£
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Preliminary Proxy Statement
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£
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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£
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Definitive Additional Materials
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£
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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£
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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£
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Fee paid previously with preliminary materials.
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£
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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WILLIAM H. SWANSON
Chairman
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Time:
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11:00 a.m. Eastern Time
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Date:
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Thursday, May 29, 2014
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Place:
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The Ritz-Carlton, Pentagon City
1250 South Hayes Street
Arlington, Virginia 22202
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Record Date:
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Shareholders of record at the close of business on Tuesday, April 8, 2014 are entitled to notice of and to vote at the meeting.
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Purpose:
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(1) Elect ten directors nominated by the Company's Board to hold office until the next annual
shareholders' meeting or until their respective successors have been elected.
(2) Consider an advisory vote on the compensation of the Company's named executive officers.
(3) Ratify the selection of PricewaterhouseCoopers LLP as Raytheon's independent auditors.
(4) Approve an amendment to the Company's Restated Certificate of Incorporation, as amended, to
authorize shareholder action by written consent.
(5) Consider and act upon such other business, including shareholder proposals if properly presented,
as may properly come before the meeting or any adjournment thereof.
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Proxy Voting:
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You can vote your shares by completing and returning the proxy card or voting instruction form sent to you. Most shareholders can also vote their shares over the Internet or by telephone. Please check your proxy card or the information forwarded by your broker, bank, trust or other holder of record to see which options are available to you. You can revoke a proxy at any time prior to its exercise by following the instructions in the proxy statement.
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By Order of the Board of Directors,
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JAY B. STEPHENS
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Secretary
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Page
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A substantial majority of the Board should be independent directors. In addition, the Audit, Management Development and Compensation, and Governance and Nominating Committees must consist entirely of independent directors.
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The non-management directors designate a Lead Director with the role and responsibilities set forth in the Governance Principles. More information regarding the Lead Director's role and responsibilities may be found on page 8 under the heading "Lead Director."
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The limit on the number of public company boards (including Raytheon) on which a director may serve is five, or three in the case of a director who is a chief executive officer of a public company.
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The Board regularly reviews our long-term strategic and business plans.
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A director must retire at the expiration of his or her term following attaining age 74.
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The Board has established a process, led and implemented by the Management Development and Compensation Committee, through which the performance of the CEO is evaluated annually by the independent directors.
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The CEO provides a periodic report on succession planning and management development to the Management Development and Compensation Committee and the Board.
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The Board oversees the review of various risks potentially affecting the Company. Management may address such risks with the full Board directly or with an appropriate Board committee in accordance with the responsibilities of such committee under its charter.
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The Board is subject to the Company's Code of Conduct and Conflict of Interest policies, and engages in periodic reviews of the Company's ethics program.
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A Restatement Clawback Policy gives the Board the right to recover any incentive payments and stock awards made on or after January 1, 2009 to any elected officer, to the extent that such payments or awards were inflated due to erroneous financial statements substantially caused by the executive's knowing or intentionally fraudulent or illegal conduct.
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The Board has adopted stock ownership guidelines applicable to officers and directors. In 2013, the Board amended the Governance Principles to increase the multiple of base salary necessary to satisfy the stock ownership requirement applicable to the CEO from 5.0 to 6.0, while also increasing the multiple applicable to certain other categories of elected officers. In 2011, the Board revised the stock ownership guidelines applicable to non-employee directors to provide that each director is expected to own shares of Raytheon stock with a market value of at least four times the cash component of the director's annual retainer for service on the Board.
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an executive officer of Raytheon;
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a partner or employee of an internal or external auditor of Raytheon who personally worked on a Raytheon audit;
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an executive officer of a public company that has an executive officer of Raytheon on its compensation committee;
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a paid advisor or consultant to Raytheon receiving in excess of $120,000 per year in direct compensation from Raytheon (other than fees for service as a director); or
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an employee (or in the case of an immediate family member, an executive officer) of a company that does business with Raytheon and the annual payments to or from Raytheon exceeded the greater of $1 million or 2% of the other company's annual gross revenues.
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the annual election of all directors;
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a policy that a substantial majority of the Board shall be independent;
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a rigorous nomination process conducted by the independent Governance and Nominating Committee; and
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disclosure of a process through which shareholders may nominate director candidates.
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Audit
Committee
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Governance
and
Nominating
Committee
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Management
Development
and
Compensation
Committee
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Public
Affairs
Committee
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Special
Activities
Committee
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Executive
Committee
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Independent Directors
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James E. Cartwright
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X
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X
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X
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Vernon E. Clark
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Chair
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X
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Stephen J. Hadley
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X
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Chair
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X
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X
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George R. Oliver
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X
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X
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Michael C. Ruettgers
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X
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X
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Ronald L. Skates
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Chair
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X
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X
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X
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William R. Spivey
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X
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Chair
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X
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Linda G. Stuntz
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Chair
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X
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X
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X
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Inside Directors
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William H. Swanson
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Chair
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Thomas A. Kennedy
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X
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Number of Meetings in 2013
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9
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6
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6
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6
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8
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—
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Oversees the integrity of our financial statements;
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Evaluates the independent auditors' qualifications, performance and independence;
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Oversees our internal audit function;
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Meets with management to consider the adequacy of our internal controls and the objectivity of financial reporting;
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Reviews the independent auditors' audit of the effectiveness of the Company's internal controls;
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Prepares the Audit Committee Report found on page
65
;
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Meets with the independent auditors, internal auditors and appropriate financial personnel;
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Appoints the independent auditors;
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Pre-approves all audit fees and terms, as well as all non-audit engagements, with the independent auditors;
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Reviews annual and periodic reports and earnings press releases and recommends to the Board whether the annual audited financial statements should be included in the Company's Form 10-K;
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Reviews and discusses with management the Company's risk assessment and risk management policies, including ERM, the Company's major financial risk exposures and steps to monitor and control such exposures;
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Has established a process for employees and others to confidentially and anonymously report concerns or complaints regarding accounting, internal control or auditing matters. More information regarding this process is available on page
8
under the heading "Corporate Governance - Communication with the Board";
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Reviews compliance with our Code of Conduct with respect to certain financial reporting, controls and allegations of financial misconduct; and
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Has the authority to hire independent counsel and other advisers.
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Reviews and oversees compensation and benefits, as well as personnel plans, policies and programs;
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Reviews and recommends to the Board the compensation of the CEO and the other four most highly compensated executive officers;
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Reviews and approves the compensation of other officers and key employees;
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Reviews peer company practices to ensure competitiveness and seeks to align compensation with the performance of the Company;
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Periodically reviews succession plans for the CEO, the other named executive officers and elected officers of the Company;
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Periodically reviews career development plans for elected officers and other key employees;
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Administers and makes awards under our equity compensation plans;
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Reviews and discusses with management the "Compensation Discussion and Analysis" section of this proxy statement beginning on page
27
;
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Prepares the Management Development and Compensation Committee Report found on page
45
;
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Has the sole authority and responsibility for the appointment, compensation and oversight of any outside compensation consultant, outside legal counsel or other committee adviser, who may only be selected after the MDCC considers all factors relevant to such adviser's independence from management, including those specified in the NYSE listing standards; and
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•
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Annually assesses the independence of its outside compensation consultants or advisers, considering all relevant factors, including those specified in the NYSE listing standards, and pre-approves any services proposed to be provided by such consultants or advisers to the Company.
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Reviews and reports to the Board on a periodic basis with regard to matters of corporate governance;
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Establishes procedures for the nomination of directors and recommends candidates for election to the Board;
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Considers director nominees proposed by shareholders;
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Reviews and assesses the effectiveness of our Governance Principles and recommends proposed revisions to the Board;
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Reviews and approves or ratifies transactions and relationships under our Related Party Transactions Policy;
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Reviews proposals by shareholders in connection with the annual meeting of shareholders and makes recommendations to the Board for action on such proposals;
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Makes recommendations to the Board regarding the size and composition of the Board;
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Oversees the orientation program for new directors and the continuing education program for existing directors;
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Approves director compensation with the concurrence of the Board; and
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Has the authority to hire independent counsel and other advisers.
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Reviews, identifies and brings to the attention of the Board political, social and legal trends and issues that may have an impact on our business, operations, financial performance or public image;
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Reviews our policies and practices in the areas of legal and social responsibility, and recommends to the Board such policies and practices, including those involving:
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environmental protection;
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health and safety of employees;
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ethics;
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export control;
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regulatory compliance (except financial matters);
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charitable contributions and community relations;
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government relations and legislative policy;
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political contributions and lobbying;
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foreign and domestic consultants and representatives;
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offsets;
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crisis management and emergency preparedness;
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pension plan performance, management and governance; and
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government contracting and defense procurement policies;
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Reviews, monitors and makes recommendations to the Board on corporate policies and practices that relate to public policy; and
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Has the authority to hire independent counsel and other advisers.
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Reviews Company programs, activities and potential acquisitions involving classified business which involve special performance, financial, reputational or other risks; and
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Reviews policies, processes, practices, procedures, risk management and internal controls applicable to the Company's classified business to the extent that they deviate from those applicable to the Company's non-classified business activities.
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Name
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Fees
Earned or Paid in Cash (1) ($) |
|
Stock
Awards (2) ($) |
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Option
Awards ($) |
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Non-Equity
Incentive Plan Compensation ($) |
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Change in
Pension Value and Nonqualified Deferred Compensation Earnings ($) |
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All Other
Compensation ($) |
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Total
($) |
|||||||||||
James E. Cartwright
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$
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125,500
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$
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119,982
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|
—
|
|
|
—
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|
|
—
|
|
|
$
|
—
|
|
|
$
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245,482
|
|
Vernon E. Clark
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140,000
|
|
|
171,018
|
|
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(4)
|
321,018
|
|
||||
John M. Deutch*
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54,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,500
|
|
||||
Stephen J. Hadley
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133,500
|
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119,982
|
|
|
—
|
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|
—
|
|
|
—
|
|
|
—
|
|
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253,482
|
|
||||
George R. Oliver**
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3,000
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60,021
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(5)
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—
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|
—
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|
—
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10,000
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(4)
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73,021
|
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||||
Frederic M. Poses*
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64,000
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|
—
|
|
|
—
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—
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|
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—
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5,000
|
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(4)
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69,000
|
|
||||
Michael C. Ruettgers
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124,000
|
|
|
119,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(4)
|
253,982
|
|
||||
Ronald L. Skates
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145,500
|
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119,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(4)
|
275,482
|
|
||||
William R. Spivey
|
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125,000
|
|
|
119,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
244,982
|
|
||||
Linda G. Stuntz
|
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131,000
|
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119,982
|
|
|
—
|
|
|
—
|
|
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—
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|
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5,000
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(4)
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255,982
|
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(3)
|
This amount represents Mr. Clark's annual stock retainer in his capacity as the Lead Director.
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(4)
|
Represents Raytheon contributions under our matching gift and charitable awards program, which is available to all employees and directors.
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(5)
|
Upon election to the Board on November 20, 2013, Mr. Oliver was granted 702 shares of restricted stock which represented his pro-rated portion of the 2013 - 2014 annual stock retainer. Such restricted shares will vest on May 29, 2014, the date of the 2014 Annual Meeting.
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Director
|
|
Roles
|
|
Annual
Board Cash Retainer ($) |
|
Annual
Committee Chair or Lead Director Cash Retainer ($) |
|
Meeting
Fees ($) |
|
||||||
Mr. Cartwright
|
|
Director
|
|
$
|
85,000
|
|
|
$
|
—
|
|
|
$
|
40,500
|
|
|
Mr. Clark
|
|
Chair, Special Activities Committee and Lead Director
(a)
|
|
85,000
|
|
|
22,000
|
|
|
33,000
|
|
|
|||
Mr. Deutch
|
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Director
(b)
|
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42,500
|
|
|
—
|
|
|
12,000
|
|
|
|||
Mr. Hadley
|
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Chair, Public Affairs Committee
(c)
|
|
85,000
|
|
|
5,000
|
|
|
43,500
|
|
|
|||
Mr. Oliver
|
|
Director
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|
|||
Mr. Poses
|
|
Chair, MDCC
(b)
|
|
42,500
|
|
|
5,000
|
|
|
16,500
|
|
|
|||
Mr. Ruettgers
|
|
Director
(d)
|
|
85,000
|
|
|
12,000
|
|
|
27,000
|
|
|
|||
Mr. Skates
|
|
Chair, Audit Committee
|
|
85,000
|
|
|
20,000
|
|
|
40,500
|
|
|
|||
Mr. Spivey
|
|
Chair, MDCC
(e)
|
|
85,000
|
|
|
10,000
|
|
|
30,000
|
|
|
|||
Ms. Stuntz
|
|
Chair, Governance and Nominating Committee
|
|
85,000
|
|
|
10,000
|
|
|
36,000
|
|
|
Director
|
Restricted Stock(#)
|
|
Mr. Cartwright
|
1,782
|
|
Mr. Clark
|
2,540
|
|
Mr. Deutch
|
—
|
|
Mr. Hadley
|
1,782
|
|
Mr. Oliver
|
702
|
|
Mr. Poses
|
—
|
|
Mr. Ruettgers
|
1,782
|
|
Mr. Skates
|
1,782
|
|
Mr. Spivey
|
1,782
|
|
Ms. Stuntz
|
1,782
|
|
Director
|
|
Grant
Date |
|
All Stock
Awards: Number of Shares of Stock or Units(#) |
|
Full Grant Date
Value of Award($) |
|||
Mr. Cartwright
|
|
5/30/2013
|
|
1,782
|
|
|
$
|
119,982
|
|
Mr. Clark
|
|
5/30/2013
|
|
2,540
|
|
|
171,018
|
|
|
Mr. Deutch
|
|
N/A
|
|
—
|
|
|
—
|
|
|
Mr. Hadley
|
|
5/30/2013
|
|
1,782
|
|
|
119,982
|
|
|
Mr. Oliver
|
|
11/20/2013
|
|
702
|
|
|
60,021
|
|
|
Mr. Poses
|
|
N/A
|
|
—
|
|
|
—
|
|
|
Mr. Ruettgers
|
|
5/30/2013
|
|
1,782
|
|
|
119,982
|
|
|
Mr. Skates
|
|
5/30/2013
|
|
1,782
|
|
|
119,982
|
|
|
Mr. Spivey
|
|
5/30/2013
|
|
1,782
|
|
|
119,982
|
|
|
Ms. Stuntz
|
|
5/30/2013
|
|
1,782
|
|
|
119,982
|
|
Annual Cash Retainers
|
|
2013
|
||
Board of Directors
|
|
|
$85,000
|
|
Lead Director
|
|
|
$24,000
|
|
Governance and Nominating Committee Chair
|
|
|
$10,000
|
|
Audit Committee Chair
|
|
|
$20,000
|
|
Management Development and Compensation Committee Chair
|
|
|
$10,000
|
|
Public Affairs Committee Chair
|
|
|
$10,000
|
|
Special Activities Committee Chair
|
|
|
$10,000
|
|
|
Director of the Company since January 2012.
|
|
Harold Brown Chair in Defense Policy Studies, the Center for Strategic and International Studies, since September 2011.
|
|
General, United States Marine Corps; Vice Chairman of the Joint Chiefs of Staff from 2007 to 2011 (retired in August 2011).
|
|
40-year career in the United States Marines, serving in a series of staff and operational positions with increasing responsibility including Commanding General, 1
st
Marine Aircraft Wing (2000 to 2002); Director for Force Structure, Resources and Assessment, J-8 the Joint Staff (2002 to 2004); and Commander, U.S. Strategic Command (2004 to 2007).
|
|
Age 64.
|
|
Director of the Company since 2005.
|
|
Chief of Naval Operations, the senior uniformed executive of the United States Navy and member of the Joint Chiefs of Staff, from 2000 to 2005 (retired in 2005).
|
|
37-year career in the United States Navy, serving in various positions of increasing responsibility; commanded a patrol gunboat and concluded as the Chief of Naval Operations.
|
|
Current Directorship: Rolls Royce North America (aerospace, marine and energy-related manufacturer) since 2006.
|
|
Past Directorship: Horizon Lines, Inc. (ocean shipping and integrated logistics company) from 2007 to November 2011.
|
|
Affiliations: Visiting Professor, Regent University; Director of SRI International (Stanford Research Institute); and served with the Defense Policy Board and the Defense Business Board.
|
|
Age 69.
|
|
Director of the Company since 2009.
|
|
Principal in RiceHadleyGates, LLC (international strategic consulting firm) since 2009.
|
|
Assistant to the President for National Security Affairs from 2005 to 2009
|
|
Assistant to the President and Deputy National Security Advisor from 2001 to 2005.
|
|
Partner in the Washington, D.C. law firm of Shea & Gardner and a principal in The Scowcroft Group (international consulting firm) from 1993 to 2001.
|
|
Current Directorships: The Bessemer Group, Incorporated (including service on its Compensation Committee since 2012 and its Audit Committee since 2013), Bessemer Securities Corporation, (including service on its Audit Committee since 2011 and Asset Allocation Committee since 2010), and certain related entities (all privately held financial services companies) since 2009.
|
|
Affiliations: Director (and member of the Executive Committee) of the Atlantic Council of the United States since 2010; Member of the Board of Managers of the John Hopkins University Applied Physics Laboratory since 2011; Member of U.S. Secretary of State’s Foreign Affairs Policy Board since 2011; Chairman of the Advisory Board of the RAND Center for Middle East Public Policy since 2011; Member of Yale University’s Kissinger Papers Advisory Board since 2011; and Member, Board of Directors, U.S. Institute of Peace since 2013 and Chairman since 2014.
|
|
Age 67.
|
|
Director of the Company since January 2014.
|
|
Chief Executive Officer of the Company since March 2014.
|
|
Executive Vice President and Chief Operating Officer of the Company from April 2013 to March 2014.
|
|
Vice President and President of the Integrated Defense Systems business unit of the Company from June 2010 to March 2013.
|
|
Vice President of the Tactical Airborne Systems product line within the Space and Airborne Systems business unit of the Company from July 2007 to June 2010.
|
|
In the 31
st
year of his career at the Company which has included a wide range of leadership positions.
|
|
Affiliations: Rutgers University School of Engineering Industry Advisory Board.
|
|
Age 59.
|
|
Director of the Company since November 2013.
|
|
CEO and member of the board of directors of Tyco International Ltd. since 2012.
|
|
President of Tyco Fire Protection from 2011 to 2012; President of Tyco Electrical and Metal Products from 2007 to 2010; and President of Tyco Safety Products from 2006 to 2010.
|
|
President of GE Water and Process Technologies until 2006; prior to this position, held a series of leadership roles of increasing responsibility at several General Electric divisions.
|
|
Affiliations: Trustee of Worcester Polytechnic Institute.
|
|
Age 53.
|
|
Director of the Company since 2000.
|
|
Chairman of EMC Corporation (data storage and management products and services provider) from January 2004 to December 2005.
|
|
Executive Chairman (from 2001 to 2004) and CEO (from 1992 to 2001) of EMC Corporation; held a variety of senior executive positions at EMC Corporation from 1988 to 1992.
|
|
Current Directorship: Non-executive Chairman of the Board of Wolfson Microelectronics plc (manufacturer of semiconductor chips used in audio, video and imaging applications) since 2008; and Director of Gigamon Inc. (computer networking solutions company) since 2010.
|
|
Past Directorship: EMC Corporation from 1992 to 2005.
|
|
Age 71.
|
|
Director of the Company since 2003.
|
|
Private investor since 1999.
|
|
President and CEO of Data General Corporation (data storage and enterprise solutions supplier) from 1989 to 1999; held other positions at Data General Corporation from 1986 to 1989.
|
|
Partner at Price Waterhouse (now PricewaterhouseCoopers LLP) from 1976 to 1986.
|
|
Current Directorships: State Street Corporation (financial services company) since 2002; Courier Corporation (book manufacturer and specialty publisher) since 2003; and Gilbane, Inc. (privately held real estate development and construction company) since 2002.
|
|
Affiliations: Trustee of Massachusetts General Physicians Organization and Trustee Emeritus of Massachusetts General Hospital.
|
|
Age 72.
|
|
Director of the Company since 1999.
|
|
President and CEO of Luminent, Inc. (fiber-optic transmission products provider) from 2000 to 2001.
|
|
Group President, Network Products Group, Lucent Technologies Inc. from 1997 to 2000.
|
|
Vice President, Systems & Components Group, AT&T Corporation from 1994 to 1997.
|
|
Group Vice President and President, Tektronix Development Company, Tektronix, Inc. from 1991 to 1994.
|
|
Current Directorships: Cascade Microtech, Inc. (advanced wafer probing solutions provider) since 1998 and Lam Research Corporation (advanced process equipment provider) since 2012.
|
|
Past Directorships: Lyondell Chemical Company (manufacturer of basic chemicals and derivatives) from 2000 to 2007; ADC Telecommunications, Inc. (supplier of network infrastructure products and services) from 2004 to 2010; Novellus Systems, Inc. (advanced process equipment provider) from 1998 to 2012; and Laird PLC (electronics components and systems provider) from 2002 to 2012.
|
|
Age 67.
|
|
Director of the Company since 2004.
|
|
Partner in the law firm of Stuntz, Davis & Staffier, P.C. since 1995.
|
|
Partner in the law firm of Van Ness Feldman from 1993 to 1995.
|
|
Deputy Secretary of, and held senior policy positions in, the United States Department of Energy from 1989 to 1993.
|
|
Associate Minority Counsel and Minority Counsel to the U.S. House of Representatives Energy and Commerce Committee from 1981 to 1987.
|
|
Current Directorships: Royal Dutch Shell plc (an oil and gas exploration and production company) since 2011(which includes service on its Audit Committee), and nominee for election to the board of Edison International (an electric utility holding company).
|
|
Past Directorship: Schlumberger Ltd. (oilfield services company) from 1993 to 2010.
|
|
Affiliations: Member, Board of Advisors, Frank Batten School of Leadership and Public Policy, University of Virginia, since 2011.
|
|
Age 59.
|
|
Chairman of the Board since 2004.
|
|
Director of the Company since 2003.
|
|
CEO of the Company from 2003 to March 2014.
|
|
President of the Company from July 2002 to May 2004.
|
|
Executive Vice President of the Company and President of Electronic Systems from January 2000 to July 2002.
|
|
Executive Vice President of the Company and Chairman and CEO of Raytheon Systems Company from January 1998 to January 2000.
|
•
|
In the 42nd year of his career at the Company, which has included a wide range of leadership positions.
|
•
|
Current Directorship: NextEra Energy, Inc. (formerly FPL Group, Inc.) (a clean energy company) since 2009.
|
|
Past Directorship: Sprint Nextel Corporation (wireless and wireline communications services provider) from 2004 to 2008.
|
|
Affiliations: Congressional Medal of Honor Foundation Board of Directors; California Polytechnic State University President’s Cabinet; Vice Chairman, California Polytechnic State University Foundation Board of Directors; Vice Chairman of the John F. Kennedy Library Foundation Board of Directors; Chairman Emeritus of the Business-Higher Education Forum Executive Committee; Chairman Emeritus of the Aerospace Industries Association Executive Committee; and Member of the President’s National Security Telecommunications Advisory Committee.
|
|
Age 65.
|
Name and Address of Beneficial Owner
|
|
Common
Stock |
|
Percent of
Class |
||
BlackRock, Inc.
40 East 52nd Street, New York, NY 10022 |
|
29,781,884
|
|
|
9.30
|
%
|
Barrow, Hanley, Mewhinney & Strauss, LLC
2200 Ross Avenue, 31st Floor, Dallas, TX 75201-2761
|
|
22,014,242
|
|
|
6.89
|
%
|
The Vanguard Group
100 Vanguard Blvd., Malvern, PA 19355 |
|
16,190,515
|
|
|
5.06
|
%
|
Name of Beneficial Owner
|
Number of Shares
and Nature of Beneficial Ownership |
|
|
(a)
|
|
|
|
William H. Swanson
|
886,620
|
|
(1)(2)(3)
|
James E. Cartwright
|
5,374
|
|
(4)
|
Vernon E. Clark
|
7,488
|
|
(4)
|
Stephen J. Hadley
|
11,477
|
|
(4)
|
Thomas A. Kennedy
|
103,034
|
|
(1)(2)
|
George R. Oliver
|
702
|
|
(4)
|
Michael C. Ruettgers
|
23,675
|
|
(3)(4)
|
Ronald L. Skates
|
25,469
|
|
(4)(5)
|
William R. Spivey
|
37,231
|
|
(4)
|
Linda G. Stuntz
|
21,731
|
|
(4)
|
(b)
|
|
|
|
David C. Wajsgras
|
108,714
|
|
(1)(2)
|
Jay B. Stephens
|
113,957
|
|
(1)(2)
|
Daniel J. Crowley
|
101,165
|
|
(1)(2)(3)
|
(c)
|
|
|
|
All directors, nominees for director and executive officers as a group (20 persons)
|
1,833,975
|
|
(1)(2)(3)(4)(5)(6)
|
(1)
|
Includes shares owned outright as follows: Mr. Swanson 520,250; Mr. Kennedy - 43,851; Mr. Wajsgras - 49,316; Mr. Stephens - 60,503; Mr. Crowley - 45,843; and all executive officers and directors as a group - 957,145.
|
(2)
|
Includes shares of restricted stock over which the beneficial owner has voting power as follows: Mr. Swanson
238,120
; Mr. Kennedy -
59,183
; Mr. Wajsgras -
59,398
; Mr. Stephens -
53,454
; Mr. Crowley -
51,359
; and all executive officers and directors as a group - 720,409.
|
(3)
|
Includes vested deferred compensation equivalent to shares of our common stock as follows: Mr. Swanson - 128,250; Mr. Crowley - 3,963; Mr. Ruettgers - 498; and all executive officers and directors as a group - 152,297.
|
(4)
|
Includes shares of restricted stock over which the beneficial owner has voting power as follows: Ms. Stuntz and Messrs. Cartwright, Hadley, Ruettgers, Skates and Spivey - 1,782 shares each; Mr. Clark - 2,540 shares; and Mr. Oliver - 702 shares.
|
(5)
|
Includes 2,400 shares held in family trusts as to which Mr. Skates disclaims beneficial ownership.
|
(6)
|
Includes 1,724 shares indirectly held by certain executive officers through the Raytheon Savings and Investment Plan and the Raytheon Excess Savings Plan.
|
|
William H. Swanson, Chairman and CEO;
|
•
|
Thomas A. Kennedy, Executive Vice President and Chief Operating Officer;
|
|
David C. Wajsgras, Senior Vice President and Chief Financial Officer;
|
|
Jay B. Stephens, Senior Vice President, General Counsel and Corporate Secretary; and
|
|
Daniel J. Crowley, Vice President, and President of our Integrated Defense Systems (IDS) business.
|
|
Program Highlights
|
Page(s)
|
|
Ties a significant portion of each executive's compensation to the Company's performance and individual performance against various pre-established financial, operational and other goals, through variable, at-risk short- and long-term incentive awards.
|
28-41
|
|
|
|
|
Aligns closely the interests of executives with those of shareholders by making stock-based incentives a central component of compensation coupled with meaningful stock ownership and retention requirements.
|
28-31
and
39-41
|
|
|
|
|
Establishes a balanced incentives program by providing awards with both significant upside opportunity for exceptional performance and downside risk for underperformance.
|
28-41
|
|
Program Highlights
|
Page(s)
|
|
Authorizes recovery or clawback of compensation in certain circumstances where restatement of financial results is required.
|
43
|
|
|
|
|
Maximizes the benefit to the MDCC of its independent compensation consulting firm by adhering to a stringent Compensation Consultant Independence Policy.
|
32
|
|
|
|
|
Provides our executives with total compensation opportunities at levels that are competitive for comparable positions at companies with whom we compete for talent.
|
33-35
|
|
|
|
|
Is designed and monitored by the MDCC to avoid risk-taking that might be likely to have a material adverse effect on the Company.
|
32-33
|
Compensation Element
|
Retain and attract
highly-qualified
executive talent
|
Incentivize achievement of
our overall
business objectives
|
Differentiate rewards based
on individual performance
|
Incentivize and reward
long-term performance in
alignment with
shareholders' interests
|
Base Salary (Base)
|
ü
|
|
|
|
Annual Incentive Plan (RBI)
|
ü
|
ü
|
ü
|
|
Performance-Based Restricted Stock Units (LTPP)
|
ü
|
ü
|
|
ü
|
Time-Based Restricted Shares (RSA)
|
ü
|
|
|
ü
|
Benefits, Perquisites and Other Compensation,
including severance and change-in-control arrangements (Perks & Other)
|
ü
|
|
|
|
(1)
|
Total direct compensation opportunity does not include perquisites and other executive benefits, including retirement and severance benefits. As a result, the percentages above may vary slightly from the percentages set forth in the pay mix charts which do include perquisites and other executive benefits.
|
Total Direct Compensation Opportunity - Other Named Executive Officers
(1)
(Average allocation for the four Named Executive Officers other than the CEO)
|
||
Fixed 19%
(Base Salary)
|
|
Variable 81%
(RBI + Long-Term Incentive Value
(2)
)
|
Short-term 39%
(Base Salary + RBI)
|
|
Long-term 61%
(Long-Term Incentive Value)
|
Cash 39%
(Base Salary + RBI)
|
|
Equity-Based 61%
(Long-Term Incentive Value)
|
(1)
|
Total direct compensation opportunity does not include perquisites and other executive benefits, including retirement and severance benefits. As a result, the percentages above may vary slightly from the percentages set forth in the pay mix charts which do include perquisites and other executive benefits.
|
|
|
|
|
|
|
|
|
(Stock Awards)
Long-Term Incentives
|
|
|
||||||||||||||||
Executive
|
|
Year
(1)
|
|
Salary
|
|
(Non-Equity
Incentive Plan
Compensation)
RBI
(2)
|
|
Restricted
Stock
|
|
LTPP
Award
(3)
|
|
All Other
|
|
Total
|
||||||||||||
William H. Swanson
|
|
2013
|
|
$
|
1,463,456
|
|
|
$
|
3,500,000
|
|
|
$
|
4,699,971
|
|
|
$
|
6,500,009
|
|
|
$
|
627,663
|
|
|
$
|
16,791,099
|
|
|
|
2012
|
|
1,414,421
|
|
|
3,400,000
|
|
|
4,699,989
|
|
|
6,499,980
|
|
|
446,160
|
|
|
16,460,550
|
|
||||||
|
|
2011
|
|
1,369,704
|
|
|
3,000,000
|
|
|
3,800,021
|
|
|
6,400,000
|
|
|
439,546
|
|
|
15,009,271
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Thomas A. Kennedy
|
|
2013
|
|
$
|
664,017
|
|
|
$
|
1,200,000
|
|
|
$
|
1,999,970
|
|
|
$
|
1,250,020
|
|
|
$
|
142,436
|
|
|
$
|
5,256,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
David C. Wajsgras
|
|
2013
|
|
$
|
901,434
|
|
|
$
|
1,100,000
|
|
|
$
|
1,200,023
|
|
|
$
|
1,300,013
|
|
|
$
|
158,674
|
|
|
$
|
4,660,144
|
|
|
|
2012
|
|
871,800
|
|
|
1,000,000
|
|
|
1,099,995
|
|
|
1,300,016
|
|
|
138,098
|
|
|
4,409,909
|
|
||||||
|
|
2011
|
|
844,245
|
|
|
865,000
|
|
|
999,987
|
|
|
1,300,010
|
|
|
131,395
|
|
|
4,140,637
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Jay B. Stephens
|
|
2013
|
|
$
|
788,926
|
|
|
$
|
1,000,000
|
|
|
$
|
999,985
|
|
|
$
|
1,200,026
|
|
|
$
|
120,986
|
|
|
$
|
4,109,923
|
|
|
|
2012
|
|
762,979
|
|
|
950,000
|
|
|
1,000,009
|
|
|
1,199,999
|
|
|
122,096
|
|
|
4,035,083
|
|
||||||
|
|
2011
|
|
738,863
|
|
|
755,000
|
|
|
950,018
|
|
|
1,200,010
|
|
|
120,110
|
|
|
3,764,001
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Daniel J. Crowley
|
|
2013
|
|
$
|
717,262
|
|
|
$
|
750,000
|
|
|
$
|
1,200,023
|
|
|
$
|
1,250,020
|
|
|
$
|
263,016
|
|
|
$
|
4,180,321
|
|
|
|
2012
|
|
691,028
|
|
|
575,000
|
|
|
900,024
|
|
|
1,250,008
|
|
|
118,595
|
|
|
3,534,655
|
|
||||||
|
|
2011
|
|
667,000
|
|
|
500,000
|
|
|
800,010
|
|
|
1,250,010
|
|
|
117,231
|
|
|
3,334,251
|
|
Compensation
Element
|
|
Performance Metrics/Weightings
|
|
Results Achieved
|
2013 RBI
|
|
Bookings (20%); net sales (30%); free cash flow (FCF) (20%); and operating income from continuing operations (30%).
|
|
We exceeded our pre-established 2013 target for FCF and operating income from continuing operations, nearly achieved target for net sales and fell below target for bookings, resulting in the achievement of an overall funding level of 106.0%. See discussion beginning on page 36.
|
2011 - 2013 LTPP
|
|
Average return on invested capital (ROIC) (50%); cumulative FCF (CFCF) (25%); and total shareholder return (TSR) (25%).
|
|
We exceeded our pre-established three-year performance targets for ROIC, CFCF and TSR, which resulted in a 145.8% of target payout in shares of our common stock. See discussion beginning on page 39.
|
|
An assortment of vehicles for delivering compensation, both fixed and variable, and including cash and equity-based measures with different time horizons, to focus our executives on specific objectives that help us achieve our business plans and create an alignment with long-term shareholder interests;
|
|
Diversification of incentive-related risk by employing a variety of performance measures;
|
|
A balanced weighting of the various performance measures to avoid excessive attention to achievement of one measure over another;
|
|
Fixed maximum award levels for performance-based awards;
|
|
Guidelines designed to assure the independence of our compensation consultant, who advises the MDCC as described above;
|
|
A clawback policy and equity grant procedures, as described below on page
43
; and
|
|
Incentive compensation to named executive officers based on individual performance and overall Company performance.
|
|
Company and individual performance in five areas - financial, operational, customer satisfaction, people and "Six Sigma"; and
|
|
Market competitiveness of our compensation program.
|
|
Financial - we focus on financial metrics that are good indicators of whether the Company and our businesses are achieving their annual or longer-term business objectives; bookings, sales, operating income, free cash flow and return on invested capital are measures used to gauge financial performance;
|
|
Operational - we evaluate product development and program execution through the use of tools designed to measure operational efficiencies, such as Integrated Product Development Systems and the Earned Value Management System;
|
|
Customer satisfaction - we measure customer satisfaction through the use of customer satisfaction surveys, performance against program cost and schedule indices, annual customer performance assessment reports and through customer award fees;
|
|
People - we assess our executives' development of people, leadership behavior, ethical conduct, employee opinion survey results and the
|
|
"Six Sigma" - we look to see how well the Company, a business or an individual has used Raytheon Six Sigma, a continuous process improvement effort designed to reduce costs and improve efficiency.
|
|
A core peer group, which consists of companies that are either aerospace and defense companies or that have substantial aerospace or defense businesses. We also consider a company's complexity, operations, revenues, net income and market capitalization. We compete to varying degrees for business and talent with the companies in this core peer group. The companies comprising the core peer group are as follows:
|
The Boeing Company
|
|
General Dynamics Corporation
|
L-3 Communications Holdings, Inc.
|
|
Honeywell International, Inc.
|
Northrop Grumman Corporation
|
|
Lockheed Martin Corporation
|
Textron Inc.
|
|
United Technologies Corporation
|
|
A broader peer group, comprised of our core peer group and seven additional companies from other industries, which we selected on the basis of the comparability of their complexity, operations, revenues, net income and market capitalization to ours. The broader peer group companies are as follows:
|
3M Company
|
|
Emerson Electric Co.
|
Caterpillar Inc.
|
|
Eaton Corporation
|
General Dynamics Corporation
|
|
Illinois Tool Works Inc.
|
Honeywell International, Inc.
|
|
L-3 Communications Holdings, Inc.
|
Johnson Controls, Inc.
|
|
Lockheed Martin Corporation
|
Northrop Grumman Corporation
|
|
Motorola Solutions, Inc.
|
Textron Inc.
|
|
United Technologies Corporation
|
The Boeing Company
|
|
|
|
base salaries;
|
|
total cash compensation (which includes base salary and annual incentive award); and
|
|
total direct compensation (which includes base salary, annual incentive award and long-term incentive opportunity).
|
|
The
2013
base salaries for our named executive officers, on average, fell between the 50
th
and the 75
th
percentiles of the market;
|
|
Total cash compensation for our named executive officers, on average, fell between the 50
th
and the 75
th
percentiles of the market; and
|
|
Total direct compensation for our named executive officers, on average, fell between the 50
th
and the 75
th
percentiles of the market.
|
|
Fixed versus variable
|
|
Short-term versus long-term
|
|
Cash versus equity-based
|
|
Experience for the position;
|
|
Personal contribution to the financial and operational performance of the Company and its businesses; and
|
|
Contribution in the areas of operational improvements, customer satisfaction, effective management of human resources and "Six Sigma."
|
|
First, the funding of an overall RBI incentive pool is dependent on the Company's success in achieving specified financial performance goals, as described below.
|
|
Second, the size of the executive's RBI payout from the funded pool depends on actual performance against pre-established individual performance objectives, which can be below target or, for
|
|
Bookings - 20% - a forward-looking metric that measures the value of new contracts awarded to us during the year and an indicator of potential future growth.
|
|
Net Sales - 30% - a growth metric that measures our revenue for the current year.
|
|
Free Cash Flow (FCF) - 20% - a measure of the cash that is generated in a given year that we can use to make strategic investments to grow our businesses or return to our shareholders.
|
|
Operating Income from Continuing Operations - 30% - a measure of our profit from continuing operations for the year, before interest and taxes, and after certain non-operational adjustments.
|
|
FCF is operating cash flow from continuing operations less capital spending and internal use software spending, excluding the impact of changes to cash flow from pension and post-retirement benefits-related items and other similar non-operational items.
|
|
Operating Income from Continuing Operations is operating income from continuing operations, excluding the FAS/CAS pension and post-retirement
|
Financial Metric
|
|
Performance
Target
|
|
RBI
Funding
|
|
Bookings
|
|
$23.44B
|
|
86.0
|
%
|
Net Sales
|
|
$23.82B
|
|
98.8
|
%
|
Free Cash Flow
|
|
$1.70B
|
|
115.3
|
%
|
Operating Income from Continuing Operations
|
|
$2.95B
|
|
120.5
|
%
|
Overall Funding Level %
|
|
|
|
106.0
|
%
|
|
Financial objectives within the individual's business or functional area;
|
|
Successfully managing human resources and developing a more effective organization within the individual's business or functional area;
|
|
Improving employee opinion survey results;
|
|
Achieving exemplary regulatory compliance;
|
|
Increasing energy efficiency and successfully implementing workplace safety initiatives;
|
|
Demonstrating effective leadership behaviors; and
|
|
Promoting a culture of innovation through respect and inclusion.
|
Performance Cycle
|
|
ROIC
|
|
CFCF
|
|
TSR
|
|
Total
|
||||
2013-2015
|
|
50
|
%
|
|
25
|
%
|
|
25
|
%
|
|
100
|
%
|
2012-2014
|
|
50
|
%
|
|
25
|
%
|
|
25
|
%
|
|
100
|
%
|
2011-2013
|
|
50
|
%
|
|
25
|
%
|
|
25
|
%
|
|
100
|
%
|
|
Return on Invested Capital (ROIC) measures how efficiently and effectively we use capital.
|
|
Cumulative Free Cash Flow (CFCF) measures, on a cumulative basis, the cash that is generated over the three-year performance cycle, which we can use to make strategic investments to grow our businesses or return to our shareholders. The calculation of CFCF is essentially the same as the FCF calculation described above under the discussion of the RBI plan.
|
|
Total Shareholder Return (TSR) compares our stock price appreciation, including reinvested dividends, over the performance period to our peers' stock performance over the same period and provides a percentage ranking.
|
|
ROIC is (a) (i) income from continuing operations, excluding (ii) the after-tax effect of the FAS/CAS pension and post-retirement benefits expense/income and, from time to time, certain other items, plus (iii) after-tax net interest expense plus (iv) one-third of operating lease expense after-tax (estimate of interest portion of operating lease expense) divided by (b)(i) average invested capital after capitalizing operating leases (operating lease expense times a multiplier of 8), adding (ii) financial guarantees, less net investment in discontinued operations, and adding back (iii) the liability for defined benefit pension and other post-retirement benefit plans, net of tax and excluding (iv) other similar non-operational items. Such calculation also includes certain variations due to averaging the metric over the three-year performance cycle.
|
Performance Metric
and Weighting
|
|
Performance Against Targets
|
|
Metric
Funding
|
|
CFCF (25%)
|
|
$6,132 million (pre-established target of $5,171 million and maximum of $6,671 million)
|
|
37.5
|
%
|
TSR (25%)
|
|
Ranked fourth within our core peer group (with funding dependent on our relative rank compared to our core peer group of 10 companies, including ourselves)
|
|
33.3
|
%
|
ROIC (50%)
|
|
14.55% (pre-established target of 13.61% and maximum of 15.36%)
|
|
75.0
|
%
|
|
|
|
|
|
|
|
|
|
|
145.8
|
%
|
Ownership Guidelines
|
|
CEO:
|
|
6 x base salary
|
|
|
COO:
|
|
4 x base salary
|
|
|
Senior Vice Presidents:
|
|
3 x base salary
|
|
|
Business Presidents:
|
|
3 x base salary
|
|
|
Other Elected Vice Presidents:
|
|
2 x base salary
|
|
|
|
|
|
Time to Meet Requirements
|
|
5 years from date on which guidelines become applicable to the officer.
|
||
|
|
Officers may not dispose of Company stock until attaining ownership thresholds and thereafter must maintain specified ownership levels.
|
|
the Raytheon Savings and Investment Plan (RAYSIP), a tax-qualified defined contribution retirement plan (401(k) plan);
|
|
the Raytheon Company Pension Plan for Salaried Employees, a tax-qualified, defined benefit pension plan that covers most of our salaried employees and
|
|
the Raytheon Non-Bargaining Retirement Plan, a tax-qualified, defined benefit pension plan that covers most
of the people who became Raytheon employees when Raytheon merged with Hughes Aircraft in 1997, including Mr. Kennedy.
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
(1)
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
(2)
($)
|
|
Change in
Pension Value
and Non-
qualified
Deferred
Compensation
Earnings
(3)(4)
($)
|
|
All Other
Compensation
(5)
($)
|
|
Total
($)
|
||||||||||||||||
William H. Swanson
|
|
2013
|
|
$
|
1,463,456
|
|
|
$
|
—
|
|
|
$
|
11,555,135
|
|
|
$
|
—
|
|
|
$
|
3,500,000
|
|
|
$
|
—
|
|
|
$
|
627,663
|
|
|
$
|
17,146,254
|
|
Chairman and Chief Executive Officer
|
|
2012
|
|
1,414,421
|
|
|
—
|
|
|
11,346,745
|
|
|
—
|
|
|
3,400,000
|
|
|
2,416,710
|
|
|
446,160
|
|
|
19,024,036
|
|
||||||||
|
2011
|
|
1,369,704
|
|
|
—
|
|
|
10,290,873
|
|
|
—
|
|
|
3,000,000
|
|
|
1,770,447
|
|
|
439,546
|
|
|
16,870,570
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Thomas A. Kennedy
|
|
2013
|
|
$
|
664,017
|
|
|
$
|
—
|
|
|
$
|
3,318,290
|
|
|
$
|
—
|
|
|
$
|
1,200,000
|
|
|
$
|
2,415,847
|
|
|
$
|
142,436
|
|
|
$
|
7,740,590
|
|
Executive Vice President and Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
David C. Wajsgras
|
|
2013
|
|
$
|
901,434
|
|
|
$
|
—
|
|
|
$
|
2,571,068
|
|
|
$
|
—
|
|
|
$
|
1,100,000
|
|
|
$
|
218,627
|
|
|
$
|
158,674
|
|
|
$
|
4,949,803
|
|
Senior Vice President and Chief Financial Officer
|
|
2012
|
|
871,800
|
|
|
—
|
|
|
2,429,367
|
|
|
—
|
|
|
1,000,000
|
|
|
600,782
|
|
|
138,098
|
|
|
5,040,047
|
|
||||||||
|
2011
|
|
844,245
|
|
|
—
|
|
|
2,318,452
|
|
|
—
|
|
|
865,000
|
|
|
477,304
|
|
|
131,395
|
|
|
4,636,396
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Jay B. Stephens
|
|
2013
|
|
$
|
788,926
|
|
|
$
|
—
|
|
|
$
|
2,265,579
|
|
|
$
|
—
|
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
120,986
|
|
|
$
|
4,175,491
|
|
Senior Vice President, General Counsel and Secretary
|
|
2012
|
|
762,979
|
|
|
—
|
|
|
2,227,106
|
|
|
—
|
|
|
950,000
|
|
|
856,563
|
|
|
122,096
|
|
|
4,918,744
|
|
||||||||
|
2011
|
|
738,863
|
|
|
—
|
|
|
2,167,063
|
|
|
—
|
|
|
755,000
|
|
|
713,881
|
|
|
120,110
|
|
|
4,494,917
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Daniel J. Crowley
|
|
2013
|
|
$
|
717,262
|
|
|
$
|
—
|
|
|
$
|
2,518,343
|
|
|
$
|
—
|
|
|
$
|
750,000
|
|
|
$
|
—
|
|
|
$
|
263,016
|
|
|
$
|
4,248,621
|
|
Vice President, and President, Integrated Defense Systems
|
|
2012
|
|
691,028
|
|
|
—
|
|
|
2,178,258
|
|
|
—
|
|
|
575,000
|
|
|
—
|
|
|
118,595
|
|
|
3,562,881
|
|
||||||||
|
2011
|
|
667,000
|
|
|
—
|
|
|
2,067,765
|
|
|
—
|
|
|
500,000
|
|
|
—
|
|
|
117,231
|
|
|
3,351,996
|
|
(1)
|
Amounts represent the aggregate grant date fair values of restricted stock and Long-Term Performance Plan (LTPP) awards granted in
2013
,
2012
and
2011
, respectively, in accordance with the accounting standard for share-based payments, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. Values for LTPP awards, which are subject to performance conditions, are computed based upon the probable outcome of the performance conditions as of the grant date of such awards. The values of the
2013-2015
LTPP awards at the grant date of such awards, assuming the highest level of performance conditions will be achieved during the three-year performance cycle, are as follows: Mr. Swanson - $
13,710,328
; Mr. Kennedy - $
2,636,639
; Mr. Wajsgras - $
2,742,090
; Mr. Stephens - $
2,531,188
; and Mr. Crowley - $
2,636,639
. For more information on potential payouts under the
2013-2015
LTPP awards, see "
2013
Grants of Plan-Based Awards" on page
50
.
|
(2)
|
Represents amounts earned pursuant to RBI awards for
2011
,
2012
and
2013
but which were paid in
2012
,
2013
and
2014
, respectively. A description of the material terms and conditions of the
2013
RBI awards can be found beginning on page
50
under the heading "
2013
Grants of Plan-Based Awards - Non-Equity Incentive Plan Awards."
|
(3)
|
The amounts represent the aggregate change in the actuarial present value of the named executive officer's accumulated benefit under all defined benefit and actuarial pension plans (including supplemental plans) from the end of the preceding year to the end of the reported year. Generally, these amounts represent the change in value of the named executive officer's benefit due to an additional year of service, changes in compensation and changes in the discount rate. The amounts were computed using the same assumptions we used for financial reporting purposes under the accounting standard for employers' accounting for pensions. Actual amounts paid under our plans are based on assumptions contained in the plans, which may be different than the assumptions used for financial statement reporting purposes.
|
(4)
|
None of the named executive officers received any earnings on their deferred compensation based on above-market or preferential rates (as defined by the SEC). For more information on our Deferred Compensation Plan, see "Nonqualified Deferred Compensation" on page
58
.
|
(5)
|
All Other Compensation amounts include, as applicable, (a) the value of perquisites and personal benefits (as defined by the SEC), (b) the amount of tax gross-ups, (c) the amount of Raytheon contributions to qualified and nonqualified defined contribution plans, (d) the value of insurance premiums paid and (e) certain other payments or items of compensation. Where the value of the items reported in a particular category for a named executive officer exceeded $10,000 in
2013
, those items are identified and quantified below.
|
|
Mr. Swanson's amount includes an aggregate of
$391,655
for personal use of Raytheon aircraft, personal use of a Raytheon-leased car and certain driving services, a car allowance, financial planning services, home security system and other security expenses and certain travel and incidental expenses relating to his spouse attending Raytheon-related events at our request.
|
|
Mr. Kennedy's amount includes an aggregate of
$37,270
for a car allowance, financial planning services, certain travel and incidental expenses relating to his spouse attending Raytheon-related events at our request and an executive physical.
|
|
Mr. Wajsgras' amount includes an aggregate of
$47,345
for a car allowance, financial planning services, certain travel and incidental expenses relating to his spouse attending Raytheon-related events at our request and an executive physical.
|
|
Mr. Stephens' amount includes an aggregate of
$32,609
for a car allowance, financial planning services, certain travel and incidental expenses relating to his spouse attending Raytheon-related events at our request and an executive physical.
|
|
Mr. Crowley's amount includes an aggregate of
$108,587
for a car allowance, financial planning services, relocation benefits and certain travel and incidental expenses relating to his spouse attending Raytheon-related events at our request.
|
|
We derived an average variable operating cost per hour for such aircraft based on fuel, aircraft maintenance, landing, parking, and catering costs, certain taxes and certain other miscellaneous fees and costs, and the hours flown. Since our corporate aircraft are used primarily for business travel, we did not include fixed costs for such aircraft that generally do
|
|
In determining the number of hours that an aircraft was used for personal purposes, we did not include the flight time of any "deadhead" flight, e.g., a return flight on which no passenger was aboard.
|
|
For trips that involved mixed personal and business usage, we determined the total variable cost attributable to personal use by subtracting the total variable cost of a "business-only" trip from the total variable cost of the whole trip (both personal and business).
|
|
We determined our total annual cost for each pooled vehicle used by such executives for personal purposes and then allocated such total cost based on the total miles driven in the year and the number of miles driven for each executive for personal purposes, as tracked by our administrators.
|
|
We determined our total cost for each driver and then allocated such amount based on the total hours worked and the estimated number of hours that such driver drove the executive for personal purposes.
|
|
|
Mr. Swanson
|
|
Mr. Kennedy
|
|
Mr. Wajsgras
|
|
Mr. Stephens
|
|
Mr. Crowley
|
||||||||||
RAYSIP 401(k) Plan Match
|
|
$
|
10,200
|
|
|
$
|
10,200
|
|
|
$
|
10,200
|
|
|
$
|
4,749
|
|
|
$
|
7,650
|
|
RAYSIP RISP Contribution
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
10,200
|
|
|||||
Deferred Compensation Plan Match
|
|
188,338
|
|
|
64,361
|
|
|
69,857
|
|
|
61,357
|
|
|
36,368
|
|
|||||
Deferred Compensation Plan RISP
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
48,490
|
|
|||||
Total
|
|
$
|
198,538
|
|
|
$
|
74,561
|
|
|
$
|
80,057
|
|
|
$
|
66,106
|
|
|
$
|
102,708
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards
(1)
|
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards
(2)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Name
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target(#)
|
|
Maximum
(#)
|
|
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)
(3)
|
|
All Other
Option
Awards:
Number
of
Securities
Under-
lying
Options
(#)
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)
(4)
|
|||||||||||||||
William H. Swanson
|
1/23/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,036
|
|
|
111,684
|
|
|
223,368
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
6,855,164
|
|
|||
|
5/30/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,805
|
|
|
—
|
|
|
—
|
|
|
4,699,971
|
|
||||
|
—
|
|
|
$
|
444,238
|
|
|
$
|
2,961,587
|
|
|
$
|
5,923,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Thomas A. Kennedy
|
1/23/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,353
|
|
|
21,478
|
|
|
42,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,318,320
|
|
|||
|
5/30/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,704
|
|
|
—
|
|
|
—
|
|
|
1,999,970
|
|
||||
|
—
|
|
|
$
|
168,751
|
|
|
$
|
1,125,010
|
|
|
$
|
2,250,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
David C. Wajsgras
|
1/23/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,407
|
|
|
22,337
|
|
|
44,674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,371,045
|
|
|||
|
5/30/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,823
|
|
|
—
|
|
|
—
|
|
|
1,200,023
|
|
||||
|
—
|
|
|
$
|
136,771
|
|
|
$
|
911,810
|
|
|
$
|
1,823,619
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Jay B. Stephens
|
1/23/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,299
|
|
|
20,619
|
|
|
41,238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,265,594
|
|
|||
|
5/30/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,852
|
|
|
—
|
|
|
—
|
|
|
999,985
|
|
||||
|
—
|
|
|
$
|
119,702
|
|
|
$
|
798,013
|
|
|
$
|
1,596,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Daniel J. Crowley
|
1/23/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,353
|
|
|
21,478
|
|
|
42,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,318,320
|
|
|||
|
5/30/2013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,823
|
|
|
—
|
|
|
—
|
|
|
1,200,023
|
|
||||
|
—
|
|
|
$
|
109,041
|
|
|
$
|
726,939
|
|
|
$
|
1,453,878
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Amounts represent the threshold, target and maximum payout opportunities under the
2013
RBI Program.
|
(2)
|
Amounts represent the threshold, target and maximum payouts under the
2013-2015
LTPP awards. LTPP payouts range from zero to 200% of target and may be paid in our common stock or in cash, at the discretion of the MDCC. The amounts do not include any accrued dividend equivalents.
|
(3)
|
Amounts represent awards of time-vesting restricted stock.
|
(4)
|
Amounts represent the grant date fair value of the restricted stock and
2013-2015
LTPP awards granted to the named executive officer in
2013
in accordance with the accounting standard for share-based payments, disregarding for this purpose the estimate of forfeitures related to service based vesting conditions. Such values are generally expensed by us over the employee's requisite service period, generally the vesting period of the awards. Values for the
2013-2015
LTPP awards, which are subject to performance conditions, are computed based upon the probable outcome of the performance conditions as of the grant date of such awards.
|
|
Bookings - 20% - a forward-looking metric that measures the value of new contracts awarded to us during the year and an indicator of potential future growth.
|
|
Net Sales - 30% - a growth metric that measures our revenue for the current year.
|
|
Free Cash Flow (FCF) - 20% - a measure of the cash that is generated in a given year that we can use to make strategic investments to grow our businesses or return to our shareholders.
|
|
Operating Income from Continuing Operations - 30% - a measure of our profit from continuing operations for the year, before interest and taxes, and after certain non-operational adjustments.
|
|
FCF is operating cash flow from continuing operations less capital spending and internal use software spending, excluding the impact of changes to cash flow from pension and post-retirement benefits-related items and other similar non-operational items.
|
|
Operating Income from Continuing Operations is operating income from continuing operations, excluding the FAS/CAS pension and post-retirement benefits expense/income and, from time to time, certain other items.
|
|
CFCF measures, on a cumulative basis, the cash that is generated over the three-year performance cycle, which we can use to make strategic investments to grow our businesses or return to our shareholders.
|
|
The TSR component of the LTPP compares our stock price appreciation, including reinvested dividends, over the performance cycle to our peers' stock performance over the same period and provides a percentage ranking.
|
|
ROIC measures how efficiently and effectively we use capital that is invested in our operations over the performance cycle.
|
|
Option Awards
(1)
|
|
Stock Awards
|
|||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
(2)
($)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(3)
(#)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights That
Have Not
Vested
(2)
($)
|
|||||||||||
William H. Swanson
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
238,120
|
|
(4)
|
$
|
21,597,484
|
|
|
257,683
|
|
(5)(14)
|
$
|
23,371,848
|
|
Thomas A. Kennedy
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,183
|
|
(6)
|
5,367,898
|
|
|
49,555
|
|
(7)(14)
|
4,494,639
|
|
||
David C. Wajsgras
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,398
|
|
(8)
|
5,387,399
|
|
|
51,538
|
|
(9)(14)
|
4,674,497
|
|
||
Jay B. Stephens
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,454
|
|
(10)
|
4,848,278
|
|
|
47,574
|
|
(11)(14)
|
4,314,962
|
|
||
Daniel J. Crowley
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,359
|
|
(12)
|
4,658,261
|
|
|
49,555
|
|
(13)(14)
|
4,494,639
|
|
(1)
|
As of
December 31, 2013
, none of our named executive officers held any outstanding options. For a further discussion, please see pages
40
and
44
in "Compensation Discussion and Analysis."
|
(2)
|
Amounts are equal to
$90.70
, the closing price of our common stock on the NYSE on
December 31, 2013
, times the number of unvested shares or units.
|
(3)
|
Amounts represent the number of shares that would be issued upon vesting of awards of restricted stock units under the
2013-2015
LTPP and
2012-2014
LTPP, assuming target performance for the applicable 3-year performance cycle and settlement of such awards in shares of stock. They also include the number of shares representing accrued dividend equivalents on such LTPP awards as of
December 31, 2013
. Amounts do not include any shares for the
2011-2013
LTPP awards as the 3-year performance cycle for such awards ended as of
December 31, 2013
. Information on the
2011-2013
LTPP awards and the shares issued to the named executive officers in February
2014
, including accrued dividend equivalents, is set forth in the "
2013
Option Exercises and Stock Vested" table on page
55
.
|
(4)
|
Includes
24,063
,
25,425
,
25,425
,
31,134
,
31,134
,
31,134
,
23,268
,
23,268
and
23,269
shares of restricted stock that vest on
May 27, 2014
,
May 26, 2014
,
May 26, 2015
,
May 31, 2014
,
May 31, 2015
,
May 31, 2016
,
May 30, 2015
,
May 30, 2016
and
May 30, 2017
, respectively, subject, in each case, to Mr. Swanson remaining employed by us.
|
(5)
|
Includes
111,684
and
130,758
shares for Mr. Swanson's
2013-2015
LTPP and
2012-2014
LTPP awards, respectively. Also includes
3,078
and
12,163
shares, which represent accrued dividend equivalents on such LTPP awards, respectively, as of
December 31, 2013
. See Note 14 below for information regarding the vesting of and payouts under these LTPP awards.
|
(6)
|
Includes
887
,
5,353
,
5,353
,
5,962
,
5,962
,
5,962
,
9,901
,
9,901
and
9,902
shares of restricted stock that vest on
May 27, 2014
,
May 26, 2014
,
May 26, 2015
,
May 31, 2014
,
May 31, 2015
,
May 31, 2016
,
May 30, 2015
,
May 30, 2016
and
May 30, 2017
, respectively, subject, in each case, to Mr. Kennedy remaining employed by us.
|
(7)
|
Includes
21,478
and
25,146
shares for Mr. Kennedy's
2013-2015
LTPP and
2012-2014
LTPP awards, respectively. Also includes
592
and
2,339
shares, which represent accrued dividend equivalents on such LTPP awards, respectively, as of
December 31, 2013
. See Note 14 below for information regarding the vesting of and payouts under these LTPP awards.
|
(8)
|
Includes
6,333
,
6,691
,
6,691
,
7,286
,
7,287
,
7,287
,
5,941
,
5,941
and
5,941
shares of restricted stock that vest on
May 27, 2014
,
May 26, 2014
,
May 26, 2015
,
May 31, 2014
,
May 31, 2015
,
May 31, 2016
,
May 30, 2015
,
May 30, 2016
and
May 30, 2017
, respectively, subject, in each case, to Mr. Wajsgras remaining employed by us.
|
(9)
|
Includes
22,337
and
26,152
shares for Mr. Wajsgras'
2013-2015
LTPP and
2012-2014
LTPP awards, respectively. Also includes
616
and
2,433
shares, which represent accrued dividend equivalents on such LTPP awards, respectively, as of
December 31, 2013
. See Note 14 below for information regarding the vesting of and payouts under these LTPP awards.
|
(10)
|
Includes
6,016
,
6,356
,
6,357
,
6,624
,
6,624
,
6,625
,
4,950
,
4,951
and
4,951
shares of restricted stock that vest on
May 27, 2014
,
May 26, 2014
,
May 26, 2015
,
May 31, 2014
,
May 31, 2015
,
May 31, 2016
,
May 30, 2015
,
May 30, 2016
and
May 30, 2017
, respectively, subject, in each case, to Mr. Stephens remaining employed by us.
|
(11)
|
Includes
20,619
and
24,140
shares for Mr. Stephens'
2013-2015
LTPP and
2012-2014
LTPP awards, respectively. Also includes
569
and
2,246
shares, which represent accrued dividend equivalents on such LTPP awards, respectively, as of
December 31, 2013
. See Note 14 below for information regarding the vesting of and payouts under these LTPP awards.
|
(12)
|
Includes
4,944
,
5,353
,
5,353
,
5,962
,
5,962
,
5,962
,
5,941
,
5,941
and
5,941
shares of restricted stock that vest on
December 6, 2014
,
May 26, 2014
,
May 26, 2015
,
May 31, 2014
,
May 31, 2015
,
May 31, 2016
,
May 30, 2015
,
May 30, 2016
and
May 30, 2017
respectively, subject, in each case other than as provided herein, to Mr. Crowley remaining employed by us.
|
(13)
|
Includes
21,478
and
25,146
shares for Mr. Crowley's
2013-2015
LTPP and
2012-2014
LTPP awards, respectively. Also includes
592
and
2,339
shares, which represent accrued dividend equivalents on such LTPP awards, respectively, as of
December 31, 2013
. See Note 14 below for information regarding the vesting of and payouts under these LTPP awards.
|
(14)
|
Awards of restricted stock units under the LTPP vest upon the completion of the applicable 3-year performance cycle, subject to the attainment of certain performance goals over the performance cycle and the executive remaining employed by us. These awards may be settled in shares of our common stock or cash, and the actual number of shares to be issued or cash to be paid upon settlement will be based on the extent to which we have attained or exceeded the performance goals, which performance is determined by the MDCC shortly after the completion of the 3-year performance cycle. Such awards also include dividend equivalents accrued over the 3-year performance cycle.
|
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||
Name
|
|
Number of
Shares
Acquired on
Exercise (#)
|
|
Value
Realized on
Exercise
(1)
($)
|
|
Number of
Shares
Acquired on
Vesting (#)
|
|
Value
Realized on
Vesting
(2)
($)
|
|
|||||
William H. Swanson
|
|
—
|
|
|
—
|
|
|
278,082
|
|
(3)
|
$
|
23,435,793
|
|
|
Thomas A. Kennedy
|
|
—
|
|
|
—
|
|
|
47,882
|
|
(4)
|
4,146,263
|
|
|
|
David C. Wajsgras
|
|
—
|
|
|
—
|
|
|
61,158
|
|
(5)
|
5,076,992
|
|
|
|
Jay B. Stephens
|
|
—
|
|
|
—
|
|
|
57,005
|
|
(6)
|
4,723,792
|
|
|
|
Daniel J. Crowley
|
|
—
|
|
|
—
|
|
|
56,470
|
|
(7)
|
4,950,736
|
|
|
(1)
|
These amounts are equal to the number of shares underlying the exercised option times the difference between the sales price of the shares and the exercise price of the option.
|
(2)
|
These amounts are equal to the closing price of our common stock on the NYSE on the vesting date times the number of shares vested.
|
(3)
|
Includes
200,250
shares which were issued to Mr. Swanson in February
2014
upon the MDCC's determination of performance under the
2011-2013
LTPP (which includes accrued dividend equivalents), which had vested at the end of
2013
.
|
(4)
|
Includes
39,112
shares which were issued to Mr. Kennedy in February
2014
upon the MDCC's determination of performance under the
2011-2013
LTPP (which includes accrued dividend equivalents), which had vested at the end of
2013
.
|
(5)
|
Includes
40,677
shares which were issued to Mr. Wajsgras in February
2014
upon the MDCC's determination of performance under the
2011-2013
LTPP (which includes accrued dividend equivalents), which had vested at the end of
2013
.
|
(6)
|
Includes
37,547
shares which were issued to Mr. Stephens in February
2014
upon the MDCC's determination of performance under the
2011-2013
LTPP (which includes accrued dividend equivalents), which had vested at the end of
2013
.
|
(7)
|
Includes
39,112
shares which were issued to Mr. Crowley in February
2014
upon the MDCC's determination of performance under the
2011-2013
LTPP (which includes accrued dividend equivalents), which had vested at the end of
2013
.
|
Name
|
|
Plan
Name
|
|
Number of
Years of
Credited
Service
(#)
|
|
Present
Value of
Accumulated
Benefit ($)
|
|
Payments
During
the Last
Fiscal
Year ($)
|
|||||
William H. Swanson
|
|
Qualified
|
|
40.34
|
|
|
$
|
1,590,261
|
|
|
$
|
—
|
|
|
|
Excess
|
|
40.34
|
|
|
30,791,411
|
|
|
—
|
|
||
|
|
SERP
|
|
41.50
|
|
|
—
|
|
|
—
|
|
||
Thomas A. Kennedy
|
|
Qualified
|
|
23.42
|
|
|
$
|
2,532,534
|
|
|
$
|
—
|
|
|
|
Excess
|
|
23.42
|
|
|
6,975,776
|
|
|
—
|
|
||
|
|
SERP
|
|
30.58
|
|
|
—
|
|
|
—
|
|
||
David C. Wajsgras
|
|
Qualified
|
|
6.75
|
|
|
$
|
264,834
|
|
|
$
|
—
|
|
|
|
Excess
|
|
6.75
|
|
|
1,773,703
|
|
|
—
|
|
||
|
|
SERP
|
|
7.75
|
|
|
—
|
|
|
—
|
|
||
Jay B. Stephens
(1)
|
|
Qualified
|
|
15.17
|
|
|
$
|
450,990
|
|
|
$
|
—
|
|
|
|
Excess
|
|
15.17
|
|
|
2,710,012
|
|
|
—
|
|
||
|
|
SERP
|
|
16.17
|
|
|
5,052,544
|
|
|
—
|
|
||
Daniel J. Crowley
(2)
|
|
Qualified
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||
|
|
Excess
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||
|
|
SERP
|
|
3.08
|
|
|
—
|
|
|
—
|
|
(1)
|
Reflects five additional years of credited service under our pension plans, including the SERP, which Mr. Stephens received upon completion of five years of employment with us in October 2007.
|
(2)
|
As he was hired after December 31, 2006, Mr. Crowley participates in RISP as further described in our "Compensation Discussion and Analysis" on page
42
. Mr. Crowley does not participate in a qualified pension plan or the Excess Pension Plan.
|
|
1.8% for each of the first 20 years of credited service; and
|
|
1.2% for each year of credited service thereafter.
|
Name
|
|
Executive
Contributions
in Last Fiscal
Year
(1)
($)
|
|
Registrant
Contributions
in Last Fiscal
Year
(2)
($)
|
|
Aggregate
Earnings in
Last Fiscal
Year
(3)
($)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
Last Fiscal
Year-End
(4)
($)
|
||||||||||
William H. Swanson
|
|
$
|
189,734
|
|
|
$
|
188,338
|
|
|
$
|
464,073
|
|
|
$
|
—
|
|
|
$
|
5,771,950
|
|
Thomas A. Kennedy
|
|
176,756
|
|
|
64,361
|
|
|
114,547
|
|
|
—
|
|
|
911,222
|
|
|||||
David C. Wajsgras
|
|
366,370
|
|
|
69,857
|
|
|
563,553
|
|
|
—
|
|
|
4,206,929
|
|
|||||
Jay B. Stephens
|
|
852,482
|
|
|
61,357
|
|
|
440,725
|
|
|
—
|
|
|
8,140,841
|
|
|||||
Daniel J. Crowley
|
|
204,985
|
|
|
84,858
|
|
|
175,304
|
|
|
—
|
|
|
863,402
|
|
(1)
|
Contributions of deferred salary and RBI compensation earned in
2013
to the Deferred Compensation Plan. Deferred salary and
2013
RBI compensation are included in the amounts under the "Salary" column and the "Non-Equity Incentive Plan Compensation" column, respectively, for
2013
in the Summary Compensation Table on page
46
. Deferred
2013
RBI compensation was earned in
2013
but was paid in March
2014
.
|
(2)
|
Raytheon matching contributions on deferred salary and RBI compensation earned in
2013
under the Deferred Compensation Plan. Matching contributions are included in the "All Other Compensation" column for
2013
in the Summary Compensation Table on page
46
. Matching contributions on deferred
2013
RBI compensation were earned in
2013
but were made in March
2014
when the
2013
RBI awards were paid. Amounts for Mr. Crowley also include Raytheon RISP contributions.
|
(3)
|
Earnings on deferred compensation are not included in the Summary Compensation Table for
2013
because such earnings are not based on above-market or preferential rates.
|
(4)
|
Amounts shown are actual aggregate account balances as of
December 31, 2013
plus (a) deferred
2013
RBI compensation (see footnote 1 above), (b) Raytheon matching contributions on such deferred
2013
RBI compensation (see footnote 2 above) and (c) Raytheon RISP contributions relating to
2013
RBI compensation. The aggregate balances include the following executive contributions and Raytheon matching and RISP contributions reported as compensation earned in
2012
and
2011
in the Summary Compensation Table:
|
Year
|
|
Contribution
|
|
Mr. Swanson
|
|
Mr. Kennedy
|
|
Mr. Wajsgras
|
|
Mr. Stephens
|
|
Mr. Crowley
|
||||||||
2012
|
|
Executive
|
|
$
|
184,062
|
|
|
N/A
|
|
$
|
256,169
|
|
|
$
|
811,611
|
|
|
$
|
143,750
|
|
|
|
Raytheon Matching
|
|
182,577
|
|
|
N/A
|
|
64,872
|
|
|
58,519
|
|
|
54,291
|
|
||||
2011
|
|
Executive
|
|
166,521
|
|
|
N/A
|
|
232,502
|
|
|
473,421
|
|
|
137,660
|
|
||||
|
|
Raytheon Matching
|
|
164,988
|
|
|
N/A
|
|
58,570
|
|
|
49,955
|
|
|
51,820
|
|
Element
|
Voluntary
Resignation
|
|
Involuntary
For Cause
|
|
Involuntary
Without
Cause
|
|
Change-in-
Control
|
|
Disability
|
|
Death
|
|
Retirement
|
||||||||||||||
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Base Salary + Target RBI
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,282,722
|
|
|
$
|
14,642,382
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pro-rata Target RBI
|
—
|
|
|
—
|
|
|
—
|
|
|
2,961,588
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Health and Welfare Benefit Continuation
(2)
|
—
|
|
|
—
|
|
|
53,516
|
|
|
53,516
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-Term Incentives
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Value of Accelerated Restricted Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
21,597,484
|
|
|
21,597,484
|
|
|
21,597,484
|
|
|
—
|
|
|||||||
Value of Accelerated LTPP (pro-rata)
|
—
|
|
|
—
|
|
|
—
|
|
|
12,665,439
|
|
|
12,665,439
|
|
|
12,665,439
|
|
|
12,665,439
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,336,238
|
|
|
$
|
51,920,409
|
|
|
$
|
34,262,923
|
|
|
$
|
34,262,923
|
|
|
$
|
12,665,439
|
|
Element
|
Voluntary
Resignation
|
|
Involuntary
For Cause
|
|
Involuntary
Without
Cause
|
|
Change-in-
Control
|
|
Disability
|
|
Death
|
|
Retirement
|
||||||||||||||
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Base Salary + Target RBI
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,875,015
|
|
|
$
|
5,625,045
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pro-rata Target RBI
|
—
|
|
|
—
|
|
|
—
|
|
|
1,125,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension
(1)
|
—
|
|
|
—
|
|
|
3,061,454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Health and Welfare Benefit Continuation
(2)
|
—
|
|
|
—
|
|
|
32,975
|
|
|
98,924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-Term Incentives
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Value of Accelerated Restricted Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
5,367,898
|
|
|
5,367,898
|
|
|
5,367,898
|
|
|
—
|
|
|||||||
Value of Accelerated LTPP (pro-rata)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,435,688
|
|
|
2,435,688
|
|
|
2,435,688
|
|
|
2,435,688
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,969,444
|
|
|
$
|
14,652,564
|
|
|
$
|
7,803,586
|
|
|
$
|
7,803,586
|
|
|
$
|
2,435,688
|
|
Element
|
Voluntary
Resignation
|
|
Involuntary
For Cause
|
|
Involuntary
Without
Cause
|
|
Change-in-
Control
|
|
Disability
|
|
Death
|
|
Retirement
|
||||||||||||||
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Base Salary + Target RBI
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,647,240
|
|
|
$
|
5,735,430
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pro-rata Target RBI
|
—
|
|
|
—
|
|
|
—
|
|
|
911,810
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension
(1)
|
—
|
|
|
—
|
|
|
527,851
|
|
|
2,823,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Health and Welfare Benefit Continuation
(2)
|
—
|
|
|
—
|
|
|
55,296
|
|
|
82,944
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-Term Incentives
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Value of Accelerated Restricted Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
5,387,399
|
|
|
5,387,399
|
|
|
5,387,399
|
|
|
—
|
|
|||||||
Value of Accelerated LTPP (pro-rata)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,533,191
|
|
|
2,533,191
|
|
|
2,533,191
|
|
|
2,533,191
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,230,387
|
|
|
$
|
17,474,128
|
|
|
$
|
7,920,590
|
|
|
$
|
7,920,590
|
|
|
$
|
2,533,191
|
|
Element
|
Voluntary
Resignation
|
|
Involuntary
For Cause
|
|
Involuntary
Without
Cause
|
|
Change-in-
Control
|
|
Disability
|
|
Death
|
|
Retirement
|
||||||||||||||
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Base Salary + Target RBI
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,192,052
|
|
|
$
|
5,244,039
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pro-rata Target RBI
|
—
|
|
|
—
|
|
|
—
|
|
|
798,013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Health and Welfare Benefit Continuation
(2)
|
—
|
|
|
—
|
|
|
19,132
|
|
|
28,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-Term Incentives
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Value of Accelerated Restricted Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
4,848,278
|
|
|
4,848,278
|
|
|
4,848,278
|
|
|
—
|
|
|||||||
Value of Accelerated LTPP (pro-rata)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,338,367
|
|
|
2,338,367
|
|
|
2,338,367
|
|
|
2,338,367
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,211,184
|
|
|
$
|
13,257,394
|
|
|
$
|
7,186,645
|
|
|
$
|
7,186,645
|
|
|
$
|
2,338,367
|
|
Element
|
Voluntary
Resignation
|
|
Involuntary
For Cause
|
|
Involuntary
Without
Cause
|
|
Change-in-
Control
|
|
Disability
|
|
Death
|
|
Retirement
|
||||||||||||||
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Base Salary + Target RBI
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,453,878
|
|
|
$
|
4,361,634
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pro-rata Target RBI
|
—
|
|
|
—
|
|
|
—
|
|
|
726,939
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Health and Welfare Benefit Continuation
(2)
|
—
|
|
|
—
|
|
|
26,467
|
|
|
79,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-Term Incentives
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Value of Accelerated Restricted Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
4,658,261
|
|
|
4,658,261
|
|
|
4,658,261
|
|
|
—
|
|
|||||||
Value of Accelerated LTPP (pro-rata)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,435,688
|
|
|
2,435,688
|
|
|
2,435,688
|
|
|
2,435,688
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,480,345
|
|
|
$
|
12,261,923
|
|
|
$
|
7,093,949
|
|
|
$
|
7,093,949
|
|
|
$
|
2,435,688
|
|
(1)
|
Pension benefits are calculated assuming a 5.20% discount rate, other than for Mr. Kennedy who participates in the Raytheon Non-Bargaining Retirement Plan and whose benefits are calculated assuming a 4.90% discount rate, as of fiscal year-end under the assumption that the executive commenced the benefit as soon as possible following separation from service.
|
(2)
|
Health and Welfare Benefit calculations are based on the estimated annual Company cost of the benefits programs in which the executive was enrolled as of
December 31, 2013
.
|
(3)
|
Equity values are determined based on the closing price of our common stock on
December 31, 2013
(
$90.70
) based on equity holdings as of
December 31, 2013
.
|
|
Pay for Performance: Tying executive compensation to Company and individual performance over both the near- and long-term (see pages 28 to 41);
|
|
Shareholder Alignment: Aligning closely the interests of executives with those of shareholders by making stock-based incentives a central component of compensation coupled with meaningful stock ownership and retention requirements (see pages 28 to 31 and 39 to 41);
|
|
Balanced Incentives: Providing awards with both significant upside opportunity for exceptional performance and downside risk for underperformance (see pages 28 to 41);
|
|
Clawback Rights: Recovery or clawback of compensation in certain circumstances where restatement of financial results is required (see page 43);
|
|
Substantial Variable Component: Assuring that a substantial component of each executive's compensation opportunity is variable, based upon the Company's financial performance and stock price (see pages 28 to 29);
|
|
Short-Term Versus Long-Term: Achieving a balance in the compensation program between short-term versus long-term incentives (see pages 28 to 29);
|
|
Use of Key Financial Metrics: Using pre-established financial measures for purposes of determining Results-Based Incentive (RBI) cash awards and Long-Term Performance Plan (LTPP) equity-based awards that drive short-term and long-term performance and link compensation to performance (see pages 31 and 35 to 40);
|
|
Consultant Independence: Assuring that the MDCC's compensation consultant is independent by adhering to a stringent Compensation Consultant Independence Policy (see page 32);
|
|
Market Focus: Taking into account the practices of peer companies, as well as broader market survey data provided by the MDCC's independent consultant in setting executive compensation (see page 29 and pages 33 to 35);
|
|
Competitiveness: Establishing an executive compensation program that addresses the need to retain and attract highly-qualified executives essential to the Company's success in a highly competitive environment (see pages 28 to 29 and 33 to 35); and
|
|
Managing Risk: Designing the compensation program to avoid excessive risk-taking (see pages 32 to 33).
|
|
the integrity of Raytheon's financial statements;
|
|
the independence, qualifications and performance of Raytheon's independent auditors; and
|
|
the performance of Raytheon's internal auditors.
|
|
2013
|
|
|
2012
|
|
Audit Fees
(1)
|
$ 11.0 million
|
|
|
$ 11.2 million
|
|
Audit-Related Fees
(2)
|
0.3 million
|
|
|
0.3 million
|
|
Tax Fees
(3)
|
1.1 million
|
|
|
0.9 million
|
|
All Other Fees
|
—
|
|
|
—
|
|
|
|
|
|
||
Total
|
$ 12.4 million
|
|
|
$ 12.4 million
|
|
(1)
|
Represents fees and expenses for professional services provided in connection with the audit of our annual audited financial statements and review of our quarterly financial statements, advice on accounting matters directly related to the audit and audit services provided in connection with other financial statements, and other statutory or regulatory filings.
|
(2)
|
Represents fees and expenses for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported under "Audit Fees." For both
2013
and
2012
, fees are primarily for audits of financial statements of 401(k) and other employee benefit plans and for certain agreed-upon procedures.
|
(3)
|
Includes approximately (i) $0.3 million and $0.4 million for non-U.S. tax compliance and advisory services and (ii) $0.8 million and $0.5 million for U.S. tax compliance and advisory services in
2013
and
2012
, respectively.
|
|
December 26, 2014, if the proposal is submitted for inclusion in our proxy materials for the 2015 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934; or
|
|
Between January 29, 2015 and February 28, 2015, if the proposal is submitted in accordance with our By-Laws, in which case we are not required to include the proposal in our proxy materials.
|
1.
|
Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
|
2.
|
Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
|
(a)
|
The identity of the recipient as well as the amount paid to each; and
|
(b)
|
The title(s) of the person(s) in the Company responsible for decision-making.
|
By Order of the Board of Directors,
|
|
Jay B. Stephens
|
Secretary
|