BAPROPOSAL

       HOMEPAGE

Rev 26 May 2001

BELOW IS MY SHAREHOLDER PROPOSAL and History

2001 BA Annual meeting -Shareholder Proposal # 7 Results

"Give certain retirees choice of pension plans"- as shown on proxy vote card- [misleading]- proposal was for current employees for choice AT retirement.

VOTES NUM VOTES % ELIGIBLE %PRESENT** %For/Against

FOR 52,305,968 6.27 8.72 * 8.95

AGAINST 532,071,551 63.81 88.72 91.05

ABSTAIN 15,352,396 1.84 2.56

Broker Non-Votes 118,849,28 14.25

* Over 3% allows proposal to be resubmitted next year.

**Votes that count under Delaware law are those present or by proxy and entitled to vote at meeting

Note that by clicking on colored /underlined portions you will be switched to related wording and issues as things evolved.

NOTE ; APRIL 12, 2001 SPEEA COUNCIL VOTED UNANIMOUSLY TO SUPPORT MY PROPOSAL ! **

So why should employees vote FOR # 7 ?

Board of Directors FINAL response 8 March and as included in proxy.

Board of Directors' FIRST response 5 March 3 days laterthey had to change this -;-D

Why BOD Changed their response - Seems they missed dates to notify me so . . . .

SEC Response to BA Feb 16th -Tells them they CAN publish without a few words - and that they lost the arguments

BOEING Request for a NO ACTION LETTER Dec 24,2000 In which they lay it on thick - and lose

MY Rebuttal Jan 23,2001- Since the 'ordinary business exclusion was already lost, I rebutted their ' false and misleading claims

MY Original Proposal - Which in the end, SEC * allowed * BA to leave out a few words if I did not remove them.

Link to Actual proxy Mine is number 7

What the "PLAN ADMINISTRATOR" says about Plan and Funding Doesn't quite match the BOD view, but then again the Plan Administrator cannot lie to ME by law. However the BOD is responsible to the shareholders and can [unless I catch them ;-D ]

A few proposal issues and notes

Suggestions as to how to check on YOUR pension and get FACTS.

REVISED IN ACCORDANCE WITH SEC FEB 16TH LETTER. - 423 words. AS PRINTED.

Resolved: the shareholders request that the Boeing Board of Directors adopt the following policy:

(1) All non-represented employees be given a choice between the old Boeing [ Heritage ] pension plans used prior to Jan 1, 1999, or the current 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.

Supporting Statements

Boeing announced in 1998, and implemented in 1999, a new pension plan for over 100,000 non represented employees. None were given a choice of old or new plans. The IRS has yet to determine the tax status of the Boeing Pension Value cash-balance plan. Without tax qualified status, participants can be taxed on the value of the benefit they earn under a company-sponsored retirement plan each year. The company also risks significant tax- liabilities.

The legality of cash-balance pension plans has been challenged in courts, are currently under government scrutiny, and have been the subject of extensive press coverage. In many cases, older workers have found out they now must work years longer to get the same benefits promised under the old plans. The EEOC has created a task force to gather information and complaints from employees relating to age-discrimination issues. Congressional hearings have been held, and related legislation has been promoted by corporate lobbyists.

Boeing offered the same plan to the Society of Professional Engineering Employees in Aerospace [ SPEEA ]. The cash-balance plan and the company offered medical insurance takeaways were a factor in the largest white collar strike in history. The company has never offered a reason for no choice of plans for current employees.

Some older employees must now work extra years to reach the same pension previously promised under the Heritage plans. To change the goal-posts for employees nearing retirement by using methods of questionable legality which have been the subject of government investigations for over a year is inappropriate for a company that wants to keep its best employees.

Cash-balance plans have incited huge protest meetings, union organizing, adverse media coverage, and Senate hearings. For example, an IBM shareholder proposal making a similar request last year got a shareholder vote of 28.4%, and support from organizations like CALPERS. [California Public Employees Retirement System]

Please encourage the BOD to keep their previous pension promises by giving an informed choice to the loyal employees who have helped make the company famous and profitable.

THANK YOU

BOARD OF DIRECTORS REVISED RESPONSE 8 MARCH

AS FINALLY AGREED TO 8 MARCH AM AFTER PHONE/FAX NEGOTIATIONS.

The word 'very" is in brackets because I "suggested " that Boeing delete it. Boeing elected to keep it. AREAS OF CHANGE IN BOLDFACE. ## FOR WORDS REMOVED
Board of Directors' Response
The Boeing Company designed its new pension plan, the Pension Value Plan or PVP, to provide a single plan for the Company's non-represented salaried employees. Before the PVP was implemented in 1999, these employees earned benefits under more than 20 different plans and formulas that were sponsored by the "premerger" companies: Boeing, McDonnell Douglas and Rockwell. The PVP was designed to provide a level of benefits that would be nearly equivalent to the benefits provided under the prior plans. The Company did not adopt the PVP to reduce pension-related costs. On the contrary, the PVP increased the Company's pension liability substantially, as was disclosed in the 1998 Annual Report.

The PVP is not subject to the same criticisms as other cash-balance plans because it includes important features that are different from most other cash-balance pension plans:

* The PVP preserves all benefits earned under the former plans, and allows these benefits to continue growing in proportion to the employee's salary.

* Employees began earning new benefits under the PVP formula immediately upon the PVP's implementation rather than having a "wear-away" transition period before they could accrue any new benefits under the cash-balance plan.

* The PVP increases the percentage of pay that is credited to the employee's cash-balance "account" as the employee's age increases. Thus, the PVP gives the Company's oldest employees nearly four times more benefit credits each year than their youngest counterparts receive.

The Company believes, based upon its analysis, that for most employees who were near retirement age or who had long service when the PVP took effect, there is little difference in projected retirement benefits. In fact, due to the PVP's unusual features and the extra costs associated with this change, the Company further believes (based again on its analysis) that many employees' projected PVP benefits are slightly higher than the projected benefits from their former plans. Of course different employees will be impacted differently. Contrary to the Proponent's Supporting Statement, 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.

The Proponent's Supporting Statement alleges that the Company has broken "previous pension promises" made to employees. As just discussed, the Company does not believe that any promise was broken. ### All benefits that employees had already accrued under their prior plans have been preserved, as required by federal pension law. Both federal pension law and the terms of the prior pension plans gave the Company the right to change its pension plans for the future, as long as it did not reduce the benefits employees had already accrued. Boeing exceeded its legal obligation to merely preserve accrued benefits by not only protecting all of the prior plans' accrued benefits, but providing for the future growth of those benefits in proportion to employees' future salary growth, instead of merely freezing the prior accrued benefits.

The Proposal's recommendation to permit employees to choose between the PVP and their former plan upon termination or retirement would undermine a primary purpose of the PVP, to create a single, simplified plan for all salaried non-represented employees. Employers are not required to offer their employees a choice between pension plans, and most employers do not,
for good business reasons. Large costs and significant administrative difficulties would be associated with maintaining numerous plans and benefit formulas, meeting the myriad federal regulations that apply to each plan, and offering and implementing employees' choices as they terminate or retire over a period of decades.

In summary, Boeing strives to provide its employees with a total compensation arid benefits package that is competitive and that helps the Company attract and retain the best performers. Management believes that the PVP meets these criteria, and that the PVP's generous, carefully thought-out transition measures have protected the transition-date work force. ### Boeing will continually review its benefit plans and programs, making changes where appropriate. At this time, the Board is satisfied that the measures recommended by the Proposal would be unnecessarily detrimental to the Company's pension and compensation programs.

The Board of Directors Unanimously Recommends a Vote AGAINST Proposal
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RECEIVED 5 MARCH 2001 - 6:20PM VIA E-MAIL

Board of Directors' First Response- Revised when I complaind about wording being fasle and misleading, and because they hd delivered it to me two weeks too late - not due to earthquake.
Board of Directors' Response

The Boeing Company designed its new pension plan, the Pension Value Plan or PVP, to provide a single plan for the Company's non-represented salaried employees. Before the PVP was implemented in 1999, these employees earned benefits under more than 20 different plans and formulas that were sponsored by the "premerger" companies: Boeing, McDonnell Douglas and Rockwell. The PVP was designed to provide a level of benefits that would be nearly equivalent to the benefits provided under the prior plans. The Company did not adopt the PVP to reduce pension-related costs. On the contrary, the PVP increased the Company's pension liability substantially, as was disclosed in the 1998 Annual Report.

The PVP is not subject to the same criticisms as other cash-balance plans because it includes important features that are different from most other cash-balance pension plans:

* The PVP preserves all benefits earned under the former plans, and allows these benefits to continue growing in proportion to the employee's salary.

The end result is that, for most employees who were near retirement age or who had long service when the PVP took effect, there is little difference in projected retirement benefits. In fact, due to the PVP's unusual features and the extra costs associated with this change, many employees' projected PVP benefits are slightly higher than the projected benefits from their former plans. Contrary to the Proponent's Supporting Statement, 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.

The Proponent's Supporting Statement alleges that the Company has broken "previous pension promises" made to employees. As just discussed, that is not true as a factual matter, because the PVP's overall level of benefits is nearly equivalent to the prior plans' benefit levels. The allegation also is not true as a legal matter. All benefits that employees had already accrued under their prior plans have been preserved, as required by federal pension law. Both federal pension law and the terms of the prior pension plans gave the Company the right to change its pension plans for the future, as long as it did not reduce the benefits employees had already accrued. Boeing exceeded its legal obligation to merely preserve accrued benefits by not only protecting all of the prior plans' accrued benefits, but providing for the future growth of those benefits in proportion to employees' future salary growth, instead of merely freezing the prior accrued benefits.

The Proposal's recommendation to permit employees to choose between the PVP and their former plans upon termination or retirement would undermine a primary purpose of the PVP, to create a single, simplified plan for all salaried non-represented employees. Employers are not required to offer their employees a choice between pension plans, and most employers do not, for good business reasons. Large costs and significant administrative difficulties would be associated with maintaining numerous plans and benefit formulas, meeting the myriad federal regulations that apply to each plan, and offering and implementing employees' choices as they terminate or retire over a period of decades.

In summary, Boeing strives to provide its employees with a total compensation and benefits package that is competitive and that helps the Company attract and retain the best performers. Management believes that the PVP meets these criteria, and that the PVP's generous, carefully thought-out transition measures have protected the transition-date work force from experiencing any notable disruptions in their pension benefits. Boeing will continually review its benefit plans and programs, making changes where appropriate. At this time, the Board is satisfied that the measures recommended by the Proposal would be unnecessarily detrimental to the Company's pension and compensation programs.

The Board of Directors Unanimously Recommends a Vote AGAINST Proposal

=====

MY PROPOSAL AS PUBLISHED.

SEC RESPONSE TO BOEING

February 16, 2001

Response of the Office of Chief Counsel

Division of Corporate Finance

Re The Boeing Company

Incoming letter dated December 22, 2000

The proposal requests that the board of directors adopt a policy that (1) all non-represented employees be given an informed choice between the pension plan used prior to January 1,1999 or the current cash-balance plan at time of termination or retirement. (2) the cash-balance plan provide a monthly annuity at least equal to that expected under the old plan, or an actuarially equivalent lump sum.

We are unable to concur in your view that Boeing may exclude the entire proposal under rule 14a-8(i)(3). However, there appears to be some basis for your view that portions of the proposal and supporting statement may be materially false and misleading under rule 14a-9. In our view, the proponent must:

- delete the word "informed" in the sentence that begins "All no-represented . . ." and ends "...or retirement "

- delete the sentence that begins "The IRS.. ." and ends". September 1999";

- delete the phrase "to retroactively approve such conversions; and

- provide factual support for the sentence that begins "Without a choice. .' and ends . . . turned it down".

Accordingly, unless the proponent~ provide Boeing with a proposal and supporting statement revised in this manner, within seven calendar days after receiving this letter, we will not recommend enforcement action to the Commission if Boeing omits only those portions of the proposal and supporting statement from its proxy materials in reliance on rule 14-B(i)(3)

We are unable to conclude that Boeing has met its burden of establishing that the proposal relates to Boeing's ordinary business operations. Accordingly we do not believe that Boeing may omit the proposal from its proxy materials in reliance on rule 14a-8(i)7.

Sincerely

Michael D.V. Coco Attorney-Advisor

BOEINGS REQUEST FOR A NO ACTION LETTER DEC 24,2000

[From Perkins-Coie Law Firm - OCR copy ]-SOME BOLDFACE ADDED Securities and Exchange Commission Office of Chief Counsel Division of Corporation Finance 450 Fifth Street, N.W. Washington, D.C. 20549

Re: Shareholder Proposal Submitted by Donald W. and Gertrude S. Shuper for Inclusion in The Boeing Company 2001 Proxy Statement

Dear Sir or Madam:

We are counsel to The Boeing Company, a Delaware corporation ("Boeing" or the "Company"). On November 16, 2000, Boeing received a proposed shareholder resolution and supporting statement (together, the "Proposal") from Donald W. and Gertrude S. Shuper (the "Proponent") for inclusion in the proxy statement (the "2001 Proxy Statement") to be distributed to the Company's shareholders in connection with its 2001 Annual Meeting.

We hereby notify' the Securities and Exchange Commission (the "Commission") and the Proponent of the Company's intention to exclude the Proposal from the 2001 Proxy Statement for the reasons set forth below. We request that the staff of the Commission's Division of Corporation Finance (the "Staff') confirm that it will not recommend any enforcement action to the Commission if Boeing excludes the Proposal from its proxy materials.

In accordance with Commission Rule ("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 and the Proposal, which is enclosed with this letter and marked as Exhibit A. One copy of this letter, with copies of all enclosures, is being simultaneously sent to the Proponent.

The Proposal relates to the Company's Pension Value Plan (the "PVP"), which is a cash-balance pension plan. The shareholder resolution in the Proposal states:

Resolved: The shareholders request that the Boeing Board of Directors adopt the following policy:

(1) All non-represented employees be given an informed choice between the old Boeing [Heritage] pension plans used prior to January 1, 1999, or the current Pension Value cash-balance plan at the 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.

We have advised Boeing that it properly may exclude the Proposal from the 2001 Proxy Statement and form of proxy. In particular, we believe that the Proposal may be omitted pursuant to Rule 14a-8(i)(3) because it is false and misleading and vague and indefinite. The next section describes the reasons for our conclusions in this regard.

1. The Proposal Is Materially False and Misleading.

Rule 14a-8(i)(3) permits the omission of a shareholder proposal if the proposal or its supporting statement is contrary to any of the Commission's proxy rules. These rules includes Rule 14a-9, which prohibits registrants from putting statements in their proxy statements that are "false or misleading with respect to any material fact, or which omit to state any material fact necessary in order to make the statements therein not false or misleading." In particular, the Staff has recognized that a proposal or portions of the proposal may be excluded under Rule 14a-8(i)(3) if they contain false and misleading statements. See Emerson Electric Co. (Oct. 27, 2000); The Boeing Co. (Chevedden) (Mar. 6, 2000).

As shown below, the Proposal should be excluded under Rule 14a-8(i)(3) because the Proposal portrays opinions as statements of fact, omits material facts, and contains other misleading information.

A. The proposed shareholder resolution asks that "[all non represented employees be given an informed choice between the old Boeing [Heritage] pension plans used prior to January 1, 1999, or the current Pension Value cash-balance plan at the time of termination or retirement."

This statement is false or misleading in several ways. First, the term "informed choice" is confusing and misleading. "Informed choice" is a concept used in medical malpractice law, not in pension law. When an employer changes pension plans, its notice obligations are controlled by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Company did in fact provide the notice required by ERISA to the non-represented employees who were affected by this change. See Exhibit B.

Second, the Proposal's request for "informed choice" may be interpreted as implying that Boeing did not provide sufficient information about the pension plan change to affected employees. This implication is false. As shown in Exhibits B-K, before the Company implemented the PVP, the Company repeatedly communicated with its work force about the forthcoming pension plan changes and the key features of the new plan.

The Company advised employees that all the pension benefits they had earned to date would be preserved and never decreased. See, for example, Exhibit B at 2. It informed them that "the rate at which you earn future benefits may be more- or less-than the rate at which you would have earned benefits had you continued under The Boeing Company Employee Retirement Plan." Id.

Boeing even solicited employees' questions about the forthcoming pension plan changes, so that it could "develop additional information to help [employees] better understand the Pension Value Plan." See Exhibit F. It is misleading to request "informed choice" while omitting any information about the Company's extensive communications to employees about the change.

Third, the Proposal is misleading because it may be interpreted as implying that this is just a simple matter of deciding to give employees a choice between the old Boeing pension plans and the PVP. That is not correct. Plan amendments making fundamental changes in the Company's pension plan would be required before such a choice could be given. Complicated actuarial analysis also would be needed to determine whether the proposed choice had any impact upon plan funding.

Fourth, the Proposal is misleading to the extent it may be implying that the "informed choice" could be made at the time of retirement or termination. ERISA and other laws impose specific eligibility, vesting, benefit and funding requirements. The Company could not comply with these requirements if participation were not determined until retirement or termination.

B. The proposed shareholder resolution further requests that the cash-balance plan "provide a monthly annuity at least equal to that expected under the old pension plan, or an actuarially equivalent lump sum."

This, too, is false or misleading in several ways. First, the language just quoted may be interpreted as implying that the cash-balance plan reduced benefits that had already been accrued by employees under the old Boeing plan. That is not true. There was no reduction in benefits that had been accrued as of the date on which the PVP took effect, and Boeing's communications to employees about the change in plans clearly informed them that their accrued benefits under the prior plan would not be reduced. See, for example, Exhibit B at 2 ("[The benefit that you have earned under The Boeing Company Employee Retirement Plan will be preserved and will never be decreased."). This is an employer's obligation under ERISA, and the Company made sure it fully satisfied this obligation.

In fact, the Company went beyond its ERISA obligation to merely preserve accrued benefits. The transition measures that were adopted for the PVP not only protected all of the prior plan's accrued benefits, but also provided for the future growth of those benefits. This is accomplished by carrying forward the retirement benefits that had been earned under the heritage plan as of the transition date, and then indexing those benefits with the employee's own post-transition salary growth. See, for example, Exhibit B at 2 (informing employees that the "heritage" pension benefits they had earned as of the PVP transition date "will increase with any salary increases that you earn between 1999 and the date of your retirement"). -[1] -

It is materially misleading for the proposal to omit any mention of this generous transition measure.

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[1] 'In addition to this protected, indexed retirement benefit from the old Boeing plan, on the transition date, employees began to accrue a new cash-balance retirement benefit from the PVP. See, for example, Exhibits C and L.

materially misleading for the Proposal to omit any mention of this generous transition measure.

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Second, the reference to what was "expected" under the old pension plan is misleading-especially when coupled with the Proposal's later use of the term "promised." It is fallacious to imply, as the Proposal does, that there were any valid expectations of continuing to accrue future benefits under the old pension plan. Federal pension law expressly recognizes that employers may modify or even terminate their pension plans, and the old pension plan expressly reserved the Company's right to terminate the plan, either in whole or in part.

Third, the proposed use of an undefined "expected" dollar amount for the computations that would be required by this part of the Proposal is misleading because it implies that such a dollar amount could be identified. In reality, no precise determinations of pension benefit amounts are possible until the employee actually retires, because the values of key variables like the amount of covered compensation are not known with certainty until that time.

C. The supporting statement says that "None [of Boeing's non represented employees] were given a choice of old or new plans." This misleadingly suggests that there was some obligation to give employees a choice between pension plans. In point of fact, a company has no such obligation, and most companies do not give employees a choice between old and new pension plans.

D. "The IRS has yet to determine the tax status of the Boeing Pension Value cash-balance plan. Without tax qualified status, participants can be taxed on the value of the benefit they earn under a company-sponsored retirement plan each year. The company also risks significant tax liabilities." This language is misleading because it implies that participants will be taxed on their benefits under the PVP (and that Boeing will incur significant tax liabilities) unless and until the IRS issues a determination that the PVP is tax-qualified. To the contrary, neither Boeing nor the PVP is legally required to obtain any determination from the IRS as to the PVP's tax-qualified status. The absence of such a determination does not, in and of itself, mean that participants will be taxed currently on the value of their benefits, or that Boeing will incur any additional tax liabilities. Moreover, the statements in the last two sentences could apply only if (1) the IRS specifically determines that the PVP is not tax-qualified, and (2) the IRS further decides to enforce such disqualification rather than permit Boeing to correct the deficiencies. The Company believes that this is a highly unlikely scenario

E. "In many cases, older workers have found out they must now work years longer to get the same benefits promised under the old plans." This statement is misleading because it implies that older Boeing workers lost accrued benefits. As discussed in section B above, that did not occur. Similarly, as discussed in that section, the word "promised" is false and misleading. The Company never promised to continue its old pension plan forever. Boeing's only commitment and obligation was not to reduce any pension benefits that had already been accrued. As already explained, the Company's treatment of accrued benefits went a great deal further than was required.

F. "Some older employees must now work extra years to reach the same pension previously promised under the Heritage plans. To change the goalposts for employees nearing retirement by using methods of questionable legality which have been the subject of government investigations for over a year is inappropriate for a company that wants to keep its best employees."

This passage is misleading in several aspects. First, as discussed in sections B. and E. above, the use of the word "promised" is misleading. The same is true of the rhetoric about "change[ing] the goal-posts."

Second, the language about the "same pension. . . under the Heritage plans is misleading because it again implies-contrary to the facts-that there was some reduction in benefits already accrued by participants in the Heritage plans.

Third, this passage misleadingly paints Boeing's PVP with the same brush as other companies' cash-balance plans. In reality, as the next paragraphs explain, both Boeing's transition measures and its plan design contain material differences from cash-balance plans adopted at other companies. - [2] -

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[2] One such plan is the IBM plan mentioned later in the Proposal. For the same reasons as discussed in text, it is misleading to compare Boeing's situation to IBM's.

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The transition to some cash-balance plans (but not Boeing's PVP) is accomplished by converting the employee's prior accrued pension benefit into a "starting balance," and then applying the cash-balance formula retroactively, to the employee's service under the prior plan. If this retroactive application of the cash balance formula yields a lower number than the cash-balance plan's starting balance, then ERISA requires the employer to guarantee a benefit equal to the starting balance. An employee in such a plan (not the PVP) begins accruing new benefits under the cash-balance plan only after the employee has worked enough additional time to "wear away" the difference between the starting balance and the benefit computed by retroactively applying the cash-balance formula. In contrast, under the PVP, employees begin accruing additional benefits immediately after their transition to the PVP.

Boeing's plan design also differs from the design of some companies' cash balance plans because Boeing's PVP increases the percentage of pay that is credited to the employee's cash-balance account as the employee's age increases. Under the PVP, older workers are credited with nearly four times more benefits every year than are similarly situated younger workers. See Exhibit C (the PVP's schedule of benefits credit percentages). In contrast, some other cash-balance plans do not favor older employees at all, but just use the same fixed percentage for all employees, regardless of age.

Certain commentators have criticized "wear-away" transitions as requiring employees to work extra years while receiving only the same pension benefit. Questions have been raised about the legality of cash-balance plans and/or such transition measures. However, Boeing's unique and generous approach to the PVP transition differentiates the PVP from the plans that have been the objects of these criticisms and questions. The Proposal misleadingly omits any information about the material differences of the PVP from other cash-balance plans. (See Exhibit L for more information about these differences.)

G. "The IRS has suspended approval of all cash-balance plan conversions since September 1999." This statement is false. The IRS has not suspended approvals of cash-balance plan conversions. Rather, it has instructed its personnel to refer open determination and examination cases involving the conversion of traditional defined benefit plan formulas to cash-balance formulas to its National Office for Technical Advice. While this referral may delay the issuance of determination letters on cash-balance conversions, it is not a suspension of approvals.

H. "The EEOC has created a task force to gather information and complaints from employees relating to age-discrimination issues." This is misleading because it suggests that the EEOC is taking a one-sided approach in its review. The EEOC says otherwise. A September 14, 1999 EEOC press release quotes Chairwoman Ida Castro as stating, "'Because of the complexity involved in the formulation, issuance and conversion of different types of pension plans, we want to hear from all stakeholders in order to reach fair conclusions and correct interpretations of the law."' The same press release states that the EEOC will "'foster a constructive and open dialogue with all parties that have an interest in this issue,"' and that the agency "'intend[s] to meet with and receive feedback from the employer, labor, and civil rights communities, as well as other federal agencies to determine the best course of action."'

I. "Congressional hearings have been held, and legislation has been promoted by corporate lobbyists to retroactively approve such conversions." This statement is confusing and misleading because it implies that cash-balance conversions will be legal only if retroactively approved by Congress. There is no law that requires congressional approval of cash-balance conversions, and the Company is unaware of any law that makes such conversions illegal per se. Although Congress has held hearings regarding cash-balance plans, it is unclear what, if any, action Congress is likely to take as a result of these hearings. Further, while legislation regarding cash-balance plan conversions has been introduced, the Company does not know whether any such legislation is being promoted by corporate lobbyists. Finally, as explained in section F above, many of the criticisms and questions about cash balance plans have focused on plan transition measures or design features that Boeing chose not to adopt. It is misleading to bring up these matters without disclosing the fact that the PVP has significant differences from other cash-balance plans.

J. "Boeing offered the same plan to the Society of Professional Employees in Aerospace (the "SPEEA'). Without a choice between old or new plans, the members turned it down. The cash-balance plan and the company offered medical insurance takeaways was a factor in the largest white collar strike in history."

These statements are false and misleading in several ways. First, SPEEA represents specific bargaining units of Boeing engineering and technical employees. By definition, Boeing's non-represented employees are not in those bargaining units. Including the discussion of SPEEA in the Proposal implies that SPEEA's reaction has some bearing on the benefits of the non-represented employees. That is false; SPEEA does not bargain for non-represented employees.

Second, while Boeing did offer the PVP to SPEEA, this occurred only in the context of collective bargaining for a whole new collective bargaining agreement. Contrary to what the Proposal implies, SPEEA was never presented with just the PVP, for the members' approval or rejection of the PVP alone.

Third, in several newsletters to its members, copies of which are enclosed as Exhibit M, SPEEA explained that the PVP was actually preferable in most circumstances to Boeing's predecessor plan, and that the Company had made every effort to avoid the problems associated with other types of cash-value pension plans.

In the Pension Value Plan, Boeing avoided the traps of other versions of cash-balance account retirement plans. Boeing did not terminate the old plan. Instead a snapshot of the employee's record is made. The benefit of the old plan is then indexed with the employee's salary until retirement.

SPEEA Newsletter (Sept. 19, 1999).

Under the new Pension Value Plan, Boeing included several plan features that protect older, longer service employees. The design team also included other provisions that differentiate the new plan from most other cash-balance pension plans. Boeing's Pension Value Plan includes special features that safeguard benefits against other problems described in [recent Wall Street Journal] articles.

SPEEA Newsletter (Oct. 15, 1999).

In short, SPEEA spoke favorably of the new plan to its members. It is therefore inaccurate, misleading, and speculative for the Proponent to say that the PVP was a significant factor in the SPEEA strike. The PVP was not a central issue in the negotiations before or during the strike.

K. "Cash-balance plans have incited huge protest meetings, union organizing, adverse media coverage, and Senate hearings." This sentence is misleading because it falsely implies that the Boeing PVP was the subject of "huge" protest meetings, union organizing, adverse media coverage, and Senate hearings.

Here again, it is misleading not to disclose the specific and substantial differences between the PVP and other companies' cash-balance plans. Moreover, the sentence speculates about the causal effect of cash-balance plans on union organizing, and uses exaggeration or hyperbole (Huge" or "incited").

In summary, the Proposal should be omitted from the proxy materials as contrary to Rule 14a-9, because the Proposal is replete with misleading statements, material omissions, opinions cast as fact, and other false statements.

2. The Proposal Is Vague and Indefinite.

Even if the Proposal were not excludable under Rule 14a-8(i)(3) as false and misleading, we believe that the Proposal may be omitted pursuant to Rule 14a-8(i)(3) because it is vague and indefinite.

The Staff has determined that the types of proposals that are excludable under Rule 14a-9 include proposals involving "vague and indefinite determinations.., that neither the shareholders voting on the proposal, nor the company would be able to determine with reasonable certainty what measures the company would take if the proposal was approved." A.H. Belo Corp. (Jan. 29, 1998). See, for example, Cornshare Inc. (Aug. 23, 2000) (excluding proposal relating to Comshare not "discriminating among directors based upon when or how they were 'elected" and "try[ing] to avoid defining change of control based upon officers or directors as of some fixed date."); Wendy~ International, Inc., (Feb. 6, 1990) (excluding proposal that requested company to "eliminate all anti-takeover measures" because wording was vague and unclear as to measures and the method that should be used to eliminate them).

The Proposal is vague and indefinite, because it simply requests that "non- represented employees be given an informed choice between the old Boeing [Heritage] pension plans used prior to January 1, 1999, or the current Pension Value cash-balance plan at "the time of termination or retirement." Without more, the Proposal gives the Company and shareholders little guidance to determine with reasonable certainty what measures the Company would take if the Proposal were approved. For example: (1) Who and what determines what constitutes an "informed choice"? (2) Is the Company supposed to delay the informed choice until the actual "time of termination or retirement," which for some employees will be decades hence?

A proper shareholder proposal must provide the Company and shareholders a reasonable degree of certainty about what measures the Company must take if the Proposal is approved. The Proposal does not and is therefore properly excludable under Rule 14a-8(i)(3).

3. The Proposal Improperly Addresses Matters Relating to the Company's Ordinary Business Operations.

The Proposal improperly addresses a matter relating to the conduct of the Company's ordinary business operations: the administration by the Company of its employee benefits plans. The Commission has long recognized that proposals concerning pension, health, and other benefits for a corporation's employee population relate to the ordinary business operations of a corporation, and the Staff has consistently concurred in the omission-both under Rule 14a-8(i)(7) and its predecessor, Rule 14a-8(c)(7)-of proposals regarding employee retirement, health, medical, and other welfare benefits.

In seeking such relief, the Company respectfully requests that the Staff reconsider its recent application of Rule 14a-8(i)(7) to another cash-balance pension plan proposal in International Business Machines Corp. (Feb. 16, 2000) ("IBM'). As can be seen from the discussion in the prior sections of this letter, the Proposal, if not deemed false and misleading or so vague and indefinite as to defy implementation, would involve shareholders in the very type of micro-management of the Company's ordinary business operations that Rule 14a-8(i)(7) was designed to prevent. See, for example, International Business Machines Corp. (Dec. 30, 1999) (proposal mandating that IBM adjust its defined benefit plan pensions to mitigate the impact of increases in the cost of living for its retired employees). The social and corporate policy issues raised by conversions of traditional defined benefit pension plans to cash-balance plans, as noted by the Staff in IBM~ may merit exemption of properly crafted shareholder proposals from the Rule 14a-8(i)(7) ordinary business exclusion. The Proposal in this instance involves such detailed management of the implementation of the Company's pension plans, and reveals such misunderstanding of the practical implications and legal requirements governing such plans, that it is clearly the type of action that should remain in the province of the Company s ordinary business operations.

In sum, because the Proposal, if it could be implemented, would address matters relating to the ordinary business operations of the Company, we believe the

Proposal is properly excludable from the 2001 Proxy Statement pursuant to Rule 14a8(i)(7).

For the foregoing reasons, we believe that the Proposal may be omitted from the 2001 Proxy Statement and respectfully request that the Staff confirm that it will not recommend any enforcement action if the Proposal is excluded.

Boeing anticipates that the 2001 Proxy Statement will be finalized for printing on or about March 5, 2001. Accordingly, your prompt review of this matter would be greatly appreciated. Should you have any questions regarding any aspect of this matter or require any additional information, please call me at (206) 583-8447.

Please acknowledge receipt of this letter and its enclosures by stamping the enclosed copy of this letter and returning it to me in the enclosed envelope.

Very truly yours, J.Sue Morgan

---- THERE WERE ABOUT 20 PAGES OF EXHIBITS ENCLOSED -- NOT POSTED HERE....

HERE IS MY REBUTTAL - APPARENTLY THE SEC MOSTLY AGREED WITH ME. HOWEVER, THE SEC DOES NOT RULE PER SE ON FALSE AND MISLEADING

=====

Securities and Exchange Commission Office of Chief Counsel Division of Corporation Finance

Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549

Re: Shareholder Proposal Submitted by Donald W Shuper

Boeing letter of 22 Dec 2000, Intention to Exclude submitted by Perkins-Coie LLP.

Subject: Rebuttal to Boeing claim of violation of 14a-8 sections in our proposal.

Dear Sir or Madam:

This letter is in response to the Boeing letter of 22 December seeking to omit our proposal under sections of 14a-8(i)(3) claiming "False and Misleading " and their claim under 8(c)7 "Ordinary Business "

1. Boeing claim that proposal is "Ordinary Business."

Boeing's argument to exclude is based on the ordinary business exception depends on the SEC agreeing to Boeing's request to overturn its decision last year on a similar resolution at IBM. In that decision the SEC decided that the cash balance plan issue was a significant corporate and social policy issue. While Boeing's argument hinges on the SEC overturning that decision, Boeing fails to offer any argument as to why cash balance plan conversions are not significant corporate or social policy issues. Since Boeing has given no reason for the SEC to overturn its decision in IBM. it can not have met its burden under 8(j)2(ii).

A We note that while Boeing has claimed to exclude under "Ordinary Business ", they have failed to address the underlying reason the Staff approved a similar proposal relating to cash-balance pension conversions, which was " . . . that proposals relating to the conversion from traditional defined benefit pension plans to cash-balance plans cannot be considered matters relating to a registrants ordinary business operations. " Instead,Boeing implored the Commission to re- examine their decision in IBM -[Feb16, 2000]. Since the IBM proposal was approved by the SEC, a comparative look at the two proposals is in order.

The IBM proposal:

Resolved: The shareholders request that the IBM Board of Directors adopt the following policy:

(1) All employees, regardless of age, will receive the same long-promised retirement medical insurance and pension choice as employees who are within five years of retirement.

(2) The portable cash balance plan will provide a monthly annuity equal to that expected under the old pension plan or a lump sum that is actuarially equivalent.

Our Boeing proposal:

Resolved : The shareholders request that the Boeing Board of Directors adopt the following policy:

(1) All non-represented employees be given an informed choice between the old Boeing Heritage pension plans used prior to Jan 1, 1999, or the current 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.

There are no substantive differences in our proposal. Both are precatory, both can be implemented, and are identical except for specific company and employee classification differences. Since our proposal stays with the same issue and with similar wording as the IBM cash balance proposal, the SEC decision applies equally to our cash balance proposal at Boeing. IBM is not seeking reconsideration for a similar resolution submitted for the 2001 season,but is inserting that resolution in their proxy. Among other companies that have given pension plan choices to employees are Kodak, Motorola, and AT&T.

B. Boeing does not claim that the issue raised here is not a significant corporate and social policy issue. Our proposal is equal to the IBM proposal in substance and issue. Boeing attempts to parse words are misplaced. For example, the complaint about "informed CHOICE " is misleading, as the legal term is " informed CONSENT." Informed consent - A person's agreement to allow something to happen, (such as surgery) that is based on a full disclosure of the facts needed to make the decision intelligently, ie; knowledge of risks involved, alternatives, etc. [ Blacks law dictionary Abridged 6th Edition ].

However, if the SEC agrees with Boeing as to any material false and misleading statements resulting from our choice of words, we will immediately make such changes as necessary to correct the problem. For example, we would offer to drop the word "informed. "

C. After claiming our proposal should be omitted under 14-8(i)3 for various issues, : e.g "vague and indefinite ", " little guidance " , " must provide . . . certainty ", Boeing then goes on to claim " micro-management " "detailed management " etc. under 8(c)(7) Which is it? Boeing wants it both ways , arguing that it is either too vague or too detailed. Boeing has ducked the obvious answer - which is neither. Our proposal is advisory, precatory, and in accordance with a previous determination on the same issue.

2. Boeing claims the Proposal Is Materially False and Misleading.

A. Boeing wants the Commission to believe it is a violation of ERISA to wait until termination before making a pension choice.

" Fourth, the Proposal is misleading to the extent it may be implying that the "informed choice" could be made at the time of retirement or termination. ERISA and other laws impose specific eligibility, vesting, benefit and funding requirements. The Company could not comply with these requirements if participation were not determined until retirement or termination."

The Boeing claim is materially false and misleading.

Other companies have complied with ERISA in this regard [ choice at retirement or termination ] as shown below:.

"After negotiations with AT&T in two more rounds of bargaining, CWA finally was able to reach agreement last year on a formula to phase in a cash balance plan in a way that provides the desirable portability feature and yields only pension improvements - with no benefit reductions - for the entire union-represented work force. Workers with 15 years or more of service as of July 30, 1998, may choose to receive benefits either under the traditional defined benefit plan or the cash balance account and they can make the choice at the time of retirement so that it is completely clear which is best for them at that stage of life." [ Morton Bahr CWA President [Communication Workers of America ] from the CWA News, October 1999.]

B. Boeing admits that "the rate at which you earn future benefits may be more- or less-than the rate at which you would have earned benefits had you continued under The [heritage] Plan", then Boeing argues that our use of the word expectation or promise is improper. Boeing then tries to argue that our use of the words ' moving the goalposts ' is improper. Perhaps this quote from the Oklahoma City University Law Review [Vol. 25] by Jonathan Barry Forman Professor of Law.suitably refutes their claim. "So what's the problem? Simply put, replacing a traditional pension plan with a cash balance plan will reduce the expected pension benefits of older workers". Obviously for some people, they will have to work longer to reach the same benefits expected under the old plan.

C. Boeing objects to the "promise" wording. However, the term is used by professionals in the benefits arena as shown in the following extract . "As noted, defined contribution plans provide for contributions allocated each year to each participant, while defined benefit plans typically state a benefit promise in terms of an annual benefit commencing at normal retirement age." The above can be found at http://www.ustreas.gov/press/releases/ps108.htm Treasury Benefits Tax Counsel J. Mark Iwry [testifying before the] Senate Committee On Health, Education, Labor And Pensions.

D. Boeing mis-states our comments about the PVP [Pension Value Plan] and the strike of 20,000 white collar workers, then claims our statement is misleading. We said "The cash-balance plan and the company offered medical insurance takeaways was "a factor" in the largest white collar strike in history." Boeing then claims :

"It is therefore inaccurate, misleading, and speculative for the Proponent to say that the PVP was a significant factor in the SPEEA [Society of Professional Engineering Employees in Aerospace] strike. The PVP was not a central issue in the negotiations before or during the strike.'

We did not say the PVP was "significant" or "central" to the negotiations or strike.

Boeing has made materially false and misleading statements about SPEEA comments about the PVP. Mr Stan Sorscher, the employee most familiar with the PVP [Pension Value Plan], and on the SPEEA negotiation team involved in all aspects of the pension and benefit negotiations has provided the following statements in response to the company allegations. [Boeing Exhibit M reference added ]

[Mr Sorscher] " I see 4 assertions.

1) Represented vs non-represented.

That point is irrelevant to your proposal.

2) Retirement in the context of collective bargaining.

It is fair to say that many members were anxious about the PVP. In the context of collective bargaining, the transition to PVP was definitely an area of concern, and one way to address that concern was to offer a choice for a period of several years. This was discussed in collective bargaining, but not presented in any management offer submitted to the members for a vote.

3) "SPEEA spoke favorably" about PVP. [Boeing exhibit M- SPEEA Newsletter

(Sept. 19,1999) - bottom right section titled " Winners and Losers "].

[Mr Sorscher] " SPEEA said switching to the PVP will create winners and losers.

Boeing's assertion that SPEEA said the PVP was "preferable in most circumstances" is false and misleading.

We said there would be winners and losers. In fact,the retirees are not evenly distributed among the various possible circumstances. Among the "losers" under PVP are people with high salary growth who retire at 55. In fact, recent high attrition, particularly in the spring and summer of 2000, was biased toward those with high salary growth and early retirement. (http://www.SPEEA.org/hotissues/files/attrition/attrition5.html)

4) PVP avoided problems with other cash balance plans.

While the PVP could have been worse, it could also be better. Many employees have expressed concerns about the conversion, and anxieties about the plan are still expressed in the workplace. Your proposal to offer a choice, particularly for a transition period of several years is reasonable, practical, and has been used by other companies to acknowledge and address legitimate concerns of employees."

[ Stan Sorscher ] -End of Statement -

E. Boeing complained about our characterization of IRS Tax status. [Boeing item 1-D.]

Boeing's complaint is materially false and misleading. Boeing sent out a legal notice about its tax-qualified [pension] plans, including the PVP. Since Boeing is arguing with Boeing, all of their statements and arguments re liability, status, and related legal issues should be ignored and considered materially false and misleading..

[Extract follows] [Emphasis added] [EXHIBIT S1 attached ]

INFORMATION ABOUT THIS LEGAL NOTICE November 22, 2000

Every few years, the Company is required to submit its tax-qualified plans, including any amendments to those plans that have been adopted since the last submission, to the Internal Revenue Service (IRS) for a review of their continuing tax qualification. Tax-qualified plans are allowed to offer tax advantages to participants. Without tax qualified status, participants [would not be allowed to make pretax contributions to a defined contribution plan and] WOULD be taxed on the value of the benefit they earn under a Company-sponsored retirement plan each year.

Our supporting statement:

"The IRS has yet to determine the tax status of the Boeing Pension Value cash-balance plan. Without tax qualified status, participants CAN be taxed on the value of the benefit they earn under a company-sponsored retirement plan each year. The company also risks significant tax liabilities."

Note that we use a less imperative word than "would".

F. Boeing claims our use of word ' suspend" is misleading. [Boeing item 1-G]

"The IRS has suspended approval of all cash-balance plan conversions since September 1999." This statement is false. The IRS has not suspended approvals of cash-balance plan conversions . . . While this referral may delay the issuance . . . "

Our point is here that suspend and delay are common synonyms. Freeze is another word used to describe the delayed approval process. This extract from an article by Bob Rosenblatt published in the Los Angeles Times on Wednesday, Dec.15, 1999 and distributed to hundreds of other papers through the LA Times-Washington Post news service, also describes the EEOC actions we have mentioned. "Workers' 'Cash Balance' Pension Plan Revolt Spreads"

" They called news conferences, lobbied in Washington and prompted congressional hearings. The publicity generated by the IBM controversy caused an upsurge of interest among workers who paid little attention before when their employers changed plans. Meanwhile, the controversy led the Internal Revenue Service to freeze any new approvals of cash balance plans. The IRS has jurisdiction over the finances of such plans because company contributions are tax deductible. The EEOC, in addition to handling individual complaints, also is studying whether to issue a general policy statement giving guidance to employers on the issue, Castro said."

The above also supports our description about the EEOC and legislation activities that Boeing has complained about in sections H and I.

3. In further response to Boeing complaints in sections H and I, dealing with our description of EEOC " . . .to gather information and complaints " and our description of related legislative activities and hearings, we offer part of a recent EEOC release which we believe supports our statements.

"Cash Balance Task Force: EEOC created an internal task force to guide the Commission in its review of cash balance pension plans. The Task Force's mandate is to recommend to the Commission whether cash balance pension plans - which reduce the "expected" retirement benefits of older employees, while increasing the benefits to younger workers - are unlawful under the Age Discrimination in Employment Act (ADEA). During FY 2000, EEOC received approximately 800 charge filings [of] alleged ADEA violations in cash balance pension plans." from: EEOC Accomplishments Report for Fiscal Year 2000

Boeing in section I also states "Further, while legislation regarding cash-balance plan conversions has been introduced, the Company does not know whether any such legislation is being promoted by corporate lobbyists." Boeing knows or should know the following : ERIC- the ERISA Industry committee is a well known corporate lobbying organization. Boeing is a sponsor.

From their website at http://www.eric.org. "The ERISA Industry Committee (ERIC) is a non-profit association committed to the advancement of the employee retirement, health, and welfare plans of America's major employers. "

Further: at http://www.eric.org/VitalConnection.htm#board, the ERIC Board of Directors is listed- including Nancy B. Cannon -The Boeing Co. Ms. Cannon is also the Boeing Director, Employee Benefits, and as Secretary to the Employee Benefits Committee [ Plan Administrator ], her signature can be found on form 5500 filings. ERIC opposes improved disclosure; " If, contrary to ERIC's position, Congress decides that it should enact legislation to increase the disclosure requirements that apply when a traditional pension plan is converted to a cash balance design . . ."

From January 10,2001 release: 2001 Comments Of the ERISA Industry Committee In Response To The Department Of Labor's Request For Information concerning The Disclosure Obligations Of Fiduciaries Of ERISA- Governed Employee Benefit Plans.

Since a knowledgeable company Director of Benefits is also a ranking member of ERIC, the Boeing statement about ' . . . the Company does not know . . . " is materially false and misleading.

======

Summary:

We believe we have answered and refuted all of Boeing's allegations.

Boeing has given no reason why the staff was incorrect last year and no reason for reconsideration this year as to the ordinary business exception. Nor have they argued that the issue [ cash-balance conversions ] raised here is a NOT a significant corporate and social policy issue

Boeing objections under Materially False and Misleading are in themselves false and misleading, therefore, Boeing has not met its burden under the rules or offered a basis for the resolution to be omitted..

We are willing to address or amend word changes to our proposal or supporting statements if the SEC finds that there are any false or misleading statements in the resolution.

We will have e-mailed a copy of this to Ms Morgan of Perkins Coie in an sincere attempt to resolve any minor issues prior to faxing this to the SEC and Boeing. Six copies will follow by mail.

Should you have any questions or suggestions regarding this matter, please contact me . .

.- EXHIBIT S1- BOEING LEGAL NOTICE OF NOV 22ND. - 5 PAGES-NOT INCLUDED HERE

====

HERE IS MY ORIGINAL PROPOSAL - WITH LINKS TO WHAT SEC SUGGESTED BE CHANGED

Resolved: the shareholders request that the Boeing Board of Directors adopt the following policy:

(1) All non-represented employees be given an informed choice between the old Boeing [ Heritage ] pension plans used prior to Jan 1, 1999, or the current 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.

Supporting Statements
Boeing announced in 1998, and implemented in 1999, a new pension plan for over 100,000 non represented employees. None were given a choice of old or new plans. The IRS has yet to determine the tax status of the Boeing Pension Value cash-balance plan. Without tax qualified status, participants can be taxed on the value of the benefit they earn under a company-sponsored retirement plan each year. The company also risks significant tax- liabilities.
The legality of cash-balance pension plans has been challenged in courts, are currently under government scrutiny, and have been the subject of extensive press coverage. In many cases, older workers have found out they now must work years longer to get the same benefits promised under the old plans. The IRS has suspended approval of all cash balance plan conversions since September 1999. The EEOC has created a task force to gather information and complaints from employees relating to age-discrimination issues. Congressional hearings have been held, and legislation has been promoted by corporate lobbyists to retroactively approve such conversions.
Boeing offered the same plan to the Society of Professional Employees in Aerospace [ SPEEA ]. Without a choice between old or new plans, the members turned it down. The cash-balance plan and the company offered medical insurance takeaways was a factor in the largest white collar strike in history. The company has never offered a reason for no choice of plans for current employees.

Some older employees must now work extra years to reach the same pension previously promised under the Heritage plans. To change the goal-posts for employees nearing retirement by using methods of questionable legality which have been the subject of government investigations or over a year is inappropriate for a company that wants to keep its best employees.

Please encourage the BOD to keep their previous pension promises by giving an informed choice to the loyal employees who have helped make the company famous and profitable. THANK YOU.

HOMEPAGE

SEC APPROVAL FEB 16,2001

BOEINGS REQUEST FOR A NO ACTION LETTER DEC 24,2000

MY REBUTTAL JAN 23,200

MY ORIGINAL PROPOSAL

The letter below is a result of my query about pension surplus numbers. I specifically wrote to the plan administrator so as to be able to get a 'truthful' answer. There are a few sections I have hilited and cross linked to the BOD response to my shareholder proposal. the point being that the3 BOD says the change was significant- the Plan administrator says it is only a formula change...

[OCR COPY - NUMBERS CHECKED TO ORIGINAL ]
February 6, 2001
Mr. Donald Shuper
xxxx
Dear Mr. Shuper:

Your e-mail regarding The Boeing Company's pension income, which was addressed to Jim Dagnon and dated January 17, 2001, has been forwarded to me for response.

In your e-mail, you requested a history of the Company's pension income and how it has been reflected in the Company's financial results. You also expressed concern that Boeing has used the pension income to inflate earnings and has not provided complete, accessible disclosure of the income. In addition, you cite several sources which indicate that Boeing has reflected substantial pension income in its books to make profit margins and earnings look more favorable than they otherwise would have.

I would like to address each of your concerns individually. To start, since 1997, Boeing's pension income, earnings before income tax, and net income are as follows (dollars are in millions):
1997
1998
1999
Pension income/(expense) $(65)
$121
$125
Earnings(losses) before income tax and interest expense (256)
1,567
3,170
Net income (losses) (178)
1,120
2,309

All of the above figures come from the 1999 Boeing Annual Report. The pension income appears on page 65. The two earnings items appear on page 51. The 2000 results are not yet available but will appear in the 2000 Annual Report and in the 10-K, which we expect to file in early March.

The above figures show that your second concern, the potential for Boeing to inflate its financial results by using pension income, has not occurred. Before 1998, Boeing reflected pension expense rather than income. In 1998 and 1999, pension income represented 10.8% and 5.4% of net income and 7.7% and 3.9% of operating earnings.

The Company fully discloses the development of its pension income (expense) and the funded status of the pension plans in the financial footnotes. As you mentioned, the I development of the pension-related financial figures is governed by Financial Accounting Standard No. 87 (FAS87). Companies have only limited discretion in the development of these figures. The underlying methods and assumptions are closely monitored by the SEC and carefully audited by public accounting firms (in Boeing's case, Deloitte & Touche). Boeing discloses its assumptions in the footnote so that the investment community can compare Boeing's assumptions to those used by other companies. Historically, Boeing's methods and assumptions tend to be slightly conservative, but always well within the guidelines established by the SEC.

In addition, the Company is aware that many informed investors and analysts carefully scrutinize the underlying detail disclosed in the benefits footnote. Discrepancies, anomalies, omissions, or aggressive assumptions would be noticed immediately.

Each year, Boeing examines the effect that pension income and its companion expense, the FAS 106 retiree medical and life insurance expense, have on operating earnings and net earnings. In the event that these items have a significant effect on earnings, or if an extraordinary event occurs, pensions and other post-retirement benefits will be included in Management's Discussion and Analysis (MD&A).

Boeing is aware that the sustained bull market during the past decade has resulted in significant investment returns in the pension plans' trust funds. Not all of these gains have been recognized yet in the FAS87 pension income. Because FAS87 requires that these gains be recognized in an orderly fashion, Boeing anticipates that FAS87 pension income will increase substantially over the next few years. The size of these unrecognized gains and their expected effect on future pension income is discussed in 1999 Annual Report's MD&A on page 33. Although the 2000 pension income has not yet been disclosed, Boeing has indicated to investment analysts that the figure will be several hundred million dollars greater than the $125 million income in 1999.

You also expressed concern that Boeing might not have complied with the SEC Chief Accountant's Audit Risk Alert dated December 22, 1999. In reviewing the Alert (which is quite lengthy), I am guessing that you are concerned that Boeing might have failed to disclose a risk or extraordinary event created by a change in pension plans. The Alert specifically addresses employee pension plan changes that "could be expected to have a material impact on the results of operations and cash flows of those companies." As explained below, such an event did not occur at Boeing.

On January 1,1999, Boeing did establish a cash balance plan for a large portion of its salaried employees. However, the change in plan provisions did not significantly change the benefits already earned, the amount of benefits to be earned in the future, the existing obligation, expected future obligations, or funded status. The change was primarily one of benefit formula in order to bring the employees of the three heritage companies under a single plan. The change was disclosed in Financial Footnote 14, on page 67 of the 1998 Annual Report, and the increase in the pension obligation was explicitly quantified at $420 million.

Management evaluated whether the change was significant enough to discuss in the MD&A, but decided that the $420 million increase out of a total pension liability of $28,887 million did not constitute a significant change in financial position.

Your final concern relates to several publications that conflict with the above facts. These articles imply that Boeing has indeed experienced substantial pension income, distorting the Company's financial statements. As you mentioned in your e-mail, a Wall Street Journal article that appeared on September 20, 1999, cited a Bear Stearns study that had calculated Boeing's 1998 pension income to be 31% of total income. The Journal misquoted the Bear Stearns study; the true number was 7.7%. As for the quote from the July 2000 Aviation Week article, Boeing's 1999 pension income was $125 million. I do not know how the reporter arrived at a $500 million figure.

I hope that the above information addresses your concerns. I would like to emphasize that Boeing intends to continue complying with all of the financial accounting standards that relate to pensions and other post-employment benefits. More important, Boeing recognizes that full, straightforward disclosure of how benefits-related expense and obligations are developed, and how they are reflected in the Company's financial statements, are of utmost importance to the Company's integrity and to all of the Company's stakeholders -- employees, plan participants, and the investment community.

Sincerely yours,
Julie Curtis
Director of Actuarial Services
Cc: Jim Dagnon

WHY THE BOD HAD TO REVISE THEIR FIRST STATEMENT

SEC rules require that they supply me the statement against at least 30 days prior to filing date [ March 22 ] Since Boeing was late, [ not due to earthquake ] , they ran the risk of being hammered by the SEC which might have forbid them to make any statement. When I notified them of my complaint and my intent to contact the SEC the following day, it got their attention. ;-D

Below is the FAX I sent them on a Tuesday afternoon- they responded by 7 pm [ I was at the Opera], and called at 9;05 AM the next day. Discussion/negotiations lasted about 20 minutes, they faxed me a changed version, and I approved it within about 20 minutes. Yes I could have done better, and *may* have been able to surpress any response, but this game is just starting. . .

DRAFT OF COMPLAINT AND REQUEST FOR CORRECTION

**** I have used uppercase for those words that should be changed/deleted - and enclosed in [ ] what I feel is suitable. I have keyed each change/deletion to my reasons via (A),(B), etc.

RECEIVED 5 MARCH 2001 - 6:20PM VIA E-MAIL
Board of Directors' Response

The Boeing Company designed . . .

====== no changes requested above this line ====

The end result is that, for MOST [some](A) employees who were near retirement age or who had long service when the PVP took effect, there is little difference in projected retirement benefits. In fact, due to the PVP's unusual features and the extra costs associated with this change, MANY [some](A) employees' projected PVP benefits are slightly higher than the projected benefits from their former plans. Contrary to the Proponent's Supporting Statement, 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. (B)

(A) The word MOST infers some sort of majority. This is false and misleading for the group mentiond and as analyzed by Mr Sorcher of SPEEA in my rebuttal. " Among the "losers" under PVP are people with high salary growth who retire at 55. In fact, recent high attrition, particularly in the spring and summer of 2000, was biased toward those with high salary growth and early retirement. "
Please provide FACTUAL support for every use of the word most.in the above paragraph, or make it clear that some employees will get less as described in your arguments shown in (B)

(B) Add in this area BA statement used in their arguments against me. "See, for example, Exhibit B at 2. It informed them that "the rate at which you earn future benefits may be more- or less-than the rate at which you would have earned benefits had you continued under The Boeing Company Employee Retirement Plan." The continued use of the word MOST is misleading to stockholders. Boeing should give the same benefit change constraints information to the shareholders as to employees. The facts are that some employees will get less than that promised.

****Delete the following three sentences in all CAPS THE PROPONENT'S SUPPORTING STATEMENT ALLEGES THAT THE COMPANY HAS BROKEN "PREVIOUS PENSION PROMISES" MADE TO EMPLOYEES. AS JUST DISCUSSED, THAT IS NOT TRUE AS A FACTUAL MATTER, BECAUSE THE PVP'S OVERALL LEVEL OF BENEFITS IS NEARLY EQUIVALENT TO THE PRIOR PLANS' BENEFIT LEVELS. THE ALLEGATION ALSO IS NOT TRUE AS A LEGAL MATTER.

**** Reason- that argument previously failed or was ignored by the SEC. While the SEC does not rule per se on false and misleading, the SEC did not require or request that I change the ' promise" wording. to infer that the word promise as used is not true is misleading. I previously provided a statement by Mark Iwry relating to promised benefits.

Boeing objects to the "promise" wording. However, the term is used by professionals in the benefits arena as shown in the following extract . "As noted, defined contribution plans provide for contributions allocated each year to each participant, while defined benefit plans typically state a benefit promise in terms of an annual benefit commencing at normal retirement age." The above can be found at http://www.ustreas.gov/press/releases/ps108.htm Treasury Benefits Tax Counsel J. Mark Iwry [testifying before the] Senate Committee On Health, Education, Labor And Pensions.

. . . All benefits that employees had already accrued under their prior plans have been preserved, as required by federal pension law. Both federal pension law and the terms of the prior pension plans gave the Company the right to change its pension plans for the future, as long as it did not reduce the benefits employees had already accrued. Boeing exceeded its legal obligation to merely preserve accrued benefits by not only protecting all of the prior plans' accrued benefits, but providing for the future growth of those benefits in proportion to employees' future salary growth, instead of merely freezing the prior accrued benefits.

The Proposal's recommendation to permit employees to choose between the PVP and their former plans upon termination or retirement would undermine a primary purpose of the PVP, to create a single, simplified plan for all salaried non-represented employees. Employers are not required to offer their employees a choice between pension plans, and most employers do not, for good business reasons. Large costs and significant administrative difficulties would be associated with maintaining numerous plans and benefit formulas, meeting the myriad federal regulations that apply to each plan, and offering and implementing employees' choices as they terminate or retire over a period of decades.

In summary, Boeing strives to provide its employees with a total compensation and benefits package that is competitive and that helps the Company attract and retain the best performers. Management believes that the PVP meets these criteria, and that the PVP's generous, carefully thought-out transition measures have protected the transition-date workforce .from experiencing ANY NOTABLE DISRUPTIONS in their pension benefits. Boeing will continually review its benefit plans and programs, making changes where appropriate. At this time, the Board is satisfied that the measures recommended by the Proposal would be unnecessarily detrimental to the Company's pension and compensation programs.

****The use of the words ANY NOTABLE DISRUPTIONS is misleading, what is not " notable" to Boeing may very well be notable to the person who has to work extra years. Please revise in more specific terms.

=====
My time schedule is that I will not be available until 9 AM tomorrow- I expect to send this off to the SEC about noon, and include a comment about not meeting the 30 day time scale, which ended approx Feb 22, about a week before the quake

Feel free to e-mail me at any time today, I'll not be able to answer or respond until tomorow

Don Shuper

BOARD OF DIRECTORS RESPONSE 8 MARCH as printed

Board of Directors' First Response RCVD 5 MARCH 2001

SEC RESPONSE TO BOEING

BOEINGS REQUEST FOR A NO ACTION LETTER DEC 24,2000

MY REBUTTAL JAN 23,200

MY ORIGINAL PROPOSAL

Link to Actual proxy Mine is number 7

VOTES	NUM VOTES	% ELIGIBLE	%PRESENT**	%For/Against
FOR	52,305,968	6.27	8.72 *	8.95
AGAINST	532,071,551	63.81	88.72	91.05
ABSTAIN	15,352,396	1.84	2.56
Broker Non-Votes	118,849,28	14.25