SEPARATION AGREEMENT

This Separation Agreement (Agreement) is entered into by and between Gerald E. Daniels (the Executive) and The Boeing Company (the Company). The parties have agreed to enter into this Agreement to resolve any and all issues arising out of or relating in any way to Executives employment, including but not limited to his retirement effective April 1, 2003.

1.    Executive has elected to retire effective April 1, 2003.

2.    The Company agrees to pay Executive the following sums: (a) a lump sum (less applicable withholdings) of $900,000, to be paid no later than April 30, 2003; and (b) a lump sum (less applicable withholdings) of $700,000, to be paid no later than April 30, 2003. Executive acknowledges that he is not entitled to any payment under any of the Companys layoff benefits plans. Executive will be eligible for an incentive award payment in March 2004, pro-rated for the time he spent on the payroll in 2003, and determined in accordance with the terms and conditions governing the Companys incentive compensation process. Executive may retain his company-provided vehicle or choose before April 1, 2003, to return the vehicle to the Company in exchange for a payment of ten percent below its current blue book wholesale value. Executive is eligible for financial and tax planning advice, at Company expense and in accordance with normal practices for senior executives, through December 31, 2004.

3.    With respect to awards made under the 1997 Incentive Stock Plan, termination of the Executive shall be treated as a retirement for purposes of vesting any awards under that Plan. Executives performance share grants, stock unit grants, and deferred compensation account will continue to be administered in accordance with the provisions governing those grants and the Deferred Compensation Plan.

4.    Should Executive at any time decide to accept a position with the United States Government wherein ethically he can no longer actively own Boeing stock (as determined by the Governments rules of conduct governing the position), then (a) he will so advise the Company no less than thirty days before commencing employment, and (b) ten trading days (New York Stock Exchange schedule) before Executive commences such employment the stock unit grants in his deferred compensation account will be converted to the interest credit earnings method, and (c) any unvested performance shares will be converted to a cash payment based on a valuation of the shares performed by Hewitt Associates, and (d) any other actions required to comply with the Governments rules of conduct will be taken. If at any time after entering this Agreement but prior to retiring Executive accepts a position with an entity deemed by the Company to be in direct competition with the Company, this Agreement shall become null and void. If after retiring Executive accepts a position with an entity deemed by the Company to be in direct competition with the Company, the Company reserves the right to take any action necessary to protect its interests, including but not limited to discontinuation of any of the benefits of this Agreement and any actions allowed under the Companys executive compensation plans.

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