⁽¹⁾ All options shown for the Named Executive Officers were granted on February 24, 1997 (except for Mr. McLuckey's grant for 40,120 shares, which was granted on January 13, 1997), pursuant to the 1997 Incentive Stock Plan for Employees. The numbers and exercise prices of options granted have been adjusted for the 2-for-1 stock split that occurred on June 6, 1997. The per share exercise price is the Fair Market Value of Boeing common stock (as defined on page *) on the date of grant, and the term of each option is ten years, subject to earlier termination in the event of termination of employment. The options vest after one year's employment from the date of the grant. As to each grant, 40% becomes exercisable after one year from the date of grant, an additional 30% after three years, and the remaining 30% after five years, except that as to Mr. McLuckey's grant for 40,120 shares, 33% becomes exercisable after one year from the date of grant, and the remaining 67% after two years. The exercise price may be paid by cash or by delivery of shares of Boeing common stock already owned. The schedule on which options become exercisable is subject to acceleration for retirement, death, disability or layoff after vesting.

Mr. McLuckey's 40,120-share grant was awarded to replace a long-term cash incentive award opportunity that Mr. McLuckey would have been eligible to receive had he continued employment with Rockwell International Corporation ("Rockwell") after the Company acquired Rockwell's aerospace and defense businesses on December 6, 1996. Similar options were granted to certain other Rockwell executives who became employees of the Company.

⁽²⁾ Potential realizable values are based on assumed compound annual appreciation rates specified by the SEC. These increases in value are based on speculative assumptions and are not intended to forecast possible future appreciation, if any, of the Company's stock price.

⁽³⁾ As a result of the Merger, each outstanding McDonnell Douglas stock option, including outstanding options then held by Mr. Stonecipher, was converted into a Company option at the same exercise price and term as the McDonnell Douglas option. The options issued in substitution for previously issued McDonnell Douglas options are not included in the above table.

⁽⁴⁾ Each amount represents the increase in total market value of outstanding Boeing common stock consistent with the stock price appreciation assumptions above. On the date on which the last of these options were granted, February 24, 1997, there were 721,164,184 shares of common stock outstanding (as adjusted for the 2-for-1 stock split that occurred on June 6, 1997).

Aggregated Option/SAR Exercises in 1997
and Year-End Option/SAR Values

⁽¹⁾ The value realized is the difference between the Fair Market Value of the underlying stock at the time of exercise and the exercise price.

⁽²⁾ Amounts are based on the Fair Market Value of Boeing common stock on the last trading day of the year, December 31, 1997, which was $48.875. There is no guarantee that if and when these options are exercised they will have this value.

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