PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A-No. 1
/ / Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1994
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from............... to
..............
Commission File Number 1-2833
RAYTHEON COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-1760395
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
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
DATE June 29, 1995<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
(99.3) Annual Report for the Raytheon Subsidiary 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
(99.4a) Consent of Independent Public Accountants
(99.4b) The Raytheon Employee Savings and Investment Plan<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, 1994
--------------
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, 1994
and 1993, 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,
1994. 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, 1994 and 1993, and the
changes in net assets available for plan benefits for each of the three years
in the period ended December 31, 1994 in conformity with generally accepted
accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 2, 1995<PAGE>
PAGE 3
RAYTHEON SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1994 and 1993
-------
1994 1993
---- ----
Assets:
Investments, at fair value
(Notes B, E, F and I) $1,490,050,203 $1,355,652,554
Receivables:
Accrued investment income 13,932 5,965
Employee deferrals 588,985 794,299
Employer contributions 98,071 151,478
Loans receivable from
participants 100,371,729 91,079,703
Cash and cash equivalents 16,762,245 2,384,940
-------------- --------------
Total assets 1,607,885,165 1,450,068,939
-------------- --------------
Liabilities:
Payable for outstanding
purchases 347,114 -
Administrative expense 117,587 126,126
Forfeitures 234,864 414,263
-------------- --------------
Total liabilities 699,565 540,389
-------------- --------------
Net assets available for plan
benefits $1,607,185,600 $1,449,528,550
============== ==============
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, 1994, 1993 and 1992
-------
1994 1993 1992
---- ---- ----
Additions to net assets
attributable to:
Investment income
(Notes B, E, and I):
Change in net appreciation
(depreciation) of
investments $ (39,593,551) $ 72,981,693 $ 33,271,023
Interest 49,579,590 53,392,853 55,619,997
Dividends 14,920,211 11,541,168 8,162,794
Capital gains
distributions 19,613,629 3,654,767 -
-------------- -------------- --------------
44,519,879 141,570,481 97,053,814
-------------- -------------- --------------
Contributions and
deferrals:
Employee deferrals 162,552,459 126,712,499 116,731,953
Employer contributions 43,924,642 42,388,170 38,245,218
Transfers in (Note G) 5,298,802 79,062,947 -
Other additions, net
(Note H) - 273,041 -
-------------- -------------- --------------
211,775,903 248,436,657 154,977,171
-------------- -------------- --------------
Total additions 256,295,782 390,007,138 252,030,985
-------------- -------------- --------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 91,837,674 80,645,596 121,034,476
Administrative expenses 766,198 1,037,630 980,971
Transfers out (Note G) 731,646 3,343,676 -
Other deductions, net
(Note H) 5,303,214 - 120,160
-------------- -------------- --------------
Total deductions 98,638,732 85,026,902 122,135,607
-------------- -------------- --------------
Increase in net assets 157,657,050 304,980,236 129,895,378
Net assets, beginning
of year 1,449,528,550 1,144,548,314 1,014,652,936
-------------- -------------- --------------
Net assets, end of year $1,607,185,600 $1,449,528,550 $1,144,548,314
============== ============== ==============
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 5
RAYTHEON SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
-------
A. Description of Plan:
General
The following description of the Raytheon Savings and Investment Plan
(the "Plan") provides only general information. Participants should
refer to the Plan agreement for a complete description of the Plan's
provisions. 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 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,
1994 and 1993 were 40,120 and 55,056, respectively. Participants by fund
were as follows as of December 31, 1994:
Guaranteed Income Fund 31,737
Equity Fund 21,621
Raytheon Common Stock Fund 16,463
Stock Index Fund 12,693
Balanced Fund 9,713
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 were allowed to defer to the Plan up to 17% of their
salaries effective January 1, 1994; previously, the maximum deferral was
15%. 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, 1994, the annual employee deferral for a participant cannot
exceed $9,240. Rollover contributions from other qualified plans are
accepted by the Plan. Participants may invest their deferrals in
increments of 1% 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<PAGE>
PAGE 6
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 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 (l/2) of the participant's
vested 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. <PAGE>
PAGE 7
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. The Plan will adopt the AICPA's
Statement of Position 94-4, "Reporting of Investment contracts held by
Health and Welfare Benefit Plans and Defined-Contribution Pension
Plans," in 1995. The adoption of this statement is not expected to have
a material financial impact on the Plan. 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.
Benefits are recorded when paid.
C. Federal Income Tax Status:
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:
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<PAGE>
PAGE 8
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 6.07%, 6.68% and 6.01%
and the effective annual rates were 6.26%, 6.91% and 6.19%,
respectively, at December 31, 1994. The values of the portfolios managed
by Metropolitan Life Insurance Company, The Prudential Asset Management
Company and Banker's Trust were $313,167,924, $202,637,978, and
$314,605,020, respectively, at December 31, 1994. The values at December
31, 1993 held with 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.
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, 1994,
1993 and 1992, purchases of Raytheon Company Common Stock amounted to
$16,302,923, $14,610,207 and $17,270,729, respectively. Sales of
Raytheon Company Common Stock amounted to $4,095,868, $2,942,959 and
$3,403,169 in 1994, 1993 and 1992, respectively.
G. Plan Transfers:
Effective September 23, 1994 and December 22, 1994, all plan assets and
the accounts of all participants of the Arkansas Aerospace, Inc.
Employee Retirement Savings Plan and the United Engineers &
Constructors, Inc. Profit Sharing Plan, respectively, were transferred
into the Plan.
Effective May 4, 1994, the accounts of all employees of NASA Logistics
Support Services who participated in the Plan were transferred out of
the Plan and into the Raytheon Employee Savings and Investment Plan.
Effective February 10, 1994, the accounts of certain employees of
Caloric Corporation who participated in the Raytheon Subsidiary Savings
and Investment Plan 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<PAGE>
PAGE 9
Engineers Support Company, respectively, who participated in the Plan
were transferred out of the Plan and into the Raytheon Employee Savings
and Investment Plan.
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.
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.
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, the Raytheon Employee Savings and Investment Plan and the
Raytheon Subsidiary Savings and Investment Plan for those participants
who changed plans during the year.<PAGE>
PAGE 10
<TABLE>
I. Fund Data: The following is a summary of net assets available for plan benefits by fund as of December 31:
1994
--------------------------------------------------------------------------------
<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 $830,410,922 $ 830,410,922
Fidelity Equity Income Fund
(9,954,116 shares) $305,591,359 305,591,359
Raytheon Company Common Stock
(2,239,615 shares) - - $143,055,435 143,055,435
BT Pyramid Equity Index Fund
(112,661 shares) - - - $112,930,945 112,930,945
Fidelity Balanced Fund
(7,978,970 shares) - - - - $98,061,542 98,061,542
------------ ------------ ------------ ------------ ----------- --------------
Total investments 830,410,922 305,591,359 143,055,435 112,930,945 98,061,542 1,490,050,203
Receivables:
Accrued investment income - - 8,123 5,809 - 13,932
Employee deferrals 216,241 50,050 55,173 244,789 22,732 588,985
Employer contributions 59,510 14,543 11,511 6,617 5,890 98,071
Loans receivable from
participants - - - - $100,371,729 100,371,729
Cash and cash equivalents 13,656,409 - 1,875,901 1,229,935 - - 16,762,245
------------ ------------ ------------ ------------ ----------- ------------ --------------
Total assets 844,343,082 305,655,952 145,006,143 114,418,095 98,090,164 100,371,729 1,607,885,165
Liabilities:
Payable for outstanding
purchases - - 347,114 - - - 347,114
Administrative expense 64,628 21,988 11,621 11,835 7,515 - 117,587
Forfeitures 230,252 3,234 609 618 151 - 234,864
------------ ------------ ------------ ------------ ----------- ------------ --------------
Total liabilities 294,880 25,222 359,344 12,453 7,666 - 699,565
------------ ------------ ------------ ------------ ----------- ------------ --------------
Net assets available for
plan benefits $844,048,202 $305,630,730 $144,646,799 $114,405,642 $98,082,498 $100,371,729 $1,607,185,600
============ ============ ============ ============ =========== ============ ==============<PAGE>
PAGE 11
I. Fund Data: (cont.) The following is a summary of net assets available for plan benefits by fund as of December 31:
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>
PAGE 12
I. Fund Data: (cont.) The following is a summary of changes in net assets available for plan benefits by fund for the year ended
December 31: 1994
--------------------------------------------------------------------------------------
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 net appreciation
(depreciation) of
investments $(28,144,544) $(4,277,949) $ 1,608,385 $(8,779,443) $ (39,593,551)
Interest $ 49,473,928 - 63,832 41,830 - 49,579,590
Dividends - 8,724,691 3,071,862 - 3,123,658 14,920,211
Capital gains
distributions - 19,613,629 - - - 19,613,629
------------ ------------ ------------ ------------ ----------- --------------
49,473,928 193,776 (1,142,255) 1,650,215 (5,655,785) 44,519,879
------------ ------------ ------------ ------------ ----------- --------------
Contributions and deferrals:
Employee deferrals 63,091,604 37,682,458 18,050,220 20,349,293 23,378,884 162,552,459
Employer contributions 18,681,778 9,934,779 5,005,943 5,098,091 5,204,051 43,924,642
Transfers in 2,039,388 995,506 958,399 594,949 710,560 5,298,802
------------ ------------ ------------ ------------ ----------- --------------
83,812,770 48,612,743 24,014,562 26,042,333 29,293,495 211,775,903
------------ ------------ ------------ ------------ ----------- --------------
Total additions 133,286,698 48,806,519 22,872,307 27,692,548 23,637,710 256,295,782
------------ ------------ ------------ ------------ ----------- --------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 62,672,646 13,388,206 7,312,787 4,402,201 4,061,834 91,837,674
Administrative expenses 449,892 142,534 67,300 53,948 52,524 766,198
Transfers out 384,350 71,461 226,923 21,384 27,528 731,646
Other deductions, net 677,495 420,009 203,287 126,048 46,067 $ 3,830,308 5,303,214
---------- ------------ ------------ ------------ ----------- ------------ --------------
Total deductions 64,184,383 14,022,210 7,810,297 4,603,581 4,187,953 3,830,308 98,638,732
------------ ------------ ------------ ------------ ----------- ------------ --------------
Interfund transfers (16,002,070) 10,926,746 5,718,370 (3,892,495) 3,249,449 - -
Loans to participants (29,170,237) (10,272,419) (6,367,957) (4,370,440) (3,730,530) 53,911,583 -
Repayment of loan principal 20,905,078 7,947,630 4,363,340 4,074,309 3,498,892 (40,789,249) -
------------ ------------ ------------ ------------ ----------- ------------ --------------<PAGE>
PAGE 13
I. Fund Data: (cont.) 1994
--------------------------------------------------------------------------------------
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>
Increase in net assets 44,835,086 43,386,266 18,775,763 18,900,341 22,467,568 9,292,026 157,657,050
Net assets, beginning of year 799,213,116 262,244,464 125,871,036 95,505,301 75,614,930 91,079,703 1,449,528,550
------------ ------------ ------------ ------------ ----------- ------------ --------------
Net assets, end of year $844,048,202 $305,630,730 $144,646,799 $114,404,642 $98,082,498 $100,371,729 $1,607,185,600
============ ============ ============ ============ =========== ============ ==============<PAGE>
PAGE 14
I. Fund Data: (cont.) The following is a summary of changes in net assets available for plan benefits by fund for the year
ended 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>
Additions to net assets
attributable to:
Investment income:
Change in net 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 - -
Loans to participants (31,849,947) (9,561,892) (5,451,356) (4,694,351) (1,817,014) 53,374,560 -
Repayment of loan principal 23,124,147 6,750,133 3,286,108 4,270,519 1,904,758 (39,335,665) -
------------ ------------ ------------ ----------- ----------- ---------- -----------<PAGE>
PAGE 15
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>
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
============ ============ ============ =========== =========== =========== ==============<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:
<CAPTION> 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 net 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
by participants 94,918,938 14,630,979 6,736,592 4,747,967 121,034,476
Other deductions, net 64,833 30,065 - 25,262 120,160
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) -
------------ ------------ ----------- ----------- ----------- --------------
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
------------ ------------ ----------- ----------- ----------- --------------<PAGE>
PAGE 17
<CAPTION>
1992
-------------------------------------------------------------------------------
Guaranteed Raytheon Stock
Income Equity Common Index Loan
Fund Fund Stock Fund Fund Fund Total
---------- ------ ---------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
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>
</TABLE>
PAGE 18
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/ Gail P. Anderson
Gail P. Anderson
Vice President - Human Resources
DATE June 28, 1995<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 2, 1995 on
our audits of the financial statements of the Raytheon Savings and Investment
Plan as of December 31, 1994 and 1993 and for each of the three years in the
period ended December 31, 1994, 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 L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 23, 1995<PAGE>
PAGE 1
EXHIBIT 99.1b
RAYTHEON SAVINGS AND INVESTMENT PLAN
Provisions in Effect as of January 1, 1995
COMPANIES PARTICIPATING IN THE RAYTHEON SAVINGS AND INVESTMENT PLAN
Raytheon Company
Raytheon Air Control Company
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 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
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
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
Raytheon Services Nevada Company effective 11/5/90
United Engineers & Constructors International, Inc. effective 3/23/93
UE&C-Catalytic, Inc. effective 3/23/93
Stearns Catalytic Corporation effective 3/23/93
United Architects, Ltd. effective 3/23/93 <PAGE>
PAGE 2
UCI, Ltd. effective 3/23/93
Stearns-Roger Export Ltd. effective 3/23/93
Catalytic Industrial Maintenance Co., Inc. effective 3/23/93
United Engineers Far East, Ltd. effective 3/23/93
Jackson & Moreland International, Inc. effective 3/23/93
U.E.&C. (Canada) Ltd. effective 3/23/93
United Engineers International, Inc. effective 3/23/93
United Mid-East, Inc. effective 3/23/93
United Engineers & Constructors of Ireland, Ltd. effective 3/23/93
UE, Inc. effective 3/23/93
Energy Overseas International, Inc. effective 3/23/93
UE&C Nuclear Inc. effective 3/23/93
United Engineers & Constructors Midwest, Inc. effective 3/23/93
United Module Fabricators, Inc. effective 3/23/93
Specialty Technical Services, Inc. effective 3/23/93
UE&C Urban Services Corporation effective 3/23/93
Stearns Catalytic Michigan, Inc. effective 3/23/93
Badger Catalytic Ltd. effective 3/23/93
Asia Badger (Malaysia) Sdn Bhd effective 5/12/93
Asia Badger, Inc. (Delaware) effective 5/12/93
Badger B.V. (Netherlands) effective 5/12/93
Badger Energy, Inc. effective 5/12/93
Badger Engineering and Construction (Pty) Ltd. effective 5/12/93
Badger Africa (Pty) Ltd. effective 5/12/93
Badger Engineers & Constructors, Inc. effective 5/12/93
Badger Engineers, Inc. effective 5/12/93
Badger G.m.b.H. effective 5/12/93
Badger Italiana S.r.l. effective 5/12/93
Badger Middle East, Inc. effective 5/12/93
Badger Trading Company effective 5/12/93
Canadian Badger Company Limited effective 5/12/93
Chemical Process Corporation effective 5/12/93
Gulf Design Corporation, Inc. effective 5/12/93
McBride-Ratcliff and Associates, Inc. effective 5/12/93
Societe Francaise Badger S.a.r.l. effective 5/12/93
Raytheon-Ebasco Indonesia Ltd.
(formerly Badger Plants, Inc.) effective 5/12/93
Raytheon-Ebasco Overseas Ltd. (formerly
Badger Overseas Limited) effective 5/12/93
Raytheon Corporate Jets, Inc. effective 8/6/93
Range Systems Engineering Co. effective 10/1/93
Raytheon Constructors, Inc. effective 1/1/94
Arkansas Aerospace, Inc. effective 7/1/94 <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.
The Plan is intended to constitute a plan described in Section 404(c) of the
Employee Retirement Income Security Act and Title 29 of the Code of Federal
Regulations, 2250.44(c)-1. Participants in the Plan are responsible for
selecting their own investment opportunities from the options available under
the Plan and the Plan fiduciaries are relieved of any liability for any losses
which are a direct and necessary result of investment instructions given by a
participant or beneficiary.
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 Pay Period in January 1984, or
any subsequent Pay Period 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 Pay Period 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 Pay Period 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 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.
Enrollment will be effective as of the first administratively feasible Pay
Period following completion of enrollment. The Administrator in its
discretion may from time to time make exceptions and adjustments in the<PAGE>
PAGE 4
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 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 by
communicating with Fidelity and providing all of the information requested by
Fidelity. The renewal of Elective Deferrals will be effective as of the first
administrtively feasible Pay Period following receipt by Fidelity of the
requested information.
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 seventeen percent
(17%) provided, however, that, effective for any Plan Year beginning on or
after January 1, 1987, in no event may the amount of Elective Deferrals to the
Plan, when taken into account with all other elective deferrals (as defined in
Code Section 401(g)) made by a Participant under any other plan maintained by
the Employer, exceed $7,000 adjusted for increases in the cost of living under
Code Section 402(g) in any calendar year. If a Participant participates in
another plan or arrangement which is not maintained by the Employer and which
permits elective deferrals in any calendar year and his total Elective
Deferrals under the Plan and other plan(s) exceed $7,000 (as adjusted) in a
calendar year, he may request to receive a distribution of the amount of the
excess deferral (a deferral in excess of $7,000 (as adjusted) that is
attributable to Elective Deferrals to this plan) notwithstanding any
limitations on distributions contained in the Plan. Such distribution shall
be made by the April 15 following the Plan Year in which the Elective
Deferrals were made, provided that the Participant notifies the Administrator
of the amount of the excess deferral that is attributable to Elective
Deferrals to the Plan and requests such a distribution. The Participant's
notice must be received by the Administrator no later than the March 1
following the Plan Year of the excess deferral. In the absence of such
notice, the amount of such excess deferral attributable to Elective Deferrals
to this Plan shall be subject to all limitations on withdrawals and
distributions in the Plan. In addition to distributing excess deferrals at
the request of the Participant, the Administrator may distribute any
deferrals<PAGE>
PAGE 5
made under this Plan or any other plan of the Employer in excess of the
statutory maximum deferral of $7,000 (as adjusted). For this purpose as
provided in 26 CFR 1.402-1(e)(2), a Participant is deemed to notify the
Administrator of any excess deferrals that arise by taking into account only
those Elective Deferrals made to this Plan and any other plans of this
Employer and to request that such excess deferrals be distributed by the Plan
Administrator. The distribution of excess deferrals will include any earnings
or be reduced by any loss allocable to the excess deferrals pursuant to the
Plan method of allocating earnings or losses and calculated to the last day of
the Plan Year.
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. Limitations on Elective Deferrals --
(a) In no event may Elective Deferrals made on behalf of all
Higher Paid Eligible Employees with respect to any Plan Year result in an
Actual Deferral Percentage for such group of Higher Paid Eligible Employees
which exceeds the greater of (i) or (ii) where:
(i) is an amount equal to 125 percent of the Actual Deferral
Percentage for all Non-Higher Paid Eligible Employees who have satisfied the
eligibility requirements of Article II with respect to such Plan Year; and
(ii) is an amount equal to the Actual Deferral Percentage
for all Non-Higher Paid Eligible Employees who have satisfied the eligibility
requirements of Article II with respect to such Plan Year and two percent
(2%), provided that such amount does not exceed 200 percent of such Actual
Deferral Percentage.
(b) The Administrator shall be authorized to implement rules
authorizing or requiring reductions in Elective Deferrals that may be made by
Higher Paid Eligible Employees during the Plan Year (prior to any
contributions to the Trust) so that the limitation of Section 3.3(a) is
satisfied.
(c) The Company may in its discretion make Qualified Nonelective
Contributions to the Accounts of certain Non-Higher Paid Eligible Employees to
the extent required to satisfy the limitations of Section 3.3(a).
(d) If the limitation under Section 3.3(a) is exceeded in any
Plan Year, the Excess amounts made on behalf of Higher Paid Eligible Employees
with respect to a Plan Year (and earnings allocable thereto) shall then be
distributed to such Employees as soon as practicable after the end of such
Plan Year, but no later than the last day of the immediately following Plan
Year. The Excess Amounts distributed shall include Elective Deferrals and the
income allocable thereto. The amount of income allocable to Excess Amounts
shall be determined in accordance with the regulations issued under 401(k) of
the Code and shall include income for the Plan Year for which the Excess
Amounts were made. Any such distributions shall be reduced by the amount of<PAGE>
PAGE 6
any distributions made pursuant to Section 3.2 above.
(e) The Administrator may utilize any combination of the methods
described in Sections 3.3(b), (c) and (d) to assure that the limitations of
Section 3.3(a) are satisfied.
(f) For purposes of this Section 3.3, the following definitions
and special rules shall apply:
(i) the term "Annual Earnings" means the base pay; bonuses;
overtime; incentive pay (excluding any income received in the exercise of any
qualified or nonqualified stock option); commissions, foreign service
allowance; completion allowance; awards; instructor pay; amounts reflected on
an Employee's W-2 form for the cost of group term life insurance, personal use
of Company cars and tax assistance; supervisory differentials and shift
premiums actually paid to an Employee in each Plan Year.
(ii) The term "Actual Deferral Percentage" shall mean, with
respect to any group of actively employed Eligible Employees who have
satisfied the eligibility requirements of Article II for a Plan Year, the
average of the ratios, calculated separately for each such Eligible Employee
in the group of:
(A) The amount of Elective Deferrals paid to the Trust Fund for such
Plan Year, divided by
(B) The Eligible Employee's Annual Earnings, including any Elective
Deferrals made by Companies to the Plan on behalf of the Eligible Employee and
any pre-tax elective contributions under a "cafeteria plan" (as defined in
Section 125 of the Code and applicable regulations) maintained by the
Companies for such Plan Year.
Elective Deferrals shall be taken into account for a Plan Year only if such
amounts are allocated to the Eligible Employee's Account as of a date within
that Plan Year. For this purpose, an Elective Deferral is considered
allocated as of a date within a Plan Year if the allocation is not contingent
on participation or performance of services after such date and the Elective
Deferral is actually paid to the Trust Fund no later than 12 months after the
Plan Year to which the contribution relates.
(iii) The term "Excess Amounts" shall mean with respect to
each Higher Paid Eligible Employee who has satisfied the eligibility
requirements of Article II for a Plan Year, the amount equal to total Elective
Deferrals made on behalf of such Employee (determined prior to the application
of the leveling procedure described below) minus the product of the Employee's
Actual Deferral Percentage (determined after the leveling procedure described
below) multiplied by the amount specified in Section 3.3(f)(ii)(B) above. In
accordance with the regulations issued under Section 401(k) of the Code,
Excess Amounts shall be determined by a leveling procedure under which the
Actual Deferral Percentage of the Higher Paid Eligible Employee with the
highest such percentage shall be reduced to the extent required to enable the
limitation of Section 3.3(a) to be satisfied or, if it results in a lower
reduction, to the extent required to cause such Higher Paid Eligible<PAGE>
PAGE 7
Employee's Actual Deferral Percentage to equal the Actual Deferral Percentage
of the Higher Paid Eligible Employee with the next highest Actual Deferral
Percentage. This leveling procedure shall be repeated until the limitation of
Section 3.3(a) is satisfied.
(iv) The term "Qualified Nonelective Contributions" means
contributions that are made pursuant to Sections 3.3(c) or 3.8(c), meet the
requirements of Section 401(m)(4)(C) of the Code and the regulations issued
thereunder, and which are designated as a Qualified Nonelective Contribution
for purposes of satisfying the limitations of Sections 3.3(c) or 3.8(c).
Qualified Nonelective Contributions shall be nonforfeitable when made and are
distributable only in accordance with the distribution and withdrawal
provisions that are applicable to Elective Deferrals under the Plan; provided,
however, that Qualified Nonelective Contributions may not be withdrawn on
account of financial hardship. If any Qualified Nonelective Contributions are
made, the Company shall keep such records as necessary to reflect the amount
of such contributions made for purposes of satisfying the limitations of
Sections 3.3(c) or 3.8(c).
(v) In the event the Companies maintain two or more plans
that are treated as a single plan for purposes of Sections 401(a)(4) and
410(b) of the Code (other than Section 410(b)(2)(A)(ii) of the Code), all
elective deferrals made under the two plans shall be treated as made under a
single plan, and if two or more of such plans are permissively aggregated for
purposes of Section 401(k) of the Code, such plans shall be treated as a
single plan for purposes of satisfying Sections 401(a)(4) and 410(b) of the
Code.
(vi) In determining the Actual Deferral Percentage of a
Higher Paid Eligible Employee, all cash or deferred arrangements in which such
Higher Paid Eligible Employee is eligible to participate shall be treated as a
single arrangement.
(vii) The family aggregation rules of Section 414(q)(6) of
the Code shall apply to any Higher Paid Eligible Employee who is a five
percent owner or one of the ten most highly compensated Higher Paid Eligible
Employees. The Actual Deferral Percentage for the family group, which is
treated as one Higher Paid Eligible Employee, is the Actual Deferral
percentage determined by combining the contributions and compensation of all
eligible Family Members. Except to the extent taken into account in this
paragraph (vii), the contributions and compensation of all Family Members are
disregarded in determining the Actual Deferral Percentages for all Employees.
(g) The limitations of this Section 3.3 shall apply to Plan
Years beginning on or after January 1, 1987.
3.4. 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 $150,000 adjusted to
changes in the cost of living as provided in Section 415(d) of the Code. <PAGE>
PAGE 8
3.5. 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 Pay Period subsequent to
notice from the Administrator that Elective Deferrals may be increased as of a
specified Pay Period. This election must be made in accordance with the
procedure described in Section 3.5.
3.6. 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 administratively feasible Pay Period.
3.7. 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 the next administratively feasible Pay Period
subsequent to telephone notification to Fidelity.
3.8. Matching Contributions -- For each Plan Year, commencing on or
after January 1, 1994, 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 that: (i) for any
pay period the matching amount shall not exceed three percent (3%) of the
Participant's Eligible Compensation for that pay period; and (ii) as soon as
administratively feasible subsequent to the end of the Plan Year, any
differential, if any, by which an amount equal to one-half (1/2) of the
Participant's Elective Deferral for the Plan Year exceeds the amount of
Matching Contributions actually made to Participant for that year will be paid
into the Participant's Account.
3.9. 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 be effective as of the first day of the month immediately
following a month in which a Severance from Service occurs. 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.
3.10. Rollover Contributions --
(a) An Employee of Seismograph Service Corporation who is a<PAGE>
PAGE 9
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;
(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 Pay Period 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<PAGE>
PAGE 10
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.
3.11. 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 contributions.
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 one percent
(1%) 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;
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 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.
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 l6b 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. <PAGE>
PAGE 11
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 first administratively feasible Business Day subsequent to telephone
notice to Fidelity. Any changes must be made either in increments of one
percent (1%) of the Participant's Account or in a specified whole dollar
amount and must result in a total investment of one hundred percent (100%) of
the Participant's Account.
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 first
administratively feasible Business Day following telephone notice to Fidelity.
Such transfers must be made in either one percent (1%) increments of the
entire Account or in a specified amount in whole dollars and, as of the
completion of the transfer, must result in investment of one hundred percent
(100%) of the Account. Transfers shall be effected by 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 cash and unitized shares of stock.
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 <PAGE>
PAGE 12
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:
(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, and service with Unimac
Company, Inc. by an Employee who became an Employee of Speed Queen Company by
reason of the purchase by Speed Queen of the assets of Unimac Company, Inc.
will be credited to an Eligible Employee as vesting service under this Plan);
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 Sections 2.1 or 2.2 (except that, in
applying this paragraph to Employees on the payroll of Arkansas Aerospace Inc.
as of June 30, 1994, who, as of July 1, 1994, become Participants in this
Plan, the Employment Commencement Date (or, if a Period of Severance occurred
since such date, the Reemployment Commencement Date) with Arkansas Aerospace
Inc. shall be deemed to be the date of commencement of participation under
this Plan and, in applying this paragraph to Employees on the payroll of Speed
Queen Company as of December 31, 1994, who, as of January 1, 1995, become
Participants in this Plan, the date the Employee commenced participation in
the Unimac Company, Inc. Retirement Plan shall be deemed to be the date of
commencement of participation under this Plan);
(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<PAGE>
PAGE 13
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 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 -- While in a Period of
Service, a Participant may withdraw assets from his or her Account as follows:
(a) all or a portion of the Participant's Employee Account upon
attainment of age 59 1/2 or
(b) a distributable amount (as defined in Treas. Reg.
1.401(k)-1(c)(2) on account of a hardship as defined in the regulation. A
distribution is made on account of a hardship only if the distribution both is
made on account of an immediate and heavy financial need of the Participant<PAGE>
PAGE 14
and is necessary to satisfy the financial need. The distributable amount is
equal to the Participant's total Elective Deferrals as of the date of
distribution reduced by the amount of previous distributions on account of
hardship and increased by that portion of income allocable to Elective
Deferrals which was credited to the Participant's Account as of December 31,
1988.
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. Requirements For Financial Hardship Withdrawals --
(a) A Participant requesting a withdrawal of the distributable
amount of the Participant's Employee Account due to reasons of immediate and
heavy financial need must 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 of the existence of an immediate and heavy financial need and the fact
that the need will be satisfied by the requested distribution.
(b) The Participant shall represent that this financial need
cannot be satisfied by any of the following sources: through reimbursement or
compensation by insurance or otherwise; by liquidation of the Participant's
assets; by cessation of Elective Deferrals under the Plan; or by other
distributions or non-taxable (at the time of the loan) loans currently
available from plans maintained by the Employer or by any other employer, or
by borrowing from commercial sources on reasonable commercial terms.
(c) For purposes of Section 6.2, "immediate and heavy financial
need" is limited to financial need arising from the following specific causes:
expenses for medical care (as described in 213(d) of the Code) incurred by the
Participant, the Participant's spouse or any dependents (as defined in 152 of
the Code) of the Participant, or necessary for these persons to obtain medical<PAGE>
PAGE 15
care described in 213(d); costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments); payment
of tuition and related educational expenses for the next twelve months of
post-secondary education for the Participant, or the Participant's spouse,
children or dependents (as defined in 152 of the Code); 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.
(d) If a Participant receives a withdrawal for reasons of
financial hardship, his or her Elective Deferrals shall be reduced to six
percent (6%), if in excess thereof as of the date of distribution, and shall
not be increased during the twelve months immediately subsequent to the date
of distribution.
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 14.12), death, Severance from Service (as defined in
Section 14.46) or Layoff (as defined in Section 14.26) 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 and a telephone request by the
Participant to Fidelity for the distribution. 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, 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. 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) 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<PAGE>
PAGE 16
not receiving an immediate distribution of the amount in his or her Account.
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, distribution
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
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 Vice President, Human Resources,<PAGE>
PAGE 17
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 l5 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 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<PAGE>
PAGE 18
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 subparagraph (2) of Paragraph (d) of 26 CFR 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<PAGE>
PAGE 19
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.
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.<PAGE>
PAGE 20
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.
(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<PAGE>
PAGE 21
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 TopHeavy 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 22
(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
(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.<PAGE>
PAGE 23
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.
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.<PAGE>
PAGE 24
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 Vice President General Counsel, and the 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.
(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<PAGE>
PAGE 25
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 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.<PAGE>
PAGE 26
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 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<PAGE>
PAGE 27
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 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<PAGE>
PAGE 28
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 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<PAGE>
PAGE 29
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.
14.8 "Business Day" means a day on which Fidelity is open for general
business.
14.9. "Company" means Raytheon Company but shall not include a Division,<PAGE>
PAGE 30
Operation or similar cohesive group of Raytheon Company excluded by the Board
of Directors of Raytheon Company.
14.10. "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.
14.11. "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.
14.12. "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.
14.13. "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.
14.14. "Elective Deferral" means a voluntary reduction of
Participant's compensation in accordance with Section 2.3 hereof.
14.15. "Eligible Compensation" means the base pay, supervisory
differentials, shift premiums and, effective January 1, 1985, sales
commissions, excluding all other earnings from any source.
14.16. "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.
14.17. "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.
14.18."Employee Account" means that portion of Participant's Account<PAGE>
PAGE 31
which is attributable to Elective Deferrals, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.19. "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.
14.20. "Employment Commencement Date" is the date on which the
Employee first performs an Hour of Service with the Employer.
14.21. "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.
14.22. "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
2530.200b-2(b) and (c) for computing an "Hour of Service" are incorporated
herein by reference.
14.26. "Layoff" means an involuntary interruption of service due
to<PAGE>
PAGE 32
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 Period" means a scheduled period for payment of wages
or salaries.
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 33
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<PAGE>
PAGE 34
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.
14.48. "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 Act of 1934
For the Fiscal Year Ended
December 31, 1994
------------
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, 1994 and 1993, 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, 1994. 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, 1994 and 1993, and the changes in net assets available
for plan benefits for each of the three years in the period ended December
31, 1994 in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 2, 1995<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, 1994 and 1993
1994 1993
---- ----
Assets:
Investments, at fair value
(Notes B. E, F and H) $188,312,510 $170,012,872
Receivables:
Accrued investment income 1,718 714
Employee deferrals 298,819 475,055
Employer contributions 88,525 159,250
Loans receivable from
participants 22,495,708 19,366,838
Cash and cash equivalents 2,449,889 300,682
------------ ------------
Total assets 213,647,169 190,315,411
------------ ------------
Liabilities:
Payable for outstanding
purchases 51,546 -
Administrative expenses 27,818 40,518
Forfeitures 61,529 56,531
----------- ------------
Total liabilities 140,893 97,049
----------- ------------
Net assets available for plan
benefits $213,506,276 $190,218,362
============ ============
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, 1994, 1993 and 1992
1994 1993 1992
Additions to net assets
attributable to:
Investment Income
(Notes B, E and H):
Change in net appreciation
(depreciation) of investments $ (3,441,573) $ 7,282,777 $ 3,926,196
Interest 7,408,632 7,379,266 6,766,372
Dividends 1,392,678 1,005,307 806,094
Capital gains distributions 1,631,540 236,720 -
------------ ------------ -----------
6,991,277 15,904,070 11,498,662
Contributions and deferrals:
Employee deferrals 25,890,394 26,966,573 29,887,121
Employer contributions 8,335,813 9,262,714 9,271,398
Other additions (Note G) 5,058 - 120,160
------------ ------------ ------------
34,231,265 36,229,287 39,278,679
Total additions 41,222,542 52,133,357 50,777,341
------------ ------------ ------------
Deductions from net assets
attributable to:
Benefits to and withdrawals by
participants 16,033,076 9,159,020 6,725,742
Other deductions (Note G) 1,784,260 273,041 -
Administrative expenses 117,292 193,265 265,350
------------ ------------ -----------
Total deductions 17,934,628 9,625,326 6,991,092
------------ ------------ -----------
Increase in net assets 23,287,914 42,508,031 43,786,249
Net assets, beginning of year 190,218,362 147,710,331 103,924,082
------------ ------------ ------------
Net assets, end of year $213,506,276 $190,218,362 $147,710,331
============ ============ =============
The accompanying notes are an integral part of the financial statements.<PAGE>
PAGE 5
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
A. Description of Plan:
General
The following description of the Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees (the "Plan") provides only
general information. Participants should refer to the Plan agreement for
a complete description of the Plan's provisions. 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 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, 1994 and 1993 were 12,160 and 15,854,
respectively. Participants by fund were as follows as of December 31,
1994:
Guaranteed Income Fund 10,747
Equity Fund 4,490
Raytheon Common Stock Fund 4,219
Stock Index Fund 2,547
Balanced Fund 1,413
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 were allowed to defer to the Plan up to 17% of their
salaries effective January 1, 1994; previously, the maximum deferral was
15%. 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, 1994, the annual employee deferral for a participant cannot
exceed $9,240. Rollover contributions from other qualified plans are
accepted by the Plan. Participants may invest their deferrals in
increments of 1% 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)<PAGE>
PAGE 6
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 SEP 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. <PAGE>
PAGE 7
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 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
vested 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.
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. The Plan will adopt the AICPA<PAGE>
PAGE 8
Statement of Positin 94-4 "Reporting of Investmebt Contracts Held by
Health and Welfare Benefit Plans and Defined-Contribution Pension
Plans," in 1995. The adoption of this statement is not expected to have
a material financial impact on the Plan. 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.
Benefits are recorded when paid.
C. Federal Income Tax Status:
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:
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.<PAGE>
PAGE 9
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 6.07%, 6.68% and 6.01%
and the effective annual rates were 6.26%, 6.91% and 6.19%,
respectively, at December 31, 1994. The values of the portfolios managed
by Metropolitan Life Insurance Company, the Prudential Asset Management
Company and Banker's Trust were $47,305,558, $30,609,465 and
$47,522,639, respectively, at December 31, 1994. The values at December
31, 1993 held with 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.
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, 1994,
1993 and 1992, purchases of Raytheon Company Common Stock amounted to
$2,411,818, $3,468,690 and $3,891,844, respectively. Sales of Raytheon
Company Common Stock amounted to $605,934, $701,287 and $172,464 in
1994, 1993 and 1992, respectively. <PAGE>
PAGE 10
G. Other Additions and Deductions:
Other additions and deductions represent transfers of participant
accounts between the Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees and the Raytheon Savings and Investment Plan,
the Raytheon Employee Savings and Investment Plan and the Raytheon
Subsidiary Savings and Investment Plan for those participants who
changed plans during the year.<PAGE>
PAGE 11
<TABLE>
H. Fund Data: The following is a summary of net assets available for plan benefits by fund as of December 31:
<CAPTION> 1994
-------------------------------------------------------------------------------------
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 $125,437,662 $125,437,662
Fidelity Equity Income Fund
(823,958 shares) - $25,295,510 25,295,510
Raytheon Company Common Stock
(332,579 shares) - - $21,243,461 21,243,461
BT Pyramid Equity Index Fund
(9,934 shares) - - - $ 9,957,963 9,957,963
Fidelity Balanced Fund
(518,952 shares) - - - - $6,377,914 6,377,914
------------ ----------- ----------- ---------- ---------- ------------
Total investments 125,437,662 25,295,510 21,243,461 9,957,963 6,377,914 188,312,510
Receivables:
Accrued investment income - - 1,206 512 - 1,718
Employee deferrals 179,078 35,799 30,593 37,894 15,455 298,819
Employer contributions 59,570 10,807 8,673 5,317 4,158 88,525
Loans receivable from
participants - - - - - $22,495,708 22,495,708
Cash and cash equivalents 2,062,868 - 278,568 108,453 - - 2,449,889
------------ ----------- ----------- ---------- ---------- ----------- -------------
Total assets 127,739,178 22,342,116 21,562,501 10,110,139 6,397,527 22,495,708 213,647,169
------------ ----------- ----------- ---------- ---------- ----------- -------------
Liabilities:
Payable for outstanding
purchases - - 51,546 - - - 51,546
Administrative expenses 18,341 3,639 3,199 1,721 918 - 27,818
Forfeitures 61,529 - - - - - 61,529
------------ ----------- ----------- ---------- ---------- ----------- ------------
Total liabilities 79,870 3,639 54,745 1,721 918 - 140,893
------------ ----------- ----------- ---------- ---------- ----------- ------------
Net assets available for
plan benefits $127,659,308 $25,338,477 $21,507,756 $10,108,418 $6,396,609 $22,495,708 $213,506,276
============ =========== =========== =========== ========== =========== ============<PAGE>
PAGE 12
H. Fund Data: (cont.) 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
------------ ----------- ----------- ---------- ---------- ----------- ------------
Net assets available for
plan benefits $116,519,060 $22,277,101 $18,502,951 $8,692,319 $4,860,093 $19,366,838 $190,218,362
============ =========== =========== ========== ========== =========== ============<PAGE>
PAGE 13
H. Fund Data:(cont): The following is a summary of changes in net assets available for plan benefits by fund for the year
ended December 31:
<CAPTION> 1994
--------------------------------------------------------------------------------------
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 net appreciation
(depreciation) of
investments $(2,343,460) $ (646,461) $ 136,803 $ (588,455) $ (3,441,573)
Interest $ 7,395,467 - 9,484 3,681 - 7,408,632
Dividends - 729,374 456,166 - 207,138 1,392,678
Capital gains
distributions - 1,631,540 - - - 1,631,540
------------ ----------- ----------- ---------- ---------- -------------
7,395,467 17,454 (180,811) 140,484 (381,317) 6,991,277
------------ ----------- ----------- ---------- ---------- -------------
Contributions and deferrals:
Employee deferrals 16,032,713 3,470,698 2,940,576 1,897,320 1,549,087 25,890,394
Employer contributions 5,364,007 1,056,998 927,180 567,354 420,274 8,335,813
Other additions, net - - - - 5,058 5,058
------------ ----------- ----------- ---------- ---------- -------------
21,396,720 4,527,696 3,867,756 2,464,674 1,974,419 34,231,265
------------ ----------- ----------- ---------- ---------- -------------
Total additions 28,792,187 4,545,150 3,686,945 2,605,158 1,593,102 41,222,542
------------ ----------- ----------- ---------- ---------- -------------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 11,869,555 1,508,782 1,765,481 586,126 303,132 16,033,076
Other deductions, net 21,737 9,482 26,965 3,653 - $ 1,722,423 1,784,260
Administrative expenses 81,603 15,058 10,236 5,974 4,421 - 117,292
------------ ----------- ----------- ---------- ---------- ----------- ------------
Total deductions 11,972,895 1,533,322 1,802,682 595,753 307,553 1,722,423 17,934,628
Interfund transfers (2,290,825) 643,558 1,751,061 (415,025) 311,231 - -
Loans to participants (10,355,925) (1,906,282) (1,755,565) (864,359) (567,789) 15,449,920 -
Repayment of loan principal 6,967,706 1,312,272 1,125,046 686,078 507,525 (10,598,627) -
------------ ----------- ----------- ---------- ---------- ----------- -----------
Increase in net assets 11,140,248 3,061,376 3,004,805 1,416,099 1,536,516 3,128,870 23,287,914
Net assets, beginning
of year 116,519,060 22,277,101 18,502,951 8,692,319 4,860,093 19,366,838 190,218,362
------------ ----------- ----------- ----------- ---------- ----------- ------------
Net assets, end of year $127,659,308 $25,338,477 $21,507,756 $10,108,418 $6,396,609 $22,495,708 $213,506,276
============ =========== =========== ========== ========== =========== ============<PAGE>
PAGE 14
H. Fund Data (cont): The following is a summary of changes in net assets available for plan benefits by fund for the year
ended 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>
Additions to net assets
attributable to:
Investment income:
Change in net 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) -
------------ ----------- ----------- ---------- ---------- ----------- -----------
Increase in net assets 16,011,514 7,020,966 6,315,315 2,404,489 4,860,093 5,895,654 42,508,031
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>
PAGE 15
H. Fund Data (Cont.): The following is a summary of changes in net assets by fund for the year ended December 31:
<CAPTION>
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 net 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) -
------------ ----------- ----------- ----------- ----------- ------------
Increase in net assets 23,893,847 4,537,713 3,904,628 4,220,874 7,229,187 43,786,249
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
============ =========== =========== ========== =========== ============
/TABLE
<PAGE>
PAGE 16
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/ Gail P. Anderson
Gail P. Anderson
Vice President - Human Resources
DATE June , 1995<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 2, 1995 on our audits
of the financial statements of the Raytheon Savings and Investment Plan for
Specified Hourly Payroll Employees as of December 31, 1994 and 1993 and for
each of the three years in the period ended December 31, 1994, 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 L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 23, 1995<PAGE>
PAGE 1
EXHIBIT 99.2b
RAYTHEON SAVINGS AND INVESTMENT PLAN FOR
SPECIFIED HOURLY PAYROLL EMPLOYEES
Provisions in Effect as of January 1, 1995
ARTICLE I - PREAMBLE
The Raytheon Savings and Investment Plan for Specified Hourly Payroll
Employees, which became effective on June 30, 1986, 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 June 30, 1986.
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 XIII unless the context indicates otherwise.
The Plan is intended to constitute a plan described in Section 404(c) of
the Employee Retirement Income Security Act and Title 29 of the Code of
Federal Regulations, Section 2250.44(c)-1. Participants in the Plan are
responsible for selecting their own investment opportunities from the
options available under the Plan and the Plan fiduciaries are relieved of
any liability for any losses which are a direct and necessary result of
investment instructions given by a participant or beneficiary.
ARTICLE II - ELIGIBILITY
2.1. Eligibility Requirements -- Each 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, 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. Procedure for Joining the Plan -- Each Eligible Employee who meets
the requirements of Section 2.1 may join the Plan 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. Enrollment will be
effective as of the first administratively feasible Pay Period following
completion of enrollment. The Administrator in its discretion may from<PAGE>
PAGE 2
time to time make exceptions and adjustments in the foregoing procedure on
a uniform and nondiscriminatory basis.
2.3. 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 by communicating with Fidelity and providing all
of the information requested by Fidelity. The renewal of Elective
Deferrals will be effective as of the first administratively feasible Pay
Period following receipt by Fidelity of the requested information.
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 seventeen percent
(17%) provided, however, that, effective for any Plan Year beginning on or
after January 1, 1987, in no event may the amount of Elective Deferrals to
the Plan, when taken into account with all other elective deferrals (as
defined in Code Section 401(g)) made by a Participant under any other plan
maintained by the Employer, exceed $7,000 adjusted for increases in the
cost of living under Code Section 402(g) in any calendar year. If a
Participant participates in another plan or arrangement which is not
maintained by the Employer and which permits elective deferrals in any
calendar year and his total Elective Deferrals under the Plan and other
plan(s) exceed $7,000 (as adjusted) in a calendar year, he may request to
receive a distribution of the amount of the excess deferral (a deferral in
excess of $7,000 (as adjusted) that is attributable to Elective Deferrals
to this plan) notwithstanding any limitations on distributions contained in
the Plan. Such distribution shall be made by the April 15 following the
Plan Year in which the Elective Deferrals were made, provided that the
Participant notifies the Administrator of the amount of the excess deferral
that is attributable to Elective Deferrals to the Plan and requests such a
distribution. The Participant's notice must be received by the
Administrator no later than the March 1 following the Plan Year of the
excess deferral. In the absence of such notice, the amount of such excess
deferral attributable to Elective Deferrals to this Plan shall be subject
to all limitations on withdrawals and distributions in the Plan. In
addition to distributing excess deferrals at the request of the
Participant, the Administrator may distribute any deferrals made under this
Plan or any other plan of the Employer in excess of the statutory maximum
deferral of $7,000 (as adjusted). For this purpose as provided in 26 CFR<PAGE>
PAGE 3
Section 1.402-1(e)(2), a Participant is deemed to notify the Administrator
of any excess deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plans of this Employer
and to request that such excess deferrals be distributed by the Plan
Administrator. The distribution of excess deferrals will include any
earnings or be reduced by any loss allocable to the excess deferrals
pursuant to the Plan method of allocating earnings or losses and calculated
to the last day of the Plan Year.
3.3. Limitations on Elective Deferrals --
(a) In no event may Elective Deferrals made on behalf of all Higher Paid
Eligible Employees with respect to any Plan Year result in an Actual
Deferral Percentage for such group of Higher Paid Eligible Employees which
exceeds the greater of (i) or (ii) where:
(i) is an amount equal to 125 percent of the Actual Deferral Percentage for
all Non-Higher Paid Eligible Employees who have satisfied the eligibility
requirements of Article II with respect to such Plan Year; and
(ii) is an amount equal to the Actual Deferral Percentage for all
Non-Higher Paid Eligible Employees who have satisfied the eligibility
requirements of Article II with respect to such Plan Year and two percent
(2%), provided that such amount does not exceed 200 percent of such Actual
Deferral Percentage.
(b) The Administrator shall be authorized to implement rules authorizing
or requiring reductions in Elective Deferrals that may be made by Higher
Paid Eligible Employees during the Plan Year (prior to any contributions to
the Trust) so that the limitation of Section 3.3(a) is satisfied.
(c) The Company may in its discretion make Qualified Nonelective
Contributions to the Accounts of certain Non-Higher Paid Eligible Employees
to the extent required to satisfy the limitations of Section 3.3(a).
(d) If the limitation under Section 3.3(a) is exceeded in any Plan Year,
the Excess amounts made on behalf of Higher Paid Eligible Employees with
respect to a Plan Year (and earnings allocable thereto) shall then be
distributed to such Employees as soon as practicable after the end of such
Plan Year, but no later than the last day of the immediately following Plan
Year. The Excess Amounts distributed shall include Elective Deferrals and
the income allocable thereto. The amount of income allocable to Excess
Amounts shall be determined in accordance with the regulations issued under
Section 401(k) of the Code and shall include income for the Plan Year for
which the Excess Amounts were made. Any such distributions shall be
reduced by the amount of any distributions made pursuant to Section 3.2
above.
(e) The Administrator may utilize any combination of the methods described
in Sections 3.3(b), (c) and (d) to assure that the limitations of Section
3.3(a) are satisfied.<PAGE>
PAGE 4
(f) For purposes of this Section 3.3, the following definitions and
special rules shall apply:
(i) the term "Annual Earnings" means the base pay; bonuses; overtime;
incentive pay (excluding any income received in the exercise of any
qualified or nonqualified stock option); commissions, foreign service
allowance; completion allowance; awards; instructor pay; amounts reflected
on an Employee's W-2 form for the cost of group term life insurance,
personal use of Company cars and tax assistance; supervisory differentials
and shift premiums actually paid to an Employee in each Plan Year.
(ii) The term "Actual Deferral Percentage" shall mean, with respect to any
group of actively employed Eligible Employees who have satisfied the
eligibility requirements of Article II for a Plan Year, the average of the
ratios, calculated separately for each such Eligible Employee in the group
of:
(A) The amount of Elective Deferrals paid to the Trust Fund for such Plan
Year, divided by
(B) The Eligible Employee's Annual Earnings, including any Elective
Deferrals made by Companies to the Plan on behalf of the Eligible Employee
and any pre-tax elective contributions under a "cafeteria plan" (as defined
in Section 125 of the Code and applicable regulations) maintained by the
Companies for such Plan Year.
Elective Deferrals shall be taken into account for a Plan Year only if
such amounts are allocated to the Eligible Employee's Account as of a date
within that Plan Year. For this purpose, an Elective Deferral is
considered allocated as of a date within a Plan Year if the allocation is
not contingent on participation or performance of services after such date
and the Elective Deferral is actually paid to the Trust Fund no later than
12 months after the Plan Year to which the contribution relates.
(iii) The term "Excess Amounts" shall mean with respect to each Higher Paid
Eligible Employee who has satisfied the eligibility requirements of Article
II for a Plan Year, the amount equal to total Elective Deferrals made on
behalf of such Employee (determined prior to the application of the
leveling procedure described below) minus the product of the Employee's
Actual Deferral Percentage (determined after the leveling procedure
described below) multiplied by the amount specified in Section
3.3(f)(ii)(B) above. In accordance with the regulations issued under
Section 401(k) of the Code, Excess Amounts shall be determined by a
leveling procedure under which the Actual Deferral Percentage of the Higher
Paid Eligible Employee with the highest such percentage shall be reduced to
the extent required to enable the limitation of Section 3.3(a) to be
satisfied or, if it results in a lower reduction, to the extent required to
cause such Higher Paid Eligible Employee's Actual Deferral Percentage to
equal the Actual Deferral Percentage of the Higher Paid Eligible Employee
with the next highest Actual Deferral Percentage. This leveling procedure
shall be repeated until the limitation of Section 3.3(a) is satisfied.<PAGE>
PAGE 5
(iv) The term "Qualified Nonelective Contributions" means contributions
that are made pursuant to Sections 3.3(c) or 3.8(c), meet the requirements
of Section 401(m)(4)(C) of the Code and the regulations issued thereunder,
and which are designated as a Qualified Nonelective Contribution for
purposes of satisfying the limitations of Sections 3.3(c) or 3.8(c).
Qualified Nonelective Contributions shall be nonforfeitable when made and
are distributable only in accordance with the distribution and withdrawal
provisions that are applicable to Elective Deferrals under the Plan;
provided, however, that Qualified Nonelective Contributions may not be
withdrawn on account of financial hardship. If any Qualified Nonelective
Contributions are made, the Company shall keep such records as necessary to
reflect the amount of such contributions made for purposes of satisfying
the limitations of Sections 3.3(c) or 3.8(c).
(v) In the event the Companies maintain two or more plans that are treated
as a single plan for purposes of Sections 401(a)(4) and 410(b) of the Code
(other than Section 410(b)(2)(A)(ii) of the Code), all elective deferrals
made under the two plans shall be treated as made under a single plan, and
if two or more of such plans are permissively aggregated for purposes of
Section 401(k) of the Code, such plans shall be treated as a single plan
for purposes of satisfying Sections 401(a)(4) and 410(b) of the Code.
(vi) In determining the Actual Deferral Percentage of a Higher Paid
Eligible Employee, all cash or deferred arrangements in which such Higher
Paid Eligible Employee is eligible to participate shall be treated as a
single arrangement.
(vii) The family aggregation rules of Section 414(q)(6) of the Code shall
apply to any Higher Paid Eligible Employee who is a five percent owner or
one of the ten most highly compensated Higher Paid Eligible Employees. The
Actual Deferral Percentage for the family group, which is treated as one
Higher Paid Eligible Employee, is the Actual Deferral percentage determined
by combining the contributions and compensation of all eligible Family
Members. Except to the extent taken into account in this paragraph (vii),
the contributions and compensation of all Family Members are disregarded in
determining the Actual Deferral Percentages for all Employees.
(g) The limitations of this Section 3.3 shall apply to Plan Years beginning
on or after January 1, 1987.
3.4. 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 $150,000
adjusted to changes in the cost of living as provided in Section 415(d) of
the Code.
3.5. 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<PAGE>
PAGE 6
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.
3.6. 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 administratively feasible Pay Period.
3.7. 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 the next administratively
feasible Pay Period subsequent to telephone notification to Fidelity.
3.8. 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 that for any
pay period the matching amount shall not exceed three percent (3%) of the
Participant's Eligible Compensation for that pay period.
3.9. 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 be effective as of the first day of the month immediately
following a month in which a Severance from Service occurs. 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.
3.10. Rollover Contributions -- 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)(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:<PAGE>
PAGE 7
(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 to join the Plan;
(vi) rollover contributions transferred pursuant to this 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.
3.11. Refund of Matching Contributions to the Companies -Notwithstanding
the provisions of Article XI, 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 (l)
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 contributions.
ARTICLE IV - INVESTMENT OF ACCOUNTS<PAGE>
PAGE 8
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 one
percent (1%) 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;
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.
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.
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 first administratively feasible Business Day subsequent
to telephone notice to Fidelity. Any changes must be made either in
increments of one percent (1%) of the Participant's Account or in a
specified whole dollar amount and must result in a total investment of one
hundred percent (100%) of the Participant's Account.
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 first
administratively feasible Business Day following telephone notice to
Fidelity. Such transfers must be made in either one percent (1%)
increments of the entire Account or in a specified amount in whole dollars
and, as of the completion of the transfer, must result in investment of one
hundred percent (100%) of the Account. Transfers shall be effected by
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 cash and unitized shares of stock.<PAGE>
PAGE 9
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 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. 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:
(a) Completion of a Period of Service of five (5) years commencing on or
after June 30, 1986 (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 June 30, 1986); 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.
5.3. Break in Service Rules
(a) Periods of Service -- In determining the length of a Period of<PAGE>
PAGE 10
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 more than five (5) years
and less than said prior Period of Service.
(b) Periods of Severance -- In determining the length of a Period of
Service for purposes of Section 13.36, 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 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, 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 -- While in a Period of
Service, a Participant may withdraw assets from his or her Account as
follows:
(a) all or a portion of the Participant's Employee Account upon attainment
of age 59 1/2; or<PAGE>
PAGE 11
(b) a distributable amount (as defined in Treas. Reg. Section 1.401(k)-1(c)
(2)) on account of a hardship as defined in the regulation. A distribution
is made on account of a hardship only if the distribution both is made on
account of an immediate and heavy financial need of the Participant and is
necessary to satisfy the financial need. The distributable amount is equal
to the Participant's total Elective Deferrals as of the date of
distribution reduced by the amount of previous distributions on account of
hardship and increased by that portion of income allocable to Elective
Deferrals which was credited to the Participant's Account as of December
31, 1988.
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. Requirements For Financial Hardship Withdrawals --
(a) A Participant requesting a withdrawal of the distributable amount of
the Participant's Employee Account due to reasons of immediate and heavy
financial need must 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 of the existence of an immediate and heavy financial need and the
fact that the need will be satisfied by the requested distribution.
(b) The Participant shall represent that this financial need cannot be
satisfied by any of the following sources: through reimbursement or
compensation by insurance or otherwise; by liquidation of the Participant's
assets; by cessation of Elective Deferrals under the Plan; or by other
distributions or non-taxable (at the time of the loan) loans currently
available from plans maintained by the Employer or by any other employer,
or by borrowing from commercial sources on reasonable commercial terms<PAGE>
PAGE 12
(c) For purposes of Section 6.2, "immediate and heavy financial need" is
limited to financial need arising from the following specific causes:
expenses for medical care (as described in Section 213(d) of the Code)
incurred by the Participant, the Participant's spouse or any dependents (as
defined in Section 152 of the Code) of the Participant, or necessary for
these persons to obtain medical care described in Section 213(d); costs
directly related to the purchase of a principal residence for the
Participant (excluding mortgage payments); payment of tuition and related
educational expenses for the next twelve months of post-secondary education
for the Participant, or the Participant's spouse, children or dependents
(as defined in Section 152); 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.
(d) If a Participant receives a withdrawal for reasons of financial
hardship, his or her Elective Deferrals shall be reduced to six percent
(6%), if in excess thereof as of the date of distribution, and shall not be
increased during the twelve months immediately subsequent to the date of
distribution.
6.5. Redeposits Prohibited -- No amount withdrawn pursuant to Section 6.1,
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 13.12), death, Severance from Service (as
defined in Section 13.45) or Layoff (as defined in Section 13.25) 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 and a telephone request by the Participant to Fidelity for the
distribution. 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, 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. 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) executors or administrators.
If<PAGE>
PAGE 13
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.
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, distribution 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 preretirement survivor annuity in lieu of
the standard form of distribution.
ARTICLE VII - LOANS
7.1. Availability of Loans -- Effective as of the date shown on Appendix A
which is applicable to the bargaining unit in which Participant is
employed, Participants who have not attained age 59 1/2, unless said age<PAGE>
PAGE 14
restriction does not apply to Employees in a particular bargaining unit as
shown in Appendix A, may borrow against all or a portion of the balance in
the Participant's Employee Account and Rollover Contribution Account
subject to the restrictions set forth in this Article. The 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, the
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 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 rate published
on the first business day in June will apply to loans which are effective<PAGE>
PAGE 15
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 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<PAGE>
PAGE 16
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 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 17
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 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 - THE TRUST FUND
9.1. 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.
9.2. 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.
9.3. Expenses -- Expenses for the Plan and Trust shall be paid from the
Trust.
ARTICLE X - ADMINISTRATION OF THE PLAN
10.1. 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 X, Section
10.2. All such determinations of the Company shall be conclusive and
binding on all persons.
10.2. 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 Vice President -
Controller, the Senior Vice President Treasurer, the Director of Tax<PAGE>
PAGE 18
Affairs, the Vice President General Counsel, and the 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.
(h) Appointment of such additional Fiduciaries as deemed necessary for the
effective administration of the Plan, such appointments to be by written
instrument.
10.3. 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.
10.4. 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.
10.5. Recordkeeping -- The Administrator shall keep or cause to be kept
any<PAGE>
PAGE 19
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.
10.6. 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.
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<PAGE>
PAGE 20
for such decision and citing pertinent provisions in the Plan.
10.7. 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.
10.8. 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 XI - AMENDMENT OR TERMINATION OF THE PLAN
11.1. Right to Amend or Terminate Plan -- The Employer 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 Employer. No amendment to the Plan shall
decrease in any manner a Participant's accrued benefit under the Plan,
including but not limited to elimination or reduction of an Early
Retirement benefit or a retirement-type subsidy, or elimination of an
optional form of benefit (to the extent such elimination is prohibited by
the Retirement Act or regulations issued thereunder), except to the extent
a decrease in accrued benefits is approved by the Secretary of Labor
pursuant to Section 412(c)(8) of the Code.<PAGE>
PAGE 21
11.2. 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.
11.3. Maintenance of Plan -- The Employer has established the Plan with the
bona fide intention and expectation that it will be able to make its
contributions indefinitely, but the Employer 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.
11.4. 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
Employer specifying the date as of which the Plan and Trust shall
terminate;
(b) Adjudication of the Employer as bankrupt or general assignment by the
Employer to or for the benefit of creditors or dissolution of the Employer;
In the event of the complete termination of this Plan or the complete
discontinuance of Matching Contributions under it (but a rescission under
Section 12.2 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
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 6.5, in stock.
ARTICLE XII - ADDITIONAL PROVISIONS
12.1. 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).
12.2. 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<PAGE>
PAGE 22
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.
12.3. 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.
12.4. 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
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.
12.5. 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 XIII - DEFINITIONS
The following terms have the meaning specified below unless the context
indicates otherwise:<PAGE>
PAGE 23
13.1. "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.
13.2. "Administrator" means Raytheon Company.
13.3. "Annual Addition" means a Participant's Matching Contribution and the
Participant's Elective Deferral during a Limitation Year.
13.4. "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.
13.5. "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.
13.6. "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.
13.7. "Board of Directors" means the Board of Directors of Raytheon
Company.
13.8. "Business Day" means a day on which Fidelity is open for general
business.
13.9. "Company" means Raytheon Company, but shall not include a Division,
Operation, payroll or similar cohesive group of Raytheon Company excluded
by the Board of Directors of Raytheon Company.
13.10. "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.<PAGE>
PAGE 24
13.11. "Covered Hourly Payroll" means a payroll consisting of hourly
payroll Employees in the following bargaining units: production and
maintenance Employees employed at Speed Queen plants in Ripon and Omro,
Wisconsin, represented by Local 1327, United Steelworkers of America;
production and maintenance Employees employed at the Company's Eastern
Massachusetts plants in the unit represented by Local 1505, International
Brotherhood of Electrical Workers; production and maintenance Employees
employed at the Company's Oxnard, California, plant in the unit represented
by Local 40, International Brotherhood of Electrical Workers; Employees
employed in machinist and related occupations at the Company's Eastern
Massachusetts plants in the unit represented by Lodge 1836, International
Association of Machinists and Aerospace Workers; Employees employed in
machinist and related occupations at the Company's Portsmouth, Rhode
Island, plant in the unit represented by Lodge 587, International
Association of Machinists and Aerospace Workers; Employees employed as
guards at the Company's Eastern Massachusetts and New Hampshire plants in
the unit represented by the Raytheon Guards Association, and at the
Company's Quincy, Massachusetts, plant in the unit represented by Local 84,
International Union of Police and Protection Employees, Independent
Watchmen's Association; Employees employed in the Warehouseperson
classification at Raytheon Marine Company's facility in Seattle,
Washington, represented by Driver Sales & Warehouse Union No. 117,
International Brotherhood of Teamsters; Employees employed at Amana
Refrigeration, Inc.'s Teterboro, New Jersey, facility in the unit
represented by Local 1518, International Brotherhood of Teamsters;
Employees employed at Amana Refrigeration, Inc.'s Amana, Iowa, facility in
the unit represented by Local 1526, International Association of Machinists
and Aerospace Workers; and Employees employed on the hourly payroll at
Amana Refrigeration Inc.'s Florence, South Carolina, facility.
13.12. "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.
13.13. "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.
13.14. "Elective Deferral" means a voluntary reduction of Participant's
compensation in accordance with Section 2.2 hereof.
13.15. "Eligible Compensation" means the base pay, supervisory
differentials, shift premiums and sales commissions, excluding all other
earnings from any source.
13.16. "Eligible Employee" means any Employee on a Covered 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. No Employee may be an Eligible Employee under this Plan
for<PAGE>
PAGE 25
any period during which the Employee is an Eligible Employee under the
Raytheon Savings and Investment Plan.
13.17. "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.
13.18. "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.
13.19. "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.
13.20. "Employment Commencement Date" is the date on which the Employee
first performs an Hour of Service with the Employer.
13.21. "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.
13.22. "Fidelity" means Fidelity Investments, the recordkeeper for the
Plan.
13.23. "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.
13.24.(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.<PAGE>
PAGE 26
(c) To the extent applicable, the rules set forth in 29 CFR 2530.200b-2(b)
and (c) for computing an "Hour of Service" are incorporated herein by
reference.
13.25. "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.
13.26. "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.
13.27. "Matching Contribution" means contribution made to the Trust in
accordance with Section 3.7 hereof.
13.28. "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.
13.29. "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.
13.30. "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.
13.31. "Nonforfeitable" means an unconditional right to an Account balance
or portion thereof determined as of the applicable date of determination
under this Plan.
13.32. "Normal Retirement Age" means the Participant's sixty-fifth (65th)
birthday.
13.33. "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.
13.34. "Pay Period" means a scheduled period for payment of wages or
salaries.
13.35. "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.
13.36. "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 27
Service Date.
13.37. "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.
13.38. "Plan" means the Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees as amended from time to time.
13.39. "Plan Year" means a calendar year, or a portion thereof occurring
prior to the termination of the Plan.
13.40. "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.
13.41. "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.
13.42. "Retirement Act" means the Employee Retirement Income Security Act
of l974, including any amendments thereto.
13.43. "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.
13.44. "Salaried Payrolls" means the nonexempt salaried and the exempt
salaried payrolls which are processed in the United States.
13.45. "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.
13.46. "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<PAGE>
PAGE 28
(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.
13.47. "Subsidiary" means any corporation designated by the Board of
Directors of Raytheon Company 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.
13.48. "Surviving Spouse" means a lawful spouse surviving the Participant
as of the date of Participant's death.
13.49. "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.
13.50. "Trustee" means the Trustee and any successor trustees under the
Trust Agreement.
13.51. "Trust Fund" means the cash, securities, and other property held by
the Trustee for the purposes of the Plan.
13.52. "Valuation Date" means the last business day of each calendar month.
13.53. 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 29
APPENDIX A
EFFECTIVE DATES AND AGE REQUIREMENTS FOR LOAN PROVISIONS
Required Age
Effective Date for Loan
Unit of Loan Provisions Eligibility
Local 1327, United Steelworkers January 1, 1987 Less than
of America age 59 1/2
Local 1836, International January 1, 1987 Less than
Association of Machinists age 59 1/2
and Aerospace Workers
Local 1505, International March 1, 1989 None
Brotherhood of Electrical Workers
Local 587, International
Association March 1, 1989 None
of Machinists and Aerospace Workers
Local 40, International Brotherhood April 1, 1989 None
of Electrical Workers
Raytheon Guards Association May 1, 1989 None
Local 84, International Union
of Police May 1, 1989 None
and Protection Employees,
Independent Watchmen's Association
Driver Sales & Warehouse
Union No. 117, May 1, 1990 None
International Brotherhood of Teamsters<PAGE>
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, 1994
----------
RAYTHEON SUBSIDIARY 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, 1994 and 1993, 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, 1994. 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, 1994 and
1993, and the changes in net assets available for plan benefits for each of
the three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles.
Effective December 31, 1994, all plan assets and the accounts of all
participants of the plan were transferred into the Raytheon Employee
Savings and Investment Plan. The Company has approved the termination of
the Raytheon Subsidiary Savings and Investment Plan effective December 31,
1994.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 2, 1995 <PAGE>
PAGE 3
RAYTHEON SUBSIDIARY SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1994 and 1993
----------
1994 1993
---- ----
Assets:
Investments, at fair value
(Notes B. E, F and I) $ - $2,521,062
Receivables:
Accrued investment income - 21
Employee deferrals - 18,840
Loans receivable from participants - 65,078
Cash and cash equivalents - 9,201
---------- ----------
Total assets - 2,614,202
---------- ----------
Liabilities:
Administrative expenses - 16,106
Total Liabilities - 16,106
---------- ----------
Net assets available for plan benefits $ - $2,598,096
========== ==========
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, 1994, 1993 and 1992
1994 1993 1992
Additions to net assets attributable to:
Investment income (Notes B. E and I):
Change in net appreciation
(depreciation) of investments $ (109,101) $ 115,480 $ 65,844
Interest 25,825 26,442 29,129
Dividends 45,736 28,007 11,068
Capital gains distributions 36,798 11,209 -
---------- ---------- ---------
(742) 181,138 106,041
Employee deferrals 1,269,157 790,213 192,640
Other additions (Note H) 11,713 948,540 -
---------- ---------- ---------
Total additions 1,280,128 1,919,891 298,681
---------- ---------- ---------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 372,913 21,332 953,214
Administrative expenses 6,043 18,898 26,182
Other deductions (Note H) 17,695 - -
Transfers out (Notes D and G) 3,481,573 - -
---------- ---------- ---------
Total deductions 3,878,224 40,230 979,396
---------- ---------- ---------
Increase (decrease) in net assets (2,598,096) 1,879,661 (680,715)
Net assets, beginning of year 2,598,096 718,435 1,399,150
---------- ---------- ---------
Net assets, end of year $ - $2,598,096 $ 718,435
========== ========== ==========
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
Effective December 31, 1994, all plan assets and the accounts of all
participants of the plan were transferred into the Raytheon Employee
Savings and Investment Plan. The Company has approved the termination of
the Raytheon Subsidiary Savings and Investment Plan effective December
31, 1994.
The following description of the Raytheon Subsidiary Savings and
Investment Plan (the "Plan"), formerly the Caloric Savings and
Investment Plan provides only general information. Participants should
refer to the Plan agreement for a complete description of the Plan's
provisions. The 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, 1994 and 1993 were zero and 737, respectively.
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 were allowed to defer to the Plan up to 17% of their
salaries effective January 1, 1994; previously, the maximum deferral was
15%. The Company did not make matching contributions during fiscal
years 1992 through 1994. As of December 31, 1994, the annual employee
deferral cannot exceed $9,240. Effective May 31, 1993, rollover
contributions from other qualified plans were accepted by the Plan.
Participants may invest their deferrals in increments of 1% 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<PAGE>
PAGE 6
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 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.
B. Summary of Significant Accounting Policies<PAGE>
PAGE 7
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.
Benefits are recorded when paid.
C. Federal Income Tax Status:
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:
The Company has approved the termination of the Raytheon Subsidiary
Savings and Investment Plan effective 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, 1993. The values at December
31, 1993 held with Metropolitan Life Insurance Company, The Prudential
Asset Management Company and Banker's Trust were $216,943, $149,742 and
$250,975, respectively.
F. Related Party Transactions: <PAGE>
PAGE 8
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, 1994,
1993 and 1992, purchases of Raytheon Company Common Stock amounted to
$64,690, $46,122 and $38,716, respectively. Sales of Raytheon Company
Common Stock amounted to $16,252, $13,974 and $186,827 in 1994, 1993 and
1992, respectively.
G. Plan Transfers:
Effective December 31, 1994, all plan assets and the accounts of all
participants of the Plan were transferred out of the Plan and into the
Raytheon Employee Savings and Investment Plan.
Effective February 10, 1994, the accounts of all employees of Caloric
Corporation who participated in the Plan were transferred out of the
Plan and into either the Raytheon Savings and Investment Plan or the
Raytheon Employee Savings and Investment Plan.
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. <PAGE>
PAGE 9
H. Other Additions and Deductions:
Other additions and deductions represent transfers of participant
accounts between the Raytheon Subsidiary Savings and Investment Plan and
the Raytheon Savings and Investment Plan, the Raytheon Savings and
Investment Plan for Specified Hourly Payroll Employees and the Raytheon
Employee Savings and Investment Plan for those participants who have
changed plans during the year. <PAGE>
PAGE 10
<TABLE>
I. Fund Data:
The following is a summary of net assets available for plan benefits by fund as of December 31:
<CAPTION>
1994
-------------------------------------------------------------------------------
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 12
I. Fund Data (cont.): The following is a summary of 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>
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 asset 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 11
I. Fund Data (cont.) The following is a summary of changes in net assets available for plan benefits by fund as of December 31:
<CAPTION> 1994
------------------------------------------------------------------------------
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 net appreciation
(depreciation) of
investments $(53,255) $(13,194) $ 4,875 $(47,527) $ (109,101)
Interest $ 25,506 - 230 89 - 25,825
Dividends - 16,780 11,212 - 17,744 45,736
Capital gains
distributions - 36,798 - - - 36,798
-------- -------- -------- -------- -------- ----------
25,506 323 (1,752) 4,964 (29,783) (742)
Employee deferrals 176,630 310,286 305,426 130,542 346,273 1,269,157
Other additions 11,635 - - - 78 11,713
-------- -------- -------- -------- -------- ----------
Total additions 213,771 310,609 303,674 135,506 316,568 1,280,128
-------- -------- -------- -------- -------- ----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 87,584 75,759 81,499 47,679 80,392 372,913
Administrative expenses 332 1,835 919 657 2,300 6,043
Other deductions, net - 7,062 6,522 4,111 - 17,695
Transfers out 767,539 773,316 822,603 307,694 729,825 $80,596 3,481,573
-------- -------- -------- -------- -------- ------- ----------
Total deductions 855,455 857,972 911,543 360,141 812,517 80,596 3,878,224
-------- -------- -------- -------- -------- ------- ----------
Interfund transfers 29,164 (15,635) 23,126 (9,009) (27,646) - -
Loans to participants (17,461) (11,034) (11,190) (3,463) (6,078) 49,226 -
Repayment of loan principal 13,563 5,189 4,592 6,568 3,796 (33,708) -
-------- -------- -------- -------- -------- ------- ----------
Decrease in net assets (616,418) (568,843) (591,341) (230,539) (525,877) (65,078) (2,598,096)
Net assets, beginning of year 616,418 568,843 591,341 230,539 525,877 65,078 2,598,096
-------- -------- -------- -------- -------- ------- ----------
Net assets, end of year $ - $ - $ - $ - $ - $ - $ -
======== ======== ======== ======== ======== ======= ==========<PAGE>
PAGE 12
I. Fund Data (cont.) The following is a summary of changes in 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>
Additions to net assets
attributable to:
Investment income:
Change in net 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
I. Fund Data (Cont.): The following is a summary of changes in net assets by fund for the year ended December 31:
<CAPTION>
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 net 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
======== ======== ======== ======= ======= ==========
/TABLE
<PAGE>
PAGE 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Raytheon Subsidiary 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/ Gail P. Anderson
Gail P. Anderson
Vice President - Human Resources
DATE June 28, 1995<PAGE>
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 2, 1995 on our audits of the financial
statements of the Raytheon Subsidiary Savings and Investment Plan as of
December 31, 1994 and 1993 and for each of the three years in the period
ended December 31, 1994, 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 L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 23, 1995<PAGE>
PAGE 1
EXHIBIT 99.3b
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 of any<PAGE>
PAGE 2
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 inc
uded 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<PAGE>
PAGE 3
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
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<PAGE>
PAGE 4
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 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<PAGE>
PAGE 5
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 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<PAGE>
PAGE 6
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 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<PAGE>
PAGE 7
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. 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<PAGE>
PAGE 8
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 by 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. 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)<PAGE>
PAGE 9
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 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.<PAGE>
PAGE 10
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.
(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.<PAGE>
PAGE 11
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
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<PAGE>
PAGE 12
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 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<PAGE>
PAGE 13
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
(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<PAGE>
PAGE 14
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.
(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 who dies with an Account in
the<PAGE>
PAGE 15
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
Article will be equal to the prime rate published in The Wall Street<PAGE>
PAGE 16
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
thelesser 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<PAGE>
PAGE 17
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
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<PAGE>
PAGE 18
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 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<PAGE>
PAGE 19
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.
(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 and, if at the time of such determination Key
Employees, as defined in Section 416(i) of the Code, are participants in<PAGE>
PAGE 20
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.
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<PAGE>
PAGE 21
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<PAGE>
PAGE 22
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, 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;<PAGE>
PAGE 23
(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 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<PAGE>
PAGE 24
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 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<PAGE>
PAGE 25
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 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<PAGE>
PAGE 26
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.
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<PAGE>
PAGE 27
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.
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<PAGE>
PAGE 28
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. "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. 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.
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.<PAGE>
PAGE 29
14.19. "Entry Date" means the first Pay Date in each calendar
month.
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
Section 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<PAGE>
PAGE 30
the Employee's Employment Commencement Date or Reemployment Commencement
Date, whichever is applicable, and ending on the Employee's Severance from
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 31
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, 1994
----------
RAYTHEON EMPLOYEE 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, 1994 and 1993, 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, 1994. 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, 1994 and
1993, and the changes in net assets available for plan benefits for each of
the three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 2, 1995 <PAGE>
PAGE 3
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1994 and 1993
----------
1994 1993
---- ----
Assets:
Investments, at fair value
(Notes B. E, F and I) $8,659,123 $2,050,725
Receivables:
Accrued investment income 122 9
Employee deferrals 36,445 9,278
Loans receivable from participants 943,945 570,868
Cash and cash equivalents 81,365 3,369
---------- ----------
Total assets 9,721,000 2,634,249
---------- ----------
Liabilities:
Payable for outstanding purchases 3,551 -
Administrative expenses 26,561 14,047
---------- ----------
Total liabilities 30,112 14,047
---------- ----------
Net assets available for
plan benefits $9,690,888 $2,620,202
========== ==========
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, 1994, 1993 and 1992
----------
1994 1993 1992
---- ---- ----
Additions to net assets
attributable to:
Investment income (Notes B. E and I):
Change in net appreciation
(depreciation) of investments $ (38,996) $ 574,501 $ 569,029
Interest 140,757 180,700 395,692
Dividends 64,011 68,660 133,475
Capital gains distributions 67,730 1,937 -
---------- ----------- -----------
233,502 825,798 1,098,196
---------- ----------- -----------
Employee deferrals 1,958,742 1,562,048 4,720,729
Transfers in (Notes A and G) 3,525,480 2,395,136 -
Other additions, net (Note H) 1,535,667 - -
---------- ----------- -----------
7,019,889 3,957,184 4,720,729
---------- ----------- -----------
Total additions 7,253,391 4,782,982 5,818,925
---------- ----------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals by
participants 177,807 220,371 340,476
Administrative expenses 4,898 14,230 22,255
Transfers out (Notes A and G) - 14,669,380 -
---------- ----------- -----------
Total deductions 182,705 14,903,981 362,731
---------- ----------- -----------
Increase (decrease) in net assets 7,070,686 (10,120,999) 5,456,194
Net assets, beginning of year 2,620,202 12,741,201 7,285,007
---------- ----------- -----------
Net assets, end of year $9,690,888 $ 2,620,202 $12,741,201
========== =========== ===========
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 following description of the Raytheon Employee Savings and
Investment Plan (the "Plan"), formerly The Badger Company, Inc. Savings
and Investment Plan provides only general information. Participants
should refer to the Plan agreement for a complete description of the
Plan's provisions. The 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. Additional plan
transfers became effective in 1994 (Note G). 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,
1994 and 1993 were 1,278 and 138, respectively. Participants by fund
were as follows as of December 31, 1994:
Guaranteed Income Fund 640
Equity Fund 620
Raytheon Common Stock Fund 616
Stock Index Fund 377
Balanced Fund 586
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 were allowed to defer to the Plan up to 17% of their
salaries effective January 1, 1994; previously, the maximum deferral
was<PAGE>
PAGE 6
15%. The Company did not make matching contributions during fiscal years
1992 through 1994. As of December 31, 1994, the annual employee deferral
cannot exceed $9,240. Rollover contributions from other qualified plans
are accepted by the Plan. Participants may invest their deferrals in
increments of 1% 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 repayment period may
be extended up to 15 years. Interest paid to the Plan on loans to<PAGE>
PAGE 7
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. The Plan will adopt the AICPA's Statement of
Position 94-4, "Reporting of Investment Contracts held by Health and
Welfare Benefit Plans and Defined-Contribution Pension Plans," in 1995.
The adoption of this statement is not expected to have a material
financial impact on the Pland. 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.
Benefits are recorded when paid.
C. Federal Income Tax Status:
The Plan obtained its latest determination letter in 1989, in which the
Internal Revenue Service stated that the Plan, as then designated, was
incompliance 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 6.07%, 6.68% and 6.01%
and the effective annual rates were 6.26%, 6.91% and 6.19%,
respectively, at December 31, 1994. The values of the portfolios managed
by Metropolitan Life Insurance Company, The Prudential Asset Management
Company and Banker's Trust were $1,231,876, $797,096 and $1,237,527,
respectively, at December 31, 1994. The values at December 31, 1993 held
with Metropolitan Life Insurance Company, Prudential Asset Management
Company and Banker's Trust were $445,527, $307,519 and $515,417,
respectively.
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, 1994, 1993 and
1992, purchases of Raytheon Company Common Stock amounted to $80,834,
$119,832 and $472,884, respectively. Sales of Raytheon Company Common
Stock amounted to $20,308, $27,516 and $5,293 in 1994, 1993 and 1992,
respectively.
G. Plan Transfers:
Effective December 31, 1994, all Plan assets and the accounts of all
participants of the Raytheon Subsidiary Savings and Investment Plan were
transferred into the Plan.
Effective May 4, 1994, the accounts of all employees of NASA Logistics
Support Services who participated in the Raytheon Savings and Investment
Plan were transferred into the Plan.
Effective February 10, 1994, the accounts of certain employees of
Caloric Corporation who participated in the Raytheon Subsidiary Savings
and Investment Plan were transferred into the Plan.
H. Other Additions and Deductions:
Other additions and deductions represent transfers of participant <PAGE>
PAGE 9
accounts between the Raytheon Employee Savings and Investment Plan and
the Raytheon Savings and Investment Plan, the Raytheon Savings and
Investment Plan for Specified Hourly Payroll Employees, and the Raytheon
Subsidiary Savings and Investment Plan for those participants who
changed plans during the year. <PAGE>
PAGE 10
<TABLE>
G. Fund Data: The following is a summary of net assets available for plan benefits by fund as of December 31:
1994
--------------------------------------------------------------------------
<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 $3,266,499 $3,266,499
Fidelity Equity Income Fund
(61,400 shares) - $1,884,997 1,884,997
Raytheon Company Common Stock
(22,914 shares) - - $1,463,602 1,463,602
BT Pyramid Equity Index Fund
(775 shares) - - - $776,258 776,258
Fidelity Balanced Fund
(103,154 shares) - - - - $1,267,767 1,267,767
---------- ---------- ---------- -------- ---------- ----------
Total investments 3,266,499 1,884,997 1,463,602 776,258 1,267,767 8,659,123
Receivables:
Accrued investment income - - 83 39 - 122
Employee deferrals 6,988 8,297 7,513 5,411 8,236 36,445
Loans receivable from
participants - - - - - $943,945 943,945
Cash and cash equivalents 53,719 - 19,192 8,454 - - 81,365
---------- ---------- ---------- -------- ---------- -------- ----------
Total assets 3,327,206 1,893,294 1,490,390 790,162 1,276,003 943,945 9,721,000
Liabilities:
Payable for outstanding
purchases - - 3,551 - - - 3,551
Administrative expenses 8,182 6,057 4,899 2,482 4,941 - 26,561
---------- ---------- ---------- -------- ---------- -------- ----------
Total liabilities 8,182 6,057 8,450 2,482 4,941 - 30,112
---------- ---------- ---------- -------- ---------- -------- ----------
Net assets available for plan
benefits $3,319,024 $1,887,237 $1,481,940 $787,680 $1,271,062 $943,945 $9,690,888
========== ========== ========== ========= ========== ======== ==========<PAGE>
PAGE 11
G. Fund Data (cont.) 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
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
========== ======== ======== ======== ======= ======== ==========<PAGE>
PAGE 12
G. Fund Data,(cont.): The following is a summary of changes in net assets available for plan benefits by fund for the
year ended December 31:
<CAPTION> 1994
--------------------------------------------------------------------------------
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 net in appreciation
(depreciation) of
investments $ (71,932) $ 51,361 $ 12,718 $ (31,143) $ (38,996)
Interest $ 140,115 - 436 206 - 140,757
Dividends - 31,170 20,217 - 12,624 64,011
Capital gains distributions - 67,730 - - 67,730
---------- ---------- ---------- ---------- --------- -----------
140,115 26,968 72,014 12,924 (18,519) 233,502
---------- ---------- ---------- ---------- --------- -----------
Employee deferrals 434,009 455,767 349,036 255,044 464,886 1,958,742
Transfers in 841,903 704,481 759,671 268,837 680,676 $269,912 3,525,480
Other additions, net 918,166 355,765 135,892 79,195 46,649 - 1,535,667
---------- ---------- ---------- ---------- ---------- -------- -----------
2,194,078 1,516,013 1,244,599 603,076 1,192,211 269,912 7,019,889
---------- ---------- ---------- ---------- ---------- -------- -----------
Total additions 2,334,193 1,542,981 1,316,613 616,000 1,173,692 269,912 7,253,391
---------- ---------- ---------- ---------- ---------- -------- -----------
Deductions from net assets
attributable to:
Benefits to and withdrawals
by participants 105,906 26,158 31,265 8,013 6,465 - 177,807
Administrative expenses 1,317 711 1,381 353 1,136 - 4,898
---------- ---------- ---------- ---------- -------- -------- -----------
Total deductions 107,223 26,869 32,646 8,366 7,601 - 182,705
---------- ---------- ---------- ---------- -------- -------- -----------
Interfund transfers (103,240) (8,901) 56,967 15,840 39,334 - -
Loans to participants (178,961) (71,274) (35,510) (17,417) (15,184) 318,346 -
Repayment of loan principal 111,437 39,076 21,962 17,014 25,692 (215,181) -
---------- ---------- ---------- ---------- -------- -------- -----------
Increase in net assets 2,056,206 1,475,013 1,327,386 623,071 1,215,933 373,077 7,070,686
Net assets, beginning of year 1,262,818 412,224 154,554 164,609 55,129 570,868 2,620,202
---------- ---------- ---------- ---------- -------- -------- -----------
Net assets, end of year $3,319,024 $1,887,237 $1,481,940 $ 787,680 $1,271,062 $943,945 $ 9,690,888
========== ========== ========== ========== ======== ======== ===========<PAGE>
PAGE 13
G. Fund Data (cont. The following is a summary of changes in net assets available for plan benefits by fund for the
year ended 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>
Additions to net assets
attributable to:
Investment income:
Change in net 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
---------- ---------- ---------- ---------- -------- -----------
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
========== ========== ========== ========== ======== ======== ===========<PAGE>
PAGE 14
G. Fund Data (cont.): The following is a summary of changes in net assets available for plan benefits by fund for the
year ended December 31:
<CAPTION>
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 net 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>
</TABLE>
PAGE 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Raytheon Employee 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/ Gail P. Anderson
Gail P. Anderson
Vice President - Human Resources
DATE June 28, 1995<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 2, 1995 on our audits of the financial statements of the Raytheon
Employees Savings and Investment Plan as of December 31, 1994 and 1993 and for
each of the three years in the period ended December 31, 1994, 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 L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 23, 1995<PAGE>
PAGE 1
EXHIBIT 99.4b
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
Provisions in Effect as of January 1, 1995
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
Participants' Eligible Compensation shall be reduced as an Elective<PAGE>
PAGE 2
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%), provided, however, that, effective for any Plan Year
beginning on or after January 1, 1987, in no event may the amount of
Elective Deferrals to the Plan, when taken into account with all other<PAGE>
PAGE 3
elective deferrals (as defined in Code Section 401(g)) made by the
Participant under any other plan maintained by the Employer, exceed $7,000
adjusted for increases in the cost of living under Code Section 402(g) in
any calendar year. If a Participant participates in another plan or
arrangement which is not maintained by the Employer and which permits
elective deferrals in any calendar year and his total Elective Deferrals
under the Plan and other plan(s) exceed $7,000 (as adjusted) in a calendar
year, he may request to receive a distribution of the amount of the excess
deferral (a deferral in excess of $7,000 (as adjusted) that is attributable
to Elective Deferrals to this plan) notwithstanding any limitations on
distributions contained in the Plan. Such distribution shall be made by
the April 15 following the Plan Year in which the Elective Deferrals were
made, provided that the Participant notifies the Administrator of the
amount of the excess deferral that is attributable to Elective Deferrals to
the Plan and requests such a distribution. The Participant's notice must
be received by the Administrator no later than the March 1 following the
Plan Year of the excess deferral. In the absence of such notice, the
amount of such excess deferral attributable to Elective Deferrals to this
Plan shall be subject to all limitations on withdrawals and distributions
in the Plan. In addition to distributing excess deferrals at the request
of the Participant, the Administrator may distribute any deferrals made
under this Plan or any other plan of the Employer in excess of the
statutory maximum deferral of $7,000 (as adjusted). For this purpose as
provided in 26 CFR Section 1.402-1(e)(2), a Participant is deemed to
notify the Administrator of any excess deferrals that arise by taking into
account only those Elective Deferrals made to this Plan and any other
plans of this Employer and to request that such excess deferrals be
distributed by the Plan Administrator. The distribution of excess deferrals
will include any earnings or be reduced by any loss allocable to the excess
deferrals pursuant to the Plan method of allocating earnings or losses and
calculated to the last day of the Plan Year.
3.2. Limitations on Elective Deferrals --
(a) In no event may Elective Deferrals made on behalf of all
Higher Paid Eligible Employees with respect to any Plan Year result in an
Actual Deferral Percentage for such group of Higher Paid Eligible Employees
which exceeds the greater of (i) or (ii) where:
(i) is an amount equal to 125 percent of the Actual Deferral
Percentage for all Non-Higher Paid Eligible Employees who have satisfied
the eligibility requirements of Article II with respect to such Plan Year;
and
(ii) is an amount equal to the Actual Deferral Percentage
for all Non-Higher Paid Eligible Employees who have satisfied the
eligibility requirements of Article II with respect to such Plan Year and
two percent (2%), provided that such amount does not exceed 200 percent of
such Actual Deferral Percentage.
(b) The Administrator shall be authorized to implement rules
authorizing or requiring reductions in Elective Deferrals that may be made<PAGE>
PAGE 4
by Higher Paid Eligible Employees during the Plan Year (prior to any
contributions to the Trust) so that the limitation of Section 3.2(a) is
satisfied.
(c) The Company may in its discretion make Qualified Nonelective
Contributions to the Accounts of certain Non-Higher Paid Eligible Employees
to the extent required to satisfy the limitations of Section 3.2(a).
(d) If the limitation under Section 3.2(a) is exceeded in any
Plan Year, the Excess amounts made on behalf of Higher Paid Eligible
Employees with respect to a Plan Year (and earnings allocable thereto)
shall then be distributed to such Employees as soon as practicable after
the end of such Plan Year, but no later than the last day of the
immediately following Plan Year. The Excess Amounts distributed shall
include Elective Deferrals and the income allocable thereto. The amount of
income allocable to Excess Amounts shall be determined in accordance with
the regulations issued under Section 401(k) of the Code and shall include
income for the Plan Year for which the Excess Amounts were made. Any such
distributions shall be reduced by the amount of any distributions made
pursuant to Section 3.1 above.
(e) The Administrator may utilize any combination of the methods
described in Sections 3.2(b), (c) and (d) to assure that the limitations of
Section 3.2(a) are satisfied.
(f) For purposes of this Section 3.2, the following definitions
and special rules shall apply:
(i) the term "Annual Earnings" means the base pay; bonuses;
overtime; incentive pay (excluding any income received in the exercise of
any qualified or nonqualified stock option); commissions, foreign service
allowance; completion allowance; awards; instructor pay; amounts reflected
on an Employee's W-2 form for the cost of group term life insurance,
personal use of Company cars and tax assistance; supervisory differentials
and shift premiums actually paid to an Employee in each Plan Year.
(ii) The term "Actual Deferral Percentage" shall mean, with
respect to any group of actively employed Eligible Employees who have
satisfied the eligibility requirements of Article II for a Plan Year, the
average of the ratios, calculated separately for each such Eligible
Employee in the group of:
(A) The amount of Elective Deferrals paid to the Trust Fund for such
Plan Year, divided by
(B) The Eligible Employee's Annual Earnings, including any Elective
Deferrals made by Companies to the Plan on behalf of the Eligible Employee
and any pre-tax elective contributions under a "cafeteria plan" (as defined
in Section 125 of the Code and applicable regulations) maintained by the
Companies for such Plan Year.
Elective Deferrals shall be taken into account for a Plan Year only if such
amounts are allocated to the Eligible Employee's Account as of a date<PAGE>
PAGE 5
within that Plan Year. For this purpose, an Elective Deferral is
considered allocated as of a date within a Plan Year if the allocation is
not contingent on participation or performance of services after such date
and the Elective Deferral is actually paid to the Trust Fund no later than
12 months after the Plan Year to which the contribution relates.
(iii) The term "Excess Amounts" shall mean with respect to
each Higher Paid Eligible Employee who has satisfied the eligibility
requirements of Article II for a Plan Year, the amount equal to total
Elective Deferrals made on behalf of such Employee (determined prior to the
application of the leveling procedure described below) minus the product of
the Employee's Actual Deferral Percentage (determined after the leveling
procedure described below) multiplied by the amount specified in Section
3.2(f)(ii)(B) above. In accordance with the regulations issued under
Section 401(k) of the Code, Excess Amounts shall be determined by a
leveling procedure under which the Actual Deferral Percentage of the Higher
Paid Eligible Employee with the highest such percentage shall be reduced to
the extent required to enable the limitation of Section 3.2(a) to be
satisfied or, if it results in a lower reduction, to the extent required to
cause such Higher Paid Eligible Employee's Actual Deferral Percentage to
equal the Actual Deferral Percentage of the Higher Paid Eligible Employee
with the next highest Actual Deferral Percentage. This leveling procedure
shall be repeated until the limitation of Section 3.2(a) is satisfied.
(iv) The term "Qualified Nonelective Contributions" means
contributions that are made pursuant to Section 3.2(c), meet the
requirements of Section 401(m)(4)(C) of the Code and the regulations issued
thereunder, and which are designated as a Qualified Nonelective
Contribution for purposes of satisfying the limitations of Section 3.2(c).
Qualified Nonelective Contributions shall be nonforfeitable when made and
are distributable only in accordance with the distribution and withdrawal
provisions that are applicable to Elective Deferrals under the Plan;
provided, however, that Qualified Nonelective Contributions may not be
withdrawn on account of financial hardship. If any Qualified Nonelective
Contributions are made, the Company shall keep such records as necessary to
reflect the amount of such contributions made for purposes of satisfying
the limitations of Section 3.2(c).
(v) In the event the Companies maintain two or more plans
that are treated as a single plan for purposes of Sections 401(a)(4) and
410(b) of the Code (other than Section 410(b)(2)(A)(ii) of the Code), all
elective deferrals made under the two plans shall be treated as made under
a single plan, and if two or more of such plans are permissively aggregated
for purposes of Section 401(k) of the Code, such plans shall be treated as
a single plan for purposes of satisfying Sections 401(a)(4) and 410(b) of
the Code.
(vi) In determining the Actual Deferral Percentage of a
Higher Paid Eligible Employee, all cash or deferred arrangements in which
such Higher Paid Eligible Employee is eligible to participate shall be
treated as a single arrangement.<PAGE>
PAGE 6
(vii) The family aggregation rules of Section 414(q)(6) of
the Code shall apply to any Higher Paid Eligible Employee who is a five
percent owner or one of the ten most highly compensated Higher Paid
Eligible Employees. The Actual Deferral Percentage for the family group,
which is treated as one Higher Paid Eligible Employee, is the Actual
Deferral percentage determined by combining the contributions and
compensation of all eligible Family Members. Except to the extent taken
into account in this paragraph (vii), the contributions and compensation of
all Family Members are disregarded in determining the Actual Deferral
Percentages for all Employees.
(g) The limitations of this Section 3.2 shall apply to Plan
Years beginning on or after January 1, 1987, and shall be separately
applied to those Eligible Employees who are included in a unit of Employees
covered by a collective bargaining agreement, and to those Eligible
Employees who are not included in such a collective bargaining unit.
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<PAGE>
PAGE 7
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.
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<PAGE>
PAGE 8
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 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<PAGE>
PAGE 9
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 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
Deferral has been reduced may elect, subject to the approval of the<PAGE>
PAGE 10
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 to join the
Plan;
(vi) rollover contributions transferred pursuant to this Section<PAGE>
PAGE 11
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
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<PAGE>
PAGE 12
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
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<PAGE>
PAGE 13
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
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.<PAGE>
PAGE 14
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 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<PAGE>
PAGE 15
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.
(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<PAGE>
PAGE 16
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
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 17
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.
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<PAGE>
PAGE 18
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
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<PAGE>
PAGE 19
(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 (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<PAGE>
PAGE 20
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.
(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.<PAGE>
PAGE 21
(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 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
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<PAGE>
PAGE 22
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.
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<PAGE>
PAGE 23
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 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<PAGE>
PAGE 24
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 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.<PAGE>
PAGE 25
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 which
results from said officer's, Employee's, Participant's or other person's
own gross negligence or willful misconduct.<PAGE>
PAGE 26
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
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<PAGE>
PAGE 27
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.
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<PAGE>
PAGE 28
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 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.<PAGE>
PAGE 29
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.
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. 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, <PAGE>
PAGE 30
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.
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
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<PAGE>
PAGE 31
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
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.<PAGE>
PAGE 32
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
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<PAGE>
PAGE 33
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>
