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BOEING ESTABLISHES $1 BILLION STOCK INVESTMENT TRUST

SEATTLE, July 11 /PRNewswire/ -- The Boeing Company (NYSE: BA) has established a $1 billion stock investment trust for an incentive program, called the ShareValue Program, that allows employees to share in the results of their efforts to increase shareholder value over the long term, Boeing President and Chief Executive Officer Phil Condit announced today.

The trust, called the Boeing ShareValue Trust, will hold only Boeing common stock. Funding of the $1 billion trust investment, which is based on the average price of Boeing stock on June 28, 1996, of $88 3/8, will consist of 11,315,417 shares. The Boeing Company has contributed approximately 3 1/2 million shares of treasury stock to the trust, and the trustee will be acquiring the balance of the shares on the open market with cash contributed by the company.

"The ShareValue Program is intended to focus the attention of all Boeing people on what we can do -- both as individuals and all of us working together -- to increase the return to the people who invest their money in Boeing," said Condit. "If we do that, the people of Boeing will share directly in the success they help create."

Employees of The Boeing Company and its subsidiaries are eligible to participate in the ShareValue Program if they do not already participate in an executive incentive plan. Participation by represented employees is pending acceptance by their unions. Participation by subsidiary employees is pending approval by their board of directors or management.

The ShareValue Program investment is divided into two overlapping periods, with $500 million in each period -- both began July 1, 1996. Period 1 runs two years, through June 1998; Period 2 runs four years, through June 2000. All other investment periods will be four years in length and overlap an existing period.

Distributions will be in the form of Boeing stock. Employees could receive a distribution of Boeing stock following the end of each investment period, depending on how much the fund investment has grown. Distribution will be determined by the total dollar return (the increase or decrease in Boeing share price plus the reinvestment of dividends) achieved above a minimum level during an investment period. The program requires a return on investment or threshold rate of 3% per year, compounded annually on the fund's starting value, before distributions will be made. Distributions are possible every two years -- in 1998, 2000, 2002 and so forth.

"Period 1 is only two years long because we didn't want employees to wait four years to have their first opportunity to receive a distribution," Condit said. "The four-year investment periods reflect our emphasis on increasing shareholder value over the long term, consistent with the company's fundamental goal. At the same time, overlapping periods allow for more frequent potential distributions."

There would be no distribution if the return on the trust investment averages 3% or less per year at the end of an investment period. "While there's no guaranteed distribution, there's plenty of opportunity for us to do the right things to create value," said Condit.

The 3% per year threshold rate, compounded annually, is designed to allow the trust to retain some of its potential gains in order to grow the base level of the investment in Boeing stock. "This threshold is a mechanism that allows for building compounded growth into the stock investment, creating the possibility of greater distributions in future years," said Condit.
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/CONTACT: Paul Binder of The Boeing Company, 206-655-6123, or http://www.boeing.com/

/Boeing's press releases are available through Company News On-Call by fax, 800-758-5804, ext. 109119, or http://www.prnewswire.com/

(BA)

CO: Boeing Co. ST: Washington IN: AIR SU:

RF-TW -- SFTH009 -- 1103 07/11/96 10:21 EDT
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Publication:PR Newswire
Date:Jul 11, 1996
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