Herley Industries Announces Preliminary Agreement To Settle Derivative Suit

John A. Thonet, Chairman of the Board for Herley Industries, Inc.

, announced today that a preliminary agreement has been reached to settle all stockholder derivative actions originally filed in 2006 in the United States District Court for the Eastern District of Pennsylvania at Docket No. 06-CV-2964 (

). As disclosed previously, the consolidated derivative complaint, filed on January 12, 2007, alleges that current and former directors violated their fiduciary obligations in connection with certain actions or decisions in their capacities as officers or directors of the Company. All of the defendants previously denied any wrongdoing and, under the settlement agreement, the defendants and the Company continue to deny any breach of fiduciary duties or any other improper actions. Under the terms of the proposed settlement, Herley has agreed to institute certain corporate governance practices relating to the Board of Directors structure, directors' independence, nomination and election procedures for directors, related party transactions, director stock ownership, and oversight policies. Herley's Board is committed to the implementation of best practices in the area of corporate governance and believes that the agreed upon practices are consistent with that commitment.