t69521_13d.htm

0001188112-11-000046.txt : 20110107 0001188112-11-000046.hdr.sgml : 20110107 20110107161133 ACCESSION NUMBER: 0001188112-11-000046 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20110107 DATE AS OF CHANGE: 20110107 GROUP MEMBERS: DANIEL J. DONOGHUE GROUP MEMBERS: MICHAEL R. MURPHY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HERLEY INDUSTRIES INC /NEW CENTRAL INDEX KEY: 0000047035 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 232413500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0909 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-34884 FILM NUMBER: 11517669 BUSINESS ADDRESS: STREET 1: 3061 INDUSTRY DRIVE CITY: LANCASTER STATE: PA ZIP: 17603-4092 BUSINESS PHONE: 7173972777 MAIL ADDRESS: STREET 1: 3061 INDUSTRY DRIVE CITY: LANCASTER STATE: PA ZIP: 17603-4092 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY MICROWAVE SYSTEMS INC DATE OF NAME CHANGE: 19900510 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY INDUSTRIES INC DATE OF NAME CHANGE: 19831103 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Discovery Group I, LLC CENTRAL INDEX KEY: 0001312548 IRS NUMBER: 300075077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 191 N. WACKER DRIVE SUITE 1685 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: (312) 265-96000 MAIL ADDRESS: STREET 1: 191 N. WACKER DRIVE SUITE 1685 CITY: CHICAGO STATE: IL ZIP: 60606 SC 13D 1 t69521_13d.htm SCHEDULE 13D t69521_13d.htm

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

Herley Industries, Inc.

(Name of Issuer)

Common Stock, $0.10 par value per share

(Title of Class of Securities)

427398102

(CUSIP Number)

Michael R. Murphy

Discovery Group I, LLC

191 North Wacker Drive

Suite 1685

Chicago, Illinois 60606

Telephone Number: (312) 265-9600

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

December 28, 2010

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 427398102

	1.	Names of Reporting Persons. Discovery Group I, LLC

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) AF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 730,790

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 730,790

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 730,790

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.2%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 427398102

	1.	Names of Reporting Persons. Daniel J. Donoghue

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) AF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States of America

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 730,790

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 730,790

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 730,790

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.2%

	14.	Type of Reporting Person (See Instructions) OO

CUSIP No. 427398102

	1.	Names of Reporting Persons. Michael R. Murphy

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) AF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States of America

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power None.

			8.	Shared Voting Power 730,790

			9.	Sole Dispositive Power None.

			10.	Shared Dispositive Power 730,790

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 730,790

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 5.2%

	14.	Type of Reporting Person (See Instructions) IN

Item 1.		Security and Issuer

		This statement relates to the Common Stock, $0.10 par value per share (the “Common Stock”), of Herley Industries, Inc., a Delaware corporation (the “Company”), which has its principal executive offices at 3061 Industry Drive, Lancaster, Pennsylvania 17603.

Item 2.		Identity and Background

		This statement is being jointly filed by the following persons (the “Reporting Persons”): Discovery Group I, LLC (“Discovery Group”) is a Delaware limited liability company primarily engaged in the business of investing in securities. Daniel J. Donoghue is a Managing Member of Discovery Group and of various related entities, which is his principal occupation. Michael R. Murphy is a Managing Member of Discovery Group and of various related entities, which is his principal occupation. Both Mr. Donoghue and Mr. Murphy are United States citizens. The business address of each of the Reporting Persons is 191 North Wacker Drive, Suite 1685, Chicago, Illinois 60606.

		During the past five years, none of the Reporting Persons have been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.

Item 3.		Source and Amount of Funds or Other Consideration

		The total purchase price for the 730,790 shares of Common Stock beneficially owned by Discovery Group and Messrs. Donoghue and Murphy as of January 6, 2011 was approximately $11,214,615. The source of such funds was the assets of two private investment partnerships (collectively, the “Partnerships”) over which Discovery Group exercises discretionary investment management authority, and proceeds of margin loans under margin loan facilities maintained in the ordinary course of business by the Partnerships with a broker on customary terms and conditions. The Partnerships are the legal owner of all of the Common Stock beneficially owned by Discovery Group and Messrs. Donoghue and Murphy.

Item 4.		Purpose of Transaction

		The Reporting Persons acquired beneficial ownership of the shares of Common Stock reported herein as part of their investment activities on behalf of the Partnerships. The Reporting Persons acquired the shares of Common Stock reported herein because they believe that the trading prices of the Common Stock do not adequately reflect the potential value of the Company's underlying business and assets. The Reporting Persons intend to review and evaluate their investment in the Common Stock on an ongoing basis and may, depending upon their evaluation of the business and prospects of the Company, or such other considerations as they may deem relevant, determine to increase, decrease, or dispose of their holdings of Common Stock. As a part of such review and evaluation, the Reporting Persons may hold discussions with the Company's management and directors, other shareholders and other interested parties.


	Except as otherwise described in this Item 4, the Reporting Persons do not have present plans or proposals that relate to or would result in any of the following (although the Reporting Persons reserve the right to develop such plans or proposals or any other plans relating to the Company and to take action with respect thereto): (i) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (ii) an extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving the Company or any of its subsidiaries; (iii) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (iv) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or te rm of directors or to fill any existing vacancies on the board; (v) any material change in the present capitalization or dividend policy of the Company; (vi) any other material change in the Company’s business or corporate structure; (vii) changes in the Company's certificate of incorporation, bylaws, or instruments corresponding thereto or other actions that may impede the acquisition of control of the Company by any person; (viii) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any action similar to any of those enumerated above.

Item 5.	Interest in Securities of the Issuer

	The information concerning percentages of ownership set forth below is based on 14,043,884 shares of Common Stock reported outstanding as of December 6, 2010 in the Company’s most recent Quarterly Report on Form 10-Q, for the period ended October 31, 2010. Discovery Group beneficially owns 730,790 shares of Common Stock as of January 6, 2011, which represents 5.2% of the outstanding Common Stock. Mr. Donoghue beneficially owns 730,790 shares of Common Stock as of January 6, 2011, which represents 5.2% of the outstanding Common Stock. Mr. Murphy beneficially owns 730,790 shares of Common Stock as of January 6, 2011, which represents 5.2% of the outstanding Common Stock. Discovery Group is the sole general partner of one of the Partnerships and has sole discretionary investment authority with respect to the other Partnership’s investment in the Common Stock. Messrs. Donoghue and Murphy are the sole managing members of Discovery Group. As a consequence, Discovery Group and Messrs. Donoghue and Murphy may be deemed to share beneficial ownership of all of the shares of Common Stock owned by both of the Partnerships.

	The transactions in Common Stock effected by the Reporting Persons during the past 60 days are set out in Exhibit 1 hereto. No person other than the Partnerships is known to any Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any of the shares of Common Stock reported herein.

Item 6.		Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

		There are no contracts, arrangements, understandings or relationships (legal or otherwise) between or among any of the Reporting Persons and any other person with respect to any securities of the Company other than the governing documents of Discovery Group and the Partnerships, the margin loan facilities referred to under Item 3 above, the Joint Filing Agreement of the Reporting Persons with respect to this Schedule 13D included as Exhibit 2 to this Schedule 13D, and the Powers of Attorney granted by Messrs Donoghue and Murphy with respect to reports under Section 13 of the Securities Exchange Act of 1934, as amended, which Powers of Attorney are included as Exhibit 3 and Exhibit 4, respectively, to this Schedule 13D.

Item 7.	Material to Be Filed as Exhibits

	Exhibit 1: List of transactions by Reporting Persons in the Company’s Common Stock during the 60-day period preceding this filing.
	Exhibit 2: Joint Filing Agreement dated as of January 7, 2011, by and among Discovery Group; Daniel J. Donoghue; and Michael R. Murphy.
	Exhibit 3: Power of Attorney of Daniel J. Donoghue, dated as of April 28, 2008.
	Exhibit 4: Power of Attorney of Michael R. Murphy, dated as of April 28, 2008.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	January 7, 2011
	Date
	DISCOVERY GROUP I, LLC By: Michael R. Murphy*
	Signature
	Michael R. Murphy, Managing Member
	Name/Title

	Daniel J. Donoghue*
	Signature
	Daniel J. Donoghue
	Name/Title

	Michael R. Murphy*
	Signature
	Michael R. Murphy
	Name/Title


	*By: /s/ Mark Buckley
	Mark Buckley Attorney-in-Fact for Daniel J. Donoghue Attorney-in-Fact for Michael R. Murphy

Exhibit Index

Exhibit 1		List of transactions by Reporting Persons in the Company’s Common Stock during the 60-day period preceding this filing.
Exhibit 2		Joint Filing Agreement dated as of January 7, 2011, by and among Discovery Group; Daniel J. Donoghue; and Michael R. Murphy.

Exhibit 3		Power of Attorney of Daniel J. Donoghue, dated as of April 28, 2008.

Exhibit 4		Power of Attorney of Michael R. Murphy, dated as of April 28, 2008.

EX-1 2 ex1.htm EXHIBIT 1 ex1.htm

EXHIBIT 1

TRANSACTIONS DURING PAST 60 DAYS

The Reporting Persons engaged in the following transactions in shares of Common Stock of the Company during the past 60 days. Such transactions involved the purchase of shares on the Nasdaq National Market System. The prices reported below reflect the weighted average purchase price of the shares of Common Stock purchased on the relevant date. The Reporting Persons hereby undertake to provide upon request to the SEC staff full information regarding the number of shares and prices at which each transaction was effected.

Date	Type	Price	Shares
11/01/20101	Purchase	$16.4641	9500
11/02/20102	Purchase	16.3633	300
11/03/20103	Purchase	16.7106	3094
11/04/2010	Purchase	17.000	25000
11/08/20104	Purchase	16.8002	6486
11/09/20105	Purchase	16.7296	4000
11/10/20106	Purchase	16.7175	6152
11/11/20107	Purchase	16.7312	4000
11/12/20108	Purchase	16.309	3392
11/16/20109	Purchase	15.9546	13971
11/17/201010	Purchase	16.1831	3500
11/18/201011	Purchase	16.3809	1593
11/19/201012	Purchase	16.5974	1600
11/22/201013	Purchase	16.368	2500
11/23/201014	Purchase	16.0214	5358
11/24/201015	Purchase	16.4356	1625

_________________________

1 This transaction was executed in multiple trades at prices ranging from $16.25 - 16.65.

2 This transaction was executed in multiple trades at prices ranging from $16.34 - 16.41.

3 This transaction was executed in multiple trades at prices ranging from $16.65 - 16.75.

4 This transaction was executed in multiple trades at prices ranging from $16.67 - 16.96.

5 This transaction was executed in multiple trades at prices ranging from $16.65 - 16.75.

6 Due to incomplete data available to the Reporting Persons, the Reporting Persons are reporting the average price of transactions effected on this date.

7 This transaction was executed in multiple trades at prices ranging from $16.70 - 16.75.

8 This transaction was executed in multiple trades at prices ranging from $16.25 - 16.40.

9 This transaction was executed in multiple trades at prices ranging from $15.90 - 16.13.

10 This transaction was executed in multiple trades at prices ranging from $16.15 - 16.20.

11 This transaction was executed in multiple trades at prices ranging from $16.38 - 16.50.

12 This transaction was executed in multiple trades at prices ranging from $16.56 - 16.60.

13 This transaction was executed in multiple trades at prices ranging from $16.28 - 16.50.

14 This transaction was executed in multiple trades at prices ranging from $16.00 - 16.05.

15 This transaction was executed in multiple trades at prices ranging from $16.26 - 16.50.


Date	Type	Price	Shares
11/29/201016	Purchase	$16.1251	1986
11/30/201017	Purchase	16.3283	900
12/01/201018	Purchase	16.4772	9750
12/02/201019	Purchase	16.3959	1284
12/03/201020	Purchase	16.4741	9695
12/06/201021	Purchase	16.5025	5500
12/07/201022	Purchase	16.5091	15323
12/08/201023	Purchase	16.4904	5700
12/09/2010	Purchase	16.21	700
12/10/201024	Purchase	16.1662	13758
12/13/201025	Purchase	16.6089	15148
12/14/201026	Purchase	16.5381	2153
12/15/201027	Purchase	16.8876	8400
12/16/201028	Purchase	16.9957	7000
12/20/201029	Purchase	17.2414	1516
12/21/2010	Purchase	17.25	8452
12/28/201030	Purchase	17.7053	4191
12/30/2010	Purchase	17.75	50
12/31/201031	Purchase	17.5909	5000
1/03/201132	Purchase	17.748	3437
1/04/201133	Purchase	17.427	6697
1/05/201134	Purchase	17.4514	5800
1/06/201135	Purchase	17.2157	6623

__________________________

16 This transaction was executed in multiple trades at prices ranging from $16.07 - 16.10.

17 This transaction was executed in multiple trades at prices ranging from $16.25 - 16.40.

18 This transaction was executed in multiple trades at prices ranging from $16.44 - 16.50.

19 Due to incomplete data available to the Reporting Persons, the Reporting Persons are reporting the average price of transactions effected on this date.

20 This transaction was executed in multiple trades at prices ranging from $16.41 - 16.50.

21 This transaction was executed in multiple trades at prices ranging from $16.49 - 16.52.

22 This transaction was executed in multiple trades at prices ranging from $16.48 - 16.55.

23 This transaction was executed in multiple trades at prices ranging from $16.46 - 16.50.

24 This transaction was executed in multiple trades at prices ranging from $16.00 - 16.64.

25 This transaction was executed in multiple trades at prices ranging from $16.53 - 16.69.

26 This transaction was executed in multiple trades at prices ranging from $16.52 - 16.56.

27 This transaction was executed in multiple trades at prices ranging from $16.82 - 17.00.

28 This transaction was executed in multiple trades at prices ranging from $16.90 - 17.00.

29 This transaction was executed in multiple trades at prices ranging from $17.21 - 17.25.

30 This transaction was executed in multiple trades at prices ranging from $17.62 – 17.75.

31 This transaction was executed in multiple trades at prices ranging from $17.33 - 17.70.

32 This transaction was executed in multiple trades at prices ranging from $17.74 - 17.75.

33 This transaction was executed in multiple trades at prices ranging from $17.09 - 17.64.

34 This transaction was executed in multiple trades at prices ranging from $17.39 - 17.50.

35 This transaction was executed in multiple trades at prices ranging from $17.15 -17.29.

EX-2 3 ex2.htm EXHIBIT 2 ex2.htm

EXHIBIT 2

JOINT FILING AGREEMENT

The undersigned hereby agree to the joint filing of the Schedule 13D to which this Agreement is attached.

Dated: January 7, 2011

	DISCOVERY GROUP I, LLC


	By Michael R. Murphy*
	Michael R. Murphy
	Managing Member


	Daniel J. Donoghue*
	Daniel J. Donoghue

	Michael R. Murphy*
	Michael R. Murphy

	*By: /s/ Mark Buckley Mark Buckley Attorney-in-Fact for Daniel J. Donoghue Attorney-in-Fact for Michael R. Murphy

EX-3 4 ex3.htm EXHIBIT 3 ex3.htm

EXHIBIT 3

POWER OF ATTORNEY

The undersigned, Daniel J. Donoghue, hereby appoints Mark Buckley his true and lawful attorney-in-fact and agent, with full power to execute and file with the United States Securities and Exchange Commission and any stock exchange or similar authority, for and on his behalf in any and all capacities, any and all reports required to be filed pursuant to Section 13 of the Securities Exchange Act of 1934 and the rules thereunder on Schedule 13D or 13G, any and all amendments to such reports, with all exhibits, and any other forms or documents as may be necessary in connection with the filing of such reports with the United States Securities and Exchange Commission and any stock exchange or similar authority, granting unto said attorney full power and authority to do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete, as fully as the undersigned might or could do in person.

This Power of Attorney shall remain in full force and effect until revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact and agent.

IN WITNESS WHEREOF the undersigned has caused this Power of Attorney to be executed this 28th day of April, 2008.



		/s/ Daniel J. Donoghue
		Daniel J. Donoghue

STATE OF ILLINOIS	)
	)	SS.
COUNTY OF COOK	)

I, Kareema M. Cruz, a Notary Public in and for the County of Cook, State of Illinois, DO HEREBY CERTIFY that Daniel J. Donoghue, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he signed and delivered the said instrument as his own free and voluntary act, for the uses and purposes therein set forth.

Given under my hand and notarial seal, this 28th day of April, 2008.



		/s/ Kareema M. Cruz
		Notary Public

EX-4 5 ex4.htm EXHIBIT 4 ex4.htm

EXHIBIT 4

POWER OF ATTORNEY

The undersigned, Michael R. Murphy, hereby appoints Mark Buckley his true and lawful attorney-in-fact and agent, with full power to execute and file with the United States Securities and Exchange Commission and any stock exchange or similar authority, for and on his behalf in any and all capacities, any and all reports required to be filed pursuant to Section 13 of the Securities Exchange Act of 1934 and the rules thereunder on Schedule 13D or 13G, any and all amendments to such reports, with all exhibits, and any other forms or documents as may be necessary in connection with the filing of such reports with the United States Securities and Exchange Commission and any stock exchange or similar authority, granting unto said attorney full power and authority to do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete, as fully as the undersigned might or could do in person.

This Power of Attorney shall remain in full force and effect until revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact and agent.

IN WITNESS WHEREOF the undersigned has caused this Power of Attorney to be executed this 28th day of April, 2008.



		/s/ Michael R. Murphy
		Michael R. Murphy

STATE OF ILLINOIS	)
	)	SS.
COUNTY OF COOK	)

I, Kareema M. Cruz, a Notary Public in and for the County of Cook, State of Illinois, DO HEREBY CERTIFY that Michael R. Murphy, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he signed and delivered the said instrument as his own free and voluntary act, for the uses and purposes therein set forth.

Given under my hand and notarial seal, this 28th day of April, 2008.



		/s/ Kareema M. Cruz
		Notary Public