EMPLOYMENT AGREEMENT





THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into as of July

29, 2002, by and between HERLEY INDUSTRIES, INC., a Delaware corporation, with

its principal office located at 3061 Industry Drive, Lancaster, Pennsylvania

17603 (together with its successors and assigns permitted under this Agreement,

"Herley") and MYRON LEVY ("Levy"), amends and restates in its entirety the

Employment Agreement made and entered into as of October 1, 1998, as amended on

January 26, 1999 and July 30, 1999 between Herley and Levy (the "Prior

Agreement").

                                   WITNESSETH:

         WHEREAS, Herley has determined that it is in the best interests of

Herley and its stockholders to continue to employ Levy and to set forth in this

Agreement the obligations and duties of both Herley and Levy; and

         WHEREAS, Herley wishes to assure itself of the services of Levy for the

period hereinafter provided, and Levy is willing to be employed by Herley for

said period, upon the terms and conditions provided in this Agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants

contained herein and for other good and valuable consideration, the receipt of

which is mutually acknowledged, Herley and Levy (individually a "Party" and

together the "Parties" ) agree as follows:





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1.       DEFINITIONS.



          (a)  "Beneficiary" shall mean the person or persons named by Levy

               pursuant to Section 17 below or, in the event that no such person

               is named who survives Levy, his estate.



          (b)  "Board" shall mean the Board of Directors of Herley.



          (c)  "Cause" shall mean:



               (i)  Levy's  conviction  of a felony  involving an act or acts of

                    dishonesty  on his part and  resulting  in gain or  personal

                    enrichment at the expense of Herley;



               (ii) willful and continued failure of Levy to perform his

                    obligations under this Agreement, resulting in demonstrable

                    material economic harm to Herley, or



               (iii)a willful and material breach by Levy of the provisions of

                    Sections 14 or 15 below to the demonstrable and material

                    detriment of Herley.



Notwithstanding the foregoing, in no event shall Levy's failure to perform the

duties associated with his position caused by his mental or physical disability

constitute Cause for his termination.



For purposes of this Section 1(c), no act or failure to act on the part of Levy

shall be considered "willful" unless it is done, or omitted to be done, by him

in bad faith or without reasonable belief that his action or omission was in the

best interests of Herley. Any act or failure to act based upon authority given

pursuant to a resolution adopted by the Board or based upon the advice of

counsel for Herley shall be conclusively presumed to be done, or omitted to be

done, by Levy in good faith and in the best interests of Herley.



<PAGE>







          (d)  "Change  in  Control"  shall  mean the  occurrence  of any of the

               following events:



               (i)  the acquisition by any individual, entity or group (within

                    the meaning of Section 13(d)(3) or 14(d)(2) of the

                    Securities Exchange Act of 1934 as amended (the "Exchange

                    Act") (a "Person") of beneficial ownership (within the

                    meaning of Rule 13d-3 promulgated under the Exchange Act) of

                    voting securities of Herley when such acquisition causes

                    such Person to beneficially own 20 percent or more of the

                    combined voting power of the then outstanding voting

                    securities of Herley entitled to vote generally in the

                    election of directors (the "Outstanding Herley Voting

                    Securities"); provided, however, that for purposes of this

                    subsection (i), the following acquisitions shall not be

                    deemed to result in a Change of Control: (A) any acquisition

                    directly from Herley, (B) any acquisition by Herley, (C) any

                    acquisition by any employee benefit plan (or related trust)

                    sponsored or maintained by Herley or any corporation

                    controlled by Herley or (D) any acquisition pursuant to a

                    transaction that complies with clauses (A), (B) and (C) of

                    subsection (iii) below; and provided, further, that if any

                    Person's beneficial ownership of the Outstanding Herley

                    Voting Securities reaches or exceeds 20 percent as a result

                    of a transaction described in clause (A) or (B) above, and

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