Shareholder Resolution

WHEREAS: During the next 20 years, the United States military plans to develop technologies with the potential to wage war from space;

Plans for this are explicitly laid out in documents such as Vision for 2020, a 1996 report of the US Space Command which coordinates the use of the Army, Naval and Air Force Space Forces;

This Report "serves as a vector for the evolution of military space strategy into the 21st century." During the early portion of the 21st century, it states, "space power will . . . evolve into a separate and equal medium of warfare;"

A July 1999 Pentagon space policy paper directs the Space Command to start developing tactics and doctrine for conducting warfare in the heavens;

The US Space Command believes that "accelerating rates of technological development will be increasingly driven by the commercial sector, not the military."

The development of the 1998 Long Range Plan of the US Space Command was assisted by 75 commercial entities, including Boeing Company;

Some military analysts believe that US companies are likely to invest $500 billion in space by 2010, hence, the military will be called upon to defend American interests in space;

Critics of the development of space weapons, including a member of the Senate Armed Forces Committee, believe that such a development would be "a mistake of historic proportions" that would trigger an arms race in space;

On Nov. 1, 1999, in the UN General Assembly resolution, "Prevention of an Arms Race in Outer Space," 138 nations reaffirmed The Outer Space Treaty of 1967, and specifically its provision that reserves space "for peaceful purposes;"

THEREFORE BE IT RESOLVED: The shareholders request the Board of Directors to provide a comprehensive report describing our Company's involvement in space-based weaponization. The report would be made available to shareholders on request within six months of the 2001 annual meeting. It may omit proprietary information and be prepared at reasonable cost.

Proponents' Supporting Statement

The proponents of this resolution believe that outer space is the common heritage of all and should be used for peaceful purposes, for economic, scientific and cultural development, for the well-being of all peoples. We also believe that shareholders deserve company transparency with regard to our company's involvement in research, development and promotion of weapons for space. Thus the request for this report which could describe the following aspects:

• Current value of outstanding contracts to develop components of the Space Command's programs;
• Amount of the company's own money (versus government funding) spent on in-house research and development in this segment of its business;
• The ethical and financial reasons for being involved in the Space Command program.

We urge shareholder support for this resolution.

Board of Directors' Response

Boeing enjoys a rich heritage of space and communications progress and it has established a series of market aligned businesses at the leading edge of national and international space and communications achievement. The space-based communications and services marketplace represents an exciting and burgeoning market in which Boeing is already and will continue to be a major participant. Space figures prominently into the Company's push to develop new products and services. It is the Company's goal to become the world leader in integrated, space-based information and communications.

The U.S. government relies on the technological and manufacturing capability of the private sector to produce the equipment it has determined will be needed to achieve a sound defense posture. Boeing, with its technological capabilities and expertise, participates in the nation's defense activities, including the use of weapons in space, in the belief that it is appropriate to support governmental decisions made in our open, democratic society in the quest for peace and national security.

The Company's policy is to report to its shareholders on matters of significant interest. This reporting is a continuing responsibility and concern of the Company's management. Information on its space-related operations is provided in the Company's annual reports, quarterly earnings announcements, and other statements to the press. The annual reports carry a description of the Company's activities in some detail and are consistent with management's basic responsibility to discuss the business operations of the Company.

We do not believe that the Company should be required to provide the special report requested by this resolution.