FREQUENCY ELECTRONICS, INC.
                         55 Charles Lindbergh Boulevard
                          Mitchel Field, New York 11553

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

                                 October 5, 1998

To the Stockholders:

      NOTICE  IS  HEREBY  GIVEN  that the  Annual  Meeting  of  Stockholders  of
Frequency  Electronics,  Inc.  will be held at the  offices of the  Company,  55
Charles Lindbergh Boulevard,  Mitchel Field, New York, on the 5th day of October
1998, at 10:00 A.M., Eastern Daylight Savings Time, for the following purposes:

      1. To elect six (6)  directors  to serve until the next Annual  Meeting of
Stockholders and until their  respective  successors shall have been elected and
shall have qualified;

      2.   To   consider   and   act   upon   ratifying   the   appointment   of
PricewaterhouseCoopers   LLP  as  independent   auditors  for  the  fiscal  year
commencing May 1, 1998.

      3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.

      The transfer books will not be closed.  Only  stockholders of record as of
the close of business on August 20, 1998 are entitled to notice of,  and to vote
at, the meeting.

                       By order of the Board of Directors



                                                     HARRY NEWMAN
                                                     Secretary


Mitchel Field, New York
August 26, 1998

       If you do not expect to be present at the  meeting,  please fill in, date
and sign the enclosed  Proxy and return same promptly in the  enclosed,  stamped
envelope.






                           FREQUENCY ELECTRONICS, INC.
                         55 Charles Lindbergh Boulevard
                          Mitchel Field, New York 11553

                                 PROXY STATEMENT

                         ANNUAL MEETING OF STOCKHOLDERS

                                 OCTOBER 5, 1998

       The  accompanying  Proxy is  solicited  by and on  behalf of the board of
directors of Frequency  Electronics,  Inc., a Delaware corporation  (hereinafter
called the "Company"),  for use only at the Annual Meeting of Stockholders to be
held at the office of the  Company,  55  Charles  Lindbergh  Boulevard,  Mitchel
Field,  New York 11553,  on the 5th day of October 1998, at 10:00 A.M.,  Eastern
Daylight Savings Time, or any adjournment or adjournments  thereof.  The Company
will mail this  Proxy  Statement  and the form of Proxy on or about  August  26,
1998. Only stockholders of record as of the close of business on August 20, 1998
are entitled to notice of, and to vote at, the meeting.

       The Board may use the services of the Company's  directors,  officers and
other regular  employees to solicit  proxies  personally or by telephone and may
request  brokers,  fiduciaries,  custodians and nominees to send proxies,  proxy
statements and other  material to their  principals and reimburse them for their
out-of-pocket  expenses in so doing. The cost of solicitation of proxies,  which
it is estimated  will not exceed  $75,000,  will be borne by the  Company.  Each
proxy  executed  and  returned  by a  Stockholder  may be  revoked  at any  time
thereafter  by filing a later  dated  proxy or by  appearing  at the meeting and
voting except as to any matter or matters upon which,  prior to such revocation,
a vote shall have been cast pursuant to the  authority  conferred by such proxy.
Dissenters are not entitled by law to appraisal rights.

VOTING SECURITIES

       On August 20,  1998,  the Company  had  outstanding  7,729,221  shares of
common stock,  $1.00 par value ("Common Stock")  (excluding  1,280,038  treasury
shares),  each of which  entitled the holder to one vote. No shares of preferred
stock were  outstanding  as of such date. A quorum of  Stockholders,  present in
person or by proxy, is constituted by a majority of the outstanding shares.

       It is expected  that the  following  business  will be  considered at the
meeting and action taken thereon.

                                 PROPOSAL NO. 1

                              ELECTION OF DIRECTORS

       It is proposed to elect a Board of six (6) directors  ("Director(s)")  to
hold  office  until the next  annual  meeting of  Stockholders  and until  their
respective  successors  are  elected  and  qualified.  Cumulative  voting is not
permitted.  It is intended that the accompanying form of Proxy will be voted for
the  re-election of all six of the present  members of the Board,  each of whose
principal  occupations are set forth in the following  table, if no direction to
the contrary is given.  In the event that any such nominee is unable or declines
to  serve,  the Proxy may be voted for the  election  of  another  person in his
place.  The Board knows of no reason to  anticipate  that this will  occur.  The
nominees are as follows:






Nominees for Election as Directors

                                                                      Year First
                                                                       Elected
Name                     Principal Occupation             Age          Director


Joseph P. Franklin       Chief Executive Officer,          64            1990
(Major General,          Chairman of the Board
U.S.A. - Ret)            of Directors

Martin B. Bloch          President, Chief                  62            1961
                         Scientist and a
                         Director

Joel Girsky              President, Jaco                   59            1986
                         Electronics, Inc. and a
                         Director

John C. Ho (1)           Director                          65            1968


E. Donald Shapiro        Joseph Solomon
                         Distinguished Professor
                         of Law, New York School
                         of Law and a Director             66            1998

Marvin Meirs             Vice President, Engineering
                         and a Director                    60            1998


       All directors hold office for a one-year period or until their successors
are elected and qualified.

       (1) John Ho retired from his  position as Vice  President of Research and
Development  effective  May 1, 1997. He has been retained as a consultant to the
Company.

BUSINESS EXPERIENCE OF DIRECTORS

       MARTIN B.  BLOCH,  age 62, has been a Director  of the Company and of its
predecessor  since 1961. He is currently  President  and Chief  Scientist of the
Company as well as President of FEI  Communications,  Inc., a subsidiary  of the
Company.  Registrant,  which is engaged in the  manufacture and sale of time and
frequency  control  products  for  commercial  and  non-U.S.  defense and space.
Previously,  he served as chief electronics engineer of the Electronics Division
of Bulova Watch Company.

       JOSEPH P. FRANKLIN, age 64, has served as a Director of the Company since
March 1990. In December 1993, he was elected  Chairman of the Board of Directors
and Chief Executive Officer. He has been the chief executive officer of Franklin
S.A.,  since August  1987,  a Spanish  business  consulting  company  located in
Madrid,  Spain,  specializing in joint  ventures,  and was a director of several
prominent Spanish companies.  General Franklin was a Major General in the United
States Army until he retired in July 1987.

       JOEL  GIRSKY,  age 59,  has  served as a Director  of the  Company  since
October  1986. He is the  President  and a director of Jaco  Electronics,  Inc.,
which is in the business of distributing  electronics  components and has served
in such a capacity  for over seven years.  He has been a director  since 1983 of
Nastech  Pharmaceuticals  Company which  manufactures  and  distributes  certain
drugs.


       JOHN C. HO, age 65, was employed by the Company and its  predecessor from
1961 until his retirement effective May 1, 1997.Mr.Ho served as a Vice President
from 1963 to 1997,  and as a Director  since 1968. Prior to joining the Company,
Mr. Ho  held  various engineering  positions  with  International  Telephone and
Telegraph  Company  and  Bulova  Watch  Company.  Mr.  Ho continues to serve the
Company as a consultant.

       E. DONALD SHAPIRO, age 66, is the Joseph Solomon Distinguished  Professor
of  Law,   New  York  School  of  Law.  He  is  a  director  of  Loral  Space  &
Communications,  Ltd., Bank Leumi Trust Co., United  Industrial  Corporation and
other  corporations.  Mr.  Shapiro  became a member of the board of directors in
1998.

       MARVIN MEIRS,  age 60, joined  the  Company  in  1966  in  an engineering
capacity.  He has served as Vice President for  Engineering of the Company since
1978.  Mr. Meirs became a member of the board of directors in 1998.

       No  Director  or  executive  officer or any  associate  of a Director  or
executive  officer is an adverse party in litigation  with the Company or any of
its subsidiaries or has a material interest adverse to the Company or any of its
subsidiaries.

Vote Required

       In order for Proposal No. 1 respecting  the election of six (6) directors
to be adopted,  the holders of at least a plurality of the shares represented at
the Annual Meeting must vote for such adoption in person or by proxy.

       THE BOARD OF DIRECTORS DEEMS PROPOSAL NO.1 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.



                                 PROPOSAL NO. 2

                       APPOINTMENT OF INDEPENDENT AUDITORS

       The  Board  has  appointed  the firm of  PricewaterhouseCoopers  LLP,  as
independent  auditors for the fiscal year  commencing May 1, 1998.  Stockholders
are requested to signify their approval or disapproval of the appointment.

       It is anticipated that a representative  of  PricewaterhouseCoopers  LLP,
the principal  auditors of the Company for the current year,  will be present at
the  meeting.  Such  representative  will be  given  the  opportunity  to make a
statement and will be available to respond to appropriate questions.

Vote Required

       An affirmative  vote by the holders of a majority of the Company's shares
present or  represented  by proxy at the  Annual  Meeting  is  required  for the
ratification of PricewaterhouseCoopers LLP as the Company's independent auditors
for the 1998 fiscal year.

       THE BOARD OF DIRECTORS DEEMS PROPOSAL NO.2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.





                                 PROPOSAL NO. 3

                                 OTHER BUSINESS

       As of the date of this Proxy Statement, the only business which the Board
intends to present  and knows  that  others  will  present  at the  meeting  are
hereinabove  set forth.  If any other  matter or matters  are  properly  brought
before the  meeting or any  adjournments  thereof,  it is the  intention  of the
persons  named in the  accompanying  form of  Proxy  to vote  the  Proxy on such
matters in accordance with their judgment.



                            PROPOSALS OF STOCKHOLDERS

       Proposals  of  stockholders  intended to be  presented at the next annual
meeting of  Stockholders  of the  Company  must be  received  by the Company for
inclusion in its Proxy  Statement and form of Proxy  relating to that meeting by
May 1, 1999.



STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

       The  following  table  sets  forth as of  August  20,  1998,  information
concerning  the beneficial  ownership of the Company's  Common Stock by (i) each
person  who is known by the  Company  to own  beneficially  more  than 5% of the
Company's  Common Stock,  (ii) each of the Company's  directors and nominees for
director,  (iii) the Company's  chief  executive  officer and the Company's four
most highly  compensated other executive  officers who were serving as executive
officers at the end of the last  completed  fiscal year,  and (iv) all directors
and officers of the Company as a group:

                                        Amount and Nature of
Name and Address of Beneficial Holder   Beneficial Ownership    Percent of Class

Inverness Counsel, Inc.
545 Madison Ave.
New York, NY  10022                           854,100                11.05%

Frequency Electronics, Inc.,
Employee Stock Ownership Plan (1)
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                       782,556                10.12

Martin B. Bloch (2)(3)(5)
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                       853,340                11.04

Joseph P. Franklin (3)(4)(5)(6)
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                       137,348                 1.78

John C. Ho
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                        15,000                 *






                                        Amount and Nature of
Name and Address of Beneficial Holder   Beneficial Ownership    Percent of Class

E. Donald Shapiro
New York School of Law
New York, NY                                        -0-                *

Joel Girsky
c/o Jaco Electronics, Inc.
145 Oser Avenue
Hauppauge, NY 11788                                 -0-                *

Leonard Martire (3)(5)
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                          4,000                 *

Alfred Vulcan (3)(5)
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                         22,115                 *

Marvin Meirs (3)(5)
55 Charles Lindbergh Blvd
Mitchel Field, NY 11553                         34,642                 *
All executive officers
and directors as a group (11
persons) (3)(5)                              1,234,571               16.36


*designates less than one (1%) percent.


Notes:

(1)  Includes  661,461  shares of stock  held by the  F.E.I.  ESOP Trust for the
Company's  Employee  Stock  Ownership  Plan,  446,831 of which  shares have been
allocated to the individual  accounts of employees of the Company (including the
Named  Officers as defined on page 14) and 214,630 of which  shares have not yet
been allocated;  also includes  121,095 shares held by the Trust under the Stock
Bonus Plan  (converted by amendment to the Employee  Stock  Ownership Plan as of
January 1, 1990).

(2) Includes  150,000 shares issuable on the full exercise of options granted to
Mr. Bloch on March 27, 1991 under the Senior ESOP,  as that term is  hereinafter
defined. All of these options were, by their terms, exercisable upon issuance at
an exercise  price of $3.34 (see the  discussion  of the Senior ESOP included in
the Compensation Committee Report, below).

(3) Includes the number of shares which,  as at August 20, 1998,  were deemed to
be  beneficially  owned by the persons named below,  by way of their  respective
rights to acquire  beneficial  ownership of such shares  within 60 days through,
(i) the  exercise  of  options;  (ii)  the  automatic  termination  of a  trust,
discretionary  account,  or  similar  arrangement;  or (iii) by  reason  of such
person's  having sole or shared  voting  powers over such shares.  The following
table sets forth for each person  named below the total  number of shares  which
may be so  deemed  to be  beneficially  owned  by him  and  the  nature  of such
beneficial ownership.






- -------------------  ------------------- ------------------- -------------------
                          Stock Bonus
      Name                Plan Shares           ESOP Shares        ISOP Shares
                              (a)                  (b)
- -------------------  ------------------- ------------------- -------------------
Martin B. Bloch               22,315               3,896                  -0-
- -------------------  ------------------- ------------------- -------------------
Joseph P. Franklin               -0-               2,348                  -0-
- -------------------  ------------------- ------------------- -------------------
Leonard Martire                  -0-               4,286              36,975
- -------------------  ------------------- ------------------- -------------------
Marvin Meirs                   1,481               4,286               1,875
- ------------------  ------------------- ------------------- -------------------
Alfred Vulcan                  1,532               3,708               1,875
- -------------------  ------------------- ------------------- -------------------
Mark Hechler                   2,706               4,286              49,875
- -------------------  ------------------- ------------------- -------------------
All Directors and
Officers as a Group           28,810              31,379             131,196
(11 persons)
- -------------------  ------------------- ------------------- -------------------

     (a)Includes  all shares  allocated  under the  Company's  Stock  Bonus Plan
        ("Bonus  Plan")  to  the  respective  accounts  of  the  named  persons,
        ownership of which shares is fully vested in each such person.  No Bonus
        Plan shares are  distributable  to the respective  vested owners thereof
        until after their  termination  of  employment  with the Company.  As of
        January  1,  1990 the  Bonus  Plan was  amended  to an  "Employee  Stock
        Ownership Plan" (see the discussion of the Employee Stock Ownership Plan
        contained in the Compensation Committee Report, below; see also footnote
        (b) to the table).

     (b)Includes  all  shares  allocated  under  the  Company's  Employee  Stock
        Ownership Plan ("ESOP") to the respective accounts of the named persons,
        ownership  of which  shares was fully  vested in each such  person as at
        April 30,  1998.  ESOP shares are  generally  not  distributable  to the
        respective  vested  owners  thereof  until  after their  termination  of
        employment with the Company.  However, upon the attainment of age 55 and
        completion of 10 years of service with the Company,  a  participant  may
        elect to  transfer  all or a portion of his vested  shares,  or the cash
        value thereof, to a Directed Investment Account.  Upon the allocation of
        shares to an  employee's  ESOP  account,  such employee has the right to
        direct the ESOP  trustees in the  exercise of the voting  rights of such
        shares  (see  the   discussion  of  the  ESOP  included   below  in  the
        Compensation Committee Report).

(4) Includes  37,500 shares  issuable on the full exercise of options granted to
General  Franklin  on December  6, 1993 under the Senior  ESOP,  as that term is
hereinafter defined.

(5) Includes  shares granted to the officers of the Company  pursuant to a stock
purchase agreement in connection with the Restricted Stock Plan:

                            ---------------------------- -----------------
                                       Name                 Restricted
                                                              Stock
                            ---------------------------- -----------------
                            Martin B. Bloch                   15,000
                            ---------------------------- -----------------
                            Joseph P. Franklin                15,000
                            ---------------------------- -----------------
                            Leonard Martire                    7,500
                            ---------------------------- -----------------
                            Marvin Meirs                         -0-
                            ---------------------------- -----------------
                            Alfred Vulcan                     15,000
                            ---------------------------- -----------------
                            Mark Hechler                      15,000
                            ---------------------------- -----------------
                            All Officers as a Group           82,500
                             (8 persons)
                            ---------------------------- -----------------

 (6) Includes 30,000 shares held by the Franklin Family Trust over which General
Franklin has no direct control.

       There are no beneficial owners known to the Company who have the right to
acquire further beneficial ownership, except as indicated above.





Compliance with Section 16(a) of the Exchange Act

       Any person who is an officer, director, or the beneficial owner, directly
or indirectly,  of more than 10% of the outstanding  common stock of the Company
is required  under  Section  16(a) of the  Securities  Exchange Act of 1934,  as
amended (the  "Exchange  Act") to file certain  reports with the  Securities and
Exchange  Commission  (the  "Commission")  disclosing  his  or her  holdings  or
transactions in any securities of the Company.  For purposes of this discussion,
all such persons required to file such reports will be referred to as "Reporting
Persons".  Every Reporting  Person must file an initial  statement of his or her
beneficial  ownership of the  Company's  securities on the  Commission's  Form 3
within ten days after he or she becomes a  Reporting  Person.  Thereafter  (with
certain  limited  exceptions),  all changes in a Reporting  Person's  beneficial
ownership of the Company's  securities must be reported on the Commission's Form
4 on or before  the 10th day after  the end of the  month in which  such  change
occurred.  The Company knows of no person who was a Reporting  Person during the
fiscal  year ended April 30, 1998 or during the  current  fiscal  year,  who has
failed to file any reports  required to be filed on Forms 3 or 4 with respect to
his or her  holdings  or  transactions  in the  Company's  securities  since the
Company became publicly-held in 1982.

Certain Information as to Committees and Meetings of the Board of Directors

       During the past fiscal year,  four meetings of the Board were held.  Each
incumbent Director attended all meetings of the Board.

       In December 1983, the Board  appointed an Audit Committee which presently
consists of three Directors,  Messrs.  Girsky, Ho and Franklin.  The function of
the Audit  Committee is to insure the integrity and credibility of the Company's
financial  information  system and the  published  reports  flowing  out of that
system. The Audit Committee held one meeting during the last fiscal year.

       The Compensation Committee,  which presently consists of three Directors,
Messrs.  Girsky, Ho and Franklin, met one time in 1998. The committee determines
cash remuneration  arrangements for the highest paid executives and oversees the
Company's stock option, bonus and other incentive compensation plans. The report
of the  Compensation  Committee  appears  on pages 8  through  13 of this  proxy
statement.

       During   fiscal  1994,  a  Stock  Option   Committee   was  formed  which
consolidated  all of the separate  committees that previously  administered  the
various  plans.  The Stock Option  Committee  is designed to include,  among its
members, all outside directors.
Presently the members are Messrs. Girsky, Ho and Franklin.

                             EXECUTIVE COMPENSATION

Compensation Committee Report on Executive Compensation

Overall Policy

       The members of the Compensation Committee  include  Messrs.  Joel Girsky,
John C. Ho and Joseph P. Franklin.  The  Committee reviews and, with any changes
it believes appropriate, approves the Company's executive compensation.

       The general  goals of the  Compensation  Committee  are to: (i)  attract,
motivate, and retain effective and highly qualified executives;  (ii) strengthen
the common  interests of management and  shareholders  through  executive  stock
ownership;  (iii) promote the Company's long and short-term  strategic goals and
human resource strategies;  (iv) recognize and award individual contributions to
the Company's  performance and (v) reflect compensation  practices of comparable
companies.


       To achieve the foregoing goals, the Compensation Committee has structured
a  comprehensive  compensation  program  aimed at:  (i)  compensating  executive
officers on an annual basis with a cash salary at a level  sufficient  to retain
and motivate them and to recognize and award  individual  merit;  (ii) linking a
portion of executive  compensation  to long-term  appreciation  of the Company's
stock price by encouraging  executive  ownership of the Company's  stock through
awards of shares  of the  Company's  stock and  grants of  options  to  purchase
Company stock, and; (iii) providing incentives to achieve corporate  performance
goals by  rewarding  contributions  to the  Company's  performance  through cash
bonuses keyed to operating profit levels. These policies are implemented through
a reward  system which  includes base salary and long and  short-term  incentive
compensation opportunities consisting of the following:

Base Salaries

       The Committee annually reviews the base salaries of the CEO and all other
executive officers of the Company. The Compensation  Committee believes that the
Company's executive officers,  including those shown in the Summary Compensation
Table on page 14 (the "Named  Officers")  have been largely  responsible for the
Company's past successes,  for developing and implementing the Company's program
of  consolidating  and  restructuring  operations  to achieve  significant  cost
reductions and production and  engineering  improvements,  and for achieving and
maintaining the Company's  position at the forefront of technical  innovation in
the area of the  Company's  operations.  A base  salary  for each  executive  is
determined on the basis of such factors as: levels of responsibility; experience
and  expertise;  evaluations  of individual  performance;  contributions  to the
overall  performance  of the  Company;  time and  experience  with the  Company;
internal  compensation equity;  external pay practices for comparable companies;
and existing base salary relative to position value.

       In determining a base salary for Mr. Bloch,  the  Compensation  Committee
took into account base  salaries for senior  officers at companies of comparable
size and complexity,  both public and private,  as well as its assessment of Mr.
Bloch's  individual  performance,  and his  contribution  to the Company's  past
growth and accomplishments as well as contributions which it is anticipated will
be made by Mr. Bloch in the future. In this regard, the Committee recognized Mr.
Bloch's   untiring   efforts  in   developing   new,   non-military   technology
applications,  markets and marketing  programs which the Committee believes will
continue to help position the Company to compete more  effectively in commercial
as well as military markets.  The Committee noted that in fiscal 1998,  revenues
had  increased  by 15% and  operating  profit  before  the  one-time  litigation
settlement and inventory  writedowns and reserves,  increased by almost 50% from
the fiscal 1997 level.  Continuing  investment in research and  development  for
commercial  products  under  Mr.  Bloch's  leadership  was  highlighted  as  the
principal reason for the successful  transition to a commercial  company and the
marked  improvement in the results in recent years.  It should be noted that Mr.
Bloch's base salary of $325,000,  was determined at a time when he was the chief
executive  officer and whose  resignation  as such in  December  1993 was wholly
unanticipated.  However,  the  members  of the  Compensation  Committee  did not
believe that this change in his  managerial  status had reduced the value of his
overall  contribution to the Company because the consequent  reallocation of his
time had resulted in at least comparable value to the Company.

       Upon the election of General  Franklin to the position of Chairman of the
Board of Directors and Chief Executive Officer the factors noted above were also
taken  into  consideration  in  awarding  his  base  salary.  Based  on  General
Franklin's  special  qualifications,   the  responsibilities  involved  and  the
compensation  of  comparable  positions  in the  industry  and the  region,  the
non-employee  members of the  Compensation  Committee  awarded a base  salary of
$250,000.

       In prior fiscal years, General Franklin and Mr. Bloch voluntarily reduced
their base salaries to $202,500 and $263,250,  respectively.  In any fiscal year
during  which the Company  achieves an  operating  profit of at least $1 million
(excluding certain one-time  adjustments),  these salary reductions are restored
to the executive  officers as a component of their annual  bonuses.  Also during
fiscal 1996,  the  salaries of all other  officers  were reduced by 10%.  During
fiscal 1998,  the salaries of the other  officers  were  restored to fiscal 1995
levels.


       The  non-employee  members  of the  Committee  took note of these  salary
reductions in approving the awards of incentive  bonuses to the senior  officers
of the Company based on the Company's  fiscal 1998 performance and the incentive
compensation plans described below.

Short-Term Incentives

       The Company  maintains two short-term  incentive bonus plans,  the Income
Pool Incentive  Compensation Plan ("IPICP") and the Presidential  Incentive Plan
("PIP").  They are designed to create incentives for superior performance and to
allow the Company's executive officers to share in the success of the Company by
rewarding the  contributions of individual  officers.  The availability of funds
for  distribution  under these plans is dependent  upon the  performance  of the
Company as a whole.  Focused on  short-term  or annual  business  results,  they
enable the Company to award designated executives with annual cash bonuses based
on their  contributions  to the  profits of their  particular  divisions  of the
Company.

The Income Pool Incentive Compensation Plan

       The IPICP  authorizes the  establishment of an income pool based upon the
"Operating  Profits" of the Company.  Operating  Profits are defined as follows:
net sales  minus  cost of sales  and  selling  and  administrative  expenses  in
accordance with Generally Accepted Accounting  Principles  consistently applied.
The  amount  of  income  pool  available  for  distribution  under  the IPICP is
calculated in accordance  with the  following  formula:  the amount of Operating
Profit  divided by  1,000,000,  squared,  and  multiplied  by $20,000  (provided
however that the income pool may not exceed 12% of Operating  Profits).  Persons
eligible to receive cash awards under the IPICP include the Executive Committee,
excluding the CEO, and any other  employee who is  recommended by such Executive
Committee  and  approved by the CEO.  All of the  Company's  executive  officers
including all of the Named Officers  comprise the Executive  Committee.  For any
fiscal year when there are funds  available  for  distribution  under this plan,
General  Franklin  determines the amount to be awarded to each of the members of
the Executive Committee.  The members of such committee may recommend to General
Franklin, for his approval,  designated individuals, who are not members of such
committee,  to share in such  distribution.  Under the  terms of the  plan,  the
entire  income  pool  is not  required  to be  distributed  each  year  and  any
undistributed  portions of such pool are not carried  forward to future periods.
The recipients of cash bonuses under the IPICP,  and the amount of such bonuses,
are approved by General  Franklin,  based upon an evaluation of the performance,
level of responsibility  and leadership of the individual  executive in relation
to the Company's  operating results.  For the fiscal years ended April 30, 1998,
1997 and 1996, the Company accrued approximately $335,000, $340,000 and $75,000,
respectively, to be distributed under the terms of the IPICP.

The Presidential Incentive Plan

       The PIP is designed to provide the president with incentive  compensation
by way of annual cash payments based upon the Company's  earnings  before income
taxes.  Funds are made  available to the PIP based upon the  following  formula:
consolidated  pre-tax profits divided by 1,000,000,  squared,  and multiplied by
$5,000.  For the years  ended  April 30,  1998,  1997 and 1996,  the Company has
accrued approximately $155,000, $160,000 and $50,000,  respectively,  to be used
as awards under this plan.






Long-Term Incentives

       As part of its comprehensive  compensation  program, the Company stresses
long-term  incentives  through  awards of shares of its common  stock  under the
Employee Stock Ownership Plan, described below, and through the grant of options
to purchase  common stock through  various  Incentive  Stock Option Plans,  also
described  below.  Grants  and  awards are aimed at  attracting  new  personnel,
recognizing  and rewarding  current  executive  officers for special  individual
accomplishments,  and  retaining  high-performing  officers and key employees by
linking financial benefit to the performance of the Company (as reflected in the
market price of the Company's common stock) and to continued employment with the
Company.  The number of shares granted to executive officers under the Company's
ESOP is  determined on a pro-rata  basis,  as described  below.  Grants of stock
options are  generally  determined  on an  individual-by-individual  basis.  The
factors  considered are the  individual's  performance  rating and potential for
contributing  to the  Company's  future  growth,  the  number  of stock  options
previously granted to the individual and the Company's financial and operational
performance.

The Employee Stock Ownership Plan and Trust

       The Employee  Stock  Ownership Plan ("ESOP") is maintained by the Company
for all of its employees including its executive officers. The ultimate value of
any awards of stock made under this plan is  dependent  upon the market value of
the  Company's  common stock at such time as the shares are  distributed  to the
recipients.  The Compensation Committee believes that awards of stock under this
plan provide employees with a long-term focus since distribution of the stock is
not made until after  termination of employment and is forfeitable until certain
lapse  of  time  and  continued  employment  criteria  are  met.  The  ESOP  was
established  as of  January  1, 1990  through  the  amendment  of the  Company's
previously  existing Stock Bonus Plan and was funded at inception with 1,071,000
shares of the  Company's  common  stock  (the  "ESOP  Shares")  to be  allocated
annually to the employees of the Company over a period of ten years. Allocations
are  made  under  the  ESOP to each  employee's  account  in  proportion  to the
percentage  which such person's annual base salary bears to the aggregate annual
compensation  of all members during the fiscal year for which the allocation was
made,  provided  however that not more than $48,000 in annual  salary is counted
towards  any  employee's  percentage  participation.  The  Company's  executives
therefore  cannot  benefit under this plan to any extent  greater than any other
employee of the Company who earns an annual salary of $48,000 or more.

       An  employee's  right to receive  shares  allocated to his account is 20%
vested after  completion of three years of employment  with yearly  increases in
the percentage  vested until after seven years of  employment,  at which time an
employee's  right to receive 100% of the shares  allocated to his or her account
is vested.  Determination  of the vesting period is made in accordance  with the
employee's  years of  employment  with the  Company and not from the time of any
particular  allocation  of  shares  to his  account.  Accordingly,  the right to
receive all shares allocated to an employee at any time after he or she has been
employed by the Company for seven or more years,  is fully vested at the time of
such  allocation.  As of April  30,1998,  each of the Named  Officers,  with the
exception  of  General  Franklin,  have more than seven  years of  service  and,
therefore,  have the vested  right to receive  100% of the shares  allocated  to
their respective accounts.

       All ESOP Shares,  whether or not allocated to an employee's account,  are
held in trust by the trustees who administer the ESOP until  distribution to the
respective  employee.  ESOP Shares are  distributed  only after  termination  of
employment  with  the  Company.  However,  upon  the  attainment  of  age 55 and
completion of 10 years of service with the Company,  a participant  may elect to
transfer all or a portion of his vested shares, or the cash value thereof,  to a
Directed Investment Account.  Voting of allocated shares is by the ESOP trustees
at the  direction  of the  employees  in  proportion  to the  number  of  shares
allocated in their respective accounts.


       The beneficial  stock  ownership  table on page 7 shows the allocation of
ESOP shares to the accounts of each of the Named  Officers as of April 30, 1998.
The  dollar  value  of the  annual  allocation  of  shares,  as at the  date  of
allocation,  is included in the Summary  Compensation  Table.  Awards under this
plan are not tied to any  performance  criteria  other  than those  relating  to
percentage of aggregate annual  compensation of all members,  lapse of time, and
continued employment with the Company.

The Incentive Stock Option Plans

       Grants of stock options are an integral  part of the Company's  long-term
incentive   compensation  program.  The  Compensation  Committee  believes  that
ownership of options to purchase the Company's  stock helps  executives view the
Company  and  its  operations  and  achievements   from  the  perspective  of  a
stockholder  with an equity stake in the  business.  All options  granted to the
Company's  executives have exercise prices equal to the fair market value of the
Company's  common stock on the date of grant.  The value to an executive of such
options is,  therefore,  tied to the future market value of the Company's  stock
since he or she will benefit from such options only when the market price of the
stock increases above the exercise price of the option.  Moreover any benefit to
an option  holder is limited to the extent that all  stockholders  benefit  from
such  increase  in the market  value of the stock.  In addition  options  become
exercisable  only  after  one year from  grant  and then only in 25%  cumulative
increments  annually.  The Compensation  Committee  believes that this staggered
approach to  exercisability  provides an  incentive  to  executives  to increase
shareholder  value  over the long term  since the full  benefit  of the  options
cannot be  realized  unless  stock  price  appreciation  occurs over a number of
years.

       Under the terms of the ISOPs, eligible employees could be granted options
to purchase shares of the Company's common stock. Under the terms of each of the
ISOPs,  all options granted  thereunder are mandated to have a term of ten years
and an exercise price equal to the market price of the Company's common stock on
the date of grant,  and to be exercisable,  commencing one year from the date of
grant, at a cumulative rate of: 25% of the total shares subject to the option in
the  second  year;  50% of the total  shares  subject to the option in the third
year;  75% of the total shares  subject to the option in the fourth year and the
remainder of the total shares subject to option in the fifth year.

       The  President  (or,  in  his  absence,  the  Chairman  of the  Board  of
Directors) and the Stock Option  Committee each have full authority to determine
awards of stock options to individuals. The President,  Chairman, and members of
the Committee will recuse themselves from considering and approving awards where
they are personally  involved.  In the case where the President or Chairman have
made awards,  the Stock Option  Committee  will be informed each time awards are
made.

The Senior Executive Stock Option Plan

       The Company  established  a Senior  Executive  Stock  Option Plan in 1987
("Senior  ESOP") for the  President or Chairman of the Board of Directors of the
Company or of any  subsidiary of the Company which  produces gross sales for two
consecutive fiscal years in excess of $30,000,000. The Senior ESOP provides that
eligible employees may be granted options to purchase shares of the Common Stock
of the Company, exercisable after one year of continuous employment from date of
grant.  The option price must be at least fair market value on the date of grant
of the option.  The Stock Option  Committee  administers the Senior ESOP and has
the  discretion to determine  which  eligible  employees  shall be granted stock
options and the number of shares subject to such options.  General  Franklin and
Mr. Bloch have received grants of options under this plan.






The Restricted Stock Plan

       The Company  maintains a Restricted  Stock Plan which it  established  in
1989 (the "Restricted Stock Plan") for key employees (including all officers and
directors who are employees).  The Restricted  Stock Plan provides that eligible
employees  ("Participants")  may enter into restricted stock purchase agreements
to  purchase  shares of the  Common  Stock of the  Company,  subject  to various
forfeiture  restrictions  ("Restricted  Stock").  A total of  250,000  shares of
Common Stock were made available for purchase  under the Restricted  Stock Plan.
The  Compensation  Committee  has the  authority to determine  (i) those who may
purchase  Restricted Stock, (ii) the time or times at which Restricted Stock may
be  purchased,  (iii) the  number of shares  of  Restricted  Stock  which may be
purchased,  (iv) the duration of the  restrictions on the Restricted  Stock, (v)
the manner and type of restrictions to be imposed on the Restricted  Stock,  and
(vi) the purchase  price to be paid for the  Restricted  Stock  (which  purchase
price may not be less than the $1 per share par value of the Common Stock on the
date the Restricted Stock is purchased),  and (vii) the method of payment of the
purchase price.  During fiscal 1996, the Stock Option  Committee  authorized the
grant of an aggregate  of 112,500  shares of  Restricted  Stock to the then nine
Company  Officers  at an option  price of $4.00 per share.  (See the  Restricted
Stock table on page 7.) The Stock Option Committee did not authorize any persons
to purchase any shares under this plan during fiscal 1998 or 1997.

Independent Contractor Stock Option Plan

      During fiscal 1998,  the Company  established  an  Independent  Contractor
Stock  Option  Plan under which up to 200,000  shares may be granted.  The Stock
Option  Committee  determines to whom options may be granted from among eligible
participants,  the timing and duration of option grants,  the option price,  and
the number of shares of common  stock  subject to each  option.  During the year
ended April 30, 1998, the Company granted options to acquire 112,500 shares at a
price of $15.75,  the then fair market value of the Company's  common stock.  Of
the shares granted, 22,750 are exercisable  immediately,  29,750 are exercisable
one year from grant date,  30,000 are exercisable two years from grant date, and
30,000 are exercisable three years from grant date. For the year ended April 30,
1998,  the Company  recognized  compensation  expense of $208,000 as a result of
these stock option grants.

Supplemental Separation Benefits

       During  1996,  the  Company  agreed to  provide  supplemental  separation
benefits to certain executive officers.  Under the agreement,  in the event of a
change in control or ownership of part or all of the Company which gives rise to
discharge  of any  officer  without  cause and such  officer is not  offered the
opportunity to be hired by the new or successor  management or company within 30
days at no less than the base salary earned before discharge,  then such officer
will  receive  supplemental  severance  pay equal to one month's base salary for
each year of service at the Company up to a maximum of 15 months.


Joel Girsky
John C. Ho
Joseph P. Franklin

Members of the Compensation Committee






                           SUMMARY COMPENSATION TABLE

       The following table sets forth certain information regarding compensation
paid or accrued  during each of the Company's  last three fiscal years to all of
the Company's Chief Executive Officers and each of the Company's four other most
highly  compensated  executive  officers  (collectively,  the  "Named  Executive
Officers") based on salary and bonus earned in 1998.


- --------------------------------------------------------------------------------
                            Annual Compensation                 Long-Term
                                                            Compensation Awards
                       ----------------------------- ---------------------------
                                                          $Value of
                                                          Restricted
Name and Principal                                          Stock
Position                Year      Salary       Bonus      Awards(6)    Options
- --------------------    ----    ----------  ----------   ----------   ----------
Martin B. Bloch,        1998      $308,889     $62,750      $12,528      -0-
President,              ----    ----------  ----------   ----------   ----------
Chief Scientist (1)     1997       295,062      88,000        6,936      -0-
                        ----    ----------  ----------   ----------   ----------
                        1996       309,621      67,250        2,971   15,000 (7)

- --------------------------------------------------------------------------------
Joseph P. Franklin      1998       210,653      47,500       12,528      -0-
Chairman of the         ----    ----------  ----------   ----------   ----------
Board, C.E.O. (2)       1997       222,041      42,500        6,936      -0-
                        ----    ----------  -----------  ----------   ----------
                        1996       220,236      27,500        2,964   15,000 (7)

- --------------------------------------------------------------------------------
Leonard Martire, Vice   1998       140,860      10,000       12,528      -0-
President, Space        ----    ----------  -----------  ----------   ----------
Systems and Business    1997       137,740      27,000        6,936      -0-
Development (3)         ----    ----------  -----------  ----------   ----------
                        1996       132,949      12,000        2,971    7,500 (7)

- --------------------------------------------------------------------------------
Marvin Meirs            1998       133,302      30,000       12,528      -0-
Vice President          ----    ----------  -----------  ----------   ----------
Engineering (5)         1997       119,156      40,000        6,936      -0-
                        ----    ----------  -----------  ----------   ----------
                        1996       121,335      22,500        2,971      -0- (7)

- --------------------------------------------------------------------------------
Alfred Vulcan, Vice     1998       126,065      30,000       12,528      -0-
President, Systems      ----    ----------  -----------  ----------   ----------
Engineering(4)          1997       115,935      40,000        6,936      -0-
                        ----    ---------- ------------  ----------   ----------
                        1996       127,466      22,500        2,971   15,000 (7)
- --------------------------------------------------------------------------------


Notes:

         (1) For the fiscal  years ended April 30,  1998,  1997,  and 1996,  the
salary shown for Mr. Bloch includes aggregates of $30,452, $21,687, and $26,683,
respectively,  for: (i) automobile allowance; (ii) insurance premiums to provide
term life insurance  benefits  (available to all  employees);  (iii) the cost of
medical  insurance  (available to all employees);  and (iv) the costs of medical
reimbursements available to officers. Effective August 1, 1994, Mr. Bloch's base
salary of $325,000 was reduced to $292,500 and on August 1, 1995, to $263,250.

         (2) For the fiscal  years ended April 30,  1998,  1997,  and 1996,  the
salary shown for General Franklin includes aggregates of $12,047,  $19,541,  and
$11,245, respectively, for: (i) automobile allowance; (ii) insurance premiums to
provide term life insurance benefits (available to all employees); and (iii) the
costs of medical reimbursements available to officers. Effective August 1, 1994,
General  Franklin's  base  salary of $250,000  was  reduced to $225,000  and, on
August 1, 1995, to $202,500.

         (3) For the fiscal  years ended April 30,  1998,  1997,  and 1996,  the
salary  shown for Mr.  Martire  includes  aggregates  of $18,086,  $21,417,  and
$12,703, respectively, for: (i) automobile allowance; (ii) insurance premiums to
provide term life insurance  benefits  (available to all  employees);  (iii) the
cost of medical  insurance  (available to all employees);  and (iv) the costs of
medical reimbursements available to officers.


         (4) For the fiscal  years ended April 30,  1998,  1997,  and 1996,  the
salary shown for Mr. Meirs includes aggregates of $19,455, $14,877, and $16,800,
respectively,  for: (i) automobile allowance; (ii) insurance premiums to provide
term life insurance  benefits  (available to all  employees);  (iii) the cost of
medical  insurance  (available to all employees);  and (iv) the costs of medical
reimbursements available to officers.

         (5) For the fiscal  years ended April 30,  1998,  1997,  and 1996,  the
salary  shown for Mr.  Vulcan  includes  aggregates  of  $12,988,  $12,087,  and
$20,037, respectively, for: (i) automobile allowance; (ii) insurance premiums to
provide term life insurance  benefits  (available to all  employees);  (iii) the
cost of medical  insurance  (available to all employees);  and (iv) the costs of
medical reimbursements available to officers.

         (6)  Represents  the dollar  value,  as at the date of  allocation,  of
shares of common stock of the Company  allocated  under the  Company's  Employee
Stock  Ownership  Plan ("ESOP") as at December 31, 1997,  1996,  and 1995,  (the
"Grant   Dates"),   respectively.   Awards   made   under   the   ESOP  are  not
performance-based, but are awarded to all employees of the Company in proportion
to the  percentage  which their  annual  salary  bears to the  aggregate  annual
salaries of all eligible  employees of the  Company,  provided  however that not
more than $48,000 in annual salary is counted towards any employee's  percentage
participation.  Distribution of shares allocated to an employee's account is not
made until after termination of employment.  Seven hundred  eighty-three  (783),
eight hundred  sixty-seven (867) and six hundred ninety-nine (699) shares of the
Company's  common stock were allocated to the ESOP accounts of each of the Named
Officers as at December 31, 1997, 1996, and 1995,  respectively,  except General
Franklin  at  December  31,  1995.  In  General  Franklin's  case,  six  hundred
ninety-seven  (697)  shares were  allocated  to his ESOP account at December 31,
1995. The market price of the Company's common stock as at each of the foregoing
Grant Dates was $16 at December 31, 1997, $8 at December 31, 1996, and $4 1/4 at
December 31, 1995.  (See the  discussion  under the caption "The Employee  Stock
Ownership Plan and Trust" included in the Compensation Committee Report, above.)

         (7)  Represents  shares  pursuant to a Stock Purchase  Agreement  dated
October 10, 1995 under the  Restricted  Stock Plan at a purchase  price of $4.00
per share.  (Refer to the  Restricted  Stock  Plan  discussion  included  in the
Compensation  Committee  Report above.) During fiscal 1998, Mr. Meirs  exercised
his option to purchase 15,000 shares at the indicated exercise price.






Stock Options

Options Granted:

The following  table sets forth certain  information  with respect to options to
acquire  common stock that were  granted  during the fiscal year ended April 30,
1998, to each of the Named Officers under the Company's stock option plans.

                          OPTION GRANTS IN FISCAL 1998

                                 Individual Grants
- --------------------------------------------------------------------------------
                                                                   Potential
                                                                   Realizable
                                                                   Value at
                                                                   Assumed
                                                                   Annual Rates
                                                                   of Stock 
                No. of     % of Total                              Price
                Securities Options                                 Appreciation
                Underlying Granted to   Exercise or                For Option   
                Options    Employees in Base Price                 Term 
Name            Granted    Fiscal Year    ($/Sh)   Expiration Date 5%($)  10%($)
- ----            ---------- ------------ ---------- --------------- ------ ------

Martin B. Bloch        0      0.00%
Joseph P. Franklin     0      0.00%
Leonard Martire    4,500      4.35%      $10.167   July 25, 2007  28,773  72,916
Marvin Meirs       7,500      7.25%      $10.167   July 25, 2007  47,955 121,527
Alfred Vulcan      7,500      7.25%      $10.167   July 25, 2007  47,955 121,527

Option Exercises and Year-end Values:

The  following  table sets forth  certain  information  with  respect to options
exercised during fiscal 1998 by each Named Officer and option values as of April
30, 1998.

                 AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998
                        AND FISCAL YEAR-END OPTION VALUES

                                                                Value of
                                          No. of Securities   Unexercised
                                          Underlying          In-the-Money
                                          Unexercised Options Options at 
                 Shares                   at Fiscal year-end  Fiscal Year-end($)
                 Acquired on Value        Exercisable (E)/    Exercisable (E)/
Name             Exercise    Realized ($) Unexercisable (U)   Unexercisable(U)
- ----             ----------- ------------ ------------------- ---------------- 
                                                                               
Martin B. Bloch       0              0       165,000 (E)       $2,099,625 (E)

Joseph P. Franklin    0              0        52,500 (E)       $  645,938 (E)

Leonard Martire   9,000        194,625        44,475 (E)       $  553,374 (E)
                                               3,375 (U)       $   20,108 (U)

Marvin Meirs     20,000        275,000         1,875 (E)       $   11,171 (E)
                                               5,625 (U)       $   33,514 (U)

Alfred Vulcan    13,500        193,844        16,875 (E)       $  193,046 (E)
                                               5,625 (U)       $   33,514 (U)

Long-term Incentive Plans

       The Company does not maintain any  compensation  plans for its  executive
officers  or  directors  or  for  any  of  its  other  employees  which  provide
compensation  intended to serve as  incentive  for  performance  to occur over a
period  longer  than one fiscal year other than the  restricted  stock and stock
option plans discussed in the Compensation Committee Report, above. Awards under
these plans are shown in the Summary Compensation Table, above.


Pension Benefits

       The  Company  has no defined  benefit or  actuarial  retirement  plans in
effect. It has entered into certain  Executive  Incentive  Compensation  ("EIC")
agreements  with key  employees  (including  some  officers)  providing  for the
payment  of  benefits  upon  retirement  or  death or upon  the  termination  of
employment  not for cause.  The Company  pays  compensation  benefits out of its
working  capital but has also purchased whole life insurance (of which it is the
sole  beneficiary)  on the lives of  certain  of the  participants  to cover the
optional lump sum obligations of the plan upon the death of the participant. The
annual  premiums  paid during  fiscal  1998 were less than the  increase in cash
surrender value of such insurance  policies.  The annual benefit  provided under
the  program in fiscal  1998 upon  retirement  at age 65 or death is as follows:
Martin B. Bloch - $100,000,  Leonard  Martire - $40,000,  Marvin Meirs- $50,000,
and Alfred Vulcan- $50,000. The benefit described above is payable for ten years
or the life of the participant,  whichever is longer. Two years after retirement
or early  retirement,  the participants  can elect to receive the benefit,  less
benefits  received  during  the  two-year  period,  in a lump sum under  certain
conditions. Upon voluntary termination of employment or discharge not for cause,
the  participant  would be entitled to a lump sum  payment,  the amount of which
varies  based on the year in which  termination  occurs  and the  nature  of the
termination as set forth in the individual's EIC agreement.  In conjunction with
the program,  the participants  are required to make certain  covenants with the
Company   relating  to,  among  other  things,   nondisclosure  of  confidential
information,  noncompetition  with the Company and the  providing of  consulting
services subsequent to retirement.


Performance Graph

       The following graph compares the cumulative total  shareholder  return on
the  common  stock  of the  Company  with the  cumulative  total  return  of the
companies listed in the Standards & Poors' 500 Stock Index (the "S&P Index") and
an industry  peer group index (the "Peer Group  Index").  The graph assumes that
$100 was invested on May 1, 1993 in each of the common stock of the Company, the
stock of the companies  comprising the S&P Index and the stocks of the companies
comprising the Peer Group Index, including the reinvestment of dividends through
April 30, 1998. The Peer Group Index consists of Alpha Industries,  Inc., Anaren
Microwave,  Inc.,  Aeroflex  Inc.,  Ball  Corp.,  Burr-Brown  Corp.,  California
Microwave,  Datum Inc., EDO Corp., Genrad Inc., Kollmorgen Corp., Odetics, Inc.,
Scientific Atlanta, Inc., and Trimble Navigation, Inc.

                    Cumulative Total Shareholder Return for
                     Five-Year Period Ended April 30, 1998

                               [GRAPHIC OMITTED]
Performance  graph is Graphical  Material and is NOT  electronically  filed with
this submission. A paper copy of the graph is filed with Form SE.


Employment Contracts and Change-In-Arrangements

       None  of  the  Named  Officers  are  employed by the Company  pursuant to
employment  agreements.  As described  in  the  Compensation  Committee   Report
beginning on page 8, the Company has provided  supplemental separation  benefits
for certain  executive  officers, including  the Named Officers, in the event of
a change in control or ownership of part or  all  of  the Company. Such benefits
will  be provided only  if  an  officer  is  discharged without cause and is not
offered  the  opportunity  to be hired by the new  or  successor  management  or
company  within 30 days at no less than the base salary earned before discharge.
The Company does not have any other material compensatory  plans or arrangements
with  its  employees  with  respect  to  any  resignation,  retirement  or other
termination of such persons employed with  the Company resulting from, or in any
way connected with, a change-in-control of the Company.

                            ANNUAL REPORT

       A copy of the Company's  combined Annual Report and Form 10-K,  including
the financial  statements and the financial  statement schedule thereto, for the
fiscal year ended  April 30, 1998 is being  mailed to  Stockholders concurrently
with  the  mailing  of  this Proxy  Statement.  For a charge of $50, the Company
agrees  to  provide  a copy of the exhibits to the Form 10-K to any Stockholders
who request such a copy.



                                By Order of the Board of Directors,



                                HARRY NEWMAN
                                Secretary


Dated:  August 26, 1998





APPENDIX

Performance Graph is Graphical Material and is NOT
electronically filed with this submission.  A paper copy
of the graph is filed with Form SE.