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                                    FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

(MARK ONE)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED JUNE 30, 1997.

                                       OR
[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

FOR THE TRANSITION PERIOD _______________ TO _______________.

                         COMMISSION FILE NUMBER 0-07428

                           CALIFORNIA MICROWAVE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                          ---------------------------

          DELAWARE                                         94-1668412
  (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
  INCORPORATION OR ORGANIZATION)                        IDENTIFICATION NO.)

             555 TWIN DOLPHIN DRIVE, REDWOOD CITY, CALIFORNIA 94065
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (650) 596-9000

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                          COMMON STOCK, $.10 PAR VALUE
                                (TITLE OF CLASS)

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

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [X]

         The aggregate market value of the voting stock held by nonaffiliates
of the registrant was approximately $278,383,685 as of September 8, 1997.

         Indicate the number of shares outstanding of the issuer's common
stock, as of the latest practicable date:  On September 8, 1997, there were
16,496,811 shares of common stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

(1)      Portions of the registrant's Annual Report to Stockholders for fiscal
         year ended June 30, 1997.  (Part II of Form 10-K)

(2)      Portions of definitive proxy statement filed with Securities and
         Exchange Commission relating to the registrant's 1997 Annual Meeting
         of Stockholders.  (Part III of Form 10-K)

================================================================================

<PAGE>   2
ITEM 1.  BUSINESS


GENERAL

         California Microwave, Inc. (the "Company") designs, manufactures and
markets sophisticated systems, products and services used worldwide in
satellite and wireless communications for the transmission of data, video and
voice.  The Company applies its expertise in microwave radio and digital signal
processing technologies to:  satellite ground equipment, microwave radios for 
wireless communications, and information collection and communications systems.
Users of the Company's products and services include private networks, broadcast
and cable television operators, utilities and other major corporations, and
municipal, state and national governments.

         During the second and third quarters of fiscal 1997, the Company
recorded operating reserves of approximately $39.3 million and restructuring
reserves of $7.8 million.  These charges were principally a result of a
comprehensive review of the Microwave Networks Division ("MN") and the
Satellite Transmission System Division ("STS") and their disappointing
operating performance during 1997.  This review included an evaluation of
inventory, product development and migration plans, utilization of facilities,
head count requirements and other matters.

         STS is a turnkey supplier of satellite communications earth stations
and networks and provides systems engineering and integration capabilities.
Microwave Networks is a combination of Microwave Networks, Inc. (MNI) acquired
in May 1995, TeleSciences Transmission Systems, Inc. (TTS) acquired in October
1993 and the digital radio product line of Microwave Radio Corporation,
acquired in April 1992.  MN designs and manufactures microwave radio systems
for cellular, personal communication services and public and private
communications networks.  In June 1997, the Company announced its plans to
divest MN and STS and the financial statements of the Company have been
restated to reflect the accounts of MN and STS as discontinued operations.  For
financial information relating to the discontinued operations, see the selected
financial data, management's discussion and analysis of financial condition and
results of operations and financial statements incorporated by reference in
Items 6, 7 and 8 of this Report.

         The six business units that constitute the continuing operations of
the Company--EFData, Microwave Data Systems, Microwave Radio Communications,
Airborne Systems Integration Division, Government Electronics Division and
Services Division--participate in point-to-point and point-to-multipoint data
transmission markets.  Products and systems sold by the continuing businesses
include satellite communications products and up-link services, terrestrial
video and data radio products and information collection, analysis and
communication systems.

         For its fiscal year ended June 30, 1997, the Company had income from
continuing operations of $2.6 million and losses (net of tax) from its
discontinued operations of $59.3 million.  Included in the discontinued
operations results were $14.4 million (net of tax) and $8.4 million (net of
tax), respectively, for the write-off of the unamortized balance of goodwill on
the books of the discontinued operations and for the estimated losses, fees and
expenses associated with the divestiture process.

         The description of the business of the Company that follows in this
Form 10-K Annual Report will be confined to a description of the Company's
continuing operations.

         On July 17, 1997, the Company announced that its Board of Directors
had appointed Frederick D. Lawrence to the position of Chairman of the Board,
Chief Executive Officer and President.





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INFORMATION REGARDING FORWARD LOOKING STATEMENTS

         The Private Securities Litigation Reform Act of 1995 (the "Act")
provides companies with a "safe harbor" when making forward looking statements.
Statements of the Company that are not historical facts, including statements
about management's expectations for fiscal year 1998 and beyond, are forward
looking statements and involve certain risks and uncertainties.  Factors that
could cause the Company's actual results to differ materially from management's
projections, forecasts, estimates and expectations include, but are not limited
to, the following:

         (a)     The timing of receipt of significant orders and of deliveries
                 of new and existing products and systems;

         (b)     The time it takes to successfully execute the Company's
                 divestiture plans; and the amount of net proceeds from the
                 sale of the divested business units.

         (c)     Fluctuating market demand, price competition and new product
                 introductions by competitors and the ability to develop and
                 introduce competitive products and bring them to market in a
                 timely manner;

         (d)     Cost overruns and contract terminations or adjustments;

         (e)     With regard to international sales, fluctuations in foreign
                 currency exchange rates, the availability of suitable export
                 financing, political instability and the ability to retain
                 stable and experienced in-country partners to provide sales
                 and support services;

         (f)     The availability of quality components and subsystems used by
                 the Company in its products and the dependence upon
                 subcontractors to manufacture and deliver certain items in a
                 timely and satisfactory manner;

         (g)     The limitation on the ability to reduce inventory and expenses
                 if forecasts and demand are not realized;

         (h)     The risk of nonpayment of accounts receivable arising out of
                 customer dissatisfaction or insolvency;

         (i)     The reliance of certain of the Company's operations upon major
                 orders from a small number of customers; and

         (j)     Changes in industry or general economic conditions.


TELECOMMUNICATIONS INDUSTRY OVERVIEW

         Telecommunications Market.  The demand for improved telecommunications
is increasing worldwide as emerging economies seek to modernize, and as
increasingly information intensive developed countries introduce new
telecommunications services.  The telecommunications industry has expanded
rapidly during the last decade, principally due to technological advances and
regulatory changes in the United States and internationally.  Advances in
technology have lowered per-unit communications costs, increased product
reliability, and encouraged a proliferation of new and enhanced communications
products and services.  Regulatory initiatives such as the breakup of the Bell
system, the assignment of radio frequency spectrum for cellular telephone
services and the transition from analog to digital television have enhanced
competition, permitted the opening of new markets and provided incentives for
the development of new products.






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         Alternative Transmission Media.  Customers for telecommunications
equipment must weigh the relative costs and advantages of the four presently
available transmission media:  copper cable, fiber optic cable, satellite
systems and terrestrial microwave radio systems.

         -       Copper cable, the traditional transmission medium most
                 familiar to consumers, is being replaced and supplemented by
                 the other media, particularly for high-volume and
                 long-distance transmissions where it has substantial capacity,
                 cost and reliability limitations.

         -       Fiber optic cable is best suited to high-volume,
                 point-to-point, short- or long-distance links where its
                 advantages -- capacity, quality and security -- justify the
                 long lead time and high cost to equip and install a network.

         -       Satellite systems are often a preferred medium for
                 transmitting to a large geographical or multipoint area.
                 These systems, which use microwave technology, are well suited
                 for rapid introduction of service in remote areas or where
                 terrestrial alternatives are unavailable, such as mobile,
                 shipboard or military applications.  Satellite systems require
                 a sizeable initial capital investment by service providers to
                 build and launch one or more satellites.  Once the satellites
                 are in orbit, however, there are substantial incentives to use
                 this capacity, which typically requires continued investment
                 in satellite earth stations.

         -       Terrestrial microwave radio systems can be quickly and easily
                 installed, require relatively low initial capital investment
                 and can be upgraded and expanded over time.  There are a wide
                 variety of microwave radios offering different frequencies,
                 modulation techniques (analog or digital), and transmission
                 capacities.  However, microwave radio applications typically
                 require government licensing and frequency coordination in
                 order to prevent signal interference among various users, and
                 require a line of sight between the transmitting and receiving
                 antennas.  Unavailability of sufficient frequency spectrum has
                 historically inhibited sales in developed countries, although
                 this constraint is being alleviated by the actions of various
                 governments and the availability of radios that do not require
                 governmental licensing prior to use.

         Rarely is a complete communications system based solely on one of
these media.  Transmission is normally routed through a combination of media,
each employed where it fits most cost-effectively within the communications
network.  For example, a microwave radio studio-to- transmitter link used by a
television broadcaster may connect to a satellite system used to distribute
programs domestically and overseas.  In addition, the various media provide
routing alternatives for the other media, as in the case of satellite backup
facilities for undersea fiber optic cables.

STRATEGY

         California Microwave's strategy is to apply its expertise in microwave
technologies to systems and products for the satellite communications, radio and
information collection and communications markets. The Company works closely
with existing and potential customers to specify and develop new products and
product enhancements that have long-term growth potential.  The Company
considers its ability to create and maintain long-term customer relationships an
important component of its overall strategy in each of its markets.





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<PAGE>   5

         California Microwave's mission is to provide radio-based bandwidth
solutions to send and receive complex data, through the design and manufacture
of capital equipment products for public and private communications systems.
The Company has concentrated its efforts on sales of products and services for
communications infrastructure rather than on consumer terminals and equipment.

         Under the leadership of the Company's newly hired chief executive
officer, the executive team is beginning to formulate a new, integrated,
long-term strategy, which will take advantage of the Company's existing strong
market positions and current and next-generation technologies.  It is expected
that this effort will be completed before the end of fiscal 1998.  This
strategy will include the following key elements:

         Global Information Technology Bandwidth Requirements.  The Company
believes that the wireless telecommunications market offers numerous
opportunities for profitable growth because of the growing need for increasing
bandwidth, or carrying capacity, for digital data--a need that corresponds well
with the unique qualities of radio.  In particular, continuous improvements in
computing technology create increasingly sophisticated bandwidth requirements
for moving data around the world in ways that align well with the Company's
radio technology products and services.  For instance, telecommunications
infrastructure requires increasing and ever more complex data types-such as
audio, video and graphics files-for computer users.  "Burst transactions," such
as point-of-sale or ATM activities, create peaks of data-transmission activity
that are well suited for multiple address satellite and terrestrial radio
systems.  "Asymmetrical" and one-way data movement, common in Internet usage,
create patterns that take advantage of radio's bandwidth-on-demand
capabilities.  The Company's present position as a radio-based bandwidth
solutions provider is solid, and the Company anticipates strong long-term
market need for both existing and new radio-based bandwidth solutions in the
future.  Those solutions will address Internet usage, digital TV, remote data
collection, new mobile air, sea, and terrestrial systems, as well as a host of
commercial data transmission applications for financial networks and inventory
management systems.

         Market Leaders.  The Company's six continuing divisions concentrate on
satellite communications, information collection and communications, and radio
products.  In each category, the Company holds a leading market share, meeting
customers' special needs with application-specific products.  These market
positions provide a strong base from which to grow and improve profitability.
The Company expects that each division can deepen and broaden the niches they
are serving.

         Value-Focused Operations.  The Company is currently implementing
near-term managerial and operational adjustments to strengthen financial
performance.  The internal focus includes the following operational issues:
shortening the product development cycle; eliminating redundant products with
low customer demand; completing fault-tolerant software applications; reducing
inventories; and filling market needs adjacent to current niches.  These issues
are all part of developing internal processes that will result in high customer
satisfaction.

         Integrated Independence.  California Microwave's divisions have,
historically, been highly decentralized.  This organizational structure has
allowed each division to be responsive to particular markets and customers.
Each division typically maintains its own sales, marketing, product development
and manufacturing functions.  The Company is shifting from that model to one of
"integrated independence," where the divisions will have more strategic value
to one another, sharing critical resources and cooperatively pursuing common
markets.  Each of the division presidents now reports directly to the chief
executive officer and is part of the corporate executive team.  The executive
team will constantly examine a multitude of cross-divisional opportunities
relating to sales, joint product development and operational improvements.  The
team is also at work on the long-term, integrated California Microwave strategy.




                                      -4-
<PAGE>   6

         International Expansion.  The Company's products are marketed on a
worldwide basis.  International sales represented approximately 29% of total
sales in the fiscal year ended June 30, 1997.  The Company believes that a
majority of its sales growth in future years will come from the international
sector due to communications infrastructure requirements in developing
countries and the growing worldwide need for radio-based bandwidth solutions.

         Leveraging Divisional Technology.  The Company's products employ both
analog and digital applications of radio frequency technologies, enhanced by
digital signal processing and appropriate networking software.  A key objective
of the executive team is to leverage, on a company-wide basis, divisional
technology and  management strengths to address large emerging market
opportunities, especially in Asia and Latin America.  There will also be
increased emphasis on ad hoc interdivisional team collaboration to resolve
technical issues in order to get products to market faster.

         Products and Markets.  The Company's sales are summarized below:

<TABLE>
<CAPTION>
                                                                                            Fiscal Year Ended June 30,
                                                                                          1997        1996      1995
                                                                                        --------   --------   --------
                                                                                             (dollars in millions)
           <S>                                                                         <C>        <C>        <C>
            Sales by Product Class:
                 Satellite communications .........................................     $   85.7   $   91.5   $   79.8
                 Radio products ...................................................         76.9       69.8       70.8
                 Information collection and communications ........................         91.6       78.7       65.8
                                                                                        ------------------------------
                     Total ........................................................     $  254.2   $  240.0   $  216.4
                                                                                        ==============================
            
            Sales by Market Sector:
                 International ....................................................     $   72.9   $   72.7   $   59.4
                 U.S. commercial ..................................................         75.6       72.2       65.5
                 U.S. government ..................................................        105.7       95.1       91.5
                                                                                        ------------------------------
                     Total ........................................................     $  254.2   $  240.0   $  216.4
                                                                                        ==============================
            
</TABLE>


SATELLITE COMMUNICATIONS

         California Microwave is a leader in the design of satellite earth
station products, such as modems and frequency converters, which are
incorporated into earth stations.  The Company's line of digital and analog
earth station equipment provides point-to-point and point-to-multipoint 
transmission of voice, data, facsimile and video.

         Satellite Earth Station Products.  Through its EFData division,
California Microwave manufactures a broad line of electronic products used in
earth stations.  The products are sold to earth station suppliers and to
operators of communication networks to upgrade existing earth stations.  EFData
is a leading producer of high speed (up to 155 million bits per second) digital
modems, RF transceivers and frequency converters used in satellite
communications networks.  Since 1988, EFData has delivered more than 50,000
satellite modems, RF transceivers and frequency converters for use in INTELSAT
systems, satellite backup facilities for undersea fiber optic cable, digital
video and for many private network applications.  EFData also manufactures a
completely self-contained earth station electronics package for low-cost rural
and infrastructure networks.

         Satellite Teleport Services.  The Company, through its Services
division, provides both data broadcast and interactive data, video, fax, voice
and internet access services to corporations and government agencies worldwide.
Services division also provides satellite ground equipment to teleport
customers.





                                      -5-
<PAGE>   7

         Turnkey Satellite Earth Stations.  The Company, through its Government
Communications Systems operation, manufactures, integrates and installs
mobile, portable and fixed satellite transmit/receive earth stations for U.S.
government applications worldwide.

                 The Company's principal satellite communications products are
summarized in the following table:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                              SATELLITE COMMUNICATIONS
------------------------------------------------------------------------------------------------------------------
                                                              TYPICAL                 SELECTED CUSTOMERS
       PRODUCTS                   APPLICATION               PRICE RANGE                  OR END USERS
------------------------------------------------------------------------------------------------------------------
  <S>                   <C>                             <C>                <C>
  C and Ku-band         C- and Ku-band RF terminals in          $10,000    Hughes Network Systems, MCI, Globecomm,
  Transceivers          power levels up to 400 watts for    to $100,000    IDB Communications, Impsat, Embratel,
                        antenna-mounted applications                       U.S. Government, governments of India
                                                                           and China
------------------------------------------------------------------------------------------------------------------
  High Speed Modems     For connecting telecommunication         $5,000    AT&T, GTE, MCI, Sprint, British
  4.8Kbps to 155Mbps    lines to international satellite     to $80,000    Telecom, PBS, CBS, Impsat SA, and
                        networks; optical fiber backup;                    Embratel
                        broadband data; digital video;
                        and private networks
------------------------------------------------------------------------------------------------------------------
  C and Ku-band         Key components in earth stations         $8,000    AT&T, MCI, Telefonica (Spain), U.S.
  Frequency             for converting satellite             to $70,000    Government, Communications Authority of
  Converters            frequencies                                        Thailand, Singapore Telecommunications,
                                                                           Entel (Chile)
------------------------------------------------------------------------------------------------------------------
  DAMA Network          Bandwidth on demand, automatic    Networks from    Globecomm, El Marine, Pinzone
  Products              circuit restoral, ISDN on              $200,000
                        demand, business and medical     to $10,000,000
                        video teleconferencing
------------------------------------------------------------------------------------------------------------------
  Monitor and           PC-based color graphics monitor          $5,000    COMSAT, government of China,
  Control Systems       and control system for networks      to $95,000    Telefonica, Impsat S.A.
                        and earth stations
------------------------------------------------------------------------------------------------------------------
  Networks              Provides voice, data, video and      $1,000,000    SALNET and Worldcomm
                        facsimile services for            to $5,000,000
                        corporations, telephone
                        companies and governments
                        domestically
------------------------------------------------------------------------------------------------------------------
  Very Small            Transmits data used by                   $2,000    Sprint, SkyTel, NYSE, National Weather
  Aperture Terminals    retailers, car dealers, hotels,   to $2,000,000    Service, Xinhua News Agency (China),
  ("VSAT") and Hubs     news agencies, financial                           EFE (Spain)
                        quotation services, and weather
                        tracking services in VSAT
                        networks
------------------------------------------------------------------------------------------------------------------
  Turnkey Earth         Manufactures, integrates and           $500,000    U.S. Government
  Stations              installs mobile, portable and     to $5,000,000
                        fixed transmit/receive earth
                        stations (2-18 meter antenna)
------------------------------------------------------------------------------------------------------------------
</TABLE>



RADIO

         California Microwave designs, manufactures and markets digital and
analog microwave radios and other equipment used in land-based point-to-point
and point-to-multipoint communications links.  The Company is a leading
manufacturer of microwave radios for private voice and data communications
networks and portable electronic news gathering and broadcasting
studio-to-transmitter links.  The Company believes that wireless is one of the
fastest growing areas of the telecommunications industry due to technological
advances, regulatory initiatives and the expanding requirements for
connectivity between people and computers and other electronic devices.





                                      -6-
<PAGE>   8
         Television Broadcast.  The Company's MRC division is a leading
supplier of microwave radios to U.S. and international broadcast and
cable television markets for use principally in portable electronic news
gathering and analog and digital studio-to-transmitter applications.

         Wireless Data Networking.  The Company, through its MDS division,
manufactures point-to-point and point-to-multipoint microwave data radios.  MDS
point-to-point radios are used to extend the reach of a communications system
in areas where low capacity, multi-channel voice or data communications links
are required.  Point-to-multipoint radio systems are used principally to
connect central computers to remote computer terminals or to physical
measurement and control devices.  Typical applications include remote
monitoring and automated operation of oil and gas production and distribution,
water-wastewater treatment systems, and control of electric utility power
generation facilities.  Over 150,000 MDS data radios have been sold since MDS
commenced the sale of radios in 1986.

         The Company's principal wireless products are summarized in the
following table:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                WIRELESS
-----------------------------------------------------------------------------------------------------------
                                                             TYPICAL            SELECTED CUSTOMERS
         PRODUCTS                 APPLICATION              PRICE RANGE             OR END USERS
-----------------------------------------------------------------------------------------------------------
  <S>                        <C>                           <C>                <C>
-----------------------------------------------------------------------------------------------------------
  Television Broadcast
-----------------------------------------------------------------------------------------------------------
  Analog radios (portable)   Electronic news gathering;    $8,000 to          ABC, CBS, NBC, CNN, FOX,
  (2-40 GHz)                 electronic field              $20,000            C-SPAN
                             production
                                                           
  Analog/digital radios      Studio-to-transmitter         $18,000 to         PBS and major domestic 
  (2-23 GHz)                 links, regional networks      $100,000           television networks and major
                                                                              broadcast group ownership
-----------------------------------------------------------------------------------------------------------
  Wireless Data Networking
-----------------------------------------------------------------------------------------------------------
  Analog and digital data    Point-to-point and            $1,000 to          Mobil, Phillips Petroleum,
  radios (450 and 900 MHz)   point-to-multipoint,          $10,000            Florida Power & Light, PG&E,
                             remote monitoring, data                          Georgia Power, El Paso Gas,
                             collection                                       Amoco, China National
                                                                              Petroleum Corporation, Gtech
                                                                              Corporation
-----------------------------------------------------------------------------------------------------------
</TABLE>

INFORMATION COLLECTION AND COMMUNICATIONS SYSTEMS

         The Company participates in selected areas of the U.S. government
market which are closely related to the Company's commercial technological and
product base.  In recent years, as U.S. defense spending has declined, the
Company has competed effectively by offering adaptations of its technologies
and commercially available "off-the-shelf" products to stable and growing
segments of the Department of Defense market at significantly less cost than
would be the case under military specification procurement procedures.  The
Company integrates electronic and electro-optical systems for both airborne and
ground-based applications.  These systems collect, process and disseminate
intelligence and reconnaissance information using advanced radio communications
hardware and both special-purpose and off-the-shelf computers and software.
The Company maintains and upgrades these systems throughout their useful lives,
which can be a decade or more.  The Company has developed a series of products
with secure, portable, ruggedized suitcase-sized packaging that incorporate key
intelligence information collection, processing, analysis and communications
capabilities contained in its larger systems.  A principal capability of the
Company is in the area of military communications, for which a variety of
communication systems have been developed and sold to U.S. military customers.
The company has recently been awarded a key contract on the new generation U.S.
Government DMS (Defense Message System) program.





                                      -7-
<PAGE>   9

         The Company also designs and develops state-of-the-art multisensor
imaging systems and sophisticated electronic intelligence collection systems
which it integrates into inexpensive commercial aircraft.  In fiscal 1991, the
Company received its initial prime contract for the U.S.  Army's Air
Reconnaissance Low ("ARL") program.  The ARL program employs both imagery and
signal intelligence sensors mounted on deHavilland-7 aircraft.  These sensors
collect information which can be immediately transmitted to designated
receiving locations.  The ARL aircraft can be rapidly deployed anywhere in the
world.  The Company completed its initial ARL contracts and made final delivery
of the first aircraft to the Army in 1993.  The Company has received
significant follow-on ARL contracts involving additional aircraft and sensors.

         In early 1993, the Company introduced its new airborne intercept and
direction finding and geo-location system.  The Company believes that this
system locates signals from over a wide range of frequencies more rapidly and
accurately than do other systems.

         The Company's intelligence projects typically involve multi-year,
multi-million dollar contracts.  In addition, the Company sells subsystems and
other equipment to U.S. government agencies on a short-term delivery basis. The
Company is actively pursuing opportunities to introduce its data collection and
communications networking technology to foreign governments and non-governmental
applications. The price of a project depends on a number of factors, including
the amount of development involved, quantities ordered, maintenance requirements
and whether an aircraft is to be modified and supplied by the Company in
connection with the contract.

SALES, MARKETING AND CUSTOMER SUPPORT

         California Microwave directs its sales and marketing efforts toward
major users of its systems and products through a well established
international distribution network.  The sales and marketing strategy of the
Company varies with the particular market served and involves direct sales by
the Company's own sales force, sales through representatives, value-added
resellers, or a combination of the foregoing.  The Company also has entered
into sales distribution agreements with respect to certain of its satellite
communications and wireless products.

         The Company considers its ability to create and maintain long-term
customer relationships an important component of its overall strategy in each
of its markets.  Relationships with customers are established and maintained by
the Company's divisional area managers and their technical and marketing
staffs.  The Company's strategy also includes its commitment to provide ongoing
customer support for its systems and products.  This support involves providing
direct access to the Company's engineering staff or trained technical
representatives located throughout the world to resolve technical or
operational problems.  The Company intends to continue to expand its marketing
efforts and distribution channels worldwide.

MANUFACTURING

         Manufacturing operations consist principally of assembly and testing
of electronic systems built from fabricated parts, printed circuits and
electronic components.  Both manual and various automated methods are employed,
depending primarily upon production volume.  The Company employs formal Total
Quality Management programs and other training programs, and each of its five
product divisions have qualified for International Standards Organization
("ISO") quality procedure registration to ISO 9001, a standard sometimes imposed
by foreign buyers.

         Electronic components and raw materials used in the Company's products
are generally obtained from a large number of suppliers.  Some components are
standard items and others are manufactured to the Company's specifications by
subcontractors.  The Company obtains certain components and subsystems from a
single, or a limited number of, sources.  The Company operates without a
substantial inventory of components and subsystems but believes that most
components and subsystems are available from existing or alternative suppliers
and subcontractors.  A significant interruption in the delivery of such items
could have a material adverse effect on the Company's results of operations.





                                      -8-
<PAGE>   10


COMPETITION

         California Microwave is engaged in a highly competitive business and
the number of potential customers for the Company's products is limited.  Many
of the Company's competitors have significantly greater financial, marketing
and operating resources than the Company.  In addition, certain of the
Company's customers have technological capabilities in the Company's product
areas and could choose to replace the Company's products with their own.  The
Company's major competitors by product area include:  NEC, Alcatel Telespace,
ComStream, SSE-Telecom, and Raydyne--satellite communications; Continental
Microwave, MAS Technologies and Motorola--radio products; TRW Inc., Lockheed
Martin Corporation, Sterling Software, Inc. and E-Systems, Inc.--information
collection and communications systems.

         The Company believes that competition in its markets is based
primarily on price, performance, reputation, on-time delivery, reliability and
customer support.  The Company believes that it has the ability to develop and
produce satellite and radio products faster than many of its competitors.  In
the information collection and communications area, the Company believes that
it has the ability to solve customers' problems with proprietary solutions and
to offer cost-effective approaches using commercially available products.  In
the information collection and communications area, the company believes that
an additional key competitive factor is the in-depth technical expertise which
enables the solution of loosely defined customer problems by application of
the correct proprietary or commercially available solutions.

RESEARCH AND DEVELOPMENT

         Research and development expenses were $18.2 million, $16.6 million
and $13.2 million in fiscal 1997, 1996 and 1995, respectively, representing
7.2%, 6.9% and 6.1% of total sales, respectively, for the same periods.
Approximately 90% of the research and development expense in each year
represented investment in new radio and satellite products and associated
software.  The Company expects that research and development expense as a
percentage of sales will remain in the 7% of sales range as it focuses its
efforts on developing the products that will provide unique radio-based
solutions to the growing shortage of bandwidth for digital data and digital
video.

PATENTS AND LICENSES

         Due to the rapidly changing nature of technology in the Company's
business, patents and licenses have been of substantially less significance in
the Company's business than have been the timely application of its technology
and the design, development and marketing capabilities of its personnel.

EMPLOYEES

         At June 30, 1997, California Microwave had 1,412 employees, 673 of
whom were engaged in production and production support, 453 in research and
development and other engineering support, 156 in marketing and 130 in general
and administration functions.  None of the employees is represented by a labor
union.  The Company believes that its employee relations are good.





                                      -9-
<PAGE>   11

REGULATION

         Radio communications, including satellite communications, are subject
to regulation by United States and foreign laws and international treaty.  The
Company's equipment must conform to domestic and international requirements
established to avoid interference among users of microwave frequencies and to
permit interconnection of equipment.

         The use of microwave signals depends upon the availability of
frequencies that permit interference-free operation.  In many developed
countries, the unavailability of frequency spectrum has historically inhibited
the growth of microwave systems.  However, two factors are alleviating this
problem.  First, the proliferation of fiber optics for high capacity systems
has reduced the demand for microwave frequencies for such systems, thus freeing
up frequency spectrum for new types of services.  Second, many government
regulatory agencies are reallocating frequencies from one type of use to
another, thus providing incentive for new communications services.

BACKLOG

         At June 30, 1997, the Company's backlog of undelivered orders was
$91.1 million (approximately 95% of which is expected to be delivered during
fiscal 1998) compared with $97.1 million at June 30, 1996.  In the Company's
experience, its backlog at any given time is not necessarily indicative of
prospective period revenues.  The Company generally records an order in backlog
when the Company receives a firm contract or purchase order which identifies
product quantities and delivery dates, and in the case of government contracts,
when such contracts have been funded by the government.  While from time to
time a substantial portion of the Company's backlog has been comprised of large
orders, the cancellation of any of which could have a material adverse effect
on the Company's operating results, the Company historically has not
experienced significant changes in its backlog from cancellations or revisions
of orders.


ITEM 2.  PROPERTIES

         The table below describes the location and general character of the
principal plants and materially important physical properties that are owned or
leased by the Company and its subsidiaries as of June 30, 1997:












                                      -10-
<PAGE>   12
<TABLE>
<CAPTION>
                                                   Lease       No. of       Square
            Occupant                              Expires     Buildings    Footage     Location
-----------------------------------------------------------------------------------------------------------
      <S>                                         <C>            <C>       <C>       <C>
       1.   Corporate Headquarters                 2000           1         16,800    Redwood City, CA

       2.   Services Division                      1999           1         20,000    Mountain View, CA
                                                   2000           1         40,000    Sunnyvale, CA

       3.   Government Electronics Division        1998           2         28,490    Woodland Hills, CA
                                                   1999           1         29,260    Woodland Hills, CA
                                                   1998           2          2,836    Stafford, VA

       4.   Airborne Systems Integration           1998           1        100,200    Hagerstown, MD
            Division                               1999           1         45,000    Belcamp, MD
                                                   1998           1         18,203    Baltimore, MD

       5.   EFData Corporation                     2006           2        115,000    Tempe, AZ

       6.   Microwave Data Systems                (owned)         1         56,060    Rochester, NY

       7.   Microwave Radio Communications         1997           1         71,500    Chelmsford, MA

       8.   Government Communications              1996           1         15,000    Annapolis Junction, MD
            Systems

       9.   Government Group                       1997           1          1,750    Arlington, VA

       Discontinued Operations
       -----------------------

       10.  Satellite Transmission Systems        (owned)         2         90,000    Hauppauge, NY
                                                   1997           1         11,700    Hauppauge, NY

       11.  Microwave Networks Systems           1998-2001        3         64,000    Houston, TX*
                                                 2000-2006        2          5,200    High Wycombe, UK
                                                   2000           1         36,704    Chelmsford, MA*
                                                   2002           1        164,600    Stafford, TX
                                                   2006           1         50,000    Glendale Heights, IL*
                                                   2009           1        107,048    Bloomingdale, IL*
                                                  Monthly         1          1,650    Atlanta, GA
</TABLE>


      * Liabilities provided for in restructure charges.


         The Company believes that its facilities are adequate for its present
needs.

ITEM 3.  LEGAL PROCEEDINGS

         On November 9, 1995, and December 12, 1995, putative class action
lawsuits entitled Rick Fairchild v. California Microwave, Inc. et al.  and Mark
E. McKinney v. California Microwave, Inc. et al. were filed in the United
States District Court for the Northern District of California.  The plaintiffs
in these two cases, which have been consolidated, purport to represent a class
of all persons who purchased common stock of California Microwave, Inc. (the
"Company") between September 6, 1994, and June 29, 1995 (the "Class Period").
Named as defendants are the Company and certain of its former executive
officers.  The complaints allege that defendants violated various federal
securities laws through material misrepresentations and omissions during the
Class Period. Defendants filed motions to dismiss the complaints, which the
court granted on April 19, 1996, with leave to amend.  Plaintiffs filed an
amended complaint; in August, 1996, defendants filed a motion to dismiss those
complaints and the motion was denied.  California Microwave, Inc. believes that
it has meritorious defenses to the claims alleged in these lawsuits and intends
to defend the actions vigorously.





                                      -11-
<PAGE>   13

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 4A.         EXECUTIVE OFFICERS OF THE REGISTRANT

         The names and ages of all executive officers of the Company, and all
positions with the Company held by such persons, are as follows:

<TABLE>
<CAPTION>
Name                               Age      Position
----                               ---      --------
<S>                                <C>      <C>
Frederick D. Lawrence              49       Chairman of the Board, President and Chief Executive Officer

Leon F. Blachowicz                 57       Executive Vice President-Operations

George L. Spillane                 63       Vice President, Chief Financial Officer and Secretary

Michael L. Foster                  51       Vice President and Treasurer
</TABLE>

         Frederick D. Lawrence joined the Company as Chairman of the Board,
President and Chief Executive Officer in July 1997.  From May 1996 to July,
1997, Mr. Lawrence served as Chief Executive Officer of ComStream, Inc., an
international supplier of satellite communications networks and products and
from February 1994 to April 1996, he served as President of the Transmission
Group for ADC Telecommunications, which included five independent business
units producing products for high speed video, voice, data and wireless
communications.  From 1982 to 1994, Mr. Lawrence held executive positions in
networks operations and engineering at Sprint Corporation and its operating
companies, dealing in local telephone, cellular and long distance.  Prior to
this, Mr. Lawrence worked at AT&T from 1970 to 1982 in a variety of positions.
He holds a BSEE degree from Western Michigan University.

         Leon F. Blachowicz joined the Company in January 1995 as President of
the Satellite Communications Group, became President of the combined Wireless
and Satellite Communications Group in March 1996, and became Executive Vice
President-Operations in September, 1997.  From 1989 to January 1995 he was Vice
President/General Manager of Varian's Microwave Equipment Products division.
Prior to 1989 he was Vice President of the Business Communications System
Division of Harris Corporation for the last three of his 20 years at Harris
Corporation.  He holds a BSEE and an MSEE from the University of Florida.

         George L. Spillane became Vice President-Finance and Chief Financial
Officer of the Company in November 1980 and Secretary of the Company in October
1981.  When Garrett E. Pierce became Chief Financial Officer in April 1994, Mr.
Spillane's title was changed to Vice President and Secretary and when Mr.
Pierce resigned in January 1996 Mr. Spillane served as Chief Financial Officer
until Dennis R. Raney joined the Company in May 1996.  When Mr. Raney resigned
as Chief Financial Officer in February 1997, Mr. Spillane again became Chief
Financial Officer.  From 1975 to March 1980, Mr. Spillane was Treasurer of
Farinon Corporation (now a part of Harris Corporation).  Prior thereto, Mr.
Spillane was employed by Arthur Andersen & Co.





                                      -12-
<PAGE>   14
         Michael L. Foster became a Vice President of the Company in October
1990.  Mr. Foster joined California Microwave in 1979 as Manager- Corporate
Planning, was promoted to Director-Finance and Planning in 1980 and to Staff
Vice President in 1983.  Prior thereto, Mr. Foster was with Watkins Johnson,
where he held the position of financial manager for one of the systems
divisions.  Mr. Foster holds a BA and MBA from Stanford University.


                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

         The stock and stock price information on page 32 of California 
Microwave's 1997 Annual Report to Stockholders is incorporated herein by
reference.

ITEM 6.  SELECTED FINANCIAL DATA

         The selected financial data on page 31 of California Microwave's 1997
Annual Report to Stockholders is incorporated herein by reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

         The management's discussion and analysis of financial condition and
results of operations on pages 27 through 30 of California Microwave's 1997
Annual Report to Stockholders is incorporated herein by reference.  For factors
affecting any forward-looking statements contained in such discussion and
analysis, see "Business - Information Regarding Forward Looking Statements" in
Item 1 of Part 1 of this Form 10-K Annual Report.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements on pages 14 through 25, and the
financial results by fiscal quarter information on page 32, of California
Microwave's 1997 Annual Report to Stockholders are incorporated herein by
reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         None.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          The information relating to directors of California Microwave
required to be furnished pursuant to this item is incorporated by reference
from portions of the Company's definitive Proxy Statement for its annual
meeting of shareholders to be filed with the Securities and Exchange Commission
pursuant to Regulation 14A within 120 days after June 30, 1997 (the "Proxy
Statement") under the caption "Election of Directors."  Certain information
relating to executive officers of the Company is set forth in Item 4A of Part I
of this Form 10-K under the caption "Executive Officers of the Registrant."





                                      -13-
<PAGE>   15

ITEM 11.  EXECUTIVE COMPENSATION

          Incorporated by reference from portions of the Proxy Statement under
the caption "Compensation of Directors and Executive Officers."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
          CALIFORNIA MICROWAVE, INC.

          Incorporated by reference from portions of the Proxy Statement under
the captions "Certain Shareholders" and "Compensation of Directors and
Executive Officers."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          None.


                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)     1.       FINANCIAL STATEMENTS

                 Included in Part II of this report by incorporation by
                 reference from the California Microwave 1997 Annual Report to
                 Stockholders

                 Report of Ernst & Young LLP, Independent Auditors (page 26 of
                 1997 Annual Report to Stockholders)

                 Consolidated statements of income for each of the three years
                 in the period ended June 30, 1997 (page 14 of 1997 Annual
                 Report to Stockholders)

                 Consolidated balance sheets as of June 30, 1997 and 1996 (page
                 15 of 1997 Annual Report to Stockholders)
     
                 Consolidated statements of stockholders' equity for each of
                 the three years in the period ended June 30, 1997 (page 16 of
                 1997 Annual Report to Stockholders)

                 Consolidated statements of cash flows for each of the three
                 years in the period ended June 30, 1997 (page 17 of 1997
                 Annual Report to Stockholders)

                 Notes to Consolidated Financial Statements (pages 18 through
                 25 of 1997 Annual Report to Stockholders)

With the exception of the information incorporated by reference into Items 5,
6, 7 and 8 of this Form 10-K, the California Microwave 1997 Annual Report to
Stockholders is not deemed filed as part of this report.





                                      -14-
<PAGE>   16
         (a) 2.  FINANCIAL STATEMENT SCHEDULES

         Included in Part IV of this report:

         Schedules for the three years ended June 30, 1997 Schedule II --
Valuation and Qualifying Accounts

         All other schedules are omitted because they are not required, or are
not applicable, or the information is included in the consolidated financial
statements or notes to consolidated financial statements.

         (A) 3.  EXHIBITS

         3.1     Restated Certificate of Incorporation.  (Exhibit to the
                 Company's Form 8 dated February 19, 1993, constituting
                 Amendment No. 1 to the Company's Registration Statement on
                 Form 8-A for the Common Stock; incorporated herein by
                 reference.)

         3.2     Bylaws.  (Exhibit to the Company's Form 10-K for its fiscal
                 year ended June 30, 1994; incorporated by reference herein.)

         4.1     Indenture of Trust, amended, as relating to 1987 Industrial
                 Development Revenue Refunding Bonds of Satellite Transmission
                 Systems, Inc.*

         4.2     Reimbursement Agreement between Satellite Transmission
                 Systems, Inc. and The Bank of Tokyo, Ltd., San Francisco
                 Agency, relating to Satellite Transmission Systems, Inc.
                 Indenture.*

         4.3     Guarantee of California Microwave, Inc. in favor of The Bank
                 of Tokyo, Ltd., San Francisco Agency, relating to Satellite
                 Transmission Systems, Inc. Indenture.*

         4.4     Rights Agreement, dated July 27, 1989.  (Exhibit to the
                 Company's Form 8-A filed on August 2, 1989; incorporated
                 herein by reference.)

         4.5     Master Indenture of Trust (First Program), relating to County
                 of Monroe Industrial Development Bonds.*

         4.6     Series F Supplemental Indenture, dated as of June 1, 1992,
                 relating to $2,800,000 of County of Monroe Industrial
                 Development Bonds.*

         4.7     Guaranty of California Microwave, Inc. in favor of Security
                 Pacific National Trust Company (New York), as Trustee, dated
                 as of June 1, 1992, relating to $2,800,000 of County of Monroe
                 Industrial Development Bonds.*

         4.8     Letter of Credit Reimbursement Agreement, between California
                 Microwave, Inc. and Marine Midland Bank, N.A., dated as of
                 June 1, 1992, relating to $2,800,000 of County of Monroe
                 Industrial Development Bonds.*

        10.1     Employee Stock Purchase Plan, as amended through September
                 1996.**





_______________________

     *Registrant agrees to file such exhibits upon request by the Commission.
    **Compensatory plan or arrangement.

                                      -15-
<PAGE>   17

         10.2    Lease dated March 10, 1977, of the premises at 990 Almanor
                 Avenue in Sunnyvale, California.  (Exhibit for the Company's
                 Form 10-K for its fiscal year ended June 30, 1994;
                 incorporated herein by reference.)

         10.3    1986 Stock Option Plan, as amended.**  (Exhibit to the
                 Company's Form 10-K for its fiscal year ended June 30, 1991;
                 incorporated herein by reference.)

         10.4    1988 Restricted Stock Plan.**  (Exhibit to the Company's Form
                 10-K for its fiscal year ended June 30, 1994; incorporated
                 herein by reference.)

         10.5    Lease of the property located at 2105 West Fifth, Tempe,
                 Arizona.  (Exhibit to the Company's Form 10-K for its fiscal
                 year ended June 30, 1991; incorporated herein by reference.)

         10.6    Lease of the premises located at 20 Alpha Road, Chelmsford,
                 MA.  (Exhibit to the Company's Form 10-K for the fiscal year
                 ended June 30, 1992; incorporated herein by reference.)

         10.7    Letter agreement with Philip F. Otto** dated September 22,
                 1992.  (Exhibit to the Company's Form 10-K for its fiscal year
                 ended June 30, 1992; incorporated herein by reference.)

         10.8    Amendment to letter agreement with Philip F. Otto**, dated
                 July 30, 1993.  (Exhibit to Company's Form 10-K for its fiscal
                 year ended June 30, 1993; incorporated herein by reference.)

         10.9    Lease of the property located at 55 Commerce Drive, Hauppauge,
                 N.Y.  (Exhibit to this Company's Form 10-K for its fiscal year
                 ended June 30, 1993; incorporated herein by reference).

         10.10   Shareholders' Agreement among California Microwave, Inc.,
                 Cornix Systems, Harry F. Eustace, Barbara Eustace, Garber
                 International Associates and Dr. F.V. Garber, dated March 8,
                 1994.  (Exhibit to the Company's Form 10-K for its fiscal year
                 ended June 30, 1994; incorporated herein by reference.)

         10.11   Amendment to letter agreement with Philip F. Otto**, dated
                 August 15, 1994.  (Exhibit to the Company's Form 10-K for its
                 fiscal year ended June 30, 1994; incorporated herein by
                 reference.)

         10.12   Letter Agreement with Leon F. Blachowicz, dated December 2,
                 1994.** (Exhibit to the Company's Form 10-K for its fiscal
                 year ended June 30, 1995; incorporated herein by reference).

         10.13   Lease of premises located at 2114 West 7th Street, Tempe,
                 Arizona.  (Exhibit to the Company's Form 10-K for the fiscal
                 year ended June 30, 1996; incorporated herein by this
                 reference.)





_______________________

     **Compensatory plan or arrangement.



                                      -16-
<PAGE>   18

         10.14   Lease of premises known as Top Flight Airport on Showalter
                 Road, Washington County, Maryland.  (Exhibit to the Company's
                 Form 10-K for its fiscal year ended June 30, 1996;
                 incorporated herein by this reference.)

         10.15   Lease of premises located at 4000 Greenbriar, Stafford, Texas.
                 (Exhibit to the Company's Form 10-K for its fiscal year ended
                 June 30, 1996; incorporated herein by this reference.)

         10.16   Lease of premises located at 175 West Wall Street, Glendale
                 Heights, Illinois.  (Exhibit to the Company's Form 10-K for
                 its fiscal year ended June 30, 1996; incorporated herein by
                 this reference.)

         10.17   1992 Stock Option Plan, as amended.

         10.18   Stock Repurchase Agreement among California Microwave, Inc.,
                 California Microwave Navigation System, Inc., Harry F.
                 Eustace, Barbara Eustace, Garber International Associates and
                 Dr. F.V. Garber, dated March 7, 1996.

         10.19   Loan and Security Agreement among BANKAMERICA Business Credit,
                 Inc., California Microwave, Inc. and EF Data Corp, dated as of
                 June 30, 1997.

         10.20   Amendment to letter agreement with Philip F. Otto**, dated
                 January 10, 1997.

         10.21   Letter Agreement with Frederick D. Lawrence**, dated July 16,
                 1997.

         10.22   Form of Severance Agreement with Leon F. Blachowitz, George L.
                 Spillane, and Michael L. Foster**, dated March 20, 1997

         10.23   Letter Agreement with Gilbert F. Johnson**, dated March 18, 
                 1997.
                        
         11      Computation of Per Share Earnings.

         13      Annual Report to Stockholders (pages incorporated by 
                 reference).

         21      List of Subsidiaries.

         23      Consent of Ernst & Young LLP, Independent Auditors.

         24      Powers of Attorney.

         27      Financial Data Schedule.

         Exhibits are available from the Registrant upon request.

         (b)     REPORTS ON FORM 8-K

                 The following reports on Form 8-K were filed during the last
fiscal quarter of fiscal 1997:

                 Form 8-K filed on June 20, 1997, announcing under Item 5 the
decision to sell the Satellite Transmission Systems and Microwave Networks
business units.





_______________________

     **Compensatory plan or arrangement.


                                      -17-
<PAGE>   19
                                   SIGNATURES

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

Dated:  September 26, 1997                 CALIFORNIA MICROWAVE, INC.


                                            By  /s/ FREDERICK D. LAWRENCE
                                              --------------------------------
                                               Frederick D. Lawrence
                                               Chairman, President and
                                               Chief Executive Officer


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

<TABLE>
<S>                                           <C>                                             <C>
/s/ FREDERICK D. LAWRENCE                     Executive Officer (principal executive
---------------------------------             officer)
FREDERICK D. LAWRENCE                         
                                              

/s/ GEORGE L. SPILLANE                        Vice President and Chief                        September 26, 1997
---------------------------------             Financial Officer (principal financial
GEORGE L. SPILLANE                            and accounting officer)

/s/ DAVID B. LEESON*                          Director                                        September 26, 1997
---------------------------------
DAVID B. LEESON

/s/ ARTHUR H. HAUSMAN*                        Director                                        September 26, 1997
---------------------------------
ARTHUR H. HAUSMAN

/s/ EDWARD E. DAVID, JR.*                     Director                                        September 26, 1997
---------------------------------
EDWARD E. DAVID, JR.

/s/ ALFRED M. GRAY*                           Director                                        September 26, 1997
---------------------------------
ALFRED M. GRAY

/s/ WILLIAM B. MARX, JR.*                     Director                                        September 26, 1997
---------------------------------
WILLIAM B. MARX, JR.

/s/ TERRY W. WARD*                            Director                                        September 26, 1997
---------------------------------
TERRY W. WARD

/s/ FREDERICK W. WHITRIDGE, JR.*              Director                                        September 26, 1997
---------------------------------
FREDERICK W. WHITRIDGE, JR.

*By /s/ GEORGE L. SPILLANE
---------------------------------
      Attorney-in-fact
</TABLE>





                                      -18-
<PAGE>   20
                           CALIFORNIA MICROWAVE, INC.

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                    YEARS ENDED JUNE 30, 1997, 1996 AND 1995
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                              Balance at    Additions     Other(1)                     Balance
                                              beginning      charged      additions                     at end
                                                of year     to income    (transfers)   Deductions       of year
                                             -----------    ---------    -----------   ----------      --------
 <S>                                           <C>          <C>          <C>           <C>             <C>
 1997
 ----
 Allowance for doubtful accounts ...........     $   798     $   465       $           $  320    $   943
 Estimated liability for warranties ........       1,084       3,780                    3,023      1,841
 Allowance for excess facilities ...........       2,876                   5,520        1,305      7,091
 Estimated liability for contract costs ....       3,252         734                    2,419      1,567
 Estimated loss on disposal of discontinued
 operations ................................                              12,538                  12,538

 1996
 -------
 Allowance for doubtful accounts ...........         806         177                      185        798
 Estimated liability for warranties ........         962       2,261                    2,139      1,084
 Allowance for excess facilities ...........       3,930                                1,054      2,876
 Estimated liability for contract costs ....                               3,538          286      3,252

 1995
 -------
 Allowance for doubtful accounts ...........         694         179                       67        806
 Estimated liability for warranties ........         751       1,373                    1,162        962
 Allowance for excess facilities ...........       1,969         500       3,430        1,969      3,930
</TABLE>




(1) Balance sheet transfers from discontinued operations.





                                      -19-


<PAGE>   21

                               INDEX OF EXHIBITS


     Number      Description


     10.17     1992 Stock Option Plan, as amended.

     10.18     Stock Repurchase Agreement among California Microwave, Inc.,
               California Microwave Navigation System, Inc., Harry F. Eustace,
               Barbara Eustace, Garber International Associates and Dr. F.V.
               Garber, dated March 7, 1997.

     10.19     Loan and Security Agreement among Bankamerica Business Credit,
               Inc., California Microwave, Inc. and EF Data Corp, dated as of
               June 30, 1997.

     10.20     Amendment to letter agreement with Philip F. Otto, dated January
               10, 1997.

     10.21     Letter Agreement with Frederick D. Lawrence, dated July 16, 1997.

     10.22     Form of Severance Agreement with Leon F. Blachowitz, George L.
               Spillane, and Michael L. Foster, dated March 20, 1997

     10.23     Letter Agreement with Gilbert F. Johnson, dated March 18, 
               1997.

     11        Computation of Per Share Earnings.

     13        Annual Report to Stockholders (pages incorporated by reference).

     21        List of Subsidiaries.

     23        Consent of Ernst & Young LLP, Independent Auditors.

     24        Powers of Attorney.

     27        Financial Data Schedule.