AWE PLC EXECUTIVE REORGANISATION

24 August 2001

AWE Management Ltd, which holds the contract to manage and operate the Atomic Weapons Establishment, today announced a restructuring of the executive board of the operating company, AWE plc, in readiness for the major investment programmes towards which the Company is working. Malcolm Hutchinson, of Serco, becomes Executive Chairman of AWE plc in addition to his role as Chairman of the AWE Management Ltd Board. He will be responsible for developing the Company’s long-term strategic vision.

Two parallel appointments of Vice Chairman and Managing Director replace the existing Chief Executive post.

Dr John Rae, the current Chief Executive, is appointed Vice Chairman, with responsibility for planning and monitoring the UK national nuclear weapon programme strategy. He will also continue to be the focus for the Company’s high-level inter-action with external stakeholders and will be the Deputy to the Executive Chairman.

The role of Managing Director will be filled by Bill Haight, currently President of Energy Programs at Lockheed Martin Technology Services and a director of AWE Management Ltd. He will ensure that the programmes that underpin the major investment schemes are effectively managed and that financial and performance targets are met and he will be responsible for the day-to-day operations of AWE.

On appointment as Managing Director of AWE plc, Mr Haight will relinquish his seat on the AWE Management Ltd Board. His successor will be John Freeh, of Lockheed Martin, formerly President of the Knolls Atomic Power Laboratory in Schenectady, New York.

Ian Berry, formerly General Manager (Projects) at British Nuclear Fuels (BNFL) joins AWE plc as Director Engineering, responsible for major investments, including the delivery of new buildings and facilities and environmental improvements.

Giving details of the changes, Malcolm Hutchinson said today: "It is just over a year since the new AWE management contract was awarded to AWE Management Ltd. During that time AWE plc, as the operating company, has made considerable progress.

"It has delivered an excellent safety performance. It has developed stakeholder relationships that support the strategic mission. It has achieved demanding output requirements, exceeding performance targets in every respect and is developing a new science vision for AWE.

"However, the complex nature of the long-term programmes that AWE plc must now address will mean a changing management workload. We are therefore strengthening the management team in anticipation of the challenges that lay ahead – particularly the realisation of the major investment schemes associated with the Aldermaston and Burghfield sites.

"The changes also anticipate the moves of three AWE plc directors – two of whom are expected to leave to take up appointments outside of AWE and the third who is retiring early next year.

"The changes to the Executive team have been thoroughly scrutinised by the Ministry of Defence, the Environment Agency and the Nuclear Installations Inspectorate, which has approved the changes under Condition 36 of AWE’s nuclear site licences. I can assure everyone that health and safety and a concern for the environment remain at the top of our agenda."

NOTE TO EDITORS:

A new contract to manage and operate the Atomic Weapons Establishment was awarded by the Ministry of Defence to AWE Management Ltd on 1 April 2000 for a period of ten years, with an option to extend to 25 years. The option to extend the contract is currently under negotiation.

AWE Management Ltd was formed as an independent company specifically to bid for the AWE management contract. Its equal shareholders are British Nuclear Fuels, Serco and Lockheed Martin.

Having been awarded the contract, AWE Management Ltd became the owners of 100 per cent of the ordinary shares of AWE plc – the company that employs the AWE workforce and now maintains the nuclear site operating licences and discharge authorisations.

As shareholders in AWE Management Ltd, the three partner companies are not involved in the day-to-day management of AWE. The task of delivering the contract has been delegated to AWE plc.

Although ‘contractorised’ AWE has not been ‘privatised.’ The Ministry of Defence, apart from being the principal customer, still owns the AWE sites and the Secretary of State for Defence holds a ‘golden share’ in AWE plc.

For further information, please contact:

Graeme Hammond AWE Tel: +44 (0) 118 981 4111

Email: graeme.hammond@awe.co.uk 

**

Mark Douglas Lockheed Martin Tel: +44 (0)20 7798 2850

Email: mark.douglas@lmco.com