<PAGE>
                                       1

                              EMPLOYMENT AGREEMENT

     This Employment Agreement  ("Agreement") is made this 5th day of May, 1995,
by and between McDonnell Douglas  Corporation,  a Maryland  corporation ("MDC"),
and Edward C. Bavaria ("ECB"), currently a resident of Cincinnati, Ohio.

                                    RECITALS

     A.  MDC is  engaged  in the  aerospace  business,  which  includes  Douglas
Aircraft  Company,  an unincorporated  business unit engaged  principally in the
manufacturing, marketing, and sale of commercial aircraft ("DAC").

     B. MDC desires to employ ECB as the Deputy President of DAC and ECB desires
to be so employed by MDC, all upon the terms and conditions set forth herein.

                                    AGREEMENT

             In consideration of the foregoing, the representations,  warranties
and covenants herein contained,  and other good and valuable  consideration (the
receipt,  adequacy  and  sufficiency  of which are  hereby  acknowledged  by the
parties by their execution hereof), the parties agree as follows:

     1. Employment. MDC agrees to employ ECB as Deputy President of DAC, and ECB
agrees to be so employed during the term of this  Agreement,  upon the terms and
conditions hereinafter set forth.

     2. Duties.  During the term of this  Agreement,  ECB shall  diligently  and
faithfully  carry out his duties as Deputy  President of DAC, which duties shall
include: (a) primary  responsibility for the marketing and sales of MD-80/90 and
MD-11 aircraft,  and the successful launching of the MD-95 aircraft program; (b)
performance of additional  duties as may be assigned by the DAC  President,  the
MDC Chief Executive Officer ("CEO") or the MDC Board of Directors ("Board"); (c)
devoting his full-time and best efforts to  performing  his duties  hereunder to
the best of his  abilities  and in  manner  consistent  with MDC  standards  and
policies;  and (d) such other duties as are appropriate for an employee  holding
the position of Deputy President of DAC.

     3. Term of Employment.  Employment of ECB pursuant to this Agreement by MDC
shall commence on May 15, 1995 and,  unless  terminated  earlier as provided for
herein, shall terminate on August 14, 1997.

     4. Place of Performance. In connection with ECB's employment hereunder, ECB
is to be based at the principal  executive offices of DAC,  currently located in
Long Beach,  California,  except for required travel on DAC business.  DAC shall
furnish ECB with office space,  stenographic and secretarial assistance and such
other facilities,  equipment,  and services as are suitable to ECB's position at
DAC and as are adequate for the performance of his duties hereunder.

     5. Compensation.  As full consideration for all services ECB renders to MDC
hereunder, MDC shall compensate ECB in the following manner:

<PAGE>
                                       2


               A.  Annual  Salary.  MDC  shall  pay ECB an  annual  base  salary
          hereunder of $400,000, payable in equal weekly installments or at such
          other  intervals as may be agreed upon by MDC and ECB,  plus  targeted
          annual  incentive  compensation  determined in  accordance  with MDC's
          Performance Sharing Plan ("PSP") formula.  The actual amount of earned
          incentive  compensation  shall be based on ECB's and DAC's achievement
          of performance  goals and  performance  factors set in accordance with
          the PSP;  provided,  however,  that (i) earned incentive  compensation
          shall not be less than $400,000 per annum; and (ii) base and incentive
          compensation in each calendar year shall be prorated for the period of
          employment  during  such year.  A copy of the PSP is  attached to this
          Agreement as Exhibit A and is incorporated herein by this reference.

               B.  Long-Term  Incentive   Compensation.   Years-of-Service-based
          restricted stock  ("Restricted  Stock") to be granted  effective as of
          the commencement date of employment, with vesting as follows:

                    i. 6,000 shares on August 15, 1997, and an additional  6,000
               shares on August 15, 1998.

                    ii. All  Restricted  Stock shall be granted and issued under
               the terms of the MDC 1994  Performance and Equity  Incentive Plan
               ("PEIP") (including agreements to be issued pursuant to the terms
               thereof),  and ECB's  participation  thereunder shall continue as
               long as such plan remains in effect,  with  participation  on the
               same basis as other  corporate  officers in any future  incentive
               compensation   or  other  bonus  plan  covering  MDC's  executive
               employees.  A copy of the PEIP is attached to this  Agreement  as
               Exhibit  B  and  is   incorporated   herein  by  this  reference.
               Notwithstanding   the   foregoing,    the   Long-Term   Incentive
               Compensation  in this  Section  5.B.  is intended to be the total
               long-term  incentive  compensation  of ECB during his  employment
               with MDC.  Additional  long-term incentive awards to ECB, if any,
               will be  granted  at the sole  discretion  of the MDC  Management
               Succession and Compensation Committee ("Compensation Committee").

                    iii. In the event ECB's  employment by MDC terminates  prior
               to August 14, 1997,  the number of shares of Restricted  Stock to
               be received by ECB shall be determined as follows:

                         (a) If ECB voluntarily  terminates his  employment,  or
                    his   employment   is  terminated  by  MDC  for  "cause"  in
                    accordance   with  Section  6.A.,   all  rights  to  receive
                    Restricted Stock will terminate.

                         (b) If ECB's  employment  is  terminated as a result of
                    his death or incapacity  (as  determined in accordance  with
                    Section 6.E.),  the MDC  Compensation  Committee in its sole
                    discretion  will  determine  the  reduction,  if any, to the
                    number of shares of  Restricted  Stock,  but the number will
                    not be less than pro rata to the length of his employment to
                    the term of this Agreement, payable in equal installments on
                    each of the scheduled vesting date(s).

<PAGE>
                                     3

                         (c) If ECB breaches the  noncompete or  confidentiality
                    provisions  of  Section  7 or 8  after  termination  of this
                    Agreement,   any  shares  of  Restricted  Stock  upon  which
                    restrictions  have not yet lapsed prior to such breach shall
                    terminate.

                         (d) If this  Agreement is terminated by ECB for "cause"
                    in accordance with Section 6.B., the Restricted  Stock shall
                    vest and be  payable  in equal  installments  on each of the
                    selected vesting dates.

          C. Hiring Bonus:  Within one week of the execution of this  Agreement,
     ECB shall receive from MDC a hiring bonus of $50,000.

          D. Sales of Residences.

               i. ECB may place his  Cincinnati  residence for sale. If not sold
          by  August  31,  1995,  MDC  shall  provide   third-party   home  sale
          assistance.  (See  Exhibit C attached  hereto,  Third-Party  Home Sale
          Assistance Program, which is incorporated herein by this reference.)

               ii.  In the  event  ECB  purchases  a  residence  in Long  Beach,
          California  during the term of this  Agreement,  upon  termination  of
          ECB's  employment  by MDC for any  reason  other  than for  "cause" in
          accordance with Section 6.A., ECB may place his Long Beach, California
          residence  for  sale.  If not  sold  within  six  (6)  months  of such
          termination of  employment,  MDC shall provide  third-party  home sale
          assistance of the same type and scope as provided for in Exhibit C.

          D. Transfer and Travel Allowances. During the term of this Agreement:

               i. MDC shall reimburse ECB for all reasonable out-of-pocket costs
          incurred by him in moving his residence from Cincinnati,  Ohio to Long
          Beach, California.

               ii.  MDC shall  reimburse  ECB for all  reasonable  out-of-pocket
          costs  incurred  by him in  moving  his  residence  from  Long  Beach,
          California to Sarasota,  Florida upon  termination of ECB's employment
          with MDC for any reason  other than for  "cause"  in  accordance  with
          Section 6.A.

               iii. MDC shall reimburse ECB for all reasonable out-of-pocket air
          travel to and from his home in  Sarasota,  Florida,  as  needed,  with
          reimbursed trips not to exceed six round trips per year.

          E.  Other  Benefits.  ECB shall be  entitled  during  the term of this
     Agreement to:

               i. enjoy certain  personal  benefits  provided by MDC,  including
          reimbursement in full of all first-class travel for business purposes;
          reimbursement for all first-class business travel for ECB's wife, when
          necessary or  appropriate  as  determined  by the DAC President or the
          CEO;  and  reimbursement  of  reasonable  out-of-pocket  entertainment
          expenses  reasonably  incurred  by ECB in  performance  of his  duties
          hereunder;
<PAGE>
                                       4


               ii.   receive  such  employee   benefits   customary  for  senior
          executives  and officers of MDC, on the same terms and  conditions  as
          generally made available to such executives, including:

               (a) health insurance (to include family coverage, if customary);
               (b) life, accident, and disability insurance;
               (c) coverage under directors and officers liability insurance;
               (d) corporate  indemnification  as  available  for other  senior
                   management and officers;
               (e) business expense reimbursement;
               (f) business and/or social club memberships (non-golf); and
               (g) participation in pension and savings plans.

               iii. three weeks of fully paid vacation during each calendar year
          at a time or times selected by ECB,  exclusive of the week off between
          Christmas and New Year's; and

               iv. those  holidays  designated  by MDC during which MDC's normal
          business operations are closed.

     6.  Termination.  The  employment of ECB hereunder by MDC may be terminated
under the circumstances set forth below.

          A. Cause.  MDC may terminate ECB's  employment  hereunder for cause as
     determined  in the sole  discretion  of the MDC CEO or the MDC  Board.  For
     purposes hereof,  "cause" is defined as gross neglect of duty,  substantial
     inability  or failure by ECB to  perform  his duties and  responsibilities,
     failure to pass a drug-screening test, or material breach of this Agreement
     by ECB.  In the event of  termination  by MDC for  cause,  ECB will have no
     further  entitlements  (other  than those that may have  previously  vested
     under any employee benefit programs).

          B. Termination for  Convenience.  MDC may terminate this Agreement for
     convenience  at any time. In such event,  ECB shall be entitled to one year
     of compensation  (base salary plus incentive  compensation as determined in
     accordance  with Section  5.A.) and  benefits,  except if  termination  for
     convenience  occurs in the final year of this Agreement,  such compensation
     shall continue to be paid only to the end of the original term.

          C. For Cause by ECB. ECB is entitled to terminate  this  Agreement for
     cause in the event of a material  breach of this  Agreement by MDC. In such
     event, ECB will be entitled to continuance of compensation,  plus all other
     benefits as if MDC had terminated him for its convenience.

          D. For Convenience by ECB. ECB is entitled to terminate this Agreement
     for  convenience  at any time.  In such  event,  ECB will  have no  further
     entitlements,  except  those  that may have  previously  vested  under  any
     employee benefit programs.

<PAGE>
                                      5

          E. Incapacity.  "Incapacity" shall mean ECB's inability to perform the
     essential  functions of his duties  hereunder for health  reasons for three
     months in any twelve-month  period. In the event of ECB's  incapacity,  MDC
     shall continue to make payments to him hereunder to the end of the month in
     which  incapacity   shall  be  deemed  by  MDC  to  have  occurred.   ECB's
     compensation during any period of incapacity prior to the effective date of
     such termination is to be the amounts payable to him hereunder.  ECB is not
     entitled to any further  compensation from MDC for any period subsequent to
     the effective date of such termination.

          F. Death. If ECB dies during the term of this Agreement, MDC shall pay
     to ECB's estate the compensation  that would otherwise be payable to ECB up
     to the end of the month in which  his  death  occurs.  Such  payment  is in
     addition to payments  received from, and does not preclude ECB or his heirs
     from  participating  in, MDC's accidental death, life insurance and similar
     plans in accordance with the terms of such plans.  MDC's obligations to pay
     ECB  additional  compensation  hereunder  terminates  at  such  time as MDC
     complies with its obligations under this Section.

     7. Noncompete.

          A. ECB agrees that during the three (3) year period  beginning  on the
     date of termination of his employment with MDC for any reason, ECB may not,
     either  individually or with or through an affiliate of ECB,  undertake any
     employment  or perform any  services  for any other  aircraft  manufacturer
     which competes substantially with MDC where ECB's responsibilities would be
     similar to his responsibilities at MDC.

          B.  Because of the  potential  compensation  to be paid to ECB and his
     duties and  responsibilities  under  this  Agreement,  ECB agrees  that the
     provisions of Section 7.A. are reasonable and necessary to protect MDC.

     8. Confidential Information.

          A. Immediately upon ECB's termination of employment, ECB is to deliver
     to the DAC President or the CEO all materials and things  relating to ECB's
     employment by MDC, including any and all materials and things embodying any
     of the confidential  information  described in Section 8.B. ECB may neither
     retain any copies or  reproductions  thereof nor deliver any such materials
     and things or copies or reproductions thereof to any third person.

          B. ECB acknowledges that, in the course of his employment with MDC, he
     will become  acquainted with  confidential  and proprietary  information of
     MDC. ECB agrees that he will not, without the prior written consent of MDC,
     disclose or make any use of such  confidential  or proprietary  information
     except in the ordinary  course of his employment  with MDC or except as may
     be requested by MDC or otherwise be required by applicable law.


<PAGE>
                                       6

          C.  During the term of his  employment  with MDC,  and for a period of
     five  years  thereafter,   ECB  will  not  disclose  or  otherwise  provide
     information  or documents of a confidential  or  proprietary  nature (other
     than in the ordinary course of employment with MDC) to any person regarding
     MDC (i)  without  the prior  written  consent of MDC (which  consent may be
     granted  or  withheld  by MDC in MDC's  sole  discretion),  (ii)  except to
     regulatory  officials  having  jurisdiction  over ECB,  or (iii)  except as
     required by law or legal process or in connection with any legal proceeding
     to which ECB is a party or is  otherwise  subject.  In any event,  ECB will
     immediately  notify the CEO of any and all  requests  or  demands  for such
     information  or  documents.  This Section  applies to all  information  and
     documents regarding MDC, whether or not the same is confidential.

          D. ECB's right to receive  payments to be made to him under  Section 5
     hereof  shall  immediately  terminate on any breach by ECB of the terms and
     conditions of Section 7 or 8 hereof.

     9.  Amendment and  Modification.  No amendment,  modification,  supplement,
termination,  consent or waiver of any provision of this Agreement,  nor consent
to any departure therefrom, will in any event be effective unless the same is in
writing  and is signed  by the party  against  whom  enforcement  of the same is
sought.  Any waiver of any  provision of this  Agreement  and any consent to any
departure  from the terms of any provision of this  Agreement is to be effective
only in the specific instance and for the specific purpose for which given.

     10.  Approvals and Consents.  If any provision hereof requires the approval
or consent of any party to any act or omission,  such approval or consent is not
to be unreasonably withheld or delayed except as set forth herein.

     11.  Assignments.  No party may  assign or  transfer  any of its  rights or
obligations  under this  Agreement to any other person without the prior written
consent of the other parties.

     12.  Captions.  Captions  contained in this  Agreement  have been  inserted
herein only as a matter of convenience  and in no way define,  limit,  extend or
describe the scope of this Agreement or the intent of any provision hereof.

     13.  Counterpart  Facsimile  Execution.  For  purposes  of  executing  this
Agreement,  a document signed and transmitted by facsimile machine or telecopier
is to be treated as an original  document.  The signature of any party  thereon,
for purposes  hereof,  is to be  considered  as an original  signature,  and the
document  transmitted  is to be considered to have the same binding effect as an
original  signature or an original  document.  At the request of any party,  any
facsimile  or telecopy  document is to be  re-executed  in original  form by the
parties who executed the facsimile or telecopy document.  No party may raise the
use of a facsimile  machine or  telecopier  or the fact that any  signature  was
transmitted through the use of a facsimile or telecopier machine as a defense to
the enforcement of this Agreement or any amendment or other document executed in
compliance with this Section.

     14.  Counterparts.  This  Agreement  may be  executed by the parties on any
number  of  separate  counterparts,   and  all  such  counterparts  so  executed
constitute one agreement binding on all the parties notwithstanding that all the
parties are not signatories to the same counterpart.
<PAGE>
                                      7


     15. Entire Agreement.  This Agreement and all of the exhibits and schedules
attached to this  Agreement  constitute the entire  agreement  among the parties
pertaining to the subject  matter hereof and  supersedes  all prior  agreements,
letters of intent, understandings,  negotiations and discussions of the parties,
whether oral or written.

     16. Failure or Delay. No failure on the part of any party to exercise,  and
no delay in exercising,  any right,  power or privilege  hereunder operates as a
waiver thereof;  nor does any single or partial exercise of any right,  power or
privilege  hereunder  preclude  any other or further  exercise  thereof,  or the
exercise of any other right,  power or privilege.  No notice to or demand on any
party in any case entitles  such party to any other or further  notice or demand
in similar or other circumstances.

     17. Further  Assurances.  The parties will execute and deliver such further
instruments  and do such further acts and things as may be required to carry out
the intent and purpose of this Agreement.

     18.  Governing  Law. This  Agreement and the rights and  obligations of the
parties  hereunder  are to be  governed  by and  construed  and  interpreted  in
accordance with the laws of the State of California applicable to contracts made
and to be  performed  wholly  within  California,  without  regard  to choice or
conflict of laws rules.

     19. Legal Fees.  Except as otherwise  provided herein,  all legal and other
costs  and  expenses   incurred  in  connection  with  this  Agreement  and  the
transactions  contemplated  hereby  are to be paid by the party  incurring  such
costs and  expenses.  In the event any party  brings suit to construe or enforce
the terms  hereof,  or raises this  Agreement  as a defense in a suit brought by
another party,  the prevailing  party is entitled to recover its attorneys' fees
and expenses.

     20.  Notices.   All  notices,   consents,   requests,   demands  and  other
communications  hereunder are to be in writing, and are deemed to have been duly
given or made: (a) when delivered in person,  (b) three days after  deposited in
the  United  States  mail,  first  class  postage  prepaid,  (c) in the  case of
telegraph or overnight courier services,  one business day after delivery to the
telegraph MDC or overnight  courier service with payment provided for, or (d) in
the case of telex or telecopy or fax, when sent,  verification received, in each
case addressed as follows:



<PAGE>
                                       8



        (i)    if to MDC:

               Harry C. Stonecipher, President & Chief Executive Officer
               McDonnell Douglas Corporation
               Mailcode:  100 1060
               P.O. Box 516
               St. Louis, MO 63166
               Fax #:  (314) 234-8296

               with a copy to:

               F. Mark Kuhlmann, Sr. Vice President-Administration
               & General Counsel
               McDonnell Douglas Corporation
               Mailcode:  100 1240
               McDonnell Douglas Corporation
               P.O. Box 516
               St. Louis, MO 63166
               Fax #:  (314) 233-7958

        (ii)   if to ECB:

               Edward C. Bavaria                  (and)  Edward C. Bavaria
               4083 Shell Road                           8625 Pipewell Lane
               Sarasota, FL  34242                       Cincinnati, OH  45243
               Fax #:  (813) 346-8402                    Fax #:  (513) 791-1415

               with a copy to:

               John W. Beatty, Esq.
               Dinsmore & Shohl
               1900 Chemed Center
               255 East Fifth Street
               Cincinnati, Ohio 45202
               Fax #:  513-977-8267

or to such other address as any party may designate by notice to the other party
in accordance with the terms of this Section.

     21.  Remedies  Cumulative.  Each and every right granted  hereunder and the
remedies  provided for under this Agreement are cumulative and are not exclusive
of any  remedies or rights that may be available to any party at law, in equity,
or otherwise.


<PAGE>
                                       9


     22. Rules of  Construction.  Unless the context of this  Agreement  clearly
requires  otherwise:  (a) references to the plural include the singular and vice
versa; (b) references to any person include such person's successors and assigns
but, if  applicable,  only if such  successors and assigns are permitted by this
Agreement;  (c) references to one gender include all genders; (d) "including" is
not  limiting;  (e) "or" has the  inclusive  meaning  represented  by the phrase
"and/or";  (f) the words "hereof," "herein,"  "hereby,"  "hereunder" and similar
terms  in this  Agreement  refer  to this  Agreement  as a whole  and not to any
particular  provision  of this  Agreement;  (g)  article,  section,  subsection,
exhibit  and  schedule   references  are  to  this  Agreement  unless  otherwise
specified;  (h) reference to any agreement (including this Agreement),  document
or  instrument  means  such  agreement,  document  or  instrument  as amended or
modified and in effect from time to time in  accordance  with the terms  thereof
and, if applicable,  the terms hereof;  and (i) references to any applicable law
means such applicable law as amended, modified,  codified or reenacted, in whole
or in part,  and in effect  from time to time,  unless the effect  thereof is to
reduce,  limit or otherwise  prejudicially  affect any  obligation or any right,
power  or  remedy  hereunder,  in  which  case  such  amendment,   modification,
codification  or  reenactment  will not,  to the  maximum  extent  permitted  by
applicable  law,  form  part  of this  Agreement  and is to be  disregarded  for
purposes of the construction and interpretation hereof.

     23.  Severability.  Any provision of this  Agreement  which is  prohibited,
unenforceable or not authorized in any jurisdiction is, as to such jurisdiction,
ineffective  to  the  extent  of  any  such  prohibition,   unenforceability  or
nonauthorization  without  invalidating  the  remaining  provisions  hereof,  or
affecting  the  validity,  enforceability  or legality of such  provision in any
other jurisdiction, unless the ineffectiveness of such provision would result in
such a material change as to cause completion of the  transactions  contemplated
hereby to be unreasonable.

     24. Specific  Performance and Injunctive Relief. ECB recognizes that, if he
fails to perform,  observe or discharge any of its obligations  under Sections 7
or 8 of this  Agreement,  no remedy at law will provide  adequate  relief to the
other  parties.   Therefore,   MDC  is  hereby  authorized  to  demand  specific
performance  of this  Agreement,  and is entitled  to  temporary  and  permanent
injunctive  relief,  in a court of competent  jurisdiction  at any time when ECB
fails to comply with any of such  provisions  of this  Agreement.  To the extent
permitted by applicable law, ECB hereby  irrevocably  waives any defense that it
might have based on the adequacy of a remedy at law which might be asserted as a
bar to such remedy of specific performance or injunctive relief.


<PAGE>
                                       10


     25. Resolution of Disputes.

          A. Except as permitted by Section 24 hereof, any controversy,  dispute
     or claim  arising out of: (1) the  interpretation,  performance  or alleged
     breach of this Agreement;  (2) the employment  relationship between MDC and
     ECB, or the  termination of such employment  relationship;  (3) any alleged
     breach by MDC of any statute ("statute") affecting ECB's rights; or (4) any
     other controversy, dispute or claim that ECB may have against MDC or any of
     its  agents or  representatives,  shall be  resolved  by final and  binding
     arbitration,  at the  request  of  either  party,  in  accordance  with the
     Employment Dispute Resolution Rules of the American Arbitration Association
     ("Rules"). A copy of the Rules are attached as Exhibit D. An arbitrator who
     decides  any such  dispute  shall  have the  right to impose  all  remedies
     provided by law, and shall enforce all statutes of limitations  provided by
     law. To the extent permitted by law, the prevailing party shall be entitled
     to  recover  its  attorneys'  fees  and  legal  costs  in such  arbitration
     proceeding.

          B.  MDC and  ECB  agree  to  share  equally  the  fees  and  costs  of
     arbitration; provided, however, the arbitrator shall have the discretion to
     relieve ECB of such fees if the arbitrator  determines  that the payment of
     ECB's share of the fees would impose an extreme financial burden on ECB.

          C. For purposes of this Section, "statute" includes any federal, state
     or  other   governmental   regulation,   or  ordinance,   which   prohibits
     discrimination  on the  basis  of age,  ancestry,  color,  gender,  marital
     status,  mental or physical  disability  or medical  condition,  pregnancy,
     national origin, race, religion, or sexual orientation.  The term "statute"
     also refers to any federal, state or other governmental statute, regulation
     or  ordinance  which  prohibits  retaliation  because of: (1) the taking of
     leave for family care,  medical care,  jury duty, and military duty; or (2)
     the assertion of rights under any statutes which prohibit discrimination or
     govern insurance or retirement rights.

     26.  Successors  and Assigns.  All provisions of this Agreement are binding
upon,  inure to the benefit of, and are  enforceable by or against,  the parties
and  their  respective   heirs,   executors,   administrators   or  other  legal
representatives and permitted successors and assigns.

     27.  Third-Party  Beneficiary.  This Agreement is solely for the benefit of
the parties and their respective  successors and permitted assigns, and no other
person has any right,  benefit,  priority or interest  under,  or because of the
existence of, this Agreement.

     28. Waiver of Jury Trial. Each party waives the right to a trial by jury.

<PAGE>
                                       11


         PLEASE READ THIS AGREEMENT CAREFULLY. BY SIGNING IT YOU ARE AGREEING TO
         FINAL AND BINDING  ARBITRATION OF ANY AND ALL DISPUTES  BETWEEN YOU AND
         MDC  INCLUDING,   WITHOUT   LIMITATION,   DISPUTES   RELATING  TO  THIS
         AGREE-MENT,  YOUR EMPLOYMENT WITH MDC AND THE TERMINATION  THEREOF, AND
         CLAIMS OF DISCRIM-INATION AND HARASSMENT.


                          MCDONNELL DOUGLAS CORPORATION


                                        By:  /s/ Harry C. Stonecipher
                                             ----------------------------------
                                             Harry C. Stonecipher
                                             President & Chief Executive Officer

                                             EMPLOYEE:

                                             /s/ Edward C. Bavaria
                                            -----------------------------------
                                            Edward C. Bavaria

<PAGE>
                                INDEX TO EXHIBITS

Exhibit A     McDonnell Douglas Corporation Performance Sharing Plan, as 
              amended and restated as of 5 March 1996.
              - Incorporated by reference to Exhibit 10(e) to the Company's
                Annual Report on Form 10-K for the year ended December 31, 1995.

Exhibit B     McDonnell Douglas Corporation 1994 Performance and Equity
              Incentive Plan.
              - Incorporated by reference to Exhibit 4(a) to the Company's
               Registration Statement on Form S-8, Commission File No. 33-56129,
               filed with the Commission on October 21, 1994.

Exhibit C    Third-Party Home Sale Assistance Program. This exhibit is omitted.
             (The Company agrees to furnish supplementally a copy of this
             exhibit to the Commission upon request.)

Exhibit D    Employment Dispute Resolution Rules of the American Arbitration
             Association.  This exhibit is omitted. (The Company agrees to
             furnish supplementally a copy of this exhibit to the Commission
             upon request.)