On Feb 7th, 2002, I received a FAX from Perkins Coie. Seems that after a month, and at the last minute, Boeing has decided they do not like some of my words and want the offending statements removed. They also claim I have not properly documented certain statements. I'll be preparing a rebuttal to be faxed to the SEC by Monday -Feb 11. One thing the SEC has tried to make clear is that they prefer the word games be handled between the company and the proponent. I'll note that Boeing has never made any effort to contact me on any minor issue or clarification, but instead simply sends a letter to the SEC , and as required by the rules, simultaneously notifies me. You be the judge as to the validity of their claims. I've hilited some of the words and phrases.
February 7,2002 VIA OVERNIGHT COURIER Securities and Exchange
Commission
Office of Chief Counsel Division of Corporation Finance Judiciary
Plaza
450 Fifth Street, N.W Washington, DC 20549
Re: Shareholder Proposal Submitted by [Shupers ] for Inclusion
in The Boeing Company 2002 Proxy Statement
Dear Sir or Madam:
We are counsel to The Boeing Company, a Delaware corporation ("Boeing"
or the "Company"). On November 14,200l Boeing received
a proposed shareholder resolution and supporting statement (together,
the "Proposal") from [Shupers] (the "Proponent"),
for inclusion in the proxy statement (the "2002 Proxy Statement")
to be distributed to the Company's shareholders in correction
with its 2002 Annual Meeting.
The Proposal relates to the Company's pension plans and states,
in relevant part:
Resolved: Shareholders request the Board adopt the following
policy:
(I) All employees vested at the time of conversion be given
a choice between their heritage plans or the Pension Value cash-balance
plan at time of termination or retirement.
(2) The cash balance plan to provide a monthly annuity at least
equal to that expected under the old pension plan, or an actuarially
equivalent lump sum.
Boeing responded to the Proposal by submitting a no-action request letter (the "no-action request letter"), dated December 18,2001, to the Securities and Exchange Commission (the "Commission"), notifying the Commission and the Proponent (who received a copy of the no-action request letter) of the Company's intention to omit portions of the Proposal from the 2002 Proxy Statement and form of proxy pursuant to Proxy Rules 14a-8(i)(3) and 14a-9. Boeing's no-action request letter is attached to this letter as Exhibit A.
On January 7,2002 Boeing received a copy of the Proponent's rebuttal
letter to the SEC (the "rebuttal letter"), a copy of
which is attached to this letter as Exhibit B.
Upon review of the rebuttal letter, the Company has determined
to file a brief supplement to its no-action request letter. Based
on the original no-action request letter and this supplemental
letter, we renew our request that the staff of the Division of
Corporation Finance (the "Staff ') confirm that it will not
recommend any enforcement action to the Commission if Boeing excludes
portions of the Proposal from its 2002 Proxy Statement.
In accordance with Rule 14a-8(j) under the Securities Exchange
Act of 1934, as amended, on behalf of Boeing the undersigned hereby
files six copies of this letter, including the Exhibits. One copy
of this letter, with copies of all enclosures, is being simultaneously
sent to the Proponent.
The Company believes its original no-action request letter
adequately addresses the arguments made in Proponent's lengthy
rebuttal letter, except as supplemented by this letter
.
1. Proponent stated in paragraph 5 of his original Proposal that
the Company "uses excess plan investment gains. . .
to pump-up earnings with non-spendable dollars. "
The Company in its no-action request letter argued that this allegation
"is properly excludable because it impugns the Company's
integrity by falsely and misleadingly implying that the Company
is using improper accounting procedures to falsify its earnings."
In his rebuttal letter, Proponent suggests that the false and
misleading nature of this allegation can be remedied by adding
the word "legally" before the words "pump up."
This attempted "fix" does not work, because the statement
still accuses the Company of pumping up earnings, and by use of
that pejorative phrase, implies that the Company
has acted improperly. Accordingly, the entire statement should
be excluded from the Proposal.
2. Proponent stated in paragraph 3 of his original Proposal that
"The California Public Employees Retirement System
supported [last year's proposal and stated, 'CalPERS advocates
non-discrimination in retirement. "' The Company
in its no-action request letter argued that "Proponent should
specifically identity or provide factual support in the
form of a citation to a specific source for each of the facts
noted in the foregoing statement." In his rebuttal letter,
Proponent indicates that this information came from the Calpers
web site, http://www.calpers-governance.org/alert/proxy/.
In fact, no such information is currently contained
on the referenced web site. Since Proponent has not provided support
or a proper cite for this statement, the statement should be excluded
from the Proposal.
3. Proponent stated in paragraph 2 of his original Proposal that "Boeing improperly claimed that it could not comply with eligibility, vesting, benefit and funding requirements by giving employees a choice at retirement or termination." The Company in its no-action request letter argued that this statement is properly excludable because Proponent impugns the Company's integrity by falsely and misleadingly implying that the Company acted "improperly" in stating its position that implementing this portion of the Proposal would expose the Company to risks of noncompliance with the plan's governing instruments and ERISA. In his rebuttal letter Proponent cites a 1999 Department of Labor Pension and Welfare Benefits Administration Q & A as authority for the proposition that PVP participants could choose to switch back to Heritage Plan participation at the time of retirement or termination. In fact, the DOL cite merely stands for the proposition that at the time a new plan is being implemented employers can give employees who have reached a specific length of service or a certain age a prospective choice of staying with an old formula, not that the employees can be given a retroactive choice at the time they retire or terminate employment. Accordingly, since Proponent has provided no support for the allegation of improper conduct, the entire statement should be excluded from the Proposal.
Boeing anticipates that the 2002 Proxy Statement will be formalized
for printing on or about March 5,200 1. Accordingly, your prompt
review of this supplemental response would be greatly appreciated.
Should you have any questions regarding any aspect of this matter
or require any additional information, please call the undersigned
at -----
Please acknowledge receipt of this letter and its enclosures by
date-stamping the enclosed copy of this letter and returning it
to me in the enclosed envelope.
Very truly yours, J. Sue Morgan JSM:reh Enclosures cc: Donald
Shuper James C. Johnson, The Boeing Company
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