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SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Filed by the Registrant þ

Filed by a Party other than the Registrant ¨

Check the appropriate box;

Exelis Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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March 27, 2012

Exelis Inc.

1650 Tysons Blvd.

Suite 1700

McLean, VA 22102

Dear Fellow Shareholders:

Enclosed are the Notice of Annual Meeting and Proxy Statement for the Exelis Inc. 2012 Annual Meeting of Shareholders. This year’s meeting is intended to address only the business included on the agenda. Details of the business to be conducted at the Annual Meeting are given in the accompanying Notice of Annual Meeting and Proxy Statement which provides information required by applicable laws and regulations.

Your vote is important and we encourage you to vote whether you are a registered owner or a beneficial owner. This year, in accordance with U.S. Securities and Exchange Commission rules, we are using the Internet as our primary means of furnishing proxy materials to shareholders. Because we are using the Internet, most shareholders will not receive paper copies of our proxy materials. We will instead send these shareholders a notice with instructions for accessing the proxy materials and voting via the Internet. This notice also provides information on how shareholders may obtain paper copies of our proxy materials if they so choose. We believe use of the Internet makes the proxy distribution process more efficient, less costly and helps in conserving natural resources.

If you are the registered owner of Exelis common stock, you may vote your shares by making a toll-free telephone call or using the Internet. Details of these voting options are explained in the Proxy Statement. If you choose to receive paper copies of our proxy materials, you can vote by completing and returning the enclosed proxy card by mail as soon as possible.

If you are a beneficial owner and someone else, such as your bank, broker or trustee is the owner of record, the owner of record will communicate with you about how to vote your shares.

Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. If you are a registered owner of Exelis common stock and do not plan to vote in person at the Annual Meeting, you may vote via the Internet, by telephone or, if you receive a paper proxy card in the mail, by mailing the completed proxy card. Voting by any of these methods will ensure your representation at the Annual Meeting.

Sincerely,

David F. Melcher

Chief Executive Officer and President

Ralph F. Hake

Chairman of the Board of Directors

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March 27, 2012

NOTICE OF 2012 Annual Meeting

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By order of the Board of Directors,

						Ann D. Davidson
						Senior Vice President,
						Chief Legal Officer and Corporate Secretary

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2012 Proxy Statement

Introduction

Separation from ITT Corporation

On October 31, 2011 (the “Distribution Date”), Exelis Inc. (herein referred to as “Exelis”, or the “Company”) became an independent, publicly traded company (the “Separation” or “Spin-Off”) as a result of ITT Corporation’s (“ITT”) distribution of its shares of Exelis to Exelis shareholders. On the Distribution Date, ITT shareholders of record as of the close of business on October 17, 2011 (the “Record Date”) were entitled to receive one share of Exelis common stock and one share of Xylem Inc. (“Xylem”) common stock for every share of ITT common stock held as of the Record Date (the “Distribution”).

Exelis is comprised of the former Defense & Information Solutions businesses of ITT. ITT’s Board of Directors approved the distribution of the shares of Exelis on October 5, 2011. The Exelis Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on October 6, 2011 and its common stock began trading “regular way” under the ticker symbol “XLS” on the New York Stock Exchange (“NYSE”) on November 1, 2011. For further information, see our amended Registration Statement on Form 10 filed with the SEC.

Why did I receive these proxy materials?    Beginning on or about March 27, 2012, this Proxy Statement is being mailed or made available, as the case may be, to shareholders who were Exelis shareholders as of the March 16, 2012 record date, as part of the Board of Directors’ solicitation of proxies for the Exelis 2012 Annual Meeting and any postponements or adjournments thereof. This Proxy Statement, the CEO Annual Report Letter, and the 2011 Annual Report on Form 10-K (which have been furnished to shareholders eligible to vote at the 2012 Annual Meeting) contain information that the Board of Directors believes offers an informed view of Exelis and meets the regulations of the SEC for proxy solicitations.

Who is entitled to vote?    You can vote if you owned shares of the Company’s common stock as of the close of business on March 16, 2012, the record date.

What items of business will I be voting on?    You are voting on the following items of business, which are described on pages 8 to 29:

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Information about Voting

How do I vote? If you are registered owner, you can either vote in person at the Annual Meeting or by proxy, whether or not you attend the Annual Meeting. If you are a beneficial owner, you may vote by submitting voting instructions to your bank, broker, trustee or other nominee. If you are a beneficial owner and your shares are held in a bank or brokerage account, you will need to obtain a proxy, executed in your favor, from your bank or broker to be able to vote in person at the Annual Meeting. If you are beneficial owner and your shares are held through any of the Exelis savings plans for salaried or hourly employees, your shares held in the Exelis savings plans cannot be voted in person at the Annual Meeting.

What are the proxy voting procedures? If you vote by proxy, you can vote by following the voting procedures on the proxy card. You may vote:

Why does the Board solicit proxies from shareholders?    Since it is impractical for all shareholders to attend the Annual Meeting and vote in person, the Board of Directors recommends that you appoint the three people named on the accompanying proxy card to act as your proxies at the 2012 Annual Meeting.

How do the proxies vote?    The proxies vote your shares in accordance with your voting instructions. If you appoint the proxies but do not provide voting instructions, they will vote as recommended by the Board of Directors, except as discussed below under “What is a broker non-vote”. If any other matters not described in this Proxy Statement are properly brought before the meeting for a vote, the proxies will use their discretion in deciding how to vote on those matters.

How many votes do I have?    You have one vote for every share of Exelis common stock that you own.

How does the Board of Directors recommend that I vote on the proposals?    The Board of Directors recommends a vote FOR the election of each of the Class I Director nominees of the Board of Directors (Item 1), FOR the ratification of the appointment of Deloitte as the Exelis Independent Registered Public Accounting Firm for 2012 (Item 2), FOR the approval of the amendment and restatement of the 2011 Plan (Item 3), FOR the approval of the compensation of our named executive officers (Item 4), and FOR ONE YEAR with respect to how frequently a shareholder vote to approve the compensation of our named executive officers should occur (Item 5).

What if I change my mind?    You can revoke your proxy at any time before it is exercised by mailing a new proxy card with a later date or casting a new vote by the Internet or telephone, as applicable. You can also send a written revocation to the Corporate Secretary at the address listed on the first page of the Proxy Statement. If you come to the Annual Meeting, you can ask that the proxy you submitted earlier not be used.

What is a “broker non-vote”?    The NYSE has rules that govern brokers who have record ownership of listed company stock held in brokerage accounts for their clients who beneficially own the shares. Under these rules, brokers who do not receive voting instructions from their clients have the discretion to vote uninstructed shares on certain matters (“discretionary matters”) but do not have discretion to vote uninstructed shares as to certain other matters (“non-discretionary matters”). A broker may return a proxy card on behalf of a beneficial owner from whom the broker has not received instructions that casts a vote with regard to discretionary matters but expressly states that the broker is not voting as to non-discretionary matters. The broker’s inability to vote with respect to the non-discretionary matters to which the broker has not received instructions from the beneficial owner is referred to as a “broker non-vote.” Under current NYSE interpretations, agenda Item 2, the

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ratification of Deloitte as the Company’s Independent Registered Public Accounting Firm is considered a discretionary item. Your broker does not have discretion to vote your shares held in street name on Items 1, 3, 4, or 5, each of which is considered a non-discretionary item. Under Indiana law, the law of the state where the Company is incorporated, broker non-votes and abstentions are counted to determine whether there is a quorum present. There are five formal items scheduled to be voted upon at the Annual Meeting as described on page 1. As of the date of this Proxy Statement, the Board of Directors is not aware of any business other than as described in this Proxy Statement that will be presented for a vote at the 2012 Annual Meeting.

How many votes are required to elect Directors or approve a proposal? How many votes are required for an agenda item to pass?     The Amended and Restated Articles of Incorporation and By-laws provide that in uncontested elections, Directors shall be elected by a majority of the votes cast. The Company’s By-laws provide for majority voting in uncontested elections. The By-laws provide that in uncontested elections, any Director nominee who fails to be elected by a majority, but who also is a Director at the time, shall promptly provide a written resignation, as a holdover Director, to the Chairman of the Board or the Corporate Secretary. The Nominating and Governance Committee (or the equivalent committee then in existence) shall promptly consider the resignation and all relevant facts and circumstances concerning any vote and the best interests of the Company and its shareholders. The Board will act on the Nominating and Governance Committee’s recommendation no later than its next regularly scheduled Board meeting or within 90 days after certification of the shareholder vote, whichever is earlier, and the Board will promptly publicly disclose its decision and the reasons for its decision. This means that in an uncontested election, to be elected as a Director of Exelis, each of the three director candidates must receive a majority of votes cast.

Item 2 and Item 4 of the proposed agenda items require that the votes cast in favor of the proposal exceed the votes cast against the proposal. Item 5 will be determined by which of the options (i.e., every year, every two years, every three years) receives a majority of the votes cast. Item 2, Item 4, and Item 5 are advisory in nature and are non-binding. Under current NYSE rules, Item 3 requires the affirmative vote of a majority of the votes cast on the proposal, provided that a majority of the outstanding shares of common stock are voted on the proposal. Abstentions will have no effect on the outcomes of Item 1, Item 2, Item 4, or Item 5. In addition, broker non-votes will have no effect on the outcomes of Item 1, Item 4, or Item 5. With respect to Item 3, abstentions are considered “votes cast” under current NYSE rules and thus will have the same effect as a vote against the proposal and will be counted in determining whether a majority of the outstanding shares of common stock are voted on the proposal.

How many shares of Exelis stock are outstanding?    As of March 16, 2012, the record date, 186,520,558 shares of Exelis common stock were outstanding.

How many holders of Exelis outstanding shares must be present to hold the Annual Meeting?     In order to conduct business at the Annual Meeting it is necessary to have a quorum. To have a quorum, shareholders entitled to cast a majority of votes at the Annual Meeting must be present in person or by proxy.

How do I vote?    With respect to agenda Items 1, 2, 3, or 4, you may vote for, against or abstain from voting. With respect to agenda Item 5, you may vote “one year,” “two years,” “three years,” or abstain from voting.

What is the difference between a beneficial owner and a registered owner?    If shares you own are held in an Exelis savings plan for salaried or hourly employees, a stock brokerage account, bank or by another holder of record, you are considered the “beneficial owner” because someone else holds the shares on your behalf. If the shares you own are held in a Morgan Stanley Smith Barney account for restricted shares or registered in your name directly with Computershare, our transfer agent, you are the registered owner and the “shareholder of record.”

How do I vote if I am a participant in Exelis’savings plans for salaried or hourly employees?    If you participate in any of the Exelis savings plans for salaried or hourly employees, your plan trustee will vote the Exelis shares credited to your savings plan account in accordance with

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your voting instructions, except as otherwise provided in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. The trustee votes the shares on your behalf because you are the beneficial owner, not the shareholder of record, of the savings plan shares. The trustee votes the savings plan shares for which no voting instructions are received (“Undirected Shares”) in the same proportion as the shares for which the trustee receives voting instructions, except as otherwise provided in accordance with ERISA. Under the savings plans, participants are “named fiduciaries” to the extent of their authority to direct the voting of Exelis shares credited to their savings plan accounts and their proportionate share of Undirected Shares. By submitting voting instructions by telephone, the Internet or by signing and returning the voting instruction card, you direct the trustee of the savings plans to vote these shares, in person or by proxy at the Annual Meeting. Exelis salaried or hourly plan participants should mail their confidential voting instruction card to Broadridge Financial Solutions, Inc. (“Broadridge”), acting as tabulation agent, or vote by telephone or Internet. Instructions must be received by Broadridge no later than 11:59 p.m. Eastern Time three days before the Annual Meeting.

I participate in the Exelis savings plan for salaried employees and am a shareholder of record of shares of Exelis common stock. How many proxy cards will I receive?    You will receive only one proxy card. Your savings plan shares and any shares you own as the shareholder of record, including ownership through the Exelis Direct Purchase, Sale and Dividend Reinvestment Plan, will be set out separately on the proxy card.

How many shares are held by participants in the Exelis employee savings plans?    As of March 16, 2012, the record date, Wells Fargo Institutional Trust Services, as the trustee for the employee salaried savings plan, held 6,682,855 shares of Exelis common stock (approximately .36% of the outstanding shares) and JP Morgan Chase & Co., as the trustee for the hourly employee savings plans, held 339,724 shares of Exelis common stock (approximately .18% of the outstanding shares).

Who counts the votes? Is my vote confidential?    Representatives of Broadridge count the votes. Representatives of Broadridge will act as Inspectors of Election for the 2012 Annual Meeting. The Inspectors of Election monitor the voting and certify whether the votes of shareholders are kept in confidence in compliance with the Exelis confidential voting policy.

Who pays for the proxy solicitation cost?    Exelis pays the cost of soliciting proxies from registered owners. Exelis has appointed Okapi Partners LLC to help with the solicitation effort. Exelis will pay Okapi Partners LLC a fee of $9,000, plus reimbursement of expenses, to assist with the solicitation and reimburse brokers, nominees, custodians and other fiduciaries for their costs in sending proxy materials to beneficial owners.

Who solicits proxies?    Directors, officers or other regular employees of Exelis may solicit proxies from shareholders in person or by telephone, facsimile transmission or other electronic communication.

How does a shareholder submit a proposal for the 2013 Annual Meeting?    Rule 14a-8 of the Securities Exchange Act of 1934, or the “Exchange Act,” establishes the eligibility requirements and the procedures that must be followed for a shareholder proposal to be included in a public company’s proxy materials. Under the rule, if a shareholder wants to include a proposal in Exelis proxy materials for its next Annual Meeting, the proposal must be received by Exelis at its principal executive offices on or before November 27, 2012 and comply with eligibility requirements and procedures. An Exelis shareholder who wants to present a matter for action at the next Exelis Annual Meeting, but chooses not to do so under Exchange Act Rule 14a-8, must deliver to Exelis, at its principal executive offices, on or before November 27, 2012 a written notice to that effect; provided, however, in the event that the date of the 2013 Annual Meeting is changed by more than 30 days from the anniversary date of the 2012 Annual Meeting, such notice must be received not later than 120 calendar days prior to the 2013 Annual Meeting or 10 calendar days following the date on which public announcement of the date of the 2013 Annual Meeting is first made. In either case, as well as for shareholder nominations

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for Directors, the shareholder must also comply with the requirements in the Company’s By-laws with respect to a shareholder properly bringing business before the Annual Meeting. (You can request a copy of the By-laws from the Corporate Secretary of Exelis.)

Can a shareholder nominate Director Candidates?    The Company’s By-laws permit shareholders to nominate Directors at the Annual Meeting. To make a Director nomination or present other business for consideration at the 2013 Annual Meeting, you must submit a timely notice in accordance with the procedures described in the Company’s By-laws. To be timely, notice of Director nomination or any other business for consideration at the shareholders’ meeting must be received by our Corporate Secretary at our principal executive offices no less than 90 days nor more than 120 days prior to the date we released our Proxy Statement to shareholders in connection with last years’ annual meeting. Therefore, to be presented at our 2013 Annual Meeting, such a proposal must be received on or after November 27, 2012 but not later than December 27, 2012. The nomination and notice must meet all other qualifications and requirements of the Company’s Corporate Governance Principles, By-laws and Regulation 14A of the Exchange Act. The nominee will be evaluated by the Nominating and Governance Committee of the Board using the same standards as it uses for all Director nominees. These standards are discussed in further detail below at page 38 under “Information about the Board of Directors-Director Selection and Composition.” No one may be nominated for election as a Director after he or she has reached 72 years of age. (You can request a copy of the nomination requirements from the Corporate Secretary of Exelis.)

Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the 2012 Annual Meeting and will publish final results in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the 2012 Annual Meeting. If final voting results are not available to us in time to file a Form 8-K with the SEC within four business days after the 2012 Annual Meeting, we intend to file a Form 8-K to disclose preliminary voting results and, within four business days after the final results are known, we will file an additional Form 8-K with the SEC to disclose the final voting results. Additionally, we will announce our determination with respect to the frequency of the advisory vote on compensation of our named executive officers on a Form 8-K filed with the SEC within 150 days after the date of our 2012 Annual Meeting, but in no event later than 60 calendar days prior to the deadline for submission of shareholder proposals for next year’s Annual Meeting. In lieu of filing a Form 8-K, we may include this information in a periodic report filed within the time period in which a Form 8-K would be required.

Householding of Proxy Materials

SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding”, provides cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, please notify your broker. You can request prompt delivery of a copy of the Proxy Materials by writing to: Corporate Secretary, Exelis, 1650 Tysons Boulevard, Suite 1700, McLean, VA 22102 or by calling 703.790.6300.

We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q, and 8-K. To access these filings, go to our website (www.exelisinc.com) and click on “SEC Filings” under the “Investors” heading. Copies of our Annual Report on Form 10-K for the year ended December 31, 2011, including financial statements

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and schedules thereto, filed with the SEC, are also available without charge to shareholders upon written request addressed to: Corporate Secretary, Exelis Inc., 1650 Tysons Boulevard, Suite 1700, McLean, Virginia 22102.

Internet Availability of Proxy Materials

In accordance with SEC rules, we are using the Internet as our primary means of furnishing proxy materials to shareholders. Because we are using the Internet, most shareholders will not receive paper copies of our proxy materials. We will instead send these shareholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement, CEO Annual Report Letter and 2011 Annual Report on Form 10-K, and voting via the Internet. The Notice of Internet Availability of Proxy Materials also provides information on how shareholders may obtain paper copies of our proxy materials if they so choose.

Stock Ownership Information

Historically.    The ITT Board of Directors’ share ownership guidelines provided for share ownership levels at five times the annual cash retainer amount for Directors. Guidelines for the officers were set as follows: for the chief executive officer at five times annual base salary; chief financial officer at three times annual base salary; senior vice presidents and group presidents at two times annual base salary; and all other Company vice presidents at one times annual base salary.

Following the Distribution. The Exelis Compensation Committee established similar share ownership guidelines, as set forth below, for our Non-Management Directors and corporate officers that are consistent with general market practices. Share ownership guidelines for Non-Management Directors and corporate officers were first approved by the Exelis Board of Directors in December of 2011. The share ownership guidelines currently provide for share ownership levels at five times the annual cash retainer amount for Directors of the Company. Non-Management Directors receive a portion of their retainer in restricted stock units (also referred to as “RSUs”), which are paid in shares when the restricted stock units vest. Non-Management Directors are encouraged to hold such shares until their total share ownership meets or exceeds the ownership guidelines.

The approved guidelines require share ownership, expressed as a multiple of base salary, for all corporate officers. The guidelines specify the desired levels of Company stock ownership and encourage a set of behaviors for each officer to reach the guideline levels. Specifically the guidelines apply as follows: chief executive officer at five times annual base salary; chief financial officer at three times annual base salary; executive vice presidents at three times annual base salary; senior vice presidents at two times annual base salary; and all other Company vice presidents at one times annual base salary. In achieving these ownership levels, shares owned outright, Exelis restricted stock and restricted stock units, shares held in the Exelis dividend reinvestment plan, shares owned in the Exelis Salaried Investment and Savings Plan (the “ISP”), and “phantom” shares held in a fund that tracks the Company’s stock in the deferred compensation plan are considered.

With respect to Company officers, to attain the ownership levels set forth in the guidelines, it is expected that any restricted shares or restricted stock units paid in shares when the restricted stock units vest will be held, and that all shares acquired through the exercise of stock options will be held, except, in all cases, to the extent necessary to meet tax obligations. Compliance with the guidelines is monitored periodically. Non-Management Directors and Company officers are afforded a reasonable period of time to meet the guidelines. The Company has taken individual tenure, the recent Spin-Off transaction resulting in Exelis’ listing as a new publicly traded company, and Non-Management Directors and corporate officer share ownership levels into account in determining compliance with the guidelines. As of January 31, 2012, Non-Management Directors and Company officers have attained levels that will permit attainment of share ownership at the guideline levels within a reasonable period of time. Several Company officers have ownership levels in excess of the guidelines.

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Share Ownership Guideline Summary

The following table shows, as of January 31, 2012, the beneficial ownership of Exelis common stock and options exercisable within 60 days by each Director, by each of the executive officers named in the Summary Compensation Table on page 90, and by all Directors and executive officers as a group. In addition, we have provided information about ownership of options and restricted stock units that provide economic linkage to Exelis common stock but do not represent actual beneficial ownership of shares.

The number of shares beneficially owned by each Non-Management Director or executive officer has been determined under the rules of the SEC, which provide that beneficial ownership includes any shares as to which a person has the right to acquire beneficial ownership within 60 days through the exercise of any option or other right. Unless otherwise indicated, each Non-Management Director or executive officer has sole dispositive and voting power or shares those powers with his or her spouse.

There were 184,739,274 shares of Exelis common stock outstanding on January 31, 2012.

Stock Ownership of Directors and Executive Officers

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Security Ownership of Certain Beneficial Owners

Set forth below is information reported to the SEC on the most recently filed Schedule 13G by the following persons who owned more than 5% of Exelis outstanding common stock. This information does not include holdings by the trustee with respect to individual participants in the Exelis Salaried Investment and Savings Plan.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that the Company’s executive officers and directors, and any persons beneficially owning more than 10% of a registered class of the Company’s equity securities, file reports of ownership and changes in ownership with the SEC within specified time periods. To the Company’s knowledge, based upon a review of the copies of the reports furnished to the Company and written representations that no other reports were required, all filing requirements were satisfied in a timely manner for the year ended December 31, 2011, except that, due to a third-party administrative error, a late Form 4 filing was made for Dr. Hamre to report the acquisition of 1,839 phantom shares of Exelis held in a deferred compensation account.

Proposals to be Voted on at the 2012 Annual Meeting

Our Amended and Restated Articles of Incorporation, provides for a classified Board of Directors divided into three classes designated Class I, Class II and Class III, each serving staggered three-year terms. The terms of the Class I directors expire at the 2012 Annual Meeting of Shareholders. The terms of the Class II and Class III directors will expire at the 2013 and 2014 Annual Meetings of Shareholders, respectively. Directors elected by the shareholders at an annual meeting to succeed those whose terms expire at such meeting are of the same class as the directors they succeed and are

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elected for a term to expire at the third annual meeting of shareholders after their election and until their successors are duly elected and qualified.

The election of directors requires the affirmative vote of a majority of the votes cast by shareholders entitled to vote at the Annual Meeting of Shareholders. Accordingly, abstentions and broker non-votes will not have any effect on the election of a director.

The full Board of Directors has considered and nominated three Class I nominees for election as Directors at the 2012 Annual Meeting, to serve for a three year term. Each of the nominees is currently serving as a Director of Exelis and has agreed to continue to serve if elected until his or her retirement, resignation or death. If unforeseen circumstances arise before the 2012 Annual Meeting and a nominee becomes unable to serve, the Board of Directors could reduce the size of the Board or nominate another candidate for election. If the Board of Directors nominates another candidate, the proxies could use their discretion to vote for that nominee.

Nominees for Election to the Board of Directors in 2012

The following information describes the offices held, other business directorships and the class and term of each nominee. Beneficial ownership of equity securities of the nominees is described on “Stock Ownership of Directors and Executive Officers” on page 7.

Class I — Directors Whose Terms Will Expire In 2015

		Ralph F. Hake, Non-Executive Chairman, Exelis Inc. Former Chairman and Chief Executive Officer, Maytag Corporation

Director Biographical Information: Mr. Hake, age 63, was Chairman and Chief Executive Officer of Maytag Corporation from June of 2001 to March of 2006. He served as Executive Vice President and Chief Financial Officer for Fluor Corporation, an engineering and construction firm from 1999 to 2001. From 1987 to 1999, Mr. Hake served in various executive capacities at Whirlpool Corporation, including Chief Financial Officer and Senior Executive Vice President for global operations. Mr. Hake is a 1971 business and economics graduate of the University of Cincinnati and holds an M.B.A. from the University of Chicago.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mr. Hake has extensive global management and financial experience. He served on the Board of Directors for the National Association of Manufacturers and was Chairman of the organization’s taxation and economic policy group. He also served as a Director of ITT Corporation and a non-executive Chairman of Smurfit-Stone Container Corporation, providing additional relevant experience. Currently he serves as a Director of Owens-Corning Corporation and RockTenn Company.

Directorships at Public Companies for the Preceding Five Years: Mr. Hake has been a Director of Exelis since October 2011. He was a Director of ITT Corporation from 2002 to November 2011. He has served as a Director of Owens-Corning Corporation since 2006 and was previously a Director of Maytag Corporation from June 2001 through March 2006. Mr. Hake served as non-executive Chairman of Smurfit-Stone from 2010 until its acquisition by RockTenn Company on May 28, 2011, on which date he became a Director of RockTenn Company.

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		David F. Melcher Chief Executive Officer and President, Exelis Inc.

Director Biographical Information: Lieutenant General (Ret.) David F. Melcher, age 57, serves as Chief Executive Officer and President of Exelis Inc. since the Company’s Spin-Off from ITT Corporation on October 31, 2011. Previously he was President of ITT Defense & Information Solutions and served on the ITT Strategic Council from December 2008 until October 2011. Mr. Melcher joined ITT in August 2008 as Vice President of Strategy and Business Development following 32 years of distinguished service in the U.S. Army. He currently serves on the Board of Directors of the White House Fellows Foundation and Association and on the National Defense Industrial Association’s Board of Trustees. Mr. Melcher holds a bachelor’s degree in civil engineering from the U.S. Military Academy at West Point and two masters’ degrees, including one in business administration from Harvard University and another in public administration from Shippensburg University.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: As Chief Executive Officer and President, Mr. Melcher has extensive knowledge of our Company’s business and operations. He has more than 25 years of defense community experience in program management, strategy development and finance, working with key decision makers within the Army, Department of Defense, Office of Management and Budget, and Congress. Mr. Melcher has extensive international strategic business, budget, policymaking and defense-related experience, has demonstrated leadership and management experience with the U.S. Army, and has served as the Army’s Military Deputy for Budget and Deputy Chief of Staff for Programs in the Pentagon, and as Commander of the Corps of Engineers, Southwestern Division in Dallas, TX.

Directorships at Public Companies for the Preceding Five Years: Mr. Melcher serves as a Director and Chief Executive Officer and President of Exelis.

		Herman E. Bulls Founder and Chief Executive Officer of the Public Institutions Group at Jones Lang LaSalle

Director Biographical Information: Mr. Bulls, age 56, is the founder and CEO of Jones Lang LaSalle’s Public Institutions specialty, a practice focused on delivering integrated real estate solutions to government entities, nonprofit organizations, transportation facilities, and higher education institutions. He also serves as an International Director of Global Markets at Jones Lang LaSalle. Mr. Bulls serves as Chief Executive Officer of Bulls Advisory Group, a real estate consulting and advisory firm. He also co-founded and served as President and CEO of Bulls Capital Partners, a commercial mortgage banking firm. Before joining Jones Lang LaSalle, Mr. Bulls completed almost 12 years of active duty service with the United States Army working in the Office of the Assistant Secretary of the Army for Financial Management at the Pentagon and as an Assistant Professor of Economics and Finance at West Point. He retired as a Colonel in the U.S. Army Reserves in 2008. He is a member of the Executive Leadership Council, an organization of senior African American business executives from Fortune 500 companies, and former Chairman of the Board of Directors of the Executive Leadership Foundation. Mr. Bulls currently serves on the Board of Directors of Rasmussen College, a post-secondary for profit educational services organization. He

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is Vice Chairman, West Point Associate of Graduates Board of Directors, and is a member of Leadership Washington, and the Real Estate Executive Council (REEC). Mr. Bulls is a founding member and served as the inaugural President of the African American Real Estate Professionals (AAREP) of Washington, D.C. He is also a member of the Real Estate Advisory Committee for the New York State Teachers’ Retirement System (NYSTRS), one of the largest pension funds in the nation. Mr. Bulls received a bachelor of science degree in engineering from the U.S. Military Academy at West Point and a master’s of business administration degree in finance from Harvard Business School.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mr. Bulls brings over 34 years’ experience in development, leadership, operations, teaching, investment management and business development/retention. He serves as founder and CEO of Jones Lang LaSalle, and as a Director of the boards of USAA and Comfort Systems, USA. As an entrepreneur, he has started companies with major financial institutions as minority partners. He is a member of several councils and organizations in the community, providing additional relevant experience.

Directorships at Public Companies for the Preceding Five Years: An Exelis director since November 3, 2011, Mr. Bulls has served on the boards of USAA since November 2010 and Comfort Systems, USA since February 2001.

The Board of Directors recommends that you vote FOR the election of each of the proposed three Class I nominees listed above to the Board of Directors.

Continuing Members of the Board of Directors

The following information describes the offices held, other business directorships and the class and term of each director whose term continues beyond the 2012 Annual Meeting and who is not subject to election this year. Beneficial ownership of equity securities of the nominees is described on “Stock Ownership of Directors and Executive Officers” on page 7.

Class II — Directors Whose Term Expires In 2013:

		Christina A. Gold Former President, Chief Executive Officer and Director, The Western Union Company, Inc.

Director Biographical Information: Mrs. Gold, age 64, was President and Chief Executive Officer of The Western Union Company, a leading company in global money transfer, from September of 2006 to September of 2010. From May 2002 to September 2006, Mrs. Gold was President of Western Union Financial Services, Inc. and Senior Executive Vice President of Western Union’s parent company, First Data Corporation. From October 1999 to May 2002, she was Chairman, President and Chief Executive Officer of Excel Communications, Inc. Mrs. Gold served as President and Chief Executive Officer of The Beaconsfield Group from March 1998 to October 1999. From 1997 to 1998, Mrs. Gold was Executive Vice President of Global Development of Avon Products, Inc., and from 1993 to 1997, she was President of Avon North America. Mrs. Gold is a graduate of Carleton University, Ottawa, Canada. She is a board member of the Safe Water Network.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mrs. Gold has extensive experience as the Chief Executive Officer of a public company with wide-ranging global leadership, management, and marketing experience. She was recognized in 2003, 2006, 2008 and 2009 by Fortune magazine as one of America’s 50 Most Powerful Women in

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Business and by Forbes magazine on its “100 Most Powerful Women” list in 2007, 2008, and 2009. BusinessWeek also named her as one of the top 25 U.S. managers in 1996. She has been a Director of the New York Life Insurance Company (a mutual life insurance company) since 2001.

Directorships at Public Companies for the Preceding Five Years: Mrs. Gold has been a Director of Exelis since October 2011. She has served as a Director of ITT Corporation since 1997 and as a director of New York Life Insurance Company, a mutual company, since 2001. Mrs. Gold previously served as a Director of Torstar Corporation, a broad-based Canadian media company, providing additional relevant experience. She served as Director of The Western Union Company from October 2006 to September 2010.

		Steven R. Loranger Chairman Emeritus, Xylem

Director Biographical Information: Mr. Loranger, age 59, serves as Chairman Emeritus of Xylem Inc. He served as President, Chief Executive Officer and Chairman of the Board of Directors of ITT Corporation from 2004 to October of 2011. Mr. Loranger is a member of the Business Roundtable, serves on the boards of the National Air and Space Museum and the Congressional Medal of Honor Foundation and is on the Executive Committee of the Aerospace Industries Association Board of Governors. Prior to his tenure at ITT, Mr. Loranger served as Executive Vice President and Chief Operating Officer of Textron, Inc. from 2002 to 2004, overseeing Textron’s manufacturing businesses, including aircraft and defense, automotive, industrial products and components. From 1981 to 2002, Mr. Loranger held executive positions at Honeywell International Inc. and its predecessor company, AlliedSignal, Inc., including serving as President and Chief Executive Officer of its Engines, Systems and Services businesses. Mr. Loranger has served on the Xylem Board of Directors following the Spin-Off of Xylem from ITT. He holds a bachelor’s and master’s degree in science from the University of Colorado.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mr. Loranger has extensive operational and manufacturing experience with industrial companies and served as ITT’s President and Chief Executive Officer for over 7 years. As President and Chief Executive Officer of ITT Mr. Loranger oversaw the businesses which now comprise ITT, Xylem and Exelis. He also serves as a Director on the Board of FedEx Corporation, providing additional relevant experience.

Directorships at Public Companies for the Preceding Five Years: Mr. Loranger has been a Director of Exelis since October 2011. He served as Director, President and Chief Executive Officer of ITT for over 6 years and now serves as Chairman Emeritus for Xylem. Mr. Loranger has also served as a Director of FedEx Corporation since 2006.

		Patrick J. Moore President and Chief Executive Officer of PJM Advisors, LLC

Director Biographical Information: Mr. Moore, age 57, currently serves as President and Chief Executive Officer of PJM Advisors, LLC, an investment and advisory firm. Until May of 2011, Mr. Moore served as Chief Executive Officer and previously as Chairman and Chief Executive

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Officer of Smurfit-Stone Container Corporation, an industry leader in the manufacturing of integrated containerboard and corrugated packaging products and one of the world’s largest paper recyclers. Mr. Moore serves on the Board of Archer Daniels Midland (ADM), one of the largest agricultural processors in the world, and the North American Review Board of American Air Liquide. He also serves as a Director on the Boards of the Metropolitan YMCA of St. Louis, Boys Hope/Girls Hope, St. Louis Zoological Society and the Big Shoulders Fund. Mr. Moore holds a bachelor’s degree in business administration from DePaul University and currently serves on the university’s board of trustees.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mr. Moore is currently the CEO of PJM Advisors, LLC and former Chairman and Chief Executive Officer of Smurfit-Stone Container Corporation. He also serves on Archer Daniels Midland’s Board of Directors. In his capacity as Chief Executive Officer, former Chairman and Chief Executive Officer and Board member of several different companies and organizations, Mr. Moore has extensive governance, operational and financial experience in various industry sectors.

Directorships at Public Companies for the Preceding Five Years: Mr. Moore has served as an Exelis Inc. Director since early November 2011. He also has served as a Director of Archer Daniels Midland Company since November 2003 and as a Director of Ralcorp Holdings, Inc. since February 2012. He served as Chairman and Chief Executive Officer of Smurfit-Stone Container Corporation from May 2003 to June 2010 and as its Chief Executive Officer from June 2010 to May 2011 when it was acquired by RockTenn Corporation.

		R. David Yost Former Chief Executive Officer of AmerisourceBergen Corporation

Director Biographical Information: Mr. Yost, age 64, served as Director and Chief Executive Officer of AmerisourceBergen, a comprehensive pharmaceutical services provider, from August 2001 until July 1, 2011. Previously, he served as President of AmerisourceBergen, Chairman and Chief Executive Officer of AmeriSource Health Corporation, and President and Chief Executive Officer of AmeriSource Health. Mr. Yost has been a member of the Board at Penn Medicine, overseeing the University of Pennsylvania School of Medicine and hospital, since 2006. He also serves on the U.S. Air Force Academy Endowment Board. Mr. Yost is a graduate of the U.S. Air Force Academy and holds a master of business administration from the University of California, Los Angeles (UCLA).

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mr. Yost brings over 36 years of experience in business leadership, operations, manufacturing and services in the healthcare equipment and services industry. He also serves on the audit committee of the Board at Penn Medicine, providing additional relevant experience.

Directorships at Public Companies for the Preceding Five Years: Mr. Yost has served as an Exelis Inc. Director since early November 2011. Mr. Yost was a Director and Chief Executive Officer of AmerisourceBergen from August 2001 to July 2011. Since 2009, he has served on the board of Tyco International Ltd., a leading provider of electronic security products and services, fire protection and detection products and services, and valves and controls. In January 2012, Mr. Yost joined the Board of Directors at Marsh & McLennan Companies, a global professional services firm providing advice and solutions in the areas of risk, strategy, and human capital.

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Class III — Directors Whose Term Expires In 2014:

		John J. Hamre President and Chief Executive Officer, Center for Strategic & International Studies (“CSIS”)

Director Biographical Information: Dr. Hamre, age 61, was elected President and Chief Executive Officer of CSIS, a public policy research institution dedicated to strategic, bipartisan global analysis and policy impact, in April of 2000. Prior to joining CSIS, he served as U.S. Deputy Secretary of Defense from 1997 to 2000 and Under Secretary of Defense (Comptroller) from 1993 to 1997. Dr. Hamre is a Director of MITRE Corporation, a not-for-profit organization chartered to work in the public interest, with expertise in systems engineering, information technology, operational concepts, and enterprise modernization. He also served on the board of ITT Corporation for over 11 years and now serves on the board of Xylem. He received a B.A. degree, with highest distinction, from Augustana College in Sioux Falls, South Dakota, was a Rockefeller Fellow at Harvard Divinity School and was awarded a Ph.D., with distinction, from the School of Advanced International Studies, Johns Hopkins University, in 1978.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Dr. Hamre has extensive strategic and international experience, particularly with respect to defense related businesses. He has achieved recognized prominence in strategic, international and defense fields. Dr. Hamre has also served as a Director in other public companies, including SAIC, Inc. and previously ITT, providing additional relevant experience. Dr. Hamre previously served on the board of the Oshkosh Corporation,

Directorships at Public Companies for the Preceding Five Years: Dr. Hamre has been a Director of Exelis since October 2011. He served as a Director of ITT from 2000 to 2011. He has served as a Director of SAIC, Inc. since 2005. Dr. Hamre was previously a Director of Choicepoint, Inc. from May 2002 through September 2008 and Oshkosh Corporation from 2009 through January 2012. He has served as a Director of Xylem since October 2011.

Director Biographical Information: General Kern, age 66, has served as a Senior Counselor to the Cohen Group since January 2005. He served as President and Chief Operating Officer of AM General LLC from August of 2008 to January of 2010. In November 2004, General Kern retired from the United States Army as Commanding General, Army Materiel Command (AMC). General Kern graduated from the U.S. Military Academy at West Point. He holds masters’ degrees in both Civil and Mechanical Engineering from the University of Michigan, and he was a Senior Security Fellow at the John F. Kennedy School at Harvard University. General Kern serves on the Board of Directors of CoVant Technologies LLC, and AT Solutions, a subsidiary of CoVant Technologies. Mr. Kern is a member of the Defense Science Board and National Academy of Engineering.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: General Kern has extensive international strategic business and defense-related experience. General Kern has demonstrated leadership and management experience during his 37-year career with the

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U.S. Army. He is a leading figure on defense transformation, as well as a highly decorated combat veteran, and achieved recognized prominence as a four-star general with the Army. General Kern spearheaded Army efforts to direct supply chain improvement efforts, modernize weapons systems, and maintain field readiness, while still controlling costs. He is also a Director of iRobot Corporation, providing additional relevant experience, and a member of the Defense Science Board and National Academy of Engineering.

Directorships at Public Companies for the Preceding Five Years: General Kern has been a Director of Exelis since October 2011. He has been a Director of ITT Corporation since August 2008. General Kern has served as a Director of iRobot Corporation since 2006. From 2005 to 2007, he was a Director of EDO Corporation, acquired by ITT on December 2007. He was a director of Anteon Corporation from 2005 until 2006 when it was sold to General Dynamics.

		Mark L. Reuss President of General Motors, North America

Director Biographical Information: Mr. Reuss, age 48, was appointed GM Vice President and President of GM North America on December 4, 2009. Before this, he briefly served as Vice President of Engineering, responsible for all engineering for GM worldwide. Mr. Reuss managed GM’s operations in Australia and New Zealand as Chairman and Managing Director of GM Holden Ltd. from February 2008 until July 2009. He also served on the GM Asia Pacific Strategy Board and was President of Australia’s Federal Chamber of Automotive Industries, leading negotiations for long-term government support and a 10-year policy plan to restructure the Australian auto industry. Mr. Reuss previously held numerous engineering and management positions across GM brands. He serves on the Board of Horizon Upward Bound, the Cranbrook Schools Board of Trustees, Vanderbilt University School of Engineering Board of Visitors and the Fuqua/Coach K Center on Leadership and Ethics Board of Directors at Duke University. Mr. Reuss received a bachelor of engineering degree in mechanical engineering from Vanderbilt University and a master of business administration from Duke University.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: Mr. Reuss is President of GM North America and is responsible for GM’s performance, manufacturing, portfolio and dealer network in the United States, Canada and Mexico. He brings over 28 years of experience in global business, operations management, engineering and long-term government support contract negotiations. He has served on the GM North America Disclosure and Audit Committee since December 2009. His position in a public company such as GM and various boards within the community has provided additional relevant experience.

Directorships at Public Companies for the Preceding Five Years: Mr. Reuss has served as an Exelis Inc. Director since early November 2011. He has been a member of the GM North America Disclosure and Audit Committee since December 2009.

		Billie I. Williamson Retired Partner, Ernst & Young, LLP.

Director Biographical Information: Ms. Williamson, age 59, served as Ernst & Young’s Americas Inclusiveness Officer and Senior Assurance Partner and retired at the end of 2011. She began her

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career at Ernst & Young in 1974 and spent the first 19 years in the audit practice, becoming one of only five female partners in 1984. She then left to become CFO of AMX Corp. in Dallas and subsequently Senior Vice President, Finance of Marriott International, Inc. in Washington, D. C.  She rejoined Ernst & Young in 1998 where she became a senior client-serving partner and served some of the firm’s largest global accounts in aerospace, technology and other industries. She served as a member of Ernst & Young’s Americas Executive Board which functions as the Board of Directors for E&Y, dealing with strategic and operational matters. She also served on the U.S. Executive Board, responsible for partnership matters for the firm. Ms. Williamson graduated from Southern Methodist University and was granted her CPA Certificate in the State of Texas in 1976 and in the State of Maryland in 2003. She serves on the Executive Board of the Dallas Symphony Association on the Board of Trustees for the Dallas Symphony Foundation, and is a member of the Hockaday School Audit Committee and the Audit and Finance Committee of the Communities Foundation of Texas.

Director Experience, Qualifications, Attributes or Skills Relevant to Board Membership: As a Senior Assurance Partner at Ernst & Young, Ms. Williamson served some of the firm’s largest global accounts in aerospace, technology and other industries. She worked with Chief Executive Officers of major companies to structure acquisitions and determine financial strategy. Ms. Williamson served as a member of Ernst & Young’s Americas Executive Board, dealing with strategic and operational matters and providing additional relevant experience. She is also on the board of Extrusions, Inc. and is a partner in the Ida Family Ltd. Partnership.

Directorships at Public Companies for the Preceding Five Years: An Exelis Director since January 1, 2012. Ms. Williamson served as a member of Ernst & Young’s Americas Executive Board which functions as the Board of Directors for Ernst & Young from 2006 to 2008.

The Board of Directors has appointed Deloitte as the Exelis independent registered public accounting firm for 2012, based on the appointment by the Exelis Audit Committee. Shareholder ratification is not required for making such appointment for the fiscal year ending December 31, 2012 because the Audit Committee has responsibility for the appointment of our independent registered public accounting firm. The appointment is being submitted to shareholders for ratification with a view toward soliciting the opinion of shareholders, which opinion will be taken into consideration in future deliberations. No determination has been made as to what action the Board of Directors or the Audit Committee would take if shareholders do not ratify the appointment. Even if the appointment is ratified, the Audit Committee retains discretion to appoint a new independent registered public accounting firm at any time if the Audit Committee concludes such a change would be in our best interests. We expect that representatives of Deloitte will be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions.

Deloitte is a registered public accounting firm as provided by the Public Company Accounting Oversight Board (“PCAOB”). Representatives of Deloitte attended all regularly scheduled meetings of the Audit Committee during 2011. The Audit Committee annually reviews and considers Deloitte’s performance of the Company’s Audit.

Performance factors reviewed include Deloitte’s:

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The Audit Committee also reviewed the terms and conditions of Deloitte’s engagement letter including an agreement between Deloitte and the Company to submit disputes between Deloitte and the Company to a dispute resolution process and to limit awards based on punitive or exemplary damages under the dispute resolution procedures.

The Audit Committee discussed these considerations as well as Deloitte’s fees and services with Deloitte and Company management. The Audit Committee also determined that any non-audit services (services other than those described in the annual audit services engagement letter) provided by Deloitte were permitted under the rules and regulations concerning auditor independence promulgated by the SEC and rules promulgated by the PCAOB in Rule 3526.

Independent Registered Public Accounting Firm Fees

For the year ended December 31, 2011, following the Spin-Off on October 31, 2011, we paid Deloitte fees, including expenses, totaling $4,889,214, which are categorized below. Prior to the Spin-Off, ITT paid any audit, audit-related, tax and other fees of Deloitte. As a result, the amounts reported below are not necessarily representative of the fees we expect to pay Deloitte in future years. Aggregate fees billed to Exelis represent fees billed by the member firms of Deloitte Touche Tohmatsu, and their respective affiliates.

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Pre-Approval of Audit and Non-Audit Services

The Audit Committee pre-approves audit and permitted non-audit services provided by Deloitte. The Audit Committee has also adopted a policy on pre-approval of permitted audit related and non-audit services provided by Deloitte and permitted certain non-audit services provided by outside internal audit service providers. The purpose of the policy is to identify thresholds for services, project amounts and circumstances where Deloitte and any outside internal audit service providers may perform permitted non-audit services. A second level of review and approval by the Audit Committee is required when such permitted non-audit services, project amounts, or circumstances exceed specified amounts.

The Audit Committee has determined that, where practical, all permitted non-audit services shall first be placed for competitive bid prior to selection of a service provider. Management may select the party deemed best suited for the particular engagement, which may or may not be Deloitte. Providers other than Deloitte shall be preferred in the selection process for permitted non-audit service-related work. The policy and its implementation are reviewed and reaffirmed on a regular basis to assure conformance with applicable rules.

The Audit Committee has approved specific categories of audit, audit-related and tax services incremental to the normal auditing function, which Deloitte may provide without further Audit Committee pre-approval. These categories include among others, the following:

The Audit Committee has also approved specific categories of audit-related services, including the assessment and review of internal controls and the effectiveness of those controls, which outside internal audit service providers may provide without further approval.

If fees for any pre-approved non-audit services provided by either Deloitte or any outside internal audit service provider exceed a pre-determined threshold during any calendar year, any additional proposed non-audit services provided by that service provider must be submitted for second-level approval by the Audit Committee. Other audit, audit-related and tax services which have not been pre-approved are subject to specific prior approval. The Audit Committee reviews the fees paid or committed to Deloitte on at least a quarterly basis.

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The Company may not engage Deloitte to provide the services described below:

Employees of Deloitte who are senior manager level or above, including lead or concurring partners and who have been involved with the Company in the independent audit, shall not be employed by the Company in any capacity for a period of five years after the termination of their activities on the Company account.

The Board of Directors recommends you vote FOR the ratification of appointment of the Company’s Independent Registered Public Accounting Firm.

Overview.    Stock-based incentives are a key component of our executive compensation program, and employee ownership is a core value of our culture. Management and the Compensation and Personnel Committee (the “Exelis Compensation Committee” or the “Committee”) believe that stock ownership encourages our executives and employees to create value for the Company over the long term. They also believe that stock ownership promotes retention and affiliation with the Company by aligning executive and employee interests with those of our shareholders and allowing our executives and employees to share in our long-term success after satisfying multi-year vesting requirements and performance requirements. Under our long-term incentive compensation program, awards have been made in the form of grants of stock options, restricted stock units, and long-term cash awards under the 2011 Plan.

Approvals.    Under this Proposal No. 3, we are asking shareholders to approve an amendment to the 2011 Plan to increase the number of shares of our common stock that may be issued under the 2011 Plan, and to reapprove the 2011 Plan for purposes of refreshing our shareholder approval under Section 162(m) of the U.S. Internal Revenue Code, (“Section 162(m)”). An amendment and restatement to our 2011 Plan was approved by our Board of Directors at its February 22, 2012 meeting and will become effective upon approval by the Company’s shareholders at our 2012 Annual Meeting. The amended and restated 2011 Plan is intended to amend the Exelis Inc. 2011 Omnibus Incentive Plan on a prospective basis. If the amended and restated 2011 Plan is approved by our shareholders, the 2011 Plan will be amended on a prospective basis. If the 2011 Plan is not approved by our shareholders, the amended and restated Plan will be null and void and the 2011 Plan will remain in effect. Awards previously granted under the 2011 Plan will remain in effect in accordance with their terms. Other than the 2011 Plan, we currently have no other plan that provides for grants of stock awards to our employees or directors. The 2011 Plan, as amended and restated, will become effective when approved by our shareholders at the 2012 Annual Meeting of Shareholders.

The Board of Directors of the Company and ITT, as the sole shareholder, previously adopted and approved the 2011 Plan. Our 2011 Plan expires upon the date upon which the shares available for

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issuance under the 2011 Plan are purchased or acquired. As of the record date, of the shares of our common stock approved for issuance under the 2011 Plan, 18.5 million shares have either been issued or are subject to issuance under outstanding awards, so that only 9.5 million shares of our common stock remain available for future awards (not including any shares that might in the future be returned to the 2011 Plan as a result of awards expiring, being forfeited or otherwise terminating). The majority of the shares initially available under the 2011 Plan have been used to convert previously-granted awards of ITT equity into awards of Exelis equity. If this Proposal No. 3 is not approved by our shareholders, we currently anticipate that we will exhaust all of the shares available for issuance under our Plan by 2014. Therefore, we are requesting shareholder approval to increase the 2011 Plan’s share reserve by 12 million shares to a total of 40 million reserved under the 2011 Plan. In light of expected future grants, we expect that the addition of these shares will be sufficient to provide a competitive equity incentive program for approximately 3-4 years. In addition, re-approval of the 2011 Plan is being requested so that we may continue to grant performance-based awards to our named executive officers that are intended to be tax efficient for the Company under U.S. tax laws.

Summary of the 2011 Plan.    The Board has adopted an amendment and restatement of the 2011 Plan that includes the changes described above, adds additional performance criteria, and contains certain other clarifying changes to the 2011 Plan. The following summary of the amended and restated 2011 Plan is qualified in its entirety by the specific language of the amended and restated 2011 Plan, a copy of which is attached hereto as Appendix A.

Key Features Designed to Protect Shareholders’ Interests.    The 2011 Plan’s design reflects our commitment to strong corporate governance and the desire to preserve shareholder value as demonstrated by the following 2011 Plan features:

Purpose of the 2011 Plan.    The purpose of the 2011 Plan is to advance the interests of the Company by providing an incentive program that will enable the Company to attract, retain, and motivate employees and directors upon whose judgment, interest and efforts the Company’s success is

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dependent, and to provide them with an equity interest in the success of the Company in order to motivate superior performance. These incentives may be provided through the grant of stock options (including indexed options), stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, performance shares, and performance units.

Authorized Shares.     If the shareholders approve our proposal to authorize an additional 12 million shares for issuance under the Plan, the cumulative aggregate share authorization under our 2011 Plan will increase to 40 million. If the shareholders approve these additional shares, a total of 21.5 million remaining shares would be available for new grants under the 2011 Plan following the March 2012 awards. Without shareholder approval, only 9.5 million shares would be available for incentive compensation following the March 2012 awards.

A total of 40 million shares of our common stock will be reserved for issuance under the 2011 Plan. No shares were transferred from any prior plan to the 2011 Plan. For this purpose, shares that are subject to outstanding awards under a Prior Plan are not considered available for grants. The 2011 Plan contains a separate limit on the number of shares that can be issued with respect to “full value awards,” which includes restricted stock, restricted stock units and other awards other than stock options and stock appreciation rights granted with an exercise price at least equal to the fair market value of our shares on the grant date. This separate limit provides that 12.9 million shares will be available for issuance with respect to full value awards granted after December 31, 2011. As described in greater detail below, the 2011 Plan also provides that in certain circumstances where no shares are issued with respect to Prior Plan awards, such as upon forfeiture of the award, the shares subject to the Prior Plan award will be added to the 2011 Plan’s share reserves. As of December 31, 2011 the 2011 Plan had 13.8 million shares available for future grants of awards of which approximately 10.49 million could be issued as full value awards.

Summary Description of the Amendment and Restatement of the 2011 Plan

History of Stock Plans.    The amendment and restatement of the 2011 Plan amends on a prospective basis the 2011 Plan which was a new plan that replaced, on a prospective basis, a plan that was approved by the Board of Directors on March 11, 2003 and became effective upon approval by the shareholders at the 2003 Annual Meeting (the “Prior Plan”). On May 13, 2003, the Prior Plan replaced, on a prospective basis, the 2002 ITT Industries Stock Option Plan for Non-Management Directors, the ITT Industries 1996 Restricted Stock Plan for Non-Management Directors (the “1996 Plan”), and the 1994 ITT Industries Incentive Stock Plan. No new grants may be made from these prior plans. The Prior Plan was amended and restated by the ITT Board of Directors on February 15, 2008 and approved by ITT shareholders on May 13, 2008.

Administration.    The 2011 Plan is administered by the Exelis Compensation Committee of the Board of Directors. The Committee interprets the terms and intent of the 2011 Plan and determines who is eligible to receive awards under the 2011 Plan. The Committee may adopt rules, regulations and guidelines for administering the 2011 Plan and may delegate administrative duties to one or more of its members or to one or more agents or advisors. Additionally, the Committee may, by resolution, authorize one or more of our officers to designate who can receive awards and the size of the awards, except that the Committee may not delegate these responsibilities to any officer for awards granted to an employee that is considered one of our elected officers, or to the extent it would unintentionally cause awards not to qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code.

Eligibility.    All of our employees and directors and the employees of our subsidiaries and other affiliates are eligible to participate in the 2011 Plan. All employees and all Non-Management directors are currently eligible to participate. Because the 2011 Plan provides for broad discretion in selecting participants and in making awards, the total number of persons who will participate in the 2011 Plan and the benefits that will be provided to the participants cannot be determined at this time.

Stock Available for Issuance Under the 2011 Plan.    Subject to adjustment as provided in the 2011 Plan, the number of shares of our common stock reserved for issuance under the 2011 Plan shall be

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40 million. Upon the exercise of a stock-settled stock appreciation right or net-settled option granted under the 2011 Plan, the number of shares subject to the award (or portion of the award) that is then being exercised shall be counted against the maximum aggregate number of shares that may be issued under the 2011 Plan as provided above, on the basis of one share for every share subject thereto, regardless of the actual number of shares issued upon exercise and any shares withheld (or, with respect to restricted stock, returned) in satisfaction of tax withholding obligations shall be counted as shares issued.

Subject to adjustment as provided in the 2011 Plan, the number of shares of our common stock reserved for issuance of full value awards granted after December 31, 2011 shall not exceed 12.9 million.

Description of Awards Under the 2011 Plan.    Stock-based compensation will typically be issued in consideration for the performance of services to us and our subsidiaries and other affiliates. The 2011 Plan provides for a number of forms of stock-based compensation. The Committee may award stock options, stock appreciation rights, restricted stock, restricted stock units and other awards as described below.

Stock Options.    The Committee can award incentive stock options, which are intended to comply with Section 422 of the Internal Revenue Code, or nonqualified stock options, which are not intended to comply with Section 422 of the Internal Revenue Code. The Committee determines the terms of the stock options, including the period during which the stock options may be exercised, which may not exceed ten years, and the exercise price of the stock options, which may not be less than the fair market value of the underlying shares of common stock on the date the stock option is granted. Subject to the specific terms of the 2011 Plan, the Committee has discretion to set any additional limitations on stock option grants as it deems appropriate.

Each stock option award agreement sets forth the extent to which the participant will have the right to exercise the stock option following termination of the participant’s employment or service as a director. The termination provisions are determined within the discretion of the Committee, need not be uniform among all participants and may reflect distinctions based on the reasons for termination of employment or service as a director.

Upon the exercise of a stock option granted under the 2011 Plan, the exercise price is payable in full either in cash or its equivalent, tendering (either by actual delivery or attestation) previously acquired shares having an aggregate fair market value at the time of exercise equal to the exercise price, broker-assisted cashless exercise, net exercise, a combination of the foregoing or by any other method approved by the Committee in its sole discretion.

Stock Appreciation Rights (also referred to as “SARs”).    The Committee may grant stock appreciation rights in tandem with stock options, freestanding and unrelated to options, or any combination of these forms. In any case, the form of payment of a stock appreciation right will be determined by the Committee at the time of grant, and may be in shares of common stock, cash, or a combination of the two. If granted other than in tandem, the Committee will determine the number of shares of common stock covered by, and the exercise period for, the stock appreciation right.

The 2011 Plan provides that a stock appreciation right’s base price may not be less than the fair market value of the underlying shares of common stock on the date the stock appreciation right is granted.

Upon exercise of the stock appreciation right, the participant will receive an amount equal to the excess of the fair market value of one share of stock on the date of exercise over the fair market value of one share of the stock on the grant date, multiplied by the number of shares of stock covered by the stock appreciation right exercise. If granted in tandem with an option, a stock appreciation right’s exercise period may not exceed that of the option. The participant may exercise a tandem stock appreciation right when the option is exercisable, surrender the option, and receive on exercise an amount equal to the excess of the fair market value of one share of stock on the date we receive the

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surrender election over the option exercise price, multiplied by the number of shares of stock covered by the stock appreciation right exercise.

Each stock appreciation right award agreement will set forth the extent to which the participant will have the right to exercise the stock appreciation right following termination of the participant’s employment or service as a director. The termination provisions will be determined within the discretion of the Committee, need not be uniform among all participants and may reflect distinctions based on the reasons for termination of employment or service as a director.

Restricted Stock.    The Committee is also authorized to award shares of restricted common stock under the 2011 Plan upon such terms and conditions as it may establish. The participants may be required to pay a purchase price for each share of restricted stock granted. The award agreement will specify the period(s) of restriction, the number of shares of restricted common stock granted, such other provisions as the Committee determines and/or restrictions under applicable federal or state securities laws. Although participants may have the right to vote these shares from the date of grant, they will not have the right to sell or otherwise transfer the shares during the applicable period of restriction or until satisfaction of other conditions imposed by the Committee in its sole discretion. Participants may also receive dividends on their shares of restricted stock and the Committee, in its discretion, will determine how such dividends are to be paid.

Each award agreement for restricted stock will set forth the extent to which the participant will have the right to retain unvested restricted stock following termination of the participant’s employment or service as a director. These provisions are determined in the sole discretion of the Committee, need not be uniform among all shares of restricted stock issued under the 2011 Plan and may reflect distinctions based on reasons for termination of employment or service as a director.

Restricted Stock Units.    The Committee is also authorized to award restricted stock units under the 2011 Plan upon such terms and conditions as it establishes. The award agreement will specify the period(s) of restriction, the number of restricted stock units granted, such other provisions as the Committee determines and/or restrictions under applicable federal or state securities laws. The participants have no voting rights with respect to the restricted stock units and do not have the right to sell or otherwise transfer the units during the applicable period of restriction or until earlier satisfaction of other conditions imposed by the committee in its sole discretion. Participants may receive credit for dividends or dividend equivalents on their restricted stock units and the Committee, in its discretion, will determine how such credits for dividends or dividend equivalents on restricted stock units are to be paid.

Each award agreement for restricted stock units will set forth the extent to which the participant will have the right to retain unvested restricted stock units following termination of the participant’s employment or service as a director. These provisions will be determined in the sole discretion of the Committee, need not be uniform among all awards of restricted stock units issued under the 2011 Plan and may reflect distinctions based on reasons for termination of employment or service as a director.

Other Awards.    The Committee may grant other awards which may include, without limitation, unrestricted shares, the payment of shares in lieu of cash, the payment of cash based on attainment of performance goals, service conditions or other goals established by the Committee and the payment of shares in lieu of cash under other incentive or bonus programs. Payment under or settlement of any such other awards shall be made in such manner at such times and subject to such terms and conditions as the Committee may determine.

Performance Measures.    The Committee may grant awards under the 2011 Plan subject to the attainment of goals with respect to any of the following performance measures: net earnings, earnings per share, net income (before or after taxes), net sales growth, net operating profit, return measures (including, but not limited to, return on assets, capital, equity, or sales), productivity ratios, expense targets, working capital targets, cash flow (including, but not limited to, operating cash flow

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and free cash flow), cash flow return on capital, earnings before or after taxes, interest, depreciation and/or amortization, gross or operating margins, margins, operating efficiency, customer satisfaction, employee satisfaction metrics, human resources metrics, share price (including, but not limited to, growth measures and total shareholder return (or “TSR”)), and Economic Value Added or EVA^®.

Performance measures may be measured solely on the company’s or an affiliate’s performance, on a business unit basis, or a combination thereof. Performance measures may reflect absolute entity performance or a relative comparison of entity performance to the performance of a group of comparator companies, or published or special index that the Committee selects. The Committee may also compare the company’s stock price to various stock market indices. The Committee may provide in any award that any evaluation of performance may include or exclude any of the following events that occur during a performance period: (1) asset write-downs, (2) litigation or claim judgments or settlements, (3) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (4) any reorganization and restructuring programs, (5) extraordinary nonrecurring items as described in Accounting Standards Codification (“ASC”) 225-30, (formerly) Accounting Principles Board Opinion No. 30, and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year, (6) acquisitions or divestitures, and (7) foreign exchange gains and losses.

Subject to the individual and 2011 Plan limits described herein, the number of performance-based awards granted to any participant in any year is determined by the Committee in its sole discretion. The Committee may reduce, but not increase, the value of a performance-based award.

Individual Limits.    The maximum number of shares with respect to which stock options may be granted to an individual during any one year is 15 million. The maximum number of shares with respect to which stock appreciation rights may be granted to any individual during any one year is 15 million. The maximum number of shares of restricted stock or restricted stock units that may be granted to an individual during any one year is 3 million. The maximum number of shares with respect to which other awards may be granted to an individual during any one year is 3 million and the maximum cash that may be payable with respect to other awards granted to an individual in any one year is $12 million. The maximum aggregate value of cash dividends or dividend equivalents that any individual may receive pursuant to awards in any one year shall not exceed $5 million.

Adjustment, Change of Control and Amendments.    The 2011 Plan provides for appropriate adjustments in the number and nature of shares of common stock subject to outstanding awards, the number of shares available for awards under the 2011 Plan, the individual award limits in the 2011 Plan and the exercise price of options and the grant price of stock appreciation rights, in the event of restructuring events and certain other events that change the value of our stock, such as a merger, reorganization, stock split, stock dividend, recapitalization through a large, non-recurring cash dividend, spin off or other similar event. The Committee specifies in each Participant’s award agreement the treatment of outstanding awards upon a change of control.

The 2011 Plan may be modified or amended by the Committee at any time and for any purpose which the Committee deems appropriate, except that no amendment can adversely affect any outstanding awards in a material way without the affected award holder’s consent. Except for adjustments made in connection with events described in the prior paragraph, the exercise price of stock options and the grant price of stock appreciation rights issued under the 2011 Plan may not be reduced without the approval of shareholders.

Nontransferability.    Unless otherwise determined by the Committee and provided in a participant’s award agreement, awards may not be assigned or transferred by a 2011 Plan participant except by will or by the laws of descent and distribution, and any stock option or stock appreciation right is exercisable during a participant’s lifetime only by the participant or by the participant’s guardian or legal representative. Nonqualified stock options and stock appreciation rights may not be transferred for value or consideration.

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Section 162(m).    Section 162(m) of the Internal Revenue Code places a limit of $1 million on the amount we may deduct in any one year for compensation paid to our principal executive officer and our other three most highly-compensated executive officers other than our principal financial officer. There is, however, an exception to this limitation for certain performance-based compensation. Awards made pursuant to the 2011 Plan may constitute performance-based compensation that is not subject to the deductibility limitation of Section 162(m). To qualify for this exception, the shareholders must approve the material terms of the performance goals of the 2011 Plan. To continue to qualify for this exception, the shareholders must reapprove the material terms of the performance goals of the 2011 Plan every five years.

Approval of the amended and restated 2011 Plan by our shareholders at the 2012 Annual Meeting will be deemed to constitute approval of the material terms of the performance goals under the 2011 Plan for purposes of Section 162(m). The material terms of the performance goals include the persons eligible to participate in the 2011 Plan, as described under the heading “Eligibility” above, the performance measures upon which performance awards will be based, as described under the heading “Performance Measures” above, and the maximum shares or cash value of awards that may be granted to an individual in any one year, as described under the heading “Individual Limits” above.

Duration of the 2011 Plan.    Subject to the Committee’s right to terminate the 2011 Plan earlier, the 2011 Plan will remain in effect until all shares subject to the 2011 Plan have been purchased or acquired.

Federal Income Tax Consequences.    The following discussion covers some of the United States federal income tax consequences with respect to awards that may be granted under the 2011 Plan. It is a brief summary only. Participants should consult with their tax advisors for a complete statement of all relevant federal tax consequences. This summary does not describe state, local, or foreign tax consequences of an individual’s participation in the 2011 Plan.

Federal Income Tax Consequences — Participants

Options.    A plan participant will not recognize income for federal income tax purposes when incentive stock options are granted or exercised. If the participant disposes of shares acquired by exercise of an incentive stock option either before the expiration of two years from the date the options are granted or within one year after the issuance of shares upon exercise of the incentive stock option, the participant will recognize in the year of disposition: (a) ordinary income, to the extent the lesser of either (1) the fair market value of the shares on the date of option exercise, or (2) the amount realized on disposition exceeds the option exercise price; and (b) capital gain, to the extent the amount realized on disposition exceeds the fair market value of the shares on the date of option exercise. If the shares are sold after expiration of these holding periods, the participant generally will recognize capital gain or loss equal to the difference between the amount realized on disposition and the option exercise price.

The exercise of an incentive stock option may result in alternative minimum tax liability. The excess of the fair market value of the shares purchased on exercise of an incentive stock option over the exercise price paid for such shares is considered alternative minimum taxable income for alternative minimum tax purposes.

With respect to nonqualified stock options, the participant will recognize no income upon grant of the option, and, upon exercise, will recognize ordinary income to the extent of the excess of the fair market value of the shares on the date of option exercise over the stock option exercise price.

Upon a subsequent disposition of the shares received from the exercise of an option, the participant generally will recognize capital gain or loss to the extent of the difference between the fair market value of the shares at the time of exercise and the amount realized on the disposition.

Stock Appreciation Rights.    The recipient of a grant of stock appreciation rights will not realize taxable income on the date of such grant. Upon the exercise of a stock appreciation right, the

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recipient will realize ordinary income equal to the amount of cash or fair market value of stock received.

Restricted Stock.    A participant holding restricted stock will, at the time the shares vest, realize ordinary income in an amount equal to the fair market value of the shares and any cash received at the time of vesting. Dividends paid to the participant on the restricted stock during the restriction period will generally be ordinary income to the participant.

Restricted Stock Units.    A participant holding restricted stock units will, at the time the units vest, realize ordinary income in an amount equal to the fair market value of the shares and any cash received at the time of vesting.

Other Awards.    The tax consequences of other awards will depend upon the terms and conditions of such awards as determined by the Committee. However, a participant holding other awards will generally realize ordinary income in an amount equal to the fair market value of the shares or cash received at the time of payment of shares or cash.

Federal Tax Consequences — Exelis Inc.    In general, we will receive an income tax deduction at the same time and in the same amount as the amount which is taxable to the employee as ordinary income, except to the extent prohibited by Section 162(m) of the Internal Revenue Code. To the extent a participant realizes capital gains, as described above, we will not be entitled to any corresponding deduction for federal income tax purposes.

Section 162(m).    As described above, under Section 162(m) of the Internal Revenue Code, compensation paid to covered employees in excess of $1 million for any taxable year generally is not deductible by us unless such compensation qualifies as performance-based compensation, which requires, among other things, that the compensation is paid pursuant to a plan, the material terms of which have been approved by our shareholders. Generally, a covered employee under Section 162(m) means the principal executive officer and our three other highest compensated executive officers, other than our principal financial officer, as of the last day of the applicable tax year.

It is presently anticipated that the Committee will at all times consist of outside directors as required for purposes of Section 162(m), and that the Committee will take the effect of Section 162(m) into consideration in structuring plan awards.

Future Plan Benefits.    The future benefits that will be received under the plan by particular individuals or groups are not determinable at this time.

The Plan.    The amended and restated Exelis Inc. 2011 Omnibus Incentive Plan is provided at Appendix A.

The Board of Directors Recommendation

Under the laws of the State of Indiana, this matter is approved if the votes cast in favor of the proposal exceed the votes cast against the proposal. Accordingly, neither abstentions nor broker non-votes have any effect on the votes required under Indiana law. However, under NYSE rules, the 2011 Plan must be approved by a majority of the votes cast and the number of votes cast must represent more than 50% of all the shares entitled to vote. For purposes of the approval required under the NYSE rules, abstentions will have the effect of a vote against this agenda item and broker non-votes will have no effect, except to the extent they impact whether the 50% of all common shares entitled to vote test has been satisfied. For the purpose of determining whether the number of votes cast represents more than 50% of the shares of common stock entitled to vote, abstentions will count as votes cast and broker non-votes will not count as votes cast. Approval of the material terms of the amended and restated 2011 Plan for purposes of Section 162(m) requires the affirmative vote of a majority of votes cast. For this purpose, abstentions will have the same effect as a vote against this proposal and broker non-votes will have no effect.

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The Board of Directors recommends you vote FOR approval of the amendment and restatement of the Exelis Inc. 2011 Omnibus Incentive Plan.

Equity Compensation Plan Information

The following table sets forth information concerning the shares of common stock that may be issued under equity compensation plans as of December 31, 2011.

In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)) and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to approve, in a non-binding vote, the compensation of our named executive officers as disclosed on pages 48 to 124. The text of the resolution in respect of Proposal No. 4 is as follows:

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“RESOLVED, that the compensation paid to the Company’s named executive officers as disclosed in this Proxy Statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables, and any related narrative discussion, is hereby APPROVED.”

In considering their vote, shareholders may wish to review with care the information on the Company’s compensation policies and decisions regarding the named executive officers presented in Compensation Discussion and Analysis on pages 48 to 89.

In particular, shareholders should note that the Company’s Compensation and Personnel Committee bases its executive compensation decisions on the following:

While the results of the vote are advisory in nature, the Board of Directors intends to carefully consider the results of the vote.

The Board of Directors recommends that you vote FOR the approval of the compensation of our named executive officers.

In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Act) and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to recommend, in a non-binding vote, whether a non-binding shareholder vote to approve the compensation of our named executive officers (that is, votes similar to the non-binding vote in Proposal No. 4) should occur every one, two or three years.

In considering their vote, shareholders may wish to review with care the information presented in connection with Proposal No. 4 on page 27, as well as the information on the Company’s compensation policies and decisions regarding the named executive officers presented in Compensation Discussion and Analysis on pages 48 to 89.

After careful consideration, our Board of Directors has determined that a non-binding shareholder vote on executive compensation that occurs every year is the most appropriate frequency for Exelis at this time. In formulating its recommendation, our Board of Directors recognized that the Company’s executive compensation programs are designed to promote a long-term connection between pay and performance. However, because executive compensation disclosures are made annually, the Board of Directors considered that an annual advisory vote on executive compensation will allow shareholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our shareholders on corporate governance matters and our executive compensation philosophy, policies and practices.

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If the non-binding vote on executive compensation will occur every year, a resolution subject to a non-binding shareholder vote to approve the compensation of our named executive officers will be presented in the proxy materials for the 2013 Annual Meeting of Shareholders.

For the reasons stated above, the Board of Directors is recommending a vote for a one-year frequency for the non-binding shareholder vote to approve the compensation of our named executive officers. Note that shareholders are not voting to approve or disapprove the recommendation of the Board of Directors with respect to this proposal. Instead, each proxy card provides for four choices with respect to this proposal: a one, two or three year frequency or shareholders may abstain from voting on the proposal.

Your vote on this proposal will be non-binding on us and the Board of Directors, and it will not be construed as overruling a decision by us or the Board of Directors. Your vote will not create or imply any change to our fiduciary duties or create or imply any additional fiduciary duties for us or the Board of Directors. However, the Board of Directors values the opinions that our shareholders express in their votes and will consider the outcome of the vote when making future decisions on the inclusion of such proposals in the proxy materials as it deems appropriate.

The Board of Directors recommends that you vote ONE YEAR with respect to how frequently a non-binding shareholder vote to approve the compensation of our named executive officers should occur.

Information about the Board of Directors

Structure of the Board of Directors

As required by our Amended and Restated Articles of Incorporation, the Exelis Board of Directors is divided into three classes that are as nearly equal in number as possible. The initial terms of the Class I, Class II and Class III directors will expire at the annual meeting in 2012, 2013 and 2014, respectively, and in each case, when any successor has been duly elected and qualified. Upon the expiration of each initial term, directors will subsequently serve three-year terms if they are renominated and reelected. The Class I directors nominated for a three-year term include Ralph F. Hake, David F. Melcher and Herman E. Bulls. The Class II directors include Christina A. Gold, Steven R. Loranger, Patrick J. Moore and R. David Yost and the Class III directors include John. J. Hamre, Paul J. Kern, Mark L. Reuss and Billie I. Williamson. Directors Ralph F. Hake, Christina A. Gold, Paul J. Kern, and John J. Hamre were formerly Non-Management directors of ITT. Mr. Loranger, as Chairman, President and Chief Executive Officer of ITT, was an employee director.

Committees of the Board of Directors

Prior to the Distribution, the Board of Directors of the Company’s parent, ITT, engaged in an internal restructuring and established Exelis to effectuate a Spin-Off of ITT’s Defense & Information Solutions business. On October 11, 2011 Exelis established an Audit Committee, a Compensation and Personnel Committee and a Nominating and Governance Committee (collectively the “Committees”) as Committees of the Board, effective as of 11:59 p.m., New York time, on the date immediately prior to October 13, 2011, the when-issued trading date. The Committees are the current standing Committees of the Board of Directors.

Audit Committee.    The members of the Audit Committee are Christina A. Gold (chair), Ralph F. Hake, Patrick J. Moore and Billie I. Williamson. Billie I. Williamson joined the Audit Committee on January 1, 2012, replacing Paul J. Kern, who resigned from the Audit Committee effective as of January 1, 2012. Mrs. Gold’s service on the Audit Committee commenced as of 11:59 p.m., New York time, on the date immediately prior to October 13, 2011, the Company’s when-issued trading date, and Messrs. Hake and Kern commenced service on the Exelis Audit Committee immediately prior to October 31, 2011, the Distribution Date. The Audit Committee has responsibility, among

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other things, to meet periodically with management and with both our independent auditor and internal auditor to review audit results and the adequacy of and compliance with our system of internal controls. In addition, the Audit Committee will appoint or discharge our independent auditor, and review and approve auditing services, audit related services and permissible non-audit services to be provided by the independent auditor in order to evaluate the impact of undertaking such added services on the independence of the auditor. The responsibilities of the Audit Committee are more fully described in our Audit Committee charter. The Audit Committee charter is posted on our website at www.exelisinc.com/investors/Pages/Corporate-Governance.aspx and will be available in print to any shareholder who requests it. The Board of Directors has affirmatively determined that each of the members of the Audit Committee are independent and financially literate. Further, the Board of Directors has determined that Ms. Gold, Mr. Hake, Mr. Moore and Ms. Williamson (and previously Mr. Kern) possess accounting or related financial management expertise within the meaning of the NYSE listing standards and that Mr. Moore qualifies as an “audit committee financial expert” as defined under the applicable SEC rules.

Compensation and Personnel Committee.    The members of the Exelis Compensation Committee are Paul J. Kern (chair), Ralph F. Hake, Mark L. Reuss and R. David Yost. Dr. John J. Hamre served as a member of the Exelis Compensation Committee from the Distribution Date until the date he resigned from the Exelis Compensation Committee on November 3, 2011. The Exelis Compensation Committee oversees all compensation and benefit programs and actions that affect our senior executive officers. The Exelis Compensation Committee also provides strategic direction for our overall compensation structure, policies and programs and oversees and approves the continuity planning process. The responsibilities of the Exelis Compensation Committee are more fully described in the Exelis Compensation Committee charter. The Compensation and Personnel Committee charter is posted on our website at www.exelisinc.com/investors/Pages/Corporate-Governance.aspx and will be available in print to any shareholder who requests it.

Each member of the Exelis Compensation Committee is a Non-Management director and there are no Compensation Committee interlocks involving any members of the Exelis Compensation Committee. The Board has reviewed the background, experience, financial interests, employment, commercial, charitable, familial and other relationships of each of Messrs. Kern, Hake, Reuss and Yost, (and previously Dr. Hamre) and has determined that, each such person is (i) a “Non-Management director” of the Company as defined under Rule 16b-3 of the Exchange Act and (ii) an “outside director” as defined under Treasury Regulation Section 1.162-27(e)(3)(i) of the Internal Revenue Code of 1986, as amended.

Nominating and Governance Committee.    The members of the Nominating and Governance Committee are John J. Hamre (chair), Herman E. Bulls, Paul J. Kern and Steven R. Loranger. The Nominating and Governance Committee is responsible for, among other things, developing and recommending to the Board of Directors criteria for identifying and evaluating director candidates; identifying, reviewing the qualifications of and proposing candidates for election to the Board of Directors; and assessing the contributions and independence of incumbent directors in determining whether to recommend them for reelection to the Board of Directors. The Nominating and Governance Committee also reviews and recommends action to the Board of Directors on matters concerning transactions with related persons and matters involving corporate governance and, in general, oversees the evaluation of the Board of Directors. The responsibilities of the Nominating and Governance Committee are more fully described in the Nominating and Governance Committee charter. The Nominating and Governance Committee charter is posted on our website at www.exelisinc.com/investors/Pages/Corporate-Governance.aspx and will be available in print to any shareholder who requests it.

Director Independence.    Our Board of Directors, upon recommendation of our Nominating and Governance Committee, formally determines the independence of our directors. Our Board of Directors annually determines the independence of directors based on a review by the directors on

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the full Board of Directors and the Nominating and Governance Committee. The Exelis Board of Directors has affirmatively determined that each of Herman E. Bulls, Christina A. Gold, Ralph F. Hake, Paul J. Kern, John J. Hamre, Patrick J. Moore, Mark L. Reuss, Billie I. Williamson and R. David Yost are independent directors in accordance with the definition of an “independent director” pursuant to the rules of the NYSE and that none of these Directors has a material relationship with us, either directly or as a partner, shareholder, or officer of an organization that has a material relationship with us. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships, among others. Messrs. Melcher and Loranger are not considered independent directors, as Mr. Melcher is the Chief Executive Officer and President of Exelis and Mr. Loranger was the Chairman, President and Chief Executive Officer of ITT, from which Exelis was spun-off as a public company on October 31, 2011.

Non-Management Director Compensation

The Board of Directors typically reviews Non-Management Director compensation on a biennial basis. Non-Management Director compensation was last reviewed in 2011 in connection with the Spin-Off. In 2011, the ITT Nominating and Governance Committee retained Pay Governance LLC, (“Pay Governance”) a compensation consulting firm, to assist with a review of compensation for Non-Management Directors. As part of its review, Pay Governance compared Non-Management Director compensation components and total Non-Management Director compensation paid with director compensation components and total director compensation paid for a sample of companies in the S&P Industrials with median revenue comparable to Exelis’ revenue.

Upon the recommendation of Pay Governance and after review by the Exelis Compensation Committee, the Exelis Nominating and Governance Committee recommended, and the full Board of Directors of Exelis approved, a total compensation level of $190,000 for Exelis Non-Management Directors effective following the Spin-Off comprised of $100,000 in cash and $90,000 in restricted stock units for the full-year tenure. The full-year tenure runs from the date of the Annual Meeting to the day prior to the next Annual Meeting. Additional incremental pay for the full-year tenure includes a cash payment for the Audit Committee chair in the amount of $15,000. The non-executive Chairman of the Board receives an additional $125,000 comprised of $62,500 in cash and $62,500 in restricted stock units for the full-year tenure. The incremental payments for the Audit Committee Chair and the non-executive chairman were based on the significant responsibilities involved with these positions and reflect current competitive data.

Non-Management Director compensation is determined by our Board of Directors with the assistance of its Nominating and Governance Committee. In 2011, Exelis Non-Management Directors received only a portion of their annual compensation for their service as Non-Management Directors of Exelis from the Distribution Date through May 8, 2012, the day prior to the 2012 Exelis Annual Meeting of Shareholders. The restricted stock units granted in 2011 to ITT Non-Management Directors prior to November 7, 2011 were granted under the Non-Management Director compensation program, adopted in 2003, pursuant to the ITT 2003 Equity Incentive Plan (the “2003 Plan”).

Interim Directors

Mrs. Gold and Mr. Melcher were appointed by ITT to serve as Directors of Exelis as of 11:59 p.m. New York time, on the date immediately prior to the when-issued trading date. Messrs. Frank Jimenez and Aris Chicles were appointed by ITT to serve as Directors of Exelis effective at 11:59 p.m. New York time, on the date immediately prior to the when-issued trading date and resigned immediately prior to 12:01 a.m. New York time, on the Distribution Date. None of the interim directors were compensated by Exelis for service as an interim director.

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Non-Management Director Post Spin-Off Compensation

On November 7, 2011, all of our Non-Management Directors elected as of the Distribution Date, received $95,000, comprised of $50,000 as a cash retainer and $45,000 in restricted stock units for their service on the Board of Directors from the Distribution Date until May 8, 2012, the day prior to the 2012 Annual Meeting of Shareholders. An additional $7,500 cash retainer was paid to the Audit Committee chair, and the non-executive Chairman received an incremental payment of $62,500, which was comprised of $31,250 as a cash retainer and $31,250 in restricted stock units. Mr. Melcher, as a management Director, received no director compensation. Restricted stock units granted to Non-Management Directors vest on the business day immediately prior to the next Annual Meeting date. The grant date fair value of stock awards is provided in footnote (2) to the table below.

Exelis Non-Management Director compensation during 2011 does not include compensation received by each of Ralph F. Hake, John J. Hamre, Christina A. Gold, and Paul J. Kern as directors of ITT.

The following table sets forth information concerning the 2011 compensation awarded to Non-Management Directors of Exelis on November 7, 2011 for their service as Non-Management Directors from the Distribution Date through December 31, 2011.

Director Compensation Table

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Because Ms. Williamson joined the Exelis Board of Directors on January 1, 2012, her compensation is not included in the table on page 32. Ms. Williamson received her awards on January 3, 2012, the first business day following her election to the Exelis Board of Directors on January 1, 2012. She received a pro-rata annual retainer of $33,000 in cash and a pro-rata annual equity award of $30,000 in restricted stock units which were based on the closing price of Exelis stock on the grant date of January 3, 2012, the first business day after January 1, 2012, for her service on the Board of Directors from January 1, 2012 until the day prior to the 2012 Annual Meeting of Shareholders.

The table below represents restricted stock, restricted stock units and stock options outstanding as of December 31, 2011 for our Non-Management Directors. The restricted stock, restricted stock units and stock options reflect the conversion of ITT awards held by Messrs. Hake, Kern and Loranger, Dr. Hamre and Mrs. Gold who were Directors of ITT and who are currently Non-Management Directors of Exelis. Restricted stock, restricted stock units and stock options were allocated to ITT Non-Management Directors on a distributed basis, as each Non-Management Director was involved in the evaluation, analysis and decision to split ITT into three publicly traded companies. Restricted stock and stock options for Mr. Loranger, although not an ITT Non-Management Director, were also allocated on a distributed basis. For Mr. Hake, 13,517 of the 17,128 awards in this column represent restricted stock unit awards that were vested but deferred and the remainder represents restricted stock. For Mr. Loranger 168,281 of the 261,791 awards in this column represent restricted stock units which are vested but unsettled, the remainder represent restricted stock.

Restricted Stock, Restricted Stock Unit and

Stock Option Awards Outstanding at 2011 Fiscal Year-End

All Exelis Non-Management Directors were granted restricted stock units under the 2011 Plan. For grants on November 7, 2011, the number of restricted stock units was determined by dividing $45,000 by $10.95, the closing price per share of Exelis Inc. common stock on November 7, 2011. The resulting number of restricted stock units, 4,109.589, was rounded up to 4,110, the nearest whole number of units. Mr. Hake received 6,964 restricted stock units, representing $45,000 plus $31,250 for his service as Non-executive chairman of the Exelis Board of Directors. Ms. Williamson’s award, valued at $30,000, was granted based on the January 3, 2012 closing price per share of Exelis common stock of $9.31. The resulting number of restricted stock units 3,222.34, was rounded up to the nearest whole number of units. Ms. Williamson received 3,223 restricted stock units. Directors receive dividend equivalents on the restricted stock units but have no other rights as shareholders with respect to the restricted stock units.

Restricted shares previously awarded under the 1996 Plan which preceded the 2003 Plan, and under which restricted shares are still outstanding, provided that each Director’s restricted shares are held in escrow and may not be transferred in any manner until one of the following events occurs:

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Under the 2003 Plan and the 1996 Plan, Non-Management Directors may choose to extend the restriction period for not more than two successive five-year periods, or until six months and one day following the Non-Management Director’s termination from service from the Board of Directors under certain permitted circumstances. Under the 2011 Plan, Non-Management Directors may choose to extend the restriction period until the date the Director separates from service or the earlier of the separation from service date or a date selected subsequent to the scheduled vesting date. The Non-Management Director may make a subsequent deferral election for a period of not less than five years from the date such amounts would otherwise have been settled and paid under the deferral election then in effect, subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Section 409A is an Internal Revenue Code section that deals specifically with non-qualified deferred compensation plans and provides requirements and rules for timing of deferrals and distributions under those plans.

The 1996 Plan also provided that if a Director ceased serving on the Board under any other circumstances, shares with respect to which the 1996 Plan restrictions have not been lifted would be forfeited. Under the 2003 Plan, the period of restriction for restricted stock awarded is five years. The Exelis Compensation Committee may determine that a Director, whose service from the Board of Directors is terminated, has fulfilled the purpose for which the grant of restricted stock was made and lift the restriction for all or a portion of restricted stock awards. Time and form of payment for outstanding restricted stock received after 2004, as well as elections to have the cash retainer deferred after 2004, have been modified, with the consent of each Director, to comply with Section 409A.

Exelis reimburses Non-Management Directors for expenses they incur to travel to and from Board of Director, Committee and shareholder meetings and for other Company-business related expenses (including travel expenses of spouses if they are specifically invited to attend an event for appropriate business purposes). Such travel may include use of the Company aircraft, if available and approved in advance by the Chief Executive Officer and President of Exelis. Director airfare is reimbursed at no greater than first-class travel rates.

Indemnification and Insurance.    As permitted by its By-laws, Exelis indemnifies its Directors to the full extent permitted by law and maintains insurance to protect the Directors from liabilities, including certain instances where it could not otherwise indemnify them. All Directors are covered under a non-contributory group accidental death and dismemberment policy that provides each of them with $1,000,000 of coverage. They may elect to purchase additional coverage under that policy. Non-Management Directors also may elect to participate in an optional non-contributory group life insurance plan that provides $100,000 of coverage.

Responsibilities of the Board of Directors.    The Board of Directors sets policy for Exelis and advises and counsels the Chief Executive Officer and the executive officers who manage the Company’s business and affairs. The Board of Directors is responsible for assuring that:

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Governance Principles.    The Board of Directors has adopted the Corporate Governance Principles and charters for each of its standing committees. The Corporate Governance Principles provide, among other things, that the Board of Directors is responsible for selecting the Chairman of the Board of Directors and the Chief Executive Officer in any way it considers in the best interests of the Company. The Board of Directors of the Company has determined that the Chairman should be a non-executive chair, to provide additional guidance, advice, and counsel and to allow the Chief Executive Officer and President to focus on managing Exelis businesses and strategy. The non-executive chair presides at regularly scheduled private sessions of the Non-Management Directors and, with input from the Chief Executive Officer, establishes the agenda for meetings of the Board of Directors. The Corporate Governance Principles further provide that Directors must be able to devote the requisite time for preparation and attendance at regularly scheduled Board of Directors and Board of Directors Committee meetings, as well as be able to participate in other matters necessary for good corporate governance. To help assure that Directors are able to fulfill their commitments to the Company, the Corporate Governance Principles provide that Directors who are chief executive officers of publicly traded companies may serve on not more than two public company boards (including the Exelis Board of Directors) in addition to service on their own board and other Directors who are not chief executive officers of publicly traded companies may not serve on more than four public company boards (including the Exelis Board of Directors). The Corporate Governance Principles and Committee charters are reviewed by the Board at least annually and posted on the Company’s website at http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx. A copy of the Corporate Governance Principles will be provided, free of charge, to any shareholder upon request to the Corporate Secretary of Exelis.

Leadership Structure.    The Board of Directors believes that the decision as to whether to combine or separate the chief executive officer and Chairman of the Board of Directors positions will depend on the facts and circumstances facing the Company at a given time and could change over time. In today’s challenging economic and regulatory environment, directors, more than ever, are required to spend a substantial amount of time and energy in successfully navigating a wide variety of issues and in guiding the policies and practices of the companies they oversee. To that end, although we do not have a formal policy with respect to separation of the Chairman and chief executive officer positions, we believe that, having a separate Chairman, whose sole job is to lead the Board, allows our Chief Executive Officer and President, Mr. Melcher, to completely focus his time and energy on running the day-to-day operations of our Company. The Board believes that the Company’s current leadership structure does not adversely affect the Board’s role in risk oversight of the Company.

Communication with the Board of Directors.    Interested parties may contact the non-executive Chairman, all outside Directors as a group, the entire Board of Directors, a committee of the Board of Directors or an individual Director by submitting a letter to the desired recipient in a sealed envelope labeled “non-executive Chairman,” “Outside Directors,” “Board of Directors”, or with the name of the Board committee or a specific director. This sealed envelope should be placed in a larger envelope and mailed to the Corporate Secretary, Exelis Inc. 1650 Tysons Blvd. Suite 1700, McLean VA, 22102, USA. The Corporate Secretary will forward the sealed envelope to the designated recipient.

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Policies for Approving Related Person Transactions.    The Company and the Board have adopted formal written policies for evaluation of potential related person transactions, as those terms are defined in the SEC’s rules for executive compensation and related person disclosure, which provide for review and pre-approval of transactions which may or are expected to exceed $120,000 involving Non-Management Directors, Executive Officers, beneficial owners of five percent or more of the Company’s common stock or other securities and any immediate family of such persons. The Company’s policy generally groups transactions with related persons into two categories: (1) transactions requiring the approval of the Nominating and Governance Committee and (2) certain transactions, including ordinary course transactions below established financial thresholds, that are deemed pre-approved by the Nominating and Governance Committee.

In reviewing related person transactions that are not deemed pre-approved for approval or ratification, the Nominating and Governance Committee considers the relevant facts and circumstances, including:

The Nominating and Governance Committee is deemed to have pre-approved certain transactions identified in Item 404(a) of Regulation S-K that are not required to be disclosed even if the amount involved exceeds $120,000. In addition, any transaction with another company at which a related person’s only relationship is as an employee (other than an executive officer), director and/or beneficial owner of less than 10% of that company’s shares is deemed pre-approved; provided, however, that with respect to directors, if a director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues, such transaction shall be reviewed by the Nominating and Governance Committee and not considered appropriate for automatic pre-approval. Regardless of whether a transaction is deemed pre-approved, all transactions in any amount are required to be reported to the Nominating and Governance Committee. Subsequent to the adoption of the written procedures above, the Company has followed these procedures regarding all reportable related person transactions. The Company’s Related Person Transaction Policy is posted on the Company’s website at: http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx.

Code of Conduct.    The Company has also adopted the Exelis Code of Conduct which applies to all employees, including the Company’s Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer and, where applicable, to its Non-Management Directors. The Code of Conduct is also posted on the Company’s website at https://www.exelisinc.com/corpresp/Pages/Code-of-Conduct.aspx. The Company discloses any changes or waivers from the Code of Conduct on its website for the Company’s Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, its Non-Management Directors and other executive officers. In addition, the Company will disclose within four business days any substantive changes in or waivers of the Code of Conduct granted to our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, or persons performing similar functions, by posting such information on our website rather than by filing a Form 8-K. A copy of the Code of Conduct will be provided, free of charge, to any shareholder upon request to the Corporate Secretary of Exelis.

Independent Directors.    The Company’s By-laws require that a majority of the Directors must be independent directors. Additionally, the Company’s Non-Management Directors must meet the independence standards of the NYSE and the Company’s Corporate Governance Principles. The

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Charters of the Audit, Compensation and Personnel and Nominating and Governance Committees require all members to be independent directors in accordance with the rules of the NYSE. With respect to the Nominating and Governance Committee the Committee shall include at least a majority of members determined to be independent within 90 days of October 13, 2011, the listing date on the NYSE applicable to the Company’s common stock (the “Listing Date”); and be composed solely of members determined to be independent within one year of the Listing Date. Mr. Loranger is not independent because of his former position as Chairman, President and Chief Executive Officer of ITT. Mr. Melcher is not independent because he is the Chief Executive Officer and President of Exelis.

Based on its review, the Board of Directors affirmatively determined, after considering all relevant facts and circumstances, that no Non-Management Director, with the exception of Mr. Loranger, has a material relationship with the Company and that all Non-Management Directors, including all members of the Audit, Compensation and Personnel and Nominating and Governance Committees (with the exception of Mr. Loranger) meet the independence standards, in the current NYSE corporate governance rules for listed companies, which is also the independence standard for directors as set forth in the Company’s Corporate Governance Principles.

Each year, the Company’s Directors and executive officers complete annual questionnaires designed to elicit information about potential related person transactions. Additionally, Directors and executive officers must promptly advise the Corporate Secretary if there are any changes to the information previously provided.

The Nominating and Governance Committee reviews and considers all relevant facts and circumstances with respect to independence for each Director standing for election prior to recommending selection as part of the slate of Directors presented to the shareholders for election at the Company’s Annual Meeting. The Nominating and Governance Committee reviews its recommendations with the full Board, which separately considers and evaluates the independence of Directors standing for re-election using the standards described above.

In February 2012, the Board considered regular commercial sales and payments in the ordinary course of business as well as charitable contributions with respect to each of the Non-Management Directors standing for re-election at the Company’s 2012 Annual Meeting. In particular, the Board evaluated the amount of sales to Exelis or purchases by Exelis with respect to companies where any of the Directors serve or served as an executive officer or director.

In no instances was a Director a current employee, or was an immediate family member of a Director a current executive officer of a company that has made payments to, or received payments from the Company for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million, or 2% of each respective company’s consolidated gross revenues. The Board also considered the Company’s charitable contributions to non-profit organizations with respect to each of the Non-Management Directors. No contributions exceeded 1% of the consolidated gross revenues of any non-profit organization. With respect to each Non-Management Director, Exelis made no contributions of $120,000 or greater to any charitable or non-profit organization.

The following are the independent directors standing for election at the 2012 Annual Meeting of Shareholders: Messrs. Hake and Bulls.

Board and Committee Roles in Oversight of Risk.    The Board of Directors has primary responsibility for overall risk oversight, including the Company’s risk profile and management controls. The Audit Committee of the Board monitors the Company’s operational and regulatory risk management and risk assessment program, including all risk mitigation processes. The General Internal Auditor, who has responsibility for assessing, monitoring and auditing the Company’s global risk profile, reports directly to the Audit Committee and reports on a functional basis to the Chief Financial Officer. The Audit Committee and the Board of Directors monitors financial liquidity and financing risk. The Exelis Compensation Committee reviews and assesses compensation and incentive program risks to ensure that

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the Company’s compensation programs encourage innovation and balance appropriate business risk and rewards without encouraging risk-taking behaviors which may have a material adverse effect on the Company. The Exelis Compensation Committee structures compensation so that unnecessary or excessive risk-taking behavior is discouraged and behaviors correlated with long-term value creation are encouraged. The Board and its Audit and Compensation and Personnel Committees receive regular reports with respect to the Company’s risk profile and risk management controls.

Compensation Committee Interlocks and Insider Participation.    None of the members of the Exelis Compensation Committee during fiscal year 2011 or as of the date of this Proxy Statement has been an officer or employee of the Company and no executive officer of the Company served on the Exelis Compensation Committee or board of any company that employed any member of the Exelis Compensation Committee or Board of Directors.

Director Selection and Composition.    Directors of the Company must be persons of integrity, with significant accomplishments and recognized business stature. The Nominating and Governance Committee desires that the Board of Directors be diverse in terms of its viewpoints, professional experience, education and skills as well as race, gender and national origin. In addition, the Exelis Corporate Governance Principles state that, as part of the membership criteria for new Board members, individuals must possess such attributes and experiences as are necessary to provide a broad range of personal characteristics including diversity, management skills, and technological, business and international experience. On an annual basis, as part of its self-evaluation, the Board of Directors assesses whether the mix of directors is appropriate for the Company. In addition, the Nominating and Governance Committee assesses the effectiveness of these criteria by referring to the criteria when it periodically assesses the composition of the Board. The Board of Directors actively seeks to consider diverse candidates for membership on the Board when it has a vacancy to fill and includes diversity as a specific factor when conducting any search. As part of its process in identifying new candidates to join the Board of the Directors, the Nominating and Governance Committee considers whether and to what extent the candidate’s attributes and experiences will individually and collectively complement the existing Board, recognizing that the Exelis businesses and operations are diverse and global in nature. Currently, the Board consists of eleven directors. Out of the eleven directors, two are female and one is African American. The directors come from diverse professional backgrounds, including technology, financial, pharmaceutical and manufacturing industries as well as governmental and non-governmental agencies. To be considered by the Nominating and Governance Committee as a Director candidate, a nominee must meet the requirements of the Corporate Governance Principles.

In addition to these minimum qualifications, the Nominating and Governance Committee evaluates each nominee’s skills to determine if those skills are complementary to the skills demonstrated by current Board members. The Nominating and Governance Committee also evaluates the Board’s needs for operational, technical, management, financial, international or other expertise.

Prior to recommending nominees for election as Directors, the Company’s Nominating and Governance Committee engages in a deliberative, evaluative process to ensure each nominee possesses the skills and attributes that individually and collectively will contribute to an effective Board of Directors. Biographical information for each candidate for election as a Director is evaluated and candidates for election participate in interviews with existing Board members and management. Each candidate is subject to thorough background checks. Director nominees must be willing to commit the requisite time for preparation and attendance at regularly scheduled Board and Committee meetings and participation in other matters necessary for good corporate governance.

The Nominating and Governance Committee identifies Director candidates through a variety of sources including search firms, personal references and business contacts. The Nominating and Governance Committee utilized a search firm to identify and screen several newly appointed Exelis Director candidates and paid a fee to that firm for each such candidate elected to the Board of the Company. The Nominating and Governance Committee will consider director nominees recommended by shareholders for election to the Company’s Board who meet the qualification

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standards described above (See Section II F of the Nominating and Governance Charter at

http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx.) The Nominating and Governance Committee also evaluates and makes recommendations to the Board of Directors concerning appointment of Directors to Board Committees, selection of Board Committee Chairs, Committee member qualifications, Committee member appointment and removal, Committee structure and operations and proposal of the Board slate for election at the Annual Meeting of Shareholders, consistent with criteria approved by the Board of Directors.

Committees of the Board of Directors in 2011.    The standing Committees of the Board described below perform essential corporate governance functions.

Audit Committee

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Although more than one member of the Board of Directors satisfies the requirements of the audit committee financial expert, the Board of Directors has identified Patrick J. Moore as the audit committee financial expert.

Independence

Mrs. Gold and Mr. Hake previously served on the ITT Audit Committee. The Board of Directors has determined that each member of the Audit Committee meets the independence standards set out in the Board’s Corporate Governance Principles, its Audit Committee Charter, the requirements of the NYSE currently in effect and Rule 10A-3 of the Exchange Act. The Board of Directors has evaluated the performance of the Audit Committee consistent with the regulatory requirements.

A copy of the Audit Committee Charter is available on the Company’s website http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx. The Company will provide, free of charge, a copy of the Audit Committee Charter to any shareholder, upon request to the Corporate Secretary of Exelis.

Compensation and Personnel Committee

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More detail regarding the processes and procedures used to determine executive compensation is found in the Compensation Discussion and Analysis starting on page 48.

Independence

Mr. Hake previously served on the ITT Compensation and Personnel Committee. The Board of Directors has determined that each member of the Exelis Compensation Committee meets the independence standards set out in the Board’s Corporate Governance Principles, its Compensation and Personnel Committee Charter and the requirements of the NYSE currently in effect. The Board has determined that, each such person is (i) a “non-employee director” of the Company as defined under Rule 16b-3 of the Exchange Act and (ii) an “outside director” as defined under Treasury Regulation Section 1.162-27(e)(3)(i) of the Internal Revenue Code of 1986, as amended. A copy of the Exelis Compensation Committee Charter is available on the Company’s website http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx. The Company will provide, free of charge, a copy of the Compensation and Personnel Committee Charter to any shareholder, upon request to the Corporate Secretary of Exelis.

Nominating and Governance Committee

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As described on pages 38 the Nominating and Governance Committee will consider director nominees recommended by shareholders for election to the Company’s Board who meet the qualification standards. (See Section II.F of the Nominating and Governance Charter at http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx.)

Independence

Dr. Hamre previously chaired the ITT Nominating and Governance Committee. The Board of Directors has determined that each member of the Nominating and Governance Committee, except for Mr. Loranger, meets the independence standards set out in the Board’s Corporate Governance Principles, its Nominating and Governance Committee Charter and the requirements of the NYSE currently in effect. A majority of the Nominating and Governance Committee Members were independent at the time of the Spin-Off, as required by the NYSE. A copy of the Nominating and Governance Committee Charter is available on the Company’s website http://www.exelisinc.com/investors/Pages/Corporate-Governance.aspx. The Company will provide, free of charge, a copy of the Nominating and Governance Committee Charter to any shareholder, upon request to the Corporate Secretary of Exelis.

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Meetings of the Board and Committees

During 2011, there were two regularly scheduled Exelis Board meetings and six meetings of its standing Committees. All Directors attended 100% of all meetings of the Exelis Board and standing Committees on which they served. It is Company practice that all Directors attend the Company’s Annual Meeting. For 2012, the Board has scheduled five regular meetings. In conjunction with the regular meetings, those Directors who are not employees of Exelis are scheduled to meet privately (without management) following each Board meeting during the year. The non-executive Chairman presides over these private meetings.

Report of the Audit Committee

The following Report of the Audit Committee does not constitute soliciting material and the Report should not be deemed filed or incorporated by reference into any other previous or future filings by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein.

Role of the Audit Committee.    The Audit Committee of the Board of Directors provides oversight on matters relating to the Company’s financial reporting process and ensures that the Company develops and maintains adequate financial controls and procedures, and monitors compliance with these processes. This includes responsibility for, among other things:

The Audit Committee also has oversight responsibility for confirming the scope and monitoring the progress and results of internal audits conducted by the Company’s internal auditor. The Audit Committee discussed with the Company’s internal auditors and Deloitte the plans for their respective audits. The Audit Committee met with the internal auditors and Deloitte, with and without management present, and discussed results of their examinations, their evaluation of the Company’s internal controls, and the Company’s financial reporting.

The Company’s management has primary responsibility for the financial statements, including the Company’s system of disclosure and internal controls. The Audit Committee may investigate any matter brought to its attention. In that regard, the Audit Committee has full access to all books, records, facilities and personnel of the Company and the Audit Committee may retain outside counsel, auditors or other independent experts to assist the Committee in performing its responsibilities. Any individual may also bring matters to the Audit Committee confidentially or on an anonymous basis, by submitting the matter in a sealed envelope addressed to the “Audit Committee” to the Corporate Secretary who then forwards the sealed envelope to the Audit Committee.

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Sarbanes-Oxley Act of 2002 (“SOX”) Compliance.    The Audit Committee has responsibility for monitoring all elements of the Company’s compliance with Sections 302 and 404 of SOX relating to internal control over financial reporting.

Audit Committee Charter.    The Board of Directors has adopted a written charter for the Audit Committee, which the Board of Directors and the Audit Committee review, and at least annually update and reaffirm. The Charter sets out the purpose, membership and organization, and key responsibilities of the Audit Committee.

Composition of the Audit Committee.    The Audit Committee comprises four members of the Company’s Board. The Board of Directors has determined that each Audit Committee member meets the independence standards set out in the requirements of the New York Stock Exchange currently in effect, including the audit committee independence requirements of Rule 10A-3 of the Exchange Act. No member of the Audit Committee has any relationship with the Company that may interfere with the exercise of independence from management and the Company. All members of the Audit Committee, in the business judgment of the full Board of Directors, are financially literate and several have accounting or related financial management expertise.

Regular Review of Financial Statements.    The Audit Committee reviewed and discussed the Company’s audited financial statements with management. The Audit Committee, management and Deloitte reviewed and discussed the Company’s unaudited financial statements before the release of a quarter’s earnings report and filing on Form 10-Q, and the Company’s audited financial statements before the annual earnings release and filing of the Company’s 2011 Form 10-K.

Communications with Deloitte.    The Audit Committee has discussed with Deloitte the matters required to be discussed by required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380) as adopted by the Public Company Accounting Oversight Board in Rule 3200T (“SAS 61”). These discussions included all matters required by SAS 61, including Deloitte’s responsibilities under generally accepted auditing standards in the United States, significant accounting policies and management judgments, the quality of the Company’s accounting principles and accounting estimates. The Audit Committee met privately with Deloitte once during 2011.

Independence of Deloitte.    Deloitte is directly accountable to the Audit Committee and the Board of Directors. The Audit Committee has received the written disclosures and the letter from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte’s communications with the Audit Committee concerning independence and has discussed with Deloitte their independence from management and the Company, any disclosed relationships and the impact of those relationships on Deloitte’s independence.

Recommendation Regarding Annual Report on Form 10-K.    In performing its oversight function with regard to the 2011 financial statements, the Audit Committee relied on financial statements and information prepared by the Company’s management. It also relied on information provided by the internal audit staff as well as Deloitte. The Audit Committee reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2011. Based on these discussions, and the information received and reviewed, the Audit Committee recommended to the Company’s Board of Directors that the financial statements be included in the 2011 Annual Report on Form 10-K.

This report is furnished by the members of the Audit Committee.

Christina A. Gold, Chair

Ralph F. Hake

Paul J. Kern (resigned from the Audit Committee effective January 1, 2012)

Patrick J. Moore

Billie I. Williamson (joined the Audit Committee effective January 1, 2012)

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Compensation Committee Report

The following Report of the Compensation and Personnel Committee does not constitute soliciting material and the Report should not be deemed filed or incorporated by reference into any other previous or future filings by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein.

The Compensation and Personnel Committee of the Board of Directors approves and oversees administration of the Company’s executive compensation program and senior leadership development and continuity programs. The Committee’s primary objective is to establish a competitive executive compensation program that clearly links executive compensation to business performance and shareholder return. The Exelis Compensation and Personnel Committee considers appropriate risk factors in structuring compensation to discourage unnecessary or excessive risk-taking behaviors and encourage long-term value creation.

Recommendation Regarding Compensation Discussion and Analysis

In performing its oversight function during 2011 with regard to the Compensation Discussion and Analysis prepared by management, the Exelis Compensation and Personnel Committee relied on statements and information prepared by the Company’s management. It also relied on information provided by Pay Governance, LLC, the compensation consultant to the Exelis Compensation and Personnel Committee. The Committee reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management. Based on this review and discussion, the Exelis Compensation and Personnel Committee recommended to the Company’s Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for 2011 and this Proxy Statement.

This report is furnished by the members of the 2011 Exelis Compensation and Personnel Committee.

Paul J. Kern, Chair

Ralph F. Hake

John J. Hamre (resigned from the Compensation and Personnel Committee effective November 3, 2011)

Mark L. Reuss

R. David Yost

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

Prior to the Spin-Off from ITT, we were a wholly-owned subsidiary of ITT. On October 31, 2011, shares of the Company, comprised of the Defense and Information Solutions business segment of ITT, were distributed to shareholders of record of ITT on October 17, 2011. In November 2011, we formed our own Compensation and Personnel Committee (the “Exelis Compensation Committee”) that is responsible for our executive compensation philosophy and programs prospectively, which may be different from the compensation programs that were in place for 2011. The Exelis Compensation Committee has the flexibility to establish appropriate compensation policies to attract, motivate and retain our executives in the industry in which we operate.

Prior to the Spin-Off from ITT, each of our named executive officers was employed by ITT. Our named executive officers (“NEOs”) for 2011 were David F. Melcher, Chief Executive Officer and President and formerly Senior Vice President, ITT and President, Defense and Information Solutions of ITT; Peter J. Milligan, Senior Vice President and Chief Financial Officer and formerly Vice President, Chief Financial Officer, Defense and Information Solutions of ITT; Christopher C. Bernhardt, Executive Vice President, Exelis and President of Electronic Systems and formerly President, Electronic Systems, a Division of Defense and Information Solutions of ITT; Christopher D. Young, Executive Vice President, Exelis and President of Geospatial Systems and formerly President and General Manager, Geospatial Systems, a Division of Defense and Information Solutions of ITT; and Michael R. Wilson, Executive Vice President, Exelis and President of Information Systems and formerly President, Information Systems, a Division of Defense and Information Solutions of ITT.

Our historical compensation strategy was primarily determined by the Compensation Committee of ITT (the “ITT Compensation Committee”), which approved and oversaw the administration of ITT’s executive compensation program during the first ten months of calendar year 2011. As a newly independent public company, the Exelis Compensation Committee determined the Company’s executive compensation for the months of November and December 2011 and will determine executive compensation for 2012 and beyond. Since the information presented in this document relates to the full 2011 fiscal year, this Compensation Discussion and Analysis describes ITT’s compensation programs and decisions with respect to 2011, including all elements of ITT’s executive compensation program as determined by the ITT Compensation Committee. Our compensation philosophy for the last two months of 2011 was similar to ITT’s compensation philosophy for the preceding ten months. We expect that the Exelis 2012 compensation philosophy will reflect Exelis’ industry and peers going forward.

Each historical ITT collection of similarly themed and synergistic business areas was referred to as a Value Center prior to the Spin-Off. “Value Center” will be referred to as “Division” or “Divisions” in discussions of compensation in the Compensation Discussion and Analysis, as this is the classification used by Exelis.

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Executive Summary — NEO Compensation

2011 Compensation Highlights

ITT’s compensation philosophy tied a substantial portion of executive compensation to internal business performance and share price performance. Compensation design for executives was structured to achieve long-term shareholder value creation without undue business risk. If internal business performance or share price performance fell below identified thresholds, at-risk compensation was reduced or not paid at all.

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The ITT Compensation Committee adopted an executive compensation program which reflected best pay practices in light of the business needs of ITT. The Exelis Compensation Committee has also adopted an executive compensation program which reflects the same best pay practices for the Company, including the following:

Independent Compensation Consultant

Historically.    For the first ten months of 2011, the ITT Compensation Committee retained Pay Governance as its independent compensation consultant. Pay Governance provided independent consulting services in support of the ITT Compensation Committee’s charter. The Compensation Consultant also provided independent consulting services in support of the ITT Nominating and Governance Committee’s charter, including providing competitive data on director compensation. The Compensation Consultant’s engagement leader provided objective expert analyses, assessments, research and recommendations for executive compensation programs, incentives, perquisites, and compensation standards. In this capacity, the Compensation Consultant provided services that related solely to work performed for and at the direction of the ITT Compensation Committee, including analysis of material prepared by ITT for the ITT Compensation Committee’s review. In 2011, ITT’s human resources, finance and legal departments supported the work of the ITT Compensation Committee, provided information, answered questions and responded to requests. Additionally, the Compensation Consultant provided analyses to ITT’s Nominating and Governance Committee and the full Board of Directors on Non-Management Director compensation. Pay Governance provided no other services to ITT prior to the Spin-Off.

Following the Distribution.    The Exelis Compensation Committee retained Pay Governance LLC (The “Compensation Consultant”) as its independent compensation consultant for the last two months of 2011 and going forward. Exelis has adopted the same approach with respect to the Compensation Consultant as ITT adopted prior to the Spin-Off. The Compensation Consultant provided no other services to Exelis during 2011.

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Compensation Programs

Historically.    The ITT Compensation Committee established ITT’s compensation programs to reflect ITT’s overarching business rationale and established programs that were designed to be reasonable, fair, fully disclosed and consistently aligned with long-term value creation. This compensation philosophy encouraged individual and group behaviors that balance risk and reward and assisted ITT in achieving steady, sustained growth and earnings performance. In 2011, the ITT Compensation Committee looked to competitive market compensation data for companies comparable to ITT to establish overall policies and programs that address executive compensation, benefits and perquisites. This review included analysis of the Towers Watson Compensation Data Bank (“CDB”) information provided by Pay Governance. The analyses used a sample of 192 companies from the S&P Industrials Companies that were available in the CDB. The compensation data from these companies were evaluated by Pay Governance for differences in the scope of operation as measured by annual revenue. Appendix B lists the sample of companies from the S&P Industrials Companies that were used in the CDB analysis.

Following the Distribution.    Exelis adopted a similar executive compensation philosophy with respect to our NEOs following the Distribution and our future compensation objective will be to implement compensation programs that reflect our overarching business rationale and are designed to be reasonable, fair, fully disclosed and consistently aligned with long-term value creation. The Compensation Consultant provided competitive market compensation data for the NEOs of Exelis with respect to 2012 compensation decisions based on a group of peer companies (the “Exelis Compensation Peer Group”) consisting of:

These companies consisted of Aerospace / Defense companies available in the CDB with annual revenues greater than $1 billion. The Exelis Compensation Committee considers these Aerospace/Defense companies as being most representative of the companies which comprise the marketplace in which Exelis competes for talent. Data from these companies were adjusted, using a regression analysis, to reflect Exelis’ scope of operation, as measured by annual revenue.

NEO Compensation

Historically.    The ITT Compensation Committee delegated to ITT’s senior human resources executive responsibility for administering the executive compensation program. During 2011, ITT’s Chief Executive Officer and senior human resources executive made recommendations to the ITT Compensation Committee regarding executive compensation actions and incentive awards. Mr. Melcher was a named executive officer of ITT for 2011. The ITT Compensation Committee reviewed each compensation element for Mr. Melcher and made the final determination regarding executive compensation for him using the processes described for ITT in this Compensation Discussion and Analysis. With respect to Messrs. Bernhardt, Young and Wilson, Mr. Melcher, in his role as President of Defense and Information Solutions for ITT made recommendations to the

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Chairman, President and Chief Executive Officer of ITT regarding executive compensation for these executives and, after discussing Mr. Melcher’s recommendations, the final executive compensation determinations were made jointly by Mr. Melcher and the Chairman, President and Chief Executive Officer of ITT. With respect to Mr. Milligan’s compensation, Mr. Melcher, in his role as President of Defense and Information Solutions for ITT, made recommendations to both the Chairman, President and Chief Executive Officer of ITT and to ITT’s Senior Vice President and Chief Financial Officer, and after discussing Mr. Melcher’s recommendations, Mr. Milligan’s final compensation determination was made jointly by Mr. Melcher, the Chairman, President and Chief Executive Officer of ITT and ITT’s Senior Vice President and Chief Financial Officer. The ITT Compensation Committee also approved the 2011 long-term incentive awards for the Exelis NEOs.

Following the Distribution.    The ITT Compensation Committee, based on competitive market data provided by the Compensation Consultant and recommendations from ITT’s Chief Executive Officer and Senior Human Resources Executive, made recommendations with respect to all compensation components for our NEOs following the Distribution. The Exelis Compensation Committee considered this data when it approved all elements of compensation for our NEOs following the Distribution. The Exelis Compensation Committee will also delegate to a senior human resources executive responsibility for administering the executive compensation program.

Individual Executive Positions

Historically.    ITT’s senior management positions, including each of its named executive officer positions, were compared to positions with similar attributes and responsibilities based on the CDB information. This information was used to provide the market median dollar value for annual base salary, annual incentives and long-term incentives. Compensation levels within approximately 10% above or below the market median dollar value are considered by Pay Governance and the ITT Compensation Committee to be within the market median range. The ITT Compensation Committee used the CDB information, along with other qualitative information, described below, in making its determination of target and actual compensation provided to each of ITT’s named executive officers. The ITT Compensation Committee considered deviations from the market median range depending on a position’s strategic value, ITT’s objectives and strategies, and individual experience and performance in the position. The ITT Compensation Committee could, but was not required to, consider prior year’s compensation, including short-term or long-term incentive payouts, restricted stock vesting or option exercises in compensation decisions for the named executive officers.

Following the Distribution.    The Exelis Compensation Committee considered the assessments and determinations made by the ITT Compensation Committee and used a similar approach in assessing compensation for the Exelis senior management positions, including each of its NEO positions. The Exelis Compensation Committee will use the Exelis Compensation Peer Group to make its compensation decisions going forward.

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Individual Executive Positions – Percentage of Median

Historically.    The following chart sets out 2011 total target NEO compensation for annual base salary, annual incentive, long-term incentive and total compensation relative to the market median dollar value prior to the Distribution. With respect to Mr. Milligan, the 2011 long-term award reflects his relatively short tenure in the position. Mr. Milligan was promoted to Chief Financial Officer of the Defense business segment in August 2010. Messrs. Bernhardt, Young and Wilson were each promoted as part of ITT’s strategic realignment of its Defense business in January 2010. For Messrs. Bernhardt, Young and Wilson, their competitive compensation position reflects the relatively short tenure of each following the strategic realignment in 2010.

Following the Distribution.    Two salary actions were approved immediately following the Distribution with respect to Messrs. Melcher and Milligan. Mr. Melcher’s salary was increased to $930,000 and Mr. Milligan’s was increased to $470,000. Merit salary reviews for Exelis employees were delayed due to business conditions, as discussed on page 55. In March 2012, as the chart on page 54 sets out, the Exelis Compensation Committee used the Exelis Compensation Peer Group comparison comprised of the Aerospace/Defense companies listed on page 51 to review and approve compensation decisions for the NEOs. The Exelis Compensation Peer Group comparison information was used to determine market median dollar values for each compensation element described below. For Messrs. Melcher and Milligan, the compensation components and overall compensation reflect the relatively short tenure of each in their current position. With respect to Messrs. Bernhardt, Young and Wilson, the compensation components and overall compensation reflects their general management and industry experience in their roles as Division presidents. With respect to each of these elements, compensation levels within approximately 10% above or below the market median dollar value were considered by the Compensation Consultant and the Exelis Compensation Committee to be within the market median range. The Exelis Compensation Committee used the Exelis Compensation Peer Group information, along with other qualitative information described below, in making its determination of anticipated target and actual compensation to be provided to each of the Exelis NEOs. For Messrs. Melcher and Milligan, the Exelis Compensation Committee determined to set their compensation levels below the median range based on the relatively short tenure of each in their positions at Exelis. For Messrs. Bernhardt, Young and Wilson, the Exelis Compensation Committee determined to set their compensation levels slightly above the market median range based on their individual experience and the importance of their positions to the success of Exelis.

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