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iCommon
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Item 1.01. Entry Into a Material Definitive Agreement
On January 6, 2021, the Boeing Company (the “Company”)
entered into a Deferred Prosecution Agreement (“DPA”) with the U.S. Department of Justice (“DOJ”) that, subject to court proceedings, resolves the previously disclosed DOJ investigation into the Company relating to the Company’s conduct regarding the evaluation of the Boeing 737 MAX airplane by the Federal Aviation Administration. A copy of the DPA is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Under
the DPA, the Company has agreed to the filing of a criminal information charging the Company with one count of conspiracy to defraud the United States based on the conduct of two former 737 MAX program technical pilots. The DPA contemplates that the Company will: (1) make payments totaling $2.51 billion, which consist of (a) a $243.6 million criminal monetary penalty; (b) $500 million in additional compensation to the heirs and/or beneficiaries of those who died in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents; and (c) $1.77 billion to the Company’s airline customers for harm incurred as a result of the grounding of the
737 MAX, offset in part by payments already made and the remainder satisfied through payments to be made prior to the termination of the DPA; (2) review its compliance program for implementation of continuous improvement efforts; and (3) implement enhanced compliance reporting and internal controls mechanisms. Under the terms of the DPA, the criminal information will be dismissed after three years, provided that the Company fully complies with its obligations under the DPA.
Of the payments described above, $1.77 billion has been included in amounts reserved in prior quarters for 737 MAX customer considerations. The Company expects to incur earnings charges equal to the remaining $743.6 million in
the fourth quarter of 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
