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BEI Technologies, Inc. Establishes New Subsidiary for Optical Components

25 July 2000

Plans Special Dividend to Existing Shareholders

    SAN FRANCISCO - BEI Technologies, Inc. reported today that it had 
established and provided seed financing for a new subsidiary company called 
OpticNet, Inc. to develop optical components for the telecommunications market. 
Dr. Lawrence Wan, BEI Technologies' chief technology officer, will serve as 
chairman of OpticNet, according to Charles Crocker, chairman and CEO of BEI 
Technologies.

    Dr. Wan stated, "BEI has developed intellectual property over the past
year which could lend itself to applications in the field of fiber optic
telecommunications components.  These applications include optical switching
and offer new business prospects if we are able to achieve proof of
principle."

    Crocker commented, "BEI has agreed to establish OpticNet as a new
development stage company owning this intellectual property and to fund its
initial development activities.  OpticNet has potential, but its market focus
and capital requirements, as well as the need to recruit and reward employees,
suggest that it should become an independent company."

    "Accordingly, BEI Technologies plans, subject to regulatory approvals, to
distribute in the form of a taxable dividend a majority of its OpticNet common
stock to BEI shareholders in the near future.  Initially, these shares will be
restricted and will not be transferable.  However, OpticNet intends to file a
registration statement with the SEC toward the end of this year to register
its common stock under the Securities Exchange Act of 1934, so that, subject
to SEC and other approvals, the dividended shares could be traded in the
future.  Because OpticNet's potential is completely unproven and the shares
initially will not be transferable, BEI Technologies believes the value for
tax purposes of the OpticNet shares dividend will be nominal.  BEI plans to
dividend cash to its shareholders to help defray an estimate of shareholder's
taxes on the dividends."

    Dr. Wan added, "We believe the advanced MEMS process capability resident
within BEI's SiTek subsidiary, in combination with OpticNet's intellectual
property specifically for optical components, could have applications in the
development of fiber optic telecommunications products."  Mr. Dan Joslyn,
former president and chief operating officer of Optical Coating Laboratory,
Inc., has agreed to become president of OpticNet.  BEI Technologies and its
SiTek subsidiary have agreed to provide OpticNet with the exclusive rights to
all SiTek technology, including products and processes, for optical
telecommunications products.  SiTek, Inc. will continue to develop advanced
MEMS devices for BEI's sensor and motion control businesses.

    BEI Technologies, Inc. is an established manufacturer of electronic
sensors, motors, actuators and motion control products used for factory and
office automation, medical and scientific equipment, military, aviation and
space systems, and transportation equipment including automobiles, trucks and
off-road equipment.  The Company's micromachined quartz GyroChip(R) sensors
are used in advanced vehicle stability control systems and a significant
increase in the production of those sensors has been in progress since the
middle of 1998.  BEI also manufactures electronic steering wheel position
sensors, seat-memory modules, throttle position and pressure sensors and other
devices used in automotive systems.  GyroChip is a registered trademark of
BEI.

    Except for historical information, this news release may be deemed to
contain forward-looking statements that involve risks and uncertainties,
including statements with respect to timely development, acceptance and
pricing of new products; impact of competitive products and price; the ability
to manufacture products in sufficient volume on an efficient and timely basis;
general economic conditions as they affect the Company's customers, as well as
other risks detailed from time to time in the Company's reports to the
Securities and Exchange Commission, including the Company's Form 10-K Annual
Report for fiscal 1999.