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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, 1999.

                                       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

                         ADAPTIVE BROADBAND CORPORATION

             (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.)

                1143 BORREGAS AVENUE, SUNNYVALE, CALIFORNIA 94089
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 732-4000

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 $409,447,000 as of August 31, 1999,
excluding 1,967,000 shares outstanding at August 31, 1999 of the registrant's
common stock held by directors, executive officers and holders of more than
10% of the registrant's common stock. Exclusion of shares held by any person
should not be construed to indicate that such person possesses the power,
direct or indirect, to direct or cause the direction of the management or
policies of the


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registrant, or that such person is controlled by or under common control with
the registrant.

         Indicate the number of shares outstanding of the registrant's common
stock, as of the latest practicable date: On August 31, 1999, there were
14,813,000 shares of common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

(1)      Portions of the registrant's Annual Report to Shareholders for fiscal
         year ended June 30, 1999. (Part II of Form 10-K)

(2)      Portions of definitive proxy statement filed with Securities and
         Exchange Commission relating to the registrant's 1999 Annual Meeting of
         Shareholders. (Part III of Form 10-K)

ITEM 1.  BUSINESS

GENERAL

         Adaptive Broadband Corporation (the "Company") is a supplier of
terrestrial wireless and satellite-based systems to support data communications,
broadcast digital TV and telemetry networks. The Company also provides products
for satellite-based and terrestrial wireless ultra-high speed Internet access,
transport and worldwide Internet backbones.

         During the past two years, the Company has begun to shift its market
and product focus to concentrate on wireless broadband solutions, while
continuing to address the market for its core satellite and terrestrial
microwave products. During fiscal year 1999, the Company completed its
transition from a holding company to an integrated organization operating in
one business segment with two major product groups: satellite communications
and terrestrial wireless communications. Effective April 29, 1999, the
Company changed its corporate name to Adaptive Broadband Corporation from
California Microwave, Inc. The Company's stock symbol of ADAP was listed on
the Nasdaq National Market trading system on April 29, 1999.

         In June 1997, the Company announced its plans to divest its Microwave
Networks Division ("MN") and its Satellite Transmission Systems Division ("STS")
and the financial statements of the Company were restated to reflect the
accounts of MN and STS as discontinued operations. The sale of STS to L-3
Communications Corporation in exchange for $27.0 million in cash was completed
on February 5, 1998, and the sale of MN to Tadiran, Ltd. in exchange for $31.5
million in cash was completed on April 21, 1998. In May 1998, the Company sold
the Services Division to Telscape International, Inc. for $8.2 million in cash.
In April 1999, the Company sold its Government Division to Northrop Grumman
Corporation for $93 million in cash. Final accounting for the Government
Division and MN divestitures is subject to completion of the post-closing
procedures provided for in the Northrop and Tadiran agreements. Adaptive
Broadband received approximately $160 million in proceeds through the
divestiture of these businesses. Subsequently, the Company has used a portion of
the proceeds to invest in the

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development of new products through acquisition and internal development;
eliminated all short-term debt and continued its share repurchase program
initiated in February 1998. See "Risk Factor--Post-Closing Procedures and
Litigation Related to Discontinued Operations."

         On August 20, 1998, the Company acquired, for $10.9 million in cash,
Adaptive Broadband Limited ("ABL"), a United Kingdom-based company developing
high-speed wireless Internet connectivity technology. On November 19, 1998, the
Company acquired, for $7.7 million in cash, Crown Satellite ("Crown"), which is
developing and supplying products and software for the network delivery of
Internet Protocol "IP" data and multimedia services, from Crown International,
Inc.

         On February 5, 1998, the Company announced its intention to purchase,
in the open market, up to three million shares of its common stock. On October
6, 1998, the Company announced an increase in the number of shares authorized
for repurchase to six million. At June 30, 1999, approximately 2.7 million
shares of common stock had been repurchased since the commencement of the
repurchase program.


INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

RISK FACTORS

         Statements of the Company in this Annual Report on Form 10-K that are
not historical facts, including statements about management's expectations for
fiscal year 2000 and beyond, market demand for products, product development
plans, competitive pressures and the regulatory environment are forward-looking
statements that involve certain risks and uncertainties. Words such as
"believes," "anticipates," "plans," "expects," "intends" and similar expressions
are intended to identify forward-looking statements, but are not the exclusive
means of identifying such statements. The Company assumes no obligation to
update any forward-looking statement. 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:

FLUCTUATIONS IN QUARTERLY RESULTS

         The Company has experienced and will in the future experience
significant fluctuations in sales and operating results from quarter to quarter.
Factors that could cause the Company's sales and operating results to vary
significantly from period to period include: mix of systems and products sold;
timing of significant orders and deliveries of new and existing products and
systems; receipt of documents to support export shipments, such as export
licenses, import documentation and letters of credit; fluctuating market demand;
price competition; new product introductions by the Company or by the Company's
competitors; fluctuations in foreign currency exchange rates; disruptions in
delivery of products manufactured by subcontractors or of components or
subsystems provided by third-party suppliers; seasonal factors that may affect
capital spending by customers, such as the varying fiscal year ends of customers
and the reduction in business during the summer months; the relatively long
sales cycles for certain of the Company's products; changes in timing and amount
of sales incentive compensation;

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political instability; regulatory developments; conditions affecting the
telecommunications industry generally or general economic conditions;
acquisitions and other factors described in this section.

         The Company's future revenues in any period are likely to be derived
from a smaller number of transactions with relatively high average revenues per
order. Therefore, the loss of any orders or delays in closing such transactions
could have a more significant impact on the Company's quarterly revenues and
results of operations than historically.

         Due to the relatively fixed nature of many of the Company's costs,
including personnel and facilities costs, and because operating expenses are
based on anticipated revenue, a decline in revenue, failure to achieve expected
revenue in any fiscal quarter or unanticipated variations in the timing of
recognition of specific revenues can cause significant variations in operating
results from quarter to quarter. In certain of the Company's operations,
inventory levels are established and expenditures are made based on forecasted
demand rather than on customer orders, and the Company may be limited in its
ability to reduce inventory and expenses if such forecasted demand is not
realized. Similarly, under the Company's manufacturing agreement for its
AB-Access-TM- product, if the Company fails to purchase projected quantities of
the manufactured products, the agreement provides for an increase in the
per-unit purchase price. Accordingly, lower-than-anticipated demand could
adversely affect the Company's margins for that product.

         To prepare for the future, the Company must continue to invest
resources heavily in acquired and new businesses for the development of new high
speed wireless broadband products and technologies, the evaluation of these
products, plant, equipment, inventory, personnel and other items required to
efficiently produce these new products and to provide necessary marketing and
administrative service and support. As a result, in addition to the Company's
fixed costs, its expenses will be increased by costs associated with the initial
development and production of new products. In the event of a shortfall in
revenues, these factors could have a material adverse effect on the Company's
business, results of operations and financial condition. The Company believes,
therefore, that period-to-period comparisons of its operating results should not
be relied upon as an indication of future performance.

         For all the foregoing factors, as well as other unanticipated factors,
it is possible that in future quarters the Company's results of operations could
fail to meet the expectations of public market analysts or investors. In such
event, or in the event that adverse conditions prevail or are perceived to
prevail generally or with respect to the Company's business, the price of the
Company's Common Stock will likely be materially adversely affected.

MANAGEMENT OF CHANGING BUSINESS OPERATIONS

         The Company's strategy is to shift its focus from providing traditional
microwave radio and satellite receiver and transmission products to providing
enhanced microwave radio products, Internet Protocol transport solutions and
high-speed wireless telecommunications networks. As part of this strategy, the
Company has, in the last two years, sold four of its non-strategic businesses
and acquired Adaptive Broadband Limited, a developer of high-speed wireless
Internet connectivity technology, based in the United Kingdom, and Crown
Satellite, a developer of broadband satellite download products. Implementation
of the Company's new strategy, particularly in a rapidly evolving market, will
require effective planning and management, as well as significant additional
expenses and financial and operational resources. To date, the Company's
revenues from sales of these new products have been immaterial and

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there can be no assurance that the Company will be able to generate
substantial revenues and profits from these new products or otherwise
successfully enter this new market. Failure to develop and introduce enhanced
new products in a cost-effective and timely manner or to achieve market
acceptance of these products would have a material adverse effect on the
Company's business, results of operations and financial condition.

LENGTHY SALES CYCLE

         A customer's decision to purchase many of the Company's products
typically involves a significant technical evaluation, formal internal
procedures associated with large capital expenditure approvals and testing and
acceptance of new systems that affect key operations. For these and other
reasons, the sales cycle associated with the Company's products can be lengthy
and subject to a number of significant risks over which the Company has little
or no control. The Company's new products are expected to have even longer sales
cycles and involve demonstrations, field trials and other evaluation periods,
which will further lengthen the sales cycle. Because of the growing sales cycle
and the potential for more reliance on a relatively small number and large size
of customers' orders, if revenues forecast from a specific customer for a
particular quarter are not realized in that quarter, the Company's operating
results for that quarter could be materially adversely affected.

DEPENDENCE ON LIMITED NUMBER OF CUSTOMERS

         The Company expects that it will become more dependent upon a
relatively limited number of customers for a substantial portion of its revenues
in future periods. The loss of a major customer or the reduction, delay or
cancellation of orders from one or more of the Company's significant customers
could materially adversely affect the Company's business, results of operations,
and financial condition.

RAPID TECHNOLOGICAL CHANGE

         The market for telecommunications products and services is subject to
rapid technological change, evolving industry standards, rapid changes in
customer requirements and frequent product and service introductions and
enhancements. The Company's future success will depend in part on its ability to
anticipate and respond to these changes by enhancing its existing products and
services and by developing and introducing on a timely and cost-effective basis,
new products, features and services that address the needs of its customer base.
There can be no assurance that the Company will be successful in identifying,
developing and marketing new products, product enhancements and related services
that respond to technological change or evolving industry standards or that
adequately meet new market demands.

DEPENDENCE ON RAPIDLY EVOLVING TELECOMMUNICATIONS AND INTERNET INDUSTRIES

         The Company's future success is dependent upon the continued growth of
the telecommunications industry, particularly with regard to the Internet. The
global telecommunications and Internet industries are evolving rapidly, and it
is difficult to predict potential growth rates or future trends in technology
development. There can be no assurance that the deregulation, privatization and
economic globalization of the worldwide telecommunications market that has
resulted in increased competition and escalating demand for new technologies and
services will continue in a manner favorable to the Company or its

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business strategies. In addition, there can be no assurance that the growth
in demand for Internet services and the resulting need for high speed or
enhanced telecommunications products will continue at its current rate or at
all.

DEPENDENCE ON PRODUCT ACCEPTANCE

         The Company's future success is substantially dependent on whether
high-speed wireless telecommunications products gain market acceptance as a
means to provide telecommunications voice and data service. Because these
markets are relatively new, it is difficult to predict which market segments
will develop or expand. The Company has recently invested and expects to
continue to invest significant time and resources in the development of new
products for this market. In the event that service providers adopt technologies
other than the high-speed and other wireless technologies that the Company
offers, the Company may not be able to sustain or expand its business.

         Service providers continually evaluate alternative technologies,
including wire-based technologies such as digital subscriber line, cable modem,
optical fiber cable and high-speed wires leased from the traditional service
providers in a given locale, as well as different wireless technologies. Failure
of service providers to accept the Company's products would have a material
adverse effect on the Company's business, results of operations and financial
condition.

DEPENDENCE ON THIRD-PARTY MANUFACTURERS

         The Company intends to primarily rely on independent manufacturers
to provide full turnkey manufacturing of the Company's AB-Access product,
SpectraCast-Registered Trademark- products and potentially other new or
existing products. The Company currently has qualified only one manufacturer
for its AB-Access product. The Company has a supply agreement with this
third-party manufacturer to manufacture the AB-Access product for an initial
term of two years, with rolling one-year renewals unless one party disagrees.
In the event, however, that this subcontractor were to experience financial,
operational, production or quality assurance difficulties or allocate
production resources to others in lieu of the Company or experience a
catastrophic event that resulted in a reduction or interruption in
manufacturing services to the Company, the Company's business, results of
operations and financial condition would be materially adversely affected.
There can be no assurance that manufacturing services from alternative
sources will be able to meet the Company's future requirements or that
existing or alternative sources will continue to be available to the Company
at favorable prices.

DEPENDENCE ON COMPONENT AVAILABILITY, SUBCONTRACTOR PERFORMANCE AND KEY
SUPPLIERS

         Timely delivery of the Company's products is dependent upon the
availability of quality components and subsystems used by the Company in its
products. The Company obtains certain components and subsystems from 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.

         The Company does not have any long-term supply agreements with these
vendors to ensure uninterrupted supply of these components. Inability to develop
alternative sources for these components or to obtain sufficient quantities of
components could result in delays or reductions in product shipments. In the
event of a reduction or interruption in the supply of a key

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component, a significant amount of time could be required to qualify
alternative suppliers and receive an adequate flow of replacement components.
Reconfiguration of the Company's products to adapt to new components may also
be required and could entail substantial time and expense. In either event,
the Company's business, results of operations and financial condition would
be materially adversely affected. In addition, the process of manufacturing
certain of these components is extremely complex, and the Company's reliance
on the suppliers of these components exposes the Company to potential
production difficulties and quality variations, which could negatively affect
cost and timely delivery of the Company's products.

INTERNATIONAL SALES

         International sales represented 41% and 50% of total sales for fiscal
1999 and 1998, respectively. The Company expects that international sales will
continue to account for a signification proportion of future revenues. These
sales expose the Company to certain risks, including the difficulty and expense
of staffing and maintaining foreign sales offices and distribution channels,
fluctuations in foreign currency exchange rates, political instability,
availability of suitable export financing, export/import license requirements
and other U.S. and foreign regulations that may apply to the export of the
Company's products, longer customer payment cycles, greater difficulty in
accounts receivable collection, changes in regulatory requirements or in
economic or trade policy, costs related to localizing products for foreign
countries, potentially weaker protection for intellectual property in certain
foreign countries, the burden of complying with a wide variety of foreign laws
and practices, tariffs and other trade barriers, and potentially adverse tax
consequences, including restrictions on repatriation of earnings. As an example,
the recent deterioration of economic conditions in Brazil has adversely affected
the Company's sales. If the risks listed above materialize to a significant
extent, the Company's business, results of operations and financial condition
would be adversely affected.

         In addition, many countries require communications equipment used in
their country to comply with their own particular regulations, including safety
regulations, radio frequency allocation schemes and standards. If the Company
cannot develop products that work with different standards, the Company may be
unable to sell its products. If compliance proves to be more expensive or time
consuming than the Company anticipates, its business would be adversely
affected. Inability to obtain necessary regulatory approvals in foreign markets
on a timely basis could have a material adverse effect on the Company's
business, results of operations and financial condition.

         The Company attempts to reduce the risk of doing business in foreign
countries by seeking contracts denominated in dollars, advance payments and
irrevocable letters of credit in its favor. There can be no assurance that these
activities will be successful. To date the Company has assumed very little
foreign exchange risk but could do so in the future if deemed necessary to sell
the Company's products. The Company also has foreign operations that have
expenditures denominated in local currencies. Fluctuations in foreign currency
exchange rates may contribute to fluctuations in the Company's operating
results. For example, changes in foreign currency exchange rates could adversely
affect revenues, net income, earnings per share and cash flow of the Company's
operations in the affected markets. Similarly, such fluctuations may cause the
Company to raise prices or the local price may effectively be increased by such
fluctuations, which could adversely affect demand for the Company's products and
services. In addition, if exchange or price controls or other restrictions are
imposed in countries in which the

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Company does business, the Company's business, results of operations and
financial condition would be materially adversely affected.

COMPETITION

         The market for telecommunications products and systems is rapidly
evolving and highly competitive. Increased competition is likely to result in
price reductions, shorter product life cycles, reduced gross margins, longer
sales cycles and potential loss of market share, any of which would adversely
affect the Company's business. As a provider of high-speed and other wireless
telecommunications equipment, the Company competes directly or indirectly with a
number of large telecommunications equipment suppliers, including Harris
Corporation, Hughes and Motorola, as well as with smaller start-up companies. In
addition, well-capitalized companies such as Lucent, Cisco and Nokia are
potential entrants into the market. Further, 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. Many of the Company's
competitors and potential competitors have significantly greater financial,
marketing and operating resources than the Company. The Company's wireless
solutions also compete with products based on other technologies, such as
digital subscriber lines, fiber optic cable, cable modems and high-speed wires
leased from traditional telecommunications service providers.

         The Company expects its competitors to continue to improve the
performance of their current products and to introduce new products or new
technologies that may supplant or provide lower-cost alternatives to the
Company's products. To be competitive, the Company must continue to invest
significant resources in research and development, sales and marketing and
customer support. There can be no assurance that the Company will have
sufficient resources to make these investments or that it will be able to make
the technological advances necessary to be competitive. As a result, the Company
may not be able to compete effectively.

BRIEF TENURE OF MANAGEMENT; DEPENDENCE ON KEY PERSONNEL

         The majority of the Company's senior management team joined the Company
within the last 30 months. In addition, during the same period, a new Board of
Directors has been elected. Most of these individuals have not previously worked
together, and there can be no assurance that they will be able to work together
effectively or successfully manage the Company's transition or implement its new
strategy. The Company's performance is substantially dependent on the
performance of its executive officers and other key employees. The Company does
not have key man life insurance on any employees. Loss of the services of any of
its executive officers or other key employees could have a material adverse
effect on the Company.

         The Company's success depends in part on its ability to attract, hire,
train, retain and motivate qualified technical, management and sales personnel
with appropriate levels of managerial and technical capabilities. The Company
believes that a significant level of expertise is required to develop and market
the Company's products and services effectively. Recruiting qualified personnel
is an intensely competitive and time-consuming process. The Company competes for
such personnel with a number of other companies, many of which have
substantially greater resources than the Company. There can be no assurance that
the Company will be successful in attracting and retaining the technical,
management and sales personnel it requires to conduct and expand its operations
successfully on a timely basis. The failure to

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attract, hire, train, retain and motivate qualified technical, management and
sales personnel in the future would have a material adverse effect on the
Company's business, financial condition and results of operations.

LIMITED PROTECTION OF PROPRIETARY RIGHTS

         The Company's success and its ability to compete effectively is
dependent in part upon its proprietary technology. The Company relies on a
combination of patent, trademark, copyright and trade secret laws, as well as
nondisclosure agreements and other contractual restrictions, to establish and
protect its proprietary rights. The Company generally enters into nondisclosure
and invention assignment agreements with its employees and consultants and into
nondisclosure agreements with its customers and suppliers. There can be no
assurance that the measures the Company undertakes will be adequate to protect
its proprietary technology.

RISKS OF THIRD-PARTY CLAIMS OF INFRINGEMENT

         The telecommunications industry is characterized by a relatively high
level of litigation based on allegations of infringement of proprietary rights.
While to date, the Company has not been subject to any material claims of
infringement or misappropriation of intellectual property of third parties,
there can be no assurance that third parties will not assert infringement claims
against the Company, that any such assertion of infringement will not result in
litigation or that the Company would prevail in such litigation. Furthermore,
any such claims, with or without merit, could result in substantial cost to the
Company and diversion of its personnel, require the Company to develop new
technology, or require the Company to enter into royalty or licensing
arrangements. Such royalty or licensing agreements, if required, may not be
available on terms acceptable to the Company or at all. In the event of a
successful claim of infringement or misappropriation against the Company and
failure or inability of the Company to develop non-infringing technology or to
license the infringed, misappropriated or similar technology at a reasonable
cost, the Company's business, results of operations and financial condition
would be materially adversely affected. In addition, the Company indemnifies its
customers against claimed infringement of patents, trademarks, copyrights and
other proprietary rights of third parties. Any requirement for the Company to
indemnify a customer could have a material adverse effect on the Company's
business, results of operations and financial condition.

RISKS RELATING TO POTENTIAL ACQUISITIONS

         As part of its business strategy, the Company has in the past and may
in the future make acquisitions of, or significant investments in, companies,
products or technologies that it believes are complementary. Any such future
transactions would be accompanied by the risks commonly encountered in making
acquisitions of companies, products and technologies. Such risks include, among
others, the difficulties associated with assimilating the personnel and
operations of acquired companies, the potential disruption of the Company's
ongoing business, the distraction of management and other resources, the
integration of personnel and technology of an acquired company, difficulties in
evaluating the technology of a potential target, inability to motivate and
retain new personnel, the maintenance of uniform standards, controls, procedures
and policies, the potential impairment of relationships with employees and
customers and the risks that the Company will otherwise not realize the expected
benefits of the acquisitions. There can be no assurance that the Company will be
successful in overcoming these risks or any other

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problems encountered in connection with any such acquisitions. Furthermore,
future acquisitions by the Company could result in the issuance of dilutive
equity securities, the incurrence of debt or contingent liabilities or
amortization expenses related to goodwill and other intangible assets, any of
which could have a material adverse effect on the Company's business, results
of operations and financial condition or on the market price of the Company's
Common Stock.

ACCOUNTING CHARGES RELATED TO ACQUISITIONS AND DISPOSITIONS

         Many attractive acquisition candidates are high-technology companies
that tend to have small amounts of tangible assets and, as a result, if those
acquisitions were accounted for as purchases, the Company's acquisition of such
companies could result in significant goodwill charges. In that event, a
significant amount of goodwill would be amortized, which would adversely affect
the Company's financial results.

         In connection with the acquisitions of ABL and Crown, the Company
allocated a significant portion of the purchase price to purchased in-process
research and development. The Company has received an inquiry from the SEC,
dated December 31, 1998, related to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1998 and Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998. A primary focus of the inquiry was to request
additional information regarding the Company's in-process research and
development costs from the purchase of ABL in August 1998. In addition, the
inquiry requested information about the Company's fiscal 1998 restructuring
charge, intangible asset impairment charge and accounting for discontinued
operations, as well as certain other accounting and disclosure clarifications.
The Company responded on February 3, 1999. No additional communication or
inquiry from the SEC has been received. The Company believes that it has
properly valued and accounted for the in-process research and development and
that the accounting and disclosure related to the other inquiries are
appropriate. There can be no assurance, however, that such inquiry will not
result in restatement of the Company's financial statements, including, for
example, a reduction in the charge for purchased research and development and
an increase in the amount allocated to intangible assets, such as goodwill,
which would be amortized and could adversely affect the Company's future
results of operations.

POST-CLOSING PROCEDURES AND LITIGATION RELATED TO DISCONTINUED OPERATIONS

         In April 1999, the Company completed the sale of its Government
Division to Northrop Grumman Corporation ("Northrop Grumman") for $93.0 million
in cash, plus up to an additional $5 million cash payment, contingent on
performance of the divested business. During fiscal 1998, the Company's
Satellite Transmission System Division was sold to L-3 Communications
Corporation ("L-3") for $27.0 million in cash, and its Microwave Networks
Division was sold to Tadiran, Ltd. ("Tadiran") for $31.5 million in cash. The
Company recorded an additional provision of $15.1 million (net of income taxes)
for additional losses on disposition of these divisions. The provision was
primarily for adjustments to the combined losses on sale and to higher than
anticipated operating losses prior to disposition of both divisions.

         Final accounting for the Government Division and MN divestitures is
subject to completion of the post-closing procedures provided for in the
Northrop Grumman and Tadiran agreements. The Company has accrued for transaction
costs related to the Government Division sale and future price adjustments that
may occur in the post-closing procedures. At June 30, 1999, the discontinued
operations reserves for the Government Division and MN divestitures
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were $6.9 million and $2.5 million, respectively. No assurance can be given
that the completion of these procedures will not have a material adverse
effect on the Company's results of operations, financial condition or cash
flows.

         In July 1999, Northrop Grumman filed a lawsuit against the Company
alleging that the Company failed to disclose certain events and information as
required by the terms of the agreement pursuant to which Northrop Grumman
acquired the Government Division in April 1999. No damages have been specified.
The Company believes that it has strong defenses and plans to vigorously defend
the lawsuit filed by Northrop Grumman, and no provisions have been made for
expenses that may be incurred to resolve the lawsuit. However, there can be no
assurance that the final resolution of the Northrop Grumman allegations will not
have a material adverse effect on the Company's results of operations, financial
condition or cash flows.

         In May 1995, the Company's MN division entered into certain agreements
with Nokia Telecommunications Oy ("Nokia"), pursuant to which MN was to provide
to Nokia certain microwave radios and related software and services and was to
carry out certain development programs. In September 1997, Nokia informed MN of
a purported failure of certain of the products sold to Nokia to meet certain
contractual specifications. MN was sold to Tadiran in April 1998 and, under the
terms of the sale agreement, Tadiran assumed and indemnified the Company with
respect to the Nokia claims. Tadiran has now taken the position that the Company
is responsible for the Nokia claims, based upon allegations that the Company
failed to provide adequate disclosures and financial reserves with respect to
such claims. In September 1998, the Company received notice from Nokia that
Nokia has decided to terminate the May 1995 agreements. Also in September 1998,
Nokia began arbitration proceedings to recover damages, which are claimed to be
$40.6 million, which include loss of profits and goodwill, and damage to trade
and manufacturing secrets. The Company believes that it has strong defenses and
plans to vigorously defend the Nokia claims. In May 1999, the Company began
arbitration proceedings against Tadiran, primarily to determine that Tadiran is
responsible for the Nokia claims. The Company believes that it has strong claims
against Tadiran, and no accruals have been recorded for expenses that may be
incurred to resolve the dispute. However, there can be no assurance that the
final resolution of this matter will not have a material adverse effect on the
Company's results of operations, financial condition or cash flows.

GOVERNMENT REGULATION

         Radio communications, including satellite communications, are subject
to regulation by United States and foreign laws and international treaties. The
Company's products and systems must conform to domestic and international
requirements established to avoid interference among users of microwave
frequencies and to permit interconnection of equipment. In addition, domestic
and international authorities regulate the allocation of the radio frequency
spectrum. Products to support new services can be marketed only if permitted by
suitable frequency allocations and regulations, and the process of establishing
new regulations is complex and lengthy. Certain customers have had difficulty
obtaining allocation of spectrum for their services, which adversely affects
their demand for the Company's products. Accordingly, delay or failure of the
Company's customers to obtain suitable allocations of available spectrum could
have a material adverse effect on the Company's business, results of operations
and financial condition.

<PAGE>

COST OVERRUNS AND POSSIBLE CANCELLATION OF ORDERS

         A growing proportion of the Company's sales are made pursuant to
contracts that require performance by the Company over several quarters or
years. The prices of products and systems sold under these contracts are based
in part on the Company's estimate of its cost to produce these items. If the
Company were to incur higher costs than estimated in performing under these
contracts, it could have a material adverse effect on the Company's results of
operations and financial condition.

         Customers of the Company often enter into purchase orders in advance of
manufacture of the equipment ordered. Cancellations of orders by customers may,
depending upon the timing of the cancellation, leave the Company with unsaleable
products or idle capacity, which would adversely affect its business, results of
operations and financial condition.

NEED TO REDUCE COST OF PRODUCTS

         Market acceptance of the Company's products, and the Company's future
success, will depend in significant part on reductions in the per-unit cost of
the Company's products. Certain of the Company's competitors currently offer
certain products at prices lower than those of some of the Company's products.
While the Company has initiated cost reduction programs to offset pricing
pressures on its products, there can be no assurance that these cost reduction
efforts will continue to keep pace with competitive pricing pressures or lead to
improve gross margins. If the Company is unable to continue to obtain cost
reductions, its gross margins and profitability will be adversely affected.

ACCOUNTS RECEIVABLE

         The Company may, under certain circumstances, be unable to enforce a
policy of receiving payment within a limited number of days of issuing invoices.
For example, customers may be unwilling or unable to pay for products on a
timely basis if they are dissatisfied with the product or if they are
experiencing financial difficulties. The Company has had difficulties in some
cases in the past in receiving payment in accordance with its policies. Any
inability to timely collect its receivables could cause the Company to be short
of cash to fund operations or could ultimately require the Company to write off
as uncollectible certain accounts receivable, which could have a material
adverse effect on the Company's business, results of operations and financial
condition.

RISKS OF PRODUCT DEFECTS, PRODUCT RETURNS AND PRODUCT LIABILITY

         Products as complex as those offered by the Company frequently contain
undetected errors, defects or failures, especially when first introduced or when
new versions are released. In the past, such errors have occurred in the
Company's products, and there can be no assurance that errors will not be found
in the Company's current and future products. The occurrence of such errors,
defects or failures could result in product returns and other losses to the
Company or its customers. Such occurrence could also result in the loss of or
delay in market acceptance of the Company's products, which could have a
material adverse effect on the Company's business, results of operations and
financial condition. The Company's products generally carry a one -year
warranty, which includes factory services as needed for replacement of parts.
Due to the relatively recent introduction of the AB-Access, TransIt-TM-,
SpectraCast, TwinStream-TM- and CodeRunner-TM- products, the Company has limited
experience with the problems that could arise

<PAGE>

with these products. In addition, the Company's purchase agreements with its
customers typically contain provisions designed to limit the Company's
exposure to potential product liability claims. It is possible, however, that
the limitation of liability provisions contained in the Company's purchase
agreements may not be effective as a result of federal, state or local laws
or ordinances or unfavorable judicial decisions. Although the Company has not
experienced any significant product liability claims to date, the sale and
support of the Company's products entail the risk of such claims. A
successful product liability claim brought against the Company could have a
material adverse effect on the Company's business, results of operations and
financial condition.

RISK RELATED TO YEAR 2000 READINESS

         The inability of the Company's products to properly manage and
manipulate data relating to the year 2000 could result in increased warranty
costs, customer dissatisfaction issues, potential lawsuits and other material
costs and liabilities. The failure of the Company's internal systems to achieve
year 2000 readiness could result in a material disruption of its operations. Any
failure of the internal systems or products of its suppliers or subcontractors
related to the year 2000 could have a material adverse effect on the Company's
business, results of operations and financial condition.

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

         The Company's operations to date have required substantial amounts of
capital. The Company expects to spend substantial funds to support the growth of
its products, to develop new products and otherwise to implement its strategic
plan. The Company anticipates that its existing capital resources and credit
facilities should enable it to maintain its current and planned operations for
at least the next 12 months.

         The Company's capital requirements will depend on numerous factors,
including potential changes in strategic direction, the progress of the
Company's research and development programs, the commercial acceptance of its
products, the resources the Company devotes to advanced technologies and the
demand for its products. To the extent that funds are insufficient, the Company
would have to raise additional funds to meet its capital requirements. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the stockholders of the Company will be reduced,
stockholders may experience additional dilution and such equity securities may
have rights, preferences or privileges senior to those of the holders of the
Company's Common Stock. No assurance can be given that additional financing will
be available on acceptable terms, if at all. If adequate funds are not
available, the Company may have to, among other things, reduce substantially or
eliminate expenditures for the development and marketing of its products.

TELECOMMUNICATIONS INDUSTRY OVERVIEW

         TELECOMMUNICATIONS MARKET. The demand for improved telecommunications
is increasing worldwide as emerging economies seek to modernize, as increasingly
information-intensive developed and developing countries introduce new
telecommunications services and as the spread of the Internet has accelerated
and expanded. The Company believes that the global markets for network
computing, telecommunications and broadcasting are converging, providing
opportunities for new technologies in the area of information access, transport
and delivery.

<PAGE>

Additionally, privatization, deregulation and regulatory initiatives have
all enhanced competition, permitted the opening of new markets and providing
incentives for the development of new products.

         ALTERNATIVE TRANSMISSION MEDIA. Customers for telecommunications
equipment must weigh the relative costs and advantages of the three presently
available transmission media: copper cable, fiber optic cable and wireless
systems based on terrestrial radio, both microwave and millimeter wave, and
satellite communications technologies. Each medium has certain advantages over
the others--and each suffers certain disadvantages when compared to the others.
Adaptive Broadband's principal focus historically has been in the satellite and
terrestrial microwave radio areas, with over 99% of fiscal 1999 revenues derived
from sales of these products. The Company's strategy is to shift its market and
product focus to the wireless broadband access area, employing terrestrial radio
microwave and satellite communications technologies, while continuing to address
the market for its core satellite and terrestrial microwave products.

         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

         Adaptive Broadband's strategy is to provide wireless-based solutions to
send and receive complex data, through the design and manufacture of capital
equipment products for public and private communications systems. Historically,
the Company has concentrated its efforts on sales of products and services for
communications infrastructure rather than on consumer terminals and equipment.
In the future, the Company plans to introduce versions of its wireless broadband
access products to meet consumers' needs for portability and mobility.

         In April 1998, the executive team formulated a new, integrated,
long-term strategy, which takes advantage of the Company's existing market
positions in satellite and terrestrial microwave products and current and
next-generation technologies. See "Risk Factors-Management of Changing Business
Operations." This strategy has the following key elements:

         GLOBAL INFORMATION TECHNOLOGY BANDWIDTH REQUIREMENTS. The Company
believes that the wireless telecommunications market offers numerous
opportunities for new products because of the growing need for increased
bandwidth, or carrying capacity, for digital data. In particular, continual
improvements in computing technology create increasingly sophisticated bandwidth
requirements for moving data around the world. For instance, telecommunications
infrastructure requires ever-increasing complex data types--such as audio, video
and graphics files--for

<PAGE>

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
intends to capitalize on its present position as a radio-based bandwidth
solutions provider to supply products for bandwidth-intensive applications,
such as applications that address Internet usage, digital TV, remote data
collection, and new mobile air, sea, and terrestrial systems, as well as a
host of commercial data transmission applications for financial networks and
inventory management systems.

         LEVERAGE MARKET POSITION. The Company concentrates on providing
networking solutions based on terrestrial wireless radio and satellite
communications technologies. In its particular niches in these areas, the
Company seeks to meet customers' special needs with application-specific
products. The Company intends to capitalize on its position and experience in
the market for satellite and terrestrial microwave products to address the
market for wireless broadband products. The Company believes that through new
product offerings and enhancements, it can deepen and broaden the niches it
serves, in addition to addressing its new area of focus, wireless broadband,
high-speed Internet access.

         OPERATIONAL ADJUSTMENTS. The Company intends to continue to implement
managerial and operational adjustments to strengthen financial performance.
These operational adjustments are designed to shorten the product development
cycle; eliminate redundant products with low customer demand; complete
fault-tolerant software applications; reduce inventories; and fill market needs
adjacent to current niches. These issues are all part of developing internal
processes to improve customer satisfaction.

         SINGLE OPERATING ENTITY. Adaptive Broadband was historically highly
decentralized. This organizational structure was intended to allow each division
to be responsive to particular markets and customers. Each division typically
maintained its own sales, marketing, product development, finance,
administration and manufacturing functions. In 1999, the Company completed the
shift from that model to a single operating entity model, where manufacturing,
sales and marketing, research and development, finance and administrative
functions are consolidated in order to pursue larger opportunities more
cost-effectively. The Company has organized around four strategic product
groupings--AB-Internet Series-TM-, AB-Video Series-TM-, AB-Data Network
Series-TM-, and AB-Infrastructure Series-TM-.

         INCREASING FOCUS ON DOMESTIC MARKET. The Company's products are
marketed on a worldwide basis. International revenue was $63.6 million, $87.6
million and $71.3 million for fiscal years 1999, 1998 and 1997, representing
41%, 50% and 45% of total revenues, respectively. Adaptive Broadband intends
to focus initially on the U.S. domestic market for wireless broadband
solutions to reduce its dependence on volatile international economies. The
Company believes that a substantial portion of its sales in future years will
come from the international sector due to communications infrastructure
requirements in developing countries and the growing worldwide need for
wireless-based bandwidth solutions.

<PAGE>

PRODUCTS

     Adaptive Broadband develops products for the broadband wireless market.
The Company's products are able to send large amounts of voice, video and
data traffic over the airwaves using microwave and satellite technology. The
Company currently derives revenues from two market areas: satellite
communications and terrestrial wireless. As discussed elsewhere, Adaptive
Broadband is organized around a series of products that span the two market
areas. The four series are described below.

AB-INFRASTRUCTURE SERIES

         In its AB-Infrastructure Series, the Company designs,
manufactures, and markets satellite modems and transceiver products and services
primarily to telecommunications carriers and Internet service providers. It also
develops and supplies products and software for the network delivery of Internet
Protocol (IP) data and multimedia services. These products and services enable
customers to provide voice, video and data services via satellite.

         The Company manufactures a broad line of electronic products used in
earth stations. The products are sold to satellite communications earth station
suppliers and to operators of communication networks to upgrade existing earth
stations. It is a leading producer of high-speed (up to 155 million bits per
second) digital modems and frequency converters used in satellite communications
networks. Its products are used in INTELSAT systems, satellite backup facilities
for undersea fiber optic cable, digital video and for many private network
applications.

         Adaptive Broadband's ISO 9001-certified satellite communications
  products are designed to satisfy the needs of the commercial, industrial and
  military marketplaces. The Company's MIDAS-TM- solution offers today's global
  marketplace the satellite capabilities to enable long-range
  bandwidth-on-demand applications such as Internet access, Ethernet backbone,
  fiber optic circuit restoral and overflow/congestion reduction in addition to
  servicing high-speed LAN interconnections. Adaptive Broadband's integrated
  satellite paging solution is a point-to-multipoint satellite communication
  network that provides paging data broadcast from the hub to remote and
  geographically dispersed sites in the satellite footprint. The simultaneous,
  high-speed transmission of stock quote data from the New York Stock Exchange
  to securities brokerages around the world is one application of this powerful
  technology. The Company's satellite modems also enable sophisticated digital
  video broadcasting, for transmitting images and sound using electronic news
  gathering.

         Adaptive Broadband's AB-Infrastructure Series also provides critical
communications solutions to facilitate telecommunications and commerce in
underdeveloped countries that cannot afford the high expense of fiber optic
networks or have limited physical access for alternative designs. Dozens of
nations around the world utilize Adaptive Broadband satellite and terrestrial
radio networks to communicate within their native regions and abroad.

AB-DATA NETWORK SERIES

         In its AB-Data Network Series, the Company designs, manufactures and
markets terrestrial point-to-point and point-to-multipoint microwave data
radios. Its point-to-point radios are used to extend the reach of a
communications system in areas where low capacity,

<PAGE>

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
for customers such as public utilities, oil and gas companies, and other
commercial entities.

         Adaptive Broadband has expanded its technology platform in
point-to-point and point-to-multipoint products to develop new solutions to
meet the need for real-time transaction processing. The Company's new TransIT
product offers retail and financial network customers an innovative and
economical solution for processing multiple applications simultaneously over
common high-capacity networks. This high-speed product is targeted for use in
ATMs and point-of-sale terminals, lottery systems, travel agencies and web
stores.

AB-VIDEO SERIES

         The Company designs, manufactures, and markets 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. With the advent of government-mandated
digital television (DTV), within five to seven years, analog broadcast
transmission is expected to diminish. Traditionally, the broadcast industry
has associated DTV with high definition television (HDTV). HDTV promises
twice the resolution of standard definition television, with a richer
spectrum of colors and multi-channel digital CD quality sound. To become a
reality, increased bandwidth and sophisticated digital modulation techniques
must be incorporated into new technologies to produce the superior image
quality and other features required for HDTV.

         Government deadlines have compelled the television industry to
upgrade and migrate their current analog systems to digital networks. In
response, Adaptive Broadband has released a line of microwave radio products
that allows broadcasters to build upon their existing infrastructures to
enable a smooth, cost-effective transition from analog studio-to-transmitter
links (STLs) and electronic newsgathering (ENG). The Company's CodeRunner and
TwinStream solutions represent the industry's first dual-carrier radio
systems to support analog NTSC and 19.39 Mbps ATSC transport streams,
allowing broadcasters to provide both types of programming within a 25 MHz
microwave channel. Broadcasters can incorporate this technology into their
existing microwave channel without adding additional spectrum or making
costly upgrades -- while enhancing image quality and stability for numerous
applications.

AB-INTERNET SERIES

         The Company's AB-Internet Series, comprised of the terrestrial-based
AB-Access and the satellite-based SpectraCast, was developed as a result of the
August 1998 technology acquisition of Adaptive Broadband Limited, based in
Cambridge, U.K. and the November 1998 acquisition of Crown Satellite, based in
Elkhart, IN respectively. During fiscal 1999, less than 1% of the Company's
revenues were derived from sales of the AB-Internet Series.

<PAGE>

The Company's AB-Access transceiver enables heavy data transmission for the
final network connection to an end user (the "last mile") at rates
as high as 25 Mbps, a speed in excess of 400 times those available with
conventional modem networks. At this bandwidth, users will be able to download
full-streaming video, download data files, use real-time video conferencing and
surf the Worldwide Web - all at the same time over a single connection. This
wireless point-to-multipoint system for fixed data networks enables users to
bypass existing telecommunications infrastructure, so the initial investment is
significantly lower than that required for "wired" alternatives. This low-cost
wireless infrastructure means that a complete network can be installed as
quickly as in days or weeks, instead of the typical months or years. And because
AB-Access' architecture is expandable in increments, the network can grow as the
business grows or as bandwidth needs evolve.

Although the Company's fundamental AB-Access platform addresses a wide frequency
spectrum - from 2.0 - 42.0 GHz -- the product strategy is targeted toward
markets that have low start-up costs and high potential for expansion,
specifically the U-NII (Unlicensed National Information Infrastructure) and MMDS
(Multi Media Distribution System) bands in the U.S. and 3.5 GHz in other areas
of the world.

Adaptive Broadband believes that AB-Access' advanced subscriber management
features may make the product particularly attractive to carriers, Competitive
Local Exchange Carriers (CLECs) and Internet Service Providers (ISPs) because it
allows end users (new subscribers) to be brought on-line quickly with a single,
integrated unit. This feature is designed to reduce service providers' costs by
enabling fast and easy installation. Flexible tariffing will allow service
providers to bill subscribers not only for on-air time, but also by amount of
bandwidth usage, time-of-day, or other criteria.

Complementary to its "last mile" terrestrial wireless counterpart, Adaptive
Broadband's latest satellite-based networking solution -- SpectraCast
--addresses the need for long-distance, high-bandwidth downloads like Web
content, streaming video, multimedia, distance learning and telemedicine.
Acquired as part of the acquisition of Crown Satellite in November 1998,
SpectraCast incorporates Internet Protocol (IP) and server technologies,
providing a satellite communications product capable of enabling high-speed
broadband Internet backbones, Internet data transport and virtual private
networks. Built upon a strategic platform of data transport multiplexers, IP
gateways, Ethernet-enabled receivers and network management software,
SpectraCast is designed to deliver IP multicasting capabilities to enable
enterprises to simplify the delivery of ultra-high speed IP traffic over
sophisticated networks. Satellite solutions can either augment an existing
terrestrial network or serve as a brand new network, and offer similar benefits
to those offered by terrestrial wireless solutions -- low deployment and
operations cost and ultra-high speed. See "Risk Factors-Dependence on Product
Acceptance."

SALES, MARKETING AND CUSTOMER SUPPORT

         Adaptive Broadband's sales and marketing strategy varies with the
particular market

<PAGE>

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. Information contained in Note 2 to the Company's Consolidated
Financial Statements is incorporated by reference herein from the Company's
1999 Annual Report to Shareholders.

         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 technical and marketing staff. 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. See "Risk
Factors--Dependence on Limited Number of Customers," "-Dependence on
International Sales" and "-Lengthy Sales Cycle."

MANUFACTURING

         As part of its "Value Focused" operational strategy, Adaptive
Broadband outsources the manufacturing of certain products, when appropriate.
The Company's new digital video microwave radios were among the first to be
manufactured for the Company by an outside party. In August 1999, the Company
announced a contract with Solectron Corporation to manufacture Adaptive
Broadband's AB-Access broadband wireless service equipment. This arrangement
is intended to give Adaptive Broadband the capability to meet high-volume
demand in both the U-NII (unlicensed national information infrastructure) and
MMDS (multi-channel multi-point distribution service) frequency bands. See
"Risk Factors--Dependence on Third-Party Manufacturer."

         The Company's internal 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 its
product manufacturing operations 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. Although no assurances can
be given, the Company believes that most components and subsystems are available
from existing or alternative suppliers and subcontractors. See "Risk
Factors--Dependence on

<PAGE>

Component Availability, Subcontractor Performance and Key Suppliers."

COMPETITION

         Adaptive Broadband is engaged in a highly competitive business. 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. In some
instances, especially AB-Internet Series, the main competitors are suppliers of
other technologies, such as digital subscriber lines deployed over copper
telephone lines and cable modems. In addition, many competitors participate in
the wireless broadband market, but focus on different areas of the frequency
spectrum. Among the primary competition for the Company's series of products
are:

-     AB-Infrastructure Series: Comtech, Radyne ComStream, SSE, Telecom
-     AB-Data Network Series: Alligator, Data Radio, Motorola, Wireless Inc.
-     AB-Video Series: Continental Microwave Ltd., Itelco, Nucomm
-     AB-Internet Series:

         AB-Access: ADC Telecommunications, Harris Corporation, Hybrid Networks,
         Inc., Netro, Spike Technologies, Phasecom, Stanford Telecom
         SpectraCast: Gilat, Harmonic Data, Hughes Network Systems

         In addition, well-capitalized companies such as Lucent, Cisco, and
Nokia are potential entrants into the wireless broadband market. The Company
believes that competition in its markets is based primarily on price,
performance, reputation, on-time delivery, reliability and customer support.
See "Risk Factors--Competition."

RESEARCH AND DEVELOPMENT

         Research and development expenses were $25.0 million, $18.0 million and
$16.4 million in fiscal 1999, 1998 and 1997, respectively, representing 16%, 10%
and 10% of total sales, respectively, for the same periods. The increase in
research and development spending in 1999 was mainly attributable to the
Company's investment in research and development of AB-Access products,
including supporting the expanded number of AB-Access field trials for
prospective customers. Additionally, the Company has increased investment in
development of broadband satellite products, such as the SpectraCast products
and the Multimedia Integrated Digital Access Systems (MIDAS). The increase in
research and development expenses as a percentage of revenue in 1999 over 1998
was also due to the reduction in 1999 revenues. The Company expects to continue
to commit substantial resources to product development and engineering in future
periods. As a result, the Company anticipates that research and development
expenses will increase in future periods as it continues to focus its efforts on
developing wireless broadband data network products to address the digital
voice, video and data markets. In addition, management may consider acquiring
additional technologies complementary to the Company's business through
strategic acquisitions. See "Risk Factors--Rapid Technological Change" and
"-Dependence on Product Acceptance."

<PAGE>


PATENTS AND LICENSES

    Historically, 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. When the Company's technology offers a distinct competitive
advantage, it does employ the use of patents, such as its patent-pending
TwinStream digital and analog radio product. Additionally, the Company is
seeking patent protection for the technologies and techniques employed in
AB-Access. See "Risk Factors--Limited Protection of Proprietary Rights" and
"-Risks of Third-Party Claims of Infringement."

EMPLOYEES

    At June 30, 1999, Adaptive Broadband had 846 employees, 476 of whom were
engaged in production and production support, 177 in research and development
and other engineering support, 102 in marketing and 91 in general and
administration functions. In support of the Company's strategic plan to
pursue new commercial markets, Adaptive Broadband initiated a 6% reduction in
force during the fourth quarter of the fiscal year. None of the employees is
represented by a labor union. The Company believes that its employee
relations are good.

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. See "Risk
Factors--Government Regulation."

BACKLOG

    Rules require that you estimate amount of backlog not expected to be
filled in current fiscal year. At June 30, 1999, the Company's backlog of
undelivered orders was $37.4 million compared with $26.0 million at June 30,
1998. Of the $37.4 million fiscal 1999 backlog, $17.4 million or 47% is for
Satellite Communications Products and $20.0 million or 53% is for Terrestrial
Wireless Products. 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


<PAGE>

in backlog when the Company receives a firm contract or purchase order which
identifies product quantities and delivery dates (which are required to be
within 12 months as mandated by Adaptive Broadband policy). 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. See "Risk Factors - Dependence on Limited Number of
Customers" and "- Cash Overruns and Potential Cancellation 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 as of June 30, 1999:

<TABLE>
<CAPTION>

                                               Lease           No. of        Square
      Occupant                                 Expires         Buildings     Footage     Location
--------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>           <C>         <C>
1.    Corporate Headquarters                   2000                 1          41,472    Sunnyvale, CA

2.    Satellite Communications Product Group   2006                 2         113,580    Tempe, AZ
                                               2000                 1           1,944    Tempe, AZ
                                               1999                 1           7,551    Elkhart, IN
                                               1999                 1           1,944    Phoenix, AZ

3.    Terrestrial Wireless Product Group       (owned)              1          56,060    Rochester, NY
                                               2002                 1          71,500    Chelmsford, MA
                                               2004                 1          49,100    Billerica, MA

4.    Sales Support                            2000                 1             750    Ellicott City, MD
                                               Month-to-month       1             112    Southlake, TX
                                               2000                 1             217    Woburn, MA
                                               2009                 1          12,448    Cambridge, UK
                                               1999                 1           1,143    Beijing, China
                                               2000                 1           4,000    Ocean Reef, Australia
                                               2000                 1             270    Singapore
</TABLE>


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

ITEM 3.  LEGAL PROCEEDINGS

    In July 1999, Northrop Grumman filed a lawsuit against the Company
alleging that the Company failed to disclose certain events and information
as required by the terms of the agreement pursuant to which Northrop Grumman
acquired the Government Division in April 1999. No damages have been
specified. The Company believes that it has strong defenses and


<PAGE>

plans to vigorously defend the lawsuit filed by Northrop Grumman. No
provisions have been made for expenses that may be incurred to resolve the
lawsuit, and, although no assurance can be given, the Company believes final
resolution of the Northrop Grumman allegations will not have a material
adverse effect on the Company's financial position, results of operations, or
cash flows.

    In May 1995, the Company's MN division entered into certain agreements
with Nokia Telecommunications Oy (Nokia) pursuant to which MN was to provide
to Nokia certain microwave radios and related software and services, and was
to carry out certain development programs. In September 1997, Nokia informed
MN of a purported failure of certain of the products sold to Nokia to meet
certain contractual specifications. MN was sold to Tadiran in April 1998 and
under the terms of the sale agreement, Tadiran assumed and indemnified the
Company with respect to the Nokia claims. Tadiran has now taken the position
that the Company is responsible for the Nokia claims, based upon allegations
that the Company failed to provide adequate disclosures and financial
reserves with respect to such claims. In September 1998, the Company received
notice from Nokia that Nokia has decided to terminate the May 1995
agreements. Also in September 1998, Nokia began arbitration proceedings to
recover damages, which are claimed to be $40.6 million, which include loss of
profits and goodwill, and damage to trade and manufacturing secrets. The
Company believes that it has strong defenses and plans to vigorously defend
the Nokia claims. In May 1999, the Company began arbitration proceedings
against Tadiran, primarily to determine that Tadiran is responsible for the
Nokia claims. The Company believes that it has strong claims against Tadiran.
No accruals have been recorded for expenses that may be incurred to resolve
the dispute, and, although no assurance can be given, the Company believes
final resolution of this matter will not have a material adverse effect on
the Company's financial position, results of operations or cash flows.

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               51       Chairman of the Board, President
                                             and Chief Executive Officer

Donna S. Birks                      43       Executive Vice President and Chief
                                             Financial Officer

George G. Arena                     46       Executive Vice President


<PAGE>

Dr. Daniel L. Scharre               48       Executive Vice President and Chief Technology
                                             Officer and Chief Executive Officer of Adaptive
                                             Broadband Limited, a wholly owned subsidiary

Kenneth  J. Wees                    56       Vice President, General Counsel and
                                             Secretary
</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.

         Donna S. Birks joined the Company in December 1997 as Executive Vice
President and Chief Financial Officer. From August 1994 to June 1997, Ms.
Birks was Vice President, Administration and Chief Financial Officer of
ComStream Inc., an international supplier of satellite communications
networks and products. From January 1992 to August 1994, Ms. Birks was Vice
President and Chief Financial Officer of Macrovision Corporation, a video
technology licensing company and she currently serves as a director of
Macrovision. From December 1982 to January 1992, Ms. Birks served in several
senior executive positions at Contel ASC (purchased by GTE Spacenet in 1991),
a satellite communications transmission company. She holds a B.S. in Business
Administration form from George Mason University, a M.S. in Finance from
American University and is a Certified Public Accountant.

         George G. Arena joined the Company in 1985 as Vice President, Sales
and Marketing for its Microwave Data Systems (MDS) subsidiary. Later, he
became Sr. Vice President, Operations and then President of MDS in 1994. He
became an Executive Vice President of California Microwave, Inc. and
President of its Terrestrial Wireless Division (a combination of MDS and the
Company's Microwave Radio Communications unit) in April 1998. Mr. Arena holds
a M.B.A. from the Rochester Institute of Technology and a B.S. in Industrial
Distribution from Clarkson College of Technology.

         Dr. Daniel L. Scharre joined the Company in September 1997 as Vice
President and Chief Technology Officer. In April 1998, Dr. Scharre became
Executive Vice President of the Company and in August 1998, he was appointed
Chief Executive Officer of the Company's U.K.-based wholly owned subsidiary,
Adaptive Broadband Limited. From November 1996 to September 1997, Dr. Scharre
was Vice President and Chief Technical Officer of ComStream, Inc. From February
1994 to November 1996, Dr. Scharre was Vice President and General Manager of
Ilex Systems, a satellite communications and equipment company. From June 1988
to December 1993, he held executive positions at Loral Western Development Labs,
where he led and managed the development of a digital satellite communications
system. He has a B.S. in


<PAGE>

physics from Caltech, a Ph.D. in physics from the University of California at
Berkeley and a M.B.A. from Santa Clara University.

         Kenneth J. Wees joined the Company in May 1998 as Vice President and
General Counsel, and became Secretary in September 1998. From September 1991
to May 1998, Mr. Wees served as General Counsel of Cable & Wireless, Inc.,
the American subsidiary of Cable and Wireless plc, an international supplier
of voice, data, messaging and Internet services. Prior to this, he worked at
GTE and Booz Allen & Hamilton in a variety of legal positions. Mr. Wees holds
a B.A. degree from Marquette University and a Juris Doctor degree from
American University's Washington College of Law.

PART II

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

         The stock and stock price information on page 41 of Adaptive
Broadband's 1999 Annual Report to Shareholders is incorporated herein by
reference.

ITEM 6.  SELECTED FINANCIAL DATA

         The selected financial data on page 40 of Adaptive Broadband's 1999
Annual Report to Shareholders 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 33 through 39 of Adaptive Broadband's 1999
Annual Report to Shareholders 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 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's exposure to market risk for changes in interest rates relates
primarily to the Company's investment portfolio and long-term debt
obligations. The Company maintains a strict investment policy designed for
the safety and preservation of its invested funds by limiting default risk,
market risk, and reinvestment risk. The Company's investments consist
primarily of commercial paper, U.S. Treasury notes and money market funds,
all with maturities at the date of purchase of 90 days or less. Floating rate
investments may produce less income than expected if interest rates fall. The
table below presents notional amounts and related weighted-average interest
rates by year of maturity for the Company's investment portfolio and
long-term debt obligations (in thousands, except percentages).


<PAGE>


<TABLE>
<CAPTION>

                                     2000         2001       2002          2003
<S>                                 <C>           <C>        <C>           <C>
Cash and cash equivalents           48,887         --         --            --
Average rate                          5.1%         --         --            --

Total investment securities         48,887         --         --            --
Average rate                          5.1%         --         --            --

Convertible Subordinated Notes        --           --         --           $57,500
Fixed rate                            --           --         --             5.25%
</TABLE>

The Company mitigates default risk by attempting to invest in high credit
quality securities and by positioning its portfolio to respond to a
significant reduction in a credit rating of any investment issuer or
guarantor. The Company's portfolio includes only marketable securities with
active secondary or resale markets to ensure portfolio liquidity and
maintains a prudent amount of diversification.

The Company has no cash flow exposure due to rate changes for its $57.5 million
Convertible Subordinated Notes.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements on pages 20 through 31, and
the financial results by fiscal quarter information on page 41, of Adaptive
Broadband's 1999 Annual Report to Shareholders 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 Adaptive Broadband 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, 1999 (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."

ITEM 11.  EXECUTIVE COMPENSATION


<PAGE>

         Incorporated by reference from portions of the Proxy Statement
under the captions "Compensation of Directors and Executive Officers,"
"Compensation Committee Interlocks and Insider Participation" and "Certain
Stockholders-Section 16(a) Beneficial Ownership Reporting Compliance."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
ADAPTIVE BROADBAND CORPORATION

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

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Incorporated by reference from portion of the Proxy Statement
under the caption "Compensation of Directors and Executive Officers-Employment
Arrangements."

                                  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 Adaptive Broadband Corporation 1999 Annual Report to
                Shareholders

                Report of Ernst & Young LLP, Independent Auditors (page 32 of
                1999 Annual Report to Shareholders)

                Consolidated statements of operations for each of the three
                years in the period ended June 30, 1999 (page 20 of 1999
                Annual Report to Shareholders)

                Consolidated balance sheets as of June 30, 1999 and 1998 (page
                21 of 1999 Annual Report to Shareholders)

                Consolidated statements of shareholders' equity for each of the
                three years in the period ended June 30, 1999 (page 22 of 1999
                Annual Report to Shareholders)

                Consolidated statements of cash flows for each of the three
                years in the period ended June 30, 1999 (page 23 of 1999
                Annual Report to Shareholders)

                Notes to Consolidated Financial Statements (pages 24 through 31
                of 1999

<PAGE>


                        Annual Report to Shareholders)

With the exception of the information incorporated by reference into Items 5,
6, 7 and 8 of this Form 10-K, the Adaptive Broadband Corporation 1999 Annual
Report to Shareholders is not deemed filed as part of this report.

         (a) 2.   FINANCIAL STATEMENT SCHEDULES

                      Included in Part IV of this report:

                       Schedules for the three years ended June 30, 1999
                  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 herein by reference.)

         4.4      Rights Agreement dated as of July 21, 1999 among Adaptive
                  Broadband Corporation and BankBoston, N.A. (Exhibit to the
                  Company's Form 8-K filed on July 21, 1999; incorporated
                  herein by reference.)

         4.5      Form of Indenture, including form of Convertible Subordinated
                  Note, relating to $57,500,000 of Convertible Subordinated
                  Notes. (Exhibit to the Company's Form S-3 filed on November
                  17, 1993; incorporated herein by reference.)

         10.1     Employee Stock Purchase Plan, as amended through August
                  1998.** (Exhibit to the Company's Form 10-K for its fiscal
                  year ended June 30, 1998; incorporated herein by reference.)

         10.2     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.)

         10.3     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.)

<PAGE>

         10.4     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.)

         10.5     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.)

         10.6     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.)

         10.7     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.)

         10.8     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 reference.)

         10.9     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
                  reference.)

         10.10    1992 Stock Option Plan, as amended. ** (Exhibit to Company's
                  Form 10-K for the fiscal year ended June 30, 1997;
                  incorporated herein by reference.)

         10.11    Amendment to letter agreement with Philip F. Otto,** dated
                  January 10, 1997. (Exhibit to the Company's Form 10-K for its
                  fiscal year ended June 30, 1997; incorporated herein by
                  reference).

         10.12    Letter Agreement with Frederick D. Lawrence**, dated July 16,
                  1997. (Exhibit to Company's Form 10-K for its fiscal year
                  ended June 30, 1997; incorporated herein by reference).

         10.13    Severance Agreement entered into in May 1999 with Donald
                  Anderson.**

         10.14    Letter Agreement with Donna S. Birks, dated December 12,
                  1997.** (Exhibit to Company's Form 10-K for its fiscal year
                  ended June 30, 1998; incorporated herein by reference).

         10.15    Severance Agreement entered into in July 1999 with Donna S.
                  Birks.**

         10.16    Severance Agreement entered into in July 1999 with George
                  Arena.**

<PAGE>

         10.17    Severance Agreement entered into in July 1999 with Daniel
                  Scharre.**

         10.18    Severance Agreement entered into in July 1999 with Kenneth
                  Wees.**

         10.19    Promissory Note issued to Frederick D. Lawrence, as amended
                  through September 21, 1999

         10.20    Asset Purchase Agreement between L-3 Communications
                  Corporation and California Microwave, Inc. dated as of
                  December 19, 1997 and amendment thereto. (Exhibits to the
                  Company's Form 8-K filed on February 13, 1998; incorporated
                  herein by reference.)

         10.21    Asset Purchase Agreement between Tadiran Ltd. and California
                  Microwave, Inc., dated as of March 1, 1998 and amendment
                  thereto. (Exhibit to the Company's Form 8-K filed on April 27,
                  1998; incorporated herein by reference.)

         10.22    Stock Purchase Agreement between Telscape International, Inc.,
                  California Microwave Services Division, Inc. and California
                  Microwave, Inc. dated as of May 8, 1998. (Exhibit to the
                  Company's Form 8-K filed on June 5, 1998; incorporated herein
                  by reference.)

         10.23    Agreement, dated August 20, 1998, between (1) Olivetti
                  Research Limited, Olivetti Telemedia S.p.A. and Oracle
                  Corporation and (2) Pitcomp 174 Limited (a wholly-owned
                  subsidiary of the Company), to be renamed Adaptive Broadband
                  Limited. (Exhibit to the Company's Form 10-Q for the period
                  ended September 30, 1998; incorporated herein by reference.)

         10.24    Asset purchase agreement, dated November 19, 1998, between
                  California Microwave, Inc. and Crown International, Inc.
                  (Exhibit to the Company's Form 10-Q for the period ended
                  December 31, 1998; incorporated herein by reference.)

         10.25    Asset Purchase Agreement dated March 10, 1999 between Northrop
                  Grumman Corporation and California Microwave, Inc. (Exhibit to
                  the Company's Form 8-K filed on March 17, 1999; incorporated
                  herein by reference.)

         10.26    Lease of premises located in Billerica Office Park, Billerica,
                  Massachusetts.

         10.27    Lease of premises located in The Westbrook Center, Milton
                  Road, Cambridge, England.

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

         21       List of subsidiaries.

<PAGE>

         23       Consent of Ernst & Young LLP, Independent Auditors.

         24       Power of Attorney.

         27       Financial Data Schedule for the fiscal year ended
                  June 30, 1999.

         Exhibits are available from the Registrant upon request.

         **       Compensatory plan or arrangement.

         (b)      REPORTS ON FORM 8-K

                  The following reports on Form 8-K were filed during the last
                  fiscal quarter of fiscal 1999:

                           Form 8-K filed on July 21, 1999 announcing the
                           adoption of a new Share Purchase Rights Plan.


<PAGE>



SIGNATURES

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

Dated:  September 24, 1999                  ADAPTIVE BROADBAND CORPORATION.


                                            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.


 /s/ Frederick D. Lawrence          President and Chief           September 24,
--------------------------          Executive Officer (principal  1999
FREDERICK D. LAWRENCE               executive officer) and
                                    Director



/s/ Donna S. Birks                  Executive Vice President      September 24,
------------------                  and Chief Financial Officer   1999
DONNA S. BIRKS                      (principal financial and
                                    accounting officer)








/s/ William B. Marx, Jr.*           Director                      September 24,
-------------------------                                         1999
WILLIAM B. MARX, JR.


/s/ Terry W. Ward*                  Director                      September 24,
-------------------                                               1999
TERRY W. WARD


<PAGE>

/s/ Frederick W. Whitridge, Jr.*    Director                      September 24,
--------------------------------                                  1999
FREDERICK W. WHITRIDGE,
JR.


/s/ George A. Joulwan*              Director                      September 24,
----------------------                                            1999
GEORGE A. JOULWAN


/s/ Leslie G. Denend*               Director                      September 24,
---------------------                                             1999
LESLIE G. DENEND


*By /s/ KENNETH J. WEES
    --------------------
     KENNETH J. WEES
     Attorney-in-fact


<PAGE>

                         ADAPTIVE BROADBAND CORPORATION
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                      Years ended June 30, 1999, 1998, 1997
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                              Balance at      Additions        Other                          Balance
                                               beginning       Charged       Additions                        at end
                                                of year       to income     (transfers)      Deductions       of year

                                              ------------   -------------  -------------   --------------  ------------
<S>                                           <C>            <C>            <C>             <C>             <C>
1999
----
Allowance for doubtful accounts               $     1,166    $        566   $          0      $       602   $     1,130
Estimated liability for warranties                  2,098           3,820              0            3,459         2,459
Restructuring reserves                              7,043           3,325         (3,724)(3)        3,841         2,803
Discontinued operations reserve                     6,748           7,000              0            2,660        11,088


1998
----
Allowance for doubtful accounts               $       943    $        719   $        (88)(1)  $       408   $     1,166
Estimated liability for warranties                  1,791           3,577            (50)(1)        3,220         2,098
Restructuring reserves                              7,512           4,107              0            4,576         7,043
Discontinued operations reserve                    12,538          25,214              0           31,004         6,748


1997
----
Allowance for doubtful accounts                       798             365              0              220           943
Estimated liability for warranties                  1,054           3,637              0            2,900         1,791
Restructuring reserves                              2,876             300          5,520 (2)        1,184         7,512
Discontinued operations reserve                         0               0         12,538 (2)            0        12,538
</TABLE>


(1)      Sales of Service Division during 1998.
(2)      Transfers from discontinued operations.
(3)      Sales of Government Division during 1999.

<PAGE>

                                  EXHIBIT INDEX

EXHIBIT                                DESCRIPTION
--------------------------------------------------

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 herein by reference.)

4.4      Rights Agreement dated as of July 21, 1999 among Adaptive Broadband
         Corporation and BankBoston, N.A. (Exhibit to the Company's Form 8-K
         filed on July 21, 1999; incorporated herein by reference.)

4.5      Form of Indenture, including form of Convertible Subordinated Note,
         relating to $57,500,000 of Convertible Subordinated Notes. (Exhibit
         to the Company's Form S-3 filed on November 17, 1993; incorporated
         herein by reference.)

10.1     Employee Stock Purchase Plan, as amended through August 1998.**
         (Exhibit to the Company's Form 10-K for its fiscal year ended June
         30, 1998; incorporated herein by reference.)

10.2     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.)

10.3     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.)

10.4     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.)

10.5     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.)

10.6     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.)

10.7     Amendment to letter agreement with Philip F. Otto**, dated August
         15, 1994.

<PAGE>

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

10.8     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 reference.)

10.9     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 reference.)

10.10    1992 Stock Option Plan, as amended. ** (Exhibit to Company's Form 10-K
         for the fiscal year ended June 30, 1997; incorporated herein by
         reference.)

10.11    Amendment to letter agreement with Philip F. Otto,** dated January
         10, 1997. (Exhibit to the Company's Form 10-K for its fiscal year
         ended June 30, 1997; incorporated herein by reference).

10.12    Letter Agreement with Frederick D. Lawrence**, dated July 16, 1997.
         (Exhibit to Company's Form 10-K for its fiscal year ended June 30,
         1997; incorporated herein by reference).

10.13    Severance Agreement entered into in May 1999 with Donald Anderson.**

10.14    Letter Agreement with Donna S. Birks, dated December 12, 1997.**
         (Exhibit to Company's Form 10-K for its fiscal year ended June 30,
         1998; incorporated herein by reference).

10.15    Severance Agreement entered into in July 1999 with Donna S. Birks.**

10.16    Severance Agreement entered into in July 1999 with George Arena.**

10.17    Severance Agreement entered into in July 1999 with Daniel Scharre.**

10.18    Severance Agreement entered into in July 1999 with Kenneth Wees.**

10.19    Promissory Note issued to Frederick D. Lawrence, as amended through
         September 21, 1999

10.20    Asset Purchase Agreement between L-3 Communications Corporation and
         California Microwave, Inc. dated as of December 19, 1997 and
         amendment thereto. (Exhibits to the Company's Form 8-K filed on
         February 13, 1998; incorporated herein by reference.)

10.21    Asset Purchase Agreement between Tadiran Ltd. and California
         Microwave, Inc.,

<PAGE>

         dated as of March 1, 1998 and amendment thereto. (Exhibit to the
         Company's Form 8-K filed on April 27, 1998; incorporated herein by
         reference.)

10.22    Stock Purchase Agreement between Telscape International, Inc.,
         California Microwave Services Division, Inc. and California Microwave,
         Inc. dated as of May 8, 1998. (Exhibit to the Company's Form 8-K filed
         on June 5, 1998; incorporated herein by reference.)

10.23    Agreement, dated August 20, 1998, between (1) Olivetti Research
         Limited, Olivetti Telemedia S.p.A. and Oracle Corporation and (2)
         Pitcomp 174 Limited (a wholly-owned subsidiary of the Company), to
         be renamed Adaptive Broadband Limited. (Exhibit to the Company's
         Form 10-Q for the period ended September 30, 1998; incorporated
         herein by reference.)

10.24    Asset purchase agreement, dated November 19, 1998, between
         California Microwave, Inc. and Crown International, Inc. (Exhibit
         to the Company's Form 10-Q for the period ended December 31, 1998;
         incorporated herein by reference.)

10.25    Asset Purchase Agreement dated March 10, 1999 between Northrop
         Grumman Corporation and California Microwave, Inc. (Exhibit to the
         Company's Form 8-K filed on March 17, 1999; incorporated herein by
         reference.)

10.26    Lease of premises located in Billerica Office Park, Billerica,
         Massachusetts.

10.27    Lease of premises located in The Westbrook Center, Milton Road,
         Cambridge, England.

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

21       List of subsidiaries.

23       Consent of Ernst & Young LLP, Independent Auditors.

24       Power of Attorney.

27       Financial Data Schedule for the fiscal year ended June 30, 1999.

Exhibits are available from the Registrant upon request.

**     Compensatory plan or arrangement.