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Severance Agreement - Raytheon Co. and Daniel P. Burnham

                               SEVERANCE AGREEMENT

          This Severance Agreement ('Agreement') is made and entered into this
15th day of June, 1998, between Raytheon Company, a corporation organized and
existing under the laws of the State of Delaware with its Executive Offices in
Lexington, Massachusetts ('Company' or 'Raytheon'), and Daniel P. Burnham ('the

1.  Employment:  The  Company  has  offered  to employ  the  Executive,  and the
Executive has accepted employment with the Company, commencing July 1, 1998. The
Executive is an employee at will of the Company.

2.       Severance:

(a)      If prior to the  completion of a full calendar year of employment  with
         the Company,  the Company terminates the employment of the Executive or
         demotes  the  Executive  for  any  reason  other  than:  (i)  Cause  or
         Disability as defined in Section 3 of this Agreement; or (ii) the death
         of the Executive, the Company will pay the Executive an amount equal to
         the sum of:  (a)  three  times the  Executive's  starting  annual  base
         salary;  and (b) three times the  Executive's  target annual cash bonus
         (the target annual  incentive bonus being two hundred percent (200%) of
         the Executive's starting annual base salary).

(b)      If the Company thereafter terminates the employment of the Executive or
         demotes  the  Executive  for  any  reason  other  than:  (i)  Cause  or
         Disability as defined in Section 3 of this Agreement; or (ii) the death
         of the Executive, the Company will pay the Executive an amount equal to
         the sum of:  (a)  three  times  the  Executive's  base  salary  for the
         immediately  preceding  full  calendar  year;  and (b) three  times the
         annual  cash  bonus  received  by the  Executive  for  the  immediately
         preceding full calendar year.

         The  Executive  must notify the Company in writing  within  thirty (30)
days after the occurrence of any action,  event or circumstance,  or any failure
to act by the  Company,  upon which the  Executive  bases a claim for  severance
under  this  Agreement.  Failure to notify the  Company in writing  within  such
thirty (30) day period will  constitute a waiver of the claim,  but will not bar
or hinder  subsequent  claims by the  Executive  arising  out of other  actions,
events,  circumstances or failures to act by the Company. The Executive will not
receive multiple severance  payments under this Agreement,  and will be entitled
only to one severance payment under Subsection 2(a) or (b), as the case may be.

                                                       - 2 -

         The  severance   amounts   described   above,  net  of  any  applicable
withholding, will be paid to the Executive in a lump sum within thirty (30) days
following the receipt by the Company of the written  notice from the  Executive;
provided,  however,  that if the  parties  proceed to  arbitration  of the claim
pursuant to Section 5 of this  Agreement,  the severance  amount  awarded by the
arbitrators will be paid by the Company within thirty (30) days after the award.

         Upon termination of employment, the Executive will remain vested in any
and all shares of restricted stock or restricted  stock  equivalents in which he
was vested immediately prior to termination of employment.

3.       Definitions:

         'Cause'  means  the  Executive's  (i)  conviction  of,  or plea of nolo
contendere to, a felony; (ii) use of illegal drugs; or (iii) willful misconduct,
willful neglect or willful  negligence in the  performance of his duties,  which
the Board of Directors reasonably believes has caused demonstrable injury to the
Company, monetary or otherwise,  including injury to the goodwill and reputation
of the Company.  The acts or events described in (i) through (iii),  above, will
constitute  Cause only if the Executive is given written notice that the Company
intends to terminate the  Executive's  employment  for Cause,  which notice will
specify the particular  acts,  events or failures to act which perform the basis
for the determination to terminate the employment of the Executive.  In the case
of a  termination  for Cause as described in clause (iii) above,  the  Executive
will be given the  opportunity  within  thirty  (30) days of the receipt of such
notice to meet with the Executive  Committee of the Board of Directors to defend
such acts,  events or failures to act,  prior to  termination.  The  Executive's
title and authority may be suspended pending such meeting.

The term  'Disability'  as used in this  Agreement  means a  physical  or mental
incapacity of the Executive  which has prevented him from  performing the duties
customarily  assigned  by the  Company  for a period of not more than sixty (60)
days, whether or not consecutive, out of any twelve (12) consecutive months, and
which  thereafter  can  reasonably  be expected,  in the judgment of a physician
selected by the Company, to continue.

4. Notices: Any notice, request, demand or other communication hereunder must be
in writing and will be deemed to have been duly given when personally  delivered
to the  Corporate  Secretary on behalf of the Company or the  Executive,  as the
case may be, or when delivered by certified mail, return receipt  requested,  at
the following addresses:

                                                       - 3 -

If to the Company:               Senior Vice President - Human Resources
                                 Raytheon Company
                                 141 Spring Street
                                 Lexington MA 02173

If to the Executive:             Daniel P. Burnham
                                 6 Essex Road
                                 Summit, NJ  07901

5. Arbitration: Any controversy or dispute between the Company and the Executive
arising  under  or in  connection  with  this  Agreement  shall  be  settled  by
arbitration. Arbitration will be conducted in accordance with the National Rules
for  the  Resolution  of  Employment   Disputes  of  the  American   Arbitration
Association   before  a  panel  of  three   arbitrators   sitting   in   Boston,
Massachusetts. The award of the arbitrators will be final and nonappealable, and
judgment  may be  entered  on the  award  of the  arbitrators  by any  court  of
competent  jurisdiction.  All expenses of the  arbitration  will be borne by the
Company,  including,  without  limitation,  legal  fees  and  expert  witnesses,
regardless of the outcome of the arbitration.

6. Section Headings: Sections and other headings contained in this Agreement are
for reference only and will not affect in any way the meaning or  interpretation
of the Agreement.

7. Governing Law: This Agreement is governed by the laws of the  Commonwealth of

8.  Enforceability:  Should any court of  competent  jurisdiction  issue a final
determination  affecting  any  provision  of this  Agreement,  the  provision or
provisions so affected will be automatically conformed to the determination, and
otherwise this Agreement will continue in full force and effect.

         IN WITNESS  WHEREOF,  the  Executive and the Company have executed this
Agreement as of the date and year first above written.

Raytheon Company                                  Executive

By:  --------------------------                ------------------------------
           Thomas D. Hyde

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