Section 5.3 Use of Vacation Credits.

5.3(a) Subject to management approval based on Company work schedule requirements, previously awarded vacation credits may be used by the employee without limit. Management will encourage employee use of vacation for time off within the period credits are available. Use of vacation at times convenient to the employee will be arranged to the extent permitted by Company work schedule requirements.

5.3(b) Vacations are to be taken as time off and there will be no pay in lieu of time off.

5.3(c) Subject to 5.3(d), vacation credits must be used in units equal to the scheduled hours in the employee's normal workday.

5.3(d) Part-time employees normally will use vacation credits in amounts comparable to their part-time work schedules. However, subject to the scheduling requirements of his or her organization, a part-time employee may request and receive vacation in eight (8) hour increments.

5.3(e) Holidays occurring while an employee is on vacation are not deducted from vacation credits.

5.3(f) Payment for vacations will be made at the employee's base rate in effect at the time vacation is taken plus, if applicable, any supplement to the base rate approved by the Company for inclusion in vacation pay.

5.3(g) An employee on leave of absence is eligible to use vacation credits.

Section 5.4 Vacation Payment on Termination. An employee who terminates for any reason will be paid for all unused credits in his or her vacation account and all accrued vacation through the last day worked.

Section 5.5 Vacation Credits When Payroll Is Changed. In all cases involving the transfer of an employee from one payroll to another, the provisions of the Company's procedures pertaining to vacations, as may be revised from time to time by the Company, shall be applicable.

ARTICLE 6

SICK LEAVE, RESERVE ACCOUNT AND
FINANCIAL SECURITY PLAN

Section 6.1 Establishment of Initial Eligibility for Sick Leave (December 6, 2005 through December 22, 2005).

6.1(a) Employees classified on a salaried payroll become eligible for sick leave upon completion of one (1) month continuous active service with the Company.

6.1(b) When the continuity of employment is broken other than by layoff or termination to enter military service, an employee must begin with the date of reemployment to accumulate one (1) month continuous active service with the Company before being eligible for sick leave.

Section 6.2 Accumulation of Sick Leave (December 6, 2005 through December 22, 2005).

6.2(a) On the first workday following completion of one (1) month of continuous active service, a full-time employee will be credited with eight (8) hours sick leave. Thereafter, he or she will accumulate eight (8) hours sick leave for each month of active service to a maximum of eighty (80) hours during the first and each succeeding year of service. For part-time employees, sick leave credits will be accumulated in the proportion that the hours worked bear to full-time hours, rounded to the nearest one-tenth hour unit.

6.2(b) In all cases involving the transfer of an employee from one payroll to another, the provisions of the Company's procedures pertaining to sick leave, as may be revised from time to time by the Company, shall be applicable.

6.2(c) No sick leave credit will be accumulated during periods on layoff or for absence in excess of the first ninety (90) calendar days on a leave of absence. Such absence from the active payroll will reduce the monthly sick leave award, if applicable, in the proportion of 1/30th of eight (8) hours for each calendar day of absence during the month, or a comparable proportionate reduction if a part-time employee, rounded to the nearest tenth of an hour.

6.2(d) Eligibility dates and accumulated sick leave credits established prior to this Agreement will not be changed as a result of this Agreement.

Section 6.3 Use of Sick Leave (December 6, 2005 through December 22, 2005).

6.3(a) Sick leave credits are to be used only in the event of absence due to the following causes: (a) illness of employee, including physical incapacity of a female employee due to her pregnancy, (b) illness or death in the family (requiring the employee's presence), and (c) medical or dental appointment which can be scheduled only during the working hours.

6.3(b) Sick leave payments will be at the employee's base rate in effect at the time of his or her absence plus, if applicable, any supplement to the base rate approved by the Company for inclusion in sick leave pay.

6.3(c) Sick leave hours will be used from sick leave hours most recently credited.

6.3(d) Sick leave credits may be used by an employee on approved leave of absence if the requirements of 6.3(a) are met.

Section 6.4 Reserve Account (December 6, 2005 through December 22, 2005).

6.4(a) Sick leave hours credited to the employee's Reserve Account and Financial Security Plan Trust Account on the effective date of this Agreement will not be changed as a result of this Agreement.

6.4(b) The maximum allowable amount in a full-time employee's combined Reserve Account and Financial Security Plan Trust Account will be 1,800 hours. An employee who is rehired or reinstated after having been paid for his or her Reserve Account or Financial Security Plan Trust Account will be eligible for transfer of credits to his or her Reserve Account as if he or she were a new employee.

6.4(c) On each eligibility date of a full-time employee on the active payroll, up to forty (40) hours of sick leave awarded during his or her preceding eligibility year, less any sick leave hours used in excess of forty (40) hours during that eligibility year, will be transferred to his or her Reserve Account, subject to the "maximum allowable amount."

For a part-time employee on the active payroll, the amount of previously awarded and unused sick leave credits transferred to the Reserve Account on each eligibility date will be in the proportion the employee's actual total hours of work bear to full-time hours during the qualifying period.

6.4(d) An employee off the active payroll due to leave of absence, layoff, or military service will, upon return from leave or upon reinstatement from layoff or military service with reemployment rights, have transferred to his or her Reserve Account such sick leave credits as would normally have been transferred had the employee returned to the active payroll on his or her first sick leave eligibility date following the employee's last day on the active payroll, unless such employee has received payment under Section 6.6.

6.4(e) At the time an employee who has hours credited to his or her Reserve Account is terminated for any reason, payment shall be made for those hours credited to his or her Reserve Account at the employee's then current base rate.

6.4(f) Credits in an employee's Reserve Account will be converted in accordance with the Financial Security Plan and placed in an individual Financial Security Plan Trust Account as provided for in the Financial Security Plan.

Section 6.5 Financial Security Plan (December 6, 2005 through December 22, 2005).

6.5(a) Continuation of Plan. Subject to the continuing approval of the Commissioner of Internal Revenue and of other cognizant governmental authorities, as more particularly hereinafter specified, and to the provisions of 6.5(d), a Financial Security Plan (the "Plan") in the form as now in effect as to the employees within the units to which this Agreement relates shall continue to be effective while this Agreement is in effect as to such employees in accordance with and subject to the terms, conditions and limitations of the Plan.

6.5(b) Approval of Plan. Approval of the Plan by the Commissioner of Internal Revenue as referred to in 6.5(a) means a continuing approval sufficient to establish that the Plan and related trust(s) are at all times qualified and exempt from income tax under Section 401(a) and other applicable provisions of the Internal Revenue Code of 1986, and that contributions made by the Company under the Plan are deductible for income tax purposes in accordance with law. The cognizant governmental authorities referred to in 6.5(a) include, without limitation, the Department of Labor and the Securities and Exchange Commission, and their approval means their confirmation with respect to any matter within their regulatory authority that the Plan does not conflict with applicable law.

6.5(c) Continuation Beyond Agreement. The Company shall not be precluded from continuing the Plan in effect as to employees within these units to which this Agreement relates, after expiration or termination of this Agreement, subject to the terms, conditions, and limitations of the Plan.

6.5(d) Changes to the Current Plan. Subject to action by the Company’s Board of Directors and to the approvals specified in 6.5(b), all provisions of the plan are to remain unchanged with the exception of the following amendments:

6.5(d)(1) Maximum Allowable Hours. The maximum allowable amount in a full-time employee’s combined reserve account and Financial Security Plan Trust Account will be increased forty (40) hours to 1,800 hours.

6.5(d)(2) Effective Date of Amendment. The amendment set forth in 6.5(d)(1) above shall take effect December 2,2005.

Section 6.6 Unreserved Sick Leave Credits (December 6, 2005 through December 22, 2005).

Upon retirement under the Company's retirement plan or upon layoff or death while retirement eligible, employees will receive payment for fifty (50) percent of their unreserved sick leave credits remaining on the date of retirement, layoff, or death. Such credits will be paid at the employee's then-current base rate, subject to a maximum rate that is established from time-to-time by the Company for all salaried employees.

Section 6.7 Current Sick Leave Account, Unused Sick Leave Account, and Financial Security Plan Effective December 23, 2005

Effective December 23, 2005, the provisions of PRO-1004 (February 22, 2005) will apply to employees covered by this Agreement. The Union will be notified of any changes to PRO-1004.

No new contributions will be made to the Financial Security Plan with respect to Members’ eligibility dates (and anniversaries thereof) occurring after December 22, 2005. An employee who has an accrued benefit under the Financial Security Plan shall retain such accrued benefit under the Plan subject to the current provisions of the Plan. Unreserved sick leave credits that have not been transferred to a Reserve Account as of December 22, 2005, will be credited to an employee’s Unused Sick Leave Account under PRO-1004, and will be accumulated, used, and paid or forfeited upon termination of employment in accordance with PRO-1004.

ARTICLE 7 – HOLIDAYS

Section 7.1 Dates on Which Observed. The following holidays will be observed by the Company during the term of this Agreement:

2005

Holidays Day Date of Observance

Winter Break .................................... Friday............................December 23, 2005

Winter Break .................................... Monday .........................December 26, 2005

Winter Break .................................... Tuesday ........................December 27, 2005

Winter Break .................................... Wednesday...................December 28, 2005

Winter Break .................................... Thursday.......................December 29, 2005

Winter Break .................................... Friday............................December 30, 2005

2006

Holidays Day Date of Observance

New Year’s Day ............................... Monday .............................. January 2, 2006

Memorial Day................................... Monday .................................. May 29, 2006

Independence Day........................... Tuesday ....................................July 4, 2006

Labor Day ........................................Monday ......................... September 4, 2006

Thanksgiving Day ............................ Thursday.......................November 23, 2006

Day following Thanksgiving ............. Friday............................November 24, 2006

Winter Break .................................... Friday............................December 22, 2006

Winter Break .................................... Monday .........................December 25, 2006

Winter Break .................................... Tuesday ........................December 26, 2006

Winter Break ....................................Wednesday...................December 27, 2006

Winter Break .................................... Thursday.......................December 28, 2006

Winter Break .................................... Friday............................December 29, 2006

2007

Holidays Day Date of Observance

New Year's Day ............................... Monday .............................. January 1, 2007

Memorial Day................................... Monday .................................. May 28, 2007

Independence Day........................... Wednesday...............................July 4, 2007

Labor Day ........................................Monday ......................... September 3, 2007

Thanksgiving Day ............................ Thursday.......................November 22, 2007

Day following Thanksgiving ............. Friday............................November 23, 2007

Winter Break .................................... Monday .........................December 24, 2007

Winter Break .................................... Tuesday ........................December 25, 2007

Winter Break ....................................Wednesday...................December 26, 2007

Winter Break .................................... Thursday.......................December 27, 2007

Winter Break .................................... Friday............................December 28, 2007

Winter Break .................................... Monday .........................December 31, 2007

2008

Holidays Day Date of Observance

New Year's Day ............................... Tuesday ............................. January 1, 2008

Memorial Day................................... Monday .................................. May 26, 2008

Independence Day........................... Friday........................................July 4, 2008

Labor Day ........................................Monday ......................... September 1, 2008

Thanksgiving Day ............................ Thursday.......................November 27, 2008

Day following Thanksgiving ............. Friday............................November 28, 2008

~~Winter Break .................................... Wednesday....................December 24, 2008~~

~~Winter Break .................................... Thursday........................December 25, 2008~~

~~Winter Break .................................... Friday.............................December 26, 2008~~

~~Winter Break .................................... Monday..........................December 29, 2008~~

~~Winter Break .................................... Tuesday.........................December 30, 2008~~

~~Winter Break .................................... Wednesday....................December 31, 200~~

For the period following Friday, November 28, 2008 through the remaining effective period of this Agreement, the holidays to be observed under the terms of this Article shall be those holidays scheduled and observed by the Company.

Section 7.2 Holiday Practices. Practices relating to the observance of the holidays referred to above will be administered in accordance with the established procedures of the Company. This includes the flexible redistribution of hours from one day to another within an eighty (80) hour pay period with management approval for those on other than a five-day, eight hour schedule, as permitted by Company policy. An employee on leave of absence on the day of the holiday is eligible for holiday pay if he or she meets the criteria outlined in Company policy.

Section 7.3 Employees Prevented from Working Because of Local Holidays.

Employees assigned to a non-Company facility who are prevented from working their assigned work period because a holiday not listed in this Article is recognized at the facility shall be paid for such assigned work period, unless the Company, at its option and if the employees volunteer, modifies the work schedule for the week in which the holiday falls so that the employees are able to work a full work week. In all cases, hours worked on scheduled days of rest will be treated as scheduled overtime under 11.3(b).

ARTICLE 8
WORKFORCE ADMINISTRATION

Section 8.1 Employees to Whom this Article is Applicable.

8.1(a) This Article applies and refers to employees within the collective bargaining unit described in Article 1.

8.1(b) The provisions of 8.6 will not apply to employees placed on travel status by the Company, and such employees will not be laid off while on such status.

8.1(c) The terms "employee" or "employees" wherever used in this Article will be subject to the foregoing limitations.

Section 8.2 Objective. The general objective of the procedure stated in this Article is to provide for the accomplishment of workforce reductions for business reasons, to the end that insofar as practicable the reductions will be made equitably, expeditiously and economically, and at the same time will result in retention on the payroll of those employees regarded by Management as comprising the workforce that is best able to maintain or improve the efficiency of the Company, further its progress and success and contribute to the successful accomplishment of the Company's current and future business. The location, occurrence and existence of any condition necessitating a workforce reduction, and the number of employees involved, will be determined exclusively by the Company. Following such determination, the Company will notify the Union of the location and the estimated size and job family and skills management code(s) involved in the anticipated workforce reduction no less than five (5) days prior to such reduction. Wherever practicable, affected employees will be given two (2) weeks notice prior to layoff.

8.2(a) It is recognized by both parties that due to schedule requirements, the varying kinds of work performed, the geographical location of the work, and other relevant factors, it is necessary at times to work certain skills management coded employees overtime while at the same time workforce reductions involving the same skills management codes will be going on. Management will review the use of overtime in any skills management code in which layoffs are contemplated with the intent of minimizing the use of such overtime. Management, at its sole discretion, will determine the level of overtime to be worked.

Section 8.3 Terminology for Use in Procedure. Preliminary to, and as affording information necessary to the application of the procedures stated in 8.6, employees will be classified in two ways:

8.3(a) Management periodically will make a comparative rating of each employee as provided in 8.4. The individual rating will be referred to as a "retention rating ," and the process of applying these ratings and compiling them in order of rating as "retention indexing." Similar usage of these terms is made herein. The periodic retention indexing will occur not sooner than four (4) months nor longer than eighteen (18) months from the prior periodic retention indexing.

8.3(b) Each employee will be assigned a job family and skills management code (SMC) as provided in 8.5.

8.3(b)(1) Each employee may request assignment of a secondary SMC from the Company’s job family and skills management code.

8.3(c) The term "Major Organization" as used in this Article will mean a Major Organizational element of the Company reporting to the Chief Executive Officer of the Company or identified as such by the Chief Executive Officer. The Company shall provide to the Union an updated list of Major Organizations and advise the Union of changes made thereto.

Section 8.4 Retention Indexing. The comparative rating required by 8.3(a) will be accomplished as herein described. Retention indexes assigned to employees prior to the execution date of this Agreement will remain in effect until changed under provisions of this Article.

8.4(a) Management will assign a retention index by SMC to each employee to whom this Article applies, with the basic objective of identifying those employees who in the opinion of Management, are best able to maintain or improve the efficiency of the Company, further its progress and success and contribute to the successful accomplishment of the Company's current and future business as identified in the employee’s Performance Management Plan. Consistent with this objective, Management will consider each employee's length of Company service, competence, diligence and demonstrated usable capabilities based upon the employee's current performance and a review of the employee's previous performance. Length of Company service will be a positive factor to the extent that the experience so gained continues to be reflected in increased capability.

8.4(b) Subject to 8.4(c) and 8.4(d), retention indexing will result in each employee being rated in one of four (4) categories, hereinafter referred to as First, Second, Third, or Fourth.

8.4(c) It is recognized that any practicable process of retention indexing cannot be completely free of error as to method used or as to resulting ratings, taking into account the large numbers of employees, skills, organizations and requirements involved; the fact that numerous Management representatives necessarily must participate in the process; and the additional facts that professional employees are involved and many of the factors that must be dealt with in the process are intangible in nature. The Company will determine the retention rating of each employee, the time at which such ratings will be assigned, the members of Management who will determine ratings or participate in the indexing process, the groupings to be utilized and the other mechanics and details of such process. The Company will instruct and periodically will reinstruct members of Management participating in the process to assign retention ratings with the greatest possible care and objectivity, giving full consideration to the objectives stated in 8.2. Such instructions will stress that retention indexing is to be accomplished without regard to potential adjustments for Company service as provided in 8.4(e).

8.4(c)(1) Retention Rating Appeals. An employee who feels the assigned retention rating is inappropriate may at any time discuss the matter with his or her immediate supervisor. If within thirty (30) calendar days following notification of the assigned retention rating, the employee elects to appeal the rating, and discussion with the immediate supervisor has not resolved the employee's concern, certain ratings may be appealed for further review as provided below:

8.4(c)(1)a Only those assigned retention ratings may be appealed where the assigned rating represents a two (2) or three (3) position drop from the previous rating, or a one (1) position drop in two consecutive ratings, and it is substantiated that the drop is not due to the effect of workforce reduction and/or consolidation of retention indexing groups.

8.4(c)(1)b The employee so affected will address his or her concerns in writing to the Union setting forth the basis for such appeal.

8.4(c)(1)c If the Union believes the employee's appeal warrants further review, the Union will notify the Human Resources Manager or designee within ten (10) workdays of receipt of the employee's appeal.

8.4(c)(1)d Within ten (10) workdays following such notice, a Human Resources Representative, as designated by the Human Resources Manager, an Employee Relations Representative, and a Union Representative will meet to hear the appeal. The employee, immediate supervisor, and/or Functional Manager shall be invited to provide pertinent information at this meeting.

8.4(c)(1)e The Human Resources Representative and Union Representative will resolve the appeal at the meeting or within five (5) workdays thereafter. In the event the Union considers the decision to be inappropriate to the facts of the case, the Union may advance its appeal to the Human Resources Manager. Such resolution by the Human Resources Manager will be final and binding and will conclude the appeal process.

8.4(d) Each periodic retention indexing will be in accordance with a forced distribution of employees so that, at the time of the periodic retention indexing, 23% to 27% of the employees within each job family and skills management code will be rated in each of the first three indexes described in 8.4(b), with the remaining employees rated in the Fourth index. In instances where it is mathematically impossible to accomplish this 23% to 27% distribution within each job family and skills management code, the distribution will conform as nearly as is mathematically feasible with this 23% to 27% distribution requirement. Since personnel transactions subsequent to each periodic retention indexing will occur, it is not necessary to maintain this distribution during intervals between periodic retention indexings. Assignment of retention ratings between periodic reviews will be handled in accordance with 8.4(g), 8.4(h), and 8.4(i), and such ratings will be reaffirmed or superseded by ratings assigned during the next periodic indexing.

8.4(e) As a part of each periodic retention indexing, and immediately following completion of the distribution procedure set forth in 8.4(d), adjusted retention ratings will be assigned in compliance with the following:

Employees with twenty (20) or more but less than thirty (30) years of Company service who are rated in the Fourth retention index will be adjusted to a Third retention index, and employees with thirty (30) or more years of Company service who are rated in the Third or Fourth retention index will be adjusted to a Second retention index. Such adjustments will be reflected in the written notification to each employee described in 8.4(f). (Employees who reach the aforementioned Company service dates between periodic retention indexings will have their assigned retention ratings adjusted accordingly.) Employees designated pursuant to the process described in Attachment 13 will not be eligible for service adjustments. Such employees may appeal their designation using the process described in 8.4(c)(1).

8.4(f) Management will provide each employee with written notification of his or her new periodic retention rating not later than the effective date of the new periodic retention indexing, except where such a schedule is made impractical due to the unavailability of the employee or the supervisor occasioned by vacations, travel assignments, etc. In addition, management will offer to discuss the new retention index with employees. The written notification will contain that employee's:

8.4(f)(1) Job Family and Skills Management Code;

8.4(f)(2) Management Captain's name;

8.4(f)(3) Retention rating prior to and following any adjustment under 8.4(e), effective date, and the number of employees in each of the four (4) indexes as adjusted under 8.4(e) within the employee's job family and skills management code;

8.4(f)(4) Secondary Skill Code.

8.4(g) An employee hired into the unit who has less than two (2) years of directly applicable work experience will be assigned a job family and skills management code. Such employees will not be included in or subject to the retention index review and will not be assigned a retention rating until (1) management is able to evaluate the employee’s capability and elects to assign the employee a retention rating; or (2) a period of twelve (12) months from the employee’s date of hire into the unit; or (3) a surplus condition occurs in the assigned job family and skills management code, whichever occurs first.

8.4(h) An employee who returns to active employment from layoff status will retain the job family and skills management code and retention rating held at time of layoff until such time as Management is able to evaluate the employee's capability and elects to assign the employee a new retention rating.

8.4(i) Employees entering the unit to which this Article applies, other than as described in 8.4(g) and 8.4(h) and those employees whose job family and skills management codes are changed, will receive new retention ratings within the six (6) month period following the date of such entrance or change. Prior to receiving the new ratings, employees whose job family and skills management codes were changed will be regarded as having the retention ratings held immediately prior to the job family and skills management code change or entrance to the unit.

Section 8.5 Job Family and Skills Management Code. Job family and skills management codes will be assigned as follows:

8.5(a) A job family and skills management code will be assigned each employee by Management following discussion with the employee regarding his or her knowledge, skills and abilities as they relate to their current assignments. This job family and skills management code generally defines the employee’s current assignment and not necessarily the employee’s highest skill. Upon assignment by management, the employee will have the opportunity to acknowledge receipt on the Company provided form. Employee job classifications and skills management codes may be challenged pursuant to Article 22.5(d).

Section 8.6 Procedure. Subject to 8.6(f), 8.6(g), 8.6(h) and 8.7, and the applicable provisions of Article 9, the scope of which sections is in no way limited or affected by 8.6(a), 8.6(b), 8.6(c), 8.6(d) and 8.6(e), the procedure for handling workforce reductions will be as follows:

8.6(a) When a workforce reduction is determined by Management to be necessary within one or more job family and skills management codes in a Major Organization, Management will designate for layoff the required number of employees in the Major Organization within such job family and skills management codes with Fourth retention indexes. Exceptions to the designation for layoff of Fourth index employees may be made by the Company, where it desires to retain certain Fourth index employees in such job family and skills management codes in the Major Organization, as long as the number of Fourth index employees so retained in each affected job family and skills management code in the Major Organization does not exceed 10% or one employee, whichever is greater, of the number of employees rated Fourth index within the job family and skills management code at the most recent periodic indexing. If the remaining Fourth index employees in any such job family and skills management code are less than the number required to be designated for layoff in that job family and skills management code, the procedures in 8.6(b) will be applied, subject to the exceptions stated herein.

8.6(b) If, after application of the procedures and exceptions stated in 8.6(a), a necessity for workforce reduction continues to exist in any such job family and skills management codes in the Major Organization, Management will designate for layoff the required number of employees in the Major Organization within such job family and skills management codes with Third retention indexes. Exceptions to the designation for layoff of Third index employees may be made by the Company, where it desires to retain certain Third index employees in such job family and skills management codes in the Major Organization, as long as the number of Third index employees so retained in each affected job family and skills management code in the Major Organization does not exceed 10% or one employee, whichever is greater, of the number of employees rated Third index in the Major Organization within the job family and skills management code at the most recent periodic indexing. If the remaining Third index employees in any such job family and skills management code are less than the number required to be designated for layoff in that job family and skills management code, the procedures in 8.6(c) will be applied, subject to the exceptions stated therein.

8.6(c) If, after application of the procedures and exceptions stated in 8.6(b), a necessity for workforce reduction continues to exist in any such job family and skills management codes in the Major Organization, the reduction will be accomplished by transferring a sufficient number of the remaining employees in the Major Organization within such job family and skills management codes to another Major Organization within the same labor market area displacing Fourth index employees in such job family and skills management codes in the latter Major Organization who will be designated for layoff; and then, to the extent necessary, Third index employees in such job family and skills management codes in the latter Major Organization will be displaced and designated for layoff. The latter Major Organization will have the right to retain in each affected job family and skills management code not to exceed 20% of its Fourth index employees in each such job family and skills management code and not to exceed 40% of its Third index employees in each such job family and skills management code. To determine the number of employees that may be retained by the latter Major Organization, these percentages are to be applied respectively to the number of Fourth index employees and Third index employees that were within the particular job family and skills management code in the latter Major Organization at the most recent periodic indexing.

8.6(d) If, after application of the procedures and exceptions stated in 8.6(a), 8.6(b) and 8.6(c) if applicable, a necessity for workforce reduction continues to exist in any of the job family and skills management codes in the Major Organization where the reduction originated, a sufficient number of Second index employees in such Major Organization within such job family and skills management codes will be designated for layoff to reduce to the extent possible or eliminate the condition. Exceptions to the designation of Second index employees for layoff may be made by the Company where it desires to retain certain Second index employees in such job family and skills management codes in the Major Organization, as long as the number of Second index employees so retained in each affected job family and skills management code in the Major Organization does not exceed 10% or one (1) employee, whichever is greater, of the number of employees rated Second index in the Major Organization within the job family and skills management code at the most recent periodic indexing.

8.6(e) Further rounding under 8.6(a), 8.6(b), and 8.6(d) is permitted within the following parameters:

8.6(e)(1) One (1) employee may be subject to the 10% exception if there are one (1) to fourteen (14) employees in the retention index group;

8.6(e)(2) Two (2) employees may be subject to the 10% exception if there are fifteen (15) to twenty-four (24) employees in the retention index group;

8.6(e)(3) Three (3) employees may be subject to the 10% exception if there are twenty-five (25) to thirty-four (34) employees in the retention index group;

8.6(e)(4) Higher numbered retention index groups may be rounded similarly.

8.6(f) If, after application of the procedures and exceptions stated in 8.6(a), 8.6(b), 8.6(c) if applicable, and 8.6(d), a necessity for workforce reduction continues to exist in any of the job family and skills management codes in the Major Organization where the reduction originated, the Company will have the right to select, designate and lay off any of the remaining employees in the affected job family and skills management codes within the collective bargaining unit irrespective of their retention index, Major Organization, or any other factor.

8.6(g) The Company may lay off employees from the unit without regard to the provisions of this procedure, provided the number of such layoffs per month does not exceed .25% (one quarter of one percent) of the total number of employees employed in the collective bargaining unit on the first day of that month.

8.6(h) Nothing in this Article is intended to preclude Management from using other actions, such as employee transfers, reclassifications, reassignments or combinations thereof which are not inconsistent with the terms and conditions governing such actions as may be set forth in this Agreement, in order to avoid or reduce the necessity to initiate or carry out workforce reductions.

8.6(i) Employees designated by the Company for special training in programs approved by the Company will be assigned a unique skills management code in accordance with Attachment 35.

Section 8.7 Exceptions to Foregoing Procedures. In instances where, in the opinion of Management, the foregoing procedures contained in this Article do not achieve the Company objectives stated in 8.2, exceptions thereto, without any limitation as to number, may be made when approved by the Chief Executive Officer of the Company, or designated representative. It will be the responsibility of any supervisor who recommends such an exception to prepare and transmit through the line organization to the Vice President of Engineering or equivalent level of management and then the Office of the Chief Executive Officer of the Company, or designated representative, a detailed report of the proposed exception or exceptions and the reasons therefore. An explanation will be provided to the Union.

Section 8.8 General Provisions.

8.8(a) Compensable Injuries. Any employee who has been wholly or partially incapacitated for that employee's regular work by compensable injury or compensable occupational disease while in the employ of the Company may, while so incapacitated, be employed in the bargaining unit in work which the employee can do without regard to the provisions of this Article. The Union shall be notified of all persons to whom this waiver applies and the effective dates of such waiver.

8.8(b) Veterans. The Company and the Union, recognizing that the rights of employees entering or inducted into the Armed Forces of the United States to reemployment by the Company and the Company's obligation to these employees are the subject matter of legislation, agree that nothing contained in this Agreement will preclude the Company from re-employing such employees in compliance with the provisions of applicable laws.

8.8(c) Employee Requests for Transfer. The Company will maintain an environment in which employees can make known their interest in transferring to other positions for which they are qualified to perform and which may satisfy their personal needs. A job posting and transfer process will be maintained which will allow each employee without fear of reprisal, to make application for transfer and receive consideration as a candidate for positions for which qualified. All employees, including those involved in surpluses, shall be subject to the terms and conditions of the Company’s job posting process (PRO-6477). Exceptions to the Employee Release Requirements may be appealed to Employee Relations in cases where resolution is not obtained through discussions with management. Appeal decisions are not subject to Article 3. The Company will provide the Union with a copy of the applicable Procedure and any changes thereto.

Section 8.9 Layoff Status and Return to Active Employment.

8.9(a) Maintenance of Layoff Status.

8.9(a)(1) Each employee laid off under the provisions of this Article will remain on layoff status for a total period of three (3) years from the date the layoff was effective, subject to 8.9(a)(2).

8.9(a)(2) An employee shall remain on layoff status in accordance with 8.9(a)(1), provided he or she does not:

8.9(a)(2)a Reject consideration for employment, for example, fail to respond to a Company contact, letter of interest, or a formal offer from the Company of a job within ten (10) workdays after such contact by the Company or by such later date as may be stipulated by the Company, or

8.9(a)(2)b Refuse a formal offer from the Company for a fulltime job in the same labor market area from which laid off, for which the salary offered is equal to or greater than the employee's salary at the time of layoff plus any intervening general wage increases, or

8.9(a)(2)c Fail to report to work within ten (10) workdays following acceptance of a formal Company offer or on such date as may be stipulated in the Company offer, or

8.9(a)(2)d Elect retirement under the Company Retirement Plan thereby removing himself or herself permanently from layoff status.

8.9(a)(3) Employees removed from layoff status for any reason other than retirement or expiration of the three (3) year period following layoff will be notified in writing of such removal, and the reasons therefore, by the Company.

8.9(a)(4) Laid-off employees who are prevented from meeting the conditions described in 8.9(a)(2)a, b, or c or 8.9(b)(4) solely due to medical disability, verified to the Company's satisfaction by their personal physician, shall upon request be granted a waiver for the missed requirement(s).

8.9(b) Return to Active Employment.

8.9(b)(1) It is a mutual objective of the Company and the Union that laid-off employees, who have not been determined ineligible under 8.9(b)(3), 21.3(a), or Attachment 13 be recalled to active employment, and a mutual desire that such recall into the Major Organization be offered in approximate reverse order of layoff. An explanation of the exceptions to the approximate reverse order of recall will be provided to the Union. Accordingly, employees on file for recall pursuant to 8.9(b)(4) will be offered return to active employment within the applicable job family and skills management code, prior to workforce additions from sources external to the Company, subject to the following limitations:

8.9(b)(1)a Nothing in 8.9 will preclude the Company from hiring from sources outside the Company when projected requirements exceed the number of employees in applicable job family and skills management codes on file pursuant to 8.9(b)(4) who are eligible for an offer of recall.

8.9(b)(1)b In making recall and hiring decisions, the Company will review the specific qualifications of individuals on the basis of product familiarity, specialized experience or education, customer requirements and the need to achieve the most efficient and accurate match of individual capabilities to job requirements. Consequently, not all Company decisions relating to recall and hiring can promote the mutual objective and desire stated above. Such decisions will not be subject to Article 3.

8.9(b)(2) The Company periodically will review with the Union the operation of 8.9(b)(1) in order to facilitate achievement of the mutual objective and desire stated above.

8.9(b)(3) Prior to layoff the Company will review those employees to determine eligibility for reemployment consideration under 8.9(b)(1). The review will be limited to those employees for whom there is supporting documentation of performance deficiencies and/or a pattern of unacceptable conduct. The review will be performed by the cognizant Management Captain for the employee's job family and skills management code. Based on the review the employee will be advised no later than the time layoff notice is issued as to his or her eligibility for reemployment consideration under 8.9(b)(1). A determination of ineligibility shall be supported by documentation of performance deficiencies. An employee determined ineligible may appeal such determination to the cognizant Management Captain. If the appeal does not resolve the matter, the employee may then file a grievance in accordance with Article 3. Such grievance shall be limited to the first three steps of the grievance procedure and shall not be subject to arbitration.

8.9(b)(4) The Company will maintain a list of the names of all laid-off employees except those determined ineligible under 8.9(b)(3), those who have received layoff benefits as a lump sum under 21.3(a), and those identified under Attachment 13. In order to maintain such recall status, the employee must keep the Company informed of his or her interest in returning to active employment by submitting a letter so stating. The employee must register by letter once each consecutive calendar half-year period (January through June; July through December) during the three-year period from the date of layoff. Registration letters must be received within forty-five (45) days prior to the expiration of the current half-year period and must contain the individual’s name, social security number, address, home e-mail address, and telephone number. At the time of layoff, the Company automatically will place for the current half-year period, the names of all laid off employees in the file for priority consideration for return to active employment. Those employees laid off within a 45 day registration period will automatically be placed in the file for priority consideration for that subsequent calendar half-year period. Individuals who do not properly register in each calendar period will be removed from the priority consideration eligibility list. Failure to register properly will result in priority consideration eligibility being revoked for the remainder of the three (3) year period. Eligible employees on file for return to active employment are subject to the provisions of 8.9(a).

8.9(b)(5) If any employee on layoff status disputes his or her recall status as reflected in Company records, Company records shall prevail unless rebutted by either (a) a Company receipt, or (b) a properly addressed U.S. Postal Service return receipt evidencing filing of the salaried payroll employment availability form (or letter) during the calendar period in question.

8.9(c) Salary and Level of Returning Laid-Off Employees. Company offers to laid-off employees for return to active employment will be extended at a minimum of their exit salary plus any guaranteed wage increases implemented between the date of their original layoff and recall and whatever level is deemed appropriate by management.. Rejection of a formal Company offer for a labor market area other than the one from which laid off, or at a salary lower than the employee's salary at the time of layoff plus any intervening guaranteed wage increases, will not be cause for removal from layoff status.

8.9(d) Employees who remain on layoff status for the full period specified in 8.9(a)(1) will, for a period up to six (6) years from the date layoff was effective, remain eligible for certain additional retirement benefits as specified in the Retirement Plan.

8.9(e) The Company will maintain a record of all laid off employees who are on layoff status under the above provisions.

ARTICLE 9

CONTRACT PERSONNEL

Section 9.1 Purpose. The Company and the Union recognize that contract personnel are a practical source of skilled temporary labor that allows the Company to acquire skilled engineering and technical support in a timely manner. The Company and Union recognize that requirements for experienced contract personnel must be balanced with the need to build and maintain the Boeing experience base and to support our mutual objective of workforce stabilization by minimizing employee layoffs.

Section 9.2 Definition. The term "contract personnel" refers to temporary personnel supplied by another business entity to perform Company work on Company premises under the daily control and supervision of Company management. The business entities that provide contract personnel normally are in the business of providing temporary services (such as temporary employment agencies and staffing firms). Sources of contract personnel may also include businesses in the aerospace or related fields that make their employees available for temporary labor (so called “industry assist” arrangements). Excluded from the definition of contract personnel are consultants and their employees, employees of subcontractors or vendors.

Section 9.3 Procedures and Limitations.

9.3(a) Work assignments are to be managed with the objective of achieving the earliest practical termination of the use of contract personnel.

9.3(b) The Company shall notify the Union of the basis for the need, the approximate number of contract personnel required and the job family and skills management codes normally held by employees performing the type of work involved, and the estimated period of utilization, in the quarterly labor/management business meeting.

9.3(c) The type of work being performed by contract personnel shall be provided to the Union on a monthly basis, along with the name, organization, job family, ~~and~~ skills management code and start date of the contract personnel performing that work.

9.3(d) If based on a variety of factors (including but not limited to the nature of the assignment, the status of the program, the overall need for the skills at issue, and the purpose of using contract personnel described above) the Company needs the skills supplied by contract personnel on a long-term basis, the position shall be made available in accordance with the Boeing job posting process.

9.3(e) The Company and the Union agree that it is normally inappropriate to hire contract personnel as direct hires in periods of surplus activity within a job family and skills management code. Deviations will be subject to approval of the affected Major Organization Senior Human Resource Manager within the Major Organization and the concurrence of the Senior Engineering Manager in the Major Organization. The granting of a deviation to allow such hiring shall not be subject to the grievance and arbitration procedure of Article 3.

9.3(f) No employee from a surplusing Major Organization shall be laid off while contract personnel are still employed in that job family and skills management code within that Major Organization, except those employees as to whom there is supporting documentation of performance deficiencies.

9.3(g) Individual contract personnel may not perform work for the Company for more than eighteen (18) consecutive months without the written approval of the Director of Engineering or equivalent level of management. Monthly, the Union shall be notified of the number of contract personnel, by job family and skills management code, name, organization and start date, assigned to the Company for periods that exceed 18 months. Annually, the Company shall review contract personnel assigned for periods exceeding 18 months and obtain written approval for their continued assignment from the Director of Engineering or equivalent level of management. The Union will be notified when written approvals are obtained.

9.3(h) Normally, only direct engineers will be utilized in assigning tasks and providing technical direction to other engineers. When business situations arise that preclude the use of a direct engineer in such capacity, the Company may, at its own discretion, utilize contract personnel in these positions, provided that the Union is given advance notice of such assignments, and that these assignments are managed with the objective of achieving the earliest practical conclusion.

9.3(i) Exceptions to this Article to avoid significant disruption or impact on committed packages of work will require the approval of the affected Major Organization Director of Human Resources and the Director of Engineering or equivalent level of management. Notification will be provided to the Union as soon as practicable.

9.3(j) Employees will not be laid off until their skills have been reviewed to determine if they can replace contract personnel in other than their job family and skills management code. Such decision of whether or not to replace contract personnel shall be management’s sole discretion and shall not be subject to Article 3.

Section 9.4 Data. The Company shall supply the Union with the necessary information on a monthly basis, so that compliance with all limitations identified in 9.3 can be monitored.

ARTICLE 10

JOINT MEETINGS

Section 10.1 Joint Meetings.

10.1(a) Should either party desire to discuss with the other any matter affecting generally the relationship of the parties, a meeting of Union and Management representatives shall be arranged upon request of either party. Such meeting shall take place at a time mutually convenient to both parties. Any use of Company time for attendance at such meetings shall be arranged in advance by mutual agreement.

10.1(b) This Article is intended to provide a free avenue of communication between the Union and the Company, and suggestions, complaints, or other matters may be presented by either party, provided that neither party shall be required to discuss any item brought up by the other party nor be bound to act upon any item presented. However, both parties agree to discuss informal grievances and complaints.

ARTICLE 11

PAY RATES – CLASSIFICATIONS – OVERTIME

TEMPORARY – MILITARY LEAVE - JURY DUTY

AND WITNESS SERVICE

Section 11.1 Pay Rates, Titles, Levels and Salary Ranges.

11.1(a) The minimum salary for the payroll, effective March 3, 2006, will be $38,000 determined by the Salaried Reference Table minimum values for each bargaining unit member’s respective Salaried Job Classification and level as defined in Table I.

Level Minimum Rate

1 $ 38,300

2 $ 40,900

3 $ 48,500

4 $ 58,600

5 $ 70,400

6 $ 85,400

TABLE I

Salaried Job Classification Job Family Levels

DE Quality Engineer 1 – 6

JA Engineer/Scientist 1 – 6

KE Industrial Engineer 1 – 6

KK Manufacturing Engineer 1 – 6

KZ Tool Engineer 1 – 6

ND Embedded Software Engineer 1 – 6

SC Customer Support Engineer 1 – 6

ST Software Quality Engineer 1 – 6

11.1(b) The Company will establish three (3) selective adjustment funds in accordance with the dates set forth in Table II:

TABLE II

SELECTIVE SALARY ADJUSTMENT FUND REVIEW PERIODS

AND INCREASE PERCENTAGES

*Over the life of the contract, a minimum of four and one half percent (4.5%) will be guaranteed for those employees who are on the active payroll and in the unit for the entire duration of the Collective Bargaining Agreement. The Base Salary Adjustment Funds listed in Table II include one half of one percent (.5%) for each review period that will be distributed in accordance with Section 11.8 – Salary Adjustment and Promotion Fund.

11.1(b)(1) Following the ending date of each of the three (3) selective salary adjustment review periods, the Company will increase the base salaries of employees selected from among those who are eligible. The base salaries of eligible employees will be increased from a fund computed by multiplying the Increase Percentage by the total salaries of eligible employees. Minimum increases will be given as indicated in Table II. These increases will be effective on the Effective Date of the review period. Eligible employees are those who were in the bargaining unit prior to November 1st and on the active payroll on both the fund computation date and the increase effective date.

Employees on leave of absence for more than 180 days as of the Fund Computation Date are excluded from the Salary Review exercise.

For any Review Period identified in Table II, the Company may, at its discretion, increase the Increase Percentage, resulting in an equal decrease to the Increase Percentage of a subsequent Review Period.

11.1(c) Cost of Living Adjustments.

11.1(c)(1) Employees eligible to participate in the selective adjustment funds under 11.1(b) may also receive Cost of Living Adjustments to the extent such adjustments become effective under and in accordance with all of the terms, conditions and limitations stated in 11.1(c). The terms, definitions, and limitations stated in 11.1(b) and 11.1(c) also apply to such adjustments. Cost of Living Adjustments would be delivered to each eligible employee separately from those selective adjustment funds derived in 11.1(b). Cost of Living Adjustments would be effective on the dates specified in Table III.

11.1(c)(2) Determination of Cost of Living Adjustments shall be made in reference to the series U.S. city average "Consumer Price Index Urban Wage Earners and Clerical Workers" published by the Bureau of Labor Statistics, U.S. Department of Labor, with the following base period: 1982-1984 = 100, such Index being referred to herein as the BLS Index.

11.1(c)(3) Computations will be made using the three-month average of the BLS Index for July, August and September, 2005 (190.2), as the base period.

11.1(c)(4) During the life of this Agreement, Cost of Living Adjustments shall be computed using the three (3) month average of the BLS Index for the periods specified in Table III and the corresponding BLS Index threshold values expressed as percentage increases over the 2005 base period. The formula will be: percentage of Cost of Living equals fifty (50) percent of the percentage increase in the BLS Index, from the 2005 base period to the BLS Index Comparison Quarter, that exceeds the BLS Index Threshold Percentage, as shown in Table III.

11.1(c)(5) In order to preclude recognition, on more than one effective date, of the same percentage increase in the BLS Index, any recognition on one effective date of a percentage increase over the applicable BLS Index Threshold Percentage will cause that percentage to be set aside and disregarded in ensuing computations. [e.g., if the BLS Index for October, November, December 2005 represented a 10 percent increase over the base period (yielding a 1.0 percent Cost of Living Adjustment effective 3/3/2006), no Cost of Living Adjustment would result for the 3/2/2007 effective date unless, and to the extent, the BLS Index for October, November, December 2006 represented an increase in excess of 22.8 percent over the base period.] BLS Index three-month averages, BLS Index increase percentages, and salary increase percentages will be rounded to the nearest tenth, with five hundredths rounded upward to the nearest tenth.

TABLE III

Effective Date BLS Index BLS Index Threshold

Of Adjustment Comparison Quarter Percentage

3/3/2006 Oct, Nov, Dec 2005 8.0%

3/2/2007 Oct, Nov, Dec 2006 15.3

3/7/2008 Oct, Nov, Dec 2007 22.8

11.1(c)(6) In connection with each of the effective dates in Table III, the computations set forth in 11.1(c)(4) will be made.

11.1(d) For payroll computation purposes, hourly rates of pay will be computed on the basis of 2080 compensable hours each calendar year.

Section 11.2 Classifications. When, pursuant to the provisions of Article 1, the Company classifies an individual in one of the Engineer classifications listed in this Article, it will give consideration to the nature of the work involved and the qualifications of such individual. Inclusion in these classifications shall be limited to those employees who, in the performance of their assigned work, regularly apply engineering disciplines to the research, design, development, test and evaluation of Company products or processes, and who satisfy the definition of "professional employee" as stated in Section 2(12) of the National Labor Relations Act as set forth below:

“(a) any employee engaged in work (i) predominately intellectual and varied in character as opposed to routine mental, manual, mechanical, or physical work; (ii) involving the consistent exercise of discretion and judgment in its performance; (iii) of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time; (iv) requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study in an institution of higher learning or a hospital, as distinguished from a general academic education or from an apprenticeship or from training in the performance of routine mental, manual, or physical processes; or

(b) any employee, who (i) has completed the courses of specialized intellectual instruction and study described in clause (iv) of paragraph (a) and (ii) is performing related work under the supervision of a professional person to qualify himself to become a professional employee as defined in paragraph (a).”

This Section shall not be construed as affecting the Company's unilateral right to select and determine the employees to be included in each classification listed in this Article, which right shall not be subject to Article 3.

Section 11.3 Overtime.

11.3(a) The hourly rate to be paid for scheduled overtime worked by employees will be straight time plus $6.50 per hour.

11.3(b) The term "scheduled overtime" as used in this paragraph will refer to a program of work in excess of 80 compensated hours in a two-week pay period authorized as scheduled overtime by the Company to meet increased workload.

11.3(c) The provisions of 11.3 will not be applicable to the following:

11.3(c)(1) Employees on part-time work schedules.

11.3(c)(2) Time enroute on travel assignments at the request of the Company.

11.3(c)(3) All hours worked in excess of the scheduled hours which are not requested by the Company.

11.3(d) Except as expressly provided in this Agreement, the Company shall have

the right to require employees to record time worked (however categorized) and to administer the overtime and all other aspects of its labor charging system in the manner the Company may determine from time-to-time.

Section 11.4 Temporary Military Leave. Time off with pay up to a maximum of eighty (80) hours each military fiscal year will be granted to an employee who is a member of a reserve component of the Armed Forces and who is absent due to required annual active duty or to temporary special duty. The amount due the employee under 11.4 shall be reduced by the amount received from the government body identified with such active or temporary special duty, for the period of such duty (up to the maximum period mentioned above). Such items as subsistence, uniform, and travel allowance shall not be included in determining pay received from the state or federal government. An employee who elects to work or use available vacation credits while on temporary active duty will not be eligible for military pay differential for that period.

Beginning with the military fiscal year starting October 1, 2000, the following provisions will apply:

Members of a reserve component of a uniformed service ordered to annual active duty are eligible for military differential pay up to a maximum of 80 hours each military fiscal year (October 1 – September 30) or longer if required by applicable laws.

Members of a reserve component of a uniformed service ordered to temporary special duty under Military U.S. Code Title 10 or mobilized by the applicable state agency are eligible for military differential pay up to a maximum of 90 calendar days for each occurrence.

Employees will retain all compensation received from the uniformed services. If this compensation is less than their regular Company pay (base rate plus applicable additives), the Company will provide pay equal to the difference between the employee’s base rate (plus applicable additives) and the compensation received from the uniformed services. This pay will be provided upon receipt of the employee’s leave and earnings statement. Subsistence (does not include quarters), uniform, and travel allowances will not be included in determining military pay.

Section 11.5 Jury Duty and Witness Service. Time off with pay, up to 30 days each calendar year or longer if required by applicable laws, will be granted for absence necessary for an employee to perform jury duty or witness service. The employee will retain all fees received. Time off with pay, unless required by applicable law, will not be granted if the employee:

1. Is subpoenaed as a witness against the Company or its interests.

2. Is subpoenaed as a witness as a direct party in the action.

3. Voluntarily seeks to testify as a witness.

4. Is subpoenaed as a witness in a case arising from or related to the employee’s outside employment or outside business activities.

Deviations to this procedure must be approved by World Headquarters Compensation and Benefits.

Section 11.6 Work Schedules and Shifts.

11.6(a) Each employee working full time shall be assigned one of the following work schedules:

(1) Category 1 Weekday Schedule: 40 hours in a workweek or 80 hours in a pay period, with regular workdays during the Monday through Friday period.

(2) Category 1 Weekend Schedule: 40 hours in a workweek or 80 hours in a pay period, with Saturday and/or Sunday as a regular workday.

(3) Category 2 Weekday Schedule: Less than 40 hours in a workweek or less than 80 hours in a pay period, with regular workdays during the Monday through Friday period.

(4) Category 2 Weekend Schedule: Less than 40 hours in a workweek or less than 80 hours in a pay period with Saturday and/or Sunday as a regular workday.

TABLE IV

WORK SCHEDULES

Schedule Hours	Category One Schedules of 40 hours in a workweek or 80 hours in a pay period		Category Two Schedule with fewer than 40 hours in a workweek or 80 hours in a pay period
Schedule Type	Weekday	Weekend	Weekday	Weekend
Shift	Incentives
First	None	Weekend Rate	Schedule Factor	Weekend Rate Schedule Factor
Second	Shift Rate	Shift Rate Weekend Rate	Shift Rate Schedule Factor	Shift Rate Weekend Rate Schedule Factor
Third	Shift Rate Shift Percentage	Shift Percentage Shift Rate Weekend Rate	Shift Rate Schedule Factor	Shift Rate Weekend Rate Schedule Factor

TABLE V

INCENTIVES DEFINITIONS

Shift Percentage

Maintains “equity”
with 3^rd shift 6.5 hour
schedule

Shift Rate

Working other
than 1^st shift

Weekend Rate

Working on a
Saturday/Sunday
as a regular day

Schedule Factor

Works less than
40/80 hours,
paid for 40/80

23%

$.75 per hour

Sat. or Sun. $1.50

Sat. & Sun. $2.00

Pay period hours/
Scheduled hours

Employees may, at their request and with management’s approval, work any of the above schedules. Management will staff Weekend Schedules with volunteers.

11.6(b) Employees may at their request and with management’s approval, make a temporary modification of their work schedule through movement of hours from one day to another within an 80-hour pay period.

11.6(c) The Company may assign an employee to any shift to meet operational requirements. The following shift identification shall apply:

(1) First shift: Begins at any time from 5:00 a.m. to 11:59 a.m.

(2) Second shift: Begins at any time from 12:00 noon to 7:59 p.m.

(3) Third shift: Begins at any time from 8:00 p.m. to 4:59 a.m.

Section 11.7 Incentives.

11.7(a) Employees assigned to second or third shift shall receive a shift rate incentive of seventy-five cents per hour.

11.7(b) Employees assigned to either Saturday or Sunday as a regular day of work shall receive $1.50 per hour. Employees assigned to both Saturday and Sunday as regular days of work shall receive $2.00 per hour.

11.7(c) Employees assigned to a Category 2 Schedule will receive a schedule factor incentive equivalent to the difference between the hours scheduled and forty hours in a workweek

11.7(d) Employees assigned to a Category 1 Schedule and identified to receive the “shift percentage” shall receive twenty-three percent (23%) of their base rate.

Section 11.8 Salary Adjustment and Promotion Fund

For each review period below, the Company will spend at least one half of one percent (.5%) of the total unit Base Salary Adjustment Funds listed in Table II of this Article as of the computation date of the review period on either adjustments in salary accompanied by a change in level classification (promotion); or adjustments in salary outside of the annual salary review (Out of Sequence Selective Adjustment) or any combination of the two. In the event less than .5% is spent during the review period, the delta between the actual expenditure and .5% will be added to the next salary adjustment fund. These funds will not charge against the Selective Salary Adjustment fund.

The minimum promotional increase will be $3,000.

There will be no selective adjustments or in-line promotions outside the competitive job selection process during the period scheduled by the Company for salary review (typically January 1 through mid-April).

Review Period Start Date Computation Date End Date

One December 5, 2005 February 3, 2006 December 31, 2006

Two January 1, 2007 February 2, 2007 December 31, 2007

Three January 1, 2008 February 1, 2008 December 31, 2008

ARTICLE 12

UNION REPRESENTATIVES

Section 12.1 Accredited Representatives.

12.l(a) The Union shall inform the Company in writing of the names and positions of its officials and, currently, any changes thereto. Only persons so designated to the Company will be accredited as representatives of the Union. Accreditation shall be effective on the third day following the Company's receipt of the notification.

12.1(b) Solicitation of Union membership, collection or checking of dues, or reading of Union newsletters or publications will not be permitted during working time. Distribution of Union newsletters or publications will not be made during working time or in work areas. The Company agrees not to discriminate in any way against any employee for legitimate Union activity, but such activity shall not be carried on during working time except as specifically provided for in this Agreement.

12.1(c) Each employee, before leaving his or her assigned work on Union business, shall have authorization therefore from the Union and shall notify his or her supervisor prior to taking such leave. The Union shall provide to the designated Company Representative oral confirmation of such authorization at least one (1) day prior to such leave and written confirmation immediately thereafter. Such un-worked time, limited to regular working hours, shall be charged to a special charge account number and the Union agrees to reimburse the Company at the employee's regular hourly rate for all such time so spent.

12.1(d) Grievance and Contract Administration.

12.1(d)(1) The Union shall investigate and adjust grievances and perform contract administration, in work areas, exclusively through Executive Board members and Council Representatives, who shall be employees, and, if applicable, a Union Staff Representative.

12.1(d)(2) Each Executive Board Member and Council Representative shall notify and obtain permission from his or her supervisor before leaving the work assignment for the purpose of investigating complaints or claims of grievance on the part of employees in his or her work area. Such permission shall be granted except where the supervisor considers such absence would seriously interfere with the performance of the group of which the representative is a part. Time spent on such approved investigations and discussions shall be considered work time provided such activity does not extend beyond the time that the supervisor considers reasonable under the circumstances. Any Executive Board Member and Council Representative, in the conduct of his or her investigation and before contacting an employee, shall obtain permission of the supervisor of such employee and advise the supervisor of the nature of the complaint or grievance and the estimated time required for the discussion. Such permission shall be granted except where the visit would seriously interfere with the work of the group. Except as provided in 12.1(d) and 10.1(a), all time lost from work due to Union business shall be handled in accordance with 12.1(c) or 12.1(e).

12.1(d)(3) Access by Union Staff Representatives shall be governed by 12.2, below.

12.1(e) Leave of absence of at least thirty (30) days without pay shall be granted for the following reasons:

12.1(e)(1) Full-time employment by the Union or its national organization.

12.1(e)(2) Union business authorized by the Executive Board and approved in writing by the designated Company Representative, which approval shall not be withheld absent legitimate business circumstances.

The Company will reinstate employees on such leaves at not less than his or her former grade level and salary plus any general salary increases which occurred during the period of the leave of absence.

12.1(f) The Company and the Union recognize that each individual within the bargaining unit has a full-time work assignment for the Company and, if Union business impairs performance of such work assignment, the Company and Union agree to make arrangements to prevent such impairment in the future.

12.1(g) Council Representatives.

12.1(g)(1) The Union may designate one (1) Council Representative for each 200 employees, or major fraction thereof, with a minimum of five (5) Council Representatives. In unique circumstances where maintaining such a ratio creates a hardship to the Union, the Company will give due consideration to a written request from the Union for a waiver of the ratio requirement.

12.1(g)(2) The parties will review annually, prior to Council elections, the number of Council Representatives allowed under 12.1(g)(1). The number agreed upon as contractually allowable during these reviews may not be reduced prior to the next such review except by mutual agreement of the parties. Any increases to the number of Representatives must be in accordance with 12.1(g)(1) and is also subject to mutual agreement of the parties.

12.1(g)(3) Each designated Council position can be filled by only one (1) member. In the absence of a Council Representative for any reason, the Union may designate a temporary substitute.

12.1(h) Protection of Union Officials.

12.1(h)(1) Executive Board members and Council Representatives shall not be laid off during their respective terms of office except as described herein.

12.1(h)(1)a Executive Board members and Council Representatives will be given a retention rating while serving during their term of office that will be adjusted to indicate that the employee has the highest retention rating in the applicable Job Family and Skills Management Code. So rated, the Board Members and Council Representatives will be subject to all terms and conditions of Article 8. Once the Board Members and Council Representatives are no longer in office, the retention rating will be readjusted to the otherwise applicable rating.

12.1(h)(1)b Layoff protection does not apply to Executive Board members and Council Representatives who, at the time of election or appointment, have received an active advance notice of potential layoff, unless the Board Member or Council Representative is running for reelection to a consecutive term of office.

12.1(h)(1)c Nothing herein precludes an Executive Board member or Council Representative from requesting a voluntary or accelerated layoff.

12.1(h)(2) In the event management deems it necessary to involuntarily transfer or loan a Council Representative, and other employees then represented by the Council Representative would remain in the same skill code, when practicable the Company will inform the Union of the proposed transfer or loan thirty (30) days prior to its effective date and will discuss with the Union the feasibility of transferring or loaning another employee.

Section 12.2 Union Representatives - Access to Plants. Union Representatives not employed by the Company will be permitted access during working hours to areas in the Company's facilities where employees in the bargaining unit defined in Article 1 are assigned, to the extent government and customer regulations permit. Such access shall be only for the purpose of investigating complaints or claims of grievance on the part of employees or the Union and shall be subject to the following:

12.2(a) The Company shall be required to admit only those Union Representatives who have been agreed to in writing or as may be agreed to by the Company throughout the remainder of this Agreement. Except for visits to the Labor Relations office, Union Representatives shall notify the Labor Relations organization of their contemplated visits.

12.2(b) Union Representatives who are entitled to admittance to the Company facilities shall sign in where required through the Company designated organization at the plant or facility they desire to enter. Upon being admitted, they shall proceed to the organization they wish to visit, contact the supervisor then present, inform him or her of the purpose of their visit and obtain his or her permission prior to contacting any employee in such organization. Such permission will be granted except where there is a substantial reason for delaying the contact due to safety conditions or the fact that a critical operation is in process. Upon leaving the plant or facility they shall sign out where required and return any temporary identification badges which were issued for the purpose of the specific visit.

12.2(c) The Company shall supply identification badges so that each Union Representative can have access during working hours to the areas in which Bargaining Unit employees are assigned. Union Representatives may retain their badges affording such access during the period they are assigned such duties by the Union subject to 12.2(a), 12.2(b), and 12.2(d) of this Agreement.

12.2(d) Union Representatives who fail to comply with provisions of 12.2 shall forfeit their admittance rights.

Section 12.3 Union Representatives - Security Interviews. Each employee has the right, during a Security interview which the employee reasonably believes may result in discipline, to request the presence of his or her Union Representative, if a Union Representative is available. If his or her Union Representative is not available, such employee may request the presence of another immediately available Union Representative. If a Union Representative pursuant to the employee's request is present during such an interview, the Union Representative, in addition to acting as an observer may, after the Security representative has completed his or her questioning of the employee, ask additional questions of the employee in an effort to provide information which is as complete and accurate as possible. The Union Representative shall not obstruct or interfere with the interview.

ARTICLE 13

DEDUCTION OF UNION DUES

Section 13.1 Deduction of Union Dues. The Company agrees to make monthly payroll deductions for the Union's dues upon receipt by the office designated by the Company of a voluntary written assignment covering such deductions on a form mutually agreed to by the Union and the Company. Such assignment is to remain in effect until cancelled by the bargaining unit employee so signing on a Company form or in any other written manner acceptable to the Company. This notification of cancellation must be mailed or delivered separately to the Company and the Union (SPEEA, 973 S. Glendale, Wichita, Ks 67218). The cancellation shall become effective the month following the month in which the notification is received.

The Company will carry over dues authorizations of employees among and between the bargaining units represented by the Union, i.e., where a valid authorization card is on file with the Company for an employee within a bargaining unit and the employee thereafter is transferred directly to one of the other Union bargaining units and the employee has not in the meantime cancelled the authorization.

Section 13.2 Union Dues Tables. In the event the Union desires to change the present method of computing the amount of dues to be deducted, the Union will obtain written Company approval of the proposed method prior to the change becoming effective through payroll deduction.

Section 13.3 Indemnification and Waiver of Claims. The Union expressly agrees to indemnify the Company against any and all employee and governmental claims, demands, suits or other forms of liability that arise out of or by reason of action taken or not taken by the Company for the purposes of complying with this agreement to deduct Union dues.

Both the Company and the Union will utilize due diligence in administering and reviewing, respectively, the dues deductions system. In the event the Union discovers administrative errors in Company administration of the system, the Union will give the Company prompt and timely notice of same, whereupon the Company will endeavor to make reasonable administrative corrections consistent with applicable state and federal law. Respecting Company administration of the system, the Union expressly waives as against the Company any and all claims, demands, suits or other forms of liability that may arise out of or by reason of good faith action taken or not taken by the Company for purposes of complying with this Article.

ARTICLE 14

STRIKES AND LOCKOUTS

Section 14.1 Strikes and Lockouts. The Union agrees that during the term of this Agreement, and regardless of whether an unfair labor practice is alleged (a) there shall be no strike, sit down or walkout and (b) the Union shall not directly or indirectly authorize, encourage or approve any refusal on the part of employees to proceed to the location of normal work assignment where no rare or unusual physical hazard is involved in proceeding to such location. Any employee who violates this clause shall be subject to discipline. The Company agrees that during the term of this Agreement there shall be no lockout of employees covered by this Agreement. Any claim by the Company that the Union has violated this Article or any claim by the Union that the Company has violated this Article shall not be subject to the grievance procedure or arbitration provisions of this Agreement and the Company or the Union shall have the right to submit such claim to the courts.

ARTICLE 15

VOLUNTARY INVESTMENT PLAN

Section 15.1 Continuation of Plan. Subject to the continuing approval of the Commissioner of Internal Revenue and of other cognizant governmental authorities, as more particularly hereinafter specified, and to the provisions of 15.5, a Voluntary Investment Plan (hereinafter call the Plan) in the form as now in effect as to the employees within the units to which this Agreement relates shall continue to be effective while this Agreement is in effect as to such employees in accordance with and subject to the terms, conditions and limitations of the Plan.

Section 15.2 Approval of Plan. Approval of the Plan by the Commissioner of Internal Revenue as referred to in 15.1 means a continuing approval sufficient to establish that the Plan and related trust or trusts are at all times qualified and exempt from income tax under Section 401(a), Section 401(k) and other applicable provisions of the Internal Revenue Code of 1986, and that contributions made by the Company under the Plan are deductible for income tax purposes in accordance with law. The cognizant governmental authorities referred to in 15.1 include, without limitation, the Department of Labor and the Securities and Exchange Commission, and their approval means their confirmation with respect to any matter within their regulatory authority that the Plan does not conflict with applicable law.

Section 15.3 Continuation Beyond Agreement. The Company shall not be precluded from continuing the Plan in effect as to employees within the units to which this Agreement relates after expiration or termination of this Agreement, subject to the terms, conditions, and limitations of the Plan.

Section 15.4 Plan Updates. The parties agree that innovations in technology and administrative practices can give savings plan participants better access to information about their benefits, increased investment options, timely on-line transaction capability and enhanced administrative features. Accordingly, when the company identifies administrative services that in its estimation reflect industry best practices, the Employee Benefit Plans Committee has discretion to adopt these changes to the Savings Plan. The Company will notify the Union in advance of implementation of any changes adopted by the Employee Benefit Plans Committee.

Section 15.5 Changes to the Current Plan. Subject to action by the Company's Board of Directors (or its delegate) and to the approvals specified in 15.2, all provisions of the Plan applicable to employees covered by this Agreement are to remain unchanged with the exception of the following amendment:

15.5(a) Effective January 1, 2006, the Company matching contribution shall be equal to 75 percent of the first 8 percent of the employee’s base pay.

Section 15.6 Required Plan Amendments. The Company reserves the right to amend the Plan to satisfy all requirements of Section 401(a), Section 401(k) or any other applicable provision of the Internal Revenue Code of 1986.

Section 15.7 Participant Elective Contributions Not Applicable for Other Purposes. It is acknowledged that the election of a Member to convert a portion of his or her base pay under the terms of the Plan will be effective for purposes of this Plan and will reduce the Member's compensation insofar as certain payroll taxes may be applicable. However, for all other employment related purposes, including all of the Member's rights and privileges under this labor agreement, his or her base pay or compensation will be considered as though no election had been made.

ARTICLE 16
GROUP BENEFITS

Section 16.1 Type of Group Benefits Package for Employees on the Active Payroll. The Company will continue until June 30, 2006, the Group Benefits Package agreed to in the collective bargaining agreement of December 6, 2002, between the Company and the Union. Thereafter, the Company will provide the life insurance benefits, accidental death and dismemberment benefits, short term disability benefits, medical benefits , and dental benefits for eligible employees and medical benefits and dental benefits for covered dependents of eligible employees as summarized in the document entitled Attachment A, effective July 1, 2006, or as otherwise stated, as the Group Benefits Package. The Company will provide access to the following plans on an optional basis: Voluntary Personal Accident Plan, Long Term Disability Plan, and Health Care and Dependent Care Spending Account Plan.

Section 16.2 Cost of the Group Benefits Package for Employees on the Active Payroll.

16.2(a) Life, Accidental Death and Dismemberment, and Short Term Disability Benefits. The Company will pay the full cost of the Life Insurance, Accidental Death and Dismemberment, and Short Term Disability Plans for eligible employees.

16.2(b) Medical Benefits.

16.2(b)(1) The Company and the Union are committed to controlling health care costs through joint efforts under the Joint Benefits Discussion Group. In support of these efforts, the Company will continue to share the cost of medical coverage with employees at the current contribution levels .

16.2(b)(2) Effective July 1, 2004, in Kansas where employees may choose between coordinated care plans or the Traditional Medical Plan, the Company will pay the full cost of the lowest-cost plan in the applicable region for eligible employees and dependents. For those employees and dependents whose coverage is with another plan, employees will contribute on a pretax basis 12 percent of the cost of the plan the employee chooses.

16.2(b)(3) For employees who live in areas where coordinated care plans are not available, the Company will pay the full cost of the Traditional Medical Plan.

16.2(b)(4) The employee is required to contribute an additional $100 each month for medical coverage under the Group Benefits Package to enroll a spouse or same-gender domestic partner if the spouse or same-gender domestic partner is eligible for medical coverage under another employer-sponsored plan and waives such coverage. This $100 contribution will not be required for a spouse or same-gender domestic partner who waived coverage under another employer-sponsored plan prior to eligibility for medical coverage under the Group Benefits Package, provided the spouse or same-gender domestic partner enrolls at the other plan's next enrollment period or, if earlier, at an enrollment date allowed by the other plan.

16.2(b)(5) The Company will pay the full cost of the TRICARE Supplement Plan for retired military employees and their eligible dependents. Election of the TRICARE Supplement Plan is in lieu of other medical plans that are available in the employee’s region.

16.2(c) Dental Benefits. The Company will pay the full cost of the Preferred Dental Plan, the Scheduled Dental Plan or the Prepaid Dental Plan.

Section 16.3 Type of Retiree Medical Plan. The Company will continue until June 30, 2006, the Retiree Medical Plan agreed to in the collective bargaining agreement of December 6, 2002, between the Company and the Union. Thereafter, for employees who are hired prior to January 1, 2007 and covered on or after January 1, 2007, the Company will provide for the duration of this Agreement the medical benefits for eligible retired employees and for covered dependents of eligible retired employees as summarized in the document entitled Attachment B, effective July 1, 2006, or on such later date when specifically stated therein and subject to all of the terms and conditions contained in or referred to in such Attachment B. The Company will also provide employees hired prior to January 1, 2007, access to the Medicare Supplement Plan.

Section 16.4 Cost of the Retiree Medical Plan. The Company will share the cost of medical coverage for current and future eligible retired employees, as follows:

16.4(a) Effective July 1, 2003, Company and retired employee contributions will be as follows:

For any coordinated care/health maintenance organization plan coverage or the TRICARE Supplement Plan, retired employees will contribute $10 for a retired employee only, $20 for a retired employee and spouse, $20 for a retired employee and child(ren), or $30 for a retired employee and family. For Traditional Medical Plan coverage, retired employees will contribute $20 for a retired employee only, $40 for a retired employee and spouse, $40 for a retired employee and child(ren), or $60 for a retired employee and family. The Company will pay the cost of each plan in excess of the amount contributed by retired employees.

16.4(b) For employees who are hired from January 1, 1993 through December 30, 2006, the Company contributions are limited to three and one-third percent of the cost of the coordinated care/health maintenance organization plan, Traditional Medical Plan, or TRICARE Supplement Plan the retired employee chooses per year of service for the duration of the Agreement. Retired employees pay the difference (the cost of the plan minus the Company contributions). However, all covered retired employees must make contributions not less than the amount specified in 16.4(a).

16.4(c) The retired employee is required to contribute an additional $100 each month to enroll a spouse in the Retiree Medical Plan if the spouse is eligible for medical coverage under another employer-sponsored plan as an active employee and waives such coverage.

16.4(d) Company contributions will be made only for an eligible retired employee who is receiving benefits or is deferring receipt of benefit payments from The Boeing Company Employee Retirement Plan provided the employee meets the eligibility requirements of the Retiree Medical Plan and either authorizes deduction of the balance of plan rates, if any, from his or her retirement check or agrees to make timely self-payments for such coverage. Such Company contribution will continue for an eligible retired employee or eligible spouse reduced by retired employee contributions required under 16.4(a) and 16.4(b) and the spouse contribution in 16.4(c), if any, until such eligible person attains 65 years of age or is earlier eligible for Medicare, and for a dependent child, until such dependent child is no longer an eligible dependent or earlier qualifies for Medicare.

Section 16.5 Details and Method of Coverage. The benefits summarized in the Group Benefits Package and the Retiree Medical Plan shall be procured by the Company under contracts and/or administrative agreements with insurance companies, health care contractors, or administrative agents which will be in the form customarily written by such carriers and administrative agents, and the Group Benefits Package and Retiree Medical Plan shall be subject to the terms and conditions of such contracts and/or administrative agreements, consistent with the summary in the Group Benefits Package or Retiree Medical Plan.

Such contracts and/or administrative agreements will require the administrative agents to develop various programs and procedures designed to contain costs based on those portions of the Group Benefits Package and the Retiree Medical Plan which contain the requirement that charges are covered only on the basis of medical necessity. Such cost containment programs or procedures may be utilized to determine the medical necessity of the treatment itself, the appropriateness of the services provided, the place of treatment or the duration of treatment. The administrative agents and the Company will announce each such program or procedure before it is required or available to the affected employees or retirees. Any such cost containment program or procedure will not operate to reduce or deny the benefit properly due under the Plans to any covered person or to shift the costs covered under the Plans to the covered person.

The failure of an insurance company, health care contractor , or administrative agent to provide any of the benefits for which it has contracted shall result in no liability to the Company, nor shall such failure be considered a breach by the Company of the obligations that it has undertaken by this Agreement. However, in the event of any such failure, the Company shall immediately evaluate the need to replace the services of such insurance company, health care contractor, or administrative agent.

Section 16.6 Administration. The Group Benefits Package and the Retiree Medical Plan shall be administered by the insurance companies, health care contractors, or administrative agents with whom the Company enters into contractual relationships for the purpose of providing and/or administering the coverage contemplated by the Group Benefits Package or the Retiree Medical Plan and no question or issue arising under the administration of such Group Benefits Package or the Retiree Medical Plan or the contracts and/or administrative agreements identified therewith shall be subject to the grievance and arbitration procedures of Article 3 of this Agreement.

Section 16.7 Copies of Policies to Be Furnished to Union. Copies of the policies, contracts, and administrative agreements executed pursuant to this Article 16 shall be furnished to the Union and the coverages and benefits indicated in the Group Benefits Package or the Retiree Medical Plan, the rights of eligible employees in respect of such coverages, and the settlement of all claims arising out of such coverages shall be in accordance with the provisions, terms , and rules set forth in such contracts.

Section 16.8 Federal or State Packages. If during the term of this Agreement there is mandated by federal or state government a program that affords to employees and/or retirees covered by this Agreement similar benefits (such as but not limited to medical benefits and dental benefits) to those that are afforded by this Agreement, benefits afforded by this Agreement will be replaced by such federal or state program. The Company will comply with the provisions for the furnishing of such program to the extent required by law. No question or issue regarding the level of benefits under the state or federal program will be subject to the grievance and arbitration procedures of Article 3 of this Agreement.

ARTICLE 17

RETIREMENT PLAN

Section 17.1 Continuation of Plan. Subject to the continuing approval of the Commissioner of Internal Revenue and of other cognizant governmental authorities, as more particularly hereinafter specified, and to the provisions of 17.5, a Retirement Plan (hereinafter called the Plan) in the form now in effect as to the employees within the units to which this Agreement relates shall continue to be effective while this Agreement is in effect as to such employees in accordance with and subject to the terms, conditions, and limitations of the Plan.

Section 17.2 Approval of Plan. Approval of the Plan by the Commissioner of Internal Revenue as referred to in 17.1 means a continuing approval sufficient to establish that the Plan and related trust(s) are at all times qualified and exempt from income tax under Section 401(a) and other applicable provisions of the Internal Revenue Code of 1986, and that contributions made by the Company under the Plan are deductible for income tax purposes in accordance with law. The cognizant governmental authorities referred to in 17.1 include, without limitation, the Department of Labor, the Pension Benefit Guaranty Corporation and the Securities and Exchange Commission, and their approval means their confirmation with respect to any matter within their regulatory authority that the Plan does not conflict with applicable law.

Section 17.3 Continuation Beyond Agreement. The Company shall not be precluded from continuing the Plan in effect as to employees within the units to which this Agreement relates after expiration or termination of this Agreement, subject to the terms, conditions, and limitations of the Plan.

Section 17.4 Grievances as to the Plan. Only questions concerning the amount of Credited Service under the Plan that an employee has accumulated by reason of employment after the effective date of the Plan shall be subject to the grievance and arbitration procedure of Article 3.

Section 17.5 Changes to the Current Plan. Subject to action by the Company's Board of Directors (or its delegate) and to the approvals specified in 17.2, as well as any changes required by applicable law, all provisions of The Boeing Company Employee Retirement Plan applicable to employees covered by this agreement are to remain unchanged with the exception of the following amendments:

17.5(a) Basic Benefit. The Basic benefit will be increased to $70 per month for all years of Credited Service for Employees on the active Payroll of the Company on or after January 1, 2006 (including those who retire from the employ of the Company on January 1,2006).

Section 17.6 Administration of the Retirement Plan. The Company shall have the right to unilaterally make any changes in actuarial assumptions and funding methods, provided such changes are determined by the Plan’s enrolled actuary to be reasonable in the aggregate. The Company shall be entitled to unilaterally adopt such amendments to the Plan as may be required in order to obtain any approval referred to in 17.1 and described in 17.2 of the Agreement.

ARTICLE 18

NON-DISCRIMINATION

Section 18.1 Non-Discrimination. All terms and conditions of employment included in this Agreement shall be administered and applied without regard to race, color, religion, national origin, status as a disabled or Viet Nam era veteran, age, sex, marital status, sexual orientation or the presence of a disability except in those instances where age, sex or the absence of a disability may constitute a bona fide occupational qualification.

Administration and application of the Agreement that is not in contravention of federal or state law shall not be considered discrimination under this Article. The parties recognize that the Company is required to comply with applicable Federal and State disability discrimination laws, and agree that the Company may take actions necessary to stay in compliance.

Section 18.2 Non-Discrimination Grievances. Notwithstanding any other provision of Article 3, a grievance alleging a violation of this Article 18 shall be subject to the grievance and arbitration procedure of Article 3 only if it is filed on behalf of and pertains to a single employee. Class grievances under Article 18 shall not be subject to the grievance and arbitration procedure under this Agreement.

ARTICLE 19

SEPARABILITY

Section 19.1 Separability. Should any part hereof or any provision herein contained be rendered or declared invalid by reason of any existing or subsequently enacted legislation or by any decree by a court of competent jurisdiction, such invalidation of such part or portion of this Agreement shall not invalidate the remaining portions hereof and they shall remain in full force and effect.

ARTICLE 20

ED WELLS PARTNERSHIP

A JOINT SPEEA/BOEING INITIATIVE

Section 20.1 Mission. The Company, the Union, and SPEEA-represented employees agree working together for their mutual benefit helps maintain competitiveness and technical excellence and creates a model for union/management collaboration to make Boeing a workplace of choice.

The Ed Wells Partnership develops and offers a suite of products and services to the technical workforce for the benefit of all stakeholders.

The Ed Wells Partnership will seek to develop and implement initiatives approved by the Joint Policy Board to achieve the following goals: Effective partnership; a skilled, motivated, productive and stable workforce; employability; lifelong learning; knowledge retention and sharing; and career development.

Section 20.2 Joint Policy Board. A Joint Policy Board will be established, comprised of an equal number of representatives of each party. The Board shall have responsibility for (1) providing the overall direction of the Ed Wells Partnership; (2) acting on the recommendations of the Joint Administrative Staff and providing oversight to the staff; and (3) determining the expenditure of funds provided to cover Ed Wells Partnership activities. The Board shall meet as required, but in no event less than quarterly.

Section 20.3 Joint Administrative Staff. The Company and the Union will appoint co-directors, who will assume responsibility for directing the Ed Wells Partnership activities. A Joint Administrative Staff shall be authorized by the Joint Policy Board and selected and managed by the co-directors within the budget as authorized by the Joint Policy Board.

Section 20.4 Meetings.

20.4(a) In order to meet its goals and aims, the Union must be able to speak confidently and authoritatively for its bargaining unit membership. Therefore, time will be allowed during the first week of employment for new hires into the bargaining unit to meet with a Union representative and learn about the Union’s role in the Ed Wells Partnership, and by allowing regular quarterly meetings (up to two hours) of all Council Representative on work time to discuss the issues facing the Partnership. The Joint Policy Board may authorize additional Council Representative participation in approved activities.

20.4(b) To ensure open communication, Union leaders will meet periodically with Company leaders of engineering and technical functions for the geographical areas covered by this Agreement. The purpose of such meetings will be to review the activities of the Ed Wells Partnership and its progress toward meeting the goals identified in 20.1, above. Additionally, the parties agree that high level meetings for the geographical areas covered by this Agreement will be held no less than twice annually to review the activities of the Ed Wells Partnership. Either party may suggest meetings with the Company’s Office of the Chairman or others as appropriate and mutually agreed-upon.

Section 20.5 Funding. Each party shall be responsible for the salaries of its representatives on the Joint Policy Board; expenses of Board members may be covered by the fund where the expense was authorized by the Board (whenever possible, such expenses will be authorized in advance of expenditure). The Company will commit a minimum of $6.0 million (covering all Boeing SPEEA represented bargaining units participating in the Ed Wells Partnership, including the Wichita Engineering Unit) in each year in support of the Ed Wells Partnership for the activities directed by the Joint Policy Board, to include facilities, administration, publicity, equipment, materials, and such other expenses as may be agreed to by the Joint Policy Board. In addition, work statement changes for the mutual benefit of the technical workforce and the Company may be allocated additional funds as deemed necessary by the Joint Policy Board, subject to approval of appropriate Company stakeholders.

Section 20.6 Retention Ratings and Salary Adjustments. For a maximum of two years of employment, bargaining unit employees appointed to work at the Ed Wells Partnership will (a) retain the same retention rating held prior to entering the Ed Wells Partnership, unless management assigns the employee a higher retention rating, and (b) receive annual salary increases that are, at a minimum, equivalent to the negotiated salary pool for the period of such employment.

Section 20.7 Disputes. Disputes concerning any aspect of this Article shall be referred to the Joint Policy Board for resolution. No matter involving the Ed Wells Partnership, or any provision of this Article will be subject to the grievance and arbitration procedure of Article 3.

ARTICLE 21

LAYOFF BENEFITS

Section 21.1 Establishment of Plan. The Company will establish a Layoff Benefit Plan to provide for lump sum or income continuation benefits as set forth in this Article. Such Plan will apply to employees who are laid off with an effective date on or after December 2, 1999.

Section 21.2 Eligibility. All bargaining unit employees who have at least one (1) year of Company service and who are involuntarily laid off from the Company (including such employees who accelerate their layoff dates and employees laid off because of declining an offer for less than equivalent employment as defined by Company policy) are eligible to receive the benefit described in 21.3; provided, however, the following employees shall not be eligible for the benefit: employees who volunteer for layoff; employees who upon their layoff become employed by a subsidiary or affiliate of the Company; employees who are laid off from the Company because of a merger, sale or similar transfer of assets and are offered employment with the new employer; employees who are laid off because of an act of God, natural disaster or national emergency; employees who are laid off because of a strike, picketing of the Company's premises, work stoppage or any similar action which would interrupt or interfere with any operation of the Company; and employees who terminate employment for any reason other than layoff, including, but not limited to, resignation, dismissal, retirement, death, or leave of absence.

Section 21.3 Amount and Payment of Benefit. An eligible employee's total lump sum or income continuation benefit shall equal one (1) week of pay based on the employee’s base salary at the time of layoff (but excluding any shift differentials or other premiums) for each full year of Company service as of the employee's layoff date, subject to a maximum benefit of twenty-six (26) weeks of pay. Eligible employees may elect either of the following:

21.3(a) Benefits will be paid as a lump sum following the effective date of layoff. Employees who elect this option will have first consideration recall rights under Article 8 canceled.

21.3(a)(1) Income continuation benefits will be paid in eighty (80) hour increments, subject to an employee's total benefit, on regular paydays beginning with the second payday following the effective date of layoff. Income continuation benefits shall immediately cease upon the earlier of any of the following events: exhaustion of the employee's total income continuation benefit; re-employment with the Company or any of its subsidiaries or affiliates; failure to accept a formal offer of recall from layoff within ten (10) workdays after it is extended or by such later date as may be stipulated by the Company; failure to report to work on the date designated by the Company; or change in the employee's employment status from layoff to resignation, dismissal, retirement, death, or leave of absence.

21.3(a)(2) Subject to continuation of the Plan, no employee shall be paid lump sum or income continuation benefits more than once during any three (3) year period; provided, however, if an employee is re-employed by the Company before payment of the employee's total income continuation benefit and is subsequently laid off in such three (3) year period under conditions which make the employee eligible for a benefit, any unused benefit will be payable to the employee under the procedures established by this Article.

Section 21.4 Benefit Not Applicable for Other Purposes. Periods for which an employee receives income continuation benefits shall not be considered as compensation or service under any employee benefit plan or program and shall not be counted toward Company service. Benefits under this Article may not be deferred into the Voluntary Investment Plan.

Section 21.5 Continuation of Medical and Dental Coverage. In the event of layoff, medical and dental coverage for employees and dependents will continue until the employee is covered by any other group medical or dental plan either as an employee or as a dependent, but in no event beyond three months after the date of layoff. However, if the layoff occurs during or after a leave of absence, the maximum total period of continued coverage is thirty (30) months in the case of medical leave or twenty-four (24) months in the case of non-medical leave, measured from the end of the month in which the leave of absence began, irrespective of the date of termination. Required contributions, if any, must be paid during any period of such continuation of coverage.

ARTICLE 22

JOB CLASSIFICATIONS

Section 22.1 Authorized Job Classifications. Each job classification listed in Article 11, Table I shall, for the period of this Agreement, remain in effect, subject to revisions as provided in 22.4, unless made inactive by mutual agreement of the Union and the Company.

Section 22.2 Definition of Job Classification. A job classification is defined by occupation, job family, and level codes as identified within the Company’s Salaried Job Classification (SJC) system.

Section 22.3 Application and Intent of Job Descriptions.

22.3(a) Occupations are the broadest categories of work. Job families describe the organization of tasks. Level guides identify the various levels of responsibility within the job family. Each job classification is linked to Skills Management Codes (SMCs) within the SJC system. SMCs identify unique knowledge, skills, abilities, and environments within the job family.

22.3(b) Each occupation code, job family code, level guide, and SMC is defined by a unique description as identified within the SJC system.

22.3(c) An employee may perform some of the work of a higher level and/or some of the work of a lower level in the performance of the work assignment. Any work assignment may include:

22.3(c)(1) Teaching, instructing, leading or providing assistance to others.

22.3(c)(2) The use of equipment to facilitate the work assignment.

22.3(c)(3) The submission of completed work or any portion thereof for checking or approval.

22.3(c)(4) The reporting of any work impairment such as errors in materials, processes, equipment, etc.

Section 22.4 New or Revised Job Family Level Guides, and SMC Descriptions. If, after the effective date of this Agreement, the Company or the Union determines that no existing job family level guide, or SMC description appropriately covers a new or reorganized work assignment, either party may initiate a request for evaluation and review through the established SJC Maintenance Process. The Union will participate as a voting member on the Company’s SJC team in the identification, evaluation, and review of all proposed changes to job family descriptions and level guides for SJC job classifications listed in Article 11, Table I and their associated SMC descriptions. The Company will implement changes (1) by revising or deleting an existing job family level guide, and/or SMC description; or (2) by developing a new job classification code with supporting descriptions, which will be incorporated into Article 11, Table I through the issuance of an installation memo; or (3) the Company will establish a temporary job classification or SMC in accordance with 22.4(b).

22.4(a) Union Challenges of Level(s) for New or Revised Job Level Guide. In the event the Union disagrees with the number or description of level(s) of a new or revised job level guide, it must, within thirty (30) calendar days from the date the new or revised level guide is forwarded by the Company, challenge the level, setting forth in writing the reasons why the Union disagrees. Otherwise, the level guide as determined by the Company will stand.

22.4(a)(1) If the Union challenges a new or revised level guide, the Wichita Director of Compensation and Benefits and his/her appointees, and Union representatives shall meet promptly at a mutually agreed time for the purpose of attempting to reach agreement as to the appropriate level guide. Disagreements between the Union and the Company shall be resolved exclusively on the basis of the level guide assigned as a result of the Company’s application of 22.4. A Union challenge shall in no way prevent or delay the Company from assigning personnel to the job classification involved in the challenge.

22.4(a)(2) If the Union challenges a new or revised level as submitted by the Company, and it is determined that the level is not correct, the Company will pay each employee involved at a rate that is within the range of the corrected level, for the time in which the employee has performed the duties of the corrected level.

22.4(b) Temporary Job Family, Level, or SMC. A temporary job family, level, or SMC may be established by the Company for new or revised work for which no current job family, level, or SMC is applicable and which requires a period of time to stabilize job duties. This period will not exceed ninety (90) days unless extended by mutual agreement. The Union will be notified of the effective date and approximate duration. Employees will be assigned to such new work at not less than their current levels until the job family and level is made permanent. If the temporary job family code or level is made permanent at a higher level than the levels of the assigned employees, these employees will be paid within the range of the higher level for the time assigned to the work covered by the permanent job family or level. Effective upon and after the Company’s determination that a temporary job family and/or level has become permanent, the provisions of 22.4 shall apply.

Section 22.5 Individual Employee’s Job Classifications.

22.5(a) It is a mutual objective of the Union and the Company that the job classification of each employee be an accurate and timely reflection of the work assigned and the demonstrated capabilities of the employee. However, the Company shall retain the exclusive right to reassign employees as necessary to meet work requirements, and employees shall comply with such reassignments notwithstanding the employees’ job classifications of record at the time. If the Company determines, by reference to the applicable job family description, that an employee’s level is higher than is appropriate for the work to which the employee is assigned, the Company may permit the employee to continue in the same assignment without reclassification for whatever period of time the Company elects, or the Company may add to the employee’s current assignment or reassign the employee to other work for which the employee’s level is appropriate.

22.5(b) Because an employee may be assigned work at a level lower than the employee’s current level without being reclassified to the lower level, the levels of work assignments of individuals other than the employee shall not be introduced or regarded as pertinent evidence for the purposes of 3.6(a), unless by mutual agreement of the parties.

22.5(c) Employees may be reclassified to a higher level irrespective of their assigned retention index.

22.5(d) Challenges Concerning Individual Employee’s Job Family, Level, or SMC. An individual employee may request a review of his or her job classification or level based on the contention the work assigned by the Company differs from the job classification or SMC to the extent and in such a manner as to warrant reclassifying the employee to a different existing job classification or SMC. Employees will attempt to resolve their classification first by discussion with first-line management. In the absence of a resolution mutually agreeable to both management and the employee, the following steps will be utilized in the review process:

22.5(d)(1) If the employee contends that a classification or level issue still exists, he or she along with his or her Union Representative will notify the Totem and/or Skill Team Manager to request a review.

22.5(d)(2) The Totem and/or Skill Team Manager will meet with the employee and the Union Representative to fully discuss the employee’s issue in an effort to reach mutual resolution.

22.5(d)(3) If the employee and Union Representative do not agree with the Totem and/or Skill Team decision, the Totem and/or Skill Team Manager, the appropriate Human Resources Representative and the Union Representative will meet to resolve the matter by a majority decision.

22.5(d)(4) Short-term variations will from time to time occur in the amounts and types of work assigned to any activity, project, program or organization. Such variations, including, but not limited to, work assignment adjustments made necessary by vacations and other employee absences, are recognized by the Union and the Company as conditions which justify the short-term assignment of employees to work that is different than the employees’ current job family classification or level. Accordingly, individual job family classification or level grievances acceptable under the provisions of this Article 22 are limited to assignments of not less than thirty (30) continuous calendar days.

22.5(d)(5) If subsequent to the processing of a grievance in accordance with 22.5(d) and 22.5(d)(1), it is determined by the Company that an existing higher level is appropriate, the Company will classify the employee and pay the employee at a rate that is within the range of the appropriate level for the time the employee has performed the work at the higher level subsequent to the date on which the written grievance was received by the Company and within thirty (30) calendar days prior to that date.

Section 22.6 Reclassification to a Lower Level. The Company may in its discretion alter employee work assignments or reassign employees to lower level bargaining unit work for which the Company deems they are qualified. In these cases, the employee shall retain their SJC level and will not be reclassified to a lower level. Reclassifications to lower levels may be made as a result of an employee’s documented unacceptable performance.

Section 22.7 The provisions of 22.4, 22.5 and 22.6 are not subject to the grievance and arbitration procedures of Article 3.

ARTICLE 23

DURATION

Section 23.1 Duration.

23.1(a) This Agreement shall become effective December 6, 2005, and shall remain in full force and effect until the close of December 5, 2008, and shall be automatically renewed for consecutive periods of one (1) year thereafter, unless either party shall notify the other in writing, at least sixty (60) days and not more than ninety (90) days prior to December 5 of any calendar year, beginning with 2008, of its desire either (1) to amend this Agreement, or (2) to terminate this Agreement as of a date stated in such notice to terminate, which date shall be subsequent to such December 5, provided that, in any event, this Agreement shall expire at the close of December 5, 2013.

23.1(b) If either a notice to amend or a notice to terminate is timely given pursuant to 23.1(a), the parties agree to meet within thirty (30) days thereafter for the purpose of negotiating an amendment to this Agreement or a new contract.

23.1(c) If a notice to amend is timely given pursuant to 23.1(a)(1), either party may at any time thereafter notify the other in writing of its desire to terminate this Agreement as of a date stated in such notice to terminate, which date shall be subsequent to December 5 of the year in which such notice to amend is timely given, and at least sixty (60) days subsequent to the giving of such notice to terminate.

23.1(d) This Agreement, and any amendment thereof pursuant to this Article, shall continue in full force and effect until either (1) a new contract superseding it is consummated; (2) it is terminated by a notice to terminate timely given pursuant to 23.1(a)(2), or 23.1(c) hereof; or (3) it expires, whichever shall first occur.

Attachment 1

LETTER OF UNDERSTANDING
RELATING TO SEX CRIMES

The Company and the Union recognize (1) the growing awareness and abhorrence in our society of sex crimes victimizing children, and (2) the deleterious effect the presence in the workforce of perpetrators of such crimes would have on the efficiency and morale of professional/engineering employees of the Company and on the reputation of the Company and its products. The Company and Union therefore agree as follows:

1. Any discipline or discharge of an employee who has committed a sex crime victimizing a child or children shall be deemed to be for "just cause" and shall not be subject to the grievance and arbitration provisions of the parties' Agreement or to any other challenge or proceeding by the Union.

2. For purposes of this Letter of Understanding, the term "sex crime victimizing a child or children" includes rape, sexual assault, statutory rape, incest, child molestation, child pornography, public indecency, indecent exposure, indecent liberties, communications with a minor for immoral purposes, promoting prostitution, and similar crimes as defined in the jurisdiction in which the offense is committed, where the victim of said crime(s) is under the age of 18 years at the time of the commission of the crime(s). An employee shall be considered to have committed such a crime if the employee is convicted of the crime, or if the employee pleads guilty or nolo contendere to the crime, or if the employee enters a special supervision program pursuant to a deferred prosecution arrangement relating to the crime.

3. The provisions of this Letter of Understanding shall not be deemed to define "just cause" or to affect the grievance and arbitration provisions in any other respect whatsoever, nor shall it be introduced or relied upon in any arbitration or other proceeding involving the parties which does not deal with the discipline or discharge of an employee who has committed a sex crime victimizing a child or children.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 2

LETTER OF UNDERSTANDING
RELATING TO CHILD/ELDER CARE PROGRAM

The Company will continue a comprehensive child and elder care program. The program will consist of referrals of employees to licensed care facilities, consultation with employees to determine individual needs, and providing educational materials and programs.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 3

LETTER OF UNDERSTANDING RELATING TO OVERTIME

It is understood that the authority of the Company to require overtime is necessary for business planning and meeting operational objectives. The parties recognize, however, that the exercise of this authority may affect employee productivity.

Accordingly, the Company and the Union agree, subject to the exceptions noted below, that no employee shall normally be required, and need not be permitted, to work more than 144 overtime hours in any budget quarter, more than 576 overtime hours in a twelve (12) month period, more than two (2) weekends consecutively without the next weekend off, or more than eight (8) hours on a Saturday or a Sunday or other regularly-scheduled day of rest. Overtime work on either a Saturday and a Sunday, or a Saturday or a Sunday, shall constitute a weekend worked. All overtime on a holiday as set forth in Section 7.1 of the Agreement or on the weekend which immediately precedes a Monday holiday or immediately follows a Friday holiday shall be voluntary for those on weekday work schedules.

All overtime in excess of the above limits shall be strictly on a voluntary basis and no employee shall suffer retribution for his refusal or failure to volunteer. An employee may be required to perform overtime work beyond the above limitations where necessary for delivery of Company products to a customer, where necessary for the timely submission of proposals where related to customer-requested emergency repair of delivered products, or for Government DX or Government DO rated orders.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 4

LETTER OF UNDERSTANDING

RELATING TO DRUG AND ALCOHOL FREE WORKPLACE PROGRAM

The Company and the Union enter this Letter of Understanding to address the serious societal problem of drug and alcohol use and abuse. The Company and the Union affirm their joint objective to achieve a drug and alcohol free workplace while complying with applicable government laws and regulations. To that end, the parties agree to a drug and alcohol free workplace program with these principal components: a comprehensive employee assistance program emphasizing rehabilitation; employee awareness; training; and testing.

A. Employee Assistance Program

1. The Company will continue to provide a comprehensive Employee Assistance Program (EAP). One of the major purposes of the program is to rehabilitate employees experiencing drug and alcohol problems through a professional assessment and referral service with follow-up counseling. The service will be provided by trained, professional counselors employed by an EAP company under contract with Boeing.

2. Voluntary participation in the EAP may occur through referral (self, union, management, others). These employees will have their treatment monitored by the EAP and be subject to follow-up counseling and testing by the treatment provider.

3. Mandatory participation in the EAP will be offered as an alternative to discharge to employees who have (a) had a discharge for attendance or performance problems held in abeyance, or (b) a verified positive drug or alcohol test administered by the Company. Mandatory participants will be subject to the terms and conditions of the "Compliance Notification Memo" (attached hereto). Violation of any of the terms of the Compliance Notification Memo normally will result in discharge from employment.

B. Employee Awareness

1. The Company will continue its drug and alcohol awareness program designed to keep employees informed of the drug and alcohol free workplace program, including opportunities for rehabilitation through the EAP, the dangers of drug and alcohol use and abuse, and drug and alcohol testing.

2. The awareness program will disseminate the information through pamphlets, news articles, mail outs, video tapes, the Boeing Web, and other media.

C. Training

1. The Company will maintain a drug- and alcohol-free workplace training program for its managers, medical professionals, and other selected employees. The training will be designed to:

a. Identify the extent and impact of drug and alcohol use.

b. Describe the principal federal legislation and regulations for a drug and alcohol free workplace.

c. Identify the Company rules pertaining to drugs and alcohol and the appropriate action to be taken upon violation.

d. Identify the principal components of the Drug and Alcohol Free Workplace Program (rehabilitation, awareness, training, and testing).

e. Explain the Employee Assistance Program, opportunities for rehabilitation, and the consequences of rehabilitation failure.

f. Explain the facts of drug and alcohol testing accuracy and procedures, such as the chain of custody.

g. Enable participants to effectively apply observed and documented performance criteria and appropriate procedures in referring the employee to the Employee Assistance Program.

h. Enable participants to effectively apply observed and documented criteria typically indicative of drug or alcohol use and apply appropriate reasonable suspicion testing guidelines in referring employees to Medical for medical observation and possible testing.

i. Enable participants to apply appropriate post-accident testing guidelines in referring employees for testing.

2. The training will not be designed to teach participants to be substance abuse experts or professional counselors.

3. Union selected individuals, including but not limited to the Union's Executive Board, Council Representatives, and staff members, will be invited to participate in training. Once a year the Union will provide the Company with a list of those persons to be trained.

4. Whenever practicable, Union selected individuals and Company managers will be trained together.

D. Drug and Alcohol Testing

1. The Company will implement a drug and alcohol testing program designed to deter misuse and abuse and to provide a means for early identification, referral for treatment, and rehabilitation of employees with abuse problems, as outlined below.

2. The Company will at all times comply with its policy and procedures and with applicable government laws and regulations designed to safeguard the accuracy and reliability of drug and alcohol testing and to protect the confidentiality of those tested. Specifically, the Company will follow applicable regulations (49 C.F.R. Part 40, "Procedures for Transportation Workplace Drug and Alcohol Testing Programs"). For drug testing, these cover:

a. Collection procedures, including strict chain of custody to prevent mislabeling or alteration of urine samples and to account for the integrity of each sample from the point of collection to final disposition;

b. Use of a United States government certified laboratory with state-of-the-art testing methodologies, including confirmation testing using gas chromatography-mass spectrometry instrumentation;

c. Testing only for substances required by the regulations and for which the laboratory has been certified by the United States government, using government-mandated cutoff and confirmation levels; conducting validity testing to determine if the specimen has been adulterated or substituted;

d. Undertaking a quality assurance and quality control program designed further to ensure laboratory testing accuracy;

e. Periodic inspections of the laboratory;

f. Employment of qualified medical review officers (MRO) who are licensed physicians with knowledge of substance abuse disorders and with the medical training to interpret and evaluate a positive test result, medical history, and other relevant data for the purpose of verifying positive results, determining adulteration or substitution, and making return-to-work recommendations;

g. Giving the employee an opportunity to provide a legitimate, alternative medical explanation for the result. Should such an explanation be provided, the test result will be reported as negative;

h. Advising the employee of the opportunity to request analysis of the split sample within 72 hours of being notified of a positive result. The Company will reimburse the employee for said expense if the retest result is negative. Portions of the original specimen not subjected to the testing process will be placed in proper storage and retained by the laboratories in case subsequent testing is requested or required.

i. Ensuring confidentiality of test results, of information provided by the employee to the MRO, and of employee participation in the EAP in accordance with existing Company policy and the federal regulations; and

j. Retaining all confirmed positive specimens at the laboratory for at least one (1) year in accordance with the federal regulations.

3. Alcohol testing will be conducted using breath samples. The instrument shall be approved by the Department of Transportation as an evidentiary breath testing device and used only by trained operators (Breath Alcohol Technicians). For alcohol testing, levels at or above .02 percent blood alcohol content will be considered positive (see para. 10).

4. The Company will conduct employee testing under the following circumstances:

a. Reasonable suspicion drug and alcohol testing covering all employees. "Reasonable suspicion" means there is information that would cause a reasonable person to believe that an employee has used or is impaired by alcohol or drugs. The Company will use the following standards to determine when testing may be appropriate: signs of impairment, such as difficulty in maintaining balance, distinct odor of drugs and/or alcohol, slurred speech, abnormal or erratic behavior, or apparent inability to do assigned work in a safe or satisfactory manner.

In addition, the Company will require that all information relied upon to initiate a reasonable suspicion test be documented prior to testing, that two designated individuals (at least one of whom has been trained as referenced in paragraph C.1) agree that testing is appropriate and sign required documentation, and that a trained medical professional examine the employee to determine if there is a medical condition requiring emergent medical care. In the event a Company location does not have a staffed medical facility when the employee is escorted for review, a trained manager will determine whether the employee should be escorted to an off-premises medical facility for the required evaluation.

b. Post-accident drug and alcohol testing or testing following a serious violation of a safety rule or standard, covering all employees. An employee may be tested when a work-related incident has occurred involving death, serious bodily injury or significant property/environmental damage, or the potential for death, serious injury, or significant damage, and when the employee’s actions(s) or inaction(s) either contributed to the incident or cannot be completely discounted as a contributing factor.

c. Random drug and alcohol testing of designated employees as expressly required by United States government agencies. The Company will use neutral selection criteria to determine which of the designated employees will be tested. The Company will comply with random testing standards set forth in applicable government agency regulations.

d. Follow-up drug and alcohol testing of all employees who (1) have a first-time verified positive drug or alcohol test, or (2) have a discharge for performance or attendance problems held in abeyance.

e. Pre-assignment drug testing of employees selected to transfer into or otherwise perform in a position designated for random drug testing, where pre-assignment testing is expressly required by United States government agencies.

5. Refusal to (a) take a test following adequate explanation of the consequences of refusal, (b) accept EAP referral subsequent to a positive drug or alcohol test, (c) when required, accept EAP treatment recommendations, or (d) accept the terms and conditions of the Compliance Notification Memo shall result in corrective action, up to and including termination of employment. Failure to appear immediately for testing, or refusing to take a test, will be considered the same as a positive result.

6. For reasonable suspicion and post-accident testing only, the employee has the right to request the presence of a Union Representative at the collection site. The Union Representative shall not in any way interfere with or otherwise obstruct the collection process. The parties agree that the collection may be delayed a reasonable period, not to exceed thirty (30) minutes, to await the arrival of the Union Representative. The thirty (30) minute period will commence when the Union, to include a Union Representative, is notified.

7. Consequences of a Positive Test Result

a. No employee will be discharged because of a first verified positive test result except pursuant to D.4.d(2) above. Instead, the employee will be required to submit to EAP evaluation and, if recommended, will have a one-time opportunity to enter a treatment program. Such employees remain subject to corrective action, up to and including discharge, for independent reasons.

b. An employee who has a second verified positive test result within three years of the first such result or on a Company-administered test conducted after that period, normally will be discharged from employment.

8. Procedure Following a Positive Test Result

a. An employee will not be removed from continuous pay status because of a drug or alcohol test result until the Medical Review Officer or the Breath Alcohol Technician verifies the test result.

b. As part of the verification process, the MRO will attempt, in accordance with applicable regulations, to contact the employee to determine whether an acceptable medical explanation for the confirmed positive result exists. The MRO will review in confidence any information provided by the employee. If the MRO determines there is an acceptable medical explanation for the positive test result, the result shall be reported as negative.

c. After verification of a positive test result, the employee shall be given one (1) workday to contact the EAP for an appointment so that an EAP assessment can be made. An appointment for an EAP assessment will be made. Failure to keep the appointment without an acceptable excuse will result in discharge from employment. The employee may be returned to work after an EAP evaluation is made and the treatment and/or education recommended begins as scheduled.

d. The employee may not return to work until results on drug and alcohol tests administered by the Company are negative. A validated positive return-to-work drug or alcohol test will be grounds for discharge from employment.

e. The employee is required to accept and comply with the terms of a Compliance Notification Memo.

f. The employee is subject to follow-up testing as directed by EAP. A minimum of six (6) unannounced tests per year will be conducted for three (3) years of active payroll status following return to work.

9. Procedure Following a Positive Alcohol Test

An employee having a positive blood alcohol content of .02 or greater, but less than .04, will not be required to submit to an EAP evaluation or to other provisions of the drug and alcohol free workplace program (see paragraph 7.a above), although voluntary participation will be encouraged. Such employees will, however, be removed from the assignment and suspended for the remainder of the shift. Such action shall be taken immediately when the Breath Alcohol Technician notifies management of the positive alcohol test result. If the employee's alcohol test result is .04 or greater, conditions described in paragraphs 7.a, 7.b, 8.a, and 8.c through 8.f above shall apply.

10. The Union reserves the right to grieve and arbitrate the question of whether the Company's program is consistent with the terms described in this letter.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace

By By

COMPLIANCE NOTIFICATION MEMO (“CNM”)

is subject to the following requirements:

Name of Employee Employee Identifier

1. Employee is REQUIRED to schedule an appointment with an Employee Assistance Program (EAP) counselor within one working day of issuance of this CNM. Failure to do so will result in discharge from employment.

2. Employee will successfully complete the required treatment and/or training program specified by the Employee Assistance Program (EAP) Counselor, and any amendments to it (“the Programs”). Employee’s satisfactory participation in the Programs is required as a condition of continued employment by The Boeing Company (“the Company”), and shall continue until such time that Company’s Employee Assistance Program or its designee determines that Employee’s participation is no longer necessary. Changes in the Programs shall be in writing and coordinated in advance with EAP. Any failure by Employee to participate satisfactorily in the Programs (as determined in the sole discretion of EAP) or any violation of this CNM shall be sufficient grounds for Employee’s discharge from employment. Employee’s cooperation with personnel and functions administering and monitoring the Programs is required, and any failure by Employee to cooperate will be deemed a failure to participate satisfactorily in the Programs.

3. Employee will be subject to unannounced follow-up drug and alcohol testing for a three year period. A verified positive drug/alcohol test result during this period will be grounds for Employee’s discharge from employment.

4. Employee acknowledges that medical personnel, or other personnel involved in monitoring Employee’s compliance with this CNM, will be obligated to report to cognizant management information about any violation by Employee of the terms and conditions of this CNM.

5. Employee will continue to be subject to corrective action, up to and including discharge from employment, for reasons not related to the matters addressed in this memo.

6. The terms and conditions of this CNM shall remain in effect for a period of three (3) years commencing on the date entered below under the signature of Company Official. An interruption in Employee’s active employment status because of layoff, resignation, leave of absence, or any other reason will extend this period by the duration of the interruption.

7. Employee oIS oIS NOT (check one) a member of a collective bargaining unit. Name of collective bargaining unit, if applicable: . Employee o REQUESTS o DOES NOT REQUEST (check one) union involvement in this matter.

8. Discharge in Abeyance is contingent upon the concurrence of an Employee Assistance Program counselor.

ACKNOWLEDGMENT BY EMPLOYEE               ACKNOWLEDGMENT BY THE UNION
Employee signature required.                                  (If Applicable)
I have received and read the above:

Signature of Employee Date Signature of Union Official Date

Printed Name of Employee Date Printed Name of Union Official Date

ACKNOWLEDGMENT BY THE COMPANY CONCURRENCE OF EMPLOYEE
ASSISTANCE PROGRAM

(Required in Discharge in Abeyance only)

Signature of Company Official Date Signature of EAP Counselor Date

Printed Name of Company Official Date Printed Name of EAP Counselor Date

Original to be retained by the DFW Focal.

Attachment 5

LETTER OF UNDERSTANDING RELATING TO
WORK ENVIRONMENT AND HEALTH AND SAFETY

The Company and the Union recognize their mutual concern for the health and safety of Company employees; for the free flow of information to and from both parties and Company employees regarding issues of safety, health, and the use and handling of hazardous materials and equipment in the workplace; and for the physical conditions under which the work is performed.

The parties’ longstanding commitment to individual employee safety and regulatory compliance extends to issues regarding personal protective equipment and safety devices and the value of working together to create an injury-free workplace. To further this commitment, the Company will provide employees up to $75 per year towards the purchase of approved safety shoes where such shoes are mandatory due to regulatory compliance or Company directive. The reimbursement process utilized will be the organization’s existing process for reimbursement of incidental business expenses or any other mutually acceptable reimbursement process.

In addition, the Company agrees to present the Union, annually at their request, a review of current issues regarding the physical work environment and the activities of the Corporate Safety, Health and Environmental Affairs (SHEA) organization. The Union may request additional meetings in order to address its concerns. The agenda for each meeting shall be agreed to by both parties in advance of such meetings.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 6

LETTER OF UNDERSTANDING RELATING TO DATA REPORTS

The Company will provide only that data to the Union which is listed in the memorandum from the Company to the Union, effective November 4, 2002 subject to such revisions in the future as may be made by mutual agreement of the parties. Nothing herein is intended to waive any right the Union may have to receive additional data.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 7

LETTER OF UNDERSTANDING RELATING TO
PRINTING OF CONTRACTS

The parties agree, in the spirit of labor/management cooperation, that they will equally share the costs of printing the labor agreement.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 8

LETTER OF UNDERSTANDING RELATING TO

EXPENDITURE OF FUNDS UNDER ARTICLE 20

The parties have agreed in Article 20 of their Collective Bargaining Agreement that the Company will commit a minimum of $6.0 million per contract year (December 2 - December 1) in support of the SPEEA-Boeing Ed Wells Initiative and Working Together Partnership (covering all SPEEA-represented bargaining units participating in the Ed Wells Initiative and Working Together Partnership, including the Wichita Engineering Unit). The following sets forth the practices that will be followed in accounting for these funds:

1. Amounts not spent in one (1) annual period shall carry over to the next year, but not beyond the expiration of the Agreement.

2. The Joint Policy Board shall establish an annual budget. The amount set forth in Article 20 shall be separately accounted for and may not be used for any other program.

3. All labor and non-labor will be treated according to current Boeing accounting practices.

4. Labor support from other divisions will be burdened at the Boeing loaned labor rate.

5. To the extent permitted by law, a trust fund will be established pursuant to the Taft-Hartley Act, 29 U.S.C. Section 186, to contract with the Union for services of any individual employed by the Union who is named to the administrative staff established by Section 20. The trust shall be established pursuant to a written agreement between the parties that complies with clause (B) of the proviso to 29 U.S.C. Section 186(c)(5). In addition, the terms of any contract between the trust and the Union shall provide that the Union will be reimbursed for the services of these individuals on the basis of their base rate plus actual expenses for payroll taxes and the following employee fringe benefits: Union pension plan and package H & W insurance. The Company shall provide funds to the trust in a sufficient amount and in a timely manner to enable the trust to meet its contractual obligations to the Union.

6. Individuals employed by the Union who are named to the administrative staff established by Article 20 shall be full-time, dedicated to the administrative staff. On the exception basis, such individuals may perform Union business for brief periods of time. Time spent performing Union business will not be reimbursed through the trust as described in paragraph 5. The individuals performing Union business shall keep contemporaneous records of the dates such business was performed and the amounts of time so spent, which records shall be presented to the Company with the monthly invoices for reimbursement.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 9

LETTER OF UNDERSTANDING RELATING TO

ARTICLE 20 CONFIDENTIALITY OF INFORMATION

It is recognized by the parties that a free flow of information between them is necessary to insure the success of the Ed Wells Initiative and the Working Together Partnership. Information which could be disclosed to the Union and to the Union Administrative Staff includes information relating to inventions, products, processes, machinery, apparatus, prices, discounts, costs, business affairs or technical data that the Company considers as confidential. In furtherance of their objective to facilitate full participation of the Union in these programs while recognizing the sensitivity of the Company’s confidential information, the parties agree that any such information shall be held in confidence by the Union and the Administrative Staff and shall be used by them solely for purposes of this program. All Union Administrative Staff shall be provided a copy of this Letter of Understanding and advised of their obligations under it.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 10

LETTER OF UNDERSTANDING RELATING TO
OVERSIGHT OF LABOR-MANAGEMENT COOPERATIVE INITIATIVES

The parties enter this Letter of Understanding to continue a joint committee to oversee labor management initiatives the parties undertake. These joint initiatives are intended to enhance and develop employees as the Company's key resource. The parties also recognize that a strong, competitive Company is the only assurance of job security and that an effective employment stabilization process must balance the legitimate need for flexibility to successfully compete in a global market. Employee involvement is providing the ideas, initiative, and leadership necessary to develop and implement effective and efficient processes as an essential element in making the Company strong and competitive.

The Joint Union-Company Oversight Committee shall consist of up to four persons representing the Company and four persons representing the Union. The Company representatives will be appointed from Business Unit, and Human Resources management. The Union representatives will include three employees and the Union's Executive Director or designee. Each party shall appoint a chairperson of its group.

The oversight function will include (1) establishing subcommittees to handle the initiatives; (2) reviewing, expanding where appropriate, and resolving issues related to ongoing initiatives; and (3) formulating future labor-management cooperative initiatives. The Company in its sole discretion will provide administrative staff and appropriate funding to support the initiatives.

Proposed initiatives may include but are not limited to the following:

Employee Involvement

Horizontal Integration Leadership Teams
Cultural Change

Employment Security

Employment /Skills Forecasting
Intellectual Capital Management

The Joint Oversight Committee shall meet as often as its members agree, but in no event less than quarterly. The Company and Union chairpersons will establish committee meeting locations, agendas, and procedures. To create a proper environment for the committee's work, no aspect of the committee's proceedings shall be used as the basis for, or as evidence in, any proceedings under Article 3.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 11

LETTER OF UNDERSTANDING RELATING TO
PRODUCTIVITY IMPROVEMENT PLAN

The Company and the Union agree to review the Company-developed productivity improvement plan and make revisions and/or improvements as required.

The Company agrees to notify the Union to the maximum practical extent, when an employee is subject to this process in order for the Union to provide representation to the employee if the employee so desires.

Nothing in this agreement precludes the Union from access to Article 3 for situations arising from implementation of this process.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 12

LETTER OF UNDERSTANDING RELATING TO VOLUNTARY LAYOFFS

The Company and the Union agree that, any provision in the parties’ Agreement to the contrary notwithstanding, an employee may request that he or she be voluntarily laid off. If the request is approved by management, the employee will be coded as a layoff and will be regarded for all Company purposes as a laid off employee except for purposes of layoff benefits under Article 21. The Union will be advised of all employees approved for voluntary layoff. Nothing herein either precludes the Company from extending, or

obligates the Company to extend, voluntary layoff benefits to employees in the event that it does so for non-represented employees.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 13

LETTER OF UNDERSTANDING RELATING TO DESIGNATED EMPLOYEES

A mutually agreed upon process has been developed and implemented for the purpose of identifying employees who, while not subject to 8.9(b)(3), will be declared ineligible for first consideration recall rights. This process includes the following elements:

Designated employees will be identified as part of the retention indexing process and advised in writing that, in the event of layoff during the period of time between retention indexes, they will have no first consideration recall rights.

Designated employees must have an assigned lowest retention index rating.

Designated employees will be identified by functional management.

Designated employees who have one (1) full year of service and who elect to receive income continuation benefits under 21.3(b) will nevertheless be ineligible for first consideration recall rights.

Employees who have been so designated will be provided with an Employee Improvement Action Plan which will identify the specific conditions leading to the designation and improvements necessary to avoid such designations in the future. Management and the employee will have on-going discussions about the employee’s progress in achieving the objectives outlined in the action plan. The Company will promptly notify the Union of the identities of designated employees. The identification of designated employees shall not be subject to Article 3; however, designated employees may appeal the designation regardless of their previous retention index rating in accordance with 8.4(c)(1).

Designations pursuant to this letter of understanding will remain in effect until the next scheduled retention review exercise or until successful completion of improvements identified in the Employee Improvement Action Plan.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 14

LETTER OF UNDERSTANDING

RELATING TO TEMPORARY RECALL

The parties acknowledge that Article 9 limits the use of contract personnel during workforce reductions or when employees are on active recall status. The parties acknowledge further that occasionally situations arise when short-term assignments require additional staffing.

In recognition of the fact that the work under discussion involves short-term assignments, the parties agree to the implementation of the process described immediately below.

1. The process shall be known as Temporary Recall and shall be defined as the temporary re-employment of individuals on active layoff status (hereinafter "employees").

2. Temporary Recall assignments may be designated for specific programs or projects with a defined beginning and ending date. The normal minimum will be one (1) month and the normal maximum will be six (6) months. Assignments will normally be full time (average 80 hours in a pay period).

3. The Company will determine which employees will be offered Temporary Recall assignments. Temporary Recall will be strictly voluntary on the part of the employee. Refusing to consider an employee for Temporary Recall or an employee's rejection of an offer of Temporary Recall will not affect the employee's active layoff status.

4. Temporarily recalled employees will receive the same salary they were receiving prior to layoff, adjusted for any general wage increases implemented between the date of their original layoff and temporary recall.

5. If the temporarily recalled employee begins within one (1) year of the original layoff effective date, eligibility for coverage for medical/dental insurance, life insurance, accidental death and dismemberment insurance, business travel accident insurance, long-term and short-term disability insurance, and voluntary personal accident insurance begins on the first day of the month following the month in which the re-employment commences. If the temporarily recalled employee begins at least one (1) year after the original layoff effective date, eligibility for coverage for such benefits begins the first day of the month following one full calendar month of continuous employment.

6. With regard to the Retirement Plan, unused sick leave, and vacation, employees on Temporary Recall will be set up in the system based on their respective layoff/recall circumstances. This will include the reactivation of unused but earned credits and the generation of future benefits consistent with standard policies. Voluntary Investment Plan contributions may be resumed, beginning on the first of the month following recall.

7. Company service will be earned beginning the first day back on the active payroll.

8. Active layoff status will not be interrupted. Filing requirements once during each half year for first consideration recall status will remain.

9. Employees on Temporary Recall will not receive a retention index based on Temporary Recall assignments.

10. Employees on Temporary Recall will generate funds for a selective adjustment exercise if they meet contractual criteria.

11. Employees on Temporary Recall will not be eligible for layoff benefits when their Temporary Recall assignment ends.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 15

LETTER OF UNDERSTANDING RELATING TO

PART-TIME EMPLOYMENT

The Company and the Union agree that employee requests to be placed on part-time work schedules to assist employees with personal concerns may be authorized when compatible with Company schedules and needs. The term "part-time work schedule" shall mean a work schedule consisting of a seven (7)-day cycle with fixed days and hours of work that are less than forty (40) hours over one (1) regular workweek, or a fourteen (14)-day cycle with fixed days and hours of work that are less than eighty (80) hours over two (2) regular workweeks. No minimum or maximum number of hours will be required, but fixed days and hours of work must be established. A part-time schedule must be approved by the employee’s immediate and second-level management and is applicable only to the particular position the employee occupies when the schedule is approved. Management may request an employee on a part-time work schedule to return to work on a full-time basis regardless of the employee’s retention index when part-time work is no longer appropriate.

Employees on part-time work schedules will be subject to all provisions of the Agreement and the provisions of PRO-522 dated May 8, 2002.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 16

LETTER OF UNDERSTANDING RELATING TO

ACTING SUPERVISORS

The Company agrees to inform the Union in a timely manner when it intends to use a member of the bargaining unit as an acting supervisor. If the employee remains as an acting supervisor for more than six (6) consecutive months, the employee shall be reclassified to management or returned to his or her bargaining unit position. Deviations shall require the consent of the Union.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 17

LETTER OF UNDERSTANDING

RELATING TO SHAREVALUE PROGRAM

The Company and the Union agree that all eligible represented employees may participate in the Boeing ShareValue Program (also known as the ShareValue Trust) for the duration of this Agreement. The parties agree that the Company's success depends upon the ability to return long-term value to the shareholders. The intent of this incentive program is to help inform employees about what makes a business run and produces shareholder value, and to allow employees to share in the results of their efforts to increase shareholder value.

Employees will be eligible to participate in accordance with the governing provisions of the ShareValue Program as set forth in the official Program documents. In the event of any conflict between this Letter of Understanding and the official ShareValue Program documents, the official ShareValue Program documents will prevail in every case.

Eligible participants will proportionally share in a ShareValue Program distribution based on the number of months they were eligible to participate during any investment period falling within the term of this Agreement or any preceding Agreement that provided for their participation in the ShareValue Program.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 18

LETTER OF UNDERSTANDING

RELATING TO VIRTUAL OFFICE/TELECOMMUTING

The parties enter into this Letter of Understanding as a result of the implementation of the Virtual Office/Telecommuting Program. Following is a summary of the general provisions of this Program as they apply to SPEEA-represented employees.

Telecommuting or "Work at Home" and other aspects of the Virtual Office have proven to be a viable work option that, when appropriately applied, benefit both the Company and the individual. The Virtual Office provides a balance between the tasks that are the responsibility of each individual and the requirements of each team and group.

The Virtual Office is a cooperative agreement between the manager and the employee, not an entitlement, and is based on (1) the needs of the job assignment, work group and the Company, and (2) the employee’s past and present levels of performance and defined personal characteristics. Participation in the Virtual Office Program is entirely voluntary and may be terminated by the employee, his/her manager, or the Company at any time.

The employee’s duties, obligations, responsibilities and conditions of employment with the Company remain unchanged. Employees remain obligated to comply with all Company rules, policies, practices and instructions.

The detailed terms and conditions of this Program are covered in the Virtual Office Program procedure, PRO - 497, which is subject to change at the Company’s discretion.

Disputes concerning the content of this Letter of Understanding shall not be subject to the grievance and arbitration procedure of Article 3. Nothing in this Letter waives any rights reserved in Article 2.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 19

LETTER OF UNDERSTANDING
RELATING TO THE TRAVEL CARD PROCESS

The Company and the Union enter this Letter of Understanding to memorialize their agreement to continue to monitor the process of paying business travel expenses and their ongoing mutual commitment for improvements in the same.

The terms and conditions of the travel card process as described by the Company and the travel card provider will apply to employees covered by this Agreement. The Company will notify the Union of any changes to the travel card process. Employees will not be required to pay the travel card company for late fees when such fees are incurred due to situations outside the employee’s control, or if the employee has made a good faith effort to pay the travel card company or resolve disputed payments in a timely fashion. Any dispute over the imposition of late fees will be subject to Article 3. In addition to the terms and conditions defined by the Company and the travel card provider, the following provisions continue to apply to the travel card process:

1. Employees will not be required to pay the card company for authorized business expenses before receiving payment from Travel Accounting so long as the delay in receiving that payment is due to the Company’s neglect or factors outside the employee’s control.

2. Payment delinquencies will not be reported to a credit bureau.

3. Authorized management may exempt employees who engage in extensive/frequent travel or for whom special circumstances exist from the decentralized billing process. Any employee shall be free to request an exemption.

4. The Company will take reasonable steps to preserve the confidentiality of the employee’s personal and financial information related to the use of the travel card, and will use such information only for legitimate business reasons. Such information will not be used for solicitations for activities not related to company travel.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace

By By

Attachment 20

LETTER OF UNDERSTANDING RELATING TO
FREQUENT FLIER MILEAGE

The Company agrees that frequent flier mileage for business travel will be credited to personal employee accounts and may be applied towards personal travel. Employees must continue to comply with Company directives and Boeing Travel Office procedures including those designed to minimize travel-related costs without regard to frequent flier mileage program considerations.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 21

LETTER OF UNDERSTANDING RELATING TO MAJOR ORGANIZATION

The parties agree that for the life of this Agreement “Major Organization” as that term is defined in 8.3(c) and used throughout Article 8 of the Agreement includes all bargaining unit employees in Sedgwick County, Kansas in a single major organization provided that the Company may, upon sixty (60) days' notice to the Union, modify the definition should a significant change in business or business operations occur, including but not limited to a significant reorganization of Company operations or structure. During that 60-day period the Company will meet with the Union to exchange issues and concerns regarding the reasons for the changes.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 22

LETTER OF UNDERSTANDING RELATING TO
QUARTERLY LABOR/MANAGEMENT BUSINESS MEETINGS

Regularly scheduled quarterly meetings will be held between the Company and the Union to share information about Company business plans such as workforce planning, business outlook, facility and safety issues, subcontracting, surplus activity, employment of contract engineers, and other areas of interest as agreed to by the parties.

Meetings shall be attended by appropriate Union, Human Resources and Business Unit Representatives.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 23

LETTER OF UNDERSTANDING

RELATING TO LUMP SUM CASH PAYMENT

The Company agrees to pay employees covered by this Agreement and on the active payroll or approved leave of absence on December 5, 2005 a one-time lump sum payment equal to four and one half (4.5) percent of an employee’s bargaining unit base wages during the period from December 1, 2004 through November 30, 2005, less applicable withholding to be received December 2005.

Bargaining unit base wages means that portion of an eligible employee’s total earnings while in the bargaining unit which is computed at the employee’s base rate on regular hours worked, sick leave hours (including those paid from FSP funds), vacation hours, holidays, and leave with pay hours.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 24

LETTER OF UNDERSTANDING RELATING TO RETRAINING SKILL TRANSITION

Employees selected by management to participate in a program of formal training in a field outside their current prime skill designation, which training is conducted or approved by the Company, and employees who at management’s request transfer from one major functional area to another for a Company-sponsored skill transition and retraining program will be assigned a unique skill code upon entering the training program or upon transfer to the new functional area respectively. The trainee shall retain this unique code for a period of six months following completion of training or transfer to the new functional area, as the case may be, in order to allow time for the trainee to demonstrate his/her adaptability to the new assignment.

During the period in which the trainee is assigned the unique code, he or she will retain the retention rating held at the time of assignment to the unique code.

In the event a surplus is declared in the trainee’s new assignment and if the trainee’s retention rating would cause him or her to be an individual surplused, the trainee will be

returned for assignment to an area under his or her last held regular assigned primary skill code and the retention rating of record.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By __________________________ By _______________________

Attachment 25

LETTER OF UNDERSTANDING RELATING TO SALARY GROWTH AND PROMOTIONAL FUND

Withdrawn – Incorporated into Article 11

Attachment 26

LETTER OF UNDERSTANDING RELATING TO
SECONDARY SKILLS MANAGEMENT CODES

The Company and the Union enter this Letter of Understanding to address the use of "secondary" skills management codes.

Qualified employees will be eligible to be assigned a secondary skills management code. Assignment of such a skills management code will require that the employee satisfy qualifications identified by management responsible for administration of the skills management code. Such assignments will be reviewed by management every two (2) years. If concerns over the employee’s ability to qualify for the assigned skills management code are raised, the employee shall have six (6) months to resolve those issues. During the six (6) month period the employee shall maintain the assigned skills management code. The functional manager must sign a Company form to verify that all such qualifications have been met.

Employees from a surplusing Major Organization shall not be laid off while contract personnel are employed in their secondary skills management code within that Major Organization, except those employees for whom there is supporting documentation of performance deficiencies. Exceptions to avoid significant disruption or impact on committed packages of work will require the approval of the affected organization Senior Human Resource Manager within the organization and the concurrence of the Senior Engineering Manager in the organization or their designees. Notification of exceptions will be provided to the Union as soon as practicable.

Subject to the limitations set forth in 8.9(b)(1), laid-off employees on file for recall pursuant to 8.9(b)(4) will be offered return to active employment within the applicable secondary skills management code, in approximate reverse order of layoff, after employees assigned to such skills management code as their primary skills management code have been offered return to active employment or been removed from layoff status under 8.9. All other provisions of 8.9 addressing job family skills management codes are equally applicable to secondary skills management codes.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By ____ By _

Attachment 27

LETTER OF UNDERSTANDING

RELATING TO EMPLOYEE INCENTIVE PLAN

Eligible employees covered by this Agreement and on the active payroll as of January 1, 2006 or thereafter may participate in The Boeing Company Employee Incentive Plan (“EIP”) for the duration of this Agreement as set forth below and subject to this Letter of Understanding and the terms of the EIP. Eligible employees will accrue Daily Earnings beginning January 1, 2006. The first payment will be calculated based on financial performance for fiscal year 2006 and will be paid in accordance with the EIP.

Employees will be eligible to participate in accordance with the governing provisions of the EIP as set forth in the official plan document. In the event of any conflict between this Letter of Understanding and the official EIP plan document, the official EIP plan document will prevail in every case.

The Board of Directors of the Company reserves the right to amend, modify, or terminate the EIP in its sole discretion. All terms and conditions of the EIP, as it may be amended or modified, will apply.

The Company shall not be required or obligated to provide any information to the Union that the Company determines to be proprietary or confidential, including but not limited to information regarding cost, pricing, and/or other financial information or data. Any information regarding cost, pricing, and/or other financial information or data will be provided at the Company’s discretion if the Company deems it necessary or appropriate for Union review. If the Company so determines that such information should be released, the Union and/or its representatives may necessarily be required to execute a confidentiality agreement before such information is released. Any information that is released to the Union and/or its representatives will be held confidential and shall not be utilized by the Union and/or its representatives for any purposes that do not directly relate to the EIP.

Nothing in this Letter of Understanding or employee participation in the EIP will be subject to the grievance and arbitration procedure of Article 3.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By ____ By _

Attachment 28

LETTER OF UNDERSTANDING NO. 28

RELATING JOINT COMPENSATION DISCUSSION GROUP

The parties enter this letter of understanding to express their intent to establish a Joint Compensation Discussion Group.

The discussion group shall meet no less than annually during the term of this agreement. Subjects for discussion may include compensation philosophy, market relationships and the salary planning process.

It is understood that the group is established solely for the purpose of discussion, and that the group is not a forum for making recommendations or seeking agreement. Group discussions shall not reopen the parties’ agreement or affect Article 2 thereof.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

By ____ By _

Attachment 29

LETTER OF UNDERSTANDING NO. 29

RELATING PAYMENT LEVELS FOR NETWORK HOSPITALS IN COMPLIANCE WITH PATIENT SAFETY STANDARDS

After satisfaction of the deductible and any copayment requirements, the Traditional Medical Plan pays covered services and supplies in full when received from a network hospital that meets patient safety standards. Plan payment levels are subject to all provisions of the Plan, including medical review requirements, maximum benefits, coordination of benefits, exclusions and definitions.

Patient safety standards mean established criteria for patient safety related to hospital services. A hospital meets patient safety standards if it meets established criteria listed below. The hospital must publicly certify that it meets all criteria and the statements pertaining to standards are accurate and reflect normal operating procedures at the hospital. The criteria include:

Computerized Physician Order Entry: The hospital must publicly assure that, physicians will enter at least 75% of inpatient medication orders via a computer linked to error-prevention software. The software must be capable of alerting physicians to at least 50% of common, serious prescribing errors.

Intensive Care Unit Staffing: The hospital must publicly assure that its adult and/or pediatric intensive care unit is managed or co-managed by critical care specialists who:

1. Are present during daytime hours and exclusively provide clinical care in the ICU, and

2. At all other times, can return urgent ICU paging calls within five minutes and arrange for a physician or FCCS-certified non-physician specialist to reach ICU patients within five minutes at least 95% of the time.

Evidence-based Hospital Referrals: For patients admitted for one of several complex procedures (coronary artery bypass grafts, percutaneous coronary intervention, abdominal aortic aneurysm repair, pancreatic resection, esophagectomy and high risk deliveries), in addition to CPOE and ICU Staffing, network hospitals must meet experience criteria, consisting of process, volume, and/or outcome measures, for the performance of the specific procedure. If complex procedures as identified by national standards change in the future, the parties agree that they will meet and discuss the changes.

In geographical areas where scientifically rigorous, risk-adjusted outcome comparisons are publicly reported for intensive care unit performance, favorable risk-adjusted outcomes may replace the above criteria for intensive care unit staffing.

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Employees in Aerospace – Wichita

Company Service	Annual Vacation
1 thru 4 years	80 hours
5 thru 9 years	96 hours
10 and 11 years	120 hours
12 and 13 years	128 hours
14 and 15 years	136 hours
16 and 17 years	144 hours
18 years or more	160 hours

ARTICLE 6

SICK LEAVE, RESERVE ACCOUNT AND FINANCIAL SECURITY PLAN

Section 6.1 Establishment of Initial Eligibility for Sick Leave (December 6, 2005 through December 22, 2005).

6.1(a) Employees classified on a salaried payroll become eligible for sick leave upon completion of one (1) month continuous active service with the Company.

6.1(b) When the continuity of employment is broken other than by layoff or termination to enter military service, an employee must begin with the date of reemployment to accumulate one (1) month continuous active service with the Company before being eligible for sick leave.

Section 6.2 Accumulation of Sick Leave (December 6, 2005 through December 22, 2005).

6.2(b) In all cases involving the transfer of an employee from one payroll to another, the provisions of the Company's procedures pertaining to sick leave, as may be revised from time to time by the Company, shall be applicable.

6.2(d) Eligibility dates and accumulated sick leave credits established prior to this Agreement will not be changed as a result of this Agreement.

Section 6.3 Use of Sick Leave (December 6, 2005 through December 22, 2005).

6.3(b) Sick leave payments will be at the employee's base rate in effect at the time of his or her absence plus, if applicable, any supplement to the base rate approved by the Company for inclusion in sick leave pay.

6.3(c) Sick leave hours will be used from sick leave hours most recently credited.

6.3(d) Sick leave credits may be used by an employee on approved leave of absence if the requirements of 6.3(a) are met.

Section 6.4 Reserve Account (December 6, 2005 through December 22, 2005).

6.4(a) Sick leave hours credited to the employee's Reserve Account and Financial Security Plan Trust Account on the effective date of this Agreement will not be changed as a result of this Agreement.

For a part-time employee on the active payroll, the amount of previously awarded and unused sick leave credits transferred to the Reserve Account on each eligibility date will be in the proportion the employee's actual total hours of work bear to full-time hours during the qualifying period.

6.4(e) At the time an employee who has hours credited to his or her Reserve Account is terminated for any reason, payment shall be made for those hours credited to his or her Reserve Account at the employee's then current base rate.

6.4(f) Credits in an employee's Reserve Account will be converted in accordance with the Financial Security Plan and placed in an individual Financial Security Plan Trust Account as provided for in the Financial Security Plan.

Section 6.5 Financial Security Plan (December 6, 2005 through December 22, 2005).

6.5(c) Continuation Beyond Agreement. The Company shall not be precluded from continuing the Plan in effect as to employees within these units to which this Agreement relates, after expiration or termination of this Agreement, subject to the terms, conditions, and limitations of the Plan.

6.5(d) Changes to the Current Plan. Subject to action by the Company’s Board of Directors and to the approvals specified in 6.5(b), all provisions of the plan are to remain unchanged with the exception of the following amendments:

ARTICLE 9

CONTRACT PERSONNEL

Level Minimum Rate

TABLE IV

ARTICLE 12

UNION REPRESENTATIVES

ARTICLE 13

DEDUCTION OF UNION DUES

ARTICLE 23

DURATION

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

RELATING TO DRUG AND ALCOHOL FREE WORKPLACE PROGRAM

a. Identify the extent and impact of drug and alcohol use.

b. Describe the principal federal legislation and regulations for a drug and alcohol free workplace.

c. Identify the Company rules pertaining to drugs and alcohol and the appropriate action to be taken upon violation.

d. Identify the principal components of the Drug and Alcohol Free Workplace Program (rehabilitation, awareness, training, and testing).

e. Explain the Employee Assistance Program, opportunities for rehabilitation, and the consequences of rehabilitation failure.

f. Explain the facts of drug and alcohol testing accuracy and procedures, such as the chain of custody.

g. Enable participants to effectively apply observed and documented performance criteria and appropriate procedures in referring the employee to the Employee Assistance Program.

h. Enable participants to effectively apply observed and documented criteria typically indicative of drug or alcohol use and apply appropriate reasonable suspicion testing guidelines in referring employees to Medical for medical observation and possible testing.

i. Enable participants to apply appropriate post-accident testing guidelines in referring employees for testing.

i. Ensuring confidentiality of test results, of information provided by the employee to the MRO, and of employee participation in the EAP in accordance with existing Company policy and the federal regulations; and

j. Retaining all confirmed positive specimens at the laboratory for at least one (1) year in accordance with the federal regulations.

Name of Employee Employee Identifier

Signature of Employee Date Signature of Union Official Date

Printed Name of Employee Date Printed Name of Union Official Date

Signature of Company Official Date Signature of EAP Counselor Date

Printed Name of Company Official Date Printed Name of EAP Counselor Date

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

LETTER OF UNDERSTANDING RELATING TO

Society of Professional Engineering The Boeing Company

ARTICLE 20 ­ CONFIDENTIALITY OF INFORMATION

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Dated December 20, 2005

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

ACTING SUPERVISORS

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

Society of Professional Engineering The Boeing Company

By __________________________ By _______________________

Society of Professional Engineering The Boeing Company

By __________________________ By _______________________

Society of Professional Engineering The Boeing Company

By __________________________ By _______________________

Attachment 29

Society of Professional Engineering The Boeing Company

By __________________________ By _______________________

SICK LEAVE, RESERVE ACCOUNT AND
FINANCIAL SECURITY PLAN

ARTICLE 20 CONFIDENTIALITY OF INFORMATION

By ____ By _

By ____ By _

By ____ By _

By ____ By _