Raytheon Company (RTN)

Certain Relationships and Related Transactions

We do not currently provide personal loans to our executive officers or directors. The following loan was made prior to the adoption of the Sarbanes-Oxley Act of 2002. In 1999, we provided William H. Swanson an interest-free loan of $1,000,000 to assist him in his relocation from Washington, D.C. to California. The loan was secured by a mortgage on Mr. Swanson’s home. In connection with the reorganization of our defense businesses, Mr. Swanson subsequently relocated from California to Massachusetts and the loan became secured by a mortgage on Mr. Swanson’s Massachusetts home. The highest amount outstanding during 2006 was $630,000 and the principal amount of such loan as of the date of this proxy statement was $410,000.

In January 2007, the Board, upon the recommendation of the Governance and Nominating Committee, adopted a written Related Party Transactions Policy providing for the review and approval or ratification by the Governance and Nominating Committee of certain transactions or relationships involving Raytheon and its directors, executive officers, certain stockholders and their affiliates. In reviewing a transaction or relationship, the Governance and Nominating Committee will take into account, among other factors it deems appropriate, whether it is on terms no more favorable than to an unaffiliated third party under similar circumstances, as well as the extent of the related party’s interest in the transaction.

Certain Relationships and Related Transactions

We do not currently provide personal loans to our executive officers or directors. The following disclosure describes a loan made prior to the Sarbanes-Oxley Act of 2002. In 1999, we provided William H. Swanson an interest-free loan of $1,000,000 to assist him in his relocation from Washington, D.C. to California. The loan was secured by a mortgage on Mr. Swanson’s home. In connection with the reorganization of our defense businesses, Mr. Swanson subsequently relocated from California to Massachusetts and the loan became secured by a mortgage on Mr. Swanson’s Massachusetts home. The highest amount outstanding during 2005 was $725,000 and the balance as of the date of publication of this proxy statement was $525,000.

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In January 1999, we converted our payroll system from a monthly to a bi-weekly pay cycle. In connection with the conversion, all employees at that time effectively received a two-week pay advance. The outstanding pay advance for William H. Swanson, Jack R. Kelble and Louise L. Francesconi was $12,082, $6,210 and $6,154, respectively. These pay advances were paid in full in March 2005.

Erik Daniel Smith, the son of Daniel Smith, President of our Integrated Defense Systems business unit, is an employee of the Company. During 2005, Erik Smith received cash compensation of approximately $75,000. Todd Keebaugh, the son of Michael Keebaugh, President of our Intelligence and Information Systems business unit, was an employee of the Company through June 2005. Todd Keebaugh received cash compensation of approximately $107,000 with respect to his employment during that period.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This information is contained in the Company’s definitive proxy statement for the 2006 Annual Meeting of Stockholders under the caption “Certain Relationships and Related Transactions” and is incorporated herein by reference.

Certain Relationships and Related Transactions

The Company does not currently provide personal loans to its executive officers or directors. The following disclosure describes loans made by the Company to executive officers prior to the Sarbanes-Oxley Act of 2002.

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In 1998, the Company provided Jack R. Kelble, President of the Company’s Space and Airborne Systems unit, an interest-free loan of $500,000 to assist him in his relocation from Massachusetts to California. This loan was secured by a second mortgage on Mr. Kelble’s home. The highest outstanding balance during 2004 was $420,000. Mr. Kelble paid the loan in full in February 2004.

In 1999, the Company provided Mr. Swanson an interest-free loan of $1,000,000 to assist him in his relocation from Washington, D.C. to California. The loan was secured by a mortgage on Mr. Swanson’s home. In connection with the reorganization of the Company’s defense businesses, Mr. Swanson relocated from California to Massachusetts and the loan became secured by a mortgage on Mr. Swanson’s Massachusetts home. The highest amount outstanding during 2004 was $810,000 and the balance as of the date of publication of this proxy statement was $630,000.

In 2001, the Company provided Gregory S. Shelton, Vice President—Engineering and Technology, an interest-free loan of $350,000 to assist him in his relocation from Arizona to Massachusetts. This loan was secured by a second mortgage on Mr. Shelton’s home. The highest outstanding balance during 2004 was $350,000. Mr. Shelton paid the loan in full in November 2004.

In January 1999, the Company converted its payroll system from a monthly to a bi-weekly pay cycle. In connection with the conversion, all employees at that time effectively received a two-week pay advance. As of December 31, 2004, the outstanding pay advance for each of Messrs. Swanson, Kelble and Shelton and Louise L. Francesconi was $12,082, $6,210, $3,702 and $6,154, respectively. These pay advances were paid in full in March 2005.