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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 22, 1999
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Date of Report
(Date of earliest event reported)
THE BOEING COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1-442 91-0425694
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(State or Other (Commission File No.) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
7755 East Marginal Way South
Seattle, Washington 98108
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(Address of Principal Executive Offices, Including Zip Code)
(206) 655-2121
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(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
Pursuant to the Consent and Undertaking dated July 26, 1978, of The Boeing
Company (the "Company"), the Company agreed to file a statement with the
Securities and Exchange Commission (the "Commission") whenever the Company makes
a change in its statement of policies and procedures as to the appointment of
foreign sales consultants.
The Company has revised its procedure establishing requirements of, and
internal responsibilities for, the Company's process for doing business with
foreign sales consultants. Significant changes implemented by the revised
procedure include the following:
1. Establishing the Chief Executive Officer as the final approval
authority for all new appointments and for renewals and amendments of
foreign sales consultant agreements that have significant changes in
their terms;
2. Establishing organizational responsibility for the procedure within the
Company's Contracts departments in each of the Company's operating
divisions (the "Groups");
3. Delegating final approval authority for most renewals and amendments of
foreign sales consultant agreements to the Group presidents; and
4. Establishing senior executives committees in each of the Groups to
conduct final reviews before proposed agreements with foreign sales
consultants are sent to the Group president or the Chief Executive
Officer for approval.
The company-wide policy was revised in June 1998 and has not been further
revised.
Item 7. Financial Statements and Exhibits
(a) Financial statement of businesses acquired: not applicable
(b) Pro forma financial information: not applicable
(c) Exhibits:
Exhibit No. Description
99 Company Procedure 1557, Foreign Sales Consultants.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE BOEING COMPANY
Dated: October 25, 1999 By: /s/ James C. Johnson
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James C. Johnson
Vice President, Corporate Secretary
and Assistant General Counsel
EXHIBIT INDEX
Exhibit No. Description
99 Company Procedure 1557, Foreign Sales Consultants.
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EXHIBIT 99
The Boeing Company Company Procedure PRO-1557
PRO-1557
Issue Date:
February 22, 1999
Foreign Sales Consultants
Purpose/Summary:
This procedure establishes the guidelines and responsibilities for the
selection, approval and use of foreign sales consultants. Other consultant
and professional services agreements are processed in accordance with
Company Procedure PRO-13, "Consultants and Professional Services
Agreements."
Scope:
Supersedes: Boeing Procedure JE-ACG-501, 01/10/94
Applies to: All segments of The Boeing Company including subsidiaries
(as implemented by the resolutions of the subsidiary Board
of Directors)
Maintained By:
Company Offices Contracts and Law Department
Authority Reference(s):
POL-1, "Delegation of Authority to Authorize Business Transactions and
Agreements, and to Commit Company Resources"
POL-14, "Consultant and Professional Services"
Approved By:
Theodore J. Collins
Senior Vice President - General Counsel
Company Offices
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1. Definitions
A. Foreign Sales Consultant - An individual or firm who is retained on
behalf of the Company, regardless of the form of compensation, for the
purpose of supporting the sale or lease of Company products and
services outside the United States. Foreign sales consultants
typically provide information and advice to the Company and
communicate with foreign customers and with governments.
2. Requirements
A. General
1. Each Operating Group which uses the services of foreign sales
consultants will establish and maintain, subject to the prior
approval of the Senior Vice President and General Counsel, a
written procedure regarding the selection, approval and use of
foreign sales consultants.
2. Each Operating Group will also establish and maintain a senior
executives committee. The purpose of the senior executives
committee will be to meet to review and approve each foreign
sales consultant agreement, renewal and amendment for the
Operating Group. Unanimous approval is required. After approval
by the senior executives committee the agreement will be
forwarded to the President of the Operating Group for further
consideration. Committee members may designate substitutes to
attend meetings of the senior executives committee and act for
them in the event they are unable to attend. Consistent with
section 3.G of POL-1, committee members remain ultimately
responsible for the decisions made by their substitutes.
3. No services are to be performed for the Company by a foreign
sales consultant, and no obligation to pay a foreign sales
consultant can be incurred, unless an approved, fully executed,
current written agreement exists with the foreign sales
consultant.
B. Foreign Sales Consultants
1. Foreign sales consultants must be individuals or organizations
having legitimate business interests.
2. No individual or organization will be engaged or retained as a
foreign sales consultant if it is known that such individual, or
any person who is an officer, active representative, or owner of
such organization, is:
a. An employee, officer, representative, or owner of any
customer (exceptions may be considered if the customer with
whom such person is affiliated approves in writing
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the Company's use of such person as a consultant for sales
to other customers), or
b. An official, employee, or representative of any foreign
government or public international organization or of any
agency or instrumentality of any foreign government or
public international organization, or an official of any
foreign political party, or a candidate for foreign
political office and the contractual agreement with or
payment to such person would constitute a violation of the
Foreign Corrupt Practices Act (FCPA).
3. No individual or organization will be engaged or retained as a
foreign sales consultant if it is known or reasonably believed
that such individual or organization is likely to offer or make
(or has offered or made) a payment or gift, directly or
indirectly, to any employee, official, or representative of any
customer, or of any foreign government or public international
organization, or of any agency or instrumentality of any foreign
government or public international organization, or of any
foreign political party, or to any candidate for foreign
political office, under circumstances when such payment or gift
would constitute a bribe, a kickback, or an illegal payment under
either U.S. or applicable foreign laws.
4. A foreign sales consultant will not be engaged if it is known
that the use of such a consultant is prohibited by any applicable
law, regulation, or decree, either U.S. or foreign.
C. Review and Approval Process
1. All foreign sales consultants must be retained in accordance with
procedures established or approved by the Senior Vice President
and General Counsel.
2. All foreign sales consultant agreements are subject to prior
approval by the Chief Executive Officer or the Chief Executive
Officer's delegate as provided for in paragraphs 3 and 4 below.
3. The Chief Executive Officer will approve all new appointments,
all renewals and amendments which have "significant changes," and
such other renewals and amendments as he may indicate from time
to time. In the event the Chief Executive Officer is unavailable
to approve such appointments, renewals and amendments, the
President is authorized to act in the Chief Executive Officer's
stead. The Chief Executive Officer has designated the Senior Vice
President and General Counsel as the corporate officer
responsible for reviewing these agreements prior to the Chief
Executive Officer's approval, to ensure due diligence was used
throughout the review and approval process.
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a. A "significant change" in a proposed renewal or amendment is
any change which has or may have a substantial impact on the
potential compensation of the foreign sales consultant,
including (but not limited to) an increase: during a sales
campaign; of $100,000 or more in a retainer amount; of 1
percentage point or more in a commission rate; or of twenty-
five percent or more in a fee per unit rate.
4. The Chief Executive Officer has delegated final approval
authority for all other foreign sales consultant agreement
renewals and amendments in the Operating Groups to the Presidents
of the Operating Groups and, with the Chief Executive Officer's
prior approval, to the senior executives they have delegated to
act in their stead when they are unavailable. This authorization
includes the responsibility, as the designated corporate
officers, to ensure that due diligence was used throughout the
review and approval process. This authority and responsibility
cannot be further delegated without the Chief Executive Officer's
prior written approval.
D. Foreign Sales Consultants Agreements
The Company's relationship with foreign sales consultants will be
governed exclusively by a written agreement. The agreement will
include any provisions required by the corporate officer designated to
ensure due diligence was used throughout the review and approval
process (as provided for in paragraphs C. 3. and 4. above) and the
following representations, undertakings and agreements:
1. The consultant will, in performing services under the agreement,
comply with all applicable laws and regulations of the United
States, the country of each customer, and any other applicable
foreign country.
2. The consultant is an independent contractor and has no authority
to commit or obligate the company.
3. Except as disclosed in the application or agreement, neither the
consultant nor any owner, stockholder, officer, director, or
active representative of consultant's organization is (a) an
officer, employee, representative, or owner of any customer or
(b) an officer, employee, or other person acting in an official
capacity for any foreign government or public international
organization, or any agency or instrumentality of any foreign
government or public international organization, or any foreign
political party, or (c) a candidate for foreign political office.
The consultant agrees to inform the Company promptly of any
change relative to such representation, and the Company has the
right to terminate the agreement if, in the judgment of the
Company, such change may constitute a conflict of interest or a
violation of any applicable law.
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4. The consultant will not offer or make any payment or gift
directly or indirectly to any officer, employee, or
representative of any customer, or of any foreign government or
public international organization or agency or instrumentality of
any foreign government or public international organization, or
of any foreign political party, or to any candidate for foreign
political office, which would constitute a bribe, a kickback, or
an illegal payment under either U.S. or applicable foreign laws
either during or after termination of the agreement.
5. The Company may be excused from performance under the agreement
if such performance would constitute a violation of the laws or
regulations of the United States or the country of a customer.
6. The existence of the agreement may be disclosed by either party,
and the terms and conditions of the agreement may be disclosed if
required by the laws or regulations of the United States or any
other country.
7. The consultant will provide, upon request, such information as
may be necessary to enable the Company to comply with the
reporting requirements of any applicable government.
8. The consultant will provide, in conjunction with any commission
payments, a written certification that the representations and
warranties made in the agreement are true and correct as of the
date of payment.
9. The agreement identifies all other agreements of any kind between
the Company (including any of its subsidiaries) and the
consultant or any affiliate, owner, stockholder, officer,
director, or active representative of the consultant, or any
entity in which any such person or organization has a significant
interest.
E. Payments
Payments will be made pursuant to and consistent with the terms of the
written agreement. All payments will be made by check or bank
transfer, payable to the consultant. No assignment of funds by a
consultant to any other person or entity (other than a financial
institution) will be permitted without the prior approval of the
Senior Vice President and General Counsel. Under no circumstances will
any payment be made to any account unless the owners of record of the
account are identified. Payment will be made at the consultant's
principal place of business unless otherwise authorized by the Senior
Vice president and General Counsel.
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3. Responsibilities
A. General
All Operating Groups will:
1. Ensure that all personnel involved in the selection or approval
of foreign sales consultants or in the execution or
administration of foreign sales consultant agreements are
informed of the provisions of all policy statements and
procedures relating to foreign sales consultants.
2. Determine the need for foreign sales consultants and the level of
compensation, which must be appropriate for such business
arrangements in the applicable country.
3. Compile in a file the information required to support the request
for approval of the foreign sales consultant relationship, so
that informed judgment may be reached regarding compliance with
Company policies and procedures. Such information will include:
a. A request for approval signed by: a manager of the
requesting organization, Contracts, the Law Department, the
senior executives committee and the President of the
Operating Group.
Each signature on the request for approval form is a
representation that, to the best of the signer's knowledge,
having directly or indirectly made or caused to be made such
inquiries as are reasonably available, the information
contained in the request for approval, the consultant's
application and the file is accurate and complete and that
the signer has no reason to believe the level of
compensation proposed is inappropriate for the proposed
business arrangement in the relevant country.
b. An application from the prospective consultant or, in the
case of a renewal, a written supplement to or reconfirmation
of the information on file.
c. Any available documentation on the prospective consultant
such as a resume or an annual report.
d. In the case of new agreements, documentation of the results
of contacts with U.S. consulates and embassies in the
territory requesting information on the consultant, and
documentation of the results of other reference checks.
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e. Confirmation that the Law Department has reviewed any
marketing file maintained by the Operating Group concerning
the consultant for consistency with the application.
f. Identification of sales campaigns in progress and accepted
sales proposals that would be covered by the agreement.
g. Identification of all other agreements between the Company
(including any of its subsidiaries) and the consultant or
any affiliate, owner, stockholder, officer, director, or
active representative of the consultant, or any entity in
which such person or organization has an interest.
h. Identification of any other consultant who could be
compensated for the same sale.
i. Proposed letter(s) notifying customers and any government
agencies or public international organizations that may be
contacted by the consultant of the appointment or, in the
case of renewals, a copy of the notification letter(s)
previously sent.
j. A copy of the agreement.
4. Promptly after execution of a new or renewal sales consultant
agreement, give written notice of the Company's relationship with
the consultant to each customer or government agency that the
consultant is expected to contact, provided that (a) no such
notice need be given to any such customer or agency that is
already aware of the Company's relationship with the consultant
as evidenced by correspondence in the Company's files, and (b)
the Senior Vice President and General Counsel may authorize such
exceptions to this provision as may be appropriate in the
circumstances.
5. Maintain appropriate files and records and administer foreign
sales consultant agreements to ensure compliance with this
procedure.
B. Contracts
1. POL-1, "Delegation of Authority to Authorize Business
Transactions and Agreements, and to Commit Company Resources," at
paragraph 6. H. 2. d. on page 16, delegates the authority to
manage the process for engaging foreign sales consultants to
Contracts. This includes the following responsibilities:
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a. Ensure compliance with Company policy and regulatory
requirements.
b. Prepare, and review and approve, all foreign sales
consultant agreements, amendments and renewals. Review and
approve the files described in 3. A. 3. above.
c. With the Law Department, develop and provide FCPA training
to Operating Group personnel and FCPA and business practices
training to foreign sales consultants. Maintain a record of
such training.
d. Confirm and document the business justification, past
performance and reasonableness of compensation for foreign
sales consultants.
e. For agreements with new foreign sales consultants, conduct
an in-country validation prior to review by the senior
executives committee. For renewals and amendments, conduct
subsequent in-country validations at appropriate intervals.
f. Document the results of the in-country validation. Provide
the results to appropriate individuals and organizations,
including the senior executives committee.
g. Provide administrative support to the senior executives
committee and maintain a record of its meetings.
h. Approve foreign sales consultants invoices.
i. With the Law Department, provide support to the Senior Vice
President and General Counsel as required for matters
related to the administration and review of POL-14, this
procedure, and the operating segment procedures required by
2. A. 1. above.
C. Law Department
1. POL-1, "Delegation of Authority to Authorize Business
Transactions and Agreements, and to Commit Company Resources," at
paragraph 1.c. on page 15, delegates the legal aspects of
engaging foreign sales consultants to the Law Department. This
includes the following responsibilities:
a. Ensure compliance with Company Policy and regulatory
requirements.
b. Review and approve all foreign sales consultant agreements,
amendments, renewals and the files described in 3. A. 3.
above.
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c. With Contracts, develop and provide FCPA training to
Operating Group personnel, and FCPA and business practices
training to foreign sales consultants. Maintain a record of
such training.
d. Accomplish the marketing file review provided for in 3. A.
3. e. above.
e. With Contracts, provide support to the Senior Vice President
and General Counsel as required for matters related to the
administration and review of POL-14, this procedure, and the
operating segment procedures required by 2. A. 1. above.
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