Two shareholders have advised the Company that they intend to present the following resolution at the Annual Meeting. In accordance with applicable proxy regulations, the proposed resolution and supporting statement, for which the Board of Directors and the Company accept no responsibility, are set forth below. Approval of this proposal would require the affirmative vote of a majority of the outstanding shares of common stock present in person or by proxy and entitled to vote at the Annual Meeting.
RESOLVED: That the shareholders recommend to The Boeing Company (hereafter referred to as the corporation) that it obtain shareholder approval for political contributions in excess of $10,000 annually to a political party, and that it publish in its annual report to shareholders a list of political contributions for the previous 12-month period.
Proponents' Supporting Statement
The corporation, through its Board of Directors, contributes many thousands of dollars to the political process in an effort to influence political decisions dealing with a variety of items ranging from socio-economic issues to environmental factors.
Oftentimes, an individual shareholder may differ with the corporate view toward the above issues. But, by virtue of ownership of shares, the shareholder is giving tacit approval to the Directors to contribute to a political party which is in opposition to the shareholder's individual views.
At the very least, a shareholder of a public-traded corporation is entitled to know where and when his/her views differ from the corporate view regarding the political process and its bearing on socio-economic and environmental factors.
This proposal would reveal any differences between the shareholder's individual views and corporate activity in the political process. Consequently, the shareholder would have an opportunity to defend his/her views by taking appropriate action.
Without this proposal, a corporate decision to support a political party could be tantamount to coercive cooptation of shareholders in accepting or supporting a political party contrary to a shareholder's individual view.
The publication of political contributions should be in tandem with a limit on political contributions of $10,000.00. The $10,000.00 limit will help abate "influence peddling." Huge corporate contributions to a political party (referred to as "soft money") are ultimately and indirectly used to buy influence on a particular issue from a candidate (referred to as "hard money"). Until such a time that effective campaign finance laws are enacted (which appears remote at this junction) shareholders must initiate action at the grass roots level in order to curb the abuse of corporate contributions to the political process.
A past statesman cautioned us on this subject: All that remains to insure corrupt government is for all good (wo)men to do nothing. The words may not be the exact quotation, but the message is clear: sit on your rights too long and you may lose the privilege to exercise them.
If shareholders fail to act on this proposal, its failure could seriously undermine the principle of "One (wo)man — one vote!"
If shareholders wish to contribute or participate in the political process, most of us are mature enough to do so on an individual basis. We should not be subjected to coercive cooptation in supporting a political party which stands in opposition to our individual beliefs.
Board of Directors' Response
The Company's political contributions, which are a legitimate business expense, are made under the direction of the Board of Directors in compliance with applicable laws and regulations, are made only with advance approval by senior management of the Company, and are reported to the Board annually.
Under the Federal Election Campaign Act, the Company is permitted to make contributions to the nonfederal accounts of national party committees from the Company's general treasury funds (sometimes referred to as "soft money" contributions) and to establish and administer a separate segregated fund (commonly known as a political action committee or PAC). The Company, however, is prohibited from making contributions to candidates for federal elective office.
The Boeing Company Political Action Committee ("BPAC") was established by the Company in accordance with federal law. BPAC is governed by a board of directors who are Company employees and makes political contributions solely from the contributions it receives from its members, who are eligible Boeing employees.
Certain states and local jurisdictions permit the Company to make contributions to candidates and political parties. The Company makes political contributions in such states and localities when the Company believes it to be in the best interest of the Company. From time to time, the Company also makes contributions in support of, or in opposition to, specific ballot issues in which the Company has a substantial interest.
The Company believes that all its political contributions are publicly reported, either by the Company or by the recipient of the contribution, or by both the Company and the recipient.
Imposing a shareholder approval requirement for political contributions greater than $10,000 would simply be impractical. The cost of preparing proxy materials to solicit shareholder approval would be prohibitive in relation to any possible benefit to shareholders. The information that would be required by this proposal to be disclosed in the Company's Annual Report to shareholders would also require additional preparation time and unnecessary expense to the Company. Most importantly, due to the time required to prepare and clear proxy materials and submit matters to a shareholder vote, such approval could not be obtained within a reasonable time. The effect of the proposal would be to limit the Company's ability to support those government activities that are an important element of its business. These activities, and the Company's support of them, are for the benefit of all shareholders and undertaken in their best interest.
For these reasons, the Board of Directors believes that no useful purpose would be served by taking the actions advocated by this proposal and that such actions would result in a waste of the Company's resources.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS