PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A-No. 1
/X/ Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] for the fiscal year ended
December 31, 1993
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period
from............... to ..............
Commission File Number 1-2833
RAYTHEON COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
04-1760395
(I.R.S. Employer Identification No.)
141 SPRING STREET, LEXINGTON, MASSACHUSETTS 02173
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code
(617) 862-6600
The sole purpose of this Form 10-K/A is to file Annual Reports on Form 11-
K for Raytheon's various Savings and Investment Plans.
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.
RAYTHEON COMPANY (REGISTRANT)
BY /s/ Thomas D. Hyde
Thomas D. Hyde, Vice President -
General Counsel for Registrant<PAGE>
DATE June 30, 1994<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit No. Exhibit
(99.1) Annual Report for the Raytheon Savings
and Investment Plan
(99.1a) Consent of Independent Public Accountants
(99.1b) Raytheon Savings and Investment Plan
(99.2) Annual Report for the Raytheon Savings
and Investment Plan for Specified Hourly
Payroll Employees
(99.2a) Consent of Independent Public Accountants
(99.2b) Raytheon Savings and Investment Plan for
Specified Hourly Payroll Employees, filed as
an exhibit to Raytheon's 1993 Form 8, is hereby
incorporated by reference.
(99.3) Annual Report for the Raytheon Subsidiary Savings
and Investment Plan (formerly the Caloric
Savings and Investment Plan)
(99.3a) Consent of Independent Public Accountants
(99.3b) Raytheon Subsidiary Savings and Investment Plan
(99.4) Annual Report for the Raytheon Employee Savings
and Investment Plan (formerly The Badger
Company, Inc. Savings and Investment Plan)
(99.4a) Consent of Independent Public Accountants
(99.4b) The Raytheon Employee Savings and Investment Plan
(99.5) Annual Report for the United Engineers &
Constructors Savings and Investment Plan
(99.5a) Consent of Independent Public Accountants
(99.5b) United Engineers & Constructors Savings
and Investment Plan (merged into
the Raytheon Savings and Investment Plan
effective March 23, 1993)<PAGE>
PAGE 1
(EXHIBIT (99.1)
ANNUAL REPORT
-------------
Pursuant to Section 15(d) of the
Securities Act of 1934
For the Fiscal Year Ended
December 31, 1993
-------------
RAYTHEON SAVINGS AND INVESTMENT PLAN
------------------------------------<PAGE>
PAGE 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We have audited the accompanying statements of net assets available
for plan benefits of the Raytheon Savings and Investment Plan as of
December 31, 1993 and 1992, and the related statements of changes in net
assets available for plan benefits for each of the three years in the
period ended December 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Raytheon Savings and Investment Plan as of December 31,
1993 and 1992, and the changes in net assets available for plan benefits
for each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand
Boston, Massachusetts COOPERS & LYBRAND
June 17, 1994<PAGE>
PAGE 3
RAYTHEON SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1993 and 1992
-------
1993 1992
---- ----
Assets:
Investments, at fair value
(Notes B, E, F and I) $1,355,652,554 $1,067,255,094
Receivables:
Accrued investment income 5,965 537,761
Employee deferrals 794,299 541,839
Employer contributions 151,478 104,305
Loans receivable from
participants 91,079,703 75,023,581
Cash and cash equivalents 2,384,940 2,107,079
-------------- --------------
Total assets 1,450,068,939 1,145,569,659
-------------- --------------
Liabilities:
Payable for outstanding
purchases - 282,250
Administrative expense 126,126 486,856
Forfeitures 414,263 252,239
-------------- --------------
Total liabilities 540,389 1,021,345
-------------- --------------
Net assets available for plan
benefits $1,449,528,550 $1,144,548,314
============== ==============
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 4
RAYTHEON SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
for the years ended December 31, 1993, 1992 and 1991
-------
1993 1992 1991
---- ---- ----
Additions to net assets
attributable to:
Investment income
(Notes B, E, and I):
Change in appreciation
(depreciation) of
investments $ 72,981,693 $ 33,271,023 $ 43,298,868
Interest 53,392,853 55,619,997 53,289,267
Dividends 11,541,168 8,162,794 8,439,942
Capital gains
distributions 3,654,767 - -
-------------- -------------- --------------
141,570,481 97,053,814 105,028,077
-------------- -------------- --------------
Contributions and
deferrals:
Employee deferrals 126,712,499 116,731,953 111,625,483
Employer contributions 42,388,170 38,245,218 38,624,860
Transfers in (Note G) 79,062,947 - -
Other additions, net
(Note H) 273,041 - 19,304
-------------- -------------- --------------
248,436,657 154,977,171 150,269,647
-------------- -------------- --------------
Total additions 390,007,138 252,030,985 255,297,724
-------------- -------------- --------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 80,645,596 121,034,476 53,875,188
Administrative expenses 1,037,630 980,971 912,958
Transfers out (Note G) 3,343,676 - -
Other deductions, net
(Note H) - 120,160 122,966
-------------- -------------- --------------
Total deductions 85,026,902 122,135,607 54,911,112
-------------- -------------- --------------
Increase in net assets 304,980,236 129,895,378 200,386,612
Net assets, beginning
of year 1,144,548,314 1,014,652,936 814,266,324
-------------- -------------- --------------
Net assets, end of year $1,449,528,550 $1,144,548,314 $1,014,652,936<PAGE>
PAGE 5
============== ============== ==============
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 6
RAYTHEON SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
-------
A. Description of Plan:
General
Raytheon Savings and Investment Plan (the "Plan") is a defined
contribution plan covering certain employees of Raytheon Company (the
"Company"). To participate in the Plan, eligible employees must have
three months of service and may enter the Plan only on the first day
of each month. The purpose of the Plan is to provide participants
with a tax-effective means of meeting both short and long-term
investments objectives. The Plan is intended to be a "qualified cash
or deferred arrangement" under Section 401(a) and 401(k) of the
Internal Revenue Code (the "Code"). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The total number of participants in the Plan as of December
31, 1993 and 1992 were 55,056 and 34,678, respectively. Participants
by fund were as follows as of December 31, 1993:
Guaranteed Income Fund 33,655
Equity Fund 19,769
Raytheon Common Stock Fund 53,582
Stock Index Fund 11,322
Balanced Fund 6,070
Effective July 31, 1992, the Plan's investments were combined with
the investments of other similar defined contribution plans of
Raytheon Company and Subsidiaries Consolidated into the Raytheon
Company Master Trust for Defined Contribution Plans ("Master Trust").
The trustee of the Master Trust maintains a separate account
reflecting the equitable share in the Trust of each plan.
Contributions and Deferrals
Eligible employees are allowed to defer to the Plan up to 15% of
their salaries. The Company contributes amounts equal to 50% of each
participant's deferral, up to a maximum of 3% of the participant's
salary. As of December 31, 1993, the combined annual employee
deferral and employer contribution for a participant cannot exceed
$13,491. Effective April 1, 1991, rollover contributions from other
qualified plans were accepted by the Plan. Participants may invest
their deferrals in increments of 10% in any combination of five
funds: (a) a Guaranteed Income Fund under which assets are invested
primarily in contracts providing for fixed rates of interest for
specified periods of time, (b) an Equity Fund which invests in shares
of a mutual fund which consists primarily of income-producing equity
securities, (c) a Raytheon Common Stock Fund which invests in shares<PAGE>
PAGE 7
of Raytheon Company Common Stock, (d) a Stock Index Fund which
invests in a commingled pool consisting primarily of equity
securities and is designed to track the S&P 500 Index, and (e) a
Balanced Fund which invests in shares of a mutual fund which consists
primarily of equity securities, bonds and money market instruments.
Dividends and distributions from investments of the Raytheon Common
Stock Fund, the Equity Fund and the Balanced Fund are reinvested in
their respective funds; stock dividends, stock splits and similar
changes are also reflected in the funds.
Participant Accounts
Each participant's account is credited with the participant's
deferral, the Company's contribution and an allocation of Plan
earnings. Plan earnings are allocated based on account balances by
fund.
Vesting
Participants are immediately vested in their voluntary deferrals plus
actual earnings thereon. Vesting requirements for employer
contributions plus earnings thereon may vary depending upon when an
employee became eligible to participate in the Plan. Vesting occurs
upon completion of a certain period of service or upon retirement,
death, disability, or attainment of retirement age. Forfeitures of
the nonvested portions of terminated participants' accounts are used
to reduce required contributions of the Company.
Benefits and Withdrawals
A participant may withdraw all or a portion of deferrals, employer
contributions and related earnings made upon attainment of age 59
1/2. For reasons of financial hardship, as defined in the Plan
document, a participant may withdraw all or a portion of deferrals.
On termination of employment, a participant will receive a lump-sum
distribution unless the vested account is valued in excess of $3,500
and the participant elects to defer distribution. A retiree or a
beneficiary of a deceased participant may defer the distribution to
January of the following year.
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum
amount of a loan is the lesser of one-half (1/2) of the participant's
account balance or $50,000. The minimum loan which may be granted is
$500. The interest rate applied is equal to the prime rate published
in the WALL STREET JOURNAL on the first business day in June and
December of each year. Loans must be repaid over a period of up to
five years by means of payroll deductions. In certain cases, the
repayment period may be extended up to 15 years. Interest paid to
the Plan on loans to participants is credited to the borrower's<PAGE>
PAGE 8
account in the investment fund to which repayments are made.
Administrative Expenses
Substantially all expenses of administering the Plan are paid by the
Plan.
B. Summary of Significant Accounting Policies:
The Plan's guaranteed income contracts are valued at cost, defined as
net contributions and deferrals plus interest earned at contracted
rates, which approximates fair value. Investments in mutual funds
and the commingled pool are valued at the closing net asset value
reported on the last business day of the year. Investments in
securities (common stock) traded on a national securities exchange
are valued at the last reported sales price on the last business day
of the year. Cash equivalents are short-term money market
instruments and are valued at cost which approximates fair value.
Security transactions are recorded on trade date. Except for its
guaranteed income contracts (Note E), the Plan's investments are held
by bank-administered trust funds. Payables for outstanding security
transactions represent trades which have occurred but have not yet
settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Dividend income is recorded on the ex-dividend date. Income from
other investments is recorded as earned on an accrual basis.
C. Federal Income Tax Status:
The Plan is a "qualified cash or deferred arrangement" within the
meaning of Section 401(k) of the Code. The Company has received a
favorable determination letter from the Internal Revenue Service
which states that the Plan is qualified under Sections 401(a) and
401(k) of the Code. The Plan obtained its latest determination
letter in 1987, in which the Internal Revenue Service stated that the
Plan, as then designated, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been amended
since receiving the determination letter. However, the plan
administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
D. Plan Termination:<PAGE>
PAGE 9
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times to discontinue
its contributions and to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, participants will become
100% vested in their account balances including Company
contributions.
E. Guaranteed Income Contracts (GICs):
The Plan holds three collateralized fixed income investment
portfolios (with no expiration date), two of which are managed by
insurance companies and one of which is managed by an investment
management firm. The credited interest rates are adjusted
semiannually to reflect the experienced and anticipated yields to be
earned on such investments, based on their book value. The annual
rates were 5.80%, 6.34% and 6.28% and the effective annual rates were
5.97%, 6.55% and 6.48%, respectively, at December 31, 1993. The
values of the portfolios managed by Metropolitan Life Insurance
Company, The Prudential Asset Management Company and Banker's Trust
were $280,680,253, $193,735,287 and $324,709,479, respectively, at
December 31, 1993. The values of GICs held with Metropolitan Life
Insurance Company, The Prudential Asset Management Company and
Loomis, Sayles & Company were $372,579,674, $173,500,976 and
$204,666,749, respectively, at December 31, 1992.
F. Related Party Transactions:
In accordance with the provisions of the Plan, State Street Bank and
Trust Company (the "Trustee") acted as the Plan's agent for purchases
and sales of shares of Raytheon Company Common Stock until July 31,
1992. Effective July 31, 1992, Fidelity Management Trust Company
(the "Trustee") acts as the Plan's agent for purchases and sales of
shares of Raytheon Company Common Stock. For the years ended
December 31, 1993, 1992 and 1991, purchases of Raytheon Company
Common Stock amounted to $14,610,207, $17,270,729 and $10,868,673,
respectively. Sales of Raytheon Company Common Stock amounted to
$2,942,959, $3,403,169 and $9,072,905 in 1993, 1992 and 1991,
respectively.
G. Plan Transfers:
Effective January 1, 1993 and May 12, 1993 all plan assets and the
accounts of all participants of United Engineers & Constructors
Savings and Investment Plan and The Badger Company, Inc. Savings and
Investment Plan, respectively, were transferred into the Plan.
Effective October 1, 1993 and November 1, 1993 the accounts of all
employees of Raytheon Support Services Company and Range Systems
Engineers Support Company, respectively, who participated in the Plan
were transferred out of the Plan and into the Raytheon Employee
Savings and Investment Plan.<PAGE>
PAGE 10
Effective May 1, 1993 and July 1, 1993, the accounts of all employees
of Raytheon Services Nevada and Harbert Yeargin, Inc., respectively,
who participated in the Plan were transferred out of the Plan and
into the Raytheon Subsidiary Savings and Investment Plan.
H. Other Additions and Deductions:
Other additions and deductions represent transfers of participant
accounts between the Raytheon Savings and Investment Plan and the
Raytheon Savings and Investment Plan for Specified Hourly Payroll
Employees for those participants who changed plans during the year.<PAGE>
PAGE 11
<TABLE>
I. Fund Data:
The following is a summary of net assets available for plan benefits by
fund as of December 31:
1993
------------------------------------------------------------------------------------------
<CAPTION> Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Guaranteed Income Contracts $799,125,019 $ 799,125,019
Fidelity Equity Income Fund
(7,749,072 shares) - $262,228,602 262,228,602
Raytheon Company Common Stock
(1,883,293 shares) - - $124,297,309 124,297,309
BT Pyramid Equity Index Fund
(95,522 shares) - - - $94,437,522 94,437,522
Fidelity Balanced Fund
(5,643,323 shares) - - - - $75,564,102 75,564,102
------------ ------------ ------------ ----------- ----------- --------------
Total investments 799,125,019 262,228,602 124,297,309 94,437,522 75,564,102 1,355,652,554
Receivables:
Accrued investment income - - 3,080 2,885 - 5,965
Employee deferrals 258,446 112,954 145,548 228,663 48,688 794,299
Employer contributions 68,007 34,477 20,046 18,072 10,876 151,478
Loans receivable from participants - - - - - $91,079,703 91,079,703
Cash and cash equivalents - - 1,507,218 877,722 - - 2,384,940
------------ ------------ ------------ ----------- ----------- ----------- --------------
Total assets 799,451,472 262,376,033 125,973,201 95,564,864 75,623,666 91,079,703 1,450,068,939
Liabilities:
Administrative expenses 75,087 23,208 11,773 9,516 6,542 - 126,126
Forfeitures 163,269 108,361 90,392 50,047 2,194 - 414,263
------------ ------------ ------------ ------------ ----------- ----------- --------------
Total liabilities 238,356 131,569 102,165 59,563 8,736 - 540,389
------------ ------------ ------------ ------------ ----------- ----------- --------------
Net assets available for
plan benefits $799,213,116 $262,244,464 $125,871,036 $95,505,301 $75,614,930 $91,079,703 $1,449,528,550
============ ============ ============ =========== =========== =========== ==============<PAGE>
The following is a summary of net assets available for plan benefits by fund as of December 31:
1992
------------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Guaranteed Income Contracts $750,747,399 $ 750,747,399
Fidelity Equity Income Fund
(5,729,970 shares) - $166,226,434 166,226,434
Raytheon Company Common Stock
(1,528,736 shares) - - $78,347,720 78,347,720
BT Pyramid Equity Index Fund
(80,170 shares) - - - $71,933,541 71,933,541
------------ ------------ ----------- ----------- -------------
Total investments 750,747,399 166,226,434 78,347,720 71,933,541 $1,067,255,094
Receivables:
Accrued investment income - - 534,850 2,911 537,761
Employee deferrals 236,789 32,346 73,485 199,219 541,839
Employer contributions 80,817 10,624 6,388 6,476 104,305
Loans receivable from
participants - - - - $75,023,581 75,023,581
Cash and cash equivalents - - 1,080,233 1,026,846 - 2,107,079
------------ ------------ ----------- ----------- ----------- --------------
Total assets 751,065,005 166,269,404 80,042,676 73,168,993 75,023,581 1,145,569,659
------------ ------------ ----------- ----------- ----------- --------------
Liabilities:
Payable for outstanding
purchases - - 282,250 - - 282,250
Administrative expense 353,920 80,716 16,933 35,287 - 486,856
Forfeitures 123,594 55,987 57,297 15,361 - 252,239
------------ ------------ ----------- ----------- ----------- --------------
Total liabilities 477,514 136,703 356,480 50,648 - 1,021,345
------------ ------------ ----------- ----------- ----------- --------------
Net assets available for<PAGE>
PAGE 14
plan benefits $750,587,491 $166,132,701 $79,686,196 $73,
The following is a summary of changes in net assets available for plan benefits by fund for the year ended December 31:
1993
----------------------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ---- -----
---------- ------ ---------- ----- -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 34,110,541 $ 28,867,950 $ 8,884,701 $ 1,118,501 $ 72,981,693
Interest $ 53,328,242 - 37,098 27,513 - 53,392,853
Dividends - 8,245,882 1,248,893 - 2,046,393 11,541,168
Capital gains
distributions - 908,109 - - 2,746,658 3,654,767
------------ ------------ ------------ ----------- ----------- --------------
53,328,242 43,264,532 30,153,941 8,912,214 5,911,552 141,570,481
------------ ------------ ------------ ----------- ----------- --------------
Contributions and deferrals:
Employee deferrals 68,011,711 25,062,055 8,807,394 16,159,598 8,671,741 126,712,499
Employer contributions 22,928,611 8,269,003 3,761,864 5,089,994 2,338,698 42,388,170
Transfers in 39,016,352 20,022,584 9,551,415 7,628,846 397,849 $2,445,901 79,062,947
Other additions, net 3,845 102,264 51,326 33,138 82,468 - 273,041
------------ ------------ ------------ ----------- ----------- ---------- --------------
129,960,519 53,455,906 22,171,999 28,911,576 11,490,756 2,445,901 248,436,657
------------ ------------ ------------ ----------- ----------- ---------- --------------
Total additions 183,288,761 96,720,438 52,325,940 37,823,790 17,402,308 2,445,901 390,007,138
------------ ------------ ------------ ----------- ----------- ----------- --------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 59,055,966 10,567,368 6,190,448 3,432,813 1,399,001 - 80,645,596
Administrative expenses 729,306 138,501 70,757 65,957 33,109 - 1,037,630
Transfers out 1,448,750 637,430 267,276 237,112 324,434 428,674 3,343,676
------------ ------------ ------------ ----------- ----------- ----------- --------------
Total deductions 61,234,022 11,343,299 6,528,481 3,735,882 1,756,544 428,674 85,026,902
------------ ------------ ------------ ----------- ----------- ----------- --------------
Interfund transfers (64,703,314) 13,546,383 2,552,629 (11,277,120) 59,881,422 - -<PAGE>
------------ ------------ ------------ ----------- ----------- ---------- --------------
Increase in net assets 48,625,625 96,111,763 46,184,840 22,386,956 75,614,930 16,056,122 304,980,236
Net assets, beginning of year 750,587,491 166,132,701 79,686,196 73,118,345 - 75,023,581 1,144,548,314
------------ ------------ ------------ ----------- ----------- ----------- --------------
Net assets, end of year $799,213,116 $262,244,464 $125,871,036 $95,505,301 $75,614,930 $91,079,703 $1,449,528,550
============ ============ ============ =========== =========== =========== ==============
============ ============ ============ =========== =========== =========== ==============
I. Fund Data, continued:
The following is a summary of changes in net assets by fund for the year ended December 31:
1992
-------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 15,387,501 $12,362,982 $ 5,520,540 $ 33,271,023
Interest $ 55,558,572 17,900 25,561 17,964 55,619,997
Dividends - 6,108,280 2,054,514 - 8,162,794
------------ ------------ ----------- ----------- --------------
55,558,572 21,513,681 14,443,057 5,538,504 97,053,814
------------ ------------ ----------- ----------- --------------
Contributions and deferrals:
Employee deferrals 75,238,427 18,272,556 8,514,609 14,706,361 116,731,953
Employer contributions 24,980,244 5,995,351 2,852,232 4,417,391 38,245,218
Other additions, net - - - - -
------------ ------------ ----------- ----------- --------------
100,218,671 24,267,907 11,366,841 19,123,752 154,977,171
------------ ------------ ----------- ----------- --------------
Total additions 155,777,243 45,781,588 25,809,898 24,662,256 252,030,985
------------ ------------ ----------- ----------- --------------
Deductions from net assets
attributable to:
Benefits to and withdrawals<PAGE>
PAGE 17
by participants 94,918,938 14,630,979 6,736,592
Administrative expenses 698,684 153,496 71,883 56,908 980,971
------------ ------------ ----------- ----------- --------------
Total deductions 95,682,455 14,814,540 6,808,475 4,830,137 122,135,607
------------ ------------ ----------- ----------- --------------
Interfund transfers 3,078,660 (9,341,466) (8,339,623) 14,602,429 -
Loans to participants (32,788,479) (7,472,966) (4,154,589) (3,183,555) $47,599,589 -
Repayment of loan principal 19,985,247 4,297,886 2,029,411 3,266,961 (29,579,505) -
(29,579,505) -
------------ ------------ ----------- ----------- ----------- --------------
Increase in net assets 50,370,216 18,450,502 8,536,622 34,517,954 18,020,084 129,895,378
Net assets, beginning of year 700,217,275 147,682,199 71,149,574 38,600,391 57,003,497 1,014,652,936
------------ ------------ ----------- ----------- ----------- --------------
Net assets, end of year $750,587,491 $166,132,701 $79,686,196 $73,118,345 $75,023,581 $1,144,548,314
============ ============ ===========
=========== =========== ==============<PAGE>
The following is a summary of changes in net assets by fund for the year ended December 31:
1991
-------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 26,817,219 $10,850,023 $ 5,631,626 $ 43,298,868
Interest $ 53,216,242 28,230 39,154 5,641 53,289,267
Dividends - 6,415,932 2,024,010 - 8,439,942
------------ ------------ ----------- ----------- --------------
53,216,242 33,261,381 12,913,187 5,637,267 105,028,077
------------ ------------ ----------- ----------- --------------
Contributions and deferrals:
Employee deferrals 79,648,409 16,695,458 9,374,520 5,907,096 111,625,483
Employer contributions 27,584,444 5,934,958 3,275,610 1,829,848 38,624,860
Other additions, net - 2,099 17,205 - 19,304
------------ ------------ ----------- ----------- --------------
107,232,853 22,632,515 12,667,335 7,736,944 150,269,647
------------ ------------ ----------- ----------- --------------
Total additions 160,449,095 55,893,896 25,580,522 13,374,211 255,297,724
------------ ------------ ----------- ----------- --------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 42,470,409 6,857,899 4,227,193 319,687 53,875,188
Other deductions, net 110,440 - - 12,526 122,966
Administrative expenses 663,438 140,077 93,568 15,875 912,958
------------ ------------ ----------- ----------- --------------
Total deductions 43,244,287 6,997,976 4,320,761 348,088 54,911,112
------------ ------------ ----------- ----------- --------------
Interfund transfers 21,916,455 (33,688,239) (14,047,935) 25,819,719 -
Loans to participants (24,956,047) (4,652,283) (3,138,673) (943,401) $33,690,404 -
Repayment of loan principal 15,661,376 2,819,117 1,524,513 697,950 (20,702,956) -
------------ ------------ ----------- ----------- ----------- --------------<PAGE>
------------ ------------ ----------- ----------- ----------- --------------
Net assets, end of year $700,217,275 $147,682,199 $71,149,574 $38,600,391 $57,003,497 $1,014,652,936
============ ============ =========== =========== =========== ==============
/TABLE
<PAGE>
PAGE 20
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Raytheon Savings and Investment Plan has duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
RAYTHEON SAVINGS AND INVESTMENT PLAN
BY /s/ Frank D. Umanzio
Frank D. Umanzio
Vice President - Human Resources
DATE June 30, 1994<PAGE>
PAGE 1
EXHIBIT (99.1a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company on Form S-8 (File No. 2-87308, No. 2-93871, No.
33-3720, No. 33-15396 and No. 33-22211) of our report dated June 17, 1994 on
our audits of the financial statements of the Raytheon Savings and Investment
Plan as of December 31, 1993 and 1992 and for each of the three years in the
period ended December 31, 1993, which report is included in this annual report
on Form 11-K.
We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
June 24, 1994<PAGE>
PAGE 1
EXHIBIT (99.1b)
COMPANIES PARTICIPATING IN
RAYTHEON SAVINGS AND INVESTMENT PLAN
Raytheon Company
Raytheon Air Control Company
Raytheon Constructors, Inc. effective 1/1/94
Raytheon Corporate Jets, Inc. effective 8/6/93
Raytheon Engineering and Maintenance Company
Raytheon Europe International Company
Raytheon European Management Company
Raytheon European Management and Systems Company
Raytheon Foreign Trade Company
Raytheon Gulf Systems Company
Raytheon International Support Company, Inc.
(formerly Raytheon Subsidiary Support Company, Inc.)
Raytheon Korean Support Company
Raytheon Logistics Support and Training Company
Raytheon Mediterranean Systems Company
Raytheon Middle East Systems Company
Raytheon Overseas Limited
Raytheon Peninsula Systems Company
Raytheon Service Company
Raytheon Services Nevada Company effective 11/5/90
Raytheon Southeast Asia Systems Company
Raytheon Systems Company
Raytheon Technical and Administration Services, Ltd.
Raytheon Technical Assistance Company
Raytheon World Services Company
Tube Holding Company, Inc. (formerly
The Machlett Laboratories, Incorporated)
TAG Semiconductors Limited - Burlington, Mass., Office Only
Amana Refrigeration, Inc. effective 1/1/85
Arkansas Aerospace, Inc. effective 7/1/94
Badger Company,Inc. effective 5/12/93
Beech Acceptance Corporation, Inc. effective 1/1/86
Beech Aerospace Services, Inc. effective 1/1/88
Beech Aircraft Corporation effective 1/1/86
Beech Holdings, Inc. effective 1/1/86
Cedarapids, Inc. effective 1/1/87
Data Logic, Inc. effective 1/1/89
Patriot Overseas Support Company effective 10/3/88
Range Systems Engineering Company effective 10/1/93
Seiscor Inc. effective 1/1/88
Seismograph Service Corporation effective 1/1/88
Seismograph Service Corporation (Overseas) effective 1/1/88
Speed Queen Company effective 2/1/85
United Engineers & Constructors, Inc. effective 3/23/93
Effective June 1, 1993
----------------------
Asia Badger (Malaysia) Sdn Bhd
Asia Badger, Inc. (Delaware)<PAGE>
PAGE 2
Badger B. V. (Netherlands)
Badger Energy, Inc. (Delaware)
Badger Engineering and Construction (Pty) Ltd.
Badger Africa (Pty) Ltd.
Badger Engineers & Constructors, Inc.
Badger Engineers, Inc.
Badger G.m.b.H.
Badger Italiana S.r.l.
Badger Middle East, Inc.
Badger Overseas Limited
Badger Plants, Inc.
Badger Trading Company
Canadian Badger Company Limited
Chemical Process Corporation
Gulf Design Corporation, Inc.
McBride-Ratcliff & Associates, Inc.
Societe Francaise Badger S.a.r.l.
Effective January 1, 1993
-------------------------
United Engineers & Constructors International, Inc.
Badger Catalytic Ltd.
Stearns Catalytic Corporation
Stearns-Rogers Export Ltd. (Colorado)
UCI, Ltd.
United Architects, Ltd.
Energy Overseas International, Inc.
Jackson & Moreland International, Inc.
U.E.& C. (Canada) Ltd.
UE&C Nuclear Inc.
UE&C Urban Services Corporation
UE, Inc.
United Engineers Far East, Ltd.
United Engineers International, Inc.
United Engineers & Constructors Midwest, Inc.
United Engineers & Constructors of Ireland, Ltd.
United Mid-East, Inc.
United Module Fabricators, Inc.
UE&C-Catalytic Inc.
Catalytic Industrial Maintenance Co., Inc.
Specialty Technical Services, Inc. <PAGE>
PAGE 3
ARTICLE I - PREAMBLE
The Raytheon Savings and Investment Plan, which became effective
January 1, 1984, provides employees with a tax-effective means of
allocating a portion of their salary to be invested in one or more
investment opportunities specified in the Plan as determined by the
employee and set aside for short-term and long-term needs of the employee.
The Plan is applicable only to eligible employees who meet the
requirements for membership on or after January 1, 1984. It is intended
that the Plan will comply with all of the requirements for a qualified
profit sharing plan under Sections 401(a) and 401(k) of the Internal
Revenue Code and will be amended from time to time to maintain compliance
with these requirements. The terms used in the Plan have the meanings
specified in Article XIV unless the context indicates otherwise.
ARTICLE II - ELIGIBILITY
2.1. Eligibility Requirements - Present Employees -- Each Eligible
Employee who was in a Period of Service from November 1, 1983, through
December 31, 1983, may join the Plan as of the Entry Date in January,
1984, or any subsequent Entry Date selected by the Eligible Employee
provided he or she continues in the same Period of Service or meets the
requirements under Section 2.2.
2.2. Eligibility Requirements - Other Employees -- Each other
Eligible Employee whose Employment Commencement Date is on or after
November 1, 1983, may join the Plan as of the first Entry Date coincident
with or next following completion of a Period of Service of three (3)
consecutive months commencing on said Employment Commencement Date. Each
Eligible Employee whose Reemployment Commencement Date is on or after
November 1, 1984, may join the Plan as of the first Entry Date next
following said Reemployment Commencement Date.
2.3. Procedure for Joining the Plan -- Each Eligible Employee who
meets the requirements of Section 2.1 or Section 2.2 may join the Plan as
of any Entry Date by communicating with Fidelity in accordance with
instructions in an enrollment kit which will be made available to each
Eligible Employee. An enrollment in the Plan shall not be deemed to have
been completed until the Employee has designated: a percentage by which
Participants' Eligible Compensation shall be reduced as an Elective
Deferral in accordance with the requirements of Section 3.2, subject to
the nondiscrimination test described in Section 3.3; election of
investment funds as described in Article IV; one or more Beneficiaries;
and such other information as specified by Fidelity. The Administrator in
its discretion may from time to time make exceptions and adjustments in
the foregoing procedure on a uniform and nondiscriminatory basis.
2.4. Transfer Between Companies to Position Covered by Plan -- A
Participant who is transferred from employment with one of the Companies
to employment as an Eligible Employee with another one of the Companies
may remain a Participant of the Plan with his or her new Company.
2.5. Transfer to Position Not Covered by Plan -- If a Participant is
transferred to another position with the Employer in which the Participant
is no longer an Eligible Employee, the Participant will remain a<PAGE>
PAGE 4
Participant of the Plan with respect to Elective Deferrals previously made
but will no longer be eligible to have Elective Deferrals made to the Plan
on his or her behalf until he or she again becomes an Eligible Employee.
In the event the Participant is subsequently transferred to a position in
which he or she again becomes an Eligible Employee, the Participant may
renew Elective Deferrals as of any Entry Date by communicating with
Fidelity and providing all of the information requested by Fidelity.<PAGE>
PAGE 5
ARTICLE III - CONTRIBUTIONS
3.1. Employer Contributions -- The Companies shall contribute to the
Trust established under this Plan from Net Annual Profits or Net Profits
an amount equal to the total amount of Elective Deferrals agreed to be
made by the Companies pursuant to designation by Participants.
3.2. Elective Deferrals -- Elective Deferrals must be made in one
percent (1%) increments with a minimum Elective Deferral of one percent
(1%) of Eligible Compensation and a maximum Elective Deferral of fifteen
percent (15%) but no Participant may defer more than $7,000 for any Plan
Year, except as such amount is adjusted for changes in the cost of living
as provided in Section 402(g)(5) of the Internal Revenue Code. The
Administrator may establish prospectively lower limits for Higher Paid
Participants for the purpose of complying with Internal Revenue Code
requirements in an orderly manner.
3.3. Internal Revenue Code Requirements -- All Elective Deferrals
and Matching Contributions are subject to the nondiscrimination tests
established in Section 401(k) and (m) of the Code. In addition, Eligible
Compensation taken into account under this Plan shall not exceed $200,000
adjusted to changes in the cost of living as provided in Section 415(d) of
the Code.
3.4. Reinstatement of Reduced Amounts -- Any reduction effected
pursuant to Section 3.3 will remain in effect for the remainder of the
Plan Year in which the reduction occurs and will not be automatically
reinstated. A Participant whose Elective Deferral has been reduced may
elect to increase his or her Elective Deferral effective as of any Entry
Date subsequent to notice from the Administrator that Elective Deferrals
may be increased as of a specified Entry Date. This election must be made
in accordance with the procedure described in Section 3.5.
3.5. Change in Elective Deferrals -- Except as provided in Sections
3.3 and 3.4, any Participant may change his or her Elective Deferral
percentage to increase or decrease said percentage by notifying Fidelity,
such change to take effect as of the next designated Entry Date in
accordance with the Administrator's rules then in effect.
3.6. Voluntary Reduction of Elective Deferral to Zero --
Notwithstanding the notice requirements specified in Section 3.5, any
Participant may elect to reduce the level of the Participant's Elective
Deferral to zero as of the beginning of any pay period. The reduction will
take effect as soon as practicable following telephone notification by the
Participant to Fidelity. A Participant who has reduced his or her
Elective Deferral to zero may again make Elective Deferrals as of any
designated Entry Date in accordance with the Administrator's rules then in
effect by telephone notification to Fidelity.
3.7. Matching Contributions -- For each Plan Year, commencing on or
after January 1, 1987, subject to limitations imposed by the Internal
Revenue Code, the Companies will match from Net Annual Profits or Net
Profits the Elective Deferral of each Participant at the rate of one-half
(1/2) of the Participant's Elective Deferral on an annual basis provided<PAGE>
PAGE 6
that for any pay period the matching amount shall not exceed three percent
(3%) of the Participant's Eligible Compensation for that pay period.
3.8. Forfeitures -- In the event that a Participant incurs a
Severance of Service prior to attaining a Nonforfeitable right to the
Participant's Matching Contribution, the Matching Contribution will be
forfeited as of the Severance from Service Date. Forfeitures of Matching
Contributions will be used to reduce future contributions of the Companies
to the Plan. A forfeiture will occur as of the first day of the month
immediately following a month in which a Severance from Service occurs and
results in a forfeiture. In the event that a Period of Severance is
credited to a Participant's Period of Service pursuant to Section 5.3(b),
any forfeiture of a Matching Contribution resulting from said Period of
Severance will be restored to the Participant's Matching Contribution
Account. When a prior Period of Service is reinstated, forfeitures
related to said prior Period of Service will be restored to the extent
required by law.
3.9. Rollover Contributions --
(a) An Employee of Seismograph Service Corporation who is a
Participant in this Plan may transfer into this Plan the amount of a
qualifying rollover distribution as defined in Section 402 of the Code
received from the Seismograph Service Corporation Thrift Plan. Such
transfer must be made within sixty (60) days of receipt by the Employee of
the distribution from the Seismograph Service Corporation Thrift Plan.
The amounts transferred under this Section shall be credited to the
Participant's Employee Account. Said amounts shall be invested initially
in the Fixed Income Fund, but will be eligible for transfer to another
Fund in accordance with the provisions of the Plan. Such amounts shall
not be eligible for a Matching Contribution pursuant to Section 3.7.
(b) Effective April 1, 1991, Participants may transfer into the Plan
qualifying rollover amounts (as defined in Section 402 of the Code)
received from other qualified plans subject to Section 401(k) or Section
401(m) of the Code; annuity accounts under Section 403(b) of the Code;
qualified defined contribution pension or profit sharing plans, provided
that no federal income tax has been required to have been paid previously
on such amounts; or rollover contributions from an individual retirement
account described in Section 408(d)(3)(A)(ii) of the Code (referred to
herein as a "conduit IRA"). Such transfers will be referred to as
"rollover contributions" and will be subject to the following conditions:
(i) the transferred funds are received by the Trustee no later than
sixty (60) days from receipt by the Employee of a distribution from
another qualified Section 401(k) or Section 401(m) plan or, in the
event that the funds are transferred from a conduit IRA, no later
than sixty (60) days from the date that the Participant receives such
funds from the individual retirement account, subject, however, to
(v) below where applicable;
(ii) the amount of such rollover contributions shall not exceed the
limitations set forth in Section 402 of the Code;<PAGE>
PAGE 7
(iii) rollover contributions shall be taken into account by the
Administrator in determining the Participant's eligibility for a loan
pursuant to Article VII;
(iv) rollover contributions may be distributed at the request of the
Participant, subject to the same administrative procedures as apply
to other distributions;
(v) rollover contributions may not be received by the Trustee earlier
than the Entry Date upon which the Participant elects to join the
Plan;
(vi) rollover contributions transferred pursuant to this paragraph
(b) of Section 3.9 shall be credited to the Participant's Rollover
Contribution Account. Rollover contributions will be invested upon
receipt by the Trustee;
(vii) no rollover contribution will be accepted unless (A) the
Employee on whose behalf the rollover contribution will be made is
either a Participant or has notified the Administrator that he
intends to become a Participant on the first date on which he is
eligible therefor; and (B) all required information, including
selection of specific investment accounts, is provided to Fidelity.
When the rollover contribution has been deposited, any further change
in investment allocation of future deferrals or transfer of account
balances between investment funds will be effected through the
procedures set forth in Sections 4.2 and 4.3.
(viii) Under no circumstances shall the Administrator accept as a
rollover contribution amounts which have previously been subject to
federal income tax.
3.10. Refund of Matching Contributions to the Companies --
Notwithstanding the provisions of Article XII, the Trustee shall refund to
the Companies, upon written request, Matching Contributions made by the
Companies:
(a) by a mistake of fact, provided that such refund is made within
one (1) year after the making of the Matching Contribution; or
(b) which would otherwise be an excess contribution as defined in
Section 4979(c) of the Internal Revenue Code, to the extent permitted
in such Section to avoid payment of an excise tax on excess contribu-
tions.
ARTICLE IV - INVESTMENT OF ACCOUNTS
4.1. Election of Investment Funds -- Upon enrollment in the Plan,
each Participant shall direct that the funds in the Participant's Employee
Account and Matching Contribution Account be invested in increments of ten
percent (10%) in one or more of the following investment funds:
Fund A - an equity fund designated by the Administrator;
Fund B - a fixed income fund designated by the Administrator;<PAGE>
PAGE 8
Fund C - Raytheon Company common stock fund (not subject to
additional limitations with respect to transfer and
withdrawal);
Fund D - a stock index fund designated by the Administrator;
In its discretion, the Administrator may from time to time designate
new funds and, where appropriate, preclude investment in existing
funds and provide for the transfer of Accounts invested in those
funds to other funds selected b the Participant or, if no such
election is made, to Fund B or similar low risk fixed income fund as
determined by the Administrator in its discretion.
Fund E - a balanced fund designated by the Administrator.
Each election will apply to both accounts so that the Employee Account and
Matching Contribution Account of the Participant will be invested in the
same percentages in the one or more investment funds selected by the
Participant. Officers covered by Securities and Exchange Commission
Regulation 16b will not be eligible to elect Fund C, the Raytheon common
stock fund, until such election is approved by the shareholders of
Raytheon Company. Any request to invest in or transfer out of the
Raytheon Common Stock Fund by an "executive officer," as that term is
defined in the regulations of the Securities Exchange Commission (SEC),
shall not become effective until six (6) months subsequent to the date the
Administrator is notified of the request.
4.2. Change in Investment Allocation of Future Deferrals -Each
Participant may elect to change the investment allocation of future
Elective Deferrals, Matching Contributions and rollover contributions
effective as of the Entry Dates in January, April, July or October, or
such other months as may be specified under the Administrator's rules then
in effect, by providing telephone notice to Fidelity. Any changes must
also be made in ten percent (10%) increments and must result in a total
investment of one hundred percent (100%) of the Participant's Account. <PAGE>
PAGE 9
4.3. Transfer of Account Balances Between Investment Funds --
Each Participant may elect to transfer all or a portion of the amount in
the Participant's Employee Account, Matching Contribution Account and
Rollover Contribution Account between investment funds effective as of the
Entry Dates in January, April, July or October of each year or such other
months as may be designated in the Administrator's rules then in effect.
Such transfers must be made in ten percent (10%) increments of the entire
Account as of the completion of the transfer and must result in investment
of one hundred percent (100%) of the Account. Transfers shall be effected
by telephone notice to Fidelity.
4.4. Ownership Status of Funds -- The Trustee shall be the owner of
record of the assets in the funds specified as Funds A, B, C, D and E and
such other funds as may be established by the Administrator. The
Administrator shall have records maintained as of the Valuation Date for
each fund allocating a portion of the fund to each Participant who has
elected that his or her Account be invested in such fund. The records
shall reflect each Participant's portion of Funds A, B, D and E, and such
other funds as may be established by the Administrator, in a cash amount
and shall reflect each Participant's portion of Fund C in shares of stock
and cash.
4.5. Voting Rights -- Participants whose Account has shares of
participation in the Raytheon Company Common Stock Fund on the last
business day of the second month preceding the record date (the "Voting
Eligibility Date") for any meeting of stockholders have the right to
instruct the Trustee as to voting at such meeting. The number of votes is
determined by dividing the value of the shares in the Participant's
Account in the Raytheon Common Stock Fund by the closing price of Raytheon
Common Stock on the Voting Eligibility Date. If the Trustee has not
received instructions from a Participant as to voting of shares within a
specified time, then the Trustee shall not vote those shares. If a
Participant furnishes the Trustee with a signed vote direction card
without indicating a voting choice thereon, the Trustee shall vote
Participant's shares as recommended by management. In addition, each
Participant shall have the right to accept or reject any tender or
exchange offer for shares of common stock. The Trustee shall vote (or
tender or exchange) all combined fractional shares of Raytheon Common
Stock to the extent possible in the same proportion as the shares which
have been voted (or tendered or exchanged) by each Participant. Any
instructions as to voting (or tender or exchange) received from an
individual Participant shall be held in confidence by the Trustee and
shall not be divulged to the Companies or to any officer or employee
thereof or to any other person.
ARTICLE V - VESTING
5.1. Employee and Rollover Contribution Accounts -- Each Participant
shall have a Nonforfeitable right to any amounts in the Participant's
Employee and Rollover Contribution Accounts.
5.2. Matching Contribution Account -- Each Participant shall have a
Nonforfeitable right to the Participant's Matching Contribution Account
upon the earlier of:<PAGE>
PAGE 10
(a) Completion of a Period of Service of five (5) years commencing
on or after January 1, 1984 (for purposes of determining the length
of a Period of Service under this paragraph only, vesting service
credited to an Employee under Section 6.2(b) of the Speed Queen
Company Retirement Savings Plan will be credited to an Eligible
Employee regardless of whether such vesting service was earned prior
to January 1, 1984); or
(b) Completion of a Period of Service of three (3) years during which
the Participant had an Account under the Plan subsequent to
fulfillment of the eligibility requirements in Section 2.1;
(c) The Participant's Retirement, death, Disability or attainment of
Normal Retirement Age; or
(d) The date of layoff of Participants laid off as a result of the
permanent closing of the Oxnard plant.
(e) November 20, 1992, for those Participants who were employed by
Seismograph Service Corporation or GeoQuest Systems, Inc. as of such
date and became employees of Schlumberger, Inc. or a subsidiary
thereof as a result of the sale of the Raytheon seismic business to
Schlumberger.
5.3. Break in Service Rules
(a) Periods of Service -- In determining the length of a Period of
Service, the Administrator shall include all Periods of Service,
except a Period of Service prior to a Period of Severance of twelve
(12) months or more, unless subsequent to said Period of Severance
the Participant completes a Period of Service of at least twelve (12)
months and, if the Participant does not have a Nonforfeitable right
to his or her Matching Contribution Account, the Period of Severance
was less than said prior Period of Service. Effective January 1,
1985, the Administrator shall also include Periods of Service prior
to Periods of Severance of five (5) years or less.
(b) Periods of Severance -- In determining the length of a Period of
Service for purposes of Section 14.37, the Administrator shall
exclude all Periods of Severance, except that in the event a
Participant returns from a quit, discharge, or Retirement, within
twelve (12) months from the earlier of
(i) the date of the quit, discharge, or Retirement, or
(ii) if the Participant was absent from employment for reasons
such as layoff or Authorized Leave of Absence on the day
of the quit, discharge, or Retirement, the first day of
such absence, the period of absence will be included as a
Period of Service.
(c) Other Periods -- In making the determinations described in
subsections (a) and (b) of this Section 5.3, the second, third, and
fourth consecutive years of a Layoff (from the first anniversary of
the last day paid to the fourth anniversary of the last day paid) and<PAGE>
PAGE 11
any period in excess of one (1) year of an Authorized Leave of
Absence shall be regarded as neither a Period of Service nor a Period
of Severance.
ARTICLE VI - WITHDRAWALS AND DISTRIBUTIONS
6.1. In-Service Withdrawals - Matching Contributions -- Upon
completion of a Period of Participation of five (5) years, a Participant
may withdraw, subject to both a minimum withdrawal amount of $250 and the
requirement that a Participant may withdraw no more than twice during a
Plan Year, if no loans are outstanding, and only once during a Plan Year
if loans are outstanding, all or part of the Participant's Matching
Contribution Account. Withdrawals will be based upon the value of the
Account as of a date established by the Administrator through the
application of a uniform and equitable rule by telephone notice to
Fidelity. Withdrawals from Funds A, B, D and E, and such other funds as
may be established by the Administrator will be made in cash; withdrawals
from Fund C will be made in cash or stock (with cash for fractional or
uninvested shares) as directed by the Participant. Funds for the
withdrawal will be taken on a pro rata basis against the Participant's
investment fund balances in the Participant's Matching Contribution
Account.
6.2. In-Service Withdrawal - Employee Account -- A Participant may
withdraw all or a portion of the Participant's Employee Account upon
attainment of age 59 1/2 or, except for earnings on Elective Deferrals
made on or after January 1, 1989, for reasons of immediate and substantial
financial need as defined in Section 6.4. Withdrawals from the Employee
Accounts of less than $250 will not be permitted. Withdrawals will be
based upon the value of the Account as of a date established by the
Administrator through the application of a uniform and equitable rule and
will be effected by telephone notice to Fidelity. Payment of the amount
withdrawn will be made as soon as reasonably practicable after the
effective date of the withdrawal. Withdrawals from Funds A, B, D and E,
and such other funds as may be established by the Administrator, will be
made in cash; withdrawals from Fund C will be made in cash or stock (with
cash for fractional or unissued shares) as elected by the Participant.
Funds for the withdrawal will be taken on a pro rata basis against the
Participant's investment fund balances in the Participant's Employee
Account.
6.3. In-Service Withdrawal - Rollover Contribution Account -- A
Participant may withdraw all or a portion of the Participant's Rollover
Contribution Account. Withdrawals will be based upon the value of the
account as of the date established by the Administrator through the
application of a uniform and equitable rule by telephone notice to
Fidelity. Payment of the amount withdrawn will be made as soon as
reasonably practicable after the effective date of the withdrawal.
Withdrawals from Funds A, B and D will be made in cash. Withdrawals from
Fund C will be made in cash or stock (with cash for fractional or unissued
shares) as elected by the Participant.
6.4. Documentation Required For Financial Hardship Withdrawals -- A
Participant requesting a withdrawal of part or all of the Participant's
Employee Account due to reasons of immediate and substantial financial<PAGE>
PAGE 12
need will be required to submit such documentation or information in other
form as required by the Administrator and shall advise Fidelity by
telephone notice or such other means as established by the Administrator's
rules then in effect the amount and type of the financial need and shall
represent that the amount of the withdrawal does not exceed the financial
need. The Participant shall also represent that this financial need
cannot be satisfied by any of the following sources: through
reimbursement or compensation by insurance or otherwise; by cessation of
Elective Deferrals under the Plan; or by other distributions or loans from
plans maintained by the Employer or by any other employer, or by borrowing
from commercial sources on reasonable commercial terms. For purposes of
Section 6.2, "immediate and substantial financial need" is limited to
financial need arising from the following specific causes: medical
expenses incurred by the Participant, the Participant's spouse or any
dependents of the Participant; purchase (excluding mortgage payments) of a
principal residence for the Participant; payment of tuition for the next
semester or quarter of post-secondary education for the Participant, the
Participant's spouse, or dependents; to prevent the eviction from or
foreclosure on Participant's principal residence; or any other
circumstance, as determined by the Administrator based upon all the
relevant facts, establishing substantial justification for the withdrawal.
6.5. Redeposits Prohibited -- No amount withdrawn pursuant to
Section 6.l, Section 6.2 or Section 6.3 may be redeposited in the Plan.
6.6. Distribution -- Distribution of the Participant's Employee
Account and Rollover Contribution Account and, if the Participant has a
Nonforfeitable right to his or her Matching Contribution Account pursuant
to Section 5.2, the Matching Contribution Account, will be made upon the
Retirement, Disability (as defined in Section 14.11), death, Severance
from Service (as defined in Section 14.46) or Layoff (as defined in
Section 14.28) of the Participant. In the event of the death of a
Participant, the distribution shall be made to the Participant's
Beneficiary. The standard form of distribution will be a lump sum
distribution of the entire amount in the Participant's Account (to which
the Participant has a Nonforfeitable right) which will be paid as soon as
practicable following notification to the Benefits and Services
Department, Raytheon Company, Lexington, Massachusetts, of the Retirement,
death, Disability or Severance from Service. Distribution of the amounts
in said accounts in the funds designated in Funds A, B, D and E, and such
other funds as may be established by the Administrator, in Section 4.1
will be made in cash. Distribution of any amount in said accounts in Fund
C (Raytheon Company stock) will be made in either cash or, if elected by
the Participant or, in the case of death, the Participant's Beneficiary,
stock. Retiring Participants and Beneficiaries of deceased Participants
may elect to defer the entire amount of the lump sum distribution to
January of the year following the date of Retirement or death. Partial
deferrals will not be permitted. If there is no Beneficiary surviving a
deceased Participant at the time payment of a Participant's Account is to
be made, such payment shall be made in a lump sum to the person or persons
in the first following class of successive Beneficiaries surviving, any
testamentary devise or bequest to the contrary notwithstanding: the
Participant's (a) spouse, (b) children and issue of deceased children by
right of representation, (c) parents, (d) brothers and sisters and issue
of deceased brothers and sisters by right of representation, or (e)<PAGE>
PAGE 13
executors or administrators. If no Beneficiary can be located during a
period of seven (7) years from the date of death, the amount of the
distribution shall revert to the Trust and be treated in the same manner
as a forfeiture under Section 3.8.
In the event that upon a Participant's Severance From Service Date
the Participant has a Nonforfeitable right to an Account in the Plan which
exceeds Thirty-Five Hundred Dollars ($3,500), the Participant shall have
the option of not receiving an immediate distribution of the amount in his
or her Account. Participant's Account will be distributed in its entirety
upon the earlier of Participant's attainment of Normal Retirement Age or
receipt by Fidelity of a request for a final distribution.
Except as provided by Section 401(a)(9) of the Code as set forth in
this Section, benefits in the Plan will be distributed to each Participant
not later than the sixtieth (60th) day after the close of the Plan Year in
which the latest of the following events occurs:
(1) attainment by the Participant of Normal Retirement Age;
(2) the tenth (10th) anniversary of the date on which Participant
commenced participation in the Plan; or
(3) Participant's Severance from Service.
If the amount of the benefit payable to a Participant has not been
ascertained by the sixtieth (60th) day after the close of the Plan Year in
which the latest of the three events described in clauses (1), (2) and (3)
above occurred, or Participant cannot be located after reasonable efforts
to do so, then payment retroactive to said sixtieth (60th) day after the
close of the Plan Year in which the latest of the three events occurred
may be made no later than sixty (60) days after the later of the earliest
date on which the amount of such payment can be ascertained under the Plan
or the earliest date on which the Participant is located.
In any event, as required by Section 401(a)(9) of the Code, dis-
tribution of a Participant's benefit will be made not later than April 1
of the calendar year following the calendar year in which the Participant
attains age 70 1/2 or, for Participants who have attained age 70 1/2
before January 1, 1988, and have elected to defer distribution in
accordance with procedures established by the Administrator, the calendar
year in which the Participant retires.
In the event that the Plan is determined to be a direct or indirect
transferee of either a defined benefit plan or a defined contribution plan
subject to the funding standards of Section 412 of the Code, the surviving
spouse of a Participant who dies with an Account in the Plan shall have
the option of electing a qualified pre-retirement survivor annuity in lieu
of the standard form of distribution.
6.7. Withdrawal/Distribution - Executive Officers -- No withdrawal
by or distribution to an "executive officer," as that term is defined by
the SEC, from an Account in the Raytheon Common Stock Fund will be
effective until the expiration of six (6) months from the date the
Administrator receives the request for the withdrawal or distribution.
ARTICLE VII - LOANS<PAGE>
PAGE 14
7.1. Availability of Loans -- Participants may borrow against all or
a portion of the balance in the Participant's Employee Account and
Rollover Contribution Account, and the Matching Contribution Account if
the Participant has a Nonforfeitable right thereto pursuant to Section
5.2, subject to the limitations set forth in this Article. The Senior
Vice President, Human Resources, is authorized to administer this loan
program.
7.2. Minimum Amount of Loan -- No loan of less than $500 will be
permitted.
7.3. Maximum Amount of Loan -- No loan in excess of fifty percent
(50%) of the aggregate value of a Participant's Employee Account and
Rollover Contribution Account and the Nonforfeitable portion of
Participant's Matching Contribution Account balances will be permitted.
In addition, limits imposed by the Internal Revenue Code and any other
requirements of applicable statute or regulation will be applied. Under
the current requirements of the Internal Revenue Code, if the aggregate
value of a Participant's Employee Account, Rollover Contribution Account
and Nonforfeitable portion of the Matching Contribution Account exceeds
$20,000, the loan cannot exceed the lesser of one-half (1/2) the
Nonforfeitable aggregate value or $50,000 reduced by the excess of (a) the
highest outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which such loan was made over
(b) the outstanding balance of loans from the Plan on the date on which
such loan was made.
7.4. Effective Date of Loans -- Loans will be effective as specified
in the Administrator's rules then in effect.
7.5. Repayment Schedule - The Participant may select a repayment
schedule of 1, 2, 3, 4 or 5 years. If the loan is used to acquire any
dwelling which, within a reasonable time is to be used (determined at the
time the loan is made) as the principal residence of the Participant, the
repayment period may be extended up to 15 years at the election of the
Participant. All repayments will be made through payroll deductions in
accordance with the loan agreement executed at the time the loan is made,
except that, in the event of the sale of all or a portion of the business
of the Employer or one of the Companies, or other unusual circumstances,
the Administrator, through uniform and equitable rules, may establish for
other means of repayment. The loan agreement will permit repayment of the
entire outstanding balance in one lump sum. The minimum repayment amount
per pay period is $10 for Participants paid weekly and $50 for
Participants paid monthly. The repayment schedule shall provide for
substantially level amortization of the loan. Repayments for Participants
in a Period of Service but on an Authorized Leave of Absence or Layoff
shall be made in accordance with procedures established by the
Administrator.
7.6. Limit on Number of Loans -- No more than two loans may be
outstanding at any time.
7.7. Interest Rate -- The interest rate for a loan pursuant to this
Article will be equal to the prime rate published in The Wall Street
Journal on the first business day in June and December of each year. The<PAGE>
PAGE 15
rate published on the first business day in June will apply to loans which
are effective on the last day of the months June through November; the
rate published on the first business day of December will apply to loans
which are effective on the last day of the months of December through May.
7.8. Effect Upon Participants Employee Account -- Upon the granting
of a loan to a Participant by the Administrator, the allocations in the
Participant's Account to the respective investment funds will be reduced
on a pro rata basis and replaced by the loan balance which will be
designated as an asset in the Account. Such reduction shall be effected
by reducing the Participant's Accounts in the following sequence, with no
reduction of the succeeding Accounts until prior Accounts have been
exhausted by the loan: Matching Contribution Account; Employee Account;
and Rollover Contribution Account. Upon repayment of the principal and
interest, the loan balance will be reduced, the Participant Accounts will
be increased in the reverse order in which they were exhausted by the
loan, and the loan payments will be allocated to the respective investment
funds in accordance with the investment election then in effect.
7.9. Effect of Severance From Service and Non-Payment -- In the
event that a loan remains outstanding upon the Retirement, death or
Severance from Service of a Participant, the amount of any unpaid
principal will be deducted from the distribution made to the Participant.
If, as a result of Layoff or Authorized Leave of Absence, a Participant,
although still in a Period of Service, is not being compensated through
the Employer's payroll system, loan payments will be suspended until the
earliest of the first pay date after Participant returns to active
employment, the Participant's Severance from Service Date, or the
expiration of twelve (12) months from the date of the suspension, at which
time the outstanding principal of any unpaid loan will be deducted from
the distribution made to the Participant. In such event, the unpaid
principal and interest will be deducted from the Participant's Account and
any remaining balance will be paid to the Participant if the Participant
incurs a Severance from Service or requests in writing payment of such
balance.
7.10. Loans - Executive Officers -- No loan to an executive officer
from an Account in the Raytheon Common Stock Fund will be effective until
the expiration of six (6) months from the date on which the application
for the loan is received by the Administrator.
ARTICLE VIII - LIMITATIONS OF SECTION 415 OF THE CODE
8.1. Maximum Permissible Amount of a Participant's Annual Addition -
- Notwithstanding any other provision of this Plan, the Maximum
Permissible Amount of a Participant's Annual Addition under this Plan
means the lesser of $30,000 (or beginning January 1, 1986, such larger
amount determined by the Commissioner of the Internal Revenue Service) or
twenty-five percent (25%) of the Participant's compensation for the
Limitation Year. For purposes of this Article VIII, compensation is
defined as the Participant's wages, salaries, fees for professional
services, and other amounts received for personal services actually
rendered in the course of employment with the Employer (including but not
limited to sales commissions, compensation for services on the basis of a
percentage of profits, tips, and bonuses), excluding all items listed in<PAGE>
PAGE 16
subparagraph (2) of Paragraph (d) of 26 CFR Section 1.415-2. If a short
Limitation Year is created because of an amendment changing the Limitation
Year to a different 12-consecutive-month period, the Maximum Permissible
Amount for the short Limitation Year will be the lesser of (1) $30,000 (or
such larger amount determined by the Commissioner of Internal Revenue or
by statute) multiplied by the following fraction:
number of months in the
short Limitation Year
-----------------------
12
or (2) twenty-five percent (25%) of the Participant's compensation for the
short Limitation Year.
8.2. Coordination of Annual Additions -- Notwithstanding any other
provision of this Plan, if any Annual Additions are allocated under other
qualified defined contribution plans maintained by the Employer with
respect to a Participant of this Plan, and the Participant's Elective
Deferral or Matching Contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan would cause the
Annual Additions for the Limitation Year to exceed the Maximum Permissible
Amount specified in Section 8.1, the amount contributed or allocated will
be reduced so that the Annual Additions under all such plans for the
Limitation Year will equal said Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other qualified
defined contribution plans in the aggregate are equal to or greater than
the Maximum Permissible Amount, as specified in Section 8.1, any amount
contributed or allocated to the Participant's account for the Limitation
Year will be treated as an Excess Amount.
8.3. Coordination with Limitation on Benefit from All Plans --
Notwithstanding the foregoing, the otherwise permissible Annual Addition
under this Plan for any Participant may be further reduced to the extent
necessary, as determined by the Administrator, to prevent disqualification
of the Plan under Section 415 of the Internal Revenue Code, which imposes
the following additional limitations on the benefits payable to
Participants who also may be participating in another tax qualified
pension, profit sharing, savings, or stock bonus plan of the Employer: If
an individual is a Participant at any time in both a defined benefit plan
and a defined contribution plan maintained by the Employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction
for any Limitation Year may not exceed 1.0. The defined benefit plan
fraction for any Limitation Year is a fraction, the numerator of which is
the Participant's projected annual benefit under the Plan (determined at
the close of the Limitation Year) and the denominator of which is the
lesser of:
(a) 1.25 (1.0 during any Plan Year in which the Plan has been
determined under Section 9.3 of Article IX to be top heavy) times the
dollar limitation in effect for that Limitation Year, or
(b) 1.4 times the compensation limitation for that Limitation Year.<PAGE>
PAGE 17
The defined contribution plan fraction for any Limitation Year is a
fraction, the numerator of which is the sum of the Annual Additions to the
Participant's accounts in such Limitation Year and all prior Limitation
Years and the denominator of which as of the end of a Limitation Year is
the sum of the defined contribution increments for that year and all prior
Limitation Years. For each Limitation Year, the defined contribution
increment is the lesser of 1.25 (1.0 during any Plan Year in which the
Plan has been determined under Section 9.3 of Article IX to be top heavy)
times the dollar limitation for that year, or 1.4 times the compensation
limitation for that year. For purposes of this limitation, all defined
benefit plans of the Employer whether or not terminated, are to be treated
as one defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, are to be treated as one defined
contribution plan.
ARTICLE IX - LIMITATIONS OF SECTION 416 OF THE CODE
9.1. General Rule -- In the event that the Plan becomes top heavy
with respect to a Plan Year commencing on or after January 1, 1984, the
provisions of this Article shall apply and shall supersede any conflicting
provisions in the Plan.
9.2. Definitions --
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer, an owner (or
considered an owner under Section 415(c)(1)(A) of the Code) of one of
the ten largest interests in the Employer if such individual's
compensation exceeds 150 percent of the dollar limitation under
Section 415(c)(1)(A) of the Code, a five percent (5%) owner of the
Employer, or a one percent (1%) owner of the Employer who has an
annual compensation of more than $150,000. The determination period
of the Plan is the Plan Year containing the determination date and
the four (4) preceding Plan Years. The determination of who is a Key
Employee will be made in accordance with Section 416(i)(1) of the
Code and the regulations thereunder.
(b) Non-Key Employee: Any Employee who is not a Key Employee.<PAGE>
PAGE 18
(c) Top-Heavy Ratio:
(i) If the Employer maintains one or more defined benefit plans
and the Employer has never maintained any defined contribution
plans (including any simplified employee pension plan) which
has covered or could cover a Participant in this Plan, the Top-
Heavy Ratio is a fraction, the numerator of which is the sum of
the present value of accrued benefits of all Key Employees as
of the determination date (including any part of any accrued
benefit distributed in the five-year period ending on the
determination date), and the denominator of which is the sum of
all accrued benefits (including any part of any accrued benefit
distributed in the five-year period ending on the determination
date) of all Participants as of the determination date.
(ii) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined
benefit plans which have covered or could cover a Participant
in this Plan, the Top-Heavy Ratio is a fraction, the numerator
of which is the sum of account balances under the defined
contribution plans for all Key Employees and the present value
of accrued benefits under the defined benefit plans for all Key
Employees, and the denominator of which is the sum of the
account balances under the defined contribution plans for all
Participants and the present value of accrued benefits under
the defined benefit plans for all Participants. Both the
numerator and denominator of the Top-Heavy Ratio are adjusted
for any distribution of an account balance or an accrued
benefit made in the five-year period ending on the
determination date and any contribution due but unpaid as of
the determination date.
(iii) For purposes of (i) and (ii) above, the value of account
balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the
determination date. The account balances and accrued benefits
of a Participant who is not a Key Employee but who was a Key
Employee in a prior year will be disregarded. The calculation
of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations
thereunder. Deductible Employee contributions will not be
taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans, the value of account balances
and accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year.
(d) Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the Employer
which, when considered as a group with the required aggregation
group would continue to satisfy the requirements of Sections
401(a)(4) and 410 of the Code.<PAGE>
PAGE 19
(e) Required aggregation group: (i) Each qualified plan of the
Employer in which at least one Key Employee participates, and
(ii) any other qualified plan of the Employer which enables a
plan described in (i) to meet the requirements of Sections
401(a)(4) and 410 of the Code.
(f) Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For
the first Plan Year of the Plan, the last day of that year.
(g) Valuation date: The last day of each Plan Year.
(h) Present Value: Present Value shall be based only on the
interest rate used by the Administrator to determine compliance
with the funding requirements under the Retirement Act and the
mortality rates specified on an appropriate current unisex
table.
9.3. Determination as to Whether the Plan is Top Heavy -- The
Administrator shall determine whether the Plan is top heavy within the
meaning of Section 416. The Plan shall be top heavy for any Plan Year
beginning after December 31, 1983, if, as of the last day of the preceding
Plan Year (the "determination date"), any of the following conditions
exist:
(a) If the Top-Heavy Ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any required aggregation
group or permissive aggregation group of plans;
(b) If this Plan is a part of a required aggregation group of
plans (but which is not part of a permissive aggregation group)
and the Top-Heavy Ratio for the group of plans exceeds sixty
percent (60%); or
(c) If this Plan is a part of a required aggregation group of
plans and part of a permissive aggregation group and the Top-
Heavy Ratio for the permissive aggregation group exceeds sixty
percent (60%).
In determining whether the Plan is top heavy for Plan Years
commencing after December 31, 1984, the Account balance of a Participant
who has not performed an Hour of Service for the Employer at any time
during the five-consecutive-year period ending on the determination date
shall be excluded from the calculation of the Top Heavy Ratio.
9.4. Minimum Contribution -- For each Plan Year with respect to
which the Plan is top heavy, the minimum amount allocated under the Plan
for the benefit of each Participant who is a Non-Key Employee and who is
otherwise eligible for such an allocation shall be the lesser of:
(a) three percent (3%) of the Non-Key Participant's compensation
(within the meaning of Section 415 of the Code) for the Plan
Year, or<PAGE>
PAGE 20
(b) the Non-Key Participant's compensation (as defined in Section
415 of the Code) times a percentage equal to the largest
percentage of such compensation (not exceeding $200,000)
allocated to any Key Employee for the Plan Year under this Plan
and all other defined contribution plans in the same required
aggregation group. This clause (b) shall not apply to any plan
required to be included in an aggregation group if such plan
enables a defined benefit plan required to be included in such
group to meet the requirements of Section 401(a)(4) or Section
410 of the Code.
This paragraph shall not apply to a Participant covered under a qualified
defined benefit plan maintained by the Employer if the Participant's
vested benefit thereunder satisfies the requirements of Section 416(c) of
the Code. Notwithstanding any other language herein, a Non-Key Eligible
Employee may not fail to receive a defined contribution minimum allocation
because either (1) said Eligible Employee was excluded from participation
(or accrues no benefit) merely because the Employee's compensation is less
than the stated amount, or (2) the Employee is excluded from participation
(or accrues no benefit) merely because of a failure to make Elective
Deferrals.
9.5. Limitation on Pension Benefit -- For any Plan Year in which the
Plan is top-heavy, only the first $200,000 (or such larger amount as may
be prescribed by the Secretary of Treasury or his delegate) of each
Participant's annual compensation will be taken into account for purposes
of determining benefits under the Plan.
9.6. Accelerated Vesting --
(a) For each Plan Year during which the Plan is top heavy, a vesting
schedule which complies with the requirements of Section 416(b)(1)(a)
of the Code will be placed in effect. Each Participant in a Period
of Service during a Plan Year in which the Plan is top-heavy will be
entitled to a Nonforfeitable right to one hundred percent (100%) of
the pension benefit accrued from Employer contributions provided said
Participant has completed a Period of Service with the Employer of at
least three (3) years.
(b) In the event that an accelerated vesting schedule must be placed
in effect in accordance with subparagraph (a) of this Section 9.6 and
the Plan is later determined not to be top heavy, no vesting schedule
change shall be made which shall have the effect of providing a
benefit to a Participant less than the accrued cumulative benefit to
which the Participant was otherwise entitled as of the date of said
vesting schedule change pursuant to said subparagraph (a).
ARTICLE X - THE TRUST FUND
10.1. Trust Agreement -- During the period in which this Plan
remains in existence, the Employer or any successor thereto shall maintain
in effect a Trust Agreement with a corporate trustee as Trustee, to hold,
invest, and distribute the Trust Fund in accordance with the terms of such
Trust Agreement.<PAGE>
PAGE 21
10.2. Investment of Accounts -- The Trustee shall invest and
reinvest the Participant's accounts in investment options as defined in
Section 4.1 as directed by the Administrator or its delegate in writing.
The Administrator shall issue such directions in accordance with the
investment options selected by the Participants which shall remain in
force until altered in writing in accordance with Sections 4.2 and 4.3.
10.3. Expenses -- Expenses of the Plan and Trust shall be paid from
the Trust.
ARTICLE XI - ADMINISTRATION OF THE PLAN
11.1. General Administration -- The general administration of the
Plan shall be the responsibility of Raytheon Company (or any successor
thereto) which shall be the Administrator and Named Fiduciary for purposes
of the Retirement Act. The Company shall have the authority, in its sole
discretion, to construe the terms of the Plan and to make determinations
as to eligibility for benefits and as to other issues within the
"Responsibilities of the Administrator" described in Article XI, Section
11.2. All such determinations of the Company shall be conclusive and
binding on all persons.
11.2. Responsibilities of the Administrator -- The Administrator
shall assign responsibility for performance of all necessary
administrative duties, including the following:
(a) Determination of all questions which may arise under the Plan
with respect to eligibility for participation and administration of
accounts, including without limitation questions with respect to
membership, vesting, loans, withdrawals, accounting, status of accounts,
stock ownership and voting rights, and any other issue requiring
interpretation or application of the Plan.
(b) Reference of appropriate issues to the Offices of the Senior
Vice President - Controller, the Senior Vice President Treasurer, the
Director of Tax Affairs, the Senior Vice President General Counsel, and
the Senior Vice President - Human Resources, respectively, for advice and
counsel.
(c) Establishment of procedures required by the Plan, such as
notification to Employees as to joining the Plan, selecting and changing
investment options, suspending deferrals, exercising voting rights in
stock, withdrawing and borrowing account balances, designation of
beneficiaries, election of method of distribution, and any other matters
requiring a uniform procedure.
(d) Submission of necessary amendments to supplement omissions from
the Plan or reconcile any inconsistency therein.
(e) Filing appropriate reports with the Government as required by
law.
(f) Appointment of a Trustee or Trustees and investment managers.
(g) Review at appropriate intervals of the performance of the
Trustee and such investment managers as may have been designated.<PAGE>
PAGE 22
(h) Appointment of such additional Fiduciaries as deemed necessary
for the effective administration of the Plan, such appointments to be by
written instrument.
11.3. Liability for Acts of Other Fiduciaries -- Each Fiduciary
shall be responsible only for the duties allocated or delegated to said
Fiduciary, and other Fiduciaries shall not be liable for any breach of
fiduciary responsibility with respect to any act or omission of any other
Fiduciary unless:
(a) The Fiduciary knowingly participates in or knowingly attempts to
conceal the act or omission of such other Fiduciary and knows that such
act or omission constitutes a breach of fiduciary responsibility by the
other Fiduciary;
(b) The Fiduciary has knowledge of a breach of fiduciary
responsibility by the other Fiduciary and has not made reasonable efforts
under the circumstances to remedy the breach; or
(c) The Fiduciary's own breach of his specific fiduciary
responsibilities has enabled another Fiduciary to commit a breach. No
Fiduciary shall be liable for any acts or omissions which occur prior to
his assumption of Fiduciary status or after his termination from such
status.
11.4. Employment by Fiduciaries -- Any Fiduciary hereunder may
employ, with the written approval of the Administrator, one or more
persons to render service with regard to any responsibility which has been
assigned to such Fiduciary under the terms of the Plan including legal,
tax, or investment counsel and may delegate to one or more persons any
administrative duties (clerical or otherwise) hereunder.
11.5. Recordkeeping -- The Administrator shall keep or cause to be
kept any necessary data required for determining the account status of
each Participant. In compiling such information, the Administrator may
rely upon its employment records, including representations made by the
Participant in the employment application and subsequent documents
submitted by the Participant to the Employer. The Trustee shall be
entitled to rely upon such information when furnished by the Administrator
or its delegate. Each Employee shall be required to furnish the
Administrator upon request and in such form as prescribed by the
Administrator, such personal information, affidavits and authorizations to
obtain information as the Administrator may deem appropriate for the
proper administration of the Plan, including but not limited to proof of
the Employee's date of birth and the date of birth of any person
designated by a Participant as a Beneficiary.
11.6. Claims Review Procedure -- The Administrator shall make all
determinations as to the right of any person to Accounts under the Plan.
Any such determination by the Administrator shall be made pursuant to the
following procedure:
Step l. Claims with respect to an Account should be filed by a
claimant as soon as practicable after claimant knows or should know that a
dispute has arisen with respect to an Account, but at least thirty (30)<PAGE>
PAGE 23
days prior to the claimant's actual retirement date or, if applicable,
within sixty (60) days after the death, Disability or Severance from
Service of the Participant whose account is at issue, by mailing a copy of
the claim to the Benefits and Services Department, Raytheon Company, 141
Spring Street, Lexington, Massachusetts 02173.
Step 2. In the event that a claim with respect to an Account is
wholly or partially denied by the Administrator, the Administrator shall,
within ninety (90) days following receipt of the claim, so advise the
claimant in writing setting forth: the specific reason or reasons for the
denial; specific reference to pertinent Plan provisions on which the
denial is based; a description of any additional material or information
necessary for the claimant to perfect the claim; an explanation as to why
such material or information is necessary; and an explanation of the
Plan's claim review procedure.
Step 3. Within sixty (60) days following receipt of the denial of a
claim with respect to an Account, a claimant desiring to have the denial
appealed shall file a request for review with the Administrator by mailing
a copy thereof to the address shown in Step 1.
Step 4. Within thirty (30) days following receipt of a request for
review, the Administrator shall provide the claimant a further opportunity
to present his or her position. At the Administrator's discretion, such
presentation may be through an oral or written presentation. Prior to
such presentation, the claimant shall be permitted the opportunity to
review pertinent documents and to submit issues and comments in writing.
Within a reasonable time following presentation of the claimant's
position, which usually should not exceed thirty (30) days, the
Administrator shall inform the claimant in writing of the decision on
review setting forth the reasons for such decision and citing pertinent
provisions in the Plan.
11.7. Indemnification of Directors and Employees -- The Companies
shall indemnify by insurance or otherwise any Fiduciary who is a director,
officer or employee of the Employer, his heirs and legal representatives,
against all liability and reasonable expense, including counsel fees,
amounts paid in settlement and amounts of judgments, fines or penalties,
incurred or imposed upon him in connection with any claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of acts or omissions in his capacity as a Fiduciary hereunder,
provided that such act or omission is not the result of gross negligence
or willful misconduct. The Companies may indemnify other Fiduciaries,
their heirs and legal representatives, under the circumstances, and
subject to the limitations set forth in the preceding sentence, if such
indemnification is determined by the Board of Directors to be in the best
interests of the Companies.
11.8. Immunity from Liability -- Except to the extent that Section
410(a) of the Retirement Act prohibits the granting of immunity to
Fiduciaries from liability for any responsibility, obligation, or duty
imposed under Title I, Subtitle B, Part 4 of said Act, an officer,
employee, member of the Board of Directors of the Employer or other person
assigned responsibility under this Plan shall be immune from any liability
for any action or failure to act except such action or failure to act<PAGE>
PAGE 24
which results from said officer's, Employee's, Participant's or other
person's own gross negligence or willful misconduct.
ARTICLE XII - AMENDMENT OR TERMINATION OF THE PLAN
12.1. Right to Amend or Terminate Plan -- The Company reserves the
right at any time or times, by action of its Board of Directors, to
terminate the contributions of itself or any of the Companies to the Plan
or to modify, amend or terminate the Plan in whole or in part as to its
Employees, in which event a certified copy of the resolution of the Board
of Directors, authorizing such modification, amendment or termination
shall be delivered to the Trustee and to the other Companies whose
Employees are covered by this Plan, provided, however, that the Plan shall
not be amended in such manner as would cause or permit any part of the
corpus of the Trust to be diverted to purposes other than for the
exclusive benefit of the Employees or as would cause or permit any part of
such corpus to revert to any of the Companies prior to the satisfaction of
all liabilities under the Plan, and provided further that the duties or
liabilities of the Trustee shall not be increased without its written
consent, and provided further that any such modification or amendment of
the Plan shall be subject to approval by the Board of Directors of the
Company.
12.2. Change in Vesting Schedule -- No amendment to the vesting
schedule shall deprive a Participant of his or her Nonforfeitable rights
to benefits accrued to the date of the amendment.
12.3. Maintenance of Plan -- The Company has established the Plan
with the bona fide intention and expectation that it will be able to make
its contributions indefinitely, but the Company is not and shall not be
under any obligation or liability whatsoever to continue its contributions
or to maintain the Plan for any given length of time.
12.4. Termination of Plan and Trust -- The Plan and Trust hereby
created shall terminate upon the occurrence of any of the following
events:
(a) Delivery to the Trustee of a notice of termination executed by
the Company specifying the date as of which the Plan and Trust
shall terminate;
(b) Adjudication of the Company as bankrupt or general assignment
by the Company to or for the benefit of creditors or
dissolution of the Company;
In the event of the complete termination of this Plan or the complete
discontinuance of Matching Contributions under it (but a rescission under
Section 13.2 for failure to qualify initially is not such a termination or
complete discontinuance), the rights of each Participant to the amounts
then credited to his or her Account shall be Nonforfeitable. In the event
of the partial termination of this Plan, the rights of each Employee (as
to whom the Plan is considered terminated) to the amounts then credited to
his or her Account, shall be Nonforfeitable. Whether or not there is a
complete or partial termination of this Plan shall be determined under the
regulations promulgated pursuant to the Internal Revenue Code. To the<PAGE>
PAGE 25
extent this paragraph is inconsistent with any provisions contained
elsewhere in this Plan or in the Trust which forms a part of this Plan,
this paragraph shall govern. Upon such termination of the Plan and Trust,
after payment of all expenses and proportional adjustment of accounts to
reflect such expenses, fund losses or profits, and reallocations to the
date of termination, each Participant or former Participant shall be
entitled to receive any amounts then credited to his or her Account in the
Trust Fund. The Trustee may make payments in cash or, to the extent
permitted by Section 6.6, in stock.
ARTICLE XIII - ADDITIONAL PROVISIONS
13.1. Effect of Merger, Consolidation or Transfer -- In the event of
any merger or consolidation with or transfer of assets or liabilities to
any other plan or to this Plan, each Participant of the Plan shall be
entitled to a benefit immediately after the merger, consolidation or
transfer, which is equal to or greater than the benefit he or she would
have been entitled to receive immediately before the merger, consolidation
or transfer (if the Plan had been terminated).
13.2. Necessity of Initial Qualification -- This Plan is established
with the intent that it shall qualify under Sections 401(a) and 401(k) of
the Code as that section exists at the time the Plan is established. If
the Internal Revenue Service determines that the Plan initially fails to
meet those requirements, then within thirty (30) days after the date of
such determination all of the vested assets of the Trust Fund held for the
benefit of Participants and their beneficiaries shall be distributed
equitably among the contributors to the Plan in proportion to their
contributions, and the Plan shall be considered to be rescinded and of no
force or effect, unless such inadequacy is removed by a retroactive
amendment pursuant to the Code. Any nonvested Matching Contributions and
earnings attributable thereto shall be returned to the Companies.
13.3. Limitation of Assignment -- No account under the Plan shall be
subject in any manner to attachment, anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, or the vesting of
rights in any person by operation of law or otherwise except as provided
under this Plan, including but not limited to the Trustee or Receiver in
Bankruptcy, and any attempt so to anticipate, alienate, sell, transfer,
assign, encumber or charge the same shall be void, nor shall any such
benefit be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such benefit.
If any Participant is adjudicated bankrupt, or attempts to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any benefit
under the Plan, then such benefit shall, in the discretion of the
Administrator, cease and terminate and in that event the Trustee shall
hold or apply the same or any part thereof to or for the benefit of such
Participant in such manner as the Administrator may direct. Effective
January 1, 1985, this Section shall not apply to qualified domestic
relations orders as defined in the Retirement Equity Act of 1984.
13.4. Limitation of Rights of Employees -- This Plan is strictly a
voluntary undertaking on the part of the Companies and shall not be deemed
to constitute a contract between any of the Companies and any Employee, or
to be a consideration for, or an inducement to, or a condition of the<PAGE>
PAGE 26
employment of any Employee. Nothing contained in the Plan shall be deemed
to give any Employee the right to be retained in the service of any of the
Companies or shall interfere with the right of any of the Companies to
discharge or otherwise terminate the employment of any Employee of the
Company at any time. No Employee shall be entitled to any right or claim
hereunder except to the extent such right is specifically fixed under the
terms of the Plan.
13.5. Construction -- The Plan shall be construed, regulated, and
administered under the laws of the Commonwealth of Massachusetts, except
to the extent that the Retirement Act otherwise requires. In the event
that any provision of this Plan is inconsistent with any provision in the
Retirement Act, the provision in the Retirement Act shall be deemed to be
controlling.
ARTICLE XIV - DEFINITIONS
The following terms have the meaning specified below unless the
context indicates otherwise:
14.1. "Account" means the entire interest of a Participant in the
Trust Fund. A Participant's Account shall consist of an Employee Account
and a Matching Contribution Account.
14.2. "Administrator" means Raytheon Company.
14.3. "Annual Addition" means a Participant's Matching Contribution
and the Participant's Elective Deferral during a Limitation Year.
14.4. "Authorized Leave of Absence" means an absence approved by the
Companies on a uniform and nondiscriminatory basis not exceeding one (1)
year for any of the following reasons: illness of Employee or relative,
death of relative, education of Employee, or personal or family business
of an extraordinary nature, provided in each case that the Employee
returns to the service of the Companies within the time period specified
by the Companies.
14.5. "Authorized Military Leave of Absence" means any absence due
to service in the Armed Forces of the United States, upon completion of
which the Employee is entitled under any applicable Federal law to
reemployment at the termination of such military service, provided that he
returns to the service of the Companies within the period provided for by
such applicable Federal law or such further period as may be established
by the Administrator. As used in this paragraph, the term "Armed Forces of
the United States" excludes the Merchant Marine.
14.6. "Beneficiary" means a Participant's Surviving Spouse. If there
is no Surviving Spouse, or if the Surviving Spouse has given written
consent to the designation of another person or persons as Beneficiary,
then Beneficiary shall means said person or persons designated by the
Participant to be paid the lump sum value of the Participant's Account in
the event of the Participant's death.
14.7. "Board of Directors" means the Board of Directors of Raytheon
Company.<PAGE>
PAGE 27
14.8. "Company" means Raytheon Company but shall not include a
Division, Operation or similar cohesive group of Raytheon Company excluded
by the Board of Directors of Raytheon Company.
14.9. "Companies" means the Company and any Subsidiary of the
Company which elects through an authorized officer to participate in the
Plan on account of its Employees, provided that participation in the Plan
by such a Subsidiary is approved by the Board of Directors of the Company,
or an officer to whom authority to approve participation by a subsidiary
is delegated by the Board of Directors, but shall not include any
Division, Operation or similar cohesive group of a participating
Subsidiary excluded by the Board of Directors of the Subsidiary and the
Board of Directors of the Company.
14.10. "Designated Hourly Payroll" means an hourly payroll or
portion thereof, processed in the United States, of one of the Companies
which is designated in writing by the Administrator in accordance with
nondiscriminatory and uniform rules as a payroll the Employees on which
are eligible to participate in this Plan.
14.11. "Disability" means that the Participant is totally and
permanently disabled by bodily injury or disease so as to be prevented
from engaging in any occupation for compensation or profit. The
determination of disability shall be made by the Administrator with the
aid of competent medical advice. It shall be based on such evidence as
the Administrator deems necessary to establish disability or the
continuation thereof.
14.12. "Early Retirement Date" means the first day of the month
subsequent to the earliest date on which the Participant has both attained
age 55 and completed a Period of Service of ten (10) years.
14.13. "Elective Deferral" means a voluntary reduction of
Participant's compensation in accordance with Section 2.3 hereof.
14.14. "Eligible Compensation" means the base pay, supervisory
differentials, shift premiums and, effective January 1, 1985, sales
commissions, excluding all other earnings from any source.
14.15. "Eligible Employee" means any Employee on a U.S. based
Salaried or Designated Hourly Payroll of one of the Companies, excluding
Employees in cooperative studies and intern programs and a person who is
an Employee solely by reason of being a leased Employee within the meaning
of Section 414(n) of the Internal Revenue Code.
14.16. "Employee" means any person performing compensated services
for the Employer who meets the definition of "Employee" for income tax
withholding purposes under Treas. Regs. 31.3401(c)-1 and any person who is
a leased Employee providing services to the Employer as recipient pursuant
to an agreement between the Employer and a leasing organization in
accordance with Section 414(n)(2) of the Internal Revenue Code; provided,
however, that a leased Employee shall not be an Employee hereunder if
covered by a plan, as described in Section 414(n)(5) of the Code, of the
leasing organization.<PAGE>
PAGE 28
14.17. "Employee Account" means that portion of Participant's
Account which is attributable to Elective Deferrals, adjustments for
withdrawals and distributions, and the earnings and losses attributable
thereto.
14.18. "Employer" means Raytheon Company and, where the context
requires, any subsidiary of Raytheon Company while such subsidiary is, or
was, a member of a "controlled group of corporations" within the meaning
of Section 414(b) of the Internal Revenue Code.
14.19. "Employment Commencement Date" is the date on which the
Employee first performs an Hour of Service with the Employer.
14.20. "Enrollment Agreement" means a salary reduction agreement
pursuant to which an Eligible Employee voluntarily joins the Plan and
authorizes deferral of a portion of the Participant's Eligible
Compensation.
14.21. "Entry Date" means the first Pay Date in each calendar month.
14.22. "Fidelity" means Fidelity Investments, the recordkeeper for
the Plan.
14.23. "Fiduciary" means a named fiduciary and any other person or
group of persons who assumes a fiduciary responsibility within the meaning
of the Retirement Act under this Plan whether by expressed delegation or
otherwise but only with respect to the specific responsibilities of each
for the administration of the Plan and Trust Fund.
14.24. "Higher Paid Participant" means a Participant who either
received gross earnings (including any Employee Deferrals) in the
preceding Plan Year in excess of $55,000, or whose base salary is $4,200
per month or more.
14.25. (a) "Hour of Service" means an hour with respect to which
any Employee is paid, or entitled to payment, for the performance of
duties for the Employer during the applicable computation period.
(b) "Hour of Service" shall include an hour for which the
Employee is entitled to credit under subparagraph (a) hereof as a result
of employment:
(i) with a predecessor company substantially all of the assets
of which have been acquired by the Employer, provided that where only
a portion of the operations of a company have been acquired, only
service with said acquired portion prior to the acquisition will be
included and that the Employee was employed by said predecessor
company at the time of acquisition; or
(ii) with a Division, Operation or similar cohesive group of
the Employer excluded from participation in the Plan.
(c) To the extent applicable, the rules set forth in 29 CFR
Sections 2530.200b-2(b) and (c) for computing an "Hour of Service" are
incorporated herein by reference.<PAGE>
PAGE 29
14.26. "Layoff" means an involuntary interruption of service due to
reduction of work force with or without the possibility of recall to
employment when conditions warrant.
14.27. "Limitation Year" means the calendar year or any other 12-
consecutive-month period adopted for all qualified deferred compensation
plans of the Company pursuant to a written resolution adopted by the
Company.
14.28. "Matching Contribution" means contribution made to the Trust
in accordance with Section 3.7 hereof.
14.29. "Matching Contribution Account" means that portion of
Participant's Account which is attributable to Matching Contributions by
the Companies, adjustments for withdrawals and distributions, and the
earnings and losses attributable thereto.
14.30. "Net Annual Profits" means the current earnings of the
Companies for the Plan Year determined in accordance with generally
accepted accounting principles before federal and local income taxes and
before contributions to this Plan or any other qualified plan.
14.31. "Net Profits" means the accumulated earnings of the Companies
at the end of the Plan Year determined in accordance with generally
accepted accounting principles. For the purposes hereof "accumulated
earnings at the end of the Plan Year" shall include Net Annual Profits for
such Plan Year calculated before any deduction is taken for depreciation,
if any.
14.32. "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of
determination under this Plan.
14.33. "Normal Retirement Age" means the Participant's sixty-fifth
(65th) birthday.
14.34. "Participant" means an individual who is enrolled in the Plan
pursuant to Article III and has not withdrawn the entire amount of his or
her Account.
14.35. "Pay Date" means the date designated for payment of wages or
salary during the first pay period of a calendar month.
14.36. "Period of Participation" means that portion of a Period of
Service during which the Eligible Employee was a Participant, and had an
Employee Account in the Plan.
14.37. "Period of Service" means the period of time beginning on the
Employee's Employment Commencement Date or Reemployment Commencement Date,
whichever is applicable, and ending on the Employee's Severance from
Service Date.
14.38. "Period of Severance" means the period of time beginning on
the Employee's Severance from Service Date and ending on the Employee's
Reemployment Commencement Date.<PAGE>
PAGE 30
14.39. "Plan" means the Raytheon Savings and Investment Plan as
amended from time to time.
14.40. "Plan Year" means a calendar year, or a portion thereof
occurring prior to the termination of the Plan.
14.41. "Reemployment Commencement Date" means the first date on
which the Employee performs an Hour of Service following a Period of
Severance which is excluded under Section 5.3 in determining whether a
Participant has a Nonforfeitable right to his or her Matching Contribution
Account.
14.42. "Retirement" means a Severance from Service when the
Participant has either attained age 55 and completed a Period of Service
of at least ten (10) years or has attained Normal Retirement Age.
14.43. "Retirement Act" means the Employee Retirement Income
Security Act of 1974, including any amendments thereto.
14.44. "Rollover Contribution Account" means that portion of a
Participant's Account which is attributable to rollover contributions
received pursuant to Section 3.9, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.45. "Salaried Payrolls" means the nonexempt salaried and the
exempt salaried payrolls which are processed in the United States.
14.46. "Severance from Service" means the termination of employment
by reason of quit, Retirement, discharge, death or failure to return from
Layoff, Authorized Leave of Absence, Authorized Military Leave of Absence
or Disability.
14.47. "Severance from Service Date" means the earlier of:
(a) the date on which an Employee quits, retires, is
discharged, or dies; or
(b) except as provided in paragraphs (c) and (d) hereof, the
first anniversary of the first date of a period during which an Employee
is absent for any reason other than quit, retirement, discharge or death,
provided that, on an equitable and uniform basis, the Administrator may
determine that, in the case of a layoff as the result of a permanent plant
closing, the Administrator may designate the date of layoff or other
appropriate date prior to the first anniversary of the first date of
absence as the Severance From Service Date; or
(c) in the case of an Authorized Military Leave of Absence
from which the Employee does not return prior to expiration of recall
rights, "Severance from Service Date" means the first day of absence
because of the leave; or
(d) in the case of an absence due to Disability, "Severance
from Service Date" means the earlier of the first anniversary of the first
day of absence because of the Disability or the date of termination of the
Disability; or<PAGE>
PAGE 31
(e) in the case of an Employee who is discharged or quits (i)
by reason of the pregnancy of the Employee, (ii) by reason of the birth of
a child to the Employee, (iii) by reason of the placement of a child with
the Employee in connection with the adoption of such child by the Employee
or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement, "Severance from Service
Date," for the sole purpose of determining the length of a Period of
Service, shall mean the first anniversary of the quit or discharge.
14.48. "Subsidiary" means any corporation designated by the Board of
Directors as a Subsidiary, provided that for the purposes of the Plan no
corporation shall be considered a Subsidiary during any period when less
than fifty percent (50%) of its outstanding voting stock is beneficially
owned by the Company.
14.49. "Surviving Spouse" means a lawful spouse surviving the
Participant as of the date of Participant's death.
14.50. "Trust Agreement" means the agreement between the Company and
the Trustee, and any successor agreement made and entered into for the
establishment of a trust fund of all contributions which may be made to
the Trustee under the Plan.
14.51. "Trustee" means the Trustee and any successor trustees under
the Trust Agreement.
14.52. "Trust Fund" means the cash, securities, and other property
held by the Trustee for the purposes of the Plan.
14.53. "Valuation Date" means the last business day of each calendar
month.
14.54. Words used in either the masculine or feminine gender shall
be read and construed so as to apply to both genders where the context so
warrants. Words used in the singular shall be read and construed in the
plural where they so apply.<PAGE>
PAGE 1
EXHIBIT (99.2)
ANNUAL REPORT
--------------
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended
December 31, 1993
---------
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES<PAGE>
PAGE 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We have audited the accompanying statements of net assets available
for plan benefits of the Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees as of December 31, 1993 and 1992, and the related
statements of changes in net assets available for plan benefits for each of
the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Raytheon Savings and Investment Plan for Specified Hourly
Payroll Employees as of December 31, 1993 and 1992, and the changes in net
assets available for plan benefits for each of the three years in the
period ended December 31, 1993 in conformity with generally accepted
accounting principles.
/s/ Coopers & Lybrand
Boston, Massachusetts COOPERS & LYBRAND
June 17, 1994<PAGE>
PAGE 3
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1993 and 1992
-------
1993 1992
---- ----
Assets:
Investments, at fair value
(Notes B, E, F and H) $170,012,872 $133,639,217
Receivables:
Accrued investment income 714 81,945
Employee deferrals 475,055 360,722
Employer contributions 159,250 118,468
Loans receivable from participants 19,366,838 13,471,184
Cash and cash equivalents 300,682 252,956
------------ ------------
Total assets 190,315,411 147,924,492
------------ ------------
Liabilities:
Payable for outstanding purchases - 43,113
Administrative expenses 40,518 125,281
Forfeitures 56,531 45,767
------------ ------------
Total liabilities 97,049 214,161
------------ ------------
Net assets available for plan
benefits $190,218,362 $147,710,331
============ ============
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 4
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
for the years ended December 31, 1993, 1992 and 1991
-------
1993 1992 1991
---- ---- ----
Additions to net assets
attributable to:
Investment income
(Notes B, E and H):
Change in appreciation
(depreciation) of
investments $ 7,282,777 $ 3,926,196 $ 3,091,031
Interest 7,379,266 6,766,372 5,272,314
Dividends 1,005,307 806,094 656,380
Capital gains
distributions 236,720 - -
------------ ------------ ------------
15,904,070 11,498,662 9,019,725
------------ ------------ ------------
Contributions and deferrals:
Employee deferrals 26,966,573 29,887,121 23,123,294
Employer contributions 9,262,714 9,271,398 8,837,734
Other additions, net
(Note G) - 120,160 122,966
------------ ------------ ------------
36,229,287 39,278,679 32,083,994
------------ ------------ ------------
Total additions 52,133,357 50,777,341 41,103,719
------------ ------------ ------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 9,159,020 6,725,742 3,666,660
Other deductions, net
(Note G) 273,041 - 19,304
Administrative expenses 193,265 265,350 246,854
------------ ------------ ------------
Total deductions 9,625,326 6,991,092 3,932,818
------------ ------------ ------------
Increase in net assets 42,508,031 43,786,249 37,170,901
Net assets, beginning
of year 147,710,331 103,924,082 66,753,181
------------ ------------ ------------
Net assets, end of year $190,218,362 $147,710,331 $103,924,082<PAGE>
PAGE 5
============ ============ ============
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 6
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
--------
A. Description of Plan:
General
Raytheon Savings and Investment Plan for Specified Hourly Payroll
Employees (the "Plan") is a defined contribution plan covering
certain hourly payroll employees of Raytheon Company (the "Company")
who are members of specified labor unions. To participate in the
Plan, eligible employees must have three months of service and may
enter the Plan only on the first day of each month. The purpose of
the Plan is to provide participants with a tax-effective means of
meeting both short and long-term investments objectives. The Plan
is intended to be a "qualified cash or deferred arrangement" under
Section 401(a) and 401(k) of the Internal Revenue Code (the "Code").
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). The total number of
participants in the Plan as of December 31, 1993 was 15,854.
Participants by fund were as follows as of December 31, 1993:
Guaranteed Income Fund 11,962
Equity Fund 4,598
Raytheon Common Stock Fund 12,917
Stock Index Fund 2,584
Balanced Fund 1,003
Effective July 31, 1992, the Plan's investments were combined with
the investments of other similar defined contribution plans of
Raytheon Company and Subsidiaries Consolidated into the Raytheon
Company Master Trust for Defined Contribution Plans ("Master
Trust"). The trustee of the Master Trust maintains a separate
account reflecting the equitable share in the Trust of each plan.
Contributions and Deferrals
Eligible employees are allowed to defer to the Plan up to 15% of
their salaries. The Company contributes amounts equal to 50% of
each participant's deferral, up to a maximum of 3% of the
participant's salary. As of December 31, 1993, the combined annual
employee deferral and employer contribution for a participant cannot
exceed $13,491. Effective April 1, 1991, rollover contributions
from other qualified plans were accepted by the Plan. Participants
may invest their deferrals in increments of 10% in any combination
of five funds: (a) a Guaranteed Income Fund under which assets are
invested primarily in contracts providing for fixed rates of
interest for specified periods of time, (b) an Equity Fund which
invests in shares of a mutual fund which consists primarily of<PAGE>
PAGE 7
income-producing equity securities, (c) a Raytheon Common Stock Fund
which invests in shares of Raytheon Company Common Stock, (d) a
Stock Index Fund which invests in a commingled pool consisting
primarily of equity securities and is designed to track the S&P 500
Index and (e) a Balanced Fund which invests in shares of a mutual
fund which consists primarily of equity securities, bonds and money
market instruments. Dividends and distributions from investments of
the Raytheon Common Stock Fund, the Equity Fund and the Balanced
Fund are reinvested in their respective funds; stock dividends,
stock splits and similar changes are also reflected in the funds.
Participant Accounts
Each participant's account is credited with the participant's
deferral, the Company's contribution and an allocation of Plan
earnings. Plan earnings are allocated based on account balances by
fund.
Vesting
Participants are immediately vested in their voluntary deferrals
plus actual earnings thereon. Vesting requirements for employer
contributions plus earnings thereon may vary depending upon when an
employee became eligible to participate in the Plan. Vesting occurs
upon completion of a certain period of service or upon retirement,
death, disability, or attainment of retirement age. Forfeitures of
the nonvested portions of terminated participants' accounts are used
to reduce required contributions of the Company.
Benefits and Withdrawals
A participant may withdraw all or a portion of deferrals, employer
contributions and related earnings made upon attainment of age 59
1/2. For reasons of financial hardship, as defined in the Plan
document, a participant may withdraw all or a portion of deferrals.
On termination of employment, a participant will receive a lump-sum
distribution unless the vested account is valued in excess of $3,500
and the participant elects to defer distribution. A retiree or a
beneficiary of a deceased participant may defer the distribution to
January of the following year.
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum
amount of a loan is the lesser of one-half (1/2) of the
participant's account balance or $50,000. The minimum loan which
may be granted is $500. The interest rate applied is equal to the
prime rate published in the WALL STREET JOURNAL on the first
business day in June and December of each year. Loans must be
repaid over a period of up to five years by means of payroll
deductions. In certain cases, the repayment period may be extended
up to 15 years. Interest paid to the Plan on loans to participants<PAGE>
PAGE 8
is credited to the borrower's account in the investment fund to
which repayments are made.
Administrative Expenses
Substantially all expenses of administering the Plan are paid by the
Plan.
B. Summary of Significant Accounting Policies:
The Plan's guaranteed income contracts are valued at cost, defined as
net contributions and deferrals plus interest earned at contracted
rates, which approximates fair value. Investments in mutual funds and
the commingled pool are valued at the closing net asset value reported
on the last business day of the year. Investments in securities
(common stocks) traded on a national securities exchange are valued at
the last reported sales price on the last business day of the year.
Cash equivalents are short-term money market instruments and are
valued at cost which approximates fair value.
Security transactions are recorded on trade date. Except for its
guaranteed income contracts (Note E), the Plan's investments are held
by bank-administered trust funds. Payables for outstanding security
transactions represent trades which have occurred but have not yet
settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Dividend income is recorded on the ex-dividend date. Income from
other investments is recorded as earned on an accrual basis.
C. Federal Income Tax Status:
The Plan is a "qualified cash or deferred arrangement" within the
meaning of Section 401(k) of the Code. The Company has received a
favorable determination letter from the Internal Revenue Service which
states that the Plan is qualified under Sections 401(a) and 401(k) of
the Code. The Plan obtained its latest determination letter in 1988,
in which the Internal Revenue Service stated that the Plan, as then
designated, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the Plan administrator and the Plan's
tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, no provision for income taxes has
been included in the Plan's financial statements.
D. Plan Termination:<PAGE>
PAGE 9
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times to discontinue
its contributions and to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, participants will become
100% vested in their account balances including Company contributions.
E. Guaranteed Income Contracts (GICs):
The Plan holds three collateralized fixed income investment portfolios
(with no expiration date), two of which are managed by insurance
companies and one of which is managed by an investment management
firm. The credited interest rates are adjusted semiannually to
reflect the experienced and anticipated yields to be earned on such
investments, based on their book value. The annual rates were 5.80%,
6.34% and 6.28% and the effective annual rates were 5.97%, 6.55% and
6.48%, respectively, at December 31, 1993.
The values of the portfolios managed by Metropolitan Life Insurance
Company, the Prudential Asset Management Company and Banker's Trust
were $40,806,369, $28,165,977 and $47,207,505, respectively, at
December 31, 1993. The values of GICs held with Metropolitan Life
Insurance Company, The Prudential Asset Management Company and Loomis,
Sayles & Company were $49,506,344, $22,256,423 and $28,516,878,
respectively, at December 31, 1992.
F. Related Party Transactions:
In accordance with the provisions of the Plan, State Street Bank and
Trust Company (the "Trustee") acted as the Plan's agent for purchases
and sales of shares of Raytheon Company Common Stock until July 31,
1992. Effective July 31, 1992, Fidelity Management Trust Company (the
"Trustee") acts as the Plan's agent for purchases and sales of shares
of Raytheon Company Common Stock. For the years ended December 31,
1993, 1992 and 1991, purchases of Raytheon Company Common Stock
amounted to $3,468,690, $3,891,844 and $1,770,946, respectively.
Sales of Raytheon Company Common Stock amounted to $701,287, $172,464
and $522,892 in 1993, 1992 and 1991, respectively.
G. Other Additions and Deductions:
Other additions and deductions represent transfers of participant
accounts between the Raytheon Savings and Investment Plan and the
Raytheon Savings and Investment Plan for Specified Hourly Payroll
Employees for those participants who changed plans during the year.<PAGE>
PAGE 10
<TABLE>
H. Fund Data:
The following is a summary of net assets available for plan benefits by fund as of December 31:
<CAPTION> 1993
-------------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Guaranteed Income Contracts $116,179,851 $116,179,851
Fidelity Equity Income Fund
(656,249 shares) - $22,207,455 22,207,455
Raytheon Company Common Stock
(276,185 shares) - - $18,228,199 18,228,199
BT Pyramid Equity Index Fund
(8,668 shares) - - - $8,569,700 8,569,700
Fidelity Balanced Fund
(360,543 shares) - - - - $4,827,667 4,827,667
------------ ----------- ----------- ---------- ---------- ------------
Total investments 116,179,851 22,207,455 18,228,199 8,569,700 4,827,667 170,012,872
Receivables:
Accrued investment income - - 452 262 - 714
Employee deferrals 302,238 58,159 52,232 35,678 26,748 475,055
Employer contributions 104,690 21,475 15,361 10,461 7,263 159,250
Loans receivable from
participants - - - - - $19,366,838 19,366,838
Cash and cash equivalents - - 221,033 79,649 - - 300,682
------------ ----------- ----------- ---------- ---------- ----------- ------------
Total assets 116,586,779 22,287,089 18,517,277 8,695,750 4,861,678 19,366,838 190,315,411
------------ ----------- ----------- ---------- ---------- ----------- ------------
Liabilities:
Administrative expenses 26,042 4,730 6,685 1,909 1,152 - 40,518
Forfeitures 41,677 5,258 7,641 1,522 433 - 56,531
------------ ----------- ----------- ---------- ---------- ----------- ------------
Total liabilities 67,719 9,988 14,326 3,431 1,585 - 97,049
------------ ----------- ----------- ---------- ---------- ----------- ------------<PAGE>
============ =========== =========== ========== ========== =========== ============<PAGE>
The following is a summary of net assets available for plan benefits by fund as of December 31:
1992
---------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Contracts with insurance companies $100,279,645 $100,279,645
Fidelity Equity Income Fund
(525,017 shares) - $15,230,749 15,230,749
Raytheon Company Common Stock
(233,508 shares) - - $11,967,299 11,967,299
BT Pyramid Equity Index Fund
(6,867 shares) - - - $6,161,524 6,161,524
------------ ----------- ----------- ---------- ------------
Total investments 100,279,645 15,230,749 11,967,299 6,161,524 133,639,217
Receivables:
Accrued investment income - - 81,696 249 81,945
Employee deferrals 258,548 33,704 29,010 39,460 360,722
Employer contributions 92,900 11,225 7,072 7,271 118,468
Loans receivable from participants - - - - $13,471,184 13,471,184
Cash and cash equivalents - - 165,001 87,955 - 252,956
------------ ----------- ----------- ---------- ----------- ------------
Total assets 100,631,093 15,275,678 12,250,078 6,296,459 13,471,184 147,924,492
------------ ----------- ----------- ---------- ----------- ------------
Liabilities:
Payable for outstanding purchases - - 43,113 - - 43,113
Administrative expenses 93,929 14,238 11,409 5,705 - 125,281
Forfeitures 29,618 5,305 7,920 2,924 - 45,767
------------ ----------- ----------- ---------- ----------- ------------
Total liabilities 123,547 19,543 62,442 8,629 - 214,161
------------ ----------- ----------- ---------- ----------- ------------
Net assets available for plan benefits $100,507,546 $15,256,135 $12,187,636 $6,287,830 $13,471,184 $147,710,331
============ =========== =========== ========== =========== ============<PAGE>
PA
The following is a summary of changes in net assets available for plan benefits by fund for the year ended December 31:
1993
--------------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ------ -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 2,772,150 $ 3,747,423 $ 710,579 $ 52,625 $ 7,282,777
Interest $ 7,371,272 - 5,455 2,539 - 7,379,266
Dividends - 689,705 192,719 - 122,883 1,005,307
Capital gains
distributions - 76,695 - - 160,025 236,720
------------ ----------- ----------- ---------- ---------- ------------
7,371,272 3,538,550 3,945,597 713,118 335,533 15,904,070
------------ ----------- ----------- ---------- ---------- ------------
Contributions and deferrals:
Employee deferrals 18,741,136 3,180,274 2,276,155 2,018,935 750,073 26,966,573
Employer contributions 6,607,442 1,039,483 785,680 621,048 209,061 9,262,714
------------ ----------- ----------- ---------- ---------- ------------
25,348,578 4,219,757 3,061,835 2,639,983 959,134 36,229,287
------------ ----------- ----------- ---------- ---------- ------------
Total additions 32,719,850 7,758,307 7,007,432 3,353,101 1,294,667 52,133,357
------------ ----------- ----------- ---------- ---------- ------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 7,091,667 830,158 882,203 290,231 64,761 9,159,020
Other deductions, net 169,114 32,744 52,368 18,523 292 273,041
Administrative expenses 137,540 23,380 18,966 9,416 3,963 193,265
------------ ----------- ----------- ---------- ---------- ------------
Total deductions 7,398,321 886,282 953,537 318,170 69,016 9,625,326
Interfund transfers (5,115,130) 904,342 996,999 (477,875) 3,691,664 -
Loans to participants (10,617,835) (1,745,619) (1,455,870) (762,052) (269,318) $14,850,694 -
Repayment of loan principal 6,422,950 990,218 720,291 609,485 212,096 (8,955,040) -<PAGE>
PAGE
Net assets, beginning
of year 100,507,546 15,256,135 12,187,636 6,287,830 - 13,471,184 147,710,331
------------ ----------- ----------- ---------- ---------- ----------- ------------
Net assets, end of year $116,519,060 $22,277,101 $18,502,951 $8,692,319 $4,860,093 $19,366,838 $190,218,362
============ =========== =========== ========== ========== =========== ============<PAGE>
PA
The following is a summary of changes in net assets by fund for the year ended December 31:
============ =========== =========== ========== ========== =========== ============<PAGE>
PAGE
The following is a sum 1992
--------------------------------------------------------------------------------
Guarantee Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 1,286,595 $ 2,181,856 $ 457,745 $ 3,926,196
Interest $ 6,759,240 1,250 4,704 1,178 6,766,372
Dividends - 514,595 291,499 - 806,094
------------ ----------- ----------- ---------- ------------
6,759,240 1,802,440 2,478,059 458,923 11,498,662
------------ ----------- ----------- ---------- ------------
Contributions and deferrals:
Employee deferrals 22,010,901 3,402,682 2,120,388 2,353,150 29,887,121
Employer contributions 7,115,808 931,704 674,501 549,385 9,271,398
Other additions 69,180 16,234 5,671 29,075 120,160
------------ ----------- ----------- ---------- ------------
29,195,889 4,350,620 2,800,560 2,931,610 39,278,679
------------ ----------- ----------- ---------- ------------
Total additions 35,955,129 6,153,060 5,278,619 3,390,533 50,777,341
------------ ----------- ----------- ---------- ------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 5,487,179 649,504 478,812 110,247 6,725,742
Other deductions, net - - - - -
Administrative expenses 201,489 29,319 25,407 9,135 265,350
------------ ----------- ----------- ---------- ------------
Total deductions 5,688,668 678,823 504,219 119,382 6,991,092
------------ ----------- ----------- ---------- ------------
Interfund transfers (803,501) (76,502) (275,091) 1,155,094 -
Loans to participants (9,418,955) (1,392,496) (940,345) (492,228) $12,244,024 -
Repayment of loan principal 3,849,842 532,474 345,664 286,857 (5,014,837) - <PAGE>
Net assets, beginning of year 76,613,699 10,718,422 8,283,008 2,066,956 6,241,997 103,924,082
------------ ----------- ----------- ----------- ----------- ------------
Net assets, end of year $100,507,546 $15,256,135 $12,187,636 $6,287,830 $13,471,184 $147,710,331
============ =========== =========== ========== =========== ============<PAGE>
The following is a summary of changes in net assets by fund for the year ended D
ecember 31:
1991
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 1,746,875 $1,107,894 $ 236,262 $ 3,091,031
Interest $ 5,263,535 2,356 6,113 310 5,272,314
Dividends - 433,961 222,419 - 656,380
----------- ----------- ---------- ---------- ------------
5,263,535 2,183,192 1,336,426 236,572 9,019,725
----------- ----------- ---------- ---------- ------------
Contributions and deferrals:
Employee deferrals 18,420,197 2,322,716 1,813,828 566,553 23,123,294
Employer contributions 7,114,473 864,405 678,790 180,066 8,837,734
Other additions 110,440 - - 12,526 122,966
----------- ----------- ---------- ---------- ------------
25,645,110 3,187,121 2,492,618 759,145 32,083,994
----------- ----------- ---------- ---------- ------------
Total additions 30,908,645 5,370,313 3,829,044 995,717 41,103,719
----------- ----------- ---------- ---------- ------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 2,931,478 381,861 342,950 10,371 3,666,660
Other deductions, net - 2,099 17,205 - 19,304
Administrative expenses 193,266 27,438 24,505 1,645 246,854
----------- ----------- ---------- ---------- ------------
Total deductions 3,124,744 411,398 384,660 12,016 3,932,818
----------- ----------- ---------- ---------- ------------
Interfund transfers 1,607,253 (1,987,585) (761,847) 1,142,179 -
Loans to participants (5,111,898) (649,506) (517,641) (86,453) $6,365,498 -
Repayment of loan principal 1,358,685 213,572 115,285 27,529 (1,715,071) -
----------- ----------- ---------- ---------- ---------- ------------<PAGE>
----------- ----------- ---------- ---------- ---------- ------------
Net assets, end of year $76,613,699 $10,718,422 $8,283,008 $2,066,956 $6,241,997 $103,924,082
=========== =========== ========== ========== ========== ============
/TABLE
<PAGE>
PAGE 20
=========== ========== ========== ========== ============
PAGE 20
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Raytheon Savings and Investment Plan for Specified Hourly Payroll
employees has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
BY /s/ Frank D. Umanzio
Frank D. Umanzio
Vice President - Human Resources
DATE June 30, 1994<PAGE>
PAGE 1
EXHIBIT (99.2a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company on Form S-8 (File No. 33-5650, No. 33-10811,
No. 33-21741, and No. 33-24695) of our report dated June 17, 1994 on our
audits of the financial statements of the Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees as of December 31, 1993 and 1992 and
for each of the three years in the period ended December 31, 1993, which
report is included in this annual report on Form 11-K.
We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
June 24, 1994<PAGE>
PAGE 1 EXHIBIT (99.5a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company on Form S-8 (File No. 33-3723, No. 33-15397,
and No. 33-21454) of our report dated June 17, 1994 on our audits of the
financial statementy of the United Engineers & Constructors Savings and
Investment Plan as of December 31, 1993 and 1992 and for each of the three
years in the period ended December 31, 1992, which report report is included
in this annual report on Form 11-K
We also consent to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand
COOPERS & Lybrand
Boston, Massachusetts
June 24, 1994
PAGE 1
(EXHIBIT (99.3)
ANNUAL REPORT
-------------
Pursuant to Section 15(d) of the
Securities Act of 1934
For the Fiscal Year Ended
December 31, 1993
-------------
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
(Formerly The Badger Company, Inc. Savings and Investment Plan)
----------------------------------------------------------<PAGE>
PAGE 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We have audited the accompanying statements of net assets available
for plan benefits of the Raytheon Employee Savings and Investment Plan as
of December 31, 1993 and 1992, and the related statements of changes in net
assets available for plan benefits for each of the three years in the
period ended December 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Raytheon Employee Savings and Investment Plan as of
December 31, 1993 and 1992, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1993 in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND
June 17, 1994<PAGE>
PAGE 3
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1993 and 1992
--------
1993 1992
---- ----
Assets:
Investments, at fair value
(Notes B, E, F and G) $2,050,725 $12,380,514
Receivables:
Accrued investment income 9 7,941
Employee deferrals 9,278 19,389
Loans receivable from participants 570,868 320,932
Cash and cash equivalents 3,369 35,890
---------- -----------
Total assets 2,634,249 12,764,666
---------- -----------
Liabilities:
Payable for outstanding purchases - 4,160
Administrative expenses 14,047 19,305
---------- -----------
Total liabilities 14,047 23,465
---------- -----------
Net assets available for plan benefits $2,620,202 $12,741,201
========== ===========
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 4
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
for the years ended December 31, 1993, 1992 and 1991
-------
1993 1992 1991
---- ---- ----
Additions to net assets
attributable to:
Investment income
(Notes B, E and G):
Change in appreciation
(depreciation) of
investments $ 574,501 $ 569,029 $ 419,848
Interest 180,700 395,692 283,186
Dividends 68,660 133,475 91,568
Capital gains distributions 1,937 - -
----------- ----------- ----------
825,798 1,098,196 794,602
Employee deferrals 1,562,048 4,720,729 2,354,475
Transfers in (Note A) 2,395,136 - -
----------- ----------- ----------
Total additions 4,782,982 5,818,925 3,149,077
----------- ----------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals by
participants 220,371 340,476 215,019
Administrative expenses 14,230 22,255 2,765
Transfers out (Note A) 14,669,380 - -
----------- ----------- ----------
Total deductions 14,903,981 362,731 217,784
----------- ----------- ----------
Increase (decrease) in net assets (10,120,999) 5,456,194 2,931,293
Net assets, beginning of year 12,741,201 7,285,007 4,353,714
----------- ----------- ----------
Net assets, end of year $ 2,620,202 $12,741,201 $7,285,007
=========== =========== ==========
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 5
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
-------
A. Description of Plan:
General
The Raytheon Employee Savings and Investment Plan (the "Plan"),
formerly The Badger Company, Inc. Savings and Investment Plan is a
defined contribution plan. Through May 12, 1993, the Plan covered
certain employees of Raytheon Engineers and Constructors, Inc., a
wholly-owned subsidiary of Raytheon Company. On that day, the
accounts of all participants in the plan were transferred to the
Raytheon Savings and Investment Plan. The Plan was inactive until
October 1, 1993. Effective October 1, 1993 and November 1, 1993, the
Plan was amended to cover the employees of the Raytheon Support
Services Company and the Range Systems Engineer Support Company,
respectively, wholly-owned subsidiaries of Raytheon Company (the
"Company"). On those days, the accounts of all these participants
were transferred from the Raytheon Savings and Investment Plan into
the Plan. To participate in the Plan, eligible employees must have
three months of service and may enter the Plan only on the first day
of each month. The purpose of the Plan is to provide participants
with a tax-effective means of meeting both short and long-term
investment objectives. The Plan is intended to be a "qualified cash
or deferred arrangement" under Sections 401(a) and 401(k) of the
Internal Revenue Code (the "Code"). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The total number of participants in the Plan as of December
31, 1993 and 1992 were 138 and 1,042, respectively. Participants by
funds were as follows as of December 31, 1993:
Guaranteed Income Fund 114
Equity Fund 78
Raytheon Common Stock Fund 57
Stock Index Fund 48
Balanced Fund 38
Effective July 31, 1992, the Plan's investments were combined with
the investments of other similar defined contribution plans of
Raytheon Company and Subsidiaries Consolidated into the Raytheon
Company Master Trust for Defined Contribution Plans ("Master Trust").
The trustee of the Master Trust maintains a separate account
reflecting the equitable share in the Trust of each plan.
Contributions and Deferrals
Eligible employees are allowed to defer to the Plan up to 15% of
their salaries. There were no employer contributions during the<PAGE>
PAGE 6
year. As of December 31, 1993 the annual employee deferral cannot
exceed $8,994. Effective August 1, 1991, rollover contributions from
other qualified plans were accepted by the Plan. Participants may
invest their deferrals in increments of 10% in any combination of
five funds: (a) a Guaranteed Income Fund under which assets are
invested primarily in contracts providing for fixed rates of interest
for specified periods of time, (b) an Equity Fund which invests in
shares of a mutual fund which consists primarily of income-producing
equity securities, (c) a Raytheon Common Stock Fund which invests in
shares of Raytheon Company Common Stock, (d), a Stock Index Fund
which invests in a commingled pool consisting primarily of equity
securities and is designed to track the S&P 500 Index, and (e) a
Balanced Fund which invests in shares of a mutual fund which consists
primarily of equity securities, bonds and money market instruments.
Dividends and distributions from investments of the Raytheon Common
Stock Fund, the Equity Fund and the Balanced Fund are reinvested in
their respective funds; stock dividends, stock splits and similar
changes are also reflected in the funds.
Participant Accounts
Each participant's account is credited with the participant's
deferral and an allocation of Plan earnings. Plan earnings are
allocated based on account balances by fund.
Vesting
Participants are immediately vested in their voluntary deferrals plus
actual earnings thereon.
Benefits and Withdrawals
A participant may withdraw all or part of deferrals and related
earnings upon attainment of age 59 1/2. For reasons of financial
hardship, as defined in the Plan document, a participant may withdraw
all or part of deferrals. On termination of employment, a
participant will receive a lump-sum distribution unless the vested
account is valued in excess of $3,500 and the participant elects to
defer distribution. A retiree or a beneficiary of a deceased
participant may defer the distribution to January of the following
year.
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum
amount of a loan is the lesser of one-half (1/2) of the participant's
account balance or $50,000. The minimum loan which may be granted is
$500. The interest rate applied is equal to the prime rate published
in the WALL STREET JOURNAL on the first business day in June and
December of each year. Loans must be repaid over a period of up to
five years by means of payroll deductions. In certain cases, the<PAGE>
PAGE 7
repayment period may be extended up to 15 years. Interest paid to
the Plan on loans to participants is credited to the borrower's
account in the investment fund to which repayments are made.
Administrative expenses
Substantially all expenses of administering the Plan are paid by the
Plan.
B. Summary of Significant Accounting Policies:
The Plan's guaranteed income contracts are valued at cost, defined as
net employee deferrals plus interest earned at contracted rates,
which approximates fair value. Investments in mutual funds and the
commingled pool are valued at the closing net asset value reported on
the last business day of the year. Investments in securities (common
stocks) traded on a national securities exchange are valued at the
last reported sales price on the last business day of the year. Cash
equivalents are short-term money market instruments and are valued at
cost which approximates fair value.
Security transactions are recorded on trade date. Except for its
guaranteed income contracts (Note E), the Plan's investments are held
by bank-administered trust funds. Payables for outstanding security
transactions represent trades which have occurred but have not yet
settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Dividend income is recorded on the ex-dividend date. Income from
other investments is recorded as earned on an accrual basis.
C. Federal Income Tax Status:
The Plan is a "qualified cash or deferred arrangement" within the
meaning of Section 401(k) of the Code. The Company has received a
favorable determination letter from the Internal Revenue Service
which states that the Plan is qualified under Sections 401(a) and
401(k) of the Code. The Plan obtained its latest determination
letter in 1989, in which the Internal Revenue Service stated that the
Plan, as then designated, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been amended
since receiving the determination letter. However, the plan
administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
D. Plan Termination:<PAGE>
PAGE 8
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants are 100% vested in their accounts.
E. Guaranteed Income Contracts (GICs):
The Plan holds three collateralized fixed income investment
portfolios (with no expiration date), two of which are managed by
insurance companies and one of which is managed by an investment
management firm. The credited interest rates will be adjusted
semiannually to reflect the experienced and anticipated yields to be
earned on such investments, based on their book value. The annual
rates were 5.80%, 6.34% and 6.28% and the effective annual rates were
5.97%, 6.55% and 6.48%, respectively, at December 31, 1993. The
values of the portfolios managed by Metropolitan Life Insurance
Company, The Prudential Asset Management Company and Banker's Trust
were $445,527, $307,519 and $515,417, respectively, at December 31,
1993. The values of GICs held with Metropolitan Life Insurance
Company and Loomis, Sayles & Company were $1,542,769 and $4,912,478,
respectively, at December 31, 1992.
F. Related Party Transactions:
In accordance with the provisions of the Plan, State Street Bank and
Trust Company (the "Trustee") acted as the Plan's agent for purchases
and sales of shares of Raytheon Company Common Stock until July 31,
1992. Effective, July 31, 1992, Fidelity Management Trust Co. (the
"Trustee") acts as the Plan's agent for purchases and sales of
Raytheon Company Common Stock. For the years ended December 31,
1993, 1992 and 1991, purchases of Raytheon Company Common Stock
amounted to $119,832, $472,884, and $212,293, respectively. Sales of
Raytheon Company Common Stock amounted to $27,516, $5,293 and
$147,620 in 1993, 1992 and 1991, respectively.<PAGE>
PAGE 9
G. Fund Data:
<TABLE>
The following is a summary of net assets available for plan benefits by fund as of December 31:
<CAPTION>
1993
--------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Guaranteed Income Contracts $1,268,463 $1,268,463
Fidelity Equity Income Fund
(12,184 shares) - $412,320 412,320
Raytheon Company Common Stock
(2,316 shares) - - $152,827 152,827
BT Pyramid Equity Index Fund
(165 shares) - - - $163,101 163,101
Fidelity Balanced Fund
(4,034 shares) - - - - $54,014 54,014
---------- -------- -------- -------- ------- ----------
Total investments 1,268,463 412,320 152,827 163,101 54,014 2,050,725
Receivables:
Accrued investment income - - 4 5 - 9
Employee deferrals 3,047 2,726 907 1,105 1,493 9,278
Loans receivable from
participants - - - - - $570,868 570,868
Cash and cash equivalents - - 1,853 1,516 - - 3,369
---------- -------- -------- -------- ------- -------- ----------
Total assets 1,271,510 415,046 155,591 165,727 55,507 570,868 2,634,249<PAGE>
P
Liabilities:
Administrative expenses 8,692 2,822 1,037 1,118 378 - 14,047
---------- -------- -------- -------- ------- -------- ----------
Total liabilities 8,692 2,822 1,037 1,118 378 - 14,047
---------- -------- -------- -------- ------- -------- ----------
Net assets available for plan
benefits $1,262,818 $412,224 $154,554 $164,609 $55,129 $570,868 $2,620,202
========== ======== ======== ======== ======= ======== ==========
G. Fund Data, continued:
The following is a summary of net assets available for plan benefits by fund as of December 31:
1992
---------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Guaranteed Income Contracts $6,455,247 $ 6,455,247
Fidelity Equity Income Fund
(116,224 shares) - $3,371,666 3,371,666
Raytheon Company Common Stock
(22,534 shares) - - $1,154,852 1,154,852
BT Pyramid Equity Index Fund
(1,559 shares) - - - $1,398,749 1,398,749
---------- ---------- ---------- ---------- -----------
Total investments 6,455,247 3,371,666 1,154,852 1,398,749 12,380,514
Receivables:
Accrued investment income - - 7,884 57 7,941
Employee deferrals 8,278 2,970 1,925 6,216 19,389
Loans receivable from participants - - - - $320,932 320,932<PAGE>
PAGE 11
Cash and cash equivalents - - 15,923 19,967 - 35,890
---------- ---------- ---------- ---------- -------- -----------
Total assets 6,463,525 3,374,636 1,180,584 1,424,989 320,932 12,764,666
---------- ---------- ---------- ---------- -------- -----------
Liabilities:
Payable for outstanding purchases - - 4,160 - - 4,160
Administrative expenses 10,058 5,296 1,785 2,166 - 19,305
---------- ---------- ---------- ---------- -------- -----------
Total liabilities 10,058 5,296 5,945 2,166 - 23,465
---------- ---------- ---------- ---------- -------- -----------
Net assets available for plan
benefits $6,453,467 $3,369,340 $1,174,639 $1,422,823 $320,932 $12,741,201
========== ========== ========== ========== ======== ===========
G. Fund Data, continued:
The following is a summary of changes in net assets available for plan benefits by fund for the year ended
December 31:
1993
--------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 327,371 $ 146,707 $ 66,946 $ 33,424 $ 574,501
Interest $ 180,677 - 23 53 - 180,700
Dividends - 37,057 27,111 - 4,492 68,660
Capital gains distributions - 1,413 - - 524 1,937
---------- ---------- ---------- ---------- -------- -----------
180,677 365,841 173,841 66,999 38,440 825,798<PAGE>
Employee deferrals 700,632 460,542 105,678 242,676 52,520 1,562,048
Transfers in 1,244,727 392,045 130,208 156,134 43,348 $428,674 2,395,136
---------- ---------- ---------- ---------- -------- -------- -----------
1,945,359 852,587 235,886 398,810 95,868 428,674 3,957,184
---------- ---------- ---------- ---------- -------- -------- -----------
Total additions 2,126,036 1,218,428 409,727 465,809 134,308 428,674 4,782,982
---------- ---------- ---------- ---------- -------- -------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 145,078 40,595 17,728 16,240 730 - 220,371
Administrative expenses 8,814 2,853 1,052 1,130 381 - 14,230
Transfers out 6,712,769 4,260,265 1,313,252 1,617,788 397,849 367,457 14,669,380
---------- ---------- ---------- ---------- -------- -------- -----------
Total deductions 6,866,661 4,303,713 1,332,032 1,635,158 398,960 367,457 14,903,981
---------- ---------- ---------- ---------- -------- -------- -----------
Interfund transfers (360,743) 208,560 (84,561) (72,040) 308,784 - -
Loans to participants (214,685) (141,953) (37,483) (47,436) (678) 442,235 -
Repayment of loan principal 125,404 61,562 24,264 30,611 11,675 (253,516) -
---------- ---------- ---------- ---------- -------- -------- -----------
Increase (decrease)
in net assets (5,190,649) (2,957,116) (1,020,085) (1,258,214) 55,129 249,936 (10,120,999)
Net assets, beginning of year 6,453,467 3,369,340 1,174,639 1,422,823 - 320,932 12,741,201
---------- ---------- ---------- ---------- -------- -------- -----------
Net assets, end of year $1,262,818 $ 412,224 $ 154,554 $ 164,609 $ 55,129 $570,868 $ 2,620,202
========== ========== ========== ========== ======== ======== ===========
G. Fund Data, continued:
The following is a summary of changes in net assets available for plan benefits by fund for the year ended
December 31:
1992
-------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:<PAGE>
PAGE 13 Investment income: Change in appreciation
(depreciation) of
investments $ 272,416 $ 198,244 $ 98,369 $ 569,029
Interest $ 395,024 54 365 249 395,692
Dividends - 106,862 26,613 - 133,475
---------- ---------- ---------- ---------- -----------
395,024 379,332 225,222 98,618 1,098,196
---------- ---------- ---------- ---------- -----------
Employee deferrals 2,426,749 1,119,275 373,621 801,084 4,720,729
---------- ---------- ---------- ---------- -----------
Total additions 2,821,773 1,498,607 598,843 899,702 5,818,925
---------- ---------- ---------- ---------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 214,015 85,937 24,871 15,653 340,476
Administrative expenses 11,606 6,053 2,253 2,343 22,255
---------- ---------- ---------- ---------- -----------
Total deductions 225,621 91,990 27,124 17,996 362,731
---------- ---------- ---------- ---------- -----------
Interfund transfers (260,392) 129,701 (90,118) 220,809 -
Loans to participants (189,221) (74,432) (20,587) (33,243) $317,483 -
Repayment of loan principal 40,057 26,580 5,565 14,641 (86,843) -
---------- ---------- ---------- ---------- -------- -----------
Increase in net assets 2,186,596 1,488,466 466,579 1,083,913 230,640 5,456,194
Net assets, beginning of year 4,266,871 1,880,874 708,060 338,910 90,292 7,285,007
---------- ---------- ---------- ---------- -------- -----------
Net assets, end of year $6,453,467 $3,369,340 $1,174,639 $1,422,823 $320,932 $12,741,201
========== ========== ========== ========== ======== ===========<PAGE>
PAGE 14 G.
The following is a summary of changes in net assets available for plan benefits by fund for the year ended
December 31:
1991
------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 283,032 $ 95,716 $ 41,100 $ 419,848
Interest $ 282,797 30 324 35 283,186
Dividends - 72,934 18,634 - 91,568
---------- ---------- -------- -------- ----------
282,797 355,996 114,674 41,135 794,602
---------- ---------- -------- -------- ----------
Employee deferrals 1,446,763 541,378 205,930 160,404 2,354,475
---------- ---------- -------- -------- ----------
Total additions 1,729,560 897,374 320,604 201,539 3,149,077
---------- ---------- -------- -------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 144,165 39,321 28,877 2,656 215,019
Administrative expenses 1,570 673 477 45 2,765
---------- ---------- -------- -------- ----------
Total deductions 145,735 39,994 29,354 2,701 217,784
---------- ---------- -------- -------- ----------
Interfund transfers 44,461 (105,252) (79,155) 139,946 -
Loans to participants (52,653) (23,906) (8,767) (1,222) $86,548 -
Repayment of loan principal 32,127 11,486 3,120 1,348 (48,081) -
---------- ---------- -------- -------- ------- ----------
Increase in net assets 1,607,760 739,708 206,448 338,910 38,467 2,931,293
Net assets, beginning of year 2,659,111 1,141,166 501,612 - 51,825 4,353,714
---------- ---------- -------- -------- ------- ----------
Net assets, end of year $4,266,871 $1,880,874 $708,060 $338,910 $90,292 $7,285,007
========== ========== ======== ======== ======= ==========<PAGE>
PAGE 15
PAGE 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Raytheon Employee Savings and Investment Plan (formerly The Badger
Company, Inc. Savings and Investment Plan) has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
BY /s/ Frank D. Umanzio
Frank D. Umanzio
Vice President - Human Resources
DATE June 30, 1994<PAGE>
</TABLE>
PAGE 1
EXHIBIT (99.3a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company on Form S-8 (File No. 33-15242, and No.
33-23751) of our report dated June 17, 1994 on our audits of the financial
statements of the Raytheon Subsidiary Savings and Investment Plan as of
December 31, 1993 and 1992 and for each of the three years in the period
ended December 31, 1993, which report is included in this annual report on
Form 11-K.
We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
June 24, 1994<PAGE>
PAGE 1
EXHIBIT 99.3b
RAYTHEON EMPLOYEE
SAVINGS AND INVESTMENT PLAN
Provisions in Effect as of June 1, 1994
ARTICLE I - ADOPTION AND PURPOSE
The Badger Savings and Investment Plan was established effective July
1, 1987, for the purpose of providing employees with a tax-effective means
of allocating a portion of their salary to be invested in one or more
investment opportunities specified in the Plan as determined by the
employee and set aside for short-term and long-term needs of the employee.
The Plan was applicable only to eligible employees of The Badger Company,
Inc. from July 1, 1987, to May 12, 1993. On May 12, 1993, the Accounts of
all Participants were transferred to the Raytheon Savings and Investment
Plan. Thereafter, the Plan is applicable to employees of Raytheon Company
and its subsidiaries who are employed in units designated by the Subsidiary
or the Company as a Covered Unit and, in the case of Subsidiary units,
approved by an authorized officer of the Company for participation in the
Plan.
It is intended that the Plan will comply with all of the requirements
for a qualified defined contribution plan under Sections 401(a) and 401(k)
of the Internal Revenue Code and will be amended from time to time to
maintain compliance with these requirements. The terms used in the Plan
have the meanings specified in Article XIV unless the context indicates
otherwise.
ARTICLE II - ELIGIBILITY
2.1. Eligibility Requirements - Present Employees -- Each Eligible
Employee of the Company or a Subsidiary who was in a Period of Service in a
Covered Unit as of the date specified in Appendix A were eligible to join
the Plan as of said date or any subsequent Entry Date selected by the
Eligible Employee provided he or she continues in the same Period of
Service or meets the requirements under Section 2.2.
2.2. Eligibility Requirements - Other Employees -- Each other
Eligible Employee may join the Plan as of the first Entry Date coincident
with or next following completion of a Period of Service of three (3)
consecutive months commencing on the Employee's Commencement Date or
Reemployment Commencement date, whichever is applicable.
2.3. Procedure for Joining the Plan -- Each Eligible Employee who
meets the requirements of Section 2.1 or Section 2.2 may join the Plan as
of any Entry Date by communicating with Fidelity in accordance with
instructions in an enrollment kit which will be made available to each
Eligible Employee. An enrollment in the Plan shall not be deemed to have
been completed until the Employee has designated: a percentage by which<PAGE>
PAGE 2
Participants' Eligible Compensation shall be reduced as an Elective
Deferral in accordance with the requirements of Section 3.3(b) subject to
the non-discrimination test described in Section 3.3(a); election of
investment funds as described in Article IV; one or more Beneficiaries; and
such other information as specified by Fidelity. The Administrator in its
discretion may from time to time make exceptions and adjustments in the
foregoing procedure on a uniform and nondiscriminatory basis.
2.4. Transfer to Position Not Covered by Plan -- If a Participant is
transferred to another position with the Employer in which the Participant
is no longer an Eligible Employee, the Participant will remain a
Participant of the Plan with respect to Elective Deferrals previously made
but will no longer be eligible to have Elective Deferrals made to the Plan
on his or her behalf until he or she again becomes an Eligible Employee.
In the event the Participant is subsequently transferred to a position in
which he or she again becomes an Eligible Employee, the Participant may
renew Elective Deferrals as of any Entry Date by communicating with
Fidelity and providing all of the information requested by Fidelity.
2.5. Break in Service Rules
(a) Periods of Service -- In determining the length of a
Period of Service, the Administrator shall include all Periods of Service,
except a Period of Service prior to a Period of Severance of twelve (12)
months or more, unless subsequent to said Period of Severance the
Participant completes a Period of Service of at least twelve (12) months.
(b) Periods of Severance -- In determining the length of a
Period of Service, the Administrator shall exclude all Periods of
Severance, except that in the event a Participant returns from a quit,
discharge, or Retirement, within twelve (12) months from the earlier of
(i) the date of the quit, discharge, or Retirement, or
(ii) if the Participant was absent from employment for reasons
such as layoff or Authorized Leave of Absence on the day of the quit,
discharge, or Retirement, the first day of such absence, the period
of absence will be included as a Period of Service.
(c) Other Periods -- In making the determinations described in
subsections (a) and (b) of this Section 2.5, the second, third, and fourth
consecutive years of a Layoff (from the first anniversary of the last day
paid to the fourth anniversary of the last day paid) and any period in
excess of one (1) year of an Authorized Leave of Absence shall be regarded
as neither a Period of Service nor a Period of Severance.
ARTICLE III - CONTRIBUTIONS
3.1. Elective Deferrals -- Elective Deferrals must be made in one
percent (1%) increments with a minimum Elective Deferral of one percent
(1%) of Eligible Compensation and a maximum Elective Deferral of fifteen
percent (15%), but no Participant may defer more than $7,000 for any Plan<PAGE>
PAGE 3
Year, except as such amount is adjusted for changes in the cost of living
as provided in Section 402(g)(5) of the Internal Revenue Code.
3.2. Excess Deferrals
(a) Distribution of Excess Deferrals. Notwithstanding any other
provision of the Plan, Excess Deferrals and income allocable thereto shall
be distributed no later than each April 15 to Participants following the
end of the Plan Year during which such Excess Deferral occurred. A
distribution pursuant to this Section 3.2(a) of Excess Deferrals and
income, gains, and losses allocable thereto shall be made without regard to
any consent otherwise required under any other provision of the Plan. A
distribution pursuant to this Section 3.2(a) of Excess Deferrals and
income, gains and losses allocable thereto shall not be treated as a
distribution for purposes of determining whether the distribution required
by Section 6.4(d) is satisfied. Any distribution under this Section 3.2(a)
of less than all the Excess Deferrals and income, gains, and losses
allocable thereto shall be treated as a pro rata distribution of the Excess
Deferrals and income, gains, and losses allocable thereto. In no case may
an Employee receive from the Plan as a corrective distribution for a
taxable year under this Section 3.1(a) an amount in excess of the
individual's total Elective Contributions under the Plan for the taxable
year.
(b) Income, Gains and Losses Allocable to Excess Deferrals
(i) Adjustments. The Excess Deferrals distributed to a
Participant with respect to a calendar year shall be
adjusted for income, gains, and losses. The income,
gains and losses allocable to the Excess Deferrals are
equal to the sum of the allocable gain or loss for the
taxable year of the individual as described in Section
3.2(b)(ii) below and the allocable gain or loss for the
period between the end of the taxable year and the date
of distribution as described in Section 3.2(b)(iii)
below. Notwithstanding the foregoing, income allocable
to Excess Deferrals may be calculated by any other method
permitted by Treas. Reg. Section 1.402(g)-1(e)(5).
(ii) Calculation of Gain or Loss For Tax Year. The gain or
loss allocable to the Excess Deferrals for the taxable
year of the individual is determined by multiplying the
income for the taxable year of the individual is
determined by multiplying the income for the taxable year
of the individual allocable to his or her Elective
Deferrals by a fraction. The numerator of the fraction
is the Excess Deferral made by the Employee for the
taxable year. The denominator of the fraction is the
total Elective Deferral Account of the Employee as of the
end of the taxable year, reduced by the gain allocable to
such total amount for the taxable year and increased by
the loss allocable to such total amount for the taxable<PAGE>
PAGE 4
year.
(iii) Calculation of Gain or Loss for Gap Period. The gain or
loss allocable to the Excess Deferrals for the period
between the end of the taxable year and the date of
distribution is equal to ten percent (10%) of the income
allocable to the Excess Deferrals for the taxable year
(as calculated under Subsection (b)(ii) above) multiplied
by the number of calendar months that have elapsed since
the end of the taxable year. For purposes of determining
the number of calendar months that have elapsed, a
distribution occurring on or before the fifteenth (15th)
day of the month will be treated as having been made on
the last day of the preceding month, and a distribution
occurring after such fifteenth (15th) day will be treated
as having been made on the first (1st) day of the next
month.
(c) Coordination of Excess Deferrals with Distribution of Excess
Contributions.
The Excess Deferrals which may be distributed under Section 3.2(a)
with respect to an Employee for a taxable year shall be reduced by any
Excess Contributions previously distributed with respect to such Employee
for the Plan Year beginning with or within such taxable year. In the event
of a reduction under this Section 3.2(c), the amount of Excess
Contributions included in the gross income of the Employee and reported by
the Employer as a distribution of Excess Contributions shall be reduced by
the amount of the reduction under this Section 3.2(c).
3.3 Actual Deferral Percentage Limitation - Excess Contributions.
(a) Limitation. The Plan Administrator shall periodically
review the Elective Deferrals made by Participants during the Plan
Year and ensure that one of the following tests is met for each Plan
Year as required by Code Section 401(k):
(i) Alternative 1. The actual deferral percentage of the
Elective Deferrals of the Highly Compensated Employees
who are Eligible Employees is not more than 1.25 times
the actual deferral percentage of the Elective Deferrals
for all other Eligible Employees; or
(ii) Alternative 2. The actual deferral percentage of the
Elective Deferrals for the Highly Compensated Employees
who are Eligible Employees is not more than 2.0 times the
actual deferral percentage of the Elective Deferrals for
all other Eligible Employees and the actual deferral
percentage of the Elective Deferrals for the Highly
Compensated Employees who are Eligible Employees does not
exceed the actual deferral percentage of the Elective
Deferrals for all other Eligible Employees by more than<PAGE>
PAGE 5
two (2) percentage points.
To the extent that the Elective Deferrals of Highly Compensated
Employees who are Eligible Employees for the Plan Year exceed
the maximum Elective Deferrals permitted under the foregoing
limitations, the Plan has "Excess Contributions" which must be
corrected as provided below.
(b) Reduction in Elective Deferrals. The Administrator shall
have the responsibility of determining on a continuing basis the
extent, if any, to which these nondiscrimination tests may not be
passed. If in the unlimited discretion of the Administrator it is
determined that a reduction of the Elective Deferrals by such Highly
Compensated Employees will be required in order to comply with the
nondiscrimination tests, Elective Deferrals with respect to the
Highly Compensated Employees may be reduced in one percent (1%)
increments, commencing with Elective Deferrals of fifteen percent
(15%). If reduction of such Elective Deferrals from 15% to 14% is
insufficient to satisfy the requirements of the nondiscrimination
tests, the Elective Deferrals of all Highly Compensated Employees
which are 14% will be reduced to 13%. Subsequent reductions of one
percent (1%) will be made in the Elective Deferrals of all Highly
Compensated Employees at each successive percentage level until it is
determined by the Administrator, in its discretion, that the Plan
will satisfy the requirements of the nondiscrimination tests. Each
reduction at that level will apply to all Highly Compensated
Employees at that level regardless of whether their Elective Deferral
percentage has been reduced from higher levels. If any Highly
Compensated Employee is a participant under two or more cash or
deferred arrangements of the Employer, for purposes of determining
the Elective Deferral percentage with respect to such Employee, all
such cash or deferred arrangements shall be treated as one cash or
deferred arrangement.
(c) Correction of Excess Contributions. The Plan
Administrator may cause Excess Contributions and income allocable
thereto to be distributed to the Participants on whose behalf such
Excess Contributions were made for the preceding Plan Year. The Plan
Administrator shall distribute the Excess Contributions no later than
two and one-half (2 1/2) months following the end of any Plan Year.
The actual deferral ratio (See Code Section 401(k)(3)(B)) of the
Highly Compensated Employee with the highest actual deferral ratio
will be reduced to the extent required to equal the lesser of:
(i) The amount which enables the Plan to satisfy the actual
deferral percentage maximum determined under Section
3.3(a); or
(ii) The amount which causes such Highly Compensated
Employee's actual deferral ratio to equal the ratio of
the Highly Compensated Employee with the next highest
actual deferral ratio.<PAGE>
PAGE 6
The reduction process will be repeated until the Plan satisfies
the actual deferral percentage limit of Section 3.3(a). For
each Highly Compensated Employee, the amount of Excess
Contributions is equal to the Employee's Elective Deferral
(determined before application of this subsection) minus the
amount determined by multiplying the Employee's actual deferral
ratio (determined after application of this subsection) by his
or her Eligible Compensation used in determining such
percentage. In no case shall the amount of Excess
Contributions for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Elective Deferrals
made on behalf of such Highly Compensated Employee for the Plan
Year.
(d) General Rules. In applying the tests under this Section
3.3, the Administrator shall be governed by the following rules:
(i) Plan Aggregation. Two or more cash or deferred
arrangements may be considered as a single plan for
purposes of determining whether or not such plans satisfy
Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such
plans and the plans including such arrangements shall be
treated as one arrangement and as one plan for purposes
of this Section 3.3 and Code Sections 401(a)(4), 410(b)
and 401(k). If the Employer maintains two or more plans
that are treated as a single plan for purposes of Code
Sections 401(a)(4) or 410(b) (other than Code Section
410(b((2)(A)(ii)), all cash or deferred arrangements
included in such plans, employee contributions, and
matching contributions shall be treated as a single
arrangement for purposes of Code Sections 401(a)(4),
410(b) and 401(k).
(ii) Highly Compensated Participants Eligible Under More Than
One Arrangement. The actual deferral ratio of
Participants who are Highly Compensated Employees is
calculated by treating all of the cash or deferral
arrangements for which such employees are eligible as one
cash or deferred arrangement pursuant to Treas. Reg.
Section 1.401(k)-1(g)(8).
(iii) Family Aggregation Rules. The family aggregation rules
set forth in Code Section 414(q)(6) shall apply in
calculating the average deferral ratio of Highly
Compensated Employees. Under these rules, the family
group shall be treated as one Highly Compensated Employee
and the actual deferral ratio for the family group shall
be the greater of:
a. The ratio determined by combining the Eligible
Compensation and Elective Deferrals of all eligible<PAGE>
PAGE 7
family members who are highly compensated without
regard to family aggregation; and
b. The ratio determined by combining the Eligible
Compensation and Elective Deferrals Contributions
of all eligible family members.
In all respects, the determination and correction of
Excess Contributions of a Highly Compensated Employee and
his or her family members shall be calculated in
accordance with Treas. Reg. Section 1.401(k)-1(f)(5)(ii)
and 1.401(k)-1(g)(1)(ii)(C).
(e) Distributions. A distribution of Excess Contributions
and income, gains, and losses allocable thereto shall be made without
regard to any consent otherwise required under any other provision of
the Plan. A distribution pursuant to Section 3.3 of Excess
Contributions and income, gains and losses allocable to Excess
Contributions shall not be treated as a distribution for purposes of
determining whether the distribution required by Section 6.4(d) is
satisfied. Any distribution under Section 3.3 of less than all
Excess Contributions and income, gains, and losses allocable to
Excess Contributions shall be treated as a pro rata distribution of
Excess Contributions and income, gains, and losses allocable thereto.
In no case shall excess Contributions for a Plan Year remain
unallocated or be allocated to any suspense account for allocation to
one or more employees to any future Plan Year.
(f) Income, Gains and Losses Allocable to Excess Contributions
(i) Adjustments. The Excess Contributions distributed
to a Participant with respect to a Plan Year shall
be adjusted for income, gains, and losses. The
income, gains, and losses allocable to Excess
Contributions for purposes of this Section 3.3(f)
are equal to the sum of the allocable gain or loss
for the Plan Year described in Subsection (f)(ii)
below, and the allocable gain or loss for the
period between the end of the Plan Year and the
date of distribution described in Subsection
(f)(iii) below. Notwithstanding the foregoing,
income allocable to Excess Contributions may be
calculated pursuant to any other method permitted
by Treas. Reg. Section 1.401(k)-1(f)(4).
(ii) Calculation of Gain or Loss Allocable to Excess
Contributions. The gain or loss allocable to
Excess Contributions for the Plan Year is
determined by multiplying the income for the Plan
Year allocable to Elective Deferrals by a fraction.
The numerator of the fraction is the Excess
Contribution by the Employee for the Plan Year. <PAGE>
PAGE 8
The denominator of the fraction is the total
Account balance of the Employee attributable to
Elective Deferrals as of the end of the Plan Year,
reduced by the gain allocable to such total amount
for the Plan Year and increased by the loss
allocable to such total amount for the Plan Year.
(iii) Calculation of Allocable Gain or Loss for Gap
Period. The gain or loss allocable to Excess
Contributions for the period between the end of the
Plan Year and the distribution date is equal to 10
percent of the income allocable to Excess
Contributions for the plan Year (as calculated
under Subsection 3.3(f)(I) above) multiplied b the
number of calendar months that have elapsed since
the end of the Plan Year. For purposes of
determining the number of calendar months that have
elapsed, a distribution occurring on or before the
fifteenth (15th) day of the month will be treated
as having been made on the last day of the
preceding month, and a distribution occurring after
such fifteenth (15th) day will be treated as having
been made on the first day of the next month.
(g) Coordination of Excess Contributions With Distribution of
Excess Deferrals.
(i) The amount of Excess Contributions to be determined
under Section 3.3(c) with respect to a Highly
Compensated Employee for a Plan Year shall be
reduced by any Excess Deferral amount previously
distributed in accordance with Section 3.2(c) to
such Participant for the Participant's taxable year
end with or within such Plan Year.
(ii) The Excess Deferrals that may be distributed under
Section 3.2(c) with respect to an Employee for a
taxable year shall be reduced by any Excess
Contributions previously distributed with respect
to such Employee for the Plan Year beginning with
or within such taxable year. In the event of a
reduction under this Section 3.3(g)(ii), the amount
of Excess Contributions included in the gross
income of the Employee and the amount of Excess
Contributions reported by the Employer as
includable in the gross income of the Employee
shall be reduced by the amount of the reduction
under this Section 3.3(g)(ii).
3.4. Reinstatement of Reduced Amounts -- Any reduction effected
pursuant to Section 3.3(b) will remain in effect for the remainder of the
Plan Year in which the reduction occurs. A Participant whose Elective<PAGE>
PAGE 9
Deferral has been reduced may elect, subject to the approval of the
Administrator, to increase his or her Elective Deferral effective as of the
Entry Date in January of the next Plan Year. This election must be made in
accordance with the procedure described in Section 3.5. The reduction
described in Section 3.3(b) will not be automatically reinstated.
3.5. Change in Elective Deferrals -- Except as provided in Section
3.3, any Participant may change his or her Elective Deferral percentage by
notifying Fidelity, such changes to take effect as of the next designated
Entry Date in accordance with the Administrator's rules then in effect.
3.6. Voluntary Reduction of Elective Deferral to Zero --Any
Participant may elect to reduce the level of the Participant's Elective
Deferral to zero as of the beginning of any pay period. The reduction will
take effect as soon as practicable following telephone notification by the
Participant to Fidelity. A Participant who has reduced his or her Elective
Deferral to zero may again make Elective Deferrals as of any Entry Date in
accordance with the Administrator's rules then in effect, by telephone
notification to Fidelity.
3.7. Rollover Contributions -- Participants may transfer into the
Plan qualifying rollover amounts (as defined in Section 402 of the Code)
received from other qualified plans subject to Section 401(k) or Section
401(m) of the Code; annuity accounts under Section 403(b) of the Code;
qualified defined contribution pension or profit sharing plans, provided
that no federal income tax has been required to have been paid previously
on such amounts; or rollover contributions from an individual retirement
account described in Section 408(d)(3)(A)(ii) of the Code (referred to
herein as a "conduit IRA"). Such transfers will be referred to as
"rollover contributions" and will be subject to the following conditions:
(i) the transferred funds are received by the Trustee no later than
sixty (60) days from receipt by the Employee of a distribution
from another qualified Section 401(k) or Section 401 (m) plan
or, in the event that the funds are transferred from a conduit
IRA, no later than sixty (60) days from the date that the
Participant receives such funds from the individual retirement
account, subject, however, to (v) below where applicable;
(ii) the amount of such rollover contributions shall not exceed the
limitations set forth in Section 402 of the Code;
(iii) rollover contributions shall be taken into account by the
Administrator in determining the Participant's eligibility for
a loan pursuant to Article VII;
(iv) rollover contributions may be distributed at the request of the
Participant, subject to the same administrative procedures as
apply to other distributions;
(v) rollover contributions may not be received by the Trustee
earlier than the Entry Date upon which the Participant elects<PAGE>
PAGE 10
to join the Plan;
(vi) rollover contributions transferred pursuant to this Section 3.7
shall be credited to the Participant's Rollover Contribution
Account. Rollover contributions will be invested upon receipt
by the Trustee;
(vii) no rollover contribution will be accepted unless (A) the
Employee on whose behalf the rollover contribution will be made
is either a Participant or has notified the Administrator that
he intends to become a Participant on the first date on which
he is eligible therefor; and (B) all required information,
including selection of specific investment accounts, is
provided to Fidelity. When the rollover contribution has been
deposited, any further change in investment allocation of
future deferrals or transfer of account balances between
investment funds will be effected through the procedures set
forth in Sections 4.2 and 4.3.
(viii) under no circumstances shall the Administrator accept as
rollover contributions amounts which have previously been
subject to federal income tax.
ARTICLE IV - INVESTMENT OF ACCOUNTS
4.1. Election of Investment Options -- Upon enrollment in the Plan,
each Participant shall direct that the funds in the Participant's Account
be invested in increments of ten percent (10%) in one or more of the
following investment options:
Fund A - an equity fund designated by the Administrator;
Fund B - a fixed income fund designated by the Administrator;
Fund C - Raytheon Company common stock fund;
Fund D - a stock index fund designated by the Administrator,
Fund E - a balanced fund designated by the Administrator.
In its discretion, the Administrator may from time to time designate
new funds and, where appropriate, preclude investment in existing funds and
provide for the transfer of Accounts invested in those funds to other funds
selected by the Participant or, if no such election is made, to Fund B or
similar low risk fixed income fund as determined by the Administrator in
its discretion.
In the event that a Participant fails to designate the investment
option for 100% of the Participant's account or erroneously designates the
investment of more than 100%, the investment designation will be a nullity
and the Enrollment Agreement will be returned to the Eligible Employee. If
the Enrollment Agreement is corrected and returned, enrollment will not be<PAGE>
PAGE 11
effective until the next Entry Date with respect to which the notice
requirements set forth in Section 2.3 are satisfied. Officers covered by
Securities and Exchange Commission Regulation 16b will not be eligible to
elect Fund C, the Raytheon common stock fund, until such election is
approved by the shareholders of Raytheon Company. Any request to invest
in or transfer out of the Raytheon Common Stock Fund by an "executive
officer," as that term is defined in the regulations of the Securities
Exchange Commission (SEC), shall not become effective until six (6) months
subsequent to the date the Administrator is notified of the request.
4.2. Change in Investment Allocation of Future Deferrals -Each
Participant may elect to change the investment allocation of future
Elective Deferrals effective as of the Entry Dates in January, April, July
or October, or such other months as may be specified under the
Administrator's rules then in effect, by providing telephone notice to
Fidelity. Any changes must also be made in ten percent (10%) increments
and must result in a total investment of one hundred percent (100%) of the
Participant's Account.
4.3. Transfer of Account Balances Between Investment Funds -- Each
Participant may elect to transfer all or a portion of the amount in the
Participant's Account between investment funds effective as of the Entry
Dates in January, April, July or October of each year or such other months
as may be designated in the Administrator's rules then in effect. Such
transfers must be made in ten percent (10%) increments of the entire
Account as of the completion of the transfer and must result in investment
of one hundred percent (100%) of the Account. Transfers shall be effected
by telephone notice to Fidelity.
4.4. Ownership Status of Funds -- The Trustee shall be the owner of
record of the assets in the funds specified as Funds A, B, D and E and such
other funds as may be established by the Administrator. The Administrator
shall have records maintained as of the Valuation Date for each fund
allocating a portion of the fund to each Participant who has elected that
his or her Account be invested in such fund. The records shall reflect
each Participant's portion of Funds A, B, D and E in a cash amount and
shall reflect each Participant's portion of Fund C in shares of stock and
cash.
4.5. Voting Rights -- Participants whose Accounts have shares of
participation in the Raytheon Company Common Stock Fund on the last
business day of the second month preceding the record date (the "Voting
Eligibility Date") for any meeting of stockholders have the right to
instruct the Trustee as to voting at such meeting. The number of votes is
determined by dividing the value of the shares in the Participant's Account
in the Raytheon Common Stock Fund by the closing price of Raytheon Common
Stock on the Voting Eligibility Date. If the Trustee has not received
instructions from a Participant as to voting of shares within a specified
time, then the Trustee shall not vote those shares. If a Participant
furnishes the Trustee with a signed vote direction card without indicating
a voting choice thereon, the Trustee shall vote Participant's shares as
recommended by management. In addition, each Participant shall have the<PAGE>
PAGE 12
right to accept or reject any tender or exchange offer for shares of common
stock. The Trustee shall vote (or tender or exchange) all combined
fractional shares of Raytheon Common Stock to the extent possible in the
same proportion as the shares which have been voted (or tendered or
exchanged) by each Participant. Any instructions as to voting (or tender
or exchange) received from an individual Participant shall be held in
confidence by the Trustee and shall not be divulged to the Companies or to
any officer or employee thereof or to any other person.
ARTICLE V - VESTING
5.1. Vesting Status -- Each Participant shall have a Nonforfeitable
right to any amounts in the Participant's Account.
ARTICLE VI - WITHDRAWALS AND DISTRIBUTIONS
6.1. In-Service Withdrawal - Employee Account -- A Participant may
withdraw all or a portion of the Participant's Employee Account upon
attainment of age 59 1/2 or, except for earnings on Elective Deferrals made
on or after January 1, 1989, for reasons of immediate and substantial
financial need as defined in Section 6.2. Withdrawals from the Employee
Accounts of less than $250 will not be permitted. Withdrawals will be
based upon the value of the Account as of the date established by the
Administrator or through the application of a uniform and equitable rule,
and will be effected by telephone notice to Fidelity. Payment of the
amount withdrawn will be made as soon as reasonably practicable after the
effective date of the withdrawal. Withdrawals from Funds A, B, D and E,
and such other funds as may be established by the Administrator, will be
made in cash; withdrawals from Fund C will be made in either cash or stock
(with cash for fractional or unissued shares) as elected by the
Participant. Funds for the withdrawal will be taken on a pro rata basis
against the Participant's investment fund balances in the Participant's
Employee Account.
6.2. Documentation Required For Financial Hardship Withdrawals -- A
Participant requesting a withdrawal of part or all of the Participant's
Employee Account due to reasons of immediate and substantial financial need
will be required to submit such documentation or information in other form
as required by the Administrator and shall advise Fidelity by telephone
notice or such other means as established by the Administrator's rules then
in effect the amount and type of the financial need and shall represent
that the amount of the withdrawal does not exceed the financial need. The
Participant shall also represent that this financial need cannot be
satisfied by any of the following sources: through reimbursement or
compensation by insurance or otherwise; by cessation of Elective Deferrals
under the Plan; or by other distributions or loans from plans maintained by
the Employer or by any other employer, or by borrowing from commercial
sources on reasonable commercial terms. For purposes of Section 6.1,
"immediate and substantial financial need" is limited to financial need
arising from the following specific causes: medical expenses incurred by
the Participant, the Participant's spouse or any dependents of the
Participant; purchase (excluding mortgage payments) of a principal<PAGE>
PAGE 13
residence for the Participant; payment of tuition for the next twelve
months of post-secondary education for the Participant, the Participant's
spouse, or dependents; to prevent the eviction from or foreclosure on
Participant's principal residence; or any other circumstance, as determined
by the Administrator based upon all the relevant facts, establishing
substantial justification for the withdrawal.
6.3. Suspension of Elective Deferrals for Financial Hardship
Withdrawals. If a Participant's application for a hardship withdrawal is
approved and the withdrawal effected, Participant's Elective Deferrals
will be suspended for a period of one year from the date of withdrawal.
Thereafter, Elective Deferrals shall be in the same amount and with the
same investment options as in effect prior to the withdrawal unless notice
by telephone or in writing giving other instructions is received by
Fidelity prior to the expiration of the one-year period from the
withdrawal.
6.4. In-Service Withdrawal - Rollover Contribution Account -- A
Participant may withdraw all or a portion of the Participant's Rollover
Contribution Account. Withdrawals will be based upon the value of the
account as of the date established by the Administrator through the
application of a uniform and equitable rule by telephone notice to
Fidelity. Payment of the amount withdrawn will be made as soon as
reasonably practicable after the effective date of the withdrawal.
Withdrawals from Funds A, B, D and E will be made in cash. Withdrawals
from Fund C will be made in cash or stock (with cash for fractional or
unissued shares) as elected by the Participant.
6.5. Redeposits Prohibited -- No amount withdrawn pursuant to
Sections 6.1, 6.4 or 6.6 may be redeposited in the Plan.
6.6. Distribution --
(a) Distribution of the Participant's Account will be made upon the
Retirement, Disability (as defined in Section 14.11), death,
Severance from Service (as defined in Section 14.38), or Layoff
(as defined in Section 14.23) of the Participant; or, to an
alternate payee, upon issuance of a Qualified Domestic
Relations Order (as defined in Section 414(p) of the Internal
Revenue Code and the Retirement Equity Act). In the event of
the death of a Participant, the distribution shall be made to
the Participant's Beneficiary. The standard form of
distribution will be a lump sum distribution of the entire
amount in the Participant's Account which will be paid as soon
as practicable following notification to Fidelity of the
Retirement, death, Disability or Severance from Service.
Distribution of the amounts in said accounts in the funds
designated Fund A, Fund B, Fund D and Fund E, and such other
funds as may be established by the Administrator, in Section
4.1 will be made in cash. Distribution of any amount in said
accounts in Fund C (Raytheon Company stock) will be made in
either cash or, if elected by the Participant or, in the case<PAGE>
PAGE 14
of death, the Participant's Beneficiary, stock. Retiring
Participants and Beneficiaries of deceased Participants may
elect to defer the entire amount of the lump sum distribution
to January of the year following the date of Retirement or
death. Partial deferrals will not be permitted. If there is no
Beneficiary surviving a deceased Participant at the time
payment of a Participant's Account is to be made, such payment
shall be made in a lump sum to the person or persons in the
first following class of successive Beneficiaries surviving,
any testamentary devise or bequest to the contrary
notwithstanding: the Participant's (i) spouse, (ii) children
and issue of deceased children by right of representation,
(iii) parents, (iv) brothers and sisters and issue of deceased
brothers and sisters by right of representation, or (v)
executors or administrators. If no Beneficiary can be located
during a period of seven (7) years from the date of death, the
amount of the distribution shall revert to the Trust and be
treated in the same manner as a forfeiture under Section 3.8.
(b) In the event that upon a Participant's Severance From Service
Date the Participant's Account exceeds Thirty-Five Hundred
Dollars ($3,500), the Participant shall have the option of not
receiving an immediate distribution of the Account.
Participant's Account will be distributed in its entirety upon
the earlier of Participant's attainment of Normal Retirement
Age or receipt by Fidelity of a request for a final
distribution.
(c) Except as provided by Section 401(a)(9) of the Code as
referenced in this Section, benefits in the Plan will be
distributed to each Participant not later than the sixtieth
(60th) day after the close of the Plan Year in which the latest
of the following events occurs:
(1) attainment by the Participant of Normal Retirement Age;
(2) the tenth (10th) anniversary of the date on which
Participant commenced participation in the Plan; or
(3) Participant's Severance from Service.
If the amount of the benefit payable to a Participant has not
been ascertained by the sixtieth (60th) day after the close of
the Plan Year in which the latest of the three events described
in clauses (1), (2) and (3) above occurred, or Participant
cannot be located after reasonable efforts to do so, then
payment retroactive to said sixtieth (60th) day after the close
of the Plan Year in which the latest of the three events
occurred may be made no later than sixty (60) days after the
later of the earliest date on which the amount of such payment
can be ascertained under the Plan or the earliest date on which
the Participant is located.<PAGE>
PAGE 15
(d) In any event, as required by Section 401(a)(9) of the Code,
distribution of a Participant's benefit will be made no later
than April 1 of the calendar year following the year in which
the Participant attains age 70 1/2.
(e) In the event that the Plan is determined to be a direct or
indirect transferee of either a defined benefit plan or a
defined contribution plan subject to the funding standards of
Section 412 of the Code, the Surviving Spouse of a Participant
who dies with an Account in the Plan shall have the option of
electing a qualified pre-retirement survivor annuity in lieu of
the standard form of distribution.
6.7. Withdrawal/Distribution - Executive Officers -- No withdrawal
by or distribution to an "executive officer, as that term is defined by the
SEC, from an Account in the Raytheon Common Stock Fund will be effective
until the expiration of six (6) months from the date the Administrator
receives the request for the withdrawal or distribution.
ARTICLE VII - LOANS
7.1. Availability of Loans - Participants may borrow against all or
a portion of the balance in the Participant's Account subject to the
limitations set forth in this Article.
7.2. Minimum Amount of Loan - No loan of less than $500 will be
permitted.
7.3. Maximum Amount of Loan - No loan in excess of fifty percent
(50%) of the aggregate value of a Participant's Employee Account and
Rollover Contribution Account balances will be permitted. In addition,
limits imposed by the Internal Revenue Code and any other requirements of
applicable statute or regulation will be applied. Under the current
requirements of the Internal Revenue Code, if the aggregate value of a
Participant's Employee Account and Rollover Contribution Account exceeds
$20,000, the loan cannot exceed the lesser of one-half (1/2) the
Nonforfeitable aggregate value or $50,000 reduced by the excess of (a) the
highest outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which such loan was made over
(b) the outstanding balance of loans from the Plan on the date on which
such loan was made.
7.4. Effective Date of Loans -- Loans will be effective as specified
in the Administrator's rules then in effect.
7.5. Repayment Schedule - The Participant may select a repayment
schedule of 1, 2, 3, 4 or 5 years. If the loan is used to acquire any
dwelling which, within a reasonable time is to be used (determined at the
time the loan is made) as the principal residence of the Participant, the
repayment period may be extended up to 15 years at the election of the
Participant. All repayments will be made through payroll deductions in
accordance with the loan agreement executed at the time the loan is made,
except that, in the event of the sale of all or a portion of the business<PAGE>
PAGE 16
of the Employer or one of the Companies, or other unusual circumstances,
the Administrator, through uniform and equitable rules, may establish for
other means of repayment. The loan agreement will permit repayment of the
entire outstanding balance in one lump sum. The minimum repayment amount
per pay period is $10 for Participants paid weekly and $50 for Participants
paid monthly. The repayment schedule shall provide for substantially level
amortization of the loan. Repayments for Participants in a Period of
Service but on an Authorized Leave of Absence or Layoff shall be made in
accordance with procedures established by the Administrator.
7.6. Limit on Number of Loans -- No more than two loans may be
outstanding at any time.
7.7. Interest Rate -- The interest rate for a loan pursuant to this
Article will be equal to the prime rate published in The Wall Street
Journal on the first business day in June and December of each year. The
rate published on the first business day in June will apply to loans which
are effective on the last day of the months June through November; the rate
published on the first business day of December will apply to loans which
are effective on the last day of the months of December through May.
7.8. Effect Upon Participant's Employee Account -- Upon the granting
of a loan to a Participant by the Administrator, the allocations in the
Participant's Account to the respective investment funds will be reduced on
a pro rata basis and replaced by the loan balance which will be designated
as an asset in the Account. Such reduction shall be effected by reducing
the Participant's Accounts in the following sequence, with no reduction of
the succeeding Accounts until prior Accounts have been exhausted by the
loan: Employee Account and Rollover Contribution Account. Upon repayment
of the principal and interest, the loan balance will be reduced, the
Participant Accounts will be increased in reverse order in which they were
exhausted by the loan, and the loan payments will be allocated to the
respective investment funds in accordance with the investment election then
in effect.
7.9. Effect of Severance From Service and Non-Payment -- In the
event that a loan remains outstanding upon the Retirement, death or
Severance from Service of a Participant, the amount of any unpaid principal
will be deducted from the distribution made to the Participant. If, as a
result of Layoff or Authorized Leave of Absence, a Participant, although
still in a Period of Service, is not being compensated through the
Employer's payroll system, loan payments will be suspended until the
earliest of the first pay date after Participant returns to active
employment, the Participant's Severance from Service Date, or the
expiration of twelve (12) months from the date of the suspension, at which
time the outstanding principal of any unpaid loan will be deducted from the
distribution made to the Participant. In such event the unpaid principal
and interest will be deducted from the Participant's Account and any
remaining balance in said Account will be paid to the Participant if the
Participant incurs a Severance from Service or requests in writing payment
of such balance.<PAGE>
PAGE 17
7.10. Loans - Executive Officers - No loan to an executive officer
from an Account in the Raytheon Common Stock Fund will be effective until
the expiration of six (6) months from the date on which the application for
the loan is received by the Administrator.
ARTICLE VIII - LIMITATIONS OF SECTION 415 OF THE CODE
8.1. Maximum Permissible Amount of a Participant's Annual Addition -
- Notwithstanding any other provision of this Plan, the Maximum Permissible
Amount of a Participant's Annual Addition under this Plan means the lesser
of $30,000 (or beginning January 1, 1986, such larger amount determined by
the Commissioner of the Internal Revenue Service) or twenty-five percent
(25%) of the Participant's compensation for the Limitation Year. For
purposes of this Article VIII, compensation is defined as the Participant's
wages, salaries, fees for professional services, and other amounts received
for personal services actually rendered in the course of employment with
the Employer (including but not limited to sales commissions, compensation
for services on the basis of a percentage of profits, tips, and bonuses),
excluding all items listed in subparagraph (2) of Paragraph (d) of 26 CFR
Section 1.415-2. If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12-consecutive-month
period, the Maximum Permissible Amount for the short Limitation Year will
be the lesser of (1) $30,000 (or such larger amount determined by the
Commissioner of Internal Revenue or by statute) multiplied by the following
fraction:
number of months in the
short Limitation Year
-----------------------
12
or (2) twenty-five percent (25%) of the Participant's compensation for the
short Limitation Year.
8.2. Coordination of Annual Additions -- Notwithstanding any other
provision of this Plan, if any Annual Additions are allocated under other
qualified defined contribution plans maintained by the Employer with
respect to a Participant of this Plan, and the Participant's Elective
Deferral that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount specified in
Section 8.1, the amount contributed or allocated will be reduced so that
the Annual Additions under all such plans for the Limitation Year will
equal said Maximum Permissible Amount. If the Annual Additions with
respect to the Participant under such other qualified defined contribution
plans in the aggregate are equal to or greater than the Maximum Permissible
Amount, as specified in Section 8.1, any amount contributed or allocated to
the Participant's account for the Limitation Year will be treated as an
Excess Amount.
8.3. Coordination with Limitation on Benefit from All Plans --
Notwithstanding the foregoing, the otherwise permissible Annual Addition<PAGE>
PAGE 18
under this Plan for any Participant may be further reduced to the extent
necessary, as determined by the Administrator, to prevent disqualification
of the Plan under Section 415 of the Internal Revenue Code, which imposes
the following additional limitations on the benefits payable to
Participants who also may be participating in another tax qualified
pension, profit sharing, savings, or stock bonus plan of the Employer: If
an individual is a Participant at any time in both a defined benefit plan
and a defined contribution plan maintained by the Employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction
for any Limitation Year may not exceed 1.0. The defined benefit plan
fraction for any Limitation Year is a fraction, the numerator of which is
the Participant's projected annual benefit under the Plan (determined at
the close of the Limitation Year) and the denominator of which is the
lesser of:
(a) 1.25 (1.0 during any Plan Year in which the Plan has been
determined under Section 9.3 of Article IX to be top heavy) times the
dollar limitation in effect for that Limitation Year, or
(b) 1.4 times the compensation limitation for that Limitation Year.
The defined contribution plan fraction for any Limitation Year is a
fraction, the numerator of which is the sum of the Annual Additions to the
Participant's accounts in such Limitation Year and all prior Limitation
Years and the denominator of which as of the end of a Limitation Year is
the sum of the defined contribution increments for that year and all prior
Limitation Years. For each Limitation Year, the defined contribution
increment is the lesser of 1.25 (1.0 during any Plan Year in which the Plan
has been determined under Section 9.3 of Article IX to be top heavy) times
the dollar limitation for that year, or 1.4 times the compensation
limitation for that year. For purposes of this limitation, all defined
benefit plans of the Employer whether or not terminated, are to be treated
as one defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, are to be treated as one defined
contribution plan.
ARTICLE IX - LIMITATIONS OF SECTION 416 OF THE CODE
9.1. General Rule -- In the event that the Plan becomes top heavy
with respect to a Plan Year commencing on or after January 1, 1988, the
provisions of this Article shall apply.
9.2. Definitions -
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during
the determination period was an office of the Employer,
an owner (or considered an owner under Section
415(c)(1)(A) of the Code) of one of the ten largest
interests in the Employer if such individual's
compensation exceeds 150 percent of the dollar limitation
under Section 415(c)(1)(A) of the Code, a five percent<PAGE>
PAGE 19
(5%) owner of the Employer, or a one percent (1%) owner
of the Employer who has an annual compensation of more
than $150,000. The determination period of the Plan is
the Plan Year containing the determination date and the
four (4) preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Section
416(i)(1) of the Code and the regulations thereunder.
(b) Non-Key Employee: Any Employee who is not a Key
Employee.
(c) Top-Heavy Ratio:
(i) If the Employer maintains one or more defined
benefit plans and the Employer has never maintained any
defined contribution plans (including any simplified
employee pension plan) which has covered or could cover a
Participant in this Plan, the Top-Heavy Ration is a
fraction, the numerator of which is the sum of the
present value of accrued benefits of all Key Employees as
of the determination date (including any part of any
accrued benefit distributed in the five-year period
ending on the determination date), and the denominator of
which is the sum of all accrued benefits (including any
part of any accrued benefit distributed in the five-year
period ending on the determination date) of all
Participants as of the determination date.
(ii) If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer maintains or has
maintained one or more defined benefit plans which have
covered or could cover a Participant in this Plan, the
Top-Heavy Ratio is a fraction, the numerator of which is
the sum of account balances under the defined
contribution plans for all Key Employees and the present
value of accrued benefits under the defined benefit plans
for all Key Employees, and the denominator of which is
the sum of the account balances under the defined
contribution plans for all Participants and the present
value of accrued benefits under the defined benefit plans
for all Participants. Both the numerator and denominator
of the Top-Heavy Ratio are adjusted for any distribution
of an account balance or an accrued benefit made in the
five-year period ending on the determination date and any
contribution due but unpaid as of the determination
date.
(iii) For purposes of (i) and (ii) above, the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
valuation date that falls within or ends with the 12-<PAGE>
PAGE 20
month period ending on the determination date. The
account balances and accrued benefits of a Participant
who is not a Key Employee but who was a Key Employee in a
prior year will be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be
made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible Employee
contributions will not be taken into account for purposes
of computing the Top-Heavy Ratio. When aggregating
plans, the value of account balances and accrued benefits
will be calculated with reference to the determination
dates that fall within the same calendar year.
(d) Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the
Employer which, when considered as a group with the
required aggregation group would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required aggregation group: (i) Each qualified plan of
the Employer in which at least one Key Employee
participates, and (ii) any other qualified plan of the
Employer which enables a plan described in (i) to meet
the requirements of Sections 401(a)(4) and 410 of the
Code.
(f) Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year.
For the first Plan Year of the Plan, the last day of that
year.
(g) Valuation date: The last day of each Plan Year.
(h) Present Value: Present Value shall be based only on the
interest rate used by the Administrator to determine com-
pliance with the funding requirements under the
Retirement Act and the mortality rates specified on an
appropriate current unisex table.
9.3. Determination as to Whether the Plan is Top Heavy -The
Administrator shall determine whether the Plan is top heavy within the
meaning of Section 416. The Plan shall be top heavy for any Plan Year
beginning after December 42, 1987, if, as of the last day of the preceding
Plan Year (the "determination date"), any of the following conditions
exist:
(a) If the Top-Heavy Ratio for this Plan exceeds sixty
percent (60%) and this Plan is not part of any required aggregation
group or permissive aggregation group of plans;
(b) If this Plan is a part of a required aggregation group of<PAGE>
PAGE 21
plans (but which is not part of a permissive aggregation group) and
the Top-Heavy Ratio for the group of plans exceeds sixty percent
(60%); or
(c) If this Plan is a part of a required aggregation group of
plans and part of a permissive aggregation group and the Top-Heavy
Ratio for the permissive aggregation group exceeds sixty percent
(60%).
In determining whether the Plan is top heavy for Plan Years
commencing after December 31, 1988, the Account balance of a Participant
who has not performed an Hour of Service for the Employer at any time
during the five-consecutive-year period ending on the determination date
shall be excluded from the calculation of the Top Heavy Ratio.
9.4. Minimum Contribution -- For each Plan Year with respect to
which the Plan is top heavy, the minimum amount allocated under the Plan
for the benefit of each Participant who is a Non-Key Employee and who is
otherwise eligible for such an allocation shall be the lesser of:
(a) three percent (3%) of the Non-Key Participant's compensation
(within the meaning of Section 415 of the Code) for the Plan
Year, or
(b) the Non-Key Participant's compensation (as defined in Section
415 of the Code) times a percentage equal to the largest
percentage of such compensation (not exceeding $200,000)
allocated to any Key Employee for the Plan Year under this Plan
and all other defined contribution plans in the same required
aggregation group. This clause (b) shall not apply to any plan
required to be included in an aggregation group if such plan
enables a defined benefit plan required to be included in such
group to meet the requirements of Section 401(a)(4) or Section
410 of the Code.
This paragraph shall not apply to a Participant covered under a
qualified defined benefit plan maintained by the Employer if the
Participant's vested benefit thereunder satisfies the requirements of
Section 416(c) of the Code. Notwithstanding any other language
herein, a Non-Key Eligible Employee may not fail to receive a defined
contribution minimum allocation because either (1) said Eligible
Employee was excluded from participation (or accrues no benefit)
merely because the Employee's compensation is less than the stated
amount, or (2) the Employee is excluded from participation (or
accrues no benefit) merely because of a failure to make Elective
Deferrals.
9.5. Limitation on Pension Benefit -- For any Plan Year in which the
Plan is top-heavy, only the first $150,000 (or such larger amount as may be
prescribed by the Secretary of Treasury or his delegate) of each
Participant's annual compensation will be taken into account for purposes
of determining benefits under the Plan.<PAGE>
PAGE 22
9.6. Accelerated Vesting --
(a) For each Plan Year during which the Plan is top heavy, a
vesting schedule which complies with the requirements of Section
416(b)(1)(a) of the Code will be placed in effect. Each Participant
in a Period of Service during a Plan Year in which the Plan is top-
heavy will be entitled to a Nonforfeitable right to one hundred
percent (100%) of the pension benefit accrued from Employer
contributions provided said Participant has completed a Period of
Service with the Employer of at least three (3) years.
(b) In the event that an accelerated vesting schedule must be
placed in effect in accordance with subparagraph (a) of this Section
9.6 and the Plan is later determined not to be top heavy, no vesting
schedule change shall be made which shall have the effect of
providing a benefit to a Participant less than the accrued cumulative
benefit to which the Participant was otherwise entitled as of the
date of said vesting schedule change pursuant to said subparagraph
(a).
ARTICLE X - THE TRUST FUND
10.1. Trust Agreement -- During the period in which this Plan
remains in existence, the Employer or any successor thereto shall maintain
in effect a Trust Agreement with a corporate trustee as Trustee, to hold,
invest, and distribute the Trust Fund in accordance with the terms of such
Trust Agreement.
10.2. Investment of Accounts -- The Trustee shall invest and
reinvest the Participant's Accounts in investment options as defined in
Section 4.1 as directed by the Administrator or its delegate in writing.
The Administrator shall issue such directions in accordance with the
investment options selected by the Participants which shall remain in force
until altered in writing in accordance with Sections 4.2 and 4.3.
10.3. Expenses -- Expenses of the Plan and Trust shall be paid from
the Trust.
ARTICLE XI - ADMINISTRATION OF THE PLAN
11.1. General Administration -- The general administration of the
Plan shall be the responsibility of Raytheon Company (or any successor
thereto) which shall be the Administrator and Named Fiduciary for purposes
of the Retirement Act. The Company shall have the authority, in its sole
discretion, to construe the terms of the Plan and to make determinations as
to eligibility for benefits and as to other issues within the
"Responsibilities of the Administrator" described in Article XI, Section
11.2. All such determinations of the Company shall be conclusive and
binding on all persons.
11.2. Responsibilities of the Administrator -- The Administrator
shall assign responsibility for performance of all necessary administrative
duties, including the following:<PAGE>
PAGE 23
(a) Determination of all questions which may arise under the
Plan with respect to eligibility for participation and
administration of accounts, including without limitation
questions with respect to membership, vesting, loans,
withdrawals, accounting, status of accounts, stock ownership
and voting rights, and any other issue requiring interpretation
or application of the Plan.
(b) Reference of appropriate issues to the Offices of the Vice
President - Controller, and the Vice President - Human
Resources, of Raytheon Company, respectively, for advice and
counsel.
(c) Establishment of procedures required by the Plan, such as
notification to Employees as to joining the Plan, selecting and
changing investment options, suspending deferrals, exercising
voting rights in stock, withdrawing and borrowing account
balances, designation of beneficiaries, election of method of
distribution, and any other matters requiring a uniform
procedure.
(d) Submission of necessary amendments to supplement omissions
from the Plan or reconcile any inconsistency therein.
(e) Filing appropriate reports with the Government as required
by law.
(f) Appointment of a Trustee or Trustees and investment
managers.
(g) Review at appropriate intervals of the performance of the
Trustee and such investment managers as may have been
designated.
(h) Appointment of such additional Fiduciaries as deemed
necessary for the effective administration of the Plan, such
appointments to be by written instrument.
11.3. Liability for Acts of Other Fiduciaries -- Each Fiduciary
shall be responsible only for the duties allocated or delegated to said
Fiduciary, and other Fiduciaries shall not be liable for any breach of
fiduciary responsibility with respect to any act or omission of any other
Fiduciary unless:
(a) The Fiduciary knowingly participates in or knowingly
attempts to conceal the act or omission of such other Fiduciary
and knows that such act or omission constitutes a breach of
fiduciary responsibility by the other Fiduciary;
(b) The Fiduciary has knowledge of a breach of fiduciary
responsibility by the other Fiduciary and has not made
reasonable efforts under the circumstances to remedy the
breach; or<PAGE>
PAGE 24
(c) The Fiduciary's own breach of his specific fiduciary
responsibilities has enabled another Fiduciary to commit a
breach. No Fiduciary shall be liable for any acts or omissions
which occur prior to his assumption of Fiduciary status or
after his termination from such status.
11.4. Employment by Fiduciaries -- Any Fiduciary hereunder may
employ, with the written approval of the Administrator, one or more persons
to render service with regard to any responsibility which has been assigned
to such Fiduciary under the terms of the Plan including legal, tax, or
investment counsel and may delegate to one or more persons any
administrative duties (clerical or otherwise) hereunder.
11.5. Recordkeeping -- The Administrator shall keep or cause to be
kept any necessary data required for determining the account status of each
Participant. In compiling such information, the Administrator may rely
upon its employment records, including representations made by the
Participant in the employment application and subsequent documents
submitted by the Participant to the Employer. The Trustee shall be entitled
to rely upon such information when furnished by the Administrator or its
delegate. Each Employee shall be required to furnish the Administrator
upon request and in such form as prescribed by the Administrator, such
personal information, affidavits and authorizations to obtain information
as the Administrator may deem appropriate for the proper administration of
the Plan, including but not limited to proof of the Employee's date of
birth and the date of birth of any person designated by a Participant as a
Beneficiary.
11.6. Claims Review Procedure -- The Administrator shall make all
determinations as to the right of any person to Accounts under the Plan.
Any such determination by the Administrator shall be made pursuant to the
following procedure:
Step 1. Claims with respect to an Account should be filed by a
claimant as soon as practicable after claimant knows or should know that a
dispute has arisen with respect to an Account, but at least thirty (30)
days prior to the claimant's actual retirement date or, if applicable,
within sixty (60) days after the death, Disability or Severance from
Service of the Participant whose Account is at issue, by mailing a copy of
the claim to the Benefits and Services Department, Raytheon Company,
141 Spring Street, Lexington, Massachusetts 02173.
Step 2. In the event that a claim with respect to an Account is
wholly or partially denied by the Administrator, the Administrator shall,
within ninety (90) days following receipt of the claim, so advise the
claimant in writing setting forth: the specific reason or reasons for the
denial; specific reference to pertinent Plan provisions on which the denial
is based; a description of any additional material or information
necessary for the claimant to perfect the claim; an explanation as to why
such material or information is necessary; and an explanation of the Plan's
claim review procedure.<PAGE>
PAGE 25
Step 3. Within sixty (60) days following receipt of the denial of a
claim with respect to an Account, a claimant desiring to have the denial
appealed shall file a request for review with the Administrator by mailing
a copy thereof to the address shown in Step 1.
Step 4. Within thirty (30) days following receipt of a request for
review, the Administrator shall provide the claimant a further opportunity
to present his or her position. At the Administrator's discretion, such
presentation may be through an oral or written presentation. Prior to such
presentation, the claimant shall be permitted the opportunity to review
pertinent documents and to submit issues and comments in writing. Within a
reasonable time following presentation of the claimant's position, which
usually should not exceed thirty (30) days, the Administrator shall inform
the claimant in writing of the decision on review setting forth the reasons
for such decision and citing pertinent provisions in the Plan.
11.7. Indemnification of Directors and Employees -- The Companies
shall indemnify by insurance or otherwise any Fiduciary who is a director,
officer or employee of the Employer, his heirs and legal representatives,
against all liability and reasonable expense, including counsel fees,
amounts paid in settlement and amounts of judgments, fines or penalties,
incurred or imposed upon him in connection with any claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of acts or omissions in his capacity as a Fiduciary hereunder,
provided that such act or omission is not the result of gross negligence or
willful misconduct. The Companies may indemnify other Fiduciaries, their
heirs and legal representatives, under the circumstances, and subject to
the limitations set forth in the preceding sentence, if such
indemnification is determined by the Board of Directors to be in the best
interests of the Companies.
11.8. Immunity from Liability -- Except to the extent that Section
410(a) of the Retirement Act prohibits the granting of immunity to
Fiduciaries from liability for any responsibility, obligation, or duty
imposed under Title I, Subtitle B, Part 4, of said Act, an officer,
employee, member of the Board of Directors of the Employer or other person
assigned responsibility under this Plan shall be immune from any liability
for any action or failure to act except such action or failure to act which
results from said officer's, Employee's, Participant's or other person's
own gross negligence or willful misconduct.
ARTICLE XII - AMENDMENT OR TERMINATION OF THE PLAN
12.1. Right to Amend or Terminate Plan -- The Company reserves the
right at any time or times, by action of the Chairman, the President, the
Treasurer or the Vice President, Human Resources of Raytheon Company, to
modify, amend or terminate the Plan in whole or in part as to its
Employees, in which event a written direction from an authorized officer,
approving such modification, amendment or termination shall be delivered to
the Trustee and to the other Companies whose Employees are covered by this
Plan, provided, however, that the Plan shall not be amended in such manner
as would cause or permit any part of the corpus of the Trust to be diverted<PAGE>
PAGE 26
to purposes other than for the exclusive benefit of the Employees or as
would cause or permit any part of such corpus to revert to any of the
Companies prior to the satisfaction of all liabilities under the Plan, and
provided further that the duties or liabilities of the Trustee shall not be
increased without its written consent.
12.2. Change in Vesting Schedule -- No amendment to the vesting schedule
shall deprive a Participant of his or her Nonforfeitable rights to benefits
accrued to the date of the amendment.
12.3. Maintenance of Plan -- The Company has established the Plan
with the bona fide intention and expectation that it will continue the Plan
indefinitely, but the Company is not and shall not be under any obligation
or liability whatsoever to maintain the Plan for any given length of time.
12.4. Termination of Plan and Trust -- The Plan and Trust hereby
created shall terminate upon the occurrence of any of the following events:
(a) Delivery to the Trustee of a notice of termination
executed by the Company specifying the date as of which the
Plan and Trust shall terminate;
(b) Adjudication of the Company as bankrupt or general
assignment by the Company to or for the benefit of creditors or
dissolution of the Company;
In the event of the complete termination of this Plan (but a
rescission under Section 13.2 for failure to qualify initially is not such
a termination), the rights of each Participant to the amounts then credited
to his or her Account shall be Nonforfeitable. In the event of the partial
termination of this Plan, the rights of each Employee (as to whom the Plan
is considered terminated) to the amounts then credited to his or her
Account, shall be Nonforfeitable. Whether or not there is a complete or
partial termination of this Plan shall be determined under the regulations
promulgated pursuant to the Internal Revenue Code. To the extent this
paragraph is inconsistent with any provisions contained elsewhere in this
Plan or in the Trust which forms a part of this Plan, this paragraph shall
govern. Upon such termination of the Plan and Trust, after payment of all
expenses and proportional adjustment of accounts to reflect such expenses,
fund losses or profits, and reallocations to the date of termination, each
Participant or former Participant shall be entitled to receive any amounts
then credited to his or her Account in the Trust Fund. The Trustee may
make payments in cash or, to the extent permitted by Section 6.6, in stock.
ARTICLE XIII - ADDITIONAL PROVISIONS
13.1. Effect of Merger, Consolidation or Transfer -- In the event of
any merger or consolidation with or transfer of assets or liabilities to
any other plan or to this Plan, each Participant of the Plan shall be
entitled to a benefit immediately after the merger, consolidation or
transfer, which is equal to or greater than the benefit he or she would
have been entitled to receive immediately before the merger, consolidation<PAGE>
PAGE 27
or transfer (if the Plan had been terminated).
13.2. Necessity of Initial Qualification -- This Plan is established
with the intent that it shall qualify under Sections 401(a) and 401(k) of
the Code as that section exists at the time the Plan is established. If
the Internal Revenue Service determines that the Plan initially fails to
meet those requirements, then within thirty (30) days after the date of
such determination all of the vested assets of the Trust Fund held for the
benefit of Participants and their beneficiaries shall be distributed
equitably among the contributors to the Plan in proportion to their
contributions, and the Plan shall be considered to be rescinded and of no
force or effect, unless such inadequacy is removed by a retroactive
amendment pursuant to the Code.
13.3. Limitation of Assignment -- No account under the Plan shall be
subject in any manner to attachment, anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, or the vesting of
rights in any person by operation of law or otherwise except as provided
under this Plan, including but not limited to the Trustee or Receiver in
Bankruptcy, and any attempt so to anticipate, alienate, sell, transfer,
assign, encumber or charge the same shall be void, nor shall any such
benefit be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such benefit.
If any Participant is adjudicated bankrupt, or attempts to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any benefit
under the Plan, then such benefit shall, in the discretion of the
Administrator, cease and terminate and in that event the Trustee shall hold
or apply the same or any part thereof to or for the benefit of such
Participant in such manner as the Administrator may direct. This Section
shall not apply to qualified domestic relations orders as defined in the
Retirement Equity Act of 1984.
13.4. Limitation of Rights of Employees -- This Plan is strictly a
voluntary undertaking on the part of the Companies and shall not be deemed
to constitute a contract between any of the Companies and any Employee, or
to be a consideration for, or an inducement to, or a condition of the
employment of any Employee. Nothing contained in the Plan shall be deemed
to give any Employee the right to be retained in the service of any of the
Companies or shall interfere with the right of any of the Companies to dis-
charge or otherwise terminate the employment of any Employee of the
respective company at any time. No Employee shall be entitled to any right
or claim hereunder except to the extent such right is specifically fixed
under the terms of the Plan.
13.5. Construction -- The Plan shall be construed, regulated, and
administered under the laws of the Commonwealth of Massachusetts, except to
the extent that the Retirement Act otherwise requires. In the event that
any provision of this Plan is inconsistent with any provision in the
Retirement Act, the provision in the Retirement Act shall be deemed to be
controlling.
ARTICLE XIV - DEFINITIONS<PAGE>
PAGE 28
The following terms have the meaning specified below unless the
context indicates otherwise:
14.1. "Account" means the entire interest of a Participant in the
Trust Fund and shall consist of an Employee Account and, if applicable, a
Rollover Contribution Account.
14.2. "Administrator" means Raytheon Company.
14.3. "Annual Addition" means the Participant's Elective Deferral
during a Limitation Year.
14.4. "Authorized Leave of Absence" means an absence approved by the
Companies on a uniform and nondiscriminatory basis not exceeding one (1)
year for any of the following reasons: illness of Employee or relative,
death of relative, education of Employee, or personal or family business of
an extraordinary nature, provided in each case that the Employee returns to
the service of the Companies within the time period specified by the
Companies.
14.5. "Authorized Military Leave of Absence" means any absence due
to service in the Armed Forces of the United States, upon completion of
which the Employee is entitled under any applicable Federal law to
reemployment at the termination of such military service, provided that he
returns to the service of the Companies within the period provided for by
such applicable Federal law or such further period as may be established by
the Administrator. As used in this paragraph, the term "Armed Forces of the
United States" excludes the Merchant Marine.
14.6. "Beneficiary" means a Participant's Surviving Spouse. If there
is no Surviving Spouse, or if the Surviving Spouse has given written
consent to the designation of another person or persons as Beneficiary,
then Beneficiary shall mean said person or persons designated by the
Participant to be paid the lump sum value of the Participant's Account in
the event of the Participant's death.
14.7. "Board of Directors" means the Board of Directors of Raytheon
Company.
14.8. "Company" means Raytheon Company.
14.9. "Companies" means the Company and any Subsidiary of the
Company which elects through an authorized officer to participate in the
Plan on account of its Employees, provided that participation in the Plan
by such a Subsidiary is approved by the Board of Directors or an authorized
officer of the Company, but shall not include any Division, Operation or
similar cohesive group of a participating Subsidiary excluded by the Board
of Directors or an authorized officer of the Subsidiary and the Board of
Directors or an authorized officer of the Company.
14.9A. "Covered Unit" means a unit designated by the Company and a
participating Company as a unit, the employees in which are eligible to
participate in this Plan.<PAGE>
PAGE 29
14.10. "Designated Hourly or Salaried Payroll" means an hourly or
salaried payroll or portion thereof, processed in the United States, of one
of the Companies which is designated in writing by the Administrator in
accordance with nondiscriminatory and uniform rules as a payroll the
Employees on which are eligible to participate in this Plan.
14.11. "Disability" means that the Participant is totally and
permanently disabled by bodily injury or disease so as to be prevented from
engaging in any occupation for compensation or profit. The determination
of disability shall be made by the Administrator with the aid of competent
medical advice. It shall be based on such evidence as the Administrator
deems necessary to establish disability or the continuation thereof.
14.12. "Elective Deferral" means a voluntary reduction of
Participant's compensation in accordance with a written direction to the
Administrator.
14.13. "Eligible Compensation" means base pay, supervisory
differentials, shift premiums and sales commissions, excluding all other
earnings from any source.
14.14. "Eligible Employee" means any Employee on a U.S. based
Designated Hourly or Salaried Payroll in a Covered Unit of one of the
Companies, excluding Employees in cooperative studies and intern programs
and a person who is an Employee solely by reason of being a leased employee
within the meaning of Section 414(n) of the Internal Revenue Code.
14.15. "Employee" means any person performing compensated services
for the Employer who meets the definition of "Employee" for income tax
withholding purposes under Treas. Regs. 3l.340l(c)-l and any person who is
a leased employee providing services to the Employer as recipient pursuant
to an agreement between the Employer and a leasing organization in
accordance with Section 414(n)(2) of the Internal Revenue Code; provided,
however, that a leased employee shall not be an Employee hereunder if
covered by a plan, as described in Section 414(n)(5) of the Code, of the
leasing organization.
14.16. "Employer" means Raytheon Company, and, where the context
requires, any subsidiary of Raytheon Company while such subsidiary is, or
was, a member of a "controlled group of corporations" within the meaning of
Section 414(b) of the Internal Revenue Code.
14.17. "Employment Commencement Date" is the date on which the
Employee first performs an Hour of Service with the Employer.
14.18. "Enrollment Agreement" means a salary reduction agreement
pursuant to which an Eligible Employee voluntarily joins the Plan and
authorizes deferral of a portion of the Participant's Eligible
Compensation.
14.19. "Entry Date" means the first Pay Date in each calendar month.<PAGE>
PAGE 30
14.20. "Fidelity" means Fidelity Investments, the recordkeeper for
the Plan.
14.21. "Fiduciary" means a named fiduciary and any other person or
group of persons who assumes a fiduciary responsibility within the meaning
of the Retirement Act under this Plan whether by expressed delegation or
otherwise but only with respect to the specific responsibilities of each
for the administration of the Plan and Trust Fund.
14.22. (a) "Hour of Service" means an hour with respect to which any
Employee is paid, or entitled to payment, for the performance of duties for
the Employer during the applicable computation period.
(b) "Hour of Service" shall include an hour for which the
Employee is entitled to credit under subparagraph (a) hereof as a result of
employment with a Division, Operation or similar cohesive group of the
Employer excluded from participation in the Plan.
(c) To the extent applicable, the rules set forth in 29 CFR
Sections 2530.200b-2(b) and (c) for computing an "Hour of Service" are
incorporated herein by reference.
14.23. "Layoff" means an involuntary interruption of service due to
reduction of work force with the possibility of recall to employment when
conditions warrant.
14.24. "Limitation Year" means the calendar year or any other 12-
consecutive-month period adopted for all qualified deferred compensation
plans of the Company pursuant to a written resolution adopted by the
Company.
14.25. "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of
determination under this Plan.
14.26. "Normal Retirement Age" means the Participant's sixty-fifth
(65th) birthday.
14.27. "Participant" means an individual who is enrolled in the Plan
pursuant to Article III and has not withdrawn the entire amount of his or
her Account.
14.28. "Pay Date" means the date designated for payment of wages or
salary during the first pay period of a calendar month.
14.29. "Period of Participation" means that portion of a Period of
Service during which the Eligible Employee was a Participant, and had an
Account in the Plan.
14.30. "Period of Service" means the period of time beginning on the
Employee's Employment Commencement Date or Reemployment Commencement Date,
whichever is applicable, and ending on the Employee's Severance from<PAGE>
PAGE 31
Service Date.
14.31. "Period of Severance" means the period of time beginning on
the Employee's Severance from Service Date and ending on the Employee's
Reemployment Commencement Date.
14.32. "Plan" means the Raytheon Employee Savings and Investment
Plan as amended from time to time.
14.33. "Plan Year" means a calendar year, or a portion thereof
occurring prior to the termination of the Plan.
14.34. "Reemployment Commencement Date" means the first date on
which the Employee performs an Hour of Service following a Period of
Severance which is excluded under Section 2.5 in determining whether a
Participant has completed the required Period of Service for eligibility to
participate in the Plan.
14.35. "Retirement" means a Severance from Service when the
Participant has either attained age 55 and completed a Period of Service
of at least ten (10) years or has attained Normal Retirement Age.
14.36. "Retirement Act" means the Employee Retirement Income
Security Act of 1974, including any amendments thereto.
14.37. "Rollover Contribution Account" means that portion of a
Participant's Account which is attributable to rollover contributions
received pursuant to Section 3.7, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.38. "Salaried Payrolls" means the nonexempt salaried and the
exempt salaried payrolls which are processed in the United States.
14.39. "Severance from Service" means the termination of employment
by reason of quit, Retirement, discharge, death or failure to return from
Layoff, Authorized Leave of Absence, Authorized Military Leave of Absence
or Disability, or, if designated by the Administrator pursuant to
subsection 14.40(b) below, layoff as the result of a permanent plant
closing.
14.40. "Severance from Service Date" means the earlier of:
(a) the date on which an Employee quits, retires, is
discharged, or dies; or
(b) except as provided in paragraphs (c), (d) and (e) hereof,
the first anniversary of the first date of a period during which an
Employee is absent for any reason other than quit, retirement, discharge or
death, provided that, on an equitable and uniform basis, the Administrator
may determine that, in the case of a layoff as the result of a permanent
plant closing, the Administrator may designate the date of layoff or other
appropriate date prior to the first anniversary of the first date of<PAGE>
PAGE 32
absence as the Severance from Service Date; or
(c) in the case of an Authorized Military Leave of Absence
from which the Employee does not return prior to expiration of recall
rights, "Severance from Service Date" means the first day of absence
because of the leave; or
(d) in the case of an absence due to Disability, "Severance
from Service Date" means the earlier of the first anniversary of the first
day of absence because of the Disability or the date of termination of the
Disability; or
(e) in the case of an Employee who is discharged or quits (i)
by reason of the pregnancy of the Employee, (ii) by reason of the birth of
a child to the Employee, (iii) by reason of the placement of a child with
the Employee in connection with the adoption of such child by the Employee
or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement, "Severance from Service
Date," for the sole purpose of determining the length of a Period of
Service, shall mean the first anniversary of the quit or discharge.
14.41. "Subsidiary" means any corporation designated by the Board of
Directors as a Subsidiary, provided that for the purposes of the Plan no
corporation shall be considered a Subsidiary during any period when less
than fifty percent (50%) of its outstanding voting stock is beneficially
owned by the Company.
14.42. "Surviving Spouse" means a lawful spouse surviving the
Participant as of the date of Participant's death.
14.43. "Trust Agreement" means the agreement between the Company and
the Trustee, and any successor agreement made and entered into for the
establishment of a trust fund of all contributions which may be made to the
Trustee under the Plan.
14.44. "Trustee" means the Trustee and any successor trustees under
the Trust Agreement.
14.45. "Trust Fund" means the cash, securities, and other property
held by the Trustee for the purposes of the Plan.
14.46. "Valuation Date" means the last business day of each calendar
month.
14.47. Words used in either the masculine or feminine gender shall
be read and construed so as to apply to both genders where the context so
warrants. Words used in the singular shall be read and construed in the
plural where they so apply.<PAGE>
PAGE 1
EXHIBIT 99.4
ANNUAL REPORT
-------------
Pursuant to Section 15(d) of the
Securities Act of 1934
For the Fiscal Year Ended
December 31, 1993
-------------
RAYTHEON SUBSIDIARY SAVINGS AND INVESTMENT PLAN
(formerly Caloric Corporation Savings and Investment Plan)
---------------------------<PAGE>
PAGE 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We have audited the accompanying statements of net assets available
for plan benefits of the Raytheon Subsidiary Savings and Investment Plan
as of December 31, 1993 and 1992, and the related statements of changes in
net assets available for plan benefits for each of the three years in the
period ended December 31, 1993. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Raytheon Subsidiary Savings and Investment Plan as of
December 31, 1993 and 1992, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1993 in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand
Boston, Massachusetts COOPERS & LYBRAND
June 17, 1994<PAGE>
PAGE 3
RAYTHEON SUBSIDIARY SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1993 and 1992
-------
1993 1992
---- ----
Assets:
Investments, at fair value
(Notes B, E, G and I) $2,521,062 $721,079
Receivables:
Accrued investment income 21 1,625
Employee deferrals 18,840 738
Loans receivable from participants 65,078 6,714
Cash and cash equivalents 9,201 4,030
---------- --------
Total assets 2,614,202 734,186
---------- --------
Liabilities:
Payable for outstanding purchases - 857
Administrative expenses 16,106 14,894
---------- --------
Total Liabilities 16,106 15,751
---------- --------
Net assets available for plan benefits $2,598,096 $718,435
========== ========
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 4
RAYTHEON SUBSIDIARY SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
for the years ended December 31, 1993, 1992 and 1991
-------
1993 1992 1991
---- ---- ----
Additions to net assets
attributable to:
Investment income
(Notes B, E, G and I):
Change in appreciation
(depreciation) of
investments $ 115,480 $ 65,844 $ 112,568
Interest 26,442 29,129 50,288
Dividends 28,007 11,068 25,656
Capital gains distributions 11,209 - -
---------- ---------- ----------
181,138 106,041 188,512
Employee deferrals 790,213 192,640 310,505
Other additions (Note F) 948,540 - -
---------- ---------- ----------
Total additions 1,919,891 298,681 499,017
---------- ---------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 21,332 953,214 185,094
Administrative expenses 18,898 26,182 3,407
---------- ---------- ----------
Total deductions 40,230 979,396 188,501
---------- ---------- ----------
Increase (decrease) in net assets 1,879,661 (680,715) 310,516
Net assets, beginning of year 718,435 1,399,150 1,088,634
---------- ---------- ----------
Net assets, end of year $2,598,096 $ 718,435 $1,399,150
========== ========== ==========
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 5
RAYTHEON SUBSIDIARY SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
-------
A. Description of Plan:
General
The Raytheon Subsidiary Savings and Investment Plan (the "Plan"),
formerly the Caloric Savings and Investment Plan is a defined
contribution plan covering certain employees of Raytheon Company and
Subsidiaries (the "Company"). To participate in the Plan, eligible
employees must have three months of service and may enter the Plan
only on the first day of each month. The purpose of the Plan is to
provide participants with a tax-effective means of meeting both
short and long-term investment objectives. The Plan is intended to
be a "qualified cash or deferred arrangement" under Sections 401(a)
and 401(k) of the Internal Revenue Code (the "Code"). The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA). The total number of participants in the Plan
as of December 31, 1993 and 1992 were 737 and 128, respectively.
Participants by fund were as follows as of December 31, 1993:
Guaranteed Income Fund 335
Equity Fund 350
Raytheon Common Stock Fund 377
Stock Index Fund 184
Balanced Fund 343
Effective July 31, 1992, the Plan's investments were combined with
the investments of other similar defined contribution plans of
Raytheon Company and Subsidiaries Consolidated into the Raytheon
Company Master Trust for Defined Contribution Plans ("Master
Trust"). The trustee of the Master Trust maintains a separate
account reflecting the equitable share in the Trust of each Plan.
Contributions and Deferrals
Eligible Caloric employees are allowed to defer to the Plan up to 6%
of their salaries. Eligible Raytheon Services Nevada and Harbert
Yeargin, Inc. employees are allowed to defer to the Plan up to 15%
of their salaries. The Company did not make matching contributions
during fiscal years 1991 through 1993. As of December 31, 1993, the
annual employee deferral cannot exceed $8,994. Effective May 31,
1993, rollover contributions from other qualified plans were
accepted by the Plan. Participants may invest their deferrals in
increments of 10% in any combination of five funds: (a) a
Guaranteed Income Fund under which assets are invested primarily in
contracts providing for fixed rates of interest for specified
periods of time, (b) an Equity Fund which invests in shares of a
mutual fund which consists primarily of income-producing equity
securities, (c) a Raytheon Common Stock Fund which invests in shares<PAGE>
PAGE 6
of Raytheon Company Common Stock, (d) a Stock Index Fund which
invests in a commingled pool consisting primarily of equity
securities and is designed to track the S&P 500 Index, and (e) a
Balanced Fund which invests in shares of a mutual fund which
consists primarily of equity securities, bonds and money market
instruments. Dividends and distributions from investments of the
Raytheon Common Stock Fund, the Equity Fund and the Balanced Fund
are reinvested in the respective funds; stock dividends, stock
splits and similar changes are also reflected in the funds.
Participant Accounts
Each participant's account is credited with the participant's
deferral and an allocation of Plan earnings. Plan earnings are
allocated based on account balances by fund.
Vesting
Participants are immediately vested in their voluntary deferrals
plus actual earnings thereon.
Benefits and Withdrawals
A participant may withdraw all or part of deferrals and related
earnings upon attainment of age 59 1/2. For reasons of financial
hardship, as defined in the Plan document, a participant may
withdraw all or part of deferrals. On termination of employment, a
participant will receive a lump-sum distribution unless the vested
account is valued in excess of $3,500 and the participant elects to
defer distribution. A retiree or a beneficiary of a deceased
participant may defer the distribution to January of the following
year.
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum
amount of a loan is the lesser of one-half (1/2) of the
participant's account balance or $50,000. The minimum loan which
may be granted is $500. The interest rate applied is equal to the
prime rate published in the WALL STREET JOURNAL on the first
business day in June and December of each year. Loans must be
repaid over a period of up to five years by means of payroll
deductions. In certain cases, the repayment period may be extended
up to 15 years. Interest paid to the Plan on loans to participants
is credited to the borrower's account in the investment fund to
which repayments are made.
Administrative Expenses
Substantially all expenses of administering the Plan are paid by the
Plan.<PAGE>
PAGE 7
B. Summary of Significant Accounting Policies:
The Plan's guaranteed income contracts are valued at cost, defined
as net employee deferrals plus interest earned at contracted rates,
which approximates fair value. Investments in mutual funds and the
commingled pool are valued at the closing net asset value reported
on the last business day of the year. Investments in securities
(common stocks) traded on a national securities exchange are valued
at the last reported sales price on the last business day of the
year. Cash equivalents are short-term money market instruments and
are valued at cost which approximates fair value.
Security transactions are recorded on trade date. Except for its
guaranteed income contracts (Note E), the Plan's investments are
held by bank-administered trust funds. Payables for outstanding
security transactions represent trades which have occurred but have
not yet settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Dividend income is recorded on the ex-dividend date. Income from
other investments is recorded as earned on an accrual basis.
C. Federal Income Tax Status:
The Plan is a "qualified cash or deferred arrangement" within the
meaning of Section 401(k) of the Code. The Company has received a
favorable determination letter from the Internal Revenue Service
which states that the Plan is qualified under Sections 401(a) and
401(k) of the Code. The Plan obtained its latest determination
letter in 1989, in which the Internal Revenue Service stated that
the Plan, as then designated, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been
amended since receiving the determination letter. However, the plan
administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
D. Plan Termination:
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants are 100% vested in their accounts.
E. Guaranteed Income Contracts (GICs):<PAGE>
PAGE 8
The Plan holds three collateralized fixed income investment
portfolios (with no expiration date), two of which are managed by
insurance companies and one of which is managed by an investment
management firm. The credited interest rates are adjusted
semiannually to reflect the experienced and anticipated yields to be
earned on such investments, based on their book value. The annual
rates were 5.80%, 6.34% and 6.28% and the effective annual rates
were 5.97%, 6.55% and 6.48%, respectively, at December 31, 1993.
The values of the portfolios managed by Metropolitan Life Insurance
Company, The Prudential Asset Management Company and Banker's Trust
were $216,943, $149,742 and $250,975, respectively, at December 31,
1993. The values of the GICS held with Metropolitan Life Insurance
Company and Loomis, Sayles & Company were $328 and $316,109,
respectively at December 31, 1992.
F. Other Additions:
Effective May 1, 1993 and July 1, 1993, the accounts of employees of
Raytheon Services Nevada and Harbert Yeargin, Inc., respectively,
who participated in the Raytheon Savings and Investment Plan were
transferred into the Plan.
G. Related Party Transactions:
In accordance with the provisions of the Plan, State Street Bank and
Trust Company (the "Trustee") acted as the Plan's agent for
purchases and sales of shares of Raytheon Company Common Stock until
July 31, 1992. Effective July 31, 1992, Fidelity Management Trust
Company (the "Trustee") acts as the Plan's agent for purchases and
sales of shares of Raytheon Company Common Stock. For the years
ended December 31, 1993, 1992 and 1991, purchases of Raytheon
Company Common Stock amounted to $46,122, $38,716 and $73,181,
respectively. Sales of Raytheon Company Common Stock amounted to
$13,974, $186,827 and $48,678 in 1993, 1992 and 1991, respectively.
H. Subsequent Event:
Effective January 1, 1994, account balances of all Caloric
Corporation employees who participated in the Plan were transferred
to another Company plan.<PAGE>
PAGE 9
<TABLE>
I. Fund Data:
The following is a summary of net assets available for plan benefits by fund as of December 31:
<CAPTION>
1993
-------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Guaranteed Income Contracts $617,660 $ 617,660
Fidelity Equity Income Fund
(16,776 shares) - $567,688 567,688
Raytheon Company Common Stock
(8,850 shares) - - $584,092 584,092
BT Pyramid Equity Index Fund
(231 shares) - - - $227,888 227,888
Fidelity Balanced Fund
(39,114 shares) - - - - $523,734 523,734
-------- -------- -------- -------- -------- ----------
Total investments 617,660 567,688 584,092 227,888 523,734 2,521,062
Receivables:
Accrued investment income - - 14 7 - 21
Employee deferrals 2,695 4,773 3,880 1,981 5,511 18,840
Loans receivable from participants - - - - - $65,078 65,078
Cash and cash equivalents - - 7,083 2,118 - - 9,201
-------- -------- -------- -------- -------- ------- ----------
Total assets 620,355 572,461 595,069 231,994 529,245 65,078 2,614,202
-------- -------- -------- -------- -------- ------- ----------
Liabilities:
Administrative expenses 3,937 3,618 3,728 1,455 3,368 - 16,106
-------- -------- -------- -------- -------- ------- ----------
Total liabilities 3,937 3,618 3,728 1,455 3,368 - 16,106
-------- -------- -------- -------- -------- ------- ----------
Net assets available for plan benefits $616,418 $568,843 $591,341 $230,539 $525,877 $65,078 $2,598,096<PAGE>
PAGE 10 ======== ======== ======== ======== ======== ======= ==========<PAGE>
PAGE 11
I. Fund Data:
The following is a summary of net assets available for plan benefits by fund as of December 31:
1992
--------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Contracts with insurance companies $316,437 $316,437
Fidelity Equity Income Fund
(3,938 shares) - $114,232 114,232
Raytheon Company Common Stock
(4,640 shares) - - $237,798 237,798
BT Pyramid Equity Index Fund
(59 shares) - - - $52,612 52,612
-------- -------- -------- ------- --------
Total investments 316,437 114,232 237,798 52,612 721,079
Receivables:
Accrued investment income - - 1,623 2 1,625
Employee deferrals 181 107 274 176 738
Loans receivable from participants - - - - $6,714 6,714
Cash and cash equivalents - - 3,279 751 - 4,030
-------- -------- -------- ------- ------ --------
Total assets 316,618 114,339 242,974 53,541 6,714 734,186
-------- -------- -------- ------- ------ --------
Liabilities
Payable for outstanding purchases - - 857 - - 857
Administrative expenses 6,536 2,360 4,912 1,086 - 14,894
-------- -------- -------- ------- ------ --------
Total liabilities 6,536 2,360 5,769 1,086 - 15,751
-------- -------- -------- ------- ------ --------
Net assets available for
plan benefits $310,082 $111,979 $237,205 $52,455 $6,714 $718,435
======== ======== ======== ======= ====== ========<PAGE>
PAGE 12
I. Fund Data, Continued:
The following is a summary of changes in net assets available for plan benefits by fund as of December 31:
1993
------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ------ -------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 26,447 $ 74,630 $ 7,666 $ 6,737 $ 115,480
Interest $ 26,190 - 178 74 - 26,442
Dividends - 10,895 7,167 9,945 28,007
Capital gains
distributions - 1,853 - 9,356 11,209
-------- -------- -------- -------- -------- ----------
26,190 39,195 81,975 7,740 26,038 181,138
Employee deferrals 138,088 186,083 149,585 100,870 215,587 790,213
Other additions 204,023 245,385 137,068 80,978 281,086 948,540
-------- -------- -------- -------- -------- ----------
Total additions 368,301 470,663 368,628 189,588 522,711 1,919,891
-------- -------- -------- -------- -------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 11,396 6,250 1,404 1,716 566 21,332
Administrative expenses 4,747 3,460 4,443 1,698 4,550 18,898
-------- -------- -------- -------- -------- ----------
Total deductions 16,143 9,710 5,847 3,414 5,116 40,230
-------- -------- -------- -------- -------- ----------
Interfund transfers (25,178) 5,006 466 (601) 20,307 -
Loans to participants (22,432) (10,267) (10,220) (8,959) (12,253) $64,131 -
Repayment of loan principal 1,788 1,172 1,109 1,470 228 (5,767) -
-------- -------- -------- -------- -------- ------- ----------
Increase in net assets 306,336 456,864 354,136 178,084 525,877 58,364 1,879,661
Net assets, beginning of year 310,082 111,979 237,205 52,455 - 6,714 718,435
-------- -------- -------- -------- -------- ------- ----------
Net assets, end of year $616,418 $568,843 $591,341 $230,539 $525,877 $65,078 $2,598,096
======== ======== ======== ======== ======== ======= ==========<PAGE>
PAGE 13<PAGE>
PAGE 14
I. Fund Data, Continued:
The following is a summary of changes in net assets by fund for the year ended December 31:
1992
------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 14,498 $ 49,053 $ 2,293 $ 65,844
Interest $ 28,990 17 108 14 29,129
Dividends - 4,555 6,513 - 11,068
-------- -------- -------- ------- ----------
28,990 19,070 55,674 2,307 106,041
Employee deferrals 116,725 22,645 21,058 32,212 192,640
-------- -------- -------- ------- ----------
Total additions 145,715 41,715 76,732 34,519 298,681
-------- -------- -------- ------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 474,064 157,602 257,663 63,885 953,214
Administrative expenses 11,788 4,199 8,543 1,652 26,182
-------- -------- -------- ------- ----------
Total deductions 485,852 161,801 266,206 65,537 979,396
-------- -------- -------- ------- ----------
Interfund transfers (2,400) (2,841) (647) 5,888 -
Loans to participants (2,398) (1,671) (3,209) (451) $ 7,729 -
Repayment of loan principal 649 3,863 4,301 4,147 (12,960) -
-------- -------- -------- ------- ------- ----------
Increase (decrease) in net assets (344,286) (120,735) (189,029) (21,434) (5,231) (680,715)
Net assets, beginning of year 654,368 232,714 426,234 73,889 11,945 1,399,150
-------- -------- -------- ------- ------- ----------
Net assets, end of year $310,082 $111,979 $237,205 $52,455 $ 6,714 $ 718,435
======== ======== ======== ======= ======= ==========<PAGE>
PAGE 15<PAGE>
PAGE 16
I. Fund Data, Continued:
The following is a summary of changes in net assets by fund for the year ended December 31:
1991
------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 42,664 $ 62,220 $ 7,684 $ 112,568
Interest $ 50,117 20 137 14 50,288
Dividends - 13,764 11,892 - 25,656
-------- -------- -------- ------- ----------
50,117 56,448 74,249 7,698 188,512
Employee deferrals 161,701 52,473 78,573 17,758 310,505
-------- -------- -------- ------- ----------
Total additions 211,818 108,921 152,822 25,456 499,017
-------- -------- -------- ------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 93,495 37,441 48,621 5,537 185,094
Administrative expenses 1,572 572 1,159 104 3,407
-------- -------- -------- ------- ----------
Total deductions 95,067 38,013 49,780 5,641 188,501
-------- -------- -------- ------- ----------
Interfund transfers 54,153 (72,049) (35,630) 53,526 -
Loans to participants (2,856) (314) (5,153) (176) $ 8,499 -
Repayment of loan principal 1,291 1,141 1,384 724 (4,540) -
-------- -------- -------- ------- ------- ----------
Increase in net assets 169,339 (314) 63,643 73,889 3,959 310,516
Net assets, beginning of year 485,029 233,028 362,591 - 7,986 1,088,634
-------- -------- -------- ------- ------- ----------
Net assets, end of year $654,368 $232,714 $426,234 $73,889 $11,945 $1,399,150<PAGE>
PAGE 17 ======== ======== ======== ======= ======= ==========
/TABLE
<PAGE>
PAGE 18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Raytheon Subsidiary Savings and Investment Plan (formerly the Caloric
Corporation Savings and Investment Plan) has duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
RAYTHEON SUBSIDIARY SAVINGS AND INVESTMENT PLAN
BY
/s/ Frank D. Umanzio
Frank D. Umanzio
Vice President - Human Resources
DATE June 30, 1994<PAGE>
PAGE 1
EXHIBIT (99.4a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company on Form S-8 (File No. 33-14165) of our report
dated June 17, 1994 on our audits of the financial statements of the Raytheon
Employees Savings and Investment Plan as of December 31, 1993 and 1992 and for
each of the three years in the period ended December 31, 1993, which report is
included in this annual report on Form 11-K.
We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
June 24, 1994<PAGE>
PAGE 1
EXHIBIT 99.4(b)
RAYTHEON SUBSIDIARY
SAVINGS AND INVESTMENT PLAN
(formerly Caloric Savings and Investment Plan)
Provisions in Effect as of May 1, 1994
ARTICLE I - ADOPTION AND PURPOSE
The Caloric Savings and Investment Plan was established effective
August 1, 1987, for the purpose of providing employees with a tax-effective
means of allocating a portion of their salary to be invested in one or more
investment opportunities specified in the Plan as determined by the
employee and set aside for short-term and long-term needs of the employee.
The Plan was applicable only to eligible employees of the Caloric
Corporation from August 1, 1987 to May 1, 1993, when hourly employees of
Raytheon Services Nevada in the collective bargaining unit represented by
the International Union of Operating Engineers, Local 12, became eligible
to participate. On July 1, 1993, eligible employees of Yeargin Inc. also
became eligible to participate. On January 1, 1994, Caloric Corporation
merged with Amana Refrigeration, Inc. and, thereafter, its employees were
no longer eligible to participate in this Plan.
It is intended that the Plan will comply with all of the requirements
for a qualified defined contribution plan under Sections 401(a) and 401(k)
of the Internal Revenue Code and will be amended from time to time to
maintain compliance with these requirements. The terms used in the Plan
have the meanings specified in Article XIV unless the context indicates
otherwise.
ARTICLE II - ELIGIBILITY
2.1. Eligibility Requirements - Present Employees -- Each Eligible
Employee who was in a Period of Service for Caloric Corporation from May 1,
1987, through July 31, 1987; who was in a Period of Service for Raytheon
Services Nevada on April 30, 1993; or who was a participant in the Yeargin
Inc. Employee 401(k) Savings Plan as of July 1, 1993, may join the Plan as
of August 1, 1987, May 1, 1993, and July 1, 1993, respectively, or any
subsequent Entry Date selected by the Eligible Employee provided he or she
continues in the same Period of Service or meets the requirements under
Section 2.2.
2.2. Eligibility Requirements - Other Employees -- Each other
Eligible Employee may join the Plan as of the first Entry Date coincident
with or next following completion of a Period of Service of three (3)
consecutive months commencing on the Employee's Commencement Date or
Reemployment Commencement date, whichever is applicable.
2.3. Procedure for Joining the Plan -- Each Eligible Employee who
meets the requirements of Section 2.1 or Section 2.2 may join the Plan as<PAGE>
PAGE 2
of any Entry Date by communicating with Fidelity in accordance with
instructions in an enrollment kit which will be made available to each
Eligible Employee. An enrollment in the Plan shall not be deemed to have
been completed until the Employee has designated: a percentage by which
Participants' Eligible Compensation shall be reduced as an Elective
Deferral in accordance with the requirements of Section 3.1(b), subject to
the nondiscrimination test described in Section 3.3(a); election of
investment funds as describved in Article IV; one or more Beneficiaries;
and such other information as specified by Fidelity. The Administrator in
its discretion may from time to time make exceptions and adjustments in the
foregoing procedure on a uniform and nondiscriminatory basis.
2.4. Transfer to Position Not Covered by Plan -- If a Participant is
transferred to another position with the Employer in which the Participant
is no longer an Eligible Employee, the Participant will remain a
Participant of the Plan with respect to Elective Deferrals previously made
but will no longer be eligible to have Elective Deferrals made to the Plan
on his or her behalf until he or she again becomes an Eligible Employee.
In the event the Participant is subsequently transferred to a position in
which he or she again becomes an Eligible Employee, the Participant may
renew Elective Deferrals as of any Entry Date by communicating with
Fidelity and providing all of the information requested by Fidelity.
2.5. Break in Service Rules
(a) Periods of Service -- In determining the length of a
Period of Service, the Administrator shall include all Periods
of Service, except a Period of Service prior to a Period of
Severance of twelve (12) months or more, unless subsequent to
said Period of Severance the Participant completes a Period of
Service of at least twelve (12) months.
(b) Periods of Severance -- In determining the length of a
Period of Service, the Administrator shall exclude all Periods
of Severance, except that in the event a Participant returns
from a quit, discharge, or Retirement, within twelve (12)
months from the earlier of
(i) the date of the quit, discharge, or Retirement, or
(ii) if the Participant was absent from employment for
reasons such as layoff or Authorized Leave of Absence on
the day of the quit, discharge, or Retirement, the first
day of such absence, the period of absence will be
included as a Period of Service.
(c) Other Periods -- In making the determinations described in
subsections (a) and (b) of this Section 2.5, the second, third,
and fourth consecutive years of a Layoff (from the first
anniversary of the last day paid to the fourth anniversary of
the last day paid) and any period in excess of one (1) year of
an Authorized Leave of Absence shall be regarded as neither a<PAGE>
PAGE 3
Period of Service nor a Period of Severance.
ARTICLE III - CONTRIBUTIONS
3.1. Elective Deferrals -- Elective Deferrals must be made in one
percent (1%) increments with a minimum Elective Deferral of one percent
(1%) of Eligible Compensation earned after the Entry Date and a maximum
Elective Deferral as follows:
Caloric employees - six percent (6%)
RSN employees - fifteen percent (15%)
Yeargin employees - fifteen percent (15%);
but no Participant may defer more than $7,000 for any Plan Year, except as
such amount is adjusted for changes in the cost of living as provided in
Section 402(g)(5) of the Internal Revenue Code.
3.2. Excess Deferrals
(a) Distribution of Excess Deferrals. Notwithstanding any
other provision of the Plan, Excess Deferrals and income
allocable thereto shall be distributed no later than each April
15 to Participants following the end of the Plan Year during
which such Excess Deferral occurred. A distribution pursuant
to this Section 3.2(a) of Excess Deferrals and income, gains,
and losses allocable thereto shall be made without regard to
any consent otherwise required under any other provision of the
Plan. A distribution pursuant to this Section 3.2(a) of Excess
Deferrals and income, gains and losses allocable thereto shall
not be treated as a distribution for purposes of determining
whether the distribution required by Section 6.4(d) is
satisfied. Any distribution under this Section 3.2(a) of less
than all the Excess Deferrals and income, gains, and losses
allocable thereto shall be treated as a pro rata distribution
of the Excess Deferrals and income, gains, and losses allocable
thereto. In no case may an Employee receive from the Plan as a
corrective distribution for a taxable year under this Section
3.1(a) an amount in excess of the individual's total Elective
Contributions under the Plan for the taxable year.
(b) Income, Gains and Losses Allocable to Excess Deferrals
(i) Adjustments. The Excess Deferrals distributed to a
Participant with respect to a calendar year shall
be adjusted for income, gains, and losses. The
income, gains and losses allocable to the Excess
Deferrals are equal to the sum of the allocable
gain or loss for the taxable year of the individual
as described in Section 3.2(b)(ii) below and the
allocable gain or loss for the period between the<PAGE>
PAGE 4
end of the taxable year and the date of
distribution as described in Section 3.2(b)(iii)
below. Notwithstanding the foregoing, income
allocable to Excess Deferrals may be calculated by
any other method permitted by Treas. Reg. Section
1.402(g)-1(e)(5).
(ii) Calculation of Gain or Loss For Tax Year. The gain
or loss allocable to the Excess Deferrals for the
taxable year of the individual is determined by
multiplying the income for the taxable year of the
individual is determined by multiplying the income
for the taxable year of the individual allocable to
his or her Elective Deferrals by a fraction. The
numerator of the fraction is the Excess Deferral
made by the Employee for the taxable year. The
denominator of the fraction is the total Elective
Deferral Account of the Employee as of the end of
the taxable year, reduced by the gain allocable to
such total amount for the taxable year and
increased by the loss allocable to such total
amount for the taxable year.
(iii) Calculation of Gain or Loss for Gap Period. The
gain or loss allocable to the Excess Deferrals for
the period between the end of the taxable year and
the date of distribution is equal to ten percent
(10%) of the income allocable to the Excess
Deferrals for the taxable year (as calculated under
Subsection (b)(ii) above) multiplied by the number
of calendar months that have elapsed since the end
of the taxable year. For purposes of determining
the number of calendar months that have elapsed, a
distribution occurring on or before the fifteenth
(15th) day of the month will be treated as having
been made on the last day of the preceding month,
and a distribution occurring after such fifteenth
(15th) day will be treated as having been made on
the first (1st) day of the next month.
(c) Coordination of Excess Deferrals with Distribution of
Excess Contributions.
The Excess Deferrals which may be distributed under Section
3.2(a) with respect to an Employee for a taxable year shall be
reduced by any Excess Contributions previously distributed with
respect to such Employee for the Plan Year beginning with or
within such taxable year. In the event of a reduction under
this Section 3.2(c), the amount of Excess Contributions
included in the gross income of the Employee and reported by
the Employer as a distribution of Excess Contributions shall be
reduced by the amount of the reduction under this Section<PAGE>
PAGE 5
3.2(c).
3.3 Actual Deferral Percentage Limitation - Excess Contributions.
(a) Limitation. The Plan Administrator shall periodically review
the Elective Deferrals made by Participants during the Plan
Year and ensure that one of the following tests is met for each
Plan Year as required by Code Section 401(k):
(i) Alternative 1. The actual deferral percentage of the
Elective Deferrals of the Highly Compensated Employees
who are Eligible Employees is not more than 1.25 times
the actual deferral percentage of the Elective Deferrals
for all other Eligible Employees; or
(ii) Alternative 2. The actual deferral percentage of the
Elective Deferrals for the Highly Compensated Employees
who are Eligible Employees is not more than 2.0 times the
actual deferral percentage of the Elective Deferrals for
all other Eligible Employees and the actual deferral
percentage of the Elective Deferrals for the Highly
Compensated Employees who are Eligible Employees does not
exceed the actual deferral percentage of the Elective
Deferrals for all other Eligible Employees by more than
two (2) percentage points.
To the extent that the Elective Deferrals of Highly Compensated
Employees who are Eligible Employees for the Plan Year exceed
the maximum Elective Deferrals permitted under the foregoing
limitations, the Plan has "Excess Contributions" which must be
corrected as provided below.
(b) Reduction in Elective Deferrals. The Administrator shall have
the responsibility of determining on a continuing basis the
extent, if any, to which these nondiscrimination tests may not
be passed. If in the unlimited discretion of the Administrator
it is determined that a reduction of the Elective Deferrals by
such Highly Compensated Employees will be required in order to
comply with the nondiscrimination tests, Elective Deferrals
with respect to the Highly Compensated Employees may be reduced
in one percent (1%) increments, commencing with Elective
Deferrals of fifteen percent (15%). If reduction of such
Elective Deferrals from 15% to 14% is insufficient to satisfy
the requirements of the nondiscrimination tests, the Elective
Deferrals of all Highly Compensated Employees which are 14%
will be reduced to 13%. Subsequent reductions of one percent
(1%) will be made in the Elective Deferrals of all Highly
Compensated Employees at each successive percentage level until
it is determined by the Administrator, in its discretion, that
the Plan will satisfy the requirements of the nondiscrimination
tests. Each reduction at that level will apply to all Highly
Compensated Employees at that level regardless of whether their<PAGE>
PAGE 6
Elective Deferral percentage has been reduced from higher
levels. If any Highly Compensated Employee is a participant
under two or more cash or deferred arrangements of the
Employer, for purposes of determining the Elective Deferral
percentage with respect to such Employee, all such cash or
deferred arrangements shall be treated as one cash or deferred
arrangement.
(c) Correction of Excess Contributions. The Plan Administrator may
cause Excess Contributions and income allocable thereto to be
distributed to the Participants on whose behalf such Excess
Contributions were made for the preceding Plan Year. The Plan
Administrator shall distribute the Excess Contributions no
later than two and one-half (2 1/2) months following the end of
any Plan Year. The actual deferral ratio (See Code Section
401(k)(3)(B)) of the Highly Compensated Employee with the
highest actual deferral ratio will be reduced to the extent
required to equal the lesser of:
(i) The amount which enables the Plan to satisfy the actual
deferral percentage maximum determined under Section
3.3(a); or
(ii) The amount which causes such Highly Compensated
Employee's actual deferral ratio to equal the ratio of
the Highly Compensated Employee with the next highest
actual deferral ratio.
The reduction process will be repeated until the Plan satisfies
the actual deferral percentage limit of Section 3.3(a). For
each Highly Compensated Employee, the amount of Excess
Contributions is equal to the Employee's Elective Deferral
(determined before application of this subsection) minus the
amount determined by multiplying the Employee's actual deferral
ratio (determined after application of this subsection) by his
or her Eligible Compensation used in determining such
percentage. In no case shall the amount of Excess
Contributions for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Elective Deferrals
made on behalf of such Highly Compensated Employee for the Plan
Year.
(d) General Rules. In applying the tests under this Section 3.3,
the Administrator shall be governed by the following rules:
(i) Plan Aggregation. Two or more cash or deferred
arrangements may be considered as a single plan for
purposes of determining whether or not such plans satisfy
Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such
plans and the plans including such arrangements shall be
treated as one arrangement and as one plan for purposes<PAGE>
PAGE 7
of this Section 3.3 and Code Sections 401(a)(4), 410(b)
and 401(k). If the Employer maintains two or more plans
that are treated as a single plan for purposes of Code
Sections 401(a)(4) or 410(b) (other than Code Section
410(b((2)(A)(ii)), all cash or deferred arrangements
included in such plans, employee contributions, and
matching contributions shall be treated as a single
arrangement for purposes of Code Sections 401(a)(4),
410(b) and 401(k).
(ii) Highly Compensated Participants Eligible Under More Than
One Arrangement. The actual deferral ratio of
Participants who are Highly Compensated Employees is
calculated by treating all of the cash or deferral
arrangements for which such employees are eligible as one
cash or deferred arrangement pursuant to Treas. Reg.
Section 1.401(k)-1(g)(8).
(iii) Family Aggregation Rules. The family aggregation rules
set forth in Code Section 414(q)(6) shall apply in
calculating the average deferral ratio of Highly
Compensated Employees. Under these rules, the family
group shall be treated as one Highly Compensated Employee
and the actual deferral ratio for the family group shall
be the greater of:
a. The ratio determined by combining the Eligible
Compensation and Elective Deferrals of all eligible
family members who are highly compensated without
regard to family aggregation; and
b. The ratio determined by combining the Eligible
Compensation and Elective Deferrals Contributions
of all eligible family members.
In all respects, the determination and correction of
Excess Contributions of a Highly Compensated Employee and
his or her family members shall be calculated in
accordance with Treas. Reg. Section 1.401(k)-1(f)(5)(ii)
and 1.401(k)-1(g)(1)(ii)(C).
(e) Distributions. A distribution of Excess Contributions and
income, gains, and losses allocable thereto shall be made
without regard to any consent otherwise required under any
other provision of the Plan. A distribution pursuant to
Section 3.3 of Excess Contributions and income, gains and
losses allocable to Excess Contributions shall not be treated
as a distribution for purposes of determining whether the
distribution required by Section 6.4(d) is satisfied. Any
distribution under Section 3.3 of less than all Excess
Contributions and income, gains, and losses allocable to Excess
Contributions shall be treated as a pro rata distribution of<PAGE>
PAGE 8
Excess Contributions and income, gains, and losses allocable
thereto. In no case shall excess Contributions for a Plan Year
remain unallocated or be allocated to any suspense account for
allocation to one or more employees to any future Plan Year.
(f) Income, Gains and Losses Allocable to Excess Contributions
(i) Adjustments. The Excess Contributions distributed to a
Participant with respect to a Plan Year shall be adjusted
for income, gains, and losses. The income, gains, and
losses allocable to Excess Contributions for purposes of
this Section 3.3(f) are equal to the sum of the allocable
gain or loss for the Plan Year described in Subsection
(f)(ii) below, and the allocable gain or loss for the
period between the end of the Plan Year and the date of
distribution described in Subsection (f)(iii) below.
Notwithstanding the foregoing, income allocable to Excess
Contributions may be calculated pursuant to any other
method permitted by Treas. Reg. Section 1.401(k)-1(f)(4).
(ii) Calculation of Gain or Loss Allocable to Excess
Contributions. The gain or loss allocable to Excess
Contributions for the Plan Year is determined by
multiplying the income for the Plan Year allocable to
Elective Deferrals by a fraction. The numerator of the
fraction is the Excess Contribution by the Employee for
the Plan Year. The denominator of the fraction is the
total Account balance of the Employee attributable to
Elective Deferrals as of the end of the Plan Year,
reduced by the gain allocable to such total amount for
the Plan Year and increased by the loss allocable to such
total amount for the Plan Year.
(iii) Calculation of Allocable Gain or Loss for Gap Period.
The gain or loss allocable to Excess Contributions for
the period between the end of the Plan Year and the
distribution date is equal to 10 percent of the income
allocable to Excess Contributions for the plan Year (as
calculated under Subsection 3.3(f)(I) above) multiplied b
the number of calendar months that have elapsed since the
end of the Plan Year. For purposes of determining the
number of calendar months that have elapsed, a
distribution occurring on or before the fifteenth (15th)
day of the month will be treated as having been made on
the last day of the preceding month, and a distribution
occurring after such fifteenth (15th) day will be treated
as having been made on the first day of the next month.
(g) Coordination of Excess Contributions With Distribution of
Excess Deferrals.
(i) The amount of Excess Contributions to be determined under<PAGE>
PAGE 9
Section 3.3(c) with respect to a Highly Compensated
Employee for a Plan Year shall be reduced by any Excess
Deferral amount previously distributed in accordance with
Section 3.2(c) to such Participant for the Participant's
taxable year end with or within such Plan Year.
(ii) The Excess Deferrals that may be distributed under
Section 3.2(c) with respect to an Employee for a taxable
year shall be reduced by any Excess Contributions
previously distributed with respect to such Employee for
the Plan Year beginning with or within such taxable year.
In the event of a reduction under this Section
3.3(g)(ii), the amount of Excess Contributions included
in the gross income of the Employee and the amount of
Excess Contributions reported by the Employer as
includable in the gross income of the Employee shall be
reduced by the amount of the reduction under this Section
3.3(g)(ii).
3.4. Change in Elective Deferrals -- Except as provided in Section
3.3, any Participant may change his or her Elective Deferral percentage by
notifying Fidelity, such changes to take effect as of the next designated
Entry Date in accordance with the Administrator's rules then in effect.
3.5. Voluntary Reduction of Elective Deferral to Zero --
Notwithstanding the notice requirements specified in Section 3.4, any
Participant may elect to reduce the level of the Participant's Elective
Deferral to zero as of the beginning of any pay period. The reduction will
take effect as soon as practicable following telephone notification by the
Participant to Fidelity. A Participant who has reduced his or her Elective
Deferral to zero may again make Elective Deferrals as of any Entry Date in
accordance with the Administrator's rules then in effect, by telephone
notification to Fidelity.
3.6. Rollover Contributions -- Participants may transfer into the
Plan qualifying rollover amounts (as defined in Section 402 of the Code)
received from other qualified plans subject to Section 401(k) or Section
401(m) of the Code; annuity accounts under Section 403(b) of the Code;
qualified defined contribution pension or profit sharing plans, provided
that no federal income tax has been required to have been paid previously
on such amounts; or rollover contributions from an individual retirement
account described in Section 408(d)(3)(A)(ii) of the Code (referred to
herein as a "conduit IRA"). Such transfers will be referred to as
"rollover contributions" and will be subject to the following conditions:
(i) the transferred funds are received by the Trustee no later than
sixty (60) days from receipt by the Employee of a distribution
from another qualified Section 401(k) or Section 401 (m) plan
or, in the event that the funds are transferred from a conduit
IRA, no later than sixty (60) days from the date that the
Participant receives such funds from the individual retirement
account, subject, however, to (v) below where applicable;<PAGE>
PAGE 10
(ii) the amount of such rollover contributions shall not exceed the
limitations set forth in Section 402 of the Code;
(iii) rollover contributions shall be taken into account by the
Administrator in determining the Participant's eligibility for
a loan pursuant to Article VII;
(iv) rollover contributions may be distributed at the request of the
Participant, subject to the same administrative procedures as
apply to other distributions;
(v) rollover contributions may not be received by the Trustee
earlier than the Entry Date upon which the Participant elects
to join the Plan;
(vi) rollover contributions transferred pursuant to this paragraph
(b) of Section 3.6 shall be credited to the Participant's
Rollover Contribution Account. Rollover contributions will be
invested upon receipt by the Trustee;
(vii) no rollover contribution will be accepted unless (A) the
Employee on whose behalf the rollover contribution will be made
is either a Participant or has notified the Administrator that
he intends to become a Participant on the first date on which
he is eligible therefor; and (B) all required information,
including selection of specific investment accounts, is
provided to Fidelity. When the rollover contribution has been
deposited, any further change in investment allocation of
future deferrals or transfer of account balances between
investment funds will be effected through the procedures set
forth in Sections 4.2 and 4.3.
(viii) under no circumstances shall the Administrator accept as a
rollover contributions amounts which have previously been
subject to federal income tax.
3.7. Transfers from Qualified Plans
(a) A Participant may roll over to this Plan the amount of an
eligible rollover distribution (as defined in Section 402 of
the Code) received from any other qualified employees' trust or
annuity provided that such amount is not subject to the annuity
requirements of Code Sections 401(a)(11) and 417. In addition,
in the case of a Participant who, prior to his employment by
the Employer, was a participant in a qualified employees' trust
or annuity maintained by a former or predecessor employer, the
Trustee is authorized to receive, in a direct transfer fro the
trustee, custodian, or other fiduciary of such other plan
(hereafter "trustee-to-trustee"), assets, in cash or in kind,
representing the amount of such Participant's interest in the
qualified employees' trust or annuity of the former or
predecessor employer.<PAGE>
PAGE 11
(b) A transfer under Subsection (a) by an Eligible Employee who has
not yet become a Participant shall be accepted only if the
Eligible Employee completes (except for an Elective Deferral
percentage) and executes an Enrollment Agreement and transmits
it to Fidelity.
(c) Amounts in a Participant's Rollover Contribution Account shall
be invested pursuant to the Participant's election in force at
the time of the rollover. Notwithstanding the foregoing, if
all or any portion of a Participant's Rollover Contribution
Account is directed by the Participant to be invested in Fund B
and such investment direction cannot immediately be followed to
invest in the fixed income fund designated as Fund B due to
restrictions contained in the investment contract or otherwise
imposed by the insurance company or other entity providing the
fixed income fund, then the Administrator shall direct that
such amount be invested in a separate account with similar
investment objectives as Fund B. Such funds shall be held in
such separate account until the first day of the following Plan
Year, or until an earlier date, if any, following which a
transfer can legally be made, at which time such funds shall be
transferred to the fixed income fund designated as Fund B.
ARTICLE IV - INVESTMENT OF ACCOUNTS
4.1. Election of Investment Options -- Upon enrollment in the Plan,
each Participant shall direct that the funds in the Participant's Account
be invested in increments of ten percent (10%) in one or more of the
following investment options:
Fund A - an equity fund designated by the Administrator;
Fund B - a fixed income fund designated by the Administrator;
Fund C - Raytheon Company common stock fund;
Fund D - a stock index fund designated by the Administrator,
Fund E - a balanced fund designated by the Administrator.
In its discretion, the Administrator may from time to time designate
new funds and, where appropriate, preclude investment in existing
funds and provide for the transfer of Accounts invested in those
funds to other funds selected by the Participant or, if no such
election is made, to Fund B or similar low risk fixed income fund as
determined by the Administrator in its discretion.
In the event that a Participant fails to designate the investment
option for 100% of the Participant's account or erroneously
designates the investment of more than 100%, the investment designa-
tion will be a nullity and the Enrollment Agreement will be returned
to the Eligible Employee. If the Enrollment Agreement is corrected<PAGE>
PAGE 12
and returned, enrollment will not be effective until the next Entry
Date with respect to which the notice requirements set forth in
Section 2.3 are satisfied. Officers covered by Securities and
Exchange Commission Regulation 16b will not be eligible to elect
Fund C, the Raytheon common stock fund, until such election is
approved by the shareholders of Raytheon Company. Any request to
invest in or transfer out of the Raytheon Common Stock Fund by an
"executive officer," as that term is defined in the regulations of
the Securities Exchange Commission (SEC), shall not become effective
until six (6) months subsequent to the date the Administrator is
notified of the request.
4.2. Change in Investment Allocation of Future Deferrals -Each
Participant may elect to change the investment allocation of future
Elective Deferrals effective as of the Entry Dates in January, April, July
or October, or such other months as may be specified under the
Administrator's rules then in effect, by providing telephone notice to
Fidelity. Any changes must also be made in ten percent (10%) increments
and must result in a total investment of one hundred percent (100%) of the
Participant's Account.
4.3. Transfer of Account Balances Between Investment Funds -- Each
Participant may elect to transfer all or a portion of the amount in the
Participant's Account between investment funds effective as of the Entry
Dates in January, April, July or October of each year or such other months
as may be designated in the Administrator's rules then in effect. Such
transfers must be made in ten percent (10%) increments of the entire
Account as of the completion of the transfer and must result in investment
of one hundred percent (100%) of the Account. Transfers shall be effected
by telephone notice to Fidelity.
4.4. Ownership Status of Funds -- The Trustee shall be the owner of
record of the assets in the funds specified as Funds A, B, C, D and E. The
Administrator shall have records maintained as of the Valuation Date for
each fund allocating a portion of the fund to each Participant who has
elected that his or her Account be invested in such fund. The records
shall reflect each Participant's portion of Funds A, B, D and E in a cash
amount and shall reflect each Participant's portion of Fund C in shares of
stock and cash.
4.5. Voting Rights -- Participants whose Accounts have shares of
participation in the Raytheon Company Common Stock Fund on the last
business day of the second month preceding the record date (the "Voting
Eligibility Date") for any meeting of stockholders have the right to
instruct the Trustee as to voting at such meeting. The number of votes is
determined by dividing the value of the shares in the Participant's Account
in the Raytheon Common Stock Fund by the closing price of Raytheon Common
Stock on the Voting Eligibility Date. If the Trustee has not received
instructions from a Participant as to voting of shares within a specified
time, then the Trustee shall not vote those shares. If a Participant
furnishes the Trustee with a signed vote direction card without indicating
a voting choice thereon, the Trustee shall vote Participant's shares as<PAGE>
PAGE 13
recommended by management. In addition, each Participant shall have the
right to accept or reject any tender or exchange offer for shares of common
stock. The Trustee shall vote (or tender or exchange) all combined
fractional shares of Raytheon Common Stock to the extent possible in the
same proportion as the shares which have been voted (or tendered or
exchanged) by each Participant. Any instructions as to voting (or tender
or exchange) received from individual Participants shall be held in
confidence by the Trustee and shall not be divulged to the Companies or to
any officer or employee thereof or to any other person.
ARTICLE V - VESTING
5.1. Vesting Status -- Each Participant shall have a Nonforfeitable
right to any amounts in the Participant's Account.
ARTICLE VI - WITHDRAWALS AND DISTRIBUTIONS
6.1. In-Service Withdrawal - Account -- A Participant may withdraw
all or a portion of the Participant's Account upon attainment of age 59 1/2
or, except for earnings on Elective Deferrals made on or after January 1,
1989, for reasons of immediate and substantial financial need as defined in
Section 6.2. Withdrawals from the Accounts of less than $250 will not be
permitted. Withdrawals will be based upon the value of the Account as of
the date established by the Administrator through the application of a
uniform and equitable rule, and will be effected by telephone notice to
Fidelity. Payment of the amount withdrawn will be made as soon as
reasonably practicable after the effective date of the withdrawal.
Withdrawals from Funds A, B, D and E, and such other funds as may be
established by the Administrator, will be made in cash; withdrawals from
Fund C will be made in either cash or stock (with cash for fractional or
unissued shares) as elected by the Participant. Funds for the withdrawal
will be taken on a pro rata basis against the Participant's investment fund
balances in the Participant's Account.
6.2. Documentation Required For Financial Hardship Withdrawals -- A
Participant requesting a withdrawal of part or all of the Participant's
Account due to reasons of immediate and substantial financial need will be
required to submit such documentation or information in other form as
required by the Administrator and shall advise Fidelity by telephone notice
or such other means as established by the Administrator's rules then in
effect the amount and type of the financial need and shall represent that
the amount of the withdrawal does not exceed the financial need. The
Participant shall also represent that this financial need cannot be
satisfied by any of the following sources: through reimbursement or
compensation by insurance or otherwise; by reasonable liquidation of the
Participant's assets; by cessation of Elective Deferrals under the Plan; or
by other distributions or loans from plans maintained by the Employer or by
any other employer, or by borrowing from commercial sources on reasonable
commercial terms. For purposes of Section 6.1, "immediate and substantial
financial need" is limited to financial need arising from the following
specific causes: medical expenses incurred by the Participant, the
Participant's spouse or any dependents of the Participant; purchase<PAGE>
PAGE 14
(excluding mortgage payments) of a principal residence for the Participant;
payment of tuition for the next semester or quarter of post-secondary
education for the Participant, the participant's spouse, or dependents; to
prevent the eviction from or foreclosure on Participant's principal
residence; or any other circumstances, as determined by the Administrator
based upon all the relevant facts, establishing substantial justification
for the withdrawal.
6.3. Suspension of Elective Deferrals for Financial Hardship
Withdrawals -- If a Participant's application for a hardship withdrawal is
approved and the withdrawal effected, Participant's Elective Deferrals
will be suspended for a period of one year from the date of withdrawal.
Thereafter, Elective Deferrals shall be in the same amount and with the
same investment options as in effect prior to the withdrawal unless notice
by telephone or in writing giving other instructions is received by
Fidelity prior to the expiration of the one-year period from the
withdrawal.
6.4. Redeposits Prohibited -- No amount withdrawn pursuant to
Sections 6.1 or 6.5 may be redeposited in the Plan.
6.5. Distribution --
(a) Distribution of the Participant's Account will be made upon the
Retirement, Disability (as defined in Section 14.11), death,
Severance from Service (as defined in Section 14.38), or Layoff
(as defined in Section 14.23) of the Participant; or, to an
alternate payee, upon issuance of a Qualified Domestic
Relations Order (as defined in Section 414(p) of the Internal
Revenue Code and the Retirement Equity Act). In the event of
the death of a Participant, the distribution shall be made to
the Participant's Beneficiary. The standard form of
distribution will be a lump sum distribution of the entire
amount in the Participant's Account, or of the amount specified
in a Qualified Domestic Relations Order which will be paid as
soon as practicable following notification to Fidelity of the
Retirement, death, Disability or Severance from Service.
Distribution of the amounts in said accounts in the funds
designated in Fund A, Fund B, Fund D and Fund E, and such other
funds as may be established by the Administrator, in Section
4.1 will be made in cash. Distribution of any amount in said
accounts in Fund C (Raytheon Company stock) will be made in
either cash or, if elected by the Participant or, in the case
of death, the Participant's Beneficiary, stock. Retiring
Participants and Beneficiaries of deceased Participants may
elect to defer the entire amount of the lump sum distribution
to January of the year following the date of Retirement or
death. Partial deferrals will not be permitted. If there is no
Beneficiary surviving a deceased Participant at the time
payment of a Participant's Account is to be made, such payment
shall be made in a lump sum to the person or persons in the
first following class of successive Beneficiaries surviving,<PAGE>
PAGE 15
any testamentary devise or bequest to the contrary
notwithstanding: the Participant's (i) spouse, (ii) children
and issue of deceased children by right of representation,
(iii) parents, (iv) brothers and sisters and issue of deceased
brothers and sisters by right of representation, or (v)
executors or administrators. If no Beneficiary can be located
during a period of seven (7) years from the date of death, the
amount of the distribution shall revert to the Trust.
(b) In the event that upon a Participant's Severance From Service
Date the Participant's Account exceeds Thirty-Five Hundred
Dollars ($3,500), the Participant shall have the option of not
receiving an immediate distribution of the Account.
Participant's Account will be distributed in its entirety upon
the earlier of Participant's attainment of Normal Retirement
Age or receipt by Fidelity of a request for a final
distribution.
(c) Except as provided by Section 401(a)(9) of the Code as set
forth in this Section, benefits in the Plan will be distributed
to each Participant not later than the sixtieth (60th) day
after the close of the Plan Year in which the latest of the
following events occurs:
(1) attainment by the Participant of Normal Retirement Age;
(2) the tenth (10th) anniversary of the date on which
Participant commenced participation in the Plan; or
(3) Participant's Severance from Service.
If the amount of the benefit payable to a Participant has not
been ascertained by the sixtieth (60th) day after the close of
the Plan Year in which the latest of the three events described
in clauses (1), (2) and (3) above occurred, or Participant
cannot be located after reasonable efforts to do so, then
payment retroactive to said sixtieth (60th) day after the close
of the Plan Year in which the latest of the three events
occurred may be made no later than sixty (60) days after the
later of the earliest date on which the amount of such payment
can be ascertained under the Plan or the earliest date on which
the Participant is located.
(d) In any event, as required by Section 401(a)(9) of the Code,
distribution of a Participant's benefit will be made no later
than April 1 of the calendar year following the year in which
the Participant attains age 70 1/2.
(e) In the event that the Plan is determined to be a direct or
indirect transferee of either a defined benefit plan or a
defined contribution plan subject to the funding standards of
Section 412 of the Code, the Surviving Spouse of a Participant<PAGE>
PAGE 16
who dies with an Account in the Plan shall have the option of
electing a qualified pre-retirement survivor annuity in lieu of
the standard form of distribution.
6.6. Withdrawal/Distribution - Executive Officers -- No withdrawal
by or distribution to an "executive officer, as that term is defined by the
SEC, from an Account in the Raytheon Common Stock Fund will be effective
until the expiration of six (6) months from the date the Administrator
receives the request for the withdrawal or distribution.
ARTICLE VII - LOANS
7.1. Availability of Loans - Participants may borrow against all or
a portion of the balance in the Participant's Account subject to the
limitations set forth in this Article.
7.2. Minimum Amount of Loan - No loan of less than $500 will be
permitted.
7.3. Maximum Amount of Loan - No loan in excess of fifty percent
(50%) of a Participant's Account balance will be permitted. In addition,
limits imposed by the Internal Revenue Code ("Code") and any other
requirements of applicable statute or regulation will be applied. Under
the current requirements of the Internal Revenue Code, if the value of a
Participant's Account exceeds $20,000, the loan cannot exceed the lesser of
one-half (1/2) the value or $50,000 reduced by the excess of (a) the
highest outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which such loan was made over
(b) the outstanding balance of loans from the Plan on the date on which
such loan was made.
7.4. Effective Date of Loans -- Loans will be effective as specified
in the Administrator's rules then in effect.
7.5. Repayment Schedule - The Participant may select a repayment
schedule of 1, 2, 3, 4 or 5 years. If the loan is used to acquire any
dwelling which, within a reasonable time is to be used (determined at the
time the loan is made) as the principal residence of the Participant, the
repayment period may be extended up to 15 years at the election of the
Participant. All repayments will be made through payroll deductions in
accordance with the loan agreement executed at the time the loan is made.
The loan agreement will permit repayment of the entire outstanding balance
in one lump sum. The minimum repayment amount per pay period is $25. The
repayment schedule shall provide for substantially level amortization of
the loan. Repayments for Participants in a Period of Service but on an
Authorized Leave of Absence shall be made in accordance with procedures
established by the Administrator.
7.6. Limit on Number of Loans -- No more than two loans may be
outstanding at any time.
7.7. Interest Rate -- The interest rate for a loan pursuant to this<PAGE>
PAGE 17
Article will be equal to the prime rate published in The Wall Street
Journal on the first business day in June and December of each year. The
rate published on the first business day in June will apply to loans which
are effective on the last day of the months June through November; the rate
published on the first business day of December will apply to loans which
are effective on the last day of the months of December through May.
7.8. Effect Upon Participant's Account -- Upon the granting of a
loan to a Participant by the Administrator, the allocations in the
Participant's Account to the respective investment funds will be reduced on
a pro rata basis and replaced by the loan balance which will be designated
as an asset in the Account. Upon repayment of the principal and interest,
the loan balance will be reduced, and the respective investment funds will
be increased in accordance with the investment election then in effect.
7.9. Effect of Severance From Service and Non-Payment -- In the
event that a loan remains outstanding upon the Retirement, death or
Severance from Service of a Participant, the amount of any unpaid principal
will be deducted from the distribution made to the Participant. If, as a
result of Layoff or Authorized Leave of Absence, a Participant, although
still in a Period of Service, is not being compensated through the
Employer's payroll system, loan payments will be suspended until the
earliest of the first pay date after Participant returns to active
employment, the Participant's Severance from Service Date, or the
expiration of twelve (12) months from the date of the suspension, at which
time the outstanding principal of any unpaid loan will be deducted from the
distribution made to the Participant. In such event the unpaid principal
and interest will be deducted from the Participant's Account and any
remaining balance in said Account will be paid to the Participant if the
Participant incurs a Severance from Service or requests in writing payment
of such balance.
ARTICLE VIII - LIMITATIONS OF SECTION 415 OF THE CODE
8.1. Maximum Permissible Amount of a Participant's Annual Addition -
- Notwithstanding any other provision of this Plan, the Maximum Permissible
Amount of a Participant's Annual Addition under this Plan means the lesser
of $30,000 (or beginning January 1, 1986, such larger amount determined by
the Commissioner of the Internal Revenue Service) or twenty-five percent
(25%) of the Participant's compensation for the Limitation Year. For
purposes of this Article VIII, compensation is defined as the Participant's
wages, salaries, fees for professional services, and other amounts received
for personal services actually rendered in the course of employment with
the Employer (including but not limited to sales commissions, compensation
for services on the basis of a percentage of profits, tips, and bonuses),
excluding all items listed in subparagraph (2) of Paragraph (d) of 26 CFR
Section 1.415-2. If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12-consecutive-month
period, the Maximum Permissible Amount for the short Limitation Year will
be the lesser of (1) $30,000 (or such larger amount determined by the
Commissioner of Internal Revenue or by statute) multiplied by the following
fraction:<PAGE>
PAGE 18
number of months in the
short Limitation Year
-----------------------
12
or (2) twenty-five percent (25%) of the Participant's compensation for the
short Limitation Year.
8.2. Coordination of Annual Additions -- Notwithstanding any other
provision of this Plan, if any Annual Additions are allocated under other
qualified defined contribution plans maintained by the Employer with
respect to a Participant of this Plan, and the Participant's Elective
Deferral that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount specified in
Section 8.1, the amount contributed or allocated will be reduced so that
the Annual Additions under all such plans for the Limitation Year will
equal said Maximum Permissible Amount. If the Annual Additions with
respect to the Participant under such other qualified defined contribution
plans in the aggregate are equal to or greater than the Maximum Permissible
Amount, as specified in Section 8.1, any amount contributed or allocated to
the Participant's account for the Limitation Year will be treated as an
Excess Amount.
8.3. Coordination with Limitation on Benefit from All Plans --
Notwithstanding the foregoing, the otherwise permissible Annual Addition
under this Plan for any Participant may be further reduced to the extent
necessary, as determined by the Administrator, to prevent disqualification
of the Plan under Section 415 of the Internal Revenue Code, which imposes
the following additional limitations on the benefits payable to
Participants who also may be participating in another tax qualified
pension, profit sharing, savings, or stock bonus plan of the Employer: If
an individual is a Participant at any time in both a defined benefit plan
and a defined contribution plan maintained by the Employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction
for any Limitation Year may not exceed 1.0. The defined benefit plan
fraction for any Limitation Year is a fraction, the numerator of which is
the Participant's projected annual benefit under the Plan (determined at
the close of the Limitation Year) and the denominator of which is the
lesser of:
(a) 1.25 (1.0 during any Plan Year in which the Plan has been
determined under Section 9.3 of Article IX to be top heavy) times the
dollar limitation in effect for that Limitation Year, or
(b) 1.4 times the compensation limitation for that Limitation
Year.
The defined contribution plan fraction for any Limitation Year is a
fraction, the numerator of which is the sum of the Annual Additions to the
Participant's accounts in such Limitation Year and all prior Limitation
Years and the denominator of which as of the end of a Limitation Year is<PAGE>
PAGE 19
the sum of the defined contribution increments for that year and all prior
Limitation Years. For each Limitation Year, the defined contribution
increment is the lesser of 1.25 (1.0 during any Plan Year in which the Plan
has been determined under Section 9.3 of Article IX to be top heavy) times
the dollar limitation for that year, or 1.4 times the compensation
limitation for that year. For purposes of this limitation, all defined
benefit plans of the Employer whether or not terminated, are to be treated
as one defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, are to be treated as one defined
contribution plan.
ARTICLE IX - LIMITATIONS OF SECTION 416 OF THE CODE
9.1. General Rule -- In the event that the Plan becomes top
heavy with respect to a Plan Year commencing on or after January 1, 1988,
the provisions of this Article shall apply.
9.2. Definitions -
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during
the determination period was an office of the Employer,
an owner (or considered an owner under Section
415(c)(1)(A) of the Code) of one of the ten largest
interests in the Employer if such individual's
compensation exceeds 150 percent of the dollar limitation
under Section 415(c)(1)(A) of the Code, a five percent
(5%) owner of the Employer, or a one percent (1%) owner
of the Employer who has an annual compensation of more
than $150,000. The determination period of the Plan is
the Plan Year containing the determination date and the
four (4) preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Section
416(i)(1) of the Code and the regulations thereunder.
(b) Non-Key Employee: Any Employee who is a Key Employee.
(c) Top-Heavy Ratio:
(i) If the Employer maintains one or more defined
benefit plans and the Employer has never maintained any
defined contribution plans (including any simplified
employee pension plan) which has covered or could cover a
Participant in this Plan, the Top-Heavy Ration is a
fraction, the numerator of which is the sum of the
present value of accrued benefits of all Key Employees as
of the determination date (including any part of any
accrued benefit distributed in the five-year period
ending on the determination date), and the denominator of
which is the sum of all accrued benefits (including any
part of any accrued benefit distributed in the five-year
period ending on the determination date) of all<PAGE>
PAGE 20
Participants as of the determination date.
(ii) If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer maintains or has
maintained one or more defined benefit plans which have
covered or could cover a Participant in this Plan, the
Top-Heavy Ratio is a fraction, the numerator of which is
the sum of account balances under the defined
contribution plans for all Key Employees and the present
value of accrued benefits under the defined benefit plans
for all Key Employees, and the denominator of which is
the sum of the account balances under the defined
contribution plans for all Participants and the present
value of accrued benefits under the defined benefit plans
for all Participants. Both the numerator and denominator
of the Top-Heavy Ratio are adjusted for any distribution
of an account balance or an accrued benefit made in the
five-year period ending on the determination date and any
contribution due but unpaid as of the determination date.
(iii) For purposes of (i) and (ii) above, the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
valuation date that falls within or ends with the 12-
month period ending on the determination date. The
account balances and accrued benefits of a Participant
who is not a Key Employee but who was a Key Employee in a
prior year will be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be
made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible Employee
contributions will not be taken into account for purposes
of computing the Top-Heavy Ratio. When aggregating
plans, the value of account balances and accrued benefits
will be calculated with reference to the determination
dates that fall within the same calendar year.
(d) Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the
Employer which, when considered as a group with the
required aggregation group would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required aggregation group: (i) Each qualified plan of
the Employer in which at least one Key Employee
participates, and (ii) any other qualified plan of the
Employer which enables a plan described in (i) to meet
the requirements of Sections 401(a)(4) and 410 of the
Code.<PAGE>
PAGE 21
(f) Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year.
For the first Plan Year of the Plan, the last day of that
year.
(g) Valuation date: The last day of each Plan Year.
(h) Present Value: Present Value shall be based only on the
interest rate used by the Administrator to determine com-
pliance with the funding requirements under the
Retirement Act and the mortality rates specified on an
appropriate current unisex table.
9.3. Determination as to Whether the Plan is Top Heavy -The
Administrator shall determine whether the Plan is top heavy within the
meaning of Section 416 and, if at the time of such determination Key
Employees, as defined in Section 416(i) of the Code, are participants in
other plans of the Employer or other plans of the Employer enable a plan
of the Employer in which a Key Employee is a participant to meet the
requirements of Section 401(a)(4) or Section 410, then such plans will be
included with this Plan in an aggregation group. The Plan or the group
shall be top heavy if, as of the last day of the preceding Plan Year (the
"determination date"), the aggregate value of the Accounts of Key Employees
as defined in Section 416(i) of the Code under the Plan or group exceeds
sixty percent (60%) of the aggregate value of the Accounts of all other
Participants of the Plan or group. For purposes of this Section, the value
of Accounts shall include the value of any distributions made with respect
to the Participant during the five-year period ending on the determination
date. The initial determination date shall be the last day of the first
Plan Year (December 31, 1984), based on the valuation of Accounts as of
that date.
9.4. Minimum Contribution -- For each Plan Year with respect to
which the Plan is top heavy, the minimum amount allocated under the Plan
and all other qualified defined contribution plans maintained by the
Employer for the benefit of each Participant who is not a Key Employee and
who is otherwise eligible for such an allocation shall be the lesser of:
(a) three percent (3%) of the non-key Participant's compensation
(within the meaning of Section 415 of the Code) for the Plan
Year, or
(b) the non-key Participant's compensation (as defined in Section
415 of the Code) times a percentage equal to the largest
percentage of such compensation allocated under such plans with
respect to any Key Employee for the Plan Year.
This Section shall not apply to a Participant covered under a qualified
defined benefit plan maintained by the Employer if the Participant's vested
benefit thereunder satisfies the requirements of Section 416(c) of the
Code.<PAGE>
PAGE 22
9.5. Limitation on Pension Benefit -- For any Plan Year in which the
Plan is top-heavy, only the first $200,000 (or such larger amount as may be
prescribed by the Secretary of Treasury or his delegate) of each
Participant's annual compensation will be taken into account for purposes
of determining benefits under the Plan.
9.6. Accelerated Vesting --
(a) In the event that Section 5.2 is revised to impose more
restrictive vesting rules and the Plan subsequently becomes top
heavy, then for each Plan Year during which the Plan is top
heavy, the present vesting schedule in Section 5.2, or other
alternative schedule which complies with the requirements of
Section 416 of the Code will be placed into effect.
(b) In the event that an accelerated vesting schedule must be
placed in effect in accordance with subparagraph (a) of this
Section 9.4 and the Plan is later determined not to be top
heavy, no vesting schedule change shall be made which shall
have the effect of providing a benefit to an Employee less than
the Nonforfeitable percentage of the accrued benefit derived
from Employer Contributions as of the date of said vesting
schedule change pursuant to said subparagraph (a).
ARTICLE X - THE TRUST FUND
10.1. Trust Agreement -- During the period in which this Plan
remains in existence, the Employer or any successor thereto shall maintain
in effect a Trust Agreement with a corporate trustee as Trustee, to hold,
invest, and distribute the Trust Fund in accordance with the terms of such
Trust Agreement.
10.2. Investment of Accounts -- The Trustee shall invest and
reinvest the Participant's Accounts in investment options as defined in
Section 4.1 as directed by the Administrator or its delegate in writing.
The Administrator shall issue such directions in accordance with the
investment options selected by the Participants which shall remain in force
until altered in writing in accordance with Sections 4.2 and 4.3.
10.3. Expenses -- Expenses of the Plan and Trust shall be paid from
the Trust.
ARTICLE XI - ADMINISTRATION OF THE PLAN
11.1. General Administration -- The general administration of the
Plan shall be the responsibility of Raytheon Company (or any successor
thereto) which shall be the Administrator and Named Fiduciary for purposes
of the Retirement Act. The Company shall have the authority, in its sole
discretion, to construe the terms of the Plan and to make determinations as
to eligibility for benefits and as to other issues within the
"Responsibilities of the Administrator" described in Article XI, Section
11.2. All such determinations of the Company shall be conclusive and<PAGE>
PAGE 23
binding on all persons.
11.2. Responsibilities of the Administrator -- The Administrator
shall assign responsibility for performance of all necessary administrative
duties, including the following:
(a) Determination of all questions which may arise under the Plan
with respect to eligibility for participation and administration of
accounts, including without limitation questions with respect to
membership, loans, withdrawals, accounting, status of accounts, stock
ownership and voting rights, and any other issue requiring interpretation
or application of the Plan.
(b) Reference of appropriate issues to the Offices of the Vice
President - Controller, and the Vice President - Human Resources, of
Raytheon Company, respectively, for advice and counsel.
(c) Establishment of procedures required by the Plan, such as
notification to Employees as to joining the Plan, selecting and changing
investment options, suspending deferrals, exercising voting rights in
stock, withdrawing and borrowing account balances, designation of
beneficiaries, election of method of distribution, and any other matters
requiring a uniform procedure.
(d) Submission of necessary amendments to supplement omissions from
the Plan or reconcile any inconsistency therein.
(e) Filing appropriate reports with the Government as required by
law.
(f) Appointment of a Trustee or Trustees and investment managers.
(g) Review at appropriate intervals of the performance of the
Trustee and such investment managers as may have been designated.
(h) Appointment of such additional Fiduciaries as deemed necessary
for the effective administration of the Plan, such appointments to be by
written instrument.
11.3 Liability for Acts of Other Fiduciaries -- Each Fiduciary
shall be responsible only for the duties allocated or delegated to said
Fiduciary, and other Fiduciaries shall not be liable for any breach of
fiduciary responsibility with respect to any act or omission of any other
Fiduciary unless:
(a) The Fiduciary knowingly participates in or knowingly attempts
to conceal the act or omission of such other Fiduciary and knows that such
act or omission constitutes a breach of fiduciary responsibility by the
other Fiduciary;
(b) The Fiduciary has knowledge of a breach of fiduciary
responsibility by the other Fiduciary and has not made reasonable efforts<PAGE>
PAGE 24
under the circumstances to remedy the breach; or
(c) The Fiduciary's own breach of his specific fiduciary
responsibilities has enabled another Fiduciary to commit a breach. No
Fiduciary shall be liable for any acts or omissions which occur prior to
his assumption of Fiduciary status or after his termination from such
status.
11.4. Employment by Fiduciaries -- Any Fiduciary hereunder may
employ, with the written approval of the Administrator, one or more persons
to render service with regard to any responsibility which has been assigned
to such Fiduciary under the terms of the Plan including legal, tax, or
investment counsel and may delegate to one or more persons any
administrative duties (clerical or otherwise) hereunder.
11.5. Recordkeeping -- The Administrator shall keep or cause to be
kept any necessary data required for determining the account status of each
Participant. In compiling such information, the Administrator may rely
upon its employment records, including representations made by the
Participant in the employment application and subsequent documents
submitted by the Participant to the Employer. The Trustee shall be entitled
to rely upon such information when furnished by the Administrator or its
delegate. Each Employee shall be required to furnish the Administrator
upon request and in such form as prescribed by the Administrator, such
personal information, affidavits and authorizations to obtain information
as the Administrator may deem appropriate for the proper administration of
the Plan, including but not limited to proof of the Employee's date of
birth and the date of birth of any person designated by a Participant as a
Beneficiary.
11.6. Claims Review Procedure -- The Administrator shall make all
determinations as to the right of any person to Accounts under the Plan.
Any such determination by the Administrator shall be made pursuant to the
following procedure:
Step 1. Claims with respect to an Account should be filed by a
claimant as soon as practicable after claimant knows or should know that a
dispute has arisen with respect to an Account, but at least thirty (30)
days prior to the claimant's actual retirement date or, if applicable,
within sixty (60) days after the death, Disability or Severance from
Service of the Participant whose Account is at issue, by mailing a copy of
the claim to the Benefits and Services Department, Raytheon Company,
141 Spring Street, Lexington, Massachusetts 02173.
Step 2. In the event that a claim with respect to an Account is
wholly or partially denied by the Administrator, the Administrator shall,
within ninety (90) days following receipt of the claim, so advise the
claimant in writing setting forth: the specific reason or reasons for the
denial; specific reference to pertinent Plan provisions on which the denial
is based; a description of any additional material or information necessary
for the claimant to perfect the claim; an explanation as to why such
material or information is necessary; and an explanation of the Plan's<PAGE>
PAGE 25
claim review procedure.
Step 3. Within sixty (60) days following receipt of the denial of
a claim with respect to an Account, a claimant desiring to have the denial
appealed shall file a request for review with the Administrator by mailing
a copy thereof to the address shown in Step 1.
Step 4. Within thirty (30) days following receipt of a request
for review, the Administrator shall provide the claimant a further
opportunity to present his or her position. At the Administrator's
discretion, such presentation may be through an oral or written
presentation. Prior to such presentation, the claimant shall be permitted
the opportunity to review pertinent documents and to submit issues and
comments in writing. Within a reasonable time following presentation of
the claimant's position, which usually should not exceed thirty (30) days,
the Administrator shall inform the claimant in writing of the decision on
review setting forth the reasons for such decision and citing pertinent
provisions in the Plan.
11.7. Indemnification of Directors and Employees -- The Companies
shall indemnify by insurance or otherwise any Fiduciary who is a director,
officer or employee of the Employer, his heirs and legal representatives,
against all liability and reasonable expense, including counsel fees,
amounts paid in settlement and amounts of judgments, fines or penalties,
incurred or imposed upon him in connection with any claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of acts or omissions in his capacity as a Fiduciary hereunder,
provided that such act or omission is not the result of gross negligence or
willful misconduct. The Companies may indemnify other Fiduciaries, their
heirs and legal representatives, under the circumstances, and subject to
the limitations set forth in the preceding sentence, if such
indemnification is determined by the Board of Directors to be in the best
interests of the Companies.
11.8. Immunity from Liability -- Except to the extent that Section
410(a) of the Retirement Act prohibits the granting of immunity to
Fiduciaries from liability for any responsibility, obligation, or duty
imposed under Title I, Subtitle B, Part 4, of said Act, an officer,
employee, member of the Board of Directors of the Employer or other person
assigned responsibility under this Plan shall be immune from any liability
for any action or failure to act except such action or failure to act which
results from said officer's, Employee's, Participant's or other person's
own gross negligence or willful misconduct.
ARTICLE XII - AMENDMENT OR TERMINATION OF THE PLAN
12.1. Right to Amend or Terminate Plan -- The Company reserves the
right at any time or times, by action of the Chairman, the President, the
Treasurer or the Vice President, Human Resources, to modify, amend or
terminate the Plan in whole or in part as to its Employees, in which event
a written direction from an authorized officer, approving such
modification, amendment or termination shall be delivered to the Trustee<PAGE>
PAGE 26
and to the other Companies whose Employees are covered by this Plan,
provided, however, that the Plan shall not be amended in such manner as
would cause or permit any part of the corpus of the Trust to be diverted to
purposes other than for the exclusive benefit of the Employees or as would
cause or permit any part of such corpus to revert to any of the Companies
prior to the satisfaction of all liabilities under the Plan, and provided
further that the duties or liabilities of the Trustee shall not be
increased without its written consent, and provided further that any such
modification or amendment of the Plan shall be subject to approval by the
Board of Directors of the Company.
12.2. Change in Vesting Schedule -- No amendment to the vesting
schedule shall deprive a Participant of his or her Nonforfeitable rights to
benefits accrued to the date of the amendment.
12.3. Maintenance of Plan -- The Company has established the Plan
with the bona fide intention and expectation that it will continue the Plan
indefinitely, but the Company is not and shall not be under any obligation
or liability whatsoever to maintain the Plan for any given length of time.
12.4. Termination of Plan and Trust -- The Plan and Trust hereby
created shall terminate upon the occurrence of any of the following events:
(a) Delivery to the Trustee of a notice of termination executed by
the Company specifying the date as of which the Plan and Trust
shall terminate;
(b) Adjudication of the Company as bankrupt or general assignment
by the Company to or for the benefit of creditors or
dissolution of the Company;
In the event of the complete termination of this Plan (but a
rescission under Section 13.2 for failure to qualify initially is not such
a termination), the rights of each Participant to the amounts then credited
to his or her Account shall be Nonforfeitable. In the event of the partial
termination of this Plan, the rights of each Employee (as to whom the Plan
is considered terminated) to the amounts then credited to his or her
Account, shall be Nonforfeitable. Whether or not there is a complete or
partial termination of this Plan shall be determined under the regulations
promulgated pursuant to the Internal Revenue Code. To the extent this
paragraph is inconsistent with any provisions contained elsewhere in this
Plan or in the Trust which forms a part of this Plan, this paragraph shall
govern. Upon such termination of the Plan and Trust, after payment of all
expenses and proportional adjustment of accounts to reflect such expenses,
fund losses or profits, and reallocations to the date of termination, each
Participant or former Participant shall be entitled to receive any amounts
then credited to his or her Account in the Trust Fund. The Trustee may
make payments in cash or, to the extent permitted by Section 6.4, in stock.
ARTICLE XIII - ADDITIONAL PROVISIONS
13.1. Effect of Merger, Consolidation or Transfer -- In the event of
any merger or consolidation with or transfer of assets or liabilities to<PAGE>
PAGE 27
any other plan or to this Plan, each Participant of the Plan shall be
entitled to a benefit immediately after the merger, consolidation or
transfer, which is equal to or greater than the benefit he or she would
have been entitled to receive immediately before the merger, consolidation
or transfer (if the Plan had been terminated).
13.2. Necessity of Initial Qualification -- This Plan is established
with the intent that it shall qualify under Sections 401(a) and 401(k) of
the Code as that section exists at the time the Plan is established. If
the Internal Revenue Service determines that the Plan initially fails to
meet those requirements, then within thirty (30) days after the date of
such determination all of the vested assets of the Trust Fund held for the
benefit of Participants and their beneficiaries shall be distributed
equitably among the contributors to the Plan in proportion to their
contributions, and the Plan shall be considered to be rescinded and of no
force or effect, unless such inadequacy is removed by a retroactive
amendment pursuant to the Code.
13.3. Limitation of Assignment -- No account under the Plan shall be
subject in any manner to attachment, anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, or the vesting of
rights in any person by operation of law or otherwise except as provided
under this Plan, including but not limited to the Trustee or Receiver in
Bankruptcy, and any attempt so to anticipate, alienate, sell, transfer,
assign, encumber or charge the same shall be void, nor shall any such
benefit be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such benefit.
If any Participant is adjudicated bankrupt, or attempts to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any benefit
under the Plan, then such benefit shall, in the discretion of the
Administrator, cease and terminate and in that event the Trustee shall hold
or apply the same or any part thereof to or for the benefit of such
Participant in such manner as the Administrator may direct. This Section
shall not apply to qualified domestic relations orders as defined in the
Retirement Equity Act of 1984.
13.4. Limitation of Rights of Employees -- This Plan is strictly a
voluntary undertaking on the part of the Companies and shall not be deemed
to constitute a contract between any of the Companies and any Employee, or
to be a consideration for, or an inducement to, or a condition of the
employment of any Employee. Nothing contained in the Plan shall be deemed
to give any Employee the right to be retained in the service of any of the
Companies or shall interfere with the right of any of the Companies to
discharge or otherwise terminate the employment of any Employee of the
respective company at any time. No Employee shall be entitled to any right
or claim hereunder except to the extent such right is specifically fixed
under the terms of the Plan.
13.5. Construction -- The Plan shall be construed, regulated, and
administered under the laws of the Commonwealth of Massachusetts, except to
the extent that the Retirement Act otherwise requires. In the event that
any provision of this Plan is inconsistent with any provision in the<PAGE>
PAGE 28
Retirement Act, the provision in the Retirement Act shall be deemed to be
controlling.
ARTICLE XIV - DEFINITIONS
The following terms have the meaning specified below unless the
context indicates otherwise:
14.1. "Account" means the entire interest of a Participant in the
Trust Fund.
14.2. "Administrator" means Raytheon Company.
14.3. "Annual Addition" means the Participant's Elective Deferral
during a Limitation Year.
14.4. "Authorized Leave of Absence" means an absence approved by the
Companies on a uniform and nondiscriminatory basis not exceeding one (1)
year for any of the following reasons: illness of Employee or relative,
death of relative, education of Employee, or personal or family business of
an extraordinary nature, provided in each case that the Employee returns to
the service of the Companies within the time period specified by the
Companies.
14.5. "Authorized Military Leave of Absence" means any absence due
to service in the Armed Forces of the United States, upon completion of
which the Employee is entitled under any applicable Federal law to
reemployment at the termination of such military service, provided that he
returns to the service of the Companies within the period provided for by
such applicable Federal law or such further period as may be established by
the Administrator. As used in this paragraph, the term "Armed Forces of the
United States" excludes the Merchant Marine.
14.6. "Beneficiary" means a Participant's Surviving Spouse. If there
is no Surviving Spouse, or if the Surviving Spouse has given written
consent to the designation of another person or persons as Beneficiary,
then Beneficiary shall means said person or persons designated by the
Participant to be paid the lump sum value of the Participant's Account in
the event of the Participant's death.
14.7. "Board of Directors" means the Board of Directors of Raytheon
Company.
14.8. "Company" means Raytheon Company.
14.9. "Companies" means the Company and any Subsidiary of the
Company which elects through an authorized officer to participate in the
Plan on account of its Employees, provided that participation in the Plan
by such a Subsidiary is approved by the Board of Directors of the Company,
but shall not include any Division, Operation or similar cohesive group of
a participating Subsidiary excluded by the Board of Directors of the
Subsidiary and the Board of Directors of the Company.<PAGE>
PAGE 29
14.10. "Designated Hourly Payroll" means an hourly payroll or
portion thereof, processed in the United States, of one of the Companies
which is designated in writing by the Administrator in accordance with
nondiscriminatory and uniform rules as a payroll the Employees on which are
eligible to participate in this Plan.
14.11. "Disability" means that the Participant is totally and
permanently disabled by bodily injury or disease so as to be prevented from
engaging in any occupation for compensation or profit. The determination
of disability shall be made by the Administrator with the aid of competent
medical advice. It shall be based on such evidence as the Administrator
deems necessary to establish disability or the continuation thereof.
14.12. "Elective Deferral" means a voluntary reduction of
Participant's compensation in accordance with a written direction to the
Administrator.
14.13. "Eligible Compensation" means base pay, supervisory
differentials, shift premiums and sales commissions, excluding all other
earnings from any source.
14.14. "Eligible Employee" means any Employee on a U.S. based
Salaried or Designated Hourly Payroll of one of the Companies, excluding
Employees in cooperative studies and intern programs and a person who is an
Employee solely by reason of being a leased employee within the meaning of
Section 414(n) of the Internal Revenue Code.
14.15. "Employee" means any person performing compensated services
for the Employer who meets the definition of "Employee" for income tax
withholding purposes under Treas. Regs. 3l.340l(c)-l and any person who is
a leased employee providing services to the Employer as recipient pursuant
to an agreement between the Employer and a leasing organization in
accordance with Section 414(n)(2) of the Internal Revenue Code; provided,
however, that a leased employee shall not be an Employee hereunder if
covered by a plan, as described in Section 414(n)(5) of the Code, of the
leasing organization.
14.16. "Employer" means Caloric Corporation, Raytheon Services
Nevada or Yeargin, Inc., and, where the context requires, Raytheon Company
and any subsidiary of Raytheon Company while such subsidiary is, or was, a
member of a "controlled group of corporations" within the meaning of
Section 414(b) of the Internal Revenue Code.
14.17. "Employment Commencement Date" is the date on which the
Employee first performs an Hour of Service with the Employer.
14.18. "Enrollment Agreement" means a salary reduction agreement
pursuant to which an Eligible Employee voluntarily joins the Plan and
authorizes deferral of a portion of the Participant's Eligible
Compensation.
14.19. "Entry Date" means the first Pay Date in each calendar month.<PAGE>
PAGE 30
14.20. "Fidelity" means Fidelity Investments, the recordkeeper for
the Plan.
14.21. "Fiduciary" means a named fiduciary and any other person or
group of persons who assumes a fiduciary responsibility within the meaning
of the Retirement Act under this Plan whether by expressed delegation or
otherwise but only with respect to the specific responsibilities of each
for the administration of the Plan and Trust Fund.
14.22. (a) "Hour of Service" means an hour with respect to which any
Employee is paid, or entitled to payment, for the performance of duties for
the Employer during the applicable computation period.
(b) "Hour of Service" shall include an hour for which the
Employee is entitled to credit under subparagraph (a) hereof as a result of
employment with a Division, Operation or similar cohesive group of the
Employer excluded from participation in the Plan.
(c) To the extent applicable, the rules set forth in 29 CFR
Sections 2530.200b-2(b) and (c) for computing an "Hour of Service" are
incorporated herein by reference.
14.23. "Layoff" means an involuntary interruption of service due to
reduction of work force with the possibility of recall to employment when
conditions warrant.
14.24. "Limitation Year" means the calendar year or any other 12-
consecutive-month period adopted for all qualified deferred compensation
plans of the Company pursuant to a written resolution adopted by the
Company.
14.25. "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of
determination under this Plan.
14.26. "Normal Retirement Age" means the Participant's sixtyfifth
(65th) birthday.
14.27. "Participant" means an individual who is enrolled in the Plan
pursuant to Article III and has not withdrawn the entire amount of his or
her Account.
14.28. "Pay Date" means the date designated for payment of wages or
salary during the first pay period of a calendar month.
14.29. "Period of Participation" means that portion of a Period of
Service during which the Eligible Employee was a Participant, and had an
Account in the Plan.
14.30. "Period of Service" means the period of time beginning on the
Employee's Employment Commencement Date or Reemployment Commencement Date,
whichever is applicable, and ending on the Employee's Severance from<PAGE>
PAGE 31
Service Date.
14.31. "Period of Severance" means the period of time beginning on
the Employee's Severance from Service Date and ending on the Employee's
Reemployment Commencement Date.
14.32. "Plan" means the Raytheon Subsidiary Savings and Investment
Plan as amended from time to time.
14.33. "Plan Year" means a calendar year, or a portion thereof
occurring prior to the termination of the Plan.
14.34. "Reemployment Commencement Date" means the first date on
which the Employee performs an Hour of Service following a Period of
Severance which is excluded under Section 2.5 in determining whether a
Participant has completed the required Period of Service for eligibility to
participate in the Plan.
14.35. "Retirement" means a Severance from Service when the
Participant has either attained age 55 and completed a Period of Service of
at least ten (10) years or has attained Normal Retirement Age.
14.36. "Retirement Act" means the Employee Retirement Income
Security Act of 1974, including any amendments thereto.
14.37. "Rollover Contribution Account" means that portion of a
Participant's Account which is attributable to rollover contributions
received pursuant to Section 3.7, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.38. "Salaried Payrolls" means the nonexempt salaried and the
exempt salaried payrolls which are processed in the United States.
14.39. "Severance from Service" means the termination of employment
by reason of quit, Retirement, discharge, death or failure to return from
Layoff, Authorized Leave of Absence, Authorized Military Leave of Absence
or Disability, or, if designated by the Administrator pursuant to
subsection 14.38(b) below, layoff as the result of a permanent plant
closing.
14.40. "Severance from Service Date" means the earlier of:
(a) the date on which an Employee quits, retires, is
discharged, or dies; or
(b) except as provided in paragraphs (c), (d) and (e) hereof,
the first anniversary of the first date of a period during which an
Employee is absent for any reason other than quit, retirement, discharge or
death, provided that, on an equitable and uniform basis, the Administrator
may determine that, in the case of a layoff as the result of a permanent
plant closing, the Administrator may designate the date of layoff or other
appropriate date prior to the first anniversary of the first date of<PAGE>
PAGE 32
absence as the Severance from Service Date; or
(c) in the case of an Authorized Military Leave of Absence
from which the Employee does not return prior to expiration of recall
rights, "Severance from Service Date" means the first day of absence
because of the leave; or
(d) in the case of an absence due to Disability, "Severance
from Service Date" means the earlier of the first anniversary of the first
day of absence because of the Disability or the date of termination of the
Disability; or
(e) in the case of an Employee who is discharged or quits (i)
by reason of the pregnancy of the Employee, (ii) by reason of the birth of
a child to the Employee, (iii) by reason of the placement of a child with
the Employee in connection with the adoption of such child by the Employee
or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement, "Severance from Service
Date," for the sole purpose of determining the length of a Period of
Service, shall mean the first anniversary of the quit or discharge.
14.41. "Subsidiary" means any corporation designated by the Board of
Directors as a Subsidiary, provided that for the purposes of the Plan no
corporation shall be considered a Subsidiary during any period when less
than fifty percent (50%) of its outstanding voting stock is beneficially
owned by the Company.
14.42. "Surviving Spouse" means a lawful spouse surviving the
Participant as of the date of Participant's death.
14.43. "Trust Agreement" means the agreement between the Company
and the Trustee, and any successor agreement made and entered into for the
establishment of a trust fund of all contributions which may be made to the
Trustee under the Plan.
14.44. "Trustee" means the Trustee and any successor trustees under
the Trust Agreement.
14.45. "Trust Fund" means the cash, securities, and other property
held by the Trustee for the purposes of the Plan.
14.46. "Valuation Date" means the last business day of each calendar
month.
14.47. Words used in either the masculine or feminine gender shall
be read and construed so as to apply to both genders where the context so
warrants. Words used in the singular shall be read and construed in the
plural where they so apply.<PAGE>
PAGE 1
EXHIBIT 99.5
ANNUAL REPORT
-------------
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended
December 31, 1993
--------
UNITED ENGINEERS & CONSTRUCTORS
SAVINGS AND INVESTMENT PLAN<PAGE>
PAGE 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Engineers & Constructors, Inc.:
We have audited the accompanying statements of net assets available
for plan benefits of the United Engineers & Constructors Savings and
Investment Plan as of December 31, 1993 and 1992, and the related
statements of changes in net assets available for plan benefits for each of
the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the United Engineers & Constructors Savings and Investment Plan
as of December 31, 1993 and 1992, and the changes in net assets available
for plan benefits for each of the three years in the period ended December
31, 1993 in conformity with generally accepted accounting principles.
Effective January 1, 1993, all plan assets and the accounts of all
participants of the Plan were transferred into the Raytheon Savings and
Investment Plan. The Company intends to seek the approval of its Board of
Directors to terminate the Plan subject to the provisions of ERISA.
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
June 17, 1994<PAGE>
PAGE 3
UNITED ENGINEERS & CONSTRUCTORS
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1993 and 1992
-------
1993 1992
---- ----
Assets:
Investments, at fair value
(Notes B, E, F and G) $ - $61,704,999
Receivables:
Accrued investment income - 55,147
Employee deferrals - 321,155
Employer contribution - 101,207
Loans receivable from participants - 2,078,444
Cash and cash equivalents - 194,372
----------- -----------
Total assets - 64,455,324
----------- -----------
Liabilities:
Benefits and withdrawals payable - -
Payable for outstanding purchases -
28,977
Administrative expenses - 30,749
Forfeitures - 2,031
----------- -----------
Total liabilities - 61,757
----------- -----------
Net assets available for plan benefits $ - $64,393,567
=========== ===========
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 4
UNITED ENGINEERS & CONSTRUCTORS
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
for the years ended December 31, 1993, 1992 and 1991
-------
1993 1992 1991
---- ---- ----
Additions to net assets
attributable to:
Investment income
(Notes B, E, F and G):
Change in appreciation
(depreciation)
of investments - $ 3,151,540 $ 2,961,669
Interest - 2,185,537 2,063,953
Dividend - 753,277 758,635
----------- ----------- -----------
- 6,090,354 5,784,257
----------- ----------- -----------
Employee deferrals - 15,066,785 12,786,081
Employer contributions - 1,312,426 -
----------- ----------- -----------
- 16,379,211 12,786,081
----------- ----------- -----------
Total additions - 22,469,565 18,570,338
----------- ----------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals by
participants - 5,045,760 4,682,077
Administrative expenses - 48,393 -
Transfers out (Note A) $64,393,567 - -
----------- ----------- -----------
Total deductions 64,393,567 5,094,153 4,682,077
----------- ----------- -----------
Increase (decrease) in net
assets (64,393,567) 17,375,412 13,888,261
Net assets, beginning of year 64,393,567 47,018,155 33,129,894
----------- ----------- -----------
Net assets, end of year - $64,393,567 $47,018,155
=========== =========== ===========
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 5
UNITED ENGINEERS & CONSTRUCTORS
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
-------
A. Description of Plan:
General
United Engineers & Constructors Savings and Investment Plan (the
"Plan") is a defined contribution plan. Effective January 1, 1993,
all plan assets and the accounts of all participants of the Plan
were transferred into the Raytheon Savings and Investment Plan. To
participate in the Plan, eligible employees must have three months
of service and may enter the Plan only on the first day of each
month.
The purpose of the Plan is to provide participants with a tax-
effective means of meeting both short and long-term investment
objectives. The Plan is intended to be a "qualified cash or deferred
arrangement" under Sections 401(a) and 401(k) of the Internal Revenue
Code (the "Code"). The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). The total
number of participants in the Plan as of December 31, 1993 was zero.
Effective July 31, 1992, the Plan's investments were combined with
the investments of other similar defined contribution plans of
Raytheon Company and Subsidiaries Consolidated into the Raytheon
Company Master Trust for Defined Contribution Plans ("Master Trust").
The trustee of the Master Trust maintains a separate account
reflecting the equitable share in the Trust of each plan.
Contributions and Deferrals
In accordance with the Plan document, eligible employees are allowed
to defer to the Plan up to 15% of their salaries. Effective August
1, 1992, the Company is required to contribute amounts equal to 50%
of each participant's deferral, up to a maximum of 3% of the
participant's salary. No contributions were made during fiscal year
1993 as the Plan was inactive. As of December 31, 1993, the combined
annual employee deferral and employer contribution for a participant
cannot exceed $13,491. Participants may invest their deferrals in
increments of 10% in any combination of five funds: (a) a Guaranteed
Income Fund under which assets are invested primarily in contracts
providing for fixed rates of interest for specified periods of time,
(b) an Equity Fund which invests in shares of a mutual fund which
consists primarily of income-producing equity securities, (c) a
Raytheon Common Stock Fund which invests in shares of Raytheon
Company Common Stock, (d) a Stock Index Fund which invests in a
commingled pool consisting primarily of equity securities and is
designed to track the S&P 500 Index, and (e) a Balanced Fund which
invests in shares of a mutual fund which consists primarily of
equity<PAGE>
PAGE 6
securities, bonds and money market instruments. Dividends and
distributions from investments of the Raytheon Common Stock Fund, the
Equity Fund and the Balanced Fund are reinvested in their respective
funds; stock dividends, stock splits and similar changes are also
reflected in the funds.
Rollover Funds
Beginning in May 1988, employees were eligible to roll over into this
Plan the amount of a qualifying distribution (as defined in Section
402 of the Code) from any other qualified employee trust or annuity.
Participant Accounts
In accordance with the Plan document, participant accounts are
credited with the participant's deferral, the Company's contribution
and an allocation of Plan earnings. Plan earnings are allocated
based on account balances by fund.
Vesting
Participants are immediately vested in their voluntary deferrals plus
actual earnings thereon. Vesting requirements for employer
contributions plus earnings thereon may vary depending upon when an
employee becomes eligible to participate in the Plan. Vesting occurs
upon completion of a certain period of service or upon retirement,
death, disability or attainment of retirement age. Forfeitures of
the nonvested portions of terminated participant's accounts are used
to reduce required Company contributions.
Benefits and Withdrawals
Participants may withdraw all or a portion of deferrals, employer
contributions and related earnings upon attainment of age 59 1/2.
For reasons of financial hardship, as defined in the Plan document, a
participant may withdraw all or a portion of deferrals. On
termination of employment, a participant will receive a lump-sum
distribution unless the vested account is valued in excess of $3,500
and the participant elects to defer distribution. A retiree or a
beneficiary of a deceased participant may defer the distribution to
January of the following year.
Loans to Participants
Participants may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum
amount of a loan is the lesser of one-half (1/2) of the participant's
account balance or $50,000. The minimum loan which may be granted is
$500. The interest rate applied is equal to the prime rate published
in the WALL STREET JOURNAL on the first business day in June and
December of each year. Loans must be repaid over a period of up to
five years by means of payroll deductions. In certain cases, the<PAGE>
PAGE 7
repayment period may be extended up to 15 years. Interest paid to
the Plan on loans to participants is credited to the borrower's
account in the investment fund to which repayments are made.
Administrative Expenses
Effective April 1, 1992, substantially all expenses of administering
the Plan are paid by the Plan.
B. Summary of Significant Accounting Policies:
Guaranteed income contracts are valued at cost, defined as net
contributions and deferrals plus interest earned at contracted rates,
which approximates fair value. Investments in mutual funds and the
commingled pool are valued at the closing net asset value reported on
the last business day of the year. Investments in securities (common
stocks) traded on a national securities exchange are valued at the
last reported sales price on the last business day of the year. Cash
equivalents are short-term money market instruments and are valued at
cost which approximates fair value.
Security transactions are recorded on trade date. Except for
guaranteed income contracts (Note E), investments are held by bank-
administered trust funds. Payables for outstanding security
transactions represent trades which have occurred but have not yet
settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Dividend income is recorded on the ex-dividend date. Income from
other investments is recorded as earned on an accrual basis.
C. Federal Income Tax Status:
The Plan is a "qualified cash or deferred arrangement" within the
meaning of Section 401(k) of the Code. The Company has received a
favorable determination letter from the Internal Revenue Service
which states that the Plan is qualified under Sections 401(a) and
401(k) of the Code. The Plan obtained its latest determination
letter in 1988, in which the Internal Revenue Service stated that the
Plan, as then designated, was in compliance with the applicable
requirements of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter.
However, the plan administrator and the Plan's tax counsel believe
that the Plan is currently designed and being operated in compliance
with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the
Plan's financial statements.<PAGE>
PAGE 8
D. Plan Termination:
The Company intends to seek the approval of its Board of Directors to
terminate the Plan subject to the provisions of ERISA prior to
December 31, 1994.
E. Guaranteed Income Contracts (GICS):
The plan held three collateralized fixed income investment
portfolios, two of which were managed by insurance companies and one
by an investment management firm at December 31, 1992.
The annual rates were 6.74%, 6.93% and 6.35% and the effective annual
rates were 6.97%, 7.17% and 6.55%, respectively, at December 31,
1992.
F. Related Party Transactions:
In accordance with the provisions of the Plan, State Street Bank and
Trust Company (the "Trustee") acted as the Plan's agent for purchases
and sales of shares of Raytheon Company Common Stock until July 31,
1992. Effective July 31, 1992 Fidelity Management Trust Company (the
"Trustee") acts as the Plan's agent for purchase and sales of shares
of Raytheon Company Common Stock. For the years ended December 31,
1993, 1992 and 1991, purchases of Raytheon Company Common Stock
amounted to $0, $2,390,881 and $1,112,214, respectively. Sales of
Raytheon Company Common Stock amounted to $0, $123,019 and $363,157
in 1993, 1992 and 1991, respectively.<PAGE>
PAGE 9
<TABLE>
G. Fund Data:
The following is a summary of net assets available for plan benefits by fund as of December 31:
<CAPTION> 1993
-------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets available for
plan benefits - - - - - - -
========== ====== ========== ===== ========= ====== =====<PAGE>
PAGE 10
G. Fund Data:
The following is a summary of net assets available for plan benefits by fund as of December 31
1992
--------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Contracts with insurance companies $32,153,717 $32,153,717
Fidelity Equity Income Fund
(539,829 shares) - $15,660,426 15,660,426
Raytheon Company Common Stock
(156,947 shares) - - $8,043,523 8,043,523
BT Pyramid Equity Index Fund
(6,517 shares) - - - $5,847,333 5,847,333
----------- ----------- ---------- ---------- -----------
Total investments 32,153,717 15,660,426 8,043,523 5,847,333 61,704,999
Receivables:
Accrued investment income - - 54,910 237 55,147
Employee deferrals 126,305 81,492 46,865 66,493 321,155
Employer contribution 43,505 26,946 14,081 16,675 101,207
Loans receivable from participants - - - - $2,078,444 2,078,444
Cash and cash equivalents - - 110,902 83,470 - 194,372
----------- ----------- ---------- ---------- ---------- -----------
Total assets 32,323,527 15,768,864 8,270,281 6,014,208 2,078,444 64,455,324
----------- ----------- ---------- ---------- ---------- -----------
Liabilities:
Payable for outstanding purchases - - 28,977 - - 28,977
Administrative expenses 19,388 6,040 2,873 2,448 - 30,749
Forfeitures 556 505 268 702 - 2,031
----------- ----------- ---------- ---------- ---------- -----------
Total liabilities 19,944 6,545 32,118 3,150 - 61,757<PAGE>
PAGE 11 ----------- ----------- ---------- ---------- ---------- -----------
Net assets available for plan benefits $32,303,583 $15,762,319 $8,238,163 $6,011,058 $2,078,444 $64,393,567
=========== =========== ========== ========== ========== ===========<PAGE>
PAGE 12<PAGE>
PAGE 13
G. Fund Data, continued:
The following is a summary of changes in net assets available for plan benefits by fund as of December 31:
1993
---------------------------------------------------------------------------------------
--
Guaranteed Raytheon Stock
Income Equity Common Index Balanced Loan
Fund Fund Stock Fund Fund Fund Fund Total
---------- ------ ---------- ----- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Deductions from net assets
attributable to:
Transfers out $32,303,583 $15,762,319 $8,238,163 $6,011,058 $2,078,444 $64,393,567
----------- ----------- ---------- ---------- ---------- -----------
Total deductions 32,303,583 15,762,319 8,238,163 6,011,058 2,078,444 64,393,567
----------- ----------- ---------- ---------- ---------- -----------
Decrease in net assets (32,303,583) (15,762,319) (8,238,163) (6,011,058) (2,078,444) (64,393,567)
Net assets, beginning of year 32,303,583 15,762,319 8,238,163 6,011,058 - 2,078,444 64,393,567
----------- ----------- ---------- ---------- --------- ---------- -----------
Net assets, end of year - - - - - - -
=========== =========== ========== ========== ========= ========== ===========<PAGE>
PAGE 14
G. Fund Data, continued:
The following is a summary of changes in net assets by fund for the year ended December 31:
1992
---------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 1,340,326 $1,405,403 $ 405,811 $ 3,151,540
Interest $ 2,180,999 567 2,801 1,170 2,185,537
Dividends - 518,167 235,110 - 753,277
----------- ----------- ---------- ---------- -----------
2,180,999 1,859,060 1,643,314 406,981 6,090,354
----------- ----------- ---------- ----------
Employee deferrals 7,359,261 3,578,979 1,750,764 2,377,781 15,066,785
Employer contributions 589,210 338,322 181,200 203,694 1,312,426
----------- ----------- ---------- ---------- -----------
7,948,471 3,917,301 1,931,964 2,581,475 16,379,211
----------- ----------- ---------- ---------- -----------
Total additions 10,129,470 5,776,361 3,575,278 2,988,456 22,469,565
----------- ----------- ---------- ---------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 3,121,095 1,118,998 524,421 281,246 5,045,760
Administrative expenses 28,407 10,003 6,507 3,476 48,393
----------- ----------- ---------- ---------- -----------
Total deductions 3,149,502 1,129,001 530,928 284,722 5,094,153
----------- ----------- ---------- ---------- -----------
Interfund transfers (732,343) 78,520 (139,585) 793,408 -
Loans to participants (988,679) (445,526) (266,766) (170,516) $1,871,487 -
Repayment of loan principal 375,604 172,712 107,517 110,378 (766,211) -
----------- ----------- ---------- ---------- ---------- -----------
Increase in net assets 5,634,550 4,453,066 2,745,516 3,437,004 1,105,276 17,375,412
Net assets, beginning of year 26,669,033 11,309,253 5,492,647 2,574,054 973,168 47,018,155<PAGE>
PAGE 15 ----------- ----------- ---------- ---------- ---------- -----------
Net assets, end of year $32,303,583 $15,762,319 $8,238,163 $6,011,058 $2,078,444 $64,393,567
=========== =========== ========== ========== ========== ===========<PAGE>
PAGE 16
G. Fund Data, continued:
The following is a summary of changes in net assets by fund for the year ended December 31:
1991
--------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributable to:
Investment income:
Change in appreciation
(depreciation) of
investments $ 1,901,731 $ 764,542 $ 295,396 $ 2,961,669
Interest $ 2,036,071 10,749 12,324 4,809 2,063,953
Dividends - 612,380 146,255 - 758,635
----------- ----------- ---------- ---------- -----------
2,036,071 2,524,860 923,121 300,205 5,784,257
Employee deferrals 7,680,717 2,496,099 1,504,585 1,104,680 12,786,081
----------- ----------- ---------- ---------- -----------
Total additions 9,716,788 5,020,959 2,427,706 1,404,885 18,570,338
----------- ----------- ---------- ---------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 2,718,513 1,042,263 729,828 191,473 4,682,077
----------- ----------- ---------- ----------
Total deductions 2,718,513 1,042,263 729,828 191,473 4,682,077
----------- ----------- ---------- ---------- -----------
Interfund transfers 390,662 (1,435,951) (318,135) 1,363,424 -
Loans to participants (433,374) (161,021) (143,002) (29,403) $ 766,800 -
Repayment of loan principal 186,724 57,885 44,942 26,621 (316,172) -
----------- ----------- ---------- ---------- --------- -----------
Increase in net assets 7,142,287 2,439,609 1,281,683 2,574,054 450,628 13,888,261
Net assets, beginning of year 19,526,746 8,869,644 4,210,964 - 522,540 33,129,894
----------- ----------- ---------- ---------- --------- -----------
Net assets, end of year $26,669,033 $11,309,253 $5,492,647 $2,574,054 $ 973,168 $47,018,155
=========== =========== ========== ========== ========= ===========
/TABLE
<PAGE>
PAGE 17
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the United Engineers and Constructors Savings and Investment Plan has duly
caused this annual report to be signed by the undersigned thereunto duly
authorized.
UNITED ENGINEERS & CONSTRUCTORS
SAVINGS AND INVESTMENT PLAN
BY /s/ Frank D. Umanzio
Frank D. Umanzio
Signatory for the Plan
DATE June 30, 1994<PAGE>
PAGE 1
EXHIBIT (99.5a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Raytheon Company:
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company on Form S-8 (File No. 33-3723, No. 33-15397,
and No. 33-21454) of our report dated June 17, 1994 on our audits of the
financial statements of the United Engineers & Constructors Savings and
Investment Plan as of December 31, 1993 and 1992 and for each of the three
years in the period ended December 31, 1932, which report is included in this
annual report on Form 11-K.
We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Boston, Massachusetts
June 24, 1994<PAGE>
EXHIBIT 99.5(b)
The United Engineers & Constructors Savings and Investment Plan was
merged into the Raytheon Savings and Investment Plan effective March 23,
1993.<PAGE>
