EXHIBIT 10.21

                          AMENDMENT AND RESTATEMENT OF
                     2006 NEW EMPLOYEE STOCK OPTION PLAN OF
                             HERLEY INDUSTRIES, INC.

                                   BACKGROUND

     On August 1, 2006, the Board of Directors  ("Board") of Herley  Industries,
Inc.,  a Delaware  corporation  (the  "Company"),  adopted the 2006 New Employee
Stock Option Plan (the "Plan"); and

     On June 8, 2007, the Board approved an amendment to the Plan increasing the
number of shares  reserved for issuance  under the Plan from 250,000 to 500,000;
and

     On July 22,  2009,  the  Board  approved  a further  amendment  to the Plan
increasing  from  500,000 to 600,000 the number of shares  reserved for issuance
under the Plan,  and providing for the direct  issuance of restricted  shares to
participants in the Plan.

     NOW, THEREFORE, in consideration of the Premises, the Company hereby amends
and restates the Plan in its entirety to give effect to the amendments  referred
to above and to make additional conforming changes as follows:

                             HERLEY INDUSTRIES, INC.

                      2006 New Employee Stock Option Plan
                      -----------------------------------
                       (as amended through July 22, 2009)
                        --------------------------------

SECTION 1.  GENERAL PROVISION
            -----------------
1.1  Name and General Purpose
     ------------------------

     The name of this plan is the  Herley  Industries,  Inc.  2006 New  Employee
Stock Option Plan (hereinafter called the "Plan").  The Plan is intended to be a
broadly-based  incentive  plan  which  enables  Herley  Industries,   Inc.  (the
"Company")  and its  subsidiaries  and  affiliates  to foster  and  promote  the
interests  of the Company by  attracting  new  employees to the Company who will
contribute to the Company's success by their ability, ingenuity and industry, to
enable such employees 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
     -----------

     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.

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     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-(2) 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  more than fifty (50%) 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.   "Committee"  means the  Committee  referred  to in Section  1.4 of the
          Plan.

     e.   "Common  Stock" means shares of the Common  Stock,  par value $.10 per
          share, of the Company.

     f.   "Company" means Herley Industries, Inc., a corporation organized under
          the laws of the State of Delaware (or any successor corporation).

     g.   "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 the NASDAQ on such date, Fair Market Value shall
          be determined by the Committee.

     h.   "New  Employee"  means a person  who has not been an  employee  of the
          Company   or  any   subsidiary   within  24  months  of  the  date  of
          determination.

     i.   "Non-Employee Director" shall have the meaning set forth in Rule 16(b)
          (3)   promulgated   by  the   Securities   and   Exchange   Commission
          ("Commission").

     j.   "Option" means any option to purchase  Common Stock under Section 2 of
          the Plan.

     k.   "Option Agreement" means the option agreement described in Section 2.4
          of the Plan.

     l.   "Optionee  Participant"  means  any new  employee  of the  Company,  a
          Subsidiary or an Affiliate whose options are issued in connection with
          his  or her  employment  and  who is  selected  by  the  Committee  to
          participate in the Plan.

     m.   "Participent" means any Option Participant or Shares Participant.

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     n.   "Restricted  Shares" and  "Restricted  Period" shall have meanings set
          forth in Section 3 of the Plan.

     o.   "Share   Participant"  means  any  new  employee  of  the  Company,  a
          Subsidiary  or  an  Affiliate  who  received   Restricted   Shares  in
          connection  with  his or her  employment  and who is  selected  by the
          Committee or Board to participate in the Plan.

     p.   "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.

     q.   "Total  Disability"  means accidental  bodily injury or sickness which
          wholly and  continuously  disables a  Participant.  The  Committee  or
          Board,  whose decisions shall be final,  shall make a determination of
          Total Disability.

1.3  Structure of The Plan
     ---------------------

     The Plan shall be divided into two (2) separate equity programs:

     (i)  the Option  Grant  Program  under which  eligible  persons  ("Optionee
          Participants") may, at the discretion of the Board, be granted options
          to purchase shares of common stock; and

     (ii) the Restricted  Shares Issuance  Program under which eligible  persons
          ("Share  Participants") may, at the discretion of the Board, be issued
          shares  of  common  stock  subject  to the  restrictions  set forth in
          Section 3.2 of the Plan ("Restricted Shares").

     The  provisions of Articles One shall apply to both equity  programs  under
the Plan and shall  accordingly  govern the  interests of all persons  under the
Plan.

     The Board or Committee  shall have full  authority to  determine,  (i) with
respect  to the  grants  made under the Option  Grant  Program,  which  eligible
persons are to receive the option grants,  the time or times when each option is
to become  exercisable,  the vesting  schedule and events (if any) applicable to
the  option  shares  and the  maximum  term for  which  the  option is to remain
outstanding,  and (ii) with respect to stock issuances made under the Restricted
Shares  Issuance  Program,  which  eligible  persons  are to receive  such stock
issuances,  the time or times when those issuances are to be made, the number of
shares to be issued to each Participant, and the vesting schedule and events (if
any) applicable to the issued shares.

     The Board or Committee shall have the absolute  discretion  either to grant
options  in  accordance  with the  Option  Grant  Program  or to issue  stock in
accordance with the Restricted Shares Issuance Program.

1.4  Administration of the Plan
     --------------------------

     The Plan shall be administered  by the Board or by the Committee  appointed
by the Board consisting of two or more members of the Board all of whom shall be
Non-Employee  Directors.  The Committee shall serve at the pleasure of the Board

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and shall have such powers as the Board may, from time to time, confer upon it.

     Subject to this Section 1.4,  the  Committee or Board,  as the case may be,
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  or Board,  as the case may be,  shall  keep  minutes of its
meetings  and of  action  taken by it  without  a  meeting.  A  majority  of the
Committee or Board 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 or Board without a meeting, shall
constitute the acts of the Committee.

1.5  Eligibility
     -----------

     Options and  Restricted  Shares may be granted only to new employees of the
Company or a Subsidiary or Affiliate whose options are issued in connection with
his or her employment as a new employee.

1.6  Shares
     ------

     The aggregate  number of shares reserved for issuance  pursuant to the Plan
shall be  600,000  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.

1.7  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  and with  respect to grants of  Restricted  Shares,  in the
number  and  kind  of  Shares  covered  thereby,  shall,  to the  extent  deemed
appropriate  by the  Committee  or Board,  as the case may be, 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 or
Board 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

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shares or other  securities  which, at such time are subject to Options and with
respect to grants of Restricted Shares, in the number and kind of Shares covered
thereby.

     In the event of a Change in Control (a) all Options outstanding on the date
of such Change in Control shall 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; and (c) all
Restricted Shares shall become immediately vested.

1.8  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.

1.9  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.

1.10 Administrative Expenses
     -----------------------

     The entire expense of administering the Plan shall be borne by the Company.

1.11 General Conditions
     ------------------

     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
          alter or impair any right theretofore granted to any Participant.

     b.   With the consent of the Participant affected thereby, the Committee or
          Board may amend or modify any outstanding  Option or Restricted Shares
          theretofore  granted in any manner not inconsistent  with the terms of
          the Plan,  including,  without  limitation,  and  irrespective  of the
          provisions of Section 2.3(c) below, to accelerate the date or dates as
          of  which  an  installment  of an  Option  becomes  exercisable  or to
          accelerate the termination of a Restricted Period;  provided, that the
          Committee or Board shall not have the right to reprice any outstanding
          Options.

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     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  or  service  with  the  Company  (or  such
          Subsidiary or Affiliate) at any time.

     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.

1.12 Compliance with Applicable Law
     ------------------------------

     Notwithstanding  any other  provision of the Plan, the Company shall not be
obligated  to issue any shares of Common Stock upon the exercise of an option or
the vesting of  Restricted  Shares  granted  under the Plan, 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.

1.13 Effective Dates
     ---------------

     The Plan was  adopted  by the  Board on  August  1,  2006.  The Plan  shall
terminate on July 31, 2016.

SECTION 2.  OPTION GRANTS

2.1  Authority of Committee
     ----------------------

     Subject to the provisions of the Plan, the Committee or Board,  as the case
may be,  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.

     Options granted under the Plan shall be non-qualified stock options.

     The  Committee or Board,  as the case may be,  shall have the  authority to
grant Options.

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2.2  Option Exercise Price
     ---------------------

     The exercise  price set forth in the Option  Agreement at the time of grant
shall not be less than the Fair  Market  Value of the  Common  Stock at the time
that 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  Option Grants
     -------------

     Each Option will be subject to the following provisions:

     a.   Term of Option
          --------------

          An Option  will be for a term of not more than ten years from the date
          of grant.

     b.   Exercise
          --------

          (i)  By an Employee:

               Unless  otherwise  provided  by the  Committee  and except in the
               manner described below upon the death of the optionee,  an Option
               may be exercised only in installments as follows:

                    o    Up to 33-1/3% on and after the first anniversary of the
                         of the date of the grant of such Option;

                    o    Up to 66-2/3% on and after the  second  anniversary  of
                         the  date of  grant  of the  date of the  grant of such
                         Option;

                    o    Up to all of the subject  shares on and after the third
                         anniversary  of the  date of  grant  of the date of the
                         grant of such  Option,  but in no event  later than the
                         expiration of the term of the Option.

               An 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 or providing  services
               to the  Company,  any parent  corporation  of the  Company or any
               Subsidiary or Affiliate,  except that,  upon  termination  of all
               such  employment  or provision of services  (other than by death,
               Total Disability, or by Total Disability followed by death in the
               circumstances  provided  below),  the  optionee  may  exercise an
               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 such  employment by Total  Disability,  all
               outstanding  options shall  immediately vest and the optionee may
               exercise such Options at any time within one year thereafter.

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               In the event of the death of an optionee (i) while an employee of
               or providing  services to the Company,  any parent corporation of
               the Company or any Subsidiary or Affiliate,  or (ii) within three
               months after  termination of all such  employment or provision of
               services  (other than for Total  Disability)  or (iii) within one
               year after termination on account of Total Disability of all such
               employment or provision of services,  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.  Such  Option  shall be
               exercisable in full for all the remaining shares covered thereby.

          (ii) By Persons other than Employees:
               -------------------------------

               If the  optionee  is not an employee of the Company or the parent
               corporation  of the Company or any  Subsidiary or Affiliate,  the
               vesting of such optionee's right to exercise his Options shall be
               established  and  determined  by the  Committee  or  Board in the
               Option Agreement covering the Options granted to such optionee.

               Notwithstanding the foregoing  provisions  regarding the exercise
               of an  Option  in the event of  death,  Total  Disability,  other
               termination  of employment or provision of services or otherwise,
               in no event  shall an Option be  exercisable  in whole or in part
               after the termination date provided in the Option Agreement.

     c. Transferability
        ---------------

     An 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.

2.4  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.

SECTION 3.  TERMS AND CONDITIONS OF GRANTS OF RESTRICTED SHARES.
            ---------------------------------------------------

3.1      General
         -------

     With  respect  to each  grant of  Restricted  Shares  under the  Plan,  the
Committee or Board, as the case may be, in its sole discretion,  shall determine
the period during which the restrictions set forth in Section 3.2 shall apply to
such Restricted Shares (the "Restricted Period"). Unless otherwise determined by
the Committee,  the Restricted Period shall not be less than 36 nor more than 60
consecutive  months  commencing  with the  first  day of the  month in which the
Restricted Shares are granted. Subject to the provisions of Section 3.3, a grant

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of Restricted Shares shall be effective for the Restricted Period and may not be
revoked.

3.2  Restrictions
     ------------

     At the time of grant of Restricted  Shares to a Participant,  a certificate
representing the number of shares of Common Stock granted shall be registered in
his name and issued to the  Participant.  The Participant  shall have the entire
beneficial ownership interest in, and all rights and privileges of a stockholder
as to, such Restricted Shares,  including the right to receive dividends and the
right to vote such Restricted Shares, subject to the following restrictions: (i)
no unvested Restricted Shares may be sold,  transferred,  assigned,  pledged, or
otherwise  encumbered  or disposed  of during the  Restricted  Period;  and (ii)
vested Restricted Shares may only be sold,  transferred or otherwise disposed of
in  compliance  with  applicable  securities  laws.  In the event of a Change in
Control,  all  restrictions  set forth  above in this  Section as to  previously
granted Restricted Shares shall lapse.

3.3  Termination of Employment
     -------------------------

     (i)  Total  Disability or Death. If a Participant  ceases to be an employee
          prior to the end of a Restricted Period by reason of Total Disability,
          death,  all  Restricted  Shares  granted  to  such  Participant  shall
          immediately  vest in Participant or in his  beneficiary or estate,  as
          the case may be, and all restrictions  applicable to such shares shall
          lapse.

     (ii) All Other  Terminations.  If a  Participant  ceases to be an  employee
          prior to the end of a  Restricted  Period  for any  reason  other than
          death,  Total Disability or Change of Control,  the Participant  shall
          immediately   forfeit  all  Restricted  Shares  then  subject  to  the
          restrictions  of Section 3.2 hereof in accordance  with the provisions
          thereof,  except that the Committee or Board may, if it finds that the
          circumstances   in  the  particular   case  so  warrant,   allow  such
          Participant to retain any or all of the Restricted Shares then subject
          to the restrictions of Section 3.2 and all restrictions  applicable to
          such retained shares shall lapse.

3.4  Vesting of Restricted Shares
     ----------------------------

     At the end of the Restricted Period or at such earlier time as provided for
in  Section  3.3  hereof  or as  the  Committee  or  Board  may  determine,  all
restrictions  applicable to the Restricted Shares shall lapse,  except that such
shares may only be sold, transferred or otherwise disposed of in compliance with
applicable securities laws.

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