MODIFICATION AGREEMENT made this 26th day of January, 1999 and between HERLEY INDUSTRIES,
INC., a Delaware corporation (hereinafter the "Company") and LEE N. BLATT, an individual residing at 471
North Arrowhead Trail, Vero Beach, Florida 32963 (hereinafter "the Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee entered into an Employment Agreement dated October 1, 1998
(hereinafter the "Employment Agreement"); and
WHEREAS, the Company and Employee desire to amend said Employment Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Paragraph "5 (iii)" of the Employment Agreement is hereby deleted in its entirety, and in its place and stead
shall be the following:
"(iii) Not later than one hundred twenty (120) days after the end of the fiscal year of the Company and each
subsequent fiscal year of the Company ending during the period of employment, the Company shall pay to
Employee, as incentive compensation an amount equal to five (5%) percent of the Consolidated Pretax Earnings
of the Company in excess of the Company's Minimum Consolidated Pretax Earnings, as defined below in this
For purposes hereof, the term "Consolidated Pretax Earnings" of the Company shall mean, with respect to any
fiscal year, the consolidated income, if any, of the Company for such fiscal year as set forth in the audited,
consolidated financial statements (the "Financial Statements") of the Company and its subsidiaries included in its
Annual Report to stockholders for such fiscal year, before deduction of taxes based on income or of the incentive
compensation to be paid to Employee for such fiscal year under this Agreement. For the purposes hereof the
term "Minimum Consolidated Pretax Earnings" of the Company shall mean with respect to any fiscal year, the
consolidated Pretax Earnings of the Company equal to $2,000,000."
2. Paragraph "12" of the Employment Agreement is hereby deleted in its entirety, and in its place and stead shall