<PAGE>
 
                                                                   Exhibit 10.19


                             WHITTAKER CORPORATION

                                 CAFETERIA PLAN

     Whittaker Corporation, a corporation organized under the laws of the State
of Delaware, herein referred to as the "Employer," does hereby restate the
Whittaker Corporation Cafeteria Plan (the "Plan") for the benefit of eligible
Employees and Dependents on the terms and conditions described hereinafter.

     WHEREAS, the Employer maintains medical, dental and vision benefit plans
the contributions for which are currently shared by the Employee and the
Employer; and

     WHEREAS, the Employer desires to expand the benefits available to Employees
and their Dependents to provide additional benefits in the form of medical
reimbursement benefits and Dependent care expense reimbursement benefits and to
continue to allow reduction of Compensation to pay for medical, dental and
vision coverage, and

     WHEREAS, the Employer desires to restate the Plan effective January 1,
1999.

     NOW, THEREFORE, the Plan is hereby restated to read as follows:
<PAGE>
 
                                   ARTICLE I

                           EFFECTIVE DATE AND PURPOSE

     Section 1.1.  Effective Date.  The effective date of the Plan as restated
     -----------   --------------                                             
herein is January 1, 1999.

     Section 1.2.  Purpose of Plan.  The purpose of the Plan is to provide
     -----------   ---------------                                        
certain taxable and nontaxable benefits to eligible Employees of the Employer.
The Plan is intended to constitute a cafeteria plan, within the meaning of
Section 125 of the Code.  In addition, it is intended that the Plan provide
certain Medical Reimbursement Benefits in accordance with the terms of Sections
105 and 106 of the Code, Dependent Care Benefits in accordance with the
provisions of Section 129 of the Code, and reduction of Compensation for medical
coverage in accordance with the terms of Sections 104 and 105 of the Code.  The
Plan is to be maintained for the exclusive benefit of Employees (and their
eligible Dependents).
<PAGE>
 
                                   ARTICLE II

                                  DEFINITIONS

     Section 2.1.  Adjustment Date shall mean the date chosen by the Plan
     -----------   ---------------                                       
Administrator on which the Participant's Health Care Spending Account, and/or
Dependent Care Spending Account is increased by the Participant's reduction of
Compensation and reduced by payments made from such account(s).

     Section 2.2.  Affiliate shall mean any employer which must be treated as a
     -----------   ---------                                                   
single employer under Code Section 414(b), (c) or (m).  The term "Participating
Affiliate" shall mean any Affiliate which adopts this Plan and makes
contributions as required by the Employer.

     Section 2.3.  Benefit Administration Manager shall mean the person
     -----------   ------------------------------                      
providing consulting services to the Employer in connection with operation of
the Plan and performing such other functions, including the processing and
payment of claims, as may be delegated from time to time.

     Section 2.4.  Board shall mean the Board of Directors of the Employer.
     -----------   -----                                                   

     Section 2.5.  Change in Family Status shall mean, with respect to an
     -----------   -----------------------                               
Employee, any of the following:

     (a)  marriage.

     (b)  divorce, legal separation or annulment.

     (c)  death of the Employee's spouse or Dependent.

     (d)  birth, adoption, or placement for adoption of a child.

     (e)  termination of the employment of the Employee, Employee's spouse or
          Dependent.

     (f)  commencement of the employment of the Employee, Employee's spouse or
          Dependent.

     (g)  change from part-time to full-time or from full-time to part-time
          employment status by the Employee, the Employee's spouse or Dependent.

     (h)  commencement of or return from an unpaid leave of absence from
          employment by the Employee, the Employee's spouse or Dependent.

     (i)  significant change in the health coverage of the Employee or the
          Employee's spouse attributable to the employment of the Employee's
          spouse.

     (j)  transfer of the Employee by the Employer to a new residence or
          worksite which results in a significant change in the Employee's
          coverage.

     (k)  spouse or Dependent child of the Employee becoming eligible or
          ineligible for coverage as a spouse or Dependent child.

     (l)  such other events that the Plan Administrator may determine will
          permit a change or revocation of an election in accordance with the
          rulings and regulations under Code Section 125.
<PAGE>
 
     (m)  entitlement to Medicare or Medicaid of the Employee, the Employee's
          spouse or dependent child.

     (n)  the issuance of a judgment, decree or order that requires accident or
          health coverage for the Employee's Dependent child.

     Section 2.6.  Code shall mean the Internal Revenue Code of 1986, as
     -----------   ----                                                 
amended, or as it may be amended from time to time.

     Section 2.7.  Committee shall mean the Board, or individuals designated by
     -----------   ---------                                                   
the Board to administer the Plan pursuant to Article X.

     Section 2.8.  Compensation shall mean an Employee's base pay prior to any
     -----------   ------------                                               
reductions made under this Plan or any other plan allowing for reduction in
Compensation.

     Section 2.9.  Credits shall mean the Company contributions with which
     ------------  -------                                                
participants may purchase benefit coverages, as specified in Section 4.2.

     Section 2.10.  Date of Employment shall mean the first date on which an
     ------------   ------------------                                      
Employee enters into the legal relationship of employer and employee with the
Employer.

     Section 2.11.  Date of Re-employment shall mean the first date on which an
     ------------   ---------------------                                      
Employee enters into the legal relationship of employer and employee with the
Employer following a termination of employment.

     Section 2.12.  Dental Plan shall mean the Whittaker Corporation Dental
     -------------  -----------                                            
Benefit Plan as incorporated herein.

     Section 2.13.  Dependent shall mean, with respect to Medical Reimbursement
     ------------   ---------                                                  
Benefits, the spouse of the Participant who is not divorced or legally separated
from the Participant and any Dependent as defined in Code Section 152 for whom
the Employee may claim an exemption under Code Section 151.

     Section 2.14.  Dependent Care Benefits shall mean those expenses eligible
     ------------   -----------------------                                   
for reimbursement as provided by Article VII and which meet the criteria of a
Dependent care assistance program in accordance with Section 129 of the Code.

     Section 2.15.  Dependent Care Spending Account shall mean the balance
     ------------   -------------------------------                       
posted to the account of each Participant, or Former Participant consisting of
Employer contributions and any elective reductions of Compensation for payment
of Dependent Care Benefits less any payment therefrom.

     Section 2.16.  Eligibility Date shall mean the date on which an Employee
     ------------   ----------------                                         
becomes eligible to participate in the Plan pursuant to Section 3.1.

     Section 2.17.  Employee shall mean any individual who is regularly in the
     ------------   --------                                                  
active employment of the Employer on a full-time basis.  An individual shall be
considered regularly in the active employment of the Employer on a fulltime
basis with respect to any Plan Year if the relationship during such year between
the him/her and the Employer is the legal relationship of employer and employee,
and, if his/her customary employment for such year is for at least 30 hours per
week.  Persons employed on a temporary basis or whose customary employment is
for less than 30 hours per week shall not be Employees for purposes of this
Section 2.17.

     Section 2.18.  Employer shall mean Whittaker Corporation and any
     ------------   --------                                         
Participating Affiliates.
<PAGE>
 
     Section 2.19.  Entry Date shall mean the first day of the month coinciding
     ------------   ----------                                                 
with or next following the Employee's Date of Employment.

     Section 2.20.  FMLA Leave shall mean an Employee's leave of absence granted
     ------------   ----------                                                  
under the Family and Medical Leave Act of 1993 (or any state law that provides
more generous family or medical leave).

     Section 2.21.  ERISA shall mean the Employee Retirement Income Security Act
     -------------  -----                                                       
of 1974, as from time to time amended.

     Section 2.22.  Forfeitures shall mean the divested portion of a
     ------------   -----------                                     
Participant's Health Care Spending Account, or Dependent Care Spending Account,
determined in accordance with the provisions of Section 4.4.

     Section 2.23.  Former Participant shall mean any person who ceases to be a
     ------------   ------------------                                         
Participant, but whose interest in the Plan has not been wholly distributed or
forfeited.

     Section 2.24.  Health Care Spending Account shall mean the balance posted
     ------------   ----------------------------                              
to the record of each Participant, or Former Participant consisting of Employer
contributions and any elective reductions of Compensation for payment of Medical
Reimbursement Benefits less any payment therefrom.

     Section 2.25.  Highly Compensated Employee shall mean an individual as
     ------------   ---------------------------                            
described in Code Section 414(q).

     Section 2.26.  Highly Compensated Individual or Participant shall mean an
     ------------   --------------------------------------------              
individual as described in Code Section 125(e). With respect to the Health Care
Spending Account, Highly Compensated Individual shall mean an individual as
described in Code Section 105(h).

     Section 2.27.  Key Employee shall mean an individual as described in Code
     ------------   ------------                                              
Section 416(i)(1).

     Section 2.28.  Medical Plan shall mean the group medical benefit programs
     ------------   ------------                                              
sponsored by Whittaker Corporation as incorporated herein.

     Section 2.29.  Medical Reimbursement Benefits shall mean health-related
     ------------   ------------------------------                          
expenditures which meet the definition of medical care under Section 213 of the
Code as set forth in Article VI.

     Section 2.30.  Option shall mean a level of coverage with respect to the
     ------------   ------                                                   
Medical, Dental or Vision Plan.

     Section 2.31.  Participant shall mean every Employee who meets the
     ------------   -----------                                        
requirements for participation set forth in Article III.

     Section 2.32.  Plan shall mean the Whittaker Corporation Cafeteria Plan as
     -------------  -----                                                      
herein set forth and as it may be duly amended.

     Section 2.33.  Plan Administrator shall be the Committee which shall be
     ------------   ------------------                                      
responsible for the functions and management of the Plan.

     Section 2.34.  Plan Benefits shall mean Medical Reimbursement Benefits,
     ------------   -------------                                           
Dependent Care Benefits or premium payments, as may be elected by a Participant
pursuant to Section 4.1.

     Section 2.35.  Plan Year shall mean the twelve-month period ending on
     ------------   ---------                                             
December 31 of each year.  The Plan Year shall be the period of coverage for
each benefit hereunder.
<PAGE>
 
     Section 2.36.  Qualifying Dependent, with respect to Dependent Care
     ------------   --------------------                                
Benefits, shall mean any of the following individuals for whom the Participant
is entitled to reimbursement for the expenses described in Section 7.4:

     (a)  A Dependent of the Participant who is under the age of 13 and with
          respect to whom the Participant is entitled to an exemption under Code
          Section 151;

     (b)  A Dependent of the Participant who is physically or mentally incapable
          of caring for himself; or

     (c)  The spouse of the Participant who is physically or mentally incapable
          of caring for himself/herself.

     For purposes of (a) and (b), the child of divorced parents shall be treated
as a Qualifying Dependent of the custodial parent (as defined in Code Section
152(e)(1)), notwithstanding Code Sections 152(e)(2) and 152(e)(4).

     Section 2.37.  Gender and Number.  The masculine gender shall be deemed to
     ------------   -----------------                                          
include the feminine and the singular shall include the plural unless otherwise
clearly required by the context.

     Section 2.38  Vision Plan.  Shall mean the Whittaker Corporation Vision
     ------------  ------------                                             
Care Plan as incorporated herein.

     Section 3.1.  Participation.  During the period designated by the Committee
     -----------   -------------                                                
but no later than December 31, every Employee who was has satisfied the Medical,
Dental or Vision Plan eligibility requirements shall be eligible to participate
in the Plan as of the next succeeding January 1, provided he/she enrolls and
makes the election required by Section 4.1 on or before his or her Entry Date.

     Every other Employee shall be eligible to participate as of his Entry Date,
provided he enrolls and makes the elections required by Section 4.1 on or before
his Entry Date.

     An Employee who fails to take the necessary steps to participate in the
Plan as of his Eligibility Date shall be able to participate in a future Plan
Year provided he enrolls and makes the election required by Section 4.1 prior to
the beginning of such future Plan Year.

     Section 3.2.  Termination of Participation.
     -----------   ---------------------------- 

     (a)  Participation in the Plan shall terminate as to all Participants on
          the date the Plan is terminated, as hereinafter provided, and, as to
          an individual Participant, on the last day of the calendar month in
          which occurs the earliest of the following dates:

          (1)  The date the Plan is amended to terminate the coverage of a class
               of Employees of which such Participant is a member.

          (2)  The date such Participant ceases to be a member of a class or
               classes of Employees eligible for coverage.

          (3)  The date such Participant's active employment with the Employer
               is terminated.

          (4)  The date such Participant ceases to be regularly scheduled to
               work at least 30 hours per week.
<PAGE>
 
   (b)(1) Dependent Care Spending Account.  Following termination of
          --------------------------------                          
          participation, a Participant shall, for the sole purpose of receiving
          Dependent Care Spending Account reimbursements, continue to be treated
          as a Participant until the end of the Plan Year in which such
          termination occurred.  Claims for Dependent Care Benefit expenses
          incurred during the Plan Year but following the Participant's date of
          termination may be submitted within the time period set forth in
          Section 6.6.  Such reimbursement following termination shall not
          exceed the actual account balance of the Dependent Care Spending
          Account.

   (b)(2) Health Care Spending Account.  If participation in the Health Care
          ----------------------------                                      
          Spending Account ceases due to a termination of active employment
          (other than by reason of such Employee's gross misconduct) or by
          reason of a reduction in the Employee's regularly scheduled hours,
          such participation may be continued as set forth herein.

          Following appropriate notice, an Employee may elect to continue
          coverage under the Plan for himself and/or his Dependents or a
          Dependent may elect to continue coverage, all conditioned upon a
          timely election and timely payment of the required contributions to
          the Health Care Spending Account.  An election to continue coverage
          shall be considered timely if such election is made within the 60 day
          period prescribed by Code Section 4980B.  Required contributions shall
          be equal to 102% of the applicable premium, or cost to the Plan, for
          coverage of similarly situated Employees and/or Dependents who have
          not qualified for continuation coverage.  Such continued coverage
          shall terminate upon the first to occur of the following:

          (A)  the date the Employer ceases to provide any group health plan to
               any Employee.

          (B)  the end of the period for which a contribution is made, if the
               next required contribution is not timely made.  A contribution
               will not be timely made unless it is made within 30 days after
               the due date, which is the first day of the period (such as a
               calendar month) for which it is made.  However, an Employee's or
               Dependent's first contribution under this Section shall be
               considered timely made if made by the day which is forty-five
               days after the day on which the Employee or Dependent made the
               initial election for continuation coverage under this Section.

          (C)  the date on which he becomes covered under any other group health
               care plan (as an employee or otherwise), provided the other group
               health plan does not exclude or limit the available coverage
               because of any pre-existing condition of such Employee or
               Dependent.

          (D)  the date on which he becomes entitled to Medicare benefits under
               Title XVIII of the Social Security Act after the date of the
               election.

          (E)  twenty-nine months from the date of termination of active
               employment or reduction in hours for an Employee or Dependent who
               at the time of such event is determined to be disabled for
               purposes of Title II or Title XVI of the Social Security Act at
               any time during the first 60 days of continuation coverage;
               provided, the Employee or Dependent notifies the Plan
               Administrator of such determination before the end of the
               eighteenth month of continuation coverage.  Provided further, if
               the individual entitled to the 29 months of continuation coverage
               has non-disabled family members, those non-disabled family
               members may be added to the disabled individual's continuation
               coverage.  The Employee or Dependent shall also notify the Plan
               Administrator:
<PAGE>
 
               (1)  within sixty days of the determination of such Employee's or
                    Dependent's disability for purposes of Title II or Title XVI
                    of the Social Security Act, and

               (2)  within sixty days of the date of final determination that
                    the Employee or Dependent is no longer disabled.  In such a
                    case, the Employee's or Dependent's coverage under the Plan
                    shall cease on the first day of the month coincident with or
                    next following thirty days after the date of the final
                    determination that the Employee or Dependent is no longer
                    disabled.

               For purposes of this subsection (E), the Plan Administrator shall
               charge the Employee or Dependent 150% of the applicable premium
               after the eighteenth month of continuation of coverage under the
               Plan.

          (F)  eighteen months from the date of termination of active employment
               or reduction of hours; however, if another qualifying event
               occurs within eighteen months of the date of termination of
               active employment or reduction of hours (or within twenty-nine
               months of the initial qualifying event for an individual
               described in paragraph (E) above, is determined to be disabled
               for purposes of Title II or Title XVI of the Social Security
               Act), thirty-six months from the date of the initial qualifying
               event.

               A covered former Employee receiving continuation coverage may add
               his newborn or adopted Dependent child(ren) to continuation
               coverage, provided the former Employee adds such child(ren) to
               continuation coverage within 31 days of the birth or adoption and
               pays the additional premium.  These child(ren) who are added to
               continuation coverage shall be considered qualified beneficiaries
               for purpose of Code Section 4980B.

               This section shall be administered in accordance with the
               requirements of Code Section 4980B and any amendments thereto and
               any regulations thereunder.

          (G)  The Committee in its discretion, may adopt additional rules to
               ensure that the Plan meets the applicable requirements of Code
               Section 4980B for extending the option to continue coverage under
               the Health Care Spending Account to Participants and their
               covered Dependents.

     Section 3.3.  Special Rules for FMLA Leaves.  Prior to commencement of a
     -----------   -----------------------------                             
FMLA Leave, an Employee may choose to maintain or drop coverage under the
Medical, Dental or Vision Plans and Health Care Spending Account for the
duration of the FMLA Leave.  If a Participant ceases coverage under the Health
Care Spending Account, claims incurred after coverage ceases shall not be
eligible for reimbursement.  The Employee's entitlement to any other benefit
shall be determined by the Committee's established policy for providing such
benefit to Employees on other leaves of absence.

     If the FMLA Leave is paid, payment shall continue to be made under the Plan
by the method previously selected by the Participant.  If the FMLA Leave is
unpaid, the Committee shall provide the Employee with written notice of the
terms of the payment of premiums for coverage during FMLA Leave.  The
Committee's obligation to maintain coverage shall stop if the Participant's
payment is more than 30 days late; provided, that the Committee has provided
written notice that coverage will stop at least 15 days before coverage stops;
and provided further, that if the Committee has an established policy for other
forms of unpaid leave of absence under which coverage stops retroactively to the
date the unpaid premium payment was due, the Committee may stop coverage
retroactively to such date in accordance with that policy if the 15-day notice
was given.
<PAGE>
 
     If the Employee drops coverage or fails to make the required premium
payment during FMLA Leave, the Employee may restore equivalent coverage upon
return from FMLA Leave without any waiting period or preexisting condition
limitation.  The Committee reserves the right to recover the Employee's share of
premium payments missed during FMLA Leave, which the Committee paid in order to
maintain coverage, when the Participant returns to work or if the Employee fails
to return, unless the failure is due to circumstances beyond the Employee's
control.

     Section 3.4.  Special Rules for Veterans.  Prior to commencement of an
     -----------   --------------------------                              
absence from active work for service in the uniformed services, an Employee may
choose to maintain or drop coverage under the Medical, Dental or Vision Plans
and Health Care Spending Account for the lesser of (a) the 18-month period
beginning on the first date of absence, or (b) the period ending on the day
after the date on which the Employee fails to apply for or return to employment,
as determined under 38 U.S.C. Section 4312(e).

     An Employee who elects to continue coverage may not be charged more than
102 percent of the full premium for the applicable coverage.  Provided that an
employee whose service in the uniformed services is for less than 31 days may
not be charged more than the Employee share, if any, for such coverage.

     If an Employee's coverage is dropped because of service in the uniformed
services, the Employee's coverage must be restored upon re-employment without
any waiting period or preexisting condition limitation, except for coverage of
any illness or injury incurred in or aggravated during performance of service in
the uniformed services.
<PAGE>
 
                                   ARTICLE IV

                       CAFETERIA BENEFITS PLAN OPERATION

     Section 4.1.  Employee Elections.
     -----------   ------------------ 

     (a)  Employee Compensation Reduction.
          ------------------------------- 

          (1)  In accordance with Article V, Medical, Dental, and Vision Plan
               Premiums a Participant may elect to reduce his Compensation by an
               amount up to the amount equal to medical, dental, and vision plan
               premiums eligible to be paid pursuant to the Plan during the Plan
               Year for which the election is made.  Such reduction shall be
               consistent with the Participant's coverage elections under
               Section 4.1(b) and Section 5.2.

          (2)  In accordance with Article VI, Medical Reimbursement Benefits, a
               Participant may elect to reduce his Compensation by a dollar
               amount up to $2,500 during the Plan Year for which the election
               is made.  Such amount shall be in addition to the amounts, if
               any, elected pursuant to Sections 4.1(a)(1) and 4.1(a)(3).
               Reductions of Compensation pursuant to this Section 4.1(a)(2)
               shall be credited to the Participant's Health Care Spending
               Account.

          (3)  In accordance with Article VII, Dependent Care Benefits, a
               Participant may elect to reduce his Compensation by a dollar
               amount up to $5,000 during the Plan Year for which the election
               is made.  Such amounts shall be in addition to the amounts, if
               any, elected pursuant to Sections 4.1(a)(1) and 4.1(a)(2).
               Reductions of Compensation pursuant to this Section 4.1(a)(3)
               shall be credited to the Participant's Dependent Care Spending
               Account.

          (4)  Annual elections to reduce Compensation or to change existing
               elections shall be made during the period specified by the
               Committee, but by no later than December 31 of each year to be
               effective as of January 1 of the following Plan Year.

          (5)  An Employee may not modify or revoke his Compensation reduction
               election at any time during the Plan Year except as follows:

               (A)  An Employee may revoke an election and may make a new
                    election for the remaining portion of the Plan Year if the
                    revocation and new election are both on account of a Change
                    in Family Status and consistent with such Change in Family
                    Status.  With respect to the Medical, Dental and Vision Plan
                    an election change is consistent with a Change in Family
                    Status if and only if the Change in Family Status results in
                    the Employee or the Employee's Dependent gaining or losing
                    eligibility for medical, dental or vision coverage under
                    either the Plan or Plan of the Dependent's employer and the
                    election change corresponds with that gain or loss of
                    coverage.  An Employee gains or loses eligibility for
                    coverage if he or she becomes eligible or ineligible for a
                    particular benefit package option under the Plan.

                    The Participant must notify the Plan Administrator in
                    writing within 31 days of a Change in Family Status and
                    describe the reason that the change 
<PAGE>
 
                    in election is consistent with the Change in Family Status.
                    Based on the facts and circumstances presented by the
                    Participant, the Plan Administrator will determine whether
                    to approve the election change as consistent with the Change
                    in Family Status. Each benefit election change shall be
                    reviewed separately to determine whether it is consistent
                    with the Change in Family Status.

                    The Plan shall permit an Employee to revoke an election of
                    medical, dental or vision coverage and make a new election
                    that corresponds with the special enrollment rights provided
                    in Code Section 9801(f), whether or not the change in
                    election is permitted under this section.

                    Notwithstanding any other provision in this section, if the
                    Employee or Employee's Dependent becomes eligible for
                    continuation coverage under the Medical, Dental or Vision
                    Plan as provided in Code Section 4980B, the Employee may
                    elect to increase payments under the Plan in order to pay
                    for the continuation coverage.

               (B)  An election is revoked if an Employee separates from the
                    service of the Employer.  However, if the individual is
                    rehired by the Employer during the same Plan Year, he must
                    make the same elections which were previously in effect
                    during the same Plan Year, unless he has had a Change in
                    Family Status while separated from service with the
                    Employer.

               (C)  An election is revoked if the Participant fails to make a
                    required premium payment.  If this occurs, however, the
                    Participant is prohibited from making a new election for the
                    remainder of the Plan Year.

          (6)  The Committee shall terminate the elections of Highly Compensated
               Employees, and Highly Compensated Individuals at such time the
               applicable discrimination tests indicate that such elections must
               be terminated in order to comply with the requirements of Code
               Section 125 and 129;  provided however, the Committee shall not
               modify the elections of any individual in such a way that it will
               violate the requirement that elective contributions must be
               forfeited for the applicable Plan Year.

          (7)  If an Employee fails to take the necessary steps to make any
               available election on a timely basis pursuant to this Section
               4.1(a), he shall be treated as having made an election that is
               necessary for and consistent with the coverage provided in
               accordance with Section 4.1(b).

     (b) Election of Plan Benefits.
         ------------------------- 

          (1)  A Participant may elect not to be covered by the Medical, Dental
               or Vision Plan.

          (2)  Each Participant may elect prior to the beginning of the next
               succeeding Plan Year to use amounts which will be allocated to
               his Health Care Spending Account to pay Medical Reimbursement
               Benefits as provided in Article VI.

          (3)  Each Participant may elect prior to the beginning of the next
               succeeding Plan Year to use amounts that will be allocated to his
               Dependent Care Spending Account to pay Dependent Care Benefits as
               provided in Article VII.
<PAGE>
 
          (4)  Each Participant shall elect his coverage under the Medical,
               Dental or Vision Plans.  Such election shall specify an Option
               for the level of Dependent coverage, if any, for these benefits.

          (5)  An Employee who fails to take the necessary steps to participate
               in the Plan as of the employee Eligibility Date shall be able to
               participate in a future Plan Year provided such employee enrolls
               and makes the election required by Section 4.2 prior to the
               beginning of such future Plan Year.  If an Employee makes a
               timely election but is awaiting underwriter approval of coverage,
               such employee will retain coverage in effect at that time, if
               any, and will participate in this Plan in a manner consistent
               with such coverage.

          (6)  If an Employee (other than one making the initial election) fails
               to take the necessary steps to make any available election on a
               timely basis or is awaiting underwriter approval of coverage, the
               employee will retain coverage in effect at that time; provided
               however, the employee shall not participate in the Health Care
               Spending Account or Dependent Care Spending Account.

          (7)  Elections pursuant to this Section 4.1(b) shall be made on or
               before December 31 each year to be effective as of January 1 of
               the following Plan Year.  An Employee may not modify or revoke
               such election at any time during the Plan Year except as
               described in Section 4.1(a)(5).

     Section 4.2.  Employer Contributions.
     -----------   ---------------------- 

     (a)  The Company shall contribute to the Plan for each Plan Year, such
          amount which shall equal the total of each Participant's reduction of
          Compensation as elected pursuant to Section 4.1(a)(1) and such amount
          which shall equal the total of each Participant's reduction of
          Compensation as elected pursuant to Sections 4.1(a)(2) and 4.1(a)(3).
          The total contribution for the Plan Year, pursuant to this Section
          4.2(a), shall not exceed the amount equal to those premiums eligible
          to be paid pursuant to the Plan during the Plan Year for which
          Participant elections are made plus Participants reduction of
          Compensation amounts pursuant to Sections 4.1(a)(2) and 4.1(a)(3).

     (b)  Participants who waive coverage under the Medical, Dental or Vision
          Plan pursuant to Section 4.1(b)(1) shall be entitled to Credits as
          shown on Schedule A for each month during the Plan Year that he is a
          Participant.

          The amount contributed by the Company on behalf of each Participant
          entitled to the Credits described above shall be an amount for each
          month during the Plan Year that the Employee is a Participant as shown
          on Schedule A, incorporated by reference.  The Credits described in
          Schedule A may be changed as premium costs change but such changes
          shall only be effective as of January 1 of each Plan Year.
          Participants shall be notified of any change in Schedule A prior to
          the beginning of each Plan Year.  Such Credits may be allocated to the
          Medical Reimbursement Spending Account or the Dependent Care Spending
          Account, or a Participant may elect to receive these amounts in cash.

     (c)  Except as provided in Section 4.4, all contributions made by the
          Company shall be used for the exclusive benefit of Participants under
          the Plan.
<PAGE>
 
     Amounts in the Health Care Spending Account shall be available for Medical
Reimbursement Benefits pursuant to Article VI.  Amounts in the Dependent Care
Spending Account shall be available for Dependent Care Benefits pursuant to
Article VII.

     Section 4.3.  Account Adjustments.  Each Adjustment Date, the accounts of
     -----------   -------------------                                        
each Participant or Former Participant shall be adjusted to reflect reductions
of Compensation by the Participant, Employer contributions and the payment of
Plan Benefits as elected by the Participant.

     Section 4.4.  Forfeitures.  Except as otherwise provided in Sections 6.6
     -----------   -----------                                               
and 7.6, any amount which may remain in the Health Care Spending Account or
Dependent Care Spending Account as of the last day of the Plan Year shall be
forfeited.  Any such forfeiture shall be used to reduce the administrative
expenses of the Plan for the next succeeding Plan Year.
<PAGE>
 
                                   ARTICLE V

                    MEDICAL, DENTAL AND VISION PLAN PREMIUMS

     Section 5.1.  Type of Plan.  This Article shall incorporate the Medical
     -----------   ------------                                             
Plan, the Dental Plan and the Vision Plan as part of the Whittaker Corporation
Cafeteria Plan.  This Article shall provide for payment of the cost of medical
care coverage, dental coverage and vision coverage through reduction of
Compensation by Participants.  The benefits under the Medical, Dental and Vision
Plan shall be paid under the terms of such plans as in effect from time to time.

     Section 5.2.  Election of Plan Benefits.  During the period designated by
     -----------   -------------------------                                  
the Committee but no later than December 31 of each Plan Year, each Participant
may elect to reduce his Compensation to purchase coverage under the Medical
Plan, the Dental Plan or the Vision Plan for the next Plan Year.  Such election
shall be irrevocable except as described in Section 4.1(a)(5).  Any decision
regarding the modification or revocation of an election pursuant to Section
4.1(a)(5) shall be made by the Committee on a nondiscriminatory basis and in
accordance with applicable law and regulation.

     Section 5.3.  Adjustments.  The premium amounts shall be paid by the
     -----------   -----------                                           
Committee and shall be transferred to the requisite insurance carrier or claims
administrator for the Plan as elected by the Participant in accordance with the
fiduciary standards of ERISA.  Solely for purposes of 29 CFR Section 2510.3-102,
an Employee's (or Dependent's) after-tax contributions made for a benefit
coverage available under the Plan shall be considered to have been made pursuant
to the terms of a cafeteria plan under Code Section 125.
<PAGE>
 
                                   ARTICLE VI

                         MEDICAL REIMBURSEMENT BENEFITS

     Section 6.1.  Type of Plan.  This Article shall establish the Health Care
     -----------   ------------                                               
Spending Account as a part of the Whittaker Corporation Cafeteria Plan.

     Section 6.2.  Participant Elections.  During the period designated by the
     -----------   ---------------------                                      
Committee but no later than December 31 of each Plan Year, each Participant may
elect that amounts allocated to his Health Care Spending Account for the next
Plan Year be used to pay Medical Reimbursement Benefits as provided below.  On
or after January 1 of each Plan Year, a Participant may not elect to change the
dollar amount allocated to his Health Care Spending Account for Medical
Reimbursement Benefits except as described in Section 4.1(a)(5).  The maximum
amount available to be contributed to the Health Care Spending Account for any
pay period shall be ratably calculated based on the number of pay periods in the
Plan Year.  Any decision regarding the modification or revocation of an election
pursuant to Section 4.1(a)(5) shall be made by the Committee on a
nondiscriminatory basis and in accordance with applicable law and regulation.

     Section 6.3.  Medical Reimbursement Benefits.  A Participant or his
     -----------   ------------------------------                       
Dependent who incurs expenses as a result of illness or injury shall be eligible
for the Medical Reimbursement Benefits provided for below.  It is intended that
the provisions of this Article VI not be exclusive as to reimbursable expenses
and that any health related expenditures which meet the definition of medical
care under Code Section 213 shall be considered as a reimbursable expense.  The
maximum dollar amount available to each Participant for reimbursement for each
Plan Year pursuant to this Article VI shall be $2,500 and shall be administered
in accordance with the requirements of Code Section 105(h) and Code Section 125.

     Section 6.4.  Medical Expenses.  A Participant may elect a Health Care
     -----------   ----------------                                        
Spending Account distribution to reimburse such Participant for the following
expenses incurred by the Participant or a covered Dependent during a Plan Year
after the Participant's Entry Date which are not reimbursed by insurance or by
another Code Section 125 arrangement:

     (a)  All deductible amounts paid by the Participant in accordance with the
          terms of the Medical, Dental or Vision Plan.

     (b)  All co-payment amounts paid by the Participant as required on account
          of Medical, Dental or Vision Plan benefits being paid on a co-payment
          basis.

     (c)  All amounts paid by the Participant as required after a maximum
          benefit has been paid by the Medical, Dental or Vision Plan.

     (d)  All amounts paid by the Participant for charges excluded by the terms
          of the Medical, Dental or Vision Plan.

     (e)  Any other expenses which qualify as medical care under Code Section
          213, except premiums or other payments made for medical, dental or
          vision coverage or qualified long-term care expenses (as defined in
          Code Section 7702B).

     Section 6.5.  Documentation of Expenses.  A Participant who applies for
     -----------   -------------------------                                
reimbursement of Medical Reimbursement Benefits shall submit the following
information to the Benefits Administration Manager:

     (a)  a statement from the provider that the medical expenses have been
          incurred and the amount and date of the medical expenses;
<PAGE>
 
     (b)  the name of the person, organization or entity to which the medical
          expenses were paid;

     (c)  the name of the person for whom the medical expenses were incurred;
          and

     (d)  a statement from the Participant that the medical expenses have not
          been reimbursed or are not reimbursable under any other health plan
          coverage.

     Section 6.6.  Submission of Claims.  All claims for expenses pursuant to
     -----------   --------------------                                      
this Article VI must be submitted during the Plan Year the expense is incurred,
or on or before March 31 following the close of such Plan Year.

     Section 6.7.  Assignability.  Amounts payable by the Plan may not be used
     -----------   -------------                                              
to make direct payments to physicians, hospitals or other providers of services
covered by the Plan.

     Section 6.8.  Coordination of Benefits.  Benefits provided by this Plan may
     -----------   ------------------------                                     
not be coordinated with any other medical, dental or vision care benefits
provided by any other plan.  For purposes of coordination of benefits, this Plan
is not a group health plan.

     Section 6.9.  Separate Written Plan.  For purposes of Sections 105(b) and
     -----------   ---------------------                                      
106 of the Code, this Article VI shall constitute a separate medical
reimbursement plan.  To the extent necessary, other provisions of the Plan shall
be incorporated by reference in this Article VI.
<PAGE>
 
                                  ARTICLE VII

                            DEPENDENT CARE BENEFITS

     Section 7.1.  Type of Plan.  This Article shall establish the Dependent
     -----------   ------------                                             
Care Spending Account as a part of the Whittaker Corporation Cafeteria Plan.

     Section 7.2.  Participant Elections.  During the period designated by the
     -----------   ---------------------                                      
Committee but no later than December 31 of each Plan Year, each Participant may
elect that amounts allocated to his Dependent Care Spending Account shall be
used to pay Dependent Care Benefits.  On or after January 1 of each Plan Year a
Participant may not elect to change the dollar amount allocated to his Dependent
Care Spending Account for Dependent Care Benefits except as described in Section
4.1(a)(5).  The maximum amount available to be contributed to the Dependent Care
Spending Account for any pay period shall be ratably calculated based on the
number of pay periods in the Plan Year.  Any decision regarding the modification
or revocation of an election pursuant to Section 4.1(a)(5) shall be made by the
Committee on a non-discriminatory basis and in accordance with applicable law
and regulation.

     Section 7.3.  Dependent Care Benefits.  A Participant who incurs expenses
     -----------   -----------------------                                    
for Dependent care shall be eligible for the Dependent Care Benefits provided
for below.  It is intended that the provisions of this Article VII constitute a
Dependent care assistance program in accordance with Section 129 of the Code.
The maximum dollar amount available to each Participant for reimbursement for
each Plan Year pursuant to this Article VII shall be $5,000 or $2,500 if married
filing separately, and shall be administered in accordance with the requirements
of Code Section 129.  If a Participant's spouse also participates in a Dependent
care assistance plan, as defined in Code Section 129(d)(l), the $5,000
limitation in this Plan shall be reduced dollar-for-dollar by the amount
contributed to the spouse's Dependent care assistance plan.  In addition, the
amount available to each Participant for reimbursement is subject to the limits
set forth in Section 7.8.

     Section 7.4.  Dependent Care Expenses.  A Participant may elect a Dependent
     -----------   -----------------------                                      
Care Spending Account distribution to reimburse such Participant for expenses
paid for household services and Dependent care services which are incurred after
the Participant's Entry Date to enable the Participant (or if married, the
Participant and his spouse) to be employed for any period for which there are
one or more Qualifying Dependents, with respect to the Participant.  Such
expenses shall not include amounts paid for services outside the Participant's
household at a camp where a Qualifying Dependent stays overnight.  Household and
Dependent care services may be provided inside or outside the home of the
Participant, but may not be provided by:

     (a) an individual who would qualify as a Dependent for purposes of Code
Section 151,

     (b)  the Participant's spouse, or

     (c) a child of the Participant who has not attained age 19 at the close of
the Participant's tax year.

     Additionally, if such services are provided outside the Participant's
household, they must be incurred for care of an individual described in Section
7.4(a) or an individual described in Section 7.4(b) or (c) who regularly spends
at least eight hours each day in the Participant's household.

     Section 7.5.  Documentation of Expenses.  A Participant who applies for
     -----------   -------------------------                                
reimbursement of Dependent Care Benefits shall submit the following information
to the Plan Administrator or its designee:
<PAGE>
 
     (a)  a statement from the Dependent care provider that the child care
          expenses have been incurred and the amount and date of the expense;

     (b)  the name, address and taxpayer identification number of the Dependent
          care provider; and

     (c)  the name of each Qualifying Dependent for whom the expenses are
          incurred.

     Section 7.6.  Submission of Claims.  All claims for expenses pursuant to
     -----------   --------------------                                      
this Article VII must be submitted during the Plan Year the expense is incurred,
or on or before March 31 following the close of such Plan Year.

     Section 7.7.  Statement to Participants.  On or before January 31 of each
     -----------   -------------------------                                  
Plan Year, a written statement shall be provided to a Participant who has
elected a Dependent Care Spending Account distribution under this Article during
the preceding calendar year.  Such statement shall show the amounts reimbursed
to such Participant from the Plan.

     Section 7.8.  Maximum Benefit.  The maximum benefit allowable for Dependent
     -----------   ---------------                                              
Care Benefits for each Plan Year shall be the lesser of the Participant's earned
income or the Participant's spouse's earned income as determined by Code Section
129.  For purposes of this Section 7.8, the spouse of any Participant who is a
student or a disabled individual as described in Code Section 21(d)(2), shall be
deemed for each month during which such spouse is a student or disabled
individual to be gainfully employed and have earned income for such month of:

     (a)  $200, if there is one Qualifying Dependent with respect to the
          Participant for such month; or

     (b)  $400, if there is more than one Qualifying Dependent with respect to
          the Participant for such month.

     Section 7.9.  Assignability.  Amounts payable by the Plan may not be used
     -----------   -------------                                              
to make direct payments to providers of Dependent care services.

     Section 7.10.  Separate Written Plan.  For purposes of Section 129 of the
     ------------   ---------------------                                     
Code, this Article VII shall constitute a separate Dependent care assistance
plan.  To the extent necessary, other provisions of the Plan shall be
incorporated by reference in this Article VII.
<PAGE>
 
                                  ARTICLE VIII

                                      CASH

     Section 8.1.  Effective January 1, 1999, each Participant may elect prior
     ------------                                                             
to the beginning of each Plan Year to receive all or part of the Employer
contribution which is made pursuant to Section 4.2(b) for such Plan Year in cash
in lieu of purchasing other benefits.  Any cash elected pursuant to this Article
VIII shall be distributed, in accordance with the company's regular payroll
practices.
<PAGE>
 
                                   ARTICLE IX

                                    ACCOUNTS

     Section 9.1.  Committee Responsibility.  The Committee shall determine the
     -----------   ------------------------                                    
Participants, Former Participants, and beneficiaries who are entitled to one or
more of the allocations hereinafter described, and it shall prepare a statement
showing the information necessary to make the proper allocations.  This
information shall include the full names of affected Participants, Former
Participants, and beneficiaries, the amounts elected by each Participant
pursuant to Section 4.1, and the names of the Former Participants who terminated
employment with the Employer.

     The Committee shall maintain for each applicable Participant a separate
Health Care Spending Account, and Dependent Care Spending Account to record the
amount attributable to reductions of Compensation pursuant to Section 4.1.  Each
such account shall consist of a record of the contributions and adjustments.

     Section 9.2.  Health Care Spending Account Adjustments.  As of each
     ----------- ------------------------------------------             
Adjustment Date, the Health Care Spending Account of each Participant, Former
Participant, and beneficiary shall be adjusted by the following additions and
subtractions:

     (a)  Compensation Reductions:  There shall be added to the Health Care
          -----------------------                                          
          Spending Account of each Participant those amounts of Compensation
          reduced pursuant to Section 4.1(a)(2).

     (b)  Payments:  There shall be subtracted the total amount of any payments
          --------                                                             
          made from the Health Care Spending Account to the Participant or for
          his benefit.  Provided however, the total amount that is to be
          contributed to the Health Care Spending Account during the Plan Year
          will be available for reimbursement to the Participant at all times
          during the Plan Year, reduced as of any particular time for prior
          reimbursements for the same Plan Year.  Provided further that if a
          Participant, due to termination of employment, ceases to make
          contributions to the Health Care Spending Account during a Plan Year,
          the amount available for reimbursement of claims incurred prior to the
          date of such event shall be the Participant's annual election reduced
          by prior reimbursements for the same Plan Year.

     (c)  Forfeitures. Any amounts remaining in the Health Care Spending Account
          -----------                                                           
          as of December 31 of each Plan Year, shall be forfeited; provided,
          however, that any claims pursuant to Article VI which are incurred but
          unpaid as of December 31 shall be processed before any amounts are
          forfeited.  Such claims must be submitted on or before March 31 of the
          next succeeding Plan Year.

     Section 9.3.  Dependent Care Spending Account Adjustments.  As of each
     -----------   -------------------------------------------             
Adjustment Date, the Dependent Care Spending Account of each Participant, Former
Participant, and beneficiary shall be adjusted by the following additions and
subtractions:

     (a)  Compensation Reductions:  There shall be added to the Dependent Care
          -----------------------                                             
          Spending Account of each Participant those amounts of Compensation
          reduced pursuant to Section 4.1(a)(3).

     (b)  Payments:  There shall be subtracted the total amount of any payments
          --------                                                             
          up to the account balance made from the Dependent Care Spending
          Account to the Participant or for his benefit.
<PAGE>
 

     (c)  Forfeitures.  Any amounts remaining in the Dependent Care Spending
          -----------                                                       
          Account as of December 31 of each Plan Year shall be forfeited;
          provided, however, that any claims pursuant to Article VII which are
          incurred but unpaid as of December 31 shall be processed before any
          amounts are forfeited.  Such claims must be submitted on or before
          March 31 of the next succeeding Plan Year.
<PAGE>
 
                                   ARTICLE X

          ALLOCATION OF FIDUCIARY RESPONSIBILITIES AND ADMINISTRATION

     Section 10.1.  Allocation of Fiduciary Responsibilities.  The
     ------------   ----------------------------------------      
responsibilities allocated to the named fiduciaries are as follows:

     (a)  The Board shall have the sole authority:

          (1)  to amend the Plan,

          (2)  to appoint and remove members of the Committee, and

          (3)  to terminate the Plan.

     (b)  The Committee shall have the sole authority:

          (1)  to interpret the provisions of the Plan and to determine the
               rights of Participants or Former Participants and beneficiaries
               under the Plan, including, but not limited to, the determination
               or eligibility for benefits,

          (2)  to administer the Plan in accordance with its terms, as construed
               by the Committee,

          (3)  to file such reports as may be required to the United States
               Department of Labor, the Internal Revenue Service and any other
               government agencies for which reports may be required to be
               submitted from time to time, and

          (4)  to comply with requirements of law for disclosure of Plan
               provisions and other information relating to the Plan, to
               Participants and other interested parties,

          (5)  to determine the appropriate portion of the Plan's administrative
               expenses which shall be borne by Participants,

          (6)  to determine the amount of Employee contributions for Plan
               Benefits.

     (c)  Fiduciary Discretion.  Plan fiduciaries are empowered to exercise
          exclusive and absolute discretion with respect to matters for which
          they are responsible, including the interpretation of the terms of the
          Plan.  Such discretionary determinations, including those regarding
          Plan terms and eligibility, shall be final and conclusive and shall
          bind all Employees and beneficiaries and the Employer.

     Section 10.2.  The Committee.  The Committee shall consist of not less than
     ------------   -------------                                               
three persons as from time to time appointed by the Board.  Any Committee member
may resign, and the Board may remove any Committee member, with or without
cause, at any time.

     The Committee shall have all authority and responsibility for the
administration and interpretation of the Plan and, for purposes of ERISA, the
Committee shall be its "named fiduciary" with respect to matters for which it is
responsible, provided that the Board shall have the sole authority to amend or
           -------------------------------------------------------------------
terminate the Plan, except as otherwise provided in Section 10.1 hereof.
------------------                                                      
<PAGE>
 
     The Committee may appoint an administrator and may from time to time
allocate or delegate to any subcommittee or member of the Committee, the
administrator, or the Benefit Administration Manager, such duties relative to
the administration and interpretation of the Plan as it deems necessary or
appropriate, including matters involving the exercise of discretion.  Such
designated representatives shall act on behalf of the Committee, and the
Committee shall have the right to overrule any decision made by such designated
representative.

     To the maximum extent permitted by ERISA, every action and determination of
the Committee in accordance with this Article shall be final and binding upon
each Participant, and every other person entitled to or claiming participation
in the Plan or benefits from the Plan. No member of the Committee shall be
entitled to act on or decide any matter relating solely to himself or any of his
rights or benefits under the Plan.

     Section 10.3.  Specific Responsibilities and Authority of the Committee.
     ------------   --------------------------------------------------------  
In furtherance of, and not by way of limitation on, the responsibilities and
authority conferred on the Committee in Section 10.1 and 10.2 hereof, the
Committee shall administer the Plan in accordance with its terms and provisions
and shall have the following specific responsibilities and authorities:

     (a)  subject to any required approval of the Board, to appoint, remove or
          substitute the Benefit Administration Manager,

     (b)  to construe and interpret the Plan to pay claims and to determine all
          questions arising in the operation of the Plan, provided that the
          Committee may request the Benefit Administration Manager to determine,
          in accordance with the Plan and generally accepted claims procedures
          and practices, the initial qualification of a claim submitted for
          benefits hereunder,

     (c)  to recommend to the Board such amendments in the Plan as it deems
          necessary or appropriate in order to enable the Plan to comply with
          ERISA and any other applicable legal requirements,

     (d)  to receive reports from any designated representative on the discharge
          of his duties and authority with respect to the Plan, including, any
          documents necessary or appropriate for compliance with the reporting,
          disclosure and recordkeeping requirements contained in ERISA, as well
          as such other records or data as may be necessary or appropriate for
          the proper administration of the Plan,

     (e)  to request such information from the Benefit Administration Manager as
          is necessary to satisfy reporting and disclosure provisions of ERISA
          or to otherwise perform its respective duties hereunder and to fully
          and faithfully perform all other duties assigned to it under the Plan,

     (f)  to employ such independent consulting actuary, certified public
          accountants, legal counsel and other persons as may be required by
          ERISA or as it shall otherwise deem necessary or appropriate in
          connection with the administration and operation of the Plan,

     (g)  to adopt such rules and procedures as the Committee deems necessary or
          appropriate in order to fulfill its responsibilities with respect to
          the Plan, provided that such rules and procedures are uniformly and
          consistently applied to persons in similar circumstances,

     (h)  to hold regular meetings designed to ensure the discharge of its
          responsibilities hereunder and to maintain an accurate written record
          of all such meetings,
<PAGE>
 
     (i)  to furnish the Board with reports, including subjects reported upon to
          it by the administrator and the Benefit Administration Manager, and

     (j)  to take all actions not expressly enumerated herein necessary for
          effective administration of the Plan.

     Section 10.4.  Rules of Procedure.  Subject to the bylaws of the Employer
     ------------   ------------------                                        
and the resolutions of the Board, the Committee shall establish its own rules of
procedure and the time and place of its meetings.  A majority of the members of
the Committee shall constitute a quorum for the transaction of business, and the
act of a majority of the Committee members at a meeting at which a quorum is
present shall be the act of the Committee.  Any action which may be taken at a
meeting of the Committee may be taken without a meeting if a consent, in
writing, setting forth the action so taken, shall be signed by all of the
members of the Committee.

     Section 10.5.  Claims Procedure.
     ------------   ---------------- 

     (a)  Application for Claims.  Any claim by a Participant for benefits shall
          ----------------------                                                
          be submitted to the Benefit Administration Manager.

     (b)  Limitations.  Notwithstanding anything in the Plan to the contrary, no
          -----------                                                           
          benefits shall be payable with respect to any Plan Year in respect of
          any claims for benefits first submitted after March 31 following the
          close of the Plan Year.

     Each Participant or other interested person shall file with the Benefit
Administration Manager such pertinent information concerning himself as the
Benefit Administration Manager may specify, and in such manner and form as the
Benefit Administration Manager may specify or provide, and such person shall not
have any rights or be entitled to any benefits hereunder, as the case may be,
unless such information is filed by him or on his behalf.  Each Participant
claiming benefits under the Plan shall supply at such times and in such manner
as the Benefit Administration Manager may require, written proof that expenses
were incurred or that the benefit is covered under the Plan.

     If the Benefit Administration Manager shall determine that a Participant
has not incurred a covered expense or that the benefit is not covered under the
Plan, or if the Participant shall fail to furnish such proof as is requested, no
benefits hereunder shall be payable to such Participant.

     (c)  Notification of Decision.  Notice of a decision by the Benefits
          ------------------------                                       
          Administration Manager with respect to a claim shall be furnished to
          the Participant within 90 days following the receipt of the claim by
          the Benefits Administration Manager unless special circumstances
          require an extension of time for processing the claim.  If there is a
          need for such an extension, the Benefits Administration manager shall
          furnish written notice of the extension to the Participant prior to
          the expiration of the initial 90-day period.  In no event shall such
          extension exceed a period of 90 days from the end of the initial 90-
          day period.  The notice of extension shall indicate the special
          circumstances requiring the extension and the date by which the notice
          of decision with respect to the claim shall be furnished.
          Commencement of benefit payments shall constitute notice of approval
          of a claim to the extent of the amount of the approved benefit.  If
          such claim shall be wholly or partially denied, such notice shall be
          in writing and worded in a manner calculated to be understood by the
          Participant and shall set forth:  (a) the specific reason or reasons
          for the denial; (b) specific reference to pertinent provisions of the
          Plan on which the denial is based; (c) a description of any additional
          material or information necessary for the Participant to perfect the
          claim and an explanation of why such material or information is
          necessary; and (d) an explanation of the Plan's claims review
          procedure.  If the Benefit Administration 
<PAGE>
 
          Manager fails to notify the Participant of the decision regarding his
          claim in accordance with this Section 10.5(c), the claim shall be
          deemed denied and the Participant shall then be permitted to proceed
          with the claims review procedure provided in Section 10.5(d).

     (d)  Claims Review Procedure.  Within 60 days following receipt by the
          -----------------------                                          
          Participant of notice of the claim denial, or within 60 days following
          the close of the 90-day period referred to in Section 10.5(c) if the
          Benefit Administration Manager fails to notify the Participant of the
          decision during such time period the Participant may appeal denial of
          the claim. The Participant shall be given an opportunity to review
          pertinent documents and to submit issues and comments in writing. A
          request for review by the Benefit Administration Manager shall be in
          writing and shall contain all additional information which the
          Participant wishes the Benefit Administration Manager to consider.
          Following such request for review, the Benefit Administration Manager
          shall fully and fairly review the decision denying the claim.  The
          Benefit Administration Manager may hold a hearing or conduct an
          independent investigation regarding the merits of the denied claim.
          Within 60 days following receipt of the Participant's request for
          review or within 120 days after such receipt where there are special
          circumstances requiring an extension of time for reviewing such denied
          claim, the Benefit Administration Manager shall deliver the decision
          to the Participant in writing.  If the decision on review is not
          furnished within the prescribed time, the claim shall be deemed denied
          on review.

     For all purposes under the Plan, such decision on claims where no review is
requested and decisions on claims where review is requested shall be final,
binding and conclusive on all interested parties as to participation and/or
benefits relating to the Plan.

     Section 10.6.  Expenses.  Except as otherwise provided in the Plan, all
     ------------   --------                                                
expenses and charges incurred in the administration and operation of the Plan,
including fees and expenses which the Committee agrees to pay the Benefit
Administration Manager or other agents or professionals employed or retained
pursuant hereto, shall be paid out of the assets of the Employer.  No
compensation shall be paid by the Plan to any member of the Committee or the
administrator if employed by the Employer but said persons may be reimbursed for
their reasonable expenses incurred in carrying out their duties,
responsibilities and authority hereunder, and the compensation, or the properly
allocable portion thereof, paid to other Employees who are involved in the
administration and operation of the Plan and all other properly allowable
expenses shall, to the extent not paid by the Employer, be treated as
administrative expenses.  No bond shall be required of the members of the
Committee or the administrator, except as otherwise required by law.

     Section 10.7.  Notices.  Any notice, application, instruction, designation
     ------------   -------                                                    
or other form of communication required to be given or submitted by any
Participant shall be in such form as is prescribed from time to time by the
Committee, or its designee, sent by inter-office mail, first class mail or
delivered in person to the Committee of the Plan.    Any notice, statement,
report or other communication from the Employer, the Committee, the Benefit
Administration Manager, or the administrator to any Participant, other Employee
or beneficiary required or permitted by the Plan shall be deemed to have been
duly delivered when given to such person or mailed by first class mail to such
person at his address last appearing on the records of the Employer.  Each
person entitled to receive benefits under the Plan shall file in accordance
herewith his complete mailing address and each change therein.

     Section 10.8.  Agent for Service of Legal Process.  The agent for the
     ------------   ----------------------------------                    
service of legal process under the Plan shall be the Committee or its designated
representative.
<PAGE>
 
     Section 10.9.  Alienation of Benefits.  No amount payable at any time
     ------------   ----------------------                                
hereunder shall be subject in any manner to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of
any kind, and any attempt to alienate, sell, transfer, assign, pledge, attach,
charge or otherwise encumber any such amount, whether presently or hereafter
payable, shall be void.  The Plan shall not be liable for or subject to the
debts or liabilities of any person entitled to any amount payable under the
Plan, or any part thereof, or if by reason of his bankruptcy or other event
happening at any such time such amount would not be enjoyed by him, then the
Committee, in its sole discretion, may terminate his interest in any such amount
and shall hold or apply it to or for the benefit of such person, his spouse,
children or other Dependents, or any of them, in such manner as the Committee
may deem proper.
<PAGE>
 
                                   ARTICLE XI

                           AMENDMENT AND TERMINATION

     Section 11.1.  Right to Amend or Terminate.  The Board shall have the right
     ------------   ---------------------------                                 
at any time to amend or modify the Plan, retroactively or otherwise, or to
terminate or partially terminate the Plan, provided that no such amendment or
termination shall in any manner impair the right of a Participant to receive
benefit payments the Participant was entitled to receive before such amendment
or termination.

     Section 11.2.  Effect of Termination.  Upon complete or partial termination
     ------------   ---------------------                                       
of the Plan, the Committee shall provide for the payment of benefits to each
Participant with respect to which benefits are payable on the date of
termination and for the payment of all expenses and charges properly payable
hereunder, and of any payments due to the Benefit Administration Manager.
<PAGE>
 
                                  ARTICLE XII

                                 MISCELLANEOUS

     Section 12.1.  In General.  Any and all rights or benefits accruing to any
     ------------   ----------                                                 
person under the Plan shall be subject to all terms and conditions of the Plan.
The adoption and maintenance of the Plan shall not constitute a contract between
the Employer and any Employee or be a consideration for, or an inducement or
condition of, employment of any Employee.  Neither participation nor anything
contained in the Plan shall give any Employee the right to be retained in the
employ of the Employer, nor shall it interfere with the right of the Employer to
discharge any Employee at any time.

     Section 12.2.  Filing of Information.  Each eligible Employee or other
     ------------   ---------------------                                  
interested person shall file with the Committee such pertinent information
concerning himself as the Committee may specify, including proof or continued
proof of dependency or eligibility, and in such manner and form as the Committee
may specify or provide, and such person shall not have rights or be entitled to
any benefits or further benefits hereunder unless such information is filed by
him or on his behalf.

     Section 12.3.  Payment to Others than Participants.  If the Committee shall
     ------------   -----------------------------------                         
find that any person to whom any benefits are payable under the Plan is unable
to care for his affairs, then any payment due to him or his estate (unless a
prior claim therefore has been made by a duly appointed legal representative)
may be paid to the spouse, a child, a 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 otherwise entitled to payment, or
the Committee may in its discretion hold such payment until a legal
representative is appointed.  Any such payment shall be a complete discharge of
the liabilities of the Plan.

     Section 12.4.  No Waiver or Estoppel.  No term, condition or provision of
     ------------   ---------------------                                     
the Plan shall be deemed to have been waived, and there shall be no estoppel
against the enforcement of any provision of the Plan, except by written
instrument of the party charged with such waiver or estoppel.  No such written
waiver shall be deemed a continuing waiver unless specifically stated therein,
and each such waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.

     Section 12.5.  Reclassification.  This section applies to any individual
     ------------   ----------------                                         
who is classified by the Employer as a leased employee, independent contractor
or as coming within another non-Employee or ineligible designation.  If any such
individual is thereafter required by the Internal Revenue Service, Department of
Labor or other government agency, or by any court or other tribunal, to be
classified as an Employee, such individual shall not be eligible to participate
in this Plan unless and until the time his is designated by the Plan
Administrator as an eligible Employee.  Such designation shall only provide for
eligibility prospectively from the time it is made.

     Section 12.6.  Limitations on Actions.  No action at law or in equity shall
     ------------   -----------------------                                     
be instituted to recover under the Plan prior to the expiration of 90 days after
a claim for benefits has been filed in accordance with the requirements of the
Plan; nor shall any such action be instituted at any time unless instituted
within three years after the date the expenses which are the subject of or
otherwise involved in such action are incurred or are alleged to have been
incurred; provided that by any limitation on actions regarding benefits shall be
as provided in the Plan.

     Section 12.7.  Compliance with Applicable Law.  Notwithstanding any other
     ------------   ------------------------------                            
provision of the Plan to the contrary, in all instances the Plan shall be
operated in accordance with the requirements of the Family and Medical Leave Act
of 1993 (Public Law 103-3), Section 609 of ERISA and Section 1908 of the Social
Security Act.
<PAGE>
 
     Section 12.8.  Construction.  The Plan shall be construed according to the
     ------------   ------------                                               
laws of the State of California and all provisions hereof shall be administered
according to the laws of said state except as such may be preempted by ERISA.

     Section 12.9.  Headings.  All article and section headings herein have been
     ------------   --------                                                    
inserted for convenience only and shall not affect the meaning of the language
contained herein.

     IN WITNESS WHEREOF, the Whittaker Corporation Cafeteria Plan is by the
authority of the Board of Directors of the Employer, executed on behalf of the
Employer, the 22nd day of January, 1999.

                                        By /s/ Joseph F. Alibrandi
                                           -----------------------------
Attest: /s/ Lynne M.O. Brickner                Joseph F. Alibrandi
       --------------------------              President and Chief
            Lynne M.O. Brickner                Executive Officer
            Secretary
<PAGE>
 
                             WHITTAKER CORPORATION

                            CAFETERIA BENEFITS PLAN

                                   SCHEDULE A


                  Credits for waiving Medical/Vision Coverage:
                  --------------------------------------------


                          Single - $25.00 per paycheck

                          Family - $50.00 per paycheck



                      Credits for waiving Dental Coverage:
                      ------------------------------------


                          Single - $6.00 per paycheck

                          Family - $6.00 per paycheck