The following tables show the estimated annual benefits payable to an employee, assuming retirement on January 1, 1998, at age 65 after selected periods of service, in each case including amounts to be paid pursuant to applicable defined benefit supplementary and excess pension award plans, based on straight life annuity amounts. The plans also permit selection of a joint and survivor annuity with reductions in the benefits shown. The benefits shown in the tables are not subject to any deduction for Social Security or other offset amounts.
Boeing Employee Retirement Plan (the "Boeing Plan")
McDonnell Douglas Employee Retirement Income Plan (the "MDC Plan")
Boeing North American Retirement Plan
Under the Boeing Plan, "credited" service begins after one year of employment with the Company. Credit for the first year is made up during the 20th, 21st, and 22nd years of employment. Under both the MDC Plan and the BNA Plan, credited service begins at commencement of employment. The Named Executive Officers have the following years of credited service:
Pursuant to Mr. Stonecipher's Employment Agreement with the Company (see Employment Contracts and Termination of Employment Arrangements on page *), Mr. Stonecipher will receive credit for twice as many years of service as he actually works for the Company and McDonnell Douglas. The years of credited service shown above are twice his actual periods of employment to January 1, 1998. In addition, the Company will provide a supplemental pension payment equal to the difference between (a) what Mr. Stonecipher would have received from a prior employer had he stayed with that employer through the expiration of the Employment Agreement and (b) the pension payments he is actually entitled to receive from the prior employer, McDonnell Douglas, and the Company.
Pension benefits are based on earnings in the last ten years of employment. Under the Boeing Plan, the amount used is (a) the average annual salary for the highest consecutive 60 months plus (b) the average annual incentive compensation for the five highest years. Under the MDC Plan, the amount used is (a) the average annual salary for the highest five consecutive years plus (b) the average annual incentive compensation for the last five years prior to retirement. Under the BNA Plan, the amount used is the average of the highest five consecutive calendar years of compensation that include non-deferred incentive compensation. The total annual averages for the Named Executive Officers are currently as follows:
In the Bonus column of the Summary Compensation Table on page *, amounts shown are net of approximately 30% of the incentive award, which was converted into BSUs. The values of BSUs (at the closing market price of Boeing common stock on the day the BSUs were granted) are included in the Restricted Stock column. Compensation covered under the plans referred to above includes the full incentive award.