-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PG/PfejwJ1gXbh9WKxgVDbsMU7JpUECud9u0Z5yzFUUHRblE/nGk+H6DhYr9GBOu pGyQ1Wlqyvvoynu1YS9m4g== 0000012927-96-000005.txt : 19960514 0000012927-96-000005.hdr.sgml : 19960514 ACCESSION NUMBER: 0000012927-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOEING CO CENTRAL INDEX KEY: 0000012927 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT [3721] IRS NUMBER: 910425694 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00442 FILM NUMBER: 96560907 BUSINESS ADDRESS: STREET 1: P O BOX 3707 MS 1F 31 CITY: SEATTLE STATE: WA ZIP: 98124 BUSINESS PHONE: 2066552121 MAIL ADDRESS: STREET 1: 7755 EAST MARGINAL WAY SOUTH CITY: SEATTLE STATE: WA ZIP: 98124-2207 FORMER COMPANY: FORMER CONFORMED NAME: BOEING AIRPLANE CO DATE OF NAME CHANGE: 19730725 10-Q 1 FORM 10-Q FOR THE PERIOD ENDING MARCH 31, 1996 1 ............................................................................... ............................................................................... SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 Commission file number 1-442 THE BOEING COMPANY 7755 East Marginal Way South Seattle, Washington 98108 Telephone: (206) 655-2121 State of incorporation: Delaware IRS identification number: 91-0425694 The registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days. As of April 30, 1996, there were 346,095,407 shares of common stock, $5.00 par value, issued and outstanding. ............................................................................... ............................................................................... 1 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements THE BOEING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF NET EARNINGS (Dollars in millions except per share data) (Unaudited) Three months ended March 31 - ------------------------------------------------------------------------------- 1996 1995 - ------------------------------------------------------------------------------- Sales and other operating revenues $4,293 $5,037 Costs and expenses 4,139 4,811 - ------------------------------------------------------------------------------- Earnings from operations 154 226 Other income, principally interest 57 31 Interest and debt expense (41) (40) - ------------------------------------------------------------------------------- Earnings before federal taxes on income 170 217 Federal taxes on income 51 36 - ------------------------------------------------------------------------------- Net earnings $ 119 $ 181 =============================================================================== Earnings per share $ .35 $ .53 =============================================================================== Cash dividends per share $ .25 $ .25 =============================================================================== See notes to consolidated financial statements. 2 3 THE BOEING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Dollars in millions except per share data) March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- (Unaudited) Assets - ------------------------------------------------------------------------------- Cash and cash equivalents $ 4,387 $ 3,730 Short-term investments 145 Accounts receivable 1,427 1,470 Current portion of customer financing 75 205 Deferred income taxes 748 840 Inventories 14,791 14,001 Less advances and progress billings (7,568) (7,068) - ------------------------------------------------------------------------------- Total current assets 14,005 13,178 Customer financing 1,133 1,660 Property, plant and equipment, at cost 13,855 13,744 Less accumulated depreciation (7,465) (7,288) Deferred income taxes 97 58 Other assets 1,049 746 - ------------------------------------------------------------------------------- $22,674 $22,098 =============================================================================== Liabilities and Shareholders' Equity - ------------------------------------------------------------------------------- Accounts payable and other liabilities $ 6,728 $ 6,245 Advances in excess of related costs 621 510 Income taxes payable 360 389 Current portion of long-term debt 23 271 - ------------------------------------------------------------------------------- Total current liabilities 7,732 7,415 Accrued retiree health care 2,484 2,441 Long-term debt 2,338 2,344 Shareholders' equity: Common shares, par value $5.00 - 600,000,000 shares authorized; 349,256,792 shares issued 1,746 1,746 Additional paid-in capital 641 615 Retained earnings 7,865 7,746 Less treasury shares, at cost - 1996 - 3,307,967; 1995 - 5,304,135 (132) (209) - ------------------------------------------------------------------------------- Total shareholders' equity 10,120 9,898 - ------------------------------------------------------------------------------- $22,674 $22,098 =============================================================================== See notes to consolidated financial statements. 3 4 THE BOEING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in millions) (Unaudited) Three months ended March 31 - ------------------------------------------------------------------------------- 1996 1995 - ------------------------------------------------------------------------------- Cash flows - operating activities: Net earnings $ 119 $ 181 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 240 265 Changes in assets and liabilities - Short-term investments (145) 559 Accounts receivable 43 50 Inventories, net of advances and progress billings (290) (330) Accounts payable and other liabilities 569 418 Advances in excess of related costs 111 (48) Income taxes payable and deferred 24 157 Other assets (303) (350) Accrued retiree health care 43 37 - ------------------------------------------------------------------------------- Net cash provided by operating activities 411 939 - ------------------------------------------------------------------------------- Cash flows - investing activities: Customer financing additions (48) (173) Customer financing reductions 691 236 Plant and equipment, net additions (160) (224) - ------------------------------------------------------------------------------- Net cash provided (used) by investing activities 483 (161) - ------------------------------------------------------------------------------- Cash flows - financing activities: Debt financing (254) (3) Shareholders' equity - Cash dividends paid (86) (85) Stock options exercised, other 103 14 - ------------------------------------------------------------------------------- Net cash used by financing activities (237) (74) - ------------------------------------------------------------------------------- Net increase in cash and cash equivalents 657 704 Cash and cash equivalents at beginning of year 3,730 2,084 - ------------------------------------------------------------------------------- Cash and cash equivalents at end of 1st quarter $4,387 $2,788 =============================================================================== See notes to consolidated financial statements. 4 5 THE BOEING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in millions) (Unaudited) Note 1 - Consolidated Financial Statements The consolidated interim financial statements included in this report have been prepared by the Company without audit. In the opinion of management, all adjustments necessary for a fair presentation are reflected in the interim financial statements. Such adjustments are of a normal and recurring nature. The results of operations for the period ended March 31, 1996, are not necessarily indicative of the operating results for the full year. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's 1995 Annual Report. Note 2 - Earnings per Share Earnings per share are computed on the basis of the weighted average number of shares outstanding during the period. The weighted average number of shares was 344.8 million and 341.0 million for the three-month periods ended March 31, 1996 and 1995. There was no material dilutive effect on earnings per share due to common stock equivalents. Note 3 - Federal Taxes on Income The provisions for federal taxes on income for the three-month periods ended March 31, 1996 and 1995, were reduced by $9 and $18 applicable to Foreign Sales Corporation tax benefits and by $0 and $23 applicable to research and experimentation credit, representing combined reductions of 5.3% and 18.9%, respectively, from the statutory tax rate. Income tax payments (refunds) were $0 and $(124) for the three months ended March 31, 1996 and 1995. Note 4 - Accounts Receivable Accounts receivable consisted of the following: March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- Accounts receivable under U.S. Government contracts $1,024 $1,059 Accounts receivable from commercial and foreign military customers 403 411 - ------------------------------------------------------------------------------- $1,427 $1,470 =============================================================================== 5 6 Note 5 - Inventories Inventories consisted of the following: March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- Commercial jet transport programs and long-term contracts in progress $13,821 $13,107 Commercial spare parts, general stock materials and other 970 894 - ------------------------------------------------------------------------------- $14,791 $14,001 =============================================================================== Note 6 - Customer Financing Long-term customer financing, less current portion, consisted of the following: March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- Notes receivable $ 159 $ 721 Investment in sales-type leases 400 351 Operating lease aircraft, at cost, less accumulated depreciation of $340 and $326 674 688 - ------------------------------------------------------------------------------- 1,233 1,760 Less valuation allowance (100) (100) - ------------------------------------------------------------------------------- $1,133 $1,660 =============================================================================== Financing for aircraft is collateralized by security in the related asset, and historically the Company has not experienced a problem in accessing such collateral when necessary. Sales and other operating revenues for the first three months of 1996 and 1995 included interest income of $15 and $50 associated with notes receivable and sales-type leases. Note 7 - Other Assets Other assets consisted of the following: March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- Prepaid pension expense $1,003 $698 Investments, other 46 48 - ------------------------------------------------------------------------------- $1,049 $746 =============================================================================== 6 7 Note 8 - Accounts Payable and Other Liabilities Accounts payable and other liabilities consisted of the following: March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- Accounts payable $3,098 $3,017 Accrued compensation and employee benefit costs 1,302 1,374 Lease and other deposits 849 508 Other 1,479 1,346 - ------------------------------------------------------------------------------- $6,728 $6,245 =============================================================================== Note 9 - Long-Term Debt Long-term debt consisted of the following: March 31 December 31 1996 1995 - ------------------------------------------------------------------------------- Unsecured debentures and notes: 8 3/8% due Mar. 1, 1996 $ $ 250 6.35% due Jun. 15, 2003 299 299 8 1/10% due Nov. 15, 2006 175 175 8 3/4% due Aug. 15, 2021 398 398 7.95% due Aug. 15, 2024 300 300 7 1/4% due Jun. 15, 2025 247 247 8 3/4% due Sep. 15, 2031 248 248 8 5/8% due Nov. 15, 2031 173 173 7.50% due Aug. 15, 2042 100 100 7 7/8% due Apr. 15, 2043 173 173 6 7/8% due Oct. 15, 2043 125 125 Other notes 123 127 Less current portion (23) (271) - ------------------------------------------------------------------------------- $2,338 $2,344 =============================================================================== The Company has $2,000 currently available under credit line agreements with a group of commercial banks. Under these agreements, there are compensating balance arrangements, and retained earnings totaling $1,575 are free from dividend restrictions. The Company has complied with the restrictive covenants contained in debt agreements. Total debt interest, including amounts capitalized, was $55 and $55 for the three-month periods ended March 31, 1996 and 1995, and interest payments were $60 and $57, respectively. 7 8 Note 10 - Shareholders' Equity Changes in shareholders' equity for the three-month periods ended March 31, 1996 and 1995, consisted of the following: (Shares in thousands) - ------------------------------------------------------------------------------- Common Stock ------------ Additional Treasury Stock Par Paid-In Retained -------------- Shares Value Capital Earnings Shares Amount - ------------------------------------------------------------------------------- Balance - December 31, 1994 349,257 $1,746 $586 $7,696 8,378 $(328) - ------------------------------------------------------------------------------- Net earnings 181 Treasury shares issued for incentive stock plans, net (4) (369) 15 Tax benefit related to incentive stock plans 2 Stock appreciation rights expired or surrendered 1 - ------------------------------------------------------------------------------- Balance - March 31, 1995 349,257 $1,746 $585 $7,877 8,009 $(313) =============================================================================== - ------------------------------------------------------------------------------- Balance - December 31, 1995 349,257 $1,746 $615 $7,746 5,304 $(209) - ------------------------------------------------------------------------------- Net earnings 119 Treasury shares issued for incentive stock plans, net (2) (1,995) 77 Tax benefit related to incentive stock plans 25 Stock appreciation rights expired or surrendered 3 - ------------------------------------------------------------------------------- Balance - March 31, 1996 349,257 $1,746 $641 $7,865 3,309 $(132) =============================================================================== 8 9 Note 11 - Contingencies Various legal proceedings, claims and investigations related to products, contracts and other matters are pending against the Company. Most significant legal proceedings are related to matters covered by insurance. In January 1991, the Company received from the U.S. Government a notice of partial termination for default which terminated most of the work required under contracts to develop and install a new air defense system for Saudi Arabia, known as the Peace Shield program. In June 1991, the Government selected another contractor to perform the work which is the subject of the contracts that have been terminated for default, and the Government may assert claims related to the reprocurement. Management's position, supported by outside legal counsel which specializes in government procurement law, is that the grounds for default asserted by the Government in the Peace Shield termination are not legally supportable. Accordingly, management and counsel are of the opinion that on appeal the termination for default has a substantial probability of being converted to termination for the convenience of the Government, which would eliminate any Government claim for cost of reprocurement or other damages. Additionally, the Company has a legal basis for a claim for equitable adjustment to the prices and schedules of the contracts (the "Contract Claim"). Many of the same facts underlie both the Contract Claim and the Company's appeal of the Government's termination action. The Company filed its complaint in the United States Court of Federal Claims to overturn the default termination in order to obtain payment of the Contract Claim. In conjunction with the notice of partial termination in January 1991, the Government demanded the repayment of unliquidated progress payments in the amount of $605 plus interest. In April 1995, the parties executed an agreement deferring the Company's potential obligation to repay the $605 from January 25, 1991, until a decision of the court or earlier settlement. The deferment agreement is subject to annual review by the Government. The parties have been engaged in the discovery phase of the litigation, with the trial scheduled for March 1997, and have concurrently engaged in discussions which could lead to final settlement. On October 20, 1995, the court determined all activities in the lawsuit would be "suspended in light of the prospect of settlement." There can be no assurance that the Government will agree to final settlement on terms acceptable to the Company. If a final settlement is not reached, the Company expects that its position will ultimately be upheld with respect to the termination action and that it will recover on the Contract Claim. The Company's financial statements have been prepared on the basis of a conservative estimate of the Contract Claim and the Company's position that the termination was for the convenience of the Government. If a final settlement is not reached, the Company cannot, at this time, reasonably estimate the length of time that will be required to resolve the termination appeal and the Contract Claim. In the event that final settlement does not occur and the Company's appeal of the termination for default is not successful, the Company could realize a pretax loss on the program approximating the value of the unliquidated progress payments plus related interest and potential damages assessed by the Government. 9 10 REVIEW BY INDEPENDENT ACCOUNTANTS The consolidated statement of financial position as of March 31, 1996, and the consolidated statements of net earnings and cash flows for the three- month periods ended March 31, 1996 and 1995, have been reviewed by the registrant's independent accountants, Deloitte & Touche LLP, whose report covering their review of the financial statements follows. INDEPENDENT ACCOUNTANTS' REVIEW REPORT Board of Directors and Shareholders The Boeing Company Seattle, Washington We have reviewed the accompanying condensed consolidated statement of financial position of The Boeing Company and subsidiaries as of March 31, 1996, and the related condensed consolidated statements of net earnings and cash flows for the three-month periods ended March 31, 1996 and 1995. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with the standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We previously audited, in accordance with generally accepted auditing standards, the consolidated statement of financial position of The Boeing Company and subsidiaries as of December 31, 1995, and the related consolidated statements of net earnings, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated January 25, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 1995, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Seattle, Washington April 29, 1996 10 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Sales of $4.3 billion for the first quarter of 1996 were 15% below sales for the comparable period of 1995 due to fewer commercial jet transport deliveries. A total of 40 commercial jet transports were delivered, compared with 59 in the first three months of 1995. During the first quarter of 1996 deliveries for all models were limited by the recovery in production rates following the 10-week labor strike by the International Association of Machinists in the fourth quarter of 1995. Sales by business segment were as follows ($ in millions): First Quarter 1996 1995 ------ ------ Commercial aircraft $3,016 $3,685 Defense and space 1,277 1,352 ------ ------ Total $4,293 $5,037 ====== ====== Commercial jet transport deliveries were as follows: First Quarter Model 1996 1995 ---- ---- 737 15 29 747 3 8 757 7 14 767 7 8 777 8 - -- -- Total 40 59 == == Net earnings of $119 million for the first three months of 1996 were 34% below earnings for the comparable period in 1995, principally due to fewer commercial aircraft deliveries and a higher effective income tax rate. Partially offsetting the earnings effect of the lower first quarter sales were a lower level of research and development expense and increased corporate investment income. Research and development expense totaled $293 million for the quarter, compared with $404 million for the same period of 1995. 11 12 ___________________________________________________________________________ |Forward-Looking Information Is Subject To Risk And Uncertainty | |Certain statements in the financial discussion and analysis by management | |contain "forward-looking" information that involves risk and | |uncertainty, including projections for deliveries, sales and research and | |development, or other trend projections. Actual future results and trends | |may differ materially depending on a variety of factors, including the | |Company's successful execution of internal performance plans; product | |performance risks associated with regulatory certifications of the | |Company's commercial aircraft by the U.S. Government and foreign | |governments; other regulatory uncertainties; collective bargaining labor | |disputes, performance issues with key suppliers and subcontractors; | |governmental export and import policies; factors that result in | |significant and prolonged disruption to air travel worldwide; global trade | |policies; worldwide political stability and economic growth; changing | |priorities or reductions in the U.S. Government defense and space budget; | |termination of government contracts due to unilateral government action or | |failure to perform; and legal proceedings. | |___________________________________________________________________________| The effective tax rate for the first quarter of 1996 was 30.0%, compared with 16.6% for the first quarter of 1995. The higher effective tax rate for the first quarter of 1996 was due to the expiration of research and experimentation tax credits. The overall operating earnings margin, exclusive of research and development expense, was 10.4% for the first quarter of 1996, compared with 12.5% for the first quarter of 1995. The lower margin was primarily attributable to a model mix of commercial aircraft deliveries that included 8 777s in the first quarter of 1996, compared with no 777s in the first quarter of 1995 when the 777 was in the certification process. With regard to the 777 program, new commercial jet transport programs normally have lower operating profit margins due to initial tooling amortization and higher unit production costs in the early years of the program. Approximately 60 commercial aircraft deliveries are planned for the second quarter, and 215 are currently projected for the year. Total sales for 1996 are currently projected to be in the $22 billion range, compared with $19.5 billion in 1995. Research and development expense for the full year 1996 is currently projected to be in the $1.2 billion range, compared with $1.3 billion for 1995. Airline order activity continues to be encouraging, reflecting the continued growth in passenger traffic in all major airline markets and good profitability levels being experienced by the airline industry as a whole. During the first quarter, the Company announced increases in planned aircraft production rates on the 737, 747 and 757 models to take effect in 1997. Current monthly production of 18.5 aircraft per month is planned to increase to 27 per month by mid-1997. Significant orders totaling 180 commercial jet transports were announced in the first quarter and included orders for every model in the Boeing airplane family. Largest among these were from GE Capital Aviation Services (GECAS) for 107 aircraft consisting of 5 777s, 20 current-model 737s and 82 next-generation 737-600/700/800s; and from Malaysia Airlines for 15 777s and 10 long-range 747-400s. International Lease Finance 12 13 Corporation (ILFC) has increased its future fleet of Boeing 777s by ordering an additional 18 aircraft, and Trans World Airlines (TWA) will purchase 10 757s directly from Boeing. Program development continues on schedule for the longer-range 777-200 and stretched version 777-300 of the 777 family. During the first quarter the Rolls-Royce Trent 800 engine for the Boeing 777 was awarded its type certificates by the Federal Aviation Administration (FAA) and Europe's Joint Aviation Authority (JAA). In March the FAA gave approval for the General Electric GE-90-powered 777 to begin the 1000-cycle Extended Twin Operations (ETOPS) flight test program. Developments during the first quarter in the Company's defense and space segment included the first flight of the Boeing/Sikorsky joint venture prototype RAH-66 Comanche reconnaissance attack helicopter and receipt of a $345 million contract to upgrade the E-3 Airborne Warning and Control System (AWACS) radar system for the U.S. Air Force, NATO, and the United Kingdom. Liquidity and Capital Resources Cash and short-term investments increased by $802 million during the first three months of 1996, largely due to the sell-off of customer financing notes receivable. Although further sell-off of customer financing assets will occur as circumstances allow, there may also be new customer financings related to outstanding commitments. Inventory levels will continue to increase as the production rates build. The Company's financial liquidity position remains strong, with cash and short-term investments totaling $4.5 billion at March 31, 1996, and total long-term debt at 19% of total shareholders' equity plus debt. On March 1, 1996, the Company paid down $250 million of debt that matured on that date. The Company continues to maintain its $2.0 billion revolving credit line, which had been reduced from $3.0 billion in the third quarter of 1995. Backlog Contractual backlog of unfilled orders (which excludes purchase options and announced orders for which definitive contracts have not been executed, and unobligated Government contract values) was as follows ($ in billions): March 31 Dec. 31 1996 1995 -------- ------- Commercial aircraft $74.6 $66.5 Defense and space 5.6 5.8 ----- ----- Total $80.2 $72.3 ===== ===== Unobligated U.S. Government contract values not included in backlog totaled $7.5 billion at March 31, 1996, and $7.6 billion at December 31, 1995. 13 14 PART II - OTHER INFORMATION Item 1. Legal Proceedings See Note 11 to the Consolidated Financial Statements for a discussion of the Peace Shield termination. Item 4. Submission of Matters to a Vote of Security Holders (a) The Company's Annual Meeting of Shareholders was held on April 29, 1996. (c) At the Annual Meeting, in an uncontested election, four nominees of the Board of Directors were elected directors for three-year terms expiring on the date of the annual meeting in 1999. The votes were as follows (in thousands): For Withheld ------- -------- Robert A. Beck 284,289 2,974 Philip M. Condit 284,496 2,768 John B. Fery 284,431 2,832 Donald E. Petersen 284,379 2,884 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: (10) Material Contracts. Management Contracts and Compensatory Plans. (i) Supplemental Benefit Plan for Employees of The Boeing Company. Plan, as amended February 26, 1996. Filed herewith. (ii) Deferred Compensation Plan for Employees of The Boeing Company. Plan, as amended February 26, 1996. Filed herewith. (iii) Supplemental Retirement Plan for Executives of The Boeing Company. Plan, as amended February 26, 1996. Filed herewith. (15) Letter from independent accountants regarding unaudited interim financial Information. Page 15. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter covered by this report. - - - - - - - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE BOEING COMPANY ------------------ (Registrant) May 10, 1996 /s/ Gary W. Beil ----------- ------------------- (Date) Gary W. Beil Vice President and Controller 14 15 EXHIBIT (15) Letter from Independent Accountants Regarding Unaudited Interim Financial Information The Boeing Company and Subsidiaries The consolidated statement of financial position as of March 31, 1996, the consolidated statements of net earnings for the three-month periods ended March 31, 1996 and 1995, and the statements of cash flows for the three- month periods ended March 31, 1996 and 1995, have been reviewed by the registrant's independent accountants, Deloitte & Touche LLP, whose letter regarding such unaudited interim financial information follows. April 29, 1996 The Boeing Company Seattle, Washington We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of The Boeing Company and subsidiaries for the periods ended March 31, 1996 and 1995, as indicated in our report dated April 29, 1996; because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, is incorporated by reference in Registration Statement No. 33-46540 on Form S-3 and Prospectuses and in Registration Statement Nos. 2-48576, 2-93923, 33-25332, 33-31434, 33-43854, 33-58798, and 333-03191 on Form S-8. We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Seattle, Washington 15 16 Exhibit (10) (i) SUPPLEMENTAL BENEFIT PLAN FOR EMPLOYEES OF THE BOEING COMPANY Section 1. Purpose of the Plan. The Supplemental Benefit Plan for Employees of The Boeing Company (the Plan) was established effective January 1, 1978 by The Boeing Company (the Company). The purpose of the Plan is to supplement the benefits of certain employees under the Company's Employee Retirement Plan, Voluntary Investment Plans, Employee Stock Ownership Plan and Financial Security Plan to the extent that such benefits are reduced by the limitations on benefits and contributions imposed by Section 415 of the Internal Revenue Code of 1986 (the Code). For the period January 1, 1987 through May 31, 1987, the purpose of the Plan shall also be to supplement the limitation on Elective Deferrals imposed by Section 402(g)(1) of the Code, to the extent such deferrals for certain employees are required to be reduced. Effective January 1, 1989, the purpose of the Plan shall be expanded to also supplement the benefits of certain employees to the extent such benefits are curtailed because their Compensation exceeds the annual compensation limit permitted under Section 401(a)(17) of the Code. It is intended that the Plan shall be an Excess Benefit Plan as defined in Section 3 (36) of the Employee Retirement Income Security Act of 1974. Section 2. Eligibility and Participation. Participation and eligibility shall be limited to those Executive Payroll (formerly known as 90-Series) employees of the Company, or an affiliate or subsidiary, who are participants in the Company's Employee Retirement Plan, Voluntary Investment Plan or Financial Security Plan and whose benefits thereunder are affected by the limitations on benefits or contributions imposed by Section 415 and 401(a)(17) of the Code. Such persons shall be referred to as Participants. Section 3. Plan Benefits. Each Participant shall be entitled to benefits under this Plan as follows: (a) Employee Retirement Plan. With respect to the Employee Retirement Plan, the benefits under this Plan shall be the difference between the actual benefits of a Participant under the Employee Retirement Plan and the benefits that would have been payable under that plan except for the limitations on benefits imposed by Sections 415 and 401(a)(17) of the Code. The benefits payable under this Plan with respect to the Employee Retirement Plan shall be payable to the Participant or to any other person who is receiving or entitled to receive benefits with respect to the Participant under the Employee Retirement Plan, and shall be paid in the same form, at the same times and for the same period as benefits are paid with respect to the Participant under the Employee Retirement Plan. (b) Voluntary Investment Plans; Financial Security Plan; Employee Stock Ownership Plan. With respect to the Voluntary Investment Plans, the Financial Security Plan and the Employee Stock Ownership Plan (the "individual account plans"), the benefits under this Plan shall be determined separately for each such plan and for each year for which 16 17 the contributions and other additions to the account of a Participant are reduced because of Sections 415, 401(a)(17) and 402(g)(1) of the Code from what they would otherwise have been except for that provision. The benefits under this Plan with respect to a particular year shall be the additional benefit that would have been payable under the individual account plan to which the aforesaid reduction is applicable if the reduction on contributions and other additions had not been made. All amounts deferred under this Plan shall be credited to the Supplemental Benefit Plan accounts of Participants at the time such amounts would otherwise have been credited to their accounts under the individual account plans. Interest shall be credited to each Participant's account balance at the same time and at the same rate of interest as is established for the period involved under the Deferred Compensation Plan for Employees of The Boeing Company. Benefits under this Plan shall be payable to the Participant, or to any person receiving or entitled to receive benefits with respect to the Participant under the Voluntary Investment Plans of the Company (the "VIP"), and shall be paid in any form allowable under the VIP at the same time or times and for the same periods as benefits are payable under the VIP to or with respect to such Participant. Section 4. Funding. The Plan shall be unfunded, and the benefits under the Plan shall be paid only from the general assets of the Company. Section 5. Administration. The Plan shall be administered by the Compensation Committee of the Board of Directors of The Boeing Company. No member of the Committee shall become a Plan Participant. The Committee shall make such rules, interpretations, determinations of fact and computations as it may deem appropriate. Any decision of the Committee with respect to the Plan, including (without limitation) any determination of eligibility to participate in the Plan and any calculation of plan benefits, shall be conclusive and binding on all persons. The Committee shall submit to the Board of Directors periodic reports covering the operation of the Plan. Section 6. Amendment and Termination. The Boeing Company shall have the authority to amend or terminate the Plan at any time. In the event of Plan amendment or termination, a Participant's benefits under the Plan shall not be less than the Plan benefits to which the Participant would be entitled if the Participant had terminated employment immediately prior to such amendment or termination of the Plan. Section 7. Employment Rights. Nothing in the Plan shall be deemed to give any person any right to remain in the employ of the Company or affect any right of the Company to terminate a person's employment with or without cause. 17 18 Section 8. Employee Rights. No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, execution, attachment, garnishment, or any other legal process, and any attempt to do so shall be void. 18 19 Exhibit (10) (ii) DEFERRED COMPENSATION PLAN FOR EMPLOYEES OF THE BOEING COMPANY 1. Purpose. The purpose of the Deferred Compensation Plan for Employees of The Boeing Company (the "Plan") is to provide a means by which eligible employees may defer payment of base salaries and of awards made under the Company's Incentive Compensation Plan (the "ICP"). 2. Eligibility. Any Executive Payroll employee, including those employed by an affiliate or subsidiary of the Company which, pursuant to the provisions prescribed therein, has adopted The Boeing Company Employee Retirement Plan, the Voluntary Investment Plan and the Employee Financial Security Plan, shall be eligible to participate in this Plan; provided, that the Committee shall designate those Executive Payroll employees who are eligible to elect salary deferrals hereunder. 3. Elections. An eligible employee may elect deferrals, by executing and delivering to the Company a notice which shall state: in the case of salary deferrals, the percentage of the Participant's base salary (but not more than 50% thereof) to be deferred in each regular pay period, and in the case of deferrals of ICP cash awards, the percentage of the award to be deferred (which shall be all or any portion thereof), and in the case of ICP awards other than in cash, an election to defer such award (such election to apply to all of any non-cash award), and with respect to any of the above elections, the method for crediting investment earnings on deferred amounts. A notice of election will remain in effect until changed by a subsequent notice to the Company increasing or decreasing the percentage of future salary or ICP cash awards to be deferred, terminating an election to defer non-cash ICP awards, or changing the method for crediting investment earnings on future deferrals. Any election or change in election must be made by December 1 to be effective for a salary deferral for the following year, or for any cash or non-cash award made under the ICP in the following year, or for changing the earnings credit method for deferrals made in the following year. A Participant may request that the Committee approve cancellation of a salary deferral election during the year for which such deferral was elected. No such request shall be approved except upon a showing of substantial hardship not capable of being alleviated through the use of other resources reasonably available to the Participant. If approved, such cancellation shall have prospective effect only, from the date of such approval. If a Participant terminates participation in this Plan, all amounts accumulated in the Participant's account prior to termination will continue to be held subject to the Plan. 19 20 For purposes of the Plan, a "Participant" means an employee or former employee having an account under the Plan. 4. Earnings Credits on Deferred Amounts. All amounts deferred under the Plan shall be credited to the Participant's Plan account at the time an award is made. Each account shall be credited with earnings thereon, under the Interest Credit method or the Stock Unit method, at the election of the Participant, such election to be irrevocable once made. In the absence of an election, the Interest Credit method shall be used. Interest Credit Method. A Participant's account shall be credited monthly with interest on all amounts in that account during the preceding month. Interest will be computed during each calendar year at the mean between the high and the low during the first eleven months of the preceding year of yields on Aa-rated industrial Bonds as reported by Moody's Investors Service, Inc., rounded to the nearest 1/4th of one percent. The Company will notify Participants annually of the established interest rate. Stock Unit Method. At the time an award is made, the Participant's Stock Unit account shall be credited with the number of shares of the Company's common stock that could be purchased with the award, based on the Fair Market Value of such stock on the day of the award (or on the next business day on which the New York Stock Exchange (the "Exchange") is open, if the Exchange is closed on the day of the award) excluding commissions, taxes, and other charges; and such number (carried to two decimal places) shall be recorded as stock units in the Participant's account, for bookkeeping purposes only. For purposes of the Plan, "Fair Market Value" equals the mean of the high and low per share trading prices for the common stock of the Company as reported in The Wall Street Journal for the "New York Stock Exchange - Composite Transactions" for a single trading day. The number of stock units in an account shall be appropriately adjusted to reflect stock splits, stock dividends, and other like adjustments in the Company's common stock. Each Participant's Stock Unit account periodically shall be credited with the number of shares of the Company's common stock that could be purchased, as set forth in the preceding paragraph, by an amount equal to the cash dividends that would be payable on the number of shares of the Company's common stock that equals the number of stock units in a Participant's Stock Unit account. The Company will notify Participants annually of the number of stock units, and the dividend equivalents, credited to their Stock Unit account. The Committee may authorize an irrevocable one-time election by Participants, to elect the Stock Unit method for Plan balances as of December 31, 1993. 20 21 5. Payment. The timing and manner of distribution of amounts held under the Plan shall be determined by the Committee in its sole discretion, but distributions shall commence no later than the January 15, or such later date as may be otherwise determined by the Committee, immediately following the year in which the Participant reaches age 70-1/2. For Participants subject to Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder ("Section 16"), distributions shall commence no earlier than as set forth in this section. A Participant may submit an election to the Committee, stating the number of years over which the Participant requests that payment be made (which shall be between 1 and 15 years), the initial year of payment, and the payment option (in the case of payments to be made over 2 or more years). The election shall be submitted to the Committee by not later than December 1 of the year following the year of termination of the Participant's employment by the Company. Distribution shall be made in accordance with the election unless the Committee determines that the distribution should be made at some different time or in some different manner. The payment options (in the case of payments to be made over 2 or more years) shall be as follows: Approximate Equal Option. The amount payable to the Participant each year shall be computed by the Company so that the aggregate amount of cash or stock in a Participant's account under the Plan shall be distributed in approximately equal installments in each year for which deferred compensation payments are to be made; or Fractional Option. The amount payable to the Participant each year shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the distribution period, by the balance in the account on January 1 of such year. Under either option, the Participant's account shall be debited at the time of payment. An approved payment period and payment option shall be applicable to the Participant's total aggregate deferred compensation accounts under the Plan, including any accounts previously maintained that have been combined into an amount under this Plan. Participants who have filed elections prior to January l, 1993, may by December 1, 1993, revise such elections (subject to Committee approval) to reflect the payment periods and payment options permitted by the foregoing provisions, or may cancel such elections and defer making an election until such time as is permitted by the foregoing provisions. Distributions from a Participant's Stock Unit account shall be paid in cash. Following a Participant's termination of employment (or for Participants subject to Section 16, following the period the Participant is so subject and for six months thereafter), distributions may be made in stock at the written election of the Participant. The cash distribution shall equal the cash value, on the date as of which the distribution is calculated (which shall be the first business day in January unless some other date is prescribed by the Committee), of the 21 22 number of whole shares of Company common stock then distributable to such Participant, based on the Fair Market Value of such stock on that date, or the next day on which the Exchange is open, if the Exchange is closed on the date the distribution is calculated. Any distribution in stock shall be in whole shares of the Company's common stock equal in number to the whole number of stock units credited to the Participant's account under the Stock Unit method. No fractional shares shall be distributed and any account balance remaining after a stock distribution shall be paid in cash. Except as provided below with respect to the Stock Unit accounts of Participants subject to Section 16, a Participant may request that amounts credited to his account under the Plan be distributed prior to the termination of his employment with the Company, or that an approved method of payment of his Plan account be changed. Any such request shall set forth the reason therefor, and is subject to approval by the Committee in its sole and absolute discretion. Any request for a distribution prior to termination of employment must be submitted to the Committee by no later than December l of the year prior to the year in which the distribution is requested to be made. No request for distribution prior to termination of employment will be approved if the Participant also has elected to defer any portion of an award under the Company's Incentive Compensation Plan to be made in the calendar year in which the requested distribution is to be made. A Participant may request that any or all amounts accumulated under this Plan be distributed except for any amounts, and any interest or dividends credited thereon, which were deferred in the calendar year in which the request for distribution is submitted. To the extent required for exemption under Section 16, distributions prior to termination of employment shall not be permitted under this Plan from amounts deferred to a Stock Unit account by a Participant who is subject to Section 16, except in the case of the Participant's disability. Disability, for these purposes, shall mean a condition entitling the Participant to Disability Retirement under the Company's Retirement Plan. For Participants subject to Section 16, no change to the timing of or payment option for payments from a Stock Unit account shall be considered or allowed during the period the Participant is subject to Section 16 and for any required Section 16 reporting period thereafter. The Committee may establish guidelines for its own use and the use of its delegates in considering any such request or any other request or election under the Plan, but such guidelines shall not in any way limit the Committee's discretion in acting upon a request or election, or in determining the timing and manner of any distributions to be made under the Plan. Distributions under the Plan shall be subject to withholding for taxes and other charges, as required by law, and the Company shall deduct from any such distribution any amounts owed by the Participant to the Company. For those distributions in stock, required withholding will be taken from the common stock which would have been received. 22 23 6. Beneficiaries. A Participant may designate one or more beneficiaries to receive distributions from the Plan, upon the death of the Participant. If no beneficiary has been designated, all such amounts shall be paid to the personal representative of the Participant. Except as provided in the following paragraph, the death of a Participant shall not affect the timing or manner of distributions from the Participant's account. A Participant may elect that one or more fixed payments be made from his account under the Plan, to his personal representative or designated beneficiary, following his death. Such payments, if approved by the Committee, shall be made within 15 months after the Participant's death. Any amounts thereafter remaining in the account will be distributed at the time and in the manner approved by the Committee. 7. Termination or Amendment of the Plan. This Plan may be terminated, modified, or amended from time to time by resolution of the Board of Directors. If the Plan is terminated, all amounts accumulated prior to termination will continue to remain subject to the provisions of the Plan as if the Plan had not been terminated. 8. Participant's Rights. Amounts deferred and accumulated under the Plan remain the property of the Company, and no Participant or other person shall acquire any property interest in the account or any other assets of the Company on account of participation in the Plan, the Participant's rights being limited to receiving from the Company the payments provided for in the Plan. The Plan is unfunded and to the extent that any Participant acquires a right to receive payments from the Plan, such rights shall be no greater than the right of an unsecured creditor of the Company. Except to the extent provided in the final paragraph of Section 5 of the Plan, the right of a Participant, his legal representative or beneficiary to receive payments from the Plan shall not be subject to anticipation, sale, assignment, pledge, encumbrance or charge, nor shall such right be liable for or subject to the debts, contracts, liabilities or torts of the Participant, his legal representative or beneficiaries. 9. Powers of Compensation Committee. The Compensation Committee of the Board of Directors (the "Committee") shall have full power and authority to construe and interpret this Plan. The Committee may from time to time delegate such of its functions hereunder as it may determine, to one or more of the officers of the Company, on such terms and conditions as the Committee may decide. Decisions of the Committee or its delegates shall be final and binding upon the Participants, their legal representatives and beneficiaries. Approval by the Committee or its delegates of any election or request made by a Participant pursuant to the Plan shall be subject to the sole discretion of the Committee or such delegates. 23 24 Exhibit (10) (iii) SUPPLEMENTAL RETIREMENT PLAN FOR EXECUTIVES OF THE BOEING COMPANY Section 1. Purpose of the Plan. The Supplemental Retirement Plan for Executives of The Boeing Company was established effective July 1, 1980. Its sole purpose is to provide a retirement benefit for a select group of management or highly compensated employees of The Boeing Company (the Company) supplemental to the benefits provided by the Company's Employee Retirement Plan. The prior Plan is amended effective February 26, 1996, to read as set forth in this Plan document. Section 2. Definitions. The Plan means the Supplemental Retirement Plan for Executives of The Boeing Company as herein set forth, together with any amendments to it that may at any time be adopted. The Retirement Plan means The Boeing Company Employee Retirement Plan, together with any amendments to it that may at any time be adopted. The Incentive Compensation Plan means the Incentive Compensation Plan for Officers and Employees of The Boeing Company and Subsidiaries, together with any amendments to it that may at any time be adopted. The Long-Term Incentive Program means the program provided for by Section 5A of the Incentive Compensation Plan, together with any modifications that may at any time be adopted. The Supplemental Benefit Plan means the Supplemental Benefit Plan for Employees of The Boeing Company, together with any amendments to it that may at any time be adopted. Defined terms in the Retirement Plan will have the same meaning when used in this Plan. The Code means the Internal Revenue Code of 1986, as amended. The Supplemental Benefit means the benefit provided by this Plan. Effective January 1, 1991, Final Average Monthly Total Earnings means the sum of (a) Final Average Monthly Earnings as defined in the Retirement Plan without regard to the compensation limitation under Code Section 401(a)(17), and (b) the sum of the five highest awards made to the employee under the Incentive Compensation Plan during the last ten calendar years preceding his retirement date divided by sixty. If fewer than five awards are made, then the sum of all awards made during the last ten calendar years preceding retirement will be used in computing (b) above. 24 25 For purposes of the computations under clause (b) above, an employee's Incentive Compensation Plan award includes: (i) deferred awards, as well as those paid currently, (ii) the amount by which the Compensation Committee of the Board of Directors reduces the employee's Incentive Compensation Plan award under Section 5 thereof because of the employee's participation in the Long-Term Incentive program under Section 5A thereof; and (iii) Boeing Stock Unit awards made under Section 5B thereof at their Fair Market Value as of the date of the award, determined as provided in such Section 5B; provided, that Boeing Stock Unit awards that have been forfeited pursuant to clause (5) of Section 5B shall be excluded from the computations under clause (b) above. (iv) Incentive Stock Unit awards made pursuant to the Incentive Stock Plan for Employees at their Fair Market Value as of the date of the award, determined as provided in the grant of the Incentive Stock Unit award; provided that, Incentive Stock Unit awards that have been forfeited pursuant to the terms of such award shall be excluded from the computation under clause (b) above. Section 3. Eligibility. Eligibility for the accrual of a Supplemental Benefit under this Plan is limited to employees of the Company, and employees of an affiliate or subsidiary of the Company which, pursuant to the provisions prescribed therein, has adopted The Boeing Company Employee Retirement Plan, the Voluntary Investment Plan and the Employee Financial Security Plan, either on the active payroll or on approved leave of absence, on or at any time after July 1, l980, who were also members of the Incentive Compensation Plan (Executive Payroll, formerly known as 90-Series Grades) as of July 1, 1980, or who became members of the Incentive Compensation Plan at a later date. Eligibility for the payment of a Supplemental Benefit is limited to employees who have participated in this Plan and who immediately prior to their retirement or death while in the employ of the Company, as the case may be, were participants in the Retirement Plan and also on the management payroll; and who, in the case of death while in the employ of the Company, left a spouse who became entitled to a survivor benefit under the Retirement Plan. Section 4. Supplemental Benefit. The Supplemental Benefit payable to a retiring employee of the Company is a monthly amount computed as (a) + (b) - (c) below. (a) Core Benefit: A monthly amount equal to 1% of Final Average Monthly Total Earnings multiplied by Credited Service and the appropriate Early Retirement Reduction Factor. The Early Retirement Reduction Factor is based on the employee's age in completed months on the date of retirement. The appropriate factors are as follows: 25 26 Early Retirement Age at Retirement Reduction Factor ----------------- ---------------- 55 90% 56 92% 57 94% 58 96% 59 98% 60 or older 100% (b) Excess Benefit. A monthly amount based on .5% of Final Average Monthly Total Earnings in excess of Covered Compensation divided by twelve. This amount is multiplied by Credited Service and then by the appropriate Early Retirement Reduction Factor. The Early Retirement Reduction Factor is based on the employee's age in completed months on the date of retirement. The appropriate factors as follows: Early Retirement Age at Retirement Reduction Factor ----------------- ---------------- 55 75% 56 80% 57 85% 58 90% 59 95% 60 or older 100% (c) Retirement Plan and Supplemental Benefit Plan Benefit: The amount payable from The Boeing Company Employee Retirement Plan and the amount payable under Section 3 Paragraph (a) of the Supplemental Benefit Plan. If applicable, this amount will reflect reductions for early retirement. However, this amount will not reflect reductions for joint and survivor options or other optional forms of payment. In no event will the Supplemental Benefit be less than zero. 26 27 Section 5. Payment of Benefit. Subject to Section 6 and the provisions of this Section 5, the Supplemental Benefit shall be paid to the retiring employee (and, if applicable, to his or her surviving spouse) at the same time and for the same period and generally in accordance with the same provisions as are applicable to the payment of retirement benefits under the Retirement Plan. Without limiting the generality of the foregoing, if an employee should die while still in the employ of the Company leaving a spouse entitled to a survivor benefit under the Retirement Plan, the spouse will be entitled to receive for life on account of the Supplemental Benefit an amount determined in the same way as his or her survivor benefit was determined under the Retirement Plan. The retiring employee may elect to receive payment of the Supplemental Benefit under either the straight life method or the 50%, 75% or 100% joint and survivor method, and such election shall be subject to the same actuarial or other adjustments that are used in determining benefits under the Retirement Plan. If the employee's benefits under the Retirement Plan are increased on account of subsequent amendments to that Plan, for example, amendments providing increased benefits for retirees, a corresponding increase will be made in the Supplemental Benefit. Section 6. Forfeiture. A retired employee (and a surviving spouse, if applicable) shall forfeit all right to receive further payments of the Supplemental Benefit and shall have no further interest in this Plan if at any time after retirement the retired employee shall engage in an activity, whether individually or as an employee, consultant or otherwise, which the Retirement Committee, in its sole and absolute discretion, shall determine to be in competition with any significant aspect of the Company's business. Section 7. Nonassignability. The Supplemental Benefit shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, charge, execution, attachment, garnishment or any other legal process. Any attempt to take any such action shall be void and shall authorize the Retirement Committee, in its sole and absolute judgment, to forfeit all further right and interest in the Supplemental Benefit. Section 8. Funding. The Plan shall be unfunded, and the Supplemental Benefit shall be paid only from the general assets of the Company. Section 9. Administration. The Plan shall be administered by the Retirement Committee as appointed by the Board of Directors of The Boeing Company. The Committee shall make such rules, interpretation, determinations of fact and computations as it may deem appropriate. Any decision of the Committee with respect to the Plan, including (without limitation) any calculation of a Supplemental Benefit, shall be conclusive and binding on all persons. 27 28 Section 10. Amendment and Termination. The Boeing Company shall have the authority to amend or terminate the Plan at any time. Such amendment or termination shall not adversely affect or impair the benefit entitlements in course of payment to retired employees and surviving spouses, the contingent rights to the continuance of benefit payments of the spouses of retired employees named as Joint Annuitants, or the accrued Supplemental Benefits as defined in this Section of all eligible employees then in the employ of the Company. For the purpose of this section, an accrued Supplemental Benefit will be determined for each eligible employee in accordance with the provisions of Section 4 but based on Credited Service, Final Average Monthly Total Earnings, Covered Compensation and the accrued benefit provided by the Retirement Plan all determined as of the effective date of the amendment or termination. Payment of benefits based on such an accrued Supplemental Benefit will be made in accordance with the terms of this Plan to the employee if he retires under the Retirement Plan, or to his surviving spouse if he dies while in the employ of the Company and leaves a spouse eligible for a Pre-Retirement Joint and Survivor Spouse Benefit under the Retirement Plan. Section 11. Employment Rights. Nothing in the Plan shall be deemed to give any person any right to remain in the employ of the Company or affect any right of the Company to terminate a person's employment with or without cause. 28 EX-27 2 ART. 5 FDS FOR 1ST QUARTER 1996 FORM 10-Q
5 1,000,000 3-MOS DEC-31-1996 MAR-31-1996 4,387 145 1,557 110 7,223 14,005 13,855 7,465 22,674 7,732 2,361 0 0 1,746 8,374 22,674 4,293 4,293 0 4,139 0 0 41 170 51 119 0 0 0 119 .35 .35
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