EXHIBIT 10.1

 

LOGO [g46737g59q91.jpg]

  

Keith J. Peden

Senior Vice President                        

Human Resources

781.860.2380

781.860.2912 fax

  

Raytheon Company

Executive Offices

141 Spring Street

Lexington, Massachusetts

02421 USA

 

September 24, 2003

 

Mr. Francis S. Marchilena

 

Re:    Transition Agreement

 

Dear Frank:

 

Please accept this letter confirming the understandings we have reached with
respect to: (i) the lapse of restrictions on 20,146 shares of performance-based
restricted stock; (ii) the lapse of restrictions on 50,000 shares of restricted
stock that you have deferred into a trust at Mellon Bank; and (iii) your
resignation as an officer and/or director of the companies set forth on
Attachment A hereto.

 

  1. Lapse of Restrictions on Performance-Based Restricted Stock: Subject to the
approval of the Management Development and Compensation Committee of the Board
of Directors of the Company (the “MDCC”), the Company will recognize that the
performance goals related to the lapsing of restrictions on 20,146 shares of
restricted stock have been met and the restrictions on such shares shall lapse
on September 24, 2003. You have requested to use shares to satisfy any tax
obligation that may arise when these shares vest on September 24, 2003.

 

  2. Lapse of Restrictions on Deferred and Unvested Shares in Mellon Trust: You
have elected to defer certain shares of restricted stock into a trust at Mellon
Bank. Fifty thousand shares of such award remain unvested as of the date hereof.
Twenty-five thousand shares of such award are scheduled to vest on January 26,
2004 in accordance with the vesting schedule established on the date of grant.
As approved by the MDCC, the remaining 25,000 shares will vest on September 30,
2005.

 

 

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Page 2

Frank S. Marchilena

Transition Agreement

 

  3. Officer and Director Positions. You agree to resign, effective immediately,
as an officer and/or director of the companies set forth on Attachment A hereto.
You shall execute and return a resignation letter as evidence thereof.

 

  4. Trading Window: You acknowledge that in the course of your responsibilities
at the Company you may have come into contact with material non-public
information and that you may be considered an “insider” for securities law
purposes. You further acknowledge that you will continue to be subject to the
Company’s Insider Trading Policy and blackout periods and trading windows
thereunder for three months following your resignation as an executive officer
of the Company.

 

  5. Pension: For purposes of calculation of your pension under the provisions
of the Raytheon Company Pension Plan for Salaried Employees (“Plan”), you will
receive age and service recognition as if you were an active participant in the
Plan through September 30, 2005. For the purpose of calculating your final
average earnings under the Plan, you will be treated as continuing as an active
participant through September 30, 2005.

 

  6. Miscellaneous. This letter shall constitute an amendment to your Transition
Agreement dated July 31, 2002 (including but not limited to paragraph 5
thereunder). Except as set forth herein, all of the terms and conditions of your
Transition Agreement shall remain in full force and effect and are hereby
ratified and confirmed. To the extent that there are any inconsistent terms in
your Transition Agreement and this Agreement, the terms of this Agreement shall
take precedence.

 

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Page 3

Frank S. Marchilena

Transition Agreement

 

If you have any questions regarding the above, please contact me at (781)
860-2380.

 

Sincerely,

/s/ Keith J. Peden

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Keith J. Peden

Senior Vice President, Human Resources

 

ACCEPTED:

       

/s/ Francis S. Marchilena

     

Date: Oct. 22, 2003

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Francis S. Marchilena

       

 

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Page 4

Frank S. Marchilena

Transition Agreement

 

Attachment A

 

Directorships and Officerships as of September 24, 2003

 

Company

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Title

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Raytheon Canada Ltd.

   Director and Chairman

Raytheon Systems Ltd.

   Director

Thales-Raytheon Systems Company

Limited

   Director

Thales-Raytheon Systems Company

SAS

   Director

Raytheon Company

  

Executive Vice President

Leader – Discontinued Operations