Boeing ethical business conduct guidelines

Ethical Business Content Guidelines.

EEtthhiiccaall BBuussiinneessss CCoonndduucctt GGuuiiddeelliinneess

W. James McNerney, Jr. Chairman of the Board President & Chief Executive Offi cer

The Boeing Company 100 N Riverside MC 5003-6010 Chicago, IL 60606-1596

To the people of Boeing:

Here is your copy of the Boeing Ethical Business Conduct Guidelines booklet. It includes the Boeing Code of Conduct, our values, a summary of some of our key policies and procedures, examples of ethical questions you might face, information about business compliance issues, and a listing of resources you can turn to when you need ethical advice or help.

Boeing’s business plans cannot happen without integrity. We ask you to execute your piece of the business plans with attention to every detail – especially the ethical implications of your own and your work group’s actions. If you think something is unethical, please report it. We commit to you that Boeing will celebrate the courage of people who point out existing or potential ethical problems, and that we will not tolerate retaliation against people who raise legitimate ethical concerns.

Please read and keep this booklet so you can refer to it later, or bookmark it on the Boeing intranet at http://ethics.whq.boeing.com/guidelines. Some situations are not clear-cut. If this booklet doesn’t answer your questions, please discuss your concerns with your manager or your Ethics Advisor. For more help, you can also call the Ethics Line at 1-888-970-7171.

The company’s reputation is earned one person at a time, and each of us contributes to that reputation. Thank you for always protecting Boeing’s integrity.

W. James McNerney, Jr.

Ethical Business Conduct Guidelines

Our values

LLeeaaddeerrsshhiipp

We will be a world-class leader in every aspect of our business – in the development of our team leadership skills at every level; in our management performance; in the way we design, build, and support our products; and in our financial results.

IInntteeggrriittyy

We will always take the high road by practicing the highest ethical standards, and by honoring our commitments. We will take personal responsibility for our actions and we will treat everyone fairly and with trust and respect.

QQuuaalliittyy

We will strive for continuous quality improvement in all that we do, so that we will rank among the world’s premier industrial firms in customer, employee, and community satisfaction.

CCuussttoommeerr ssaattiissffaaccttiioonn

Satisfied customers are essential to our success. We will achieve total customer satisfaction by understanding what the customer requires and delivering it flawlessly.

PPeeooppllee wwoorrkkiinngg ttooggeetthheerr

We recognize our strength and our competitive advantage is and always will be – people. We will continually learn, and share, ideas and knowledge. We will encourage cooperative efforts at every level and across all activities in our company.

AA ddiivveerrssee aanndd iinnvvoollvveedd tteeaamm

We value the skills, strengths, and perspectives of our diverse team. We will foster a participatory workplace that enables people to be involved in making decisions about their work.

GGoooodd ccoorrppoorraattee cciittiizzeennsshhiipp

We will provide a safe workplace and protect the environment. We will promote the health and well-being of Boeing people and their families. We will work with our communities by volunteering our time and talent and by financially supporting education and other worthy causes.

EEnnhhaanncciinngg sshhaarreehhoollddeerr vvaalluuee

Our business must produce a profit, and we must generate superior returns on the assets entrusted to us by our shareholders. We will ensure our success by satisfying our customers and increasing shareholder value.

In all our relationships we will demonstrate our steadfast commitment to

Boeing Code of Conduct

The Boeing Code of Conduct outlines expected behaviors for all Boeing employees. Boeing will conduct its business fairly, impartially, in an ethical and proper manner, in full compliance with all applicable laws and regulations, and consistent with the Boeing values. In conducting its business, integrity must underlie all company relationships, including those with customers, suppliers, and communities and among employees. The highest standards of ethical business conduct are required of Boeing employees in the performance of their company responsibilities. Employees will not engage in conduct or activity that may raise questions as to the company's honesty, impartiality, reputation or otherwise cause embarrassment to the company.

As an employee of The Boeing Company, I will ensure that:

• I will not engage in any activity that might create a conflict of interest for me or the company.

• I will not take advantage of my Boeing position to seek personal gain through the inappropriate use of Boeing or non-public information or abuse my position. This includes not engaging in insider trading.

• I will follow all restrictions on use and disclosure of information. This includes following all requirements for protecting Boeing information and ensuring that non-Boeing proprietary information is used and disclosed only as authorized by the owner of the information or as otherwise permitted by law.

• I will observe fair dealing in all of my transactions and interactions.

• I will protect all company, customer and supplier assets and use them only for appropriate company-approved activities.

• Without exception, I will comply with all applicable laws, rules and regulations.

• I will promptly report any illegal or unethical conduct to management or other appropriate authorities (i.e., Ethics, Law, Security, EEO). Every employee has the responsibility to ask questions, seek guidance, and report suspected violations of this Code of Conduct. Retaliation against employees who come forward to raise genuine concerns will not be tolerated.

BOEING is a trademark of Boeing Management Company. Copyright © 2012 Boeing. All rights reserved.

F70271 NEW (01 JAN 2012)

HHooww ttoo uussee tthhiiss bbooookklleett

WWhheerree ttoo ggoo ffoorr hheellpp

EEtthhiiccaall ddeecciissiioonnmmaakkiinngg

EEtthhiiccaall BBuussiinneessss CCoonndduucctt:: CCoommppaannyy PPoolliiccyy PPOOLL--22

EEtthhiiccss aanndd BBuussiinneessss CCoonndduucctt pprrooggrraamm:: CCoommppaannyy PPrroocceedduurree PPRROO--33

An overview of the Boeing Ethics and Business Conduct program and employees’ responsibilities

PPrrooppeerr MMaarrkkeettiinngg PPrraaccttiicceess:: CCoommppaannyy PPrroocceedduurree PPRROO--44

Marketing efforts focus on the quality, service, and competitive features of Boeing products and services.

PPrrooppeerr MMaarrkkeettiinngg PPrraaccttiicceess —— MMaarrkkeettiinngg ttoo tthhee UU..SS.. GGoovveerrnnmmeenntt:: CCoommppaannyy PPrroocceedduurree PPRROO--55

Special issues related to marketing to the U.S. Government

OOffffeerriinngg ooff BBuussiinneessss CCoouurrtteessiieess:: CCoommppaannyy PPrroocceedduurree PPRROO--66

Guidelines on offering business courtesies to commercial customers and to government employees

CCoonnff lliicctt ooff IInntteerreesstt:: CCoommppaannyy PPrroocceedduurree PPRROO--77

Requirements for disclosing potential conflicts and information on the conflict of interest review process

AAcccceeppttaannccee ooff BBuussiinneessss CCoouurrtteessiieess:: CCoommppaannyy PPrroocceedduurree PPRROO--88

When to accept or decline business courtesies

11

22

33

55

88

1100

1122

1144

1166

1188

Table of contents

Proper Relationships With Suppliers: Company Procedure PRO-9

Rules and procedures relating to business conduct with suppliers

Proper Use of Company, Customer, and Supplier Resources: Company Procedure PRO-10

Use of company office equipment for personal purposes and proper use of possible benefits associated with company travel

Recruiting and Hiring Current and Former Government Employees - Conflict of Interest; PRO-4825

Recruiting and assigning work to former U.S. Government employees

Buying and Selling Securities — Insider Trading: Company Procedure PRO-12

Guidance to ensure compliance with laws and regulations on insider trading and other securities transactions

Additional business compliance issues

Procurement integrity

Proprietary information agreements

Export and import compliance

Antitrust compliance

Anti-Bribery -- Foreign Corrupt Practices Act

Truth in Negotiations Act

U.S. Government audits and investigations

Charging of work tasks

Political contributions

Equal employment opportunity

Corporate citizenship and community relations

Environment

20

21

23

24

26

26

27

28

30

32

32

33

33

34

35

36

36

Table of contents, continued

ii

PPrrooppeerr RReellaattiioonnsshhiippss WWiitthh SSuupppplliieerrss:: CCoommppaannyy PPrroocceedduurree PPRROO--99

Rules and procedures relating to business conduct with suppliers

PPrrooppeerr UUssee ooff CCoommppaannyy,, CCuussttoommeerr,, aanndd SSuupppplliieerr RReessoouurrcceess:: CCoommppaannyy PPrroocceedduurree PPRROO--1100

Use of company office equipment for personal purposes and proper use of possible benefits associated with company travel

FFoorrmmeerr UU..SS.. GGoovveerrnnmmeenntt EEmmppllooyyeeeess —— CCoonnff lliicctt ooff IInntteerreesstt:: CCoommppaannyy PPrroocceedduurree PPRROO--1111

Recruiting and assigning work to former U.S. Government employees

BBuuyyiinngg aanndd SSeelllliinngg SSeeccuurriittiieess —— IInnssiiddeerr TTrraaddiinngg:: CCoommppaannyy PPrroocceedduurree PPRROO--1122

Guidance to ensure compliance with laws and regulations on insider trading and other securities transactions

AAddddiittiioonnaall bbuussiinneessss ccoommpplliiaannccee iissssuueess

Anti-Bribery -- Foreign Corrupt Practices Act

Procurement integrity

Proprietary information agreements

Export and import compliance

Antitrust compliance

Truth in Negotiations Act

U.S. Government audits and investigations

Charging of work tasks

Political contributions

Equal employment opportunity

Corporate citizenship and community relations

Environment

2200

2211

2233

2244

2266

2266

2277

2288

2299

3322

3333

3333

3344

3355

3366

3377

3377

Table of contents, continued

This booklet is designed to help you recognize and deal with ethical issues in your work. Consider this booklet as a guide to help you whenever you have a question about ethics or if you are faced with an ethical dilemma.

To begin, you might turn to page 3, Ethical decisionmaking. Here you will find several tools to help you determine whether the problem you are trying to solve or the decision you are trying to make has ethical issues that should be considered and, if so, how you might best address and resolve them. The tools will serve as a useful aid to help you answer questions by encouraging you to consider various dimensions and perspectives.

You can always use the table of contents as a quick reference to locate and identify the issue about which you have a concern. Issues are organized by topics. To help you develop a more complete understanding of the topic, you’ll find a summary of the specific Boeing procedure. Following the summary are questions and answers that may very well address your specific concern. Here are a few examples of how the table of contents can help:

• You are a former employee of a current competitor to Boeing. Can you brief your team on your former employer’s proposal strategies? Refer to “Proper Marketing Practices,” PRO-4.

• A supplier representative knows that you are a big baseball fan. He offers you two great tickets to a baseball game. You know that Boeing policy would not allow you to accept the tickets as a gift, but what if you buy them from him? Refer to “Acceptance of Business Courtesies,” PRO-8.

• You often spend your lunch break at your desk. Can you use your PC to write a personal letter or to surf the Internet during your personal time? Refer to “Proper Use of Company, Customer, and Supplier Resources,” PRO-10.

If you need more information about any of the procedures summarized here, you may access them through the Ethics and Business Conduct home page, http://ethics.whq.boeing.com/, or call the Boeing Ethics Line at 1-888-970-7171.

How to use this booklet

11

If you have questions after reading the appropriate section in this booklet, there are several other sources you may contact for help. The company expects all employees and others who support the work of The Boeing Company to ask questions, seek guidance, express concerns, and report any suspected violations of the established standards of business conduct. The company will not tolerate retaliation against employees who use the resources of the Ethics and Business Conduct program for reporting ethical concerns.

MMaannaaggeemmeenntt

Feel free to approach your supervisor or manager with whatever ethical concern or question you might have. Your management might refer you to another resource, but under most circumstances they should be your first point of contact.

EEtthhiiccss AAddvviissoorrss

Ethics Advisors are Boeing employees who serve as independent counselors. They have access to top management and are well versed in Boeing values and the Boeing Ethical Business Conduct policy and related procedures. They are responsible for advising Boeing employees on matters of ethical concern and for helping them to resolve ethical dilemmas. Names and telephone numbers of Ethics Advisors are listed on the Boeing Web at http://ethics.whq.boeing.com/needa.html.

TThhee BBooeeiinngg EEtthhiiccss LLiinnee

The Boeing Ethics Line is also available to help you with your ethics questions and to enable you to report concerns you might have about possible misconduct.

Phone: 1-888-970-7171 Mail code: 14-14 TDD/TTY: 1-800-617-3384 E-mail: ethicsline.ethics@boeing.com

TThhee EEtthhiiccss aanndd BBuussiinneessss CCoonndduucctt hhoommee ppaaggee

You can access this page at http://ethics.whq.boeing.com/. You’ll find useful information about the Boeing Ethics and Business Conduct program. Included are the summaries and full texts of the Boeing Ethics procedures, a listing of the Ethics Advisors, and a Conflict of Interest Determination form.

Where to go for help

22

It is not always easy to determine the ethical or “right” thing to do in a particular business or work situation. Sometimes, because of the highly complex rules and regulations that govern the way we do business, a decision is not clear-cut.

A decision or situation could be difficult when the ethical issue includes

AA cclloossee ccaallll:: These situations involve the careful balancing of different yet valid interests. Sometimes the correct decision is just not clear.

AA nneeww pprroobblleemm:: These situations usually involve facts that have not been specifically addressed by the policies or procedures of the company.

MMuullttiippllee ccoonnssiiddeerraattiioonnss:: The decision in these situations requires the input of so many different people that the decision process becomes very inefficient.

PPeerrssoonnaall ccoosstt:: The right and fair thing to do is clear, but the decisionmaker bears so much cost in lost time or personal sacrifice that the decision is difficult.

By reviewing the following outline, each of us can, at the very least, ensure that we have applied a process that is designed to call to mind sound principles of ethical decisionmaking. Unless we apply such a process honestly and consistently, we run the risk of failing to provide our customers — whether internal or external — with the quality of products and services they deserve.

AAnnaallyyssiiss

What are the facts?

Who is responsible to act?

What or whose interests are involved?

What are the consequences of the action?

What is fair treatment in this situation?

SSoolluuttiioonn ddeevveellooppmmeenntt

What solutions are available to me?

Have I considered all of the creative solutions that might permit me to reduce the amount of harm, to maximize the benefits, to acknowledge more interests, or to be fair to more individuals?

Ethical decisionmaking

33

SSeelleeccttiioonn ooff ooppttiimmuumm ssoolluuttiioonn

What are the potential consequences of my solutions?

Which of the options I have considered does the most to maximize benefits, to reduce harm, to respect rights, and to increase fairness?

Are all parties treated fairly in my proposed decision?

IImmpplleemmeennttaattiioonn

Who should be consulted and informed of the decision?

What actions will ensure that my decision achieves its intended outcome?

How do I put the decision into action?

FFoollllooww--uupp

Was the decision correctly implemented?

Did the decision, in fact, maximize benefits, reduce harm, acknowledge interests, and treat all fairly?

FFuurrtthheerr qquueessttiioonnss ttoo aasskk yyoouurrsseellff

Are my choices lawful and in compliance with Boeing policies?

Am I being fair and honest?

Would I be uncomfortable describing my decision at an all-hands meeting?

How will I feel about myself afterwards?

How would it look if it made the headlines?

Will I be able to sleep soundly?

What would I tell my child to do?

You can always contact your management, Ethics Advisor, or the Boeing Ethics Line for assistance.

Ethical decisionmaking, continued

44

Boeing will conduct its business fairly, impartially, in an ethical and proper manner, in accordance with the company’s values and Code of Conduct, and in full compliance with all laws and regulations. In the course of conducting company business, integrity must underlie all company relationships, including those with customers, suppliers, and communities and among employees. The highest standards of ethical business conduct and compliance are required of Boeing employees in performance of their company responsibilities. Employees must not engage in conduct or activity that may raise questions as to the company’s honesty, impartiality, or reputation or otherwise cause embarrassment to the company. Conduct that is prohibited under Boeing policy or does not comply with laws and regulations may not be accomplished on an employee’s behalf by anyone outside the company.

All employees must sign and abide by the Boeing Code of Conduct, which requires that they understand the code, and ask questions, seek guidance, report suspected violations, and express concerns regarding compliance with this policy and the related procedures.

To support the requirement for complete and accurate financial records and reporting, all employees of the Finance organization have an additional Code of Conduct for Finance.

In addition, the Board of Directors of The Boeing Company has adopted a Code of Ethical Business Conduct that complies with the standards set forth in the New York Stock Exchange’s corporate governance rules.

The Ethics and Business Conduct Committee, consisting of members of the Executive Council and the Vice President of Ethics and Business Conduct, is responsible for ensuring that appropriate policies and procedures exist to help employees comply with Boeing expectations of ethical business conduct.

The Boeing Company will administer ethics and compliance programs to promote its commitment to integrity and values as set forth in the Boeing values and Code of Conduct and to ensure compliance with laws, rules, and regulations. These programs will inform employees of company policies and procedures regarding ethical business conduct and help them to resolve questions and to report suspected violations. Managers are responsible for supporting implementation of ethics and business conduct programs, and monitoring compliance to the company’s values and ethical business conduct guidelines through such programs. Managers are responsible for creating an open and honest environment in which employees feel comfortable in bringing issues forward. Retaliation against employees who raise genuine concerns will not be tolerated.

Ethical Business Conduct Company Policy POL-2 POL-2 applies to all employees of The Boeing Company, including subsidiaries, contingent labor, consultants, and others acting for the company (“employees”).

55

66

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

Boeing has issued separate codes of conduct for the Board of Directors and for finance employees. Does this mean that these executives are not subject to the general Boeing Code of Conduct?

No. The Boeing Code of Conduct outlines expected behavior for every Boeing employee when performing company responsibilities. Members of the Board of Directors and all Boeing employees, including the Executive Council, all other executives, all other managers, and all other employees are expected to adhere to the Code of Conduct. Members of the Board and executives with defined financial responsibilities may be required to adhere to additional codes addressing more specific obligations related to their scope of responsibility. Any waiver of the Code of Conduct for members of the Board of Directors or executive officers may be made only by the Board or a committee of the Board and must be promptly disclosed to stockholders.

What are the obligations when it comes to filing financial reports or making other public communications?

Boeing must ensure complete and accurate financial records and reporting. Any employee preparing financial reports or otherwise making financial disclosures on behalf of Boeing must adhere to the following requirements. These requirements are in addition to the standards set out in the Boeing Code of Conduct.

•Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.

• Provide constituents with information that is accurate, complete, objective, relevant, timely, and understandable.

• Comply with rules and regulations of federal, state, provincial, and local governments, and other appropriate private and public regulatory agencies.

• Act in good faith, responsibly, with due care, competence, and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated.

• Respect the confidentiality of information acquired in the course of one’s work except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of one’s work will not be used for personal advantage.

• Share knowledge and maintain skills important and relevant to constituents’ needs. • Proactively promote ethical behavior as a responsible partner among peers, in the work environment,

and the community. • Achieve responsible use of and control over all assets and resources employed or entrusted.

Ethics and Business Conduct Company Policy POL-2

77

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

In addition, the Enterprise-wide Master Records Retention Schedule identifies record types (both financial and otherwise) and their established retention periods. Records are materials that the company must retain for specified periods to satisfy legal, operational, fiscal, contractual, and/or historical requirements. A retention period is the total length of time that records must be kept before review for disposition. Retention policies apply to the record types, regardless of the media on which the record is found (paper, electronic tapes or disks, optical disks, microfilm, etc.).

What does Boeing mean when it says that it will “conduct its business fairly, impartially, and in an ethical and proper manner?”

You should endeavor to deal fairly with the company’s customers, suppliers, competitors, and fellow employees. No one should take unfair advantage of anyone through manipulation, concealment, coercion, threats, abuse of proprietary information, misrepresentation of material facts, or any other unfair dealing practice.

Ethics and Business Conduct Company Policy POL-2

88

SSuummmmaarryy

Responsibility for the company’s commitment to integrity rests with each employee. All employees are expected to adhere to the highest standards of ethical business conduct and to know and comply with Boeing policies and procedures while performing company responsibilities. Employees must be sensitive to situations that could lead to illegal or unethical actions, or the appearance of impropriety, and avoid such situations. All employees should feel comfortable taking appropriate action against illegal, improper, or unethical behavior of others. If an employee is unsure of a specific action, it is his or her responsibility to ask questions and seek guidance. In addition, employees should report all unethical behavior to their managers or Ethics Advisors.

Retaliation against employees who raise genuine concerns will not be tolerated. Retaliation against any employee is cause for appropriate corrective action, up to and including dismissal.

Managers must be familiar with the enterprisewide standards of conduct required of all employees and the resources and processes available to assist in the resolution of questions and concerns about business ethics. Managers are expected to advocate the Boeing values and Code of Conduct requirements, periodically discuss ethics and business conduct issues, review standards of conduct with employees, and ensure that employees are aware of these standards and the legal requirements relevant to their work. Managers should maintain a work environment that encourages open and honest communication regarding ethics and business conduct issues and concerns. Managers are also responsible for taking appropriate and timely corrective action for conduct in violation of the standards.

Employee concerns should be directed to management or an Ethics Advisor. The ethics program helps employees to obtain guidance, resolve questions, express concerns, and report suspected violations of the standards of conduct and law.

QQuueessttiioonnss ttoo aasskk yyoouurrsseellff

Have I contacted my management or Ethics Advisor regarding concerns about ethical issues?

Have I completed each of the ethics training programs that are required as part of my employment or affiliation with Boeing?

As a manager, do I provide an environment where employees feel they can discuss issues openly and without fear of retaliation?

Ethics and Business Conduct program Company Procedure PRO-3

99

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

Is integrity a condition of employment?

Yes. All employees are responsible for their actions. Employees are not to engage in conduct or activity that may raise questions as to Boeing’s honesty, impartiality, or reputation or that may cause embarrassment to the company.

Why do I need to sign a statement that I will adhere to the company’s values and Code of Conduct?

All employees, including contract labor employees, sign a document stating they will adhere to the Boeing Code of Conduct and uphold the values set forth for the company. This action allows each of us to acknowledge our ethical expectations and reminds us of our responsibility to uphold integrity in our actions, relationships, and business while at Boeing.

Something doesn’t feel right to me, but I don’t feel comfortable approaching my manager. Can an Ethics Advisor really help?

Yes. An Ethics Advisor can listen to your concerns and suggest approaches to resolving the issues. You can also call the Boeing Ethics Line. Trust your sense of integrity; if something doesn’t feel right, you should seek guidance.

Will I get into trouble with my manager if I call an Ethics Advisor about an ethics issue?

No. Boeing employees have a responsibility to express concerns about ethical issues and to report any suspected violations. The company will not tolerate retaliation against employees who properly use company reporting mechanisms.

What is meant by an open and honest culture?

An open and honest culture is one in which all employees feel free to share opinions and perceptions in a professional manner in order to resolve issues. It is one in which management listens to these concerns and does not retaliate against those who raise them. This does not give permission to disclose confidential Boeing, supplier, customer, or competition-sensitive information.

The Guidelines state that “retaliation against employees who raise genuine concerns will not be tolerated.” How does the company protect employees who come forward with ethical issues?

Boeing Business Process Instruction (BPI)-3751, “Process to Identify and Monitor to Prevent Retaliation,” establishes guidelines on identifying and monitoring for retaliation employees who bring forth potentially significant violations. Boeing investigates all allegations of retaliation and takes appropriate corrective action whenever such investigations conclude that retaliation has occurred.

Ethics and Business Conduct program Company Procedure PRO-3

1100

SSuummmmaarryy

Proper marketing practices emphasize the benefits of Boeing products and services. Marketing efforts focus on providing customers with accurate information. Marketing activities that could embarrass the company, its customers, or government agencies are prohibited.

Employees who deal with customers or with government agencies must be familiar with laws, regulations, or customer-imposed rules applicable to the marketing of Boeing products and services. Employees who have provided assistance to a Boeing customer or competitor within the last 3 years are responsible for informing their immediate supervisors of this fact, ensuring that further dealings with such a customer are permissible, and abiding by all obligations of confidentiality owed to the former employer.

Boeing employees cannot induce employees of a customer or government agency to place personal interests above that of the firm or organization they represent. Boeing employees cannot ask others to do anything that they are not permitted to do themselves under Boeing policy.

QQuueessttiioonnss ttoo aasskk yyoouurrsseellff

Have I made any misleading statements about Boeing products or services?

Do I have impartial and objective information to support my claims about a competitive product?

When I work with someone from a different country, do I understand the rules applicable to marketing in that country?

Do my business practices meet both the Boeing standards and the local standards?

Was I employed within the past 3 years by a company that is bidding in competition with Boeing?

Have I disclosed this former employment relationship to my immediate supervisor?

Proper Marketing Practices Company Procedure PRO-4

1111

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

I just found what looks like some information that our competitors left behind. It is not obvious that this information is properly in our possession. Can I keep a copy of it?

No. Do not read the document or information any further and do not show it to anyone associated with the program. The document or information must be immediately sealed and provided directly to an Ethics Advisor or the Law Department to determine what steps should be taken.

A competitor has been making false and misleading statements about Boeing products and services. How should I respond?

The best response is to emphasize the positive aspects of Boeing products and services rather than the real or imagined deficiencies of a competitor’s product. You should also report this to the Law Department.

I used to work for XYZ Company, a current competitor to Boeing. Can I brief my team on XYZ’s proposal strategies?

No. You have a commitment to protect confidential information of your former employer, and that commitment does not cease when you leave that company. Boeing does not want information that it does not have a right to have. You need to disclose your prior relationship to your immediate manager and to abide by all obligations of confidentiality owed to your former employer.

A customer’s employee has asked me to help develop the request for proposal that his employer is planning to issue for competitive bids. May I help him do this?

You may provide facts concerning Boeing products and services and offer potential solutions to the customer’s business needs as long as they are identified as originating from Boeing. However, you may not prepare any part of a competitive request for proposal without first consulting the Law Department.

Proper Marketing Practices Company Procedure PRO-4

1122

SSuummmmaarryy

Public concern with the relationship between industry and the U.S. Government has resulted in complex laws and regulations that control the government procurement process. Boeing employees who deal with the U.S. Government must understand the rules the Government has established for itself and for its suppliers. These laws and regulations generally have three purposes: to obtain the best possible products and services at the best value; to promote full and open competition based on specifications and evaluation criteria that allow interested suppliers to respond; and to eliminate waste, fraud, and abuse.

Every employee, representative, or teammate of Boeing is expected to comply with the rules established by U.S. Government customers for procuring products and services. Boeing employees must deal with U.S. Government customer representatives in an atmosphere of openness and under circumstances that could not be interpreted to imply concealment, the appearance of an impropriety, or any conflict of interest. PRO-5 describes how documents provided to U.S. Government representatives should be identified, and discusses under what circumstances the exchange of information between the U.S. Government and Boeing and between Boeing and other companies is appropriate. In addition, this procedure contains a series of situational guidelines and requirements that describe how Boeing employees can interact with U.S. Government procurement representatives during the various stages of the procurement process. Boeing employees who deal with the Government should review this procedure carefully and, as needed, contact an Ethics Advisor or the Law Department for further guidance.

Proper Marketing Practices – Marketing to the U.S. Government Company Procedure PRO-5

QQuueessttiioonnss ttoo aasskk yyoouurrsseellff

Am I asking a U.S. Government representative to do something that I am not permitted by policy, regulation, law, or procedure to do myself?

Could an impartial observer characterize my interaction with my U.S. Government customers as being secretive, creating an appearance of impropriety, or creating an unfair competitive advantage?

Have I ensured that documents provided to Boeing subcontractors or the U.S. Government are clearly marked as originating from Boeing?

Have all the U.S. Government documents and related information in my possession been obtained and handled in accordance with established procedures?

Do I and do the members of my team understand the rules or the procurement laws and regulations that affect the government customer or agency that we are dealing with?

Do I understand the rules as to when I can provide or request information regarding government procurements?

1133

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

While waiting to attend a proposal meeting, I overheard a conversation that a procurement officer had with one of our competitors. The competitor told the procurement officer about his product’s specifications and costs. Can I still attend the meeting? Can I write a similar proposal and send it to the officer with a lower bid?

The answer is NO to both questions. You cannot take advantage of the information in any way. You should politely excuse yourself from the meeting and contact an Ethics Advisor, the Law Department, or Contracts immediately and avoid any disclosure of the information to individuals connected with the program or proposal. As an individual, you will probably have to withdraw from the bid team, but you have done your best to protect the ability of Boeing to go forward. Consult PRO-70 for further guidance.

I discovered that some inaccurate data were provided to a U.S. Government customer, but price agreement has already occurred. Will we be following proper procedures if we simply notify the customer right away?

Yes. Promptly inform your supervisor, your Contracts representative, and the Law Department. Immediate notification to your customer may result in price correction before the contract is issued, thereby removing the possibility of defective pricing. The Truth in Negotiations Act (PRO-1655) requires that accurate, current, and complete data be provided before price agreement.

I just received in the mail from an unidentified source what appears to be a U.S. Government document relating to the subject matter of the U.S. Government proposal on which I am working. I can find no indication that it has been received through authorized channels. What should I do?

Do not read the document or information any further, and do not show it to anyone associated with the program. The document or information must be immediately sealed and provided directly to an Ethics Advisor or the Law Department. Consult PRO-70 for further guidance.

Proper Marketing Practices – Marketing to the U.S. Government Company Procedure PRO-5

1144

SSuummmmaarryy

The Boeing Company deals with its suppliers and customers in a fair and impartial manner; business should be won or lost on the merits of Boeing products and services. Any employee offering a business courtesy must ensure that it is ethical, legal and complies with all applicable Boeing poli- cies and procedures. If your job places you in a position to offer or approve the offer of business courtesies, you should be familiar with this Procedure 6 and with any rules that may determine whether the intended recipient can accept them.

A business courtesy is a present, gift, hospitality, or favor for which fair mar- ket value is not paid by the recipient. A business courtesy may be a tangible or intangible benefit such as meals, drinks, entertainment, recreation, door prizes, honoraria, transportation, discounts, promotional items, or use of a donor's time, materials, facilities, or equipment.

Any employee who offers or approves the offer of a business courtesy must ensure that it is proper and that the business courtesy cannot reasonably be interpreted as an attempt to gain an unfair business advantage or that could otherwise reflect negatively on the reputation of Boeing or the recipient. An employee may not use personal funds or resources to do something that cannot be done with Boeing resources.

Specific requirements and restrictions apply regarding the offering of busi- ness courtesies to government employees, officials, and representatives, as well as officials and representatives of foreign governments.

Rules for business courtesies are complex, and each situation must be evalu- ated carefully. Primary approval authority is vested in business manage- ment. Ethics Advisors and the Law Department are available to assist in properly resolving issues concerning business courtesies.

Offering of Business Courtesies Company Procedure PRO-6

QQuueessttiioonnss ttoo aasskk yyoouurrsseellff

Am I offering a business courtesy in an attempt to obtain special treatment for Boeing?

Could my offer of a business courtesy or the acceptance of a business courtesy by the recipient prove embarrassing to Boeing or the recipient?

Would acceptance of the business courtesy by the recipient be a violation of any law, regulation, or policy governing the actions of the recipient?

1155

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

Our first program review will be next month, and a group of U.S. Air Force officers will be attending. We want to make a good impression, but their travel schedules allow only limited time for the meeting. Can we provide a catered lunch?

Yes, but only if the Air Force officers pay Boeing the full cost of their meals. Such luncheon arrangements need to be coordinated in advance so that Air Force attendees are aware of your luncheon plans, the cost, and the method of payment.

We have worked closely with a customer on a large contract that is now complete. We want to recognize our achievement by having a special event and giving each member of the joint team a plaque commemorating comple- tion of the project. Would this violate the Boeing rules for ethical business conduct?

It depends. In situations involving an agency of the U.S. Government, Boeing policy would allow team members to be offered plaques, certificates, or trophies that are of little intrinsic value and are intended solely for presentation. Otherwise, Boeing policy restricts giving federal executive branch employees (DOD, NASA, FAA, etc.) anything other than promotional items worth less than $10 (coffee mugs, pens, pencils, or similar items with a Boeing logo). For commercial customers, it would depend upon the policy of the individual customer and the reasonable customs of the marketplace. Such events should be reviewed in advance with your management or an Ethics Advisor.

I have a friend who works for the Department of Defense. Does Boeing policy prohibit me from buying her a Christmas present?

Not necessarily. Although Boeing policy and U.S. Government standards of conduct regulate gifts to federal govern- ment employees by vendors, these rules do not apply to the exchange of gifts between friends or family members when the exchange is exclusively the result of a personal and not a business relationship. However, if the gift is sig- nificant, contact your management or Ethics Advisor for guidance as to whether or not you can offer it. It is also important to remember that, in the absence of a personal relationship, Boeing policy does not permit an employee to personally offer business courtesies that the company is prohibited from offering.

Can I have Boeing Transportation drive two of our commercial customers from the airport to the hotel? What if these customers are from the U.S. Navy?

First, you can provide transportation for commercial customers except when their company policy prohibits them from accepting this type of business courtesy. Second, you cannot pick up your Navy customers at the airport unless they pay Boeing the fair market value of the transportation. As a general rule, Boeing employees may not offer or provide transportation to a federal executive branch employee unless the federal executive branch employee pays Boeing the fair market value of the transportation.

Offering of Business Courtesies Company Procedure PRO-6

1166

SSuummmmaarryy

A conflict of interest may exist when an employee or a member of his or her family is involved in an activity or has a personal interest that could affect the employee’s objectivity in making decisions concerning his or her Boeing company duties and responsibilities. Such interests might include outside employment with a Boeing customer, supplier, or competitor, or having a significant financial interest with one of these entities. This procedure helps employees to identify potential areas of conflict of interest or request a conflict of interest review, and it provides details on the review process.

An actual conflict of interest does not need to be present to constitute a violation of this procedure. Activities that create the appearance of a conflict of interest must also be avoided to ensure that the reputation of Boeing and its employees is not harmed. Any outside activities related to the conditions listed in the procedure should be fully disclosed by employees before they or their family members undertake the activity. If the activity is already taking place, disclosure is still required. Unless formally approved in writing, such activities are prohibited. Employees should contact their Ethics Advisor for guidance.

Employees who need a conflict of interest determination should submit information to an Ethics Advisor for a review. Employees may access the online COI Review Request form at the Ethics@Boeing web site, under “COI Information and Forms,” where they will find information on the process. Employees without access to the Boeing intranet may contact an Ethics Advisor to obtain a form.

Conflict of Interest Company Procedure PRO-7

QQuueessttiioonnss ttoo aasskk yyoouurrsseellff

Outside of your Boeing responsibilities, are you involved in an advisory role (an officer, member of the board of directors, partner, consultant, representative, agent, advisor or employee) of a third-party entity?

Do your Boeing responsibilities involve you directly with a family member, relative, or close personal friend who works for a third-party entity for which you have job responsibilities that include influence over the selection of a Boeing supplier or of its products for Boeing use?

Do you or an immediate family member own or work at an outside business that is competitive in technical areas or product lines similar to those of Boeing?

1177

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

I own an outside business and have developed a product I think would be beneficial to Boeing. Does Boeing prohibit employees from becoming suppliers to Boeing?

While not specifically prohibited by policy, Boeing seldom purchases products or services from its employees. The company’s reputation for impartiality and fair dealing with suppliers could be damaged by routinely acquiring products or services from employees, even with full and open competition.

What is wrong with having a relative who works for a customer or supplier?

In most cases nothing, but the company needs to know about it so appropriate action can be taken to protect potential conflicts from affecting or even appearing to affect company decisions. For example, if your father represents a supplier and has been involved in procurement activities and your manager has just informed you that he wants you to join a proposal team looking at bids from various companies, including the one that employs your father, you need to disclose this matter.

Prior to working for Boeing, I worked for a competitor that invested my personal funds into a savings plan consisting of the competitor’s stock and mutual fund holdings with other possible suppliers, customers, or competitors. Is this a conflict of interest?

Because of the nature of the aerospace business, some employees may have financial holdings such as you describe with our suppliers, customers, or competitors. PRO-7 requires full disclosure if an employee’s financial interest in any supplier, customer, or competitor holdings is either

• 5% or more of the stock, assets, or other interests of the entity. •10% or more of the employee’s net assets.

If your holdings do not meet the criteria above, in accordance with PRO-7, there is no conflict of interest.

How do I know whether an activity in which I am engaged outside of work creates an actual or potential conflict of interest?

It is not possible to anticipate all circumstances that might signal potential conflicts of interest. A conflict situation can arise when you take actions or have interests that may make it difficult to perform your company work objectively and effectively. Conflicts of interest also arise when you or a member of your family receives improper personal benefits as a result of your position in the company. Employees, officers, and directors are also prohibited from (a) taking for themselves personal opportunities that are discovered through the use of corporate property, information, or position, (b) using corporate property, information, or position for personal gain, and (c) competing with the company. Boeing PRO-7 prohibits such conflicts of interest and provides a means for employees, officers, and directors to communicate potential conflicts to the company.

Conflict of Interest Company Procedure PRO-7

1188

SSuummmmaarryy

A business courtesy is a gift, hospitality, or favor from persons or firms with which Boeing may do business.

All business courtesies offered to and accepted by Boeing employees are gifts belonging to Boeing; employees should not assume that they may keep a business gift for personal use. Generally, an employee may keep a business courtesy only when acceptance of the courtesy promotes successful working relationships and goodwill for Boeing interests, conforms to the reasonable and ethical practices of the marketplace, does not create actual conflict of interest or divided loyalty, and does not create the appearance of an improper attempt to influence business decisions.

Employees may not ask for a business courtesy. In addition, employees may not accept business courtesies when there is an actual or perceived expectation that the donor may want something in return, may be attempting to gain an unfair advantage, or may be trying to influence an employee to do things that might violate laws.

In deciding whether to accept a gift, employees are expected to use good business judgment and ask questions when in doubt. Employees should not accept a gift if they would be uncomfortable discussing it with their manager, coworkers, or a newspaper reporter. When in doubt about accepting a business courtesy, contact your manager or Ethics Advisor.

Acceptance of Business Courtesies Company Procedure PRO-8

QQuueessttiioonnss ttoo aasskk yyoouurrsseellff

Have I been singled out for special treatment, or is the business courtesy being offered routinely to all customers?

Might the timing or the nature of the gift create a perception that will cause others to doubt my objectivity?

Would I be willing to write a “thank-you” note for this gift and send a copy to my manager?

1199

FFrreeqquueennttllyy aasskkeedd qquueessttiioonnss

A supplier representative knows that I am a big baseball fan. He offered me two great tickets to a baseball game. I know that Boeing policy would not allow me to accept the tickets as a gift, but what if I buy them from him?

You can accept the tickets if you pay for them, unless the tickets are to a “sold-out” event. Under those circumstances, you would be accepting the gift of an opportunity to buy tickets that are not generally available for purchase and that is inappropriate. In addition, business courtesies such as plaques, trophies, door prizes, certificates, meals, gifts (e.g., coffee mugs, posters, pens) can be accepted if the courtesies are of a nominal value, promote goodwill in Boeing business relationships, conform to reasonable and ethical practices of the marketplace, are not in exchange for favorable treatment, do not create a conflict of interest between the employee and Boeing, and avoid an actual or the appearance of impropriety or undue influence.

I have been offered a discount on a product sold by a supplier of the company. May I take advantage of the discount?

You may accept the discount only if it is clearly available to all Boeing employees and approved by the company. Other personal discounts should be regarded as gifts and declined.

What if I receive a gift that I know is not acceptable? What should I do?