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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT
UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

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SIGNAL TECHNOLOGY CORPORATION
(Name of Subject Company)

SIGNAL TECHNOLOGY CORPORATION
(Name of Person Filing Statement)

COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of Class of Securities)

826675 10 0
(CUSIP Number of Class of Securities)

GEORGE E. LOMBARD
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
SIGNAL TECHNOLOGY CORPORATION
THE TOWER AT NORTHWOODS
222 ROSEWOOD DRIVE
DANVERS, MASSACHUSETTS 01923
(978) 774-2281
(Name, address, and telephone number of person authorized to receive
notices and communications on behalf of the person filing statement)

with a copy to:
ROGER D. FELDMAN, ESQ.
FISH & RICHARDSON P.C.
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110-2894
(617) 956-5924

[ ]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.

Name and Address. The name of the subject company to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement")
relates is Signal Technology Corporation, a Delaware corporation (the
"Company"). The address of the Company's principal executive offices is The
Tower at Northwoods, 222 Rosewood Drive, Danvers, Massachusetts 01923. The
Company's telephone number at such address is (978) 774-2281.

Securities. The class of equity securities to which this Statement relates
is the Company's common stock, $.01 par value per share (the "Common Stock"). As
of April 24, 2003, there were 10,457,887 shares of Common Stock outstanding.

ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.

Name and Address. The name, business address and business telephone number
of the Company, which is both the filer of this Statement and the subject
company, are set forth in Item 1 above.

Tender Offer. This Statement relates to a tender offer by STC Merger Co., a
Delaware corporation ("Purchaser") and indirect wholly owned subsidiary of Crane
Co., a Delaware corporation ("Parent"), as disclosed in the Tender Offer
Statement on Schedule TO filed by Purchaser with the United States Securities
and Exchange Commission (the "SEC") on April 25, 2003 (as may be amended or
supplemented from time to time, the "Schedule TO"), to purchase all of the
issued and outstanding shares of Common Stock (the "Shares") at a purchase price
of $13.25 per Share, net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated April 25, 2003 (the "Offer to Purchase"), and the
related Letter of Transmittal (the "Letter of Transmittal" and, together with
the Offer to Purchase, as each may be amended or supplemented from time to time,
the "Offer"). Copies of the Offer to Purchase and the Letter of Transmittal are
filed as Exhibits (a)(1)(A) and (a)(1)(B), respectively, to this Statement and
are incorporated herein by reference.

The Offer is being made pursuant to an Agreement and Plan of Merger, dated
April 16, 2003, by and among the Company, Parent and Purchaser (the "Merger
Agreement"). The Merger Agreement provides, among other things, for the making
of the Offer by Purchaser, and further provides that, following consummation of
the Offer and subject to the satisfaction of the conditions set forth in the
Merger Agreement, Purchaser will be merged with and into the Company (the
"Merger"), in accordance with the relevant provisions of the Delaware General
Corporation Law (the "DGCL"), with the Company continuing as the surviving
corporation (the "Surviving Corporation") and an indirect wholly owned
subsidiary of Parent. In connection with the Merger, each Share (other than
Shares held by stockholders of the Company who have properly exercised their
appraisal rights under the DGCL, shares of Common Stock held in the treasury of
the Company, and Shares held by Parent or any direct or indirect wholly owned
subsidiary of Parent or the Company) will be converted, at the effective time of
the Merger (the "Effective Time"), into the right to receive the Offer Price.
The Merger Agreement, a copy of which is filed as Exhibit (e)(1) to this
Statement, is incorporated herein by reference.

The Schedule TO states that the principal executive offices of Parent and
Purchaser are located at 100 First Stamford Place, Stamford, Connecticut 06902
and their telephone number at such address is (203) 363-7300.

All information contained in this Statement or incorporated herein by
reference directly concerning Purchaser, Parent or their affiliates, or actions
or events with respect to any of them, was provided for inclusion herein by
Purchaser or Parent or obtained from reports or statements filed by Purchaser or
Parent with the SEC, including, without limitation, the Schedule TO, and the
Company takes no responsibility for such information. The Company has, however,
received and commented on those portions of the Offer to Purchase directly
concerning the Company or actions or events with respect to the Company.

ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

General

Certain information regarding agreements, arrangements or understandings
between the Company or its affiliates, on the one hand, and certain of its
directors and executive officers, on the other hand, is provided in the
Company's Information Statement (the "Information Statement"), which is being
furnished pursuant to Section 14(f) of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), and Rule 14f-1 thereunder and is attached as
Annex B to this Statement and is incorporated herein by reference.

Except as set forth in this Item 3 or in the Information Statement or as
incorporated herein by reference, to the knowledge of the Company, as of the
date of this Statement, there is no material agreement, arrangement or
understanding and no actual or potential material conflict of interest between
the Company or its affiliates, on the one hand, and (i) the Company, its
executive officers, directors or affiliates, or (ii) Parent, Purchaser or any of
their respective executive officers, directors or affiliates, on the other hand.

The Merger Agreement

A summary of the material terms of the Merger Agreement and a description
of the conditions of the Offer are set forth in Section 11 "Purposes of the
Offer; the Merger Agreement; the Tender and Voting Agreements; the
Indemnification Agreements; Dissenters' Rights; Plans for Signal; the Rights"
and Section 14 "Certain Conditions of the Offer," respectively, of the Offer to
Purchase, which is filed as Exhibit (a)(1)(A) hereto and is incorporated herein
by reference. Such summary and description are qualified in their entirety by
reference to the Merger Agreement, which is filed as Exhibit (e)(1) hereto and
is incorporated herein by reference.

Tender and Voting Agreements

Certain of the Company's executive officers and directors and certain
family members and trusts of such directors, who together hold voting and
dispositive power with respect to an aggregate of 1,762,318 Shares, as an
inducement for the execution and delivery of the Merger Agreement by Parent and
Purchaser, entered into Stockholder Tender and Voting Agreements (each, a
"Tender and Voting Agreement" and collectively, the "Tender and Voting
Agreements"), dated April 16, 2003, with Parent and Purchaser. Pursuant to their
respective Tender and Voting Agreements, the signatories have agreed to tender
(or sell) their Shares to Purchaser and vote in favor of the Merger, the Merger
Agreement and the transactions contemplated thereby, and have granted to
Purchaser and each of Parent's officers an irrevocable proxy to vote their
Shares in accordance with the foregoing.

A summary of the Tender and Voting Agreements is also contained in Section
11 "Purposes of the Offer; the Merger Agreement; the Tender and Voting
Agreements; the Indemnification Agreements; Dissenters' Rights; Plans for
Signal; the Rights" of the Offer to Purchase, which is filed as Exhibit
(a)(1)(A) hereto and is incorporated herein by reference. Such summary is
qualified in its entirety by reference to the Tender and Voting Agreements, a
form of which is filed as Exhibit (e)(2) hereto and is incorporated herein by
reference.

Confidentiality Agreement

In connection with Parent's consideration of a possible acquisition of the
Company, on June 11, 2002, Parent entered into a Confidentiality Agreement with
Wachovia Securities, Inc. ("Wachovia"), acting in its capacity as financial
advisor to the Company, to retain in strict confidence all non-public
information regarding the Company and not to hire or solicit for employment any
officers or management employees of the Company, without the written consent of
the Company, for a period of two years after the date of the Confidentiality
Agreement, unless Parent completed a transaction with the Company. Parent has
also agreed that, for a period of two years after the date of the
Confidentiality Agreement, it will not and will ensure that its officers,
directors, advisors, employees and affiliates will not, without the prior
written

approval of the Board of Directors of the Company (the "Board"), (i) acquire or
agree to acquire or make any proposal to acquire directly or indirectly any
securities or property of the Company; (ii) make, or in any way participate,
directly or indirectly, in any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the SEC) to vote, or seek to advise or influence any
person with respect to the voting of, any voting securities of the Company;
(iii) form, join or in any way participate in a "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any voting securities of
the Company; or (iv) otherwise acting alone, or in concert with others,
directly or indirectly, seek to control, advise, change, or influence the
management, Board, or policies of the Company. This summary and description of
the material terms of the Confidentiality Agreement are qualified in their
entirety by reference to the Confidentiality Agreement, a copy of which is
filed as Exhibit (e)(3) hereto and is incorporated herein by reference. The
Merger Agreement provides that certain information exchanged pursuant to the
Merger Agreement is subject to the Confidentiality Agreement.

Treatment of Stock Options

The Merger Agreement provides that, immediately prior to the Effective
Time, each then outstanding option to purchase shares of Common Stock (each, a
"Company Option"), whether vested or unvested, under the Company's 1992 Equity
Incentive Stock Option Plan and 2001 Equity Incentive Plan (collectively, the
"Company Stock Option Plans"), will be automatically converted into the right to
receive a cash amount equal to the product of: (i) the excess, if any, of the
Offer Price over the exercise price per share of Common Stock payable upon the
exercise of such Company Option; and (ii) the number of shares of Common Stock
subject to such Company Option, less any applicable tax withholdings. Any
Company Option with a per share exercise price equal to or in excess of $13.25
(or such higher price as may be paid in the Offer) will be cancelled without
payment therefor. Purchaser will pay, or cause to be paid, the cash amounts
payable in respect of such conversion of Company Options at or shortly (and in
no event more than five (5) business days) after the Effective Time, except that
such payment with respect to the 155,000 Company Options granted to certain
directors and one officer of the Company on January 31, 2003, shall be made from
funds deposited with The Bank of New York, as exchange agent, on the 90th day
following the Effective Time (unless such a day is not a business day, in which
case payment shall be made on the next succeeding business day). Additionally,
the Merger Agreement provides that the Company shall take actions or cause all
such actions to be taken prior to the consummation of the Offer as are necessary
to ensure that the holders of at least 80% of the Company Options not held by
those officers, directors and prior employee of the Company who entered into
Optionee Agreements described below (the "Remaining Options") shall be converted
as set forth above. The Company shall use its reasonable best efforts to ensure
that as soon as practicable and in any event prior to the Effective Time all of
the Remaining Options that were not converted as set forth above on or before
the consummation of the Offer shall be exercised or converted as set forth
above. The Company will use its reasonable best efforts to obtain a signed
consent from each holder of outstanding Company Options to the conversion of
such Company Options as specified above. Except with respect to Company Options
for which such a signed consent is obtained, no payment shall be made to any
holder of a Company Option that is to be converted and terminated unless such
holder delivers a signed waiver acknowledging that all of his or her outstanding
Company Options were converted and terminated at the Effective Time and waiving
all of his or her rights with respect to those Company Options. A summary of the
treatment of the Company Options under the Merger Agreement is contained in
Section 11 "Purposes of the Offer; the Merger Agreement; the Tender and Voting
Agreements; the Indemnification Agreements; Dissenters' Rights; Plans for
Signal; the Rights" of the Offer to Purchase, which is filed as Exhibit
(a)(1)(A) hereto and is incorporated herein by reference.

Optionee Agreements

The Company's officers and directors and one of the Company's former
employees, as an inducement for the execution and delivery of the Merger
Agreement by Parent and Purchaser, entered into Optionee Agreements (each, an
"Optionee Agreement" and collectively, the "Optionee Agreements"), dated April
16, 2003, with Parent, Purchaser and the Company. Pursuant to their respective
Optionee Agreements, each optionee, among other things, (i) acknowledged and
agreed that, notwithstanding the terms of any

Company Options granted to such optionee or the provisions of any Company Stock
Option Plan, such optionee's Company Options would be treated as set forth in
the first two sentences under the above heading "Treatment of Stock Options,"
(ii) waived any rights such optionee has in respect of the terms of any Company
Options granted to such optionee or under any Company Stock Option Plan to the
extent any such terms are inconsistent with the provisions of its Optionee
Agreement, and (iii) agreed (until the earliest of the Effective Time,
termination of the Merger Agreement or termination of its Optionee Agreement by
the mutual written consent of the parties thereto) not to sell, transfer,
pledge, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
assignment or other disposition of, any Company Options to any person, other
than Purchaser or Purchaser's designee, except in accordance with the Optionee
Agreement. This summary is qualified in its entirety by reference to the
Optionee Agreements, a form of which is filed as Exhibit (e)(5) hereto and is
incorporated herein by reference.

Employee Stock Purchase Plan

The Merger Agreement provides that the Company shall take all actions
necessary to shorten the current offering period under its Employee Stock
Purchase Plan (the "ESPP") so that it will terminate prior to the Effective
Time. The Board intends to set a new date by which participants in the ESPP must
exercise their rights to purchase shares of Common Stock. The Merger Agreement
provides that the purchase price for any shares of Common Stock purchased under
the ESPP during the current offering period (as shortened in accordance with the
Merger Agreement) must be paid in cash.

As of April 24, 2003, there were 57,018 shares of Common Stock reserved for
issuance pursuant to the ESPP.

Employee Severance Agreements

The Company has entered into employee severance agreements with certain of
its employees pursuant to which each such employee is entitled to receive a
severance pay award if he or she suffers a Diminution (defined below) of his or
her position or is involuntarily terminated within a certain prescribed period
of time after the date of a Change of Control (defined below). For each of these
agreements, "Diminution" is defined as (i) a demotion, (ii) a material reduction
in job responsibilities, (iii) a pay or benefits reduction, or (iv) a relocation
more than 50 miles from the location where the employee is working immediately
prior to the Change of Control. For each of these agreements, "Change of
Control" is defined to occur when (i) an individual, corporation, partnership,
company, or other entity becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of securities of the Company representing more
than 50% of the combined voting power of the Company's then outstanding
securities or (ii) the Company is a party to a merger, consolidation, sale of
assets, or other reorganization, or a proxy contest, as a consequence of any of
which stockholders of the Company immediately prior to such transaction cease to
control at least 50% of the combined voting power of the surviving entity
immediately after such transaction. Consummation of the Offer would constitute a
Change of Control. Employees who have employee severance agreements, the date of
those agreements and the pay award that each of them is entitled to under the
circumstances set forth above, are as follows:

EMPLOYEE DATE OF AGREEMENT SEVERANCE PAY AWARD
- ----------------- ------------------- -----------------------------------------------------

EMPLOYEE DATE OF AGREEMENT SEVERANCE PAY AWARD
- ------------------ ------------------- -----------------------------------------------------

David Laks March 26, 2002 One and one-half times employee's annual base salary
Steve Lapatsos March 26, 2002 One time employee's annual base salary
Norma Leonard March 26, 2002 One time employee's annual base salary
George Lombard March 26, 2002 Three times employee's annual base salary
John McGibbney March 26, 2002 One time employee's annual base salary
Raju Mehta March 26, 2002 One time employee's annual base salary
Joseph Mersereau March 26, 2002 One and one-half times employee's annual base salary
Robert Nelsen March 26, 2002 Two times employee's annual base salary
Roberta O'Neil March 26, 2002 One time employee's annual base salary
David Parker March 26, 2002 One and one-half times employee's annual base salary
Doug Weiner March 26, 2002 One time employee's annual base salary
David Woods March 26, 2002 One and one-half times employee's annual base salary

As of April 9, 2003, Tom Casale, Gil Evangelist, Gene Joles, James Kampfer,
Fred Koufos, David Laks, Steve Lapatsos, John McGibbney, Raju Mehta, Joseph
Mersereau and Doug Weiner received offers of employment (each, an "Offer of
Employment" and collectively, the "Offers of Employment") from Purchaser, which
they accepted. The Offers of Employment become effective upon the Effective
Time. Pursuant to the terms of their Offers of Employment, each of these
employees, by accepting his Offer of Employment, waived any rights he may have
otherwise under his employee severance agreement described above arising on,
after or as a result of the acquisition of Signal by Parent.

Generally, each Offer of Employment provides for a signing bonus,
continuation of salary and a lump sum severance payment if the employee's
employment is terminated without cause or by such employee for "good reason"
within a prescribed period of time after the acquisition of Signal by Parent.
"Good reason" means a reduction in base salary or a relocation of more than 50
miles from the location where the employee is working immediately prior to the
acquisition of Signal by Parent.

The aggregate amount of severance payments to be made under the employee
severance agreements to those employees who did not receive an Offer of
Employment is estimated to be $3,194,748.

On April 22, 2003, George Lombard entered into a letter agreement with
Parent pursuant to which he agreed that certain provisions in his employee
severance agreement, which require him, as an express condition to the receipt
of any payments or benefits thereunder, to execute a waiver and release and
agree not to solicit customers of the Company, attempt to induce employees of
the Company to leave the Company's employ or disclose any confidential
information of the Company, would contain an additional provision prohibiting
his direct and indirect competition with the Company for one year following the
Effective Time. In such letter agreement Mr. Lombard and Parent agreed that the
value of such covenant not to compete is $75,000 and, accordingly, the severance
payment that Mr. Lombard will receive pursuant to his employee severance
agreement will be $1,125,000 (which is $75,000 less than required by the terms
of such agreement). The letter agreement provides that on the date that the
severance payment is made to Mr. Lombard, he will be paid separately the amount
of $75,000 in consideration for his non-compete agreement.

Directors' and Officers' Insurance and Indemnification Agreements

The Merger Agreement requires the Surviving Corporation to use its
reasonable best efforts to maintain in effect for six (6) years from the
Effective Time, if available, either (i) directors' and officers' liability
insurance covering those persons currently covered by the Company's director's
and officer's liability insurance policy on terms comparable to those applicable
to the then current directors and officers of Parent; or (ii) the current
directors' and officers' liability insurance policies maintained by the Company
with respect to matters occurring prior to the Effective Time; provided,
however, that the Surviving Corporation shall not be required to expend more
than an amount per year equal to 200% of the current annual premiums paid by the
Company for such insurance coverage.

On April 15, 2003, as acknowledged in the Merger Agreement, the Company
entered into six-year indemnification agreements (collectively, the
"Indemnification Agreements" and each, an "Indemnification Agreement") with each
of its current officers and directors (each, an "Indemnitee") whereby the

Company (and, after the Effective Time, the Surviving Corporation), subject to
certain limitations, will indemnify each Indemnitee, to the fullest extent
authorized by the DGCL, from and against any expenses, judgments, fines,
liabilities, losses and amounts paid in settlement, actually and reasonably
incurred by such Indemnitee in connection with any threatened, pending or
completed action, suit, claim or proceeding by reason of the fact that such
Indemnitee is or was a director or officer of the Company, or, after the
Effective Time, shall serve at the specific request of the Surviving Corporation
as a director, officer, employee, fiduciary or agent of another corporation,
partnership, joint venture, trust or other enterprise, and whether or not the
cause of such proceeding occurred before or after the date of such
Indemnification Agreement. In the event of any proceeding against an Indemnitee
which may give rise to a right of indemnification under its Indemnification
Agreement, so long as such Indemnitee follows certain procedures, the Company
shall advance to such Indemnitee amounts equal to reasonable expenses incurred
by such Indemnitee in defending such proceeding in advance of the final
disposition thereof. The Indemnification Agreements provide that the aggregate
liability of the Company in respect of indemnification and expense obligations
to all Indemnitees shall in no event exceed $10,000,000 and each Indemnification
Agreement, unless earlier terminated due to the expiration of its six-year term,
shall terminate on the date such $10,000,000 maximum amount is reached (subject,
in each case, to certain limited exceptions).

Parent has agreed, subject to the occurrence of, and following, the
Effective Time, to guarantee the obligations of the Surviving Corporation under
the Indemnification Agreements subject to the $10,000,000 aggregate and other
limitations discussed in the preceding paragraph.

For additional discussion of the insurance provisions of the Merger
Agreement and the Indemnification Agreements, see Section 11 "Purposes of the
Offer; the Merger Agreement; the Tender and Voting Agreements; the
Indemnification Agreements; Dissenters' Rights; Plans for Signal; the Rights" of
the Offer to Purchase, which is filed as Exhibit (a)(1)(A) hereto and is
incorporated herein by reference. The summary of the provisions of the Merger
Agreement pertaining to directors' and officers' insurance contained in the
Offer to Purchase is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit (e)(1) hereto and is incorporated herein by
reference. The summary of the provisions of the Indemnification Agreements is
qualified in its entirety by reference to the Indemnification Agreement, a form
of which is filed as Exhibit (e)(4) hereto and is incorporated herein by
reference.

Certain Transactions

Parent, through its wholly owned subsidiary General Technology Corporation,
which was acquired by Parent in November 2002, purchased from the Company
approximately $2.1 million of electronic components in 2002 (including the pre-
and post-acquisition periods) and approximately $300,000 of electronic
components (including a pending order) to date in 2003.

Conflicts of Interest

As set forth in more detail in Item 4 of this Statement, since the Spring
of 2002, the Board held numerous meetings during which a possible acquisition
transaction with Parent was discussed at length. During those meetings, Mr.
Joseph Schneider, a member of the Board, participated and indicated to the other
Board members either that he would try or had tried to encourage Parent's
interest in such a transaction. On January 17, 2003, the Company entered into a
letter of intent with Parent. At no time prior to execution of the letter of
intent did Mr. Schneider register in any way with the Board any expectation for
compensation with respect to a transaction with Parent nor did the Company ever
agree with, state or otherwise imply to Mr. Schneider that he would be
compensated in any way for any such effort. On February 15, 2003, Mr. Schneider
visited Mr. George Lombard, the Company's CEO and Chairman of the Board, and
requested that he be paid a fee of between .3% and .5% of the value of any
transaction with Parent for introducing Parent to the Company and Wachovia and
facilitating the transaction with Parent.

On February 23, 2003, Mr. Lombard, as Chairman of the Board, asked the
Board to meet informally before its scheduled February 24 Board meeting to
discuss Mr. Schneider's request. Mr. Schneider was asked to recuse himself from
the pre-meeting. The Board acknowledged that Mr. Schneider had made

several phone calls and had met with one of Parent's representatives at a
conference site, but it could not and did not distinguish such activity from Mr.
Schneider's normal duties and role as a Board member. Furthermore, from time to
time, Mr. Schneider, through his firm, JSA Partners, Inc., had done research
work for the Company, and, in each case, such work had been pursuant to a formal
written agreement approved by the Board in advance. Wachovia also stated it
would not pay Mr. Schneider any such fee because it had no obligation to do so
and that to do so would be improper and potentially in violation of certain
regulations of the National Association of Securities Dealers. The Board
informed Mr. Schneider that it would not pay him a fee because there was no
obligation (either written or oral) to pay him one, that he had done no more
than what was expected of him in his role as a director and that it would be
improper to pay him a fee under the circumstances. The Board also informed Mr.
Schneider of the position taken by Wachovia as described above.

After the Board rejected Mr. Schneider's request, to the Company's
knowledge, based on information provided to it by Parent, he contacted Parent
and brought his claim for payment to Parent's attention.

During a subsequent meeting of the Board, a director orally communicated
with Wachovia and reminded Wachovia that it was Mr. Schneider who had introduced
Wachovia to the Company and Parent to the Company and that Mr. Schneider may
have been helpful in facilitating a transaction with Parent. This member stated
his personal belief to Wachovia that it would be appropriate for Wachovia to do
something for Mr. Schneider in the future. Wachovia acknowledged these comments
but did not agree to take any action, including compensating Mr. Schneider in
any way.

At the outset of the Board meeting held on April 9, 2003, the Chairman of
the Board asked Mr. Schneider to declare whether he was going to persist with
his claim. Mr. Schneider replied that he wanted to speak with his lawyer and was
not prepared to answer Mr. Lombard's question at the time. The Chairman then
asked Mr. Schneider again to recuse himself from discussions relating to the
potential transaction with Parent. During Mr. Schneider's absence, once again,
the Board unanimously affirmed its prior rejection of his claim.

As of the date of this Statement, Mr. Schneider has not withdrawn his claim
for compensation in connection with the Offer and Merger.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

Recommendation of the Company's Board of Directors

At a meeting duly held on April 9, 2003, the Board by unanimous vote (with
one director, Mr. Schneider, recused) (i) approved the Merger Agreement and the
transactions contemplated thereby, including the Offer, the Merger and the
Tender and Voting Agreements; (ii) declared that the Merger Agreement is
advisable; (iii) determined that the terms of the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, are fair
to, and in the best interests of, the Company and its stockholders; and (iv)
recommended that the Company's stockholders accept the Offer, tender their
Shares pursuant to the Offer and approve and adopt the Merger Agreement and the
Merger, if required by applicable law. ACCORDINGLY, THE BOARD RECOMMENDS THAT
THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER AND VOTE TO ADOPT THE MERGER AGREEMENT AND THE MERGER, IF
REQUIRED BY APPLICABLE LAW.

Background of the Offer and the Merger

The following information was prepared by the Company with the assistance
of Parent. Information solely about Purchaser and Parent was provided by Parent,
and the Company has not verified the accuracy or completeness of any information
regarding meetings or discussions in which the Company or its representatives
did not participate.

In early 2002, the Board contacted Wachovia to initiate discussions
regarding an engagement of Wachovia as the Company's advisor to explore a
possible sale or merger of the Company. In March 2002, the Board authorized the
Company to engage Wachovia as its advisor in order to explore a possible merger
or sale of the Company.

In connection with the sale process, Wachovia prepared a Confidential
Information Memorandum in March and April 2002. Wachovia conducted a marketing
process and began placing calls in mid-May to potential buyers, which Wachovia
and the Company believed, based on a variety of factors, might be interested in
acquiring the Company. Wachovia contacted a total of 50 potential buyers and
distributed 26 copies of the Confidential Information Memorandum to 26 of these
companies, including Parent, that had expressed an interest in receiving it.

On June 11, 2002, Parent was contacted by Wachovia in connection with the
sale process and later that day, Parent and Wachovia executed the
Confidentiality Agreement in order to facilitate the disclosure of confidential
business information for the purpose of evaluating the acquisition of the
Company. Of the parties contacted by Wachovia in connection with the sale
process, eight companies, including Parent, submitted preliminary indications of
interest in June 2002.

Six of the eight parties, including Parent, which submitted indications of
interest met with the Company's senior management in July and August 2002 for a
detailed presentation regarding the Company's operations and were provided
access to due diligence materials prepared by management.

Specifically, with regard to Parent, on August 5, 2002, various members of
Parent mangement, including Ray Boushie, President of Crane Aerospace, Eric
Fast, Parent's President and Chief Executive Officer, James Whitelock, Parent's
Director of Corporate Development, and Lou Bieck, President of Interpoint (a
wholly owned subsidiary of Parent), attended management presentations regarding
the Company's business. On August 5 and 6, 2002, representatives of Parent
visited a data room prepared by the Company to conduct initial due diligence. On
August 21, 2002, Parent received a letter from Wachovia sent on behalf of the
Company soliciting revised indications of interest from interested bidders.

Wachovia thereafter received revised indications of interest from four
parties in September, 2002, including Parent. Parent's indiciation of interest
proposed an acquisition of all of the Shares for between $11.84 and $12.59 per
Share payable in cash. Parent also provided comments to Wachovia on the form of
merger agreement proposed by the Company, including a proposal to structure any
transaction as a tender offer followed by a merger. Parent's indication of
interest stated that it was based on a number of assumptions, including
assumptions concerning the Company's debt and cash levels, certain anticipated
environmental liabilities, and the prior sale of the Company's wireless and
semiconductor businesses. Parent also indicated that its indication of interest
was subject to Parent's satisfaction with the results of a contemplated
environmental review of the Company, and that any transaction would require the
approval of Parent's Board of Directors and clearance under the HSR Act.

Between September 6 and September 13, 2002, representatives of the Company
and Wachovia engaged in several discussions with Mr. Whitelock in which the
Company sought to persuade Parent to increase its indicated price range and
sought further clarification regarding Parent's September 6, 2002 indication of
interest, including Parent's assumptions underlying the price range.

During the next several weeks, various members of Parent management and
senior and operating management at Signal discussed numerous aspects of the
operations and financial performance of the Company's businesses, and additional
information was supplied in response to Parent's requests. On October 1, 2002,
several members of Parent management held a conference call with representatives
of Wachovia and Mr. Schneider, a Company director, during which they discussed
current and anticipated levels of defense spending by the U.S. government and
the history of the Company and its businesses.

Based on the revised indications of interest received in September 2002,
three parties, including Parent, attended presentations by operating management
at each of the Company's four divisions in late September and early October 2002
and were provided access to additional operational and financial information
about each division.

Following the divisional presentations and diligence, Wachovia received two
revised proposals, including one from Parent, to purchase the Company in October
and early November 2002.

Parent's proposal, delivered orally on October 28, 2002 by J. P. Morgan
Securities, Inc. ("JPMorgan"), Parent's financial advisor, indicated that Parent
would consider a price for the Company based upon an imputed firm value of $134
million for the Company's defense businesses, subject to adjustment

for cash and debt levels and the estimated value of certain legacy liabilities,
including a significant unresolved environmental litigation, reflecting a per
Share price of approximately $11.50. Representatives of Wachovia indicated to
JPMorgan that the Company had hoped to receive a higher valuation and
subsequently provided Parent with certain financial projections for the
Company's businesses.

On November 4, 2002, Parent submitted to the Company a non-binding written
proposal to acquire the Shares at a price of $11.47 per Share. Parent indicated
that it had sufficient funds available to complete a transaction at that price
and that it intended to retain the operating management of the Company. Parent
also indicated that its price proposal was based on the assumptions that (i) the
Company would have $4.2 million in outstanding debt to third parties, (ii) that
the cost of settling pending environmental litigation with Eaton Corporation
would not exceed $5 million, (iii) that various other specified contingent
liabilities would not exceed $6.3 million, and (iv) the Company would need a
minimum cash balance of $5 million to support normal operations. Along with its
proposal, Parent submitted a worksheet detailing Parent's calculation of its
proposed purchase price. In its proposal, Parent also indicated that it might be
willing to increase its price depending upon the Company's cash position.

Parent's November 4, 2002 proposal stated that it was subject to a number
of conditions, including:

o satisfactory completion of its due diligence (including environmental,
contract and budget reviews, a review of the impact of the prior
divestiture of the Company's wireless business, and tax review);

o approval by Parent's Board of Directors;

o HSR clearance; and

o execution of a definitive merger agreement.

On November 5, 2002, representatives of JPMorgan and of Wachovia discussed
the assumptions underlying Parent's proposal by telephone.

On November 11, 2002, George Lombard, the Company's Chairman and Chief
Executive Officer, had a telephone conversation regarding the transaction with
Mr. Fast. Mr. Lombard indicated that Parent's November 4, 2002 proposal was not
satisfactory to the Company and that there was at least one other party that
had shown strong interest that Mr. Lombard expected would result in a superior
offer. Mr. Lombard encouraged Mr. Fast to improve Parent's proposal. Mr. Fast
stated that, on the basis of the information available at that time, Parent
could not agree to improve its proposal. He suggested that the Company should
pursue the alternative proposal if they deemed the proposal superior, but that
Parent would be willing to resume discussions with the Company if new
information became available.

In December 2002, the prospective bidder that submitted the second proposal
informed Wachovia that it was not interested in continuing discussions at a
higher valuation. Prior to such time Wachovia had asked such bidder to consider
increasing its proposed purchase price.

On December 3, 2002 representatives of Wachovia, on behalf of the Company,
provided new information. Such information indicated that the Company was on
track to achieve EBITDA for the year ended December 31, 2002 in excess of that
previously indicated to Parent, that the Company's cash balances had increased
and that the Eaton environmental litigation was expected to be resolved on terms
more favorable than had been previously indicated to Parent. On December 10,
2002, Mr. Lombard telephoned Mr. Whitelock to discuss the worksheet calculations
submitted on November 4 with Parent's proposal and Mr. Lombard proposed the
resumption of discussions regarding a possible transaction. On or about December
16, 2002, Parent resumed its due diligence investigation of the Company and its
business through additional conversations with the Company management and the
review of additional documents.

On January 10, 2003, representatives of JPMorgan discussed with
representatives of Wachovia a proposed purchase price of $13.10 per Share,
subject to receipt of a six-week exclusivity agreement from the Company and
certain other terms. The representatives of Wachovia indicated that such
proposal would not be acceptable to the Board and suggested that the senior
representatives of Parent and the Company have a discussion to see whether an
agreement could be reached. On January 10, 2003, Mr. Fast

and Mr. Lombard had a telephone conversation regarding the transaction. Mr.
Lombard reviewed the factors that, in his view, would support a higher proposal
from Parent, and he indicated that a price of approximately $14.00 per Share
would be acceptable for a sale of the Company. At the conclusion of this
conversation, Mr. Fast indicated that Parent would increase its proposal to
$13.50 per Share. On January 13, 2003, Parent submitted a revised non-binding
written proposal to acquire the Company at $13.50 per Share, subject to the same
conditions outlined in the November 4, 2002 proposal, and also including a
proposed exclusivity period through February 25, 2003. After revisions to the
January 13, 2003 letter to reflect comments from the Company and its counsel
conveyed by representatives of Wachovia, it was executed by the parties on
January 17, 2003. The exclusivity agreement provided that the Company would not
solicit or negotiate, either directly or indirectly, or enter into any agreement
with any other person or entity, prior to February 25, 2003, with respect to a
sale of the Company or a substantial part of its assets, and that the Company
would notify Parent promptly after the receipt by the Company of any proposal in
respect of such a transaction. The exclusivity agreement did not prohibit the
Company from furnishing information to, or entering into discussions or
negotiations or an agreement with, any person or entity that made an
unsolicited, bona fide written proposal in respect of such a transaction if the
Board, after consultation with its financial and legal advisors, determined in
good faith that such transaction was reasonably likely to be more favorable to
the stockholders of the Company, from a financial point of view, than the terms
stated in Parent's proposal, and that such action was necessary for the Board to
comply with its fiduciary duties to stockholders. The exclusivity agreement
provided that if the Board made any of the determinations referred to in the
preceding sentence, the Company would reimburse Parent for its out-of-pocket
expenses (up to $250,000).

Between January 23, 2003, and February 20, 2003, representatives of Parent
met with management and other representatives of the Company at the Company's
various facilities and otherwise continued its due diligence investigation of
the Company. On February 3, 2003, Robert Nelsen, the Company's Chief Financial
Officer, informed representatives of Parent that on January 30, 2003, the Board
had granted options to purchase 155,000 shares of Common Stock to certain
directors and an officer of the Company.

At its regular meeting on January 27, 2003, the Board of Directors of
Parent was briefed on the status of the proposed transaction with the Company,
and at the regular meeting of the Parent Board of Directors on February 24,
2003, Mr. Boushie, Mr. Bieck and representatives of JPMorgan made detailed
presentations regarding the proposed transaction. The Board of Directors of the
Company was also briefed on the proposed transaction with Parent at its regular
meeting on February 24, 2003.

On February 24, 2003, the Company's Board of Directors met with Wachovia to
discuss the proposal from Parent. Wachovia gave a detailed preliminary
presentation during which it reviewed with the Board the summary terms of the
proposal as well as its preliminary valuation and the valuation methodologies it
expected to use in evaluating the consideration to be received under the
proposal.

At a meeting with Mr. Lombard and Mr. Nelsen on March 6, 2003, Mr. Fast and
Mr. Whitelock raised a number of issues concerning the Company elicited during
the due diligence process, including certain lower operating results for the
defense business in 2002 compared to the Company's expectations in December,
potentially lower orders for the first quarter of 2003 compared to the Company's
operating plan, a higher than anticipated liability in respect of the Weymouth
environmental matter, the costs associated with continuing directors' and
officers' insurance coverage and the option grants referred to above. Mr. Fast
and Mr. Lombard discussed the implications of these and other matters on the
value of the Company. Later on March 6, 2003, the Board met to consider Parent's
proposal and that day's discussions between Mr. Fast and Mr. Lombard. Over the
next several days, the parties continued to discuss Parent's proposal, and on
March 10, 2003, Parent verbally submitted a revised proposal of $13.25 per
Share.

At a meeting of the Board held on April 9, 2003, Wachovia delivered its
oral opinion that, as of April 9, 2003, the Per Share Amount to be received by
the holders of Shares in the Offer and subsequent Merger is fair, from a
financial point of view, to such holders. During this meeting, the Board voted
to approve the Offer and Merger, subject to satisfactory completion of
definitive documentation. Wachovia subsequently confirmed its opinion in writing
on April 16, 2003, to the effect that, as of April 16, 2003, the Per Share
Amount to be received by the holders of Shares in the Offer and subsequent
Merger is fair, from a financial point of view, to such holders.

On April 11, 2003, the Parent Board of Directors convened by telephone and
approved the Offer and the Merger, subject to the satisfactory completion of
definitive documentation.

In connection with the negotiation of the Merger Agreement, several drafts
of the Merger Agreement were exchanged and the attorneys for Parent and the
Company had several telephonic negotiation sessions. The principal issues
discussed in these negotiations were the conditions to the Offer, the scope and
nature of indemnification for the Company's directors and officers after the
Merger, the limits of certain representations and warranties, the treatment of
the Company's Stock Options and payments due upon termination of the Merger
Agreement.

On April 16, 2003, Parent, the Company and Purchaser executed the Merger
Agreement and, after the close of trading on the New York Stock Exchange,
publicly announced the agreement to acquire the Company.

Reasons for the Recommendation of the Board

In approving the Merger Agreement and the transactions contemplated
thereby, and recommending that all holders of Shares accept the Offer and tender
their Shares pursuant to the Offer, the Board consulted with the Company's
senior management and its legal and financial advisors and considered a number
of factors including, but not limited to, the following:

o the facts that the Offer Price represents: (1) a premium of
approximately 17.6% over the $11.27 closing sales price of the Common
Stock on the Nasdaq National Market on April 15, 2003, the last full
trading day preceding the execution of the Merger Agreement; and (2) a
premium of approximately 29.4% over the $10.24 average of the closing
sales prices of the Common Stock on the Nasdaq National Market since the
beginning of 2003.

o the opinion of Wachovia, subsequently confirmed in writing as of April
16, 2003, that, as of such date and based on and subject to the matters
described in the opinion, the $13.25 Offer Price was fair, from a
financial point of view, to holders of Shares. The full text of the
written opinion, which sets forth the assumptions made, the procedures
followed, the matters considered, and the limitations of the review
undertaken by Wachovia, is attached as Annex A to this Statement and is
incorporated herein by reference. Stockholders are urged to, and should,
read the opinion of Wachovia in its entirety.

o the auction process undertaken to solicit third party indications of
interest in the acquisition of the Company and the fact that no other
third party presented the Company with a viable acquisition proposal at
a price equal to or exceeding the Offer Price.

o a review of the general terms and conditions of the Merger Agreement,
and, with the assistance of legal counsel, consideration in detail of
several specific provisions of the Merger Agreement, including: (i) the
circumstances under which Purchaser is required to extend the Offer;
(ii) the ability of the Company to engage in any negotiations
concerning, provide any confidential information or data to, and
otherwise have any discussions with any person relating to, a competing
transaction under certain limited circumstances; (iii) the ability of
the Company to terminate the Merger Agreement in the exercise of its
fiduciary duties under specified conditions and upon the payment of a
termination fee, having recognized that such fees could have the effect
of impeding other offers, but believing such fees to be within the range
of reasonable termination fees provided for in comparable transactions
and not to be a preclusive deterrent to competing offers; and (iv) the
limited ability of Parent and Purchaser to terminate the Offer or the
Merger Agreement.

o the fact that the Offer and the Merger provide for a prompt cash tender
offer for all Shares to be followed by a merger for the same
consideration, thereby enabling all of the Company's stockholders to
obtain the benefits of the transaction in exchange for their Shares at
the earliest possible time.

o the extensive arms-length negotiations between the Company and Parent
leading to the belief of the Board that $13.25 in cash per Share
represented the highest price per Share that could reasonably be
expected to be received from Parent.

o the fact that Parent's and Purchaser's obligations under the Offer are
not subject to any financing condition, and the representations of
Parent and Purchaser that they have, or will have prior to the
consummation of the Offer, sufficient funds available to them to
consummate the purchase of all the Shares in accordance with the terms
of the Offer and the Merger Agreement.

o the opportunities and challenges facing the Company and the
uncertainties surrounding the Company's ability to achieve business
success.

o the possibility that, although the Offer provides the Company's
stockholders the opportunity to realize a premium over the price at
which the Shares traded prior to public announcement of the Offer and
the Merger, the price of the Shares might have increased in the future
to a price greater than that being offered in the Offer and the Merger;
however, because of the risks and uncertainties associated with the
Company's prospects, the Board concluded that this detriment was not
reasonably quantifiable and that obtaining a substantial cash premium
for the Shares now was preferable to affording its stockholders a
speculative potential future return.

o the potential risk of a deterioration of the Company's stock price and
the consequent risk that future acquisition proposals, if any, might be
on terms significantly less favorable to the Company and its
stockholders.

The foregoing discussion of information and factors considered by the Board
is not intended to be exhaustive, but is believed to include all of the material
factors considered by the Board. In view of the variety of factors considered in
connection with its evaluation of the Offer and the Merger, the Board did not
find it practicable to, and did not, quantify or otherwise assign relative
weights to the specific factors considered in reaching its determinations and
recommendations. In addition, individual members of the Board may have given
different weight to different factors.

Opinion of the Company's Financial Advisor

On March 1, 2002 the Company retained Wachovia to act as its financial
advisor in connection with exploring a possible sale or merger of the Company.
As part of its engagement, Wachovia was requested to consider whether the cash
consideration to be received by the holders of Common Stock in the Offer and
subsequent Merger was fair, from a financial point of view, to such
stockholders. At a meeting of the Board held on April 9, 2003, Wachovia
delivered its oral opinion to the Board that, as of April 9, 2003, the Per Share
Amount to be received by the holders of Shares in the Offer and subsequent
Merger was fair, from a financial point of view, to such holders. Wachovia
subsequently confirmed its opinion to the Board in writing on April 16, 2003, to
the effect that, as of April 16, 2003, the Per Share Amount to be received by
the holders of Shares in the Offer and subsequent Merger was fair, from a
financial point of view, to such holders.

The full text of Wachovia's written opinion is attached as Annex A to this
Statement, and describes the assumptions made, matters considered and limits on
the review undertaken. The description of Wachovia's opinion contained in this
Statement should be reviewed together with the full text of the written opinion,
which you are urged to read carefully in its entirety. The summary of the
opinion of Wachovia set forth in this Statement is qualified in its entirety by
reference to the full text of Wachovia's written opinion, which is attached as
Annex A hereto.

Wachovia's opinion is directed for the information and use of the Board in
connection with its consideration of the transactions contemplated by the Merger
Agreement. Wachovia's opinion does not address the merits of the underlying
decision by the Company to enter into the Merger Agreement and does not
constitute a recommendation as to whether or not any holder of Shares should
tender such Shares in the Offer or vote for the Merger.

In arriving at its opinion, Wachovia, among other things:

o Reviewed the Merger Agreement, including the financial terms of the
Merger Agreement.

o Reviewed certain publicly available business, financial and other
information regarding the Company.

o Reviewed certain business, financial and other information regarding the
Company and its prospects that was furnished to Wachovia by, and that
Wachovia discussed with, management of the Company.

o Reviewed the current and historical market prices and trading activity
of the Company's Common Stock.

o Compared the publicly available business, financial and other
information regarding the Company with similar information regarding
certain other publicly traded companies that Wachovia deemed to be
relevant.

o Compared the proposed financial terms of the Merger Agreement with the
financial terms of certain other business combinations and transactions
that Wachovia deemed to be relevant.

o Developed discounted cash flow models of the Company.

o Developed leveraged buyout models of the Company.

o Analyzed the premiums paid for certain other business combinations and
transactions that Wachovia deemed to be relevant.

o Considered other information such as financial studies, analyses and
investigations, as well as financial and economic and market criteria,
that Wachovia deemed to be relevant.

In connection with its review, Wachovia relied upon the accuracy and
completeness of the foregoing financial and other information it obtained and
reviewed for the purpose of its opinion, and Wachovia did not assume any
responsibility for any independent verification of such information. Wachovia
relied upon assurances of the management of the Company that the Company is not
aware of any facts or circumstances that would make such information about the
Company inaccurate or misleading. With respect to the Company's financial
forecasts, Wachovia assumed that they have been reasonably prepared and reflect
the best currently available estimates and judgments of management as to the
expected future financial performance of the Company. Wachovia discussed such
forecasts and estimates, as well as the assumptions upon which they are based,
with management of the Company, but assumed no responsibility for and expressed
no view as to the Company's financial forecasts or the assumptions upon which
they are based. In arriving at its opinion, Wachovia did not conduct any
physical inspection of the facilities of the Company and did not make and was
not provided with any evaluations or appraisals of the assets or liabilities of
the Company. Wachovia's investigation in connection with rendering its opinion
is limited to whether the Offer Price in cash to be received by the holders of
the Shares in connection with the Offer and the Merger is fair to such holders,
from a financial point of view. Wachovia relied on the advice of counsel to the
Company as to all legal matters with respect to the Company and the transactions
contemplated in the Merger Agreement.

In rendering its opinion, Wachovia assumed that the transactions
contemplated by the Merger Agreement will be consummated on the terms described
in the Merger Agreement, without waiver of any material terms or conditions, and
that in the course of obtaining any necessary legal, regulatory or third party
consents and/or approvals, no restrictions will be imposed that will have a
material adverse effect on such transactions or other actions contemplated by
the Merger Agreement. Wachovia's opinion is necessarily based on economic,
market, financial and other conditions as they exist on and can be evaluated as
of the date of the opinion. Although subsequent developments may affect its
opinion, Wachovia has no obligation to update, revise or reaffirm its opinion.
Wachovia's opinion does not address the relative merits of the transactions
contemplated by the Merger Agreement compared with other business strategies
that may have been considered by the Company's management and/or the Board.
Wachovia did not consider for the purposes of its opinion the prices at which
the Company's Common Stock will trade following the announcement of the Offer
and the Merger.

The Company imposed no other limitations, and gave no other instructions,
with respect to the investigations made or the procedures followed by Wachovia
in rendering its opinion. This summary is not a complete description of
Wachovia's opinion to the Board or the financial analyses performed and factors
considered by Wachovia in connection with its opinion. The preparation of a
fairness opinion is a complex analytical process involving various
determinations as to the most appropriate and relevant methods of

financial analysis and the application of those methods to the particular
circumstances and, therefore, a fairness opinion is not readily susceptible to
summary description. In arriving at its opinion, Wachovia did not attribute any
particular weight to any analysis or factor that it considered, but rather made
qualitative judgments as to the significance and relevance of each analysis and
factor. The final analyses summarized below include information presented in
tabular format. Accordingly, Wachovia believes that its analyses and this
summary must be considered as a whole and that selecting portions of its
analyses and factors or focusing on information presented in tabular format,
without considering all analyses and factors or the narrative description of the
analyses, including the methodologies and assumptions underlying the analyses,
could create a misleading or incomplete view of the processes underlying
Wachovia's analyses and opinion. The tables alone do not constitute a complete
description of the financial analyses.

The following is a summary of the material financial and comparative
analyses utilized by Wachovia in arriving at its opinion.

Comparison to Publicly Held Companies. Wachovia compared financial, operating
and stock market data of the Company to the following publicly-traded companies
that participate predominantly, or in part, in the defense and aerospace
industry:

Anaren, Inc.
Andrew Corporation
Comtech Telecommunications Corporation
Cubic Corporation
DRS Technologies, Inc.
EDO Corporation
General Dynamics Corporation
Harris Corporation
Herley Industries, Inc.
ITT Industries, Inc.
L-3 Communications Holdings, Inc.
Lockheed Martin Corporation
Northrop Grumman Corporation
Raytheon Company
Teledyne Technologies, Inc.

Utilizing publicly available information for each of the comparable
companies, Wachovia calculated, among other things, the multiples, based on
closing stock prices on April 15, 2003, of:

-- Enterprise value (defined as equity market value plus total debt less
cash) to sales for the Company's latest twelve month ("LTM") period;

-- Enterprise value to LTM earnings before interest and taxes ("EBIT");

-- Enterprise value to LTM earnings before interest, taxes, depreciation
and amortization ("EBITDA"); and

-- Enterprise value to calendarized 2003 estimated EBITDA.

The high multiples for the selected comparable companies were as follows:

VALUATION METRIC
- ----------------

Enterprise value to LTM sales ..................... 2.0x
Enterprise value to LTM EBIT ...................... 21.9x
Enterprise value to LTM EBITDA .................... 14.8x
Enterprise value to 2003 estimated EBITDA ......... 9.8x

The low multiples for the selected comparable companies were as follows:

VALUATION METRIC
- ----------------

Enterprise value to LTM sales ..................... 0.5x
Enterprise value to LTM EBIT ...................... 8.2x
Enterprise value to LTM EBITDA .................... 4.1x
Enterprise value to 2003 estimated EBITDA ......... 5.9x

The median multiples for the selected comparable companies were as
follows:

VALUATION METRIC
- ----------------

Enterprise value to LTM sales ..................... 1.0x
Enterprise value to LTM EBIT ...................... 12.0x
Enterprise value to LTM EBITDA .................... 9.3x
Enterprise value to 2003 estimated EBITDA ......... 8.0x

Based on the foregoing, Wachovia determined a reference range for an
implied value per Share of $6.04 to $18.25 and a median implied value per Share
of $11.94. This compares with the Offer Price of $13.25.

With regard to the comparable public companies analysis summarized above,
Wachovia selected comparable public companies on the basis of various factors,
including the size of the public company and the similarity of the lines of
business. No public company used as a comparison, however, is identical to the
Company. Accordingly, these analyses are not purely mathematical, but also
involve complex considerations and judgments concerning the differences in
financial and operating characteristics of the comparable companies and other
factors. These factors could affect the public trading value of the comparable
companies to which the Company is being compared. Such qualitative judgments
are reflected in the Wachovia opinion.

Comparison to Recent M&A Transactions. Using publicly available information,
Wachovia considered selected transactions in, or relating in part to, the
defense and aerospace industry that it deemed to be relevant. Specifically,
Wachovia reviewed the following transactions:

ACQUIROR TARGET
- ------------------------------------------- -------------------------------------------------

DRS Technologies, Inc. .................... Paravant, Inc.
Northrop Grumman Corporation .............. TRW, Inc.
Company B ................................. Company A (non-public)
DRS Technologies, Inc. .................... Eaton Corporation (Navy Controls Division)
EDO Corporation ........................... Condor Systems, Inc.
Titan Corporation ......................... Jaycor, Inc.
L-3 Communications Holdings, Inc. ......... Raytheon Company (Aircraft Integration Systems)
L-3 Communications Holdings, Inc. ......... SY Technology, Inc.
DRS Technologies, Inc. .................... Boeing Company, Sensors and Electronics Business
General Dynamics Corporation .............. Integrated Information Systems (Motorola)
Titan Corporation ......................... Datron Systems, Inc.
Northrop Grumman Corporation .............. Litton Industries, Inc.
Harris Corporation ........................ Exigent International, Inc.
Comtech Telecommunications Corp. .......... MPD Technologies, Inc.
ONCAP, L.P. ............................... BAE Systems Canada
BAE Systems plc ........................... Lockheed Martin -- Sanders
Smiths Industries plc ..................... Fairchild Defense (Orbital Sciences)
Veritas Capital, Inc. ..................... Tech-Sym Corporation
Northrop Grumman Corporation .............. Comptek Research, Inc.
Thomson-CSF Ventures ...................... Racal Electronics plc
EDO Corporation ........................... AIL Technologies, Inc.

Using publicly available information concerning each of the target
companies, Wachovia calculated, based on historical financial information for
the LTM period immediately preceding the announcement of each of the
transactions, the following multiples.

The high multiples for the selected comparable transactions were as
follows:

VALUATION METRIC
- ----------------

Enterprise value to LTM sales .......... 2.0x
Enterprise value to LTM EBIT ........... 21.3x
Enterprise value to LTM EBITDA ......... 14.9x

The low multiples for the selected comparable transactions were as
follows:

VALUATION METRIC
- ----------------

Enterprise value to LTM sales .......... 0.4x
Enterprise value to LTM EBIT ........... 6.3x
Enterprise value to LTM EBITDA ......... 5.4x

The median multiples for the selected comparable transactions were as
follows:

VALUATION METRIC
- ----------------

Enterprise value to LTM sales .......... 1.0x
Enterprise value to LTM EBIT ........... 11.0x
Enterprise value to LTM EBITDA ......... 7.8x

Based on the foregoing, Wachovia determined a reference range for an
implied value per Share of $7.18 to $18.40 and a median implied value per Share
of $10.26. This compares with the Offer Price of $13.25.

No company utilized in the comparable transactions analysis is identical
to the Company, nor is any transaction identical to the Offer and the Merger.
Therefore, a purely quantitative comparable transaction analysis would not be
dispositive in the context of the Offer and the Merger and an appropriate use
of

such analysis involves qualitative judgments concerning the differences between
the characteristics of these transactions and the Offer and the Merger that
would affect the value of the target companies and of the Company. Such
qualitative judgments are reflected in the Wachovia opinion.

Discounted Cash Flow Analysis. Wachovia performed discounted cash flow analyses
to estimate a range of present values per Share, assuming the Company continued
to operate as a stand-alone entity. Wachovia determined the range of present
values of the Company by calculating the sum of (i) the present value of
projected free cash flows of the Company over the five-year period 2003 through
2007, and (ii) the present value of the estimated terminal value of the Company
in year 2007. In calculating a terminal value for the Company, Wachovia applied
both a perpetual growth rate ranging from 1% to 5% to the Company's projected,
normalized 2007 free cash flow, as well as a terminal multiple ranging from
6.0x to 8.0x to the Company's projected 2007 EBITDA. The projected free cash
flows of the Company used by Wachovia in its analyses were provided by
management. The free cash flows and terminal value were discounted to present
value using discount rates ranging from 11% to 13%. Wachovia viewed this range
of discount rates as appropriate for companies with the risk characteristics of
the Company and confirmed the reasonableness of such assumptions with the
Company's management.

Based on the foregoing, Wachovia determined a reference range for an
implied value per Share of $8.41 to $13.33 and a median implied value per Share
of $10.93. This compares with the Offer Price of $13.25.

The discounted cash flow analyses of the Company do not necessarily
indicate actual values or actual future results and do not purport to reflect
the prices at which any securities may trade at the present or at any time in
the future. The range of discount rates applied to the Company referred to in
the above paragraph was based on several factors, including Wachovia's
knowledge of the Company and the industry in which it operates, the business
risk of the Company, and the overall interest rate environment as of April 15,
2003. Discounted cash flow analysis is a widely used valuation methodology, but
the results of this methodology are highly dependent on the numerous
assumptions that must be made, including earnings growth rates, terminal
values, and discount rates.

Leveraged Buyout Analysis. Using the same financial projections employed in the
discounted cash flow analysis described above, Wachovia performed a leveraged
buyout analysis for the Company. Wachovia assumed that a financial sponsor
investing in the Company would expect an annual internal rate of return for
five years on its invested equity of between 23% to 28%. Wachovia also assumed
that the leveraged buyout of the Company could be financed with senior debt (at
a 4.9% interest rate) of 2.5x the fiscal 2002 EBITDA of the Company and with
subordinated debt (at a 12.5% interest rate with attached warrants representing
3.0% ownership) of 1.0x the fiscal 2002 EBITDA of the Company.

Based on the foregoing, Wachovia determined a reference range for an
implied value per Share of $8.70 to $10.25 and a median implied value per Share
of $9.35. This compares with the Offer Price of $13.25.

The leveraged buyout analysis of the Company does not necessarily indicate
actual values or actual future results and does not purport to reflect the
prices at which any securities may trade at the present or at any time in the
future. The expected annual internal rates of return and leverage ratios
referred to in the above paragraph were based on several factors, including
Wachovia's knowledge of the Company and the industry in which it operates, the
business risk of the Company, and the overall lending and private equity
markets as of April 15, 2003. The results of this methodology are highly
dependent on the numerous assumptions that must be made, including earnings
growth rates, expected internal rates of return, and leverage ratios.

Premiums Paid Analysis. Wachovia prepared a premiums paid analysis by
multiplying various Company historical closing stock prices by the median
premium paid in 94 transactions involving publicly traded U.S. targets
announced between January 1, 1998 and April 15, 2003 with enterprise values
between $50 million and $300 million. For the Company and each of the 94 U.S.
targets, Wachovia determined the premium paid by comparing the consideration
offered to the Company and each of the 94 U.S. targets with the closing stock
price of each such company one day, one week, four weeks, 60 days, 90 days, and
180 days prior to the announcement date of each transaction, respectively. For
the Company, Wachovia

used April 15, 2003, which was assumed to be the last full trading day prior to
the execution of the Merger Agreement, in which to calculate the implied value
per Share.

The median premiums paid in the 94 transactions analyzed by Wachovia were
as follows:

PREMIUM TO: MEDIAN
- ----------------------------------------- ----------

One Day Prior to Announcement ........... 30.5%
One Week Prior to Announcement .......... 33.9%
4 Weeks Prior to Announcement ........... 44.0%
60 Days Prior to Announcement ........... 43.2%
90 Days Prior to Announcement ........... 42.2%
180 Days Prior to Announcement .......... 32.8%

Based on the foregoing, Wachovia determined a reference range for an
implied value per Share of $11.11 to $19.19 and a median implied value per
Share of $15.02. This compares with the Offer Price of $13.25.

No target company utilized in the premiums paid analysis is identical to
the Company, nor is any transaction identical to the Offer and the Merger.
Therefore, a purely quantitative premiums paid analysis would not be
dispositive in the context of the Offer and the Merger and an appropriate use
of such analysis involves qualitative judgments concerning the differences
between the characteristics of these transactions and the Offer and the Merger
that would affect the value of the target companies and the Company. Such
qualitative judgments are reflected in Wachovia's opinion.

Historical Stock Price Performance Analysis. Wachovia analyzed the closing
prices of the Common Stock over the last three years, beginning April 16, 2000.
Based on this analysis, Wachovia calculated the following values of the Common
Stock during this period.

High ........................... $ 25.50
Low ............................ $ 3.60
Average ........................ $ 10.75
Close (April 15, 2003) ......... $ 11.27

These compare with the Offer Price of $13.25.

Wachovia analyzed the closing prices of the Common Stock over the last
year, beginning April 16, 2002. Based upon this analysis, Wachovia calculated
the following values of the Common Stock during this period.

High ........................... $ 12.75
Low ............................ $ 6.44
Average ........................ $ 9.65
Close (April 15, 2003) ......... $ 11.27

These compare with the Offer Price of $13.25.

Wachovia analyzed the closing prices of the Common Stock over the last six
months, beginning October 18, 2002. Based upon this analysis, Wachovia
calculated the following values of the Common Stock during this period.

High ........................... $ 12.75
Low ............................ $ 8.55
Average ........................ $ 10.70
Close (April 15, 2003) ......... $ 11.27

These compare with the Offer Price of $13.25.

ITEM 5. PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

The Company retained Wachovia pursuant to an engagement letter, dated as of
February 28, 2002 (the "Wachovia Engagement Letter"), to act as its exclusive
financial advisor with respect to any transaction relating to the Company's
defense business and to render an opinion to the Board as to the fairness, from
a financial point of view, to the Company's stockholders of any proposed
transaction. Upon execution of the Wachovia Engagement Letter, the Company paid
Wachovia a non-refundable cash fee of $75,000 for financial advisory services
(the "Advisory Fee"). The Company will pay Wachovia an additional fee of
$2,295,268 upon the successful completion of the Merger (the "Transaction Fee").
The Advisory Fee will be credited against the Transaction Fee. The Company has
also agreed to (i) reimburse Wachovia for reasonable expenses incurred by
Wachovia in connection with its services provided to the Company, provided that
Wachovia shall not incur expenses in excess of $25,000 in the aggregate without
prior notice to the Company, and (ii) indemnify Wachovia and each of its
officers, directors, employees, affiliates, agents, counsel and other advisors,
and each other person or entity who controls any of them, against certain
liabilities and expenses arising out of Wachovia's engagement or performance
under the Wachovia Engagement Letter, the transactions contemplated thereby or
the services rendered by Wachovia under the Wachovia Engagement Letter.

With Wachovia's consent, the Company retained Needham & Company, Inc.
("Needham") pursuant to the terms of an engagement letter dated, as of March 4,
2003, to act as its non-exclusive financial advisor in connection with a
possible transaction involving Parent. Upon successful completion of the Merger,
the Company will pay Needham a fee of $100,000 for services rendered by Needham
under the Needham Engagement Letter. The Company has also agreed to (i)
reimburse Needham for reasonable expenses incurred by Needham in connection with
its engagement, provided that Needham shall not incur expenses in excess of
$10,000 in the aggregate without prior notice to the Company, and (ii) indemnify
Needham and its affiliates, the respective directors, officers, employees and
agents of Needham and its affiliates, and each other person, if any, controlling
Needham or any of its affiliates, against certain liabilities and expenses
arising out of Needham's engagement under the Needham Engagement Letter, any
transaction contemplated by such engagement or any indemnified person's role in
connection therewith.

Except as disclosed herein, neither the Company nor any person acting on
its behalf has employed, retained or compensated any person to make
solicitations or recommendations to the Company's stockholders concerning the
Offer or the Merger.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

No transactions in the Shares have been effected during the past 60 days by
the Company or its subsidiary or, to the knowledge of the Company, by any
executive officer, director or affiliate of the Company.

ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

Except as set forth elsewhere in this Statement, the Company is not
currently undertaking or engaged in any negotiations that relate to: (i) a
tender offer for or other acquisition of the Company's securities by the
Company, any subsidiary of the Company or any other person; (ii) any
extraordinary transaction, such as a merger, reorganization or liquidation,
involving the Company or any subsidiary of the Company; (iii) any purchase,
sale, or transfer of a material amount of assets of the Company or any
subsidiary of the Company; or (iv) any material change in the present dividend
rate or policy, or indebtedness or capitalization of the Company.

Except as set forth elsewhere in this Statement, there are no transactions,
resolutions of the Board, agreements in principle, or signed contracts entered
into that relate to one or more of the events referred to in the preceding
paragraph

ITEM 8. ADDITIONAL INFORMATION.

Information Statement

The Information Statement attached as Annex B to this Statement is being
furnished in connection with the possible designation by Parent, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board other than at
a meeting of the Company's stockholders, and is incorporated herein by
reference.

Vote Required to Approve the Merger

Under Section 253 of the DGCL, if Purchaser acquires, pursuant to the Offer
or otherwise, at least 90% of the outstanding Shares, Purchaser would be able to
effect the Merger without a vote or meeting of the Company's stockholders. If
Purchaser does not acquire at least 90% of the outstanding Shares, Purchaser
would have to seek the approval of the Company's stockholders of the Merger
Agreement and the Merger at a meeting. In that instance, approval of the Merger
Agreement and the Merger would require the affirmative vote of the holders of a
majority of the outstanding Shares. If the conditions to the Offer are satisfied
and the Offer is completed, Purchaser would own a sufficient number of Shares to
ensure that the Merger Agreement and the Merger would be approved by the
Company's stockholders.

Appraisal Rights

No appraisal rights are available to holders of Shares in connection with
the Offer. However, if the Merger is consummated, holders of Shares have certain
rights under Section 262 of the DGCL to dissent and demand appraisal of, and
payment in cash for the fair value of, their Shares. Such rights, if the
statutory procedures are complied with, could lead to a judicial determination
of the fair value (excluding any element of value arising from accomplishment or
expectation of the Merger) required to be paid in cash to such dissenting
holders for their Shares. Any such judicial determination of the fair value of
the Shares could be based upon considerations in addition to the Offer Price and
the market value of the Shares, including asset values and the investment value
of the Shares. The value so determined could be more or less than the Offer
Price. If any holder of Shares who demands appraisal under Section 262 of the
DGCL fails to perfect, effectively withdraws or otherwise loses his or her right
to appraisal, as provided for under the DGCL, each of the Shares of such holder
will be converted into the Offer Price in accordance with the Merger Agreement.
Failure to follow any of the steps required by Section 262 of the DGCL for
perfecting appraisal rights may result in the loss of such rights.

Antitrust

Under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (as amended, the "HSR Act") applicable to the Offer, the purchase of Shares
in the Offer may not be consummated until after the expiration or termination of
the applicable waiting period following the filing by each of Purchaser and the
Company of a Notification and Report Form under the HSR Act with respect to the
Offer, unless Purchaser or the Company receives a request for additional
information or documentary material from the Antitrust Division of the
Department of Justice or the Federal Trade Commission. A description of this
regulatory approval process is contained in Section 15 "Certain Legal Matters"
of the Offer to Purchase, which is filed as Exhibit (a)(1)(A) hereto and is
incorporated herein by reference.

State Takeover Statutes

Section 203 of the DGCL regulates certain business combinations of a
corporation organized under Delaware law, such as the Company, with a
stockholder beneficially owning 15% or more of the outstanding voting stock of
such corporation (an "Interested Stockholder"). Section 203 provides, in
relevant part, that the corporation shall not engage in any business combination
for a period of three (3) years following the date such stockholder first
becomes an Interested Stockholder unless (i) prior to the date the stockholder
first becomes an Interested Stockholder, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an Interested Stockholder, (ii) upon
becoming an Interested Stockholder, the Interested Stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction

commenced or (iii) on or subsequent to the date the stockholder becomes an
Interested Stockholder, the business combination is approved by the board of
directors and authorized at an annual or special meeting of stockholders by the
affirmative vote of at least two-thirds of the outstanding voting stock that is
not owned by the Interested Stockholder. The Board has approved the Merger
Agreement and the other transactions contemplated thereby, including the Offer,
the Merger and the Tender and Voting Agreements, and, therefore, Section 203 of
the DGCL is inapplicable to the Offer and the Merger.

Chapter 110C of the General Laws of Massachusetts (the "Take-Over Bid
Statute") imposes certain procedural requirements in connection with certain
take-over bids. The Company is subject to the Take-Over Bid Statute because its
principal place of business is located in The Commonwealth of Massachusetts. A
take-over bid ("Take-Over Bid") is the acquisition or offer to acquire stock
which would result in the acquiror possessing more than 10% of the voting power
of any class of an issuer's stock. A Take-Over Bid does not include, among other
things, any offer which the board of directors of the issuer has consented to
and approved and has recommended its stockholders accept, if the terms of such
bid, including any inducements to officers or directors which are not made
available to all stockholders, have been furnished to the stockholders. In
accordance with the provisions of Chapter 110C, the Board (i) has approved the
Merger Agreement and the transactions contemplated thereby, including the Offer
and the Merger, and (ii) has complied with applicable disclosure requirements by
virtue of the information being provided to the Company's stockholders in this
Statement and the Offer to Purchase. Accordingly, the Take-Over Bid Statute is
inapplicable to the Offer and the Merger.

ITEM 9. EXHIBITS.

The following exhibits are filed herewith:

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

(a)(1)(A) Offer to Purchase, dated April 25, 2003.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Form of Notice of Guaranteed Delivery.*+
(a)(1)(D) Form of Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.*+
(a)(1)(E) Form of Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other
Nominees.*+
(a)(1)(F) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.*+

(a)(1)(G) Press Release issued by Signal Technology Corporation dated April 17, 2003.
(a)(1)(H) Summary Newspaper Advertisement published in the Wall Street Journal National
Edition on April 25, 2003.*+
(a)(1)(I) Opinion of Wachovia Securities, Inc., dated April 16, 2003 (included as Annex A attached
to this Statement).
(e)(1) Agreement and Plan of Merger, dated April 16, 2003, by and among Signal Technology
Corporation, Crane Co. and STC Merger Co .
(e)(2) Form of Tender and Voting Agreement.
(e)(3) Confidentiality Agreement, dated as of June 11, 2002, between Wachovia Securities, Inc.
and Crane Co.
(e)(4) Form of Indemnification Agreement (with form of Crane Co. Guarantee).
(e)(5) Form of Optionee Agreement.
(e)(6) The Information Statement of Signal Technology Corporation pursuant to Section 14(f) of
the Securities Exchange Act of 1934, as amended, and Rule 14f-1 thereunder (included as
Annex B to this Statement).
(g) Not applicable.

- ----------
* Incorporated by reference to the Schedule TO filed by Purchaser on April
25, 2003.

+ Included in package mailed to the Company's stockholders.

SIGNATURE

After due 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.

SIGNAL TECHNOLOGY CORPORATION

By:/s/ Robert N. Nelsen
-----------------------------------
Name: Robert N. Nelsen
Title: Vice President, Treasurer and Chief
Financial Officer

Dated: April 25, 2003

ANNEX A

April 16, 2003
Board of Directors
Signal Technology Corporation
222 Rosewood Drive
Danvers, MA 01923

Gentlemen:

You have asked Wachovia Securities, Inc. ("Wachovia Securities"), to
advise you with respect to the fairness, from a financial point of view, to the
holders of the outstanding shares of Common Stock, par value $0.01 per share
(the "Shares"), of Signal Technology Corporation (the "Selling Company"), other
than holders who have perfected their dissent and appraisal rights (the
"Holders"), of the $13.25 per share in cash to be received by the Holders for
each Share pursuant to the Agreement and Plan of Merger, which is proposed to
be entered into by and among Crane Company (the "Buyer"), a wholly-owned
subsidiary of the Buyer (the "Subsidiary"), and the Selling Company (the
"Agreement"). Subject to the terms of the Agreement, the Buyer will cause the
Subsidiary to commence a tender offer for all of the Shares (the "Tender
Offer") at a price equal to $13.25 per share in cash for each Share accepted.
The Agreement further provides that, following the purchase of the tendered
Shares pursuant to the Tender Offer, the Subsidiary will be merged with and
into the Selling Company (the "Merger" and together with the Tender Offer, the
"Transaction") and each outstanding Share not acquired by the Subsidiary in the
Tender Offer (other than dissenting Shares) will be converted into the right to
receive $13.25 in cash. The terms and conditions of the Transaction are more
fully set forth in the Agreement.

In arriving at our opinion, we have, among other things:

-- Reviewed the Agreement, including the financial terms of the Agreement.

-- Reviewed certain publicly available business, financial and other
information regarding the Selling Company.

-- Reviewed certain business, financial and other information regarding the
Selling Company and its prospects that was furnished to us by and that
we have discussed with management of the Selling Company.

-- Reviewed the current and historical market prices and trading activity
of the Selling Company's Common Stock.

-- Compared the publicly available business, financial and other
information regarding the Selling Company with similar information
regarding certain other publicly traded companies that we deemed to be
relevant.

-- Compared the proposed financial terms of the Agreement with the
financial terms of certain other business combinations and transactions
that we deemed to be relevant.

-- Developed discounted cash flow models of the Selling Company.

-- Developed leveraged buyout models of the Selling Company.

-- Analyzed the premiums paid for certain other business combinations and
transactions that we deemed to be relevant.

-- Considered other information such as financial studies, analyses and
investigations, as well as financial and economic and market criteria
that we deemed to be relevant.

In connection with our review, we have relied upon the accuracy and
completeness of the foregoing financial and other information we have obtained
and reviewed for the purpose of our opinion, and we have not assumed any
responsibility for any independent verification of such information. We have
relied upon assurances of the management of the Selling Company that it is not
aware of any facts or circumstances that would make such information about the
Selling Company inaccurate or misleading. With respect to the Selling Company's
financial forecasts, we have assumed that they have been

reasonably prepared and reflect the best currently available estimates and
judgments of management as to the expected future financial performance of the
Selling Company. We have discussed such forecasts and estimates, as well as the
assumptions upon which they are based, with management of the Selling Company,
but we assume no responsibility for and express no view as to the Selling
Company's financial forecasts or the assumptions upon which they are based. In
arriving at our opinion, we have not conducted any physical inspection of the
facilities of the Selling Company and have not made or been provided with any
evaluations or appraisals of the assets or liabilities of the Selling Company.
Our investigation in connection with rendering this opinion is limited to
whether the $13.25 per Share in cash to be received by the Holders of the Shares
in connection with the Transaction is fair to such Holders, from a financial
point of view. We have relied on advice of counsel to the Selling Company as to
all legal matters with respect to the Selling Company and the transactions
contemplated in the Agreement.

In rendering our opinion, we have assumed that the transactions
contemplated by the Agreement will be consummated on the terms described in the
Agreement, without waiver of any material terms or conditions, and that in the
course of obtaining any necessary legal, regulatory or third party consents
and/or approvals, no restrictions will be imposed that will have a material
adverse effect on such transactions or other actions contemplated by the
Agreement. Our opinion is necessarily based on economic, market, financial and
other conditions as they exist on and can be evaluated as of the date hereof.
Although subsequent developments may affect this opinion, we do not have any
obligation to update, revise or reaffirm this opinion. Our opinion does not
address the relative merits of the transactions contemplated by the Agreement
compared with other business strategies that may have been considered by the
Selling Company's management and/or Board of Directors. We have not considered
for the purposes of our opinion the prices at which the Selling Company's Common
Stock will trade following the announcement of the Transaction.

Wachovia Securities is an investment banking subsidiary and affiliate of
Wachovia Corporation. We have been engaged to render financial advisory
services, including the rendering of this opinion, to the Board of Directors of
the Selling Company in connection with the transactions contemplated by the
Agreement and will receive a fee for such services, a significant portion of
which is contingent upon the consummation of the transactions contemplated by
the Agreement. Wachovia Securities and our affiliates provide a full range of
financial advisory, securities and lending services in the ordinary course of
business for which we receive customary fees. In the past, we have provided
certain banking services to the Buyer for which we have been paid fees. We may
provide additional banking services, including but not limited to, investment
banking services, to the Buyer in the future for which we would also be paid
fees. In the ordinary course of our business, we and our affiliates may actively
trade or hold the securities (including derivative securities) of the Selling
Company or the Buyer for our own account or for the account of our customers
and, accordingly, may at any time hold a long or short position in such
securities. Additionally, in the ordinary course of business, we have provided,
and may provide in the future, equity research coverage for the Buyer.

It is understood that this opinion is directed for the information and use
of the Board of Directors of the Selling Company in connection with its
consideration of the transactions contemplated by the Agreement. Our opinion
does not address the merits of the underlying decision by the Selling Company to
enter into the Agreement and does not and shall not constitute a recommendation
as to whether or not any Holder of Shares should tender such Shares in the
Tender Offer or vote for the Merger. Our opinion may not be summarized,
excerpted from, or otherwise publicly referred to without our prior written
consent, except that it may be reprinted in full and summarized in any filings
with the Securities and Exchange Commission and in any proxy statement,
information statement or offer to purchase to be distributed to the stockholders
of the Selling Company in connection with the Transaction.

Based upon and subject to the foregoing, our experience as investment
bankers, our work as described above, and other factors we deem to be relevant,
we are of the opinion that, as of the date hereof, the $13.25 per Share in cash
to be received by the Holders of the Shares in the Transaction is fair to such
Holders, from a financial point of view.

Very truly yours,

WACHOVIA SECURITIES, INC.

ANNEX B

SIGNAL TECHNOLOGY CORPORATION
THE TOWER AT NORTHWOODS
222 ROSEWOOD DRIVE
DANVERS, MASSACHUSETTS 01923

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

BACKGROUND INFORMATION

This Information Statement is being mailed on April 25, 2003 as part of the
Solicitation/ Recommendation Statement on Schedule 14D-9 (the "14D-9") of Signal
Technology Corporation, a Delaware corporation (the "Company"). You are
receiving this Information Statement in connection with the possible selection
of persons to be designated by Crane Co, a Delaware corporation ("Parent"), to
at least a majority of the seats on the Board of Directors of the Company (the
"Board").

On April 16, 2003, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Parent and STC Merger Co., a Delaware corporation
and an indirect wholly owned subsidiary of Parent ("Purchaser"), pursuant to
which Purchaser has commenced a tender offer to purchase all of the issued and
outstanding shares of common stock, par value $0.01 per share (the "Common
Stock"), of the Company (the "Shares"), at a purchase price of $13.25 per Share,
net to each seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated April 25, 2003 (the "Offer to Purchase"), and the related Letter of
Transmittal (the "Letter of Transmittal" and, together with the Offer to
Purchase, as each may be amended or supplemented from time to time, the
"Offer"). The Offer is described in Purchaser's Tender Offer Statement on
Schedule TO filed with the Securities and Exchange Commission (the "SEC") on
April 25, 2003 (as may be amended or supplemented from time to time, the
"Schedule TO"). Copies of the Offer to Purchase and Letter of Transmittal have
been mailed to the stockholders of the Company and are filed as Exhibits
(a)(1)(A) and (a)(1)(B), respectively, to the 14D-9.

The Merger Agreement provides that, subject to the satisfaction of certain
conditions, following completion of the Offer, and in accordance with the
relevant provisions of the Delaware General Corporation Law (the "DGCL"),
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation (the "Surviving Corporation")
and an indirect wholly-owned subsidiary of Parent. In connection with the
Merger, each outstanding Share (other than Shares held by stockholders of the
Company who have properly exercised their appraisal rights under the DGCL,
shares of Common Stock held in the treasury of the Company, and Shares held by
Parent or any direct or indirect wholly owned subsidiary of Parent or the
Company) will be converted, at the effective time of the Merger (the "Effective
Time"), into the right to receive the Offer Price.

The Offer, the Merger and the Merger Agreement are more fully described in
the 14D-9 to which this Information Statement forms Annex B, which was filed by
the Company with the SEC on April 25, 2003, and which is being mailed to the
stockholders of the Company.

This Information Statement is being mailed to you in accordance with
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Rule 14f-1 promulgated thereunder. The information set forth herein
supplements certain information set forth in the 14D-9. Information set forth
herein directly related to Parent, Purchaser or the Parent Designees (as defined
herein) has been provided by Parent.

You are urged to read this Information Statement carefully. You are not,
however, required to take any action in connection with the matters set forth
herein and the Company, Parent and Purchaser do not need any action or consent
from you.

Pursuant to the Merger Agreement, Purchaser commenced the Offer on April
25, 2003. The Offer will expire at 12:00 midnight, New York City time, on
Thursday, May 22, 2003, unless Purchaser extends it in accordance with the terms
of the Merger Agreement and the Offer.

VOTING SECURITIES OF THE COMPANY

The Common Stock is the only class of equity securities entitled to vote at
a meeting of the stockholders of the Company. Each share of Common Stock has one
vote. As of April 15, 2003, there were 10,453,512 shares of Common Stock
outstanding.

RIGHT TO DESIGNATE DIRECTORS AND PARENT DESIGNEES

The Merger Agreement provides that, effective upon and after the payment by
Purchaser for Shares pursuant to the Offer, Parent shall be entitled to
designate such number of directors (the "Parent Designees"), rounded up to the
next whole number, on the Board as is equal to the product of: (i) the total
number of directors on the Board (determined after giving effect to the
directors elected pursuant to this sentence) and (ii) a fraction whose numerator
is the aggregate number of Shares then beneficially owned by Parent and
Purchaser and whose denominator is the total number of Shares then outstanding.
The Company shall, upon the request of Parent, use its reasonable best efforts
to cause the Parent Designees to be elected or appointed to the Board,
including, if necessary, increasing the number of directors and seeking the
resignations of one or more current directors. The Merger Agreement also
provides that, notwithstanding the foregoing, at all times prior to the
Effective Time the Board shall have at least two directors who were directors of
the Company as of the date of the Merger Agreement, one of whom shall be George
Lombard, the Company's current Chairman and Chief Executive Officer ("Continuing
Directors"). If, at any time prior to the Effective Time, there is only one
Continuing Director in office, then the Board shall cause an individual selected
by the remaining Continuing Director to be designated to serve on the Board (and
such individual will be deemed to be a Continuing Director). If, at any time
prior to the Effective Time, no Continuing Directors remain in office, then the
Board shall designate two individuals to serve on the Board who are not
officers, employees or affiliates of the Company, Parent or Purchaser (and such
individuals will be deemed to be Continuing Directors). Presently, the Board has
seven (7) members.

After the election or appointment of the Parent Designees to the Board and
until the Effective Time, the approval of a majority of the Continuing Directors
or, if there is only one, of the Continuing Director, will be required to
authorize (and such authorization will constitute the authorization of the Board
and no other action on the part of the Company, including any action of the
Board, will be required to authorize) any: (i) amendment or termination of the
Merger Agreement by the Company, (ii) amendment of the Company's Certificate of
Incorporation or By-laws, (iii) extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Purchaser, (iv)
exercise or waiver of any of the Company's rights or remedies under the Merger
Agreement, or (v) other consent or action by the Company's Board of Directors
with respect to any substantive matter relating to the Merger Agreement or the
Merger.

The Parent Designees will be selected by Parent from the individuals listed
below, each of whom has consented to serve as a director of the Company, if
appointed or elected, and to be named herein. None of the Parent Designees
currently is a director of, or holds any position with, the Company. Parent has
advised the Company that, to its knowledge, none of the Parent Designees or
entities that they control beneficially owns any equity securities or rights to
acquire any such securities of the Company, nor has any such person been
involved in any transaction with the Company or any of its directors, executive
officers or affiliates that is required to be disclosed pursuant to the rules
and regulations of the SEC, other than with respect to transactions among
Parent, Purchaser and the Company that have been described in the Schedule TO
and/or the 14D-9.

The name, age, citizenship, present principal occupation or employment and
five-year employment history of each of the potential Parent Designees are set
forth below.

Eric Fast, President, Chief Executive Officer and Director of Parent. Mr.
Fast is 53 years old and a citizen of the United States. Mr. Fast became a
director of Parent in 1999 and has served as President and Chief Executive
Officer of Parent since 2001. Mr. Fast served as Parent's Chief Operating
Officer from 1999 to 2001. Prior to beginning his employment with Parent, Mr.
Fast worked for Salomon Smith Barney (investment banking firm) as Co-head of
Global Investment Banking from 1997 to 1998 and also served as a director of
Convergys Corporation.

Ray Boushie, Group President Crane Aerospace since 1999. Mr. Boushie is 63
years old and a citizen of the United States. Prior to assuming his position as
Group President of Crane Aerospace, Mr. Boushie served as President of Crane's
Hydro-Aire subsidiary from 1994 until 1999.

Lou Bieck, President of Crane Aerospace Electronics since August 2002. Mr.
Bieck is 58 years old and a citizen of the United States. From August 2000 until
August 2002, Mr. Bieck served as President of Crane's Interpoint Corporation
subsidiary. Previously, Mr. Bieck served as President of Solectron Northwest
(contract manufacturer of electronic components) since 1992.

The potential Parent Designees listed above will constitute a majority of
the Board so long as five of the Company's current directors agree to resign.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of April 18, 2003, regarding
beneficial ownership of the shares of Common Stock of each director and each
executive officer of the Company named in the Summary Compensation Table below,
all directors and executive officers of the Company as a group, and each person
who is known by the Company to beneficially own more than five (5%) percent of
the Common Stock.

NAME OF OWNER NUMBER OF SHARES PERCENT
- ------------------------------------------------------------------------ -------------------- --------

Directors and Executive Officers
John Cotumaccio ....................................................... 62,043(1) *
James V. DiLorenzo .................................................... 344,576(2) 2.8%
Larry L. Hansen ....................................................... 62,916(3) *
Gene L. Joles ......................................................... 45,669(4) *
Harvey C. Krentzman ................................................... 20,750(5) *
George E. Lombard ..................................................... 502,931(6) 4.1%
Thomas G. McInerney ................................................... 32,500(7) *
Joseph Mersereau ...................................................... 21,750(8) *
Robert N. Nelsen ...................................................... 286,081(9) 2.3%
Bernard P. O'Sullivan ................................................. 237,217(10) 1.9%
Joseph Schneider ...................................................... 63,250(11) *
Thomas F. Skelly ...................................................... 32,500(12) *
All directors and executive officers as a group (12 persons) .......... 1,712,183(13) 14.0%
Principal Stockholders
Frontier Capital Management Co., LLC ................................... 680,500(14) 5.5%
99 Summer Street
Boston, MA 02110
Caleb Loring, III ...................................................... 1,082,222(15) 8.8%
c/o Essex Associates
400 Essex Street
Beverly Farms, MA 01915

NAME OF OWNER NUMBER OF SHARES PERCENT
- ------------------------------------------ -------------------- ----------

Shared Beneficial Ownership (16) ......... 1,449,700(16) 11.8%
Ironwood Capital Management, LLC
21 Custom House Street
Boston, MA 02110
Warren J. Isabelle
c/o Ironwood Capital Management, LLC
21 Custom House Street
Boston, MA 02110
Richard L. Droster
c/o Ironwood Capital Management, LLC
21 Custom House Street
Boston, MA 02110
Donald Collins
c/o Ironwood Capital Management, LLC
21 Custom House Street
Boston, MA 02110

- ----------
* less than one percent.

Note: Unless otherwise indicated, the persons shown have sole voting and
investment power over the shares listed. Includes options exercisable as
of April 18, 2003, or within 60 days after such date.

(1) Includes 13,793 shares held jointly by Mr. Cotumaccio and his wife. Also
includes 48,250 shares subject to exercisable options.

(2) Includes 330,000 shares subject to exercisable options.

(3) Includes 36,250 shares subject to exercisable options.

(4) Includes 12,500 shares subject to exercisable options.

(5) Includes 8,750 shares subject to exercisable options. Does not include
1,200,222 shares held by several trusts for the benefit of Mr. Krentzman's
family members. Mr. Krentzman does not have any voting or investment power
over such shares and disclaims beneficial ownership over all such shares.

(6) Includes 468,750 shares subject to exercisable options.

(7) Includes 32,500 shares subject to exercisable options.

(8) Includes 21,750 shares subject to exercisable options.

(9) Includes 255,000 shares subject to exercisable options.

(10) Includes 56,000 shares held jointly by Mr. O'Sullivan and his wife. Also
includes 172,467 shares held in Mr. O'Sullivan's IRA account. Also
includes 8,750 shares subject to exercisable options. Does not include
84,500 shares held by the Bernard and Jean O'Sullivan 1996 Grandchildren's
Trust, 120,000 shares held by the Bernard O'Sullivan Family Trust and
51,867 shares held solely by Mr. O'Sullivan's wife with respect to each of
which Mr. O'Sullivan disclaims beneficial ownership.

(11) Includes 32,500 shares subject to exercisable options.

(12) Includes 32,500 shares subject to exercisable options.

(13) See footnotes (1) through (12).

(14) Information has been obtained from a Schedule 13G, dated February 8, 2002,
filed by Frontier Capital Management Co., LLC with the SEC.

(15) Includes 1,081,222 shares held by a trust for the benefit of certain
family members and other relatives of Harvey C. Krentzman and 1,000 shares
held by a trust for the benefit of Mr. Loring's wife, with respect to each
of which Mr. Loring disclaims beneficial ownership. Information has been
obtained from a Schedule 13G/A, dated February 12, 2001, filed by Caleb
Loring, III with the SEC.

(16) Information has been obtained from a Schedule 13G, dated March 14, 2003,
jointly filed by Ironwood Capital Management, LLC, Warren J. Isabelle,
Richard L. Droster and Donald Collins with the SEC. According to the
Schedule 13G, each of Ironwood Capital Management, LLC, Mr. Isabelle, Mr.
Droster and Mr. Collins has shared voting power over 1,032,500 shares and
shared dispositive power over 1,449,700 shares. None of them has sole
voting or sole dispositive power over such shares.

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Directors

The following table and narrative sets forth information regarding the
principal occupation, other directorships, committee memberships and age of
each of the current directors of the Company.

(AS OF APRIL 15, 2003)

TERM AS A
NAME AGE DIRECTOR ENDS
- --------------------------------------- ----- --------------

Larry L. Hansen(1)(2) ................. 74 2005
Harvey C. Krentzman(1)(2)(3) .......... 76 2005
Thomas F. Skelly(1) ................... 68 2005
George E. Lombard(3) .................. 63 2003
Thomas G. McInerney(2) ................ 66 2003
Bernard P. O'Sullivan(2)(3) ........... 75 2004
Joseph Schneider(1) ................... 52 2004

- ----------
(1) Member of the Audit Committee of the Board.

(2) Member of the Compensation Committee of the Board.

(3) Member of the Executive Committee of the Board.

Larry L. Hansen, Director since 1991. Mr. Hansen was Executive Vice
President of Tylan General (a sales and service center for pressure and flow
products) from December 1989 until his retirement in January 1991. He is also a
director of Electro Scientific Industries, Inc. and Micrel, Inc.

Harvey C. Krentzman, Director since 1982. Mr. Krentzman is a founder of the
Company. He has been President of Advanced Management Associates Inc. (financial
and management consultants) for more than 40 years. Mr. Krentzman is the Vice
Chairman of the board of trustees of the Boston Symphony Orchestra and
Northeastern University, a trustee of Beth Israel Deaconess, the Norman Rockwell
Museum and the U.S.S. Constitution Museum, and is an honorary trustee of the
Woods Hole Oceanographic Institution. Mr. Krentzman also serves on the boards of
directors of Jones & Vining, Inc., Arley Corporation, Bell Manufacturing
Corporation and Inspectron Corporation.

Thomas F. Skelly, Director since 1999. Prior to joining the Company, Mr.
Skelly worked at The Gillette Company for 30 years, the last 17 of which he
served as Senior Vice President of Finance and Chief Financial Officer. Mr.
Skelly is a certified public accountant.

George E. Lombard, Chairman of the Board of Directors and Chief Executive
Officer since 1998. In addition, Mr. Lombard served as the Company's President
until March 1999. From 1995 to 1998, Mr. Lombard served as President of L-3
Communications Corporation's Display Systems Division. Prior to that, he was a
Vice President of Unisys. Including successor corporations, Mr. Lombard's career
includes 26 years with the Lockheed Corporation where he held several key
management positions.

Thomas G. McInerney, Director since 1999. General McInerney has been
President of TG McInerney Consulting since 2000. From 1996 to 2000, he was
President and Chief Executive Officer of Business Executives for National
Security (BENS). From 1994 to 1996, he was Vice President, Command and Control
C(4)1 Programs for Loral Defense Systems-Eagan (formerly Unisys Electronic
Systems division). In July 1994, as the Assistant Vice Chief of Staff of the Air
Force, General McInerney retired with the rank of Lieutenant General following a
35-year military career. General McInerney also serves on the boards of
directors of Pan Am International Flight Academy.

Bernard P. O'Sullivan, Chairman of the Board from May 1990 until March 31,
1994 and Director since 1982. Mr. O'Sullivan is a founder of the Company. Prior
to his retirement on May 31, 1987, he was President of O'Sullivan and Murphy,
Inc. (a manufacturers' representative selling microwave components), a company
he founded in May 1975.

Joseph Schneider, Director since 1996. Mr. Schneider has been President of
JSA Partners, Inc., a strategic management consulting firm that specializes in
the aerospace, and defense industry, and JSA

Holdings, Inc. since 1997. Prior to founding JSA Partners, Inc. in 1997, Mr.
Schneider was a consultant with A.T. Kearney, Inc, and before that he was the
President of EDS/JSA International after his company, JSA International, Inc.,
was acquired by Electronic Data Systems Corporation in August 1994. Prior
thereto, Mr. Schneider was the founder and President of JSA International, Inc.
from December 1981 until August 1994. Mr. Schneider also serves on the board of
directors of United Industrial Corporation and is the Chairman of JSA Research,
Inc. From 1972 to 1977, Mr. Schneider served as an infantry officer primarily in
the United States Army Airborne and Special Forces units.

Executive Officers

The following table sets forth certain information concerning the executive
officers of the Company who are not also directors. Presidents of the Company's
three operating divisions are considered to be executive officers. The executive
officers of the Company are elected annually by the Board of Directors following
the Annual Meeting of Stockholders and serve at the discretion of the Board.

NAME AGE POSITION(S) WITH COMPANY
- ------------------------------ ----- -------------------------------------------------------------------

John Cotumaccio .............. 59 President, Chief Operating Officer and President, Keltec Operation
Gene L. Joles ................ 53 President, Arizona Operation
Joseph W. Mersereau .......... 53 President, California Operation
Robert N. Nelsen ............. 55 Vice President, Treasurer and Chief Financial Officer

John Cotumaccio, President and Chief Operating Officer of the Comany since
2002 and President, Keltec Operation of the Company since August 1998. Mr.
Cotumaccio served as President and Chief Operating Officer of the Signal Defense
Group from 2000 to 2002 and as President and Chief Operating Officer. From 1979
to 1998, Mr. Cotumaccio held various positions at divisions of Loral Corporation
and its successors, Lockheed Martin and L-3 Communications Corporation,
including Director of Manufacturing, Director of Operations, and other
management positions. Prior to joining the Company, Mr. Cotumaccio served as the
Vice President of Operations for L-3 Communications Corporation's Display
Systems Division in Atlanta, Georgia.

Gene L. Joles, President of the Arizona Operation of the Company since
October 1997. From February 1997 to October 1997, Mr. Joles served as the
President of the Space Center of the Arizona Operation. Prior thereto, Mr. Joles
served as the President of the Arizona Microwave Division since June 1991. He
also served concurrently as the President of the California Microwave Division
from June 1992 until February 1996. From August 1988 until June 1991, Mr. Joles
held the positions of Vice President, Operations and General Manager of the
Active Assemblies Division of M/A-COM, Inc.

Joseph W. Mersereau, President of the California Operation since February
2000. From November 1998 to February 2000, Mr. Mersereau was Director of
Engineering of the California Operation. From October 1991 to November 1998, Mr.
Mersereau has held various positions in the California Operation including
Director of New Business Development and Regional Sales Manager. Prior to
joining the Company, Mr. Mersereau was a product line manager, at Western
Microwave from 1985 to 1991 and lead engineer for GaAs FET Amplifier development
at TR Microwave from 1982 to 1985. Mr. Mersereau has more than 25 years of
experience in new product development of microwave components and subsystems.

Robert N. Nelsen, Vice President, Treasurer and Chief Financial Officer of
the Company since August 1998. Prior to that, from 1990 to July 1998, Mr. Nelsen
served as Vice President at several divisions of Loral Corporation and its
successors, Lockheed Martin, and L-3 Communications Corporation, including, most
recently, the Display Systems Division.

INDEBTEDNESS OF MANAGEMENT; CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 15, 2000, the Company made a loan of $140,000 to George E.
Lombard, Chairman of the Board and Chief Executive Officer of the Company. In
exchange for the loan, Mr. Lombard delivered to the Company a promissory note
(the "Note") payable to the Company, which provided for interest on the unpaid
balance to be paid at a rate per annum equal to the average rate of interest
earned by the Company on its cash investments. Under the terms of the Note,
principal and interest were due and payable on or before the first anniversary
of the loan. Mr. Lombard was further obligated under the terms

of the Note to make a payment in the amount of any bonus received by him from
the Company (net of any taxes and other amounts withheld by the Company).

The Company entered into a letter agreement, dated as of January 23, 2001
(the "Amendment"), with Mr. Lombard amending the Note. In exchange for Mr.
Lombard's continued service with the Company as Chairman and Chief Executive
Officer until January 23, 2003, the Company agreed to forgive and forever cancel
the Note (including all amounts due and payable thereunder) on January 23, 2003
if Mr. Lombard continued to be employed by the Company on that date. Because Mr.
Lombard was so employed on such date, the Note has been forgiven.

During 2002, the Company paid consulting fees of $134,238 to JSA Holdings,
Inc. for services relating to mergers and acquisitions provided to the Company
by Joseph Schneider, a director of the Company and the president of JSA
Holdings. Inc. During 2002, the Company paid $60,000 to Advanced Management
Associates Inc. ("AMA"), for management consulting services provided by Harvey
C. Krentzman, a director of the Company and the President and principal owner of
AMA. The Company believes these fees are equivalent to fees that would be
charged by unrelated third parties providing similar services.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's officers and
directors and greater than ten percent stockholders (collectively "Reporting
Persons") to file reports of ownership and changes in ownership with the SEC and
the Nasdaq National Market. Reporting Persons are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms furnished to, or any written
representations received by, it, the Company believes that with respect to the
fiscal year ended December 31, 2002 and all prior fiscal years, all Reporting
Persons complied with all applicable filing requirements.

BOARD COMMITTEES AND MEETINGS

The Company's Board of Directors held ten meetings during fiscal year 2002.
The Board has standing executive, audit, and compensation committees; there is
no nominating committee. All directors attended more than 75% of all meetings of
the Board and the committees of which they were members held in 2002.

Executive Committee

The Executive Committee consists of three members and is reconstituted
annually at the first meeting of the Board of Directors following the Annual
Meeting of Stockholders. The current members of the Committee are Messrs.
Bernard P. O'Sullivan (Chairman), Harvey C. Krentzman and George E. Lombard. The
Executive Committee is authorized to act on behalf of the Board of Directors
only when the Board of Directors is unable to be convened in a timely manner.
The Executive Committee held no meetings in fiscal year 2002.

Audit Committee

The Audit Committee consists of four members. The Audit Committee adopted a
written charter on February 16, 2000. The Audit Committee Charter was attached
as Exhibit 1 to the proxy statement filed in connection with the Company's 2001
Annual Meeting of Stockholders. The Audit Committee is reconstituted annually at
the first meeting of the Board following the Annual Meeting of Stockholders. The
current members of the Committee are Messrs. Larry L. Hansen, Harvey C.
Krentzman, Joseph Schneider and Thomas F. Skelly (Chairman). Each member of the
Audit Committee is an "independent director," as defined in Rule 4200(a)(14) of
the National Association of Securities Dealers' listing standards. The Audit
Committee meets with the Company's auditors and principal financial personnel to
review quarterly financial results and the results of the annual audit. The
Audit Committee also reviews the scope of, and establishes fees for, audit and
non-audit services performed by the independent accountants, reviews the
independence of the independent accountants and the adequacy and effectiveness
of the Company's internal accounting controls. The Audit Committee held four
meetings in fiscal year 2002.

Compensation Committee

The Compensation Committee establishes the compensation and other incentive
arrangements of each executive officer of the Company whose base salary is
$125,000 or more. The Compensation Committee consists of four members, currently
Messrs. Harvey C. Krentzman (Chairman), Bernard P. O'Sullivan, Larry L. Hansen
and Thomas G. McInerney, and is reconstituted annually at the first meeting of
the Board following the Annual Meeting of Stockholders. The Compensation
Committee held seven meetings in fiscal year 2002.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the fiscal year ended December 31, 2002 with the
Company's management.

The Audit Committee has discussed with the Company's independent auditors
the matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU Section 380).

The Audit Committee has received the written disclosures and the letter
from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees) and has discussed with the independent
accountant the independent accountant's independence.

Based on the review and discussions with management and the Company's
independent accountants referred to above, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002
for filing with the SEC.

Respectfully submitted,

Thomas F. Skelly, Chairman
Larry L. Hansen
Harvey C. Krentzman
Joseph Schneider

COMPENSATION OF DIRECTORS

Directors who are not employees of the Company receive an annual fee of
$17,500 for serving on the Board, a fee of $800 for each Board meeting attended
in excess of the sixth meeting within any fiscal year of the Company, and $500
for each committee meeting attended which is not held in conjunction with a
meeting of the Board of Directors, plus reimbursement of out-of-pocket expenses
for attendance at each Board or committee meeting.

EXECUTIVE COMPENSATION

Report of the Compensation Committee

The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing the compensation, including bonus and incentive
arrangements, of the Company's Chief Executive Officer and to consider and
approve or modify the recommendations of the Chief Executive Officer as to the
proposed compensation of each executive officer of the Company whose aggregate
compensation exceeds a threshold amount fixed by the Board, which, in 2002, was
$125,000.

The compensation policy of the Company for its executive officers is based
on the following principles:

o The compensation program should support the strategic and financial
objectives of the Company by rewarding its executive officers for
regular and significant improvements in earnings and increases in the
value of the Common Stock;

o The compensation program should reflect the highly competitive nature of
the industry in which the Company operates, and the fact that the key
executives throughout the industry are known to each other; and

o An important part of the compensation program is to provide
performance-based incentives to executive officers by way of equity
ownership so that, with successful performance and the consequent
increase in the value of the Company, their interests become more
aligned with those of the owners of the Common Stock.

The Company's principal business is the design, development and manufacture
of power management products and electronic radio frequency components and
subsystems that are used in defense electronics. The Company was incorporated in
1982 and has traditionally been a supplier to the defense industry. The
Company's sophisticated RF, microwave and millimeter wave electronic components
are used in applications such as radar, communications, and smart weapons and
contain technology to receive, transmit and process wireless data signals. Most
of the competitive entities, across a broad spectrum of the Company's product
lines, are known to the members of the Committee, whose experience in the
industry is extensive.

The Chief Executive Officer's salary, bonus and, when granted, options to
purchase stock of the Company, are determined annually by the Committee based on
the Committee's subjective evaluation of a variety of factors, each of which is
weighted, again subjectively, by each member of the Committee according to his
own experience and background. Among the criteria used by each member of the
Committee in making his evaluation of the appropriate compensation of the Chief
Executive Officer are:

o the compensation of the chief executives of competitive entities;

o his influence on the performance of the Company through his management
skills;

o his ability to work with, influence and effectuate the policies of the
Board of Directors;

o his skill in long range planning for the Company's future growth and
activities; and

o the manner in which he positions the Company to succeed.

These criteria are used by the members of the Committee in determining each
element of compensation. There is no specific relationship between the
performance of the Company and the compensation of the executive officers,
although, with respect to bonuses and stock options, performance of the Company
is given more weight by the Committee than the other criteria.

Regarding bonuses, the Board, in accordance with the Company's bonus plan,
each year sets the maximum amount available to be awarded as bonuses. Within
that amount, the Committee, early in the calendar year, prescribes the aggregate
bonuses for the prior year for all of the Company's executives based upon the
criteria outlined above.

Stock options are similarly determined and granted by the Committee.

Respectfully submitted,

Harvey C. Krentzman, Chairman

Bernard P. O'Sullivan

Larry L. Hansen

Thomas G. McInerney

Report of the Chief Executive Officer

The Chief Executive Officer recommends to the Compensation Committee the
proposed compensation (other than his own) of each executive officer of the
Company whose base salary exceeds a threshold amount fixed by the Board, which,
in 2002, was $125,000. The Committee considers, and approves or modifies, the
recommendations of the Chief Executive Officer.

In making his evaluation of the performance of an executive officer in his
or her area of responsibility, and in formulating his recommendation to the
Committee, while the Chief Executive Officer adheres to the criteria and
principles enunciated in the Committee's report set forth above, he relies most
heavily on the following criteria:

o the executive's influence on the performance of the Company through his
or her management skills;

o the executive's skill in long range planning for the Company's future
growth and activities; and

o the manner in which the executive positions the Company to succeed in
the future.

Respectfully submitted,

George E. Lombard

The following table sets forth information concerning the compensation paid
or accrued by the Company to or on behalf of the Company's current Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company (hereafter referred to as the "named executive
officers") during the fiscal years ended December 31, 2000, 2001 and 2002.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ -------------
NAME AND OPTIONS ALL OTHER
PRINCIPAL POSITIONS(S) YEAR SALARY($) BONUS($)(1) SAR'S(#) COMPENSATION($)
- ------------------------------------------ ------ ----------- ------------- ------------- ----------------------

George E. Lombard ........................ 2002 $345,139 $396,000 65,000 $ 5,500(2)
Chairman of the Board 2001 $330,000 -- 107,500 $ 3,550(2)
and Chief Executive Officer 2000 $306,923 $190,000 65,000 $ 64,676(2)(3)
John Cotumaccio .......................... 2002 $262,704 $106,838 50,000 $ 1,472(2)
President and Chief 2001 $216,426 $ 50,000 8,500 $ 3,122(2)
Operating Officer 2000 $192,456 $ 70,000 7,000 $ 5,312(2)
and President, Keltec Operations
James V. DiLorenzo ....................... 2002 $277,223 $ -- 35,000 $ 490,346(2)(5)
President and Chief Operating 2001 $300,000 -- 70,000 $ 3,417(2)
Officer, Signal Technology(4) 2000 $284,616 $162,000 50,000 $ 5,154(2)
Gene L. Joles ............................ 2002 $177,000 $ 55,224 6,000 $ 2,845(2)
President, Arizona Operation 2001 $177,000 -- 8,500 $ 3,853(2)
2000 $167,538 $ 36,825 9,000 $ 3,853(2)
Robert N. Nelsen ......................... 2002 $236,715 $121,500 50,000 $ 5,500(2)
Vice President, Treasurer and 2001 $225,000 -- 60,000 $ 5,250(2)
Chief Financial Officer 2000 $209,423 $121,500 50,000 $ 5,325(2)
Joseph Mersereau ......................... 2002 $152,138 $ 39,520 5,000 $ 2,280(2)
President, California Operation ......... 2001 $153,358 $ 2,000 8,500 $ 2,870(2)
2000 $145,232 $ 26,010 7,000 $ 3,266(2)

- ----------

(1) Represents bonus earned with respect to the specified year, whether or not
paid during such year.

(2) Represents the Company's matching contribution for the account of the named
executive officer under the Company's 401(k) plan. The normal matching
contribution is 50% of the first 6% of salary contributed by the employee.

(3) Includes a $59,080 relocation payment in connection with Mr. Lombard's
relocation to the Company's Danvers, Massachusetts executive offices and
$5,596 paid in accordance with footnote number 2.

(4) Mr. DiLorenzo also served as President of Signal Wireless Group. Mr.
DiLorenzo's employment with the Company ceased on November 21, 2002.

(5) Includes $323,077 in severance pay, $57,559 in vacation pay, $104,210 in
deferred compensation pay and $5,500 paid in accordance with note (2).

OPTION/SAR GRANTS IN LAST FISCAL YEAR [To be updated]

The following table sets forth information concerning the grant of stock
options to the named executive officers during the year ended on December 31,
2002.

POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---------------------------- ------------ -------------- --------- ----------- ----------- -----------

John Cotumaccio ............ 50,000 9.70% $ 7.05 2012 $221,685 $561,794
James V. DiLorenzo ......... 35,000 6.80% $ 8.39 2012 $184,675 $468,002
Gene C. Joles .............. 6,000 1.20% $ 8.39 2012 $ 31,659 $ 80,229
George E. Lombard .......... 65,000 12.70% $ 8.39 2012 $342,968 $869,147
Joseph Mersereau ........... 5,000 0.97% $ 8.39 2012 $ 26,382 $ 66,857
Robert N. Nelsen ........... 50,000 9.70% $ 8.39 2012 $263,821 $668,575

The following table sets forth information concerning unexercised options
held on December 31, 2002 by the named executive officers:

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S AT OPTIONS/SAR'S AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($)
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
--------------------------- -----------------------------

John Cotumaccio ............ 28,125/63,625 $ 171,770/$217,004
James V. DiLorenzo ......... 182,500/147,500 $ 916,563/$343,350
Gene C. Joles .............. 6,625/16,875 $ 1,854/$19,901
George E. Lombard .......... 409,375/178,125 $2,914,681/$205,394
Robert N. Nelsen ........... 215,000/120,000 $1,458,825/$148,975
Joseph Mersereau ........... 16,375/15,125 $ 85,387/$19,274

(1) Based on closing price of Common Stock on December 31, 2002 of $10.78.

The following graph compares the cumulative shareholder return on the
Company's Common Stock over the period commencing December 31, 1997 through
December 31, 2002, to that of the Nasdaq Stock Market Index ("Nasdaq Market
Index"), and the index published by Media General Financial Services for
Standard Industrial Classification Code 3679-Electronic Components, N.E.C.
("Peer Group Index") assuming the investment of $100 on December 31, 1997. In
calculating cumulative total shareholder return, reinvestment of any and all
dividends is assumed. The stock price performance shown on the graph is not
necessarily indicative of future price performance.

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG SIGNAL TECHNOLOGY CORP.,
AMEX MARKET INDEX AND SIC CODE INDEX

[GRAPHIC OMITTED

- --------------------------------------------------------------------------------
Signal Technology Corp. SIC Code Index Nasdaq Market Index
- --------------------------------------------------------------------------------

1997 1998 1999 2000 2001 2002
------------ ----------- ------------ ------------ ------------ ------------

Signal Technology Corp. $ 100.00 $ 52.44 $ 141.46 $ 195.12 $ 111.80 $ 210.34
SIC Code Index 100.00 97.75 246.21 177.92 100.88 59.41
Nasdaq Market Index 100.00 139.63 259.13 157.32 124.20 85.05

Compensation Committee Interlocks and Insider Participation

The Company's Compensation Committee currently consists of Messrs. Harvey
C. Krentzman (Chairman), Bernard P. O'Sullivan, Larry L. Hansen and Thomas G.
McInerney. Mr. O'Sullivan was formerly an officer of the Company.

Change in Control Arrangements

The Company has entered into employee severance agreements with certain of
its employees pursuant to which each such employee is entitled to receive a
severance pay award if he or she suffers a Diminution (defined below) of his or
her position or is involuntarily terminated within a certain prescribed period
of time after the date of a Change of Control (defined below). For each of these
agreements, "Diminution" is defined as (i) a demotion, (ii) a material reduction
in job responsibilities, (iii) a pay or benefits reduction, or (iv) a relocation
more than 50 miles from the location where the employee is working immediately
prior to the Change of Control. For each of these agreements, "Change of
Control" is defined to occur when (i) an individual, corporation, partnership,
company, or other entity becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities and Exchange Act of 1934) of securities of the
Company representing more than 50% of the combined voting power of the Company's
then outstanding securities or (ii) the Company is a party to a merger,
consolidation, sale of assets, or other reorganization, or a proxy contest, as a
consequence of any of which stockholders of the Company immediately prior to
such transaction cease to control at least 50% of the combined voting power of
the surviving entity immediately after such transaction. Consummation of the
Offer will constitute a Change of Control. Employees who have employee severance
agreements, the date of those agreements and the pay award that each of them is
entitled to under the circumstances set forth above, are as follows:

EMPLOYEE DATE OF AGREEMENT SEVERANCE PAY AWARD
- ----------------- ------------------- -----------------------------------------------------

Tom Casale March 26, 2002 One and one-half times employee's annual base salary
William Clark March 26, 2002 One time employee's annual base salary
John Cotumaccio March 26, 2002 Two times employee's annual base salary
Ann Dziadose March 26, 2002 One time employee's annual base salary
Gil Evangelist March 26, 2002 One and one-half times employee's annual base salary
Carla Flakne November 20, 2002 One and one-half times employee's annual base salary
Steve Lapatsos March 26, 2002 One time employee's annual base salary
Gene Joles March 26, 2002 One and one-half times employee's annual base salary
James Kampfer March 26, 2002 One time employee's annual base salary
Fred Koufos March 26, 2002 One time employee's annual base salary
David Laks March 26, 2002 One and one-half times employee's annual base salary
Norma Leonard March 26, 2002 One time employee's annual base salary
George Lombard March 26, 2002 Three times employee's annual base salary
John McGibbney March 26, 2002 One time employee's annual base salary
Raju Mehta March 26, 2002 One time employee's annual base salary
Joe Mesereau March 26, 2002 One and one-half times employee's annual base salary
Robert Nelsen March 26, 2002 Two times employee's annual base salary
Roberta O'Neil March 26, 2002 One time employee's annual base salary
David Parker March 26, 2002 One and one-half times employee's annual base salary
Doug Weiner March 26, 2002 One time employee's annual base salary
David Woods March 26, 2002 One and one-half times employee's annual base salary

As of April 9, 2003, Thomas Casale, Gil Evangelist, Gene Joles, Jim
Kampfer, Fred Koufos, David Laks, Steve Lapatsos, John McGibbney, Raju Mehta,
Joseph Mersereau and Doug Weiner received offers of employment (each an "Offer
of Employment" and collectively, the "Offers of Employment") from STC Merger
Co., which they accepted. The Offers of Employment become effective upon the
Effective Time. Pursuant to the terms of their Offers of Employment, each of
these employees, by accepting his Offer of Employment, waived any rights he may
have under his employee severance agreement described above arising on, after or
as a result of the acquisition of Signal by Parent.

The aggregate amount of severance payments to be made under the employee
severance agreements to those employees who did not receive an Offer of
Employment is estimated to be $3,194,748.