Document:

<PAGE>

                                                                    Exhibit 10.3

                                                      Five-Year Credit Agreement

                                 FIRST AMENDMENT

     FIRST AMENDMENT, dated as of July __, 2002 (this "Amendment"), to the
FIVE-YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT, dated as of
November 28, 2001 (the "Credit Agreement"), among RAYTHEON COMPANY, a Delaware
corporation (the "Borrower"), RAYTHEON TECHNICAL SERVICES COMPANY, a Delaware
corporation, and RAYTHEON AIRCRAFT COMPANY, a Kansas corporation, each as a
Guarantor (in such capacity, each a "Guarantor" and, collectively, the
"Guarantors"), the several Lenders from time to time parties thereto (the
"Lenders"), J.P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES LLC, as
joint lead arrangers and joint bookrunners (in such capacity, the "Arrangers"),
BANK OF AMERICA, N.A., as syndication agent (in such capacity, the "Syndication
Agent"), CITICORP USA, INC., CREDIT SUISSE FIRST BOSTON and MIZUHO FINANCIAL
GROUP, as documentation agents (in such capacity, each a "Documentation Agent"
and, collectively, the "Documentation Agents"), and JPMORGAN CHASE BANK, as
administrative agent (in such capacity, the "Administrative Agent" and,
collectively with the Syndication Agent and the Documentation Agents, the
"Agents") for the Lenders.

                              W I T N E S S E T H:

     WHEREAS, pursuant to the Credit Agreement, the Borrower has requested that
the Lenders, and the Lenders have agreed, to extend credit to the Borrower
subject to the terms and conditions contained therein;

     WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement in certain ways; and

     WHEREAS, the Lenders and the Borrower desire to amend the Credit Agreement
in the manner specified herein.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

         1. Defined Terms. Terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

         2. Amendments to Section 1.01 of the Credit Agreement (Defined Terms).
The definition of "Consolidated Net Income" appearing in Section 1.01 of the
Credit Agreement is hereby amended by (i) deleting the word "and" appearing
before the third clause thereof and by inserting, in lieu thereof, a comma and
(ii) by adding to the end thereof, before the period mark, the following:

     "(iv) for the fiscal quarter of Raytheon and its consolidated Subsidiaries
     ending June 30, 2002, such Consolidated Net Income shall be increased by an
     amount not to exceed $450,000,000 for such fiscal quarter, representing
     one-time charges to the extent recorded

<PAGE>

     in connection with the discontinued operations of Raytheon Engineers and
     Constructors with respect to such fiscal quarter".

          3. Waiver. The Required Lenders hereby waive compliance with Section
7.05(b) and any related Event of Default pursuant to paragraph (d) of Article
VIII of the Credit Agreement through the date hereof solely to the extent that
the failure to comply with such provisions is remedied by the amendment
contained in Section 2 hereof with respect to the definition of "Consolidated
Net Income".

          4. Affirmation of Guarantee. Each Guarantor hereby consents to the
foregoing amendment to the Credit Agreement set forth herein and reaffirms its
obligations under the Guarantee provided by such Guarantor pursuant to Article X
of the Credit Agreement.

          5. Conditions to Effectiveness. This Amendment shall become effective
on the date (the "Amendment Effective Date") on which (i) the Borrower and the
Required Lenders shall have executed and delivered this Amendment to the
Administrative Agent and (ii) the Administrative Agent shall have received, for
the account of each Required Lender executing this Amendment, an amendment fee
equal to 0.05% of such Lender's Commitment.

          6. Representation and Warranties. To induce the Lenders to enter into
this Amendment, the Borrower hereby represents and warrants to the Lenders as
of the Amendment Effective Date that:

             (a) Reaffirmation. As of the date hereof and after giving effect to
     this Amendment, the representations and warranties set forth in Article IV
     of the Credit Agreement are true and correct in all material respects; and

             (b) No Default. After giving effect to this Amendment, no Default
     or Event of Default shall have occurred and be continuing.

          7. Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all its respective out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Amendment and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

          8. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.

          9. Severability; Headings. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or

<PAGE>

render unenforceable such provision in any other jurisdiction. The section and
subsection headings used in this Amendment are for convenience of reference only
and are not to affect the construction hereof or to be taken into consideration
in the interpretation hereof.

          10. Continuing Effect of Other Documents. This Amendment shall not
constitute an amendment or waiver of any other provision of the Credit Agreement
not expressly referred to herein and shall not be construed as a waiver or
consent to any further or future action on the part of the Borrower that would
require a waiver or consent of the Lenders or the Administrative Agent. Except
as expressly amended, modified and supplemented hereby, the provisions of the
Credit Agreement are and shall remain in full force and effect.

          11. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.

                                  RAYTHEON COMPANY,
                                  as the Borrower

                                  By:______________________________
                                  Name:
                                  Title:

                                  RAYTHEON TECHNICAL SERVICES COMPANY,
                                  as a Guarantor

                                  By:______________________________
                                  Name:
                                  Title:

                                  RAYTHEON AIRCRAFT COMPANY,
                                  as a Guarantor

                                  By:______________________________
                                  Name:
                                  Title:

                                  JPMORGAN CHASE BANK,
                                  as Administrative Agent and as a Lender

                                  By:______________________________
                                  Name:
                                  Title:

<PAGE>

                                        BANK OF AMERICA, NATIONAL ASSOCIATION
                                        as a Lender

                                        By:______________________________
                                        Name:
                                        Title:

<PAGE>

                                            CITICORP USA, INC.,
                                            as a Lender

                                            By:______________________________
                                            Name:
                                            Title:

<PAGE>

                                           CREDIT SUISSE FIRST BOSTON,
                                           as a Lender

                                           By:______________________________
                                           Name:
                                           Title:

                                           By:______________________________
                                           Name:
                                           Title:

<PAGE>

                                          THE INDUSTRIAL BANK OF JAPAN, LIMITED,
                                          ON BEHALF OF, MIZUHO FINANCIAL GROUP,
                                          as a Lender

                                          By:______________________________
                                          Name:
                                          Title:

<PAGE>

                                            SOCIETE GENERALE- CHICAGO BRANCH,
                                            as a Lender

                                            By:______________________________
                                            Name:
                                            Title:

<PAGE>

                                             THE BANK OF NOVA SCOTIA,
                                             as a Lender

                                             By:______________________________
                                             Name:
                                             Title:

<PAGE>

                                             BARCLAYS BANK PLC,
                                             as a Lender

                                             By:______________________________
                                             Name:
                                             Title:

<PAGE>

                                         BNP PARIBAS,
                                         as a Lender

                                         By:______________________________
                                         Name:
                                         Title:

<PAGE>

                                           COMMERZBANK AG, NEW YORK BRANCH,
                                           as a Lender

                                           By:______________________________
                                           Name:
                                           Title:

                                           By:______________________________
                                           Name:
                                           Title:

<PAGE>

                                             FLEET NATIONAL BANK,
                                             as a Lender

                                             By:______________________________
                                             Name:
                                             Title:

<PAGE>

                                               WACHOVIA BANK, N.A.,
                                               as a Lender

                                               By:______________________________
                                               Name:
                                               Title:

<PAGE>

                                 LEHMAN BROTHERS COMMERCIAL PAPER INC.,
                                 as a Lender

                                 By:______________________________
                                 Name:
                                 Title:

<PAGE>

                                              BANK OF TOKYO - MITSUBISHI, LTD.,
                                              as a Lender

                                              By:______________________________
                                              Name:
                                              Title:

<PAGE>

                                            BANK ONE, NA (MAIN OFFICE CHICAGO),
                                            as a Lender

                                            By:______________________________
                                            Name:
                                            Title

<PAGE>

                                     BAYERISCHE LANDESBANK GIROZENTRALE,
                                     CAYMAN ISLANDS BRANCH,
                                     as a Lender

                                     By:______________________________
                                     Name:
                                     Title:

                                     By:______________________________
                                     Name:
                                     Title:

<PAGE>

                                          CREDIT LYONNAIS NEW YORK BRANCH,
                                          as a Lender

                                          By:______________________________
                                          Name:
                                          Title:

<PAGE>

                                        MELLON BANK, N.A.,
                                        as a Lender

                                        By:______________________________
                                        Name:
                                        Title:

<PAGE>

                                        UBS AG, STAMFORD BRANCH,
                                        as a Lender

                                        By:______________________________
                                        Name:
                                        Title:

<PAGE>

                                        WESTDEUTSCHE LANDESBANK
                                        GIROZENTRALE, NEW YORK BRANCH,
                                        as a Lender

                                        By:______________________________
                                        Name:
                                        Title:

                                        By:______________________________
                                        Name:
                                        Title:

<PAGE>

                                        THE BANK OF NEW YORK,
                                        as a Lender

                                        By:______________________________
                                        Name:
                                        Title:

<PAGE>

                                        BANCA NAZIONALE DEL LAVORO S.p.A.,
                                        New York Branch,
                                        as a Lender

                                        By:____________________________
                                        Name:
                                        Title:

                                        By:____________________________
                                        Name:
                                        Title:

<PAGE>

                                        MORGAN STANLEY BANK, as a Lender

                                        By:___________________________
                                        Name:
                                        Title:<PAGE>

                                                                    Exhibit 10.4

                      RAYTHEON SAVINGS AND INVESTMENT PLAN

                               As Amended and Restated Effective January 1, 2000
                                                     (Adopted February 26, 2002)

<PAGE>

                      RAYTHEON SAVINGS AND INVESTMENT PLAN

                                Table of Contents
<TABLE>
<CAPTION>

                                                                            Page
                                                                            ----

                                    ARTICLE I
                              Adoption of the Plan
<S>      <C>                                                                <C>
1.1      Amendment and Restatement ......................................     1
1.2      Trust ..........................................................     1
1.3      Effective Date .................................................     1
1.4      Adoption of Plan ...............................................     2
1.5      Withdrawal of Adopting Employer                                      2

                                   ARTICLE II
                                   Definitions

2.1      Account ........................................................     3
2.2      Acquisition Loan ...............................................     3
2.3      Administrator ..................................................     3
2.4      Adopting Employers .............................................     3
2.5      Affiliate ......................................................     3
2.6      Authorized Leave of Absence ....................................     4
2.7      Beneficiary ....................................................     4
2.8      Board of Directors .............................................     4
2.9      Code ...........................................................     4
2.10     Common Stock ...................................................     4
2.11     Company ........................................................     4
2.12     Compensation ...................................................     4
2.13     Current Market Value ...........................................     6
2.14     Disability .....................................................     6
2.15     Effective Date .................................................     6
2.16     Elective Deferral ..............................................     6
2.17     Elective Deferral Account ......................................     6
2.18     Eligible Employee ..............................................     6
2.19     Employee .......................................................     7
2.20     Employee After-Tax Contributions ...............................     7
2.21     Employee After-Tax Contribution Account ........................     7
2.22     Employer .......................................................     7
2.23     Employer Contributions .........................................     7
2.24     Employer Contribution Account ..................................     7
2.25     Employment Commencement Date ...................................     7
2.26     ERISA ..........................................................     7
2.27     ESOP Contributions .............................................     7
2.28     ESOP Contribution Account ......................................     7
2.29     Fiduciary ......................................................     7
2.30     Financed Shares ................................................     8
2.31     Highly Compensated Employee ....................................     8
2.32     Hour of Service ................................................     8
</TABLE>

<PAGE>

                                      -ii-

<TABLE>
<S>      <C>                                                                           <C>
2.33     Layoff ................................................................        9
2.34     Leased Employee .......................................................        9
2.35     Matching Contributions ................................................        9
2.36     Matching Contribution Account .........................................        9
2.37     Normal Retirement Age .................................................        9
2.38     Participant ...........................................................        9
2.39     Pay Period ............................................................       10
2.40     Period of Participation ...............................................       10
2.41     Period of Service .....................................................       10
2.42     Period of Severance ...................................................       10
2.43     Plan ..................................................................       10
2.44     Plan Year .............................................................       10
2.45     Qualified Military Service ............................................       10
2.46     Qualified Nonelective Contributions ...................................       10
2.47     Qualified Nonelective Contribution Account ............................       11
2.48     Recordkeeper ..........................................................       11
2.49     Reemployment Commencement Date ........................................       11
2.50     Retirement ............................................................       11
2.51     Rollover Contributions ................................................       11
2.52     Rollover Contribution Account .........................................       11
2.53     Severance From Service ................................................       11
2.54     Severance From Service Date ...........................................       11
2.55     Surviving Spouse ......................................................       12
2.56     Trade Day .............................................................       12
2.57     Trust .................................................................       12
2.58     Trustee ...............................................................       12
2.59     Trust Fund ............................................................       12
2.60     United States-Based Payroll ...........................................       12
2.61     Valuation Date ........................................................       12

                                   ARTICLE III
                                   Eligibility

3.1      Eligibility Requirements ..............................................       13
3.2      Procedure for Joining the Plan ........................................       13
3.3      Transfer Between Adopting Employers to Position Covered by Plan .......       13
3.4      Transfer to Position Not Covered by Plan ..............................       13
3.5      Transfer to Position Covered by Plan ..................................       14
3.6      Special Rules Relating to Qualified Military Service ..................       14

                                   ARTICLE IV
                                  Contributions

4.1      Elective Deferrals ....................................................       16
4.2      Employee After-Tax Contributions ......................................       17
4.3      Qualified Nonelective Contributions ...................................       18
4.4      Employer Contributions ................................................       18
4.5      Matching Contributions ................................................       18
4.6      ESOP Contributions ....................................................       19
</TABLE>

<PAGE>

                                      -iii-
<TABLE>
<S>      <C>                                                                                     <C>
4.7      Rollover Contributions .............................................................    19
4.8      Direct Transfers ...................................................................    20
4.9      Refund of Contributions to the Adopting Employers ..................................    21
4.10     Payment ............................................................................    21
4.11     Limits for Highly Compensated Employees ............................................    22
4.12     Correction of Excess Contributions .................................................    25
4.13     Correction of Excess Deferrals .....................................................    28
4.14     Correction of Excess Aggregate Contributions .......................................    29
4.15     Correction of Multiple Use .........................................................    32

                                    ARTICLE V
                             Investment of Accounts

5.1      Election of Investment Funds .......................................................    33
5.2      Change in Investment Allocation of Future Deferrals ................................    37
5.3      Transfer of Account Balances Between Investment Funds ..............................    37
5.4      Inability to Complete Investment Changes ...........................................    37
5.5      Ownership Status of Funds ..........................................................    37
5.6      Voting Rights and Tender or Exchange Offers ........................................    38
5.7      Allocation of Earnings .............................................................    39

                                   ARTICLE VI
                                     Vesting

6.1      Elective Deferral, Employee After-Tax Contribution, Rollover Contribution,
         Qualified Nonelective Contribution, Employer Contribution and
         ESOP Contribution Accounts .........................................................    41
6.2      Matching Contribution Account ......................................................    41
6.3      Forfeitures ........................................................................    42
6.4      Break in Service Rules .............................................................    42

                                   ARTICLE VII
                             In-Service Withdrawals

7.1      Elective Deferrals and Qualified Nonelective Contributions .........................    44
7.2      Employee After-Tax Contributions ...................................................    45
7.3      Matching Contributions and Employer Contributions ..................................    45
7.4      Rollover Contributions .............................................................    45
7.5      ESOP Contributions .................................................................    46
7.6      General Terms and Conditions .......................................................    46

                                  ARTICLE VIII
                            Distribution of Benefits

8.1      General ............................................................................    47
8.2      Commencement of Benefits ...........................................................    47
8.3      Form of Distribution ...............................................................    49
8.4      Determination of Amount of Distribution ............................................    49
</TABLE>

<PAGE>

                                      -iv-

<TABLE>
<S>      <C>                                                                        <C>
8.5      Direct Rollovers ......................................................    49
8.6      Notice and Payment Elections ..........................................    51
8.7      Qualified Domestic Relations Orders ...................................    52
8.8      Designation of Beneficiary ............................................    54
8.9      Lost Participant or Beneficiary .......................................    55
8.10     Payments to Incompetents ..............................................    56
8.11     Offsets ...............................................................    56
8.12     Income Tax Withholding ................................................    56
8.13     Common Stock Dividend Distributions ...................................    56
8.14     Put Option and Restrictions on Common Stock ...........................    56

                                   ARTICLE IX
                                      Loans

9.1      Availability of Loans .................................................    58
9.2      Minimum Amount of Loan ................................................    58
9.3      Maximum Amount of Loan ................................................    58
9.4      Effective Date of Loans ...............................................    58
9.5      Repayment Schedule ....................................................    58
9.6      Limit on Number of Loans ..............................................    59
9.7      Interest Rate .........................................................    59
9.8      Effect Upon Participant's Account .....................................    59
9.9      Effect of Severance From Service and Nonpayment .......................    60

                                    ARTICLE X
                      Contribution and Benefit Limitations

10.1     Contribution Limits ...................................................    61
10.2     Annual Adjustments to Limits ..........................................    61
10.3     Excess Amounts ........................................................    61
10.4     Definitions ...........................................................    62

                                   ARTICLE XI
                                 Top-Heavy Rules

11.1     General ...............................................................    63
11.2     Vesting ...............................................................    63
11.3     Minimum Contribution ..................................................    63
11.4     Definitions ...........................................................    64
11.5     Special Rules .........................................................    66
11.6     Adjustment of Limitations .............................................    68

                                   ARTICLE XII
                                 The Trust Fund

12.1     Trust .................................................................    69
12.2     Investment of Accounts ................................................    69
12.3     Expenses ..............................................................    69
</TABLE>

<PAGE>
                                     - v -
<TABLE>
      <C>                                                                    <C>
12.4     Acquisition Loans ...................................................   69
12.5     Sale of Common Stock ................................................   69

                                  ARTICLE XIII

                           Administration of the Plan

13.1     General Administration ..............................................  71
13.2     Responsibilities of the Administrator ...............................  71
13.3     Liability for Acts of Other Fiduciaries .............................  72
13.4     Employment by Fiduciaries ...........................................  72
13.5     Recordkeeping .......................................................  72
13.6     Claims Review Procedure .............................................  73
13.7     Indemnification of Directors and Employees ..........................  74
13.8     Immunity From Liability .............................................  74

                                   ARTICLE XIV

                        Amendment or Termination of Plan

14.1     Right to Amend or Terminate Plan ....................................  75
14.2     Amendment to Vesting Schedule .......................................  75
14.3     Maintenance of Plan .................................................  76
14.4     Termination of Plan and Trust .......................................  76
14.5     Distribution on Termination .........................................  76

                                   ARTICLE XV

                              Additional Provisions

15.1     Effect of Merger, Consolidation or Transfer .........................  78
15.2     No Assignment .......................................................  78
15.3     Limitation of Rights of Employees ...................................  78
15.4     Construction ........................................................  79
15.5     Company Determinations ..............................................  79
15.6     Continued Qualification .............................................  79
15.7     Governing Law .......................................................  79
</TABLE>

<PAGE>

                      RAYTHEON SAVINGS AND INVESTMENT PLAN

                                    ARTICLE I

                              Adoption of the Plan

     1.1 Amendment and Restatement.

     (a) Raytheon Company, a corporation organized under the laws of the state
of Delaware, originally established the Raytheon Savings and Investment Plan
(the "Plan") effective January 1, 1984. Raytheon Company most recently amended
and restated the Plan in its entirety effective January 1, 2000, and this
amendment and restatement is also generally effective January 1, 2000. From
January 1, 2000 until December 31, 2001, the amended and restated Plan is a
stock bonus plan that constitutes an employee stock ownership plan within the
meaning of section 4975(e)(7) of the Code and includes a cash or deferred
arrangement under section 401(k) of the Code. On and after January 1, 2002, the
portion of the Plan that is invested in Common Stock and Raytheon Company Class
A common stock is a stock bonus plan that constitutes an employee stock
ownership plan within the meaning of section 4975(e)(7) of the Code and includes
a cash or deferred arrangement under section 401(k) of the Code, and the
remaining portion of the Plan is a profit sharing plan that includes a cash or
deferred arrangement under section 401(k) of the Code.

     (b) In accordance with sections 4.8(a) and 15.1 of the Plan, effective
January 1, 2000, the Raytheon Employee Savings and Investment Plan shall merge
into and become part of the Plan. The Raytheon Employee Savings and Investment
Plan shall cease to exist as a separate plan after December 31, 1999.

     (c) The Plan is intended to comply with all of the applicable requirements
under sections 401(a), 401(k) and, to the extent the Plan is an employee stock
ownership plan, 4975(e)(7) of the Code, including but not limited to the
requirement that the Plan is designed to invest primarily in qualifying employer
securities, and the terms of the Plan shall be interpreted consistent therewith.

     1.2 Trust. The Trust shall be the sole source of benefits under the Plan
and the Adopting Employers or any Affiliate shall not have any liability for the
adequacy of the benefits provided under the Plan.

     1.3 Effective Date. The amended and restated Plan shall be effective as of
January 1, 2000, or such other dates as may be specifically provided herein or
as otherwise required by law for the Plan to satisfy the requirements of section
401(a) of the Code.

<PAGE>

                                      -2-

     1.4  Adoption of Plan. With the prior approval of the Senior Vice President
of Human Resources of the Company or his or her delegate, or other officer to
whom authority to approve participation by an entity is delegated by the Board
of Directors, the Plan and Trust may be adopted by any corporation or other
entity (hereinafter referred to as an Adopting Employer). Such adoption shall be
made by the Adopting Employer taking the actions designated by the Administrator
as appropriate to the proper adoption and operation of the Plan and Trust. In
the event of the adoption of the Plan and Trust by an Adopting Employer, the
Plan and Trust shall be interpreted in a manner consistent with such adoption.
The Adopting Employers shall be listed in Exhibit A attached to this Plan.

     1.5  Withdrawal of Adopting Employer.

          (a) An Adopting Employer's participation in this Plan may be
terminated, voluntarily or involuntarily, at any time, as provided in this
section.

          (b) An Adopting Employer shall withdraw from the Plan and Trust if the
Plan and Trust, with respect to that Adopting Employer, fail to qualify under
sections 401(a) and 501(a) of the Code (or, in the opinion of the Administrator,
they may fail to so qualify) and the continued sponsorship of that Adopting
Employer may jeopardize the status with respect to the Company or the remaining
Adopting Employers, of the Plan and Trust under sections 401(a) and 501(a) of
the Code. The Adopting Employer shall receive at least thirty (30) days prior
written notice of a withdrawal under this subsection, unless a shorter period is
agreed to.

          (c) An Adopting Employer may voluntarily withdraw from the Plan and
Trust for any reason. Such withdrawal requires at least thirty (30) days written
notice to the Administrator and the Trustee, unless a shorter period is agreed
to.

          (d) Upon withdrawal, the Trustee shall segregate the assets
attributable to Employees of the withdrawn Adopting Employer, the amount thereof
to be determined by the Administrator and the Trustee. The segregated assets
shall be held, paid to another trust, distributed or otherwise disposed of as is
appropriate under the circumstances; provided, however, that any transfer shall
be for the exclusive benefit of Participants and their Beneficiaries. A
withdrawal of an Adopting Employer from the Plan is not necessarily a
termination under ARTICLE XIV. If the withdrawal is a termination, then the
provisions of ARTICLE XIV shall also be applicable.

<PAGE>

                                      -3-

                                   ARTICLE II

                                   Definitions

     The following terms have the meaning specified below unless the context
indicates otherwise:

     2.1  Account. The entire interest of a Participant in the Trust Fund. A
Participant's Account shall consist of the following subaccounts: an Elective
Deferral Account and, where applicable, an Employee After-Tax Contribution
Account, a Matching Contribution Account, an ESOP Contribution Account, an
Employer Contribution Account, a Rollover Contribution Account and a Qualified
Nonelective Contribution Account. The Administrator may set up such additional
subaccounts as it deems necessary for the proper administration of the Plan.

     2.2  Acquisition Loan. A loan or other extension of credit used by the
Trustee to finance the acquisition of Common Stock, which loan may constitute an
extension of credit to the Trust from a party in interest (as defined in ERISA).

     2.3  Administrator. The person, persons, corporation, committee, group or
organization designated to be the Administrator of the Plan and to perform the
duties of the Administrator. Until and unless otherwise designated, the
Administrator shall be the Company.

     2.4  Adopting Employers. Any corporation or other entity that elects to
participate in the Plan on account of some or all of its Employees, provided
that participation in the Plan by such entity is approved by the Senior Vice
President of Human Resources of the Company or his or her delegate, or other
officer to whom authority to approve participation by an entity is delegated by
the Board of Directors. The Adopting Employers, and if applicable, the
divisions, operations or similar cohesive groups of the Adopting Employers that
participate in the Plan shall be listed in Exhibit A to this Plan. If an
adopting entity does not participate in the Plan with respect to all of its
Eligible Employees, the term "Adopting Employer" shall include only those
divisions, operations or similar cohesive groups of such entity that participate
in the Plan.

     2.5  Affiliate. A trade or business that, together with an Adopting
Employer is a member of (i) a controlled group of corporations within the
meaning of section 414(b) of the Code; (ii) a group of trades or businesses
(whether or not incorporated) under common control as defined in section 414(c)
of the Code, or (iii) an affiliated service group as defined in section 414(m)
of the Code, or which is an entity otherwise required to be aggregated with the
Adopting Employer pursuant to section 414(o) of the Code. For purposes of
ARTICLE X, the determination of controlled groups of corporations and trades or
businesses under common control shall be made after taking into account the
modification required under section 415(h) of

<PAGE>

                                      -4-

the Code. All such entities, whether or not incorporated, shall be treated as a
single employer to the extent required by the Code.

     2.6  Authorized Leave of Absence. An absence approved by an Adopting
Employer on a uniform and nondiscriminatory basis not exceeding one (1) year for
any of the following reasons: illness of an Employee or a relative, the death of
a relative, education of the Employee, or personal or family business of an
extraordinary nature, provided in each case that the Employee returns to the
service of the Adopting Employer within the time period specified by the
Adopting Employer.

     2.7  Beneficiary. The person or persons (including a trust or trusts) who
are entitled to receive benefits from a deceased Participant's Account after
such Participant's death (whether or not such person or persons are expressly so
designated by the Participant).

     2.8  Board of Directors. The Board of Directors of Raytheon Company.

     2.9  Code. The Internal Revenue Code of 1986, as amended.

     2.10 Common Stock. Raytheon Company Class B common stock for the period
ending on May 14, 2001, as of which date Class A common stock and Class B common
stock were merged; thereafter, Raytheon Company common stock. On and after May
14, 2001, all references in this Plan to Raytheon Company Class A common stock
shall no longer be applicable.

     2.11 Company. Raytheon Company.

     2.12 Compensation.

          (a) (1) Except as otherwise provided herein and in Exhibit A, the
total wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer to the extent that the amounts are includible in gross income,
including, but not limited to (A) commissions paid salesmen, (B) compensation
for services on the basis of a percentage of profits, (C) commissions on
insurance premiums, (D) tips, (E) bonuses, (F) fringe benefits, (G) severance
payments, (H) reimbursements or other expense allowances under a nonaccountable
plan (as described in Treas. Reg. section 1.62-2(c)), (I) amounts described in
sections 104(a)(3), 105(h) of the Code, but only to the extent that these
amounts are includible in the gross income of the Employee, (J) the value of a
nonqualified stock option granted to an Employee by the Employer, but only to
the extent that the value of the option is includible in the gross income of the
Employee for the taxable year in which granted, and (K) the amount includible in
the gross income of an Employee upon making the election described in section
83(b) of the Code.

<PAGE>

                                      -5-

               (2)  Notwithstanding the foregoing, Compensation shall not
include: (A) Employer contributions to a plan of deferred compensation which are
not includible in the Employee's gross income for the taxable year in which
contributed, or any distributions from a plan of deferred compensation
(regardless of whether such amounts are includible in the gross income of the
Employee when distributed); (B) amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or becomes no longer subject to a
substantial risk of forfeiture; (C) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and (D)
other amounts which received special tax benefits, such as premiums for
group-term life insurance to the extent that the premiums are not includible in
the gross income of the Employee.

               (3)  To the extent not otherwise excluded by subsection (a)(2),
Compensation also shall not include: (A) reimbursements or other expense
allowances, (B) fringe benefits (cash and noncash), (C) moving expenses, (D)
deferred compensation, and (E) welfare benefits.

               (4)  In all cases, however, notwithstanding any exclusions above,
Compensation shall include any amount which would otherwise be deemed
Compensation under this subsection 2.12(a) but for the fact that it is deferred
pursuant to a salary reduction agreement under this Plan or under any plan
described in section 401(k) or 125 of the Code.

          (b)  For Plan Years beginning before January 1, 2002, the Compensation
of each Participant for any year shall not exceed one hundred fifty thousand
dollars ($150,000), as adjusted for increases in the cost-of-living in
accordance with section 401(a)(17)(B) of the Code. For Plan Years beginning
after December 31, 2001, the Compensation of each Participant for any year shall
not exceed two hundred thousand dollars ($200,000), as adjusted for increases in
the cost-of-living in accordance with section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year applies to the
Compensation for the Plan Year that begins in such calendar year.

          (c)  Unless otherwise indicated herein, Compensation shall be
determined only on the basis of amounts paid during the Plan Year, including any
Plan Year with a duration of fewer than twelve (12) months.

          (d)  The Compensation of a person who becomes a Participant during the
Plan Year shall only include amounts paid after the date on which such person
was admitted as a Participant.

<PAGE>

                                      -6-

     2.13 Current Market Value. The closing price of the Common Stock on the New
York Stock Exchange on the Trade Day immediately preceding the Trade Day on
which the Common Stock is allocated to the Participants' Accounts in accordance
with the terms of the Plan.

     2.14 Disability. A Participant who is totally and permanently disabled by
bodily injury or disease so as to be prevented from engaging in any occupation
for compensation or profit. The determination of Disability shall be made by the
Administrator with the aid of competent medical advice. It shall be based on
such evidence as the Administrator deems necessary to establish Disability or
the continuation thereof.

     2.15 Effective Date. The effective date of this amendment and restatement
of the Plan shall be January 1, 2000, or such other dates as may be specifically
provided in section 1.3 or as otherwise required by law for the Plan to satisfy
the requirements of section 401(a) of the Code.

     2.16 Elective Deferral. A voluntary reduction of a Participant's
Compensation in accordance with section 4.1 hereof that qualifies for treatment
under section 402(e)(3) of the Code. A Participant's election to make Elective
Deferrals may be made only with respect to an amount that the Participant could
otherwise elect to receive in cash and that is not currently available to the
Participant.

     2.17 Elective Deferral Account. That portion of a Participant's Account
which is attributable to Elective Deferrals, adjusted for withdrawals and
distributions, and the earnings and losses attributable thereto.

     2.18 Eligible Employee. A person who is an Employee of an Adopting Employer
who:

          (a) is on a United States-Based Payroll;

          (b) is not employed in a position or classification within a
bargaining unit which is covered by a collective bargaining agreement with
respect to which retirement benefits were the subject of good faith bargaining
(unless such agreement provides for coverage hereunder of Employees of such
unit);

          (c) is not assigned on the books and records of the Employer to any
division, operation or similar cohesive group of an Adopting Employer that is
excluded from participation in the Plan by the Senior Vice President of Human
Resources of the Company or his or her delegate, or other officer to whom such
authority is delegated by the Board of Directors;

          (d) is not eligible to participate in the Raytheon Savings and
Investment Plan for Puerto Rico Based Employees; and

<PAGE>

                                      -7-

          (e) is not a Leased Employee or any other person who performs services
for an Adopting Employer other than as an Employee.

     2.19 Employee. Except to the extent otherwise provided herein, any person
employed by an Employer who is expressly so designated as an employee on the
books and records of the Employer and who is treated as such by the Employer for
federal employment tax purposes. Any person who, after the close of a Plan Year,
is retroactively treated by the Employer or any other party as an employee for
such prior Plan Year shall not, for purposes of the Plan, be considered an
Employee for such prior Plan Year unless expressly so treated as such by the
Employer.

     2.20 Employee After-Tax Contributions. Voluntary contributions made by
Participants on an after-tax basis in accordance with section 4.2 of the Plan.

     2.21 Employee After-Tax Contribution Account. That portion of a
Participant's Account which is attributable to Employee After-Tax Contributions,
adjustments for withdrawals and distributions, and the earnings and losses
attributable thereto.

     2.22 Employer. An Adopting Employer and any Affiliate thereof (whether or
not such Affiliate participates in the Plan).

     2.23 Employer Contributions. Any contribution by the Adopting Employers to
the Trust pursuant to section 4.4.

     2.24 Employer Contribution Account. That portion of a Participant's Account
which is attributable to Employer Contributions received pursuant to section
4.4, adjusted for withdrawals and distributions, and the earnings and losses
attributable thereto.

     2.25 Employment Commencement Date. The date on which an individual first
performs an Hour of Service with the Employer.

     2.26 ERISA. The Employee Retirement Income Security Act of 1974, as
amended.

     2.27 ESOP Contributions. Any contribution by the Adopting Employers to the
Trust pursuant to section 4.6.

     2.28 ESOP Contribution Account. That portion of a Participant's Account
which is attributable to ESOP Contributions received pursuant to section 4.6,
adjusted for withdrawals and distributions, and the earnings and losses
attributable thereto.

     2.29 Fiduciary. Any person who exercises any discretionary authority or
discretionary control over the management of the Plan, or exercises any
authority or control respecting management or disposition of Plan assets; who
renders investment advice for a fee or other compensation, direct or indirect,
as to assets held under the Plan, or has any authority

<PAGE>

                                      -8-

or discretionary responsibility in the administration of the Plan. This
definition shall be interpreted in accordance with section 3(21) of ERISA.

     2.30 Financed Shares. Shares of Common Stock acquired by the Trust with the
proceeds of an Acquisition Loan.

     2.31 Highly Compensated Employee.

          (a)  Any Employee who:

               (1) is a five percent (5%) owner at any time during the Plan Year
or the preceding Plan Year; or

               (2) for the preceding Plan Year received Compensation in excess
of the amount specified in section 414(q)(1)(B)(i) of the Code.

          (b)  A former Employee will be treated as a Highly Compensated
Employee if the former Employee was a Highly Compensated Employee at the time of
his or her separation from service or the former Employee was a Highly
Compensated Employee at any time after attaining age fifty-five (55).

          (c)  The dollar amount incorporated under subsection (a)(2) shall be
adjusted as provided in section 414(q)(1) of the Code.

          (d)  This section shall be interpreted in a manner consistent with
section 414(q) of the Code and the regulations thereunder and shall be
interpreted to permit any elections permitted by such regulations to be made.

     2.32 Hour of Service.

          (a)  Any hour for which any person is directly or indirectly paid (or
entitled to payment) by the Employer for the performance of duties as an
Employee, as determined from the appropriate records of the Employer.

          (b)  In computing Hours of Service, a person shall also be credited
with Hours of Service based on the person's previous customary service with the
Employer (not exceeding either eight (8) hours per day or forty (40) hours per
week), for the following periods:

               (1) periods (limited to a maximum of five hundred one (501) hours
for any single, continuous period) for which the person is directly or
indirectly paid for reasons other than the performance of duties, such as
vacation, holiday, sickness, disability, layoff, jury duty or military duty;

               (2) periods for which any federal law requires that credit for
service be given; and

               (3) periods for which back pay (irrespective of mitigation of
damages) is either awarded or agreed to by the Employer.

<PAGE>

                                      -9-

          (c)  Hours of Service shall also include each hour for which an
Employee is entitled to credit under subsection (a) as a result of employment
with:

               (1) a predecessor company substantially all the assets of which
have been acquired by the Company, provided that where only a portion of the
operations of a company has been acquired, only service with said acquired
portion prior to the acquisition will be included and that the Employee was
employed by said predecessor company at the time of acquisition; or

               (2) a division, operation or similar cohesive group of the
Employer excluded from participation in the Plan.

          (d)  The provisions of subsection (b) shall be further limited to
prevent duplication by only permitting a person to receive credit for one (1)
Hour of Service for any given hour.

          (e)  Hours of Service shall be computed and credited in accordance
with the Department of Labor regulations under section 2530.200b.

     2.33 Layoff. An involuntary interruption of service due to reduction of
work force with the possibility of recall to employment when conditions warrant.

     2.34 Leased Employee. Any person (other than an Employee) who, pursuant to
an agreement between the Employer and any other person, has performed services
for the Employer (or any related person as provided in section 414(n)(6) of the
Code) on a substantially full-time basis for a period of at least one (1) year
and such services are performed under primary direction or control of the
Employer. Leased Employees are not eligible to participate in the Plan.

     2.35 Matching Contributions. Contributions made to the Trust in accordance
with section 4.5 hereof.

     2.36 Matching Contribution Account. That portion of a Participant's Account
which is attributable to Matching Contributions received pursuant to section
4.5, adjusted for withdrawals and distributions, and the earnings and losses
attributable thereto.

     2.37 Normal Retirement Age. The Participant's sixty-fifth (65th) birthday.

     2.38 Participant. An individual who is enrolled in the Plan pursuant to
ARTICLE III and has not received a distribution of all of the funds credited to
his or her Account (or had such funds fully forfeited). In the case of an
Eligible Employee who makes a Rollover Contribution to the Plan under section
4.7(a)(3) prior to enrollment under ARTICLE III, such Eligible Employee shall,
until he or she enrolls under ARTICLE III, be considered a Participant for the
limited

<PAGE>

                                      -10-

purposes of maintaining and receiving his or her Rollover Contribution Account
under the terms of the Plan.

     2.39 Pay Period. A period scheduled by an Adopting Employer for payment of
wages or salaries.

     2.40 Period of Participation. That portion of a Period of Service during
which an Eligible Employee was a Participant and had an Elective Deferral
Account in the Plan or another plan merged into this Plan and identified in
section 1.1(b) (with no more than five (5) years of participation credited with
respect to such merged plan).

     2.41 Period of Service. The period of time beginning on the Employee's
Employment Commencement Date or Reemployment Commencement Date, whichever is
applicable, and ending on the Employee's Severance from Service Date. For this
purpose, a "former AlliedSignal employee" shall receive credit for his or her
period of service with AlliedSignal, Inc. and its affiliates. A former
AlliedSignal employee is an Employee who (i) immediately prior to September 11,
1998 was a salaried employee of the Communication Systems division of
AlliedSignal, Inc. (Towson, Maryland location), and (ii) on such date became an
Employee in connection with the Company's acquisition of AlliedSignal's
Communication Systems division.

     2.42 Period of Severance. The period of time beginning on the Employee's
Severance from Service Date and ending on the Employee's Reemployment
Commencement Date.

     2.43 Plan. The Raytheon Savings and Investment Plan as amended from time to
time.

     2.44 Plan Year. The annual twelve- (12) month period beginning on January 1
of each year and ending on December 31 of each year.

     2.45 Qualified Military Service. Any service in the uniformed services by
any Eligible Employee if such Eligible Employee is entitled to reemployment
rights under Chapter 43 of title 38, United States Code, provided, the Employee
returns to employment, with the Adopting Employer within the applicable time
limits prescribed in Chapter 43 of title 38, United States Code.

     2.46 Qualified Nonelective Contributions. Any contributions by the Adopting
Employers to the Trust pursuant to section 4.3. Qualified Nonelective
Contributions are one hundred percent (100%) vested when made and are subject to
the special distribution restrictions prescribed in section 8.2(e).

<PAGE>

                                      -11-

     2.47 Qualified Nonelective Contribution Account. That portion of a
Participant's Account that is attributable to Qualified Nonelective
Contributions received pursuant to section 4.3, adjusted for withdrawals and
distributions, and the earnings and losses attributable thereto.

     2.48 Recordkeeper. The organization designated by the Administrator to be
the recordkeeper for the Plan. Until and unless otherwise designated, the
Recordkeeper shall be Fidelity Investments.

     2.49 Reemployment Commencement Date. The first date on which the Employee
performs an Hour of Service following a Period of Severance that is excluded
under section 6.4 in determining whether a Participant has a nonforfeitable
right to his or her Matching, ESOP or Employer Contribution Accounts.

     2.50 Retirement. A termination of employment that occurs after a
Participant has either attained age 55 and completed a Period of Service of at
least ten (10) years or has attained Normal Retirement Age.

     2.51 Rollover Contributions. Amounts transferred or contributed to this
Plan from another plan or IRA in accordance with section 4.7.

     2.52 Rollover Contribution Account. That portion of a Participant's Account
which is attributable to Rollover Contributions received pursuant to section
4.7, adjusted for withdrawals and distributions, and the earnings and losses
attributable thereto.

     2.53 Severance from Service. The termination of employment by reason of
quit, Retirement, discharge, Layoff or death; or the failure to return from
Authorized Leave of Absence, Qualified Military Service or Disability.

     2.54 Severance from Service Date. The earliest of:

          (a) the date on which an Employee resigns, retires, is discharged, or
dies; or

          (b) except as provided in paragraphs (c), (d), (e) and (f) hereof, the
first anniversary of the first date of a period during which an Employee is
absent for any reason other than resignation, retirement, discharge or death,
provided that, on an equitable and uniform basis, the Administrator may
determine that, in the case of a Layoff as the result of a permanent plant
closing, the Administrator may designate the date of Layoff or other appropriate
date before the first anniversary of the first date of absence as the Severance
from Service Date; or

          (c) in the case of a Qualified Military Service leave of absence from
which the Employee does not return before expiration of recall rights, Severance
from Service Date means the first day of absence because of the leave; or

<PAGE>

                                      -12-

          (d) in the case of an absence due to Disability, Severance from
Service Date means the earlier of the first anniversary of the first day of
absence because of the Disability or the date of termination of the Disability;
or

          (e) in the case of an Employee who is discharged or resigns (i) by
reason of the pregnancy of the Employee, (ii) by reason of the birth of a child
to the Employee, (iii) by reason of the placement of a child with the Employee
in connection with the adoption of such child by the Employee or (iv) for
purposes of caring for such child for a period beginning immediately following
such birth or placement, "Severance from Service Date", for the sole purpose of
determining the length of a Period of Service, shall mean the first anniversary
of the resignation or discharge; or

          (f) in the case of an Employee who is absent from service beyond the
first anniversary of the first day of absence (i) by reason of the pregnancy of
the Employee, (ii) by reason of the birth of a child to the Employee, (iii) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by the Employee or (iv) for purposes of caring for such
child for a period beginning immediately following such birth or placement, the
Severance from Service Date shall be the second anniversary of the first day of
such absence. The period between the first and second anniversaries of the first
day of absence is neither a Period of Service nor a Period of Severance.

     2.55 Surviving Spouse. A person who was legally married to the Participant
immediately before the Participant's death.

     2.56 Trade Day. Days on which the Recordkeeper is able to make transfers of
Plan assets.

     2.57 Trust. The Raytheon Company Master Trust for Defined Contribution
Plans and any successor agreement made and entered into for the establishment of
a trust fund of all contributions which may be made to the Trustee under the
Plan.

     2.58 Trustee. The Trustee and any successor trustees under the Trust.

     2.59 Trust Fund. The cash, securities, and other property held by the
Trustee for the purposes of the Plan.

     2.60 United States-Based Payroll. A payroll maintained by the Company or an
Adopting Employer that is designated as a United States payroll on the books and
records of the Company or Adopting Employer and that is subject to United States
wage withholding and reporting laws.

     2.61 Valuation Date. Any day that the New York Stock Exchange is open for
trading.

<PAGE>

                                      -13-

                                   ARTICLE III

                                   Eligibility

     3.1  Eligibility Requirements. Each Eligible Employee who is a Participant
in the Plan (including the former participants in the Raytheon Employee Savings
and Investment Plan that was merged into the Plan) on the Effective Date shall
continue to participate in the Plan, in accordance with the terms and conditions
of the Plan as amended and restated herein. Each other Eligible Employee and any
person who subsequently becomes an Eligible Employee may join the Plan
immediately following his or her Employment Commencement Date (or, if later, the
date an Employee becomes an Eligible Employee).

     3.2  Procedure for Joining the Plan. Each Eligible Employee may join the
Plan by communicating with the Recordkeeper in accordance with the instructions
that will be made available to each Eligible Employee. An enrollment in the Plan
shall not be deemed to have been completed until the Eligible Employee has
designated: (i) a percentage by which his or her Compensation shall be reduced
as an Elective Deferral in accordance with the requirements of section 4.1; (ii)
election of investment funds in accordance with ARTICLE V; (iii) one or more
Beneficiaries; and (iv) such other information as specified by the Recordkeeper.
Enrollment will be effective as of the first Pay Period following completion of
enrollment for which it is administratively feasible to carry out such
enrollment. The Administrator, in its discretion, may from time to time make
exceptions and adjustments in the foregoing procedures on a uniform and
nondiscriminatory basis.

     3.3  Transfer Between Adopting Employers to Position Covered by Plan. A
Participant who is transferred to a position with another Adopting Employer in
which the Participant remains an Eligible Employee will continue as an active
Participant of the Plan.

     3.4  Transfer to Position Not Covered by Plan. If a Participant is
transferred to a position with an Employer in which the Participant is no longer
an Eligible Employee, the Participant will remain a Participant of the Plan with
respect to contributions previously made but shall no longer be eligible to have
Elective Deferrals made to the Plan on his or her behalf until he or she again
becomes an Eligible Employee. If the Participant becomes eligible to participate
in the Raytheon Savings and Investment Plan for Puerto Rico Based Employees
following such transfer and such plan accepts transfers from this Plan, the
Participant's Account shall be transferred to such plan (which Account under
such plan shall remain subject to the provisions of this Plan to the extent
required by section 411(d)(6) of the Code). In the event the Participant is
subsequently transferred to a position in which he or she again becomes an

<PAGE>

                                      -14-

Eligible Employee, the Participant may renew Elective Deferrals by communicating
with the Recordkeeper and providing all of the information requested by the
Recordkeeper. The renewal of Elective Deferrals will be effective as of the
first Pay Period following receipt by the Recordkeeper of the requested
information for which it is administratively feasible to re-enroll such
Participant.

     3.5  Transfer to Position Covered by Plan. If an Employee who is not
eligible to participate in the Plan by reason of his or her position with an
Employer is transferred to a position that is eligible to participate in the
Plan, such Employee may join the plan immediately following the effective date
of the new position in accordance with the procedures prescribed Section 3.2. If
such an Employee was, immediately prior to such transfer, a participant in the
Raytheon Savings and Investment Plan for Puerto Rico Based Employees, the
Employee's Elective Deferral election and investment directions under such plan
shall be deemed to apply for purposes of this Plan unless the Employee
designates otherwise.

     3.6  Special Rules Relating to Qualified Military Service.

          (a)  An Eligible Employee who returns from Qualified Military Service
shall be subject to the following special rules with respect to such Qualified
Military Service:

               (1) The Eligible Employee shall not be treated as having incurred
a break in service by reason of the Eligible Employee's period of Qualified
Military Service.

               (2) Each period of Qualified Military Service served by the
Eligible Employee, upon reemployment, shall constitute a Period of Service and
Period of Participation.

               (3) The Eligible Employee shall be entitled to the Qualified
Nonelective Contributions, Employer Contributions, Matching Contributions and
ESOP Contributions the Eligible Employee would have been entitled to if the
Eligible Employee had remained employed with the Adopting Employer during the
period of Qualified Military Service; provided that with respect to Matching
Contributions, the Eligible Employee shall only be entitled to such
contributions to the extent the Eligible Employee makes the associated Elective
Deferrals and Employee After-Tax Contributions that would have been allowed
during the period of Qualified Military Service in accordance with subsection
(4) below.

               (4) The Eligible Employee shall be entitled to make the Elective
Deferrals and Employee After-Tax Contributions the Eligible Employee would have
been eligible to make if the Eligible Employee had remained employed with the
Adopting Employer during the period of Qualified Military Service.

               (5) The make-up contributions described in subsections (3) and
(4) (hereinafter collectively referred to as "make-up contributions") may be
made from the date of

<PAGE>

                                      -15-

reemployment until the expiration of the period whose duration is three (3)
times the period of Qualified Military Service, up to a maximum period of five
(5) years. Make-up Elective Deferrals can only be made from Compensation that
has not been made available to the Eligible Employee.

               (6)  The make-up contributions shall not be taken into account
for purposes of allocating earnings under Section 5.7 until the make-up
contributions are actually made to the Plan.

               (7)  The make-up contributions shall only be taken into account
for purposes of applying the limitations prescribed by sections 402(g), 404(a)
and 415 of the Code for the year for which the make-up contributions would have
been made if the Eligible Employee had remained employed with the Adopting
Employer during the period of Qualified Military Service.

               (8)  The make-up contributions shall not be taken into account in
any year for purposes of applying the nondiscrimination requirements prescribed
in sections 401(a)(4), 401(k)(3), 401(m) and 410(b) of the Code, including the
provisions of the Plan incorporating such nondiscrimination requirements.

               (9)  In accordance with Section 9.5, loan repayments will be
suspended under the Plan during the period of Qualified Military Service to the
extent permitted under section 414(u) of the Code.

               (10) For purposes of determining the amount of make-up
contributions required or permitted under this Section 3.6, the Eligible
Employee's Compensation during the period of Qualified Military Service shall be
determined:

                    (A) at the rate the Eligible Employee would have received if
the Eligible Employee had continued working for the Adopting Employer during the
period of Qualified Military Service; or

                    (B) if the determination in subparagraph (A) is not certain,
on the basis of the Eligible Employee's average rate of Compensation during the
12-month period immediately preceding the period of Qualified Military Service
(or, if shorter, the period of employment immediately preceding such period).

          (b)  Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to Qualified Military
Service shall be provided in accordance with section 414(u) of the Code.

<PAGE>

                                      -16-

                                   ARTICLE IV

                                  Contributions

     4.1  Elective Deferrals.

          (a) Except as otherwise provided herein and in Exhibit A to this Plan,
a Participant may authorize an Adopting Employer to reduce his or her
Compensation on a pre-tax basis by an amount equal to any whole percentage of
Compensation that does not exceed twenty percent (20%) and to have such amount
contributed to the Plan as an Elective Deferral. Notwithstanding the preceding
sentence, a Participant who is eligible to participate in the contributory
portion of either the Raytheon Bargaining Retirement Plan or the Raytheon
Non-Bargaining Retirement Plan (Exhibit A to each plan) may not make Elective
Deferrals that exceed seventeen percent (17%) of his or her Compensation.

          (b) A Participant shall not be permitted to make Elective Deferrals
during any calendar year in excess of the dollar limitation contained in section
402(g) of the Code in effect for such calendar year. A Participant may
affirmatively designate that in the event his or her Elective Deferrals are
limited in accordance with this subsection (b) and the Participant is eligible
to make Employee After-Tax Contributions under section 4.2, all future deferrals
of Compensation shall be on an after-tax basis and shall be re-characterized as
Employee After-Tax Contributions under section 4.2. This re-characterization
shall take effect as of the first Pay Period by which it is administratively
feasible to make such re-characterization.

          (c) Except as otherwise provided herein and in Exhibit A to this Plan,
the Elective Deferrals and Employee After-Tax Contributions (if applicable) made
on behalf of each Participant shall not in the aggregate exceed twenty percent
(20%) of the Participant's Compensation for any Plan Year. Notwithstanding the
preceding sentence, a Participant who is participating in the contributory
portion of either the Raytheon Bargaining Retirement Plan or the Raytheon
Non-Bargaining Retirement Plan (Exhibit A to each plan) may not make Elective
Deferrals and Employee After-Tax Contributions that in the aggregate exceed
seventeen percent (17%) of his or her Compensation.

          (d) A Participant may change his or her Elective Deferral percentage
to increase or decrease said percentage by notifying the Recordkeeper, such
change to take effect as of the first Pay Period by which it is administratively
feasible to make such change.

          (e) A Participant may not make Elective Deferrals with respect to
Compensation that has already been made available to the Participant.

<PAGE>

                                      -17-

          (f) Effective on and after November 1, 2001, with the approval of the
Senior Vice President, Human Resources, of the Company, or other officer to whom
authority to determine contributions is delegated by the Board of Directors, an
Adopting Employer may provide its Eligible Employees with a cash or deferred
election with respect to all or a portion of the Service Contract Act
reconciliation amounts referenced in Section 4.3(c) ("SCA Amounts"). If such
cash or deferred election is provided, an Eligible Employee can elect either (i)
to receive the SCA Amounts in cash as additional taxable compensation, or (ii)
to have the SCA Amounts contributed to the Plan as additional Elective
Deferrals, subject to the limitations otherwise provided under the Plan. If an
Eligible Employee does not make a cash or deferred election within the time
period specified by the Administrator, the SCA Amounts will be paid to the
Eligible Employee in cash as additional taxable compensation.

     4.2  Employee After-Tax Contributions.

          (a) Except as otherwise provided herein and in Exhibit A to this Plan,
a Participant may authorize an Adopting Employer to reduce his or her
Compensation on an after-tax basis by an amount equal to any whole percentage of
Compensation that does not exceed twenty percent (20%) and to have such amount
contributed to the Plan as an Employee After-Tax Contribution. Notwithstanding
the preceding sentence, a Participant who is participating in the contributory
portion of either the Raytheon Bargaining Retirement Plan or the Raytheon
Non-Bargaining Retirement Plan (Exhibit A to each plan) may not make Employee
After-Tax Contributions that exceed seventeen percent (17%) of his or her
Compensation.

          (b) Except as otherwise provided herein and in Exhibit A to this Plan,
the Elective Deferrals and Employee After-Tax Contributions made on behalf of
each Participant shall not in the aggregate exceed twenty percent (20%) of the
Participant's Compensation for any Plan Year. Notwithstanding the preceding
sentence, a Participant who is participating in the contributory portion of
either the Raytheon Bargaining Retirement Plan or the Raytheon Non-Bargaining
Retirement Plan (Exhibit A to each plan) may not make Elective Deferrals and
Employee After-Tax Contributions that in the aggregate exceed seventeen percent
(17%) of his or her Compensation.

          (c) A Participant may change his or her Employee After-Tax
Contribution percentage to increase or decrease said percentage by notifying the
Recordkeeper, such change to take effect as of the first Pay Period by which it
is administratively feasible to make such change.

<PAGE>

                                      -18-

     4.3  Qualified Nonelective Contributions.

          (a)  Discretionary Amounts: Each Plan Year the Adopting Employers may
contribute to the Trust such amounts as determined by the Senior Vice President
of Human Resources of the Company or other officer to whom authority to
determine contributions is delegated by the Board of Directors, in his or her
sole discretion. Any amounts contributed under this subsection are to be
designated by the Adopting Employers as Qualified Nonelective Contributions.

          (b)  Specified Amounts: The Adopting Employers designated in Exhibit A
to this Plan shall make Qualified Nonelective Contributions on behalf of their
Eligible Employees in accordance with the Qualified Nonelective Contribution
formula prescribed in Exhibit A to this Plan.

          (c)  Service Contract Act Reconciliation Amounts: Each Plan Year the
Adopting Employers may contribute to the Trust such amounts as determined by the
Senior Vice President of Human Resources of the Company or other officer to whom
authority to determine contributions is delegated by the Board of Directors, in
his or her sole discretion, consisting of the entire amount or any part of any
deficiency between health and welfare and/or pension contributions actually made
under a contract covered by the Service Contract Act and the amount of such
contribution or contributions required by a wage determination issued under the
contract. Such amount shall be calculated in accordance with the formula
specified in 29 CFR (S) 4.175 as follows:

          The total amount contributed for a month, calendar or contract
          quarter, or other specified time is divided by the total hours worked
          under the contract by service employees subject to the Act during the
          period in question to determine an hourly contribution rate.

The difference between the contribution rate required in the determination and
the actual contribution may be contributed to the Plan on behalf of each
Eligible Employee for purposes of fulfilling the Adopting Employers' fringe
benefit obligations under the Service Contract Act.

     4.4  Employer Contributions. The Adopting Employers designated in Exhibit A
to this Plan shall make Employer Contributions on behalf of their Eligible
Employees in accordance with the Employer Contribution formula prescribed in
Exhibit A to this Plan.

     4.5  Matching Contributions.

          (a)  Except as otherwise provided in Exhibit A to this Plan, each
Adopting Employer shall make Matching Contributions equal in value to one
hundred percent (100%) of

<PAGE>

                                      -19-

the total Elective Deferrals and Employee After-Tax Contributions made for each
Pay Period by each Participant who is an Eligible Employee of such Adopting
Employer, but the total of such Matching Contributions for any Participant shall
not exceed four percent (4%) of a Participant's Compensation from such Adopting
Employer for each such Pay Period.

          (b)  Except as otherwise provided in Exhibit A to this Plan, the
Matching Contribution shall be made in either Common Stock or cash that is
invested in Common Stock. The number of shares of Common Stock contributed by
the Adopting Employer or acquired with Matching Contributions under this
subsection (b) shall be allocated to the Participant's Account by the Trustee
and such allocation shall equal the number of shares of Common Stock which the
Trustee could have purchased for the Participant at the Current Market Value.
Such Matching Contribution shall remain invested in Common Stock in accordance
with section 5.1(b).

     4.6  ESOP Contributions. The Adopting Employers designated in Exhibit A to
this Plan shall make an ESOP Contribution equal to one-half of one percent
(0.5%) of the eligible Participants' Compensation for each Plan Year. The ESOP
Contribution may be made in cash, Common Stock or a combination thereof at the
discretion of the designated Adopting Employers. The Administrator shall
allocate the ESOP Contribution to the eligible Participants who received
Compensation during such Plan Year. The ESOP Contribution (consisting of Common
Stock and any residual cash) shall be allocated to those eligible Participants
in the same ratio as each such Participant's Compensation for the Plan Year
bears to the Total Compensation of all such eligible Participants for the Plan
Year. Notwithstanding anything herein to the contrary, with respect to
Compensation paid on or after August 1, 2000, a Participant shall not be
eligible for an ESOP Contribution if the Participant's Compensation for a Plan
Year is two thousand dollars ($2,000) or less.

     4.7  Rollover Contributions.

          (a)  Participants may transfer into the Plan Qualifying Rollover
Amounts from other plans or IRAs, subject to the following terms and conditions:

               (1) the transferred funds are received by the Trustee no later
than sixty (60) days from receipt by the Participant of a distribution from the
other plan or IRA;

               (2) the Rollover Contributions transferred pursuant to this
section 4.7(a) shall be credited to the Participant's Rollover Contribution
Account and will be invested upon receipt by the Trustee; and

<PAGE>

                                      -20-

               (3)  a Rollover Contribution will not be accepted unless (A) the
Employee on whose behalf the Rollover Contribution will be made is either a
Participant or an Eligible Employee who has notified the Administrator that he
or she intends to become a Participant as of the first date on which he or she
is eligible therefor, and (B) all required information, including selection of
specific investment accounts, is provided to the Recordkeeper.

          (b)  For purposes of this section, the following terms shall have the
meanings specified:

               (1)  Qualifying Rollover Amounts.

                    (A)  For distributions before January 1, 2002, amounts from
the following types of plans or IRAs:

                         (i)   a qualified plan described in section 401(a) or
403(a) of the Code, excluding after-tax employee contributions.

                         (ii)  an IRA, but only if no amount of the account and
no part of the value of the annuity is attributable to any source other than a
rollover contribution (as defined in section 402(c) of the Code, excluding
after-tax employee contributions) from an employee's trust described in section
401(a) of the Code which is exempt from tax under section 501(a) of the Code or
from an annuity described in section 403(a) (and any earnings on such
contribution).

                    (B)  For distributions after December 31, 2001, amounts from
the following types of plans or IRAs:

                         (i) a qualified plan described in section 401(a) or
403(a) of the Code, including after-tax employee contributions.

                         (ii)  an annuity contract described in section 403(b)
of the Code, excluding after-tax employee contributions.

                         (iii) an eligible plan under section 457(b) of the Code
which is maintained by a state, political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state.

                         (iv)  an IRA, but only to the extent that the amount
would have been includible in gross income of the Participant if the amount had
been distributed to the Participant and not rolled over to any plan or IRA.

               (2)  IRA. An individual retirement account or annuity under
section 408(a) or (b) of the Code, respectively.

     4.8  Direct Transfers.

          (a)  The Plan shall accept a transfer of assets, including elective
transfers in accordance with Treas. Regs. section 1.411(d)-4 Q&A-3(b) and
transfers in connection with a

<PAGE>

                                      -21-

plan merger, directly from another plan qualified under section 401(a) of the
Code only if the Administrator, in its sole discretion, agrees to accept such a
transfer. In determining whether to accept such a transfer, the Administrator
shall consider the administrative inconvenience engendered by such a transfer
and any risks to the continued qualification of the Plan under section 401(a) of
the Code. Acceptance of any such transfer shall not preclude the Administrator
from refusing any such subsequent transfers.

          (b) Any transfer of assets accepted under this subsection shall be
separately accounted for at all times and shall remain subject to the provisions
of the transferor plan (as it existed at the time of such transfer) to the
extent required by section 411(d)(6) of the Code (including, but not limited to,
any rights to qualified joint and survivor annuities and qualified preretirement
survivor annuities) as if such provisions were part of the Plan. In all other
respects, however, such transferred assets shall be subject to the provisions of
this Plan. The Administrator may, but is not required to, describe in Exhibit B
to this Plan the special provisions that must be preserved under section
411(d)(6) of the Code, if any, following the transfer of assets from another
plan in accordance with this subsection (b).

          (c) Assets accepted under this section shall be nonforfeitable.
Notwithstanding the preceding sentence, assets transferred in connection with
the plan merger identified in section 1.1(b) shall vest in accordance with the
provisions of ARTICLE VI.

     4.9  Refund of Contributions to the Adopting Employers. Notwithstanding the
provisions of ARTICLES XII and XIV, if, or to the extent that, any Adopting
Employer's deductions for contributions made to the Plan are disallowed, such
Adopting Employer will have the right to obtain the return of any such
contributions for a period of one (1) year from the date of disallowance. For
this purpose, all contributions are made, other than Employee After-Tax
Contributions, subject to the condition that they are deductible under the Code
for the taxable year of the Adopting Employers for which the contributions are
made. Furthermore, any contribution made on the basis of a mistake in fact may
be returned to the Adopting Employers within one (1) year from the date such
contribution was made.

     4.10 Payment. The Adopting Employers shall pay to the Trustee in U.S.
currency, or by other property acceptable to the Trustee, all contributions for
each Plan Year within the time prescribed by law, including extensions granted
by the Internal Revenue Service, for filing the federal income tax return of the
Company for its taxable year in which such Plan Year ends. Unless designated by
the Adopting Employers as nondeductible, all contributions made, other than
Employee After-Tax Contributions, shall be deemed to be conditioned on their
current deductibility under section 404 of the Code.

<PAGE>

                                      -22-

     4.11 Limits for Highly Compensated Employees.

          (a)  Elective Deferrals, Employee After-Tax Contributions, Matching
Contributions and Qualified Nonelective Contributions allocable to the Accounts
of Highly Compensated Employees shall not in any Plan Year exceed the limits
specified in this section. The Administrator may make the adjustments authorized
in this section to ensure that the limits of subsection (b) (or any other
applicable limits) are not exceeded, regardless of whether such adjustments
affect some Participants more than others. This section shall be administered
and interpreted in accordance with sections 401(k) and 401(m) of the Code.

          (b)  (1)  The Actual Deferral Percentage of the Highly Compensated
Employees shall not exceed, in any Plan Year, the greater of:

                    (A) one hundred twenty-five percent (125%) of the Actual
Deferral Percentage for all other Eligible Participants; or

                    (B) the lesser of two hundred percent (200%) of the Actual
Deferral Percentage for all other Eligible Participants or the Actual Deferral
Percentage for the other Eligible Participants plus two (2) percentage points.

               (2) The Actual Contribution Percentage of the Highly Compensated
Employees shall not exceed, in any Plan Year, the greater of:

                    (A) one hundred twenty five percent (125%) of the Actual
Contribution Percentage for all other Eligible Participants; or

                    (B) the lesser of two hundred percent (200%) of the Actual
Contribution Percentage for all other Eligible Participants or the Actual
Contribution Percentage for the other Eligible Participants plus two (2)
percentage points.

               (3) For the Plan Years beginning before January 1, 2002, the sum
of the Actual Deferral Percentage and the Actual Contribution Percentage for the
Highly Compensated Employees shall not exceed, in any Plan Year, the sum of:

                    (A) one hundred twenty-five percent (125%) of the greater
of:

                        (i) the Actual Deferral Percentage of the other Eligible
Participants; or

                        (ii) the Actual Contribution Percentage of the other
Eligible Participants; and

                    (B) two plus the lesser of:

                        (i) the amount in paragraph (3)(A)(i); or

<PAGE>

                                      -23-

                         (ii) the amount in paragraph (3)(A)(ii); provided that
the amount in this paragraph (3)(B) shall not exceed two hundred percent (200%)
of the lesser of the amount in paragraph (3)(A)(i) or the amount in paragraph
(3)(A)(ii).

               (4)  The limitations under section 4.11(b)(3) shall be modified
to reflect any higher limitations provided by the Internal Revenue Service under
regulations, notices or other official statements.

          (c)  The following terms shall have the meanings specified:

               (1) Actual Contribution Percentage. The average of the ratios for
a designated group of Employees (calculated separately for each Employee in the
group) of the sum of the Matching Contributions (other than those treated as
part of the Actual Deferral Percentage), Qualified Nonelective Contributions
(other than those treated as part of the Actual Deferral Percentage), Employee
After-Tax Contributions and Elective Deferrals (other than those treated as part
of the Actual Deferral Percentage) allocated for the applicable year on behalf
of the Participant, divided by the Participant's Compensation for such
applicable year. The "applicable year" for determining the Actual Contribution
Percentage for the group of Highly Compensated Employees shall be the current
Plan Year. For all other Eligible Participants, the "applicable year" for
determining the Actual Contribution Percentage shall be the current Plan Year,
unless, in accordance with the procedures prescribed by the Internal Revenue
Service, the Administrator elects to use the immediately preceding Plan Year. In
the event the Administrator elects to use the immediately preceding Plan Year
for this purpose for any Plan Year, the Administrator shall so indicate in
Exhibit C to this Plan.

               (2) Actual Deferral Percentage. The average of the ratios for a
designated group of Employees (calculated separately for each Employee in the
group) of the sum of the Elective Deferrals, Qualified Nonelective Contributions
and Matching Contributions (that the Company elects to have treated as part of
the Actual Deferral Percentage) allocated for the applicable year on behalf of a
Participant, divided by the Participant's Compensation for such applicable year.
The "applicable year" for determining the Actual Deferral Percentage for the
group of Highly Compensated Employees shall be the current Plan Year. For all
other Eligible Participants, the "applicable year" for determining the Actual
Deferral Percentage shall be the current Plan Year, unless in accordance with
the procedures prescribed by the Internal Revenue Service, the Administrator
elects to use the immediately preceding Plan Year. In the event the
Administrator elects to use the immediately preceding Plan Year for this purpose
for any Plan Year, the Administrator shall so indicate in Exhibit C to this
Plan.

<PAGE>

                                      -24-

              (3) Compensation. To the extent regulations permit the definition
of Compensation in ARTICLE II to be used, then such definition shall be applied
for purposes of this ARTICLE; provided, however, that to the extent such
definition is not so permitted, then Compensation shall include all compensation
required to be counted under section 414(s) of the Code; provided further,
however, that this definition shall not apply for purposes of the definition of
Highly Compensated Employee in section 2.31.

              (4) Eligible Participant. Any Employee of the Company who is
authorized under the terms of the Plan to make Elective Deferrals, Employee
After-Tax Contributions or have Qualified Nonelective Contributions allocated to
his or her Account for the Plan Year.

          (d) For purposes of determining whether a plan satisfies the Actual
Contribution Percentage test of section 401(m), all Employee and matching
contributions that are made under two (2) or more plans that are aggregated for
purposes of section 401(a)(4) and 410(b) (other than section 410(b)(2)(A)(ii))
are to be treated as made under a single plan and that if two (2) or more plans
are permissively aggregated for purposes of section 401(m), the aggregated plans
must also satisfy section 401(a)(4) and 410(b) as though they were a single
plan.

          (e) In calculating the Actual Contribution Percentage for purposes of
section 401(m), the actual contribution ratio of a Highly Compensated Employee
will be determined by treating all plans subject to section 401(m) under which
the Highly Compensated Employee is eligible (other than those that may not be
permissively aggregated) as a single plan.

          (f) For purposes of determining whether a plan satisfies the Actual
Deferral Percentage test of section 401(k), all elective contributions that are
made under two (2) or more plans that are aggregated for purposes of section
401(a)(4) or 410(b) (other than section 410(b)(2)(A)(ii)) are to be treated as
made under a single plan and that if two (2) or more plans are permissively
aggregated for purposes of section 401(k), the aggregated plans must also
satisfy sections 401(a)(4) and 410(b) as though they were a single plan.

          (g) In calculating the Actual Deferral Percentage for purposes of
section 401(k), the actual deferral ratio of a Highly Compensated Employee will
be determined by treating all cash or deferred arrangements under which the
Highly Compensated Employee is eligible (other than those that may not be
permissively aggregated) as a single arrangement.

          (h) An elective contribution will be taken into account under the
Actual Deferral Percentage test of section 401(k)(3)(A) of the Code for a Plan
Year only if it is allocated to the Employee as of a date within that Plan Year.
For this purpose, an elective contribution is

<PAGE>

                                      -25-

considered allocated as of a date within a Plan Year if the allocation is not
contingent on participation or performance of services after such date and the
elective contribution is actually paid to the Trust no later than twelve (12)
months after the Plan Year to which the contribution relates.

     4.12  Correction of Excess Contributions.

           (a) Excess Contributions shall be corrected as provided in this
section. The Administrator may also prevent anticipated Excess Contributions as
provided in this section. The Administrator may use any method of correction or
prevention provided in this section or any combination thereof, as it determines
in its sole discretion. This section shall be administered and interpreted in
accordance with sections 401(k) and 401(m) of the Code.

           (b) The Administrator may refuse to accept any or all prospective
Elective Deferrals to be contributed by a Participant. (c) (1) The Company may,
in its sole discretion, elect to contribute, as provided in section 4.3(a), a
Qualified Nonelective Contribution in an amount necessary to satisfy any or all
of the requirements of section 4.11.

           (2) Qualified Nonelective Contributions that are made for a Plan Year
to correct Excess Contributions shall only be allocated to the Accounts of
Participants who are not Highly Compensated Employees. Such Qualified
Nonelective Contributions shall be allocated first to the Participant with the
lowest Compensation for that Plan Year and any remaining Qualified Nonelective
Contributions thereafter shall be allocated to the Participant with the next
lowest Compensation for that Plan Year. This allocation method shall continue in
ascending order of Compensation until all such Qualified Nonelective
Contributions are allocated. The allocation to any Participant shall not exceed
the limits under section 415 of the Code. If two or more Participants have
identical Compensation, the allocations to them shall be proportional.

           (3) Qualified Nonelective Contributions for a Plan Year shall be
contributed to the Trust within twelve (12) months after the close of such Plan
Year.

           (4) Qualified Nonelective Contributions shall only be allocated to
Participants who receive Compensation during the Plan Year for which such
contribution is made.

           (d) The Administrator may, during a Plan Year, distribute to a
Participant (or such Participant's Beneficiary if the Participant is deceased),
any or all Excess Contributions or Excess Deferrals (whether Elective Deferrals,
Matching Contributions or Qualified Nonelective Contributions) allocable to that
Participant's Account for that Plan Year, notwithstanding any

<PAGE>

                                      -26-

contrary provision of the Plan. Such distribution may include earnings or losses
(if any) attributable to such amounts, as determined by the Administrator.

           (e) (1) The Administrator may recharacterize any or all Excess
Contributions for a Plan Year as Employee contributions in accordance with the
provisions of this subsection. Any Excess Contributions that are so
recharacterized shall be treated as if the Participant had elected to instead
receive cash Compensation on the earliest date that any Elective Deferrals made
on behalf of the Participant during the Plan Year would have been received had
the Participant originally elected to receive such amount in cash and then
contributed such amount as an Employee contribution. To the extent required by
the Internal Revenue Service, however, such recharacterized Excess Contributions
shall continue to be treated as if such amounts were not recharacterized.

               (2) The Administrator shall report any recharacterized Excess
Contributions as Employee contributions to the Internal Revenue Service and to
the affected Participants at such times and in accordance with such procedures
as are required by the Internal Revenue Service. The Administrator shall take
such other actions regarding the amounts so recharacterized as may be required
by the Internal Revenue Service.

               (3) Excess Contributions may not be recharacterized under this
subsection more than two and one-half (2 1/2) months after the close of the Plan
Year to which the recharacterization relates. Recharacterization is deemed to
occur when the Participant is so notified (as required by the Internal Revenue
Service).

               (4) The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by Excess Deferrals previously distributed for
the taxable year ending in the same Plan Year and Excess Deferrals to be
distributed for a taxable year will be reduced by Excess Contributions
previously distributed or recharacterized for the Plan beginning in such taxable
year.

           (f) (1) The Administrator may distribute any or all Excess
Contributions for a Plan Year in accordance with the provisions of this
subsection. Such distribution may only occur after the close of such Plan Year
and within twelve (12) months of the close of such Plan Year. In the event of
the termination of the Plan, such distribution shall be made within twelve (12)
months after such termination. Such distribution shall include the income
allocable to the amounts so distributed, as determined under this subsection.
The Administrator may make any special allocations of earnings or losses
necessary to carry out the provisions of this subsection. A distribution of an
Excess Contribution under this subsection may be made without regard to any
notice or consent otherwise required pursuant to sections 411(a)(11) and 417 of
the Code.

<PAGE>

                                      -27-

               (2) (A) The income allocable to Excess Contributions distributed
under this subsection shall equal the allocable gain or loss for the Plan Year.
Income includes all earnings and appreciation, including such items as interest,
dividends, rent, royalties, gains from the sale of property, appreciation in the
value of stock, bonds, annuity and life insurance contracts, and other property,
without regard to whether such appreciation has been realized.

                   (B) The allocable gain or loss for the Plan Year may be
determined under any reasonable method consistently applied by the
Administrator. Alternatively, the Administrator may, in its discretion,
determine such allocable gain or loss for the Plan Year under the method set
forth in subparagraph (C).

                   (C) Under this method, the allocable gain or loss for the
Plan Year is determined by multiplying the income for the Plan Year allocable to
Elective Deferrals (and amounts treated as Elective Deferrals) by a fraction,
the numerator of which is the Excess Contributions by the Participant for the
Plan Year and the denominator of which is the total Account balance of the
Participant attributable to Elective Deferrals (and amounts treated as Elective
Deferrals) as of the beginning of the Plan Year, increased by any Elective
Deferrals (and amounts treated as Elective Deferrals) by the Participant for the
Plan Year.

               (3) Amounts distributed under this subsection (or other
provisions of this section) shall first be treated as distributions from the
Participant's subaccounts in the following order:

                   (A) from the Participant's Elective Deferrals Account (if
such Excess Contribution is attributable to Elective Deferrals);

                   (B) from the Participant's Qualified Nonelective Contribution
Account (if such Excess Contribution is attributable to Qualified Nonelective
Contributions); and

                   (C) from the Participant's Matching Contribution Account (if
such Excess Contribution is attributable to Matching Contributions).

               (g) (1) The term "Excess Contribution" shall mean, with respect
to a Plan Year, the excess of the Elective Deferrals (including any Qualified
Nonelective Contributions and Matching Contributions that are treated as
Elective Deferrals under sections 401(k)(2) and 401(k)(3) of the Code) on behalf
of eligible Highly Compensated Employees for the Plan Year over the maximum
amount of such contributions permitted under sections 401(k)(2) and 401(k)(3) of
the Code.

                   (2) Any distribution of Excess Contributions for a Plan Year
shall be made to Highly Compensated Employees on the basis of the amount of
contributions by, or on behalf of, each such Highly Compensated Employee.

<PAGE>

                                      -28-

               (3) The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by Excess Deferrals previously distributed for
the taxable year ending in the same Plan Year and Excess Deferrals to be
distributed for a taxable year will be reduced by Excess Contributions
previously distributed or recharacterized for the Plan beginning in such taxable
year.

     4.13  Correction of Excess Deferrals.

           (a) Excess Deferrals shall be corrected as provided in this section.
The Administrator may also prevent anticipated Excess Deferrals as provided in
this section. The Administrator may use any method of correction or prevention
provided in this section or any combination thereof, as it determines in its
sole discretion. A distribution of an Excess Deferral under this section may be
made without regard to any notice or consent otherwise required pursuant to
sections 411(a)(11) and 417 of the Code. This section shall be administered and
interpreted in accordance with sections 401(k) and 402(g) of the Code.

           (b) The Administrator may refuse to accept any or all prospective
Elective Deferrals to be contributed by a Participant.

           (c) (1) The Administrator may distribute any or all Excess Deferrals
to the Participant on whose behalf such Excess Deferrals were made before the
close of the Applicable Taxable Year. Distributions under this subsection
include income allocable to the Excess Distribution so distributed, as
determined under this subsection.

                   (2) Distribution under this subsection shall only be made if
all the following conditions are satisfied:

                       (A) the Participant seeking the distribution designates
the distribution as an Excess Deferral;

                       (B) the distribution is made after the date the Excess
Deferral is received by the Plan; and

                       (C) the Plan designates the distribution as a
distribution of an Excess Deferral.

                   (3) The income allocable to the Excess Deferral distributed
under this subsection shall be determined in the same manner as under subsection
(d)(3), except that income shall only be determined for the period from the
beginning of the Applicable Taxable Year to the date on which the distribution
is made.

               (d) (1) The Administrator may distribute any or all Excess
Deferrals to the Participant on whose behalf such Excess Deferrals were made
after the close of the Applicable Taxable Year. Distribution under this
subsection shall only be made if the Participant timely

<PAGE>

                                      -29-

provides the notice required under subsection (d)(2) and such distribution is
made after the Applicable Taxable Year and before the first April 15 following
the close of the Applicable Taxable Year. Distributions under this subsection
shall include income allocable to the Excess Deferrals so distributed, as
determined under this subsection.

               (2) Any Participant seeking a distribution of an Excess Deferral
in accordance with this subsection must notify the Administrator of such request
no later than the first March 15 following the close of the Applicable Taxable
Year. The Administrator may agree to accept notification received after such
date (but before the first April 15 following the close of the Applicable
Taxable Year) if it determines that it would still be administratively
practicable to make such distribution in view of the delayed notification. The
notification required by this subsection shall be deemed made if a Participant's
Elective Deferrals to the Plan in any Plan Year create an Excess Deferral.

               (3) The income allocable to the Excess Deferral distributed under
this subsection shall be determined in the same manner as under section
4.12(f)(2), except that the term "Excess Deferrals" shall be substituted for
"Excess Contributions" and the term "Applicable Taxable Year" shall be
substituted for "Plan Year." The Administrator may make any special allocations
of earnings or losses necessary to carry out the provisions of this subsection.

           (e)  The following terms shall have the meanings specified:

               (1) Applicable Taxable Year. The taxable year (for federal income
tax purposes) of the Participant in which an Excess Deferral must be included in
gross income (when made) in accordance with section 402(g) of the Code.

               (2) Excess Deferral. A Participant's Elective Deferrals (and
other contributions limited by section 402(g) of the Code), for an Applicable
Taxable Year that are in excess of the limits imposed by section 402(g) of the
Code for such Applicable Taxable Year.

     4.14  Correction of Excess Aggregate Contributions.

           (a) Excess Aggregate Contributions shall be corrected as provided in
this section. The Administrator may use any method of correction or prevention
provided in this section or any combination thereof, as it determines in its
sole discretion. This section shall be administered and interpreted in
accordance with sections 401(k) and 401(m) of the Code.

           (b) The Administrator may refuse to accept any or all prospective
Elective Deferrals to be contributed to a Participant.

           (c) (1) The Company may, in its sole discretion, elect to contribute,
as provided in section 4.3(a), a Qualified Nonelective Contribution in an amount
necessary to satisfy any or all of the requirements of section 4.11.

<PAGE>

                                      -30-

               (2) Qualified Nonelective Contributions that are made for a Plan
Year to correct Excess Aggregate Contributions shall only be allocated to the
Accounts of Participants who are not Highly Compensated Employees. Such
Qualified Nonelective Contributions shall be allocated first to the Participant
with the lowest Compensation for that Plan Year and any remaining Qualified
Nonelective Contributions thereafter shall be allocated to the Participant with
the next lowest compensation for that Plan Year. This allocation method shall
continue in ascending order of Compensation until all such Qualified Nonelective
Contributions are allocated. The allocation to any Participant shall not exceed
the limits under section 415 of the Code. If two or more Participants have
identical Compensation, the allocations to them shall be proportional.

               (3) Qualified Nonelective Contributions for a Plan Year shall be
contributed to the Trust within twelve (12) months after the close of such Plan
Year.

               (4) Qualified Nonelective Contributions shall only be allocated
to Participants who receive Compensation during the Plan Year for which such
contribution is made.

          (d)  The Administrator may, during a Plan Year, distribute to a
Participant (or such Participant's Beneficiary if the Participant is deceased),
any or all Excess Aggregate Contributions allocable to that Participant's
Account for that Plan Year, notwithstanding any contrary provision of the Plan.
Such distribution may include earnings or losses (if any) attributable to such
amounts, as determined by the Administrator.

          (e)  (1) The Administrator may forfeit any or all Excess Aggregate
Contributions for a Plan Year in accordance with the provisions of this
subsection. The amounts so forfeited shall not include any amounts that are
nonforfeitable under ARTICLE VI.

               (2) Any forfeitures under this subsection shall be made in
accordance with the procedures for distributions under subsection (f) except
that such amounts shall be forfeited instead of being distributed.

          (f)  (1) The Administrator may distribute any or all Excess Aggregate
Contributions for a Plan Year in accordance with the provisions of this
subsection. Such distribution may only occur after the close of such Plan Year
and within twelve (12) months of the close of such Plan Year. Such distributions
shall be specifically designated by the Administrator as a distribution of
Excess Aggregate Contributions. In the event of the complete termination of the
Plan, such distribution shall be made within twelve (12) months after such
termination. Such distribution shall include the income allocable to the amounts
so distributed, as determined under this subsection. The Administrator may make
any special allocations of

<PAGE>

                                      -31-

earnings or losses necessary to carry out the provisions of this subsection. A
distribution of an Excess Aggregate Contribution under this subsection may be
made without regard to any notice or consent otherwise required pursuant to
sections 411(a)(11) and 417 of the Code.

               (2) (A) The income allocable to Excess Aggregate Contributions
distributed under this subsection shall equal the allocable gain or loss for the
Plan Year. Income includes all earnings and appreciation, including such items
as interest, dividends, rent, royalties, gains from the sale of property,
appreciation in the value of stock, bonds, annuity and life insurance contracts,
and other property, without regard to whether such appreciation has been
realized.

                   (B) The allocable gain or loss for the Plan Year may be
determined under any reasonable method consistently applied by the
Administrator. Alternatively, the Administrator may, in its discretion,
determine such allocable gain or loss for the Plan Year under the method set
forth in subparagraph (C).

                   (C) Under this method, the allocable gain or loss for the
Plan Year is determined by multiplying the income for the Plan Year allocable to
employee contributions, matching contributions and amounts treated as matching
contributions by a fraction, the numerator of which is the Excess Aggregate
Contributions for the Participant for the Plan Year and the denominator of which
is the total Account balance of the Participant attributable to employee
contributions, matching contributions and amounts treated as matching
contributions as of the beginning of the Plan Year, increased by the employee
contributions, matching contributions and amounts treated as matching
contributions for the Participant for the Plan Year.

               (3) Amounts distributed under this subsection (or other
provisions of this section) shall first be treated as distributions from the
Participant's subaccounts in the following order:

                   (A) from the Participant's Employee After-Tax Contribution
Account (if such Excess Aggregate Contribution is attributable to Employee
After-Tax Contributions);

                   (B) from the Participant's Qualified Nonelective
Contribution Account (if such Excess Aggregate Contribution is attributable to
Qualified Nonelective Contributions); and

                   (C) from the Participant's Matching Contribution Account (if
such Excess Aggregate Contribution is attributable to Matching Contributions).

<PAGE>

                                      -32-

          (g)  (1) The term "Excess Aggregate Contribution" shall mean, with
respect to a Plan Year, the excess of the aggregate amount of the matching
contributions and employee contributions (including any Qualified Nonelective
Contributions or elective deferrals taken into account in computing the Actual
Contribution Percentage) actually made on behalf of eligible Highly Compensated
Employees for the Plan Year over the maximum amount of such contributions
permitted under section 401(m)(2)(A) of the Code.

               (2) The terms "employee contributions" and "matching
contributions" shall, for purposes of this section, have the meanings set forth
in Treas. Reg.(S)1.401(m)-1(f).

               (3) Any distribution of Excess Aggregate Contributions for a Plan
Year shall be made to Highly Compensated Employees on the basis of the amount of
contributions by, or on behalf of, each such Highly Compensated Employee.

     4.15 Correction of Multiple Use.

          (a)  If the limitations of Treas. Reg.ss.1.401(m)-2 are exceeded for
any Plan Year beginning before January 1, 2002, then correction shall be made in
accordance with the provisions of this section. The limitations of Treas.
Reg.(S)1.401(m)-2 do not apply for Plan Years beginning after December 31, 2001.
This section shall be administered and interpreted in accordance with sections
401(k) and 401(m) of the Code.

          (b)  Any correction required by this section shall be calculated and
administered in accordance with the provisions for correcting Excess
Contributions (in section 4.12), Excess Aggregate Contributions (in section
4.14) or both, as the Administrator determines in its sole discretion. Any
correction required by this section, to the extent possible, shall be made only
with respect to those Highly Compensated Employees who are eligible in both the
arrangement subject to section 401(k) of the Code and the Plan, as subject to
section 401(m) of the Code.

<PAGE>

                                      -33-

                                    ARTICLE V

                             Investment of Accounts

     5.1  Election of Investment Funds.

          (a)  Except as otherwise prescribed in subsections (b), (c) and (d)
below, upon enrollment in the Plan, each Participant shall direct that the funds
in the Participant's Account be invested in increments of one percent (1%) in
one or more of the investment options designated by the Administrator, which may
include designated investment funds, specific investments or both. The
investment choices made available shall be sufficient to allow compliance with
section 404(c) of ERISA.

          (b)  Except as otherwise determined by the Administrator or provided
herein, Matching Contributions made with respect to Plan Years beginning on and
after January 1, 1999 must be invested in Common Stock until the beginning of
the fifth (5/th/) Plan Year following the Plan Year for which such contributions
are made. Thereafter, a Participant may designate the investment of the Matching
Contribution funds in accordance with the provisions of subsection (a) above.
Notwithstanding the preceding sentences in this subsection (b) and except as
otherwise provided below, the five-year restriction prescribed in this
subsection (b) shall not apply (i) following a Participant's Severance from
Service other than on account of a Layoff, (ii) effective on and after February
1, 2001, while a Participant is on a Layoff, or (iii) on or after January 1 of
the calendar year in which a Participant attains age 55. If a Participant or
former Participant is reemployed with an Employer following a Severance from
Service, including a Layoff, the five-year restriction prescribed in this
subsection (b) shall apply with respect to any Matching Contributions made on
and after such reemployment and with respect to any Matching Contributions made
before such reemployment that are invested in Common Stock as of the date of
reemployment.

          (c)  Except as otherwise determined by the Administrator or as
provided in paragraphs (1) through (3) below, amounts held in a Participant's
ESOP Contribution Account shall be invested in Common Stock.

               (1) Any Participant who has attained age 55 and completed a
Period of Participation of at least ten (10) years shall be permitted to direct
that up to twenty-five percent (25%) of the total number of shares of Common
Stock (rounded to the nearest whole integer) allocated to the Participant's ESOP
Contribution Account as of the December 31 immediately preceding each Plan Year
during the Qualified Election Period may be invested among the otherwise
available investment options under the Plan in accordance with the

<PAGE>
                                      -34-

provisions of subsection (a) above. With respect to a qualified Participant's
final diversification election, fifty percent (50%) is substituted for
twenty-five percent (25%) in determining the amount subject to the
diversification election. Any direction to diversify hereunder may be made
within 90 days after the close of each Plan Year during the Participant's
Qualified Election Period, as defined below. Any direction made during the
applicable 90-day period following any Plan Year may be revoked or modified at
any time during such 90-day period. The diversification of the ESOP Contribution
Account as provided herein shall be made through the sale by the Trustee of the
number of shares of Common Stock directed by the Participant. The amount that
may be invested among the otherwise available investment options under the Plan
shall be equal to the proceeds of such sale. Any such diversification shall be
implemented no later than the 180th day of the Plan Year in which the
Participant's direction is made. All such directions shall be in accordance with
any notice, rulings, or regulations or other guidance issued by the Internal
Revenue Service with respect to section 401(a)(28)(B) of the Code. For purposes
of this paragraph, the term "Qualified Election Period" shall mean the six (6)
Plan Year period beginning with the later of the Plan Year in which the
Participant attains age 55 or completes a Period of Participation of ten (10)
years.

               (2) Effective for Plan Years beginning on and after January 1,
2002, a Participant's right to diversify his ESOP Contribution Account, as
described in paragraph (1) above, shall extend beyond the end of the six (6)
year Qualified Election Period and the Participant shall be permitted to direct
that up to twenty-five percent (25%) of the total number of shares of Common
Stock (rounded to the nearest whole integer) allocated to the Participant's ESOP
Contribution Account as of the December 31 immediately preceding each Plan Year
may be invested among the otherwise available investment options under the Plan
in accordance with the provisions of subsection (a) above. The timing rules and
procedures described in paragraph (1) shall apply in the same manner to the
extended diversification period described in this paragraph (2) (with the
exception of the definition of the Qualified Election Period and the increased
percentage (50%) during the sixth year in the Qualified Election Period).

               (3) The investment restrictions described in subsection (c) shall
not apply (i) following a Participant's Severance from Service other than on
account of a Layoff or (ii) effective on and after February 1, 2001, while a
Participant is on a Layoff. If a Participant or former Participant is reemployed
with an Employer following a Severance from Service, including a Layoff, the
investment restrictions otherwise prescribed in subsection (c) shall apply to
any ESOP Contributions made on and after such reemployment and with respect to
any

<PAGE>

                                      -35-

ESOP Contributions made before such reemployment that are invested in Common
Stock as of the date of reemployment.

              (d)    Notwithstanding subsection (e) below, the Administrator
shall maintain a General Motors Class H Stock Fund ("Fund H") and Raytheon
Company Class A Stock Fund ("Fund I") as investment options under the Plan,
subject to the limitations prescribed in this subsection (d), for four (4)
complete Plan Years following the Effective Date; provided, however, that if at
any time prior to the expiration of such four (4) year period, the aggregate
fair market value of the assets invested in either Fund H or Fund I falls below
five percent (5%) of the highest fair market value of the assets invested in
Fund H or Fund I, respectively, the Administrator may, with six (6) months
written notice to affected Participants, eliminate Fund H or Fund I, as
applicable, as investment options under the Plan. Notwithstanding the foregoing,
the Administrator may eliminate one or both funds at any time if the
Administrator determines in good faith that such elimination is necessary under
applicable law (including without limitation the prudence requirements of
ERISA). When Fund H and Fund I are eliminated in accordance with this section
5.1(d), Participants with assets invested in Fund H or Fund I, as applicable,
shall direct the transfer of such assets to other funds available under the Plan
or, if no such election is made, the Administrator shall transfer such assets to
a low risk fixed income fund as determined by the Administrator in its
discretion. The only assets that may be invested in Fund H or Fund I are the
General Motors Class H Stock Fund and Raytheon Company Class A Stock Fund,
respectively, directly transferred to the Plan in connection with the mergers
identified in Section 1.1(b). A Participant may not direct that any other funds
in the Participant's Account be invested in Fund H or Fund I.

              (e)    In its discretion, the Administrator may from time to time
designate new funds and, where appropriate, preclude investment in existing
funds and provide for the transfer of Accounts invested in those funds to other
funds selected by the Participant or, if no such election is made, to a low risk
fixed income fund as determined by the Administrator in its discretion.

              (f)    Except as otherwise prescribed in subsections (b), (c) and
(d) above, a Participant's investment election will apply to the entire Account
of the Participant.

              (g)    In establishing rules and procedures under section 5.1, the
following shall apply:

                     (1)    Each Participant, Beneficiary or Alternate Payee
shall affirmatively elect to self-direct the investment of assets in his or her
Account, but such election may provide

<PAGE>

                                      -36-

for default investments in the absence of specific directions from such
Participant, Beneficiary or Alternate Payee.

              (2)    The investment directions of a Participant shall continue
to apply after that Participant's death or incompetence until the Beneficiary
(or, if there is more than one Beneficiary for that Account, all of the
Beneficiaries), guardian or other representatives provide contrary direction.

              (3)    The Administrator may decline to implement investment
designations if such investment, in the Administrator's judgment:

                     (A)    would result in a prohibited transaction under
section 4975 of the Code;

                     (B)    would generate income taxable to the Trust Fund;

                     (C)    would not be in accordance with the Plan and Trust;

                     (D)    would cause a Fiduciary to maintain the indicia of
ownership of any assets of the Trust Fund outside the jurisdiction of the
district courts of the United States other than as permitted by section 404(b)
of ERISA and Labor Reg.(S)2550.404(b)-1;

                     (E)    would jeopardize the Plan's tax qualified status
under the Code;

                     (F)    could result in a loss in excess of the amount
credited to the Account; or

                     (G)    would violate any other requirements of the Code or
ERISA.

              (4)    Except as otherwise prescribed in subsections (b), (c) and
(d) above, the Administrator may establish reasonable restrictions on the
frequency with which investment directions may be given, consistent with section
404(c) of ERISA.

              (5)    The Administrator may establish limits on the use of
brokers, investment counsel or other advisors that may be utilized, including
specifying that all investments must be made through a designated broker or
brokers.

              (6)    The Administrator may establish limits on the types of
investments that are permitted.

       (h)    Except as otherwise prescribed in subsections (b), (c) and (d)
above, the Administrator shall establish such rules and procedures as may be
advisable or necessary to carry out the provisions of this section, with such
rules and procedures being consistent with section 404(c) of ERISA.

<PAGE>

                                      -37-

              (i)    The Administrator shall establish such rules and procedures
as may be advisable or necessary to reasonably ensure that all transactions
involving the investment funds comply with all applicable laws, including the
securities laws.

       5.2    Change in Investment Allocation of Future Deferrals. Except as
otherwise prescribed in sections 5.1(b), (c) and (d), each Participant may elect
to change the investment allocation of future contributions effective as of the
first Trade Day subsequent to notice to the Recordkeeper by which it is
administratively feasible to make such change. Any changes must be made either
in increments of one percent (1%) of the Participant's Account or in a specified
whole dollar amount and must result in a total investment of one hundred percent
(100%) of the Participant's Account.

       5.3    Transfer of Account Balances Between Investment Funds. Except as
otherwise prescribed in sections 5.1(b), (c) and (d), each Participant may elect
to transfer all or a portion of the amount in his or her Account between
investment funds effective as of the first Trade Day following notice to the
Recordkeeper by which it is administratively feasible to carry out such
transfer. For investment transfers initiated by notice to the Recordkeeper
before March 1, 2002, in determining the amount of the transfer, the
Participant's Account shall be valued as of the close of business on the Trade
Day on which notice is received; provided, however, that in any case where the
notice is received after 4:00 p.m. Eastern Time (daylight or standard, whichever
is in effect on the date of the notice), the Account shall be valued as of the
close of business on the next Trade Day. For investment transfers initiated by
notice to the Recordkeeper after February 28, 2002, in determining the amount of
transfer, the Participant's Account shall be valued as of the Trade Day on which
the investment funds are sold or exchanged and shall be based on the value of
the investment funds at the time of such sale or exchange. Such transfers must
be made in either one percent (1%) increments of the entire Account or in a
specified amount in whole dollars and, as of the completion of the transfer,
must result in investment of one hundred percent (100%) of the Account.
Transfers shall be effected by notice to the Recordkeeper.

       5.4    Inability to Complete Investment Changes. Notwithstanding any
other provisions of this Plan to the contrary, if a Participant's investment
directions under the Plan cannot be completed on a particular day because of
market conditions or other circumstances, the Participant's investment
directions will be completed on the first Trade Day thereafter on which the
investment directions can be completed.

       5.5    Ownership Status of Funds. The Trustee shall be the owner of
record of the Plan assets. The Administrator shall have records maintained as of
the Valuation Date for each

<PAGE>

                                      -38-

investment option allocating a portion of the investment option to each
Participant who has elected that his or her Account be invested in such
investment option. The records shall reflect each Participant's portion of
Common Stock, Raytheon Company Class A common stock and General Motors Class H
common stock in cash and unitized shares of stock and shall reflect each
Participant's portion of all other investment options as may be designated by
the Administrator in a cash amount.

       5.6    Voting Rights and Tender or Exchange Offers

              (a)    Participants whose Accounts are invested in Common Stock or
Raytheon Company Class A common stock on the last business day of the second
month preceding the record date (the "Voting Eligibility Date") for any meeting
of stockholders have the right to instruct the Trustee as to voting at such
meeting. The number of votes is determined by dividing the value of the shares
in the Participant's Account by the closing price of the respective classes of
stock on the Voting Eligibility Date. If the Trustee receives instructions
within the specified time, the Trustee shall vote the shares in accordance with
the instructions. For Voting Eligibility Dates before January 1, 2002, if the
Trustee has not received instructions from a Participant as to voting of shares
within the specified time, then the Trustee shall not vote those shares. For
Voting Eligibility Dates after December 31, 2001, if the Trustee has not
received instructions from a Participant as to voting of shares within the
specified time, or if the Plan holds any unallocated shares, then the Trustee
shall vote those shares in the same proportion as the shares for which the
Trustee has received instructions are voted. If a Participant furnishes the
Trustee with a signed vote direction card without indicating a voting choice
thereon, the Trustee shall vote the Participant's shares as recommended by
management if so authorized under the terms of the vote direction card.

              (b)    Participants shall also have the right to accept or reject
any tender or exchange offer for the shares of Common Stock or Raytheon Company
Class A common stock that are allocated to their Accounts. If the Trustee
receives instructions within the specified time, the Trustee shall respond in
accordance with the instructions. If the Trustee has not received instructions
from a Participant within the specified time, then the Trustee shall not tender
or exchange those shares. For tender or exchange offers initiated after December
31, 2001, if the Plan holds any unallocated shares, then the Trustee shall
tender or exchange those shares in the same proportion as the shares for which
the Trustee has received instructions are tendered or exchanged.

<PAGE>

                                      -39-

              (c)    The Trustee shall vote (or tender or exchange) all combined
fractional shares of the respective classes of stock to the extent possible in
the same proportion as the shares which have been voted (or tendered or
exchanged) by each Participant.

              (d)    Any instructions as to voting (or tender or exchange)
received from an individual Participant shall be held in confidence by the
Trustee and shall not be divulged to the Adopting Employers or to any officer or
employee thereof or to any other person.

              (e)    The Trustee shall provide each Participant with voting,
tender or exchange rights described in this section 5.6 with the information
provided to other shareholders eligible to vote, tender or exchange such shares.

              (f)    Each Participant shall be deemed to be a "named fiduciary"
for purposes of any instructions provided by such Participant to the Trustee
regarding the exercise of voting rights and tender or exchange offers with
respect to the Common Stock or Raytheon Company Class A common stock that is
allocated to the Participant's Account and with respect to a proportionate
amount of any unallocated or unvoted shares.

       5.7    Allocation of Earnings.

              (a)    (1)    The Administrator, as of each Valuation Date, shall
adjust the amounts credited to the Accounts (including Accounts for persons who
are no longer Employees) so that the total of such Account balances equals the
fair market value of the Trust Fund assets as of such Valuation Date. Except as
otherwise provided herein, any changes in the fair market value of the Trust
Fund assets since the preceding Valuation Date shall be charged or credited to
each Account in the ratio that the balance in each such Account as of the
preceding Valuation Date bears to the balances in all Accounts as of that
Valuation Date with appropriate adjustments to reflect any distributions,
allocations or similar adjustments to such Account or Accounts since that
Valuation Date.

                     (2)    To the extent that separate investment funds are
established (as provided in section 5.1(a)), the adjustments required by
subsection (a)(1) shall be made by applying subsection (a)(1) separately for
each such investment fund so that any changes in the net worth of each such
investment fund are charged or credited to the portion of each Account invested
in such investment fund in the ratio that the portion of each such Account
invested in such investment fund as of the preceding Valuation Date (reduced by
any distributions made from that portion of such Account since that Valuation
Date) bears to the total amount credited to such investment funds as of that
Valuation Date (reduced by distributions made from such investment fund since
that Valuation Date).

<PAGE>
                                      -40-

                     (3)    Interim valuations, in accordance with the foregoing
procedure, may be made at such time or times as the Administrator directs.

              (b)    The Administrator may, in its sole discretion, direct the
Trustee to segregate and separately invest any Trust Fund assets, including but
not limited to, any Trust Fund assets that are attributable to cash dividends on
Common Stock and Raytheon Company Class A common stock pending distribution or
allocation of such assets in accordance with section 8.13. If any assets are
segregated in this fashion, the earnings or losses on such assets shall be
determined apart from other Trust assets and shall be adjusted on each Valuation
Date, or at such other times as the Administrator deems necessary, in accordance
with this section.

<PAGE>

                                      -41-

                                   ARTICLE VI

                                     Vesting

       6.1    Elective Deferral, Employee After-Tax Contribution, Rollover
Contribution, Qualified Nonelective Contribution, Employer Contribution and ESOP
Contribution Accounts. Except as otherwise provided in Exhibit A to this Plan,
each Participant shall have a nonforfeitable right to all amounts in the
Participant's Elective Deferral, Employee After-Tax Contribution, Rollover
Contribution, Qualified Nonelective Contribution, Employer Contribution and ESOP
Contribution Accounts.

       6.2    Matching Contribution Account.

              (a)    Except as otherwise provided in Exhibit A to this Plan,
each Participant who performs an Hour of Service on or after January 1, 1999,
shall have a nonforfeitable right to his or her entire Account, including the
Participant's Matching Contribution Account.

              (b)    Each Participant who does not perform an Hour of Service on
or after January 1, 1999 shall have a nonforfeitable right to his or her
Matching Contribution Account in accordance with the terms of the Plan as in
effect before January 1, 1999 (or, if more favorable, under the terms of the
transferee plan in the case of a direct transfer of assets to the Plan in
accordance with sections 1.1(b) and 4.8(c)). For this purpose, before January 1,
1999, the Plan provided that each Participant would have a nonforfeitable right
to his or her Matching Contribution Account upon the earliest of:

                     (1)    the Participant's completion of a Period of Service
of five (5) years;

                     (2)    the Participant's completion of a Period of
Participation of three (3) years;

                     (3)    the Participant's Retirement, death while an
Employee, Disability or attainment of Normal Retirement Age; or

                     (4)    in the case of a Participant who formerly
participated in the Raytheon Salaried Savings and Investment Plan (10011) and
the Raytheon California Hourly Savings and Investment Plan (10012), the
Participant's Layoff or Severance from Service due to Qualified Military
Service.

              (c)    Notwithstanding subsection (b) above, a Sonobuoy Product
Line Participant shall have a nonforfeitable right to his or her entire Account,
including the Participant's Matching Contribution Account (to the extent
applicable). For purposes of this subsection (c), a "Sonobuoy Product Line
Participant" shall mean a Participant who immediately

<PAGE>

                                      -42-

prior to December 18, 1998 was an Employee of the Company's Sonobuoy Product
Line Division and who, on such date, became an employee of Undersea Sensor
Systems, Inc. in connection with its acquisition of certain assets used in the
Company's Sonobuoy Product Line Division. The Sonobuoy Product Line Participants
shall no longer be eligible to participate in the Plan on or after December 18,
1998.

                  (d) Notwithstanding subsection (b) above, a Participant shall
have a nonforfeitable right to any dividends paid on Common Stock and Raytheon
Company Class A common stock after December 31, 2000, with respect to which the
Participant was provided an election in accordance with section
404(k)(2)(A)(iii) of the Code and section 8.13 of this Plan. Such dividends
shall be nonforfeitable without regard to whether the Participant has a
nonforfeitable right to the Common Stock and Raytheon Company Class A common
stock with respect to which the dividend is paid.

                  (e) For purposes of this section 6.2, all Hours of Service as
a Leased Employee, if any, shall be taken into account for purposes of
determining a Participant's nonforfeitable right to his or her Matching
Contribution Account, even though Leased Employees are not eligible to
participate in the Plan.

         6.3      Forfeitures.

                  (a) In the event that a Participant incurs a Severance from
Service before attaining a nonforfeitable right to his or her entire Account,
the portion of the Account that is forfeitable will be forfeited as of the first
day of the month immediately following the earliest of: (i) the date on which
the Participant incurs a Period of Severance of five (5) consecutive years; (ii)
death; or (iii) the date on which the Participant's Elective Deferral Account is
distributed in accordance with ARTICLE VIII. Forfeitures will be used to reduce
future contributions of the Adopting Employers to the Plan.

                  (b) If, in connection with his or her Severance from Service,
a Participant received a distribution of a portion of his or her entire Account
when he or she did not have a nonforfeitable right to his or her entire Account,
the portion of his or her Account that was forfeited, unadjusted by any
subsequent gains or losses, shall be restored if he or she again becomes an
Employee before incurring a Period of Severance of five (5) consecutive years.

         6.4      Break in Service Rules

                  (a) Periods of Service. In determining the length of a Period
of Service, the Administrator shall include all Periods of Service, except the
following Periods of Service shall not be taken into account:

<PAGE>

                                      -43-

                     (1)    in the case of a Participant who has never had a
vested account balance, the Period of Service before any Period of Severance
which equals or exceeds five (5) consecutive years; and

                     (2)    in the case of a Participant who has had a vested
account balance and who has incurred a Period of Severance which equals or
exceeds five (5) years, the Period of Service after such Period of Severance
shall not be taken into account for purposes of determining the nonforfeitable
interest of such Participant in the Matching Contributions allocated to his or
her Account before such Period of Severance.

              (b)    Periods of Severance. In determining the length of a Period
of Service, the Administrator shall include any period of time beginning on an
Employee's Severance from Service Date and ending on the date on which he or she
is next credited with an Hour of Service, provided that such Hour of Service is
credited within the twelve- (12) consecutive month period following such
Severance from Service Date.

              (c)    Other Periods. In making the determinations described in
subsections (a) and (b) of this section, the second, third, and fourth
consecutive years of a Layoff (from the first anniversary of the last day paid
to the fourth anniversary of the last day paid) and any period in excess of one
(1) year of an Authorized Leave of Absence shall be regarded as neither a Period
of Service nor a Period of Severance.

<PAGE>

                                      -44-

                                   ARTICLE VII

                             In-Service Withdrawals

       7.1    Elective Deferrals and Qualified Nonelective Contributions.

              (a)    Subject to the terms and conditions prescribed in section
7.6, a Participant may withdraw all or a portion of his or her Elective Deferral
Account or Qualified Nonelective Contribution Account either (1) on or after
attainment of age fifty-nine and one-half (59 1/2), or (2) in the event of a
hardship.

              (b)    In order to be entitled to a hardship withdrawal under this
section, a Participant must satisfy the requirements of both subsection (c) and
subsection (d). Whether a Participant is entitled to a withdrawal under this
section is to be determined by the Administrator in accordance with
nondiscriminatory and objective standards.

              (c)    (1) A Participant will be deemed to have experienced an
immediate and heavy financial need necessary to satisfy the requirements of this
subsection if the withdrawal is on account of:

                            (A)    medical expenses described in section 213(d)
of the Code incurred by the Participant, the Participant's spouse or any
dependents of the Participant;

                            (B)    the purchase (excluding mortgage payments) of
a principal residence of the Participant;

                            (C)    payment of tuition for the next twelve (12)
months of post-secondary education for the Participant or his or her spouse,
children or dependents; or

                            (D)    the need to prevent the eviction of the
Participant from his or her principal residence or the foreclosure on the
mortgage of the Participant's principal residence.

              (d)    (1) A withdrawal under this subsection will be deemed
necessary to satisfy an immediate and heavy financial need of the Participant if
it satisfies the requirements of this subsection. To the extent the amount of
the withdrawal would be in excess of the amount required to relieve the
financial need of the Participant or to the extent such need may be satisfied
from other resources that are reasonably available to the Participant, such
withdrawal shall not satisfy the requirements of this subsection. For purposes
of this subsection, a Participant's resources shall be deemed to include those
assets of his or her spouse or minor children that are reasonably available to
the Participant.

<PAGE>

                                     -45-

             (2) A withdrawal may be treated as necessary to satisfy a financial
need if the Administrator reasonably relies upon the Participant's
representation that the need cannot be relieved:

                 (A) through reimbursement or compensation by insurance or
otherwise;

                 (B) by reasonable liquidation of the Participant's assets to
the extent such liquidation would not itself cause an immediate and heavy
financial need;

                 (C) by cessation of Elective Deferrals under the Plan for at
least twelve (12) months after receipt of the hardship withdrawal; or

                 (D) by other distributions or nontaxable (at the time of the
loan) loans from plans maintained by the Adopting Employers or by any other
employer or by borrowing from commercial sources on reasonable commercial terms.

         (e) If a Participant receives a withdrawal for reasons of financial
hardship, the Participant's Elective Deferrals shall be reduced to four percent
(4%) (or such lower percentage as the Participant shall thereafter designate),
if in excess thereof as of the date of the distribution, and shall not be
increased (i) for distributions before January 1, 2001, during the twelve (12)
months immediately subsequent to the date of distribution; (ii) for
distributions after December 31, 2000 and before January 1, 2002, during the six
(6) months immediately subsequent to the date of distribution, or until January
1, 2002, if later; and (iii) for distributions after December 31, 2001, during
the six (6) months immediately subsequent to the date of distribution.

     7.2 Employee After-Tax Contributions. Subject to the terms and conditions
prescribed in section 7.6, a Participant may withdraw all or a portion of his or
her Employee After-Tax Contribution Account.

     7.3 Matching Contributions and Employer Contributions. Subject to the terms
and conditions prescribed in section 7.6, a Participant may withdraw all or a
portion of his or her Matching Contribution Account or Employer Contribution
Account either (1) on or after attainment of age fifty-nine and one-half (59
1/2), or (2) after completion of a Period of Participation of five (5) years or
more.

     7.4 Rollover Contributions. Subject to the terms and conditions prescribed
in section 7.6, a Participant may withdraw all or a portion of his or her
Rollover Contribution Account.

<PAGE>

                                     -46-

     7.5 ESOP Contributions. Subject to the terms and conditions prescribed in
section 7.6, a Participant may withdraw all or a portion of his or her ESOP
Contribution Account on or after attainment of age fifty-nine and one-half (59
1/2).

     7.6 General Terms and Conditions. All in-service withdrawals are subject to
the following terms and conditions:

         (a) In-service withdrawals will not be permitted if they are less than
(i) before January 1, 2002 five hundred dollars ($500), and (ii) after December
31, 2001 two hundred and fifty dollars ($250).

         (b) In determining the amount of any in-service withdrawal, the
Participant's Account shall be valued as of the close of business on the Trade
Day on which notice is received; provided, however, that in any case where the
notice is received after 4:00 p.m. Eastern Time (daylight or standard, whichever
is in effect on the date of the call), the Account shall be valued as of the
close of business on the next Trade Day.

         (c) Payment of the amount withdrawn will be made as soon as
administratively feasible after the effective date of the withdrawal.

         (d) In-service withdrawals from a Participant's Account will generally
be made in cash. However, in-service withdrawals from Accounts invested in
Common Stock, General Motors Class H common stock or Raytheon Company Class A
common stock will be made in cash or stock (with cash for fractional or unissued
shares) as elected by the Participant.

         (e) Funds for in-service withdrawals will be taken on a pro-rata basis
against the Participant's investment balances in his or her Account.

         (f) In-service withdrawals may not be redeposited in the Plan.

         (g) The Administrator may adopt such other rules and procedures as it
deems necessary, in its sole discretion, to properly administer the in-service
withdrawal provisions in this ARTICLE.

<PAGE>

                                     -47-

                                  ARTICLE VIII

                            Distribution of Benefits

     8.1   General.

           (a) Except as otherwise provided in Exhibit B to this Plan (or
otherwise required by section 4.8(b)), all benefits payable under this Plan
shall be paid in the manner and at the times specified in this ARTICLE.

           (b) All payment methods and distributions shall comply with the
requirements of sections 401(a)(4) and 401(a)(9) of the Code and the regulations
thereunder and, if necessary, shall be interpreted to so comply. All
distributions shall comply with the incidental death benefit requirement of
section 401(a)(9)(G) of the Code. Distributions shall comply with the
regulations under section 401(a)(9) of the Code, including Treas. Reg.
ss.1.401(a)(9)-2. The provisions of the Plan reflecting section 401(a)(9) of the
Code override any distribution provisions in the Plan inconsistent with section
401(a)(9) of the Code.

     8.2   Commencement of Benefits.

           (a) A Participant (or Beneficiary) shall be entitled to a
distribution of the nonforfeitable portion of his or her Account upon Severance
from Service (or if earlier, an event described in subsections (e)(3), (4) and
(5)).

           (b) Except as otherwise provided in this section 8.2, payment of
benefits to a Participant (or Beneficiary) shall commence within a reasonable
period of time following the Participant's Severance from Service (or if
earlier, an event described in subsections (e)(1), (3), (4) and (5)).

           (c) If the value of the nonforfeitable portion of the Participant's
Account exceeds the maximum amount prescribed in section 411(a)(11) of the Code,
then payment to the Participant shall not commence without the Participant's
written consent, except as otherwise required by Section 8.2(f). Such written
consent must be obtained no more than ninety (90) days before the commencement
of the distribution. For distributions made after December 31, 2001, the value
of the nonforfeitable portion of the Participant's Account shall be determined
without regard to that portion of the Account that is attributable to rollover
contributions (and the earnings allocable thereto) within the meaning of
sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the
Code. Notwithstanding the preceding provisions of this subsection (c), all
distributions to a Participant's Beneficiary shall commence within a reasonable
period of time following the Participant's death (no consent of the Beneficiary
is required).

<PAGE>

                                     -48-

     (d) Unless a Participant elects otherwise, distribution to the Participant
shall commence no later than sixty (60) days after the close of the Plan Year in
which the latest of the following events occurs:

         (1) attainment by the Participant of Normal Retirement Age;

         (2) the tenth (10th) anniversary of the date on which Participant
commenced participation in the Plan; or

         (3) Participant's Severance from Service.

     (e) Distribution of the nonforfeitable portion of a Participant's Account
shall generally commence in accordance with the general provisions of this
section 8.2, but in no event before the earliest of the following events:

         (1) For distributions before January 1, 2002, the Participant's
separation from service within the meaning of section 401(k)(2)(B)(i)(I) of the
Code (as then effective). For distributions after December 31, 2001, the
Participant's severance from employment within the meaning of section
401(k)(2)(B)(i)(I) of the Code (as then effective). The "severance from
employment" standard effective after December 31, 2001 shall apply to any
distributions after such date regardless of when the severance from employment
occurred.

         (2) The Participant's attainment of age fifty-nine and one-half
(59-1/2).

         (3) The termination of the Plan without establishment or maintenance of
another defined contribution plan (other than an employee stock ownership plan).

         (4) For distributions before January 1, 2002, the disposition of
substantially all of the assets used by the Employer in a trade or business of
the Employer, but only with respect to an Employee who continues employment with
the entity acquiring such assets.

         (5) For distributions before January 1, 2002, the disposition of the
Employer's interest in a subsidiary, but only with respect to an Employee who
continues employment with such subsidiary.

     (f) A Participant who has attained age seventy and one-half (70 1/2) and is
subject to the mandatory distribution requirements of section 401(a)(9) of the
Code shall receive a lump sum distribution of his or her entire Account at the
time distributions must commence in order to comply with such requirements. If
additional amounts are allocated to such Participant's Account following such
lump sum distribution, additional lump sum distributions of his or her entire
Account shall be made at such times any mandatory distributions are required to
comply with section 401(a)(9) of the Code. Such payments shall be made
notwithstanding any contrary provisions of the Plan or election made by such
Participant.

<PAGE>

                                     -49-

          (g) If a Participant dies before the time when distribution is
considered to have commenced in accordance with applicable regulations, then any
remaining nonforfeitable portion of the Participant's Account shall be
distributed within five (5) years after the Participant's death. If a
distribution is considered to have commenced in accordance with the applicable
regulations before the Participant's death, the remaining nonforfeitable portion
of the Participant's Account shall be distributed at least as rapidly as under
the method of distribution being used as of the date of the Participant's death.

     8.3  Form of Distribution.

          (a) Distributions under the Plan shall be made only in the form of a
single, lump-sum payment of the entire nonforfeitable portion of the
Participant's Account. Notwithstanding the preceding sentence, during the period
beginning January 1, 1999 and ending September 30, 1999, Participants who are
otherwise entitled to receive a distribution under the Plan may elect to receive
separate, lump-sum payments of the nonforfeitable portion of the Participant's
ESOP Contribution Account and the nonforfeitable portion of the Participant's
remaining Account.

          (b) Distribution of the nonforfeitable portion of the Participant's
Account that is invested in Common Stock, Raytheon Company Class A common stock
(if any) or General Motors Class H common stock (if any) shall be made in cash
or in-kind, at the election of the Participant (or Beneficiary). All other
distributions under the Plan shall be made in cash (or cash equivalent) except
to the extent that a Participant requests that the distribution be made in the
form of Common Stock.

     8.4 Determination of Amount of Distribution. In determining the amount of
any distribution hereunder, the nonforfeitable portion of a Participant's
Account shall be valued as of the close of business on the Trade Day on which
notice is received; provided, however, that in any case where the telephone
notice is received after 4:00 p.m. Eastern Time (daylight or standard, whichever
is in effect on the date of the call), the Account shall be valued as of the
close of business on the next Trade Day.

     8.5  Direct Rollovers.

          (a) A Participant may elect that all or any portion of a distribution
that would otherwise be paid as an Eligible Rollover Distribution shall instead
be transferred as a Direct Rollover.

          (b) The Administrator shall determine and apply rules and procedures
as it deems reasonable with respect to Direct Rollovers. The Administrator may
change such rules

<PAGE>
                                      -50-

and procedures from time to time and shall not be bound by any previous rules
and procedures it has applied.

     (c) The following terms shall have the meanings specified:

         (1) Direct Rollover. An available distribution that is paid directly to
an Eligible Retirement Plan for the benefit of the distributee.

         (2) Distributee. A Participant or former Participant. In addition, the
Participant's or former Participant's Surviving Spouse or former spouse who is
the Alternate Payee under a Qualified Domestic Relations Order, as defined in
section 414(p) of the Code, are Distributees with regard to the interest of the
spouse or former spouse.

         (3) Eligible Retirement Plan. An individual retirement account
described in section 408(a) of the Code, an individual retirement annuity (other
than an endowment contract) described in section 408(b) of the Code, a qualified
trust described in section 401(a) of the Code if such qualified trust is part of
a plan that permits acceptance of Direct Rollovers or an annuity plan described
in section 403(a) of the Code. In the case of a Direct Rollover for the benefit
of the spouse or former spouse of a Participant, the term "Eligible Retirement
Plan" shall only include an individual retirement account described in section
408(a) of the Code and an individual retirement annuity (other than an endowment
contract) described in section 408(b) of the Code. Notwithstanding the preceding
provisions of this subsection (3), for distributions made after December 31,
2001, the following modifications shall apply: (1) the term "Eligible Retirement
Plan" shall also include an annuity contract described in section 403(b) of the
Code and an eligible plan under section 457(b) of the Code which is maintained
by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan; and (2) in the
case of a Direct Rollover for the benefit of the surviving spouse of a
Participant, or a spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the Code,
the term "Eligible Retirement Plan" shall include all of the plans and
arrangements otherwise described in this subsection (3).

         (4) Eligible Rollover Distribution. Any distribution under the Plan to
a Participant, a Participant's spouse or a Participant's former spouse, except
for the following:

             (A) Any distribution to the extent the distribution is required
under section 401(a)(9) of the Code.

             (B) The portion of any distribution that is not includable in gross
income (determinedwithout regard to the exclusion for net unrealized
appreciation

<PAGE>

                                      -51-

described in section 402(e)(4) of the Code). Notwithstanding the preceding
sentence, for distributions made after December 31, 2001, the term "Eligible
Rollover Distribution" shall include the portion of a distribution that consists
of after-tax employee contributions which are not includable in gross income;
provided, that such after-tax employee contributions can only be transferred to
an individual retirement account or annuity described in section 408(a) or (b)
of the Code, or to a qualified defined contribution plan described in section
401(a) or 403(a) of the Code that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includable in gross income and the portion of such
distribution which is not so includable.

             (C) Returns of elective deferrals described in Treas.Reg.(S).1.415-
6(b)(6)(iv) that are returned as a result of the limitations under section 415
of the Code.

             (D) Corrective distributions of excess contributions and excess
deferrals under qualified cash or deferred arrangements as described in Treas.
Reg.(S).1.401(k)-1(f)(4) and(S).1.402(g)-1(e)(3), respectively, and corrective
distributions of excess aggregate contributions as described in Treas.
Reg.(S).1.401(m)-1(e)(3), together with the income allocable to these corrective
distributions.

             (E) Loans treated as distributions under section 72(p) of the Code
and not excepted by section 72(p)(2) of the Code.

             (F) Loans in default that are deemed distributions.

             (G) Dividends paid on employer securities as described in section
404(k) of the Code.

             (H) The costs of life insurance coverage.

             (I) For distributions before January 1, 2002, any hardship
distribution described in section 401(k)(2)(B)(i)(IV); and for distributions
after December 31, 2001, any distribution which is made upon hardship of the
Participant.

             (J) Similar items designated by the Internal Revenue Service in
revenue rulings, notices, and other guidance of general applicability.

     8.6 Notice and Payment Elections.

         (a) The Administrator shall provide Participants or other Distributees
of Eligible Rollover Distributions with a written notice designed to comply with
the requirements of section 402(f) of the Code. Such notice shall be provided
within a reasonable period of time before making an Eligible Rollover
Distribution.

         (b) Any elections concerning the payment of benefits under this ARTICLE
shall be made on a form prescribed by the Administrator. The Participant or
other Distributee

<PAGE>
                                      -52-

shall submit a completed form to the Administrator at least thirty (30) days
before payment is scheduled to commence, unless the Administrator agrees to a
shorter time period. Any election made under this section shall be revocable
until thirty (30) days before payment is scheduled to commence.

            (c) An election to have payment made in a Direct Rollover shall only
be valid if the Participant or other Distributee provides adequate information
to the Administrator for the implementation of such Direct Rollover and such
reasonable verification as the Administrator may require that the transferee is
an Eligible Retirement Plan.

            8.7 Qualified Domestic Relations Orders.

                (a) Notwithstanding any contrary provision of the Plan, payments
shall be made in accordance with any judgment, decree or order determined to be
a Qualified Domestic Relations Order.

                (b) (1) If the Plan receives a Domestic Relations Order, the
Administrator shall promptly notify the Participant and each Alternate Payee of
the receipt of such order and of the Plan's procedures for determining whether
such order is a Qualified Domestic Relations Order. The Administrator shall,
within a reasonable period after receipt of such order, determine whether it is
a Qualified Domestic Relations Order and notify the Participant and each
Alternate Payee of that determination.

                    (2) During any period in which the issue of whether a
Domestic Relations Order is a Qualified Domestic Relations Order is being
determined, the Administrator shall separately account for the amounts that
would have been payable to the Alternate Payee during such period if the order
had been determined to be a Qualified Domestic Relations Order.

                (c) (1) A Domestic Relations Order meets the requirements of
this subsection only if such order clearly specifies the following:

                        (A) the name and last known mailing address (if any) of
the Participant and the name and mailing address of each Alternate Payee covered
by the order;

                        (B) the amount or the percentage of the Participant's
benefits to be paid by the Plan to each such Alternate Payee or the manner in
which such amount or percentage is to be determined;

                        (C) the number of payments or period to which such order
applies; and

                        (D) each plan to which such order applies.

<PAGE>

                                      -53-

                    (2) A Domestic Relations Order meets the requirements of
this subsection only if such order does not:

                        (A)  require the Plan to provide any type or form of
benefit or any option not otherwise provided under the Plan;

                        (B)  require the Plan to provide increased benefits
(determined on the basis of actuarial value); and

                        (C)  does not require the payment of benefits to an
Alternate Payee that is required to be paid to another Alternate Payee under
another order previously determined to be a Qualified Domestic Relations Order.

             (d)    A domestic relations order shall not be treated as failing
to meet the requirements of section 8.7(c)(2)(A) solely because such order
requires that payment of benefits be made to an Alternate Payee:

                    (1) in the case of any payment before a Participant has
separated from service, on or after the date on which the Participant attains
(or would have attained) the Earliest Retirement Date;

                    (2) as if the Participant had retired on the date on which
such payment is to begin under such order (but taking into account only the
present value of the benefits actually accrued and not taking into account the
present value of any employer subsidy for early retirement); and

                    (3) in any form in which such benefits may be paid under the
Plan to the Participant (other than in the form of a qualified joint and
survivor annuity with respect to the Alternate Payee and his or her subsequent
spouse).

             (e)    A domestic relations order shall not be treated as failing
to meet the requirements of section 8.7(c)(2)(A) solely because such order
requires that payment of benefits be made to an Alternate Payee at a date before
the Participant is entitled to receive a distribution. Such distribution shall
be made to such Alternate Payee notwithstanding any contrary provision of the
Plan.

             (f)    The following terms shall have the meanings specified:

                    (1) Alternate Payee. Any spouse, former spouse, child or
other dependent of a Participant who is recognized by a Domestic Relations Order
as having a right to benefits under the Plan with respect to such Participant.

                    (2) Domestic Relations Order. A judgment, decree or order
relating to child support, alimony or marital property rights, as defined in
section 414(p)(1)(B) of the Code.

<PAGE>

                                      -54-

                    (3) Earliest Retirement Date. The earlier of:

                        (A)  the date on which the Participant is entitled to a
distribution under the Plan; or

                        (B)  the later of:

                             (i)     the date the Participant attains age fifty
(50); or

                             (ii)    the earliest date on which the Participant
could begin receiving benefits under the Plan if the Participant separated from
service.

                    (4) Qualified Domestic Relations Order. A Domestic Relations
Order that satisfies the requirements of subsection (c) and section 414(p)(1)(A)
of the Code.

                (g) If an Alternate Payee entitled to payment under this section
 is the spouse or former spouse of a Participant and payment will otherwise
be made in an Eligible Rollover Distribution, then such spouse or former spouse
may elect that all, or any portion, of such payment shall instead be transferred
as a Direct Rollover. Such Direct Rollover shall be governed by the requirements
of section 8.5.

                (h) If a Domestic Relations Order directs that payment be made
to an Alternate Payee before the Participant's Earliest Retirement Date and such
Domestic Relations Order otherwise qualifies as a Qualified Domestic Relations
Order, then the Domestic Relations Order shall be treated as a Qualified
Domestic Relations Order and such payment shall be made to the Alternate Payee,
even though the Participant is not entitled to receive a distribution under the
Plan because he or she continues to be an Employee of the Employer.

                (i) This section shall be interpreted and administered in
accordance with section 414(p) of the Code.

                (j) Effective on and after February 1, 2001, except as otherwise
provided in a Qualified Domestic Relations Order, all distributions to an
Alternate Payee shall commence within a reasonable period of time following the
determination that the Domestic Relations Order is a Qualified Domestic
Relations Order.

       8.8      Designation of Beneficiary.

                (a)     A Participant may designate a Beneficiary (including
successive or contingent Beneficiaries) in accordance with this section 8.8.
Such designation shall be on a form prescribed by the Administrator, may include
successive or contingent Beneficiaries, shall be effective upon receipt by the
Administrator and shall comply with such additional conditions and requirements
as the Administrator shall prescribe. The interest of any person as Beneficiary
shall automatically cease on his or her death and any further payments from the
Plan shall be made to the next successive or contingent Beneficiary.

<PAGE>
                                      -55-

         (b) A Participant may change his or her Beneficiary designation from
time to time, without the consent or knowledge of any previously designated
Beneficiary, by filing a new Beneficiary designation form with the Administrator
in accordance with subsection (a).

         (c) If a Participant dies without a designated Beneficiary surviving,
the person or persons in the following class of successive beneficiaries
surviving, any testamentary devise or bequest to the contrary notwithstanding,
shall be deemed to be the Participant's Beneficiary: the Participant's (1)
spouse, (2) children and issue of deceased children by right of representation,
(3) parents, (4) brothers and sisters and issue of deceased brothers and sisters
by right of representation, or (5) executors or administrators. If no
Beneficiary can be located during a period of seven (7) years from the date of
death, the Participant's Account shall be treated in the same manner as a
forfeiture under section 6.3(a).

         (d) Notwithstanding the foregoing provisions of this section, if a
Participant is married at the time of his or her death, such Participant shall
be deemed to have designated his or her surviving spouse as Beneficiary, unless
such Participant has filed a Beneficiary designation under subsection (a) and
such spouse has consented in writing to the election (acknowledging the effect
of the election and specifically acknowledging the nonspouse Beneficiary) and
such consent was witnessed by either the Administrator (or its delegate) or a
notary public. Such consent shall not be required if the Participant does not
have a spouse or the spouse cannot be located. Such consent shall not be
required if the Participant is legally separated from his or her spouse or the
Participant has been abandoned (under applicable local law) and the Participant
has a court order to such effect, unless a Qualified Domestic Relations Order
provides otherwise. If the Participant's spouse is legally incompetent to give
consent, the spouse's legal guardian (even if the guardian is the Participant)
may give consent.

    8.9  Lost Participant or Beneficiary.

         (a) All Participants and Beneficiaries shall have the obligation to
keep the Administrator informed of their current address until such time as all
benefits due have been paid.

         (b) If any amount is payable to a Participant or Beneficiary who
cannot be located to receive such payment, such amount may, at the discretion of
the Administrator, be forfeited; provided, however, that if such Participant or
Beneficiary subsequently claims the forfeited amount, it shall be reinstated and
paid to such Participant or Beneficiary. Such reinstatement may, in the
Administrator's sole discretion, be made from contributions by one or more
Adopting Employers, forfeitures or Trust earnings, and shall be treated as a
special allocation that supersedes the normal allocation rules.

<PAGE>
                                      -56-

         (c) If the Administrator has not, after due diligence, located a
Participant or Beneficiary who is entitled to payment within three (3) years
after the Participant's Severance from Service, then, at the discretion of the
Administrator, such person may be presumed deceased for purposes of this Plan.
Any such presumption of death shall be final, conclusive and binding on all
parties.

    8.10 Payments to Incompetents. If a Participant or Beneficiary entitled to
receive any benefits hereunder is adjudicated to be legally incapable of giving
valid receipt and discharge for such benefits, the benefits may be paid to the
duly authorized personal representative of such Participant or Beneficiary.

    8.11 Offsets. Any transfers or payments made from a Participant's Account
to a person other than the Participant pursuant to the provisions of this Plan
shall reduce the Participant's Account and offset any amounts otherwise due to
such Participant. Such transfers or payments shall not be considered a
forfeiture for purposes of the Plan.

    8.12 Income Tax Withholding. To the extent required by section 3405 of the
Code, distributions and withdrawals from the Plan shall be subject to federal
income tax withholding.

    8.13 Common Stock Dividend Distributions. In accordance with section 404(k)
of the Code, effective on and after August 1, 2000, cash dividends on Common
Stock and Raytheon Company Class A common stock may be distributed to
Participants and Beneficiaries no later than ninety (90) days after the close of
the Plan Year in which the dividends are paid. With respect to any dividends
paid after July 31, 2000 and before January 1, 2002, the dividends shall be
distributed to those Participants who elect to have such dividends distributed.
With respect to any dividends paid after December 31, 2001, and any dividends
paid during calendar year 2001 which a Participant did not elect to have
distributed in 2001, each Participant shall be provided with an election under
section 404(k)(2)(A)(iii) of the Code, as amended by the Economic Growth and Tax
Relief Reconciliation Act of 2001 ("EGTRRA"), that is intended to permit such
dividends to qualify as "applicable dividends" under section 404(k)(2) of the
Code, as amended by EGTRRA, for taxable years of the Company beginning on or
after January 1, 2002.

    8.14 Put Option and Restrictions on Common Stock.

         (a) Any Common Stock or Raytheon Company Class A common stock
     (collectively referred to in this section 8.14 as "common stock")
     distributed under this Plan shall be subject to a put option if the common
     stock, at the time of distribution, is not then readily tradable on an
     established market, as defined for purposes of section 409(h) of the Code.
     The put option shall permit the common stock to be put to the Company at
     its fair market value. The

<PAGE>
                                      -57-

put option shall be exercisable at any time during the sixty (60) day period
commencing on the date of distribution of the common stock. If the distributee
does not exercise the put option within such sixty (60) day period, the put
option will temporarily lapse. After the close of the Company's taxable year in
which such temporary lapse occurs and following a determination of the fair
market value of such common stock as of the end of that taxable year, the
Company shall notify the distributee of such fair market value. The distributee
shall then have the right to exercise the put option at any time during the
sixty (60) day period following such notice. If the distributee does not then
exercise the put option, such common stock will cease to be subject to the put
option. Payment upon exercise of the put option shall be made or commence no
later than thirty (30) days after exercise and, in the discretion of the
Company, shall be in a lump sum or in substantially equal periodic installments
(not less frequently than annually) which shall extend over a period not to
exceed five (5) years from the date of exercise, with interest at a reasonable
rate, determined by the Company, on the unpaid balance; provided, however, that
if the common stock was not part of a distribution of the entire Account of the
Participant within one taxable year of the recipient, payment must be made in a
lump sum. If payment upon exercise of the put option is to be made by the
Company in installments, the Company shall deliver to the distributee its
promissory note which provides to the distributee the right to require full
payment if the Company defaults in the payment of a scheduled installment. The
Company shall also deliver to the distributee adequate security for the
outstanding amount of the promissory note.

         (b) Except as provided in subsection (a) or as otherwise required by
law, no common stock acquired with the proceeds of an Acquisition Loan may be
subject to a put, call or other option, or buy-sell or similar arrangements,
while held by or when distributed from the Plan.

         (c) The provisions of this section 8.14 are nonterminable, and shall
continue notwithstanding the repayment of any Acquisition Loan the proceeds of
which were used to acquire common stock and notwithstanding the fact that the
Plan ceases to be an employee stock ownership plan.

<PAGE>
                                      -58-

                                   ARTICLE IX

                                      Loans

    9.1  Availability of Loans. Participants may borrow against all or a portion
of the nonforfeitable balance in the Participant's Account, subject to the
limitations set forth in this ARTICLE. Loans will be made available to all
Participants on a reasonably equivalent basis and will not be made available to
Highly Compensated Employees in an amount greater than the amount made available
to other employees. Participants who have incurred a Severance from Service will
not be eligible for a Plan loan. Notwithstanding the preceding sentence, a
Participant who is not entitled to a distribution of the entire nonforfeitable
portion of his or her Account because of the qualified plan distribution rules
applicable to the Plan and who either (i) transferred employment directly from
the Employer to Computer Sciences Corporation or Tyco International (or one of
their affiliates), or (ii) experienced a Severance from Service (or is otherwise
no longer an Employee of an Employer) on or after January 1, 2001, will remain
eligible for a Plan loan until the Participant becomes entitled to a
distribution of the entire nonforfeitable portion of his or her Account under
such rules, as determined in the sole discretion of the Administrator.

    9.2  Minimum Amount of Loan. No loan of less than five hundred dollars
($500) will be permitted.

    9.3  Maximum Amount of Loan. No loan in excess of fifty percent (50%) of the
Participant's nonforfeitable Account balance will be permitted. In addition,
limits imposed by the Internal Revenue Code and any other requirements of
applicable statute or regulation will be applied. Under the current requirements
of the Internal Revenue Code, a loan cannot exceed the lesser of one-half (1/2)
of the value of the Participant's nonforfeitable Account balance or fifty
thousand dollars ($50,000) reduced by the excess of (a) the highest outstanding
balance of loans from the Plan during the one-year period ending on the day
before the date on which such loan was made over (b) the outstanding balance of
loans from the Plan on the date on which such loan was made.

    9.4  Effective Date of Loans. Loans will be effective as specified in the
Administrator's rules then in effect.

    9.5  Repayment Schedule. The Participant may select a repayment schedule of
one, two, three, four or five (1, 2, 3, 4 or 5) years. If the loan is used to
acquire any dwelling which, within a reasonable time is to be used (determined
at the time the loan is made) as the principal residence of the Participant, the
repayment period may be extended up to fifteen (15)

<PAGE>
                                      -59-

years at the election of the Participant. All repayments will be made through
payroll deductions in accordance with the loan agreement executed at the time
the loan is made, except that, in the event of the sale of all or a portion of
the business of the Employer or one of the Adopting Employers, or other unusual
circumstances, the Administrator, through uniform and equitable rules, may
establish other means of repayment. The loan agreement will permit repayment of
the entire outstanding balance in one lump-sum and the repayment of any portion
of the outstanding balance at any time (with appropriate adjustment to the
remaining payment schedule as determined by the Administrator, in its sole
discretion, on a uniform and nondiscriminatory basis). The repayment schedule
shall provide for substantially level amortization of the loan. Loan repayments
will be suspended under this Plan as permitted under section 414(u) of the Code
and as required to comply with an order issued in a bankruptcy proceeding.

    9.6  Limit on Number of Loans. Except as otherwise provided herein, no more
than two (2) loans may be outstanding at any time. If a Participant has more
than two (2) loans outstanding on account of a transfer of assets from another
plan in accordance with section 4.8, the Participant may not obtain a new loan
until he or she has less than two (2) loans outstanding. The Administrator may,
notwithstanding the foregoing provisions, alter the requirements of this Section
9.6, or Sections 9.2 or 9.5.

    9.7  Interest Rate. The interest rate for a loan pursuant to this ARTICLE
will be equal to the prime rate published in The Wall Street Journal on the
first business day in each calendar quarter and such rate will apply to loans
which are made at any time during each respective calendar quarter.

    9.8  Effect Upon Participant's Account. Upon the granting of a loan to a
Participant by the Administrator, the allocations in the Participant's Account
to the respective investment funds will be reduced on a pro rata basis and
replaced by the loan balance which will be designated as an asset in the
Account. Such reduction shall be effected by reducing the Participant's Account
in the following sequence, with no reduction of the succeeding Accounts until
prior Accounts have been exhausted by the loan: Matching Contribution Account;
Elective Deferral Account; ESOP Contribution Account, Rollover Contribution
Account; and Employee After-Tax Contribution Account. Upon repayment of the
principal and interest, the loan balance will be reduced, the Participant
Accounts will be increased in the reverse order in which they were exhausted by
the loan, and the loan payments will be allocated to the respective investment
funds in accordance with the investment election then in effect.

<PAGE>
                                     -60-

     9.9  Effect of Severance From Service and Nonpayment.

          (a) In the event that a loan remains outstanding upon the Severance
from Service of a Participant, the Participant will be given the option of
continuing to repay the outstanding loan. If, as a result of layoff or
Authorized Leave of Absence, a Participant, although still in a Period of
Service, is not being compensated through the Employer's payroll system or
receives a net amount of compensation after income and employment tax
withholding that is less than the amount of the required loan installments, loan
payments will be suspended until the earliest of the first pay date after the
Participant returns to active employment with the Employer, the Participant's
Severance from Service Date, or the expiration of twelve (12) months from the
date of the suspension. In the event the Participant does not return to active
employment with the Employer or, if earlier, the expiration of the twelve (12)
month period beginning with the date of suspension, the Participant will be
given the option of continuing to repay the outstanding loan.

          (b) Except as otherwise provided herein, if required payments on an
outstanding loan are not made when due, the loan shall be treated as in default
and the amount of the unpaid principal and accrued interest shall be deducted
from the Participant's Account and reported as a distribution. However, a loan
will not be treated as in default until the end of the calendar quarter
following the calendar quarter in which the required loan payment was due (the
"cure period"). If a Participant makes the required loan payment before the
expiration of the cure period, the loan will not be considered in default with
respect to such loan payment. Notwithstanding the preceding sentences of this
subsection (b), if a Participant, who is still in a Period of Service and is
being compensated through the Employer's payroll system, has loan repayments
suspended for more than ninety (90) days pursuant to an order issued in a
bankruptcy proceeding, the amount of the unpaid principal and accrued interest
will be deducted from the Participant's Account and reported as a distribution.
In no event, however, shall the portion of a loan attributable to a
Participant's Elective Deferral Account be deducted earlier than the date on
which the Participant experiences a distributable event prescribed in section
401(k)(2)(B)(i) of the Code.

<PAGE>
                                     -61-

                                    ARTICLE X

                      Contribution and Benefit Limitations

     10.1 Contribution Limits.

          (a) For Limitation Years beginning after December 31, 2001, the Annual
Additions that may be allocated to a Participant's Account for any Limitation
Year shall not exceed the lesser of:

              (1)  forty thousand dollars ($40,000); or

              (2) one hundred percent (100%) of the Participant's Compensation
for that Limitation Year.

          (b) For Limitation Years beginning before January 1, 2002, the Annual
Additions that may be allocated to a Participant's Account for any Limitation
Year shall not exceed the lesser of:

              (1) thirty thousand dollars ($30,000); or

              (2) twenty-five percent (25%) of the Participant's Compensation
for that Limitation Year.

          (c) If the Employer maintains any other Defined Contribution Plans
then the limitations specified in this section shall be computed with reference
to the aggregate Annual Additions for each Participant from all such Defined
Contribution Plans.

          (d) If the Annual Additions for a Participant would exceed the limits
specified in this section, then the Annual Additions under this Plan for that
Participant shall be reduced to the extent necessary to prevent such limits from
being exceeded. Such reduction shall be made in accordance with section 10.3.

     10.2 Annual Adjustments to Limits. The dollar limitation for Annual
Additions shall be adjusted for cost-of-living to the extent permitted under
section 415(d) of the Code.

     10.3 Excess Amounts.

          (a) The foregoing limits shall be limits on the allocation that may be
made to a Participant's Account in any Limitation Year. If an excess Annual
Addition would otherwise result from an allocation of forfeitures, reasonable
errors in determining Compensation or other comparable reasons, then the
Administrator may take any (or all) of the following steps to prevent the excess
Annual Additions from being allocated:

              (1) return any contributions from the Participant, as long as
such return is nondiscriminatory;

<PAGE>
                                      -62-

              (2) hold the excess amounts unallocated in a suspense account and
apply the balance of the suspense account against Matching, ESOP, Qualified
Nonelective or Employer Contributions for that Participant made in succeeding
years;

              (3) hold the excess amounts unallocated in a suspense account and
apply the balance of the suspense account against succeeding year Matching,
ESOP, Qualified Nonelective or Employer Contributions;

              (4) reallocate the excess amounts to other Participants.

          (b) Any suspense account established under this section shall not be
credited with income or loss unless otherwise directed by the Administrator. If
a suspense account under this section is to be applied in a subsequent
Limitation Year, then the amounts in the suspense account shall be applied
before any Annual Additions (other than forfeitures) are made for such
Limitation Year.

     10.4 Definitions.

          (a) The following terms shall have the meanings specified:

              (1) Annual Addition. The sum for any Limitation Year of additions
(not including Rollover Contributions) to a Participant's Account as a result
of:

                  (A) Employer contributions (including Matching Contributions,
ESOP Contributions, Employer Contributions, Qualified Nonelective Contributions
and Elective Deferrals);

                  (B) Employee contributions;

                  (C) forfeitures; and

                  (D) amounts described in Code sections 415(l)(1) and 419A(d)
(2).

              (2) Defined Contribution Plan. A plan qualified under section
401(a) of the Code that provides an individual account for each Participant and
benefits based solely on the amount contributed to the Participant's Account,
plus any income, expenses, gains and losses, and forfeitures of other
Participants which may be allocated to such Participant's account.

              (3) Limitation Year. The Plan Year, until the Employer adopts a
          different Limitation Year.

<PAGE>
                                     - 63 -

                                   ARTICLE XI

                                 Top-Heavy Rules

     11.1 General. This ARTICLE shall only be applicable if the Plan becomes a
Top-Heavy Plan under section 416 of the Code. If the Plan does not become a
Top-Heavy Plan, then none of the provisions of this ARTICLE shall be operative.
The provisions of this ARTICLE shall be interpreted and applied in a manner
consistent with the requirements of section 416 of the Code and the regulations
thereunder.

     11.2 Vesting.

          (a) If the Plan becomes a Top-Heavy Plan, then amounts in a
Participant's Account attributable to Matching and ESOP Contributions shall be
vested in accordance with this section, in lieu of ARTICLE VI, to the extent
this section produces a greater degree of vesting. This section shall only apply
to Participants who have at least an Hour of Service after the Plan becomes a
Top-Heavy Plan.

          (b) If applicable, amounts in a Participant's Account attributable to
Matching and ESOP Contributions shall vest as follows:

                              Years of
                           Top Heavy Service         Vested Percentage
                           -----------------         -----------------
                           Fewer than 3                      0%
                           3 or more                       100%

          (c) If the Plan ceases to be a Top-Heavy Plan then subsection (b)
shall no longer be applicable; provided, however, that in no event shall the
vested percentage of any Participant be reduced by reason of the Plan ceasing to
be a Top-Heavy Plan. Subsection (b) shall nevertheless continue to apply for any
Participant who was previously covered by it and who has at least three (3)
Years of Top-Heavy Service.

     11.3 Minimum Contribution.

          (a) For each Plan Year that the Plan is a Top-Heavy Plan, the Adopting
Employers shall make a contribution to be allocated directly to the Account of
each Non-Key Employee.

          (b) The amount of the contribution (and forfeitures) required to be
contributed and allocated for a Plan Year by this section is three percent (3%)
of the Top-Heavy Compensation for that Plan Year of each Non-Key Employee who is
both a Participant and an Employee on the last day of the Plan Year for which
the contribution is made, with adjustments

<PAGE>
                                      -64-

as provided herein. If the contributions (other than Rollover Contributions)
allocated to the Accounts of each Key Employee for a Plan Year are less than
three percent (3%) of his or her Top-Heavy Compensation, then the contribution
required by the preceding sentence shall be reduced for that Plan Year to the
same percentage of Top-Heavy Compensation that was allocated to the Account of
the Key Employee whose Account received the greatest allocation of contributions
(other than Rollover Contributions) for that Plan Year, when computed as a
percentage of Top-Heavy Compensation.

          (c) The contribution required by this section shall be reduced for a
Plan Year to the extent of any contributions made and allocated under this Plan
(as permitted under section 416 of the Code and the regulations thereunder). In
addition, to the extent a Participant participates in any other plans of the
Employer for a Plan Year, the contribution required by this section shall be
reduced by any contributions allocated or benefits accrued under any such plans.
Elective Deferrals shall be treated as if they were contributions for purposes
of determining any minimum contributions required under subsection (b). For Plan
Years beginning after December 31, 2001, the contribution required by this
section shall be reduced to the extent of any matching contributions under this
Plan or any other plan of the Employer.

     11.4 Definitions.

          (a) The following terms shall have the meanings specified herein:

              (1) Aggregated Plans.

                  (A) The Plan, any plan that is part of a "required
aggregation group" and any plan that is part of a "permissive aggregation group"
that the Adopting Employers treat as an Aggregated Plan.

                  (B) The "required aggregation group" consists of each plan
of the Adopting Employers in which a Key Employee participates (in the Plan Year
containing the Determination Date or any of the four (4) preceding Plan Years)
and each other plan of the Adopting Employers which enables any plan of the
Adopting Employers in which a Key Employee participates to meet the requirements
of section 401(a)(4) or section 410(b) of the Code. Also included in the
required aggregation group shall be any terminated plan that covered a Key
Employee and was maintained within the five (5) year period ending on the
Determination Date.

                  (C) The "permissive aggregation group" consists of any plan
not included in the "required aggregation group" if the Aggregated Plan
described in subparagraph (A) above would continue to meet the requirements of
section 401(a)(4) and 410 of the Code with such additional plan being taken into
account.

<PAGE>
                                      -65-

                         (2) Determination Date. The last day of the preceding
Plan Year, or, in the case of the first plan year of any plan, the last day of
such plan year. The computations made on the Determination Date shall utilize
information from the immediately preceding Valuation Date.

                         (3) Key Employee.

                             (A) For Plan Years beginning after December 31,
2001,an Employee or former Employee (including any deceased Employee) who at any
timeduring the Plan Year that includes the Determination Date was an officer of
one of the Adopting Employers having annual Top-Heavy Compensation for the Plan
Year greater than one hundred thirty thousand dollars ($130,000) (as adjusted
under section 416(i)(l) of the Code for Plan Years beginning after December 31,
2002), a five percent (5%) owner of one of the Adopting Employers, or a one
percent (1%) owner of one of the Adopting Employers having annual Top-Heavy
Compensation of more than one hundred fifty thousand dollars ($150,000). The
determination of who is a Key Employee will be made in accordance with section
416(i)(l) of the Code and the applicable regulations and other guidance of
general applicability issued thereunder.

                             (B) For Plan Years beginning before January 1,
2002, an Employee (or former Employee) who, at any time during the Plan Year
containing the Determination Date or any of the four (4) preceding Plan Years,
is:

                                 (i) An officer of one of the Adopting Employers
with annual Top-Heavy Compensation for the Plan Year greater than fifty percent
(50%) of the amount in effect under section 415(b)(1)(A) of the Code for the
calendar year in which that Plan Year ends;

                                 (ii) one of the ten (10) Employees owning (or
considered as owning under section 318 of the Code) the largest interest in one
of the Adopting Employers, who has more than one-half of one percent (.5%)
interest in such Adopting Employer, and who has annual Top-Heavy Compensation
for the Plan Year at least equal to the maximum dollar limitation under section
415(c)(1)(A) of the Code for the calendar year in which that Plan Year ends;

                                 (iii) a five percent (5%) or greater
shareholder in one of the Adopting Employers; or

                                 (iv) a one percent (1%)shareholder in one of
the Adopting Employers with annual Top-Heavy Compensation from the Adopting
Employer of more than one hundred fifty thousand dollars ($150,000).

<PAGE>
                                      -66-

                           (C) For purposes of paragraphs (3)(B)(iii) and(3)(B)
(iv), the rules of section 414(b), (c) and (m) of the Code shall not apply.
Beneficiaries of an Employee shall acquire the character of such Employee and
inherited benefits will retain the character of the benefits of the Employee who
performed services.
                       (4) Non-Key Employee. Any Employee who is not a Key
 Employee.

                       (5) Super Top-Heavy Plan. A Top-Heavy Plan in which the
sum of the present value of the cumulative accrued benefits and accounts for Key
Employees exceeds ninety percent (90%) of the comparable sum determined for all
Employees. The foregoing determination shall be made in the same manner as the
determination of a Top-Heavy Plan under this section.

                       (6) Top-Heavy Compensation.  The term Top-Heavy
Compensation shall have the same meaning as the term Compensation has under
section 2.13.

                       (7) Top-Heavy Plan.  The Plan is a Top-Heavy Plan for a
Plan Year if, as of the Determination Date for that Plan Year, the sum of (i)
the present value of the cumulative accrued benefits for Key Employees under all
Defined Benefit Plans that are Aggregated Plans and (ii) the aggregate of the
accounts of Key Employees under all Defined Contribution Plans that are
Aggregated Plans exceeds sixty percent (60%) of the comparable sum determined
for all Employees. For purposes of determining whether the Plan is top-heavy, a
Participant's accrued benefit in a defined benefit plan will be determined under
a uniform accrual method which applies in all defined benefit plans maintained
by the Employer or, where there is no such method, as if such benefit accrued
not more rapidly than the slowest rate of accrual permitted under the fractional
rule of section 411(b)(1)(C) of the Code.

                       (8) Years of Top-Heavy Service.  The Period of Service
with the Adopting Employers that might be counted under section 411(a) of the
Code, disregarding all service that may be disregarded under section 411(a)(4)
of the Code.

                   (b) The definitions in this section and the provisions of
this ARTICLE shall be interpreted in a manner consistent with section 416 of the
Code.
            11.5  Special Rules.
                  (a) (1) For Plan Years beginning before January 1, 2002, for
purposes of determining the present value of the cumulative accrued benefit for
any Participant or the amount of the Account of any Participant, such present
value or amount shall be increased by the aggregate distributions made with
respect to such Participant under the Plan during the Plan Year that includes
the Determination Date and the four (4) preceding Plan Years (if such amounts
would otherwise have been omitted).

<PAGE>
                                      -67-

                    (2) For Plan Years beginning after December 31, 2001, for
purposes of determining the present value of the cumulative accrued benefit for
any Participant or the amount of the Account of any Participant, such present
value or amount shall be increased by the aggregate distributions made with
respect to such Participant under the Plan during the one (1) year period ending
on the Determination Date. The preceding sentence shall also apply to
distributions under a terminated plan which, had it not been terminated, would
have been aggregated with the Plan under section 416(g)(2)(A)(i) of the Code. In
the case of a distribution made for a reason other than separation from service,
death, or disability, this subsection (2) shall be applied by substituting "five
(5) year period" for "one (1) year period."

               (b)  (1) In the case of unrelated rollovers and transfers, (i)
the plan making the distribution or transfer is to count the distribution as a
distribution under section 416(g)(3) of the Code, and (ii) the plan accepting
the rollover or transfer is not to consider the rollover or transfer as part of
the accrued benefit if such rollover or transfer was accepted after December 31,
1983, but is to consider it as part of the accrued benefit if such rollover or
transfer was accepted before January 1, 1984. For this purpose, rollovers and
transfers are to be considered unrelated if they are both initiated by the
Employee and made from a plan maintained by one employer to a plan maintained by
another employer.

                    (2) In the case of related rollovers and transfers, the plan
making the distribution or transfer is not to count the distribution or transfer
under section 416(g)(3) of the Code, and the plan accepting the rollover or
transfer counts the rollover or transfer in the present value of the accrued
benefits. For this purpose, rollovers and transfers are to be considered related
if they are not unrelated under subsection (b)(1).

               (c) If any individual is a Non-Key Employee with respect to any
plan for any Plan Year, but such individual was a Key Employee with respect to
such plan for any prior Plan Year, any accrued benefit for such Employee (and
the account of such Employee) shall not be taken into account.

               (d) Beneficiaries of Key Employees and former Key Employees are
considered to be Key Employees and Beneficiaries of Non-Key Employees and former
Non-Key Employees are considered to be Non-Key Employees.

               (e) (1) For Plan Years beginning before January 1, 2002, the
accrued benefit of an Employee who has not performed any service for the
Adopting Employer maintaining the Plan at any time during the five (5) year
period ending on the Determination Date is excluded from the calculation to
determine top-heaviness. However, if an Employee

<PAGE>
                                      -68-

performs no services, such Employee's total accrued benefit is included in the
calculation for top-heaviness.

                       (2) For Plan Years beginning after December 31, 2001,
the accrued benefit of an Employee who has not performed any service for the
Adopting Employer maintaining the Plan at any time during the one (1) year
period ending on the Determination Date is excluded from the calculation to
determine top-heaviness.

               11.6  Adjustment of Limitations.

                    (a) If this section is applicable, then the contribution and
benefit limitations in section 10.5 shall be reduced. Such reduction shall be
made by modifying section 10.5(a)(2)(A) of the definition of Defined Benefit
Fraction to instead be "(i) the product of 1.0 multiplied by ninety thousand
dollars ($90,000), or" and by modifying section 10.5(a)(4)(A) of the definition
of Defined Contribution Fraction to instead be "(i) the product of 1.0
multiplied by thirty thousand dollars ($30,000), or".

                    (b)  This section shall be applicable for any Plan Year in
 which either:
                         (1)   the Plan is a Super Top-Heavy Plan, or
                         (2)   the Plan both is a Top-Heavy Plan (but not a
Super Top-Heavy Plan) and provides contributions(other than Rollover
Contributions and forfeitures to the Account of any Non-Key Employee in an
amount less than four percent (4%) of such Participant's Top-Heavy Compensation,
as determined in accordance with section 11.3(b).

<PAGE>
                                      -69-

                                   ARTICLE XII

                                 The Trust Fund

         12.1 Trust. During the period in which this Plan remains in existence,
the Company or any successor thereto shall maintain in effect a Trust with a
corporation and/or an individual(s) as Trustee, to hold, invest, and distribute
the Trust Fund in accordance with the terms of such Trust.

         12.2 Investment of Accounts. The Trustee shall invest and reinvest the
Participant's accounts in the investment options available under the Plan in
accordance with ARTICLE V, as directed by the Administrator or its delegate. The
Administrator shall issue such directions in accordance with the investment
options selected by the Participants which shall remain in force until altered
in accordance with Article V.

         12.3 Expenses. Expenses of the Plan and Trust shall be paid from the
Trust.

          12.4 Acquisition Loans. The Administrator may direct the Trustee to
incur Acquisition Loans from time to time to finance the acquisition of Common
Stock or to repay a prior Acquisition Loan. An Acquisition Loan shall be for a
specific term, shall bear a reasonable rate of interest, and shall not be
payable on demand except in the event of default. Acquisition loans may be
secured by the pledge of the Financed Shares so acquired (or acquired with the
proceeds of a prior Acquisition Loan which is being refinanced). No other Trust
assets may be pledged as collateral for an Acquisition Loan, and no lender shall
have recourse against Trust assets other than any Financed Shares remaining
subject to pledge. If the lender is a party in interest (as defined in ERISA),
the Acquisition Loan must provide for a transfer of Trust assets on default only
upon and to the extent of the failure of the Trust to meet the payment schedule
of the Acquisition Loan. Any pledge of Financed Shares must provide for the
release of the shares so pledged as payments on the Acquisition Loan are made by
the Trustee, and such Financed Shares are allocated to Participants' ESOP
Contribution Accounts under Article IV. Payments of principal and/or interest on
an Acquisition Loan shall be made by the Trustee (as directed by the
Administrator) only from Employer contributions paid in cash to enable the Trust
to repay such Acquisition Loan, from earnings attributable to such Employer
contributions, and from any cash dividends received by the Trust on such
Financed Shares.

         12.5 Sale of Common Stock. Subject to the approval of the Senior Vice
President of Human Resources of the Company or other officer authorized by the
Board of Directors to give such approval, the Administrator may direct the
Trustee to sell shares of Common Stock to any person, including the Company and
any Affiliates, provided such sale must be made at a price

<PAGE>
                                      -70-

not less favorable to the Plan than fair market value. In the event that the
Trustee is unable to make payments of principal and/or interest on an
Acquisition Loan when due, the Administrator may direct the Trustee to sell any
Financed Shares that have not yet been allocated to Participants' ESOP
Contribution Accounts or to obtain an Acquisition Loan in an amount sufficient
to make such payments.

<PAGE>
                                      -71-

                                  ARTICLE XIII

                           Administration of The Plan

         13.1 General Administration. The general administration of the Plan
shall be the responsibility of the Company (or any successor thereto) which
shall be the Administrator and named Fiduciary for purposes of ERISA. The
Company shall have the authority, in its sole discretion, to construe the terms
of the Plan and to make determinations as to eligibility for benefits and as to
other issues within the "Responsibilities of the Administrator" described in
this ARTICLE. All such determinations of the Company shall be conclusive and
binding on all persons.

         13.2 Responsibilities of the Administrator. Except as otherwise
provided in ERISA, the Administrator (and any other named Fiduciaries) may
allocate any duties and responsibilities under the Plan and Trust among
themselves in any mutually agreed upon manner. Such allocation shall be in a
written document signed by the Administrator (and any other named Fiduciaries)
and shall specifically set forth this allocation of duties and responsibilities,
which may include the following:

              (a) Determination of all questions which may arise under the
Plan with respect to questions of fact and law, including without limitation
eligibility for participation, administration of Accounts, membership, vesting,
loans, withdrawals, accounting, status of Accounts, stock ownership and voting
rights, and any other issue requiring interpretation or application of the Plan.

              (b) Establishment of procedures required by the Plan, such as
notification to Employees as to joining the Plan, selecting and changing
investment options, suspending deferrals, exercising voting rights in stock,
withdrawing and borrowing Account balances, designation of Beneficiaries,
election of method of distribution, and any other matters requiring a uniform
procedure.

              (c) Submission of necessary amendments to supplement omissions
from the Plan or reconcile any inconsistency therein.

              (d) Filing appropriate reports with the government as required by
law.

              (e) Appointment of a Trustee or Trustees, Recordkeepers, and
investment managers.

              (f) Review at appropriate intervals of the performance of the
Trustee and such investment managers as may have been designated.

<PAGE>
                                      -72-

              (g) Appointment of such additional Fiduciaries as deemed
necessary for the effective administration of the Plan, such appointments to be
by written instrument.

         13.3 Liability for Acts of Other Fiduciaries. Each Fiduciary shall be
responsible only for the duties allocated or delegated to said Fiduciary, and
other Fiduciaries shall not be liable for any breach of fiduciary responsibility
with respect to any act or omission of any other Fiduciary unless:

              (a) The Fiduciary knowingly participates in or knowingly attempts
to conceal the act or omission of such other Fiduciary and knows that such act
or omission constitutes a breach of fiduciary responsibility by the other
Fiduciary;

              (b) The Fiduciary has knowledge of a breach of fiduciary
responsibility by the other Fiduciary and has not made reasonable efforts under
the circumstances to remedy the breach; or

              (c) The Fiduciary's own breach of his or her specific fiduciary
responsibilities has enabled another Fiduciary to commit a breach. No Fiduciary
shall be liable for any acts or omissions which occur prior to his or her
assumption of Fiduciary status or after his or her termination from such status.

         13.4 Employment by Fiduciaries. Any Fiduciary hereunder may employ,
with the written approval of the Administrator, one or more persons to render
service with regard to any responsibility which has been assigned to such
Fiduciary under the terms of the Plan including legal, tax, or investment
counsel and may delegate to one or more persons any administrative duties
(clerical or otherwise) hereunder.

         13.5 Recordkeeping. The Administrator shall keep or cause to be kept
any necessary data required for determining the Account status of each
Participant. In compiling such information, the Administrator may rely upon its
employment records, including representations made by the Participant in the
employment application and subsequent documents submitted by the Participant to
the Employer. The Trustee shall be entitled to rely upon such information when
furnished by the Administrator or its delegate. Each Employee shall be required
to furnish the Administrator upon request and in such form as prescribed by the
Administrator, such personal information, affidavits and authorizations to
obtain information as the Administrator may deem appropriate for the proper
administration of the Plan, including but not limited to proof of the Employee's
date of birth and the date of birth of any person designated by a Participant as
a Beneficiary.

<PAGE>
                                      -73-

          13.6    Claims Review Procedure.

                  (a) Except as otherwise provided in this section 13.6, the
Administrator shall make all determinations as to the right of any person to
Accounts under the Plan. Any such determination shall be made pursuant to the
following procedures, which shall be conducted in a manner designed to comply
with section 503 of ERISA:

                      (1) Step 1. Claims with respect to an Account should be
filed by a claimant as soon as practicable after the claimant knows or should
know that a dispute has arisen with respect to an Account, but at least thirty
(30) days prior to the claimant's actual retirement date or, if applicable,
within sixty (60) days after the death, Disability or Severance from Service of
the Participant whose Account is at issue, by mailing a copy of the claim to the
Raytheon Benefit Center, P.O. Box 4813, Chesapeake, Virginia 23327.

                      (2) Step 2. In the event that a claim with respect to
an Account is wholly or partially denied by the Administrator, the Administrator
shall, within ninety (90) days following receipt of the claim, so advise the
claimant in writing setting forth: the specific reason or reasons for the
denial; specific reference to pertinent Plan provisions on which the denial is
based; a description of any additional material or information necessary for the
claimant to perfect the claim; an explanation as to why such material or
information is necessary; and an explanation of the Plan's claim review
procedure.

                      (3) Step 3. Within sixty (60) days following receipt of
the denial of a claim with respect to an Account, a claimant desiring to have
the denial appealed shall file a request for review by an officer of the Company
or a benefit appeals committee, as designated by the Administrator, by mailing a
copy thereof to the address shown in subsection (a)(1); provided, however, that
such officer or any member of such benefit appeals committee, as applicable, may
not be the person who made the initial adverse benefits determination nor a
subordinate of such person.

                      (4) Step 4. Within thirty (30) days following receipt
of a request for review, the designated officer or benefit appeals committee
shall provide the claimant a further opportunity to present his or her position.
At the designated officer or benefit appeals committee's discretion, such
presentation may be through an oral or written presentation. Prior to such
presentation, the claimant shall be permitted the opportunity to review
pertinent documents and to submit issues and comments in writing. Within a
reasonable time following presentation of the claimant's position, which usually
should not exceed thirty (30) days, the designated officer or benefit appeals
committee shall inform the claimant in writing of the

<PAGE>
                                      -74-

decision on review setting forth the reasons for such decision and citing
pertinent provisions in the Plan.

                  (b) Except as otherwise provided in subsection (a), the
Administrator is the Fiduciary to whom the Plan grants full discretion, with the
advice of counsel, to interpret the Plan; to determine whether a claimant is
eligible for benefits; to decide the amount, form and timing of benefits; and to
resolve any other matter under the Plan which is raised by a claimant or
identified by the Administrator. All questions arising from or in connection
with the provisions of the Plan and its administration, not herein provided to
be determined by the Board of Directors, shall be determined by the
Administrator, and any determination so made shall be conclusive and binding
upon all persons affected thereby.

             13.7 Indemnification of Directors and Employees. The Adopting
Employers shall indemnify any Fiduciary who is a director, officer or Employee
of the Employer, his or her heirs and legal representatives, against all
liability and reasonable expense, including counsel fees, amounts paid in
settlement and amounts of judgments, fines or penalties, incurred or imposed
upon him in connection with any claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of acts or omissions
in his or her capacity as a Fiduciary hereunder, provided that such act or
omission is not the result of gross negligence or willful misconduct. The
Adopting Employers may indemnify other Fiduciaries, their heirs and legal
representatives, under the circumstances, and subject to the limitations set
forth in the preceding sentence, if such indemnification is determined by the
Board of Directors to be in the best interests of the Adopting Employers.

             13.8 Immunity from Liability. Except to the extent that section
410(a) of ERISA prohibits the granting of immunity to Fiduciaries from liability
for any responsibility, obligation, or duty imposed under Title I, Subtitle B,
Part 4, of said Act, an officer, Employee, member of the Board of Directors of
the Employer or other person assigned responsibility under this Plan shall be
immune from any liability for any action or failure to act except such action or
failure to act which results from said officer's, Employee's, Participant's or
other person's own gross negligence or willful misconduct.

<PAGE>
                                      -75-

                                   ARTICLE XIV

                        Amendment or Termination of Plan

         14.1 Right to Amend or Terminate Plan. The Company reserves the right
at any time or times, by action of the Board of Directors, to modify, amend or
terminate the Plan in whole or in part, in which event a certified copy of the
resolution of the Board of Directors, authorizing such modification, amendment
or termination shall be delivered to the Trustee and to the other Adopting
Employers whose Employees are covered by this Plan, provided, however, that no
amendment to the Plan shall be made which shall:

              (a)  reduce any vested right or interest to which any Participant
or Beneficiary is then entitled under this Plan or otherwise reduce the vested
rights of a Participant in violation of section 411(d)(6) of the Code;

              (b)  vest in the Adopting Employers any interest or control over
any assets of the Trust;

              (c)  cause any assets of the Trust to be used for, or diverted
to, purposes other than for the exclusive benefit of Participants and their
Beneficiaries; or

              (d)  change any of the rights, duties or powers of the Trustee
without its written consent.

              (e)  (1) Notwithstanding the foregoing provisions of this section
or any other provisions of this Plan, any modification or amendment of the Plan
may be made retroactively if necessary or appropriate to conform the Plan with,
or to satisfy the conditions of, ERISA, the Code, or any other law, governmental
regulation or ruling.

                   (2)  In the alternative, subject to the conditions
prescribed in subsections (a) through (e), the Plan may be amended by the Senior
Vice President of Human Resources of the Company or his or her delegate, or
other officer to whom authority to amend the Plan is delegated by the Board of
Directors, provided, however, that any such amendment does not, in the view of
such officer, materially increase costs of the Plan to the Company or any
Adopting Employer.

         14.2 Amendment to Vesting Schedule. Any amendment that modifies the
vesting provisions of ARTICLE VI shall either:

              (a)  provide for a rate of vesting that is at least as rapid for
any Participant as the vesting schedule previously in effect; or

<PAGE>
                                      -76-

              (b)  provide that any adversely affected Participant with a
Period of Service of at least three (3) years may elect, in writing, to remain
under the vesting schedule in effect prior to the amendment. Such election must
be made within sixty (60) days after the later of the:

                   (1)  adoption of the amendment;

                   (2)  effective date of the amendment; or

                   (3)  issuance by the Administrator of written notice of the
amendment.

         14.3 Maintenance of Plan. The Adopting Employers have established the
Plan with the bona fide intention and expectation that they will be able to make
contributions indefinitely, but the Adopting Employers are not and shall not be
under any obligation or liability whatsoever to continue contributions or to
maintain the Plan for any given length of time.

         14.4 Termination of Plan and Trust.

              (a)  The Plan and Trust hereby created shall terminate upon the
occurrence of any of the following events:

                   (1) Delivery to the Trustee of a notice of termination
executed by the Company specifying the date as of which the Plan and Trust shall
terminate; or

                   (2) Adjudication of the Company as bankrupt or general
assignment by the Company to or for the benefit of creditors or dissolution of
the Company.

              (b) Upon termination of this Plan, or permanent discontinuance of
contributions hereunder, with or without written notification, the rights of
each Participant to the amounts credited to that Participant's Account at such
time shall be fully vested and nonforfeitable. In the event a partial
termination of the Plan is deemed to have occurred, each Participant affected
shall be fully vested in and shall have a nonforfeitable right to the amounts
credited to that Participant's Account with respect to which the partial
termination occurred.

         14.5 Distribution on Termination.

              (a) (1) If the Plan is terminated, or contributions permanently
discontinued, an Adopting Employer, at its discretion, may (at that time or at
any later time) direct the Trustee to distribute the amounts in a Participant's
Account in accordance with the distribution provisions of the Plan. Such
distribution shall, notwithstanding any prior provisions of the Plan, be made in
a single lump-sum without the Participant's consent as to the timing of such
distribution. If, however, an Adopting Employer (or an Affiliate) maintains
another defined contribution plan (other than an employee stock ownership plan),
then the preceding sentence shall not apply and the Adopting Employer, at its
discretion, may direct such distributions to be made as a direct transfer to
such other plan without the Participant's consent, if the Participant does not
consent to an immediate distribution.

<PAGE>

                                      -77-

                         (2) If an Adopting Employer does not direct
distribution under paragraph (1), each Participant's Account shall be maintained
until distributed in accordance with the provisions of the Plan (determined
without regard to this section) as though the Plan had not been terminated or
contributions discontinued.

                  (b) If the Administrator determines that it is
administratively impracticable to make distributions under this section in cash
or that it would be in the Participant's best interest to make some or all of
the distributions with in-kind property, it shall offer all Participants and
Beneficiaries entitled to a distribution under this section a reasonable
opportunity to elect to receive a distribution of the in-kind property being
distributed by the Trust. Those Participants and Beneficiaries so electing shall
receive a proportionate share of such in-kind property in the form (outright, in
trust or in partnership) that the Administrator determines will provide the most
feasible method of distribution.

                  (c) (1) Amounts attributable to elective contributions shall
only be distributable by reason of this section if one of the following is
applicable:

                          (A) the Plan is terminated without the establishment
or maintenance of another defined contribution plan (other than an employee
stock ownership plan);

                          (B) an Adopting Employer has a sale or other
disposition to an unrelated corporation of substantially all of the assets used
by the Adopting Employer in a trade or business of the Adopting Employer with
respect to an Employee who continues employment with the corporation acquiring
such assets; or

                          (C) an Adopting Employer has a sale or other
disposition to an unrelated entity of the Adopting Employer's interest in a
subsidiary with respect to an Employee who continues employment with such
subsidiary.

                      (2) For purposes of this subsection, the term "elective
contributions" means employer contributions made to the Plan that were subject
to a cash or deferred election under a cash or deferred arrangement.

                      (3) Elective contributions are distributable under
subsections (c)(1)(B) and (C) above only if the Adopting Employers continue to
maintain the Plan after the disposition.

<PAGE>
                                      -78-

                                   ARTICLE XV

                              Additional Provisions

         15.1 Effect of Merger, Consolidation or Transfer. In the event of any
merger or consolidation with or transfer of assets or liabilities to any other
plan or to this Plan, each Participant of the Plan shall be entitled to a
benefit immediately after the merger, consolidation or transfer, which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had been
terminated).

         15.2 No Assignment.

              (a) Except as provided herein, the right of any Participant or
Beneficiary to any benefit or to any payment hereunder shall not be subject to
alienation, assignment, garnishment, attachment, execution or levy of any kind.

              (b) Subsection (a) shall not apply to any payment or transfer
permitted by the Internal Revenue Service pursuant to regulations issued under
section 401(a)(13) of the Code.

              (c) Subsection (a) shall not apply to any payment or transfer
pursuant to a Qualified Domestic Relations Order.

              (d) Subsection (a) shall not apply to any payment or transfer to
the Trust in accordance with section 401(a)(13)(C) of the Code to satisfy the
Participant's liabilities to the Plan or Trust in any one or more of the
following circumstances:

                  (1) the Participant is convicted of a crime involving the
Plan;

                  (2) a civil judgment (or consent order or decree) in an
action is brought against the Participant in connection with an ERISA fiduciary
violation; or

                  (3) the Participant enters into a settlement agreement with
the Department of Labor or the Pension Benefit Guaranty Corporation over an
ERISA fiduciary violation.

         15.3 Limitation of Rights of Employees. This Plan is strictly a
voluntary undertaking on the part of the Adopting Employers and shall not be
deemed to constitute a contract between any of the Adopting Employers and any
Employee, or to be a consideration for, or an inducement to, or a condition of
the employment of any Employee. Nothing contained in the Plan shall be deemed to
give any Employee the right to be retained in the service of any of the Adopting
Employers or shall interfere with the right of any of the Adopting Employers to
discharge or otherwise terminate the employment of any Employee of an Adopting
Employer at

<PAGE>
                                      -79-

any time. No Employee shall be entitled to any right or claim hereunder except
to the extent such right is specifically fixed under the terms of the Plan.

         15.4 Construction. The provisions of this Plan shall be interpreted and
construed in accordance with the requirements of the Code and ERISA. Any
amendment or restatement of the Plan or Trust that would otherwise violate the
requirements of section 411(d)(6) of the Code or otherwise cause the Plan or
Trust to cease to be qualified under section 401(a) of the Code shall be deemed
to be invalid. Capitalized terms shall have meanings as defined herein. Singular
nouns shall be read as plural, masculine pronouns shall be read as feminine and
vice versa, as appropriate. References to "section" or "ARTICLE" shall be read
as references to appropriate provisions of this Plan, unless otherwise
indicated.

         15.5 Company Determinations. Any determinations, actions or decisions
of the Company (including but not limited to, Plan amendments and Plan
termination) shall be made by its Board of Directors in accordance with its
established procedures or by such other individuals, groups or organizations
that have been properly delegated by the Board of Directors to make such
determination or decision.

         15.6 Continued Qualification. This Plan is amended and restated with
the intent that it shall continue to qualify under sections 401(a), 401(k) and
4975(e)(7) of the Code as those sections exist at the time the Plan is amended
and restated. If the Internal Revenue Service determines that the Plan does not
meet those requirements as amended and restated, the Plan shall be amended
retroactively as necessary to correct any such inadequacy. Section 7.2 shall not
be effective until the date the Internal Revenue Service issues a favorable
determination letter with respect to the Plan as amended and restated herein
(including section 7.2). Until section 7.2 becomes effective in accordance with
the immediately preceding sentence of this section 15.6, a Participant may
withdraw all or a portion of his or her Employee After-Tax Contribution Account,
subject to the condition that if a Participant has a Period of Participation of
less than five (5) years such Participant may not make any Employee After-Tax
Contributions under the Plan for at least six (6) months after receipt of the
in-service withdrawal.

         15.7 Governing Law. This Plan shall be governed by, construed and
administered in accordance with ERISA and any other applicable federal law;
provided, however, that to the extent not preempted by federal law, this Plan
shall be governed by, construed and administered under the laws of the
Commonwealth of Massachusetts, other than its laws respecting choice of law.

<PAGE>

                                    Exhibit A

                             Adopting Employers and
             Special Plan Provisions for Certain Adopting Employers
                              As of January 1, 2000
                          (Unless Indicated Otherwise)

[Separate Excel Spreadsheet]

<PAGE>

                                    Exhibit B

                 Special Withdrawal and Distribution Provisions

         This Exhibit B describes special withdrawal and distribution provisions
that apply with respect to certain assets transferred directly from other
retirement plans to the Plan in accordance with section 4.8 of the Plan. Except
as otherwise provided herein, the special withdrawal and distribution provisions
apply only with respect to the assets, together with earnings thereon,
transferred from the other plans (hereinafter referred to as the "Transferred
Account Balances").

I.       Provisions Effective Before April 1, 2002

         This Section I of Exhibit B includes the special withdrawal and
distribution provisions applicable on and after January 1, 1999 and before April
1, 2002. Section II of Exhibit B includes the special withdrawal and
distribution provisions applicable after March 31, 2002. This Section I of
Exhibit B includes the special provisions applicable to the Transferred Account
Balances from the following retirement plans:

     A.       Hughes Section 401(k) Savings Plan

     B.       Hughes STX Corporation 401(k) Retirement Plan

     C.       The 401(k) Plan for Employees of MESC Electronic Systems, Inc.

     C.       The 401(k) Plan for Bargaining Unit Employees of MESC Electronic
              Systems, Inc.

     D.       E-Systems, Inc. Employee Savings Plan

     E.       Serv-Air, Inc. Savings and Retirement Plan

     F.       Savings and Investment Plan of Standard Missile Company, L.L.C.

  A.   This paragraph A describes special withdrawal and distribution provisions
  applicable to Participants with Transferred Account Balances from the Hughes
  Section 401(k) Savings Plan:

 (1)   Directed Transfer to Account Plan: Notwithstanding section 8.3 of the
       Plan, a Participant who meets all of the requirements listed below may
       elect in writing on a form provided by the Administrator for this
       purpose to have his Transferred Account Balance transferred to the
       Hughes Personal Retirement Account Plan ("Account Plan") and applied to
       the purchase of an immediate annuity, in accordance with the applicable
       annuity factors and other provisions of the Account Plan. The
       requirements that must be met are:

       (a)     the Participant has had a Severance from Service;

       (b)     the Participant, as of the Severance from Service Date, was a
               participant in the Account Plan;

<PAGE>

                                     -2-

          (c)  the Participant is entitled to an immediate distribution of his
               or her accrued benefits under the Account Plan in the form of an
               annuity or a lump sum;

          (d)  the Participant has irrevocably elected to receive his accrued
               benefit under the Account Plan in the form of an immediate
               annuity; and

          (e)  the Participant was not, immediately prior to such Severance from
               Service - (i) a union employee whose terms of employment were the
               subject of a collective bargaining agreement or the subject of
               negotiation by a labor union or other labor organization, or (ii)
               an employee of CAE Vanguard Inc. or CAE ScreenPlates, Inc. or any
               subsidiary thereof.

     (2)  Special Distribution Rules for March 31, 1990 Account Balances: This
          subsection applies to Participants who had an account in the Hughes
          Section 401(k) Savings Plan on March 31, 1990 (a "3/31/90 Member"). In
          addition, the special distribution rules available to 3/31/90 Members
          apply solely with respect to the value of such account on the March
          31, 1990 valuation date under the plan (the "3/31/90 Balance").

          (a)  Additional Methods of Distribution: Notwithstanding section 8.3
               of the Plan, a 3/31/90 Member shall have the following additional
               forms of distribution elections available with respect to his
               3/31/90 Balance:

               (i)  withdrawal in a single lump sum distribution of the amount
                    credited to the Participant's 3/31/90 Balance attributable
                    to voluntary after-tax contributions with or without the
                    deferral of the receipt in a single lump sum distribution of
                    the Participant's 3/31/90 Balance attributable to pre-tax
                    contributions and rollover contributions to a date no later
                    than the April first (1st) following the calendar year
                    during which the Participant attains age seventy and
                    one-half (70-1/2); or

               (ii) purchase of an annuity contract from a life insurance
                    company under tables based on unisex mortality assumptions
                    with all or any portion of the Participant's 3/31/90 Balance
                    and taking a single lump sum distribution with respect to
                    any portion of such 3/31/90 Balance not applied to the
                    purchase of the annuity.

          (b)  Special Informational Requirement: Information showing the
               Participant the financial effects of the various distribution
               options available with respect to the 3/31/90 Balance shall be
               provided to the Participant at least ninety (90) days prior to
               the date the Participant becomes eligible for a benefit under the
               Plan.

          (c)  Special Annuity Contract Requirements: The following rules shall
               apply with respect to any 3/31/90 Member who elects the annuity
               contract option:

               (i)  The annuity contract shall provide for periodic annuity
                    payments for the life of the 3/31/90 Member and the
                    continuation of fifty percent (50%) of the amount of the
                    periodic annuity payments the 3/31/90 Member was receiving
                    (or was entitled to receive at his date of death) to the
                    3/31/90 Member's spouse on the date the annuity payments to
                    the 3/31/90 Member commenced (or, if earlier, on the date of
                    the 3/31/90 Member's death). The 3/31/90 Member may revoke
                    such election and elect any

<PAGE>

                                      -3-

                    other form of benefit; provided, however, that the 3/31/90
                    Member may not re-elect the forms of distribution specified
                    above for a reasonable period of time before the purchase of
                    the annuity contract, as determined by the Administrator.
                    Such annuity contract may not contain an "interest only
                    option" form of distribution. The revocation of an election
                    to have benefits paid in the form of an annuity must be made
                    in the form and manner prescribed by the Administrator and
                    after the Participant shall have been furnished with a
                    written explanation of (A) the terms and conditions of the
                    annuity benefit, (B) the Participant's right to revoke an
                    election of an annuity benefit, (C) the general financial
                    effect of such an election to revoke, (D) the requirement
                    that the consent of the Participant's spouse, if any, is
                    required to make a revocation and (E) the rights of the
                    Participant's spouse, if any. A Participant's election to
                    revoke the annuity benefit shall be effective only if it is
                    accompanied by the written notarized consent of the
                    Participant's spouse, if any, and shall specify the other
                    form of benefit and identify the beneficiary, if any, and
                    shall acknowledge the effect of the election.

              (ii)  The annuity contract must provide that benefits will
                    commence no later than the April first (1st) following the
                    calendar year during which the Participant attains age
                    seventy and one-half (70-1/2) and, if the spouse of the
                    3/31/90 Member is not the Participant's Beneficiary,
                    payments under any periodic payment option offered under the
                    annuity contract to such 3/31/90 Member and his Beneficiary
                    must be completed during a period not exceeding the life
                    expectancy of the 3/31/90 Member, or the joint life
                    expectancy of such Participant and his Beneficiary or, if
                    the Beneficiary is not treated as a natural person, five (5)
                    years. The forms of distribution offered under the annuity
                    contract must otherwise satisfy the minimum distribution
                    requirements under the Code.

              (iii) An annuity contract that does not provide for immediate
                    payment of benefits must provide for all other forms of
                    distribution then available to the 3/31/90 Member under the
                    Plan at all times prior to the commencement of benefit
                    payments under such contract.

              (iv)  The annuity contract option shall be available to any
                    3/31/90 Member with respect to any portion of his 3/31/90
                    Balance that he has elected to defer.

              (v)   Any 3/31/90 Member who elects the annuity contract option
                    shall have the annuity contract distributed to him in lieu
                    of cash or other property for the portion of his 3/31/90
                    Balance that was applied to the purchase of the annuity
                    contract.

(3)      In-Service Distributions of Matching Contributions After Age 70-1/2:
         Notwithstanding section 7.3 of the Plan, with respect to Participants
         who attain age seventy and one-half (70-1/2) prior to January 1, 1999,
         such Participants may withdraw, after attaining age seventy and
         one-half and subject to a minimum withdrawal amount of two hundred
         fifty dollars ($250), all or a part of the Participants' Transferred
         Account Balances attributable to Matching Contributions, regardless of
         whether the Participants have completed a Period of Participation of
         five (5) years.

<PAGE>
                                     -4-

B.   This paragraph B describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from the Hughes STX
Corporation 401(k) Retirement Plan:

(1)  Five (5)-Year Installment Distribution Option: Notwithstanding section 8.3
     of the Plan, Participants can elect to receive their Transferred Account
     Balances in accordance with one of the following distribution options:

     (a)  Payment in a single sum; or

     (b)  Payment in substantially equal annual installments over a period not
          to exceed five (5) years.

(2)  In-Service Distributions of Matching Contributions After Age 70-1/2:
     Notwithstanding section 7.3 of the Plan, with respect to Participants who
     attain age seventy and one-half (70-1/2) prior to January 1, 1999, such
     Participants may withdraw, after attaining age seventy and one-half and
     subject to a minimum withdrawal amount of two hundred fifty dollars ($250),
     all or a part of the Participants' Transferred Account Balances
     attributable to Matching Contributions, regardless of whether the
     Participants have completed a Period of Participation of five (5) years.

C.   This paragraph C describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from The 401(k)
Plan for Employees of MESC Electronic Systems, Inc. or The 401(k) Plan for
Bargaining Unit Employees of MESC Electronic Systems, Inc.:

(1)  Special Distribution Provisions for Philips Participants: This paragraph
     describes special withdrawal and recordkeeping requirements applicable to
     Participants whose Transferred Account Balances include assets transferred
     from the North American Philips Corporation Employee Savings Plan effective
     as of October 23, 1993 (hereinafter referred to as "Philips Participants"
     and "Philips Assets").

     (a)  Notwithstanding section 7.3 of the Plan to the contrary, with respect
          to Matching Contributions attributable to Philips Assets, Philips
          Participants may withdraw, subject to a minimum withdrawal amount of
          two hundred fifty dollars ($250), all or a portion of such Matching
          Contributions, regardless of whether the Participants have completed a
          Period of Participation of five (5) years.

     (b)  The portion of a Philips Participant's Transferred Account Balance
          attributable to after-tax contributions under the Philips Plan shall
          be maintained in two separate sub-accounts under the Plan - (i) one
          sub-account for after-tax contributions made prior to January 1, 1987,
          together with earnings thereon, and (ii) a second sub-account for
          after-tax contributions made after December 31, 1986, together with
          earnings thereon.

(2)  In-Service Distributions of Matching Contributions After Age 70-1/2:
     Notwithstanding section 7.3 of the Plan, with respect to Participants who
     attain age seventy and one-half (70-1/2) prior to January 1, 1999, such
     Participants may withdraw, after attaining age seventy and one-half and
     subject to a minimum withdrawal amount of two hundred fifty dollars ($250),
     all or a part of the Participants' Transferred Account Balances
     attributable

<PAGE>

                                      -5-

     to Matching Contributions, regardless of whether the Participants have
     completed a Period of Participation of five (5) years.

D.   This paragraph D describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from the E-Systems,
Inc. Employee Savings Plan:

(1)  Insured Annuity Distribution Option: Notwithstanding section 8.3 of the
     Plan, Participants can elect to receive their Transferred Account Balances
     in accordance with one of the following distribution options:

     (a)  Payment in a single, lump-sum; or

     (b)  Payment in the form of an annuity contract purchased from an insurance
          company. The election of an annuity and the distribution of the
          annuity contract shall be subject to the requirements imposed by
          sections 401(a)(11) and 417 of the Code.

(2)  Pre-April 1, 1995 Death Beneficiaries: Notwithstanding section 8.2(c) of
     the Plan, Beneficiaries of Participants who died prior to April 1, 1995 can
     defer the commencement of distributions in accordance with the provisions
     of section 401(a)(9) of the Code.

E.   This paragraph E describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from the Serv-Air,
Inc. Savings and Retirement Plan:

(1)  Installment Distribution Option: Notwithstanding section 8.3 of the Plan,
     Participants can elect to receive their Transferred Account Balances in
     accordance with one of the following distribution options:

     (a)  Payment in a single, lump-sum; or

     (b)  Payment in substantially equal installments over a period certain
          designated by the Participant, which period shall not exceed the life
          expectancy of the Participant or the joint life expectancies of the
          Participant and his or her Beneficiary.

F.   This paragraph F describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from the Savings
and Investment Plan of Standard Missile Company, L.L.C.:

(1)  Installment Distribution Option: Notwithstanding section 8.3 of the Plan,
     Participants can elect to receive their Transferred Account Balances in
     accordance with one of the following distribution options:

     (a)  Payment in a single, lump-sum; or

     (b)  Payment in substantially equal installments over a period certain
          designated by the Participant, which period shall not exceed the life
          expectancy of the

<PAGE>

                                      -6-

          Participant or the joint life expectancies of the Participant and his
          or her Beneficiary.

(2)  In-Service Distributions of Employer Contributions: Notwithstanding ARTICLE
     VII of the Plan, subject to the terms and conditions of section 7.7, after
     completing a Period of Participation of five (5) years or more, a
     Participant may withdraw all or a portion of his or her Transferred Account
     Balance attributable to employer contributions under the Savings and
     Investment Plan of Standard Missile Company, L.L.C.

(3)  Full Vesting Following Layoff: Notwithstanding ARTICLE VI, a Participant
     shall have a nonforfeitable right to all amounts in the Participant's
     Transferred Account Balance following a layoff. For this purpose, the term
     "layoff" shall mean an involuntary interruption of service due to reduction
     of work force with or without the possibility of recall to employment when
     conditions warrant.

II.  Provisions Effective After March 31, 2002

     This Section II of Exhibit B includes the special withdrawal and
distribution provisions applicable after March 31, 2002. Section I of Exhibit B
includes the special withdrawal and distribution provisions applicable on and
after January 1, 1999 and before April 1, 2002. This Section II of Exhibit B
includes the special provisions applicable to the Transferred Account Balances
from the following retirement plans:

  A.   Hughes Section 401(k) Savings Plan

  B.   The 401(k) Plan for Employees of MESC Electronic Systems, Inc.

  B.   The 401(k) Plan for Bargaining Unit Employees of MESC Electronic Systems,
       Inc.

  C.   E-Systems, Inc. Employee Savings Plan

A.   This paragraph A describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from the Hughes
Section 401(k) Savings Plan:

(1)  Directed Transfer to Account Plan: Notwithstanding section 8.3 of the Plan,
     a Participant who meets all of the requirements listed below may elect in
     writing on a form provided by the Administrator for this purpose to have
     his Transferred Account Balance transferred to the Hughes Personal
     Retirement Account Plan ("Account Plan") and applied to the purchase of an
     immediate annuity, in accordance with the applicable annuity factors and
     other provisions of the Account Plan. The requirements that must be met
     are:

     (a) the Participant has had a Severance from Service;

     (b) the Participant, as of the Severance from Service Date, was a
         participant in the Account Plan;

     (c) the Participant is entitled to an immediate distribution of his or her
         accrued benefits under the Account Plan in the form of an annuity or a
         lump sum;

<PAGE>
                                      -7-

     (d)  the Participant has irrevocably elected to receive his accrued benefit
          under the Account Plan in the form of an immediate annuity; and

     (e)  the Participant was not, immediately prior to such Severance from
          Service - (i) a union employee whose terms of employment were the
          subject of a collective bargaining agreement or the subject of
          negotiation by a labor union or other labor organization, or (ii) an
          employee of CAE Vanguard Inc. or CAE ScreenPlates, Inc. or any
          subsidiary thereof.

(2)  Special Distribution Rules for March 31, 1990 Account Balances: This
     subsection applies to Participants who had an account in the Hughes Section
     401(k) Savings Plan on March 31, 1990 (a "3/31/90 Member"). In addition,
     the special distribution rules available to 3/31/90 Members apply solely
     with respect to the value of such account on the March 31, 1990 valuation
     date under the plan (the "3/31/90 Balance").

     (a)  Additional Methods of Distribution: Notwithstanding section 8.3 of the
          Plan, a 3/31/90 Member shall have the following additional forms of
          distribution elections available with respect to his 3/31/90 Balance:

          (i)  withdrawal in a single lump sum distribution of the amount
               credited to the Participant's 3/31/90 Balance attributable to
               voluntary after-tax contributions with or without the deferral of
               the receipt in a single lump sum distribution of the
               Participant's 3/31/90 Balance attributable to pre-tax
               contributions and rollover contributions to a date no later than
               the April first (1st) following the calendar year during which
               the Participant attains age seventy and one-half (70-1/2).

B.   This paragraph B describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from The 401(k)
Plan for Employees of MESC Electronic Systems, Inc. or The 401(k) Plan for
Bargaining Unit Employees of MESC Electronic Systems, Inc.:

(1)  Special Distribution Provisions for Philips Participants: This paragraph
     describes special withdrawal and recordkeeping requirements applicable to
     Participants whose Transferred Account Balances include assets transferred
     from the North American Philips Corporation Employee Savings Plan effective
     as of October 23, 1993 (hereinafter referred to as "Philips Participants"
     and "Philips Assets").

     (a)  Notwithstanding section 7.3 of the Plan to the contrary, with respect
          to Matching Contributions attributable to Philips Assets, Philips
          Participants may withdraw, subject to a minimum withdrawal amount of
          two hundred fifty dollars ($250), all or a portion of such Matching
          Contributions, regardless of whether the Participants have completed a
          Period of Participation of five (5) years or attained age fifty-nine
          and one-half (59-1/2).

     (b)  The portion of a Philips Participant's Transferred Account Balance
          attributable to after-tax contributions under the Philips Plan shall
          be maintained in two separate sub-accounts under the Plan - (i) one
          sub-account for after-tax contributions made prior to January 1, 1987,
          together with earnings thereon, and (ii) a second sub-account for
          after-tax contributions made after December 31, 1986, together with
          earnings thereon.

<PAGE>

                                      -8-

C.   This paragraph C describes special withdrawal and distribution provisions
applicable to Participants with Transferred Account Balances from the E-Systems,
Inc. Employee Savings Plan:

(1)  Pre-April 1, 1995 Death Beneficiaries: Notwithstanding section 8.2(c) of
     the Plan, Beneficiaries of Participants who died prior to April 1, 1995 can
     defer the commencement of distributions in accordance with the provisions
     of section 401(a)(9) of the Code.

<PAGE>

                                    Exhibit C

            Designation of Prior Year Method for ADP and ACP Testing
                  (Plan sections 1.3(b) and 4.11(c)(1) and (2))

     Except as otherwise provided below, for Plan Years beginning after December
31, 1996, the Administrator shall use the "Current Year Method" for complying
with the nondiscrimination requirements in sections 401(k) and (m) of the Code:

Testing Plan *                                                      Plan Year(s)
------------                                                        ------------

*    The "Testing Plan" can be the entire Plan, or one or more disaggregated
"Testing Plans" as permitted under the applicable regulations or other guidance.

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