EXHIBIT 10.4

ANAREN, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
[For Officers and Key Employees]

          This sets forth the terms of the NON-STATUTORY STOCK OPTION AGREEMENT
(“Agreement”), entered into as of August 9, 2006 (“Effective Date”), by and
between ANAREN, INC. (“Company”) and _____________________, an employee of the
Company or a Subsidiary (“Optionee”), to document the grant of certain stock
options pursuant to the Company’s 2004 Comprehensive Long-Term Incentive Plan.

TERMS

                    1.          Definition of Terms.  For purposes of this
Agreement, all defined terms, as indicated by the capitalization of the first
letter of such term, shall have the meanings specified in the Anaren, Inc. 2004
Comprehensive Long-Term Incentive Plan (“Plan”) to the extent not specified in
this Agreement.

                    2.          Grant of Option.  Pursuant to the Plan and
subject to the terms and conditions of the Plan and this Agreement, the Company
hereby grants to the Optionee the option to purchase from the Company all or any
part of an aggregate of ____ Common Shares, at a purchase price of $_____ per
share (which is equal to the Market Value per Share as of the Effective Date). 
The Option Rights granted pursuant to this Agreement shall be treated for all
purposes as Non-Statutory Stock Options.

                    3.          Expiration Date.  The Option Rights granted
pursuant to this Agreement shall expire on the last normal business day of the
Company that precedes the tenth anniversary (not later than the tenth
anniversary) of the Effective Date, unless sooner terminated or canceled under
the provisions of Paragraph 6 below (“Expiration Date”).

                    4.          Vesting of Option Rights.  The Optionee,
provided the Optionee has remained in the continuous employ of the Company or a
Subsidiary from the Effective Date, may exercise the Option Rights granted under
this Agreement during the periods described below (subject to Paragraph 6
below), for the acquisition of the number of Common Shares stated.

                      (a)      All or any part of 20 percent of the number of
Common Shares set forth in Paragraph 2 may be purchased at any time from the
first anniversary of the Effective Date through the Expiration Date.

                      (b)      All or any part of an additional 20 percent of
the number of Common Shares set forth in Paragraph 2 may be purchased at any
time from the second anniversary of the Effective Date through the Expiration
Date.

                      (c)      All or any part of an additional 20 percent of
the number of Common Shares set forth in Paragraph 2 may be purchased at any
time from the third anniversary of the Effective Date through the Expiration
Date.

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                      (d)      All or any part of an additional 20 percent of
the number of Common Shares set forth in Paragraph 2 may be purchased at any
time from the fourth anniversary of the Effective Date through the Expiration
Date.

                       (e)      All or any part of an additional 20 percent of
the number of Common Shares set forth in Paragraph 2 may be purchased at any
time from the fifth anniversary of the Effective Date through the Expiration
Date.

                    5.          Manner of Exercise.

                      (a)      Option Rights may be exercised on or after the
applicable exercise date and prior to the Expiration Date (or earlier
termination or cancellation date) at any time, and may be exercised in whole or
in part as to the Common Shares then available for purchase.

                      (b)      Option Rights may be exercised only to acquire
whole Common Shares.  No fractional shares shall be issued, and an exercise that
would otherwise result in the issuance of fractional shares shall be disregarded
to the extent of the fraction.

                      (c)      Option Rights shall be exercised by delivery to
the Board (or its designee), in person, by  mail, or by other means acceptable
to the Board, the following:

                                   (i)          A written notice containing a
reference to this Agreement, a statement of the number of Common Shares with
respect to which Option Rights are being exercised.

                                   (ii)         Subject to the approval of the
Board, cash in an amount equal to the purchase price for such shares, or Common
Shares having an aggregate fair market value, as of the date of exercise, equal
to such purchase price, or a combination of cash and Common Shares.

                                   (iii)        Such additional documents as the
Board may require.

                    6.          Termination of Employment.  Following the
Optionee’s termination of employment with the Company or a Subsidiary, the
Optionee may exercise Option Rights granted under this Agreement to the extent
provided in the Plan.  For example, in the event of the Optionee’s voluntary
resignation, (a) the Optionee’s unvested Option Rights shall be cancelled, and
(b) vested Option Rights as of the date of termination for up to an aggregate
maximum of 1,000 Common Shares shall be exercisable until the earlier of the
Expiration Date or the date that is three months following the date of
termination.

                    7.          Assignment or Transfer.  Except as otherwise
provided under the Plan, Option Rights granted pursuant to this Agreement shall
be exercisable only by the Optionee (or the Optionee’s duly appointed guardian
or legal representative) during the Optionee’s lifetime and may not be sold,
trans-ferred, assigned, pledged, hypothecated or otherwise disposed of in any
other way, except by will or the laws of descent and distribution, and shall not
be subject to execution, attachment, garnishment or similar process.  All
unexercised Option Rights granted under this Agreement shall be canceled
automatically upon any such assignment, transfer, attachment, etc.  The
foregoing shall not preclude the exercise of Option Rights (for up to 12 months,
as provided in the Plan) after the Optionee’s death.

                    8.          No Right To Continued Employment.  This
Agreement shall not confer upon the Optionee any right to continued employment
with Company or any Subsidiary nor shall it interfere, in any way, with the
right of the Company to modify the Optionee’s compensation, duties, and
responsibilities, or the Company’s authority to terminate the Optionee’s
employment.

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                    9.          No Rights as a Shareholder.  The granting of
Option Rights shall not confer upon the Optionee any rights as an owner of
Common Shares until the Optionee exercises Option Rights and the Company issues
stock certificate(s) to the Optionee.

                    10.        Withholding.  The Company shall have the right to
deduct any sums that federal, state or local tax laws require to be withheld
from Optionee’s compensation from the Company upon the grant or exercise of
Option Rights.  In the alternative, the Board may require as a condition to
either granting Option Rights or issuing Common Shares that the Optionee (or
other person exercising Option Rights) pay to the Company for deposit with the
appropriate taxing authority, any amounts that federal, state or local tax laws
require to be withheld.

                    11.        Notices.  All notices and communications under
this Agreement shall be in writing and shall be addressed to the residence of
the Optionee and to the principal office of the Company, or such other address
as may be designated by the Company or the Optionee.  Notice shall be deemed
given upon personal delivery or upon receipt.

                    12.        Successors and Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the successors and assigns of the
Company, and the heirs, successors and permitted assigns of the Optionee.

                    13.        Governing Law.  This Agreement shall be construed
in accordance with the laws of the State of New York.  The Optionee agrees to
accept as binding, conclusive and final all decisions and interpretations of the
Board with respect to any questions that may arise under the Plan and this
Agreement.

                    14.        Acknowledgments by Optionee.  Optionee
acknowledges that he has been advised, and that Optionee understands, that:

                      (a)      this document constitutes part of a prospectus
covering securities that have been or will be registered under the Securities
Act of 1933;

                      (b)      the grant of Option Rights and the issuance of
any Common Shares pursuant to the exercise of Option Rights may be subject to,
or may become subject to, applicable reporting, disclosure and holding period
restrictions imposed by Rule 144 under the Securities Act of 1933 (“Rule 144”)
and Section 16 of the Securities Exchange Act of 1934 (“Section 16”); and

                      (c)      Common Shares acquired could be subject to
Section 16(a) reporting requirements as well as the short swing trading
prohibition contained in Section 16(b) which precludes any profit taking with
respect to any stock transactions which occur within any six-month period.

The Optionee further acknowledges receipt of a copy of the Plan.

                    The Company has caused this Agreement to be executed by its
duly authorized officer, and the Optionee has executed this Agreement, both as
of the day and year first written above.

ANAREN, INC.

 

OPTIONEE

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

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Title:

 

 

 

 

 

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Effective for Grants after July 1, 2005.

 

 

 

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