This publication contains a brief overview of your compensation, health and welfare, pension, and savings plans and other programs,including incentive programs and employee services. Every effort has been made to ensure that this overview is accurate. However, ifquestions arise, the official legal description of the plans, policies, and procedures will be used to answer them.

The benefits described here apply to nonunion Boeing employees enterprisewide who are covered under the plans in thecompensation and benefits programs administered by the Boeing service centers for health and welfare, pension, and savings plans. Theemployee services described here generally are available to all employees throughout the Company.

When you add it all up, Boeingoffers you a pay and benefits packagethat is balanced and competitive nowand over the long term.

This booklet gives you an overviewof the compensation policies and benefitplans offered to most nonunion Boeingemployees. It also offers a look at someprograms and services that help you tobalance your good work with a good life.

The information will be of specialinterest if you are a prospective Boeingemployee or new to Boeing—and itmay contain some pleasant surprises,even if you have long been a member ofthe Boeing team.

For example, with just a singletelephone call to the TotalAccessContact Center or a visit tomy.boeing.com, you can access up-to-the-minute data on your savings plans,health and welfare coverage, or accruedpension benefit.

We have included both TotalAccessContact Center and web site accessinformation to link you to the data youneed. You are encouraged to read this

TAKE A MOMENT TO CONSIDER YOUR FUTURE

INTRODUCTION

VALUABLE PROGRAMS,EASY ACCESS

PAY, PERFORMANCE,AND INCENTIVES

Page 1

HEALTH AND WELFARE

Page 5

PENSION

Page 9

SAVINGS

Page 13

EMPLOYEE SERVICES

Page 17

LIFE EVENTS

Page 20

booklet and keep it handy for quickreference.

So, take this opportunity to getacquainted with what Boeing offers.You have just about everything youneed for your protection today and yoursecurity tomorrow.

TotalAccess and my.boeing.com

TotalAccess is the gateway to servicessuch as benefits, employee records,payroll, and timekeeping. TheTotalAccess Contact Center is profes-sionally staffed to provide the sameservices over the telephone for thosetimes when you don’t have webavailability. TotalAccess andmy.boeing.com save you time and helpgenerate long-term cost savingsfor Boeing.

TotalAccess Contact Center1-866-473-2016

Hearing impaired: use yourrelay service

From outside the U.S.A., throughBoeing operator: 206-655-2121

My.boeing.com connects you to manyof the things you need to manage yourwork and life at Boeing. More than justa web site, my.boeing.com is yourgateway to TotalAccess, the source forsecure, easy-to-use, personalizedemployee information and services.

By clicking the TotalAccess tab ofmy.boeing.com, you will find informa-tion to make decisions, instructionsfor performing transactions, and accessto web-based services to completethose transactions.

New employees will receive informa-tion about TotalAccess andmy.boeing.com in a separate mailing.

Next payday, take a moment toexamine your paycheck or e-Stub(electronic pay stub); it’s a greatreminder of what goes into thecompensation and benefits programsat Boeing.

It shows your salary—thefoundation of your compensation andbenefits programs—and some of theother compensation you receive, such aspaid time off, overtime, and certainsupplemental insurance payments.

What doesn’t show on your pay-check, however, is the full range ofhealth and welfare, retirement savings,and work and life benefits and servicesavailable to you and your family.

Just as your paycheckrecognizes your

individual contribution to the Company,the compensation and benefits programsreflect the varied needs of a diverse andvital workforce.

Taking vacationMost salaried employees at Boeing

now enjoy the same vacation andholiday compensation practices,regardless of where they work in theCompany.

You canwatch yourvacationhours grow onevery paycheck,until you reachyour maximum—or until you take that great vacation.

Planning your holidaysEmployees observe 12 holidays

each year. Schedules for those 12 daysmay vary to coincide with holidaysobserved at a customer or internationallocation.

Protecting your health

Sick leave

You earn 8 hours of sick leave everymonth, up to a maximum of 80 hoursper year, which you can use when youare ill or to care for a family memberwho is ill. You also may use sick leavefor personal and family medicalappointments or in the event of a deathin the family.

If you are an exempt employee, youmay take part of a day for a doctor’sappointment for yourself or a familymember without charging time against

your sick leave.

Sick leave eligibility

Your sick leave eligibilitydate is when your sick leavestarts accruing each year. In

most cases, your sick leavebegins accruing on your

Boeing anniversary date.

Unused sick leave

At the end of your sick leave year(that is, on your sick leave eligibilityanniversary), 50 percent of the remain-ing current-year sick leave will beplaced in an unused sick leave account.You may tap into this reserve in futureyears if you use up your allotted sickleave for that year.

At termination (except for cause),if you are at least age 55 and have10 years of Company service, half ofthe hours left in the unusedsick leaveaccount will bepaid to youor to yourbeneficiariesat adesignatedhourly rate.

PAY, PERFORMANCE, AND INCENTIVES

PAY, PERFORMANCE,AND INCENTIVES

1

This benefit currently is paid out at amaximum hourly rate of $34.

Like so many of your benefits, yoursick leave account is there to draw fromwhen you need it.

Coordinating your benefitsIf you experience a brief illness,

sick leave is available to cover the timeyou are away from work. If an illness orinjury takes you away from work formore than seven consecutive days, youmay submit a claim to receive shortterm disability benefits. This Company-paid coverage will provide you with apercentage of your salary starting on theeighth day of your absence.

You can begin receiving yourCompany-paid short term disabilitybenefit (see “Health and Welfare,”beginning on page 5) on the eighth dayof your absence, regardless of howmuch sick leave you have accrued.However, you may use your availablesick leave or vacation to supplementyour disability benefit if you would liketo bring your income up to 100 percentof your regular pay during yourabsence.

Taking a leave of absenceAt times, it may be necessary for

you to be absent from work for medicalor certain other reasons. Under theCompany leave of absence policy, you

may be allowed paid or unpaid timeaway from work to recover from aninjury or illness or to take care ofpersonal business. Some examples aredescribed below.

If you are called to serve on a juryor as a witness, Boeing will grant youup to 30 days paid leave every year, ormore if legally necessary.

Employees in the military reservesare granted leave for all duty. You areeligible for 80 hours of militarydifferential pay for your annual activeduty training. If you are called totemporary special duty, you may beeligible for temporary continuation ofsome benefits and for militarydifferential pay.

Certain leaves of absence (e.g.,leaves under the Family and MedicalLeave Act) are mandated by law,whereas others (e.g., educational leaves)are granted by your manager. Thoughthe length of time allowed for eachvaries, sometimes subject to legalregulation, they generally do not exceedtwo years.

Choosing your work scheduleMany Boeing benefits help

you balance your work with yourpersonal life.

Full-time work schedule

Most employees work an eight-hourday, five days a week. However, if youare an exempt employee and you andyour manager agree, you may re-arrange your hours within an 80-hour,two-week pay period. If you are anonexempt employee, you mayrearrange your schedule within the40-hour workweek.

Your regular schedule isn’t requiredto be Monday through Friday, eighthours each day. With approval fromyour manager, you may establish aschedule that has more than two daysoff every week or every other weekor one that has a weekend day as aregular workday.

Part-time work schedule and benefits

If your manager agrees that it isappropriate, you instead may set up apart-time schedule.

If you work20 or morehours a week,you areeligible for4 hours of pay

PAY, PERFORMANCE,AND INCENTIVES

2

for each day of jury duty or witnessduty and for each Company holiday.

If you work generally 19.1 hours to32 hours a week, the Company willpay 70 percent of your health andwelfare benefits.

If you work 32.1 hours or more,you are eligible for the same benefitscoverage offered to full-time employees.

Understanding your salaryIt’s Boeing practice to offer com-

petitive salaries. Your salary reflects thevalue of your contributions to theCompany. The salary planning process,conducted during the first quarter of theyear, is aimed at establishing appropri-ate salary levels across Boeing.

Before making decisions aboutsalaries, your manager must considerthe size of the Company’s salaryadjustment fund, the responsibilitiesincluded in your assignment, yourcurrent salary and contributions com-pared with those of your peers atBoeing, and your salary in relation topay for similar jobs in other companies.

When making salary decisions,managers refer to salary referencetables, which show the range of salariesthe Company believes is appropriate foryour job family.

Enhancing your performancePerformance reviews provide focus

and direction to the thousands of peoplearound the world who work hard tomake Boeing an aerospace leader.Using criteria drawn from the Vision2016 statement, Boeing has designed a

uniform way to develop and evaluateemployee performance. The three maincomponents are a performancedevelopment process for employees, a360-degree assessment process formanagers, and a new method forevaluating performance across theCompany.

Performance Development Partner-ship (PDP) is a discussion and coachingprocess between you and your manager,helping you create a plan and takeeffective action to reach your personaljob and career goals.

If you are a manager, the360-degree assessment process,Multiple Viewpoints, shows you howwell your employees, peers, and man-ager think your behavior supports theCompany’s long-term success. Thisinformation will help you create yourown PDP plan.

The performance evaluationprocess uses consistent criteria to giveyou ongoing feedback about your work.The evaluation takes into account yourbusiness goals, your ability to demon-strate your knowledge and skills, andthe performance values identified inyour PDP.

These performance discussions andtools work together to help you answer,“How am I doing?” and to help youidentify development opportunities. Asalways, you play a key part in evaluat-ing and improving your performance.

PAY, PERFORMANCE,AND INCENTIVES

3

Leave of Absencehttp://ssg.stl.mo.boeing.com/hrservices/loa/loa.htm

Compensationhttp://paypractices.web.boeing.com/

Salaried Job Classificationshttp://jobclass.web.boeing.com/

Policies, Procedures, andProcesseshttp://policyplus.boeing.com/

Performance DevelopmentPartnershiphttp://www-co.boeing.com/hr/pdp/

Multiple Viewpointshttp://www-co.boeing.com/hr/mvp/

Performance Evaluationhttp://www-co.boeing.com/hr/pe/

Employee Incentive Planhttp://eip.web.boeing.com/

ShareValue Trusthttp://www.boeing.com/share/

Cash Award Programhttp://cashaward.web.boeing.com/

Special Incentive Award Programhttp://sia.web.boeing.com/

PAY, PERFORMANCE,AND INCENTIVES

Participation in the following threeprograms is at management’s discretion;only a limited number of awards is giveneach year. These programs targetindividual and team accomplishments thatare the result of extraordinary performanceor that go beyond job expectations.

Cash Award Program. Your managermay recognize an outstanding achievementby you or your team under the Cash AwardProgram, which makes cash awards from$150 up to $5,000. The program isavailable throughout the year to recognizeand reward exceptional performance soonafter it happens.

Special Incentive Award Program. Thisstock-based program is designed torecognize the most significant and lastingindividual accomplishments. The use ofBoeing stock suggests retention andprovides a lasting reminder of the accom-plishment. Either your management orprocess council may nominate you for aSpecial Incentive Award.

Stock Options. A stock option is theopportunity to purchaseBoeing stock at a setprice for a certainperiod of time.Options are granted toretain employees withgreat potential andcritical skills who caninfluence theCompany’s futureperformance. Optionsalso are intended to encourage stockownership in Boeing. Once a year,managers nominate employees for stockoptions.

Reaching for incentivesLike many leading companies, Boeing

recognizes that the performance of eachemployee has an effect on overallCompany performance. With this in mind,Boeing has established five programsdesigned to give employees a directfinancial stake in the Company’s overallsuccess.

Employee Incentive Plan. More than80,000 nonunion, nonexecutiveemployees are eligible for up to 20 extradays of pay if the Company meets orexceeds certain economicprofit targets each year.Through the EmployeeIncentive Plan, theCompany encouragesyou to think and actlike an owner—thatis, to improve quality and customersatisfaction, trim cycle times, reducecosts, and streamline processes whereverpossible to help the Company achievereturns within the top quartile of Standard& Poor’s 500 companies.

ShareValue Trust. Boeing created theShareValue Trust in 1996. Since then, theCompany has set aside more than$1.7 billion in Boeing stock for a 14-yearperiod as a value-sharing incentive forcurrent and future employees. Designedto encourage you to align your interestswith those of the shareholders, theShareValue Trust offers you a possibledistribution every two years if the stockprice exceeds a certain threshold.

4

HEALTH AND WELFARE BENEFITS—PROTECTION PLUS

Your health and welfare benefitsprotect you and your family againstlarge out-of-pocket expenses. Once youenroll in the plans offered here, you canrelax—your coverage will be therewhen you need it.

Who’s covered?

Full-time nonunion employees andtheir eligible dependents are coveredunder the health and welfare plans inthe compensation and benefitsprograms. If you are a part-timeemployee scheduled to work generally19.1 or more hours a week, you areeligible for the same plans, althoughyou may pay a greater share of the costfor your coverage, depending on thenumber of hours you work.

Helping yourself

The Boeing Service Center forHealth and Welfare Plans serves as yoursingle resource for all your health andwelfare benefit needs.

You may get information aboutyour health and welfare benefits byaccessing the YourBenefits Resources website, by using theautomated phonesystem, or by speakingwith a representative. Inmost cases, the Web and automatedphone system are available 24 hours aday, seven days a week. Representativesare available to answer your benefitsquestions during business hours.

Connect to the Boeing Service Centerfor Health and Welfare plans by callingthe TotalAccess Contact Center.

Making changes

You may change your choice ofcertain health and welfare plans everyyear during annual enrollment or whenyou have a qualified change in statussuch as marriage or the birth of a child.

Medical plans: makingthe most of your medicalcoverage

If you are a full-time employee,Boeing generally pays most of thepremium for your medical coverage, nomatter which plan you choose.

In many areas of the country, youmay choose from three kinds of medicalplans to fit your family’s needs:

• Coordinated care plans.• Health maintenance

organization plans.• Traditional Medical Plan.

The Traditional Medical Plan isavailable in most Boeing locations.

Each type of plan offers a differentbalance between cost and flexibility inyour choice of care providers. All threetypes of plans cover a wide range ofessential services and offer employees anetwork of health care providers fromwhich to choose. All three typesrequire a small copayment for networkoffice visits.

HEALTH

AND WELFARE

Your password—key to theBoeing Service Center for Healthand Welfare Plans

Whenever you call the Boeing Service

Center for Health and Welfare Plans or

access Your Benefits Resources, you will

be prompted for your Social Security

number and health and welfare password.

Your password is the key that enables you

to access your personal health and welfare

benefits information.

You may want to keep your password in a

safe place where you can refer to it

whenever you use the Boeing Service

Center. If you lose or forget your

password, contact the Boeing Service

Center by telephone through TotalAccess

or on the Web to request another

password. You may reset your password

by calling the service center during

business hours and speaking to a

representative.

The Traditional Medical Planrequires an annual deductible for mostother services and supplies, whereasthe coordinated care plans require adeductible only when services orsupplies are received from nonnetworkproviders.

Coordinated care plans

If you choose a coordinated careplan, you and your dependents

5

generally need to choose a primary careprovider to coordinate your care and, ifnecessary, refer you to a specialist inthe network. If you choose to receivecare from a nonnetwork provider or ifyou see a provider without first gettinga referral from your primary careprovider, you will pay more of the costfor this care, including a deductible.

Health maintenanceorganization plans

If you choose a health maintenanceorganization (HMO) plan, you pay onlya small copayment for each office visitto your primary care provider orreferred specialist.The plan pays100 percent ofmost othercoveredservices.There is nodeductible.The plancovers onlythe services you receive from HMOnetwork providers, except inemergencies. In an HMO plan, aprimary care provider usuallycoordinates all of your care.

Traditional Medical Plan

The Traditional Medical Planallows you to visit any health careprovider you like, but the plan paysmore of the cost when you usenetwork providers.

What’s covered

Every Boeing medical plan covers

• Doctor visits.• Hospital care.• Surgery.• Preventive care.• Vision care.• Mental health care.• Substance abuse treatment.• Prescription drugs.

Boeing encourages you to usepreventive care services, includingroutine physical screenings such aswell-baby checks, mammograms, andprostate examinations. For this reason,all plans cover certain network preven-tive care services in full or for a smallcopayment.

Dental plans: gettingthe best coverage

Boeing offers two types of dentalplans: the Network Dental Plan andprepaid dental plans. Boeing pays all ormost of the cost of these plans.

Both types of plans generally coverthe same types of services: preventivecare, basic care, major care, and ortho-dontia. Some services are covered infull, while others require that you paypart of the cost.

The Network Dental Plan isavailable in all Boeing locations.Prepaid dental plans are available inArizona, Southern California, and thePortland, Puget Sound, St. Louis, andWichita areas.

Network Dental Plan

This plan has a network of dentistsin Delaware, Illinois, Missouri(St. Louis area), New Jersey, Oregon,Pennsylvania, Southern California, andWashington state. In these areas, you

may go to any dentist you like, but youreceive a greater level of benefits whenyou use network dentists. This planrequires that you pay a $50 deductiblefor treatment by a network provider or a$75 deductible if you see a nonnetworkprovider. (The deductible does not applyto preventive care received from anetwork provider.) If you receive careoutside the plan’s service area, you willreceive the network level of benefits.

HEALTH

AND WELFARE

6

Prepaid dental plans

In a prepaid dental plan, you choosea network dentist as your dental primarycare provider. This dentist providesmost services for you and yourdependents and refers you to a networkspecialist for other services. There isno deductible, but some services requirea copayment.

Unless it is an emergency, the planwill not cover treatment you receivefrom a nonnetwork provider ortreatment that is not authorized by yourdental primary care provider. In somecases, these plans require that you andall members of your family choose thesame dentist.

Life, accident, and disabilityplans: sheltering you fromthe unexpected

You are covered under fiveCompany-paid welfare plans to help seeyou and your family through difficulttimes: the Basic Life Insurance Plan,Accidental Death and DismembermentPlan, Short Term Disability Plan, LongTerm Disability Plan, and BusinessTravel Accident Plan. You also mayelect supplemental coverage.

Basic Life Insurance Plan

Boeing pays the full cost of basiclife insurance to protect your depen-dents against income loss in the event ofyour death. The value of your benefitis equal to 2.25 times your baseannual salary.

If you are a part-time employee,your basic life insurance benefit iscalculated according to the number ofhours you work during the year andyour hourly salary.

Supplemental coverage also isavailable for you and for your depen-dents. You pay the full cost of supple-mental coverage using aftertaxpayroll deduction.

Accidental Death andDismemberment Plan

The Accidental Death and Dis-memberment Plan provides benefits foryour beneficiary in the event of yourdeath or for you in the event of paralysisor the loss of your limbs, eyesight,hearing, or speech. Boeing provides thisplan, with coverage up to $25,000, at nocost to you. Supplemental coverage isavailable for you and for yourdependents. You pay the full cost ofsupplemental coverage using aftertaxpayroll deduction.

Short TermDisability Plan

If you areunable to workbecause of atemporary dis-ability, the Short Term Disability Planwill replace part of your income for upto 25 weeks. After a seven-day waitingperiod, the plan will pay 80 percent ofyour weekly salary for weeks 2 through13 and 60 percent for weeks 14 through26. You can tap into your sick leave,vacation, or Financial Security Planaccount funds (if eligible) to make upthe difference between what this benefitpays and your regular earnings.

Long Term Disability Plan

If illness or injury keeps you awayfrom work longer than 26 weeks (sixmonths), the Long Term Disability Planmay pay 50 percent of your basemonthly salary, up to a maximum of$15,000 a month.

Supplemental coverage also isavailable. You can increase the plancoverage to 60 percent of your basemonthly salary (up to $15,000 a month)by making additional payments usingaftertax payroll deduction. Note: Theavailability of and benefit under somelong term disability plans may vary forcertain employee groups and locations.

HEALTH

AND WELFARE

7

Boeing Service Center for Healthand Welfare Plans—Your BenefitsResourceshttp://resources.hewitt.com/boeing

Employee Benefitshttp://www.boeing.com/benefits/

Business Travel Accident Plan

Boeing provides business travelaccident coverage of2.25 times yourbase annualsalary, up to$2 million, atno cost toyou. Thisplan pays abenefit if you dieor suffer a coveredloss in an accident thatoccurs while you are traveling onofficial Company business.

Managing costs withreimbursementaccount plans

The Health Care ReimbursementAccount Plan and the Dependent CareReimbursement Account Plan allow youto set aside part of your pay beforetaxes to help you reduce the effects ofcertain qualified expenses. The healthcare account is for qualified expensesthat are not paid by a medical or dentalplan such as deductibles, copayments,and other out-of-pocket expenses. Thedependent care account is to pay forqualified dependent care expenses(e.g., day care) that you incur becauseyou work.

You are reimbursed from theaccounts for qualified expenses. Be-cause the amount you set aside and theamounts you are reimbursed are not

taxed, you may be able to reduceyour tax bill and increase yourspendable income.

Each fall during annualenrollment, you estimate your

qualified expenses for the nextcalendar year and set aside that amount.You may set aside from $250 to $3,000for health care and from $250 to $5,000for dependent care. You must estimatecarefully, however, because you willforfeit any money left in the accountafter the claim deadline, which isApril 30 of the year after the calendaryear in which the expense is incurred.

You are encouraged to consult a taxadviser to make the best use of thereimbursement account plans.

HEALTH

AND WELFARE

8

Boeingprovides thePension ValuePlan to give youretirement income for therest of your life. No matterwhat your age, the Pension Value Plan,your Social Security, and your savingsplans work together for your future.

There is no time like the present toget familiar with this hardworking Plan.

Helping you keep track

The Pension Value Plan is growingsteadily while you work. It is fully paidfor by the Company, it is insured by theU.S. Government, and it requires noaction by you.

You can get information about youraccount by calling the Boeing PensionService Center through TotalAccessduring business hours. You can askservice center representatives to modeldifferent scenarios to estimate yourretirement income at certain retirementages. The automated phone system is

available throughTotalAccess

during extended hours. Youalso can access the Pension ServiceCenter web site for up-to-dateinformation about your account andeven model different scenarios foryourself.

Who’s eligible?

The Pension Value Plan is availableto most nonunion employees.

Calculating your benefits

Your Pension Value Plan earnscredit in two ways: by earning benefitcredits and accruing interest credits.

Earning benefit credits

Your benefit credit is a percentageof your eligible pay based on your age.The percentage is less when you areyounger because there is more time foryour benefit to grow before you retire.

PENSION VALUE PLAN—LOOKING TOWARD RETIREMENT

The eligible pay on which yourbenefit credit is figured includes

• Your annual base pay.• Lump-sum merit awards.• Certain incentive payments.• Certain commission payments.

Your account will continue to earnbenefit credits every year until youretire, leave the Company, or transferto a group that does not participate inthe Plan.

Accruing interest credits

Once you earn benefit credits andhave a beginning year balance, thosecredits will start earning interest credits.The interest rate is based on the 30-yearU.S. Treasury bond rate published bythe Internal Revenue Service, from anallowable low of 5.25 percent to a highof 10 percent. You will earn interestcredits until your pension benefits beginor until you reach age 65, whichevercomes first.

Your heritage benefit

Your heritage benefit, if any,primarily is based on what you hadearned until the date when your benefitwas transferred to the Plan. Thisheritage benefit continues to grow at thesame rate as your base pay increasesuntil you leave the Company or retire.

PENSION

9

If you are earning a noncontributoryretirement benefit at Boeing SatelliteSystems, your heritage benefit willtransfer to the Pension Value Planin 2003.

Minimum benefit formula

When you start collecting retire-ment benefits, your credit-based benefitis combined with your heritage benefitand the total is compared with a mini-mum benefit formula; you are paid thegreater amount. The minimum benefitformula is $50 per month times youryears of benefit service, reduced forearly retirement (before age 65).

Reaching retirementNormal retirement age is 65.

However, you may retire fromactive Boeing employment ifyou are

• Age 55 or older and have at least10 years of vesting service.

• Age 62 or older and a Planparticipant with at least one yearof vesting service.

If you leave Boeing after age 55,you may delay the start of your benefitsfrom the Pension Value Plan until youreach age 65. Although it will stopearning benefit credits, your Plan willcontinue to accrue interest credits untilyou begin receiving retirement benefitsor reach age 65, whichever comes first.

PENSION

Considering earlyretirement

When you becomeeligible for retirement,

your benefit credits and interestcredits are converted into an annuallifetime benefit by dividing the totalvalue by a factor of 11. The result isyour annual benefit, which is divided by12 to arrive at your monthly pensionpayment.

Under the heritage plan, however,your benefit may be reduced accordingto your heritage benefit plan provisions.

10

Leaving before retirement

If you complete five years ofservice at Boeing, you are vested. Thatmeans that, even if you leave theCompany before you retire, you areeligible to receive retirement benefitswhen you turn 55, or you may defer thebenefits until you reach age 65.

At that time, your benefit creditsand your interest credits are convertedinto an annual lifetime benefit bydividing the total value by a factor thatranges from 11 to 15 depending on yourage. The result is your annual benefit,which is divided by 12 to arrive at yourmonthly pension payment.

Your heritage benefit generally isreduced by 6 percent for each year youretire before age 65.

PENSION

Considering your paymentoptions

The payment options under thePension Value Plan include

• A single life annuity.• A 50 percent, 75 percent, or

100 percent surviving spouseoption if you are married.

• A life annuity with a 10-yearcertain option.

• An accelerated income option.

If you do not choose a paymentmethod, the Plan will pay your benefitautomatically as a single life annuityif you are single, or as a 50 percentsurviving spouse option if youare married.

Single life annuity. Under thispayment method, you receive a monthlybenefit amount for the rest of your life.No payments will be made after yourdeath. If you are married and want tochoose this payment form, you musthave a consent form signed by yourspouse and witnessed by a notary public.

Surviving spouse options. If you aremarried, you may choose a smallermonthly pension and, after your death,your spouse will receive 50 percent,75 percent, or 100 percent of yourpension for the rest of his or her life.

Life with a 10-year certain option.Under this option, you will receivebenefit payments for the rest of yourlife. However, if you should die within10 years of receiving your first pensioncheck, your beneficiary will continue toreceive your payment for the remainderof the 10 years.

Accelerated income option. If youretire before age 62, you might choosethe accelerated income option. Thisoption allows you to collect a largerthan normal portion of your pensionbenefit before age 62 and a smallerbenefit afterward. You may choose thisoption along with any of the otheroptions above.

11

Thinking of retiring soon?

You are encouraged tovisit the Employee Benefitsweb site to read the Pension

Value Plan summary plandescription and learn more aboutplanning for retirement.

Retiree medical benefits

For now, most current and futureretirees will continue to have access tomedical coverage, although the arrange-ments will vary depending on yourheritage company. Employees andretirees will be notified when currentretiree medical plans are changed.

If you were hired at Boeing on orafter January 1, 1999, you are noteligible for Boeing medical coverage inretirement. Instead, you are encouragedto save for retiree medical coveragethrough the Boeing savings plan orother means.

As always, the Company reservesthe right to amend or terminate retireemedical coverage at any time.

PENSION

Boeing Pension Service Centerhttp://boeing.benefitcenter.com

Employee Benefitshttp://www.boeing.com/benefits/

Your PIN—key to theBoeing Pension Service Center

Whenever you contact the Boeing

Pension Service Center by telephone or

on the Web, you will be prompted for

your Social Security number and

personal identification number (PIN).

You may want to keep your PIN in a

safe place where you can refer to it

whenever you use the Pension Service

Center. If you lose or forget your PIN,

call the Pension Service Center through

TotalAccess to request another PIN.

12

The Voluntary Investment Plan(VIP), with the generous matchingcontribution from Boeing, may be yourbest opportunity to prepare for thefuture you want. Along with yourCompany-sponsored pension plan andSocial Security, it can be animportant part of the future for youand your family.

So plan carefully, and start savingas early—and as much—as you can.

Who can participate?

The VIP is available to mostBoeing employees.

Making the most of your VoluntaryInvestment Plan

You may save part of every pay-check either before or after taxes—or acombination of both—by contributingfrom 1 to 15 percent of your base pay tothe VIP. Effective January 1, 2003, youmay contribute up to 20 percent of yourbase pay to the VIP. For nonunionemployees, Boeing will match yourcontribution by adding 75 cents forevery dollar you set aside, up to8 percent of your base pay. You maychange your contribution percentage atany time.

Helping yourself

You may get account informationfrom the Boeing Savings Service Centerby connecting through TotalAccess orthrough the Boeing Savings PlansOnline web site.

The Boeing Savings Plans Onlineweb site and the Savings Service Centertelephone system put your account dataat your fingertips. In addition to track-ing the status of your investments, youcan use the site to prepare estimates ofyour retirement income and perform avariety of transactions.

If you were eligible to contribute to theFinancial Security Plan (FSP), thefunds in your FSP account will remainthere until you retire or leave theCompany. You may invest them in aselection of investment funds. As in thepast, you may draw on your FSPaccount for additional sick leave whenyou have used all your regular sickleave hours. You also may makewithdrawals from your FSP accountwhen you reach age 591/2 or when youretire or leave the Company.

Lowering your taxes

You can reduce the amount of yourtaxable income by making your VIPcontribution before federal and, in somecases, state income taxes are withheld.If you choose to make pretax contribu-tions, your money grows, tax deferred,until it is withdrawn. Upon withdrawal,you pay taxes on your original contribu-tions, the employer matching funds, andyour earnings. (Be aware that federaltax laws require certain taxes such asFICA to be withheld from earnings,regardless of pretax contributions.)

Each year, the Government restrictsthe amount that one person can contrib-ute before taxes. The limit for 2002 is$11,000, and the limit for 2003 is$12,000. Furthermore, it is moredifficult to access pretax savings beforeyou retire. You are encouraged to talkwith a tax consultant if you havequestions about these restrictions.

You may contribute to your VIPwith aftertax dollars, too. If you com-bine pretax and aftertax contributions,your total contribution must equal nomore than 15 percent (20 percent,effective January 1, 2003) of your basepay. Your aftertax contribution will notreduce your taxable income, but yourinvestment earnings grow, tax deferred,until you withdraw them. When youwithdraw from these funds later, onlythe investment earnings and the em-ployer matching contribution will besubject to taxes and early withdrawalpenalties.

YOUR SAVINGS—REACHING YOUR LONG-TERM GOALS

SAVINGS

13

Watching yourmoney growand grow

The employermatching contributionfor VIP contributionsmeans that, in mostcases, for everydollar you contributeup to 8 percent of yourbase salary, you get a75 percent return onyour money immedi-ately. For example, if

Shopping the investment funds

You may invest in any or all of thefunds listed below. (Note: Boeing doesnot underwrite, warrant, guarantee, orin any way insure the performance ofany investment option available throughVIP and FSP. Before investing in theseplans, you might wish to consult with afinancial adviser.)

Making loans and withdrawals

Though it will significantly affectyour retirement savings, you may wantto make an early withdrawal or takeout a loan from your VIP for educationor home repair, or when a seriousneed arises.

*Actively managed funds

your salary is $40,000 andyou contribute 8 percent ofyour pay, or $3,200, to theVIP, Boeing adds another$2,400, for a total contri-

bution of $5,600 forthe year.

If you invest$100 a month in theVIP, you couldaccumulate $88,819after 20 years,assuming that yourmoney grows at a

rate of 7 percentannually.

SAVINGS

Bond Market Index

Balanced Index

S&P 500 Index

VIP Stable Value

Boeing Stock

Russell 2000 Index

International Index

Value*

Small Companies*

Growth*

Science and Technology*

To match the returns of the Lehman Brothers Aggregate Index by investing in government,corporate, mortgage-backed, and asset-backed securities

To balance growth and income by matching the returns of a portfolio composed of 60 percentS&P 500 Index and 40 percent Lehman Brothers Aggregate Index

To match the performance of the S&P 500, a benchmark for the entire stock market

To protect capital with a high level of income by investing in investment contracts with one ormore insurance companies

Long-term growth of capital plus current dividend income from Boeing stock

To match the Russell 2000 Index, a benchmark for small companies in the U.S. stock market

To match the Morgan Stanley Capital International Europe, Australia, Far East Index

To achieve long-term capital appreciation from stocks with high return potential

To maximize total return by investing in smaller capitalized companies

Capital appreciation by investing in stocks of high-growth companies across allmarket capitalizations

Long-term capital appreciation from U.S. and foreign growth companies concentrated in scienceand technology industry sectors

Name of fund Fund goal

VOLUNTARY INVESTMENT PLAN FUNDS

14

Borrowing from yourself

You may take out a loan for anamount equal to 50 percent of youraccount minus anycurrent outstand-ing loan balances,or $50,000minus yourhighestoutstandingloan balances in the past12 months. You may have as many astwo outstanding loans at a time.

The interest rate is the prime ratequoted in the Wall Street Journal on thelast business day of the month beforeyou secure the loan. Once you take outa loan, the interest rate is fixed for theterm of the loan. Your loan paymentswill be made by automatic payrolldeduction. You may pay off your loanin full at any time, but you may notmake partial prepayments.

Withdrawing funds from your pretaxaccount for hardship

The IRS permits you to apply for ahardship withdrawal to meet certainspecified financial hardships, only ifthey cannot be met by any other finan-cial resources. If you take out a hard-ship withdrawal, you must pay taxes onthe money you withdraw from your

pretax account, employer matchingfund, rollover account, and aftertaxearnings. In addition, you will besubject to a 10 percent earlywithdrawal penalty.

If you take a hardship withdrawal,your employer matching contributionswill be suspended for six months.

You may apply for a hardshipwithdrawal to meet one or more of thefollowing financial needs:

• Expenses for unreimbursedmedical care.

• Costs directly related to the pur-chase of your principal residence(excluding mortgage payments).

• Payment for postsecondaryeducation for you, your spouse,children, or other dependents.

• Payments necessary to preventeviction from your primary resi-dence or foreclosure on the mort-gage of your primary residence.

• Funeral expenses for a member ofyour immediate family.

• Repairs to your principal residence.• A leave without pay, or if you are

otherwise absent from workwithout pay for 15 or morebusiness days.

• A lump-sum child support paymentthat is ordered by the court.

• Payment of past-due federal or statetaxes in response to a federal orstate notice.

Withdrawing from youraftertax account

You may withdraw all or part ofyour aftertax contributions. Someadditional tax may apply. Unlikehardship withdrawals, your employermatching contributions will not besuspended following an aftertaxwithdrawal.

Withdrawing employermatching contributions

After five years with the Company,you may withdraw all employer match-ing contributions. Employer matchingcontributions will be suspended there-after for six months.

Active participants may withdrawall their pretax, aftertax, employermatching, and rollover contributionsafter age 591/2. Additional taxesmay apply.

SAVINGS

15

Leaving the Company

If you retire or arelaid off, you will receivean information packet inthe mail that explainsseveral options for the

distribution of your VIP account.

Because the rules governingdistribution are complex, you areencouraged to consult a tax adviser orfinancial consultant before you act.

• You may keep your money in theplan, allowing it to grow, taxdeferred, until you reach the ageof 701/2.

• You may request distributions inmonthly, quarterly, semiannual, orannual installments. These install-ments are treated as taxable income,except for the portion that representsa return of aftertax contributions.

• You may request a partialdistribution, leaving the balance into continue growing, tax deferred.

• You may roll over all or part of yourtaxable account balance into anotherqualified savings plan or individualretirement account (IRA).

• You may take a lump-sum cash orstock distribution. This distributiongenerally will be taxable, except forany portion that represents a return ofaftertax contributions. If you take thelump-sum payment before you turnage 591/2

, you may be subject to a10 percent early withdrawal penalty.

• If you are retiring, you may opt tohave the balance of your accounttransferred to purchase an annuityaccount that will provide monthlypayments for a certain periodof time.

Minimum distribution paymentsfrom your VIP fund must begin whenyou reach age 701/2

. Until that time,however, no payments will be distrib-uted without a request from you.

SAVINGS

Boeing Savings Plans Onlinehttp://boeing.csplans.com

Employee Benefitshttp://www.boeing.com/benefits/

Your PIN—key to theBoeing Savings Service Center

Whenever you call the Boeing Savings

Service Center through TotalAccess or

access Boeing Savings Plans Online,

you will be prompted for your Social

Security number and PIN. Your PIN is

the key that enables you to access your

personal savings information.

You may want to keep your PIN in a

safe place where you can refer to it

whenever you use the Savings Service

Center. If you lose or forget your PIN,

contact the Savings Service Center by

telephone through TotalAccess or on

the Web to request another PIN.

16

Learning CentersBoeing Learning Centers make

expanding your horizons easy. Boeingoperates Learning Centers at locationsaround the country, offering more than3,200 courses ranging from aviation toengineering, from personal computingto personal development. You also canprepare for the examinations for severalcertification programs.

RecreationRecreation provides access to

nearly 300 clubs and special interestgroups at more than a dozen Boeinglocations across the country. Examplesof the wide range of clubs and groupsinclude astronomy, jazz bands, tae kwondo, golf, softball, fishing, scuba diving,amateur radio, and chess.

The recreation department alsooffers special activities and regionalprograms such as the equipment check-out program, discounted event tickets,gymnasium facilities, meeting rooms,and sporting and theater events.

Health and fitnessThe Boeing Employees Health and

Fitness program is designed to helpemployees, their spouses, and retireesimprove overall health. The programoperates more than 25 fitness centersnear 15 Boeing sites across the country.Many are open 24 hours a day, sevendays a week. These centers featurestate-of-the-art exercise equipment andoften provide personal instruction orgroup classes on personal health andwellness.

Depending on the region, centersoffer counseling (e.g., blood pressure,cholesterol, nutrition, weight loss,smoking cessation), testing (e.g., bodycomposition, flexibility), training (e.g.,fitness coaching, muscular strength,sports-specific conditioning), and injuryprevention and recovery.

At most locations, membershiprequires a nominal monthly fee, whichis deducted from your paycheck.

EMPLOYEE SERVICES—WHERE WORK MEETS LIFE

ArttoCome

EMPLOYEE

SERVICES

Many special services are availableto you, depending on where you liveand work. These services can enhanceyour quality of life.

Learning Together programBoeing is committed to helping

employees pursue lifelong learning.If you are an active Boeing employeewho works at least 20 hours per week,you are eligible to participate in theLearning Together program. Boeingreimburses you for tuition and up to$150 per course for required books andsoftware at many accredited colleges,universities, and trade schools.

Courses are to be taken on yourpersonal time, and they must be appliedto a degree or earn continuing educationunits. When you complete a degree,Boeing provides restricted stock unitawards, which become shares in Boeingstock after three years.

17

Employee AssistanceProgram

The Employee Assistance Program(EAP) offers help when personalprograms, such as marital or familydiscord, medical and psychologicalemergencies, and alcohol and drugabuse, affect the life of a Boeingemployee. Assistance by telephone orin person also is available foremployees who are affected bytraumatic events or employmentreduction.

The program—part of Boeingmedical—provides free private assess-ment and referral. Many EAP officesare convenient to work sites. EAPresources are available to all Boeingemployees and are available to theirdependents in some locations. Medicalrecords are kept separate from person-nel files to ensure confidentiality.

Employee discountsYou can save time and money on

brand-name products and servicesthrough the Boeing Employee Discountprogram. Merchants offer discounts onitems such as computers, sportinggoods, theme park admissions, books,and restaurant visits and servicessuch as leisure traveland Internet services.Employees at morethan a dozenBoeing locations—such as Seattle, SouthernCalifornia, St. Louis, Wichita,Philadelphia, and Mesa—enjoyadditional regional discounts.

EMPLOYEE

SERVICES

RecognitionYour performance can be

recognized by coworkers throughPride@Boeing, the Companywiderecognition program. The program hasthree levels of recognition: InstantAppreciation, which rewards people for

superior service on a particularproject; Formal Appreciation,

which acknowledges peoplewho go beyond the scopeof assigned job duties; andAchievement Award, which

thanks employees forsustained, exceptional performance.

Award winners redeem vouchersdirectly from the program vendor,and merchandise is shipped totheir homes.

18

Learning Together Programhttp://learningtogether.web.boeing.com/

Boeing Learning Centershttp://lead.web.boeing.com/learningcenter/lcts.htm

Recreationhttp://www.boeing.com/companyoffices/aboutus/recreation/

Boeing EmployeesHealth & Fitness Programhttp://fitness.web.boeing.com/

Company Employee AssistanceProgramshttp://shea.ca.boeing.com/companymedical/CoEAP/call.html

Boeing Employee Discount Programhttp://www.boeingemployeediscount.com/

Recognitionhttp://recognition.web.boeing.com/

Travel Vacationshttp://www.boeingtravel.com/leisure.html

Travel VacationsSometimes you just need a

break, and the experiencedagents at Boeing Travel Vacations canhelp. Travel Vacations is the leisureportion of Boeing Travel ManagementCompany, one of the top 20 largesttravel companies in the United States.Through Travel Vacations, you canbook vacation packages and cruises ormake airline, hotel, and car rentalreservations, often with specialamenities and discounts.

EMPLOYEE

SERVICES

19

At every stage of your Boeingcareer, even after you retire, the Boeingcompensation and benefits programsmaintain an array of benefits andservices to help you and your family.Most benefits are availableCompanywide for all nonunionemployees. You might think aboutyour benefits and certain servicesat any of life’s passages—gettinghired, getting married, having ababy, building your career, caringfor an aging parent, suffering aninjury, getting divorced, improving

LIFE EVENTS

BOEING BENEFITS, PROGRAMS, AND SERVICES—A LIFETIME OF VALUE

• Disability insurance plans

• Life and accident insurance plans

• Medical and dental plans

• Pension plan

• Pretax reimbursement accounts(health and dependent care)

• VIP savings plan

• Alternative work schedules

• Credit union membership

• Employee Assistance Program

• Employee discounts

• Incentive programs

• Health and fitness centers

• Jury and military duty pay

• Learning and leadership centers

• Learning Together program(includes tuition reimbursement)

• Recognition program

• Relocation program

• Service centers for health andwelfare, pension, and savings plans

• Telecommuting or virtual office

• Leisure travel services

• Holidays

• Sick leave

• Vacation

• Other leaves

your home, providing for your familyafter your death, getting good medicalcare, or enjoying a healthy retirement.

We’ve listed some of the benefits,programs, and services you might useas you experience these typical lifeevents. Take a close look—you mightfind something helpful you didn’trealize was available.

Employee benefits Programs and services Time off

FOR NEW EMPLOYEES

(Also applies to current Boeing employees and those who transfer within the Company)

20

LIFE EVENTS

Employee benefits Programs and services Time off

• Pretax reimbursement accounts(health and dependent care)

• Medical and dental plans (withdependent coverage)

• Supplemental life and accidentinsurance coverage for spouseand dependents

• Boeing day care (two locations)

• Eldercare referrals

• Employee Assistance Program

• Family care resources(some locations)

• Mothers’ rooms

• Service centers for health andwelfare, pension, and savings plans

• Telecommuting and virtual office

• Savings plan (VIP) loans andwithdrawals

• Alternative work schedules

• Employee and family care leave

• Family leave

• Holidays

• Part-time benefits

• Pregnancy leave

• Sick leave

• Vacation

FOR GROWING FAMILIES

Employee benefits Programs and services

• Basic and supplemental life insurance (converted toindividual policies)

• Credit union membership

• Dental coverage (COBRA)

• Health and fitness centers

• Retiree clubs and associations

• Retiree job banks

• Retiree medical arrangements for eligible retirees under age65 and for retirees age 65 and over (for those hired beforeJanuary 1, 1999)

• Service centers for health and welfare, pension,and savings plans

• Pension estimates

• Pension income

• Savings plan (VIP) loans and withdrawals

FOR RETIREMENT

More information can be found on the

Employee Benefits web site. This site can

be accessed through your Boeing computer

or your computer at home, allowing

you to review this information at work

or at home with your family. You also may

call the TotalAccess Contact Center.

Visit the Employee Benefits web site at

http://www.boeing.com/benefits/September 20020691520

TotalAccess Contact Center

1-866-473-2016

Hearing impaired: use your relay service

From outside the U.S.A., throughBoeing operator: 206-655-2121