DRS Technologies Signs Definitive Agreement to Acquire NAI Technologies.

PARSIPPANY, N.J.--(BUSINESS WIRE)--Aug. 26, 1998--DRS Technologies, Inc. (ASE:DRS) announced today that it has signed a definitive agreement to acquire NAI Technologies, Inc. (Nasdaq:NATL). NAI Technologies, based in Huntington, New York, is a leading provider of rugged computers, peripheral equipment and integrated systems for military, government and commercial applications.

The agreement follows the company's announcement in April 1998 of the signing of a letter of intent for NAI Technologies to merge with a subsidiary of DRS in a stock transaction. Under the terms of the agreement, NAI shareholders will receive 0.23 of a share of DRS common stock for each share of NAI common stock held, subject to adjustment if the average daily closing of DRS common stock is less than $12.00 over a 60-day trading period ending two days prior to the closing date. In such event, NAI shareholders will receive 0.25 of a share of DRS common stock for each outstanding share of NAI common stock. The company expects the acquisition will be completed by the end of its fiscal third quarter, which ends December 31, 1998.

The transaction is subject to the receipt of stockholder and regulatory approvals, the filing of an effective registration statement with the U.S. Securities and Exchange Commission, the disposition of NAI's Wilcom, Inc. subsidiary, and certain other conditions. The agreement provides for the payment of a $1.5 million termination fee by NAI to DRS in the event that NAI enters into a definitive agreement to be acquired with a third party.

Mark S. Newman, chairman, president and chief executive officer of DRS Technologies, commented: "A diversified, international electronics company, NAI's business strongly complements DRS's defense electronics products and systems integration technologies. The acquisition is consistent with our goal to expand DRS's market share in ruggedized computers and peripheral equipment for military applications."

Robert Carlson, president and chief executive officer of NAI Technologies, added: "We look forward to joining an organization of the quality, strength and longevity of DRS. This combination is expected to provide NAI with increased financial stability and new global market opportunities. The core business thrusts of the two companies are highly compatible."

DRS Technologies is a diversified, high-technology company serving government and commercial niche markets worldwide. The company develops and manufactures a variety of leading edge systems and components used for the processing, display and storage of data. DRS provides its customers with a broad range of products, including electronic sensor, electronic imaging and electro-optical systems, and offers a full complement of technical support services. The company's defense electronics products serve all branches of the armed forces. Its commercial and industrial products are used by the airline, banking, computer disk drive, security, transportation, retail sales and broadcast industries.

Additional information is available on the company's web site at www.drs.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the matters set forth in this news release are forward-looking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, and include, without limitation, demand and competition for the Company's products and other risks or uncertainties detailed in the Company's Securities and Exchange Commission filings.

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