BAE : View Notice of Meeting

Notice of Annual General Meeting 2021

This Notice of Meeting sets out the resolutions that shareholders are being asked to consider and vote on. These resolutions are an important part of the governance of the Company and all shareholders are urged to vote by proxy as they will be unable to attend the meeting as a result of COVID-19 regulations.

COVID-19 - Impact on 2021 AGM

The Company's preference had been to welcome shareholders in person to its 2021 AGM, particularly given the constraints faced in holding the 2020 meeting due to the COVID-19 pandemic. However, at the time that this document goes to print, England is still in national lockdown and, under the UK government's current COVID-19 regulations (National Lockdown in England), individuals must not leave their home except where permitted by law, which precludes shareholders' attendance at AGMs.

The UK government's 'COVID-19 Response

• Spring 2021' guidance sets out a roadmap out of lockdown which would continue to preclude shareholders' attendance at AGMs by 6 May 2021. Consequently, the meeting will be held with just a small number of directors present to meet the minimum attendance required to form a quorum and comply with COVID-19 regulations.

Shareholders will not be permitted to attend the AGM in person and should not attempt to do so.

However, steps have been taken to ensure that shareholders can:

• vote by proxy in advance of the meeting as set out below;
• ask questions on the AGM resolutions in advance of the meeting as set out below; and
• listen remotely in real-time to the proceedings of the AGM, led by the Chairman and including an overview of 2020 performance by the Chief Executive, as set out on page 5 of this Notice.

The Company's Articles of Association do not, at present, contain provisions specifically providing for shareholder meetings to be held remotely. The Company is, however, seeking shareholder approval for a change to be made to the Articles, which, if passed, will allow future AGMs to be held with attendees present both physically and via electronic means.

Voting by proxy

You can vote on the resolutions by appointing the Chairman of the Meeting* as your proxy, instructing him to vote in accordance with your instructions. You can do this as follows:

• Online - if you have accessed this notice electronically, you simply need to click on the electronic voting icon on the Company's AGM website page at www.baesystems.com/reporting.
• By post - if you received the 2020 Annual Report you will also have received a proxy card. Instructions on voting can be found on the proxy card.

Proxy votes must be received by 10.30am on 4 May 2021. The results of the voting will be posted on the Company's website after the meeting.

Asking a question

If you have any questions on the AGM resolutions, the Company would like to hear from you ahead of the meeting. The Company will publish responses to the matters raised by shareholders on the business of the meeting on its website. This will be published no later than 30 April 2021, which will provide shareholders with an opportunity to read the responses before submitting their proxy vote. If you wish to ask a question on the resolutions, please submit your question via the AGM website at www.baesystems.com/reporting no later than 27 April 2021.

Listening to the AGM proceedings

Please see page 5 of this Notice which explains how you can do this.

Please note that this is an audiocast only and if you wish to vote on the resolutions you should vote by proxy as set out above.

Important

This document is important and requires your immediate attention. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000 immediately.

If you have sold or otherwise transferred all of your shares, please send this document, together with the accompanying Form of Proxy, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Recommendation

Your Directors consider that each of the proposals detailed in the Notice of Meeting will be of benefit to and in the best interests of the Company and the shareholders as a whole. The Directors intend to vote in favour of all Resolutions in respect of their own beneficial holdings of ordinary shares in the Company and unanimously recommend other shareholders to do likewise.

*NOTE: You are strongly advised to appoint the Chairman of the meeting as your proxy as, under the particular arrangements for this meeting, proxies (other than the Chairman of the meeting) will not be permitted to attend the AGM in person. Similarly, corporate representatives other than the Chairman of the meeting will not be permitted to attend the AGM in person.

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To BAE Systems plc Ordinary Shareholders

NOTICE IS HEREBY GIVEN that the Annual General Meeting of BAE Systems plc will be held at Hall 1, Farnborough International Exhibition and Conference Centre, Farnborough, Hampshire, GU14 6XE on Thursday 6 May 2021 at 10.30 am for the purpose of transacting the following business:

To consider, and if thought fit, to pass the following Resolutions

1-19, which will be proposed as ORDINARY RESOLUTIONS:

RESOLUTION 1 - Receipt of the Report and Accounts THAT the Annual Report and Accounts for the year ended 31 December 2020 now laid before this meeting be and are hereby received.

RESOLUTION 2 - Approval of the Directors' Remuneration Report

THAT the Annual Statement by the Chairman of the Remuneration Committee and the Annual Report on Remuneration (as set out on pages 124 to 156 of the Annual Report and Accounts for the financial year ended 31 December 2020) be and are hereby approved.

RESOLUTION 3 - Authorisation of the payment of the final dividend

THAT the final dividend for the year ended 31 December 2020 of

14.3 pence per ordinary share be and is hereby declared payable on 1 June 2021 to Ordinary Shareholders whose names appeared on the Register of Members at the close of business on 23 April 2021.

RESOLUTION 4 - Re-election of director

THAT Thomas Arseneault be and is hereby re-elected a Director of the Company.

RESOLUTION 5 - Re-election of director

THAT Sir Roger Carr be and is hereby re-elected a Director of the Company.

RESOLUTION 6 - Re-election of director

THAT Dame Elizabeth Corley be and is hereby re-elected a Director of the Company.

RESOLUTION 7 - Re-election of director

THAT Bradley Greve be and is hereby re-elected a Director of the Company.

RESOLUTION 8 - Re-election of director

THAT Jane Griffiths be and is hereby re-elected a Director of the Company.

RESOLUTION 9 - Re-election of director

THAT Christopher Grigg be and is hereby re-elected a Director of the Company.

RESOLUTION 10 - Re-election of director

THAT Stephen Pearce be and is hereby re-elected a Director of the Company.

RESOLUTION 11 - Re-election of director

THAT Nicole Piasecki be and is hereby re-elected a Director of the Company.

RESOLUTION 12 - Re-election of director

THAT Ian Tyler be and is hereby re-elected a Director of the Company.

RESOLUTION 13 - Re-election of director

THAT Charles Woodburn be and is hereby re-elected a Director of the Company.

RESOLUTION 14 - Election of director

THAT Nicholas Anderson be and is hereby elected a Director of the Company.

RESOLUTION 15 - Election of director

THAT Dame Carolyn Fairbairn be and is hereby elected a Director of the Company.

RESOLUTION 16 - Re-appointment of the Auditors

THAT Deloitte LLP be and are hereby re-appointed Auditors of the Company to hold office until the next General Meeting at which accounts are laid before the Company.

RESOLUTION 17 - Authority to agree Auditors' remuneration THAT the Audit Committee of the Board of Directors be and is hereby authorised to agree the remuneration of the Auditors.

RESOLUTION 18 - Political Donations

THAT

1. the Company and those companies which are subsidiaries of the Company at any time during the period for which this resolution has effect be authorised for the purposes of Part 14 of the Companies Act 2006 (the "2006 Act") during the period from the date of the passing of this resolution to the earlier of the conclusion of the Company's Annual General Meeting in 2022 or close of business on 30 June 2022:
2. 1. to make political donations to political parties, and/or independent election candidates;
   2. to make political donations to political organisations other than political parties; and
   3. to incur political expenditure,

up to an aggregate amount of £100,000, and the amount authorised under each of paragraphs (a) to (c) shall also be limited to such amount; and

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1. all existing authorisations and approvals relating to political donations or expenditure under Part 14 of the 2006 Act are hereby revoked without prejudice to any donation made or expenditure incurred prior to the date hereof pursuant to such authorisation or approval; and
2. words and expressions defined for the purpose of the 2006 Act shall have same meaning in this resolution.

RESOLUTION 19 - Authority to allot new shares

THAT the authority conferred on the Directors by Article 8(B)(i) of the Company's Articles of Association be renewed for the period ending at the conclusion of the Company's Annual General Meeting in 2022 or at the close of business on 30 June 2022, whichever is the earlier, and for such period the Section 551 Amount shall be £26,832,194.

The authorities in this Resolution apply in substitution for all previous authorities pursuant to Section 551 of the 2006 Act.

To consider, and if thought fit, to pass the following Resolutions

20 to 23 which will be proposed as SPECIAL RESOLUTIONS:

RESOLUTION 20 - Disapplication of pre-emption rights

THAT, subject to the passing of Resolution 19 above, the power conferred on the Directors by Article 8(B)(ii) of the Company's Articles of Association be renewed for the period referred to in such Resolution and for such period the Section 561 Amount shall be £4,025,231.

Such authority shall be in substitution for all previous powers pursuant to Section 561 of the 2006 Act.

RESOLUTION 21 - Authority to purchase own shares THAT the Company be and is hereby unconditionally and generally authorised for the purposes of Section 701 of the 2006 Act to make market purchases (as defined in Section 693 of the 2006 Act) of its ordinary shares of 2.5p each in the capital of the Company provided that:

1. the maximum number of shares that may be purchased is 322,018,538;
2. the minimum price which may be paid for each share is 2.5p;
3. the maximum price which may be paid for each share is the higher of (i) 105 per cent of the average of the middle market quotations of the Company's ordinary shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which such share is contracted to be purchased, and (ii) the higher of the price of the last independent trade and the highest current independent bid on the London Stock Exchange;
4. this authority shall expire at the conclusion of the Annual General Meeting of the Company held in 2022 or, if earlier, at the close of business on 30 June 2022 (except in relation to the purchase of shares the contract for which was concluded before the expiry of such authority and which may be executed wholly or partly after such expiry) unless such authority is renewed prior to such time.

RESOLUTION 22 - Notice of general meetings

THAT a general meeting other than an annual general meeting may be called on not less than 14 clear days' notice.

RESOLUTION 23 - Amendments to the Articles of Association THAT the Articles of Association of the Company be and are hereby amended so that they shall be in the form of the amended Articles of Association produced to the meeting and initialled by the Chairman of the Company for the purpose of identification.

By Order of the Board

David Parkes

Company Secretary

31 March 2021

6 Carlton Gardens

London SW1Y 5AD

Notes

1. Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A proxy need not be a member of the Company.
   However, as more fully described on the front page of this notice of meeting, under the current arrangements proxies (other than the Chairman of the meeting) will not be permitted to attend the AGM in person. As a result, if a member wishes to appoint a proxy, they are strongly advised to appoint the Chairman of the AGM as their proxy. Similarly, corporate representatives other than the Chairman of the AGM will not be permitted to attend the AGM in person.
2. A proxy form which may be used to make such appointment and give proxy instructions has been sent to all shareholders (except those who have elected to receive notice via email who should refer to paragraph 7 below, or those shareholders who are deemed to have consented to receive communications via the Company's website and who will have received a shareholder voting instruction card).
   Shareholders who have received a shareholder voting instruction card or a proxy card may appoint a proxy or proxies electronically via the Company's website at www.baesystems.com/reporting using the Voting ID, Task ID, and Shareholder Reference Number on the proxy card or shareholder voting instruction card. Electronic proxy appointments must be received no later than 10.30am UK time on 4 May 2021. CREST members who wish to appoint proxies through the CREST electronic appointment service should refer to paragraphs 12-15 below.
3. A shareholder may appoint more than one proxy, who may be the same person, in relation to the Annual General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. If in such case a shareholder wishes to appoint more than one proxy, the shareholder should photocopy the proxy form and indicate in the relevant box the number of shares in relation to which the shareholder authorises them to act as the shareholder's proxy. The shareholder should indicate by marking the relevant box on the proxy card if more than one proxy is being appointed.
4. In the case of joint holders the signature of any one of them will suffice. The vote of the senior party tendering the vote (whether in person or by proxy) shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the Register of Members in respect of the joint holding.
5. To be valid any proxy form or other instrument appointing a proxy must be completed, signed and returned, together with the power of attorney or other authority (if any) under which it is signed, or a duly certified copy thereof, so as to be received by post or (during normal

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business hours only) by hand at the office of the Company's Registrar, Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA not later than 10.30am UK time on 4 May 2021, being not less than 48 hours before the time for which the meeting is convened.

1. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described in paragraph 13 below) will not prevent a shareholder attending the Annual General Meeting and voting in person if he/she wishes to do so.
2. Shareholders who have elected to receive notice via email, and who have therefore not received a proxy card, may appoint a proxy or proxies electronically via the Company's website at www. baesystems.com/reporting using their usual Shareview portfolio identification particulars. Electronic proxy appointments must be received no later than 10.30am UK time on 4 May 2021.
3. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
4. The statement of rights of shareholders in relation to the appointment of proxies in paragraphs 1 to 7 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.
5. Entitlement to attend and vote at the meeting, and the number of votes which may be cast at the meeting, will be determined by reference to the Company's Register of Members at 6.30pm on
   4 May 2021 or, if the meeting is adjourned, 6.30pm two days before the time fixed for the adjourned meeting (as the case may be). Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
6. As at 15 March 2021 (being the latest practicable business day prior to the publication of this Notice) the Company's issued share capital consisted of 3,467,440,044 ordinary shares and one special share.
   Holders of ordinary shares are entitled to attend and vote at general meetings of the Company. The voting rights of treasury shares (of which there were 247,254,660 as of 15 March 2021) are suspended. The holder of the special share is entitled to attend general meetings of the Company, but is not entitled to vote. Accordingly the total number of voting rights as of 15 March 2021 is 3,220,185,384. The consent of the holder of the special share is required in certain limited circumstances, as set out in the Company's Articles of Association. At the Company's 2021 AGM, all resolutions will be voted on by way of a poll. On a vote by poll, every ordinary shareholder who is present in person or by proxy has one vote for every ordinary share of which he/she is the holder.
7. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual (available via www.euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting service provider, who will be able to take the appropriate action on their behalf.
8. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy

must, in order to be valid, be transmitted so as to be received by the issuer's agent, Equiniti (ID RA19), no later than 10.30am on 4 May 2021, being not less than 48 hours before the time for which the meeting is convened. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

1. CREST members and, where applicable, their CREST sponsors, or voting service providers, should note that Euroclear UK and Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his/her CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members (and, where applicable, their CREST sponsors or voting system providers) are referred, in particular, to those sections of the CREST manual concerning practical limitations of the CREST systems and timings.
2. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
3. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.
4. Under section 527 of the Companies Act 2006, members meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to (i) the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the Annual General Meeting; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with section 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Annual General Meeting includes any statement that the Company has been required under section 527 of the Companies Act 2006 to publish on a website.
5. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation of the meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
6. A copy of this notice, and other information required by s311A of the Companies Act 2006, can be found at www.baesystems.com/ reporting.
7. Shareholders may not use any electronic address provided in this Notice or any related documents (including the proxy form) to communicate with the Company for any purposes other than those expressly stated.

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HOW TO LISTEN TO THE AGM PROCEEDINGS

For the 2021 AGM, BAE Systems plc will be enabling shareholders to listen to the meeting by audiocast, should they wish to do so. This can be done by accessing the following website, https://web.lumiagm.com

This website is compatible with most well-known internet browsers such as Internet Explorer (not compatible with versions 10 and below), Edge, Chrome, Firefox and Safari on a PC, laptop or internet-enabled device such as a tablet or smartphone.

Logging In

On accessing this website, you will be asked to enter a Meeting ID which is 165-301-118.

You will then be prompted to enter your unique Shareholder Reference Number (SRN) and PIN which is the first two and last two digits of your SRN. This can be

found printed on your Proxy Card or Shareholder Voting Instruction Card (if you received a hard copy AGM mailing) or on your email notification if you accessed this Notice electronically as a result of email notification by the Company. Access to the meeting via the website will be available from 09.30am on 6 May 2021. The meeting will start at 10.30am.

Audiocast

Once logged in, and at the commencement of the meeting, you will be able to listen to the proceedings of the meeting on your device. An active internet connection is required in order to allow you to listen to the audiocast. It is your responsibility to ensure you remain connected for the duration of the meeting.

Please see below for the user guide to listening to the BAE Systems plc 2021 AGM remotely.

User Guide to Listening to the BAE Systems plc

2021 Annual General Meeting Remotely

Meeting ID: 165-301-118

To login you must have your SRN and PIN (see above)

12

Open the Lumi AGM website and you will be prompted to enter the Meeting ID.

After entering the Meeting ID, you will be prompted to enter your unique SRN and PIN.

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When successfully authenticated, you will be taken to the Home Screen.

To listen to the meeting, expand the "Broadcast Panel", located at the bottom of your device. If viewing through a browser, it will appear automatically.

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