Public Exchange Offer

British Aerospace PLC 10 April 2000 NOTICE to the holders of those of the £685,960,000 3.75 PER CENT. SENIOR UNSECURED EXCHANGEABLE BONDS DUE 2006 of BRITISH AEROSPACE PUBLIC LIMITED COMPANY presently outstanding (the 'Exchangeable Bonds') of an ADJUSTMENT TO THE EXCHANGE PROPERTY British Aerospace Public Limited Company ('BAE SYSTEMS') announces that it has accepted the public exchange offer made by Vodafone AirTouch Plc ('Vodafone') for shares in Mannesmann AG ('Mannesmann') which closed on 27th March, 2000 in respect of 4,896,103 Mannesmann shares. On 10th April, 2000 BAE SYSTEMS (Investments) Limited ('BAe') entered into an agreement with Vodafone pursuant to which BAe has an option to sell to Vodafone some or all of its indirect holding of shares in Mannesmann. The consideration for the sale of Mannesmann shares pursuant to the agreement with Vodafone is the same as the basic terms of Vodafone's offer for Mannesmann of 58.9646 Vodafone shares for each Mannesmann share. As at the date of this notice, Exchange Rights have been exercised in respect of £9,280,000 in principal amount of Exchangeable Bonds. Of these Exchangeable Bonds, £20,000 in principal amount have been exchanged under the terms of the Exchangeable Bonds for a pro rata share of the Exchange Property. In respect of £9,260,000 in principal amount of Exchangeable Bonds, BAE SYSTEMS has exercised its right under Condition 6(b) to purchase such Exchangeable Bonds at a purchase price equal to the Cash Value of the pro rata share of the Exchange Property. Accordingly, the aggregate principal amount of Exchangeable Bonds presently outstanding is £676,680,000. BAE SYSTEMS determined on 10th April, 2000, in accordance with the provisions of Condition 7(h) of the Exchangeable Bonds, that an adjustment should be made to the Exchange Rights under the terms of the Exchangeable Bonds to reflect the proposed sale of Mannesmann shares to Vodafone pursuant to the arrangements described above. In accordance with Condition 7(h) of the Exchangeable Bonds, an independent investment bank of international repute selected by BAE SYSTEMS and approved in writing by The Law Debenture Trust Corporation p.l.c., as trustee for the holders of the Exchangeable Bonds, has determined in good faith, acting as an expert, that the adjustment referred to below to the Exchange Rights is fair and reasonable. With immediate effect the Exchange Property has been adjusted so that it comprises 477,195,908 Vodafone shares. The Exchange Property per Exchangeable Bond is accordingly 7,052,017 Vodafone shares. Issued by British Aerospace Public Limited Company

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BAE Systems (BA.)
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