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Registration No. 333-
As filed with the Securities and Exchange Commission on June 18, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
RAYTHEON COMPANY
(Exact name of issuer 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)
Raytheon Savings and Investment Plan
Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees
Raytheon Employee Savings and Investment Plan
Raytheon Savings and Investment Plan for
Specified Puerto Rico Employees
E-Systems Employee Savings Plan
(Full title of the plans)
THOMAS D. HYDE
Vice President and General Counsel
RAYTHEON COMPANY
141 Spring Street
Lexington, Massachusetts 02173
(617) 862-6600
(Name and Address of Agent for Service)
CALCULATION OF REGISTRATION FEE
- ------------------------------------- ------------------------------------------
Title of Proposed Proposed Maximum
Securities Amount Maximum Aggregate Offering Amount of
to be to be Offering Price Registration Price* Registration
Registered Registered Per Share* Fee
- --------------------------------------------------------------------------------
Common Stock, 200,000
$1.00 par value shares $52.875* $10,575,000* $3,204.54
per share
- --------------------------------------------------------------------------------
- ---------------
* This estimate is made pursuant to Rule 457(h) solely for the purpose of
determining the registration fee. It is not known how many shares will be
purchased under the plan or at what price such shares will be purchased. The
above calculation is based on the average of the high and low prices of the
Registrant's Common Stock as reported on the New York Stock Exchange on June 16,
1997.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate number of interests to be
offered pursuant to the employee benefit plan described herein.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference
The following documents filed by Raytheon Company (the "Registrant")
with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are hereby
incorporated by reference in this Registration Statement: (1) the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (2) the
Registrant's Quarterly Report on Form 10-Q for the period ended March 30, 1997;
(3) the Registrant's Current Report on Form 8-K dated January 6, 1997; (4) the
Registrant's Current Report on Form 8-K dated January 17, 1997; (5) all reports
previously filed by the Registrant pursuant to Section 13(a) or 15(d) of the
Exchange Act since December 31, 1996; and (6) the description of the Common
Stock contained in the Registrant's registration statement filed with the SEC
under Section 12(g) of the Exchange Act, including any amendment or report filed
for the purpose of updating such description.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all of such securities then remaining
unsold, shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the date of filing of such documents. Any
statement contained herein or in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document or portion thereof which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts or Counsel
Not applicable.
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Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
reads as follows:
"(a) A corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
(b) A corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication or liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
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(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (2) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
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(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans, references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith an in a manner he reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not opposed to
the best interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligations to advance expenses (including attorneys'
fees.)"
Article 7 of the Registrant's Bylaws provides as follows:
"Section 7.1. Litigation Brought By Third Parties. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, formal or informal
(other than an action by or in the right of the Corporation) (an "Action") by
reason of the fact that he or she is or was a director or officer of the
Corporation (a "Corporate Person"), or is or was serving at the request of the
Corporation as a director, officer, employee, agent, partner, trustee or member
or in another authorized capacity (collectively, an "Authorized Capacity") of or
for another corporation, unincorporated association, business trust,
partnership, joint venture, employee benefit plan, individual or other legal
entity, whether or not organized or formed for profit (collectively, "Another
Entity"), against expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such Action ("Expenses") if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any Action by judgment, order, settlement,
conviction, or upon a plea or nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe his or her conduct was unlawful.
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Section 7.2. Litigation by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any Action by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he or she is or was a Corporate
Person, or is or was serving at the request of the Corporation in any Authorized
Capacity of or for Another Entity against Expenses actually and reasonably
incurred by him or her in connection with the defense or settlement of such
Action if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to misconduct in the performance of his or her duty to the Corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such Action was pending shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of equity or other court
shall deem proper.
Section 7.3. Successful Defense. To the extent that a person who is or
was a Corporate Person or who is or was serving in an Authorized Capacity of or
for Another Entity at the request of the Corporation and has been successful on
the merits or otherwise in defense of any Action referred to in Section 7.1 or
7.2 of this Article, or in defense of any claim, issue or matter therein, he or
she shall be indemnified against Expenses actually and reasonably incurred by
him or her in connection therewith.
Section 7.4. Determination of Conduct. Any indemnification under
Section 7.1 or 7.2 of this Article (unless ordered by a court) shall be made by
the Corporation only upon a determination that indemnification of the person is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in said Sections 7.1 or 7.2. Such determination shall be made
(a) by the Board of Directors by a majority vote consisting of directors not at
the time parties to such action, suit or proceeding, even though less than a
quorum, or (b) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (c) by the stockholders.
Section 7.5. Advance Payment. The Corporation shall advance Expenses
reasonably incurred by any Corporate Person in any Action in advance of the
final disposition thereof upon the undertaking of such party to repay the
advance unless it is ultimately determined that such party is entitled to
indemnification hereunder, if (a) the indemnitee furnishes the Corporation a
written affirmation of his or her good faith belief that he or she has satisfied
the standard of conduct in Section 7.1 or 7.2 and (b) a determination is made by
those making the decision pursuant to Section 7.4 that the facts then known
would not preclude indemnification under these By-Laws.
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Section 7.6. By-Law Not Exclusive. The indemnification provided by this
Article 7 shall not be deemed exclusive of any other rights to which any person
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee, agent or participant and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 7.7. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Corporate Person or is or was
serving at the request of the Corporation in an Authorized Capacity of or for
Another Entity against any liability asserted against him or her and incurred by
him or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify him or her
against such liability under the provisions of this Article or the General
Corporation Law of the State of Delaware.
Section 7.8. Further Indemnification. The Chairman may grant to any
employee or agent of the Corporation or its affiliates rights to indemnification
and to be paid expenses incurred in defending any proceeding in advance of its
final disposition.
Section 7.9. Definition of Corporation. For purposes of this Article 7,
references to "the Corporation" shall include, in addition to the surviving or
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise shall stand in the same position under the provisions
of this Article 7 with respect to the surviving or resulting corporation as he
or she would have with respect to such constituent corporation if its separate
existence had continued.
Section 7.10. Change in Law. Notwithstanding the foregoing provisions
of Article 7, the Corporation shall indemnify any person who is or was a
Corporate Person or is or was serving at the request of the Corporation in an
Authorized Capacity of or for Another Entity to the full extent permitted by the
General Corporation Law of the State of Delaware or by any other applicable law,
as may from time to time be in effect.
Section 7.11. Jurisdiction in Court of Chancery. The Delaware Court of
Chancery is hereby vested with exclusive jurisdiction to hear and determine all
actions for advancement of expenses or indemnification brought under Section
145, Chapter 1, Title 8, Delaware Code or these By-Laws or under any agreement,
vote of stockholders or disinterested directors, or otherwise. The Delaware
Court of Chancery may summarily determine the Corporation's obligation to
advance Expenses."
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Subparagraph 11 of Article Ninth of Registrant's Restated Certificate
of Incorporation provides as follows:
"No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware Corporation Law hereafter is amended
to authorize, with the approval of the Corporation's stockholders, further
reductions in the liability of a Corporation's directors for breach of fiduciary
duty, then a director of the Corporation shall not be liable for any such breach
to the fullest extent permitted by the Delaware Corporation Law as so amended.
No amendment to alter or repeal this subparagraph 11 shall apply to or have any
effect on the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring prior to
such amendment."
Item 7. Exemption from Registration Claimed
[Not applicable.]
Item 8. Exhibits
The following exhibits are part of this Registration Statement:
4.1 Raytheon Company Restated Certificate of
Incorporation, as amended through September 27, 1995,
heretofore filed as an exhibit to Raytheon's Form
10-Q for the quarter ended October 1, 1995, is hereby
incorporated by reference.
4.2 Raytheon Company Amended and Restated By-Laws, heretofore filed
as an exhibit to Raytheon's Form 10-Q for the quarter ended
October 1, 1995, are hereby incorporated by reference.
4.3 Raytheon Savings and Investment Plan.
4.4 Raytheon Savings and Investment Plan for Specified Hourly
Payroll Employees.
4.5 Raytheon Employee Savings and Investment Plan.
4.6 E-Systems Employee Savings Plan.
4.7 Raytheon Savings and Investment Plan for Specified Puerto Rico
Employees.
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5 Opinion of John W. Kapples, Esq. as to the legality of the
securities being registered.
23.1 Consent of John W. Kapples, Esq. (included in Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included on the signature pages of the
Registration Statement).
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement to include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering;
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of Securities Exchange Act of 1934) that is incorporated
by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof; and
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(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act of
1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lexington, Commonwealth of Massachusetts, on
this 28th day of May 1997.
RAYTHEON COMPANY
By: /s/ Christoph L. Hoffmann
Christoph L. Hoffmann
Executive Vice President, Law
and Corporate Administration and
Secretary
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POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Peter R.
D'Angelo and Christoph L. Hoffmann, and each of them singly, acting alone and
without the other, his/her true and lawful attorney-in-fact with the authority
to execute in the name of each such person, and to file with the Securities and
Exchange Commission, together with any exhibits thereto and other documents
therewith, any and all amendments (including without limitation post-effective
amendments) to this Registration Statement on Form S-8 necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended, and
any rules, regulations, and requirements of the Securities and Exchange
Commission in respect thereof, which amendments may make such other changes in
the Registration Statement as the aforesaid attorney-in-fact executing the same
deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Dennis J. Picard Chairman of the Board of May 28, 1997
Dennis J. Picard Directors and Chief Executive
Officer (Principal Executive
Officer) and Director
/s/ Peter R. D'Angelo Vice President, Chief Financial May 28, 1997
Peter R. D'Angelo Officer and Controller
(Principal Financial Officer)
/s/ Michele C. Heid Vice President - Corporate May 28, 1997
Michele C. Heid Controller and Investor Relations
(Principal Accounting Officer)
/s/ Charles F. Adams Director May 28, 1997
Charles F. Adams
/s/ Francis H. Burr Director May 28, 1997
Francis H. Burr
/s/ Ferdinand Colloredo-Mansfeld Director May 28, 1997
Ferdinand Colloredo-Mansfeld
/s/ Theodore L. Eliot, Jr. Director May 28, 1997
Theodore L. Eliot, Jr.
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/s/ John R. Galvin Director May 28, 1997
John R. Galvin
/s/ Barbara B. Hauptfuhrer Director May 28, 1997
Barbara B. Hauptfuhrer
/s/ Richard D. Hill Director May 28, 1997
Richard D. Hill
/s/ L. Dennis Kozlowski Director May 28, 1997
L. Dennis Kozlowski
/s/ James N. Land, Jr. Director May 28, 1997
James N. Land, Jr.
/s/ A. Lowell Lawson Director May 28, 1997
A. Lowell Lawson
/s/ Thomas L. Phillips Director May 28, 1997
Thomas L. Phillips
/s/ Warren B. Rudman Director May 28, 1997
Warren B. Rudman
/s/ Joseph J. Sisco Director May 28, 1997
Joseph J. Sisco
/s/ Alfred M. Zeien Director May 28, 1997
Alfred M. Zeien
EXHIBIT LIST
Exhibit No. Description of Documents
4.3 Raytheon Savings and Investment Plan
4.4 Raytheon Savings and Investment Plan for Specified
Hourly Employees.
4.5 Raytheon Employee Savings and Investment Plan.
4.6 E-Systems Employee Savings Plan.
4.7 Raytheon Savings and Investment Plan for Specified
Puerto Rico Employees.
5 Opinion of John W. Kapples, Esq. as to the legality
of the securities being registered
23.1 Consent of John W. Kapples Esq. (included in
Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P.
EXHIBIT 4.3
RAYTHEON SAVINGS AND INVESTMENT PLAN
Provisions in Effect as of October 1, 1996
COMPANIES PARTICIPATING IN 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 Patriot Support Company
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
Speed Queen Company effective 2/1/85
Beech Acceptance Corporation, Inc. effective 1/1/86
Raytheon Aircraft Corporation effective 1/1/86
Raytheon Patriot Support Company effective 1/1/86
Beech Holdings, Inc. effective 1/1/86
Cedarapids, Inc. effective 1/1/87
Beech Aerospace Services, Inc. effective 1/1/88
Seiscor Inc. effective 1/1/88
Seismograph Service Corporation effective 1/1/88
Seismograph Service Corporation (Overseas) effective 1/1/88
Patriot Overseas Support Company effective 10/3/88
Data Logic, Inc. effective 1/1/89
Raytheon Services Nevada Company effective 11/5/90
Amber Engineering, Inc. effective 2/1/93
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
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 Limite 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
Raytheon Inernational, Inc. effective 6/1/94
Arkansas Aerospace, Inc. effective 7/1/94
Harbert-Yeargin, Inc. (non-exempt and
exempt salaried payrolls only) effective 1/1/95
Raytheon Advanced Systems Company effective 1/1/95
Raytheon Brazil Integrated Systems Company effective 1/1/95
Raytheon Pacific Company effective 1/1/95
Raytheon Systems International Company effective 1/1/95
Raytheon Tennessee Company effective 1/1/95
Raytheon Transportation Systems Company effective 1/1/95
Standard Havens Inc. effective 4/1/95
Litwin Engineers & Constructors, Inc. effective 8/1/95
Seiscor Technologies, Inc. effective 1/1/96
E-Systems, Inc. effective 10/1/96
ARTICLE I - PREAMBLE
The Raytheon Savings and Investment Plan (the "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, ss. 2550.404(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.
The Plan as restated herein shall be effective as of January 1, 1994 or
such other dates as may be specifically provided herein or as otherwise required
by law for the Plan or either of the Merged Plans referred to in Section 13.6 to
satisfy the requirements of Section 401(a) of the Code. The rights of former
Employees whose Severance from Service Date occurred prior to the date of any
amendment shall be governed by the terms of the Plan in effect on their
Severance from Service Date except as otherwise provided herein.
ARTICLE II - ELIGIBILITY
2.1 Eligibility Requirements - Present Employees -- Each 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.
2.2 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 time to time make exceptions and
adjustments in the foregoing procedure on a uniform and nondiscriminatory basis.
2.3 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.
2.4 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 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 402(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 together with earnings thereon, 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 shall 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 ss.1.402(g)-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 in which the excess deferrals were made.
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 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.
(f) For purposes of this Section 3.3, the following
definitions and special rules shall apply:
(i) The term "Annual Earnings" means the Employee's wages
which are required to be reported on IRS Form W-2 for the calendar year
which coincides with the 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 the Companies to the
Plan on behalf of the Eligible Employee and any pre-tax
elective contributions made by the Companies which are
excludible from the Eligible Employee's income under Section
125 of the Code.
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.
(iv) The term "Qualified Nonelective Contributions" means
contributions that are made pursuant to Sections 3.3(c), 3.8(c) or 3.12
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), 3.8(c) or 3.12. 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 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.
3.5 Change in Elective Deferrals -- Except as provided in Sections 3.3
and 3.4, any Participant may change his or her Elective Deferral percentage to
increase or decrease said percentage by notifying Fidelity, such change to take
effect as of the next administratively feasible Pay Period.
3.6 Voluntary Reduction of Elective Deferral to Zero -- Notwithstanding
the notice requirements specified in Section 3.5, any Participant may elect to
reduce the level of the Participant's Elective Deferral to zero as of the
beginning of any Pay Period. The reduction will take effect as soon as
practicable following telephone notification by the Participant to Fidelity. A
Participant who has reduced his or her Elective Deferral to zero may again make
Elective Deferrals as of the next administratively feasible Pay Period
subsequent to telephone notification to Fidelity.
3.7 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, the
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, to an annual maximum
of three percent (3%) of the Participant's Eligible Compensation for the Plan
Year. will be paid into the Participant's Matching Contribution Account.
3.8 Limitations on Matching Contributions.
(a) In no event may the Matching Contributions made on behalf
of all Higher Paid Eligible Employees, or forfeitures allocated to the Accounts
of such Employees, who have satisfied the eligibility requirements of Article II
with respect to any Plan Year result in an Actual Contribution 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
Contribution 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 Contribution 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 Contribution Percentage.
(b) The Administrator shall be authorized to implement rules
authorizing or requiring reductions in Matching Contributions that may be made
by Higher Paid Eligible Employees during the Plan Year (prior to any
contributions to the Trust Fund), so that the limitation of Section 3.8(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 3.8(a).
(d) If the limitation under Section 3.8(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 Higher Paid Eligible Employees as soon as practicable after
the end of such Plan Year (or, if forfeitable under the terms of the Plan,
forfeited), but no later than the last day of the immediately following Plan
Year. The Excess Amounts distributed shall include both the Matching
Contributions 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(m) of the Code and shall include income for the Plan Year to
which the Excess Amounts relate.
(e) Elective Deferrals and Matching Contributions shall be
further limited to the extent required to prevent prohibited multiple use of the
alternative limitation described in Sections 401(k)(3)(A)(ii)(II) and
401(m)(2)(A)(ii) of the Code and the provisions of Reg. ss.1.401(m)-2(b) and any
further guidance issued thereunder. If such multiple use occurs, the Actual
Contribution Percentage for all Higher Paid Eligible Employees (determined after
applying the foregoing provisions of this Section 3.8) shall be reduced in
accordance with Reg. ss.1.401(m)-2(c) and any further guidance issued thereunder
in order to prevent such multiple use of the alternative limitation.
(f) The Administrator may utilize any combination of the
methods described in Sections 3.8(b), (c) and (d) to assure that the limitations
of Sections 3.8(a) and (e) are satisfied.
(g) For purposes of this Section 3.8, the following
definitions and special rules shall apply:
(i) The term "Annual Earnings" shall have the meaning
specified in Section 3.3(f)(i).
(ii) The term "Actual Contribution 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 Matching Contributions paid to the
Trust Fund for such Plan Year on behalf of the Eligible
Employee plus the amount of forfeitures allocated to the
Eligible Employee's Account, divided by
(B) The Eligible Employee's Annual Earnings,
including any Elective Deferrals made by the Companies to the
Plan on behalf of the Eligible Employee or any pre-tax
election contributions under a "cafeteria plan" (as defined in
Section 125 of the Code and applicable regulations) maintained
by the Companies for such Plan Year.
Matching Contributions and forfeitures 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, such
amounts are actually paid to the Trust no later than 12 months after
the Plan Year to which the contribution relates and such amounts are
contributed on account of Elective Deferrals for such Plan Year.
(iii) The term "Excess Amounts" shall mean with respect to
each Higher Paid Eligible Employee, the amount equal to the total
Matching Contributions made on behalf of the Eligible Employee together
with the forfeitures allocated to the Eligible Employee's Account
(determined prior to the application of the leveling procedure
described below) minus the product of the Eligible Employee's Actual
Contribution Percentage (determined after the leveling procedure
described below) multiplied by the amount specified in Section
3.8(g)(ii)(B) above. In accordance with the regulations issued under
Section 401(m) of the Code, Excess Amounts shall be determined by a
leveling procedure under which the Actual Contribution 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 3.8(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 Contribution Percentage to equal the Actual Contribution
Percentage of the Higher Paid Eligible Employee with the next highest
Actual Contribution Percentage. This leveling procedure shall be
repeated until the limitation of Section 3.8(a) is satisfied.
(iv) The term "Qualified Nonelective Contributions" shall
have the meaning specified in Section 3.3(f)(iv).
(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 Matching Contributions and forfeitures under the two plans shall be
treated as made under a single plan, and if two or more of such plans
are permissibly aggregated for purposes of Section 401(m) 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 Contribution Percentage of a
Higher Paid Eligible Employee, all plans 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 Contribution Percentage for the family
group, which is treated as one Higher Paid Eligible Employee, is the
Actual Contribution 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 Contribution Percentages for all Employees.
(h) The limitations of this Section 3.8 shall apply to Plan Years
beginning on or after January 1, 1987.
(i) Notwithstanding anything in the Plan to the contrary, if the rate
of Matching Contributions, determined after application of the corrective
mechanisms described in Section 3.3, discriminates in favor of Higher Paid
Eligible Employees, any such amounts attributable to any Excess Amounts (as
described in Subsection 3.3(f)(iii)) of each affected Higher Paid Eligible
Employee shall be forfeited so that the rate of Matching Contribution is
nondiscriminatory. Any such forfeitures shall be made no later than the end of
the Plan Year following the Plan Year for which the Matching Contribution was
made and shall be treated in accordance with Section 3.9.
3.9 Forfeitures --
(a) In the event that a Participant incurs a Severance from
Service prior to attaining a Nonforfeitable right to the Participant's Matching
Contribution, the Matching Contribution Account will be forfeited as of the
first day of the month immediately following the earliest of: (i) the date on
which the Participant incurs a Period of Severance of five consecutive years;
(ii) death; or (iii) the date on which the Participant's Employee Account is
distributed in accordance with Article VI. Forfeitures of Matching Contributions
will be used to reduce future contributions of the Companies to the Plan.
(b) If, in connection with his Severance from Service, a
Participant received a distribution of his Employee Account when he did not have
a Nonforfeitable right to his Matching Contribution Account, the Matching
Contributions that were forfeited, unadjusted by any subsequent gains or losses,
shall be restored if he again becomes an Employee prior to incurring a Period of
Severance of five consecutive years, performs an Hour of Service, and repays the
full value of his prior distributions, unadjusted for subsequent gains and
losses, before the first to occur of (i) the end of the five year period
beginning with the date he again becomes an Employee or (ii) the date on which
he incurs a Period of Severance of five consecutive years.
3.10 Rollover Contributions and Transfers --
(a) 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; 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; 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"); or rollover contributions from the Raytheon Stock Ownership
Plan by former Participants in that plan who have incurred a Severance from
Service. 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 (a) of Section 3.10 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, or was a former Participant in the Raytheon Stock Ownership
Plan and the entire amount of the rollover contribution is comprised of
the Participant's account in that plan; 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.
(b) Effective January 1, 1993, Participants may direct that
"eligible rollover distributions," as defined in Section 402(c) of the Code, be
transferred directly to the Plan. Rules similar to those applicable to "rollover
contributions" shall apply to amounts transferred directly to the Plan.
(c) Participants who are also covered under the Raytheon Stock
Ownership Plan and who are entitled to diversify their accounts under such plan,
may direct that the portion of their account which is eligible for
diversification under such plan be transferred to the Plan. Rules similar to
those applicable to "rollover contributions" shall apply to amounts transferred
to this Plan except that such transferred amounts shall not be eligible for
loans or withdrawals.
(d) Account balances held in other defined contribution plans
sponsored by member of the Raytheon controlled group of corporations by
Participants in this Plan shall be transferred to this Plan on the following
conditions:
(i) the account balances, including loan balances,
held by former Employees of Serv-Air in the Serv-Air Inc. Savings and
Retirement Plan (E-Systems Bright Plan) will be transferred to this
Plan on March 1, 1996, or as soon thereafter as is administratively
feasible, provided that the accounts of those Participants who notify
the local employee benefits office of their desire not to have their
accounts transferred will not be transferred as of March 1, 1996, but
may be transferred in the future as of specified dates by mutual
consent of the respective Plan sponsors and record keepers. The account
balances transferred from the Serv-Air Inc. Savings and Retirement Plan
may, at the election of the member, be distributed in either a lump sum
payable in cash or substantially level periodic installments, or a
combination thereof. In the event distribution is delayed or in the
event distribution is in installments, the allocation of gains and
losses shall continue to be applicable to the transferred balance until
fully distributed;
(ii) the account balances of Employees of Seiscor
Technologies Inc. which are being held in the Seiscor Technologies
401(k) Plan (including loan balances, after-tax contributions and
earnings thereon) shall be transferred to this Plan on March 1, 1996,
or as soon thereafter as administratively feasible;
(iii) Participants who were participants in the
United Dominion Industries Compass Plan may transfer pre-tax and
after-tax accounts to this Plan on or after January 1, 1996. Such
Participants who were hired by United Dominion Industries prior to July
1, 1990, may elect, upon retirement, to use all or part of the Rollover
Account (including the after-tax subaccount) received from the United
Dominion Industries Compass Plan and the earnings thereon to purchase
an annuity providing a lifetime monthly benefit. A list of the
Participants who have a right to elect a lifetime annuity with respect
to their rollover account received from the United Dominion Industries
Compass Plan is set forth on Appendix D hereof. If the Participant is
married, the annuity will be paid in the standard form of a 50% joint
and survivor annuity with the spouse as the joint annuitant unless the
spouse consents in writing before a notary public to a different form
of annuity.
(iv) Participants who are participants in the
E-Systems Inc. Employee Savings Plan ("E-Systems Savings Plan") may,
while in a Period of Service with one of the Companies, elect to
transfer the following accounts held in the E-Systems Savings Plan to
this Plan on or after October 1, 1996: Employer Pre-Tax Basic (elective
deferrals); E-Systems Company Match (matching contributions); E-Systems
ESOP Assets Account; ECAP Profit-Sharing Plan; and rollover
contributions. No other accounts in the E-Systems Savings Plan,
including without limitation the S&I Pre-1987 After-Tax Basic, the VRIF
Pre-1987 After-Tax Basic and the VRIF Post-1986 After-Tax Basic, shall
be transferred to this Plan. Assets transferred from E-Systems Savings
Plan accounts shall be held in RAYSIP accounts as follows:
E-Systems Account RAYSIP Account
Employer Pre-Tax Basic Account Employee Account
ESOP Assets Account and E-Systems Rollover Contributions Account
Rollover Contributions Account
E-Systems Company Match Account Qualified Non-Elective and ECAP
Contribution Account Employer Profit-Sharing
Account
(e) Separate subaccounts shall be established for all amounts
received from after-tax accounts in the Seiscor Technologies 401(k) Plan and the
United Dominion Industries Compass Plan, and such other plans from which
transfers of after-tax accounts to this Plan have been approved by the
Administrator. Fidelity shall maintain appropriate records for these after-tax
subaccounts for tax purposes, including determining the appropriate basis upon
which earnings will be taxed at the time of withdrawal or distribution.
Participants may not borrow against the balances in these after-tax subaccounts.
Withdrawals may be made from such accounts pursuant to Section 6.3.
3.11 Refund of Contributions to the Companies -- Notwithstanding the
provisions of Article XII, if, or to the extent that, the Companies' deductions
for contributions made to the Plan are disallowed, the Companies will have the
right to obtain the return of any such contributions for a period of one year
from the date of disallowance. For this purpose, all Elective Deferrals and
Matching Contributions are made subject to the conditions that they are
deductible under the Code for the taxable year of the Companies for which the
contribution is made. Furthermore, any contribution made by the Companies on the
basis of a mistake in fact may be returned to the Companies within one year from
the date such contribution was made.
3.12 Qualified Non-Elective Contributions -- Specified Amounts -- Each
of the Companies may make contributions to the Plan on behalf of eligible
Employees, provided that the name of the unit, the effective date of such
contributions and the specified amount are set forth on Appendix B hereto. Such
contributions shall be Qualified Non-Elective Contributions as defined in
Section 3.3(f)(iv) and shall be included in determining the actual deferral
percentage under Section 3.3. If the contributions described in this Section
3.12 are made on behalf of an Employee who is not a Participant, an Account
shall be established for such Employee and the Employee shall have the right to
elect investment options under Section 4.1. If the Employee does not make a
valid election in which investment options are designated for 100% of the
Participant's Account, then 100% of the Participant's Account shall be invested
in Fund B, a fixed income fund. The Employee may, in accordance with Sections
4.2 and 4.3, change the investment allocation for future deferrals and transfer
account balances between investment funds.
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;
Fund F - a growth fund, designated by the Administrator,
investing primarily in equities of companies of all types
and sizes;
Fund G - a growth fund, designated by the Administrator,
investing primarily in equities of well-known and
established companies.
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.
Officers covered the Securities and Exchange Commission Regulation 16b wil not
be eligible to elect Fund C, the Raytheon common stock fund, until such election
is approved by the shareholders of Raytheon Company. Any request to invest in or
transfer out of the Raytheon Common Stock Fund by an "executive officer," as
that term is defined in the regulations of the Securities Exchange Commission
(SEC) shall not become effective until six (6) months subsequent to the date the
Administrator is notified of the request.
4.2 Change in Investment Allocation of Future Deferrals -- Each
Participant may elect to change the investment allocation of future Elective
Deferrals, Matching Contributions and rollover contributions effective as of the
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.
In determining the amount of the transfer, the Participant's Account shall be
valued as of the close of business on the Business Day on which telephone notice
is received; provided, however, that in any case where the telephone notice is
received after 4:00 p.m. Eastern Time (daylight or standard, whichever is in
effect on the date of the call), the Account shall be valued as of the close of
business on the next Business Day. 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
5.1 Employee, Rollover Contribution and Qualified Non-Elective
Contribution Accounts -- Each Participant shall have a Nonforfeitable right to
any amounts in the Participant's Employee, Rollover Contribution and Qualified
Non-Elective Contribution Accounts.
5.2 Matching Contribution Account -- Each Participant shall have a
Nonforfeitable right to the Participant's Matching Contribution Account upon the
earliest 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, service by Employees on or
after January 1, 1984, with the following Companies, the assets of which have
been acquired by the Company, will be credited as vesting service: Unimac
Company, Inc.; Litwin Engineers & Constructors, Inc.; E-Systems, Inc.; Rust
Engineering, Inc., including Rust Plant Services. In addition, vesting service
credited to an Employee under Section 6.2(b) of the Speed Queen Company
Retirement Savings Plan will be credited to an Eligible Employee regardless of
whether such vesting service was earned prior to January 1, 1984); or
(b) Completion of a Period of Participation of three (3) years
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 most recent date on which 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); and, in applying
this paragraph to Employees on the salaried payrolls of Standard Havens, Inc. as
of March 31, 1995, who as of April 1, 1995, become Participants in this Plan,
the most recent date on which the Employee commenced participation in the
Standard Havens, Inc. 401(k) Profit Sharing Plan shall be deemed the date of
commencement of participation under this Plan; or
(c) The Participant's Retirement, death (while an Employee),
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; or
(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; or
(f) The date of Layoff of Participants laid off as a resul
of the sale of the Sorensen facility; or
(g) The date of transfer for those Participants permanently
transferred to Standard Missile Company (a joint ventur
between Raytheon Company and Hughes Missile Systems
Company).
(h) October 31, 1995, for those Participants who were
employed by D. C. Heath as of such date and became
employees of Houghton Mifflin Inc., or a subsidiary
thereof, as a result of the sale of the D. C.Heath
business to Houghton Mifflin on October 31, 1995.
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 the following Periods of Service shall not be taken into account:
(i) in the case of a Participant who has made no Elective
Deferrals to the Plan, the Period of Service before any Period of
Severance which equals or exceeds five consecutive years; and
(ii) in the case of a Participant who has made Elective
Deferrals to the Plan and who has incurred a Period of Severance which
equals or exceeds five years, the Period of Service after such Period
of Severance shall not be taken into account for purposes of
determining the nonforfeitable interest of such Participant in the
Matching Contributions allocated to his Account prior to such Period of
Severance.
(b) Periods of Severance -- In determining the length of a
Period of Service for purposes of Section 14.39, the Administrator shall include
any period of time beginning on an Employee's Severance from Service Date and
ending on the date on which he is next credited with an Hour of Service,
provided that such Hour of Service is credited within the 12 consecutive month
period following such Severance from Service Date.
(c) Other Periods -- In making the determinations described in
subsections (a) and (b) of this Section 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
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 determined under Section 6.9. Withdrawals
from Funds A, B, D, E, F and G, 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 and Qualified Non-Elective
Contribution Accounts -- While in a Period of Service, a Participant may
withdraw assets from his or her Accounts as follows:
(a) all or a portion of the Participant's Employee Account
and Qualified Non-Elective Contribution Account upon attainment of age 59 1/2
or
(b) a distributable amount (as defined in Treas. Reg. ss.
1.401(k)-1(d)(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. In determining the amount required
to satisfy the financial need, the Administrator shall take into account the
federal, state and local income taxes or penalties reasonably anticipated to
result from the withdrawal. 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 determined under Section 6.9. 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, E, F and G, 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
determined under Section 6.9. 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, E, F and G 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 Section 213(d) of the Code)
previously incurred by the Participant, the Participant's spouse or any
dependents (as defined in Section 152 of the Code) of the Participant, or which
are necessary for these persons to obtain medical care described in Section
213(d) of the Code; 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 of the Code); expenses relating to the
need to prevent the eviction from or foreclosure on the 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
6.1, Section 6.2 or Section 6.3 may be redeposited in the Plan.
6.6 Distribution -- Distribution of the Participant's Employee,
Rollover Contribution and Qualified Non-Elective Contribution Accounts 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
at the direction of the Participant (or his legal representative or Beneficiary
in the case of his Disability or death) upon the Retirement, Disability (as
defined in Section 14.13), death, or Severance from Service (as defined in
Section 14.49) of the Participant. In the event the Participant dies or his
Severance from Service occurs after his Normal Retirement Age, or if the value
of the Nonforfeitable portion of the Participant's Account as of the Valuation
Date which coincides with or immediately precedes the date of distribution is
not in excess of $3,500, the Administrator shall cause the distribution to
automatically be made. Payment will be made in the form of 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. Distributions will be based upon the value of the Account
as determined under Section 6.9. Distribution of the amounts in said accounts in
the funds designated in Funds A, B, D, E, F and G, 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 3.9.
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.
A lump sum distribution of a Participant's Account 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 amounts are transferred to this Plan from another plan
qualified under Section 401(a) of the Code (other than amounts described in
Section 3.10(c)), any distribution or withdrawal rights available to the
Participant under such other plan which are protected under Section 411(d)(6) of
the Code shall be available to the Participant under this Plan.
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.
6.8 Direct Rollovers -- Effective January 1, 1993, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. For purposes
of this paragraph, the following terms shall have the following meanings:
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's beneficiary, or for a specified period
of 10 years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income.
(b) Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code or a qualified trust
described in Section 401(a) of the Code that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, the term is limited to an individual retirement account
or individual retirement annuity.
(c) Distributee: A distributee includes a Participant or
former Participant. In addition, the Participant's or former Participant's
surviving spouse and the Participant's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(d) Direct Rollover: A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
6.9 Determination of Amount of Withdrawal or Distribution -- In
determining the amount of any withdrawal or distribution hereunder, the
Participant's Account shall be valued as of the close of business on the
Business Day on which telephone notice is received; provided, however, that in
any case where the telephone notice is received after 4:00 p.m. Eastern Time
(daylight or standard, whichever is in effect on the date of the call), the
Account shall be valued as of the close of business on the next Business Day.
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. Participants who have incurred a
Severance from Service will not be eligible for a Plan loan. 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, limits imposed by
the Internal Revenue Code and any other requirements of applicable statute or
regulation will be applied. Under the current requirements of the Internal
Revenue Code, if the aggregate value of a Participant's Employee Account,
Rollover Contribution Account and Nonforfeitable portion of the Matching
Contribution Account exceeds $20,000, the loan cannot exceed the lesser of
one-half (1/2) the Nonforfeitable aggregate value or $50,000 reduced by the
excess of (a) the highest outstanding balance of loans from the Plan during the
one-year period ending on the day before the date on which such loan was made
over (b) the outstanding balance of loans from the Plan on the date on which
such loan was made.
7.4 Effective Date of Loans -- Loans will be effective as specified
in the Administrator's rules then in effect.
7.5 Repayment Schedule - The Participant may select a repayment
schedule of 1, 2, 3, 4 or 5 years. If the loan is used to acquire any dwelling
which, within a reasonable time is to be used (determined at the time the loan
is made) as the principal residence of the Participant, the repayment period may
be extended up to 15 years at the election of the Participant. All repayments
will be made through payroll deductions in accordance with the loan agreement
executed at the time the loan is made, except that, in the event of the sale of
all or a portion of the business of the Employer or one of the Companies, or
other unusual circumstances, the Administrator, through uniform and equitable
rules, may establish 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.
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 at any
time during the period July 1 through December 31 thereafter; the rate published
on the first business day of December will apply to loans which are effective at
any time during the period January 1 through June 30 thereafter.
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 Severance from Service of a
Participant, the Participant will be given the option of continuing to repay the
outstanding loan. In any case where payments on the outstanding loan are not
made within 90 days of the Participant's Severance from Service Date, the amount
of any unpaid principal will be deducted from the Participant's account and
reported as a distribution. 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 with the Employer, the Participant's Severance from Service
Date, or the expiration of twelve (12) months from the date of the suspension.
In the event the Participant does not return to active employment with the
Employer, the Participant will be given the option of continuing to repay the
outstanding loan. If the Participant fails to resume payments on the loan, the
outstanding loan will be reported as a taxable distribution. In no event,
however, shall the loan be deducted from the Participant's Account earlier than
the date on which the Participant (i) incurs a Severance from Service, or, (ii)
attains age 59-1/2.
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 --
The total for any Limitation Year of the annual additions to a Participant's
Account under this Plan when added to the annual additions to a Participant's
account under any qualified defined contribution plan maintained by the Employer
shall not exceed the lesser of (i) twenty-five percent (25%) of total
compensation from the Employer, and (ii) $30,000 or, if greater, one-fourth of
the defined benefit dollar limitation set forth in Section 415(b)(1) of the Code
as in effect for the Limitation Year.
For purposes of this Section 8.1, the term "annual addition" shall
mean, with respect to any Limitation Year, Matching Contributions, forfeitures,
Qualified Nonelective Contributions and Elective Deferrals to this Plan, plus
the sum of the following amounts allocable for such Plan Year to the
Participant's accounts in all other qualified plans maintained by the Employer
in which he participates: (1) employer contributions (including pre-tax
contributions), (2) forfeitures which have been reallocated to the Participant's
account, (3) Participant after-tax contributions; and (4) amounts described in
Sections 415(l)(1) and 419A(d)(2) of the Code.
For purposes of this Section 8.1, the term "compensation" shall mean
all amounts paid to an Employee for personal services actually rendered to the
Companies and Affiliates, including, but not limited to, wages, salary,
commissions, bonuses, overtime and other premium pay as specified in Reg.
ss.1.415-2(d)(2), but excluding deferred compensation, stock options, and other
distributions which receive special tax treatment as specified in Reg.
ss.1.415-2(d)(3).
8.2 Reduction of Annual Additions -- In the event it is determined that
the annual additions to a Participant's Account under this Plan or any other
qualified defined contribution plan maintained by the Employer for any
limitation year would be in excess of the limitations of Section 8.1, such
annual additions shall be reduced to the extent necessary to bring them within
such limitations. If, as a result of the allocation of forfeitures, a reasonable
error in estimating a Participant's Eligible Compensation, a reasonable error in
determining the amount of Elective Deferrals that may be made with respect to
any Participant, or under other limited facts and circumstances which the
Internal Revenue Service finds justify the availability of the remedies
contained herein, the Administrator, in coordination with the administrator of
any other defined contriution plan maintained by the Employer, shall reduce the
annual additions which have been made to a Participant's Account to the
acceptable limit by the following procedures, on a pro rata basis, in the
following order:
(a) by returning to the Participant any voluntary or mandatory
Employee contributions made to the Raytheon Support Services Company Money
Accumulation Plan or any other defined contribution plan maintained by the
Employer;
(b) to the extent the limitation is still exceeded, Elective
Deferrals to this Plan, or other defined contribution plan qualified under
Section 401(k) of the Code maintained by the Employer during such Limitation
Year, shall be distributed to the Participant; and
(c) to the extent such limitation is still exceeded, any
Qualified Non-Elective Contribution to Participant's account in this Plan, or
other defined contribution plan qualified under Section 401(k) of the Code
maintained by the Employer during such Limitation Year, shall be reduced to the
extent necessary to reduce annual additions to the acceptable limit;
(d) to the extent the limitation is still exceeded, any
Matching Employer Contributions to this Plan, or other defined contribution plan
qualified under Section 401(k) of the Code maintained by the Employer during
such Limitation Year, shall be reduced to the extent necessary to decrease
Participant's annual additions to the acceptable limit;
(e) to the extent the limitation is still exceeded, excess
annual additions in the Participant's Account in the Raytheon Stock Ownership
Plan (RAYSOP) shall be used to reduce allocations for the next Limitation Year
(and succeeding Limitation Years, as necessary) for that Participant if the
Participant is covered by such Plan at the end of such Limitation Year. In the
event the Participant is not covered by the Plan at the end of the Limitation
Year, any excess annual additions which remain must, as provided in Reg.
ss.1.415-6(b)(6)(ii), be held unallocated in a suspense account for the
Limitation Year and reallocated in the next Limitation Year to all of the
remaining Participants in proportion to their RAYSOP allocation in such Plan
Year.
8.3 Coordination with Limitation on Benefit from All Plans --
Notwithstanding any other provisions in this Plan to the contrary, in the case
of a Participant who also participates in any qualified defined benefit plan
which is maintained by the Employer (whether or not terminated), the sum of the
defined benefit plan fraction and the defined contribution plan fraction may not
exceed 1.0 for any Limitation Year. The defined benefit plan fraction for any
Limitation Year is a fraction, the numerator of which is the projected annual
benefit of the Participant under the plan (determined as of the close of the
Limitation Year); and the denominator of which is the lesser of (i) the product
of 1.25, multiplied by the dollar limitation applicable to defined benefit
plans, in effect under applicable law for such Limitation Year; or (ii) the
product of 1.4 multiplied by one hundred percent (100%) of the Participant's
average compensation for the three consecutive calendar years during which he
had the highest aggregate compensation from the Employer. The defined
contribution plan fraction for any Limitation Year is a fraction, the numerator
of which is the sum of the annual additions (as defined in Section 8.1) to the
Participant's Accounts as of the close of the Limitation Year; and the
denominator of which is the sum of the lesser of the following amounts
determined for the current Limitation Year and each prior Limitation Year: (i)
the product of 1.25 multiplied by the dollar limitation applicable to defined
contribution plans, in effect under applicable law for the Limitation Year; or
(ii) the product of 1.4 multiplied by 25% of such Participant's total
compensation for the Limitation Year. In the event that the limitation set forth
above is exceeded, adjustments shall be made in the defined benefit plan.
8.4 Effective Date -- This Article VIII shall be effective for
Limitation Years beginning on or after January 1, 1987.
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 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. The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans maintained
by the Employer, or (b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Section 411(b)(1)(C) of the Code.
(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. 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, $150,000 for
Plan Years beginning on or after January 1, 1994) allocated to any Key
Employee for the Plan Year under this Plan and all other defined
contribution plans in the same required aggregation group. This clause
(b) shall not apply to any plan required to be included in an
aggregation group if such plan enables a defined benefit plan required
to be included in such group to meet the requirements of Section
401(a)(4) or Section 410 of the Code.
This paragraph shall not apply to a Participant covered under a qualified
defined benefit plan maintained by the Employer if the Participant's vested
benefit thereunder satisfies the requirements of Section 416(c) of the Code.
Notwithstanding any other language herein, a Non-Key Eligible Employee may not
fail to receive a defined contribution minimum allocation because either (1)
said Eligible Employee was excluded from participation (or accrues no benefit)
merely because the Employee's compensation is less than the stated amount, or
(2) the Employee is excluded from participation (or accrues no benefit) merely
because of a failure to make Elective Deferrals.
9.5 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 9.5 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 accordance with
Sections 4.2 and 4.3.
10.3 Expenses -- Expenses of the Plan and Trust shall be paid from
the Trust.
ARTICLE XI - ADMINISTRATION OF THE PLAN
11.1 General Administration -- The general administration of the Plan
shall be the responsibility of Raytheon Company (or any successor thereto) which
shall be the Administrator and Named Fiduciary for purposes of the Retirement
Act. The Company shall have the authority, in its sole discretion, to construe
the terms of the Plan and to make determinations as to eligibility for benefits
and as to other issues within the "Responsibilities of the Administrator"
described in Article XI, Section 11.2. All such determinations of the Company
shall be conclusive and binding on all persons.
11.2 Responsibilities of the Administrator -- The Administrator shall
assign responsibility for performance of all necessary administrative duties,
including the following:
(a) Determination of all questions which may arise under the
Plan with respect to eligibility for participation and administration of
accounts, including without limitation questions with respect to membership,
vesting, loans, withdrawals, accounting, status of accounts, stock ownership and
voting rights, and any other issue requiring interpretation or application of
the Plan.
(b) Reference of appropriate issues to the Offices of the
Executive Vice President - Chief Financial Officer, 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
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.
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.
The Administrator is the fiduciary to whom the Plan grants full
discretion, with the advice of counsel, to interpret the Plan; to determine
whether a claimant is eligible for benefits; to decide the amount, form and
timing of benefits; and to resolve any other matter under the Plan which is
raised by a claimant or identified by the Administrator. All questions arising
from or in connection with the provisions of the Plan and its administration,
not herein provided to be determined by the Board of Directors, shall be
determined by the Administrator, and any determination so made shall be
conclusive and binding upon all persons affected thereby.
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 PLAN
12.1 Right to Amend or Terminate Plan
Each of the Companies reserves the right at any time or times, by
action of its Board of Directors, 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, no amendment to the
Plan shall be made which shall:
(a) deprive any Participant of amounts allocated to his
Account prior to the date of the amendment;
(b) except as provided in Section 3.11, make it possible for
any part of the corpus or income of the Trust Fund to be used for or diverted to
purposes other than the exclusive benefit of the Participants or their
beneficiaries prior to the satisfaction of all liabilities with respect to such
Participant or their Beneficiaries;
(c) modify the vesting schedule and deprive a Participant of
his Nonforfeitable rights to amounts allocated to his account prior to the date
of the amendment. Further, if the vesting schedule of the Plan is amended, or
the Plan is amended to directly or indirectly affect a Nonforfeitable percentage
of a Participant's Account, each Participant with a Period of Service of at
least three years may elect, within a reasonable period after the adoption of
the amendment to have his nonforfeitable percentage computed under the Plan
without regard to such amendment. The period during which the election may be
made shall commence with the date the amendment is adopted or the change made
and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective,or
(iii) 60 days after the Participant is issued written
notice of the amendment;
(d) increase the duties of liabilities of the Trustee without
its consent. Notwithstanding the foregoing provisions of this Section or any
other provisions of this Plan, any modification or amendment of the Plan may be
made retroactively if necessary or appropriate to conform the Plan with, or to
satisfy the conditions of, the Retirement Act, the Code, or any other law,
governmental regulation or ruling.
Any termination, modification or amendment of the Plan shall be subject
to approval by the Board of Directors of the Company.
12.2 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.
12.3 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, subject to the requirements of Section 401(k)(10) of
the Code and Reg. ss. 1.401(k)-1(d)(3), be entitled to receive any amounts then
credited to his or her Account in the Trust Fund. The Trustee may make payments
in cash or, to the extent permitted by Section 6.6, in stock.
ARTICLE XIII - ADDITIONAL PROVISIONS
13.1 Effect of Merger, Consolidation or Transfer -- In the event of any
merger or consolidation with or transfer of assets or liabilities to any other
plan or to this Plan, each Participant of the Plan shall be entitled to a
benefit immediately after the merger, consolidation or transfer, which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had been
terminated).
13.2 Necessity of Initial Qualification -- This Plan is established
with the intent that it shall qualify under Sections 401(a) and 401(k) of the
Code as that section exists at the time the Plan is established. If the Internal
Revenue Service determines that the Plan initially fails to meet those
requirements, then within thirty (30) days after the date of such determination
all of the 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.
Notwithstanding the foregoing, the Administrator is authorized to
comply with a domestic relations order determined by it to be a qualified
domestic relations order as defined in Section 414(p) of the Code. A
distribution may be made to an alternate payee under a qualified domestic
relations order in the form of a lump sum payment at the time specified in such
order, regardless of any restrictions on the commencement of the distribution
that then may apply to the Participant to whom the order relates.
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 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.
13.6 Merger of United Engineers & Constructors, Inc. Profit Sharing
Plan and the United Engineers & Constructors, Inc. Boston Employees Profit
Sharing Plan -- Effective as of December 31, 1994, or such earlier date as is
determined to be administratively feasible (the "Merger Date"), the United
Engineers & Constructors, Inc. Profit Sharing Plan and the United Engineers &
Constructors, Inc. Boston Employees Profit Sharing Plan (the "Merged Plans")
shall be merged into this Plan. All assets held under the trust agreements for
each of the Merged Plans shall be transferred to the Trustee, such transfer to
be effective as of the Merger Date. Amounts held in the various investment
accounts under the trust agreements for each of the Merged Plans shall be
transferred to the investment accounts under the Trust in accordance with
procedures established by the Administrator. Upon such transfer, the assets of
the Merged Plans shall become assets of this Plan for all purposes hereunder,
effective as of the Merger Date, and this Plan shall assume all the liabilities
of the Merged Plans, and benefits shall thereafter be allocated and paid
pursuant to the provisions of this Plan. All participants in the Merged Plans
shall remain fully vested in their accounts which are transferred to this Plan.
All withdrawal and distribution options under each of the Merged Plans shall be
made available under this Plan with respect to the transferred accounts to the
extent required by Section 411(d)(6) of the Code. Any amendments to this Plan
which are effective prior to January 1, 1994 shall be considered as amendments
to each of the Merged Plans as well.
13.7 Transfer of Assets from Raytheon Subsidiary Savings and Investment
Plan -- Effective as of December 31, 1994, or such earlier date as is
administratively feasible (the "Transfer Date") the account balances of those
participants under the Raytheon Subsidiary Savings and Investment Plan who are
employed on the non-exempt and exempt salaried payrolls of Harbert-Yeargin, Inc.
(the "Transferred Accounts") shall be transferred into this Plan. Assets equal
to the Transferred Accounts shall be transferred from the Raytheon Subsidiary
Savings and Investment Plan to the Trustee, such transfer to be effective as of
the Transfer Date. Amounts held in the various investment accounts under the
Raytheon Subsidiary Savings and Investment Plan and Trust shall be transferred
to the investment accounts under the Trust in accordance with procedures
established by the Administrator. Upon such transfer, the assets transferred
from the Raytheon Subsidiary Savings and Investment Plan shall become assets of
this Plan for all purposes hereunder, effective as of the Transfer Date, and
this Plan shall assume all the liabilities of the Raytheon Subsidiary Savings
and Investment Plan for the Transferred Accounts, and benefits shall thereafter
be allocated and paid pursuant to the provisions of this Plan. All participants
in the Raytheon Subsidiary Savings and Investment Plan whose accounts are
transferred to this Plan shall remain fully vested in their Transferred
Accounts. All withdrawal and distribution options under the Raytheon Subsidiary
Savings and Investment Plan shall be made available under this Plan with respect
to the Transferred Accounts to the extent required by Section 411(d)(6) of the
Code.
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, a Matching
Contribution Account and, where applicable, a Rollover Contribution Account and
a Qualified Non-Elective Contribution Account.
14.2 "Administrator" means Raytheon Company.
14.3 "Affiliate" means a trade or business which together with any of
the Companies is a member of (i) a controlled group of corporations within the
meaning of Section 414(b) of the Code; (ii) a group of trades or businesses
(whether or not incorporated) under common control as defined in Section 414(c)
of the Code, or (iii) an affiliated service group as defined in Section 414(m)
of the Code, or which is an entity otherwise required to be aggregated with the
Companies pursuant to Section 414(o) of the Code. For purposes of Article VIII,
the determination of controlled groups of corporations and trades or businesses
under common control shall be made after taking into account the modification
required under Section 415(h) of the Code. This section shall be effective as of
January 1, 1987.
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 the person designated by the Participant to
receive the value of his Account in the event of his death; provided, however,
that if a Participant with a spouse designates a Beneficiary other than his
spouse, said designation shall not take effect unless the spouse consents in
writing to such designation and said spousal consent acknowledges the effect of
said designation and is witnessed by a representative of the Plan or a notary
public. Said spousal consent shall be effective only with respect to the spouse
granting such consent, and shall not be required if the Participant can
establish that there is no spouse, that the spouse cannot be located, or that
other conditions exist as may be prescribed by regulations issued by the
Secretary of the Treasury. If there is no Beneficiary designated by the
Participant or surviving at the death of the Participant, payment of his Account
shall be made in accordance with Section 6.6. Subject to the foregoing, a
Participant may designate a new beneficiary at any time by filing with the
Administrator a written request for such change on a form prescribed by the
Administrator. Such change shall become effective only upon receipt of the form
by the Administrator, but upon such receipt of the change shall relate back to
and take effect as of the date the Participant signed such request, whether or
not the Participant is living at the time of such receipt, provided, however,
that neither the Trustee nor the Administrator shall be liable by reason of any
payment of the Participant's Account made before receipt of such form.
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 "Code" means the Internal Revenue Code of 1986, as amended.
14.10 "Company" means Raytheon Company but shall not include a
Division, Operation or similar cohesive group of Raytheon Company excluded by
the Board of Directors of Raytheon Company.
14.11 "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.
14.12 "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.
14.13 "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.
14.14 "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.
14.15 "Elective Deferral" means a voluntary reduction of Participant's
compensation in accordance with Section 3.2 hereof.
14.16 "Eligible Compensation" means the base pay (including vacation
and sick pay and pay for unused vacation), supervisory differentials, shift
premiums and, effective January 1, 1985, and September 23, 1996, respectively,
sales commissions and flight pay for pilots at Raytheon Aircraft Services, paid
to a Participant by the Employer, excluding all other earnings from any source.
Effective for Plan Years beginning on or after January 1, 1989 and prior to
December 31, 1993, in no event shall the amount of Eligible Compensation taken
into account under the Plan for any Plan Year exceed $200,000 (or such larger
amount as the Secretary of the Treasury may determine for such Plan Year under
Section 401(a)(17) of the Code). Effective for Plan Years beginning on or after
January 1, 1994, in no event shall the amount of Eligible Compensation taken
into account under the Plan for any Plan Year exceed $150,000 (or such larger
amount as the Secretary of the Treasury may determine for such Plan Year under
Section 401(a)(17) of the Code). For purposes of this limitation only, in
determining compensation the rules of Section 414(q)(6) of the Code shall apply,
except that in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who have
not attained age 19 before the close of the Plan Year.
14.17 "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, independent contractors reclassified as
a result of an audit by a government agency as common law employees and all
individuals performing services for the Companies who are paid through accounts
payable, as distinguished from the payroll system, and, effective January 1,
1987, a person who is a Leased Employee.
14.18 "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. This section shall be effective as of January 1, 1987.
14.19 "Employee Account" means that portion of Participant's Account
which is attributable to Elective Deferrals, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.20 "Employer" means Raytheon Company and any Affiliate thereof.
14.21 "Employment Commencement Date" is the date on which the Employee
first performs an Hour of Service with the Employer.
14.22 "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.
14.23 "Fidelity" means Fidelity Investments, the recordkeeper for the
Plan.
14.24 "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.
14.25 "Higher Paid Eligible Employee" means an individual described in
Section 414(q) of the Code, after giving effect to subsection (12) thereof, and
any regulation, notice or other guidance issued by the Internal Revenue Service
thereunder. The determination of whether an individual is a Higher Paid Eligible
Employee may be made by the Administrator on the basis of any elective provision
permitted under such regulation, notice or other guidance. In general, an
Employee will be considered a Higher Paid Eligible Employee if such individual:
(a) was a five percent owner as defined in Section 416(i)(1)
(iii) of the Code at any time during the current or preceding Plan
Year;
(b) received compensation in excess of $50,000 during the
current or preceding Plan Year (adjusted annually for increases in the
cost of living in accordance with Section 415(d) of the Code); or
(c) was at any time an officer within the meaning of Section
416(i) of the Code during the preceding Plan Year, and who received
compensation in the current or preceding Plan Year greater than 50
percent of the dollar limitation in effect under Section 415(b)(1)(A)
of the Code for such Plan Year. Notwithstanding the foregoing, no more
than 50 or, if lesser, the greater of 3 employees or 10 percent of the
Employees shall be treated as officers.
(d) An Employee who is not described in paragraph (b) or (c)
above for the preceding Plan Year shall not be treated as described in
paragraph (b) or (c) unless such Employee is one of the 100 Employees
who receive the most compensation from the Employer during the Plan
Year.
(e) A former Employee shall be treated as a Higher Paid
Eligible Employee if such former Employee had a separation year prior
to the Plan Year and was a Higher Paid Eligible Employee for either (1)
such Employee's separation year or (2) any Plan Year ending on or after
the Employee's 55th birthday. A separation year is the Plan Year in
which the Employee separates from service.
(f) Notwithstanding anything to the contrary in this Plan,
Sections 414(b), (c), (m), (n), and (o) of the Code are applied prior
to determining whether an Employee is a High Paid Eligible Employee.
(g) "Non-Higher Paid Eligible Employee" shall mean an Employee
who is neither a Higher Paid Eligible Employee nor a family member
(within the meaning of Section 414(q)(6) of the Code).
(h) "Compensation" shall mean the Employee's wages which are
required to be reported on IRS Form W-2, increased by any Elective
Deferrals made by the Companies to the Plan on behalf of the Employee
and any pre-tax elective contributions made by the Companies which are
excludible from the Employee's income under Section 125 of the Code.
14.26 (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.
(iii) with a predecessor contractor under the Integrated Range
Engineering Contract (IRE) on Kwajalein Atoll or contracts covered by
the Service Contract Act, provided that the Employee is in a Period of
Service with such contractor on the day immediately preceding the
Employee's Employment Commencement date or Reemployment Commencement
Date, as applicable.
(c) To the extent applicable, the rules set forth in 29 CFR
Sections 2530.200b-2(b) and (c) for computing an "Hour of Service" are
incorporated herein by reference.
14.27 "Layoff" means an involuntary interruption of service due to
reduction of work force with or without the possibility of recall to employment
when conditions warrant.
14.28 "Leased Employee" means any person (other than an Employee) who,
pursuant to an agreement between the Employer and any other person, has
performed services for the Employer (or any related person as provided in
Section 414(n)(6) of the Code) on a substantially full time basis for a period
of at least one year and such services are of the type historically performed by
employees in the business field of the Employer. Leased Employees are not
eligible to participate in the Plan. Notwithstanding the foregoing, if such
"Leased Employees" constitute less than 20% of the nonhighly compensated
workforce of the Employer within the meaning of Section 414(n)(5)(C)(ii) of the
Code, the term "Employee" shall not include Leased Employees covered by a plan
described in Section 414(n)(5) of the Code. This section shall be effective as
of January 1, 1987.
14.29 "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.
14.30 "Matching Contribution" means contribution made to the Trust
in accordance with Section 3.7 hereof.
14.31 "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.
14.32 "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.
14.33 "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.
14.34 "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of determination
under this Plan.
14.35 "Normal Retirement Age" means the Participant's sixty-fifth
(65th) birthday.
14.36 "Participant" means an individual who is enrolled in the Plan
pursuant to Article II and has not withdrawn the entire amount of his or her
Account.
14.37 "Pay Period" means a scheduled period for payment of wages or
salaries.
14.38 "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. For the purpose of determining a Period of
Participation, participation in the Raytheon Savings and Investment Plan for
Specified Hourly Payroll Employees and the Raytheon Employee Savings and
Investment Plan shall be considered as participation in this Plan.
14.39 "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.
14.40 "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.
14.41 "Plan" means the Raytheon Savings and Investment Plan as amended
from time to time.
14.42 "Plan Year" means a calendar year, or a portion thereof occurring
prior to the termination of the Plan.
14.43 "Qualified Non-Elective Contribution Account" means that portion
of a Participant's Account which is attributable to Qualified Non-Elective
Contributions received pursuant to Section 3.12, adjusted for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.44 "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.
14.45 "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.
14.46 "Retirement Act" means the Employee Retirement Income Security
Act of 1974, including any amendments thereto.
14.47 "Rollover Contribution Account" means that portion of a
Participant's Account which is attributable to rollover contributions received
pursuant to Section 3.10, adjustments for withdrawals and distributions, and the
earnings and losses attributable thereto.
14.48 "Salaried Payrolls" means the nonexempt salaried and the exempt
salaried payrolls which are processed in the United States.
14.49 "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.
14.50 "Severance from Service Date" means the earlier of:
(a) the date on which an Employee quits, retires, is
discharged, or dies; or
(b) except as provided in paragraphs (c) and (d) hereof, the
first anniversary of the first date of a period during which an Employee is
absent for any reason other than quit, retirement, discharge or death, provided
that, on an equitable and uniform basis, the Administrator may determine that,
in the case of a Layoff as the result of a permanent plant closing, the
Administrator may designate the date of Layoff or other appropriate date prior
to the first anniversary of the first date of absence as the Severance From
Service Date; or
(c) in the case of an Authorized Military Leave of Absence
from which the Employee does not return prior to expiration of recall rights,
"Severance from Service Date" means the first day of absence because of the
leave; or
(d) in the case of an absence due to Disability, "Severance
from Service Date" means the earlier of the first anniversary of the first day
of absence because of the Disability or the date of termination of the
Disability; or
(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; or
(f) in the case of an Employee who is absent from service
beyond the first anniversary of the first day of absence (i) by reason of the
pregnancy of the Employee, (ii) by reason of the birth of a child to the
Employee, (iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee or (iv) for purposes
of caring for such child for a period beginning immediately following such birth
or placement, the Severance from Service Date shall be the second anniversary of
the first day of such absence. The period between the first and second
anniversaries of the first day of absence is neither a Period of Service nor a
Period of Severance.
14.51 "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.
14.52 "Surviving Spouse" means a lawful spouse surviving the
Participant as of the date of Participant's death.
14.53 "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.
14.54 "Trustee" means the Trustee and any successor trustees under the
Trust Agreement.
14.55 "Trust Fund" means the cash, securities, and other property held
by the Trustee for the purposes of the Plan.
14.56 "Valuation Date" means each Business Day.
14.57 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.
RAYTHEON SAVINGS AND INVESTMENT PLAN
Qualified Non-Elective Contributions
Raytheon Engineers & Constructors, Inc.
Location Effective Date Amount of Contribution
Rust Plant Services units at: 6/12/96 2% of gross pay for
the period 6/1/96 - 9/30/96
Amoco Chemical Company
Decatur, AL
Hexcel Corporation,
Decatur, AL
Newport South, Inc.,
Grenada, MS
J.D. Irving, Inc.,
Fort Edwards, NY
Kimberly Clark Corporation,
Owensboro, KY
Kimberly Clark Corporation,
Yucca, AZ
3M Company,
Decatur, AL
3M Company, Kearneysville,
WV
EXHIBIT 4.4
RAYTHEON SAVINGS AND INVESTMENT PLAN FOR
SPECIFIED HOURLY PAYROLL EMPLOYEES
Provisions in Effect as of October 1, 1996
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
participation 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 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, Sections 2550.404(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.
The Plan as restated herein shall be effective as of July 1, 1994 or
such other dates as may be specifically provided herein. The rights of former
Employees whose Severance from Service Date occurred prior to the date of any
amendment shall be governed by the terms of the Plan in effect on their
Severance from Service Date except as otherwise provided herein.
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 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 deferral (as defined in Code
Section 402(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 together with earnings thereon, 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 shall 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(g)-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 in which the excess deferrals were made.
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 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.
(f) For purposes of this Section 3.3, the following
definitions and special rules shall apply:
(i) The term "Annual Earnings" means the Employee's wages which are
required to be reported on IRS Form W-2 for the calendar year which coincides
with the 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 the Companies to the Plan on behalf of the Eligible Employee
and any pre-tax elective contributions made by the Companies which are
excludible from the Eligible Employee's income under Section 125 of the Code.
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.
(iv) The term "Qualified Nonelective Contributions" means contributions
that are made pursuant to Sections 3.3(c), 3.8(c) or 3.12, 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), 3.8(c) or 3.12. 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), 3.8(c) or 3.12.
(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 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.
3.4 Reinstatement of Reduced Amounts -- Any reduction effected pursuant
to Section 3.3 will remain in effect for the remainder of the Plan Year in which
the reduction occurs and will not be automatically reinstated. A Participant
whose Elective Deferral has been reduced may elect to increase his or her
Elective Deferral effective as of any Entry Date subsequent to notice from the
Administrator that Elective Deferrals may be increased as of a specified Entry
Date. This election must be made in accordance with the procedure described in
Section 3.5.
3.5 Change in Elective Deferrals -- Except as provided in Sections 3.3
and 3.4, any Participant may change his or her Elective Deferral percentage to
increase or decrease said percentage by notifying Fidelity, such change to take
effect as of the next administratively feasible Pay Period.
3.6 Voluntary Reduction of Elective Deferral to Zero -- Notwithstanding
the notice requirements specified in Section 3.5, any Participant may elect to
reduce the level of the Participant's Elective Deferral to zero as of the
beginning of any Pay Period. The reduction will take effect as soon as
practicable following telephone notification by the Participant to Fidelity. A
Participant who has reduced his or her Elective Deferral to zero may again make
Elective Deferrals as of the next administratively feasible Pay Period
subsequent to telephone notification to Fidelity.
3.7 Matching Contributions -- For each Plan Year, commencing on or
after January 1, 1987, subject to limitations imposed by the Internal Revenue
Code, the Companies will match from Net Annual Profits or Net Profits the
Elective Deferral of each Participant at the rate of one-half (1/2) of the
Participant's Elective Deferral on an annual basis, provided that for any Pay
Period the matching amount shall not exceed three percent (3%) of the
Participant's Eligible Compensation for that pay period.
3.8 Limitations on Matching Contributions --
(a) In no event may the Matching Contributions made on behalf of all
Higher Paid Eligible Employees, or forfeitures allocated to the Accounts of such
Employees, who have satisfied the eligibility requirements of Article II with
respect to any Plan Year, result in an Actual Contribution 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 Contribution
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 Contribution 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
Contribution Percentage.
(b) The Administrator shall be authorized to implement rules
authorizing or requiring reductions in Matching Contributions that may be made
by Higher Paid Eligible Employees during the Plan Year (prior to any
contributions to the Trust Fund), so that the limitation of Section 3.8(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 3.8(a).
(d) If the limitation under Section 3.8(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 Higher Paid Eligible Employees as soon as practicable after
the end of such Plan Year (or, if forfeitable under the terms of the Plan,
forfeited), but no later than the last day of the immediately following Plan
Year. The Excess Amounts distributed shall include both the Matching
Contributions 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(m) of the Code and shall include income for the Plan Year to
which the Excess Amounts relate.
(e) Elective Deferrals and Matching Contributions shall be further
limited to the extent required to prevent prohibited multiple use of the
alternative limitation described in Sections 401(k)(3)(A)(ii)(II) and
401(m)(2)(A)(ii) of the Code and the provisions of Reg. ss.1.401(m)-2(b) and any
further guidance issued thereunder. If such multiple use occurs, the Actual
Contribution Percentage for all Higher Paid Eligible Employees (determined after
applying the foregoing provisions of this Section 3.8) shall be reduced in
accordance with Reg. ss.1.401(m)-2(c) and any further guidance issued thereunder
in order to prevent such multiple use of the alternative limitation.
(f) The Administrator may utilize any combination of the methods
described in Sections 3.8(b), (c) and (d) to assure that the limitations of
Sections 3.8(a) and (e) are satisfied.
(g) For purposes of this Section 3.8, the following definitions
and special rules shall apply:
(i) The term "Annual Earnings" shall have the meaning specified
in Section 3.3(f)(i).
(ii) The term "Actual Contribution 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 Matching Contributions paid to the Trust Fund for
such Plan Year on behalf of the Eligible Employee plus the amount of forfeitures
allocated to the Eligible Employee's Account, divided by
(B) The Eligible Employee's Annual Earnings, including any Elective
Deferrals made by the Companies to the Plan on behalf of the Eligible Employee
or any pre-tax election contributions under a "cafeteria plan" (as defined in
Section 125 of the Code and applicable regulations) maintained by the Companies
for such Plan Year.
Matching Contributions and forfeitures 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, such amounts are actually paid to
the Trust no later than 12 months after the Plan Year to which the contribution
relates and such amounts are contributed on account of Elective Deferrals for
such Plan Year.
(iii) The term "Excess Amounts" shall mean with respect to each Higher
Paid Eligible Employee, the amount equal to the total Matching Contributions
made on behalf of the Eligible Employee together with the forfeitures allocated
to the Eligible Employee's Account (determined prior to the application of the
leveling procedure described below) minus the product of the Eligible Employee's
Actual Contribution Percentage (determined after the leveling procedure
described below) multiplied by the amount specified in Section 3.8(g)(ii)(B)
above. In accordance with the regulations issued under Section 401(m) of the
Code, Excess Amounts shall be determined by a leveling procedure under which the
Actual Contribution 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 3.8(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 Contribution Percentage to equal the Actual Contribution Percentage of
the Higher Paid Eligible Employee with the next highest Actual Contribution
Percentage. This leveling procedure shall be repeated until the limitation of
Section 3.8(a) is satisfied.
(iv) The term "Qualified Nonelective Contributions" shall have the
meaning specified in Section 3.3(f)(iv).
(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 Matching
Contributions and forfeitures under the two plans shall be treated as made under
a single plan, and if two or more of such plans are permissibly aggregated for
purposes of Section 401(m) 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 Contribution Percentage of a Higher Paid
Eligible Employee, all plans 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 Contribution Percentage for the family group, which is treated as one
Higher Paid Eligible Employee, is the Actual Contribution 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 Contribution Percentages for all Employees.
(h) The limitations of this Section 3.8 shall apply to Plan Years
beginning on or after January 1, 1987, and shall apply only to those Eligible
Employees who are not included in a unit of employees covered by a collective
bargaining unit.
3.9 Forfeitures --
(a) In the event that a Participant incurs a Severance from
Service prior to attaining a Nonforfeitable right to the Participant's Matching
Contribution, the Matching Contribution Account will be forfeited as of the
first day of the month immediately following the earliest of: (i) the date on
which the Participant incurs a Period of Severance of five consecutive years;
(ii) death; or (iii) the date on which the Participant's Employee Account is
distributed in accordance with Article VI. Forfeitures of Matching Contributions
will be used to reduce future contributions of the Companies to the Plan.
(b) If, in connection with his Severance from Service, a Participant
received a distribution of his Employee Account when he did not have a
Nonforfeitable right to his Matching Contribution Account, the Matching
Contributions that were forfeited, unadjusted by any subsequent gains or losses,
shall be restored if he again becomes an Employee prior to incurring a Period of
Severance of five consecutive years, performs an Hour of Service, and repays the
full value of his prior distributions, unadjusted for subsequent gains and
losses, before the first to occur of (i) the end of the five year period
beginning with the date he again becomes an Employee or (ii) the date on which
he incurs a Period of Severance of five consecutive years.
3.10 Rollover Contributions and Transfers --
(a) 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; 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"); or rollover contributions from the Raytheon Stock Ownership Plan for
Specified Hourly Payroll Employees by former Participants in that plan who have
incurred a Severance from Service. 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 othe
distributions;
(v) rollover contributions transferred pursuant to this Section
3.10 shall be credited to the Participant's Rollover Contribution Account.
Rollover contributions will be invested upon receipt by the Trustee;
(vi) 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, or was a former Participant in the
Raytheon Stock Ownership Plan for Specified Hourly Payroll Employees and the
entire amount of the rollover contribution is comprised of the Participant's
account in that plan; 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.
(b) Effective January 1, 1993, Participants may direct that "eligible
rollover distributions," as defined in Section 402(c) of the Code, be
transferred directly to the Plan. Rules similar to those applicable to "rollover
contributions" shall apply to amounts transferred directly to the Plan.
(c) Participants who are also covered under the Raytheon Stock
Ownership Plan or the Raytheon Stock Ownership Plan for Specified Hourly Payroll
Employees and who are entitled to diversify their accounts under either of such
plans, may direct that the portion of their account which is eligible for
diversification under such plan be transferred to the Plan. Rules similar to
those applicable to "rollover contributions" shall apply to amounts transferred
to this Plan except that such transferred amounts shall not be eligible for
loans or withdrawals.
3.11 Refund of Contributions to the Companies -- Notwithstanding the
provisions of Article XII, if, or to the extent that, the Companies' deductions
for contributions made to the Plan are disallowed, the Companies will have the
right to obtain the return of any such contributions for a period of one year
from the date of disallowance. For this purpose, all Elective Deferrals and
Matching Contributions are made subject to the conditions that they are
deductible under the Code for the taxable year of the Companies for which the
contribution is made. Furthermore, any contribution made by the Companies on the
basis of a mistake in fact may be returned to the Companies within one year from
the date such contribution was made.
3.12 Qualified Non-Elective Contributions -- Specified Amounts -- Each
of the Companies may make contributions to the Plan on behalf of eligible
Employees, provided that the name of the unit, the effective date of such
contributions and the specified amount are set forth on Appendix B hereto. Such
contributions shall be Qualified Non-Elective Contributions as defined in
Section 3.3(f)(iv) and shall be included in determining the actual deferral
percentage under Section 3.3. If the contributions described in this Section
3.12 are made on behalf of an Employee who is not a Participant, an Account
shall be established for such Employee and the Employee shall have the right to
elect investment options under Section 4.1. If the Employee does not make a
valid election in which investment options are designated for 100% of the
Participant's Account, then 100% of the Participant's Account shall be invested
in Fund B, a fixed income fund. The Employee may, in accordance with Sections
4.2 and 4.3, change the investment allocation for future deferrals and transfer
account balances between investment funds.
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;
Fund F - a growth fund, designated by the Administrator, investing
primarily in equities of companies of all types and sizes;
Fund G - a growth fund, designated by the Administrator, investing
primarily in equities of well-known and established companies.
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. In
determining the amount of the transfer, the Participant's Account shall be
valued as of the close of business on the Business Day on which telephone notice
is received; provided, however, that in any case where the telephone notice is
received after 4:00 p.m. Eastern Time (daylight or standard, whichever is in
effect on the date of the call), the Account shall be valued as of the close of
business on the next Business Day.
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 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, Rollover Contribution and Qualified Non-Elective
Contribution Accounts -- Each Participant shall have a Nonforfeitable right to
any amounts in the Participant's Employee, Rollover Contribution
and Qualified Non-Elective Contribution Accounts.
5.2 Matching Contribution Account -- Each Participant shall have a
Nonforfeitable right to the Participant's Matching Contribution Account upon the
earliest 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 Participation of three (3) years
subsequent to fulfillment of the eligibility requirements in Section 2.1;
(c) The Participant's Retirement, death while an Employee,
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.
Notwithstanding anything in the Plan to the contrary, if the rate of
Matching Contributions, determined after application of the corrective
mechanisms described in Section 3.3, discriminates in favor of Higher Paid
Eligible Employees, any such amounts attributable to any Excess Amounts (as
described in Subsection 3.3(f)(iii)) of each affected Higher Paid Eligible
Employee shall be forfeited so that the rate of Matching Contribution is
nondiscriminatory. Any such forfeitures shall be made no later than the end of
the Plan Year following the Plan Year for which the Matching Contribution was
made and shall be treated in accordance with Section 3.9.
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 the
following Periods of Service shall not be taken into account:
(i) 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
(ii) in the case of a Participant who has incurred a Period of
Severance which equals or exceeds five years, the Period of Service after such
Period of Severance shall not be taken into account for purposes of determining
the nonforfeitable interest of such Participant in the Matching Contributions
allocated to his Account prior to such Period of Severance.
(b) Periods of Severance -- In determining the length of a Period of
Service for purposes of Section 14.39, 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 determined under
Section 6.8. Withdrawals from Funds A, B, D, E, F and G 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 and Qualified Non-Elective
Contribution Accounts -- While in a Period of Service, a Participant may
withdraw assets from his or her Account as follows:
(i) all or a portion of the Participant's Employee Account and
Qualified Non-Elective Contribution Account upon attainment of age 59 1/2; or
(ii) a distributable amount (as defined in Treas. Reg. Section
1.401(k)-1(d)(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. In determining the amount required
to satisfy the financial need, the Administrator shall take into account the
federal, state and local income taxes or penalties reasonably anticipated to
result from the withdrawal. 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 and
Qualified Non-Elective Contribution Accounts of less than $250 will not be
permitted. Withdrawals will be based upon the value of the Account as determined
under Section 6.8 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, E, F and G 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
determined under Section 6.8 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 E, F and G 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 Section 213(d) of the Code)
previously incurred by the Participant, the Participant's spouse or any
dependents (as defined in Section 152 of the Code) of the Participant, or which
are necessary for these persons to obtain medical care described in Section
213(d) of the Code; 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); expenses relating to the need to prevent
the eviction from or foreclosure on the 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,
Rollover Contribution and Qualified Non-Elective Contribution Accounts 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
at the direction of the Participant (or his legal representative or Beneficiary
in the case of his Disability or death) upon the Retirement, Disability (as
defined in Section 14.13), death, or Severance from Service (as defined in
Section 14.49) of the Participant. In the event the Participant dies or his
Severance from Service occurs after his Normal Retirement Age, or if the value
of the Nonforfeitable portion of the Participant's Account as of the Valuation
Date which coincides with or immediately precedes the date of distribution is
not in excess of $3,500, the Administrator shall cause the distribution to
automatically be made. Payment will be made in the form of 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. Distributions will be based upon the Value of the Account
as determined under Section 6.8. Distribution of the amounts in said accounts in
the funds designated in Funds A, B, D, E, F and G 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.
Except as provided in 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.
A lump sum distribution of a Participant's Account 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 amounts are transferred to this Plan from another plan
qualified under Section 401(a) of the Code (other than amounts described in
Section 3.10(b)), any distribution or withdrawal rights available to the
Participant under such other plan which are protected under Section 411(d)(6) of
the Code shall be available to the Participant under this Plan.
6.7 Direct Rollovers -- Effective January 1, 1993, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. For purposes
of this paragraph, the following terms shall have the following meanings:
(a) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's beneficiary, or for a specified period of 10
years or more; any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and the portion of any distribution that is
not includible in gross income.
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code or a qualified trust
described in Section 401(a) of the Code that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, the term is limited to an individual retirement account
or individual retirement annuity.
(c) Distributee: A distributee includes a Participant or former
Participant. In addition, the Participant's or former Participant's surviving
spouse and the Participant's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
6.8 Determination of Amount of Withdrawal or Distribution -- In
determining the amount of any withdrawal or distribution hereunder, the
Participant's Account shall be valued as of the close of business on the
Business Day on which telephone notice is received; provided, however, that in
any case where the telephone notice is received after 4:00 p.m. Eastern Time
(daylight or standard, whichever is in effect on the date of the call), the
Account shall be valued as of the close of business on the next Business Day.
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 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. Participants who have incurred a
Severance from Service will not be eligible for a Plan loan. 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 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.
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 at any
time during the period July 1 through December 31 thereafter; the rate published
on the first business day of December will apply to loans which are effective at
any time during the period January 1 through June 30 thereafter.
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 Severance from Service of a
Participant, the Participant will be given the option on continuing to repay the
outstanding loan. In any case where payments on the outstanding loan are not
made within ninety (90) days of the Participant's Severance from Service Date,
the amount of any unpaid principal will be deducted from the Participant's
Account and reported as a distribution. 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. In the event
the Participant does not return to active employment with the Employer, the
Participant will be given the option of continuing to repay the outstanding
loan. If the Participant fails to resume payments on the loan, the outstanding
loan will be reported as a distribution. In no event, however, shall the loan be
deducted from the Participant's Account earlier than the date on which the
Participant (i) incurs a Severance from Service or (ii) attains age 59-1/2.
ARTICLE VIII - LIMITATIONS OF SECTION 415 OF THE CODE
8.1 Maximum Permissible Amount of a Participant's Annual Addition --
The total for any Limitation Year of the annual additions to a Participant's
Account under this Plan when added to the annual additions to a Participant's
account under any qualified defined contribution plan maintained by the Employer
shall not exceed the lesser of (i) twenty-five percent (25%) of total
compensation from the Employer, and (ii) $30,000 or, if greater, one-fourth of
the defined benefit dollar limitation set forth in Section 415(b)(1) of the Code
as in effect for the Limitation Year.
For purposes of this Section 8.1, the term "annual addition" shall
mean, with respect to any Limitation Year, Matching Contributions, Qualified
Nonelective Contributions, forfeitures and Elective Deferrals to this Plan, plus
the sum of the following amounts allocable for such Plan Year to the
Participant's accounts in all other qualified plans maintained by the Employer
in which he participates: (1) employer contributions (including pre-tax
contributions), (2) forfeitures which have been reallocated to the Participant's
account, (3) Participant after-tax contributions; and (4) amounts described in
Sections 415(l)(1) and 419A(d)(2) of the Code.
For purposes of this Section 8.1, the term "compensation" shall mean
all amounts paid to an Employee for personal services actually rendered to the
Companies and Affiliates, including, but not limited to, wages, salary,
commissions, bonuses, overtime and other premium pay as specified in Reg.
ss.1.415-2(d)(2), but excluding deferred compensation, stock options, and other
distributions which receive special tax treatment as specified in Reg.
ss.1.415-2(d)(3).
8.2 Reduction of Annual Additions -- In the event it is determined that
the annual additions to a Participant's Account under this Plan or any other
qualified defined contribution plan maintained by the Employer for any
limitation year would be in excess of the limitations of Section 8.1, such
annual additions shall be reduced to the extent necessary to bring them within
such limitations. If, as a result of the allocation of forfeitures, a reasonable
error in estimating a Participant's Eligible Compensation, a reasonable error in
determining the amount of Elective Deferrals that may be made with respect to
any Participant, or under other limited facts and circumstances which the
Internal Revenue Service finds justify the availability of the remedies
contained herein, the Administrator, in coordination with the administrator of
any other defined contribution plan maintained by the Employer, shall reduce the
annual additions which have been made to a Participant's Account to the
acceptable limit by the following procedures, on a pro rata basis, in the
following order:
(a) by returning to the Participant any voluntary or mandatory Employee
contributions made to the Raytheon Support Services Company Money Accumulation
Plan or any other defined contribution plan maintained by the Employer;
(b) to the extent the limitation is still exceeded, Elective Deferrals
to this Plan, or other defined contribution plan qualified under Section 401(k)
of the Code maintained by the Employer during such Limitation Year, shall be
distributed to the Participant; and
(c) to the extent such limitation is still exceeded, any Qualified
Non-Elective Contribution to Participant's account in this Plan or other defined
contribution plan qualified under Section 401(k) of the Code maintained by the
Employer during such Limitation Year, shall be reduced to the extent necessary
to reduce annual additions to the acceptable limit;
(d) to the extent the limitation is still exceeded, any Matching
Employer Contributions to this Plan, or other defined contribution plan
qualified under Section 401(k) of the Code maintained by the Employer during
such Limitation Year, shall be reduced to the extent necessary to decrease
Participant's annual additions to the acceptable limit;
(e) to the extent the limitation is still exceeded, excess annual
additions in the Participant's Account in the Raytheon Stock Ownership Plan
(RAYSOP) shall be used to reduce allocations for the next Limitation Year (and
succeeding Limitation Years, as necessary) for that Participant if the
Participant is covered by the plan at the end of such Limitation Year. In the
event the Participant is not covered by such plan at the end of the Limitation
Year, any excess annual additions which remain must, as provided in Reg.
ss.1.415-6(b)(6)(ii), be held unallocated in a suspense account for the
Limitation Year and reallocated in the next Limitation Year to all of the
remaining Participants in proportion to their RAYSOP allocation in such Plan
Year.
8.3 Coordination with Limitation on Benefit from All Plans --
Notwithstanding any other provisions in this Plan to the contrary, in the case
of a Participant who also participates in any qualified defined benefit plan
which is maintained by the Employer (whether or not terminated), the sum of the
defined benefit plan fraction and the defined contribution plan fraction may not
exceed 1.0 for any Limitation Year. The defined benefit plan fraction for any
Limitation Year is a fraction, the numerator of which is the projected annual
benefit of the Participant under the plan (determined as of the close of the
Limitation Year); and the denominator of which is the lesser of (i) the product
of 1.25, multiplied by the dollar limitation applicable to defined benefit
plans, in effect under applicable law for such Limitation Year; or (ii) the
product of 1.4 multiplied by one hundred percent (100%) of the Participant's
average compensation for the three consecutive calendar years during which he
had the highest aggregate compensation from the Employer. The defined
contribution plan fraction for any Limitation Year is a fraction, the numerator
of which is the sum of the annual additions (as defined in Section 8.1) to the
Participant's Accounts as of the close of the Limitation Year; and the
denominator of which is the sum of the lesser of the following amounts
determined for the current Limitation Year and each prior Limitation Year: (i)
the product of 1.25 multiplied by the dollar limitation applicable to defined
contribution plans, in effect under applicable law for the Limitation Year; or
(ii) the product of 1.4 multiplied by 25% of such Participant's total
compensation for the Limitation Year. In the event that the limitation set forth
above is exceeded, adjustments shall be made in the defined benefit plan.
8.4 This Article VIII shall be effective for Limitation Years beginning
on or after January 1, 1987.
ARTICLE IX - LIMITATIONS OF SECTION 416 OF THE CODE
9.1 General Rule -- In the event that the Plan covers Eligible
Employees who are not included in a unit of Employees covered by a collective
bargaining agreement and 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 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. The accrued benefit
of a Participant other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C) of the Code.
(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. 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, $150,000 for Plan Years beginning on or
after January 1, 1994) allocated to any Key Employee for the Plan Year under
this Plan and all other defined contribution plans in the same required
aggregation group. This clause (b) shall not apply to any plan required to be
included in an aggregation group if such plan enables a defined benefit plan
required to be included in such group to meet the requirements of Section
401(a)(4) or Section 410 of the Code.
This paragraph shall not apply to a Participant covered under a qualified
defined benefit plan maintained by the Employer if the Participant's vested
benefit thereunder satisfies the requirements of Section 416(c) of the Code.
Notwithstanding any other language herein, a Non-Key Eligible Employee may not
fail to receive a defined contribution minimum allocation because either (1)
said Eligible Employee was excluded from participation (or accrues no benefit)
merely because the Employee's compensation is less than the stated amount, or
(2) the Employee is excluded from participation (or accrues no benefit) merely
because of a failure to make Elective Deferrals.
9.5 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 9.5 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 accordance with
Sections 4.2 and 4.3.
10.3 Expenses -- Expenses for the Plan and Trust shall be paid from
the Trust.
ARTICLE XI - ADMINISTRATION OF THE PLAN
11.1 General Administration -- The general administration of the Plan
shall be the responsibility of Raytheon Company (or any successor thereto) which
shall be the Administrator and Named Fiduciary for purposes of the Retirement
Act. The Company shall have the authority, in its sole discretion, to construe
the terms of the Plan and to make determinations as to eligibility for benefits
and as to other issues within the "Responsibilities of the Administrator"
described in Article XI, Section 11.2. All such determinations of the Company
shall be conclusive and binding on all persons.
11.2 Responsibilities of the Administrator -- The Administrator shall
assign responsibility for performance of all necessary administrative duties,
including the following:
(a) Determination of all questions which may arise under the Plan with
respect to eligibility for participation and administration of accounts,
including without limitation questions with respect to membership, vesting,
loans, withdrawals, accounting, status of accounts, stock ownership and voting
rights, and any other issue requiring interpretation or application of the Plan.
(b) Reference of appropriate issues to the Offices of the Executive
Vice President - Chief Financial Officer, 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
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.
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.
The Administrator is the fiduciary to whom the Plan grants full
discretion, with the advice of counsel, to interpret the Plan; to determine
whether a claimant is eligible for benefits; to decide the amount, form and
timing of benefits; and to resolve any other matter under the Plan which is
raised by a claimant or identified by the Administrator. All questions arising
from or in connection with the provisions of the Plan and its administration,
not herein provided to be determined by the Board of Directors, shall be
determined by the Administrator, and any determination so made shall be
conclusive and binding upon all persons affected thereby.
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 -- Each of the Companies reserves
the right at any time or times, by action of its Board of Directors, 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, no amendment to the Plan shall be made which shall:
(a) deprive any Participant of amounts allocated to his Account
prior to the date of the amendment;
(b) except as provided in Section 3.11, make it possible for any part
of the corpus or income of the Trust Fund to be used for or diverted to purposes
other than the exclusive benefit of the Participants or their beneficiaries
prior to the satisfaction of all liabilities with respect to such Participant or
their Beneficiaries;
(c) modify the vesting schedule and deprive a Participant of his
Nonforfeitable rights to amounts allocated to his account prior to the date of
the amendment. Further, if the vesting schedule of the Plan is amended, or the
Plan is amended to directly or indirectly affect a Nonforfeitable percentage of
a Participant's Account, each Participant with a Period of Service of at least
three years may elect, within a reasonable period after the adoption of the
amendment to have his nonforfeitable percentage computed under the Plan without
regard to such amendment. The period during which the election may be made shall
commence with the date the amendment is adopted or the change made and shall end
on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective, or
(iii) 60 days after the Participant is issued written notice of the
amendment;
(d) increase the duties of liabilities of the Trustee without its
consent. Notwithstanding the foregoing provisions of this Section or any othe
provisions of this Plan, any modification or amendment of the Plan may be made
retroactively if necessary or appropriate to conform the Plan with, or to
satisfy the conditions of, the Retirement Act, the Code, or any other law,
governmental regulation or ruling.
Any termination, modification or amendment of the Plan shall be subject
to approval by the Board of Directors of the Company.
12.2 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.
12.3 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 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, subject to the requirements of Section 401(k)(10) of
the Code and Reg. ss. 1.401(k)-1(d)(3), be entitled to receive any amounts then
credited to his or her Account in the Trust Fund. The Trustee may make payments
in cash or, to the extent permitted by Section 6.6, in stock.
ARTICLE XIII - ADDITIONAL PROVISIONS
13.1 Effect of Merger, Consolidation or Transfer -- In the event of any
merger or consolidation with or transfer of assets or liabilities to any other
plan or to this Plan, each Participant of the Plan shall be entitled to a
benefit immediately after the merger, consolidation or transfer, which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had been
terminated).
13.2 Necessity of Initial Qualification -- This Plan is established
with the intent that it shall qualify under Sections 401(a) and 401(k) of the
Code as that section exists at the time the Plan is established. If the Internal
Revenue Service determines that the Plan initially fails to meet those
requirements, then within thirty (30) days after the date of such determination
all of the vested assets of the Trust Fund held for the benefit of Participants
and their beneficiaries shall be distributed equitably among the contributors to
the Plan in proportion to their contributions, and the Plan shall be considered
to be rescinded and of no force or effect, unless such inadequacy is removed by
a retroactive amendment pursuant to the Code. Any nonvested Matching
Contributions and earnings attributable thereto shall be returned to the
Companies.
13.3 Limitation of Assignment -- No account under the Plan shall be
subject in any manner to attachment, anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, or the vesting of rights in any
person by operation of law or otherwise except as provided under this Plan,
including but not limited to the Trustee or Receiver in Bankruptcy, and any
attempt so to anticipate, alienate, sell, transfer, assign, encumber or charge
the same shall be void, nor shall any such benefit be in any way liable for or
subject to the debts, contracts, liabilities, engagements or torts of any person
entitled to such benefit. If any Participant is adjudicated bankrupt, or
attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge any benefit under the Plan, then such benefit shall, in the discretion of
the Administrator, cease and terminate and in that event the Trustee shall hold
or apply the same or any part thereof to or for the benefit of such Participant
in such manner as the Administrator may direct.
Notwithstanding the foregoing, the Administrator is authorized to
comply with a domestic relations order determined by it to be a qualified
domestic relations order as defined in Section 414(p) of the Code. A
distribution may be made to an alternate payee under a qualified domestic
relations order in the form of a lump sum payment at the time specified in such
order, regardless of any restrictions on the commencement of the distribution
that then may apply to the Participant to whom the order relates.
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 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.
13.6 Transfer of Assets from Raytheon Employee Savings and Investment
Plan -- Effective as of December 5, 1994, the account balances of those
participants under the Raytheon Employee Savings and Investment Plan who are
employed by Amana Refrigeration, Inc. in the unit represented by Local 2385,
International Association of Machinists and Aerospace Workers, at Amana's plant
in Fayetteville, Tennessee (the "Transferred Accounts") shall be transferred
into this Plan. Assets equal to the Transferred Accounts shall be transferred
from the Raytheon Employee Savings and Investment Plan to the Trustee, such
transfer to be effective as of December 5, 1994. Amounts held in the various
investment accounts under the Raytheon Employee Savings and Investment Plan and
Trust shall be transferred to the investment accounts under the Trust in
accordance with procedures established by the Administrator. Upon such transfer,
the assets transferred from the Raytheon Employee Savings and Investment Plan
shall become assets of this Plan for all purposes hereunder, effective as of
December 5, 1994, and this Plan shall assume all the liabilities of the Raytheon
Employee Savings and Investment Plan for the Transferred Accounts, and benefits
shall thereafter be allocated and paid pursuant to the provisions of this Plan.
All participants in the Raytheon Employee Savings and Investment Plan whose
accounts are transferred to this Plan shall remain fully vested in their
accounts which are transferred to this Plan. All withdrawal and distribution
options under the Raytheon Employee Savings and Investment Plan shall be made
available under this Plan with respect to the Transferred Accounts to the extent
required by Section 411(d)(6) of the Code.
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, a Matching
Contribution Account and, where applicable, a Rollover Contribution Account and
a Qualified Non-Elective Contribution Account.
14.2 "Administrator" means Raytheon Company.
14.3 "Affiliate" means a trade or business which together with any of
the Companies is a member of (i) a controlled group of corporations within the
meaning of Section 414(b) of the Code; (ii) a group of trades or businesses
(whether or not incorporated) under common control as defined in Section 414(c)
of the Code, or (iii) an affiliated service group as defined in Section 414(m)
of the Code, or which is an entity otherwise required to be aggregated with the
Companies pursuant to Section 414(o) of the Code. For purposes of Article VIII,
the determination of controlled groups of corporations and trades or businesses
under common control shall be made after taking into account the modification
required under Section 415(h) of the Code. This section shall be effective as of
January 1, 1987.
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 the person designated by the Participant to
receive the value of his Account in the event of his death; provided, however,
that if a Participant with a spouse designates a Beneficiary other than his
spouse, said designation shall not take effect unless the spouse consents in
writing to such designation and said spousal consent acknowledges the effect of
said designation and is witnessed by a representative of the Plan or a notary
public. Said spousal consent shall be effective only with respect to the spouse
granting such consent, and shall not be required if the Participant can
establish that there is no spouse, that the spouse cannot be located, or that
other conditions exist as may be prescribed by regulations issued by the
Secretary of the Treasury. If there is no Beneficiary designated by the
Participant or surviving at the death of the Participant, payment of his Account
shall be made in accordance with Section 6.6. Subject to the foregoing, a
Participant may designate a new beneficiary at any time by filing with the
Administrator a written request for such change on a form prescribed by the
Administrator. Such change shall become effective only upon receipt of the form
by the Administrator, but upon such receipt of the change shall relate back to
and take effect as of the date the Participant signed such request, whether or
not the Participant is living at the time of such receipt, provided, however,
that neither the Trustee nor the Administrator shall be liable by reason of any
payment of the Participant's Account made before receipt of such form.
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 "Code" means the Internal Revenue Code of 1986, as amended.
14.10 "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.
14.11 "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.
14.12 "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.
14.13 "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.
14.14 "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.
14.15 "Elective Deferral" means a voluntary reduction of Participant's
compensation in accordance with Section 2.2 hereof.
14.16 "Eligible Compensation" means the base pay (including vacation
and sick pay and pay for unused vacation and sick leave), supervisory
differentials, shift premiums and sales commissions paid to the Participant by
the Employer, excluding all other earnings from any source. Effective for Plan
Years beginning on or after January 1, 1989 and prior to December 31, 1993, in
no event shall the amount of Eligible Compensation taken into account under the
Plan for any Plan Year exceed $200,000 (or such larger amount as the Secretary
of the Treasury may determine for such Plan Year under Section 401(a)(17) of the
Code). Effective for Plan Years beginning on or after January 1, 1994, in no
event shall the amount of Eligible Compensation taken into account under the
Plan for any Plan Year exceed $150,000 (or such larger amount as the Secretary
of the Treasury may determine for such Plan Year under Section 401(a)(17) of the
Code). For purposes of this limitation only, in determining compensation the
rules of Section 414(q)(6) of the Code shall apply, except that in applying such
rules, the term "family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the Plan Year.
14.17 "Eligible Employee" means any Employee on a Covered Hourly
Payroll of one of the Companies, excluding Employees in cooperative studies and
intern programs, independent contractors reclassified as a result of an audit by
a government agency as common law employees and all individuals performing
services for the Companies who are paid through accounts payable, as
distinguished from the payroll system, and, effective January 1, 1987, a person
who is a Leased Employee. No Employee may be an Eligible Employee under this
Plan for any period during which the Employee is an Eligible Employee under the
Raytheon Savings and Investment Plan.
14.18 "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. This section shall be effective as of January 1, 1987.
14.19 "Employee Account" means that portion of Participant's Account
which is attributable to Elective Deferrals, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.20 "Employer" means Raytheon Company and any Affiliate thereof.
14.21 "Employment Commencement Date" is the date on which the Employee
first performs an Hour of Service with the Employer.
14.22 "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.
14.23 "Fidelity" means Fidelity Investments, the recordkeeper for
the Plan.
14.24 "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.
14.25 "Higher Paid Eligible Employee" means an individual described in
Section 414(q) of the Code, after giving effect to subsection (12) thereof, and
any regulation, notice or other guidance issued by the Internal Revenue Service
thereunder. The determination of whether an individual is a Higher Paid Eligible
Employee may be made by the Administrator on the basis of any elective provision
permitted under such regulation, notice or other guidance. In general, an
Employee will be considered a Higher Paid Eligible Employee if such individual:
(a) was a five percent owner as defined in Section 416(i)(1)(iii)
of the Code at any time during the current or preceding Plan Year;
(b) received compensation in excess of $50,000 during the current or
preceding Plan Year (adjusted annually for increases in the cost of living in
accordance with Section 415(d) of the Code); or
(c) was at any time an officer within the meaning of Section 416(i) of
the Code during the preceding Plan Year, and who received compensation in the
current or preceding Plan Year greater than 50 percent of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code for such Plan Year.
Notwithstanding the foregoing, no more than 50 or, if lesser, the greater of 3
employees or 10 percent of the Employees shall be treated as officers.
(d) An Employee who is not described in paragraph (b) or (c) above for
the preceding Plan Year shall not be treated as described in paragraph (b) or
(c) unless such Employee is one of the 100 Employees who receive the most
compensation from the Employer during the Plan Year.
(e) A former Employee shall be treated as a Higher Paid Eligible
Employee if such former Employee had a separation year prior to the Plan Year
and was a Higher Paid Eligible Employee for either (1) such Employee's
separation year or (2) any Plan Year ending on or after the Employee's 55th
birthday.
A separation year is the Plan Year in which the Employee
separates from service.
(f) Notwithstanding anything to the contrary in this Plan, Sections
414(b), (c), (m), (n), and (o) of the Code are applied prior to determining
whether an Employee is a High Paid Eligible Employee.
(g) "Non-Higher Paid Eligible Employee" shall mean an Employee who is
neither a Higher Paid Eligible Employee nor a family member (within the meaning
of Section 414(q)(6) of the Code).
(h) "Compensation" shall mean the Employee's wages which are required
to be reported on IRS Form W-2, increased by any Elective Deferrals made by the
Companies to the Plan on behalf of the Employee and any pre-tax elective
contributions made by the Companies which are excludible from the Employee's
income under Section 125 of the Code.
14.26 (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.
(iii) with a predecessor contractor under contracts covered by the
Service Contract Act, provided that the Employee is in a Period of Service with
such contractor on the day immediately preceding Employee's Employment
Commencement Date or Reemployment Commencement Date, as applicable.
(c) To the extent applicable, the rules set forth in 29 CFR ss.ss.
2530.200b-2(b) and (c) for computing an "Hour of Service" are incorporated
herein by reference.
14.27 "Layoff" means an involuntary interruption of service due to
reduction in the cost of living in accordance with Section of work force with or
without the possibility of recall to employment when conditions warrant.
14.28 "Leased Employee" means any person (other than an Employee) who,
pursuant to an agreement between the Employer and any other person, has
performed services for the Employer (or any related person as provided in
Section 414(n)(6) of the Code) on a substantially full time basis for a period
of at least one year and such services are of the type historically performed by
employees in the business field of the Employer. Leased Employees are not
eligible to participate in the Plan. Notwithstanding the foregoing, if such
"Leased Employees" constitute less than 20% of the nonhighly compensated
workforce of the Employer within the meaning of Section 414(n)(5)(C)(ii) of the
Code, the term "Employee" shall not include Leased Employees covered by a plan
described in Section 414(n)(5) of the Code. This section shall be effective as
of January 1, 1987.
14.29 "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.
14.30 "Matching Contribution" means contribution made to the Trust in
accordance with Section 3.7 hereof.
14.31 "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.
14.32 "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.
14.33 "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.
14.34 "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of determination
under this Plan.
14.35 "Normal Retirement Age" means the Participant's sixty-fifth
(65th) birthday.
14.36 "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.
14.37 "Pay Period" means a scheduled period for payment of wages or
salaries.
14.38 "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. For the purpose of determining a Period of
Participation, participation in the Raytheon Savings and Investment Plan and the
Raytheon Employee Savings and Investment Plan shall be considered as
participation in this Plan.
14.39 "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.
14.40 "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.
14.41 "Plan" means the Raytheon Savings and Investment Plan for
Specified Hourly Payroll Employees as amended from time to time.
14.42 "Plan Year" means a calendar year, or a portion thereof occurring
prior to the termination of the Plan.
14.43 "Qualified Non-Elective Contribution Account" means that portion
of a Participant's Account which is attributable to Qualified Non-Elective
Contributions received pursuant to Section 3.12, adjusted for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.44 "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.
14.45 "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.
14.46 "Retirement Act" means the Employee Retirement Income Security
Act of 1974, including any amendments thereto.
14.47 "Rollover Contribution Account" means that portion of a
Participant's Account which is attributable to rollover contributions received
pursuant to Section 3.10, adjustments for withdrawals and distributions, and the
earnings and losses attributable thereto.
14.48 "Salaried Payrolls" means the nonexempt salaried and the exempt
salaried payrolls which are processed in the United States.
14.49 "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.
14.49A "Severance from Service Date" means the earlier of:
(a) the date on which an Employee quits, retires, is discharged,
or dies; or
(b) except as provided in paragraphs (c) and (d) hereof, the first
anniversary of the first date of a period during which an Employee is absent for
any reason other than quit, retirement, discharge or death, provided that, on an
equitable and uniform basis, the Administrator may determine that, in the case
of a Layoff as the result of a permanent plant closing, the Administrator may
designate the date of Layoff or other appropriate date prior to the first
anniversary of the first date of absence as the Severance From Service Date; or
(c) in the case of an Authorized Military Leave of Absence from which
the Employee does not return prior to expiration of recall rights, "Severance
from Service Date" means the first day of absence because of the leave; or
(d) in the case of an absence due to Disability, "Severance from
Service Date" means the earlier of the first anniversary of the first day of
absence because of the Disability or the date of termination of the Disability;
or
(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; or
(f) in the case of an Employee who is absent from service beyond the
first anniversary of the first day of absence (i) by reason of the pregnancy of
the Employee, (ii) by reason of the birth of a child to the Employee, (iii) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by the Employee or (iv) for purposes of caring for such
child for a period beginning immediately following such birth or placement, the
Severance from Service Date shall be the second anniversary of the first day of
such absence. The period between the first and second anniversaries of the first
day of absence is neither a Period of Service nor a Period of Severance.
14.50 "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.
14.51 "Surviving Spouse" means a lawful spouse surviving the
Participant as of the date of Participant's death.
14.52 "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.
14.53 "Trustee" means the Trustee and any successor trustees under
the Trust Agreement.
14.54 "Trust Fund" means the cash, securities, and other property held
by the Trustee for the purposes of the Plan.
14.55 "Valuation Date" means each day the New York Stock Exchange is
open for business.
14.56 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>
APPENDIX A
EFFECTIVE DATES AND AGE REQUIREMENTS
FOR LOAN PROVISIONS
Unit Effective Date of Required Age for
Loan Provisions Loan Eligibility
Local 1327, United January 1, 1987 Less than age 59 1/2
Steelworkers of America
Local 1836, International January 1, 1987 Less than age 59 1/2
Association of Machinists 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 May 1, 1989 None
Police and Protection Employees,
Independent Watchmen's Association
Driver Sales & Warehouse Union May 1, 1990 None
No. 117
Local 284, International Brotherhood May 1, 1990 None
of Teamsters
EXHIBIT 4.5
RAYTHEON EMPLOYEE
SAVINGS AND INVESTMENT PLAN
Provisions in Effect as of January 1, 1997
ARTICLE I -- ADOPTION AND PURPOSE
The Plan was established effective July 1, 1987, as the Badger Savings
and Investment Plan 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 Badger Plan as determined by the
employee and set aside for short-term and long-term needs of the employee. The
Badger 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 Employee Savings and Investment
Plan. Thereafter, the Plan was renamed the Raytheon Employee Savings and
Investment Plan and 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. 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 2550.404(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.
The Plan as restated herein shall be effective as of June 1, 1994 or
such other dates as may be specifically provided herein or as otherwise required
by law for the Plan or the Raytheon Subsidiary Savings and Investment Plan,
which is merged into this Plan pursuant to Section 13.6, to satisfy the
requirements of Section 401(a) of the Code. The rights of former Employees whose
Severance from Service Date occurred prior to the date of any amendment shall be
governed by the terms of the Plan in effect on their Severance from Service Date
except as otherwise provided herein.
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 was 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 - 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 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
3.3(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. 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 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 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.
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 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 402(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 together with earnings thereon, 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 shall 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 ss.1.402(g)-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 in which the excess deferrals were made.
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.
3.2 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 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 Employee's wages
which are required to be reported on IRS Form W-2 for the calendar
which coincides with the 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 the Companies to the
Plan on behalf of the Eligible Employee and any pre-tax
elective contributions made by the Companies which are
excludible from the Eligible Employee's income under Section
125 of the Code.
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 3.2(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 Sections 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 Sections
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
Sections 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.
(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.
3.3 Reinstatement of Reduced Amounts -- Any reduction effected pursuant
to Section 3.2(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 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 3.4. The reduction described in Section 3.2(b) will not be
automatically reinstated.
3.4 Change in Elective Deferrals -- Except as provided in Sections 3.2
and 3.3, any Participant may change his or her Elective Deferral percentage by
notifying Fidelity, such changes to take effect as of the next administratively
feasible Pay Period.
3.5 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 the next administratively feasible Pay Period
subsequent to telephone notification to Fidelity.
3.6 Rollover Contributions and Transfers --
(a) 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;
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; 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");
or rollover contributions from the Raytheon Stock Ownership Plan by former
Participants in that plan who have incurred a Severance from Service. 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 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, or was a former participant in the Raytheon Stock Ownership
Plan and the entire amount of the rollover contribution is comprised of
the Participant's account in that plan, 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.
(b) Effective January 1, 1993, Participants may direct that
"eligible rollover distributions," as defined in Section 402(c) of the Code, be
transferred directly to the Plan. Rules similar to those applicable to "rollover
contributions" shall apply to amounts transferred directly to the Plan.
(c) Participants who are also covered under the Raytheon Stock
Ownership Plan and who are entitled to diversify their accounts under such plan,
may direct that the portion of their account which is eligible for
diversification under such plan be transferred to the Plan. Rules similar to
those applicable to "rollover contributions" shall apply to amounts transferred
to this Plan except that such transferred amounts shall not be eligible for
loans or withdrawals.
(d) Account balances, including loan balances, held in other
defined contribution plans sponsored by members of the Raytheon controlled group
of corporations by Participants in this Plan shall be transferred to this Plan
on the following conditions:
(i) the account balances, including loan balances, held
by Participants in the following six plans: (1) Raytheon Aerospace
Support Services, Inc. Union Salary Savings Plan; (2) Raytheon
Aerospace Support Services, Inc. Non-Union Salary Savings Plan; (3)
Raytheon Aerospace Support Services,
Inc. Columbus Air Force Base, Mississippi, Union Salary Savings Plan;
(4) Raytheon Aerospace Support Services, Inc. Columbus Air Force Base,
Mississippi, Non-Union Salary Savings Plan; (5) Raytheon
Aerospace Support Services, Inc. - U.S. Customs Union Salary Savings
Plan; (6) Raytheon Aerospace Support Services, Inc. - U.S. Customs Non
Union Salary Savings Plan will be transferred to this Plan on
August 1, 1996, or as soon thereafter as is administratively feasible;
(ii) the account balances held by Participants in the Raytheon
Support Services Company Money Accumulation Plan, except those
Participants who are employees of Raytheon Support Services Company
assigned to the Patrick Air Force Base Logistics Contract, will be
transferred to this Plan on January 1, 1997, or as soon thereafter as
is administratively feasible. Separate sub-accounts shall be
established for the transferred amounts and earnings thereon, all of
which are after-tax monies. Distribution of such sub-accounts shall be
made in the form of a lump sum except that Participants may elect to
receive the amount transferred (but not earnings thereon subsequent to
the transfer) in the form of an immediate annuity or in a combination
of lump sum and immediate annuity as selected by the Participant. The
insurer shall provide a description of the forms of immediate annuity
available under the group annuity contract for purposes of informing
Participants thereof. The forms of immediate annuity available under
the group annuity contract shall always include a qualified joint and
survivor annuity within the meaning of the Retirement Act as amended
from time to time. Any election of a form of annuity payment other than
a qualified joint and survivor annuity must be consented to in writing
by the Participant's spouse (which consent shall be notarized or
witnessed by a representative of the Plan). No method of payment
providing for a guaranteed number of monthly annuity payments may be
selected if such payments would extend beyond the actual life
expectancy of the Participant and his or her spouse, and further
provided that the value of any payment to a beneficiary shall be less
than fifty percent (50%) of the value of Participant's interest under
this Plan determined as of the commencement date of Participant's
annuity.
3.7 Refund of Contributions to the Companies -- Notwithstanding the
provisions of Article XII, if, or to the extent that, the Companies' deductions
for contributions made to the Plan are disallowed, the Companies will have the
right to obtain the return of any such contributions for a period of one year
from the date of disallowance. For this purpose, all Elective Deferrals are made
subject to the conditions that they are deductible under the Code for the
taxable year of the Companies for which the contribution is made. Furthermore,
any contribution made by the Companies on the basis of a mistake in fact may be
returned to the Companies within one year from the date such contribution was
made.
3.8 Non-Elective Contributions -- Specified Amounts -- Each of the
Companies may make contributions to the Plan on behalf of Employees in Covered
Units, provided that the name of the unit, the effective date of such
contributions and the specified amount is set forth on Appendix B hereto. Such
contributions and the contributions described in Section 3.9 shall be Qualified
Non-Elective Contributions as defined in Section 3.2(f)(iv) and shall be
included in determining the actual deferral percentage under Section 3.2. If the
contributions described in this Section 3.8 and in Section 3.9 are made on
behalf of an Employee who is not a Participant, an Account shall be established
for such Employee and the Employee shall have the right to elect investment
options under Section 4.1. If the Employee does not make a valid election in
which investment options are designated for 100% of the Participant's Account,
then 100% of Participant's Account shall be invested in Fund B, a fixed income
fund. The Employee may, in accordance with Sections 4.2 and 4.3, change the
investment allocation for future deferrals and transfer account balances between
investment funds.
3.9. Non-Elective Contributions -- Service Contract Act Reconciliation
Amounts -- Each of the Companies may make contributions to the Plan on behalf of
Employees in Covered Units consisting of the entire amount or any part of any
deficiency between health and welfare and/or pension contributions actually made
under a contract covered by the Service Contract Act and the amount of such
contribution or contributions required by a wage determination issued under the
contract. Such amount shall be calculated in accordance with the formula
specified in 29 CFR Section 4.175 as follows:
The total amount contributed for a month, calendar or contract quarter,
or other specified time is divided by the total hours worked under the
contract by service employees subject to the Act during the period in
question to determine an hourly contribution rate.
The difference between the contribution rate required in the determination and
the actual contribution may be contributed to the Plan on behalf of each
Employee for purposes of fulfilling the Employer's fringe benefit obligations
under the Service Contract Act.
3.10. Matching Contributions - Rust Constructors, Inc. -- Subject to
the limitations imposed by the Internal Revenue Code, Rust Constructors, Inc.
will match from its net annual profits or net profits the Elective Deferral of
each Participant who is employed in the non-union hourly paid unit at one of the
following locations: Amoco Chemical Company, Mt. Pleasant, SC; Dayco Products,
Springfield, MO; Hoechst Celanese Corporation, Salisbury, NC, at the rate of
100% of the Participant's Elective Deferral, provided that, (i) for any pay
period, the matching amount shall not exceed 4.5% percent of Participant's
Eligible Compensation for that pay period; (ii) as soon as administratively
feasible subsequent to the end of the Plan Year, the differential, if any, in
which the amount equal to 100% of the Participant's Elective Deferrals exceeds
the amount of Matching Contributions made for Participant for that year, to an
annual maximum of 4.5% of Participant's Eligible Compensation for the Plan Year,
will be paid into the Participant's Qualified Non-Elective Contribution Account;
and (iii) the Matching Contribution for Participants in the unit at Hoechst
Celanese Corporation will be in effect for the period from June 12, 1996 through
September 30, 1996, only.
3.11 Limitations on Matching Contributions.
(a) In no event may the Matching Contributions made on behalf
of all Higher Paid Eligible Employees, or forfeitures allocated to the Accounts
of such Employees, who have satisfied the eligibility requirements of Article II
with respect to any Plan Year result in an Actual Contribution 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
Contribution 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 Contribution 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 Contribution Percentage.
(b) The Administrator shall be authorized to implement rules
authorizing or requiring reductions in Matching Contributions that may be made
by Higher Paid Eligible Employees during the Plan Year (prior to any
contributions to the Trust Fund), so that the limitation of Section 3.11(a) is
satisfied.
(c) The Company may in its discretion make Qualified
Non-Elective Contributions to the accounts of certain Non-Higher Paid Eligible
Employees to the extent required to satisfy the limitations of Section 3.11(a).
(d) If the limitation under Section 3.11(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 Higher Paid Eligible Employees as soon as practicable after
the end of such Plan Year (or, if forfeitable under the terms of the Plan,
forfeited), but no later than the last day of the immediately following Plan
Year. The Excess Amounts distributed shall include both the Matching
Contributions 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(m) of the Code and shall include income or the Plan Year to
which the Excess Amounts relate.
(e) Elective Deferrals and Matching Contributions shall be
further limited to the extent required to prevent prohibited multiple use of the
alternative limitations described in Sections 401(k)(3)(A)(ii)(II) and 401
(m)(2)(A)(ii) of the Code and the provisions of Reg. Section 1.401(m)-2(b) and
any further guidance issued thereunder. If such multiple use occurs, the Actual
Contribution Percentage for all Higher Paid Eligible Employees (determined after
applying the foregoing provisions of this Section 3.11) shall be reduced in
accordance with Reg. Section 1.401(m)-2(c) and any further guidance issued
thereunder in order to prevent such multiple use of the alternative limitation.
(f) The Administrator may utilize any combination of the
methods described in Sections 3.11(b), (c) and (d) to assure that the
limitations of Sections 3.11(a) and (e) are satisfied.
(g) For purposes of this Section 3.11, the following
definitions and special rules shall apply:
(i) The term "Annual Earnings" shall have the meaning
specified in Sections 3.2(f)(i).
(ii) The term "Actual Contribution 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 Matching Contributions
paid to the Trust Fund for such Plan Year on behalf of the
Eligible Employee plus the amount of forfeitures allocated to
the Eligible Employee's Account, divided by
(B) The Eligible Employee's Annual Earnings,
including any Elective Deferrals made by the Companies to the
Plan on behalf of the Eligible Employee or any pre-tax
election contributions under a "cafeteria plan" (as defined in
Section 125 of the Code and applicable regulations) maintained
by the Companies for such Plan Year.
Matching Contributions and forfeitures 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, such
amounts are actually paid to the Trust no later than 12 months after
the Plan Year to which the contribution relates and such amounts are
contributed on account of Elective Deferrals for such Plan Year.
(iii) The term "Excess Amounts" shall mean with respect to
each Higher Paid Eligible Employee, the amount equal to the total
Matching Contributions made on behalf of the Eligible Employee together
with the forfeitures allocated to the Eligible Employee's Account
(determined prior to the application of the leveling procedure
described below) minus the product of the Eligible Employee's Actual
Contribution Percentage (determined after the leveling procedure
described below) multiplied by the amount specified in Section
3.11(g)(ii)(B) above. In accordance with the regulations issued under
Section 401(m) of the Code, Excess Amounts shall be determined by a
leveling procedure under which the Actual Contribution 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 3.11(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 Contribution Percentage to equal the Actual Contribution
Percentage of the Higher Paid Eligible Employee with the next highest
Actual Contribution Percentage. This leveling procedure shall be
repeated until the limitation of Section 3.11(a) is satisfied.
(iv) The term "Qualified Non-Elective Contributions" shall
have the meaning specified in Section 3.2(f)(iv).
(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 Matching Contributions and forfeitures under the two plans shall be
treated as made under a single plan, and if two or more of such plans
are permissibly aggregated for purposes of Section 401(m) 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 Contribution Percentage of a
Higher Paid Eligible Employee, all plans 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 Contribution Percentage for the family
group, which is treated as one Higher Paid Eligible Employee, is the
Actual Contribution 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 Contribution Percentages for all Employees.
(h) The limitations of this Section 3.11 shall apply to Plan Year
beginning on or after January 1, 1987.
(I) Notwithstanding anything in the Plan to the contrary, if the rate
of Matching Contributions, determined after application of the corrective
mechanisms described in Section 3.2, discriminates in favor of Higher Paid
Eligible Employees, any such amounts attributable to any Excess Amounts (as
described in Subsection 3.2(f)(iii)) of each affected Higher Paid Eligible
Employee shall be forfeited so that the rate of Matching Contribution is
nondiscriminatory. Any such forfeitures shall be made no later than the end of
the Plan Year following the Plan Year for which the Matching Contribution was
made and shall be used to reduce future Matching Contributions.
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 one percent (1%) 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;
Fund F - a growth fund, designated by the Administrator,
investing primarily in equities of companies of all types
and sizes;
Fund G - a growth fund, designated by the Administrator,
investing primarily in equities of well-known and
established companies.
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.
4.2 Change in Investment Allocation of Future Deferrals -Each
Participant may elect to change the investment allocation of future Elective
Deferrals and rollover contributions effective as of the first administratively
feasible Business Day subsequent to telephone notice to Fidelity. Any changes
must be made 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 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. In determining the amount of the
transfer, the Participant's Account shall be valued as of the close of business
on the Valuation Date on which telephone notice is received; provided, however,
that in any case where the telephone notice is received after 4:00 p.m. Eastern
Time (daylight or standard, whichever is in effect on the date of the call), the
Account shall be valued as of the close of business on the next Valuation Date.
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, E, F and G 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, E, F and G 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 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 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 and Qualified Non-Elective
Contribution Accounts -- 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 and
Qualified Non-Elective Contribution Account upon attainment
of age 59 1/2 or
(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, E, F and G 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) 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 6.1, "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 inss.152 of
the Code) of the Participant, or which are necessary for these
persons to obtain medical care described inSection 213(d) of
the Code; 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 of the
Code); to prevent the eviction from or foreclosure on the
Participant's principal residence; or any other
circumstance, as determined by the Administrator based upon
all the relevant facts, establishing substantial
justification for the withdrawal.
6.3 Suspension of Elective Deferrals for Financial Hardship
Withdrawals. If a Participant's application for a hardship withdrawal is
approved and the withdrawal effected, Participant's Elective Deferrals will be
suspended for a period of one year from the date of withdrawal. Thereafter,
Elective Deferrals shall be in the same amount and with the same investment
options as in effect prior to the withdrawal unless notice by telephone or in
writing giving other instructions is received by Fidelity prior to the
expiration of the one-year period from the withdrawal.
6.4 In-Service Withdrawal - Rollover Contribution Account -- A
Participant may withdraw all or a portion of the Participant's Rollover
Contribution Account. Withdrawals will be based upon the value of the account
as of the date established by the Administrator through the application of a
uniform and equitable rule by telephone notice to Fidelity. Withdrawals will be
based upon the value of the Account as determined under Section 6.8. 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 Employee, Rollover Contribution and
Qualified Non-Elective Contribution Accounts will be made upon the Retirement,
Disability (as defined in Section 14.14), death, Severance from Service (as
defined in Section 14.47) or Layoff (as defined in Section 14.27) 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 (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. Distributions will be based
upon the value of the Account as determined under Section 6.8. Distribution of
the amounts in said accounts in the funds designated in Funds A, B, D, E, F and
G 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.
(b) 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.
(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) A lump sum distribution of a Participant's Account 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 amounts are transferred to this Plan from another
plan qualified under Section 401(a) of the Code (other than
amounts described in Section 3.6(b)), any distribution or
withdrawal rights available to the Participant under such
other plan which are protected under Section 411(d)(6) of the
Code shall be available to the Participant under this Plan.
6.7 Direct Rollovers -- Effective January 1, 1993, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. For purposes
of this paragraph, the following terms shall have the following meanings:
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's beneficiary, or for a specified period
of 10 years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income.
(b) Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code or a qualified trust
described in Section 401(a) of the Code that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, the term is limited to an individual retirement account
or individual retirement annuity.
(c) Distributee: A distributee includes a Participant or
former Participant. In addition, the Participant's or former Participant's
surviving spouse and the Participant's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(d) Direct Rollover: A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the distributee.
6.8 Determination of Amount of Withdrawal or Distribution. In
determining the amount of any withdrawal or distribution hereunder, the
Participant's Account shall be valued as of the close of business on the
Valuation Date on which telephone notice is received; provided, however, that in
any case where the telephone notice is received after 4:00 p.m. Eastern Time
(daylight or standard, whichever is in effect on the date of the call), the
Account shall be valued as of the close of business on the next Valuation Date.
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. Participants who have incurred a Severance from
Service will not be eligible for a Plan loan.
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 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 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 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.
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 at any
time during the period July 1 through December 31 thereafter; the rate published
on the first business day of December will apply to loans which are effective at
any time during the period January 1 through June 30 thereafter.
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 Severance from Service of a Participant,
the Participant will be given the option of continuing to repay the outstanding
loan. In any case where payments on the outstanding loan are not made within 90
days of the Participant's Severance from Service Date, the amount of any unpaid
principal will be deducted from the Participant's Account and reported as a
distribution. 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
with the Employer, the Participant's Severance from Service Date, or the
expiration of twelve (12) months from the date of the suspension. In the event
the Participant does not return to active employment with the Employer, the
Participant will be given the option of continuing to repay the outstanding
loan. If the Participant fails to resume payments on the loan, the outstanding
loan will be reported as a taxable distribution. In no event, however, shall the
loan be deducted from the Participant's Account earlier than the date on which
the Participant (i) incurs a Severance from Service or (ii) attains age 59-1/2.
ARTICLE VIII - LIMITATIONS OF SECTION 415 OF THE CODE
8.1 Maximum Permissible Amount of a Participant's Annual Addition --
The total for any Limitation Year of the annual additions to a Participant's
Account under this Plan when added to the annual additions to a Participant's
account under any qualified defined contribution plan maintained by the Employer
shall not exceed the lesser of (i) twenty-five percent (25%) of total
compensation from the Employer, and (ii) $30,000 or, if greater, one-fourth of
the defined benefit dollar limitation set forth in Section 415(b)(1) of the Code
as in effect for the Limitation Year.
For purposes of this Section 8.1, the term "annual addition" shall
mean, with respect to any Limitation Year, Elective Deferrals and Qualified
Nonelective Contributions, if any, to this Plan, plus the sum of the following
amounts allocable for such Plan Year to the Participant's accounts in all other
qualified plans maintained by the Employer in which he participates: (1)
employer contributions (including pre-tax contributions), (2) forfeitures which
have been reallocated to the Participant's account, (3) Participant after-tax
contributions; and (4) amounts described in Sections 415(l)(1) and 419A(d)(2) of
the Code.
For purposes of this Section 8.1, the term "compensation" shall mean
all amounts paid to an Employee for personal services actually rendered to the
Companies and Affiliates, including, but not limited to, wages, salary,
commissions, bonuses, overtime and other premium pay as specified in Reg.
ss.1.415-2(d)(2), but excluding deferred compensation, stock options, and other
distributions which receive special tax treatment as specified in Reg.
ss.1.415-2(d)(3).
8.2 Reduction of Annual Additions -- In the event it is determined that
the annual additions to a Participant's accounts under this Plan or any other
qualified defined contribution plan maintained by the Employer for any
limitation year would be in excess of the limitations of Section 8.1, such
annual additions shall be reduced to the extent necessary to bring them within
such limitations. If, as a result of a reasonable error in estimating a
Participant's Eligible Compensation, a reasonable error in determining the
amount of Elective Deferrals that may be made with respect to any Participant,
or under other limited facts and circumstances which the Internal Revenue
Service finds justify the availability of the remedies contained herein, the
Administrator, in coordination with the administrator of any other defined
contribution plan maintained by the Employer, shall reduce the annual additions
which have been made to a Participant's accounts to the acceptable limit by the
following procedures, or a pro rata basis, in the following order:
(a) by returning to the Participant any voluntary or mandatory
Employee contributions made to the Raytheon Support Services Company Money
Accumulation Plan or any other defined contribution plan maintained by the
Employer;
(b) to the extent the limitation is still exceeded, Elective
Deferrals to this Plan, or other defined contribution plan qualified under
Section 401(k) of the Code maintained by the Employer during such Limitation
Year, shall be distributed to the Participant; and
(c) to the extent such limitation is still exceeded, any
Qualified Non-Elective Contribution to Participant's account in this Plan or
other defined contribution plan, or other defined contribution plan qualified
under Section 401(k) of the Code maintained by the Employer during such
LImitation Year, shall be reduced to the extent necessary to reduce annual
additions to the acceptable limit;
(d) to the extent the limitation is still exceeded, any
Matching Employer Contributions to this Plan, or other defined contribution plan
qualified under Section 401(k) of the Code maintained by the Employer during
such Limitation Year, shall be reduced to the extent necessary to decrease
Participant's annual additions to the acceptable limit;
(e) to the extent the limitation is still exceeded, excess
annual additions in the Participant's Account in the Raytheon Stock Ownership
Plan (RAYSOP) shall be used to reduce allocations for the next Limitation Year
(and succeeding Limitation Years, as necessary) for that Participant if the
Participant is covered by the plan at the end of such Limitation Year. In the
event the Participant is not covered by such plan at the end of the Limitation
Year, any excess annual additions which remain must, as provided in Reg.
ss.1.415-6(b)(6)(ii), be held unallocated in a suspense account for the
Limitation Year and reallocated in the next Limitation Year to all of the
remaining Participants in proportion to their RAYSOP allocation in such Plan
Year.
8.3 Coordination with Limitation on Benefit from All Plans --
Notwithstanding any other provisions in this Plan to the contrary, in the case
of a Participant who also participates in any qualified defined benefit plan
which is maintained by the Employer (whether or not terminated), the sum of the
defined benefit plan fraction and the defined contribution plan fraction may not
exceed 1.0 for any Limitation Year. The defined benefit plan fraction for any
Limitation Year is a fraction, the numerator of which is the projected annual
benefit of the Participant under the plan (determined as of the close of the
Limitation Year); and the denominator of which is the lesser of (i) the product
of 1.25, multiplied by the dollar limitation applicable to defined benefit
plans, in effect under applicable law for such Limitation Year; or (ii) the
product of 1.4 multiplied by one hundred percent (100%) of the Participant's
average compensation for the three consecutive calendar years during which he
had the highest aggregate compensation from the Employer. The defined
contribution plan fraction for any Limitation Year is a fraction, the numerator
of which is the sum of the annual additions (as defined in Section 8.1) to the
Participant's Accounts as of the close of the Limitation Year; and the
denominator of which is the sum of the lesser of the following amounts
determined for the current Limitation Year and each prior Limitation Year: (i)
the product of 1.25 multiplied by the dollar limitation applicable to defined
contribution plans, in effect under applicable law for the Limitation Year; or
(ii) the product of 1.4 multiplied by 25% of such Participant's total
compensation for the Limitation Year. In the event that the limitation set forth
above is exceeded, adjustments shall be made in the defined benefit plan.
8.4 Effective Date -- This Article VIII shall be effective for
Limitation Years beginning on or after January 1, 1987.
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 Ratio
is a fraction, the numerator of which is the sum of the present value
of accrued benefits of all Key Employees as of the determination date
(including any part of any accrued benefit distributed in the five-year
period ending on the determination date), and the denominator of which
is the sum of all accrued benefits (including any part of any accrued
benefit distributed in the five-year period ending on the determination
date) of all Participants as of the determination date.
(ii) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and
the Employer maintains or has maintained one or more defined benefit
plans which have covered or could cover a Participant in this Plan, the
Top-Heavy Ratio is a fraction, the numerator of which is the sum of
account balances under the defined contribution plans for all Key
Employees and the present value of accrued benefits under the defined
benefit plans for all Key Employees, and the denominator of which is
the sum of the account balances under the defined contribution plans
for all Participants and the present value of accrued benefits under
the defined benefit plans for all Participants. Both the numerator and
denominator of the Top-Heavy Ratio are adjusted for any distribution of
an account balance or an accrued benefit made in the five-year period
ending on the determination date and any contribution due but unpaid as
of the determination date.
(iii) For purposes of (i) and (ii) above, the value of account
balances and the present value of accrued benefits will be determined
as of the most recent valuation date that falls within or ends with the
12-month period ending on the determination date. The account balances
and accrued benefits of a Participant who is not a Key Employee but who
was a Key Employee in a prior year will be disregarded. The calculation
of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations thereunder.
Deductible Employee contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same calendar
year. The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans maintained
by the Employer, or (b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Section 411(b)(1)(C) of the Code.
(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. The Plan shall be top heavy for any Plan Year beginning after
December 2, 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, $150,000 for Plan Years beginning on
or after January 1, 1994) allocated to any Key Employee for the Plan Year under
this Plan and all other defined contribution plans in the same required
aggregation group. This clause (b) shall not apply to any plan required to be
included in an aggregation group if such plan enables a defined benefit plan
required to be included in such group to meet the requirements of Section
401(a)(4) or Section 410 of the Code.
This paragraph shall not apply to a Participant covered under a
qualified defined benefit plan maintained by the Employer if the Participant's
vested benefit thereunder satisfies the requirements of Section 416(c) of the
Code. Notwithstanding any other language herein, a Non-Key Eligible Employee may
not fail to receive a defined contribution minimum allocation because either (1)
said Eligible Employee was excluded from participation (or accrues no benefit)
merely because the Employee's compensation is less than the stated amount, or
(2) the Employee is excluded from participation (or accrues no benefit) merely
because of a failure to make Elective Deferrals.
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 accordance with
Sections 4.2 and 4.3.
10.3 Expenses -- Expenses of the Plan and Trust shall be paid from
the Trust.
ARTICLE XI - ADMINISTRATION OF THE PLAN
11.1 General Administration -- The general administration of the Plan
shall be the responsibility of Raytheon Company (or any successor thereto) which
shall be the Administrator and Named Fiduciary for purposes of the Retirement
Act. The Company shall have the authority, in its sole discretion, to construe
the terms of the Plan and to make determinations as to eligibility for benefits
and as to other issues within the "Responsibilities of the Administrator"
described in Article XI, Section 11.2. All such determinations of the Company
shall be conclusive and binding on all persons.
11.2 Responsibilities of the Administrator -- The Administrator shall
assign responsibility for performance of all necessary administrative duties,
including the following:
(a) Determination of all questions which may arise under the
Plan with respect to eligibility for participation and administration of
accounts, including without limitation questions with respect to membership,
vesting, loans, withdrawals, accounting, status of accounts, stock ownership and
voting rights, and any other issue requiring interpretation or application of
the Plan.
(b) Reference of appropriate issues to the Offices of the
Executive Vice President - Chief Financial Officer, and the Vice President -
Human Resources, of Raytheon Company, respectively, for advice and counsel.
(c) Establishment of procedures required by the Plan, such as
notification to Employees as to joining the Plan, selecting and changing
investment options, suspending deferrals, exercising voting rights in stock,
withdrawing and borrowing account balances, designation of beneficiaries,
election of method of distribution, and any other matters requiring a uniform
procedure.
(d) Submission of necessary amendments to supplement
omissions from the Plan or reconcile any inconsistency therein.
(e) Filing appropriate reports with the Government as
required by law.
(f) Appointment of a Trustee or Trustees and investment
managers.
(g) Review at appropriate intervals of the performance of
the Trustee and such investment managers as may have been designated.
(h) Appointment of such additional Fiduciaries as deemed
necessary for the effective administration of the Plan, such appointments to be
by written instrument.
11.3 Liability for Acts of Other Fiduciaries -- Each Fiduciary shall be
responsible only for the duties allocated or delegated to said Fiduciary, and
other Fiduciaries shall not be liable for any breach of fiduciary responsibility
with respect to any act or omission of any other Fiduciary unless:
(a) The Fiduciary knowingly participates in or knowingly
attempts to conceal the act or omission of such other Fiduciary and knows that
such act or omission constitutes a breach of fiduciary responsibility by the
other Fiduciary;
(b) The Fiduciary has knowledge of a breach of fiduciary
responsibility by the other Fiduciary and has not made reasonable efforts under
the circumstances to remedy the breach; or
(c) The Fiduciary's own breach of his specific fiduciary
responsibilities has enabled another Fiduciary to commit a breach. No Fiduciary
shall be liable for any acts or omissions which occur prior to his assumption of
Fiduciary status or after his termination from such status.
11.4 Employment by Fiduciaries -- Any Fiduciary hereunder may employ,
with the written approval of the Administrator, one or more persons to render
service with regard to any responsibility which has been assigned to such
Fiduciary under the terms of the Plan including legal, tax, or investment
counsel and may delegate to one or more persons any administrative duties
(clerical or otherwise) hereunder.
11.5 Recordkeeping -- The Administrator shall keep or cause to be kept
any necessary data required for determining the account status of each
Participant. In compiling such information, the Administrator may rely upon its
employment records, including representations made by the Participant in the
employment application and subsequent documents submitted by the Participant to
the Employer. The Trustee shall be entitled to rely upon such information when
furnished by the Administrator or its delegate. Each Employee shall be required
to furnish the Administrator upon request and in such form as prescribed by the
Administrator, such personal information, affidavits and authorizations to
obtain information as the Administrator may deem appropriate for the proper
administration of the Plan, including but not limited to proof of the Employee's
date of birth and the date of birth of any person designated by a Participant as
a Beneficiary.
11.6 Claims Review Procedure -- The Administrator shall make all
determinations as to the right of any person to Accounts under the Plan. Any
such determination by the Administrator shall be made pursuant to the following
procedure:
Step 1. Claims with respect to an Account should be filed by a claimant
as soon as practicable after claimant knows or should know that a dispute has
arisen with respect to an Account, but at least thirty (30) days prior to the
claimant's actual retirement date or, if applicable, within sixty (60) days
after the death, Disability or Severance from Service of the Participant whose
Account is at issue, by mailing a copy of the claim to the Benefits and Services
Department, Raytheon Company, 141 Spring Street, Lexington, Massachusetts 02173.
Step 2. In the event that a claim with respect to an Account is wholly
or partially denied by the Administrator, the Administrator shall, within ninety
(90) days following receipt of the claim, so advise the claimant in writing
setting forth: the specific reason or reasons for the denial; specific reference
to pertinent Plan provisions on which the denial is based; a description of any
additional material or information necessary for the claimant to perfect the
claim; an explanation as to why such material or information is necessary; and
an explanation of the Plan's claim review procedure.
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.
The Administrator is the fiduciary to whom the Plan grants full
discretion, with the advice of counsel, to interpret the Plan; to determine
whether a claimant is eligible for benefits; to decide the amount, form and
timing of benefits; and to resolve any other matter under the Plan which is
raised by a claimant or identified by the Administrator. All questions arising
from or in connection with the provisions of the Plan and its administration,
not herein provided to be determined by the Board of Directors, shall be
determined by the Administrator, and any determination so made shall be
conclusive and binding upon all persons affected thereby.
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 -- Each of the Companies reserves
the right at any time or times, by action of the Chairman, the President, the
Treasurer or the Vice President, Human Resources of the 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,
no amendment to the Plan shall be made which shall:
(a) deprive any Participant of amounts allocated to his
Account prior to the date of the amendment;
(b) except as provided in Section 3.8, make it possible for
any part of the corpus or income of the Trust Fund to be used for or diverted to
purposes other than the exclusive benefit of the Participants or their
beneficiaries prior to the satisfaction of all liabilities with respect to such
Participant or their Beneficiaries;
(c) modify the vesting schedule and deprive a Participant of
his Nonforfeitable rights to amounts allocated to his account prior to the date
of the amendment. Further, if the vesting schedule of the Plan is amended, or
the Plan is amended to directly or indirectly affect a Nonforfeitable percentage
of a Participant's Account, each Participant with a Period of Service of at
least three years may elect, within a reasonable period after the adoption of
the amendment to have his nonforfeitable percentage computed under the Plan
without regard to such amendment. The period during which the election may be
made shall commence with the date the amendment is adopted or the change made
and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective, or
(iii) 60 days after the Participant is issued written
notice of the amendment;
(d) increase the duties of liabilities of the Trustee without
its consent. Notwithstanding the foregoing provisions of this Section or any
other provisions of this Plan, any modification or amendment of the Plan may be
made retroactively if necessary or appropriate to conform the Plan with, or to
satisfy the conditions of, the Retirement Act, the Code, or any other law,
governmental regulation or ruling.
Any termination, modification or amendment of the Plan shall be subject
to approval by the Board of Directors of the Company.
12.2 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.
12.3 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, subject to the requirements of
Section 401(k)(10) of the Code and Reg. ss. 1.401(k)-1(d)(3), be entitled to
receive any amounts then credited to his or her Account in the Trust Fund. The
Trustee may make payments in cash or, to the extent permitted by Section 6.6, in
stock.
ARTICLE XIII - ADDITIONAL PROVISIONS
13.1 Effect of Merger, Consolidation or Transfer -- In the event of any
merger or consolidation with or transfer of assets or liabilities to any other
plan or to this Plan, each Participant of the Plan shall be entitled to a
benefit immediately after the merger, consolidation or transfer, which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had been
terminated).
13.2 Necessity of Initial Qualification -- This Plan is established
with the intent that it shall qualify under Sections 401(a) and 401(k) of the
Code as that section exists at the time the Plan is established. If the Internal
Revenue Service determines that the Plan initially fails to meet those
requirements, then within thirty (30) days after the date of such determination
all of the vested assets of the Trust Fund held for the benefit of Participants
and their beneficiaries shall be distributed equitably among the contributors to
the Plan in proportion to their contributions, and the Plan shall be considered
to be rescinded and of no force or effect, unless such inadequacy is removed by
a retroactive amendment pursuant to the Code.
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. Notwithstanding the foregoing,
the Administrator is authorized to comply with a domestic relations order
determined by it to be a qualified domestic relations order as defined in
Section 414(p) of the Code. A distribution may be made to an alternate payee
under a qualified domestic relations order in the form of a lump sum payment at
the time specified in such order, regardless of any restrictions on the
commencement of the distribution that then may apply to the Participant to whom
the order relates.
13.4 Limitation of Rights of Employees -- This Plan is strictly a
voluntary undertaking on the part of the Companies and shall not be deemed to
constitute a contract between any of the Companies and any Employee, or to be a
consideration for, or an inducement to, or a condition of the employment of any
Employee. Nothing contained in the Plan shall be deemed to give any Employee the
right to be retained in the service of any of the Companies or shall interfere
with the right of any of the Companies to discharge or otherwise terminate the
employment of any Employee of the respective company at any time. No Employee
shall be entitled to any right or claim hereunder except to the extent such
right is specifically fixed under the terms of the Plan.
13.5 Construction -- The Plan shall be construed, regulated, and
administered under the laws of the Commonwealth of Massachusetts, except to the
extent that the Retirement Act otherwise requires. In the event that any
provision of this Plan is inconsistent with any provision in the Retirement Act,
the provision in the Retirement Act shall be deemed to be controlling.
13.6 Merger of Raytheon Subsidiary Savings and Investment Plan --
Effective as of December 31, 1994, or such earlier date as is determined to be
administratively feasible (the "Merger Date"), the Raytheon Subsidiary Savings
and Investment Plan shall be merged into this Plan. All assets held pursuant to
the Raytheon Subsidiary Savings and Investment Plan shall be transferred to the
Trustee, such transfer to be effective as of the Merger Date. Amounts held in
the various investment accounts under the Raytheon Subsidiary Savings and
Investment Plan and Trust shall be transferred to the investment accounts under
the Trust in accordance with procedures established by the Administrator. Upon
such transfer, the assets of the Raytheon Subsidiary Savings and Investment Plan
shall become assets of this Plan for all purposes hereunder, effective as of the
Merger Date, and this Plan shall assume all the liabilities of the Raytheon
Subsidiary Savings and Investment Plan, and benefits shall thereafter be
allocated and paid pursuant to the provisions of this Plan. All participants in
the Raytheon Subsidiary Savings and Investment Plan shall remain fully vested in
their accounts which are transferred to this Plan. All withdrawal and
distribution options under the Raytheon Subsidiary Savings and Investment Plan
shall be made available under this Plan with respect to the transferred accounts
to the extent required by Section 411(d)(6) of the Code. Any amendments to this
Plan which are effective prior to January 1, 1994 shall be considered as
amendments to the Raytheon Subsidiary Savings and Investment Plan as well.
13.7 Transfer of Assets to Raytheon Savings and Investment Plan for
Specified Hourly Payroll Employees -- Effective as of December 5, 1994, the
account balances of those Participants who are employed by Amana Refrigeration,
Inc. in the unit represented by Local 2385, International Association of
Machinists and Aerospace Workers, at Amana's plant in Fayetteville, Tennessee
(the "Transferred Accounts") shall be transferred to the Raytheon Savings and
Investment Plan for Specified Hourly Payroll Employees. Plan assets equal to the
Transferred Accounts shall be transferred to the trustee under the Raytheon
Savings and Investment Plan for Specified Hourly Payroll Employees, such
transfer to be effective as of December 5, 1994. Upon such transfer, this Plan
shall cease to have any liability for payment of benefits equal to the
Transferred Accounts.
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, where applicable, a Rollover
Contribution Account, a Matching Contribution Account and a Qualified
Non-Elective Contribution Account.
14.2 "Administrator" means Raytheon Company.
14.3 "Affiliate" means a trade or business which together with any of
the Companies is a member of (i) a controlled group of corporations within the
meaning of Section 414(b) of the Code; (ii) a group of trades or businesses
(whether or not incorporated) under common control as defined in Section 414(c)
of the Code, or (iii) an affiliated service group as defined in Section 414(m)
of the Code, or which is an entity otherwise required to be aggregated with the
Companies pursuant to Section 414(o) of the Code. For purposes of Article VIII,
the determination of controlled groups of corporations and trades or businesses
under common control shall be made after taking into account the modification
required under Section 415(h) of the Code. This section shall be effective as of
January 1, 1987.
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 the person designated by the Participant to
receive the value of his Account in the event of his death; provided, however,
that if a Participant with a spouse designates a Beneficiary other than his
spouse, said designation shall not take effect unless the spouse consents in
writing to such designation and said spousal consent acknowledges the effect of
said designation and is witnessed by a representative of the Plan or a notary
public. Said spousal consent shall be effective only with respect to the spouse
granting such consent, and shall not be required if the Participant can
establish that there is no spouse, that the spouse cannot be located, or that
other conditions exist as may be prescribed by regulations issued by the
Secretary of the Treasury. If there is no Beneficiary designated by the
Participant or surviving at the death of the Participant, payment of his Account
shall be made in accordance with Section 6.6(a). Subject to the foregoing, a
Participant may designate a new beneficiary at any time by filing with the
Administrator a written request for such change on a form prescribed by the
Administrator. Such change shall become effective only upon receipt of the form
by the Administrator, but upon such receipt of the change shall relate back to
and take effect as of the date the Participant signed such request, whether or
not the Participant is living at the time of such receipt, provided, however,
that neither the Trustee nor the Administrator shall be liable by reason of any
payment of the Participant's Account made before receipt of such form.
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 "Code" means the Internal Revenue Code of 1986, as amended.
14.10 "Company" means Raytheon Company.
14.11 "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.
14.12 "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.
14.13 "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.
14.14 "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.
14.15 "Elective Deferral" means a voluntary reduction of Participant's
compensation in accordance with a written direction to the Administrator.
14.16 "Eligible Compensation" means the base pay (including vacation
and sick pay and pay for unused vacation and sick leave), supervisory
differentials, shift premiums and sales commissions paid to a Participant by the
Employer, excluding all other earnings from any source. For participants in the
Raytheon Constructors, Inc. unit at Dayco (Springfield, Missouri) only, Eligible
Compensation means all remuneration subject to federal income tax withholding
paid to an employee in each Plan Year and, in addition, deferrals under a plan
described in Section 401(k) of the Code and pre-tax contributions pursuant to
Section 125 of the Code. Effective for Plan Years beginning on or after January
1, 1989 and prior to December 31, 1993, in no event shall the amount of Eligible
Compensation taken into account under the Plan for any Plan Year exceed $200,000
(or such larger amount as the Secretary of the Treasury may determine for such
Plan Year under Section 401(a)(17) of the Code). Effective for Plan Years
beginning on or after January 1, 1994, in no event shall the amount of Eligible
Compensation taken into account under the Plan for any Plan Year exceed $150,000
(or such larger amount as the Secretary of the Treasury may determine for such
Plan Year under Section 401(a)(17) of the Code). For purposes of this limitation
only, in determining compensation the rules of Section 414(q)(6) of the Code
shall apply, except that in applying such rules, the term "family" shall include
only the spouse of the Participant and any lineal descendants of the Participant
who have not attained age 19 before the close of the Plan Year.
14.17 "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, independent contractors
reclassified as a result of an audit by a government agency as common law
employees and all individuals performing services for the Companies who are paid
through accounts payable, as distinguished from the payroll system, and,
effective January 1, 1987, a person who is a Leased Employee.
14.18 "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. This section shall be effective as of January 1, 1987.
14.19 "Employee Account" means that portion of Participant's Account
which is attributable to Elective Deferrals, adjustments for withdrawals and
distributions, and the earnings and losses attributable thereto.
14.20 "Employer" means Raytheon Company and any Affiliates thereof.
14.21 "Employment Commencement Date" is the date on which the Employee
first performs an Hour of Service with the Employer.
14.22 "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.
14.23 "Fidelity" means Fidelity Investments, the recordkeeper for
the Plan.
14.24 "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.
14.25 "Higher Paid Eligible Employee" means an individual described in
Section 414(q) of the Code, after giving effect to subsection (12) thereof, and
any regulation, notice or other guidance issued by the Internal Revenue Service
thereunder. The determination of whether an individual is a Higher Paid Eligible
Employee may be made by the Administrator on the basis of any elective provision
permitted under such regulation, notice or other guidance. In general, an
Employee will be considered a Higher Paid Eligible Employee if such individual:
(a) was a five percent owner as defined in Section
416(i)(1)(iii) of the Code at any time during the current or preceding
Plan Year;
(b) received compensation in excess of $50,000 during the
current or preceding Plan Year (adjusted annually for increases in the cost of
living in accordance with Section 415(d) of the Code); or
(c) was at any time an officer within the meaning of Section
416(i) of the Code during the preceding Plan Year, and who received compensation
in the current or preceding Plan Year greater than 50 percent of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code for such Plan Year.
Notwithstanding the foregoing, no more than 50 or, if lesser, the greater of 3
employees or 10 percent of the Employees shall be treated as officers.
(d) An Employee who is not described in paragraph (b) or (c)
above for the preceding Plan Year shall not be treated as described in paragraph
(b) or (c) unless such Employee is one of the 100 Employees who receive the most
compensation from the Employer during the Plan Year.
(e) A former Employee shall be treated as a Higher Paid
Eligible Employee if such former Employee had a separation year prior to the
Plan Year and was a Higher Paid Eligible Employee for either (1) such Employee's
separation year or (2) any Plan Year ending on or after the Employee's 55th
birthday.
A separation year is the Plan Year in which the Employee
separates from service.
(f) Notwithstanding anything to the contrary in this Plan,
Sections 414(b), (c), (m), (n), and (o) of the Code are applied prior to
determining whether an Employee is a High Paid Eligible Employee.
(g) "Non-Higher Paid Eligible Employee" shall mean an Employee
who is neither a Higher Paid Eligible Employee nor a family member (within the
meaning of Section 414(q)(6) of the Code).
(h) "Compensation" shall mean the Employee's wages which are
required to be reported on IRS Form W-2, increased by any Elective Deferrals
made by the Companies to the Plan on behalf of the Employee and any pre-tax
elective contributions made by the Companies which are excludible from the
Employee's income under Section 125 of the Code.
14.26 "Hour of Service" --
(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) "Hour of Service" shall include an Hour of Service for
which the Employee is entitled to credit under subsection (a) hereof as a result
of employment with a predecessor contractor under the Service Contract Act,
provided that the Employee is in a Period of Service with such contractor on the
day immediately preceding the Employee's Employment Commencement Date or
Reemployment Commencement Date, as applicable.
(d) To the extent applicable, the rules set forth in 29 CFR
Sections 2530.200b-2(b) and (c) for computing an "Hour of Service" are
incorporated herein by reference.
14.27 "Layoff" means an involuntary interruption of service due to
reduction of work force with the possibility of recall to employment when
conditions warrant.
14.28 "Leased Employee" means any person (other than an Employee) who,
pursuant to an agreement between the Employer and any other person, has
performed services for the Employer (or any related person as provided in
Section 414(n)(6) of the Code) on a substantially full time basis for a period
of at least one year and such services are of the type historically performed by
employees in the business field of the Employer. Leased Employees are not
eligible to participate in the Plan. Notwithstanding the foregoing, if such
"Leased Employees" constitute less than 20% of the nonhighly compensated
workforce of the Employer within the meaning of Section 414(n)(5)(C)(ii) of the
Code, the term "Employee" shall not include Leased Employees covered by a plan
described in Section 414(n)(5) of the Code. This section shall be effective
January 1, 1987.
14.29 "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.
14.30 "Matching Contribution Account" means that portion of a
Participant's Account which is attributable to matching contributions pursuant
to Section 3.10 hereof, adjustments for withdrawals and distributions, and the
earnings and losses attributable thereto (At the discretion of the
Administrator, the Matching Contribution Account may be combined with the
Qualified Non-Elective Contribution Account).
14.31 "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of determination
under this Plan.
14.32 "Normal Retirement Age" means the Participant's sixty-fifth
(65th) birthday.
14.33 "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.
14.34 "Pay Period" means a scheduled period for payment of wages or
salaries.
14.35 "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. For the purpse of determining a Period of Participation,
participation in the Raytheon Savings and Investment Plan and the Raytheon
Savings and Investment Plan for Specified Hourly Payroll Employees shall be
considered as participation in this Plan.
14.36 "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 Service
Date.
14.37 "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.
14.38 "Plan" means the Raytheon Employee Savings and Investment Plan as
amended from time to time.
14.39 "Plan Year" means a calendar year, or a portion thereof occurring
prior to the termination of the Plan.
14.40 "Qualified Non-Elective Contribution Account" means that portion
of a Participant's Account which is attributable to qualified non-elective
contributions received pursuant to Sections 3.8 and 3.9, adjustments for
withdrawals and distributions, and the earnings and losses attributable thereto.
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 2.5 in determining whether a Participant has completed
the required Period of Service for eligibility to participate in the Plan.
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 3.6, 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,
or, if designated by the Administrator pursuant to subsection 14.40(b) below,
layoff as the result of a permanent plant closing.
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), (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; or
(f) in the case of an Employee who is absent from service
beyond the first anniversary of the first day of absence (i) by reason of the
pregnancy of the Employee, (ii) by reason of the birth of a child to the
Employee, (iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee or (iv) for purposes
of caring for such child for a period beginning immediately following such birth
or placement, the Severance from Service Date shall be the second anniversary of
the first day of such absence. The period between the first and second
anniversaries of the first day of absence is neither a Period of Service nor a
Period of Severance.
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 each day on which Fidelity is open for
general business.
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>
APPENDIX A
COVERED UNITS
Date on Which Employees
Name are Eligible to Participate
Raytheon Support Services Company
Salaried Employees at Portsmouth,
RI and Norfolk, VA (SCCS-ISS/ISE) November 1, 1993
Raytheon Support Services Company
All Other Salaried Employees,
except those at Portsmouth, RI
and Norfolk, VA (SCCS-ISS/ISE) January 1, 1994
Raytheon Support Services Company
Hourly Employees in Units Represented by:
Transport Workers Union, Local 25
(Patrick Air Force Base, FL)
Teamsters Local Union No. 769
(Patrick Air Force Base, FL)
International Association of Machinists
and Aerospace Workers, Local Lodge 276
(Robins Air Force Base, GA)
International Brotherhood of Electrical
Workers, Local 898 (El Dorado, TX) June 1, 1994
Cedarapids, Inc.
Hourly Employees in Unit Represented by
International Association of Machinists
and Aerospace Workers, Local 831
(Cedar Rapids, IA) January 1, 1994
Amana Refrigeration Inc.
Hourly Employees in Unit Represented by
International Brotherhood of Teamsters,
Local 284 (Delaware, OH) January 1, 1994
Hourly Employees in Unit Represented by
International Association of Machinists,
and Aerospace Workers, Local 169
(Fayetteville, TN) February 1, 1994
Range Systems Engineering Support Company
Salaried Payroll Employees October 1, 1993
Raytheon Services Nevada Company
Hourly Employees in Unit Represented by
International Union of Operating
Engineers, Local 12 (Las Vegas, NV) February 1, 1994
Raytheon Support Services Company
Hourly Employees in Units Represented
by:
International Brotherhood of Electrical
Workers (Beale AFB, CA, and Otis AFB,
MA) October 1, 1995
Raytheon Support Services Company
Employees in the Unit Represented by
International Brotherhood of Teamsters,
Local 639 (Annapolis Junction, MD) November 1, 1995
Raytheon Support Services Company
Non-represented Hourly Employees
at all Locations January 1, 1996
Raytheon Aerospace Support Services, Inc.
Contract Field Team employees January 1, 1996
Harbert-Yeargin Inc. January 1, 1996 (for elective
Non-represented Employees at Fort deferrals)
Leonard Wood, Missouri
September 1, 1993 (for
qualified non-elective
contributions)
Raytheon Aerospace Support Services, Inc. April 1, 1996
T34-44 Contract at
Milton, FL; Corpus Christi, TX;
Patuxent River, MD; NAS Cecil Field,
FL; NAS Fallon, NV; Virginia Beach, VA;
Edwards AFB, CA; El Toro, CA,
San Diego, CA; NAS Lemoore, CA
Columbus AFB, MS Contract
UNFO Contract, NAS Pensacola, FL
Raytheon Aerospace Support Services, Inc. April 1, 1996
U.S. Customs Contract at
Albuquerque, NM; Corpus Christi, TX;
Spring, TX; Jacksonville, FL;
Opa Locka, FL; Belle Chase, LA;
Aguadilla, PR; San Angelo, TX;
San Diego, CA; Tucson, AZ;
Ronkonkoma, NY; El Paso, TX;
Milton, FL; Phoenix, AZ;
Riverside, CA; San Antonio, TX;
Clearwater, FL; APO AA; Laredo, TX;
Puerta Vallarta, Mexico
<PAGE>
APPENDIX B
COMPANY CONTRIBUTIONS
Location Amount Effective Date
Raytheon Support Services Company 75 cents per hr. paid
Hourly Employees in Unit Represented by up to 40 hrs. per week
International Brotherhood of Electrical
Workers (Beale AFB, CA)
Salaried Employees (Beale AFB) 10/1/95
1/1/96
Hourly Employees in Unit Represented by 83 cents per hr. paid
International Brotherhood of Electrical up to 40 hrs. per week
Workers, Local 223 (Otis AFB, MA) 10/1/95
Salaried Employees (Otis AFB) 1/1/96
Employees at Warren/ Southridge, MI 16 cents per hr. paid
up to 40 hrs. per week 1/1/96
All Employees at Rock Island, IL 30 cents per hr. paid
up to 40 hrs. per week 1/1/96
Employees at Fort Monmouth, NJ 10 cents per hr. paid UNTIL
up to 40 hrs. per week 2/29/96
Raytheon Aerospace Support Systems
Company: 3% of gross wages for
All Units fiscal year 1996 12/30/95
EXHIBIT 4.6
E-SYSTEMS SAVINGS AND INVESTMENT PLAN
Article I
PREAMBLE
WHEREAS, effective July 1, 1973, E-Systems, Inc. organized and existing
under the laws of the State of Delaware, established the Employee Stock
Ownership Plan for its eligible Employees (hereinafter referred to as the
"Previous Plan") which was restated January 1, 1976 and January 1, 1989, and
amended thereafter from time to time; and
WHEREAS, the Previous Plan, prior to January 1, 1995, included ESOP and
PAYSOP Accounts, the Tax-Advantaged Capital Accumulation Plan (T-CAP), Savings
and Investment Plan (S & I) accounts, after-tax employee contribution accounts
and certain HRB accounts and rollover accounts; and
WHEREAS, the Previous Plan was amended and restated, effective January
1, 1995, into two separate plans with separate plan documents, with the ESOP and
PAYSOP Accounts continued, on a combined basis, in a restated Employee Stock
Ownership Plan, and the T-CAP, S & I, after-tax employee contribution, HRB and
rollover accounts spun off and continued in a new Employee Savings Plan;
WHEREAS, as a result of the acquisition of E-Systems, Inc. by Raytheon
Company in May, 1995, the final ESOP contribution was made under the ESOP for
the period from January 1, 1995 through April of 1995 and the ESOP was then
merged into the Employee Savings Plan with a new annual Regular Discretionary
Employer Contribution under the Employee Savings Plan, beginning with the period
after the final ESOP contribution; and
WHEREAS, the Corporation now desires to make certain further changes to
the Employee Savings Plan, including: (i) the adoption of full and immediate
vesting of Members in all of their accounts, (ii) providing for an investment
committee to direct the investments of certain specified contributions and
accounts for which no investment direction is given by Members and (iii) the
replacement of the Melpar Division with the new Falls Church Division as a
participating division hereunder;
NOW, THEREFORE, the Employee Savings Plan is hereby restated and
amended, superseded and replaced by this separate restated Employee Savings
Plan, effective January 1, 1995.
There will be no termination and no gap or lapse in time or effect
between such Plans, and the existence of a qualified Plan shall be continuous
and uninterrupted.
This restated Plan, which is a profit sharing plan, is conditioned upon
its qualification under Sections 401(a), 401(k) and 401(m) of the Internal
Revenue Code of 1986, as amended from time to time, with employer contributions
being deductible under Section 404 of said Code or any other applicable sections
thereof, as amended from time to time.
The terms and conditions of this restated Plan are as follows:
ARTICLE II
Purpose and Definitions
2.1 Purpose: The purpose of this Plan is to encourage Employees to save
and invest, systematically, a portion of their current Compensation in order
that they may have a source of additional income upon their Retirement or
Disability, or for their family in the event of death. The benefits provided by
this Plan will be paid from the Trust Fund and will be in addition to the
benefits Employees are entitled to receive under any other programs of the
Employer.
This Plan and the separate related Trust forming a part hereof are
established and shall be maintained for the exclusive benefit of the eligible
Employees of the Employer and their Beneficiaries. No part of the Trust Fund can
ever revert to the Employer or be used for or diverted to any other purpose
other than for the exclusive benefit of the Employees of the Employer and their
Beneficiaries, except as provided in Section 18.4 hereof.
2.2 Definitions: Where the following words and phrases appear in this
Plan, they shall have the respective meanings set forth below, unless the
context clearly indicates otherwise:
(a) Affiliated Employer: Any business entity (including an Employer
hereunder) that, together with an Employer hereunder, constitutes a controlled
group of corporations, a group of trades or businesses under common control, or
an affiliated service group, all as defined in Code Section 414 (subject,
however, to the provisions of Code Section 415(h) when applying the benefit
limitations of Code Section 415).
(b) Allocation Date: The date as of which contributions are
allocated hereunder, which shall be
(1) as soon as practicable after the end of each payroll period as
to Salary Deferral, after-tax Employee and Matching Employer
Contributions,
(2) as soon as practicable after receipt hereunder as to Rollover
Contributions,
(3) the last day of December as to Discretionary Employer
Contributions.
The Committee may use other Allocation Dates if it so desires, but must
have at least one Allocation Date per year for each type of contribution.
(c) Beneficiary: A person designated by a Member to receive
benefits hereunder upon the death of
such Member.
(d) Code: The Internal Revenue Code of 1986, as amended from
time to time.
(e) Committee: The persons appointed to administer the Plan in
accordance with Article XIII hereof, but who will have no responsibility as to
the management and investment of Plan assets.
(f) Compensation: As to any payroll period, for purposes of determining
Salary Deferral or Employee Contributions, the base rate of pay of an Employee
applicable for such period, regardless of whether actually paid (including any
base rate of pay amount that is deducted from such Employee's pay for such
period under Code Section 125 or 401(k)).
As to any Plan Year, for purpose of determining Discretionary Employer
Contributions, the lesser of:
(i) the cumulative annual base rate of pay applicable to an
Employee for such year regardless of whether actually paid
(including any base rate of pay amount that is deducted from
such Employee's pay for such year under Code Section 125 or
401(k)) or,
(ii) the sum of the taxable remuneration (as reported on Form W-2
or its equivalent) paid to an Employee by the Employer for
personal services, plus any pre-tax employee contribution made
by the Employee under any Employer plan in accordance with
Code Section 125 or 401(k).
Base rate of pay is an Employee's basic rate of remuneration for
personal services, excluding such items as shift differential, quarterly wage
adjustments, commissions, unused sick pay, severance pay, allowances, awards,
lump sum payments, per diem payments and imputed income.
Compensation will be determined by excluding any amount in excess of
the dollar limit allowed under Code Section 401(a)(17)). If during a year any
Employee ("family member") is the spouse or lineal descendant, below age 19, of
another Employee ("HCE") who either is a five percent (5%) owner (as defined in
Code Section 416(i) or is a highly compensated employee (as defined in Code
Section 414(q) in the group consisting of the ten (10) such highly compensated
employees with the greatest compensation during such year, then, for purposes of
the above dollar limitation, such "family member's" compensation for such year
will be aggregated with such "HCE's" compensation for such year. The dollar
limit applicable to each such Employee's compensation for such year will be the
dollar limit applicable for such year multiplied by a fraction, the numerator of
which is such Employee's unlimited compensation for such year and the
denominator of which is the sum of the unlimited compensation for such year for
all Employees with whom such Employee is a family member, as defined above.
(g) Contributions: Amounts contributed hereunder for allocation
to Members as follows:
(1) Salary Deferral Contributions: The pre-tax contributions made
under Section 4.1a hereof through salary deferral pursuant to
Code Section 401(k).
(2) Employee Contributions: The after-tax contributions made by
Members under Section 4.2 hereof not through salary deferral).
(3) Matching Employer Contributions: The matching Employer
Contributions made under Section 4.1a. hereof.
(4) Regular and Optional Discretionary Employer Contributions: The
contributions made by the Employer, under Section 4.1a hereof,
which are determined at the discretion of the Employer.
(5) Rollover Contributions: The contributions made by an
Employee under Section 4.3 hereof, which
constitute the Employee's distribution from a prior plan.
(h) Corporation: Raytheon E-Systems, Inc., (formerly known as
E-Systems, Inc. prior to July 3, 1996) a corporation
organized and existing under the laws of the State of
Delaware or its successor or successors.
(i) Covered Employment: The employment category for which the
Plan is maintained, which includes any employment with the
Employer, excluding:
employment as a "leased employee" (as such term is defined
within the definition of Employee below)
employment as a non United States citizen who was hired on or
after December 2, 1964, and who is employed outside the
territorial United States or only temporarily within the
territorial United States.
Provided, however, that employment with a subsidiary or affiliate of
the Corporation or employment in any division, subdivision, branch or unit of
the Corporation or in any employment position with an Employer entered into in
connection with a business acquisition on or after January 1, 1995, or in any
employment position created in connection with such a business acquisition shall
only be covered hereunder if so provided in part I or II of the Participation
Exhibit attached to and made a part of this Plan.
(j) Effective Date: January 1, 1995, except as otherwise provided
herein.
(k) Employee: Any person who, on or after the Effective Date, is
receiving remuneration for personal services rendered as a common law employee
of the Employer or Affiliated Employer or who is on a Leave of Absence. A
"leased employee" will also be deemed an Employee. A "leased employee" is any
leased employee within the meaning of Code Section 414(n)(2), except that if
such leased employees constitute less than twenty percent (20%) of the
Employer's nonhighly compensated workforce within the meaning of Code Section
414(n)(5)(C)(ii), then the term "Employee" will not include those leased
employees covered by a plan described in Code Section 414(n)(5) unless otherwise
provided by the terms of such plan (or this Plan).
(l) Employer: The Corporation and any other organization which adopts
the Plan in accordance with Article XV hereof. Any Employer under the Previous
Plan that was participating in the portion of the Previous Plan that is
continuing under this Plan shall automatically become an Employer under this
Plan on the Effective Date.
(m) Employer Stock: Common stock of E-Systems, Inc. prior to the
acquisition of E-Systems, Inc. by Raytheon Company in May, 1995 and thereafter,
the common stock of Raytheon Company.
(n) ERISA: The Employee Retirement Income Security Act of 1974,
as amended from time to time.
(o) Individual Account: Each of the accounts showing the individual
interests in the Trust Fund of each Member, former Member, and Beneficiary, as
described in Section 5.1 hereof. If so provided for in a qualified domestic
relations order (as defined in Code Section 414(p)), an account will be
maintained for an alternate payee representing such alternate payee's interest
hereunder.
(p) Leave Of Absence: Any absence from service authorized by an
Employer under such Employer's standard personnel practices for reasons other
than termination of employment, death, discharge or retirement, provided that
all persons under similar circumstances must be treated alike in the granting of
such Leaves of Absence.
(q) Limitation Year: The calendar year used in applying Code
Section 415.
(r) Member: An Employee who has met the eligibility requirements
for participation set forth in Article III hereof.
(s) Plan: E-Systems, Inc. Employee Savings Plan (as restated January 1,
1995), the Plan set forth herein, as amended from time to time, which replaces
the original Employee Savings Plan adopted effective January 1, 1995, which was
spun off from the previous Employee Stock Ownership Plan. This Plan includes:
(i) a salary deferral arrangement under Code Section 401(k), with
matching contributions under Code Section 401(m), sometimes
referred to as the E-Systems, Inc. Tax-Advantaged Capital
Accumulation Plan (T-CAP),
(ii) a voluntary after-tax Employee contribution portion,
(iii) a prior savings and investment plan portion, and
(iv) a discretionary Employer contribution portion,
(v) a prior plan employer contribution portion, and
(vi) a prior ESOP assets portion.
(t) Plan Administrator: The Corporation.
(u) Plan Year: Each annual period beginning on January 1st and
ending on December 31st.
(v) Previous Plan: The E-Systems, Inc. Employee Stock Ownership Plan
(As Restated Effective January 1, 1989) and any predecessor thereto, in force
and effect for the period prior to the Effective Date, the plan from which this
Plan was spun off. Any reference herein to the Previous Plan as of a certain
date or for a certain period shall be deemed a reference to the Previous Plan as
then in effect.
(w) Trust Agreement: The trust agreement maintained in connection with
the Plan, amended from time to time, which constitutes a part of this Plan.
(x) Trust Or Trust Fund: The fund maintained in accordance with
the terms of the Trust Agreement.
(y) Trustee: Any corporation or individuals appointed by the
Employer to administer the Trust in accordance with the Trust Agreement.
(z) Valuation Date: The date as of which the Investment Funds are
valued and gains or losses allocated, which shall be every business day (or such
other dates as may be provided for by the Investment Funds in which such
accounts are invested). The Committee may use other Valuation Dates if it so
desires, from time to time, but must have at least one Valuation Date per year.
2.3 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context indicates to
the contrary.
ARTICLE III
Participation Requirements
3.1 Participation Originating Under The Previous Plan: Employees in
Covered Employment who were participants in the portion of the Previous Plan
spun off into this Plan, immediately prior to the Effective Date, or would have
become participants in such portion of the Previous Plan on the Effective Date,
shall automatically become Members in this restated Plan as of the Effective
Date.
3.2 Participation Originating Under This Plan: Each Employee who does
not become a Member in this Plan in accordance with Section 3.1 hereof, shall
become a Member in this Plan as of his first day of Covered Employment.
3.3 Cessation Of Participation And Reentry: If a Member leaves Covered
Employment, he will cease his participation in this Plan (except as to any
remaining account balance), but will, upon recommencement of Covered Employment,
again become a Member hereunder.
3.4 Participating Divisions, Units, Subsidiaries Or Affiliates: Any
Employee who is employed within a covered class by a division, subdivision,
branch, unit, subsidiary or affiliate of the Employer that has been designated
by the Employer as a participating division, subdivision, branch, unit,
subsidiary or affiliate (as shown in part I of the Participation Exhibit, which
is attached to and made a part of this Plan) shall become a Member in this Plan
upon his employment commencement date or date when such division, subdivision,
branch, unit, subsidiary or affiliate begins its participation in this Plan if
later.
3.5 Participation Of Employees Of New Employers: If, after the
Effective Date hereof, any employer adopts the Plan and Trust as a new Employer
as herein provided, it shall specify in its adoption resolution or decision an
initial date for the application and enrollment of its eligible Employees under
the Plan and shall thereafter be governed by the provisions of this Article III.
3.6 Temporary Part-Time Employees: The 1,000 hour eligibility
requirement, effective July 1, 1994, under Section 3.7 of the previous Employee
Stock Ownership Plan as to any Employee in a temporary part-time job category is
revoked retroactive to July 1, 1994.
ARTICLE IV
Contributions
4.1 Contributions By Employer:
a. Types Of Contributions: The Employer shall, during a Plan
Year, contribute the following to the Trust:
(1) Salary Deferral Contribution, for each Member eligible under
part I or II of the Participation Exhibit attached to this
Plan, employed by such Employer, determined according to such
Member's salary deferral election for such year under b.
below. Such contribution is for allocation, in accordance with
Section 5.2 hereof, to the Member's Salary Deferral
Contribution Account.
(2) Matching Employer Contribution, for each Member eligible under
part I or II of the Participation Exhibit attached to this
Plan, equal to fifty percent (50%) of the matchable
portion of each eligible Member's Salary Deferral Contribution
hereunder, such matchable portion being up to the first three
percent (3%) of Compensation the Member contributes as a
Salary Deferral Contribution during the Plan Year while in a
job classification eligible for a Matching Employer
Contribution. Such contribution is for allocation, in
accordance with Section 5.2 hereof, to such Members' Matching
Employer Contribution Accounts.
(3) Regular Discretionary Employer Contribution, determined at the
discretion of the Employer's Board of Directors, for Members
eligible under part I or II of the Participation Exhibit
attached to this Plan. Such contributions are not to exceed
one and one-half percent (1-1/2%) of Members' Compensation,
with the contribution for the 1995 Plan Year to be only with
respect to Members' Compensation for such year which is in
excess of the Member's compensation used under the prior
Employee Stock Ownership Plan for determining the final 1995
contribution thereunder. Such contribution is for allocation,
in accordance with Section 5.2 hereof, among such Members'
Regular Discretionary Employer Accounts.
(4) Optional Discretionary Employer Contribution, determined at
the discretion of the Employer's Board of Directors for
Members eligible under part I or II of the Participation
Exhibit attached to this Plan, with the contribution amount
determined and allocated separately as to each Employee group
specified in part I of such Participant Exhibit. Such
contribution is for allocation, in accordance with Section 5.2
hereof, among such Member's Optional Discretionary Employer
Accounts.
b. Member (Pre-Tax) Salary Deferral Elections: When he becomes a Member
hereunder and at any time thereafter, a Member who is eligible under part I or
II of the Participation Exhibit attached to this Plan may elect to defer (on a
pre-tax basis) a portion of his Compensation; provided, however:
(1) The Committee may require such contributions to be a whole
dollar or a whole percentage of his Compensation.
(2) Such deferral must meet the deferral percentage test in
Section 10.2 hereof, and the Committee may require
modifications throughout the year in order to meet such test.
(3) Such deferral cannot exceed the dollar limit in Section 10.1
hereof or the amount of cash remuneration actually payable to
a Member during any payroll period.
(4) The Committee may establish a maximum deferral for any year.
A salary deferral agreement shall be entered into in such manner and at
such times as the Committee may prescribe, provided that changes, suspensions or
discontinuance of salary deferrals may be made by the Member at any time, and
may be made by the Committee if called for under Section 10.1 or 10.2 hereof or
if the Employer's deduction limits under Code Section 404(a) would otherwise be
exceeded, or if the annual addition limitations under Code Section 415 would
otherwise be exceeded as to any Employee.
4.2 Member (After-Tax) Contributions: Any Member eligible under part I
or II of the Participation Exhibit attached to this Plan may, through payroll
deduction (unless the Committee approves another method), elect to make Employee
Contributions hereunder (on an after-tax basis); provided, however:
(1) The amount of contribution for any pay period (subject to
Section 10.2 hereof) must be equal to two percent (2%), four
percent (4%), six percent (6%), eight percent (8%), or ten
percent (10%) of his Compensation for such pay period and in
any payroll period cannot exceed the cash remuneration then
actually payable to the Member.
(2) The Committee may require such contributions to be a whole
dollar amount of his Compensation.
(3) Such contribution must meet the contribution percentage test
in Section 10.2 hereof, and the Committee may require
modifications throughout the year in order to meet such test.
(4) The total Employee Contributions made by a Member hereunder
(including any such contributions made under the Previous
Plan) cannot exceed ten percent (10%) of his aggregate
Compensation for all such years while he was a Member
hereunder (and under the Previous Plan).
An election to make such contributions shall be made in such manner and
at such times as the Committee may prescribe, provided that changes, suspensions
or discontinuance of contributions may be made by the Member in accordance with
Committee guidelines, and may be made by the Committee if called for under
Section 10.2 hereof, or if the annual addition limitations under Code Section
415 would otherwise be exceeded as to any Employee.
4.3 Rollover Contribution: If an individual is an Employee in Covered
Employment who has become, or is expected to become, a Member, he may
contribute, or cause to be contributed, to this Plan all or part of any eligible
rollover distribution (as defined in Code Section 402(c)) he has received under
another qualified retirement plan. Such contribution shall only be made in
accordance with Committee guidelines and is for allocation to the Employee's
Rollover Account.
ARTICLE V
Maintenance Of Individual Accounts
5.1 Establishment Of Individual Accounts: The Committee shall create
and maintain adequate records to reflect at all times the interest in the Trust
Fund of each Member. Such records shall be in the form of separate Individual
Accounts for each Member who has an interest in the Trust Fund, such accounts to
be referred to as follows:
a. Salary Deferral Account (T-CAP 401(k)): The account representing
Salary Deferral Contributions made under this Plan and gains or losses allocable
thereto, originally effective under the Previous Plan on January 1, 1984.
b. Regular Employee Contribution Account (After-Tax): The
account representing Employee Contributions made prior to September 25, 1995 and
gains or losses allocable thereto (other than those included in c. and d.
below).
c. HRB Employee Contribution Account (HRB After-Tax): The account
representing Employee Contributions by HRB Systems Employees under the Previous
Plan during 1990, and gains or losses allocable thereto.
d. Voluntary Savings Account (Prior Voluntary After-Tax): The account
representing after-tax Employee contributions made under the Previous Plan
voluntary savings program prior to April 1, 1980, and gains or losses allocable
thereto.
e. Employee Contribution Account: Any of the Employee
Contribution Accounts in b., c. or d. above.
f. Matching Employer Contribution Account: The account
representing Matching Employer Contributions made hereunder and gains or losses
allocable thereto, effective January 1, 1995.
g. Prior Plan Employer Contribution Account: The account representing
matching employer contributions made for HRB Systems Employees in 1990 under the
Previous Plan and gains or losses allocable thereto and any account representing
employer contributions made under a prior plan that has been transferred to this
account under this Plan and gains or losses allocable thereto.
h. Regular Discretionary Employer Account (E-CAP): The account
representing Regular Discretionary Employer Contributions and forfeitures, and
gains or losses allocable thereto, effective May, 1995.
i. Optional Discretionary Employer Account: The account representing
Optional Discretionary Employer Contributions and forfeitures, and gains or
losses applicable thereto, effective January 1, 1995.
j. Discretionary Employer Account: The total of the Regular and
Optional Discretionary Employer Accounts.
k. Savings And Investment Account: The account representing Employee
and Employer Contributions made before July 1, 1973 under the prior savings and
investment plan and gains or losses allocable thereto. Subaccounts will be
maintained reflecting the portion of the account attributable to Employee
Contributions and the portion attributable to Employer Contributions.
l. Rollover Account: The account representing Rollover
Contributions and gains or losses allocable thereto.
m. Prior ESOP Assets Account: The account representing a Member's ESOP
Account under the E-Systems, Inc. Employee Stock Ownership Plan (as restated
January 1, 1995), and gains or losses allocable thereto, which account was
transferred to this Plan as part of the merger of such Employee Stock Ownership
Plan into this Plan after the final ESOP Contribution was made for April of
1995.
Credits and charges shall be made to such accounts in the manner herein
described. The Individual Accounts are primarily for accounting purposes, and a
segregation of the assets of the Trust Fund to each account by the Trustee shall
not be required. Distributions and withdrawals made from an account shall be
charged to the account as of the date when paid.
Account balances from the Previous Plan shall be carried forward into
the above-referenced accounts, as applicable.
Account balances from a prior plan (other than the Previous Plan) will
be credited to the appropriate accounts named above upon the transfer of said
plan's assets to this Plan. Account balances from the prior plans listed in part
V of the Participation Exhibit have been transferred to this Plan.
5.2 Allocation Of Contributions: Each contribution for Members
eligible under the provisions below shall be allocated as follows:
a. Salary Deferral Contributions And Employee Contributions: Any Salary
Deferral Contribution or Employee Contribution received hereunder on behalf of a
Member shall be allocated to this Salary Deferral Contribution Account or
Employee Contribution Account, as the case may be, as of the Allocation Date
applicable to such contribution.
b. Matching Employer Contributions: Any Matching Employer Contribution
received hereunder for a Member will be allocated to his Matching Employer
Contribution Account as of the Allocation Date applicable to such contribution.
c. Regular and Optional Discretionary Employer Contributions: On the
applicable Allocation Date for a Regular or Optional Discretionary Employer
Contribution the applicable Regular or Optional Discretionary Employer Account
of each eligible Member who is then employed by the Employer in the class of
Employees eligible for such contribution (or was transferred during the current
year to a job classification with the Employer or an Affiliated Employer in
which the Member ceased to be eligible for such contribution hereunder and was
still so employed at the end of such year) will be credited with the allocable
share of such contribution. The amount to be allocated from any such
contribution to the applicable account of each eligible Member shall be in the
proportion that each eligible Member's Compensation (while he was a Member in a
job classification eligible for such contribution hereunder) for the Plan Year
bears to the total Compensation of all such eligible Members (while they were
such Members) for the Plan Year. However, the 1995 Plan Year allocation of
Regular Discretionary Employer Contributions shall be based only on Members'
Compensation for such year which is in excess of the Members' Compensation used
in determining the final 1995 contribution allocation under the prior Employee
Stock Ownership Plan. The above provisions of this paragraph shall be applied
separately to each of the separate eligible classes of employees as to any
Optional Discretionary Employer Contribution applicable to such class of
Employees under Section 4.1a. hereof.
5.3 Allocation Of Gains And Losses: Each Investment Fund's gains or
losses shall be determined and allocated by its fund manager as of each
Valuation Date.
5.4 Investment Options:
a. Investment Alternatives: The Plan permits a Member or Beneficiary to
exercise control over the assets in his accounts. The Member's or Beneficiary's
exercise of control is intended to bring the Plan within the rule of section
404(c) of ERISA. The Member or Beneficiary may invest the assets in his accounts
in one or more of the available investment alternatives set by the Investment
Committee from time to time pursuant to section 13.9, one of which shall be the
Raytheon Common Stock Fund (as described in c. below).
b. Investment Directions: Investment directions may be given in writing
or orally, pursuant to a procedure set by the Investment Committee. A Member or
Beneficiary who gives oral investment directions shall be provided with an
opportunity to obtain written confirmation of these directions. The Investment
Committee may impose reasonable restrictions on the frequency with which
investment directions may be given with regard to a specific investment
alternative; provided, however, that such restrictions must not prevent the Plan
from complying with section 404(c) of ERISA.
Upon initial participation in the Plan, a Member shall complete an
investment direction for any contributions made on his behalf. Matching Employer
Contributions, Regular Discretionary Employer Contributions, if any, and
Optional Discretionary Contributions, if any, made on behalf of the Member will
be invested in accordance with the direction provided with regard to Salary
Deferral Contributions, unless other investment directions are provided. A
Member or Beneficiary may transfer assets in his accounts between investment
alternatives in accordance with procedures established under the Plan.
The Investment Committee shall be the fiduciary responsible for
receiving all investment directions. The Investment Committee may delegate the
responsibility for receiving these directions to another fiduciary. The
Investment Committee, or the fiduciary designated thereby, must follow any
investment direction given by a Member or Beneficiary; provided, however, that
the Investment Committee or its delegate, shall not follow any investment
direction that:
(1) would generate taxable income to the Plan;
(2) would not be in accordance with the documents and
instruments governing the Plan insofar as such documents and
instruments are consistent with the provisions of Title I of ERISA;
(3) would cause the fiduciary to maintain the indicia of
ownership of any assets of the Plan outside the jurisdiction of the
district courts of the United States, other than as permitted by
section 404(b) of ERISA and DOL Reg. Section 2550.404b-1;
(4) would jeopardize the Plan's tax qualified status under the
Code;
(5 could result in a loss in excess of a Member's or
Beneficiary's account balance; or
(6) would result in a prohibited transaction under Section 406
of ERISA or section 4975 of the Code, including but not limited to a
direct or indirect
(a) sale, exchange, or lease of property between the
Corporation or any Affiliated Employer and the Plan, except
for the acquisition or disposition of any interest in a fund,
subfund, or portfolio managed by the Corporation or any
Affiliated Employer, or the purchase or sale of any qualifying
employer security (as defined in section 407(d)(5) of ERISA)
which meets the conditions of section 408(e) of ERISA and
paragraph (d) of this section 5.4(b)(6);
(b) loan to the Corporation or any Affiliated
Employer;
(c) acquisition or sale of any employer real
property (as defined in section 407(d)(2) of ERISA);
(d) acquisition or sale of any employer security
except to the extent that:
(i) such securities are qualifying employer
securities as defined in section 407(d)(5) of ERISA;
(ii) such securities are stock or an equity
interest in a publicly traded partnership
(as defined in section 7704(b) of the Code),
but only if such partnership is an existing
partnership as defined in section
10211(c)(2)(A) of the Revenue Act of 1987;
(iii) such securities are publicly traded on a
national exchange or other generally
recognized market;
(iv) such securities are traded with sufficient
frequency and in sufficient volume to assure
that Member and Beneficiary directions to
buy or sell the security may be acted upon
promptly and efficiently;
(v) information provided to shareholders of such
securities is provided to
Members and Beneficiaries with accounts
holding such securities;
(vi) voting, tender, and similar rights with
respect to such securities are passed
through to Members and Beneficiaries with
accounts holding such securities; and
(vii) information relating to the purchase,
holding, and sale of securities, and the
exercise of voting, tender, and similar
rights with respect to such securities by
Members and Beneficiaries is maintained in
accordance with procedures established by
the Investment Committee pursuant to section
13.9, which are designed to safeguard the
confidentiality of such information, except
to the extent necessary to comply with
Federal laws or state laws not preempted by
ERISA.
c. Investment In The Raytheon Common Stock Fund. One of the investment
alternatives available under the Plan shall be the Raytheon Common Stock Fund.
Such Fund shall be operated in accordance with the requirements of section
5.4(b)(6)(d) of the Plan. A Member or Beneficiary shall be provided information
with regard to the voting, tender, and similar rights appurtenant to the
Member's or Beneficiary's interest in this investment alternative. If the Member
or Beneficiary does not vote the shares attributable to his investment interest
in the Plan, these shares shall not be voted.
d. Lack of Investment Direction: In the event that no investment
directions have been provided with regard to a Member's or Beneficiary's
account, the Investment Committee will invest such amounts in
accordance with Section 13.9.
5.5 Notification To Members: At least once annually the Committee shall
advise each Member for whom an Individual Account is held hereunder the amount
held in such account.
ARTICLE VI
Vesting
6.1 Vesting: A Member shall at all times have a fully vested and
nonforfeitable interest in his Individual Accounts hereunder. Payment shall be
made at the time and in the manner provided in Articles VIII and IX hereof.
ARTICLE VII
Death
7.1 Designation Of Beneficiary: Each Member and former Member may, from
time to time, designate one (1) or more primary Beneficiaries and contingent
Beneficiaries to receive benefits payable hereunder in the event of the death of
such Member or former Member. No Beneficiary designation by a married Employee
of someone other than his spouse as a primary Beneficiary shall be effective
unless the Employee's spouse (if his spouse can be located) consents in writing
to such designation, acknowledges the effect of such designation and has such
consent and acknowledgment witnessed by a Plan representative or a notary
public. Such designation shall be made in writing upon a form provided by the
Committee and shall be filed with the Committee. The last such designation filed
with the Committee shall control. A beneficiary designation filed with the
Committee shall continue in effect following a Member's divorce (unless duly
changed by the Member), except that the designation shall be applied as if the
Member's former spouse had predeceased the Member.
7.2 Benefit: Upon the death of an Employee who is a Member, his
designated Beneficiary, or Beneficiaries, shall be fully vested with respect to
the balance of his Individual Accounts hereunder. Payments
shall be made at the time and in the manner provided in Article XI hereof.
7.3 No Beneficiary: If a Member or former Member dies without a
Beneficiary surviving him, or if all his Beneficiaries die before receiving the
payment to which they are entitled, then the amount, if any, remaining in such
Member's Individual Account shall be paid to the following, with priority as
follows:
a. the Member's surviving spouse; or if none, to
b. the Member's surviving children over age eighteen, and
surviving children under age eighteen with a properly
designated guardian, or if none, to
c. the Member's estate.
A certified copy of a death certificate shall be sufficient evidence of
death and the Committee shall be fully protected in relying thereon. The
Committee may accept other evidence of death at its own discretion.
ARTICLE VII
Death
7.1 Designation Of Beneficiary: Each Member and former Member may, from
time to time, designate one (1) or more primary Beneficiaries and contingent
Beneficiaries to receive benefits payable hereunder in the event of the death of
such Member or former Member. No Beneficiary designation by a married Employee
of someone other than his spouse as a primary Beneficiary shall be effective
unless the Employee's spouse (if his spouse can be located) consents in writing
to such designation, acknowledges the effect of such designation and has such
consent and acknowledgment witnessed by a Plan representative or a notary
public. Such designation shall be made in writing upon a form provided by the
Committee and shall be filed with the Committee. The last such designation filed
with the Committee shall control. A beneficiary designation filed with the
Committee shall continue in effect following a Member's divorce (unless duly
changed by the Member), except that the designation shall be applied as if the
Member's former spouse had predeceased the Member.
7.2 Benefit: Upon the death of an Employee who is a Member, his
designated Beneficiary, or Beneficiaries, shall be fully vested with respect to
the balance of his Individual Accounts hereunder. Payments
shall be made at the time and in the manner provided in Article XI hereof.
7.3 No Beneficiary: If a Member or former Member dies without a
Beneficiary surviving him, or if all his Beneficiaries die before receiving the
payment to which they are entitled, then the amount, if any, remaining in such
Member's Individual Account shall be paid to the following, with priority as
follows:
a. the Member's surviving spouse; or if none, to
b. the Member's surviving children over age eighteen, and
surviving children under age eighteen
with a properly designated guardian, or if none, to
c. the Member's estate.
A certified copy of a death certificate shall be sufficient evidence of
death and the Committee shall be fully protected in relying thereon. The
Committee may accept other evidence of death at its own discretion.
ARTICLE VIII
Withdrawals and Loans
8.1 Withdrawals: In accordance with Committee guidelines, each Member
may, while in the employment of the Employer, withdraw amounts (not outstanding
as a loan under Section 8.2) from this Plan, other than from his Matching
Employer Contribution Account and Discretionary Employer Contribution Account.
Any amount to be so withdrawn will be withdrawn from such available accounts (or
portions thereof) in the order established by the Committee for this purpose,
subject to the restrictions as to financial need described below, as applicable.
Any request for a withdrawal to be made from a Member's Salary Deferral
Account or Prior Plan Employer Contribution Account before the Member has
attained fifty-nine and one-half (59 1/2) years of age must be for hardship
reasons and for this purpose must show that (i) the Member has an immediate and
heavy financial need, and (ii) the withdrawal is necessary to satisfy such need.
The following rules apply:
(1) Immediate And Heavy Financial Need: An immediate heavy
financial need shall be deemed to exist
with respect to a Member only if the withdrawal request is on
account of any of the following:
(A) Expenses for medical care described in Code Section
213(d) incurred by the Member, the Member's spouse,
or any dependents of the Member (as defined in Code
Section 152), including expenses necessary for any
such person to obtain such medical care.
(B) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Member.
(C) Payment of tuition and related educational fees,
including room and board expenses, for not more than
the next twelve months of post-secondary education
for the Member, his spouse, children, or dependents.
(D) The need to prevent the eviction of the Member from
his principal residence or foreclosure on the
mortgage on the Member's principal residence.
(E) To pay taxes on any such withdrawal.
(2) Necessity Of Withdrawal To Satisfy Immediate And Heavy
Financial Need: A hardship withdrawal request shall be deemed
to be necessary to satisfy an immediate and heavy financial
need only if all of the following conditions are satisfied:
(A) The amount of the withdrawal request is not in excess
of the immediate and heavy financial need of the
Member (including any reasonably anticipated taxes on
such withdrawal).
(B) The Member has obtained all nonhardship distributions
and all nontaxable loans currently available from all
plans maintained by the Employer or Affiliated
Employers. However, a hardship withdrawal from a
Member's Prior Plan Employer Contribution Account is
not available hereunder unless the Member has first
made whatever hardship withdrawal is available from
the Member's Salary Deferral Account.
(C) The Member's right to make elective contributions to
this Plan and all other plans (including nonqualified
deferred compensation plans) maintained by the
Employer or Affiliated Employers is (and shall be)
suspended for twelve (12) months after receipt of the
hardship distribution. In the event more than one (1)
distribution is made hereunder within a twelve (12)
month period, the suspension period shall not be
tacked to the remaining portion of the prior
suspension period but rather shall start anew.
(D) The Member's right to make Salary Deferral
Contributions to this Plan and all other plans
maintained by the Employer or Affiliated Employers in
the taxable year following the taxable year of the
hardship distribution is (and shall be) limited to an
amount equal to the applicable limit under Code
Section 402(g) reduced by the Member's Salary
Deferral Contributions in the taxable year of the
hardship distribution. The term "taxable year" as
used hereunder means the Member's taxable year.
8.2 Loans To Members: Loans to Members who are "parties-in-interest"
(as described in ERISA Section 3(14)) shall be permitted only at the sole
discretion of the Committee and shall only be granted in accordance with the
following provisions, applied in a uniform and nondiscriminatory manner:
a. Loan Status: Each such Member's loan shall be an investment of such
Member's Individual Account and the interest and principal paid on such loan
shall be credited only to such Member's Individual Account. While such
investment exists, the portion of the Member's Individual Account invested in
such loan shall be disregarded when other Trust gains or losses are allocated
among Individual Accounts hereunder.
b. Loan Application: Any Member's application for a loan shall be in
such form, and shall contain such information as required by the Committee and
will require the payment of a reasonable loan processing fee, as determined by
the Committee. Such fee may include an application fee, as well as a continuing
periodic fee assessed during the life of the loan.
c. Loan Restrictions: The Committee shall establish loan guidelines.
Loans will be available only to Members whose repayment can be made through
payroll deduction by the Employer. The Committee may, in its sole discretion,
determine that no loans will be granted to any Members or may at any time cease
granting any further loans. The Committee may, in its sole discretion, determine
that loans to Members will be granted only for certain designated reasons or
only up to certain designated amounts or only for certain minimum amounts or
only from certain of Members' accounts or investment funds. Only one outstanding
loan per Member will be allowed and in no event will any loan to a Member
hereunder, exceed the lesser of:
(1) Fifty Thousand Dollars ($50,000), reduced by the highest
outstanding balance of loan(s) from the Plan to such Member
during the one (1) year period ending on the day before the
date on which such loan was made.
(2) One-half ((OMEGA)) of the Member's interest in the plan.
d. Accounts As Collateral: The account from which the loan is being
made shall, to the extent of the Amount borrowed, serve as collateral regardless
of any other security pledged in conjunction with such loan.
e. Rate Of Interest: Interest on Member loans shall be charged
at a reasonable and fair rate based on the then prevailing rates charged by
reputable financial institutions.
f. Repayment - Collection: Any such loan or loans shall be repaid by
the Member within such time and in such manner as the Committee shall determine,
but in any event within five (5) years (except as to loans used to acquire any
dwelling which is, or within a reasonable time will become, the Member's
principal residence); provided, however, substantially level amortization of
such loan (with payments not less frequently than quarterly), shall be required
over the term of the loan. The loan repayments will be invested hereunder in a
manner consistent with the account from which the loan was made or consistent
with any contribution to such account. In the event that the Member does not
repay such loan within the time or manner prescribed, the Committee may deduct
the total amount of such loan or any portion thereof from any payment or
distribution from the Trust Fund to which such Member or his Beneficiary or
Beneficiaries may be entitled. In the event that the amount of any such payment
or distribution is not sufficient to repay the remaining balance of any such
loan, such Member shall be liable for and continue to make payments on any
balance still due from him.
g. Spousal Consent: Any such loan shall be subject to spousal
consent within ninety (90) days
prior to the date the loan is made.
8.3 Transfer of Salary Deferral (T-CAP Account) to Serv-Air, Inc.
Savings and Retirement Plan: Any Member who is an Employee of Serv-Air, Inc. and
who ceased to be in Covered Employment under the Previous Plan due to the change
in the definition of Covered Employment (as a result of Amendment No. One to the
previous Employee Stock Ownership Plan effective January 1, 1993) shall be
entitled to instruct the Committee to transfer the balance of his Salary
Deferral Account in this Plan to a salary deferral account established in his
name in the Serv-Air, Inc. Savings and Retirement Plan.
ARTICLE IX
Account Distributions And Transfers
9.1 Notice To Trustee: As soon as practicable after a person becomes
entitled to a distribution hereunder and after he has filed with the Committee a
proper written request for payment the Committee shall give written notice to
the Trustee, which notice shall include such of the following information and
directions as are necessary or advisable under the circumstances:
a. Name of the Member.
b. Reason for the distribution.
c. Name and address of the Beneficiary or Beneficiaries in case
of a Member's death.
d. Time, manner and amount of payments to be made pursuant to
Section 9.2 hereof.
9.2 Method Of Payment: The Committee shall (subject to Section 9.5)
direct that benefits be paid to the Member or his Beneficiary in the following
ways:
a. Lump Sum: Subject to b. below, all accounts shall be paid as
a lump sum in cash, except that whole shares of Employer Stock will be paid in
kind.
b. Insured Annuity: The Regular Employee Contribution, Voluntary
Savings, and Savings and Investment Accounts may be applied to purchase an
insured annuity, (subject to insurance company requirements).
9.3 Time and Rate of Payment: After termination of employment a Member
shall be given an option to elect either (i) immediate distribution or (ii) a
deferred distribution if the Member has not yet reached age 70(OMEGA). If he
elects immediate distribution, payment shall be made as soon as practicable but
no later than one hundred twenty (120) days after the end of the Plan Year in
which his employment ended. If he elects a deferred distribution, payment shall
be made no later than the required beginning date after attainment of his age
70(OMEGA) under Section 9.4 hereof.
In no event will any distribution be on a period certain annuity basis
over a period greater than the joint life expectancy of the Member and his
Beneficiary.
If a Member dies after receiving partial distribution under an annuity,
the balance will continue to be distributed at least as rapidly as under the
method applicable to the Member at his death.
If a Member dies before his distribution commences, the balance of his
Individual Account will be distributed to his Beneficiary as soon as practicable
but no later than one hundred twenty (120) days after the end of the Plan Year
in which the Member's death occurs, except Beneficiaries as to Member deaths
prior to April 1, 1995 may defer payment, but if the Beneficiary is not the
deceased Member's spouse, such deferral cannot exceed five years.
9.4 Age 70(OMEGA) Restrictions: In no event shall distribution of a
Member's Individual Accounts be delayed beyond April 1st of the calendar year
following the calendar year in which such Member attains age seventy and
one-half (70(OMEGA)), except that on and after January 1, 1997, such payment
will be required only if the Member's employment with all Affiliated Employers
is terminated or the Member is a 5 percent (5%) owner (as defined in Code
Section 416).
In any calendar year when a distribution must be made to a Member whose
employment has not terminated, in accordance with the above provisions of this
section, such distribution shall be made as soon as practicable after the
beginning of such year (but not later than April 1st) and will consist of the
prior December 31st balance in such Member's Individual Accounts. However, on
and after January 1, 1996, if the Member is still employed by an Affiliated
Employer on the date when the Member's initial post age 70(OMEGA) distribution
is to be made, only the minimum required distribution under Code Section
401(a)(9) will be made, unless the Member duly elects a complete distribution.
Any additional amount subsequently credited to such a Member's Individual
Accounts will likewise be distributed as soon as practicable after the end of
the calendar year when so credited, except that on and after January 1, 1996, if
the Member is still so employed by an Affiliated Employer, only the minimum
required distribution under Code Section 401(a)(9) will be made, unless the
Member has duly elected a complete distribution.
9.5 Member May Elect Form Of Payment: In determining which method
permitted in Section 9.2 hereof shall be applicable to a Member, the Committee
shall follow the Member's election.
9.6 Minority Or Disability Payments: During the minority or
incompetency of any person entitled to receive benefits hereunder, the Committee
may direct the Trustee to make payments or distributions to the guardian of such
person, or other persons as may be directed by the Committee. Neither the
Committee nor the Trustee shall be required to see to the application of any
payments so made, and the receipt of the payee (including the endorsement of a
check or checks) shall be conclusive as to all interested parties.
9.7 Qualified Joint And Survivor Annuity Requirements: Notwithstanding
anything above to the contrary, any Member who is married on the date his
benefit is to commence, whose Individual Accounts are in excess of Three
Thousand Five Hundred Dollars ($3,500), and who elects a form of life annuity,
shall be paid such annuity in the form of a monthly Qualified Joint and Fifty
Percent (50%) Survivor Annuity, unless an election to the contrary is in effect
in accordance with the subsequent provisions of this Section. Under this form,
the balance of his applicable Individual Account or Accounts (for which a
Qualified Joint and Fifty Percent (50%) Survivor Annuity is available) shall be
used to purchase a monthly annuity from an insurance company with a monthly
amount paid to the Member for his lifetime, and the spouse (to whom the Member
was married when his benefit commenced), if surviving at the Member's death,
shall receive thereafter for life a monthly benefit of fifty percent (50%) of
the monthly amount paid to the Member. The last payment shall be made as of the
first day of the month in which occurs the death of the last surviving of the
Member and his spouse.
Within a reasonable time before the Member's benefit commencement date,
the Committee shall provide to the Member who elects a life annuity a written
explanation of the terms and conditions of the Qualified Joint and Fifty Percent
(50%) Survivor Annuity described herein and the effect of refusing it. If the
Member wishes to elect a form of life annuity other than the Qualified Joint and
Fifty Percent (50%) Survivor Annuity, such election will not become effective
unless his spouse (if he has a spouse who can be located) consents in writing to
such election, acknowledges the effect of such election and has such consent and
acknowledgment witnessed by a Plan representative or a notary public. A properly
completed benefit election form (furnished by the Committee) shall be returned
to the Committee within the ninety (90) days prior to Member's benefit
commencement date. If the Member files another election form after the earlier
form and prior to his benefit commencement date, the earlier form shall be
deemed annulled; provided, however, that unless the spouse duly revokes the
right of consent as to such changes in election, the spouse's consent is
required in the manner described above.
9.8 Qualified Domestic Relations Orders: Distribution to an alternate
payee under any "qualified domestic relations order" (as defined in Code Section
414(p)) may be made as soon as practicable after receipt of such order by the
Committee hereunder unless such order duly requires later payment. However,
nothing contained in a qualified domestic relations order shall have the effect
of accelerating any vesting of benefits under this Plan.
9.9 Direct Rollovers: This Section applies to distributions, including
in-service withdrawals. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's distribution election, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this Section, the following definitions shall apply:
a. Eligible Rollover Distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; the portion of any distribution
that is not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer securities);
and any distribution under $200 that would otherwise be eligible for direct
rollover, if such distribution includes the reissuance of a check originally
issued prior to January 1, 1996 from a fund not maintained by The Vanguard
Group.
b. Eligible Retirement Plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
c. Distributee: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
d. Direct Rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the distributee.
9.10 Transfers to Another Plan: If the employment of an Employee
covered under this Plan is transferred to another job classification not covered
by this Plan but covered by another plan of an Affiliated Employer, then the
Employee's Individual Accounts hereunder may be transferred to such other plan
if such other plan provides for receipt of such accounts thereunder.
ARTICLE X
Code Sections 402(g), 401(k) and (m) Limitations
10.1 Dollar Limit: If a Member's Salary Deferral Contributions
hereunder should exceed the dollar limit under Code Section 402(g) (subject to
the cost-of-living adjustment set forth in Code Section 402(g)(5)), in any
taxable year of the Member, the excess (adjusted for earnings or losses thereon)
shall be distributed to the Member. If the Member also participates in another
elective deferral program (within the meaning of Code Section 402(g)(3)) and if,
when aggregating his elective deferrals under all such programs, an excess of
deferral contributions arises under the dollar limitation in Code Section 402(g)
with respect to such Member, the Member shall, no later than March 1st following
the close of the Member's taxable year, notify the Committee as to the portion
of such excess deferrals to be allocated to this Plan and such excess so
allocated to this Plan (adjusted for earnings or losses thereon) shall be
distributed to the Member after reduction by any excess contribution already
distributed for such year under Section 10.2b hereof. Any distribution under
this Section shall be made to the Member no later than the April 15th
immediately following the close of the Member's taxable year for which such
contributions were made.
10.2 Deferral And Contribution Percentage Tests:
a. Highly Compensated Employee: For purposes of this Section, after
1986, the term Highly Compensated Employee shall mean any Employee who, during
the Plan Year of determination or the immediately preceding Plan Year:
(i) was at any time during such year(s) a five percent (5%) owner
(as defined in Code Section 416(i)(1));
(ii) received compensation (as defined below) from the Affiliated
Employers in excess of Seventy-Five Thousand Dollars ($75,000);
(iii) received compensation (as defined below) from the Affiliated
Employers in excess of Fifty Thousand Dollars ($50,000) and
was in the top twenty percent (20%) of the Employees of all
Affiliated Employers (when ranked on the basis of compensation
paid during such year); excluding, however, for purposes of
determining the top twenty percent (20%):
(A) Employees who have not completed at least six (6)
months of service;
(B) Employees who normally work less than seventeen and
one-half (17(OMEGA)) hours per week;
(C) Employees who normally work not more than six (6)
months during any Plan Year;
(D) Employees who have not attained age twenty-one (21);
(E) Employees covered under a collective bargaining
agreement (to the extent permitted in appropriate
regulations); and
(F) Employees who are nonresident aliens and who receive
no earned income (as defined in Code Section
911(d)(2) which constitutes income from sources
within the United States (within the meaning of Code
Section 861(a)(3)); or
(iv) was at any time an officer and received compensation (as
defined below) greater than fifty percent (50%) of the dollar
limitation in effect under Code Section 415(b)(1)(A) for such
Plan Year; provided that, for purposes of this subparagraph
(iv):
(A) no more than fifty (50) Employees (or if lesser, the
greater of three (3) Employees or ten percent (10%)
of the Employees) of the Affiliated Employers shall
be considered as officers, and
(B) if in such Plan Year, no officer satisfied the
requirements set forth in this subparagraph (iv)
above, the highest paid officer of the Affiliated
Employers during such Plan Year shall be considered
an officer.
(1) For purposes of this Section, the term "compensation" shall have
the same meaning as in Code Section 415(c)(3), without regard to Code Sections
125, 402(a)(8), 402(h)(1)(B), and 403(b) in the case of contributions made by an
Affiliated Employer under a salary reduction agreement. Thus "compensation"
includes taxable income reported on form W-2 (or its equivalent) plus salary
reduction amounts under said Code Sections.
(2) For purposes of determining whether an Employee is highly
compensated in the Plan Year for which the determination is being made, any
Employee not described in subparagraphs (ii), (iii), or (iv) above for the
preceding year (disregarding this paragraph (2)), shall not be treated as
described in subparagraphs (ii), (iii), or (iv) above unless such Employee is a
member of the group consisting of the one hundred (100) Employees of the
Employer who were paid the highest compensation during the Plan Year for which
such determination is being made. Notwithstanding the preceding sentence nor the
first sentence in paragraph (a) above in this Section, if the Employer so
elects, the determination described in said paragraph (a) above will be made
only for the Plan Year of determination if such Plan Year is a calendar year and
no such determination will be made for the immediately preceding Plan Year, in
which event the preceding sentence in this such paragraph (2) will not apply;
provided, however, the Employer may only make such election if the same election
is made as to all plans, entities and arrangements of the Employer with respect
to which a determination of Highly Compensated Employees is necessary.
(3) For purposes of this Section, if any individual is a member of the
family (spouse, and lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants) of a five-percent (5%) owner or of a Highly
Compensated Employee in the group consisting of the ten (10) highly compensated
Employees paid the greatest compensation during such Plan Year, then the
following provisions shall be applicable:
(A) such family member shall not be considered a separate
Employee,
(B) any compensation paid to such family member (as well as any
applicable contribution (or benefit) paid to or on behalf of
such person) shall be treated as if it were paid to (or on
behalf of) said five-percent (5%) owner or Highly Compensated
Employee, and
(C) any excess as to such aggregated family members under the
following provisions of this Section shall be allocated among
such family members on the basis of their respective
contributions combined for purposes of determining such
excess.
(4) For purposes of this Section, former Employees shall be
treated as Highly Compensated Employees, if:
(A) such an Employee was a highly compensated Employee upon
termination of employment with the Affiliated Employers; or
(B) such an Employee was a highly compensated Employee at any time
after attaining age fifty-five (55).
However, former Employees are disregarded when determining the top
twenty-percent (20%), the top one-hundred (100) or the includible officers group
above.
b. Deferral Percentage Test: Each Plan Year the Committee shall
determine:
(i) The "deferral percentage" for each Employee who is then
eligible for salary deferrals, which shall be the ratio of the
amount of such Employee's salary deferral for such Plan year
to the Employee's compensation (as defined in a.(1) above,
subject to the dollar limitation set forth in Section 2.2(f)
hereof), for such Plan Year.
(ii) The "highly compensated deferral percentage", which shall be
the average of the "deferral percentages" for all Highly
Compensated Employees then eligible for salary deferrals.
(iii) The "nonhighly compensated deferral percentage", which shall
be the average of the "deferral percentages" for all Employees
then eligible for salary deferrals who were not included in
the "highly compensated deferral percentage" in (2) above.
In no event shall the "highly compensated deferral percentage" exceed
the greater of:
(A) a deferral percentage equal to one and one-fourth
(1 1/4) times the "nonhighly compensated deferral percentage"; and
(B) a deferral percentage equal to two (2) times the
"nonhighly compensated deferral percentage" but not
more than two (2) percentage points greater than the
"nonhighly compensated deferral percentage".
If the above deferral percentage test would otherwise be violated as of
the end of the Plan Year, then notwithstanding any other provision hereof, every
contribution included in the "highly compensated deferral percentage" for a
Member whose deferral percentage is greater than the permitted maximum shall
automatically be revoked to the extent necessary to comply with such deferral
percentage test and the amount of such contribution, to the extent revoked,
shall constitute an "excess contribution" to be distributed to such Member
(adjusted for earnings and losses thereon) within two and one-half (2(OMEGA))
months following the close of the Plan Year for which such contribution was
made. Such excess shall first be reduced by any excess deferral for such Plan
Year already distributed to the Member under Section 10.1 hereof. To determine
the amount of the excess contribution and the Members to whom the excess
contributions are to be distributed, the Salary Deferral Contributions of Highly
Compensated Employees shall be reduced in order of the deferral percentages
beginning with the Highly Compensated Employee with the highest of the deferral
percentages. The actual deferral percentage of the Highly Compensated Employee
with the highest actual deferral percentage is reduced by the amount required to
cause the Employee's actual deferral percentage to equal the percentage of the
Highly Compensated Employee with the next highest actual deferral percentage. If
a lesser reduction would satisfy the actual deferral percentage test, only this
lesser reduction shall be made. This process will be repeated until the
deferrals satisfy the actual deferral percentage test. The highest actual
deferral percentage remaining under the Plan after completion of the above
leveling procedure is the highest permitted actual deferral percentage. In no
case may the amount of excess contributions to be distributed for a Plan Year
with respect to any Highly Compensated Employee exceed the amount of Salary
Deferral Contributions made on behalf of the Highly Compensated Employee for the
Plan Year.
If a Highly Compensated Employee participates in two or more plans
maintained by the Employer or Affiliated Employer, that are subject to the
deferral percentage test, then such Employee's deferral percentage shall be
determined by aggregating his participation in all such plans.
c. Contribution Percentage Test: Each Plan Year the Committee
shall (subject to e. below) determine:
(i) The "contribution percentage" for each Employee who is then
eligible to receive Matching Employer Contributions, which
shall be the ratio of the amount of such Employee's Matching
Employer Contribution to the Employee's compensation (as
defined in a.(1) above, subject to the dollar limitation set
forth in Section 2.2(f) hereof), for such Plan Year.
(ii) The "highly compensated contribution percentage", which shall
be the average of the "contribution percentages" for all
eligible Highly Compensated Employees.
(iii) The "nonhighly compensated contribution percentage", which
shall be the average of the "contribution percentages" for all
Employees then eligible who were not included in the "highly
compensated contributions percentage" in (2) above.
In no event shall the "highly compensated contribution percentage"
exceed the greater of:
(A) a contribution percentage equal to one and one-fourth
(1-1/4) times the "nonhighly compensated contribution percentage"; and
(B) a contribution percentage equal to two (2) times the
"nonhighly compensated contribution percentage" but
not more than two (2) percentage points greater than
the "nonhighly compensated contribution percentage".
If the above contribution percentage test would otherwise be violated
as of the end of the Plan Year, then notwithstanding any other provision hereof
every contribution included in the "highly compensated contribution percentage"
for a Member whose contribution percentage is greater than the permitted maximum
shall automatically be revoked to the extent necessary to comply with such
contribution percentages test and the amount of such contribution, to the extent
revoked, shall constitute an "aggregate excess contribution" to be distributed
to such Member (adjusted for earnings or losses thereon) or forfeited, if
applicable, within two and one-half (2(OMEGA)) months following the close of the
Plan Year for which such contribution was made. To determine the amount of
aggregate excess contributions and the Members to whom the aggregate excess
contributions are to be distributed, the applicable contributions of Highly
Compensated Employees are reduced in the order of their contribution percentage
beginning with the Highly Compensated Employee with the highest contribution
percentage. The actual contribution percentage of the Highly Compensated
Employee with the highest actual contribution percentage is reduced by the
amount required to cause the Employee's actual contribution percentage to equal
the percentage of the Highly Compensated Employee with the next highest actual
contribution percentage. If a lesser reduction would satisfy the actual
contribution percentage test, only this lesser reduction shall be made. This
process will be repeated until the Plan satisfies the actual contribution
percentage test. The highest actual contribution percentage remaining under the
Plan after completion of the above leveling procedure is the highest permitted
actual contribution percentage. In no case may the amount of excess aggregate
contributions with respect to any Highly Compensated Employee exceed the amount
of Employee and Matching Employer Contributions made on behalf of the Highly
Compensated Employee for the Plan Year.
If a Highly Compensated Employee participates in two (2) or more plans
maintained by the Employer or Affiliated Employer that are subject to the
contribution percentage test, then such Employee's contribution percentage shall
be determined by aggregating his participation in all such plans. In addition,
if the Employer maintains two (2) or more plans subject to the contribution
percentage test and such plans are treated as a single plan for purposes of the
coverage requirements for qualified plans under Code Section 410(b), then such
plans are treated as a single plan for purposes of the contribution percentage
test.
d. No Multiple Use of Alternative Limitation: As to Members
subject to both of the limits in b. and c. above, additional reductions of the
otherwise applicable limits shall be made as necessary to prevent multiple use
of the alternative limitation (i.e., the two times or two percentage point
limitation) in accordance with Treas. Reg. 1.401(M)-2.
e. Collective Bargaining Employees: Any collective bargaining unit
Employees hereunder shall be disregarded when the above deferral and
contribution percentage tests are applied to nonbargaining Employees. Each
collective bargaining unit with Employees who are eligible to make salary
deferral elections hereunder shall be separately subject to the deferral
percentage test, or, if there is more than one collective bargaining unit with
Employees eligible to make salary deferrals hereunder, such bargaining units may
be aggregated in groups of two or more and each group shall be separately
subject to the deferral percentage test, as determined each year by the
Committee. The above contribution percentage test is deemed to be automatically
met by any collective bargaining unit Employees otherwise subject to such test.
ARTICLE XI
Code Section 415 Limits
11.1 Limit On Annual Additions Under Code Section 415: Contributions
hereunder shall be subject to the limitations of Code Section 415, as provided
in this Section.
a. Definitions: For purposes of this Section the following
definitions shall apply:
(1) "Annual Addition" shall mean the sum of the following
additions to a Member's Individual Account for the Limitation Year:
(a) Employer contributions (including salary reduction
contributions);
(b) His own (after-tax) contributions, if any;
(c) Forfeitures, if any.
Annual Additions to other Employer defined contribution plans
(also taken into account when applying the limitations described below)
shall include any voluntary employee contributions to an account in a
defined benefit plan and any employer contributions to an individual
retirement account or annuity under Code Section 408 or to a medical
account for a key employee under Code Section 401(h) or 419A(d), except
that the 25%-of-pay limit below shall not apply to employer
contributions to a key employee's medical account after his separation
from service.
(2) "Earnings" for any Limitation Year shall be the Employee's
compensation received for personal services actually rendered
in the course of employment with the Employer and reported as
taxable income on Form W-2 (or subsequent equivalent).
b. Defined Contribution Plan(s) Only: The Annual Addition to a Member's
Individual Account hereunder (together with the Annual Additions to the Member's
account(s) under any other qualified defined contribution plan(s) maintained by
an Affiliated Employer) for any Limitation Year may not exceed the lesser of:
(1) Thirty Thousand Dollars ($30,000.00), and for each year
thereafter the dollar amount prescribed by the Secretary of
the Treasury, to take into account any cost-of-living
adjustment under Section 415(d) of the Code, or
(2) Twenty-five percent (25%) of the Member's Earnings for the
Limitation Year.
c. Defined Contribution And Defined Benefit Plans: If, in any
Limitation Year, a Member also participates in one (1) or more qualified defined
benefit plans maintained by any Affiliated Employer (whether or not terminated),
then for such Limitation Year, the sum of the Defined Benefit Plan Fraction (as
defined below) for such Limitation Year and Defined Contribution Plan Fraction
(as defined below) for such Limitation Year shall not exceed one (1.0).
The Defined Benefit Fraction for any Limitation Year shall mean a
fraction (a) the numerator of which is the projected annual benefit of the
member under the qualified defined benefit plan(s) (determined as of the close
of the Limitation Year), and (b) the denominator of which is the lesser of One
Hundred Twenty-Five Percent (125%) of the dollar limitation under Code Section
415(b)(1)(A) or One Hundred Forty Percent (140%) of the percentage limitation
under Code Section 415(b)(1)(B) for the year of determination (taking into
account the effect of Section 235(g)(4) of the Tax Equity and Fiscal
Responsibility Act of 1982).
The Defined Contribution Fraction for any Limitation Year shall mean a
fraction (a) the numerator of which is the sum of the Annual Additions (as
defined during each applicable Limitation Year) to the Member's accounts under
all qualified defined contribution plans maintained by an Affiliated Employer as
of the close of the Limitation Year (subject to reduction to the extent
permitted under the transition rule in Section 235(g)(3) of the Tax Equity and
Fiscal Responsibility Act of 1982), and (b) the denominator of which is the sum
of the lesser of One Hundred Twenty-Five Percent (125%) of the dollar limitation
under Code Section 415(c)(1)(A) or One Hundred Forty Percent (140%) of the
percentage limitation under Code Section 415(c)(1)(B), for such Limitation Year
and for all prior Limitation Years during which the Employee was employed by an
Affiliated Employer (provided, however, at the election of the Committee, the
denominator shall be increased by using for Limitation Years ending prior to
January 1, 1983, an amount equal to the denominator in effect for the Limitation
Year ending in 1982, multiplied by the transition fraction provided in Code
Section 415(e)(6)(B)).
If, in any Limitation Year, the sum of the Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction for a Member would exceed one
(1.0) without adjustment of the amount of Annual Additions that can be allocated
to such Member under paragraph b. of this Section, then the amount of maximum
annual benefit that can be paid to such Member under any qualified defined
benefit plan(s) maintained by an Affiliated Employer, shall be reduced to the
extent necessary to reduce the sum of the Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction for such Member to one (1.0).
d. Excess Allocation: If forfeitures available for allocation or if a
reasonable error in either estimating a Member's Earnings or in determining the
Member's elective deferrals (under Code Section 402(g)(3)) or if other
circumstances acceptable to the Internal Revenue Service would cause the
limitation on Annual Additions described above to be exceeded, then the amount
of such excess shall be disposed of as follows:
(1) The excess will be refunded to the Member from the Member's
after-tax contributions for such year, if any (together with
any investment gain).
(2) If any excess remains, it will be taken from the Member's
elective pre-tax contributions for such year, if any, that are
not eligible for an Employer matching contribution and either
held by the Plan to be applied as an elective pre-tax
contribution for the Member in the following year or refunded
to the Member (together with any investment gain).
(3) If any excess remains, it will be allocated proportionately
between the Member's remaining elective pre-tax contributions,
if any, and Employer matching contributions, if any, for such
year, with the elective pre-tax contribution portion either
applied as an elective pre-tax contribution for the Member in
the following year or refunded to the Member (together with
any investment gain) and the Employer matching contribution
portion forfeited and applied to reduce future Employer
matching contributions hereunder.
(4) If any excess remains, it shall be forfeited from any other
Employer contributions made for such Member for such year and
applied to reduce future Employer contributions hereunder.
(5) If any excess remains attributable to another Affiliated
Employer's defined contribution plan, such excess shall be
disposed of in accordance with such other plan.
To the extent that the Committee determines that contributions not yet
made to the Plan on behalf of Members would cause an excess hereunder if
actually made to the Plan, the Committee may apply the above limitations
prospectively to limit the contribution amount actually receivable by the Plan
for such Member.
ARTICLE XII
Top-Heavy Requirements
12.1 Top-Heaviness and Plan Aggregation:
a. Determination Of Top-Heaviness: Subject to b. of this Section, this
Plan will be considered to be top-heavy in any Plan Year if the aggregate value
of the account balances of key Employees hereunder is greater than sixty percent
(60%) of the aggregate value of all account balances hereunder. For purposes of
determining whether such top-heaviness exists in any such Plan Year the
following provisions shall be applicable:
(1) A key Employee is any individual (whether or not deceased)
who, at any time during the five (5) Plan Years immediately preceding
the current Plan Year, was:
(i) an officer of the Employer or Affiliated Employer
having an annual compensation from the Employer
and/or Affiliated Employer (as reported on income tax
form W-2 or its equivalent) greater than Fifty
Percent (50%) of the defined benefit plan dollar
limitation in effect under Code Section 415(b)(1)(A)
for any such Plan Year (except that no more than
fifty (50) Employees or, if less, the greater of
three (3) and ten percent (10%) of the Employees,
shall be treated as officers), or
(ii) one of the ten (10) Employees having an annual
compensation from the Employer and/or Affiliated
Employer (as reported on income tax form W-2 or its
equivalent) greater than the defined contribution
plan dollar limitation in effect under Code Section
415(c)(1)(A) and owning (or considered as owning
under Code Section 416(i)(1)) both more than a
one-half percent (1/2%) interest and the largest
interests in the Employer, or
(iii) a five percent (5%) owner of the Employer (taking
into account ownership he would be considered to have
under Code Section 416(i)(1)), or
(iv) a one percent (1%) owner of the Employer (taking into
account ownership he would be considered to have
under Code Section 416(i)(1)) having annual
compensation from the Employer and/or an Affiliated
Employer during any calendar year (as reported on
income tax Form W-2 or its equivalent) of more than
One Hundred Fifty Thousand Dollars ($150,000).
The term "compensation" as used above in this paragraph (1)
shall have the same meaning as in Code Section 415(c)(3), without
regard to Code Sections 125, 402(a)(8), and 402(h)(1)(B), and Code
Section 403(b) in the case of contributions made by an Affiliated
Employer under a salary reduction agreement. Thus "compensation"
includes taxable income reported on form W-2 (or its equivalent) plus
salary reduction amounts under said Code Sections.
Any Employee who is not a key Employee is a nonkey Employee.
(2) For purposes of this Section, if a former Employee has not
performed any services for the Employer at any time during the
five (5) Plan Years immediately preceding the current Plan
Year, any account balance remaining hereunder for such former
Employee shall not be taken into account. Also, any account
balance attributable to deductible employee contributions
(under Code Section 219) or attributable to a rollover
initiated by an Employee from the plan of an employer that is
not an Affiliated Employer shall not be taken into account
under this Section.
(3) The value of any account balance shall be determined as of the
most recent Valuation Date within the preceding Plan Year,
except that in the first Plan Year hereunder such account
balance shall be determined as of the most recent Valuation
Date within such first Plan Year. Such value shall include any
contributions allocable as of such date.
(4) The value of any account balance shall be increased to include
any payment thereof made hereunder prior to the Valuation Date
as of which such value is being determined, provided any such
payment was made within the five (5) Plan Years immediately
preceding the current Plan Year. If an account balance has
been fully paid out prior to such Valuation Date, but within
the five (5) Plan Years immediately preceding the current Plan
Year, the amount thereof shall be taken into account, except
that such amount shall not be taken into account hereunder if
the paid out amount was either (i) rolled over or transferred
to another plan of the Employer or Affiliated Employer or (ii)
rolled over or transferred to any other plan but not at the
direction of the Employee who had accrued such account.
(5) If an Employee or former Employee for whom an account balance
was maintained hereunder died prior to such Valuation Date,
the value, if any, taken into account hereunder with respect
to such individual shall include the sum of any payments made
to him prior to such Valuation Date and within the five (5)
Plan Years immediately preceding the current Plan Year,
together with the amount, as of such Valuation Date, of any
remaining account balance payable hereunder to the Beneficiary
of such individual plus the sum of any payments made to such
Beneficiary hereunder prior to such Valuation Date and within
the five (5) Plan Years immediately preceding the current Plan
Year.
(6) If an Employee or former Employee (whether or not deceased)
with respect to whom an account balance would be taken into
account, as described above, was previously a key Employee,
but as of the last day of the immediately preceding Plan Year
was no longer a key Employee, then no account balance or
payments thereof with respect to him or his Beneficiary shall
be taken into account in making the top-heavy determinations
described in this Section.
(7) The top-heavy status of this Plan, including the
identification of key Employees, will be determined as of each
Plan Year's determination date, which shall be (i) as to the
first Plan Year, the last day of such year and (ii) as to each
subsequent Plan Year, the last day of the immediately
preceding Plan Year.
b. Aggregation With Other Plans: The aggregation of this Plan
with other plans for purposes of determining top-heavy status shall be in
accordance with the following:
(1) Required Aggregation: If a key Employee under this Plan also
participates in another plan of the Employer or Affiliated
Employer which is qualified under Code Section 401(a) or which
is a simplified employee pension plan under Code Section
408(k), or if this Plan and another plan must be aggregated so
that either this Plan or the other plan will meet the
antidiscrimination and coverage requirements of Code Section
401(a)(4) or 410, then this Plan and any such other plan will
be aggregated for purposes of determining top heaviness. This
Plan will automatically be deemed top-heavy if such required
aggregation of plans is top-heavy as a group and will
automatically be deemed not top-heavy if such required
aggregate of plans is not top-heavy as a group.
(2) Permissive Aggregation: Any other plan of the Employer or
Affiliated Employer which is qualified under Code Section
401(a) or which is a simplified employee pension plan under
Code Section 408(k), and which is not in the required
aggregation referenced in (1) above, may be aggregated with
this Plan (and with any other plan(s) in the required
aggregation group in (1) above) for purposes of determining
top heaviness if such aggregation would continue to meet the
antidiscrimination and coverage requirements of Code Sections
401(a)(4) and 410. This Plan will automatically be deemed not
top-heavy if such permissive aggregation of plans is not
top-heavy as a group.
(3) Determining Aggregate Top-Heavy Status: The top-heavy status
of the plans as a group is determined by aggregating the
plans' respective top-heavy determinations that are made as of
determination dates that fall within the same calendar year.
12.2 Effects Of Top-Heaviness: If this Plan becomes top-heavy, the
following special provisions shall apply except (i) in the case of an Employee
hereunder who is also covered by another top-heavy qualified defined
contribution plan of an Affiliated Employer, the top-heavy minimum allocation in
a. below shall not apply if the top-heavy minimum allocation under such other
plan is applied to such Employee thereunder, and (ii) in the case of an Employee
hereunder who is also covered by a top-heavy qualified defined benefit plan of
an Affiliated Employer, the top-heavy minimum allocation in a. below shall not
apply if the top-heavy minimum benefit under such other plan is applied to such
Employee thereunder, but if such top-heavy minimum benefit is not applied to
such Employee, then the top-heavy minimum allocation in a. below shall be
applied except that the percentage shall be five percent (5%).
a. Minimum Allocation: If any Employee is covered under this Plan
during any Plan Year when the Plan is top-heavy, he shall, during such Plan
Year, receive an allocated Employer contribution (subject to the vesting
requirements of this Plan and other than an elective contribution under Code
Section 401(k)) at least equal to a percentage of his considered compensation
(defined below) for such Plan Year, which percentage shall be the lesser of:
(i) three percent (3%), and
(ii) the actual percentage that the allocation of Employer
contributions and forfeitures, including elective
contributions under Code Section 401(k), received for such
Plan Year by the key Employee receiving the largest such
allocation, represented as a percentage of such key Employee's
considered compensation (defined below).
An Employee's considered compensation is the amount of compensation he
received from the Employer for such Plan Year (not in excess of the dollar
limitation in Section 2.2(f) hereof) reportable on income tax Form W-2 or its
equivalent.
b. Adjustments To Code Section 415 Limits: If this Plan is top-heavy
during any Plan Year, the combined plan limitations of Code Section 415, as
described in Section 11.1 hereof, shall be applied for such Plan Year by
substituting "One Hundred Percent (100%)" for "One Hundred Twenty-Five Percent
(125%)" wherever the latter term appears in said Section 11.1 hereof.
ARTICLE XIII
Administration
13.1 Appointment Of Committee: Responsibility for administration of
this Plan shall be with the Corporation, which shall be the Plan Administrator
hereunder. The Corporation, as Plan Administrator, shall appoint a Committee
consisting of at least three (3) persons who shall assist the Plan Administrator
in the administration of this Plan, but who shall have no responsibility for the
management or investment of Plan assets. All action taken by the Committee shall
be deemed actions taken by the Plan Administrator and the Plan Administrator
shall, alone, have fiduciary responsibility in connection with such actions,
except with respect to willful misconduct or gross negligence. All usual and
reasonable expenses of the Committee may be paid in whole or in part by the Plan
Administrator, and any expenses not paid by the Plan Administrator shall be paid
by the Trustee out of the principal or income of the Trust. The members of the
Committee shall not receive compensation with respect to their services for the
Committee. The members of the Committee shall serve without bond or security for
the performance of their duties hereunder unless the applicable law makes the
furnishing of such bond or security mandatory or unless required by the Plan
Administrator. The Plan Administrator may pay the premiums on any bond secured
under this Section including the purchase of fiduciary liability insurance for
any person who becomes a fiduciary under this Plan.
13.2 Committee Powers And Duties: The Committee shall have such powers
as may be necessary to discharge its duties hereunder, including, but not by way
of limitation, the following powers and duties:
a. to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any benefits
hereunder;
b. to prescribe rules for the operation of the Plan;
c. to receive from the Employer and from Employees such
information as shall be necessary for the proper administration of the Plan;
d. to employ an independent qualified public accountant to
examine the books, records, and any financial statements and schedules which are
required to be included in the annual report;
e. to file with the appropriate government agency (or agencies)
the annual report, plan description, summary plan description, and other
pertinent documents which may be duly requested;
f. to file such terminal and supplementary reports as may be
necessary in the event of the termination of the Plan;
g. to furnish each Employee and each Beneficiary receiving
benefits hereunder a summary plan description explaining the Plan;
h. to furnish any Employee or Beneficiary, who requests in
writing, statements indicating such Employee's or Beneficiary's total account
balances and nonforfeitable benefits, if any;
i. to furnish to an Employee a statement containing information
contained in a registration statement (Schedule SSA) required by Section 6057(a)
(2) of the Code prior to the time prescribed by law to file such registration if
such statement contains information regarding the Employee;
j. to maintain all records necessary for verification of
information required to be filed with the appropriate government agency
(or agencies);
k. to report to the Trustee all available information regarding
the amount of benefits payable to each Employee, the computations with respect
to the allocation of assets, and any other information which the
Trustee may require in order to terminate the Plan;
l. to delegate to one or more of the members of the Committee
the right to act in its behalf in all matters connected with the administration
of the Plan and Trust;
m. to delegate to any individual(s) such of the above powers and
duties as the Committee deems appropriate; and
n. to appoint or employ for the Plan any agents it deems
advisable, including, but not limited to, legal counsel.
The Committee shall have no power to add to, subtract from or modify
any of the terms of the Plan, nor to change or add to any benefits provided by
the Plan, nor to waive or fail to apply any requirements of eligibility for
benefits under the Plan. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Employees in similar circumstances.
A majority of the members of the Committee shall constitute a quorum
for the transaction of business. No action shall be taken except upon a majority
vote of the Committee members. An individual shall not vote or decide upon any
matter relating solely to himself or vote in any case in which his individual
right or claim to any benefit under the Plan is particularly involved. If, in
any case in which a Committee member is so disqualified to act, and the
remaining members cannot agree, the Board of Directors of the Corporation will
appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.
13.3 Claims Procedure: The Committee may prescribe procedures for
obtaining benefits and is required to provide a notice in writing to any person
whose claim for benefits under this Plan has been denied, setting forth (1) the
specific reasons for such denial, (2) the specific reference to pertinent Plan
provisions on which the denial is based, (3) a description of any additional
material or information necessary to the claimant to perfect the claim and an
explanation of why such material or information is necessary, and (4) an
explanation of the Plan's claim review procedure as described below, including
the name and address of the party to whom an appeal should be sent.
A claimant has the right to appeal a denial of claim by written
application to the Committee within sixty (60) days of notice of denial or, if
no such notice has been given, at the end of the expiration of a reasonable
period of time after the claim was filed. The claimant, or a duly authorized
representative, may review pertinent documents and may submit issues and
comments in writing to the Committee.
After the Committee reviews the claims appeal, a final decision shall
be made and communicated to the claimant within sixty (60) days of receipt of
the appeal by the Committee, unless special circumstances require an extension.
Such extension cannot extend beyond one hundred twenty (120) days after receipt
of the appeal by the Committee. The communication shall be set forth in writing
in a manner calculated to be understood by the claimant and shall identify the
reasons for the denial and shall reference any pertinent Plan provisions upon
which the denial is based.
13.4 Committee Procedures: The Committee shall adopt such bylaws as it
deems desirable. The Committee shall elect one of its members as chairman and
shall elect a secretary who may, but need not, be a member of the Committee. The
Committee shall advise the Trustee of such elections in writing. The Secretary
of the Committee shall keep a record of all meetings and forward all necessary
communications to the Trustee.
13.5 Authorization Of Benefit Payments: The Committee shall issue
directions to the Trustee concerning all benefits which are to be paid from the
Trust Fund pursuant to the provisions of the Plan. The Committee shall keep on
file, in such manner, as it may deem convenient or proper, all reports from the
Trustee.
13.6 Payment Of Expenses: All expenses incident to the administration,
termination or protection of the Plan and Trust, including but not limited to,
actuarial, legal, accounting, and Trustee's fees, shall be paid by the Trust
unless paid by the Employer and/or the Employees.
13.7 Unclaimed Benefits: Any unclaimed benefit held hereunder for a
former Member who cannot be found, after reasonable efforts have been made by
the Committee, may be applied to pay plan expenses or to offset any Employer
contributions hereunder, provided that if the Member duly makes a subsequent
claim for such benefit, the Employer will make a special contribution equal to
the amount that was so applied to pay expenses or offset Employer contributions
(together with appropriate interest determined by the Committee) and such
special contribution will then be paid hereunder to said Member.
13.8 Indemnity: The Employer indemnifies and saves harmless any member
of the Board of Directors of the Employer and any Employee of the Employer from
and against any and all loss resulting from liability to which any such person
may be subjected by reason of any conduct (except willful or reckless
misconduct) in a fiduciary capacity under this Plan or Trust, or both, including
all expenses reasonably incurred in such person's defense, in case the Employer
fails to provide such defense. The indemnification provisions of this Section
shall not relieve any such person of any liability he may have under ERISA for
breach of a fiduciary duty.
13.9 Investment Committee:
a. Composition of the Investment Committee: The Board of
Directors of the Corporation shall appoint an Investment Committee of three to
five members.
b. Duties: The Investment Committee is responsible for the
following duties under the Plan:
(i) Selecting investment alternatives offered under the Plan, one
of which shall be the Raytheon Common Stock Fund. The
selection of these investment alternatives shall be made in
accordance with section 404(c) of ERISA and with the intent
that the Plan operate as a section 404(c) plan. In addition,
the Investment Committee shall not select as an investment
alternative any investment that would involve a transaction
between the Plan and the Corporation or any Affiliated
Employer or a loan from the Plan to the Corporation or any
Affiliated Employer.
(ii) Selecting a fund for the investment of assets under the Plan
with regard to which a Member or Beneficiary has the
opportunity to exercise control but for which no investment
direction has been provided.
(iii) Receiving investment direction from Members or Beneficiaries.
This responsibility may be delegated to another Plan fiduciary
by the Investment Committee.
(iv) Establishing the procedures required by section
5.4(b)(6)(d)(vii) of the Plan to keep information related to
investment in or exercise of rights associated with the
Raytheon Common Stock Fund confidential and ensuring that such
procedures are sufficient to preserve the confidentiality of
that information.
(v) Establishing a procedure for the appointment of a fiduciary
not affiliated with the Corporation in the event that the
Investment Committee determines that there exists a situation
in which the potential for undue employer influence upon
Members or Beneficiaries exists with regard to the direct or
indirect exercise of shareholder rights associated with Member
or Beneficiary investment in the Raytheon Common Stock Fund.
ARTICLE XIV
Trust Fund
14.1 Establishment Of Trust Fund: A Trust Fund shall be established for
the purpose of receiving contributions, and paying benefits, under this Plan. A
Trustee (or Trustees) shall be appointed under the terms of a trust agreement to
administer the Trust Fund in accordance with the terms of such trust agreement.
14.2 Payment Of Contributions To Trust Fund: All contributions under
this Plan shall be paid to the Trust Fund and shall be held, invested and
reinvested by the Trustee in accordance with the terms of the trust agreement.
All property and funds of the Trust Fund, including income from investments and
from all other sources, shall be retained for the exclusive benefit of
Employees, as provided in the Plan, and shall be used to pay benefits to
Employees or their beneficiaries, or to pay expenses of administration of the
Plan and Trust Fund, except as provided in Section 18.4 hereof.
14.3 Bonding Of Trustee: No Trustee shall be required to furnish any
bond or security for the performance of its powers and duties hereunder unless
the applicable law makes the furnishing of such bond or security mandatory.
ARTICLE XV
Adoption And Withdrawal By Other Organizations
15.1 Procedure For Adoption: Subject to the further provisions of
Section 15.3, any corporation or other organization with employees, now in
existence or hereafter formed or acquired, which is not already an Employer
under this Plan and which is otherwise legally eligible, may, in the future,
with the consent and approval of the Corporation, by formal resolution of its
own board or governing authority, adopt the Plan hereby created and the related
Trust, for all or any classification of persons in its employment, and thereby,
from and after the specified effective date become an Employer under this Plan.
Such adoption shall be accomplished by and evidenced by a formal designation
resolution of the Corporation, and by such formal resolution of the adopting
organization consented to by the Corporation. The adoption resolution may
contain such specific changes and variations in Plan or Trust terms and
provisions applicable to such adopting Employer and its Employees, as may be
acceptable to the Corporation and the Trustee. However, the sole, exclusive
right of any other amendment of whatever kind or extent, to the Plan or Trust is
reserved by the Corporation. The adoption resolution shall become, as to such
adopting organization and its employees, a part of this Plan, as then amended or
thereafter amended, and the related Trust. It shall not be necessary for the
adopting organization to sign or execute the original or the amended Plan and
Trust documents. The effective date of the Plan for any such adopting
organization shall be that stated in the resolution of adoption, and from and
after such effective date such adopting organization shall assume all the
rights, obligations and liabilities of an individual Employer entity hereunder
and under the Trust. The administrative powers and control of the Corporation,
as provided in the Plan and Trust, including the sole right to amendment, and of
appointment and removal of the Committee and the Trustee and their successors,
shall not be diminished by reason of the participation of any such adopting
organization in the Plan and Trust.
15.2 Withdrawal: Any participating Employer by action of its Board of
Directors or other governing authority and notice to the Corporation and
Trustee, may withdraw from the Plan and Trust at any time without affecting
other Employers not withdrawing, by complying with the provisions of the Plan
and Trust. A withdrawing Employer may arrange for the continuation by itself or
its successor, of this Plan and Trust in separate form for its own Employees,
with such amendments, if any, as it may deem proper, and may arrange for
continuation of the Plan and Trust by merger with an existing plan and trust,
and transfer of Trust assets. The Corporation may, in its absolute discretion,
terminate an adopting Employer's participation at any time when in its judgment
such adopting Employer fails or refuses to discharge its obligations under the
Plan.
15.3 Adoption Contingent Upon Initial And Continued Qualification: The
adoption of this Plan and its related Trust by an organization as provided in
Section 15.1 is hereby made contingent and subject to the condition precedent
that said adopting organization meets all the statutory requirements for
qualified plans, including but not limited to Sections 401(a) and 501(a) of the
Code for its employees. The adopting organization shall request an initial
approval letter of determination from the appropriate District Director of
Internal Revenue Service to the effect that the Plan and Trust herein set forth
or as amended before the receipt of such letter, meets the requirements of the
applicable federal statutes for tax qualification purposes for such adopting
organization and its covered employees. Unless such an initial approval letter
is issued, such adoption shall become void and inoperative and any contribution
made by or for such organization shall be promptly refunded by the Trustee.
Furthermore, if the Plan or the Trust in its operation, becomes disqualified for
such purposes for any reason, as to such adopting organization and its
employees, the portion of the Trust Fund allocable to them shall be segregated
as soon as is administratively feasible, pending either the prompt (1)
requalification of the Plan and Trust as to such organization and its employees
to the satisfaction of the Internal Revenue Service, so as not to affect the
continued qualified status thereof as to other Employers, or (2) withdrawal of
such organization from this Plan and Trust and a continuation by itself or its
successor, of its plan and trust separately from this Plan and Trust, or by
merger with another existing plan and trust, with a transfer of said segregated
portion of Trust assets, as provided by Section 15.2, or (3) taking of such
other action as shall be acceptable to the Corporation.
ARTICLE XVI
Amendments
16.1 Right To Amend: The Board of Directors of the Corporation (or
other body duly authorized by such Board) reserves the right to make from time
to time any amendment or amendments to this Plan which do not permit reversion
of any part of the Trust Fund to the Employers except as provided in Section
18.4 and which do not cause any part of the Trust Fund to be used for, or
diverted to, any purpose other than the exclusive benefit of Employees included
in this Plan and which do not, directly or indirectly, reduce any Member's
account balance unless such amendment is required in order to maintain the
Plan's qualified status under Code Section 401(a). Any one of the Corporation's
three selected Vice Presidents (the selected Vice Presidents are: (i) Vice
President, Corporate Relations and Administration, (ii) Vice President, Finance
and Chief Financial Officer, and (iii) Vice President, Secretary and General
Counsel) is also authorized to make, on behalf of the Corporation, any amendment
or amendments to this Plan (or related Trust), provided any such amendment is
for the purpose of: (i) meeting applicable requirements for compliance with the
Code or ERISA or other applicable law where there are either no options as to
the method of compliance or where the costs associated with each of two or more
alternative methods of compliance are generally the same or not significant in
amount as to the selected method of compliance or (ii) simplifying, improving or
clarifying practices or procedures under the Plan or Trust, without
significantly increasing Employer costs.
Upon delivery to an Employer of an executed copy of an amendment
properly authorized and adopted by the Corporation, the Plan as to such Employer
shall be thereupon amended in accordance therewith.
ARTICLE XVII
Withdrawal And Termination
17.1 Employer Withdrawal: An Employer may at any time, by adoption of a
resolution, withdraw from the Plan with respect to any or all of the Employees
employed by said Employer.
Upon an Employer's liquidation, bankruptcy, insolvency, sale,
consolidation, or merger to or with another organization which is not an
Employer hereunder, or upon an adjudication or other official determination of a
court of competent jurisdiction or other public authority pursuant to which a
conservator, receiver, or other legal custodian is appointed for the purpose of
operation or liquidation of an Employer, such Employer (or its successor) will
automatically be withdrawn from this Plan with respect to all of its Employees,
unless the Corporation and such Employer (or its successor) agree to its
continued participation hereunder.
Any such withdrawal of an Employer from this Plan will be carried out
in a manner intended to meet the requirements of Section 401(a) of the Internal
Revenue Code. The Corporation may require that an advance determination letter
be obtained from the Internal Revenue Service approving the terms of any such
withdrawal.
Upon the consolidation or merger of two (2) or more of the Employers
under this Plan with each other, no such withdrawal will occur, but the
surviving Employer or organization shall succeed to all the rights and duties
under the plan and trust of the Employers involved.
17.2 Transfers Of Plan Assets And Plan Mergers: The Plan and Trust
shall not be merged or consolidated with, nor shall any Plan assets or
liabilities be transferred to, any other plan, unless either (i) each
Participant in the Plan (if the Plan then terminated) receives a benefit
immediately after such merger, consolidation, or transfer, which is equal to or
greater than the benefit he would have been entitled to receive immediately
before such merger, consolidation, or transfer (if the Plan had then terminated)
or (ii) the conditions in (i) are deemed to be met due to compliance with the
procedures set forth in Treasury Regulation 1.414(1)-1 regarding plan mergers
and transfers.
17.3 Plan Termination: The Corporation may at any time, by adoption of
a resolution, terminate this Plan with respect to itself and all other Employers
hereunder. This Plan shall automatically terminate if all Employers cease to
exist and no successor continues the Plan.
A partial termination of this Plan will occur if required under the
qualification requirements of Section 401(a) of the Code.
17.4 Suspension And Discontinuance Of Contributions And Plan
Termination: If the Employer decides it is impossible or inadvisable to continue
to make its contributions hereunder, it shall have the power to:
(a) suspend contributions to the Plan; or
(b) discontinue contributions to the Plan; or
(c) terminate the Plan as to its Employees.
Suspension shall be temporary cessation of contributions and such a
suspension which has not ripened into a complete and permanent discontinuance
shall not require any vesting of Individual Accounts.
In the event of a discontinuance of contributions, Employees who become
eligible to enter the Plan subsequent to the discontinuance shall receive no
benefit, and no additional benefits attributable to Employer contributions shall
accrue to any of the Members unless contributions are resumed. After the date of
discontinuance of contributions, the Trust shall remain in existence as provided
in this Section, and the provisions of the Plan and Trust shall remain in force
as may be necessary in the sole opinion of the Committee. A certified copy of
such decision or resolution shall be delivered to the Trustee, and as soon as
possible thereafter, the Trustee shall send or deliver to each Member or
Beneficiary concerned a copy thereof.
17.5 Liquidation Of Trust Fund: Upon termination, or partial
termination, of the Plan, the proportionate interests of the affected Members
and their Beneficiaries shall be liquidated after provision is made for the
expenses of administration, termination and liquidation, except that a Member's
Employer Stock may not be liquidated without the Member's consent unless
required to pay Plan expenses. Thereafter, the Trustee shall distribute as soon
as administratively feasible the amount to the credit of each such Member and
Beneficiary as the Committee shall direct. All such distributions under this
Section will be subject to the restrictions in 11.4 and 11.7 hereof.
ARTICLE XVIII
General Provisions
18.1 Nonguarantee Of Employment: Nothing contained in this Plan shall
be construed as a contract of employment between an Employer and Employee, or as
a right of any Employee to be continued in the employment of an Employer, or as
a limitation of the right of an Employer to discharge any of its Employees, with
or without cause.
18.2 Manner Of Payment: Wherever and whenever it is herein provided for
payments or distributions to be made, whether in money or otherwise, said
payments or distributions shall be made directly into the hands of the Member,
his Beneficiary, his administrator, executor or guardian, as the case may be.
Deposit for the benefit of a Member in any account selected by a Member or
Beneficiary hereunder shall be deemed payment into his hands, and provided
further, that in the event any person otherwise entitled to receive any payment
or distribution shall be a minor or an incompetent, such payment or distribution
may be made to his guardian or other person as may be determined by the
Committee.
18.3 Nonalienation Of Benefits: Benefits payable under this Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, prior to being received by the person
entitled to the benefit under the terms of the Plan. Any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose
of any right to benefits payable hereunder shall be void. The Trust Fund shall
not in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any person entitled to benefits hereunder.
None of the unpaid Plan benefits or Trust assets shall be considered an asset of
the Member in the event of his insolvency or bankruptcy.
Notwithstanding the foregoing, the Committee may approve payment to an
alternate payee based upon any "qualified domestic relations order" as defined
in Code Section 414(p), and a Member may pledge his account, to the extent
allowed under Section 10.2 hereof, as security for a loan made to such Member in
accordance with Section 10.2 hereof and such payment or pledge shall not be
deemed a prohibited alienation of benefits.
18.4 Amounts Returnable To An Employer: In no event shall an Employer
receive any amounts from the Trust, except such amounts, if any, as set forth
below:
a. In the event of a contribution made by an Employer by a mistake of
fact, such contribution may be returned to such Employer within one year after
payment thereof.
b. If an Employer's determination letter issued by the District
Director of Internal Revenue referred to in Section 15.3 hereof is an initial
determination letter as to such Employer and is to the effect that the Plan and
Trust herein set forth or as amended prior to the receipt of such letter do not
meet the requirements of Sections 401(a) and 501(a) of the Code, such Employer
shall be entitled at its option to withdraw, within one year of the receipt of
such letter, all contributions made on and after its effective date, in which
event the Plan and Trust shall then terminate as to such Employer and all rights
of the Employees shall be those as if the Plan had never been adopted.
c. Each contribution hereunder is conditioned upon the deductibility of
such contribution under Section 404 of the Code and shall be returned to an
Employer within one year if such deduction is disallowed (to the extent of the
disallowance).
18.5 Governing Law: This Plan and each of its provisions shall be
construed and their validity determined by the application of the laws of the
State of Texas, except to the extent such law is preempted by Federal statute.
ARTICLE XIX
Fiduciary Provisions
19.1 General Allocation Of Duties: Each fiduciary with respect to the
Plan shall have only those specific powers, duties, responsibilities and
obligations as are specifically given him under the Plan. The Board of Directors
of the Corporation shall have the sole responsibility for authorizing Employer
contributions under the Plan and for terminating the Plan and it shall have the
sole authority to appoint and remove the Trustee or members of the Committee.
However, said Board shall not be liable for any acts or omissions of the Trustee
or be under any obligation to invest or otherwise manage any assets of the Trust
Fund which are subject to the management of the Trustee unless it knows that
said Trustee has committed a breach of the obligations and duties set forth in
ERISA.
Except as otherwise specifically provided, the Committee shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described herein. Except as otherwise specifically provided, the
Trustee shall have the sole responsibility for the management of the assets held
under the Plan. Members shall be responsible for giving investment direction in
accordance with Section 5.4, except to the extent provided in said Section 5.4
that an investment committee is responsible for the investment direction for
Members not making their own investment selections.
It is intended under the Plan that each fiduciary shall be responsible
for the proper exercise of his own powers, duties, responsibilities and
obligations hereunder and shall not be responsible for any act or failure to act
of another fiduciary, except to the extent provided by law or as specifically
provided herein.
19.2 Fiduciary Duty: Each fiduciary under the Plan, shall discharge his
duties and responsibilities with respect to the Plan:
a. solely in the interest of the Plan participants, for the
exclusive purpose of providing benefits to such participants, and their
beneficiaries, and defraying reasonable expenses of administering the
Plan;
b. with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of
a like character and with like aims;
c. the investment committee under Section 13.9 shall diversify
the investments of the Plan not subject to the investment direction of Members
so as to minimize the risk of large losses, unless under the
circumstances it is prudent not to do so; and
d. in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are consistent with
applicable law.
19.3 Fiduciary Liability: A fiduciary shall not be liable in any way
for any acts or omissions constituting a breach of fiduciary responsibility
occurring prior to the date he becomes a fiduciary or after the date he ceases
to be a fiduciary.
19.4 Co-Fiduciary Liability: A fiduciary shall not be liable for
any breach of fiduciary responsibility by another fiduciary unless:
a. he participates knowingly in, or knowingly undertakes to
conceal, an act or omission or such other fiduciary, knowing such act or
omission is a breach;
b. by his failure to comply with Section 404(a)(1) of ERISA in
the administration of his specific responsibilities which give rise to his
status as a fiduciary, he has enabled such other fiduciary to commit a
breach; or
c. having knowledge of a breach by such other fiduciary, he
fails to make reasonable efforts under the circumstances to remedy the breach.
19.5 Delegation and Allocation: Any fiduciary may appoint individuals
or any other agents as it deems advisable and delegate to any of such appointees
any or all of the powers and duties of the fiduciary to the extent allowed under
ERISA. Such appointment and delegation must clearly specify the powers or duties
delegated. Upon such appointment and delegation, the delegating fiduciary shall
have no liability for the acts or omissions of any such delegate, as long as the
delegating fiduciary does not violate its fiduciary responsibility in making or
continuing such delegation.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing instrument comprising E-Systems, Inc. Employee Savings Plan (As
Restated January 1, 1995), E-SYSTEMS, INC., the Corporation, has caused its
corporate seal to be affixed hereto and these presents to be duly executed in
its name and behalf by its proper officers thereunto authorized this day of , 19
.
ATTEST: E-SYSTEMS, INC.
Secretary
Name:
Title:
(CORPORATE SEAL)
<PAGE>
Participation Exhibit
E-Systems, Inc. Employee Savings Plan
(As Restated January 1, 1995)
This Exhibit sets forth below: (i) the specific subsidiaries, affiliates,
divisions, subdivisions, branches or units for which this Plan (or portion
thereof) is maintained, (ii) any employment position entered into in connection
with a business acquisition on or after January 1, 1995, and any employment
position created in connection with such a business acquisition which is to be
covered by this Plan (or portion thereof), (iii) the pre-acquisition service
that was counted as Vesting Service under the Previous Plan prior to January 1,
1995, (iv) the various separately identifiable portions of this Plan, and (v)
prior plans merged into this Plan.
Divisions, Subsidiaries, Branches, Portions of Plan (as
Units,and Affiliates defined in IV below) For
Which Eligible
- -----------------------------------------------------------------
E-Systems Corporate Division ED ME RD
Greenville Division
Noncollective Bargaining Employees ED ME RD
Collective Bargaining Employees ED(1) ME(1) RD EC(2)
Garland Division
Noncollective Bargaining Employees ED ME RD
not covered by the Global Command and
Control Systems (GCCS) contract
Noncollective Bargaining Employees ED ME
covered by the Global Command and
Control Systems (GCCS) contract, effective
as soon as practicable after acceptance of
contract
Collective Bargaining Employees - UAW ED ME(3) RD
Collective Bargaining Employees - UPGWA ED ME(4) RD
Raytheon Aircraft Montek Company(Montek
Division prior to July 1, 1996) ED ME RD
ECI Division
Noncollective Bargaining Employees ED ME RD
Collective Bargaining Employees ED ME(5) RD
Melpar Division through September 10, ED ME RD
1995, and thereafter the Falls Church
Division, excluding employees from
Engineering Research Associates, Inc.
until January 1, 1996 or date of
transfer if later
HRB Systems, Inc. ED ME RD
E-Systems Medical Electronics, Inc. ED ME OD
EMASS, Inc. ED ME(6)
Transportation Management Solutions,Inc. ED ME RD OD
Auto-Trac, Inc. (All employees ED ME RD OD
transferred to Transportation
Management Solutions, Inc. during
1996)
Serv-Air, Inc., but only as a ED ME RD
salaried Employee who transferred
to Serv-Air, Inc. from a position covered by this Plan (or Previous Plan) or who
is employed at (i) Serv-Air, Inc.'s general office location at Greenville,
Texas; or (ii) any field location where Serv-Air, Inc.'s annual program value is
Two Million Dollars ($2,000,000) or more and who is employed in the top
management position at that location or salary grade 29 or above (and for this
purpose, any Employee in Covered Employment at such a field location will not
cease Covered Employment at that location merely because the annual program
value under a contract is renewed at a level below Two Million Dollars
($2,000,000)); or (iii) any Serv-Air, Inc. Information Systems Group field
location on or after March 8, 1996.
Raytheon Aerospace, but only as to ED ME RD
Employees who were Members in Covered
Employment with Serv-Air, Inc. under this
Plan on December 29, 1995 whose employment
was transferred from Serv-Air, Inc. to
Raytheon Aerospace on or after December 30,
1995.
Advanced Power Technologies, Inc., ED ME RD
effective January 1, 1996
Central Texas Airborne Systems, Inc. (CTAS) ED ME
effective as soon as administratively
practicable after June 14, 1996
Electrospace Systems, Inc. (ESI)
Employees not covered by a contract ED ME RD
under the Service Contract Act,
effective as soon as administratively
practicable after June 14, 1996 as to ED
and ME and January 1, 1997 as to RD
Employees covered by a contract under ED OD
the Service Contract Act, effective
October 1, 1996
(1) Effective September 25, 1995
(2) Prior to September 25, 1995
(3) Effective April 8, 1996
(4) Effective March 25, 1996
(5) Effective April 15, 1996
(6) Effective as soon as practicable after August 5, 1996
No employees covered by a collective bargaining agreement entered into after the
Effective Date will be eligible for any portion of this Plan unless the Employer
and the collective bargaining unit have agreed to provide covered hereunder, in
which case said employees will be eligible for such coverage and this exhibit
will be modified to reflect such coverage.
Employment positions with any of the above entities entered into or created in
connection with any business acquisitions on or after January 1, 1995 will be
covered by this Plan (or portion thereof) only if so provided in II below.
In order to allow participation as soon as practicable of any Employee of an
acquired business who enters Covered Employment as a result of such business
acquisition, the Committee may temporarily determine contributions for any such
new Member hereunder on any reasonable and consistent basis (taking into
consideration such payroll information as is then reasonably available) until
such time as the Committee is able to obtain the exact payroll information
necessary for determining contributions in accordance with the contribution
provisions of this Plan.
The one-loan-only restriction in Section 8.2c of this Plan will not apply to any
loans that are part of a Participant's rollover to the Rollover Account under
this Plan in connection with the acquisition of CTAS and ESI referenced in the
above table. The one-loan-only restriction will apply to any new loan requests
originated by such a Participant under this Plan, disregarding any loans rolled
over.
II. Employment Positions With Any
Entities Listed in I. Above
Entered Into or Created In
Connection With the Following Portions of Plan (as
Business Acquisitions On or defined in IV below)
After January 1, 1995: For Which Eligible:
None as of January 1, 1995.
III. Business Acquisitions with Respect to which Pre-Acquisition Service
was Counted as Vesting Service under Previous Plan Prior to January 1,
1995:
Acquisition of Engineering Research Associates, Inc., in 1989
Acquisition of HRB Systems, Inc. in 1990
Acquisition of business (which became part of Transportation
Management Solutions, Inc.) from Westinghouse Electric Corporation in 1994
Acquisition of Fluid Controls Division (which became part of Montek
Division) from BW/IP International, Inc. in 1994
Acquisition of Auto-Trac, Inc. in 1994
Acquisition of Advanced Archival Products, Inc. (which became part of
EMASS, Inc. in 1994)
Acquisition of APTI, Inc. in 1994
Acquisition of Image Data (which became part of E-Systems Medical
Electronics, Inc.) in 1994
Acquisition of Advanced Video Products, Inc. in 1992 (employees became
employed by E-Systems Medical
Electronics, Inc. in 1995)
IV. Portions of Plan are as follows:
ED means Employee Deferrals on pre-tax basis ME means Matching Employer
Contributions RD means Regular Discretionary Employer Contributions OD
means Optional Discretionary Employer Contributions EC means Employee
Contributions on after-tax basis
V. Prior Plans Merged into this Plan:
Advanced Video Products, Inc. 401(k) Plan, merged in 1995
Advanced Archival Products Profit Sharing Plan, merged in 1995
EXHIBIT 4.7
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR PUERTO RICO BASED EMPLOYEES
Provisions in Effect as of January 1, 1996
ARTICLE I - PREAMBLE
The Raytheon Savings and Investment Plan for Puerto Rico based
employees, which became effective January 1, 1995, 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, 1995. It is intended that the Plan will comply
with all of the requirements for a qualified profit sharing plan under Section
3165(e) of the Revenue Code of Puerto Rico ("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, ss.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 October 1, 1994, through December
31, 1994, may join the Plan as of the first Pay Period in January, 1995, 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 January 1, 1995, 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 or any subsequent Pay Period selected by the
Eligible Employee during the same Period of Service. Each Eligible Employee
whose Reemployment Commencement Date is on or after January 1, 1995, may join
the Plan as of the first Entry Date next following said Reemployment
Commencement Date.
2.3. Procedure for Joining the Plan -- Each Eligible Employee who meets
the requirements of Section 2.1 or Section 2.2 may join the Plan 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 Participant's Eligible Compensation shall be
reduced as an Elective Deferral in accordance with the requirements of Section
3.2, subject to the limitations in the Code referred to 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 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 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 fifteen percent (15%)
but no Participant may defer more than $7,000 for any Plan Year.
3.3. Revenue Code of Puerto Rico Requirements -- All Elective Deferrals
and Matching Contributions are subject to all of the nondiscrimination tests
established in Section 3165 of the Code, including in particular the limitations
in Section 3165(c)(3).
3.4. Reinstatement of Reduced Amounts -- Any reduction effected
pursuant to Section 3.3 will remain in effect for the remainder of the Plan Year
in which the reduction occurs and will not be automatically reinstated. A
Participant whose Elective Deferral has been reduced may elect to increase his
or her Elective Deferral effective as of any 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.
3.5. Change in Elective Deferrals -- Except as provided in Sections 3.3
and 3.4, any Participant may change his or her Elective Deferral percentage to
increase or decrease said percentage by notifying Fidelity, such change to take
effect as of the next administratively feasible Pay Period.
3.6. Voluntary Reduction of Elective Deferral to Zero --Notwithstanding
the notice requirements specified in Section 3.5, any Participant may elect to
reduce the level of the Participant's Elective Deferral to zero as of the
beginning of any pay period. The reduction will take effect as soon as
practicable following telephone notification by the Participant to Fidelity. A
Participant who has reduced his or her Elective Deferral to zero may again make
Elective Deferrals as of the next administratively feasible Pay period
subsequent to telephone notification to Fidelity.
3.7. Matching Contributions -- For each Plan Year, commencing on or
after January 1, 1995, subject to limitations imposed by the 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, the 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,
to an annual maximum of three percent (3%) of the Participant's Eligible
Compensation for the Plan Year, will be paid into the Participant's Account.
3.8. Forfeitures -- In the event that a Participant incurs a Severance
of Service prior to attaining a Nonforfeitable right to the Participant's
Matching Contribution, the Matching Contribution will be forfeited as of the
Severance from Service Date. Forfeitures of Matching Contributions will be used
to reduce future contributions of the Companies to the Plan. A forfeiture will
occur as of the first day of the month immediately following a month in which a
Severance from Service occurs and results in a forfeiture. In the event that a
Period of Severance is credited to a Participant's Period of Service pursuant to
Section 5.3(b), any forfeiture of a Matching Contribution resulting from said
Period of Severance will be restored to the Participant's Matching Contribution
Account. When a prior Period of Service is reinstated, forfeitures related to
said prior Period of Service will be restored to the extent required by law.
3.9. Rollover Contributions --
(a) Effective January 1, 1995, Participants may transfer
into the Plan qualifying rollover amounts received from other qualified trusts
subject to Section 3165 of the Code. 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 a qualified trust, subject, however, to (v) below
where applicable;
(ii) the amount of such rollover contributions shall
not exceed any applicable limitation set forth in 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 (a) of Section 3.9 shall be credited to the
Participant's Rollover Contribution Account. Rollover contributions
will be invested upon receipt by the Trustee;
(vii) no rollover contribution will be accepted
unless (A) the Employee on whose behalf the rollover contribution will
be made is either a Participant or has notified the Administrator that
he intends to become a Participant on the first date on which he is
eligible therefor; and (B) all required information, including
selection of specific investment accounts, is provided to Fidelity.
When the rollover contribution has been deposited, any further change
in investment allocation of future deferrals or transfer of account
balances between investment funds will be effected through the
procedures set forth in Sections 4.2 and 4.3.
(viii) Under no circumstances shall the Administrator
accept as a rollover contribution amounts which have previously been
subject to Puerto Rico income tax.
3.10. 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 (1) year after the making of the Matching
Contribution; or
(b) which would otherwise be an excess contribution
under the Code, to the extent permitted to avoid penalties on such
excess contributions.
3.11. Corrective Qualified Non-Elective Contributions -- In order to
satisfy (or partially satisfy) the non-discrimination tests established in
Section 3165 of the Code, the Company in its sole discretion may make a
Corrective Qualified Non-Elective Contribution to the Plan. Any such Corrective
Qualified Non-Elective Contribution shall be allocated to the Accounts of those
Participants who are non-highly compensated Employees for the Plan Year with
respect to which such Corrective Qualified Non-Elective Contribution is made,
beginning with the Participant with the lowest compensation for such Plan Year
and allocating the maximum amount permissible under Section 3.2 before
allocating any portion of such Qualified Non-Elective Contribution to the
Participant with the next lowest compensation. Such allocations shall continue
until the Plan satisfies the non-discrimination tests in Section 3165 of the
Code or until the amount of such Corrective Qualified Non-Elective Contribution
is exhausted.
The Company, in its sole discretion, may include all or a portion of
the Corrective Qualified Non-Elective Contributions for a Plan Year in aggregate
401(k) contributions taken into account in applying the non-discrimination tests
in Section 3165 of the Code, provided that the requirements of Treasury
Regulation section 1.401(k)-1(b)(5) are satisfied.
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 (not subject to
additional limitations with respect to transfer and
withdrawal);
Fund D - a stock index fund designated by the Administrator;
Fund E - a balanced fund designated by the Administrator;
Fund F - a growth fund, designated by the Administrator,
investing primarily in equities of companies of all
types and sizes;
Fund G - a growth fund, designated by the Administrator,
investing primarily in equities of well-known and
established companies.
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 also 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, E, F and G 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, E, F and G 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
5.1. Employee, Rollover Contribution and Corrective Qualified
Non-Elective Contribution Accounts -- Each Participant shall have a
Nonforfeitable right to any amounts in the Participant's Employee, Rollover
Contribution and Corrective Qualified Non-Elective 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; 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; or
(c) The Participant's Retirement, death, Disability or
attainment of Normal Retirement Age.
5.3. Break in Service Rules
(a) Periods of Service -- Subject to any requirements of the
Code, in determining the length of a Period of Service, the Administrator shall
include all Periods of Service, except a Period of Service prior to a Period of
Severance of twelve (12) months or more, unless subsequent to said Period of
Severance the Participant completes a Period of Service of at least twelve (12)
months and, if the Participant does not have a Nonforfeitable right to his or
her Matching Contribution Account, the Period of Severance was less than said
prior Period of Service. The Administrator shall also include Periods of Service
prior to Periods of Severance of five (5) years or less.
(b) Periods of Severance -- Subject to any requirements of
the Code, 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 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 Withdrawal - Employee Account -- While in a Period of
Service, a Participant may withdraw all or a portion of the Participant's
Account upon attainment of age 59 1/2 or, in the case of an immediate and heavy
financial need within the meaning of Section 3165(c)(2)(B)(vi) of the Code.
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, C, D, E, F and G and such
other funds as may be established by the Administrator, will be made in cash.
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. 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, C, D, E, F and G
will be made in cash.
6.3. Documentation Required 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.
6.4. Redeposits Prohibited -- No amount withdrawn pursuant to Section
6.l and Section 6.2 may be redeposited in the Plan.
6.5. Distribution --
(a) Distribution of the Participant's Employee Account, Rollover Contribution
Account, Corrective Qualified Non-Elective 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 13.46) or Layoff (as defined in Section
13.26) of the Participant or, to an alternate payee, upon issuance of a
Qualified Domestic Relations Order. 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 (or Beneficiary, if Participant is deceased) to Fidelity.
Distribution of the amounts in said accounts in the funds designated in Funds A,
B, C, D, E, F and G, and such other funds as may be established by the
Administrator, will be made in cash. 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.
(b) 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.
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: (l) 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 under the Plan can be ascertained or the earliest date on which the
Participant is located.
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, Rollover
Contribution Account and Corrective Qualified Non-Elective 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. Participants who have incurred a Severance from Service will not
be eligible for a Plan loan.
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, Rollover
Contribution Account and Corrective Qualified Non-Elective Contribution Account,
and the Nonforfeitable portion of Participant's Matching Contribution Account
balances will be permitted. In addition, limits imposed by the Code and any
other requirements of applicable statute or regulation will be applied.
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 as of any
date during the period July 1 through December 31 thereafter; the rate published
on the first business day of December will apply to loans which are effective
during the period January 1 through June 30 thereafter.
7.8. Effect Upon Participants 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;
Corrective Qualified Non-Elective Contributions 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, payments may be made directly to Fidelity on a monthly
basis. If payments are not made in a timely manner, the amount of any unpaid
principal will be deducted from the distribution made to the Participant (or
from the Participant's Account if retained in the Plan). 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 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.
ARTICLE VIII - LIMITATIONS
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 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 Section1.415-2. If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12-consecutive-month
period, the Maximum Permissible Amount for the short Limitation Year will be the
lesser of (1) $30,000 (or such larger amount determined by the Commissioner of
Internal Revenue or by statute) multiplied by the following fraction:
number of months in the
short Limitation Year
-----------------
12
or (2) twenty-five percent (25%) of the Participant's compensation for the short
Limitation Year.
8.2. Coordination of Annual Additions -- Notwithstanding any other
provision of this Plan, if any Annual Additions are allocated under other
qualified defined contribution plans maintained by the Employer with respect to
a Participant of this Plan, and the Participant's Elective Deferral or Matching
Contribution that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount specified in Section
8.1, the amount contributed or allocated will be reduced so that the Annual
Additions under all such plans for the Limitation Year will equal said Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other qualified defined contribution plans in the aggregate are equal
to or greater than the Maximum Permissible Amount, as specified in Section 8.1,
any amount contributed or allocated to the Participant's account for the
Limitation Year will be treated as an Excess Amount.
8.3. Coordination with Limitation on Benefit from All Plans --
Notwithstanding the foregoing, the otherwise permissible Annual Addition under
this Plan for any Participant may be further reduced to the extent necessary, as
determined by the Administrator, to prevent disqualification of the Plan under
the Code. In addition, 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 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 LimitationYears.
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 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 - 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 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 of 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 the Raytheon Employee Benefit Administration
Committee (the "Committee") which shall be the Administrator and Named Fiduciary
for purposes of the Retirement Act. The Committee shall consist of three or more
individuals appointed by the Vice President, Human Resources of Raytheon
Company, or his delegate, and 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 Committee shall be conclusive and binding on all persons. The Committee's
address is Raytheon Employee Benefits Administration Committee, 141 Spring
Street, Lexington, MA 02173, Attention: Manager, Corporate Benefits.
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 financial, tax and legal
officers of the Company or of Raytheon Company.
(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 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 l. Claims with respect to an Account should be filed by a claimant
as soon as practicable after claimant knows or should know that a dispute has
arisen with respect to an Account, but at least thirty (30) days prior to the
claimant's actual retirement date or, if applicable, within sixty (60) days
after the death, Disability or Severance from Service of the Participant whose
account is at issue, by mailing a copy of the claim to the Benefits and Services
Department, Raytheon Company, 141 Spring Street, Lexington, Massachusetts 02173.
Step 2. In the event that a claim with respect to an Account is wholly
or partially denied by the Administrator, the Administrator shall, within ninety
(90) days following receipt of the claim, so advise the claimant in writing
setting forth: the specific reason or reasons for the denial; specific reference
to pertinent Plan provisions on which the denial is based; a description of any
additional material or information necessary for the claimant to perfect the
claim; an explanation as to why such material or information is necessary; and
an explanation of the Plan's claim review procedure.
Step 3. Within sixty (60) days following receipt of the denial of a
claim with respect to an Account, a claimant desiring to have the denial
appealed shall file a request for review with the Administrator by mailing a
copy thereof to the address shown in Step 1.
Step 4. Within thirty (30) days following receipt of a request for
review, the Administrator shall provide the claimant a further opportunity to
present his or her position. At the Administrator's discretion, such
presentation may be through an oral or written presentation. Prior to such
presentation, the claimant shall be permitted the opportunity to review
pertinent documents and to submit issues and comments in writing. Within a
reasonable time following presentation of the claimant's position, which usually
should not exceed thirty (30) days, the Administrator shall inform the claimant
in writing of the decision on review setting forth the reasons for such decision
and citing pertinent provisions in the Plan.
The Administrator is the fiduciary to whom the Plan grants full
discretion, with the advice of counsel, to interpret the Plan; to determine
whether a claimant is eligible for benefits; to decide the amount, form and
timing of benefits; and to resolve any other matter under the Plan which is
raised by a claimant or identified by the Administrator. All questions arising
from or in connection with the provisions of the Plan and its administration,
not herein provided to be determined by the Board of Directors, shall be
determined by the Administrator, and any determination so made shall be
conclusive and binding upon all persons affected thereby.
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 the Code or
any other provision of the Laws of Puerto Rico prohibit the granting of immunity
to Fiduciaries from liability for any responsibility, obligation, or duty
imposed thereunder, 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 Company reserves the
right at any time or times, by action of its Board of Directors or authorized
officer, 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.
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 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.
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 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 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. The Trustee shall make payments in cash.
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 Section 3165 of the Code as that
section exists at the time the Plan is established. If the Secretary of the
Treasury of Puerto Rico 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 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 non-vested 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.
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 Puerto Rico.
ARTICLE XIII - DEFINITIONS
The following terms have the meaning specified below unless the context
indicates otherwise:
13.1. "Account" means the entire interest of a Participant in the
Trust. A Participant's Account shall consist of an Employee Account, a Matching
Contribution Account and, if applicable, a Rollover Contribution
Account and Corrective Qualified Non-Elective Contribution Account.
13.2. "Administrator" means Raytheon Company.
13.3. "Annual Addition" means a Participant's Matching Contribution
and the Participant's Elective Deferral (and, if applicable, a Corrective
Qualified Non-Elective Contribution) 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 "Code" means the Puerto Rico Tax Code.
13.10. "Company" means Raytheon Catalytic Inc. but shall not include
a Division, Operation or similar cohesive group of Raytheon Company excluded
by the Board of Directors of Raytheon Company.
13.11. "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.
13.12. "Corrective Qualified Non-Elective Contribution Account" means
that portion of a Participant's Account which is attributable to corrective
qualified non-elective contributions received pursuant to Section 3.11,
adjustments for withdrawals and distributions and the earnings from losses
attributable thereto.
13.13. "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.
13.14. "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.
13.15. "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.
13.16. "Elective Deferral" means a voluntary reduction of
Participant's compensation in accordance with Section 3.2 hereof.
13.17. "Eligible Compensation" means the base pay, supervisory
differentials, shift premiums and, effective January 1, 1985, sales commissions,
excluding all other earnings from any source.
13.18. "Eligible Employee" means any Employee on a Puerto Rico based
Salaried or Designated Hourly Payroll of the Company, excluding Employees in
cooperative studies and intern programs and a person who is an Employee solely
by reason of being a leased Employee.
13.19. "Employee" means any person performing compensated services
for the Employer who meets the definition of "Employee" for income tax
withholding purposes under the Code.
13.20. "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.
13.21. "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 United States Internal Revenue Code.
13.22. "Employment Commencement Date" is the date on which the
Employee first performs an Hour of Service with the Employer.
13.23. "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.
13.24. "Entry Date" means the first Pay Date in each calendar month.
13.25. "Fidelity" means Fidelity Investments, the recordkeeper for
the Plan.
13.26. "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.
13.27. (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.
13.28. "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.
13.29. "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.
13.30. "Matching Contribution" means contribution made to the Trust
in accordance with Section 3.7 hereof.
13.31. "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.
13.32. "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.
13.33. "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.
13.34. "Nonforfeitable" means an unconditional right to an Account
balance or portion thereof determined as of the applicable date of determination
under this Plan.
13.35. "Normal Retirement Age" means the Participant's sixty-fifth
(65th) birthday.
13.36. "Participant" means an individual who is enrolled in the Plan
pursuant to Article III and has not withdrawn the entire amount of his or he
Account.
13.37. "Pay Period" means a scheduled period for payment of wages or
salaries.
13.38. "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. For purposes of determining a Period of
Participation, participation in the Raytheon Savings and Investment Plan, the
Raytheon Savings and Investment Plan for Specified Hourly Payroll Employees, and
the Raytheon Employees Savings and Investment Plan shall be considered as
participation in this Plan.
13.39. "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.
13.40. "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.
13.41. "Plan" means the Raytheon Savings and Investment Plan for
Puerto Rico Based Employees as amended from time to time.
13.42. "Plan Year" means a calendar year, or a portion thereof
occurring prior to the termination of the Plan.
13.43. "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.
13.44. "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.
13.45. "Retirement Act" means the Employee Retirement Income Security
Act of 1974, including any amendments thereto.
13.46. "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.
13.47. "Salaried Payrolls" means the nonexempt salaried and the exempt
salaried payrolls which are processed in the United States.
13.48. "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.
13.49. "Severance from Service Date" means the earlier of:
(a) the date on which an Employee quits, retires, is
discharged, or dies; or
(b) except as provided in paragraphs (c) and (d) hereof, the
first anniversary of the first date of a period during which an Employee is
absent for any reason other than quit, retirement, discharge or death, provided
that, on an equitable and uniform basis, the Administrator may determine that,
in the case of a layoff as the result of a permanent plant closing, the
Administrator may designate the date of layoff or other appropriate date prior
to the first anniversary of the first date of absence as the Severance From
Service Date; or
(c) in the case of an Authorized Military Leave of Absence
from which the Employee does not return prior to expiration of recall rights,
"Severance from Service Date" means the first day of absence because of the
leave; or
(d) in the case of an absence due to Disability, "Severance
from Service Date" means the earlier of the first anniversary of the first day
of absence because of the Disability or the date of termination of the
Disability; or
(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.
13.50. "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.
13.51. "Surviving Spouse" means a lawful spouse surviving the
Participant as of the date of Participant's death.
13.52. "Trust" means all cash and other property contributed, paid or
delivered to the Trustee under the Trust Agreement, all investments made
therewith and proceeds thereof, and all earnings and profits thereon, less
payments, transfers or other distributions which, at the time of reference,
shall have been made by the Trustee as authorized under the Trust Agreement.
13.53. "Trust Agreement" means the Raytheon Company Master Trust for
Defined Contribution Plans dated July 31, 1992, as amended, 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.
13.54. "Trustee" means the Fidelity Management Trust Company and any
successor or successors thereto under the Trust Agreement.
13.55. "Valuation Date" means the last business day of each calendar
month.
13.56. 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.
EXHIBIT 5
[RAYTHEON LETTERHEAD]
June 18, 1997
Raytheon Company
141 Spring Street
Lexington, MA 02173
Re: Registration Statement on Form S-8 under the Securities Act of 1933,
as amended
Ladies and Gentlemen:
I am counsel to Raytheon Company, a Delaware corporation (the "Company"),
and as such have represented the Company in connection with the registration
under the Securities Act of 1933, as amended (the "Act"), of 200,000 shares (the
"Shares") of the common stock, $1.00 par value per share, of the Company
pursuant to a Registration Statement (the "Registration Statement") on Form S-8,
filed by the Company with the Securities and Exchange Commission on June 17,
1997.
In connection with the opinions rendered hereby, I have reviewed the
corporate proceedings taken by the Company with respect to the authorization and
issuance of the Shares. I have also examined and relied upon originals or
copies, certified or otherwise authenticated to my satisfaction, of such
corporate records, documents, agreements and other instruments, and certificates
of officers of the Company as to certain factual matters, and have made such
investigation of law, and have discussed with officers and representatives of
the Company such questions of fact, as I have deemed necessary or appropriate to
enable me to express the opinions rendered hereby.
I have assumed without any investigation the genuineness of all signatures,
the conformity to the originals of all documents reviewed by me as copies, the
authenticity and completeness of all original documents reviewed by me in
original or copy form, and the legal competence of each individual executing a
document.
In rendering my opinions below, I have assumed, without investigation,
that the Company has received the consideration called for by the resolutions
of the Board of Directors of the Company authorizing the issuance of the Shares.
I have also assumed that the registration requirements of the Act and all
applicable requirements of state laws regulating the sale of securities will
have been duly satisfied.
This opinion is limited solely to the General Corporation Law of the State
of Delaware, as applied by courts located in Delaware.
Based upon the foregoing, I am of the opinion that the Shares are validly
issued, fully paid and non-assessable. I hereby consent to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ John W. Kapples
John W. Kapples
EXHIBIT 23.2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Raytheon Company:
Our report on the consolidated financial statements of Raytheon Company and
Subsidiaries Consolidated has been incorporated by reference in this Form 10-K
from page 66 of the 1996 Annual Report to Stockholders of Raytheon Company. In
connection with our audits of such financial statements, we have also audited
the related financial statement schedules listed in Item 14(a) of this Form
10-K. In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
represents fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 20, 1997, except for the
information presented in Note R for
which the date is February 23, 1997
