##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-31635
      Endwave Corporation
 (Exact name of registrant as
    specified in its charter)
      Delaware

95-4333817(State of
    incorporation)

(I.R.S. Employer Identification
    No.)130 Baytech Drive
    San Jose, CA(Address of principal
    executive offices)

95134(Zip
    code)   (408) 522-3100
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value per share

The NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company þ(Do not check
    if a smaller reporting company)   Rule 12b-2 o þ




---



##### 





ENDWAVE
    CORPORATION
  FORM 10-K
  Year
    Ended December 31, 2009
  TABLE OF
    CONTENTS
   
 Page No.PART IItem 1.


Business


4Item 1A.


Risk Factors


13Item 1B.


Unresolved Staff Comments


22Item 2.


Properties


22Item 3.


Legal Proceedings


23PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


23Item 6.


Selected Consolidated Financial Data


26Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


26Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


40Item 8.


Financial Statements and Supplementary Data


41Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


71Item 9A.


Controls and Procedures


71Item 9B.


Other Information


71PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


72Item 11.


Executive Compensation


77Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


87Item 13.


Certain Relationships and Related Transactions
    and Director Independence


89Item 14.


Principal Accounting Fees and Services


90PART IVItem 15.


Exhibits and Financial Statement Schedules


90SIGNATURES


95EX-10.8EX-10.14EX-23.1EX-31.1EX-31.2EX-32.1   2




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FORWARD-LOOKING
    INFORMATION
   3




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##### Table of Contents



PART I  Item 1.
    Business  Introduction
    
    Our transceiver modules that serve as the core RF
    sub-system
    in digital microwave radios are produced for telecommunication
    network original equipment manufacturers and system integrators
    located throughout the world, collectively referred to in this
    report as telecom OEMs. Telecom OEMs that purchased our modules
    accounted for nearly all of our revenues during 2009. Total
    revenues from our two largest telecom OEM customers, Nokia
    Siemens Networks and its manufacturing partner, SRI Radio
    Systems, and Nera ASA accounted for 88% of our 2009 revenues.
    Our semiconductor product line consists of a wide variety of
    monolithic microwave integrated circuits, or MMICs, including
    amplifiers, voltage controlled oscillators, up and down
    converters, variable gain amplifiers, voltage variable
    attenuators, fixed attenuators and filters. These devices are
    used not only in microwave radio transceiver modules, but may
    also find wide application in other types of telecommunications
    systems, as well as defense, homeland security, instrumentation
    and consumer systems. Our semiconductor product line was
    formally introduced to the market in the latter part of 2009 and
    has not yet become a significant source of revenue for us.  sub-system
  Industry
    Background and Markets
  High-Frequency
    RF Technology
  Microwave
    technology millimeter wave technology microwave
    Telecommunication
    Networks
    Cellular Telephone Backhaul. cellular backhaul
 4




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##### Table of Contents



Carrier Class Trunking.
  Private Voice and Data Networks.
  Fixed Wireless Access Network
    Backhaul.
    Defense
    and Homeland Security Markets
    Radar Systems.
  Signal Intelligence Systems.
 5




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##### Table of Contents



High Capacity Communications.
  Long Distance Personnel
    Detection.
    Our
    Business Approach
    Technical Depth.
  Innovative Technology.
  Semiconductor Devices.
  Low Cost. sub-contractors.
  Flexible Supply Chain Capabilities. and/or
  component-to-system
  Extensive Technical Expertise.
 6




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A Commitment to Develop Next-Generation
    Technology.
  Comprehensive Approach to Cost-Effective
    Manufacturing.
  
    We design our products to be readily manufacturable and able to
    tolerate a wide range of material and manufacturing process
    variations. This speeds the flow of work, reduces the required
    level of touch labor and minimizes rework.
    Semiconductors are both a critical technical element and a major
    cost component of our products. Our ability to custom design
    these devices allows us to optimize them for cost and
    performance and to achieve significant cost savings by having
    them fabricated in low cost, third-party foundries.
    For many of our products, we have implemented automated assembly
    techniques that reduce labor content and enhance both product
    uniformity and quality.
    Testing is often a large part of the manufacturing effort and we
    have developed extensive automated testing capabilities that
    speed this process and differentiate us from the labor-intensive
    methods often used in our industry. We use state of the art
    information technology systems to store, analyze and transmit
    test data.
    Because our products are highly manufacturable, we have been
    able to contract with third-party, primarily offshore,
    manufacturers for even greater cost savings. We began the
    transition to outsourced manufacturing in 2002, most notably to
    HANA Microelectronics Co., Ltd. (or HANA), a
    Thailand-based contract manufacturer, and today almost all of
    our manufacturing operations utilize an outsourced approach.
    This transition has significantly improved our product margins
    and enables us to adjust rapidly, efficiently and flexibly to
    our customers varying quantity and product mix
    requirements, which are often created by unexpected needs and
    variations in demand.
    The cost of raw materials and components employed in high
    frequency devices and products are a major part of the overall
    manufacturing cost. We have reduced the cost of these items by
    re-designing them, leveraging our purchasing power and selecting
    more cost-effective suppliers. As an outgrowth of our
    operational presence in Asia, we continue to identify low-cost,
    high-quality Asian-based suppliers for several of the raw
    materials and components used in our products.
    Our high unit volumes enable us to achieve lower manufacturing
    costs than many of our competitors as we increase our materials
    purchasing power, amortize our overhead expenses over a larger
    number of units and gain labor efficiencies.  Products
    and Technology
  Integrated
    Transceiver
    Sub-system
    Modules
  sub-system
 7




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##### Table of Contents



sub-system.
    
    MMIC (Monolithic Microwave Integrated
    Circuit).  In this RF semiconductor technology,
    individual devices, components and interconnects are patterned
    onto a semiconductor substrate (typically gallium arsenide, or
    GaAs) in a manner similar to industry standard integrated
    circuit fabrication techniques. We have developed a large
    repertoire of custom designed MMICs that have been optimized for
    cost, performance and manufacturability.
    MLMStm

    (Multi-Lithic Micro System).  This is a
    proprietary RF semiconductor circuit technology that we have
    developed to overcome the shortcomings of conventional circuit
    technologies. This technology consists of a small multi-layer RF
    substrate onto which individual devices (transistors and diodes)
    are attached and electrically connected without the use of bond
    wires. The features of this technology are numerous including
    reduced design difficulty, elimination of individual tuning, low
    cost substrate materials, automated manufacture, use of multiple
    semiconductor technologies in the same circuit (i.e.
    multi-lithic), integrated passive circuit elements and the
    ability to provide a complete system on a chip
    functionality.  tm
  Semiconductor
    Devices
  sub-system
  Sales and
    Marketing
     8




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##### Table of Contents



Customers
    Divestitures
    Divestiture

Structure

Key TermsTo Microsemi, Inc.  April 2009

Asset sale of all assets associated with our Defense and
    Security RF module business including intellectual property,
    designs, customer contracts, inventories and equipment

   All cash transaction
       Endwave non-competition constraints
    limited to module-level products that enable the transmission,
    reception, and processing of high frequency signals in defense
    electronics and security systems for three years following
    divestiture   Competition
          
    Product pricing and the ability to offer low-cost solutions;
    Technical leadership and product performance;
    Strong customer relationships;
    Product breadth;
    Time-to-market
    in the design and manufacturing of products; and
    Logistical flexibility, manufacturing capability and scalable
    capacity. 9




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Research
    and Development
      Semiconductor Design Capabilities. off-the-shelf
  Breadth of Expertise.
  Computer Modeling Capabilities.
  Extensive Library of Designs. sub-system time-to-market
  Automated Testing Processes.
    Patents
    and Intellectual Property Rights
    patent-by-patent
   10




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Operations
      9001-2000,
  work-in-process
  Backlog
   11




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Governmental
    Regulation
    Seasonality
    Employees
    Available
    Information
  (408) 522-3100. www.endwave.com Form 10-K, Form 10-Q, Form 8-K
  1-800-SEC-0330. http://www.sec.gov
 12




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Item 1A.
    Risk
    Factors  You should consider carefully the following risk factors as
    well as other information in this report before investing in any
    of our securities. If any of the following risks actually occur,
    our business, operating results and financial condition could be
    adversely affected. This could cause the market price of our
    common stock to decline, and you may lose all or part of your
    investment.
  Risks
    Relating to Our Business
  We
    have had a history of losses and may not be profitable in the
    future.
    We
    depend on the mobile communication industry for substantially
    all of our revenues. As this industry is negatively impacted by
    the global economic downturn, our revenues and our profitability
    could continue to suffer. In addition, consolidation in this
    industry could result in delays or cancellations of orders for
    our products, adversely impacting our results of
    operations.
      The
    current turmoil in the global economy could adversely impact our
    operations and financial results.
    Our
    semiconductor product line will require us to incur significant
    expenses and may not be successful.
   13




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##### Table of Contents



Because
    of the shortages of some components and our dependence on single
    source suppliers and custom components, we may be unable to
    obtain an adequate supply of components of sufficient quality in
    a timely fashion, or we may be required to pay higher prices or
    to purchase components of lesser quality.
      
    semiconductor devices;
    application-specific monolithic microwave integrated circuits;
    voltage-controlled oscillators;
    voltage regulators;
    unusual or low usage components;
    surface mount components compliant with the EUs
    Restriction of Hazardous Substances, or RoHS, Directive;
    high-frequency circuit boards; and
    custom connectors.    We
    depend on a small number of key customers in the mobile
    communication industry for a significant portion of our
    revenues. If we lose any of our major customers or there is any
    material reduction in orders for our products from any of these
    customers, our business, financial condition and results of
    operations would be adversely affected.
   14




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Our
    operating results may be adversely affected by substantial
    quarterly and annual fluctuations and market
    downturns.
    Implementing
    our acquisition strategy could result in dilution to our
    stockholders and operating difficulties leading to a decline in
    revenues and operating profit.
    
    diversion of our management from the operation of our core
    business;
    assimilating the acquired operations and personnel;
    integrating information technology and reporting systems;
    retention of key personnel;
    retention of acquired customers; and
    implementation of controls, procedures and policies in the
    acquired business.    We
    rely on the semiconductor foundry operations of third-party
    semiconductor foundries to manufacture the integrated circuits
    sold directly to our customers or contained in our products. The
    loss of our relationship with any of these foundries without
    adequate notice would adversely impact our ability to fill
    customer orders and could damage our customer
    relationships.
     15




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Competitive
    conditions often require us to reduce prices and, as a result,
    we need to reduce our costs in order to be
    profitable.
  per-unit
  We
    rely heavily on a Thailand facility of HANA, a contract
    manufacturer, to produce our RF modules and to package our
    microwave and millimeter wave integrated circuits. If HANA is
    unable to produce these modules in sufficient quantities or with
    adequate quality, or it chooses to terminate our manufacturing
    arrangement, we will be forced to find an alternative
    manufacturer and may not be able to fulfill our production
    commitments to our customers, which could cause sales to be
    delayed or lost and could harm our reputation.
    Our
    products may contain component, manufacturing or design defects
    or may not meet our customers performance criteria, which
    could cause us to incur significant repair expenses, harm our
    customer relationships and industry reputation, and reduce our
    revenues and profitability.
    We may
    not be able to design our products as quickly as our customers
    require, which could cause us to lose sales and may harm our
    reputation.
   16




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We
    depend on our key personnel. Skilled personnel in our industry
    can be in short supply. If we are unable to retain our current
    personnel or hire additional qualified personnel, our ability to
    develop and successfully market our products would be
    harmed.
      The
    length of our sales cycle requires us to invest substantial
    financial and technical resources in a potential sale before we
    know whether the sale will occur. There is no guarantee that the
    sale will ever occur and if we are unsuccessful in designing
    integrated circuits and module products for a particular
    generation of a customers products, we may need to wait
    until the next generation of that product to sell our products
    to that particular customer.
   17




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We may
    not be able to manufacture and deliver our products as quickly
    as our customers require, which could cause us to lose sales and
    would harm our reputation.
    
    the failure of a supplier to deliver needed components on a
    timely basis or with acceptable quality;
    lack of sufficient capacity;
    poor manufacturing yields;
    equipment failures;
    manufacturing personnel shortages;
    transportation disruptions;
    changes in import/export regulations;
    infrastructure failures at the facilities of our offshore
    contract manufacturer;
    natural disasters;
    acts of terrorism; and
    political instability.    Although
    we do have long-term commitments from many of our customers,
    they are not for fixed quantities of product. As a result, we
    must estimate customer demand, and errors in our estimates could
    have negative effects on our cash, inventory levels, revenues
    and results of operations.
     18




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Any
    failure to protect our intellectual property appropriately could
    reduce or eliminate any competitive advantage we
    have.
         19




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We are
    exposed to fluctuations in the market values of our investment
    portfolio.
  sub-prime
  Risks
    Relating to Our Industry
  Our
    failure to compete effectively could reduce our revenues and
    margins.
    Our
    failure to comply with any applicable environmental regulations
    could result in a range of consequences, including fines,
    suspension of production, excess inventory, sales limitations
    and criminal and civil liabilities.
    Government
    regulation of the communications industry could limit the growth
    of the markets that we serve or could require costly alterations
    of our current or future products.
    Our
    failure to continue to develop new or improved semiconductor
    process technologies could impair our competitive
    position.
   20




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The
    segment of the semiconductor industry in which we participate is
    intensely competitive, and our inability to compete effectively
    would harm our business.
      Risks
    Relating to Ownership of Our Stock
  The
    market price of our common stock has fluctuated historically and
    is likely to fluctuate in the future.
    
    our financial performance or the performance of our competitors;
    the purchase or sale of common stock, short-selling or
    transactions by large stockholders;
    technological innovations or other significant trends or changes
    in the markets we serve;
    successes or failures at significant product evaluations or site
    demonstrations;
    the introduction of new products by us or our competitors;
    acquisitions, strategic alliances or joint ventures involving us
    or our competitors;
    decisions by major customers not to purchase products from us or
    to pursue alternative technologies;
    decisions by investors to de-emphasize investment categories,
    groups or strategies that include our company or industry;
    market conditions in the industry, the financial markets and the
    economy as a whole; and
    the low trading volume of our common stock.   21




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##### Table of Contents



We
    have a few shareholders that each own a large percentage of our
    outstanding capital stock and, as a result of their significant
    ownership, are able to significantly affect the outcome of
    matters requiring stockholder approval.
    Our
    certificate of incorporation, bylaws and arrangements with
    executive officers could delay or prevent a change in
    control.
  2 3
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties       22




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Item 3.
    Legal
    Proceedings       PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Information
    Relating to our Common Stock
    High

LowFiscal Year Ended December 31, 2008First Quarter

$
7.69


$
5.56Second Quarter

$
7.53


$
5.38Third Quarter

$
7.00


$
4.77Fourth Quarter

$
5.49


$
1.93Fiscal Year Ended December 31, 2009First Quarter

$
2.51


$
1.36Second Quarter

$
3.08


$
1.71Third Quarter

$
3.43


$
2.24Fourth Quarter

$
3.05


$
2.25     Dividend
    Policy
   23




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##### Table of Contents



Equity
    Compensation Plan Information
    Number ofSecuritiesRemainingAvailablefor IssuanceUnder EquityNumber of


Weighted-


CompensationSecurities to be


Average


PlansIssued Upon


Exercise


(ExcludingExercise of


Price of


SecuritiesOutstanding


Outstanding


Reflected inPlan Category

Options


Options


Column (a))(1)(a)


(b)


(c)Equity compensation plans approved by security holders


1,010,561


$
2.31



4,784,937
(2)Equity compensation plans not approved by security holders


0



0



0Total


1,010,561


$
2.31



4,784,937     (1)
    
    The number of shares that may be issued under the 2007 Equity
    Incentive Plan is increased automatically on January 1 of each
    year, beginning in 2008 and ending in 2012, by a number of
    shares equal to the lesser of (i) six percent of the number
    of shares of our common stock outstanding (assuming conversion
    of all outstanding shares of preferred stock) on such date,
    (ii) 1,500,000 shares and (iii) such lower number
    of shares as determined by our board of directors prior to such
    date.(2)
    
    Includes 363,832 shares issuable under the 2000 Employee
    Stock Purchase Plan. 24




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Performance
    Measurement Comparison
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* Among
    Endwave Corporation, The NASDAQ Composite Index
    And The NASDAQ Telecommunications Index
  
  12/04


12/05


12/06


12/07


12/08


12/09Endwave Corporation



100.00




67.51




62.06




41.66




13.75




13.98NASDAQ Composite



100.00




101.41




114.05




123.94




73.43




105.89NASDAQ Telecommunications



100.00




91.66




119.67




132.55




77.09




107.17   *
    
    $100 invested on 12/31/04 in stock or index-including
    reinvestment of dividends.Fiscal year ending December 31. 25




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Item 6.
    Selected
    Consolidated Financial Data  The following selected consolidated financial data should be
    read in conjunction with Managements Discussion and
    Analysis of Financial Condition and Results of Operations
    and the consolidated financial statements and the notes thereto
    included elsewhere in this report. The selected consolidated
    statements of operations data for the fiscal years ended
    December 31, 2009, 2008 and 2007 and the selected
    consolidated balance sheet data as of December 31, 2009 and
    2008 are derived from our audited consolidated financial
    statements that are included elsewhere in this report. The
    selected consolidated statements of operations data for the
    fiscal years ended December 31, 2006 and 2005 and the
    selected consolidated balance sheet data as of December 31,
    2007, 2006 and 2005 are derived from our audited consolidated
    financial statements not included in this report. The historical
    results are not necessarily indicative of the results of
    operations to be expected in any future periods.
  Year Ended December 31,2009

2008

2007

2006

2005(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues

$
19,502


$
38,696


$
44,329


$
51,833


$
40,534Cost of product revenues


14,791



26,227



30,399



34,992



26,815Other operating expenses


15,651



17,741



16,820



17,369



13,258Income (loss) from continuing operations


(10,626
)


(3,964
)


670



2,002



1,293Income (loss) from discontinued operations


17,571



(10,787
)


(6,071
)


(3,347
)


(2,167
)Net income (loss)

$
6,945


$
(14,751
)

$
(5,401
)

$
(1,345
)

$
(874
)Basic net income (loss) per share

$
0.73


$
(1.60
)

$
(0.47
)

$
(0.12
)

$
(0.08
)Diluted net income (loss) per share

$
0.73


$
(1.60
)

$
(0.37
)

$
(0.10
)

$
(0.07
)   December 31,2009

2008

2007

2006

2005(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term and long-term investments

$
66,465


$
45,348


$
48,957


$
67,587


$
22,415Total assets


77,116



70,340



82,589



100,653



53,149Long-term obligations, less current portion


765



73



116



231



385Total stockholders equity


71,952



62,041



71,848



89,398



43,083   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read in
    conjunction with the consolidated financial statements and
    related notes included elsewhere in this report, as well as the
    information set forth in the Risk Factors section of
    this report. In addition to historical consolidated financial
    information, this discussion contains forward-looking statements
    that involve known and unknown risks and uncertainties,
    including statements regarding our expectations, beliefs,
    intentions or strategies regarding the future. All
    forward-looking statements included in this report are based on
    information available to us on the date hereof, and we assume no
    obligation to update any such forward-looking statements. Our
    actual results could differ materially from those discussed in
    the forward-looking statements. You are cautioned not to place
    undue reliance on these forward-looking statements. In the past,
    our operating results have fluctuated and are likely to continue
    to fluctuate in the future.
  Overview
   26




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Form 10-K,
    
    Our transceiver modules that serve as the core RF
    sub-system
    in digital microwave radios are produced for telecommunication
    network original equipment manufacturers and system integrators
    located throughout the world, collectively referred to in this
    report as telecom OEMs. Telecom OEMs that purchased our modules
    accounted for nearly all of our revenues during 2009. Total
    revenues from our two largest telecom OEM customers, Nokia
    Siemens Networks and its manufacturing partner, SRI Radio
    Systems, and Nera ASA accounted for 88% of our 2009 revenues.
    Our semiconductor product line consists of a wide variety of
    monolithic microwave integrated circuits, or MMICs, including
    amplifiers, voltage controlled oscillators, up and down
    converters, variable gain amplifiers, voltage variable
    attenuators, fixed attenuators and filters. These devices are
    used not only in microwave radio transceiver modules, but may
    also find wide application in other types of telecommunications
    systems, as well as defense, homeland security, instrumentation
    and consumer systems. Our semiconductor product line was
    formally introduced to the market in the latter part of 2009 and
    has not yet become a significant source of revenue for us.  Markets
    and Diversification Strategy
  Telecommunications market. point-to-point
  Non-telecommunication markets.
  2009 Revenues.
  Current market outlook.
 27




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Seasonality
    Critical
    Accounting Policies and Estimates
  General
    Revenue
    Recognition
    Allowance
    for Doubtful Accounts
    Warranty
    Reserves
   28




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Inventory
    Valuation
    Stock-Based
    Compensation
        Deferred
    Taxes
    Long-Lived
    Assets
   29




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Goodwill
    and Intangible Assets with an Indefinite Life
    Fair
    Value Measurement
    Business
    Combinations
   30




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,2009


2008


2007(In thousands)Revenues:Product revenues

$
19,502


$
38,593


$
44,114Development fees






103



215Total revenues


19,502



38,696



44,329Costs and expenses:Cost of product revenues


14,791



26,227



30,399Research and development


5,483



6,764



6,518Selling, general and administrative


7,760



10,977



10,302Restructuring


2,408







Total costs and expenses


30,442



43,968



47,219Loss from continuing operations


(10,940
)


(5,272
)


(2,890
)Interest and other income, net


209



1,242



3,562Income (loss) from continuing operations before provision
    (benefit) for income taxes


(10,731
)


(4,030
)


672Provision (benefit) for income taxes


(105
)


(66
)


2Income (loss) from continuing operations


(10,626
)


(3,964
)


670Income (loss) from discontinued operations, net of tax


17,571



(10,787
)


(6,071
)Net income (loss)

$
6,945


$
(14,751
)

$
(5,401
)   31




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##### Table of Contents



Year Ended December 31,2009


2008


2007(As a percentage of total revenues)Revenues:Product revenues


100.0
%


99.7
%


99.5
%Development fees






0.3



0.5Total revenues


100.0



100.0



100.0Costs and expenses:Cost of product revenues


75.9



67.8



68.6Research and development


28.1



17.5



14.7Selling, general and administrative


39.8



28.3



23.2Restructuring


12.3







Total costs and expenses


156.1



113.6



106.5Loss from continuing operations


(56.1
)


(13.6
)


(6.5
)Interest and other income, net


1.1



3.2



8.0Income (loss) from continuing operations before provision
    (benefit) for income taxes


(55.0
)


(10.4
)


1.5Provision (benefit) for income taxes


(0.5
)


(0.2
)


Income (loss) from continuing operations


(54.5
)


(10.2
)


1.5Income (loss) from discontinued operations, net of tax


90.1



(27.9
)


(13.7
)Net income (loss)


35.6
%


(38.1
)%


(12.2
)%   Results
    of Operations
  Year
    ended December 31, 2009 compared to year ended
    December 31, 2008
  Total
    revenues
  Year Ended December 31,2009

2008

% Change(In thousands)Total revenues

$
19,502


$
38,696



(49.6
)%Product revenues

$
19,502


$
38,593



(49.5
)%Development fees

$



$
103



(100.0
)%        32




---



##### Table of Contents



Cost of
    product revenues
  Year Ended December 31,2009

2008

% Change(In thousands)Cost of product revenues

$
14,791


$
26,227



(43.6
)%Percentage of revenues


75.9
%


67.8
%         Research
    and development expenses
  Year Ended December 31,2009

2008

% Change(In thousands)Research and development expenses

$
5,483


$
6,764



(18.9
)%Percentage of revenues


28.1
%


17.5
%        33




---



##### Table of Contents



Selling,
    general and administrative expenses
  Year Ended December 31,2009

2008

% Change(In thousands)Selling, general and administrative expenses

$
7,760


$
10,977



(29.3
)%Percentage of revenues


39.8
%


28.3
%           Restructuring
  Year Ended December 31,2009

2008

% Change(In thousands)Restructuring

$
2,408


$




100.0
%          34




---



##### Table of Contents



Interest
    and other income, net
  Year Ended December 31,2009

2008

% Change(In thousands)Interest and other income, net

$
209


$
1,242



(83.2
)%           Income
    tax expense (benefit)
  Year Ended December 31,2009

2008

% Change(In thousands)Income tax expense (benefit)

$
(105
)

$
(66
)


59.1
%     Discontinued
    Operations
  Year Ended December 31,2009

2008

% Change(In thousands)Income (loss) from discontinued operations, net of tax

$
17,571


$
(10,787
)


(262.9
)%      35




---



##### Table of Contents



Year
    ended December 31, 2008 compared to year ended
    December 31, 2007
  Total
    revenues
  Year Ended December 31,2008

2007

% Change(In thousands)Total revenues

$
38,696


$
44,329



(12.7
)%Product revenues

$
38,593


$
44,114



(12.5
)%Development fees

$
103


$
215



(52.1
)%       Cost of
    product revenues
  Year Ended December 31,2008

2007

% Change(In thousands)Cost of product revenues

$
26,227


$
30,399



(13.7
)%Percentage of revenues


67.8
%


68.6
%     Research
    and development expenses
  Year Ended December 31,2008

2007

% Change(In thousands)Research and development expenses

$
6,764


$
6,518



3.8
%Percentage of revenues


17.5
%


14.7
%     Selling,
    general and administrative expenses
  Year Ended December 31,2008

2007

% Change(In thousands)Selling, general and administrative expenses

$
10,977


$
10,302



6.6
%Percentage of revenues


28.3
%


23.2
%  36




---



##### Table of Contents



Interest
    and other income, net
  Year Ended December 31,2008

2007

% Change(In thousands)Interest and other income, net

$
1,242


$
3,562



(65.1
)%       Income
    tax expense (benefit)
  Year Ended December 31,2008

2007

% Change(In thousands)Income tax expense (benefit)

$
(66
)

$
2



(3,400
)%     Discontinued
    Operations
  Year Ended December 31,2008

2007

% Change(In thousands)Income (loss) from discontinued operations, net of tax

$
(10,787
)

$
(6,071
)


77.7
%    37




---



##### Table of Contents



Liquidity
    and Capital Resources
    Year Ended December 31,2009

2008

2007(In thousands)Net cash provided by (used in) operating activities

$
(4,098
)

$
2,373


$
8,799Net cash provided by (used in) investing activities


27,892



(4,072
)


25,449Net cash provided by (used in) financing activities


632



417



(15,953
)Net cash used in discontinued operations


(3,266
)


(3,724
)


(5,467
)Cash, cash equivalents, restricted cash, short-term and
    long-term investments at end of period

$
66,465


$
45,948


$
48,982                38




---



##### Table of Contents



Payments Due by PeriodLess than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Contractual Obligations:Capital lease obligations, including interest

$
15


$
12


$
3


$



$
Operating lease obligations


1,039



508



446



85



Purchase obligations


2,178



2,178











Total

$
3,232


$
2,698


$
449


$
85


$
     Other
    Long-Term Liabilities
    Recent
    Accounting Pronouncements
       39




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Quantitative
    and Qualitative Disclosures about Market Risk
     40




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageNumberReport of Independent Registered Public
    Accounting Firm


42Consolidated Balance Sheets


43Consolidated Statements of Operations


44Consolidated Statements of Stockholders
    Equity


45Consolidated Statements of Cash Flows


46Notes to Consolidated Financial Statements


47   41




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    42




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2009


2008(In thousands, except share and per share data)ASSETSCurrent assets:Cash and cash equivalents

$
55,158


$
33,998Short-term investments


11,307



11,350Accounts receivable, net of allowance for doubtful accounts of
    $19 in 2009 and $64 in 2008


3,009



4,762Inventories


4,879



14,454Other current assets


788



738Total current assets


75,141



65,302Property and equipment, net


1,796



4,220Other assets


179



218Restricted cash






600Total assets

$
77,116


$
70,340LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,726


$
2,263Accrued warranty


1,087



2,439Accrued compensation


590



2,811Restructuring liabilities, short-term


570



Other current liabilities


426



713Total current liabilities


4,399



8,226Restructuring liabilities, long-term


638



Other long-term liabilities


127



73Total liabilities


5,164



8,299Commitments and contingencies (Note 11)Stockholders equity:Convertible preferred stock, $0.001 par value;
    5,000,000 shares authorized; 300,000 shares issued and
    outstanding in 2009 and 2008, respectively


43,092



43,092Common stock, $0.001 par value; 50,000,000 shares
    authorized; 9,684,756 and 9,345,442 shares issued and
    outstanding in 2009 and 2008, respectively


10



9Additional paid-in capital, common stock


309,755



306,763Accumulated other comprehensive income


15



42Accumulated deficit


(280,920
)


(287,865
)Total stockholders equity


71,952



62,041Total liabilities and stockholders equity

$
77,116


$
70,340    43




---



##### Table of Contents



ENDWAVE
    CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended December 31,2009


2008


2007(In thousands, except share and per share data)Revenues:Product revenues

$
19,502


$
38,593


$
44,114Development fees






103



215Total revenues


19,502



38,696



44,329Costs and expenses:Cost of product revenues*


14,791



26,227



30,399Research and development*


5,483



6,764



6,518Selling, general and administrative*


7,760



10,977



10,302Restructuring


2,408







Total costs and expenses


30,442



43,968



47,219Loss from continuing operations


(10,940
)


(5,272
)


(2,890
)Interest and other income, net


209



1,242



3,562Income (loss) from continuing operations before provision
    (benefit) for income tax expenses


(10,731
)


(4,030
)


672Provision (benefit) for income taxes


(105
)


(66
)


2Income (loss) from continuing operations


(10,626
)


(3,964
)


670Income (loss) from discontinued operations, net of tax*
    (Note 12)


17,571



(10,787
)


(6,071
)Net income (loss)

$
6,945


$
(14,751
)

$
(5,401
)Basic net income (loss) per share from continuing operations

$
(1.12
)

$
(0.43
)

$
0.06Basic net income (loss) per share from discontinued operations

$
1.85


$
(1.17
)

$
(0.53
)Basic net income (loss) per share

$
0.73


$
(1.60
)

$
(0.47
)Diluted net income (loss) per share from continuing operations

$
(1.12
)

$
(0.43
)

$
0.05Diluted net income (loss) per share from discontinued operations

$
1.85


$
(1.17
)

$
(0.42
)Diluted net income (loss) per share

$
0.73


$
(1.60
)

$
(0.37
)Shares used in computing basic net income (loss) per share


9,526,358



9,211,110



11,563,716Shares used in computing diluted net income (loss) per share


9,526,358



9,211,110



14,777,747* Includes the following amounts related to stock-based
    compensation:Cost of product revenues

$
150


$
385


$
292Research and development


326



643



580Selling, general and administrative


1,509



2,079



2,178Income (loss) from discontinued operations, net of tax


355



988



1,064    44




---



##### Table of Contents



ENDWAVE
    CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
  Shares of

















AccumulatedConvertible


Convertible


Shares of





Additional





OtherPreferred


Preferred


Common


Common


Paid-In


Treasury


Comprehensive


AccumulatedStock


Stock


Stock


Stock


Capital


Stock


Income (Loss)


Deficit


Total(In thousands, except for share data)Balance as of December 31, 2006


300,000


$
43,107



11,556,946


$
12


$
314,096


$
(79
)

$
(25
)

$
(267,713
)

$
89,398Change in unrealized gain on short-term investments


























31







31Foreign currency translation adjustment


























(12
)






(12
)Net loss






























(5,401
)


(5,401
)Comprehensive loss


































(5,382
)Exercise of stock options










24,685







145















145Repurchase and retirement of common stock










(2,504,847
)


(3
)


(17,202
)














(17,205
)Issuance of common stock under employee stock purchase plan










97,838







766















766Stock-based compensation


















4,141















4,141Issuance costs from the sale of preferred stock and warrants






(15
)


























(15
)Balance as of December 31, 2007


300,000



43,092



9,174,622



9



301,946



(79
)


(6
)


(273,114
)


71,848Change in unrealized gain on short-term investments


























36







36Foreign currency translation adjustment


























12







12Net loss






























(14,751
)


(14,751
)Comprehensive loss


































(14,703
)Exercise of stock options










2,748







5















5Retirement of common stock










(39,150
)






(79
)


79











Issuance of common stock under employee stock purchase plan










207,222







791















791Stock-based compensation


















4,100















4,100Balance as of December 31, 2008


300,000



43,092



9,345,442



9



306,763







42



(287,865
)


62,041Change in unrealized gain on short-term investments


























(27
)






(27
)Net income






























6,945



6,945Comprehensive loss


































6,918Exercise of stock options










198,079



1



330















331Issuance of common stock under employee stock purchase plan










141,235







317















317Stock-based compensation


















2,345















2,345Balance as of December 31, 2009


300,000


$
43,092



9,684,756


$
10


$
309,755


$



$
15


$
(280,920
)

$
71,952    45




---



##### Table of Contents



ENDWAVE
    CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2009


2008


2007(In thousands)Operating activities:Net income (loss)

$
6,945


$
(14,751
)

$
(5,401
)Income (loss) from discontinued operations


17,571



(10,787
)


(6,071
)Income (loss) from continuing operations, net of tax


(10,626
)


(3,964
)


670Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Depreciation


779



595



580Stock compensation expense


1,985



3,107



3,050Amortization of investments, net


328



(43
)


1Loss (gain) on the sale of land and equipment






(13
)


4Gain on sale of investments






(57
)


Changes in operating assets and liabilities:Accounts receivable


(462
)


4,963



542Inventories


4,724



(308
)


7,344Other assets


(767
)


251



(81
)Accounts payable


665



(1,675
)


(1,405
)Accrued warranty


(706
)


(600
)


(598
)Accrued compensation, restructuring and other current and long
    term liabilities


(18
)


117



(1,308
)Net cash provided by (used in) operating activities


(4,098
)


2,373



8,799Investing activities:Proceeds from sale of discontinued operations


28,000







Purchase of ALC Microwave, Inc., net of cash acquired






(1,027
)


(5,771
)Change in restricted cash


600



(575
)


236Purchases of property and equipment


(396
)


(1,295
)


(503
)Proceeds from sale of property and equipment






74



11Purchases of investments


(31,827
)


(19,731
)


(57,756
)Proceeds on sales and maturities of investments


31,515



18,482



89,232Net cash provided by (used in) investing activities


27,892



(4,072
)


25,449Financing activities:Issuance costs from the sale of preferred stock and warrants










(15
)Common stock repurchased






(356
)


(16,849
)Payments on capital leases


(16
)


(23
)


Proceeds from exercises of stock options


331



5



145Proceeds from issuance of common stock


317



791



766Net cash provided by (used in) financing activities


632



417



(15,953
)Effect of foreign exchange rate changes on cash and cash
    equivalents






12



(12
)Cash flows from discontinued operations:Operating activities


(2,472
)


(2,526
)


(4,902
)Investing activities


(794
)


(1,198
)


(565
)Financing activities










Net cash used in discontinued operations


(3,266
)


(3,724
)


(5,467
)Net change in cash and cash equivalents


21,160



(4,994
)


12,816Cash and cash equivalents at beginning of year


33,998



38,992



26,176Cash and cash equivalents at end of year

$
55,158


$
33,998


$
38,992Supplemental disclosure of cash flow information:Non-cash transactions:Fixed assets acquired under capital lease

$



$



$
36Change in unrealized gain (loss) on investments

$
(27
)

$
36


$
31Capitalized stock-based compensation

$
5


$
5


$
27    46




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    The
    Company    
    The Companys transceiver modules that serve as the core RF
    sub-system
    in digital microwave radios are produced for telecommunication
    network original equipment manufacturers and system integrators
    located throughout the world, collectively referred to in this
    report as telecom OEMs.
    The Companys semiconductor product line consists of a wide
    variety of monolithic microwave integrated circuits, or MMICs,
    including amplifiers, voltage controlled oscillators, up and
    down converters, variable gain amplifiers, voltage variable
    attenuators, fixed attenuators and filters. These devices are
    used not only in microwave radio transceiver modules, but may
    also find wide application in other types of telecommunications
    systems, as well as defense, homeland security, instrumentation
    and consumer systems.  2.
    Summary
    of Significant Accounting Policies  Basis
    of Consolidation
      Use of
    Estimates
    Revenue
    Recognition
    Warranty
   47




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2009


2008(In thousands)Balance at January 1

$
2,439


$
2,712Warranties accrued


690



793Warranties settled or reversed


(1,314
)


(1,066
)Warranties transferred due to sale of the Defense and Security
    RF module business


(728
)


Balance at December 31

$
1,087


$
2,439   Allowance
    for Doubtful Accounts
    Cash
    Equivalents and Short-Term Investments
    available-for-sale Available-for-sale other-than-temporary
  Restricted
    Cash
     48




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Inventory
    Valuation
  first-in,
  Property
    and Equipment
    DepreciableLifeSoftware


3 yearsLeasehold improvements


2 to 5 yearsMachinery and equipment


5 to 7 years   Long-Lived
    Assets
      Income
    Taxes
     49




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock-Based
    Compensation
          Research
    and Development Expenses
    Concentration
    of Risk
         50




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Fair
    Value of Financial Instruments
   51




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2009Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Investments:Commercial paper

$
799


$



$



$
799United States government agency


8,759



5



(2
)


8,762Corporate securities


1,734



12







1,746Total

$
11,292


$
17


$
(2
)

$
11,307   December 31, 2008Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Investments:Commercial paper

$
1,791


$
2


$
(3
)

$
1,790United States government agency


6,690



35







6,725Corporate securities


2,827



10



(2
)


2,835Total

$
11,308


$
47


$
(5
)

$
11,350       other-than-temporary,
 52




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value Measurements
    Quoted Prices inBalance as of


Active Markets of


Significant OtherDecember 31,


Identical Assets


Observable Inputs2009


(Level 1)


(Level 2)Assets:Cash equivalents:Money market funds

$
54,097


$
54,097


$
Short-term investments:Commercial paper


799







799United States government agency


8,762







8,762Corporate securities


1,746







1,746Total

$
65,404


$
54,097


$
11,307Liabilities:

$



$



$
     Foreign
    Currency Transactions
  non-U.S. currencies, non-U.S. currencies non-U.S. currencies
  Comprehensive
    Income (Loss)
  available-for-sale
 53




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2009


2008Accumulated other comprehensive income:Foreign currency translation adjustments

$



$
Unrealized gain on investments


15



42Total

$
15


$
42   Net
    Income (Loss) Per Share
      Year Ended December 31,2009


2008


2007Weighted average common shares outstanding  basic


9,526,358



9,211,110



11,563,716Dilutive effect of convertible preferred stock










3,000,000Dilutive effect of employee stock options










208,655Dilutive effect of the Companys stock purchase plan










5,376Weighted average common shares outstanding  diluted


9,526,358



9,211,110



14,777,747     Years Ended December 31,2009


2008


2007Convertible preferred stock


3,000,000



3,000,000



Stock options to purchase common stock


1,010,561



3,008,917



1,603,065Warrant to purchase convertible preferred stock






900,000



900,000Shares issuable under the employee stock purchase plan


46,113



128,589



     Advertising
    Costs
   54




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Recent
    Accounting Pronouncements
        3.
    Goodwill
    and Other Intangible Assets  Goodwill
    Intangible
    Assets
       55




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2008Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountDeveloped technology

$
3,130


$
(3130
)

$
Tradename


1,290



(1,290
)


Customer relationships


1,680



(1,680
)


Customer backlog


700



(700
)


Non-compete agreement


370



(370
)


Total intangible assets

$
7,170


$
(7,170
)

$
     4.
    Inventories    2009


2008Raw materials

$
4,046


$
8,452Work in process


292



1,574Finished goods


541



4,428Total

$
4,879


$
14,454     5.
    Note
    Receivable       56




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    6.
    Property
    and Equipment    2009


2008Machinery and equipment

$
8,135


$
14,591Software


1,064



1,038Leasehold improvements


605



1,2259,804



16,854Less accumulated depreciation


(8,008
)


(12,634
)Property and equipment, net

$
1,796


$
4,220            57




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Segment
    Disclosures    2009


2008


2007United States

$
605



3.1
%

$
1,064



2.7
%

$
247



0.6
%Finland


9,997



51.3
%


31,266



80.8
%


29,567



66.7
%Germany


3,567



18.3
%






0.0
%






0.0
%Hungary


1,595



8.2
%


1,223



3.2
%


1,308



3.0
%Italy


49



0.2
%


732



1.9
%


3,462



7.8
%Norway


56



0.3
%


70



0.2
%


3,551



8.0
%Slovakia


3,478



17.8
%


3,288



8.5
%


2,934



6.6
%Rest of the world


155



0.8
%


1,053



2.7
%


3,260



7.3
%Total

$
19,502



100.0
%

$
38,686



100.0
%

$
44,329



100.0
%       8.
    Stock-Based
    Compensation  Stock
    Option Exchange
  2009
    Exchange Offer
     58




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2008
    Exchange Offer
      Stock
    Based Compensation
      Year Ended December 31,2009


2008


2007Stock-based compensation expense by type of award:Employee stock options

$
2,166


$
3,434


$
3,653Employee stock purchase plan


179



666



488Amounts capitalized into inventory during the year


(46
)


(65
)


(60
)Amounts capitalized as inventory and expensed


41



60



33Total stock-based compensation


2,340



4,095



4,114Tax effect on stock-based compensation










Total stock-based compensation expense

$
2,340


$
4,095


$
4,114Impact on basic and diluted net income (loss) per share

$
(0.25
)

$
(0.44
)

$
(0.36
)      59




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Valuation
    Assumptions
    Year Ended December 31,2009

2008

2007Stock Option PlansExpected dividend yield


0.0
%


0.0
%


0.0
%Expected stock price volatility


70
%


70
%


70
%Risk free interest rate


1.43 - 2.53
%


1.80 - 3.39
%


3.77 - 4.80
%Expected life of options in years


4.1 years



3.6 years



4.0 years     Year Ended December 31,2009

2008

2007Employee Stock Purchase PlanExpected dividend yield


0.0
%


0.0
%


0.0
%Expected stock price volatility


51
%


51
%


51
%Risk free interest rate


0.16 - 0.95
%


1.61 - 4.74
%


3.97 - 4.67
%Expected life of options in years


1.2 years



1.1 - 1.2 years



1.2 years    60




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        9.
    Stockholders
    Equity  Preferred
    Stock and Warrant Purchase Agreement
             61




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Common
    Stock
        Employee
    Stock Purchase Plan
   62




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Option Plans
             63




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedWeighted


AverageAverage


Remaining


AggregateNumber of


Exercise


Contractual


IntrinsicShares


Price


Term (Years)


Value(In thousands)Outstanding at December 31, 2006


1,732,669


$
13.59Options granted


796,150



12.10Options exercised


(24,685
)


5.88Options cancelled


(38,698
)


13.46Outstanding at December 31, 2007


2,465,436



1.91Options granted


1,025,821



6.44Options exercised


(2,748
)


1.90Options cancelled


(479,592
)


23.66Outstanding at December 31, 2008


3,008,917



9.23Options granted


1,082,924



2.21Options exercised


(198,079
)


1.67Options cancelled


(2,883,201
)


9.54Outstanding at December 31, 2009


1,010,561


$
2.31



6.67


$
252Options vested and exercisable and expected to be exercisable at
    December 31, 2009


922,014


$
2.32



6.41


$
230Options vested and exercisable at December 31, 2009


439,125


$
2.24



3.00


$
153       Options Vested andExercisableAt December 31,Options Outstanding at December 31, 2009


2009Weighted-Weighted-


Average





Weighted-Average


Remaining





AverageRange of Exercise Price

Shares


Exercise Price


Contractual Life


Shares


Exercise Price$0.76 -  $1.21


12,396


$
1.13



2.78



12,396


$
1.13$1.81 -  $1.81


331,584


$
1.81



5.61



177,181


$
1.81$1.93 -  $2.40


92,957


$
2.15



6.17



54,657


$
1.97$2.53 -  $2.53


504,583


$
2.53



7.31



152,572


$
2.53$2.55 -  $6.10


59,854


$
2.82



8.63



36,804


$
2.91$6.59 - $16.00


9,187


$
8.51



7.37



5,515


$
9.001,010,561


$
2.31



6.67



439,125


$
2.24    64




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10.
    Restructuring        Restructuring(In thousands)First Quarter 2009 Restructuring Plan charge

$
1,249Second Quarter 2009 Restructuring Plan charge


258Fourth Quarter 2009 Restructuring Plan charge


1,198Cash payments


(1,421
)Restructuring charge adjustment


(76
)Accrual at December 31, 2009

$
1,208       11.
    Commitments
    and Contingencies  Commitments
   65




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ending December 31,2010

$
5082011


3562012


902013


85Total

$
1,039     Years Ending December 31,2010

$
122011


315Less amount representing interest


1Present value of future minimum lease payments


14Less current portion


11Long-term portion

$
3     Purchase
    Obligations
    Contingencies
    12.
    Discontinued
    Operations   66




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2009


2008


2007(In thousands)Revenues of discontinued operations

$
5,313


$
19,558


$
12,147Loss from discontinued operations


(2,028
)


(10,787
)


(6,071
)Gain on sale of discontinued operations, net of tax


19,599







Net income (loss) from discontinued operations, net of tax

$
17,751


$
(10,787
)

$
(6,071
)     13.
    Income
    Taxes  non-U.S. loss
  Years Ended December 31,2009


2008


2007Current income tax expense (benefit):Federal

$
(105
)

$
(57
)

$
State






(9
)


2(105
)


66
)


2Deferred income tax expense (benefit):Federal










State










$
(105
)

$
(66
)

$
2    67




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2009


2008Deferred tax assets:Net operating loss carryforwards

$
65,302


$
72,666Net research credit


1,830



1,650Other


7,422



8,181Total deferred tax assets


74,554



82,497Valuation allowance for deferred tax assets


(74,554
)


(82,497
)Deferred tax assets






Deferred tax liabilities:Intangible assets






Net deferred tax assets (liabilities)

$



$
      68




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008


2007(In thousands)Expense (Benefit) from income taxes at statutory rate

$
2,394


$
(5,186
)

$
(1,883
)State taxes






(9
)


2Losses for which no benefit is taken


1,380



3,757



1,583Non-deductible stock compensation


68



295



272Sale of discontinued operation


(3,646
)






Goodwill impairment






1,045



Other


(301
)


32



28Total

$
(105
)

$
(66
)

$
2     Total(In thousands)Balance at January 1, 2007

$
2,544Increases related to current year tax positions


73Increases related to prior year tax positions


Decreases related to prior year tax positions


Balance at December 31, 2007


2,617Increases related to current year tax positions


54Increases related to prior year tax positions


37Decreases related to prior year tax positions


Balance at December 31, 2008


2,708Increases related to current year tax positions


95Increases related to prior year tax positions


34Decreases related to prior year tax positions


(330
)Balance at December 31, 2009

$
2,507   and/or and/or
    14.
    401(k)
    Plan   69




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    15.
    Quarterly
    Financial Information (unaudited)  First

Second

Third

FourthQuarter

Quarter

Quarter

Quarter(In thousands, except per share data)2009:Total revenues

$
7,242


$
5,580


$
3,126


$
3,554Cost of product revenues


4,819



4,237



2,369



3,366Loss from continuing operations


(2,593
)


(1,957
)


(2,634
)


(3,442
)Income (loss) from discontinued operations


(1,067
)


18,597



41



Net income (loss)


(3,660
)


16,640



(2,593
)


(3,442
)Basic and diluted net income (loss) per share

$
(0.39
)

$
1.76


$
(0.27
)

$
(0.36
)2008:Total revenues

$
10,460


$
12,093


$
10,871


$
5,272Cost of product revenues


7,119



7,976



7,005



4,127Loss from continuing operations


(160
)


(48
)


(173
)


(3,583
)Income (loss) from discontinued operations


(1,776
)


(712
)


(826
)


(7,473
)Net loss


(1,936
)


(760
)


(999
)


(11,056
)Basic and diluted net loss per share

$
(0.21
)

$
(0.08
)

$
(0.11
)

$
(1.19
)   16.
    Subsequent
    Events   70




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e))
    Managements
    Annual Report on Internal Control Over Financial
    Reporting
        Changes
    in Internal Controls Over Financial Reporting
    Item 9B.
    Other
    Information   71




---



##### Table of Contents



PART III Item 10.
    Directors,
    Executive Officers and Corporate Governance    Name

Age

PositionJohn J. Mikulsky


64


Chief Executive Officer, President and DirectorCurt P. Sacks


39


Chief Financial Officer, Senior Vice President and SecretarySteven F. Layton


55


Senior Vice President of Sales and MarketingDaniel P. Teuthorn


46


Senior Vice President of Product Development and OperationsEdward C.V. Winn(1)(2)(3)


71


Chairman of the Board of DirectorsJoseph J. Lazzara(1)(2)(3)


58


DirectorJohn F. McGrath, Jr.(1)


45


DirectorWade Meyercord(2)(3)


69


Director     (1)
    
    Member of the Audit Committee(2)
    
    Member of the Nominating and Governance Committee(3)
    
    Member of the Compensation Committee    John J. Mikulsky,
  Curt P. Sacks
  Steven F. Layton
 72




---



##### Table of Contents



Daniel P. Teuthorn
  Edward C.V. Winn
  Joseph J. Lazzara
  John F. McGrath, Jr.
 73




---



##### Table of Contents



Wade Meyercord e-commerce and/or
      Section 16(a)
    Beneficial Ownership Reporting Compliance
      Committees
    of the Board of Directors
   74




---



##### Table of Contents



Audit
    Committee
      Compensation
    Committee
      
    Developing compensation policies that will attract and retain
    the highest quality executives, that will clearly articulate the
    relationship of corporate performance to executive compensation
    and will reward executives for Endwaves progress;
    Proposing to the Board of Directors the adoption, amendment and
    termination of stock option plans, stock appreciation rights
    plans, pension and profit sharing plan, stock bonus plans, stock
    purchase plans, bonus plans, deferred compensation plans and
    other similar plans; 75




---



##### Table of Contents




    Granting rights, participation and interests in such plans to
    eligible participants, subject in certain cases to ratification
    by the Board;
    Reviewing and approving such other compensation matters as may
    be necessary or appropriate in view of the Compensation
    Committees overall responsibility; and
    Reviewing with management our Compensation Discussion and
    Analysis and considering whether to recommend that it be
    included in proxy statements and other filings.    
    The amount of bonus to be awarded to each executive officer in
    respect of the prior years performance;
    Whether to raise, lower or maintain the executive officers
    base salary for the current year;
    The bonus targets to be set for the executive officers for the
    current year; and
    Option grants and restricted stock units, if any, to be awarded
    to each executive officer.  Nominating
    and Governance Committee
    Code of
    Business Conduct and Ethics
        76




---



##### Table of Contents



Item 11.
    Executive
    Compensation  COMPENSATION
    OF EXECUTIVE OFFICERS
  Compensation
    Discussion and Analysis
    Role
    of Compensation Committee and Chief Executive
    Officer
  Rule 16b-3
    
    Developing compensation policies that will attract and retain
    the highest quality executives, will clearly articulate the
    relationship of corporate performance to executive compensation
    and will reward executives for Endwaves progress;
    Proposing to the Board of Directors the adoption, amendment and
    termination of stock option plans, stock appreciation rights
    plans, pension and profit sharing plan, stock bonus plans, stock
    purchase plans, bonus plans, deferred compensation plans and
    other similar plans;
    Granting rights, participation and interests in such plans to
    eligible participants, subject in certain cases to ratification
    by the Board of Directors; and
    Reviewing and approving such other compensation matters as may
    be necessary or appropriate in view of the Compensation
    Committees overall responsibility.   77




---



##### Table of Contents




    The amount of bonus to be awarded to each executive officer in
    respect of the prior years performance;
    Whether to raise, lower or maintain the executive officers
    base salary for the current year;
    The bonus targets to be set for the executive officers for the
    current year; and
    Option grants and restricted stock units, if any, to be awarded
    to each executive officer.    Comparable
    Company Comparisons
      Elements
    of Executive Compensation
    Base Salary:
 78




---



##### Table of Contents



Annual Cash Incentive:
  Stock Options and Restricted Stock Units:
    Other Benefits:
  Chief
    Executive Officer Compensation
   79




---



##### Table of Contents



Employment,
    Severance and Change in Control Agreements
    Executive Officer Severance and Retention Plan Assuming No
    Change of Control:
    Potential
    2009 Severance and Retention Benefits Assuming No Change of
    Control
    COBRA

Option

TotalName

Salary(1)

Benefits(2)

Awards(3)

BenefitJohn J. Mikulsky

$
458,250


$
48,623


$
39,728


$
546,601Curt P. Sacks

$
105,000


$
7,017


$
2,563


$
114,580Daniel P. Teuthorn

$
229,000


$
14,108


$
3,554


$
246,662Steven F. Layton

$
197,083


$
20,000


$
7,695


$
224,778     (1)
    
    Reflects the greater of 9 months salary or 1.5 months
    salary for each full year of employment for Mr. Mikulsky
    (19.5 months) and the greater of 6 months salary or
    1 month salary for each full year of employment up to a
    maximum of 12 months for Mr. Sacks (6 months),
    Mr. Teuthorn (12 months) and Mr. Layton
    (11 months).(2)
    
    Reflects the greater of 9 months coverage or
    1.5 months coverage for each full year of employment for
    Mr. Mikulsky (20 months) and the greater of
    6 months coverage or 1 month coverage for each full
    year of employment up to a maximum of 12 months for
    Mr. Sacks (6 months), Mr. Teuthorn
    (12 months) and Mr. Layton (11 months).(3)
    
    Reflects value of options accelerated in the event of
    termination without cause without a change of control. Since the
    closing price of Endwaves common stock on
    December 31, 2009, was $2.44 and the exercise prices of
    certain options outstanding and
    in-the-money
    on December 31, 2009 were below the closing price, the
    value of the options that would have been accelerated are
    reflected above. 80




---



##### Table of Contents



Executive Officer Severance and Retention Plan Assuming a
    Change of Control:
        COBRA

Option

TotalName

Salary(1)

Benefits(2)

Awards(3)

BenefitJohn J. Mikulsky

$
916,500


$
48,623


$
39,728


$
1,004,851Curt P. Sacks

$
210,000


$
14,035


$
14,200


$
238,235Daniel P. Teuthorn

$
229,000


$
14,108


$
13,791


$
256,899Steven F. Layton

$
215,000


$
21,819


$
20,295


$
257,114     (1)
    
    Reflects the greater of 18 months salary or 3 months
    salary for each full year of employment for Mr. Mikulsky
    (39 months) and the 12 months salary for
    Mr. Sacks, Mr. Teuthorn and Mr. Layton.(2)
    
    Reflects the greater of 9 months coverage or
    1.5 months coverage for each full year of employment for
    Mr. Mikulsky (20 months) and 12 months coverage
    for Mr. Sacks, Mr. Teuthorn and Mr. Layton.(3)
    
    Reflects value of options accelerated in the event of
    termination without cause in connection with a change of
    control. Since the closing price of Endwaves common stock
    on December 31, 2009, was $2.44 and the exercise prices of
    certain options outstanding and
    in-the-money
    on December 31, 2009 were below the closing price, the
    value of the options that would have been accelerated are
    reflected above. 81




---



##### Table of Contents



Named
    Executive Officer Compensation
    Summary
    Compensation Table
  Non-EquityOption

Incentive Plan

All Other

TotalName and Principal Position

Year

Salary

Bonus

Awards

Compensation

Compensation

Compensation(1)

(2)

(3)

(4)

(5)

(6)

(7)Edward A. Keible, Jr.


2009


$
365,215






$
304,986


$
0


$
1,070,126


$
1,740,327Former President and Chief


2008


$
384,615






$
467,699


$
77,200


$
9,492


$
939,006Executive Officer


2007


$
371,923


$
1,741


$
707,542


$
0


$
11,827


$
1,093,033Brett W. Wallace


2009


$
130,327






$
40,703


$
0


$
215,198


$
386,228Former Chief Financial Officer


2008


$
249,269






$
134,128


$
37,600


$
6,324


$
427,321and Executive Vice President


2007


$
233,000






$
280,214


$
0


$
2,785


$
515,999John J. Mikulsky


2009


$
282,000






$
130,576


$
0


$
2,618


$
415,194President and Chief


2008


$
280,385






$
222,316


$
42,300


$
7,287


$
552,288Executive Officer


2007


$
266,154






$
280,214


$
0


$
5,773


$
552,141Curt P. Sacks


2009


$
199,615






$
112,430


$
0


$
9,718


$
321,763Senior Vice President
    and Chief Financial OfficerSteven F. Layton


2009


$
215,000






$
65,289


$
0


$
2,243


$
282,532Senior Vice President


2008


$
213,731






$
111,158


$
21,500


$
5,492


$
351,881Sales and Marketing


2007


$
201,808






$
140,107


$
0


$
55,903


$
397,818Daniel F. Teuthorn


2009


$
229,000






$
60,862


$
0


$
2,333


$
292,195Senior Vice President


2008


$
227,731






$
93,540


$
22,900


$
86,921


$
431,092Product Development and Operations


2007


$
216,039






$
140,107


$
0


$
57,172


$
413,318     (1)
    
    Mr. Keible resigned from the company in November, 2009 and
    Mr. Wallace resigned in June, 2009. Mr. Mikulsky was
    promoted to the position of Chief Executive Officer in December
    2009 and Mr. Sacks was promoted to the position of Chief
    Financial Officer in June 2009.(2)
    
    The amounts in this column reflect annual salary earned.(3)
    
    Reflects cash bonus paid to Mr. Keible for the award of a
    patent.(4)
    
    The amounts in this column represent the compensation cost
    related to stock option awards issued to named executive
    officers. For purposes of this table, the fair value excludes
    the impact of estimated forfeitures. For a discussion of other
    valuation assumptions, see Note 8 to our consolidated
    financial statements included elsewhere in this report.(5)
    
    The amounts in this column represent total performance-based
    bonuses earned for services rendered during the fiscal year.(6)
    
    The amounts in this column represent all other compensation
    payments. For Mr. Keible all other compensation of
    $1,070,126 includes $965,000 of severance to be paid over
    30 months beginning in 2010. For Mr. Wallace all other
    compensation of $215,198 includes $188,250 of severance paid
    during 2009. Also included are total payments made by Endwave
    for group insurance, educational reimbursement and 401(k)
    employer matching contributions. Other Compensation for
    Mr. Teuthorn included educational reimbursement of $81,123
    in 2008 and $52,459 in 2007.(7)
    
    The dollar value in this column for each named executive officer
    represents the sum of all compensation reflected in the
    preceding columns. 82




---



##### Table of Contents



out-of-the-money out-of-the-money
  Grants of
    Plan-Based Awards in Fiscal 2009
  AllOther





Grant DateOption





Closing


Grant DateEstimated Possible Payouts


Awards:


Exercise


Market


FairUnder Non-Equity Incentive


Number of


or Base


Price of


Value ofPlan Awards


Securities


Price of


Securities


Stock andUnderlying


Option


Underlying


OptionGrant


Threshold


Target


Maximum


Options


Awards


Option


AwardsName


Date


($)


($)


($)


(#)


($/Sh)


($/Sh)(1)


($)Edward A. Keible, Jr



2/6/09



$
0



$
0



$
0




100,000



$
1.81



$
1.89



$
101,756
(4)Edward A. Keible, Jr.



9/11/09



$
0



$
0



$
0




142,102



$
2.53



$
2.60



$
203,229
(4)Brett W. Wallace



2/6/09



$
0



$
0



$
0




40,000



$
1.81



$
1.89



$
40,703
(4)John J. Mikulsky



2/6/09



$
0



$
0



$
0




40,000



$
1.81



$
1.89



$
40,703
(2)John J. Mikulsky



9/11/09



$
0



$
0



$
0




66,639



$
2.53



$
2.60



$
89,874
(3)Curt P. Sacks



2/6/09



$
0



$
0



$
0




20,000



$
1.81



$
1.89



$
20,351
(2)Curt P. Sacks



7/31/09



$
0



$
0



$
0




40,000



$
2.40



$
2.38



$
53,900
(2)Curt P. Sacks



9/11/09



$
0



$
0



$
0




31,873



$
2.53



$
2.60



$
38,178
(3)Daniel P. Teuthorn



2/6/09



$
0



$
0



$
0




20,000



$
1.81



$
1.89



$
20,351
(2)Daniel P. Teuthorn



9/11/09



$
0



$
0



$
0




30,518



$
2.53



$
2.60



$
40,511
(3)Steven F. Layton



2/6/09



$
0



$
0



$
0




20,000



$
1.81



$
1.89



$
20,351
(2)Steven F. Layton



9/11/09



$
0



$
0



$
0




34,747



$
2.53



$
2.60



$
44,938
(3)     (1)
    
    The exercise price for option awards is determined as the
    closing price on the day prior to grant. Therefore, the grant
    date closing price of the security underlying the option can
    differ materially, positively or negatively, from the exercise
    price of the option award.(2)
    
    Each option vests as to 1/8 of the shares of common stock
    underlying it on the six month anniversary of the grant date,
    with the remaining seven-eighths of the grant vesting in equal
    quarterly installments over the remaining four-year vesting
    period. For the purposes of this table, the value excludes the
    impact of estimated forfeitures. For a discussion of other
    valuation assumptions, see Note 8 to our consolidated
    financial statements.(3)
    
    Each option vests as to 25% of the shares of common stock
    underlying it on the six-month anniversary of the grant date,
    with the remainder vesting in equal quarterly installments over
    the following six quarters. For the purposes of this table, the
    value excludes the impact of estimated forfeitures.(4)
    
    The vesting of such options was accelerated in full upon
    termination of employment. 83




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##### Table of Contents



Outstanding
    Equity Awards at December 31, 2009
  Number of Securities Underlying

Option

OptionUnexercised Options(1)(2)

Exercise

ExpirationName and Principal Position

Exercisable

Unexercisable

Price

DateEdward A. Keible, Jr.


100,000



0


$
1.81



2/5/201933,333
(3)


0


$
2.53



9/10/20191,358
(3)


0


$
2.53



9/10/201912,500
(3)


0


$
2.53



9/10/20199,579
(3)


0


$
2.53



9/10/201925,000
(3)


0


$
2.53



9/10/20192,038
(3)


0


$
2.53



9/10/201912,128
(3)


0


$
2.53



9/10/201933,333
(3)


0


$
2.53



9/10/201912,500
(3)


0


$
2.53



9/10/2019333
(3)


0


$
2.53



9/10/2019Brett W. Wallace


40,000



0


$
1.81



2/5/2019John J. Mikulsky


5,860



0


$
1.17



1/30/201313,894



0


$
1.93



6/5/201340,000



0


$
1.81



2/5/201913,333
(3)


0


$
2.53



9/10/20191,552
(3)


0


$
2.53



9/10/20193,447
(3)


0


$
2.53



9/10/201910,000
(3)


0


$
2.53



9/10/201910,000
(3)


0


$
2.53



9/10/20195,000
(3)


0


$
2.53



9/10/20192,038
(3)


0


$
2.53



9/10/20196,295
(3)


0


$
2.53



9/10/20191,641
(3)


0


$
2.53



9/10/201913,333
(3)


0


$
2.53



9/10/2019Curt P. Sacks


20,000



0


$
1.81



2/5/201940,000



0


$
2.40



7/30/20196,666
(3)


0


$
2.53



9/10/2019875
(3)


0


$
2.53



9/10/20191,000
(3)


0


$
2.53



9/10/20192,500
(3)


0


$
2.53



9/10/201913,333
(3)


0


$
2.53



9/10/2019833
(3)


0


$
2.53



9/10/20196,666
(3)


0


$
2.53



9/10/2019Steven F. Layton


1,351



0


$
1.17



1/30/20132,813



0


$
1.93



6/5/20138,910



0


$
1.93



6/5/201320,000



0


$
1.81



2/5/20196,666
(3)


0


$
2.53



9/10/20191,552
(3)


0


$
2.53



9/10/2019947
(3)


0


$
2.53



9/10/20195,000
(3)


0


$
2.53



9/10/20195,000
(3)


0


$
2.53



9/10/20192,916
(3)


0


$
2.53



9/10/20192,446
(3)


0


$
2.53



9/10/20193,554
(3)


0


$
2.53



9/10/20196,666
(3)


0


$
2.53



9/10/2019 84




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##### Table of Contents



Number of Securities Underlying

Option

OptionUnexercised Options(1)(2)

Exercise

ExpirationName and Principal Position

Exercisable

Unexercisable

Price

DateDaniel P. Teuthorn


938



0


$
1.17



1/30/201320,000



0


$
1.81



2/5/20196,666
(3)


0


$
2.53



9/10/20191,358
(3)


0


$
2.53



9/10/2019829
(3)


0


$
2.53



9/10/20192,500
(3)


0


$
2.53



9/10/20195,000
(3)


0


$
2.53



9/10/20192,500
(3)


0


$
2.53



9/10/20192,038
(3)


0


$
2.53



9/10/20192,961
(3)


0


$
2.53



9/10/20196,666
(3)


0


$
2.53



9/10/2019     (1)
    
    Each option vests as to 1/8 of the shares of common stock
    underlying it on the six month anniversary of the grant date,
    with the remaining seven-eighths of the grant vesting in equal
    quarterly installments over the remaining four-year vesting
    period. Each option expires ten years after the date of grant
    or, if earlier, three months after termination of employment in
    most cases.(2)
    
    All options described in the above table are reflected as
    exercisable because all options granted to our executive
    officers have an early exercise feature that allows
    optionees to exercise unvested options, subject to our right to
    repurchase the unvested shares at cost upon the optionees
    termination of employment. Options unvested as of
    December 31, 2009 are as follows: Keible, 0; Wallace, 0;
    Mikulsky, 99,139; Sacks, 83,123; Layton, 50,997; and Teuthorn,
    46,768.(3)
    
    This option was replaced in our 2009 option exchange program for
    an option with an exercise price per share of $2.53. As required
    by such program, the new option vests over two years beginning
    in September, 2009.  2009
    Option Exercises
    Compensation
    of Non-Employee Directors
    Fees Paid

Option

TotalName

In Cash

Awards(1)

CompensationEdward C.V. Winn, Chairman

$
44,000


$
18,712


$
62,712Joseph J. Lazzara

$
34,000


$
11,989


$
45,989John F. McGrath

$
41,000


$
11,989


$
52,989Wade Meyercord

$
33,000


$
11,989


$
44,989Eric D. Stonestrom

$
28,000


$
16,336


$
44,336     (1)
    
    The amounts included in the Option Awards column
    represent the compensation cost related to stock option awards
    issued in 2009. For purposes of this table, the value excludes
    the impact of estimated forfeitures. For a discussion of other
    valuation assumptions, see Note 8 to our consolidated
    financial statements.   85




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##### Table of Contents



Board
    Membership Fees Payable to Non-Employee Directors
  Non-Employee Director Annual Retainer

$
25,000Board Chair Annual Retainer

$
10,000Audit Committee Chair Annual Retainer

$
16,000Audit Committee Member Annual Retainer

$
6,000Compensation Committee Chair Annual Retainer

$
8,000Compensation Committee Member Annual Retainer

$
3,000Nominating and Governance Committee Chair Annual Retainer

$
3,000Nominating and Governance Committee Member Annual Retainer

$
0Board Meeting Fee

$
0Committee Meeting Fee

$
0   1 48 1 12
  Report of
    the Compensation
    Committee1
    
    1
 86




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  c/o Endwave
  Common StockName and Address

Number

Percent(2)Entities affiliated with Empire Capital Management, LLC(3)


1,336,592



13.801 Gorham Island, Suite 201
    Westport, CT 06880Entities affiliated with Eagle Rock


957,525



9.88Capital Management(4)
    551 Fifth Avenue, 34th Floor
    New York, NY 10176Entities affiliated with Potomac Capital


829,505



8.56Management(5)
    825 Third Avenue
    New York, NY 10022Entities affiliated with Dimensional


752,035



7.76Fund Advisors LP(6)
    1299 Ocean Ave.
    Santa Monica, CA 90401John J. Mikulsky(7)


304,298



3.14Curt P. Sacks(8)


127,959



1.32Daniel P. Teuthorn(9)


102,884



1.06Steven F. Layton(10)


96,210



1.00Edward C.V. Winn(11)


15,216



*Joseph J. Lazzara(12)


14,418



*John F. McGrath, Jr.(11)


13,523



*Wade Meyercord(11)


13,442



*All directors and executive officers as a group
    (8 persons)(13)


687,950



7.10     *
    
    Less than one percent.(1)
    
    This table is based upon information supplied to us by our
    officers, directors and principal stockholders and upon any
    Schedules 13D or 13G filed with the Securities and Exchange.
    Unless otherwise indicated in the footnotes to this table, and
    subject to community property laws where applicable, we believe
    that each of the stockholders named in this table has sole
    voting and investment power with respect to the shares indicated
    as beneficially owned.(2)
    
    Applicable percentages are based on 9,684,756 shares
    outstanding on February 5, 2010, adjusted as required by
    rules promulgated by the Securities and Exchange Commission.(3)
    
    Empire GP, the general partner of Empire Capital, has the power
    to direct the affairs of Empire Capital, including decisions
    respecting the disposition of the proceeds from the sale of the
    Common Stock. Empire Management, the investment manager of the
    Empire Overseas Fund has the power to direct the affairs of the
    Empire Overseas Fund, including decisions respecting the
    disposition of the proceeds from the sale of the Common Stock.
    Empire Management, pursuant to investment management agreements
    with Charter Oak, Charter Oak II and Charter Oak Master,
    has the power to dispose of the proceeds from the sale of the
    Common Stock with respect to those assets of the Charter Oak
    Funds under its discretion. Empire Management, pursuant to an
    investment management agreement with the Enhanced Master Fund,
    has the power to dispose 87




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##### Table of Contents



of the proceeds from the sale of the Common Stock with respect
    to those assets under its discretion. Messrs. Fine and
    Richards are the Members of Empire GP and Empire Management, and
    in their capacities direct the operations of Empire GP and
    Empire Management.(4)
    
    The shares are held by EagleRock Master Fund, L.P.
    (ERMF) and EagleRock Institutional Partners LP
    (ERIP). EagleRock Capital Management, LLC
    (EagleRock) is the investment manager of ERMF and
    ERIP and has sole power to vote and dispose of the shares held
    by ERMF and ERIP and may be deemed to beneficially own such
    shares. Nader Tavakoli is the Manager of EagleRock and may
    direct the voting and disposition of the shares held by ERMF and
    ERIP and may be deemed to beneficially own such shares.(5)
    
    Potomac Capital Partners LP is a private investment partnership
    formed under the laws of the State of Delaware. Potomac Capital
    Management LLC is the General Partner of Potomac Capital
    Partners LP. Mr. Paul J. Solit is the Managing Member of
    Potomac Capital Management LLC.(6)
    
    Dimensional Fund Advisors LP (formerly, Dimensional
    Fund Advisors, Inc.) (Dimensional), an
    investment advisor registered under Section 203 of the
    Investment Advisors Act of 1940, furnishes investment advice to
    four investment companies registered under the Investment
    Company Act of 1940, and serves as investment manager to certain
    other commingled group trusts and separate accounts. These
    investment companies, trusts and accounts are the
    Funds. In its role as investment advisor or manager,
    Dimensional possesses investment and/or voting power over the
    securities of the Issuer described in this schedule that are
    owned by the Funds, and may be deemed to be the beneficial owner
    of the shares of the Issuer held by the Funds. However, all
    securities reported are owned by the Funds. Dimensional
    disclaims beneficial ownership of such securities.
    Mr. Christopher Crossan, Global Chief Compliance Officer,
    is a General Partner of Dimensional Holdings Inc.(7)
    
    Includes 236,393 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    189,976 shares would be subject to repurchase by us.(8)
    
    Includes 115,873 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    95,402 shares would be subject to repurchase by us.(9)
    
    Includes 75,456 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    61,885 shares would be subject to repurchase by us.(10)
    
    Includes 91,821 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    65,058 shares would be subject to repurchase by us.(11)
    
    Represents shares issuable upon exercise of options exercisable
    within 60 days of the date of this table.(12)
    
    Includes 13,418 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. Also
    includes 1,000 shares held jointly in the name of Joseph J.
    and Nancy B. Lazzara.(13)
    
    See footnotes 7 through 12 above, as applicable. Includes
    575,142 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    412,321 shares would be subject to a repurchase right by us. 88




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Indemnification
    Related-Person
    Transactions Policy and Procedures
      Independence
    of the Board of Directors
     89




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##### Table of Contents



Item 14.
    Principal
    Accounting Fees and Services    2009


2008Audit Fees(1)

$
336


$
382Audit-related Fees(2)


13



Tax Fees






All Other Fees






Total

$
349


$
382     (1)
    
    Audit fees represent fees for professional services provided in
    connection with the audit of our annual consolidated financial
    statements, review of our quarterly condensed consolidated
    financial statements and services that are normally provided by
    BPM in connection with statutory and regulatory filings or
    engagements.(2)
    
    Audit-related fees consist of assurance and related services
    that are reasonably related to the performance of the audit or
    review of our consolidated financial statements and are not
    reported above under audit fees. The services provided for the
    fees disclosed under this category include due diligence and
    accounting consultations in connection with acquisitions.  Independence
    of Independent Registered Public Accounting Firm and
    Pre-Approval Policy
  case-by-case
 PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements Schedules and
    Exhibits.
                 90




---



##### Table of Contents



Intentionally omitted
  Exhibits
  INDEX TO
    EXHIBITS
  Number

Description2
.1(1)

Stock Purchase Agreement among the Registrant and the
    stockholders and option holders of ALC Microwave, Inc. dated
    April 19, 2007.2
.2(18)

Asset Purchase Agreement among the Registrant, Microsemi
    Corporation and SHR Corporation dated April 30, 2009.2
.3(18)

Indemnification Agreement between the Registrant and Microsemi
    Corporation dated April 30, 2009.3
.1(2)

Amended and Restated Certificate of Incorporation effective
    October 20, 2000.3
.2(3)

Certificate of Amendment of Amended and Restated Certificate of
    Incorporation effective June 28, 2002.3
.3(4)

Certificate of Designation for Series A Junior
    Participating Preferred Stock.3
.4(5)

Certificate of Designation for Series B Preferred Stock.3
.5(6)

Certificate of Amendment of Amended and Restated Certificate of
    Incorporation effective July 26, 2007.3
.6(7)

Amended and Restated Bylaws.4
.1(2)

Form of Specimen Common Stock Certificate.4
.2(4)

Rights Agreement dated as of December 1, 2005 between the
    Registrant and Computershare Trust Company, Inc.4
.3(4)

Form of Rights Certificate4
.4(8)

Amendment No. 1 to Rights Agreement, dated as of
    December 21, 2007, between the Registrant and ComputerShare
    Trust Company, Inc.10
.1(2)

Form of Indemnity Agreement entered into by the Registrant with
    each of its directors and officers.10
.2(2)*

1992 Stock Option Plan.10
.3(2)*

Form of Incentive Stock Option under 1992 Stock Option Plan.10
.4(2)*

Form of Nonstatutory Stock Option under 1992 Stock Option Plan.10
.5(9)*

2007 Equity Incentive Plan.10
.6(10)*

Form of Stock Option Agreement under 2007 Equity Incentive Plan.10
.7(10)*

Form of Stock Option Agreement for Non-Employee Directors under
    the 2007 Equity Incentive Plan.10
.8*

Form of Restricted Stock Unit Award under 2007 Equity Incentive
    Plan.10
.9(2)*

2000 Employee Stock Purchase Plan.10
.10(2)*

Form of 2000 Employee Stock Purchase Plan Offering.10
.11(11)*

2000 Non-Employee Directors Stock Option Plan, as amended.10
.12(2)*

Form of Nonstatutory Stock Option Agreement under the 2000
    Non-Employee Director Plan.10
.13(12)*

Description of Compensation Payable to Non-Employee Directors.10
.14*

2010 Base Salaries for Named Executive Officers.10
.15(2)

License Agreement by and between TRW Inc. and TRW Milliwave Inc.
    dated February 28, 2000.10
.16(14)

Purchase Agreement between Nokia and the Registrant dated
    January 1, 2006.10
.17(14)

Frame Purchase Agreement by and between the Registrant and
    Siemens Mobile Communications Spa dated January 16, 2006.10
.18(15)

Lease Agreement by and between Legacy Partners I San Jose,
    LLC and the Registrant dated May 24, 2006. 91




---



##### Table of Contents



Number

Description10
.19(16)

Services Agreement by and between Hana Microelectronics Co.,
    Ltd. and the Registrant dated October 15, 2006.10
.20(17)

Lease Agreement by and between 8812, a California limited
    partnership, and the Registrant dated May 20, 2008.10
.21(17)

Amended and Restated Supply Agreement by and between Northrop
    Grumman Space and Mission Systems Corp. and the Registrant dated
    May 12, 2008.10
.22(13)

First Amendment, dated as of December 1, 2008, to Amended
    and Restated Supply Agreement by and between Northrop Grumman
    Space and Mission Systems Corp. and the Registrant dated
    May 12, 2008.10
.23(13)

Amendment, dated as of February 13, 2009, to Amended and
    Restated Supply Agreement by and between Northrop Grumman Space
    and Mission Systems Corp. and the Registrant dated May 12,
    2008.10
.24(19)*

Executive Officer Severance Plan.10
.25(19)*

Senior Executive Officer Severance and Retention Plan.10
.26(20)

Stock Purchase Agreement, dated as of January 21, 2010,
    between Oak Investment Partners XI, Limited Partnership and the
    Registrant.23
.1

Consent of Burr Pilger Mayer, Inc. independent registered public
    accounting firm.31
.1

Certification by Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification by Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certifications of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on April 24, 2007 and incorporated herein by
    reference.(2)
    
    Previously filed as an exhibit to the Registrants
    Registration Statement on
    Form S-1
    (Registration
    No. 333-41302)
    and incorporated herein by reference.(3)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2004 and incorporated
    herein by reference.(4)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on December 5, 2005 and incorporated herein by
    reference.(5)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on April 26, 2006 and incorporated herein by
    reference.(6)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 and incorporated
    herein by reference.(7)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on July 28, 2008 and incorporated herein by reference.(8)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on December 28, 2007 and incorporated herein by
    reference.(9)
    
    Previously filed as an appendix to the Registrants
    Definitive Proxy Statement on Schedule 14A filed on
    June 13, 2007 and incorporated herein by reference.(10)
    
    Previously filed as an exhibit to the Registrants
    Registration Statement on
    Form S-8
    (Registration
    No. 333-144851)
    and incorporated herein by reference.(11)
    
    Previously filed as an exhibit to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2005 and
    incorporated herein by reference.(12)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on February 1, 2008 and incorporated herein by
    reference. 92




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##### Table of Contents



(13)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    filed for the quarter year ended March 31, 2009 and
    incorporated herein by reference.(14)
    
    Previously filed as an exhibit to the Registrants
    Registration Statement on
    Form S-3
    (Registration
    No. 333-144054)
    and incorporated herein by reference.(15)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2006 and incorporated herein
    by reference.(16)
    
    Previously filed as an exhibit to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2006 and
    incorporated herein by reference.(17)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter year ended June 30, 2008 and incorporated
    herein by reference.(18)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter year ended June 30, 2009 and incorporated
    herein by reference.(19)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on September 17, 2009 and incorporated herein by
    reference.(20)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on January 21, 2010 and incorporated herein by
    reference.*
    
    Indicates a management contract or compensatory plan or
    arrangement.
    
    Confidential treatment has been requested for a portion of this
    exhibit.  Financial Statement Schedule
 93




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##### Table of Contents



ENDWAVE
    CORPORATION
  SCHEDULE II
  VALUATION
    AND QUALIFYING ACCOUNTS
    Additions(Reductions)Balance at


Charged to


Deductions


Balance Transferred


Balances atBeginning of


Costs and


and


Due to Sale of the


End ofPeriod


Expense


Write-offs


Business


Period(In thousands)Year ended December 31, 2009

$
64


$
(27
)

$



$
(18
)

$
19Year ended December 31, 2008

$
67


$
(3
)

$



$



$
64Year ended December 31, 2007

$
131


$
(5
)

$
(59
)

$



$
67  94




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##### Table of Contents



SIGNATURES      By:
    /s/  Curt
    P. Sacks      POWER OF
    ATTORNEY
  KNOW ALL PERSONS BY THESE PRESENTS, Form 10-K,
  Signatures

Title

Date/s/  JOHN
    J. MIKULSKYJohn
    J. Mikulsky

President, Chief Executive Officer 
    and Director 
    (Principal Executive Officer)

March 24, 2010/s/  CURT
    P. SACKSCurt
    P. Sacks

Chief Financial Officer and Senior Vice President 
    (Principal Financial and Accounting Officer)

March 24, 2010/s/  EDWARD
    C.V. WINNEdward
    C.V. Winn

Chairman of the Board of Directors

March 24, 2010/s/  JOSEPH
    J. LAZZARAJoseph
    J. Lazzara

Director

March 24, 2010/s/  JOHN
    F. MCGRATH, JR.John
    F. McGrath, Jr.

Director

March 24, 2010/s/  WADE
    MEYERCORDWade
    Meyercord

Director

March 24, 2010  95