1
EXHIBIT 4.6

                            RAYTHEON 2001 STOCK PLAN

                                   ARTICLE I

         1.       Plan Name.  This plan shall be known as the Raytheon 2001
Stock Plan.
                                   ARTICLE II

         2. Purpose. This Plan is intended to encourage ownership of Stock by
key employees of Raytheon Company and its Affiliates and to provide additional
incentive for them to promote the success of the Company's business. With
respect to any Incentive Stock Options that may be granted hereunder, the Plan
is intended to be an incentive stock option plan within the meaning of Section
422 of the Code.
                                  ARTICLE III

         3. Effective Date; Term. The Plan is effective as of the date on which
the Plan is adopted by the Board, subject to approval of the stockholders as
required by law. No Award shall be granted under the Plan after the close of
business on the day immediately preceding the tenth (10th) anniversary of the
effective date of the Plan. Subject to other applicable provisions of the Plan,
all Awards made under the Plan prior to such termination of the Plan shall
remain in effect until such Awards have been satisfied or terminated in
accordance with the Plan and the terms of such Awards.

                                   ARTICLE IV

         4. Definitions.  As used in the Plan, the following terms have the
following meanings:

4.1 Affiliate means any entity, whether now or hereafter existing, which
controls, is controlled by, is under common control with, the Company
(including, but not limited to, joint ventures, limited liability companies,
partnerships) or any entity with respect to which the Committee determines that
the Company has a material business interest.

4.2 Award means any stock options (including ISOs and NSOs), SARs (including
free-standing and tandem SARs), Restricted Stock Awards, Stock Units, or any
combination of the foregoing granted pursuant to the Plan, except, however, when
the term is being used under the Plan with respect to a particular category of
grant in which case it shall only refer to that particular category of grant.

4.3 Board means the Board of Directors of the Company.

4.4 Cause means, for purposes of this Plan: (i) the Participant's
intentional, persistent failure, dereliction, or refusal to perform such duties
as are reasonably assigned to him or her by the officers or directors of the
Company; (ii) the Participant's fraud, dishonesty or other deliberate injury to
the Company in the performance of his or her duties on behalf of, or for, the
Company; (iii) the willful commission by the Participant of a criminal or other
act that causes substantial economic damage to the Company or substantial injury
to the business reputation of the Company; (iv) the Participant's material
breach of his or her employment or engagement agreement, if any; or (v) the
Participant's breach of any material provision of the Participant's Grant
Agreement specifying the terms of the particular Award. For purposes of the
Plan, no act, or failure to act, on the part of any person shall be considered
"willful" unless done or omitted to be done by the person other than in good
faith and without reasonable belief that the person's action or omission was in
the best interest of the Company.
<PAGE>
                                       2

4.5  Change in Corporate Control means:

(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the then-outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that, for purposes of this Section, the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly from the Company,
(B) any acquisition by the Company, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Affiliated
Company or (D) any acquisition by any corporation pursuant to a transaction that
complies with Sections 4.5(a)(i), 4.5(c)(ii) and 4.5(c)(iii).

(b) Individuals who, as of April 1, 2000, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or stock of another entity
by the Company or any of its subsidiaries (each, a "Business Combination"), in
each case unless, following such Business Combination, (i) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business Combination;
or
<PAGE>
                                       3

(d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

4.6  Code means the Internal Revenue Code of 1986, as amended, and any related
rules, regulations and interpretations.

4.7 Committee means the Management Development and Compensation Committee (MDCC)
of the Company's Board of Directors, consisting exclusively of directors who at
the relevant time are "outside directors" within the meaning of ss.162(m) of the
Code and "non-employee directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934.

4.8 Company means Raytheon Company, a Delaware corporation.

4.9 Company Officer means the Chairman of the Board, the President, and any
Executive Vice President, Senior Vice President or Vice President (elected or
appointed) of the Company.

4.10 Director means a member of the Board of Directors of Raytheon Company.

4.11 Fair Market Value means the value of a share of Stock of the Company on any
date as the Committee shall in good faith determine.

4.12 Grant Agreement means the agreement between the Company and the Participant
pursuant to which the Company authorizes an Award hereunder. Each Grant
Agreement entered into between the Company and a Participant with respect to an
Award granted under the Plan shall incorporate the terms of this Plan and shall
contain such provisions, consistent with the provisions of the Plan, as may be
established by the Committee.

4.13 Grant Date means the date on which the Committee formally acts to grant an
Award to a Participant or such other date as the Committee shall so designate at
the time of taking such formal action.

4.14 Immediate Family means any child, stepchild, grandchild, parent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships.

4.15 Incentive Stock Option or "ISO" means an Option grant that is intended
to meet the requirements of Section 422 of the Code.

4.16 Medical Leave of Absence means a leave of absence for medical reasons
approved in writing by the Company's disability management group which will
terminate as of the earlier of the date the Participant is found by the
disability management group to be no longer disabled or the date the employee is
terminated from employment in accordance with Company policy.

4.17 Non-Statutory Stock Option or "NSO" means an Option grant that is not
intended to be an Incentive Stock Option.

4.18 Option means an option to purchase shares of the Stock granted under the
Plan.

4.19 Optionee means a person eligible to receive an Option, as provided in
Section 8.1, to whom an Options shall have been granted under the Plan.
<PAGE>
                                       4

4.20 Option Period means such period (not to exceed ten (10) years from the
granting of an ISO) from the Grant Date to the date on which the option expires
as may be determined by the Committee and set forth in the Grant Agreement.

4.21 Option Price means the price paid by an Optionee for an Option under this
Plan.

4.22 Option Share means any share of Stock of the Company transferred to an
Optionee upon exercise of an Option pursuant to this Plan.

4.23 Participant means a director, officer, employee or consultant who is
granted an Award under the Plan.

4.24 Personal Leave of Absence means a leave of absence for personal reasons for
a period of no more than one year approved in writing by the Senior Vice
President, Human Resources, or his delegate.

4.25 Plan means this Raytheon 2001 Stock Plan.

4.26 Plan Year means the Calendar Year, except that the first Plan Year shall
commence on the Effective Date, as described in Section 3 and shall end on the
December 31 first following the Effective Date.

4.27 Related Corporation means a parent corporation or a subsidiary corporation,
each as defined in Section 424 of the Code.

4.28 Restricted Stock Award means any Award of shares of restricted Stock
granted pursuant to Article XI of the Plan.

4.29 Retirement means, for purposes of this Plan, the Termination of Service
with the Company, other than for Cause, at any time after attaining age
fifty-five (55) and having completed at least ten (10) years of service, or
Termination of Service under circumstances which the Committee deems equivalent
to retirement.

4.30 SAR means a stock appreciation right, as awarded under Article X.

4.31 Stock means the common stock, $0.01 par value, of the Company, provided
that, in the event the Company has outstanding Class A and Class B common stock,
Stock means the Class B common stock.

4.32 Stock Unit means credits to a bookkeeping reserve account solely for
accounting purposes, where the amount of the credit shall equal the Fair Market
Value of a share of Stock on the date of grant (unless the Committee provides
otherwise in the Grant Agreement), and which shall be subsequently increased or
decreased to reflect the Fair Market Value of a share of Stock. Stock Units do
not require segregation of any of the Company's assets. Stock Units are awarded
under Article XI.

4.33 Termination of Service means cessation of performance of services for the
Company or an Affiliate by an employee or consultant and the departure from
active status as a Director by a non-employee Director. For purposes of
maintaining a Participant's continuous status as an employee and accrual of
rights under any Award granted pursuant to the Plan, transfer of an employee
among the Company and its Affiliates shall not be considered a Termination of
Service with the Company provided that no more than 30 days elapse between
termination from the Company and commencement of employment elsewhere in the
Company or with an Affiliate.
<PAGE>
                                       5

4.34 Vesting Period means that period of time during which the shares of Stock
(or a portion thereof) underlying an Award are subject to a risk of forfeiture.

                                   ARTICLE V

         5. Stock Subject to the Plan.

5.1 Shares of Stock in an amount to be  determined  by the  Committee but not to
exceed  twenty-eight  million  (28,000,000) shares of Stock, shall be subject to
Award under the Plan.  The Company  shall reserve such number of shares of Stock
for Awards under the Plan,  subject to adjustments as provided in Article XII of
the Plan.  If any  Award,  or  portion  of an Award,  under the Plan  expires or
terminates  unexercised,  becomes  unexercisable  or is  forfeited  or otherwise
terminated,  surrendered  or  canceled  as to any  shares of Stock  without  the
delivery of such shares or other  consideration,  the shares of Stock subject to
such Award shall  thereafter  be  available  for further  Awards under the Plan.
Shares issued under the Plan may be shares of Stock of original issue, shares of
treasury stock, or shares of Stock that have been reacquired by the Company.

5.2 Subject to  adjustments  as provided in Article XII,  The maximum  number of
shares of Stock subject to Awards of any combination  that may be granted during
any one fiscal  year of the  Company to any one  individual  shall be limited to
seven hundred thousand  (700,000)  shares.  The foregoing  per-individual  limit
shall not be adjusted to effect a restoration of shares of Stock with respect to
which the related Award is terminated, surrendered or canceled.

5.3 Subject to  adjustments  as provided in Article XII,  the maximum  number of
shares of Stock subject to Award as incentive  stock options shall be limited to
fourteen  million  (14,000,000)  shares,  and the  number of  restricted  shares
released from a substantial risk of forfeiture shall not exceed five million six
hundred thousand (5,600,000), including both stock and performance units.

                                   ARTICLE VI

         6. Proceeds.  The proceeds received by the Company from the sale of
Stock pursuant to Awards granted under the Plan will be used for general
corporate purposes.

                                  ARTICLE VII

         7. Administration.

7.1 General. The Plan shall be administered by the Committee. The Committee's
determinations under the Plan (including without limitation determinations of
the persons to receive Awards, the form, amount and timing of such Awards, the
terms and provisions of such Awards and the agreements evidencing same) need not
be uniform and may be made by the Committee selectively among persons who
receive, or are eligible to receive, Awards under the Plan, whether or not such
persons are similarly situated.
<PAGE>
                                       6

7.2 Procedure. The Committee shall meet at such times and places and upon such
notice as it may determine. A majority of the members of the Committee shall
constitute a quorum. Any acts by the Committee may be taken at any meeting at
which a quorum is present and shall be by majority vote of those members
entitled to vote. Additionally, any acts reduced to writing or approved in
writing by all of the members of the Committee shall be valid acts of the
Committee. Members of the Committee who are either eligible for Awards or have
been granted Awards may vote on any matters affecting the administration of the
Plan or the grant of Awards pursuant to the Plan, except that no such member
shall act upon the granting of an Award to himself or herself, but any such
member may be counted in determining the existence of a quorum at any meeting of
the Committee during which action is taken with respect to the granting of an
Award to him or her.

7.3 Duties. The Committee shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations, agreements, guidelines
and instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable, all within the
Committee's sole and absolute discretion. The Committee shall have full power
and authority to take all other actions necessary to carry out the purpose and
intent of the Plan, including without limitation the power to accelerate or
otherwise change the time in which an Award may be exercised or becomes payable,
and to waive, in whole or in part, any restriction or condition with respect to
such Award, including but not limited to, any restriction or condition with
respect to vesting or exercisability of an Award following a Participant's
Termination of Service or death.

Notwithstanding any other provision in the Plan to the contrary, except with
respect to Awards of Incentive Stock Options (ISO's), the Committee may, at any
time prior to the exercise, lapse of restrictions or expiration of an Award,
permit a Participant to (i) defer receipt of the payment of cash or property or
other delivery of Stock that would otherwise be due by virtue of the exercise,
lapse of restrictions or expiration of an Award; or (ii) convert or exchange an
Award for another Award under the Plan or under any other plan or arrangement.
If any such actions are permitted, the Committee shall, in its sole discretion,
establish rules and procedures to accomplish such actions.

7.4 Delegation of Authority to Grant Awards. The Committee, in its discretion,
may delegate to the Chief Executive Officer of the Company all or part of the
Committee's authority and duties with respect to granting Awards, provided such
delegation is in writing and maintained in the Company's records. The Committee
may revoke or amend the terms of such a delegation at any time, but such
revocation shall not invalidate prior actions of the Chief Executive Officer of
the Company that were consistent with the terms of the Plan.

7.5 Limited Liability.  To the maximum extent permitted by law, no member of the
Committee  shall be liable for any action  taken or decision  made in good faith
relating to the Plan or any Award.

7.6 Indemnification. To the maximum extent permitted by law and by the Company's
charter and by-laws, the members of the Committee shall be indemnified by the
Company in respect of all their activities under the Plan, provided that such
indemnity shall not apply to willful acts of misconduct.

7.7 Effect of Committee's Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee's sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the Plan
and any other employee of the Company, and their respective successors in
interest.
<PAGE>
                                       7

                                  ARTICLE VIII

         8. Eligibility and Participation

8.1 Eligibility. Directors, officers, employees and consultants of the Company
or its Affiliates who, in the opinion of the Committee, are responsible for the
continued growth and development and future financial success of the business
shall be eligible to participate in the Plan.

8.2 Participation. An eligible individual shall become a Participant in this
Plan when he or she is granted an Award hereunder, as evidenced by a Grant
Agreement executed by the Company and the Participant and shall no longer be a
Participant when all Awards to a Participant have been completed, terminated or
otherwise disposed of.

                                   ARTICLE IX

         9. Stock Options

9.1 General. Subject to the other applicable provisions of the Plan, the
Committee may from time to time grant to eligible Participants Awards of ISO's
or NSO's. The ISO or NSO Awards granted shall be subject to the following terms
and conditions.

9.2 Time of Granting Options.  The granting of an Option shall take place at the
time specified in writing by the Committee.

9.3 Grant of Option. The grant of an Option shall be evidenced by a Grant
Agreement, executed by the Company and the Participant, describing the number of
shares of Stock subject to the Option, whether the Option is an ISO or NSO, the
Exercise Price of the Option, the Vesting Period for the Option and such other
terms and conditions that the Committee deems, in it sole discretion, to be
appropriate, provided that such terms and conditions are not inconsistent with
the Plan. The Grant Date shall be specified in the Grant Agreement.

9.4 Price. The price per share of Stock payable upon the exercise of each Option
(the "Exercise Price") shall be set forth in the Grant Agreement and shall not
be less than 100% of the Fair Market Value of the shares of Stock on the date
the Option is granted.

9.5 Terms of Options. The term during which each Option may be exercised shall
be determined by the Committee; provided, however, that in no event shall an ISO
be exercisable more than ten (10) years from the date it is granted. Prior to
the exercise of the Option and delivery of the share certificates represented
thereby, the Participant shall have none of the rights of a stockholder with
respect to any shares represented by an outstanding Option.

9.6 Restrictions on Incentive Stock Options. ISO Awards granted under the Plan
shall comply in all respects with Code section 422 and, as such, shall meet the
following additional requirements:

(a) Grant Date.  An ISO must be granted  within ten (10) years of the earlier of
the Plan's  adoption by the Board of  Directors  or  approval  by the  Company's
shareholders.

(b) Exercise Price and Term. The Exercise Price of an ISO shall not be less than
100% of the Fair Market Value of the shares on the date the Option is granted
and the term of the Option shall not exceed ten (10) years. Notwithstanding the
immediately preceding sentence, the Exercise Price of any ISO granted to a
Participant who owns, within the meaning of Code section 422(b)(6), after
application of the attribution rules in Code section 424(d), more than ten
percent (10%) of the total combined voting power of all classes of shares of
Stock of the Company shall be not less than 110% of the Fair Market Value of the
Stock on the Grant Date and the term of such ISO shall not exceed five (5)
years.
<PAGE>
                                       8

(c) Maximum Grant. The aggregate Fair Market Value (determined as of the Grant
Date) of shares of Stock with respect to which all ISO's first become
exercisable by any Participant in any calendar year under this or any other plan
of the Company and its Parent and Subsidiary corporations may not exceed
$100,000 or such other amount as may be permitted from time to time under Code
section 422. To the extent that such aggregate Fair Market Value shall exceed
$100,000, or other applicable amount, such Options shall be treated as NSO's. In
such case, the Company may designate the shares of Stock that are to be treated
as stock acquired pursuant to the exercise of an ISO by issuing a separate
certificate for such shares and identifying the certificate as ISO shares in the
stock transfer records of the Company.

(d)  Participant.  ISO's shall only be issued to  employees  of the Company or a
Related Corporation.

(e) Tandem Options Prohibited. An ISO may not be granted in tandem with a NSO in
such a manner that the exercise of one affects a Participant's right to exercise
the other.

(f) Designation. No option shall be an ISO unless so designated by the Committee
at the time of grant or in the Grant Agreement evidencing such Option.

(g) Other Terms and Conditions.  Options may contain such other provisions,  not
inconsistent  with the provisions of the Plan, as the Committee  shall determine
is appropriate from time to time.

9.7 Exercisability.

(a) Except as otherwise provided by the Committee in the applicable Grant Award
or otherwise, during the lifetime of the Participant, the Option shall be
exercisable only by the Participant or, during the period the Participant is
under a legal disability, by the Participant's guardian or legal representative.
Unless specified to the contrary herein or in the applicable Grant Agreement,
Options cannot be exercised by a Participant subsequent to his or her
Termination of Service.

(b) An Option may be exercised in whole at any time, or in part from time to
time, within the Option Period to the extent the Option is exercisable on the
date of exercise.

(c) Except as otherwise provided by the Committee in the applicable Grant Award
or otherwise, each Option shall terminate and may no longer be exercised if the
Optionee ceases to perform services for the Company or an Affiliate in
accordance with the following:

         (i) If an Optionee ceases to be an active employee, consultant or
non-employee Director of the Company or any Affiliate other than by reason of
death or retirement, absent in any case a determination by the Committee to the
contrary, any Options which were exercisable by the Optionee on the date of
cessation of active employment may be exercised no later that the earlier of (a)
the expiration date of the Option or (b) the respective periods listed below.
Notwithstanding the foregoing, in the event an Optionee fails to exercise an
Incentive Stock Option within three months after cessation of employment with
the Company or a Related Corporation, such Option will be treated as a
Non-Statutory Stock Option pursuant to Section 422 of the Code. The respective
periods following cessation of active employment in which exercisable Options
may be exercised are as follows:
<PAGE>
                                       9

                                                Period Following Last Day
         Reason for Cessation                  of Active Employment Within
         of Active Employment                 Which Option May Be Exercised

         Medical Leave of Absence                    During such leave

         Discharge for Cause or other                None
         severance of employment
         determined by Committee to
         warrant termination of option

         Layoff or other involuntary                 Three Years
         termination without Cause

         Voluntary termination (non-retirement)      Three Months

         (ii) If an Optionee's employment terminates because of death, the
Options  shall be fully  vested  automatically  without  regard to  whether  any
applicable vesting requirements in the Grant Agreement have been fulfilled,  and
the Options may be exercised at any time before the expiration date, but only by
the  Optionee's  estate or by the  person(s)  who acquired the right to exercise
such Option by bequest or inheritance or by reason of the death of the Optionee.

        (iii) If an Optionee's employment terminates because of Retirement, any
Options which were issued at least one year prior to the date of  termination of
employment  will vest in  accordance  with the Vesting  Period  specified in the
Grant  Agreement  and may be exercised  any time before their  expiration  date,
provided such Options are  exercisable as of the exercise date.  Notwithstanding
the  foregoing,  in the event an Optionee  fails to exercise an Incentive  Stock
Option within three months after the date of his or her retirement,  such Option
will be treated as a Non-Statutory Stock Option.

(d) The Option may not be exercised  for more shares  (subject to  adjustment as
provided in Section 12.1) after the  Participant's  termination of employment or
engagement, or cessation of service as a director or the Participant's death, as
the case may be, than the Participant was entitled to purchase thereunder at the
time of the Participant's termination of employment or engagement.

9.8 Exercise of Option. An Option may be exercised only by giving written
notice, in the manner provided in Section 15.9 hereof, specifying the number of
shares as to which the Option is being exercised, accompanied (except as
otherwise provided in Section 9.9) by full payment for such shares in the form
of check or bank draft payable to the order of the Company or other shares of
the Stock with a current Fair Market Value equal to the Option Price of the
shares to be purchased. Receipt by the Company of such notice and payment shall
constitute the exercise of the Option or a part thereof. Within 20 days
thereafter, the Company shall deliver or cause to be delivered to the Optionee a
certificate or certificates (or other evidence of ownership) for the number of
shares then being purchased. Such shares shall be fully paid and nonassessable.
If such shares are not at that time effectively registered under the Securities
Act of 1933, as amended, the Optionee shall include with such notice a letter,
in form and substance satisfactory to the Company, confirming that such shares
are being purchased for the Optionee's own account for investment and not with a
view to distribution.
<PAGE>
                                       10

9.9 Cashless Exercise. In lieu of payment by check, bank draft or other shares
of Stock accompanying the written notice of exercise, an Optionee may, unless
prohibited by applicable law, elect to effect payment by including with the
written notice irrevocable instructions to deliver for sale to a registered
securities broker acceptable to the Company a number of the shares subject to
the Option being exercised sufficient, after brokerage commissions, to cover the
aggregate exercise price of such Option and, if the Optionee further elects, the
Optionee's withholding obligations with respect to such exercise referred to in
Section 15.8, together with irrevocable instructions to such broker to sell such
shares and to remit directly to the Company such aggregate exercise price and,
if the Optionee has so elected, the amount of such withholding obligation. The
Company shall not be required to deliver to such securities broker any stock
certificate (or other evidence of ownership) for such shares until it has
received from the broker such exercise price and, if the Optionee has so
elected, such withholding obligation amount.

9.10  Transferability.  Except  as  otherwise  provided  herein  or in the Grant
Agreement,  Stock Options  granted to  individuals  other than Company  Officers
shall not be  transferable,  otherwise  than by will or the laws of descent  and
distribution, and may be exercised during the life of the holder thereof only by
him or her.  Non-Statutory Options granted hereunder to a Company Officer may be
transferred to a member of such Company Officer's  Immediate Family or trusts or
other  entities  established  solely for the  benefit of such  Immediate  Family
members,  so long as the transferee is a person entitled to rely on the Form S-8
filed by the Company with respect to the Plan. The holder of an Option or his or
her legal representatives,  legatees, distributees, or permitted transferees, as
the case may be, shall have none of the rights of a stockholder  with respect to
any shares  subject to such Option  until such shares have been issued to him or
her under this Plan.

                                   ARTICLE X

         10. Stock Appreciation Rights.

10.1 Award of SAR's. Subject to the other applicable provisions of the Plan, the
Committee may at any time and from time to time grant SAR's to eligible
participants, either on a free-standing basis (without regard to or in addition
to the grant of an Option) or on a tandem basis (related to the grant of an
underlying Option), as it determines. SAR's granted in tandem with or in
addition to an Option may be granted either at the same time as the Option or at
a later time; provided, however, that a tandem SAR shall not be granted with
respect to any outstanding ISO Award without the consent of the Participant.
SAR's shall be evidenced by Grant Agreements, executed by the Company and the
Participant, stating the number of shares of Stock subject to the SAR and the
terms and conditions of such SAR, in such form as the Committee may from time to
time determine. The term during which each SAR may be exercised shall be
determined by the Committee. The Participant shall have none of the rights of a
stockholder with respect to any shares of Stock represented by a SAR.

10.2 Restrictions on Tandem SAR's. ISO's may not may be surrendered in
connection with the exercise of a tandem SAR unless the Fair Market Value of the
Stock subject to the ISO is greater than the Exercise Price for such ISO. SAR's
granted in tandem with Options shall be exercisable only to the same extent and
subject to the same conditions as the related Options are exercisable. The
Committee may, in its discretion, prescribe additional conditions to the
exercise of any such tandem SAR.
<PAGE>
                                       11

10.3 Amount of Payment Upon Exercise of SAR's. A SAR shall entitle the
Participant to receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the product of (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Stock
over (B) the base price per share specified in the Grant Agreement (which shall
be determined by the Committee but which shall not be less than 100% of the Fair
Market Value of one share of Stock on the date of grant of the SAR), times (ii)
the number of shares specified by the SAR, or portion thereof, which is
exercised. In the case of exercise of a tandem SAR, such payment shall be made
in exchange for the surrender of the unexercised related Option (or any portions
thereof which the Participant from time to time determines to surrender for this
purpose).

10.4 Form of Payment Upon Exercise of SAR's. Payment by the Company of the
amount receivable upon any exercise of a SAR may be made by the delivery of
Stock or cash, or any combination of Stock and cash, as determined in the sole
discretion of the Committee from time to time. If upon settlement of the
exercise of an SAR a Participant is to receive a portion of such payment in
shares of Stock, the number of shares shall be determined by dividing such
portion by the Fair Market Value of a share of Stock on the exercise date. No
fractional shares shall be used for such payment and the Committee shall
determine whether cash shall be given in lieu of such fractional shares or
whether such fractional shares shall be eliminated.

10.5  Transferability.  SAR's may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of except as specifically provided in the
Grant Agreement.

                                   ARTICLE XI

         11. Restricted Stock Awards and Stock Unit Awards

11.1 Grants. Subject to the other applicable provisions of the Plan, the
Committee may at any time grant Restricted Stock Awards or Stock Units to
Participants in such amounts and for such consideration, including no
consideration or such minimum consideration as may be required by law, as it
determines. Such Awards shall be granted pursuant to a Grant Agreement.

11.2 Terms and Conditions. A Restricted Stock Award entitles the recipient to
acquire shares of Stock and a Stock Unit Award entitles the recipient to be paid
the Fair Market Value of the Stock on the date on which restrictions lapse.
Stock Units may be settled in Stock, cash or a combination thereof, as
determined by the Committee. Restricted Stock Awards and Stock Unit Awards are
subject to Vesting Periods and other restrictions and conditions as the
Committee may include in the Grant Agreement. Such restrictions or conditions
may be based on continuing employment or engagement (or other business
relationship) and/or achievement of pre-established performance goals. The
Committee shall specify in the Grant Agreement the dates and/or the description
of how pre-established performance goals shall be deemed to have been obtained
and any other conditions upon which Restricted Stock Awards or Stock Units shall
become vested. If the Participant or the Company fails to achieve the designated
goals or the Participant incurs a Termination of Service prior to the expiration
of the Vesting Period, the Participant shall forfeit all shares of Stock or cash
subject to the Award which have not vested as of such date. Restricted Stock
Awards or Stock Units, if not sooner terminated, shall vest upon Participant's
death.

11.3  Restricted Stock Awards.

(a) Each Restricted Stock Award shall specify the applicable restrictions, on
such shares of Stock, the duration of such restrictions, and the time or times
at which such restrictions shall lapse with respect to all or a specified number
of shares of Stock that are part of the Award. Notwithstanding the foregoing,
the Committee may reduce or shorten the duration of any restriction applicable
to any shares of Stock awarded to any Participant under the Plan.
<PAGE>
                                       12

(b) Share certificates with respect to restricted shares of Stock shall be
issued (or the shares shall be held in a book entry position through the
transfer agent's direct registration service) at the time of grant of the
Restricted Stock Award, subject to forfeiture if the restrictions do not lapse,
or upon lapse of the restrictions. If share certificates are issued at the time
of grant of the Restricted Stock Award, the certificates shall bear an
appropriate legend with respect to the restrictions applicable to such
Restricted Stock Award (as described in Section 11.2) or, alternatively, the
Participant may be required to deposit the certificates with the Company during
the period of any restriction thereon and to execute a blank stock power or
other instrument of transfer. If shares are in a book entry position with the
transfer agent's direct registration service, the restrictions shall be
appropriately noted.

(c) Except as otherwise provided by the Committee, during such period of
restriction following the issuance of share certificates, the Participant shall
have all of the rights of a holder of Stock, including but not limited to the
rights to receive dividends (or amounts equivalent to dividends) and to vote
with respect to the restricted shares. Upon lapse of restrictions on a
Restricted Stock Award, the Committee may provide that, to the extent not
already received, the Participant will be entitled to receive any amounts per
share pursuant to any dividend or distribution paid by the Company on its Stock
to stockholders of record after grant of the Restricted Stock Award and prior to
the issuance of the share certificates (or holding in a book entry position
through the transfer agent).

11.4  Stock Unit Awards.

(a) The grant of Stock Units shall be evidenced by a Grant Agreement, executed
by the Company and the Participant, that incorporates the terms of the Plan and
states the number of Stock Units evidenced thereby and the terms and conditions
of such Stock Units in such form as the Committee may from time to time
determine. The Grant Agreement shall provide for payment of the Stock Unit
Awards upon expiration of a term certain.

(b) Stock Unit awards shall be subject to such rules and regulations as the
Committee may prescribe and/or such determinations, orders, or decisions as the
Committee may make.

(c) Except as otherwise provided in the Grant Agreement, the Participant shall
have none of the rights of a stockholder with respect to any shares of Stock
represented by a Stock Unit as a result of the grant of a Stock Unit to the
Participant.

11.5 Transferability. Unvested Restricted Stock Awards or Stock Units may not be
sold, assigned, transferred, pledged or otherwise encumbered or disposed of
except as specifically provided in the Grant Agreement.

                                  ARTICLE XII

         12. Corporate Transactions

12.1 Adjustment of Number and Price of Shares. Pro rata adjustment shall be made
in the maximum number of shares of Stock subject to the Plan or that may be
awarded to any individual in any year to give effect to any stock dividends,
stock splits, stock combinations, recapitalizations and other similar changes in
the capital structure of the Company. Pro rata adjustments shall be made in the
number, kind and price of shares of Stock covered by any outstanding Award
hereunder to give effect to any stock dividends, stock splits, stock
combinations, recapitalizations and similar changes in the capital structure of
the Company, or a merger, dissolution or reorganization of the Company, after
the date the Award is granted, so that the recipient of the Award is treated in
a manner equivalent to that of holders of the underlying Stock. No Options will
be repriced, replaced or regranted, through cancellation or by lowering the
exercise price of previously granted Awards, without the express approval of the
shareholders.
<PAGE>
                                       13

12.2  Change in Corporate Control.  Upon a Change in Corporate Control:

         (a) Any Options and SAR's outstanding as of the date of such Change in
Corporate Control, and which are not then exercisable and vested, shall become
fully exercisable and vested.

         (b) The restrictions and deferral limitations applicable to any
Restricted Stock and Stock Units shall lapse, such Restricted Stock shall become
free of all restrictions and become fully vested and transferable, and such
Stock Units shall be payable in full.

         (c) The Committee may also make additional adjustments and/or
settlements of outstanding Awards as it deems appropriate and consistent with
the Plan's purposes, including without limitation settlement of all Options and
Stock Appreciation Rights for a cash payment equal to the excess (if any) of the
Fair Market Value of the Stock subject thereto over the aggregate exercise or
base price thereof.

12.3 Substitution of Options. In the event that, by reason of a corporate
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board shall authorize the issuance or
assumption of a stock option or stock options in a transaction to which Code
section 424(a) applies, then, notwithstanding any other provision of the Plan,
the Committee may grant an Option upon such terms and conditions as it may deem
appropriate for the purpose of assumption of the old option, or substitution of
a new Option for the old option, in conformity with the provisions of Code
section 424(a) and the rules and regulations thereunder, as they may be amended
from time to time.

12.4 Fractional Shares. No adjustment or substitution provided for in this
Article shall require the Company to issue or to sell a fractional share under
any Grant Agreement and the total adjustment or substitution with respect to
each Grant Agreement shall be limited accordingly.

12.5 Rescission and Revocation of Awards. A Participant may request in writing
that the Committee rescind or revoke an Award and such request shall specify the
reasons that rescission or revocation is sought. The Committee, in its absolute
discretion, may grant, deny or otherwise rule on the request .


                                  ARTICLE XIII

         13. Reservation of Stock. The Company shall at all times during the
term of the Options reserve and keep available such number of shares of the
Stock as will be sufficient to satisfy the requirements of this Plan and shall
pay all fees and expenses necessarily incurred by the Company in connection
therewith.

                                  ARTICLE XIV

         14. Amendment and Termination

14.1  Amendment.  The  Committee may amend the Plan at any time and from time to
time,  provided  that (i) no  amendment  shall  deprive any person of any rights
granted under the Plan before the effective date of such amendment, without such
person's consent, (ii) no amendment can increase the maximum number of shares of
Stock subject to award under the Plan,  and (iii)  amendments  may be subject to
shareholder  approval  to the  extent  needed to  comply  with  applicable  law.
Notwithstanding the foregoing, the Committee may amend the Plan and/or any Award
granted under the Plan at any time and from time to time, without the consent of
affected Participants and their beneficiaries,  to the extent necessary to cause
the Plan or  Award to  comply  with  applicable  law,  stock  exchange  rules or
accounting rules.
<PAGE>
                                       14

14.2  Termination.  The  Committee  reserves the right to terminate  the Plan in
whole or in part at any time,  without  the  consent of any person  granted  any
rights under the Plan.

                                   ARTICLE XV

         15. Other Conditions

15.1 Compliance with Governmental Regulations. Notwithstanding any provision of
the Plan or the terms of any Grant Agreement entered into pursuant to the Plan,
the Company shall not be required to issue any shares hereunder prior to
registration of the shares subject to the Plan under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, if such
registration shall be necessary, or before compliance by the Corporation or any
Participant with any other provisions of either of those acts or of regulations
or rulings of the Securities and Exchange Commission thereunder, or before
compliance with other federal and state laws and regulations and rulings
thereunder, including the rules of any applicable securities exchange or
quotation system. The Company shall use its best efforts to effect such
registrations and to comply with such laws, regulations and rulings forthwith
upon advice by its counsel that any such registration or compliance is
necessary.

15.2 Company Charter and Bylaws. This Plan is subject to the charter and by-laws
of the Company, as they may be amended from time to time.

15.3 No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a Participant or any other person. To the
extent that any Participant or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.

15.4 No Guarantee of Employment. Participation in this Plan shall not be
construed to confer upon any Participant the legal right to be retained in the
employ of the Company or give any person any right to any payment whatsoever,
except to the extent of the benefits provided for hereunder. Each Participant
shall remain subject to discharge to the same extent as if this Plan had never
been adopted. Nothing in this Plan shall prevent, interfere with or limit in any
way the right of the Company to terminate a Participant's employment at any
time, whether or not such termination would result in: (i) the failure of any
Award to vest; (ii) the forfeiture of any unvested or vested portion of any
Award under the Plan; and/or (iii) any other adverse effect on the Participant's
interests under the Plan.

15.5 No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or its Affiliates from adopting or continuing in
effect other compensation arrangements (whether such arrangements be generally
applicable or applicable only in specific cases) as the Committee, in its
discretion determines desirable, including without limitation the granting of
stock options, stock awards, stock appreciation rights or phantom stock units
otherwise than under the Plan.

15.6 Governing Law. The provisions of this Plan shall be governed by, construed
and administered in accordance with applicable federal law; provided, however,
that to the extent not in conflict with federal law, this Plan shall be governed
by, construed and administered under the laws of the State of Delaware, other
than its laws respecting choice of law.

15.7 Limitation of Rights in the Option Shares. The Optionee shall not be deemed
for any purpose to be a  stockholder  of the Company  with respect to any of the
Option  Shares  except to the extent that the Option  shall have been  exercised
with  respect  thereto and, in addition,  a  certificate  shall have been issued
therefor and delivered to the Optionee.
<PAGE>
                                       15

15.8  Withholding.  No later than the date as of which an amount  first  becomes
includible  in the gross  income  of the  Participant  for  federal  income  tax
purposes with respect to any Award under the Plan, the participant  shall pay to
the Company,  or make  arrangements  satisfactory  to the Company  regarding the
payment of, any federal,  state,  local or foreign taxes of any kind required by
law to be withheld with respect to such amount.  Unless otherwise  determined by
the Company, withholding obligations may be settled with Common Stock, including
Common  Stock  that is part of the  Award  that  gives  rise to the  withholding
requirement;   provided,  that  not  more  than  the  legally  required  minimum
withholding  may be settled with Common Stock.  The  obligations  of the Company
under the Plan shall be  conditional  on such payment or  arrangements,  and the
Company and its Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment otherwise due to the participant.  The
Committee  may establish  such  procedures  as it deems  appropriate,  including
making irrevocable elections, for the settlement of withholding obligations with
Common Stock.

15.9  Notices.  Any  communication  or notice  required or permitted to be given
under the Plan shall be in writing,  and mailed by registered or certified  mail
or  delivered  in hand,  if to the  Company,  to 141 Spring  Street,  Lexington,
Massachusetts 02421, Attention:  Senior Vice President,  Human Resources and, if
to the Optionee, to the address as the Optionee shall last have furnished to the
communicating party.