24 April 2001 - Ref: 057/2001

BAE SYSTEMS North America has reached agreement with The Carlyle Group, Washington, DC, to spin out its Imaging Sensors business located at Milpitas, California. Imaging Sensors was previously part of BAE SYSTEMS Reconnaissance and Surveillance Systems of Syosset, New York. In the transaction, BAE SYSTEMS has provided the assets of Imaging Sensors to form a new company, Fairchild Imaging, Inc. Closing of the agreement occurred April 6, 2001.

The core competencies of the new company, Fairchild Imaging, are in charged coupled device (CCD) development and fabrication and electronic imaging systems. This company pioneered the development of CCD imaging technologies and has continued to innovate in a number of commercial product areas serving medical, dental and industrial surveillance markets. It currently employs 123 people.

“Fairchild Imaging is an excellent business. This transaction is part of our continuing strategic alignment to our aerospace core competencies, and provides Fairchild Imaging with great opportunity for future investment growth and success in its new commercial markets as well,” said Mark Ronald, President and CEO, BAE SYSTEMS North America.

Under the terms of the transaction, BAE SYSTEMS North America retains an equity interest in Fairchild Imaging. The new company will continue to provide CCD products to the Reconnaissance and Surveillance Systems business within BAE SYSTEMS North America. Financial terms were not disclosed.

For further information please contact:

Randy Morger,
BAE SYSTEMS Information and Electronic Systems Integration Sector,
Tel: +1 603-885-2817
Fax: +1 603-885-2813
prandal.e.morger@baesystems.com

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BAE SYSTEMS is the truly global systems, defence and aerospace company. BAE SYSTEMS employs more that 120,000 people in eight home markets around the world and has annual sales of some £12 billion. The company offers an unrivalled global capability in air, sea, land and space with a world-class prime contracting ability supported by a range of key skills. BAE SYSTEMS designs and manufacturers civil and military aircraft, surface ships, submarines, space systems, radar, avionics, communications, electronics, guided weapon systems and a range of other defence products.

BAE SYSTEMS North America employs 22,000 people in the design, development, integration, manufacture and support of a wide range of advanced aerospace products and intelligent electronic systems for government and commercial customers.

The Carlyle Group is one of the world's largest private equity firms, managing more than $13 billion of equity capital in buyout, venture, real estate, high yield, and energy funds, operating in the United States, Europe, Asia, and Japan. Since its inception in 1987, Carlyle has invested $5.8 billion of equity capital, in more than 200 corporate and real estate transactions. The equity capital invested by Carlyle has been provided by more than 400 institutional and private investors from more than 50 countries. Headquartered in Washington, D.C., Carlyle has more than 225 investment professionals working in 22 offices in the United States and abroad.

About Fairchild Imaging
Fairchild Imaging is a manufacturer and developer of electronic imaging components and systems. Located in Milpitas, CA, Fairchild Imaging is a privately held corporation whose major investors include The Carlyle Group, BAE Systems, and management. Information about Fairchild Imaging is available on the worldwide Web at www.fairchildimaging.com.