evaluation produces
a percentage factor that may increase or decrease the target incentive awards
for executive officers. For 1994, the assessment was that Company performed
well in a very difficult market environment. Evaluation of Company
performance, coupled with a subjective evaluation of individual performance,
was the basis for the actual incentive awards approved by the Committee. Awards
for the named executive officers other than Mr. Shrontz averaged 132% of their
assigned percentages and are shown in the Bonus column of the Summary
Compensation Table on page 20.
Mr. Shrontz's annual incentive award was based on his corporate leadership and
personal contributions to the Company's operating performance. The Company
continued to make progress toward productivity goals, maintained a high share
of the commercial airplane market, and exceeded product order objectives in the
defense and space business. The award made by the Committee for Mr. Shrontz's
outstanding leadership over all operations is shown in the Bonus column of the
Summary Compensation Table on page 20.
BOEING STOCK UNITS
The 1994 annual incentive award for each of the named executive officers was
paid out in the following manner: 80% in cash and 20% converted into Boeing
Stock Units ("BSUs"). The
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number of BSUs awarded was determined by crediting the executive with the
number of shares that could be purchased with 20% of the incentive award, based
on the Fair Market Value of Boeing stock (as defined on page 15) on the day of
the award. The BSUs vest three years after the award and the executive may
choose to have them be paid out in either shares of Boeing stock or cash. The
value of the BSUs at the time of grant to Mr. Shrontz and the other named
executive officers is shown in the Restricted Stock column of the Summary
Compensation Table on page 20.
STOCK OPTIONS
Stock options are granted to provide a long-term incentive opportunity that is
directly linked to shareholder value. To recognize the different levels of
responsibilities within the Company, the number of stock options an executive
officer is granted is determined by the officer's pay grade. However, all
stock option grants are subject to discretionary adjustments based on
individual performance or for purposes of retention.
Stock options are granted with an exercise price equal to the Fair Market Value
of Boeing common stock on the date of grant, and become exercisable in 40%,
30%, and 30% increments after one, three, and five years, respectively. To
encourage stock retention, and consistent with past practice, stock options are
granted as incentive stock options to the extent permitted under the Internal
Revenue Code. Mr. Shrontz's stock option grant in 1994 was consistent with
these guidelines.
To provide an additional incentive to increase shareholder value over the next
five years, the Committee awarded to Messrs. Givan, King, and Woodard a
one-time supplemental stock option grant similar to the grants awarded to
Messrs. Shrontz and Condit in 1993. The supplemental grants, which terminate on
December 13, 1998, also have an exercise price equal to the Fair Market Value
of Boeing common stock on the date of the grant, but do not become exercisable,
and therefore have no exercise value, until the market price reaches $64 per
share. The options become exercisable only after the closing price of Boeing
common stock averages or exceeds specified prices for 20 consecutive trading
days. At $64 per share, 50% of the options become exercisable, at $67 an
additional 25% become exercisable, and at $70 the remaining 25% become
exercisable. Due to the unusual features of this supplemental grant, previous
grants to these officers were not considered in making the awards.
In approving annual and supplemental stock option grants, the Committee did not
consider the number of outstanding stock options held by an individual.
LONG-TERM INCENTIVE PROGRAM
Prior to 1994, certain senior executives were chosen by the Committee to
participate in the Long-Term Incentive Program. Under the Program, executive
investment performance shares were allocated in the first year of a seven-year
performance cycle. In the third year of the cycle, the Committee, in its
discretion, could award additional performance-based performance shares in an
amount from 0% to 200% of the number of each participant's executive investment
performance shares for the cycle, depending on the Committee's assessment of
management's achievement of
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certain performance targets. Each performance share is converted into one
share of Boeing stock four years after it is awarded and earns dividend
equivalents and interest on dividend equivalents, which are payable when the
performance share is converted into stock.
Further executive investments under the Long-Term Incentive Program were
discontinued in 1994, although the Committee will continue to consider awards
of performance-based performance shares in respect of prior years' executive
investments. The size of the performance-based awards will be based on an
assessment of overall performance against the Company's long-range strategic
plan for that performance cycle. The performance measures used are return on
equity, real sales growth, and quality improvement as measured by customer,
employee, and community satisfaction, as well as consideration of total
shareholder return. Although the Committee does not assign relative weights to
these factors, each factor has specific targets and measures.
In evaluating performance for the three-year period that ended December 31,
1993, the Committee concluded that the Company did not achieve several of the
performance measurement goals set in 1991. However, management implemented
important process improvements to increase quality and improve the family of
commercial aircraft in the product line which, over time, should lead to an
increase in shareholder value. As a result, the Committee, based on its
subjective assessment of Company performance, awarded performance-based shares
at 1.15 times the number of each executive investment performance share award
at the beginning of the cycle in 1991. The percentage awarded is the same for
all participants.
This formula, applied to Mr. Shrontz's 1991 executive investment performance
shares, produced an award to him of 4,710 performance-based performance shares.
The value at the time of grant of the performance-based performance shares
awarded to Mr. Shrontz and the other named executive officers is shown on the
line for 1993 in the LTIP Payout column of the Summary Compensation Table on
page 20.
COMPENSATION COMMITTEE:
George M. Keller, Chairman
Harold J. Haynes
Donald E. Petersen
Charles M. Pigott
George H. Weyerhaeuser
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SHAREHOLDER RETURN ON PERFORMANCE GRAPHS
The following graphs show changes in the value of $100 invested at year-end
1989 and 1984, respectively, in (1) the Company's common stock, (2) Standard &
Poor's 500 Stock Index, and (3) Standard & Poor's Aerospace Index. The
investment values are based on share price appreciation plus dividends paid in
cash, assuming that dividends were reinvested on the date on which they were
paid.
FIVE-YEAR CUMULATIVE TOTAL RETURNS GRAPH
[GRAPH]
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Boeing 100 117 126 108 120 133
S&P 500 100 97 126 135 148 150
S&P Aerospace 100 104 124 130 169 182
TEN-YEAR CUMULATIVE TOTAL RETURNS GRAPH
[GRAPH]
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Boeing 100 142 141 106 178 267 312 336 289 320 355
S&P 500 100 132 156 164 191 251 243 316 339 372 376
S&P Aerospace 100 122 133 109 137 176 184 219 230 298 322
The Board of Directors and its Compensation Committee recognize that the market
price of stock is influenced by many factors, only one of which is issuer
performance. The Company's stock price is significantly influenced by cyclical
fluctuations in the commercial jet transport global market environment, and to
a lesser degree, changes in national defense priorities. The stock price
performance shown in the graphs is not necessarily indicative of future price
performance.
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27
ANNUAL REPORT AND FORM 10-K
The 1994 Annual Report of the Company was mailed to shareholders together with
this proxy statement. UPON REQUEST, THE COMPANY WILL FURNISH WITHOUT CHARGE A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1994, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES. The Form 10-K
has been filed with the SEC. It may be obtained by writing to the Data Shipping
Department, The Boeing Company, P.O. Box 3707, Mail Stop 3T-33, Seattle,
Washington 98124-2207, or calling (206) 393-4964.
SHAREHOLDER PROPOSALS FOR 1996
The Company's next annual meeting will be held on April 29, 1996. An eligible
shareholder who wants to have a qualified proposal considered for inclusion in
the proxy statement for that meeting must notify the Secretary of the Company.
The proposal must be received at the Company's executive offices no later than
November 16, 1995. A shareholder must have been a registered or beneficial
owner of at least one percent of the Company's outstanding common stock or
stock with a market value of $1,000 for at least one year prior to submitting
the proposal, and the shareholder must continue to own such stock through the
date on which the meeting is held.
The Company's By-Laws outline procedures, including minimum notice provisions,
for shareholder nomination of directors and other shareholder business to be
brought before the annual meeting. A copy of the pertinent By-Law provisions is
available on request to Heather Howard, Corporate Secretary, The Boeing
Company, P.O. Box 3707, Mail Stop 10-13, Seattle, Washington 98124-2207.
THE BOEING COMPANY
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SOLICITED BY THE BOARD OF DIRECTORS
THE BOEING COMPANY
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1995
The undersigned hereby appoints Philip M. Condit, George M. Keller, and
George H. Weyerhaeuser (the "Proxy Committee"), and each or any of them, with
power of substitution, proxies for the undersigned and authorizes them to
represent and vote all of the shares of stock of the Company which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders to be
held on April 24, 1995 (the "Meeting"), and at any adjournment thereof, as
indicated on the reverse side of this card with respect to the election of
directors, and with discretionary authority as to any other matters that may
properly come before the Meeting, in accordance with and as described in the
Notice and Proxy Statement for the Meeting.
If there are shares of stock allocated to the undersigned in Fund E of
The Boeing Company Voluntary Investment Plan for Salaried Employees or the
Voluntary Investment Plan for Hourly Employees, the undersigned hereby
instructs the Trustee to vote all of such shares at the Meeting and any
adjournment thereof, as indicated on the reverse side of this card with respect
to the election of directors, and authorizes the Trustee to vote in its
judgment or to empower the Proxy Committee to vote in the Proxy Committee's
judgment, on such other business as may properly come before the Meeting and
any adjournment thereof.
If no direction is given, this proxy will be voted FOR each of the
nominees for election as directors.
IMPORTANT: TO BE SIGNED AND DATED ON THE REVERSE SIDE.
- --------------------------------------------------------
(X) Please mark votes as in this example.
The Board of Directors recommends a vote FOR Comments about the proxy materials or other aspects of the business
each of the following nominees. are welcome. Although not answered on an individual basis, comments
are helpful in assessing shareholder sentiment.
1. Election of Directors: John E. Bryson, Stanley Hiller, Jr.,
Charles M. Pigott, Rozanne L. Ridgway, and Frank Shrontz.
( ) FOR ( ) WITHHELD
( ) ------------------------ Mark here for Mark here for
For all nominees, except as noted above comments ( ) address change ( )
and note above and note at left
Please sign exactly as your name appears. If acting as attorney,
executor, trustee, or in another representative capacity, sign
name and title.
Signature Date
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Signature Date
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