<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
THE BOEING COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 91-0425694
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
7755 EAST MARGINAL WAY SOUTH
SEATTLE, WASHINGTON 98108
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
THE BOEING COMPANY
VOLUNTARY INVESTMENT PLAN
(FULL TITLE OF THE PLAN)
HEATHER HOWARD
CORPORATE SECRETARY AND CORPORATE COUNSEL
THE BOEING COMPANY
7755 EAST MARGINAL WAY SOUTH
SEATTLE, WASHINGTON 98108
(206) 655-7531
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPY TO:
J. SUE MORGAN
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES NUMBER TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED(1)(2) OFFERING PRICE PER SHARE(3) AGGREGATE OFFERING PRICE(3) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR VALUE
$5.00 PER SHARE 5,000,000 $78.25 $391,250,000 $134,914
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
(1) Pursuant to Instruction E to Form S-8, this registration statement
carries forward the registration of an aggregate of $171,336,977 in
value of the registrant's Common Stock from the registrant's
Registration Statement on Form S-8 (Registration No. 33-43854) filed
with the Commission on November 1, 1991 (the "1991 Registration
Statement") for the registrant's Voluntary Investment Plan for Salaried
Employees, which was merged into the benefit plan described herein
effective February 1, 1996. Based on the Proposed Maximum Offering
Price Per Share (see footnote 3) of $78.25, the registration of
2,189,609 shares is carried forward from the 1991 Registration
Statement.
(2) Includes an indeterminate number of additional shares that may be
issued to adjust the number of shares issued pursuant to such employee
benefit plan as the result of any future stock split, stock dividend or
similar adjustment of the registrant's outstanding Common Stock.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The
price per share is estimated to be $78.25, based on the average of the
high sales price ($80.375) and the low sales price ($76.125) for the
registrant's Common Stock as reported for the New York Stock Exchange
Composite Transactions on May 2, 1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
registration statement:
(a) The registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, filed with the Securities and Exchange
Commission (the "Commission") on March 13, 1996, which contains audited
financial statements for the most recent fiscal year for which such statements
have been filed.
(b) All other reports filed by the registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the Annual Report
on Form 10-K referred to in (a) above.
(c) The description of the registrant's Common Stock
contained in the registration statement on Form 10 (Registration No. 1-422),
filed with the Commission on April 20, 1935, under Section 12(g) of the Exchange
Act, including any amendments or reports filed for the purpose of updating such
description.
All documents filed by the registrant pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof and prior to the filing of
a post-effective amendment which indicates that the securities offered hereby
have been sold or which deregisters the securities covered hereby then remaining
unsold shall also be deemed to be incorporated by reference into this
registration statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VII, Section 4 of the registrant's By-Laws provides for
indemnification of the registrant's directors and officers to the full extent
permitted under Delaware law.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation in a derivative action), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action, had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions, and the
statute requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation. The
statute provides that it is not exclusive of other indemnification that may be
granted by a corporation's charter, by-laws, disinterested director vote,
stockholder vote, agreement or otherwise.
Article Twelfth of the registrant's Restated Certificate of
Incorporation provides that, to the full extent that Delaware law permits the
limitation or elimination of the liability of directors, a director of the
registrant will not be liable to the registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit.
Officers and directors of the registrant are covered by insurance that,
with certain exceptions and within certain limitations, indemnifies them against
losses and liabilities arising from an alleged "wrongful act," including an
alleged error or misstatement, misleading statement, wrong act or omission,
neglect or breach of duty.
II-1
<PAGE> 3
Article Sixth of the registrant's Restated Certificate of Incorporation
provides that the personal liability of each director of the registrant to the
registrant or to its stockholders for monetary damages for breach of fiduciary
duty as a director is limited to the fullest extent permitted by the Delaware
General Corporation Law.
The registrant also maintains an insurance policy insuring its
directors and officers against liability for certain acts or omissions while
acting in their official capacities.
Directors and officers of the registrant are covered by insurance that
(with certain exceptions and within certain limitations) indemnifies them
against losses and liabilities arising from an alleged "wrongful act," including
an alleged error or misstatement or misleading statement, or wrongful act or
omission, or neglect or breach of duty.
ITEM 8. EXHIBITS
Exhibit
Number Description
- ------------ ------------------------------------------------
23.1 Consent of Deloitte & Touche LLP (see page II-7)
24.1 Power of Attorney (see signature page)
99.1 The Boeing Company Voluntary Investment Plan
ITEM 9. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to
(a) include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(b) reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in this registration
statement; and
(c) include any material information with respect to the
plan of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
B. 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 benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this 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.
II-2
<PAGE> 4
C. 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 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 the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
D. The undersigned registrant hereby undertakes to submit the Plan and any
amendment thereto to the Internal Revenue Service (the "IRS") in a timely manner
and will make all changes required by the IRS to qualify the Plan.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington, on April 29, 1996.
THE BOEING COMPANY
By /s/ Philip M. Condit
-------------------------------------
Philip M. Condit
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Philip M. Condit, Douglas P. Beighle and B.E. Givan, or any of them, his
attorneys-in-fact, with the power of substitution, for him in any and all
capacities, to sign any amendments to this registration statement, and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact, or their substitute or substitutes, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on April 29, 1996.
SIGNATURE TITLE
--------- -----
/s/ Philip M. Condit President, Chief Executive Officer
--------------------------- (Principal Executive Officer) and Director
Philip M. Condit
/s/ B.E. Givan Senior Vice President and Chief Financial
--------------------------- Officer (Principal Financial Officer)
B.E. Givan
/s/ Gary W. Beil Vice President and Controller (Principal
--------------------------- Accounting Officer)
Gary W. Beil
/s/ Frank Shrontz
--------------------------- Chairman of the Board
Frank Shrontz
--------------------------- Director
Robert A. Beck
/s/ John E. Bryson
--------------------------- Director
John E. Bryson
/s/ John B. Fery
--------------------------- Director
John B. Fery
/s/ Paul E. Gray
--------------------------- Director
Paul E. Gray
/s/ Harold J. Haynes
--------------------------- Director
Harold J. Haynes
/s/ Stanley Hiller, Jr.
--------------------------- Director
Stanley Hiller, Jr.
/s/ Donald E. Petersen
--------------------------- Director
Donald E. Petersen
II-4
<PAGE> 6
/s/ Charles M. Pigott
--------------------------- Director
Charles M. Pigott
/s/ Franklin D. Raines
--------------------------- Director
Franklin D. Raines
/s/ Rozanne L. Ridgway
--------------------------- Director
Rozanne L. Ridgway
/s/ George H. Weyerhaeuser
--------------------------- Director
George H. Weyerhaeuser
II-5
<PAGE> 7
THE PLAN
Pursuant to requirements of the Securities Act of 1933, as amended, the
persons who administer The Boeing Company Voluntary Investment Plan have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Seattle, State of
Washington, on May 3, 1996.
THE BOEING COMPANY
VOLUNTARY INVESTMENT PLAN
By: THE BOEING COMPANY
By: /s/ Boyd E. Givan
--------------------------------------------------
Boyd E. Givan
Senior Vice President and Chief Financial Officer
II-6
<PAGE> 8
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Boeing Company on Form S-8 of our report dated January 25, 1996, on the
consolidated financial statements of The Boeing Company and subsidiaries
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 1995.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Seattle, Washington
April 26, 1996
II-7
<PAGE> 9
INDEX TO EXHIBITS
Exhibit
Number Description
- ------------- ------------------------------------------------
23.1 Consent of Deloitte & Touche LLP (see page II-7)
24.1 Power of Attorney (see signature page)
99.1 The Boeing Company Voluntary Investment Plan
<PAGE> 1
EXHIBIT 99.1
<PAGE> 2
THE BOEING COMPANY
VOLUNTARY INVESTMENT
PLAN
As Amended February 1, 1996
<PAGE> 3
THE BOEING COMPANY
VOLUNTARY INVESTMENT PLAN
TABLE OF CONTENTS
Section
-------
ARTICLE 1 - INTRODUCTION
Purpose................................................ 1.1
Intent................................................. 1.2
Explanation of Plan Design............................. 1.3
ARTICLE 2 - DEFINITIONS
Active Payroll......................................... 2.0
Affiliate.............................................. 2.1
Code................................................... 2.2
Committee.............................................. 2.3
Company................................................ 2.4
Company Account........................................ 2.5
Compensation........................................... 2.6
Contribution Account................................... 2.7
Deferral and Contribution Agreement.................... 2.8
Effective Date......................................... 2.9
Elective Account....................................... 2.10
Elective Contribution.................................. 2.11
Eligible Employee...................................... 2.12
Employee............................................... 2.13
Employee Contribution.................................. 2.14
Entry Date............................................. 2.15
Funds.................................................. 2.16
Highly Compensated Eligible Employee................... 2.17
Insurer................................................ 2.18
Investment Fund........................................ 2.19
Member................................................. 2.20
Member Account......................................... 2.21
Plan................................................... 2.22
Plan Year.............................................. 2.23
Service................................................ 2.24
Total Earnings......................................... 2.25
Trust.................................................. 2.26
Trust Agreement........................................ 2.27
Trustee................................................ 2.28
Unit................................................... 2.29
Valuation Date......................................... 2.30
Vesting Service........................................ 2.31
Voluntary Investment Plan Office....................... 2.32
<PAGE> 4
Section
-------
ARTICLE 3 - EMPLOYEES TO WHOM PLAN APPLIES
Eligible Employee Defined.............................. 3.1
Nonresident Alien...................................... 3.2
Foreign Service Employees.............................. 3.3
ARTICLE 4 - MEMBERSHIP
Member prior to 1-1-96.................................. 4.1
Member after 12-31-95................................... 4.2
Application Procedure................................... 4.3
Length of Membership.................................... 4.4
ARTICLE 5 - CONTRIBUTIONS
Member Contributions.................................... 5.1
Elective Contributions and Employee Contributions....... 5.2
Company Contributions................................... 5.3
ARTICLE 6 - INVESTMENT OF CONTRIBUTIONS
Member Election of Fund................................. 6.1
Change in Election - Contributions...................... 6.2
Change in Election - Accumulated Investments............ 6.3
6.2 and 6.3 are separate elections...................... 6.4
Change and Transfer under prior Plans................... 6.5
Liability for Election.................................. 6.6
Restriction on Frequency................................ 6.7
Continuation of Selection............................... 6.8
ARTICLE 7 - TRUST FUND
Five Funds............................................. 7.1
Fund A - Types of Investments.......................... 7.2.1
Fund B - Types of Investments.......................... 7.2.2
Fund C - Types of Investments.......................... 7.2.3
Fund D - Types of Investments.......................... 7.2.4
Fund E - Types of Investments.......................... 7.2.5
Funding Procedure...................................... 7.3
Annuities for Retired Members.......................... 7.4
Restriction on Investments............................. 7.5
Voting of Fund E Trust Shares.......................... 7.6
Rights Pertaining to a Tender Offer.................... 7.7
<PAGE> 5
Section
-------
ARTICLE 8 - MAINTENANCE OF MEMBERS' ACCOUNTS
Monthly Crediting of Accounts.......................... 8.1
Initial Fund E Unit Value.............................. 8.2
Fund Assets Revalued Monthly........................... 8.3
Calculation/Use of Unit Value.......................... 8.4
Withdrawals............................................ 8.5
Value of Member Account................................ 8.6
Changes to Different Funds............................. 8.7
ARTICLE 9 - BENEFITS
Termination of Service................................. 9.1
Reasons for Termination of Service..................... 9.2
Defines Benefits Available Under 9.2................... 9.3
Other Terminations..................................... 9.4
Benefit Table.......................................... 9.5
Company Account Forfeitures............................ 9.6
Employee Buy-back Provision............................ 9.7
ARTICLE 10 - MANNER OF PAYMENT OF BENEFITS
Election for Payment of Benefits....................... 10.1
Immediate Lump Sum Payment............................. 10.2
Deferred Payment of Benefits........................... 10.3
Optional Payment Form Before Retirement................ 10.4
Death Prior to Payment of Benefits..................... 10.5
Limitations on Payment Date............................ 10.6
ARTICLE 11 - WITHDRAWALS
Member Withdrawal...................................... 11.1
Hardship Withdrawal.................................... 11.2
Penalty Follows Withdrawal............................. 11.3
Company Account - No Withdrawal........................ 11.4
ARTICLE 12 - VOLUNTARY INVESTMENT PLAN COMMITTEE
Responsibilities....................................... 12.1
Committee Members...................................... 12.2
Officers of Committee.................................. 12.3
Transaction of Business................................ 12.4
Membership............................................. 12.5
Establish Rules........................................ 12.6
Rights of Committee.................................... 12.7
Accounts and Reports................................... 12.8
Conflict of Interest................................... 12.9
Limited Liability...................................... 12.10
<PAGE> 6
Section
-------
ARTICLE 13 - LIMITATIONS ON CONTRIBUTIONS
Maximum Additions Each Year............................ 13.1
Definitions of "Additions"............................. 13.2
Remedy for Excess Additions............................ 13.3
Further Limitations.................................... 13.4
Compensation for Purposes of This Article.............. 13.5
ARTICLE 14 - CHANGE OR TERMINATION OF PLAN
Intention of Company................................... 14.1
Limits on Modification or Amendment.................... 14.2
Member's Rights........................................ 14.3
ARTICLE 15 - MERGER
Successor Company...................................... 15.1
Limits on Transfers of Assets.......................... 15.2
ARTICLE 16 - LOANS
Applications........................................... 16.1
Approvals.............................................. 16.2
Disbursements.......................................... 16.3
Term of Loan........................................... 16.4
Interest Rate.......................................... 16.5
Repayment.............................................. 16.6
Late or Missed Repayments.............................. 16.7
Default................................................ 16.8
Foreclosure Upon Default............................... 16.9
Leave of Absence....................................... 16.10
Loan Terms and Conditions.............................. 16.11
Denial of Loan......................................... 16.12
ARTICLE 17 - GENERAL PROVISIONS
Trust Agreement........................................ 17.1
Limitations on Use of Trust Funds...................... 17.2
No Employment Rights Created........................... 17.3
Documents Needed to Pay Benefits....................... 17.4
Mailing Addresses...................................... 17.5
Fiduciaries Actions are Conclusive..................... 17.6
Beneficiaries to be Paid............................... 17.7
Beneficiary Identification in Doubt.................... 17.8
Other Payees........................................... 17.9
Payments to Reemployed Person.......................... 17.10
Conditions of Benefit Payment.......................... 17.11
Use of Proper Forms.................................... 17.12
Masculine and Feminine................................. 17.13
Headings............................................... 17.14
State of Washington Laws............................... 17.15
<PAGE> 7
Section
-------
ARTICLE 18 - MISCELLANEOUS
Qualification.......................................... 18.1
Deductibility.......................................... 18.2
Rollover Distributions................................. 18.3
Rollover Contributions................................. 18.4
Transition............................................. 18.5
ARTICLE 19 - TOP-HEAVY PROVISIONS
Applicability of Section............................... 19.1
Definitions............................................ 19.2
Vesting Schedule....................................... 19.3
Minimum Contribution................................... 19.4
Adjustment to Minimum Contribution..................... 19.5
ARTICLE 20 - VESTING SERVICE
Year of Vesting Service................................ 20.1
Hours of Service....................................... 20.2
Service With An Affiliate of The Company............... 20.3
Break In Service....................................... 20.4
Restoration of Service................................. 20.5
Change in Vesting Schedule............................. 20.6
<PAGE> 8
ARTICLE 1
INTRODUCTION
1.1 It is the purpose of this Plan to encourage and assist Eligible
Employees to adopt a program of investment to provide additional
security for their retirement.
1.2 It is intended that the Plan qualify as a profit sharing plan under the
Internal Revenue Code of 1986 and comply with the Employee Retirement
Income Security Act of 1974 and any amendments to said Code or Act.
1.3 The name of this Plan was originally the Voluntary Investment Plan for
Hourly Employees. Effective February 1, 1996, the Voluntary Investment
Plan for Salaried Employees was merged with this plan, and the Plan
name was changed to the Voluntary Investment Plan.
1 - 1
<PAGE> 9
ARTICLE 2
DEFINITIONS
2.0 "Active Payroll" refers to the status of an Employee who is not on
layoff or leave of absence.
2.1 "Affiliate" shall mean with respect to the Company:
(a) Any other company which is included with a "controlled group of
corporations" as determined under Section 1563 of the Code
without regard to subsections (a)(4) and (e)(3)(C) of said
Section 1563, and
(b) Any other trades or business (whether or not incorporated) which,
based on principles similar to those defining a "controlled group
of corporations" for purposes of (a) above, are under common
control.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Committee" means the Voluntary Investment Plan Committee to which
reference is made in Article 12 hereof.
2.4 "Company" means The Boeing Company and affiliates or subsidiaries of
the Company, provided that the Board of Directors of such affiliate or
subsidiary has adopted the Plan and such adoption has been approved by
the Board of Directors of The Boeing Company or by such corporate
officers as the Board of Directors of The Boeing Company may designate.
2.5 "Company Account" has the meaning specified in 8.1.
2.6 "Compensation" means an Employee's base wage or salary, including shift
differential, if applicable, but shall not include overtime pay,
instructor pay, bonus, per diem, special assignment premium pay,
location allowances, incentive compensation awards or any other
payment. If for the equitable application of the computations required
by the Plan it becomes necessary to convert base wage or salary to an
hourly rate, such adjustment shall be made in accordance with normal
Company payroll procedures. In the case of an individual for whom a
base wage or salary was not established or in effect on any date on
which such wage or salary is pertinent to any computation required
under the Plan, or where, because of any situation regarded by the
Voluntary Investment Plan Committee as abnormal an individual's base
wage or salary in the opinion of the Committee does not properly
reflect his rate of compensation for the equitable application of 5.2,
the Committee shall establish the individual's base wage or salary for
the purposes of the Plan.
Compensation shall not exceed $150,000 for 1994. On January 1 of each
calendar year in which the Secretary of the Treasury prescribes a new
dollar limit, this $150,000 limit will automatically be adjusted to
that new limit. This limit applies to the combined Compensation of a 5%
owner (as defined in Code Section 416(i)(1)(A)(iii)) of the Company, or
one of the 10 Highly Compensated Employees paid the greatest amount of
Total Earnings during the year, and such individual's spouse and any
lineal descendants who are not age 19 before the close of the calendar
year, to the extent required by Code Section 401(a)(17). If the limit
applies to combined Total Earnings, the limit will be
2 - 1
<PAGE> 10
allocated to the affected individuals in proportion to each
individual's Compensation determined prior to the application of the
limit.
2.7 "Contribution Account" has the meaning specified in 8.1.
2.8 "Deferral and Contribution Agreement" means an agreement executed by a
Member whereby the Member agrees that his Compensation shall be reduced
and the foregone amounts contributed by the Company to the Plan on his
behalf, or the Member agrees to make an Employee Contribution.
2.9 "Effective Date" means January 1, 1976. This Plan contains certain
amendments adopted as of February 1, 1996 and is effective that date or
as otherwise stated.
2.10 "Elective Account" has the meaning specified in 8.1.
2.11 "Elective Contribution" means the amount by which a Member's
Compensation is reduced in accordance with such Member's Deferral and
Contribution Agreement.
2.12 "Eligible Employee" has the meaning specified in 3.1.
2.13 "Employee" shall mean any person employed by the Company or an
Affiliate, any person employed by the Company or an Affiliate who is on
layoff or leave of absence and any person who returns to employment
from U.S. military service with full veteran's rights to reemployment
under applicable law shall be deemed to have been on the Active
Payroll. The term Employee shall not include:
(a) A person who serves the Company only as a Director and is not
otherwise on the Active Payroll of the Company; or
(b) A person engaged only in an advisory or consulting capacity on a
retainer or fee basis; or
(c) A person engaged only in a capacity which is determined by the
Committee to be an independent contractor; or
(d) A person who is a leased employee (within the meaning of Code
Section 414(n)) except that a leased employee will be treated as
an employee of the Company to the extent required by law and any
contributions or benefits provided by the leasing organization
which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer.
2.14 "Employee Contribution" has the meaning specified in 5.2.
2.15 Effective February 1, 1996, "Entry Date" shall mean the first day of
each calendar month.
2.16 The terms "Fund," "Fund A," "Fund B," "Fund C," "Fund D," and "Fund E"
have the meanings specified in Article 7.
2.17 "Highly Compensated Eligible Employee" means an Eligible Employee who
is a Highly Compensated Employee. A Highly Compensated Employee means:
(a) Any Employee who performs services for the controlled group
during the determination year and who, during the look-back
year:
2 - 2
<PAGE> 11
(1) received Total Earnings in excess of $75,000 (as adjusted
by the Secretary of the Treasury for the relevant year),
(2) received Total Earnings in excess of $50,000 (as adjusted
by the Secretary of the Treasury for the relevant year)
and was a member of the top-paid group for such year, or
(3) was an officer (within the meaning of Code Section 416(i)
of the controlled group and received Total Earnings
during such year that were greater than 50% of the dollar
limitation in effect under Code Section 415(b)(1)(A).
(b) Any Employee who is both (i) described in 2.17(a) if the term
"determination year" is substituted for the term "look-back
year" and (ii) is one of the 100 Employees who received the most
Total Earnings from the controlled group during the
determination year.
(c) Any Employee who is a 5% owner (as defined in Code Section
416(i)(1)(A)(iii)) of the Company at any time during the
look-back year or the determination year.
(d) Any former Employee who was Highly Compensated Employee for a
separation year (as defined in Treasury Regulation section
1.414(q)-1T) or for any determination year ending on or after
the Employee attains age 55, as provided by Code Section
414(q)(9) and the regulations thereunder.
(e) If no officer has satisfied the compensation requirement of
2.17(a)(3) during either a determination year or look-back year,
the highest paid officer for such determination year shall be
treated as a Highly Compensated Eligible Employee if such
officer is an Eligible Employee. No more than 50 Employees (or
if less, the greater of three Employees or 10% of the Employees)
shall be treated as officers.
(f) For purposes of this section the following definitions apply.
The determination year is the Plan Year. The look-back year is
the 12-month period immediately preceding the determination
year. The top-paid group is the top 20% of Employees ranked on
the basis of compensation received during the year and shall be
determined in accordance with Code Section 414(q)(8) and the
regulations thereunder.
(g) An Employee who is a 5% owner or one of the 10 highly
compensated employees in the controlled group paid the greatest
amount of Total Earnings during the calendar year and such
Employee's spouse, lineal ascendants or descendants and the
spouses of such lineal ascendants or descendants shall be
treated as a single Employee for purposes of this section.
2.18 "Insurer" means Aetna Life Insurance Company or such other insurance
company or companies as may from time to time be designated by the
Committee.
2.19 "Investment Fund" has the meaning specified in Article 7.
2.20 "Member" has the meaning specified in Article 4.
2.21 "Member Account" has the meaning specified in 8.1.
2.22 "Plan" meant the Voluntary Investment Plan for Hourly Employees
described in this instrument with any amendments. Effective February 1,
1996, the Voluntary Investment
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<PAGE> 12
Plan for Salaried Employees was merged with this Plan and the combined
Plans restated as the Voluntary Investment Plan.
2.23 "Plan Year" means the calendar year. Prior to January 1, 1993, the term
Plan Year meant a fiscal year ending September 30. The period October
1, 1992 through December 31, 1992 constitutes a short Plan Year.
2.24 "Service" means employment, either before or after the effective date
of the Plan, as an Employee (whether or not an Eligible Employee) of
the Company, and shall include such employment with an affiliate or
subsidiary of the Company. Unpaid periods on leave of absence or layoff
and transfers of employment without interruption between The Boeing
Company or any affiliate or subsidiary of the Company shall not be
deemed to terminate employment.
2.25 "Total Earnings" means compensation (determined without regard to 2.6)
received by the Employee from the Company, other than compensation in
the form of qualified or previously qualified deferred compensation,
that is currently includible in gross income for income tax purposes.
Total Earnings shall not exceed $150,000 for 1994. On January 1 of each
calendar year in which the Secretary of the Treasury prescribes a new
dollar limit, this $150,000 limit will automatically be adjusted to
that new limit. This limit applies to the combined Total Earnings of a
5% owner (as defined in Code Section 416(i)(1)(A)(iii)) of the Company,
or one of the 10 Highly Compensated Employees paid the greatest amount
of Total Earnings during the calendar year, and such individual's
spouse and any lineal descendants who are not age 19 before the close
of the calendar year, to the extent required by Code Section
410(a)(17). If the limit applies to combined Total Earnings, the limit
will be allocated to the affected individuals in proportion to each
individual's Total Earnings determined prior to the application of the
limit.
2.26 "Trust" means the Trust or Trusts established by the Trust Agreement.
2.27 "Trust Agreement" means the instrument or instruments executed between
the Company and the Trustee named in it, which provides for the
receiving, holding, investing and disposing of the Trust Fund.
2.28 "Trustee" means the Trustee or Trustees designated in the Trust
Agreement, and any successor Trustee.
2.29 "Unit" means the applicable participation unit under the Trust Fund
used to measure the Members' proportionate interest in the Trust Fund
as provided in Article 8.
2.30 "Valuation Date" means the last day of each month.
2.31 "Vesting Service" shall mean the period considered in determining
whether a Member has a vested interest under Article 20, and the extent
of such interest.
2.32 "Voluntary Investment Plan Office" shall mean the office or offices
maintained by the Company for the administration of the Plan.
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<PAGE> 13
ARTICLE 3
EMPLOYEES TO WHOM PLAN APPLIES
3.1 On or after the Effective Date of the Plan, an Employee who is within
any group of employees of the Company shall be an Eligible Employee for
purposes of the Plan during:
(a) The period or periods that he is not within a unit of Employees
covered by a collective bargaining agreement between the Company
and a collective bargaining representative certified under the
Labor Management Relations Act, in the negotiation of which
agreement retirement benefits were the subject of good faith
bargaining, or
(b) The period or periods that he is within such a collective
bargaining unit to the extent that such period or periods are
included within the period of time for which the Plan is
effective as to such unit in accordance with the terms of the
collective bargaining agreement between the Company and the
collective bargaining representative certified under the Act.
The term "Eligible Employee" does not include a leased employee as
defined in Code Section 414(n).
3.2 An Employee of an affiliate or subsidiary of the Company which has
adopted the Plan as provided in 2.4 who is a nonresident alien and who
receives no earned income from such affiliate or subsidiary for
services performed in the United States shall not be an Eligible
Employee unless the Plan has been made applicable to him by such
affiliate or subsidiary.
3.3 An Employee of an affiliate or subsidiary of the Company which has
adopted the Plan as provided in 2.4 who is a citizen or national of the
United States and (a) who, at the time of his employment by the
affiliate or subsidiary, was a bona fide resident of a foreign country,
or (b) who is hired directly by a foreign branch of such affiliate or
subsidiary to perform services outside of the United States, shall not
be an Eligible Employee unless the Plan has been made applicable to him
by such affiliate or subsidiary.
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<PAGE> 14
ARTICLE 4
MEMBERSHIP
4.1 Each Eligible Employee who was a Member of the Plan on January 31, 1996
will automatically continue as a Member on and after February 1, 1996,
subject to the provisions of the Plan.
4.2 Each Eligible Employee to whom 4.1 is not applicable may elect to
become a Member as of the next following Entry Date. A former Employee
who terminates employment and later is reemployed by the Company may
elect to become a Member as of his reemployment date if he is an
Eligible Employee on that date or as of the date on which he again
becomes an Eligible Employee, whichever is later.
4.3 An Eligible Employee (other than one who automatically continues as or
becomes a Member pursuant to 4.1) may become a Member by application on
a form or forms to be provided by the Voluntary Investment Plan Office
in which application the Eligible Employee shall agree to the terms and
conditions of the Plan and provide such elections, designations and
other information as the Committee shall deem necessary to the proper
administration of the Plan. Applications shall be filed on a timely
basis in accordance with rules established by the Committee.
4.4 An Eligible Employee who becomes a Member shall remain in the Plan,
whether or not he continues to be an Eligible Employee, so long as he
retains a share in the Trust Fund.
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<PAGE> 15
ARTICLE 5
CONTRIBUTIONS
5.1 Member Contributions.
Prior to January 1, 1983, Members were permitted to contribute between
one and eight percent of Compensation to the Plan through authorized
payroll deductions. Effective January 1, 1983, contributions to Member
Accounts will not be permitted. Existing Member Accounts will continue
to be maintained, subject to the terms and conditions of the Plan.
5.2 Elective Contributions and Employee Contributions.
5.2.1 A Member may, as of each Entry Date, elect to defer receipt of a
portion of his Compensation, and have the Company contribute to the
Plan on his behalf for each calendar year an Elective Contribution
equal to between one and fifteen percent (in whole percentage
increments) of the Member's Compensation, in accordance with the rules
set forth in this section and such other rules as the Committee may
prescribe.
The total of a Member's Elective Contributions in one calendar year may
not exceed $7,000 (adjusted for cost of living changes under Code
Section 402(g)). Elective Contributions in excess of such amount shall
be returned to the Member in accordance with the provisions of Code
Section 402(g), the regulations thereunder, and other applicable rules
and regulations.
5.2.2 A Member may, as of each Entry Date, elect to contribute to the Plan as
an Employee Contribution, between one and fifteen percent (in whole
percentage increments) of the Member's Compensation, in accordance with
the rules set forth in this section and such other rules as the
Committee may prescribe.
5.2.3 A Member may make an election under both 5.2.1 and 5.2.2, provided the
total of such elections does not exceed 15% of the Member's
Compensation . Such elections may specify a percentage of Compensation
as Elective Contributions and a percentage of Compensation as Employee
Contributions (both in whole percentage increments); or, alternatively,
the Member may specify a single percentage of Compensation, allocated
first to Elective Contributions up to the limitations imposed by this
Article and then allocated to Employee Contributions. If under 5.2.7 it
is required to restrict elective deferrals, all Members affected shall
be deemed to have elected allocation first to Elective Contributions up
to the limits imposed by this article and then allocated to Employee
Contributions.
5.2.4 The Committee shall make available Deferral and Contribution Agreement
forms for Eligible Employees to make application for membership.
Eligible Employees will be permitted to make or change a Deferral and
Contribution Agreement at any time. Individuals must return their
election forms to the Voluntary Investment Plan Office on or before the
last day of the calendar month in order for them to be effective the
next month. Such election or change of election initially shall apply
to Compensation earned by Eligible Employees during the month
immediately following the month in which their election form is
received by the Plan and shall continue to apply until subsequently
changed by the Member.
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<PAGE> 16
5.2.5 A Member may cancel his Deferral and Contribution Agreement at any time
by filing a notice with the Voluntary Investment Plan Office on such
forms as the Committee may prescribe and such cancellation shall become
effective for Compensation earned during the month following the month
in which the notice of cancellation is received by the Plan.
5.2.6 Except as provided in 5.2.5, all Deferral and Contribution Agreements
shall remain in effect until a new Deferral and Contribution Agreement
(which may increase, decrease or cancel such election) is received by
the Voluntary Investment Plan Office and takes effect. The new Deferral
and Contribution Agreement shall take effect as provided in 5.2.4. Any
Member who does not file a revised Deferral and Contribution Agreement
effective January 1, 1990 shall be treated as having made an election
under 5.2.3, at the Elective Contribution rate in effect just preceding
that date, with his election applying first to Elective Contributions
up to the applicable limits, and then to Employee Contributions.
5.2.7 The actual deferral percentage for Highly Compensated Eligible
Employees for any Plan Year may not exceed the greater of:
(a) One and one-quarter times the actual deferral percentage for all
other Eligible Employees for the Plan Year, or
(b) The lesser of (i) two percentage points plus the actual deferral
percentage for all other Eligible Employees for the Plan Year,
or (ii) two times such percentage for all other Eligible
Employees for the Plan Year.
The "actual deferral percentage" for each group of Eligible Employees
is the average of the deferral percentages for each Eligible Employee
in such group. The deferral percentage is equal to the Employee's
Elective Contributions for the Plan Year divided by his Total Earnings
for the Plan Year. Eligible Employees who are not making Elective
Contributions will be included at zero percent in determining the
actual deferral percentage.
Prior to the beginning of each Plan Year and periodically during the
year, the Committee shall test deferral elections under 5.2 to
determine whether or not the limits under this section will be exceeded
for the Plan Year. In performing this test, the Committee will assume
that deferrals for current Eligible Employees will continue for the
remainder of the Plan Year at the rate currently elected by the
Employee. If elections made by Highly Compensated Eligible Employees
would (if not reduced) cause the actual deferral percentage for such
Employees to exceed the limitation in this section, the Committee shall
reduce the deferral percentages elected by the Highly Compensated
Eligible Employees to comply with the maximum permissible deferral
percentage for the Plan Year. This reduction will be accomplished by
determining the maximum possible upper limit on Elective Contributions
(as a percentage of Compensation) which, when imposed as a limitation
on the Highly Compensated Eligible Employees, will cause the Plan to
comply with this section.
If the Member has made an appropriate election under 5.2.3, such excess
Elective Contributions may be treated as Employee Contributions,
subject to 5.2.9.
At the end of the Plan Year, if Elective Contributions for Highly
Compensated Eligible Employees exceed the limitation described in this
section, the Committee shall determine the excess Elective
Contributions of each Highly Compensated Eligible Employee in
accordance with the following leveling method. The deferral percentage
of the Highly Compensated Eligible Employee with the highest deferral
percentage will be reduced to the extent required to (i) enable the
Plan to comply with this section, or (ii) cause such
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<PAGE> 17
Employee's deferral percentage to equal the deferral percentage of the
Highly Compensated Eligible Employee with the next highest deferral
percentage. This procedure will be repeated until the Plan satisfies
the limitation in this section. Excess Elective Contributions and
investment earnings (including gains and losses) will be refunded to
the Member in cash before the end of the next Plan Year. If the Member
has made an appropriate election under 5.2.3, such excess Elective
Contributions may be treated as Employee Contributions, subject to
5.2.9. In accordance with Treasury Regulation Section
1.401(k)-1(f)(5)(i), excess Employee Contributions which are
distributed or recharacterized shall be reduced by excess Elective
Contributions previously distributed for the taxable year ending in the
same Plan Year, and excess Elective Contributions to be distributed for
a taxable year will be reduced by excess Employee Contributions
previously distributed or recharacterized for the Plan Year beginning
in such taxable year. If Elective Contributions are refunded to the
Member, any Company Matching Contributions attributable to such
Elective Contributions and investment earnings on such Company Matching
Contributions (including gains and losses) will be forfeited and used
to reduce Company Matching Contributions otherwise payable pursuant to
5.3.
Investment earnings allocable to excess Elective Contributions for a
calendar year and for the period between the end of such calendar year
and the date of the refund shall be determined in accordance with
proposed Treasury Regulation Section 1.401(k)-1(f)(4)(ii), as it may be
revised from time to time by the Secretary of the Treasury.
In the case of a Highly Compensated Eligible Employee whose deferral
percentage is determined under the family aggregation rules of Code
Section 414(q)(6), the deferral percentage shall be reduced in
accordance with the leveling method described above and the excess
Elective Contributions will be allocated among the family members in
proportion to the Elective Contributions of each family member that
have been combined.
5.2.8 Not later than as of the first day of each month, the Company will make
an Elective Contribution into the Trust Fund with respect to each
Member who timely elected to defer Compensation to the Plan for the
preceding month and will make an Employee Contribution into the Trust
Fund with respect to each Member who made a contribution to the Plan
for the preceding month. The Company may, at the sole discretion of the
Company, make a contribution into the Trust Fund at any time in the
Plan Year and before the first day of a month to be credited to an
individual's Elective Account or Contribution Account under 8.1 as of
the first day of such month in the same manner as if transmitted to the
Fund with respect to the individual as of such date.
5.2.9 The actual contribution percentage for Highly Compensated Eligible
Employees for any Plan Year may not exceed the greater of:
(a) One and one-quarter times the actual contribution percentage for
all other Eligible Employees for the Plan Year, or
(b) The lesser of (i) two percentage points plus the actual
contribution percentage for all other Eligible Employees for the
Plan Year, or (ii) two times such percentage for all other
Eligible Employees for the Plan Year.
The "actual contribution percentage" for each group of Eligible
Employees is the average of the contribution percentages for each
Eligible Employee in such group. The contribution percentage is equal
to the sum of the Employee's Company Contributions and Employee
Contributions for the Plan Year divided by his Total Earnings for the
Plan Year.
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<PAGE> 18
Eligible Employees for whom there are no Company or Employee
Contributions will be included at zero percent in determining the
actual contribution percentage.
Prior to the beginning of each Plan Year and periodically during the
year, the Committee shall test contribution elections under 5.2 to
determine whether or not the limits under this section will be exceeded
for the Plan Year. In performing this test, the Committee will assume
that contributions for current Eligible Employees will continue for the
remainder of the Plan Year at the rate currently elected by the
Employee. If elections made by Highly Compensated Eligible Employees
would (if not reduced) cause the actual contribution percentage for
such Employees to exceed the limitation in this section, the Committee
shall reduce the contribution percentages elected by the Highly
Compensated Eligible Employees to comply with the maximum permissible
contribution percentage for the Plan Year. This reduction will be
accomplished by determining the maximum possible upper limit on
Elective Contributions (as a percentage of Compensation) which, when
imposed as a limitation on the Highly Compensated Eligible Employees,
will cause the Plan to comply with this section.
At the end of the Plan Year, if Employee Contributions and Company
Matching Contributions for Highly Compensated Eligible Employees exceed
the limitation described in this section, the Committee shall determine
the excess Employee Contributions and Company Matching Contributions of
each Highly Compensated Eligible Employee in accordance with the
following leveling method. The contribution percentage of the Highly
Compensated Eligible Employee with the highest contribution percentage
will be reduced to the extent required to (i) enable the Plan to comply
with this section, or (ii) cause such Employee's contribution
percentage to equal the contribution percentage of the Highly
Compensated Eligible Employee with the next highest contribution
percentage. This procedure will be repeated until the Plan satisfies
the limitation in this section. Excess Employee Contributions and
investment earnings (including gains and losses) will be refunded to
the Member in cash before the end of the next Plan Year. In accordance
with Treasury Regulation Section 1.401(m)-1(e)(2)(ii), the amount of
excess Employee Contributions and Company Matching Contributions shall
be determined only after first determining the excess Elective
Contributions, if any, that are treated as Employee Contributions due
to recharacterization pursuant to paragraph 5.2.7. If Employee
Contributions are refunded to the Member, any Company Matching
Contributions attributable to such Employee Contributions and
investment earnings on such Company Matching Contributions (including
gains and losses) will be forfeited and used to reduce Company Matching
Contributions otherwise payable pursuant to 5.3.
Investment earnings allocable to excess employee contributions and
excess Company Matching Contributions for a Plan Year and for the
period between the end of such Plan Year and the date of the refund
shall be determined in accordance with proposed Treasury Regulation
Section 1.401(m)-1(e)(3)(ii), as it may be revised from time to time by
the Secretary of the Treasury.
In the case of a Highly Compensated Eligible Employee whose
contribution percentage is determined under the family aggregation
rules of Code Section 414(q)(6), the contribution percentage shall be
reduced in accordance with the leveling method described above and the
excess Company Matching Contributions and Employee Contributions will
be allocated among the family members in proportion to the
contributions of each family member that have been combined.
5.2.10 The sum of the actual deferral percentage and the actual contribution
percentage for Highly Compensated Eligible Employees for each Plan Year
may not exceed the sum of:
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<PAGE> 19
(a) One and one-quarter times the greater of (i) the actual deferral
percentage for all other Eligible Employees for the Plan Year or
(ii) the actual contribution percentage for all other Eligible
Employees for the Plan Year, plus
(b) The lesser of (i) or (ii) below:
(i) Two percentage points plus the lesser of (A) the
actual deferral percentage for all other Eligible
Employees for the Plan Year or (B) the actual
contribution percentage for all other Eligible
Employees for the Plan Year.
(ii) Two times the lesser of (A) the actual deferral
percentage for all other Eligible Employees for the
Plan Year or (B) the actual contribution percentage
for all other Eligible Employees for the Plan Year.
Prior to the beginning of each Plan Year and periodically during the
year, the Committee shall test contribution elections under 5.2 to
determine whether or not the limits under this section will be exceeded
for the Plan Year. In performing this test, the Committee will assume
that deferrals and contributions for current Eligible Employees will
continue for the remainder of the Plan Year at the rate currently
elected by the Employee. If elections made by Highly Compensated
Eligible Employees would (if not reduced) cause the sum of the actual
deferral percentage and the actual contribution percentage for such
Employees to exceed the limitation in this section, the Committee shall
reduce the contribution percentages elected by the Highly Compensated
Eligible Employees to comply with the limitations of this section. This
reduction will be accomplished by determining the maximum possible
upper limit on Employee Contributions (as a percentage of Compensation)
which, when imposed as a limitation on the Highly Compensated Eligible
Employees, will cause the Plan to comply with this section.
If the limitation described in this section is still exceeded after
reducing the upper limit on Employee Contributions for Highly
Compensated Eligible Employees to zero, the Committee shall also reduce
Elective Contributions elected by Highly Compensated Eligible
Employees. This reduction will be accomplished by determining the
maximum possible upper limit on Elective Contributions (as a percentage
of Compensation) which, when imposed as a limitation on the Highly
Compensated Eligible Employees, will cause the Plan to comply with this
section.
At the end of the Plan Year, if the sum of the actual deferral
percentage and the actual contribution percentage for Highly
Compensated Eligible Employees exceeds the limitations described in
this section, the Committee shall determine the maximum possible upper
limit of Employee Contributions (as a percentage of Compensation)
which, when imposed as a limitation on the Highly Compensated Eligible
Employees, will cause the Plan to comply with this section. Employee
Contributions in excess of this limit will be refunded to the Member in
cash. If the limitation in this section is still exceeded after
refunding all Employee Contributions for Highly Compensated Eligible
Employees, the Committee shall determine the maximum possible upper
limit of Elective Contributions (as a percentage of Compensation)
which, when imposed as a limitation on the Highly Compensated Eligible
Employees, will cause the Plan to comply with this section. Elective
Contributions in excess of this limit will be refunded to the Member in
cash.
If Elective or Employee Contributions are refunded to the Member, any
Company Contributions attributable to such Elective or Employee
Contributions will be forfeited and used to reduce Company
Contributions otherwise payable pursuant to 5.3.
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<PAGE> 20
5.3 Company Contributions
5.3.1 Not later than as of the first day of each month, the Company will make
a Company Contribution into the Trust Fund with respect to each Member
who made an Elective Contribution or an Employee Contribution to the
Plan for the preceding month. The amount of each such Company
Contribution with respect to each such Member shall be equal to 50% of
the total of the Member's Elective and Employee Contributions to the
Plan for the preceding month, but not exceeding 4% of the Member's
Compensation for that month. The Company may, at the sole discretion of
the Company, make a contribution into the Trust Fund at any time in the
Plan Year and before the first day of a month to be credited to an
individual's Company Account under 8.1 as of the first day of such
month in the same manner as if transmitted to the Fund with respect to
the individual as of such date.
5.3.2 The Company shall pay for the cost of necessary and proper expenses of
its administration of the Plan. Brokerage and fees incurred in the
purchase or sale of securities will be charged to the Investment Fund
described in Article 7 in which the transaction occurred. Fees charged
by the Trustee for supervision and administration of Plan assets will
be charged to the Investment Fund to which such fees are properly
allocable. Any expense charged by the Insurer under the provisions of
the Group Annuity Contract will be charged to Fund D.
5.3.3 Company Contributions are subject to suspension upon a withdrawal from
a Member Account, Contribution Account, or Elective Account as provided
in Article 11.
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<PAGE> 21
ARTICLE 6
INVESTMENT OF CONTRIBUTIONS
6.1 A Member may elect, as of the date he becomes a Member of the Plan or
as of any later date, to have his future Elective Contributions,
Employee Contributions and Company Contributions invested in one or
more of the following Investment Funds described in Article 7: Fund A,
Fund B, Fund C, Fund D and Fund E. The election shall direct that such
contributions be invested in 5% increments in any one or more of the
five Investment Funds, provided the following minimum and maximum
participation requirements are maintained:
(a) A minimum allowable participation of 10% in any one Fund.
(b) A maximum allowable participation of 50% in Fund E.
6.2 A Member may change an election made pursuant to 6.1 at any time and
such change shall be effective on the first day of the calendar month
next following receipt of the election by the Voluntary Investment Plan
Office.
6.3 A Member may elect to have his Member Account, Elective Account,
Contribution Account and Company Account accumulated as a result of
past Member Contributions, Elective Contributions, Employee
Contributions and Company Contributions invested in one or more of the
five Investment Funds in the same manner as that described in 6.1 with
respect to the investment of future Elective Contributions, Employee
Contributions and Company Contributions, and he may change any such
election. Such election or change of election shall be effective on the
first day of the calendar month next following receipt of the Member's
election or change of election by the Voluntary Investment Plan Office.
6.4 A Member may make an election or may change his election under 6.1 or
6.2 without being required to make a corresponding election or change
of election under 6.3, and may make an election or change his election
under 6.3 without being required to make a corresponding election or
change of election under 6.1 or 6.2.
6.5 All elections under Article 6 shall be by notice filed with the
Voluntary Investment Plan Office on forms provided for that purpose. An
Employee for whom there was an election in effect immediately prior to
the date on which he became a Member under 6.1 of the Voluntary
Investment Plan for Salaried Employees or the Voluntary Investment Plan
for Hourly Employees, shall be deemed to have made the same election
under the Plan, provided the election would have been effective if made
under the Plan. Otherwise, the election under the Voluntary Investment
Plan for Salaried Employees or the Voluntary Investment Plan for Hourly
Employees shall be deemed an election under the Plan to have future
Elective, Employee, and Company Contributions invested 100% in Fund B
until a change of election is effective under 6.2.
6.6 An election or change of election made pursuant to Article 6 shall be
within the independent control of the Member making it, and neither the
Trustee, the Trust Fund nor the Company shall be liable for any loss
that may result from the exercise of such control by the Member. If, at
any time, no election under Article 6 is in effect with respect to any
portion of a Member's Member Account, Elective Account, Contribution
Account, or Company Account, or with respect to any Member
Contribution, Elective Contribution,
6 - 1
<PAGE> 22
Employee Contribution, or Company Contribution made for such Member,
such Member shall be deemed to have elected the investment of 100% of
such amount in Fund B.
6.7 An election or change of election deemed to have been made under 6.5 or
6.6 shall not be counted for purposes of the provisions of those
sections which imposed restrictions on the frequency of changes.
6.8 Notwithstanding the provisions of 6.1, an election or change of
election which was effective under 6.1, 6.2 or 6.3 prior to January 1,
1980, to invest equally among Investment Fund A, Fund B and Fund C
shall continue in effect after January 1, 1980 until a subsequent
change of election is made by the Member under 6.2 and 6.3.
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<PAGE> 23
ARTICLE 7
TRUST FUND
7.1 As part of the Plan, the Company has entered into a Trust Agreement
establishing a Trust Fund which is divided into five Investment Funds
designated as Fund A, Fund B, Fund C, Fund D and Fund E. The term
"Trust Fund" is sometimes used herein to refer to the Investment Funds
in the aggregate.
7.2.1 Fund A. The Trustee shall invest and reinvest the principal and income
of Fund A only in the following kinds of instruments:
Short-term investments (less than 18 months maturity) including
commercial paper rated prime by rating services; bankers' acceptances;
commercial bank certificates of deposit; and other cash equivalents and
cash.
Securities issued or guaranteed by the United States Government.
Marketable straight debt securities, rated A or better by Standard and
Poor's Bond Rating or Moody's Investors Service, or issues of
equivalent quality.
Commingled or pooled fixed income or real estate trust funds if the
composition of such funds would otherwise fulfill the normal quality
criteria for this Fund; provided that any such funds shall be qualified
under the provisions of Section 401(a) and exempt under the provision
of 501(a) of the Code and during such time as an investment through any
such medium shall exist the Declaration of Trust of such funds shall
constitute a part of the Trust Agreement.
Mortgages, bank deposits and other fixed income debt issues which would
otherwise qualify under the normal quality criteria for this Fund.
7.2.2 Fund B. The Trustees shall invest and reinvest the principal and income
of Fund B only in the following securities:
Short-term investments (less than 18 months maturity) including
commercial paper rated prime by rating services; bankers' acceptances;
commercial bank certificates of deposit; and other cash equivalents and
cash.
Securities issued or guaranteed by the United States Government.
Convertible debentures.
Marketable straight debt securities, rated A or better by Standard and
Poor's Bond Rating or Moody's Investors Service, or issues of
equivalent quality.
Preferred stocks.
Convertible preferred stocks.
Commingled or pooled fixed income or real estate trust funds if the
composition of such funds would otherwise fulfill the normal quality
criteria for this Fund; provided that any
7 - 1
<PAGE> 24
such funds shall be qualified under the provisions of Section 401(a)
and exempt under the provision of 501(a) of the Code and during such
time as an investment through any such medium shall exist the
Declaration of Trust of such funds shall constitute a part of the Trust
Agreement.
Mortgages, bank deposits and other fixed income debt issues which would
otherwise qualify under the normal quality criteria for this Fund.
Provided that the Trustees shall not invest more than 60% of the Fund
assets, valued at their market value, in common stocks, equities or
equity equivalent investments.
7.2.3 Fund C. The Trustee shall invest and reinvest the principal and income
of Fund C only in the following securities:
Common stocks, equities and equity equivalents.
Short-term investments (less than 18 months maturity) including
commercial paper rated prime by rating services; bankers' acceptances;
commercial bank certificates of deposit; and other cash equivalents and
cash.
Securities issued or guaranteed by the United States Government.
Convertible debentures.
Marketable straight debt securities, rated A or better by Standard and
Poor's Bond Rating or Moody's Investors Service, or issues of
equivalent quality.
Preferred stocks.
Convertible preferred stocks.
Commingled or pooled fixed income or real estate trust funds if the
composition of such funds would otherwise fulfill the normal quality
criteria for this Fund; provided that any such funds shall be qualified
under the provisions of Section 401(a) and exempt under the provision
of 501(a) of the Code and during such time as an investment through any
such medium shall exist the Declaration of Trust of such funds shall
constitute a part of the Trust Agreement.
Mortgages, bank deposits and other fixed income debt issues which would
otherwise qualify under the normal quality criteria for this Fund.
7.2.4 Fund D. All contributions to Fund D shall be invested with the Insurers
under a Group Annuity Contract entered into between the Trustee and the
Insurer. All such contributions shall become part of the assets of the
Insurers. Under the Group Annuity Contract, the Insurers will guarantee
the security of the principal plus a specified minimum annual interest
rate to be earned each calendar year. The exact interest rate for any
calendar year will be announced by the Committee in November of the
preceding year.
7.2.5 Fund E. The Trustee shall invest and reinvest the principal and income
of Fund E in shares of Common Stock of the Company, except that
temporary investments may be made in the following kinds of
instruments:
7 - 2
<PAGE> 25
Short-term investments (less than 18 months maturity) including
commercial paper rated prime by rating services; bankers' acceptances;
commercial bank certificates of deposit; and other cash equivalents and
cash.
Securities issued or guaranteed by the United States Government.
All shares of Common Stock of the Company may be acquired in the open
market, in privately negotiated transactions (other than officers or
directors of the Company), or through tender offers, or the Trustee may
purchase authorized but unissued shares of Common Stock of the Company
or shares of Common Stock of the Company held in the treasury of the
Company, as the Trustee may from time to time direct. Shares of Common
Stock of the Company may be sold in the open market or in privately
negotiated transactions (other than officers or directors of the
Company), or the Trustee may sell such shares to the Company or through
an underwritten registered offering, as the Trustee may from time to
time direct. Cash dividends on shares of Common Stock of the Company
held in Fund E may be used by the Trustee to purchase additional shares
of Common Stock of the Company. The Trustee may offset required
purchases and sales of Common Stock as provided in the Trust Agreement.
The Trustee will retain the Common Stock of the Company regardless of
market fluctuations, subject only to the investment decisions of the
Members who have invested in Fund E.
7.3 Contributions and amounts shall flow into the respective Investment
Funds in accordance with elections provided for in Article 6, and the
Trustee shall hold, invest and distribute the assets of each such Fund
in accordance with the terms of the Trust Agreement.
7.4 The Trust Agreement will provide that at the direction of the
Committee, the Trustee shall invest a portion of the Trust Fund under a
Deposit Administration or similar contract issued by a life insurance
company for the purpose of providing annuities to members who may elect
to have their share in the Trust Fund so applied at retirement.
7.5 The Trust Agreement will provide that the Trustee may invest up to 100%
of the Fund E assets in Common Stock of The Boeing Company. It will
further state that the Trustee shall not invest any portion of the
Trust Fund in the capital stock or other securities of the Company
unless otherwise instructed by the Committee. The Committee may direct
the Trustee to invest Fund B and Fund C in the capital stock or other
securities of The Boeing Company, but such investment, as to each such
fund, shall in no event exceed the lesser of 5% of its market value or
the amount of the Company Contributions to such Fund.
7.6 Each Member who has Common Stock of the Company held in Fund E
allocated to his Member's Accounts shall be entitled to instruct the
Trustee regarding the voting of the number of such shares allocated to
the Accounts (determined by the proportionate share of the Member's
investment in Fund E) at all stockholders' meetings of the Company,
determined as of the record date for such stockholders' meetings. The
Company will send, or cause to be sent, to each Member who has Common
Stock of the Company allocated to the Member's Accounts a voting
instruction form and the same proxy solicitation material as is sent to
stockholders generally.
7.7 Notwithstanding any other provisions of the Plan to the contrary:
(a) If any person shall make a tender offer (as defined in paragraph
(c) below) to acquire (by purchase or exchange) Common Stock of
the Company, including shares of such Common Stock that are held
in Fund E, the Trustee and the Company shall act as follows:
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<PAGE> 26
(1) The Company shall ensure that the materials made
available to shareholders generally in connection with
the tender offer are provided to each Member who has
shares of Common Stock of the Company held in Fund E
allocated to his Member's Accounts, and the response of
the Trustee as to whether to accept or reject the tender
offer with respect to the full and fractional shares of
such Common Stock that are so allocated shall be made in
accordance with the instructions of the Member given to
the Trustee on forms provided for that purpose.
(2) If the Trustee fails to receive clear and timely
instructions from a Member in a case where instructions
have been sought by the Trustee as provided in paragraph
(1), the Trustee shall have no discretion in such matter
and shall reject the tender offer with respect to the
affected full and fractional shares of Common Stock of
the Company that are allocated to the Accounts of such
Members.
(3) With respect to full and fractional shares of Common
Stock of the Company that have been acquired by the Plan
and are not yet allocated (including any such Common
Stock held in a suspense account because it cannot be
allocated currently due to the Code Section 415 limits),
the Trustee shall have no discretion in such matter and
shall reject the tender offer with respect to such Common
Stock.
(b) If any tender offer is accepted (in whole or in part) pursuant
to subsection (a), the Trustee shall have the power to transfer
Common Stock of the Company in order to effect such acceptance.
(c) For purposes of this section, "tender offer" shall mean any
offer to acquire Common Stock of the Company which is subject to
either section 13(e) or 14(d) of the Securities Exchange Act of
1934 and which under applicable rules and regulations is
required to be the subject of a filing with the Securities and
Exchange Commission on either Schedule 13E-4 or Schedule 14D-9.
(d) The foregoing notwithstanding, nothing herein shall serve to
modify the related rules of the Trust Agreement or to expand the
duties of the Trustee unless and until the Trustee gives its
consent in the manner provided in the Trust Agreement.
7 - 4
<PAGE> 27
ARTICLE 8
MAINTENANCE OF MEMBERS' ACCOUNTS
8.1 The Committee shall establish and maintain for each Member an Elective
Account, a Contribution Account, and a Company Account under each
Investment Fund in which all or part of his Elective Contributions,
Employee Contributions and Company Contributions are invested. The
Committee shall maintain for each Member who, prior to January 1, 1983,
made Member Contributions hereunder, a Member Account under each
Investment Fund in which all or part of his Member Contributions are
invested. As of the first day of each month, there shall be credited to
an individual's Elective Account, Contribution Account, and Company
Account, respectively, under each such Fund or Funds, amounts of
Elective Contributions, Employee Contributions, and Company
Contributions transmitted to the Fund with respect to the individual as
of that date. Each such account and each Member Account under each such
Fund shall also be credited or charged with its share of the net
earnings or losses of the Fund for the preceding month determined by
the Unit method hereinafter described.
8.2 As of January 1, 1990, the amount of Elective Contribution Accounts,
Employee Contribution Accounts, Member Contribution Accounts, and
Company Contribution Accounts credited to Fund E shall have a Unit
value of $1.00, and Units shall be credited to Members at that value
for contributions made to that Fund for Members on and after January 1,
1990 and prior to the next Valuation Date. The value of each Unit under
Fund A, Fund B, Fund C and Fund D as of January 1, 1990 shall be the
Unit value applicable to those funds as of the Valuation Date
immediately preceding January 1, 1990.
8.3 As of each Valuation Date following January 1, 1990, the Trustee shall
determine the fair market value of the assets of each Investment Fund,
including uninvested cash, accrued interest and dividends, but
excluding any funds invested with the Insurer under Fund D, and shall
notify the Company of the value so determined. Assets for which there
is a readily ascertainable market shall be valued by the Trustee at
their fair market value, determined by the last known sale on the
Valuation Date as of which the market value is determined. In the
absence of a sale on the Valuation Date, the fair market value of such
assets, as well as other assets for which there is no readily
ascertainable fair market value, shall be determined by the Trustee in
such manner as the Trustee shall consider appropriate provided only
that a consistent practice be followed.
The value of a Member's Member Account, Elective Account, Contribution
Account and Company Account under Fund D at any time shall be equal to
the Member Contributions, Elective Contributions, Employee
Contributions and Company Contributions allocated to those accounts
plus interest earned under the Group Annuity Contract with the Insurer,
less any amounts previously withdrawn from those accounts.
8.4 The Committee shall divide the aggregate value of the assets of each
Investment Fund, as so determined, by the total number of outstanding
units credited to individuals' accounts in such Fund on the Valuation
Date. The result obtained shall be the new value of each Unit, or "Unit
value," as of the Valuation Date. Each contribution to or payment from
an Investment Fund after the immediately preceding Valuation Date shall
be converted to units by dividing such new Unit value into the amount
of such contribution or payment, and the individual account of each
affected Member shall be credited or charged, as the
8 - 1
<PAGE> 28
case may be, with the portion of the number of units so computed and
properly attributable to such Member.
8.5 Any amounts withdrawn from Member Accounts, Elective Accounts,
Contribution Accounts and Company Accounts will be charged to the
respective accounts as of the date the withdrawal benefit is payable.
The number of units charged to the account will be equal to the dollar
amount withdrawn divided by the Unit value determined as of the
Valuation Date immediately preceding the date as of which the
withdrawal benefit is payable. Fractional units will be rounded to two
decimal points.
8.6 The value of the balance of any account held for an individual as of
the first day of any calendar month shall be equal to the number of
units credited to the account as of that date, including units credited
on that date pursuant to 8.4, multiplied by the Unit value determined
as of the immediately preceding Valuation Date.
8.7 Members electing to change from one Investment Fund to another under
6.3 shall, as of the effective date of the change, have their accounts
in the Fund from which the transfer is made charged and their accounts
in the Fund to which the transfer is made credited, based upon the
applicable Fund Unit values in effect as of the immediately preceding
Valuation Date.
8 - 2
<PAGE> 29
ARTICLE 9
BENEFITS
9.1 A Member shall be entitled to the benefits described in 9.3 or 9.4 only
in the event of a termination of Service.
9.2 Upon the termination of Service of any Member as the result of the
occurrence of any of the events set forth below, the Member (or, in the
event of death, the Member's beneficiary as described in 17.7) shall be
entitled to the benefits described in 9.3, payable as of the first day
of the calendar month next following the date of occurrence of the
event:
(a) Death.
(b) A determination of total disability, being a physical or mental
disability which wholly prevents the Member from performing the
duties of his own occupation or other appropriate work made
available to him by the Company, such condition to be determined
by the Committee through the application of procedures uniformly
applied which do not discriminate in favor of any class or
classes of individuals.
(c) Entry into the Armed Forces of the United States.
(d) Retirement from the Service of the Company under a retirement
plan sponsored by the Company.
(e) Termination of Service by layoff.
(f) Termination of Service at or after age 65.
For purposes of this 9.2, a Member who attains age 70-1/2 while still
an active Employee, shall be deemed to have terminated Service with the
Company on the last day of the calendar year in which such age was
attained and with subsequent terminations on the same day of each
calendar year thereafter until the Member's actual termination of
Service occurs. However, the preceding sentence shall not apply to an
Employee who attained age 70-1/2 prior to 1988.
9.3 The benefit referred to in 9.2 shall be the sum of the balance in the
Member's Member Account, Elective Account, Contribution Account and
Company Account or Accounts as of the date the benefit is payable.
9 - 1
<PAGE> 30
9.4 Upon termination of Service of any Member for any reason other than the
occurrence of one of the events enumerated in 9.2, the Member shall be
entitled to the benefits described in 9.5, payable as of the first day
of the calendar month next following the date his Service is
terminated.
9.5 The benefit referred to in 9.4 shall be equal to the sum of the balance
in the Member's Member Account, Contribution Account and Elective
Account or Accounts as of the date the benefit is payable, plus a
portion of the balance of his Company Account or Accounts, as of the
date the benefit is payable, determined in accordance with the
following table:
<TABLE>
<CAPTION>
Balance in Company Account Percentage Payable
Arising From: to Terminating Member
--------------------------- ---------------------
<S> <C>
Contributions made in the year of
termination..................... 0%
Contributions made in first year
preceding year of termination.... 20%
Contributions made in second year
preceding year of termination.... 40%
Contributions made in third year
preceding year of termination.... 60%
Contributions made in fourth year
preceding year of termination.... 80%
Contributions made in fifth year
preceding year of termination and
in all earlier years............. 100%
</TABLE>
In applying the foregoing table, "years" are calendar years and the
balance in a Member's Company Account or Accounts arising from
contributions made in a given year shall include the share of the net
earnings or losses of the Trust Fund credited or charged thereto
pursuant to Article 8. The foregoing provisions of this Article 9
notwithstanding, any Member who has attained age 65 (normal retirement
age) or has five or more years of Vesting Service as described in
Article 20, shall be 100% vested in his Company Account.
9.6 The interest of each Member in the Member Account, Contribution Account
and Elective Account shall be at all times fully vested and
nonforfeitable. Any portion of the balance in a Member's Company
Account which is not vested in him upon termination of Service pursuant
to 9.4 shall be forfeited upon payment of benefits under Article 10 and
shall be applied as soon as practicable to reduce the amount of a
Company Contribution otherwise payable under Article 5.3.1 to the same
Investment Fund or Funds in which the cancellation occurred.
9.7 If a person who forfeited a nonvested balance under 9.6 resumes
employment with the Company, a separate contribution account shall be
established for the individual if he repays to the Plan the full amount
of such earlier distribution in one lump sum on or before the earlier
of:
9 - 2
<PAGE> 31
(a) The fifth anniversary of his reemployment date, or
(b) The date he completes five consecutive one-year Breaks in
Service.
At the time of repayment the Employee shall submit to the Committee in
writing his current investment election and indicate the tax status of
the money being returned to the Trust. Upon completion of the foregoing
requirements by the Employee, the Company shall restore to the Member's
Company Account the balance of company dollars previously forfeited as
a result of such earlier distribution.
9 - 3
<PAGE> 32
ARTICLE 10
MANNER OF PAYMENT OF BENEFITS
10.1 Except as provided in 10.4, benefits under Article 9 will be paid in a
lump sum as soon as practicable after the date benefits become payable.
Benefit amounts will become payable upon the Member's termination of
Service and the Member's election for payment of benefits.
10.2 The Member's election for payment of benefits may be made at any time
and shall become effective as of the first day of the calendar month
next following receipt of the individual's written request by the
Voluntary Investment Plan Office, but in no event later than January 1
of the calendar year following the year in which the Member attains age
70 1/2.
10.3 The total benefit of a Member who does not make an election for payment
of benefits under 10.1 shall remain in the Trust Fund and shall be
invested in the Investment Fund or Funds elected by the Member pursuant
to Article 6. All other provisions of the Plan shall be applicable to
benefits deferred under this paragraph 10.3, with the exception that
withdrawal of funds under Article 11 and loans under Article 16 shall
not be permitted.
10.4 A Member to whom a benefit is payable on account of retirement under a
retirement plan sponsored by the Company may, prior to his retirement
date under such retirement plan, elect to receive all or any designated
portion of his benefit in an alternate manner of payment. The portion
of the benefit to be paid in the alternate manner shall be applied by
the Trustee for the purchase from a life insurance company selected by
the Committee of an annuity contract for the Member with payments for a
specified number of years beginning on the individual's retirement date
under the retirement plan. Such annuity contract may be with or without
rights to a refund upon the individual's death, depending upon the
individual's wishes and the availability of the type of contract
desired.
10.5 In the event of the Member's death prior to the effective payment date,
Plan benefits shall be payable to the Member's beneficiary as described
in 17.7, in accordance with the provisions of this 10.5.
(a) If the Member has designated one individual or an estate or
trust as beneficiary to receive benefits under the Plan, said
designee may continue to defer payment of Plan benefits, subject
to the provisions of 10.6. The designated beneficiary shall have
all investment rights previously provided to the Member under
10.3:
(b) If the Member has designated multiple beneficiaries to receive
benefits under the Plan, the balance in the Member's Account
shall be paid to the Member's beneficiaries as of the first day
of the calendar month next following the date of the Member's
death.
10.6 The beneficiary's election for payment of deferred benefits under
10.5(a) may be made at any time and shall become effective as of the
first day of the month following receipt of the individual's written
request by the Voluntary Investment Plan Office. However, the following
limitations on payment date shall apply:
(a) If the beneficiary is an estate, a trust or an individual other
than the Member's spouse, payment under this Article will be
made not later than December 31 of the
10 - 1
<PAGE> 33
calendar year which contains the 5th anniversary of the date of
the Member's death.
(b) If the beneficiary is the Member's spouse, payment under this
Article will be made the later of December 31 of the calendar
year in which the Member would have attained age 70-1/2, or
December 31 of the calendar year which includes the fifth
anniversary of the Member's death.
(c) Should the individual who is named beneficiary under this 10.6
die prior to the date benefits are paid, distributions shall be
made to that individual's sole beneficiary not later than: (1)
in the case in which the individual is the Member's spouse,
December 31 of the calendar year which contains the 5th
anniversary of the individual's death; and (2) in the case in
which the individual is not the Member's spouse, December 31 of
the calendar year which contains the fifth anniversary of the
Member's death. In the case of multiple beneficiaries, the
balance in the individual's accounts shall be paid to the
individual's beneficiaries as of the first day of the calendar
month next following the date of the individual's death.
10 - 2
<PAGE> 34
ARTICLE 11
WITHDRAWALS
11.1 A Member may voluntarily elect to withdraw all or a portion of the
balance of his Member Account or Contribution Account in any Investment
Fund as of the first day of the calendar month next following receipt
of his election by the Company; provided that the amount of such
withdrawal under the Plan shall not be less than $100.00 unless the
balance in the Member Account or Contribution Account be less than
$100.00, in which event the entire balance may be withdrawn.
Withdrawals must be made first from the Member Accounts until
exhausted, and then may be made from the Contribution Accounts. The
Member's election to withdraw must either request that the entire
balance of his Member Accounts or Contribution Accounts in all
Investment Funds in which they are invested be withdrawn, or designate
the Investment Fund from which he wishes the withdrawal to be made and
specify the dollar amount to be withdrawn. Effective January 1, 1993,
the foregoing requirement for the Member to designate the Investment
Fund from which he wishes the withdrawal to be made is revoked. On and
after that date, the specified dollar amount shall be withdrawn
proportionally from each of his Investment Funds based on the ratio
which the balance in each of such funds has to the total sum of his
Member Account and Contribution Account balances immediately prior to
the voluntary withdrawal of funds.
11.2 A Member may voluntarily elect to withdraw all or a portion of his
Elective Contributions in any Investment Fund as of the first day of
the calendar month next following receipt of his election by the
Company; provided that (i) the Member has withdrawn all Member Account
balances and Employee Contribution Account balances, (ii) the reason
for the withdrawal is hardship as herein defined, and (iii) the amount
of such withdrawal under the Plan shall not be less than $100.00,
unless the Elective Contributions be less than $100.00, in which event
the entire amount may be withdrawn. The Member's election to withdraw
must either request that the entire amount of his Elective
Contributions in all Investment Funds in which they are invested be
withdrawn, or designate the Investment Fund from which he wishes the
withdrawal to be made and specify the dollar amount to be withdrawn.
Effective January 1, 1993, the foregoing requirement for the Member to
designate the Investment Fund from which he wishes the withdrawal to be
made is revoked. On and after that date, the specified dollar amount
shall be withdrawn proportionally from each of his Investment Funds
based on the ratio which the balance in each of such funds has to the
sum of his Elective Contribution Account balances immediately prior to
the voluntary withdrawal of funds.
A Member may apply for a hardship withdrawal under the Facts and
Circumstances provisions of the Plan. A distribution shall qualify for
Facts and Circumstances Hardship Withdrawal only if the Company
determines, based on all relevant facts and circumstances, that the
distribution is on account of an immediate and heavy financial need of
a Member and is necessary to satisfy such a need. A financial hardship
exists only if the Member lacks resources sufficient:
(1) to finance the purchase or renovation of the Member's
principal residence;
(2) to pay the expenses for medical care or treatment of the
Member or a member of his or her immediate family;
11 - 1
<PAGE> 35
(3) to finance the education of the Member or a member of his
or her immediate family;
(4) to pay for a casualty loss;
(5) to finance the purchase of a motor vehicle necessary for
commuting to work;
(6) in the event of the Member's bankruptcy or divorce or
dissolution of marriage;
(7) in the event a Member is on leave without pay or is
otherwise absent without pay for 15 days or more;
(8) to prevent the eviction of the Member from his principal
residence or foreclosure on the mortgage of the Member's
principal residence; or
(9) other severe financial need.
The determination that the distribution is on account of an immediate
and heavy financial need of a Member shall be made based on all
relevant facts and circumstances and in accordance with uniform
principles consistently applied and with pertinent Code Sections and
corresponding regulations. A financial need shall not fail to qualify
as immediate and heavy merely because the need was reasonably
foreseeable or voluntarily incurred by the Employee.
The amount of any distribution under this section shall be limited to
the amount which is necessary to defray the hardship expense and which
is not available from other reasonably liquid assets from other sources
outside or within the Plan. For this purpose, the Company may require
the written statement of the Employee stating the nature of his
immediate and heavy financial need, his financial resources, and the
fact that the financial need cannot be relieved through reimbursement
or compensation by insurance or otherwise; by reasonable liquidation of
the Employee's assets, to the extent that such liquidation would not
itself cause an immediate and heavy financial need; by cessation of
Elective and Employee Contributions under the Plan; or by other
distributions or nontaxable (at the time of the loan) loans from this
Plan or any other plans maintained by the Employer or by any other
employer, or by borrowing from commercial sources on reasonable
commercial terms. For purposes of this determination, the Employee's
resources shall be deemed to include those assets of his spouse and
minor children that are reasonably available to the Employee.
11.3 In the event of a withdrawal under 11.1 or 11.2, future Company
Contributions into the Trust Fund shall be suspended immediately
following the date the withdrawal benefit is payable. A withdrawal will
not result in an automatic suspension of an election to make Elective
Contributions or Employee Contributions, and such contributions can
continue to be made in accordance with the Deferral and Contribution
Agreement in effect at the time of the withdrawal. However, the Company
shall not make a Company Contribution into the Trust Fund with respect
to any Elective Contribution or Employee Contribution made by the
Member making the withdrawal during a period of six full calendar
months from the date the withdrawal was made.
Any remaining balance in a Member Account, Contribution Account or
Elective Account after a withdrawal made under this Article and any
balance in the Company Account of the Member shall continue in such
accounts subject to the provisions of the Plan.
11 - 2
<PAGE> 36
11.4 A Member shall not be entitled to withdraw any portion of the balance
in his Company Account. Effective January 1, 1989, hardship withdrawals
will be limited to Elective Contribution amounts. Related earnings in
the form of interest or unrealized gain, as specified in Article 8,
shall not be available to the Member for hardship withdrawal purposes.
11 - 3
<PAGE> 37
ARTICLE 12
VOLUNTARY INVESTMENT PLAN COMMITTEE
12.1 The Company and the Voluntary Investment Plan Committee shall, with
respect to the Plan, be named fiduciaries and the Voluntary Investment
Plan Committee shall be the plan administrator referred to in the
Employee Retirement Income Security Act of 1974. The Voluntary
Investment Plan Committee shall have the authority to control and
manage the operation and administration of the Plan, including
authority to appoint an investment manager or managers to manage assets
of the Plan.
12.2 The Committee shall consist of not fewer than three persons appointed
by, and to serve at the pleasure of, the Board of Directors of The
Boeing Company, and such Board shall designate one of such persons to
be the Chairman of such Committee. Any member of the Committee may
resign by delivering his written resignation to the Secretary of the
Company and to the Secretary of the Committee, and such resignation
shall become effective on the date specified therein.
12.3 The members of the Committee shall appoint one of their number as
Vice-Chairman and shall appoint a Secretary and such other officers as
the Committee may deem necessary. The Secretary or any of such other
officers may but need not be members of the Committee. The Chairman or,
in his absence, the Vice-Chairman may execute or deliver any instrument
in its behalf and except as may otherwise be provided by the Trust
Agreement, may authorize one or more others of its number or the
Secretary of the Committee to execute or deliver any such instrument.
The Committee may employ such agents, counsel, accountants and
actuaries and arrange for such clerical and other services as it may
require in carrying out the provisions hereof.
12.4 The majority of the members of the Committee at the time in office
shall constitute a quorum for the transaction of business. Any
determination or action of the Committee may be made or taken by a
majority of the members present at any meeting thereof, or without a
meeting, by a resolution or written memorandum signed by all of the
members then in office.
12.5 No member of the Committee who is an Employee shall receive any payment
for his services as a member. Members of the Committee shall be
reimbursed by the Company for expenditures incurred in the discharge of
their duties. Membership on the Committee shall not of itself
constitute an individual an Employee. No bond or other security need be
required of any member of the Committee in such capacity unless the
Board of Directors of The Boeing Company should otherwise determine or
except as may be required by law.
12.6 Subject to such restrictions as the Board of Directors of The Boeing
Company may from time-to-time make, the Committee may establish bylaws
and rules for the transaction of its business and the administration of
the Plan.
12.7 The Committee shall have the exclusive right to interpret the terms and
provisions of the Plan; to determine the accuracy or applicability of
all valuations; to take all steps deemed necessary or advisable by the
Committee to correct mistakes in administering the Plan; to determine
any and all questions arising under the Plan or in connection with the
administration thereof or the applicability thereof to any and all
individuals; and to remedy possible ambiguities, inconsistencies, or
omissions; and all interpretations, corrections and decisions of the
Committee in respect of any matter or question relating to the Plan or
the
12 - 1
<PAGE> 38
administration thereof shall be final, conclusive and binding upon all
persons affected thereby.
Subject to the terms of any collective bargaining agreement insofar as
such terms may relate to entitlement to benefits under the Plan, the
Committee shall make all determinations as to the right of any person
to benefits. The Committee shall adopt procedures for the presentation
of claims by the Committee. Detailed information regarding such
procedures may be obtained by writing the Secretary of the Voluntary
Investment Plan Committee, P.O. Box 3707, Seattle, Washington 98124,
Mail Stop 10-15. The decision of the Committee upon such review shall
be final, subject to any appeal rights conferred by law.
12.8 The Committee shall maintain, or cause to be maintained, accounts
showing the fiscal transactions of the Plan, and shall keep, or cause
to be kept, in convenient form, such data as may be required for the
valuation of the assets and liabilities of the Plan and the Members'
accounts. The Committee shall also prepare an annual report showing in
reasonable detail the assets and liabilities of the Plan and giving a
brief account of the operation of the Plan for each year. The Committee
shall make the annual report available to each Member, together with a
statement of his share in the Trust Fund.
12.9 A member of the Committee shall not vote or act upon any matter
relating solely to himself.
12.10 The members of the Committee shall use ordinary care and diligence in
the performance of their duties, but no member shall be personally
liable by virtue of any contract, agreement, or other instrument made
or executed by him or on his behalf as a member of the Committee, nor
for any mistake of judgement made by himself or any other member, nor
for any loss unless resulting from his willful misconduct or failure to
exercise good faith. No member shall be liable for the neglect,
omission, or wrong-doing of any other member or of the agents or
counsel of the Committee. The Boeing Company shall indemnify each
member of the Committee against, and save him harmless from, any and
all expenses and liabilities arising out of any act or omission to act
as a member of the Committee, except such liabilities and expenses as
are due to his willful misconduct or failure to exercise good faith.
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<PAGE> 39
ARTICLE 13
LIMITATIONS ON CONTRIBUTIONS
13.1 Notwithstanding anything contained herein to the contrary, the total
Additions made to the Accounts of a Member for any calendar year shall
not, when added to allocations made under The Boeing Company Employee
Financial Security Plan, exceed the lesser of 25% of the Member's
Compensation or the greater of $30,000 or one-quarter of the dollar
limitation in effect under Code Section 415(b)(1)(A) as adjusted for
cost of living increases by the Secretary of the Treasury.
13.2 For purposes of this Article 13, the term "Additions" means the sum of
(a) Company Contributions, (b) Elective Contributions, (c) Employee
Contributions, (d) forfeitures, if any, allocated to the Member's
Accounts, (e) amounts allocated after March 31, 1984, to an individual
medical account (defined in Code Section 415(1)(2)) which is part of a
pension or annuity plan maintained by the Company, and (f) amounts
allocated after December 31, 1985, to the separate account of a key
employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Company.
13.3 If for any other calendar year the Additions exceed the foregoing
limitations, the Elective Contributions and Employee Contributions for
that calendar year, to the extent of their excess, shall be returned to
the Member. If, after returning such Contributions, an excess still
exists, such excess shall be applied in the manner described in 9.6.
13.4 If the Company is contributing to any other defined contribution plan,
as defined in Section 414(i) of the Code, for its Employees, some or
all of whom are Members of this Plan, then any such Member's
allocations under The Boeing Company Employee Financial Security Plan
and forfeitures and Company contributions under this Plan shall be
aggregated with such Participant's amounts subject to Code Section 415
limitation under the other defined contribution plan for purposes of
applying the limitations and reducing allocations under such other
plan.
In any case in which a person is a participant of both a defined
benefit plan and a defined contribution plan maintained by the Company
or any Affiliate of the Company, then the provisions of Code Section
415(e) shall apply. If for any Plan Year, the limits described in Code
Section 415(e) are exceeded, the projected annual retirement income
benefit under the defined benefit plan shall be limited, to the extent
necessary, to reduce the defined benefit plan fraction (as defined in
Code Section 415(e)(2)) so that the sum of the defined contribution
plan fraction (as defined in Code Section 415(e)(3)) and the defined
benefit plan fraction does not exceed 1.0. Notwithstanding the
foregoing, if the defined benefit plan of the Company or Affiliate
specifically provides that the defined benefit plan fraction is not
reduced, the Member's Additions will be adjusted as described in
Section 13.3, to the extent necessary, to reduce the defined
contribution plan fraction so that the sum of the defined contribution
plan fraction and the defined benefit plan fraction does not exceed
1.0.
13.5 "Compensation" for purposes of this article only, means a Member's
earned income, wages, salaries, and fees for professional services, and
other amounts received for personal services actually rendered in the
course of employment with the Company (including, but not limited to,
commissions paid salesmen, compensation for services on
13 - 1
<PAGE> 40
the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses), and excluding the following:
(a) Company contributions to a plan of deferred compensation which
are not included in the Employee's gross income for the taxable
year in which contributed or Company contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; and
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option.
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<PAGE> 41
ARTICLE 14
CHANGE OR TERMINATION OF PLAN
14.1 It is the intention of the Company that the Plan will continue
indefinitely, but the Board of Directors of The Boeing Company may, at
any time and for any reason, modify, amend or terminate the Plan. The
Plan shall automatically terminate on failure of the Company to make
contributions within one month following the date upon which any
contribution is payable as provided in 5.2.8 and 5.3.1.
14.2 No modification or amendment of the Plan shall retrospectively deprive
any individual of rights theretofore accrued to him hereunder except to
the extent that any change is made necessary by law or governmental
regulation to permit qualification or continued qualification as a tax
exempt trust under applicable law or regulation. If any modification or
amendment of the Plan eliminates an optional form of payment, a Member
may continue to elect such form of payment with respect to any account
balance earned prior to the effective date of such modification or
amendment. Furthermore, no modification or amendment of the Plan shall
cause or permit any part of the Trust Fund to be diverted to purposes
other than for the exclusive benefit of Members and their beneficiaries
or to revert to or become the property of the Company, unless it shall
have first been determined by the Internal Revenue Service that the
Plan with the proposed modification or amendment will continue to be a
qualified plan under Section 401 of the Code or any statute of similar
import. No amendment or modification of the Plan shall increase the
duties of the Trustee without its consent.
14.3 Upon a complete or partial termination of the Plan or a complete
discontinuance of contributions, the interests of the Members in their
Company Accounts (or, in the case of a partial termination, the
interests of those Members for whom the Plan has terminated), shall be
fully vested and nonforfeitable. Upon such termination or complete
discontinuance of contributions, the Company and the Committee shall
perform the procedures which would have been required pursuant to the
Plan had the date of such termination been the first day of a calendar
month with the applicable Valuation Date being the last day of the next
preceding month.
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<PAGE> 42
ARTICLE 15
MERGER
15.1 In the event of the dissolution, merger, consolidation or
reorganization of the Company, provision may be made by which the Plan
and Trust will be continued by the successor and, in that event, such
successor shall be substituted for the Company under the Plan. The
substitution of the successor shall constitute an assumption of the
Plan liabilities by the successor and the successor shall have all the
powers, duties and responsibilities of the Company under the Plan.
15.2 In the event of any merger or consolidation of the Plan with, or
transfer in whole or in part of the assets and liabilities of the Trust
Fund to another trust fund held under, any other plan of deferred
compensation maintained or to be established for the benefit of all or
some of the Members of the Plan, the assets of the Trust Fund
applicable to such Members shall be transferred to another trust fund
only if:
(a) each Member (if either the Plan or the other plan then
terminated) receives a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had
then terminated);
(b) resolutions of the Board of Directors of the Company under the
Plan, and of any new or successor employer of the affected
Employees, shall authorize such transfer of assets; and, in the
case of the new or successor employer of the affected Members,
its resolutions shall include an assumption of liabilities with
respect to such Members' inclusion in the new employer's plan;
and
(c) such other plan and trust are qualified under Sections 401(a)
and 501(a) of the Code.
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<PAGE> 43
ARTICLE 16
LOANS
16.1 An application for Loan by a Member who is an active Employee of the
Company or is an Employee who is on an unpaid status, that is received
by the Company any time in a calendar month will be processed for
disbursement of loan proceeds in the month next following receipt of
the loan application by the Company. Amounts available for loan will be
based on the Member's account balances in effect as of the first day of
the month in which the Member's Application for Loan is received by the
Company.
Loans will be made to former employees only to the extent required by
Department of Labor final regulations and Department of Labor
pronouncements regarding such regulations and only to the extent that
making such loans will be consistent with administering the Plan and
the loan program in a nondiscriminatory manner.
16.2 Approval of a Member's properly completed Application for Loan shall be
subject to the provisions of the loan documents. These additional loan
documents shall consist of a Loan Disclosure Statement, Promissory
Note, Payroll Deduction Authorization, and Security Agreement - Pledge
by Member.
Loan approval shall be given following proper completion of all
required loan documents and if the repayment amount of any loan is less
than 25 percent of the Member's base monthly pay. If the loan documents
are not fully executed and returned to the Company by the 8th of the
month in which a loan disbursement is scheduled to be made, the
Member's Application for Loan shall automatically be rejected and the
pertinent loan documents shall become null and void.
16.3 Subject to the loan application and approval process above, a check for
the proceeds of the loan shall be disbursed to the Member as soon as
practicable after the twentieth day of the calendar month next
following the month in which the Member's Application for Loan was
timely received by the Company. Any completed loan application may be
revoked by the Member prior to the date of loan disbursement. Such
revocation shall cause the Member's Promissory Note and loan
disbursement check to be cancelled.
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<PAGE> 44
16.4 The maximum term of any loan shall be five years. However, a Member who
uses the loan to finance the purchase of the Member's principal
residence may extend the term of such loan by one year for each
additional $1,000 borrowed. The following table illustrates this
provision.
<TABLE>
<CAPTION>
Loan Amount Maximum Term
----------- ------------
<S> <C>
$ 6,000 6 years
$ 7,000 7 years
$ 8,000 8 years
$ 9,000 9 years
$10,000 10 years
$11,000 11 years
$12,000 12 years
$13,000 13 years
$14,000 14 years
$15,000 15 years
$16,000 16 years
$17,000 17 years
$18,000 18 years
$19,000 19 years
$20,000 or more 20 years
</TABLE>
16.5 The interest rate on new loans will be set every month at the average
yield on five-year Treasury Notes as reported by the Federal Reserve
for the week ending on the second Friday of each month plus two
percentage points. This rate will be in effect for any loan application
received in the following calendar month. Periodically, this procedure
will be reviewed to ensure that it continues to set interest rates
commensurate with the interest rates commonly charged for loans secured
by certificates of deposit or whole life insurance policies or other
loans which are comparable to loans under the Plan. The Committee has
the authority to revise this procedure as it deems appropriate.
16.6 Repayment shall be by payroll deduction and will be credited on a
prorata basis to the Investment Fund or Funds selected by the Member's
most recent investment election for future contributions. However, if a
Member's payroll deduction is stopped due to an assignment of wages or
an unpaid absence from work, the Member shall be allowed to make
repayments outside of payroll deductions.
A Member may make repayment of loan payments in arrears, in order to
avoid loan default. In addition, a Member may pay off the loan balance
(including accrued interest) at any time in a lump sum or by increasing
the amount of payroll deduction, or both.
Repayments of principal will be first credited to a Member's Elective
Account. Interest will be allocated to the Member's Elective and
Company accounts ratably based on the principal amounts loaned from
each account.
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<PAGE> 45
16.7 For any month that a repayment is not received, the unpaid interest
charge will be added to the outstanding balance in accordance with the
loan document securing the Member's loan. In addition, for those loans
secured by loan documents providing for reamortization of loan
payments, if the missed or late repayment would otherwise cause the
loan not to be repaid before the longer of five years (from the
beginning date of the loan) or the term of the loan, the loan balance
(including accrued interest) will be reamortized with repayments not to
exceed 30 percent of the base monthly pay in order to ensure the
repayment within the five-year or longer original term of the loan.
16.8 A loan will be in default if after the longer of five years (from the
beginning date of the loan) or the term of the loan, any unpaid balance
remains. Interest will continue to accrue on the outstanding balance of
the loan until the loan is foreclosed upon or a final distribution of
the account is made. If the Member is actively employed and the
Member's loan is in default, there will be no foreclosure on the
Member's Elective Account, but the Member is subject to tax on the
outstanding loan balance (including accrued interest) at such time. The
Member's Company Account will be subject to foreclosure proceedings.
16.9 Upon default, any principal balance owed (plus accrued interest) will
be recharacterized as a taxable distribution from the Plan. In
addition, any amounts loaned from the Member's Elective Accounts will
continue to accrue interest until repaid or a final distribution is
made to the Member. Repayments of the Member's Elective Accounts and
interest subsequent to default will be recorded on an after-tax basis
in order to prevent its double taxation when the final distribution is
made to the Member.
16.10 An Employee on an authorized leave of absence or otherwise absent from
work without pay will be allowed to skip up to twelve consecutive
monthly repayments. Interest will continue to accrue in accordance with
the loan document securing the Member's loan and will be added to the
outstanding balance of the loan. The Member may, however, continue to
make repayments at the Member's option. For those loans secured by loan
documents providing for reamortization of loan payments, if repayments
are skipped and the skipped repayments would otherwise cause the loan
not to be repaid before the longer of five years (from the beginning
date of the loan) or original term of the loan, after twelve months (or
such fewer number of months as are skipped) the loan balance, including
accrued interest, will be reamortized with repayments not to exceed 30
percent of base monthly pay so that repayment of the loan, including
accrued interest, will be completed within the longer of five years
(from the beginning date of the loan) or original term of the loan.
16.11 In addition, loans will be subject to the following terms and
conditions:
16.11.1 A Member may have only one loan outstanding at any time. Effective
January 1, 1995, the practice of allowing outstanding loan obligations
to be refinanced is ceased. On and after that date, a Member may have
two loans outstanding at any time.
16.11.2 No loan will be made for an amount less than $1,000.
16.11.3 No loan may exceed the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance from the
Plan during the one-year period ending on the day before the
date on which the loan is made.
(b) One-half of the total Vested Value of all Accounts.
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<PAGE> 46
16.11.4 Proceeds will be withdrawn proportionally from each Investment Fund in
which the Member has assets allocated.
16.11.5 The Member must apply for the loan on a form prescribed by the
Committee ("Application for Loan"), sign a promissory note payable to
the Plan in the amount and on a form prescribed by the Committee
("Promissory Note"), sign an agreement to secure the Promissory Note
with the balance in his Accounts ("Security Agreement - Pledge by
Member") and authorize payroll deductions for payment of interest and
principal by signing a "Payroll Deduction Authorization", all in
accordance with procedures adopted by the Committee.
16.11.6 No loan will be made unless the Member's spouse consents in writing to
the loan within the ninety-day period before the making of the loan.
The requirement for spousal consent will be waived if the Member
establishes to the satisfaction of the Committee that such consent
cannot be obtained because there is no spouse, the spouse cannot be
located or because of such other circumstances as the Secretary of the
Treasury may by regulations prescribe. The spouse's consent (or waiver
of consent where the spouse cannot be located) will be valid only with
respect to that spouse.
16.11.7 If a Member retires, terminates his employment with the Company, dies,
incurs a disability or becomes bankrupt or the term of the Promissory
Note expires prior to his repayment of the total principal and interest
on the Promissory Note held by his Loan Account, the Committee may, at
its option, foreclose upon his Accounts to repay the Promissory Note.
16.12 The foregoing provisions of this Article 16 notwithstanding, the
Committee may at any time and from time to time deny any loans to
Members in accordance with procedures established by the Committee and
terminate or suspend the loan granting provisions of this Article. No
such termination or suspension shall affect the amount due from any
Member on his outstanding loan, or the status of Loan Accounts existing
at such time. Any such denial, termination or suspension will be
applied in a uniform and nondiscriminatory manner.
16 - 4
<PAGE> 47
ARTICLE 17
GENERAL PROVISIONS
17.1 The Company has entered into a Trust Agreement with the Trustee of the
Trust Fund under which the Trustee will hold, invest and distribute the
assets of the Trust Fund as required by the Trust Agreement. The
Company may remove the Trustee at any time upon reasonable notice. The
Trust Agreement shall provide that upon the removal or resignation of
the Trustee the assets shall be transferred to another Trustee to be
designated by the Company under the terms of the Trust Agreement
satisfying the conditions herein set forth.
17.2 No part of the Trust Fund shall be used for, or diverted to, purposes
other than the exclusive benefit of Members and their beneficiaries
under the Plan. No person shall have any interest in or right to any
part of the Trust Fund except as and to the extent expressly provided
in the Plan.
17.3 Nothing contained in the Plan shall confer upon any person the right to
be retained in the employ of the Company nor interfere with the right
of the Company to discharge or otherwise deal with him without regard
to the existence of the Plan.
17.4 Members entitled to benefits pursuant to 10.4 shall file with the
Voluntary Investment Plan Office verification of date of birth and such
other documents or information as the Committee considers necessary for
administering the Plan as to such Members. Benefit payments shall be
made on the later of the date benefits become payable and the date of
receipt of such documents and other pertinent information. Neither the
Company nor the Committee shall be obligated to determine the accuracy
or authenticity of the information provided by the Member and any
benefits paid which are based thereon shall be binding on such person,
or on any one claiming through or under such person, and shall
completely discharge any liability under the Plan to the extent of any
payment made.
17.5 Each Member or beneficiary eligible to receive benefits under Article 9
shall file with the Committee, in writing, his post office address and
each change of post office address until receipt of the benefit
payment. Any communication, statement or notice addressed to such
person at his last post office address filed with the Committee or
Trustee (or if no post office address was filed with the Committee or
Trustee, then his last post office address shown by the Company's
payroll records) will be binding upon such person for all purposes of
the Plan and neither the Trustee nor the Company nor the Committee
shall be obligated to search for or ascertain the whereabouts of any
such person.
17.6 Any action taken with respect to the Plan at the direction of the
Trustee, the Company or the Committee shall be conclusive upon all
Members and other persons entitled to benefits under the Plan.
17.7 A Member may designate a beneficiary to receive benefits under the Plan
upon his death. He may revoke or change such designation at any time. A
designation by a married Member of a beneficiary other than the
Member's spouse shall not be valid without the written consent of the
Member's spouse in accordance with Code Section 417(a)(2). Benefits
payable under the Plan after the death of a Member shall be paid to the
beneficiary designated by him. If there is no valid designation of a
beneficiary or no living designated beneficiary at the Member's death,
the benefits will be paid to the Member's surviving spouse, and, if
none, to the Member's children in equal shares, and, if none, to any
other relative of the Member designated by the Committee or to the
Member's estate.
17 - 1
<PAGE> 48
Beneficiary designations, revocations or changes of beneficiary
hereunder must be on forms provided by the Committee and filed with the
Voluntary Investment Plan Office during the Member's lifetime. A
beneficiary designation filed by a Member under the Voluntary Savings
Plan for Hourly Employees, the Voluntary Savings Plan for Salaried
Employees or the Voluntary Investment Plan for Salaried Employees or
the Voluntary Investment Plan for Hourly Employees shall constitute a
designation under this Plan until revoked or changed by the Member.
17.8 If at any time there is doubt as to the right of any beneficiary to
receive any amount, the Trustee shall take such action as the Committee
may direct. If no such directions are received by the Trustee, the
Trustee may retain such amount, without liability for any interest
thereon, until the rights thereto are determined, or the Trustee may
pay such amount into any court of appropriate jurisdiction, in either
of which events neither the Trustee, the Company nor the Committee
shall be under any further liability to anyone.
17.9 If the Committee shall determine that any individual to whom benefits
are payable is unable to care for his affairs because of illness,
accident or other incapacity, any amount due (unless prior claim
therefore shall have been made by a duly qualified guardian or other
legal representative) may be paid to the spouse, parent, brother or
sister or any other person that the Committee may determine. Any such
payment shall be a payment for the account of such individual, and
shall, to the extent thereof, be a complete discharge of any liability
under the Plan to such individual.
17.10 If any individual receiving benefits under this Plan is reemployed by
the Company, such benefits shall continue as though he had not been so
reemployed.
17.11 No benefits under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, execution, attachment, garnishment, or any other
legal process, and any attempt to do so shall be void. The preceding
sentence will not apply to a qualified domestic relations order
pursuant to Code Section 414(p).
17.12 All authorizations, elections, designations, or other instructions
required to be signed by Members under the Plan shall be on forms
approved by the Committee.
17.13 In construing and interpreting the language of the Plan, reference to
the masculine, such as "he, him, his" shall include the feminine, and
the singular shall include the plural in all cases unless the context
or the particular use of such terms clearly indicate otherwise.
17.14 Headings of sections of the Plan are inserted for convenience and
constitute no part of the Plan.
17.15 The Plan shall be construed according to the laws of the State of
Washington, except insofar as state law has been preempted by the
Employee Retirement Income Security Act of 1974.
17 - 2
<PAGE> 49
ARTICLE 18
MISCELLANEOUS
18.1 Qualification. Each contribution of the Company to the Trust Fund is
conditioned upon the qualification of the Plan under Section 401 of the
Code. If the deduction of any such contribution is disallowed, it shall
be returned to the Company (to the extent disallowed), within one year
after the date of such disallowance.
18.2 Deductibility. Each contribution of the Company to the Trust Fund is
conditioned upon its allowance as a deduction under Section 404 of the
Code. If the deduction of any such contribution is disallowed for the
taxable year within which falls the date as of which such contribution
is credited to an individual's Account under 8.1, it shall be returned
to the Company (to the extent disallowed), within one year after the
date of such disallowance.
18.3 Rollover Distributions. If benefits under the Plan are payable to a
Member, the Trustee may transfer any portion of a Member's eligible
rollover distribution, in accordance with Section 401(a)(31) of the
Code, directly to the Trustee of an eligible retirement plan. This will
only be done if:
(a) Such other plan is an eligible retirement plan qualified under
Section 401(a) or described in Section 403(a), Section 408(a),
or Section 408(b) of the Code;
(b) The Member requests such eligible rollover distribution in
writing in such form and at such time as the Committee may
prescribe;
(c) The Committee approves the request;
(d) The Trustee of the other plan will accept the eligible rollover
distribution; and
(e) The eligible rollover distribution would be includible in gross
income if not rolled over.
"Eligible rollover distribution", for purposes of this Article 18 only,
means any distribution to a Member of all or any portion of the balance
to the credit of the Member at any time following termination of
Service. An eligible rollover distribution shall not include the
following:
(a) Any distribution which is one of a series of substantially equal
periodic payments which are made for a specified period of 10 or
more years.
(b) Any distribution to the extent such distribution is required
under Code Section 401(a)(9).
18.4 Rollover Contributions. With the consent of the Committee and without
regard to any limitations on contributions set forth in Article 5 and
Article 13, the Plan may receive from an Eligible Employee, in cash, a
rollover contribution if:
(a) The amounts transferred to the Plan originated under a
retirement plan sponsored by another employer and the following
conditions are satisfied:
18 - 1
<PAGE> 50
(1) The Eligible Employee was a participant under another
plan that was qualified under Section 401(a) of the Code
or an annuity plan qualified under Section 403(a) of the
Code;
(2) In the case of a plan qualified under Section 401(a) of
the Code, the trust under such other plan is exempt from
tax under Section 501(a) of the Code;
(3) Such Eligible Employee receives a distribution from such
other plan which qualifies as an eligible rollover
distribution, as described in Section 402(c)(1) of the
Code;
(4) The Eligible Employee furnishes evidence satisfactory to
the Committee that such contribution meets conditions
(1), (2), and (3) above; and
(5) The rollover contribution is made no later than the
sixtieth day after receipt of the distribution; or
(b) The amounts transferred to the Plan are from a conduit
individual retirement account, provided that the following
conditions are satisfied:
(1) Such account has no assets other than assets that were
previously distributed to the Eligible Employee by
another qualified plan and contains no amount
attributable to contributions made by the Eligible
Employee;
(2) Such amounts met the applicable requirements of Section
408(d)(3) of the Code for rollover treatment or transfer
to the conduit individual retirement account; and
(3) Such amounts are transferred by the Eligible Employee to
the Plan within 60 days following his or her receipt of
such amount from the conduit individual retirement
account.
Rollover contributions shall be held in a separate Rollover Account
established and maintained under the Plan for the benefit of the
Eligible Employee who transferred such contributions. An Eligible
Employee who has made a rollover contribution shall at all times have a
100% nonforfeitable right to the value of the assets held in his or her
Rollover Account. Amounts allocated to a Rollover Account shall be held
in trust and invested in accordance with the terms and conditions
provided in Article 8. No Company Contribution shall be made under 5.3
with respect to such rollover. Distributions of amounts allocated to a
Rollover Account shall be payable on termination of Service as a
benefit under Article 10. All other provisions of the Plan shall be
applicable to the amount so transferred, regardless of whether or not
the Eligible Employee becomes a Member under 4.2.
If an Eligible Employee makes a rollover contribution to the Plan under
this 18.4, such Eligible Employee nevertheless shall not become a
Member under the Plan and shall not participate in the allocation of
Company Contributions under 5.3 until such Eligible Employee has
satisfied the requirements for membership set forth in Article 4.
18.5 Transition. Article 18 is amended and restated effective January 1,
1993. Employees who had benefits transferred under the provisions of
18.3 of the prior plan and who retired or whose employment terminated
prior to December 31, 1992 and who are not Employees at any time on or
after December 31, 1992 shall have their benefits determined under the
18 - 2
<PAGE> 51
terms of the prior plan. All other Employees who had benefits, if any,
transferred under the provisions of 18.3 of the prior plan shall be
afforded the rights and features contained in 18.4 of this Plan
document.
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<PAGE> 52
ARTICLE 19
TOP-HEAVY PROVISIONS
19.1 Applicability of Section. The following additional provisions shall
apply to member as of the first day of any Plan Year after December 31,
1983 in which the Plan is determined to be a Top-Heavy Plan. Where they
are in conflict with the remaining provisions of the Plan, these
provisions shall control.
19.2 Definitions.
(a) "Compensation" for purposes of this Article 19 only means the
first $150,000 of compensation as defined in Treasury
Regulations Section 1.415-2(d). Compensation shall not exceed
$150,000 for 1994. On January 1 of each calendar year in which
the Secretary of the Treasury prescribes a new dollar limit,
this $150,000 limit will automatically be adjusted to that new
limit.
(b) "Key Employee" means any Employee or former Employee under this
Plan who, at any time during the Plan Year containing the
Determination Date or during any of the four preceding Plan
Years, is or was one of the following:
(1) An officer of the Company having an annual compensation
greater than 150% of the maximum dollar limitation on
contributions and other annual additions to a
participant's account in a defined contribution plan
under Code Section 415, as in effect for the calendar
year in which the Determination Date falls. Whether an
individual is an officer shall be determined by the
Committee on the basis of all the facts and
circumstances, such as an individual's authority, duties
and term of office, and not on the mere fact that the
individual has the title of an officer. For any such Plan
Year, there shall be treated as officers no more than the
lesser of:
(A) 50 Employees, or
(B) the greater of three Employees or ten percent of
the Employees.
For this purpose, the highest-paid officers shall be
selected.
(2) One of the ten Employees owning (or considered as owning
with the meaning of Code Section 318) the largest
interests in the Company. An Employee who has some
ownership interest is considered to be one of the top ten
owners unless at least ten other Employees own a greater
interest than that Employee. However, an Employee will
not be considered a top ten owner for a plan year if the
Employee earns less than the maximum dollar limitation on
contributions and other annual additions to a
participant's account in a defined contribution plan
under Code Section 415 as in effect for the calendar year
in which the Determination Date falls and owns less than
1/2% interest of the Employer.
(3) Any person who owns (or is considered as owning within
the meaning of Code Section 318) more than five percent
of the outstanding stock of the
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<PAGE> 53
Company or stock possessing more than five percent of the
combined total voting power of all stock of the Company.
(4) A one percent owner of the Company having an annual
compensation from the Company of more than $150,000, and
possessing more than one percent of the combined total
voting power of all stock of the Company. For purposes of
this subparagraph, compensation means all items
includable as compensation for purposes of applying the
limitation on contributions and other annual additions to
a Member's account in a defined contribution plan and the
maximum benefit payable under a defined benefit plan
under Code Section 415.
For purposes of parts (1), (2), (3) and (4) of this definition, a
Beneficiary of a Key Employee shall be treated as a Key Employee.
(c) "Non-Key Employee" means an Employee (and any Beneficiary of an
Employee) who is not a Key Employee.
(d) "Required Aggregation Group" means:
(1) each plan of The Boeing Company in which a Key Employee
is a participant, and
(2) each other plan of The Boeing Company which enables any
plan described in subclause (1) to meet the
nondiscrimination requirements of Code Section 401(a)(4)
or Code Section 410.
(e) "Permissive Aggregation Group" means the Required Aggregation
Group plus any other qualified plans maintained by the Company,
but only if such group would satisfy in the aggregate the
requirements of Code Section 401(a)(4) and Code Section 410. The
Committee shall determine which plans to take into account in
determining the Permissive Aggregation Group.
(f) "Determination Date" means the last day of the Plan's
immediately preceding Plan Year (or in the case of the first
Plan Year of the Plan, the last day of the Plan Year).
(g) "Top-Heavy Plan" means this Plan for any Plan Year if, as of the
Determination Date, the aggregate of the accounts under the Plan
for Members (including former Members) who are Key Employees
exceeds 60% of the present value of the aggregate of the
accounts under the plan for all Members, excluding former Key
Employees. Top-Heavy Plan also means this Plan, if this Plan is
a required member of an aggregation group which for such Plan
Year is a Top-Heavy Group (as defined in subparagraph (g)(2)
below).
(1) The present value shall be the sum of (a) the account
balance determined as of the most recent valuation date
that is within the 12-month period ending on the
Determination Date, and (b) the adjustment for
contribution due as of the Determination Date, and as
described in the regulations under Code Section 416.
(2) "Top-Heavy Group" means the aggregation group, if as of
the applicable Determination Date, the sum of the present
value of the cumulative accrued benefits for Key
Employees under all defined benefit plans included
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<PAGE> 54
in the aggregation group plus the aggregate of the
accounts of Key Employees under all defined contribution
plans included in the aggregation group exceeds 60% of
the sum of the present value of the cumulative accrued
benefits for all such defined benefit plans plus the
aggregate accounts for all Employees, excluding former
Key Employees, under such defined contribution plans. If
the aggregation group that is a Top-Heavy Group is a
Required Aggregation Group, only those plans that are
part of the Required Aggregation Group will be treated as
top-heavy. If the aggregation group is not a Top-Heavy
Group, no plan within such group will be top-heavy.
(3) In determining whether this Plan constitutes a Top-Heavy
Plan, the Committee (or its agent) shall make the
following adjustments in connection therewith:
(A) When more than one plan is aggregated, the
Committee shall determine separately for each
plan as of each plan's Determination Date the
present value of the accrued benefits or account
balance. The results shall then be aggregated by
adding the results of each plan as of the
Determination Dates for such plans that fall
within the same calendar year.
(B) In determining the present value of the
cumulative accrued benefit or the amount of the
account of any Employee, such present value or
account shall include the amount in dollar value
of the aggregate distributions made to such
Employee under the applicable plan during the
five-year period ending on the Determination
Date, unless reflected in the value of the
accrued benefit or account balance as of the
most recent valuation date. Such amounts shall
include distributions to Employees which
represented the entire amount credited to their
accounts under the applicable plan.
(C) Further, in making such determination, such
present value or such account shall include any
rollover contribution (or similar transfer), as
follows:
(i) If the rollover contribution (or
similar transfer) is initiated by the
Employee and made to or from a plan
maintained by another employer, the
plan providing the distribution shall
include such distribution in the
present value of such account; the
plan accepting the distribution shall
not include such distribution in the
present value of such account unless
the plan accepted it before December
31, 1983.
(ii) If the rollover contribution (or
similar transfer) is not initiated by
the Employee or made from a plan
maintained by another employer, the
plan accepting the distribution shall
include such distribution in the
present value of such account, whether
the plan accepted the distribution
before
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<PAGE> 55
or after December 31, 1983; the plan
making the distribution shall not
include the distribution in the
present value of such account.
(D) Further, in making such determination, in any
case where an individual is a Non-Key Employee,
with respect to an applicable plan, but was a
Key Employee with respect to such plan for any
prior plan year, any accrued benefit and any
account of such Employee shall be altogether
disregarded. For this purpose, to the extent
that a key Employee is deemed to be a Key
Employee if he or she met the definition of Key
Employee within any of the four preceding plan
years, this provision shall apply following the
end of such period of time.
(E) Further, in making such determination, in any
case where an individual has not received any
compensation from any employer maintaining the
Plan (other than benefits under the Plan) at any
time in the five-year period ending on the
Determination Date, any accrued benefit and any
account of such Employee shall be altogether
disregarded.
19.3 Vesting Schedule. Upon termination of a Member's employment for reasons
other than retirement or disability, such Member shall have a
nonforfeitable right to benefits he has accrued under the Plan in
accordance with the following schedule if it produces a higher vested
percent than the schedule in 9.5:
<TABLE>
<CAPTION>
Years of Service Percent Vested
---------------- --------------
<S> <C>
Less than 3 years 0%
3 or more years 100%
</TABLE>
19.4 Minimum Contribution. For any Plan Year in which the Plan is Top-Heavy,
the Company contribution from the required aggregation of plans (as
defined in Paragraph 19.2) made for each Non-Key Employee shall be at
least 3% of each Non-Key Employee's Compensation for such year.
19.5 Adjustment to Minimum Contribution. For any Plan Year in which the Plan
is Top-Heavy, 1.00 shall be substituted for 1.25 each place it appears
in the fractions described in Code Section 415(e) unless (a) the Plan
could satisfy Paragraph 19.4 if 4% were substituted for 3%, and (b) the
Plan would not continue to be a Top-Heavy Plan if "90%" were
substituted for "60%" in subparagraph 19.2(g).
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<PAGE> 56
ARTICLE 20
VESTING SERVICE
20.1 "Vesting Service" shall be determined as follows:
An Employee will be credited with a full year of Vesting Service for
the calendar year in which the Employee's first Hour of Service
occurred if during that calendar year the Employee was credited with
1,000 or more Hours of Service; otherwise, the Employee's first year of
Vesting Service will be the next calendar year if the Employee was
credited with 1,000 or more Hours of Service during that calendar year.
If the Employee is not credited with 1,000 or more Hours of Service
during either of the Employee's first two calendar years, the Employee
will nevertheless be credited with a year of Vesting Service for the
second calendar year if the Employee was credited with 1,000 or more
Hours of Service during the Employee's first 12-month period of
employment. Thereafter, an Employee will be credited with a full year
of Vesting Service for each calendar year in which the Employee has
1,000 or more Hours of Service.
An Employee will not be credited with any Vesting Service for any
calendar year or portion thereof in which the Employee has less than
1,000 Hours of Service.
Subject to the provisions of Section 20.4, relating to Breaks in
Service, any calendar years in which an Employee has 1,000 or more
Hours of Service, whether or not the calendar years are continuous,
shall be counted in computing years of Vesting Service.
20.2 An Employee in an employment status which is subject to the provisions
of the Fair Labor Standards Act will be credited with Hours of Service
on the basis of a count of hours determined from payroll records. In
the case of an Employee in an employment status which is exempt from
that Act, Service will be converted into Hours of Service on the basis
of 45 Hours of Service for each Payroll Week during which the Employee
has any Service.
The determination of Hours of Service for reasons other than the
performance of duties, and the crediting of Hours of Service to
computation periods, shall be in accordance with Department of Labor
Regulations 2530.200b-2(b) and (c).
Hours of Service resulting from the performance of duties for which a
person receives compensation following a termination of employment will
be credited to the calendar year in which the duties were performed.
"Hour of Service" shall mean:
(a) Each hour for which a person is paid or entitled to payment
(1) For the performance of duties for the Company or an
Affiliate, including compensated bonus hours on third
shift;
(2) On account of a period of time during which no duties are
performed (irrespective of whether the employment
relationship has terminated) but for which he is paid or
entitled to payment under applicable payroll or benefit
practices, such as paid sick leave and vacations;
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<PAGE> 57
(b) Each hour for which backpay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company or
Affiliate and for which no previous payment has been made; and
(c) Each hour not described in paragraph (a) or (b) above, including
the first thirty days of Company-approved leave of absence and
leaves of absence applicable to service with a collective
bargaining representative certified under the Labor Management
Relations Act whose members are Eligible Employees hereunder, or
in a period of military service which is required to be included
in the determination of retirement benefits under the Plan by
applicable Federal law.
(d) For purposes of determining a Break in Service as defined in
20.4, up to 501 Hours of Service shall be credited for an
Employee who is absent from work due to (i) pregnancy by the
Employee, (ii) childbirth by the Employee, (iii) adoption of a
child by the Employee, or (iv) caring for a child immediately
following birth or adoption by the Employee. The additional
Hours of Service credited in this Subsection (d) shall be used
in the calendar year in which the absence commences. If any
Hours of Service are not needed to avoid a Break in Service in
such calendar year, they shall be credited to the following
calendar year, up to a total of 501. Credit will be granted
under this paragraph only if the Employee furnishes information
to the Company's satisfaction which (i) states that the absence
from work was for reasons referred to in this Subsection (d) and
(ii) states the number of days of such absence.
(e) Hours of Service will also be credited for any individual
considered an employee under Code Section 414(n).
With respect to (a), (b), (c), (d) and (e) above, the same Hours of
Service shall not be counted under more than one of the foregoing
categories.
20.3 For purposes of determining "Years of Service", Service which is
performed for the Company and for any Affiliate of the Company, whether
or not included in the definition of Company at 2.4, will be
aggregated. For such purposes, Service performed for any person, firm
or corporation shall be treated as Service for the Company if the
employment by such person, firm or corporation is at the instance of
and deemed by the Committee to have been in the Company's interest.
Where Service has been performed for more than one employer, there
shall be no duplication in the determination of Years of Service and
the same period of Service will not be counted more than once.
20.4 A "Break in Service" shall occur on the last day of the calendar year
in which a terminated Employee has less than 500 Hours of Service. As
of that date, all Vesting Service previously accrued shall be
cancelled.
20.5 If an Employee has a Break in Service and is thereafter reemployed by
the Company, the individual shall be deemed a new Employee for purposes
of the Plan, except the following provisions shall apply:
(a) If the Employee was not vested in his Company Account, Vesting
Service previously cancelled shall be restored upon completion
of the Employee's first year of Eligibility Service if the
number of consecutive one-year Breaks in Service attributed to
the Employee is equal to or less than five.
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<PAGE> 58
(b) If the Employee was partially or 100% vested in his Company
Account, Vesting Service previously cancelled shall be restored
upon completion of the Employee's first year of Eligibility
Service following reemployment.
For purposes of this Article, the computation period for determining an
Employee's first year of Eligibility Service will be the first 12-month
period commencing on the date that the Employee first is credited with
an Hour of Service if during that period the Employee has 1,000 or more
Hours of Service, and otherwise commencing on the January 1 next
following the commencement of such 12-month period, and on
anniversaries of that date.
20.6 If any amendment to the Plan changes the vesting schedule, each Member
who is an Employee having not less than three years of Service may
elect to remain under the vesting schedule of the Plan prior to such
amendment. If he does not make the election within a reasonable time
(as may be determined pursuant to governmental regulations from time to
time), he will be subject to the vesting schedule under the Plan as
amended.
20 - 3
