<PAGE>
Filed pursuant to Rule 424(b)(3)
Registration No. 333-78219
Raytheon Company
Offer to Exchange All Outstanding 6% Debentures Due 2010
($250,000,000 Aggregate Principal Amount Outstanding)
for
6% Exchange Debentures Due 2010
and
Offer to Exchange All Outstanding 6.40% Debentures Due 2018
($550,000,000 Aggregate Principal Amount Outstanding)
for
6.40% Exchange Debentures Due 2018
We are offering to exchange up to $250,000,000 aggregate principal amount of
our 6% Exchange Debentures Due 2010 that have been registered under the
Securities Act of 1933 for the same aggregate principal amount of our
outstanding 6% Debentures Due 2010. In addition, we are offering to exchange up
to $550,000,000 aggregate principal amount of our 6.40% Exchange Debentures Due
2018 that have been registered under the Securities Act of 1933 for the same
aggregate principal amount of our outstanding 6.40% Debentures Due 2018.
TERMS OF THE EXCHANGE OFFER
. Expires 5:00 P.M. New York City time on June 11, 1999, unless extended.
. We will accept for exchange all outstanding debentures that are validly
tendered and not validly withdrawn.
. You may withdraw the tender of your debentures at any time prior to the
expiration of the exchange offer.
. The exchange offer is not subject to any condition, other than that the
exchange offer not violate applicable law or any applicable interpretation
of the Staff of the Securities and Exchange Commission.
. We will not receive any proceeds from the consummation of the exchange
offer.
. We believe that the exchange of new debentures for outstanding debentures
will not be a taxable exchange for U.S. federal income tax purposes.
. We do not intend to apply for listing of any of the debentures to be issued
on any securities exchange or to arrange for them to be quoted on any
quotation system.
TERMS OF THE DEBENTURES TO BE ISSUED IN THE EXCHANGE
. The terms of the debentures to be issued in the exchange are substantially
identical to the terms of the debentures for which the offer to exchange is
being made, except that we believe that the debentures to be issued in the
exchange will be freely transferable under the Securities Act of 1933 and
will be issued free of any covenants regarding exchange and registration
rights.
. The debentures to be issued in the exchange and the debentures for which the
offer to exchange is being made are redeemable at our option at any time at
a redemption price determined as set forth in this Prospectus.
. Interest will be payable on the debentures to be issued in the exchange
semi-annually on June 15 and December 15 of each year, beginning June 15,
1999.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of our offer or the debentures to be
issued in the exchange or determined that this Prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
We may amend or supplement this Prospectus from time to time by filing
amendments or supplements as required. You should read this entire Prospectus
(and the accompanying Letter of Transmittal and related documents) and any
amendments of supplements carefully before making your investment decision.
The date of this Prospectus is May 18, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information...................................................... 3
Disclosure Regarding Forward-Looking Statements............................ 4
The Company................................................................ 5
Recent Financial Developments.............................................. 6
The Initial Debentures..................................................... 6
Use of Proceeds............................................................ 6
Capitalization............................................................. 7
Ratio of Net Debt to Total Capitalization.................................. 7
Ratio of Earnings to Fixed Charges......................................... 7
Selected Summary Financial Data............................................ 8
Description of the Debentures.............................................. 9
Certain United States Federal Income Tax Consequences...................... 19
Exchange Offer............................................................. 20
Plan of Distribution....................................................... 26
Validity of Debentures..................................................... 27
Experts.................................................................... 27
</TABLE>
Our principal executive offices are located at 141 Spring Street, Lexington,
Massachusetts 02421. Our telephone number is (781) 862-6600.
You should rely only on the information contained in this Prospectus. We
have not authorized anyone to provide you with information different from that
contained in this Prospectus or incorporated by reference in this Prospectus.
We are not making offers to exchange the Debentures or soliciting offers to
exchange the Debentures in any jurisdiction in which such an offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
The information in this prospectus is accurate as of the date on the front
cover. You should not assume that the information contained in this Prospectus
is accurate as of any other date.
2
<PAGE>
AVAILABLE INFORMATION
We have filed a registration statement on Form S-4 under the Securities Act
of 1933, as amended, with the Securities and Exchange Commission, relating to
$250,000,000 aggregate principal amount of our 6% Exchange Debentures Due 2010,
and $550,000,000 aggregate principal amount of our 6.40% Exchange Debentures
Due 2018. We refer to the 6% Exchange Debentures Due 2010 and the 6.40%
Exchange Debentures Due 2018 in this Prospectus together as the "Exchange
Debentures." This Prospectus does not contain all of the information included
in the Registration Statement. For a more complete understanding of the offer
to exchange Exchange Debentures Due 2010 and Exchange Debentures Due 2018 for
outstanding 6% Debentures Due 2010 and 6.40% Debentures Due 2018, respectively,
you should refer to the Registration Statement, including its exhibits. We file
annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy the Registration Statement and any other
document we file at the SEC's Public Reference Section, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at the worldwide web site
(http://www.sec.gov) maintained by the SEC and at the SEC's Regional Offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the operation of the Public Reference Section can be
obtained by calling 1-800-SEC-0330. Our Class B common stock, $0.01 par value
per share, and Class A common stock, $0.01 par value per share, are listed on
the New York Stock Exchange, the Chicago Stock Exchange and the Pacific
Exchange, where reports, proxy statements and other information concerning
Raytheon Company can also be inspected. The offices of the NYSE are located at
20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. These incorporated documents contain
important business and financial information about us that is not included in
or delivered with this Prospectus. The information incorporated by reference is
considered to be part of this Prospectus, and later information filed with the
SEC will update and supersede this information.
We incorporate by reference into this Prospectus (1) our Annual Report on
Form 10-K for the fiscal year ended December 31, 1998 and (2) any future
filings made by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 prior to the expiration date of the Exchange
Offer:
Any statement contained in this Prospectus or in any documents, that are
incorporated or deemed to be incorporated by reference into this Prospectus in
whole or in part, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus or
in any other subsequently filed document or portion thereof which also is or is
deemed to be incorporated by reference into this Prospectus modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
We will provide without charge to each person, including any beneficial
owner, to whom a Prospectus is delivered, on written or oral request of that
person, a copy of any or all of the documents we are incorporating by reference
into this Prospectus (other than exhibits to those documents unless such
exhibits are specifically incorporated by reference into those documents). Such
written requests should be addressed to:
Secretary, Raytheon Company
141 Spring Street
Lexington, Massachusetts 02421
You may direct telephone requests to the Secretary of Raytheon at (781) 862-
6600. To obtain timely delivery of any of this information, please write or
telephone us no later than June 7, 1999, the date five business days prior to
the expected consummation of the Exchange Offer.
3
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus and the information we are incorporating by reference into
it contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than statements
of historical facts included in this Prospectus and the information
incorporated by reference into this Prospectus that we expect or anticipate
will or may occur in the future, including, without limitation, certain
statements included in this Prospectus under "The Company" and located
elsewhere in this Prospectus regarding our financial position, business
strategy and measures to implement that strategy, including changes to
operations, competitive strengths, goals, expansion and growth of our business
and operations, plans, references to future success and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by us in light of our experience and our perception of
historical trends, current conditions and expected future developments as well
as other factors we believe are appropriate in the circumstances. However,
whether actual results and developments will conform with our expectations and
predictions is subject to a number of risks and uncertainties, including
without limitation:
. the significant considerations discussed in this Prospectus and the
information incorporated by reference into this Prospectus;
. competition from others;
. our ability to successfully complete the consolidation and
reorganization of Raytheon Systems Company in a manner that avoids
business disruptions and achieves anticipated cost and revenue
synergies;
. our ability to successfully implement our consolidation and cost
reduction plans for Raytheon Engineers & Constructors;
. the magnitude and timing of new business awards;
. declines in the procurement portion of the U.S. defense budget;
. our ability to detect and then achieve successful and timely resolution
of all Year 2000 problems;
. changes in general economic and business conditions;
. other factors which might be described from time to time in our filings
with the Securities and Exchange Commission; and
. other factors which are beyond our control and the control of our
subsidiaries, including, without limitation, the preparedness of our
critical suppliers to avoid Year 2000 related service and delivery
interruptions.
Consequently, all of the forward-looking statements we make in this
Prospectus and the information we are incorporating by reference into this
Prospectus are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected
consequences to or effects on us and our subsidiaries or our businesses or
operations. Additionally, important factors that could cause actual results to
differ materially from our expectations are disclosed in the documents we are
incorporating by reference, including statements under "Item 1-Business" of our
Annual Report on Form 10-K for the year ended December 31, 1998. All subsequent
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by any of those factors described
above and in the documents containing such forward-looking statements. We
expressly disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement.
4
<PAGE>
RAYTHEON COMPANY
Raytheon Company is a global technology leader, with worldwide 1998 sales of
more than $19.5 billion. We provide products and services in the areas of
defense and commercial electronics, business and special mission aircraft, and
engineering and construction. We have operations throughout the United States
and serve customers in more than 80 countries around the world.
Electronics
Defense Electronics. Simultaneously with the consummation of the merger with
the defense electronics business of Hughes Electronics Corporation ("Hughes
Defense"), we announced the creation of Raytheon Systems Company ("RSC") to
integrate our defense electronics businesses. RSC represents the combination
and consolidation of four legacy defense organizations--Raytheon Electronic
Systems, Raytheon E-Systems, Raytheon TI Systems and Hughes Defense.
RSC is engaged in the design, manufacture and service of advanced electronic
devices, equipment and systems for both government and commercial customers. In
addition to defense electronic systems, RSC has been successful in the
conversion of certain defense electronic technologies to commercial
applications such as air traffic control, environmental monitoring and
communications. RSC currently consists of the following five business units:
Defense Systems--anti-ballistic missile systems; air defense; air-to-air,
surface-to-air, and air-to-surface missiles; naval and maritime systems;
ship self-defense systems; torpedoes; strike, interdiction and cruise
missiles; and advanced munitions.
Sensors and Electronic Systems-- radar; electronic warfare; infrared;
laser; and GPS technologies. Programs are focused on land, naval,
airborne and spaceborne systems used for surveillance, reconnaissance,
targeting, navigation, commercial and scientific applications.
Command, Control, Communication and Information Systems--command, control
and communications systems; air traffic control systems; tactical
radios; satellite communication ground control terminals; wide area
surveillance systems; advanced transportation systems; simulators and
simulation systems; ground-based information processing systems; large
scale information retrieval, processing and distribution systems; and
global broadcast systems.
Aircraft Integration Systems--integration of airborne surveillance and
intelligence systems; aircraft modifications; and head-of-state aircraft
systems.
Training and Services--training services and integrated training
programs; technical services; and logistics and support.
Commercial Electronics. Our commercial electronics businesses produce, among
other things, marine radars and other marine electronics, transmit/receive
modules for satellite communications projects and other electronic components
for a wide range of applications.
Aircraft
Raytheon Aircraft offers one of the broadest product lines in the general
aviation market. Raytheon Aircraft manufactures, markets and supports piston-
powered aircraft, jet props and light and medium jets for the world's
commercial, regional airline and military aircraft markets. Raytheon Aircraft
is the prime contractor for the U.S. Air Force/U.S. Navy Joint Primary Aircraft
Training System (JPATS).
Engineering and Construction
Raytheon Engineers & Constructors ("RE&C") is one of the largest engineering
and construction firms in the United States, serving markets throughout the
world. RE&C is engaged in the design, construction and maintenance of
facilities and plants operated by a range of customers, including independent
power producers, utilities, petroleum companies, pulp and paper companies,
industrial concerns and governments.
5
<PAGE>
RECENT FINANCIAL DEVELOPMENTS
On April 22, 1999, we announced our financial results for the quarter ended
April 4, 1999. Earnings for the quarter were $241 million, or $0.71 per diluted
share, on sales of $4.9 billion, before the effect of an accounting change. Our
reported net income for the quarter ended April 4, 1999 of $188 million, or
$0.55 per diluted share, includes $53 million of after-tax adjustment related
to the adoption of a new accounting standard for the cost of start-up
activities. The increases in sales and net income were principally due to
increases in sales in each of our business segments, and a 13% increase in
operating income in our defense and commercial electronics segments.
THE INITIAL DEBENTURES
On December 14, 1998, we issued $250,000,000 aggregate principal amount of
our 6% Debentures Due 2010 and $550,000,000 of our 6.40% Debentures Due 2018 in
a transaction exempt from the registration requirements of the Securities Act
of 1933 pursuant to the exemptions to such requirements provided by Rule 144A
under this Act. These 6% Debentures Due 2010 are referred to in this Prospectus
as the "Initial Debentures Due 2010," the 6.40% Debentures Due 2018 are
referred to in this Prospectus as the "Initial Debentures Due 2018," and all of
such debentures are referred to together as the "Initial Debentures."
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the Exchange
Debentures. We used the net proceeds from the original sale of the Initial
Debentures on December 14, 1998 to refinance commercial paper borrowings with
various maturities and that bore interest at various rates.
6
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of Raytheon Company as of
December 31, 1998. This table should be read in conjunction with the Selected
Summary Financial Data included elsewhere in this Prospectus and the financial
statements, including the notes thereto, which are incorporated into this
Prospectus by reference.
<TABLE>
<CAPTION>
As of
December 31,
1998
-------------
<S> <C>
(in millions)
Notes payable and current portion of long-term debt.......... 827
Long-term debt
Initial Debentures......................................... 791
Other long-term debt....................................... 7,372
Total long-term debt..................................... 8,163
Stockholders' equity......................................... 10,856
Total capitalization..................................... 19,846
</TABLE>
RATIO OF NET DEBT TO TOTAL CAPITALIZATION
The following table sets forth Raytheon Company's consolidated ratio of net
debt to total capitalization at the end of fiscal years 1998, 1997, 1996, 1995
and 1994:
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
----------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
44.1% 48.4% 43.8% 36.8% 17.9%
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth Raytheon Company's consolidated ratio of
earnings to fixed charges for the end of the fiscal years 1998, 1997, 1996,
1995 and 1994:
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
--------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- -----
<S> <C> <C> <C> <C>
2.7x 2.7x 4.6x 6.0x 12.0x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of net earnings, taxes on income and fixed charges (less capitalized
interest) and fixed charges consist of interest expense, amortization of debt
discount and issuance expense, the portion of rents representative of an
interest factor and capitalized interest.
7
<PAGE>
SELECTED SUMMARY FINANCIAL DATA
The following tables present selected financial data for Raytheon Company.
The fiscal year-end financial data have been derived from the audited financial
statements of Raytheon Company incorporated by reference into this Prospectus
and should be read in conjunction with such financial statements and related
notes. The selected financial data of Raytheon for the 1998 and 1997 fiscal
years include the results of TI Defense from July 11, 1997, and the results of
Hughes Defense from December 17, 1997.
<TABLE>
<CAPTION>
Fiscal year Ended
December 31,
-------------------------
1998 1997 1996
------- ------- -------
(in millions)
<S> <C> <C> <C>
Operating Data:
Net sales......................................... $19,530 $13,673 $12,331
Operating income.................................. 2,036 1,084 1,198
Interest expense.................................. 739 397 256
Net income........................................ 864 527 761
Other Data:
EBITDA (a)........................................ $ 2,939 $ 1,606 $ 1,606
Depreciation and amortization..................... 761 457 369
Capital expenditures.............................. 509 459 406
Net cash provided by (used in):
Operating activities.............................. $ 820 $ 963 $ 291
Investing activities.............................. 791 (2,856) (938)
Financing activities.............................. (1,486) 2,053 575
<CAPTION>
Fiscal Year
ended December
31,
----------------
1998 1997
------- -------
(in millions)
<S> <C> <C> <C>
Balance Sheet Data:
Net working capital............................... $ 1,957 $(1,982)
Total assets...................................... 27,939 28,598
Debentures payable and current portion of long-
term debt........................................ 827 5,656
Long-term debt and capitalized leases............. 8,163 4,406
Stockholders' equity.............................. 10,856 10,425
</TABLE>
- --------
(a) EBITDA represents income before interest, income taxes, depreciation
(including certain amounts allocated to corporate overhead that are included
in general and administrative expenses) and amortization. EBITDA is not
intended to represent cash flow or any other measure of performance reported
in accordance with generally accepted accounting principles. Raytheon has
included EBITDA as it understands that EBITDA is used by certain investors as
one measure of a company's ability to service debt.
8
<PAGE>
DESCRIPTION OF THE DEBENTURES
The Initial Debentures were, and the Exchange Debentures will be, issued
under an Indenture dated as of July 3, 1995, as supplemented and amended by the
Supplemental Indenture dated as of December 14, 1998, between Raytheon and The
Bank of New York, as trustee. The following summary of certain provisions of
the Indenture, the Initial Debentures and the Exchange Debentures does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture, including the definitions of
certain terms contained in the Indenture and those terms made a part of the
Indenture by the Trust Indenture Act of 1939, as amended, the Initial
Debentures and the Exchange Debentures. Copies of the Indenture, the Initial
Debentures and the Exchange Debentures have been filed as exhibits to the
registration statement of which this Prospectus is a part, and are available
upon request from us. The Exchange Debentures are identical in all material
respects to the Initial Debentures, except for certain transfer restrictions
and registration rights relating to the Initial Debentures, and except that, if
the Exchange Offer is not consummated before July 12, 1999, the interest rate
on the Initial Debentures from and after such date until the consummation of
the Exchange Offer will increase by .25% per annum. Capitalized terms used but
not defined in the following summary have the respective meanings specified in
the Indenture. Certain of these capitalized terms are defined below, see "--
Certain Definitions." Section references are to the Indenture unless otherwise
indicated.
References to the "Debentures Due 2010" below are to the Initial Debentures
Due 2010 and Exchange Debentures Due 2010, treated as a single series of
Security, and references to the "Debentures Due 2018" below are to the Initial
Debentures Due 2018 and Exchange Debentures Due 2018, treated as a single
series of Security. References below to the "Debentures" are to the Initial
Debentures Due 2010, the Exchange Debentures Due 2010, the Initial Debentures
Due 2018 and the Exchange Debentures Due 2018, collectively.
General
The Debentures are limited to $800 million aggregate principal amount,
consisting of $250 million principal amount of Debentures Due 2010 and $550
million principal amount of Debentures Due 2018. The Exchange Debentures of
each series will be treated as a continuation of the Initial Debentures of such
series for calculation of interest and all other purposes, except that the
interest rate on the Initial Debentures may increase if the Exchange Offer is
not consummated before July 12, 1999, as described above. The Debentures are
senior unsecured obligations of Raytheon and will rank pari passu with all
senior unsecured debt of Raytheon and will be senior to all existing and future
subordinated debt of Raytheon, if any. Interest on the Debentures is payable in
United States dollars at the office or agency of Raytheon in the Borough of
Manhattan, the City of New York, New York or, at Raytheon's option, by check
mailed to the address of the registered holder. Interest will be calculated on
the basis of a 360-day year consisting of twelve 30-day months.
The Debentures Due 2010. Each Debenture Due 2010 bears interest from
December 14, 1998, at 6% per annum, payable semiannually on June 15 and
December 15 of each year, commencing June 15, 1999, to the person in whose name
the Debenture Due 2010 is registered, subject to certain exceptions as provided
in the Indenture, at the close of business on June 1 or December 1 (each a
"Record Date"), as the case may be, immediately preceding such June 15 or
December 15. The Debentures Due 2010 will mature on December 15, 2010, and are
not subject to any sinking fund provision.
The Debentures Due 2018. Each Debenture Due 2018 bears interest from
December 14, 1998, at 6.40% per annum, payable semiannually on June 15 and
December 15 of each year, commencing June 15, 1999, to the person in whose name
the Debenture Due 2018 is registered, subject to certain exceptions as provided
in the Indenture, at the close of business on the Record Date immediately
preceding such June 15 or December 15. The Debentures Due 2018 will mature on
December 15, 2018, and are not subject to any sinking fund provision.
9
<PAGE>
Optional Redemption
The Debentures Due 2010 and Debentures Due 2018 will be redeemable as a
whole at any time or in part from time to time, at the option of Raytheon, at a
redemption price equal to the greater of:
(1) 100% of the principal amount of such Debentures; and
(2) the sum of the present values of the remaining scheduled payments of
principal and interest thereon from the redemption date to the applicable
maturity date discounted, in either case, to the redemption date on a
semiannual basis, assuming a 360-day year consisting of twelve 30-day
months, at the Treasury Rate plus 20 basis points, plus any interest
accrued but not paid to the date of redemption.
"Treasury Rate" means, with respect to any redemption date for the
Debentures Due 2010 or the Debentures Due 2018, as the case may be,
(1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue; if no maturity is within three months before or
after the maturity date for the Debentures Due 2010 or the Debentures Due
2018, as the case may be, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month, or
(2) if such release, or any successor release, is not published during
the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue, expressed as a percentage of its principal amount, equal to
the Comparable Treasury Price for such redemption date. The Treasury Rate
shall be calculated on the third Business Day preceding the redemption
date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures Due 2010 or the Debentures Due 2018, as
the case may be, to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of such Debentures. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with
Raytheon.
"Comparable Treasury Price" means with respect to any redemption date for
the Debentures Due 2010 or the Debentures Due 2018, as the case may be,
(1) the average of four Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or
(2) if the Trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and two other primary U.S.
Government securities dealers in New York City (each, a "Primary Treasury
Dealer") appointed by the Trustee in consultation with Raytheon; provided,
however, that if any of the foregoing shall cease to be a Primary Treasury
Dealer, Raytheon shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable
10
<PAGE>
Treasury Issue, expressed in each case as a percentage of its principal amount,
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but no more than 60
days before the redemption date to each holder of Debentures to be redeemed.
Unless Raytheon defaults in payment of the redemption price, on and after
the redemption date interest will cease to accrue on the Debentures or portions
thereof called for redemption.
The Debentures will be issued only in registered form without coupons, in
denominations of $1,000 or integral multiples thereof. To the extent described
under "--Book Entry; Delivery and Form" below, the principal of and interest on
the Debentures will be payable and the transfer of the Debentures will be
registrable through The Depository Trust Company ("DTC"). No service charge
will be made for any registration of transfer or exchange of the Debentures,
but Raytheon may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith (Section 305).
Events of Default
The Indenture, with respect to any series of Securities then Outstanding,
defines an Event of Default as any one of the following events:
(1) default in the payment of any interest on any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days;
(2) default in the payment of the principal of, or premium, if any, on
any Security of that series when it shall become due and payable either at
its Maturity, by declaration as authorized in the Indenture or otherwise;
(3) failure to deposit any sinking fund payment when and as due by the
terms of a Security of that series;
(4) failure to perform any other covenants or agreements of Raytheon in
the Indenture, other than covenants or agreements included in the Indenture
solely for the benefit of a series or series of Securities thereunder other
than that series, and continuance of such default for a period of 60 days
after either the Trustee or the Holders of at least 25% of the principal
amount of the outstanding Securities of that series have given written
notice in the manner provided for therein specifying such failure as
provided in the Indenture;
(5) certain events in bankruptcy, insolvency or reorganization of
Raytheon; and
(6) any other Event of Default provided with respect to Securities of
that series (Section 501). If an Event of Default occurs with respect to
Securities of any series, the Trustee shall give the Holders of Securities
of such series notice of such default, provided, however, that in the case
of a default described in (4) above, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof (Section 602).
If an Event of Default with respect to the Securities of any series at the
time outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% of the aggregate principal amount of the outstanding Securities of
that series may declare the principal amount of all the Securities of that
series to be due and payable immediately. At any time after a declaration of
acceleration with respect to Securities of any series has been made, but before
a judgment or decree based on acceleration has been obtained, the Holders of a
majority of the aggregate principal amount of outstanding Securities of that
series may, under certain circumstances, rescind and annul such acceleration
(Section 502).
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the
11
<PAGE>
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
(Section 603). Subject to such provisions for the indemnification of the
Trustee and to certain other conditions, the Holders of a majority of the
aggregate principal amount of the outstanding Securities of any series will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of that series
(Section 512).
No Holder of Securities of any series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless:
(1) such Holder previously has given to the Trustee under the Indenture
written notice of a continuing Event of Default with respect to Securities
of that series;
(2) the Holders of at least 25% of the aggregate principal amount of the
outstanding Securities of that series have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding
as trustee;
(3) in the 60-day period following receipt of a written notice from a
Holder, the Trustee has not received from the Holders of a majority of the
aggregate principal amount of the outstanding Securities of that series a
direction inconsistent with such request; and
(4) the Trustee shall have failed to institute such proceeding within
such 60-day period (Section 507). However, such limitations do not apply to
a suit instituted by a Holder of a Security for enforcement of payment of
the principal of and premium, if any, or interest on such Security on or
after the respective due dates expressed in such Security (Section 508).
Raytheon is required to furnish to the Trustee annually a statement as to
the performance by Raytheon of certain of its obligations under the Indenture
and as to any default in such performance (Section 1007).
Any payment default on any Security regardless of amount, where the
aggregate principal amount of the series of such Security exceeds $50 million,
or any other default that causes acceleration of any such Security, would give
rise to a cross-default under Raytheon's senior credit facilities. In certain
circumstances, payment defaults on Securities may give rise to cross-defaults
under guarantees of Raytheon related to various receivables facilities of
certain subsidiaries of Raytheon.
Defeasance and Covenant Defeasance
The Indenture provides that Raytheon may elect either:
(1) to defease and be discharged from any and all obligations in respect
of a series of Securities then outstanding, except for certain obligations
to register the transfer of or exchange of such series of Securities,
replace stolen, lost or mutilated Securities, maintain paying agencies and
hold monies for payment in trust, ("defeasance"); or
(2) to be released from its obligations with respect to such series of
Securities under any covenants applicable to such series of Securities
which are determined pursuant to Section 301 of the Indenture to be subject
to covenant defeasance ("covenant defeasance"), and the occurrence of an
event described in clause (4) under "Events of Default" above, insofar as
with respect to covenants subject to covenant defeasance, shall no longer
be an Event of Default, in the case of either (1) or (2) if Raytheon
deposits, in trust, with the Trustee money or U.S. Government Obligations,
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money, in an amount sufficient,
without reinvestment, to pay all the principal of, premium, if any, and
interest on such series of Securities on the dates such payments are due,
which may include one or more redemption dates designated by Raytheon, and
any mandatory sinking fund or analogous payments thereon in accordance with
the terms of such series of Securities. Such a trust may only be
established if, among other things, (A) no Event of
12
<PAGE>
Default or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under the Indenture shall have occurred
and be continuing on the date of such deposit, (B) such deposit will not
cause the Trustee to have any conflicting interest with respect to other
securities of Raytheon and Raytheon shall have delivered an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for federal income tax purposes, and, in the case of legal defeasance
only, such Opinion of Counsel must be based on a ruling of the Internal
Revenue Service or other change in applicable federal income tax law, as a
result of such deposit or defeasance and will be subject to federal income
tax in the same manner as if such defeasance had not occurred.
Raytheon may exercise its defeasance option with respect to such series of
Securities notwithstanding its prior exercise of its covenant defeasance
option. If Raytheon exercises its defeasance option, payment of such series of
Securities may not be accelerated because of a subsequent Event of Default. If
Raytheon exercises its covenant defeasance option, payment of such series of
Securities may not be accelerated by reference to a subsequent breach of any of
the covenants noted under clause (2) in the preceding paragraph. In the event
Raytheon omits to comply with its remaining obligations with respect to such
series of Securities under the Indenture after exercising its covenant
defeasance option and such series of Securities are declared due and payable
because of the subsequent occurrence of any Event of Default, the amount of
money and U.S. Government Obligations on deposit with the Trustee may be
insufficient to pay amounts due on the Securities of such series at the time of
the acceleration resulting from such Event of Default. However, Raytheon will
remain liable in respect of such payments. See Article Thirteen and Article
Fourteen of the Indenture.
Modification and Waiver
Modifications and amendments of the Indenture may be made by Raytheon and
the Trustee with the consent of the Holders of not less than a majority of the
aggregate principal amount of the outstanding Securities of all series issued
under the Indenture and affected by the modification or amendments, voting as a
single class; provided, however, that no such modification or amendment may,
without the consent of the Holders of all Securities affected thereby, among
other things,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security;
(2) reduce the principal amount of, or the premium, if any, or interest
on, any Security;
(3) change the place or currency of payment of principal of, premium, if
any, or interest on any Security;
(4) impair the right to institute suit for the enforcement of any
payment on any Security on or after the Stated Maturity thereof (or in the
case of redemption, on or after the Redemption Date; or
(5) reduce the percentage of the principal amount of outstanding
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults
(Section 902).
The Holders of a majority of the aggregate principal amount of the
Securities of a series may, on behalf of all Holders of the Securities of such
series, waive any past default under the Indenture with respect to such series,
except a default in the payment of principal, premium, if any, or interest or
in the performance of certain covenants with respect to such series (Section
513).
Certain Covenants of the Corporation
Raytheon is subject to certain covenants under the Indenture with respect to
the Debentures.
13
<PAGE>
Limitation on Liens. Raytheon may not, nor may it permit any Significant
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset (including any stock or other securities of any Person,
including any Significant Subsidiary), or on any income or revenues or rights
in respect of any thereof, unless the Securities of any series then or
thereafter Outstanding shall be equally and ratably secured. This restriction
does not apply, however, to
(1) Liens on property or assets of Raytheon and its Subsidiaries
existing on the date of the Indenture, provided that such Liens shall
secure only those obligations which they secure as of the date of the
Indenture;
(2) any Lien existing on any property or asset prior to the acquisition
thereof by Raytheon or any Subsidiary, provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition and (ii)
such Lien does not apply to any other property or assets of Raytheon or any
Subsidiary;
(3) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves, to the extent required by GAAP, have been set aside;
(4) carriers', warehousemen's, mechanics', materialsmen's, repairmen's
or other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves, to the extent required by GAAP, have been set aside;
(5) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(6) deposits to secure the performance of bids, trade contracts, other
than for Indebtedness, leases, other than capital leases, statutory
obligations, surety and appeal bonds, advance payment bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(7) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of Raytheon
or any of its Subsidiaries;
(8) Liens upon any property acquired, constructed or improved by
Raytheon or any Subsidiary which are created or incurred within 360 days of
such acquisition, construction or improvement to secure or provide for the
payment of any part of the purchase price of such property or the cost of
such construction or improvement, including carrying costs, but no other
amounts, provided that any such Lien shall not apply to any other property
of Raytheon or any Subsidiary;
(9) Liens on the property or assets of any Subsidiary in favor of
Raytheon;
(10) extensions, renewals and replacements of Liens referred to in
paragraphs (i) through (ix) above, provided that any such extension,
renewal or replacement Lien shall be limited to the property or assets
covered by the Lien extended, renewed or replaced and that the obligations
secured by any such extension, renewal or replacement Lien shall be in an
amount not greater than the amount of the obligations secured by the Lien
extended, renewed or replaced;
(11) any Lien, of the type described in clause (3) of the definition
below of the term "Lien," on securities imposed pursuant to an agreement
entered into for the sale or disposition of such securities pending the
closing of such sale or disposition; provided such sale or disposition is
otherwise permitted hereunder;
(12) Liens arising in connection with any Permitted Receivables Program,
to the extent the sale by Raytheon or the applicable Subsidiary of its
accounts receivable is deemed to give rise to a Lien in favor of the
purchaser thereof in such accounts receivable or the proceeds thereof;
14
<PAGE>
(13) Liens on the capital stock or assets of any Subsidiary that is not
a Significant Subsidiary; and
(14) Liens to secure Indebtedness if, immediately after the grant
thereof, the aggregate amount of all Indebtedness secured by Liens that
would not be permitted but for this clause (14) does not exceed 15% of the
Stockholders' Equity as shown on the most recent consolidated balance sheet
of Raytheon filed with the SEC pursuant to the Securities Exchange Act of
1934.
Limitation on Sale/Leaseback Transactions. Transactions involving any sale
and leaseback by Raytheon or any Significant Subsidiary of any Principal
Property are prohibited, unless Raytheon or any such Significant Subsidiary,
within 120 days after the effective date of the lease, applies to the
retirement of any Funded Debt an amount equal to the greater of
(1) the net proceeds of the sale of the property leased; or
(2) the fair market value of the property leased within 90 days prior to
the effective date of the lease.
The amount to be so applied in respect of any such transaction will be
reduced, however, by the principal amount of any Securities surrendered to the
Trustee by Raytheon for cancellation and by the principal amount of Funded
Debt other than Securities, voluntarily retired by Raytheon, within 120 days
after the effective date of the lease, provided that no retirement may be
effected by payment on the final maturity date or pursuant to mandatory
sinking fund or prepayment provisions. This restriction does not apply,
however, to Raytheon or any Significant Subsidiary:
(1) entering into any transaction not involving a lease with a term of
more than three (3) years;
(2) entering into any transaction to the extent the Lien on any such
property subject to such sale and leaseback would be permitted under the
covenant described above under "Limitation on Liens"; or
(3) entering into any transaction for the sale and leaseback of any
property if such lease is entered into within 180 days after the later of
the acquisition, completion of construction or commencement of operation of
such property.
Leveraged Transactions. Except for the limitations on liens and
sale/leaseback transactions referred to above and on consolidations, mergers
or transfers of Raytheon's assets substantially as an entirety referred to
below, the Indenture and the terms of the Securities do not contain any
covenants or other provisions designed to afford Holders of any Securities
protection in the event of a highly leveraged transaction involving Raytheon.
Consolidation, Merger and Sale of Assets
Raytheon may not consolidate with or merge into any other Person or
transfer or lease its assets substantially as an entirety to any Person unless
any successor or purchaser is a corporation organized under the laws of the
United States of America, any State or the District of Columbia, and any such
successor or purchaser expressly assumes Raytheon's obligations under the
Debentures by an indenture supplemental to the Indenture. The Trustee may
receive an Opinion of Counsel as conclusive evidence of compliance with these
provisions (Article Eight).
Certain Definitions
Certain terms are defined in the Indenture and are used in this Prospectus
as follows:
"Debentures Closing Date" means December 14, 1998.
"Debentures Due 2010" means a single series of Securities issued pursuant
to the Indenture and designated either 6% Debentures Due 2010 or 6% Exchange
Debentures due 2010, limited in aggregate principal amount to $250,000,000.
"Debentures Due 2018" means a single series of Securities issued pursuant
to the Indenture and designated either 6.40% Debentures due 2018 or 6.40%
Exchange Debentures Due 2018, limited in aggregate principal amount to
$550,000,000.
15
<PAGE>
"Funded Debt" means all Indebtedness that will mature, pursuant to a
mandatory sinking fund or prepayment provision or otherwise, and all
installments of Indebtedness that will fall due, more than one year from the
date of determination. In calculating the maturity of any Indebtedness, there
shall be included the term of any unexercised right of the debtor to renew or
extend such Indebtedness existing at the time of determination.
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"Holder" means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or government or any
agency or political subdivision thereof in whose name a Security is registered
in the security register for such Securities maintained in accordance with the
terms of the Indenture.
"Indebtedness" of any Person shall mean, as at any date of determination,
all indebtedness (including capitalized lease obligations) of such Person and
its consolidated subsidiaries at such date that would be required to be
included as a liability on a consolidated balance sheet (excluding the
footnotes thereto) of such Person prepared in accordance with GAAP.
"Lien" means, with respect to any asset of any Person,
(1) any mortgage, deed of trust, lien, pledge, encumbrance, charge or
security interest in or on such asset;
(2) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the
foregoing) relating to such asset; and
(3) in the case of securities that constitute assets of such Person, any
purchase option, call or similar right of a third party with respect to
such securities.
"Permitted Receivables Program" means any receivables securitization program
pursuant to which Raytheon or any of the Subsidiaries sells accounts receivable
to any non-Affiliate in a "true sale" transaction; provided, however, that any
related indebtedness incurred to finance the purchase of such accounts
receivable is not includible on the balance sheet, excluding the footnotes
thereto, of Raytheon or any Subsidiary in accordance with GAAP and applicable
regulations of the SEC.
"Principal Property" means
(1) Raytheon's principal office building; and
(2) any manufacturing plant or principal research facility of Raytheon
or any Significant Subsidiary which is located within the United States of
America or Canada, except any such principal office building, plant or
facility which the Board of Directors by resolution declares is not of
material importance to the total business conducted by Raytheon and its
Subsidiaries as an entirety.
"Securities" means any Securities authenticated and delivered under the
Indenture, including the Debentures.
"Significant Subsidiary" means, at any time, any Subsidiary that would be a
"Significant Subsidiary" at such time, as such term is defined in Regulation S-
X promulgated by the SEC, as in effect on the date of the Indenture.
"Stockholders' Equity" means, at any date of determination, the
stockholders' equity at such date of Raytheon and its Subsidiaries, as
determined in accordance with GAAP.
"Subsidiary" means any corporation, partnership, limited liability company,
joint venture, trust or unincorporated organization more than 50% of the
outstanding voting interest of which is owned, directly or indirectly, by
Raytheon or by one or more other Subsidiaries, or by Raytheon and one or more
other Subsidiaries.
16
<PAGE>
Concerning the Trustee
The Bank of New York is Trustee under the Indenture. The Trustee performs
services for Raytheon in the ordinary course of business.
Book-Entry; Delivery and Form
The certificates representing the Initial Debentures have been, and the
Exchange Debentures will be, issued in fully registered form without interest
coupons. Each series of Debentures sold in offshore transactions in reliance on
Regulation S were initially represented by one or more permanent global
Debentures in definitive, fully registered form without interest coupons and
which was deposited with the Trustee as custodian for, and registered in the
name of a nominee of, DTC for the accounts of Euroclear and Cedel Bank.
Each series of Initial Debentures sold in reliance on Rule 144A are
represented by one or more permanent global Debentures in definitive, fully
registered form without interest coupons which was deposited with the Trustee
as custodian for, and registered in the name of a nominee of, DTC.
Each Global Security, and any Debentures issued for exchange therefor, are
subject to certain restrictions on transfer set forth in such securities.
Ownership of beneficial interests in a Global Security will be limited to
persons who have accounts with DTC ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by DTC or its nominee, with respect to
interests of participants, and the records of participants, with respect to
interests of persons other than participants, Qualified Institutional Buyers,
as defined in Rule 144A under the Securities Act of 1933 may hold their
interests in a 144A Global Security directly through DTC if they are
participants in such system, or indirectly through organizations which are
participants in such system.
Investors may hold their interests in a Regulation S Global Security
directly through Cedel Bank or Euroclear, if they are participants in such
systems, or indirectly through other organizations that are participants in the
DTC system. Cedel Bank and Euroclear will hold interests in the Regulation S
Global Securities on behalf of their participants through DTC.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Security, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Debentures represented by such Global Security
for all purposes under the Indenture and the Debentures. No beneficial owner of
an interest in a Global Security will be able to transfer that interest except
in accordance with DTC's applicable procedures, in addition to those provided
for under the Indenture and, if applicable, those of Euroclear and Cedel Bank.
Payments of the principal of, and interest on, a Global Security will be
made to DTC or its nominee, as the case may be, as the registered owner
thereof. Neither Raytheon, the Trustee nor any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
or for maintaining, supervising, or reviewing any records relating to such
beneficial ownership interests.
Raytheon expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Security, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of DTC or its nominee. Raytheon also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
17
<PAGE>
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. Transfers
between participants in Euroclear and Cedel Bank will be effected in the
ordinary way in accordance with their respective rules and operating
procedures.
Raytheon expects that DTC will take any action permitted to be taken by a
Holder of Debentures, including the presentation of Debentures for exchange as
described below, only at the direction of one or more participants to whose
account the DTC interests in a Global Security is credited and only in respect
of such portion of the aggregate principal amount of Debentures as to which
such participant or participants has or have given such direction. However, if
there is an Event of Default under the Debentures, DTC will exchange the
applicable Global Security for Certificated Securities, which it will
distribute to its participants and which may be legended as required by the
Indenture.
Raytheon understands that: DTC is a limited purpose trust company organized
under the laws of the State of New York, a "banking organization" within the
meaning of New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial Code and a
"Clearing Agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates and certain other organizations. Indirect access to the DTC system
is available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly ("indirect participants").
Although DTC, Euroclear and Cedel Bank are expected to follow the foregoing
procedures in order to facilitate transfers of interests in a Global Security
among participants of DTC, Euroclear and Cedel Bank, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither Raytheon nor the Trustee
will have any responsibility for the performance by DTC, Euroclear or Cedel
Bank or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
If DTC is at any time unwilling or unable to continue as a depositary for
the Global Securities and a successor depositary is not appointed by Raytheon
within 90 days, Raytheon will issue Certificated Securities, which may bear
certain legends referred to in the Indenture, in exchange for the Global
Securities. Holders of an interest in a Global Security may receive
Certificated Securities, which may bear certain legends, in accordance with the
DTC's rules and procedures in addition to those provided for under the
Indenture.
Same-Day Settlement and Payment
So long as DTC continues to make its settlement system available to
Raytheon, all payments of principal of and interest on the Debentures will be
made by Raytheon in immediately available funds.
18
<PAGE>
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following discussion of certain of the anticipated federal income tax
consequences of an exchange of the Initial Debentures for Exchange Debentures
and of the purchase at original issue, ownership, and disposition of the
Exchange Debentures is based upon the provisions of the Internal Revenue Code
of l986, as amended, the final, temporary, and proposed regulations promulgated
thereunder, and administrative rulings and judicial decisions now in effect,
all of which are subject to change, possibly with retroactive effect, or
different interpretations. This summary does not purport to deal with all
aspects of federal income taxation that may be relevant to you individually,
nor any tax consequences arising under the laws of any state, locality, or
foreign jurisdiction, and it is not intended to be applicable to all categories
of investors, some of which, such as dealers in securities, banks, insurance
companies, tax-exempt organizations, foreign persons, persons that hold
Exchange Debentures as part of a straddle or conversion transactions, persons
that purchase the Exchange Debentures from other holders at a discount or a
premium or holders subject to the alternative minimum tax, may be subject to
special rules. In addition, the summary is limited to persons that will hold
the Exchange Debentures as "capital assets" (generally, property held for
investment) within the meaning of Section 1221 of the Code.
You are advised to consult your own tax advisors regarding the Federal, state,
local, and foreign tax consequences of the exchange and the ownership and
disposition of Exchange Debentures.
Certain Income Tax Effects Of The Exchange Offer
Subject to the limitation set forth above, your exchange of Initial
Debentures for Exchange Debentures will not be a taxable event for you, and you
will not recognize any taxable gain or loss as a result of this exchange.
Accordingly, you would have the same adjusted basis and holding period in the
Exchange Debentures as you had in the Initial Debentures immediately before the
exchange. Further, the tax consequences of ownership and disposition of any
Exchange Debentures by you will be the same as the tax consequences of
ownership and disposition of Initial Debentures.
General
Non-U.S. Holders. The following summary describes certain United States
federal income tax consequences under current law that may be relevant to a
beneficial owner of the Exchange Debentures that is not
(1) a citizen or resident of the United States, (ii) a corporation
created or organized under the laws of the United States or any State
thereof or the District of Columbia; or
(2) a person otherwise subject to United States federal income taxation
on its worldwide income (any of the foregoing, a "Non-U.S. Holder").
This summary addresses only issues concerning Non-U.S. Holders that are
initial holders of the Exchange Debentures and that will hold the Exchange
Debentures as capital assets. It does not address the tax considerations
applicable to Non-U.S. Holders if income or gain in respect of the Exchange
Debentures is effectively connected with the conduct of a trade or business in
the United States.
Generally, payments of interest made with respect to the Exchange Debentures
to a Non-U.S. Holder will not be subject to United States federal income or
withholding tax, provided that:
(1) the Non-U.S. Holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of Raytheon
entitled to vote;
(2) the Non-U.S. Holder is not a controlled foreign corporation for
United States tax purposes that is directly or indirectly related to
Raytheon through stock ownership; and
(3) the Non-U.S. Holder complies with applicable certification
requirements.
19
<PAGE>
Any capital gain realized on the sale, exchange, retirement or other
disposition of an Exchange Debenture by a Non-U.S. Holder will not be subject
to United States federal income or withholding taxes unless such Non-U.S.
Holder is an individual who is present in the United States for a period or
periods aggregating 183 days or more in the taxable year of such sale,
exchange, retirement or other disposition and either has a "tax home" (as
defined for United States federal income tax purposes) in the United States or
an office or other fixed place of business in the United States to which the
sale or disposition is attributable.
The Exchange Debentures will not be includible in the estate of a Non-U.S.
Holder provided the Non-U.S. Holder does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of Raytheon
entitled to vote.
Information Reporting and Backup Withholding. You may be subject to
information reporting and backup withholding at a rate of 31% on certain
amounts paid to you unless you provide proof of an applicable exemption,
including a general exemption for Non-U.S. Holders and for corporations, or
correct taxpayer identification number, and otherwise comply with applicable
requirements of the information reporting and backup withholding rules. Any
amount withheld under the backup withholding rules may be allowed as a refund
or a credit against your United States federal income tax liability, provided
that the required information is furnished to the Internal Revenue Service.
1997 Regulations. On October 6, 1997, the United States Department of the
Treasury issued new regulations relating to withholding, backup withholding and
information reporting, which apply to payments made after December 31, 1999,
subject to certain transition rules. Among other things, these regulations
unify certain forms and procedures for certification, and clarify certain
reliance standards. Prospective investors should consult their own tax advisors
regarding the effect of these regulations.
EXCHANGE OFFER
General
We hereby offer, upon the terms and subject to the conditions set forth in
this Prospectus and in the accompanying Letter of Transmittal, which together
constitute the Exchange Offer, to exchange up to $250,000,000 aggregate
principal amount of Exchange Debentures Due 2010 and $550,000,000 aggregate
principal amount of Exchange Debentures Due 2018 for the same aggregate
principal amounts of Initial Debentures Due 2010 and Initial Debentures Due
2018, respectively, properly tendered on or prior to the Expiration Date and
not withdrawn as permitted pursuant to the procedures described below. We are
making the Exchange Offer for all of the Initial Debentures Due 2010 and
Initial Debentures Due 2018; the total aggregate principal amount of Initial
Debentures Due 2010 and Exchange Debentures Due 2010 will not exceed
$250,000,000 and the total aggregate principal amount of Initial Debentures Due
2018 and Exchange Debentures Due 2018 will not exceed $550,000,000.
Purpose Of The Exchange Offer
Under the terms of the Registration Rights Agreement, dated December 9,
1998, among Raytheon and Credit Suisse First Boston Corporation and Morgan
Stanley & Co. Incorporated as representatives of the initial purchasers of the
Initial Debentures, we are required to file with the SEC and use our reasonable
best efforts to cause to become effective a registration statement with respect
to issues of Exchange Debentures identical in all material respects to the
Initial Debentures and, upon becoming effective, to offer the Holders of the
Debentures of each series the opportunity to exchange their Initial Debentures
for the Exchange Debentures of the identical series.
We will be entitled to close the Exchange Offer provided that we have
accepted all Initial Debentures that have been validly tendered in accordance
with the terms of the Exchange Offer. Initial Debentures not tendered in the
Exchange Offer shall bear interest at the same rates in effect at the time of
issuance of the Debentures.
Expiration Date; Extensions; Termination; Amendments
The Exchange Offer will expire at 5:00 p.m., New York City time, on June 11,
1999, unless we, in our sole discretion, extend the period of time described
below for which the Exchange Offer is open. The
20
<PAGE>
expiration date will be at least 20 days after the commencement of the Exchange
Offer, or longer if required by applicable law. We expressly reserve the right,
at any time or from time to time, to extend the period of time during which the
Exchange Offer is open, and as a result delay acceptance for exchange of any
Initial Debentures by giving oral notice, which shall be confirmed in writing,
or written notice to the Exchange Agent and by giving written notice of this
extension to the holders of the Initial Debentures or by timely public
announcement communicated, unless otherwise required by applicable law or
regulation, by making a release through the Dow Jones News Service, in each
case, no later than 9:00 a.m. New York City time, on the next business day
after the previously scheduled expiration date. Such announcement may state
that we are extending the Exchange Offer for a specified period of time. During
any such extension, all Initial Debentures previously tendered will remain
subject to the Exchange Offer.
In addition, we expressly reserve the right to terminate or amend the
Exchange Offer and not to accept for exchange any Initial Debentures not
previously accepted for exchange upon the occurrence of any of the events
specified below under "--Certain Conditions to the Exchange Offer". If any such
termination or amendment occurs, we will notify the Exchange Agent and will
either issue a press release or give oral or written notice to the holders of
the Initial Debentures as promptly as practicable.
Procedures for Tendering Initial Debentures
Your tender to us of Initial Debentures as set forth below and the
acceptance by us of such tender will constitute a binding agreement between you
and us upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal.
You may tender Initial Debentures by (1) properly completing and signing the
Letter of Transmittal or a facsimile copy of the Letter of Transmittal and
delivering it, together with the certificate or certificates representing the
Initial Debentures being tendered, if any, and any required signature
guarantees, to the Exchange Agent at its address set forth below on or prior to
5:00 p.m., New York City time, on the expiration date, or complying with the
procedure for book-entry transfer described below, or (2) complying with the
guaranteed delivery procedures described below.
The method of delivery of Initial Debentures, Letters of Transmittal and all
other required documents is at your election and risk and the delivery will be
deemed made only when actually received by the Exchange Agent. If such delivery
is by mail, we recommend that registered mail properly insured, with return
receipt requested, or an overnight or hand delivery service, be used. In all
cases, sufficient time should be allowed to insure timely delivery. No Initial
Debentures or Letters of Transmittal should be sent to us.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed unless the Initial Debentures surrendered for
exchange pursuant thereto are tendered (1) by a registered holder of the
Initial Debentures who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal,
or (2) for the account of an Eligible Institution as defined herein. In the
event that signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, are required to be guaranteed, such guarantee must be by a
participant in a recognized signature guaranty medallion program (each an
"Eligible Institution"). If Initial Debentures are registered in the name of a
person other than a signer of the Letter of Transmittal, the Initial Debentures
surrendered for exchange must be endorsed by, or be accompanied by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by us in our sole discretion, duly executed by the registered holder
with the signature thereon guaranteed by an Eligible Institution.
The Exchange Agent will make a request promptly after the date of this
Prospectus to establish accounts with respect to the Initial Debentures at the
book-entry transfer facility, The Depository Trust Company, for the purpose of
facilitating the Exchange Offer, and subject to the establishment thereof, any
financial institution
21
<PAGE>
that is a participant in the book-entry transfer facility's system may make
book-entry delivery of Initial Debentures by causing such book-entry transfer
facility to transfer such Initial Debentures into the Exchange Agent's account
with respect to the Initial Debentures in accordance with the book-entry
transfer facility's procedures for such transfer. Although delivery of Initial
Debentures may be effected through book-entry transfer in the Exchange Agent's
account at the book-entry transfer facility, an appropriate Letter of
Transmittal with any required signature guarantee and other required documents
must in each case be transmitted to and received or confirmed by the Exchange
Agent at its address set forth below on or prior to the Expiration Date, or, if
the guaranteed delivery procedures described below are complied with, within
the time period provided under such procedures.
If you desire to accept the Exchange Offer and time will not permit a Letter
of Transmittal or Initial Debentures to reach the Exchange Agent on or prior to
the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, you may effect an exchange if the Exchange Agent
has received at its address or facsimile number set forth below on or prior to
the Expiration Date a letter, telegram or facsimile from an Eligible
Institution setting forth your name and address, the name in which the Initial
Debentures are registered and, if possible, the certificate number or numbers
of the certificate or certificates representing the Initial Debentures to be
tendered, and stating that the tender is being made thereby and guaranteeing
that within three business days after the Expiration Date the Initial
Debentures in proper form for transfer, or a confirmation of book-entry
transfer of such Initial Debentures into the Exchange Agent's account at the
book-entry transfer facility, will be delivered by such Eligible Institution
together with a properly completed and duly executed Letter of Transmittal and
any other required documents. Unless Initial Debentures being tendered by the
above-described method are deposited with the Exchange Agent within the time
period set forth above, accompanied or preceded by a properly completed Letter
of Transmittal and any other required documents, we may, at our option, reject
the tender. You may obtain copies of a Notice of Guaranteed Delivery which may
be used by an Eligible Institution for the purposes described in this paragraph
from the Exchange Agent.
Your tender will be deemed to have been received as of the date when (1)
your properly completed and duly signed Letter of Transmittal accompanied by
the Initial Debentures, or a confirmation of book-entry transfer of such
Initial Debentures into the Exchange Agent's account at the book-entry transfer
facility, is received by the Exchange Agent, or (2) a Notice of Guaranteed
Delivery or letter, telegram or facsimile to similar effect (as provided above)
from an Eligible Institution is received by the Exchange Agent. Issuances of
Exchange Debentures in exchange for Initial Debentures tendered pursuant to a
Notice of Guaranteed Delivery or letter, telegram or facsimile to similar
effect by an Eligible Institution will be made only against deposit of the
Letter of Transmittal and any other required documents and the tendered Initial
Debentures.
All questions as to the validity, form, eligibility, time of receipt and
acceptance of Initial Debentures tendered for exchange will be determined by us
in our sole discretion, which determination will be final and binding on all
parties. We reserve the right to reject any and all tenders of any particular
Initial Debentures not properly tendered or reject any particular shares of
Initial Debentures the acceptance of which might, in our judgment, be unlawful.
We also reserve the absolute right to waive any defects or irregularities or
condition of the Exchange Offer as to any particular Initial Debentures either
before or after the Expiration Date, including the right to waive the
ineligibility of any holder who seeks to tender Initial Debentures in the
Exchange Offer. The interpretation of the terms and conditions of the Exchange
Offer, including the Letter of Transmittal and the instructions thereto, by us
shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Initial Debentures for exchange
must be cured within such time as we shall determine. Neither us nor any other
person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Initial Debentures for exchange, nor
shall any of them incur any liability for failure to give such notification.
If the Letter of Transmittal or any Initial Debentures or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-
fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
unless waived by us, proper evidence satisfactory to us of their authority to
so act must be submitted.
22
<PAGE>
If you are not a broker-dealer or are a broker-dealer but are not receiving
Exchange Debentures for your own account, by tendering you will represent to us
that, among other things, the Exchange Debentures acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of your business, that
you are not engaged in, and do not intend to engage in, and have no arrangement
or understanding with any person to participate in the distribution of such
Exchange Debentures and you are not an "affiliate" of Raytheon as defined in
Rule 405 under the Securities Act of 1933 or, if you are an affiliate, you will
comply with the registration and prospectus delivery requirements of the
Securities Act of 1933, to the extent applicable. Each broker-dealer that is
receiving Exchange Debentures for its own account in exchange for Initial
Debentures that were acquired as a result of market-making or other trading
activities will represent to us that it will deliver a prospectus in connection
with any resale of such Initial Debentures.
In addition, we reserve the right in our sole discretion to (1) purchase or
make offers for any Initial Debentures that remain outstanding subsequent to
the expiration date, or, as set forth under "--Certain Conditions to the
Exchange Offer", to terminate the Exchange Offer and (2) to the extent
permitted by applicable law, purchase Initial Debentures in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers may differ from the terms of the Exchange Offer.
Withdrawal Rights
You may withdraw tenders of Initial Debentures at any time prior to 5:00
p.m., New York City time, on the business day prior to the expiration date. For
a withdrawal to be effective, a written notice of withdrawal sent by letter,
telegram or facsimile must be received by the Exchange Agent at any time prior
to 5:00 p.m., New York City time, on the business day prior to the expiration
date at its address or facsimile number set forth below. Any such notice of
withdrawal must (i) specify the name of the person having tendered the Initial
Debentures to be withdrawn (the "Depositor"), the name in which the Initial
Debentures are registered or, if tendered by book-entry transfer, the name of
the participant listing as the owner of such Initial Debentures, if different
from that of the Depositor, (ii) identify the Initial Debentures to be
withdrawn, including the certificate number of numbers of the certificate or
certificates representing such Initial Debentures and the aggregate principal
amount of such Initial Debentures, (iii) be signed by the holder in the same
manner as the original signature on the Letter of Transmittal by which such
Initial Debentures were tendered, including any required signature guarantees,
or be accompanied by documents of transfer sufficient to permit the Transfer
Agent with respect to the Initial Debentures to register the transfer of such
Initial Debentures into the name of the person withdrawing the tender and (iv)
specify the name in which any such Initial Debentures are to be registered, if
different from that of the Depositor. All questions as to the validity, form
and eligibility, including time of receipt, of such withdrawal notices will be
determined by us in our sole discretion, which determination will be final and
binding on all parties. Any Initial Debentures so withdrawn will be deemed not
to have been validly tendered for purposes of the Exchange Offer and no
Exchange Debentures will be issued with respect thereto unless the Initial
Debentures so withdrawn are validly retendered. Any Initial Debentures which
have been tendered but which are withdrawn will be returned to the holder
thereof without cost to such holder as soon as practicable after such
withdrawal. Properly withdrawn Initial Debentures may be retendered by
following one of the procedures described above under "--Procedures for
Tendering Initial Debentures" at any time prior to the Expiration Date.
Acceptance of Initial Debentures for Exchange; Delivery of Exchange Debentures
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
we will accept, promptly after the Expiration Date, all Initial Debentures
properly tendered and will issue the Exchange Debentures promptly after
acceptance of the Exchange Offer. See "--Certain Conditions to the Exchange
Offer" below. For purposes of the Exchange Offer, we will be deemed to have
accepted properly tendered Initial Debentures for exchange when we have given
oral or written notice thereof to the Exchange Agent.
In all cases, issuance of the Exchange Debentures in exchange for Initial
Debentures pursuant to the Exchange Offer will be made only after timely
receipt by us of such Initial Debentures, a properly completed
23
<PAGE>
and duly executed Letter of Transmittal and all other required documents. If
any tendered Initial Debentures are not accepted for exchange for any reason
set forth in the terms and conditions of the Exchange Offer, such unaccepted
Initial Debentures will be returned without expense to the tendering holder
thereof as promptly as practicable after the rejection of such tender or the
expiration or termination of the Exchange Offer.
Untendered Initial Debentures
Holders of Initial Debentures whose Initial Debentures are not tendered or
are tendered but not accepted in the Exchange Offer will continue to hold such
Initial Debentures and will be entitled to all the rights and preferences and
subject to the limitations applicable thereto. Following consummation of the
Exchange Offer, the holders of Initial Debentures will continue to be subject
to the existing restrictions upon transfer thereof and, except as provided in
this Prospectus, we will have no further obligation to such holders to provide
for the registration under the Securities Act of 1933 of the Initial Debentures
held by them. To the extent that Initial Debentures are tendered and accepted
in the Exchange Offer, the trading market for untendered and tendered but
unaccepted Initial Debentures could be adversely affected.
Certain Conditions to the Exchange Offer
Notwithstanding any other term of the Exchange Offer, we will not be
required to accept for exchange, or issue Exchange Debentures in exchange for,
any Initial Debentures, and may terminate or amend the Exchange Offer, if at
any time before the acceptance of such Initial Debentures for exchange, any of
the following events shall occur:
(1) an injunction, order or decree shall have been issued by any court
or governmental agency that would prohibit, prevent or otherwise materially
impair our ability to proceed with the Exchange Offer; or
(2) there shall occur a change in the current interpretation of the
staff of the Commission which current interpretation permits the Exchange
Debentures issued pursuant to the Exchange Offer in exchange for the
Initial Debentures to be offered for resale, resold and otherwise
transferred by holders thereof, other than (1) a broker-dealer who
purchases such Exchange Debentures directly from Raytheon to resell
pursuant to Rule 144A, Regulation S or any other available exemption under
the Securities Act of 1933 or (2) a person that is an affiliate of Raytheon
within the meaning of Rule 405 under the Securities Act of 1933, without
compliance with the registration and prospectus delivery provisions of the
Securities Act of 1933 provided that such Exchange Debentures are acquired
in the ordinary course of such holders' business and such holders have no
arrangement with any person to participate in the distribution of Exchange
Debentures.
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any such condition or may be
waived by us in whole or in part at any time and from time to time in our sole
discretion. The failure by us at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted by us at any time and from
time to time.
If we determine that we may terminate the Exchange Offer, as set forth
above, we may (1) refuse to accept any Initial Debentures and return any
Initial Debentures that have been tendered to their holders, (2) extend the
Exchange Offer and retain all Initial Debentures tendered prior to the
expiration date, subject to the rights of such holders of tendered shares of
Initial Debentures to withdraw their tendered Initial Debentures, or (3) waive
such termination event with respect to the Exchange Offer and accept all
properly tendered Initial Debentures that have not been withdrawn. If such
waiver constitutes a material change in the Exchange Offer, we will disclose
such change by means of a supplement to this Prospectus that will be
distributed to each registered holder of Initial Debentures, and we will extend
the Exchange Offer for a period of five to ten business days, depending upon
the significance of the waiver and the manner of disclosure to the registered
holders of the Initial Debentures, if the Exchange Offer would otherwise expire
during such period.
24
<PAGE>
In addition, we will not accept for exchange any Initial Debentures
tendered, and no Exchange Debentures will be issued in exchange for any such
Initial Debentures, if at any time any stop order shall be threatened by the
SEC or in effect with respect to the Registration Statement.
The Exchange Offer is not conditioned on any minimum principal amount of
Initial Debentures being tendered for exchange.
Exchange Agent
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Questions regarding Exchange Offer procedures should be directed to the
Exchange Agent addressed as follows:
By Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
Corporate Trust Division Corporate Trust Division
101 Barclay Street, 21 W 101 Barclay Street, 21 W
New York, New York 10286 New York, New York 10286
Attention: Diane Amoroso Attention: Diane Amoroso
Reorganization Unit Reorganization Unit
By Facsimile: (212) 815-6339
Confirm by Telephone: (212) 815-5076
The Bank of New York is also the Transfer Agent for the Initial Debentures
and Exchange Debentures.
Solicitation of Tenders; Fees and Expenses
We have not retained any dealer-manager in connection with the Exchange
Offer and will not make any payments to brokers, dealers or other persons
soliciting acceptance of the Exchange Offer. We will, however, pay the
Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith. The cash expenses to be incurred by us in connection
with the Exchange Offer will be paid by us.
No person has been authorized to give any information or to make any
representation in connection with the Exchange Offer other than those
contained in this Prospectus. If given or made, such information or
representations should not be relied upon as having been authorized by us.
Neither the delivery of this Prospectus nor any exchange made hereunder shall,
under any circumstances, create any implication that there has been no change
in our affairs since the respective dates as of which information is given
herein. The Exchange Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Initial Debentures in any jurisdiction in
which the making of the Exchange Offer or the acceptance of Initial Debentures
would not be in compliance with the laws of such jurisdiction.
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of
Initial Debentures pursuant to the Exchange Offer. If, however, certificates
representing Exchange Debentures or Initial Debentures not tendered or
accepted for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the
Initial Debentures tendered, or if tendered Initial Debentures are registered
in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Exchange Debentures pursuant to the Exchange Offer, then the
amount of any such transfer taxes, whether imposed on the registered holder or
any other persons, will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holders.
25
<PAGE>
Accounting Treatment
No gain or loss for accounting purposes will be recognized by us upon the
consummation of the Exchange Offer. Expenses incurred in connection with the
issuance of the Exchange Debentures will be amortized by us over the term of
the Exchange Debentures under generally accepted accounting principles.
PLAN OF DISTRIBUTION
Based on no-action letters issued by the staff of the SEC to third parties,
we believe that the Exchange Debentures issued pursuant to the Exchange Offer
in exchange for Initial Debentures may be offered for resale, resold and
otherwise transferred by holders thereof other than (1) a broker-dealer who
purchases such Exchange Debentures directly from us to resell pursuant to Rule
144A or any other available exemption under the Securities Act of 1933 or (2) a
person that is an affiliate of ours within the meaning of Rule 405 under the
Securities Act of 1933, without compliance with the registration and prospectus
delivery requirements of the Securities Act of 1933 provided that Exchange
Debentures are acquired in the ordinary course of such holders' business and
such holders have no arrangement with any person to participate in the
distribution of such Exchange Debentures. Any holder of Initial Debentures who
tenders in the Exchange Offer for the purpose of participating in a
distribution of the Exchange Debentures could not rely on such interpretation
by the staff of the SEC and must comply with the registration and prospectus
delivery requirements of the Securities Act of 1933 in connection with any
resale transaction. Thus, any Exchange Debentures acquired by such holders will
not be freely transferable except in compliance with the Securities Act of
1933.
Each broker-dealer that receives Exchange Debentures for its own account in
exchange for Initial Debentures acquired as a result of market-making or other
trading activities must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Debentures. For a period of 90 days
after the Expiration Date, this Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of such Exchange Debentures. During such 90-day period, we will
use our reasonable best efforts to make this Prospectus available to any
broker-dealer for use in connection with such resale, provided that such
broker-dealer indicates in the Letter of Transmittal that it is a broker-
dealer.
We will not receive any proceeds from any sale of Exchange Debentures by
broker-dealers. Exchange Debentures received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Debentures or a combination of
such methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through broker-dealers who
may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such Exchange Debentures. Any
broker-dealer that resells Exchange Debentures that were received by it for its
own account pursuant to the Exchange Offer and any person that participates in
the distribution of such Exchange Debentures may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933 and any profit
on any such resale of Exchange Debentures and any commissions or concessions
received by any such broker-dealers may be deemed to be underwriting
compensation under the Securities Act of 1933. The Letter of Transmittal states
that a broker-dealer, by acknowledging that it will deliver and by delivering a
prospectus, will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act of 1933.
We will indemnify the holders of the Exchange Debentures (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act of 1933.
26
<PAGE>
VALIDITY OF DEBENTURES
The validity of the Exchange Debentures will be passed upon for Raytheon by
Thomas D. Hyde, Esq., the Senior Vice President and Secretary of Raytheon
Company.
EXPERTS
Our consolidated balance sheets as of December 31, 1998 and 1997 and the
related statements of income, stockholders' equity and cash flows for each of
the three years in the period ended December 31, 1998 and the related financial
statement schedule, incorporated by reference in this Registration Statement,
have been incorporated into this Registration Statement in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
27
