6 March 1995
 
                         MCDONNELL DOUGLAS CORPORATION
              DEFERRED COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

  SECTION 1. PURPOSE

           The   purpose  of  the   McDonnell   Douglas   Corporation   Deferred
  Compensation  Plan for  Nonemployee  Directors  (the "Plan") is to promote the
  interests of the Company and its stockholders by providing nonemployee members
  of the Board of Directors  with an opportunity to acquire stock in the Company
  and thereby reinforce the mutuality of interest between such directors and the
  Company's stockholders.

  SECTION 2. DEFINITIONS

           When used  herein,  the  following  terms  shall  have the  following
meanings:

          (a) "Board" means the Board of Directors of the Company.

          (b) "Committee" means the Nominating Committee of the Company.

          (c) "Common Stock" means the common stock,  $1.00 par value per share,
     of the Company.

          (d)  "Company" means McDonnell Douglas Corporation.

          (e)  "Effective Date" means January 1, 1993.

          (f) "Fair  Market  Value" means the per share value of Common Stock as
     determined  by using the mean  between the high and low  selling  prices of
     such  Common  Stock on the New York Stock  Exchange as reported in The Wall
     Street Journal (or other financial newspaper).

          (g) "Participant" means any member of the Board who is not a full-time
     employee of the Company.

          (h)  "Payment  Date" means a date within 60 days after the end of each
     Year.
<PAGE>

          (i)  "Restricted  Common  Stock" means Common Stock that is subject to
     the  Restrictions,  and any  new,  additional  or  different  securities  a
     Participant  may become entitled to receive with respect to any such Common
     Stock by virtue of a stock split or any other  change in the  corporate  or
     capital structure of the Company.

          (j)  "Restricted  Period" means the period of time during which shares
     of  Common  Stock  and/or  cash  compensation  provided  under the Plan are
     subject to Restrictions.

          (k) "Restrictions"  means the restrictions on transfer and the risk of
     forfeiture set forth in Section 8 of the Plan.

          (l) "Year" means the period of time beginning on the date of an annual
     meeting of the  stockholders  of the  Company and ending on the date of the
     annual  meeting  of the  stockholders  in  the  following  year;  provided,
     however,  that the first Year of the Plan begins on the Effective  Date and
     ends on April 30, 1993.

  SECTION 3. ADMINISTRATION

            The Plan shall be administered  by the Committee.  A majority of the
   members of the Committee shall constitute a quorum.  The Committee may act at
   a meeting,  including  a  telephone  meeting,  by action of a majority of the
   members present, or without a meeting by unanimous written consent.

            Subject to the provisions of the Plan, the Committee  shall have the
authority to:

            (a) establish from time to time any guidelines  deemed  necessary or
   appropriate for the  administration or interpretation of the Plan,  interpret
   the Plan, and make all  determinations  and take all other actions considered
   necessary or advisable for the administration of the Plan;

          (b) cause records to be established relating to operation of the Plan;
     and

          (c)  cause the  giving  of  appropriate  instructions  to the  Company
     regarding payments to Participants.

             Non-employee   members  of  the  Committee  shall  be  entitled  to
   participate under the Plan. All decisions,  actions or interpretations of the
   Committee  that are  within  the  scope  of this  Section  3 shall be  final,
   conclusive and binding upon all parties.
<PAGE>

SECTION 4. PARTICIPATION

           Participation  in the Plan  shall be  limited to members of the Board
  who are not  full-time  employees of the Company.  Each  individual  who was a
  nonemployee  member of the Board on the Effective  Date shall be a Participant
  as of that date. Each individual who becomes a nonemployee member of the Board
  thereafter  and while this Plan is in effect shall become a Participant at the
  time of election or appointment to the Board or at the time of their change in
  status from full-time employment to a nonemployee member of the Board. For the
  purpose  of this  Plan,  the term  "full-time  employee"  shall  mean a person
  employed by the Company on the basis of at least a 35 hour work week.

  SECTION 5. DEFERRED COMPENSATION; ELECTIONS

           (a)  Subject  to the  terms  and  conditions  hereof,  as  additional
  consideration for their services as members of the Board,  Participants  shall
  be  entitled  to  receive,  as part of their  annual  retainer  fee and at the
  election of each Participant, either--

                     (i) 450 shares of Restricted Common Stock; or

                    (ii) cash in an amount equal to the Fair Market Value of 450
                         shares of  Restricted  Common  Stock on the last day of
                         the Year (or if such day is not a business  day, on the
                         next preceding business day).

           (b) The election to receive cash or Restricted  Common Stock shall be
 made by each  Participant  by filing  with the  Committee  a written,  election
 pursuant to which the Participant shall notify the Committee of his election to
 receive Restricted Common Stock or the equivalent cash compensation.

           (c) The election  contemplated by this Section 5 shall be irrevocable
  unless and until the Plan is subject to the amended Rule 16b-3, promulgated by
  the  Securities  and  Exchange  Commission  on February  8, 1991.  Thereafter,
  elections may be made for each Year of the Plan, within 30 days before the end
  of such Year and, once made,  shall be  irrevocable  only with respect to that
  Year. The Secretary of the Company shall notify the Committee when the Plan is
  first subject to amended Rule 16b-3 and the Committee shall  thereupon  notify
  each Participant.

            (d) Neither the  provisions  of this  Section 5 nor any action taken
  under the Plan shall be  construed as giving any  Participant  the right to be
  reappointed or renominated as a director of the Company.
<PAGE>

SECTION 6. TERMS AND CONDITIONS

           (a) To the extent a Participant  elects to receive cash under Section
 5(a)(ii),  on the Payment Date the  Committee  shall so advise the Treasurer of
 the  Company  who shall  credit  the  amount of that cash  compensation  to the
 account of the electing  Participant.  The  Treasurer  shall issue to each such
 Participant a receipt  evidencing the amount so credited for his account.  Such
 accounts  shall be  bookkeeping  entries only; no special bank account shall be
 created for any  Participant in respect of the Plan and  Participants  shall be
 general creditors of the Company to the extent of cash payable pursuant hereto.
 A Participant shall be entitled to the delivery of cash only in accordance with
 Sections 9 and 10 hereof.

           (b) To the extent a Participant  elects to receive  Restricted Common
 Stock under Section 5(a)(i),  such Participant shall execute  appropriate blank
 stock powers with respect to that Restricted Common Stock. On the Payment Date,
 stock  certificates for such Restricted  Common Stock registered in the name of
 each such Participant  shall be issued (with appropriate  restrictive  legends)
 and  deposited,  together  with the stock  powers,  with the  Treasurer  of the
 Company.  The  Treasurer  shall  issue  to  each  such  Participant  a  receipt
 evidencing any stock certificate  registered in the Participant's name and held
 by the Treasurer. A Participant shall be entitled to the delivery of such stock
 certificates only in accordance with the provisions of Sections 9 and 10 of the
 Plan. All Common Stock or other  securities  issued in substitution  for Common
 Stock held by the  Treasurer  from time to time,  whether  such Common Stock or
 securities  are issued by the  Company or by  another  issuer,  and all cash or
 other  property  received by the  Treasurer on account of a  redemption  of the
 Restricted Common Stock or the liquidation of the Company,  shall be treated as
 Common  Stock and shall be  subject to all of the terms and  conditions  of the
 Restricted  Common  Stock and shall be  delivered  to a  Participant  or to the
 Company as if it were the  portion of Common  Stock  regarding  which they were
 issued.

            (c) The  Committee  may impose  such  restrictions  on the resale of
  Common Stock by  Participants  as the Committee deems necessary to comply with
  the registration provisions of the Securities Act of 1933, as amended, and may
  cause an appropriate  restrictive  legend to be placed on the certificates for
  the Common Stock delivered to the Participants hereunder.
<PAGE>

  SECTION 7. RIGHTS OF PARTICIPANTS

           Except for the Restrictions  under Section 8 below,  each Participant
  shall have all of the rights and privileges of a stockholder of the Company as
  to his or her Restricted Common Stock, including the right to receive any cash
  and stock dividends declared with respect to such Common Stock and to exercise
  voting rights.

  SECTION 8. RESTRICTIONS

           The cash  compensation and the Restricted  Common Stock  compensation
  shall be subject to the  following  Restrictions,  which  shall apply from the
  Payment Date and shall continue until such cash and Common Stock become vested
  pursuant to the provisions of Section 9 or Section 10:

           (a)  Neither  the  Restricted  Common  Stock  nor  the  cash  may  be
  transferable other than pursuant to a revocable beneficiary  designation or by
  will or by the laws of descent and distribution, and no transfer pursuant to a
  revocable  beneficiary  designation  or by will or by the laws of descent  and
  distribution shall be effective to bind the Company unless the Committee shall
  have been  furnished with such evidence as the Committee may deem necessary to
  establish the validity of the transfer.

           (b) Each  Participant's  right to any cash or Restricted Common Stock
  hereunder  shall be  forfeited  if and when  such  Participant  ceases to be a
  Participant,  except to the extent that the Participant's right to receive the
  cash and Common Stock without  Restrictions  shall have vested under Section 9
  or Section 10. If forfeited, all such cash and stock shall become the property
  of the  Company  and all of the  rights of such  Participant  to such cash and
  Common  Stock and as a  stockholder  (including  the right to any  accrued but
  unpaid  dividends) shall terminate  without further  obligation on the part of
  the Company.
<PAGE>

  SECTION 9. VESTING

           The right of each  Participant  to removal of the  Restrictions  from
  cash and  Restricted  Common  Stock held for the  account of such  Participant
  shall vest and the  Restricted  Period  shall end upon the  earlier of (i) ten
  years from the date of grant,  or (ii) the  Participant's  retirement from the
  Board in accordance with MDC Bd. Res. 706, as it may be amended. At the end of
  the  Restricted  Period,  the  Treasurer  shall  deliver  all cash  and  stock
  certificates  evidencing  all  Common  Stock  held by the  Treasurer  for that
  Participant  (to the  nearest  full  share) to the  Participant,  or the legal
  representative  of such  Participant,  free of the  Restrictions  set forth in
  Section 8 above.

  SECTION 10. DISABILITY, DEATH OR TERMINATION BY REASON OF CONFLICT

  If  any  Participant's  membership  on the  Board  terminates  because  of (i)
  inability  by reason of illness or  accident  to perform  the duties for which
  such Participant was elected or appointed,  (ii) such Participant's  death, or
  (iii) a conflict of  interest  which  prohibits  the  Participant's  continued
  service as a director  (provided  the  conflict did not arise as a result of a
  breach  of the  Participant's  fiduciary  duty),  the  expiration  date of the
  Restricted  Period for such Participant  shall be advanced to the date of such
  termination  of  membership  on the  Board  and the full  balance  of cash and
  Restricted  Common Stock in such  Participant's  account shall be delivered as
  provided in Section 6.

  SECTION 11. SIX MONTH HOLDING PERIOD REQUIREMENT

            The provisions of Sections 9 and 10 notwithstanding,  all Restricted
  Common  Stock issued  hereunder  must be held for at least six months prior to
  any disposition by a Participant (except pursuant to transfers permitted under
  Section 8(a)). The six-month  holding period as to any Restricted Common Stock
  shall commence on the Payment Date for such stock.




  SECTION 12. CHANGE OF CONTROL

            The  obligations of the Company under the Plan shall be binding upon
  any  successor   corporation  or  organization   resulting  from  the  merger,
  consolidation or other  reorganization  of the Company,  or upon any successor
  corporation or organization  succeeding to substantially all of the assets and
  business  of the  Company.  The Company  agrees that it will make  appropriate
  provisions for the preservation of all Participants'  rights under the Plan in
  any  agreement  or plan  that it may enter  into or adopt to  effect  any such
  merger, consolidation, reorganization or transfer of assets.

  SECTION 13. CERTAIN ADJUSTMENTS TO SHARES

In  the   event  of  any   change  in  the   Common   Stock  by  reason  of  any
recapitalization,  reorganization,  merger,  consolidation,  split-up, spin-off,
combination  or exchange of shares,  or any rights  offering to purchase  Common
Stock at a price substantially below Fair Market Value, or of any similar change
affecting the Stock, the number and kind of shares subject to Restrictions under
this  Plan  shall  be  appropriately   adjusted  by  the  Committee  to  prevent
substantial dilution of the rights of the Participants hereunder. Any adjustment
so made shall be firm and binding upon the Participant.

<PAGE>

SECTION 14. NONALIENATION OF BENEFITS

            Except as  provided  in Section 8, a  Participant  shall not assign,
   sell,  encumber,  transfer or  otherwise  dispose of any rights or  interests
   under the Plan and any attempted disposition shall be null and void.

  SECTION 15. SECTION 83(b) ELECTIONS

            If a Participant  shall file an election  with the Internal  Revenue
   Service to include cash or the Fair Market Value of any shares of  Restricted
   Common  Stock in his or her  gross  income  as of the  Payment  Date for such
   compensation,  the Participant shall promptly furnish the Company with a copy
   of such election.

  SECTION 16. PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS

            If the  Committee  shall  find that any person to whom any amount is
  payable  under the Plan is unable to care for his or her  affairs  because  of
  illness or accident,  or is a minor, or has died, then any payment due to such
  person or such person's estate (unless a prior claim therefor has been made by
  a duly appointed legal  representative)  may, if the Committee so directs,  be
  paid to such person's spouse, child,  relative, an institution  maintaining or
  having custody of such person,  or any other person deemed by the Committee to
  be a proper  recipient on behalf of such person.  Any such payment  shall be a
  complete discharge of the liability of the Committee and the Company therefor.

  SECTION 17. NO LIABILITY OF COMMITTEE MEMBERS

            No member of the Committee  shall be personally  liable by reason of
  any contract or other  instrument  executed by such member or on his behalf in
  his capacity as a member of the  Committee or for any mistake of judgment made
  in good  faith,  and the  Company  shall  indemnify  and  hold  harmless  each
  employee,  officer  or  director  of the  Company  to whom  any  duty or power
  relating to the  administration or interpretation of the Plan may be allocated
  or delegated against any cost or expense (including counsel fees) or liability
  (including  any sum paid in settlement  of a claim)  arising out of any act or
  omission  to act in  connection  with  the  Plan  unless  arising  out of such
  person's own fraud or bad faith.

SECTION 18. AMENDMENT OR TERMINATION

           The Board of Directors may, with  prospective or retroactive  effect,
  suspend or terminate the Plan or any portion  thereof at any time or amend the
  Plan provided,  however,  that no amendment,  suspension or termination of the
  Plan shall deprive any Participant of any rights previously  accrued under the
  Plan without the Participant's written consent.

           Subject to earlier  termination  pursuant to the  provisions  of this
 Section,  and unless the Board  shall have  approved an  extension  of the Plan
 beyond such date, the Plan shall  terminate  upon the tenth  anniversary of the
 Effective  Date.  Compensation  deferred  and  subject to  Restrictions  at the
 termination  or expiration of the Plan shall  continue in full force and effect
 and shall not be affected thereby.

  SECTION 19. GOVERNING LAW

           The Plan shall be governed by and  construed in  accordance  with the
  laws of  Missouri,  without  reference to the  principles  of conflicts of law
  thereof.