As part of my shareholder proposal effort, I tried several ways starting in June 2001 to get the summary voting record of the 401K plan trustee- State Street, and also the analysis the BOD mentioned last year which showed the PVP [cash balance plan ] to be 'as good as' the previous plans. VIP refers to the 401K plan that employees could contribute to, and for which the company provided some matching $$. Among the options in the 401K was Boeing stock. But within the same umbrella was what Boeing called the FSP or Financial security plan [ basically unused sick leave hours converted to then $$, and since 1990 or so - invested in the same mix as the VIP plan -*except* no provision for Boeing stock. I still have funds in the FSP. The comments about access to documents are interesting. I
AFIK, Mr Johnson is NOT on the Employee Benefits committee [Plan Administrator ] but was cc'd on the same e-mail to the Chairman of the Committee- Jim Dagnon, and I note that today marks the 30th day since my first mention of the second request [for the analysis ] and about the 150th day since my first request for voting information. Since he specifically said this letter was in answer to my request to the Committee- [NOT in reference to my stockholder/proposal questions ] , one wonders what hat(s) he is wearing :-)
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[From James C. Johnson, Vice President, Corporate Secretary & Assistant General Counsel] VIA FAX NOV 16 2001
- OCR COPY BELOW..
Dear Mr. Shuper
This responds to your message of October 31, 2001 requesting the Employee Benefits Committee to produce two categories of information on the grounds that such production is required pursuant to Section 104 of the Employee Retire Income Security Act ("ERISA")
First Request
Your first request relates to 69 million shares of Boeing stock held in trust by State Street Bank and Trust Company ("State Street"), the trustee of the Company's Voluntary Investment Plan (the "VIP") and Financial Security Plan (the "FSP"). This request appears to encompass the following information: (a) a summary of how such shares were voted at the 2001 annual meeting, with respect to the election of each director and with respect to shareholder proposals 2 through 9: (b) the total number of employees holding such shares; and (c) the percentage of employees who provided instructions to State Street for these votes.
The Committee is not required to produce this information under ERISA Section 104. Under ERISA Section 104, the Committee must produce covered documents to a participant or beneficiary. Our records do not show you to be a participant or beneficiary in the VIP. And, Boeing stock is not an investment option in the FSP. Therefore, ERISA Section 104 does not entitle you to any voting information from State Street Bank.
Even if you were a VIP participant or beneficiary, as you have recognized ERISA Section 104 requires a plan administrator to produce certain enumerated documents and "other instruments under which the plan is established or operated" The Ninth Circuit has addressed the scope of the "other instruments" aspect of ERISA Section 104, as follows:
As the legislative history bears out the documents contemplated by § 104(b)(4) are those that allow "the individual participant [to] know[] exactly where he stands with respect to the plan-- what benefits be may be entitled to, what circumstances may preclude him from obtaining benefits, what procedures he must follow to obtain benefits, and who are the persons to whom the management and investment of his plan funds have been entrusted." (Citations omitted.)
Hughes Salaried Retirees Action Committee v Administrator of the Hughes Non-Bargaining Retirement Plan, 72F.3d 686,690 (9th Cir. 1995). The U.S Department of Labor has likewise commented on this legislative history, concluding that participants should have " access to documents that directly affect their benefit entitlements under an employee benefit plan" [Emphasis supplied ) DOL Adv. Op. 96-14.
The voting information that you have requested does not define the establishment or operation of the VIP or directly affect your benefits under the VIP. In fact, as stated above, your VIP benefits have been previously distributed.
The Company has previously responded to your request for voting information. The Company's response included an explanation of Its Confidential Voting Policy (the Policy). The purpose and terms of the Policy prohibit disclosure of the voting Information you request, even in summary form and without individual identifiers. Also the loyalty and exclusive benefits rules under ERISA may make disclosure of plan- specific voting data Inappropriate In a case like this where participant knew of or received communications about the Policy beforehand and had an expectation of confidentiality.
To be sure you are aware of the availability of the final vote tallies for the director elections and each of proposals 2 through 9, they were published in the Company's Form 10-Q for the quarter ended June 30,2001. The Form 10-Q is available on the Company's web site at www.Boeing.Com.
Second Request.
Your second request is for a copy of the"analysis" referred to by the Board of Directors in the Company's 2001 Proxy Statement in response to shareholder proposal 7. As you know, the scope of shareholder proposal 7 concerned the adoption of a policy to modify the benefits available under the Company's Pension Value Plan ("PVP").
Again, ERISA Section 104 does not entitle you to the information you have requested. Like the the VIP, our records do not show you to be a participant or beneficiary under the PVP. And, even If you were a PVP participant or beneficiary, ERISA Section 104 still would not require the disclosure of this type of document, which defines neither the establishment or the operation of the PVP.
Your second request leads to a practical response as well. The "analysis" referred to In the 2001 Proxy Statement simply does not exist in the form of any individual report or similar document. Instead, the Company considered a variety of opinions and information in analyzing the comparative benefits under the plans, including but not limited to the benefit formulas in the respective plan documents and the benefit outcomes for several hypothetical employers. This led to the Company's conclusion that 'different employees will be impacted differently" and, "overall the PVP provides a level of benefits that is very close to, and in some cases better than, the benefits provided by the prior plans.'
Finally, I invite you to provide more information regarding your unsupported assertion that you have 'reason to believe that virtually all benefit calculations for heritage Boeing employees since 1989-1990 have understated vested pension benefits on a yearly basis.'
The Committee would like to know about any such information and address it appropriately.
Very truly yours,
James C. Johnson
Corporate Secretary and
Assistant General Counsel.
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