Exhibit 10.39
Summary of Raytheon Company Long-Term Performance Plan
 
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The Long-Term Performance Plan (the “LTPP”) is an incentive compensation plan
for Raytheon Company (the “Company”) senior executives, including executive
officers, designed to promote leadership teamwork toward achieving common
performance goals and to foster an effective link between long-term rewards and
performance against internal and external goals.

 
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Each participating senior executive will receive a restricted stock unit award
under the LTPP which will entitle the executive to the right to earn shares of
the Company’s common stock or cash upon the attainment of the pre-established
performance goals over a three-year plan period. The fully independent
Management Development and Compensation Committee (the “Committee”) of the
Company’s Board of Directors establishes the specific pre-established levels of
Company performance for each three year LTPP cycle.

 
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The Committee approved three metrics for purposes of determining performance
goals weighted as follows: return on invested capital (50%); cumulative free
cash flow (25%); and total shareholder return (25%). The goals are independent
and additive, which means that if the threshold performance as to one measure is
missed, no credit would apply to that element, but could be made up for by
above-target performance in another area.
 
 
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Each executive will receive an award with a threshold, target and maximum
payout. The awards will settle based upon our performance over the cumulative
three-year plan period with respect to the stated goals. If the Company’s
performance with respect to all three metrics fails to meet the threshold, then
the awards will not vest and no payout under the awards will be made. If the
Company’s performance with respect to any or all of the three metrics meets or
exceeds the threshold, then a varying amount of shares or cash, up to the
maximum, may be earned.

 
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The awards may be settled in shares of the Company’s common stock or cash at the
discretion of the Committee. The LTPP operates under, and awards are made
pursuant to, the Company’s 2010 Stock Plan. All shares to be issued in
settlement of awards shall be issued pursuant to the 2010 Stock Plan.
 
 
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Dividend equivalents will accrue on the restricted stock units and be paid in
shares of common stock upon settlement of the awards based upon the number of
shares of common stock actually earned pursuant to the award.

 
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The Committee will review the Company’s performance relative to the applicable
metrics and authorize payment in settlement of the awards, if any, after
performance results for the three-year performance period are known.