Raytheon Company Commences Tender Offer for All Shares of Applied Signal Technology, Inc.


WALTHAM, Mass., Dec. 30, 2010 - Raytheon Company (NYSE: RTN) is commencing today, through its wholly-owned subsidiary RN Acquisition Company, a cash tender offer to purchase all of the outstanding shares of common stock of Applied Signal Technology, Inc. (Nasdaq: APSG).

Raytheon announced on Monday, Dec. 20, 2010 that it had entered into a merger agreement with Applied Signal. Upon successful completion of the tender offer, shareholders of Applied Signal will receive $38.00 in cash for each share of Applied Signal common stock validly tendered and not validly withdrawn, without interest and less any required withholding taxes.

The board of directors of Applied Signal has unanimously determined that the offer and the other transactions contemplated by the merger agreement are fair to and in the best interests of Applied Signal shareholders, and has recommended that Applied Signal shareholders tender their shares in the offer.

The tender offer is scheduled to expire at 12:00 midnight, Eastern time, at the end of the day on January 28, 2011 unless the tender offer is extended.

Completion of the transaction is subject to, among other things, the valid tender without withdrawal of 76.3 percent of the outstanding shares of Applied Signal common stock, regulatory approvals including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions. Following completion of the tender offer, any shares of Applied Signal not tendered will be converted into the right to receive the same price per share paid by Raytheon in the tender offer. In the event that the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of shareholder approval. The transaction is not subject to any financing condition. Following successful completion of the transaction, Applied Signal will be integrated into Raytheon's Space and Airborne Systems business.

Raytheon Company (NYSE: RTN), with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 88 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 75,000 people worldwide.

The solicitation and the offer to buy shares of common stock of Applied Signal Technology, Inc. is being made pursuant to an offer to purchase and related materials that Raytheon Company's affiliate, RN Acquisition Company, will file on Schedule TO with the U.S. Securities and Exchange Commission (SEC). Investors and Applied Signal Technology, Inc. security holders are strongly advised to read the tender offer statement (including the offer to purchase, letter of transmittal and related tender offer documents) and the related solicitation/recommendation statement on Schedule 14D-9 that will be filed by Applied Signal Technology, Inc. with the SEC, because they will contain important information about the tender offer. These documents will be available at no charge on the SEC's website at www.sec.gov. In addition, a copy of the offer to purchase, letter of transmittal and certain other related tender offer documents (once they become available) may be obtained free of charge by directing a request to Raytheon Company at www.raytheon.com, or Raytheon Company, 870 Winter Street, Waltham, MA 02451, Attn: Corporate Secretary's Office or to D.F. King & Co., Inc., 48 Wall Street, 22(nd) Floor, New York, NY 10005, Toll-Free Telephone (888) 644-6071. Investors and Applied Signal Technology, Inc. security holders may also obtain free copies of the documents filed with the SEC by Applied Signal by contacting Applied Signal at 460 West California Avenue, Sunnyvale, California 94086, (408) 749-1888.

SOURCE Raytheon Company

CONTACT:

Media, Jon Kasle,

+1-781-522-5110

or

Investor Relations,

Todd Ernst,

+1-781-522-5141,

both of Raytheon Company

Web Site: www.raytheon.com

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