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                                                                   Exhibit 10.17


                           CALIFORNIA MICROWAVE, INC.

                               SEVERANCE AGREEMENT


THIS SEVERANCE AGREEMENT is entered into as of May 18, 1998 (the "Effective
Date"), between CALIFORNIA MICROWAVE, INC., a Delaware corporation ("CMI") and
Donna Birks (the "Employee").

                                     RECITAL

The Employee serves as CMI's Executive Vice President and Chief Financial
Officer. CMI and the Employee desire to set forth the terms of the Employee's
severance compensation if the Employee's employment is ended as a result of a
Change in Control. If a Change in Control occurs, the Employee and other key
employees may be more vulnerable to dismissal or other negative consequences
without regard to the quality of their past or prospective service. The Board of
Directors (the "Board") believes that it is in the best interest of CMI and its
stockholders to ensure fair treatment to CMI's key employees and to reduce the
adverse effects upon their performance that may be caused by an acquisition or
change in control.

The parties agree as follows:

1.   Definitions. For purposes of this Agreement, the following terms will
     have the meanings set forth below.

     1.1  A "Change in Control" will occur if (a) any person, as that term
          is used in Section 13(d) and 14(d)(2) of the Securities and Exchange
          Act of 1934 (the 'Exchange Act.), other than CMI, is or becomes the
          beneficial owner, as defined in Rule 13(d)(3) under the Exchange Act,
          directly or indirectly (including by holding securities which are
          exercisable for or convertible into shares of capital stock of CMI),
          of 30 percent or more of the combined voting power of the outstanding
          shares of capital stock of CMI entitled to vote generally in the
          election of directors (calculated as provided in Rule 13(d) under the
          Exchange Act in the case of rights to acquire capital stock), whether
          by means of a tender offer or exchange offer or open-market purchases
          or a combination thereof; (b) a Transaction is consummated; (c)
          Continuing Directors cease to constitute at least a majority of the
          Board: or (d)

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          a majority of the CMI's Outside Directors determine that a Change in
          Control has occurred. 

     1.2  "Continuing Directors" shall mean the directors of CMI in office on
          January 1, 1998 and any successor to any such director whose
          nomination or selection was approved by a majority of the Continuing
          Directors in office at the time of the director's nomination or
          selection and who is not an "affiliate" or "associate" (as defined in
          Regulation 12B under the Securities Exchange Act of 1934, as amended)
          of any person who is the beneficial owner, directly or indirectly, of
          securities representing ten percent (10%) or more of the combined
          voting power of CMI's outstanding securities then entitled ordinarily
          to vote for the election of directors. 

     1.3  "Disability" means that the Employee has met the qualifications for
          CMI's long-term disability benefit. 

     1.4  "Good Reason" includes any of the following:

          (a)  the assignment to the Employee of duties inconsistent with, or a
               substantial alteration in the nature or status of, the Employee's
               responsibilities immediately before a Change in Control;

          (b)  a reduction in the Employee's salary or other benefits as in
               effect on the date of a Change in Control;

          (c)  the Employee's relocation to a work site requiring an
               increase in one-way commute from Employee's residence of
               more than thirty-five (35) miles; or

          (d)  a breach by CMI of this Agreement if the breach has not been
               cured within 30 days after written notice by the Employee to
               CMI setting forth with specificity the nature of the breach.

     1.5  "Outside Director" is a member of CMI's Board of Directors who is not,
          and who during the past six months was not, an employee or officer of
          CMI.

     1.6  "Termination for Cause" is termination of the Employee's employment as
          a result of (a) the Employee's willful misconduct or

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          the Employee's dishonesty towards, fraud upon, crime against or
          deliberate or attempted injury or bad faith action with respect to
          CMI; or (b) the Employee's conviction for a felony (whether in
          connection with CMI's affairs or otherwise).

     1.7  "Termination Upon a Change in Control" is (a) termination by the
          Employee of his employment for Good Reason within one year after the
          occurrence of a Change in Control; or (b) declination by the Employee
          of an offer of employment from the buyer or the newly created entity
          for Good Reason at the time of a Change in Control if the Employee
          would not have been permitted to remain in his/her existing position
          following such declination; or (c) termination by CMI, the buyer or
          the newly created entity of the Employee's employment within one year
          after the occurrence of a Change in Control other than a Termination
          for Cause or a termination resulting from the Employee's death or
          Disability. The one-year period provided for herein shall be six
          months in the event a Change in Control arises out of a Transaction
          defined in Section 1.8 (c) hereof.

     1.8  "Transaction" is (a) a consolidation or merger of CMI if the
          shareholders of CMI immediately before the merger or consolidation do
          not immediately after the merger or consolidation own equity
          securities of the surviving or acquiring corporation or a parent party
          possessing 50% or more of the voting power of the surviving or
          acquiring corporation or parent party; (b) a sale, lease, exchange or
          other transfer (in one transaction or a series of related
          transactions) of 50 % or more of the assets of CMI; or (c) the sale or
          other disposition of business units within any 12-month period that
          contributed for that 12-month period more than 45% of CMI's revenues.
          The Transaction requirements defined in parts (b) and (c) above shall
          specifically exclude the sales of the Satellite Transmission Systems
          and Microwave Networks divisions and their associated assets, and the
          designated percentage thresholds (50% and 45%, respectively) shall be
          calculated without including these two divisions' assets or revenues
          in the base.

2.   Term. If no Change in Control has occurred, this Agreement will expire on
     December 17, 2000. If a Change in Control occurs prior to December 17,
     2000, this Agreement will continue in effect, and will not terminate, until
     either the Employee has received the severance compensation provided for
     below or has ceased to be eligible for such compensation by reason of there
     not having been a Termination Upon a Change in Control.

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3.   Termination Upon a Change in Control. If a Termination Upon a Change in
     Control occurs, the Employee will immediately be paid all accrued salary,
     bonus compensation to the extent earned, vested deferred compensation
     (other than pension plan or profit sharing plan benefits, which will be
     paid in accordance with the applicable plan), any benefits then due under
     any plans of CMI in which the Employee is a participant, accrued vacation
     pay and any appropriate business expenses incurred by the Employee in
     connection with his duties, all to the date of termination ("Accrued
     Compensation"). The Employee will also be entitled to the greater of i) the
     severance compensation described in Section 4 or ii) any severance benefit
     to which the Employee is entitled based on her offer letter of December 12,
     1997.

4.   Severance Compensation. If a Termination Upon a Change in Control occurs,
     CMI shall pay monthly severance compensation to the Employee for a period
     ending 24 months after termination in an aggregate amount determined by
     adding (a) the Employee's monthly base salary at the time of termination,
     (b) a proportionate amount of the Employee's targeted bonus, determined by
     multiplying the Employee's targeted bonus by the number of complete months
     from the start of the then current fiscal year to the Employee's
     termination date and dividing the product by 144, and (c) an amount equal
     to the monthly `Perk Pot' benefit to which the Employee is entitled as an
     officer of the company at the time of termination, and (d) the amount of
     $2400.00 in lieu of other employee benefits (including health benefits) the
     Employee was receiving from CMI. If the Employee becomes employed prior to
     the expiration of the aforesaid 24 month period, the payments provided for
     in this Section 4 shall cease as of the date of such employment; Employee
     agrees to promptly notify CMI of any such employment and to reimburse CMI
     for any payments made by CMI hereunder that cover any period during which
     the Employee was employed. The severance compensation described herein will
     be provided only in lieu of any severance benefit to which the Employee is
     entitled in Employee's offer letter of December 12, 1997.

5.   Acceleration of Options. If a Termination Upon a Change in Control occurs,
     all stock options and restricted stock held by the Employee immediately
     before the termination will become fully vested and the stock options will
     be exercisable for the periods specified with respect to termination of
     employment in the plans covering the options.

6.   Other Benefits. Neither this Agreement nor the severance compensation that
     it provides for will reduce any amounts otherwise payable, or in any way
     diminish the Employee's rights as an employee of CMI, whether existing now
     or hereafter, under any benefit, incentive, retirement, stock option, stock
     bonus or stock purchase plan or under any employment agreement or other
     plan or arrangement, provided, however, that the rights granted to the
     Employee and the obligations assumed by CMI under this Agreement will be in
     lieu of, and not in addition to, any severance or other termination
     payments to which the Employee may be entitled under any employment
     agreement or other plan or arrangement that the Employee may now or
     hereafter have with CMI.

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7.   Employment Status. This Agreement does not constitute a contract of
     employment. It does not impose on CMI any obligation to retain the Employee
     as an employee, to change the status of the Employee's employment or to
     change CMI's policies regarding termination of employment.

8.   Miscellaneous.

     a.   Severability. If a court or other body of competent jurisdiction
          determines that any provision of this Agreement is invalid or
          unenforceable, that provision will be adjusted rather than voided, if
          possible, so that it is enforceable to the maximum extent possible,
          and all other provisions of the Agreement will be deemed valid and
          enforceable to the fullest extent possible.

     b.   Withholding. Compensation and benefits to the Employee under this
          Agreement will be reduced by all federal, state, local and other
          withholdings or similar taxes as required by applicable law.

     c.   Arbitration. The parties will submit all controversies, claims and
          matters of difference in any way related to this Agreement, its
          performance or breach, to arbitration in San Francisco, California,
          according to the rules and practices of the American Arbitration
          Association from time to time in effect. Any awards in such
          arbitration shall be final and binding on all parties. The arbitrators
          shall allocate the costs of the arbitration in such manner as they
          deem equitable. The arbitrators may require the reimbursement of all
          or a portion of the reasonable legal fees incurred by the prevailing
          party in the arbitration proceeding and any legal proceedings which
          are taken to enforce the arbitral award.

     d.   Entire Agreement: Modifications. This Agreement sets forth the entire
          Agreement between the parties and supersedes any and all prior
          agreements or understandings, written or oral, between the parties
          pertaining to the subject matter of this Agreement with the express
          limitation that the provisions of the offer letter sent to employee on
          December 12, 1997 remain in force and effect except as specified in
          Paragraphs 3 and 4 above. It may be amended, modified, superseded or
          canceled, or its terms waived, only by a written instrument executed
          by each party or, in the case of a waiver, by the party waiving
          compliance. Failure of a party at any time to require performance of
          any provision of this Agreement will not affect the right at a later
          time to enforce the same. No waiver of a breach of this Agreement,
          whether by conduct or otherwise, in any one or more instances will be
          construed as a further or continuing waiver of the breach or of any
          other term of this Agreement. This Agreement shall inure to the
          benefit of and be binding upon

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          the successors and assigns of the parties hereto.

     e.   Confidential Information. The Employee agrees not to disclose, either
          while in the Company's employ or at any time thereafter, to any person
          not employed by CMI any confidential information obtained while in the
          employ of CMI (including, without limitation, any of CMI's inventions,
          processes, methods of distribution, customers or trade secrets). This
          shall not preclude the Employee from the use or disclosure of
          information known generally to the public or from making disclosures
          required by law or court order.

     f.   Applicable Law. This Agreement will be construed under and governed by
          the laws of the State of California without regard or reference to the
          rules of conflicts of law that would require the application of the
          laws of any other jurisdiction.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

CALIFORNIA MICROWAVE, INC.



--------------------------------              ----------------------------------
Frederick D. Lawrence                         Donna Birks
Chairman and Chief Executive Officer          Executive Vice President and Chief
                                              Financial Officer