L. Ben Smith & Carol Smith - Page 3

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          assignment letter to Mr. Smith (Raytheon’s June 1, 1998 assign-             
          ment letter), the receipt of which Mr. Smith acknowledged by                
          signing that letter.  Raytheon’s June 1, 1998 assignment letter,            
          inter alia, described certain benefits that Raytheon was to                 
          provide to Mr. Smith as a result of Mr. Smith’s working on                  
          Johnston Island.  That letter stated, inter alia:  “Johnston                
          Island is not tax exempt; therefore, standard tax obligations               
          apply.”  Raytheon included with Raytheon’s June 1, 1998 assign-             
          ment letter certain documents (Raytheon’s enclosure to Raytheon’s           
          June 1, 1998 assignment letter) that set forth certain terms and            
          conditions of Mr. Smith’s employment with Raytheon.  Among the              
          documents in Raytheon’s enclosure to Raytheon’s June 1, 1998                
          assignment letter was a document entitled “TAX TREATMENT OF                 
          JOHNSTON ISLAND ASSIGNMENT EXPENSES” (Raytheon’s description of             
          the tax treatment of Johnston Island assignment expenses), which            
          provided:                                                                   
                                                       Employee W-2 and Tax           
            Assignment Expense     Tax Classification  Withholding Treatment          
            1. Travel, in-transit  Relocation expense  Subject to W-2                 
                                                       reporting-Not subject          
                                                       to withholding if              
                                                       deductible                     
            2. Remote site differential Compensation   Taxable                        
            3. Subsistence and quarters Business travel expense Taxable               
            4. Off-island rotation Personal travel     Taxable                        
            5. Emergency leave     Compensation        Taxable                        
          NOTE:  You should also consult your personal tax advisor for application to your
          particular tax considerations.                                              
               Throughout 1999 and 2001, Mr. Smith continued to work for              





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