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                         TERMINATION BENEFITS AGREEMENT

     THIS AGREEMENT,  dated as of the ___ day of _____________,  1997, is by and
between  McDonnell  Douglas  Corporation,  a Maryland  corporation  (hereinafter
referred  to  as  the  "Company"),   and   ________________   (hereinafter   the
"Executive").

                                    RECITALS:

     A. The  Board of  Directors  of the  Company  (the  "Board")  considers  it
essential to the best interests of the Company and its shareholders that its key
management   personnel  be  encouraged  to  remain  with  the  Company  and  its
subsidiaries and to continue to devote full attention to the Company's  business
in the event  that any third  person  expresses  its  intention  to  complete  a
possible  business  combination with the Company,  or in taking any other action
which could  result in a change in control of the Company.  In this  connection,
the  Board  recognizes  that the  possibility  of a change  in  control  and the
uncertainty and questions which it may raise among  management may result in the
departure or  distraction  of key  management  personnel to the detriment of the
Company and its  shareholders.  The Board has determined that appropriate  steps
should  be  taken  to  reinforce  and  encourage  the  continued  attention  and
dedication of key members of the Company's  management to their assigned  duties
without  distraction  in the face of the  potentially  disturbing  circumstances
arising from the possibility of a change in control of the Company.

     B. The Executive currently serves as a key executive of the Company and his
or her services and knowledge are valuable to the Company in connection with the
management  of one or  more of the  Company's  principal  operating  facilities,
divisions, subsidiaries or functions.

     C. The Board believes the Executive has made and is expected to continue to
make valuable contributions to the productivity and profitability of the Company
and its subsidiaries.

     D. Should the Company receive any proposal from a third person concerning a
possible business combination or any other action which could result in a change
in control of the Company, the Board believes it imperative that the Company and
the Board be able to rely upon the Executive to continue in his or her position,
and that the  Company  and the Board be able to receive and rely upon his or her
advice,  if so  requested,  as to the  best  interests  of the  Company  and its
shareholders  without concern that he or she might be distracted by the personal
uncertainties and risks created by such a proposal, and to encourage Executive's
full attention and dedication to the Company.

     E.  Should the  Company  receive  any such  proposal,  in  addition  to the
Executive's  regular  duties,  the Executive may be called upon to assist in the
assessment of such proposal,  advise management and the Board as to whether such
proposal would be in the best interests of the Company and its shareholders, and
to take such other  actions as the Board  might  determine  to be  necessary  or
appropriate.


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                              TERMS AND CONDITIONS:

     NOW,  THEREFORE,  to assure the Company and its  subsidiaries  that it will
have  the  continued,  undivided  attention,  dedication  and  services  of  the
Executive  and  the   availability  of  the   Executive's   advice  and  counsel
notwithstanding the possibility,  threat or occurrence of a change in control of
the Company,  and to induce the Executive to remain in the employ of the Company
and its  subsidiaries,  and for  other  good  and  valuable  consideration,  the
adequacy and sufficiency of which are hereby  acknowledged,  the Company and the
Executive agree as follows:

     1. Change in Control

     For purposes of this Agreement,  a "Change in Control" of the Company shall
be deemed to have occurred upon (a) the acquisition at any time by a "person" or
"group" (as that term is used in Sections  13(d) and 14(d)(2) of the  Securities
Exchange Act of 1934,  as amended (the  "Exchange  Act"))  (excluding,  for this
purpose,  the Company or any  subsidiary  or any  employee  benefit  plan of the
Company or any  subsidiary)  of  beneficial  ownership (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly,  of securities  representing 20%
or more of the  combined  voting  power  in the  election  of  directors  of the
then-outstanding  securities of the Company or any successor of the Company; (b)
the  termination  of service as  directors,  for any  reason  other than  death,
disability or retirement from the Board in accordance with Resolution 706 of the
Board, as it may be amended or superseded,  during any period of two consecutive
years or less, of individuals who at the beginning of such period  constituted a
majority of the Board, unless the election of or nomination for election of each
new director during such period was approved by a vote of at least two-thirds of
the directors still in office who were directors at the beginning of the period;
(c) approval by the shareholders of the Company of liquidation of the Company or
any sale or disposition,  or series of related sales or dispositions,  of 50% or
more of the assets or  earning  power of the  Company;  or (d)  approval  by the
shareholders of the Company and  consummation of any merger or  consolidation or
statutory  share  exchange  to which the Company is a party as a result of which
the  persons  who were  shareholders  of the  Company  immediately  prior to the
effective date of the merger or  consolidation or statutory share exchange shall
have  beneficial  ownership of less than 50% of the combined voting power in the
election of directors of the surviving  corporation following the effective date
of such  merger or  consolidation  or  statutory  share  exchange.  A "Change in
Control"  shall not include any  reduction  in  ownership of an affiliate of the
Company so long as the entity  continues to meet the  definitions of those terms
as contained in this Section.


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     2. Adjustment of Benefits upon Change in Control

     The  Company  agrees  that  its  Management   Compensation  and  Succession
Committee   or   such   other   committee   succeeding   to   such   committee's
responsibilities  with  respect to  executive  compensation  (collectively,  the
"Compensation   Committee")  shall  make  such  equitable   adjustments  to  any
performance  targets  contained  in any awards under the  Company's  Performance
Sharing  Plan (the  "PSP") or Senior  Executive  Performance  Sharing  Plan (the
"Senior  Executive  PSP") or any  successor  plan in which  the  Executive  is a
participant,  as may be required to  eliminate  any  negative  effects  from any
transactions  relating  to a Change  in  Control  (such  as  costs  or  expenses
associated with the transaction or any related transaction,  including,  without
limitation, any reorganizations,  divestitures, recapitalizations or borrowings,
or changes in targets or  measures to reflect the  disruption  of the  business,
etc.), in order to preserve reward opportunities and performance objectives.

     3. Termination Following Change in Control

          (a) If any of the events described in Section 1 hereof  constituting a
     Change in Control of the Company shall have occurred,  the Executive  shall
     be entitled to the benefits set forth  herein upon any  termination  by the
     Company of the Executive's employment with the Company and its subsidiaries
     within two years following a Change in Control for any reason except any of
     the following:

               (i) Termination by reason of the Executive's death,  provided the
          Executive has not previously given a "Notice of Termination"  pursuant
          to Section 4;

               (ii)  Termination  by  reason  of the  Executive's  "disability,"
          provided  the  Executive  has  not  previously   given  a  "Notice  of
          Termination"   pursuant  to  Section  4.  For  the  purposes  of  this
          Agreement,  "disability" shall be defined as the Executive's inability
          by reason of illness or other physical or mental disability to perform
          the principal duties required by the position held by the Executive at
          the  inception  of such  illness  or  disability  for any  consecutive
          180-day period.  A determination  of "disability"  shall be subject to
          the  certification  of a  qualified  medical  doctor  agreed to by the
          Company  and  the  Executive  or,  in the  Executive's  incapacity  to
          designate  a doctor,  the  Executive's  legal  representative.  If the
          Company and the Executive cannot agree on the designation of a doctor,
          each party  shall  nominate  a  qualified  medical  doctor and the two
          doctors shall select a third  doctor;  the third doctor shall make the
          determination as to "disability";

               (iii)  Termination by reason of retirement in accordance with and
          under the Company's Employee  Retirement Income Plan -- Salaried Plan,
          or  such  of  the  Company's  other  salaried  employee  tax-qualified
          retirement plans in which the Executive  participates (or any plans in
          substitution  thereof)  as in  effect  on the  date of this  Agreement
          (collectively,  the "Retirement Plan"), provided the Executive has not
          previously given Notice of Termination pursuant to Section 4; or


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               (iv) Termination by the Company for "Cause". For purposes of this
          Agreement,  "Cause"  shall  mean (A) any act or acts by the  Executive
          constituting  a felony  under  applicable  law; (B) any act or acts of
          gross  dishonesty or gross  misconduct on the  Executive's  part which
          result or are  intended to result  directly or  indirectly  in gain or
          personal  enrichment at the expense of the Company or its subsidiaries
          to which the  Executive is not legally  entitled;  or (C) any material
          violation  by the  Executive  of his or  her  obligations  under  this
          Agreement  (other than any violation  resulting  from the  Executive's
          incapacity  due to physical or mental  illness),  which  violation  is
          demonstrably  willful and deliberate on the Executive's part and which
          results  in  material  damage to the  business  or  reputation  of the
          Company  or  its  subsidiaries.  Notwithstanding  the  foregoing,  the
          employment of the  Executive  shall in no event be deemed to have been
          terminated  by the Company for  "Cause" if  termination  of his or her
          employment  by the  Company  took  place:  (i) as  the  result  of bad
          judgment or negligence  on the part of the Executive  other than gross
          negligence;  (ii)  because  of an  act  or  omission  believed  by the
          Executive  in  good  faith  to  have  been  in or not  opposed  to the
          interests  of the Company and its  subsidiaries;  (iii) for any act or
          omission in respect of which a  determination  could  properly be made
          that the Executive met the applicable  standard of conduct  prescribed
          for  indemnification or reimbursement or payment of expenses under the
          charter  or  bylaws  of the  Company  or the  laws  of  the  state  of
          incorporation of the Company, in each case as in effect at the time of
          such act or omission;  (iv) as the result of an act or omission  which
          occurred  more than twelve  calendar  months prior to the  Executive's
          having been given Notice of  Termination  (as defined  below) for such
          act or omission  unless the  commission of such act or omission  could
          not at the time of such  commission  or omission  have been known to a
          member of the Board (other than the Executive,  if he or she is then a
          member of the Board),  in which case more than twelve  calendar months
          from the date that the  commission of such act or such omission was or
          could  reasonably  have  been  so  known;  or (v) as the  result  of a
          continuing   course  of  action  which  commenced  and  was  or  could
          reasonably  have been known to a member of the Board  (other  than the
          Executive)  more than twelve  calendar  months prior to the  Executive
          having been given Notice of Termination.

          (b) Notwithstanding any other provision of this Agreement, if a Change
     in Control occurs and if the  Executive's  employment  with the Company and
     its subsidiaries is terminated by the Company less than six months prior to
     the date on which the Change in Control  occurs,  and if it is demonstrated
     by the Executive that such termination of employment by the Company (i) was
     at the request of a third party which has taken steps reasonably calculated
     to result in or effect the Change in  Control  or (ii)  otherwise  arose in
     connection with or in  anticipation of the Change in Control,  then for all
     purposes of this Agreement,  such termination of employment shall be deemed
     to have  occurred  within  two years  following  such  Change  in  Control;
     provided,  that the obligations  contained in Section 4 to deliver a Notice
     of Termination shall not apply.


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          (c) The Company shall also provide the Executive with the benefits set
     forth herein upon any  termination by the Executive of employment  with the
     Company  and its  subsidiaries  for Good  Reason  within two years  after a
     Change in  Control.  Any  failure by the  Executive  to give such notice to
     receive  such  benefits  shall  not be  deemed  to  constitute  a waiver or
     otherwise  to  affect  adversely  the  rights of the  Executive  hereunder,
     provided the Executive  gives notice to receive such benefits  prior to the
     expiration of such two year period.  For purposes of this Agreement,  "Good
     Reason"  shall  mean  the  occurrence  of any one or more of the  following
     events:  {Chief  Executive  Officer  has  discretion  to narrow the list of
     events which constitute "Good Reason"}

               (i) The assignment to the Executive of any duties inconsistent in
          any material  adverse  respect with his or her position,  authority or
          responsibilities  with the  Company and its  subsidiaries  immediately
          prior to the Change in Control,  or any other material  adverse change
          in such position, including titles, authority, or responsibilities, as
          compared with the Executive's position immediately prior to the Change
          in Control;

          
               (ii) A reduction by the Company in the amount of the  Executive's
          base  salary or annual or long  term  incentive  compensation  paid or
          payable  as  compared  to that  which  was paid or made  available  to
          Executive  immediately prior to the Change in Control;  or the failure
          of the Company to increase  Executive's  compensation  each year by an
          amount which is substantially  the same, on a percentage basis, as the
          average  annual  percentage  increase  in the base  salaries  of other
          executives of comparable status with the Company;

               (iii) The  failure by the  Company  to  continue  to provide  the
          Executive  with  substantially  similar  perquisites  or benefits  the
          Executive  in  the  aggregate  enjoyed  under  the  Company's  benefit
          programs,  such as any of the Company's  pension,  savings,  vacation,
          life insurance,  medical,  health and accident, or disability plans in
          which he or she was participating at the time of the Change in Control
          (or,   alternatively,   if  such  plans  are   amended,   modified  or
          discontinued, substantially similar equivalent benefits thereto in the
          aggregate);  the  taking of any  action  by the  Company  which  would
          directly  or   indirectly   cause  such   benefits  to  be  no  longer
          substantially equivalent in the aggregate to the benefits in effect at
          the time of the  Change  in  Control;  provided,  that any  amendment,
          modification or  discontinuation  of any plans or benefits referred to
          in this  Subsection  (iii) that  generally  affect  substantially  all
          domestic  salaried  employees  of the  Company  shall not be deemed to
          constitute Good Reason;

               (iv) The  Company's  requiring  the  Executive to be based at any
          office or location  more than 35 miles from that  location at which he
          or she performed his or her services  immediately  prior to the Change
          in Control,  except for travel reasonably  required in the performance
          of  the  Executive's  responsibilities  to  the  extent  substantially
          consistent with the Executive's  business travel  obligations prior to
          the Change in Control;


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               (v) Any  failure of the Company to obtain the  assumption  of the
          obligation to perform this Agreement by any successor as  contemplated
          in Section 11 herein; or

               (vi) Any breach by the Company of any of the  provisions  of this
          Agreement  or any  failure  by the  Company  to  carry  out any of its
          obligations  hereunder,  in either case, for a period of five business
          days after  receipt  of  written  notice  from the  Executive  and the
          failure by the Company to cure such breach or failure during such five
          business day period.

     4. Notice of Termination

     Any   termination  of  the   Executive's   employment  by  the  Company  as
contemplated  by  Subsection  3(a)(ii)  or  3(a)(iv)  or  by  the  Executive  as
contemplated  by Subsection  3(c) shall be  communicated  by written  "Notice of
Termination" to the other party hereto.  Any "Notice of  Termination"  shall set
forth (a) the effective date of termination,  which shall not be less than 15 or
more than 30 days after the date the Notice of  Termination  is  delivered  (the
"Termination  Date");  (b) the specific provision in this Agreement relied upon;
and (c) in reasonable  detail the facts and  circumstances  claimed to provide a
basis for such  termination.  Notwithstanding  the foregoing,  if within fifteen
(15) days after any Notice of  Termination  is given,  the party  receiving such
Notice of Termination  notifies the other party that a good faith dispute exists
concerning the termination, the "Date of Termination" shall be the date on which
the dispute is finally  determined in accordance  with the provisions of Section
18  hereof.  In the  case  of  any  good  faith  dispute  as to the  Executive's
entitlement to benefits under this Agreement  resulting from any  termination by
the Company for which the Company does not deliver a Notice of Termination,  the
"Date  of  Termination"  shall  be the  date on which  the  dispute  is  finally
determined   in   accordance   with  the   provisions   of  Section  18  hereof.
Notwithstanding  the  pendency  of any  such  dispute  referred  to in  the  two
preceding sentences,  the Company shall continue to pay the Executive his or her
full compensation in effect when the notice giving rise to the dispute was given
and continue the Executive as a participant  in all  compensation,  benefits and
perquisites in which he or she was participating  when the notice giving rise to
the  dispute  was given,  until the dispute is finally  resolved,  provided  the
Executive  is willing to continue to provide  full time  services to the Company
and its subsidiaries in substantially the same position,  if so requested by the
Company.  Amounts  paid under this  Section  shall be in  addition  to all other
amounts due under this  Agreement and shall not be offset  against or reduce any
other amounts due under this Agreement.  If a final  determination  by the Panel
(as defined in Section  18(c)(ii))  that Good  Reason did not exist  pursuant to
Section  18(c)(v)  is  made  in the  case  of a  Notice  of  Termination  by the
Executive,  the  Executive  shall have the sole right to nullify and void his or
her Notice of  Termination  by delivering  written notice of same to the Company
within three (3) business days of the date of such final  determination,  unless
the basis for the claim by the Executive of Good Reason is found by the Panel to
have been manifestly unreasonable. If the parties do not dispute the Executive's
entitlement  to  benefits  hereunder,  the  "Date of  Termination"  shall be the
Termination Date.


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     5. Termination Benefits

          (a) Base  Salary and  Annual  Incentive  Compensation.  Subject to the
     conditions  set forth in  Sections  3, 4, 8 and 10(c)  hereof,  the Company
     shall continue to pay the Executive  (subject to any applicable  payroll or
     other  taxes  required  to be  withheld)  for a period  (the  "Continuation
     Period")  [commencing  on the Date of Termination  and]  terminating on the
     earlier of (x) [twenty-four (24)/thirty-six (36)] months following the date
     of the [Change in Control/Date of  Termination],  (y) the date on which the
     Executive  reaches normal  retirement age under the Retirement Plan, or (z)
     such date on which  any of the  contingencies  under  Section  10(c)  shall
     occur, as follows:

               (i) The  base  salary  of the  Executive  at the  greater  of the
          Executive's effective monthly base salary rate at the Termination Date
          or the  Executive's  effective  monthly  base salary rate  immediately
          prior to the Change in  Control,  which  amount  shall be payable on a
          monthly basis;

               (ii) A  monthly  amount  equal  to (x)  the  greater  of (1)  the
          Executive's annualized target incentive compensation award relating to
          the  monthly  base  salary  in  Section   5(a)(i)  above  or  (2)  the
          Executive's  annual target incentive  compensation  award for the year
          prior to the Change in Control,  multiplied  by (y) the greater of the
          average  percentage of the Executive's  earned incentive  compensation
          award to the Executive's  annual target incentive  compensation  award
          for the three complete years prior to either (1) the Change in Control
          or (2) the Termination  Date, in either case,  under the Company's PSP
          or Senior  Executive  PSP, or any successor  plan,  and divided by (z)
          twelve (12), which amount shall be payable on a monthly basis; and

          (b)  "Short  Year"  Annual  Incentive  Compensation.  Subject  to  the
     conditions  set forth in  Sections  3, 4, 8 and 10(c)  hereof,  the Company
     shall pay the Executive  (subject to any applicable  payroll or other taxes
     required  to be  withheld)  the  product  of (i) the amount  determined  in
     accordance with Section  5(a)(ii)(x)  above,  multiplied by (ii) the amount
     determined  in accordance  with Section  5(a)(ii)(y)  above,  multiplied by
     (iii) the ratio of the  number of days that  elapsed  in such year prior to
     such  Termination  Date  divided by 365;  provided,  that such "short year"
     annual  incentive  compensation  shall be paid in cash in a lump sum on the
     Date of Termination.

          (c) [One-Time Cash Termination Benefit.  Subject to the conditions set
     forth in  Sections  3, 4, 8 and 10(c)  hereof,  the  Company  shall pay the
     Executive  (subject to any applicable payroll or other taxes required to be
     withheld)  the  amount  of  $________  in cash in a lump sum on the Date of
     Termination.]


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     6. Other Benefits

     Subject to the  conditions  set forth in Sections 3, 4, 8 and 10(c) hereof,
the  following  benefits  (subject  to any  applicable  payroll  or other  taxes
required to be withheld) shall be paid or provided to the Executive:

     (a) Health/Welfare Benefits

               (i) During the Continuation Period, the Company shall continue to
          keep in full force and effect all programs of medical, dental, vision,
          accident,  disability,  life insurance,  including  optional term life
          insurance,  and other similar health or welfare  programs with respect
          to the  Executive  and his or her  dependents  with the same  level of
          coverage, upon the same terms and otherwise to the same extent as such
          programs  shall  have  been  in  effect   immediately   prior  to  the
          Termination Date (or, if more favorable to the Executive,  immediately
          prior to the Change in  Control),  and the Company  and the  Executive
          shall share the costs of the  continuation of such insurance  coverage
          in the same proportion as such costs were shared  immediately prior to
          the  Termination  Date  (or,  if  more  favorable  to  the  Executive,
          immediately  prior to the Change in Control)  or, if the terms of such
          programs do not permit continued participation by the Executive (or if
          the Company  otherwise  determines  it advisable  to amend,  modify or
          discontinue such programs for employees generally),  the Company shall
          otherwise  provide  benefits  substantially  similar  to and  no  less
          favorable to the  Executive in terms of cost or benefits  ("Equivalent
          Benefits")  than he or she was  entitled  to receive at the end of the
          period of coverage, for the duration of the Continuation Period.

               (ii) If, at or prior to the end of the Continuation  Period,  the
          Executive  has  attained the  earliest  age for  retirement  under the
          Retirement Plan,  without regard to any minimum period of service (the
          "Eligible  Age"),  he or she shall be  entitled to be enrolled at that
          time or any time  thereafter in the Company's  retiree  health program
          upon the same terms and  conditions  as if the  Executive had remained
          employed  during  the  Continuation  Period,  or if the  terms of such
          program do not permit  such  enrollment,  the  Company  shall  provide
          Equivalent  Benefits  which include such retiree  coverage.  If, at or
          prior to the end of the Continuation  Period,  the Executive shall not
          have  attained  the  Eligible  Age, he or she shall be entitled to the
          foregoing benefits upon attainment of the Eligible Age. If, at the end
          of the Continuation  Period, the Executive shall not have attained the
          Eligible  Age,  he or she will be given the same rights to health care
          continuation as if the health care continuation  coverage rights under
          the  Consolidated  Omnibus  Reconciliation  Act of 1985, as amended or
          replaced  ("COBRA"),  would  apply as of the end of such  Continuation
          Period, such rights under COBRA to be determined as if the end of such
          Continuation  Period  were an  event  causing  the  Executive  to lose
          coverage  under  the  Company's  health  care  plan  on  account  of a
          termination of employment.

               (iii) All benefits  which the Company is required by this Section
          6(a) to provide,  which will not be provided by the Company's programs
          described herein,  shall be provided through the purchase of insurance
          unless the Executive is uninsurable.  If the Executive is uninsurable,
          the Company will provide the benefits out of its general assets.


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                                       9


     (b) Retirement Benefits

               (i) Subject to Section 6(b)(v),  the Executive shall be deemed to
          be completely  vested under the Company's  Retirement Plan and any and
          all  supplemental  non-qualified  plans (or any successor  plans),  in
          which  Executive is a participant,  which are in effect as of the date
          of the Change in Control  (collectively,  the "Plans"),  regardless of
          the Executive's actual vesting service credit thereunder.

               (ii) In addition,  subject to Section 6(b)(v), he or she shall be
          deemed to have  earned an  additional  service  credit for service and
          benefit calculation  purposes thereunder as if he or she had continued
          in the employ of the  Company  for the  duration  of the  Continuation
          Period,   and  the  rate  of   compensation   which  is  used  in  the
          determination of the payment to the Executive under Section 5 shall be
          the rate of compensation used for benefit calculations with respect to
          such additional period,  with the effect that benefits based on Salary
          Compensation  and Average Monthly Salary (as such terms are defined in
          the Retirement Plan and as may be amended or replaced),  shall reflect
          such additional years of service at such rates of compensation.

               (iii) In addition, the Executive shall receive all other benefits
          under  the  Plans  that he or she would  have  received  had he or she
          continued  in the  employ  of the  Company  for  the  duration  of the
          Continuation  Period,  including,  without  limitation,  all ancillary
          benefits,  such as early  retirement,  survivor  rights  and all other
          benefits at retirement.

               (iv) If the  Executive  has  attained  the Eligible Age as of the
          Termination  Date, the Executive shall be entitled to elect retirement
          in lieu of deferred  vested status under the  Retirement  Plan. If the
          Executive  has not attained  the  Eligible  Age as of the  Termination
          Date, the Executive  shall be entitled to elect  retirement in lieu of
          deferred  vested status under the Retirement  Plan upon  attainment of
          the Eligible Age, and for purposes of determining the  adjustment,  if
          any, to the Executive's  accrued  benefit under the  eighty-five  (85)
          point  rule  (if  otherwise   eligible  under  such  rule)  under  the
          Retirement  Plan,  the  Executive  shall be credited with both age and
          years of service until the date he or she reaches the Eligible Age.

               (v) Any  part of the  foregoing  retirement  benefits  which  are
          otherwise required to be paid by a tax-qualified Plan but which cannot
          be paid  through  such  Plan by  reason  of the laws  and  regulations
          applicable  to such  Plan,  shall be paid by one or more  supplemental
          non-qualified  Plans or by the Company in accordance with such Plan or
          Plans.

               (vi) The  payments  calculated  hereunder  which are not actually
          paid by the  Retirement  Plan shall be paid thirty (30) days following
          the  Date of  Termination  in a  single  lump  sum  cash  payment  (of
          equivalent  actuarial value to the payment calculated  hereunder using
          the same actuarial  assumptions  as are used in  calculating  benefits
          under the  Retirement  Plan but using the discount  rate that would be
          used by the  Company  on the  Date of  Termination  to  determine  the
          actuarial present value of projected benefit obligations).

<PAGE>
                                       10


     (c) Savings Plan Benefits

               (i) Subject to Section  6(c)(iii),  the Executive shall be deemed
          to be completely  vested under the Company's  Employee Savings Plan --
          Salaried  Plan and all excess or  supplemental  savings  plans (or any
          successor  plans) in effect  as of the date of the  Change in  Control
          ("the Savings Plans")  regardless of his or her actual vesting service
          credit on the Termination Date.

               (ii) In  addition,  subject  to  Section  6(c)(iii),  during  the
          Continuation Period, he or she shall be entitled to an amount equal to
          the Company  matching  contributions  (at the greater of the Company's
          rates in effect at the  Termination  Date or the date of the Change in
          Control)  under the  Savings  Plans  which  would have  accrued to the
          benefit  of  the  Executive  had  he  or  she  continued  his  or  her
          participation  in,  and  elected  to  continue  to make  the  elective
          deferral or contributions under such Savings Plans at the same rate at
          which  he or  she  was  electing  to  make  them  at the  time  of the
          Termination Date.

               (iii) Any part of such Savings Plans benefits which are otherwise
          required to be paid by a  tax-qualified  Savings Plan but which cannot
          be  paid  through  such  Savings  Plan  by  reason  of  the  laws  and
          regulations  applicable  to the  Plan  shall be paid by an  excess  or
          supplemental Savings Plan or by the Company in a lump sum cash payment
          on the Date of Termination.

     (d) Financial Planning

          During the  Continuation  Period,  the  Company  shall  reimburse  the
     Executive for costs  associated with financial  planning to the same extent
     as was customarily  provided by the Company to senior  executives  prior to
     the Change in Control.

     (e) Executive Outplacement Counseling

          During the  Continuation  Period,  unless the  Executive  shall  reach
     normal  retirement age during the  Continuation  Period,  the Executive may
     request in writing and the Company  shall at its  expense  engage  within a
     reasonable time following such written  request an outplacement  counseling
     service  of  national  reputation  to assist  the  Executive  in  obtaining
     employment.


<PAGE>
                                       11


     7. Payment of Certain Costs

     Except as  otherwise  provided  in Section  18(c)(v),  if a dispute  arises
regarding a termination of the Executive or the interpretation or enforcement of
this Agreement,  subsequent to a Change in Control,  all of the reasonable legal
fees and  expenses  incurred  by the  Executive  and all  Arbitration  Costs (as
hereafter  defined) in contesting any such termination or obtaining or enforcing
all or part of any  right  or  benefit  provided  for in  this  Agreement  or in
otherwise  pursuing all or part of his or her claim will be paid by the Company,
unless  prohibited  by law.  The  Company  further  agrees  to pay  pre-judgment
interest on any money judgment obtained by the Executive calculated at the prime
interest  rate  reported in The Wall Street  Journal in effect from time to time
from the date that  payment  to him or her  should  have been  made  under  this
Agreement.

     8. Excise Tax Payments.

          (a)  Notwithstanding  anything  contained  in  this  Agreement  to the
     contrary,  in the event that any  payment  (within  the  meaning of Section
     280G(b)(2)  of the Internal  Revenue  Code of 1986,  as amended or replaced
     (the  "Code")),  or  distribution  to or for the benefit of the  Executive,
     whether paid or payable or  distributed  or  distributable  pursuant to the
     terms of this Agreement or otherwise in connection with, or arising out of,
     his or her employment with the Company (a "Payment" or  "Payments"),  would
     be subject to the  excise  tax  imposed by Section  4999 of the Code or any
     interest or penalties  are incurred by the  Executive  with respect to such
     excise tax (such excise tax, interest and penalties  collectively  referred
     to as the "Excise Tax"), then the Executive shall be entitled to receive an
     additional  payment (a  "Gross-Up  Payment")  in an amount  such that after
     payment by the  Executive  of all such taxes  (including  any  interest  or
     penalties  imposed with respect to such  taxes),  including  any Excise Tax
     imposed upon the Gross-Up  Payment,  the Executive retains an amount of the
     Gross-Up  Payment  equal to the  Excise  Tax  imposed  upon  the  Payments;
     provided,  that  the  Executive  shall  not  be  entitled  to  receive  any
     additional  payment  relating to any interest or penalties  attributable to
     any action or omission by the Executive in bad faith.

          (b) An  initial  determination  shall  be made by an  accounting  firm
     mutually  agreeable to the Company and the Executive  and, if not agreed to
     within  three days after the Date of  Termination,  a national  independent
     accounting firm selected by the Executive (the  "Accounting  Firm"),  as to
     whether a Gross-Up  Payment is required  pursuant to this Section 8 and the
     amount of such Gross-Up Payment.  To permit the Accounting Firm to make the
     initial  determination,  the Company shall furnish the Accounting Firm with
     all  information  reasonably  required  for  such  firm  to  complete  such
     determination as soon as practicable after the Date of Termination,  but in
     no event  more than  fifteen  (15)  days  thereafter.  All fees,  costs and
     expenses (including,  but not limited to, the cost of retaining experts) of
     the Accounting Firm shall be borne by the Company and the Company shall pay
     such fees, costs and expenses as they become due. The Accounting Firm shall
     provide detailed supporting calculations, reasonably acceptable both to the

<PAGE>
                                       12


     Company  and  the  Executive  within  thirty  (30)  days  of  the  Date  of
     Termination,  if applicable, or such other time as requested by the Company
     or by the Executive (provided the Executive reasonably believes that any of
     the Payments may be subject to the Excise Tax).  The Gross-Up  Payment,  if
     any,  as  determined  pursuant  to this  Section  8(b) shall be paid by the
     Company to the  Executive  within five (5) business  days of the receipt of
     the Accounting Firm's determination. If the Accounting Firm determines that
     no Excise  Tax is  payable by the  Executive  with  respect to a Payment or
     Payments,  it  shall  furnish  the  Executive  with an  opinion  reasonably
     satisfactory  to the  Executive  that no Excise  Tax will be  imposed  with
     respect to any such Payment or Payments.  Any such initial determination by
     the  Accounting  Firm of the  Gross-Up  Payment  shall be binding  upon the
     Company and the Executive subject to the application of Section 8(c).

          (c) As a result of the uncertainty in the application of Sections 4999
     and 280G of the Code, it is possible that a Gross-Up  Payment (or a portion
     thereof) will be paid which should not have been paid (an "Overpayment") or
     a Gross-Up  Payment (or a portion thereof) which should have been paid will
     not have been paid (an "Underpayment").  An Underpayment shall be deemed to
     have occurred upon a "Final  Determination"  (as hereinafter  defined) that
     the tax liability of the Executive  (whether in respect of the then current
     taxable year of the  Executive  or in respect of any prior  taxable year of
     the Executive)  will be increased by reason of the imposition of the Excise
     Tax on a Payment or Payments  with  respect to which the Company has failed
     to make a sufficient  Gross-Up  Payment.  An Overpayment shall be deemed to
     have occurred upon a "Final  Determination"  (as hereinafter  defined) that
     the Excise Tax shall not be imposed (or shall be reduced) upon a Payment or
     Payments  with respect to which the  Executive  had  previously  received a
     Gross-Up Payment.  A Final  Determination  shall be deemed to have occurred
     when (i) in the case of an Overpayment, the Executive has received from the
     applicable  governmental  taxing  authority  a  refund  of  taxes  or other
     reduction in his or her tax liability  imposed as a result of a Payment or,
     in the  case of an  Underpayment,  the  Executive  receives  notice  from a
     competent governmental authority that his or her tax liability imposed as a
     result  of a  Payment  will  be  increased,  and  (ii)  in the  case  of an
     Overpayment or an Underpayment, upon either (x) the date a determination is
     made by, or an agreement is entered into with, the applicable  governmental
     taxing  authority  which finally and  conclusively  binds the Executive and
     such  taxing  authority,  or in the event that a claim is brought  before a
     court of competent jurisdiction,  the date upon which a final determination
     has been made by such  court and  either  all  appeals  have been taken and
     finally resolved or the time for all appeals has expired or (y) the statute
     of limitations  with respect to the  Executive's  applicable tax return has
     expired. If an Underpayment occurs, the Executive shall promptly notify the
     Company and the Company  shall  promptly pay to the Executive an additional
     Gross-Up Payment equal to the amount of the Underpayment  plus any interest
     and  penalties  imposed  on  the  Underpayment  (other  than  interest  and
     penalties  attributable  to any action or omission by the  Executive in bad
     faith).  If an Overpayment  occurs,  the amount of the Overpayment shall be
     treated as a loan by the Company to the Executive and the Executive  shall,
     within ten (10) business days of the  occurrence of such  Overpayment,  pay
     the Company the amount of the Overpayment, without interest.


<PAGE>
                                       13


          (d)  Notwithstanding  anything  contained  in  this  Agreement  to the
     contrary,  in the event it is determined that an Excise Tax will be imposed
     on any  Payment  or  Payments,  the  Company  shall  pay to the  applicable
     governmental  taxing  authorities as Excise Tax withholding,  the amount of
     the Excise Tax that the Company has actually  withheld  from the Payment or
     Payments.

     9. Mitigation

          The  Executive is not required to seek other  employment  or otherwise
     mitigate the amount of any  payments to be made by the Company  pursuant to
     this  Agreement,  and  employment  by the  Executive  will  not  reduce  or
     otherwise affect any amounts or benefits due the Executive pursuant to this
     Agreement, except as otherwise provided in Section 10(c).

     10. Continuing Obligations

     (a) Acknowledgements by the Executive

          The Executive hereby recognizes and acknowledges the following:

               (i) The Company and its subsidiaries (collectively,  for purposes
          of this Section 10, the "Company") are engaged in, among other things,
          the business of  researching,  designing,  developing,  manufacturing,
          selling and  distributing  on a worldwide  basis  fighter and military
          transport  aircraft,  commercial  aircraft,   helicopters,   missiles,
          satellite  launch  vehicles,  and certain related and other businesses
          (the "Business").

               (ii) In connection with the Business,  the Company has expended a
          great  deal of time,  money and  effort to develop  and  maintain  the
          secrecy and  confidentiality  of substantial  proprietary trade secret
          information  and other  confidential  business  information  which, if
          misused or disclosed,  could be very harmful to the Business and could
          cause the Company to lose its competitive edge in the marketplace.

               (iii) The  Executive  desires to become  entitled  to receive the
          benefits  contemplated  by this  Agreement but which the Company would
          not make  available to the Executive but for the  Executive's  signing
          and agreeing to abide by the terms of this Section 10.

               (iv) The  Executive's  position  with the  Company  provides  the
          Executive  with access to certain of the  Company's  confidential  and
          proprietary trade secret information and other  confidential  business
          information.

               (v) The Company compensates its employees to, among other things,
          develop and preserve  goodwill  with its  customers  on the  Company's
          behalf and business information for the Company's ownership and use.


<PAGE>
                                       14


               (vi) If the Executive  were to leave the Company,  the Company in
          all fairness would need certain protection in order to ensure that the
          Executive does not appropriate and misuse any confidential information
          entrusted  to the  Executive  during  the  course  of the  Executive's
          employment  with the  Company,  or take any other  action  which could
          result in a loss of the  Company's  goodwill that was generated on the
          Company's behalf and at its expense,  and, more generally,  to prevent
          the Executive  from having an unfair  competitive  advantage  over the
          Company.

     (b) Confidential Information.

               (i) The Executive agrees to keep secret and confidential, and not
          to use or disclose to any third parties,  except as directly  required
          for   the   Executive   to   perform   the   Executive's    employment
          responsibilities  for the Company,  any of the Company's  confidential
          and  proprietary  trade  secret   information  or  other  confidential
          business information concerning the Business acquired by the Executive
          during  the  course  of,  or  in  connection   with,  the  Executive's
          employment  with the Company (and which was not known by the Executive
          prior to the  Executive's  being  hired by the  Company).  The Company
          considers  and  treats  as  confidential   (among  other  things)  its
          engineering,   design  and  technical  data,   computer  software  and
          programs, component sourcing and supply information, pricing policies,
          operational methods,  strategic plans, internal financial information,
          research  and   development   plans  and   activities,   and  business
          acquisition and expansion plans,  and, except as provided herein,  the
          Executive  agrees to treat such information as secret and confidential
          so long as such  information  does not become  generally  known to the
          public through no fault or wrongful act of the Executive.

               (ii) The Executive  acknowledges that any and all notes, records,
          sketches,  computer  diskettes  and  other  documents  obtained  by or
          provided to the  Executive,  or otherwise  made,  produced or compiled
          during  the course of the  Executive's  employment  with the  Company,
          which contain any such confidential Company information, regardless of
          the  type of  medium  in  which  it is  preserved,  are the  sole  and
          exclusive  property  of the Company  and shall be  surrendered  to the
          Company upon the  Executive's  termination of employment and on demand
          at any time by the Company.

     (c) Post-Termination Restrictions.

          The Executive agrees that, at any time during the Continuation Period,
     the  Company  shall  be  entitled  to  discontinue  any  further   payment,
     allocation,  accrual or  provision  of any amounts or benefits  required by
     Sections 5(a), 6(a)(i),  6(b)(ii),  6(d) and 6(e) (provided,  that any such
     amounts or benefits  theretofore  allocated  or accrued with respect to the
     portion of the  Continuation  Period preceding the occurrence of any of the
     contingencies set forth below shall be preserved),  if the Executive on the
     Executive's own behalf or on behalf of any other person, firm,  corporation
     or entity in the world:


<PAGE>
                                       15


               (i) provides any  services for any of the  Company's  significant
          competitors,  suppliers or customers or provides any general business,
          technical  or  strategic  consulting  or planning  with respect to the
          Business for any such  companies.  The Executive  recognizes that such
          companies  could benefit  greatly if they were to obtain the Company's
          confidential  information.  The  Executive  may request  permission to
          provide  services to or consult  with any company that may be included
          in the category of the Company's significant competitors, suppliers or
          customers.  The  written  denial  or  grant of such a  request  by the
          Company's  President  and CEO shall be  conclusive  and binding on the
          parties  hereto.  The grant of such a request will not be unreasonably
          withheld,  and if this request is granted,  the Executive  will not be
          held in violation of this Section 10(d) for  providing  services to or
          consulting  with such  company  in  accordance  with the terms of this
          request.

               (ii) knowingly  solicits,  entices,  induces,  hires,  employs or
          seeks to employ  any  salesperson,  engineer,  technician,  manager or
          executive-level  employee  of the  Company,  who was  employed  by the
          Company during the Executive's  last six (6) months of employment with
          the Company, to provide any services with respect to the Business; or

               (iii)  materially  breaches  or  violates  Section  10(b)  or any
          Company policy regarding confidentiality.

          (d) Acknowledgement  Regarding Restrictions.  The Executive recognizes
     and  agrees  that the  provisions  of this  Section 10 are  reasonable  and
     enforceable  because,  among other  things,  (1) the Executive is receiving
     compensation  under this  Agreement  and (2) there are many other  areas in
     which,  and  companies for which,  the Executive  could work in view of the
     Executive's  background,  and this Section 10 therefore does not impose any
     undue  hardship on the  Executive.  The Executive  further  recognizes  and
     agrees  that  the   provisions  of  this  Section  10  are  reasonable  and
     enforceable in view of the Company's legitimate interests in protecting its
     confidential   information  and  customer   goodwill  and  the  limitations
     contained  therein on the duration and geographic  scope of, and activities
     covered by, such provisions.

          (e)  Breach.  In  the  event  of a  breach  of  Section  10(b)  or the
     occurrence of any of the  contingencies  under Section 10(c), the Company's
     sole  remedy  shall  be the  discontinuation  of the  payment,  allocation,
     accrual or  provision  of any  amounts or  benefits  as provided in Section
     10(c). The Executive recognizes and agrees,  however, that it is the intent
     of the parties that neither this Agreement nor any of its provisions  shall
     be construed to adversely  affect any rights or remedies that Company would
     have had,  including,  without  limitation,  the amount of any  damages for
     which it could have sought  recovery,  had this  Agreement not been entered
     into.  Accordingly,  the parties  hereby agree that nothing  stated in this
     Section 10 shall  limit or  otherwise  affect the  Company's  right to seek
     legal or equitable remedies it may otherwise have, or the amount of damages
     for which it may seek recovery,  in connection with matters covered by this
     Section 10 but which are not based on breach or  violation  of this Section
     10 (including,  without limitation, claims based on the breach of fiduciary
     or other  duties  of the  Executive  or any  obligations  of the  Executive
     arising under any other contracts,  agreements or understandings).  Without

<PAGE>
                                       16


     limiting the generality of the foregoing, nothing in this Section 10 or any
     other  provision  of this  Agreement  shall limit or  otherwise  affect the
     Company's right to seek legal or equitable  remedies it may otherwise have,
     or the amount of damages for which it may seek recovery,  resulting from or
     arising out of statutory or common law or any Company policies  relating to
     fiduciary duties,  confidential information or trade secrets.  Further, the
     Executive  acknowledges  and agrees that the fact that Subsection  10(c) is
     limited to the Continuation Period, and that the sole remedy of the Company
     hereunder is the discontinuation of benefits, shall not reduce or otherwise
     alter any other  contractual  or other legal  obligations  of the Executive
     during  any  period  or  circumstance,   and  shall  not  be  construed  as
     establishing  a maximum  limit on damages  for which the  Company  may seek
     recovery.

     11. Successors

          (a) The  Company  shall  require  any  successor  (whether  direct  or
     indirect,  by  purchase,  merger,  consolidation  or  otherwise)  to all or
     substantially  all  of the  business  and/or  assets  of  the  Company,  by
     agreement to assume  expressly  and agree to perform this  Agreement in the
     same manner and to the same  extent  that the Company  would be required to
     perform it if no such  succession  had taken  place.  For  purposes of this
     Agreement, "Company" shall mean the Company as hereinbefore defined and any
     successor to its business and/or assets as aforesaid.

          (b) This Agreement shall inure to the benefit of and be enforceable by
     the   Executive's   personal   or   legal    representatives,    executors,
     administrators, successors, heirs, distributees, beneficiaries, devises and
     legatees.  If the Executive should die while any amounts are payable to him
     or her hereunder, all such amounts, unless otherwise provided herein, shall
     be paid in accordance  with the terms of this Agreement to the  Executive's
     devisee,  legatee,  beneficiary  or other  designee or, if there be no such
     designee, to the Executive's estate.

     12. Notices

     For the purposes of this  Agreement,  notices and all other  communications
provided  for herein  shall be in writing  and shall be deemed to have been duly
given (i) on the date of  delivery  if  delivered  by hand,  (ii) on the date of
transmission,  if delivered by confirmed facsimile,  (iii) on the first business
day following the date of deposit if delivered by guaranteed  overnight delivery
service,  or (iv) on the third  business  day  following  the date  delivered or
mailed by United States registered or certified mail, return receipt  requested,
postage prepaid, addressed as follows:

<PAGE>
                                       17


                 If to the Executive:

                 [To Be Provided]


            If to the Company:                    By Personal Delivery        
              By Mail                                or Facsimile 

      McDonnell Douglas Corporation           McDonnell Douglas Corporation
      P.O. Box 516                            World Headquarters Building
      St. Louis, Missouri 63166-0516          Airport Road & McDonnell Blvd.    
      Attention:  Chief Executive Officer     St. Louis, Missouri 63134
                                              Attention: Chief Executive Officer
                                              Facsimile: (314) 234-8296

               with a copy to:                      
                                                    By Personal Delivery
                      By Mail                           or Facsimile

      McDonnell Douglas Corporation           McDonnell Douglas Corporation
      P.O. Box 516                            World Headquarters Building
      St. Louis, Missouri 63166-0516          Airport Road & McDonnell Blvd.
      Attention:  General Counsel             St. Louis, Missouri 63134
                                              Attention:  General Counsel
                                              Facsimile:  (314) 233-7958

or to such other  address  as either  party may have  furnished  to the other in
writing in accordance  herewith,  except that notices of change of address shall
be effective only upon receipt.

     13. Governing Law

     The  validity,   interpretation,   construction  and  performance  of  this
Agreement shall be governed by the laws of the State of Missouri, without regard
to principles of conflicts of laws.

     14. Miscellaneous

     No  provisions  of this  Agreement  may be  amended,  modified,  waived  or
discharged unless such amendment, waiver, modification or discharge is agreed to
in  writing  signed  by  the  Executive  and  the  Company.   No  agreements  or
representations,  oral or  otherwise,  express or implied,  with  respect to the
subject  matter  hereof  have been made by either  party which are not set forth
expressly  in  this  Agreement.   Section  headings  contained  herein  are  for
convenience  of reference only and shall not affect the  interpretation  of this
Agreement.

     15. Counterparts

     This Agreement may be executed in one or more  counterparts,  each of which
shall be deemed to be an original but all of which will  constitute  one and the
same instrument.


<PAGE>
                                       18


     16. Non-Assignability

     This  Agreement  is personal  in nature and  neither of the parties  hereto
shall,  without the consent of the other,  assign, or transfer this Agreement or
any rights or obligations  hereunder,  except as provided in Section 11. Without
limiting the foregoing,  the  Executive's  right to receive  payments  hereunder
shall not be  assignable  or  transferable,  whether  by pledge,  creation  of a
security  interest  or  otherwise,  other than a transfer  by his or her will or
trust  or by the  laws of  descent  or  distribution,  and in the  event  of any
attempted  assignment or transfer  contrary to this  paragraph the Company shall
have no liability to pay any amount so attempted to be assigned or transferred.

     17. Term of Agreement

     This  Agreement  shall  commence on the date  hereof and shall  continue in
effect  through  December 31 of 1998;  provided,  however,  that  commencing  on
January 1 of 1998 and of each year thereafter,  the term of this Agreement shall
automatically  be  extended  for one  additional  year  unless,  not later  than
September 30 of the  preceding  year,  the Company or the  Executive  shall have
given notice to the other party that it does not wish to extend this  Agreement;
provided  further,  if a Change in Control of the  Company  shall have  occurred
during the original or any extended term of this Agreement, this Agreement shall
continue in effect for a period of  thirty-six  (36) months  beyond the month in
which such  Change in  Control  occurred;  and,  provided  further,  that if the
Company  shall  become  obligated  to make any  payments or provide any benefits
pursuant  to Section 5 or 6 hereof,  this  Agreement  shall  continue  in effect
indefinitely.

     18. Arbitration

          (a) Scope; Initiation. Resolution of any and all disputes arising from
     or in connection  with this  Agreement,  whether  based on contract,  tort,
     statute or otherwise, including disputes over arbitrability and disputes in
     connection with claims by third persons  ("Disputes")  shall be exclusively
     governed by and settled in accordance  with the  provisions of this Section
     18.  Either  party to this  Agreement  (each a  "Party"  and  together  the
     "Parties") may commence proceedings hereunder by delivery of written notice
     providing a reasonable description of the Dispute to the other, including a
     reference to this Section (the "Dispute Notice").

          (b) Negotiations  Between Parties.  The Parties shall first attempt in
     good faith to resolve promptly any Dispute by good faith negotiations.  Not
     later than three (3) business  days after  delivery of the Dispute  Notice,
     the Company shall appoint an executive to meet with the Executive or his or
     her  representative  at  a  reasonably   acceptable  time  and  place,  and
     thereafter as such representatives deem reasonably  necessary.  The Parties
     shall exchange relevant non-privileged  information and endeavor to resolve
     the Dispute.  Prior to any such meeting, each Party or representative shall
     advise the other as to any other  individuals who will attend such meeting.
     All  negotiations  pursuant to this Section 18(b) shall be confidential and
     shall be treated as compromise negotiations for purposes of Rule 408 of the
     Federal Rules of Evidence and similarly under other federal and state rules
     of evidence.


<PAGE>
                                       19


          (c)  Binding  Arbitration.  The  Parties  hereby  agree to submit  all
     Disputes to arbitration under the following  provisions,  which arbitration
     shall be final and binding upon the Parties,  their successors and assigns,
     and that the following  provisions  constitute a binding arbitration clause
     under applicable law.

               (i)  Either  Party  may  initiate  arbitration  of a  Dispute  by
          delivery of a demand therefor (the "Arbitration  Demand") to the other
          Party  not  sooner  than  five (5)  business  days  after  the date of
          delivery of the Dispute Notice but at any time thereafter.

               (ii) The  arbitration  shall be  conducted  in the  County of St.
          Louis,  Missouri,  by three arbitrators  (acting by majority vote, the
          "Panel")  selected by  agreement of the Parties not later than 10 days
          after delivery of the  Arbitration  Demand or, failing such agreement,
          appointed pursuant to the Commercial Arbitration Rules of the American
          Arbitration  Association,  as  amended  from  time to time  (the  "AAA
          Rules").  If an  arbitrator  becomes  unable  to  serve,  his  or  her
          successor(s) shall be similarly selected or appointed.

               (iii) The arbitration shall be conducted  pursuant to the Federal
          Arbitration  Act  and  the  Missouri  Uniform  Arbitration  Act,  such
          procedures  as the  Parties may agree or, in the absence of or failing
          such  agreement,  pursuant  to  the  AAA  Rules.  Notwithstanding  the
          foregoing:  (w) each  party  shall be  allowed  to  conduct  discovery
          through written requests for information,  document requests, requests
          for stipulations of fact, and  depositions;  (x) the nature and extent
          of such  discovery  shall be  determined  by the  Panel,  taking  into
          account  the  needs of the  Parties  and the  desirability  of  making
          discovery  expeditious  and  cost-effective;  (y) the  Panel may issue
          orders to protect the confidentiality of information,  to be disclosed
          in discovery; and (z) the Panel's discovery rulings may be enforced in
          any court of competent jurisdiction.

               (iv) All hearings  shall be  conducted on an expedited  schedule,
          and all  proceedings  shall be  confidential.  Either Party may at its
          expense make a stenographic record thereof.

               (v) The Panel shall  complete  all hearings not later than twenty
          (20) days after selection or appointment, and shall make a final award
          not later than ten (10) days thereafter. The award shall be in writing
          and shall specify the factual and legal bases for the award, and shall
          include a  determination  as to whether any claim by the  Executive of
          Good  Reason  was   manifestly   unreasonable   for  purposes  of  the
          second-to-last   sentence  of  Section  4.  Notwithstanding   anything
          contained  in Section  7, in  circumstances  where a Dispute  has been
          asserted by the  Executive  or defended  against by the  Executive  on
          grounds that the Panel deems manifestly  unreasonable (whether related
          to a claim of Good Reason or  otherwise),  the Panel may assess all or
          part of the costs  and  expenses  of the  arbitration,  including  the
          Panel's  fees and  expenses and fees and expenses of experts and legal
          counsel ("Arbitration  Costs"),  against the Executive and may include
          in the award the  Executive's  and the Company's  attorney's  fees and
          expenses in connection with any and all proceedings under this Section
          18.  Notwithstanding  the  foregoing,  in no event may the Panel award
          multiple, punitive or exemplary damages to either party.
<PAGE>
                                       20


          (d)  Confidentiality  - Notice.  Each  Party  shall  notify  the other
     promptly,  and in any event prior to disclosure to any third person,  if it
     receives any request for access to confidential  information or proceedings
     hereunder.

     19. No Setoff

     The Company shall have no right of setoff or counterclaim in respect of any
claim, debt or obligation against any payment provided for in this Agreement.

     20. Non-Exclusivity of Rights

     Nothing in this Agreement shall prevent or limit the Executive's continuing
or future  participation  in any  benefit,  bonus,  incentive  or other  plan or
program provided by the Company or any of its subsidiaries or successors and for
which the Executive may qualify,  nor shall anything herein limit or reduce such
rights as the Executive may have under any other  agreements with the Company or
any of its  subsidiaries  or  successors.  Amounts which are vested  benefits or
which the  Executive is otherwise  entitled to receive under any plan or program
of the Company or any of its  subsidiaries  shall be payable in accordance  with
such plan or program, except as explicitly modified by this Agreement.

     21. No Guaranteed Employment

     The Executive and the Company  acknowledge  that this  Agreement  shall not
confer  upon the  Executive  any  right to  continued  employment  and shall not
interfere  with the right of the  Company to  terminate  the  employment  of the
Executive at any time.

        22.      Invalidity of Provisions

     In the event that any  provision  of this  Agreement is  adjudicated  to be
invalid or unenforceable under applicable law in any jurisdiction,  the validity
or enforceability of the remaining  provisions thereof shall be unaffected as to
such  jurisdiction  and such  adjudication  shall not  affect  the  validity  or
enforceability of such provision in any other  jurisdiction.  To the extent that
any  provision of this  Agreement,  including,  without  limitation,  Section 10
hereof,  is adjudicated to be invalid or unenforceable  because it is overbroad,
that  provision  shall not be void but  rather  shall be  limited  to the extent
required by  applicable  law and enforced as so limited.  The parties  expressly
acknowledge and agree that this Section 22 is reasonable in view of the parties'
respective interests.

     23. Non-Waiver of Rights

     The failure by the Company or the  Executive  to enforce at any time any of
the  provisions of this  Agreement or to require at any time  performance by the
other party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement, or
any part  hereof,  or the right of the Company or the  Executive  thereafter  to
enforce each and every provision in accordance with the terms of this Agreement.


<PAGE>
                                       21


     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.

PLEASE NOTE: BY SIGNING THIS TERMINATION  BENEFITS  AGREEMENT,  THE EXECUTIVE IS
HEREBY  CERTIFYING  THAT THE EXECUTIVE (A) HAS RECEIVED A COPY OF THIS AGREEMENT
FOR REVIEW AND STUDY BEFORE EXECUTING IT; (B) HAS READ THIS AGREEMENT  CAREFULLY
BEFORE  SIGNING  IT;  (C) HAS HAD  SUFFICIENT  OPPORTUNITY  BEFORE  SIGNING  THE
AGREEMENT TO ASK ANY  QUESTIONS  THE  EXECUTIVE  HAS ABOUT THE AGREEMENT AND HAS
RECEIVED  SATISFACTORY  ANSWERS TO ALL SUCH  QUESTIONS;  AND (D) UNDERSTANDS THE
EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THE AGREEMENT.

     THIS AGREEMENT IN SECTION 18 CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.

                                  MCDONNELL DOUGLAS CORPORATION

                                  By:______________________________________
                                    Harry C. Stonecipher, President & CEO


                                   EXECUTIVE:


                                    __________________________________________