Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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HERLEY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2413500
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10 Industry Drive, Lancaster, Pennsylvania 17603-4025
(Address of principal executive offices) (Zip Code)
1997 STOCK OPTION PLAN
(Full title of the plan)
Myron Levy, President
Herley Industries, Inc.
10 Industry Drive
Lancaster, Pennsylvania 17603-4025
(Name and address of agent for service)
(717) 397-2777
(Telephone number, including area code, of agent for service)
-----------------------
copy to:
David H. Lieberman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to be Offering Aggregate Amount of
to be Registered Registered Price Per Share (1) Offering Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,666,666 shs. $13.00 $21,666,658 $6,392
par value $.10
- ------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee, based on
the closing price of the Company's
Common Stock reported on the consolidated reporting system on February 17, 1998, pursuant to
Rule 457.
(2) The Registration Statement also covers an indeterminate number of additional shares of
Common Stock which may
become issuable pursuant to anti-dilution and adjustment provisions of the Plan.
</FN>
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</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents have been filed by the Company with the Commission
(File No. 0-5411) pursuant to the Exchange Act, are incorporated by reference in
this Registration Statement and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Forms 10-K and 10-K/A for the fiscal
year ended August 3, 1997;
(2) The Company's Quarterly Report on Form 10-Q for the thirteen weeks
ended November 2, 1997.
(3) The Registration Statement on Form S-1 with respect to the Company's
Common Stock (File No. 333-39767), including any amendment or report
filed for the purpose of updating the description of the Common Stock
contained therein.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Registration Statement and prior to the
termination of this offering of Common Stock shall be deemed to be incorporated
by reference in this Registration Statement and to be part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Registration Statement shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any subsequently
filed document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
The Company will provide without charge to each person to whom a copy of
this Registration Statement is delivered, upon the written or oral request of
such person, a copy of any or all of the documents incorporated by reference
(except for exhibits thereto unless specifically incorporated by reference
therein). Requests for such copies should be directed to the Secretary, Herley
Industries, Inc., 10 Industry Drive, Lancaster, Pennsylvania 17603, (717)
397-2777.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
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David H. Lieberman, a member of the law firm of Blau, Kramer, Wactlar &
Lieberman, P.C. is a director of the Registrant. As of the date hereof, Mr.
Lieberman owns 6,600 shares of Common Stock, warrants to purchase 10,000 shares
of Common Stock, and options to purchase 10,000 shares of Common Stock.
<PAGE>
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Under provisions of the By-Laws of the Company, each person who is or was a
director or officer of the Company may be indemnified by the Company to the full
extent permitted or authorized by the General Corporation Law of Delaware.
Under such law, to the extent that such person is successful on the merits
of defense of a suit or proceeding brought against him by reason of the fact
that he is a director or officer of the Company, he shall be indemnified against
expenses (including attorneys' fees) reasonably incurred in connection with such
action.
If unsuccessful in defense of a third-party civil suit or if a criminal
suit is settled, such a person may be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgements, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action, had no reasonable cause to believe his
conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person may be indemnified under such
law only against expenses (including attorneys' fees) incurred in the defense or
settlement of such suit if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company except
that if such a person is adjudged to be liable in such suit for negligence or
misconduct in the performance of his duty to the Company, he cannot be made
whole even for expenses unless the court determines that he is fairly and
reasonably entitled to indemnity for such expenses.
The Company and the officers and directors of the Company are covered by
officers and directors liability insurance. The policy coverage is $3,000,000,
which includes reimbursement for costs and fees. There is a maximum deductible
under the policy of $200,000 for each claim. The Company has entered into
Indemnification Agreements with certain of its officers and directors. The
Agreements provide for reimbursement for all direct and indirect costs of any
type or nature whatsoever (including attorneys' fees and related disbursements)
actually and reasonably incurred in connection with either the investigation,
defense or appeal of a Proceeding, as defined, including amounts paid in
settlement by or on behalf of an Indemnitee.
Item 7. Exemption from registration claimed.
------------------------------------
Not applicable.
Item 8. Exhibits.
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4 1997 Stock Option Plan
5 Opinion and consent of Blau, Kramer, Wactlar & Lieberman, P.C.
23.1 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. - included in their
opinion filed as Exhibit 5.
23.2 Consent of Arthur Andersen LLP.
24 Powers of Attorney-included in signature page hereof.
<PAGE>
Item 9. Undertakings.
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(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Lancaster, Pennsylvania on the 23rd day of February, 1998.
HERLEY INDUSTRIES, INC.
By: /s/ Myron Levy
--------------------------
Myron Levy
President and Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on February 23, 1998 by the
following persons in the capacities indicated. Each person whose signature
appears below constitutes and appoints Lee N. Blatt and Myron Levy, and each of
them acting individually, with full power of substitution, our true and lawful
attorneys-in-fact and agents to do any and all acts and things in our name and
on our behalf in our capacities indicated below which they or either of them may
deem necessary or advisable to enable Herley Industries, Inc. to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with this Registration
Statement including specifically, but not limited to, power and authority to
sign for us or any of us in our names in the capacities stated below, any and
all amendments (including post-effective amendments) thereto, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in such connection, as
fully to all intents and purposes as we might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Signature Title
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/s/ Lee N. Blatt
- -------------------------- Chairman of the Board
Lee N. Blatt (Chief Executive Officer)
/s/ Myron Levy
- -------------------------- President and Director
Myron Levy
/s/ Anello C. Garefino
- -------------------------- Vice President - Finance,
Anello C. Garefino Treasurer (Chief Financial Officer and
Principal Accounting Officer)
- -------------------------- Director
Thomas S. Allshouse
/s/ David H. Lieberman
- -------------------------- Secretary and Director
David H. Lieberman
- -------------------------- Director
Dr. Alvin M. Silver
/s/ John Thonet
- --------------------------
John Thonet Director
- --------------------------
Adm. Edward K. Walker, Jr. Director
Exhibit 4
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HERLEY INDUSTRIES, INC.
1997 Stock Option Plan
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SECTION 1. GENERAL PROVISIONS
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1.1. Name and General Purpose
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The name of this plan is the Herley Industries, Inc. 1997 Stock Option Plan
(hereinafter called the "Plan"). The purpose of the Plan is to enable Herley
Industries, Inc. (the "Company") and its subsidiaries and affiliates to foster
and promote the interests of the Company by attracting and retaining officers
and employees of the Company who contribute to the Company's success by their
ability, ingenuity and industry, to enable such officers and employees of the
Company to participate in the long-term success and growth of the Company by
giving them a proprietary interest in the Company and to provide incentive
compensation opportunities competitive with those of competing corporations.
1.2 Definitions
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a. "Affiliate" means any person or entity controlled by or under common
control with the Company, by virtue of the ownership of voting
securities, by contract or otherwise.
b. "Board" means the Board of Directors of the Company.
c. "Change in Control" means a change of control of the Company, or in
any person directly or indirectly controlling the Company, which shall
mean:
(a) a change in control as such term is presently defined in
Regulation 240.12b-(f) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); or
(b) 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 on the
date of this Agreement 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 percent (20%) or more of the voting power of the
Company's then outstanding securities; or
(c) if during any period of two (2) consecutive years during the term
of this Plan, individuals who at the beginning of such period
constitute the Board of Directors, cease for any reason to constitute
at least a majority thereof.
d. "Code" means the Internal Revenue Code of 1986, as amended.
e. "Committee" means the Committee referred to in Section 1.3 of the
Plan.
<PAGE>
f. "Common Stock" means shares of the Common Stock, par value $.10 per
share, of the Company.
g. "Company" means Herley Industries, Inc., a corporation organized under
the laws of the State of Delaware (or any successor corporation).
h. "Fair Market Value" means the market price of the Common Stock on the
National Association of Securities Dealers Automated Quotation
("NASDAQ") system on the date of the grant or on any other date on
which the Common Stock is to be valued hereunder. If no sale shall
have been reported on NASDAQ on such date, Fair Market Value shall be
determined by the Committee in accordance with the Treasury
Regulations applicable to incentive stock options under Section 422 of
the Code.
i "Incentive Stock Option" means an Incentive Stock Option as described
in Section 2.1 of the Plan.
j. "Non-Employee Director" shall have the meaning set forth in Rule 16(b)
promulgated by the Securities and Exchange Commission ("Commission").
k. "Non-Qualified Stock Option" means a Non-Qualified Stock Option as
described in Section 2.1 of the Plan.
l. "Option" means any option to purchase Common Stock under Section 2 of
the Plan.
m. "Participant" means any officer or employee of the Company, a
Subsidiary or an Affiliate who is selected by the Committee to
participate in the Plan.
n. "Subsidiary" means any corporation in which the Company possesses
directly or indirectly 50% or more of the combined voting power of all
classes of stock of such corporation.
o. "Total Disability" means accidental bodily injury or sickness which
wholly and continuously disabled an optionee. The Committee, whose
decisions shall be final, shall make a determination of Total
Disability.
1.3 Administration of the Plan
--------------------------
The Plan shall be administered by the Committee appointed by the Board
consisting of two or more members of the Board all of who shall be Non-Employee
Directors. The Committee shall serve at the pleasure of the Board and shall have
such powers as the Board may, from time to time, confer upon it.
Subject to this Section 1.3, the Committee shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and practices governing the operation of the Plan as it shall, from time to
time, deem advisable, and to interpret the terms and provisions of the Plan.
The Committee shall keep minutes of its meetings and of action taken by it
without a meeting. A majority of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.
<PAGE>
1.4 Eligibility
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Stock options may be granted only to officers or employees of the Company
or a Subsidiary or Affiliate. Subject to Section 2.3, any person who has been
granted any Option may, if he is otherwise eligible, be granted an additional
Option or Options.
1.5 Shares
------
The aggregate number of shares reserved for issuance pursuant to the Plan
shall be 1,666,666 shares of Common Stock, or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to which
such shares shall be adjusted as provided in Section 1.6.
Such number of shares may be set aside out of the authorized but unissued
shares of Common Stock or out of issued shares of Common Stock acquired for and
held in the Treasury of the Company, not reserved for any other purpose. Shares
subject to, but not sold or issued under, any Option terminating or expiring for
any reason prior to its exercise in full will again be available for Options
thereafter granted during the balance of the term of the Plan.
1.6 Adjustments Due to Stock Splits,
Mergers, Consolidation, Etc.
-------------------------------
If, at any time, the Company shall take any action, whether by stock
dividend, stock split, combination of shares or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved for
issuance under the Plan and the number of shares which, at such time, are
subject to Options shall, to the extent deemed appropriate by the Committee, be
increased or decreased in the same proportion, provided, however, that the
Company shall not be obligated to issue fractional shares.
Likewise, in the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common Stock or other securities which are
reserved for issuance under the Plan and the number of shares or other
securities which, at such time are subject to Options.
In the event of a Change in Control, at the option of the Board or
Committee, (a) all options outstanding on the date of such Change in Control
shall, for a period of sixty (60) days following such Change in Control, become
immediately and fully exercisable, and (b) an optionee will be permitted to
surrender for cancellation within sixty (60) days after such Change in Control
any option or portion of an option which was granted more than six (6) months
prior to the date of such surrender, to the extent not yet exercised, and to
receive a cash payment in an amount equal to the excess, if any, of the Fair
Market Value (on the date of surrender) of the shares of Common Stock subject to
the option or portion thereof surrendered, over the aggregate purchase price for
such Shares under the option.
1.7 Non-Alienation of Benefits
--------------------------
Except as herein specifically provided, no right or unpaid benefit under
the Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or other person entitled to benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease.
<PAGE>
1.8 Withholding or Deduction for Taxes
----------------------------------
If, at any time, the Company or any Subsidiary or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction for
any taxes, or take any other action in connection with any Option exercise, the
Participant shall be required to pay to the Company or such Subsidiary or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company, the Company or such Subsidiary or Affiliate may
accept a sufficient number of shares of Common Stock to cover the amount
required to be withheld.
1.9 Administrative Expenses
-----------------------
The entire expense of administering the Plan shall be borne by the Company.
1.10 General Conditions
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a. The Board or the Committee may, from time to time, amend, suspend or
terminate any or all of the provisions of the Plan, provided that,
without the Participant's approval, no change may be made which would
prevent an Incentive Stock Option granted under the Plan from
qualifying as an Incentive Stock Option under Section 422 of the Code
or result in a "modification" of the Incentive Stock Option under
Section 424(h) of the Code or otherwise alter or impair any right
theretofore granted to any Participant ; and further provided that,
without the consent and approval of the holders of a majority of the
outstanding shares of Common Stock of the Company present at a meeting
at which a quorum exists, neither the Board nor the Committee may make
any amendment which (i) changes the class of persons eligible for
options; (ii) increases (except as provided under Section 1.6 above)
the total number of shares or other securities reserved for issuance
under the Plan; (iii) decreases the minimum option prices stated in
Section 2.2 hereof (other than to change the manner of determining
Fair Market Value to conform to any then applicable provision of the
Code or any regulation thereunder); (iv) extends the expiration date
of the Plan, or the limit on the maximum term of Options; or (v)
withdraws the administration of the Plan from a committee consisting
of two or more members, each of whom is a non-employee director.
b. With the consent of the Participant affected thereby, the Committee
may amend or modify any outstanding Option in any manner not
inconsistent with the terms of the Plan, including, without
limitation, and irrespective of the provisions of Sections 2.3(c) and
2.4(b) below, to accelerate the date or dates as of which an
installment of an Option becomes exercisable.
c. Nothing contained in the Plan shall prohibit the Company or any
Subsidiary or Affiliate from establishing other additional incentive
compensation arrangements for employees of the Company or such
Subsidiary or Affiliate.
d. Nothing in the Plan shall be deemed to limit, in any way, the right of
the Company or any Subsidiary or Affiliate to terminate a
Participant's employment with the Company (or such Subsidiary or
Affiliate) at any time.
<PAGE>
e. Any decision or action taken by the Board or the Committee arising out
of or in connection with the construction, administration,
interpretation and effect of the Plan shall be conclusive and binding
upon all Participants and any person claiming under or through any
Participant.
f. No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, (i) by such member
except in circumstances involving actual bad faith, nor (ii) by any
other member or by any officer, agent or employee.
1.11 Compliance with Applicable Law
------------------------------
Notwithstanding any other provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock, or grant any Option with respect
thereto, unless it is advised by counsel of its selection that it may do so
without violation of the applicable Federal and State laws pertaining to the
issuance of securities and the Company may require any stock certificate so
issued to bear a legend, may give its transfer agent instructions limiting the
transfer thereof, and may take such other steps, as in its judgment are
reasonably required to prevent any such violation.
1.12 Effective Dates
---------------
The Plan was adopted by the Board on May 1, 1997. The Plan shall terminate
on April 30, 2007.
Section 2. OPTION GRANTS
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2.1 Authority of Committee
----------------------
Subject to the provisions of the Plan, the Committee shall have the sole
and complete authority to determine (i) the Participants to whom Options shall
be granted; (ii) the number of shares to be covered by each Option; and (iii)
the conditions and limitations, if any, in addition to those set forth in
Sections 2 and 3 hereof, applicable to the exercise of an Option, including
without limitation, the nature and duration of the restrictions, if any, to be
imposed upon the sale or other disposition of shares acquired upon exercise of
an Option.
Stock options granted under the Plan may be of two types: an incentive
stock option ("Incentive Stock Option"); and a non-qualified stock option
("Non-Qualified Stock Option").
It is intended that the Incentive Stock Options granted hereunder shall
constitute incentive stock options within the meaning of Section 422 of the Code
and shall be subject to the tax treatment described in Section 422 of the Code.
Anything in the Plan to the contrary notwithstanding, no provision of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or, without the consent of the
optionee, any Incentive Stock Option under Section 422 of the Code.
<PAGE>
The Committee shall have the authority to grant Incentive Stock Options, or
to grant Non-Qualified Stock Options, or to grant both types of Options. To the
extent that any Option does not qualify as an Incentive Stock Option, in whole
or in part, it shall constitute a separate Non-Qualified Stock Option to the
extent of such disqualification.
2.2 Option Exercise Price
---------------------
The price of stock purchased upon the exercise of Options granted pursuant
to the Plan shall be the Fair Market Value thereof at the time that the Option
is granted.
If an employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of the stock of the Company or any parent
corporation of the Company or Subsidiary and an Option granted to such employee
is intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code, the exercise price shall be no less than 110% of the
Fair Market Value of the Common Stock on the date the Option is granted. The
purchase price is to be paid in full in cash, certified or bank cashier's check
or, at the option of the Company, Common Stock valued at its Fair Market Value
on the date of exercise, or a combination thereof, when the Option is exercised
and stock certificates will be delivered only against such payment.
2.3 Incentive Stock Option Grants
-----------------------------
Each Incentive Stock Option will be subject to the following provisions:
a. Term of Option
--------------
An Incentive Stock Option will be for a term of not more than ten
years from the date of grant, except in the case of an employee
described in the second paragraph of Section 2.2 above in which case
an Incentive Stock Option will be for a term of not more than five
years from the date of the grant.
b. Annual Limit
------------
To the extent the aggregate Fair Market Value of the Common Stock
(determined as of the date of grant) with respect to which any options
granted hereunder are intended to be designated as Incentive Stock
Options under the Plan (or any other incentive stock option plan of
the Company or any Subsidiary) which may be exercisable for the first
time by the optionee in any calendar year exceeds $100,000, such
options shall not be considered incentive stock options.
c. Exercise
--------
Subject to the power of the Committee under Section 1.10(b) above and
except in the manner described below upon the death of the optionee,
an Incentive Stock Option may be exercised only in installments as
follows: up to one-half of the subject shares on and after the first
anniversary of the date of grant, up to all of the subject shares on
and after the second such anniversary of the date of the grant of such
Option but in no event later than the expiration of the term of the
Option.
<PAGE>
An Incentive Stock Option shall be exercisable during the optionee's
lifetime only by the optionee and shall not be exercisable by the
optionee unless, at all times since the date of grant and at the time
of exercise, such optionee is an employee of the Company, any parent
corporation of the Company or any Subsidiary, except that, upon
termination of all employment (other than by death, Total Disability,
or by Total Disability followed by death in the circumstances provided
below) with the Company, any parent corporation of the Company and any
Subsidiary or Affiliate, the optionee may exercise an Incentive Stock
Option at any time within three months thereafter but only to the
extent such Option is exercisable on the date of such termination.
Upon termination of all employment by Total Disability, the Optionee
may exercise such options at any time within one year thereafter, but
only to the extent such option is exercisable on the date of such
termination.
In the event of the death of an optionee (i) while an employee of the
Company, any parent corporation of the Company or any Subsidiary or
Affiliate, or (ii) within three months after termination of all
employment with the Company, any parent corporation of the Company and
any Subsidiary or Affiliate (other than for Total Disability) or (iii)
within one year after termination on account of Total Disability of
all employment with the Company, any parent corporation of the Company
and any Subsidiary or Affiliate, such optionee's estate or any person
who acquires the right to exercise such option by bequest or
inheritance or by reason of the death of the optionee may exercise
such optionee's Option at any time within the period of three years
from the date of death. In the case of clauses (i) and (iii) above,
such Option shall be exercisable in full for all the remaining shares
covered thereby, but in the case of clause (ii) such Option shall be
exercisable only to the extent it was exercisable on the date of such
termination.
Notwithstanding the foregoing provisions regarding the exercise of an
Option in the event of death, Total Disability or other termination of
employment, in no event shall an Option be exercisable in whole or in
part after the termination date provided in the Option.
d. Transferability
---------------
An Incentive Stock Option granted under the Plan shall not be
transferable otherwise than by will or by the laws of descent and
distribution.
2.4 Non-Qualified Stock Option Grants
---------------------------------
Each Non-Qualified Stock Option will be subject to the following
provisions:
a. Term of Option
--------------
A Non-Qualified Stock Option will be for a term of not more than ten
years from the date of grant.
<PAGE>
b. Exercise
--------
The exercise of a Non-Qualified Stock Option shall be subject to the
same terms and conditions as provided under Section 2.3(c) above
except that (i) upon termination of all employment by Total
Disability, the Optionee may exercise such options at any time within
three years thereafter and (ii) in the event of the death of an
Optionee within three years after termination on account of Total
Disability of all employment with the Company, or any subsidiary or
affiliate, such Optionee's estate or any person who acquires the right
to exercise such option by bequest or inheritance or by reason of the
death of the Optionee may exercise such Optionee's option at any time
within a period of three years from the date of death.
c. Transferability
---------------
A Non-Qualified Stock Option granted under the Plan shall not be
transferable otherwise than by will or by the laws of descent and
distribution, except as may be permitted by the Board or the
Committee.
2.5 Agreements
----------
In consideration of any Options granted to a Participant under the Plan,
each such Participant shall enter into an Option Agreement with the Company
providing, consistent with the Plan, such terms as the Committee may deem
advisable.
EXHIBIT 5
---------
February 23, 1998
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
Re: Herley Industries, Inc.
Registration Statement on Form S-8
----------------------------------
Gentlemen:
Reference is made to the filing by Herley Industries, Inc. (the
"Corporation") of a Registration Statement on Form S-8 with the Securities and
Exchange Commission pursuant to the provisions of the Securities Act of 1933, as
amended, covering the registration of 1,666,666 shares of the Corporation's
Common Stock, $.10 par value per share, in connection with the Corporation's
1997 Stock Option Plan (the "Plan").
As counsel for the Corporation, we have examined its corporate records,
including its Certificate of Incorporation, as amended, By-Laws, its corporate
minutes, the form of its Common Stock certificate, the Plan, related documents
under the Plan and such other documents as we have deemed necessary or relevant
under the circumstances.
Based upon our examination, we are of the opinion that:
1. The Corporation is duly organized and validly existing under the laws of
the State of Delaware.
2. There have been reserved for issuance by the Board of Directors of the
Corporation 1,666,666 shares of its Common Stock, $.10 par value per share,
under the Plan. The shares of the Corporation's Common Stock, when issued
pursuant to the Plan, will be validly authorized, legally issued, fully paid and
non-assessable.
We hereby consent to be named in the Registration Statement and in the
Prospectus which constitutes a part thereof as counsel to the Corporation, and
we hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
/S/ Blau, Kramer, Wactlar & Lieberman, P.C.
-------------------------------------------
BLAU, KRAMER, WACTLAR &
LIEBERMAN, P. C.
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Herley Industries, Inc.
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our report dated September
19, 1997 included in Herley Industries, Inc.'s Form 10-K for the 53 weeks ended
August 3, 1997.
/S/ ARTHUR ANDERSEN LLP
February 23, 1998
Lancaster, Pennsylvania
