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PROPOSAL 2:
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

(Item No. 2 on the Proxy Card)

The Board is proposing an advisory vote for our shareholders to approve the compensation program for our named executive officers as described on pages 27 to 58 in this proxy statement under the heading “Executive Compensation.” While this vote is non-binding, the Board and the MDCC will review the results and consider shareholder views. Raytheon also will continue to engage with shareholders to address any concerns relating to executive compensation or other matters. The Board is asking you to vote “yes” on the following resolution:

“Resolved, that the shareholders approve the compensation of the named executive officers described in this proxy statement under ‘Executive Compensation,’ which section includes the Compensation Discussion and Analysis, the compensation tables, and accompanying narrative disclosure.”

As discussed in greater detail in the Executive Compensation section of this proxy statement, Raytheon’s compensation program rests on certain key principles, including:

PRINCIPLE MORE INFORMATION
Pay-for-performance: Executive compensation is tied to Raytheon and individual performance over both the near- and long-term. Pages 4-5 and 28-42
Shareholder alignment: We ensure that the interests of executives are closely aligned with those of shareholders by making stock-based incentives a central component of compensation and enforcing meaningful stock ownership and retention requirements. Pages 4-5, 40-41 and 45
Balanced incentives: Our awards have both significant upside opportunity for exceptional performance and downside risk for underperformance. Pages 4-5 and 28-41
Substantial variable component: A substantial portion of each executive’s compensation opportunity is variable, based upon Raytheon’s financial performance and stock price. Pages 5 and 35
Short-term versus long-term: The compensation program carefully balances short- and long-term incentives. Pages 5 and 35
Use of key financial metrics: Short- and long-term incentive awards are based on pre-established financial measures that drive optimum performance. Pages 29-30 and 36-41
Market focus: The MDCC considers both the practices of peer companies and broader market survey data in setting executive compensation. Pages 32-34
Competitiveness: Our executive compensation program addresses the need to retain and attract highly-qualified executives essential to Raytheon’s success in a highly competitive environment. Pages 4, 28 and 31-34
Managing risk: The compensation program is designed to avoid encouraging excessive risk-taking. Page 43
Consultant independence: The MDCC adheres to a stringent Compensation Consultant Independence Policy when retaining outside advisors. Page 42
Clawback rights: Our clawback policy provides for recovery of compensation in certain circumstances where restatement of financial results is required. Page 45

As reflected in the Executive Compensation disclosure, the Board believes that the MDCC has established a compensation program for the NEOs soundly grounded in the above principles that is appropriate and warrants shareholder support.



FOR
The Board unanimously recommends an advisory vote FOR this proposal. Proxies solicited by the Board will be so voted unless shareholders specify otherwise in their proxies.
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