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                                                                    EXHIBIT 10.5
                           AML COMMUNICATIONS, INC.

                             NONEMPLOYEE DIRECTOR

                            STOCK OPTION AGREEMENT


          THIS AGREEMENT is made as of December 15, 1995, between AML
Communications, Inc., a Delaware corporation (the "Company") and David A. Derby
(the "Optionee").

          The Optionee is a nonemployee director of the Company (a "Nonemployee
Director").

          Pursuant to the Company's Stock Incentive Plan (the "Plan") the
Optionee has been granted, as a matter of separate inducement in connection with
his engagement with the Company, an option (the "Option") to purchase shares of
the Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
on the terms and conditions set forth herein.

          This Option is not intended to qualify as an Incentive Stock Option
under Section 422A of the Internal Revenue Code (the "Code").

          Capitalized terms used herein without definition shall have the same
meaning as in the Plan.

                                   AGREEMENT

          In consideration of the foregoing and of the mutual covenants set
forth herein and other good and valuable consideration, the parties hereto agree
as follows:

          1.   SHARES OPTIONED; OPTION PRICE.  The optionee may purchase all or
any part of an aggregate of 10,000 shares of Common Stock, at the price of
$10.00 per share (which shall not be less than the greater of (A) 100% of the
Fair Market Value (as defined in the Plan) of the Common Stock on the date of
the grant of the Option or (B) the aggregate par value of such share of Common
Stock on such date.

          2.   OPTION TERM, TIMES OF EXERCISE.  Unless expired earlier pursuant
to Section 3, the Option term shall end on December 15, 2005 which in no case
shall be greater than ten years from the date of grant of this Option (the
"Expiration Date").

          At the expiration of one year from the date of grant, the Optionee
shall be entitled to exercise 25% of the Common Stock covered by this Option and
at the expiration of each year thereafter, the Optionee shall be entitled to
exercise an additional 25% of such Common Stock covered by this Option such that
the Optionee shall be entitled to exercise 100% of such Common Stock upon the
expiration of four years from the date of grant.
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          3.   TERMINATION OF NONEMPLOYEE DIRECTOR STATUS; EFFECT ON OPTIONS.

               (a) In the event the Optionee shall cease to be a Nonemployee
Director for any reason, (i) all outstanding Options which have been granted to
such Nonemployee Director and which have not yet become vested shall immediately
expire, and (ii) all outstanding Options which have been granted to such
Nonemployee Director and which have become vested shall expire on the second
anniversary of the date upon which the optionee shall cease to be a Nonemployee
Director.

               (b) Notwithstanding anything to the contrary herein, if Optionee
shall die at any time after the date on which he or she ceases to be a
Nonemployee Director and prior to the date on which the Option is terminated
pursuant to Section 3(a), the Option shall terminate on the earlier of the
Expiration Date or the first anniversary of the Optionee's death.

          4.   EXERCISE: PAYMENT FOR AND DELIVERY OF STOCK AND PAYMENT OF INCOME
TAXES.  This Option may be exercised only by the Optionee or his transferees by
will or the laws of descent and distribution.  This Option may be exercised by
giving written notice of exercise to the Company specifying the number of shares
of Common Stock to be purchased and the total purchase price.

          Payment of the exercise price of this Option and the Optionee's tax
withholding obligation, if any, with respect to this Option shall be made in
full in cash concurrently with the exercise of such Option; provided, however,
that the payment of such exercise price and/or tax withholding may instead be
made, in whole or in part, by any one or more of the following:

                    (i)  the delivery of previously owned shares of capital
          stock of the Company, provided that the Company is not then prohibited
          from purchasing or acquiring shares of its capital stock or such other
          property; or

                    (ii) the delivery, concurrently with such exercise and in
          accordance with Section 220.3(e)(4) of Regulation T promulgated under
          the Securities Exchange Act of 1934, as amended, of a properly
          executed exercise notice for such Nonemployee Director Option and
          irrevocable instructions to a broker promptly to deliver to the
          Company a specified dollar amount of the proceeds of a sale of or a
          loan secured by the Common Shares issuable upon exercise of such
          Nonemployee Director Option.

          5.   RIGHTS IN SHARES BEFORE ISSUANCE AND DELIVERY.  Neither the
Optionee nor his transferees by will or the laws of descent and distribution
shall be, or have any rights or privileges of, a stockholder of the Company with
respect to any shares of Common Stock issuable upon exercise of this Option,
unless and until certificates representing such shares shall have been issued
and delivered.

          6.   ADJUSTMENTS IN STOCK.  In the event that the outstanding
securities of the class then subject to the Option are increased, decreased or
exchanged for or converted into cash, property and/or a different number or kind
of securities, or cash, property and/or securities are distributed in respect of
such outstanding securities, in either case as a result of a reorganization,
merger, consolidation, recapitalization, reclassification, dividend 

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(other than a regular, quarterly cash dividend) or other distribution, stock
split, reverse stock split or the like, or in the event that substantially all
of the property and assets of the Company are sold, then, unless such event
shall cause the Option to terminate pursuant to Section 9 hereof, the Committee
shall make appropriate and proportionate adjustments in the number and type of
shares or other securities or cash or other property that may thereafter be
acquired upon the exercise of the Option; provided, however, that any such
adjustments in the Option shall be made without changing the aggregate exercise
price of the then unexercised portion of the Option.

          7.   NONTRANSFERABILITY OF OPTION.  This Option is not transferable
other than by will or the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by the Optionee or the
Optionee's guardian or legal representative.  This Option shall not be otherwise
transferred, assigned, pledged, hypothecated or otherwise disposed of in any
way, whether by operation of law or otherwise, and shall not be subject to
execution, attachment or similar process.  Upon any attempt to transfer this
Option otherwise than by will or the laws of descent and distribution or to
assign, pledge, hypothecate or otherwise dispose of this Option, or upon the
levy of an execution, attachment or similar process upon this Option, this
Option shall immediately terminate and become null and void.

          8.   LEGALITY. No securities issuable upon exercise of this Option
shall be issued and delivered unless and until, in the opinion of the Company,
such securities may be issued and delivered without causing the Company to be in
violation of or incur any liability under any federal, state or other securities
law, any requirement of any securities-exchange listing agreement to which the
Company may be a party, or any other requirement of law or of any regulatory
body having jurisdiction over the Company.

          9.   TERMINATING TRANSACTIONS.  Upon (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger or consolidation of
the Company (individually or collectively, a "Merger") with one or more
corporations as a result of which the Company goes out of existence or becomes a
subsidiary of another corporation, or (iii) the acquisition of all or
substantially all of the assets or more than eighty percent (80%) of the then
outstanding stock of the Company by another entity, Options granted under the
Plan shall terminate unless provisions be made in writing in connection with
such transaction for the assumption of such Options or the substitution for such
Options of a new option covering the stock of a successor corporation, or a
parent or subsidiary thereof or of the Company, with appropriate adjustments as
to the number and kind of shares and prices, in which event such Options shall
continue in the manner and under the term so provided.

          10.  NOTICES.  Any notice to be given to the Company shall be
addressed to the Company in care of its Secretary at its principal office, and
any notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto, or as such other address as the Optionee may
hereafter designate in writing to the Company.  Any such notice shall have been
deemed duly given when deposited in a post office or branch post office
regularly maintained by the United States Government.

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          11.  LAWS APPLICABLE TO CONSTRUCTION.  This Agreement has been
executed and delivered the day and year first above written at Camarillo,
California, and this Agreement shall be construed and enforced in accordance
with the laws of the State of California.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by an authorized officer, attested by its Secretary or
one of its Assistant Secretaries, and the Optionee has hereunto set his hand on
the day and year first above written.


AML COMMUNICATIONS, INC.                     OPTIONEE

 
By:      /s/ Jacob Inbar       /s/ David A. Derby
         -------------------   --------------------
         Jacob Inbar           David A. Derby
         President & CEO
 
ATTEST:                        Social Security No.:
         /s/ Edwin J. McAvoy   ###-##-####
         -------------------   --------------------
         Edwin J. McAvoy
         Secretary             Address:
                               304 Enterprise St.
                               --------------------
                               Escondido, CA  90049
                               --------------------

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