SCHEDULE 14A INFORMATION
                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934

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[ ]  Filed by a party other than the registrant

Check the appropriate box:

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     14a-6(e)(2))

[X]  Definitive Proxy Statement

[ ]  Definitive Additional Materials

[ ]  Soliciting Material Under Rule 14a-12

                             Anaren Microwave, Inc.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement if other than the Registrant)

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[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
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     previously.  Identify the previous filing by registration statement number,
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                                                 -------------------------------

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

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


<PAGE>
                             ANAREN MICROWAVE, INC.

                               6635 Kirkville Road
                          East Syracuse, New York 13057

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

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                         To Be Held on November 2, 2000

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

To the Holders of the Common Stock
   of Anaren Microwave, Inc.:

      PLEASE TAKE  NOTICE,  that the Annual  Meeting of  Shareholders  of Anaren
Microwave,  Inc. (the "Company") will be held on November 2, 2000, at 11:00 a.m.
Eastern Standard Time at the Wyndham Hotel, 6302 Carrier Parkway, East Syracuse,
New York 13057, for the following purposes:

        (1) To elect two directors;

        (2) To approve the Anaren  Microwave,  Inc.  Incentive Stock Option Plan
            for Key Employees, to replace the Company's existing Incentive Stock
            Option Plan;

        (3) To approve the  Company-Wide  Anaren  Microwave,  Inc.  Stock Option
            Plan;

        (4) To  approve  an   amendment   to  the   Company's   Certificate   of
            Incorporation to authorize additional shares; and

        (5) To transact such other  business as may be properly  brought  before
            the Meeting.

      Shareholders  of record as of the close of business on September  17, 2000
will be entitled to notice of and to vote at the Meeting.

      Enclosed  is the annual  report for the fiscal  year ended June 30,  2000,
along with a proxy statement and proxy. Shareholders who do not expect to attend
the Meeting are requested to sign and return the proxy in the enclosed envelope.

                                             By Order of the Board of Directors

                                             David M. Ferrara
                                             Secretary and General Counsel

Dated: September 18, 2000
East Syracuse, New York


<PAGE>

                             ANAREN MICROWAVE, INC.

                               6635 Kirkville Road
                          East Syracuse, New York 13057

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

      This Proxy  Statement is being mailed on or about  September  18, 2000, to
the Shareholders of Anaren Microwave,  Inc. ("Anaren" or the "Company") entitled
to receive the  accompanying  Notice of Annual  Meeting of  Shareholders  and is
provided,  by  order  of  its  Board  of  Directors,   in  connection  with  the
solicitation  of proxies to be used at the Annual Meeting of  Shareholders  (the
"Meeting")  of the Company to be held on  November 2, 2000 at 11:00 a.m.  and at
any  adjournment  or  adjournments  thereof,  for the  purposes set forth in the
Notice.

      If  the  enclosed  form  of  proxy  is  executed  and  returned,   it  may
nevertheless  be revoked at any time prior to its  exercise by (i)  submitting a
subsequently  dated proxy; or (ii) filing written notice of such revocation with
the Secretary of the Meeting.  The proposals  described in this Proxy  Statement
will be presented  by the Board of  Directors of the Company.  Where a choice is
specified with respect to a proposal,  the shares  represented by the proxy will
be voted in accordance with the  specifications  made.  Where a choice is not so
specified,  the  shares  represented  by the  proxy  will be voted to elect  the
nominees  for  director  named  herein,  and to  approve  the  Anaren  Microwave
Incentive Stock Option Plan for Key Employees, the Company-wide Anaren Microwave
Stock Option Plan, and the proposed  amendments to the Company's  Certificate of
Incorporation.

                 VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

      At the close of business on September 17, 2000,  the record date stated in
the accompanying Notice, the Company had outstanding 11,027,660 shares of common
stock,  $.01 par value (the  "Common  Stock"),  each of which is entitled to one
vote with  respect to each matter to be voted on at the  Meeting.  A majority of
the issued and outstanding shares of Common Stock present in person or by proxy,
a total of  5,513,831  shares,  will be required to  constitute a quorum for the
transaction of business at the Meeting. The Company has no class of voting stock
outstanding other than the Common Stock.

      Abstentions and broker non-votes (as defined below) are counted as present
for the  purpose  of  determining  the  presence  or absence of a quorum for the
transaction of business.  For the purpose of  determining  the vote required for
approval of matters to be voted on at the Meeting,  shares held by  Shareholders
who abstain  from voting will be treated as being  "present"  and  "entitled  to
vote" on the matter and, thus, an abstention has the same legal effect as a vote
against  the  matter.  However,  in the  case of a  broker  non-vote  or where a
shareholder  withholds  authority  from  his  proxy  to vote  the  proxy as to a
particular matter, such shares will not be treated as "present" and "entitled to
vote" on the matter.  Accordingly,  a broker  non-vote or the  withholding  of a
proxy's  authority will have no effect on the outcome of the vote on the matter,
other than in the case of matters  requiring  approval by holders of a specified
percentage of the outstanding Common Stock. A "broker non-vote" refers to shares
represented  at the  Meeting in person or by proxy by a broker or nominee  where
such broker or nominee (i) has not received voting  instructions on a particular
matter  from the  beneficial  owner or persons  entitled  to vote;  and (ii) the
broker or nominee does not have discretionary voting power on such matter.


<PAGE>

                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

      The following table sets forth certain information with respect to persons
known to the Company to own beneficially more than 5% of the outstanding  shares
of Common  Stock of the Company,  as of September  17, 2000 (except as otherwise
indicated).

<TABLE>
<CAPTION>
                                                   Number of Shares
Name and Address                                    of Common Stock              Percent
of Beneficial Owner                              Beneficially Owned (1)         of Class
-------------------                              ----------------------         --------
<S>                                                   <C>                         <C>
Kern Capital Management, LLC ....................     1,231,500(2)                11.2%
114 West 47th Street
Suite 1926
New York, NY 10036

AMVESCAP PLC ....................................       882,900(3)                 8.0%
1315 Peachtree Street, N.E.
Atlanta, GA 30309

Bank of America Corporation .....................       621,750(4)                 5.6%
100 North Tryon Street
Charlotte, NC 28255
</TABLE>
---------------
(1)   Except as otherwise indicated, as of September 17, 2000 all of such shares
      are owned with sole voting and investment  power.  Share numbers are based
      solely on  indicated  filings as  adjusted  to  account  for the 50% stock
      dividend paid as of June 9, 2000.

(2)   Based  solely on  information  contained  in an  Amendment to Schedule 13G
      filed with the  Securities  and Exchange  Commission  on February 8, 2000,
      Kern  Capital  Management,  LLC has sole  voting  power  with  respect  to
      1,167,450  shares and sole  dispositive  power with  respect to all shares
      listed.

(3)   Based  solely on  information  contained  in an  Amendment to Schedule 13G
      filed  with the  Securities  and  Exchange  Commission  on April 7,  2000,
      AMVESCAP  PLC has shared  voting power and shared  dispositive  power with
      respect to all shares listed.

(4)   Based  solely on  information  contained  in an  Amendment to Schedule 13G
      filed with the  Securities  and Exchange  Commission  on February 2, 2000,
      Bank of America  Corporation  (including  certain of its subsidiaries) has
      shared  voting  power and shared  dispositive  power  with  respect to all
      shares listed.


                                       2
<PAGE>

                        SECURITY OWNERSHIP OF MANAGEMENT

      The following  table sets forth certain  information,  as of September 17,
2000, with respect to the beneficial  ownership of the Company's Common Stock by
(i) each director and nominee for director who owned  beneficially any shares of
Common Stock,  (ii) each  executive  officer of the Company named in the Summary
Compensation Table under "Executive Compensation" below, and (iii) all directors
and executive officers of the Company as a group.

<TABLE>
<CAPTION>
                                                        Number of Shares
Name and Address                                         of Common Stock             Percent
of Beneficial Owner                                   Beneficially Owned (1)         of Class
-------------------                                   ----------------------         --------
<S>                                                         <C>                        <C>
Lawrence A. Sala ....................................       123,550(2)                 1.1%
Hugh A. Hair ........................................        41,225(3)                    *
Carl W. Gerst, Jr ...................................       315,550(4)                 2.9%
Gert R. Thygesen ....................................        57,000(5)                    *
Mark P. Burdick .....................................        13,350(6)                    *
Dale F. Eck .........................................        26,250(7)                    *
Herbert I. Corkin ...................................        22,500(8)                    *
Dr. David Wilemon ...................................        24,750(9)                    *
Matthew Robison .....................................        17,750(10)                   *
Brian P. Kelly ......................................        15,000(11)                   *
All Directors, Nominees and Executive Officers
   as a Group (10 persons) ..........................       647,025(12)                5.7%
</TABLE>
-------------
*     Indicates less than 1%

(1)   Except as otherwise indicated, as of September 17, 2000 all of such shares
      are owned with sole voting and investment power.

(2)   Includes  89,000 shares which Mr. Sala has the right to acquire  within 60
      days pursuant to  outstanding  stock  options,  9,750 shares of restricted
      stock, and 5,000 shares owned by Mr. Sala's spouse.

(3)   Includes 10,050 shares owned by Mr. Hair's spouse.

(4)   Includes  6,750 shares owned by Mr.  Gerst's spouse and 9,000 shares which
      Mr. Gerst has the right to acquire  within 60 days pursuant to outstanding
      stock options.

(5)   Includes  54,750 shares which Mr. Thygesen has the right to acquire within
      60 days  pursuant  to  outstanding  stock  options,  and  2,250  shares of
      restricted stock.

(6)   Includes  10,350 shares which Mr.  Burdick has the right to acquire within
      60 days  pursuant  to  outstanding  stock  options,  and  3,000  shares of
      restricted stock.

(7)   Includes  11,250  shares which Mr. Eck has the right to acquire  within 60
      days pursuant to outstanding stock options.

(8)   Includes 1,000 shares owned by The Entwistle Company,  of which Mr. Corkin
      is Chairman, Chief Executive Officer and a majority shareholder.  Does not
      include 250,700 shares owned by Global Securities,  Inc. ("Global"), as to
      which  Mr.  Corkin,  the  owner of 24% of the  capital  stock  of  Global,
      disclaims beneficial ownership.

(9)   Includes  24,750 shares which Dr.  Wilemon has the right to acquire within
      60 days pursuant to outstanding stock options.

(10)  Includes  17,750 shares which Mr.  Robison has the right to acquire within
      60 days pursuant to outstanding stock options.

(11)  Includes  15,000 shares which Mr. Kelly has the right to acquire within 60
      days pursuant to outstanding stock options.

(12)  Includes  231,850  shares which all directors and officers as a group have
      the right to acquire within 60 days pursuant to outstanding stock options.


                                       3
<PAGE>

                                    ITEM ONE

                              ELECTION OF DIRECTORS

      The  first  item  to be  acted  upon at the  Meeting  is the  election  of
directors  to hold office for terms of three  years and until  their  respective
successors  shall have been duly elected and  qualified.  Abraham Manber retired
from the Board of Directors effective June 30, 2000, and upon his retirement the
size of the Board was  reduced to eight  directors  and the size of the class of
directors  to be elected  at the  Meeting  was  reduced  to two  directors.  The
nominees receiving a plurality of the votes represented in person or by proxy at
the Meeting will be elected directors.

      The shares represented by all proxies in proper form which are received by
the Board prior to the  election of directors at the Meeting will be voted "FOR"
the nominees listed below, unless authority is withheld in the space provided on
the enclosed proxy. In the event any nominee  declines or is unable to serve, it
is intended  that the shares  represented  by such  proxies  will be voted for a
successor  nominee  designated  by  the  Board  (or  if no  other  person  is so
designated,   for  the  remaining  nominee).   All  nominees  have  indicated  a
willingness  to serve,  and the Board  knows of no  reason to  believe  that any
nominee will decline or be unable to serve if elected.  The eight members of the
Board  (including the nominees for  re-election at the Meeting,  if elected) are
expected to continue to serve on the Board until their respective terms expire.

Certain Information Concerning Nominees and Directors Continuing in Office

      Set  forth  below is  certain  information  concerning  each  nominee  for
director  to be elected at the Meeting  and each  director of the Company  whose
term of office  continues after the Meeting.  The information has been furnished
to the Company by such persons.

<TABLE>
<CAPTION>
Name, Age, Nature of                          Year First
Positions and Offices                           Became                      Principal Occupation,
Held with the Company                          Director              Experience and Other Directorships
----------------------                         --------         ---------------------------------------------
<S>                                              <C>            <C>
Nominees (for terms to expire at
   Annual Meeting in 2003):

Carl W. Gerst, Jr., 63 .......................   1968           Mr. Gerst  served as Executive Vice President
Chief Technical Officer, Treasurer,                              from the  Company's  founding  in 1967 until
Vice Chairman                                                    May  1995  when he  became  Chief  Technical
                                                                 Officer and Vice Chairman of the Board.  Mr.
                                                                 Gerst has also served as Treasurer since May
                                                                 1992.

Brian P. Kelly, 40 ...........................   1999           Mr. Kelly  is  a co-founder of Telergy, Inc.,
Nominee for Director                                             a  regional  integrated   telecommunications
                                                                 provider,  and has served as Chairman of the
                                                                 Board  of  Directors  and  Chief   Executive
                                                                 Officer of Telergy  since its  inception  in
                                                                 April 1995.

Directors Continuing in Office:

Terms Expiring at Annual Meeting in 2002:

Lawrence A. Sala, 37 .........................   1995           Mr. Sala  has been  President  of the Company
President, Chief Executive Officer                               since  May  1995  and has  served  as  Chief
and Director                                                     Executive Officer since September 1997.
</TABLE>


                                       4
<PAGE>

<TABLE>
<CAPTION>
Name, Age, Nature of                          Year First
Positions and Offices                           Became                      Principal Occupation,
Held with the Company                          Director              Experience and Other Directorships
----------------------                         --------         ---------------------------------------------
<S>                                              <C>            <C>
Dale F. Eck, 57 ..............................   1995           Mr. Eck  was Vice  President  of Finance  and
Director                                                         Treasurer  of  The  Entwistle   Company,   a
                                                                 defense  contractor,  from  1978  until  his
                                                                 retirement  in  February  1997.  Mr. Eck has
                                                                 also served as a Director  of The  Entwistle
                                                                 Company  since 1978 and  continues  to serve
                                                                 that company in such  capacity.  Mr. Eck has
                                                                 provided  consulting services to the Company
                                                                 since March 1997.

Dr. David Wilemon, 63 ........................   1997           Dr.   Wilemon   has  been  a   Professor   of
Director                                                         Marketing and  Innovation  Management at the
                                                                 Syracuse  University  School  of  Management
                                                                 since  1966.  He has also served as Director
                                                                 of the Synder Innovation  Management Program
                                                                 at  the   University   since   1980  and  as
                                                                 Co-Director  of  the   Entrepreneurship  and
                                                                 Emerging  Enterprises  Program there,  since
                                                                 1993.

Terms Expiring at Annual Meeting in 2001:

Hugh A. Hair, 65 .............................   1968           Mr. Hair,  Chairman  of the Board,  served as
Chairman of the Board                                            President  of the Company  from its founding
                                                                 in  1967   until   May  1995  and  as  Chief
                                                                 Executive  Officer from its  founding  until
                                                                 September 1997.

Matthew Robison, 39 ..........................   1999           Mr. Robison  has been Vice  President  Senior
Director                                                         Analyst-Technology  of Ferris,  Baker  Watts
                                                                 Incorporated since January 1999. Mr. Robison
                                                                 previously  served as a General  Partner and
                                                                 Analyst of Botti Brown Asset Management from
                                                                 January 1997 until January 1999, and as Vice
                                                                 President   and   Analyst   for   Montgomery
                                                                 Securities  from October 1994 until  January
                                                                 1997.

Herbert I. Corkin, 78 ........................   1989           Mr. Corkin  has been Chairman of the Board of
Director                                                         The Entwistle Company, a defense contractor,
                                                                 since  1959.  Mr.  Corkin also served as the
                                                                 President of The Entwistle Company from 1959
                                                                 through  December 1993 and has served as its
                                                                 Chief Executive Officer since December 1993.
</TABLE>


                                       5
<PAGE>

                  EXECUTIVE COMPENSATION AND OTHER INFORMATION

Summary of Cash and Certain Other Compensation

      The  following  table  sets  forth  certain  information  with  respect to
compensation,  received  in all  capacities  in which they served for the fiscal
years ended June 30, 1998,  June 30, 1999 and June 30, 2000,  for the  Company's
Chief  Executive  Officer  and each of the four  other most  highly  compensated
officers during the most recent fiscal year.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                 Long Term
                                                                                Compensation
                                                          Annual          -----------------------
                                                       Compensation        Restricted    Securities
                                                  ----------------------      Stock      Underlying      All Other
Name and                                            Salary       Bonus      Awards(6)    Options(7)   Compensation(8)
Principal Position                         Year       ($)         ($)          ($)           (#)            ($)
------------------                         ----   ----------   ---------  ------------   ----------   ---------------
<S>                                        <C>     <C>         <C>          <C>            <C>           <C>
Lawrence A. Sala ........................  2000    $270,192    $130,625     $242,125       75,000        $17,590
President and Chief                        1999     230,847      97,925            0       75,000         17,231
Executive Officer(1)                       1998     207,693      60,008            0       22,500         11,592

Hugh A. Hair ............................  2000     233,654      25,000            0       15,000         29,507
Chairman of the                            1999     225,000      25,000            0       15,000         21,996
Board(2)                                   1998     225,000      25,000            0            0         14,011

Carl W. Gerst, Jr. ......................  2000     233,654      25,000            0       30,000         32,131
Chief Technical Officer,                   1999     225,000      25,000            0       15,000         19,029
Vice Chairman and Treasurer(3)             1998     225,000      25,000            0            0         11,180

Gert R. Thygesen, Vice ..................  2000     139,846      32,568       55,875        9,000          3,496
President of Operations(4)                 1999     129,923      29,043            0       15,000          3,739
                                           1998     125,127      20,323            0        4,500          3,307

Mark P. Burdick .........................  2000     109,011      28,839       74,500       15,000          2,860
Vice President and General Manager,
Wireless Group(5)
</TABLE>
-------------
(1)   Mr. Sala was elected  President  of the Company in May 1995.  He was named
      Chief Executive Officer in September 1997.

(2)   Mr. Hair also served as the Company's  President until May 1995 and as the
      Company's Chief Executive Officer until September 1997.

(3)   Mr. Gerst served as the Company's  Executive Vice President until May 1995
      when he was  elected  to the  position  which  he  currently  holds,  Vice
      Chairman, Chief Technical Officer and Treasurer.

(4)   Mr.  Thygesen  served as one of the Company's  Program  Managers from 1990
      through 1992 and as the Company's  Operations  Manager from 1992 until May
      1995 when he was elected to the position  which he currently  holds,  Vice
      President of Operations.

(5)   Mr.  Burdick  served as Business  Unit Manager - Commercial  Products from
      1994 to 1999 when he was elected to the position which he currently holds,
      Vice President and General Manager, Wireless Group.

(6)   Indicates  dollar value of  restricted  stock awards based upon the market
      value of the Common Stock on the date of grant.  As of June 30, 2000,  Mr.
      Sala held 9,750  shares of  restricted  stock with a then  current  market
      value of $1,279,532;  Mr.  Thygesen held 2,250 shares of restricted  stock
      with a then current  market value of $295,277;  and Mr. Burdick held 3,000
      shares of restricted  stock with a then current  market value of $393,702.
      While the Company  does not  currently  pay cash  dividends  on its Common
      Stock, the named executive  officers are entitled to receive any dividends
      payable (in cash or otherwise) on their restricted stock holdings.


                                       6
<PAGE>

(7)   The table  reflects  the number of shares  which are subject to  incentive
      stock options  granted  pursuant to the Company's  Incentive  Stock Option
      Plan.

(8)   All Other  Compensation  consists of contributions to the Company's 401(k)
      Salary  Savings Plan and,  with respect to Messrs.  Hair,  Gerst and Sala,
      reimbursement  for premiums on life insurance  policies owned by executive
      officers.

Fiscal Year Option Grants

      The  following  table sets forth  certain  information  regarding  options
granted by the Company during the last fiscal year to the  individuals  named in
the above compensation table,  including  information as to potential realizable
value of such options at assumed  annual rates of stock price  appreciation  for
the ten-year terms of the options.

<TABLE>
<CAPTION>
                                              Percent
                                Number        of Total                               Potential Realizable Value
                                  Of          Options                                  at Assumed Annual Rates
                              Securities     Granted to                              of Stock Price Appreciation
                              Underlying     Employees     Exercise or                    for Option Term(1)
                               Options       in Fiscal     Base Price   Expiration   --------------------------
Name                           Granted          Year         ($/sh)        Date           5%($)        10%($)
----                          ----------     ---------     ----------   ----------        -----        ------
<S>                             <C>            <C>          <C>         <C>          <C>           <C>
Lawrence A. Sala ...........    75,000         19.5%        $24.833      11/02/09     $1,171,315    $2,968,341
Hugh A. Hair ...............    15,000          3.9%         24.833      11/02/09        234,263       593,668
Carl W. Gerst, Jr. .........    30,000          7.8%         24.833      11/02/09        468,526     1,187,337
Gert R. Thygesen ...........     9,000          2.3%         24.833      11/02/09        140,558       356,201
Mark P. Burdick ............    15,000          3.9%         24.833      11/02/09        234,263       593,668
</TABLE>

-------------
(1)   Amounts  represent  hypothetical  gains  that  could be  achieved  for the
      respective options if exercised at the end of the option term. These gains
      are based on arbitrarily  assumed rates of stock price  appreciation of 5%
      and 10%  compounded  annually  from the date the  respective  options were
      granted to their expiration date.

Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values

      The following table sets forth certain information for the named executive
officers with respect to (i) stock options  exercised in fiscal year 2000,  (ii)
the number of stock  options held at the end of fiscal year 2000,  and (iii) the
value of in-the-money stock options at the end of fiscal year 2000.

<TABLE>
<CAPTION>
                                                                                                           Value of
                                                           Number of Securities Underlying          Unexercised In-the-Money
                            Shares                     Unexercised Options at June 30, 2000(#)   Options at June 30, 2000(1)($)
                         Acquired on       Value       ---------------------------------------   -----------------------------
Name                     Exercise(#)    Realized($)        Exercisable        Unexercisable       Exercisable    Unexercisable
----                     -----------    -----------        -----------        -------------       -----------    -------------
<S>                         <C>         <C>                   <C>                <C>               <C>            <C>
Lawrence A. Sala ........   45,000      $2,039,400            76,500             171,000           $9,533,635     $19,609,049
Hugh A. Hair ............        0               0             3,000              27,000              359,327       3,033,319
Carl W. Gerst, Jr. ......   27,000         823,499             3,000              42,000              359,327       4,629,329
Gert R. Thygesen ........        0               0            52,050              25,200            6,638,513       2,903,494
Mark P. Burdick .........   12,000         176,000             9,600              25,650            1,198,146       2,884,165
</TABLE>
-------------
(1)   Amount represents the difference  between the aggregate  exercise price of
      the options and a $131.234 market price of the underlying  Common Stock on
      June 30, 2000.

Pension Plan

      The Company maintains a  non-contributory  Pension Plan for the benefit of
all employees  over the age of 23 who have completed one year of service and who
are not  covered by any other  retirement  plan.  The  Company  pays all amounts
required to provide retirement income benefits.  The Pension Plan provides fixed
benefits  to be  paid  upon  retirement  at a  specific  age.  Pension  expense,
including  amortization  of prior  service cost over 30 years,  was $158,523 for
fiscal 2000.


                                       7
<PAGE>

      The table below  illustrates the estimated  aggregate  annual benefit that
would be payable to executive  officers of the Company who are at least 65 years
of age at retirement, based on the formula in effect after June 30, 1992 and the
Employee  Retirement Income Security Act of 1974, as amended ("ERISA") limits on
compensation and benefits after 15, 20, 25, 30 and 35 credited years of service;
for  illustration  purposes,  the table  assumes all years of service  under the
current Pension Plan formula.

                               Pension Plan Table

<TABLE>
<CAPTION>
    Final
Average Annual                                     Estimated Annual Pension Payable
 Compensation                                     Based on Years of Service Indicated
--------------        ---------------------------------------------------------------------------------------------
                      15 Years             20 Years             25 Years              30 Years             35 Years
                      --------             --------             --------              --------             --------
<S>                    <C>                 <C>                  <C>                   <C>                  <C>
   $100,000            $11,250             $15,000              $18,750               $22,600              $26,250
    125,000             14,063              18,750               23,438                28,125               32,813
    150,000             16,875              22,500               28,125                33,750               39,375
    160,000             18,000              24,000               30,000                36,000               42,000
    175,000             18,000              24,000               30,000                36,000               42,000
    200,000             18,000              24,000               30,000                36,000               42,000
    225,000             18,000              24,000               30,000                36,000               42,000
    250,000             18,000              24,000               30,000                36,000               42,000
    275,000             18,000              24,000               30,000                36,000               42,000
</TABLE>

      Under the terms of the Pension Plan,  each member who is at least 65 years
of age at his retirement is entitled to a Normal Retirement  Benefit (as defined
under the Pension Plan). The  compensation  used in determining the Pension Plan
benefit for executive officers is based upon their annual salary as shown on the
Summary Compensation Table above. The Normal Retirement Benefit is the aggregate
of:

      A.   0.60% of average of highest five consecutive years  compensation from
           date of employment to June 30, 1992 multiplied by Benefit Service (as
           defined under the Pension Plan) to June 30, 1992; plus

      B.   0.75% of compensation for each year of Benefit Service thereafter;

but not less than the accrued benefit under the prior plan at June 30, 1992.

      Employees  who have  attained at least  twelve years of service and are at
least 55 years of age can retire and receive a proportionately reduced benefit.

      Under ERISA, the maximum annual benefit payable at age 65 is $125,000. The
maximum  compensation that could be considered for all  participants,  including
Messrs.  Hair, Gerst,  Sala,  Thygesen and Burdick,  is $160,000 for 2000. These
benefit and  compensation  limits are indexed to increases in the Consumer Price
Index.

      The  credited  years of service as of June 30, 2000 under the Pension Plan
for each of Messrs.  Hair and Gerst are 27, and for Messrs.  Sala,  Thygesen and
Burdick are 15, 19 and 18, respectively.

Management Incentive Plan

      The Company has a Management  Incentive  Plan  ("Incentive  Plan") that is
designed  to provide a  meaningful  annual  financial  incentive  to  management
employees to reward them for their  contribution  toward the  Company's  growth,
profitability  and business  development.  Eligibility in the plan is limited to
key members of management who,  because of their  position,  have the ability to
substantially  impact the  profitability  and  overall  success of the  Company.
Individual  participants  in the Incentive Plan are selected by the President on
an annual basis, subject to approval of the Board of Directors.


                                       8
<PAGE>

      Under  the  Incentive  Plan,   each   participant  has  a  "target"  bonus
opportunity  in an amount  equal to a  specified  percentage  of his or her base
salary.  Awards under the Incentive Plan are based on corporate,  functional and
individual   performance  measured  against   pre-established   targeted  goals.
Corporate  performance  goals, which are set by the President and are subject to
Board  approval,  are based on factors  including  but not limited to  earnings,
revenue,   appreciation  in  stock  value  and  order  targets.  Functional  and
individual  performance  goals  are  based  on  each  participant's   functional
responsibilities, and are jointly established by the Company and the participant
prior to the beginning of the fiscal year.  Fulfillment of corporate performance
goals must carry a weighting of at least 50% of the total incentive  opportunity
for each  employee,  and  participants  who are  officers of the Company may not
receive  any  bonus  payment  unless  certain  corporate  performance  goals are
attained.

      Bonus payments under the Incentive Plan are made on or about September 1st
following  the end of the  fiscal  year for  which the  bonus is  earned.  Bonus
amounts reflected in the Summary  Compensation Table on page 6 for Messrs. Sala,
Thygesen and Burdick represent amounts awarded pursuant to the Incentive Plan.

Compensation of Directors

      The Company  currently  pays each  director  who is not an employee of the
Company $10,000 per year plus $1,000 for each meeting  attended,  and reimburses
each such director for the reasonable expenses incurred in attending meetings of
the Board of  Directors.  In addition,  non-employee  directors  are eligible to
receive stock options pursuant to the Company's Non Statutory Stock Option Plan.

Certain Agreements with Directors and Executive Officers

      The Company has an employment agreement, dated July 1, 1997, with Lawrence
A. Sala,  President and (as of September  1997) Chief  Executive  Officer of the
Company  providing for Mr.  Sala's  employment as President of the Company until
November 30, 2001 or such  earlier  date as may result  pursuant to the terms of
the  agreement.  The agreement  provides for a base annual salary of $180,000 or
such  greater  amount as the  Board of  Directors  may  determine,  plus  annual
incentive  bonuses and  participation in certain  insurance plans. The agreement
terminates  automatically  in the event of Mr.  Sala's death and the Company may
terminate the agreement for specified cause as defined in the agreement.

      The  Company's  arrangements  with Mr. Sala  provide that in the event Mr.
Sala's  employment  with the  Company is  terminated  other than for cause,  the
Company will be obligated to pay severance to Mr. Sala in an amount equal to the
greater of (i) two years' base salary plus  payments in lieu of incentive  bonus
payments in the aggregate  amount of $100,000 or (ii) Mr. Sala's base salary for
the balance of the term of the agreement.  In addition,  the Company must defray
certain  costs  associated  with  obtaining  new  employment  and  relocation in
connection with such termination.

      In the event that Mr. Sala's  employment  continues for the entire term of
the  agreement  and the  Company  and Mr.  Sala are  unable to  negotiate  a new
employment agreement, the Company will be obligated to pay severance to Mr. Sala
in an amount equal to two years' base salary at such date plus  payments in lieu
of incentive bonus payments in the aggregate amount of $100,000.

      The Company also has an employment agreement,  dated October 6, 1997, with
Hugh A. Hair, which provided for his continuing  employment by the Company until
June 30, 2000.  Pursuant to the  agreement,  Mr. Hair is to continue to serve as
Chairman of the Company's  Board of  Directors,  subject to  re-election  by the
Company's  Shareholders and the Board of Directors,  and will provide counsel to
the Company's President and Chief Executive Officer.  The agreement requires the
Company to pay Mr. Hair deferred  compensation equal to $65,000 per fiscal year,
beginning July 1, 2000 and continuing through June 30, 2015.


                                       9
<PAGE>

      The Company has a  consulting  arrangement  with Dale F. Eck,  pursuant to
which Mr. Eck has agreed to provide financial and management consulting services
to the  Company  for a period of five years from  March 1, 1997.  The  agreement
provides  that Mr. Eck shall  devote up to two days per month to the Company and
shall  receive a monthly  fee of  $1,666.66  plus  reimbursement  of  reasonable
business  expenses  incurred in activities  undertaken on behalf of the Company.
The agreement is terminable by either party upon 12 months' prior notice.

Board Compensation Committee Report on Executive Compensation

      The  Compensation  Committee  ("Committee")  recommends  to the  Board  of
Directors the compensation to be paid to the Company's  executive officers on an
annual basis. The Committee has implemented an executive compensation philosophy
that seeks to relate executive compensation to corporate performance, individual
performance  and  creation of  shareholder  value.  Historically,  this has been
achieved through  compensation  programs which focus on both short and long-term
results.

      In accordance with the Committee's executive compensation philosophy,  the
major components of executive  compensation  have been base salary,  performance
based  bonuses stock option grants and  restricted  stock awards.  Option grants
have been made pursuant to the Company's  existing  Incentive Stock Option Plan,
and will be made in the future  pursuant to the Incentive  Stock Option Plan for
Key  Employees  if this plan is approved  by the  Shareholders  at the  Meeting.
Beginning in fiscal year 1998,  executive officers were also eligible to receive
bonuses pursuant to the Company's  performance based Management  Incentive Plan.
Restricted stock awards are made pursuant to the Company's Guidelines for Grants
of Restricted Stock Awards.

      Salaries and incentive bonuses for executive officers are based on current
individual and organizational performance,  affordability and competitive market
trends. For purposes of informing the Committee of competitive trends within the
electronics  industry,  the  compensation  data  from the  American  Electronics
Association  Compensation  Survey  is  made  available  to  the  Committee.  The
Committee  also has access to  compensation  data from other  comparable  public
companies in the wireless and satellite communications markets. The salary trend
data used  represents  companies  whose  size and  performance  with  respect to
revenue, earnings per share and stock price are similar to those of the Company.
The Company's  executive  officer salary ranges are positioned  consistent  with
industry averages.

      Section 162(m)  ("Section  162") of the Internal  Revenue Code of 1986, as
amended  (the  "Code"),  generally  limits  federal  income tax  deductions  for
compensation  paid after 1993 to the chief executive  officer and the four other
most  highly  compensated  officers  of a company  to $1 million  per year,  but
contains an exception for performance-based  compensation that satisfies certain
conditions.  The Company has not adopted an absolute  policy  regarding  Section
162.  Nevertheless,  the Company is studying the  implications of Section 162 on
its compensation  programs. In making compensation  decisions,  the Company will
consider the net cost of  compensation  to it and whether it is practicable  and
consistent with other compensation objectives to qualify the Company's incentive
compensation  under  the  applicable  exemption  of  Section  162.  The  Company
recognizes  that  deductibility  of  compensation  payments  must be one among a
number  of  factors  used  in  ascertaining   appropriate  levels  or  modes  of
compensation,  and that the Company will make its  compensation  decisions based
upon an overall determination of what it believes to be in the best interests of
its Shareholders.

      The members of the Compensation Committee are:

                                Dale F. Eck            Dr. David Wilemon
                                Brian P. Kelly


                                       10
<PAGE>

Performance Graph

      The following  performance graph compares the total shareholder  return of
the Company's  Common Stock to The Nasdaq Stock Market (US) Index and the Nasdaq
Electronics  Components  Index.  The graph assumes that $100 was invested in the
Company's  Common  Stock and each Index on June 30, 1995 and that all  dividends
were reinvested.

                  COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
                          AMONG ANAREN MICROWAVE, INC.,
                      THE NASDAQ STOCK MARKET (U.S.) INDEX
                   AND THE NASDAQ ELECTRONICS COMPONENTS INDEX

[The  following  table was depicted as a linear  graph in the printed  material,
plotted from the numbers set forth below.]

<TABLE>
<CAPTION>
                                                                   Cumulative Total Return
                                                -------------------------------------------------------------------
                                                  6/95        6/96        6/97         6/98        6/99        6/00
<S>                                             <C>         <C>         <C>          <C>         <C>       <C>
ANAREN MICROWAVE, INC.                          100.00      108.00      212.00       240.00      334.00    3,149.46
NASDAQ STOCK MARKET (U.S.)                      100.00      128.39      156.15       205.58      296.02      437.30
NASDAQ ELECTRONIC COMPONENTS                    100.00      105.72      173.69       172.02      305.64      758.74
</TABLE>
-------------

*     $100 INVESTED ON 6/30/95 IN STOCK OR INDEX -
      INCLUDING REINVESTMENT OF DIVIDENDS.
      FISCAL YEAR ENDING JUNE 30.

      Notwithstanding  anything  set  forth  in any of  the  Company's  previous
filings under the Securities Act of 1933 or the Securities  Exchange Act of 1934
which might incorporate future filings, including this Proxy Statement, in whole
or in part, the preceding  performance  graph and the report of the Compensation
Committee shall not be deemed incorporated by reference into any such filings.


                                       11
<PAGE>

                                    ITEM TWO

                 PROPOSAL TO APPROVE REPLACEMENT INCENTIVE STOCK
                          OPTION PLAN FOR KEY EMPLOYEES

      The Board of Directors has approved the Anaren Microwave,  Inc.  Incentive
Stock Option Plan for Key Employees  ("ISOP") to replace the Company's  existing
Incentive  Stock Option  Plan,  subject to approval by the  Shareholders  at the
Meeting.  Like the existing Incentive Stock Option Plan, the purpose of the ISOP
is to enable the Company to attract,  retain and reward talented  executives and
other key employees by offering equity-based compensation opportunities,  and to
more closely  align the interests of these  employees  with the interests of the
Company's  Shareholders.  If the ISOP is  approved  by the  Shareholders  at the
Meeting,  no new grants will be made  pursuant to the existing  Incentive  Stock
Option Plan.  Awards  previously  made under the existing  plan will continue in
effect in accordance with their respective terms.

      The  following  summary  of the  ISOP  is  qualified  in its  entirety  by
reference  to the  specific  provisions  of the ISOP,  the full text of which is
available  upon written  request to:  David M.  Ferrara,  Secretary  and General
Counsel,  Anaren Microwave,  Inc., 6635 Kirkville Road, East Syracuse,  New York
13057.

General Features of the ISOP

      The  ISOP is an  executive  compensation  plan  for key  employees  of the
Company and its subsidiaries.  Pursuant to the ISOP,  eligible  employees may be
granted  options to purchase  Common Stock.  Options  granted under the ISOP are
intended to qualify as "incentive  stock  options," as defined under Section 422
of the Internal  Revenue Code.  The ISOP is to be  administered  by the Board of
Directors,  acting as a full board or through its  Compensation  Committee.  The
ISOP gives the Board the authority to designate from all executive  officers and
key employees of the Company and its subsidiaries  those employees or classes of
employees  who are eligible to  participate  in the ISOP,  and to determine  the
numbers  and  terms  of the  stock  options  to be  granted  to  any  particular
individual who is an eligible participant.  In designating eligible participants
and in  determining  the number and terms of the stock  options to be granted to
eligible individuals, the Board may take into account the nature of the services
rendered by such individuals,  their present and potential  contributions to the
Company's success and other relevant factors.

      The option price for stock options  granted under the ISOP may not be less
than the fair market value of the shares  subject to the options on the date the
options are granted (or 110% of such value in the case of options granted to any
individual  who is a 10%  shareholder  of the  Company).  Any  shares  which are
subject to purchase  under options which  terminate or expire may become subject
to subsequent options which may be granted.

      Under  the  ISOP,  if  the  aggregate  fair  market  value  of  the  stock
(determined as of the date the option pertaining to such stock was granted) with
respect to which  options  are  exercisable  for the first  time by an  employee
during any  calendar  year exceeds  $100,000,  then the options in excess of the
limit  shall,  to  the  extent  provided  in the  grant  agreement,  (a)  become
exercisable  on the earliest  date on which such limit will not be exceeded,  or
(b) be treated as  non-qualified  stock options.  Options granted under the ISOP
may have a term of up to ten years (five years in the case of options granted to
a 10%  shareholder  of the  Company).  An  option is not  exercisable  until the
expiration  of the six  months  from the  date of its  grant.  Unless  otherwise
provided  in any  option  which is  granted,  following  the  expiration  of the
applicable  six  month  holding  period,  up to one fifth  (ignoring  fractional
shares) of the total number of shares subject to an option become exercisable in
cumulative  fashion on the first through fifth  anniversary  dates of the grant.
Options granted to a participant  remain  exercisable  notwithstanding  the fact
that  there  remain  previously   granted  incentive  stock  options  which  the
participant has not exercised.

      Options granted under the ISOP are non-transferable,  and the recipient of
an option has no rights as a shareholder with respect to the shares to which his
or her option  relates until the option is exercised and a stock  certificate is
issued  to him or her for such  shares.  No  option  granted  under  the ISOP is
exercisable  by an  employee


                                       12
<PAGE>

more than 90 days after the  termination  of the employee's  employment,  if the
termination was for any reason other than death, disability,  or retirement.  If
an employee's termination of employment is due to (i) the death of the employee,
an option may be exercised by the employee's estate no more than 12 months after
such employee's death, (ii) an employee's retirement, an option may be exercised
no more than 12 months after such employee's retirement, and (iii) an employee's
disability, an option may be exercised no more than 12 months following the date
of  termination as a result of such  disability.  The ISOP provides that options
may be exercised by any lawful method acceptable to the Board in its discretion,
including  without  limitation  payment  of the  exercise  price  in  cash or by
certified check, and/or by tender of shares of Common Stock having a fair market
value equal to the option price.

      Under the ISOP,  1,025,100  shares of Common Stock have been  reserved for
issuance.  This includes  275,100 shares reserved but unused under the Company's
existing  Incentive  Stock  Option  Plan.  The  ISOP  provides  for  appropriate
adjustment of the number of shares available thereunder and of shares subject to
outstanding  options in the event of any changes in the outstanding Common Stock
by reason of merger,  stock split or similar events,  or in the event of payment
of dividends in Common  Stock.  The term of the ISOP is for ten years,  and will
expire on  November  2, 2010 if not  earlier  terminated  by the Board.  Options
authorized under the ISOP must be granted, if at all, during this ten-year term.
Although the Board may  terminate,  modify or amend the ISOP, the Board may not,
without the approval of the Company's Shareholders,  increase the maximum number
of shares of Common Stock which may be issued under the ISOP, except pursuant to
a stock  split,  stock  dividend or similar  transaction.  The number of options
which may be granted to specific  employees  in the future under the ISOP cannot
be determined at this time.

General Federal Income Tax Consequences

      An optionee  will not  recognize  any  taxable  income at the time a stock
option is granted  under the ISOP,  and the  Company  will not be  entitled to a
federal  income tax  deduction  at that time.  Upon  exercise of the option,  no
ordinary  income will be recognized  by the holder of the option.  The excess of
the fair market value of the shares at the time of exercise  over the  aggregate
option price will be an adjustment to  alternative  minimum  taxable  income for
purposes of the federal  "alternative  minimum tax" at the date of exercise.  If
the  optionee  holds the shares for the  greater of two years after the date the
option  was  granted  or one year  after the  acquisition  of such  shares,  the
difference  between the  aggregate  option  price and the amount  realized  upon
disposition  of the shares will  constitute a long term capital gain or loss, as
the case may be, and the Company  will not be  entitled to a federal  income tax
deduction.  If  the  shares  are  disposed  of  in a  sale,  exchange  or  other
"disqualifying  disposition"  within two years after the date of grant or within
one year after the date of exercise,  the optionee will realize taxable ordinary
income in an amount  equal to the excess of the fair market  value of the shares
purchased at the time of exercise over the aggregate  option price (the "bargain
purchase  element"),  and the Company  will be entitled to a federal  income tax
deduction equal to such amount.  The amount of any gain in excess of the bargain
purchase element realized upon a "disqualifying  disposition" will be recognized
as capital  gain to the holder.  The  Company  will not be entitled to a federal
income tax deduction for the capital gain amount.

      The  foregoing  discussion  is only a summary  of  certain  aspects of the
highly complex federal income tax rules  applicable to participants in the ISOP,
and does not address other taxes which may affect an  individual,  such as state
and local income  taxes,  federal and state estate taxes,  inheritance  and gift
taxes and/or foreign taxes.

Vote Required for Approval

      The  affirmative  vote  of a  majority  of  the  shares  of  Common  Stock
represented at the Meeting in person or by proxy is required for approval of the
ISOP.

      The  Board  of  Directors  recommends  that  Shareholders  vote  FOR  this
proposal.  Proxies solicited by the Board of Directors will be voted in favor of
the proposal unless Shareholders specify otherwise.


                                       13
<PAGE>

                                   ITEM THREE

          PROPOSAL TO APPROVE COMPANY-WIDE INCENTIVE STOCK OPTION PLAN

      The Board of  Directors  has  approved the Anaren  Microwave,  Inc.  Stock
Option Plan (the "Company-Wide  Plan"),  subject to approval by the Shareholders
at the  Meeting.  The  Company-Wide  Plan  is a  broad-based  plan  designed  to
encourage  employees to focus on the Company's long term  objectives,  to enable
the  Company  to  attract,  retain and reward  talented  employees,  and to link
employee and  shareholder  interests by enabling  employees to acquire an equity
interest in the Company.

      The  following  summary  of the  Company-Wide  Plan  is  qualified  in its
entirety by reference to the specific  provisions of the Company-Wide  Plan, the
full text of which is  available  upon  written  request to:  David M.  Ferrara,
Secretary and General Counsel, Anaren Microwave, Inc., 6635 Kirkville Road, East
Syracuse, New York 13057.

General Features of the Company-Wide Plan

      The Company-Wide  Plan is an incentive  compensation plan for employees of
the Company and its subsidiaries.  Pursuant to the Company-Wide  Plan,  eligible
employees may be granted options to purchase Common Stock. Options granted under
the  Company-Wide  Plan are intended to qualify as "incentive stock options," as
defined under Section 422 of the Internal Revenue Code. The Company-Wide Plan is
to be administered by the Board of Directors,  acting as a full board or through
its Compensation Committee.  The Company-Wide Plan gives the Board the authority
to  designate  from all  employees  of the  Company and its  subsidiaries  those
employees  or  classes of  employees  who are  eligible  to  participate  in the
Company-Wide  Plan,  and to determine the numbers and terms of the stock options
to be granted to any particular  individual who is an eligible  participant.  In
designating eligible participants and in determining the number and terms of the
stock  options to be granted to  eligible  individuals,  the Board may take into
account the nature of the services rendered by such  individuals,  their present
and potential contributions to the Company's success and other relevant factors.
No  employee  who has been  granted  options  under the  Company's  ISOP for key
employees in a given fiscal year is eligible to receive a grant of options under
the Company-Wide Plan during that same fiscal year.

      The option price for stock options granted under the Company-Wide Plan may
not be less than the fair market  value of the shares  subject to the options on
the date the  options  are granted (or 110% of such value in the case of options
granted to any individual who is a 10%  shareholder of the Company).  Any shares
which are subject to purchase under options which terminate or expire may become
subject to subsequent options which may be granted.

      Under the Company-Wide  Plan, the aggregate fair market value of the stock
(determined as of the date the option pertaining to such stock was granted) with
respect to which  options  are  exercisable  for the first  time by an  employee
during any calendar  year may not exceed  $100,000.  Options  granted  under the
Company-Wide  Plan  may  have a term  of up to  five  years.  An  option  is not
exercisable until the expiration of 36 months from the date of its grant. Unless
otherwise  provided  in any option  which is  granted,  each  option will become
exercisable  on  the  third  anniversary  of the  grant.  Options  granted  to a
participant  remain  exercisable  notwithstanding  the fact  that  there  remain
previously  granted  incentive  stock  options  which  the  participant  has not
exercised.

      Options granted under the Company-Wide Plan are non-transferable,  and the
recipient of an option has no rights as a shareholder with respect to the shares
to which his or her option  relates  until the option is  exercised  and a stock
certificate is issued to him or her for such shares. No option granted under the
Company-Wide  Plan is  exercisable  by an  employee  more than 90 days after the
termination of the employee's employment,  if the termination was for any reason
other than death,  disability,  or retirement.  If an employee's  termination of
employment is due to (i) the death of the  employee,  an option may be exercised
by the  employee's  estate no more


                                       14
<PAGE>

than 12 months after such employee's  death, (ii) an employee's  retirement,  an
option may be exercised no more than 12 months after such employee's retirement,
and (iii) an employee's  disability,  an option may be exercised no more than 12
months  following the date of  termination as a result of such  disability.  The
Company-Wide  Plan  provides  that options may be exercised by any lawful method
acceptable to the Board in its discretion,  including without limitation payment
of the exercise price in cash or by certified check,  and/or by tender of shares
of Common Stock having a fair market value equal to the option price.

      Under the  Company-Wide  Plan,  500,000  shares of Common  Stock have been
reserved for issuance. The Company-Wide Plan provides for appropriate adjustment
of  the  number  of  shares  available  thereunder  and  of  shares  subject  to
outstanding  options in the event of any changes in the outstanding Common Stock
by reason of merger,  stock split or similar events,  or in the event of payment
of  dividends  in Common  Stock.  The term of the  Company-Wide  Plan is for ten
years,  and will  expire on January  1, 2011 if not  earlier  terminated  by the
Board.  Options  authorized under the Company-Wide  Plan must be granted,  if at
all,  during this ten-year  term.  Although the Board may  terminate,  modify or
amend the  Company-Wide  Plan,  the Board may not,  without the  approval of the
Company's  Shareholders,  increase the maximum  number of shares of Common Stock
which may be issued  under the  Company-Wide  Plan,  except  pursuant to a stock
split, stock dividend or similar transaction. The number of options which may be
granted to specific  employees in the future under the Company-Wide  Plan cannot
be determined at this time.

General Federal Income Tax Consequences

      An optionee  will not  recognize  any  taxable  income at the time a stock
option is granted  under the  Company-Wide  Plan,  and the  Company  will not be
entitled to a federal  income tax  deduction at that time.  Upon exercise of the
option,  no ordinary income will be recognized by the holder of the option.  The
excess of the fair market  value of the shares at the time of exercise  over the
aggregate  option price will be an adjustment  to  alternative  minimum  taxable
income for  purposes of the  federal  "alternative  minimum  tax" at the date of
exercise.  If the  optionee  holds the shares for the greater of two years after
the date the  option  was  granted  or one year  after the  acquisition  of such
shares,  the  difference  between  the  aggregate  option  price and the  amount
realized upon disposition of the shares will constitute a long term capital gain
or loss,  as the case may be, and the Company  will not be entitled to a federal
income tax deduction. If the shares are disposed of in a sale, exchange or other
"disqualifying  disposition"  within two years after the date of grant or within
one year after the date of exercise,  the optionee will realize taxable ordinary
income in an amount  equal to the excess of the fair market  value of the shares
purchased at the time of exercise over the aggregate  option price (the "bargain
purchase  element"),  and the Company  will be entitled to a federal  income tax
deduction equal to such amount.  The amount of any gain in excess of the bargain
purchase element realized upon a "disqualifying  disposition" will be recognized
as capital  gain to the holder.  The  Company  will not be entitled to a federal
income tax deduction for the capital gain amount.

      The  foregoing  discussion  is only a summary  of  certain  aspects of the
highly  complex  federal  income tax rules  applicable  to  participants  in the
Company-Wide  Plan,  and does not  address  other  taxes  which  may  affect  an
individual,  such as state and local  income  taxes,  federal  and state  estate
taxes, inheritance and gift taxes and/or foreign taxes.

Vote Required for Approval

      The  affirmative  vote  of a  majority  of  the  shares  of  Common  Stock
represented at the Meeting in person or by proxy is required for approval of the
Company-Wide Plan.

      The  Board  of  Directors  recommends  that  Shareholders  vote  FOR  this
proposal.  Proxies solicited by the Board of Directors will be voted in favor of
the proposal unless Shareholders specify otherwise.


                                       15
<PAGE>

                                    ITEM FOUR

              PROPOSAL TO APPROVE INCREASE IN AUTHORIZED SHARES OF
                           COMMON STOCK OF THE COMPANY

      The Board of Directors is recommending  that the Shareholders  take action
at the  Meeting  to  approve  an  amendment  to  the  Company's  Certificate  of
Incorporation to increase the total number of authorized shares of Common Stock.
As a result  of the  Company's  public  offering  of  Common  Stock in the third
quarter of fiscal 2000 and the stock  dividend  effectuated  as of June 9, 2000,
the Company now has 11,879,020  shares of Common Stock issued and outstanding or
subject to options granted leaving  13,120,980  shares available for issuance to
meet corporate needs.  Accordingly,  the Board of Directors has recommended that
action be taken to increase the number of authorized shares of Common Stock from
25,000,000 to 200,000,000.

      The Board of  Directors  believes  that the  authorization  of  additional
shares of Common Stock is desirable and would provide future flexibility for the
Company. The increase in authorized shares would provide authorized Common Stock
for issuance  from time to time as may be necessary  in  connection  with future
financings,  investment  opportunities,  acquisitions,  the declaration of stock
dividends or stock splits, other distributions, or for other corporate purposes.
Although the Company has no present  plans,  understandings  or  agreements  for
issuing the additional  shares, it is necessary to have  authorization for these
shares in order to enable the  Company,  as the need may arise,  to take  prompt
advantage of market  conditions and the availability of favorable  opportunities
without the delay and expense incident to the holding of a special shareholders'
meeting.

      Under New York law,  Shareholders  are not entitled to dissenters'  rights
with  respect  to  the  proposed  amendment  to  the  Company's  Certificate  of
Incorporation. Holders of Common Stock have no preemptive rights with respect to
any shares  which may be issued in the future,  and the  issuance of  additional
shares of Common Stock may,  therefore,  dilute the equity ownership position of
current  Shareholders.  In  addition,  although  the  increase  in the number of
authorized  shares is not intended for  anti-takeover  purposes,  the additional
authorized  shares  may be  issued  by the Board of  Directors  without  further
shareholder  approval,  and  could (if  consistent  with the  Board's  fiduciary
responsibilities)  be utilized to deter  future  attempts to gain control of the
Company.

      The  affirmative  vote of the holders of the  majority of the  outstanding
shares of Common Stock is required for the approval of the proposed amendment to
the Company's Certificate of Incorporation.

      The  Board  of  Directors  recommends  that  Shareholders  vote  FOR  this
proposal.  Proxies solicited by the Board of Directors will be voted in favor of
the proposal unless Shareholders specify otherwise.


                                       16
<PAGE>

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  the
Company's  directors,  executive  officers  and  holders of more than 10% of the
Company's Common Stock (collectively,  "Reporting Persons") to file with the SEC
initial  reports of ownership  and reports of changes in ownership of the Common
Stock.  Such  persons  are  required  by  regulations  of the SEC to furnish the
Company  with copies of all such  filings.  Based on its review of the copies of
such filings  received by it and written  representations  of Reporting  Persons
with respect to the fiscal year ended June 30, 2000,  the Company  believes that
all Reporting Persons complied with all Section 16(a) filing requirements in the
fiscal year ended June 30, 2000.

           RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

      During  the  fiscal  year ended June 30,  2000,  KPMG LLP,  the  Company's
independent  accountant,  was  retained by the Board of Directors to perform the
annual examination of the consolidated  financial  statements of the Company and
its  subsidiaries.  The Board also  retained  KPMG LLP to advise the Company and
perform appropriate financial due diligence in connection with acquisitions made
and  considered by the Company and to provide  assistance in the  preparation of
federal income and state franchise tax returns.

      KPMG LLP was also selected by management to audit the Company's  books and
records for the current fiscal year. KPMG LLP has been the Company's independent
accountant for over 25 years. It is anticipated  that a  representative  of KPMG
LLP will be  present  at the Annual  Meeting  of  Shareholders  and will have an
opportunity to make a statement and to answer questions of Shareholders.

                          BOARD MEETINGS AND COMMITTEES

      During the  Company's  last fiscal  year,  the Board of  Directors  of the
Company held five meetings.  No current director  attended fewer than 75% of the
aggregate  number of  meetings  of the Board and of any  Committees  on which he
served during such period.

      The Company's  Compensation  Committee  consists of Dale F. Eck,  Brian P.
Kelly and Dr. David Wilemon.  The function of the  Compensation  Committee is to
recommend to the Board of Directors competitive  compensation plans for officers
and key employees.  During the fiscal year ended June 30, 2000, the Compensation
Committee held two meetings.

      The Company's Audit Committee  consists of Herbert I. Corkin,  Dale F. Eck
and Brian P.  Kelly.  The  function  of the  Audit  Committee  is to review  the
Company's  annual audit with the Company's  independent  accountant.  During the
fiscal year ended June 30, 2000, the Audit Committee held one meeting.

      The  Company's  Nominating  Committee  consists  of  Lawrence  A. Sala and
Matthew Robison.  David M. Ferrara, the Company's Secretary and General Counsel,
serves as an ex officio member of the Committee.  The function of the Nominating
Committee  is to make  recommendations  to the  Board for  nominees  to serve as
directors.  The Nominating Committee will consider written  recommendations from
Shareholders  for nominees to serve on the Board that are sent to the  Secretary
of the Company at the Company's  main office.  During the fiscal year ended June
30, 2000, the Nominating Committee held two meetings.


                                       17
<PAGE>

                                  MISCELLANEOUS

Other Matters

      As of the date of this Proxy Statement, management has no knowledge of any
business  which will be presented  for  consideration  at the Meeting other than
that described herein. Should any other matter properly come before the Meeting,
it is the intention of the persons named in the accompanying  proxy to vote such
proxy in accordance with their best judgment.

Solicitation of Proxies

      The  entire  expense  of  preparing,  assembling  and  mailing  the  Proxy
Statement,  form of proxy and other material used in the solicitation of proxies
will be paid by the Company. In addition to the solicitation of proxies by mail,
arrangements  may be made with brokerage houses and other  custodians,  nominees
and fiduciaries to send proxy material to their principals, and the Company will
reimburse  them for  expenses  in so doing.  To the extent  necessary  to ensure
sufficient  representation,  officers  and regular  employees of the Company may
request,  without  additional  compensation  therefor,  the  return  of  proxies
personally  or by  telephone  or  telegram.  The  extent  to which  this will be
necessary   depends  entirely  on  how  promptly   proxies  are  received,   and
Shareholders are urged to send their proxies without delay.

                              SHAREHOLDER PROPOSALS

      In order for a shareholder  proposal to be considered for inclusion in the
Company's Proxy Statement  relating to the 2001 Annual Meeting of  Shareholders,
such proposal must be received by the Company by May 21, 2001.

                                                 David M. Ferrara
                                                 Secretary and General Counsel

Date: September 18, 2000
      Syracuse, New York


                                       18

<PAGE>

                                                                      APPENDIX A

                             ANAREN MICROWAVE, INC.
                           INCENTIVE STOCK OPTION PLAN
                                FOR KEY EMPLOYEES

      1. Purpose of the Plan. This Plan shall be known as the Anaren  Microwave,
Inc.  Incentive Stock Option Plan for Key Employees.  The purpose of the Plan is
to attract and retain the best available  personnel for positions of substantial
responsibility  and to provide  incentives  to such  personnel  to  promote  the
success of the business of Anaren Microwave,  Inc. and its subsidiaries.  Except
as provided in Section 4 below,  this Plan  amends,  restates  and  replaces the
Anaren Microwave, Inc. Incentive Stock Option Plan adopted in 1995.

      All options  granted under this Plan are intended to qualify as "incentive
stock options"  pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended from time to time.

      2. Definitions. As used herein, the following definitions shall apply:

         "Board" means the Board of Directors of the Corporation.

         "Common Stock" means the Common Stock, $.01 par value per share, of the
Corporation.  Except as  otherwise  provided  herein,  all Common  Stock  issued
pursuant  to the Plan  shall  have the  same  rights  as all  other  issued  and
outstanding  shares of Common  Stock,  including,  but not  limited  to,  voting
rights, the right to dividends,  if declared and paid, and the right to pro rata
distributions of the Corporation's assets in the event of liquidation.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Committee"   means  the   committee   described  in  Section  18  that
administers  the Plan or,  if no such  committee  has been  appointed,  the full
Board.

         "Corporation" means Anaren Microwave, Inc., a New York corporation.

         "Date of Grant"  means the date on which an Option is granted  pursuant
to this Plan or, if the Board or the Committee so determines, the date specified
by the Board or the Committee as the date the award is to be effective.

         "Employee"   means  an  individual   who  performs   services  for  the
Corporation  or a  Subsidiary  and  who is  treated  by the  Corporation  or the
Subsidiary  for payroll and  employment tax purposes as a common law employee of
the  Corporation  or the  Subsidiary.  The term  Employee  shall not include any
individual  who performs  services  for the  Corporation  or a Subsidiary  as an
independent contractor or other non-employee  classification,  or any individual
who is treated by the Corporation or a Subsidiary for payroll and employment tax
purposes as a  non-employee,  even if any such  individual is  reclassified by a
court or  regulatory  agency as a common law  employee of the  Corporation  or a
Subsidiary.


<PAGE>

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Exercise  Price"  means the option  price for a share of Common  Stock
subject to an Option.

         "Fair  Market  Value"  means the closing  sale price (or average of the
quoted closing bid and asked prices if there is no closing sale price  reported)
of the Common Stock on the trading day  immediately  prior to the date specified
as reported by the principal  national  exchange or trading  system on which the
Common Stock is then listed or traded. If there is no reported price information
for the Common  Stock,  the Fair Market Value will be determined by the Board or
the Committee, in is sole discretion. In making such determination, the Board or
the Committee  may, but shall not be obligated to,  commission  and rely upon an
independent appraisal of the Common Stock.

         "Option"  means a stock  option  granted  pursuant to Section 6 of this
Plan.

         "Optionee" means any Employee who receives an Option.

         "Plan"  means this Anaren  Microwave,  Inc.  Stock  Option Plan for Key
Employees, as amended from time to time.

         "Subsidiary"  means  any  now  existing  or  hereinafter  organized  or
acquired  company  of which at  least  fifty  percent  (50%) of the  issued  and
outstanding  voting stock is owned or  controlled  directly or indirectly by the
Corporation or through one or more Subsidiaries of the Corporation.

      3. Term of Plan. The Plan has been adopted by the Board to be effective as
of November 2, 2000.  To permit the granting of Options  under the Code,  and to
qualify awards of Options hereunder as "performance  based" under Section 162(m)
of the Code,  implementation  of the Plan will be  subject  to  approval  by the
stockholders of the  Corporation by the  affirmative  votes of a majority of the
shares of Common Stock  represented in person or by proxy at a duly held meeting
of the Corporation's stockholders.

      4. Shares Subject to the Plan. Except as otherwise  provided in Section 17
hereof,  the  aggregate  number  of shares of  Common  Stock  issuable  upon the
exercise  of Options  granted  pursuant to this Plan shall be  1,025,100  shares
(consisting  of 750,000  newly  issuable  shares  and  275,100  unissued  shares
remaining  in the Plan  prior to this  restatement).  Such  shares may either be
authorized but unissued shares or treasury shares. The Corporation shall, during
the term of this Plan,  reserve and keep  available a number of shares of Common
Stock  sufficient to satisfy the  requirements  of the Plan. If an Option should
expire or become  unexercisable  for any reason without having been exercised in
full,  then the shares  that were  subject  thereto  shall,  unless the Plan has
terminated,  be available for the grant of  additional  Options under this Plan,
subject to the limitations set forth above.


                                       2
<PAGE>

      5. Eligibility. Options may be granted under Section 6 of the Plan to such
Employees who are executive  officers or other key employees of the  Corporation
or its Subsidiaries as may be determined by the Board or the Committee.  Subject
to the limitations and  qualifications  set forth in this Plan, the Board or the
Committee  shall also determine the number of Options to be granted,  the number
of shares  subject to each Option  grant,  the exercise  price or prices of each
Option, the vesting and exercise period of each Option, whether an Option may be
exercised  as to less than all of the Common  Stock  subject  thereto,  and such
other terms and conditions of each Option,  if any, as are  consistent  with the
provisions of this Plan. If the aggregate  Fair Market Value  (determined at the
Date of Grant of an Option)  of the shares  with  respect to which  Options  are
exercisable  for the first time by an Optionee  during any calendar  year (under
all  such  plans of the  Optionee's  employer  corporation  and its  parent  and
subsidiary  corporations  as defined in Section 424(e) and (f) of the Code, or a
corporation or a parent or subsidiary corporation of such corporation issuing or
assuming an Option in a transaction  to which Section 424(a) of the Code applies
(collectively,  such  corporations  described in this  sentence are  hereinafter
referred  to as "related  corporations"))  shall  exceed  $100,000 or such other
amounts  as from  time to time  provided  in  Section  422(d) of the Code or any
successor  provision,  then Options in excess of the limit shall,  to the extent
provided in the implementing  Option  agreement,  (a) become  exercisable on the
earliest  date on which such limit  will not be  exceeded,  or (b) be treated as
non-qualified  stock options that vest and become exercisable in accordance with
the implementing Option agreement.

      6. Grant of  Options.  Except as  provided in Section 18, the Board or the
Committee  shall  determine  the number of shares of Common  Stock to be offered
from time to time pursuant to Options granted  hereunder and shall grant Options
under the Plan.  The grant of Options  shall be evidenced  by Option  agreements
containing  such  terms  and  provisions  as are  approved  by the  Board or the
Committee and executed on behalf of the Corporation by an appropriate officer.

      7. Time of Grant of Options. The Date of Grant of an Option under the Plan
shall be the date on which the Board or the  Committee  awards the Option or, if
the Board or the Committee so determines, the date specified by the Board or the
Committee as the date the award is to be effective. Notice of the grant shall be
given to each Optionee promptly after the date of such grant.

      8. Price.  The Exercise Price for each share of Common Stock subject to an
Option  granted  pursuant  to Section 6 of the Plan shall be  determined  by the
Board or the  Committee at the Date of Grant;  provided,  however,  that (a) the
Exercise  Price for any  Option  shall not be less than 100% of the Fair  Market
Value of the Common Stock at the Date of Grant,  and (b) if the Optionee owns on
the Date of Grant more than 10 percent of the total combined voting power of all
classes of stock of the Corporation or its parent or any of its subsidiaries, as
more fully described in Section 422(b)(6) of the Code or any successor provision
(such  stockholder  is referred to herein as a  "10-Percent  Stockholder"),  the
Exercise  Price for any Option  granted to such Optionee  shall not be less than
110% of the Fair Market Value of the Common Stock at the Date of Grant.


                                       3
<PAGE>

      9.  Vesting.  Subject  to Section  11 of this  Plan,  and unless  provided
otherwise in the applicable Option  agreement,  20 percent of the shares subject
to each Option shall vest and become  exercisable  in cumulative  fashion on the
first through fifth anniversaries of the Option's Date of Grant. Notwithstanding
the preceding  sentence,  each Option shall be fully vested and exercisable upon
the Optionee's  retirement  from the  Corporation or a Subsidiary  upon or after
attaining age 65. The Board or the Committee  may, but shall not be required to,
permit acceleration of vesting or termination of forfeiture  provisions upon any
sale of the Corporation or similar transaction.  An Option agreement may contain
such additional or different  provisions with respect to vesting as the Board or
the Committee may specify.

      10.  Exercise.  An Optionee  may pay the  Exercise  Price of the shares of
Common Stock as to which a vested  Option is being  exercised by the delivery of
cash, check or, at the Corporation's option, by the delivery of shares of Common
Stock  having a Fair Market  Value on the  exercise  date equal to the  Exercise
Price. The Board also shall have the discretion to accept any other method(s) of
payment  upon the  exercise  of an Option  (including  a  "cashless  exercise"),
provided such method(s) of payment is/are permitted by law and is/are consistent
with the purpose of the Plan.

         If the shares to be purchased are covered by an effective  registration
statement under the Securities Act of 1933, as amended, any Option granted under
the Plan may be exercised by a broker-dealer  acting on behalf of an Optionee if
(a) the broker-dealer has received from the Optionee or the Corporation a fully-
and duly-endorsed  agreement evidencing such Option,  together with instructions
signed by the  Optionee  requesting  the  Corporation  to deliver  the shares of
Common  Stock  subject  to such  Option  to the  broker-dealer  on behalf of the
Optionee and  specifying the account into which such shares should be deposited,
(b)  adequate  provision  has been  made  with  respect  to the  payment  of any
withholding  taxes due upon such  exercise,  and (c) the  broker-dealer  and the
Optionee have  otherwise  complied with Section  220.3(e)(4) of Regulation T, 12
CFR Part 220, or any successor provision.

      11. When Options May be Exercised.  No Option shall be  exercisable at any
time after the  expiration  of ten (10) years from its Date of Grant;  provided,
however,  that  if  the  Optionee  with  respect  to a  Option  is a  10-Percent
Stockholder  on the Date of Grant of such Option,  then such Option shall not be
exercisable  after the  expiration of five (5) years from its Date of Grant.  In
addition,  if an Optionee  ceases to be an employee  of the  Corporation  or any
related  corporation for any reason, such Optionee's vested Options shall not be
exercisable  after (a) 90 days following the date such Optionee  ceases to be an
employee of the  Corporation  or any related  corporation,  if such cessation of
service is not due to the death or permanent  and total  disability  (within the
meaning of Section  22(e)(3)  of the Code) of the  Optionee,  or the  Optionee's
retirement  from the Corporation or a Subsidiary upon or after attaining age 65,
or (b) twelve months  following the date such Optionee  ceases to be an employee
of the Corporation or any related  corporation,  if such cessation of service is
due to the death or permanent  and total  disability  (as defined  above) of the
Optionee, or the Optionee's retirement from the Corporation or a Subsidiary upon
or after attaining age 65. Upon the death of an Optionee, any vested Option


                                       4
<PAGE>

exercisable on the date of death may be exercised by the Optionee's estate or by
a  person  who  acquires  the  right to  exercise  such  Option  by  bequest  or
inheritance  or by  reason  of the  death of the  Optionee,  provided  that such
exercise  occurs within both the remaining  option term of the Option and twelve
months after the date of the Optionee's death. This Section 11 only provides the
outer limits of allowable  exercise dates with respect to Options;  the Board or
the Committee may determine  that the exercise  period for a Option shall have a
shorter duration than as specified above.

      Except as  otherwise  provided in Sections 9 and 11, or as may be provided
in an applicable  Option  agreement,  upon the  termination  of employment of an
Optionee,  all Options  granted to the  Optionee,  to the extent not  previously
exercised,  shall  terminate and become null and void upon such  termination  of
employment.

      12.  Withholding  of Taxes.  The Board or the  Committee  shall  make such
provisions and take such steps as it may deem  necessary or appropriate  for the
withholding  of any  taxes  that  the  Corporation  is  required  by any  law or
regulation  of any  governmental  authority to withhold in  connection  with any
Option  including,  but not limited to,  withholding  the issuance of all or any
portion of the shares of Common Stock  subject to such Option until the Optionee
reimburses  the  Corporation  for the amount it is  required  to  withhold  with
respect to such  taxes,  canceling  any  portion of such  issuance  in an amount
sufficient  to  reimburse  the  Corporation  for the  amount it is  required  to
withhold  or  taking  any  other  action  reasonably  required  to  satisfy  the
Corporation's withholding obligation.

      13.  Conditions  Upon  Issuance of Shares.  The  Corporation  shall not be
obligated  to sell or issue any shares upon the  exercise of any Option  granted
under the Plan unless the  issuance  and  delivery of shares  complies  with all
provisions of applicable  federal and state securities laws and the requirements
of any  national  exchange or trading  system on which the Common  Stock is then
listed or traded.

         As a  condition  to the  exercise  of an Option,  the  Corporation  may
require the person  exercising  the Option or  receiving  the grant to make such
representations and warranties as may be necessary to assure the availability of
an exemption from the registration  requirements of applicable federal and state
securities law.

         The  Corporation  shall not be liable for refusing to sell or issue any
shares covered by any Option if the Corporation cannot obtain authority from the
appropriate  regulatory bodies deemed by the Corporation to be necessary to sell
or issue  such  shares  in  compliance  with all  applicable  federal  and state
securities laws and the requirements of any national  exchange or trading system
on which the Common Stock is then listed or traded. In addition, the Corporation
shall have no obligation to any Optionee,  express or implied, to list, register
or otherwise qualify the shares of Common Stock covered by any Option.

         No  Optionee  will be, or will be deemed to be, a holder of any  Common
Stock  subject to an Option  unless and until such Optionee has exercised his or
her Option and paid the


                                       5
<PAGE>

purchase  price for the subject  shares of Common Stock.  Each Option under this
Plan shall be transferable  only by will or the laws of descent and distribution
and shall be exercisable during the Optionee's lifetime only by such Optionee.

      14. Restrictions on Shares.  Shares of Common Stock issued pursuant to the
Plan may be subject to  restrictions  on transfer under  applicable  federal and
state securities laws. The Board may impose such additional  restrictions on the
ownership and transfer of shares of Common Stock issued  pursuant to the Plan as
it deems  desirable;  any such  restrictions  shall be set  forth in any  Option
agreement entered into hereunder.

      15.  Modification  of  Options.  Except as  provided in Section 18 of this
Plan, at any time and from time to time,  the Board or the Committee may execute
an  instrument   providing  for  modification,   extension  or  renewal  of  any
outstanding  Option,  provided that no such  modification,  extension or renewal
shall  impair  the Option  without  the  consent  of the  holder of the  Option.
Notwithstanding   the   foregoing,   in  the  event  of  such  a   modification,
substitution,  extension or renewal of an Option, the Board or the Committee may
increase the exercise  price of such Option if necessary to retain the qualified
status of such Option.

      16.  Effect of Change in Stock Subject to the Plan. In the event that each
of the outstanding  shares of Common Stock (other than shares held by dissenting
stockholders)  shall be changed into or exchanged for a different number or kind
of shares of stock of the  Corporation  or of another  corporation  (whether  by
reason of merger, consolidation,  recapitalization,  reclassification, split-up,
combination  of shares  or  otherwise),  or in the event a stock  split or stock
dividend occurs,  then there shall be substituted for each share of Common Stock
then subject to Options or  available  for Options the number and kind of shares
of stock into which each  outstanding  share of Common  Stock  other than shares
held by dissenting stockholders) shall be so changed or exchanged, or the number
of shares of Common Stock as is equitably required in the event of a stock split
or stock  dividend,  together  with an  appropriate  adjustment  of the Exercise
Price.  The  Board  may,  but  shall  not be  required  to,  provide  additional
anti-dilution  protection  to an  Optionee  under the terms of the  individual's
Option agreement.

      17. Administration.

         (a) The Plan shall be  administered  by the Board or by a committee  of
the  Board  comprised  solely of two or more  "outside  directors"  (within  the
meaning of Treasury  Regulation Section  1.162-27(e)(3))  appointed by the Board
(the "Committee"). Options may be granted under Section 6, only (i) by the Board
as a whole,  or (ii) by a majority  agreement  of the members of the  Committee;
provided  that,  if the  Committee  does not consist  entirely  of  non-employee
directors (as defined in Rule 16b-3 under the Exchange Act), then Options may be
granted to an officer,  director or 10%  stockholder  of the  Corporation  under
Section  6 only by the  Board as a whole.  Option  agreements,  in the  forms as
approved by the Board or the Committee, and containing such terms and conditions
consistent  with the  provisions of this Plan as are


                                       6
<PAGE>

determined  by the  Board or the  Committee,  may be  executed  on behalf of the
Corporation by the Chairman of the Board, the President or any Vice President of
the  Corporation.  The Board or the Committee  shall have complete  authority to
construe,  interpret  and  administer  the  provisions  of  this  Plan  and  the
provisions of the Option agreements granted hereunder;  to prescribe,  amend and
rescind rules and regulations pertaining to this Plan; to suspend or discontinue
this Plan; and to make all other determinations necessary or deemed advisable in
the  administration  of  the  Plan.  The  determinations,   interpretations  and
constructions  made by the Board or the Committee shall be final and conclusive.
No member of the Board or the Committee shall be liable for any action taken, or
failed  to be  taken,  made in good  faith  relating  to the  Plan or any  award
thereunder,  and the members of the Board or the Committee  shall be entitled to
indemnification  and  reimbursement  by the Corporation in respect of any claim,
loss,  damage or expense  (including  attorneys' fees) arising  therefrom to the
fullest extent permitted by law.

         (b) Although the Board or the Committee may suspend or discontinue  the
Plan at any time,  all  Options  must be granted  within ten (10) years from the
effective date of the Plan or the date the Plan is approved by the  stockholders
of the Corporation, whichever is earlier.

         (c)  Subject to any  applicable  requirements  of Rule 16b-3  under the
Exchange Act or of any national  exchange or trading  system on which the Common
Stock is then listed or traded,  the Board may amend any  provision of this Plan
in any respect in its discretion.

         (d) Nothing contained in the Plan shall be construed to limit the right
of the Board or the Corporation to grant options otherwise than pursuant to this
Plan.

      18.  Continued  Employment  Not  Presumed.  Nothing  in  this  Plan or any
document  describing  it nor the grant of any Option shall give any Optionee the
right to continue in the  employment of the  Corporation  or affect the right of
the  Corporation  to terminate the employment of any such person with or without
cause.

      19. Liability of the Corporation.  Neither the Corporation, its directors,
officers or employees or the Committee, nor any Subsidiary which is in existence
or  hereafter  comes into  existence,  shall be liable to any  Optionee or other
person if it is determined for any reason by the Internal Revenue Service or any
court having jurisdiction that any Option granted hereunder does not qualify for
tax treatment as an incentive stock option under Section 422 of the Code.

      20.  Governing  Law.  The  Plan  shall be  governed  by and  construed  in
accordance  with the laws of the  State of New York and the  United  States,  as
applicable, without reference to the conflict of laws provisions thereof.

      21.  Severability  of  Provisions.  If  any  provision  of  this  Plan  is
determined to be invalid, illegal or unenforceable,  such invalidity, illegality
or unenforceability  shall not affect the remaining  provisions of the Plan, but
such invalid,  illegal or unenforceable provision shall be fully severable,  and
the Plan shall be  construed  and enforced as if such  provision  had never been
inserted herein.


                                       7
<PAGE>

                                                                      APPENDIX B

                             ANAREN MICROWAVE, INC.
                                STOCK OPTION PLAN

      1. Purpose of the Plan. This Plan shall be known as the Anaren  Microwave,
Inc.  Stock  Option  Plan.  The  purpose  of the Plan is to  attract  and retain
personnel and to provide  incentives to such personnel to promote the success of
the business of Anaren Microwave, Inc. and its subsidiaries.

      All options  granted under this Plan are intended to qualify as "incentive
stock options"  pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended from time to time.

      2. Definitions. As used herein, the following definitions shall apply:

         "Board" means the Board of Directors of the Corporation.

         "Common Stock" means the Common Stock, $.01 par value per share, of the
Corporation.  Except as  otherwise  provided  herein,  all Common  Stock  issued
pursuant  to the Plan  shall  have the  same  rights  as all  other  issued  and
outstanding  shares of Common  Stock,  including,  but not  limited  to,  voting
rights, the right to dividends,  if declared and paid, and the right to pro rata
distributions of the Corporation's assets in the event of liquidation.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Committee"   means  the   committee   described  in  Section  18  that
administers  the Plan or,  if no such  committee  has been  appointed,  the full
Board.

         "Corporation" means Anaren Microwave, Inc., a New York corporation.

         "Date of Grant"  means the date on which an Option is granted  pursuant
to this Plan or, if the Board or the Committee so determines, the date specified
by the Board or the Committee as the date the award is to be effective.

         "Employee"   means  an  individual   who  performs   services  for  the
Corporation  or a  Subsidiary  and  who is  treated  by the  Corporation  or the
Subsidiary  for payroll and  employment tax purposes as a common law employee of
the  Corporation  or the  Subsidiary.  The term  Employee  shall not include any
individual  who performs  services  for the  Corporation  or a Subsidiary  as an
independent contractor or other non-employee  classification,  or any individual
who is treated by the Corporation or a Subsidiary for payroll and employment tax
purposes as a  non-employee,  even if any such  individual is  reclassified by a
court or  regulatory  agency as a common law  employee of the  Corporation  or a
Subsidiary.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.


<PAGE>

         "Exercise  Price"  means the option  price for a share of Common  Stock
subject to an Option.

         "Fair  Market  Value"  means the closing  sale price (or average of the
quoted closing bid and asked prices if there is no closing sale price  reported)
of the Common Stock on the trading day  immediately  prior to the date specified
as reported by the principal  national  exchange or trading  system on which the
Common Stock is then listed or traded. If there is no reported price information
for the Common  Stock,  the Fair Market Value will be determined by the Board or
the Committee, in is sole discretion. In making such determination, the Board or
the Committee  may, but shall not be obligated to,  commission  and rely upon an
independent appraisal of the Common Stock.

         "Option"  means a stock  option  granted  pursuant to Section 6 of this
Plan.

         "Optionee" means any Employee who receives an Option.

         "Plan" means this Anaren Microwave,  Inc. Stock Option Plan, as amended
from time to time.

         "Subsidiary"  means  any  now  existing  or  hereinafter  organized  or
acquired  company  of which at  least  fifty  percent  (50%) of the  issued  and
outstanding  voting stock is owned or  controlled  directly or indirectly by the
Corporation or through one or more Subsidiaries of the Corporation.

      3. Term of Plan. The Plan has been adopted by the Board to be effective as
of November 2, 2000.  To permit the granting of Options  under the Code,  and to
qualify awards of Options hereunder as "performance  based" under Section 162(m)
of the Code,  implementation  of the Plan will be  subject  to  approval  by the
stockholders of the  Corporation by the  affirmative  votes of a majority of the
shares of Common Stock  represented in person or by proxy at a duly held meeting
of the Corporation's stockholders.

      4. Shares Subject to the Plan. Except as otherwise  provided in Section 17
hereof,  the  aggregate  number  of shares of  Common  Stock  issuable  upon the
exercise of Options granted pursuant to this Plan shall be 500,000 shares.  Such
shares may either be  authorized  but unissued  shares or treasury  shares.  The
Corporation  shall,  during the term of this Plan,  reserve and keep available a
number of shares of Common Stock  sufficient to satisfy the  requirements of the
Plan. If an Option should expire or become  unexercisable for any reason without
having been exercised in full,  then the shares that were subject thereto shall,
unless the Plan has terminated, be available for the grant of additional Options
under this Plan, subject to the limitations set forth above.

      5. Eligibility. Options may be granted under Section 6 of the Plan to such
Employees of the  Corporation  or its  Subsidiaries  as may be determined by the
Board or the  Committee;  provided,  however,  that no Options  shall be granted
during a fiscal year of the


                                       2
<PAGE>

Corporation pursuant to this Plan to any individual who has been granted options
during the same fiscal year pursuant to the Corporation's Incentive Stock Option
Plan for Key Employees.  Subject to the limitations and qualifications set forth
in this Plan,  the Board or the  Committee  shall also  determine  the number of
Options to be granted,  the number of shares  subject to each Option grant,  the
vesting and exercise  period of each Option,  whether an Option may be exercised
as to less than all of the Common Stock  subject  thereto,  and such other terms
and conditions of each Option,  if any, as are consistent with the provisions of
this Plan. The aggregate  Fair Market Value  (determined at the Date of Grant of
an Option) of the shares with respect to which Options are  exercisable  for the
first time by an Optionee  during any calendar year (under all such plans of the
Optionee's  employer  corporation and its parent and subsidiary  corporations as
defined in Section  424(e) and (f) of the Code, or a corporation  or a parent or
subsidiary  corporation of such  corporation  issuing or assuming an Option in a
transaction  to which  Section  424(a) of the Code applies  (collectively,  such
corporations  described in this sentence are hereinafter referred to as "related
corporations"))  shall not exceed $100,000 or such other amounts as from time to
time provided in Section 422(d) of the Code or any successor provision.

      6. Grant of  Options.  Except as  provided in Section 18, the Board or the
Committee  shall  determine  the number of shares of Common  Stock to be offered
from time to time pursuant to Options granted  hereunder and shall grant Options
under the Plan.  The grant of Options  shall be evidenced  by Option  agreements
containing  such  terms  and  provisions  as are  approved  by the  Board or the
Committee and executed on behalf of the Corporation by an appropriate officer.

      7. Time of Grant of Options. The Date of Grant of an Option under the Plan
shall be the date on which the Board or the  Committee  awards the Option or, if
the Board or the Committee so determines, the date specified by the Board or the
Committee as the date the award is to be effective. Notice of the grant shall be
given to each Optionee promptly after the date of such grant.

      8. Price.  The Exercise Price for each share of Common Stock subject to an
Option  granted  pursuant  to Section 6 of the Plan shall be  determined  by the
Board or the  Committee at the Date of Grant;  provided,  however,  that (a) the
Exercise  Price for any  Option  shall not be less than 100% of the Fair  Market
Value of the Common Stock at the Date of Grant,  and (b) if the Optionee owns on
the Date of Grant more than 10 percent of the total combined voting power of all
classes of stock of the Corporation or its parent or any of its subsidiaries, as
more fully described in Section 422(b)(6) of the Code or any successor provision
(such  stockholder  is referred to herein as a  "10-Percent  Stockholder"),  the
Exercise  Price for any Option  granted to such Optionee  shall not be less than
110% of the Fair Market Value of the Common Stock at the Date of Grant.

      9.  Vesting.  Subject to Section  11 of this  Plan,  and unless  specified
otherwise by the Board or Committee in the  applicable  Option  agreement,  each
Option shall vest and become


                                       3
<PAGE>

exercisable  on the third  anniversary  of its Date of Grant,  provided that the
Optionee remains continuously  employed by the Corporation or a Subsidiary as an
Employee from the Date of Grant through such third anniversary.  Notwithstanding
the preceding  sentence,  each Option shall be fully vested and exercisable upon
the Optionee's  retirement  from the  Corporation or a Subsidiary  upon or after
attaining age 65. The Board or the Committee  may, but shall not be required to,
permit acceleration of vesting or termination of forfeiture  provisions upon any
sale of the Corporation or similar transaction.  An Option agreement may contain
such additional or different  provisions with respect to vesting as the Board or
the Committee may specify.

      10.  Exercise.  An Optionee  may pay the  Exercise  Price of the shares of
Common Stock as to which a vested  Option is being  exercised by the delivery of
cash, check or, at the Corporation's option, by the delivery of shares of Common
Stock  having a Fair Market  Value on the  exercise  date equal to the  Exercise
Price. The Board also shall have the discretion to accept any other method(s) of
payment  upon the  exercise  of an Option  (including  a  "cashless  exercise"),
provided such method(s) of payment is/are permitted by law and is/are consistent
with the purpose of the Plan.

      If the shares to be  purchased  are covered by an  effective  registration
statement under the Securities Act of 1933, as amended, any Option granted under
the Plan may be exercised by a broker-dealer  acting on behalf of an Optionee if
(a) the broker-dealer has received from the Optionee or the Corporation a fully-
and duly-endorsed  agreement evidencing such Option,  together with instructions
signed by the  Optionee  requesting  the  Corporation  to deliver  the shares of
Common  Stock  subject  to such  Option  to the  broker-dealer  on behalf of the
Optionee and  specifying the account into which such shares should be deposited,
(b)  adequate  provision  has been  made  with  respect  to the  payment  of any
withholding  taxes due upon such  exercise,  and (c) the  broker-dealer  and the
Optionee have  otherwise  complied with Section  220.3(e)(4) of Regulation T, 12
CFR Part 220, or any successor provision.

      11. When Options May be Exercised.  No Option shall be  exercisable at any
time  after  the fifth  anniversary  of its Date of Grant.  In  addition,  if an
Optionee ceases to be an employee of the Corporation or any related  corporation
for any reason,  such Optionee's  vested Options shall not be exercisable  after
(a) 90 days  following  the date such  Optionee  ceases to be an employee of the
Corporation or any related corporation,  if such cessation of service is not due
to the death or permanent  and total  disability  (within the meaning of Section
22(e)(3) of the Code) of the Optionee,  or the  Optionee's  retirement  from the
Corporation or a Subsidiary upon or after attaining age 65, or (b) twelve months
following the date such Optionee  ceases to be an employee of the Corporation or
any related  corporation,  if such  cessation  of service is due to the death or
permanent  and total  disability  (as  defined  above) of the  Optionee,  or the
Optionee's  retirement  from  the  Corporation  or a  Subsidiary  upon or  after
attaining age 65. Upon the death of an Optionee,  any vested Option  exercisable
on the date of death may be  exercised by the  Optionee's  estate or by a person
who acquires the right to exercise such Option by bequest or  inheritance  or by
reason of the death of the Optionee,  provided that such exercise  occurs within
both the remaining option term of the Option and twelve months after the date of
the  Optionee's  death.  This  Section  11 only  provides  the  outer  limits of
allowable exercise dates with respect to


                                       4
<PAGE>

Options;  the Board or the Committee may determine that the exercise  period for
an Option shall have a shorter duration than as specified above.

      Except as  otherwise  provided in Sections 9 and 11, or as may be provided
in an applicable  Option  agreement,  upon the  termination  of employment of an
Optionee,  all Options  granted to the  Optionee,  to the extent not  previously
exercised,  shall  terminate and become null and void upon such  termination  of
employment.

      12.  Withholding  of Taxes.  The Board or the  Committee  shall  make such
provisions and take such steps as it may deem  necessary or appropriate  for the
withholding  of any  taxes  that  the  Corporation  is  required  by any  law or
regulation  of any  governmental  authority to withhold in  connection  with any
Option  including,  but not limited to,  withholding  the issuance of all or any
portion of the shares of Common Stock  subject to such Option until the Optionee
reimburses  the  Corporation  for the amount it is  required  to  withhold  with
respect to such  taxes,  canceling  any  portion of such  issuance  in an amount
sufficient  to  reimburse  the  Corporation  for the  amount it is  required  to
withhold  or  taking  any  other  action  reasonably  required  to  satisfy  the
Corporation's withholding obligation.

      13.  Conditions  Upon  Issuance of Shares.  The  Corporation  shall not be
obligated  to sell or issue any shares upon the  exercise of any Option  granted
under the Plan unless the  issuance  and  delivery of shares  complies  with all
provisions of applicable  federal and state securities laws and the requirements
of any  national  exchange or trading  system on which the Common  Stock is then
listed or traded.

         As a  condition  to the  exercise  of an Option,  the  Corporation  may
require the person  exercising  the Option or  receiving  the grant to make such
representations and warranties as may be necessary to assure the availability of
an exemption from the registration  requirements of applicable federal and state
securities law.

         The  Corporation  shall not be liable for refusing to sell or issue any
shares covered by any Option if the Corporation cannot obtain authority from the
appropriate  regulatory bodies deemed by the Corporation to be necessary to sell
or issue  such  shares  in  compliance  with all  applicable  federal  and state
securities laws and the requirements of any national  exchange or trading system
on which the Common Stock is then listed or traded. In addition, the Corporation
shall have no obligation to any Optionee,  express or implied, to list, register
or otherwise qualify the shares of Common Stock covered by any Option.

         No  Optionee  will be, or will be deemed to be, a holder of any  Common
Stock  subject to an Option  unless and until such Optionee has exercised his or
her Option and paid the purchase  price for the subject  shares of Common Stock.
Each Option  under this Plan shall be  transferable  only by will or the laws of
descent and distribution and shall be exercisable during the Optionee's lifetime
only by such Optionee.


                                       5
<PAGE>

      14. Restrictions on Shares.  Shares of Common Stock issued pursuant to the
Plan may be subject to  restrictions  on transfer under  applicable  federal and
state securities laws. The Board may impose such additional  restrictions on the
ownership and transfer of shares of Common Stock issued  pursuant to the Plan as
it deems  desirable;  any such  restrictions  shall be set  forth in any  Option
agreement entered into hereunder.

      15.  Modification  of  Options.  Except as  provided in Section 18 of this
Plan, at any time and from time to time,  the Board or the Committee may execute
an  instrument   providing  for  modification,   extension  or  renewal  of  any
outstanding  Option,  provided that no such  modification,  extension or renewal
shall  impair  the Option  without  the  consent  of the  holder of the  Option.
Notwithstanding   the   foregoing,   in  the  event  of  such  a   modification,
substitution,  extension or renewal of an Option, the Board or the Committee may
increase the exercise  price of such Option if necessary to retain the qualified
status of such Option.

      16.  Effect of Change in Stock Subject to the Plan. In the event that each
of the outstanding  shares of Common Stock (other than shares held by dissenting
stockholders)  shall be changed into or exchanged for a different number or kind
of shares of stock of the  Corporation  or of another  corporation  (whether  by
reason of merger, consolidation,  recapitalization,  reclassification, split-up,
combination  of shares  or  otherwise),  or in the event a stock  split or stock
dividend occurs,  then there shall be substituted for each share of Common Stock
then subject to Options or  available  for Options the number and kind of shares
of stock into which each  outstanding  share of Common  Stock  other than shares
held by dissenting stockholders) shall be so changed or exchanged, or the number
of shares of Common Stock as is equitably required in the event of a stock split
or stock  dividend,  together  with an  appropriate  adjustment  of the Exercise
Price.  The  Board  may,  but  shall  not be  required  to,  provide  additional
anti-dilution  protection  to an  Optionee  under the terms of the  individual's
Option agreement.

      17. Administration.

         (a) The Plan shall be  administered  by the Board or by a committee  of
the  Board  comprised  solely of two or more  "outside  directors"  (within  the
meaning of Treasury  Regulation Section  1.162-27(e)(3))  appointed by the Board
(the "Committee"). Options may be granted under Section 6, only (i) by the Board
as a whole,  or (ii) by a majority  agreement  of the members of the  Committee;
provided  that,  if the  Committee  does not consist  entirely  of  non-employee
directors (as defined in Rule 16b-3 under the Exchange Act), then Options may be
granted to an officer,  director or 10%  stockholder  of the  Corporation  under
Section  6 only by the  Board as a whole.  Option  agreements,  in the  forms as
approved by the Board or the Committee, and containing such terms and conditions
consistent  with the  provisions of this Plan as are  determined by the Board or
the Committee,  may be executed on behalf of the  Corporation by the Chairman of
the Board, the President or any Vice President of the Corporation.  The Board or
the  Committee  shall  have  complete  authority  to  construe,   interpret  and
administer  the  provisions  of this  Plan  and  the  provisions  of the  Option
agreements  granted  hereunder;  to  prescribe,  amend  and  rescind  rules  and
regulations pertaining to this Plan; to suspend or discontinue this Plan; and


                                       6
<PAGE>

to  make  all  other  determinations   necessary  or  deemed  advisable  in  the
administration   of  the   Plan.   The   determinations,   interpretations   and
constructions  made by the Board or the Committee shall be final and conclusive.
No member of the Board or the Committee shall be liable for any action taken, or
failed  to be  taken,  made in good  faith  relating  to the  Plan or any  award
thereunder,  and the members of the Board or the Committee  shall be entitled to
indemnification  and  reimbursement  by the Corporation in respect of any claim,
loss,  damage or expense  (including  attorneys' fees) arising  therefrom to the
fullest extent permitted by law.

         (b) Although the Board or the Committee may suspend or discontinue  the
Plan at any time,  all  Options  must be granted  within ten (10) years from the
effective date of the Plan or the date the Plan is approved by the  stockholders
of the Corporation, whichever is earlier.

         (c)  Subject to any  applicable  requirements  of Rule 16b-3  under the
Exchange Act or of any national  exchange or trading  system on which the Common
Stock is then listed or traded,  the Board may amend any  provision of this Plan
in any respect in its discretion.

         (d) Nothing contained in the Plan shall be construed to limit the right
of the Board or the Corporation to grant options otherwise than pursuant to this
Plan.

      18.  Continued  Employment  Not  Presumed.  Nothing  in  this  Plan or any
document  describing  it nor the grant of any Option shall give any Optionee the
right to continue in the  employment of the  Corporation  or affect the right of
the  Corporation  to terminate the employment of any such person with or without
cause.

      19. Liability of the Corporation.  Neither the Corporation, its directors,
officers or employees or the Committee, nor any Subsidiary which is in existence
or  hereafter  comes into  existence,  shall be liable to any  Optionee or other
person if it is determined for any reason by the Internal Revenue Service or any
court having jurisdiction that any Option granted hereunder does not qualify for
tax treatment as an incentive stock option under Section 422 of the Code.

      20.  Governing  Law.  The  Plan  shall be  governed  by and  construed  in
accordance  with the laws of the  State of New York and the  United  States,  as
applicable, without reference to the conflict of laws provisions thereof.

      21.  Severability  of  Provisions.  If  any  provision  of  this  Plan  is
determined to be invalid, illegal or unenforceable,  such invalidity, illegality
or unenforceability  shall not affect the remaining  provisions of the Plan, but
such invalid,  illegal or unenforceable provision shall be fully severable,  and
the Plan shall be  construed  and enforced as if such  provision  had never been
inserted herein.


                                       7
<PAGE>

                          PROXY ANAREN MICROWAVE, INC.                     PROXY

                               6635 Kirkville Road
                          East Syracuse, New York 13057

                               THIS IS YOUR PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ANAREN MICROWAVE,
INC.

      The  undersigned  hereby  (1)  acknowledges  receipt  of the notice of the
Annual Meeting of Shareholders of Anaren  Microwave,  Inc. (the "Company") to be
held at the Wyndham Hotel,  6302 Carrier  Parkway,  East  Syracuse,  New York on
Thursday,  November 2, 2000 at 11:00 A.M., local time and of the Proxy Statement
in  connection  therewith and (2) appoints Hugh A. Hair and Lawrence A. Sala and
each of them as  proxies,  each with the power to appoint  his  substitute,  and
hereby authorizes them to represent and to vote, as designated below, all of the
shares of common stock, $.01 par value, of Anaren Microwave, Inc. held of record
by the undersigned on September 17, 2000 at the Annual Meeting of  Shareholders,
or any adjournment thereof. If any nominee for director should be unavailable to
serve,  it is intended that all of the shares will be voted for such  substitute
nominee as may be determined by the Board of Directors.  The undersigned directs
that this Proxy be voted as follows:

ITEM 1: ELECTION OF DIRECTORS

     FOR all nominees  listed below               WITHHOLD AUTHORITY to vote for
     (except as marked to the contrary).          all nominees listed below.

     ---                                          ---

Nominees:  Carl W. Gerst, Jr., Brian P. Kelly

(Instruction: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the above list.)

ITEM 2:  APPROVAL OF ANAREN MICROWAVE, INC. INCENTIVE STOCK OPTION PLAN FOR
           KEY EMPLOYEES

                  FOR          AGAINST          ABSTAIN
                      ---              ---               ---

ITEM 3: APPROVAL OF ANAREN MICROWAVE, INC. COMPANY-WIDE STOCK OPTION PLAN

                  FOR          AGAINST          ABSTAIN
                      ---              ---               ---

ITEM 4: APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE SHARES
        OF AUTHORIZED COMMON STOCK

                  FOR          AGAINST          ABSTAIN
                      ---              ---               ---

In their  discretion the proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.

              (Continued and to be dated and signed on the reverse)

<PAGE>

THIS PROXY, WHEN PROPERLY EXECUTED,  WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE  UNDERSIGNED  SHAREHOLDER.  IF NO DIRECTION  IS MADE,  THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR, AND FOR ITEMS 2, 3 AND 4.

IMPORTANT.  Please sign exactly as name  appears on this card.  Each joint owner
should sign. Executors, administrators, trustees, etc. should give full title.

                                      SIGNATURES:

                                      Dated:                    , 19
                                             -------------------    ---


                                      -------------------------------
                                      Signature


                                      -------------------------------
                                      Please Print Name Here


                                      -------------------------------
                                      Signature


                                      -------------------------------
                                      Please Print Name Here


                                      PLEASE  MARK,  SIGN,  DATE AND RETURN THIS
                                      PROXY  USING  THE  ENCLOSED  ENVELOPE.  NO
                                      POSTAGE REQUIRED.