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


                                   FORM 10-K/A
                                 Amendment No. 1


                           AMENDMENT TO ANNUAL REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 27, 1997    Commission file number 000-17885




                        BEI MEDICAL SYSTEMS COMPANY, INC.
             (Exact name of Registrant as specified in its charter)


         Delaware                                        71-0455756
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                     83 Hobart Street, Hackensack, NJ 07601
          (Address of principal executive offices, including zip code)

                                 (201) 488-4960
              (Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $.001 par value

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  and Exchange Act
of 1934  during the  preceding  12 months (or for such  shorter  period that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in any further  amendment to the  Registrant's
Form 10-K. ___.

     The  approximate  aggregate  market  value  of the  Common  Stock  held  by
non-affiliates  of the  Registrant,  based upon the closing  price of the Common
Stock reported on the Nasdaq  National  Market was $24,369,434 as of December 8,
1997.

     The number of shares of Common Stock outstanding as of December 8, 1997 was
7,556,534.
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<PAGE>



                        BEI MEDICAL SYSTEMS COMPANY, INC.

                                      INDEX


                                                                        Page No.
                                                                        --------

Item 10.  Directors and Executive Officers of the Registrant..............     3

Item 11.  Executive Compensation..........................................     4

Item 12.  Security Ownership of Certain Beneficial Owners and Management..    12

Item 13.  Certain Relationships and Related Transactions..................    13

SIGNATURES        ........................................................    14


                                       2
<PAGE>


ITEM 10.  Directors and Executive Officers of the Registrant.

The  executive  officers  and  directors  of the  Company  and their  ages as of
December 1, 1997 are as follows:

Name                          Age   Position
----                          ---   --------

Charles Crocker   (2)         58    Chairman of the Board of Directors

Richard W. Turner             51    President and Chief Executive Officer

Thomas W. Fry                 53    Vice President, Finance and Administration,
                                    Secretary and Treasurer

Samuel Dickstein  (1)         57    Vice President, New Business Development
                                    and Technology

Gary D. Wrench  (1)           64    Director

Dr. Ralph M. Richart  (1)     63    Director

Dr. Lawrence A. Wan  (2)      59    Director

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

(1) Member of the Audit Committee

(2) Member of the Compensation Committee

Mr.  Crocker,  a founder of the Company,  has served as Chairman of the Board of
Directors of the Company since  October 1974,  and served as President and Chief
Executive  Officer  of the  Company  from  October  1995  until his  resignation
immediately  prior  to the  Distribution  in  September  1997.  Mr.  Crocker  is
currently  Chairman of the Board,  President and Chief Executive  Officer of BEI
Technologies,  Inc. He served as President  of Crocker  Capital  Corporation,  a
Small  Business  Investment  Company,  from  1970 to 1985.  He also  served as a
general partner of Crocker Associates, a venture capital investment partnership,
from 1970 to 1990.  He  currently  serves  as a  director  of BEI  Technologies,
Fiduciary Trust Company International,  KeraVision, Inc. and Pope & Talbot, Inc.
Mr.  Crocker  holds a B.S.  from  Stanford  University  and an  M.B.A.  from the
University of California, Berkeley.

Mr.  Turner  began  Medical in 1991 as a  subsidiary  of what is now BEI Medical
Systems  Company,  Inc.  Previously  President of the  Healthcare  Group for the
Cooper  Companies,  Mr. Turner has held  executive  leadership  positions in the
medical  industry  for  over 20  years,  including  President  and  Director  of
Cooper-LaserSonics,  Inc.,  President of CooperVision Inc.,  President and Chief
Executive   Officer/Director   for   Pancretec,   Inc.  and   President  of  Kay
Laboratories. Mr. Turner holds a B.S. from Old Dominion University and an M.B.A.
from Pepperdine University.

Mr. Fry served as Vice  President,  Finance and  Administration  of Medical from
October  1992 until the merger of Medical  into the  Company in  November  1997.
Prior to that  time,  Mr. Fry was  employed  by GTE from 1970 to 1979 in various
accounting and financial  roles  including  three years as the Controller of GTE
Sylvania  in Caracas,  Venezuela.  Mr. Fry was  employed by  Cheeseborough-Ponds
International  as Manager of Profit Planning and  Manufacturing  Controller from
1979 to  1986,  by  Cavitron,  Inc./CUSA,  a  medical  device,  engineering  and
manufacturing  company,  as Controller/CFO from 1986 to 1989, and by Disctronics
Ltd.  as  Corporate  Controller  from 1989 to 1992.  Mr.  Fry holds a B.S.  from
Southeast Missouri State University and an M.B.A. with academic honors from Pace
University.

Mr.  Dickstein  has  served as Vice  President,  New  Business  Development  and
Technology, of Medical since June 1997. He served as Vice President, Operations,
from the  acquisition  of Meditron  Devices,  Inc. by Medical in 1992 until June
1997. Prior to the acquisition, Mr. Dickstein, a co-founder of Meditron Devices,
Inc.,  served as its  Vice-President.  From 1970 to 1978 Mr. Dickstein served as
Electro-Medical  Engineering  Manager for  American  Cystoscope  Makers  (Circon
Corp.).  Mr.  Dickstein  holds a BSEE from the City  College of New York and has
also completed graduate level studies in Electrical Engineering at both New York
University and the New Jersey Institute of Technology.

Mr. Wrench has been a director of the Company since  February  1986.  Mr. Wrench
has been Senior Vice President,  Chief  Financial  Officer and a director of BEI
Technologies,  Inc.  since its  formation in June 1997. He served as Senior Vice
President  and Chief  Financial  Officer of the Company from July 1993 until his
resignation  immediately prior to the Distribution in September 1997. From April
1985 to July 1993, he served as Vice  President of the Company and President and
Chief  Executive  Officer of Motion Systems  Company,  Inc., then a wholly-owned
subsidiary  of the  Company  that  is now a part of BEI  Technologies.  Previous
experience  includes  twenty  years with Hughes  Aircraft  Company  including an
assignment as President of  Spectrolab,  Inc., a Hughes  subsidiary.  Mr. Wrench
holds a B.A. from Pomona College and a M.B.A. from the University of California,
Los Angeles.


                                       3
<PAGE>

Dr.  Richart is Professor of Pathology  and  Obstetrics  and  Gynecology  at the
Columbia   University  College  of  Physicians  and  Surgeons  and  Director  of
Gynecological  Pathology  and  Cytology at the Sloane  Hospital for Women in New
York City.  He served as a Career  Research  Development  Awardee at the Medical
College of Virginia  before moving to  Columbia-Presbyterian  Medical  Center in
1963.  His   professional   interests  have  centered  around   obstetrical  and
gynecological  pathology and cytology with  particular  emphasis on the study of
cervical   neoplasia  and,  more  recently,   the   relationship  of  the  human
papillomavirus to lower genital tract neoplasia. He is the past President of the
International  Gynecologic  Cancer Society.  He received his medical training at
the University of Rochester School of Medicine and Dentistry,  and completed his
pathology residency in the Harvard Hospitals system.

Dr. Wan served as Vice President and Chief Technical Officer of BEI Electronics,
Inc. from July 1990 to September 1997, and is currently Vice President and Chief
Technical Officer of BEI Technologies, Inc., and President of SiTek, Inc., a BEI
Technologies'  subsidiary.  From 1984 until 1990,  he served as Vice  President,
Engineering,  of Systron Corporation,  and also held various other technical and
general management  positions with that company between 1979 and 1984. From 1968
through  1979,  he was founder and Chief  Executive  Officer of Sycom,  Inc.,  a
commercial  electronics  company.  Prior to that, he worked for Hughes  Aircraft
Company  where he headed the Radar Systems  Donner  Section of the Hughes Ground
Systems  Group.  In  1962,  Dr.  Wan and two  other  professors  established  an
Engineering School at the University of California, Santa Barbara, where he also
taught  Engineering.  Dr. Wan holds B.S., M.S. and Ph.D.  degrees in Engineering
and Applied Sciences from Yale University.

The Company has a classified  Board of  Directors,  which may have the effect of
deterring  hostile takeovers or delaying changes in control or management of the
Company. For purposes of determining their term of office, directors are divided
into three classes,  with the term of office of the first class to expire at the
1998 annual meeting of stockholders,  and the term of office of the second class
to expire at the 1999 annual meeting of  stockholders  and the term of office of
the third class to expire at the 2000 annual meeting of stockholders.

Class I  consists  of Mr.  Turner;  Class II  consists  of Mr.  Crocker  and Dr.
Richart;  and Class III consists of Mr. Wrench and Dr. Wan. Directors elected to
succeed those directors whose term expires will be elected for a three year term
of  office.  All  directors  hold  office  until  the  next  annual  meeting  of
stockholders,  at which their term expires, and until their successors have been
duly elected and  qualified.  Executive  officers serve at the discretion of the
Board.  There  are  no  family  relationships  among  any of  the  officers  and
directors.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Exchange Act requires the Company's directors and executive
officers,  and  persons who own more than ten  percent of the  Company's  Common
Stock,  to file with the Commission  initial reports of ownership and reports of
changes in ownership of Common Stock of the  Company.  Officers,  directors  and
greater  than  ten  percent   stockholders  are  required  by  the  Commission's
regulations  to furnish the Company with copies of all Section  16(a) forms they
file.

     To the Company's knowledge,  based solely on a review of the copies of such
reports  furnished  to the  Company and  written  representations  that no other
reports were  required,  during the fiscal year ended  September  27, 1997,  the
Company's  officers,  directors and greater than ten percent  beneficial  owners
complied  with  all  applicable  Section  16(a)  filing  requirements  with  the
exception of a former director, Mr. Peter G. Paraskos, who failed to timely file
a Form 4 report  disclosing one  transaction  and an initial report of ownership
for Dr.  Robert  Mehrabian,  a former  director of the Company,  which was filed
late.


ITEM 11.  Executive Compensation.

Compensation of Directors

     During fiscal 1997, each  non-employee  director of the Company  received a
monthly fee of $1,000,  with the exception of former  director  George Brown who
served as a consultant to the Company until the Distribution.  Each non-employee
director of the Company  received a fee of $500 for each Board meeting  attended
and for each committee  meeting attended by committee  members and a fee of $250
for each telephone conference Board meeting in which such director participated.
In the fiscal year ended  September  27, 1997,  the total  compensation  paid to
non-employee directors for services as directors was $55,000. The members of the
Board are also  eligible  for  reimbursement  for  their  expenses  incurred  in
connection with attendance at Board meetings in accordance with Company policy.


                                       4
<PAGE>

     Former  director  Mr.  Brown  provided  consulting  services to the Company
pursuant to an agreement  under which he was paid a retainer of $3,000 per month
and a fee of $750 per day of service.  His  agreement  expired June 30, 1997. In
the fiscal year ended  September  27, 1997,  the Company paid Mr. Brown  $33,750
under the agreement.  Pursuant to his agreement the payments  included $6,606 in
life and health  insurance  premiums  paid by the Company in fiscal year 1997 on
behalf of Mr. Brown.

     Dr.  Richart,  currently a director  of the  Company,  provided  consulting
services to the Company  pursuant to an agreement  under which he was paid a fee
of $1,000 per day of service.  In the fiscal year ended  September 27, 1997, the
Company paid Dr. Richart $30,750 under the agreement.


Compensation of Executive Officers

                             Summary of Compensation

     The following  table shows,  for the fiscal years ended September 27, 1997,
September 28, 1996 and September  30, 1995,  compensation  awarded or paid to or
earned by the Company's Chief  Executive  Officer and its four other most highly
compensated  executive officers for fiscal 1997 the ("Named Executive Officers")
and the compensation  earned in fiscal 1997 by the three  individuals who became
executive  officers  at  the  beginning  of  fiscal  1998  as a  result  of  the
Distribution.  Messrs.  Wrench,  Madni,  Wan and Corr  resigned as officers  and
employees of the Company  immediately  prior to the  Distribution.  Mr.  Crocker
resigned as  President  and Chief  Executive  Officer  immediately  prior to the
Distribution,  but  continues  to serve as Chairman of the Board of Directors of
the Company.  Messrs.  Crocker,  Wrench,  Madni,  Wan and Corr now work with BEI
Technologies in the same principal positions identified below.


                                       5
<PAGE>

Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                      Long Term
                                                                                    Compensation
                                                        Annual Compensation(1)          Awards     
                                                                                   Restricted Stock      All Other
                Name and                                Salary(2)       Bonus        Awards (3)(4)    Compensation(5)
           Principal Position               Year           ($)           ($)              ($)              ($)
           ------------------               ----           ---           ---              ---              ---
<S>                                         <C>           <C>            <C>           <C>                <C>
Mr. Charles Crocker                         1997          341,400        50,000              0            4,707
    Chairman of the Board and               1996          260,775        35,000              0            3,252
    Former President and Chief              1995          195,150             0              0            3,240
    Executive Officer

Mr. Gary D. Wrench                          1997          282,000        80,000         63,750            5,102
    Former Senior Vice President and        1996          264,000        35,000         48,750            4,370
    Chief Financial Officer                 1995          264,000             0              0            4,223

Dr. Asad M. Madni                           1997          290,239        65,000        315,000            5,823
    President, Sensors & Systems            1996          239,312        95,000         65,000            5,488

Dr. Lawrence A. Wan                         1997          217,043        33,000         53,125            8,463
    Former Vice President,                  1996          190,922        45,000         26,000            7,792
    Corporate Technology                    1995          182,100        45,000         15,000            6,920

Mr. Robert R. Corr                          1997          159,600        45,000         31,875            4,400
    Former Secretary, Treasurer             1996          149,600        16,000         13,000            3,681
    and Controller                          1995          139,600        12,000          7,875            3,635

Mr. Richard W. Turner                       1997          229,290             0              0            7,193
    Current President and
    Chief Executive Officer

Mr. Thomas W. Fry                           1997          149,133        13,500              0            6,912
    Current Vice President,
    Finance and Administration,
    Treasurer and Secretary

Mr. Samuel Dickstein                        1997          128,800         7,500              0            6,142
    Current Vice President ,
    Business Development
</TABLE>

----------

(1)  As permitted by rules  promulgated by the Commission,  no amounts are shown
     for  "Other  Annual   Compensation"   because  no  person  listed  received
     "perquisites"  in an amount  exceeding  the  lesser  of 10 % of bonus  plus
     salary or $50,000.

(2)  Includes annual cash payments  designated as automobile  allowances,  which
     did not  exceed  $11,400  for any  individual  in any year;  also  includes
     amounts  earned but deferred at the election of the person listed  pursuant
     to the Company's  Retirement  Savings Plan and $36,027 of accrued  vacation
     pay deferred by Dr. Madni.

(3)  Represents  the dollar value of shares  awarded,  calculated by multiplying
     the market  value based on the closing  sales price on the date of grant by
     the number of shares awarded. At September 27, 1997, the aggregate holdings
     and value of restricted stock of the Named Executive Officers (based on the
     number of shares held at fiscal  year-end  multiplied  by the closing sales
     price of the  Company's  Common  Stock as reported  on the Nasdaq  National
     Market on October 8, 



                                       6
<PAGE>

     1997,  the date on  which  post-Distribution  regular  way  trading  of the
     Company's  Common Stock began) was as follows:  Mr. Wrench,  24,419 shares,
     valued at $320,499;  Dr. Madni, 60,267 shares, valued at $791,004; Dr. Wan,
     19,250  shares,  valued at $252,656;  Mr. Corr,  12,700  shares,  valued at
     $166,688. The restrictions on awards of restricted stock lapse with respect
     to 15% of the total number of shares per year on the first, second,  third,
     fourth and fifth anniversaries of the date of grant and with respect to the
     remaining shares subject to such award on the sixth anniversary of the date
     of grant.  Dividends are paid on shares of restricted stock when, as and if
     the Board declares dividends on the Common Stock of the Company.

(4)  During the past three  fiscal  years,  the  Company did not grant any stock
     options  or issue  any  stock  appreciation  rights  to any of the  persons
     listed.

(5)  Includes $3,253,  $3,648, $3,675, $3,884, $3,549, $3,721, $2,482 and $2,519
     paid in fiscal 1997 to Messrs.  Crocker,  Wrench, Madni, Wan, Corr, Turner,
     Fry and Dickstein  respectively;  $2,098, $3,000, $2,999, $3,164 and $2,988
     paid in fiscal 1996 to Messrs.  Crocker,  Wrench,  Madni, Wan and Corr, and
     $2,150,  $2,655, $2,796 and $2,854 paid in fiscal 1995 to Messrs.  Crocker,
     Wrench, Wan and Corr,  respectively,  as a normal contribution  pursuant to
     the Company's  Retirement  Savings Plan.  The remaining sum for each of the
     persons  listed is  attributable  to premiums paid by the Company for group
     term life insurance and personal commuting expense paid by the Company.

                        Stock Option Grants and Exercises

     The Company  grants  options to its  executive  officers and key  employees
under the Amended Plan. In connection with the Distribution, unexercised options
issued under the Amended Plan and  outstanding  at the date of the  Distribution
were converted  into options to purchase BEI  Technologies  Common Stock.  Thus,
immediately  after the  Distribution  was effective,  the Company had no options
outstanding.  However,  on November 4, 1997,  with the  completion of the merger
into the Company of BEI Medical  Systems  Company,  Inc.,  a  subsidiary  of the
Company at the time, and the substitution of options to purchase Common Stock of
the Company for options to purchase Common Stock of BEI Medical Systems Company,
Inc.  outstanding  at that  time,  options  were once again  outstanding.  As of
January 8, 1998,  options to purchase a total of 704,228 shares had been granted
and were  outstanding  under the Amended  Plan and  options to  purchase  88,687
shares  remained  available for grant  thereunder.  During the fiscal year ended
September 27, 1997,  there were no stock options  granted to the Named Executive
Officers.  No Named  Executive  Officer  held  stock  options  to  purchase  the
Company's  stock at the end of fiscal 1997. The Company has not issued any stock
appreciation  rights.  The  following  table  shows,  for fiscal  1997,  certain
information regarding options exercised.

     Aggregated  Option  Exercises  in  Last  Fiscal  Year,  and  FY-End  Option
Values(1)


                            Shares
                     Acquired on Exercise         Value
       Name                 (#)(2)             Realized ($)
       ----                 ------             ------------
Mr. Crocker.....              0                     0
Mr. Wrench......            33,600               253,900
Dr. Madni.......              0                     0
Dr. Wan.........            20,000               212,400
Mr. Corr........            10,000                71,250

(1)  No options to purchase  the  Company's  Common Stock were granted in fiscal
     1997 or outstanding at the end of fiscal 1997.

(2)  The number of shares of the Company's  Common Stock  received upon exercise
     of underlying options.


                                       7
<PAGE>

                         Management Incentive Bonus Plan

     In fiscal  1997 the  Company had a  Management  Incentive  Bonus Plan under
which members of  management  were eligible to receive cash bonuses based on the
achievement of specific  operating  results  established at the beginning of the
fiscal year. BEI Technologies assumed  responsibility for the payment of bonuses
to the named  Executives  Officers who resigned their positions with the Company
immediately prior to the Distribution.

     For fiscal 1998 the Company's Board adopted a revised Management  Incentive
Bonus  Plan (MIB  Plan) for  management  of the  Company.  On the basis of goals
related to achievement of certain  business  development,  product  development,
operational  improvements and financial results, the Compensation Committee will
recommend a bonus fund to consist of a combination  of cash and stock awards for
individual  members of management subject to final approval by the Board. At its
November  1997  meeting  the  Compensation  Committee  and  the  Board  approved
additional goals for the Chairman, the President and the Chief Financial Officer
that relate to building the financial strength of the Company.

                              Employment Agreements

     The employment  agreement  between the Company and Mr.  Turner,  President,
Chief  Executive  Officer and a director  of the  Company,  provide  that if Mr.
Turner is  terminated  by the  Company or  terminates  his  employment  with the
Company  for good  reasons,  as defined  in the  employment  agreement,  he will
receive from the Company his full-time then current  compensation  for 12 months
after such termination.

     The employment  agreement  between the Company and Mr. Fry, Vice President,
Finance and Administration, Secretary and Treasurer of the Company, provide that
if Mr. Fry is terminated by the Company or terminates  his  employment  with the
Company  for good  reasons,  as defined  in the  employment  agreement,  he will
receive from the Company his full-time then current  compensation  for 12 months
after such termination.

           Compensation Committee Interlocks and Insider Participation

     As noted above, during fiscal 1997, the Compensation Committee consisted of
Messrs. Brown, Brooks and Giroir. Mr. Brown retired in July 1990 as President of
the Company and  continued  to serve as a consultant  to the Company  until June
30,1997.  Mr. Giroir served as Corporate Secretary of the Company until February
1995 for which he received  no  compensation  in  addition  to that  received as
director's fees.

         Report of the Compensation Committee of the Board of Directors
                          on Executive Compensation(1)

     The   Compensation   Committee  (the   "Committee")   is  composed  of  two
non-employee directors.  The current members of the Committee are Mr. Wrench and
Dr. Wan. The members of the Committee until their  resignation in September 1997
as a result of the  Distribution  were  Messrs.  Brown,  Brooks and Giroir.  The
Committee is responsible  for, among other things,  setting the  compensation of
executive  officers,  including any stock-based awards to such individuals under
the Amended Plan and 1992 Restricted Stock Plan (collectively, the "Plans").

Executive Compensation Principles

     The Committee seeks to compensate  executive  officers in a manner designed
to achieve the primary goal of the Company's stockholders: increased stockholder
value.  In  furtherance  of this goal,  the Committee  determines a compensation
package that takes into account both competitive and performance factors. Annual
compensation of Company executives is comprised of salary and bonus, an approach
consistent with the compensation programs of most electronics  companies,  which
is what the Company  primarily  was at that time. A  substantial  portion of the
cash  compensation  of each executive  officer is contingent  upon the Company's
performance.  Bonuses, therefore, may be substantial, may vary significantly for
an individual from year to year, and may vary significantly  among the executive
officers.  In  the  past,  another  significant  component  of 


----------
(1) This Section is not  "soliciting  material",  is not deemed "filed" with the
Commission  and is not to be  incorporated  by  reference  in any  filing of the
Company under the Securities Act of 1933, as amended (the "Securities  Act"), or
the Exchange Act,  whether made before or after the date hereof and irrespective
of any general incorporation language in any such filing.


                                       8
<PAGE>

compensation  of  executive  officers is  restricted  stock grants which vest at
approximately 15% per annum over a six year period. In the past, incentive stock
options  also  were a  significant  part  of the  compensation  of  some  of the
executive officers.

Base Salary

     The Committee  determined salaries for fiscal 1997 in December 1996 for all
executive officers. In adjusting the base salary of the executive officers,  the
Compensation   Committee  examines  both  competitive  and  qualitative  factors
relating  to  corporate  and  individual  performance.  In  connection  with its
examination  of competitive  factors,  because the Company was then primarily an
electronics  company,  the  Committee  reviewed  an  independent  survey of base
salaries  paid by  other  electronics  companies  of  comparable  size.  In many
instances,  assessment of qualitative factors necessarily  involves a subjective
assessment by the Committee.  In determining  salary  adjustments  for executive
officers for fiscal 1997, the Committee  relied  primarily on the evaluation and
recommendation of Mr. Crocker of each officer's responsibilities for fiscal 1997
and performance during fiscal 1996.

     At its meeting in December  1996 the Committee  approved base  compensation
increases  effective  at the  beginning  of fiscal 1997 for the Named  Executive
Officers other than Mr. Crocker as follows: Mr. Corr by 6.9%, Dr. Madni by 8.7%,
Dr. Wan by 4.0%,  Mr. Wrench by 7.1%.  In a  Compensation  Committee  meeting in
March 1997,  Dr. Wan's salary was further  increased  by 18.0%  effective  April
1997.  Additional  base  compensation  increases  were approved as follows:  Mr.
Turner by 18.6% effective  October 1996 and Mr. Fry by 3.4% and Mr. Dickstein by
9.9% effective February 1997.

Management Incentive Bonus

     In fiscal  1997,  the Company had a Management  Incentive  Bonus Plan under
which members of  management  were eligible to receive cash bonuses based on the
achievement of specific  operating  results  established at the beginning of the
fiscal year. BEI Technologies assumed  responsibility for the payment of bonuses
following the  Distribution  at the end of fiscal 1997 and no payments were made
to the "Named Executive Officers" by the Company. In November 1997 the Company's
Board  awarded  bonus  payments  to Mr. Fry of $13,500 and to Mr.  Dickstein  of
$7,500 for fiscal 1997.

Chief Executive Officer Compensation

     In general, the factors utilized in determining Mr. Crocker's  compensation
were  similar  to those  applied  to other  executives  officers  in the  manner
described in the preceding paragraphs:  however, a significant percentage of his
potential earnings was subject to consistent, positive, long-term performance of
the Company.

     In December  1996,  Mr.  Crocker's  base  compensation  for fiscal 1997 was
increased by 4.7%. At the same time, the Company's Board of Directors approved a
separate  incentive  bonus plan for Mr. Crocker for fiscal 1997.  Achievement of
all goals  enumerated under the plan gave Mr. Crocker the opportunity to earn an
incentive  bonus equal to his fiscal 1997 base pay. On September  27, 1997, as a
result of and immediately  prior to the  Distribution,  Mr. Crocker  resigned as
President and Chief Executive Officer of the Company.  BEI Technologies  assumed
responsibility  for the payment  after the end of fiscal  1997 of Mr.  Crocker's
incentive bonus, as a result of the Distribution. Mr. Crocker continues to serve
as Chairman of the Board of Directors  of the Company at an annual  compensation
of $50,000 per year.

Long-Term Incentives

     The Company uses the Plans to further align the  interests of  stockholders
and  management  by creating  common  incentives  related to the  possession  by
management of a substantial  economic interest in the long-term  appreciation of
the Company's  stock.  In  determining  the size of a restricted  stock award or
incentive  stock option to be granted to an  executive  officer,  the  Committee
takes into account the officer's  position,  level of responsibility  within the
Company,  the officer's  existing equity  holdings,  the potential reward to the
officer if the stock appreciates in the public market,  the incentives to retain
the  officer's  services to the Company,  the  competitiveness  of the officer's
overall compensation arrangements and the performance of the officer. Based on a
review of this mix of  factors,  during  fiscal 1997 the Board made no grants of
incentive stock options or restricted  stock to any "Named  Executive  Officers"
but in November  1997,  the  Committee  awarded  incentive  stock options to Mr.
Turner (15,000 shares), Mr. Fry (8,750 shares) and Mr. Dickstein (7,265 shares).


                                       9
<PAGE>

     Section  162(m) of the Code limits the  Company to a deduction  for federal
income tax purposes of no more than $1 million of  compensation  paid to certain
Named Executive Officers in a taxable year. Compensation above $1 million may be
deducted  if it is  "performance-based  compensation"  within the meaning of the
Code. The Committee has determined  that stock options granted under the Amended
Plan  with an  exercise  price at least  equal to the fair  market  value of the
Company's Common Stock on the date of grant shall be rated as "performance-based
compensation".

George S. Brown                 Richard M. Brooks          C. Joseph Giroir, Jr.


                                       10
<PAGE>

                      Performance Measurement Comparison(1)

     The following  graph shows the value of an investment of $100 on October 2,
1992 in cash of (i) the Company's Common Stock,  (ii) the Center for Research in
Securities  Prices ("CRSP") Total Return Index for the Nasdaq Stock Market (U.S.
Companies)   and  (iii)  the  CRSP  Total  Return   Industry  Index  for  Nasdaq
Non-Financial  Companies.  All values assume  reinvestment of the full amount of
all  dividends and are  calculated as of the last trading day of the  applicable
fiscal year of the Company(2):


                Comparison of Five Year-Cumulative Total Returns
                             Performance Garph for
                                BEI Electronics



 [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]

Prepared by the Center for Research in Security Prices
Produced on 01/22/98 including data to 09/26/97
<TABLE>
<CAPTION>
                                                               Legend

CRSP Total Returns Index for:                   10/02/92        10/01/93       09/30/94       09/29/95       09/27/96      09/26/97
----------------------------                    --------        --------       --------       --------       --------      --------
<S>                                               <C>            <C>            <C>             <C>             <C>          <C>  
BEI Electronics, Inc.                             100.0          113.1          69.5            102.1           156.3        202.1
Nasdaq Stock Market (US Companies)                100.0          133.6         134.8            186.1           221.6        302.6
Nasdaq Non-Financial Stocks                       100.0          133.6         132.8            185.1           216.8        289.6
SIC 0100-5999, 7000-9999 US & Foreign   
</TABLE>
                                                               (c)Copyright 1998

----------
(1)  This Section is not "soliciting  material",  is not deemed "filed" with the
     Commission and is not to be  incorporated by reference in any filing of the
     Company  under the  Securities  Act of 1933,  as amended  (the  "Securities
     Act"),  or the Exchange  Act,  whether made before or after the date hereof
     and irrespective of any general incorporation language in any such filing.
(2)  Fiscal year ending on the Saturday nearest September 30.






                                       11
<PAGE>

ITEM 12.  Security Ownership Of Certain Beneficial Owners And Management.

     The following table sets forth certain information  regarding the ownership
of the Company's Common Stock as of January 8, 1998 by: (i) each director;  (ii)
each  executive  officer;  (iii) all  executive  officers  and  directors of the
Company as a group;  and (iv) all those  known by the  Company to be  beneficial
owners of more than five percent of its Common Stock.

<TABLE>
<CAPTION>
                                                                       Beneficial Ownership(l)
                                                              
                                                              Number of                 Percent of
         Beneficial Owner                                      Shares                    Total(2)
<S>                                                           <C>                          <C>  
Mr. Charles Crocker(3)                                        1,557,904                    20.6%
         One Post Street
         Suite 2500
         San Francisco, CA
Brinson Partners, Inc.(4)                                       611,400                     8.1%
         209 S. LaSalle Street
         Chicago, IL
So Gen International Fund, Inc.(5)                              420,000                     5.6%
         1221 Avenue of the Americas
         8th Floor
         New York, NY 10020
Dimensional Fund Advisors, Inc.(6)                              489,400                     6.5%
         1299 Ocean Avenue
         Penthouse
         Santa Monica, CA
Hollybank Investment, LP (7)                                    545,000                     7.2%
         One Financial Center, Suite 1600
         Boston, MA
Mr. Samuel Dickstein(8)                                          51,644                     *
Mr. Thomas W. Fry(8)                                             49,645                     *
Dr. Ralph M. Richart(8)                                          55,161                     *
Mr. Richard W. Turner(8)                                        313,730                     4.0%
Dr. Lawrence A. Wan(8)                                           19,250                     *
Mr. Gary D. Wrench(8)(9)                                         82,705                     1.1%
All executive officers and directors
         as a group (7 persons)(10)                           2,130,039                    26.7%
</TABLE>

*    Less than one percent.

(1)  This table is based upon  information  supplied by officers,  directors and
     principal  stockholders  of the Company and upon any  Schedules  13D or 13G
     filed with the  Securities  and  Exchange  Commission  (the  "Commission").
     Unless  otherwise  indicated in the  footnotes to this table and subject to
     community property laws where applicable, the Company believes that each of
     the  stockholders  named in this table has sole voting and investment power
     with respect to the shares indicated as beneficially owned.

(2)  Applicable percentages are based on 7,556,534 shares outstanding on January
     8, 1998, adjusted as required by rules promulgated by the Commission.

(3)  Includes  400,000  shares  held by Mr.  Crocker  as  trustee  for his adult
     children,  as to which Mr. Crocker  disclaims  beneficial  ownership.  Also
     includes 54,936 shares held in a trust of which, Mr. Crocker is beneficiary
     and sole trustee.  Mr.  Crocker,  acting  alone,  has the power to vote and
     dispose of the shares in each of these trusts.

(4)  Represents shares held by Brinson Partners, Inc. ("Partners") which has the
     sole power to vote and  dispose of the shares held by it and shares held by
     Brinson  Trust  Company  ("Trust")  which  has the  sole  power to vote and
     dispose of the shares held by it.  Trust is a  wholly-owned  subsidiary  of
     Partners  which is a  wholly-owned  subsidiary  of Brinson  Holdings,  Inc.
     ("Holdings"). Holdings may be deemed to share the power to vote and dispose
     of all shares held by 


                                       12
<PAGE>

     Partners  and Trust,  and Partners may be deemed to share the power to vote
     and dispose of all shares held by itself or Trust. Therefore, both Holdings
     and Partners  each may be deemed a beneficial  owner of all the shares held
     by Partners and Trust.

(5)  So  Gen  International  Fund,  Inc.  shares  with  Societe  Generale  Asset
     Management Corp. the power to vote and dispose of all shares held by it.

(6)  Represents  shares held by Dimensional Fund Advisors,  Inc., DFA Investment
     Dimensions  Group Inc. and The DFA Investment  Trust  Company.  Officers of
     Dimensional  Fund  Advisors,  Inc.  have sole power to vote and  dispose of
     shares  beneficially  owned by it,  including shares held by DFA Investment
     Dimensions Group Inc. and The DFA Investment Trust Company.

(7)  Represents shares held by Hollybank Investments, LP ("Hollybank") which has
     the sole power to vote and  dispose of the shares  held by it and  includes
     40,000 shares held by Dorsey R. Gardner,  general partner of Hollybank, who
     has the sole  power to vote and  dispose of his  shares.  Mr.  Gardner,  as
     general partner of Hollybank, may be deemed to beneficially own shares held
     by Hollybank.  Except to the extent of his interest as a limited partner in
     Hollybank, Mr. Gardner disclaims such beneficial ownership.

(8)  Includes  shares which  certain  officers and  directors  have the right to
     acquire within 60 days after the date of this table pursuant to outstanding
     options as follows:  Mr. Dickstein,  35,854 shares;  Mr. Fry, 8,274 shares;
     Dr. Richart,  55,161 shares; Mr. Turner, 313,730 shares; Mr. Wrench, 20,686
     shares;  and all  executive  officers  and  directors  as a group,  433,705
     shares.  Also includes shares which certain officers and directors have the
     right to vote pursuant to unvested  portions of restricted  stock awards as
     follows:  Dr. Wan,  18,014  shares;  Mr.  Wrench,  13,080  shares;  and all
     executive officers and directors as a group, 31,094 shares.

(9)  Includes  45,276  shares held in a revocable  trust of which Mr. Wrench and
     his wife,  Jacqueline Wrench, are beneficiaries and sole trustees.  Mr. and
     Mrs. Wrench,  acting alone,  each has the power to vote and dispose of such
     shares.  Also includes  16,743 shares which Mr. Wrench,  acting alone,  has
     power to vote and dispose of.

(10) Includes the shares described in the Notes above.


ITEM 13.  Certain Relationships and Related Transactions.

     The Company's By-Laws provide that the Company will indemnify its directors
and executive officers and may indemnify its other officers, employees and other
agents to the  extent  not  prohibited  by  Delaware  law.  Under the  Company's
By-Laws,  indemnified  parties are entitled to  indemnification  for negligence,
gross  negligence  and  otherwise  to the fullest  extent  permitted by law. The
By-Laws also require the Company to advance  litigation  expenses in the case of
stockholder  derivative actions or other actions,  against an undertaking by the
indemnified party to repay such advances if it is ultimately determined that the
indemnified party is not entitled to indemnification.

     Dr. Richart, a director of the Company, holds 50% of the equity in
GynHiTech Brasil Ltda ("GynHi").  In August, 1997, the Company and GynHi entered
a three-year exclusive  distribution agreement allowing GynHi to market and sell
the Company's  products in Brazil.  Pursuant to this agreement  GynHi  purchased
$35,404  worth of products  from the Company at wholesale  prices in fiscal year
1997, and $125,876 in the first quarter of fiscal 1998.




                                       13
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                  BEI Medical Systems Company, Inc.



                                      By:      /s/ Thomas W. Fry
                                          -------------------------------------
                                          Thomas W. Fry
                                          Vice President of Finance and
                                          Administration, Secretary & Treasurer

                                          February ___, 1998





                                       14
<PAGE>

                                   SIGNATURES



     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Signature                         Title
---------                         -----

         *                        Chairman of the Board of Directors
--------------------------
(Charles Crocker)

/s/ Thomas W. Fry                 Vice President of Finance and Administration,
--------------------------        Secretary and Treasurer (Principal Financial 
(Thomas W. Fry)                   and Accounting Officer) 
                          
         *                        Director      
--------------------------
(Ralph M. Richart)

/s/ Richard W. Turner             President, Chief Executive Officer & Director
--------------------------        (Principal Executive Officer)
(Richard W. Turner)               

         *                        Director
--------------------------
(Lawrence A. Wan)

/s/ Gary D. Wrench                Director
--------------------------
(Gary D. Wrench)


         * By: /s/ Gary D. Wench
              -------------------------------
              Gary D. Wrench
              ATTORNEY-IN-FACT





                                       15