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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT

PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934

PRAEGITZER INDUSTRIES, INC.

(Name of Subject Company)

PRAEGITZER INDUSTRIES, INC.

(Name of Person(s) Filing Statement)

COMMON STOCK

(Title of Class of Securities)

CUSIP NO. 739422103

(CUSIP Number of Class of Securities)

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MATTHEW J. BERGERON
PRESIDENT AND CHIEF OPERATING OFFICER
PRAEGITZER INDUSTRIES, INC.
19801 SW 72ND AVENUE
TUALATIN, OR 97062
(503) 454-6000

(Name, address and telephone number of person authorized
to receive notice and communications on behalf of the person filing statement)

WITH A COPY TO:

STEPHEN E. BABSON
STOEL RIVES LLP
900 SW FIFTH AVENUE, SUITE 2600
PORTLAND, OREGON 97204
(503) 224-3380

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ITEM 1. SECURITY AND SUBJECT COMPANY.

The name of the subject company is Praegitzer Industries, Inc., an Oregon
corporation (the "Company" or "Praegitzer"). The address of the principal
executive offices of the Company is 19801 SW 72nd Avenue, Tualatin, Oregon
97062. The title of the class of equity securities to which this Schedule
relates is the common stock of the Company (the "Common Stock").

ITEM 2. TENDER OFFER OF THE BIDDER.

This Schedule relates to the tender offer by T Merger Sub (OR), Inc., an
Oregon corporation ("Offeror"), a wholly owned subsidiary Sigma Circuits, Inc.
("Parent"), a Delaware corporation and an indirect wholly owned subsidiary of
Tyco International Ltd., a Bermuda corporation ("Tyco"), to purchase (i) all
outstanding shares (the "Shares") of Common Stock at the purchase price of $5.50
per Share, net to the tendering holder (pre-tax) in cash (the "Per Share
Amount") upon the terms and subject to the conditions set forth in the Offer to
Purchase dated November 1, 1999 (the "Offer"), and the related Letter of
Transmittal (which together constitute the "Tyco Offer"). The Tyco Offer is
disclosed in a Tender Offer Statement on Schedule 14D-1 dated November 1, 1999.
According to the Offer to Purchase, the principal executive offices of Tyco are
located at The Gibbons Building, 10 Queen Street, Hamilton HM11, Bermuda and the
principal executive offices of Offeror are located at One Tyco Park, Exeter, New
Hampshire 03833.

The Tyco Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of October 26, 1999 (the "Merger Agreement"), among the Company, the
Offeror and Parent, with the guarantee of Tyco. A copy of the Merger Agreement
has been filed as Exhibit 1 to this Schedule 14D-9 and is incorporated herein by
reference in its entirety.

ITEM 3. IDENTITY AND BACKGROUND.

(a) Identity.

The name and business address of the Company, which is the person filing
this Schedule, are set forth in Item 1 above.

(b) Contracts.

Except as otherwise described in this Schedule or in the exhibits hereto, to
the knowledge of the Company, as of the date hereof, there are no material
contracts, agreements, arrangements or understandings, or any actual or
potential conflicts of interest, between the Company or its affiliates and Tyco
or Parent or the Offeror or their respective executive officers, directors or
affiliates.

AGREEMENTS WITH THE OFFEROR, PARENT, TYCO OR THEIR AFFILIATES

THE MERGER AGREEMENT

The following is a summary of certain provisions of the Merger Agreement and
is qualified in its entirety by reference to the Merger Agreement, a copy of
which has been filed with the Securities and Exchange Commission (the
"Commission") as Exhibit 1 to this Schedule 14D-9. Capitalized terms not
otherwise defined in this Schedule 14D-9 shall have the meanings set forth in
the Merger Agreement.

THE OFFER. The Merger Agreement provides that Offeror will commence the
Offer and that, upon the terms and subject to the prior satisfaction or waiver
of the conditions of the Offer, Offeror will purchase all Shares validly
tendered pursuant to the Offer. The Merger Agreement provides that, without the
written consent of the Company, Offeror will not (i) decrease the Per Share
Amount or change the form of consideration payable in the Offer, (ii) decrease
the number of Shares subject to the Offer, (iii) amend or waive satisfaction of
the condition (the "Minimum Condition") that at least 51% of all Shares
outstanding shall have been tendered and not withdrawn in the Offer, or
(iv) impose

additional conditions to the Offer or amend any other term of the Offer in any
manner adverse to the holders of Shares, except that if on the initially
scheduled expiration date of the Offer all conditions to the Offer shall not
have been satisfied or waived, Offeror may, from time to time, in its sole
discretion, extend the expiration date of the Offer. The Merger Agreement
provides that if, immediately prior to the expiration date of the Offer, as it
may be extended, the Common Shares tendered and not withdrawn pursuant to the
Offer equal less than 90% of the outstanding Common Shares, Offeror may extend
the Offer for a period not to exceed 10 business days.

THE MERGER. The Merger Agreement provides that, following the consummation
of the Offer and subject to the terms and conditions thereof, at the effective
time of the Merger (the "Effective Time") Purchaser shall be merged with and
into the Company and, as a result of the Merger, the separate corporate
existence of Purchaser shall cease, and the Company shall continue as the
Surviving Corporation and a direct subsidiary of Parent.

The respective obligations of Parent and Purchaser, on the one hand, and the
Company, on the other hand, to effect the Merger are subject to the satisfaction
or waiver at or prior to the Effective Time of each of the following conditions:
(i) Parent or Purchaser or their affiliates shall have consummated the Offer,
unless such failure to purchase is a result of a breach of Purchaser's
obligations to accept for payment or pay for Shares pursuant to the Offer in
violation of the terms of the Offer or of the Merger Agreement, (ii) the Merger
shall have been approved by the requisite vote of the shareholders, if required
by applicable law, in order to consummate the Merger, (iii) no order, statute,
rule, regulation, executive order, stay, decree, judgment or injunction shall
have been enacted, entered, promulgated or enforced by any court or other
Governmental Authority which prohibits or prevents the consummation of the
Merger which has not been vacated, dismissed or withdrawn prior to the Effective
Time, and (iv) all consents of any Governmental Authority required for the
consummation of the Merger and the transactions contemplated by the Agreement
shall have been obtained, other than where the failure to obtain such consents
is not reasonably likely to have a material adverse effect on the business,
assets, condition (financial or other), liabilities or results of operations of
the Surviving Corporation and its subsidiaries taken as a whole.

At the Effective Time of the Merger, (i) each issued and outstanding Share
(other than Shares that are held by shareholders properly exercising dissenters'
rights under the OBCA and Shares to be cancelled pursuant to clause (ii) below)
will be canceled and extinguished and be converted into the right to receive the
Per Share Amount in cash payable to the holder thereof, without interest, upon
surrender of the certificate representing such Share. From and after the
Effective Time, the holders of certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided for in the
Merger Agreement or by applicable Law, (ii) each Share owned by Tyco, Parent,
Purchaser or any direct or indirect wholly owned subsidiary of Tyco immediately
before the Effective Time shall be cancelled and extinguished, and no payment or
other consideration shall be made with respect thereto and (iii) the shares of
Purchaser common stock outstanding immediately prior to the Merger will be
converted into 1,000 shares of the common stock of the Surviving Corporation,
which shares will constitute all of the issued and outstanding capital stock of
the Surviving Corporation and shall be owned by Parent.

THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that
promptly upon the purchase by Purchaser of Shares pursuant to the Offer (and
provided that the Minimum Condition has been satisfied), Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as will give Parent, subject to
compliance with Section 14(f) of the Exchange Act, representation on the Board
of Directors of the Company equal to at least that number of directors which
equals the product of the total number of directors on the Board of Directors of
the Company (giving effect to the directors appointed or elected pursuant to
this sentence and including current directors serving as officers of the
Company) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Parent or any affiliate of Parent

(including such Shares as are accepted for payment pursuant to the Offer, but
excluding Shares held by the Company) bears to the number of Shares outstanding.
At such time, if requested by Parent, the Company will also cause each committee
of the Board of Directors of the Company to include persons designated by Parent
constituting the same percentage of each such committee as Parent's designees
are of the Board of Directors of the Company. The Company shall, upon request by
Parent, promptly increase the size of the Board of Directors of the Company or
exercise reasonable best efforts to secure the resignations of such number of
directors as is necessary to enable Parent's designees to be elected to the
Board of Directors of the Company in accordance with terms of this section and
to cause Parent's designees so to be elected; provided, however, that, in the
event that Parent's designees are appointed to the Board of Directors of the
Company, until the Effective Time the Board of Directors of the Company shall
have at least two directors who are directors on the date of the Agreement, one
of whom will be Robert Praegitzer and one of whom will be a director who is
neither an officer of the Company nor a designee, shareholder, affiliate or
associate (within the meaning of the federal securities laws) of Tyco (such
directors, the "Independent Directors"). Notwithstanding anything in the Merger
Agreement to the contrary, subsequent to the designation of the directors by
Parent and prior to the Effective Time, the unanimous vote of the Independent
Directors shall be required to (i) amend or terminate the Merger Agreement on
behalf of the Company, (ii) exercise or waive any of the Company's rights or
remedies thereunder, (iii) extend the time for performance of Parent's
obligations thereunder, (iv) take any other action by the Company in connection
with the Merger Agreement required to be taken by the Board of Directors of the
Company or (v) amend the Company's Articles of Incorporation or the Company's
Bylaws, each as in effect on the date of the Merger Agreement.

SHAREHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its shareholders as promptly as
practicable following the consummation of the Offer for the purpose of voting
upon the Merger. The Merger Agreement provides that the Company will, if
required by applicable law in order to consummate the Merger, prepare and file
with the Commission and, when cleared by the Commission, will mail to
shareholders a proxy statement in connection with a meeting of the Company's
shareholders to vote upon the Company Proposals, or an information statement, as
appropriate, satisfying all requirements of the Securities Exchange Act.

If Purchaser acquires at least a majority of the Shares, it will have
sufficient voting power to approve the Merger, even if no other shareholder
votes in favor of the Merger.

The Merger Agreement provides that in the event that Parent or Purchaser
acquires at least 90% of each class of Shares, Parent, Purchaser and the Company
will take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the expiration of the Offer, without a
meeting of shareholders of the Company, in accordance with Section 60.491 of the
OBCA.

OPTIONS, WARRANTS, CONVERTIBLE SECURITIES AND OTHER RIGHTS. The Merger
Agreement provides that each of the Company and Parent shall take all reasonable
actions necessary to provide that all then outstanding options to purchase
Shares, whether or not then exercisable or vested (each, a "Company Option"),
shall constitute the right to receive an amount in cash equal to the positive
difference, if any, between the Per Share Amount and the exercise price of the
Company Option multiplied by the number of Shares for which the Company Option
was exercisable immediately prior to the Effective Time, subject to reduction
only for any applicable withholding taxes. The Company shall provide a period of
at least 30 days prior to the Effective Time during which Company Options may be
exercised to the extent exercisable at the Effective Time and, upon the
expiration of such period, all unexercised Company Options shall immediately
terminate. The Company may, in its sole discretion, permit holders of Company
Options that are not exercisable before the Effective Time to exchange such
options for cash as described above. In lieu of exercising Company Options as
described above, the holders shall be given the right, and the Company shall
encourage the holders of Company Options to exercise such

right, to exchange such options for cash as described above. In no event will
any Company Options be exercisable after the Effective Time, except to receive
cash.

Each of the warrants of the Company, dated November 17, 1995, to purchase
Shares at a price of $12.00 per share, subject to adjustment (the "Company
Warrants"), shall be exercisable, from and after the Effective Time, for an
amount of cash equal to the Per Share Amount multiplied by the number of Shares
for which such warrant was exercisable immediately prior to the Effective Time.
Except as aforesaid, the exercise of any Company Warrant shall remain subject to
all terms and conditions provided in the applicable Company Warrant and/or
Warrant Agreement. Each of the Company and Parent shall take all action
necessary to provide that, upon consummation of the Merger, all Company Warrants
outstanding immediately prior to the Effective Time shall be exercisable for a
cash amount as aforesaid.

Under the Deferral Agreement, the Company's lenders and equipment lessors
have the right to convert a certain portion of the amounts owed to them under
the Deferral Agreement into shares of the Company's common stock at $5.77 per
share. The maximum number of Shares issuable pursuant to the exercise of the
rights contained in the Deferral Agreement is 1,743,559. This conversion right
cannot be exercised if the Offer is consummated before March 31, 2000. In
addition, the Company's Notes are convertible into shares of the Company's
common stock at $8.325 per share. The maximum number of Shares issuable upon
conversion of the Notes is 1,381,382.

The Company shall take such action as is necessary to cause the ending date
of the then current offering period under the Company's employee stock purchase
plan to be prior to the Effective Time and to terminate such plan as of the
Effective Time.

INTERIM OPERATIONS; COVENANTS. Pursuant to the Merger Agreement, the
Company has agreed that, except as expressly contemplated or provided by the
Merger Agreement or in the Company Disclosure Letter delivered by the Company to
Parent and Purchaser in connection with the Merger Agreement or consented to in
writing by Parent (which consent in the case of certain provisions shall not be
unreasonably denied), prior to the Effective Time, (i) the Company shall
conduct, and it shall cause the Company Subsidiaries to conduct, its or their
businesses in the ordinary course and consistent with past practice, and the
Company shall, and it shall cause the Company Subsidiaries to, use its or their
reasonable best efforts to preserve substantially intact its business
organization, to keep available the services of its present officers and
employees and to preserve the present commercial relationships of the Company
and the Company Subsidiaries with persons with whom the Company or the Company
Subsidiaries do significant business and (ii) without limiting the generality of
the foregoing, neither the Company nor any of the Company Subsidiaries will:

(A) amend or propose to amend its Articles of Incorporation or Bylaws
(or similar organizational documents);

(B) authorize for issuance, issue, grant, sell, pledge, dispose of or
propose to issue, grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind to
acquire or sell any shares of, the capital stock or other securities of the
Company or any of the Company Subsidiaries, including, but not limited to,
any securities convertible into or exchangeable for shares of stock of any
class of the Company or any of the Company Subsidiaries, except for (a) the
issuance of shares pursuant to the exercise of Company Options outstanding
on the date of the Merger Agreement in accordance with their present terms,
(b) the issuance of shares pursuant to the Company Stock Purchase Plan as in
effect on the date of the Merger Agreement, (c) the issuance of shares
pursuant to the exercise of Company Warrants outstanding on the date of the
Merger Agreement in accordance with their present terms or (d) the issuance
of shares upon the conversion of the Notes in accordance with the indenture
relating to the Notes on its present terms;

(C) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, other than dividends to the Company or any Company Subsidiary
(except that in no case may the Company or a Company Subsidiary declare or
pay any cross-border dividends), make or allow any Company subsidiary to
make any cross-border capital contributions, or directly or indirectly
redeem, purchase or otherwise acquire or offer to acquire any shares of its
capital stock or other securities (other than the repurchase of 100,000
Shares from Matthew J. Bergeron, the Company's President and Chief Operating
Officer, pursuant to that certain Stock Purchase Agreement dated
December 22, 1998 between the Company and Mr. Bergeron);

(D) (a) create or incur any indebtedness for borrowed money or issue any
debt securities, except pursuant to the Credit Agreements, or (b) make any
loans or advances, except in the ordinary course of business consistent with
past practice;

(E) (a) sell, pledge, dispose of or encumber any assets of the Company
or of any Company Subsidiary (except for (i) sales of assets in the ordinary
course of business and in a manner consistent with past practice,
(ii) pledges to secure debt permitted under paragraph (D),
(iii) dispositions of obsolete or worthless assets, and (iv) sales of
immaterial assets not in excess of $250,000 in the aggregate); (b) acquire
(by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof;
(c) authorize any capital expenditures or purchases of fixed assets which
are, in the aggregate, in excess of $250,000 from the date hereof until
February 29, 2000; (d) assume, guarantee (other than guarantees of
obligations of the Company Subsidiaries entered into in the ordinary course
of business) or endorse or otherwise as an accommodation become responsible
for, the obligations of any person, or make any loans or advances, except in
the ordinary course of business consistent with past practice; or
(e) voluntarily incur any material liability or obligation (absolute,
contingent or otherwise) except in the ordinary course of business
consistent with past practice.

(F) increase in any manner the compensation of any of its officers or
employees (other than, except with respect to employees who are executive
officers or directors, in the ordinary course of business reasonably
consistent with past practice) or enter into, establish, amend or terminate
any employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing, health or
other welfare, stock option or other equity, pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan,
policy, agreement, trust, fund or arrangement with, for or in respect of,
any shareholder, officer, director, employee, consultant or affiliate other
than, in any such case referred to above, as may be required by Law or as
required pursuant to the terms of agreements in effect on the date of the
Merger Agreement and other than arrangements with new employees (other than
employees who will be officers of the Company) hired in the ordinary course
of business consistent with past practice and providing for compensation
(other than equity-based compensation) and other benefits consistent with
those provided for similarly situated employees of the Company as of the
date hereof;

(G) alter through merger, liquidation, reorganization, restructuring or
in any other fashion the corporate structure or ownership of any Company
Subsidiary or the Company;

(H) except as may be required as a result of a change in law or as
required by the Commission, change any of the accounting principles or
practices used by it;

(I) make any tax election or settle or compromise any income tax
liability;

(J) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
other), other than the payment, discharge or satisfaction in

the ordinary course of business and consistent with past practice of
liabilities reflected or reserved against in, or contemplated by, the
financial statements (or the notes thereto) of the Company contained in the
Company SEC Filings filed prior to the date of the Merger Agreement or
incurred in the ordinary course of business consistent with past practice;

(K) except to the extent necessary for the exercise of its fiduciary
duties by the Board of Directors of the Company as set forth in, and
consistent with the provisions described under "No Solicitation" below,
waive, amend or allow to lapse any term or condition of any confidentiality
or "standstill" agreement to which the Company or any Company Subsidiary is
a party; or

(L) take, or agree in writing or otherwise to take, any of the foregoing
actions or any action which would make any of the representations or
warranties of the Company contained in the Merger Agreement untrue or
incorrect in any material respect at or prior to the Effective Time.

The Merger Agreement further provides that the Company shall, and the Company
shall cause each of the Company Subsidiaries to, comply with all Laws applicable
to it or any of its properties, assets or business and to maintain in full force
and effect all the Company Permits necessary for such business, except in any
such case for any failure so to comply or maintain that would not reasonably be
expected to result in a Material Adverse Effect.

NO SOLICITATION. Pursuant to the Merger Agreement, the Company shall not,
directly or indirectly, through any officer, director, employee, representative
or agent of the Company or any of the Company Subsidiaries, solicit or encourage
the initiation of (including by way of furnishing information) any inquiries or
proposals regarding any Company Takeover Proposal that if consummated would
constitute an Alternative Transaction (as defined below). The Board of Directors
of the Company is not prevented from (i) furnishing information to a third party
which has made a BONA FIDE Company Takeover Proposal that is a Superior Proposal
(as defined below) not solicited in violation of the Merger Agreement, provided
that such third party has executed an agreement with confidentiality provisions
substantially similar to those then in effect between the Company and an
affiliate of Parent (the "Confidentiality Agreement") or (ii) subject to
compliance with the other terms of the Merger Agreement's "No Solicitation"
provision, considering and negotiating a BONA FIDE Company Takeover Proposal
that is a Superior Proposal not solicited in violation of the Merger Agreement;
PROVIDED THAT, as to each of clauses (i) and (ii), the Board of Directors of the
Company reasonably determines in good faith (after due consultation with
independent counsel, which may be Stoel Rives LLP) that it is or is reasonably
likely to be required to do so in order to discharge properly its fiduciary
duties. For purposes of the Merger Agreement, a "Superior Proposal" means any
proposal made by a party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, all of the equity securities of the
Company entitled to vote generally in the election of directors or all the
assets of the Company (other than a DE MINIMUS amount of assets not material to
the conduct of the Company's business), on terms which the Board of Directors of
the Company reasonably believes (after consultation with Financial Advisor,
McDonald Investments or another financial advisor of nationally recognized
reputation) to be more favorable from a financial point of view to its
shareholders than the Offer and the Merger taking into account at the time of
determination all factors relating to such proposed transaction deemed relevant
by the Board of Directors of the Company, including, without limitation, the
financing thereof, the proposed timing thereof and all other conditions thereto
and any changes to the financial terms of the Merger Agreement proposed by
Parent and Purchaser. "Alternative Transaction" means any of (i) a transaction
pursuant to which any person (or group of persons) other than Parent or its
affiliates (a "Third Party") acquires or would acquire more than 20% of the
outstanding shares of any class of equity securities of the Company, whether
from the Company or pursuant to a tender offer or exchange offer or otherwise,
(ii) a merger or other business combination involving the Company pursuant to
which any Third Party acquires more than 20% of the outstanding equity
securities of the Company or the entity surviving such merger or business
combination, (iii) any transaction pursuant to which any Third Party acquires or
would acquire control

of assets (including for this purpose the outstanding equity securities of
Company Subsidiaries and securities of the entity surviving any merger or
business combination including any of the Company Subsidiaries) of the Company
or any Company Subsidiaries having a fair market value (as determined by the
Board of Directors of the Company in good faith) equal to more than 20% of the
fair market value of all the assets of the Company and the Company Subsidiaries,
taken as a whole, immediately prior to such transaction, or (iv) any other
consolidation, business combination, recapitalization or similar transaction
involving the Company or any of the Company Subsidiaries, other than the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that the term
Alternative Transaction shall not include any acquisition of securities by a
broker dealer in connection with a BONA FIDE public offering of such securities.
Notwithstanding anything to the contrary contained in the Merger Agreement,
prior to the Effective Time, the Company may, in connection with a possible
Company Takeover Proposal, refer any third party to the "No Solicitation" and
"Fees and Expenses" sections of the Merger Agreement and make a copy of these
sections available to a third party.

The Merger Agreement requires the Company to immediately notify Parent and
Purchaser after receipt of any Company Takeover Proposal, or any modification of
or amendment to any Company Takeover Proposal, or any request for nonpublic
information relating to the Company or any of the Company Subsidiaries in
connection with a Company Takeover Proposal or for access to the properties,
books or records of the Company or any subsidiary by any person or entity that
informs the Board of Directors of the Company or such subsidiary that it is
considering making, or has made, a Company Takeover Proposal. Such notice to
Parent and Purchaser shall be made orally and in writing, and shall indicate the
identity of the person making the Company Takeover Proposal or intending to make
the Company Takeover Proposal or requesting non-public information or access to
the books and records of the Company, the terms of any such Company Takeover
Proposal or modification or amendment to a Company Takeover Proposal, and
whether the Company is providing or intends to provide the person making the
Company Takeover Proposal with access to information concerning the Company as
provided above. The Company shall also immediately notify Parent and Purchaser,
orally and in writing, if it enters into negotiations concerning any Company
Takeover Proposal.

Except as set forth in the Merger Agreement, neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
indicate publicly its intention to withdraw or modify, in a manner adverse to
Parent, the approval or recommendation by such Board of Directors or such
committee of the Offer or the Merger, (ii) approve or recommend, or indicate
publicly its intention to approve or recommend, any Company Takeover Proposal or
(iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, a "Company
Acquisition Agreement") related to any Company Takeover Proposal.
Notwithstanding the foregoing, in the event that prior to the Effective Time the
Board of Directors of the Company determines in good faith, after due
consultation with outside counsel, that the failure to do so constitutes or is
reasonably likely to constitute a breach of its fiduciary duties to the
Company's shareholders under applicable law, the Board of Directors of the
Company may approve or recommend a Superior Proposal and, in connection
therewith, withdraw or modify its approval or recommendation of the Offer or the
Company Proposals, but only at a time that is after the third business day
following Parent's receipt of written notice advising Parent that the Board of
Directors of the Company has received a Superior Proposal and, in the case of
any previously received Superior Proposal that has been materially modified or
amended, such modification or amendment and specifying the material terms and
conditions of such Superior Proposal, modification or amendment.

The Merger Agreement does not restrict the Company from taking and
disclosing to its shareholders a position contemplated by Rule 14e-2(a)
promulgated under the Securities Exchange Act or from making any disclosure to
the Company's shareholders if, in the good faith judgment of the Board of
Directors of the Company, with the advice of outside counsel, failure so to
disclose could be determined to be a breach of its fiduciary duties to the
Company's shareholders under applicable law;

PROVIDED, HOWEVER, that neither the Company nor its Board of Directors nor any
committee thereof shall, except as permitted by the above, withdraw or modify,
or indicate publicly its intention to withdraw or modify, its position with
respect to the Offer or the Merger or approve or recommend, or indicate publicly
its intention to approve or recommend, a Company Takeover Proposal.

The Company shall advise its officers and directors and any investment
banker or attorney retained by the Company in connection with the transactions
contemplated by the Merger Agreement of the restrictions set forth above.

INDEMNIFICATION AND INSURANCE. From and after the Effective Time, the
Surviving Corporation shall indemnify and hold harmless all past and present
officers and directors (the "Indemnified Parties") of the Company and of the
Company Subsidiaries to the full extent such persons may be indemnified by the
Company pursuant to Oregon law, the Company's Articles of Incorporation and
Bylaws, as each is in effect on October 26, 1999, for acts and omissions
(x) arising out of or pertaining to the transactions contemplated by the Merger
Agreement or arising out of the Offer Documents or (y) otherwise with respect to
any acts or omissions occurring or arising at or prior to the Effective Time and
shall advance reasonable litigation expenses incurred by such persons in
connection with defending any action arising out of such acts or omissions,
PROVIDED that such persons provide the requisite affirmations and undertaking,
as set forth in applicable provisions of the OBCA.

In addition, Parent will provide, or cause the Surviving Corporation to
provide, for a period of not less than six years after the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring or arising at or prior to the
Effective Time (the "D&O Insurance") that is no less favorable than the existing
policy or, if substantially equivalent insurance coverage is unavailable, the
best available coverage; PROVIDED, HOWEVER, that Parent and the Surviving
Corporation shall not be required to pay an annual premium for the D&O Insurance
in excess of 200% of the annual premium currently paid by the Company for such
insurance, but in such case shall purchase as much such coverage as possible for
such amount.

The Merger Agreement provides that the foregoing provisions are intended to
benefit the Indemnified Parties and shall be binding on all successors and
assigns of Parent, Purchaser, the Company and the Surviving Corporation. Parent
has agreed to guarantee the performance by the Surviving Corporation of the
indemnified obligations set forth above, which guaranty is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the bankruptcy or insolvency of the Surviving Corporation or any
person. The Indemnified Parties shall be intended third-party beneficiaries of
the foregoing provisions on indemnification and insurance.

REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Parent and
Purchaser with respect to, among other things, its organization, capitalization,
subsidiaries, authority relative to the Merger Agreement, governmental approvals
with respect to the Merger Agreement, the absence of contractual or legal
violations resulting from the Agreement, securities filings, financial
statements, the absence of material adverse effects on the Company and certain
other events since June 30, 1999, the absence of undisclosed liabilities,
compliance with laws, governmental permits, litigation, material contracts,
employee benefit plans, taxes, intellectual property, disclosure documents,
labor matters, the absence of limitations on conduct of business, title to
property, leased premises, environmental matters, insurance, product liability
and recalls, customers, interested party transactions, finders and investment
bankers, fairness opinion, takeover statutes, full disclosure, year 2000
readiness, absence of rights agreements and absence of certain unlawful
payments.

REASONABLE BEST EFFORTS. Under the Merger Agreement, each of the Company,
Parent and Purchaser has agreed to use reasonable best efforts to take all
actions and to do all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions

contemplated by the Merger Agreement, including, but not limited to,
(i) obtaining all consents from governmental authorities and other third parties
required for the consummation of the Offer and the Merger and the transactions
contemplated thereby and (ii) timely making all necessary filings under the HSR
Act. The Company, Parent and Purchaser have also agreed to use reasonable best
efforts to take all actions and to do all things necessary to satisfy the other
conditions of the closing of the Merger.

PUBLIC ANNOUNCEMENTS. So long as the Merger Agreement is in effect, the
Company, on the one hand, and Parent and Purchaser, on the other, have agreed
not to issue or cause the publication of any press release or any other
announcement with respect to the Offer or the Merger or the transactions
contemplated thereby without the consent of the other party (such consent not to
be unreasonably withheld or delayed), except where such release or announcement
is required by applicable law or pursuant to any applicable listing agreement
with, or rules or regulations of, any stock exchange on which shares of the
capital stock of the Company or Tyco, as the case may be, are listed or the
NASD, or other applicable securities exchange, in which case the parties will
consult prior to making the announcement.

TERMINATION; FEES. The Merger Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval by the shareholders of
the Company of the Merger herein:

(a) by mutual written consent of Parent and the Company;

(b) by either Parent or the Company if any Governmental Authority shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the
transactions contemplated by the Merger Agreement and such order, decree or
ruling or other action shall have become final and nonappealable;

(i) the Company shall have breached or failed to perform in any
material respect any of its covenants or other agreements contained in
the Merger Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within five days after the giving of
written notice thereof to the Company (but not later than the expiration
of the 20 business day period provided for the Offer above);

(ii) any representation or warranty of the Company shall not have
been true and correct when made (without for this purpose giving effect
to qualifications of materiality contained in such representation and
warranty), if such failure to be true and correct, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect;

(iii) any representation or warranty of the Company shall cease to be
true and correct at any later date (without for this purpose giving
effect to qualifications of materiality contained in such representation
and warranty) as if made on such date (other than representations and
warranties made as of a specified date) other than as a result of a
breach or failure to perform by the Company of any of its covenants or
agreements under the Merger Agreement if such failure to be true and
correct, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect; PROVIDED, HOWEVER, that such
representation or warranty is incapable of being cured or has not been
cured within five days after the giving of written notice thereof to the
Company (but not later than the expiration of the 20 business day period
provided for the Offer above);

PROVIDED, HOWEVER, that the right to terminate the Merger Agreement pursuant
to this clause (c) shall not be available to Parent if Purchaser or any
other affiliate of Parent shall acquire Shares pursuant to the Offer;

(d) by Parent if, whether or not permitted to do so by the Merger
Agreement, (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a

manner adverse to Parent or Purchaser its approval or recommendation of the
Offer or any of the Company Proposals; (ii) the Board of Directors of the
Company or any committee thereof shall have approved or recommended to the
shareholders of the Company any Company Takeover Proposal or Alternative
Transaction; (iii) the Board of Directors of the Company or any committee
thereof shall have approved or recommended that the shareholders of the
Company tender their Shares in any tender or exchange offer that is an
Alternative Transaction; (iv) the Board of Directors of the Company or any
committee thereof shall have taken any position or make any disclosures to
the Company's shareholders permitted pursuant to the "No Solicitation"
provisions of the Merger Agreement described above which has the effect of
any of the foregoing; or (v) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the foregoing actions;

(e) by either Parent or the Company if, as the result of the failure of
the Minimum Condition or any of the other conditions set forth in
Section 15, the Offer shall have terminated or expired in accordance with
its terms without Purchaser having purchased any Shares pursuant to the
Offer, PROVIDED that if the failure to satisfy any conditions set forth in
Section 15 shall be a basis for termination of the Merger Agreement under
any other clause of this section, a termination pursuant to this clause
shall be deemed a termination under such other clause;

(f) by either Parent or the Company if the Offer shall not have been
consummated on or before February 29, 2000, PROVIDED that the right to
terminate the Merger Agreement pursuant to this clause shall not be
available to any party whose failure to perform any of its obligations under
the Merger Agreement results in the failure of the Offer to be consummated
by such time;

(g) by the Company, if Parent or Purchaser shall have breached or failed
to perform in any material respect any of its representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
breach or failure to perform is incapable of being cured or has not been
cured within five days after the giving of written notice thereof to Parent;
or

(h) by the Company, in order to accept a Superior Proposal, PROVIDED
that the Board of Directors of the Company reasonably determines in good
faith (after due consultation with independent counsel, which may be Stoel
Rives LLP), that it is or is reasonably likely to be required to accept such
proposal in order to discharge properly its fiduciary duties; the Company
has given Parent three business days' advance notice of the Company's
intention to accept such Superior Proposal; the Company shall in fact accept
such proposal; the Company shall have paid the fee and expenses contemplated
by the Merger Agreement; and the Company shall have complied in all respects
with the provisions of the section regarding "No Solicitation."

In the event of termination of the Merger Agreement and the abandonment of
the Offer or the Merger, the Merger Agreement (other than certain sections)
shall become void and of no effect with no liability on the part of any party
hereto (or of any of its directors, officers, employees, agents, legal or
financial advisors or other representatives); PROVIDED, HOWEVER, that no such
termination shall relieve any party thereto from any liability for any willful
breach of the Merger Agreement prior to termination. If the Merger Agreement is
terminated as provided herein, each party shall use all reasonable best efforts
to redeliver all documents, work papers and other material (including any copies
thereof) of any other party relating to the transactions contemplated thereby,
whether obtained before or after the execution hereof, to the party furnishing
the same.

The Company agrees that if the Merger Agreement is terminated pursuant to

(i) the provisions described in clause (d) above;

(ii) the provision described in clause (h) above; or

(iii) the provision described in clause (e) or (f) above and, with
respect to this clause (iii), (A) at the time of such termination, there
shall be outstanding a BONA FIDE Company Takeover Proposal which has been
made directly to the shareholders of the Company or has otherwise become
publicly known or there shall be outstanding an announcement by any credible
third party of a BONA FIDE intention to make an Acquisition Proposal (in
each case whether or not conditional and whether or not such proposal shall
have been rejected by the Board of Directors of the Company) or (B) an
Alternative Transaction shall be publicly announced by the Company or any
third party within 12 months following the date of such termination and such
transaction shall at any time thereafter be consummated on substantially the
terms theretofore announced, then the Company shall pay to Parent the sum of
$5 million. Any payment required by this section shall be made as promptly
as practicable but in no event later than two business days following
termination of the Merger Agreement in the case of clause (i) above, upon
termination of the Merger Agreement in the case of clause (ii) above and, in
the case of clause (iii) above, upon consummation of such Company Takeover
Proposal, and shall be made by wire transfer of immediately available funds
to an account designated by Parent.

The Company further agrees that if the Merger Agreement is terminated
pursuant to clause (c)(i) above,

(i) the Company will pay to Parent, as promptly as practicable but in
no event later than two business days following termination of the Merger
Agreement, the amount of all documented and reasonable costs and expenses
incurred by Parent, Purchaser and their affiliates (including but not
limited to fees and expenses of counsel and accountants and out-of-pocket
expenses (but not fees) of financial advisors) in an aggregate amount not to
exceed $500,000 in connection with the Merger Agreement or the transactions
contemplated hereby ("Parent Expenses"); and

(ii) in the event that the Company consummates a Company Takeover
Proposal (whether or not solicited in violation of the Merger Agreement)
which is publicly announced within one year from the date of termination of
the Merger Agreement, the Company will pay to Parent the sum of $5 million,
which payment shall be made not later than two business days following
consummation of such Company Takeover Proposal.

If the Merger Agreement is terminated pursuant to clause (c)(ii), the Company
will pay to Parent, as promptly as practicable but in no event later than two
business days following termination of the Merger Agreement, the Parent
Expenses.

GUARANTEE. Tyco has guaranteed the payment by Purchaser of the Per Share
Amount and any other amounts payable by Purchaser pursuant to the Merger
Agreement and has agreed to cause Purchaser to perform all of its other
obligations under the Merger Agreement in accordance with its terms.

ARRANGEMENTS WITH EXECUTIVE OFFICERS, DIRECTORS OR AFFILIATES OF THE COMPANY

SHAREHOLDER'S AGREEMENT. As an inducement to Parent and the Purchaser
entering into the Agreement with the Company, Robert L. Praegitzer (the
"Shareholder"), who owns approximately 53.0% of the Shares on a diluted basis,
has entered into a Shareholder's Agreement (the "Shareholder's Agreement") with
Parent and the Purchaser.

The following summary of certain provisions of the Shareholder's Agreement,
a copy of which is filed as an exhibit to the Schedule 14D-9, is qualified in
its entirety by reference to the text of the Shareholder's Agreement.

AGREEMENT TO TENDER. The Shareholder has agreed that he shall tender his
Shares in the Offer and that he shall not withdraw any Shares so tendered;
PROVIDED, HOWEVER, that if the Shareholder is unable

to tender any Shares that are pledged to KeyBank National Association
("KeyBank") the Shareholder shall not be obligated to tender such Shares;
PROVIDED FURTHER that the Shareholder shall sell such Shares to Purchaser, and
Purchaser shall purchase such Shares from the Shareholder, at the Per Share
Amount prior to the Effective Time promptly upon termination of the pledge
agreements between the Shareholder and KeyBank relating to such Shares.
Purchaser hereby agrees that, if the Offer is consummated, it will satisfy the
liabilities secured by the pledge of Shares to KeyBank prior to the Effective
Time.

The Shareholder shall tender his Shares (other than the Shares pledged to
KeyBank) not later than fourteen business days following commencement of the
Offer, other than with respect to the Shares subject to the CBL Insured Credit
Facility Agreement (the "CBL Agreement") which shall be tendered not later than
one business day prior to the initially scheduled expiration of the Offer;
PROVIDED, HOWEVER, that if the Shares subject to the CBL Agreement are not
tendered as aforesaid, any damages of Purchaser shall be limited to $5,000,000.

In connection therewith, the Company has agreed with, and covenanted to,
Parent that the Company shall not register the transfer of any certificate
representing any of the Shareholder's Shares, unless such transfer is made to
Parent or the Purchaser or otherwise in compliance with the Shareholder's
Agreement.

GRANT OF IRREVOCABLE PROXY. Subject to the provisions of the pledge
agreements with KeyBank, the Shareholder has irrevocably granted to, and
appointed, Parent and any individual designated by Parent as the Shareholder's
proxy and attorney-in-fact, to vote the Shareholder's Shares, or grant a consent
or approval in respect of the Shares, at any meeting of shareholders of the
Company or in any other circumstances upon which the Shareholder's vote, consent
or other approval is sought, against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's Articles of Incorporation or Bylaws or other proposal
or transaction (including any consent solicitation to remove or elect any
directors of the Company) involving the Company or any of its subsidiaries,
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Offer, the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.

REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER AGREEMENTS. The
Shareholder has made certain representations and warranties in the Shareholder's
Agreement, including with respect to (i) ownership of his Shares, (ii) the
authority to enter into and perform his obligations under the Shareholder's
Agreement and the absence of required consents and statutory or contractual
conflicts or violations, (iii) the absence of liens, claims, security interests,
proxies, voting trusts or other arrangements or any other encumbrances on or in
respect of the Shares, except for those disclosed to Purchaser (iv) finder's
fees, and (v) an acknowledgment of Parent's reliance upon the Shareholder's
execution of the Shareholder's Agreement in entering into, and causing Purchaser
to enter into, the Merger Agreement. In addition, the Shareholder has agreed not
to transfer, or consent to any transfer of any or all of the Shareholder's
Shares or any interest therein (except as contemplated by the Shareholder's
Agreement), enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of his Shares or any interest
therein, grant any proxy, power-of-attorney or other authorization or consent in
or with respect to the Shares or any interest therein except with respect to
election of directors at the Company's annual meeting, deposit the Shares into a
voting trust or enter into a voting arrangement or agreement with respect to the
Shares or take any other action that would in any way restrict, limit or
interfere with its obligations under the Shareholder's Agreement. The
Shareholder has also agreed, directly or indirectly, not to solicit, initiate or
encourage the submission of any Acquisition Proposal or participate in any
discussions or negotiations regarding, or furnish to any person any

information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal.

TERMINATION. The Shareholder's Agreement, and all rights and obligations
thereunder, shall terminate upon the earlier of (a) the date upon which the
Merger Agreement is terminated in accordance with its terms or (b) the date that
Parent or Purchaser shall have purchased and paid for the Shares of the
Shareholder pursuant to the terms of the Shareholder's Agreement; PROVIDED,
HOWEVER, that the termination of the Shareholder's Agreement shall not relieve
any party of liability for breach of such agreement prior to its termination.

OTHER AGREEMENTS. In November 1995 the Company entered into an employment
agreement with Robert L. Praegitzer, providing an annual base salary of $250,000
with increases over time, and eligibility for bonuses and other Company
benefits. Mr. Praegitzer's employment agreement is of an indefinite duration.

In August 1996, the Company entered into employment agreement with Robert J.
Versiackas providing for annual base salary of $130,000 with eligibility for
bonuses and other Company benefits. If at the end of each quarter during the
first two years of this agreement the total salary and bonus paid to
Mr. Versiackas is less than an annualized rate of $165,000, the Company shall
pay Mr. Versiackas an amount equal to the difference. Additionally,
Mr. Versiackas received options to acquire 16,043 shares of Common Stock at a
price of $13.125 per share. Upon termination, Mr. Versiackas is entitled to all
payments customary under Company policies. The agreement with Mr. Versiackas may
be terminated by either party with or without cause upon thirty (30) days
written notice (or, in the case of termination by the Company, with payment of
sixty (60) days of base compensation in lieu of thirty (30) days notice).

Mr. Versiackas has also entered into an agreement with the Company
restricting his ability to compete with the Company until two years after
termination of his employment and prohibiting disclosure of confidential
information and solicitation of the Company's customers or employees.

In addition, in April 1999 Mr. Versiackas entered into an agreement with the
Company which provides that, upon a change of control of the Company, if
Mr. Versiackas' employment is terminated within one year after the change of
control, Mr. Versiackas' stock options will become fully exercisable, unless the
change in control transaction would otherwise be accounted for under the pooling
of interest method. In addition, if Mr. Versiackas' employment is terminated
other than for cause within 12 months of a change of control, he will be
entitled to receive an amount equal to 6 months of his base salary within
30 days of termination.

In March 1998 the Company entered into an agreement with James M. Buchanan,
the Company's Senior Vice President of Sales and Marketing, providing for an
annual base salary of $185,000 with eligibility for bonuses and other Company
benefits.

Mr. Buchanan has also entered into an agreement with the Company in the
event of a change of control. The agreement provides that, upon a change of
control of the Company, if Mr. Buchanan's employment is terminated within one
year after the change of control, Mr. Buchanan's stock options will become fully
exercisable, unless the change in control transaction would otherwise be
accounted for under the pooling of interest method. In addition, if
Mr. Buchanan's employment is terminated other than for cause within 12 months of
a change of control, he will be entitled to receive an amount equal to
18 months of his base salary within 30 days of termination, insurance coverage
and car allowance for 18 months following termination.

would be 75% of the public market price of the Company's common stock as quoted
on the Nasdaq National Market System. On December 22, 1998, the date on which
the purchase price for the shares was established, the closing market price for
the Company's common stock was $6.9375 per share. Accordingly, the purchase
price for the shares was $520,350. Under the terms of the agreement,
Mr. Bergeron must pay the Company the entire purchase price, without interest,
on or before January 1, 2006. The Company agreed to indemnify Mr. Bergeron for
any state or federal income tax liability for which he may become liable on
account of interest imputed on the deferred payment of the purchase price.
Mr. Bergeron has the option to require the Company to repurchase the shares from
him during January 2006 for $420,312.50. This transaction closed February 18,
1999.

Each of Mr. Bergeron, Gregory L. Lucas, Senior Vice President of Technology
of the Company, and Robert G. Schmelzer, Senior Vice President of Administration
of the Company, has also entered into an agreement with the Company in the event
of a change of control. The agreement provides that, upon a change of control of
the Company, if such officer's employment is terminated within one year after
the change of control, such officer's stock options will become fully
exercisable, unless the change in control transaction would otherwise be
accounted for under the pooling of interest method. In addition, if such
officer's employment is terminated other than for cause within 12 months of a
change of control, he will be entitled to receive an amount equal to 6 months of
his base salary within 30 days of termination.

The Company has leased its Dallas warehouse facility from Robert L.
Praegitzer, with the lease payments totaling $160,800 for the year end June 30,
1999. The lease rates for the warehouse facility were determined by
Mr. Praegitzer, who was the sole shareholder of the Company at the time of
determination. The Board of Directors of the Company unanimously concluded that
these rates were comparable to rates that could have been obtained from an
independent party.

In June 1999 Robert L. Praegitzer, Chairman of the Board and Chief Executive
Officer of the Company, pledged an aggregate of 2,656,500 shares of the common
stock of the Company he owns to KeyBank as collateral to secure the Company's
credit facility with the bank. Mr. Praegitzer did not receive any direct or
indirect compensation for this transaction.

Theodore L. Stebbins, a director of the Company, is a managing director of
Adams, Harkness & Hill ("Adams Harkness"), an investment banking firm. The
Company has retained Adams Harkness to provide financial advisory services in
connection with strategic alternatives that the Company had been considering,
including the transactions contemplated by the Merger Agreement. See Item 5.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

RECOMMENDATION OF THE BOARD OF DIRECTORS. THE BOARD HAS DETERMINED THAT THE
TYCO OFFER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF
COMPANY. THE BOARD RECOMMENDS THAT ALL HOLDERS OF COMMON STOCK ACCEPT THE TYCO
OFFER AND TENDER ALL OF THEIR COMMON STOCK PURSUANT TO THE TYCO OFFER. The
Board's determination and recommendation were made by a unanimous vote of the
directors (with Mr. Stebbins abstaining because he is a managing director of
Adams Harkness, which is entitled to a fee payable in part upon the completion
of a transaction such as that presented by the Tyco Offer) at the Board's
October 25, 1999 meeting.

The Board's recommendation is based in part on the oral opinion delivered by
Adams Harkness to the Board on October 25, 1999, that, as of such date, the cash
consideration to be received by the holders of Common Stock pursuant to the Tyco
Offer is fair to such holders from a financial point of view. Adams Harkness
subsequently confirmed its opinion in writing.

A copy of the letter to Company's shareholders communicating the Board's
recommendation is filed as Exhibit 5 to this Schedule and is incorporated herein
by reference.

BACKGROUND AND REASONS FOR THE RECOMMENDATION. In this section, references
to Tyco are references to Tyco's United States subsidiaries and affiliates
including Tyco (US) International Inc. ("Tyco (US)") and Tyco Printed Circuit
Group. Tyco, the Bermuda company, is referred to in this section as Tyco
International Ltd.

In April 1999, Praegitzer began to explore strategic alternatives, including
acquisition possibilities. At that time, Praegitzer retained Adams, Harkness &
Hill, Inc. and McDonald Investments Inc. to assist it in this broad-ranging
exploration. McDonald and KeyBank, the Company's principal creditor, are both
wholly owned subsidiaries of KeyCorp. Beginning in late April 1999, Adams
Harkness and McDonald contacted not less than 24 companies to gauge their
interest in potential strategic business relationships and business combinations
with Praegitzer. As a result of these contacts, Praegitzer entered into
discussions with four companies concerning a possible transaction.

On April 27, 1999, McDonald contacted a private equity investment firm
("Equity Investment Company A") to discuss a possible transaction. On April 28,
1999, Adams Harkness contacted another private equity investment firm ("Equity
Investment Company B") and Tyco for the same purpose.

On April 29, 1999, Equity Investment Company A contacted McDonald indicating
interest in pursuing a possible transaction. On the same day, Steve Gardner,
President of Tyco Printed Circuit Group, contacted Adams Harkness, indicated
that Tyco was interested in pursuing a transaction and instructed Adams Harkness
to contact Brian Roussell, Vice President of Finance and Administration of Tyco
Printed Circuit Group Inc. Adams Harkness contacted Mr. Roussell on that same
day regarding a possible transaction.

From May 3, 1999 through May 9, 1999, Tyco Printed Circuit Group and
Praegitzer negotiated a confidentiality agreement, which was signed on May 10,
1999, at which time each party commenced due diligence on the other. During the
week of May 3, 1999, Equity Investment Company A and Praegitzer signed
confidentiality agreements and commenced due diligence on each other.

On May 5, 1999, Praegitzer and Equity Investment Company B began negotiating
a confidentiality agreement, which was signed on May 13, 1999.

On May 12, 1999, Equity Investment Company A, Praegitzer and their
respective advisers met at the offices of Praegitzer's legal advisers in
Portland, Oregon to discuss due diligence matters. Additional due diligence
discussions were held on May 14, 1999 and during the weeks of May 16, 1999 and
May 24, 1999.

On May 17, 1999, Equity Investment Company B scheduled a meeting with
Mr. Bergeron to discuss a possible transaction.

On May 19 and 20, 1999, Tyco, Praegitzer and their respective advisers held
meetings at Praegitzer's headquarters offices in Tualatin, Oregon and at the
offices of Praegitzer's legal advisers in Portland, Oregon to continue
discussing a possible business combination. Praegitzer's and Tyco's respective
management and advisers participated in these meetings. The parties held
preliminary discussions about the non-financial aspects of a potential
acquisition of Praegitzer by Tyco, including organization, facilities, products
and customers.

On May 20, 1999, representatives of Equity Investment Company B met with
Mr. Bergeron in Dallas, Oregon and conducted due diligence.

On May 24, 1999, Equity Investment Company B contacted Adams Harkness and
asked for additional due diligence information. On June 1, 1999, Equity
Investment Company B informed Adams Harkness that, although Equity Investment
Company B was interested in pursuing a possible business combination, for
financing and timing reasons it wished to delay discussions for at least three
months.

On June 3, 1999, Tyco presented Praegitzer with a non-binding indication of
interest letter, suggesting a cash price of $7.25 to $8.00 per share for the
acquisition of all shares of Praegitzer common stock. From June 4, 1999 through
June 21, 1999, the parties exchanged additional information and internally
reviewed the potential benefits of a transaction.

Also on June 3, 1999, Equity Investment Company A indicated it was
considering a recapitalization transaction that would value Praegitzer's common
stock at approximately $6.00 per share, but that Equity Investment Company A
required additional due diligence before it would be in the position to finalize
an offer. Equity Investment Company A conducted further due diligence on
June 4, 1999 and during the week of June 6, 1999.

On June 14 and 15, and also from June 21 to June 24, 1999, representatives
of Tyco's subsidiaries conducted due diligence at the offices of Praegitzer's
legal advisers in Portland, Oregon.

On June 16, 1999, Equity Investment Company A notified McDonald that Equity
Investment Company A was prepared to enter into a recapitalization transaction
with Praegitzer that would value Praegitzer's common stock at $4.00 per share.

On June 20, 1999, McDonald informed Equity Investment Company A that
Praegitzer had decided to postpone any decision on the proposal for at least two
months. On June 22, 1999, the president of a printed circuit board manufacturer
(the "PCB Company") contacted Mr. Bergeron about a possible business
combination.

On June 24, 1999, representatives of the PCB Company and Praegitzer met to
discuss a possible business combination. The PCB Company and Praegitzer entered
into confidentiality agreements and completed due diligence on June 28, 1999.

On June 29, 1999, Richard D. Malloy, Director of Mergers and Acquisitions of
Tyco (US), orally informed Praegitzer that the proposal in its June 3, 1999
letter was no longer feasible due to valuation issues and concern about the
status of Praegitzer's credit arrangements. Mr. Malloy indicated Tyco was still
interested in pursuing a transaction, and suggested postponing further
discussion until Praegitzer's circumstances were clarified.

Also on June 29, 1999, the PCB Company indicated it would submit a business
combination proposal on July 2, 1999, but on July 1, 1999, the PCB Company
informed Praegitzer that no proposal would be forthcoming on July 2, 1999. The
PCB Company requested more time to consider alternatives and to conduct
additional due diligence. On July 21, 1999, the PCB Company informed McDonald
that the PCB Company might be interested only in purchasing one or two of
Praegitzer's manufacturing facilities, but the PCB Company never submitted any
transaction proposal for Praegitzer's consideration.

On August 5, 1999, Praegtizer announced its financial results for the fourth
quarter and fiscal year ended June 30, 1999. For the fourth quarter, Praegitzer
reported a modest increase in revenue from the prior year and a restructuring
that resulted in a pretax charge of $21.4 million. Praegitzer also reported
that, at June 30, 1999 it was not in compliance with all the covenants of its
major credit agreements, including its revolving credit agreement with KeyBank.
Praegitzer reported that its business and financial condition could be
materially and adversely effected if it were unable to reach agreements with its
creditors.

On August 31, 1999, Mr. Bergeron asked Adams Harkness to contact Tyco to
recommence transaction discussions. Adams Harkness left a message with Tyco on
September 1, 1999, and on September 2, 1999 Mr. Malloy informed Adams Harkness
that Tyco would consider recommencing discussions.

On September 7, 1999, Mr. Malloy called Mr. T. L. Stebbins, a director of
Praegitzer and a managing director at Adams Harkness, and indicated Tyco was
interested in recommencing discussions

with Praegitzer, with the understanding that Tyco was prepared to offer no more
than $5.50 per share for the acquisition of all shares of Praegitzer common
stock until Praegitzer's September 1999 financial statements were available.
Upon receipt of this information, Mr. Bergeron instructed Adams Harkness to
cease communications with Tyco.

On September 10, 1999, Praegitzer's commercial lenders requested Praegitzer
renegotiate its credit arrangements. Following this request, Robert Praegitzer,
Chairman of the Board and Chief Executive Officer of Praegitzer, and
Mr. Bergeron convened a conference call among themselves, Adams Harkness and
McDonald during which Mr. Praegitzer and Mr. Bergeron requested that Adams
Harkness and McDonald contact a number of the original companies who Adams
Harkness and McDonald thought may be interested in purchasing Praegitzer at a
lower price. Mr. Praegitzer and Mr. Bergeron also asked Adams Harkness to
contact Tyco to inform Tyco that Praegitzer was interested in recommencing
transaction discussions at a price per share to be determined after Tyco had
completed its due diligence.

On September 13, 1999, Mr. Stebbins discussed Praegitzer's position with
Mr. Malloy, who requested updated due diligence materials and financial
statements.

On September 15, 1999, Adams Harkness contacted Investment Company Company B
to gauge its interest in recommencing discussions concerning a possible
transaction.

On September 16, 1999, the Praegitzer board of directors met to discuss the
status of negotiations with Tyco.

On September 20, 1999, Mr. Malloy indicated Tyco's interest in proceeding
with a transaction to Adams Harkness. Mr. Malloy and Mr. Bergeron arranged
several due diligence meetings at Praegitzer's headquarters offices in Tualatin,
Oregon over the next two weeks.

On September 21, 1999, the management of Praegitzer and its advisers met at
Praegitzer's headquarters offices in Tualatin, Oregon with representatives of
Tyco to discuss a possible business combination. On the same day, Equity
Investment Company B indicated to Adams Harkness that Equity Investment Company
B was interested in pursuing discussions, but that Equity Investment Company B
was now interested only in purchasing certain Praegitzer manufacturing
facilities rather than the entire company.

On September 23, 1999, the Praegitzer Board met to approve the delayed
filing with the Commission of its Annual Report on Form 10-K for the year ended
June 30, 1999 and to explore strategic alternatives with McDonald and Adams
Harkness.

On September 29, 1999, Adams Harkness contacted Tyco to discuss the status
of Tyco's expected offer.

In late September 1999, McDonald contacted Equity Investment Company A to
determine Equity Investment Company A's interest in recommencing discussions
concerning a possible transaction with Praegitzer. On October 7, 1999, Equity
Investment Company A, Praegitzer and their respective advisers met at
Praegitzer's headquarters offices in Tualatin, Oregon to discuss a possible
transaction. At that meeting Equity Investment Company A presented Praegitzer
with a letter of interest for the purchase solely of Praegitzer's Dallas and
Fremont manufacturing facilities, conditioned on satisfactory financing
arrangements and additional due diligence.

On October 12, 1999, the Company executed a Deferral Loan and Lease
Modification Agreement with substantially all of its lenders and lessors,
thereby eliminating the existing covenant defaults and the prospect of immediate
acceleration of the amounts due to those creditors.

Also on October 12, 1999, Equity Investment Company B informed Adams
Harkness that Equity Investment Company B was no longer interested in pursuing
any acquisition discussions.

On October 13, 1999, the Company filed with the Commission its Annual Report
on Form 10-K for the fiscal year ended June 30, 1999, which was due to be filed
September 28, 1999.

Also on October 13, 1999, Tyco delivered an acquisition proposal to
Praegitzer. Under the terms of the proposal, Tyco would acquire Praegitzer by
means of a cash tender offer, at a price of $5.50 per share of Praegitzer common
stock. Representatives of Equity Investment Company A completed additional due
diligence on the same day.

On October 15, 1999, the Praegitzer board met with Adams Harkness at
Praegitzer's headquarters offices in Tualatin, Oregon to review Tyco's proposal
and discuss tender offer procedures.

Also on October 15, 1999, Tyco International Ltd.'s Board of Directors
approved the cash tender offer at a price of $5.50 per share of Praegitzer
common stock.

On October 16, McDonald contacted Equity Investment Company A to inform
Equity Investment Company A that Praegitzer preferred a transaction pursuant to
which all of the common stock of Praegitzer would be acquired, rather than an
asset purchase of only two of Praegitzer's facilities. McDonald also informed
Equity Investment Company A that Praegitzer was seeking a stock transaction that
valued its common stock at $6.00 per share or greater. On October 17, 1999,
Equity Investment Company A informed McDonald that Equity Investment Company A
was not interested in purchasing all of the stock of Praegitzer, but was only
interested in purchasing the two manufacturing facilities.

On October 18, 1999, Mr. Stebbins informed Tyco that Praegitzer was
entertaining other potential proposals for certain Praegitzer assets. Adams
Harkness requested Tyco propose a transaction either at a higher price per share
or structured differently. On October 20, 1999, Irving Gutin, Senior Vice
President of Tyco (US), and Mr. Malloy declined to modify Tyco's proposal.

On October 19, 1999, Tyco, Praegitzer and Adams Harkness convened several
conference calls to discuss Tyco's proposal and the transaction schedule.

On October 20, 1999, Mr. Bergeron verbally accepted Tyco's non-binding
written offer on Praegitzer's behalf and requested Mr. Malloy supply a draft
merger agreement, which Praegitzer received from Tyco's legal counsel on
October 22, 1999.

From October 22 through October 26, 1999, Tyco, Praegitzer and their
respective advisers negotiated the terms and provisions of the merger agreement
and ancillary documents.

The Praegitzer board of directors met on October 25, 1999. At the meeting

- Praegitzer's legal advisers and management updated the Praegitzer board on
the status of negotiations with Tyco and informed the board that all
substantive issues had been resolved,

- Praegitzer's legal advisers made a presentation to the Praegitzer board
regarding the fiduciary duties of the Praegitzer board,

- Praegitzer's legal advisers reviewed with the Praegitzer board the terms
of the proposed merger agreement with Tyco and the regulatory filings and
approvals that would be required in connection with the proposed
transaction,

- Adams Harkness made a financial presentation to the Praegitzer board and

- Adams Harkness rendered its opinion to the effect that, as of that date,
the Per Share Amount was fair to Praegitzer shareholders from a financial
point of view.

Afterwards, the Praegitzer board by a unanimous vote (with Mr. Stebbins
abstaining because he is a managing director of Adams Harkness, which is
entitled to a fee payable in part upon the completion of a transaction such as
that presented by Tyco) determined the merger was fair to, and in the best
interests of, Praegitzer and its shareholders and

- unanimously approved (again with Mr. Stebbins abstaining) the terms of the
Merger Agreement and the transactions contemplated by the agreement, and

- authorized the execution of the Merger Agreement and recommended that
Praegitzer shareholders tender all their shares in the Tyco Offer.

On October 25, 1999 the closing price of Praegitzer common stock was $4.75
per share.

On October 26, 1999 all documentation, including the disclosure schedules of
Praegitzer, were finalized to the satisfaction of the designated officers, and
all conditions with respect to the execution of the Merger Agreement were
satisfied. Late in the morning of that day, the Praegitzer board met to receive
an update from Mr. Bergeron as to the status of the transaction. That afternoon

- Tyco and Praegitzer executed and delivered the Merger Agreement,

- the majority shareholder of Praegitzer executed and delivered a
shareholder agreement agreeing to tender the shareholder's shares in the
Tyco Offer and

- Tyco and Praegitzer publicly announced the signing of the Merger
Agreement.

In reaching the conclusions and recommendations described above, the Board
considered the opportunity the Merger would provide to secure a premium for
shareholders over recent market prices of Common Stock. In comparing this
premium with the return on shareholder investment believed to be achievable
through future appreciation of the Common Stock if the Company remained an
independent company, the Board considered various factors affecting the
Company's future financial performance and prospects. These factors included:

- increasing consolidation in the industry and the Company's difficulty in
competing with larger companies with substantially greater resources and
name recognition than the Company,

- the Company's ability to continue to attract experienced and motivated
personnel in a highly competitive marketplace and

- the Company's ability to service its debt obligations.

In the course of its deliberations, the Board considered, among other
things:

- historical information concerning the Company's business, prospects,
financial performance and condition, operations, technology, management
and competitive position,

- current financial market conditions and historical market prices,
volatility and trading information with respect to the Common Stock,

- the Per Share Amount to be received by the holders of Common Stock in the
Tyco Offer and the Merger and a comparison of comparable business
combination transactions,

- the strong reputation and financial condition of Tyco,

- the belief that the terms of the Merger Agreement, including the parties'
representations, warranties and covenants and the conditions to their
respective obligations, are reasonable,

- the fact that the Merger Agreement permits the Board to furnish
information to, or to engage in negotiations with, third parties and to
terminate the Merger Agreement in certain circumstances, and the belief of
the Board that the payment by the Company of a termination fee of
$5 million to Purchaser in the event of such a termination would not
unreasonably discourage third parties from making a superior proposal,

- the business and financial prospects of the Company as an independent
company,

- the potential for third parties to enter into strategic relationships with
or to acquire the Company if the Company did not enter into the Merger
Agreement,

- the fact that the Company had contact with several alternative parties to
discuss a possible acquisition and that although these parties were each
afforded ample time to submit an offer to acquire the entire Company, none
of these parties made an acceptable offer,

- the possibility that the Tyco Offer or the Merger might not be completed
and the effect of the public announcement of the Tyco Offer and Merger on
(a) the Company's sales, operating results and stock price and (b) the
Company's ability to attract and retain key management, marketing and
technical personnel,

- the financial effect of the Merger and

- the opinion of Adams Harkness that, as of October 25, 1999 and subject to
and based on the matters described in its opinion, the Per Share Amount to
be received by the holders of shares of Common Stock in the Tyco Offer and
the Merger was fair from a financial point of view to the Company
shareholders.

The Board concluded that the benefits of the merger outweigh any of the
potentially negative factors considered.

The discussion above sets forth the material information and factors
considered by the Board in consideration of the Merger Agreement. In view of the
wide variety of factors considered, the Board did not find it practicable to,
and did not, make specific assessments of, quantify or otherwise attempt to
assign relative weights to the specific factors considered in reaching its
determination. The determination to approve the Merger was made after
consideration of all of the factors as a whole. In addition, individual members
of the Board may have given different weights to different factors.

ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

The Company retained Adams Harkness (under an engagement letter dated
April 21, 1999) and retained McDonald (under an engagement letter dated
April 26, 1999) to provide it with financial advisory services in connection
with the possible sale of the Company. The Board selected Adams Harkness and
McDonald to act as the Company's financial advisor, based on their
qualifications, expertise and reputation and its knowledge of the business and
affairs of the Company.

For these financial advisory services, the Company agreed to pay Adams
Harkness and McDonald a transaction fee of 1% of the Transaction Value less
$350,000 less any remaining Expense Credit. For purposes of the engagement
letters, "Transaction Value" means (a) the total amount of cash paid, directly
or indirectly, for the assets, business or capital stock of the Company,
(b) the fair market value of any assets, securities or other property or rights
transferred, directly or indirectly, in payment for the assets, business or
stock of the Company, except that debt instruments will be valued at their face
amount, (c) the principal amount of any indebtedness for borrowed money
appearing on the most recent balance sheet of the Company before the completion
of the transaction and (d) the aggregate amount of any dividends or other
distributions declared by the Company with respect to its stock after the date
of the engagement letters, other than normal recurring cash dividends. For
purposes of the engagement letters, "Expense Credit" means the credit for all
expenses incurred in connection with the engagement against the $125,000 paid to
McDonald under a previous engagement. This transaction fee becomes payable by
the Company upon the successful completion of the Tyco Offer. In addition, the
Company has agreed to indemnify Adams Harkness and McDonald and their
affiliates, their respective directors, officers, agents and employees and each
person, if any, controlling Adams Harkness and McDonald or any of their
affiliates against certain liabilities and expenses, including certain
liabilities under the federal securities laws, arising out of the engagement.
Forty percent of the transaction fee is payable to Adams Harkness, and the
balance is payable to McDonald.

Under an engagement letter dated September 27, 1999, the Company retained
Adams Harkness to provide it with a financial fairness opinion in connection
with the possible sale of the Company. The Board selected Adams Harkness to act
as the Company's financial advisor based on Adams Harkness' qualifications,
expertise and reputation and its knowledge of the business and affairs of the
Company.

For this financial fairness opinion, the Company agreed to pay Adams
Harkness a fee of $350,000, $50,000 of which was payable upon delivery of Adams
Harkness' oral opinion to the Board, and the remainder of which will become
payable upon completion of the Merger. In addition, the Company has agreed to
reimburse Adams Harkness for its expenses related to this engagement and to
indemnify Adams Harkness and its affiliates, their respective directors,
officers, agents and employees and each person, if any, controlling Adams
Harkness or any of its affiliates against certain liabilities and expenses,
including certain liabilities under the federal securities laws, arising out of
Adams Harkness' engagement.

Theodore L. Stebbins, a director of Company, is a managing director of Adams
Harkness.

Neither the Company nor any person acting on its behalf intends to employ,
retain or compensate any other person to make solicitations or recommendations
to security holders on their behalf concerning the Tyco Offer.

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.

(a) Transactions in Securities.

To the knowledge of Company, except as otherwise set forth in this Schedule,
no transactions in the Common Stock have been effected during the past 60 days
by Company or by any executive officer, director, affiliate or subsidiary of
Company.

(b) Intent to Tender.

To the knowledge of Company, all of its executive officers, directors,
affiliates or subsidiaries currently intend to tender pursuant to the Tyco Offer
all shares of Common Stock that are held of record or beneficially owned by such
persons.

ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.

(a) Negotiations.

Except as set forth in this Schedule, no negotiation is being undertaken or
is underway by Company in response to the Tyco Offer which relates to or would
result in (i) an extraordinary transaction, such as a merger or reorganization,
involving Company or any subsidiary thereof; (ii) a purchase, sale or transfer
of a material amount of assets by Company or any subsidiary thereof; (iii) a
tender offer for or other acquisition of securities by or of Company; or
(iv) any material change in the present capitalization or dividend policy of
Company.

(b) Transactions and Other Matters.

Except as set forth in this Schedule, there are no transactions, Board
resolutions, agreements in principle or signed contracts in response to the Tyco
Offer that relate to or would result in one or more of the events referred to in
Item 7(a) above.

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.

Not applicable.

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------

1 Agreement and Plan of Merger dated as of October 26, 1999
among Offeror, Parent and the Company, with the Guarantee of
Tyco
2 Shareholder's Agreement dated as of October 26, 1999 among
Purchaser, Offeror and Robert L. Praegitzer
3 Engagement Letter dated April 21, 1999 between the Company
and Adams Harkness
4 Engagement Letter dated September 27, 1999 between the
Company and Adams Harkness
5 Pledge Agreement dated June 11, 1999 between Robert L.
Praegitzer and Key Bank National Association
6 Pledge Agreement dated June 11, 1999 between Robert L.
Praegitzer and Key Bank National Association
7 Employment Agreement between the Company and Robert L.
Praegitzer dated November 17, 1995 (Incorporated by
reference to Exhibit 10.20 of the Company's Registration
Statement on Form S-1, Registration No. 333-01228)
8 Employment Agreement between the Company and Robert J.
Versiackas dated August 26, 1996 (Incorporated by reference
to Exhibit 10.19 of the Company's annual Report on Form 10-K
for the Year Ended June 30, 1998 (the "1998 Form 10-K")
9 Offer Letter between the Company and James M. Buchanan dated
March 24, 1998 (Incorporated by reference to Exhibit 10.20
of the 1998 Form 10-K)
10 Stock Purchase Agreement between the Company and Matthew J.
Bergeron dated December 22, 1998 (Incorporated by reference
to Exhibit 10 of the Company's Quarterly Report on Form 10-Q
for the Quarter Ending December 31, 1998)
11 Change of Control Agreement between the Company and Matthew
J. Bergeron dated April 16, 1999
12 Change of Control Agreement between the Company and Robert
Versiackas dated April 16, 1999
13 Change of Control Agreement between the Company and James
Buchanan dated April 16, 1999
14 Change of Control Agreement between the Company and Robert
Schmelzer dated April 16, 1999
15 Change of Control Agreement between the Company and Gregory
Lucas dated April 16, 1999
16 Noncompetition Agreement between the Company and Robert J.
Versiackas
17 Press Release issued by the Company on October 26, 1999
18 Form of Letter to Shareholders dated November 1, 1999*
19 Opinion of Adams, Harkness & Hill, Inc.* (attached as Annex
I hereto)
20 Excerpts from the Company's Proxy Statement for its 1999
Annual Meeting of Shareholders dated October 25, 1999.*
(attached as Annex II hereto)

- ------------------------

* Included in copies mailed to shareholders

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

PRAEGITZER INDUSTRIES, INC.

By: /s/ MATTHEW J. BERGERON
---------------------------------------------------------------------------
Matthew J. Bergeron
President

Dated: November 1, 1999

ANNEX I
ADAMS, HARKNESS & HILL, INC.

October 25, 1999

Board of Directors

Praegitzer Industries, Inc.

19801 SW 72nd Avenue

Tualatin, OR 97062

Attention: Robert L. Praegitzer--Chairman of the Board and Chief Executive
Officer

Members of the Board:

You have requested our opinion (the "Fairness Opinion") as to the fairness, from
a financial point of view, to the holders of common stock, no par value (the
"Common Stock"), of Praegitzer Industries, Inc. (the "Company") of the
consideration proposed to be received by such stockholders pursuant to an
Agreement and Plan of Merger (the "Merger Agreement"), to be entered into in
substantially the form of the draft Merger Agreement dated October 25, 1999,
among the Company, Sigma Circuits, Inc. (the "Parent"), an indirect wholly owned
subsidiary of Tyco International Ltd., and T Merger Sub (OR), Inc., a wholly
owned subsidiary of the Parent (the "Sub"). The draft Merger Agreement provides
that the Sub will commence a tender offer (the "Offer") for any and all
outstanding shares of Common Stock at a price of $5.50 per share net to the
seller in cash. Assuming the Sub acquires at least fifty-one percent (51%) of
the Common Stock in the Offer and the Company satisfies certain other conditions
as set forth in the Merger Agreement, a merger of the Sub with and into the
Company (the "Merger") will occur, and stockholders of the Company who do not
tender their shares in the Offer will receive $5.50 per share net to the seller
in cash in the Merger. We refer to the Offer and the Merger together as the
"Transaction."

Adams, Harkness & Hill, Inc., as part of its investment banking activities, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. We have acted as financial advisor
to the Board of Directors of the Company in connection with the proposed
Transaction and will receive fees for our services, including a fee payable upon
rendering this opinion and a fee payable upon the closing of the Transaction. We
have in the past provided investment banking and financial advisory services to
the Company for which we have received various fees. We also serve as a market
maker for the Common Stock, and, in the ordinary course of our business, may
trade in the Common Stock for our own account and for the accounts of customers.
Accordingly, we may at any time hold a long or short position in the Common
Stock.

We are expressing no opinion as to what the value of the Common Stock will be
when purchased in the Offer or when converted in the Merger or the prices at
which the Common Stock will actually trade at any time. Our Fairness Opinion as
expressed herein is limited to the fairness, from a financial point of view, as
of the date hereof, of the consideration to be received by the holders of the
Common Stock pursuant to the Merger Agreement and does not address the Company's
underlying business decision to engage in the Transaction.

In developing our Fairness Opinion, we have, among other things: (i) reviewed
the Company's Annual Reports, Forms 10-K and related financial information for
the three fiscal years ended June 30, 1999; (ii) analyzed certain internal
financial statements and other financial and operating data concerning the
Company, including forecasts, prepared by members of senior management of the
Company which we discussed and reviewed with members of the senior management of
the Company; (iii) conducted due

I-1

diligence discussions with members of senior management of the Company and
Parent, and discussed with members of senior management of the Company and
Parent their views regarding the business and prospects of the Company and
Parent and financial and operating benefits arising from the Transaction;
(iv) reviewed the historical market prices and trading activity for the Common
Stock and compared them with those of certain publicly traded companies we
deemed to be relevant and comparable to the Company; (v) compared the results of
operations of the Company with those of certain companies we deemed to be
relevant and comparable to the Company; (vi) compared the financial terms of the
Transaction with the financial terms of certain other mergers and acquisitions
we deemed to be relevant and comparable to the Transaction; (vii) participated
in certain discussions among representatives of the Company and Parent and their
financial and legal advisors; (viii) reviewed a draft of the Merger Agreement
dated October 25, 1999; and (ix) reviewed such other financial studies and
analyses and performed such other investigations and took into account such
other matters as we deemed necessary, including our assessment of general
economic, market and monetary conditions as of the date hereof.

Our Fairness Opinion as expressed herein is limited to the fairness, from a
financial point of view, as of the date hereof, of the proposed consideration
and does not address the Company's underlying business decision to engage in the
Transaction. Our Fairness Opinion does not constitute a recommendation to any
shareholder of the Company as to how such shareholder should vote on any matter
relating to the Transaction. We are expressing no opinion as to the value of the
Company's common stock at the time of our analysis or at any time prior to and
including the effective date of the Transaction. In connection with our review
and arriving at our Fairness Opinion, we have not independently verified any
information received from the Company, have relied on such information, and have
assumed that all such information is complete and accurate in all material
respects. With respect to any forecasts reviewed relating to the prospects of
the Company, we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the Company's
senior management as to the future financial performance of the Company. Our
Fairness Opinion is rendered on the basis of securities market conditions
prevailing as of the date hereof and on the conditions and prospects, financial
and otherwise, of the Company as known to us on the date hereof. We have not
conducted, nor have we received copies of, any independent valuation or
appraisal of any of the assets of the Company. In addition, we have assumed,
with your consent, that any material liabilities (contingent or otherwise, known
or unknown) of the Company are as set forth in the consolidated financial
statements of the Company.

It is understood that this letter is for the information of the Board of
Directors of the Company and may not be used for any other purpose without our
prior written consent, except that this opinion may be included in its entirety
in any filing made by the Company with the Securities and Exchange Commission
with respect to the transactions contemplated by the Merger Agreement.

I-2

Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the consideration to be received by the holders of Common Stock pursuant
to the Merger Agreement is fair, from a financial point of view, to such
holders.

Sincerely,
ADAMS, HARKNESS & HILL, INC.
By: /s/ JOSEPH W. HAMMER
----------------------------------------------------------------------
Joseph W. Hammer
Managing Director

I-3

ANNEX II

PRAEGITZER INDUSTRIES
19801 SW 72(ND) AVENUE
TUALATIN, OREGON 97062

INFORMATION PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER

The following information is being furnished to holders of the common stock
(the "Shares"), of Praegitzer Industries, Inc., an Oregon corporation (the
"Company"), in connection with the possible designation by Sigma Circuits, Inc.
("Sigma"), a Delaware corporation and an indirect wholly owned subsidiary of
Tyco International Ltd. ("Tyco"), a Bermuda company, of at least a majority of
the members of the Board of Directors of the Company pursuant to the terms of an
Agreement and Plan of Merger, dated as of October 26, 1999 (the "Merger
Agreement"), by and among the Company, Sigma and T Merger Sub (OR), Inc.
("Purchaser"), an Oregon corporation, with the guarantee of Tyco. THIS
INFORMATION IS BEING PROVIDED SOLELY FOR INFORMATIONAL PURPOSES AND NOT IN
CONNECTION WITH A VOTE OF THE COMPANY'S SHAREHOLDERS.

The Merger Agreement provides that promptly following the purchase of any
Shares pursuant to the Offer, Sigma may request that the Company take all
actions necessary to cause persons designated by Sigma to become directors of
the Company (the "Sigma Designees") so that the total number of directorships
held by such persons is proportionate to the percentage calculated by dividing
(i) the number of Shares accepted for payment pursuant to the Offer plus Shares
beneficially owned by Sigma or any affiliate thereof by (ii) the total number of
Shares outstanding; provided that prior to the consummation of the Merger, the
Board of Directors of the Company (the "Board of Directors") shall always have
at least two members who are directors as of the date hereof, one of whom will
be Robert L. Praegitzer and one of whom will be a director who is neither an
officer of the Company nor a designee of Sigma. The Company has also agreed to
increase the size of the Board of Directors or exercise reasonable best efforts
to secure the resignation of existing directors so as to enable Tyco's designees
to be elected to the Board of Directors in accordance with such provisions.

The information contained in this Annex II concerning Sigma and Purchaser
has been furnished to the Company by Sigma, and the Company assumes no
responsibility for the accuracy or completeness of any such information.

VOTING SECURITIES OF THE COMPANY

As of October 26, 1999, there were issued and outstanding 13,129,751 shares
of Common Stock, each of which entitles the holder to one vote.

II-1

BOARD OF DIRECTORS, SIGMA DESIGNEES AND EXECUTIVE OFFICERS

BOARD BIOGRAPHICAL INFORMATION

The persons named below are the current members of the Board of Directors.
The followings sets forth as to each director his age (as of September 30,
1999), principal occupation and business experience, the period during which he
has served as a director and the expiration of his terms as a director.

DIRECTOR
NAME, PRINCIPAL OCCUPATION, AND OTHER DIRECTORSHIPS AGE SINCE
- ------------------------------------------------------------ -------- --------

ROBERT L. PRAEGITZER founded the Company in 1981 and has 68 1981
been its Chief Executive Officer and Chairman of the Board
since that time, and was the President from the founding
until January 1998. He was also the founder and President
of Praegitzer Design Incorporated, which merged into the
Company in 1995, and Praegitzer Property Group, the assets
of which were acquired by the Company in 1996.

MATTHEW J. BERGERON joined the Company in 1990 as Chief 36 1995
Financial Officer. He became Senior Vice President in
1993, a director in November 1995, Executive Vice
President and Chief Operating Officer in April 1997 and
President and Chief Operating Officer in January 1998.
Prior to joining the Company, Mr. Bergeron was an
accountant at Johnson & Shute P.S., a public accounting
firm.

DANIEL J. BARNETT joined the Company as Senior Vice 48 1996
President and a director in August 1996 in connection with
the merger of Trend Circuits, Inc. ("Trend") into the
Company. On May 29, 1998, Mr. Barnett terminated his
employment with the Company. Prior to the merger, Mr.
Barnett was the president of Trend. Mr. Barnett served as
the president of Trend from 1992 until August 1996.

THEODORE L. STEBBINS is the Managing Director of Adams, 58 1996
Harkness & Hill, Inc. ("Adams Harkness"), an investment
banking firm, and was appointed to the Board of Directors
of the Company in May 1996.

MERRILL A. MCPEAK joined the Company as a director in April 63 1997
1997. He is a retired general of the United States Air
Force. He served as Chief of Staff of the Air Force from
October 1990 to October 1994. He is Chairman of the Board
and a Director of ECC International, and serves on the
boards of four other publicly traded companies: Tektronix
Inc., Thrustmaster Inc., Trans World Airlines, and Western
Power and Equipment.

GORDON B. KUENSTER joined the Company as a director in 66 1997
November 1997. He is founder and Chief Executive Officer
of Seattle Sight Systems, Inc., a manufacturer of
application-specific high resolution computer displays. He
founded Seattle Sight Systems, Inc. in 1996 and is
presently serving as Chief Executive Officer. Mr. Kuenster
was founder and Chief Executive Officer of Virtual Vision,
Inc. from 1991 to 1994 and Virtual Image Displays, Inc.
from 1994 to 1996.

INFORMATION CONCERNING SIGMA DESIGNEES TO THE BOARD OF DIRECTORS

Sigma has informed the Company that it will select the Sigma Designees from
L. Dennis Kozlowski (age 52), Joshua M. Berman (age 61), Mark H. Swartz (age
39), Mark A. Belnick (age 53), Irving Gutin (age 67), Neil R. Garvey (age 44),
Steven Gardner (age 44), and Jeffrey D. Mattfolk (age 37), each of whom is a
director or executive officer of Tyco, certain subsidiaries of Tyco (including

II-2

Sigma) or the Purchaser. Information concerning the Sigma Designees is contained
in Annex I, Annex II and Annex III to the Offer to Purchase, a copy of which is
being mailed to the Company's shareholders with this Schedule 14D-9. The
information in such Annexes is incorporated herein by reference. In addition to
the information concerning Mr. Kozlowski in such Annexes, Mr. Kozlowski is a
director of Applied Power, Inc. (control products), Raytheon Company (electronic
systems and equipment), US Office Products Company (office products) and
Starwood Hotel & Resorts Worldwide Inc. (hospitality and lodging). Tyco has also
informed the Company that each of such directors and executive officers has
consented to act as a Director of the Company, if so designated. It is expected
that none of the Sigma Designees will receive any compensation for services
preformed in his capacity as a Director of the Company.

BOARD MEETINGS AND COMMITTEES

The Board of Directors met four times in the fiscal year ended June 30, 1999
("fiscal 1999"). No director attended fewer than 75 percent of the aggregate of
all meetings of the Board of Directors and the committees of which the director
was a member during fiscal 1999. The standing committees of the Board of
Directors are the Audit Committee and the Compensation Committee. The Company
does not have a Nominating Committee.

The Audit Committee makes recommendations concerning the engagement of the
independent public accountants, reviews with the independent public accountants
the plans and results of audits, approves professional services provided by the
independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and nonaudit fees, and reviews
the adequacy of the Company's internal accounting controls. The Audit Committee
consists of General McPeak, Mr. Stebbins and Mr. Kuenster and met four times in
fiscal 1999. The Compensation Committee determines compensation for the
Company's executive officers, and administers the Company's 1995 Stock Incentive
Plan and the Company's Employee Stock Purchase Plan. The Compensation Committee
consists of Mr. Kuenster, General McPeak and Mr. Stebbins and met four times in
fiscal 1999.

COMPENSATION OF DIRECTORS

Directors who are not officers of the Company are reimbursed for reasonable
out-of-pocket expenses incurred in attending meetings. They also receive, in
cash, an annual retainer fee of $10,000 in quarterly installments along with
$1,000 for each board meeting attended. In addition, each individual who becomes
a nonemployee director of the Company receives a non-statutory option to
purchase 10,000 shares of Common Stock when the individual becomes a director,
and each nonemployee director of the Company is automatically granted an annual
non-discretionary, non-statutory option to purchase 5,000 shares of Common Stock
upon re-election. Members of the Audit and Compensation Committees are each
entitled to $500 per committee meeting they attend and the chairman of both
committees is entitled to an annual cash payment of $1,000.

After the consummation of the Merger, it is expected that the Company's
Board of Directors will act to appoint new members to the Audit and Compensation
Committees. To the Company's knowledge, no decision has been made by the Sigma
Designees regarding the membership of any such committees of the Board.

EXECUTIVE OFFICERS

Executive officers serve at the discretion of the Board of Directors. The
following table sets forth certain information concerning the executive officers
of the Company (as of October 25, 1999) who are

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expected to serve in such capacity until the consummation of the Merger (none of
whom has a family relationship with any other executive officer):

NAME AGE POSITION
- ---- -------- --------

Robert L. Praegitzer........... 68 Chief Executive Officer and Chairman of the Board
Matthew J. Bergeron............ 36 President, Chief Operating Officer and Director
Robert J. Versiackas........... 50 Senior Vice President of Operations
James M. Buchanan.............. 52 Senior Vice President of Sales and Marketing
Gregory L. Lucas............... 54 Senior Vice President of Technology
Robert G. Schmelzer............ 48 Senior Vice President of Administration

ROBERT L. PRAEGITZER founded the Company in 1981 and has been its Chief
Executive Officer and Chairman of the Board since that time and was the
President since that time until January 1998. He was also the founder and
President of Praegitzer Design, Inc. which merged into the Company in 1995, and
Praegitzer Property Group, the assets of which were acquired by the Company in
1996.

MATTHEW J. BERGERON joined the Company in 1990 as Chief Financial Officer.
He became Senior Vice President in 1993, a director in November 1995, the
Executive Vice President and Chief Operating Officer in April 1997 and President
and Chief Operating Officer in January 1998. Prior to joining the Company,
Mr. Bergeron was an accountant at Johnson & Shute P.S., a public accounting
firm.

ROBERT J. VERSIACKAS joined Trend in 1990 as Vice President of Operations
and upon the merger of Trend into the Company in August 1996 was appointed Vice
President of Operations--Fremont Division. In February 1997 Mr. Versiackas
became Senior Vice President of Operations.

JAMES M. BUCHANAN joined the Company as Senior Vice President of Sales and
Marketing in April 1998. Prior to joining the Company, Mr. Buchanan served as
Vice President of Sales for Zycon Corporation from 1984 until January 1997, Vice
President of Sales for Hadco Corporation from January 1997 until August 1997 and
Senior Vice President of Sales for Continental Circuits from August 1997 until
April 1998.

GREGORY L. LUCAS joined the Company in June 1997 as Senior Vice President of
Technology. Prior to joining the Company, Mr. Lucas had been Vice President of
Technology for Zycon Corporation since 1991. Mr. Lucas holds several patents
primarily in the field of buried passive components.

ROBERT G. SCHMELZER joined the Company in 1997 as Vice President of Human
Resources. He became Senior Vice President of Administration in March of 1999.
Prior to joining the Company, Mr. Schmelzer served as Vice President of Human
Resources with Penwest, Ltd. and Penford Products Company from 1993 to 1997 and
held a senior Human Resources position with Air Products and Chemicals, Inc.
from 1985 to 1993.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership as of September 20, 1999 of the Common Stock by (i) each person known
by the Company to own beneficially more than 5 percent of the Common Stock,
(ii) each director and each director nominee of the Company, (iii) each
executive officer of the Company named in the Summary Compensation Table,

II-4

and (iv) all executive officers and directors as a group. Except as otherwise
noted, the persons listed below have sole investment and voting power with
respect to the Common Stock owned by them.

NUMBER OF SHARES BENEFICIALLY
BENEFICIAL OWNER OWNED (1) PERCENTAGE OF SHARES
- ---------------- ----------------------------- --------------------

Robert L. Praegitzer............................... 8,213,125(2) 62.55%
19801 SW 72(nd) Avenue
Tualatin, Oregon 97062

Mellon Bank Corporation (3)........................ 1,007,650(4) 7.67%
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258

Boston Group Holdings, Inc. (3).................... 716,550(5) 5.46%
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258

The Boston Company, Inc (3)........................ 716,550(6) 5.46%
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258

Matthew J. Bergeron................................ 177,849(7) 1.35%

Robert J. Versiackas............................... 195,692(8) 1.49%

Gregory L. Lucas................................... 31,250(9) *

James M. Buchanan.................................. 34,369(10) *

Daniel J. Barnett.................................. 110,703(11) *

Merrill A. McPeak.................................. 16,999(12) *

Theodore L. Stebbins............................... 21,666(13) *

Gordon B. Kuenster................................. 4,999(14) *

All directors and executive officers as a group
(11 persons)..................................... 8,844,210(15) 67.36%

- ------------------------

* Less than 1%

(1) Shares that the person has the right to acquire within 60 days after
September 20, 1999 are deemed to be outstanding in calculating the
percentage ownership of the person or group but are not deemed to be
outstanding as to any other person or group.

(2) Includes options to purchase 93,750 shares of Common Stock that are
exercisable within 60 days after September 20, 1999 and excludes options to
purchase 31,250 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(3) The Company has relied upon the information contained in the Schedule 13G
jointly filed by Mellon Bank Corporation, Boston Group Holdings, Inc. and
The Boston Company, Inc. with the Securities and Exchange Commission on
February 4, 1999.

(4) Mellon Bank Corporation has sole voting power over 998,350 shares and sole
dispositive power over 1,007,650 shares. Mellon Bank Corporation is the
beneficial owner of these shares due to its

II-5

direct or indirect ownership of certain entities, including without
limitation Boston Group Holdings, Inc. and The Boston Company, Inc., which
are the beneficial and record owners, respectively, of shares of the
Company's common stock.

(5) Boston Group Holdings, Inc. has sole voting power over 707,250 shares and
sole dispositive power over 716,550 shares. Boston Group Holdings, Inc. is
the beneficial owner of these shares due to its ownership of The Boston
Company, Inc., the record owner of the shares. These shares are also
included in the shares beneficially owned by Mellon Bank Corporation.

(6) The Boston Company, Inc. has sole voting power over 707,250 shares and sole
dispositive power over 716,550 shares. The shares are also included in the
shares beneficially owned by Mellon Bank Corporation and Boston Group
Holdings, Inc.

(7) Includes options to purchase 68,749 shares of Common Stock that are
exercisable within 60 days after September 20, 1999 and excludes options to
purchase 31,251 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(8) Includes options to purchase 35,260 shares of Common Stock that are
exercisable within 60 days after September 20, 1999 and excludes options to
purchase 54,740 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(9) Includes options to purchase 31,250 shares of Common Stock that are
exercisable within 60 days after September 20, 1999 and excludes options to
purchase 93,750 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(10) Includes options to purchase 31,250 shares of Common Stock that are
exercisable within 60 days after September 20, 1999 and excludes options to
purchase 153,750 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(11) Includes options to purchase 3,333 shares of Common Stock that are
exercisable within 60 days after September 20, 1999. Excludes options to
purchase 6,667 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(12) Includes options to purchase 14,999 shares of Common Stock that are
exercisable within 60 days after September 20, 1999. Excludes options to
purchase 10,001 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(13) Includes options to purchase 21,666 shares of Common Stock that are
exercisable within 60 days after September 20, 1999. Excludes options to
purchase 3,334 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(14) Includes options to purchase 4,999 shares of Common Stock that are
exercisable within 60 days after September 20, 1999. Excludes options to
purchase 10,0001 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

(15) Includes options to purchase 332,756 shares of Common Stock that are
exercisable within 60 days after September 20, 1999. Excludes options to
purchase 464,744 shares of Common Stock not exercisable within 60 days after
September 20, 1999.

II-6

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth all compensation paid by the Company with
respect to the last three fiscal years to the Chief Executive Officer and the
four other most highly compensated executive officers whose annual compensation
exceeded $100,000.

ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------------------ --------------------------
FISCAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED COMPENSATION(1)
- --------------------------- -------- -------- -------- -------- ---------------

Robert L. Praegitzer...................... 1997 $274,999 0 125,000 9,640
Chief Executive Officer 1998 $300,000 0 0 9,640
1999 $300,000 0 0 9,640

Matthew J. Bergeron....................... 1997 $149,999 0 25,000 4,983
President and Chief Operating Officer 1998 $199,423 0 25,000 4,983
1999 $200,000 0 0 4,983

Robert J. Versiackas...................... 1997 $141,731 0 16,043 0
Senior Vice President of Operations 1998 $199,892 0 58,957 0
1999 $185,000 0 15,000 0

James M. Buchanan(2)...................... 1997 -- -- -- --
Senior Vice President of Sales 1998 $ 35,577 0 125,000 $1,615
And Marketing 1999 $185,000 0 20,000 $8,400

Gregory L. Lucas(3)....................... 1997 $ 7,115 0 50,000 0
Senior Vice President of Technology 1998 $181,442 0 25,000 0
1999 $185,000 0 20,000 0

- ------------------------

(1) Consists of car allowances

(2) Mr. Buchanan commenced employment with the Company on April 13, 1998.

(3) Mr. Lucas commenced employment with the Company on June 16, 1997.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table provides information regarding stock options granted in
fiscal 1999 to the executive officers named in the Summary Compensation Table.

POTENTIAL REALIZABLE
PERCENTAGE VALUE AT ASSUMED
NUMBER OF OF OPTIONS ANNUAL RATES OF STOCK
SHARES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM (1)
OPTIONS IN FISCAL PRICE PER EXPIRATION -----------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
- ---- ---------- ---------- --------- ---------- ---------- ----------

Robert L. Praegitzer............ 0 -- -- -- -- --
Matthew J. Bergeron............. 0 -- -- -- -- --
Robert J. Versiackas............ 15,000(2) 3.45% $5.344 4/16/09 $50,412 $127,754
James M. Buchanan............... 20,000(2) 4.60% $5.344 4/16/09 $67,216 $170,339
Gregory L. Lucas................ 20,000(2) 4.60% $5.344 4/16/09 $67,216 $170,339

- ------------------------

(1) In accordance with rules of the Securities and Exchange Commission, these
amounts are the hypothetical gains or "option spreads" that would exist for
the respective options based on

II-7

assumed compounded rates of annual stock price appreciation of 5 percent and
10 percent from the date the options were granted over the option term.

(2) These options become exercisable April 16, 2000.

OPTION EXERCISES AND YEAR-END OPTION VALUES

The following table indicates for all executive officers named in the
Summary Compensation Table (i) stock options exercised during fiscal 1999,
including the value realized on the date of exercise, (ii) the number of shares
subject to exercisable (vested) and unexercisable (unvested) stock options as of
June 30, 1999, and (iii) the value of "in-the-money" options, which represents
the positive spread between the exercise price of existing stock options and the
year-end price of the Common Stock.

NUMBER OF NUMBER OF SHARES SUBJECT VALUE OF UNEXERCISED IN-THE-
SHARES TO UNEXERCISED OPTIONS AT MONEY OPTIONS AT FISCAL
ACQUIRED FISCAL YEAR-END YEAR-END(1)
ON VALUE --------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------- -------- ----------- ------------- ------------ --------------

Robert L. Praegitzer......... -- -- 62,500 62,500 $0 $ 0
Matthew J. Bergeron.......... -- -- 56,250 43,750 $0 $ 0
Robert J. Versiackas......... -- -- 22,760 67,240 $0 $ 8,910
James M. Buchanan............ -- -- 31,250 113,750 $0 $11,880
Gregory L. Lucas............. -- -- 31,250 63,750 $0 $11,880

- ------------------------

(1) Based on last sale price of $5.938 per share on June 30, 1999.

EMPLOYMENT ARRANGEMENTS

In November 1995 the Company entered into an employment agreement with
Robert L. Praegitzer, providing an annual base salary of $250,000 with increases
over time, and eligibility for bonuses and other Company benefits.
Mr. Praegitzer's employment agreement is of an indefinite duration.

II-8

In December 1998 the Company entered into a Stock Purchase Agreement with
Matthew J. Bergeron, the Company's President and Chief Operating Officer,
pursuant to which the Company sold Mr. Bergeron 100,000 unregistered shares of
its common stock at fair market value. Due to the restrictions on transfer of
the shares, the agreement provided that the fair market value of the shares
would be 75% of the public market price of the Company's common stock as quoted
on the Nasdaq National Market System. On December 22, 1998, the date on which
the purchase price for the shares was established, the closing market price for
the Company's common stock was $6.9375 per share. Accordingly, the purchase
price for the shares was $520,350. Under the terms of the agreement,
Mr. Bergeron must pay the Company the entire purchase price, without interest,
on or before January 1, 2006. The Company agreed to indemnify Mr. Bergeron for
any state or federal income tax liability for which he may become liable on
account of interest imputed on the deferred payment of the purchase price.
Mr. Bergeron has the option to require the Company to repurchase the shares from
him during January 2006 for $420,312.50. This transaction closed February 18,
1999.

Each of Mr. Bergeron, Gregory L. Lucas, Senior Vice President of Technology
of the Company, and Robert G. Schmetzer, Senior Vice President of Administration
of the Company, has entered into an agreement with the Company in the event of a
change of control. The agreement provides that, upon a change of control of the
Company, if such officer's employment is terminated within one year after the
change of control, such officer's stock options will become fully exercisable,
unless the change in control transaction would otherwise be accounted for under
the pooling of interest method. In addition, if such officer's employment is
terminated other than for cause within 12 months of a change of control, he will
be entitled to receive an amount equal to 6 months of his base salary within
30 days of termination.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In June 1999 Robert L. Praegitzer, Chairman of the Board and Chief Executive
Officer of the Company, pledged an aggregate of 2,656,500 shares of the common
stock of the Company he owns to Key Bank, National Association as collateral to
secure the Company's credit facility with the bank. Mr. Praegitzer did not
receive any direct or indirect compensation for this transaction.

Theodore L. Stebbins, a director of the Company, is a managing director of
Adams, Harkness & Hill, Inc. ("Adams Harkness"), an investment banking firm. The
Company has retained Adams Harkness to provide financial advisory services in
connection with strategic alternatives that the Company had been considering,
including the transactions contemplated by the Merger Agreement.

II-9

Under the arrangement, Adams Harkness is entitled to receive an aggregate of
$350,000 in connection with a strategic transaction, payable as follows: $50,000
upon delivery of a fairness opinion to the Company relating to the transaction
and $300,000 upon completion of the transaction. Adams Harkness is also entitled
to forty percent of a fee equal to one percent of the value of the strategic
transaction less $350,000.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation committee consists of three directors and, pursuant to
authority delegated by the Board of Directors, determines and administers the
compensation of the Company's executive officers. In setting the compensation
for the executive officers other than the Chief Executive Officer, the
Compensation Committee works closely with the Chief Executive Officer, who makes
specific recommendations to the committee concerning compensation for each of
the other executive officers. Although the Board of Directors has granted the
Compensation Committee full authority to set executive compensation, in practice
the decisions of the Compensation Committee are usually reported as
recommendations to the full Board of Directors, which has in the past generally
approved the recommendations.

Internal Revenue Code Section 162(m), limits to $1,000,000 per person the
annual amount that the Company may deduct for compensation paid to any of its
most highly compensated officers. Generally the levels of salary and bonus paid
by the Company do not exceed this limit. However, upon the exercise of
nonstatutory stock options, the excess of the current market price over the
option price (option spread) is treated as compensation and, therefore, it may
be possible for option exercises by an officer in any year to cause the
officer's total compensation to exceed $1,000,000. Under certain regulations,
option spread compensation from options that meet certain requirements will not
be subject to the $1,000,000 cap on deductibility, and it is the Company's
current policy generally to grant options that meet those requirements.

COMPENSATION PRINCIPLES

Executive compensation is based on several general principles, which are
summarized below:

-- Provide competitive total compensation that enables the Company to
attract and retain key executives.

-- Link corporate and individual performance to compensation.

-- Encourage long-term success and align shareholder interests with
management interests by giving executives the opportunity to acquire
stock in the Company.

-- Reward initiative.

COMPENSATION COMPONENTS

The primary components of the Company's executive officer compensation
program are base salary, annual incentive arrangements and long-term incentive
compensation in the form of stock options.

BASE SALARY. Executive officer base salaries for fiscal 1999 were
established by the Compensation Committee, to provide salary levels appropriate
for the responsibilities of the executive officers of the Company. In
determining salaries, the Compensation Committee took into account individual
experience, job responsibility and individual performance. No specific weight
was attached to these factors in establishing base salaries. For fiscal 2000 and
future years, the Company will continue to establish base salary levels for the
Company's executive officers that are competitive with those established by
companies of similar size in the electronics industry. When determining
salaries, the

II-10

Compensation Committee will also take into account individual experience levels,
job responsibility and individual performance. Each executive officer's salary
will be reviewed annually, and increases to base salary will be made to reflect
competitive market increases and the individual factors described above.

STOCK OPTIONS. The Company's 1995 Stock Incentive Plan (the "Plan") is
intended as a long-term incentive plan for executive officers, managers and
other key employees of the Company. The objectives of the Plan are to align
employee and shareholder long-term interests by creating a direct link between
compensation and shareholder value. The Compensation Committee administers the
Plan and recommends to the full Board of Directors awards of stock options to
executive officers and other employees of the Company. Options granted under the
Plan generally have been granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant. Fair market value is established
by the Board of Directors, upon recommendation of the Compensation Committee, as
the closing price as reported on the Nasdaq National Market on the date of
grant. Options generally become exercisable over a four-year period with 25% of
the options exercisable at the end of each year from date of grant. Stock
options generally have a ten-year term, but terminate earlier if employment is
terminated. Initial option grants to executive officers depend upon the level of
responsibility and position, and subsequent grants are made based on the
Compensation Committee's subjective assessment of performance, among other
factors. In fiscal 1999 the Board of Directors, upon recommendation of the
Compensation Committee, made the following option grants of Company Common Stock
under the Plan to executive officers of the Company: Robert J.
Versiackas--15,000 shares; Gregory L. Lucas--20,000 shares; James M.
Buchanan--20,000; Robert G. Schmelzer--15,000 shares; William J. Thale--15,000
shares; and Scott D. Gilbert--7,500 shares. The Compensation Committee expects
that in the future, if additional grants are made, consideration will be given
to the number of options granted in the past and the exercise price of such
grants.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

The Compensation Committee and the Board of Directors set Mr. Praegitzer's
compensation for fiscal 1999. They employed the same criteria that the
Compensation Committee used to set compensation for the other executive
officers. The Compensation Committee and the Board of Directors reviewed the
data within the electronics industry and similar size firms. They based
Mr. Praegitzer's salary on their findings of other executives with his level of
experience, and recognized Mr. Praegitzer's individual performance and important
contributions to the Company's increased revenue and earnings growth.

COMPENSATION COMMITTEE MEMBERS

Gordon B. Kuenster
Theodore L. Stebbins
Merrill A. McPeak

II-11

PERFORMANCE GRAPH

Set forth below is a graph that compares the cumulative total stockholder
return on the Company's Common Stock with the cumulative total return on the
Nasdaq Composite U.S. Index and a peer group of companies in the Company's
industry (SIC 3672) over the period indicated (assuming the investment of $100
in the Company's Common Stock on April 4, 1996, the date of the Company's
initial public offering, and reinvestment of any dividends). In accordance with
guidelines of the SEC, the stockholder return for each entity in the peer group
index have been weighted on the basis of market capitalization as of each
monthly measurement date set forth on the graph.

[LOGO]

II-12

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than 10 percent of the
Common Stock to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Executive officers, directors, and
beneficial owners of more than 10 percent of the Common Stock are required by
the SEC regulation to furnish the Company with copies of all section 16(a)
reports they file. Based solely on a review of such reports received by the
Company and on written representations from certain reporting persons that they
have complied with the relevant filing requirements, the Company believes that
all section 16(a) filing requirements applicable to its executive officers and
directors have been complied with except a Form 3 was not timely filed by Robert
G. Schmelzer.

II-13