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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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FORM 10-K

(Mark One)



|x |  | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    
|- |  | -----------------------------------------------------------------------------------------
| 
|  |  | For the year ended March 31, 2002 or                                                     
| 
|o |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
| 
|  |  | For the transition period from    to  .                                                  

Commission file number 0-15895

DMC STRATEX NETWORKS, INC.
(Exact Name of Registrant as Specified in Its Charter)

|                                         |  |                                     
|---------------------------------------- |  | ------------------------------------
|Delaware                                 |  | 77-0016028                          
|(State of Incorporation)                 |  | (I.R.S. Employer Identification No.)
|                                        
|170 Rose Orchard Way                     |  |                                     
|San Jose, California                     |  | 95134                               
|(Address of Principal Executive Offices) |  | (Zip Code)                          

408-943-0377
(Registrants Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

|                    |  |                       |  | 
|------------------- |  | --------------------- |  | 
|                    |  | Name of Each Exchange
|Title of Each Class |  | on Which Registered  
|                    |  |                      
|None               

Securities registered pursuant to Section 12(g) of the
Act:

Common Stock, Par Value $0.01 Per Share
(Title of Class)

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

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

State the aggregate market value of the voting stock held
by non-affiliates of the registrant (based on the last
reported sale price of $3.54 per share on the Nasdaq
National Market as of May 10, 2002): Approximately
$212,133,721.

As of May 10, 2002, there were 82,414,148 shares of
Common Stock, par value $0.01 per share, outstanding.





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DOCUMENTS INCORPORATED BY REFERENCE



|1. |  | Portions of the registrants Annual Report
to Stockholders for the year ended March 31, 2002
are incorporated by reference into Parts I and II of
this Annual Report on Form 10-K. With the exception
of those portions which are incorporated by
reference, the registrants Annual Report to
Stockholders for the year ended March 31, 2002 is
not deemed filed as part of this Annual Report on
Form 10-K.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Portions of the registrants Proxy
Statement for the Annual Meeting of Stockholders to
be held on August 13, 2002 are incorporated by
reference into Part III of this annual report on Form
10-K.                                                                                                                                                                                                            





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TABLE OF CONTENTS



|                  |                                                                                                                     |  |  |  |  |  |  | 
|----------------- | ------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                  | Item 1. Business                                                                                                   
|                  | Item 2. Properties                                                                                                 
|                  | Item 3. Legal Proceedings                                                                                          
|                  | Item 4. Submission of Matters to a Vote of Security Holders                                                        
|PART II          
|                  | Item 5. Market for the Registrants Common Equity and Related Stockholder Matters                                  
|                  | Item 6. Selected Financial Data                                                                                    
|                  | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations                      
|                  | Item 7A. Quantitative and Qualitative Disclosures About Market Risk.                                               
|                  | Item 8. Financial Statements and Supplementary Data                                                                
|                  | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.                      
|PART III         
|                  | Item 10. Directors and Executive Officers of the Registrant                                                        
|                  | Item 11. Executive Compensation                                                                                    
|                  | Item 12. Security Ownership of Certain Beneficial Owners and Management and Management related Stockholder Matters.
|                  | Item 13. Certain Relationships and Related Transactions                                                            
|PART IV          
|                  | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                          
|SIGNATURES       
|POWER OF ATTORNEY
|EXHIBIT INDEX    
|EXHIBIT 13.1     
|EXHIBIT 21.1     
|EXHIBIT 23.1     
|EXHIBIT 99.1     



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TABLE OF CONTENTS

DMC STRATEX NETWORKS, INC.
2002 FORM 10-K ANNUAL REPORT

|        |  |                                                                                       |  |   
|------- |  | ------------------------------------------------------------------------------------- |  | --
|        |  | PART I                                                                                |  |   
|Item 1  |  | Business                                                                              |  | 1 
|Item 2  |  | Properties                                                                            |  | 20
|Item 3  |  | Legal Proceedings                                                                     |  | 20
|Item 4  |  | Submission of Matters to a Vote of Security Holders                                   |  | 20
|        |  | PART II                                                                               |  |   
|Item 5  |  | Market for the Registrants Common Equity and Related Stockholder Matters             |  | 21
|Item 6  |  | Selected Financial Data                                                               |  | 21
|Item 7  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 21
|Item 7A |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 21
|Item 8  |  | Financial Statements and Supplementary Data                                           |  | 23
|Item 9  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 23
|        |  | PART III                                                                              |  |   
|Item 10 |  | Directors and Executive Officers of the Registrant                                    |  | 24
|Item 11 |  | Executive Compensation                                                                |  | 24
|Item 12 |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 24
|Item 13 |  | Certain Relationships and Related Transactions                                        |  | 25
|        |  | PART IV                                                                               |  |   
|Item 14 |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      |  | 26





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Item 1. Business

The following Business Section contains forward-looking statements, which
involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth under Factors That May Affect
Future Financial Results and elsewhere in, or incorporated by reference into,
this Form 10-K.

Introduction

DMC Stratex Networks, Inc., also known as Stratex Networks and formerly
known as Digital Microwave Corporation, was incorporated in California in 1984
and reorganized as a corporation in 1987 under the laws of the State of
Delaware. In August 2000, we changed our name from Digital Microwave
Corporation to DMC Stratex Networks, Inc. We design, manufacture and market
advanced wireless solutions for worldwide telephone network interconnection and
broadband wireless access. We provide our customers with a broad product line,
which contains products that operate using a variety of transmission
frequencies, ranging from 0.3 GigaHertz (GHz) to 38 GHz, and a variety of
transmission capacities, typically ranging from 64 Kilobits to 2XOC-3 or 311
Megabits per second (Mbps). Our broad product line allows us to market and
sell our products to service providers worldwide with varying interconnection
and access requirements. We design our products to meet the requirements of
mobile communications networks and fixed broadband access networks worldwide.
Our products typically enable our customers to deploy and expand their wireless
infrastructure and market their services rapidly to subscribers, so that
service providers can realize a return on their investments in frequency
allocation licenses and network equipment.

We have sold over 237,000 microwave radios, which have been installed in
over 90 countries. We market our products to service providers directly, as
well as indirectly through our relationships with original equipment
manufacturer (OEM) base station suppliers, including Lucent Technologies,
Nokia Telecommunications, Nortel Networks, Motorola Inc., and Siemens AG .
Between April 1, 2001 and March 31, 2002, we sold our products to a number of
service providers, in Asia and the Pacific (including Beijing
Telecommunications Equipment Factory and Motorola Thailand Ltd.), in Europe,
the Middle East and Africa (including One 2 One, Jordan Mobile Telephone
Services, MTN Networks (PVT) Limited and PTK Centertel SP); and in the Americas
(including Empresa Brasileira de Telecomunicaciones and Radiomovil DIPSA S.A.
de C.V. ).

Industry Background

Worldwide demand for high performance and high capacity broadband access,
mobile voice telephony, high-speed data communications and fixed and mobile
cellular communications continues to grow. This growth results from: (i) the
rapid establishment of telecommunications infrastructures in developing
countries, (ii) the business and consumer need for internet broadband access,
(iii) changes in the regulatory environment, (iv) technological advances,
particularly in the wireless telecommunications market, and (v) the deployment
of private communications networks. Given their relatively low cost and ease of
deployment, wireless solutions are attractive to broadband access providers
such as new service providers establishing competing telecommunications
services in developed countries, expansion of existing telecommunications
infrastructures to satisfy increasing usage, and to telecommunications service
providers in developing countries

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seeking to rapidly increase the availability and quality of
telecommunications and internet access services. The upgrade and expansion of
existing networks and the deployment of new networks are both expected to
continue to offer business opportunities for wireless infrastructure suppliers.
Wireless infrastructure suppliers address the requirements of both mobile
communications networks and fixed access networks.

The use of cellular telephone and other wireless services and devices
continues to increase due to technological advances and increasing consumer
demand for connectivity to telecommunications services. The demand for fixed
broadband access networks has also increased due to data transmission
requirements resulting from Internet access demand.

Wireless networks are constructed using microwave radios and other
equipment to connect cell sites, switching systems, other wireline transmission
systems and other fixed access facilities. Wireless networks range in size from
a single transmission link connecting two buildings to complex networks
comprised of thousands of wireless connections. The architecture of a network
is influenced by several factors, including the available radio frequency
spectrum, coordination of frequencies with existing infrastructure, application
requirements, environmental factors and local geography.

Regulatory authorities in different jurisdictions allocate different
portions of the radio frequency spectrum for various telecommunications
services. In addition, most individual networks require radio links operating
at several frequencies and the transmission of voice and data, which typically
requires different transmission capacities. Moreover, networks in different
locations are constructed using different combinations of frequencies and with
different transmission capacities. No single transmission frequency or
transmission capacity predominates in the global market.

Whether expanding existing networks or deploying new networks, service
providers must choose between constructing networks using wireline and fiber
infrastructure or wireless infrastructure or a combination of these options.
Wireline and fiber connectivity solutions typically require significant
installation periods and may be relatively expensive to install. For cellular
telephony in developed countries where wireline and fiber infrastructures are
in place, new service providers may have the option to lease networks from
traditional service providers, but may choose not to do so because leasing
arrangements must be entered into with their competitors, may be comparatively
expensive and do not generally allow control over the network. In developing
countries, many service providers install wireless networks because such
networks are generally faster to install and may be less expensive than
traditional wireline networks. As a result, many service providers deploy
wireless networks as an alternative to the construction or leasing of
traditional wireline networks. For broadband access networks, the service
providers can use fiber or wireless connectivity. Similar to cellular
telephone networks, wireless broadband access is typically less expensive to
install and can be installed more rapidly than a wireline or fiber alternative.

For several applications, digital microwave and millimeter-wave
transmission systems offer numerous advantages over competing transmission
technologies, including lower cost of implementation and rapid deployment.
Digital microwave systems can be deployed in a matter of weeks and typically
require lower infrastructure investments and installation lead times than
alternative transmission technologies.

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We believe that as broadband access and telecommunications requirements
grow, wireless systems will continue to be used as transmission links to
support a variety of existing and expanding communications networks and
applications. In this regard, we believe that wireless systems will be used to
address the connection requirements of several markets and applications,
including the broadband access market, cellular applications, private networks
and wireless analog replacement applications.

Our Solution

We believe that the use of standard design platforms for both hardware and
software components in the development of our products enables us to more
rapidly introduce and commercially ship new products and product enhancements
to address changing market demands. The use of standard design platforms,
flexible architectures and components, and software configurable features
allows us to offer our customers high-performance products with a high degree
of flexibility and functionality. Flexible architectures and components
facilitate system scalability, allow customers to acquire additional features
at a relatively low incremental cost, reduce the development time of new
features, and facilitate the efficient customization of our products. The use
of standard design platforms also enables us to manufacture our products in a
more cost-effective manner. The software features of many of our products
provide our customers with a greater degree of flexibility in installing,
operating and maintaining their networks.

Our Strategy

Our strategy is to build on the strength of our current products, which
offer point-to-point solutions, and our strong customer sales, service and
support organization to improve our position as a leading provider of
integrated wireless solutions for mobile cellular broadband wireless access and
private networks. Key elements of our strategy include:

Maintain a Comprehensive Product Line.We anticipate that the
requirements of our customers will continue to evolve as the telecommunications
services markets change and expand. In this regard, since our customers often
do not know the exact frequency band and capacity needs of their networks at
the time they are awarded franchises, our broad product line provides them with
the flexibility to respond to individual market needs and to coordinate
frequencies with existing infrastructure and other significant variables. We
believe that the use of standard design platforms and flexible architectures
for both hardware and software components in our products enables us to quickly
introduce and commercially ship new products and product enhancements to
address changing market demands. We intend to continue to expand our product
lines in response to the varying worldwide requirements of wireless networks.

Address Worldwide Market Opportunities.We believe that we are well
positioned to address worldwide market opportunities for wireless
infrastructure suppliers. For example, in some African and Asian countries
there are mobile telecommunications infrastructures being built for the first
time; telecommunications infrastructures are being expanded worldwide; and
broadband access networks are being constructed to meet data access
requirements. We believe that maintaining close proximity to our customers
provides us with a competitive advantage in securing orders for our products
and in servicing our customers. Local offices enable us to better understand
the local issues and requirements of our customers and to address our
customers individual geographic,

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regulatory, and infrastructure requirements. As a result, we have
developed a global sales, service and support organization with offices in
Europe, Africa, Asia, New Zealand, Australia, the Middle East and the Americas.
With our twenty-four sales or support offices worldwide, we can normally
respond quickly to our customers needs and provide prompt on-site technical
support.

Leverage Distribution Channels.We market our products to service
providers directly, as well as indirectly through our relationships with OEM
base station suppliers, such as Motorola, Inc., Nokia Telecommunications,
Lucent Technologies, Nortel Networks and Siemens AG, as well as through our
relationships with system integrators. We also market our products through
independent agents and distributors in certain countries. We intend to
leverage upon such relationships and our direct worldwide presence with service
providers to expand our customer base and enhance our global presence.

Focus on Business Expansion into Emerging Applications.We believe that
we can leverage our core technical competencies and our global sales, service
and support organization to enter into growing business applications for our
products, including wireless local loop, data access, wireless data transport,
and alternative local telephone facilities access.

For financial information by operating segment and product category, see
Note 6 to the Consolidated Financial Statements of our 2002 Annual Report to
Stockholders.

Existing Products

Our principal product families include the Altium® XP4, DART, SPECTRUM
II, DXR® 700, DXR® 200, DXR® 100, and ProVision.

Altium.Altium, which began volume shipments in January 1999, is a
technology leading radio platform aimed at providing high capacity solutions in
microwave and millimeter wave bands. From its initial shipments and through
Fiscal 2001, Altium has had the fastest product rollout of any product in our
history. Synchronous Optical Networks (SONET)/Synchronous Digital Hierarchy
(SDH) capable, Altium can wirelessly extend or complete SONET and SDH transport
networks to complement, or be an alternative to, fiber deployment. Key
attributes of size, performance, flexibility and rapid deployment bring
benefits to both interconnect and access applications. Altium operates at
frequencies of 7, 8, 11, 13, 15, 18, 23, 26 and 38 GHZ and at OC-3/STM-1
capacity of 155 Mbps. In February 2001, we introduced the Altium 311 which
provides 2XOC-3 capacity or 311 Mbps. Initial shipments of this new high
capacity product began in March 2001. Altium 311 incorporates the Vantex
chipset, which we introduced in February 2001, utilizes features such as
high-order Quadrature Amplitude Modulation (QAM) (up to 256 QAM), forward error
correction, and adaptive equalization. These are all essential components in
high-performance wireless radio products. With products enabled by Vantex, we
can achieve required capacities in a single chip with significant cost savings.
We are developing additional products based on Altium to meet customer
requirements.

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XP4 Plus.The XP4 Plus Series provides low-to-medium capacity microwave
radio systems for cellular base station connections and fixed wireless access.
XP4 Plus is deployed worldwide and has comprehensive regulatory approvals for a
wide variety of applications and conditions. The XP4 Plus is simple to install
and commission through the front panel controls. Options include protection
(redundancy), high power, Simple Network Management Protocol (SNMP), Automatic
Transmit Power Control (ATPC), and a 100BT Ethernet interface. With broad
platform coverage from 7 to 38 GHz, international deployment capacities of
2/4/8/16xE1 and 1xE3, and U.S. deployment capacities of 15-38 GHz, 4/8xDS-1,
and 1xDS-3, the XP4 Plus meets operators requirements in a single platform.

DART. The DART microwave radio offers a low cost single E1 or DS-1 data
stream transmission and is designed for a smaller cell site in a wireless
network, typically referred to as microcell/picocell, and last-mile access
requirements. DARTs compact, all-outdoor design connects directly to base
station equipment via a single twisted-pair cable, making the DART radio very
easy to install and a viable, cost effective alternative to leased line
facilities. The DART radio can also be used in the build out of wireless
Internet access networks. Features of the DART microwave radio include its
compact, integrated outdoor unit, low power consumption, programmability from
laptop computers, and Simple Network Management Protocol (SNMP) compatibility.
Available frequencies range from 15 GHz to 38 GHz.

SPECTRUM II. The SPECTRUM II product family offers medium capacity
products ranging from T-1 (or 1.5 Mbps) to DS-3 (or 45 Mbps) that operate at 7,
8, 13, 15, 18, 23, 26 and 38 GHz. The SPECTRUM II product line is smaller in
size, less expensive and easier to install than our previous products. As a
result of increased functionality in the XP-4 product line, we are phasing out
the Spectrum II product line.

DXR 700.The DXR 700 product family is a high performance radio platform
that operates across a range of capacities from 2x2 Mbps to 45 Mbps, using
efficient 16 and 64 QAM. A set of advanced features (including forward error
correction and an adaptive equalizer) target medium- and long-distance link
requirements. Optional errorless diversity protection switching delivers
optimal performance under the most difficult radio transmission conditions.
The DXR 700 platform covers multiple frequencies from 2 GHz to 11 GHz.

DXR 200. The DXR 200 product line provides an integrated, modular,
linking solution for a wide variety of communications systems in markets with
low to medium capacity transmission requirements. The DXR 200s integrated
modular design allows it to support a variety of configurations, which can
incorporate multiple features in the unit to accommodate the differing
communications needs of our customers, overcome difficult radio frequency
environments, accommodate multiple data speeds and support multiple
communication protocols. The DXR 200 can operate in frequency bands from 300
Mhz to 2.7 GHz.

DXR 100. The DXR 100 product line is designed to address medium and long
distances, trunking applications and capacities higher than those addressed by
the DXR 200. The DXR 100 supports these higher capacity environments using
spectrum efficient transmission techniques, including Quadrature Phase Shift
Keying (QPSK) or QAM modulation and low error rate technologies, including
forward error correction and adaptive equalization. The DXR 100 provides low
to medium capacity links for cellular

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applications, basic telephony transmission and customer access
applications, particularly in urban areas. The DXR 100 supports a variety of
data rates with high spectrum efficiencies and maintains signal reception in
harsh or difficult radio frequency environments.

ProVision.The ProVision element manager is a centralized network
monitoring and control system for all of our products. Based on a UNIX system
platform, the ProVision element manager can expand to manage small systems as
well as large networks. The system is particularly suitable for management of
broadband access networks. The ProVision management system is built on open
standards. It supports multiple protocols, such as SNMP, TL1 and ASCII, and it
seamlessly integrates into higher level managers through available interfaces.
The ProVision element manager is compatible with all our management-enabled
radios, including the Altium, SPECTRUM II, XP4, DXR and DART radio families, as
well as our prior radio products.

New Product Development

We intend to continue to focus significant resources on product
development to maintain our competitiveness and to support our entry into new
wireless opportunities, including wireless data transport and alternative local
telephone facilities access. Programs currently in progress, if successfully
completed, could result in new products and additions to current product
families that will have the capability to handle greater amounts of voice and
data traffic at increased cost-effectiveness.

There can be no assurance that we will be successful in developing and
marketing any of the products currently being developed, that we will not
experience difficulties that could further delay or prevent the successful
development, introduction and sale of future products, or that these products
will adequately meet the requirements of the marketplace and achieve market
acceptance. See Research and Development.

Customers

We market our products to customers in the telecommunications industry
worldwide. Our customers include service providers, which incorporate our
products into their telecommunications networks to deliver services directly to
consumers, and OEMs, which provide and install integrated systems to service
providers.

Although we have a large customer base, during any given quarter, a small
number of customers may account for a significant portion of our net sales. In
certain circumstances we sell our products to service providers through OEMs,
which provide the service providers with access to financing and in some
instances, protection from fluctuations in foreign currency exchange rates.
One customer accounted for 15% of net sales for Fiscal 2002 and one customer
accounted for 16% of net sales for Fiscal 2000. No other customers accounted
for more than 10% of net sales during Fiscal 2002, 2001, or 2000. At March 31,
2002, four customers collectively accounted for approximately 49% of our $94.1
million backlog and one of these customers accounted for 19% of our March 31,
2002 backlog. While management considers our relationships with each of our
major customers to be good, there can be no assurance that our current
customers will continue to place orders with us, that orders by existing
customers will continue to be at levels of previous periods, or that we will be
able to obtain orders from new customers. Our customers typically are not
contractually obligated to purchase any quantity of products in

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a particular period, and product sales to major customers have varied
widely from period to period. The loss of any existing customer, a significant
reduction in the level of sales to any existing customer, or our failure to
gain additional customers could have a material adverse effect on our business,
financial condition and results of operations. See Factors That May Affect
Future Financial Results.

Sales, Marketing and Service

We believe that a direct and continuing relationship with service
providers is a competitive advantage in attracting new customers and satisfying
existing ones. As a result, we offer our products and services principally
through our own sales, service and support organization, which allows us to
closely monitor the needs of our customers. We have offices in the United
States, Mexico, Colombia, Argentina, Brazil, the United Kingdom, France,
Poland, Germany, Greece, South Africa, the United Arab Emirates, India,
Singapore, the Peoples Republic of China, Malaysia, Thailand, the Philippines,
New Zealand and Australia. Our local offices provide us with a better
understanding of our customers needs and enable us to respond to local issues
and unique local requirements.

We have informal, and in some cases formal, relationships with OEM base
station suppliers. Such relationships increase our ability to pursue the
limited number of major contract awards each year. In addition, such
relationships provide our customers with easier access to financing and to
integrated system providers with a variety of equipment and service
capabilities. There can be no assurance that we will continue to be able to
maintain and develop such relationships or, that if such relationships are
developed, they will be successful. In selected countries, we also market our
products through independent agents and distributors, as well as system
integrators.

As of March 31, 2002, we employed approximately 279 people in our sales
marketing, service and support organization, approximately 80% of who primarily
support sales outside the United States. Sales personnel are highly trained to
provide the customer with assistance in selecting and configuring a digital
microwave system suitable for the customers particular needs. Our customer
service and support personnel provide customers with training, installation,
service and maintenance of our systems under contract. We generally offer a 27
month (which includes 3 months for installation either by us or the buyer)
limited warranty for all customers on all of our products. We provide warranty
and post-warranty services from our manufacturing locations in the United
States and New Zealand and our service centers in the United Kingdom and the
Philippines.

Research and Development

We believe that our ability to enhance our current products, develop and
introduce new products on a timely basis, maintain technological
competitiveness and meet customer requirements is essential to our success.
Accordingly, we allocate, and intend to continue to allocate, a significant
portion of our resources to research and development efforts. During Fiscal
2002, we invested $18.5 million or 8.1% of net sales on research and
development, compared to $24.0 million or 5.7% of net sales in Fiscal 2001 and
$24.4 million or 8.1% of net sales in Fiscal 2000. We expect our research and
development spending to remain at a significant percentage of sales in Fiscal
2003 as we deliver new high capacity products. As of March 31, 2002, we
employed a total of approximately 118

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people in our research and development organizations in San Jose,
California and Wellington, New Zealand.

The market for our products is characterized by rapidly changing
technologies and evolving industry standards. Accordingly, our future
performance depends on a number of factors, including our ability to identify
emerging technological trends in our target markets, to develop and to maintain
competitive products, to enhance our products by adding innovative features
that differentiate our products from those of our competitors, and to
manufacture and bring products to market quickly at cost-effective prices. We
believe that the use of flexible architectures and components assists in the
rapid deployment of new products and enhancements to satisfy customer, industry
and market needs. We believe that to remain competitive in the future, we will
need to continue to develop new products which require the investment of
significant financial resources in product development. There can be no
assurance, however, that we will successfully complete the development of any
future products, that such products will achieve market acceptance or that such
products will be capable of being manufactured at competitive prices in
sufficient volumes. In the event that such products are not developed in a
timely manner, do not gain market acceptance or are not manufacturable at
competitive prices, our business, financial condition and results of operations
could be harmed.

Manufacturing and Suppliers

Our manufacturing operations consist primarily of final assembly, software
configuration, and final test and quality control of materials and components.
The manufacturing process consists primarily of supply chain management,
extensive unit and environmental testing of critical subassemblies at each
stage of the manufacturing process, final assembly of the terminals, and prior
to shipment, quality assurance testing and inspection of all products. We have
manufacturing facilities, which presently are located in San Jose, California,
Wellington, New Zealand and in Campinas, Brazil. The manufacturing operations
in San Jose, California and Wellington, New Zealand are certified to
International Standards Organization (ISO) 9001, a recognized international
quality standard. Our manufacturing facility in Campinas, Brazil is scheduled
for ISO 9001 certification during Fiscal 2003. The manufacturing facility in
Wellington, New Zealand is also certified to ISO 14001, an internationally
recognized environmental quality standard. As of March 31, 2002, we maintained
a staff of 234 manufacturing personnel.

Our manufacturing operations are highly dependent upon the delivery of
materials and components by outside suppliers in a timely manner. In addition,
we depend in part upon subcontractors to assemble major components and
subassemblies used in our products in a timely and satisfactory manner. We do
not generally enter into long-term or volume purchase agreements with any of
our suppliers, and no assurance can be given that such materials, components
and subsystems will be available in the quantities required by us, if at all.
Our inability to develop alternative sources of supply quickly and on a
cost-effective basis could materially impair our ability to manufacture and
deliver our products in a timely manner. There can be no assurance that we will
not experience material supply problems or component or subsystem delays in the
future.

From time to time, we have experienced delays and other supply problems
with our suppliers, but such delays and other problems have not had a
significant impact on our operating results. We maintain continual
communication between our management and the

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management of our key suppliers to ensure that production requirements and
constraints are taken into account in each of our respective production plans.

Backlog

Our backlog at March 31, 2002 was $94.1 million, as compared with $160.3
million at March 31, 2001. We only include orders scheduled for delivery within
twelve months in our backlog. Product orders in our current backlog are subject
to changes in delivery schedules or to cancellation at the option of the
purchaser without significant penalty. Accordingly, although useful for
scheduling production, backlog as of any particular date may not be a reliable
measure of sales for any future period because of the timing of orders,
delivery intervals, customer and product mix, and the possibility of changes in
delivery schedules and additions or cancellations of orders.

Competition

The wireless interconnection and access business is a specialized segment
of the wireless telecommunications industry and is extremely competitive. We
expect that competition will increase. Many of our competitors have more
extensive engineering, manufacturing and marketing capabilities and
significantly greater financial, technical, and personnel resources than us. In
addition, some of our competitors may have greater name recognition, broader
product lines, a larger installed base of products and longer-standing customer
relationships. Our existing and potential competitors include established and
emerging companies, such as Alcatel, Ceragon Networks, L.M. Ericsson, Microwave
Communications Division of Harris Corporation, NEC, Nera Telecommunications,
Nokia, P-COM, Inc, Sagem AS, SIAE, Siemens AG, as well as several private
companies currently in the startup stage. Some of our competitors have product
lines that compete with ours, and are also original equipment manufacturers
(OEMs) through which we market and sell our products. Some of our largest
customers could internally develop the capability to manufacture products
similar to those manufactured by us and, as a result, their demand for our
products and services may decrease. We believe that our ability to compete
successfully will depend on a number of factors both within and outside our
control, including price, quality, availability, customer service and support,
breadth of product line, product performance and features, rapid time-to-market
delivery capabilities, reliability, timing of new product introductions by us,
our customers and our competitors, and the ability of our customers to obtain
financing. We cannot assure you that we will have the financial resources,
technical expertise, or marketing, sales, distribution, and customer service
and support capabilities to compete successfully. See Factors That May Affect
Future Financial Results.

Government Regulation

Radio communications are subject to regulation by United States laws,
foreign laws and international treaties. Our equipment must conform to domestic
and international requirements established to avoid interference among users of
microwave frequencies and to permit interconnection of telecommunications
equipment. We believe that we have complied with such rules and regulations
with respect to our existing products. Any delays in compliance with respect to
future products could delay the introduction of such products. In addition,
radio transmission is subject to regulation by foreign laws and international
treaties. Equipment to support these services can be marketed only if permitted
by suitable frequency allocations and regulations. Failure by the regulatory

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authorities to allocate suitable frequency spectrum could harm our
business, financial condition and results of operations.

The regulatory environment in which we operate is subject to change.
Regulatory changes, which are affected by political, economic and technical
factors, could significantly impact our operations by restricting development
efforts by us and our customers, making current systems obsolete or increasing
the opportunity for additional competition. Any such regulatory changes could
harm our business, financial condition and results of operations. We might
deem it necessary or advisable to modify our systems to operate in compliance
with such regulations. Such modifications could be extremely expensive and
time-consuming to complete.

Intellectual Property

Our ability to compete will depend, in part, on our ability to obtain and
enforce intellectual property protection for our technology in the United
States and internationally. We rely upon a combination of trade secrets,
trademarks, patents and contractual rights to protect our intellectual
property. For example, we presently have seven patents, including one foreign
patent, and one pending patent covering our products. In addition, we enter
into confidentiality and invention assignment agreements with our employees,
and enter into non-disclosure agreements with our suppliers and appropriate
customers so as to limit access to and disclosure of our proprietary
information. There can be no assurance that any steps taken by us will be
adequate to deter misappropriation or impede independent third party
development of similar technologies. In the event that such intellectual
property arrangements are insufficient, our business, financial condition and
results of operations could be harmed. Moreover, there can be no assurance that
the protection provided to our intellectual property by the laws and courts of
foreign nations will be substantially similar to the remedies available under
United States law or that third parties will not assert infringement claims
against us.

While our ability to compete may be affected by our ability to protect our
intellectual property, we believe that, because of the rapid pace of
technological change in the wireless telecommunications industry, our
innovative skills, technical expertise and ability to introduce new products on
a timely basis will be more important in maintaining our competitive position
than protection of our intellectual property. Trade secret, trademark,
copyright and patent protections are important but must be supported by other
factors such as the expanding knowledge, ability and experience of our
personnel, new product introductions and product enhancements. Although we
continue to implement protective measures and intend to defend vigorously our
intellectual property rights, there can be no assurance that these measures
will be successful.

The wireless telecommunication industry is characterized by frequent
allegations of patent infringement among competitors and considerable related
litigation. We may in the future be notified that we are infringing certain
patent or other intellectual property rights of others. Although there are
currently no such pending lawsuits against us or unresolved notices that we are
infringing upon intellectual property rights of others, there can be no
assurance that litigation or infringement claims will not occur in the future.
Such litigation or claims could result in substantial costs and diversion of
resources and could harm our business, financial condition and results of
operations. In the event of an adverse result of any such litigation, we could
be required to expend significant resources to develop non-infringing
technology or to obtain licenses to the technology that is the

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subject of the litigation. There can be no assurance that we would be
successful in such development or that any such license would be available on
commercially reasonable terms.

Employees

As of March 31, 2002, we employed 760 full-time and temporary
employees. None of our employees are represented by a collective
bargaining agreement. Our future performance will depend in
large measure on our ability to attract and retain highly
skilled employees. Competition for such personnel is intense and
there can be no assurance that we will be successful in
attracting and retaining highly skilled employees. We have never
experienced a work stoppage and believe our relationship with
our employees to be good. Due to the macroeconomic and capital
spending issues affecting the telecommunications industry, we
undertook a reduction in force of approximately 35% during
Fiscal 2002.

Factors That May Affect Future Financial Results

The statements in our Annual Report and this Annual Report on Form 10-K
concerning our future products, expenses, revenues, gross margins, liquidity,
and cash needs, as well as our plans and strategies, contain forward-looking
statements concerning our future operations and financial results within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Exchange Act of 1934, as amended. Such forward-looking statements
include statements relating to new opportunities for wireless infrastructure
suppliers, continued use of wireless systems as transmission links to support a
variety of existing and expanding communications networks and applications, the
use of wireless systems to address the connection requirements of several
markets and applications, our ability to rapidly introduce and commercially
ship new products and product enhancements that address changing market
demands, the change in our customers requirements as the telecommunications
services markets change and expand, the expansion of our product lines in
response to the varying worldwide requirements of wireless networks, our
competitive advantage in securing orders for our products and in servicing our
customers, our need to continue to develop new products, our maintaining a high
level of communication between all levels of our management and the management
of our key suppliers, our ability to compete successfully, the competitive
local exchange carrier (CLEC) market in Fiscal 2003, the pricing pressure
among manufacturers of digital microwave telecommunications equipment,
declining average sales prices, the impact of the economic
crisis in Argentina on our financial position, the growth of our international sales and
exchange rate gains and losses from unhedged foreign currency exposures. All
statements, trend analyses and other information contained herein relative to
markets for our services and products and trends in revenue, as well as other
statements including such words as anticipate, believe, plan,
estimate, expect, goal, intend, and other similar expressions
constitute forward-looking statements. These forward-looking statements are
based on current expectations, and we assume no obligation to update this
information. Numerous factors, such as economic and competitive conditions,
timing and volume of incoming orders, shipment volumes, product margins, and
foreign exchange rates, could cause actual results to differ materially from
those described in these statements, and prospective investors and stockholders
should carefully consider the factors set forth below in evaluating these
forward-looking statements.

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Competition could harm our ability to maintain or improve our position in the
market and could decrease our revenues.

The wireless interconnection and access business is a specialized segment
of the wireless telecommunications industry and is extremely competitive. We
expect that competition will increase. Many of our competitors have more
extensive engineering, manufacturing and marketing capabilities and
significantly greater financial, technical, and personnel resources than us. In
addition, some of our competitors may have greater name recognition, broader
product lines, a larger installed base of products and longer-standing customer
relationships. Our existing and potential competitors include established and
emerging companies, such as Alcatel, Ceragon Networks, L.M. Ericsson, Microwave
Communications Division of Harris Corporation, NEC, Nera, Nokia, P-COM, Inc.,
Sagem AS, SIAE, Siemens AG, as well as several private companies currently in
the startup stage. Some of our competitors have product lines that compete
with ours, and are also original equipment manufacturers (OEMs) through which
we market and sell our products. Some of our largest customers could internally
develop the capability to manufacture products similar to those manufactured by
us and, as a result, their demand for our products and services may decrease.

In addition, we compete for acquisition and expansion opportunities with
many entities that have substantially greater resources than us. Furthermore,
any acquisition we complete may encourage certain of our competitors to enter
into additional business combinations, to accelerate product development, or to
engage in aggressive price reductions or other competitive practices, thereby
creating even more powerful or aggressive competitors.

We believe that our ability to compete successfully will depend on a
number of factors both within and outside our control, including price,
quality, availability, customer service and support, breadth of product line,
product performance and features, rapid time-to-market delivery capabilities,
reliability, timing of new product introductions by us, our customers and our
competitors, and the ability of our customers to obtain financing. We cannot
assure you that we will have the financial resources, technical expertise, or
marketing, sales, distribution, and customer service and support capabilities
to compete successfully.

If we fail to maintain our relationships with original equipment manufacturers,
our distribution channels could be harmed, which could cause our revenues to
decrease.

We have relationships with OEM base station suppliers and in selected
countries we also market our products through independent agents and
distributors. These relationships increase our ability to pursue the limited
number of major contract awards each year. In addition, these relationships are
intended to provide our customers with easier access to financing and to
integrated systems providers with a variety of equipment and service
capabilities. We may not be able to continue to maintain and develop these
relationships or, if these relationships are developed, they may not be
successful. Our inability to establish or maintain these distribution
relationships could restrict our ability to market our products and thereby
result in significant revenue shortfalls. If these revenue shortfalls occur,
our business, financial condition or results of operations may be harmed.

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Our industry is volatile and subject to frequent changes, and we may not be
able to respond effectively or in a timely manner to these changes.

We participate in a highly volatile industry that is characterized by
vigorous competition for market share and rapid technological development.
These factors could result in aggressive pricing practices and growing
competition both from start-up companies and from well-capitalized
telecommunication systems providers which, in turn, could decrease our
revenues. In response to changes in our industry and market conditions, we may
restructure our activities to more strategically realign our resources. This
includes assessing whether we should consider disposing of or otherwise exiting
businesses and reviewing the recoverability of our tangible and intangible
assets. Any decision to limit investment in our tangible and intangible assets
or to dispose of or otherwise exit businesses may result in the recording of
accrued liabilities for special charges such as workforce reduction costs.
Additionally, accounting estimates with respect to the useful life and ultimate
recoverability of our carrying basis of assets could change as a result of such
assessments and decisions, and could harm our results of operations.

Because of the severe economic downturn in the world economy, and bankruptcies
and financial difficulties in the competitive local exchange carrier business,
the demand for our products and services may decrease.

Due to the rapid and increasingly severe economic downturn in the United
States, as well as the global tightening of the capital markets for the
telecommunications and mobile cellular projects during calendar 2001 and the
first calendar quarter of 2002, our business opportunities have decreased in
the United States, Europe, Asia and other countries and geographic regions
where we conduct business. To the extent that the economic downturn and the
global tightening of the capital markets continue, the demand for our products
and services may decrease further in these countries and geographical regions.
In addition, the terrorist attack of September 11, 2001, the subsequent
military response by the United States and future events occurring in response
to or in connection with the attacks may have, and may continue to, negatively
impact the economy in general. This could result in our customers delaying or
canceling the purchase of our products, which would have a significant negative
impact on our revenues. Due in part to the economic downturn, we undertook a
worldwide reduction in work force of approximately 35% and closed our Seattle,
Washington facility in Fiscal 2002. In addition, due to the collapse of the
CLEC business in the United States, we expect little, if any, business from the
CLEC market in Fiscal 2003.

Consolidation within the telecommunications industry and among suppliers could
decrease our revenues.

The telecommunications industry has experienced significant consolidation
among its participants, and we expect this trend to continue. Some operators in
this industry have experienced financial difficulty and have, or may, file for
bankruptcy protection or be acquired by other operators. Other operators may
merge and one or more of our competitors may supply products to such companies
that have merged or will merge. This consolidation could result in purchasing
decision delays by the merged companies and decrease opportunities for us to
supply our products to the merged companies. We may also see similar
consolidation among suppliers, which may further decrease our opportunity to
market and sell our products.

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Our average sales prices are declining, which is decreasing our gross profit
margins.

Currently, manufacturers of digital microwave telecommunications equipment
are experiencing, and are likely to continue to experience, on-going price
pressure. This price pressure has resulted in, and is expected to continue to
result in, downward pricing pressure on our products. As a result, we have
experienced, and expect to continue to experience, declining average sales
prices for our products. Our future profitability is dependent upon our ability
to improve manufacturing efficiencies, reduce costs of materials used in our
products, and to continue to introduce new products and product enhancements.
Our inability to respond to increased price competition will harm our business,
financial condition and results of operations. Since our customers frequently
negotiate supply arrangements far in advance of delivery dates, we must often
commit to price reductions for our products before we are aware of how, or if,
cost reductions can be obtained. As a result, current or future price reduction
commitments could, and any inability by us to respond to increased price
competition would, harm our business, financial condition and results of
operations.

Financial difficulties confronting our customers expose us to increased credit
risks and may decrease our revenues and profitability.

Competitive local exchange carriers (CLECs), which comprised a significant
segment of our customer base in Fiscal 2001, have since faced severe financial
difficulties. Several major CLECs, such as Winstar and Teligent, have declared
bankruptcy. As a result, our revenues were exposed to greater risks related to
customer credit than they have been in recent periods. For Fiscal 2001, we
recorded a reserve against receivables of $22.0 million for receivables that we
were unable to collect from CLECs in the United States. In addition, in the
second quarter of Fiscal 2002, we recorded an asset valuation charge of $5.0
million against some of our foreign accounts receivable. If the economic
downturn continues, we may be forced to take additional reserves for
receivables, which would decrease our profits.

Because a significant amount of our revenues comes from a few customers, the
termination of any of these customer relationships may harm our business.

Sales of our products are concentrated in a small number of customers. One
customer accounted for approximately 15% of net sales for Fiscal 2002. Three
customers accounted for approximately 16%, 15% and 12%, respectively, of the
total accounts receivable balance at the end of the Fiscal 2002. The worldwide
telecommunications industry is dominated by a small number of large
corporations, and we expect that a significant portion of our future product
sales will continue to be concentrated in a limited number of customers. In
addition, our customers typically are not contractually obligated to purchase
any quantity of products in any particular period and product sales to major
customers have varied widely from period to period. In addition, as a result of
the global tightening of the capital markets for the telecommunications and
mobile cellular projects in calendar year 2001 and the first calendar quarter
of 2002, the demand for our products and services has decreased and may
continue to decrease. The loss of any existing customer, a significant
reduction in the level of sales to any existing customer, or our inability to
gain additional customers could result in further declines in our revenues. If
these revenue declines occur, our business, financial condition, and results of
operations would be harmed.

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Due to our significant volume of international sales, we are susceptible to a
number of political, economic and geographic risks that could harm our business
if they occur.

We are highly dependent on sales to customers outside the United States.
During Fiscal 2000, 2001, and 2002 sales to international customers accounted
for 79%, 69% and 92% of our net sales, respectively. A significant portion of
these international sales is in lesser developed countries and we expect that
international sales will continue to account for the majority of our net
product sales for the foreseeable future. As a result, the occurrence of any
international, political, economic or geographic event that adversely affects
our business could result in significant revenue shortfalls. These revenue
shortfalls could cause our business, financial condition and results of
operations to be harmed. Some of the risks and challenges of doing business
internationally include:



| |  |  | unexpected changes in regulatory requirements;                                                
| | - |  | ----------------------------------------------------------------------------------------------
|
| |  |  | fluctuations in foreign currency exchange rates;                                              
|
| |  |  | imposition of tariffs and other barriers and restrictions;                                    
|
| |  |  | management and operation of an enterprise spread over
various countries;                      
|
| |  |  | burden of complying with a variety of foreign laws;                                           
|
| |  |  | general economic and geopolitical conditions, including
inflation and trade relationships; and
|
| |  |  | war and acts of terrorism.                                                                    

Lack of component availability or the inability of our subcontractors to
perform, or our key suppliers to manufacture and deliver our products, could
cause our products to be produced in an untimely or unsatisfactory manner.

Our manufacturing operations are highly dependent upon the delivery of
materials by outside suppliers in a timely manner. Also, we depend in part upon
subcontractors to assemble major components and subsystems used in our products
in a timely and satisfactory manner. We do not generally enter into long-term
or volume purchase agreements with any of our suppliers, and we cannot assure
you that such materials, components and subsystems will be available to us at
such time and in quantities we require, if at all. In addition, due to the
rapid and increasingly severe economic downturn, our suppliers have experienced
and are continuing to experience various financial difficulties which may
impact their ability to supply the materials, components and subsystems that we
require. Our inability to develop alternative sources of supply quickly and on
a cost-effective basis could materially impair our ability to manufacture and
deliver our products to our customers in a timely manner. We cannot assure you
that we will not experience material supply problems or component or subsystem
delays in the future.

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The global tightening of capital markets for the telecommunications and mobile
cellular projects may result in inventory which we cannot sell or be required
to sell at distressed prices.

Many of our current and potential customers require significant capital
funding to finance their telecommunications and mobile cellular projects, which
include the purchase of our products and services. Due to the current
tightening of capital markets worldwide, available funding for these projects
has been and may continue to be unavailable to some customers and thereby slow
or halt the purchase of our products and services. This reduction in demand
has resulted in excess inventories on hand, and could result in additional
excess inventories in the future. In Fiscal 2002, we recorded inventory
valuation charges of $102.7 million for excess inventory and supplier
commitments resulting from the reduction in our sales volume compared to the
prior fiscal year. If funding continues to be unavailable to our customers or
their customers, we may be forced to take additional reserves for excess
inventory. We cannot assure you that we will be successful in matching our
inventory purchases with anticipated shipment volumes. As a result, we may
fail to control the amount of inventory on hand and may be forced to take
unanticipated additional reserves. Such additional inventory reserves, if
required, would decrease our profits.

If we fail to manage our internal development or successfully integrate
acquired businesses, we may not effectively manage our growth and our business
may be harmed.

Future growth of our operations depends, in part, on our ability to
introduce new products and enhancements to existing products to meet the
emerging trends in our industry. We have pursued, and will continue to pursue,
growth opportunities through internal development, minority investments and
acquisitions of complementary businesses and technologies. We are unable to
predict whether and when any prospective acquisition candidate will become
available or the likelihood that any acquisition will be completed and
successfully integrated. Once integrated, acquired businesses may not achieve
comparable levels of revenues, profitability or productivity as our existing
business or otherwise perform as expected. Also, acquisitions may involve
difficulties in the retention of personnel, diversion of managements
attention, risks of our customers and customers of acquired businesses
deferring purchase decisions as they evaluate the impact of the acquisition,
unexpected legal liabilities, and tax and accounting issues. Our failure to
manage growth effectively could harm our business, financial condition and
results of operations.

The unpredictability of our quarter-to-quarter results may harm the trading
price of our common stock.

Our quarterly operating results may vary significantly in the future for a
variety of reasons, many of which are outside of our control, and any of which
may harm our business. These factors include:



| |  |  | volume and timing of product orders received and delivered
during the quarter;                           
| | - |  | ---------------------------------------------------------------------------------------------------------
|
| |  |  | our ability and the ability of our key suppliers to respond
to changes made by customers in their orders;

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| |  |  | timing of new product introductions by us or our competitors;                          
| | - |  | ---------------------------------------------------------------------------------------
|
| |  |  | changes in the mix of products sold by us;                                             
|
| |  |  | cost and availability of components and subsystems;                                    
|
| |  |  | downward pricing pressure on our products;                                             
|
| |  |  | adoption of new technologies and industry standards;                                   
|
| |  |  | competitive factors, including pricing, availability and
demand for competing products;
|
| |  |  | ability of our customers to obtain financing to enable
their purchase of our products; 
|
| |  |  | fluctuations in foreign currency exchange rates;                                       
|
| |  |  | regulatory developments; and                                                           
|
| |  |  | general economic conditions in the United States and internationally.                  

Our quarterly results are difficult to predict and delays in product
delivery or closing of a sale can cause revenues and net income to fluctuate
significantly from anticipated levels. In addition, we may increase spending in
response to competition or to pursue new market opportunities. Accordingly, we
cannot assure you that we will be able to sustain profitability in the future,
particularly on a quarter-to-quarter basis.

Because of intense competition for highly skilled personnel, we may not be able
to recruit and retain qualified personnel.

Due to the specialized nature of our business, our future performance is
highly dependent upon the continued services of our key engineering personnel
and executive officers, including Charles D. Kissner, who currently serves as
our Chairman of the Board and Chief Executive Officer. The loss of any key
personnel could harm our business. Our prospects depend upon our ability to
attract and retain qualified engineering, manufacturing, marketing, sales and
management personnel for our operations. Competition for personnel is intense
and we may not be successful in attracting or retaining qualified personnel.
The failure of any key employee to perform in his or her current position or
our inability to attract and retain qualified personnel could harm our business
and deter our ability to expand our business.

If we are unable to protect our intellectual property rights adequately, we may
be deprived of legal recourse against those who misappropriate our intellectual
property.

Our ability to compete will depend, in part, on our ability to obtain and
enforce intellectual property protection for our technology in the United
States and internationally. We currently rely upon a combination of trade
secrets, trademark, patents and contractual rights to protect our intellectual
property. In addition, we enter into confidentiality and

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invention assignment agreements with our employees, and enter into
non-disclosure agreements with our suppliers and appropriate customers so as to
limit access to and disclosure of our proprietary information. We cannot assure
you that any steps taken by us will be adequate to deter misappropriation or
impede independent third party development of similar technologies. In the
event that such intellectual property arrangements are insufficient, our
business, financial condition and results of operations could be harmed.
Moreover, we have significant operations in the United Kingdom and New Zealand,
and our business is highly dependent on sales to customers outside the United
States. We cannot assure you that the protection provided to our intellectual
property by the laws and courts of foreign nations will be substantially
similar to the remedies available under United States law. Furthermore, we
cannot assure you that third parties will not assert infringement claims
against us based on foreign intellectual property rights and laws that are
different from those established in the United States.

Defending against intellectual property infringement claims could be expensive
and could disrupt our business.

The wireless telecommunications industry is characterized by vigorous
protection and pursuit of intellectual property rights, which has resulted in
often protracted and expensive litigation. We may in the future be notified
that we are infringing certain patent or other intellectual property rights of
others. Such litigation or claim could result in substantial costs and
diversion of resources. In the event of an adverse result of any such
litigation, we could be required to pay substantial damages, cease the
licensing of allegedly infringing technology or the sale of allegedly
infringing products and expend significant resources to develop non-infringing
technology or to obtain licenses for the infringing technology. We cannot
assure you that we would be successful in developing such non-infringing
technology or that any license for the infringing technology would be available
to us on commercially reasonable terms, if at all.

If sufficient radio frequency spectrum is not allocated for use by our
products, and we fail to obtain regulatory approval for our products, our
ability to market our products may be restricted.

Radio communications are subject to regulation by United States and
foreign laws and international treaties. Generally, our products must conform
to a variety of United States and international requirements established to
avoid interference among users of transmission frequencies and to permit
interconnection of telecommunications equipment. Any delays in compliance with
respect to our future products could delay the introduction of such
productions.

In addition, both in the United States and internationally, we are
affected by the allocation and auction of the radio frequency spectrum by
governmental authorities. Such governmental authorities may not allocate
sufficient radio frequency spectrum for use by our products or we may not be
successful in obtaining regulatory approval for our products from these
authorities. Historically, in many developed countries, the unavailability of
frequency spectrum has inhibited the growth of wireless telecommunications
networks. In addition, to operate in a jurisdiction, we must obtain regulatory
approval for our products. Each jurisdiction in which we market our products
has its own regulations governing radio communications. Products that support
emerging wireless telecommunications services can be marketed in a jurisdiction
only if permitted by suitable frequency allocations, auctions and regulations,
and the process of establishing

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new regulations is complex and lengthy. If we are unable to obtain
sufficient allocation of radio frequency spectrum by the appropriate
governmental authority or obtain the proper regulatory approval for our
products, our business, financial condition or results of operations may be
harmed.

If we fail to develop products that meet our customers technical
specifications on a timely basis, our business may be harmed.

The existing and potential market for our products and technology are
characterized by ever-increasing performance requirements, evolving industry
standards, rapid technological changes and product obsolescence. These
characteristics lead to frequent new products and technology introductions and
enhancements, shorter product life cycles and changes in customer demands. We
cannot assure you that we will be successful in developing or marketing any of
our products currently being developed. Moreover, we cannot assure you that we
will not experience difficulties that could further delay or prevent the
successful development, introduction and sale of future products, or that these
products will adequately meet the requirements of the marketplace and achieve
market acceptance.

We may not successfully adapt to regulatory changes in our industry, which
could significantly impact the operation of our business.

The regulatory environment in which we operate is subject to change.
Regulatory changes, which are affected by political, economic and technical
factors, could significantly impact our operations by restricting development
efforts by us and our customers, making current products and systems in the
industry obsolete or increasing the opportunity for additional competition. Any
such regulatory changes could harm our business, financial condition and
results of operations. It may be necessary or advisable in the future to modify
our products to operate in compliance with such regulations. Such modifications
could be extremely expensive and time-consuming to complete.

Our stock price may be volatile, which may lead to losses by investors.

Announcements of developments related to our business, announcements by
competitors, quarterly fluctuations in our financial results and general
conditions in the telecommunications industry in which we compete, or the
economies of the countries in which we do business and other factors could
cause the price of our common stock to fluctuate, perhaps substantially. In
addition, in recent years the stock market has experienced extreme price
fluctuations, which have often been unrelated to the operating performance of
affected companies. These factors and fluctuations could lower the market price
of our common stock.

We may incur significant expenses if we decide to change our independent public
accounting firm.

On March 14, 2002, our independent public
accounting firm, Arthur Andersen LLP (Arthur
Andersen), was indicted on federal obstruction of
justice charges arising from the governments
investigation of Enron Corp. Arthur
Andersen has indicated that it intends to contest
vigorously the indictment. The Securities and
Exchange Commission (SEC) has said that it will
continue accepting financial statements audited by
Arthur Andersen, as well as interim financial
statements reviewed by the firm, so long

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as Arthur Andersen is able to make certain
representations to its clients. We do not know
the impact of the indictment, or whether
additional indictments may be made by the
Department of Justice. Accordingly, we have
received proposals from various other accounting
firms and expect to change our independent public
accountants during the first quarter of Fiscal
2003. In that case, we may incur significant
expenses in familiarizing the new accountants with
our accounting.




Item 2. Properties

Our corporate offices and principal research, development and
manufacturing facilities are located in San Jose, California in three leased
buildings aggregating approximately 132,000 square feet. We also lease three
buildings in Milpitas, California totaling 80,000 square feet that are used for
sales administration and warehousing. Although we have discontinued our Seattle
operations we have an ongoing lease commitment. The Seattle facility consists
of two leased buildings aggregating approximately 124,000 square feet of office
and manufacturing space.

We also own a 44,000 square foot service and repair facility in Hamilton,
Scotland and lease 10,000 square feet in Coventry, England. We plan to move
from the Coventry building to smaller premises in Fiscal 2003. We lease 2,000
square feet of office space and own an additional 28,000 square feet of office
and manufacturing space in Wellington, New Zealand. Additionally, we also
lease an aggregate of approximately 40,000 square feet worldwide for sales,
customer service and support offices. We believe these facilities are adequate
to meet our anticipated needs for the foreseeable future.




Item 3. Legal Proceedings

We may be a defendant at any time in various suits and are subject to
various claims that arise in the normal course of business. In the opinion of
management, the ultimate disposition of these proceedings will not harm our
consolidated financial position, liquidity or results of operations.




Item 4. Submission of Matters to a Vote of Security Holders

None.

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PART II




Item 5. Market for the Registrants Common Equity and Related Stockholder Matters

The section labeled Quarterly Financial Data
appearing in our 2002 Annual Report to Stockholders is
incorporated herein by reference.




Item 6. Selected Financial Data

The section labeled Selected Consolidated Financial
Data appearing in our 2002 Annual Report to Stockholders
is incorporated herein by reference.




Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations

The information appearing under the caption
Managements Discussion and Analysis of Financial
Condition and Results of Operations in our 2002 Annual
Report to Stockholders is incorporated herein by
reference.




Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk:

Our exposure to market risk for changes in interest
rates relates primarily to our investment portfolio. We
do not use derivative financial instruments in our
investment portfolio. We invest in high-credit quality
issuers with a short-term bond rating of A/A2 or better or
a long-term bond rating of A or better and, by policy,
limit the amount of credit exposure to any one issuer and
country. The portfolio includes only marketable
securities with active secondary or resale markets to
ensure portfolio liquidity. The portfolio is also
diversified by tenor to ensure that funds are readily
available as needed to meet our liquidity needs. This
policy minimizes the requirement to sell securities in
order to meet liquidity needs and therefore the potential
effect of changing market rates on the value of securities
sold.

The table below presents principal amounts and
related weighted average interest rates by year of
maturity for our investment portfolio.

|                                            |  |                         |        |      |  |      |       |      |  |      |   |  |  |  |   |  |  |  |   | 
|------------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ----- | ---- |  | ---- | - |  |  |  | - |  |  |  | - | 
|                                            |  | Expected Maturity Dates
|                                            |  | Years Ended March 31   
|                                            |  |                        
|                                            |  | 2003                    |        | 2004 |  | 2005 |       | 2006 |  | 2007
|                                            |  |                         |        |      |  |      |       |      |  |     
|                                            |  | (In Thousands)         
|Cash equivalents and
short-term investments |  | $                       | 71,234 |      |  | $    | 1,035 |      |  |      |  |  |  |  |  |  |  |  |  | 
|Weighted average
interest rate              |  |                         | 2.15   | %    |  |      | 4.03  | %    |  |      |  |  |  |  |  |  |  |  |  | 

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The primary objective of our short-term investment
activities is to preserve principal while at the same time
maximize yields, without significantly increasing risk.
Our short-term investments are for fixed interest rates;
therefore, changes in interest rates will not generate a
gain or loss on these investments unless they are sold
prior to maturity. Actual gains and losses due to the
sale of our investments prior to maturity have been
immaterial. Investments are generally not held for more
than one year. The average length of investments held at
the end of Fiscal 2002 was 66 days and had an average
yield of 2.2% per annum.

We are exposed to equity price risks on the
marketable portion of equity securities included in our
portfolio of investments purchased for the promotion of
business and strategic objectives. These investments are
generally in companies in the telecommunications industry
sector, many of which are small capitalization stocks. We
typically have not attempted to reduce or eliminate our
market exposure on these securities. A 20% adverse change
in equity prices would result in an approximate $0.1
million decrease in the fair value of our
available-for-sale securities as of March 31, 2002.

As of March 31, 2002, unrealized losses on
investments were $0.2 million. We consider this loss to be
temporary in nature and accordingly this unrealized loss
has been recorded in accumulated other comprehensive loss
and the investment has been recorded at fair value on our
balance sheet. During Fiscal 2002, we recorded a permanent
impairment for certain investments of $7.9 million.

Exchange Rate Risk:

We routinely use forward foreign exchange contracts to
hedge our net exposures, by currency, related to the
monetary assets and liabilities of our operations
denominated in non-functional currencies. In addition, we
enter into forward foreign exchange contracts to establish
with certainty the U.S. dollar amount of future firm
commitments denominated in a foreign currency. The primary
business objective of this hedging program is to minimize
the gains and losses resulting from exchange rate changes.
At March 31, 2002 and 2001, we held forward contracts in
the aggregate amount of $24.5 million and $47.7 million,
respectively, primarily in British pounds, New Zealand
dollars and the euro. The amount of unrealized loss on
these contracts at March 31, 2002 was insignificant.

Given our foreign exchange position, a change in
foreign exchange rates upon which these foreign exchange
contracts are based would result in exchange gains and
losses. In all material aspects, these exchange gains and
losses would be offset by exchange gains and losses on the
underlying net monetary exposures and firm commitments for
which the contracts are designated as hedges. We do not
expect material exchange rate gains and losses from
unhedged foreign currency exposures.

We do not enter into foreign currency transactions for
trading or speculative purposes. We attempt to limit our
exposure to credit risk by executing foreign exchange
contracts with high-quality financial institutions. A
discussion of our accounting policies for derivative
financial instruments is included in the notes to the
financial statements.

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We have a subsidiary in Argentina. Recently, the value of
the Argentine Peso has experienced a rapid decline due to
the economic crisis and financial instability within the
country. It is our belief that the situation in Argentina
is not likely to have a material impact on our financial
position.




Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and
supplementary data, and related notes and Report of
Independent Public Accountants appearing in our 2002
Annual Report to Stockholders are incorporated herein by
reference.




Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

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PART III




Item 10. Directors and Executive Officers of the Registrant

The section labeled Directors and Executive
Officers of our definitive Proxy Statement to be filed
hereafter for the annual meeting of stockholders to be
held on August 13, 2002 is incorporated herein by
reference.




Item 11. Executive Compensation

The section entitled Compensation of Directors And
Certain Executive Officers, of our definitive Proxy
Statement to be filed hereafter for the annual meeting of
stockholders to be held on August 13, 2002 is incorporated
herein by reference.




Item 12. Security Ownership of Certain Beneficial Owners and Management and Management related Stockholder Matters.

The section labeled Security Ownership of Certain
Beneficial Owners and Management of our definitive Proxy
Statement to be filed hereafter for the annual meeting of
stockholders to be held on August 13, 2002 is incorporated
herein by reference.

In response to the SECs Release No. 33-8048, the
following information is being provided:

Securities Authorized for issuance under Equity
Compensation Plans

|                                                           |  |                   |           |                   |  |                        |       |                      |  |  |           | 
|---------------------------------------------------------- |  | ----------------- | --------- | ----------------- |  | ---------------------- | ----- | -------------------- |  |  | --------- | 
|                                                           |  | (a)               |           | (b)               |  | (c)                   
|                                                           |  |                   |           |                   |  |                       
|                                                           |  | Number of         |           |                   |  |                        |       |                      |  | 
|                                                           |  | securities to be  |           |                   |  |                        |       | Number of securities
|                                                           |  | issued upon       |           | Weighted-average  |  | remaining available   
|                                                           |  | exercise of       |           | exercise price of |  | for future issuance   
|                                                           |  | outstanding       |           | outstanding       |  | under plans (excluding
|                                                           |  | options, warrants |           | options, warrants |  | securities listed in  
|Plan Category                                              |  | and rights        |           | and rights        |  | column (a))           
|                                                           |  |                   |           |                   |  |                       
|Equity compensation
plans approved by
security holders     |  |                   | 7,024,314 |                   |  | $                      | 13.21 |                      |  |  | 3,869,110 | 
|Equity compensation
plans not approved
by security holders |  |                   | 753,150   |                   |  | $                      | 9.32  |                      |  |  | 44,901    | 
|Total                                                      |  |                   | 7,777,464 |                   |  | $                      | 13.21 |                      |  |  | 3,914,011 | 

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Item 13. Certain Relationships and Related Transactions

The section labeled Certain
Relationships and Related
Transactions of our definitive
Proxy Statement to be filed
hereafter for the annual meeting of
stockholders to be held on August
13, 2002 is incorporated herein by
reference.

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##### Table of Contents






PART IV




Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K



|(a) |  | The following documents have been filed as a part of this Annual Report on Form 10-K.
|--- |  | -------------------------------------------------------------------------------------
|   
|1.  |  | Index to Financial Statements                                                        

The following consolidated financial statements are
contained in our 2002 Annual Report to Stockholders and
are incorporated herein by reference pursuant to Item 8:



|(i)   |  | Consolidated Balance Sheets as of March 31, 2002 and 2001.                                                     
|----- |  | ---------------------------------------------------------------------------------------------------------------
|     
|(ii)  |  | Consolidated Statements of Operations for each of the three years in the period ended March 31, 2002.          
|     
|(iii) |  | Consolidated Statements of Stockholders Equity for each of the three years in the period ended March 31, 2002.
|     
|(iv)  |  | Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2002.          
|     
|(v)   |  | Notes to Consolidated Financial Statements.                                                                    
|     
|(vi)  |  | Report of Independent Public Accountants.                                                                      
|     
|2.    |  | Statement Schedules                                                                                            

The following consolidated financial statement schedule
for each of the three years in the period ended March 31,
2002 is submitted herewith:

Schedule II: Valuation and Qualifying Accounts and
Reserves.

Consent of Arthur Andersen LLP, Independent Public
Accountants

Schedules not listed above have been omitted because they
are not applicable or required, or information required to
be set forth therein is included in the Consolidated
Financial Statements, including the Notes thereto,
incorporated herein by reference.



|3. |  | Exhibits
|-- |  | --------

The exhibits listed on the Exhibit Index beginning on Page
31 hereof.



|(b) |  | We filed two Form 8-Ks on March 1, 2002
|--- |  | ----------------------------------------
|   
|(c) |  | See Item 14(a)3 above.                  
|   
|(d) |  | See Item 14(a)2 above.                  

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of
the Securities Exchange Act of 1934, the Registrant has
duly caused this annual report on Form 10-K to be signed
on its behalf by the undersigned, thereunto duly
authorized.

|                    |                                                                     |                       
|------------------- | ------------------------------------------------------------------- | ----------------------
|Date: May 15, 2002. | DMC STRATEX NETWORKS, INC                                          
|                   
|                    | By:                                                                 | /s/ Charles D. Kissner
|                    |                                                                    
|                    | Charles D. KissnerChairman of the Board and
Chief Executive Officer




POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned officers and directors of DMC
Stratex Networks, Inc. do hereby constitute and appoint
Charles D. Kissner and Carl A. Thomsen, and each of them,
the lawful attorney and agent or attorneys and agents with
power and authority to do any and all acts and things and
to execute any and all instruments which said attorneys
and agents, or either of them, determine may be necessary
or advisable or required to enable DMC Stratex Networks,
Inc. to comply with the Securities and Exchange Act of
1934, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in
connection with this Form 10-K Report. Without limiting
the generality of the foregoing power and authority, the
powers include the power and authority to sign the names
of the undersigned officers and directors in the
capacities indicated below to this Form 10-K report or
amendment or supplements thereto, and each of the
undersigned hereby ratifies and confirms all that said
attorneys and agents or either of them, shall do or cause
to be done by virtue hereof. This Power of Attorney may
be signed in several counterparts.

IN WITNESS WHEREOF, each of the undersigned has
executed this Power of Attorney as of the date indicated
opposite his name.

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

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|                                                |  |                                                                                                         |  |             
|----------------------------------------------- |  | ------------------------------------------------------------------------------------------------------- |  | ------------
|Signatures                                      |  | Signing Capacity                                                                                        |  | Date        
|                                                |  |                                                                                                         |  |             
|                                               
|/s/  Charles D. Kissner

Charles D. Kissner     |  | Chairman of the Board and Chief
Executive Officer                                                       |  | May 15, 2002
|                                               
|/s/  Carl A. Thomsen

Carl A. Thomsen           |  | Senior Vice President, Chief
Financial Officer & Secretary
(Principal Financial and Accounting
Officer) |  | May 15, 2002
|                                               
|/s/  Richard C. Alberding

Richard C. Alberding |  | Director                                                                                                |  | May 15, 2002
|                                               
|/s/  Paul S. Bachow

Paul S. Bachow             |  | Director                                                                                                |  | May 15, 2002
|                                               
|/s/  John W. Combs

John W. Combs               |  | Director                                                                                                |  | May 15, 2002
|                                               
|/s/  James D. Meindl

James D. Meindl           |  | Director                                                                                                |  | May 15, 2002
|                                               
|/s/  V. Frank Mendicino

V. Frank Mendicino     |  | Director                                                                                                |  | May 15, 2002
|                                               
|/s/  William A. Hasler

William A. Hasler       |  | Director                                                                                                |  | May 15, 2002

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE

To DMC Stratex Networks, Inc.:

We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements
included in DMC Stratex Networks, Inc.s 2002 Annual
Report incorporated by reference in this Form 10-K, and
have issued our report thereon dated April 22, 2002. Our
audits were made for the purpose of forming an opinion on
the basic consolidated financial statements taken as a
whole. The schedule listed in item 14a(2) is the
responsibility of our management and is presented for
purposes of complying with the Securities and Exchange
Commissions rules and is not part of the basic
consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our
opinion, fairly states in all material respects the
consolidated financial data required to be set forth
therein in relation to the basic consolidated financial
statements taken as a whole.

|                       
|-----------------------
|/s/ ARTHUR ANDERSEN LLP

San Jose, California
April 22, 2002

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Schedule II

DMC Stratex Networks, Inc.
Valuation and Qualifying Accounts and Reserves(In thousands)

|                                                          |  |              |        |            |  |             |        |         |  |         |         |      |  |   |        | 
|--------------------------------------------------------- |  | ------------ | ------ | ---------- |  | ----------- | ------ | ------- |  | ------- | ------- | ---- |  | - | ------ | 
|                                                         
|                                                          |  | Balance at   |        | Charged to |  |             |        |         |  | Balance
|                                                          |  | Beginning of |        | Costs and  |  | Deductions/ |        | at End 
|Description                                               |  | Year         |        | Expenses   |  | Write-off   |        | of Year
|                                                         
|Year Ended March 31, 2002
Allowance for doubtful accounts |  | $            | 26,643 |            |  | $           | 6,530  |         |  | $       | (23,858 | )    |  | $ | 9,315  | 
|Year Ended March 31, 2001
Allowance for doubtful accounts |  | $            | 4,652  |            |  | $           | 23,608 |         |  | $       | (1,617  | )(A) |  | $ | 26,643 | 
|Year Ended March 31, 2000
Allowance for doubtful accounts |  | $            | 3,261  |            |  | $           | 853    |         |  | $       | 538     | (A)  |  | $ | 4,652  | 



---

|(A) |  | Net of transfers from other reserve accounts.
|--- |  | ---------------------------------------------

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EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                              
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                              
|Number  |  | Description                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                              
|2.1     |  | Certificate of Ownership and Merger merging DMC Stratex Networks,
Inc. into Digital Microwave Corporation (incorporated by reference to
Exhibit 2.1 to the companys Quarterly Report on Form 10-Q filed on
August 11, 2000).
|3.1     |  | Restated Certificate of Incorporation, amended as of August 9, 2000
(incorporated by reference to Exhibit 3.1 to the companys Quarterly
Report on Form 10-Q filed on August 11, 2000).                                      
|3.2     |  | Amended and Restated Bylaws, dated as of October 17, 2001
(incorporated by reference to Exhibit 3.2 to the companys Quarterly
Report on Form 10-Q filed on November 13, 2001).                                              
|4.1     |  | Form of Indenture (incorporated by reference to Exhibit 4.3 to the
companys registration statement filed on Form S-3 on November 28,
2000).                                                                                 
|4.2     |  | Form of Debt Warrant Agreement, including form of Debt Warrant
Certificate (incorporated by reference to Exhibit 4.4 to the
companys Registration Statement filed on Form S-3 on November 28,
2000).                        
|4.3     |  | Form of Common Stock Warrant Agreement, including form of Common
Stock Warrant Certificate (incorporated by reference to Exhibit 4.5
to the companys Registration Statement filed on Form S-3 on November
28, 2000).        
|4.4     |  | Form of Senior Debenture (incorporated by reference to Exhibit 4.6 to
the companys Registration Statement filed on Form S-3 on November
28, 2000).                                                                          
|10.1    |  | DMC Stratex Networks, Inc. 1984 Stock Option Plan, as amended and
restated on June 11, 1991 (incorporated by reference to Exhibit 10.1
to the companys Annual Report on Form 10-K for the year ended March
31, 1991).       
|10.2    |  | Form of Installment Incentive Stock Option Agreement (incorporated by
reference to Exhibit 28.2 to the companys Registration Statement on
Form S-8 (File No. 33-43155)).                                                    
|10.3    |  | Form of Installment Non-qualified Stock Option Agreement
(incorporated by reference to Exhibit 28.3 to the companys
Registration Statement on Form S-8 (File No. 33-43155)).                                                
|10.4    |  | Form of Indemnification Agreement between the company and its
directors and certain officers (incorporated by reference to Exhibit
10.16 to the companys Registration Statement on Form S-1 (File No.
33-13431)).           

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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                
|Number  |  | Description                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                
|10.5    |  | DMC Stratex Networks, Inc. 1994 Stock Incentive Plan, as amended
and restated (incorporated by reference to the companys Proxy
Statement for the Annual Meeting of Stockholders to be held on August
4, 1998).                                                                                                
|10.6    |  | DMC Stratex Networks, Inc. 1998 Non-Officer Employee Stock Option
Plan (incorporated by reference to Exhibit 99.1 to the companys
Registration Statement on Form S-8 (File No. 333-48535)).                                                                                                                   
|10.7    |  | Restated Employment Agreement, dated as of August 3, 1998, by and
between DMC Stratex Networks, Inc. and Charles D. Kissner
(incorporated by reference to Exhibit 10.2 to the companys Quarterly
Report on Form 10-Q for the quarter ended September 30,
1998).                                               
|10.8    |  | DMC Stratex Networks, Inc. 1999 Non-Officer Employee Restricted Stock
Purchase Plan (incorporated by reference to Exhibit 99.1 to the
companys Registration Statement on Form S-8 (File
No. 333-76233)).                                                                                                      
|10.9    |  | DMC Stratex Networks, Inc. 1999 Employee Stock Purchase Plan
(incorporated by reference to Exhibit 99.1 to the companys
Registration Statement on Form S-8 (File No. 333-80281)).                                                                                                                             
|10.10   |  | Form of Employment Agreement between the company Paul A. Kennard, Sam
Smookler and Carl A. Thomsen (incorporated by reference to Exhibit
10.33 to the companys Annual Report on Form 10-K for the year ended
March 31, 1999).                                                                                 
|10.11   |  | Form of Employment Agreement between John C. Brandt, Carol A. Goudey
and John P. ONeil (incorporated by reference to Exhibit 10.34 to the
companys Annual Report on Form 10-K for the year ended March 31,
1999).                                                                                            
|10.12   |  | Lease, dated February 16, 2000, by and between Corporate Technology
Centre Associates II LLC and DMC Stratex Networks, Inc., relating to
130 Rose Orchard Way, San Jose, California (incorporated by reference
to Exhibit 10.24 to the companys Annual Report on Form 10-K for the
year ended March 31, 2000).
|10.13   |  | Lease, dated February 16, 2000, by and between Corporate Technology
Centre Associates II LLC and DMC Stratex Networks, Inc., relating to
170 Rose Orchard Way, San Jose, California (incorporated by reference
to Exhibit 10.25 to the companys Annual Report on Form 10-K for the
year ended March 31, 2000).
|10.14   |  | Lease, dated February 16, 2000, by and between Corporate Technology
Centre Associates II LLC and DMC Stratex Networks, Inc., relating to
180 Rose Orchard Way, San Jose, California (incorporated by reference
to Exhibit 10.26 to the companys Annual Report on Form 10-K for the
year ended March 31, 2000).

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|        |  |                                                                                 
|------- |  | --------------------------------------------------------------------------------
|Exhibit |  |                                                                                 
|Number  |  | Description                                                                     
|        |  |                                                                                 
|13.1    |  | Portions of 2002 Annual Report to Stockholders incorporated herein by
reference.
|21.1    |  | List of subsidiaries.                                                           
|23.1    |  | Consent of Independent Public Accountants (in this Annual Report on
Form 10-K)  
|24.1    |  | Power of Attorney (in this Annual Report on Form 10-K)                          
|99.1    |  | Company Representation From Independent Accountant.                             

33