BAE SYSTEMS Accepts Challenge - Charitable Giving Exceeds $5 Million.

Business Editors

ROCKVILLE, Md.--(BUSINESS WIRE)--Aug. 1, 2003

BAE SYSTEMS North America has completed both employee and company-sponsored charitable giving in its "Charity Challenge" Program for the 2002-2003 cycle ending this month, donating more than $5 million to non-profit and service agencies across the US. Major recipients included the United Way, the Make A Wish Foundation and the USO.

BAE SYSTEMS North America employees successfully raised more than $3.4 million - about 68%, of the total Charity Challenge funds through individual fundraising projects - a unique aspect of BAE SYSTEMS' Charity Challenge program, which encourages employee community involvement and supports employee developed, managed and executed programs.

Mark Ronald, BAE SYSTEMS North America President and CEO said, "What makes this program unique is the source of the funding. More than half of the total comes from employees' own fundraising efforts. The company isn't just handing over a check - our workforce gave hours of sweat and dedication. They give generously from the heart, both financially and with their time and talents."

Each year employees select one primary organization with which to direct their charitable-giving efforts. BAE SYSTEMS employees "challenge" themselves to volunteer and raise funds for the organization. BAE SYSTEMS matches the amount raised for that charity with 50 cents for every dollar raised, and contributes $100 for every eight hours employees volunteer for the designated charity. In 2002, employees accepted this challenge and surpassed all previous year's efforts.

The 2001-2002 primary organization chosen to receive "Charity Challenge" funds was the American Hospice Foundation.

Additional organizations that benefited from BAE SYSTEMS' Charity Challenge and corporate giving programs include the March of Dimes, the Juvenile Diabetes Research Foundation, Special Olympics, CharityWorks, Toys for Tots, and a wide range of local and regional programs.

About BAE SYSTEMS:

BAE SYSTEMS is an international company engaged in the development, delivery and support of advanced defense and aerospace systems in the air, on land, at sea and in space. The company designs, manufactures and supports military aircraft, surface ships, submarines, radar, avionics, communications, electronics and guided weapon systems. It is a pioneer in technology with a heritage stretching back hundreds of years. It is at the forefront of innovation, working to develop the next generation of intelligent defense systems.

BAE SYSTEMS has major operations across five continents and customers in some 130 countries. The company has 100,000 people and generates annual sales of approximately $18 billion through its wholly-owned and joint venture operations.

BAE SYSTEMS, innovating for a safer world.

BAE SYSTEMS North America is a high-technology U.S. company employing more than 25,000 people who live and work in some 30 states, the District of Columbia, and the United Kingdom. The company is dedicated to solving its customers' needs with highly innovative and leading edge solutions across the defense electronics, systems, information technology, and services arenas.