 |  |
| Notes
to Consolidated Financial Statements | | |
|
| |
| | | | | | |
| Note 21 – Shareholders’ Equity |
| In August 1998, the Board of Directors approved a resolution authorizing
management to repurchase up to 15% of the Company’s issued and outstanding
stock as of June 30, 1998 (excluding shares held by the ShareValue Trust), which
amounted to 145,899,000 shares. This repurchase program was completed in 2000.
In December 2000 an additional repurchase program was authorized by the Board
of Directors. Under this resolution, management is authorized to repurchase up
to 85,000,000 shares. As of December 31, 2001, the Company had repurchased 40,734,500
shares. | | Twenty million shares of authorized preferred stock
remain unissued. | | Note 22 – Share-Based
Plans | | The ‘Share-based plans expense’ caption on
the Consolidated Statements of Operations represents the total expense recognized
for all company plans that are payable only in stock. These plans are described
below. | | The following summarizes share-based expense as of December
31, 2001, 2000 and 1999, respectively, with an offset to additional paid-in capital: |
| |
|  | 2001 | | 2000 | 1999 | |
| |
| Performance Shares | | ShareValue Trust | | Stock
options, other | | |
| |
|
| |
 | |
| | | $378 | | $316 | $209 | |
| |
| Performance Shares
Performance Shares are stock units that are convertible to common stock contingent
upon stock price performance. If, at any time up to five years after award, the
stock price reaches and maintains a price equal to 161.0% of the stock issue price
at the date of the award (representing a growth rate of 10% compounded annually
for five years), 25% of the Performance Shares awarded are convertible to common
stock. Likewise, at stock prices equal to 168.5%, 176.2%, 184.2%, 192.5% and 201.1%
of the stock price at the date of award, the cumulative portion of awarded Performance
Shares convertible to common stock are 40%, 55%, 75%, 100% and 125%, respectively.
Performance Shares awards not converted to common stock expire five years after
the date of the award; however, the Compensation Committee of the Board of Directors
may, at its discretion, allow vesting of up to 100% of the target Performance
Shares if the Company’s total shareholder return (stock price appreciation
plus dividends) during the five-year performance period exceeds the average total
shareholder return of the S&P 500 over the same period. | | No
Performance Share awards were converted to common stock or deferred stock units
in 2001. During 2000, 75% of the Performance Share awards expiring February 22,
2004, were converted to common stock or deferred stock units (cumulative 3,402,874
Performance Shares), and 55% of the Performance Share awards expiring February
28, 2005, were converted to common stock or deferred stock units (cumulative 3,495,725
Performance Shares). | | The following table summarizes
information about Performance Shares outstanding at December 31, 2001, 2000 and
1999, respectively. Shares outstanding are not reduced for cumulative Performance
Shares converted to common stock or deferred stock units. |
| (shares in thousands) | Performance
Shares Outstanding | | |
| |
| Grant
Date | Expiration Date | Issue Price |
| | 2001 | | 2000 | 1999 | |
| |
| 2/23/98 | 2/23/03 | $50
11/16 | | 12/14/98 | 2/23/03 | 33
9/16 | | 2/22/99 | 2/22/04 | 36
1/4 | | 2/28/00 | 2/28/05 | 37 |
| 10/09/00 | 2/28/05 | 37 |
| 2/26/01 | 2/26/06 | 62
3/4 | | |
| 3,528 | | |
| 4,535 | | 5,030 |
| 1,294 | | 5,797 |
| |
| | |
| |
| |
| Other stock unit awards. The total number of stock unit awards that are
convertible only to common stock and not contingent upon stock price were 1,597,343,
1,880,544 and 1,629,945 as of December 31, 2001, 2000 and 1999, respectively. |
| ShareValue Trust The ShareValue
Trust, established effective July 1, 1996, is a 14-year irrevocable trust that
holds Boeing common stock, receives dividends, and distributes to employees appreciation
in value above a 3% per annum threshold rate of return. As of December 31, 2001,
the Trust held 39,691,015 shares of the Company’s common stock, split equally
between two funds, “fund 1” and “fund 2.” If on June 30, 2002,
the market value of fund 1 exceeds $949 (the threshold representing a 3% per annum
rate of return), the amount in excess of the threshold will be distributed to
employees. The June 30, 2002, market value of fund 1 after distribution (if any)
will be the basis for determining any potential distribution on June 30, 2006.
Similarly, if on June 30, 2004, the market value of fund 2 exceeds $913, the amount
in excess of the threshold will be distributed to employees. Shares held by the
Trust on June 30, 2010, after final distribution will revert back to the Company. |
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