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

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12.

HERLEY INDUSTRIES, INC.
(Name of Registrant as Specified in its Charter)

--------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

----------------------------------------------------------------------
(5) Total fee paid:

----------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

----------------------------------------------------------------------
(3) Filing Party:

----------------------------------------------------------------------
(4) Date Filed:

----------------------------------------------------------------------

HERLEY INDUSTRIES, INC.
---------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

February 26, 2008
---------------

To our Stockholders:

An annual meeting of stockholders will be held at the Eden Resort Inn &
Suites, 222 Eden Road, Lancaster, Pennsylvania 17601-4216 on Tuesday, February
26, 2008, beginning at 9:00 a.m. At the meeting, you will be asked to vote on
the following matters:

1. Election of two directors in Class II to hold office until the 2010
Annual Meeting of Stockholders.

2. Proposal to amend Herley's by-laws to provide for resignation of
director nominee who receives more "withheld" votes than "for" votes
in uncontested elections.

3. Ratification of the appointment of Marcum & Kliegman LLP as our
independent registered public accountants for the year ending August
3, 2008.

4. Any other matters that properly come before the meeting.

The above matters are set forth in the proxy statement attached to this
notice to which your attention is directed.

If you are a stockholder of record at the close of business on January
7, 2008, you are entitled to vote at the meeting or at any adjournment or
postponement of the meeting. This notice and proxy statement are first being
mailed to stockholders on or about January 11, 2008.

By Order of the Board of Directors,

MYRON LEVY
Chairman and Chief Executive Officer

Dated: January 11, 2008
Lancaster, Pennsylvania

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PRE-ADDRESSED
POSTAGE-PAID ENVELOPE AS DESCRIBED ON THE ENCLOSED PROXY CARD. YOUR PROXY, GIVEN
THROUGH THE RETURN OF THE ENCLOSED PROXY CARD, MAY BE REVOKED PRIOR TO ITS
EXERCISE BY FILING WITH OUR CORPORATE SECRETARY PRIOR TO THE MEETING A WRITTEN
NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY
ATTENDING THE MEETING, FILING A WRITTEN NOTICE OF REVOCATION WITH THE SECRETARY
OF THE MEETING AND VOTING IN PERSON.

THIS PAGE LEFT INTENTIONALLY BLANK

HERLEY INDUSTRIES, INC.
101 North Pointe Boulevard
Lancaster, Pennsylvania 17601
---------------

PROXY STATEMENT
---------------

ANNUAL MEETING OF STOCKHOLDERS
Tuesday, February 26, 2008
---------------

Our Annual Meeting of Stockholders will be held on Tuesday, February 26,
2008, at Eden Resort Inn & Suites, 222 Eden Road, Lancaster, Pennsylvania
17601-4216 at 9:00 a.m. This proxy statement contains information about the
matters to be considered at the meeting or any adjournments or postponements of
the meeting.

ABOUT THE MEETING

What is being considered at the meeting?

You will be voting on the following:

o election of two Class II directors;
o by-law amendment to provide for resignation of director nominee who
receives more "withheld" votes than "for" votes in uncontested
director elections;
o ratification of the appointment of our independent registered public
accountants.

Who is entitled to vote at the meeting?

You may vote if you owned stock as of the close of business on January 7,
2008. Each share of stock is entitled to one vote.

How do I vote?

You can vote in two ways:

o by attending the meeting in person; or
o by completing, signing and returning the enclosed proxy card.

Can I change my mind after I vote?

Yes, you may change your mind at any time before the vote is taken at the
meeting. You can do this by (1) signing another proxy with a later date and
returning it to us prior to the meeting or filing with our corporate secretary a
written notice revoking your proxy, or (2) voting again at the meeting.

What if I return my proxy card but do not include voting instructions?

Proxies that are signed and returned but do not include voting instructions
will be voted FOR the election of the nominee directors, FOR the by-laws
amendment and FOR the appointment of our independent registered public
accountants.

What does it mean if I receive more than one proxy card?

It means that you have multiple accounts with brokers and/or our transfer
agent. Please vote all of these shares. We recommend that you contact your
broker and/or our transfer agent to consolidate as many accounts as possible
under the same name and address. Our transfer agent is American Stock Transfer &
Trust Company, (718) 921-8200.

Will my shares be voted if I do not provide my proxy?

If you hold your shares directly in your own name, they will not be voted
if you do not provide a proxy. Your shares may be voted under certain
circumstances if they are held in the name of a brokerage firm. Brokerage firms
generally have the authority to vote customers' unvoted shares on certain
"routine" matters, including the election of directors. When a brokerage firm
votes its customer's unvoted shares, these shares are counted for purposes of
establishing a quorum. At our meeting, these shares will be counted as voted by
the brokerage firm in the election of directors and appointment of our
independent registered public accountants, but will not be counted for all other
matters to be voted on because these other matters are not considered "routine"
under the applicable rules.

How many votes must be present to hold the meeting?

Your shares are counted as present at the meeting if you attend the meeting
and vote in person or if you properly return a proxy by mail. In order for us to
conduct our meeting, a majority of our outstanding shares of common stock as of
January 7, 2008 must be present at the meeting. This is referred to as a quorum.
On January 7, 2008, there were ____________ shares issued and outstanding and
entitled to vote.

What vote is required to approve each item?

Directors are elected by a plurality of the votes cast. Abstentions will
have no effect on the voting outcome with respect to the election of directors.
The affirmative vote of a majority of the issued and outstanding shares of
common stock present in person or by proxy and entitled to vote on the amendment
to our by-laws and appointment of our independent registered public accounting
firm will be required for approval. An abstention will be counted as a vote
against these proposals and broker non-votes will have no effect on the votes.

EXECUTIVE OFFICERS

Name Age Position
---- --- --------

Myron Levy 66 Chairman of the Board, Chief Executive Officer,
and Director
Jeffrey L. Markel 59 Chief Operating Officer
Kevin J. Purcell 49 Vice President and Chief Financial Officer

- --------------------

Mr. Myron Levy was appointed Chairman of the Board in June 2006 after
serving as Vice Chairman of the Board since August 2003, and has been our Chief
Executive Officer since August 2001. Prior thereto, Mr. Levy served as President
since June 1993, as Executive Vice President and Treasurer since May 1991, and
as Vice President for Business Operations and Treasurer since October 1988. For
more than ten years prior to joining the Company, Mr. Levy, a certified public
accountant, was employed in various executive capacities, including
Vice-President, by Griffon Corporation.

Jeffrey L. Markel was appointed Chief Operating Officer in June 2007. Prior
to joining Herley, Mr. Markel was employed at BAE Systems serving as President
of the Network Enabled Systems Line of Business since 1997. From 1994 to 1997 he
was Vice President of Program Management for GEC Marconi. His prior employment
was at Hazeltine Corporation, with his last position there being Vice President,
Communication Systems. Mr. Markel has over 38 years of experience in the defense
industry encompassing electronic systems, sub-systems, and components. His
educational background includes a Bachelor of Science in Mechanical Engineering
and a Bachelor of Arts in Applied Science from Lehigh University, as well as a
Masters in Business Administration from Long Island University.

Kevin J. Purcell was appointed Vice President and Chief Financial Officer
in June 2006. Prior to joining Herley, Mr. Purcell served as Vice President
Finance, Contracts and Compliance for Smiths Aerospace LLC, Customer Services
Americas. Previously, Mr. Purcell served other companies in senior financial
positions including Vice President and CFO, Controller and Director. In
addition, he worked for a number of years in the Government Contractor Advisory
Services group of KPMG. Mr. Purcell received his B.B.A. degree in financial
accounting from Iona College and his M.B.A. degree from Pepperdine University.
He is a Certified Public Accountant and a Certified Management Accountant.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table presents certain information regarding the beneficial
ownership of our common stock as of September 28, 2007 by (a) each beneficial
owner of 5% or more of our outstanding stock known to us, based solely on
filings with the Securities and Exchange Commission, (b) each of our directors,
(c) each of our Named Executive Officers and (d) all of our directors and
executive officers as a group.

The percentage of beneficial ownership for the table is based on 13,977,115
shares of our common stock outstanding as of September 28, 2007. To our
knowledge, except under community property laws or as otherwise noted, the
persons and entities named in the table have sole voting and sole investment

power over their shares of our common stock. Unless otherwise indicated, each
beneficial owner listed below maintains a mailing address of c/o Herley
Industries, Inc., 101 North Pointe Boulevard, Lancaster, PA 17601.

The number of shares beneficially owned by each stockholder is determined
under SEC rules and is not necessarily indicative of beneficial ownership for
any other purpose. Under these rules, beneficial ownership includes those shares
of common stock over which the stockholder has sole or shared voting or
investment power and those shares of common stock that the stockholder has the
right to acquire within 60 days after September 28, 2007 through the exercise of
any stock option. The "Percentage of Outstanding Shares" column treats as
outstanding all shares underlying such options held by the stockholder, but not
shares underlying options held by other stockholders.

Common Stock % of Outstanding
Name of Beneficial Owner Beneficially Owned (1) (2) Shares
- ------------------------ -------------------------- -----------------------

Myron Levy 1,531,615 10.2%
John M. Kelley (10) 74,923 *
Jeffrey L. Markel (3) 50,000 *
Kevin J. Purcell (4) 5,000 *
Carlos C. Campbell 35,000 *
John A. Thonet (5) 108,649 *
Adm. Edward K. Walker, Jr. (Ret.) 73,500 *
Dr. Edward A. Bogucz 37,575 *
Adm. Robert M. Moore (Ret.) 37,500 *
Third Avenue Management, Inc. (6) 2,743,511 19.6%
GAMCO Investors (7) 1,477,147 10.6%
Dimensional Fund Advisors, Inc. (8) 1,177,249 8.4%
Lee N. Blatt (9) 1,544,399 10.1%
Directors and executive
officers as a group
(9 persons) 1,953,792 12.7%
- -------
<FN>
* Indicates ownership of less than one percent.

(1) No officer or director owns more than one percent of the outstanding shares
of common stock unless otherwise indicated. Ownership represents sole
voting and investment power.

(2) Includes beneficial ownership of the following number of shares that may be
acquired within 60 days of September 28, 2007 pursuant to stock options
awarded under our stock option plans:

Myron Levy 1,075,000 John A. Thonet 87,500
John M. Kelley 87,000 Adm. Edward K. Walker, Jr. 72,000
Jeffrey L. Markel 50,000 Dr. Edward A. Bogucz 37,500
Kevin J. Purcell 5,000 Adm. Robert M. Moore 37,500
Carlos C. Campbell 35,000 Directors and executive
officers as a group 1,457,000

(3) Mr. Markel was appointed Chief Operating Officer in June 2007.
(4) Mr. Purcell was appointed Vice President and Chief Financial Officer in
June 2006.
(5) Does not include 155,998 shares, owned by Mr. Thonet's children, Hannah and
Rebecca Thonet, and 30,669 shares owned by his wife, Kathi Thonet. Mr.
Thonet disclaims beneficial ownership of these shares.
(6) Address is 622 Third Avenue, New York, NY 10017.
(7) Address is One Corporate Center, Rye, NY 10580.
(8) Address is 1299 Ocean Avenue, Santa Monica, CA 90401.

(9) Includes beneficial ownership of 1,301,000 shares that may be acquired
within 60 days of September 28, 2007 pursuant to stock options. Mr. Blatt
entered into a voting trust agreement wherein sole voting power to
1,301,000 shares under stock options held by him and 21,099 shares held in
his IRA was granted to the Company's Chairman, Myron Levy. Mr. Blatt's
address is 471 N. Arrowhead Trail, Vero Beach, FL 32963.
(10) On December 4, 2007, the Board accepted Mr. Kelley's resignation, which was
tendered for personal reasons.
</FN>

PROPOSAL ONE

ELECTION OF DIRECTORS

Our certificate of incorporation and by-laws provide for a Board of
Directors consisting of not less than three nor more than twelve directors. Our
Board of Directors now consists of six directors. At each annual meeting of
stockholders, directors constituting a class are elected for staggered three
year terms.

The board has nominated Myron Levy and Dr. Edward A. Bogucz for election as
Class II directors to serve until the 2010 annual meeting of stockholders or
until his successor is duly elected and qualified. Shares represented by
executed proxies in the form enclosed will be voted, unless otherwise indicated,
for the election as directors of the nominees named in Class II unless any such
nominee shall be unavailable, in which event such shares will be voted for a
substitute nominee designated by the Board of Directors. The Board of Directors
has no reason to believe that either of the nominees will be unavailable or, if
elected, will decline to serve.

The following table sets forth our directors and the classes in which they
will be presently serving.

Class I Class II Class III
------- -------- ---------
(To serve until the 2009 Annual (To serve until the 2010 Annual (To serve until the 2008 Annual
Meeting of Stockholders) Meeting of Stockholders) Meeting of Stockholders)
- ----------------------------------- ------------------------------- ------------------------------

Rear Adm. Robert M. Moore (Ret.)(1)(2) Myron Levy John A. Thonet
Rear Adm. Edward K. Walker, Jr. (Ret.) Dr. Edward A. Bogucz (1)(3) Carlos C. Campbell (2)(3)
(1)(2)(3)
- -----------
<FN>
(1) Member of the Compensation and Audit Committee
(2) Member of Governance and Ethics Committee
(3) Member of Nominating Committee
</FN>

The business experience of our directors and nominees for director is set
forth below.

Rear Admiral Edward K. Walker, Jr. (Ret.) was appointed Vice Chairman of
the Board in June 2006. Rear Admiral Walker served as the Director of Corporate
Strategy for Resource Consultants, Inc., a privately held corporation supporting
the Department of Defense and other government agencies, after his retirement
from the United States Navy in 1988 until 2000. Prior to his retirement from the
United States Navy, Rear Admiral Walker served for 34 years in various naval
officer positions, including Commander of the Naval Supply Systems Command, and
Chief of Supply Corps. He holds a Bachelor's Degree from the United States Naval
Academy and Master's Degree in Business Administration from The George
Washington University.

Dr. Edward A. Bogucz is currently Executive Director of the New York Center
of Excellence in Environmental Systems, a university-industry consortium that
includes 12 universities and research institutions. Previously, Dr. Bogucz
served as Dean of Engineering and Computer Science at Syracuse University from
1995 through 2003. Dean Bogucz earned his bachelor's and doctoral degrees in
mechanical engineering from Lehigh University and a Master's Degree from
Imperial College, University of London. His teaching and research expertise
includes fluid dynamics, energy systems, computational methods, and
multidisciplinary analysis and design. As Dean, he led the strengthening of the
College of Engineering and Computer Science in selected areas, including RF and
microwave devices, information fusion, systems assurance, and environmental
technologies.

Rear Admiral Robert M. Moore (Ret.) is a consultant in business and
financial management. He is a retired Rear Admiral, U.S. Navy. His 35-year
career in the Navy culminated in his last assignment in charge of the Navy's
worldwide supply system. He holds a Bachelor's Degree from the University of
Texas and a Master's Degree in Business Administration from Harvard University.

Mr. John A. Thonet has been Secretary since January 2003, and is President
of Thonet Associates, an environmental consulting firm specializing in land
planning and zoning matters, for the past ten years.

Mr. Carlos C. Campbell operates a consulting business in Reston, Virginia
and serves on the Board of Directors for Resource America, Inc. and Pico
Holdings, Inc., both publicly traded companies. He is a veteran of nine years as
a Naval Flight Officer and served in the Administration of President Reagan as
the Assistant Secretary for Economic Development, U.S. Department of Commerce.

DIRECTOR INDEPENDENCE

We have adopted the NASDAQ Stock Market's standards for determining the
independence of directors. Under these standards, an independent director means
a person other than an executive officer or one of our employees or any other
individual having a relationship which, in the opinion of the Board of
Directors, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. In addition, the following persons shall
not be considered independent:

o a director who is, or at any time during the past three years was,
employed by us;
o a director who accepted or who has a family member who accepted any
compensation from us in excess of $100,000 during any period of twelve
consecutive months within the three years preceding the determination
of independence, other than the following:
o compensation for service on the Board of Directors or any
committee thereof;

o compensation paid to a family member who is one of our employees
(other than an executive officer); or
o under a tax-qualified retirement plan, or non-discretionary
compensation;
o a director who is a family member of an individual who is, or at any
time during the past three years was, employed by us as an executive
officer;
o a director who is, or has a family member who is, a partner in, or a
controlling shareholder or an executive officer of, any organization
to which we made, or from which we received, payments for property or
services in the current or any of the past three fiscal years that
exceed 5% of the recipient's consolidated gross revenues for that
year, or $200,000, whichever is more, other than the following:
o payments arising solely from investments in our securities; or
o payments under non-discretionary charitable contribution matching
programs;
o a director who is, or has a family member who is, employed as an
executive officer of another entity where at any time during the past
three years any of our executive officers served on the compensation
committee of such other entity; or
o a director who is, or has a family member who is, a current partner of
our outside auditor, or was a partner or employee of our outside
auditor who worked on our audit at any time during any of the past
three years.

For purposes of the NASDAQ independence standards, the term "family member"
means a person's spouse, parents, children and siblings, whether by blood,
marriage or adoption, or anyone residing in such person's home.

The Board of Directors has assessed the independence of each non-employee
director under the independence standards of the NASDAQ Stock Market set forth
above, and has affirmatively determined that four of our non-employee directors
(Mr. Campbell, Admirals Walker and Moore and Dr. Bogucz) are independent.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During the fiscal year ended July 29, 2007 there were:

o thirteen meetings of the Board of Directors
o five meetings of the Audit Committee
o three meetings of the Compensation Committee
o five meetings of the Governance and Ethics Committee
o one meeting of the Nominating Committee

Audit Committee and Audit Committee Financial Expert

The Board has a standing Audit Committee. The Board has affirmatively
determined that each director who serves on the Audit Committee is independent,
as the term is defined by applicable Nasdaq and Securities and Exchange
Commission ("SEC") rules. During fiscal 2007, the Audit Committee of the Board
of Directors of the Company consisted of Edward K. Walker (Chairman), Robert M.
Moore, and Edward A. Bogucz. The members of the audit committee have substantial
experience in assessing the performance of companies, gained as members of the
Company's board of directors and audit committee, as well as by serving in
various capacities in other companies or governmental agencies. As a result,
they each have an understanding of financial statements. However, none of them
keep current on all aspects of generally accepted accounting principles.

Accordingly, the board of directors does not consider any of them to be a
financial expert as that term is defined in applicable regulations.
Nevertheless, the board of directors believes that they competently perform the
functions required of them as members of the audit committee and, given their
backgrounds, it would not be in the best interest of the Company to replace any
of them with another person to qualify a member of the audit committee as a
financial expert.

The Audit Committee regularly meets with our independent registered public
accounting firm outside the presence of management.

The Audit Committee operates under a written charter which is set forth as
Exhibit A to this proxy statement.

Compensation Committee

Our Compensation Committee annually establishes, subject to the approval of
the Board of Directors and any applicable employment agreements, the salaries
which will be paid to our executive officers during the coming year, and
administers our stock-based benefit plans. The Compensation Committee currently
consists of Edward A. Bogucz, Chairman, Edward K. Walker and Robert M. Moore.
Each member of the Compensation Committee is a director who is not employed by
us or any of our affiliates, and are independent directors under NASDAQ listing
standards.

Nominating Committee

Our Nominating Committee currently consisting of Carlos C. Campbell,
Chairman, Edward K. Walker, and Edward A. Bogucz, each of whom is an independent
director, identifies individuals qualified to become Board members, recommends
to the Board nominees to fill vacancies in membership of the Board as they occur
and, prior to each Annual Meeting of Shareholders, recommends a slate of
nominees for election as Directors at such meeting.

Governance and Ethics Committee

Our Governance and Ethics Committee, currently consisting of Robert M.
Moore, Chairman, Edward K. Walker and Carlos C. Campbell, each of whom is an
independent director, monitors developments in corporate governance principles
and other corporate governance matters and makes recommendations to the Board of
Directors regarding the adoption of additional corporate governance principles.

Stockholder Recommendations for Board Nominees

The Governance and Nominating Committee will consider stockholder
recommendations for candidates for the Board. The name of any recommended
candidate for director, together with a brief biographical sketch, a document
indicating the candidate's willingness to serve, if elected, and evidence of the
nominating stockholder's ownership of Company stock, should be sent to the
attention of the Secretary of the Company.

Stockholder Communications with the Board

We have not developed to date a formal process by which stockholders may
communicate directly with directors. However, in recent years an informal
process has developed in which communications sent to the Board of Directors or
in care of an officer or our other representative is forwarded to the Chief
Executive Officer, who is also a director. We believe this process has
adequately served the needs of the Board of Directors and our stockholders. In
light of SEC disclosure rules on this matter, the Board of Directors may
consider the development and adoption of more formal procedures. Until such
procedures are adopted and disclosed to our stockholders, stockholders may
direct communications intended for the Board of Directors to the Secretary of
the Company, at 101 North Pointe Boulevard, Lancaster, Pennsylvania 17601. The
envelope containing such communication must contain a clear notation indicating
that the enclosed letter is a "Stockholder-Board Communication" or
"Stockholder-Director Communication" or similar statement that clearly and
unmistakably indicates the communication is intended for the Board of Directors.
All such communications must clearly indicate the author as a stockholder and
state whether the intended recipients are all members of the Board of Directors
or just certain specified directors. The Secretary will make copies of all such
communications and circulate them to the appropriate director or directors.

DIRECTOR COMPENSATION

Directors who are also employees of the Company are not separately
compensated for their services as directors.

Cash Compensation to Board Members

Directors who are not our employees receive an annual fee of $15,000 and a
fee of $1,500 for each interim board of directors meeting attended. The
Corporate Governance Committee Chairman receives an annual fee of $15,000, and
other members of the Corporate Governance Committee receive $5,000 annually. The
Audit Committee Chairman receives an annual fee of $25,000, and other members of
the Audit Committee receive $10,000 annually. The Compensation Committee
Chairman receives an annual fee of $7,500, and other members of the Compensation
Committee receive $5,000 annually. The Nominating Committee Chairman receives an
annual fee of $7,500, and other members of the Nominating Committee receive
$5,000 annually.

Equity Compensation to Board Members

The Company grants options to purchase shares of the Company's Common Stock
to its outside directors on a periodic basis. During fiscal 2007, the Company
granted options to purchase 60,000 shares of common stock at a price of $17.82
per share to its outside directors as follows:

Rear Admiral Edward K. Walker, Jr. (Ret.) 15,000
Dr. Edward A. Bogucz 12,500
Rear Admiral Robert M. Moore (Ret.) 12,500
John A. Thonet 10,000
Carlos C. Campbell 10,000

These shares fully vested on the grant date.

Other

Board members are reimbursed for reasonable expenses in attending meetings
of the Board of Directors and for expenses incurred in connection with their
complying with our corporate governance policies. The Company also provides
directors' and officers' liability insurance and indemnity agreements for our
directors. No other compensation is provided to our directors.

DIRECTOR COMPENSATION TABLE

The following table provides information with respect to all compensation
awarded to, earned by or paid to each person who served as a director (except
for Mr. Levy, our Chief Executive Officer, who receives no additional
compensation for his service on our Board) for all of fiscal 2007. Other than as
set forth in the table and the narrative that follows it, to date we have not
paid any fees to or reimbursed any expenses of our directors, except for
expenses incurred in connection with attendance at board meetings which in the
aggregate are less than $10,000 each, made any equity or non-equity awards to
directors, or paid any other compensation to directors.

Fees
Earned
or Paid in Option Awards
Name Cash ($) ($)(1)(2) Total ($)
----- -------- --------- ---------

Rear Admiral Edward K. Walker, Jr. (Ret.) $57,500 $56,687 $114,187
Dr. Edward A. Bogucz $45,000 $47,239 $92,239
Rear Admiral Robert M. Moore (Ret.) $55,000 $47,239 $102,239
John A. Thonet $22,500 $37,791 $60,291
Carlos C. Campbell $35,000 $37,791 $72,791
<FN>
- -----------
(1) These amounts reflect the dollar amount of expense recognized for financial
statement reporting purposes for fiscal 2007 in accordance with SFAS 123(R).
Assumptions used in the calculation of this amount for purposes of our financial
statements are included in Note A-15 of the Notes to Consolidated Financial
Statements included in the Company's 2007 Annual Report on Form 10-K/A Amendment
No. 1.

(2) The aggregate number of options outstanding to purchase shares of our common
stock as of July 29, 2007, as set forth following their respective names, is as
follows: Mr. Walker 72,000 shares, Dr. Bogucz 37,500 shares, Mr. Moore 37,500
shares, Mr. Thonet 87,500 shares and Mr. Campbell 35,000 shares.
</FN>

Compensation Committee Interlocks and Insider Participation

In fiscal 2007, our Compensation Committee consisted of Dr. Edward A.
Bogucz, and Messrs. Edward K. Walker, Jr., and Robert M. Moore. None of these
persons were our officers or employees during fiscal 2007 nor had any
relationship requiring disclosures in this proxy statement.

Certain Relationships and Related Transactions

Effective October 12, 2006 and as a condition to entering into the
Administrative Agreement with the Department of the Navy (see Note A.1 of the
Notes to Consolidated Financial Statements included in the Company's 2007 Annual
Report on Form 10-K/A Amendment No. 1), the Company entered into an agreement
(the "Agreement") with Lee N. Blatt to terminate the Employment Agreement
between the Company and him dated as of July 29, 2002 and modified on December
9, 2003. Under the terms of the Agreement he will receive a lump sum payment of
$9,461,528 payable $3,000,000 upon the effective date of the Agreement and
sixty-four (64) consecutive monthly payments of $100,000 commencing on January
1, 2007 and a final payment of $61,528 on May 1, 2012 as evidenced by a
Promissory Note dated effective October 12, 2006. In addition he received his
bonus of $636,503 for fiscal year 2006, and shall be entitled to receive medical
care reimbursement and insurance, including life insurance, in accordance with
the original terms of his Employment Agreement. The Agreement also provides that
all outstanding stock options previously issued to him which are all vested and
fully exercisable shall continue to be exercisable by him or, following his
death, by his designated beneficiaries, on or before the expiration date of the
specific option. In the event of a "change of control" of the Company as defined
in the Employment Agreement all remaining payments due under the Promissory Note
become immediately due and payable.

Prior to the acquisition of MSI, MSI had leased one of its two buildings in
Fort Walton Beach, Florida from MSI Investments, a Florida General Partnership.
MSI Investments is owned by four individuals, two of whom are currently
employees of MSI and one who serves as a consultant.

In connection with the move of the Amityville facilities of GMC in fiscal
1999, the Company entered into a 10 year lease agreement with a partnership
partially owned by the children of an officer of the Company. The lease provides
for initial minimum annual rent of $312,000 subject to escalation of
approximately 4% annually throughout the 10 year term. Additionally, in March
2000, the Company entered into another 10 year lease with the same partnership
for additional space. The initial minimum annual rent of $92,000 is subject to
escalation of approximately 4% annually. On August 24, 2005, the Company amended
the agreement to incorporate the two individual leases into a single lease and
extended the term of the lease to August 31, 2010.

Indemnification Agreements

We have entered into separate indemnification agreements with our officers
and directors. We have agreed to provide indemnification with regard to certain
legal proceedings so long as the indemnified officer or director has acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, our best interests and with respect to any criminal proceeding, had
no reasonable cause to believe his or her conduct was unlawful. We only provide
indemnification for expenses, judgments, fines and amounts paid in settlement
actually incurred by the relevant officer or director, or on his or her behalf,
arising out of proceedings brought against such officer or director by reason of
his or her corporate status.

COMPENSATION DISCUSSION AND ANALYSIS

This section discusses the principles underlying our executive compensation
policies and decisions and the most important factors relevant to an analysis of
these policies and decisions. It provides qualitative information regarding the
manner and context in which compensation is awarded to and earned by our Named
Executive Officers ("NEOs") (as defined in the Summary Compensation Table below)
and places in perspective the data presented in the tables and narrative that
follow.

Compensation Philosophy and Overview

We believe that the most effective compensation program is one that is
designed to reward the achievement of our financial and strategic goals, and
which aligns executives' interests with those of our stockholders.

The compensation plans for our executive officers have three principal
elements: a base salary, discretionary cash incentive bonuses linked to
achievement of financial and strategic goals and equity-based incentive
compensation. In addition, we provide our executive officers a variety of
benefits that in most cases are available generally to all of our salaried
employees. We view the components of compensation as related but distinct.
Although the Compensation Committee of our Board of Directors (the "Committee")
reviews the total compensation of our executive officers, we do not believe that
significant compensation derived from one component of compensation should
necessarily negate or reduce compensation from other components. We do believe
that the executive compensation package should be fair and reasonable when taken
as a whole.

We have not adopted any formal policies or guidelines for allocating
compensation between long-term and currently paid out compensation or between
cash and non-cash compensation. However, our philosophy is to keep cash
compensation at a competitive level while providing the opportunity to be
significantly rewarded through equity if our company and our stock price perform
well over time.

We also believe that executive officers should have a greater percentage of
their equity compensation in the form of stock options rather than restricted
stock or restricted stock unit awards, as stock options have greater risk
associated with them than these other equity grants. We believe that our
executive officers should have a larger portion of their equity incentive awards
at risk as compared with our other employees.

Role of Executive Officers in Compensation Decisions

Mr. Myron Levy, our Chief Executive Officer, annually reviews the
performance of each of our other executive officers. The conclusions reached by
Mr. Levy and his recommendations based on these reviews, including with respect
to salary adjustments, incentive awards and equity award amounts, are presented
by Mr. Levy to the Committee. The Committee can exercise its discretion in
modifying any recommended adjustments or awards to executives. The Committee
makes all final compensation decisions for each of our executive officers.

Committee meetings typically have included, for all or a portion of each
meeting, not only the Committee members but also our Chief Executive Officer.

Role of the Compensation Committee

The Compensation Committee currently consists of Edward A. Bogucz,
Chairman, Edward K. Walker and Robert M. Moore. Each member of the Compensation
Committee is a director who is not employed by us or any of our affiliates, and
are independent directors under NASDAQ listing standards.

The Committee ensures that our executive compensation and benefits program
is consistent with our compensation philosophy and our corporate governance
guidelines and is empowered to make decisions regarding executive officers total
compensation, and subject to the approval of the Board, our Chief Executive
Officer's total compensation.

The Committee reviews our overall compensation strategy at least annually
to ensure that it promotes stockholder interests, supports our strategic and
tactical objectives and provides for appropriate rewards and incentives for our
executive officers. The Committee's most recent overall compensation review
occurred in October 2007.

Accounting and Tax Implications of Our Compensation Policies

In designing our compensation programs, the Committee considers the
financial accounting and tax consequences to the Company as well as the tax
consequences to our employees. We account for equity compensation paid to our
employees under SFAS 123(R), which requires us to estimate and record an expense
over the service period of the award. The SFAS 123(R) cost of our equity awards
is considered by management as part of our equity grant recommendations to the
Committee. Our equity grant practices have been impacted by SFAS 123(R), which
we adopted in the first quarter of our 2006 fiscal year.

Section 162(m) of the Internal Revenue Code places a limit of $1 million on
the amount of compensation that we may deduct for income tax purposes in any one
year with respect to our five most highly compensated executive officers. The $1
million limit does not apply to compensation that is considered "performance
based" under applicable tax rules. Our executive stock options are intended to
qualify as "performance-based," so that compensation attributable to those
options is fully tax deductible.

We also consider the tax impact to employees in designing our compensation
programs, particularly our equity compensation programs. For example, employees
generally control the timing of taxation with respect to the exercise of stock
options.

Components of our Executive Compensation Program

Base Salary

We establish base salaries that are sufficient, in the Committee's
judgment, to retain and motivate our NEOs while taking into account the unique
circumstances of our Company. In determining appropriate salaries, the Committee
considers each NEO's scope of responsibility and accountability within our
Company and reviews the NEO's compensation, individually and relative to other
officers, as well as similarly situated companies. We have entered into
employment agreements with our NEOs which provide for adjustments as set forth
more fully below in the section titled "Employment Agreements." In fiscal 2007,
there were no increases in any NEO's salary beyond what is called for in the
individual employment agreements, such as cost-of-living increases.

Discretionary Cash Incentive Bonuses

The Committee believes that discretionary cash bonus compensation for NEOs
should be directly linked to our overall corporate financial performance,
individual performance and our success in achieving both our short-term and
long-term strategic goals. In assessing the performance of our Company and our
NEOs during fiscal 2007, the Committee considered our performance in the
following areas:

o Increase levels of component integration and value added content;
o Enhancement of our manufacturing capabilities;
o Pursuit of selective commercial opportunities;
o Maintaining leadership in microwave technology;
o Strengthening and expanding customer relationships; and
o Maintaining our reputation for integrity.

In fiscal 2007, the Committee awarded Mr. Levy an incentive cash bonus of
$369,000 based on his employment agreement and on a number of factors, including
his strong performance as Chairman of the Board and CEO, his assumption of
responsibilities of our former Chairman and the comparison of his salary to our
other NEOs, as well as our peer group. Mr. Kelley received a discretionary cash
bonus of $50,000 and Mr. Purcell received $10,000. Mr. Markel did not receive a
discretionary bonus in fiscal 2007 as his employment with us did not begin until
June 2007. The bonuses awarded by the Committee for fiscal 2007 are detailed in
the Summary Compensation Table on page 18.

Our bonuses are structured to be deductible under Section 162(m) of the
Internal Revenue Code which denies publicly-held corporations a federal income
tax deduction for compensation in excess of $1 million paid to the CEO and the
four other most highly compensated officers during a fiscal year unless the
compensation is "performance-based." We believe that our process of awarding
cash bonuses satisfies this requirement; however, there can be no assurance that
any amounts paid as discretionary cash bonuses will be deductible.

In view of the scope of the employment agreements we have with our NEOs, we
do not expect changes in the manner in which discretionary cash bonuses are
awarded to our NEOs.

Equity-Based Long Term Incentive Compensation

We believe that our equity incentive compensation arrangements are an
important factor in developing an overall compensation program that is
competitive with our peer group of companies and that aligns the interests of
our NEOs with those of our stockholders.

We believe that stock options effectively align the long-term interests of
management with our stockholders. Additionally, we believe that our NEO's should
have a greater percentage of their equity awards at risk as compared with our
other employees. Since NEOs do not benefit from stock options unless the price
of our stock increases after the grant date as compared with the grant price,
they clearly provide NEOs with an added incentive to build shareholder value. We
have not in the past, repriced the exercise price for stock options that have
been granted when the future stock price has decreased below the exercise price
of such stock options. The date of our awards of stock options is established by
the Committee at a meeting held approximately four to six weeks prior to the
date of grant. Stock options granted in fiscal 2007 to our NEOs are set forth in

the table on page 18. Grants of stock options vest over a period of years in
order to serve as an inducement for the NEOs to remain in the employ of our
Company. It is contemplated that we will continue to offer stock options as the
principal component of our equity compensation arrangement for our NEOs.

The number of shares of stock options awarded to our NEOs is established by
the Committee in consultation with our CEO, taking into account a number of
factors, including the position, job performance and overall responsibility of
each NEO. Since the value of the stock options granted to our NEOs is based upon
the price of our shares, the Committee believes that the granting of stock
options is a significant incentive to our NEOs to continue to build shareholder
value. The Committee also believes that the multi-year vesting periods for the
stock options will be helpful in linking equity compensation to long-term
performance.

Executive Benefits and Perquisites

All of our executives are eligible to participate in our employee benefit
plans, including medical, dental, life insurance and 401(k) plans. These plans
are available to all salaried employees and do not discriminate in favor of
executive officers. It is generally our policy not to extend significant
perquisites to our executives that are not available to our employees generally.
We have no current plans to make changes to levels of benefits and perquisites
provided to executives.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee has reviewed and discussed with management the
disclosures set forth above under the heading "Compensation Discussion and
Analysis" and, based on such review and discussions, the Compensation Committee
recommended to the Board that such disclosure be included in our Proxy Statement
and in the Annual Report on Form 10-K for the fiscal year ended July 29, 2007.

The Compensation Committee: Edward A. Bogucz (Chairman)
Edward K. Walker
Robert M. Moore

Executive Compensation Tables

Summary Compensation Table

The following table sets forth the annual and long-term compensation with
respect to our Chairman, Chief Executive Officer ("Principal Executive
Officer"), our Chief Financial Officer ("Principal Financial Officer") and our
other most highly compensated executive officers other than the Chief Executive
Officer who were serving as executive officers at the end of the last completed
fiscal year as required under SEC rules (collectively, the "Named Executive
Officers") for services rendered for the fiscal year ended July 29, 2007.

Non-Equity
Name and Principal Option Incentive Plan All Other
Position Year Salary Bonus (2) Awards (3) Compensation Compensation (5) Total
-------- ---- ------ --------- ---------- ------------ ---------------- -----

Myron Levy, 2007 $ 713,126 (1) - - $ 369,069 (4) $ 18,677 $1,100,872
Chairman of the
Board and Chief
Executive Officer

John M. Kelley, 2007 $ 250,000 $ 50,000 $ 7,356 - $ 12,031 $ 319,387
President

Jeffrey L. Markel, 2007 $ 47,116 - $ 299,346 - - $ 346,462
Chief Operating
Officer (6)

Kevin J. Purcell, 2007 $ 220,000 $ 10,000 $ 75,871 - $ 14,660 $ 320,531
Chief Financial
Officer
- --------
<FN>
(1) Includes a cost of living adjustment of $27,371 for Mr. Levy under his
employment contract.
(2) Executive bonuses are paid at the discretion of the board of directors.
(3) Amounts represent the aggregate expense recognized for financial statement
reporting purposes with respect to fiscal 2007 in accordance with SFAS
123(R) for stock options granted to the Named Executive Officers in the
current fiscal year or in prior fiscal years (disregarding estimates of
forfeitures for service-based vesting). SFAS 123(R) expense for the stock
options is based on the fair value of the options on the date of grant
using the Black-Scholes option-valuation model. The assumptions used in
determining the fair value of the options are set forth in Note A-13 of
Notes To Consolidated Financial Statements contained in the Company's
Annual Report on Form 10-K/A Amendment No. 1 for the year ended July 29,
2007.
(4) Represents incentive compensation under Mr. Levy's employment agreement.
(5) The following table describes each component of the "All Other
Compensation" column in the "Summary Compensation Table" above.

Other
Personal
Matching Including
Contribution Medical Personal
to Employee Supplemental Insurance Use of
Savings Plan Life Insurance Benefits Auto Total
------------ ------------- -------- -------- -----
Myron Levy $ 8,800 $ 4,572 $ 1,552 $ 1,260 $ 18,677
John M. Kelley 8,800 828 - 2,403 12,031
Kevin J. Purcell 8,800 225 - 5,635 14,660

(6) Mr. Markel was appointed Chief Operating Officer on June 4, 2007 at an
annual rate of compensation of $350,000.
</FN>

Grants of Plan-Based Awards in Fiscal 2007

The following table sets forth certain information concerning stock options
granted to the Named Executive Officers during fiscal 2007.

All Other
Option
Awards: Exercise
Number of or Base
Securities Price of
Underlying Option Grant Date
Options (#) Awards Fair Value of
Name Grant Date (1) ($/Sh) Option Awards (2)
---- ---------- ----------- --------- ----------------

John M. Kelley 6/8/2007 17,500 $ 17.82 $ 128,590
Jeffrey L. Markel 5/9/2007 250,000 $ 15.77 $ 1,426,275
<FN>
- --------
(1) Options issued in fiscal 2007 were at 100% of the closing price of our
common stock on the date of issue and vest as follows: Mr. Kelley- one
fifth of the options vest one year from date of grant and one fifth each
year thereafter; Mr. Markel - one fifth on June 1, 2007 and one fifth each
year thereafter.
(2) The amounts under the column labeled "Grant Date Fair Value of Option
Awards" is the fair value of the stock options under SFAS 123 (R) granted
to the named executives in 2007, which is the amount that the Company will
expense in its financial statements over the option's vesting schedule.
These amounts reflect the Company's accounting expense and may not
correspond to the actual value that will be recognized by the named
executives.
</FN>

Outstanding Equity Awards at Fiscal 2007 Year End

The following table provides information with respect to each unexercised
stock option held by the Named Executive Officers as of July 29, 2007.

Option Awards
--------------
Number of Number of
securities securities
underlying underlying
unexercised unexercised Option
options (#) options Exercise Option
Name Exercisable (#) Unexercisable Price ($) Expiration Date
---- ----------- ----------------- --------- ---------------

Myron Levy 225,000 - $ 10.45 5/18/2010
150,000 - $ 8.38 3/12/2011
250,000 - $ 13.10 12/3/2011
250,000 - $ 19.52 5/21/2012
200,000 - $ 17.98 5/2/2015
John M. Kelley 7,500 - $ 7.25 11/30/2008
17,500 - $ 19.52 8/21/2007
10,000 - $ 19.83 12/23/2009
40,000 - $ 17.98 5/2/2010
- 17,500 $ 17.82 9/8/2012
Jeffrey L. Markel 50,000 200,000 $ 15.77 5/9/2017
Kevin J. Purcell 5,000 20,000 $ 19.38 9/2/2011

Option Exercises in Fiscal 2007

The following table sets forth stock options exercised during fiscal 2007
by the Named Executive Officer.

Number of
Shares Value
Acquired Realized
on on
Name Exercise (#) Exercise ($)(1)
---- ------------ ---------------

John M. Kelley 12,000 $ 41,901
- -------
<FN>
(1) Value is calculated by subtracting the exercise price from the trading
price of the common stock as of the exercise date.
</FN>

Employment Agreements

Myron Levy entered into an employment agreement with us, dated as of July
29, 2002 which expires December 31, 2012, subject to extension for additional
one-year periods annually each January 1 with a final expiration date of
December 31, 2015 (as amended December 9, 2003). The agreement provides for an
annual salary as of July 29, 2007 at the rate of $707,319 and provides for a
semi-annual cost of living adjustment based on the consumer price index. The
agreement also provides for incentive compensation at 3% in the aggregate of our
pretax income. Incentive compensation earned for fiscal year ended July 29, 2007
was $369,000. At the end of the employment period, the agreement provides for a
ten-year consulting period at an annual compensation rate equivalent to one-half
of Mr. Levy's annual salary in effect at the end of the employment period,
subject to annual cost of living adjustments.

The employment agreement with Mr. Levy provides for certain payments
following death or disability, and also provides that, in the event there is a
change in control, as defined, he has the option to terminate the agreement and
receive a lump-sum payment equal to the sum of the salary payable for the
remainder of the employment term, plus the annual incentive (based on the
average of the three highest annual incentive awarded during the ten preceding
years) for the remainder of the employment term. As of July 29, 2007, the amount
payable in the event of such termination would be approximately $7,709,000.

John M. Kelley entered into an employment agreement with us, dated as of
June 7, 2006 which expires June 6, 2009. The agreement provides for an annual
salary as of July 29, 2007 at the rate of $250,000, subject to review by the
Board of Directors, plus an annual bonus at the discretion of the Board of
Directors. In addition, Mr. Kelley has entered into a severance agreement with
us which provides that in the event of a change in our control, as defined,
prior to September 30, 2008, he is entitled to two years' base salary.

Mr. Jeffrey Markel entered into an employment agreement with us, dated as
of June 4, 2007 which expires July 31, 2010, subject to extension for additional
one-year periods annually beginning July 31, 2008 with a final expiration date
of July 31, 2012. The agreement provides for an initial annual salary of
$350,000 (subject to a semi-annual cost of living adjustment based on the
consumer price index), and an initial award of 250,000 non-qualified stock
options at the closing stock price on the date prior to execution of the

agreement of $15.77 per share. The options vest 20% upon award and 20% annually
over the next four years. The agreement also provides for incentive compensation
to be paid at the discretion of the Board of Directors, however, incentive
compensation for the fiscal year ending August 3, 2008 shall be paid at a
minimum of $300,000. The agreement also provides for a consulting period of ten
years at the end of the employment period at an annual compensation of $100,000.
In the event of a change in our control, as defined, the executive has the
option to terminate the agreement at any time after July 31, 2010 and receive a
lump-sum payment equal to the sum of: (1) his salary payable for the remainder
of the employment term, (2) the annual bonuses (based on the average of the
annual bonuses awarded during the term of the employment agreement) for the
remainder of the employment term, and (3) a lump sum payment of $500,000
representing full consideration under the consulting period.

Kevin J. Purcell entered into an employment agreement with us, dated as of
June 7, 2006 which expires June 6, 2009. The agreement provides for an annual
salary as of July 29, 2007 at the rate of $220,000, subject to review by the
Board of Directors, plus an annual bonus at the discretion of the Board of
Directors. In addition, Mr. Purcell has entered into a severance agreement with
us which provides that in the event of a change in our control, as defined,
prior to June 10, 2008, he is entitled to two years' base salary.

Several other officers and key employees have severance agreements
providing for an aggregate lump sum payment of approximately $3,440,000 through
September 30, 2008 in the event of a change of control as defined in the
agreements.

Estimate of Potential Payments upon Termination or Change in Control

The following table provides an estimate of the potential payments and
benefits that each of the Named Executive Officers would be entitled to receive
upon termination of employment under various circumstances and upon a change of
control. In each case, the table assumes the executive's termination or the
change of control occurred on July 29, 2007. The table does not include payments
the executive would be entitled to receive in the absence of one of these
specified events such as from the exercise of previously-vested stock options,
which amount can be calculated from the Outstanding Equity Awards at Fiscal 2007
Year End table. The table also does not include benefits that are provided on a
non-discriminatory basis to salaried employees generally, including amounts
payable under the Company's 401(k) plan.

Termination
without Cause or
Termination a Constructive
without Cause Termination
prior to Change Change in after a Change
Name Benefit in Control Control(1) in Control(4)
---- ------- --------------- ----------- ----------------

Myron Levy Severance (5) $ 7,709,000 $ 7,709,000 $ 7,709,000
John M. Kelley Severance - $ 500,000 -
Jeffrey L. Markel Severance (5) $ 2,450,000 (2) (3) $ 2,450,000 (2)
Kevin J. Purcell Severance - $ 440,000 -

- -------
<FN>
(1) Change in control is defined as such term is presently defined in
Regulation 240.12b-2 under the Securities Exchange Act of 1934; or if any
"person" (as such term is used in Section 13(d) and 14(d) of the Exchange
Act other than the Company or any "person" who is a director or officer of
the Company, becomes the "beneficial owner" (as defined in Rule 13(d)-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing twenty-five percent (25%), (20% in the case of Mr.
Levy and 50.1% in the case of Mr. Markel), of the voting power of the
Company's then outstanding securities; or if individuals who constitute the
Board of Directors cease for any reason to constitute at least a majority
thereof.
(2) In the event of termination without cause or a "constructive termination",
Mr. Markel would be entitled to receive a lump-sum payment of approximately
$1,950,000 representing three times his salary and estimated incentive,
plus $500,000 in settlement of his consulting agreement.
(3) In the event of a change in control as defined in (1) above, Mr. Markel has
the option to terminate his employment agreement at any time after July 31,
2012 and receive a lump-sum payment of approximately $1,900,000.
(4) A "constructive termination" event is (1) a material reduction of the
annual base and incentive compensation opportunities specified in the
officer's employment agreement to which he does not consent, (2) a failure
of Herley's successor after a change of control to assume the officer's
employment agreement, (3) a substantial change in the officer's position or
responsibility or (4) the officer's position relocates to more than 35
additional commute miles (one way).
(5) If any payments or benefits received by Messrs. Levy or Markel would be
subject to the "golden parachute" excise tax under Section 4999 of the
Internal Revenue Code, we would be required to pay him such additional
amounts as may be necessary to place him in the same after-tax position as
if the payments had not been subject to the excise tax.
</FN>

Equity Compensation Plan Information

The following table sets forth the indicated information as of July 29,
2007 with respect to our equity compensation plans:

(c)
Number of securities
(a) remaining available
Number of securities (b) for future issuance
to be issued upon Weighted-average under equity
exercise of exercise price of compensation plans
outstanding options, outstanding options, (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))
- ------------- ------------------- ------------------- ------------------------

Equity compensation
plans approved by
security holders 2,383,643 $ 13.35 1,779
Equity compensation
plans not approved
by security holders 1,256,807 $ 17.65 220,700
--------- -------
Total 3,640,450 $ 14.84 222,479
========= =======

The following information is provided about our stock option plans:

2006 New Employee Stock Option Plan. The 2006 New Employee Stock Option
Plan covers 500,000 shares of common stock (as amended June 8, 2007). Options
granted under the plan are non-qualified stock options. Under the terms of the
plan, the exercise price for options granted under the plan will be the fair
market value at the date of grant. The nature and terms of the options to be
granted are determined at the time of grant by the compensation committee or the
board of directors. The options expire no later than ten years from the date of
grant, subject to certain restrictions. Options for 250,000 shares were granted
under this plan during the fiscal year ended July 29, 2007. Options for 217,000
shares of common stock are available for grant and 283,000 were outstanding at
July 29, 2007.
22

2003 Stock Option Plan. The 2003 Stock Option Plan covers 1,000,000 shares
of common stock. Options granted under the plan are non-qualified stock options.
Under the terms of the plan, the exercise price of options granted under the
plan will be the fair market value at the date of grant. The nature and terms of
the options to be granted are determined at the time of grant by the
compensation committee or the board of directors. If not specified, 100% of the
shares can be exercised one year after the date of grant. The options expire not
later than ten years from the date of grant, subject to certain restrictions.
Options for 97,000 shares were granted under this plan during the fiscal year
ended July 29, 2007. Options for 3,700 shares of common stock are available for
grant and 966,800 were outstanding at July 29, 2007.

2000 Stock Option Plan. The 2000 Stock Option Plan covers 1,500,000 shares
of common stock. Options granted under the plan are non-qualified stock options.
Under the terms of the plan, the exercise price of options granted under the
plan will be the fair market value at the date of grant. The nature and terms of
the options to be granted are determined at the time of grant by the
compensation committee or the board of directors. If not specified, 100% of the
shares can be exercised one year after the date of grant. The options expire not
later than ten years from the date of grant, subject to certain restrictions.
Options for 26,000 shares were granted under this plan during the fiscal year
ended July 29, 2007. Options for 1,750 shares of common stock are available for
grant and 1,225,300 were outstanding at July 29, 2007.

1998 Stock Option Plan. The 1998 Stock Option Plan covers 2,250,000 shares
of common stock. Options granted under the plan may be incentive stock options
qualified under Section 422 of the Internal Revenue Code of 1986, as amended, or
non-qualified stock options. Under the terms of the plan, the exercise price of
options granted under the plan will be the fair market value at the date of
grant. Prices for incentive stock options granted to employees who own 10% or
more of our stock are at least 110% of market value at the date of grant. The
nature and terms of the options to be granted are determined at the time of
grant by the compensation committee or the board of directors. If not specified,
100% of the shares can be exercised one year after the date of grant. The
options expire not later than ten years from the date of grant, subject to
certain restrictions. Non-qualified stock options for 33,500 shares were granted
under this plan during the fiscal year ended July 29, 2007. Options for 29
shares of common stock are available for grant and 1,053,792 were outstanding at
July 29, 2007.

1997 Stock Option Plan. The 1997 Stock Option Plan covers 2,500,000 shares
of common stock. Options granted under the plan may be incentive stock options
qualified under Section 422 of the Internal Revenue Code of 1986, as amended, or
non-qualified stock options. Under the terms of the plan, the exercise price of
options granted under the plan will be the fair market value at the date of
grant. Prices for incentive stock options granted to employees who own 10% or
more of our stock are at least 110% of market value at the date of grant. The
nature and terms of the options to be granted are determined at the time of
grant by the compensation committee or the board of directors. If not specified,
100% of the shares can be exercised one year after the date of grant. The
options expire not later than ten years from the date of grant, subject to
certain restrictions. No options were granted under this plan during the fiscal
year ended July 29, 2007 and there are no options available for grants. At July
29, 2007, options to purchase 104,551 shares of common stock were outstanding
under this plan.

1996 Stock Option Plan. The 1996 Stock Option Plan, which has now expired
with respect to the granting of new options, covers 1,000,000 shares of common
stock. Options which have been granted under the plan are non-qualified stock
options. Under the terms of the plan, the exercise prices of the options granted
under the plan were at the fair market value at the date of grant. The options

expire not later than ten years from the date of grant. At July 29, 2007,
non-qualified options to purchase 7,007 shares of common stock were outstanding
under this plan.

Employee Savings Plan

We maintain an Employee Savings Plan ("Plan") which qualified as a thrift
plan under Section 401(k) of the Internal Revenue Code (the "Code"). Effective
August 1, 2006, the Plan was amended to allow employees to elect salary
deferrals up to the maximum dollar amounts permissible under Code Section 402(g)
not to exceed the limits of Code Section 401(k), 404 and 415. For the Plan year
beginning August 1, 2005, the Plan was amended to be considered a "Safe Harbor"
plan, where a contribution will be made to eligible participants in an amount
equal to 100% of the amount of each participant's elective deferral that does
not exceed 3% of compensation, plus 50% of the amount of the elective deferral
that exceeds 3% of compensation up to a maximum contribution of 5% of
compensation. Under the Safe Harbor provision, all contributions are 100% vested
when made. Additional Company contributions can be made by us, depending on
profits. The aggregate benefit payable to an employee is dependent upon the
employee's rate of contribution, the earnings of the fund, and the length of
time such employee continues as a participant. ICI also has a "Safe Harbor"
plan, where a contribution will be made to eligible participants in an amount
equal to 100% of the amount of each participant's elective deferral that does
not exceed 6% of compensation, subject to the Code limitations discussed above.
We recognized expenses of approximately $1,766,000, $1,773,000 and $1,038,000
under the plans for the fifty-two weeks ended July 29, 2007, July 30, 2006 and
July 31, 2005, respectively. We also contributed to a similar plan through EWST
whereby we match employee elective contributions up to a maximum of 5% of
compensation. Expenses recognized for 2007, 2006 and 2005 were approximately
$75,200, $55,900 and $60,600, respectively. For the year ended July 29, 2007,
$8,800 was contributed by us to this plan for each of Messrs. Levy, Kelley and
Purcell. A total of $66,437 was contributed for all officers and directors as a
group.

PROPOSAL TWO

PROPOSAL TO AMEND HERLEY'S BY-LAWS TO PROVIDE FOR RESIGNATION OF
DIRECTOR NOMINEE RECEIVING MORE "WITHHELD" THAN "FOR" VOTES IN
UNCONTESTED ELECTIONS

General

The board of directors recommends that stockholders approve an amendment to
Herley's by-laws to provide that in uncontested director elections, a director
nominee receiving more "withheld" votes than "for" votes must immediately submit
a resignation letter to the remainder of the board of directors. An election is
contested if, as of the record date, there are more nominees for election than
positions on the board of directors to be filled by election at the annual
meeting.

Herley, a Delaware corporation, uses the plurality vote standard to elect
directors. Delaware law provides that a company's certificate of incorporation
or by-laws may specify the number of votes that shall be necessary for the
transaction of any business, including the election of directors.

"Plurality" voting means that the nominees receiving the largest number of
affirmative votes cast are elected directors up to the maximum number of
directors to be elected, regardless of the number of "withheld" votes or whether
affirmative votes constitute a majority of the votes cast.

Herley's Nominating Committee believes it is in the best interests of the
Company and its stockholders to amend our by-laws to provide that, in
uncontested director elections, a director nominee receiving more "withheld"
votes than "for" votes must immediately submit a resignation letter to the
remainder of the board of directors. The Nominating Committee will consider the
resignation and recommend to the board whether to accept or reject it. The
board, with the recommendation of the Nominating Committee, then must accept or
reject the resignation within 45 days following the stockholders' meeting and
must explain its decision in a publicly available SEC filing.

If the proposed amendment is approved, Article I, Section 2 of Herley's
by-laws, will be amended as set forth in Exhibit B attached to this proxy
statement.

The by-laws amendment further provides that any proposal to amend or repeal
Article I, Section 2 of the by-laws, which has not been previously approved by
the Board of Directors, will require the approval of a majority of the
outstanding shares of Herley common stock. Stockholders are encouraged to read
Exhibit B in its entirety.

If approved, this amendment will become effective upon the filing of
Herley's amended by-laws with the Secretary of State of Delaware. Herley will
make this filing promptly after approval of the proposal at the meeting. The
amended by-law standard would then be applicable to the election of directors at
the 2008 Annual Meeting of stockholders.

Board Position and Required Vote

The proposal will be adopted only if it receives the affirmative vote of a
majority of the voting power in person or by proxy and entitled to vote at the
Annual Meeting on this proposal. The Board of Directors recommends a vote FOR
the amendment to Herley's by-laws as set forth in Exhibit B.

PROPOSAL THREE

PROPOSAL FOR APPOINTMENT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

General

The Board of Directors, upon the recommendation of the Audit Committee,
recommends that the stockholders approve the appointment of Marcum & Kliegman,
LLP as our Company's independent certified public accounting firm to audit our
financial statements for the fiscal year ending August 3, 2008.

Board Position and Required Vote

The proposal will be adopted only if it receives the affirmative vote of a
majority of the voting power in person or by proxy and entitled to vote at the
Annual Meeting on this proposal. The Board of Directors recommends a vote FOR
the ratification of the appointment of Marcum & Kliegman, LLP as our independent
registered public accounting firm.

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed the audited financial
statements with our management. The Audit Committee also discussed with Marcum &
Kliegman LLP, our independent auditors, the matters required to be discussed by
Statement on Auditing Standards No. 61, "Communication with Audit Committees,"
as may be modified or supplemented. The Audit Committee has received the written
disclosures and the letter from Marcum & Kliegman LLP required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," as may be modified or supplemented, and has discussed with Marcum &
Kliegman LLP its independence. Based upon the review and discussions referred to
above, the Audit Committee recommended to our Board of Directors that the
audited financial statements be included in our Annual Report on Form 10-K/A for
the fiscal year ended July 29, 2007 for filing with the SEC.

The Audit Committee has also reviewed and discussed the fees paid to Marcum
& Kliegman LLP during the last fiscal year for audit and non-audit services,
which are set forth under "Audit Fees" and has considered whether the provision
of the non-audit services is compatible with the firm's independence and has
concluded that it is.

This Audit Committee report shall not be deemed incorporated by reference
in any document previously or subsequently filed with the SEC that incorporates
by reference all or any portion of this proxy statement, except to the extent
that we specifically request that this report be specifically incorporated by
reference.

The Audit Committee:

Edward K. Walker (Chairman)
Robert M. Moore
Edward A. Bogucz
October 10, 2007

Audit Fees

Marcum & Kliegman LLP is our independent registered public accounting firm
and performed the audit of our consolidated financial statements for fiscal
years 2007, 2006, and 2005. The following table sets forth estimated fees for
the audits of the fiscal years ended July 29, 2007 and July 30, 2006 performed
by Marcum & Kliegman LLP:

2007 2006
---- ----

Audit Fees (1) $ 568,000 $ 475,000
Audit related fees (2) $ 60,000 -
- ---------------
<FN>

(1) Audit Fees includes fees for professional services provided in connection
with the audits of our financial statements, the review of our quarterly
financial statements, Sarbanes-Oxley 404 related services, consents, and
audit services provided in connection with other statutory or regulatory
filings. All such services were pre-approved by the Audit committee.
(2) Audit related fees includes the audit of our 401k plan.
</FN>

The Audit Committee has sole authority to appoint, determine funding for,
retain and oversee our independent auditors and to pre-approve all audit
services and permissible non-audit services. The Audit Committee has delegated
to Adm. Walker the authority to pre-approve audit-related and non-audit services
not prohibited by law to be performed by our independent registered public
accounting firm and associated fees, provided that he reports any pre-approval
of audit-related or non-audit related services and fees to the full Audit
Committee at its next regular meeting.

Marcum & Kliegman LLP did not render any other non-audit related services
during fiscal years 2007 and 2006.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS

Section 16(a) of the Securities Exchange Act of 1934 requires directors,
executive officers and persons who beneficially own more than 10% of our common
stock (collectively, "Reporting Persons") to file initial reports of ownership
and reports of changes in ownership of our common stock with the Securities and
Exchange Commission. Reporting Persons are required by SEC regulations to
furnish us with copies of all Section 16(a) reports they file. To our knowledge,
based solely on our review of the copies of such reports received or written
representations from certain Reporting Persons that no other reports were
required, we believe that during fiscal 2007, all Reporting Persons timely
complied with all applicable filing requirements.

CORPORATE GOVERNANCE - CODE OF ETHICS

We have adopted a Corporate Code of Business Ethics (the "Code") that
applies to all employees, including our principal executive officer, principal
financial officer, and directors of the Company. The Code is broad in scope and
is intended to foster honest and ethical conduct, including accurate financial
reporting, compliance with laws and the like. If any substantive amendments are
made to the Code or if there is any grant of waiver, including any implicit
waiver, from a provision of the Code to our Chief Executive Officer or Chief
Financial Officer, we will disclose the nature of such amendment or waiver in a
report on Form 8-K.

FINANCIAL STATEMENTS AND INCORPORATION BY REFERENCE

A copy of our Annual Report to Stockholders for the fiscal year ended July
29, 2007 has been provided to all stockholders as of the Record Date.
Stockholders are referred to the report for financial and other information
about us, but such report, is not incorporated in this proxy statement and is
not a part of the proxy soliciting material.

COMMON STOCK PERFORMANCE

The following graph sets forth the cumulative total stockholder return
to our stockholders during the five year period ended July 29, 2007 as well as
an overall stock market index (NASDAQ Stock Market-US) and the Company's peer
group index (S&P Aerospace/Defense):

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Herley Industries, Inc., The NASDAQ Composite Index
And The S&P Aerospace & Defense Index

- -------------------------------------------------------------------------------------------------
7/02 7/03 7/04 7/05 7/06 7/07
- -------------------------------------------------------------------------------------------------

Herley Industries, Inc. 100.00 90.54 91.71 95.32 52.34 69.32
NASDAQ Composite 100.00 129.56 136.90 155.55 148.52 183.67
S&P Aerospace & Defense 100.00 91.96 117.22 137.98 161.30 209.20
<FN>
*$100 invested on 7/31/02 in stock or index-including reinvestment of dividends.
Fiscal year ending July 31.
</FN>

MISCELLANEOUS INFORMATION

As of the date of this Proxy Statement, the Board of Directors does not
know of any business other than that specified above to come before the meeting,
but, if any other business does lawfully come before the meeting, it is the
intention of the persons named in the enclosed Proxy to vote in regard thereto
in accordance with their judgment.

We will pay the cost of soliciting proxies in the accompanying form. In
addition to solicitation by use of the mails, certain of our officers and
regular employees may solicit proxies by telephone, telegraph or personal
interview. We may also request brokerage houses and other custodians and
nominees and fiduciaries, to forward soliciting material to the beneficial
owners of stock held of record by such persons, and may make reimbursement for
payments made for their expense in forwarding soliciting material to such
beneficial owners.

Proposals of stockholders intending to be presented at the next Annual
Meeting of Stockholders pursuant to SEC Rule 14a-8 must be received at our
principal office not later than September 20, 2008 to be included in the proxy
statement for that meeting.

By Order of the Board of Directors,

MYRON LEVY
Chairman and Chief Executive Officer

Dated: January 11, 2008
Lancaster, Pennsylvania

Exhibit A

HERLEY INDUSTRIES, INC.

CHARTER OF THE AUDIT COMMITTEE
------------------------------

I. Audit Committee Purpose

The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling the Board's oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:

o Monitor the integrity of the Company's financial statements and the
performance of its systems of internal controls regarding finance and
accounting.

o Monitor the Company's compliance with legal and regulatory
requirements.

o Monitor the qualifications, independence and performance of the
Company's independent auditors.

o Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.

The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the Company. The Audit Committee has
the ability to retain, at the Company's expense, special legal, accounting, or
other consultants or experts it deems necessary in the performance of its
duties.

II. Audit Committee Composition and Meetings

Audit Committee members shall meet the requirements of the NASD. The Audit
Committee shall be comprised of such number of directors as determined by the
Board, but no less than three directors, each of whom shall be an independent
director, as such is defined by Nasdaq rules and any rule or regulation
prescribed by the SEC, free from any relationship that would interfere with the
exercise of his or her independent judgment. All members of the Committee shall
have a basic understanding of finance and accounting and be able to read and
understand fundamental financial statements in accordance with the Nasdaq Audit
Committee requirements.

Audit Committee members shall be elected by the Board at the annual meeting
of the Board or until their successors shall be duly elected and qualified. If
an audit committee Chair is not designated, the members of the Committee may
designate a Chair by majority vote of the Committee membership.

The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. The Audit Committee Chair shall prepare and/or approve
an agenda in advance of each meeting. The Committee should meet privately in
executive session at least annually with management, the independent auditors,
and as a committee to discuss any matters that the Committee or each of these
groups believe should be discussed.

A-1

III. Audit Committee Responsibilities and Duties

1. Overseeing the internal audit function and reviewing, on a continuing
basis, the adequacy of the Company's system of internal controls, including
meeting periodically with the Company's management and the independent auditors
to review the adequacy of such controls and to review before release the
disclosure regarding such system of internal controls required under SEC rules
to be contained in the Company's periodic filings and the attestations or
reports by the independent auditors relating to such disclosure.

2. Appointing, compensating and overseeing the work of the independent
auditors (including resolving disagreements between management and the
independent auditors regarding financial reporting) for the purpose of preparing
or issuing an audit report or related work.

3. Pre-approving audit and non-audit services provided to the Company by
the independent auditors (or subsequently approving non-audit services in those
circumstances where a subsequent approval is necessary and permissible); in this
regard, the Audit Committee shall have the sole authority to approve the hiring
and firing of the independent auditors, all audit engagement fees and terms and
all non-audit engagements, as may be permissible, with the independent auditors.

4. Reviewing and providing guidance with respect to the external audit and
the Company's relationship with its independent auditors by:

(a) reviewing the independent auditors' proposed audit scope,
approach and independence;

(b) obtaining on a periodic basis a statement from the independent
auditors regarding relationships and services with the Company
which may impact independence and presenting this statement to
the Board of Directors, and to the extent there are
relationships, monitoring and investigating them;

(d) discussing with the Company's independent auditors the financial
statements and audit findings, including any significant
adjustments, management judgments and accounting estimates,
significant new accounting policies and disagreements with
management and any other matters described in SAS No. 61, as may
be modified or supplemented;

(e) reviewing reports submitted to the audit committee by the
independent auditors in accordance with the applicable SEC
requirements; and

(f) reviewing and discussing with management and the independent
auditors the annual audited financial statements and quarterly
unaudited financial statements, including the Company's
disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations," prior to filing
the Company's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q, respectively, with the SEC.

A-2

5. Directing the Company's independent auditors to review before filing
with the SEC the Company's interim financial statements including the Quarterly
Reports on Form 10-Q, using professional standards and procedures for conducting
such reviews.

6. Conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements provided to
management by the independent auditors.

7. Reviewing before release the unaudited quarterly operating results in
the Company's quarterly earnings release.

8. Overseeing compliance with the requirements of the SEC for disclosure of
auditor's services and audit committee members, member qualifications and
activities.

9. Reviewing, approving and monitoring the Company's code of ethics for its
senior officers.

10. Reviewing management's monitoring of compliance with the Company's
standards of business conduct and with the Foreign Corrupt Practices Act.

11. Reviewing, in conjunction with counsel, any legal matters that could
have a significant impact on the Company's financial statements.

12. Providing oversight and review at least annually of the Company's risk
management policies, including its investment policies.

13. Reviewing the performance of the independent auditors and ensure that
the independent auditors are accountable to the Board of Directors.

14. Ensuring receipt from the independent auditors of a formal written
statement delineating between the auditor and the Company, consistent with
Independence Standards Board Standard 1, as well as actively engaging in a
dialogue with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and independence of
the independent auditors.

15. If necessary, instituting special investigations and, if appropriate,
hiring special counsel or experts to assist.

16. Reviewing related party transactions for potential conflicts of
interest.

17. Reviewing and reassessing the adequacy of its formal written charter on
an annual basis.

18. Performing other oversight functions as requested by the full Board of
Directors.

A-3

Other Audit Committee Responsibilities
- --------------------------------------

19. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's annual
proxy statement.

20. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board deems
necessary or appropriate.

21. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.

While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
Nor is it the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's Code of Business
Ethics.

A-4

Exhibit B

PROPOSED AMENDMENT TO THE BY-LAWS
---------------------------------

Article I, Section 2. Annual Meetings.
- -------------------------------------

Annual meetings of stockholders shall be held on such date not earlier than
September 1 nor later than March 1 of the subsequent year on such day and at
such time as shall be designated from time to time by the Board of Directors. At
each annual meeting the stockholders shall elect a Board of Directors by
plurality vote; provided, however, in an uncontested election, any director
nominee who receives more "withheld" votes than "for" votes in such election,
must immediately submit a resignation letter to the remaining Board of Directors
upon certification of the stockholder vote and the remaining Board of Directors
shall, upon a process managed by the Nominating Committee and excluding the
director nominee in question, within 45 days of receiving such resignation
letter determine whether to accept such resignation. The Board of Director's
explanation of its decision shall be promptly disclosed on Form 8-K filed with
the Securities and Exchange Commission. An election shall be considered
contested if as of the record date there are more nominees for election than
positions on the Board of Directors to be filled by election at the annual
meeting. At the annual meeting the stockholders shall conduct such other
business as may be properly brought before the meeting. Any proposal to amend or
repeal this section, which has not previously been approved by the Board of
Directors, shall require the approval of the holders of a majority of the
outstanding shares of the Company's common stock.

B-1

HERLEY INDUSTRIES, INC.
BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING
FEBRUARY 26, 2008

The undersigned hereby appoints REAR ADM. ROBERT M. MOORE and REAR ADM. EDWARD
K. WALKER, JR., or either of them, attorneys and Proxies with full power of
substitution in each of them, in the name and stead of the undersigned to vote
as Proxy all the stock of the undersigned in HERLEY INDUSTRIES, INC., a Delaware
corporation, at the Annual Meeting of Stockholders scheduled to be held on
February 26, 2008 and any adjournments thereof.

THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY PROXIES, OR EITHER OF THEM, AS
SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR
THE PROPOSALS SET FORTH.

(Continued and to be signed on reverse side)

SEE REVERSE SIDE

1. Election of the following nominees, as set forth in the proxy statement:

Myron Levy
Dr. Edward A. Bogucz

[ ] FOR all nominees listed above [ ] WITHHOLD authority to vote

-------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual nominee,
print the nominee's name on the line provided above).

The Board of Directors recommends a vote FOR the following proposal:

2. Approval of an amendment to the by-laws to provide for resignation of
director nominee who receives more "withheld" than "for" votes in an
uncontested election.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. Ratification of the appointment of Marcum & Kliegman LLP as the Company's
independent registered public accountants for the year ending August 3,
2008.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. Upon such other business as may properly come before the meeting or any
adjournment thereof.

PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE

SIGNATURE(S)___________________________ ____________________________

DATED: _____________, 2008